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What a Day!…The Powers-That-Be Were Everywhere on Friday

 -- Published: Sunday, 9 April 2017 | Print  | Disqus 

By Ed Steer

08 April 2017 — Saturday


The gold price was down about a dollar until the cruise missiles hit the ground in Syria, which was just a few minutes after 9 a.m. CST [China Standard Time] on their Friday morning.  The powers-that-be were waiting — and within an hour, had the price capped and heading low.  From noon onward in Shanghai, the price didn’t do much, but that all changed at 8:30 a.m. in New York.  The job numbers brought out the technical fund buyers in droves — and within five minutes, over 20,000 contracts traded — and the price was soon driven back to where it started before the job numbers were released.  The price chopped mostly sideways until JPMorgan et al began their engineered price decline around 12:50 p.m. EDT — and they had the price back to unchanged on the day by 2:15 p.m.  It rallied a bit until 3 p.m. in the after-hours market — and didn’t do a lot after that.

The low and high ticks in gold were recorded by the CME Group as $1,252.40 and $1,273.30 in the July contract, so you can see how effective ‘da boyz’ were in keeping a lid on the gold price on Friday.

Gold was closed in New York yesterday afternoon at $1,253.80 spot, up $2.20 from Thursday.  And with the 200-day moving average penetrated twice during the same trading session…once on the way up — and the other on the way down…net volume was past Jupiter at something north of 351,000 contracts.

And here’s the 5-minute tick chart for gold, courtesy of Brad Robertson.  There was big volume on the cruise missile news on Thursday evening Denver time on this chart, but it paled in comparison to the volume in New York…both during the COMEX trading session, and after the close as well.  The 20,000+ contract spike at the release of the job numbers was the stand-out feature.

The vertical gray line is 10:00 p.m. Denver time, midnight in New York — and noon China Standard Time [CST] the following day in Shanghai—and don’t forget to add two hours for EDT.  The ‘click to enlarge‘ feature is a must.

In the early going the price action in silver was very similar to gold’s.  Once the price was capped and turned lower, it traded flat from 11 a.m. CST until the noon silver fix in London.  It was sold down a bit into the job numbers — and its tiny rally at that juncture was also hammered flat.  Then at 12:50 p.m…just like in gold, JP Morgan et al dropped the hammer — and within thirty minutes or so,  had the silver price down by about 65 cents — and back below its 200-day moving average.  It recovered a nickel or so after that, but was still closed below $18 spot mark.

The high and low ticks in this precious metal were reported as $18.49 and $17.865 in the May contract.

Silver was closed on Friday in New York at $17.96 spot, down 28 cents from Thursday.  Net volume was an eye-popping 97,500 contracts, along with very chunky roll-over/switch volume out of May.

Here’s the 5-minute tick chart for silver — and it looks very similar to gold’s.  The only appreciable difference was that big volume spike came when silver was blasted lower — and below its 200-day moving average briefly, just before the COMEX close.

The vertical gray line is 10:00 p.m. Denver time, midnight in New York — and noon China Standard Time [CST] the following day in Shanghai—and don’t forget to add two hours for EDT.  The ‘click to enlarge‘ feature is a must as well.

The chart for platinum is almost a carbon copy of the one for silver…or gold…so take your pick.  The price spikes on the missiles and the jobs report both met the same fate from the powers-that-be.  The low tick was set at 2 p.m. in the after-hours market — and it gained back about five dollars of its losses between then and the 5 p.m. EDT close.  Platinum was closed lower by 4 bucks at $952 spot.

And the palladium chart was a mini version of the other three, so I’ll save you from the play-by-play — and let the chart do the talking.  They tried to close it below $800 spot, but didn’t quite make it, as it finished the day at $801 spot — and down 3 dollars from Thursday’s close.

The dollar index closed very late on Thursday afternoon at 100.73 — and it rallied a handful of basis points until the cruise missiles flew.  The 100.52 low tick was set a minute or so after 10 a.m. in Shanghai on their Friday morning — and it was obvious that the usual ‘gentle hands’ appeared.  It ‘rallied’ quietly from there until a vicious down/up spike on the job report — and then continued to crawl higher until precisely 2:00 p.m. EDT.  It sold off a bit from there — and finished the Friday session in New York at 101.12…up 39 basis points from Thursday’s close.

Here’s the 6-month U.S. dollar index chart — and I made the comment in Friday’s column that…”unless the usual ‘gentle hands’ put in a forceful appearance at some point in the very near future, this little rally appears to be in danger of rolling over, despite the fact that the 50-day moving average was broken.”

Well, guess what?

The gold stocks gapped up about 2 percent at the open, but began to head lower starting just before 10:30 a.m. in New York.  Of course they got hammered further [and back in to negative territory] on the engineered price decline, with the low tick of the day coming a minute or so after 2 p.m. EDT, which just happened to be the high tick for the dollar index as well.  They crawled higher — and back to unchanged — by 3:00 p.m. before trading quietly sideways into the close.  The HUI closed down 0.01 percent, so call it unchanged.

The silver stocks  gapped up about 1.5 percent at the open — and then chopped high until 10:30 a.m. EST.  They faded a bit from there, before getting hammered back into the red when JP Morgan et al appeared at 12:50 p.m. in New York.  The low tick of the day came a minute or so after the COMEX close, which was silver’s low tick of the day — and they rallied quietly back into positive territory from there, trading in the exact same pattern as gold for the rest of the Friday session.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index actually closed up 0.47 percent on the day, which was quite something…all things considered.  Click to enlarge if necessary.

And here are two charts from Nick that show what’s going on for the week, month — and year-to-date.  The first one shows the changes in gold, silver, platinum and palladium for the past week, in both percent and dollar and cents terms, as of their Friday’s closes in New York — along with the changes in the HUI and Silver Sentiment/Silver 7 Index.   The Click to Enlarge feature really helps on all three.

I won’t bother posting the month-to-date chart this week, as it’s the same as the weekly chart.

And here are the year-to-date changes.

The shares continue to underperform the underlying metals by a huge margin — and it’s now obvious that short selling of the precious metal equities is going on almost across the board.  How long it will continue is unknown, as is how high their respective prices will have to rise before the short-sellers begin to cover.

The CME Daily Delivery Report showed that 21 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.   There were five different short/issuers and five different long/stoppers — and with this number of contracts, nobody stood out from crowd by much.  The link to yesterday’s Issuers and Stoppers Report is here if you want to take a look.

The CME Preliminary Report for the Friday trading session showed that gold open interest in April declined by 148 contracts, leaving 1,810 left, minus the 21 mentioned in the previous paragraph.  Thursday’s Daily Delivery Report showed that 25 gold contracts were actually posted for delivery on Monday, so that means that 148-25=123 gold contracts disappeared from April without either making or taking delivery.  Silver o.i. in April fell by 112 contracts, leaving 153 left.  Thursday’s Daily Delivery Report showed that 118 contracts were actually posted for delivery on Monday, so that means that 118-112=6 more silver contracts were added to the April delivery month.  This is the third day in a row that silver contracts have been added to April.

April is turning into an interesting delivery month in its own right — and I know that Ted will have something to say about “all of the above” in his column today — and I’m certainly looking forward to reading it.

There were no reported changes in GLD yesterday — and as of 7:23 p.m. EDT yesterday evening, there were no reported changes in SLV, either.

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

Month-to-date, which only encompasses the last five business days, has been worse than awful.  So far in April, the mint has sold 2,500 troy ounces of gold eagles — 1,000 one-ounce 24K gold buffaloes — and 255,000 silver eagles.

There was very little activity in gold over at the COMEX-approved depositories on the U.S. east coast on Thursday.  Nothing was reported received — and only 3,022.100 troy ounces/94 kilobars [U.K./U.S. kilobar weight] were shipped out.  All of that activity was at Canada’s Scotiabank — and I shan’t bother linking it.

It was entirely different in silver, as it was another huge day.  They received 603,104 troy ounces — and shipped out 1,928,721 troy ounces.  Of the 603,104 troy ounces received, all of that went into JP Morgan’s vault and, like on Thursday, all of that came courtesy of Brink’s, Inc.  There were two containers…1,230,478 troy ounces shipped out of CNT as well.  Ted said that all this ‘out’ activity appears to be the same amount of silver that was transferred from Registered to Eligible in these two depositories earlier this week.  It will be interesting to see if the 1,230,478 troy ounces shipped out of CNT actually ends up at JP Morgan in the report on Monday.  There was also 90,278 troy ounces shipped out of Scotiabank — and 4,859 troy ounces was sent out of Delaware.  The link to all this action is here.

It was fairly quiet over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday.  They reported receiving 829 — and shipped out 331 of them.  All of this activity was at Brink’s, Inc. as per usual — and the link to that, in troy ounces, is here.

Here’s a chart that Nick Laird passed around on Thursday evening that I didn’t have room for in yesterday’s column.  I don’t really have room for it today, but I didn’t want to wait until next Tuesday’s column to post it, so here it is now.

It shows the amount of gold imported into China through Hong Kong, updated with February’s data.  In that month they imported 47.931 tonnes through H.K.  Now it may be entirely true that these imports are no longer a proxy for total Chinese gold demand, but it’s equally as obvious that they aren’t going to be stopping any time soon, as the black ‘cumulative’ line continues to move from lower left to upper right at a brisk pace as the years grind on.  Click to enlarge.

I must admit that I was shocked by the latest Commitment of Traders Report.  There was huge deterioration in the short positions in both metals, but silver in particular — and to a new record as well.

Ted’s worst fears for the report in silver were realized.  He had mentioned in his Wednesday missive, which I used as a quote in my Friday column, a 17,000 contract increase in silver’s total open interest during the reporting week — and considering how flat silver’s price had been during that period, he was hoping that they were spread trades.  Unfortunately, not all of them were.

In silver, the commercial net short position blew out by 10,579 contracts, or 52.9 million troy ounces of paper silver sold short. The commercial net short position in silver is now at a record high 112,346 contracts, or 561.7 million troy ounces of paper silver.

They arrived at this week’s 10,579 contract short position by reducing their long position by 488 contracts, but they also increased their short position by a chunky 10,091 contract…and all of those came courtesy of the traders in the Managed Money category.  The sum of those two numbers is the change for the reporting week.

Ted said that the Big 4 traders added around 2,700 contracts to their short positions during the reporting week — and he attributes every contract of that to JP Morgan.  And, with the new Bank Participation Report in hand, he pegs their short position at 33,000 COMEX contracts.  This is the number he would have used for JPM’s short position even if he didn’t have that Bank Participation Report to use, so his take on their short position has been pretty accurate all through March.  The Big ‘5 through 8’ traders added 2,100 contracts to their short positions — and Ted’s raptors, the 29 short-side commercial traders other than the Big 8, increased their short positions by about 5,800 contracts.

Under the hood in the Disaggregated COT Report, it was all the Managed Money traders — and then some, as they not only purchased 14,825 long contracts, but also added a surprising 2,921 short contracts as well.  The difference between those two numbers…11,904 contracts…was their change for the reporting week.  The approximately 1,400 contract difference between these Managed Money traders and the commercial net short position was, as always, made up by the traders in the Other Reportables and Nonreportable/small trader categories.

One of the things that Ted [and I] were looking at in the Disaggregated COT Report was what the Managed Money long traders did during the reporting week — and as I mentioned in the previous paragraph, they increased that position by 14,825 contracts.  The gross Managed Money long position now sits at an eye-watering 107,825 contracts, which is at, or close to, a new record high as well.  But how many of these positions, above Ted’s core position of around 80,000 contracts, would be liquidated on an engineered price decline remains to be seen.  The long positions of the other two trading categories barely changed during the reporting week.

Here is the 9-year COT chart for silver, so you can put today’s record in a longer-term context.  Ted was concerned/alarmed by this huge record short position at such a low silver price — and how dangerous it had become for all parties, particularly the Big 7 traders on the short side.  By the fact that JPMorgan has about 600 million troy ounces of physical silver stashed away, they’re immune in a short covering rally, but not the other Big 7 traders in the commercial category, which now includes the other 29 small commercial traders as well.  Everyone in the commercial category got the message to go short during the reporting week — and they did in droves.  Click to enlarge.

In gold, the commercial net short position increased by a very healthy 18,902 contracts, or 1.89 million troy ounces of paper gold.  The commercial net short position in gold is now up to 17.1 million troy ounces, which is still in bullish territory, but not as bullish as several weeks ago and, like silver, would be vulnerable to a JP Morgan-led engineered price decline.

They arrived at their 18,902 contract change by decreasing their long position by 8,645 contracts, plus they added 10,257 short contracts — and virtually all of that change came courtesy of the traders in the Managed Money category like it did for silver.

Ted said that the Big 4 traders added around 2,800 contracts to their short position — and the Big ‘5 through 8’ traders added about 6,800 short-side contracts.  Ted’s raptors, the 44 smaller short-side commercial traders, did the heavy lifting by selling approximately 9,300 contracts of their long position.

Under the hood in the Disaggregated COT Report, it was as I said just above, almost entirely a Managed Money show on the other side, as they bought 12,549 long positions — and they also reduced their short position by 5,534 contracts…for a total weekly change of 18,083 contracts.  The approximately 900 contract difference between these Managed Money traders and the commercial net short position was, like with silver, made up the traders in the other two categories.

Here is the 9-year COT chart for gold — and as you can tell, we’re nowhere near bearish territory but, as Ted has pointed out, vulnerable to a  sell-off if the powers-that-be wish it to be so.  Click to enlarge.

In all respects, the gold COT Report is ‘plain vanilla’ compared to the wildly dangerous and record extremes found in the COT Report for silver.  I will certainly be looking forward to reading Ted’s take on all this in his weekly review later this afternoon — and his comments should be considered the final word on these matters.

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 ‘5 through 8’ traders in each physically traded commodity on the COMEX.  These are the same Big 4 and ‘5 through 8’ traders discussed in the COT Report above.  Click to enlarge.

For the current reporting week, the Big 4 are short 161 days of world silver production—and the ‘5 through 8’ traders are short an additional 55 days of world silver production—for a total of 216 days, which is a bit over seven months of world silver production, or about 524.8 million troy ounces of paper silver held short by the Big 8.  [In last week’s report the Big 8 were short 206 days of world silver production.]

In the COT Report above, the Commercial net short position in silver is 561.7 million troy ounces.  So, for the moment, the commercial net short position in silver is larger than the short position of the Big 8 traders by 561.7 – 524.8 = 36.9 million troy ounces.

As also stated in the above COT Report, Ted pegs JP Morgan’s short position at around 33,000 contracts, or 165 million ounces, which is up from the 30,000 contracts/150 million ounces they were net short a week ago.  165 million ounces works out to around 68 days of world silver production that JP Morgan is short.  That’s compared to the 216 days that the Big 8 are short in total.

The approximate short position in silver held by Scotiabank works out to around 53 days of world silver production.  So, for the moment, JPMorgan is the biggest silver short in the COMEX futures market.

The two largest silver shorts on Planet Earth—JP Morgan and Canada’s Scotiabank—are short about 121 days of world silver production between the two of them—and that 121 days represents 75 percent of the length of the red bar in silver in the above chart…three quarters of it.  The other two traders in the Big 4 category are short, on average, about 20 days of world silver production apiece.  The four traders in the ‘5 through 8’ category are short, on average, a bit under 14 days of world silver production each.

The short positions of Scotiabank and JP Morgan combined, represents about 56 percent of the short position held by all the Big 8 traders combined.  How’s that for a concentrated short position within a concentrated short position?

The Big 8 are short 47.9 percent of the entire open interest in silver in the COMEX futures market and that number would be close to 55 percent once the market-neutral spread trades are subtracted out.  In gold it’s now up to 41.2 percent of the total open interest that the Big 8 are short.

In gold, the Big 4 are short 43 days of world gold production, up from 42 days last week — and the ‘5 through 8’ are short another 20 days of world production, which is up from 17 days from the prior week, for a total of 63 days of world gold production held short by the Big 8.  Based on these numbers, the Big 4 in gold hold about 68 percent of the total short position held by the Big 8.

The “concentrated short positions within a concentrated short position” in silver, platinum and palladium held by the Big 4 are about 74, 72 and 65 percent respectively of the short positions held by the Big 8.  These numbers are mostly unchanged from last week.

The April Bank Participation Report [BPR] data is extracted directly from the above Commitment of Traders 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 70,869 COMEX contracts in the March BPR.  In March’s Bank Participation Report [BPR], that number was 54,899 contracts, so they’ve increased their collective short positions by a fairly decent 15,970 contracts during the last month.  Three of the five banks would certainly include JPMorgan, HSBC USA and Citigroup.  As for who the fourth and fifth banks might be—I haven’t a clue, but I doubt very much if their positions, long or short, would be material.

Also in gold, 32 non-U.S. banks are net short 60,659 COMEX gold contracts, which isn’t much per bank.  In the March BPR, 31 non-U.S. banks were net short 48,559 COMEX contracts, so the month-over-month change showed an increase of 12,100 contracts.  And it’s still a mystery as to which non-U.S. bank in the Big ‘5 through 8’ category got bailed out of their huge short position in gold in July of last year.  I’m suspecting it could be Canada’s Scotiabank, but I could be wrong about that.

As of this Bank Participation Report, 37 banks are net short 30.8 percent of the entire open interest in gold in the COMEX futures market, which is a fairly large increase from the 23.8 percent they were short in the March 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.

In silver, 5 U.S. banks are net short 35,761 COMEX silver contracts—and it was Ted’s calculation from yesterday that JPMorgan holds around 33,000 of those silver contracts net short on its own — which is over 90 percent of the entire net short position shown in this month’s BPR.  This means that the remaining 4 U.S. banks aren’t net short by much — and a couple of them might actually be net long.  In March’s BPR, the net short position of these five U.S. banks was 31,830 contracts, so there’s been an increase of 3,931 contracts in the net short positions of the U.S. banks since then — and JPMorgan probably owns all of that increase.  As Ted says, JPMorgan is the ‘Big Kahuna’ in silver as far as the U.S. banking system is concerned.  No kidding!

Also in silver, 21 non-U.S. banks are net short 39,248 COMEX contracts—and that’s up 2,942 contracts from the 36,306 contracts that these same non-U.S. banks held short in the March BPR.  I’m still prepared to bet big money that Canada’s Scotiabank is the proud owner of the lion’s share of this short position—somewhere between 65 and 75 percent of the above number.  That most likely means that a number of the remaining 19 non-U.S. banks might actually be net long the COMEX silver market by a bit as well.  But even if they aren’t, the remaining short positions divided up between these remaining 20 non-U.S. banks, are immaterial — and have always been so.

As of this Bank Participation Report, 26 banks are net short 34.2 percent of the entire open interest in the COMEX futures market in silver—which is down a bit from the 35.4 percent that they were net short in the March BPR — with much more than the lion’s share of that held by only two banks…Canada’s Scotiabank and JP Morgan.

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, 4 U.S. banks are net short 10,769 COMEX contracts in the April Bank Participation Report.  In the March BPR, these same banks were short 14,119 COMEX platinum contracts, so there’s been a drop of  in the U.S. banks’ short position of 3,350 contracts from the prior month.

I suspect that, like in silver and palladium, JP Morgan holds virtually all of the platinum short position of the 4 U.S. banks in question.

Also in platinum, 16 non-U.S. banks are net short 8,136 COMEX contracts, which is down 794 contracts from the 8,930 contracts they were net short in the March BPR.  Their short positions are most likely immaterial compared to the short positions held by the 5 U.S. banks…or, more likely, 1 or 2 U.S. banks.

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 large 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 15 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 possibly involved.  Scotiabank perhaps.

And as of April’s Bank Participation Report, 20 banks are net short 29.7 percent of the entire open interest in platinum in the COMEX futures market, which is down from the 33.8 percent they were collectively net short in the March BPR.  Click to enlarge.

In palladium, 4 U.S. banks were net short 6,944 COMEX contracts in the March BPR, which is up 222 contracts from the 6,722 contracts they held net short in the March BPR.

Also in palladium, 14 non-U.S. banks are net short 5,450 COMEX contracts—which is an increase of 1,586 contracts from the 3,864 COMEX contracts that these same banks were short in the March BPR.  When you divide up the short positions of the non-U.S. banks more or less equally, they’re mostly immaterial, just like they are in platinum.

But, having said all that, as of this Bank Participation Report, 18 banks are net short 36.6 percent of the entire COMEX open interest in palladium.  In March’s BPR, the world’s banks were net short 37.8 percent.

Here’s the palladium BPR chart.  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 their footprint is much smaller now.  However, I would still be prepared to bet big money that, like platinum and silver, JP Morgan holds the vast majority of the U.S. banks’ short position in this precious metal as well.  Click to enlarge.

As I say every month at this time, there’s a maximum of three U.S. banks—JPMorgan, HSBC USA and Citigroup—along with Canada’s Scotiabank—that are the tallest hogs at the precious metal price management trough.

However, it’s also a fact that one of the non-U.S. banks in the Big ‘5 through 8’ category got bailed out of its COMEX short position in gold in July of last year.

But JP Morgan and Canada’s Scotiabank still remain the two largest silver short holders on Planet Earth in the COMEX futures market, with JP Morgan momentarily in the #1 spot.  I would suspect that might apply to gold as well, although it may not in the case of Scotiabank, if the non-U.S. bank that got bailed out in July turns out to be them.  The jury, as I said further up, is still out on that one.

I have an average number of stories for you today, including several that I’ve been saving for the ‘weekend edition’.


March Payrolls Crumble: Only 98,000 Jobs Added Despite Slide in Unemployment Rate

And so the reflation trade is dead once again.

So much for that blockbuster ADP report. As we cautioned previously in our payrolls preview, the big risk to today’s payrolls report was to the downside, mostly as a result of the unseasonably cold March weather, and moments ago the BLS confirmed that indeed something snapped in March when only 98K jobs were added, roughly half of the 180K expected. This was the lowest monthly jobs number since May of 2016.

Worse, both prior months were revised lower. The change in total non-farm payroll employment for January was revised down from +238,000 to +216,000, and the  change for February was revised down from +235,000 to +219,000. With these revisions, employment gains in January  and February combined were 38,000 less than previously reported.

There were no changes to the participation rate, which remained at 63% with the number of people not in the labor force barely changed at 94,213 million.

This 5-chart Zero Hedge item appeared on their website at 8:35 a.m. on Friday morning EDT — and it comes to us courtesy of Brad Robertson.  Another link to it is here.

U.S. Credit Card Debt Rises Above $1 Trillion For the First Time in a Decade

Unlike last month’s unexpectedly week consumer credit report, which saw a plunge in revolving, or credit card, debt moments ago the Fed, in its latest G.19 release, announced that there were few surprises in the February report: Total revolving credit rose by $2.9 billion, undoing last month’s $2.6 billion drop – the biggest since 2012 – while non-revolving credit increased by $12.3 billion, for a total increase in February consumer credit of $15.2 billion, roughly in line with the $15 billion expected.

However, while in general the data was uneventful, there was one notable milestone: in February, following modest prior revisions, total revolving/credit card debt, has once again risen above the “nice round number” of $1 trillion for the first time since January 2007…where it now joins both auto ($1.1 trillion) and student ($1.4 trillion) loans.

This short Zero Hedge story, also courtesy of Brad Robertson, was posted on their website at 3:16 p.m. EDT on Friday afternoon — and another link to it is here.

Atlanta Fed Slashes Q1 GDP to Just 0.6%, Lowest in Three Years

Remember when the Fed was “data dependent“? Well, if the Atlanta Fed is right, Janet Yellen will have hiked the Fed’s interest rate in a quarter in which GDP has grown by a paltry 0.6%, down from 1.2% as of its latest estimate. If confirmed, this would be the lowest quarterly GDP growth in three years, since Q1 of 2014.

Incidentally, just over two months ago, the same forecast stood at 3.4%, it has since fallen by over 80%.

From the source:

The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2017 is 0.6 percent on April 7, down from 1.2 percent on April 4. The forecast for first-quarter real GDP growth fell 0.4 percentage points after the light vehicle sales release from the U.S. Bureau of Economic Analysis and the ISM Non-Manufacturing Report On Business from the Institute for Supply Management on Wednesday and 0.2 percentage points after the employment release from the U.S. Bureau of Labor Statistics and the wholesale trade release from the U.S. Census Bureau this morning. Since April 4, the forecasts for first-quarter real consumer spending growth and real nonresidential equipment investment growth have fallen from 1.2 percent and 9.7 percent to 0.6 percent and 5.6 percent, respectively.

And now back to those “animal spirited” soft surveys which have also been sliding in the past few months.

This brief 1-chart Zero Hedge commentary put in an appearance on their Internet site at 11:41 a.m. EDT on Friday morning — and I thank Richard Saler for sending it along.  Another link to it is here.

Marc Faber: Co-ordinating Central Bankers Desperate to Keep Colossal Global Debt Bubble Inflated

Jason Burack of Wall St for Main St interviewed returning guest, Editor & Publisher of the Gloom Boom & Doom Report, Dr. Marc Faber.

This 33:39 minute audio interview showed up on the Internet site on Thursday sometime — and I thank Ken Hurt for pointing it out.

Stupid is, as stupid does — The Burning Platform

If you prefer fake news, fake data, and a fake narrative about an improving economy and stock market headed to 30,000, don’t read this fact based, reality check article. The level of stupidity engulfing the country has reached epic proportions, as the mainstream fake news networks flog bullshit Russian conspiracy stories, knowing at least 50% of the non-thinking iGadget distracted public believes anything they hear on the boob tube.

This stupendous degree of utter stupidity goes to a new level of idiocy when it comes to the stock market. The rigged fleecing machine known as Wall Street has gone into hyper-drive since futures dropped by 700 points on the night of Trump’s election. An already extremely overvalued market, as measured by every historically accurate valuation metric, soared by 4,000 points from that futures low – over 20% – to an all-time high. Despite dozens of warning signs and the experience of two 40% to 50% crashes in the last fifteen years, lemming like investors are confident the future is so bright they gotta wear shades.

The current bull market is the 2nd longest in history at 8 years. In March of 2009, the S&P 500 bottomed at a fitting level for Wall Street of 666. In a shocking coincidence, it bottomed on the same day Bernanke & Geithner forced the FASB to rollover like mangy dogs and stop enforcing mark to market accounting. Amazingly, when Wall Street banks, along with Fannie and Freddie, could value their toxic assets at whatever they chose, profits surged. The market is now 240% higher.

You have the second longest bull market in history, while stock market valuations, as measured by the Shiller PE ratio and every other historically accurate valuation method, are higher than 1929 and 2007, but the Wall Street hype machine and the business network shills adamantly declare this bull has years to go and thousands of points of upside. Greybeards who haven’t been captured by the Wall Street machine honestly point out the market will deliver 0% returns over the next ten years at these valuations.

You would think the PE ratio of the market rising to historic highs must be due to corporate profits continuing to rise and making investors confident about the future. The narrative being flogged by the fake news networks is a strong economy and surging corporate profits are the reason for all-time high stock prices. The narrative is fake news, as corporate profits have been stagnant for the last five years, as the market has advanced by 70%.

This long, but worthwhile commentary, was posted on Internet site on Tuesday — and for length reasons, had to wait for my Saturday column.  My thanks go out to Jim Rodgers for sharing it with us — and another link to it is here.

Jim Rickards: The Financial System Will Go Dark When the Economic System Fails

This long 50:28 minute audio interview was posted on the Internet site on Tuesday — and I would guess that it’s pretty much the same message he’s been passing around for the last few months.  I haven’t listed to it yet, but expect I will sometime this weekend.  I thank Harold Jacobsen for sending it our way.

Italy’s Target2 Deficit Hits Fresh All Time High, Above 25% of Italian GDP

This morning, the Bank of Italy reported that Italy’s Target 2 deficit rose to new highs in March at €420bn, from €386bn in February. As a way of comparison, during the peak of the EU Sovereign crisis in 2012 crisis, Italy’s liabilities stood at Eur 290bn.

As Francesco Filia of Fasanara Capital notes, while we are told that record T2 balances are pure accounting values and should be viewed as a benign by-product of the decentralized implementation of the asset purchase program (APP) rather than renewed capital flight, and while Draghi refers to them as a form of solidarity within the European system, in a letter to Italian EU politicians Draghi also maintained that such debts should be settled in full should Italy decide to leave the euro. So, the number matters and represents a liability.

Target II liabilities are now above 25% of GDP In Italy (from 22% in January), and above 30% of GDP in Spain.

This short Zero Hedge piece was posted on their website at 11:27 a.m. on Friday morning EDT — and it’s another contribution from Richard Saler.  Another link to it is here.

Marine Le Pen and Nigel Farage join chorus of Trump Critics

Marine Le Pen has proved herself to be a woman of principle. It looks increasingly likely that Le Pen may shortly become the next President of France and in that capacity she would ideally want a good relationship with Donald Trump. She has said so.

But Le Pen who has consistently supported the democratic freedoms of the people in Crimea, Sevastopol, Donetsk and Lugansk has now come out to condemn Donald Trump’s illegal and aggressive missile launch on Syria.

Le Pen has said,

I am a little bit surprised because Mr Trump has said on numerous occasions that the U.S. would no longer be policing the world, and yet, that is exactly what he is doing right now.

Is it too much to ask that we wait for the chemical weapons attack inquiry findings before launching such airstrikes?

It obviously was, dear reader.  This commentary showed up on Internet site on Friday — and another link to it is here.  The link to Nigel’s statements is headlined “Nigel Farage SLAMS Donald Trump over Syria“.  It’s from the website as well — and both items are courtesy of Roy Stephens.

“Trump-Russia-intelligence” story in the New Cold War — John Batchelor interviews Stephen F. Cohen

Although the greatest domestic political crisis in American history continues to capture the attention of Batchelor and Cohen this week, serious international events now intrude. The headlines include the Senate Intelligent Committee Hearings stated intention to interview Obama’s National Security Advisor, Susan Rice over possible surveillance of President Trump, the sarin gas attack in Syria, NATO’s increasing unease with Turkey’s President, Erdogan’s increasing consolidation of despotic power, and finally the death of the Russian poet and dissident, Yevgeny Yevtushenko. Cohen speaks about this poet at great length and great reverence and describes how Russians honour this poet and all its poets and their significance in the history of Russia.

This discussion moves into what it was like to resist the government under the Soviet system and Cohen describes how this moderated over time. Under Stalin, for example, ten million died; under Khrushchev the Terror ended but for the Russian people was still very repressive. Among dissidents there were stages of dissidence that resulted in a known measured response from the state. This all ended, of course, with Gorbachev, General Secretary (then leader designate) who encouraged a kind of freedom of speech. All of this (explained by Cohen in greater detail) led up to Cohen’s very big question about what it is about how Americans who have free speech are now so complacent about seeing their political institutions destroyed over government opposition to a legally elected president, and how those same rights to speak freely are in threat? This is a wonderful question that should prompt a great deal of discussion but has not…

At this point Stephen Cohen introduced a second major narrative in this debacle. The first, of course, is all the hoopla surrounding the Clinton charges that Trump was a Putin stooge. The second major narrative came from Trump with his accusation that Obama and agents of the government had him under surveillance. This appears to have some validity now and is building as a scandal. But as a sad reprieve to this development comes the St. Petersburg subway bombing – and Trump, to his credit, talked to Putin giving official condolences. The fact of this area of history is revealed that Russia has lost more people to terrorist attacks than 911. Cohen states that this sad fact is something (that officially) both countries share as injury – a common one. And to add insult to this St Petersburg wounding is the American mainstream press once more accusing” “Putin did it (to himself)”, in other words, a false flag attack. This accusation is as shameless as it is ludicrous. There was also an allegation that the bombing was “blow back” for his activities in Syria. Cohen is amazed that Americans are so unimaginative to swallow this kind of propaganda and NOT consider that subway bombings could happen to Americans in their own country. I also wonder how difficult it would be to smuggle in sarin gas for use against Americans in their own country. ISIS apparently has a warehouse of the stuff…

The last segment deals with the sarin gas attack in Syria. Cohen notes (conservatively) that although Assad may have been responsible, it is very suspicious timing. The attack occurred as both Russia and the Americans are about to attack the ISIS capital, Raqqa, in a cooperative venture, and now this is thrown somewhat into doubt. Cohen notes that after the attack the immediate response was to blame the Assad regime, and also acknowledges that the enemies of Trump (read the Pentagon/CIA, adversaries as a possibility) may be behind the attack to prevent any kind of détente cooperation between the two powers. Personally I think something along these lines is likely, as there is no military gain involved for Assad to have done this – however, significantly it may have created a breach in cooperation with the military operation to take Raqqa that favours (once again like the earlier gas attack at the beginning of the war) ISIS. I have yet to see any photos of ISIS casualties or any mention of them in any published reports. Trump will now come under pressure, having said earlier that removing Assad is not a policy goal any longer, to reverse that stance. That would both drive a wedge between Russia and the US forces – which are now more substantial in Syria – and raise the war risks between the two powers should the US turn on the Syrian army. It is reasonable to assume that some anti-Trump elements have seen this as a possibility, or at least as a means to keep the war alive and the destruction of Syria in play.

This 40-minute audio interview was posted on the Internet site — along with the excellent ‘executive summary’…courtesy of Larry Galearis…were obviously done before the U.S. cruise missile attack on Syria.  So, in some ways, this is already yesterday’s news as well, because the whole dynamic is totally different now.  Another link to the audio interview is here.

Tensions rise as Russia reinforces Syrian air defences and warns of ‘considerable damage’ to ties with U.S. after missile strike

Russia has diverted a warship to protect the Syrian coast and vowed to bolster Bashar al-Assad’s missile defences against more U.S. strikes, risking a confrontation between the former Cold World foes.

The Admiral Grigorevich, a cruise missile-carrying frigate, passed through the Bosporus en-route to Russia’s Syrian navy base at Tartus on Friday.  The Grigorevich, which carries Moscow’s state-of-the-art Kalibr cruise missiles, was taking part in joint exercises in the Black Sea with the Turkish navy when it was ordered to turn around.

Dmitry Peskov, a Kremlin spokesman, said President Trump’s decision to directly target the Syrian regime inflicted further “considerable damage” to ties between Moscow and Washington.

This step by Washington inflicts considerable damage to U.S.-Russia relations, which are already in a lamentable state,” he said.

Mr Peskov said Mr Putin, a staunch ally of the Syrian leader, regarded the US action as “aggression against a sovereign nation” on a “made-up pretext” and a cynical attempt to distract the world from civilian deaths in Iraq.

This news item, filed from Beirut, was posted on the Internet site at 9:05 a.m. BST on their Friday morning, which was 4:05 a.m. in Washington — EDT plus 5 hours.  I thank Roy Stephens for this one — and another link to it is here.  There was also a Zero Hedge piece about this as well.  It’s headlined “Russia To Upgrade Syria Air Defenses, Suspends Airspace Pact With U.S.” — and comes courtesy of Richard Saler.

Poodle Trump Runs With Dogs of War — Finian Cunningham

The Deep State establishment – or the War Party comprising both Republicans and Democrats in hock to the military-intelligence apparatus – thought they would get their way with the election of warmonger Hillary Clinton last November. Alas, the surprise election of Trump to the presidency temporarily upset their militarist agenda.

But the advent of Trump to the White House was only a hitch for the powers-that-be. The relentless Deep State-driven media witch-hunt against Trump over ridiculous allegations of being a Russian puppet has evidently prevailed.

Trump, the self-declared “outsider” has been forced to prove that he is an “insider”, an obedient poodle to the American war Rottweiler – if he wants to stay in office and see out the next four years without being impeached.

In order to survive the pressure over “Russian stooge” allegations, Trump is throwing some meat to the U.S. War Party by giving them their long-sought-after direct military intervention in Syria.

Trump’s order to blast Syria with 59 cruise missiles is a brazen act of war that makes a mockery of international law. Russia and some other independent nations have denounced the US “act of aggression against a sovereign state”.

That pretty much sums it up.  This commentary/opinion piece by Finian was posted on the Internet site at 8:04 p.m. Moscow time on their Friday evening, which was 1:04 p.m. in Washington — EDT plus 7 hours.  I thank Roy Stephens for sending it along — and another link to it is here.

Doug Casey on the Coming Holy War

Today, we have another brand-new Conversations with Casey to share with you. In the interview below, Doug Casey and I discuss holy wars in Europe.

I’m not talking about the Crusades, either. I’m talking about a modern-day holy war.

Some folks will think I’m crazy for even entertaining this idea. But a few weeks ago, Turkey’s foreign minister said that “wars of religion” are coming to Europe.

That’s a major warning. You have to take it seriously.

So, I recently sat down with Doug to discuss this matter. I hope you enjoy this conversation as much as I did.

Never a shrinking violet at any time, Doug certainly doesn’t hold back here.  This interview appeared on the Internet site on Thursday — and it’s certainly worth reading.  I thank Kathmandu reader Nitin Agrawal for bringing it to our attention — and another link to it is here.

Antarctic Ice Reveals Earth’s Accelerating Plant Growth

For decades, scientists have been trying to figure out what all the carbon dioxide we’ve been putting into the atmosphere has been doing to plants. It turns out that the best place to find an answer is where no plants can survive: the icy wastes of Antarctica.

As ice forms in Antarctica, it traps air bubbles. For thousands of years, they have preserved samples of the atmosphere. The levels of one chemical in that mix reveal the global growth of plants at any point in that history.

It’s the whole Earth — it’s every plant,” said J. Elliott Campbell of the University of California, Merced.

Analyzing the ice, Dr. Campbell and his colleagues have discovered that in the past century, plants have been growing at a rate far faster than at any other time in the past 54,000 years. Writing in the journal Nature, they report that plants are converting 31 percent more carbon dioxide into organic matter than they were before the Industrial Revolution.

This short, but very interesting essay showed up on The New York Times website on Wednesday — and it’s another item that had to wait for my weekend missive.  I thank Patricia Caulfield for pointing it out — and another link to it is here.

B.C. Filmmaker Frolics With Sea Lions In Adorable Video

For underwater filmmaker Russell Clark, a workplace hazard is an overly friendly sea lion that wants to nibble on him while he’s trying to finish a shoot. Yeah, it sounds really rough.

There’s no shyness. There’s no getting to know you. They’re just curious and they just want to know what you are. You know, are you soft and squishy? Do you want to have a good play with them?” Clark said, in an interview with The Huffington Post Canada.

They’re just like … they’re like puppy dogs. They’re like a herd of 2,000-pound puppy dogs that just run over to you and then jump all over you.

This 5:03 minute video clip appeared on the website back on March 28.  It was supposed to be in last Saturday’s column, but I just ran out of space and time.  It’s the first video clip after the infomerical at the beginning — and I thank Roy Stephens for sharing it with us — and FULL SCREEN viewing is a must!  Another link to it is here.

Chris Powell: Why invest in gold miners if they won’t defend themselves?

Remarks by Chris Powell
Secretary/Treasurer, Gold Anti-Trust Action Committee Inc.

Mining Investment Asia Conference, Singapore
Thursday, March 30, 2017

Mines and Money Asia Conference, Hong Kong
Friday, April 7, 2017

Since we gathered here a year ago, gold and silver market manipulation has burst into the open and become undeniable. Even some mainstream financial news organizations have had to report it, if begrudgingly and only briefly. But the gold and silver mining industry itself keeps running away from it.

Fortunately, this conference allows it to be discussed anyway.

The biggest development in gold and silver market manipulation in the last year has been Deutsche Bank’s admission that its traders conspired with traders from other big investment banks to suppress gold and silver futures prices. This admission by Deutsche Bank came as part of its response to class-action antitrust lawsuits brought against it and its co-conspirators in U.S. District Court in New York. Deutsche Bank has provided the plaintiffs with transcripts of electronic messages between the traders showing them coordinating their trades to smash gold and silver prices down. The bank has agreed to pay nearly $100 million to the plaintiffs to settle the cases. The bank also has agreed to provide more evidence against the other conspiring banks.

I must admit that I haven’t had the time to read this as of yet.  Chris slid it into my in-box just before midnight Denver time on Thursday — and I was ‘pedal to the metal’ with my Friday column at that moment, so it, like a few others posted above, will have to wait its turn this weekend.  Another link to it is here.


Today’s critter is a sturgeon, of which there are 22 different species — and they are hold-overs from the Triassic era…245-208 million years ago.  They’re living fossils…like alligators or crocodiles.  As you can tell, they can grow quite large — and the big ones are well over 1,000 kilograms/2,200 pounds and in the 6 meter/21 foot length range.  The click to enlarge feature only helps on the two photos.


Today’s pop ‘blast from the past’ is more country than pop, but that’s OK by me.  In most ways, this Canadian artist was a ‘one-big hit wonder’ — and I suppose that’s true to a certain extent…but what a hit it was back in 1979.  I’ve posted it before, but it’s been years.  The link is here.

Today’s classical ‘blast from the past’ is another one that I’ve posted before, but it was years ago as well.  It’s been called the “great fall upwards” — and for good reason.  It’s Beethoven’s Violin Concerto in D major, Op. 61 which he composed 1806.

Its first performance by Franz Clement was unsuccessful — and for some decades the work languished in obscurity, until revived in 1844 by Joseph Joachim. Since then it has become one of the best-known violin concertos.

It’s certainly #1 on my list of violin concertos — and here’s the incomparable Itzhak Perlman doing the honours, with the equally incomparable Daniel Barenboim as conductor.  The recording is from 1986…but that matters not.  The link is here.

Let me make it easy for those who refuse to acknowledge the silver manipulation. Simply explain why 8 traders, mostly domestic and foreign banks, would hold short the equivalent of 40% of the world’s annual production—and a third of all the silver bullion that exists—at prices below the average primary cost of production and nearly 70% below the price levels of four years ago.

How could such a concentrated short position be explained in legitimate terms — and what would be its purpose? What effect would such a large short position have on the price of any commodity — and how do you see it being resolved if it wasn’t permanent?

I don’t expect any serious answers to such questions, as it appears to be easier to malign the questioner as a conspiracy theorist instead, but I know these questions have never been addressed in a straightforward manner by anyone who denies the silver manipulation.Silver analyst Ted Butler: 07 February 2015

I posted the above quote in my Thursday column as well.  But after Friday’s COT Report — and yesterday’s price action, I thought it worth repeating.

It was a wild one yesterday.  The powers-that-be were obviously already at battle stations before the first cruise missile hit the ground in Syria early on their Friday morning.  And they didn’t stop there, as they had the job numbers at 8:30 a.m. in New York to deal with during the same business day — and they crushed those rallies with ruthless abandon as well.

But then came the engineered price declines in the last hour of trading before the COMEX close, with the one in silver being the stand-out of them all.  The possibility certainly existed [and I’m speculating here] that a large short holder in silver…one of the ‘5 through 8’ traders, or one of the smaller of the Big 4 traders was going to have a margin call issue if silver closed at its current price at the time.  So a decision was made to do the dirty — and the results speak for themselves.  It was so blatant and in-your-face, that there had to be a reason for it.

Ted mentioned the fact that the sell-off in silver probably had more volume attached to it once the price was broken below its 200-day moving average — and I’m certainly not about to dispute that.  He figures that from a COMEX futures position perspective, it might have been a wash for silver on Friday, which may have been the whole premise behind that huge sell-off just before the COMEX close.

And he also pointed out that the sell-off in gold wasn’t anywhere near enough to negate the huge long positions placed by the Managed Money traders on Friday — and he mentioned in passing a 30-40,000 contract deterioration in the commercial net short position in gold yesterday after all was said and done.  I’ll certainly be interested in his thoughts on this now that he’s had a chance to “sleep on it” as he likes to say.

Here are the 6-month charts for all four precious metals, plus copper, showing the price activity up to and including the COMEX close yesterday.  And because the low ticks for gold, platinum and palladium didn’t occur until after the that close, they don’t show up on the charts.

Not only were the Plunge Protection Team working over the precious metals, they were actively involved in the stock market and the currencies — and anything else they though worth propping up.

It’s a mess out there — and I’m not just talking about what’s happening in the precious metals in general, or the COMEX silver market in particular.

This Syria thingy isn’t about to go away anytime soon — and I’m fearful of where it will lead.  The only cool heads out there are Putin and Lavrov & Co.  The U.S. Deep State/War Machine are the rabid pit bulls of the world right now — and as I said in yesterday’s column, if you aren’t terrified of where this may end up, you obviously don’t understand the seriousness of the situation.

I must admit that Trump has been a huge disappointment — and it’s obvious from from the Le Pen and Farage comments, that many people feel the same way…including a large swath of those that supported Trump and voted for him.  He hasn’t been in office for even close to his first 100 days — and he already appears to be Deep State road kill, with four more years still left in his presidency.  It ain’t looking good.

My comments about a current passport and money and precious metals outside your country of residence…particularly the fine folks who live in the U.S.A…still stands.  And if you’re in a position to pull up stakes at any time, what are you waiting for?

How did it come to this?

See you on Tuesday.



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