Good evening Ladies and Gentlemen:
Here are the following closes for gold and silver today:
Gold: $1210.60 down $8.00 (comex closing time)
Silver: $16.82 down 27 cents (comex closing time)
In the access market 5:15 pm
Gold $1214.50
Silver: $16.96
Gold/silver trading: see kitco charts on the right side of the commentary.
I wrote the following yesterday. The boys did not disappoint me:
“Expect the banker crooks to attack gold/silver tomorrow as they hate to see two advances in precious metals on consecutive day and we are very close to upper resistance (for gold at $1224 and silver at $17.40)”
Following is a brief outline on gold and silver comex figures for today:
At the gold comex today, we surprisingly had a poor delivery day, registering 2 notices served for 200 oz. Silver comex registered 0 notices for nil oz .
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 244.16 tonnes for a loss of 59 tonnes over that period. Lately the removals have been rising!
end
In silver, the open interest rose by a large 2011 contracts, as Monday’s silver price was up by 41 cents. The total silver OI continues to remain extremely high with today’s reading at 170,226 contracts. The front April month has an OI of 185 contracts for a gain of 6 contracts. We are still close to multi year high in the total OI complex despite a record low price. This dichotomy has been happening now for quite a while and defies logic. There is no doubt that the silver situation is scaring our bankers to no end.
We had 0 notices served upon for nil oz.
In gold the collapse of OI stops. The total comex gold OI rests tonight at 389,950 for a gain of 7,672 contracts as gold was up $17.10 on Monday. We had 2 notices served upon for 200 oz.
Today, we had a huge withdrawal in gold inventory at the GLD to the tune of 4.18 tonnes/ Gold Inventory rests at 733.06 tonnes
In silver, / the SLV/Inventory /we have no changes and thus the inventory tonight is 321.839 million oz
We have a few important stories to bring to your attention today…
1. Today we had the open interest in silver rise appreciably with the 41 cent rise in price on Monday. The OI for gold rose by a huge 7,672 contracts as the price of gold rose on Monday to the tune of $17.10.
(report Harvey/)
2. Credit card loans in the USA by consumers have fallen off the cliff as consumers are maxed out. However non revolving credit like student loans and car loans financed by Uncle Sam rose exponentially
(zero hedge)
3. Foreigners own Spanish debt equal to 50.5% of the total. This is an accident waiting to happen.
4. Reports that Russia has offered cash loans and lower gas prices to Greece in return for Greek assets.
(zero hedge/UKTelegraph)
5. Ted Butler’s letter to the CFTC
(Ted Butler)
6. Fed Governor Kocherlakota states that QE4 theoretically warranted.
(zero hedge)
7. Important commentary tonight from Bill Holter
(Bill Holter)
we have these and other stories for you tonight
Let us now head over to the comex and assess trading over there today.
Here are today’s comex results:
The total gold comex open interest rose by a whopping 7,672 contracts from 382,278 up to 389,950 as gold was up by $17.10 on Monday (at the comex close). We are now in the active delivery month of April and here the OI fell by 97 contracts down to 2,990. We had 3 contracts filed upon on Monday so we lost another 94 contracts or 9,400 oz will not stand for delivery in April. The next non active delivery month is May and here the OI fell by 46 contracts down to 644. The next big active delivery contract month is June and here the OI rose by 4,740 contracts up to 264,177. June is the second biggest delivery month on the comex gold calendar. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was poor at 52,181 (Where on earth are the high frequency boys?). The confirmed volume on Monday ( which includes the volume during regular business hours + access market sales the previous day) was poor at 115,456 contracts. Today we had 2 notices filed for 200 oz.
And now for the wild silver comex results. Silver OI rose by 2011 contracts from 168,215 up to 170,226 as silver was up by 41 cents, with respect to Monday’s trading . We are now in the non active delivery month of April and here the OI rose to 185 for a gain of 6 contracts. We had 0 notices filed on Monday so we gained 6 silver contracts or an additional 30,000 ounces will stand for delivery in April. The next big active delivery month is May and here the OI rose by 343 contracts up to 94,528. The estimated volume today was poor at 17,563 contracts (just comex sales during regular business hours. The confirmed volume yesterday (regular plus access market) came in at 41,283 contracts which is good in volume. We had 0 notices filed for nil oz today.
April initial standings
April 7.2015
Gold
Ounces
Withdrawals from Dealers Inventory in oz
nil
Withdrawals from Customer Inventory in oz
nil oz
Deposits to the Dealer Inventory in oz
nil
Deposits to the Customer Inventory, in oz
nil
No of oz served (contracts) today
2 contracts (200 oz)
No of oz to be served (notices)
2988 contracts(298,800) oz
Total monthly oz gold served (contracts) so far this month
676 contracts(67,600 oz)
Total accumulative withdrawals of gold from the Dealers inventory this month
oz
Total accumulative withdrawal of gold from the Customer inventory this month
163,579.2 oz
Today, we had 0 dealer transaction
total Dealer withdrawals: nil oz
we had 0 dealer deposits
total dealer deposit: nil oz
we had 0 customer withdrawals
total customer withdrawal: nil
we had 0 customer deposit:
total customer deposit: nil oz
We had 0 adjustments
Today, 0 notices was issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 2 contract of which 1 notices were stopped (received) by JPMorgan dealer and 0 notices were stopped (received) by JPMorgan customer account
To calculate the total number of gold ounces standing for the March contract month, we take the total number of notices filed so far for the month (676) x 100 oz or 67,600 oz , to which we add the difference between the open interest for the front month of April (2990) and the number of notices served upon today (2) x 100 oz equals the number of ounces standing.
Thus the initial standings for gold for the April contract month:
No of notices served so far (676) x 100 oz or ounces + {OI for the front month (2990) – the number of notices served upon today (2) x 100 oz which equals 366,400 oz or 11. tonnes of gold.
we lost 94 contracts or 9400 oz of gold that will not stand for delivery in April
Total dealer inventory: 647,270.900 or 20.13 tonnes
Total gold inventory (dealer and customer) = 7,849,806.094 oz. (244.16) tonnes)
Several weeks ago we had total gold inventory of 303 tonnes, so during this short time period 59.0 tonnes have been net transferred out. However I believe that the gold that enters the gold comex is not real. I cannot see continual additions of strictly kilobars.
end
And now for silver
April silver initial standings
April 7 2015:
Silver
Ounces
Withdrawals from Dealers Inventory
nil oz
Withdrawals from Customer Inventory
200,620.74 oz (Delaware,Brinks)
Deposits to the Dealer Inventory
nil
Deposits to the Customer Inventory
600,499.95 oz (Scotia)
No of oz served (contracts)
0 contracts (nil oz)
No of oz to be served (notices)
185 contracts(925,000 oz)
Total monthly oz silver served (contracts)
1 contracts (5,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month
Total accumulative withdrawal of silver from the Customer inventory this month
586,230.1 oz
Today, we had 0 deposits into the dealer account:
total dealer deposit: nil oz
we had 0 dealer withdrawal:
total dealer withdrawal: nil oz
We had 1 customer deposits:
i) Into Scotia: 600,499.95 oz
total customer deposits: 600,499.95 oz
We had 2 customer withdrawals:
i) Out of Delaware: 1046.40 oz
ii) Out of Brinks: 199,574.34 oz
total withdrawals; 200,620.74 oz
we had 0 adjustments:
Total dealer inventory: 63.192 million oz
Total of all silver inventory (dealer and customer) 176.687 million oz
.
The total number of notices filed today is represented by 0 contract for nil oz. To calculate the number of silver ounces that will stand for delivery in April, we take the total number of notices filed for the month so far at (1) x 5,000 oz = 5,000 oz to which we add the difference between the open interest for the front month of April (185) and the number of notices served upon today (0) x 5000 oz equals the number of ounces standing.
Thus the initial standings for silver for the April contract month:
1 (notices served so far) + { OI for front month of April(185) -number of notices served upon today (0} x 5000 oz = 930,000 oz standing for the April contract month.
we gained another 6 contracts or an additional 30,000 oz will stand for delivery in this April delivery month.
for those wishing to see the rest of data today see:
http://www.harveyorgan.wordpress.com orhttp://www.harveyorganblog.com
end
The two ETF’s that I follow are the GLD and SLV. You must be very careful in trading these vehicles as these funds do not have any beneficial gold or silver behind them. They probably have only paper claims and when the dust settles, on a collapse, there will be countless class action lawsuits trying to recover your lost investment.
There is now evidence that the GLD and SLV are paper settling on the comex.
***I do not think that the GLD will head to zero as we still have some GLD shareholders who think that gold is the right vehicle to be in even though they do not understand the difference between paper gold and physical gold. I can visualize demand coming to the buyers side:
i) demand from paper gold shareholders
ii) demand from the bankers who then redeem for gold to send this gold onto China
vs no sellers of GLD paper.
And now the Gold inventory at the GLD:
April 7. we had another withdrawal of 4.18 tonnes of gold at the GLD/Inventory rests at 733.06 tonnes
April 6. no changes in gold inventory at the GLD/Inventory at 737.24 tonnes
April 2/no changes in gold inventory at the GLD/Inventory at 737.24 tonnes
April 1/2015/ no changes in gold inventory at the GLD/Inventory at 737.24 tonnes
march 31.2015/ no changes in gold inventory at the GLD/Inventory at 737.24 tonnes
March 30/no changes in gold inventory at the GLD/Inventory at 737.24 tonnes.
March 27/no changes in gold inventory at the GLD/Inventory at 737.24 tonnes
March 26 we had another huge withdrawal of 5.97 tonnes of gold. This gold is heading straight to the vaults of Shanghai, China/GLD inventory 737.24 tonnes
March 25.2015 we had a withdrawal of 1.19 tonnes of gold from the GLD/Inventory at 743.21 tonnes
March 24/ no changes in gold inventory at the GLD/Inventory 744.40 tonnes
March 23/we had a huge withdrawal of 5.37 tonnes of gold from the GLD vaults/Inventory 744.40 tonnes
march 20/we had no changes in inventory at the GLD/Inventory at 749.77 tonnes
March 19/we had no changes in inventory at the GLD/Inventory 749.77 tonnes
April 7/2015 / we had a huge withdrawal of 4.18 tonnes of gold at the GLD/Inventory at 733.06 tonnes
The registered vaults at the GLD will eventually become a crime scene as real physical gold departs for eastern shores leaving behind paper obligations to the remaining shareholders. There is no doubt in my mind that GLD has nowhere near the gold that say they have and this will eventually lead to the default at the LBMA and then onto the comex in a heartbeat (same banks).
GLD : 733.06 tonnes.
end
And now for silver (SLV):
April 7.2015: no changes in inventory at the SLV/Inventory rests tonight at 321.839 million oz
April 6. we had a small withdrawal of 136,000 oz/inventory tonight rests at 321.839 million oz
April 2/2015: no changes in inventory/SLV inventory rests this weekend at 321.975 million oz
April 1.2015: we had a huge withdrawal of 1.913 million oz of silver from the SLV vaults/Inventory 321.975 million oz
March 31.2015: no changes in inventory at the SLV/Inventory at 323.88 million oz
March 30.2015: no changes in inventory at the SLV/inventory at 323.888 million oz.
March 27. we had a huge withdrawal of 1.439 million oz leave the SLV/Inventory rests this weekend at 323.888 million oz
March 26.2015; no change in silver inventory/SLV inventory 325.323 million oz
March 25.2015:no change in silver inventory/SLV inventory 325.323 million oz
March 24.2015/ we had another withdrawal of 835,000 oz of silver from the SLV/Inventory rests tonight at 325.323 million oz
March 23./we had a huge withdrawal of 1.174 million oz of silver from the SLV vaults/Inventory 326.158 million oz
March 20/ no changes in silver inventory/327.332 million oz
April 7/2015 we had no changes in inventory at the SLV/ inventory rests at 321.839 million oz
end
And now for our premiums to NAV for the funds I follow:
Note: Sprott silver fund now for the first time into the negative to NAV
Sprott and Central Fund of Canada.
(both of these funds have 100% physical metal behind them and unencumbered and I can vouch for that)
1. Central Fund of Canada: traded at Negative 8.0% percent to NAV in usa funds and Negative 7.8% to NAV for Cdn funds!!!!!!!
Percentage of fund in gold 61.0%
Percentage of fund in silver:38.6%
cash .4%
( April 7/2015)
Sprott gold fund finally rising in NAV
2. Sprott silver fund (PSLV): Premium to NAV rises to + 1.13%!!!!! NAV (April 7/2015)
3. Sprott gold fund (PHYS): premium to NAV rises -.30% to NAV(April 7/2015
Note: Sprott silver trust back into positive territory at +1.13%.
Sprott physical gold trust is back into negative territory at -.30%
Central fund of Canada’s is still in jail.
end
And now for your more important physical gold/silver stories:
Gold and silver trading early this morning
(courtesy Goldcore/Mark O’Byrne)
‘Chaos’ If UK Leaves EU – Blair Warns of BREXIT
By Mark O’ByrneApril 7, 20150 Comments
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– Ex-Prime Minister warns uncertainty would hit UK economy and cause ‘chaos’
– ‘BREXIT’ would cause the “most intense period of instability” since WW2
– Seeks to portray Tory policy as disingenuous and cynically putting economy at risk
– Uncertainty caused would have negative consequences for British economy and sterling
Tony Blair has entered into the British election campaign debate in support of David Miliband on the issue of what he regards as the Tories reckless attitude to Europe and the potential ‘BREXIT’.
Blair will address his former constituents in County Durham today strongly urging them to support Miliband, who he praised for his “real leadership on the EU” while portraying David Cameron’s EU policy as disingenuous and reckless.
“There is, in my view, a complete under-estimation of the short-term pain of negotiating exit. There would be a raft of different treaties, association agreements and partnerships to be disentangled and re-negotiated. There would be significant business uncertainty in the run-up to a vote but, should the vote go the way of exit, then there would be the most intense period of business anxiety, reconsideration of options and instability since the war”,
Blair will say in the well flagged speech which has been trumpeted in the pro-Labour UK Guardian and of Miliband he will say, “he is own man with his own convictions and determined to follow them, even when they go against the tide”. On the other hand he accuses Cameron of not even believing in a necessity for Britain to exit the EU.
“The oddest thing of all about David Cameron’s position [is the] Prime Minister doesn’t really believe we should leave Europe; not even the Europe as it is today,” he will add, according to London’s Independent.
“This was a concession to party, a manoeuvre to access some of the UKIP vote, a sop to the rampant anti-Europe feeling of parts of the media.”
He makes fair comment on the uncertainty that would stem from a Tory victory and the prospect of a referendum campaign and potential British exit.
“Think of the chaos produced by the possibility, never mind the reality, of Britain quitting Europe,” he will say. “Jobs that are secure suddenly insecure; investment decisions postponed or cancelled; a pall of unpredictability hanging over the British economy.”
He disagrees with Cameron’s contention that he will receive various concessions from Europe prior to the proposed 2017 referendum.
“The rest of Europe will be vigorous in ensuring Britain gets no special treatment. This will be a horrible process. Don’t be in any doubt about that …” he will say, according to the left leaning Guardian.
He will add, “If I was leading a business dependent on access to the single market or, more important, employed in such a business, then the issue of Europe and the risks of this would be a big decider in my vote.”
BREXIT poses risks to free trade and indeed the free movement of people, goods and services. An example of this is the return to borders.
Indeed, a physical border between the Republic of Ireland and Northern Ireland will be re-imposed if the UK decides to leave the EU, a director of the British Irish Chamber of Commerce warned last week.
Such uncertainty would not be good for the vulnerable UK economy at this time due to it’s massive and unsustainable levels of total debt. While all the focus is on the government or national debt which is currently 81.58% of GDP, total debt levels including private debt – are much, much higher and have fallen little since the debt crisis in 2008.
Together, families and non-financial firms’ debt is still over 200 per cent of GDP and is merely back to levels last seen in mid-2007, a time when leverage was already utterly out of control. Current debt levels remain much higher than they were a decade ago (170 per cent of GDP) and even just 15 years ago at the turn of the millennium when they were 128 per cent of GDP.
These massive debt levels are serviceable providing the UK economy continues to grow and interest rates remain near all time record lows at 0%. However, even a slight uptick in interest rates could pressurise the debt laden UK economy. Interest rates are set to rise – the question is when not if.
Unless the next government becomes serious about tackling private and public debt, the next crisis, when it eventually comes, will be devastating and on a scale far worse than the first financial crisis.
Regardless of the long-term rights or wrongs of Cameron’s proposed EU referendum, in the short term it may indeed cause problems for UK businesses – particularly exporters and the financial sector – and debt-mired workers. Potential mortgage defaults would have a knock on effect on the banking system and the property bubble in Southern England.
A recession at this time would likely lead to another round of QE – the only policy open to central banks – and a consequent depreciation of the pound. Gold tends to come into its own as financial insurance in an environment of uncertainty and an allocation to physical gold is advisable to offset and hedge the potential risks posed to the UK economy by a ‘BREXIT.’
Click here in order to read GoldCore Insight –
Currency Wars: Bye Bye Petrodollar – Buy, Buy Gold
MARKET UPDATE
Today’s AM LBMA Gold Price was USD 1,201.50, EUR 1,110.91 and GBP 811.11 per ounce.
Yesterday’s AM LBMA Gold Price was USD 1,208.50 , EUR 1,113.82 and GBP 813.63 per ounce.
Gold climbed 1.2 percent or $14.40 and closed at $1,215.70 an ounce yesterday, while silver gained 1.55 percent or $0.26 closing at $17.00 an ounce.
Gold in Singapore was mostly unchanged at $1,213.11 an ounce near the end of day trading. Yesterday, the yellow metal reached a high of $1,224.10 per ounce its highest since February 17th.
The gold price in Europe in late morning trading was $1,208.33 off 0.52 percent. Silver was $16.78 or down 1.06 percent and platinum was $1,165.88 or down 0.31 percent.
The U.S. non farm payrolls figure on Friday rose by only 126,000 jobs in March well below the forecast of 247,000. This downward surprise sent the U.S. dollar falling and saw safe haven flows into gold and silver.
Negative economic data out of the U.S. raises the likelihood the U.S. Federal Reserve may not be able to raise rates this year. As we have warned for some time, the U.S. economic recovery is weak at best. Rising interest rates will lead to a new recession and hence the Fed’s growing Catch 22.
New York Fed President William Dudley said over the weekend that the timing of the U.S. rate hike, which would be the first in nearly a decade, is unclear and policymakers must watch that the U.S. economy’s surprising recent weakness does not signal a more substantial slowdown. It does and it will.
Shanghai Gold Exchange (SGE) premiums are just under one dollar per ounce over the global benchmarks. This suggests demand in China has fallen from the very high levels seen in the first weeks of 2015 and over Chinese New Year.
However, the SGE gold withdrawals show very high levels of demand. In week 12 (for the period from March 23 to March 27) they were a robust 46 tonnes. Total withdrawals so far in 2015 are at 607 tonnes, up more than 8 per cent from 2014 and up 32 per cent from 2013.
The world’s largest gold ETF, SPDR Gold Shares, saw its first outflows of the month on Monday, of 1.8 tonnes. Its holdings are currently 735.447 tonnes, up around 25 tonnes from the start of the year.
end
James Turk offers his view as to what will happen with respect to the upcoming Greek default:
(courtesy James Turk/Kingworldnews)
ECB scheming to change Greek government coalition, Turk tells KWN
Submitted by cpowell on Tue, 2015-04-07 10:55. Section: Daily Dispatches
6:54a ET Tuesday, April 7, 2015
Dear Friend of GATA and Gold:
The European Central Bank isn’t just planning to confiscate deposits in Greek banks to secure repayment of unpayable loans to that country, GoldMoney founder and GATA consultant James Turk tells King World News. He adds that the bank is also scheming to change Greece’s governing coalition to make it more pliable by the ECB. An excerpt from Turk’s interview is posted at the KWN blog here:
http://kingworldnews.com/man-who-first-predicted-greek-bank-deposits-wou…
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
end
(courtesy Chris Powell/GATA/New York Sun)
Gold market manipulation cited in discussion of Sun editor’s ‘The Floating Kilogram’
Submitted by cpowell on Mon, 2015-04-06 17:36. Section: Daily Dispatches
1:35p ET Monday, April 6, 2015
Dear Friend of GATA and Gold:
Manipulation of the gold market by the Federal Reserve is a major subject of an interview with New York Sun editor Seth Lipsky about his new book, “The Floating Kilogram,” a collection of essays about the U.S. monetary system. The interview is conducted by radio journalist Dawn Bennett and it’s posted at the Sun’s Internet site here:
http://www.nysun.com/national/the-floating-kilogram-the-editor-of-the-su…
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
end
(courtesy Chris Powell/GATA)
LBMA admits gold market can’t be transparent with central banks in it
Submitted by cpowell on Mon, 2015-04-06 17:31. Section: Daily Dispatches
12:32p ET Monday, April 6, 2015
Dear Friend of GATA and Gold:
Central bank involvement may prevent the London gold market from ever becoming really transparent, the chief executive of the London Bullion Market Association has told a Bank of England study group.
The LBMA chief executive, Ruth Crowell, made the assertion in a long statement dated January 30 and sent to the bank’s “Fair and Effective Market Review” committee, which is studying regulation of the currency and commodity markets. The LBMA statement was found on the bank’s Internet site by gold researcher and GATA consultant Ronan Manly.
While Crowell wrote that the LBMA welcomes more transparency in the London gold market, particularly through “post-trade reporting,” she also praised gold lending by central banks for providing “liqudity” to the market, asserting that “it is vital that the role of the liquidity provider is not diminished but in fact strengthened to make sure the markets remain fair and effective.”
The Bank of England’s review of the gold market, the LBMA statement said, “should prioritize liquidity, as greater liquidity results in markets which are less easily manipulated, and consequently regulators should afford market participants the tools with which to foster liquidity.”
But if the foremost providers of “liquidity” are central banks, their provision of “liquidity” is likely the leading mechanism of market manipulation, as central banks have not just access to effectively infinite financial resources but also the powerful motive to manipulate the markets in which their currencies and bonds trade.
Thus the LBMA has made the same bogus and self-serving claim that was made by futures exchange operator CME Group in January in support of the volume trading discounts CME Group gives to central banks for secretly trading the U.S. futures markets it operates — the claim that secret trading by central banks deters market manipulation rather than constitutes it:
http://www.gata.org/node/14385
http://www.gata.org/node/14818
The LBMA statement acknowledges that “the role of the central banks in the bullion market may preclude ‘total’ transparency, at least at public level.” It adds that “transparency could be increased via post-trade anonymized [emphasis added] statistical analysis of nominal volumes, provided by the clearing banks.”
That is, it’s OK with the LBMA if its members know what their client central banks are doing in the gold market, but not OK if mere ordinary traders and citizensknow.
Thus the LBMA’s position is identical to the position of central banks as described in the secret March 1999 report of the International Monetary Fund, which recounted central bank objections to the IMF staff’s proposal for greater transparency in the reporting of IMF-member central bank gold reserves.
The IMF staff wanted central banks to distinguish in public reports their gold loans and swaps from the gold reserves held in central bank vaults. The central banks surveyed by the IMF staff responded with horror, complaining that clarity about their gold loans and swaps would impair their surreptitious interventions in the gold and currency markets:
http://www.gata.org/node/12016
With Crowell’s statement the LBMA has proclaimed itself the enthusiastic agent of surreptitious intervention in the gold market by client central banks. This is something else that mainstream financial news organizations will have to strive to overlook.
The LBMA’s statement is posted, at least for the time being, at the Bank of England’s Internet site here —
http://www.bankofengland.co.uk/markets/Documents/femr/lbma.pdf
— and for safety’s safe at GATA’s Internet site here:
http://gata.org/files/LBMALetterToBankOfEngland-01-30-2015.pdf
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
end
(courtesy Ted Butler)
An Unavoidable Comparison
Theodore Butler
|
April 7, 2015 – 9:05am
A rare event occurred this past week; the CFTC charged a major food company, Kraft, Inc., with price manipulation in the wheat market. You can count on one or two hands the number of times the federal commodities regulator has charged anyone with price manipulation in its 40 year history.http://www.cftc.gov/PressRoom/PressReleases/pr7150-15
For what it’s worth, the agency’s case looks convincingly laid out and seems to contain all the elements of proving price manipulation, including intent and the ability to control prices. That said, the Commission has a very poor record of prevailing in the manipulation cases it has brought.
One thing telling about the case was that a large commercial trading entity who was supposedly using the futures market for strictly hedging purposes was accused of engaging in a variety of market schemes for strictly speculative gains. So much for the widespread argument that commercial traders are always “only hedging” and how I should cut them a break. As you know, I have long held that the commercials, at least on the COMEX, are just speculators gaming other speculators and little legitimate hedging occurs. Certainly, that’s what the CFTC alleged in its complaint against Kraft.http://www.cftc.gov/ucm/groups/public/@lrenforcementactions/documents/legalpleading/enfkraftcomplaint040115.pdf
Quoting from the CFTC’s press release –
Aitan Goelman, the CFTC’s Director of Enforcement, stated: “This case goes to the core of the CFTC’s mission: protecting market participants and the public from manipulation and abusive practices that undermine the integrity of the derivatives markets. A market participant who is not happy with cash prices available to it may not resort to manipulative trading strategies in an attempt to artificially lower that price.”
Yes, Director Goelman is correct; the core of the agency’s mission is to protect public market participants from manipulation and abusive trade practices that undermine the integrity of derivatives markets. And no, a market participant not happy with cash prices may not artificially lower those prices to secure physical supplies. Wait a minute – isn’t that exactly what I’ve alleged JPMorgan has done and is doing in silver, namely, shorting on the COMEX in order to scoop up physical silver at bargain basement prices? Haven’t I been writing this two times a week for a very long time? (In the interest of full disclosure, I have sent Director Goelman every article I’ve written since he has been the agency’s enforcement director).
In fact, I’ve based my allegations about what JPMorgan has done in silver primarily on the agency’s own public data and that from the exchange (COMEX) and other public sources. The CFTC’s case against Kraft is derived from private trading records and internal emails. Further, there is a bit of complexity in the agency’s case against Kraft, in that the company’s trading strategy involved buying futures contracts in order to impact the basis (the price differential between futures and cash grain prices) and lower the cash price. With JPMorgan, there is no complexity as this crooked bank has used futures market short sales to depress the price of silver in order to buy physical silver at artificially cheap prices.
Importantly, the Commission’s case against Kraft most likely came as a result of a complaint from a disgruntled insider who was damaged by Kraft’s futures market activity and not as a result of widespread complaints or damage to the public. To my knowledge, this was not a case publicly discussed prior to the charges being filed. Compare that to silver, where many thousands of market participants and observers have petitioned the agency for years about the manipulation by JPMorgan and where investors and silver producers have been and are being damaged by artificially depressed silver prices.
The unmistakable conclusion is that this agency is bought and paid for or otherwise not acting in the public’s best interest. For a federal agency, I don’t think there is a more serious allegation.
So the real question is why the selective prosecution of the law? Why is the CFTC going after Kraft on a complicated case with an alleged payoff that looks like chump change (around $5 million total profit to Kraft), when public data indicate JPMorgan shorts the silver market whenever prices rise to cap and drive prices lower in order to profit on those short sales and accumulate silver at unfairly low prices; with JPM’s cumulative illicit take running into the hundreds of millions if not billions of dollars?
I can see the agency going after Kraft, but I can’t see any legitimate reason for it not to go after JPMorgan for the far more egregious silver activities the bank is involved in. Worse, why won’t the agency explain why the public data doesn’t point to JPMorgan doing what I allege the bank is doing? Can the Commission refute that JPMorgan has been the big concentrated short seller in COMEX silver futures since acquiring Bear Stearns in early 2008 and has been accumulating physical silver while remaining short COMEX futures for the past four years? That’s the key, no one – not the CFTC, not JPMorgan, not the CME – can offer a reasonable explanation for JPM’s control and manipulation of the silver market and what has transpired these past seven years.
Beyond the shadow of any doubt, the CFTC knows what price manipulation is; otherwise it never would or could have charged Kraft. So how can the agency see it with Kraft in wheat and not with JPMorgan in silver? Why is JPMorgan above the law? I think it’s because the bank was given a “get out of jail card” for agreeing to take over Bear Stearns and its massive short positions in silver and gold in 2008 at the US Government’s request. Since then, JPMorgan has exploited the arrangement in suppressing the price of silver and accumulating physical silver under fair market value.
The problem with selective enforcement of the law is that it undermines and makes a mockery of the whole system. It is a betrayal of the highest order. Yes, I’m fairly sure that the free pass to JPMorgan to allow it to continue the silver manipulation was given by Treasury and Federal Reserve officials to preserve market order and was considered to be to the public’s benefit. But look at what it has morphed into seven years later – a market more distorted than ever before and in which JPMorgan has amassed the largest hoard of silver in history.
I would remind you that the Enforcement Division (before Goleman arrived) even took five years to supposedly formally investigate JPMorgan’s concentrated short position in silver and ended that investigation without ever addressing the issues. Shame on all involved at the time, most particularly the two who knew better, former chairman Gensler and Commissioner Chilton. Now the shame has been passed to those currently in charge. It is my understanding that all senior officials at the agency swear an oath of office to uphold the law. Clearly, the law is not being upheld in silver or with JPMorgan. I don’t know how the senior officials of the agency can live with themselves considering their extreme dereliction of duty to the law and their betrayal to the citizens of this country.
I know these are very strong accusations and I do not make them lightly. And to be fair, I would be happy to amend them if any reasonable explanation were forthcoming, although that is unlikely. There are many problems for the world and for the US and the ongoing silver manipulation may not rank high in most minds. However, anytime basic law is perverted it diminishes us all. And such a perversion is self-evident in silver.
I know that if someone accused me of doing something seriously wrong and the accusations were unfounded, I would respond forthwith, as I’m sure would anyone. I’m accusing the CFTC and, specifically, Enforcement Director Goelman and his staff of dereliction of duty and the selective application of the law that all swore to uphold. To my mind, the refusal to apply commodity law evenly and protect the public is almost treasonous in nature. Of course, should a cogent alternative explanation be issued by the Commission or the Enforcement Director explaining the role of JPMorgan in the silver market in legitimate terms, I will retract my statement and offer a public apology.
This is a serious matter – open and unqualified allegations of market manipulation by the nation’s most important banking institution and the failure of the regulators to deal with that manipulation or explain why the allegations are unfounded. Since the silver manipulation has become so clear (with the recent COT reports and JPM’s continued physical accumulation), I can’t help but feel we are close to the critical point where the enough outsiders recognize the scam JPMorgan has been running and the regulators’ illegal cover up of that scam. I know without a doubt that silver is artificially depressed in price by JPMorgan and other collusive commercial traders on the COMEX and as this story is discovered a wave of physical buying must occur.
Silver (and gold) investors and producers are being damaged by the continued price fixing on the COMEX. Because the evidence of manipulation is increasingly obvious it is appropriate to demand that the regulators treat silver and gold in the same manner as they regulate other markets. Or explain why they shouldn’t.
If you agree that there is something fundamentally wrong with the Enforcement Division’s double standard in the Kraft wheat case versus the JPMorgan silver case, please take the time to contact Director Goelman. Ask him to charge JPMorgan with manipulation or at least for him to explain how it could be OK for the bank to accept physical delivery on the maximum number of COMEX silver contracts while holding a massive net short position in silver futures. Not how it could be done – how it could be OK.
agoelman@cftc.gov
Ted Butler
April 7, 2015
end
Dave Kranzler comments on the above commentary written by Chris Powell
(courtesy Dave Kranzler IRD)
LBMA CEO Admits The Gold Market Is Rigged By Central Banks
April 7, 2015Financial Markets, Gold, Market Manipulation, Precious Metalsanti-gold terrorism, Comex, GATA, LBMA
GATA has produced a stunning disclosure by the LBMA CEO, Ruth Crowell:
Central bank involvement may prevent the London gold market from ever becoming really transparent, the chief executive of the London Bullion Market Association has told a Bank of England study group. – GATA.org link
The disclosure was posted on the LBMA’s website. In fact, here is the direct statement from Ms. Crowell, taken in context and directly from the text:
However, it is worth noting, that the role of the central banks in the bullion market may preclude ‘total’transparency – Fair And Effective Market Review
When I first read the GATA report, I was not surprised. But I am quite stunned by the LBMA CEO’s admissions after reading through the actual LBMA disclosure, posted on the Bank of England’s website (link above).
Ms. Crowell directly acknowledges that Central Banks use “tools” such as gold leasing, gold loans and gold swaps in order to “manage” gold market liquidity. This is nothing but Orwell-speak for “manipulate the gold market as an essential ingredient to manipulate all currencies and markets.”
In fact, it is highly probable that the Federal Reserve hired Enron’s former chief lobbyist, Linda Robinson, and has spent a small fortune in order to fight the move by Congress to audit the Fed specifically to avoid revealing the extent to which the Fed has used U.S. Treasury gold bars (i.e. Taxpayer gold) in order execute the manipulation of the gold market in conjunction with the Bank of England and the ECB.
In this regard, GATA got ahold of a confidential IMF report which specifically advised Central Banks to hide gold loans and swaps which are used for market manipulation: GATA link.
The truth is that the gold market may be the most manipulated market in history. Governments and Central Banks based on fiat paper currencies which can be freely printed have no choice but to manipulate the world’s oldest true currency. At some point the particular law of economics/nature known as “prisoner’s dilemma” will grip those who are manipulating the gold market. One of the guilty parties will “blink” and the scheme will fall apart.
I would actually suggest, based on China’s enormous accumulation of physical gold – documented and undocumented – over the last 20 years, that China has blinked and we are drawing near an end to the criminal-based western financial system.
(courtesy Bill Holter)
Triggers.
The big story regarding the Asian Infrastructure Investment Bank was the application by the Israelis. This came just prior to the deadline and of course at the displeasure once again to Washington. Britain was the early defector followed by Germany, France and Italy. Eyebrows were raised when Saudi Arabia made their announcement but I believe what was truly missed was the application by Taiwan.
If you are old enough to remember, Taiwan was “recognized China” in the eyes of the U.S.. Mainland China was “Red” China and not officially recognized by the U.S., the application by Taiwan slipped by with little to no comment. I believe Taiwan’s application holds great significance because it means the “elder families” are on board and have given their approval. This is truly big news yet not even spoken of in the West? As I understand it, the application must now be approved, a potential sticking point is the name “Taiwan”, this will be very interesting to watch!
Why is the AIIB such a big deal? There are several reasons but I believe the biggest is because it is a very public piece to the bigger picture. Not only has the bank attracted the Asian countries one would expect, it has attracted many Western countries and even those closest to the U.S.. Going one step further, ALL of these applications came against U.S. lobbying and were followed by public rebukes from Washington. This was the first instance where the world collectively (including long time U.S. allies) has expressly denied Washington’s wishes.
The AIIB is only one piece to the puzzle. Another is the clearing system set to directly compete with SWIFT. Yet another is the BRICS bank, and let’s not forget the Shanghai physical metals exchange set to go live shortly. Can you see the picture these pieces are putting together? China, Russia and the rest of the world could see what is coming but they have not been ready for it…yet. Each one of these pieces amounts to preparation for what is to come. When I say “preparation”, much of it has been put into place to buffer the East (and rest of the world) from the financial collapse of the West.
The clearing system for instance will allow and aid trade to continue between nations should the Western financial system close because of insolvencies or bankruptcies. Call it contingency planning and they know what the contingencies are. Another way to look at these plans is to see the U.S. becoming isolated. The U.S. has been trying to isolate Russia and cut them off from liquidity and trade, China (and Russia) have been isolating the U.S. little by little with each new deal signed but have not pulled any triggers along the way.
Until now and until these preparations were made, the East could not afford for the West to fall because they would have been taken down with it. Now, the East has alternatives. There are clearing alternatives, financial ones, new trade deals and routes, and of course even currency alternatives being made ready. The U.S. has relied on the dollar being THE only alternative for the world to clear trade, this monopoly is ending. What I am trying to explain is this, there are now very few preparations left unattended.
When the U.S. originally began pushing economic and financial sanctions on Russia, I immediately was confused. I was confused because in my mind, Russia had the ability to destroy the U.S.. They had all sorts of options, they could sell their Treasury securities and dollars and simply blow up either the gold or silver markets. They could have defaulted on their debts or gone hot in Syria, there were many possibilities but none ever pursued. Don’t get me wrong, Russia would have suffered greatly, but, the U.S. has been wobbly
enough for a direct effort to have tipped the scales. Again, because they were not ready, no trigger was ever pulled and I believe we have been “carried” like an aging prize fighter, “they” being the Russians and the Chinese.
One last preparation has been longer term, the accumulation of gold. You must ask yourself “why” Russia and China have been accumulating so much gold? The answer is twofold, they understand gold to be money but more importantly they know “where” their purchases were coming from. This preparation involved not only amassing “money” but also bleeding the West of their money (gold).
It is truly scary to see all of the pieces that have been put into place because they are all locked and loaded. Nearly all of the future plans and programs are now in place. The only one we are awaiting is for the Shanghai precious metals exchange to go live which should be very soon. This exchange can either be a trigger or a barometer. Should China decide to revalue and reset the system, they can easily do this by marking gold up using their physical exchange. You can deny this if you will but it is the reality. COMEX and LBMA do not have the inventories to compete with or supply Eastern demand, China will eventually set price whethe