17 October 2015 — Saturday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
The gold price traded a bit lower through most of Far East and half of the London trading session on their Fridays, before catching a bit of a bid at the COMEX open. However, all attempts by gold to rally above Thursday’s close were quietly turned aside—and then some kind soul sold the price down about five or so dollars after the COMEX close when there was virtually zero liquidity in the market.
Gold traded well within a ten dollar price range on Friday—and the high and low ticks aren’t worth my effort to look up.
Gold finished the day in New York at $1,177.70 spot, down $5.70 from Thursday’s close. Net volume was pretty light at around 105,500 contracts.
What I said about the gold price can be equally said about the silver price action yesterday, as the rally at the COMEX open wasn’t allowed to get above Thursday’s closing price. The rest is the same as well.
The low and high ticks were reported by the CME Group as 15.935 and $16.165 in the December contract.
Silver finished the Friday session at $16.03 spot, down 9 cents from Thursday. Net volume was pretty light here as well at just under 30,000 contracts.
The platinum price followed the gold and silver price right up to and including the rally at the COMEX open—and away it went to the upside. The rally ended, or got capped, at 12:30 p.m. in New York—and from there it got sold down ten dollars into the close. Platinum finished the day at $1,013 spot, up 9 dollars from Thursday, but was up $19 the ounce at its high.
Palladium, like the gold and silver, wasn’t allowed past its Thursday closing price, either. Like platinum, its high tick came at 12:30 p.m. in New York—and it also got sold off for the remainder of the day, finishing the Friday session at $694 spot, down an even ten bucks.
The dollar index closed at 94.44 late on Thursday afternoon in New York. It rallied a handful of basis points in the early going Hong Kong time, before sinking back to just below unchanged about twenty minutes before London opened. The subsequent rally, such as it was, peaked out at 94.77 around 11:30 a.m. EDT—and after a 25 basis point down/up dip, closed at 94.72—up 28 basis points on the day.
Here’s the 6-month U.S. dollar chart so you can get the ‘bigger picture’ view.
The gold stocks opened basically unchanged, hitting their high ticks around 10:40 a.m. in New York trading—and then headed down hill from there. The HUI closed on its absolute low tick, down 3.12 percent.
The silver stocks barely got a taste of positive territory shortly after the open—and most of the loses were in by shortly after 12 o’clock noon EDT. There was a feeble rally until 2 p.m.—and then they sagged a bit more into the close. Nick Laird’s Intraday Silver Sentiment Index closed lower by 3.92 percent. Nick was out of town yesterday and couldn’t update all his charts, including this one.
I was more than underwhelmed by the performance of the precious metal shares yesterday—and that includes the share price action on Wednesday and Thursday as well.
The CME Daily Delivery Report showed that 3 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.
The CME Preliminary Report for the Friday trading session showed that gold open interest in October took another hit, as it declined by 161 contracts, leaving just 773 left. Silver’s October o.i. increased by 6 contracts to 18.
After two big deposits in GLD on Wednesday and Thursday, there was an equal big withdrawal yesterday, as an authorized participant took out 201,029 troy ounces. I would guess that this was done in order to prevent a unit holder from exceeding the 5 percent SEC reporting limit—and having to go public with their holdings if they did.
And as of 7:36 p.m. EDT yesterday evening, there were no reported changes in SLV. There have been no deposits in SLV at all this month despite the $1.50 plus rally in the silver price.
As I said in yesterday’s column—“Ted figures that the SLV ETF is owed at least 13 million troy ounces. I’m sure that the silver is available somewhere on Planet Earth at some price. But rather than bid the silver price to the moon to get it, the authorized participants [most likely JPMorgan] is shorting the shares in lieu of depositing real metal.” Nothing has changed in this respect since I wrote those words on Thursday evening.
There was another smallish sales report from the U.S. Mint on Friday. They sold 500 troy ounces of gold eagles—500 one-ounce 24K gold buffaloes—and 43,000 silver eagles.
Month-to-date the mint has sold 25,500 troy ounces of gold eagles—8,500 one-ounce 24K gold buffaloes—and 2,005,000 silver eagles. Ted says that the mint still appears to peddle-to-the-metal in silver eagle production, but it’s more than obvious that the big buyer of gold eagles/buffaloes has stepped back, at least for the moment—and I know that Ted will have more to add to this in his weekly commentary this afternoon.
Once again there was no in/out activity in gold at the COMEX-approved depositories on Thursday, but it was another busy day in silver, as 1,022,392 troy ounces were reported received—and another 503,872 troy ounces were shipped out the door for parts unknown. There was no activity at JPMorgan’s depository. The link to that action is here.
It was another day of abnormally high activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday. There were 366 kilobars received—and 11,696 kilobars were shipped out. As is usually the case, all of the activity was at Brink’s, Inc.—and the link to it, in troy ounces, is here.
The numbers in the Commitment of Traders Report yesterday were worse than awful.
In silver, the Commercial net short position blew out by an incredible 9,124 contracts, or 45.6 million troy ounces. The Commercial net short position now stands at 293.1 million troy ounces. The Big 4 added 2,800 contracts to their short positions—and the ‘5 through 8’ traders added a further 1,900 or short contracts as well.
And as bad as the headline number was, it was even worse under the hood in the Disaggregated COT Report, as the technical fund traders in the Managed Money category purchased 6,791 long contracts—and reduced their short position by 7,030 contracts, for a total of 13,812 contracts.
I forgot to ask Ted by how much JPMorgan increased its short position during the reporting week, but I would guess that it’s a very large percentage of the 2,800 contracts that the Big 4 traders went short.
Passing through copper on the way to the gold COT Report, the Commercial net short position in that metal also increased by a chunky 9,124 contracts.
In gold, the Commercial net short position in the legacy COT Report, exploded by 30,025 contracts, or 3.00 million troy ounces. The Commercial net short position in gold now sits at 11.85 million troy ounces. The Big 4 added 3,700 contracts to their short positions—and the ‘5 through 8’ traders added about 6,400 short contracts to their short positions as well. The rest of the contracts in the Commercial category were made up of Ted Butler’s raptors [the Commercial traders other than the Big 8] selling long positions for a profit. The same happened in silver with these small commercial traders as well.
Like in silver, it was worse under the hood in the Disaggregated COT Report as well, as the Managed Money traders added 12,936 long contracts—and covered/sold 18,439 short contracts, for a total of 31,375 contracts.
And as Ted and I discussed on the phone yesterday afternoon, as butt-ass ugly as these numbers are, they are considerably worse when you include the deterioration that occurred in both precious metals on Wednesday and Thursday.
There’s no way to sugar-coat this, the COT Report was horrid.
And as an aside, the Commercial net short position in palladium actually declined during the reporting week, but the Commercial net short position in platinum went the other direction in a big way, as the Commercial net short position increased by a huge 7,250 contracts—and is materially worse since the Tuesday cut-off.
Nick Laird is off this weekend giving away his daughter in marriage, so I don’t have a “Days to Cover” chart for you based on Tuesday’s COT Report. But my back-of-the envelope calculation shows that the Big 4 traders are short 130 days of world silver production—and the ‘5 through 8’ large traders are net short another 62 days of world silver production, for a total of 192 days—and it’s materially worse since the Tuesday cut-off. Last week’s “Days to Cover” chart was 180 days for the Big 8 short holders.
I’ll have more comments on ‘all of the above’ in The Wrap.
Since Nick is not around this weekend, I don’t have the Shanghai Gold Exchange withdrawals either. The SGE chart, along with the ‘Days to Cover’ chart will put in an appearance in my Tuesday column.
I was merciless in my editing yesterday—and combined with what I considered to be a very slow news day, I don’t have much in the way of stories, which suits me just fine. You too, I’m sure.
CRITICAL READS
Looking Back in Anger — Doug Noland
The thesis remains that the global Bubble has been pierced. In a world of open-ended QE, unprecedented policy activism and Trillions of trend-following and performance-chasing finance, there will be erratic ebb and flow to market activity – including EM. There were more announcements of hedge funds closing shop this week. For the industry overall, I doubt the recent market rally has relieved much pressure. Many funds were likely caught up in the powerful equities, EM and commodities short squeeze.
It seems apropos to note that shorting is not really the inverse of investing on the long side. The risk profiles are altogether different. On the long side, risk is limited. If an investor is right on the research and is willing to wait out market swings, risk is generally manageable. It’s another story on the short-side. Risk is unlimited. You can be right on the analysis but still loose money in a hurry if caught in the vortex of a powerful short squeeze dynamic.
This short squeeze dynamic has come to wield significant general market impact. With hedge fund and ETF industry assets each now at around $3.0 Trillion, the level of trend-following trading activity is unprecedented. In theory, one would expect such a backdrop to spur market overshooting both on the upside and down. Except that central bankers have repeatedly backstopped the markets to ensure that downside momentum does not gather pace.
By repeatedly intervening to arrest market downside momentum, the Fed and central banks nurtured a backdrop conducive to powerful short squeezes. The current exceptionally speculative marketplace plays right into this dynamic. After all, few (if any) market themes offer the quick trading profit opportunities as squeezing the shorts. And with the faltering global Bubble and elevated risk generally, short positions and bearish hedges had been mounting in recent months.
This must read commentary by Doug appeared on his website in the wee hours of Saturday morning EDT.
It’s time to ‘Uber’ the Big Banks — Jim Rickards
In Silicon Valley, there’s no higher praise one technologist can give another than to call her a “disrupter.” The term refers to inventors of technology platforms that are not just new, not just better, but that completely disrupt existing business models and entire industries in such a way that the old model simply dies out, and the new model becomes the industry norm.
There are many examples. Ten years ago when we wanted to watch movies at home, we would get in our cars, and drive to a local Blockbuster store where we could rent or buy the latest releases on DVD. Along came Netflix, first with its physical DVD delivery service, and later with its streaming model for accessing films. Today the site of your local Blockbuster is probably a dry cleaner or an auto parts store; Blockbuster itself is gone. The Blockbuster “drive-in” model was completely disrupted and destroyed by the Netflix delivery model.
The biggest disrupter to emerge recently is the online ride sharing service Uber. You join with an app, provide your location via mobile phone GPS, pay with a credit card stored in the cloud, and your car arrives quickly and provides courteous service. No money changes hands and tips are not involved. Passengers love it, but taxi drivers are not pleased. They have been striking and rioting all over the world (and enlisting the help of politicians) to stop Uber, with mixed results. Suddenly taxi medallions formerly worth millions may end up no more valuable than stock in Blockbuster.
The essence of disruptive business models is that not only are they new, and more efficient, but the sponsor avoids large commitments to fixed assets and equipment, relying on the web to deliver services from existing infrastructure. Uber is one of the largest car service companies in the world, but it owns no cars. Airbnb is one of the largest hospitality companies in the world but it owns no hotels. Both firms are using pre-existing assets (your car, your spare bedroom) to deliver transportation and lodging. For disrupters, the secret sauce is the software platform, and mobile apps needed to connect buyers and sellers of a service, rather than capital assets.
This interesting commentary by Jim was posted on the darientimes.com Internet site on Tuesday—and because of the subject matter, had to wait for today’s column. I thank Harold Jacobsen for pointing it out.
No Justice, No Peace — Justin Raimondo
I couldn’t help but think of the above as I read the news that Jesse Benton, Ron Paul’s former campaign manager and a top aide to Sen. Rand Paul, and John Tate, a former official of the Paul-affiliated Campaign for Liberty, have had bogus charges of bribery, “conspiracy,” falsifying campaign records, and other trumped up charges – all serious felonies – thrown out of court. In dismissing the charges, US District Judge John A. Garvery cited prosecutorial misconduct: the government was clearly out to get Benton and Tate any way they could – and, of course, smear the libertarian movement.
This was always clearly a political case, in which a dissident group with little political influence in the corridors of power was being targeted by the Big Boys, who were out to discredit them and shut them up. Although the investigation had been going on for quite some time, it’s no coincidence that the indictment was announced days before the first GOP presidential debate was to begin.
Undeterred by this judicial rebuke, the government is still pursuing the remaining charge of lying to investigators: once they have you in their clutches, there’s no way they’re letting go – that is, if you aren’t, say, former CIA chief David Petraeus.
Petraeus, you’ll recall, was charged with turning over highly classified information to his mistress, but was allowed to plead guilty to a misdemeanor. He was sentenced to probation and a $100,000 fine. In a New York Times piece on another case involving mishandling of classified information, we learn that not even the head of the FBI could persuade the Powers That Be to take the Petraeus case seriously. Although a number of people have been charged with felonies for similar indiscretions, and jailed, Petraeus was let off with a gentle slap on the wrist.
This commentary by Justin showed up on the antiwar.com Internet site on Tuesday—and it’s worth reading. I thank Roy Stephens for sending it along.
Capitalism for the few: Robert Reich
Robert Reich says capitalism is broken and we need to fix it.
This 9:47 minute CBC video clip from back on October 9 was picked up by the msn.com Internet site—and for length and content reasons, had to wait for my Saturday column. I thank John Bosshart for sending it our way on Wednesday.
Winning Life’s Lottery is getting tougher — Dennis Miller
The fairest tax of them all is the lottery. It is voluntary, it is not levied; you are not forced to buy a ticket. It is an adult choice.
Recently the Powerball lottery changed the game by adding ten numbers. The odds of winning rose from one chance in 175,223,510 to one in 292,201,338. Let’s put that in perspective.
The government population clock shows the current US population just under 322 million. 72.7% are old enough to buy a lottery ticket. If every adult in the country bought one lottery ticket with a different number, 20% of the lottery numbers would remain unsold!
Winning the lottery is not how to accumulate wealth and provide for retirement. Winning may be a dream; it is fantasy – for entertainment purposes only!
I abhor politicians who refer to “winning life’s lottery” as the excuse to confiscate our hard earned money and redistribute it in the name of “fairness”. Nothing fair about it! Being rich or poor is not a game of chance; but rather a result of life choices we make. Ultra wealthy people can go bankrupt, and those raised in total poverty can become ultra wealthy.
This commentary by Dennis appeared on his website, milleronthemoney.com on Thursday—and for content reasons had to wait for my Saturday column as well.
Hey Dave, Who’s the Extremist?
When British Prime Minister David Cameron lambasted Labour Party leader Jeremy Corbyn for having a “terrorist-sympathising, Britain-hating ideology” the right wing British media went into raptures over the bashing.
But amid the boorish braying, the question is: what about Cameron’s own extremist-supporting politics? And not just Cameron, but the whole British establishment.
Cameron made his cheap shot at Corbyn while addressing his Conservative Party annual conference last week. With the fulsome help of British media, Corbyn’s views on the death of Al Qaeda leader Osama bin Laden, as well as on foreign policy issues, including Russia, Palestine, Hezbollah and Irish republicanism, have been wildly distorted. But the crude demonisation of Corbyn as national traitor is an easy job when you have a phalanx of willing media hatchet-wielders on your side.
This rather disturbing opinion piece was posted on the sputniknews.com website at 3:50 p.m. Moscow time on their Thursday afternoon, which was 8:50 a.m. in Washington—EDT plus 7 hours. I thank U.K. reader Tariq Khan for sending it our way.
The Ukraine Imbroglio — John Batchelor interviews Stephen F. Cohen
This podcast is an important one as it discusses whether Obama is going to try to reclaim its Cold War2 position in the M.E. or stand back and give the decision to Putin’s Russia. On the war party side, best expressed by Senator McCain: send in US troops and target Syria’s political infrastructure – and militarily confront Russia. But Putin’s response is unequivocally that he is going to stabilize ISIS in Syria by military means, and from the first has offered a role in this to Washington. Others, including presidential candidates recommend a no fly zone against Russian planes. Putin has been very candid about what he is doing, and Cohen thinks we should ally with Putin, as this really is a war against terrorism. Putin’s logic is irrefutable. And so is Cohen’s. Meanwhile Obama is quiet, and perhaps paralysed in indecision.
But Washington politicians continue to spin this for its anti-Putin propaganda values without dealing with the question of how to deal with a growing entrenched terrorist threat at a jihad level in Syria. With the Europeans watching this under their own pressures from the refugee crisis, one can only surmise at how little Washington’s angst, anger, and inaction is engendering solidarity there and undermining US national security….All this is doing at present is solidifying Putin’s arguments for dealing with ISIS. The open question Cohen poses is what can be the follow through for a ground campaign that Russia (and all parties surely know) is necessary to actually fully remove ISIS from their conquered zones in Syria – or in Iraq for that matter?
Can there be rapprochement between Moscow and Washington, as during the Vietnam War, in the proxy war in Syria? Cohen thinks the Cold War2 can be ended now, and proceeds to give a history lesson about proxy wars in the past involving Russia. They were all different. But Cohen makes the points that this new Cold War is more dangerous because it has “no structure no rules, no stability and no cooperation” between parties. We should note that Putin continues to offer cooperation and diplomacy to Washington.
This 40-minute audio interview appeared on the johnbatchelorshow.com Internet site on Tuesday—and for content and length reasons once again, had await a spot in Saturday’s column. I thank Larry Galearis for pointing it out. I haven’t listened to it yet, but plan to this weekend sometime. There was another interview with Stephen—and this one was with Thom Hartman. It was posted on the youtube.com Internet site back on October 4—and I thank Larry for this piece as well. The link to that 21:35 minute interview, is here.
Turkey downs drone as Syria launches Aleppo offensive
Turkey shot down a drone on Friday in an incident highlighting the dangers of multiple air combat operations over Syria, where government troops and their allies backed by Russian jets have launched an offensive against rebels near Aleppo.
The army offensive south of the city, backed by Hezbollah and Iranian fighters, further expands its 10-day-old counter-attack in western Syria against insurgents battling to overthrow President Bashar al-Assad.
The army campaign has been coordinated with Russian jets, which began air strikes in support of Assad on Sept. 30, and Syria’s own air force.
This longish news item, co-filed from Beirut and Ankara, is datelined at 8:03 p.m. EDT Friday evening—and it has obviously been updated as the day progressed, because I received it from Patricia Caulfield at 11:32 a.m. EDT on Friday.
Russian bear roams Arabia’s sands, wets toes in Bosphorus — M.K. Bhadrakumar
The Russian diplomacy took two significant steps toward the Middle East during the past couple of days – engaging Saudi Arabia and sounding out Turkey.
But, Turkey first. Indeed, the warm references to Russia-Turkey relations by the Kremlin chief of staff Sergey Ivanov on Monday were far from accidental. For the benefit of the uninitiated, Ivanov speaks only for President Vladimir Putin. What is less known, perhaps, is that Ivanov is also a veteran ‘Orientalist’ who can fathom the subtleties of Turkish President Recep Erdogan’s ‘Look East’ policies and their import for Russian strategies.
Ivanov stated the obvious when he called attention to the good neighborly relations and close ties between Moscow and Ankara. But his real purpose was to underscore,
Sometimes we [Russia and Turkey] have certain contradictions in international relations but we discuss them publicly and privately and publicly with account for mutual interests.
This excellent commentary by career India diplomat M.K. Bhadrakumar falls into the must read category for any serious student of the New Great Game—and I thank U.K. reader Tariq Khan for his second contribution to today’s column. It was posted on the Asia Times website on Wednesday.
Tomgram: Andrew Bacevich, Vietnamization 2.0
After the United States toppled Saddam Hussein’s government in April 2003, L. Paul Bremer III, the top American civilian official in occupied Iraq, took a bold step. He dissolved Iraq’s military, deciding to replace Saddam’s 350,000-man army with a lightly-armed border protection force that would start with 12,000 troops and eventually peak at around 40,000 soldiers, supplemented by various police and civil defense forces.
Bremer’s best-laid plans imploded as an insurgency blossomed from the roiling mass of well-trained Iraqi military veterans he had ushered to the unemployment line and a civil war soon wracked the country. A bloodbath ensued and never ended, even as the U.S. surged in more troops and pumped in tens of billions of dollars to build what eventually became the 930,000-man strong Iraqi security forces. (That’s not much smaller than the South Vietnamese Army the U.S. built up in the late 1960s!) Along the way, there was plenty of progress. “Every single day, the Iraqi security forces are getting bigger and better and better trained and better equipped and more experienced,” said Defense Secretary Donald Rumsfeld in 2005. “You know, the one thing — the one thing we have seen is that Iraq has developed a very good capability to be able to defend itself,” said Secretary of Defense Leon Panetta six years later. “And I think that’s a reflection of the fact that the Iraqis have developed a very important capability here to be able to respond to security threats within their own country.”
And yet by 2014, the Iraqi military had (and was paying) more ghost soldiers — troops who existed only on paper — than the number of real soldiers Bremer had envisioned to secure the whole country back in 2003. As it happened, Iraq was anything but secure. Today, it’s a half-failed state, riven by sectarian strife, and has lost a significant portion of its territory to an extremist group incubated in U.S. prison camps. The country is now far worse off than the one the U.S. invaded in 2003.
The U.S. military is great at a lot of things, just not things like winning wars or effectively training foreign forces. TomDispatch regular Andrew Bacevich takes on the how-and-why of this latter failure, tracing the sorry history of U.S. nation- and army-building from the battlefields of Vietnam — which he knew intimately — to the festering wars of today. Buckle up for a long, strange trip.
This semi-longish essay was posted on the tomdispatch.com Internet site on Tuesday and, for length and content reasons, is another article that had to wait for my Saturday missive. It’s definitely worth reading if you have any interest in the subject at all.
Sprott Money News interviews Eric Sprott
This 8:56 minute audio interview with host Geoff Rutherford put in an appearance on the sprottmoney.com Internet site on Friday sometime—and it’s definitely worth your while if you have the time.
There IS gold in Fort Knox — Ten 1933 Saint-Gaudens Double Eagles
A federal appeals court is again weighing the fate of 10 rare gold coins possibly worth $80 million or more that the government says were illegally taken from a Philadelphia mint and wound up in a jeweler’s hands.
A lawyer for jeweler Israel Switt’s heirs told the 3rd U.S. Circuit Court of Appeals on Wednesday that authorities gave up any right to the coins when they failed to respond to the family’s seized-property claim within 90 days.
The Treasury Department insists the $20 Double Eagles were stolen from the U.S. Mint in Philadelphia before the 1933 series was melted down when the country went off the gold standard.
They argued the heirs, Joan Langbord and her sons, cannot lawfully own the coins, which she said she found in a family bank deposit box in 2003. The government regained possession of the coins when the family brought them to the Secret Service to be authenticated.
This AP story, filed from Philadelphia, was picked up by the news.yahoo.com Internet site on Wednesday afternoon EDT—and I found it embedded in a GATA release yesterday.
Italy to dig for ancient Roman treasure sought by Nazis
Italian archaeologists are to start excavations in search of a fabled cache of ancient Roman treasure which, according to legend, was buried alongside the Gothic king who sacked the city in the 5th century.
The body of Alaric, king of the Visigoths, is said to have been buried at the confluence of two rivers in Cosenza, southern Italy, alongside tonnes of silver and gold, even the priceless Menorah that the Romans looted from the Second Temple in Jerusalem in 70 A.D.
The story of the lost treasure fascinated Hitler, who sent Heinrich Himmler, the chief of the S.S., and a team of Nazi archaeologists to try to find the hidden loot.
They failed, as had many others before them. Now there is a fresh effort to find the legendary loot.
Where’s Indiana Jones when you need him? This gold-related news item was something I found on the telegraph.co.uk Internet site late last night. It was posted there at 5:00 p.m. yesterday afternoon BST—which was noon in New York.
China boosted gold reserves in September by nearly 1%
China increased its gold holdings by nearly 1 percent in September even as total foreign exchange reserves dipped, central bank data showed today.
Gold reserves rose by 480,000 fine troy ounces, or 14.9 tonnes, to 54.93 million ounces, or 1,708.5 tonnes at the end of September, the People’s Bank of China said.
The central bank added 16.2 tonnes in August and nearly 19 tonnes in July.
“Their buying has been pretty consistent,” said Victor Thianpiriya, commodity strategist at ANZ. “It’s clear that they consider gold to be an important part of their holdings. So it won’t surprise me if they continue to add to reserves.”
I’d be prepared to bet just oodles of money that they’re socking away gold at many multiples of that rate, but these piddling amount are all they’re prepared to admit to in the public domain. This Reuters article appeared on their Internet site at 6:05 a.m. Friday morning EDT—and it’s another news item that I found on the gata.org Internet site.
The PHOTOS and the FUNNIES
The WRAP
While JPMorgan has been mostly focused on accumulating physical silver over the past 4.5 years, the bank has most often been the kingpin in gold. At the start of the dramatic plunge in gold prices in early 2013 from $1,650 to $1,100, JPMorgan went from holding a short market corner of 25% of the entire COMEX gold futures market at the top in prices to a 25% market corner on the long side at the bottom in price.
I admit to believing at the time that JPMorgan would then manipulate gold prices sharply higher, but the bank instead cashed out with a hundred or two hundred dollar profit. But, at the very least, JPMorgan’s large COMEX gold buying put a floor under gold prices and prevented what would have been much lower gold prices had it not bought. In essence, shorting at the top and buying at the bottom in 2013 by JPMorgan fully explains the price history of that year.
If I may speculate a bit, I’ve now come to believe that JPMorgan engineered the decline and subsequent bottom in gold prices in 2013 to stabilize prices at a low level to enhance their accumulation of silver at low prices. My guess is that this crooked bank succeeded spectacularly, acquiring more than 200 million oz of silver over the past two and a half years at prices much lower than the first 200 million oz acquired by the bank. — Silver analyst Ted Butler: 14 October 2015
Today’s pop ‘blast from the past’ is from the soundtrack an old James Bond movie. I posted it before many years ago, but thought I’d revisit the tune in today’s column. It was a big hit on the big screen—and also on the pop charts back in 1983—and if you’re counting, that was 32 years ago. The link is here.
Today’s classical ‘blast from the past’ is Max Bruch’s Violin Concerto No. 1 in G minor, Op. 26 which he completed in 1866, but was extensively revised after it’s premiere on April 24th of that year—and that’s the version heard in concert halls the world over today, including here in Edmonton early in 2016. You can rest assured that I will be at that performance.
Here’s the awesomely gifted [and incredibly luscious!] Dutch violinist Janine Jansen, along with the Netherlands Radio Chamber Philharmonic, doing the honours in a performance at the Concertgebouw in Amsterdam back in June of 2013. Michael Schønvandt conducts—and the link is here. Enjoy!
It was another day where prices weren’t allowed to get far—and I’m getting the feeling that a top is being set in all the precious metals by JPMorgan et al. Yesterday’s Commitment of Traders only added to my fears about this, as it’s obvious that they’re throwing all the COMEX paper ‘liquidity’ at them to prevent a major price break-out above their respective 200-day moving averages. The recent action of the precious metal equities isn’t exactly making my heart go pitter patter, either.
Of course we could go higher from here, but any rallies won’t be allowed to get far—and once ‘da boyz’ get all the mice in the trap they think they can get, then at some point in the future they’ll engineer the usual price decline, as the set up for the “same old, same old” appears to be in place.
Of course there’s always the chance that the powers-that-be could be over run but, as Ted Butler has been saying for the last fifteen years, if it does happen, it will be for first time.
Here are the 6-month charts for the Big 6 commodities once again—and you can see the point I’m making when you look at the price pattern over the last few days. As I’ve said before, I’d love to be spectacularly wrong, but I wouldn’t bet a nickel on that outcome.
So where we go from here looks pretty much preordained, but as Ted mentioned on the phone yesterday, conditions in the physical market in both silver and gold aren’t what they were several years ago. That is true, of course, particularly in silver, but as of Friday’s close there’s absolute no sign that the four principal bullion banks—JPMorgan, HSBC USA, Scotiabank and Citigroup—are in any danger of losing their iron grip on the the precious metals in particular, or the other two members of the Big 6 commodities.
In the broader equity markets, I certainly get no comfort from looking at the 5-year chart of the Dow. You can see how many times during that time period that the President’s Working Group showed up to save the day at the 200-day moving average—and the jury is still out as to whether they’ll be able to do the same thing this time, as the pattern from the ‘rescue’ at the late-August low indicates that this rally is of the counter-trend variety in an unfolding bear market.
As Chris Powell said back in April of 2008 at our GATA conference in Washington—“there are no markets anymore, only interventions.”—and even the world’s biggest fund managers and commodity producers out there know that to be true and are becoming more vocal about it every time they show up in the main stream media. I watched Jim Grant go off on a tangent about it with Maria Bartiromo last month. Jim is always the cool head out there—and when you see him get borderline angry about the current state of the financial markets, it’s a strong indication that it’s a widely-known fact. As I’ve said before, even Stevie Wonder could see it.
And as I’ve also been saying for years now, if the powers-that-be put their hands in their pockets and did nothing, the world’s economic, financial and monetary system would be a smouldering ruin in five business days—and with each passing week, I see nothing out there that changes my mind about this.
I’m done for the day—and the week—and I’ll see you here on Tuesday.
Ed
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