04 June 2016 — Saturday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
The gold price was sold down a few dollars shortly after trading began in New York at 6 p.m. EDT on Thursday evening. But by 12:30 p.m. HKT, the price was back to up a few bucks—and then it traded almost ruler flat into the job numbers at 8:30 a.m. EDT. If allowed to, the short covering rally that began at that juncture would have driven the gold price to the moon and the stars, but JPMorgan et al were there selling enough long positions to cap the price, which the did most successfully – and all the gains that mattered were in by the London p.m. gold fix. The price sold off a few dollars going into the COMEX close, but the moment that event passed, gold began to crawl quietly higher in the thinly-traded after-hours market – and it closed about two bits off its high tick of the day.
The CME Group recorded the low and high ticks as $1,209.10 and $1,247.40 in the August contract.
Gold finished the Friday session in New York at $1,243.50 spot, up $33.10 from Thursday’s close—and it could have just as easily close up $333.10…or even $3,331.00 if ‘da boyz’ had put their hands in their pockets and let the free market roar in a short-covering orgy that would have been one for the history books. But as you can tell, that wasn’t allowed to happen, but it’s what could. Net volume was monstrous at just under 217,000 contracts.
And here’s the 5-minute gold chart courtesy of Brad Robertson—and it’s certainly worth a look today. The big volume spike was 25,000+ contracts, with the one that followed, a hair under 15,000 contracts. It was a monster day—and if there was a ‘background’ level in New York trading, it didn’t show up until shortly after 4 p.m. EDT, which is 2 p.m. Denver time on the chart below.
The vertical gray line is midnight in New York, noon the following day in Hong Kong—and don’t forget to add two hours for EDT. The ‘click to enlarge‘ is a must here.
Silver also got sold down a bit in early Far East trading, but was back above $16 to stay by shortly before 12:30 p.m. HKT. It was up a bit more in mid-morning trading in London…and the NASA space launch blast off at 8:30 a.m. EDT ran straight into the arms of the the HFT boyz and their algorithms. The high tick, such as it was, came shortly before the equity markets opened in New York yesterday morning…and that juncture got sold down until shortly before 11 a.m. EDT. It traded flat from there but, like gold, began to creep higher once the COMEX trading session was done for the day.
The low and high ticks in this precious metal were reported as $15.97 and $16.47 in the July contracts.
Silver closed in New York yesterday afternoon at $16.39 spot, up 43 cents from Thursday’s close. Net volume was pretty chunky at a hair over 49,500 contracts.
The chart for platinum was pretty similar to the one in silver – and it finished the Friday session at $986 spot, up an even 30 bucks from Thursday. But, like gold and silver, would have finished the day at a record high price by several orders of magnitude if allowed to trade freely because, with the exception of silver, platinum is the most heavily shorted precious metal by JPMorgan et al in the COMEX futures market.
Palladium was a market that had no liquidity at all, as it went ‘no ask’ the moment the job numbers came out – and ‘da boyz’ had to step in as short sellers of last resort, to not only cap the price, but pound it down as well. Palladium finished the Friday session in New York at $552 spot, up an even 20 dollars on the day. It could have just as easily been up $200 the ounce.
The dollar index closed late on Thursday afternoon in New York at 95.55 – and then did practically nothing until the job numbers came out. Most of the losses were in by precisely 10:00 a.m. EDT, which just happened to the time of the London p.m. gold fix. It chopped sideways for a bit – and then began to creep lower starting around 1 p.m. EDT, finishing the Friday session on its absolute low tick. The dollar index closed in New York yesterday at 93.90 – down 165 basis points, or 2.11 percent.
Here’s the 2-year U.S. dollar chart—and it ain’t the happiest looking thing I’ve seen lately. As I’ve always said, the current ‘rally’ looked like an engineered ramp job to me – and the job numbers certainly put a fork in it.
The gold stocks gapped up about 7 percent at the open, with their morning highs coming about 10:30 a.m. in New York. They sold off a hair until noon—and then crawled higher for the remainder of the Friday session, closing just off their collective high ticks. The HUI finished the day up 11.57 percent, which is the biggest one-day gain that I can remember.
The silver equities followed a very similar trading pattern, as Nick Laird’s Intraday Silver Sentiment Index [which he calls the Silver 7] closed up an impressive 9.85 percent. Click to enlarge.
And here’s the three new charts from Nick that show the changes for the week, month-to-date…and year-to-date…for all four precious metals, plus the HUI and ISSI/Silver 7…both in dollar and percentage terms.
The CME Daily Delivery Report for Day 4 of the June delivery month showed that 2,981 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday. The largest short/issuer was HSBC USA with 2,000 contracts out of its own account – and if you’ve been watching the gold going into the COMEX-approved depositories lately, this delivery should come as no surprise. The other three short/issuers of note were MacQuarie Futures, ABN Amro and International F.C. Stone with 500, 266 and 212 contracts out of their respective client accounts. There were 12 long/stoppers in total and, as always, the tallest hog at the trough was JPMorgan with 1,292 contracts for its own account, plus another 872 contracts for its clients. Goldman Sachs wasn’t even a close second with 254 contracts for its client account. Yesterday’s Issuers and Stoppers Report is worth a look – and the link is here.
JPMorgan has already stopped 5,173 gold contracts for its own account during the first four delivery days of June, plus they stopped another 2,328 contracts for its clients. They issued 1,679 contracts out of their client account as well this month. The 5,173 contract stopped is miles above the monthly 3,000 contract delivery limit per customer – and was something that Ted pointed out in his Wednesday column – and mentioned again on the phone yesterday. He said that JPMorgan has obviously received some sort of exemption this month. Needless to say, I look forward to what he has to say about all of this in his weekly review to his paying subscribers later today.
The CME Preliminary Report for the Friday trading session showed that gold open interest only fell by 762 contracts, leaving 6,683 still open for delivery, minus the 2,981 mentioned two paragraphs ago. But Thursday’s Daily Delivery Report showed that 1,026 gold contracts were posted for delivery on Monday, so that means that another 1,026-762=264 gold contracts were added to the June delivery month in this report. That’s almost 1,400 contracts added to the June delivery month in just four days – and that’s a lot! I’m sure that Ted will have more to say about this as well.
Silver’s June o.i. declined by 1 lonely contract, leaving 348 still around. None were issued for delivery on Monday.
I guess I shouldn’t be shocked anymore, but I was shaking my head again when I saw that an authorized participant added a further 200,575 troy ounces of gold to GLD yesterday. And after Friday’s price action, it’s a given that more is owed. During the first three business days of June, about 344,000 troy ounces of gold has been added to GLD. And as of 10:17 p.m. EDT last night, there were no reported changes in SLV.
There was no sales report from the U.S. Mint.
There was a bit of movement in gold over at the COMEX-approved depositories on Thursday, as 50,439 troy ounces were reported received—and 2,171 troy ounces were shipped out the door. Of the amount received, the biggest chunk went into HSBC USA. There was also a decent amount of switches from Eligible to Registered – and vice versa once again. The link to this activity is here.
There was very little activity in silver, as none was reported received…and only 60,002 troy ounces were shipped out, all of which came out of Canada’s Scotiabank. There was a big 3.5 million troy ounces switch from Registered to Eligible at Brink’s, Inc. yesterday as well. The link to this activity is here.
It was fairly busy over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday, as they reported receiving 5,372 of them – and shipped out 2,072. All of the action was at Brink’s, Inc. as per usual – and the link to that, in troy ounces, is here.
In a word, the latest Commitment of Traders for positions held at the close of COMEX trading on Tuesday, was ‘disappointing’…as it didn’t show anywhere near the kind of improvements that either Ted or I were expecting. Ted’s immediate impression on looking at the headline numbers that not everything that should have been in that report, was reported to the CFTC in a timely manner due to the holiday-shortened reporting week. But, as Ted also said, “the numbers are what they are“.
In silver, the Commercial net short position only declined by 2,328 contracts, or 11.6 million troy ounces. They did this by adding 873 contracts to their long positions, plus they covered 1,455 short contracts. The sum of those two numbers is the reported change for the week. The Commercial net short position remains sky high at 380 million troy ounces.
Ted said that the Big 4 traders actually increased their short positions by about 100 contracts—and the ‘5 though 8’ decreased their short position by about the same amount, so the ‘Big 8’ were a wash. All the activity was in the raptors, the commercial traders other than the Big 8, as Ted said they increased their long position by around 2,300 contracts. Ted figures that JPMorgan’s short position remains unchanged at about 24,000 contracts, but will be able to recalibrate that number when the Bank Participation Report comes out next Friday.
Under the hood in the Disaggregated COT Report the Managed Money traders reduced their long positions by 6,264 contracts, plus they covered 2,185 short contracts, for a net improvement of 4,079 contracts. The rest of the big changes in the Disaggregated Report was in the Nonreportable/small trader category, as they went in the other direction, increasing their net long position by just over 1,900 contracts.
Here’s the 3-year COT chart. Click to enlarge.
In gold, the Commercial net short position declined by only 11,175 contracts. They did this by reducing their long positions by 12,581 contracts – and the also reduced their short position by 23,756 contracts. The difference of those two numbers is the weekly change. The Commercial net short position is now down to 21.40 million troy ounces.
Ted said that the Big 4 actually increased their short position by around 5,100 contracts during the reporting week, but the ‘5 through 8’ traders reduced their short position by about 7,800 contracts – and Ted’s raptors, the commercial traders other than the Big 8, covered the remainder of their 7,000 contract short position, plus they added 1,500 long contracts – for a total change of 8,500 contracts during the reporting week.
Well, even if there were reporting delays in this week’s Commitment of Traders Report, the differences have been totally buried by what happened during the COMEX trading session yesterday. Friday appeared to be a strictly COMEX-related paper affair, as the Managed Money/small traders covered short positions and went long once again, as JPMorgan et al provided whatever ‘liquidity’ necessary to cap the rallies and prevent prices from blowing to the moon and stars…and most likely beyond. There was nothing to suggest that supply and demand fundamentals were at work yesterday…just the usual paper shenanigans.
Here’s Nick Laird’s “Days to Cover” chart updated with yesterday’s COT data for positions held at the close of COMEX trading on Tuesday—and there’s very little change from the previous week in silver. It shows the days of world production that it would take to cover the short positions of the Big 4 and Big 8 traders in each physically traded commodity on the COMEX. Click to enlarge.
As I say in every Saturday column—the short positions of the Big 4 and 8 traders in silver continues to redefine the meaning of the words ‘obscene’ and ‘grotesque.’ This week the Big 4 are short 146 days [almost 5 months] of world silver production—and the ‘5 through 8’ traders are short an additional 73 days of world silver production—for a total of 219 days, which is 7+ months of world silver production, or 503.5 million troy ounces of paper silver held short by the Big 8.
And it should be pointed out here that in the COT Report above, the Commercial net short position in silver is 380 million troy ounces. So the Big 8 hold a short position larger than the net position—and by a monstrous amount—115 million troy ounces!!! That’s how grotesque, twisted, obscene—and dangerous—this COT situation in silver has become—and gold’s not far behind, as is platinum. One glance at the above chart tells all.
And as an aside, the two largest silver shorts on Planet Earth—JPMorgan and Canada’s Scotiabank—are short about 104 days of world silver production between the two of them—and that 104 days represents around 72 percent [almost three quarters] of the length of the red bar in silver in the above chart. The other two traders in the Big 4 category are short, on average, about 21 days of world silver production apiece.
Once again I don’t have all that many stories – and no precious metal stories at all. But I’m running so late today, that I’m kind of happy about that.
CRITICAL READS
The Funniest BLS Report Ever
Only a captured government drone could put out a report showing only 38,000 new jobs created, with the working age population rising by 205,000, and have the balls to report the unemployment rate plunged from 5.0% to 4.7%, the lowest since August 2007. If you ever needed proof these worthless bureaucrats are nothing more than propaganda peddlers for the establishment, this report is it. The two previous months were revised significantly downward in the fine print of the press release.
It is absolutely mind boggling that these government pond scum hacks can get away with reporting that 484,000 people who WERE unemployed last month are no longer unemployed this month. Life is so f**king good in this country, they all just decided to kick back and leave the labor force. Maybe they all won the Powerball lottery. How many people do you know who can afford to just leave the workforce and live off their vast savings?
In addition, 180,000 more Americans left the workforce, bringing the total to a record 94.7 million Americans not in the labor force. The corporate MSM will roll out the usual “experts” to blather about the retirement of Baby Boomers as the false narrative to deflect blame from Obama and his minions. The absolute absurdity of the data heaped upon the ignorant masses is clearly evident in the data over the last three months. Here is government idiocracy at its finest.
This commentary by Jim Quinn over at The Burning Platform website, showed up on the Zero Hedge Internet site at 1:25 p.m. on Friday afternoon EDT – and I thank ‘aurora’ for passing it around. Another link to this ZH article is here.
‘Bombshell’ jobs report puts economic growth back in U.S. election spotlight
Back in 2012, the first Friday of the month was an exciting day in U.S. politics. As Barack Obama and Mitt Romney fought to convince voters that they’d be the best candidate to steer the US economy through recovery, the official monthly jobs report provided both sides with ammunition.
Four years later, with the economy adding on average 200,000 jobs a month and the unemployment rate at 5%, down from 10% when Obama took office, those Fridays have come and gone without much to-do from those vying to be the next president.
That is, until this week.
A disappointing report announcing that the U.S. economy had added just 38,000 jobs in May put the monthly statistic back into the US election spotlight just as Obama has spent the past few weeks trying to defend his economic legacy.
This is the first of two stories from The Guardian in today’s column. This one was posted on their website at 9:49 p.m. BST yesterday evening, which was 4:49 p.m. in Washington – EDT plus 5 hours. Another link to this news item is here – and I thank Patricia Caulfield for finding it for us.
JPMorgan’s Dimon: Auto-Loan Market Stressed, Banks ‘Will Get Hurt‘
JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said the market for U.S. automobile lending is “a little stressed” and that he foresees higher losses ahead for some competitors.
“Someone will get hurt in auto lending,” but not JPMorgan, Dimon, 60, said Thursday during an investor presentation in New York.
That pain could be compounded by weakening U.S. auto sales, which fell in May for the second monthly decline this year and reinforced the idea that demand for cars and trucks has plateaued. The results for last month, whose Memorial Day weekend promotions make it a bellwether for gauging buyer appetite, show consumer demand for cars leveling off faster than executives predicted.U.S. Bancorp CEO Richard Davis, speaking at the same conference earlier in the day, said the auto-lending market is “overheated,” mainly because of pricing competition.
U.S. Bancorp CEO Richard Davis, speaking at the same conference earlier in the day, said the auto-lending market is “overheated,” mainly because of pricing competition.
This news item put in an appearance on the newsmax.com Internet site at 12:41 p.m. on Thursday afternoon EDT—and it’s courtesy of Brad Robertson. Another link to this story is here.
Citigroup CEO points to 25 percent drop in quarterly results
Citigroup Inc CEO Mike Corbat on Wednesday indicated that the company’s second-quarter net income will be roughly 25 percent lower than the same period a year earlier.
Corbat, speaking at an investor conference in New York, said he expects second-quarter net income to be roughly flat with the first quarter of this year. In the first quarter, the company reported $3.5 billion of profits, about 25 percent less than the $4.65 billion it reported on an adjusted basis in the second quarter of 2015.
Citigroup is to post second-quarter results on July 15.
Citigroup has been grappling with a long-term decline in capital markets revenue and higher costs to comply with regulation. The company has been spending to reduce staff and office space, while also beefing up its credit card business.
This Reuters article was posted on their Internet site at 5:43 p.m. EDT on Thursday afternoon—and it’s the first of two stories that I ‘borrowed’ from yesterday’s edition of the King Report. Another link to this story is here.
U.S. East Coast Port Volumes Slump
Cargo volumes at the East Coast’s two largest ports fell in April compared with a year earlier, as retailers continue to contend with high inventories and as West Coast ports continued to reclaim market share lost during a labor slowdown last year.
Loaded imports at the Port of New York and New Jersey fell to 244,677 TEUs, or twenty-foot equivalent units, a common measure of cargo volume. That was down 3.6% from March and down 2.6% from April of 2015.
At the Port of Savannah, the East Coast’s second-busiest port, loaded import TEUs fell by 3.8%, compared with the year-earlier month, to 130,208. Loaded imports ticked up slightly from March’s reading of 128,378.
In a typical year, the largest U.S. gateways for goods shipped from Europe and Asia will see imports increase steadily through the Spring and early summer, peaking in the months of August, September and October, as retailers prepare for the back-to-school and holiday shopping seasons.
This story put in an appearance on The Wall Street Journal website on Tuesday afternoon—and it’s the second news item in a row that I lifted from the Friday edition of the King Report. Another link to this WSJ article is here.
The celebrity privacy case that exposes hypocrisy of Silicon Valley power brokers
Ours is a world where a handful of technology companies – along with a considerably higher number of their billionaire owners – are heading towards power that will border on the absolute, uncontested not just by politics but also by the media of any kind.
Two seemingly unrelated recent news stories make it quite clear. First, a report from Moody’s Investors Service suggests that just five US tech firms – Apple, Microsoft, Google, Cisco and Oracle – hold $504bn (£345bn) in spare cash, a third of total reserves by all U.S. corporations (excluding financial companies). It is the first time that all of the top five spots have gone to companies in the tech sector.
A recent raid by the French police on Google’s Paris office – part of a €1.6bn (£1.2bn) tax probe – hints at the origins of that wealth. And that spare cash rests on – and produces – political power. Google’s lobbying expenses, for example, are some of the highest in the business world; its lobbyists have visited the White House, on average, more than once a week in the period between Barack Obama’s election and October 2015.
The second news story has to do with Peter Thiel, the unconventional investor who made his name as a co-founder of PayPal, and who went on to make his fortune as a venture capitalist, backing companies including Facebook in their early days. Thiel, it turns out, has bankrolled the controversial lawsuit brought by Hulk Hogan, the celebrity wrestler, against Gawker, the gossip site. Hogan, whose real name is Terry Bollea, sued for invasion of privacy after Gawker published an excerpt of a leaked sex tape in 2012. He has been awarded $115m by the courts; Gawker’s future is uncertain.
This longish, but very interesting news item appeared on theguardian.com Internet site last Saturday – and for content reasons, had to wait for this Saturday’s column. I found it in the Tuesday edition of the King Report. Another link to this article is here.
America’s Greatest Threat is its Crazed “Leadership” and its Brainwashed Population
We, the undersigned, are Russians living and working in the USA. We have been watching with increasing anxiety as the current U.S. and NATO policies have set us on an extremely dangerous collision course with the Russian Federation, as well as with China. Many respected, patriotic Americans, such as Paul Craig Roberts, Stephen Cohen, Philip Giraldi, Ray McGovern and many others have been issuing warnings of a looming Third World War. But their voices have been all but lost among the din of a mass media that is full of deceptive and inaccurate stories that characterize the Russian economy as being in shambles and the Russian military as weak—all based on no evidence. But we-—knowing both Russian history and the current state of Russian society and the Russian military–cannot swallow these lies. We now feel that it is our duty, as Russians living in the US, to warn the American people that they are being lied to, and to tell them the truth. And the truth is simply this:
If there is going to be a war with Russia, then the United States will most certainly be destroyed, and most of us will end up dead.
Let us take a step back and put what is happening in a historical context. Russia has suffered a great deal at the hands of foreign invaders, losing 22 million people in World War II. Most of the dead were civilians, because the country was invaded, and the Russians have vowed to never let such a disaster happen again. Each time Russia had been invaded, she emerged victorious. In 1812 Napoleon invaded Russia; in 1814 Russian cavalry rode into Paris. On June 22, 1941, Hitler’s Luftwaffe bombed Kiev; On May 8, 1945, Soviet troops rolled into Berlin.
But times have changed since then. If Hitler were to attack Russia today, he would be dead 20 to 30 minutes later, his bunker reduced to glowing rubble by a strike from a Kalibr supersonic cruise missile launched from a small Russian navy ship somewhere in the Baltic Sea. The operational abilities of the new Russian military have been most persuasively demonstrated during the recent action against ISIS, Al Nusra and other foreign-funded terrorist groups operating in Syria. A long time ago Russia had to respond to provocations by fighting land battles on her own territory, then launching a counter-invasion; but this is no longer necessary. Russia’s new weapons make retaliation instant, undetectable, unstoppable and perfectly lethal.
This rather scary, but probably close-to-the-truth commentary was posted on the paulcraigroberts.org Internet site yesterday, but the article itself had been around the Internet for a few days prior. It’s certainly worth reading if you live in North America….and have any interest in the New Great Game. This iteration came courtesy of Brad Robertson. Another link to this commentary is here.
Leave camp must accept that Norway model is the only safe way to exit E.U. — Ambrose Evans-Pritchard
The Leave campaign must choose. It cannot safeguard access to the E.U. single market and offer a plausible arrangement for the British economy, unless it capitulates on the free movement of E.U. citizens.
One or other must give. If Brexiteers wish to win over the cautious middle of British politics, they must make a better case that our trade is safe. This means accepting the Norwegian option of the European Economic Area (EEA) – a ‘soft exit’ – as a half-way house until the new order is established.
It means accepting the four freedoms of goods, services, capital, and labour that go with the EU single market. It means swallowing E.U. rules, and much of the E.U. Acquis, and it means paying into the E.U. budget.
Leavers know that if they gave in to these terms, they would drive away all those other voters who want to slam the door on immigration. So the campaign has been evasive, hoping to muddle through until June 23 with the broadest possible church.
This very interesting article by Ambrose showed up on the telegraph.co.uk Internet site at 8:36 a.m. BST on their Thursday morning – and it’s I thank Roy Stephens for sharing it with us. Another link to this AE-P commentary is here.
Historic Milestone: Negative Yielding Debt Surpasses $10 Trillion for the First Time
The world passed a historic milestone in the past week when according to Fitch negative-yielding government debt rose above $10 trillion for the first time, which as the Financial Times adds, envelops an increasingly large part of the financial markets “after being fuelled by central bank stimulus and a voracious investor appetite for sovereign paper.” It also means that almost a third of all global government debt now has a negative yield. The amount of sovereign debt trading with a sub-zero yield climbed 5% in May from a month earlier to $10.4 trillion, pushed higher – or lower in yield as the case may be – by rising bond prices in Italy, Japan, Germany and France.
Japan and Italy fuelled the increase in negative-yielding debt in May, with three-year bonds issued by the latter sliding below the zero mark.
The ascent of the negative yield, which first affected only the shortest maturing notes from highly rated sovereigns, has encompassed seven-year German Bunds and 10-year Japanese government bonds as both the European Central Bank and Bank of Japan have cut benchmark interest rates and launched bond-buying programmes.
The source of this historical capital misallocation is clear: global central banks who are desperate to push all yield-seeking investors, and key among them pension funds, into risky assets in hope of preserving asset price inflation. “Central bank actions are certainly a part of it, but the global search for yield, the desire to find high-quality securities is part of what is going on here,” said Robert Grossman, an analyst with Fitch.
This news item appeared on the Zero Hedge website yesterday at 7:20 a.m. EDT yesterday morning—and I thank Richard Saler for pointing it out. Another link to this story is here.
Doug Noland — Monkey with Money at Your Own Peril
What was clear in my mind was that once the inflation of Central bank and sovereign Credit commenced it was going to be extremely difficult to control. I’ve always believed that using central bank Credit to inflate securities markets was both a trap and a monumental mistake. After the disastrous consequences of employing mortgage Credit for system reflation purposes, there was little possibility that inflating the securities markets would end any better. Yet after a few months of relative global market calm, the backdrop again has the appearance of sustainability. I’ll continue to chronicle why I believe it’s late in the game.
It’s become increasingly obvious that Japan’s QE and negative rate endeavor is floundering. A similar prognosis for ECB reflationary measures is at this point only somewhat less evident. Historic bond Bubbles proliferate. Meanwhile confidence in economic fundamentals, the course of policy-making and general banking system soundness wavers. There is little to indicate that either the BOJ or ECB will be capable of extricating themselves from flawed policies.
With the Federal Reserve having concluded QE, many present the U.S. as evidence that exit strategies are achievable and easily managed. It’s definitely not that straightforward. I would contend that ending QE was only possible because of the massive “money” printing operations being orchestrated in Tokyo and Frankfurt. I believe enormous amounts of finance have made their way into U.S. securities markets and the real economy, either directly or indirectly related to BOJ and ECB policy-making. Combined with historic Chinese “Terminal Phase” Credit excess, there was more than ample Credit and liquidity to propel the “global government finance Bubble” finale.
Doug’s Credit Bubble Bulletin is always a must read for me – and this one is no exception. He posted it on his Internet site shortly after midnight Denver time this morning. Another link to his commentary is here.
Russia, NATO, Stalin and Nationalism: John Batchelor Interview Stephen F. Cohen
The title of this episode is the “Return of Stalinism” but in actual fact the discussion is more about the rise of nationalism that is occurring both in the West and in Russia. Cohen notes that in the United States it is an integral part of the election process (and perhaps less significantly about Washington’s foreign adventures); in the EU it is about the failures of the EU, especially the refugee crisis, and in Russia it is tied to the increasing threat of NATO on its borders. The latter now includes the so called “missile shield” that has, with ribbon cutting fanfare, just seen Rumania added as the newest such missile site and newest threat to Russia. Putin, during his recent visit to Greece, has finally spoken out against these missile sites saying that as a threat to Russia they become targets of attack for Russia. That message is now clearly Russian policy should hostilities commence with NATO. Expect the obvious to be ignored.
But as a symbol of foreign policy success, for Russians Stalin has some credibility and now that Russians feel threatened the Russian Communist Party is planning to use his image during the coming election for the Dumas. He was a terrible despot, who killed millions, but as a military leader he had great success and Russians still debate his status. Cohen discusses how post Stalin Kremlin leaders dealt with the question until Gorbachev virtually defined himself as an anti-Stalinist. But now Russians are threatened again and Stalin is seen in a more positive way – “as an attitude of the people”, not as a regressive trend.
Cohen reminisces about how Russians would use Stalin’s image under post Stalin Soviet leaders as a quiet protest about failures of domestic government policies. And one can see the same today in Russia although “it is now commercialized and politicised”. This makes it a problem for Putin because the comparison is there to live up to when things go wrong and to defend against when the “Stalin label” is compared to the present Putin regime. But Putin’s regime in today’s Russia, Cohen argues, does not in any way resemble Stalin’s state – nor a Soviet one -but, as Cohen points out, Russians know that the West did not put missiles on the borders of Stalin’s Russia.
In the last segment Cohen discusses the level of corruption in all areas of Russian society and how the perception of Stalinism has created myths about that leader. It is Putin’s domestic headache to address the corruption, but Stalin is seen, incorrectly, as a corruption fighter. Similarly Stalin’s collectivization efforts can be compared to the transformations under Putin, and while pro Stalin elements in the population proclaim Stalin’s efforts successful, the reality was very much more debatable. Putin’s successes, however, are far less debatable; they are very real. Putin has chosen the role of an anti-Stalinist leader. However, he is not seen as a leader who has taken a very hard line against provocative western interests (NGOs and media) within Russia and to an enemy NATO outside – as Stalin surely would have. This reality may have changed this past week with Putin’s warning to NATO that missile sites along Russian borders are now targets, and now the New Cold War is one more step closer to the military response.
This 40-minute audio interview is an absolute must listen for any serious student of the New Great Game. It was posted on the audioboom.com Internet site on Tuesday – and for obvious reasons, had to wait for today’s column. I thank Ken Hurt for the link, but the big THANK YOU as always goes out to Larry Galearis for the above 4-pargraph executive summary. If you don’t want to spend the time listening, than you should at least skim summary. Another link to this audio interview is here.
The PHOTOS and the FUNNIES
Today’s critter is a squirrel, but of a variety I’m not familiar. I took this photo through a window in my Dad’s house in Osoyoos, B.C. a couple of weeks ago when I was visiting. It’s not a red squirrel, or a gray squirrel, but it could be a ground squirrel of some type, but what type is anyone’s guess. This nursing female is eating a walnut from the tree that grows in the backyard. Because I took the shot through a double-glazed window, it’s not as sharp as it would ordinarily be…but the ‘click to enlarge‘ feature still makes a difference.
The WRAP
Today’s pop ‘blast from the past’ is from U.S. pop star Gene Pitney that I remember from way back in the early 1960s—and one of his biggest international hits is linked here. But my favourite is this one. One of the great singing voice of all time.
Today’s classical ‘blast from the past’ follows on the heels of last week’s selection which was Brahms piano concerto #1. His second piano concerto in B-flat major, Op. 83 showed up twenty-two years later—and its composition took three years to complete. The premiere was in Budapest on April 9, 1881…and was met with immediate acclaim…and rightfully so. Here’s Maurizio Pollini doing the honours as soloist, along with the Vienna Philharmonic back in 1977. Claudio Abbado conducts – and the link is here. Enjoy!
It’s a good bet that the job numbers were massaged to perfection to get them to look as good as they did. It’s a given that they were obviously much worse than this – and it wouldn’t surprise me in the slightest if they get revised lower in the months ahead.
As I said before, it’s obvious from the charts of all four precious metals, plus copper, that the price action was all paper related in the COMEX futures market. As Ted pointed out for the umpteenth time, there was absolutely no follow-through to the upside once the initial rally was capped…and the tiny rallies after the COMEX close in the thinly-traded after-hours market certainly don’t qualify.
Since this is my Saturday column, here are the 6-month charts for the Big 6+1 commodities.
It should be carefully noted that neither gold nor silver were allowed to break above their respective 50-day moving averages on Friday.
One thing that Ted has been talking about for a while now is that despite the huge physical demand, whether it be for delivery into GLD and other gold ETFs, or the massive in/out movements in the COMEX-approved depositories, none of it has shown up in the price – either in the current delivery month or any of the nearby months. That was apparent on Thursday – and again on Friday.
His interpretation was that there’s lots of gold out there for the taking, because if physical gold was in short supply, it would certainly be showing up in what he calls the “spread differentials” — as buyers bid up the price in order to get supplies. That isn’t happening. Since he’s traded commodities for a living for almost three decades, he knows what he’s talking about – and I’m sure he’ll have more to say about it in his commentary later today.
With the huge run-ups in the precious metal prices yesterday, particularly in gold, it’s certainly changed the landscape from a Commitment of Traders Perspective, as the Managed Money and Nonreportable/small traders dumped short positions and piled in on the long side. Of course the New York bullion banks, plus other short sellers of last resort, were there to make sure that prices didn’t get out of hand to the upside.
It has set the current engineered price decline scheme back weeks, as I’d guess that we’re close to being back to a record short position in gold…and not that far off in silver was well.
It’s impossible to tell from what’s going on that we can see, if the Big 8 short holders are in any sort of trouble. The danger of being over run may still be on the table, but Ted is of the opinion that they appear to have things firmly in hand…and prepared to do “whatever it takes” as Mario Draghi is famous for saying, to keep precious metal prices in the box for now.
But the share price action belies that, as they came roaring back yesterday. And even though both gold and silver are down considerably from their highs a month ago, the shares are almost back to where they were when gold was about $1,300 an ounce…and when silver briefly broke through $18 the ounce. So from being in their respective sick beds six months ago, all the players in the precious metal market are now awake, sitting up in bed…and asking for food. It certainly feels like “it’s different this time” – but I wouldn’t bet the ranch on that based on just one day’s price action. However, it’s hard not to be optimistic, because as Ted said several months ago, it’s his belief that JPMorgan and friends have been buying the precious metal equities like mad up until the May 1 highs.
And if one looks a bit further afield – particularly at what JPMorgan is doing in silver as per Ted Butler’s must read “Hidden in Full View” commentary – and also including this incredible June delivery month in gold, which has to be the wildest one I’ve ever seen — there appears to be something going on under the hood that even the powers-that-be can’t hide.
As to when it all may break out into the open from a price perspective is anyone’s guess, but all these gold and silver movements appear to heading for a denouement of some kind at some unknown date in the future.
And as Ted pointed out in the last paragraph of the above commentary — “it doesn’t appear the wait will be very much longer.”
From his lips, to God’s ears!
See you on Tuesday.
Ed
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