20 August 2016 — Saturday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
The gold price was sold down six or seven dollars in the first two and a half hours of trading in the Far East on their Friday morning — and that sell-off began as soon as trading started at 6:00 p.m. EDT on Thursday evening in New York. The price chopped sideways from around 8:30 a.m. HKT until London opened — and at that point, the selling pressure reappeared. The low tick of the day came somewhere between 8:30 and 9:00 a.m. in New York — and the subsequent rally got turned over the moment that the London p.m. gold fix was. Gold chopped lower for the rest of the day.
The high and low ticks were recorded by the CME Group as $1,357.90 and $1,342.00 in the December contract.
Gold was closed in New York yesterday at $1,341.10 spot, down $11.00 on the day. Net volume was just over 174,500 contracts — and that amount includes both October and December volume.
Here’s the 5-minute tick gold chart courtesy of Brad Robertson. There were periods of elevated volume throughout the Friday trading session in a few spots outside of COMEX trading, but the real volume began shortly after 05:30 a.m. Denver time on the chart below, which was around 12:30 a.m. BST in London — and didn’t really back off until shortly after the COMEX close, which is 11:30 a.m. MDT/1:30 p.m. EDT.
The vertical gray line is 10:00 p.m. Denver time, midnight in New York — and noon the following day in Hong Kong and Shanghai—and don’t forget to add two hours for EDT. The ‘click to enlarge‘ is a must here.
It was more or less the same price action in silver — and you can see where the bids got pulled around 12:40 p.m. BST in London, where the price cratered by 20 cents in just seconds. It recovered a bit into the afternoon gold fix — and then was quietly sold lower from there into the 5:00 p.m. EDT close.
The high and low tick in this precious metal were recorded as $19.80 and $19.22 in the September contract.
Silver was closed yesterday at $19.255 per ounce, down 44.5 cents from Thursday. Net volume was reasonably heavy at just under 54,000 contracts — and roll over activity out of September was pretty decent.
The platinum price was forced to follow a very similar path as both gold and silver — and its low tick of the day came at 9 a.m. in New York. The rally after that got capped at the p.m. gold fix — and was sold down about 5 bucks into the close. Platinum finished the Friday session at $1,112 spot, down 17 dollars on the day.
The palladium price followed the other three metals in miniature form up until about 10 a.m. Zurich time. Then it crawled higher until shortly after 2 p.m. EDT in the thinly-traded after-hours market — and traded flat from there. Palladium closed down a buck at $709 spot.
The dollar index closed very late on Thursday afternoon in New York at 94.15 — and began to chop higher in a fairly wide range until it hit a 94.60 price ceiling at 8:30 a.m. in New York. Every attempt to trade above that mark got sold down — and about ten minutes before the COMEX close the index turned lower for good. It shed about 15 basis points by 3:30 p.m. — and then gained about half of the back by the close. The dollar index finished the Friday session at 94.48 — up 33 basis points on the day.
And here’s the 6-month U.S. dollar index chart — and the jury is still out on whether this current swoon in the dollar index is over or not.
The gold stocks gapped down a bunch at the open, then rallied to their respective high ticks right at 11 a.m. in New York trading. From that point, they sold off very quietly until 1 p.m. — and then traded mostly flat for the rest of the day. The HUI closed down 2.22 percent.
It was more or less the same trading pattern for the silver equities, except their high ticks came at the London p.m. gold fix — and then like the gold shares, quietly sold off until shortly before 1 p.m. EDT, before chopping quietly sideways for the rest of the day. Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down 3.90 percent. Click to enlarge if necessary.
And here are three charts from Nick that tell all. The first one shows the changes in gold, silver, platinum and palladium for the past week, in both percent and dollar and cents terms, as of Friday’s closes in New York — along with the changes in the HUI and Silver Sentiment/Silver 7 Index. The Click to Enlarge feature really helps on all three charts.
And the chart below shows the month-to-date changes as of Friday’s close.
And below are the year-to-date changes as of the close of trading yesterday.
The CME Daily Delivery Report showed that 46 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday. The three ‘largest’ short/issuers were Goldman Sachs, Morgan Stanley and ADM. They totalled 43 of the 46 contracts. The long/stoppers were the two usual suspects — JPMorgan with 34 for its ‘client’ account — and MacQuarie Futures with 10 contracts for its own account. I won’t bother linking the Issuers and Stoppers Report for this small amount.
The CME Preliminary Report for the Friday trading session showed that gold open interest in August fell by 165 contracts, leaving 673 still open, minus the 46 contracts mentioned in the previous paragraph. Thursday’s Daily Delivery Report showed that 157 gold contracts were posted for delivery on Monday, so that means that 165-157=8 gold contract holders in the August delivery month who were short, were let off the hook by the parties that held the long positions against them. Silver o.i. in August dropped by 78 contracts leaving only 16 left. Thursday’s Daily Delivery Report showed that 78 were posted for delivery on Monday, so the numbers work out perfectly.
September o.i. in gold continues to decline quietly, but very slowly. This time it dropped by 37 contracts leaving 4,413 still around — and October open interest in gold rose again, this time by 216 contracts, increasing the total to 48,168 contracts.
There were no reported changes in either GLD or SLV yesterday.
There was another sales report from the U.S. Mint on Friday. They sold 3,000 troy ounces of gold eagles — and 50,000 silver eagles.
Month-to-date the mint has sold 36,500 troy ounces of gold eagles — 5,000 one-ounce 24K gold buffaloes — and 580,000 silver eagles. These are pitifully small silver eagles sales — and I would expect you’d have to go back the better part of a decade to find a similar low sales month.
There was movement in gold over at the COMEX-approved depositories on Thursday. They reported receiving 48,226.500 troy ounces/1,500 kilobars [SGE kilobar weight] over at HSBC USA — and shipped out 20,666 troy ounces. With the exception of 1 kilobar out of Manfra, Tordella & Brookes, Inc. — the rest came out of Canada’s Scotiabank. The link to that activity is here.
There was very decent activity in silver, as 600,715 troy ounces were reported received at the CNT Depository — and JPMorgan shipped out 600,017 troy ounces. The link to that activity is here.
It was pretty busy over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday. There were 5,357 kilobars reported received — and 3,331 shipped out the door. All of the action was at Brink’s, Inc. as per usual — and the link to that, in troy ounces, is here.
The Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday showed slight improvements in both silver and gold, with the emphasis on the word ‘slight’.
In silver, the Commercial net short position improved by a smallish 2,717 contracts, or 13.6 million troy ounces. The accomplished this by increasing their long positions by 2,156 contracts — and they covered 561 short positions. The weekly change is the sum of those two numbers. The Commercial net short position still stands at a gargantuan and dangerous 503 million troy ounces.
In the commercial category, it was mostly the small traders, Ted Butler’s raptors, doing the work during the reporting week, as they increased their net long position by 2,700 contracts — as the Big 4 decreased their short position by around 100 contracts — and Ted said that the ‘5 through 8’ traders added about 100 contracts to their short position. Ted said that JPMorgan’s short position remains unchanged from last week at around 33,000 contracts.
Under the hood in the Disaggregated COT Report, it was all Managed Money traders — and then some, as they decreased their long position by 2,574 contracts, plus they added 2,451 short contracts as well, for a total weekly swing of 5,025 contracts, which was almost double the change of the commercial net short position. The ‘Other Reportables’ category decreased their total long position by about 1,100 contracts as well — and to make up the difference, the Nonreportable/small traders were piling in on the long side as they purchased long contracts and covered short contracts to the tune of 3,358 contracts.
Here’s the 9-year chart for the silver COT Report — and it’s still ugly in the extreme, as this past week’s changes are barely a rounding error in the grand scheme of things. Click to enlarge.
The changes in gold were even smaller, as the Commercial net short position in that precious metal only declined by a minuscule 1,948 contracts, or 194,800 troy ounces of paper gold. To get to this number during the reporting week, the commercial traders sold 123 long contracts, but they also covered 2,071 short positions — and the difference between those two numbers was the change for the week.
Ted said that the Big 4 traders actually increased their short position by about 2,400 contracts during the reporting week and, like in silver, Ted said that the small commercial traders did the real heavy lifting, as they decreased their short position by 4,800 contracts. Based on these two numbers, the ‘5 through 8’ traders had to have increased their short position by 500 contracts during the reporting week to get the numbers to work out right.
Under the hood in the Disaggregated COT Report, the Managed Money longs reduced their long position by 4,344 contracts, but they also reduced their short position by 1,819 contracts, with the difference between those two numbers — 2,524 contracts — being the change for the reporting week. The difference between the Managed Money change — and the commercial net short position, about 600 contracts, came via the ‘Nonreportable’/small trader category, as they increased their short position by about 650 contracts during the reporting week. The ‘Other Reportables’ category was unchanged.
Here’s the 9-year COT chart for gold — and although the Commercial net short position ‘improved’ to 31.10 million troy ounces of paper gold, it’s still at nose-bleed levels no matter how you care to interpret it. Click to enlarge.
Of course there was certainly improvement since the cut-off — and particularly after Friday’s price declines in both precious metals. And silver went below it’s 50-day moving average briefly on that ‘no bid’ situation in London trading yesterday. But there are still two more trading days left in the reporting week for next Friday’s COT Report — and anything can happen between now and then — and just might.
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. 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.’ For the current reporting week, the Big 4 are short 144 days [almost 5 months] of world silver production—and the ‘5 through 8’ traders are short an additional 69 days of world silver production—for a total of 213 days, which is just over 7 months of world silver production, or 517 million troy ounces of paper silver held short by the Big 8. These numbers are exactly unchanged from what they were in the COT Report from a week ago.
And it should be pointed out here that in the COT Report above, the Commercial net short position in silver is 503 million troy ounces. So the Big 8 hold a short position larger than the net position—and by about 14 million troy ounces. That’s how grotesque, twisted, obscene—and dangerous—this COT situation in silver has become—and gold and platinum aren’t far behind.
And as an aside, the two largest silver shorts on Planet Earth—JPMorgan and Canada’s Scotiabank—are short about 105 days of world silver production between the two of them—and that 105 days represents around 73 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 20 days of world silver production apiece.
And based on Ted’s estimate of JPMorgan’s short position of 33,000 contracts, JPMorgan is short 69 days of world silver production all by itself. Because of that, the approximate short position in silver held by Scotiabank works out to around 36 days of world silver production, maximum.
In gold, the Big 4 are short 74 days of world gold production — and the ‘5 through 8’ another 26 days of world production, for a total of 100 days. You don’t need a calculator to see that the Big 4 in gold hold 74 percent of the entire short position held by the Big 8. How’s that for concentration within a concentrated short position???
The Big 8 traders are short 49.1 percent of the entire open interest in the COMEX futures market in gold, plus they’re short 50.2 percent of the entire COMEX futures market in silver—and these positions are held against thousands of other traders in these two precious metals who are long the COMEX futures market. Ted pointed out that if you subtract out the market-neutral spread trades in both these precious metals, the Big 8 are actually short quite a bit more than 50 percent of the total open interest in both metals.
I’ll be more than interested in what Ted may have to say about all this in his weekly review later today.
Since the 20th of August fell on a Saturday this month, the good folks over at The Central Bank of the Russian Federation updated their website with their July data yesterday. They reported adding 200,000 troy ounces of gold to their reserves in July — and here’s Nick’s chart with that data [in metric tonnes] added in. Their total reserves now stand at 1,505 metric tonnes. The ‘click to enlarge‘ feature is really useful with this chart.
I have a lot of stories for you today, including quite a few that I’ve been saving for Saturday’s column for length and/or content reasons. I hope you have enough time left in your weekend to read the ones that interest you.
CRITICAL READS
Busting the Banksters: The Case For Super Glass-Steagall, Part 1 — David Stockman
The mainstream narrative about “recovery” from the financial crisis is a giant con job. And nowhere does the mendacity run deeper than in the “banks are fixed” meme—an insidious cover story that has been concocted by the crony capitalist cabals that thrive at the intersection of Wall Street and Washington.
That’s not to say that the Wall Street cover story is hiding anything. In recent months even the mainstream media has published stunning evidence of malefactions and abuse at the great megabanks—especially Bank of America and Citigroup.
Indeed, a recent Wall Street Journal expose about the depredations of Bank of America shows that the latter is in a class all by itself when it comes to bankster abuse and criminality.
Not surprisingly, at the center of this latest malefaction is still another set of schemes to grossly abuse the deposit insurance safety net and enlist the American taxpayer in the risky business of financing high-rolling London hedge funds.
This excerpt from David’s Stockman’s soon-to-be-published book, appeared on his website yesterday — and I thank Roy Stephens for sending it along. Another link to this article is here.
Irrational Exuberance Redux — The Financial Times
So, the bullish argument has it, the inflection point in U.S. earnings has been reached, a bear market has been averted, emerging markets are taking up some of the strain again and brokers have been slow to catch up with reality.
Against this, estimates for the current third quarter are actually still falling, and including energy, the brokers still call for a slight fall of 0.4 per cent. Earnings in the second quarter were better than expected, but they always are; they beat expectations by less than has been usual in recent years. If this is an inflection, the turn it signals is not at an acute angle.
Company managements tended to be downbeat when guiding questioners during their earnings conference calls. Margins, which have been historically high, tended to fall. There are nerves about the effect of U.S. electoral uncertainty on consumers, and on the fallout from Brexit, about which much remains uncertain.
Add to this that U.S. retail sales data suggest a sluggish economy, meaning that there is little reason to expect a big rise in revenues; that margins will be hard to expand; and that core inflation and earnings data suggest at least a whiff of inflation and a risk of higher rates from the Fed. Put all these together, and the highest prospective earnings multiples since the dotcom boom look like irrational exuberance.
The author of this article, John Authers, is the Financial Times‘ Senior Investment Commentator. It appeared posted in the clear on David Stockman’s website on Friday sometime — and it’s the second offering in a row from Roy Stephens. Another link to this commentary is here.
Everybody Has a Plan for Fannie and Freddie But Nothing Gets Done
http://www.bloomberg.com/news/articles/2016-08-18/the-fix-is-out-fannie-and-freddie-heading-for-new-troubles
The hole at the corner of 15th and L streets, in downtown Washington, is deep — and getting deeper.
Earth-movers there are laying the foundations of a shiny new headquarters for Fannie Mae, the bailed-out giant of American mortgages.
But the sleek design, replete with glass sky bridges, belies a sober reality: Fannie Mae and its cousin, Freddie Mac, are once again headed for trouble.
In fact, there’s almost no way around it. On Jan. 1, 2018, the two government-sponsored enterprises will officially run out of capital under the current terms of their bailout. After that, any losses would be shouldered by taxpayers.
Granted, few people are predicting a disaster like the one in 2008, when the GSEs had to be thrown a $187.5 billion federal lifeline. But eight years later, people still don’t agree on what to do with these wards of the state. In Washington and on Wall Street, the fight over Fannie and Freddie drags on.
This Bloomberg story showed up on their Internet site at 3:00 a.m. Denver time on Thursday morning — and it was updated about six hours later. The original headline read “The fix is out: Fannie and Freddie heading for new troubles“. It comes courtesy of West Virginia reader Elliot Simon — and another link to it is here.
Walmart’s Out-of-Control Crime Problem Is Driving Police Crazy
Darrell Ross—Officer Walmart to his colleagues in the Tulsa Police Department—operates for up to 10 hours a day out of the security office of a Walmart Supercenter in the city’s northeast corner. It’s a small, windowless space with six flat-screen monitors mounted on a pale blue cinder-block wall, and on this hot summer day, the room is packed. Four Walmart employees watch the monitors, which toggle among the dozens of cameras covering the store and parking lot, while doing paperwork and snacking on Cheez Whiz and Club Crackers. In a corner of the room, an off-duty sheriff’s officer, hired by Walmart, makes small talk with the employees.
As soon as Ross walks in the door, around 2 p.m., he’s presented with an 18-year-old who tried to leave the store with a microwave oven. Ross focuses his gaze and talks in a low voice to the young man, who just graduated from high school and plans to go into the military. He also attempts to calm the boy’s mother, who rushed to the store and is worried that her son won’t be able to enlist if he gets a criminal record. “You need to start taking responsibility for your actions,” Ross tells the teenager. “You’re a man now.” He tells the mother that because it was the boy’s first offense, he won’t be arrested—but if he messes up twice more, he’ll be charged with a felony. Ross slips a pair of reading glasses out of his bulletproof vest and writes the young man a summons to appear in court.
Before he can finish the paperwork, Walmart security employees catch another shoplifter. They bring in a middle-aged woman with big sunken eyes and pale cheeks, her hair tied in a messy bun. Employees caught her using phony gift cards. She rattles off excuses: The cards were given to her by a friend, she’s just gotten out of the hospital, she’s dehydrated. At one point she pretends to vomit into a trash can. Picking up the odor of pot, Ross takes a look in her handbag and finds marijuana roaches, along with a small scale and a pill bottle full of baggies. A computer check reveals five outstanding warrants for her arrest.
This amazing, but very long feature article was posted on the Bloomberg website on Wednesday — and I thank Brad Robertson for sharing it. He got it via Zero Hedge. For obvious length and content reasons, had to wait for today’s column. Another link to this story is here — but it’s not one you want to read on your mobile device.
Doug Noland: The “Neutral Rate”
Things have not progressed as expected. Years of unthinkable monetary stimulus have failed to achieve either general prosperity or consistent inflation in the general price level. Fragilities are as acute as ever. So policymaker reassessment is long overdue. Not surprisingly, however, there’s no second guessing “activist” (inflationist) monetary doctrine. Central bankers are not about to admit that a policy of zero rates and Trillions of monetization is fundamentally flawed. Apparently, we are to believe that forces outside their control have pushed down the “neutral rate.” The solution, predictably, is lower for longer – along with more government spending and programs.
Rapid technological advancement coupled with momentous financial innovation proved absolutely engrossing. It was easy to ignore Enron, WorldCom and the like, just as it was to disregard 1994’s bond market tumult, the Mexican meltdown, the SE Asia debacle, the Russian collapse and LTCM. By 2001 it was rather obvious that New Age finance was highly unstable. Yet the 2002 corporate debt crisis along with the arrival of Dr. Bernanke to the The Marriner S. Eccles Building ensured that the FOMC pursued even more egregious policy blunders.
The Federal Reserve has been rationalizing loose monetary policies for 20 years now. Instead of Alan Greenspan’s electrifying productivity miracle, it’s a future of dreadful “secular stagnation.” Enron was little small potatoes compared to the frauds that followed. And the key issue from two decades ago somehow remains unaddressed: over-liquefied and speculative securities markets are incapable of effectively allocating financial and real resources. Moreover, central bank command over both the cost of finance and the performance of securities markets ensures dysfunction both financially and economically.
Draghi’s “Whatever it takes” and Bernanke’s “pushing back” unleashed a precarious Terminal Bubble phase. With economic and market risks now so elevated, even the thought of recession or bear market has become unacceptable to central bankers.
Doug’s weekly Credit Bubble Bulletin appeared on his Internet site very late last night Denver time — and another link to his weekly commentary is here.
Decline of Empire: Parallels Between the U.S. and Rome, Part V — Doug Casey
Despite all our similarities with Rome, and even equipped with our understanding of why Rome collapsed, we can’t avoid Rome’s fate just by trying to avoid Rome’s mistakes. Yes, we have an analogue of early Christianity chewing away at our civilization’s foundations. And yes, we have a virtual barbarian invasion to contend with. But there’s another factor, I think, that worked against the Romans and is working against us… one Gibbon didn’t consider.
We can’t evade the second law of thermodynamics, which holds that entropy conquers everything and that over time all systems degrade and wind down. And that the more complex a system becomes, the more energy it takes to maintain it. The larger and more complex, interconnected, and interdependent it becomes, the more prone it is to breakdown and catastrophic failure. That includes countries and civilizations.
The Romans reached their physical limits within the confines of their scientific, engineering, economic, and other areas of knowledge. And the moral values of their civilization, their founding philosophies, were washed away by a new religion. We may reach our technological limits. And our founding values are certainly being washed away.
This must read commentary by Doug appeared on the internationalman.com Internet site on Friday morning — and another link to it is here.
Hard times in Venezuela breed malaria as desperate people flock to mines
The 12th time Reinaldo Balocha got malaria, he hardly rested at all. With the fever still rattling his body, he threw a pickax over his shoulder and got back to work — smashing stones in an illegal gold mine.
As a computer technician from a big city, Balocha was ill-suited for the mines, his soft hands used to working keyboards, not the earth. But Venezuela’s economy collapsed on so many levels that inflation had obliterated his salary, along with his hopes of preserving a middle-class life.
As a computer technician from a big city, Balocha was ill-suited for the mines, his soft hands used to working keyboards, not the earth. But Venezuela’s economy collapsed on so many levels that inflation had obliterated his salary, along with his hopes of preserving a middle-class life.
So, like tens of thousands of other people from across the country, Balocha came to these open, swampy mines scattered across the jungle, looking for a future. Here, waiters, office workers, taxi drivers, college graduates, and even civil servants on vacation from their government jobs are out panning for black-market gold, all under the watchful eyes of an armed group that taxes them and threatens to tie them to posts if they disobey.
This sad story, which appeared on The New York Times website on Monday, was picked up by Boston Globe on the same day. Brad Robertson sent it to me on Tuesday — and for content reasons had to wait for my Saturday column. Another link to this story is here.
Royal Bank of Scotland to charge major financial institutions for holding their cash
Royal Bank of Scotland is to start charging major financial institutions for any cash it holds on their behalf for trading purposes, in the latest illustration of the impact of Mark Carney’s post-Brexit vote stimulus package.
It is the first time a bank has started to make charges for sterling deposits since the governor of the Bank of England announced on 4 August that interest rates would be cut from 0.5% to 0.25% to stave off any economic downturn following the vote to leave the EU. Carney said he was not a fan of negative rates.
Even so, from Monday, about 70 RBS customers will start to receive negative rates because they will charged for any cash they place as collateral for trading in complex financial products, such as futures or options. The move will not affect the small business customers whom the bank, and its NatWest arm, warned last month it may have to charge for making deposits.
Negative rates, though, will be applied for customers who trade through RBS on deals guaranteed by clearing houses. RBS is 73% owned by the taxpayer.
This story showed up on theguardian.com Internet site at 7:23 p.m. BST on their Friday evening, which was 2:23 p.m. EDT in New York. I thank Jon Barker for sliding it into my in-box just after midnight Denver time this morning — and another link to it is here.
Exclusive – Monte dei Paschi CEO, former chairman under investigation
The chief executive of Monte dei Paschi di Siena, Fabrizio Viola, and the Italian bank’s former chairman, Alessandro Profumo, are under investigation for alleged false accounting and market manipulation, a source with knowledge of the matter said.
The investigation, which started in 2015 following complaints filed by small shareholders and consumer associations, comes as the Tuscan bank prepares to launch a €5 billion (£4.5 billion) stock sale after emerging as the weakest bank in Europe in industry stress tests in July.
A spokesman for Monte dei Paschi said the decision to investigate Viola and Profumo followed a proposal by two shareholders to seek damages from the two executives which was rejected by other shareholders at an April meeting.
“(Under Italian law) prosecutors are bound to open an investigation when they receive a complaint,” the spokesman said in an e-mailed comment.
This Reuters story, filed from Florence, was posted on their website at 5:17 p.m. BST on Thursday afternoon — and it’s a news item that I found in yesterday’s edition of the King Report. Another link to this article is here.
Merkel sees no end to E.U. sanctions against Russia
There is no reason to lift the European Union’s sanctions against Russia as Moscow has not fulfilled all of its commitments under an international peace plan, German Chancellor Angela Merkel said in an interview published on Friday.
Merkel told the RedaktionsNetzwerks Deutschland (RND) that Russia had caused a major crisis by annexing the Black Sea peninsula of Crimea in 2014 and with its support for separatists in eastern Ukraine.
“Europe had to react against this violation of basic principles,” Merkel said.
She added that she and French President Francois Hollande were working “with all one’s strength” to urge Ukraine and Russia to implement the so-called Minsk ceasefire agreement despite all the difficulties.
Just amazing. One has to wonder who put her up to this, as she didn’t make this decision on her own. This Reuters news item, which is written like a disinformation/propaganda piece, put in an appearance on their Internet site at 8:54 a.m. EDT yesterday morning — and it’s courtesy of Brad Robertson via Zero Hedge. Another link to this story is here.
Tales of the New Cold War: Ukraine Commandos in Crimea. Russian Warplanes in Iran — John Batchelor Interviews Stephen F. Cohen
This has been another week of major upheavals in the NCW (New Cold War) and Batchelor begins with the Kiev Special Forces attack in Crimea that Putin considers a game changer in his relations with Ukraine. Essentially he has lost patience with dealing with Ukraine. Also on the list is this week Russia obtaining the use of a Iranian air base, Hamedan, to bomb Syrian ISIS forces in Aleppo. But the most important story for Cohen is the Kiev special forces attack directly against Russian territory. For Putin this has been a game changer and he went on Russian TV himself to express that Kiev has no interest in ending the civil war. That is now the official position of the Russian government, and Putin added that he “would no longer participate in the Minsk Four”. Peace is impossible. From my perspective officially Putin is now prepared to defend Russia against military action by Kiev, as token as it is likely to be, and will simply endure this situation to descend to whatever outcome the dissolution of that country means. And this change becomes a gift to American propagandist who can now blame Putin for the end of Minsk2 – and, of course ignore the fact that Russia was attacked. But treating Kiev as an enemy state also means that Washington should be very reluctant about “improving” Kiev’s military and sending more “advisors” as this would be seen as much more the direct threat to Russia than before. It is also very dangerous as Kiev may attempt to draw in a Russian military response with repeated “invasions” of Crimea. The hope in Kiev would be that this could involve an American response. However. recent reports indicate a growing coolness to Kiev provocations by both Washington and the E.U.
The Russian air base in Iran now means that Iran is more overtly included in the NCW (New Cold War). Cohen considers this move a difficult decision for Putin. This puts Russian forces more clearly in alliance with Iran when Obama and Putin are attempting a meaningful coalition against ISIS in Syria with an advanced hope of détente and reducing tensions of the NCW. So the peace game is now more complicated – and both leaders want to claim a success in Syria with the fall of Aleppo with minimal casualties to civilians. All know that the fall of Aleppo (and essentially the defeat of ISIS) is not dependent on US participation, but the diplomatic gains for both are in the broader scope. So the use of the Iranian base and potential setback for cooperation with Washington was a difficult decision for Putin. But what is very likely going on in Washington to mitigate against this problem is the Israel lobby who are now backing the Russian position. Israel knows that ending the war with Assad in Damascus is far better than having ISIS controlling Syria (another destroyed Libya) on its border. That Israel has undoubtedly pushed the Americans into a policy of destabilization of its Arab enemies is not in doubt, but given that the results have placed them in a worst position with the onset of ISIS is a reality that is most ironic.
An American politics subject finishes up the broadcast with a discussion concerning, as Batchelor puts it: “the surrogate war of political advisors” in the Trump campaign. Paul Manafort, the new campaign chairman for Donald Trump has a Ukrainian political connection with the deposed president Yanukovych and is victimized by a smear campaign (New York Times). Although not particularly important geopolitically Cohen uses the story to illustrate how low journalism has sunk in the U.S. Readers are reminded that this is a synopsis and that the hearing of the broadcast will be much more meaningful – especially regarding the Ukrainian and Syrian wars.
This 40-minute audio interview showed up on the audioboom.com Internet site on Tuesday — and I thank Ken Hurt for the link, but the big THANK YOU as always goes to Larry Galearis for the above executive summary. Another link to “all of the above” is here.
West spreads its democracy like coffee in bags, but people need to make own choice’ – Mikhail Gorbachev
Western leaders have long followed the policy of imposing democratic values in countries without the consent of the people of those nations, Mikhail Gorbachev says, noting this was partly to blame for the USSR’s collapse.
The former Soviet leader spoke to Interfax ahead of the 25th anniversary of the aborted 1991 coup that brought about the end of the Soviet Union.
“At the time, I told the Americans: you are trying to impose your democracy on the people of different countries, spreading it around like coffee in bags, but we must give the people a chance to make their own choice. But they continued and continue to pursue this foreign policy. Even President Obama, democratically elected and enjoying in this regard a significant authority in the country, could not change this course – the course on imposing one-legged solutions. However, I doubt that he wanted to,” Gorbachev said.
Gorbachev, whose strategic aims brought about the end of the Cold War, blamed the West for applauding the USSR’s collapse instead of aiding the country as it didn’t want the union to be a “powerful democratic state.”
This article, which is definitely worth reading, appeared on the Russia Today website at 3:09 p.m. Moscow time on their Friday afternoon, which was 7:09 a.m. in Washington — EDT plus 8 hours. I thank Roy Stephens for pointing it out — and another link to this story is here.
Rethinking The Cold War…and the new one — Paul Craig Roberts
The Cold War began during the Truman administration and lasted through the Eisenhower, Kennedy, Johnson, Nixon, Ford, and Carter administrations and was ended in Reagan’s second term when Reagan and Gorbachev came to an agreement that the conflict was dangerous, expensive, and pointless.
The Cold War did not cease for long—only from the last of Reagan’s second term and the four years of George H. W. Bush’s term. In the 1990s President Clinton restarted the Cold War by breaking America’s promise not to expend NATO into Eastern Europe. George W. Bush heated up the renewed Cold War by pulling the US out of the Anti-ABM Treaty, and Obama has made the war hotter with irresponsible rhetoric and by placing US missiles on Russia’s border and overthrowing the Ukrainian government.
The Cold War was a Washington creation. It was the work of the Dulles brothers. Allen was the head of the CIA, and John Foster was the Secretary of State, positions that they held for a long time. The brothers had a vested interest in the Cold War. They used the Cold War to protect the interests of their law firm’s clients, and they used it to enhance the power and budgets associated with their high positions in government. It is much more exciting to be in charge of foreign policy and covert activity in dangerous times.
Whenever a reformist democratic government appeared in Latin America the Dulles brothers saw it as a threat to the holdings that their law firm’s clients had in that country. These holdings, sometimes acquired with bribes to nondemocratic governments, diverted the country’s resources and wealth into American hands, and that is the way the Dulles brothers intended to keep it. The reformist government would be declared Marxist or Communist, and the CIA and State Department would work together to overthrow it and place back in power a dictator in bed with Washington.
This rather longish commentary by Paul falls into the absolute must read category, even if you’re not a serious student of the New Great Game. It’s the Readers’ Digest version of John Perkins’ book “Confessions of an Economic Hit Man“. It was posted on the lewrockwell.com Internet site last Saturday — and I thank Jid Das for sending it along. Another link to this must read story is here.
Russia’s Middle East breakthrough…no wonder Washington’s grouchy — Finian Cunningham
Russia’s air raids in Syria, launched from Iranian territory this week, were received by Washington with a mixture of consternation and disappointment. Understandably, too. It marks a breakthrough in Russia’s standing in the Middle East.
Russia is working closely in a quartet that includes Iran, Iraq and Syria. We can add Lebanon because of the cooperation on the ground in Syria with Hezbollah, which is one of the governing coalition partners in Beirut.
Even Middle East countries, thought of as Washington’s partners, are showing a newfound appreciation of Russia and the leadership provided by President Vladimir Putin. The notably conciliatory relations between Turkey and Russia – in the wake of a failed coup that Ankara implicates a cleric who lives in the U.S. in – speaks of a tectonic shift in regional geopolitics.
Despite deep differences over Syria, Russia has managed to retain cordial relations with other states normally considered American proteges and enemies of Moscow’s ally in Syria. Putin has over the past year warmly received Israeli Prime Minister Benjamin Netanyahu, while also respectfully hosting Saudi leaders in Moscow. Russia’s foreign minister Sergey Lavrov was recently welcomed in the Persian Gulf’s Qatari capital, Doha, for high-level talks on Middle East conflict resolution.
Contrast this all-round respect for Russia with America’s increasingly dismal reputation. Decades of US-led destructive wars, failed nation-building schemes and regime-change machinations have diminished Washington’s standing in the region, even among its supposed partners. Privately and publicly, the Israelis, Turks and Saudis seem to harbor contempt towards their American patron in spite of official designation as allies.
This longish opinion piece, is definitely worth your while if you’re a serious student of the New Great Game. It put in an appearance on the Russia Today website on Tuesday morning at 8:46 a.m. Moscow time, which was 12:46 a.m. in Washington. It’s another offering from Roy Stephens — and another link to this article is here.
Sputnik International interviews the Saker
Sputnik: Following the meeting between Vladimir Putin and Recep Erdogan Startfor suggested that Ankara could make concessions to Moscow and Iran on Syria. Is a Russo-Turko-Iranian alliance possible? Is it possible that Turkey will soften its tough stance on the Syrian government and Bashar al-Assad?
The Saker: It is extremely hard to predict what Erdogan will do next due to his personality and to the objectively difficult situation Turkey is in. While I fully agree that it is likely Turkey will have to make concessions to Russia and Iran, this is primarily due to the fact that Erdogan has now soured his relationship with the traditional patrons of Turkey: the NATO/US/EU. I suspect that Erdogan will be far more willing to make promises than to actually deliver on them. The Russians are acutely aware of that and there is exactly *zero* real trust towards Erdogan in the Kremlin. On one hand, most Russian analysts see Erdogan as a smart man, but also as a treacherous megalomaniac who absolutely cannot be trusted. But on the other hand, Turkey is a large and powerful country, strategically located, and a key neighbor of Russia. Thus Russia simply has to try to establish the best relationship possible with whomever is in power in Turkey, even if that means dealing with a distasteful character like Erdogan.
In sharp contrast to Turkey, the Iranians are trustworthy even if their interests are not always the same as Russia’s, and that is how it should be. I would characterize the relationship between Russia and Iran as a strategic partnership of two different but equal parties who collaborate with each other but who retain their own, sovereign, agenda. This is not a formal alliance but, in a way, this is even better as it is something much more flexible and viable in the long term. This is also similar to the kind of strategic partnership Russia has with China, even though the one with China is far deeper and really should be called a “strategic symbiosis”.
This interview, which is less than a 10-minute read was posted on the saker.is Internet site on Thursday — and I thank ‘aurora’ for passing it around on Friday morning. It’s a must read as well– and another link to it is here.
‘Tsunami wave’ to wipe out Islamic State if Mosul Dam collapses
The Mosul Dam near an Islamic State stronghold in Iraq faces a catastrophic risk as it stands on unstable ground where soft gypsum rock is constantly eroding. If a breach occurs as warned by a US report, over a million Iraqis living along the Tigris River will be wiped out. IS dismisses this warning as mere propaganda to scare them off even as US military is planning an offensive in early October to recapture the northern Nineveh province from IS, with a final battle in Mosul at month-end. History may repeat. Just like Tigris floods destroyed the Assyrian capital Nineveh in 612 B.C. helping the Medes and Babylonians to victory, dam breach may trigger a flood that will overwhelm IS and make the job much easier for U.S.-backed Iraqi and Kurdish forces.
In a 2006 report, the U.S. Army Corps of Engineers called Mosul Dam “the most dangerous dam in the world”, and the situation has deteriorated since then.
In Mach 2016, CENTCOM Commander Gen. Lloyd Austin III and U.S. Embassy in Baghdad both warned the dam is on the verge of collapse, and as many as 500,000 to 1.47 million Iraqis living along the Tigris River could be swept away by a tsunami estimated to be up to 70 feet high within hours. They urged everyone to implement an evacuation plan and to move at least 3 miles to 4 miles away from the banks.
However, there is one problem. The dam sits a few miles upstream from Mosul that is under Islamic State (IS) control, and the Iraqi government is unable to inform or coordinate evacuation plans with the population there. In fact IS took control of Mosul Dam in 2014 for a few weeks before it was wrested back by Kurdish forces.
This is the second story on the Mosul damn that I’ve posted in this column this year. This iteration showed up on the Asia Times website on Monday — and is certainly worth reading if you have the interest. Once again I thank Roy Stephens for bringing it to our attention — and another link to it is here.
While Beijing and Manila talk, Washington spoiling for a fight
As much as Washington may hate it, the fact is Beijing and Manila are diplomatically discussing the situation in the South China Sea.
Champagne bottles are not popping yet, but Special Philippine envoy, former President Fidel Ramos, did go to Hong Kong, and on behalf of President Rodrigo Duterte, got together with Fu Ying, the chairwoman of the foreign affairs committee of the National People’s Congress. On the record, Ramos made sure that Manila is all in for formal negotiations.
The starting block concerns some fishy business – literally. Beijing and Manila may be on their way already to open the highly disputed Scarborough shoal, which falls right into what Manila describes as the West Philippine Sea, to both Chinese and Filipino fishermen, as in the joint development of fish farms.
Wu Shicun, president of the National Institute for South China Sea Studies, let it be known that Ramos’s visit to Hong Kong was just an opener. Of course his next step will have to be a trip to Beijing to talk to the hig