And I thought it was only the yarn I get in Israel!!! So, I never bothered to mentioned it!
Oh! I'm so relieved!
Anyway, the way I handle it is if I'm knitting a scarf which has to look smooth on both sides I tighten the knot as much as possible to make it as small as possible before knitting with it. Then I cut the ends of the knot as close as possible to it and carry on knitting normanlly. It hardly shows.
If I'm knitting a bag or something with a reverse side I leave the ends of the knot slightly longer, knit the stitch with the knot a bit looser and when I've knitted a couple of rows or so (sometimes I wait to finish the whole project) I tuck and pull the knots through to the other side.
I used to get very frustrated with this problem but I learnt to deal with it and I just accept it now. I'll be thinking of you and smilling on my next knot.