Volume wasn’t particularly heavy yesterday, so it wasn’t hard to move the precious metals’ prices around. The usual N.Y. commentator had the following to say…”Today’s Comex open was buoyant, with Comex gold up $12 shortly after 9 a.m. But Western follow-through was lacking…volume almost disappeared after 11 a.m. and estimated volume between 1:00 p.m. and the close was only 2,300 lots – which might be a record [low amount]. August gold finished up only $2.20 with estimated volume of 86,944 contracts.”

Silver rose a dime into Sydney trading and, like gold, had its low of the day at 1:00 p.m. in Hong Kong. From there, it rose nicely into the London open, fell into the London silver fix [noon in London...7 a.m. in New York]…and then took off before running into JPMorgan (NYSE:JPM) at 8:30 a.m. in New York. From that point on, even the smallest rally attempt ran into a determined seller.

Much to my [and Ted Butler's] surprise, Monday’s gold down-day resulted in a rise in open interest of 2,940 contracts for a total gold o.i. of 394,900 contracts. Volume was 106,240 contracts. In silver, o.i. rose 434 contracts to 106,225. Total volume traded was 37,362 contracts on Monday. Ted and I were expecting another decline in open interest in both metals…and it didn’t happen. We are both discouraged by the fact that it appears that the bullion banks are in no hurry to cover their short positions…as we had originally assumed they were. Yesterday’s trading volumes…which should also show a rise in open interest in both metals…should be in Friday’s Commitment of Traders report.

The Comex Delivery Report showed that 309 gold contracts were delivered yesterday…along with those 200 contracts of silver that suddenly showed up for delivery on Friday. They [Triland USA Inc.] didn’t waste any time delivering 190 of those contracts to The Bank of Nova Scotia (NYSE:BNS). That leaves [as of yesterday morning] about 2,000 gold contracts and 15 silver contracts left in for June delivery. It’s my bet…that with June less than half over…there will be a lot more deliveries added to these numbers before this month is done.

In other gold news, I see that the U.S. Mint has updated their website and shows that another 15,000 one-ounce gold eagles have been minted since last Wednesday…and another 400,000 silver eagles over the same period. It’s obvious to me that production in both is down. That would jibe with what’s going on in the retail market with slowing sales and falling premiums. There were no changes in either SLV or GLD…and no changes worth mentioning in silver over at the Comex-approved warehouses.

I note in a businessday.co.za story posted at Kitco yesterday that “In the first quarter of this year, South Africa produced 49,710 tons of gold…4,8% less than in the same quarter last year.” And in a Reuters story carried at uk.biz.yahoo.com…and also posted at Kitco…is this tidbit “Gold and gold receivables held by euro zone central banks fell by €18 million…in the week ending June 5, the European Central Bank said on Tuesday… Gold holdings fell because of sales by two euro zone central banks, consistent with the 2004 Central Bank Gold Agreement.” This is well under one tonne of gold…31,250 troy ounces. The ‘run rate’…the maximum amount of gold that the ECB is allowed to sell each week…is 9.6 tonnes [500 tonnes/year]…a figure that the ECB hasn’t come remotely close to selling in the last couple of years of the current Central Bank Gold Agreement. The current CBGA expires in September. There is talk of renewing it for another five years…but so far, that’s all it’s been…talk. It wouldn’t surprise me if the IMF gold makes an appearance here…if it actually owns any, that is.

I have three stories today…and the first one is by far the most important. It’s silver analyst Ted Butler’s latest weekly commentary. In my Saturday rant, I mentioned the huge short positions in both the COT and latest Bank Participation Report. Ted goes into it in more detail, and I urge you to read what he has to say, very very carefully. It’s entitled “Bad News, Good News” and the link is here.

The next story is from smartmoney.com…and it, too, is well worth your time. They have published a profile of John Williams, proprietor of the Shadow Government Statistics Internet site, who long has documented how the U.S. government has been falsifying economic statistics. The profile is headlined “True or False: U.S. Government Statistics Lie,” and you can find the story linked here.

Today’s last story is from the American Press news service…and published in yesterday’s edition of The Independent in London. It bears the headline “North Korea would use nuclear weapons in a ‘merciless offensive’.” In a quote from the story…”Relations between the two Koreas have significantly worsened since a pro-US, conservative government took office in Seoul last year, advocating a tougher policy on the North. Since then, reconciliation talks have been cut off and all key joint projects except the factory park in Kaesong have been suspended.” The article is well worth reading…and the link is here.

I received the photo below from a kind reader [Dave Delve] while I was at the natural resource conference in Vancouver on the weekend. He recently retired from working at one of Alberta’s tar sands operations in Ft. McMurray. The picture bore the caption “Recession Forces Oilsands to Scale down Operations”. The photo tells all.

Gold was not selected arbitrarily by governments to be the monetary standard. Gold had developed for many centuries on the free market as the best money…as the commodity providing the most stable and desirable monetary medium. – Murray N. Rothbard

Both gold and silver showed some life in Far East and early London trading this morning…but, as I’ve noted in the past, all this is done on very little volume…a few thousand contracts in both metals at most. As I’ve mentioned previously, well over 90% of all trading volume occurs in New York. Let’s see what they have in store for us today. And while you’re waiting around, I urge you to run through Ted Butler’s commentary one more time.

See you on Thursday morning.

Source: And Then There’s This…Wednesday, June 10th, 2009

I find it highly suspicious that the Dow hit its high of the day and the US$ hit its low of the day at precisely the same moment that the vertical gold and silver price rallies were cut off at the knees around 10:30 New York time. You can read into that whatever you want.

click to enlarge

Open interest changes for Thursday’s trading are as follows. In gold, open interest rose 1,307 contracts to 361,418. Volume [including switches] was a respectable 100,278 contracts. Silver o.i. rose another 721 contracts to 95,439. Volume was on the lighter side…15,326 contracts.

Well, the contents of Friday’s Commitment of Traders report [for positions held at the end of trading on May 12th] was no surprise, as it confirmed the price action of the last week or so. As I mentioned yesterday…it’s the ’same old, same old’ routine. Neither Ted Butler nor myself were happy about the numbers. In silver it showed that the technical funds in the Non-Commerical category had increased their net long position by 3,696 contracts…and ditto for the small traders in the Nonreportable category [those traders holding less than 150 silver contracts], as they increased their net long position by 1,432 contracts. Going short against them, as usual, were the bullion banks in the Commercial category. They increased their net short position by the same amount…the total of these two numbers…which is 5,128 contracts. Don’t forget, there has to be a short for every long. The link to the full-colour graphics-intensive silver COT chart is here.

It was basically the same in gold. The technical funds in the Non-Commercial category increased their net long position by 8,886 contracts…while the small traders in the Nonreportable category increased their net long position by 1,849 contracts. The bullion banks in the Commercial category took the short side of all those trades to the tune of 10,735 contracts. The gold COT graph is linked here.

Even though the net short position in silver by the Cartel is deteriorating, it’s still pretty low when you look at past history. But what concerns me the most, as I’ve been harping on for the last couple of months, is the large [and growing] short position in gold by the same crooks. Right now in gold, the Gold Cartel is net short 17.1 million ounces in the Commercial category of the COT. During the last twelve months or so, the Gold Cartel’s net short position has varied between 6.9 million ounces when the gold price was at its lows late last year…and 25+ million ounces when the gold price was at its highs early in 2008. So there’s lots of room for the gold price to run to the upside…and even more room for silver. But will JPMorgan (NYSE:JPM) et al, allow it?

I see in a mineweb.com story that Anglogold Ashanti (NYSE:AU) cut their hedge book by another 154,000 ounces during the last quarter and pledges to cut another 150,000 ounces out of its hedge book in the current quarter. As of the end of March, the company had a hedge book of 5.84 million ounces. Between them and Barrick (NYSE:ABX), these two companies hold at least two thirds of world’s remaining forward sales. JPMorgan is the counterparty to a large portion of their respective hedge books. The entire story is linked here.

The Comex Delivery Report for Friday showed that 101 gold contracts were delivered. In silver a very large 782 contracts were delivered…finally! The big deliveries were by Goldman Sachs (NYSE:GS) [220 contracts] and JPMorgan [562 contracts]. The big stopper was Bank of Nova Scotia (NYSE:BNS) with 556 contracts accepted.

I also noted yesterday that the U.S. Mint updated their gold and silver eagles numbers. Friday is a strange day for them to do it. Anyway, the changes weren’t large. One ounce Gold eagle mintings rose a smallish 6,000…and silver eagles rose 55,000 to 1,089,500. My coin dealer [and the usual N.Y. gold commentator] both mentioned yesterday that lots of silver was available now and that premiums on just about everything were falling rapidly. There were no changes in either GLD or SLV yesterday…and Comex-approved silver warehouse stocks rose again…this time a smallish 265,915 ounces.

While the stock market is up sharply since early March, the economy as well as corporate earnings continue to suffer. Today’s chart helps provide some perspective as to the magnitude of the current economic decline. It illustrates that 12-month, as-reported S&P 500 earnings have declined over 90% over the past 20 months [with over 90% of S&P 500 companies having reported for Q1/09], making this by far the largest decline on record [the data goes back to 1936]. In fact, real earnings have dropped to a record low and if current estimates hold, Q3/09 will see the first 12-month period during which S&P 500 earnings are negative. I thank P.S. for sending this along. The graph below tells all…

click to enlarge

I only have three stories today. The first is a GATA dispatch from last weekend entitled “Is U.S. buying back gold pledged to IMF for $100 billion?” It’s a very interesting spin on the ongoing saga of IMF gold and who really physically owns it…or those who may have paper claims on it. The link is here.

The next item is from the Finance and Economics section of The Economist dated May 7, 2009. “But do not mistake the bottom for a vigorous rebound. Consumption may be growing again, but there is every chance it will remain depressed in coming years because of weak income growth, depleted wealth and tightened credit.” That’s the understatement of the year, in my opinion. I thank P.S. for sending the story along. It’s entitled “Off their trolleys” and the link is here.

Lastly is commentary from Eric Sprott over at Sprott Asset Managment in Toronto. He and David Franklin address the question of the derivatives market in an article entitled “The Elephant in the Room”. It’s definitely worth the read, and the link to the pdf file is here.

My momma always told me, the bucket brings up what’s in the well. – J.C. Watts

Today’s blast from the past needs no introduction whatsoever. It’s by the late, great Roy Orbison…and that should tell you all need to know. Turn up your speakers and then click here.

So what will happen to gold and silver next week? Beats me. However, the wonderful set-up that existed a couple of weeks ago in both metals has diminished somewhat…as it is obvious that the bullion banks are [again] going short against all longs in this rally. How long will this current rally last? Don’t know that either. But what I do know is that until the bullion banks stop doing what they’re doing, nothing will change…and they will remain firmly in control of the precious metals market…until they either give up, or are blown up.

Source: And Then There’s This…Monday, May 18th, 2009

But a tiny attempt to run to the upside into positive price territory, that started just before noon Eastern, ran into another not-for-profit seller about an hour later. From there, gold sold off quietly into the close of electronic trading on the Globex. According to the usual New York commentator, estimated volume was 50,990 lots with a switch effect of 7,874 contracts.

Although it may not have seemed like it at first glance, the real ‘wow’ chart of the day was silver once again. It [like gold] ran into the mysterious 3:00 a.m. seller and sold off right into the London silver fix, which is 12:00 noon…7:00 a.m. in New York. The moment that the silver fix was in, the price got nailed for 20 cents in a matter of minutes. Ted Butler said that this smack-down [most likely by JPMorgan (NYSE:JMP)] blasted around 1,000 Non-Commercial long positions out of the water. From that obvious low point, silver began a quiet but intense rally that moved it into positive territory for the day…but obviously, it too, attracted the attention of the same not-for-profit seller as gold did…and at precisely the same time. Nothing free-market about all this. The last three days of silver trading are on the Kitco chart below. The blatant in-your-face price management of the last couple of days is obvious for all to see.

click to enlarge

Open interest changes for Thursday’s big slide in both gold and silver are [as I said yesterday] difficult to interpret because there are so many switches. Gold’s o.i. dropped 2,582 contracts to 329,066…which on the face of it, wasn’t a lot. Volume was a stiff 89,245 contracts. In silver, o.i. actually rose 44 contracts to 89,263. Volume was reasonably heavy…23,749 contracts. It is impossible to get an accurate handle on what Thursday’s o.i. numbers mean until next Friday’s COT.

The new COT came out yesterday…and it was as both Ted and I expected. There was deterioration in both gold and silver. In silver, the deterioration was a bit more than expected. The bullion banks increased their net short position by 2,289 contracts…as all the traders in the other two categories went long…or reduced their own short positions. The net short position in silver increased to 137,300,000 ounces…up a hair over 11 million ounces for the prior week.

In gold, the changes were very small. The bullion banks increased their net short position by 3,811 contracts as the tech funds and small traders went [net] longer. The bullion banks are now net short 15.3 million ounces of gold…that’s as of Tuesday’s cut-off. It certainly has declined since then. Yesterday I estimated it to be around 13 million ounces.

Silver deliveries continue. Yesterday…1,339 contracts were delivered. The big issuer was Deutsche Bank Securities [1,000 contracts]. The biggest receiver/stopper was the Bank of Nova Scotia (NYSE:BNS) [814 contracts]. There were quite a few smaller receivers and stoppers as well. It was a busy day. In gold, there 55 contracts delivered.

Comex-approved warehouse stocks rose by 591,896 ounces. I now have the U.S. Mint’s closing eagle numbers for April. On Thursday they added a smallish 500 one-ounce gold eagles to April’s numbers bringing the final total up to 147,500. In silver, they added 38,500 to bring April’s silver eagle totals up to 2,518,000…the second biggest month of the year. There were no changes in GLD or SLV either.

It was a sort of ‘nothing’ day in the precious metals…as most of the world was shut down for the May Day holiday. Even the usual New York commentator had nothing of interest. One of the only decent gold stories I could find was one posted over at Kitco. It’s from Business Intelligence in the Middle East. The article is entitled “Falling gold mine production will support prices”. It’s sort of a re-hash of what you may have already read…but on a slow news day…it’s the best I could do. The link is here.

There’s not a lot of ‘other news’ either. I have three stories today which may, or may not, be of interest to you. The first one is from Bloomberg. It appears that the FASB [Financial Accounting Standards Board] is about to approve a rule that will add hundreds of billions of dollars worth of ‘assets’ and liabilities which banks and other companies have been hiding off their balance sheets. The rule won’t take effect until next year…but if/when it does, we’ll find out in a real hurry where all the bodies are buried. It will be ugly. The headline reads “FASB to Act on Off-Balance-Sheet Rule Change by June, Herz Says”. I thank Casey Research’s John Grandits for sending it along…and the link is here.

The next story is from creditwritedowns.com and bears the heading “CDS contracts and the implosion of several Eastern European economies”. It’s very well written and not hard to follow. There is also a link at the end of that piece entitled “Insight: Kazakh banks fall foul of CDS” by Gillian Tett from the Financial Times that’s an absolute must read as well. If you get the idea that things are imploding over there…you would be right about that. I thank Craig McCarty for ‘two-stories-for-the-price-of-one’ story…and the link is here.

And lastly in a story at marketwatch.com, comes this news item filed from Tokyo. The headline pretty much says it all. It reads “China gold buy raises eyebrows for all the right reasons”. The link is here.

The new systemic risk to the system is the U.S. Congress. — James Robinson III, ex-CEO of American Express (NYSE:AXP)

Here’s another ‘blast from the past’…this time from 1978. A timeless classic from a great artist. Please turn up your speakers and then click here.

Another week come and gone. Everything out there is right out of Alice in Wonderland. It doesn’t make any difference whether you take the red pill or the blue pill…and as the quote goes in Hotel California…”you can check out any time you want, but you can never leave.” If that’s the way you’re feeling about things right now…I can certainly empathize and sympathize.

As I mentioned yesterday, I’m off until May 14th, and I’ll see you then.

All of us at Casey’s Daily Resource Plus hope you enjoy the rest of your weekend, and we [except for me!] will be here bright and early Tuesday morning.

Source: And Then There’s This…Monday, May 04th, 2009

Silver did better. It traded a few cents on either side of unchanged throughout the Far East and early London trading. That came to an end as soon as the London silver fix was in…noon in London…and 7:00 a.m. in New York. From there a rally commenced which really didn’t have much enthusiasm behind it…and it flat-lined from the end of Comex trading until electronic trading in New York was through for that day at 5:15 p.m Eastern.

Tuesday was the last day for trading the April contract in both gold and silver. There was lots of furious action in both metals. Tuesday was also the day of the big smack-down in gold and silver…plus lots of switching from the May contract to future months to avoid standing for delivery on first notice day…which is today. In gold, open interest fell 3,442 contracts on pretty big volume…90,744 contracts. In silver, o.i. fell a big chunk as well…4,034 contracts on huge volume…48,280 contracts. It’s impossible to read anything into these numbers…but if the bullion banks et al report all this activity in a timely manner, it should be in tomorrow’s COT…as Tuesday was the cut-off for that report.

In Wednesday’s Comex Delivery Report [yesterday was the last day for delivery into the April contract] there were 899 gold contracts delivered. The biggest issuers were JPMorgan [440 contracts], Merrill Lynch [319 contracts] and Bank of America (NYSE:BAC) [134 contracts]. The big acceptors [stoppers] were Bank of Nova Scotia (NYSE:BNS) [631] and JPMorgan (NYSE:JPM) [212]. There was nothing in silver. Total gold delivered in April…14,946 contracts, and since each contract is 100 ounces, that means that 1.49 million ounces were delivered. In silver, 367 contracts were delivered in April, representing 1,835,000 ounces. May is a big delivery month for silver but not for gold…and we’ll find out today just how many silver contracts are awaiting delivery…and delivery starts on May 1st.

The usual New York commentator has a few paragraphs worth reading…”Mitsui, in its monthly Refining Monitor for March just published, reports that the traditional main physical buyers moved back to the buy side during the mid-March weakness…and subsequently. But it also says that the amount of scrap ‘swimming around’ in the first quarter was probably in the order of 1,000 tonnes – 1.5 times the GFMS primary (mine) supply number and twice what the ETFs were supposed to have added. This was double what GFMS estimated for scrap in yesterday’s Bloomberg story.”

“This, of course, stemmed from the extreme financial anxiety prevalent then, and particularly the currency weakness [that] countries like India experienced. Another advance on a $1,000…without those extreme conditions…would presumably not have to overcome this extraordinary avalanche of scrap again.

“The Reuters report in mid afternoon…that [House Financial Services Committee Chairman] Barney Frank will support the proposed IMF 400 tonne gold sale on condition it goes to enrich the elites of the basket case countries…might have had more effect if Bloomberg had picked it up.”

There wasn’t a lot of real hard news yesterday. The biggest story was the huge [annualized] 6.1% drop in U.S. GDP. Normally a story like that would have left a great smoking crater where the Dow Jones Industrial Average used to be…but in this new Orwellian world we live in, that’s no longer allowed to happen. I see in a story at marketwatch.com that “Talks between the Treasury Department and lenders aimed at keeping Chrysler LLC out of bankruptcy broke down late Wednesday, making it all but certain the car maker will file for Chapter 11 protection Thursday.” All this wonderful news [and much more!] should be good for another 200-point rally today. All the PPT has to do is spin those SPMs…and away we go to the up-side!

The first story is from Austria, and is another derivatives nightmare. The average civil servant doesn’t have much more than a room-temperature I.Q… and this is what happens when the wolves are let loose amongst these lambs. “Weapons of financial mass destruction.” is what Warren Buffet called them. The Bloomberg story is entitled “Derivatives Hit Austrian Railroad With Record Loss”. I thank Craig McCarty for the story…and the link is here.

Today’s second story is an indication of just how the revolving door works between the U.S. government and the financial industry…in this case Goldman Sachs (NYSE:GS). Nobody in government is looking after the best interests of the average citizen anymore. I thought I was pretty jaded about this sort of thing…but this reeks. The story is entitled “Goldman Sachs Hires Former Frank Aide to Run Washington Office” and the link is here.

The last story today is from the Financial Times in London. It’s by one of their regular columnists, Martin Wolf. Wolf spends all of his time explaining how the financial system can be saved…but never admits that the printing presses [or their electronic equivalent] would have to run 24/7. In the end, Wolf opines…”The overhang of debt makes deleveraging inevitable. But it has hardly begun. Those who hope for a swift return to what they thought normal two years ago are deluded.” [That they are! Call me in 15 years and we'll see how this is all working out. - Ed] I thank Craig McCarty for the story and the link is here.

If you spent $1 million a day since the day Jesus Christ was born, you still wouldn’t have spent a trillion dollars. – Senator Mitch McConnell

So where to from here for gold and silver? The set-up in silver hasn’t been this good since it was priced around $8.70 back in October. Gold is still the question mark. The 200-day moving average was never broken to the down-side since gold got killed on its last attempt to break through, and stay above, the $1,000 mark on February 22nd. True, the ’sell in May and go away’ scenario is almost upon us…but will it apply this year? Don’t know, but I haven’t taken my money off the table…especially in silver. I’ve got the time, so I’m just going to wait these bastards out.

I hope your Thursday goes well [or went well, if you're on the other side of our planet]…and I’ll see you on Friday morning.

Source: And Then There’s This…Thursday, April 30th, 2009

Anyway, after the Sydney pounding [courtesy of the U.S. bullion banks out of N.Y. one would think], gold didn’t stray far away from $897…and was within a whisker of that price when trading began on the NYMEX/COMEX at around 8:20 a.m. in New York. Then it was lights out. A vertical decline like that can only occur if there is huge selling volume into a no-bid market…i.e. the traders for the bullion banks stand there with folded arms while the other traders try to sell. No bid…down goes the price until the bullion bank traders unfold their arms and start buying at the price they’ve been told to buy at. It’s as simple as that. It works the other way as well. A vertical price spike [and we have seen a few of those recently] means there are lots of bids…but few [or nobody] on the ‘ask’ side. But I digress…

Silver’s activity followed pretty much in lock step with gold…although the price moves weren’t as violent…and silver was helped to the down-side during London trading…a couple of hours before the boyz in New York went to work on the price.

Anyway, when you blow away all the smoke, between the Sunday night price peaks in Sydney and Hong Kong…and the lows shortly after the Comex opened in New York Tuesday morning…gold was smacked for $35, and silver for 90 cents. Most of the damage was done in three or four strategically placed hits to the market that just set the tone and the momentum. This is not normal trading at all…and it certainly isn’t a free market, as no profit-maximizing sellers ever sell like this…ever! I’ve been using that expression a lot lately. I hope you’re getting the message.

Here’s the gold chart for the period specified above. You can see every place that the New York [not for profit] bullion banks showed up.

click to enlarge

Needless to say, Ted Butler and I had our usual chats yesterday. He said that the volume in silver on Tuesday was super-low…like the lowest ever [net of spreads]. He felt that the senseless attack on gold and silver [especially silver] was not directly Comex-related…but could have been the bullion banks going after the silver longs held by the hedge funds that trade in the OTC market. Options expiry in the OTC market was Tuesday…not Monday.

The usual N.Y. commentator had the following to say yesterday…”Today’s European Central Bank weekly statement of condition indicates a drop of €823 million in “gold and gold receivables” which “reflected the sale of gold by two Eurosystem central banks”. This is 37.1 tonnes. Of this, 35.5 tonnes must be the sale by the ECB itself, revealed at the end of March. A 1.6 tonne sale by one of the captive CBs is a bit higher than the recent pace – last week’s reported sale was only €6.0 million…or 0.27 tonnes. Far below the notional 9.6 tonne average implied by WAG2.

“Why the ECB chooses to wreck the veracity of its weekly statements of condition (initially so impressive) remains a puzzle. An ECB Council member told Reuters today that Bank plans to ‘renew its commitment to the Central Bank Gold Agreement (CBGA)’ which expires in September and is running late for renewal. That goes some, but not all the way, to meaning that there will be a new one.”

Open interest changes for Monday [Comex options expiry in gold and silver] were as follows. Gold o.i. fell a smallish 157 contracts to 346,479 contracts…and silver o.i. fell a more substantial 899 contracts to 94,721. These numbers will be in Friday’s COT. Tuesday’s open interest numbers will be interesting when they become available later this morning.

The Comex Delivery Report showed that 752 gold contracts [75,200 ounces] were delivered yesterday. The big delivery was by Goldman Sachs (NYSE:GS) [710 contracts]…and the big receivers/stoppers were Bank of Nova Scotia (NYSE:BNS) [413], JPMorgan (NYSE:JPM) [161] and Bank of America (NYSE:BAC)[134]. Today is the last delivery day for April and it will be a pretty busy one…as yesterday was the last day of trading in the April contract…and it was interesting, as another 1,179 contracts were purchased for delivery in April. As I said, today is the last day for delivery into the April contract…so the Comex Delivery Report should show as many as 1,752 gold contracts delivered when it’s released this morning.

Over at the Comex-approved warehouses, silver stocks rose a smallish 203,678 ounces. There were no other changes anywhere…the U.S. Mint…the ETFs…nothing.

The only gold/silver story worth noting was the Bloomberg piece filed over at Kitco…where GFMS Ltd. was waxing philosophical on the first quarter gold scrap situation. This is sort of old news, but now they have some real numbers to go with it. The piece is entitled “Gold Scrapping May Have Reached 500 Tons, GFMS Says”. This short story is worth running through…and the link is here.

I’ve got another whack of stories again today. The first is an AP story from this past weekend that was posted at breitbart.com and is entitled “Italy’s Mafia thrives in global financial meltdown”. I thank P.S. for sending this story along…and the link is here.

In a story that appeared in The Wall Street Journal yesterday is this missive entitled “Car Dealers’ Next Headache: Inventory Loans”…”The two auto makers have about 10,000 dealers in the U.S., with the bulk of them carrying considerable debt, mainly from the money they borrow to buy cars that sit on their lots. If Chrysler or GM were to file for bankruptcy protection, the banks extending that credit could immediately begin calling dealer loans, demanding a good portion of the money back and refusing to extend any more inventory financing.” It sure sounds ugly to me. I thank Craig McCarty for the story and the link is here.

A story posted in the New York Times bears the following headline…”Italy Seizes Millions in Assets From Four Banks”. With municipal bond investigations spreading to Europe from the United States, Italian authorities have seized abut $300 million in assets of four global banks…JPMorgan Chase, Deutsche Bank (NYSE:DB), UBS and Defa. This is another multi-billion dollar story in the making. I once again thank Craig McCarty…and the link is here.

The next story is by John Crudele from the New York Post. John smells the body odour of Goldman Sachs all over this stock market…and at the same time wonders what the President’s Working Group [PPT] is up to. The article is entitled “Questions About Goldman Sachs’ Role in Market” and the link is here.

And lastly comes this story…once again from The Wall Street Journal. It asks lots more embarrassing questions about the Bank of America and the Merrill Lynch deal. And rightly so! The title of this article is “Busting Bank of America: A case study in how to spread systemic financial risk” and the link is here.

I look at the stock, bond and currency markets and just give my head a shake. It’s amazing what blind faith, B.S. and the Plunge Protection Team can do. As I’ve said before, the world’s economy, financial and monetary system is done for. The bullion banks in turn are trying to shake the gold and silver trees for the last available long contract they can get, because I doubt very much that they will be around to short the next rally in either gold or silver…at least not at these price levels. That’s what the last several days’ shenanigans have been all about. For gold and silver, today is the last delivery day in the April contract and tomorrow is first notice day for the May contract. Then all bets will be off.

See you on Thursday morning.

Source: And Then There’s This…Wednesday, April 29th, 2009

The U.S. bullion banks [the only ones allowed to trade at that time of day] were either going long or covering shorts. This rally continued through the Sydney open in gold…and into the beginning of trading in Hong Kong for silver. At those two points, a not-for-profit seller showed up…or the buying/short covering stopped. Those were the highs of the day in both metals. It’s quite unusual for the not-for-profit sellers/price cappers to hit the metals at two widely separated times like this. Almost without exception, they hit both metals at precisely the same time. I should quickly point out that trading volume in New York on Sunday night…and in Sydney and the Far East early Monday morning….was basically air in both metals. Probably no more than a few hundred contracts in silver and not a lot more than that in gold.

Anyway, the balance of Monday’s trading through the rest of the Far East, London and New York, was down. Both gold and silver closed Monday’s electronic trading session virtually on their lows of the day. There was light volume in both metals yesterday…even when you add in London and New York.

Before continuing further, I must admit to an error in my commentary virtually every day last week. Friday, as it turned out, was not options expiry in gold and silver…it was yesterday…Monday. I was reading the CFTC’s 2008 chart. I won’t make that mistake again. My apologies to you.

Open interest for Friday’s trading showed the following changes. In gold, o.i. rose 2,010 contracts to 346,636. And silver o.i went the other direction…down 1,467 contracts to 95,610. As I’ve been pointing out for the last week, it’s very difficult to read anything into these numbers because of the switching that traders are doing right now. Those that hold contracts for May [both in silver and gold] are switching them into future months [or closing them out] to avoid having to take delivery when first day notice arrives on Thursday. Today [Tuesday] is the last day that the April contract in gold and silver can be traded on the Comex. Tomorrow [Wednesday] is the last delivery day for the April contract. And, as I mentioned a couple of lines back, first day notice for delivery into the May contract is Thursday, April 30th…the last day of the month. If they haven’t switched their contracts by then…they have to stand for delivery…which requires them to come up with a lot of money.

While I’m discussing Comex deliveries, there were 460 gold contracts delivered on Monday. The big deliveries [issuers] were Bank of America (NYSE:BAC) [again!] with 311 contracts and Goldman Sachs (NYSE:GS) with 95 contracts delivered. The big stopper [receiver] was the Bank of Nova Scotia (NYSE:BNS) [321 contracts]…with a raft of smaller stoppers picking up the rest. So, with those 460 contracts delivered on Monday, there are 523 gold contracts left to deliver in the next two trading days…plus whatever contracts are purchased today…the last trading day in the April contract [which I mentioned in the previous paragraph].

In other gold and silver news, I note that silver inventories over at the Comex-approved warehouses on Monday, declined by 573,422 ounces. Over in Europe at the Zürcher Kantonalbank in Switzerland, their gold ETF was up a smallish 9,996 ounces last week…and their silver ETF was up a respectable 298,534 ounces. I thank Carl Loeb for those updates. This week, the U.S. Mint decided to update their eagles early…and they are very nice numbers. The 1-ounce gold eagles showed an increase of 27,000 last week…now up to 147,000 for the month, while the 1-ounce silver eagle mintings were up 611,500 for the week that was…for a monthly total of 2,479,500. There are still four more production days in April. The U.S. Mint may [or may not] update them one more time this month…or, as they frequently do, they’ll just include the rest of this month’s production in next month’s. There were no changes in either GLD or SLV yesterday.

Because of the weekend, there were a lot of stories that are worth your time. I’ve narrowed it down a bit…with the hope that there is no news today that is worth mentioning…so I can run the balance of these weekend stories tomorrow.

The first is from Ambrose Evans-Pritchard at The Telegraph in London. As Ambrose says…”The world is running out of capital. We cannot take it for granted that the global bond markets will prove deep enough to fund the $6 trillion or so needed for the Obama fiscal package, US-European bank bail-outs, and ballooning deficits almost everywhere.” The story is entitled “The capital well is running dry and some economies will wither.” and the link is here.

Today’s second offering comes from James Turk over at goldmoney.com. James has analyzed the gold price chart and finds a reverse head and shoulders pattern that he finds very bullish. Turk’s analysis is headlined “Gold’s Strong Technical Position” and you can find it linked here.

The next essay is from Michael Kosares at usagold.com in Denver. The title says it all…”China turns IMF gold sales into a wet noodle”. The story is contained in a GATA dispatch, and the link is here.

The next story is from the hallowed pages of The Wall Street Journal. It’s written by Judy Shelton. Ms. Shelton, an economist, is the author of Money Meltdown: Restoring Order to the Global Currency System. The commentary is entitled “The IMF’s Gold Gambit: The fund’s misuse of bullion reserves is crucial to its plan to use the financial crisis to expand its power”. The link is here.

And lastly…silver market analyst Ted Butler’s new commentary notes the recent scandal involving Bank of America, the U.S. Treasury Department, and Federal Reserve and wonders aloud what many of us may have been thinking. That is, if the U.S. government is intervening surreptitiously in the financial stock market, why is it so wild to suggest that the government is doing the same thing in the precious metals markets? Butler also examines the current structure of the silver futures market and concludes that the chances for a sharp rise are good. Butler’s commentary is headlined “Dangerous Parallels” and you can find the story linked here.

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I note that the S&P futures aren’t looking too good for the Tuesday open right now. Of course they weren’t great on Monday either…and it looked like there were ‘gentle hands’ in the equity markets for a while yesterday…and that dollar rally looked suspicious as well. In early Tuesday morning trading in Sydney, I see that we had a discontinuous event in gold…and nearly the same in silver, as the not-for-profit seller was driving the price down in both metals. Only a handful of contracts were being traded at the time. Let’s see how things look in gold and silver on Friday once first day notice for the May contract is out of the way.

See you on Wednesday.

Source: And Then There’s This…Tuesday, April 28th, 2009

Once London was closed for the weekend…4 p.m. London/11:00 a.m. New York…the gold price rose a bit and nearly finished on its high of the day. It was a hugely bullish performance occurring as it did on Comex option expiry. The Comex floor session close was up $7.50 on an estimated volume of 77,210 contracts…including a switch effect of 4,878.

Silver did practically nothing…and spent most of Friday within a dime of its Thursday close.

But having said that, the shares turned in a one of their best days of the last year or so. Both silver and gold shares sparkled…with the HUI up 6.94%! That’s a lot considering that Friday’s price action was almost not worth mentioning….but we’ll take it anyway.

Open interest numbers on Thursday’s vertical spikes in both silver and gold were quite amazing. O.i. in gold jumped 8,224 contracts to 344,626…which is quite a bit. Silver also went up a respectable 1,334 contracts to 97,077. It’s difficult to tell with all the switching going on, as to who was doing the buying and the selling. Normally the tech funds [in the Non-Commercial category of the COT] would show up as buyers once the 50-day moving averages were broken to the upside. But on Thursday, both 50-day m.a. were still intact…and weren’t even broken on Friday’s trading action.

So…who was going long? Maybe somebody was covering a big short position and hiding behind a curtain of spread trades put on at the same time, in order to hide their tracks. It seems like I’m always waiting for one more Commitment of Traders report to see what the bullion banks have been up to.

Speaking of the COT…the one that Ted and I were waiting for was released yesterday at 3:30 p.m. Eastern time. In a sentence…the silver numbers were spectacular, and the gold numbers were disappointing. In silver, the bullion banks in the Commercial category covered a whopping 3,275 short positions plus they added 412 long positions as well…for a net increase in long position of 3,687 contracts In the Non-Commercial category, the tech funds decreased their net long position by 2,808 contracts. The hundreds [if not thousands] of small traders in the Nonreportable category decreased their collective long positions by 879 contracts as well. The full-colour COT report for silver is linked here.

The tech funds are now at their second-lowest net long silver position in the last 15 months or so. The last time the COT in silver was configured in this way, the silver price was around $8.70 the ounce. Now we’re sitting at $12.90. Is this bullish? You betcha!

Both Ted Butler and myself were disappointed with gold. The bullion banks in the Commercial category increased their net long position by only 3,901 contracts, while the tech funds in the Non-Commercial category decreased their long position to the tune of 1,528 contracts and to balance that out, the small traders in the Nonreportable category decreased their long position by 2,373. The full-colour COT report for gold is linked here.

As I’ve been saying for a month or more…the only fly-in-the-ointment is the huge net gold short position that the major bullion banks still hold. The dichotomy that exists between gold and silver in the COT report is a little unnerving. Is this the best the bullion banks could do in their attempt to clean out all the gold long positions so they, in turn, could cover their shorts? I don’t expect we’ll have to wait too long for an answer on that.

As I mentioned back in the first paragraph, yesterday was options expiry. It’s a rare occurrence when gold and silver prices rise [or are allowed to rise] into this event. I consider it to be bullish. First day notice for delivery into the May silver contract is Thursday, April 30th. One way or another, next week should be interesting.

The Comex Delivery Report for Friday showed that 331 gold contracts were delivered. The big issuer was Bank of America (NYSE:BAC) [314 contracts] and the big stopper was The Bank of Nova Scotia (NYSE:BNS) [199 contracts]…and there were nine other smaller ones. Two contracts were delivered in silver. Even with the 331 contracts delivered yesterday, there still remains about 700 more gold contracts to be delivered before the end of April. Over at the Comex-approved warehouses, a very smallish 12,941 ounces of silver were taken off the exchange.

Of course the really big story in the gold world yesterday was out of China…when “China revealed that it had secretly raised its gold reserves by three-quarters since 2003, increasing its holdings to 1,054 tonnes.” For all of us at GATA, this is old news. Because of a few friends we have in ‘high places’…we have been aware that this had been going on almost from the moment that they bought their first gold bar back in 2003. But it’s always gratifying to be proven correct in the public press. There are many versions of this story floating around the Internet, and I have chosen this one from the Financial Post in Toronto. The headline reads…”China admits to building up stockpile of gold”. I thank Wistar Holt for sending it to me…and the link is here.

The usual New York commentator had the following thoughts on the above…”China’s announcement overnight that it has raised its gold reserves by 75% since 2003 raises a number of points. Firstly of course, it further demonstrates that the central bank’s gold holding statistics are close to worthless. Secondly, from a broad economic perspective, it calls into question Chinese foreign exchange policy. This puts them directly at odds with the Americans, who have clearly been hostile to central bank gold accumulation for more than a generation. Optimists might think the Chinese are planning to forgo the undervaluation privilege which has been central to their U.S. relationship…the rule of Robert Rubin. This could help reflate their economy. More likely, in my view, the risibly cosmetic revaluation charade will be abandoned, triggering competitive devaluations across the Far East.”

Al Korelin of Korelin Economics was kind enough to interview me on Thursday. If you think what I have to say might be of interest, the link to that interview is here.

Besides the gold story above, I have three more items of interest. The first is a story from indiaexpress.com where it appears that there are big problems with the wheat harvest in the Punjab…both in quality and yield. The headline reads “No bumper wheat harvest in Punjab”. I thank Craig McCarty for sending me the story…and the link is here.

The next story is from miningmx.com. It appears that wage negotiations with gold mining companies in South Africa could be a battle this year. The story is entitled “Signs point to tough S.A. gold wage talks”. I thank the ‘Charleston Voice’ for sending me this story…and the link is here.

And lastly comes this story from the May issue of The Atlantic. This has been sitting in my in-box since Monday. It’s a little on the long side for week-day reading…but for the weekend…it’s perfect. According to a former chief economist of the IMF, the crash in the United States has allowed the financial industry to effectively capture the U.S. government. The essay is entitled “The Quiet Coup” and is a ‘must read‘ if there ever was one. I thank P.S. for sending it to me…and the link is here.

Prosperity cannot be restored by raids upon the public Treasury. – Herbert Hoover

Today’s ‘blast from the past’ is a theme from a James Bond movie from ‘way back when’. The song is great…as is the singer. So turn up your speakers and click here.

So…China finally came out of the closet on their gold purchases. They know what real money is…and isn’t. I wonder how many other countries [and their respective central banks] are lying through their teeth and accumulating on the sly? As the N.Y. commentator so succinctly put it…”it further demonstrates that the central banks’ gold holding statistics are close to worthless.” This is just another reason, dear reader, that you should be buying the stuff with both hands yourself.

Enjoy the rest of your weekend, and I’ll see you here on Tuesday.

Source: And Then There’s This…Monday, April 27th, 2009

There was a smallish rally in both metals that started in London about an hour or so before the Comex open. Both ran into the proverbial brick wall at precisely 8:30 a.m. Eastern time. Then both metals were taken down stair-step fashion and they closed below their Monday closing price at the end of Globex trading at 5:15 p.m. in New York. Nothing random about these trading patterns.

And it was most obvious in silver. Starting at 8:30 a.m…there were six mini price declines during New York trading yesterday…five during Comex trading and one in electronic trading after the floor trading was over for the day. As I keep saying…no profit-maximizing seller ever sells like this…ever! Here’s the silver chart. Tuesday’s price action is in red. The gold chart is similar

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Monday’s open interest numbers were a surprise…and, in the grand scheme of things, it’s hard to read anything into them. Friday’s COT will be interesting. Anyway, gold’s big rally on Monday produced a decline of 2,331 contracts in open interest…bringing the total to 336,376 contracts. With silver’s rally, o.i. rose 1,156 contracts to 96,699. Quite a difference. Tuesday’s open interest numbers, when available later this morning, will be interesting as well. Despite the nice move in the gold price on Monday, volume wasn’t overly large…81,417 contracts including switches.

In yesterday’s Comex Delivery Report, there was a fair amount of activity. This is no surprise, because as I said yesterday, they’ve only got a few more days to clear the 1,300+ contracts still awaiting delivery. Well, 453 of them were delivered on Tuesday. The big delivery came from The Bank of Nova Scotia (NYSE:BNS) [411 contracts]…and the biggest stoppers [acceptors] were JPMorgan (NYSE:JPM) [117] and The Bank of Nova Scotia [195]…plus quite a few smaller stoppers as well. There were no deliveries in silver.

Not a lot of other news to report in gold and silver. The GLD and SLV were unchanged…nothing from the U.S. Mint…but there was 459,854 ounces of silver removed from the Comex-approved warehouses yesterday. All of it came from Scotia Mocatta.

There wasn’t a lot of hard news yesterday, but I’ve got three items for you nevertheless. The first is a GATA release prefixed by commentary from secretary treasurer, Chris Powell. It’s entitled “ECB sold gold and bought dollars — but it’s not intervention”. It’s a Reuters story that was posted at Forbes.com. and the link is here.

In a piece in The New York Times on Monday is this story about deflation in the European Union…with an emphasis on Spain. It’s a problem that will become more wide-spread as the economic contraction continues. Spain’s real estate market has crashed and the unemployment rate is running at ‘depression levels’. One can only imagine how bad it will be by the end of 2009…and beyond. I thank Craig McCarty for sending me the story. The article is entitled “Spain’s Falling Prices Fuel Deflation Fears in Europe” and the link is here.

Silver analyst Ted Butler offers another commentary this week. This one is entitled “A Blast From The Past”…and no, it has nothing to do with my musical offerings in my Saturday rant. The link is here.

Gold at its 1981 all-time high of $850.00 is dirt cheap in 2009. The best analogy I can give you is to buy a new 2009 Mercedes Benz at 1981 prices. Do you know of anyone who would turn down an offer like that? I don’t. Gold is the epitome of value and investing in true value is the only way to protect your future. Gold is going to become money and all the Geithners and Bernankes in the world will not be able to stop that train. If you want to store your wealth, you had better buy gold while it’s cheap. – Richard Russell, 19 April 2009

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Yesterday was a yawner in just about every respect. It was just another day off the calendar. I wouldn’t read too much into anything that happened on Tuesday. I do note however, as I fire this off to my editor, that gold and silver are showing the usual signs of life as they head into the London open…which is 3:45 a.m. Eastern time. Options expiry in both gold and silver for the May contract is on Friday the 24th. May is not a big delivery month for gold…but it is for silver. First day notice for the May delivery contract is one week from tomorrow…April 30th. The week ahead could prove interesting.

See you on Thursday.

Source: And Then There’s This…Wednesday, April 22nd, 2009

But the real down-side action was in silver. Once again, there was no price activity worth mentioning until the Comex open…and, like gold, the budding rally got clipped at exactly 8:30a.m….and by the time the smoke had cleared, the silver price had touched $12.60…a 90 cent decline [-6.8%] from its 8:30 a.m. peak of $13.30. Half of that loss occurred in less than 20 minutes…between 10:30 and 10:50 a.m. New York time. Free market forces at work, you ask? Not bloody likely. But when it was all said and done, silver was only down a dime from Monday’s close.

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JPM (NYSE:JPM) and HSBC (NYSE:HBC) were successful in blasting well through both the 50-day and 200-day moving averages in silver…so every leveraged spec Comex long that had been placed since the big take-down to under $12 on March 18th…got blown out of their positions.

In Monday’s rather crazy trading session, gold open interest rose 905 contracts to 372,104…and silver o.i. fell 232 contracts to 92,922. Silver’s open interest numbers for yesterday’s trading should be interesting when they show up on the CME’s website tomorrow. Yesterday was also the cut-off for Friday’s Commitment of Traders report. Hopefully all of Tuesday’s activity will be in it.

The usual N.Y. commentator had the following yesterday…”The European Central Bank’s weekly statement of condition indicates that ‘gold and gold receivables’ fell €82 million last week: 4.15 tonnes at the present book value. This ‘reflected’ the sale of gold by one ‘Eurosystem central bank…and the purchase of gold by another‘. This is the third time in four weeks that this form of language has been used. It is quite distinct from what is said when a coin program is underway: it looks very much as if a CB has broken ranks and is buying for foreign exchange reserve purposes. This could be an important precedent. [Last week, two CBs were reported to have sold 0.65 tonnes in total.]”

In other gold/silver news, I see that there were no gold imports into India in March either. Yesterday was first notice day for delivery into the April gold contract. A total of 8,867 contracts were delivered, with Deutsche Bank (NYSE:DB) delivering 8,500 of them. The big acceptors/stoppers were Bank of Nova Scotia (NYSE:BNS)[2,841] and JPMorgan [3,512]. There were 131 silver contracts delivered. There were no updates at the U.S. Mint…and there was nothing added to either the GLD or the SLV. Comex-approved silver warehouse stocks showed a minor decline.

Four stories today. The first was provided once again by Craig McCarty and was in yesterday’s Financial Times out of London. The headline reads…”OECD predicts 10% jobless rate for 2010″…”One in 10 workers in advanced economies will be without a job next year, ‘practically with no exceptions’, the head of the Organisation for Economic Co-operation and Development said on Monday.” The link is here.

The story is courtesy of the Toronto Globe and Mail. The headline reads…”Chevez promotes ‘petro-currency’ over dollar”…”Venezuelan President Hugo Chavez tried Tuesday to court Arab support for another swipe at America as its economy stumbles: a proposal for a new, oil-backed currency to challenge the global prominence of the dollar.” The link is here.

In a story that showed up on Bloomberg yesterday, the headline read “Calderon Says Mexico Prepared to take IMF Credit Line”…”The peso strengthened on the comments, which eased concern that foreign reserves will dwindle. Activating the credit line makes the funds available and doesn’t imply plans to draw on it immediately, a Mexican government official said.” Once again I thank Craig McCarty for the story…and the link is here.

In his second commentary in as many days, silver market analyst Ted Butler replies to U.S. Commodity Futures Trading Commission member Bart Chilton about whether CFTC reports can be relied upon to demonstrate market manipulation. Butler argues that Chilton simply defaults when he suggests that overwhelmingly concentrated short positions on the Comex may be hedged by long positions in private markets elsewhere. For it is the Comex that sets the price, Butler writes, excessive concentration there is just that, that’s the only market the CFTC can regulate directly, and so it should do its duty. Butler’s commentary is headlined “All Talk, No Action”…and you can find it linked here.

American industry has reached a point where a break in New York stock prices does not necessarily mean a national depression. – Associated Press…December 28, 1929

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I’ve noticed in several news stories that a lot of people think the G-20 meeting in London will be a bust or a waste of time…or both. I heartily agree. The problems the world faces now are totally impossible to solve. They can’t print enough or spend enough…and if they do, we’ll have hyperinflation in spades. It’s my bet [as I've said before] that somewhere in the future…and maybe the not-to-distant future…the world’s economic, financial and monetary system will collapse in a smouldering ruin. I haven’t changed my mind on that one bit.

See you on Thursday.

Source: And Then There’s This…Thursday, Wednesday, April 1st, 2009

The usual N.Y. commentator had this to say about yesterday’s activities…”Wednesday’s dramatic Comex session was notable for huge volume–particularly before the Geithner “Open Mouth/Insert Foot” incident. By 10 a.m., 117,039 lots were estimated to have traded, with gold being successfully contained. A spike after the Geithner report carried April gold to up $18.20 on the day…although this was partially eroded on very heavy volume…the contract managed to close up $12 on the day. Estimated volume was 216,770 with a switch effect of 29,736 contracts. There seem to be very powerful forces active in gold at present.”

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Silver, as usual, followed a similar path, but had an equally impressive down-spike in price just before, and during, the New York open. This had all the tell-tale signs of bullion banks pulling their bids. The price spike at the London p.m. gold fix was even more impressive to the upside. All in all, it was a wild and woolly Comex session for silver.

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Through all of that, one has to be singularly impressed with the way that the precious metals shares acted again yesterday…especially the strength into the N.Y. close. It certainly does appear that “powerful forces” are active in the gold market right now…and with options expiry today, it could be another interesting frolic in the Comex gold pits. We’ll find out soon enough.

Tuesday’s changes in open interest were as follows. Gold o.i. fell 4,703 contracts…which more than negates the surprise increase of approximately the same amount on Monday. Hopefully all of this will be in the COT tomorrow afternoon when it becomes available at 3:30 Eastern time. In silver, o.i. rose 541 contracts…which is a bit of a surprise considering the price action. These changes should be in the COT as well.

In other gold news, the March gold activity I spoke of on Tuesday came to fruition yesterday morning. There were 1,154 contracts delivered. The big issuer was Goldman Sachs (NYSE:GS) [1,084 contracts] and the big stopper was the Bank of Nova Scotia (NYSE:BNS) [1,151 contracts]. So far in March, 414,100 ounces of gold have been delivered…which is noteworthy in the fact that March is a non-delivery month for gold. In silver, only 19 contracts were delivered….with about 300 March silver contracts still to go. There were no changes in either gold or silver eagles at the U.S. Mint yesterday…and no changes in GLD or SLV either. The Comex-approved silver warehouses added a respectable 1.26 million ounces. Could that addition have been moved in to partly cover the delivery of those 300 March contracts previously mentioned? Just asking.

In other news, I see in an AP story that the Postmaster General told Congress yesterday that the post office will run out of money this year unless it gets help. “We are facing losses of historic proportions. Our situation is critical.” In a Reuters story, the headline read “IBM to cut 5,000 jobs in U.S.” In a Bloomberg story, “California home prices dropped 41% last month from a year earlier, more than double the U.S. decline, as surging foreclosures drove down values, the state Association of Realtors said today.” And lastly, in a UPI story…apparently the demand for milk “really dropped off the cliff in the last quarter of 2008.” Most producers only get $11.50 per 100 lbs of milk…50% less than a year ago…and the National Milk Producers Federation has warned that “farm bankruptcies are looming” because a lot of producers can’t come close to covering their costs.

A lot of stories today…most of them from Europe. The first one is from The Telegraph in London. The headline reads “City alarm as Treasury fails to sell Government gilts”…The British government admitted yesterday that, for the firs time since 1995, investors were unwilling to buy all the bonds that were on offer. As the shadow Chancellor said: “It is too early to say, but the risk is that at some point the Government will not be able to fund its huge debts.” [Note to Geithner: Timmy, how soon will it be before this happens at a U.S. Treasury auction? - Ed] This is a ‘must read’ story and the link is here.

The next story is also from The Telegraph and is headlined “Czech Republic joins east Europe’s falling dominoes”. “The Czech government lost a vote of no confidence on Tuesday night in a drama that risks setting off a fresh round of investor flight from the region.” This is another ‘must read’ article and the link is here.

Here’s the third ‘must read’ article in a row. This one is from the Financial Times in London. “Barely a week before Barack Obama is due to arrive in Europe on his first official visit as US president, Mirek Topolanek, the Czech Republic’s prime minister, put the 27-nation EU on a collision course with Washington.” The headline reads “EU leader condemns US ‘road to hell’.” I thank P.S. for this story…and the link is here.

And lastly, is this letter of resignation from the Jake DeSantis, Executive Vice President, A.I.G. Financial Products to Edward Liddy, Chairman and CEO of A.I.G. The letter showed up in the pages of the New York Times with a headline that reads…”Dear A.I.G., I Quit!” This is a very interesting and educational letter from inside the company and is certainly worth the read. I thank Casey Research’s own John Grandits for the story…and the link is here.

Against stupidity, the gods themselves are powerless. – Friedrich Schiller, 1801

Anyone care to ponder on why the durable goods order number was so great…or how the Dow managed another positive close when it was obviously heading for the nether reaches of the earth…despite the ‘wonderful’ durable goods number? The comments over at the King Report this morning about the DGO report were not flattering…and nobody believes them. John Williams over at shadowstats.com knows they’re lying. Bill King thinks that the PPT showed up at 3:00 p.m. yesterday. So do I. We are dangerously close to a world-wide collapse in everything. It’s just a matter of how soon and how fast.

See you on Friday.

Source: And Then There’s This…Thursday, March 26th, 2009