11 June 2016 — Saturday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM

The gold price didn’t do a lot in Far East trading on their Friday — and was down four bucks or so by the London open.  It began to rally from there, but every break-out attempt got sold down before it could get too far — and the evidence is the saw-tooth price action.  The high tick of the day came at the London p.m. gold fix — and I was surprised to see price action after the COMEX close on a Friday, because traders are normally nowhere to be found after that.

The low and high ticks are hardly worth looking up — and the CME Group reported them as $1,267.30 and $1,280.90 in the August contract.

Gold closed in New York yesterday afternoon at $1,273.30 spot up $3.80 on the day.  Net volume wasn’t exactly light at just under 144,000 contracts — and I was surprised at how much roll-over volume there was.

Here’s the 5-minute gold tick chart courtesy of Brad Robertson once again — and as you can see, all the price shenanigans before the COMEX open didn’t involve much volume.  And all the volume that mattered occurred during New York trading, both in the COMEX session — and into the normally thinly-traded after-hours market.  Volume didn’t drop off to what I call background levels until 2 p.m. Denver time on the chart below, which was 4 p.m. in New York.

The vertical gray line is midnight in New York, noon the following day in Hong Kong—and don’t forget to add two hours for EDT.  The ‘click to enlarge‘ is a must here.

Silver didn’t do much — and the only rally that looked like anything, got snuffed out starting at 11 a.m. EDT, which was the moment that London closed for the weekend.  The price manged to recover from that sell-off a bit — and closed in the green, albeit barely.

The low and high ticks aren’t worth looking up.

Silver finished the Friday session at $17.28 spot, up 5 cents from Thursday’s close.  Net volume wasn’t exactly light at 39,500 contracts, with decent roll-over activity out of the July contract.

Platinum got sold down 7 bucks the ounce — and back below $1,000 shortly after trading began in the Far East on their Friday morning.  It didn’t do much until 11 a.m. in New York, when ‘da boyz’ spun their algorithms and took another 12 dollars off the price.  It recovered about half of that loss within an hour, before chopping sideways for the rest of the Friday session.  Platinum was closed at $991 spot, down an even ten dollars from Thursday.

Palladium was also under selling pressure until 11 a.m. Zurich time.  At that juncture it rallied back to within 4 dollars of unchanged by the London p.m. gold fix, before getting hammered into the dirt to the tune of 15 dollars.  The price didn’t do much after that.  The powers-that-be closed palladium down a very chunk $17 from Thursday.  Don’t you just love free markets?

The dollar index closed late on Thursday afternoon in New York at 94.07 — and rallied a quick 13 basis points before trading mostly flat until 8:30 a.m. in New York on their Friday morning.  Although if you check the chart below, it appears that ‘gentle hands’ had to show up on at least one occasion shortly after London opened [3 a.m. EDT] to prevent it from falling below the 94.00 mark.  Anyway, once 8:30 a.m. EDT rolled around, someone obviously wanted the dollar higher — and the ramp job lasted more or less right into the close on Friday afternoon, as the index finished the Friday session at 94.65 — up a chunky 58 basis points from Thursday.

And here’s the 2-year U.S. dollar index so you can track the current ramp job with some historical perspective behind it.  It will be interesting to see how long this ‘rally’ lasts.

The gold stock open up a percent and change, with their collective high ticks coming around 10:20 a.m. EDT in New York trading.  The some thoughtful soul sold a bunch of shares, or laid on a monster short position at that point, because by 11:40 a.m. EDT, the stocks were in the red by about 2 percent.  And despite the fact that gold traded in positive territory for the rest of the Friday session, their associated shares continued to bounce off their lows for the rest of the trading day in New York.  The HUI closed down 1.81 percent.

The silver stocks followed an almost identical price path, as Nick Laird’s Intraday Silver Sentiment Index/Silver 7 Index closed lower by 2.59 percent.

And here are the three new charts from Nick that show the changes for the week, month-to-date…and year-to-date…for all four precious metals, plus the HUI and ISSI/Silver 7 Index…both in dollar and percentage terms.

The CME Daily Delivery Report showed that 103 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.  Once again the largest short/issuer was HSBC USA out of its own account.  JPMorgan was, as always, the largest long/stopper with 53 contracts for its client account, plus 38 for itself.  And as it’s been all week, Goldman Sachs came in distant second with 9 contracts for its client account.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Friday trading session showed that gold open interest in the June contract fell by 23 contracts, leaving 1,649 still open.  Since Thursday’s Daily Delivery Report showed that 142 gold contracts were posted for delivery on Monday, that means that another 142-23=119 gold contracts were added to the June delivery month yesterday.  That brings the total of new gold contracts added so far this month pretty close to the 1,600 contract mark.  Someone, most likely JPM, wants all the physical gold they can get — and they’re not being shy about it.  I just know that Ted will have much more to say about this extraordinary delivery month that is unfolding in front of us.  Silver open interest in June remained unchanged at 339 contracts.

There were deposits in both GLD and SLV yesterday.  In GLD, an authorized participant added another 210,110 troy ounces.   In SLV, an a.p…most likely JPMorgan…deposited 1,663,722 troy ounces.

The amount of gold going in GLD continues to astound.  It doesn’t seem to matter whether the gold price is rising or falling, as the amount of gold in GLD continues to work its way higher.  Since the beginning of the year 5.94 million troy ounces of gold have been added to this one ETF.  That number in silver is 22.45 million troy ounces.

I know that Ted will have something to say about this in his weekly review today as well.

The U.S. Mint had a sales report yesterday.  They sold 5,500 troy ounces of gold eagles — 2,500 one-ounce 24K gold buffaloes — and 81,000 silver eagles.

Ted commented on the phone yesterday that the mint came nowhere even close to selling its weekly production capacity of one million silver eagles.  Maybe they’ll catch up next week.

Month-to-date the mint has sold 24,500 troy ounces of gold eagles — 6,000 one-ounce 24K gold buffaloes — and 914,500 silver eagles.

There was a decent amount of movement in gold over at the COMEX-approved depositories on Thursday.  They reported receiving 43,391 troy ounces — and shipped out 16,943 troy ounces.  Some of the action was a transfer of 15,335 troy ounces from HSBC USA to JPMorgan’s vault.  The link to that activity is here.

It was a big day in silver.  A very chunky 765,743 troy ounces of silver was reported received — and all of that went into JPMorgan’s vault.  There was also 1,332,919 troy ounces shipped out the door [from five different depositories] for parts unknown as well.  The link to that action is here.

There was decent in/out activity at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday, as they reported receiving 2,712 of them — and shipped out 1,400.  All of the activity was at Brink’s, Inc. as per usual — and the link to that, in troy ounces is here.

The Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday was a big positive surprise in silver, but as expected in gold.

Ted says that this positive surprise probably had to do with the holiday-shortened trading week that preceded this one, because everything may have not been reported in a timely manner back then — and we were both expecting bigger improvements in silver in last week’s report that weren’t there.  But that begs the question as to why the gold numbers in this week’s COT Report seem OK.  The short answer is that I don’t know — and that’s the long answer as well.  I expect Ted will have something to say about this in his commentary later today.

In silver, the Commercial net short position declined by 4,131 contracts, leaving the total Commercial net short position at 359 million troy ounces.  During the reporting week the commercial traders reduced their long position by 3,494 contracts, but they also reduced their short position by 7,625 contracts.  The net of those two numbers is the changed in the commercial net short position for the week.

Ted said that the Big 4 traders reduced their short position by about 1,200 contract — and the ‘5 through 8’ large commercial traders also reduced their short position, but by only around 400 contracts.  Ted’s raptors, the commercial traders other than the Big 8 increased their long positions close to 2,500 contracts.  So it was another “all for one, and one for all‘ week for ‘da boyz’ in silver.

With the new Bank Participation Report in hand, Ted pegs’ JPMorgan’s short position in silver at 20,000 contracts, which is down 4,000 contracts from last week.

Under the hood in the Disaggregated COT Report, it was all the Managed Money traders and a bit more, as they sold longs and went short for a net decline of 4,755 contracts, which was about 600 contracts more than the improvement in the commercial net short position.

They accomplished this by reducing their long position by 2,529 contracts — and they also added 2,226 contracts to their short positions.  The sum of those two numbers is the change in Managed Money traders for the week.  And, for the most part, the ‘Other Reportables’ and the Nonreportable/small trader category, cancelled each other out.

As Ted Butler keeps going on about, and rightly so, prices are determined by the dance between the Managed Money traders in the technical fund category, and JPMorgan et al in the Commercial category.

Here’s the 3-year COT chart for silver.  As you can tell, there was improvement, but a lot of that has been completely negated since the cut-off on Tuesday as silver rallied about its 50-day moving average with some authority — as the Manged Money traders covered short positions and went long, which is what they’re computer programs tell them to do.

In gold, the Commercial net short position increased by a chunky 29,654 contracts, or 2.97 million troy ounces of paper gold.  The Commercial net short position is back up to 24.37 million troy ounces.

It was “all for one, and one for all” with the commercial traders in gold this week as well, as the Big 4 commercial traders added about 11,000 contracts to their short positions, plus the ‘5 through 8’ large trader went short an additional 2,300 contracts.  The raptors, the small commercial traders other than the Big 8, sold the 1,500 long contract they purchased last week, plus they added 14,900 contracts to their short position on top of that.

Under the hood in the Disaggregated COT Report, it was almost all Managed Money traders again, as they added  19,901 long contract, plus they covered 8,854 short contracts, for a total of 28,755 contracts.  The about 900 contract difference between the Managed Money traders and the Commercial net short position came courtesy of the traders in the ‘Other Reportables’ category.

Like in silver, with the gold price back above its 50-day moving average once again, the Commercial net short position is materially worse since the Tuesday cut-off for this week’s COT Report, as the Managed Money goes longer — and the Commercial traders step in and add to their short positions in order to cap the price.

Here’s a chart that an interested reader made up a few weeks back.  It’s updated with yesterday’s COT data — and even with the surprise improvement in silver, we’re miles away from a bullish reading from a COT point of view — and gold’s Commercial net short position continues to be wildly bearish.  And as I pointed out in the previous paragraph, their both measurably worse since Tuesday.

Here’s Nick Laird’s “Days to Cover” chart updated with yesterday’s COT data for positions held at the close of COMEX trading on Tuesday.  It shows the days of world production that it would take to cover the short positions of the Big 4 and Big 8 traders in each physically traded commodity on the COMEX.  Click to enlarge.

As I say in every Saturday column—the short positions of the Big 4 and 8 traders in silver continues to redefine the meaning of the words ‘obscene’ and ‘grotesque.’  This week the Big 4 are short 143 days [almost 5 months] of world silver production—and the ‘5 through 8’ traders are short an additional 72 days of world silver production—for a total of 215 days, which is 7+ months of world silver production, or 494.5 million troy ounces of paper silver held short by the Big 8.

And it should be pointed out here that in the COT Report above, the Commercial net short position in silver is 359 million troy ounces.  So the Big 8 hold a short position larger than the net position—and by a monstrous amount—135.5 million troy ounces!!!  That’s how grotesque, twisted, obscene—and dangerous—this COT situation in silver has become—and gold’s not far behind, as is platinum.  One glance at the above chart tells all.

And as an aside, the two largest silver shorts on Planet Earth—JPMorgan and Canada’s Scotiabank—are short about 103 days of world silver production between the two of them—and that 103 days represents around 72 percent [almost three quarters] of the length of the red bar in silver in the above chart.  The other two traders in the Big 4 category are short, on average, about 20 days of world silver production apiece.

And as I mention in the Bank Participation Report below, Canada’s Scotiabank is now the King Silver Short in the COMEX futures market.  But in second place it’s still JPMorgan pulling the strings.

The June Bank Participation Report [BPR] data is extracted directly from the above Commitment of Traders Report Report.  It shows the COMEX futures contracts, both long and short, that are held by all 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 61,854 COMEX gold contracts in the June BPR.  In May’s Bank Participation Report [BPR], that number was 107,646 contracts, so they’ve decreased their collective short positions by a monstrous 45,792 contracts during the reporting period.  Three of the five banks would include JPMorgan, Citigroup—and HSBC USA.  As for who the fourth and fifth bank might be—I haven’t a clue, although Goldman Sachs comes to mind for most, as one of them.  But if they are in that group, my guess is that they would most likely be net long gold.

Also in gold, 20 non-U.S. banks are now net short 72,072 COMEX gold contracts.  In the May BPR they were net short 87,606 COMEX contracts, so the month-over-month improvement is pretty big, as they’ve reduced their collective short positions by about 15,500 contracts.  But as I’ve stated for years, it’s reasonable to assume that a goodly amount of this short position in gold held by the non-U.S. banks is owned by Canada’s Scotiabank.

As of this Bank Participation Report, the world’s banks are net short 26.9 percent of the entire open interest in gold in the COMEX futures market, which is a huge drop from the 34.5 percent they were short in the May BPR.

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.  CLICK to ENLARGE is a must here!

In silver, 5 U.S. banks are net short 20,382 COMEX silver contracts—and it was Ted’s back-of-the-envelope calculation from yesterday that JPMorgan holds virtually all of that net short position on its own.  The net short position of these five U.S. banks was 24,803 contracts in the May BPR, so there’s been about a 4,400 contract decrease in the net short positions of the U.S. banks since then. That makes it a mathematical certainty that the other 4 U.S. banks are about market neutral in the COMEX futures market in silver.

Also in silver, 17 non-U.S. banks are net short 30,283 COMEX contracts—and that’s a decrease of about 7,300 contracts that these non-U.S. banks held short in the May BPR.  I’m still prepared to bet big money that Canada’s Scotiabank is the proud owner of a goodly chunk of this short position—at least 25,000 contracts worth, if not more.  That most likely means that a few of the remaining 16 non-U.S. banks might be net long the COMEX silver market.

As of this Bank Participation Report, the world’s banks are net short 26.4 percent of the entire open interest in the COMEX futures market in silver—compared to the 31.5 percent net short that they were net short in the May BPR — and the lion’s share of that is held by Canada’s Scotiabank and JPMorgan.

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.  CLICK to ENLARGE!

In platinum, 5 U.S. banks are net short 8,311 COMEX contracts in the June Bank Participation Report.  In the May BPR, these same banks were short 10,189 COMEX platinum contracts, so they’ve decreased their short position by about 18.5 percent in one month.

I’d guess that JPMorgan holds the lion’s share of that 8,311 contract net short position.

Also in platinum, 18 non-U.S. banks are net short 10,507 COMEX contracts, a big decrease from the 12,783 contracts they held short in May, which is a drop of just under 18 percent month-over-month.

If there is a large player in platinum among 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—see the chart below—and now they’re net short.  The remaining 17 non-U.S. banks divided into whatever contracts are 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 involved.  Scotiabank perhaps?

And as of this Bank Participation Report, the world’s banks are net short 29.8 percent of the entire open interest in platinum in the COMEX futures market, which is down from the 35.8 percent they were collectively net short in the May BPR.  CLICK to ENLARGE is a must here as well.

In palladium, 3 or less U.S. banks were net short 1,802 COMEX contracts in the June BPR, which is down a third from the 2,762 contracts they held net short in the May BPR.  Even if JPMorgan held all these contracts themselves, and they might, it’s a pretty small amount.

Also in palladium, 14 or more non-U.S. banks are net short 775 palladium contracts—which is a decline of over 70 percent from the 2,692 COMEX contracts that these same banks were short in the May BPR.  If you divide up the short positions of the non-U.S. banks up more or less equally, they are immaterial, just like they are in platinum.

For the fifth month in a row it should be noted—and it’s obvious in the chart below—that the banks, both U.S. and foreign, appear to be heading for the exits in the palladium market, as their net short positions haven’t been this low since back in mid 2009.

As of this Bank Participation Report, the world’s banks are net short only 11.1 percent of the entire COMEX open interest in palladium.  In May’s BPR they were net short 24.0 percent.

Here’s the BPR chart for it.  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.  But as I mentioned in the previous paragraph, their footprint is pretty small now.  However, I would still be prepared to bet big money that, like platinum, JPMorgan holds the vast majority [if not all] of the U.S. banks’ remaining short position in this precious metal.

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 precious metal 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.

JPMorgan and Canada’s Scotiabank still remain the two largest silver short holders on Planet Earth in the COMEX futures market.  Right now Scotiabank is the King Silver Short, but JPMorgan is still running the show.  And with all the physical silver that JPMorgan has in its possession — and now gold, which they are accumulating hand over fist — Ted is wondering if they are setting up the other Big 7 short holders to burn in hell in a double-cross for the ages.

I don’t have all that many stories for you today — but I do have a fair number that I’ve been saving for this column for length and/or content reasons.  I hope you have enough time in what’s left of your weekend to read/watch/listen to the ones that interest you.

CRITICAL READS

Doug Noland: Historic Crazy

Friday was one of those market days that left an uncomfortable feeling in the pit of my stomach. U.S. markets have been resilient thus far, with the S&P500 teasing near record highs. But something is amiss globally. The STOXX Europe 600 Bank Index sank 3.67% Friday (4.8% for the week), to near two-month lows. Deutsche Bank ended the week down 7.7%, trading back close to multi-year lows (down 35% y-t-d). Italian bank stocks were hammered 5.0% Friday (5.9% for the week) to lows goings back to 2013. UniCredit was hit 6.4% Friday. Spanish equities (IBEX) sank 3.5% this week to two-month lows (down 11% y-t-d), while Italian stocks (MIB) dropped 2.1% (down 20% y-t-d). The German DAX was down 2.7%, boosting 2016 losses to 8.5%. French stock lost 2.6% (down 7.1%).

German 10-year bund yields are at the brink of turning negative, ending the week at a record low 0.02%. Italian 10-year spreads (to bunds) widened 10 bps this week to a four-month high 136 bps. UK 10-year yields closed Friday at a record low 1.23%. Japanese yields ended the week at a record low negative 0.17%. Treasury yields closed Friday at a three-year low 1.64%.

Credit Bubbles survive only so long as ample new Credit is forthcoming. Asset Bubbles persevere only so long as new “money” flows readily into the asset class and prices continue to inflate. I have argued that the current Bubble is deeply systemic, impacting virtually all asset classes. Undoubtedly, however, the most spectacular Bubble excesses continue to unfold throughout global bonds and fixed-income. I can appreciate Bill Gross discussing a $10 TN “supernova” that’s going to explode catastrophically “one day”. I can also respect legendary speculator George Soros’ decision to return to active trading with a host of bearish views and bets he expects to pay off one day soon. Gross and Soros are examining the same world as we are and must be in similar utter disbelief at what has transpired. Things turn notoriously Crazy near the end. We have witnessed Historic Crazy.

Doug’s weekly Credit Bubble Bulletin was posted on his website late last night Denver time — and it’s always worth reading.  Another link to Doug’s commentary is here.

Bloomberg: Global Investors Dumping U.S. Stocks at Record Pace

Investors outside the country dumped $128 billion in U.S. stocks in the past year, data from the Treasury International Capital System show.

Despite the higher quality of companies in the U.S., long-term investors may be drawn to the faster pace of growth in other economies, Stewart Warther, an equity strategist at BNP Paribas SA, told Bloomberg News.

Big-name investors are expecting U.S. markets to fall as the global economy weakens.  Billionaire investor George Soros has launched a series of “big, bearish investments” after a long break from trading, The Wall Street Journal reported, citing people close to the matter.

Soros has been warning of “intractable” political and economic problems in China, Europe and other areas that he thinks will soon negatively affect U.S. and Western stock markets.

This article put in an appearance on the newsmax.com Internet site at 8:02 a.m. on Friday morning EDT — and this story is courtesy of Brad Robertson.  Another link to this news item is here.

How Fascism Comes to America — Doug Casey

I think there are really only two good reasons for having a significant amount of money: To maintain a high standard of living and to ensure your personal freedom. There are other, lesser reasons, of course, including: to prove you can do it, to compensate for failings in other things, to impress others, to leave a legacy, to help perpetuate your genes, or maybe because you just can’t think of something better to do with your time.

But I’ll put aside those lesser motives, which I tend to view as psychological foibles. Basically, money gives you the freedom to do what you’d like – and when, how, and with whom you prefer to do it. Money allows you to have things and do things and can even assist you to be something you want to be. Unfortunately, money is a chimera in today’s world and will wind up savaging billions in the years to come.

As you know, I believe we’re well into what I call The Greater Depression. A lot of people believe we’re in a recovery now; I think, from a long-term point of view, that is total nonsense. We’re just in the eye of the hurricane and will soon be moving into the other side of the storm. But it will be far more severe than what we saw in 2008 and 2009 and will last quite a while – perhaps for many years, depending on how stupidly the government acts.

This must read commentary by Doug was posted on the internationalman.com Internet site yesterday — and another link to this essay is here.

House passes Puerto Rico fiscal rescue bill ahead of July cliff

The House voted overwhelmingly Thursday to approve a long-awaited rescue package for Puerto Rico that could allow the fiscally troubled U.S. territory to restructure the $72 billion it owes bondholders in exchange for new federal oversight over its locally elected government.

The bipartisan 297-to-127 vote followed months of intense negotiations between House Republican leaders, Democratic lawmakers and the Obama administration. Those talks were punctuated by a high-dollar public relations campaign aimed at derailing any deal that could force bondholders to swallow significant losses.

Thursday’s House vote came ahead of a crucial July 1 deadline, when the territory is poised to default on $2 billion in bond payments. The Senate, however, has yet to act.

Lead sponsor Rep. Sean Duffy (R-Wis.) said that unless the rescue bill becomes law, “the Puerto Rican government is likely to collapse, participants in public pension plans will be terribly damaged, and almost all bondholders could lose their investments.”

“Absent this bill,” he said, “almost nobody wins and nearly everybody loses.”

This news item showed up on The Washington Post website on Thursday — and I decided to keep it for Saturday’s column.  I thank Patricia Caulfield for pointing it out — and another link to this story is here.

Panama Papers Show How Rich United States Clients Hid Millions Abroad

Over the years, William R. Ponsoldt had earned tens of millions of dollars building a string of successful companies. He had renovated apartment buildings in the New York City area. Bred Arabian horses. Run a yacht club in the Bahamas, a rock quarry in Michigan, an auto-parts company in Canada, even a multibillion-dollar hedge fund.

Now, as he neared retirement, Mr. Ponsoldt, of Jensen Beach, Fla., had a special request for Mossack Fonseca, a Panama-based law firm well placed in the world of offshore finance: How could he confidentially shift his money into overseas bank accounts and use them to buy real estate and move funds to his children?

“He is the manager of one of the richest hedge funds in the world,” a lawyer at Mossack Fonseca wrote when the firm was introduced to Mr. Ponsoldt in 2004. “Primary objective is to maintain the utmost confidentiality and ideally to open bank accounts without disclosing his name as a private person.”

In summary, the firm explained: “He needs asset protection schemes, which we are trying to sell him.”

This is your long read of the day.  It appeared on The New York Times website last Sunday — and for obvious length and content reasons, had to wait for my Saturday missive — and here it is.  I thank Roy Stephens for sending it along.  Another link to this large, but very interesting essay, is here.

The Moment of Truth — Pat Condell

https://www.youtube.com/watch?v=JFt-pRIvL9E

This incredible 10:23 minute video about the upcoming British vote on remaining in the E.U. is an absolute must watch, even if it doesn’t affect you directly, because it dovetails perfectly with Doug Casey’s article on fascism.  It’s hard for me to remember ever hearing more lucid commentary from anyone, except for those from Britain’s UKIP leader, Nigel Farage.

It was posted on the youtube.com Internet site back on May 31 — and I thank Roy Stephens for sending it our way on Thursday.  Obviously it had to wait for today’s column.

BREXIT: The Movie [Full Film]

BREXIT THE MOVIE is a feature-length documentary film to inspire as many people as possible to vote to LEAVE the E.U. in the June 23rd referendum.

BREXIT THE MOVIE spells out the danger of staying part of the E.U. Is it safe to give a remote government beyond our control the power to make laws? Is it safe to tie ourselves to countries which are close to financial ruin, drifting towards scary political extremism, and suffering long-term, self-inflicted economic decline?

BREXIT THE MOVIE shows a side of the E.U. they don’t want us to see: the sprawling self-serving bureaucracy, the political cynicism, the lack of accountability, the perks, the waste, the cronyism, the corruption.

BREXIT THE MOVIE cuts through the patronizing intellectualism of the noble, higher goals of ‘Project Europe’, to reveal the self-interestedness of the political-bureaucratic class which runs and benefits from the E.U.

Pat Condell in the previous story/video urges every U.K. citizen to watch the Brexit movie — and here it is.  It runs for 1 hour and 11 minutes — and it was posted on the youtube.com Internet site back on May 12.  I haven’t watched it yet, but it’s on my ‘to do’ list this weekend.  Richard Saler sent it to my on Monday, and it obviously had to wait for Saturday’s column as well.  Another link to this video is here.

European Banks Are Crashing

From Deutsche Bank to Credit Suisse and from Barclays to Banco Popolare, the European banking system is getting battered this week with today’s plunge the biggest in 4 months.

This is the worst two week drop in European banks since April 2012, as Deutsche falls back to record lows.

This brief 3-chart Zero Hedge article was posted on their website at 9:51 a.m. EDT yesterday morning — and it’s the second contribution of the day from Richard Saler.  It’s worth a quick look.

German economy minister urges quick addition of Russia to G7 – website

The Group of Seven (G7) leading industrial nations should quickly allow Russia to rejoin the economic organisation, German Economy Minister Sigmar Gabriel said in an interview published on Thursday.

“Russia is an important global player and not a regional power,” Gabriel told the Russlandkontrovers.de website.

“That is why I am calling for Russia to rejoin the group, and turn the G7 back into the G8.”

Russlandkontrovers.de is the website of the established German-Russian Forum, which was founded in 1993 and includes over 400 leaders from industry, politics and academia.

This Reuters article, was posted on their Internet site at 7:31 p.m. BST on Thursday evening — and it’s something I found in yesterday’s edition of the King Report.  Another link to this news item is here.

Russia, the U.S. and NATO:  John Batchelor Interviews Stephen F. Cohen

Batchelor opens the broadcast with a series of scary statements from the latest Atlantic Council meeting in Lithuania, notably by Ben Hodges, Commanding General US Army Europe, warning about Russian provocations along its borders with NATO countries and a need for deterring the threats with the appropriate responses with NATO preparedness. Cohen responds with a very detailed discussion about how much of this talk is purely alarmist, and he maintains that if this is like the tensions around the Cuban Missile Crisis during the Kennedy administration – and it is as serious. It is different in that this time it is an American led crisis, not a Russian one. Also the Russian people are fully involved and informed about all these events whereas the American main stream media largely ignores this progression to war as a discussion topic, as apparently not newsworthy.

Perhaps there is good reason for little discussion in the West. The discussion in Moscow is about NATO on Russia’s borders; what would Washington’s response be if Russia were able to do the same in perhaps Canada or Mexico? And, of course, we already know the answer from the Cuban Missile Crisis resolution. But Putin is getting pressure to return the belligerence because that discussion is gaining strength in Russia, and the question of what is really driving the West to this NATO provocation is crying out for similar discussion in the West. Why, for example, are successive Polish governments so anti-Russian when its population is more mixed in attitude? In fact there are many ethnic Russians living there as second-class citizens under these governments, and Russia has repeatedly gone to the U.N. to make formal complaints about their treatment in Poland. The point, of course, is that the anti-Russian positions of successive governments have resulted with NATO on Russia’s border and is only reciprocated by a lawful and legitimate complaint submitted by Russia as a member of the U.N. about Polish mistreatment of its Russian ethnic population in Poland. The animosity of all of NATO governments in Europe and beyond is represented by this microcosm of reality. There is no provocation by Russia against NATO beyond a fabricated one.

And Russians are well aware of what is driving NATO aggression including the business model for the Washington Military Industrial Complex. It is discussed daily in Russia and on prime time television. Recently there was an incident, Cohen describes, between Russian Foreign Minister, Lavrov and a member of the Russian press raising the question of how Russia should have responded to the Washington initiated Ukrainian Civil War. It really is the central question for Russians and has yet to be answered. The answer is hugely important but will determine whether there is war or peace. I wonder if the question will ever appear in the West given that that particular discussion both defines a Washington relationship with a competing world power and a government that acknowledges that it wants an informed people. As we know Washington has invested in conflict with the first and denial of the second and the consequences could be dire.

This 40-minute audio interview was posted on the audioboom.com Internet site on Tuesday — and I thank Ken Hurt for sending the link.  But the biggest of all THANK YOUs goes out Larry Galearis every week for the above executive summary.  The interview is a must listen for any serious student of the New Great Game — and if you don’t listen to it, you should at least read the above.  Another link to this interview is here.

The Big Bet of 2016: Joining George Soros in Gold

There is a new gold rush on.

Abating expectations for Federal Reserve rate increases have fueled a fresh boom in everything that glitters, from gold futures to the shares of gold-mining firms to exchange-traded funds that give traders a way to bet on gold’s daily rise and fall.

Front-month Comex gold futures have been among the best-performing major asset classes in financial markets this year, up about 20% as of Thursday. But those gains have been dwarfed by the surge in many gold-related securities, the latest sign of the topsy-turvy trading across markets in 2016 that for now has transformed some of the least-beloved investments on Wall Street into top performers.

The gains reflect a vast shift in investor expectations over the past six months. Many analysts and portfolio managers entered 2016 expecting the U.S. dollar to resume its rise as the Fed carried out a series of interest-rate increases. Instead, the dollar this week hit a five-week low after soft U.S. jobs data and comments from Fed Chairwoman Janet Yellen made clear that no increase is imminent, extending a commodity-sector rebound whose size and longevity have surprised many investors.

I had a story about this in yesterday’s column, but I was so surprised to see it appear on The Wall Street Journal‘s website on Thursday afternoon, I thought I’d stick it in today’s column.  I thank Ken Hurt for sending it our way — and another link to this gold-related news item is here.

The PHOTOS and the FUNNIES

I took this photo of a crow a month ago, but because I had lot of other birds that were more interesting, this one got left behind.  To photograph them properly they have to catch the light just right, or they’re a black blob.  If you use the ‘click to enlarge‘ feature, they have a beauty all their own.  The drake mallard below swam by less than 8 meters away, which is point blank range for a 400mm lens, so I cropped it tight so you could see the detail of his magnificent breeding plumage.  The ‘click to enlarge‘ feature works wonder here as well.

The WRAP

Today’s pop ‘blast from the past’ was something that showed up in the right sidebar over at youtube.com when I was listening to something else yesterday.  It spent nine weeks at No. 1 on the Billboard Hot 100 back in 1981 — and won two Grammy Awards in 1982.  That’s 34 years ago if you’re doing the math — and the link is here.

Today’s classical ‘blast from the past’ is one I’ve posted before, but it’s been many years.  If I had to choose one violin concerto recording on my desert island stay, it’s Beethoven’s violin concerto in D major Op. 61.  It was premiered in Vienna on December 23, 1806 — and to say it wasn’t well received would be an understatement.  Well, the reviews aren’t mixed now.  Of the Big 4 German violin concertos it might be tied for first with Brahms violin concerto in some people’s minds, but for me there’s no contest at all.  It’s been referred to as “the great fall upwards.”

Here’s the incredibly gifted Arabella Steinbacher doing the honours back in October of 2007.  Walter Weller conducts the Madrid Symphony Orchestra.  The link is here — and it doesn’t get any better than this.

I’m not sure if much of anything should be read into yesterday’s price action in gold and silver.  It’s obvious that both wanted to rally, but both were kept on a very short leash, especially gold.

The share price action was rather counterintuitive — and I’m not sure what should be read into that either, but it is what it is.

Since this is my Saturday column, there are the 6-month charts for the Big 6+1 commodities that the powers-that-be are most interested in.

Ted Butler is still of the opinion that we probably have one more engineered price decline ahead of us this summer — and I’m not about to argue.  The current one was rudely interrupted by the ugly job numbers a week ago Friday — and now that the 50-day moving averages in both silver and gold have been penetrated to the upside with some authority, it’s possible that JPMorgan et al are loading the Managed Money traders back up on the long side before trying again.  Time will tell.

But looking at the June month as a whole, the amount of physical gold and silver on the move is extraordinary — whether it be the June deliveries, the major ETFs — GLD, SLV, and even Switzerland ZKB is getting weekly deposits.  Plus there’s the incredible amount of movement in COMEX stocks as well.

As I said in Thursday’s column, it appears that it’s really different this time, but as to how different it will turn out to be, still remains to be seen.

With all the top banksters in the world now talking guardedly as they must about the attributes of owning gold, either on an individual basis, or for countries in general, things are different.

I stole a few paragraphs from Jim Rickards‘ commentary over at The Daily Reckoning yesterday — and I’ve edited it lightly for length reasons.

“For 10 years, I’ve been on one side of the gold debate and global monetary elites have been on the other.”

“But as I’ve written recently, now, suddenly, elites are lining up to copy my ideas right down to specific amounts and percentages. This is a sea change, with huge implications for your portfolio. It’s absolutely critical to understand what has just happened and what’s coming next.”

“I should be flattered (and I am) that the elites are copying my work. But there’s more to this than diverse views suddenly converging. Elites don’t act in such a coordinated manner unless there’s an ulterior motive or hidden plan.”

“Based on my CIA training and decades as a lawyer and banker, I know one thing: There are no coincidences. When the elites suddenly switch sides on a key issue, something big is going on…”

I would guess that the “something big” Jim is referring to is some sort of monetary reset which includes a brand new and shiny gold price to match.  As to what silver’s price might be when the dust settles, I’ll leave that to your imagination.  As for me, I can imagine quite a bit — and a 3-digit silver price of some variety is a slam dunk from where I’m sitting, as it is with Ted.  The only question worth asking is just how big that 3-digit price is going to be.  And the answer is: “It doesn’t matter!”

I’ll surmise at this juncture that the fiat currency system as we’ve know it since 1971 is on its way out the door, as the powers-that-be now know that the gold card, the only card left in their deck of tricks, has to be played — and they’re about to do exactly that at some point in the not-to-distant future.

So we wait some more.

See you on Tuesday.

Ed