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 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.
 By bluejay

09/23/2008  7:36PM

Last on gold is $881.50.

The following is an excellent article written by a Canadian from Calgary that was presented today on the Agoracom.com website under the stock ECU in the Forum Discussion section.


Mob will be growing with startling awareness
Posted by: sinbob on September 23, 2008 03:52PM

Shattering the myths.


As Senator Shelby kicked off this morning’s “hearings” with Paulson and Bernanke, one could not help but note his tone of justifiable repudiation towards the Treasury, Fed., SEC and Wall St. Shelby made pointed references to his opposition since 1979 to the bailing out of any private institutions/corporations with taxpayer’s dollars, going back to Chrysler. He also made it graphically clear that Congress has been assured on many occasions over the years, starting with Greenspan and ending Cox, Paulson and Bernanke, as recently as February, that there was no cause for concern and that the economy was sound. So, now Paulson wants undisputed power to move quickly forward, “clean and decisively” to legislate action that would favor even more private control over the US markets. He is holding the ultimate “bazooka” to the head of the people of the US making it clear that urgency is of the utmost importance. This is the man who many are on to, now despised by many (all you had to do was watch the demeanors of the many panned shots of several of the committee members). This is the man who, as President of Goldman, sold out his options for $700 million and became the Secretary of the US Treasury. This is the man who has linkage to all the ex Goldman executives now sprinkled strategically throughout the financial and political power bases in the US, Canada ( Mark Carney, Gov. Of the Bank of Canada, former GS ) and Europe.


As the bankers proceeded to raid the life time savings and personal accounts of Americans last week in order to cover their collective bottoms, overriding the rule of contract law, and bail out the crooks (hidden inside the AIG bail out) Paulson and team were hurridly crafting their grand plan for financial crisis legislation, legislation allowing the use of unlimited public funds well over the $700 billion teaser price (say $Trillions) mentioned. Here are just a few proposals of the Act that should strike fear into all Americans:


LEGISLATIVE PROPOSAL FOR TREASURY AUTHORITY
TO PURCHASE MORTGAGE-RELATED ASSETS


Sec. 2. Purchases of Mortgage-Related Assets.

(a) Authority to Purchase.—The Secretary is authorized to purchase, and to make and fund commitments to purchase, on such terms and conditions as determined by the Secretary, mortgage-related assets from any financial institution having its headquarters in the United States.


Sec. 8. Review.
Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.




Today, Diane Francis in her column in the Financial Post titled “In the U.S. the monkeys guard the bananas” makes some interesting observations. The real attacks on the New York towers “have been coming from inside by the Capitalist Cowboys”. Making GS and Morgan holding companies completes the demise of all five Wall St. Banks. Paulson, the former Czar of Wall St. has a major conflict of social interest in taking any tough measures against the culprits that have been responsible for the financial Tsunami looming over the U.S. and global markets. He is one of them, beginning is career with Nixon’s sidekick John Erhlichson (Watergate) and culminating as the CEO and Chairman of Goldman form 1999 to 2005. He, along with the rest of the Bush Admin. are now bailing out the problems they created and they won’t attack their base as they leave Washington for Palm Beach and Palm Springs “with the gangs that got away”. I would like to point out here that there are those from the Clinton Admin. That should also be on the hook, such as gold basher, “strong dollar Rubin” and others. Did someone mention Greenspan?


There are many who should have their feet held to the fire as they profited greedily from allowing the capital derivatives monster to grow into Buffet’s “financial weapons of mass financial destruction”. Ms Francis believes that “lawsuits and handcuffs and… RICO prosecutions are in order”, that there should be mass arrests. She also thinks that “taxpayers should be able to seize all the assets of the managers, of all the managers, directors and executives who oversaw this conspiracy of recklessness for years” and that there should be “induced foreclosures in Palm Beach and Palm Springs of Wall Streeter’s mansions, stock portfolios, Porches and private jets.”


I briefly observed part of the statement of the Senator from Ohio this morning commenting on the more than palpable anger emanating from so many of his constituents, that one man had driven over seven hours to meet with him to express his anguish and concerns. Observing the somber expressions of worry so apparent on the faces of so many of those Senators today truly struck almost a chord of fear. One could see that there was every effort being made to disguise negative emotion towards those being interviewed. It seemed to have very little effect on Paulson. That’s when I turned off the TV.


In an aside to all Canadians, we should not delude ourselves into thinking that all of the above does not and will not have serious fallout here. It is only delayed. As the above hearings are being played out, Canadian regulators, politicians, bankers, brokers and others are, and have been erring through omission, ignorance and illegality. Many investors have been and are complaining about apparent “inconsistencies” in our markets, notably the JPMs and specifically naked shorting. There are no satisfactory or accountable replies to such complaints at this time, at least those forwarded by me. We have no idea of what role Mr. M. Carney or the Bank of Canada (at arm’s length to our Government.) has played, or is playing in the above globally infected derivatives markets, now estimated by the Bank of International Settlements to be well over seven hundred and fifty TRILLION dollars. Canadian banks are exposed by $800 billion through credit default swaps. They rely on their guarantors, such as AIG, to back them during a crisis. “Canadian banks and financial institutions are exposed to AIG in several ways, with one of the greatest sources of risk being their reliance on opaque credit markets that link lenders in complex was through an elaborate system for sharing risk in which AIG plays a central role.” (Financial Post, FP1, Se. 17/08) The Royal Bank alone has $300 billion notional exposure, many times its own value. As Jim Sinclair points out, when there is no counter party, it’s real dollars. TD has $197 billion exposure. I openly wonder at their seeming lengthy shenanigans in the trading of one junior’s shares, ECU on the TSE. They aren’t alone.


Suffice it to say, we investors in Canada are still in the dark and there are many factors that we should be urgently cognizant of. I have personally written many times to many authorities and have basically been ignored. That arrogance and off-handedness alone are red flags, and tells me there are some serious speed bumps ahead that will grow proportionately bigger with time and continued obfuscation. Ignorance, recklessness, and/or illegality on behalf of our bureaucrats , regulators, politicians, banks and brokerages is presently greasing the wheels of greed, arrogance, power and malfeasance as we “unaffected” Canadians plunge headlong into the wake of the U.S. juggernaut without a very small jacket.
 By bluejay

09/23/2008  12:13PM

Gold $892.40
Silver $13.17
Gold/XAU Ratio 6.11
Gold/Silver Ratio 67.69

It appears that the dark forces are reigning in the gold price following its recent quick advance in the general area of $900. It's apparent the governement's grip on gold prices isn't as well placed as it used to be with the latest enlistment of US banks in the continuing effort. From gold loans, to gold swaps, to bullion banks, to hedge funds, the government has tried everything to extinguish gold's demand.

Over the past 18 months the naked short selling tool has worked like a charm for the government in having all their cronies sell everything gold related to break public confidence in gold. Unfortunately as greed goes, the public played the leverage game with the metal and the shares and got severly burned when the dark side turned up the heat as three US banks started shelling the metal prices that ended with gold hitting $740 and Silver just north of the $10 level.

All is not lost, just time. The sad fact is the government will do whatever is necessary to keep the gold price checked. It will be quite interesting when inflation hits the hyperinflation stage where they will get the gold from or participants to aid in their efforts. The long term direction of a higher gold price CAN NOT BE STOPPED.

The only possibility that will never be attempted according to Mr. John Williams of shadowstatistics.com is:

1- Increase the individual tax to 44%, now.

2- Cut governement spending by 20%, now.

If we delay the costs go up to:

1- Increase the individual tax to 88%

2- Cut government spending by 40%.

Who has the stomach for that???

So, hyperinflation here we come.

The current figure being used to fix the financial dislocation in the US is $700 billion. How will this ever work with the world's outstanding derivative contracts far in excess of a quadtrillion, that's a thousand trillion dollar's worth. Now, size that up with the $700 billion bailout in this country to fix the problem and you quickly understand the magnitude of these potential failures greatly overshadows this tiny, if you can call it that, $700 billion figure.

$700,000,000,000

versus

$1,400,000,000,000,000

The $700 billion rescue plan only deals with 1/2000ths of the entire problem.

If you were a bookie what odds would you give to the proposed $700 billion figure fixing the potention exposure to the greater amount?

If you know of a better way to survive and keep your wealth undamaged without gold please share it.
 By bluejay

09/21/2008  8:47PM

Last on gold is $868.00

The following are observations and opinions from one of the best information sites on the web at agoracom.com under the stock ECU Discussion Forum.

Govt allows financial firms to raid individual accounts
Posted by: ESL on September 21, 2008 10:53AM

Precedent has been set that allows bankers to raid your personal accounts & use your lifetime savings to keep the ship afloat for a few more weeks. This is another example of authorities out of control that are overriding the rule of contract law, tearing up your investment account legal agreements with the banks and replacing it with laws that cater to bailing out the crooks who created this fine mess. This is the most utterly disgusting measure yet that shows how very broken the system is. The politicians and other scumbags at the helm don't give a hoot for your welfare and it's every man for himself when tshtf. On the other hand you can bet your last bar of Gold that members of tptb are busy squirelling away their savings outside of the US before Capital Controls are inevitably instituted in the not too distant future. Best of luck to all.


===============================

RAIDS OF INDIVIDUAL ACCOUNTS

This is so important a topic, that it deserves top billing!!! Hidden inside the AIG bailout funding package, surely hastily cobbled together, but carefully enough to include a totally corrupt clause, was a handy dandy clause that permits raids. The conglomerate financial firms are permitted at this point to use private individual brokerage account funds to relieve their own liquidity pressures. This represents unauthorized loans of your stock account assets. So next, if the conglomerate fails, your stock account is part of the bankruptcy process. Finally the corrupt USGovt and corrupt Wall Street houses are desperate enough to put into policy, stated by the US Federal Reserve, outlining the authorized raid of your money.
-------------------------------


Jim Sinclair warned us months ago to take physical possession of our stock certificates.

It's becoming clearer everyday that everyone must have a secure safe in their home.

Another point Mr. Sinclair has been repeating is that YOU MUST ELIMINATE ALL MIDDLEMEN BETWEEN YOU AND YOUR ASSETS.
 By bluejay

09/21/2008  5:15PM

Last on gold is $871.80

September 19, 2008

The Bi-Partisan Origins of the Financial Crisis
Shattering the Glass-Steagall Act
By WILLIAM KAUFMAN

If you're looking for a major cause of the current banking meltdown, you need seek no farther than the 1999 repeal of the Glass-Steagall Act.

The Glass-Steagall Act, passed in 1933, mandated the separation of commercial and investment banking in order to protect depositors from the hazards of risky investment and speculation. It worked fine for fifty years until the banking industry began lobbying for its repeal during the 1980s, the go-go years of Reaganesque market fundamentalism, an outlook embraced wholeheartedly by mainstream Democrats under the rubric "neoliberalism."

The main cheerleader for the repeal was Phil Gramm, the fulsome reactionary who, until he recently shoved his foot even farther into his mouth than usual, was McCain's chief economic advisor.

But wait . . . as usual, the Democrats were eager to pile on to this reversal of New Deal regulatory progressivism -- fully 38 of 45 Senate Democrats voted for the repeal (which passed 90-8), including some famous names commonly associated with "progressive" politics by the easily gulled: Dodd, Kennedy, Kerry, Reid, and Schumer. And, of course, there was the inevitable shout of "yea" from the ever-servile corporate factotum Joseph Biden, Barack Obama's idea of a tribune of "change"--if by change one means erasing any lingering obstacle to corporate domination of the polity.

This disgraceful bow to the banking industry, eagerly signed into law by Bill Clinton in 1999, bears a major share of responsibility for the current banking crisis. Here's the complete roll call of shame:

REPUBLICANS FOR (52): Abraham, Allard, Ashcroft, Bennett, Brownback, Bond, Bunning, Burns, Campbell, Chafee, Cochran, Collins, Coverdell, Craig, Crapo, DeWine, Domenici, Enzi, Frist, Gorton, Gramm (Tex.), Grams (Minn.), Grassley, Gregg, Hegel, Hatch, Helms, Hutchinson (Ark.), Hutchison (Tex.), Inhofe, Jeffords, Kyl, Lott, Lugar, Mack, McConnell, Murkowski, Nickles, Roberts, Roth, Santorum, Sessions, Smith (N.H.), Smith (Ore.), Snowe, Specter, Stevens, Thomas, Thompson, Thurmond, Voinovich and Warner. DEMOCRATS FOR (38): Akaka, Baucus, Bayh, Biden, Bingaman, Breaux, Byrd, Cleland, Conrad, Daschle, Dodd, Durbin, Edwards, Feinstein, Graham (Fla.), Hollings, Inouye, Johnson, Kennedy, Kerrey (Neb.), Kerry (Mass.), Kohl, Landrieu, Lautenberg, Leahy, Levin, Lieberman, Lincoln, Moynihan, Murray, Reed (R.L), Reid (Nev.), Robb, Rockefeller, Sarbanes, Schumer, Torricelli and Wyden.

REPUBLICANS AGAINST(1): Shelby.

DEMOCRATS AGAINST(7): Boxer, Bryan, Dorgan, Feingold, Harkin, Mikulski and Wellstone.

NOT VOTING: 2 REPUBLICANS (2): Fitzgerald (voted present) and McCain.

The House Democrats were no less enthusiastic in their endorsement of this invitation to plunder--the repeal passed there by a margin of 343-86, with the Donkey Party favoring the measure by a two-to-one margin, 138-69. Current House speaker Nancy Pelosi managed not to register a vote on this one, so great was her fear of offending her party's corporate paymasters even though she knew passage was a sure thing.

According to Wikipedia, many economists "have criticized the repeal of the Glass-Steagall Act as contributing to the 2007 subprime mortgage financial crisis. The repeal enabled commercial lenders such as Citigroup, the largest U.S. bank by assets, to underwrite and trade instruments such as mortgage-backed securities and collateralized debt obligations and establish so-called structured investment vehicles, or SIVs, that bought those securities. Citigroup played a major part in the repeal. Then called Citicorp, the company merged with Travelers Insurance company the year before using loopholes in Glass-Steagall that allowed for temporary exemptions. With lobbying led by Roger Levy, the 'finance, insurance and real estate industries together are regularly the largest campaign contributors and biggest spenders on lobbying of all business sectors [in 1999]. They laid out more than $200 million for lobbying in 1998, ' according to the Center for Responsive Politics. ' These industries succeeded in their two decades long effort to repeal the act. ' "

This lust for banking largesse is as wanton among Democrats as Republicans--right up to the current presidential campaign. According to the Phoenix Business Journal,

Obama and McCain . . . have accepted a substantial amount of campaign money from Wall Street bankers, investment and securities firms and their executives during this election cycle.

Investment firms have donated $9.9 million to Obama and $6.9 million to McCain this campaign thus far, according to the Center for Responsive Politics. Commercial banks have given Obama $2.1 million and McCain $1.9 million. Private equity firms and hedge funds have given Obama $2 million and McCain $1.4 million, according to CFRP.

Lehman Brothers, Goldman Sachs, JP Morgan Chase & Co., UBS and heavyweight law firm DLA Piper are among Obama's top contributors. JP Morgan acquired Bear Stearns with the federal government taking on as much as $30 billion Bear assets as part of the deal. McCain's top donor sources include Merrill Lynch, Goldman Sachs, Citigroup and Blank Rome and Greenberg Traurig LLP law firms.

So . . . the next time a mass-media-lulled Democrat ridicules Ralph Nader for arguing that there are few significant differences between the two major parties on the truly important issues, you might refer them to this atrocity, along with all the other ones.

William Kaufman can be reached at kman484@earthlink.net
 By bluejay

09/21/2008  3:24PM

Last on gold is $876.60.

India continues to take 30% of world gold production. That percentage should increase as it is looking more and more like gold production has already peaked out.


India's love affair with gold keeps going despite volatile prices
Module body

Sun Sep 21, 1:20 AM

NEW DELHI (AFP) - Pushpa Bhatia is in a dilemma as she scans the glittering gold offerings laid out on a showcase at a fancy jewellery store in the Indian capital.

ADVERTISEMENT

With the precious metal's price on a roller-coaster ride, she's wondering whether she should buy now or wait.


"Will the price go up or down -- you tell me," the sari-clad Bhatia says to the salesman, who responds with a shrug.


Last week, gold posted its biggest weekly gain in a decade, climbing by 13 percent to 864.70 dollars an ounce, as mounting credit turmoil pushed investors into safe haven assets.


But Bhatia can't wait too long -- India's marriage and festival seasons are approaching and she needs gold for both.


She has a 23-year-old daughter getting married in November and she likes to give small "auspicious" golden gifts for the Hindu calendar's biggest holiday of Diwali, or the Festival of Lights, in October.


India is the world's biggest gold consumer, importing 700 tonnes to 800 tonnes a year on average -- around 30 percent of global demand.


And higher prices won't stop Indians buying, said Suresh Hundia, head of the Bombay Bullion Association.


"Those who have marriage commitments will buy -- no matter what the rates," said Hundia.


Indian brides are traditionally bedecked in heavy gold jewellery -- seen as a family heirloom and also security.


With around 10 million marriages a year in the country of 1.1 billion people, wedding-related demand is huge, especially during the nuptial season between October and January and April and May.


"The idea of giving gold to the bride is it will bail her and her family out in times of crisis," said Ajay Mitra, managing director of the World Gold Council in India.


The gold given to a bride is known as "streedhan," or "woman's wealth."


In fact, said jewellery store salesman Devender Kumar, "most of the time the customers don't even look at the design -- they just look at the weight."


However, lifestyles are changing in urban areas.


Bhatia's daughter, Supriya, a newly minted accountant in tight trousers and an applique T-shirt, says she's bored with the metal.


"It's too heavy to put on," she says, screwing her face in disgust at an elaborate gold chain the salesman is looping around her mother's neck.


The vast array of consumer goods and trendy accessory jewellery to be found in India's cities have made gold a less sought-after item for many.

"For thousands of years women had very little personal wealth other than their jewellery -- they didn't have bank accounts," said Arvind Singhal, head of retail consulting firm Technopak.

"But now with the empowerment of women in urban areas, they want to spend their disposable income on cars, TVs, holidays, a new handbag," said Singhal.

Still, bride-to-be Supriya Bhatia knows she won't win the battle over her gold wedding jewellery as her mother orders her to sit and pay attention.

"It's a necessity to own gold if you're a woman," said her mother firmly.

And even though urban tastes are changing, India's overall gold consumption is unlikely to alter much in the foreseeable future, analysts say.

There is "a growing trend toward luxury goods rather than wanting to buy gold in urban areas," noted Suki Cooper, analyst at London's Barclays Capital.

But she said "the majority of gold consumption is in rural areas," where "that level of consumerism doesn't exist so India is likely to stay a very important gold consuming nation."

In the countryside, where the banking system is still poorly developed, gold rules as a medium of financial exchange and secure savings vehicle.

"Beyond the big cities, gold is something which has intrinsic value for consumers," said the Gold Council's Mitra.

"They know they will never get cheated. It's an insurance."
 By bluejay

09/21/2008  3:23PM

India continues to take 30% of world gold production. That percentage should increase as it is looking more and more like gold production has already peaked out.


India's love affair with gold keeps going despite volatile prices
Module body

Sun Sep 21, 1:20 AM

NEW DELHI (AFP) - Pushpa Bhatia is in a dilemma as she scans the glittering gold offerings laid out on a showcase at a fancy jewellery store in the Indian capital.

ADVERTISEMENT

With the precious metal's price on a roller-coaster ride, she's wondering whether she should buy now or wait.


"Will the price go up or down -- you tell me," the sari-clad Bhatia says to the salesman, who responds with a shrug.


Last week, gold posted its biggest weekly gain in a decade, climbing by 13 percent to 864.70 dollars an ounce, as mounting credit turmoil pushed investors into safe haven assets.


But Bhatia can't wait too long -- India's marriage and festival seasons are approaching and she needs gold for both.


She has a 23-year-old daughter getting married in November and she likes to give small "auspicious" golden gifts for the Hindu calendar's biggest holiday of Diwali, or the Festival of Lights, in October.


India is the world's biggest gold consumer, importing 700 tonnes to 800 tonnes a year on average -- around 30 percent of global demand.


And higher prices won't stop Indians buying, said Suresh Hundia, head of the Bombay Bullion Association.


"Those who have marriage commitments will buy -- no matter what the rates," said Hundia.


Indian brides are traditionally bedecked in heavy gold jewellery -- seen as a family heirloom and also security.


With around 10 million marriages a year in the country of 1.1 billion people, wedding-related demand is huge, especially during the nuptial season between October and January and April and May.


"The idea of giving gold to the bride is it will bail her and her family out in times of crisis," said Ajay Mitra, managing director of the World Gold Council in India.


The gold given to a bride is known as "streedhan," or "woman's wealth."


In fact, said jewellery store salesman Devender Kumar, "most of the time the customers don't even look at the design -- they just look at the weight."


However, lifestyles are changing in urban areas.


Bhatia's daughter, Supriya, a newly minted accountant in tight trousers and an applique T-shirt, says she's bored with the metal.


"It's too heavy to put on," she says, screwing her face in disgust at an elaborate gold chain the salesman is looping around her mother's neck.


The vast array of consumer goods and trendy accessory jewellery to be found in India's cities have made gold a less sought-after item for many.

"For thousands of years women had very little personal wealth other than their jewellery -- they didn't have bank accounts," said Arvind Singhal, head of retail consulting firm Technopak.

"But now with the empowerment of women in urban areas, they want to spend their disposable income on cars, TVs, holidays, a new handbag," said Singhal.

Still, bride-to-be Supriya Bhatia knows she won't win the battle over her gold wedding jewellery as her mother orders her to sit and pay attention.

"It's a necessity to own gold if you're a woman," said her mother firmly.

And even though urban tastes are changing, India's overall gold consumption is unlikely to alter much in the foreseeable future, analysts say.

There is "a growing trend toward luxury goods rather than wanting to buy gold in urban areas," noted Suki Cooper, analyst at London's Barclays Capital.

But she said "the majority of gold consumption is in rural areas," where "that level of consumerism doesn't exist so India is likely to stay a very important gold consuming nation."

In the countryside, where the banking system is still poorly developed, gold rules as a medium of financial exchange and secure savings vehicle.

"Beyond the big cities, gold is something which has intrinsic value for consumers," said the Gold Council's Mitra.

"They know they will never get cheated. It's an insurance."
 By Hans Kummerow

09/20/2008  5:21AM

Bailout plain will not be in place before Summer of 2009

Just sit down for a minute and try to write down the basic rules for a nation-wide bail-out-plan for financial institutions - it is a terrible job. And Mc Cain's refusal of the plan actually means, the present administration will not be able to resolve the issue before election day.
If Mc Cain wins, he will kill the issue. If Obama wins he will have to consider the justice-issue he stressed today. Not an easy job either.
Chances are: This bail-out-plan will never become effective at all.
 By gfxgold

09/19/2008  1:24PM

"In Defense of Gold." An article written by Christopher Barker. Read it and then make a comment about it if you want It is located at: http://www.fool.com/investing/small-cap/2008/09/12/in-defense-of-gold.aspx
 By bluejay

09/19/2008  8:24AM

Last on Gold is $861.90

Listening to a calm, collected and experienced mind is preferred to bureaucrats who who are croud pleasers until their house starts to burn down.

The appropriate question is, if these people are so smart why did they not heed warnings years ago from Warren Buffett when he was widely quoted in the media as saying, "OTC derivatives are weapons of mass destruction?"

And these are the same people that are going to fix the problem????

Posted On: Friday, September 19, 2008, 9:49:00 AM EST

Potential Infinite Bailouts To Explode Money Supply

Author: Jim Sinclair

Dear Friends,

Today's reported potential infinite bailout of all and any portends, if adopted, is the largest increase in dollars outstanding since the Jurassic Age.

It closely models actions undertaken regarding the production of currency liquidity seen in the "Weimar Republic."

It is reported now that more than 1000 hedge funds are on the rocks. This has the potential for a significant financial impact.
The only way to hide the numbers from the statistics produced by the suspected actions of the Fed is to value the indebtedness purchased at 100%, claiming a wash transaction.

The only conclusion is that when the smoke clears and the advertised actions have been adopted, nothing more dollar negative than this has ever occurred due to the potential expansion of T bills and therefore dollar supply explosion.

Gold is the only currency with no liability attached to it which, as you have seen recently, will be selected as the currency of the people.

Respectfully yours,
Jim Sinclair
 By bluejay

09/18/2008  11:13PM

Last of gold is $851.90.

Thanks Mike for your kind words. I can't take all the credit as I am just a student of Mr. James Sinclair's at http://www.jsmineset.com.

The following article caught my attention and is well worth reading.

Investing in Chaos
The Storm is Here
Darryl Robert Schoon
Posted Sep 17, 2008

All Swans Are Black

Saturdays and Sundays
Used to be fun
Weekends were holidays
Perhaps time in the sun

But now it's all changing
Changing for worse
As bankers are draining
The public's thin purse

Northern Rock Fannie Mae
Freddie Mac and Bear
What's next we all wonder
Who will it be where?

Lehman's a lemming
As was Bear Stearns
WaMu AIG
They're all gonna burn

Only one thing is for certain
And that will be when
The next bank that fails
It'll be on a weekend.

Last weekend started early for Timothy Geithner, President and CEO of the New York Federal Reserve. At 6pm, Friday, Geithner called an emergency meeting to discuss the possible collapse of Wall Street investment bank, Lehman Bros.

The troubles of Lehman Bros had worsened during the previous week and the current Fed playbook dictated a solution be found on the weekend to calm financial markets opening Monday; but, this weekend, the Fed playbook came up empty, Lehman Bros. declared bankruptcy.

It's official. The storm is here. In How To Survive The Crisis And Prosper In The Process, I predicted a global financial crisis would happen where real estate prices would fall 40-70%, stock markets would crash and a Great Depression would result.

Eighteen months later, the median price of housing in California is down 40 %, global stock markets are in disarray and although another depression has yet to begin, this weekend's failure of Lehman Bros combined with the pressured sale of Merrill Lynch and the prospect of an AIG collapse are clear signs that we are now that much closer to the predicted end.

This is the end of a system. It is not a cyclical correction. It is not a market pullback and it is not a repricing of risk in an otherwise resilient marketplace. We are witness to the end of an economic system based on credit-based paper money that began 300 years ago in England. All beginnings have endings - and that we didn't expect it to end doesn't mean that it wouldn't.

THE BANKERS' BEGGING BOWL

Because Lehman Bros.' CEO Richard Fuld received a $22 million bonus for his "work" in 2007 or perhaps because Fed officials had been openly criticized at their annual Jackson Hole soirée for their continuing bailouts of US investment banks, last weekend US officials unexpectedly informed Wall Street bankers that a government bailout of Lehman Bros. was not possible.

There is no political will for a Federal bailout...
Timothy Geithner, September 12, 2008

Geithner's statement really means that Wall Street no longer possesses the requisite political muscle to extract more US dollars from a bankrupt electorate. Last weekend, Wall Street bankers finally understood that their privileged position in the welfare line of US government largesse had come to an end. This time, the banker's begging bowl would remain empty.

With their co-conspirators in the US government no longer able or willing to provide additional US guarantees, the position of investment banks has now become increasingly fragile; and their newly hatched liquidity plan concocted by the bankers over the weekend is another indication of just how fragile their system is.

THE BANKERS' NEW PLAN

Last Saturday when the bankers realized they could no longer depend on government money to bail them out, they came up with a plan. Granted, they did so with only one night's sleep but nonetheless there appears to be a significant flaw in their thinking.

This is the plan:

Sept. 14 (Bloomberg) -- A group of banks including Bank of America, CitiGroup and JPMorgan Chase & Co. are putting up $70 billion for a borrowing fund aimed at providing liquidity... Each participating financial firm will provide $7 billion to establish the fund and have the ability to borrow up to a third of the total. Other banks include Barclays Plc, Credit Suisse Group AG, Deutsche Bank AG, Goldman Sachs Group Inc., Morgan Stanley, Merrill Lynch & Co. and UBS AG. The pool could expand as other companies join.

Now, let's get this straight. Ten banks put up $7 billion for a total of $70 billion. Because any bank can withdraw up to $23.3 billion, if three banks take $23.3 billion each, there will be nothing left for the others. Am I missing something?

There is nothing wrong with the plan, per se. The flaw lies in the flawed character of the participants. These are investment banks and if investment banks can exploit a situation, they will do so. That's what investment banks do for a living, they exploit situations for their own advantage in order to maximize profits.

Last year when two Bear Stearns highly leveraged funds were in danger of failing, Bear Stearns came to the "rescue" of one of its funds and lent it more capital, albeit with the caveat that Bear now had first claim on the fund's assets. Then, when the fund collapsed shortly thereafter Bear Stearns exercised its now first-in-line rights to all the assets.

Since self-serving behavior is common among investment bankers, it will be interesting to see how the bankers' $70 billion fund will fare. After the first withdrawal, there may be a "bank run" on the remaining assets by the remaining banks - a real life version of what will be "the Banker's Dilemma".

A FRACTIONAL RESERVE SAFETY NET

The investment banks' $70 billion liquidity fund is predicated on much the same premise that fractional reserve banking is based. While it is understood there may not be enough in the fund to cover all needs, it is assumed that not everyone one will need their funds at the same time.

This thinking/sic assumption is the basis of today's fractional reserve banking system; because, as in the banker's "liquidity plan", there is not enough money in US banks in the event of significant withdrawals by savers.

There is $6.84 trillion on deposit in US banks; but US banks have only $273.7 billion cash on hand. The banks cannot possibly pay back depositors all their money as only 4 % of depositors' funds are actually available. The rest has been loaned out, i.e. to real estate developers, etc.

The safety net of both bankers and depositors may prove inadequate in the days ahead. Be forewarned.

INVESTING IN CHAOS

Investing in these times is investing in a time of chaos; and gold and silver, traditional havens, appear to have failed in that role, both having sustained significant losses of late. But don't dismiss gold and silver so quickly. Their day is coming.

The recent correction of gold and silver was not unexpected. In my book, I noted that in 2006 UBS had predicted a commodities sell-off - an avalanche sale of all commodities - could occur and take down gold in the process.

Page 48, from How To Survive The Crisis And Prosper In The Process:
In the June 5, 2006 article, UBS also warned that while the long term outlook for gold was decidedly positive, there was an intermediate risk of a global economic downturn that would drag "gold down in an avalanche sale of all commodities"; an avalanche that gold would ultimately survive before embarking again on a strong upward path.

The global turndown predicted by UBS in 2006 is underway; and the current sell-off of commodities, an avalanche sale of all commodities, may well be the event predicted by UBS. That such is occurring means we are now entering what I call the third and final stage of economic-collapse.

No one knows how long this stage will be. It is clear, however, from the recent takeovers of Fannie Mae and Freddie Mac, and the collapse of Bear Stearns and Lehman Bros. that there has been a seismic shift recently in the global financial landscape.

This stage is the last period in which investments can be profitably re-allocated to take advantage of what will soon happen, a financial tsunami the likes of which have never before been seen. A deflationary collapse with hyperinflation is only one possibility. There are more.

Professor Fekete's final session of Gold Standard University Live will take place in Canberra, Australia, November 11-14. I will be joining Professor Fekete and Tom Szabo in discussing the gold and silver basis as a trading strategy in this critical period, see feketeaustralia@yahoo.com.

There are proven ways to prepare for what is to come. In matters of money trust in gold and silver; in matters of the world trust in the perfidy of man; and in everything, trust in God.

Until humanity changes, history will not.

blog:
http://www.posdev.net/pdn/index.php?option=com_myblog&blogger=drs&Itemid=81

Darryl Robert Schoon
email: info@drschoon.com
website: www.drschoon.com
website: www.survivethecrisis.com
Schoon Archive
 By Michael Miller

09/18/2008  12:18PM

Sometimes a long memory can be useful when thinking about Bluejay's credibility or my credibility or writers who offer up their thought on gold, investments and the future. I just took a moment break from my executive chores, read the last entry and clicked on page 17 of this topic. Curiosity. Up came 2/06/2003 and I quote, "I believe from reading many related articles that all this debt will eventually lead us into something much larger than the "soft patch" Alan Greenspan says the country is currently in. I believe we may have a credit crisis in this country and people will want safety and that safety will come from something that carries no debt and that is gold." Nice call, Bluejay. Nice call five years ago.
 By bluejay

09/18/2008  8:16AM

Last on gold is $873.40

The Chuckle Of The Day

Then for the laugh of the day...the CEO of Goldman Sachs was complaining to the CFTC that illegal short selling was the reason his stock was collapsing. What goes around, comes around!!!
 By bluejay

09/17/2008  7:35PM

Gold $884.60 up $106.90
Silver $12.37up $ 1.92
Gold/XAU Ratio 6.73
Gold/Silver Ratio 71.24

Big Buyers in Bankruptcy Proof Items Today

Wall Street is burning with some people starting to care. The Feds saved AIG from going belly up today with a near to $90 billion cash infusion.

The bailout this time is being called a bridge loan. Yesterday, the Feds were using consevatorship and before that they were naming the bailouts only 28 day loans.

You can paint this current dire financial condition in the US any color you want, just let's not disturb the natives.

Well, some people are starting to figure it out contrary to all the spin that's being delivered to us, that everything is not under control and it is getting worse.

The 90 day government bond market has been overwhelmed with buyers like the market has never seen before. Current yields for the 90 day paper are at an astonishing 0.3%. It wasn't too long ago that the paper was yielding 5%.

Today, people want bankruptcy proof items. Gold and the 90 day paper has seen unprecedented demand. Gold at this writing is up over $100. This event by itself will get world attention.

The engineered forced sell-off recently of gold and silver was an desperate frightened attempt by amateurs running the government. Mr. Greenspeak will have cost this country trillions of dollars by allowing OTC derivatives not to be regulated. What a jerk.

Treasury Secretary Paulson is probably ordering extra printing presses right now to print us out of this historic financial mess. Weimar Republic, here we come.

Fasten your seat belts! The currency supply is going to the moon and with it rapid price inflation for consumers.

Within this increasing meltdown of OTC derivative related company's, hard assets without attachment to debt will be the winners. Even with some debt, if it's gold related you will have a chance.

How long do you figure it will take the public to discover junior and exploration gold related companies? The days ahead could get dicey for investors and folks with their money on deposit at banks.

One thing you should always remember in times like these: gold and the other precious metals are your best friends and have served that purpose for 5,000 years while all attempted monetary experiments absent of gold convertibility have failed from government to the next over this time span.
 By Michael Miller

09/17/2008  10:55AM

As always, Your entries are interesting. Two entries ago you said that 5% of production of gold goes to industrial use. Gold use continues to increase beyond jewelry: electronics, medical and research. Perhaps someone has the time and ability to dig into the industrial use quantities. I am confident that it is greater than 5%.

Oops, I forgot how gold is helping the global environmental movement in reducing energy consumption. Go miners!
 By bluejay

09/16/2008  7:08PM

Last of gold is $781.20

A financial cataclysm on the way?

Posted On: Tuesday, September 16, 2008, 3:33:00 PM EST

In The News Today

Author: Jim Sinclair

Dear CIGAs,

The quoted amount of OTC derivatives on Lehman's books are not notional value, but some silly mark to no market. The real number is trillions. When either party to an OTC derivative fails the value of that derivative instantaneously become the size of what was previously called notional value. With one quadrillion, one thousand one hundred and forty four trillion (BIS) in notional value, there is NO means to stop this financial cataclysm.

The s*** has hit the fan because trillions of dollars of OTC derivatives failed Monday.

The entity to fail is not the winner on those fraudulent pieces of paper but the loser. Otherwise it would not have failed.

Many other counter parties to those derivatives have fallen into potential bankruptcy.

The long spoken about "domino effect" is active and I now believe the Fed did not consider how a derivative becomes full value (formerly called notional value) when one side goes into bankruptcy.

Yes, Pandora's Box opened Monday morning.

For years I was laughed out when this present condition was clearly described.

Gold is going to $1200 and $1650. Laugh at me again if you must.

Those that demand a date already have one - on or before January 14th, 2011.

This is it and it is now.

The greatest damage done to gold shares and gold came directly from those that were over-margined. Yes shorts got it down but those on margin got them here. Shame on you who demanded margin!

Continue to ignore all the means of protecting yourself and you do not deserve to be protected.

If you fail to retain proper parties such as an attorney to read your custodian agreement you do not deserve to be protected. Cheap out NOW and you crap out later, and that won’t be much later…
 By bluejay

09/15/2008  2:38PM

Gold $783.50 Up $19.80
Silver $11.00 Up $ 0.16
Gold/XAU Ratio 6.60
Gold/Silver Ratio 71.23

I guess now we understand why the government wanted gold down in a hurry, the pending financial mess that Wall Street is now in with both feet.

For months you have been informed of how dangerous OTC derivatives are and now we are finding out first hand what Warren Buffett said years back which is now true, "they are weapons of mass destruction."

The old-line brokerage firm of Lehman Brothers is now bankrupt. Merrill Lynch, which should be considered worthless, is being taken over by the second largest OTC derivatives holding bank in the US, the Bank of America(BAC). The takeover price makes no sense as Merril is technically bankrupt if they were ever to value their OTC derivatives holdings correctly.

Someone knows something is wrong. The takeover price for stock only, more paper floating around without an anchor to gold, is $29 a share. No cash is involved, just an entry for a different colored certificate.

Funny thing, the last on MER on the NYSE is $18.81 not anywhere near to $29 takeover price. It sounds like the BAC shareholders are not expected to approve the deal. Would you?

Already, Bank of America's shares are down $6.72 at $27.02. It's a bad deal for BAC shareholders. The Fed, the Treasury and some kingpin bankers seem to have forgotten they are not the majority of BAC's shareholders. This is just a proposed deal and nothing more.

It looks like Merrill will follow in the footsteps of Lehman. The price activity on Merrill and Bank America says one thing, people want out.

The gold price looks to have put in a major intermediate low at $740 only days ago. The price of silver went down from over $21 to somewhere near $10.50.

The current ratio on gold to silver is 71.23 which is the highest for sometime. All this weakness is being brough to you by three large US banks and a handfull of questionable big short sellers with the blessings from the CFTC who refuse to say, "anything is wrong." Oh I forgot to mention, the CFTC is a member of the Plunge Protection Team also know as the MMM(Mighty Market Manipulators).

The PPT has a good reason to hold down the silver prices as there is five times more gold above the ground than there is silver. What?? Yes, this is true according to Jim Butler the expert on silver. So, silver is the wildcard with the potential to explode in price at a far greater percentage than gold. This is what fiat producing currency central banks fear the most, for the public to take charge of the silver market and bring back silver as a monetary metal. This would greatly undermine any fiat currency.

Look what happened to Bunker Hunt when he tried to take charge of the small silver market in the early 80's. The governement stepped in with the CFTC banning on the US futures exchanges all purchases. This creamed Bunker and sent the price spiralling south.

If ever there were a manipulated market it is the silver market. Having a cash market set up for the public is wishful thinking. Already, suspected intervention is taking place behind the government's curtain of secrecy to withhold the supply of newly minted silver bullion coins, mainly because it's in short supply. Call it anything you like, it's happening. The mint says there is a shortage of blanks to account for the dry-up in supplies. If you believe them they your mind is being manipulated according to their plan.

You see, silver is 100% consumed by industry, mainly for jewelry, industrial uses and some left over for silver bars and bullion coins, if possible. In the case of gold, only 5% is used up by industry and the rest just accumulates above ground.

Currently, not much silver is left over for bars and coins and the public is feeling the pinch at their local coin stores by having to go on a waiting list. No more cash and carry. It's now, cash and wait. Never put a middleman between you and yous assets. You can still do cash and carry on e-Bay but with a premium to silver's last sale as a result of the silver shortage.

Here's something that doesn't find its way in the media: the above the ground gold holdings are at a 250 year high while the above the ground holdings of silver are at a 250 year low. Now we know why the silver market is manipulated, so the public doesn't find out and want it more.

One thing is painfully clear, the government uses all of its resources and more just to hold back the true value of silver.

Just like the gold price was held down to buffer it from the continuing meltdown to hit Wall Street today to make fiat currencies appear to look better. So too will the price of silver be temporally held back to restrain the public from making it a competing monetary metal and a confidence breaker to any fiat currency during these continuing financial crises.

Recently, a banking analyst stated there there will be from 125 to 150 more bank failures in this country before the whole thing is over.

With a last sale on silver at $11, one doesn't have to possess that much of an imagination to grasp that silver's potential to trade significantly higher is just a matter of time.

Jim Sinclair has stated that $1,650 on gold is coming in 2011. Premiums are starting to build up in the bullion coins now for people not wanting to wait for new supplies, if that ever does happen.

You see, that is the trick that they are trying to use on you to prevent your purchase today. Face it, the silver bullion supply channels have been bent to slow down or cut off silver bullion flow. The days of buying silver with a slight premium are over, especially at these levels.

The gold and silver markets should be much higher today but instead the government just goes on killing the messengers left and right.

In the Patriot Act it states that all gold valued at two times more the last sale and less is considered bullion. Will they come for our gold? If they do, everything above the value of twice gold's last price will immediately jump in premium, including ownership in all gold realted companies.

Large numbers of the public have been chased from their gold stocks recently. Who has been buying? Remember, follow the money? Who has been allowing all these naked short sellers to bring the gold related companies down on their knees? Who has been influencing regulators to look the other way?

Who has been buying silver and the silver related companies during this criminal price suppression scheme? If you continue holding on to the horn of this precious metal's bucking bronco you, too, will be a survivor.

Good luck!

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