17 June 2017 — Saturday


The gold price certainly didn’t do much yesterday.  It sold off a few dollars in Far East trading, with the low tick of the day…if you wish to dignify it with that name…coming shortly after 1:30 p.m. China Standard Time on their Friday afternoon.  It crept higher from there until at, or just before, the noon silver fix in London — and then sold off equally quietly into the COMEX open.  Its tiny rally at that juncture got capped immediately — and from there it chopped sideways into the close.  Nothing to see here folks, please move along.

However, having said that, it should be pointed out that low tick in Shanghai on their Friday afternoon was another intraday low in this continuing engineered price decline in gold.  And as I mentioned in Friday’s column, these gold slices are getting pretty skinny — and yesterday’s was certainly the ‘poster boy’ for that.

The low and high ticks from yesterday are of no interest, so I’ll pass on looking them up.

The gold price closed in New York yesterday at $1,253.40 spot, down 30 cents.  Net volume was pretty quiet at a bit over 141,000 contracts.

There was a bit more contour to the silver price yesterday, but just barely.  It traded flat in the Far East until the same low price tick was set in silver that it was in gold, which was shortly after 1:30 p.m. in Shanghai — and also like gold, rallied until at, or shortly before, the noon silver fix in London.  The price decline from there was much more impressive — and silver’s low tick of the day was set around 10:20 a.m. in New York on Friday afternoon.  After recovering a nickel off that low, the price traded quietly sideways into the 5:00 p.m. close.

The high and low ticks in this precious metal aren’t worth looking up, either…but here they are anyway.  The CME Group reported them as $16.80 and $16.62 in the July contract.

Silver finished the Friday session in New York at $16.685 spot, down 4.5 cents from Thursday’s close — and another new low close for this move down.  Net volume was pretty light as well at just over 45,000 contracts — and roll-over/switch volume was pretty heavy at a third of gross volume.

The platinum price followed a very similar path to silver, except once its 10:20 a.m. EDT New York low was set, it began to crawl steadily higher all the way into the 5 p.m. close in the thinly-traded after-hours market.  Platinum finished the day at $929 spot, up 7 bucks from Thursday.

Trading in palladium on Friday was a semi-derivative of what happen in platinum, expect its rally after the London p.m. gold fix only lasted until 1 p.m. EDT i New York.  From there it was sold back to a dollar above unchanged on the day — and that’s where it closed at $864 spot…up a dollar from Thursday.

The dollar index closed very late on Thursday afternoon in New York at 97.47 — and chopped sideways for hours once trading began at 6:00 p.m. EDT on Thursday evening.  That state of affairs lasted until a minute or so before 2 p.m. Shanghai Standard Time on their Friday afternoon.  At that point it began to chop quietly and somewhat unsteadily lower until the 97.10 low tick was set a minute or so before 11 a.m. in New York, which was a minute or so before the London close.  It didn’t do much after that, but did close off its low by a bit — and finished the Friday session at 97.16 –down 31 basis points from Thursday.

Here’s the 6-month U.S. dollar index chart — and as I keep pounding away about, it matters not what precious metal prices are doing vs. the dollar index when JP Morgan et al are mucking about in the COMEX futures market.  Yesterday’s price action was just another case in point.

Although the gold stocks gapped up a bit at the open, then began to head south immediately after that.  Their respective lows came shortly after 2 p.m. in New York — and they chopped quietly higher into the 4:00 p.m. EDT close from there.  The HUI closed down 0.58 percent.

With some minor variations, the price activity in the silver equities was mostly similar to the gold shares.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down 1.00 percent.  Click to enlarge if necessary.

And here’s the 6-month Silver Sentiment/Silver 7 Index, so you could put this week’s losses in some perspective.  Click to enlarge as well.

Here are the three 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.   And after this week’s loses, none of these charts are pretty sights.  Click to enlarge if you dare!

And here’s the month-to-date chart…

…and the year-to-date…

Along with the engineered price declines in both gold an silver, the rebalancing of the GDX/GDXJ indices over the last month or so, it has certainly taken its toll on the precious metal equities.

The CME Daily Delivery Report showed that 45 gold and 3 silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.  In gold, the biggest long stopper was International F.C. Stone with 33 contracts out of their in-house [proprietary] trading account…which is the first time I’ve seen them use their own account.  Merrill was a distant second with 9 contracts out of its client account.  The two largest long/stoppers were JP Morgan with 26 contracts for its client account, plus Canada’s Scotiabank picked up 14 contracts for  its own account.  In silver, Advantage issued 3 — and Citigroup stopped them…both transactions came from their respective client accounts.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Friday trading session showed that gold open interest in June dropped by 338 contracts, leaving 866 still open, minus the 45 mentioned above.  Thursday’s Daily Delivery Report showed that 336 gold contracts were actually posted for delivery on Monday, so that means that 338-336=2 gold  contracts disappeared from the June delivery month with having to either make, or take delivery.  Silver o.i. in June declined by 10 contracts, leaving just 8 left, minus the 3 contracts mentioned in the previous paragraph.  Thursday’s Daily Delivery Report indicated that, in actual fact, there were 10 silver contracts posted for delivery on Monday, so the deliveries and change in open interest were in sync for for once, as no contracts were added or dropped from the June delivery month.

Month-to-date there have been 914 silver contracts issued and stopped.

There were no reported changes in either GLD or SLV yesterday.

There was a tiny sales report from the U.S. Mint yesterday.  The sold 500 troy ounces of gold eagles and 500 one-ounce 24K gold buffaloes — and that was it.

Month-top-date the mint has sold 2,000 troy ounces of gold eagles — 1,000 one-ounce 24K gold buffaloes — and 434,000 silver eagles.  These are the worst monthly sales number from the mint that I can remember.  So any bullion dealer that tells you that sales are great, are not exactly being truthful.

There was no gold reported received over at the COMEX-approved gold depositories on the U.S. east coast on Thursday — and only 8,037.500 troy ounces/250 kilobars [U.K./U.S. kilobar weight] were shipped out.  All of that activity was at Canada’s Scotiabank — and I won’t bother linking it.

In silver, there was one container…629,668 troy ounces…dropped off at JP Morgan… and that was it.  Nothing was shipped out — and I won’t bother linking this activity, either.

JP Morgan’s COMEX silver stash now totals 110.3 million troy ounces, just under 54 percent of all the silver held in all the COMEX depositories combined.

It was another very busy day over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday.  They received 9,025 of them, plus they shipped out 10,384.  All of this action was at Brink’s, Inc. of course — and the link to that, in troy ounces, is here.

The Commitment of Traders Report, for positions held at the close of COMEX trading on Tuesday, was a big disappointment compared to what Ted was forecasting, particularly in silver — and in my commentary below, I hope I’m able to explain the reasons why the headline numbers were that far out.

In silver, the Commercial net short position only declined by only 3,711 contracts, or 18.6 million troy ounces of paper silver — and not the hoped-for around 20,000 contracts Ted mentioned in his mid-week review on Wednesday.  They arrived at that number by selling 812 long contract, plus they covered 4,523 short contracts…all of this courtesy of the Managed Money traders, of course.  The difference between those two number is the change for the reporting week.

Ted said that the Big 4 traders covered around 3,000 short contracts — and he attributes all of that change to JP Morgan, which brings their short position down to about the 25,000 contract mark from the 28,000 contracts it was net short in last week’s report.  The large ‘5 through 8’ traders actually increased their short position by around 900 contracts during the reporting week.  Ted figures the reason that this number went up instead of down [like the Big 4] was that the short position of a Managed Money trader is still big enough to be in the ‘5 through 8’ category — and the increase in their short position masked the changes of the usual commercial traders that are normally there.  Ted’s raptors, the small commercial traders other than the Big 8, increased their long position by a rather smallish 1,600 contracts.

Under the hood in the Disaggregated COT Report it was, as is almost always the case, a Managed Money traders affair through and through, as the decreased their long position, but only by a small amount…1,086 contracts.  The big surprise was that they only increased their short position by 5,210 contracts.  The weekly change for them was the sum of those two numbers…6,296 contracts.

The reason that the headline number in the Managed Money long category didn’t show a larger decrease was, as Ted correctly put it…”the small reduction in managed money longs to 77,308 contracts after last week’s increase of more than 7,600 contracts was surprising, since it’s hard to imagine pure technical funds not liquidating on the pronounced price decline during the reporting week. This raises the distinct possibility that the pure technical funds did liquidate and were replaced by the other managed money silver traders that are core long silver for non-technical reasons, thus raising the core long total to near-77,000 contracts from my previous estimate of 68,000 contracts. We’ll need some more time to determine if this is the case, but that’s my most plausible explanation for why more managed money longs weren’t liquidated.”

Well, dear reader, it’s not the “most plausible explanation“…it’s the only explanation.  From my point of view, there are no shades of gray here.

And as to why the Managed Money traders didn’t go mega-short [or more short than show in the 5,210 contract headline number] during the reporting week when ‘da boyz’ engineered the silver price below its respective 50 and 200-day moving averages, can be explained thusly.  If you remember that on a price decline of some magnitude last year, Ted pointed out that Managed Money traders did not pile back on the short side on cue like they normally did — and maybe they decide not to it do again on this price decline.

And as Ted pointed out in his weekly commentary earlier today…”I’m still more convinced, considering the large percentage of short contracts I believe were bought back by JP Morgan relative to total commercial buying, that the lack of more aggressive technical fund selling prevented JPM from buying back more shorts than it did. For me, the lack of aggressive technical fund short selling caused me to miss badly on my predictions this week; for JP Morgan, the stakes were far more significant. That’s because unless others sell, JPMorgan can’t buy back more short positions.” [Emphasis mine. – Ed]

The Commercial net short position in silver is down to 71,913 COMEX contracts, or 359.6 million troy ounces of silver held short.   That appears to be a hugely negative number, but don’t forget that in the Managed Money category, there are those unblinking non-technical fund traders that never sell — and only buy on lower prices.  Like you and I, they are waiting for the big score.  And as of this week’s COT Report, those traders are net long 77,308 COMEX contracts — and their presence is the sole reason why there’s a Commercial net short position in silver at all, because the Big 8 are short against their entire position.  In the last three years or so these non-blinking non-technical fund longs have gone from 10,000 contracts long, to the 77,000-odd long contract they have in place today — and for prices not to explode, JP Morgan et al have been forced to take the short side of every one of those trades.

It’s for this reason that despite how negative the COT Report appears to be in silver; it is, in fact, wildly bullish.

Here’s the 3-year COT chart for silver — and I have nothing to add to what I’ve already said, except to say that I’m already eagerly awaiting next Friday’s report.  Click to enlarge.

In gold, Ted was much closer on this call, but to tell you the truth, it was close enough for me.  Without any of the critical moving averages being broken to the downside during the reporting week, any number, including the one we got, would have been perfectly believable.

The commercial traders decreased their long position by 3,105 contracts, but they also covered 15,848 short contracts, for a net weekly change of 12,743 contracts, or 1.27 million troy ounces of paper gold…which is the difference between those two numbers.  The commercial net short position in gold is down to 20.36 million troy ounces of paper gold.

Ted said that the Big 8 traders covered around 6,200 short contracts but, like in silver the big ‘5 through 8’ traders increased their short position by a hefty 4,600 contracts.  That was for the same reason as in silver…a large Managed Money trader now has a short position large enough to intrude into the ‘5 through 8’ traders category where the ‘short buyers and long sellers of last resort’ normally abide.  The small commercial traders, those not in the Big 8 category, added a hefty  11,100 long contracts to their long position.

Under the hood in the Disaggregated COT Report, Ted was much closer to his 20,000 contract guesstimate, as they not only sold 14,521 long contracts, but added 4,032 short contracts as well…for a total weekly change of 18,553 contracts.  And, like in silver…but not mention above…the difference between that number and the change in the commercial net short position was made up by traders in the ‘Other Reportable’ and ‘Nonreportable’/small trader categories.

Here’s the 3-year COT chart for gold — and the ‘click to enlarge‘ feature helps with this graph as well.

We always seem to be waiting for the next COT Report before we can get a true picture of everything that’s going on — and this week’s COT Report from yesterday makes it no exception to that rule.

Here’s Nick Laird’s “Days to Cover” chart updated with yesterday’s COT data for positions held at the close of COMEX trading on Tuesday.  It shows the days of world production that it would take to cover the short positions of the Big 4 — and Big ‘5 through 8’ traders in each physically traded commodity on the COMEX.  These are the same Big 4 and ‘5 through 8’ traders discussed in the COT Report above.  Click to enlarge.

For the current reporting week, the Big 4 are short 135 days of world silver production—and the ‘5 through 8’ large traders are short an additional 58 days of world silver production—for a total of 193 days, which is six and a half months of world silver production, or about 469.0 million troy ounces of paper silver held short by the Big 8.  [In last week’s report the Big 8 were short 197 days of world silver production.

In the COT Report above, the Commercial net short position in silver was reported as 359.6 million troy ounces.  The short position of the Big 8 traders is larger than the total Commercial net short position by a chunky 469.0-359.6=109.4 million troy ounces.

As I also stated in the above COT Report, Ted pegs JP Morgan’s short position at around 25,000 contracts, or around 125 million ounces, which is down from the 28,000 contracts they were net short in the previous week’s report.  125 million ounces works out to around 51 days of world silver production that JP Morgan is short.  That’s compared to the 193 days that the Big 8 are short in total.  JPM is short about 26 percent of the entire short position held by the Big 8 traders.

The approximate short position in silver held by Scotiabank works out to approximately 53 days of world silver production.  So Scotiabank is back to being the No. 1 silver short in the COMEX futures market…albeit not by much, but certainly more since Tuesday’s COT cut-off.

The two largest silver shorts on Planet Earth—JP Morgan and Canada’s Scotiabank—are short about 104 days of world silver production between the two of them—and that 104 days represents about 77 percent of the length of the red bar in silver in the above chart…a bit over three quarters of it.  The other two traders in the Big 4 category are short, on average, about 16 days of world silver production apiece — and those numbers are down quite a bit from the 21 days those two traders were short in the prior week’s COT Report.  The four traders in the ‘5 through 8’ category are short, on average, 14.5 days of world silver production each, virtually unchanged from the last week’s report.

The short positions of Scotiabank and JP Morgan combined, represents about 54 percent of the short position held by all the Big 8 traders.  How’s that for a concentrated short position within a concentrated short position?

The Big 8 are short 46.5 percent of the entire open interest in silver in the COMEX futures market — and that number would be a bit over 50 percent once the market-neutral spread trades are subtracted out.  In gold, it has jumped up to 48.0 percent of the total COMEX open interest that the Big 8 are short.

And, for the third week in a row, the Big 8 were short a larger percent of total open interest in gold than they were in silver.

In gold, the Big 4 are now short 56 days of world gold production, which is down from the 59 days that they were short last week — and the ‘5 through 8’ are short another 25 days of world production, which is up from the 23 days they were short from the prior week, for a total of 81 days of world gold production held short by the Big 8 — exactly unchanged from last week’s report.  Based on these numbers, the Big 4 in gold hold about 69 percent of the total short position held by the Big 8, down four percentage point from the prior week’s COT Report.

The “concentrated short positions within a concentrated short position” in silver, platinum and palladium held by the Big 4 are about 70, 68 and 65 percent respectively of the short positions held by the Big 8.  Silver is down 2 percentage points from the last reporting week — and platinum and palladium are unchanged.

I have an average number of stories for you today — and if you run out of things to read, watch or listen to, you can always go back into Thursday’s and Friday’s commentaries, as there are no shortage of things to go through there if you didn’t have time for them on those days.


Doug Noland: Peak Stimulus Has Passed

It’s been going on nine years since the “worst financial crisis since the Great Depression.” We’re now only two months from the 10-year anniversary of the Fed’s August 17, 2007 extraordinary measures: “To promote the restoration of orderly conditions in financial markets, the Federal Reserve Board approved temporary changes to its primary credit discount window facility. The Board approved a 50 bps reduction in the primary credit rate to 5-3/4%.”

This extraordinary inter-meeting response to a faltering market Bubble marked the beginning of unprecedented global central bank stimulus that continues to this day. It’s worth noting that the Fed’s August 2007 efforts did somewhat prolong the Bubble. The S&P500 traded to a then record 1,562 on October 12, 2007 (Nasdaq peaked in November). Extending “Terminal Phase” mortgage finance Bubble excess, 30-year mortgage rates dropped below 5.7% by early-2008, down about 100 bps from early-August 2007. And trading at about $72 a barrel in August, crude oil then went on a moonshot to surpass $140 by June 2008.

Memories of the devastating effects of Credit and asset Bubbles have faded from memory. The disastrous aftermath of the Fed aggressively stimulating mortgage Credit – as the centerpiece of its post-“tech” Bubble reflation strategy – has been wiped away by the cagey hand of historical revisionism. The consequences of loose financial conditions – i.e. speculation, malinvestment, maladjustment, deep structural economic impairment, financial system fragility, wealth redistribution – no longer even merit consideration. Instead, it’s accepted as fact that central bank stimulus has been a huge and undeniable success. With inflation so low, central banks “can press on the pedal as much as we want without it effecting the economy negatively.” “There doesn’t seem to be any risk to keeping rates low and lots of benefits to it.” This never has to end.

These folks are “charlatans” and “monetary quacks”, terminology pulled from analysis of the long and sordid history of monetary booms and busts. Today’s central bankers are destroying the sanctity of money with no meaningful pushback. And while they risk calamity, pundits claim there’s little risk in zero rates and creating Trillions of new “money.” So long as securities prices are high, all must be well in the markets and with policy.

Doug’s weekly Credit Bubble Bulletin was posted on his website very early on Saturday morning EDT — and another link to it is here.

The $31 Billion Hole in GE’s Balance Sheet That Keeps Growing

It’s a problem that Jeffrey Immelt largely ignored as he tried to appease General Electric Co.’s most vocal shareholders.

But it might end up being one of the costliest for John Flannery, GE’s newly anointed CEO, to fix.

At $31 billion, GE’s pension shortfall is the biggest among S&P 500 companies and 50 percent greater than any other corporation in the U.S. It’s a deficit that has swelled in recent years as Immelt spent more than $45 billion on share buybacks to win over Wall Street and pacify activists like Nelson Peltz.

Part of it has to do with the paltry returns that have plagued pensions across corporate America as ultralow interest rates prevailed in the aftermath of the financial crisis. But perhaps more importantly, GE’s dilemma underscores deeper concerns about modern capitalism’s all-consuming focus on immediate results, which some suggest is short-sighted and could ultimately leave everyone — including shareholders themselves — worse off.

This Bloomberg article was posted on their Internet site at 3:00 a.m. Denver time on Friday morning — and was subsequently updated about seven hours later.  I thank Brad Robertson for sending it along — and another link to it is here.

If Trump Unlocks $2 Trillion at Banks, Here’s Who May Get It

If Donald Trump gets his way in overhauling banking regulation, it would free up some of the billions of dollars in capital that banks were forced to amass after the financial crisis. Less clear is what they’ll do with it.

After the administration released a highly anticipated 150-page report this week, Wall Street analysts spent two days churning out notes digesting its proposals. Researchers at Goldman Sachs Group Inc. calculated the five largest banks, excluding their own employer, have $96 billion in excess capital. Bank of America Corp. said the plan might unleash as much as $2 trillion in additional lending.

But is that how the money would be used? President Trump would like banks to plow their windfall back into the economy by making more loans to home buyers, small businesses or companies looking to expand. Some on Wall Street predict a lot will flow straight into the pockets of shareholders. One measure would ease annual stress tests, giving firms leeway to increase dividends, Credit Suisse Group AG analysts wrote in a May 24 note anticipating the proposals.

These are shareholder-driven entities, first and foremost,” said David Hendler, the founder of New York-based researcher Viola Risk Advisors. “They will turn on a little more dividend or buy back stock, mostly.”

This interesting news item showed up on the Bloomberg website at 3:00 a.m. MDT on Thursday — and I thank Swedish reader Patrik Ekdahl for pointing it out.  Another link to it is here.

Powerball, Mega Millions to drop Illinois due to state’s budget crisis

The popular Powerball lottery and Mega Millions games will drop Illinois at the end of June without a budget agreement, Illinois Lottery officials said Thursday.

Concern over the state’s fiscal condition prompted the Multi-State Lottery Association to drop Powerball in Illinois, according to internal Illinois Lottery communications obtained by the Chicago Sun-Times.

Mega Millions also plans to drop the state unless a budget agreement comes together, state officials confirmed. Without a budget in place, the state isn’t authorized to make payments to Mega Millions or the association.

Those decisions were reached at national lottery meetings held this week, Illinois Lottery spokesman Jason Schaumburg said. Illinois belongs to the Mega Millions group, and has a license to sell Powerball.

A spokesman for the Multi-State Lottery Association said the group “is focused on protecting the integrity of its games and the experience of its players.”

This news item appeared on the chicago.suntimes.com Internet site at 6:28 p.m. CDT on Thursday afternoon — and it’s something I found in yesterday’s edition of the King Report.  Another link to it is here.

We Call Bulls Hit on the ‘Bots Again!

Before hitting the hay we need to call a big B.S. on the bastard ‘bots from Rip (Off) City.    They screwed us again yesterday (June 14) in crude oil futures.

First, before we get into the trade, a little background…

We have posted about our experiences of being ripped off by these “so-called” trading ‘bots, who prey and stalk the markets, looking to pick-off  traders through blatant market manipulation.   Flash crash, my arse.

We’ll admit maybe some bad trading on our part – leaving a stop hanging out there before a data release – but this is TOTAL BULL SHIT.  Where in the hell is the CFTC and SEC?

No wonder the hoi polloi are starting to revolt.

This is all true, of course — and everyone is getting their faces ripped off by the HFT boyz.  Too bad they wouldn’t write up what’s going on in the precious metals with the same enthusiasm as they do for crude oil and the Dow Jones.  This very worthwhile Zero Hedge piece was posted on their website at 10:20 a.m. EDT on Friday morning — and it comes courtesy of Brad Robertson as well.  Another link to it is here.

Tucker Carlson gives Oliver Stone a fair and balanced interview about Putin documentary (Video)

Oliver Stone’s interview of the Russian President airing on Showtime has received liberal left condemnation due to its humanization of Vladimir Putin, which for the radical liberal left is a major no-no.

Beta male champion, and Russia hater, Stephen Colbert took the opportunity to treat Oliver Stone with extreme rudeness when he had the Academy Award winning director on his late show, to the pleasure of the propagandized audience who hate anyone Rachel Maddow and Hillary Clinton deem “evil”.

Tucker Carlson took a more balance approach to his interview of Stone, allowing the director to give his insights on Vladimir Putin and the current hysteria surrounding Russia, for which Stone notes is the making of (and to the benefit of) the U.S. Deep State.

This 5:20 minute video interview was posted on theduran.com Internet site around 7 a.m. EDT on Friday morning — and I thank Roy Stephens for finding it for us.  It’s certainly worth watching if you have the interest — and another link to it is here.

Oliver Stone: The Putin Interviews — Parts 3 & 4

Parts 3 and 4 are up on the youtube.com Internet site already. The link to Part 3 is in the above headline — and the link to Part 4 is here. I thank reader M.A. for sharing them with us.

Russian Central Bank cuts interest rates, raises growth forecast

Russia’s Central Bank cut its main interest rate from 9.25% to 9% at its meeting today.  On the back of good economic news it also raised 1-its growth forecast for the year to 1.3-1.8% from 1-1.5%.

Annualised inflation in Russia has actually edged up slightly to 4.2% in recent days.  This is however common at this time of year, and is explained by the price cycle of certain food products following the winter.  The normal pattern is for the annualised rate in Russia to rise slightly in June and then fall in July and August.

The true rate of price growth in Russia disregarding these seasonal factors is continuing to fall, as the Central Bank said in a statement it released today.

This story showed up on the russiafeed.com Internet site around 5 p.m. EDT yesterday afternoon — and it’s another offering from Roy Stephens.  Another link to it is here.

21 BREATHTAKING photos of the Moscow Metro

The Moscow Metro is an essential part of Moscow life. Not only one the fastest, safest, and most traveled subway in the world, it is also a inalienable part of Russian cultural and historical heritage.

The first designs for the Moscow’s subway were submitted to city authorities under the reign of Tsar Nicholas II in 1902, but were repeatedly derailed: by the uprising of 1905, the first World War, and the Bolshevik revolution of 1917.

Finally opened on 15 May 1935, under the management of Joseph Stalin, the Moscow Metro was an underground Communist paradise! It was a perfect transport system accessible for all city’s workers. Its grandiose chandeliers, reflective marble walls, hypnotizing mosaics, and heroic statues were a testament to the values and power of the Communist party.

During the World War II, the Moscow Metro served as a bomb-proof shelter. In finer times, it served as a place for young people to meet and fall in love.

Today, it transports more than nine million people a day, and is expected to grow an additional 90 miles by 2020, making it the third largest subway system in the world, after Beijing and Shanghai.

Wow…and Wow again!  These photos are a must to see for sure.  They appeared in a story over at the russiafeed.com Internet site on Thursday sometime — and it’s the third and final offering of the day from Roy Stephens.  Another link to it is here.

Why Are We Attacking the Syrians Who Are Fighting ISIS? — Ron Paul

Just when you thought our Syria policy could not get any worse, last week it did. The U.S. military twice attacked Syrian government forces from a military base it illegally occupies inside Syria. According to the Pentagon, the attacks on Syrian government-backed forces were “defensive” because the Syrian fighters were approaching a U.S. self-declared “de-confliction” zone inside Syria. The Syrian forces were pursuing ISIS in the area, but the U.S. attacked anyway.

The U.S. is training yet another rebel group fighting from that base, located near the border of Iraq at al-Tanf, and it claims that Syrian government forces pose a threat to the U.S. military presence there. But the Pentagon has forgotten one thing: it has no authority to be in Syria in the first place! Neither the U.S. Congress nor the U.N. Security Council has authorized a U.S. military presence inside Syria.

So what gives the Trump Administration the right to set up military bases on foreign soil without the permission of that government? Why are we violating the sovereignty of Syria and attacking its military as they are fighting ISIS? Why does Washington claim that its primary mission in Syria is to defeat ISIS while taking military actions that benefit ISIS?

This very worthwhile commentary by Ron Paul was posted on the lewrockwell.com Internet site on Tuesday — and it’s definitely worth reading.  I thank Texas reader Jim Rodgers for bringing it to our attention — and another link to it is here.

Pentagon to Send 4,000 Troops to Afghanistan in Trump’s Largest Deployment Yet

Two days after Trump ceded unilateral authority on Afghan troop deployments to the Department of Defense, the Pentagon wasted on time and according to AP, the Pentagon will send 4,000 additional American forces to Afghanistan to support existing forces and in hopes of breaking a stalemate in a war that has now been passed on to a third U.S. President. The deployment will be the largest of American manpower under Donald Trump’s young presidency.

According to AP, the decision by Defense Secretary Jim Mattis could be announced as early as next week, and was prompted by “the rising threat posed by Islamic State extremists, evidenced in a rash of deadly attacks in the capital city of Kabul, has only fueled calls for a stronger U.S. presence, as have several recent American combat deaths.” Asked for comment, a Pentagon spokesman, Navy Capt. Jeff Davis, said, “No decisions have been made.”

  Trump’s decision Tuesday to give Mattis authority to set force levels in Afghanistan mirrored similar powers he handed over earlier this year for U.S. fights in Iraq and Syria. The change was made public hours after Sen. John McCain, the Senate Armed Services Committee’s Republican chairman, blasted Mattis for the administration’s failure to present an overarching strategy for Afghanistan. McCain said the U.S. is “not winning” in Afghanistan, and Mattis agreed.

    The finality of the decision isn’t entirely clear. While Trump has handed over the troop level decision-making, there is nothing preventing him from taking it back.

    Mattis has repeatedly stressed that increasing the number of U.S. troops in Afghanistan would take place within a broader, long-term strategy for stabilizing Afghanistan. In congressional testimony this week, he said the strategy will take into account regional influences, such as Pakistan’s role as a Taliban sanctuary. Regional powers Iran, India and China, which all have political stakes in the fate of Afghanistan, also must be considered.

The bulk of the additional troops will train and advise Afghan forces, according to the administration official, who wasn’t authorized to discuss details of the decision publicly and spoke on condition of anonymity. A smaller number would be assigned to counter-terror operations against the Taliban and IS, the official said.

This Zero Hedge spin on an AP story put in an appearance on their Internet site at 12:15 p.m. on Friday afternoon EDT — and it’s also courtesy of Brad Robertson.  Another link to it is here.

Why It’s Much Harder for Expat Bankers to Land a Hong Kong Job

Andrew Sullivan remembers the days when a young Brit could hustle his way into a job in Hong Kong finance.

He ought to know: He did it.

It was 1996, the twilight of British Hong Kong, when Sullivan arrived with a resume that couldn’t get him into a bank in the City of London. The former fighter pilot and chartered surveyor was soon hired as a stock analyst.

“You didn’t need a CV that was perfect,” said Sullivan, now 55. What you needed, he said, was gumption — and the will to chase business.

But like the Union Jack and other trappings of empire, those days are long gone. Two decades after Britain returned its last major colony, the balance of power in this city, and its financial industry, has tilted decidedly toward all things China.

This very interesting Bloomberg article appeared on their Internet site at 3:00 p.m. Denver time on Thursday afternoon — and was updated about twenty-four hours later.  I thank Patrik Ekdahl for this one — and another link to it is here.  It’s certainly worth reading.

Someone just paid over $600,000 for a parking spot in Hong Kong

If you think millennials have it tough in the U.S., they really have it hard in Hong Kong.

In the latest installment of jaw-dropping Hong Kong property prices, a parking spot in the Upton, a luxury apartment building in the Western District of Hong Kong, recently sold for $664,000, The New York Times reports.

This is basically the price of one flat in Hong Kong,” Lennon Choy, an associate professor of real estate and construction at the University of Hong Kong, told The New York Times.

Choy went on to say what everyone is thinking: “This is crazy, actually.

The record-breaking parking spot is almost double the price of a Hong Kong parking spot that sold for $387,000 in 2012 and caused quite a stir at the time. The previous record for most expensive parking spot was $615,000 in 2016, The New York Times reported.

When I was in Hong Kong way back when before Britain officially turned it over to China, someone over there told me that you had to prove you had a parking spot for it, before you were allowed to buy a car.  I would suspect that’s still the case today.  This news item was posted on the nordic.businessinsider.com Internet site at 12:33 p.m. Europe time on their Friday afternoon — and I thank Patrik Ekdahl for his final contribution to today’s column.  Another link to it is here.

Hugo Salinas Price: Bitcoin is as much dream money as all fiat currencies

All so-called money in the world is dream money that consists of digits issued by central banks; the so-called “reserves” of these central banks consist of digits issued by a small group of official digit-issuers, the central banks of the United States, the euro area, England, Japan, Switzerland, and, recently, of China.

Now a select group of digit-issuers that are not central banks have come into the dream-money world. T the principal one is the group of so-called “miners” that produce the bitcoin by solving complex mathematical problems. One day this feature will be the object of derision at the immense folly of mankind.

The bitcoin is being promoted by somewhat deceptive advertising. There are pictures of a bitcoin on the Internet, and the pictures show a coin that looks like a gold coin. But the bitcoin is only a digit in computers; a physical bitcoin does not exist. McDonald’s sells hamburgers illustrated in mouth-watering pictures of the Big Mac. But what if their hamburgers really had no meat at all?

When the creator of the bitcoin — and who it was remains a mystery — presented the world with his creation, he (or she) claimed it was “money.” Sooner or later many were saying the same thing. One dog barks, and all dogs bark with it.

This spot-on commentary by Hugo appeared on the Mexican Internet site plata.com.mx site on Friday — and it’s certainly worth reading if you have any interest at all in bitcoin.  I found it embedded in a GATA dispatch.  Another link to it is here.

India said to plan gold policy reform for $19 billion sector

India, which vies with China as the top consumer of bullion, is working on new policies to improve transparency and help expand its $19 billion gold jewelry industry, according to people with knowledge of the matter.

The plans being worked out by the finance and commerce ministries along with industry groups should be finalized by the end of March, the people said, asking not to be identified because they aren’t authorized to speak publicly. D.S. Malik, spokesman for the finance ministry, didn’t answer calls to his cellphone, while a spokeswoman for the commerce ministry didn’t reply to an email seeking comment.

The start of a spot bullion exchange, to make gold supply more transparent and help enforce purity standards, is under consideration, the people said. An import tax of 10 percent could also be reduced as the government seeks to eliminate smuggling, they said. The plans also include a dedicated bank for the jewelry industry, according to one of the people.

The overhaul of India’s disorganized and fragmented gold jewelry industry is meant to bolster confidence among consumers, where the gifting of gold at weddings and festivals or its purchase as a store of value are deeply held traditions. Ensuring quality standards and allowing supply chains to be easily tracked are ways to enhance trust. The estimate for the size of the sector was given by the Mumbai-based India Bullion and Jewellers Association Ltd.

The measures could help underpin Indian demand, which is recovering after slumping to a seven-year low in 2016.

This gold-related news item showed up on the Bloomberg website at 7:08 a.m. MDT on Thursday morning — and was updated about twenty hours later.  I discovered it on the gata.org Internet site — and another link to it is here.

Gold imports surge 236% to $4.95 billion in May ahead of GST

Silver imports too jumped to $442.9 million in May, compared to the $39.54 million in the same month last year. [This sentence is from another story about May gold imports into India.  However, it was behind a subscription wall, but too big a tidbit to leave out — and it’s not mentioned at all in this story I’ve linked. Ed]

Apprehension of higher goods and services tax (GST) rate and an increase in demand led to a surge in India’s gold imports by 236.7% to $5 billion in May, causing the highest level of trade deficit in two and a half years.

This is the fourth consecutive month since February when gold imports have more than doubled compared to the same month a year ago.

Gold in India is traditionally seen as a storage of wealth by buyers, while the government considers it unproductive as it leads to idle savings rather than investments.

Aditi Nayar, principal economist at ICRA Ltd, said half of the upsurge in merchandise imports in May was led by gold, precious metals and stones, which is likely to be on account of restocking after the festive and marriage season, and prior to the implementation of GST.

Since there was a lot of uncertainty on the GST rate for gold with jewellers apprehending the rate to be 5%, experts said importers may have preferred to stock gold and gold imports are likely to taper off as the GST Council has decided to impose a moderate 3% GST on gold items.

This brief news item, filed form New Delhi, put in an appearance on the livemint.com Internet site at 12:37 p.m. IST [India Standard Time] on their Friday afternoon.  I found this gold/silver-related news item[s] on the Sharps Pixley website.  Another link to it is here.

China eyes Obor Gold Rush as it seeks to build reserves

China’s demand for investment-grade gold is going up. The first quarter of 2017 saw a 60.2% rise in demand for physical gold bars, compared to 22.4% growth for the year-earlier period.

Recovering from a 14.4% decline during the same period last year, demand for gold jewelry rose just 1.4%, which is to be expected when demand for gold bars and bullion is high. This year, total Chinese gold imports through Hong Kong are set to breach 1,000 tonnes, compared to 771 tonnes imported in 2016.

The rise comes as no surprise. China has long been interested in accumulating gold to diversify its assets and reduce its dependency on the US dollar. In addition, a larger gold reserve strengthens the renminbi as an IMF reserve currency. In a time of economic slowdown, renminbi depreciation and concern over equity and property markets, however, citizens and businesses also view gold as a safe haven investment.

It is hard to pinpoint the exact amount of gold in China’s reserves, because the state considers gold a “strategic asset.” The government does not publish gold trade data, and the central bank has a record of making deceptive statements regarding the country’s gold stockpile.

This story about China and gold put in an appearance on the Asia Times website at 12:24 p.m. China Standard Time on Friday afternoon — and it comes to us courtesy of Ellen Hoyt.  Another link to it is here.


Today’s ‘critter’ is a denizen of the deep…an ocean sunfish — and they are quite the spectacle — and one of the strangest fish in the tropical/temperate oceans of the world.  The ‘click to enlarge‘ feature helps a bit with those photos.


Although there was a general lack of price action in the precious metals on Friday, JP Morgan et al still managed to set new intraday lows in both silver and gold, plus close them at slightly new low ticks for this move down nonetheless.  They certainly weren’t asleep, or on vacation.

As for the COT Report, if you were looking deep enough under the hood — and knew what you were looking for, it was a very good report regardless of the disappointments in the all-around headline numbers.

Here are the 6-month charts for all four precious metals, plus copper, once again — and you can survey the handiwork of ‘da boyz’ for yourself.  The ‘click to enlarge‘ feature helps a bit with the first four charts.

As to what may happen next week, who knows.  I know for sure that the powers-that-be certainly have more work to do in gold if they decide to go that route, but as to how much more flesh is still on the bone in silver, that’s a different story entirely.  But if they do decide to go after gold in these so-called “summer doldrums”…which they themselves manufacture…I would expect we’ll see more price pain in silver, although it shouldn’t be a lot.

As for the general equity markets, they’re still looking for that proverbial pin.  That scare in the FAANG stocks last week didn’t last, but as I said at the time, if the Plunge Protection Team hadn’t been at battle stations on that particular day, it’s pretty much a given that world’s economic, financial and monetary system would be that “smouldering ruin” I always talk about.

In the Middle East, this Qatar thingy has settled down, at least on the surface.  But unless cooler heads prevail, this could still flare into something major — and it’s still ripe for some sort of ‘false flag’ event if the U.S. Deep State things that it’s in their best interests.

My cataract surgery turned into one big non-event.  But when the surgeons are operating on one of your prime six senses…and you don’t know what to expect…it’s never a good idea to read all the legalese that they hand out in advance.  You imagine all kinds of things, but nothing remotely resembling any of that ever appeared during the procedure, or after.  The worst of it for me was when they inserted an I.V. needle for the sedative they run through you.  I’ve never liked needles — but as a young school kid back in the 1950s and 1960s…we got them all too regularly when both smallpox, polio and other common diseases were still a threat.  I thank the many of you that were kind enough to offer words of encouragement and support from your own experiences with this ordeal.  I don’t need it done for my other eye, but if I did, I’d do it in a New York minute.  And if you’ve considered it yourself or have been told you need it, go for it, as you’ll never be sorry.  They even allow you to keep your street clothes and shoes on for the entire procedure, so you know when they allow that, it can’t be all that bad — and it ain’t.

I was back at my computer within three hours.

That’s it for the day — and the week — and I’ll see you here on Tuesday.


The post Huge Silver and Gold Imports Into India in May appeared first on Ed Steer's Gold and Silver Digest.