Saturday, March 8, 2014

Gold and silver News and Views ( directly on point or touching on the PMs ) - March 8 , 2014 -- Koos Jansen's missive " China's road to secret gold accumulation " offers insights as to how China deals with western manipulation of the price of gold as well as control schemes involving the international monetary system , one interesting nugget - 600 tons of China gold stored with the New YorK Fed - has that gold been leased out ? South Africa notices gold fix controversy - one would expect a country that mines significant quantities of precious metals such as gold and platinum would put two and two together and understand fixing screws them royally ....... With physical gold in high demand and supplies disappearing , no coincidence that the hunt for lost treasure has surged - SS Central America salvage job resumes after 20 years of court battles ....... Dave in Denver discusses the US Government being one big lie ( Ukraine and other foreign misadventures , government stats such as jobs - gold is a store of value in a world based on lies ) ...... Additional items including Ed Stee'r Saturday March 8 , 2014 missive ( including precious metal data for the week , daily data , news and views on and / or touching on the precious metals ) , follow on news and views guaranteed to peak your interest !

China’s Road To Secret Gold Accumulation

In august 2013 I published a translation from an article written by a Chinese gold commentator called Zhang Jie. In the article Zhang described how not only the US but also other western countries have been involved in manipulating the price of gold to control the international monetary system for decades. I suggest to read the full article - here are a few snippets:

…Gold leasing is an important innovation in the gold settlement system. Through continuous gold leasing the gold in the market can be circulated and produce derivatives, creating more and more paper gold. This is very significant for the United States. Gold leasing is a major tool for the Federal Reserve and other central banks in the West to secretly control and regulate the gold market, creating gold credit derivatives and global credit conflict.

…The purpose of gold leasing is not just to receive a rent, but it also provides the ability to short-sell gold, which allows central banks to interfere in the currency market.

…If the Fed’s large gold reserves are used in gold leasing, there will be a serious problem. Germany therefore will threaten the Fed’s dominant position by demanding their gold back; the Fed subsequently needs to withdraw the leased gold and thus could destabilize the market. This is a new credit game of international capital.

…The Fed probably has agendas aimed at preventing Germany to inspect its gold or to ship it back to Germany.

I recently came across another article by Zhang that I also found worth sharing. First you can read the article, then I will provide some comment. This article is dated 16-04-2013, but it must be a repost as the data in the text shows it had to be written Jan/Feb 2013. Everything in between [brackets] is written by Koos Jansen.

Translated By Soh Tiong Hum!

Zhang Jie: China’s Road To Secret Accumulation

2013-04-16  Author: Zhang Jie

Zhang Jie

Core hint: China may gradually acquire gold on the international gold market through non-central bank financial entities, the newly acquired gold shipped back to China to be converted into central bank gold reserves. Credit in various forms including gold reserves will support China’s Renminbi and its internationalization.

Unless military confrontation or economic sanctions take place between China and US, there should be little question about the safety of China’s gold reserves stored at the US Federal Reserve. The question of China’s gold is not its safety but rather to possess the ability to use it for market intervention, and to boost creditworthiness of the Renminbi.

Difficult To Bring Back Gold

Risk of losing China’s gold stored at the US Federal Reserve can be temporarily set aside because in comparison to China’s foreign exchange reserves, the risk to China’s foreign exchange reserves is larger than the risk of gold deposited at the Federal Reserve! Regardless of buying sovereign debt or depositing in the US financial system, there is risk of a mass default. A mass failure to fulfill obligation by Western countries should no longer be called a default but a crisis. Cash deposited inside the financial system has even more danger. Western banks can go bankrupt, even large corporations like Lehman. Therefore risk has to be looked at in relative terms, not just absolute ones. The gold question should be looked at from the angle of the global currency system. Whether gold should be stored in China has to be considered for the level of creditworthiness.

The PBOC operates on a ‘pool’ concept, which also needs gold. Considering the global credit game, it is highly necessary for China to develop her own gold reserves and must do so with a better strategy than Germany.

The US has already demonized China’s rise so if China were to ask to bring back her gold, it would surely lead to a tremendous confrontation. When China first shipped her gold to the US, it was meant for reform, opening up and removing US economic sanctions. To ask for the gold back now would be a political signal. China can wait to look at Germany’s outcome before considering to repatriate it’s own gold from the Federal Reserve. China does not yet have to pull her chestnuts out of the fire. If China were to make a fuzz about their gold, Western countries will point their fingers at China, but not to Germany because of their close relation.


Accumulating Gold To Convert FX Reserves

China can use its increasing foreign exchange reserves to buy gold continuously. When the US and European central banks are continuously leasing and short selling gold, China can buy this gold and take possession, adding them to domestic reserves.

It’s best to let domestic financial entities acquire gold rather than the PBOC, to create multiple positions in the domestic gold futures market, to create the impression of forced buying by private hands so as to shut off international opinion. 
Purchased gold is withdrawn from the futures market, stored with reserves held in core financial entities then moved to the PBOC for domestic safekeeping. Just like Western central banks use gold leasing and short sell gold, China also needs to employ deception to secretly accumulate gold in a timely manner.

It is a good time for China to use surplus foreign exchange reserves to purchase gold when central banks around the world are secretly leasing gold and short selling gold to prop up currency printing. During the 10 years after gold leasing was born [early eighties] the world sold gold short, while during the gold bull market short sellers in the gold leasing business covered their shorts. International gold price fluctuations after 2008 was when gold short selling commenced again, especially at the time when gold fell from USD 1900 and US and Western countries were running endless quantitative easing. With the gold price is running contrary to quantitative easing, it is highly probable that Western central banks or major institutions were short selling gold.With China acquiring gold till a currency crisis erupts and short sellers need to cover their position, international gold price will certainly rally, possibly resembling eighties like fluctuations. It is therefore a tremendous opportunity for China to buy gold now to hedge against risk from a global currency crisis.

China in possession of large amounts of gold, China has secretly accumulated more gold, is a way to fight developed countries that are depreciating their currencies with quantitative easing; China’s gold accumulation gives them caution about short selling gold and currency printing. This is the most effective means to protect China’s foreign exchange reserve wealth from the threat of the Western financial hegemony.

Great Wall of China

China’s GDP and foreign exchange reserves already exceed Germany’s. Therefore China must possess effective control over gold volume not less than Germany’s gold reserves. At the current price of USD 1700 per ounce, one ton of gold is worth USD 50 million. When gold rises to USD 2500 per ounce, one ton of gold is worth USD 75 million. If China brings in 10,000 tons, foreign reserve spending is merely USD 800 billion but this volume is roughly 30% of gold in global circulation [he means global official reserves!] and is going to be pole position in global markets. Spending such a small expense to swallow such a massive gold position is only possible when the world is short selling. Otherwise price will go sky-high when you buy 10,000 tons! Buying US government debt with China’s current foreign exchange reserves at USD 3.3 trillion yields less than the 0.25% Fed Funds Rate. With this very low yield, buying gold is a good deal.

More than 80% of the PBOC’s currency in circulation is foreign exchange. Depreciation by foreign currencies such as US Dollar forces Renminbi to lose its purchasing power and increases turbulence. This was the reason why China imported inflation years ago. If China buys gold in large amount now, she can choose to support the value of Renminbi with gold in future. Purchased gold will support Renminbi creditworthiness. At the moment, Renminbi’s creditworthiness is supported by the central bank’s foreign exchange reserves but the creditworthiness of foreign exchange in its possession is a function of the issuing country, not China.Supporting China’s creditworthiness is not just about buying gold but also buying China’s sovereign debt, government debt, core industry debt, Chinese real estate, Chinese rare earth, tungsten, antimony and so on. However, besides foreign exchange gold and precious metals are the most appropriate for use overseas to support Renminbi’s export and international policy.

The foreign exchange standard has more problems than a gold standard. The Renminbi wants to be internationalized and China wants to be wealthy and strong. If the Renminbi issuance remains linked to the US Dollar, then the Renminbi will just resemble many so-called international currencies, becoming merely a proxy of the US Dollar, unable to match the creditworthiness of the US Dollar. Internationalization of a pegged-Renminbi is a make-believe internationalization, just like the Hong Kong Dollar, freely changeable but confined to linked rates.


Though he’s not a politician Zhang provides us with interesting insights about China’s monetary policy.

My thoughts:

Zhang writes; “there should be little question about the safety of China’s gold reserves stored at the US Federal Reserve” (I asked my interpreter if this is really what he wrote, he really did..), while he clearly states these reserves held by the Fed are leased out and are thus NOT safe. A few sentences later he writes; “Risk of losing China’s gold stored at the US Federal Reserve…”. In fact the rest of the article is about the importance of the PBOC holding official gold reserves in the mainland to strengthen the Renminbi. I don’t understand why he wrote the gold is safe in the US in the beginning.

“When China first shipped her gold to the US, it was meant for reform, opening up and removing US economic sanctions.” This underlines the dirty game the US is playing. It demands countries to store a part of their official gold reserves at the New York Federal Reserve so ultimately only the US controls the global currency market. According to this article, written in January 2013 by Liu Zhongbo from Agricultural Bank of China, at least 600 tons of Chinese official reserves are stored at the Fed.

“It’s best to let domestic financial entities acquire gold rather than the PBOC, to create multiple positions in the domestic gold futures market, to create the impression of forced buying by private hands so as to shut off international opinion. Purchased gold is withdrawn from the futures market, stored with reserves held in core financial entities then moved to the PBOC for domestic safekeeping.” I fully understand the PBOC is buying gold through proxies, however all my sources in the mainland ensure me the PBOC would never (indirectly) buy at the Shanghai Gold Exchange, which is the only domestic futures/deferred market where significant amounts of gold are being withdrawn from the vaults. On the Shanghai Futures Exchange withdrawals are neglectable. Maybe Zhang’s approach is wrong here.

The PBOC wants to diversify it’s FX reserves (USD) in gold, all gold on the SGE is quoted in RMB. It would make more sense for the PBOC to buy gold abroad in exchange for dollars, this would also circumvent SGE premiums. On the Chinese Foreign Exchange Reserves of the People’s Republic of China wikipedia page (not on the English page) it states:


The FX reserves of the Chinese mainland are State-owned assets and managed by SAFE and the PBOC.The real operations are done by the Bank of China.

The Bank Of China is a commercial state-owned bank and LBMA member, just like ICBC. It’s more likely the PBOC would make purchases through these channels.

In Gold We Trust

South Africa notices gold fix controversy; GATA consultant Speck 


Banks Bear Brunt of Gold-Fix Blame
By Chantelle Benjamin
The Mail & Guardian, Johannesburg
Friday, March 7, 2014
Evidence emerging in the United Kingdom about the possible manipulation of the gold price for a decade could have major implications for South African investors and mining companies who might be able to sue for damages in terms of South African law.
The London gold fix benchmark, set by five banks twice a day, is used worldwide by mining companies, central banks, and jewellers to value gold. A similar process, involving three banks, is used to value silver.
This week a New York resident, Kevin Maher, lodged a case in U.S. District Court for the Southern District of New York seeking unspecified damages against Barclays, HSBC Holdings, Bank of Nova Scotia, Societe Generale SA, and Deutsche Bank, on the grounds that they worked together and manipulated the benchmark.
He has based his case on a draft study by a renowned researcher, Rosa Abrantes-Metz, that was published by Bloomberg last week and said "it as likely that co-operation between participants had been occurring."
Her work is supported by research by Dimitri Speck, a commodity analyst.
Abrantes-Metz, a professor at New York University's Stern School of Business, is credited with helping to expose the London interbank offered rate (Libor) scandal. Her 2008 paper uncovered the rigging of the rate, which led to Barclays and UBS being fined about $6-billion.
Stanlib's Kobus Nell said there had been rumours for many years about the possible manipulation of the gold price but this is the first time that a study has been conducted by someone of her calibre.
In terms of the Competition Act, criminal or civil action can be taken against any company found guilty of collusion or price fixing, provided the activity took place in South Africa. That means any buying or selling in South Africa based on the gold fix price and undertaken with or by one of the five banks is covered by the act.
ENS attorney Theuns Steyn, who specialises in the mining sector, said this could have "huge" implications. "If trade is here and the branches of the banks are here, it could be possible to prove jurisdiction," he said. "The difficult part would be proving and quantifying damages."
The fix is calculated twice a day via a phone conference at 10.30 a.m. and 3 p.m. London time. The banks declare how many bars of gold they want to buy or sell at the current spot price, based on orders from their clients and themselves. The price is increased or reduced until the buy and sell amounts are within 50 bars of each other, at which point the fix is set.
An issue for many is that the bank traders can communicate with their clients and each other during the process. Traders can tell clients about shifts in supply and demand and take fresh orders during their conference call and can buy or sell as the price changes, according to the website of London Gold Market Fixing. And the process is unregulated.
The Libor is seen as the most important benchmark for setting short-term interest rates and, since 2000, has been calculated in 10 currencies. It was revealed in 2012, after an investigation, that some banks were falsely inflating or deflating their rates in order to profit from trades.
The Libor is a central cog in global financial markets against which financial products worth about $450 trillion are pegged.
Allegations about the rigging of the gold price, like those about the Libor, have been circulating for some time, although some analysts believe rigging would not have a big influence on the market because of the wide varieties of gold trading, from spot trading to gold exchange-traded funds.
Abrantes-Metz said in an 2013 Bloomberg article that, like the Libor manipulation, the gold fix is "controlled by a handful of firms with a direct financial interest in where it is set and there is virtually no oversight -- it's based on information exchanged" among themselves.
Nell said: "Gold is not a small market and there are tonnes being bought and sold every day, but it is possible that, over time, manipulation by the banks would have an impact.
"Of course, the problem is, with all the other information emerging about the banks, it does raise the question, if they could get involved in currency rigging, was it possible that other collusion was going on that we do not know about?"
Abrantes-Metz and some traders noticed "trading surges" after the 3 p.m. meeting and began writing about it about two years ago.
Abrantes-Metz, when approached by the Mail & Guardian, said: "The structure of the benchmark is certainly conducive to collusion and manipulation and the empirical data are consistent with price artificiality."
Her research, conducted with Albert Metz, the managing director of Moody's Investor Service, found there were frequent spikes in the gold price from 2004 after the 3 p.m. The study has been looking at the market from 2001.
But the large price moves were overwhelmingly down. For example, in 2010, large moves during the fix were negative 92 percent of the time.
She said that in the end it would be up to the regulators to establish why these movements began in 2004 and why prices tended to be downward.
In January this year Deutsche Bank announced that it was pulling out of the process for setting gold and silver benchmarks because of a decision to scale back its commodities business. But it emerged this week that it might have hired a consultancy to review the bank's role in the gold fix benchmark.
There has been market speculation that Standard Bank would be a good candidate to replace Deutsche Bank, particularly since it is selling its United Kingdom-based markets division to the Industrial and Commercial Bank of China and China last year became the biggest consumer of gold.
In reply to questions posed by the M&G, Deutsche Bank said: "Deutsche Bank is withdrawing its participation in the gold and silver benchmark setting process following the significant scaling back of our commodities business. We remain fully committed to our precious metals business."
Researcher Rosa Abrantes-Metz says that when it comes to the gold fix, "one needn't look to far for a motive. The participating banks all stand to gain both from using the privileged knowledge they glean during the fixing process and from influencing the fixing itself," she told Bloomberg last year.
Research by commodity analyst Dimitri Speck found that gold prices tend to drop sharply in the London afternoon fixing, with a less pronounced drop in London morning fixes. It also drops during the trading session of the Commodity Exchange (Comex) in New York.
Research by economist Paul Craig Roberts and analyst Dave Kranzler found that, in times of financial crisis, the price of gold is manipulated by central banks to calm or manipulate markets.
They said that the U.S. Federal Reserve has a vested interest in influencing the gold price, actively keeping it low. "When gold hit $1 900 per ounce in 2011, the Federal Reserve realised that $2 000 an ounce would have a psychological impact that would spread into the dollar's exchange rate with other currencies, resulting in a run on the dollar as both foreign and domestic holders sold dollars to avoid the fall in value."
They said the Fed began using "bullion banks as its agents to sell naked gold shorts in the New York Commodity Exchange [Comex] future market".
"Short selling drives down the price, triggers stop-loss orders and margin calls, and scares participants out of gold trusts. The bullion banks purchase the deserted shares and present them to the trusts for redemption in bullion."
They said the bullion could then be sold in the London physical gold market.
But Ross Norman, CEO of bullion brokers Sharps Pixley, believes that the large moves in price at the time of the fixings is because large selling and buying orders collide, and that there is more activity at 3 p.m. because that is when the US market opens.

Alasdair Macleod: Elevating markets: A signal of reviving bank lending?

7:50a ET Friday, March 7, 2014
Dear Friend of GATA and Gold:
"Free markets are a myth," GoldMoney research director Alasdair Macleod writes today, "since capital markets are no longer where buyers and sellers meet to buy and sell things based on perceptions of value. Instead it is all about trends and trusting the Federal Reserve." He adds that since markets are still elevating even as the Fed purports to be reducing its bond purchases, the money pumping may have been picked up by a revival in bank lending. Macleod's commentary is headlined "Elevating Markets: A Signal of Reviving Bank Lending?" and it's posted at GoldMoney's Internet site here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

After 20 years, gold salvage operations to resume at wreck of SS Central America

Gold to Be Lifted from Wreck
From the Maritime Executive magazine
Fort Lauderdale, Florida
Thursday, March 6, 2014
Odyssey Marine Exploration has been awarded the exclusive contract to conduct an archaeological excavation and recover the remaining valuable cargo from the SS Central America shipwreck, located approximately 160 miles off the coast of South Carolina. The ship, which was immortalized in the best-selling book "Ship of Gold in the Deep Blue Sea," sank in 1857 with one of the largest documented cargoes of gold ever lost at sea.
Odyssey was selected for the project by Ira Owen Kane, the court-appointed receiver who represents Recovery Limited Partnership and Columbus Exploration. Kane is charged by the court with overseeing the recovery project and has the benefit of a permanent injunction and exclusive salvage rights over the SS Central America shipwreck granted by the U.S. District Court for the Eastern Division of Virginia. ...
... For the full story:


March 06, 2014

Gold to be Lifted from Wreck

Odyssey Marine Exploration has been awarded the exclusive contract to conduct an archaeological excavation and recover the remaining valuable cargo from the SS Central America shipwreck located approximately 160 miles off the coast of South Carolina. The ship, which was immortalized in the best-selling book, "Ship of Gold in the Deep Blue Sea," sank in 1857 with one of the largest documented cargoes of gold ever lost at sea.

Odyssey was selected for the project by Ira Owen Kane, the court-appointed receiver who represents Recovery Limited Partnership (RLP) and Columbus Exploration (CE). Kane is charged by the court with overseeing the recovery project and has the benefit of a permanent injunction and exclusive salvage rights over the SS Central America shipwreck granted by the U.S. District Court for the Eastern Division of Virginia.

"We are excited about returning to the SS Central America and welcome the opportunity to work with Odyssey Marine Exploration on this historic undertaking. We are confident that Odyssey's unparalleled experience, superbly qualified personnel and state-of-the-art equipment will build on the successes of the first recovery effort, which has been characterized as a story of American initiative, ingenuity and determination," stated Kane.

"After conducting an exhaustive review of the extensive amount of historical research available on the shipwreck, our experts estimate the shipwreck still holds a commercial shipment of gold that was valued at approximately $93,000 in 1857, as well as a substantial amount of passenger gold valued in 1857 between $250,000 and $1,280,000. The expert we retained to analyze the extensive collection of records and contemporary accounts of the shipwreck places the most likely 1857 face value of the total remaining passenger and commercial gold at $760,000. The ultimate value of the recovery can only be determined once the total quantity, quality and form of the recovered gold is known," added Kane.

The archaeological excavation, valuable cargo recovery and ship-board conservation will be conducted and underwritten by Odyssey. In return, the company will receive 80 per cent of recovery proceeds until a fixed mobilization fee and a negotiated day rate are paid. Thereafter, Odyssey will receive 45 per cent of the recovery proceeds. Odyssey is presently preparing its recovery vessel, the Odyssey Explorer, to begin work on the site in April utilizing the company's equipment and personnel.

The SS Central America shipwreck site was discovered in 1987 at a depth of approximately 2,200 meters (7,200 feet) and less than 5 per cent of the site was investigated at that time. An extensive collection of gold coins, bullion and raw gold were recovered from the site during the following years. The salvors have not returned to the site for more than two decades as lengthy legal battles played out. In May 2013, the court appointed Kane as receiver to supervise the resumption of recovery operations.

"Our teams have been studying the extensive research and records of the earlier work accomplished on the site as well as research from our own archives," noted Mark Gordon, Odyssey's president and chief operating officer. "We expect the project to move forward quickly since we have access to all the previous records and images, which provide us with a great overview of the shipwreck. This has allowed us to begin planning operations that will focus on the most interesting and prospective areas of the site after we have completed a pre-disturbance survey and high-resolution photomosaic."

Greg Stemm, Odyssey's CEO, commented, "The SS Central America is one of the greatest shipwreck stories of all time. We're honored to be working with the Receiver and his team to share the next chapter of this historically important shipwreck with the world.

"We're very familiar with mid-19th century paddlewheel shipwrecks, as well as the range of artifacts that are likely to be on the site. We have extensive experience with the tools and techniques required for this archaeological excavation, which will be very similar to the successful recovery of more than 51,000 coins and 14,000 artifacts from the SS Republic completed by Odyssey 10 years ago. We're also experienced in working at extreme depths. The SS Central America is less than half the 4,700 meter (15,000 feet) depth of the SS Gairsoppa, from which we successfully recovered nearly $80 million in silver over the past two years."

"The SS Central America project builds upon our pipeline of existing shipwreck recovery contracts, where our compensation rights are secured and legal issues resolved prior to cargo recovery," added Gordon. "As previously stated, we intend to target one or more shipwreck cargo recoveries each year totaling at least $50 million annually, with the intention of generating a substantial dependable flow of revenue for many years to come. We plan to pursue other shipwreck projects in 2014, and the Central America project provides a great addition to our schedule."

About the SS Central America

The SS Central America was a wooden-hulled, copper-sheathed, three-masted sidewheel steamship launched in 1852 as the SS George Law. The ship was in continuous service on the Atlantic leg of the Panama Route between New York and San Francisco. Owned and operated by the United States Mail Steamship Company, the SS Central America was caught in a hurricane and sank on September 12, 1857.

When it was lost, the SS Central America was carrying a large consignment of gold for commercial parties, mainly in the form of ingots and freshly minted U.S. $20 Double Eagle coins. Because of the large quantity of gold lost with the ship, public confidence in the economy was shaken, which contributed to the Panic of 1857.

Great personal fortunes were lost as well. The Central America carried 477 passengers, mostly miners and businessmen returning east from California with their personal possessions and fortunes in gold accumulated after years of prospecting during the Gold Rush.

The SS Central America shipwreck site was confirmed in 1987, and over a three-year period more than 1,000 hours of bottom time, a large quantity of commercial gold was recovered from approximately 5% of the SS Central America shipwreck. This gold was ultimately marketed and sold in a series of auctions and private sales.

Gold previously recovered from the SS Central America included rare territorial coins and many highly sought-after mint state Double Eagle $20 gold pieces and rare ingots. The coins and ingots from the site have seen continued strong interest from collectors over the years.

New CFTC chief supports commodity speculation limits

Massad Pledges Support for Commodity Speculation Limits
By Silla Brush
Bloomberg News
Thursday, March 6, 2014
WASHINGTON -- Timothy Massad, the Treasury Department official named to head the U.S. Commodity Futures Trading Commission, said he would work to approve speculation limits in oil, natural gas, and other commodities that have been resisted by banks and parts of the energy industry.
Massad and commission nominees Sharon Y. Bowen and J. Christopher Giancarlo told Senate Agriculture Committee lawmakers at a confirmation hearing today that they would look to review data and public comments on a current CFTC proposal to set limits on how large a position a trader can have in commodity markets.
"It is very important that we work to finalize that rule," Massad, 57, said at the hearing in Washington. "They are a very important tool in the toolkit, and Congress obviously has directed us to take action in this regard. I will make that a priority." ...
... For the full story:

The US Government is one big lie and our leaders are fools , puppets and misdirections.....Notice when the hard men and women sit down to decide strategy , Biden and Obama are sent on " vacation " or somehow fail to attend / participate in the critical  meetings.....


The U.S. Government Is One Big Lie

The US economy remains in recession.  And once the truth breaks out, the stock market will slip into crash mode.  The stock market is up on Fed manipulations, and the economy is up on lies and propaganda.  It’s a poisonous combination  - Richard Russell, King World News LINK
I encourage everyone to read that brief interview with Richard Russell.

As I discussed yesterday, we know the Government is lying through its teeth to us about the Ukraine situation.  It's amazing how quickly CNN and Fox News seem to have misplaced the Victoria Nuland phone tape  discussing the $5 billion the U.S. has "invested" to foment the unrest over there.  You know, the one in which she says "F_CK the EU."  Both CNN and Fox are disseminating nothing but the lies being promoted by Obama/Kerry etc without researching or reporting on the actual facts.  Kind of ironic that CNN backs the Obama regime's backing of the neo-Nazis who have taken control of western Ukraine (I'm not surprised that Fox News supports this).

The Government also lies about the employment situation in this country.  We saw the most recent example today with the Bureau of Labor Statistics monthly employment report claiming that the economy generated 175,000 jobs in February.   I don't want to go through a detailed analysis of the data as reported and the obvious statistical manipulation implemented on that data.  The real issue is the legitimacy of the data itself.  This requires thinking about the data as presented in the context of every other business data report that was released during February, especially the reports from the private sector.

As one example, the BLS claims that the construction industry added a total of 55,000 jobs in January and February.  Yet, we know from homebuilder reports that housing starts have been tanking.  And what about the "bad weather" narrative.  If housing starts declined over the period and bad weather prevented this, how on earth is it possible that profit-seeking businesses hired workers?  Does anyone really think that a homebuilder executive, who is trying to keep his stock price elevated so he can unload as many shares as possible (see the recent S-4 SEC stock transaction filings - homebuilder execs dumped shares in February), would spend money hiring workers who don't have to work?

That's just one line item example.  There are several.  The point here is that if you look at the numbers being reported - regardless of how they are manipulated to paint a positive picture - in the context of everything else that has been reported about the economy, there's no possible way that the economy generated job growth in February.  In fact, the ill-reputed "birth/death" model, which everyone understands is used as "plug" number the Government uses to pad the employment data, explains 125,000 of the 175,000 jobs reported. The birth/death model has been dissected and shown to be a complete fraud ad nauseum.

The smart money must understand this, because the S&P 500 futures gapped up nearly 10 points when the number hit the tape.  It's currently trading down 3 points, 13 points lower than the initial buying orgy.  The real damage was inflicted by the banks who manipulate the gold and silver market.  Instantaneously as the report hit the newswires, gold was demolished for a total of $25 before recovering some of the manipulated damage.  Right at the time the report was released, nearly 8,000 gold contracts were unloaded on the Comex..  To put this into context, in the 14 hours and 20 minutes of Comex gold futures trading that occurred from 6 p.m. the previous evening until the 8:30 a.m. Comex open today, the total volume was roughly 45 contracts per minute.  You decide if the 8,000 contracts dumped at 8:30 a.m. was legitimate selling or motivated Fed/Govt manipulation

The most frightening part about all of this the fact that the Government finds it acceptable to lie to us about everything.   The U.S. Government has become as corrupted and self-serving as was the old U.S.S.R Government that many of us grew up fearing.   The lack of fear about what has happened in our own backyard is truly stunning.



This Demonstrates The Irrelevancy Of Obama And Biden

The crisis in Crimea won’t keep President Barack Obama from forging ahead with a weekend getaway with his wife and daughters in the Florida Keys...The vacation is Obama’s third of the year - The Washington Post - LINK
The U.S. and Russia are inching toward a serious confrontation over the U.S.-led coup of the Ukrainian Government and Russia's move to protect its interests in Crimea, millions of people in this country struggle to make ends meet and Barack and Joe decide to take their families on a warm-water vacation.

It doesn't really matter because Obama and Biden are nothing but figureheads who represent the extremely wealthy corporate and individual interests which paid for their election.  Those are the real players behind the scenes.  They use Obama to sign the Executive Orders which enact the policies designed to make the real players even richer - at the taxpayer's expense, of course.

Notice how Biden has been mysteriously silent on the Ukraine situation?  The White House can't afford the risk that Biden says something completely stupid, or "off-teleprompter," so I'm sure he was instructed to disappear.   Obama has volunteered to stay away from Democratic incumbent campaigns because of his poor approval ratings, so he's pretty much dead weight until his term expires.

I guess the only problem I have with letting Obama and Biden go on perma-vacation is that the wealthy elitists should be funding their vacations and not the taxpayers.


Let me make sense of what’s happening in Ukraine for you as that country descends into armed chaos, threatening to oust the legitimately elected Ukrainian President Viktor Yanukovich and place the country in the hands of rebel forces spearheaded by Ukrainian neo-Nazis and Chechen Islamist radicals.
Assistant Secretary of State Victoria Nuland, along with Obama adviser and designated liar Susan Rice, are neo-conservatives, neocons for short. The neocons, first in the form of the Trilateral Commission and more recently as the Carlyle Group, thrive on military conflict. When the world is at war, the neocons and the defense contractors who work with them make enormous amounts of money.
The neocons don’t care which side you’re on, as long as they can work with you to create a political situation that they can grow into a war from which they will profit.
The Ukrainian “revolution” was fostered and encouraged by Nuland, Rice and U.S. Ambassador to Ukraine Geoffrey Pyatt. These three were instrumental in staging a destabilization campaign. Working with Ukrainian neo-Nazis, they fostered the Ukrainian uprising that has caused the elected Ukrainian president to flee from Kiev.
Arizona Sen. John McCain was also part of this duplicity. McCain went to Kiev in December last year and helped incite the mobs that would overthrow the legitimately elected president. If there were such a thing as a Nobel Anti-Peace Prize, McCain would win it hands down for his work in Egypt and Syria, topped off by what he’s done in Ukraine.
The U.S.-supported insurgents have taken over Kiev and now hold the Ukrainian people hostage as the U.S. stands down. Barack Obama mouthed the emptiest of words – there will be “costs” to Russia for military action against the insurgents – while the U.S. found that its hands were tied.
In the early stages of the rebellion, Ukrainian President Yanukovich met with the rebels staging the uprising, and the two parties agreed to stop the violence and make an orderly transition to a new government chosen in a new set of elections. Instead, the right-wing rebels ignored the agreement and took over Kiev by force, with their armed patrols maintaining control through violence.
The situation in Ukraine has been painted as a conflict between Vladimir Putin’s Russia, the so-called bad guys, and Ukrainian rebels, the so-called good guys who seek to oust Russia from a position of influence in Ukraine and install a new government that will be responsive to the Ukrainian people.
Don’t believe a word of it.
The Ukrainian nationalists are fascists. Washington’s original purpose for staging a coup in Ukraine was to move Ukraine away from Russia and bring Ukraine into the European Union. In other words, the neocons and the bought-and-paid-for “moderates” in the Obama administration wanted to wrest control of Ukraine from Putin’s hands and gain economic and energy control over the country. As Dr. Stephen F. Cohen has pointed out, Western nations, with the U.S. leading the way, have been provoking Putin for decades. We’ve expanded NATO to include former Soviet states – Ukraine looks like the next target – and we’ve attacked allies of Russia, including Libya and Iraq. The U.S. – along with other Western nations – through our incursions into the politics, economics and national security of Russia and several of its allies, has effectively caused the situation that is now unfolding in Ukraine. Cohen is right.
Putin is certainly not a good guy, but he is not the villain in this. The Jews have always been canaries in the coal mine of human rights in Russia, and Putin has been better to Russian Jews than any other Russian leader in the past century. With the elected government now driven out of Ukraine, the anti-Semitic U.S.-backed fascist thugs who have assumed control are vandalizing synagogues and threatening the lives of Jews in Crimea.
Putin has also been forced to deploy military assets to Crimea, an important region that Russia ceded to Ukraine in the 1950s, when the USSR was reaching the height of its power and Ukraine was one of its puppet states. The majority population in Crimea is Russian, and its warm-water Black Sea ports are critical to Russian military and trade interests. Russia cannot afford to let the Crimean region fall into the hands of the insurgents who are trying to take over Ukraine.
In addition to deploying military assets in Crimea, Putin has contacted his allies in at least eight other strategically located countries to assure that Russia has access to those countries’ military facilities so Putin’s forces can extend their long-range naval and strategic bomber capabilities. In other words, the U.S. interference in Ukrainian politics has resulted in Putin expanding his military influence, while at the same time Barack Obama is bent on shrinking our own military to pre-World War II levels.
Once again, the incompetent, uninformed and uninvolved president of the U.S. has drawn a pink line in the sand. Obama doesn’t know whose side he’s on. He didn’t even bother to attend the meeting of his national security advisers on Friday afternoon as the Ukrainian conflict was escalating and Putin was deploying his military. The new game in Washington, D.C., is not “Where’s Waldo?” It’s “Where’s Barry?” They took the trouble to Photoshop Obama into pictures of national security meetings during the Benghazi crisis. In this case, they’re not even bothering to pretend he’s in charge.
Obama hasn’t got a clue about what the conflict in the Ukraine means. Nuland and Rice, two of the four horsewomen of the apocalypse who seem to make so many critical decisions of this administration, told him to blame Putin, so that is what he did.
Now the Russian and Ukrainian people are at grave risk from the Ukrainian nationalists and Chechen Islamic jihadists into whose hands the U.S. has worked to place the fate of that country, and Putin has called on his allies to assist him in expanding his military presence around the world.
The greatest hypocrisy here comes from those who call for open borders with Mexico and amnesty for 30 million illegal aliens who have violated our territorial integrity. It is our own politicians and advisers – Sens. Dick Durbin, Lindsey Graham and John McCain, along with national security renegades like Zbigniew Brzezinski and Madeleine Albright – who have made our borders meaningless. Our foreign enemies are less to be feared than the American subversives who are orchestrating the takeover of Ukraine by pro-Islamist Ukrainian neo-Nazis.

Obama skips national security meeting on Ukraine: What, another happy hour?

President Obama‘s national security team met Saturday on the escalating crisis in Ukraine, minus one key player — the president.
Time Magazine political reporter Zeke Miller posted a tweet suggesting that Obama skipped the meeting and opted instead to be “briefed” by his national security adviser, Susan Riceaccording to The Weekly Standard.
The tweet followed an email from a White House official who said the team met to discuss the situation in Ukraine. Miller tweeted:
Obama did not attend the meeting, but WH official says he has been briefed by Susan Rice and his national security team.

.@ZekeJMiller did susan rice blame video? Or the talking points

Additional updates to follow......


I was so wrapped up in yesterday's Commitment of Traders Report, plus the companion Bank Participation Report, that I completely forgot about the job numbers report due out at 8:30 a.m. EST on Friday.
However, JPMorgan et al were kind enough to jog my memory with their usual signature performance, as both gold and silver [along with some spill-over into platinum] got taken out out to the proverbial woodshed.
The gold price didn't do much in Far East trading, hitting its interim low around 9:30 a.m. in London.  From there it rallied quietly back to unchanged from Thursday's close by the 8:30 a.m. EST jobs number release.  Then gold got smacked for almost twenty bucks, before rolling over and hitting its absolute low at 9:30 a.m. EST.  From that point, the price rallied ten bucks in the next couple of hours before trading sideways from about 11:20 a.m. EST into the 5:15 p.m. electronic close in New York.
The CME Group recorded the high and low price ticks as $1,353.20 and $1,326.60 in the April contract.
Gold closed on Friday at $1,339.50 spot, down $10.90 from Thursday.  Net volume was 155,000 contracts, which was 40% higher than Thursday's net volume.
The silver price barely moved during Far East trading on their Friday.  However, the moment that London open, it got sold down to its interim low at the same time as gold.  The subsequent rally didn't quite make it back to Thursday's closing price in New York before the jobs number came out, but it was close.  After that, the chart pattern was a virtually carbon copy of what went on in gold.
The high and low prices were recorded as $21.61 and $20.755 in the May contract, an intraday move of more than 4%.
Silver closed in New York yesterday afternoon at $20.885 spot, down 55 cents from Thursday's close.  Volume, net of March and April, was very chunky at 66,000 contracts.
The platinum price experienced a mini version of what happened to both gold and silver---and palladium got smacked about 8:30 a.m. GMT in London, and then spent the rest of the day clawing its way back to unchanged on the day.  Here are the charts.
Along with gold, silver and platinum---copper really got clobbered, as JPMorgan et al engineered a price decline in that metal that would make your eyes glaze over.  Ted Butler pointed this out to me on the phone yesterday---and I just know that he will have much more to say about it in his weekly commentary this afternoon, but I thought I'd just mention it briefly here.  Here's the 6-month chart that shows just how ferocious the attack on copper was, as it 'lost' 13.8 cent a pound [4.27%] in one trading session
The dollar index closed late Thursday afternoon in New York at 79.65---and began to develop a slight negative bias starting about an hour before the London open.  From there it drifted lower---and then rallied sharply off its 79.45 low tick at the release of the job numbers.  The high tick [79.84] came about a minute or so before 9 a.m. in New York---and from there it drifted lower as the Friday trading session drew to a close.  The index closed at 79.71, which was up 6 basis points from Thursday's close.
Not surprisingly, the gold shares gapped down at the open, hitting their low of the day around 9:50 a.m. in New York.  From that point they rallied a bit until shortly after 10 a.m.---and then chopped sideways for the remainder of the day.  The HUI finished down 1.66%.
The silver equities got sold down about 3% at the open---recovered a bit---and then gold sold off again.  A tiny rally at the end cut the loses, but Nick Laird's Intraday Silver Sentiment Index still closed down 2.87%.
The CME Daily Delivery Report was surprise, as no contracts were posted for delivery in either gold or silver next Tuesday.  According to the CME's preliminary volume/open interest data for the Friday trading day, there are still about 600 silver contracts open in March.
Another surprise was the fact that an authorized participant added some gold toGLD yesterday, as they reported depositing 48,188 troy ounces of the stuff.  And as of 9:48 p.m. EST last evening, there were no reported changes in SLV.
Joshua Gibbons, the "Guru of the SLV Bar List," updated his website with SLV's data from the close of trading on Wednesday---and here's what he had to say:  "Analysis of the 05 March 2014 bar list, and comparison to the previous week's list---1,009,552.5 troy ounces were added (all to Brinks London), 840,890.5 troy oz were removed (all from Brinks London), and 455 bars had a serial number change.
"The bars added were from: Russian State Refineries (0.5M oz), Krasnoyarsk (0.2M oz), JSC (0.1M oz), and 3 others. The bars removed were from: Russian State Refineries (0.4M oz), Krasnoyarsk (0.1M oz), Yunnan Copper (0.1M oz), Britannia Refined Metals (0.1M oz), and 9 others.
"The bars removed were all bars that had been in SLV for quite a few years; the bars added had never been in SLV before.  As of the time that the bar list was produced, it was overallocated 99.8 oz.  All daily changes are reflected on the bar list."  The link to Joshua's website is here.
There was a smallish sales report from the U.S. Mint on Friday, as they reported selling another 140,500 silver eagles---and that was all.
Month-to-date the mint has sold 2,000 ounces of gold eagles---4,000 one-ounce 24K gold buffaloes---and 1,100,000 silver eagles.  Based on these sales, the silver/gold sales ratio checks in at 183 to 1.  Year-to-date this sales ratio is 53 to 1---which is an amazing in its own right.  Ted will have a lot to say about this in his column today as well.
Over at the Comex-approved depositories on Thursday, they reported receiving 100 kilobars of gold and shipped out 3 kilobars---all from the Scotia Mocatta warehouse.  The link to that activity is here.
There was much more activity in silver, as 392,443 troy ounces were received---and 1,304,799 troy ounces were reported shipped out.  The bulk of the in/out activity was at Scotia Mocatta as well---and the link to that action is here.
After expecting the worst with this week's Commitment of Traders Report, I ended up getting something quite a bit less than that.  Yes, there was deterioration in the Commercial net short positions in both gold and silver, but not was bad as I was expecting.
In silver, the Commercial net short position declined by only 784 contracts, or 3.9 million ounces of silver.  The total Commercial net short positions now sits at 198.8 million ounces, which is miles off its December 2013 low.  Ted Butler said that the raptors [the Commercial traders other than the Big 8] sold 2,200 of their long positions---and surprisingly enough, JPMorgan bought back about 500 contracts of its short-side corner in the Comex silver market, which Ted says is down to 18,000 contracts---still an outrageous number.
In gold, the Commercial net short position increased by only 4,486 contracts, or 448,600 troy ounces.  The Commercial net short position in gold currently sits at 12.1 million troy ounces.
Ted says that JPMorgan sold 5,000 contracts of their long-side corner in the Comex gold market---which is now down to 53,000 contracts, or 5.3 million ounces.
Although I was relieved that the report wasn't as bad as I was expecting, it still doesn't change the fact that JPMorgan et al have been aggressive sellers of last resort as these rallies have unfolded, particularly since both gold and silver crossed their respective 200-day moving averages.
As I've been saying for the last few weeks, "da boyz" could pull the plug on these rallies at any time---and ring the cash register while they're at it.  But, on the other hand, they could let them run for as long as they want by just putting their hands in their pockets and not selling long positions or buying short positions as aggressively as they have.  But just looking at the 1-year gold and silver charts, it appears that the tops of these current rallies are already in.
However, with things the way they are in the world right now, it may not be as easy for them this time around---but as I said in The Wrap yesterday---I'm always on the lookout for "in your ear."  So should you.
The March Bank Participation Report [BPR] couldn't have been much worse than it was---and as I go through it, please don't forget that because the BPR data is extracted from the above COT Report, for this one day a month we can compare the data from one report directly with the other.
In gold, 4 U.S. banks reduced their net long position by 18,118 Comex contracts---and is now down to 2.56 million ounces.  Since Ted says that JPMorgan's long position [from the above COT Report] in gold is about 5.3 million ounces, this means that the other 3 U.S. banks have to hold a collective net short position or 2.74 million ounces of gold in the Comex futures market.
Also in gold, 22 non-U.S. banks increased their net short position by 6,751 Comex contracts in the March BPR.  Their collective net short position now sits at 3.69 million ounces.  I suspect that a decent chunk of that is owned by Canada's Scotiabank---so when you divide up what's left of that 3.69 million ounces between the other 21 non-U.S. banks, their respective short positions don't amount to much---and border on immaterial.
Here's Nick's BPR chart for gold.  The "click to enlarge" feature really helps.  Charts 1 and 2 are self-explanatory---but it's charts 3, 4 and 5 that contain the data I refer to above.  In Chart 5 it's also easy to see where JPMorgan switched from being net short the Comex gold market, to being net long.  The data showed up in the June BPR, so the actual event happened in May.
In silver, 3 or less U.S. banks increased their net short position in Comex silver by 4,672 contracts since the February BPR.  The net short position held by the '3 or less' banks is back up to 18,748 contracts, or 93.7 million ounces.  As Ted mentioned in his comments in the COT Report above, JPMorgan's short position in Comex silver is about 18,000 contracts, so it's obvious that if 2 other U.S. banks hold any short positions in Comex silver at all, their positions are immaterial---and it's entirely possible that there is only one U.S. bank holding short positions in the Comex silver market---and that's JPMorgan Chase.
Also in silver---and assuming that there are 3 U.S. banks holding Comex silver contracts---there are 12 non U.S. banks that hold Comex silver contracts.  Their net short position increased by exactly 3,300 contracts from the February BPR---and currently totals 17,437 Comex contracts, or 87.2 million troy ounces.  It's my opinion that well over 50% of that 87.2 million ounces is held by Canada's Scotiabank, so if you divide the remaining ounces up between the 11 remaining non-U.S. banks, their positions are immaterial as well, especially when you consider the fact that somewhere between 90 and 100% of the 18,748 contracts held by the '3 or less' U.S. banks are held by just one U.S. bank.
Here's the Bank Participation Report in silver---and it reads the same as the one for gold.  Two things of note here in Charts 4 and 5---and the first is the blow-out of the U.S. banks' short position back in August 2008 when the Comex short positions held by Bear Stearns were taken over by JPMorgan Chase---and the October 2012 blow-out of the non-U.S. banks' short position in silver when Canada's Scotiabank was forced to report Scotia Mocatta's Comex silver [and gold] short positions to the CFTC for the first time.  Both events stand out like the proverbial sore thumbs that they are.
In platinum, three or less U.S. banks increased their net short position by 2,055 Comex contracts in the March BPR.  They are now short 15,353 Comex contracts in this metal, which represents 23.3% of the entire Comex platinum market.  I would bet some serious money that, like silver, JPMorgan holds virtually the entire position on its own.  This is called a 'concentrated short position'.
Also in platinum, 13 non-U.S. banks [that's a minimum number] increased their short position in that metal by a chunky 2,639 contracts in the March BPR.  These 13 non-U.S. banks now hold 6,264 Comex contracts between them---and unless they're all concentrated in one or two banks, these positions, when divided up more or less equally, are immaterial compared to the Comex short positions held by the 3 or less collusive U.S. banks.
Also note the immaterial Comex platinum long positions [Chart 5] held by the 3 or less U.S. banks.  This would indicate that the short positions they hold are for price-controlling purposes as short sellers of last resort.
In palladium, 3 or less U.S. banks are short 8,448 Comex contracts, a decline of 484 contracts since the February BPR.  This short position still represents 20.9% of the entire Comex futures market in palladium.  These '3 or less' U.S. banks don't hold a single long contract between them, as every Comex contract they own is on the short side.
Also in palladium, 14 non-U.S. banks [and that's a minimum number as well] increased their net short position in Comex palladium futures by a chunky 1,929 contracts.  These 14 [minimum] non-U.S. banks currently hold 4,413 Comex contracts net short in palladium.  And, like platinum, unless they're concentrated in one or two banks, the positions of most of the non-U.S. banks are immaterial as well.
As I say every month at this time, the price management scheme in all four precious metals is virtually 100% "Made in the U.S.A."---with a little international flavour thrown in from Canada's Scotiabank.  And the amazing part about it is that, as Ted Butler says, you don't have to make this stuff up, as the COT Report and the Bank Participation Report provide all the evidence one needs!
The above four charts, along with the two charts I posted in The Wrap section of yesterday's column, would be just about enough to convince any judge and/or jury that JPMorgan et al are guilty as charged in the precious metal price management scheme.
Before heading into the list of today's reading material, here's a FRED chart courtesy of Elliot Simon.  This is the Money Multiplier Chart---and with a ratio of under 1.0---it has deflation written all over it.
I have a decent number of stories for you today, including all the ones about the current situation in the Ukraine---and I hope you have enough time in what's left of your weekend to read all the ones that interest you.
Selected news and views......

Doug Noland: Q4 2013 "Flow of Funds" and Geopolitical

I fear that the unfolding Ukrainian crisis and rising tensions between China and Japan are no mere coincidence. I have no reason to believe that Russian and Chinese officials are coordinating their geopolitical thinking, maneuvers or strategies. I do, however, sense that the changing global financial and economic backdrop is altering incentives, disincentives and the calculus of cooperation, coordination and confrontation.

The world is indeed changing, but certainly not in the manner those seduced by inflating securities prices behold. Sure, central bank liquidity is still expanding and the global debt mountain just keeps rising to the stars, increasingly unhinged from real economic wealth. Yet the global economic pie has begun to decay. I fully expect mounting domestic economic and global political pressures to increasingly dictate a much more aggressive stance with respect to “geopolitics.”

I’ll further add that I don’t believe the ongoing melt-up in U.S. stocks and the rapidly deteriorating geopolitical backdrop are coincidental. Again, from my analytical framework, both are creatures of historic monetary inflation. Serious (faltering Bubble) stress at the “periphery” now dictates erratic behavior many would view (from the old world view) as irrational. Meanwhile, liquidity flooding into the “core” feeds a historic speculative Bubble. The Russians might very well see it in their relative best interest to dig uncompromisingly in for the long hall, believing the West actually has more to lose. The backdrop would seem to ensure we’re entering a period of extraordinary uncertainty, although over-liquefied securities markets remain priced for extraordinarily low risk.
Doug's weekly Credit Bubble Bulletin is always a must read---and I pulled it off the Internet site before reader U.D. got around to sending it to me.

Hugo Salinas Price: "Of Paper Money, Digital Money And Gold"

The digital “Bitcoin” has bit the dust at Mt. Gox Bitcoin Exchange; over $400 million US has evaporated, or perhaps moved into someone’s pocket. The news is all over the Internet these days.
“Digital money” is accepted world-wide. There exists only a remnant of fiat paper money which is increasingly and deliberately made more difficult to use and transport physically. The reason being, that digital transactions leave a trail of information which governments use to control the behavior of their subjects (we can hardly call them “citizens” any longer) whereas citizens using paper money in their dealings leave no trail.
A bank in Mexico, of which I have personal knowledge, receives millions in dollar bills every week in thousands of individual money-exchange transactions. This presents a problem for the bank. Why? Because not one bank in the US will accept these dollar bills (mostly twenties) for credit to the Mexican bank’s account.
Only the long-established Mexican banks can remit their dollar bills for credit to the US, and then, only to Bank of America. The bank of which I speak is relatively new – though it has well over 12 million individual account holders - and Bank of America will not receive dollar bills from it. Other Mexican banks of recent creation are in the same fix.
This excellent commentary by Hugo was posted on Internet site on Tuesday---and I thank U.K. reader Tariq Khan for sharing it with us.

Norms for gold import in India tightened

The government has tightened norms for Indians bringing gold into the country following a spurt in smuggling and pressure on inward remittances as overseas workers prefer to bring their savings in gold.
Passengers will now have to mention the engraved serial number of gold bars in the baggage receipt issued by Customs. For bringing gold in any other form, including ornaments, passengers will have to declare item-wise inventory of the ornaments being imported with baggage receipt, according to a Central Board of Excise & Customs directive.
The apex indirect taxes body has also directed its field officials to ascertain the antecedents of such passengers, source of funding for gold as well as duty being paid in foreign currency, person responsible for booking of tickets to prevent the possibility of misuse of the facility by unscrupulous elements, who may hire such eligible passengers to carry gold for them.
This short gold-related news item was posted on the Economic Times of India website very early yesterday morning IST---and I thank Ulrike Marx for her final contribution to today's column.

Dr. Jeffrey Lewis: The mainstream grapples with the last manipulated asset class

There is something rather absurd about the ever-so-slightly loosening death grip that the mainstream financial media has around the issue of precious metals price manipulation. The painfully reluctant (and largely incomplete) reports on the subject have fueled a series of seemingly derivative-like conspiracies.
It's not as if the issue is really that complicated. Therefore, it must be part and parcel - an extension of the mechanism. Perhaps the hope is that partially educating or entertaining the masses, followed by rebuttals from a string of authorities, would put the issue to bed? But clearly, it cannot be that complex.
Most of you are familiar with the core issues. It would take approximately 15 minutes to explain and demonstrate to a well-trained financial journalist the conspiracy facts surrounding precious metals price manipulation. It is the same management that occurs every day in all directions, intended for profit and to control the rate of interest, perception of currencies, and the value of money.
This excellent must read commentary by Jeffrey was posted on the Internet site yesterday---and it's another item I found in a GATA release from yesterday.



After a quarter of a century, the most remarkable aspect of the growing awareness of price manipulation in silver and gold is in how little the story has changed over that time. For me, it was always a case of excessive and concentrated short selling on the COMEX, mostly by speculators called commercials. For many years, I couldn’t narrow the identity of the manipulative traders beyond the four or eight largest traders thanks to CFTC reporting guidelines.  That’s morphed into being able to pinpoint JPMorgan as the prime manipulator as a result of government reports and correspondence. The fact that JPMorgan was able to flip a short side market corner in COMEX gold to a long side market corner is the real highlight of 2013, as well as providing the ultimate proof of manipulative intent. - Silver analyst Ted Butler: 05 March 2014
I have little to add to what I've already said about yesterday's price action further up in this column.  Precious metal prices could go either way from here---and as Ted Butler so succinctly put it, it's 100% up to JPMorgan which direction they go.  Because as the data from the COT and Bank Participation Reports above shows, this world-wide price management scheme in all four precious metals [plus copper] is "Made in the U.S.A."
Of course, with the problems facing the world on all fronts these days, a black swan out of left field is entirely possible at this juncture.  And depending on what form it takes, there may be no amount of money printing by any central bank, either individually or collectively, that could make things right again.
And, as always, there's the never-ceasing flow of gold from West to East, which is a phenomenon that isn't about to end any time soon regardless of the price.  The Chinese imports through Hong Kong in January have now been officially released---and Nick Laird was kind enough to share the updated chart with that data included.  As always, it's a sight to behold.
That's all I have for the day and for the week , I'm off to bed.  See you on Tuesday.
Additional items.....

Meet The Mysterious Firm That Is About To Leave Blythe Masters Without A Job

Tyler Durden's picture

It was about a month ago when it was revealed that the infamous JPMorgan physical commodities group, plagued by both perpetual accusations of precious metal manipulation and legal charges most recently with FERC for $410 million that it had manipulated electricity markets, was in exclusive talks to be sold to Geneva-based Marcuria Group. It was also revealed that Blythe Masters, JPMorgan’s commodities chief, "probably won’t join Mercuria as part of the deal." Of course, we all learned the very next day that Ms. Masters - an affirmed commodities market manipulator - and soon to be out of a job, had shockingly intended to join the CFTC trading commission as an advisor, a decisions which was promptly reversed following an epic outcry on the internet. This is all great news, but one thing remained unclear: just who is this mysterious Swiss-based company that is about to leave Blythe without a job?
Today, courtesy of Bloomberg we have the answer: Mercuria is a massive independent trading behemoth, with revenue surpassing a stunning $100 billion last year, which was started less than ten years ago by Marco Dunand and Daniel Jaeggi, who each own 15% of the firm's equity. And it probably should come as no surprise that the company where the two traders honed their trading skill is, drumroll, Goldman Sachs.
Dunand and Jaeggi first met studying economics at the University of Geneva in the late 1970s. Their friendship was galvanized a few years later working for grain trader Cargill Inc. and sharing an apartment while on a training course in Minneapolis. Mercuria’s corporate strategy and culture have reflected the professional paths of its founders, who spent the bulk of their early careers at investment banks.

They left Cargill in 1987 for Goldman Sachs’s J. Aron unit in London. They stayed until 1994, then joined Phibro for a five-year stint when it was controlled by Salomon Brothers.

That experience defined the trading strategies of Dunand and Jaeggi who moved from Phibro to start Sempra’s European and Asian trading business in 1999 before founding Mercuria in 2004.

Without a commanding position in any region or commodity, the firm has sought out bottlenecks and imbalances in niche markets and positioned itself to make money trading derivatives using insights gained from its physical trading. In its early days it profited by opening a trade route shipping Russian crude to China from Gdansk, Poland.

Mercuria also differs in tone. At its headquarters on Geneva’s poshest shopping street, traders and executives wear open-collared shirts, sweaters and jeans, a sharp contrast to the shirt-and-tie policies at more established firms.
Not surprisingly, some of the key hires in the past couple of years as the firm expanded at a breakneck pace and added some 570 people, bringing its total headcount to 1,200, were from Goldman: "The hires include Houston-based Shameek Konar, a former managing director with Goldman Sachs Group Inc. who is chief investment officer overseeing Mercuria’s corporate development, including the JPMorgan negotiations. Victoria Attwood Scott, Mercuria’s head of compliance, also joined from Goldman Sachs." We find it not at all surprising that the Goldman diaspora is once again showing JPMorgan just how it's done.
So just how big is Mercuria now? Well, it is almost one of the biggest independent commodities traders in the world:
Mercuria traded 182 million metric tons of oil or oil equivalent in 2012, according to its website. Vitol, the largest independent oil trader, handled 261 million and Trafigura traded 102.8 million tons of oil and petroleum products. Brent crude rose 3.5 percent that year in a fourth annual advance. It slipped 0.3 percent in 2013 and is down 2.6 percent this year at about $108 a barrel.

With more trading companies trying to gain an edge by owning businesses that produce, store or process commodities, Mercuria followed suit. It now has stakes in a coal mine in Indonesia, oil and gas fields in Argentina, oil storage in China and a biodiesel plant in Germany. In June, it invested $50 million in a Romanian gas producer.

The JPMorgan unit employs about 600 and represents a range of assets assembled over decades by firms including Bear Stearns Cos. and RBS Sempra, which the bank bought during an acquisition binge beginning in 2008.

They include gas and power trading on both sides of the Atlantic, physical assets spanning 40 locations in North America, an oil-trading book with a supply and offtake contract with the largest refinery on the U.S. East Coast, 6 million barrels of storage leases in the Canadian oil sands, and Henry Bath & Sons Ltd., a 220-year-old metal-warehouse operator based in Liverpool, England.
In other words, the old boys' club is about to get reassembled, only this time even further away from the supervision of the clueless, corrupt and incompetent US regulators. And with the physical commodity monopoly of the big banks finally being unwound, long overdue following its exposure here and elsewhere over two years ago, it only makes sense that former traders from JPM and Goldman reincarnate just the same monopoly in a jurisdiction as far away from the US and Fed "supervision" as possible. Which also means that anyone hoping that the great physical commodity warehousing scam is about to end, should not hold their breath.
As for the main question of what happens to everyone's favorite commodity manipulator, "It hasn’t been determined whether Blythe Masters, who has led the JPMorgan unit since 2006 and orchestrated the buying spree, would join Mercuria, a senior executive at Mercuria said." Which means the answer is a resounding no: after all who needs the excess baggage of having a manipulator on board who got caught (because in the commodity space everyone manipulates, the trick, however, is not to get caught).
Finally, with "trading" of physical commodities, which of course include gold and silver, set to be handed over from midtown Manhattan to sleep Geneva, what, if any, is the endgame?
The talks with JPMorgan forced Mercuria to put another deal on hold. Mercuria was nearing the sale of an equity stake of 10 percent to 20 percent to Chinese sovereign wealth fund State Development & Investment Co., according to two people familiar with the matter. The discussions with SDIC were halted once Mercuria neared the JPMorgan business, one of the people said.
But they will be promptly resumed once JPM's physical commodities unit has been sold, giving China a foothold into this most important of spaces. Because recall what other link there is between China and JPM?
One may almost see the connection here.

Additional links from Ed Steer's 3/7/14 Missive


BofA Said to Suspend Head of Spot Foreign Exchange

Bank of America Corp., the second-biggest U.S. lender, suspended a senior foreign-exchange dealer amid a probe into the alleged manipulation of currencies, a person with knowledge of the matter said.
Joseph Landes, the London-based head of spot foreign exchange for Europe, Middle East and Africa, has been put on leave while the bank investigates, said the person, asking not to be identified as the details are private. Landes, the first trader known to have been suspended by Bank of America in the investigation, didn’t respond to an e-mail or calls to his work phone or mobile. Lawrence Grayson, a Bank of America spokesman, declined to comment on the suspended employee.
At least 21 employees of global banks have been fired, suspended or put on leave since Bloomberg News first reported in June that dealers said they shared information about client orders to manipulate benchmark rates used in the $5.3 trillion-a-day currency market. No firms or traders have been accused of wrongdoing by government authorities.
This Bloomberg story was posted on their Internet site yesterday morning MST---and it's the first contribution of the day from Manitoba reader Ulrike Marx.

BOE Extends Stimulus to Sixth Year Underpinning Revival

Bank of England policy makers extended unprecedented stimulus into a sixth year today as they seek to ensure the economy fully recovers from the damage wrought by the financial crisis.
The Monetary Policy Committee led by Governor Mark Carney held its benchmark interest rate at 0.5 percent, as predicted by all 52 economists in a Bloomberg News survey. The central bank has maintained borrowing costs at a record low since March 2009, the longest stretch of unchanged policy since the 1940s. It also said today it will reinvest funds from gilts in its asset-purchase facility that mature tomorrow.
Carney says there’s “no rush” to remove the emergency stimulus put in place by his predecessor Mervyn King, even after the strongest expansion since 2007 pushed unemployment toward the 7 percent level at which officials had said they’d consider a rate increase. With signs the recovery is becoming entrenched, traders are betting the BOE will lift borrowing costs next year after officials raised their growth forecasts last month.
This short Bloomberg story, filed from London, was posted on their Internet site very early yesterday morning MST---and it's the second offering of the day from Ulrike Marx.

Italy and France on E.U.'s economic 'watch list'

Italy and France were the major euro area countries put on the European Commission's economic "watch-list" over fears about persistently high debt and deficit levels.
The two countries were among 14 nations deemed to have "macro-economic imbalances" in their economy by the EU executive in a series of reports on 17 countries published on Wednesday (5 March).
Italy "must address its very high level of public debt and weak external competitiveness," the commission said, adding that its economy is hamstrung by "a continued misalignment between wages and productivity, a high labour tax wedge, an unfavourable export product structure and a high share of small firms which find it difficult to compete internationally."
This news item, filed from Brussels, was posted on Internet site late yesterday morning Europe time---and it's the first contribution to today's column from Roy Stephens.

If you're sore about the London gold fixing, contact Berger & Montague

GATA's sometime lawyers, Berger & Montague in Philadelphia, a leading national antitrust law firm, are among those investigating complaints about the daily London gold price fixing, whose suppression of the gold price was documented by GATA's late board member Adrian Douglas in 2010.
If such a lawsuit ever got into what is called the discovery phase, the records of the banks might become subject to a court's review and eventually public, exposing the banks' transactions with the Western central banks that long have been underwriting the gold price suppression scheme.
Of course GATA supports such exposure and encourages gold traders and gold mining companies who feel harmed by gold price suppression generally and the London gold fix particularly to contact Berger & Montague's lead lawyer, GATA's friend Merrill Davidoff, to learn more about the firm's investigation. Presumably that investigation could lead to another federal anti-trust lawsuit for which plaintiffs would be needed.
This commentary by GATA's Chris Powell, plus all the appropriate links, was posted on the Internet site yesterday.

The Bank of England is seeking a global pact among banks to suspend default clauses in some derivatives contracts during a crisis, in a bid to ward off bank death spirals that cascade through the financial system.
The U.K. central bank wants lenders and the International Swaps and Derivatives Association Inc., an industry group, to agree to temporarily halt claims on banks that become insolvent and need intervention, Andrew Gracie, executive director of the BOE’s special resolution unit, said in an interview.
“The entry of a bank into resolution should not in itself be an event of default which allows counterparties to start accelerating contracts and triggering cross-defaults,” Gracie said. “You would get what you saw in Lehmans -- huge amounts of uncertainty and an uncontrolled cascade of closeouts and cross defaults in the market.”
Regulators and central banks around the world have grappled with banking reforms aimed at keeping public money safe during a financial crisis, since the fall of Lehman Brothers Holdings Inc. in 2008 prompted governments to prop up failing lenders to prevent economic disaster.
The Financial Stability Board, which brings together regulators and central bankers from the Group of 20 nations, has ranked banks and insurers by their potential to cause a global meltdown and demanded bigger financial cushions to avert a repeat of the 2008 credit freeze.
The G20 has also drawn up guidelines aimed at harmonizing the powers available to regulators to wind down a crisis-hit bank.

Own Jurisdiction

Resolution authorities are regulatory bodies with legal powers to unwind a bank and impose losses on creditors. They have powers to enact derivatives stays in a crisis only in their own jurisdiction.
The BOE and other international regulators are “dealing with firms that are global,” Gracie said. “So what we are trying to do is get an ISDA protocol adopted by the banks and their major counterparties which replicates this statutory stay in contractual form.”
ISDA declined to comment beyond a statement published on its website in November.
“Developing such a provision that could be used by counterparties will continue to be a primary focus of our efforts in this important area of regulatory reform,” ISDA said in the statement. “We are committed to working with supervisors and regulators around the world to achieve an appropriate solution that will contribute to safe, efficient markets.”
A global agreement on stays in derivatives contracts is one of several policies the FSB, which is chaired by BOE Governor Mark Carney, is trying to finish before the G20 meeting in Brisbane in November, Gracie said.


The central bank is also seeking agreement on a global standard for so-called gone concern loss absorbing capacity, which is junior debt that can be written down in the event of a bank failure, insulating government funds and the wider financial system from the shock.
Banks should ideally have a loss absorbing capacity, made up of subordinated debt and capital, equal to around 20 to 25 percent of their assets weighted for risk, Gracie said.
Debt that can be bailed-in during a crisis will cost banks more to issue, Gracie said, as the implicit government guarantee is removed.
“If it didn’t cost more we wouldn’t have achieved what we wanted because we actually want pricing of liabilities to be risk sensitive,” said Gracie. “We want that to regulate leverage and enforce market discipline on banks.”
Gracie joined the U.K. central bank as a director in 2011, heading up its resolution unit. He began his career at the bank in 1988, before leaving in 2006 to spend five years running his own company, Crisis Management Analytics, advising regulators on bank failure.