JPMorgan: Now Long Silver in the COMEX Futures Market
-- Published: Sunday, 9 September 2018 | Print | Disqus
By Ed Steer
08 September 2018 -- Saturday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
The gold price chopped unsteadily sideways around the $1,200 spot mark through all of Far East and most of London trading on their respective Friday's. The price got smacked a bit at the 8:30 jobs report in New York, but began to head higher about 9:01 a.m. EDT. That rally was allowed to last for about forty minutes before 'da boyz' showed up -- and they set the low tick of the day about fifteen minutes before the COMEX close. It crawled a few dollars higher over the next hour -- and then didn't do much until trading ended at 5:00 p.m. in New York.
The high and low ticks certainly aren't worth looking up.
Gold was closed in New York on Friday at $1,196.20 spot, down $3.30 on the day. Net volume was pretty heavy once again at around 260,500 contracts -- and roll-over/switch volume was just about 11,700 contracts on top of that.
Silver's price pattern was much more 'volatile' yesterday. It was up a nickel or so in early morning trading in the Far East on their Friday morning, but then was kicked downstairs [like gold and platinum] shortly after 11 a.m. CST. It chopped very unsteadily higher from there once trading began in London and, like gold, was sold lower on the 8:30 a.m. EDT jobs report. Also like gold, it rallied sharply -- and obviously had to be restrained, with the high tick of the day, such as it was, coming around 11:30 a.m. in New York. It was sold down to below unchanged on the day by the COMEX close -- and crawled a bit higher and back into the green by the time trading ended at 5:00 p.m. EDT.
The low and high ticks are barely worth looking up, but the criminal CME Group recorded them as $14.105 and $14.29 in the December contract.
Silver was closed yesterday at $14.165 spot, up 3.5 cents from Thursday. Net volume was pretty heavy once again at a hair over 74,000 contracts -- and there was close to 3,250 contracts worth of roll-over/switch volume on top of that, in this precious metal.
Platinum traded pretty flat in Far East trading on their Friday, with the exception of the bump down shortly after 11 a.m. CST -- and at 2 p.m. over there, it began to rally weakly to its high of the day, which came around 10:45 a.m. CEST in Zurich trading. It was all down hill from that point until 9 a.m. in New York -- and after that, it was forced to follow a similar price path as both silver and gold. Platinum was closed on Friday at $780 spot, down 11 dollars on the day.
Palladium traded flat in the Far East on Friday -- and then there was a big down/up spike shortly before 10 a.m. in Zurich, which may or may not have been a data feed error. It rallied very unsteadily from there -- and looked to be running into a decent amount of price resistance on its way to its $986 spot high tick that came at the Zurich close. It wasn't allowed to get a penny above that price -- and 'da boyz' hammered it lower starting shortly after 1 p.m. in New York trading -- and came close to getting it back at unchanged on the day. That would have been a considerable feat considering it was up $15 at its high. It rallied a few dollars off that low almost immediately -- and then didn't do much for the remainder of the Friday session. Palladium was closed at $976 spot, up 5 bucks from Thursday.
The dollar index closed very late on Thursday afternoon in New York at 95.03 -- and proceeded to chop quietly sideways the moment that trading began at 6:00 p.m. EDT on Thursday evening. It began to drift lower starting around noon China Standard Time on their Friday -- and the 94.87 low tick was set sometime during morning trading in London. It began to edge higher starting around 11:45 a.m. BST -- and then blasted higher on the jobs report in New York. 'Gentle hands' managed to get it up to its 95.46 high tick by the 1:30 p.m. EDT COMEX close -- and it proceeded to drift a few basis points lower until it was sold down a bit more at the end of the trading day. The dollar index finished the Friday session at 95.34 -- up 31 basis points from Thursday.
And here's the 6-month U.S. dollar index chart -- and absolutely nothing should be read into it, as it's just as managed as the rest of the financial markets these day.
The gold shares gapped down a bit over a percent at the open in New York on Friday morning -- and rallied to their respective highs, which came a minute or so before the London close...11 a.m. EDT. They sold off from there -- and back into negative territory until about 1:20 p.m. in New York trading -- and then crawled quietly but unsteadily higher from there until trading ended at 4:00 p.m. EDT. The HUI closed up 0.64 percent.
The price path for the silver equities was a virtual carbon copy of what happened with the silver stocks -- and Nick Laird's Intraday Silver Sentiment/Silver 7 Index closed higher by 0.10 percent, which is certainly better than the alternative, albeit not by much. Click to enlarge if necessary.
And here's the 1-year Silver Sentiment/Silver 7 Index courtesy of Nick as well. Click to enlarge.
Here are the usual 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.
Here's the weekly chart -- and it's another sea of red. The declines in the metal during the reporting week/month-to-date are pretty tiny, but because ETFs and mutual funds were forced to sell shares into the market to pay for redemptions, the equities got their collective asses kicked. Click to enlarge.
The month-to-date chart and weekly charts are the same for this week only, so I won't bother posting it.
The year-to-date graph is even more butt-ass ugly than it was a week ago. However, despite the wall-to-wall red, it should still be noted that the silver equities continue to outperform their golden brethren on a year-to-date basis. This fact clearly demonstrates that silver -- and its associated equities, are going to vastly outperform their golden cousins when the next big rally is allowed to get underway. Click to enlarge.
And with yet another stunning COT Report in silver and gold yesterday, the above seas of red is what major price bottoms are made of. And I as I said last week [and the week before -- and the week before that] in this space...they're ugly...with this last swing for the fences by JPMorgan being the worst I've very seen in the eighteen years that I've been watching the precious metal market.
Everyone and their dog now knows that JPMorgan is not only out of all its short positions in the precious metals, it's also long them as well...particularly silver and gold. With the current "white hot" configuration in the COMEX futures market, it's highly doubtful that JPMorgan will appear as shorts sellers of either first and/or last resort once the next serious moving average-breaking rally is allowed to begin. They sure as hell don't want to be short when prices blow sky high -- and IF they do appear again, it will be at significantly higher prices...and I really do mean significantly.
The CME Daily Delivery Report for Day 5 of September deliveries showed that 28 gold and 347 silver contract were posted for delivery within the COMEX-approved depositories on Tuesday. In gold, Advantage issues all 28 contracts out of its client account. Of the four long/stoppers in total, Morgan Stanley stopped 12 in total...9 for clients -- and 3 for its own account. Advantage picked up 8 for its client account -- and ADM picked up 5 contracts for its client account as well. In silver, there were four short/issuers in total -- and the only two that mattered were International F.C. Stone and ABN Amro with 168 and 146 contracts out of their respective client accounts -- and Advantage was a distant third with 31 contracts out of its client account. There were six long/stoppers in total, with JPMorgan being the largest...132 contracts for its own account, plus 51 for clients. HBSC USA stopped 90...89 for its house account and the remaining contract for its client account. Advantage came in third with 34 for its client account. The link to yesterday's Issuers and Stoppers Report ishere.
The CME Preliminary Report for the Friday trading session showed that gold open interest in September declined by 44 contracts, leaving 45 still open, minus the 28 mentioned just above. Thursday's Daily Delivery Report showed that 63 gold contracts were actually posted for delivery on Monday, so something doesn't add up here, as 63 minus 45 is a negative number. Maybe this will resolve itself in Monday's Preliminary Report. Silver o.i. in September dropped by 311 contracts, leaving 799 still around, minus the 347 mentioned in the previous paragraph. Thursday's Daily Delivery Report showed that 295 silver contracts were actually posted for delivery on Monday, so that means that 311-295=16 silver contracts disappeared from the September delivery month.
For the first week of September deliveries, there have been 526 gold contracts issued and stopped so far -- and that number in silver is already up to 5,601 contracts.
There was a withdrawal from GLD yesterday, as an authorized Participant took out 47,326 troy ounces. But the big surprise of the day was the huge deposit made in SLV, as an a.p. added 3,008,256 troy ounces!
Since its low back on June 15 of this year, there has been 18.6 million troy ounces of silver added to SLV -- and during the same time period there has been 2.68 million troy ounces of gold withdrawn from GLD. Except for Ted Butler, not a soul is breathing a word about this immense dichotomy. I would suspect that he'll have something to say about this in his weekly review later today.
There was a sales report from the U.S. Mint yesterday. They sold 4,000 troy ounces of gold eagles -- and 6,500 one-ounce 24K gold buffaloes.
Month-to-date...one week...the mint has sold 10,500 troy ounces of gold eagles -- 6,500 one-ounce 24K gold buffaloes -- and 1,037,500 silver eagles. This has been the best start to any month since January. I'd guess that this would be the final call for purchasing precious metals at these ridiculously low prices.
The U.S. Mint also came out with a note yesterday saying that they were temporarily out of stock of the 24K one-ounce gold buffaloes as well -- and it only took sales of 6,500 coins to do it. They certainly don't carry much inventory. I thank reader Mark Barooshian for pointing that out.
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 1,286.000 troy ounces/40 kilobars [U.K./U.S. kilobar weight] were shipped out of Canada's Scotiabank. I won't bother linking this amount.
It was busier in silver, as two smallish truck loads...1,106,297 troy ounces...were received at Brink's, Inc. -- and all the 89,213 troy ounces of 'out' activity was at CNT. There was a bunch of paper transfers from the Eligible category -- and into Registered -- and vice versa. There was 230,819 troy ounces transferred from Registered and back into Eligible at Brink's, Inc. -- and 815,346 troy ounces transferred from the Eligible category and into Registered at CNT. The link to all this activity is here.
It was a very busy day over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday. They reported receiving 10,540 of them, plus they shipped out another 6,292. All of this activity was at Brink's, Inc. as per usual -- and the link to that, in troy ounces, is here.
Origin: Ancient Greece Material: Gold Full Weight: 4.27 grams
Agathocles was described as "behaving as a criminal at every stage of his career", according to Machiavelli -- and he was also cited as an example "Of Those Who By Their Crimes Come to Be Princes".
A lot of the so-called political leaders in the U.S. deep state easily fall into that category. Plus ça change, plus c'est la même chose, dear reader.
The Commitment of Traders Report, for positions held at the close of COMEX trading on Tuesday, September 4 was yet another stunner -- and another one for the record book...and history books.
In silver, the Commercial net short position declined by another 13,196 contracts, or 66.0 million troy ounces of paper silver.
They arrived at that number by selling 6,117 long contracts, but they reduced their short position by a further 19,313 contracts -- and it's the difference between those two numbers that represents their change for the reporting week.
The internal changes of the Big 8 traders is no longer relevant -- and has been that way for many weeks, as there are so many Managed Money Traders now in that category, that the numbers are meaningless...but here they are anyway if you're keeping score. Ted said that the Big 4 traders reduced their short position by approximately 800 contracts -- and the '5 through 8' large traders decreased their short position by about 300 contracts as well. The really big heavy lifting was done Ted's raptors, the 38-odd small Commercial traders other that the Big 8, as they increased their long position by a chunky 12,100 contracts, which is another new record I'm sure.
Under the hood in the Disaggregated COT Report, it was all Managed Money traders almost to the contract. The brain-dead/moving average-following Managed Money traders added another 8,347 short contracts and, collectively these 62 traders are now short 104,482 COMEX silver contracts, or 552 million troy ounces of paper silver! Gasp! The non-technical Managed Money traders sold 4,871 long contracts -- and it's the sum of those two numbers...8,347 plus 4,871 equals 13,218 contracts. The difference between that number -- and the Commercial net short position is only...13,218 minus 13,196 equals 22 contracts! That was made up by the traders in the other two categories, as they basically traded long and short positions with each other during the reporting week. Here's a snip from the Disaggregated COT Report so you can see it for yourself. Click to enlarge.
The Commercial traders are now net long the market by 14,613 contracts, or 73.1 million troy ounces. According to Ted, not only has JPMorgan covered the rest of their short position in silver, but they are now net long the market by around 2,000 contracts as well. My how the worm has turned! So except for the 2,000 contracts that JPMorgan is long, almost all of the rest of the Commercial net long position in silver is held by Ted's raptors, the small Commercial traders other than than Big 8. How preposterous is that, you ask? It's far beyond that now -- and the CFTC says and does nothing.
Here is the 3-year COT chart for silver, updated with the latest COT data -- and it is a sight to behold. Click to enlarge.
Words fail me at this point. JPMorgan has pulled off the perfect double cross...leaving the short position entirely in the hands of not only the brain-dead/moving average-following Managed Money traders, but the other four U.S. banks that are still net short silver in the COMEX futures market -- and my commentary on this subject in the latest Bank Participation Report further down, certainly falls into the required reading category.
In gold, the commercial net short position declined by another 14,787 contracts, or 1.48 million troy ounces of paper gold. The commercial traders are now net long the gold market by a hair.
They arrived at that number by adding 3,151 long contracts, plus they covered an additional 11,636 short contracts -- and it's the sum of those two numbers that represents their change for the reporting week.
Like for silver, the positions of the Big 8 commercial traders are totally meaningless, as they are now completely contaminated by the presence of many Managed Money traders, but here are the numbers anyway. Ted said the Big 4 traders didn't do much of anything during the reporting week, as their change was less than 100 contracts, which isn't even a rounding error. The '5 through 8' large traders decreased their short position by about 8,100 contracts -- and Ted's raptors, the 46-odd small commercial traders other than the Big 8, added approximately 6,700 long contracts.
Under the hood in the Disaggregated COT Report, less than half of the weekly change was made up by the Managed Money traders. The brain-dead/moving average-following M.M. traders only added 2,630 short contracts -- and the non-technical Managed Money traders reduced their long position by 4,320 contracts -- and it's the sum of those two numbers...6,950 contracts...that represents their change for the reporting week. The difference was made up, as it always is, by the traders in the other two categories, as the 'Other Reportables' decreased their net long position by 3,484 contracts -- and the 'Nonreportable'/small traders reduced their net long position by 4,353 contracts. And here's the applicable snip from the Disaggregated COT Report for gold. Click to enlarge as well.
As I mentioned briefly a few paragraphs ago, their is no longer a Commercial net short position in gold, as they are now net long by a tiny amount...6,525 contracts...or 652,500 troy ounces of paper gold. Ted said a few weeks ago that JPMorgan had covered its short position in gold -- and after the last couple of COT Reports, is probably long the COMEX futures market in gold by a good bit now. That doesn't include the 20 million troy ounces of physical gold that Ted says they own.
Here is the 3-year COT chart for gold -- and it's simply amazing to look at. Click to enlarge.
A double cross in silver -- and in gold as well. These crooks at JPMorgan are masters at their craft -- and you have to give them credit for that. I just hope that the CFTC's new enforcement director, Jamie McDonald, is getting his cut -- and he should be getting a big one for covering for them, plus lying about it all with a straight face.
In palladium, the Managed Money traders continue to cover short positions like mad -- and it's this short-covering rally that's driving up the palladium price. They've covered over half of it in the last two reporting periods. In platinum, the Managed Money traders of the brain-dead variety increased their short position by a bit -- and the non-technical Managed Money traders increased their long position by a bit. In copper, the Managed Money traders reduced their short position by about 5,000 contracts net. But despite that fact, the traders in the commercial category in copper managed to add to their long positions, plus cover more shorts -- and they are now net long the COMEX futures market in copper by 5,000 contracts.
So, are we done to the downside yet? Only JPMorgan knows that. And as Ted Butler said so succinctly at least a decade ago...and it's been even more apropos during this current [and brutal] engineered price decline..."we won't know when the bottom is in until we see it in the rear-view mirror." Amen to that!
Of course, nothing I spoke about in the COT Report above, the 'Days to Cover' commentary, or in the Bank Participation Report further down, would be known by anyone in the precious metals community...including me...if it wasn't for him. You're getting the Reader's Digest version from me -- and second hand to boot. As the old saying goes..."Oats that have already been through the horse are always cheaper than the ones straight out of the bin."...or words to that effect. If you want the Full Monty, I'd suggest that you consider a subscription to his service -- and the link to his website is here.
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 traders are short 115 days of world silver production-and the '5 through 8' large traders are short an additional 64 days of world silver production-for a total of 179 days, which is 6 months of world silver production, or about 417.8 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 long position in silver was reported as 73.1 million troy ounces. As mentioned in the previous paragraph, the short position of the Big 8 traders [almost all Managed Money traders now] is 417.8 million troy ounces. The long position of the Managed Money traders is now up to 417.8 plus 73.1 equals 490.9 million troy ounces.
The Big 4 traders are short about 29 days of world silver production each.
The four traders in the '5 through 8' category are short 64 days of world silver production in total...which is unchanged from last week's COT Report. They're short, on average, 16 days of world silver production each.
As you've already heard, JPMorgan is no longer part of the Big 8...or short silver at all -- and is now net long the COMEX futures market. The remaining Big 8 traders...four U.S. banks, plus Canada's Scotiabank, plus many others, mostly Managed Money traders...have been left holding the short bag.
The Big 8 commercial traders are short 39.3 percent of the entire open interest in silver in the COMEX futures market, which is up a bit from the 37.2 percent that they were short in last week's COT Report. And once whatever market-neutral spread trades are subtracted out, that percentage would be something close to 45 percent. In gold, it's now 32.7 percent of the total COMEX open interest that the Big 8 are short, up a bit from the 33.9 percent they were short in last week's report -- and a bit over 35 percent once the market-neutral spread trades are subtracted out.
In gold, the Big 4 are short 36 days of world gold production, which is unchanged from what they were short last week -- and the '5 through 8' are short another 18 days of world production, which is down two days from what they were short the prior week, for a total of 54 days of world gold production held short by the Big 8 -- which is down 2 days from what they were short in last week's report. Based on these numbers, the Big 4 in gold hold about 67 percent of the total short position held by the Big 8...which is up three percentage points from last week's COT Report. Like in silver, there are at least three, if not more, Managed Money traders in the Big 8 category now -- and that certainly skews the numbers to the high side by a number of days of world gold production.
The "concentrated short position within a concentrated short position" in silver, platinum and palladium held by the Big 4 commercial traders are about 64, 60 and 73 percent respectively of the short positions held by the Big 8. Silver is down one percentage point from the previous week's COT Report, platinum is up 1 percentage point from a week ago, but palladium is up 8 percentage points from last week's COT Report -- and that's because the Big 4 have been going short this ongoing rally in that precious metal. Not by much, but it's such a tiny market, it doesn't take much to change the percentages by a lot, especially when the '5 through 8' large traders are sitting pat.
The set up for Ted's double cross scenario by JPMorgan of the other commercial/Managed Money traders in all four precious metals is more extreme now than he ever could have imagined in his wildest dreams, so it's even more 'locked and loaded' now after three blockbuster COT Reports in a row for silver...and gold.
And as I keep saying -- and will keep on saying...all we're waiting for now is CME CEO Terry Duffy's "event" to set it off. And after all their efforts, it's virtually inconceivable that JPMorgan will return as short seller of last resort. But if they do, it will be at prices that we can only dream about at the moment.
The September 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. They certainly were [once again] this past month!
In gold, 5 U.S. banks were net short 16,384 COMEX contracts in the September BPR...none of which belongs to JPMorgan. In August's Bank Participation Report [BPR], these same 5 U.S. banks were net short 22,961 contracts, so there's been a noticeable decrease...6,577 contracts...during this reporting period. Back in February's BPR in gold, these same 5 U.S. banks were net short 114,008 contracts. That's a drop of 97,600 contracts, or 9.8 million troy ounces in seven months. That was JPMorgan getting out of Dodge.
Also in gold, 28 non-U.S. banks are net short only 7,310 COMEX gold contracts, which is barely a rounding error per bank...261 contracts each. In the August BPR, 28 non-U.S. banks were net short 24,895 COMEX contracts, so the month-over-month decline is a very chunky 17,585 contracts. I suspect that there's at least one large non-U.S. bank in this group [probably Scotiabank] that might holds all of that amount, plus more, all by itself...as the 7,310 contracts is a net number -- and the remaining contracts...which are already an immaterial amount...divided up between the remaining 27 non-U.S. banks, would be even more immaterial.
The world's banks, with the exception of the remaining four U.S. banks, plus most likely Scotiabank, are basically gone out of the gold market. They, along with the Managed Money traders, have been left holding the bulk of the remaining short positions in gold...courtesy of JPMorgan.
As of this Bank Participation Report, 33 banks [both U.S. and foreign] are now net short only 5.0 percent of the entire open interest in gold in the COMEX futures market, which is down fifty percent from the 10.2 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 in October of 2012. Click to enlarge.
In silver, 5 U.S. banks are net short 14,527 COMEX silver contracts in September's BPR - and Ted figures that JPMorgan is now long the COMEX futures market by about 2,000 contracts, so the other four U.S. banks, whoever they might be, have been left holding the above short position all by themselves. In August's BPR, the net short position of these U.S. banks was 28,122 contracts, so the short position of the U.S. banks is down around 14,000 contracts from a month ago. All of that decrease should be attributed to JPMorgan. Since Ted stated in the August BPR that JPMorgan was short 20,000 COMEX contracts a month ago, they've improved their position month-over-month by 20,000 plus 2,000 equals 22,000 contracts. So one or more of the remaining U.S. banks had to go short the 8,000 contract difference...22,000 minus 14,000 equals, approximately...8,000 contracts. I know he'll have lots more to say about this in his weekly commentary this afternoon.
Also in silver, 25 non-U.S. banks are net short 14,073 COMEX contracts...which is down a decent amount from the 21,569 contracts that these same non-U.S. banks were short in the August BPR. I would suspect that Canada's Scotiabank still holds a goodly chunk of the short position of the non-U.S. banks. And since that's probably the case, it certainly means that a number of the remaining 24 non-U.S. banks might actually be net long the COMEX futures market in silver. But even if they aren't, the remaining short positions divided up between these other 24 non-U.S. banks are immaterial - and have always been so.
As of September's Bank Participation Report, 30 banks [both U.S. and foreign] are net short 13.4 percent of the entire open interest in the COMEX futures market in silver-which is down a very decent amount from the 21.1 percent that they were net short in the August BPR - with much, much, much more than the lion's share of that now held by four U.S. banks, other than JPMorgan...plus 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, 4 U.S. banks are now net long 2,573 COMEX contracts in the September Bank Participation Report. In the August BPR, these 4 U.S. banks were net short 622 COMEX platinum contracts, so there's been another big change for the fourth month in a row.
It's a good bet that JPMorgan has not only covered its short position in platinum, but it is now position entirely on the long side as well, just like they are in both gold and silver.
Also in platinum, 17 non-U.S. banks are net short 1,192 COMEX contracts, which is down 58.3 percent from the 2,861 contracts they were net short in the August BPR.
And to give you some idea how fast the banks have been exiting their short positions in platinum; in February's BPR...20 U.S. and non-U.S. banks were net short 29,406 COMEX platinum contracts. In September's report, this one, 21 banks have a combined long position of 2,573 contracts. That's serious short covering, dear reader.
And as of September's Bank Participation Report, 21 banks [both U.S. and foreign] are now net long 1.5 percent of platinum's open interest in the COMEX futures market, which is a dramatic change from the 6.9 percent they were collectively net short in the August BPR.
Here's the Bank Participation Report chart for platinum -- and it's obvious that they're no longer a factor. Click to enlarge.
In palladium, 4 U.S. banks were net short 3,429 COMEX contracts in the August BPR, which is up a tiny bit from the 3,146 contracts they held net short in the August BPR.
Also in palladium, 12 non-U.S. banks are net short 1,847 COMEX contracts-which is up a bit from the 1,666 COMEX contracts that these 12 non-U.S. banks were short in the August BPR. When you divide up the short positions of these non-U.S. banks more or less equally, they're also immaterial...especially when you compare them to the positions held by the 4 U.S. banks. But having said that, the short positions in palladium held by the U.S. banks are pretty much immaterial as well.
However, it's obvious from the increase that the banks having been adding to their short positions during this continuing rally in palladium, most likely to prevent it from running away to the upside, which is precisely what it would do if they weren't there to hold the price back.
But, having said all that, as of this Bank Participation Report, 16 banks [U.S. and foreign] are net short 29.3 percent of the entire COMEX open interest in palladium. In August's BPR, the world's banks were net short 20.9 percent of total open interest, so there's been a noticeable increase in the concentrated short position of the banks in this precious metal.
It's apparent that the banks can move palladium prices around even with small amounts of trading, as they are a large part of total open interest in a very tiny and illiquid market at the best of times.
The net short position of the world's banks in palladium was 18,683 contracts in total back in January of this year. Compare that with the 5,276 contracts [net] they are short in September's Bank Participation Report. But it will prove immensely difficult for them to cover these remaining short positions without blowing the price sky high.
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. That has changed completely over the last six months. Click to enlarge.
Along with today's Commitment of Traders Report, the above data in the September Bank Participation Report proves beyond all doubt that the world's bullion banks...principally JPMorgan...have been covering their short positions in all four precious metals at a furious pace for the last seven months. That process has accelerated in the last two months...especially during the last two weeks -- and for all intents and purposes [expect for the remaining short position in silver already discussed above] there are no material short positions held by any of the U.S. or non-U.S. banks in any precious metal.
We're somewhere far beyond Ted's "locked and loaded" scenario, depending on what adjective one cares to use. 'Explosively bullish' is the best I can do, but even that description doesn't do the current set-up justice.
All we're [still] waiting for is CME CEO Terry Duffy's "event" that will set it off.
I have a very decent number of stories for you today.
I've never viewed the 2008 fiasco as a "failure of the free markets." It was instead an abject failure of policy making - of government policy and central bank doctrine and methods. At its roots, the crisis was the inevitable consequence of unsound money and Credit - finance that over time became increasingly unstable specifically because of government intervention and manipulation. "Activist" central banks were manipulating the price of finance and the quantity and allocation of Credit, along with increasingly heavy-handed interventions to backstop dysfunctional markets.
The crisis was a predictable failure in inflationism. Sure, it's reasonable to blame the reckless behavior of Wall Street. But risk-taking, leveraging, speculation and chicanery were all incentivized by policy measures employed to inflate both asset prices and the general price level.
Instead of crisis focusing attention on the root causes of perilous financial and economic fragilities, it was a panicked backdrop conducive to only more egregious government and central bank intervention. Rather than exhaustive discussions of the roles played by "The Maestro's" "asymmetric" market-friendly policy approach, Bernanke's pledge of "helicopter money," and central bank "puts" in inflating the Bubble, Dr. Bernanke was the superhero figure with the smarts, determination and academic creed to reflate the securities markets for the good of humanity. It was a grand illusion: Enlightened inflationism was viewed as the solution - and not the core problem that it was. And inflationists - including the FT's Martin Wolf - cheered on zero rates, Trillions of QE and the resulting inflation of the greatest Bubble in human history.
Doug's weekly Credit Bubble Bulletin is always a must read for me -- and I doubt this one is an exception. I'll get around to reading it after I crawl out of bed tomorrow. Another link to it is here.
In August, the Federal Reserve was supposed to shed up to $24 billion in Treasury securities and up to $16 billion in Mortgage Backed Securities (MBS), for a total of $40 billion, according to its QE-unwind plan - or "balance sheet normalization." The QE unwind, which started in October 2017, is still in ramp-up mode, where the amounts increase each quarter (somewhat symmetrical to the QE declines during the "Taper"). The acceleration to the current pace occurred in July. So how did it go in August?
The Fed released its weekly balance sheet Thursday afternoon. Over the period from August 2 through September 5, the balance of Treasury securities declined by $23.7 billion to $2,313 billion, the lowest since March 26, 2014. Since the beginning of the QE-Unwind, the Fed has shed $152 billion in Treasuries:
The Fed is also shedding is pile of MBS. Under QE, the Fed bought residential MBS that were issued and guaranteed by Fannie Mae, Freddie Mac, and Ginnie Mae. Holders of residential MBS receive principal payments as the underlying mortgages are paid down or are paid off. At maturity, the remaining principal is paid off. To keep the balance of MBS from declining after QE had ended, the New York Fed's Open Market Operations (OMO) kept buying MBS.
This 4-chart article was posted on the wolfstreet.com Internet site on Thursday. Some kind reader sent it to me on that date, but I decided not to post it. But when I received it from Richard Saler on Friday, I had a change of heart. Another link to it is here.
You'll recall that it turned America from a big importer of oil to a major exporter... and revived much of the heartland with big fracking projects in woebegone regions of Texas and North Dakota.
The shale oil boom was even credited with having scuttled the oil market, which dropped from a high of around $130 a barrel in mid-2008 to under $30 in late 2016, thanks to so much new supply.
But guess what? The whole boom was fake. It didn't add to wealth; it subtracted from it.
Accumulated losses over the last five years tote to more than $200 billion, with $36 billion lost in the Bakken shale fields in North Dakota alone.
Had credit been priced properly, it never would have happened. From The New York Times:
The 60 biggest exploration and production firms are not generating enough cash from their operations to cover their operating and capital expenses. In aggregate, from mid-2012 to mid-2017, they had negative free cash flow of $9 billion per quarter.
These companies have survived because, despite the skeptics, plenty of people on Wall Street are willing to keep feeding them capital and taking their fees. From 2001 to 2012, Chesapeake Energy, a pioneering fracking firm, sold $16.4 billion of stock and $15.5 billion of debt, and paid Wall Street more than $1.1 billion in fees, according to Thomson Reuters Deals Intelligence. That's what was public. In less obvious ways, Chesapeake raised at least another $30 billion by selling assets and doing Enron-esque deals in which the company got what were, in effect, loans repaid with future sales of natural gas.
But Chesapeake bled cash. From 2002 to the end of 2012, Chesapeake never managed to report positive free cash flow, before asset sales.
This interesting and very worthwhile commentary from Bill appeared on the bonnerandpartners.com Internet site very early yesterday morning EDT -- and another link to it is here.
Wednesday came leaks in The Washington Post from Bob Woodward's new book, attributing to Chief of Staff John Kelly and Gen. James Mattis crude remarks on the president's intelligence, character and maturity, and describing the Trump White House as a "crazytown" led by a fifth- or sixth-grader.
Kelly and Mattis both denied making the comments.
Thursday came an op-ed in The New York Times by an anonymous "senior official" claiming to be a member of the "resistance ... working diligently from within to frustrate parts of his (Trump's) agenda."
A pedestrian piece of prose containing nothing about Trump one cannot read or hear daily in the media, the op-ed caused a sensation, but only because Times editors decided to give the disloyal and seditious Trump aide who wrote it immunity and cover to betray his or her president.
The transaction served the political objectives of both parties.
While the Woodward book may debut at the top of The New York Times best-seller list, and "Anonymous," once ferreted out and fired, will have his or her 15 minutes of fame, what this portends is not good.
For what is afoot here is something America specializes in - regime change. Only the regime our establishment and media mean to change is the government of the United States. What is afoot is the overthrow of America's democratically elected head of state.
This very worthwhile commentary by Pat put in an appearance on the buchanan.org Internet site at 1:01 a.m. EDT on Friday morning -- and it's definitely worth reading. I thank Phil Manuel for pointing it out -- and another link to it is here.
The worst drought in years in the western half of the United States has sparked hundreds of wildfires, has crippled thousands of farms, and has produced what could ultimately be the worst water crisis in modern American history.
As you will see below, Lake Powell and Lake Mead have both dropped to dangerously low levels, and officials are warning that we may soon be looking at a substantial shortfall which would require rationing. Unfortunately, many in the eastern half of the country don't even realize that this is happening. The mighty Colorado River once seemed to be virtually invulnerable, but now it doesn't even run all the way to the ocean any longer. Demand for water is continually increasing as major cities in the Southwest continue to grow, and this is happening at a time when that entire region just keeps getting drier and drier. To say that we are facing a "water crisis" would be a major understatement.
I have written quite a bit about the drought in the Southwest in recent months, and it just keeps getting worse. According to Forbes, more than half the nation is now experiencing some level of drought... Drought conditions across the United States have worsened throughout the summer, culminating in more than half the country experiencing abnormally dry or drought conditions by the end of August. The latest update of the United States Drought Monitor shows that more than half of the country-nearly 56 percent-is abnormally dry or mired in a full-on drought. More than a third of the country is experiencing drought conditions, and almost eight percent is in an extreme or exceptional drought.
This very worthwhile commentary was posted on the Zero Hedge website on Wednesday morning -- and I was saving it for my Saturday missive -- and here it is. Another link to it is here.
Amidst extreme tensions ratcheting up over the past days as Russian and Syrian forces have initiated their final assault on al-Qaeda held Idlib, the presidents of Iran, Russia, and Turkey are meeting in what's broadly described as a "high stakes summit" in Tehran on Friday.
Pressure is high after Thursday evening statements by a top State Department envoy on Syria, who told reporters, "There is lots of evidence that chemical weapons are being prepared." The envoy, Jim Jeffrey, doubled down on prior promises that "Assad would be guilty" for any future chemical attack in Syria.
But it seems what appears to be a coordinated White House effort at calculated pressure to deter the Syria-Russia operation in Idlib is having an effect. An early statement from the summit carried in Iran state media says Iran, Russia, and Turkey have agreed that the Syria conflict can only end through "negotiated political process" and not through military means.
Turkey's President Recep Tayyip Erdogan reportedly pushed for a cease-fire plan at the summit, warning that the massive Idlib battle would be "a bloodbath" and will be a serious national security threat to his country, and further warned of a "humanitarian catastrophe" unfolding.
However Russian President Vladimir Putin underscored Syrian sovereignty and Assad's "right" to regian control over territory currently held by terrorists. This, in line with President Assad's prior promises to "regain every inch" of Syrian national territory before the war.
"Idlib isn't just important for Syria's future, it is of importance for our national security and for the future of the region," Erdogan said during formal statements at the Friday summit. "Any attack on Idlib would result in a catastrophe. Any fight against terrorists requires methods based on time and patience," he added, saying "we don't want Idlib to turn into a bloodbath." He concluded "We must find a reasonable way out for Idlib."
This story is also from the Zero Hedge website. It was posted there at 8:20 p.m. EDT on Friday evening -- and another link to it is here.
In a recent article, Paul Craig Roberts directly asked me a very important question. Here is the relevant part of this article (but please make sure to read the full article to understand where Paul Craig Roberts is coming from and why he is raising this absolutely crucial issue):
So, the questions for Andrei Martyanov, The Saker, and for Putin and the Russian government is: How long does turning your other cheek work? Do you turn your other cheek so long as to allow your opponent to neutralize your advantage in a confrontation? Do you turn your other cheek so long that you lose the support of the patriotic population for your failure to defend the country's honor? Do you turn your other cheek so long that you are eventually forced into war or submission? Do you turn your other cheek so long that the result is nuclear war?
I think that Martyanov and The Saker agree that my question is a valid one.
First let me immediately state that I do find this question valid, crucial even, and that is a question which I have been struggling with for several years now and that still keeps me up at night. I think that this question ought to be raised more often, especially by those who care for peace and oppose imperialism in all its forms and I am grateful to Paul Craig Roberts for raising it.
This rather long -- and somewhat involved commentary by the Saker showed up on his Internet site yesterday sometime -- and the first person through the door with it was Larry Galearis. Another link to it is here.
Will the war in Syria never end? Will the international proxy war and stand-off between Russia, the United States, Iran, and Israel simply continue to drift on, fueling Syria's fires for yet more years to come? It appears so according to an exclusive Washington Post report which says that President Trump has expressed a desire for complete 180 policy shift on Syria.
Only months ago the president expressed a desire "to get out" and pull the over 2,000 publicly acknowledged American military personnel from the country; but now, the new report finds, Trump has approved "an indefinite military and diplomatic effort in Syria".
The radical departure from Trump's prior outspokenness against militarily pursuing Syrian regime change, both on the campaign trail and during his first year in the White House, reportedly involves "a new strategy for an indefinitely extended military, diplomatic and economic effort there, according to senior State Department officials".
This even though one of the Pentagon's main justifications for being on Syrian soil in the first place - the destruction of ISIS - has already essentially happened as the terror group now holds no significant territory and has been driven completely underground.
But most worrisome about the Post report is that sources said to be close to White House policy planning on Syria suggest that Trump has made a commitment to pursuing regime change as a final goal.
No surprises with this article, as Trump just rubber stamps whatever the deep state sticks under his nose. This item is also from the Zero Hedge website -- and it's courtesy of Brad Robertson. Another link to it is here.
Update 2: The situation in the southern Iraq city of Basra is continuing to escalate after rioters burned down the city's sprawling Iranian consulate, and amidst unconfirmed rumors that the local American consulate may be under threat, though said to be under heavy guard by Iraqi national forces.
During the night hours Friday protesters have reportedly stormed an oil facility and are holding two staff workers hostage. The incident is unfolding at the West Qurna 2 oilfield, which is run by the Russian multinational energy company Lukoil.
According to a breaking Reuters report:
Protesters entered a water treatment facility linked to the West Qurna 2 oilfield, managed by Lukoil, and held two Iraqi employees hostage on Friday, according to a Lukoil source and a source with Basra's energy police.
The precise identities of the hostages or the particular group holding them is still unknown at this point. Lukoil is a Moscow-based corporation.
Iraqi authorities in Basra have declared a city-wide curfew as well as a state of emergency.
This news story appeared on the Zero Hedge website at 4:12 p.m. on Friday afternoon EDT -- and another link to it is here.
An on the ground report by the Associated Press details the disastrous effects of the Iranian rial's continuing slide as it hit a record low starting Wednesday: residents in Tehran are frantically lining up outside money changing offices, diapers and many basic staples have disappeared from store shelves, and hard currency only is being demanded even to book an airline ticket.
The rial has this week plummeted 140 percent since the United States withdrew from the Iran nuclear deal a mere four months ago in May.
Local and international reports indicate that on Wednesday the national currency began trading at over 150,000 rials to $1USD in the currency exchange shops of Tehran.
As the AP reports, "Those who went to work at the start of the Iranian week on Saturday saw their money shed a quarter of its value by the time they left the office on Wednesday." There's a sense of nervousness and panic in the air according to the report, with a rush to find black market money changers on the streets, even though state media has yet to acknowledge just how low the true value of the rial has fallen.
Meanwhile Iran's top leadership continues to lash out at Washington for stripping common citizens of their daily needs. In a speech over the past weekend Iran's supreme leader Ayatollah Ali Khamenei, condemned the U.S. sanctions as economic "sabotage" while making specific mention of diaper shortage.
As quoted by the AP, budget head Mohammad Bagher Nobakht lamented of what's to come, describing a future of "long queues in front of the shops, like money exchange houses, that can create an ugly scene in the city alleys and streets." But it appears Tehran is already deep in the midst of this, and such scenes will only get worse.
Of course this crisis is 100 percent "Made in America". This news item put in an appearance on the Zero Hedge website at 9:50 a.m. EDT on Friday morning -- and another link to it is here.
Gazprom's Power of Siberia natural gas pipeline from Russia to China is 93 percent complete, the Russian gas giant said in an update on its major projects.
A total of 2,010 kilometers (1,249 miles) of pipes are laid for the Power of Siberia gas pipeline between Yakutia and the Russian-Chinese border, or on 93 percent of the route's length, Gazprom said in a statement.
The natural gas pipeline is expected to start sending gas to China at the end of 2019 and its completion is among Gazprom's top priorities.
The two-string submerged crossing of the Power of Siberia pipeline under the Amur River is 78 percent complete, and the Atamanskaya compressor station adjacent to the border is also under construction, the Russian company says.
Gazprom has a 30-year contract with CNPC for the supply of an annual 1.3 trillion cu ft of natural gas via the infrastructure.
This interesting news item, courtesy of the oilprice.com Internet site, was picked up by the folks at Zero Hedge yesterday -- and it comes to us courtesy of Brad Robertson. Another link to it is here.
The Friday moment everyone has been waiting for, namely whether or not Trump would greenlight the next $200BN in China tariffs now that the comment period is over. Moments ago we got the answer when Trump, speaking to reporters on board of Air Force 1, just said that he is ready to impose another $267BN in China tariffs in addition to the $200 billion proposed that his administration is putting the final touches on.
The implementation of tariffs on $200 billion of products from China "will take place very soon depending on what happens," Trump told reporters on Air Force One on Friday. "I hate to do this, but behind that there is another $267 billion ready to go on short notice if I want."
This would mean that Trump would be taxing a grand total of $517BN in Chinese exports ($50BN + $200BN +$267BN). Putting China's exports to the U.S. in context, it was $505BN in 2018, suggesting Trump's total proposal would more than cover all of Chinese trade with the U.S. It was also not clear what tariff rate Trump had in mind for either the new $267BN or existing $200BN in tariffs.
The news comes one day after the Dept of Commerce announced that the US trade deficit with China hit an all time high $36.9 billion in July.
Meanwhile, in terms of actionable developments, there were none, because for all those expecting Trump to launch the $200BN in 2nd round tariffs today, Trump suggested that nothing is imminent, saying that the tariff "will take place very soon depending on what happens"... but not today.
This is another Zero Hedge item. This one showed up on their Internet site at 3:15 p.m. EDT yesterday afternoon -- and another link to it is here.
The battle to end taxation of constitutional money has reached the federal level as U.S. Representative Alex Mooney (R-WV) today introduced sound money legislation to remove all federal income taxation from gold and silver coins and bullion.
The Monetary Metals Tax Neutrality Act - backed by the Sound Money Defense League, Money Metals Exchange, and free-market activists - would clarify that the sale or exchange of precious metals bullion and coins are not to be included in capital gains, losses, or any other type of federal income calculation.
"My view, which is backed up by language in the U.S. Constitution, is that gold and silver coins are money and...are legal tender," Mooney said in a House Financial Services Committee hearing this week. "If they're indeed U.S. money, it seems there should be no taxes on them at all. So, why are we taxing these coins as collectibles?"
Acting unilaterally, the Internal Revenue Service has placed gold and silver in the same "collectibles" category as artwork, Beanie Babies, and baseball cards, a classification that subjects the monetary metals to a discriminatorily high long-term capital gains tax rate of 28%.
Sound money activists have long pointed out it is inappropriate to apply any federal income tax, regardless of the rate, against the only kind of money named in the U.S. Constitution. And the IRS has never defended how its position squares up with current law.
This interesting news item appeared on the moneymetals.com Internet site yesterday -- and I found it in a GATA dispatch. Another link to it is here.
Gold swaps and gold derivatives undertaken by the Bank for International Settlements appear to have declined by about 24 percent in August, according to the bank's statements of account for that month and July:
The information provided in the BIS' monthly statements is not sufficient to calculate a precise amount of gold-related derivatives, including swaps, but the bank's total estimated exposure as of August 31 was about 370 tonnes of gold, down 115 tonnes from the approximately 485 tonnes as of July 31.
The bank's gold swaps and derivatives had increased by 17 percent from June through July. During this period the gold price fell by about $100 per ounce.
The BIS provides little information on what it is doing in the gold market, why, and for whom and refuses to answer questions about its activity in the market.
Of course the big decline in gold prices is almost entirely due to the manic short covering during the engineered price decline in the COMEX futures market...led by JPMorgan. This gold related news item appeared on the gata.org Internet site on Thursday -- and another link to it is here.
In less than five minutes, orders placed Sept. 6 for the Proof 2018-W American Eagle $25 palladium coin were sufficient to put the numismatic product into "Currently Unavailable" status.
The product is limited to a maximum release of 15,000 coins; the Mint sold 14,782 examples.
Customers ordering the numismatic product were restricted to purchasing one coin per household. The Mint-determined price for each coin was $1,387.50.
A "Currently Unavailable" status does not automatically mean a sellout. The product notice on the Mint's website states: "We are currently out of this item, but more may be available later. Provide your email using the 'REMIND ME' button and we will let you know when we are taking orders again."
Mint spokesman Michael White said the orders placed are being reconciled to ensure proper processing of orders. Some orders are likely to be canceled because of expired credit cards or because the person placing the order chooses to cancel the sale on their own, White said. Any coins that are available after the order reconciliation, provided the maximum is not reached, will be offered first to customers in the order in which orders were placed but not filled because of the ending of initial sales, White said.
Even before sales got underway, some dealers were offering bounties of up to $500 per coin to anyone successful in placing an order and willing to resell the coin to the dealer making the guaranteed profit offer.
Wow! I'm impressed! This news story put in an appearance on the coinworld.com Internet site yesterday sometime -- and another link to it is here.
"We receive appeals, including from banks, which say that customers are ready to pay significant sums, billions of rubles, to buy gold, while the client wants to be able to take a couple of bars when he needs it. If this measure allows we even return capital worth tens of billions [of rubles], it will be justified," the deputy minister said at the Moscow Financial Forum.
The issue is still being discussed, and now there is an additional impulse to solve it, he said.
"You can see that the state pays much attention to the repatriation of capital. It turned out that a number of citizens would like to repatriate their capital, but invest it not in the banking system but in gold bars. This is a personal right, but the VAT is now an obstacle for this," Moiseyev said
Now, citizens buying gold in the bank are obliged to pay VAT, which is now 18 percent, and will be increased to 20 percent starting next year. At the same time, when selling ingots, the bank is not returning VAT. The question of canceling the tax has been discussed in the ministry since last year, but initially, the ministry wanted to solve the issue via a system much alike the trade-in in the car sales. It planned to exempt from VAT only gold bought for investment purposes, and not the one used by jewelers.
This would make a monstrous difference to gold bullion sales to the average Russian citizen. They should have done this years ago. Let's hope it gets the OK...and soon. This very worthwhile gold-related news item was posted on the sputniknews.com Internet site at 4:29 a.m. Moscow time on their Friday morning, which was 9:29 a.m. in Washington -- EDT plus 7 hours. I found this on the Sharps Pixley website -- and another link to it is here.
The Bank of Mongolia said Thursday that it had purchased 12.2 tonnes of gold from legal entities and individuals in the first eight months of this year.
The figure is the same as the amount of gold purchases in the first eight months of 2017, the central bank said in a statement.
As of August, the bank's average gold purchase price was 95,042.34 Mongolian tugrik (about 38 U.S. dollars) per gram.
"The Bank of Mongolia has set a target to buy 22 tonnes of gold this year. If we reach this goal, the foreign exchange reserves will increase by at least 700 million U.S. dollars," Byadran Lkhagvasuren, vice chairman of the Bank of Mongolia, told reporters, adding "September and October are peak season for gold mining. So, we believe the goal will be fulfilled."
This gold-related story, filed from Ulan Bator/Ulaanbaatar, put in an appearance on the xinhuanet.com Internet site on Thursday sometime -- and it's another article I lifted from the Sharps Pixley website. Another link to it is here.
The PHOTOS and the FUNNIES
My one day at the pond earlier this week yielded a lot of goodies -- and this migrating great blue heron was another. This looks like an adult male, not in his breeding plumage -- and close up, he looks pretty ratty. For the last shot of this 4-photo sequence, I was so close that I had to actually back up a bit to get him all in the frame of my big telephoto lens. And it wasn't until I got this photo sequence up on the computer screen at home did I realize that he had been standing on one leg the whole time. Click/double click to enlarge.
Today's pop 'blast from the past' is one that I stumbled across back in November 2016 -- and I've been a monstrous fan of this group ever since. I was looking for a tune by the American rock band Chicago at the time, when I stumbled across a cover of it by a group from Moscow called Leonid and Friends. This tune is timeless -- and their cover of it was posted on the youtube.com Internet site two years ago next week -- and I thought it time for a revisit. The link is here. Enjoy!
Today's classical 'blast from the past' is tinged with fall, because at our latitude, we're deep into it. The leaves have been changing colour for a month already and nights are growing very cool -- and we've already had our first touch of frost. Here's Antonio Vivaldi's Concerto No. 3 in F major, Op. 8, RV 293 "L'autunno"...Autumn. Anne Sophie Mutter does honours as soloist. I saw her perform Beethoven's violin concerto in Hong Kong with the Boston Symphony about 30-odd years ago -- and I still have the ticket stub somewhere. She's aged better than I. The link is here.
To me, it was just another day of careful price management in the precious metals on Friday, with the first coming [for no reason at all] like a bolt of lightning out of a clear blue sky shortly after 11 a.m. in Shanghai, the next time at the release of the job numbers in New York -- and then almost all of palladium's decent gains were engineered away shortly after 12 o'clock noon EDT. Nothing to see here folks, please move along.
Here are the 6-month charts for all four precious metals, plus copper and WTIC -- and the only thing worth noting is that West Texas Intermediate crude oil was closed at a slight new low for this move down -- and that would certainly be a sign for the brain-dead/moving average-following Managed Money traders to go further short. The 'click to enlarge' feature helps a bit with the first four.
But underlying the rather unremarkable price performance of the last few days, is now a COMEX market structure in these Big 6 commodities that I never thought possible -- and the above charts give no hint of. I've completely run out of adjectives and superlatives to describe the current situation -- and 'explosive' doesn't come close to doing it justice. Perhaps Ted will be able to define it for us, as he's a better wordsmith than I.
But out there in the real world, the number of possible black swans is starting to increase at an exponential rate. Not so much due to natural forces in the equity or currency markets, but the ever-increasing shoving by the U.S. deep state...not only against Donald Trump, but also all parties involved in the Syrian conflict...principally Russia.
The final battle coming in the Syrian city of Idlib, could be one of several 'events' that may be the start of something far more serious. The deep state wants a war/proxy war with Russia et al so badly, that you can almost taste it in the main stream media -- and in Washington...regardless of the consequences.
The Russians and Syrians are far too smart and level-headed to ever give these warmongers an excuse...but that won't stop them for one minute. Because the deep state will make one up if they need to -- and the opportunities for 'false flag' operations in this environment are pretty much limitless. This telegraphed 'gas attack' is made to measure, but has already been declared as such by all parties, except for the deep state, of which Nicky Haley is a card-carry member.
I've said it before -- and I'll say it again here now...the sociopathic/psychopathic personality types that make up the deep state should not be underestimated. They don't give a damn about whatever collateral damage is caused, or who gets trampled underfoot on the way...friend or foe alike.
But whatever sets this whole area ablaze -- and it's coming just as sure as the sun will rise in the east tomorrow morning, I suspect will be the event that begins the short squeeze in the Big 6 commodities that will be one for the ages. And I have some suspicion that this event will be precipitated for exactly that reason...amongst others, of course.
Once it's all over, the world we know today won't exist in its current form -- and I must admit that I'm more than fearful for what may take its place.
So, like you, I'm all in favour of higher precious metal prices...very high precious metal prices as a matter of fact. But as I've said before, I should be careful what I wish for...in some respects.
And with the 17th anniversary of 9/11 only a few days away as well, all eyes should be on the U.S. deep state -- and whatever upcoming treachery they have planned.
I'm done for the day -- and the week -- and I'll see you here on Tuesday.
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