03 September 2016 — Saturday


The gold price was up a few bucks by 9 a.m. China Standard Time [CST] on their Friday morning, but got turned lower from there, with the apparent low tick of the day coming shortly before London opened.  It didn’t do a lot until the noon London silver fix — and at that point it rallied a bit into the COMEX open.  It rallied more than 5 bucks in less than a minute, before getting sold down hard into the 8:30 a.m. EDT release of the job numbers.  Then the price went vertical — but the powers-that-be were there in an instant to take the short side of the trade on every long that was being placed by the Managed Money and small traders.  Volume was immense — and the initial volume spike on the 5-minute tick chart was something north of 12,000 contracts.

After the initial price spike, gold was sold lower until around 10:45 a.m. in New York, which the time of the dollar index high tick — and at that juncture began to creep higher from there.  That quiet rally lasted until shortly after 4 p.m. in the thinly-traded after-hours market — and then it traded flat from there into the close.

The low and high ticks were reported by the CME Group as $1,307.40 and $1,334.00 in the December contract.

Gold was closed in New York on Friday afternoon at $1,324.80 spot, up $11.20 from Thursday.  Net volume, which includes both October and December, was monstrous at 215,000 contracts.

Brad didn’t have the 5-minute gold tick chart for us today, so I’m posting the New York Spot Gold [Bid] chart so you can see the price action that started at, or just before, the 8:20 a.m. EDT COMEX open.

The price action in silver was almost identical to gold’s, so I’ll spare you the usual play-by-play.  But the capping of the price shortly after 8:30 a.m. should leave no doubt in anyone’s mind the JPMorgan et al were at battle stations in silver as well when the job numbers hit the tape.

The low and high ticks in this precious metal were reported as $18.825 and $19.535 in the December contract.

Silver finished the Friday session at $19.42 spot, up 56.5 cents on the day — and almost on its high tick.  Net volume was a hair over 66,000 contracts.

With the exception of some minor variations, the platinum price followed a very similar price path — and heaven only knows what price it would have closed at if allowed to trade freely.  Platinum finished the Friday trading session just off its high tick at $1,062 spot — and up 17 dollars from its close on Thursday.

Ditto for palladium, although it’s price action lacked the ‘enthusiasm’ shared by the other three precious metals, but its quiet rally after the Zurich close was equally as impressive.  Palladium closed in New York yesterday at $677 spot, up 13 bucks on the day.

The dollar index closed very late on Thursday afternoon in New York at 95.65 — and then dipped down to its 95.59 Far East low just a few minutes after 12 o’clock noon in Shanghai.  It rallied from there until around 10:35 a.m. in London — and rolled over from there.  It vanished into the nether reaches of the earth on the job numbers — and it took the usual ‘gentle hands’ to bring it back from the brink, as the 95.19 low tick came just minutes after 8:30 a.m. in New York.  From there it took a number of ramp jobs to get the index back into positive territory to stay — and the 95.96 high tick appeared to have been printed around 10:35 a.m. in New York.  It chopped mostly lower from there, finishing the Friday session at 95.87 — and up 22 basis points from Thursday’s close.

And here’s the 3-year year U.S. dollar chart — and it’s a certainty that the chart wouldn’t look like this if the components of the dollar index were allowed to trade freely.  Yesterday was just another foiled attempt by this index to seek out its intrinsic value, which is very far down from here.

The gold stocks gapped up 4 percent at the open, but by 10:45 a.m. in New York trading, had given up over half of those gains.  But another rally began around 11:30 a.m. EDT and, like the gold price itself, the gold shares rallied just as quietly for the rest of the Friday session.  The HUI closed up 3.57 percent.

The silver equities gapped up a bit over 2 percent at the open and, like their golden brethren, gave up well over half of those gains by around 10:45 a.m. EDT.  But the rally that began at that point followed the silver price like a shadow for the rest of the day — as they crawled higher right into the close.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed higher by 3.73 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 for Day 4 of September deliveries showed that zero gold and 253 silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.  There were five different short/issuers — and the only two worth mentioning are International F.C. Stone with 127 contracts out of their client account, plus HSBC USA with 96 contracts out of their house account.  There were a dozen long/stoppers — and at the top of the list once again was MacQuarie Futures and JPMorgan, with 69 and 39 contracts for their respective in-house [proprietary] trading accounts.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Friday trading session showed that gold open interest in September fell by only 52 contracts, leaving 514 left.  Thursday’s Daily Delivery Report showed that only 47 gold contracts were posted for delivery on Monday, so that means that 52-47=5 gold contract holders in the September delivery month were given a free pass by those holding the long side of their contracts, as they obviously had no physical gold behind their short positions — and the longs didn’t want to push the issue.  Silver o.i. in September declined by 180 contracts, leaving just 2,019 left, minus the 253 mentioned in the previous paragraph.  The Daily Delivery Report on Thursday showed that 191 silver contracts were posted for delivery on Monday, so that means that 191-180=11 silver contracts were added to the September delivery month.

October open interest in gold dropped by a further 409 contracts — and that leaves 43,959 still around.

I look forward to what Ted has to say about ‘all of the above’ in his weekly review this afternoon, as he’s the real authority on all this.

There were no reported changes in GLD yesterday, but there was a tiny withdrawal from SLV, as an authorized participant removed 157,576 troy ounces.  I would suspect that this would represent a fee payment of some kind.

There was no sales report from the U.S. Mint on Friday.

Month-to-date, which is only two business days long so far, consists of the mint sales that were reported on Thursday — and that was 7,000 troy ounces of gold eagles — 1,000 one-ounce 24K gold buffaloes — and 140,000 silver eagles.

There was decent gold movement over at the COMEX-approved depositories on Thursday.  They reported receiving 20,535 troy ounces — and shipped out 19,579.350 troy ounces/609 kilobars [U.K./U.S. kilobar weight].  All the gold received went into Brink’s, Inc. — and of that amount there were 505 kilobars weighing 16,235.750 troy ounces, which is also the U.K./U.S. kilobar weight.  The gold that was shipped out all came out of Canada’s Scotiabank.  The link to the above activity is here.

It was another huge day in silver, as 1,179,407 troy ounces were received — and 1,868,529 troy ounces were shipped out the door for parts unknown.  A lot of the in/out activity was at the CNT Depository, but both HSBC USA and Scotiabank were involved as well.  If you’re interested, the link to all the action is here.

It was a very busy day for the forklift operators over at the COMEX-approved gold kilobar depository at Brink’s, Inc. in Hong Kong on Thursday.  They received 9,274 kilobars — and shipped out 9,622 of them.  This is one of the largest in/out days at this depository since it began operations in March of 2013.  The link to all that action, in troy ounces, is here.

The Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday, showed the expected declines in the Commercial net short positions in both silver and gold.  But I must admit that I was expecting much bigger improvements than the numbers showed.

In silver, the Commercial net short position only fell by 2,391 contracts, or 11.96 million troy ounces of of paper silver.  They arrived at this number by reducing their long position by 3,224 contracts, but they also reduced their short position by 5,615 contracts — and the difference between those two numbers was the change for the reporting week.  The Commercial net short position in silver now sits at 478.4 million troy ounces.

Ted said that the Big 4 traders only reduced their short position by about 600 contracts — and his estimation of JPMorgan’s short position remains at 33,000 contracts.  Next Friday’s Bank Participation Report will allow him to recalibrate that number.  The ‘5 through 8’ largest traders reduced their short position by around 400 contracts.  And Ted’s raptors, the commercial traders other than the Big 8, increased their long position by 1,400 contracts.

It was a bit better under the hood in the Disaggregated COT Report, as the Managed Money traders decreased their long position by 3,836 contracts, plus they added a minuscule 53 short contracts, for a total weekly change of 3,889 contracts.  The 1,500 contract difference between that number and the 2,391 contract change in the commercial net short position, was made up by changes in the ‘Other Reportable’ and ‘Nonreportable’/small trader categories — and their position changes for the week that was, were all over the map.  I don’t think I’ve seen such disparity between the reporting categories — and I was wondering out loud to Ted what these guys might be smoking while they’re trading.

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 [for the fourth week in a row] are barely rounding errors in the grand scheme of things. Click to enlarge.

In gold, the Commercial net short position improved by 16,262 contract.  They arrived at this number by adding 1,283 long contracts, plus they reduced their short position by a decent 14,979 contracts.  The sum of these two numbers is the change for the reporting week.  The Commercial net short position in gold is now down to 30.12 million troy ounces.

Ted said that the Big 4 reduced their short position by 11,300 contracts — and the ‘5 through 8’ traders did the same to the tune of 3,700 contracts.  Ted’s raptors, the commercial short holders other than the Big 8, reduced their short position by a further 1,300 contracts.

Under the hood in the Disaggregated COT Report the numbers were better.  The Manged Money traders reduced their long position by 17,870 contracts — and added 4,220 short contracts, for a total weekly change of 22,090 contracts.  The difference between that number, and the Commercial net short position, was made up [like it mathematically has to] with what was happening in the ‘Other Reportable’ and ‘Nonreportable’/small trader category.  And, like in silver, their weekly changes were all over the map as well.

Here’s the 9-year COT chart for gold — and it’s still at nose-bleed levels no matter how you care to interpret it — and this week’s improvement, although semi-decent, barely makes a dent in the overall picture.  Click to enlarge.

In our discussion on how little improvement there was during the reporting week, Ted mentioned two possible reasons: first, this is the best they can do — and they are in some trouble, or secondly, they’re in full control and waiting to pull the plug later.  Both sound plausible — and Ted’s hoping that next week’s Bank Participation Report will help shed some light on all this.

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 143 days [almost 5 months] of world silver production—and the ‘5 through 8’ traders are short an additional 67 days of world silver production—for a total of 210 days, which is just over 7 months of world silver production, or 510.3 million troy ounces of paper silver held short by the Big 8.  Both these categories only declined by 1 day of world production each since the last report.  Last week’s ‘Days to Cover’ Report showed that the Big 8 were short 212 days of world silver production.

And it should be pointed out here that in the COT Report above, the Commercial net short position in silver is 478.4 million troy ounces.  So the Big 8 hold a short position larger than the net position—and by about 32 million troy ounces.  That’s how grotesque, twisted, obscene—and dangerous—this COT situation in silver has become—and platinum and gold aren’t far behind.

On top of that, the Big 8 are short 53.8 percent of the entire open interest in silver on the COMEX futures market.  How insane is that?  And if you subtract out the market-neutral spread trades, it’s a reasonable assumption the Big 8 are short more than 60 percent of total open interest in silver.  In gold it’s ‘only’ 47.8 percent of the total open interest that the Big 8 are short.  This is nuts!

And as an aside, the two largest silver shorts on Planet Earth—JPMorgan and Canada’s Scotiabank—are short about 103 days of world silver production between the two of them—and that 103 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 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 68 days of world silver production all by itself.  Because of that, the approximate short position in silver held by Scotiabank works out to around 35 days of world silver production, maximum.

In gold, the Big 4 are now short 72 days of world gold production — and the ‘5 through 8’ another 23 days of world production, for a total of 95 days. The Big 4 in gold hold 76 percent of the short position held by the Big 8.  How’s that for a concentrated short position within a concentrated short position???

And just as an aside those numbers in platinum are 71 and 66 percent respectively.

I’ve got a very decent number of stories for you again today, including a few that I’ve been saving for my Saturday column for length and/or content reasons.  I should mention that there is no Stephen F. Cohen interview this week, nor was there a Credit Bubble Bulletin from Doug Noland.


The Myth of ‘Morning in America’: How the Public Debt Went From $1 Trillion to $35 Trillion in Four Decades, Part 1 — David Stockman

………One of the great virtues of the Trump candidacy is The Donald’s propensity to lob wild pitches—knowingly or not—at the sacred cows of Imperial Washington, thereby exposing the tissue of hypocrisy and can’t, which surrounds them.

But within the herd of revered ruminants none is slathered in more hypocrisy than the federal budget and official Washington’s unctuous professions of devotion to safeguarding the “full faith and credit of the United States.”

The truth of the matter, of course, is that our rulers have been marching the nation’s fiscal accounts straight toward national bankruptcy for the last 35 years, at least. And since the arrival of Ben Bernanke at the Fed, Washington’s actual policy with respect to the nation’s “credit” has been to debauch it.

So Donald Trump’s recent rumination about negotiating a “discount” on the federal debt was priceless. It caused a Beltway chorus of fiscal house wreckers to loudly harrumph and admonish the GOP candidate about the sanctity of Uncle Sam’s credit promises.

This excerpt from David’s soon-to-be-published new book appeared on his Internet site yesterday sometime — and it’s the first of many offerings from Roy Stephens.  Another link to this article is here.

‘Flash Boys’ IEX stock exchange opens. Its goal: Rein in high-frequency traders

At mutual fund giant Capital Group, investment managers study stocks, looking to buy when they’re underpriced and sell when they’re overpriced. That’s how the downtown L.A. firm has made healthy returns for its millions of investors since the 1930s.

But over the last few years, Capital Group has been looking toward something else to help boost its returns: a new stock exchange founded by a group of Wall Street evangelists, lauded in a bestselling book and powered by a spool of 38 miles of fiber-optic cable tucked away in a New Jersey data center.

That new exchange, the Investors Exchange or IEX, the subject of Michael Lewis’ 2014 book “Flash Boys: A Wall Street Revolt,” was founded on the premise that ordinary investors — particularly the middle-class ones whose money is managed by big firms like Capital Group — need protection from high-speed trading firms that manipulate the market.

After a nearly yearlong struggle for approval from the Securities and Exchange Commission, IEX today becomes a public stock exchange, like the New York Stock Exchange and NASDAQ, marking a victory for both the upstart exchange’s founders and Capital Group.

This very interesting article ended up in my in-box last Sunday — and had to wait for today’s column.  I thank Scott Otey for passing it along — and another link to this story is here.

Central bankers more confident than ever — Tim Price

This hilarious take on the Jackson Hole ‘summit’ — and central banking in general was written by Tim Price, who is a Director of Investment at PFP Wealth Management and co-manager of the VT Price Value Portfolio.

I thank Jonathan Lavy for bringing it to my attention — and now to yours.  It’s worth reading if you want a good laugh.

The Dumbed-Down New York Times — Paul Craig Roberts

I was happy to read this column by Robert Parry. He managed to avoid blaming Ronald Reagan for the dumbed-down state of the NYT.

I appreciate Parry’s hard-hitting columns. He is one of America’s few remaining real journalists, the likes of which can no longer be found in the U.S. print and TV media. But somewhere along the way he got very sour on President Reagan and has a hard time explaining any of our current woes and evils without blaming Reagan. About much else, Parry is correct.

We need to ask ourselves why first class journalists like Parry are not editor-in-chief of The New York Times. Why, instead, is the NYT a propaganda organ for the government?

When you read Parry’s critique of the NY Times’ Russian/Ukrainian coverage, ask yourself why

the Times cannot report a story truthfully. The facts about Russia and Ukraine are not hidden, so what is the reason the NY Times cannot report them truthfully? Is the reason the stupidity and ignorance of the reporters and editors, or is it that the reporters and editors are required to lie in order to serve Washington’s goal of U.S. hegemony?

Gee, I wonder what PCR really thinks?  This commentary was posted on Paul’s Internet site on Wednesday — and was one of those stories that had to wait for my Saturday missive.  It’s certainly worth reading if you have the interest — and I thank Roy Stephens for this story as well.  Another link to it is here.

Dollar hegemony endures as share of global transactions keeps rising — Ambrose Evans-Pritchard

The U.S. dollar is tightening its grip on the global financial system at the expense of the euro, entrenching American hegemony and rendering the US Federal Reserve more powerful than at any time in history.

Newly-released data from the Bank for International Settlements (BIS) show that the dollar’s share of the $5.1 trillion in foreign exchange trades each day has continued rising to 87.6pc of all transactions.

It is the latest evidence confirming the extraordinary resilience of the dollar-based international order, confounding expectations of US financial decline a decade ago.

Roughly 60pc of the global economy is either in the dollar zone or closely tied to it through currency pegs or ‘dirty floats’, and the level of debt issued in dollars outside U.S. jurisdiction has soared to $9 trillion.

This has profound implications for monetary policy. The Fed has become the world’s central bank whether it likes it or not, setting borrowing costs for much of the global system.

Not once did I see the words ‘Special Drawing Rights’ or SDR anywhere in this AE-P commentary.  But despite that fact, they are coming, as there’s no way the Federal Reserve is in a position to bail out the world’s central banks the next time there’s a crisis.  It will be as Jim Rickards said, the IMF and the SDR from that point onwards.  This news item, which is worth reading regardless of its shortcomings, showed up on the telegraph.co.uk Internet site at 7:11 p.m. BST on their Thursday evening, which was 2:11 p.m. in New York, EDT plus 5 hours.  Another link to this article is here — and I thank Roy Stephens for pointing it out.

German, French diplomats preparing new visit to Kiev over Minsk-2

The foreign ministers of Germany and France, Frank-Walter Steinmeier and Jean-Marc Ayrault, prepare a new trip to Kiev to discuss implementation of the Minsk agreements, the top French diplomat said on Friday.

“We are ready with Frank-Walter Steinmeier to head to Kiev and are choosing the date to discuss the implementation of the Minsk agreements and to get out of the present inadmissible situation,” the French foreign minister said upon his arrival in Bratislava for an informal meeting of the E.U. foreign ministers.

“We see the ceasefire declared at the start of a new school year as a good sign for practical implementation of the Minsk deals,” he said.

Jean-Marc Ayrault pledged that Germany and France would do everything to see restart of the talks in the Normandy format.

This short news story, filed from Bratislava, was posted on the tass.com Internet site at 6:32 p.m. Moscow time on their Friday evening, which was 10:32 a.m. EDT in Washington — EDT plus 8 hours.  It’s another contribution from Roy Stephens — and another link to it is here.

U.S. anti-Russia sanctions upgrade “changes nothing” – Moscow

The expansion of U.S. sanctions, which have targeted entities responsible for constructing a bridge link between Crimea and the mainland, has been met routinely in Russia. As the Kremlin thinks of countermeasures, Russian companies insist their business will continue as usual.

On Thursday, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) added 37 individuals and entities to a sanctions list “related to Russia and Ukraine.” The list, initially introduced back in 2014, now includes an additional 11 Crimean officials, seven firms that participate in the construction of the 19 km (11.8 miles) road-and-rail bridge across the Kerch Strait, as well as vital defense industry firms operating in Crimea were also sanctioned.

A Kremlin spokesperson said that Moscow will analyze the new list, but will most likely respond with countermeasures.

“We have to analyze what was expanded, but usually, in such cases, a principle of reciprocity is used,” presidential pres secretary, Dmitry Peskov, told journalists.

The childish U.S. games continue.  This story put in an appearance on the Russia Today Internet site at 1:19 a.m. Moscow time on their Friday morning, which was 5:19 p.m. on Thursday afternoon in Washington — EDT plus 8 hours.  It comes courtesy of Roy Stephens once again — and another link to this news item is here.

Top USA National Security Officials Admit Turkey Coup — F. William Engdahl

While the Obama Administration and the CIA officially cling to the fig leaf lie that U.S. intelligence was innocent of any involvement in the failed July 15 coup d’etat attempt by the CIA-run Fethullah Gülen organization in Turkey, the truth is coming out from senior U.S. intelligence insiders themselves. It reflects a huge internal faction struggle within US leading circles in what by all accounts is shaping to be the most bizarre Presidential election year in American history.

The first admission that U.S. intelligence had their hand in the anti-Erdogan coup, a coup launched just days after Erdogan announced a major strategic shift away from NATO and towards Russia, came from Zbigniew Brzezinski. Brzezinski is one of the most senior members of the U.S. intelligence establishment, a former Obama Presidential adviser and former National Security Council architect of the Jimmy Carter 1979 Mujahideen Afghanistan terror operations against the Soviet forces in that country.

In a Twitter tweet from his own blog, Brzezinski wrote a precis of a new article he wrote for The American Interest magazine. He writes, “The U.S. backing of the attempted coup against the Turkish President Recep Tayyip Erdogan was a grave mistake that could deliver a major blow to the U.S. reputation.” That’s definitely putting it mildly given what’s unfolding in Turkey since July 15.

This commentary by Engdahl certainly is a must read, even if you’re not a serious student of the New Great Game.  It was posted on the journal-neo.org Internet site on Wednesday — and the contributions from Roy Stephens just keep on coming.  Another link to this article is here.

U.S. vs. U.S. in Syria

What a mess!  In the crazy Syrian war, U.S.-backed and armed groups are fighting other U.S.-backed rebel groups. How can this be?

It is so because the Obama White House had stirred up the war in Syria but then lost control of the process. When the U.S. has a strong president, he can usually keep the military and intelligence agencies on a tight leash.

But the Obama administration has had a weak secretary of defense and a bunch of lady strategists who are the worst military commanders since Louis XV, who put his mistress, Madame de Pompadour, in charge of French military forces during the Seven Year’s War. The French were routed by the Prussians. France’s foe, Frederick the Great of Prussia, named one of his dogs, ‘la Pompadour.’

Well, dear reader, you couldn’t make this stuff up if you tried.  This is another must read as well and, like the previous Roy Stephens offering above, it doesn’t matter if you’re a student [serious or otherwise] of the New Great Game.  This showed up on the lewrockwell.com Internet site on Friday sometime — and another link to it is here.

China Heads West: Beijing’s New Silk Road to Central Asia and Europe

In Kashgar, on the western edge of the Peoples’ Republic of China, the view is reminiscent of the Bible and the days when the ancient Silk Road began to take shape here in the 1st century B.C. Today, the government plans to use Kashgar as the starting point for a new, global trade route — but at this point, there is still little evidence of it.

“Posh, Posh,” the men shout on their horse-drawn carts, as they make their way to the meadow where drivers are selling camels. Potential buyers expertly reach into the animals’ mouths to examine their health. The air is dusty and filed with the sounds of animals neighing, braying and bleating, as if the horses, donkeys and goats know that they won’t stay tied up for long. Women, only a few of them wearing veils, walk through the chaos carrying sacks of apricots and raisins.

The Sunday market in Kashgar, one of the world’s largest, attracts several thousand livestock owners and traders to the oasis city on the edge of the Taklamakan Desert, near the high mountains of the Pamir and the Hindu Kush. It is a fascinating mix of ethnicities.  Uighurs, wiry men with knives in their belts, are in the majority. There are Nomadic Kyrgyz wearing felt hats, and occasional light-skinned, green-eyed boys who look like descendants of Alexander the Great. The market is policed by the region’s true rulers, the Han Chinese.

Here, people can still taste and feel the myth of the old Silk Road.

Xi Jinping, 63, the president of China and general secretary of the Communist Party, wants to revive the myth and build a New Silk Road, in large parts along the old trade route. It would mark the return of a legend. For some time now, many of his speeches have included references to “yi dai yi lu,” or “a belt, a road.” It is a gigantic project, and China envisions about 60 countries being involved, or about half of humanity.

This is your ‘big read’ of the day if you have the interest.  It appeared on the German website spiegel.de on Wednesday sometime — and it’s another contribution from Roy Stephens that had to wait for Saturday’s column.   For whatever reason, the ‘thought police’ at spiegel.de removed the words ‘Central Asia and‘ from the headline at some point after it was originally posted, although they appear in the URL of the story.  Another link to this long essay is here.

Collapse of Hanjin, world’s 7th-biggest shipping line, upsets global trade

Hanjin Shipping vessels have been seized at Chinese ports in the wake of the South Korean firm’s collapse, further roiling the industry as freight rates jump and manufacturers scramble for alternatives.

Seeking to contain the fallout, a South Korean court said it would soon begin proceedings to rehabilitate the carrier – which would allow Hanjin to take legal action in other countries to keep its ships and other assets from being seized.

Rival Hyundai Merchant Marine will also deploy at least 13 of its ships to two routes exclusively serviced by Hanjin, while the South Korean government also plans to reach out to overseas carriers for help.

The court’s move to rehabilitate the world’s seventh-largest container shipper is seen as mainly procedural, and an eventual liquidation of assets is likely, analysts and industry officials said.

This very interesting, but not surprising Reuters article has undergone several headline changes since it was posted on their Internet site early Thursday morning EDT — and was subsequently picked up by CNBC.  I’m sure there will be more shipping company casualties in the months and years ahead.  I thank Brad Robertson for sharing it with us — and another link to this news item is here.

“We do not trade territories“: Putin on Kuril Islands compromise with Japan

Although signing a peace treaty with Japan remains a key issue, the territorial dispute over the Kuril Islands emerged as a result of WWII and is not subject to revision, Russian President Vladimir Putin said, warning against opening “Pandora’s Box.”

“We do not trade territories,” Putin said in an interview with Bloomberg, when asked if he was ready to consider “giving up” one of the Kuril Islands in order to reach a political resolution and greater economic cooperation with Japan.

He added, however, that the “peace treaty with Japan of course is a key one, and we would very much like to find a solution to this problem with our Japanese friends.”

“We had a treaty signed in 1956 and surprisingly it was ratified both by the Supreme Soviet of the USSR and by the Japanese parliament. And then the Japanese side refused to implement it, and after that the Soviet Union also, so to say, nullified all agreements reached within the framework of the treaty.”

This is a follow-up story to the one I posted on this subject in my Friday column.  This news item was posted on the Russia Today website at 3:21 a.m. Moscow time on their Friday morning, which was 7:21 p.m. in Washington — EDT plus 8 hours.  It’s the final offering of the day from Roy Stephens — and I thank him on your behalf.  Another link to this news item is here.

With the IMF, ‘transparency’ about gold sales means ‘secrecy’ — Ronan Manly

Gold researcher Ronan Manly reports today that while the International Monetary Fund repeatedly has claimed to be “transparent” about its gold sales, the IMF actually has obscured and suppressed its records of the transactions and even admits that some records are being withheld indefinitely, against the agency’s ordinary practice, because of their “sensitivity.”

It is plain from Manly’s research today that the IMF has been working closely with the Bank for International Settlements, other central banks, and bullion banks to move gold around the world and apply it to the markets as necessary for price control. Even the IMF’s duplicity about “transparency” cannot conceal the price control scheme, since it still permeates some of its records that remain in the public archive.

Manly also acknowledges that the success of this scheme is largely a matter of the complicity of mainstream financial news organizations — their refusal ever to put to any central banker any critical question about official involvement in the gold market.

Manly’s analysis, which is very long, is headlined “IMF Gold Sales: Where ‘Transparency’ Means ‘Secrecy'” and it was posted on the Singapore-based website bullionstar.com on their Friday.  I found it embedded in a GATA release — and another link to this article is here.

Zero Hedge: Deutsche Bank tries to explain why it failed to deliver gold as promised — and fails

The unprecedented escalation involving Deutsche Bank’s failure to deliver physical gold on demand continues.

As we first reported two days ago, a client of Xetra-Gold, a German Exchange-Traded Commodity fund, tried to get access to the gold he had been promised under the Xetra-Gold prospectus, leading to much confusion about just where the failure to deliver had taken place, at Xetra or at the fund’s designated sponsor, and the client’s principal bank: Deutsche Bank.

Then, overnight, we presented the just as odd response provided by Deutsche Boerse where the ETC is traded, which sounded as if it was trying to pass the buck onto Deutsche Bank. This [in part] is what it said:

Deutsche Börse Commodities GmbH stresses that owners of Xetra Gold units can exercise their right to delivery of securitised gold at any time. The gold is delivered by the bank branch on which the investor has its securities account – on the condition that the branch offers this service, as the gold can only be delivered through the investor’s custodian bank.

As we said at the time, the response led to even more questions, and even more public outcry in Germany, which may explain why moments ago none other than the custodian bank, Deutsche Bank, joined the fray, by doing something it has never done before: provide a rationalization for why it failed to deliver gold on demand. Or at least try.

This gold-related news item showed up on the Zero Hedge website at 6:27 p.m. EDT on Friday evening — and it’s another story that I found on the gata.org Internet site.  Another link to it is here — and it’s certainly worth reading.  There was another story about this on the goldcore.com Internet site.  It’s headlined “Physical Gold Delivery Failure By German Banks” — and the link to that is here.

Festive-buying spurs Asian gold demand; Indian discounts narrow

Asian physical gold demand improved slightly this week as a correction in prices prompted consumers to buy for the upcoming festival and wedding season, with discounts in India narrowing to the smallest in three months.

The safe-haven bullion has shed about 1 percent this week after hawkish comments from Federal Reserve Chair Janet Yellen last week left the door open to a U.S. interest rate hike in September. Rate hikes increase the opportunity cost of holding non-yielding assets such as gold.

“There is a slight pick up in demand, but it is still very light. We are still seeing quite poor demand in key physical markets in South East Asia,” said Cameron Alexander, an analyst with Thomson Reuters-owned metals consultancy GFMS.

“There are expectations that the prices might come down further if the Fed triggers a rate rise in September … Until we see a significant leg-down in prices from current levels, we don’t see a big uptake in demand.” In India, however, demand firmed.

This Reuters news item, co-filed from Mumbai and Bengaluru, appeared on their website at 2:40 p.m. IST on their Friday afternoon — and it’s something I found on the Sharps Pixley website.  Another link to it is here.


I posted photos of a juvenile American coot/mud hen in Friday’s column — and here are shots of one of its parents.  The male and female of the species look identical, so there’s no way of telling which one you’re looking at.  Notice the rather strange lobed feet.  The Click to Enlarge feature works really well with these photos.


I’ve got a few pop ‘blasts from the past’ for you today — and all are by the same person, Canada’s own Ian Thomas, the younger brother of comedian and actor Dave Thomas.  He had a lot of big hits back in the early 1970s — and the one that really brought him to international fame, at least in North America, was this one linked here from back in 1973.

But he had other hits as well — and they were certainly huge, at least on this side of the border.  Here are the links to four others: Hit #2, Hit #3, Hit #4 — and Hit #5.  My favourite of them all is No. 2 — but they’re all great.

Today’s classical ‘blast from the past’ falls into the same category as my selection last week [Beethoven’s 5th Symphony] in the fact that I’ve heard it so many times in my life, I’m just sick of it. Tchaikovsky’s Piano Concerto #1 in B-flat minor, Op. 23 was composed in a 4-month time period between November 1874 and February 1875 — and was revised in the summer of 1879 — and again in December 1888.  It is one of the most popular of Tchaikovsky’s compositions and among the best known of all piano concertos — and for good reason.

This recording is from 1975 — with a very young Charles Dutoit conducting — and an equally young Martha Argerich doing the honours at the keyboard.  She plays it as well as it can be done — and very much reminds me of van Cliburn’s Moscow performance back in 1958.  The link is here.  Enjoy!

So, what to make of yesterday’s price action?  Ted thought it might have been the usual ‘scam within a scam’ that happens from time to time…let the Managed Money traders run the price up 15 or 20 bucks, the Commercials pick up the short side of those trades — and then slam the price lower, forcing the Managed Money traders to cover at a loss — and ‘da boyz’ pick up a cool $20 or $30 million bucks for thirty minutes work.

That’s certainly a possibility, but whatever happened involved a huge number of contracts — and in the process JPMorgan et al once again prevented precious metal prices from blowing sky high in what would have turned into a market-clearing event of biblical proportions, along with closing prices to match.

Whatever it was, it worked to perfection in a price pattern we’ve seen countless times before either on the job numbers, or Fed meetings, or whatever other event that occurs where an eye-watering rally would have occurred.

Since this is my Saturday column, here are the 6-month charts for the Big 6+1 commodities.  But as Ted Butler pointed out in his Thursday commentary “How Prices Get Set” — the ‘silver disease’ is now everywhere in the COMEX futures market.

<img class="size-full wp-image-13490 aligncenter" src="http://www.edsteergoldandsilver.com/wp-content/uploads/20

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