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Ted Butler: Eight Crooks Against the World

 -- Published: Sunday, 10 September 2017 | Print  | Disqus 

09 September 2017 -- Saturday


The gold price began to chop quietly higher starting around 9:30 a.m. China Standard Time on their Friday morning, as the dollar index headed south.  That rally ran into 'da boyz' about 1:30 p.m. CST on ferocious volume.  And although it rallied a bit between the morning gold fix and the noon silver fix in London, it was sold lower until a minute or so before the London close, which was 11 a.m. EDT.  It then rallied a few dollars until noon in New York -- and then traded pretty flat for the rest of the day.

The high and low ticks are barely worth looking up, but were reported as $1,362.40 and $1,347.10 in the December contract...and $1,358.50 and $1,343.20 in October.

Gold was closed in New York on Friday at $1,346.00 spot, down $2.60 from Thursday.  Net volume was over the moon once again at around 353,000 contracts, as 'da boyz' were all over the precious metal market yesterday.

 The silver price was forced to follow a similar path as gold -- and JPMorgan et al were careful to close it back below $18 spot in the thinly-traded after hours market.

The high and low ticks in this precious metal were reported by the CME Group as $18.29 and $17.965 in the December contract.

Silver was closed at $17.93 spot -- and down 16.5 cents from Thursday.  Net volume was pretty heavy as usual, at a bit over 80,000 contracts.

Platinum also got the same treatment as silver and gold.  At its 1:30 p.m. CST high tick on their Friday morning, it was up 6 bucks, but 'da boyz' began to take care of business shortly before the COMEX open -- and by the Zurich close, had sold it down for a loss on the day.  Platinum finished the Friday session at $1,007 spot, down 9 dollars from Thursday.

Palladium was up 10 bucks by 1 p.m. China Standard Time, but JPMorgan et al showed little mercy from that point onward -- and at its New York low they had it down 21 dollars on the day.  It recovered a few dollars after that, but was closed on its low tick in the thinly-traded after-hours market...down 21 bucks at $930 spot.  Ain't free markets grand?

The dollar index closed very late on Thursday afternoon in New York at 91.53 -- and then really didn't do a lot until around 9:30 a.m. China Standard Time on their Friday morning.  At that juncture it began to head south with a vengeance -- and I suspect that it was 'saved' by the usual gentle hands at the 91.01 mark about 1:25 p.m. CST.  It wandered unsteadily higher from there until a minute or so before London closed for the weekend...11 a.m. EDT...and then sold off a small handful of basis points until noon in New York, before trading sideways for the rest of the Friday session.  The index finished the day at 91.32 -- down 21 basis points from Thursday's close.

The dollar index is down a stunning 1,200 basis points since the start of 2017.  The gold price [along with a lot of other commodities] should be at a new record high price by now, but it isn't.  As I've stated on numerous occasions, this is a controlled devaluation in the U.S. dollar -- and JPMorgan et al have been sitting on precious metal prices almost all the way down.

Here's the 5-year dollar index -- and 80 on that chart would be a slam-dunk in no time, if only the 'gentle hands' would get out of the way.

The gold shares opened unchanged, but began to head south immediately.  Their respective lows came around 2:35 p.m. in New York trading -- and they managed a bit of a rally into the close after that.  The HUI finished down only 1.28 percent.

The silver equities followed an almost identical price pattern -- and Nick Laird's Intraday Silver Sentiment/Silver 7 Index closed down 1.63 percent.  'Click to enlarge' if necessary.

And here's Nick's 1-year Silver Sentiment/Silver 7 chart.  Click to enlarge.

Here are the usual three charts from Nick that show what's been happening for the week, month-to-date -- and year-to-date.  The first one shows the changes in gold, silver, platinum and palladium for the past trading week, in both percent and dollar and cents terms, as of their Friday closes in New York — along with the changes in the HUI and the Silver 7 Index.

And here's the month-to-date change in each...

And year-to-date...

The precious metal equities continue to do poorly.  The silver equities aren't even up the same percentage as the metal itself year-to-date -- and the gold equities aren't doing much better.

The CME Daily Delivery Report showed that zero gold and another 388 silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.  In silver, the only two short/issuers that mattered were ABN Amro and International F.C. Stone, with 264 and 122 contracts out of their respective client accounts.  Of the nine long/stoppers in total, the only three worth noting were International F.C. Stone, JPMorgan and HSBC USA with 171, 112 and 43 contracts for their respective client accounts.  The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Friday trading session showed that gold open interest in September declined by 4 contracts, leaving 828 still around.  Thursday's Daily Delivery Report showed that zero gold contracts were posted for delivery on Monday.  Silver o.i. in September declined by 319 contracts, leaving 1,301 still open, minus the 388 mentioned in the previous paragraph.  Thursday's Daily Delivery Report showed that 570 silver contracts were actually posted for delivery on Monday, so that means that 570-319=251 more silver contracts were added to the September delivery month.

So far in September, there have been 4,476 silver contracts issued and stopped.  That's a lot -- and the month isn't even half over yet.  Of those 4,476 contracts, JPMorgan has stopped 1,353 for its client account, HSBC USA has stopped 1,150 for its client account as well.  The other big player so far in September is ABN Amro, as they've not only stopped 1,187 silver contracts for their client account, they've issued 1,133 contracts out of their client account as well.

For the third day in a row there was a withdrawal from GLD.  This time there was 76,026 troy ounces removed.  I would suspect, but await Ted's opinion on this, that this the ones on Wednesday and Thursday...were most likely a conversion of shares into physical metal.  As for who it might be, GLD's custodian comes to mind...HSBC USA.  There was no reported change in SLV.

And as I said in Friday's column..."There have now been sixteen consecutive withdrawals/conversion of shares for physical in SLV since 12 July...totalling 21.92 million troy ounces."

There was no sales report from the U.S. Mint again yesterday.

Month-to-date the mint has sold only 2,000 troy ounces of gold eagles -- 25,000 silver eagles -- and zero 1-ounce 24K gold buffaloes.  Wow!

It was another extremely quiet day in gold over at the COMEX-approved depositories on the U.S. east coast on Thursday.  Nothing was received -- and only 1,991 troy ounces were shipped out of Brink's, Inc.  I shan't bother linking this amount.

With September deliveries in full swing, it was much busier in silver, as two truck loads and a bit...1,399,888 troy ounces...were dropped of over at HSBC USA.  There was only 20,050 troy ounces shipped out -- and that activity was at Scotiabank.  The link to all that is here.

There was some activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday.  They only received 110 of them, but shipped out 1,818.  All of this activity was at Brink's, Inc. as per usual -- and the link to that, in troy ounces, is here.

Here are four more charts that Nick Laird passed around on Thursday evening that I just didn't have room for in yesterday's missive, so here they are today.

The first one shows bullion coin sales at The Perth Mint, updated with August's data.  Gold sales continue very much on the quiet side, but silver bullion coin sales were terrible.  The retail bullion market sucks 'down under' as well.  Click to enlarge.

These next two charts show gold and silver imports into India, updated with July's dataClick to enlarge.

The Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday, showed that the increase in the commercial net short position in silver was a tad higher than Ted was expecting -- and quite a bit lower in gold.

In silver, the Commercial net short position increased by 11,100 contracts, or 55.5 million troy ounces of paper silver.  They arrived at that number by selling 3,990 long contracts, plus the added 7,110 short contracts -- and the sum of those two numbers is the change for the reporting week.  Almost all of this change came courtesy of the Managed Money traders.

Ted said that the Big 4 traders increased their short position by approximately 3,600 contracts...the '5 through 8' large traders added about 1,200 contracts to their short position...and Ted's raptors, the 29 smaller commercial traders other than the Big 8, sold around 6,300 long contracts.

Under the hood in the Disaggregated COT Report, it was almost all Managed Money trading opposite the Commercials, as the purchased 2,870 long contracts -- and they decreased their short position by 6,789 contracts.  The sum of those two numbers...9,659 contracts...was the change for the report week.  The difference between that number and the change in the Commercial net short position...about 1,440 contracts, was made it always the traders in the other two categories; the 'Other Reportables' and the 'Nonreportable'/small traders.

With the new Bank Participation Report in hand, Ted was able to recalibrate JPMorgan short position in the COMEX futures market -- and he sets it at 36,000 contracts, or 180 million troy ounces of paper silver, which is equivalent to about 74 days of world silver production.

The Commercial net short position in silver is now up to 383.4 million troy ounces.

Here's the 3-year COT Report for silver -- and it nearly goes without saying that there's been a further increase in the Commercial net short position in that precious metal since the COMEX close on Tuesday.  Click to enlarge.

In gold, the commercial net short position increased by 'only' 13,778 contracts, or 1.38 million troy ounces of paper gold.

They arrived at this number by purchasing 6,115 long contracts, plus they added 19,893 short contracts -- and the difference between those two numbers...13,778 the change for the reporting week.

Ted said that the Big 4 traders added only about 1,200 contracts to their short position, but the big '5 through 8' traders stepped up to the plate by adding around 7,300 contracts to their short position.  Ted's raptors, the 53-odd smaller commercial traders other than the Big 8, reduced their long position by approximately 5,300 contracts.

Under the hood in the Disaggregated Report it was all Managed Money traders -- and then some, as they purchased 16,424 long contracts, plus they added 362 short contracts.  The difference between those two numbers...16,062 contracts...was the change for the reporting week.  As always, the difference between that number and the change in the commercial net short position...about 2,300 contracts...came courtesy of the traders in the 'Other Reportable' and 'Nonreportable'/small trader categories.

The commercial net short position in gold is now up to 26.18 million troy ounces.

Here is the 3-year COT chart for gold -- and like the COT chart for silver, doesn't paint a pretty picture.  And, without doubt, there's been a further increase in the commercial net short position since the Tuesday cut-off.  Click to enlarge.

It's been obvious for a while now that the powers-that-be are throwing all the necessary COMEX paper at the precious metal rallies to make them go away -- and that's particularly true of the volumes we've seen this week.  It's only a matter of time before they turn these markets -- but as for the time-line involved, it's anyone's guess.  But right now the lines in the sand for gold and silver appears to be $1,350 and $18 spot.

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 137 days of world silver production—and the ‘5 through 8’ large traders are short an additional 54 days of world silver production—for a total of 191 days, which is six months and change of world silver production, or about 464.1 million troy ounces of paper silver held short by the Big 8.  [In the COT Report last week, the Big 8 were short 181 days of world silver production.]

In the COT Report above, the Commercial net short position in silver was reported as 383.4 million troy ounces.  The short position of the Big 8 traders is 464.1 million troy ounces.  The short position of the Big 8 traders is larger than the total Commercial net short position by a chunky 464.1 minus 383.4 = 80.7 million troy ounces.  The reason for the difference in those numbers is that Ted's raptors, the approximately 29-odd small commercial traders other than the Big 8...are still long that amount, which is a fact I also mentioned in my discussion on silver in the COT Report above.

As I also stated in the above COT Report, Ted pegs JPMorgan's short position at around 36,000 contracts, or around 180 million troy ounces, which is up 17.5 million troy ounces from what they were short in last week's COT Report.  180 million ounces works out to around 74 days of world silver production that JPMorgan is short.  That's compared to the 191 days that the Big 8 are short in total.  JPM is short about 39 percent of the entire short position held by the Big 8 traders.

I estimate the short position in silver held by Scotiabank at approximately 31 days of world silver production, a number that hasn't changed much in the last month.  So JPMorgan is by far the No. 1 silver short on Planet Earth -- and by a huge margin that continues to grow by the week.

The two largest silver shorts on Planet Earth—JP Morgan and Canada’s Scotiabank—are short about 105 days of world silver production between the two of them—and that 105 days represents about 77 percent of the length of the red bar in silver in the above chart...a bit over three quarters of it.  The other two traders in the Big 4 category are short, on average, about 16 days of world silver production apiece, unchanged from last week.  The four traders in the '5 through 8' category are short, on average, 13.5 days of world silver production each, a titch higher than last week.

This is just more proof of the fact that it's only what JPMorgan does in the COMEX silver market that matters, as it's only their position that every changes by any material amount.

The silver short positions of Scotiabank and JPMorgan combined, represents about 55 percent of the short position held by all the Big 8 traders.  How's that for a concentrated short position within a concentrated short position?

The Big 8 are short 50.7 percent of the entire open interest in silver in the COMEX futures market -- and that number would be a bit over 55 percent once the market-neutral spread trades are subtracted out.  In gold, it's 47.8 percent of the total COMEX open interest that the Big 8 are short -- and just under 55 percent once the market-neutral spread trades are subtracted out.

The Big 8 are now back to being short a larger percentage of total open interest in silver than they are in gold -- and that's the first time that's happened in over three months.

In gold, the Big 4 are short 67 days of world gold production, which is unchanged from what they were short last week — and the ‘5 through 8’ are short another 30 days of world production, which is up 3 days from what they were short the prior week, for a total of 97 days of world gold production held short by the Big 8 -- which is also up 3 days from what they were short in last week's report.  Based on these numbers, the Big 4 in gold hold about 69 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 72, 68 and 73 percent respectively of the short positions held by the Big 8.  These numbers haven't changed by any material amount since last week's COT Report.

Why JPMorgan has taken it upon itself to be the short seller of last resort in silver [and probably in the other three precious metals as well] for the last number of weeks, is the great mystery that Ted has been thinking about for a while now -- and it's even more obvious in this week's COT Report -- and in the companion Bank Participation Report analysis below.

****And as I mentioned last week in this space...before dropping the Days to Cover should go scroll back to the chart just to make note of how heavily shorted the four precious metals are compared to every other physically traded commodity on the COMEX****

The August 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.  This month's report is particularly ugly.

In gold, 6 U.S. banks are net short 127,483 COMEX contracts in the September BPR, which is the second largest short position they have ever held -- and almost 50 percent of this week's commercial net short position.  In August’s Bank Participation Report [BPR], that number was 93,482 contracts, so they’ve increased their collective short positions by a huge 34,001 contracts during the last month.  Four of the six U.S. banks would certainly include JPMorgan, HSBC USA and Citigroup -- and maybe Goldman.  As for who the fifth and sixth 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, 30 non-U.S. banks are net short 86,263 COMEX gold contracts, which isn't much per bank -- and is almost a new record high short position by the non-U.S. banks.  In the August BPR, 31 non-U.S. banks were net short 61,376 COMEX contracts, so the month-over-month change shows a huge increase of 24,887 contracts.  I suspect that there's at least one large non-U.S. bank in this group that might hold a third of this short position all by itself -- and the remaining contracts, divided up by the 29 banks left, would be immaterial.  Scotiabank comes to mind as that "one large non-U.S. bank".

As of this Bank Participation Report, 36 banks [both U.S. and foreign] are net short 37.7 percent of the entire open interest in gold in the COMEX futures market, which is an increase from the 34.5 percent they were short in the August 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 short position was outed by the CFTC.  Click to enlarge.

In silver, 4 U.S. banks are net short 36,307 COMEX silver contracts in September's BPR — and Ted figures that JPMorgan is the proud owner of virtually all of it.  This means that the remaining 3 U.S. banks aren’t net short by much -- and a couple of them have to be net long the silver market in order for the numbers to work out, as these same banks are long 2,609 COMEX silver contracts as well.  In August's BPR, the net short position of these U.S. banks was 26,911 contracts, so the short position of the U.S. banks has increased by a very decent amount during the last reporting month, with most if not all accredited to JPMorgan, I would suspect.

Also in silver, 19 non-U.S. banks are net short 31,161 COMEX contracts—and that’s a 50+ percent increase from the 20,453 contracts that these same non-U.S. banks held short in the August BPR.  I would suspect that Canada's Scotiabank holds a goodly chunk of this amount all by itself.  That most likely means that a number of the remaining 18 non-U.S. banks might actually be net long the COMEX silver market by a bit.  But even if they aren’t, the remaining short positions divided up between these remaining 18 non-U.S. banks are immaterial — and have always been so.

As of this Bank Participation Report, 23 banks are net short 36.9 percent of the entire open interest in the COMEX futures market in silver—which is up big [61%] from the 22.9 percent that they were net short in the August BPR — with much, much more than the lion’s share of that held by only two banks…JPMorgan and Canada’s Scotiabank.

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 14,853 COMEX contracts in the September Bank Participation Report.  In the August BPR, these same banks were short 7,728 COMEX platinum contracts, so there’s been a whopping 92 percent increase in the U.S. banks’ short position from the prior month.

I suspect that, like in silver and palladium, JPMorgan holds virtually all of the platinum short position of the 5 U.S. banks in question.

Also in platinum, 15 non-U.S. banks are net short 12,358 COMEX contracts, which is an eye-watering 86 percent increase from the 6,631 contracts they were net short in the August BPR.

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 14 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 September's Bank Participation Report, 20 banks are net short 'only' 34.3 percent of the entire open interest in platinum in the COMEX futures market, which is a monster increase from the 19.8 percent they were collectively net short in the August BPR.  Click to enlarge.

In palladium, 4 U.S. banks were net short 10,713 COMEX contracts in the September BPR, which is up a decent 1,666 contracts from the 9,048 contracts they held net short in the August BPR.

Also in palladium, 13 non-U.S. banks are net short 4,829 COMEX contracts—which is only up a hair from the 4,633 COMEX contracts that these same banks were short in the August BPR.  When you divide up the short positions of the non-U.S. banks more or less equally, they’re mostly immaterial.

But, having said all that, as of this Bank Participation Report, 17 banks are net short 44.4 percent of the entire COMEX open interest in palladium...which is a goodly chunk...and right up there with the Big 8 traders in gold and silver.  In August's BPR, the world's banks were net short 39.3 percent of total open interest.

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.  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.  And it's more than obvious from the big open interest increases in all four precious metals in September's Bank Participation Report that they have been the long sellers and short buyers of last resort all month long in August in order to keep precious metal prices from blowing to the moon and the stars.  They are, in every sense of the word, constantly at battle stations.

But JPMorgan and Scotiabank still remain the two largest silver short holders on Planet Earth in the COMEX futures market, with JPMorgan back in the #1 spot by a country mile once again, but with Scotiabank not that far behind.

Even including a repeat of the Cohen/Batchelor interview, plus a couple of stories that I've been holding onto for today's column, I don't have much for you again today.


"Greatest Fiscal Crisis In Our City's History": Hartford Warns it Will Be Broke in 60 Days

Well, that escalated quickly.

Just two months after Standard & Poor’s downgraded its general obligation debt to junk status, warning that the historic Connecticut capital could soon follow other once-proud cities like Detroit into bankruptcy, Hartford city officials confirmed as much when they warned on Thursday that the city could be forced into insolvency within two months if the state doesn’t provide emergency financial relief, the WSJ reports.

City officials warned Gov. Dannel Malloy, a Democrat, and state lawmakers that Hartford, which has a deficit approaching $50 million, wouldn’t be able to pay all of its bills within 60 days. Hartford officials said it would file for bankruptcy at that point unless the state legislature passes a budget that gives the city more funding or otherwise provides it with more cash.

    ‘We face the greatest fiscal crisis in our city’s history,’ officials said in a letter signed by Mayor Luke Bronin, Treasurer Adam Cloud and Thomas Clarke II, president of the court of common council

Hartford has been plagued by political corruption and a disintegrating corporate tax base – most recently exemplified by health-insurance giant Aetna’s decision to move its corporate headquarters away from the city, which was once proudly called “the Insurance Capital of the World.”

This news story appeared on the Zero Hedge website at 9:14 a.m. EDT on Friday morning -- and I thank Brad Robertson for sending it our way.  Another link to it is here.

Bricks & Mortar Meltdown: Bon-Ton Department Stores Hires Bankruptcy Advisor

Bon-Ton Stores, Inc., which operates about 260 department stores largely in the Northeast and Midwest under the names Bon-Ton, Bergner’s, Boston Store, Carson’s, Elder-Beerman, Herberger’s, and Younkers, has hired PJT Partners, which describes itself as “a leading advisor to companies and creditors in restructurings and bankruptcies around the world.”

Faced with falling sales and customer traffic, the company is trying to refinance debt and prepare for a possible bankruptcy filing, “people familiar with the matter” told The Wall Street Journal.

Bon-Ton had already hired turnaround firm AlixPartners to help improve its operations but added PJT to focus on the financial aspects, “the people” told the Journal.

Bon-Ton’s debt and shares found their way onto WOLF STREET for the first time in November 2015, in Capital Destruction Rages Beneath S&P 500 Tranquility after it reported crummy results, blaming the “unseasonably warm weather” and “continued weakness in overall traffic trends.” That day, its already beaten-down 8% notes plummeted well below 40 cents on the dollar, and its shares crashed 39% to $1.21.

This article was posted on the Internet site on Friday sometime -- and I thank Roy Stephens for pointing it out.  Another link to it is here.

Behind the Fraud: Jamie Dimon’s $13 Billion Secret — Revealed

In November 2013, JPMorgan Chase, the nation’s largest bank, agreed to pay a then-record $13 billion fine to federal and state authorities in order to settle claims that it had misled investors in the years leading up to the financial crisis. JPMorgan Chase’s settlement raised many eyebrows on Wall Street. The huge settlement appeared inconsistent with the oft-repeated narrative of the bank’s heroism during the crisis. JPMorgan Chase and its C.E.O., Jamie Dimon, after all, were appropriately lauded for swooping in to save both Bear Stearns and Washington Mutual, acts of financial patriotism that certainly helped prevent the U.S. economy from further doubling over upon itself.

But people wondered why one of Wall Street’s ostensible white knights would pay $13 billion—$9 billion of its shareholders’ cash, plus another $4 billion in mortgage relief—in a government case. During a conference call on the morning that the settlement was announced, Mike Mayo, a veteran Wall Street analyst, asked Dimon and bank C.F.O. Marianne Lake the question that appeared to be on the minds of everyone in the financial-services industry: “How is it that JPMorgan got front and center with this issue? That it’s the Department of Justice working out an agreement with JPMorgan when JPMorgan performed so well during the crisis, yet here’s the one bank that’s paying a $13 billion fine?” Without missing a beat, Dimon retorted, “Mike, you’ve got to ask them, O.K.?” In other words, Dimon seemed to be saying to Mayo, as he later put it in Davos, that the whole thing was “unfair.

A number of clues about what had forced Dimon’s hand, however, began emerging soon after the conference call. As I reported in The Nation in 2014, JPMorgan Chase’s settlement came at the end of an intense series of negotiations with a wide range of government officials. Perhaps the most pivotal moment in the conversations occurred in September 2013 when D.O.J. lawyers shared with Dimon and his attorneys a draft of a 92-page civil complaint that Benjamin B. Wagner, the then U.S. attorney in the Eastern District of California, and his colleagues were prepared to file in federal court. The draft complaint—based upon hundreds of thousands of subpoenaed internal JPMorgan documents; and interviews with its bankers, employees in its mortgage-backed securities division, and third-party mortgage originator—alleged that the bank’s due-diligence process had been subverted, and ignored, during the years before the crisis. In Wagner’s narrative, the bank was not nearly the white knight of Wall Street.

This longish, but very worthwhile essay showed up on the Internet site on Wednesday -- and it comes to us courtesy of Mark Peetz.  Another link to it is here.

Laughing on the Way to Armageddon — Paul Craig Roberts

The United States shows the world such a ridiculous face that the world laughs at us.

The latest spin on “Russia stole the election” is that Russia used Facebook to influence the election. The NPR women yesterday were breathless about it.

We have been subjected to ten months of propaganda about Trump/Putin election interference and still not a scrap of evidence. It is past time to ask an unasked question: If there were evidence, what is the big deal? All sorts of interest groups try to influence election outcomes including foreign governments. Why is it OK for Israel to influence US elections but not for Russia to do so? Why do you think the armament industry, the energy industry, agribusiness, Wall Street and the banks, pharmaceutical companies, etc., etc., supply the huge sum of money to finance election campaigns if their intent is not to influence the election? Why do editorial boards write editorials endorsing one candidate and damning another if they are not influencing the election?

What is the difference between influencing the election and influencing the government? Washington is full of lobbyists of all descriptions, including lobbyists for foreign governments, working round the clock to influence the US government. It is safe to say that the least represented in the government are the citizens themselves who don’t have any lobbyists working for them.

Paul lets everything hang on in this opinion piece that appeared on his Internet site yesterday sometime.  It's definitely worth reading -- and I thank "Mac P." for sending it along.  Another link to it is here.

AccuWeather: "No Way to Avoid Another Catastrophic Weather Event"

After "carving a path of destruction through the Caribbean," a path which left 90% of Barbuda "uninhabitable" and nearly a million people without power in Puerto Rico, a devastatingly massive Category-4 Hurricane Irma is rapidly closing in on Florida.  As residents continue to evacuate ahead Irma's landfall this weekend, the founding meteorologist of AccuWeather says that another "catastrophic weather event" in the U.S. is inevitable and described Irma as the "worst single hurricane to hit Florida since Hurricane Andrew in 1992."

After blasting the northern Caribbean, deadly Hurricane Irma will turn toward the United States, unleashing destructive winds, flooding rain and dangerous seas across Florida starting on Saturday.

"Unfortunately, there is no way the United States is going to avoid another catastrophic weather event," Dr. Joel N. Myers, founder, president and chairman of AccuWeather said.

"There will be massive damage in Florida. [It will be] the worst single hurricane to hit Florida since Hurricane Andrew in 1992," Myers said.

"The current track of Irma will bring the most severe impacts to the eastern side of the state, including Miami, West Palm Beach, Melbourne, Daytona Beach and Jacksonville. However, with the forecast track now taking Irma right up the Florida Peninsula, hurricane-force winds will reach western parts of the state as well, including Tampa, Fort Myers and Sarasota.

    Impacts within the projected path of Irma include life-threatening wind, storm surge and flooding rainfall hazards
," Kottlowski added.

"It's a monster hurricane out there -- it's bringing along with it something to be feared," Myers said, referring to the "extremely angry ocean" that Irma has been churning for so long.

"Any land within 185 miles of the Irma's center could see damage and any place within 50 to 60 miles of the center could experience catastrophic damage," Kottlowski said.

Wow!  No surprises here.  This longish Zero Hedge article was posted on their website at 4:40 p.m. EDT on Friday afternoon -- and another link to it is here.

Draghi Trips Over Euro on Way to QE Exit

European Central Bank President Mario Draghi is discovering that exiting quantitative easing is harder than introducing it.

The more the euro rises, the more downward pressure it puts on inflation, making it harder for the central bank to taper its bond-buying program, which in turn boosts the euro. It's a vicious circle, driven largely by the improved economic outlook for the bloc.

Since the economy started growing again, euro zone GDP has typically been revised higher after its initial release.

The central bank's newest growth predictions, released Thursday at the press conference following its latest monetary policy meeting, gave traders every reason to keep buying euros. While its growth forecasts for 2018 and 2019 were left unchanged, this year's projection was raised to 2.2 percent from 1.9 percent at mid-year.

By contrast, the ECB's inflation forecasts for next year and the year after were revised lower, which Draghi attributed largely to the rising euro.

This Bloomberg article put in an appearance on their website on Thursday morning at 10:57 a.m. EDT -- and I thank Swedish reader Patrik Ekdahl for finding it for us.  Another link to it is here.

The Europe We Want -- Geert Wilders

Thank you for having me here today. I applaud the fact that you invite someone who does not share your enthusiasm for the European Union. Or your European dream, as Euro commissioner Frans Timmermans just called it. To be honest: his dream is my nightmare.

I realize that my views are different from those of the many members of the European establishment in our midst, but I am an optimist.

I believe in a positive future for Europe as a community of independent, sovereign and democratic nations -- working together without a supranational political union -- a Europe without the European Union.

I believe that true democracy can only exist and flourish within a nation state. National sovereignty combined with domestic culture gives us our identity. As does control over our own borders and budget and the right to decide how to use it ourselves as a nation.

Unfortunately most of our governments have transferred ever more powers to the E.U., undermining many important things we Dutch have achieved over the past centuries and hold very dear.

This commentary by Geert Wilders appeared on the Internet site last Sunday -- and it was another item that had to wait for a spot in today's column.  I thank Roy Stephens for sending it along -- and another link to it is here.

Does Putin aim to destroy the markets that he needs for Russia's prosperity? -- John Batchelor interviews Stephen F. Cohen

Part one of these podcasts examines the reactions of Putin to new provocative and punitive sanctions levied from the U.S. against North Korea, the advancing peace realities in Syria, a warning to the U.S. about weapons export to Kiev, and finally the newest forced closings of Russian trade consulates in the U.S. Batchelor asks whether Putin’s responses to these new issues will be more overtly hostile or destabilizing for the United States?  Cohen responds by wondering when he will hear any good news; and focusing on the closing of the consulates and the methods used to do this he wonders if this is a worsening stage of the New Cold War and specifically whether this is leading to diplomatic isolation of the two states. He goes on to discuss that this breakdown in relations is founded on the artificial and false accusations of Russiagate and Russian interference in the United States elections. He finally relegates this whole sordid mess to “amnesia” on the part of Washington that Putin started out with pro Western attitudes and with the goal to rebuild Russia. One is reminded of Mackinder’s Island theory of geopolitics and especially Paul Wolfowitz’s Doctrine that are surely the dogmatic foundations for U.S. hostility, and Putin’s non-confrontational, even supportive stance was irrelevant. Putin was simply too successful for the Empire to stomach, and hence the animosity was inevitable. His crime was to create a competitor to empire.

The question is why Putin would put the prosperity of Russia in jeopardy by meddling with the democracies of the West? Cohen maintains that the facts and historical record indicates he did not, nor was he motivated to do so. However, Putin was adamant about not being “absorbed” by the West. And Cohen points out that investments from the West were in company with Russian investments in the West. This goes unrecognized, as Cohen puts it, “by the geniuses in Washington”.

In part 2 Batchelor continues the discussion and that the reaction of Putin to Washington animosity has been the move to China and to support the New Silk Road Agenda. Russia was ready to cooperate with the U.S. but instead was met with efforts to isolate her – to the detriment of all. Cohen now admits, “Russiagate has broken Trump”. He also maintains that the dismissal of the idea that Russia could have a positive relationship with Russia ended with the Ukraine Civil War. Batchelor disagreed; and stated he thought it began with the Georgian Invasion by Russia. But I think one could also make an argument that the US invasion of Afghanistan had multi-purpose goals – and was a strategic disadvantage to Russia. And even as NATO was approaching Russia, Putin wanted to join NATO. Cohen then makes the argument that Ukraine was the breaking point, the “red line” was the overthrow of the legitimate Kiev government in 2014, and Putin recognized a danger to the Russian naval base in Crimea. Cohen does not now see this as an overreaction. He really had no choice – and the Crimea population fully supported it.

The domestic issues of Russiagate driving American policy are the next topic. Cohen wonders “where the legs came from that drive this story”? Will the Democrats still use Russiagate as a platform in the 2018 election? This question is still important to Cohen because the MSM is still censoring the facts that discount it. The sinister elements are then considered, the Deep State element, the profit of war motive that is still very present and is still keeping this process alive and threatening.  Remarkably, the people responsible for the hostility, according to Cohen, apparently did not predict Putin’s move to China, and now that this is fact we have a perverse reaction from these people to ramp up the animosity to what increasingly looks like a war footing. As a trend, the famous Obama statement about “stop doing stupid stuff” has become another perversity- as doing stupid stuff seems to have become policy. From my perspective the clearly compromised FBI Director, Comey and various high echelon people in the DNC that clearly supported Hillary Clinton, and hid e-mail evidence and other criminal acts to support her candidacy may give some indication that not even the Deep State is prepared to support her in 2018. One can only hope this is true, as there seems no scandal too large for the sinister forces to deny public discussion.

This interview was in my Thursday column.  But I mentioned at the time that it would be reappearing in Saturday's column if you didn't have the time for it then -- and here it is.  I thank Larry Galearis for his usual and very excellent executive summary.  Part 1 is linked in the above headline -- and here. Part 2 is linked here. They run for 20 minutes each.

Larry Wilkerson: North Korea is Not an Existential Threat -- But Many People Benefit by Saying It Is

Welcome to the Real News Live. I'm Paul Jay in Baltimore. Today we're going to go live with Larry Wilkerson. Just before we do, let's remind ourselves of a little bit of history. There was an agreement about the North Korean nuclear program. That's towards the end of 1994 with the Clinton administration.

The agreement essentially, at least the main points, went like this. North Korea would allow the IAEA to conduct routine inspections of nuclear facilities and remain a party to the nuclear proliferation treaty. US would lead the effort to build two light-water nuclear reactors in North Korea to compensate for the loss of nuclear power. Target date to build those, 2003.

Until they were built the U.S. would supply the North with 5000 tons per year of heavy fuel, and the U.S. would suspend team spirit military exercises with South Korea. The U.S. would lift sanctions and remove North Korea from its list of state sponsors of terrorism, normalize the political relationship, which is still the subject of terms of the 1953 Korean War armistice. Both sides would provide formal assurances against the threat or use of nuclear weapons.

What happened to that agreement? Well, now joining us to discuss that and the current situation of the confrontation of the United States and North Korea is Larry Wilkerson. Larry joins us from his home in Falls Church, Virginia. Larry's a former chief of staff to US Secretary of State Colin Powell. He's currently an adjunct professor of government at the College of William and Mary and a regular contributor to the Real News. Thanks very much, Larry, for joining.

This excellent 34-minute video interview, complete with a full transcript, was posted on Internet site on Tuesday sometime -- and had to wait for a spot in today's column.  I thank Kim Lipscomb for bringing it to my attention -- and now to yours.  Another link to it is here.

War on cash the ‘biggest threat’ to our liberty

BIG Brother is coming for your wallet.

From expiry dates on $100 notes and cash payment limits to tracking chips, internet snooping and now central bank-issued digital fiat currency, the battle plan for the war on cash is taking shape.

With the federal government’s Black Economy Taskforce set to hand down its final report next month, the head of the corporate watchdog has weighed into the debate with an ominous prediction.

Speaking to the The Australian Financial Review on Monday, ASIC chairman Greg Medcraft predicted traditional bank accounts may be unnecessary within a decade as central banks begin issuing their own Bitcoin-style digital fiat currency.

While central banks already have digital settlement accounts with the financial institutions, Mr Medcraft predicted that those would soon be extended to everyday transaction accounts for the general population.

With central-bank issued digital currencies, you might not need a bank account anymore,” Mr Medcraft said. A digital fiat currency, while convenient, would also be convenient for the government — able to be taxed, tracked and confiscated at will.

This longish article was posted on the Australian website on Tuesday evening 'down under' -- and it comes to us courtesy of Australian reader J.W.  Another link to it is here.

Chinese gold demand heading for 2,000 tonnes this year -- Lawrie Williams

Chinese gold demand this year, as represented by withdrawals from the Shanghai Gold Exchange (SGE), are currently 4.5% up on a year ago and if this margin is maintained through the remainder of the year, the full year figure could total around 2,050-2,060 tonnes as against 1,970 tonnes in 2016.  However this would still be well down on the record 2015 year when SGE withdrawals totalled 2,596 tonnes for the full year.

In the latest full month (August), SGE withdrawals came in at 161.41 tonnes compared with 144.44 tonnes during the same month a year ago.

As we have pointed out before it is a contentious point as to whether SGE withdrawals are actually a measure of total Chinese gold demand.  The various major gold-focused consultancies come up consistently with far lower figures, but regardless, DSG withdrawal figures have to be a year-on-year measure of the overall strength of Chinese gold demand given the lack of other published official data.  We would also emphasise that the published SGE withdrawal figures come out far closer to known Chinese gold imports (as published by countries which break these figures down - notably Hong Kong, Switzerland, the U.K., the U.S.A. and Australia) plus China’s own gold production of around 450 tonnes.  If one adds in a couple of hundred tonnes for scrap conversion one comes up with gold flows absorbed by China as being very close to the SGE withdrawal totals – something which seems to be ignored by the consultancies which seem to have a limited definition of demand.

This gold-related news story showed up on the Sharps Pixley website on Friday sometime -- and another link to it is here.

Ted Butler:  Eight Crooks Against the World

What kind of rational market system would pit and favor the short paper positions of just 8 traders, holding less than 0.1% of the position held long by all the gold holders in the world, to continually set the price? Sadly, this is the market system in place. And here’s another oft-asked question of mine – what would the price of gold be if these 8 paper shorts didn’t hold such a large concentrated short position and needed to be replaced by many others convinced the price of gold was high enough to be shorted?

The numbers in silver are even more startling. Eight large commercial traders held 48.2% of total open interest (182,823 contracts) net short, or 88,121 contracts, the equivalent of 440 million oz. Not only is this more than 50% of world annual mine production (870 million oz) compared to 26% in gold, the concentrated net short paper position of just 8 traders is around 25% of the world’s physical silver inventory of 1.5 to 2 billion oz (in 1000 oz bar form). Where the concentrated gold short position was ridiculous in that it was only 0.1% of the total amount of physical gold in the world, yet still dictated prices; the concentrated short position in COMEX silver is much more manipulative in that it is much larger and even more ridiculous.

I hold that “ridiculous” is the correct word in this case because what else could describe a circumstance where 8 large market crooks, acting in obvious collusion, could come to control and dictate prices to the rest of the world? What makes these traders crooked is that they have never collectively bought back short positions on higher prices, only added more shorts until prices finally top out. This is the key price control mechanism behind the manipulation.

This absolute must read commentary by Ted was his mid-week missive to his paying subscribers on Wednesday.  It was posted on the Internet site at 10:10 a.m. EDT on Friday morning -- and I thank reader Tom Djian for sharing it with us.  Another link to it is here.


Within an hour of the eclipse being over, we left Casper, Wyoming going eastbound on I-25...only to run into the only traffic jam that rural Wyoming had ever had in its history.  It put us hours behind schedule on our trip to the black hills of South Dakota -- and we finally broke free of it all in the middle of nowhere at a place called Lusk, which was very close to the northwestern border of Nebraska.  The first shot, taken through the windshield just east of Casper, was only a hint of the traffic problems that were laying in wait for us further down the road as we approached Douglas.  The second photo was just west of Lusk as we were crawling along in traffic.  In the last shot we were finally in the clear east of Lusk, but it was pretty late in the afternoon.  Shots like this were as close to the badlands as we got, as all we wanted to do by this point, was get to the hotel before dark.  This was just over the state line on Highway 20 in northwestern Nebraska. The 'click/double-click to enlarge' feature really makes a difference with these shots.


Today's pop 'blast from the past' came from Billy Joel's "52nd Street" album back in 1978.  He was already a superstar by then -- and this tune, along with two others off that album, just cast that fact in stone.  The link is here.

Today's classical 'blast from the past' is a warhorse for sure.  I've posted this piece before, but it's been a while.  Beethoven's violin concerto in D major, Op. 61 sits in first place in my list of desert island violin recordings -- and with Itzhak Perlman doing the honours -- and Daniel Barenboim conducting, it just does not get any better than this.  The link is here.

Once again there should be no doubt in anyone's mind that 'da boyz' were all over the precious metal market yesterday, plus any other market that needed their attention...and that included the 'save' of the U.S. dollar index at the 91.01 mark at 1:25 p.m. in Shanghai on their Friday afternoon when the rest of Planet Earth was asleep.  That's when they began turning the precious metal prices lower as well.

There was no mountain they couldn't...and didn't...move yesterday, including closing silver back below $18 spot -- and gold below $1,350 spot.  They also laid a lickin' on copper as well, knocking a dime off its price.

Here are the 6-month charts for all four precious metals, plus copper -- and the 'click to enlarge' feature helps a bit with the first four charts.  You should note that gold, silver and platinum are ripe for an engineered price decline, as JPMorgan et al  could run the Managed Money sell stops for fun, profit -- and price management purposes.

Even though gold, silver and platinum and ripe for a smack-down by 'da boyz' at the time of their choosing, it's my opinion that any price decline will be swift and of limited duration.  I doubt very much that we're going to revisit the lows of early-to-mid July.

But unless the powers-that-be get over run -- then all price rallies, or declines, are still going to occur by the good graces of JPMorgan et al.

I'm also becoming more and more intrigued by all the conversions of shares for physical that are occurring in GLD and SLV...but mostly in SLV since July 12.  As I said in Friday's column..."As Ted has pointed out for many months, this 'conversion of shares for physical' in SLV is now the principle vehicle by which JPMorgan [who is both the custodian and the main Authorized Participant in SLV] is accumulating physical silver.  And they're hiding any additions of physical metal into SLV by converting an even larger number of SLV shares into physical on the same day the additions are made.  So these conversions are 'net' numbers between what's going in, minus what's coming out -- and as I pointed out last week, what is actually coming out of SLV is far in excess of the 21.92 million ounces mentioned in the previous paragraph."

Ted says that JPMorgan's silver stash is now in the neighbourhood of 650 million ounces -- and they appear to be adding more all the time -- and at an accelerating rate recently.  What is the end game here -- and when is it coming?  I'm sure we'll find out in due course, but after 17 years of waiting, I'm getting a little tired of all this.  But I suppose I can wait a bit long.  For Ted, it's been more than 30 years.

The world's central banks continue to play "let's pretend" with the world financial and monetary system.  The only way that they can keep this game going is by sitting on commodity prices in general -- and precious metal prices in particular.  As you can tell, their interventions are becoming more obvious as time goes they continue to keep their paper game going at the expense of the real producers of wealth in the economy.

Eventually that game will be lost -- and it will come at a horrible price for some.

But if China and Russia are looking for way to put a pin in the U.S. dollar-based financial system, this avenue is wide open to them -- as both countries have been well aware of the price management scheme in gold for more than a decade now.

But can they, or will they, remains the $64,000 question.  However the option is there -- and at some point the gold card will have to be played by somebody.  Since that's the case, it just remains to be seen who plays it first -- and what the new and permanently high price for gold will be.

At that point, silver will become the new gold -- and what's been happening with silver since the drive-by shooting on May 1, 2011 will make some sense.

Right now it's a waiting game, as 'da boyz' and the other insiders appear to be getting into position for whatever ending they have in store.

I'm done for the day -- and the week -- and I'll see you here on Tuesday.



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