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Ted Butler: The Count

 -- Published: Sunday, 8 November 2015 | Print  | Disqus 

By Ed Steer

07 November 2015 — Saturday


The gold price rallied about six bucks by around 2:30 p.m. Hong Kong time on their Friday afternoon—and then gave about half of that back going into the job numbers.  As expected, JPMorgan et al showed up—and the only thing we can be thankful for is that the pounding wasn’t worse than it was, as I was expecting at least double that amount, if not more.  The low tick came just before the equities markets opened in New York—and it rallied a few dollars into the London p.m. gold fix, then didn’t do much after that.

The high and low ticks were recorded by the CME Group as $1,109.70 and $1,084.50 in the December contract.

Gold closed in New York yesterday at $1,089.40 spot, down $14.20 from Thursday’s close.  Net volume was decent, but not heavy, at just under 150,000 contracts.


And here is the 5-minute tick chart courtesy of Brad Robertson once again—and you don’t need any play-by-play on this from me or anyone else, as the price/volume data speaks for itself.  Midnight in New York is the vertical gray line, add two hours for EDT—and don’t forget the ‘click to enlarge‘ feature.

151107 5-minute gold

It was almost the same story in silver, except that once “da boyz” had punched its lights out at 8:30 a.m. EDT, the silver price continued to creep lower—and then there was a sharp down/up spike a minute or so after 12 o’clock noon.  That was the low of the day.  After that it traded flat until it rallied a small handful of pennies starting around 4 p.m. in electronic trading.  Like in gold, Ted and I were both surprised that the powers-that-be didn’t hit the silver price harder when the opportunity to do so was presented to them.

The high and low tick in this precious metal was recorded as $15.045 and $14.685 in the December contract.

Silver finished the Friday session in New York at $14.74 spot—down only 20 cents from Thursday’s close.  Net volume was very decent at just under 45,000 contracts.  But like in gold, I certainly wouldn’t describe it as heavy.


And just for information purposes, here’s the New York Spot Silver [Bid] chart so you can see the COMEX trading action in more detail.


The platinum chart looks suspiciously similar as well, so I shall forgo commenting on it.  That precious metal finished the day at $940 spot, down another 9 dollars from Thursday’s close.  It was down $14 at one point.


It was a similar chart pattern in palladium, until just a few minutes after it got clubbed by the HFT traders and their spoofing/algorithms to just below $600 spot.  Then away it went to the upside, only to get capped at the London p.m. gold fix.  From there it got sold down a bit until 1 p.m. EST—and then it rallied to close on its high tick of the day.  One has to wonder what that was all about.  Palladium finished the Friday session in New York at $620 spot, up 15 bucks from Thursday’s close—and 25 dollars off its low tick.


The dollar index closed late on Thursday afternoon in New York at 97.99—and it’s 97.90 low came a few minutes after 11 a.m. Hong Kong time on their Friday morning.  It quietly rallied a bit over 20 basis points between the low in Hong Kong and the release of the job numbers at 8:30 a.m. in New York.  By 9:01 a.m., its 99.34 high tick was in—and it backed off some from there, closing the week at 99.15—up 116 basis points on the day.


And here’s the 2-year U.S. dollar chart once again, so you can see the overall long-term pattern.  One has to wonder how much longer the powers-that-be can keep this manufactured rally in the dollar index going.

151107 2-year USD

The gold stocks gapped down a bunch at the open—and hit their collective low ticks about 9:50 a.m. in New York trading.  From there they crawled higher until shortly after noon EST—and then the traded flat for an hour or so before crawling lower for the remainder of the Friday trading session.  The HUI got smacked for 4.19 percent.


The chart pattern for the silver equities was similar in most respects to the gold stock, the only really difference was the silver shares closed right on their low tick, whereas the gold stocks didn’t.  Nick Laird’s Intraday Silver Sentiment Index closed down a chunky 5.09 percent.

151107Silver 7

For the week, the HUI closed lower by 10.80 percent—and the ISSI by 7.97 percent.

The CME Daily Delivery Report showed that zero gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.

The CME Preliminary Report for the Friday trading session showed that gold open interest for November declined by 5 contracts leaving 211 still open.  Silver’s November o.i. declined by 2 contracts leaving 5 left.

Another day—and another withdrawal from GLD.  This time it was 86,155 troy ounces.  And as of 7:40 p.m. EST on Friday evening, there were no reported changes in SLV.

The reason that there haven’t been as many withdrawals from SLV during this engineered price decline is for the simple reason that the authorized participants [read JPMorgan] didn’t add any silver during the prior rally—and were shorting the shares in lieu of depositing real metal.  So now they’re buying back SLV shares that John Q. Public is selling on this engineered price decline [that JPMorgan et al instigated] in order to cover their short positions.  What a scam.  As a matter of fact, since the July lows in silver, there have been about 15 million troy ounces of physical metal withdrawn from SLV on a net basis during the subsequent three month ‘rally’.  Ted Butler is still trying to figure out why nobody except himself wants to talk about all this, as this dichotomy cries out for an explanation.

There was a sales report from the U.S. Mint yesterday.  They sold 4,000 troy ounces of gold eagles—4,000 one-ounce 24K gold buffaloes—and 316,000 silver eagles.

Month-to-date the mint has sold 8,000 troy ounces of gold eagles—8,500 one-ounce 24K gold buffaloes—and1,079,500 silver eagles.

I spoke with Michael over at the bullion store where I used to work——and he said that deliveries are just about back to normal, with the longest wait for anything being just under four weeks.  Premiums are back down to normal as well.  A-Mark still isn’t quoting a delivery time on any Sunshine Mint products—and as Michael said, when they make that announcement, that will be the ‘all clear’ that things are back to normal in the silver supply world.

There was some gold movement for a change over at the COMEX-approved depositories on Thursday, as 95,397 troy ounces were reported received—and 76,911 troy ounces were shipped out.  But the 76,911 troy ounces that as shipped out of Canada’s Scotiabank, ended up as receipt over at JPMorgan, so when that’s taken out, all there was, was a net deposit of 18,486 troy ounces into Scotiabank.  The link to that activity is here so you can see it for yourself.

There was a decent amount of silver shipped out—1,030,354 troy ounces to be exact—and over 90 percent of that came out of Scotiabank’s vault as well.  Nothing was reported received—and the link to that action is here.

It was another very busy day over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday, as 6,920 kilobars were reported received—and 12,130 kilobars were shipped out the door for parts unknown.  All of the action was at the Brink’s, Inc. depository once again—and the link to that, in troy ounces, is here.

Not surprisingly, the Commitment of Traders Report, for positions held at the close of COMEX trading on Tuesday, showed improvement in the Commercial net short positions in both gold and silver.

In silver, the headline number in the Legacy COT Report showed that the Commercial net short position declined by 2,232 contracts—and the Commercial net short position now stands at 335.7 million troy ounces, which is still an atrocious number.  They did this by adding 462 contract to their long positions—and covering/selling 1,770 short contracts.

Ted said that the Big 4 Commercial traders actually added 500 contracts to their already outrageous short position, the ‘5 through 8’ Commercial traders covered a 1,000 of their short contracts—and the raptors, the Commercial traders other than the Big 8, purchased 1,700 long contracts.  Based on the new Bank Participation Report that was released yesterday, Ted pegs JPMorgan’s short position in silver at about 25,500 contracts.

Under the hood in the Disaggregated COT Report it was better, as the Managed Money traders sold 4,320 long contracts, plus they added 437 short contracts, for a total improvement of 4,757 contracts.

Scrolling through copper on the way to the COT Report on gold, I see that the Commercial traders there were ringing the cash register in that metal as well, as they added 4,962 long contracts and covered 6,867 short contracts, for a total swing of 11,829 contracts.

In gold, the improvement was huge.  Ted said in his Wednesday’s column that the engineered sell-off in gold was more advanced than it was in silver—and he was absolutely right about that, as the Commercial net short position declined by an eye-watering 40,860 contracts, or 4.09 million troy ounces.  The Commercial net short position in gold is down to 12.50 million troy ounces.

The Big 4 Commercial traders decreased their short position by around 7,600 contracts—and the ‘5 through 8’ traders did the same thing to the tune of 6,800 contracts.  The raptors purchased about 26,300 long contracts.

Under the hood in the Disaggregated COT Report, the changes in the positions of the technical funds in the Managed Money category were even more impressive.  They sold 30,958 long contracts—and increased their short position by 15,927 contracts, for a total week-over-week swing of 46,885 contracts.

Of course, in a lot of ways, this COT Report is already ‘yesterday’s news’ considering the fact that there has been even more improvements in the three days since the cut-off for the above report.  True, we still have Monday and Tuesday to get through—and there could certainly be rallies of some sort that could temper these gains for next week’s report, so we’ll just have to wait it out.

However, it should be noted that despite the above improvements in this week’s COT Report—and the improvements since the Tuesday cut-off, the numbers in the COT Report still remain butt-ass ugly, particularly in silver.  I’ll have more about this in The Wrap—and I know that Ted will have a lot to say about it in his weekly commentary for his paying subscribers later today.

Here is Nick Laird’s excellent ‘Days of World Production to Cover COMEX Short Positions‘ in all of the physically traded commodities.  And, once again, it should be noted that the Big 8 Commercial traders in silver are still short a hair under 50 percent of the entire open interest in the COMEX futures market—and that works out to 414.0 million troy ounces, of which 127.5 million ounces is held short by JPMorgan alone.  On the chart below JPMorgan’s share works out to 61 days of world silver production.

151107Days to Cover

As I said last month at this time, to give you another sense of how grotesque things are in silver, the total Commercial gross short position is 108,653 contracts.  And if my calculations are correct, the Big 4 are short 58,096 contracts of that amount, just over half—and the Big 8 are short 82,803 contracts of that amount—76 percent.  There are 40 traders on the short side in the Commercial category—and the other 32 [40-8=32] Commercial traders are short the difference, which is around 25,800 contracts.  Split up evenly that’s a hair over 800 contracts per trader, which is immaterial.

The CME Group and the CFTC won’t touch this obscenity with a 10-foot cattle prod.  And as you already know, they are aiding and abetting JPMorgan et al in this crime in progress—and have been since JPMorgan took over the short position of Bear Stearns.  That obscenity includes the other three precious metals as well.

Along with yesterday’s Commitment of Traders Report came the companion Bank Participation Report [BPR] for November, for positions held in October.  And as I’ve said in the past—“This is data extracted directly from the above COT Report, which shows the COMEX futures contracts, both long and short, that are held by the U.S. and non-U.S. banks as of Tuesday’s cut-off.”  For this one day a month we get to see what the world’s banks are up to in the COMEX futures market, especially in the precious metals—and they’re usually up to quite a bit.

In gold, 5 U.S. banks are net short 56,174 COMEX gold contracts.  In October’s Bank Participation Report [BPR], that number was 50,023 contracts, so they’ve increased their collective short positions by just over 6,000 contracts in the last month.  Three of those five banks would include JPMorgan, Citigroup—and HSBC USA.  As for U.S. banks #4 and #5—I haven’t a clue, although Goldman Sachs comes to mind.

Also in gold, 23 non-U.S. banks are net short 42,945 COMEX contracts, which is a whopping increase from October’s BPR which showed a net short position of 23,068 contracts.  As I’ve stated for years, it’s reasonable to assume that a goodly chunk of this amount is most likely owned by Canada’s Scotiabank, so the remainder split up between the other ’22 or more’ non-U.S. banks are pretty much immaterial—unless they’re all trading as a group, and I don’t think they are.  There’s also a good chance that some of these non-U.S. banks are net long the COMEX futures market in gold.

Here’s Nick’s chart of the Bank Participation Report for gold going back to 2000.  Charts #4 and #5 are the key ones here.  Note the blow-out in the short positions of the non-U.S. banks [the blue bars in chart #4] when Scotiabank’s COMEX gold positions [both long and short] were outed in October of 2012.  The ‘click to enlarge’ feature is a must with these charts.

151107BPR - Gold

In silver, 4 U.S. banks are net short 26,083 COMEX contracts—and it’s Ted’s back-of-the-envelope calculation that JPMorgan holds about 25,500 contracts of that short position all by itself, so it’s guaranteed that at least 2 of these U.S. banks are net long the COMEX silver market.  The short position of these ‘4 or less’ U.S. banks was 21,830 contracts in the October BPR, so there’s been a decent increase month over month.

Also in silver, 14 non-U.S. banks are net short 30,094 COMEX contracts—and that’s an increase from the 21,830 contracts that these same banks held in the October BPR.

I would estimate that between 75 and 80 percent of those 30,094 COMEX contracts are owned by Canada’s Scotiabank, which makes the short positions of the remaining 13 non-U.S. banks pretty much immaterial.   Without doubt, Scotiabank is the second large silver short in the COMEX futures market—and at times has been number one, exceeding even JPMorgan.

And as in gold, it wouldn’t surprise me in the slightest that several of these non-U.S. banks are actually net long the COMEX silver market.

Here’s the BPR chart for silver.  Note in Chart #4 the blow-out in the non-U.S. bank short position [blue bars] in October of 2012 when Scotiabank was brought in from the cold.  Also note August 2008 when JPMorgan took over the silver short position of Bear Stearns—the red bars.  It’s very noticeable in Chart #4—and really stands out like the proverbial sore thumb it is in chart #5.

151107BPR - Silver

In platinum, 4 U.S. banks are net short 9,496 COMEX contracts—but their long position in total is a laughable 30 contracts!  So except for those 30 long contracts—their positions are held entirely on the short side.  In the October BPR, these same banks were short 7,510 COMEX platinum contracts, so they’ve added to their short positions by quite a bit during the month.  This is the biggest short position that the U.S. banks have had since the BPR back in August 2014.

I’d guess that JPMorgan holds the lion’s share of this 9,496 contract net short position.

Also in platinum, 17 non-U.S. banks are net short 10,985 COMEX contracts, a monstrous increase from the 4,898 contracts they were net short in the October BPR.  I have records going back eighteen months, and this is the biggest net short position in platinum that the non-U.S. banks have held during that period.

If there is a large player in platinum amongst the non-U.S. banks, I wouldn’t know which one it is, however I’m sure there’s at least one big one in this group.  The reason I say that is because before mid-2009 when the U.S. banks showed up, the non-U.S. banks were always net long the platinum market by a bit—and now they’re net short.  The remaining 16 non-U.S. banks divided into whatever is left, isn’t a lot, unless they’re all operating in collusion—which I doubt.  But from the numbers it’s easy to see that the platinum price management scheme is an American show as well, with one big non-U.S. bank most likely involved.  Scotiabank perhaps?

Here’s the BPR chart for platinum—and please note that the U.S. banks were never a factor in platinum until mid 2009.  Now look at them!  If you want to know why the platinum price isn’t going anywhere, despite the supply/demand fundamentals, look at the total long positions the U.S. banks have vs. their collective short positions.  Palladium too!  That tells you all you need to know.  The banks are net short 30 percent of the entire COMEX futures market in platinum, but it’s the positions of the 4 U.S. banks [plus one other] that really matters.

151107BPR - Platinum

In palladium, 4 U.S. banks were net short 4,635 COMEX contracts in the November BPR, which is a decline from the 5,269 contracts they held short in the October BPR.

Also in palladium, 14 non-U.S. banks are net short 3,775 palladium contracts—which is a stunning increase from the 252 contacts they held net short in October’s BPR.  You have to go back to November 2014 to find a bigger number for the non-U.S. banks.

Here’s the BPR chart for palladium updated with the November BPR data.  Like platinum above, just look at the long positions vs. the short positions held by the U.S. banks in Chart #5.  You couldn’t make this stuff up!  You should note that the U.S. banks were almost nowhere to be seen in the COMEX futures market in this metal until the middle of 2007—and they became the predominant and controlling factor by the end of Q1 of 2013, where they remain today.  I would bet, that like platinum, JPMorgan holds the vast majority of the U.S. banks’ short position in palladium.

I should also point out that, as of Tuesday’s cut-off, these 18 banks were net short 31 percent of the entire COMEX futures market in palladium.  And if you remember, there are 21 banks net short 30 percent of the COMEX futures market in platinum as well.

151107BPR - Palladium

As I say every month at this time, the three U.S. banks—JPMorgan, Citigroup, HSBC USA—along with Canada’s Scotiabank— are the tallest hogs at the price management trough.  Until they decide, or are instructed to stand back, the prices of all four precious metals are going nowhere—supply and demand fundamentals be damned!

And that goes for copper and crude oil as well.

As Jim Rickards so correctly put it, the price management scheme is now so obvious they should be embarrassed about it.

Nick Laird passed around a couple of charts yesterday evening that are certainly worth sharing.  The first is the gold imports into China through Hong Kong for the month of September.  Hong Kong exports into China may no longer be a proxy for Chinese gold demand, but it’s still a decent amount nonetheless.

151107China-HK Gold

And, as always, here’s the weekly gold withdrawal from the Shanghai Gold Exchange for the week ending on Friday, October 30.  The amount that week was 46.565 tonnes.


I have a decent number of stories again today, so I hope you have the time in what’s left of your weekend to read the ones that interest you.


Strong Growth in Jobs May Encourage Fed to Raise Rates

Hiring at American companies shifted into higher gear in October, helping to lift wages and clearing the path for the Federal Reserve to raise interest rates next month.

The 271,000 jump in payrolls reported by the Labor Department on Friday was much more robust than expected and suggested that economic growth had enough momentum to allow the central bank to begin its move away from the ultra-low, crisis-level interest-rate policy it has been following for seven years.

Along with altering the landscape for policy makers in Washington and traders on Wall Street, the strength in the labor market, if it persists, is expected to shift the political debate as the 2016 presidential campaign heats up.

While there is still a possibility the Fed could hold back, the underlying solidity evident in the latest jobs report will strengthen the hand of monetary policy hawks who have long favored an increase in short-term rates. At the same time, it should reassure Janet L. Yellen, the chairwoman of the Federal Reserve, and a majority of her colleagues at the central bank that the economy can handle modestly higher borrowing costs without stress.

Well, dear reader, these jobs numbers were cooked to perfection to ensure that they road is paved for an interest rate increase when the smoke goes up the chimney after the FOMC meeting ends on December 16.  This Pollyanna piece came from The New York Times yesterday—and I thank Patricia Caulfield for today’s first story.

Another Phony Payroll Jobs Number — Paul Craig Roberts

The Bureau of Labor Statistics announced today that the U.S. economy created 271,000 jobs in October, a number substantially in excess of the expected 175,000 to 190,000 jobs. The unexpected job gain has dropped the unemployment rate to 5 percent. These two numbers will be the focus of the financial media presstitutes.

What is wrong with these numbers? Just about everything. First of all, 145,000 of the jobs, or 54%, are jobs arbitrarily added to the number by the birth-death model. The birth-death model provides an estimate of the net amount of unreported jobs lost to business closings and the unreported jobs created by new business openings. The model is based on a normally functioning economy unlike the one of the past seven years and thus overestimates the number of jobs from new business and underestimates the losses from closures. If we eliminate the birth-death model’s contribution, new jobs were 126,000.

Next, consider who got the 271,000 reported jobs. According to the Bureau of Labor Statistics, all of the new jobs plus some—378,000—went to those 55 years of age and older. However, males in the prime working age, 25 to 54 years of age, lost 119,000 jobs. What seems to have happened is that full time jobs were replaced with part time jobs for retirees. Multiple job holders increased by 109,000 in October, an indication that people who lost full time jobs had to take two or more part time jobs in order to make ends meet.

And now for the real story behind the job numbers.  Paul serves it up just right—and this commentary appeared on his Internet site yesterday sometime—and I thank Brad Robertson for finding it for us.

Worlds Largest Debtor Ever Raises U.S. ‘Debt Ceiling’…Again — Mark O’Byrne

The U.S. government has once again agreed to increase it’s so-called debt “ceiling” – this time from $18.5 trillion to $20 trillion.  The so-called debt ceiling is recognized industry-wide as a complete misnomer.

“The phrase “debt ceiling” sounds austere and restrictive, as if intended to keep a lid on government spending. Actually, the U.S. national debt limit was conceived almost a century ago to do the opposite: to make it easier for Washington to borrow money”

Investment advisers Casey Research yesterday called the debt ceiling ‘a farce’. “Last week, Forbes reported the U.S. government has raised the debt ceiling 74 times since March 1962. The latest increase – number 75 – should help fund the government until March 2017 or so.”

They highlight just how serious and foreboding these uncontrolled U.S. debt levels are: “With a debt of $18.3 trillion, the U.S. is the most indebted nation in the history of the world. This massive and unprecedented debt load is extremely dangerous. We believe it’s only a matter of time until it sparks the next financial crisis.”

This commentary by Mark was posted on the Internet site yesterday—and it’s worth a minute of your time.

Doug Noland: Irreversibly Broken and Dysfunctional

There’s something wrong in the markets. Clearly, there are serious struggles unfolding in the hedge fund community. And I believe market instability and policy uncertainty have forced an initial bout of de-risking/de-leveraging. Yet when markets go into (policy-induced) face-ripping, short-squeeze melt-up mode, the pressure to unwind short positions and bearish hedges turns intense. The bulls giggle, not appreciating the ramifications. These chaotic, volatile markets are hard on leveraged speculating community returns. Everyone is forced to over-commit on the long side, ensuring there will be a lot of selling, shorting and hedging when the next “risk off” flares up. Poor performance dictates a heightened state of risk aversion during the next downdraft. Poor performance begets poor performance – and pressure to de-risk and de-leverage.

I recall similar dynamics prior to both the 1998 and 2008 crisis episodes. Friday’s payroll data reinvigorated King Dollar. Energy and commodities prices were under pressure. EM currencies stumbled. And I’m sticking with the view that the global Bubble has been pierced, though central banks have gone to incredible measures to keep pumping. The Fed at this point faces a very serious dilemma.

Doug’s weekly Credit Bubble Bulletin is always a must read for me—and should be for you as well.  I found it on his website in the wee hours of this morning.

Obama rejects Keystone XL pipeline bid

President Obama announced Friday that he has rejected Canadian energy giant TransCanada’s application to build the Keystone XL pipeline, saying that the pipeline was not in the U.S. national interest.

“The State Department has decided the Keystone XL pipeline would not serve the interests of the United States. I agree with that decision,” Obama said at a White House press conference.

The announcement caps a 7-year saga that has become one of the biggest environmental flashpoints of Obama’s presidency. It comes just days after the State Department refused to agree to TransCanada’s request to suspend the review process on the controversial project, which has seen enormous opposition from environmental groups.

This story appeared on the Internet site yesterday morning EST—and I thank Harold Thompson for sharing it with us.  Brad Robertson, a fellow Albertan, sent me the article as well—and his opinion on the decision is as follows: “I still think this quick gesture was an in-your-face for [Canada’s new Prime Minister Justin] Trudeau for wanting to pull out of Syria, because [former Prime Minister and U.S. toady] Stephen Harper wouldn’t have. I think this is absolute politics at its very best.”  I shan’t argue.

Oil Supply Picture Has Changed Since Keystone Was Proposed

When the Obama administration began considering the Keystone XL pipeline seven years ago, oil production in the United States was falling and most analysts thought it would never recover. At the same time, Mexican oil production was also in decline, meaning that domestic refineries would soon need another source of crude.

Canada, and its expanding oil sands industry, seemed like the perfect solution. But so much has changed in the oil patch since then that many energy experts say the Keystone pipeline, which the Obama administration rejected on Friday, matters far less than it once did.

Domestic production has nearly doubled and has flooded the market with so much crude oil that prices have plummeted. Refineries along the Gulf Coast still need the heavy crude Canada produces, but they are finding new ways to obtain it, and storage facilities are filled to the brim.

This article, filed from Houston, put in an appearance on their Internet site on Friday sometime—and it’s worth reading if you have the interest.   It’s the second offering of the day from Patricia Caulfield.

The “War on Terror” Is the Hoax Foundation of the Police/Spy State — Paul Craig Roberts

The “war on terror” was a hoax. Americans were deceived by policymakers, who are pursuing a hegemonic agenda. The American people were too trusting and too gullible and, consequently, Americans were easily betrayed by Washington and by the presstitute media.

The consequences of the deceit, gullibility, and betrayal are horrendous for Americans, for millions of peoples in the Middle East, Africa, Ukraine, and for Washington’s European vassals.

The consequences for Americans are an aborted Constitution, a police/spy state and rising resentment and hatred of America around the world.

The consequences for peoples in Somalia, Libya, Afghanistan, Iraq, Yemen, Pakistan, Syria, Palestine, and Ukraine have been massive deaths and dislocations, infrastructure destruction, internal conflicts, birth defects, invasions, bombings, drones. Millions of peoples have been murdered by Washington’s pursuit of hegemony, and millions have been turned into refugees.

This commentary by Paul showed up on the Internet site at 12:04 p.m. Moscow time on their Friday afternoon, which was 4:04 a.m. in Washington—EST plus 8 hours.  It falls into the absolute must read category for any serious student of the New Great Game.  I thank U.K. reader Tariq Khan for finding it for us.

In Cuba, an Abundance of Love but a Lack of Babies

A magnetic energy courses between Claudia Rodriguez and Alejandro Padilla, binding the couple in clichés of intimacy: the tendency to finish each other’s sentences; hands that naturally gravitate toward one another; a shared laughter that forms the soundtrack of their romance.

What their love will not bear, for the moment, is a family. Though they plan to marry and have children, they will wait — until they are no longer sharing a small apartment with a half-dozen others, or perhaps until obtaining diapers and formula is no longer a gamble.

In short, they will be waiting a long time.

No surprises here, as crashing birthrates threaten a lot of nations now—and not just in the west.  This essay, filed from Havana, appeared on The New York Times website back on October 27—and I thought it worth posting in Saturday’s column.

Confusion as Germany announces curbs on Syrian refugees

Angela Merkel’s generous open-door policy towards people fleeing Syria’s civil war has been thrown into confusion after Berlin announced that the hundreds of thousands of Syrians entering Germany would not be granted asylum or refugee status. The announcement from the interior ministry on Friday showed panic at the top in Berlin, with the swiftly issued semi-denials only intensifying the sense of confusion and knee-jerk responses over refugees.

Syrians would only be allowed to enter Germany for one year, are barred from having family members join them, and would only enjoy “subsidiary protection” which limits their rights as refugees, the interior ministry announced.

Germany, along with Sweden and Austria, has been the most open of the countries in Europe to take newcomers over the last six months, with the numbers entering Germany dwarfing those arriving anywhere else. However, the interior minister, Thomas de Maizière, announced that Berlin was starting to fall into line with governments elsewhere in the European Union, who were either erecting barriers or acting as transit countries and limiting their own intake of refugees.

This news item was posted on The Guardian‘s website at 8:02 p.m. GMT on their Friday evening, which was 3:02 p.m. in New York—EDT plus 5 hours.  I thank Patricia Caulfield for finding it for us.

Lukashenko hints at being president for life as sworn in for fifth term

Belarus president Alexander Lukashenko has been inaugurated for his fifth term in office, using his speech to suggest that he intends to stay in power until he dies.

Lukashenko, who won a landslide victory in presidential elections boycotted by most credible opposition figures, has been in power in Belarus since 1994.

Three of his sons attended the ceremony – including 11-year-old Kolya, who Lukashenko is said to be grooming as his successor.

The president, referred to as the “last dictator in Europe” by the Bush administration in the US, rejected calls for economic reforms demanded by the IMF in return for much-needed financial aid.

This interesting news item showed up on Internet site at 4:11 p.m. GMT, which was 11:11 a.m. in Washington.  I thank Patricia for this story was well.

Why British Haste on Plane Bomb Theory?

British officials have made an unseemly leap to speculate on a terrorist plot in the Russian airliner crash over Sinai last weekend.

And Russia has understandably reacted furiously to the speculation, saying that it is too early to make such an assessment when crash investigators have not even compiled, let alone evaluated, evidence.

American officials, including President Barack Obama, are also now echoing the British claims of a bomb on the plane. The question is: why the haste?

This opinion piece was posted on the Internet site at 2:01 p.m. Moscow time on their Friday afternoon—which was 6:01 a.m. EST in Washington.  It’s the second contribution of the day from Tariq Khan.

Putin Suspends Flights From Russia to Egypt Amid Security Fears

President Vladimir V. Putin on Friday suspended all flights from Russia to Egypt, the most popular foreign tourist destination for Russians, until the cause of a mysterious plane crash that killed 224 people over the Sinai Peninsula can be established.

Mr. Putin’s decision was the first breach in what has largely been a consistent response from Russian and Egyptian authorities to the crash on Saturday. Until now, the two countries have been playing down the possibility of terrorism — even as Prime Minister David Cameron of Britain said it was likely a bomb and President Obama said “we are taking that very seriously.”

A Kremlin spokesman said that Mr. Putin’s decision did not mean that the crash was caused by a terrorist act. Mr. Putin ordered that measures be taken to ensure that the roughly 45,000 Russian tourists already in Egypt could be brought home safely.

This article, filed from Moscow, appeared on The New York Times website on Friday sometime—and I thank Patricia Caulfield for bringing it to our attention.

Meeting With Taiwan Reflects Limits of China’s Checkbook

For the past eight years, the Chinese government has showered its former enemies in Taiwan with economic gifts: direct flights, commercial deals, even an undersea water pipeline. Trade is up more than 50 percent, and mainland tourists, once barred from traveling to the island, now arrive in droves, nearly four million last year alone.

But Beijing has discovered, again, that money cannot buy love.

In Taiwan last year, large protests broke out against an agreement to expand trade with the mainland, and the governing Kuomintang, or Nationalist Party, which favors closer ties with China, has plummeted in popularity and is widely expected to lose the presidency and possibly the legislature in January elections.

This story, filed from Hong Kong, is another item that came from the NYTimes‘ website yesterday—and once again my thanks go out to Patricia C. for sending it our way.

Taiwan’s President Caves In to China

The “historic” meeting that is to take place in Singapore on Saturday between the leaders of China and Taiwan is nothing to cheer about. There will be no progress in terms of peace and reconciliation. The world will witness nothing but politics at its most cynical.

This is to be expected of the president of China, Xi Jinping, who has put the world into a swoon with his economic diplomacy while persecuting dissent and freedom of speech at home, systematically arresting human-rights lawyers and parading a Stalinesque purge of his political enemies as a crackdown on corruption. In this sense, he might even be excused for pretending to make history. It is simply his job, and he is answerable to no one.

Taiwan’s elected president, Ma Ying-jeou, on the other hand, cannot be excused. Unlike Mr. Xi, he is accountable to the people of Taiwan who elected him.

Relations between China and Taiwan have been tense since 1949 when Chiang Kai-shek lost a civil war to Mao Zedong’s Communist forces and retreated to the island with his troops. Beijing considers Taiwan a breakaway province, while Taiwanese views of the mainland have evolved over the decades. Mr. Ma was elected in 2008 after a campaign calling for more trade and warmer relations with the mainland, but the sense now is that he’s gone too far.

This opinion piece, filed from Taipei, is another New York Times article that showed up on their Internet site yesterday—and it’s courtesy of Patricia C. as well.

‘We got pizza and wings’: U.S. and Chinese warships talk turkey in South China Sea

As soon as the guided-missile destroyer USS Lassen breached 12-nautical-mile territorial limits around one of China’s man-made islands in the disputed South China Sea last week, a Chinese warship shadowing its movements began demanding answers.

“Hey, you are in Chinese waters. What is your intention?” was the first question that came, Commander Robert Francis, commanding officer of the Lassen, said on Thursday.

His crew replied that they were operating in accordance with international law, and intended to transit past the island, carrying out what U.S. officials have called a freedom-of-navigation exercise designed to challenge China’s claims to the strategic waterway.

This cute story shows you how stupid all of this South China Sea bulls hit really is.  It’s another story from Internet site—and another offering from Patricia C.

Voice of China: Beijing’s covert radio network airs China-friendly news across Washington, and the world

In August, foreign ministers from 10 nations blasted China for building artificial islands in the disputed South China Sea. As media around the world covered the diplomatic clash, a radio station that serves the most powerful city in America had a distinctive take on the news.

Located outside Washington, D.C., WCRW radio made no mention of China’s provocative island project. Instead, an analyst explained that tensions in the region were due to unnamed “external forces” trying “to insert themselves into this part of the world using false claims.”

Behind WCRW’s coverage is a fact that’s never broadcast: The Chinese government controls much of what airs on the station, which can be heard on Capitol Hill and at the White House.

WCRW is just one of a growing number of stations across the world through which Beijing is broadcasting China-friendly news and programming.

This very long but very interesting Reuters essay put in an appearance on their website back on Monday—and for content and length reasons, had to wait for Saturday’s column.  It’s the final offering of the day from Patricia Caulfield—and I thank her on your behalf.

Australia Deploys Sheepdogs to Save a Penguin Colony

“Massacred,” read the banner headline in the local newspaper — just the single word, as if describing an act of war. Below it was a photo of dead penguins and other birds, the latest casualties in Australia’s long history of imported species’ decimating native wildlife.imported species’ decimating native wildlife.

Foxes killed 180 penguins in that particular episode, in October 2004. But the toll on Middle Island, off Victoria State in southern Australia, kept rising. By 2005, the small island’s penguin population, which had once numbered 800, was below 10.

Today, their numbers are back in the triple digits, and much of the credit has gone to a local chicken farmer known as Swampy Marsh and his strong-willed sheepdogs.

This New York Times article showed up on their website back on Tuesday—and is another story that had to wait for today’s column.  It’s courtesy of Roy Stephens.

Sprott Money News Interviews Eric Sprott

Listen to Eric Sprott share his thoughts on recent payroll reports, ongoing weakness in the economy and the attempt to hide this weakness, the Indian Gold Monetization “scheme”—and more.

This 7:58 minute audio interview with host Geoff Rutherford was posted on the Internet site on Friday—and it’s worth your while if you have eight minutes to spare.

Miners unable to reverse platinum rout putting Lonmin on brink

Lonmin’s warning that it may be forced out of business shows just how dire the situation has become for some of the world’s biggest mining companies.

At the heart of the problem are platinum prices at a seven- year low and ample amounts of stored metal. While producers have been cutting output, it hasn’t boosted prices because there’s so much available in vaults and from recycling. There’s enough stockpiled platinum to satisfy about a quarter of the total annual demand, according to estimates from the World Platinum Investment Council.

Producers don’t control the levers of supply anymore,” said Bernard Dahdah, a precious-metals analyst at Natixis SA in London. “Ten years ago, we didn’t have physically-backed ETFs, ten years ago recycling was a small bit of total supply. Mine supply has become a much smaller portion.”

Lonmin, the world’s third-biggest platinum producer, is now fighting for survival by cutting jobs and closing unprofitable mines as it burns through cash. While shareholders have already lost about 90% of their investment in Lonmin this year, the company said it may shut down if it can’t sell more equity.

Please go back and re-read what I had to say about platinum in the November Bank Participation Report in the first section of today’s column.  With 21 banks net short 30 percent of the entire COMEX futures market, there’s a reason that platinum is priced where it is.  This ain’t rocket science—and why the mining fraternity won’t stand up for itself is beyond me.  This Bloomberg article found a home over at the Internet site yesterday afternoon GMT—and it’s worth reading.

Ted Butler: The Count

As I’ve indicated previously, there are two great price forces in silver: actual supply and demand which will determine prices long term and COMEX futures positioning which has and will dictate prices until it doesn’t any longer. Even though I haven’t written much about actual supply and demand recently, let me just say those fundamentals are getting more bullish as time passes (as trite as that sounds). In the here and now, however, COMEX futures positioning has come to dictate prices to an extent even I find remarkable.

Considering the death grip on price that COMEX trading exerts on silver and gold, it’s not terribly surprising that more commentators have come to focus on the COT market structure premise than ever before. More of a surprise is that very few of these commentators step back and focus on the fact that COMEX trading has become purely speculative in nature, as opposed to serving as an exchange facilitating bona fide hedging – the reason futures trading was allowed to come into existence.

It’s no coincidence that the death grip of COMEX price control has come to be all-encompassing at precisely the same time that trading has come to exclude real producers and consumers. After all, nothing could be more artificial or removed from reality than a betting contest that is only comprised of a small group of short term speculators out to game one another. It is when that private betting contest sets the price of important world commodities, to the exclusion of input from real producers, consumers and investors, that it becomes manipulative

Ted Butler’s mid-week commentary got accidentally posted on a website I’ve never heard of——and by an ‘analyst’ that I’ve not heard of either.  I’ve read what he had to say and you can safely ignore it.  Just scroll down to Ted’s commentary as it’s an absolute must read.


I took these photos in the ravine last Sunday.  It was a pretty cloudy day—and although there was enough light for pictures, it was borderline enough that I thought I’d throw on the flash.  They look like they were taken at night, but they were not.   Because I had to use a lower shutter speed, I had to the stop the lens down a lot, and that’s why they look the way they do. However, the fill flash was able to freeze all movement—and it’s obvious in two of the shots.  The first bird is a male white-breasted nuthatch, the next two are of the red-breasted variety—and the last two shot are chickadees.  The ‘double-click to enlarge‘ feature brinks these photos up to full screen size.

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151107Gun interview

151107Ramirez 1


The further a society drifts from the truth, the more it will hate those who speak it.”  — George Orwell

Today’s pop ‘blast from the past’ is one I haven’t posted for at least a couple of years—and it’s worth a revisit now.  This American rock band, which needs no introduction, was all the rage from 1972 onwards—and they and their songs are legends.  There two biggest hits are linked here—and here.  Enjoy.

Today’s classical ‘blast from the past’ is somewhat older.  I heard part of it on CBC FM the other day—and thought I’d stick the complete work in today’s column despite its length.  Brahms composed his violin concerto in D major in 1878—and dedicated it to his friend, violinist Joseph Joachim.  It had its premiere in Leipzig on January 1, 1879 with Joachim as soloist.  Of the great German violin concertos, it is second only to Beethoven’s.

Here’s the gifted [and delicious] Hilary Hahn doing the honours, along with the Frankfurt Radio Symphony.  Paavo Järvi conducts—and the link is here.

151107Silver coin

Well, yesterday’s precious metal price action, along with the rise in the U.S. dollar was pretty much as I predicted in my comments in The Wrap in Friday’s column.  The only thing I was not happy about—and neither was Ted, was the fact that JPMorgan et al didn’t hit the precious metals as hard as they could have if they really wanted to push the issue.

Despite the improvements shown in yesterday’s COT Report—and the subsequent improvements since the Tuesday cut-off, we are miles away from being out of the woods in either gold or silver—and especially silver.

And as Ted said in his commentary posted in the Critical Reads section above—“The question that should be on everyone’s mind is how much lower in price from here. That all depends on how many contracts the commercial traders can force the managed money traders to sell. It also depends on how vicious and ruthless the commercials are in rigging prices lower. We do know that lower prices, particularly in the form of new price lows, are necessary to motivate the managed money technical funds to sell; we just can’t know how many, or how thick, the price salami slices will be.

Here are the 6-month charts for the Big 6 commodities once again, so you can see how far along we are in these engineered price declines.

151107 6-month gold

151107 6-month silver

151107 6-month platinum

151107 6-month palladium

151107 6-month copper

151107 6-month WTIC

So unless I’m reading the Fed all wrong, there’s no longer any doubt about an interest rate increase on December 16, as it’s pretty much baked in the cake that we’re going to get one.

As to how that might affect the precious metals is not even on my radar at the moment, as it’s what’s happening in the COMEX futures market right now that has my undivided attention.  The December delivery month is the biggest delivery month of the year.  All the traders holding December COMEX futures contracts, that aren’t standing for delivery, have to either roll or sell theses positions on or before Friday, November 27.

I’m only speculating here, but I would guess that the powers-that-be will want this engineered price decline all wrapped up on or before that date.

But regardless of whether that comes to pass or not, the balance of the 2015 calendar year is certainly going to be interesting—and if you think I know how it’s going to turn out between now and New Year’s Eve, you’re talking to the wrong guy.

This price management scheme by JPMorgan et al is now beyond the ridiculous.  It is, as Jim Rickards said “so obvious that they should be embarrassed about it.”  But obviously they’re not.

Yet despite the fact that it’s so obvious that even Stevie Wonder could see it, the miners pretend that they don’t know what’s going on, with Glencore and Lonmin being the poster boys de jour.

Even with all the evidence necessary to prove the case to any judge and jury beyond a shadow a doubt, the miners not only ignore it, they actually run screaming from anyone who wishes to present them with the facts of the case.   You’d figure that they’d have at least a modicum of curiosity about it, since it affects their core business and, dare I say it, us stockholders.  But, alas, that is not the case.

This also goes for the vast majority of the so-called gold and silver ‘analysts’ out there.  Even the ‘analyst’ who posted the Ted Butler commentary above, wouldn’t go there—and ran screaming as well.

Of course it doesn’t help that the two organizations that ‘represent’ the miners—the World Gold Council and The Silver Institute—are openly hostile to anyone who dare speak the truth.  It has become just as Orwell said in his quote above.

And it’s even more egregious with The Silver Institute, as the very organization whose primary function it is to monitor criminal activity in the COMEX futures market, the CME Group, actually allows the precious metal price management scheme to flourish under its very nose.  The CME Group is a card-carrying member of The Silver Institute as well.

So it’s only a short stretch of the imagination to accept the fact that all members and management of these two organizations are complicit in this price management conspiracy.  If not actively, then by their very silence.

How did it come to this?

I’m done for the day—and the week—and I’ll see you on Tuesday.


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