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Palladium Melts Up

 -- Published: Sunday, 19 January 2020 | Print  | Disqus 


Gold was sold lower by a few dollars by 9 a.m. CST in Far East trading on their Friday morning -- and that proved to be the low tick of the day.  From that juncture it headed quietly higher until minutes before 2 p.m. China Standard Time on their Friday afternoon.  It edged lower until the 10:30 a.m. morning gold fix in London -- and then began to head higher with a bit more authority.  The Big 8 traders showed up about five minutes before the 8:20 a.m. COMEX open -- and sold it lower until a few minutes after 9 a.m. in New York trading.  It crawled a bit higher into the 10 a.m. EST afternoon gold fix in London --- and was then sold lower until around 10:20 a.m.  Another quiet and steady rally commenced at that point -- and that petered out a few minutes before the 1:30 p.m. EST COMEX close.  It didn't do much of anything after that until some not-for-profit seller took it lower in after-hours trading -- and from around 4 p.m. onwards, it trade flat until the market closed at 5:00 p.m. in New York.

Despite all the jumping around, the low and high ticks aren't worth looking up.

Gold was closed on Friday afternoon in New York at $1,556.70 spot, up $4.80 on the day.  Net volume was reasonably quiet at about 215,500 contracts -- and there was 50,500 contracts worth of roll-over/switch volume out of February and into future months in this precious metal.

The silver price crept quietly higher in morning trading in the Far East yesterday -- and it was above $18 spot by a few pennies by around 1:20 p.m. in Shanghai on their Friday afternoon.  At that point, the battle for the $18 spot mark began in earnest.  From 9 a.m. in London, the silver price began to tick higher -- and really began to sail at 1 p.m. GMT/8 a.m. EST.  Like in gold, 'da boyz' put their foot down five minutes before the COMEX open -- and also like gold, the New York low was set around 10:20 a.m. EST.  After that, the price pattern for silver was almost similar to gold's.

The low and high ticks in silver were reported by the CME Group as $17.905 and $18.185 in the March contract.

Silver was closed in New York on Friday at $18.000 spot, up 10 cents from Thursday...and 24 cents off its Kitco-recorded high tick of the day.  Not surprisingly, net volume was pretty decent at a bit over 67,000 contracts, as it took a fair amount of paper fire power to cap and turn silver prices lower during early morning trading EST.  There was 2,200 contracts worth of roll-over/switch volume on top of that.

Platinum worked its way quietly and somewhat unevenly higher until around 12:45 p.m. in Zurich on their Friday afternoon.  It jumped up about 10 dollars at that juncture, but the price appeared to get capped at that point -- and from there until the trading ended in New York at 5:00 p.m. EST, the platinum price chopped unevenly sideways.  Platinum finished the Friday session at $1,022 spot, up 18 dollars on the day -- and 11 bucks of its Kitco-recorded high tick of the day.

The palladium price crept quietly and somewhat unevenly higher until 8:30 a.m. in New York -- and it blasted higher from there in what had all the hallmarks of a short-covering rally of some size.  The price was capped and turned lower around 10:15 a.m. in New York -- and that sell-off lasted until a few minutes before 1 p.m. EST.  It crawled quietly and unevenly higher from there until the market closed at 5:00 p.m.  There's something wrong with Kitco's price feed for palladium, as it shows it closing down $76 dollars on the day at $2,295 spot, which is obviously wrong.  Adding that 76 bucks back into that $2,295 reported close, shows that palladium actually finished the Friday session at $2,371 an ounce...up $138 on the day, but an eye-watering $230 bucks off its Kitco-recorded high tick.

This price move was all paper positioning on the COMEX because, as Ted Butler pointed out on the phone yesterday, palladium is now a cash and carry physical market.  Yesterday's rally was just the sign of some traders that were screaming in pain on the short side, booking some big margin call loses.  I expect there will be more to come, because as I've been saying for many months now...heaven only knows what the palladium price would be if there wasn't a COMEX futures market attached to it.

The dollar index closed very late on Thursday afternoon in New York at 97.32 -- and opened down about 3 basis points once trading commenced around 7:45 p.m. EST on Thursday evening, which was 8:45 a.m. China Standard Time on their Friday morning.  From that juncture the index traded quietly sideways until a few minute before 8:30 a.m. in London.  A 'rally' commenced at that point -- and that lasted until the 97.66 high tick was printed around 10:42 a.m. in New York.  It traded sideways into the 5:00 p.m. EST close from there.  The dollar index finished the Friday session at 97.61...up 29 basis points from its close on Thursday.

The only correlation between the currencies and precious metal prices was when JPMorgan et al. made it so during their engineer price declines in the COMEX futures market in morning trading in New York.

Here's the DXY chart for Friday, courtesy of Bloomberg as always.  Click to enlarge.

And here's the 5-year U.S. dollar index chart, thanks to the good folks over at the Internet site.  The delta between its close...97.36...and the close on the DXY chart above, was 25 basis points on Friday.  Click to enlarge as well.

The gold stocks gold sold off almost as soon as trading commenced in New York at 9:30 a.m. on Friday morning -- and their respective low ticks came around 10:15 a.m. EST.  At that point the gold price began to rally -- and the gold shares followed rather reluctantly. But once the gold price began to roll over around 2:15 p.m. EST, the shares eagerly followed -- and the HUI closed down 1.63 percent.

The silver equities got hammered...but followed the same general price path as their golden brethren, so I'll spare you the play-by-play.  Nick Laird's Intraday Silver Sentiment/Silver 7 index got clocked by 4.33 percent.  Click to enlarge if necessary.

Here's Nick's 1-year Silver Sentiment/Silver 7 Index chart, updated with Friday's doji.  Click to enlarge as well.

Coeur Mining was the BIG loser...closing down 16.64 percent, followed by First Majestic Silver...down 4.71 percent -- and Hecla...down 4.02 percent.  Wheaton Precious Metals was the only one of Nick's Silver 7 that finished in the green...up a tiny 0.68  percent.
I fired off an e-mail to Todd Anthony, the I.R. guru over at First Majestic Silver asking why the silver equities were down so much considering the price action -- and this is what he had to say:

"Hi Ed - It is indeed a strange trading day considering the metals are up and the equities are under pressure.

Given that PAAS and CDE both disappointed the market with their 2020 guidance, I think guys are taking profits on First Majestic in advance of our 2020 guidance release next Tuesday. That's the only thing that I can assume at this moment.  

It's a good buying opp!"

I'll certainly agree that it's a great buying opportunity if you're looking for an entry point.  But personally, I'm sick of "good buying opps" I'm up to my neck in silver equities -- and I ain't buying any more.

And as an aside, I called Coeur Mining late on Friday morning to see if they had an explanation for why their stock price was sucking wind big time.  Not only was there no answer when I called their main switchboard -- and no way to leave a e-mail to their i.r. guy has received no reply as of this writing.

Here are two of the usual charts from Nick that show what's been happening for the week, month -- 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 if the silver equities hadn't been trashed the way they were on Friday, everything would be green across the board.  Platinum and palladium were the stars this week.  Click to enlarge.

And here's the month-to-date chart, which is identical to the year-to-date chart during January.  Even though gold and silver are up tiny amounts on the year, the precious metal equities have been smoked.  Palladium is the big star so far this year, just like it was last year.

As Ted has been pointing out for some time now, how silver and gold prices unfold from here depends on whether or not the Big 7/8 commercial traders that are holding huge but unrealized loses on the short side, are able to snooker the Managed Money traders out of their historic and unprecedented net long position.  To date, they haven't been very successful -- and they made little meaningful headway in this week's COT Report.  But as for the negative start to the year for the precious metal equities...this too shall pass.

The CME Daily Delivery Report showed that 78 gold and 70 silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.

In gold, there were three short/issuers in total...JPMorgan, Credit Suisse and Advantage, with 50, 23 and 5 contracts -- and all out of their respective client accounts.  There were six long/stoppers in total -- and the three biggest were Scotia Capital/Scotiabank with 49 for its own account, followed by Advantage and Morgan Stanley, with 14 and 8 contracts for their respective client accounts.

In silver, the two short/issuers were JPMorgan and Advantage, with 66 and 4 contracts -- and all from their respective client accounts.  There were four long/stoppers in total -- and the three that mattered were Scotia Capital/Scotiabank with 43 for its own account...then came Morgan Stanley and ADM, with 18 and 8 contracts for their respective client accounts.

The link to yesterday's Issuers and Stoppers Report is here.

So far in January there have been 2,657 gold contracts issued/reissued and stopped -- and that number in silver is 517.

The CME Preliminary Report for the Friday trading session showed that gold open interest in January rose by another 9 contracts, leaving 96 still open, minus the 78 contracts mentioned a few paragraphs ago.  Thursday's Daily Delivery Report showed that 39 gold contracts were actually posted for delivery today, so that means that 39+9=48 more gold contracts were just added to the January delivery month.  Silver o.i. in January also rose again, by 22 contracts, leaving 73 still around, minus the 70 contracts mentioned a few paragraphs ago.  Thursday's Daily Delivery Report showed that 44 silver contracts were actually posted for delivery today, so that means that 44+22=66 more silver contracts just got added to January.

There was a monster deposit into GLD yesterday, as an authorized participant added and eye-watering 621,348 troy ounces...19.33 metric tonnes.  That's the biggest 1-day addition to GLD that I can remember.  There were no reported changes in SLV.

In other gold and silver ETFs on Planet Earth on of any COMEX, GLD & SLV activity...there was a net 39,303 troy ounces of gold added, but there was a net 118,063 troy ounces of silver withdrawn.

The U.S. Mint finally got around to updating its website with the current sales for January.  So far this month/year they've sold 34,000 troy ounces of gold eagles -- 10,500 one-ounce 24K gold buffaloes -- and 2,298,000 silver eagles.

There was no in/out movement in gold over at the COMEX-approved depositories on the U.S. east coast on Thursday.

There was some activity in silver, as one truckload...608,525 troy ounces...was dropped off at Canada's Scotiabank -- and that's all in the 'in' activity there was.  In the 'out' category, one truckload...631,667 troy ounces...departed CNT -- and the remaining 990 troy good delivery bar...was shipped out of Brink's, Inc.  There was some paper activity as well...265,657 troy ounces was transferred from the Eligible category and into Registered at Scotiabank -- and 15,453 troy ounces went in the same direction over at Brink's, Inc.  The link to all this is here.

There was more big movement over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday.  They reported receiving 2,000 of them -- and shipped out 5,060.  All this activity was at Brink's, Inc. of course -- and the link to that, in troy ounces, is here.

Russia, Nikolaus I., 1825-1855, 3 Rubel 1829

Material: Platinum     Full Weight: 10.25 grams

The Commitment of Traders Report, for positions held at the close of COMEX trading on Tuesday, January 14 certainly wasn't what I was expecting -- and Ted was quite correct in not sticking his neck out as to what it might contain -- and I was wrong yet again.

I'm done trying to outguess this guy, as I've never been right even once, so you think I'd know better by now.  As I said in last Saturday's missive, Ted has a lifetime of experience in this field -- and is the only precious metal commentator that does.  That's why I stick to him like glue.

Without him, how would would the rest of us have figured out that JPMorgan had taken over Bear Stearns, or that U.S. or Canadian Mint sales were being gobbled up by them as well. 

Then there's the massive amounts of silver and gold that Jamie Dimon is sitting on.  And neither I nor anyone else would have ever figured out the direct correlation between the Managed Money traders and the price of gold and silver...or JPMorgan's short positions in gold and silver on the COMEX.

Everything I learned about the precious metals I learned from him.  So did every other precious metal commentator...whether they will admit it or not.  Everything about silver and gold has gone through him first.  People like myself have benefited from his experience -- and I'm more than happy to pass it along what I have learned.

And if you haven't had the opportunity to read his latest commentary that was posted in the public domain on Thursday, it's headlined "The Genius of JPMorgan" -- and that's linked here.

In silver, the Commercial net short position actually rose by 1,183 contracts, or 5.9 million troy ounces of paper silver.

They arrived at that number by reducing their long position by 2,562 contracts, but they also reduced their short position by 1,379 contracts -- and it's the difference between those two numbers that represents their change for the reporting week.

Under the hood in the Disaggregated COT Report almost nothing happened in the Managed Money they added 2,763 long contracts, plus 2,598 short contracts -- and the difference between those two numbers, a piddling 165 contracts, was their change for the reporting week.

The difference between that number and the Commercial net short position...1,183 minus 165 equals 1,018 contracts.  Almost that entire amount was made up by the change in the 'Nonreportable'/small trader category, as they decreased their net long position by 1,063 contracts, as the 'Other Reportables' showed virtually no net change during the reporting week...only 45 contracts.

Of course the Big 8 commercial traders didn't do much during the reporting week, despite the huge price moves/volatility during the reporting week, they're still stuck with their huge short position -- and weren't able to improve on it at all.

Ted left JPMorgan's short position in silver unchanged at 15,000 contracts -- and the Commercial net short position in silver is now sitting at 92,357 COMEX contracts, or 461.8 million troy ounces.  That's only a minor change, but it wasn't what I was expecting.

Here's the 3-year COT chart for silver, courtesy of Nick Laird -- and there's not a lot to see.  Click to enlarge.

Considering the huge price volatility during the reporting week, Ted was surprised by these tiny changes across all categories.  So was I, of course.

In gold, the commercial net short position fell by a rather smallish 6,262 contracts, or 626,200 troy ounces of paper gold.

They arrived at that number by increasing their long position by 18,906 contracts, but they also added 12,644 short contracts -- and it's the difference between those two numbers that represents their change for the reporting week.

Under the hood in the Disaggregated COT Report, there was very little change in the Managed Money trader category in this precious metal, either.  They increased their long position by a tiny 1,319 contracts -- and added 617 short contracts.  It's the difference between those two numbers...702 contracts...was their change for the reporting week.

And as it must, that difference was made up the traders in the other two categories.  But both went about it entirely differently.

The 'Other Reportables' reduced their net long position by 3,758 contracts -- and the 'Nonreportable'/small traders decreased their net long position as well, by 3,206 contracts.  The sum of those two numbers between those two numbers...6,964 contracts represents their change for the reporting week.

The difference between that number -- and the change in the Managed Money category...6,964 minus 702 equals the change in the commercial net short position...6,262 contracts, which it must do.

In the commercial category, the Swap Dealers and Producer/Merchants obviously decreased their net short positions -- and for that reason, Ted pegs JPMorgan's short position in gold at around 32,000 contracts, down about 2,000 contracts from last week's report.

The commercial net short position in gold is still sky high at 34.98 million troy ounces.
The Big 8 commercial traders trapped on the short side in gold, managed to improve their situation this reporting week, but it was by a rather insignificant amount.

Here's the 3-year COT chart for gold from Nick, updated with this week's change -- and there's not much to see here, either.  Click to enlarge.

Like in silver, the Big 8 traders in gold are still very much trapped on the short side and didn't improve their lot by much during this past reporting week.

The commercial net short positions in both gold and silver are hugely bearish based on past history, but unless they can get the Managed Money traders to puke up their record long position, they'll never be able to cover their short positions.  So, as Ted has been pointing out for some time, if things continue the way they are, the shorts...both large and small...will be in a world of hurt if the rallies in both silver and gold continue.  He'll have lots more to say in his weekly review later today.

In the other metals, the Manged Money traders in palladium increased their net long position by 151 COMEX contracts during the reporting week -- and are net long the palladium market by 11,633 contracts...a hair over 44 percent of the total open interest.  Total open interest in palladium is 26,413 COMEX contracts.  As I keep harping on, it's a very tiny and very illiquid market. It doesn't take more than a handful of contracts to move the price by a significant amount, as you may have noticed this past week.  But because of the price action during the current reporting week, I'm expecting to see some rather substantial changes in next week's COT Report.  In platinum, the Managed Money traders increased their net long position by a further 2,039 contracts.  The Managed Money traders are net long the platinum market by 48,620 COMEX contracts...a bit over 46 percent of the total open interest. The other two categories [Other Reportables/Nonreportable] are still mega net long against JPMorgan et al. as well.  In copper, the Managed Money traders increased their long position in that metal by 6,279 COMEX contracts during the reporting week.  They are now net long copper by 5,466 COMEX contracts.  They were net short the market by a tiny amount in last week's COT Report.

Here's Nick Laird's "Days to Cover" chart, updated with the COT data for positions held at the close of COMEX trading on Tuesday, December 31. 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. Click to enlarge.

For the current reporting week, the Big 4 traders are short 157 days of world silver production...up 2 days from last week's COT Report - and the '5 through 8' large traders are short an additional 75 days of world silver production...unchanged from last week's COT Report - for a total of 232 days that the Big 8 are short...up 2 days from last week's report. This represents almost 8 months of world silver production, or about 541 million troy ounces of paper silver held short by the Big 8.  [In the prior reporting week, the Big 8 were short 230 days of world silver production.]

In the COT Report above, the Commercial net short position in silver was reported by the CME Group as 461 million troy ounces.  As mentioned in the previous paragraph, the short position of the Big 8 traders is 541 million troy ounces.  So the short position of the Big 8 traders is larger than the total Commercial net short position by around 541-461=80 million troy ounces.

The reason for the difference in those it always that Ted's raptors, the 29-odd small commercial traders other than the Big 8, are net long that amount.

Another way of stating this [as I say every week in this spot] is that if you removed the Big 8 commercial traders from that category, the remaining traders in the commercial category are net long the COMEX silver market.  It's the Big 8 against everyone else...a situation that has existed for about three decades in both silver and gold -- and now in platinum and most likely palladium as well.

As I mentioned in my COT commentary in silver above, Ted figures that JPMorgan is short around 15,000 contracts, unchanged from last week's COT Report.  That works out to around 75 million troy ounces of paper silver...which works out to around 32 days of world silver production that JPMorgan is short -- and obviously unchanged from last week's report.

Based on the numbers in the paragraph below, that still leaves JPMorgan in the #2 or #3 spot in the Big 4/8 trader category...also unchanged from where I put them in last week's COT Report.  Citigroup is by far the largest, with HSBC USA and one other to round out the Big 4.

As per the first paragraph above, the Big 4 traders in silver are short around 157 days of world silver production in total. That's about 39.25 days of world silver production each, on average.  The four traders in the '5 through 8' category are short around 75 days of world silver production in total, which is around 18.75 days of world silver production each, on average...unchanged from last week.

The Big 8 commercial traders are short 46.1 percent of the entire open interest in silver in the COMEX futures market, which is up a tiny amount from the 45.8 percent they were short in last week's COT report.  And once whatever market-neutral spread trades are subtracted out, that percentage would be around the 50 percent mark.  In gold, it's now 37.8 percent of the total COMEX open interest that the Big 8 are short, down a bit from the 38.8 percent they were short in last week's report -- and around 45 percent, once the market-neutral spread trades are subtracted out.

In gold, the Big 4 are short 65 days of world gold production, down 1 day from last week's COT Report.  The '5 through 8' are short another 40 days of world production, unchanged from last week's report...for a total of 105 days of world gold production held short by the Big 8...down 1 day from last week's COT Report.  Based on these numbers, the Big 4 in gold hold about 62 percent of the total short position held by the Big 8...unchanged from last week's report.

The "concentrated short position within a concentrated short position" in silver, platinum and palladium held by the Big 4 commercial traders are about 68, 71 and 79 percent respectively of the short positions held by the Big 8...the red and green bars on the above chart.  Silver is up about 1 percentage point from last week's COT Report...platinum is down 1 percentage point from a week ago -- and palladium is about unchanged week-over-week.

And as Ted has been pointing out for years now, JPMorgan is, as always, in a position to double cross the other commercial traders at any time and walk away smelling like a rose -- and that's because of the massive amounts of physical gold and silver they hold.  Up to this point they [obviously] haven't taken advantage of that situation.  But if they do, you'll see it in the price immediately.  Then we'll see a melt-up that makes Friday's rally in palladium look tame by comparison.

I don't have all that many stories/articles for you today.


Housing Starts Soar to Highest Since 2006 as Permits Plunge

Following October and November's bounce in starts and permits, and despite solid sales and mortgage application data, analysts expected a mixed picture for housing data today (with growth in starts slowing and permits shrinking).

However, the data was extreme to say the least with Housing Starts soaring 16.9% MoM (highest since Oct 2016) and Building Permits shrank 3.9% MoM (worse than the -1.5% expected).

This pushed Starts to their highest since Dec 2006, but permits declined to weakest since September.  Click to enlarge.

[T]he strong overall reading on starts corroborates a jump in developers' confidence. U.S. home builder sentiment posted the highest back-to-back readings since 1999 in December and January amid a jump in prospective buyers and a bump in the sales outlook.

Bloomberg notes that the data indicate residential construction added to fourth-quarter growth after contributing in the previous quarter for the first time since the end of 2017. While weather may have played a role in the month's data, demand has been fueled by mortgage rates near a three-year low as the job market remains resilient and wage gains help put money into the pockets of potential home buyers.

Good news to be sure, dear reader.  But just glancing at the embedded chart you can see that housing starts still have a long way to go to get back to where they were at the end of 2005...if they get there at all, that is.  This multi-chart Zero Hedge story showed up on their website at 8:39 a.m. EST on Friday morning -- and it's the first offering of the day from Brad Robertson.  Another link to it is here.  The Internet site had a story about his headlined "U.S. housing starts soar 16.9% in December to a 13-year high" -- and I thank Judy Sturgis for that one.

U.S. Industrial Production Suffers Worst Year Since 2015

After surging in November (by the most since Oct 2017), Industrial production was expected to contract modestly in December.

November's big jump was revised lower and the headline production printed a 0.3% MoM contraction (worse than expected), leaving U.S. industrial production down 1.01% YoY - the worst since Oct 2016.  Click to enlarge.

That makes 7 of the 12 months with contraction in 2019 and ends up being the worst year since 2015.
  • Utilities fell 5.6% in Dec. after rising 1% in November
  • Mining rose 1.3% in Dec. after falling 0.2% in November
Capacity utilization fell to 77% from 77.4% in November, revised up from 77.3%.

Manufacturing actually surprised to the upside in December (rising 0.2% MoM vs -0.1% expected), but year-over-year saw a 1.3% contraction...

And of course, the Dow Jones INDUSTRIAL Average continues to soar despite INDUSTRIAL Production remaining relatively stagnant...and that's what The Fed is for.

This 4-chart Zero Hedge article put in an appearance on their website at 9:22 a.m. on Friday morning EST -- and I thank Brad Robertson for sending it our way.  Another link to it is here Gregory Mannarino's post market close rant for Friday is linked here -- and I haven't listened to it yet, so I'm not sure that it's 'R' rated or not.  But brace yourself, as it very well could be.

No, the Government Won't Go Out of Business -- Bill Bonner

"It always ends this way. It always, always, always ends this way. It's depressing. Rome... Ming Dynasty... Zimbabwe... this end game that we're talking about.

The financial arrangements of the state are no longer sustainable... Government will not voluntarily let itself go out of business; it will use all its powers available to fund itself." - Former Director, National Economic Council, Lawrence Lindsay

Every empire finds its Berezina.

Trying to enforce his trade war against the English, Napoleon crossed the Neman River and attacked Russia. But the Russians used a strategy that would later be made famous by Mohammed Ali - rope-a-dope.

They let the French advance... even to Moscow. Then, they set fire to the city. The Grande Armée, with few supplies and winter setting in, realized it was in a trap...

We'll come back to those grim days of 1812 in a minute.

This interesting commentary from Bill was posted on the Internet site on Friday morning sometime -- and another link to it is here.

Doug Noland -- "This is Insane"

We're witness to historic developments across global financial markets that extend far beyond an equities melt-up. U.S. corporate Credit this week traded near the narrowest spreads (to Treasuries) since 2007. Popular Credit default swap (CDS) indices priced this week to pre-crisis lows - investment-grade and high yield. At 46 bps, Goldman Sachs (5-yr) CDS closed the week at the low since 2007. JPMorgan CDS fell five bps this week to 30.6, the low going back to October 2007. A Leveraged Loan index closed out the week at record high prices. European fixed-income CDS ended the week at or near multi-year lows - investment-grade, high-yield and financial. And this week from Bloomberg: "U.S. High-Grade Market Devours Nearly $100 Billion in New Debt."

This historic financial Bubble is a manifestation of Monetary Disorder and a direct inflationary consequence of an unprecedented global Credit Bubble.

Emerging Asia continues to pile it on, boosting Total Debt-to-GDP to 271% (from the previous year's 262%). China's Credit Bubble saw Total Debt expand from 297.4% to 308.5% of GDP. China's Corporate Debt-to-GDP ratio rose to 156.7% from 154.4%, while rapidly expanding government Debt increased from 49% to 53.6%. From Reuters (Marc Jones): "China's government debt also grew at its fastest annual pace last year since 2009..., and household debt and general government debt are now at all-time highs of 55% of GDP."

Asia's debt boom is a particularly alarming accident in the making. With corporate debt rising to a staggering 227% of GDP, total Hong Kong Debt exceeds 500% of GDP (Financial Debt declining to 133.5% of GDP). Singapore's financial Bubble continues to inflate, with Financial sector borrowings increasing to 187.7% of GDP (up from 184%). Total Singapore debt inflated to 473.5% of GDP from 462.3%. South Korea is also worthy of special attention. With corporate debt jumping to 101.6% from 95.3% of GDP, total South Korean debt surged to 325.6% (up from 304.5%).

And with stocks at record highs and housing markets bubbling, no surprise that the U.S. consumer is both confident and spending.

Doug's weekly commentary appeared on his website shortly after midnight EST on Saturday morning -- and another link to it is here.

Central Bankers Reveal the Next Phase in Their War on Savers -- Jeff Thomas

International Man: Recently, Christine Lagarde, the new European Central Bank (ECB) head, said the most incredible thing: "We should be happier to have a job than to have our savings protected... I think that it is in this spirit that monetary policy has been decided by my predecessors and I think they made quite a beneficial choice."

What's your take on this?

Jeff Thomas: Well, I doubt very much if Mrs. Lagarde includes herself in her comment. She has no intention of losing her own savings, since she's a member of the ruling class. What she's saying is that the hoi polloi will have their savings absorbed by the banks and the state and that the hoi polloi should begin now to accept the idea.

As to the tone of the comment, it's the old ploy of soft-soaping an event that's going to occur soon, hoping that you can make it seem more palatable before implementing it.

It's much like the old British comedies in which a woman, instead of saying, "My Mum's coming to live with us," says to her husband, "Wouldn't it be nice to be seeing more of my Mum?" She then spends the rest of the play getting him used to the idea that Mum's presence would be nice, without telling him that Mum is soon to arrive with her baggage.

Only, the bomb that's soon to be dropped on Europeans and much of the rest of the world is a fair bit worse than having Mum come to stay. The plan is to remove all savings from the population - to get them accustomed to living hand-to-mouth. Ultimately, it's the dream of all governments, but it's often difficult to pull off. Understandably, people tend to rebel against it.

This very interesting Q&A session with Jeff showed up on the Internet on Friday sometime -- and another link to it is here.

Could this (finally!) be the end for the Atlantic Integrationists? -- The Saker

By now we all have heard the news, the entire Russian government has resigned and a new Prime Minister, Mikhail Mishustin, has been appointed.  And we also know that the Internet has exploded with all sorts of speculations about what this all could mean.

Alas, until we know who will be included in the new government, there is very little we can really say.  I mean, yes, in theory, we could hold our breath and expect Glaziev appointed to a top position in the so-called "economic block" of the government, but how do we know that it will not be Kudrin instead?!

We don't.

One thing we do know for sure is what Putin announced in his speech. But here are two things I want to single out:
  1. Putin has announced a major effort to deal with the (still appalling) poverty suffered by many Russians
  2. Putin has announced a major effort to truly re-sovereignize Russia
At the very least, this is a very good sign.  As I have suggested many times, the slogan of "restore full sovereignty" can be a battle cry for both Russian and U.S. American patriots.  And we also all know who will be absolutely appalled by all this talk of "sovereignty", don't we?

This longish, but very interesting commentary by the Saker put in an appearance on his Internet site on Friday sometime -- and I thank Larry Galearis for pointing it out.  Another link to it is here.

Battle of the Ages to stop Eurasian integration -- Pepe Escobar

Coming decade could see the U.S. take on Russia, China and Iran over the New Silk Road connection.

The Raging Twenties started with a bang with the targeted assassination of Iran's General Qasem Soleimani.

Yet a bigger bang awaits us throughout the decade: the myriad declinations of the New Great Game in Eurasia, which pits the U.S. against Russia, China and Iran, the three major nodes of Eurasia integration.

Every game-changing act in geopolitics and geoeconomics in the coming decade will have to be analyzed in connection to this epic clash.

The Deep State and crucial sectors of the U.S. ruling class are absolutely terrified that China is already outpacing the "indispensable nation" economically and that Russia has outpaced it militarily. The Pentagon officially designates the three Eurasian nodes as "threats."

Hybrid War techniques - carrying inbuilt 24/7 demonization - will proliferate with the aim of containing China's "threat," Russian "aggression" and Iran's "sponsorship of terrorism." The myth of the "free market" will continue to drown under the imposition of a barrage of illegal sanctions, euphemistically defined as new trade "rules."

This commentary/opinion piece appeared on Internet site on Thursday -- and it comes to us courtesy of Larry Galearis.  Another link to it is here.

Grant Williams: Civil unrest around the world. Failing Unicorns. All paths lead to gold

Erik Townsend and Patrick Ceresna welcome Grant Williams to MacroVoices. They discuss the recent civil unrest and global social degradation, if Tesla will follow the collapse of WeWork, and how to react to the recent rise in price of gold.

This 1 hour 27 minute long audio interview found a home on the Internet site on Friday sometime -- and it's another contribution from Judy Sturgis.  Another link to it is here.


Today's pop 'blast from the past' needs no introduction whatsoever, nor does the group the performs it, nor the country that they're from.  It was a big hit back then -- and it still is today.  I had a front-row center seat to the musical of the same name in London a bit more than ten years ago.  It was fantastic.  The link is here...and enjoy!  There's a kick-a$$ bass cover to this tune of course -- and the link to that is here.

Sergei Rachmaninoff was one of Russia's most gifted and popular composers.  His second piano concerto sits at the pinnacle of his most performed and beloved works -- and rightfully so.  But close on the heels of that is his Symphony No. 2...Opus 27.  A brooding work, full of lush orchestration and is, without doubt my favourite symphony from the romantic era.  Here it is in full version form -- and performed by the Radio Philharmonic Orchestra at the Concertgebouw in Amsterdam.  Eivind Gullberg Jensen conducts -- and the link is here.

Well, it was certainly obvious that the Big traders/JPMorgan et al. were all over gold and silver prices yesterday.  Gold volume was, surprisingly, pretty 'da boyz' had an easy time of it -- and they were ever vigilant even in after-hours trading in New York.  It appears, as I mentioned in Friday's column, that the Maginot line for silver is $18 the ounce and, for whatever reason, they allowed it close right on that number.  Platinum was fairly well behaved on Friday...but then there's palladium.  As I said in my comments about it at the top of this column, it certainly had all the hallmarks of a short covering rally of huge proportions.  But since its such an illiquid and thinly-traded market, it wouldn't have taken any more than a few hundred contracts or so to move it that much if a trading firm was determined to cover an existing short position, which is what look like happened.  It's now hugely [and I mean hugely] overbought -- and where it goes from here remains to be seen.

Here are the 6-month charts for the four precious metals -- and the changes in all of them should be noted, with palladium being the stand-out.  Copper closed down a hair -- and WTIC closed up the same amount.  Click to enlarge.

We are living in economic, financial and monetary environment that I never thought possible in this or any other lifetime -- and I expect you feel the same way.  All sense of free markets have been swept away -- and the central banks of the world, particularly the Federal Reserve, are now handing out hundreds of billions of dollars very week to Wall Street and foreign banks just too keep interest rates low -- and the equity markets moving ever higher.

I used to be quite amused years ago when I heard that "print, or die" expression, but now that we're permanently in it, I'm not smiling anymore.  As you've already figured out, the moment they stop, the entire system crashes and burns.

This current melt-up in the stock markets can't and won't last forever -- and they can't keep interest rates suppressed forever, either.  There's a limit, which we obviously haven't reached yet, where these central bank actions will show up in inflation and currency debasement, which I very much think is part of their plan.

Then the flight to precious metals in particular -- and commodities in general, will be on in earnest -- and that has started in some small way already.

At some point, the Middle East will blow up.  The deep state will see to that, as they haven't gone away.  The first casualties will be all the oil refineries in the Gulf.

The Iranian government has made it quite clear that the first bomb or cruise missile that falls on their country, their first targets will be Saudi Arabia's oil refineries, plus others I presume.  We've already seen the Iranian's abilities to strike with precision -- and one should never doubt their resolve, regardless of what harm comes to them.

And with oil prices suddenly double what they currently are, or far more...this 'Everything Bubble' that we're living in will be a smouldering ruin in short order.

But [as I keep saying] until the central banks lose control through circumstance, or give it up by design, we're nothing more than observers in all this.  All we can do is stand and watch -- and hope we survive it.

Despite the setback in the precious metals so far in 2020, I'm still quite content to be "all in"...because as I said further up in today's missive "this too shall pass".

Monday is a national holiday in the U.S...Martin Luther King Jr. Day...and the markets will be closed...although I'm not sure if that will include the precious metal market or not -- and I won't know until the 6:00 p.m. EST open in New York tomorrow evening.

If it is open, then I'll have a brief column on Tuesday.  But if the precious metal market is closed, I won't have a column until Wednesday.

Enjoy what's left of your weekend...long, or not...and I'll see you whenever.

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