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Gold Enters Major Bull Market

       

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 By bluejay

10/06/2008  2:51PM

Gold $855.20
Silver $10.94
Gold/XAU Ratio 8.12
Gold/Silver Ratio 78.77

The Plunge Protection Team(PPT), the Treasury's market manipulative arm was feverishly working today to contain mounting losses from the skidding values of the Dow Jones Averages. The DOW closed off on the day 369.88 points. During the session the averages were approaching being off 800 points. The PPT couldn't buy enough of the Index futures while supply was heavy.

In the meantime gold was pushing higher, eventually hitting near $876 with a last of $861.50, up from the previous close of $834.80. After the NYSE close gold slipped back to 655 but is currently trading higher.

The most remarkable event over the past week is the total disconnect between the gold stocks and the price of the metal. At one point today, the Gold/XAU ratio was at 8.38. The time tested axiom was to buy the gold stocks when they hit 6 on the Index and sell them when it hit 3. Times, they are a changing.

In order to understand this great hostorical discrepancy one has to consider how desperate the "powers to be" are at saving the system. Why did gold and silver tank in early August ahead of all the bad news? The main reason was a plan to contain gold under $1000 when it was to be later revealed by the Fed and Treasury that our financial system was coming apart at the seams and needed a quick bailout. It appears their plan, so far, has worked.

The reason the gold stocks came under such severe selling pressure was to confirm in the market place that gold was not a good alternative form of investment as a safe haven. This was easy to accomplish by the Treasury and their cohorts. They just entered sell orders through their two pet brokerage firms, or investment companies, to overwhelm buyers with a barage of unlimited sell orders. All this was accomplished through the illegal trading vehicle known as naked short selling, no certificate required for shorting.

It isn't odd that the SEC restricted "all forms" of short selling in the falling financial stocks as the bankers control the system. Why wasn't naked short selling prohibited in the gold shares? The bankers hate gold because when we were on a gold standard their lending practices were held in check.
Under that system, if the bankers wanted to grant more loans then they had to add gold to their reserves.

Your good old corner bankers have ruined the banking system and it is now based on lies and fraudulent accounting standards. Is there any wonder that manipulative steps of the PPT now have to be instituted in order to make bank depositors think twice about cashing out?

It appears that there is one thing the PPT can't control(are they plugging up supply channels someway?) and that is the public quest for the physical metals of gold and silver in bullion form. Coin stores are basically sold out of the product. The following is the latest rundown from golddealer.com concerning their bullion products:

THE MOST POPULAR GOLD BULLION
Gem Uncirculated-$2000 Order Free Shipping
Our Buy Price
Our Sell Price

Eagle US Gold Bullion (1 Oz)
$903.00
$933.00

Buffalo US Gold Bullion (1 Oz)
$903.00
Out of Stock

US Gold Bullion Eagle (1/2 Oz)
$464.00
$479.00

US Gold Bullion Eagle (1/4 Oz)
$230.00
$242.00

US Gold Bullion Eagle (1/10 Oz)
$93.00
Out of Stock



US Buffalo Proof 1 Oz Gold-Box & Certificate
$920.00
$1070.00

US Eagle Proof 1 Oz Gold-Box & Certificate
$1000.00
Out of Stock



Austrian Philharmonic Gold Bullion (1 Oz)
$893.00
Out of Stock

Australian Kangaroo Gold Bullion (1 Oz)
$893.00
Out Of Stock

South African Gold Bullion Krugerrand (1 Oz)
$893.00
Out Of Stock



1 Oz Gold Bullion Bar - Pamp Suisse With Cert
$893.00
Out of Stock

100 Gram Gold Bar-Pamp Suisse (3.21 Ozs)
$2825.00
$2900.00

10 Oz Gold Bar - Pamp Suisse With Cert
$8700.00
Out Of Stock

Kilo Gold Bullion Bar-Pamp Suisse/Cert (32.15 Oz)
$27500.00
Out Of Stock



Austrian/Hungarian 100 Corona (0.98 Gold Oz)
$840.00
Out of Stock



Chinese Panda (1 Gold Oz)
$882.00
Out of Stock



Special Australian Lunar Dragon
$1500.00
$1800.00

Australian Lunar Gold Set 1996-2007 Complete 12 coins
$11900.00
Out Of Stock



Mexican Gold 50 Peso (1.2 Gold Oz)
$1040.00
Out Of Stock



US $20 Liberty Gold - XF to AU - Dealer's Choice
$1080.00
Out Of Stock



British Sovereign Circulated (.235 Gold Oz)
$207.00
Out Of Stock



Swiss 20 Franc Brilliant Unc. (Pre-1933 .186 Oz)
$172.00
Out Of Stock

French 20 Franc Brilliant Unc. (Pre-1933 .186 Oz)
$172.00
Out Of Stock


Please note these prices subject to after market changes because of market volatility.

THE MOST POPULAR SILVER BULLION
Premium Quality-$2000 Order Free Shipping
Our Buy Price
Our Sell Price

$1000 Face 90% Ave Circ Silver Coin Pre-65 (715 Oz)
$9300.00
Out Of Stock

$1000 Face 40% Ave Circ Silver Halves (295 Oz)
$3550.00
$3900.00

Comex Bars 1000oz .999 fine
At Spot
+80¢

100 Oz Johnson Matthey/Engelhard Bars (.999 Fine)
$1273.00
Out Of Stock

1 Oz Generic Silver Rounds (.999 Fine)
Spot+$1.00/oz.
Out Of Stock

10 Oz Generic Silver Bars (.999 Fine)
Spot+$1.00/oz.
Out Of Stock

US Silver Eagles 1 Oz 2008 Box of 500
$7365.00
$8115.00

Canadian Silver Maple Leaf 1 Oz 2008 Box (500)
$6615.00
Out Of Stock

Backdate US Silver Eagles Lots of 100
+ $3.00
Out Of Stock

2008 Austrian Philharmonic Silver 2008 Box (500)
$6615.00
Out Of Stock

PCGS MS65 Peace Dollars – Box of 20
$3000.00
$3500.00
 By bluejay

10/03/2008  4:14PM

The article is out of sequence and belongs below the opening statments of the entry below.


The Gold Standard Strikes Back...

By Antal Fekete
Oct 2 2008 4:40PM

www.professorfekete.com



…WITH A 36-YEAR LAG

(Part 2 of 2)

The way to resolve the credit crisis: Recapitalize the banks with gold

Privatizing profits, socializing losses

The 0.7 trillion dollar bailout plan of Treasury Secretary Paulson must be seen for what it is: a scheme to privatize profits while socializing losses. The scare tactics with which he was trying to railroad it through Congress has failed and the world is better for it. The malady has to be diagnosed properly. I summarize the popular diagnosis in five points.

The bursting of the housing bubble has led to a surge of defaults and foreclosures which has, in turn, led to a plunge in the value of mortgage-backed securities ? assets which are in effect capitalized mortgage payments.


These losses have left many banks short on capital account. Their problems were compounded by the fact that as their capital ratios were shrinking, rather than reducing their debt exposure they aggressively increased it.


“Leveraging” is the word to describe the deliberate shrinking of capital ratios, i.e., making smaller capital support a larger amount of risks. Aggressive leveraging was characteristic of the pre-crisis boom.


When they recovered after the dizzying ride, banks needed a microscope to read their capital ratios and they reacted in a predictable way. They were unwilling (unable?) to fulfill their mission to provide the credit that the national economy needs for its day-to-day operation.


As a defensive measure financial institutions have been belatedly trying to pay down their debt by selling assets, including mortgage-backed securities, but as they were doing it simultaneously, they drove down asset prices. This has damaged their balance sheets even more. A vicious circle is engaged that some call the “paradox of de-leveraging.”
Capital destruction

I should hasten to say that I disagree with this popular diagnosis which puts the cart before the horse. My diagnosis, described in the first part of this article, identifies the destruction of capital as the cause, and the credit crisis as the effect.

The problem goes back to the U.S. government foolish decision to destabilize the interest-rate structure (and, hence, bond prices) in 1971. As a consequence, long-term interest rates shot up to 16 percent per annum by the early 1980’s, from where they started their long descent that still continues.

Falling interest rates destroy capital as they raise the liquidation-value of debt contracted earlier at higher rates. By ‘liquidation value’ is meant the sum that will liquidate the debt, should it be necessary to pay it off before maturity. In a falling interest-rate environment it will take a larger sum to retire the same debt. Why? Because the scheduled stream of interest payments is now capitalized at a lower rate of interest and, therefore, it falls short in liquidating the debt.

This means that, paradoxically, falling interest rates do not alleviate but aggravate the burden of debt. All observers miss this point as they blithely assume that debt is automatically refinanced at the lower rate. It is not. Falling interest rates create a deficiency on capital account since it takes a bigger bite to service existing debt than originally provided for, and the deficit is made up at the expense of capital. Over-leveraging is not the cause; it is the effect. What it shows is that the banks do not pay heed; they persist in error. They simply ignore shrinking capital ratios. This ultimately causes wholesale bankruptcies, leading to the vicious downwards spiral.

The banks should have made provision to compensate for eroding capital as interest rates were falling. None of them did. None of them understood the insidious process of capital erosion in the wake of declining interest rates. They reported losses as profits. Then they were hit by the negative feedback: capital eroded further. When the truth dawned upon them, it was already too late.

Interest rates have been falling for the past 28 years. The liquidation value of outstanding debt has been increasing by leaps and bounds. It reached the tipping point in February, 2007 as indicated by the unprecedented jump in the price of credit-default swaps. It revealed that any further decline in the rate of interest would plunge bank capital into negative territory. At this point capital dissipation stops: there is nothing more left to dissipate. For the banks, this is sudden death.

No commentator could explain why banks have all run out of capital at the same time, while making obscene profits. My explanation is simple. There have been no profits, obscene or otherwise. The banks were paying out phantom profits in the belief that their capital accounts were in good shape. They weren’t. The banks were unaware that the falling interest rate structure has been making inroads on their capital. Since all banks have been working with microscopic capital ratios as a result of 28 years of capital erosion, the failure of one single bank would trigger the ‘domino-effect’ on the rest.

Why gold?

This puts the role of gold into high relief. Had gold been retained as a component of bank capital, credit-default swaps would have never been invented. Gold is unique among financial assets in that it has no corresponding liability in the balance sheet of others. Gold is the only financial asset that will survive any consolidation of bank balance sheets,in contrast with paper assets that are subject to annihilation (e.g., when the bank is consolidated with its counterparty holding the liability side of that asset). Suppose we consolidate the balance sheets of the global banking system. Then all assets will be wiped out with the sole exception of gold. But since the global banking system as it is presently constituted has no gold assets, under any consolidation the banks will be denuded of assets while note and deposit liabilities to the public remain. This is why the regime of irredeemable currency is susceptible to collapse that could be violent, taking place with lightening speed. It can also be seen that trying to save banks from collapsing through consolidation, mergers, takeovers, and shotgun marriages is pouring oil on the fire: it accelerates the meltdown of bank capital, rather than retarding it.

Implosion of the derivatives monster

My thesis also explains the explosive growth of the derivatives markets. First round insurance against decline in the value of bonds in the banks’ portfolio can be had by selling bond futures. Those writing first-round insurance need to cover their assumed risk in the form of second-round insurance, they do so by selling call or buying put options on bond futures. But those writing second-round insurance also need to cover their risk: they do it in the derivatives market by purchasing credit-default swaps. The point is that an infinite chain of credit-default swaps is being built on every bond in the banks’ portfolio, as shown by the derivatives monster’s more than doubling in size every other year, already having reached the size of one half quadrillion dollars and still counting.

Why is the derivative monster so dangerous? Because it is subject to implosion that could destroy an inordinate amount of bank assets. If the derivatives tower is consolidated, then its value collapses to zero as claims are wiped out by counter-claims. It is possible that this implosion has already started, but the banks (and their supervisory agencies) keep the lid on this information to avoid a world-wide panic. The earth quakes badly under the foundations of the Derivatives Tower of Babel. Its toppling may be imminent. If gold had been retained as a component of the bank capital structure, then there would have been no derivatives monster to fret about.

Those who explain the proliferation of derivatives by the popularity of “dry swaps”, that is to say, swaps created for the sole purpose of speculative profits they promise in view of their ultra-low price-to-reward ratio, are wrong. All those credit-default swaps were purchased by actual insurers insuring actual risks going with bond ownership, in trying to hedge their own risks.

Recapitalizing banks with gold

The credit crisis could be solved through the recapitalization of banks with gold. The Treasury should pledge to match subscriptions of new private capital, in gold, at the ratio of two to one. This means that two gold shares of capital stock subscribed by the private sector (individuals, firms, and institutions) shall invite one share of capital stock subscribed by the Treasury. Gold subscribed by the private sector should be constitutionally guaranteed against capital levy and confiscation.

There is no better use to which Treasury gold can be put which has been foolishly idled for the past 36 years. What is needed is the mobilization of gold hoarded by the Treasury, as well as of gold hoarded by the private sector. The trouble is that much of the privately owned gold is in hiding and won’t surface for reasons of lack of confidence in the monetary system. But as soon as there is a market for the shares of the recapitalized banks, private gold can be coaxed out of hiding and made to participate actively in the great task of rebuilding world credit.

Capital stock of the recapitalized banks would pay dividend, in gold, at the rate of one tenth of one percent per annum to stockholders, exempt of all taxes. This would make it possible, even for people of modest means, to acquire gold earning a safe return in gold. The maliciously false propaganda of the past decades that gold is a sterile asset in that it earns no interest is easy to refute. Gold has been lent and borrowed at interest (facetiously called the ‘lease rate’) without interruption, in spite of its so-called ‘demonetization’ by the government. In fact, the gold rate of interest is the benchmark on which all other interest rates are still based, after adding a risk-premium reflecting the risk that the monetary unit may lose its gold exchange value.

The tax-exempt feature of dividends has great merits to recommend it, especially if no other exemptions across the economic landscape are granted. You could look at it as society’s protection of widows and orphans, and other members of society who are unable to fend for themselves in a competitive environment, to live in dignity away from the hurly-burly of the investment world.

What is the use of recapitalizing banks with irredeemable promises to pay? It has been tried for the past 36 years; it doesn’t work.

No chain is stronger than its weakest link

The newly recapitalized banks must offer their old assets for sale to the public, in exchange for the gold shares of capital stock, through competitive auctions. In this way the true value of the old paper assets can be determined, and whatever can be salvaged will be salvaged. The market for bank assets, presently frozen, would be made liquid once more. If a bank wants to retain a part of its old assets in the balance sheet, it must bid for it in the same way as if it were buying from another bank through competitive auction. If an asset cannot be disposed of in this way, then it must be written off. Any delay in validating bank assets through the sieve of competitive auction will only prolong and deepen the crisis.

The ‘securitization’ of bank assets was an idiotic strategy motivated by the fraudulent idea that in lumping sub-prime assets together with valid assets would somehow impart value to the former, and the marketability of the product would be enhanced. This, of course, is just a ploy to cheat the buyer. It is like trying to make a chain containing a weak link stronger by adding any number of strong links. The weak link must be replaced with a strong one. No chain can be stronger than its weakest link.

The re-liquefying of bank assets is a first order of business in the present runaway global credit crisis. We are past the point that the wild-fire can be localized. Mobilization of gold is the only way.

Save the pension funds!

This crisis is a warning, possibly the last one, that the recapitalization of banks with gold cannot be further postponed without risking the total collapse of the financial system. If there was some hope that the Treasury might have a contingency plan to mobilize gold in case of a crisis such as this, the Paulson bailout plan has dispelled it. When the moment for the ‘break-the-glass’ rescue plan has arrived, what did we find behind the broken glass? More irredeemable promises to pay, to augment bank capital. All chaff, no grain.

Global credit collapse would bring enormous hardship in its train for ordinary people who have worked hard and saved hard through a lifetime only to see the fruits of their efforts going up in smoke. The result could be total social chaos and lawlessness. At risk are all the insurance companies, pension funds, money market funds. Also at risk is the taxing power of the government, as a prostrate economy won’t be able to bear the tax burden, but will spawn a grey economy that finds ways to evade taxes. The rejection by the U.S. House of Representatives of Paulson’s bailout plan can be viewed as a taxpayer revolt. Is it the first, with more to come?

Close of Keynes’ and Friedman’s system

Understandably, it will be hard for policy-makers, academia and media, and the accountants’ profession to admit that they have been wrong all along about gold and its essential role in the economic bloodstream and in accounting. They have fallen victim to the charm of John Maynard Keynes, the prankster who invented the idea that gold was a barbarous relic, and the gold standard was a ‘contractionist fetter’ upon the world economy. Now we have proof that the blame for the contraction should be assigned, not to the use but to the misuse of gold. The debt collapse is the burial ground for Keynesianism.

After Keynes was gone, policy-makers, academia and media, and the accountants’ profession fell under the spell of another visionary and adventurer talking with a forked tongue, Milton Friedman. He was fond of posing as a free-market man, but in promoting irredeemable currency he did more than anybody, save Keynes, to destroy the free market. Friedman promoted the spurious idea that gold is superfluous in the international monetary system as floating foreign exchanges rates can mimic the operation of the gold standard and will balance the trade accounts. But as the record shows, Friedmanite nostrums have ruined the dollar, as well as the once flourishing and peerless American productive apparatus.

Politicians, academia and media, and the accountants’ profession must swallow their pride and get the confession off their chests that their prognostication, policies, and advice about gold have been in error. If they fail to do this, and continue to block the way of gold to make a return to the economic bloodstream, then their responsibility for the suffering caused by the credit collapse in this country and in the world will be total. They will be shown as doctrinaire wreckers of human cooperation under the system of division of labor, who muzzled their critics and usurped unlimited power, while paving the way to a world disaster akin to that of the Bolshevik revolution.

After the close of Marx’ system, the close of Keynes’ and Friedman’s system is inevitable. But the wounds they have caused would take a long, long time to heal.
 By bluejay

10/03/2008  4:11PM

Gold $834.80
Silver $11.16
Gold/XAU Ratio 7.45
Gold/Silver Ratio 74.80

It is supected that the Treasury kept a lid on the gold prices today at the $840 to $845 range. With today's House approval of the $700 billion bailout package the Treasury made sure that gold's activity reflected the save-all plan as being positive for the system.

The following informative article by Antal Fekete was written prior to the House vote.
 By bluejay

10/02/2008  10:10PM

Last on gold is $842.60.

One of the largest coin dealers in the country, California Numismatic Investments, has currently the lowest amount of gold and silver bullion coin inventory ever recorded.


THE MOST POPULAR GOLD BULLION
Gem Uncirculated-$2000 Order Free Shipping
Our Buy Price
Our Sell Price

Eagle US Gold Bullion (1 Oz)
$881.00
Out of Stock

Buffalo US Gold Bullion (1 Oz)
$881.00
Out of Stock

US Gold Bullion Eagle (1/2 Oz)
$447.00
$462.00

US Gold Bullion Eagle (1/4 Oz)
$222.00
$234.00

US Gold Bullion Eagle (1/10 Oz)
$94.00
Out of Stock



US Buffalo Proof 1 Oz Gold-Box & Certificate
$900.00
$970.00

US Eagle Proof 1 Oz Gold-Box & Certificate
$1040.00
$1140.00



Austrian Philharmonic Gold Bullion (1 Oz)
$871.00
Out of Stock

Australian Kangaroo Gold Bullion (1 Oz)
$871.00
Out Of Stock

South African Gold Bullion Krugerrand (1 Oz)
$871.00
Out of Stock



1 Oz Gold Bullion Bar - Pamp Suisse With Cert
$851.00
$881.00

100 Gram Gold Bar-Pamp Suisse (3.21 Ozs)
$2735.00
Out Of Stock

10 Oz Gold Bar - Pamp Suisse With Cert
$8470.00
Out Of Stock

Kilo Gold Bullion Bar-Pamp Suisse/Cert (32.15 Oz)
$26700.00
$27400.00



Austrian/Hungarian 100 Corona (0.98 Gold Oz)
$824.00
Out of Stock



Chinese Panda (1 Gold Oz)
$871.00
Out of Stock



Special Australian Lunar Dragon
$1500.00
$1800.00

Australian Lunar Gold Set 1996-2007 Complete 12 coins
$11720.00
Out Of Stock



Mexican Gold 50 Peso (1.2 Gold Oz)
$1009.00
$1039.00



US $20 Liberty Gold - XF to AU - Dealer's Choice
$1060.00
$1110.00



British Sovereign Circulated (.235 Gold Oz)
$201.00
Out Of Stock



Swiss 20 Franc Brilliant Unc. (Pre-1933 .186 Oz)
$170.00
Out Of Stock

French 20 Franc Brilliant Unc. (Pre-1933 .186 Oz)
$170.00
Out Of Stock


Please note these prices subject to after market changes because of market volatility.

THE MOST POPULAR SILVER BULLION
Premium Quality-$2000 Order Free Shipping
Our Buy Price
Our Sell Price

$1000 Face 90% Ave Circ Silver Coin Pre-65 (715 Oz)
$9125.00
Out Of Stock

$1000 Face 40% Ave Circ Silver Halves (295 Oz)
$3400.00
Out of Stock

Comex Bars 1000oz .999 fine
At Spot
+80¢

100 Oz Johnson Matthey/Engelhard Bars (.999 Fine)
$1250.00
Out Of Stock

1 Oz Generic Silver Rounds (.999 Fine)
Spot+$1.00/oz.
Out Of Stock

10 Oz Generic Silver Bars (.999 Fine)
Spot+$1.00/oz.
Out Of Stock

US Silver Eagles 1 Oz 2008 Box of 500
$7125.00
Out Of Stock

Canadian Silver Maple Leaf 1 Oz 2008 Box (500)
$6625.00
Out Of Stock

Backdate US Silver Eagles Lots of 100
+ $3.00
Out Of Stock

2008 Austrian Philharmonic Silver 2008 Box (500)
$6625.00
Out Of Stock

PCGS MS65 Peace Dollars – Box of 20
$3000.00
$3500.00




*Comex acceptable bars vary in size and are traded using the exact stamped weight.






The Silver Institute is a source of information on silver, including charts and statistics.




THE MOST POPULAR PLATINUM BULLION
Gem Uncirculated-$2000 Order Free Shipping
Our Buy Price
Our Sell Price

United States Platinum Eagle (1 Oz, .999 Fine)
$1020.00
Out of Stock

Canadian Platinum Maple Leaf (1 Oz, .999 Fine) *
$970.00


Australian Platinum Koala (1 Oz, .999 Fine) *
$970.00


Isle Of Man Platinum Noble (1 Oz, .999 Fine) *
$970.00


* = These coins are no longer produced thus we post only bid prices. Ask prices subject to availability.






THE MOST POPULAR PALLADIUM BULLION
Gem Uncirculated-$2000 Order Free Shipping
Our Buy Price
Our Sell Price

Palladium Bullion Suisse Bar (1 Oz, .999 Fine)
$217.00
Out Of Stock

New! Palladium Bullion Canadian Maple Leaf
$217.00
Out Of Stock
 By bluejay

10/02/2008  11:38AM

Gold $837.80 off $30.40
Silver $11.13 off $ 1.46
Gold/XAU Ratio 7.27
Gold/Silver Ratio 75.27

Today's massive market manipulation of gold is effecting silver and putting the ratio's of gold to the XAU Index and the silver ratio at historically cheap levels.

We are looking at the ratio's of gold to the Index and silver that may not ever be seen again. It is just unbelievable what a well orchestarated and vicious attack can do to values in the precious group. This will be classic example someday of how very very desperate officials at the Treasury and the Federal Reserve have become in their efforts to keep money in the banking system. Their uncontrolled arrogance in continuing to prop up a failing fiat system will cost in the end dearly every American.

We are in the midst of historical times that can only push our currency into hyperinflation and practically destroy everyone's purchasing power way beyond their imagination. This unwinding massive financial meltdown will be written about in history books and will be, sadly, our legacy for years way after we are gone.

The following are today's words of wisdom from Jim Sinclair:

Posted On: Thursday, October 02, 2008, 1:09:00 PM EST

In The News Today

Author: Jim Sinclair


Dear Friends,

Follow this logic:

Paper is collapsing as there is no credit market right now for major and financial entities.

The masses sell Honest Money (Gold) and run into paper, backed by bankrupt governments.

Proper logic would be to sell that paper and move into gold and gold shares that are at giveaway prices.

History proves the latter to be the course of action to take

Respectfully yours,
Jim

Jim Sinclair's Commentary

This will go down as the dumbest thing our financial leaders ever do.

This has set off a huge amount of OTC default derivatives now moving to full value as a counterparty goes Chapter 11.

In a sense, do not let this happen to you. For God sake protect yourself

Gold is the only item that will, as the smoke clears, be understood as the single asset of wealth protection.

Lehman Hedge-Fund Clients Left Cold as Assets Frozen (Update3)
By Tom Cahill

Oct. 1 (Bloomberg) -- Lehman Brothers Holdings Inc.'s bankruptcy probably means the end of hedge-fund manager Oak Group Inc. after 22 years in business.

John James, who runs the Chicago-based firm with $25 million of assets, didn't buy Lehman stock or debt. Instead, his potentially fatal mistake was to rely on the bank's prime brokerage in London, a unit that provides loans, clears trades and handles administrative chores for hedge funds. He's one of dozens of investment managers whose Lehman prime-brokerage accounts were frozen when the company filed for protection from creditors on Sept. 15.

``We're probably going out of business and liquidate, game over,'' James, 59, said. ``We've lost 70 percent of our assets.''

The list of funds trapped in the Lehman morass keeps growing. London-based MKM Longboat Capital Advisors LLP said last week it will close its $1.5 billion Multi-Strategy fund in part because of assets stuck at Lehman, according to an investor letter.

LibertyView Capital Management Inc. of Hoboken, New Jersey, owned by Lehman's Neuberger Berman unit, told investors on Sept. 26 it had suspended ``until further notice'' attempts to calculate the value of its funds. LibertyView wasn't included in the Sept. 29 sale of Neuberger to Bain Capital LLC and Hellman & Friedman LLC.

More...
 By bluejay

10/02/2008  8:57AM

Last on gold is $834.90.

From http://www.jsmineset.com



Posted On: Thursday, October 02, 2008, 10:35:00 AM EST

A Modern Day Weimar

Author: Jim Sinclair

Dear Extend Family,

Unless the LIBOR rate drops sharply we are facing a planetary financial crisis next week.

For God's sake protect yourself.

Gold and gold related items will be the only true storehouses of wealth. The bailout bill is powerless to reverse what is now happening.

This is a modern day Weimar happening right before our eyes.

Respectfully yours,
Jim
 By bluejay

10/02/2008  8:51AM

Gold $829.00 off $39.20

It's quite predictable when gold will get attacked next by the government's two buddy bullion bank dealers.

Each time a crisis decision is made the bullion bankers and their following hedge fund mindless black boxes go into action.

This is no different that hiring a band and a cheer leading section to rave with excitement each time a bad monetary policy decision is made.

OTC derivatives is the problem and trying to sweep them into a corner like water will never work. Now, it appears that the accounting rules will be changed within the body of the recent bailout plan to allow the bankers to keep that water frozen in the corners of their banks.

The bottom line is that it is toxic waste. After it's sterile, to some degree, they'll dress it up to look different but it is still toxic waste. It's almost like putting a marshmallow on a cow paddy and calling it a bakery product.

All the Treasury is doing by depressing gold is trying to scare people away from cashing in their CD's and putting the funds into gold and silver. It is strongly suspected that these guys have had their fingers in drying up the supply of bullion coins to the public, to some extent.

Stay the course as Jim Sinclair has said many times. Protect yourself by eliminating the middle man between you and your assets.

In the following years your wealth will be determined by how liquid your assets are at the time that can be turned into gold, if it's available.

Right now, it's difficult to buy gold in smaller amounts. What do you think it's going to be like in a few years when gold is significantly above $1,000 and more people want it.

There is no time like the present.
 By bluejay

09/30/2008  11:06PM

Last on gold is $877.20

http://www.truveo.com/Awkward-Loan-Interview/id/3123347393
 By bluejay

09/30/2008  10:01PM

The last on gold is $881.50.

The following is another educational and informative article by Dr. Darryl Schoon. Both Dr. Schoon and Jim Sinclair advise us all to email representatives in the House expressing our opinions considering the proposed bailout of financial institutions.

Check out jsmineset.com for further comments concerning the bailout and a list of Republicans who voted for it for possible email comments.

What's Next?

By Darryl Robert Schoon
Sep 30 2008 12:01PM

www.drschoon.com


This article was written just prior to the announcement of the rejection of the bailout bill but has been qualified to reflect current conditions. Celebrate today's victory! It is a victory for all of us, whether we know it or not. Much thanks to Ron Paul and all the brave souls both Republican and Democrat who withstood their party's commands and instead sided with us, the people of the United States of America!

Darryl Robert Schoon

From a Reader on 9/25/08:

The town of 2,000 where I reside is functioning normally. The people haven't a glimmer or a clue or a suspicion of what America is facing and will be undergoing - it is painfully bizarre, almost maddening.

My "nightmare dreams" since January have concerned soon-to-occur events in the U.S. I cannot stop their flow. But I am often reminded of your prophetic statements made some nine months ago in the "Christmas on Threadneedle Street" essay. In your essay two salient and prescient paragraphs were written and both are relevant today:

“The triumph of the moneylenders over government is almost complete and because of it, in the coming crisis governments will protect the interests of bankers, not the people.”


“As we watched the New Year’s merriment from the Langham, I could not help but be reminded of the play, Cabaret, we had seen earlier that evening. Cabaret, set in 1931 Berlin, begins on New Years Eve and ends with the participants awaiting their respective fates in Hitler’s Germany. Most were in denial about what was to occur. The same is true today.”
Thank you for writing that essay, it deeply affected me at the time and still does.

Michael Thomas Bucci

Last New Year’s Eve, Martha and I were in London and from our room at the Langham Hotel we watched the fireworks over the Thames. That night, although England was celebrating the coming New Year, they were doing so in ignorance of what was to come—a financial cataclysm that would destroy the very system that had transformed their small island into a world power. Unbeknownst to the British, The City, the banker’s bunker, would soon be in shambles.

We were in London again last June and by then the mood had changed, the optimism that the wealth effect from the financial services industry—since when was parasitoidism considered an industry?— would sustain England was no more. By June, the troubles of The City and the collapsing British real estate bubble had stripped bare the fear that lies beneath hope.

The British bubble had burst and in more ways than one. In many ways, the British and Americans have shared and will continue to share a common fate, albeit with little of the power and glory of yesteryear. The immediate future of both England and the US will be in stark contrast to what was previous. The past will not be prologue.

BEING RIGHT IS BITTER MEDICINE IN BAD TIMES BEING WRONG HOWEVER WILL BE FATA.L

All of us, whether aware, asleep or in deep denial of our present circumstances are in the same boat, a boat that is rapidly sinking. Most people, however, have little awareness or understanding of what is happening. Michael Thomas Bucci’s recounting of his community’s ignorance is not unusual, it is the norm.

All of us who are aware of the reasons for the collapse of our economies are shocked by this bifurcated reality. We and those not yet aware exist in worlds as separate as black and white. What we share, however, is a mutual inability to change what is.

Those ignorant of what is to come, however, will suffer in far greater measure than those who understand what is happening. In the not too distant future, economic fear and uncertainty will be replaced by abject terror and despair; and if you don’t understand the now changing world, you will soon be its victim.

What is happening is an economic rendering that will destroy credit markets as we know them. The end of an era is at hand, the British banking system built on paper money, credit and debt is collapsing from within. Its collapse is just beginning and by its end, everyone will be affected.

We are witness to the end of an empire, an empire built on debased currencies, the substitution of debt and credit for gold and silver, and human greed. In the approaching end, the dying and damaged system built by bankers in collusion with governments will fall by its own hand.

The cost of prolonging its stay, however, will be steep. The attempted US $700 billion bailout of the bankers is only one step in the escalating and futile attempts of governments and bankers to preserve their immense power and wealth. It would do us well, especially now, to remember that our welfare is not their concern.

A MÉNAGE A TROIS BETWEEN GOVERNMENTS, BANKERS AND CITIZENS SOMEONE’S GETTING SCREWED (NOT IN A GOOD WAY)

It is often said that the road to hell is paved with good intentions and while that may sometimes be true, it is also true that hell is reached far more quickly when the road is paved with evil.

The road on which we now travel was built by bankers and governments together. The bankers’ purpose was to indebt society, e.g. governments, businesses, and producers and savers, whereas governments’ purpose was to gain as much power as possible; and if the original intent of both was not evil, it has certainly crossed that line since.

The bankers achieved their first step towards our present nightmare when the King of England in 1694 delivered the English people into the hands of the bankers. In return for the right to spend all he wanted, the King gave bankers the right to issue England’s currency as paper money and to charge compounding interest on the debts. This was to eventually indebt the English people into perpetuity.

The English then became directly responsible for the King’s wars and the increasing demands of government fed by its central bank, the Bank of England. Consequently, their debts became so great that that a new form of taxation had to be levied upon the English people—the income tax.

The tax on income was first implemented in 1799, in England, as a temporary tax,
as a source of revenue needed to finance the war against the French Army, lead
by Napoleon. It was repealed in 1816, after the English triumph in the Waterloo
Battle, due to strong opposition by society and the Parliament. The permanent
implementation of the tax on income occurred only in 1842, justified by the
increasing deficit of the English Treasury.

Luis Fernando Wasilewski

The English invention of the income tax, like their debasement of money and promotion of credit and debt, has now spread—as terrible ideas often do—around the world. Elected governments have continued this royal tradition, using the income tax to obligate the citizenry beyond their ability to repay; and, now, as a consequence citizens everywhere are being taken advantage of by those they elect.

Of this indebting, Thomas Jefferson warned almost two centuries ago:

To preserve [the] independence [of the people,] we must not let our rulers load us with perpetual debt. We must make our election between economy and liberty, or profusion and servitude. If we run into such debts as that we must be taxed in our meat and in our drink, in our necessaries and our comforts, in our labors and our amusements, for our callings and our creeds, as the people of England are, our people, like them, must come to labor sixteen hours in the twenty-four, give the earnings of fifteen of these to the government for their debts and daily expenses, and the sixteenth being insufficient to afford us bread, we must live, as they now do, on oatmeal and potatoes, have no time to think, no means of calling the mismanagers to account, but be glad to obtain subsistence by hiring ourselves to rivet their chains on the necks of our fellow-sufferers.

Thomas Jefferson to Samuel Kercheval, 1816.

No earthly consideration could induce my consent to contract such a debt as England has by her wars for commerce, to reduce our citizens by taxes to such wretchedness, as that laboring sixteen of the twenty-four hours, they are still unable to afford themselves bread, or barely to earn as much oatmeal or potatoes as will keep soul and body together. And all this to feed the avidity of a few millionary merchants and to keep up one thousand ships of war for the protection of their commercial speculations.

Thomas Jefferson to William H. Crawford, 1816.

Truth as well as human perfidy becomes more obvious with time’s passage.

We asked for signs
the signs were sent
Lyrics by Leonard Cohen
Anthem from the album The Future

THE SLAVES ARE GETTING RESTLESS THE DEFEAT OF THE BANKERS BAILOUT BILL

Bush’s $700 billion bailout bill has been defeated. It should have been named BSAAAAAA, for Bankers Screwing America Again And Again And Again—and no, all those A’s are not redundant and yes, I could have used another word but it would have been less acceptable.

The Rasmussen poll showed only 11 % of Americans supported the bill that would bail out the very bankers responsible for the destruction of the US economy. The passage of the banker’s bailout bill indemnifying investment banks would have been the same as bonusing the Nazis after WW II.

In Christmas On Threadneedle Street, I wrote that when the king and the moneylenders made their bargain, the king was believed the more powerful; and, at the time, he was. In the long term, however, the bankers got the better of the bargain. Today, investment banks are more powerful than governments.

The king to the banker did say
Tis I who ride you this day
This day it is true the banker did say
But tomorrow tis I who ride you
From Christmas On Threadneedle Street

In 1999, England’s Chancellor of the Exchequer Gordon Browne sold 415 tonnes of England’s gold reserves at the very bottom of the market, costing England billions in losses along with the loss of its bullion.

The rumor was that investment bank Goldman Sachs had a 1,000 tonne short position in the market and had bet the price of gold would go down. But when it went up Goldman Sachs could not cover. So, Gordon Browne sold 58 % of England’s gold reserves to help out Goldman Sachs by keeping down the price of gold. Gordon Browne is now the Prime Minister of England.

At the time, the CEO of Goldman Sachs was Henry Paulson. In less than 10 years, Paulson cost has England the majority of its gold reserves and may cost America trillions more before it’s over. Perhaps Paulson should be reclassified as a danger to the community or at least a gross public nuisance because of what he has done to England and the US. With his position comes responsibility—or does it?

1) “The triumph of the moneylenders over government is almost complete and because of it, in the coming crisis governments will protect the interests of bankers, not the people.”

From Christmas on Threadneedle Street January 5, 2008

The following is taken from today’s Wall Street Journal, Sept 29, 2008:

To some, the government's decision to resort to a bailout represents a tacit admission: For all officials' desire to allow markets to punish the risk-taking that engendered the crisis, banks have the upper hand.

WHAT’S NEXT?

Our present problems began with the establishment of the Bank of England in 1694 which substituted their paper money for England’s gold and silver. Those troubles gained momentum when US bankers did the same in 1913 with the creation of the Federal Reserve Bank in the US.

From these central banks issued the first debt-based paper money that was to eventually be leveraged beyond the capacity of capital markets to absorb or contain. Within 20 years after the Federal Reserve was created in the US, the Fed’s loose credit policies plunged the world into the Great Depression of the 1930s.

Now, in 2008, the same loose credit policies of the Federal Reserve are again about to plunge the US and perhaps the world into another Great Depression even more destructive than the first. The banks may not survive, indeed they are already failing—and neither may the governments.

The coming together which led to the present falling apart was the collusion of banks and governments to substitute paper money for gold and silver. Therein lies the key to survive what is to come, an end that is already in motion.

Last year on New Year’s Eve, Martha and I were in London. This year we will be in New York City. I wonder what the mood of Americans will be then, on New Year’s Eve when they bring in the New Year. Hopefully, it may be a continuation of what happened today.

Today’s repudiation of Wall Street’s brazen demand to be bailed out by American taxpayers’ may be the beginning of America’s long needed and long awaited renewal. Americans should now check on how their Representatives voted on the bailout bill.

If they voted against the bailout, they should be congratulated. If they voted for it, they should be told bluntly and strongly they will not receive your vote in the future. Remember, it’s all about jobs and their jobs are at stake too.

The rebirth of America will only happen when our system of central bank debt-based money imported from England is thrown out; and, if England, too, wants to survive, the English people may well consider doing the same. Once upon a time, gold and silver were replaced by paper money. The opposite can happen as well.

The road to the future must be repaved if we are to survive the present crisis and coming collapse. Gold, silver, and faith must be our pavement of choice and, of the three, faith is the most precious.

Darryl Robert Schoon
www.survivethecrisis.com
 By bluejay

09/30/2008  4:59AM

Last on gold is $893.90

The following is strong evidence that the public is finding it more and more difficult to acquire bullion coins:

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$928.00
Out Of Stock

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$468.00
$483.00

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$237.00
249.00

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$97.00
$104.00



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$950.00
$1000.00

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$1050.00
$1150.00



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$929.00
$949.00

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$923.00
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$923.00
Out Of Stock



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$903.00
$923.00

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$2900.00
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$9030.00
$9230.00

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$29000.00
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$866.00
Out of Stock



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$913.00
Out Of Stock



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$1900.00

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$12200.00
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$1068.00
$1098.00



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$1060.00
$1110.00



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$213.00
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+80¢

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$8865.00

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$1052.00


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 By bluejay

09/28/2008  11:10PM

Gold $876.90
Silver $13.74

Strange things are happening with the conduits of gold and silver from mines to the public in the form of bullion coins. It all started a few months back when the US Mint halted sales of the one ounce gold eagles because of a shortage of blanks. Then the Mint stated that they were going to resume those sales but they would be allocated. Then a few days ago the Mint halted sales of the one ounce gold Buffalo coins, saying an exhaustion of supplies.

Now we have the following report in Ireland that government mints and refiners had stopped offering new supplies.

Breaking News Business Ireland

Gold and silver dealer reports an ‘unprecedented’ shortage of metals

Sunday, September 28, 2008 By David Clerkin, Markets Correspondent

A surge for demand in gold and silver has resulted in an unprecedented shortage of the metals for retail investors in recent days, according to Gold and Silver Investments, a Dublin-based firm that allows retail investors to speculate on movements in the value of precious metals.

Gold and Silver Investments director Mark O’Byrne said the supply of gold and silver available for small retail investors suffered a dramatic deterioration within hours on Friday, as wholesalers reported that government mints and refiners, the primary suppliers of the metals, had stopped offering new supplies.

‘‘It’s absolutely unprecedented,” said O’Byrne, who said the shortages were likely to drive up the costs of gold and silver in the secondary market.
--------------------------

Gold is and will always be the ultimate power. Do governments believe that there is too much gold and silver going into the hands of the public? All this is taking place within the global meltdown of OTC derivatives. The fiat currency system is under attack when the public can't get enough precious metals in exchange for their currencies.

Or could it be something more basic and simple? Could it be that the sellers of physical gold and silver don't believe the last posted prices of these metals?

On E-Bay, for example, the silver eagle one ounce coins sell for around $20 each. If you buy the coins from golddealer.com in Englewood, California the price is $18 a coin. At that price you are paying a hefty 31% above the last silver COMEX price in NY of $13.74.

In regards to the physical bullion gold coin market no comparisons are available for US one ounce coins at golddealer.com because they are not offered. They do have some 1/2 ounce gold eagles which are for sale at $480 each which is the same as paying $960 an ounce for gold which is a 10% premium above the last price.

Are people wising up to the rigging of these markets? COMEX supposedly has gold and silver on deposit in their vaults to back up futures trading in these items but are they audited by an independent concern?

Mike related the story to us some time ago about his friend that wanted to take delivery on a gold contract for 100 ounces and was told to either settle in cash or exchange his contract for another one, further out in time. That didn't make sense to him and it wouldn't make sense to any reasonable person, either.

What's interesting is the London Bullion Market is basically a cash and carry physical market. Do shenanigans go on in this market too as is suspected of COMEX? How about the TOCOM in Japan?

Are fiat currency governments all rigging the precious metals to dampen investor demand? You can bet Russia isn't. It has been again rumored that they will be backing the Ruble with gold and some form of convertibility into it.

Concerning China, they are the world's largest producer of gold and may not choose to export it at questionable world prices. In 2007 China mined 276 tons of the metal or 9,700,000 ounces. Their domestic production is expected to increase while many country's production totals are in decline.

In conclusion it appears appropriate to view the COMEX prices for both gold and silver with suspicion and the transacted prices of the physical metals as creditable.
 By bluejay

09/27/2008  1:53PM

Last of gold is $877.80

The following is an excerpt from the Casey Research Saturday morning comments.

“Some of the largest wholesalers in the world are out of all bullion product except for exchange bullion product - 100 ozt and 400 ozt gold bars and 1,000 ozt silver bars. They cannot supply South African Krugerrands, American Eagles and Buffaloes, Canadian Maples, Austrian Philharmonics, Chinese Pandas, Australian Nuggets (all 1 oz.). They cannot supply 1 oz. or 10 oz. gold bars or 1, 10 and 100 oz. silver bars. And I have confirmed they cannot sell any European or world gold coins such as British sovereigns, francs, marcs, Mexican pesos etc. etc.

“They have confirmed that there is no physical supply at all from the primary marketplace - large refiners and government mints. Worryingly they are being informed that this is not a temporary problem and there are no supply side commitments and there is little in the pipeline for the foreseeable future due to excessive and unprecedented demand. Secondary supply from the public and retailers is nearly non existent as there are nearly no sellers and nearly all buyers.

“Bullion shortages and the confluence of unprecedented demand and limited supply in conjunction with macroeconomic, inflation and systemic factors is leading to extremely bullish conditions for the gold market - probably even more bullish than in the 1970s when gold rose some 3,000% from $35 to over $850 in just 9 years.”
 By gfxgold

09/26/2008  5:31PM

US Mint Suspends Sale of 24-Karat Gold Coins. Read this story at: http://hosted.ap.org/dynamic/stories/M/MINT_GOLD_COINS?SITE=MOSPL&SECTION=HOME&TEMPLATE=DEFAULT
 By bluejay

09/26/2008  4:56PM

Gold $877.80
Silvr $ 13.31
Gold/XAU Ratio 6.35
Gold/Silver Index 65.95

Pierre Lossande made some observations in the September 19, 2008 Gold Report.

Mr. Lassonda is the Chairman of the Board of Franco-Nevada. Pierre is one of Canada's most astute gold analysts.

"What really bothers me is that in the 1980's and 1990's, we saw three to five discoveries of 5-20 million ounces ounces each and upwards of 30 to 50 million ounces(of gold) a year. That is what makes or breaks an industry. There are no discoveries of that magnitute now."

"Gold supply fell by 4% in the first six months of this year. This will be the seventh year in which production has dropped. It’s probably going to fall more in 2008 than it has in prior years. Australia, Indonesia, Canada, and the U.S. are all experiencing declines. Combine this with the drop off in central bank sales. 2008 will have the lowest central bank sales on record because the bankers have all had theirs head handed to them. They all sold gold for $250, $350, and $400—losing tens of billions of dollars. We could soon reach the point where central bank sales will be non-existent. That represents a loss of 500 tons of gold a year in a 3,000-ton market. That’s huge—nearly 20% of supply. Recycling has declined in the last six months too. Even though demand fell when gold hit $900 and $1,000, the supply has been shrinking just as fast. I don't see gold dropping much below $800—plus or minus $50.
-------------------------------
 By bluejay

09/25/2008  7:58PM

Last on Gold is $877.70

The following article was written by John Crudele of the New York Post.

Thursday, September 25, 2008
Last Update: 10:20 PM EDT

BAILOUT PLAYS INTO BERNANKE'S DEFLATION FIGHTING THEORY Posted: 4:08 am
September 25, 2008

IS Ben Bernanke deviously planning to run the nation's printing presses overtime in order to get out of the jam caused by Wall Street?

Wait, hear me out before you scoff!

I know the guy looks harmless enough. And with Treasury Secretary Hank Paulson by his side, the pair could be a couple of doctors whose diagnosis you wouldn't dare second-guess.

But back when Bernanke was a mere governor of the Federal Reserve he now leads, he told a group of Washington economists that he'd fight deflation by printing money.

"The US government," said Bernanke in 2002, "has a technology, called a printing press - or today, its electronic equivalent - that allows it to produce as many US dollars as it wishes at essentially no cost."(The cost will be born directly by the people of the US by way of an indirect significant tax which is not free to them but a liability in the form of inflation)

You have to understand, that's like me saying the government should censor my column. Or a priest saying he'll get his next sermon from George W. Bush.

It's heresy for anyone associated with the Fed to say that we can just print money if we get into a jam. That would cause hyperinflation like Germany had in the 1920s. It's the bane of any economy. It's toxic.

And a guy like Bernanke, who went to MIT and Harvard and taught at Princeton, didn't need me to tell him so.

But I did anyway. And Bernanke responded by saying the right thing: He believes in price stability.

Yet, the man did say the stuff about the printing press. And he's now asking Congress for a massive $700 billion - and probably more later - to bail out banks.

The hope - and that's all it is - is that the pile of manure that the government gets from the banks will turn to gold some day.

But we all know how that fairy tale ends.

Of course, you are hearing a lot today about inflation - not deflation. In fact, this column has been documenting for a long time how prices have been rising beyond what Washington will admit.

So is Bernanke's statement about how he'd cope with deflation irrelevant?

Not if you understand Fed-speak.

Bernanke's predecessor Alan Greenspan used to publicly worry about inflation constantly, even when the prices of things we buy seemed contained. That's because Greenspan was really talking about asset inflation, namely the rising price of stocks and real estate.

Now that real estate is deflating in price, Bernanke's printing press suggestion could be one that - perhaps only deep down in his subconscious - he's holding onto.

It all makes sense.

Let's say the government takes over all troubled mortgages, pays for them essentially with an electronic entry in its books (today's printing press) and then just waits for everyone to forget about the whole mess.

We'd be bailing out the banks with Monopoly money.

Nice and neat, until the financial markets get wise. Then - like in Germany - there'd be hell to pay.


*


Note to Washington: Before you bankrupt the country, try what I've been suggesting.

Let people withdraw money from retirement accounts without tax penalty in order to purchase real estate.

It'll cost the government nothing except the loss of taxes sometime in the future. And it will, at the very least, get some real estate off the market. Maybe even a lot of real estate.

With a reasonably good p.r. campaign, Washington can pretend that the housing problem is being fixed, since what Washington is now proposing won't get one condo off the market.

Of course, it's easier just to give away $700 billion when it isn't your money.


*


Let me pick nits for a minute.

It has been fairly well documented (and not by me) that Paulson was on the phone last week to Wall Street firms telling them that the federal government was riding to the rescue

That's when stocks rallied sharply late last week - only to fall heavily the first two days of this week.

I've written before how Paulson readily admits that he keeps in touch with "market participants."

How is that not insider trading?

Why can Paulson call up some firms and deliver to them the incredibly important information that the federal government is about to do something and not tell everyone - including Wall Street firms that are not in the loop as well as the public?

Which brings me back to a very important question I asked last year: When Paulson met with Bernanke hours before rumors of the first of a series of interest-rate cuts in August 2007, did he share what he had learned with these so-called market participants?

Lesser human beings have gone to jail for such phone calls. His role as Treasury Secretary doesn't give him immunity from the insider trading laws, even if he thinks his motives are noble.

john.crudele
 By bluejay

09/25/2008  7:12PM

Last on gold is $877.50

Are we to believe that the mint is out of gold? Or, are Americans being restricted from buying gold?

Gold coin sales halted after retail rush
By Javier Blas in London

Published: September 25 2008 23:03 | Last updated: September 25 2008 23:03

The rush by retail investors into gold on Thursday forced the US government to “temporarily” suspend the sales of the popular American Buffalo one-ounce bullion coin after depleting its inventories.

The shortage of gold coins is the latest sign of investors seeking a safe haven into bullion amid Wall Street woes. Gold prices this week surged above $900 an ounce, up about 20 per cent from its level before the collapse of Lehman Brothers.

Safe-haven buying spurred by a weakening dollar and rising inflation on the back of high commodity prices have also benefited gold sales, analyst said.

The US Mint said in a memorandum that “demand has exceeded supply” and, therefore, it was “temporarily suspending sales of these coins”. “We are working ­diligently to build up our inventory and hope to resume sales shortly,” it added.

Spot gold in New York on Thursday traded at $875 an ounce, down $5 on the day. Traders said bullion prices came under pressure from a strengthening in the dollar. Gold set a record of $1,030.80 an ounce in March.

The US Mint said it has sold 164,000 ounces of gold in American Buffalo one-ounce bullion coins since January, almost 54 per cent more than in the same period of last year. Demand for other gold coins from the US Mint is also very strong.

Last August, a shortage of American Eagles one-ounce bullion coins, another popular gold investment, due to “unprecedented demand” also forced the US Mint to suspend sales and later to place limits on the number it ships to dealers.

The US Mint has sold since last January about 419,500 ounces of bullion in the form of American Eagles coins, more than double the 198,500 ounces it sold during the whole 2007. In 2006, it sold 261,000 ounces.

The scarcity of gold coins comes as investors in bullion-backed exchange traded funds (ETFs) have amassed a record 1,054 tonnes of bullion, becoming the largest holders of gold after the reserves of the US, Germany, the International Monetary Fund, Italy, France and Switzerland.
 By bluejay

09/25/2008  11:57AM

The last on gold is $873.50


News > US Markt > Wirtschaft

Interpretation of the following article: The Chinese will say whatever has to be said to keep the dollar stable as they qietly and slowly make their way to the exits. I think the Chinese are very very sorry that they ever got themselves into holding such vast quantities of US dollar denominated financial instruments.


25-09-2008 07:41 U.S. Financial Crisis Impact Could Worsen - Chinese Press


UNITED NATIONS (Thomson Financial) - Cash-flush China weighed in on the U.S. financial crisis on Wednesday, with Premier Wen Jiabao warning its international impact could become 'more serious' and stressing the need for concerted efforts to contain the turmoil.

He indicated China, the world's biggest holder of foreign reserves and second-biggest holder of .U.S treasury bills, was ready to help in an international bid to defuse the turmoil that has rocked financial markets across the globe.

'The ongoing financial volatility, in particular, has affected many countries and its impact is likely to become more serious,' Wen told the UN General Assembly.

'To tackle the challenge, we must all make concerted efforts,' Wen told the UN meeting at the tail end of his address, which touched on various issues, including a pledge to push ahead with reforms to fuel growth in the world's most populous nations.

U.S. President George W. Bush, who is also attending the UN General Assembly, had telephoned Chinese President Hu Jintao on Monday to brief him about the financial turmoil and his administration's bid to stage a $700 billion Wall Street bailout to stem the crisis.

Hu told Bush that China welcomed Washington's efforts to stabilise the U.S. financial markets and hoped they succeed, according to Beijing state media.

But as Wen spoke on Wednesday at the United Nations, the Bush administration remained locked in a dispute with U.S. Congress over the massive bailout package aimed at buying distressed mortgages and mortgage-related securities from financial institutions.

Financial markets, including in China, have been volatile since the US crisis peaked this month, triggered by the bankruptcy of Lehman Brothers and a Federal Reserve rescue of insurance and financial giant AIG last week.

Wen hinted that China would help in any international bid to defuse financial contagion arising from the US crisis, saying this was not the time for 'hostility' or 'prejudice.'

'So long as people of all countries, especially their leaders, can do away with hostility, estrangement and prejudice, treat each other with sincerity and an open mind, and forge ahead hand in hand, mankind will overcome all difficulties and embrace a brighter and better future,' he said.

'China, as a responsible major developing country, is ready to work with other members of the international community to strengthen cooperation, share opportunities, meet challenges and contribute to the harmonious and sustainable development of the world,' he said. tf.TFN-Europe_newsdesk@thomsonreuters.com ms1

COPYRIGHT

Copyright Thomson Financial News Limited 2008. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
 By Hans Kummerow

09/24/2008  7:26PM

Thank you bluejay. You do a great job in digging out well-reflected articles.

Today I would like to share some information on my family's experience in the Weimar Republic and the founding days of the former Deutsche Mark Era with you.

Ever since 1932 my ancestors have made it an important issue to encourage every new generation to buy and save some gold and/or silver bullion.

And to store it in a place that will still be accessible in case that banks are closed down by a government order.

Hans Kummerow
 By bluejay

09/24/2008  9:13AM

Last on gold is $885.00.

Thanks Hans for your, always, great comments.

A lengthly but informative article follows from Dr. Darryl Spoon:

The Killers are with the Patient
Darryl Robert Schoon
Posted Sep 23, 2008

There is nothing more dangerous than when those responsible for a nation's troubles are believed to be its savior.

The Wall Street Journal had one fact correct regarding Wall Street's accelerating collapse when on September 20th they wrote: When government officials surveyed the failing American financial system this week, they didn't see only a collapsed investment bank or the surrender of a giant insurance firm. They saw the circulatory system of the U.S. economy - credit markets - starting to fail.

The Wall Street Journal was correct in that the circulatory system of the US economy was failing. Because the Wall Street Journal is the house organ of Wall Street investment banks and their co-conspirators in government, the Wall Street Journal blamed deteriorating credit markets for America's troubles, not those responsible - to wit, Alan Greenspan, Ben Bernanke, and their cohorts at the Federal Reserve Banks.

ALAN GREENSPAN'S BASTARD SON

Ben Bernanke, Alan Greenspan's surrogate successor at the Federal Reserve is using Greenspan's discredited playbook to hopefully resuscitate America's economy. But pouring more credit into America's stalled economy will not restart the US economy anymore than pouring gasoline into a flooded engine will restart an engine.

Excessive credit caused the problem and more credit will only exacerbate it. The US central bank, the Federal Reserve, however is now backed into a corner, a corner from which there is no exit.

After credit markets contracted in August 2007, it was hoped that central bank intervention would reverse the deterioration of global markets that was then only beginning. A year ago, on October 1, 2007, I addressed that hope in my article, The Winter of Our Discontent:

As we collectively move towards the economic disaster awaiting us, the investment community is hoping the world's central banks will be able to save them from the crisis set in motion by this summer's [August 2007] credit collapse.

If the truth be known - and someday it will be - central banks are at the very center of today's problems. Indeed, they caused them. Today's disintegration of capital markets based on debt-based paper began in 1913 with the creation of the US Federal Reserve Bank, the central bank of the US.

...Debt-based paper money has led nations and the world down a very dangerous path. Facilitating expansion by encumbering future revenues with compounding debt inevitably indebts individuals, businesses, and governments beyond their ability to repay.

In the beginning, production expands, needs are met and everyone goes home happy. In the end, everyone's home gets repossessed. This is when the amount of debt has grown so large, governments, businesses, and consumers collapse under its collective weight.

That's where we are today. We lived off tomorrow and tomorrow has arrived. What a surprise.

Although in the past, continuing central bank intervention has proved inadequate, the ignorant, unknowing and desperate are yet again hoping that Paulson's latest plan will save them. But the collective solutions of Bernanke, Paulson, et. al. will again prove wanting.

Indeed, Paulson's and Bernanke's continuing attempts to reverse the accelerating credit contraction will only make the final rendering all the more devastating. What I wrote last year is true today - except, today, we are now one year closer to the inevitable end of this still unfolding crisis.

cont'd, The Winter of Our Discontent October 1, 2007

...As autumn approaches, this summer's credit crisis continues to spread through the global grid created by today's financial wizards - wizards so adept they do not understand what they have set in motion. That this summer's credit crisis surprised them the most is the most disturbing news of all.

The financial wizards of Wall Street and The City are hoping this summer's credit crisis is a bad cold at worst, that perhaps a slight fever and time will heal the illness and they can return once again to the task of carving out billion-dollar bonuses from capitalism's rotting carcass (sic capitalism, any economic system based on central bank issuance of debt-based paper money).

But the wizards of Wall Street and The City will be wrong this fall. This summer's credit contraction looks increasingly less like a cold and more like cancer which has metastasized and made its way into the lymph nodes of our global economy.

The credit contraction of August 2007 was not a cold. It was cancer and since then it has spread with increasing rapidity throughout the US and global economies; and, now, one year later, the ignorant, unknowing and desperate led by the deceitful, selfish and clever are hoping that its only pneumonia.

CHINA'S KEEPING THE PATIENT ALIVE

Some are alleging that the US government's accelerating bailout of banks, insurance companies et. al. is socialism. Although it is government intervention in extremis, such intervention in the markets does not constitute socialism.

The bailout of investment banks and corporations by the US government is fascism; the control and intervention of government by corporate interests designed to further corporate and state control. The multi-trillion dollar state support of JP Morgan, AIG, Fannie Mae and Freddie Mac and now perhaps soon GM, Ford, and Chrysler is fascism, not socialism.

Fascism should more appropriately be called corporatism because it is the merger of state and corporate power.
Benito Mussolini, fascist dictator of Italy (1922-1943)

What is ironic is that China, a self-described socialist state, is increasingly now responsible for the well-being of the US, a nation rapidly transforming itself into a fascist nation right before our eyes; and, while this might be the ultimate resolution of the two competing ideologies of the 20th century, I don't think so. Instead, it could be the end of both.




CHINA, PAPER MONEY, AND THE WEST

Paper along with paper money was first invented in China and Ralph T. Foster's Fiat Paper Money, The History and Evolution of Our Currency, states that "On January 12, 1024, the Sung court directed the imperial treasury to issue national paper money for general use".

Two centuries later, the Sung Dynasty's paper money had lost almost all its value due to over printing. Later attempts were made to resuscitate paper money but all such attempts were to end in economic collapse. Foster sums up China's experiment with paper money as follows:

Over the course of 600 years, five dynasties had implemented paper money and all five made frequent use of the printing press to solve problems. Economic catastrophe and political chaos inevitably followed. Time and again, officials looked to paper money for instant liquidity and the immediate transfer of wealth. But its ostensible virtues could not withstand its tragic legacy: those who held it as a store of value found that in time all they held were worthless pieces of paper. [bold, mine]
Fiat Paper Money, The History and Evolution of Our Currency, Ralph T. Foster 2nd ed 2008, page 29, available email tfdf(at)pacbell.net or by phone 520-845-3015.

In 1661, China formally outlawed the use of paper money and it wasn't to reappear in China until the 1800s when English traders wanted to pay for Chinese goods with paper bank notes issued by the Bank of England. The Bank of England claimed its paper money was backed by gold and therefore "good as gold".

The Chinese, suspicious of western ways and rightfully so, demanded instead to be paid in their circulating currency, silver; and, as the British badly wanted China's porcelains, teas, and silks, this forced the British to buy silver on the open market in order to purchase goods from China.

If the British bank notes were de facto fully backed by gold as claimed by the Bank of England, there would have been little need for England to go to war in order to instead force China to accept British opium. But the British claim of 100 % convertibility to gold was more a public relations gesture than an actual reality, at least in the large amounts demanded by the growing China trade.

BUYERS ALWAYS PREFER PAYMENT WITH PAPER MONEY
SELLERS ALWAYS PREFER PAYMENT WITH GOLD OR SILVER

The subjugation of China, first by the England and the West and then by Japan, continued until the Chinese Communists forced out the Japanese who had previously forced out the Russians, the British, the Germans, the French and the Americans.

But in the intervening years, between the British invasion in the 1840s and the Chinese Communist victory one century later, the Bank of England with the aid of the US Federal Reserve had instituted the universal acceptance of central bank issued paper money everywhere in the world and China was no exception.

Wikipedia recounts the long experience of China with paper money and hyperinflation:

As the first user of fiat currency, China has had an early history of troubles caused by hyperinflation. The Yuan Dynasty (1271-1368) printed huge amounts of fiat paper money to fund their wars, and the resulting hyperinflation, coupled with other factors, led to its demise at the hands of a revolution. The Republic of China went through the worst inflation 1948-49. In 1947, the highest denomination was 50,000 yuan. By mid-1948, the highest denomination was 180,000,000 yuan. The 1948 currency reform replaced the yuan by the gold yuan at an exchange rate of 1 gold yuan = 3,000,000 yuan. In less than 1 year, the highest denomination was 10,000,000 gold yuan. The highest denomination by a regional bank was 6,000,000,000 yuan issued by XinJiang Provincial Bank in 1949. After the renminbi was instituted by the new communist government, hyperinflation ceased with a revaluation of 1:10,000 in 1955.

Although China first outlawed the use of paper money in the 17th century, it now possesses over a trillion dollars worth of fiat paper money here in the 21st, the majority in the form of recently issued US paper dollars.

Now, the problems of hyperinflation may soon again affect China - because if the US continues to print its way out of its increasing problems, hyperinflation of the US dollar will destroy the value of China's "monetary" reserves.

Although China has a much longer history than does the US, both the world's oldest civilization, China, and the relative newcomer, the US, will face a dangerous economic future if the US continues to accelerate the growth of its money supply. But no one can control the US in this regard, not even the US.

Flooded by the West's paper money
China has joined the West's game against its will
How long will the game continue?
How long before China can reassert its will?
Heaven moves in its own time

EARTHQUAKE, FIRE
& FULFILLMENT OF THE PROPHECY

The August 2007 credit contraction was like a financial earthquake that unexpectedly shook global markets. It began as a series of crises that have continually escalated demanding greater and greater taxpayer resources.

Now, the house itself is on fire but the cause and the proposed solution are always the same. The cause is always investment bank greed. The proposed solution is always more taxpayer money to bailout out more investment banks. This is not a solution. This is societal blackmail.

When the US handed over the issuance of its money to the Federal Reserve in 1913 it did so in violation of the US Constitution. It illegally gave the right to issue US currency to a private bank and set in motion forces that would lead to today's extraordinary crisis.

Today's extraordinary banking crisis was not unexpected - as private bankers claim and we believe. Today's crisis was inevitable and was in fact prophesized long before it happened. We were warned about this very occurrence two hundred years ago by no less than a founding father of the American republic, Thomas Jefferson.

I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.

Jefferson's prophecy has now come true and, yet, we act surprised; and, if we are, it is because the corporate controlled media has effectively misled Americans about the cause of their problems.

Double-dipping welfare moms? Illegal immigrants? Muslim terrorists? It's anyone - except, of course, the bankers and the Federal Reserve - or so say again and again America's corrupt corporate media in whose interest it is for Americans to mistakenly blame others for the real cause of its woes.

Otherwise, Americans, left on their own, might wake up.

THE BUTLER DIDN'T DO IT
THE BANKERS DID

It is bankers such as Henry Paulson who are responsible for America's disintegrating and imploding economy. Since 1913 America has allowed private bankers to control the issuance of America's money and now, in the very midst of the problems they themselves created, the bankers through Paulson's plan are seeking unsupervised control over America's economy complete with immunity from any future criminal prosecution.

This is because the bankers not only want America to bail them out, they are planning to steal their assets back in the process.

TREASURY SEEKS ASSET-BUYING POWER UNCHECKED
BY COURTS (Update2)
By Alison Fitzgerald and John Brinsley

Sept. 21 (Bloomberg) -- The Bush administration sought unchecked power from Congress to buy $700 billion in bad mortgage investments from financial companies in what would be an unprecedented government intrusion into the markets.

Through his plan, Treasury Secretary Henry Paulson aims to avert a credit freeze that would bring the financial system and the world's largest economy to a standstill. The bill would prevent courts from reviewing actions taken under its authority. [bold, mine]

"He's asking for a huge amount of power,'' said Nouriel Roubini, an economist at New York University. "He's saying, 'Trust me, I'm going to do it right if you give me absolute control.' This is not a monarchy.''

The investment banks are even now intending to violate the law in Paulson's proposed government takeover and redistribution of bank assets. It is in the redistribution and sale of bank assets where the crimes will occur - crimes which will be granted pre-existing immunity from judicial prosecution under Paulson's proposal.

This same caveat - immunity from subsequent criminal prosecution - was also written into the authorization of the original Resolution Trust Corporation which disposed of government seized property after the Savings & Loan crisis.

The reason no one remembers the hundreds of billions of dollars of seized property from Savings & Loans listed for sale by the RTC is because it never happened.

The greatest wealth transfer in recent history happened when taxpayer money was used to liquidate S&L properties which were then "sold" to well-connected insiders in transactions immune from criminal prosecution for literally pennies on the dollar.

The soon-to-be owned bank assets under Paulson's plan will not be sold to the highest bidders in an open and fair auction, they will be disposed of again to pools of the wealthy and well-connected at highly discounted insider valuations. The people will pay, the rich will profit.

QUI CUSTODIAT CUSTODES
WHO WILL GUARD THE GUARDIANS

No, this isn't a monarchy. This is fascism.

THE FOX IS IN THE HENHOUSE

Today, investment banker Henry Paulson, former CEO of investment bank Goldman Sachs is US Secretary of the Treasury. This is no coincidence. Thomas Jefferson would not be surprised.

Paulson's plan to bail out the banks is being presented to American citizens as a fait accompli, as a necessary step to prevent the complete meltdown of our financial system. Paulson's plan is exactly what every venal, opportunistic and self-serving banker would propose as a solution to America's problems in such circumstances.

INVESTMENT BANKERS
DON'T NEED TO BE BAILED OUT
INVESTMENT BANKERS NEED TO BE THROWN OUT

The answer to America's problems is clear. Thomas Jefferson said it two hundred years ago.

The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.

Let's do what has to be done, America - or do you still want to blame Muslim terrorists and illegal immigrants for America's problems; or maybe you are still hoping that somehow maybe somehow Paulson's proposed trillion dollar government bailout of the rich and well-connected will somehow trickle down to you and save you and your family from being tossed out onto the streets when your house is foreclosed on by the banks he is going to save.


The majority will always willing pay the price of fascism

When this is all over - and someday it will be - it is my hope that we will have learned the lessons that we have now forgotten. That bankers, like vicious dogs, must always be kept on short leashes for the public safety and public good (neutering should also be a requirement); and, that gold and silver, not credit and debt, are the only foundation of sound money.

PREDICTIONS

(1) Paulson's bailout of investment banks giving bankers total control over America's economy will be rushed through Congress and quickly signed into law damaging international perceptions of US creditworthiness which will lead to further uncertainty in the markets. US Treasuries and the US dollar will ultimately bear the long term consequences of Paulson's self-serving short term "solution".

Conclusion: Even greater financial disaster will result from Paulson's taxpayer bailout of his wealthy Wall Street friends.

(2) Written into the investment banking bailout law will be provisions expanding the police powers of the state, e.g. Congressman Ron Paul noted the recent passage of the housing bill contained the requirement that by 2009 "every credit card transaction will be reported to the IRS".


FASCISM IS ALWASY SOLD AS NECESSITY IN THE NAME OF THE PUBLIC GOOD

Conclusion: Fascism is the new zeitgeist.

This, too, shall pass
 By Hans Kummerow

09/23/2008  8:37PM

Paulson and 699 of his billionaire friends should get together and buy 700 billion worth of "mortgage-related assets from any financial institution having its headquarters in the United States".
Then let them earn all the profits and get away with them.

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