Gold Enters Major Bull Market
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|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
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.
|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
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 firstname.lastname@example.org.
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.
Darryl Robert Schoon
|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.
|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!!!
|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.
|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!
|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
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…
|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.
|I'm told and I've read that one
country, India has stepped its
purchases of gold for jewelry
and other uses.
|Gold $742.90 off $9.10
Silver $10.50 off $ 0.12
The real reason commodities are tumbling
Article Comments JOHN HEINZL
Globe and Mail Update
E-mail John Heinzl | Read Bio | Latest Columns
September 10, 2008 at 6:00 AM EDT
To hear Donald Coxe tell it, the commodity selloff ripping through Canada's stock market is no accident. It is the result of a deliberate, brilliantly executed plan hatched at the highest levels of the U.S. Federal Reserve and Treasury.
Mr. Coxe is no paranoid conspiracy theorist. As the chairman and chief strategist of Harris Investment Management in Chicago, he is one of the most respected investment authorities in North America. He also happens to have lost about 10 per cent of his personal wealth in the commodity rout, which came at the worst possible time for his Coxe Commodity Strategy Fund that started trading in June.
“This has done more damage to my personal wealth than anything in the last 20 years,” he said in an interview yesterday. But he has too much respect for how the U.S. authorities engineered the collapse in commodities – a move he said was necessary to shore up the global financial system – to be bitter.
“My attitude is, goddamn it, they're good … it was brilliant.”
To understand why commodities are plunging now – the S&P/TSX plummeted another 488 points yesterday – you have to go back to mid-July, when the U.S. Federal Reserve and Treasury first announced steps to support mortgage giants Fannie Mae and Freddie Mac.
The move, which ultimately led to the Treasury taking control of Fannie and Freddie this week, touched off a chain-reaction of market events that culminated with the wrenching decline in commodities.
According to Mr. Coxe, the Fed's ultimate goal was to trigger a rally in financial stocks, which would, in theory, help banks hammered by the credit crisis raise fresh capital and repair their balance sheets. To accomplish this, the decision to support Fannie and Freddie was deliberately announced on a Sunday, which had the effect of maximizing the reaction from thinly traded financial stocks on overseas markets.
Because many hedge funds were using massive leverage to short financials and go long on commodities, when North American markets opened and banks initially rallied, the funds were forced to cover their short positions.
At the same time, the U.S. dollar was rallying because the risk of holding Fannie and Freddie paper had diminished. The rising dollar, in turn, made commodities less attractive, giving funds that were already scrambling to cover their financial shorts another reason to dump oil, grains and other commodities.
The losses were swift and dramatic. On the Friday before the July 11 announcement, crude oil closed at $145.18 a barrel. Over the following five days, it plunged 11 per cent. “Leverage was being unwound dramatically,” Mr. Coxe said on a conference call last week. “We had a true panic.”
As oil and other commodities were tumbling, fears about the slowing global economy were mounting, giving resources another push downhill. This was also in keeping with the Fed's wishes, because lower commodity prices would help quell fears about inflation.
Mr. Coxe has no proof that the Fed and Treasury acted in concert to boost financials and sink commodities. He is basing his assertions on conversations with hedge fund managers and on years of watching financial markets. “There's no doubt whatever in my mind” about what happened, he says.
The future is less certain, however. Now that Freddie and Fannie have been nationalized, the credit crisis is still very much alive and financial stocks are looking as shaky as ever. As for commodities, once the current storm passes, Mr. Coxe is confident they will recover.
Coins dealers are continuing to report that their bullion silver coin supplies continue to be exhausted due to unprecedented demand.
The price of silver is down 50% over the period of a few short months. I suspect that officials are clogging supply channels to stymie CD withdrawals. Isn't it interesting that with an annual production level of newly mined silver at 600,000,000 ounces that there is a physical shortage?
The current ratio of 80,000,000 ounces of world gold production to silver's is 7.5. Also, there is less available supplies of silver compared to gold supplies as silver is mostly consumed by industry and gold is mostly retained in jewelry production and bars and collector bullion coins. In the market today, supposedly, you can buy silver at the rate of 70.80 ounces compared to each ounce of gold. Does this make any sense?
No wonder there is an apparent silver shortage just with this high spread between the two, aside from the other consideration. Believe it or not, there are spread traders currently buying silver futures contracts and shorting gold contracts at the moment.
When the spread closes gold futures are bought back and silver contracts sold out for a profit.
Gold Continues to be stressed lower today by hedge funds and the local miscreants. We are witnessing just another historic shakeout.
Jim Sinclair has stated that no one could have foreseen this rapid collapse in the gold price as it, basically, was an engineered event by the government. Jim also said that something very big is coming but can't pinpoint yet.
|Gold $760.50 off $15.50
Silver $10.92 off $ 0.32
Gold is like a retreating army being chased by the Plunge Protection Team, the hedge funds and the participating banks. Great efforts are being made to take gold lower as fast as possible to break confidence in it and keep funds in the banking system.
Millions and millions of dollars have been permanently lost in the banks by deposits who thought their money was safe. The financial institutions that lost a portion of their depositors wealth are now getting bailed out with our money. Does that make any sense?
And with some folks who had bought gold and silver for protection, they now see the same people that have and continue bailing out their buddies beating down those metals with a heavy club. Does that make any sense?
The brave ones are hanging on to their metals and the related companies not being intimidated by this historical farce. The really brave ones are buying gold and silver.
When do we reach peak gold and silver production? What will happen to the metal prices then? In the future, the wealthiest people in the world will be the citizens of India.
We are already in a transitional shift in the world's wealth where U.S. citizens are destined to slide lower in their comparable per capita standings. India's populace continues to buy more and more gold as prices sink lower and lower. Who do you think will be the ultimate winner: The people of India or the people of the U.S.? India will have piles and piles of gold while all we'll have is piles and piles of fiat paper bills.
The great orchestrators of this shame in creating mountains and mountains of newly issued money(more and more inflation) in bailouts for the rich and in the process attempting to destroy gold's value are dealing from the bottom of the deck.
Some recent comments from Mr. Jim Rogers:
US Is "More Communist than China": Jim Rogers
08 Sep 2008 | 05:28 AM ET
The nationalization of Fannie Mae and Freddie Mac shows that the U.S. is "more communist than China right now" but its brand of socialism is meant only for the rich, investor Jim Rogers, CEO of Rogers Holdings, told CNBC Europe on Monday.
"America is more communist than China is right now. You can see that this is welfare of the rich, it is socialism for the rich… it's just bailing out financial institutions," Rogers said.
"This is madness, this is insanity, they have more than doubled the American national debt in one weekend for a bunch of crooks and incompetents. I'm not quite sure why I or anybody else should be paying for this," Rogers told "Squawk Box Europe."
"You certainly gonna see a huge jump in any financial institutions which owned a lot of Fannie [FNM 1.04 0.05 (+5.05%) ] or Freddie [FRE 0.87 -0.01 (-1.14%) ] … because they don't have to worry about going bankrupt all of a sudden," Rogers said.
"Bank stocks around the world are going through the roof, that's 'cause they've all been bailed out. You don't see the homeowners in Kansas going through the roof 'cause they're not being bailed out," he added.
"A Huge Mess"
However, despite the rally in Asian and European markets, the decision to take over Fannie and Freddie is likely to cause more volatility and needs careful consideration by investors, according to Rogers.
It's rarely good to jump in a moving bus and right now you got a lot of buses moving. I might short some more investment banks in the US, depending on how they rally over the next week, but other than that, I'll just sit and watch," he said.
Rogers, who is short on U.S. bonds, said these are likely to fall while commodities may rally. The two government-sponsored enterprises don't have good loans on their books, because "everybody else took the good stuff and dumped the bad stuff onto Fannie and Freddie," he said.
From 2010, Fannie and Freddie will have to shrink their portfolios by 10 percent a year until they reach $250 billion, to reduce the risk to the taxpayer, according to the Treasury plan. But this may put additional pressure on the housing market, Rogers said.
"That's going to also ensure that house prices continue to go down. It's going to be harder and harder to get a mortgage."
Investors should not pin their hopes on this year's presidential election for a solution to the problems, as none of the candidates is likely to find one, Rogers said.
"This is a big huge mess and neither one of them has a clue what to do next year. It's going to be a mess."
© 2008 CNBC.com
|Gold $783.90 off $17.60
Silver $11.68 off $ 0.38
Gold/XAU Ratio 6.67
Gold/Silver Ratio 67.11
Kill The Messenger
The continuing OTC derivatives disaster is dragging down more and more financials as the Plunge Protection Team(PPT) sweats it out day and night creating unprecedented amounts of fiat money for the bailouts along with daily calls to their bullion banks to sell, sell and sell more gold.
Selling gold to cloak failures of a central bank has never been successful over the long term. Our Fed's failure was Alan Greenspan's position while he was chairman that, the derivatives market didn't need regulation. James Dines some time ago referred to Alan Greenspan as a twit. Alan Greenspan, you are a twit for your stupidity.
Remember England's Gordon Brown? He was instrumental in selling a great portion of his country's gold under $300 an ounce even as the populace there protested. Brown stated that investing in currencies was better than holding gold. Yea, sure, great move Gordon.
Remember all the gold that our country gave away or indirectly sold when the Fed in this country was being questioneds by foreign holders of their dollar holdings up until the time Nixon closed the gold/dollar exchange window in 1971?
Throughout history central banks have mostly sold and attacked gold, that's what they do when their currency expansion experiments start to fail. Or, when something starts sapping the system which leads to failures like the out-of-control OTC derivatives.
This is what we can expect over the short term from the PPT concerning gold:
When a major institution or institutions(Fannie Mae & Freddie Mac) fail gold will be weak preceding the event and following for an undetermined short time period.
When a medium to large sized bank fails on Friday, most likely, gold will be weak for over a shorter time frame.
In between failure notices gold will bounce back until the next failure or failures when prices are expected to be manipulated lower.
Somewhere along in time the PPT will run out of ammunition to control gold prices and we will have liftoff. Jim Sinclair is still looking for a minimum of $1,650 on gold.
There could be a problem along the way for holders of the gold bullion. If the financial meltdown continues to greatly expand, the Treasury may make it illegal for Americans to hold gold, call it all in, just to stop the dollar from collapsing. This is a possibility, although some say it won't happen.
Following the 20% plus drop in gold over the last two months, if the Treasury gets desperate enough, who knows what's coming?
Jim Sinclair stated yesterday that very large amounts of reserves (and other assets or more IOU's) were committed in contolling markets to make it appear that the problem was solved with the government's takeover of Fannie Mae and Freddie Mac.
The 21st century belongs to China and maybe, India. Their treasuries will be built up with significant increases in gold reserves. As mentioned a while back, China will soon be the number one world producer of gold and don't expect them to export much as they build up their reserves. Where will the gold come from to meet world demand as South Africa and Australia's output continues to decline?
I just hope that the gold in my safety deposit box doesn't end up in the coffers of the Chinese as payment to cancel out some of our international debt. Don't forget, in England some months back private and secure safety deposit boxes were opened by government representatives. Could it happen here?
Following the Fannie Mae and Freddie Mac bailouts each U.S. citizen will ultimately be responsible for $360,000 of federal debt.
I wonder how much of that went into the pockets of bankers and OTC derivative sales people that have since left the game taking with them their big bonuses and leaving us holding the bag?
Write or e-mail your representatives in government, I did.
|Last on gold is $798.20.
Last on silver is $12.80.
Where has all the silver gone?
Delivery channels for the metal worldwide have clogged up over past weeks for investors. I have been reading postings on many blogs that testify to this growing problem.
The only reliable cash market for silver seems to be only on e-Bay. In Germany recently an e-Bay transaction took place for 100 silver maple leafs at a 40% premium to the last COMEX silver price.
Many dealers are out of the silver bullion coins. The cash and carry market for these coins has mysteriously disappeared. Dealers say if you pay in advance they will supply you when they come in. Is that good enough? I don't think so. You should never have a middle man between you and your bullion coins.
The world is run by fiat currencies and for the people who want to cash out of some of it and into silver bullion coins it appears they are just out of luck as the once liquid cash and carry market is now restricted.
Can the worldwide demand for silver be that much? It appears with the 600 million ounces of silver being mined each year that there is not enough to go around. This at first glance appears odd today with silver prices at the COMEX Exchange significantly under their recent highs of $21.50.
It looks like silver is being diverted somewhere. Could there be a problem at COMEX? Is someone demanding delivery on their maturing silver future contracts in excess of what COMEX physically holds in their depository?
The following is an article by Jason Hommel who asks many questions:
($500 million silver default?!)
Silver Stock Report
by Jason Hommel, September 3, 2008
In an interesting twist, Jon Nadler posted a report by a blogger two days ago that I could mostly agree with.
The blog post is by an "industry insider," who tries to explain the "normality" of the shortages of silver and gold.
I also think it's normal for there to be shortages of silver and gold when inflation is raging out of control, and when the markets are manipulated, but I suppose we don't agree on reasons like that.
I left several comments on that blog, here:
My key question: If there is no shortage of actual silver, as opposed to only shortage of "investment silver", where can I go to buy that real actual silver? As of last night, there was no answer.
Today, a reply came, but no answer.
The blogger works at Perth Mint, and writes:
"When I say that wholesale bars are available, it means in wholesale quantities. I cannot speak for Kitco, but I went upstairs and spoke to the Treasurer and he will do deals for a minimum of 20 tonnes of silver and 1 tonne of gold. Call Nigel Moffatt on (08) 9421 7403. Price will be on a deal-by-deal basis."
That's insane. Right downstairs, they often run out of 100 oz. bars, and reportedly have no 1000 oz. bars for sale.
Besides, that's a lie. Wholesale quantities in silver are 1 silver futures contract of 5000 ounces, which is about 1/6th of a tonne, not 20 tonnes!
Further, I note that Nigel did NOT say he would SELL 20 tonnes of silver. He only wants to "deal" in that, minimum. He probably needs to buy that much to pull his fat out of the fire, as I will explain below.
But first, people keep asking me "What's up with Jon Nadler, that guy who bashes metal, yet works for Kitco, who sells metal? I don't get it?"
Kitco runs a "pool" account where they hold the metal for investors, or in other words, they OWE precious metal to their clients.
Kitco also sells Perth Mint certificates, which also represents precious metal owed to clients.
Maybe that explains it?
Usually that's all I need to say to those who ask me, and the person replies, "Oh, of course. Thank you."
Perhaps that's one reason why Nadler posted the article by a Perth guy; they are connected, they both owe metal, and Perth uses Kitco, or Nadler specifically, as a mouthpiece.
If you click on Nadler's bio link at the top of any of his articles, it says that he may have helped government mints, like Perth, in the past:
"He has long-standing ties in the precious global metals community and has consulted on marketing and product development issues to government mints, precious metals retailers, as well as to trade and membership organizations, such as the World Gold Council."
Interestingly, Nadler boasts about his background in banking, and not just for a small banking outfit, but Bank of America, America's second largest bank!
"Jon established and managed several precious metals operations at major USA-based financial institutions (Deak-Perera, Republic National Bank, and Bank of America)."
Bank of America has the second largest derivatives position of all the Banks in America, right behind JP Morgan, at $28 trillion, yes, Trillion, with a T.
And, Bank of America was a member of the Silver User's Association, a group devoted to the conflicting goals of keeping silver prices low and keeping silver available for users. Low prices create shortages, of course. And you can't buy silver at Bank of America, of course.
I don't think Jon Nadler is ignorant on purpose. I don't believe anyone can actually be that stupid on a regular basis, so the people who have repeatedly nominated him for the "Moron of the Year" award don't see the big picture. Instead, I give Nadler more credit than that. I think he's a human of somewhat higher intelligence than normal, but his wisdom score is extremely low. Either that, or he has a very high wisdom score, but he just works with black chaotic magic, instead of embracing the light of truth, or something like that. I think he has a clear agenda, he is actively making a war on gold and silver with his words, on a daily basis, and he is paid to do that.
There are more key connections I must reveal, based on reports from out of Australia about two weeks ago.
The Perth Mint owns 40% of AGR Matthey, in Australia.
AGR Matthey supposedly was using some of Perth's silver and gold that backs the Perth Mint silver certificate program, that is sold by Kitco.
Proof: The Perth Mint's annual report discloses the precious metal loan to AGR Matthey, as I reported previously.
"The $880 million of precious metals deposited by Perth Mint Depository clients (note 17) was used in operations by Gold Corporation as inventory ($381 million - Note 8b) with the balance in the refining operations of AGR Matthey (Note 8a).
p. 81, bottom
I never took a class in deciphering "Ogre-speak", and certified accountants can't decipher Perth's annual report either, but did Perth Mint mean to say or imply that AGR Matthey has "the balance" between $880 million and $381 million, which would be about $500 million worth of gold and silver backing the certificate program?
Wait, that's not the shocking part, I'm getting to it.
Here's the bombshell shocker:
AGR Matthey closed their silver operations! There is no news of this item, it's only available at the Kitco chat boards directly!
Two of my readers reported the same thing. AGR Matthey offices closed. What?? Why?!
AGR Matthey supposedly has all this gold and silver on loan from Perth Mint's certificate program with which to operate and conduct operations, to enable them to have metal for use in refining operations, so that they can take those abundant 1000 oz. bars, and make them into 100 oz. bars, and sell metal to the public, and now, during a time of record demand from the public, when little old me can sell 25 bars at a $4.01 premium to the spot price, when AGR Matthey should be well funded, with plenty of metal, and capable of making a killing on manufacturing bars with their own top industry and famous and desired trademark, they decide to close up shop?
Their story makes no sense. It make more sense that they have been operating at a loss for years, and used up the loan of precious metal in operations years ago (a loan that would have been fantastic to have during a bear market in metals, which, if you used accounting gimmicks right, you could say that the loan was brining in "profits", but not in a bull market). So, most likely, the managers recognize that they cannot buy more metal today, and cannot get the metal back to pay back the growing metal loan. It makes more sense that as the silver market is manipulated down, when inflation is raging, and when investors are all buying, and not selling, that they cannot source metal from the public anymore, and so they have closed up shop for that reason.
So, look, AGR Matthey's closure of silver operations might have been a $500 million precious metals default to Perth Mint in the last two weeks. No wonder the Perth Mint wants to deal in 20 tonnes of silver minimum, which would still only be about $10 million worth. (20 tonnes x 32,151oz/tonne = 643,020 oz. x $13? = $8.3 million!)
But hey, I'm sure someone like Nadler can be hired to say things like "move along", "nothing to see here", the business was "just not profitable". Really! Ya think?
If silver is abundant, why can't AGR Matthey use their ($500 million?) pool of abundant and borrowed metal to make 100 oz. bars to sell to the public at a premium, and just buy more abundant 1000 oz. bars with the profits and make a killing?!
I believe that this is the first major "hidden" default, or emerging default, that has the potential to cause the bankruptcy of the Perth Mint, and/or bankruptcy and/or silver default at the COMEX, if they are not all bankrupt already.
The closing of AGR Matthey calls into question the validity of the entire Perth Mint certificate program, and Kitco, and Nadler.
I think Perth Mint certificate holders should either be investigating, or redeeming their certificates for real physical metal, while they still can.
It appears as if the Perth Mint took my advice a few months ago, and bought at least some silver at higher prices to make available to people, to calm down the constant stream of reports of delays of 2 months. But now, it appears as if things are much, much, much worse than a mere 2 month delivery delay.
It seems as if Perth's 2 month delay has turned into Johnson Matthey's 2 month delay!
The other connection and warning that must be made now, is about Johnson Matthey, because AGR Matthey is one of their divisions.
Johnson Matthey, of course, is the largest silver refiner in the U.S., and was 8-10 weeks behind on orders for 100 ounce silver bars, and in the last week or so, stopped taking orders for silver. Matthey has a capacity of manufacturing 300-400 bars per week. 7th Grade Math warning: 400 bars x 100 oz.. each x 10 weeks = 400,000 ounces of silver = 12 tonnes, that JM is behind, backordered.
Interesting that that amount is just under the "minimum deal size" of 20 tonnes as Nigel said at Perth.
COMEX contracts are for 5000 ounces, or about 1/6th of a tonne. Why not just take delivery of 120 contracts Nigel?
But wait, if 20 tonnes is the minimum deal size, does that mean that Perth does not buy any silver when investors buy certificates for less than that, after all, that's their minimum deal size!?
So, it's not we silver investors who need to take delivery of the COMEX contracts. We silver investors already placed the orders. It's them, the companies who owe silver to the investors, who need to take delivery, and apparently cannot.
Johnson Matthey's primary distributor is AMARK. Amark is the largest bullion trader in the U.S. Amark is out of all silver products, so they are essentially "out of business" with a "shut down" silver division too, until they get silver.
Most other major dealers deal direct with Johnson Matthey, or Amark.
Here is another major shocker that I just heard today. CNI Numismatics, at golddealer.com, who is one of the most trusted silver dealers of which I know, verifies and confirms this overall story with a shocker admission from Johnson Matthey.
JM told CNI that JM is "ramping down" production of 100 ounce bars!!!
What? JM is backlogged 8-10 weeks, and refusing orders to try to catch up, yet is "RAMPING DOWN production"? That confirms the AGR Matthey shut down. And that can only mean one thing. There is a shortage of 1000 oz. bars or any other form of silver to make into 100 ounce bars.
This is why there is a shortage, world wide. The largest silver providers can't find enough silver to provide it. And this is why the shortage is denied by those in that camp. Their businesses may well be at risk right now, and the worst lot of them are in desperate need of you to send them money now to wait for silver that has an indefinite wait time attached.
KITCO NOTICE ADMITS THEY WANT TO DEFRAUD YOU BY HOLDING YOUR MONEY POTENTIALLY FOREVER, AND IF YOU ASK FOR A REFUND, THEY WILL CHARGE YOU EXTRA.
IMPORTANT NEW NOTICE: Demand for bullion products has increased significantly in recent days. As a result, we may experience delays in supply and possibly delays in processing and shipping by our vaults. We apologize for this inconvenience and will do everything in our power to service your orders as quickly as possible. While cancellation fees still apply, prices are guaranteed regardless of the length of the delay. We remain committed to providing you the best service no matter what market conditions prevail.
Don't fall for it. Not now.
Be careful out there. Defaults are either ongoing, or imminent.
If you want to help break these guys, there's one key way to do it. Make sure you buy and sell your silver at an ever increasing premium over their "spot" price or paper price. As that starts to happen, the paper hedging contracts cannot be used to purchase silver from the public, because the public's silver will cost too much. And if the paper system cannot provide enough silver either, then their game is over.
We are closer than ever to a major explosion in the silver price. In fact, it's already begun in the premiums for "walking silver" as opposed to "paper silver". What's "walking silver"? The stuff you can walk out of the store with!
|Last on gold is $803.60
When gold sold down to $774 some days back Jim Sinclair reported that two hedge funds were in trouble with their long positions in gold. In commodities this frequently happens due to their highly leveraged nature. Mr. Sinclair stated in late Asian trading one night when the event took place that China relieved the two of their positions.
I don't know if the funds were holding physical gold or the futures contracts or even what exchange was involed had they been the contracts.
The Chinese are as secretive as they can be. They are long term planners and prefer operating under the radar with their large transactions.
It may be that some Chinese gold is held in the basement vaults of the New York Federal Reserve. I doubt that the Chinese would deal with the COMEX as a first choice. If I were their purchasing agent I would steer clear of the COMEX. Personally, I don't trust them or their overseeing regulatory body, the CFTC.
There are other places to buy gold bullion like: Dubai, Shanghai Gold Exchange, Istanbul Gold Exchange, Tokyo Commodity Exchange and the London Bullion market.
It was reported last year that the Bank of China(BOC") held 600 tons of gold in their official reserves At that time this was about 1.3% of their total reserve holdings. Chinese economists have suggested to the BOC that they increase the holdings to 2500 tons.
Currently, the approximate average for world gold production is 2500 tons. China may soon be the number one gold producer in the world as world mining production remains stagnant to lower. China forbids the exportation of gold but some dribbles out in the form of gold panda investment coins.
As western central banks try to control world gold prices with all types of fabrications India, Russia and China will be gladly buying physical gold during periods of weakness such as current times.
India buys between 600 and 700 tons each year of the 2500 ton world production. Russia in past years to present are building up their central bank gold holdings. Along with the two, is supposed buying of gold by China, especially recently.
As the propaganda machine works overtime in hiding gold's truth from 305 million people either listening or not in the US, there are nearly 2.5 billion people in India and China that are pro gold.
The big problem for US citizens is there is no long term plan in effect but increasing debt. We're are being slowly sold down the river as the wealth in other nations increases, especially in gold.
Don't forget the old saying, "those who own gold in the end will make the rules." It looks like our grandchildren will either be working for the Indians or the Chinese someday.
Your only hope is to cash in everything you can for gold and sit tight no matter how insecure all the circus leaders of miscreance make you feel.
Gold, Long and Strong.
|Hey Bluejay, you have a good understanding of the Internet as a resource, much better than I. When it is reported that Chinese or anyone is buying gold, what are they actually buying? Are they putting up dollars (full price) for 100 or 1000 ounces? Is it just a debit/credit entry in the books? Is physical gold exchanging hands? Can a buyer of a commodity contract take the gold? If so, in what form?
I realize these are not easily answered, but if you can find the time to research, many would like to know the answers. On August 28 (in this topic) I related about the calls I was getting from men wanting to buy gold dust. They were intermediaries but said the purchasers had big money to buy. Well, I got a return call this morning and decided to continue the dialog to see what happens. I'll keep you posted as the "buy" plays out.
If I were president of a cash rich corporation right now, I would convert my cash into gold at these prices.
|Last on gold is $805 as it is attempting to get back on its feet after slipping to $790 earlier.
Just an opinion, but it looks to me that the Chinese were actively buying gold today under $800.
Below are some words of wisdom from Jim Sinclair:
Posted On: Monday, September 01, 2008, 11:24:00 PM EST
In The News Today
Author: Jim Sinclair
Gold is honest money as the currency of last resort.
"All truth passes through three stages: First, it is ridiculed; Second it is violently opposed; and Third, it is accepted as self-evident."
~Arthur Schopenhauer (1788-1860)
|Last on gold is $817.70 as the manipulation continues taking it down $12.70 on the US holiday.
Expect the paper COMEX exchange tomorrow, September 2, 2008, to party on with continued price bashing. Do the Fed's and banks have this meltdown under control or are they just running scared and don't know what else to do but kill the messenger?
A great time to be buying gold coins.
Gold/XAU Ratio 5.56
Gold/Silver Ratio 61.07
Another Bank Failure
Friday, August 29, 2008, Integrity Bank of Alpharetta, Georgie closed its doors. This is the 10th bank failure so far this year and the second in eight days. On August 23, 2008 Columbua Bank and Trust of Topeka, Kansas went belly-up.
The FDIC has chosen Friday's to release bank failures. I wonder why?
IndyMac, Bear Stearn along with another seven banks this year, ALL BANKRUPT. There must be a growing list of other banks that are insolvent with the FDIC staggering failure notices now every Friday. The FDIC is almost broke from bailing out these banks and is asking for more money from the government.
With this growing list of insolvencies it is suspected that the Plunge Protection Team is now having meetings every weekend. Before Paulson was secretary of the Treasury these meetings took place quarterly.
So with another financial institution biting the dust it may be the concensus of the "big four"( Fed, Treasury, SEC and the CFTC) to pressure gold and silver lower again this coming week.
Six weeks ago Gold was $980 and in about four weeks time it had fallen to $774 where strong Chinese buying was reported. In the past two weeks gold rebounded from that low to trade at $840 then lower to $805 and then back again to $840 plus, closing at $829.90 with a day of weakness on Friday.
It would be nice for the precious metal to push higher above $840 area but there are too many gold bashers in the market these days. The illusionists never seem to tire in their quest to tarnish gold's shine when the financial system that they ruined with their greed is threatened.
So, with another attack on gold expected this week it might be time to consider some initial or continuing purchases of the coins. I checked the premiums today and noticed that the cheapest way to buy gold in the form of the coins as of Friday at about $830 gold from golddealer.com(a competitive dealer or if you know of a better one please post it) is to purchase the Mexican 1.2 ounce gold 50 Peso piece. The coin sells for $1026 or buying the once ounce equivalent for $855 which is a 3.02% premium over the metal price.
Other one ounce gold bullion coins:
Chinese Panda $863 +3.99%
U.S. Eagle $868 +4.59%
Can. Maple Leaf $900 +8.44%
An emerging sigificant fact:
China wants to replace its dollars with gold at a somewhat lower price. In addition, as they proceed to become the world's number one producer of the metal the question arises: How much of that domestic production will they be willing to export? It is common knowledge that South Africa's glory days of production are now behind them. Where is the physical gold going to come from if not from the world's number one producer when current world mine production can not keep up with demand?
Let the paper party selling days of gold between the Plunge Protection Team and now three U.S. banks in New York continue while smart and courageous buyers take advantage of these artifically lower prices by buying the real stuff.
Gold is your financial insurance policy for tomorrow.
|Last on Gold is $829.90
Where are the insider admissions about gold? Right here
Submitted by cpowell on 09:50AM ET Saturday, August 30, 2008. Section: Daily Dispatches
12:40p ET Saturday, August 30, 2008
Dear Friend of GATA and Gold:
People like Mike Shedlock of Sitka Pacific Capital Management in Edmonds, Washington, who writes Mish's Global Economic Trend Analysis letter, will never debate a GATA representative about manipulation of the gold market even as they aggressively misrepresent GATA's work, as Shedlock did again this week in his essay, "Conspiracy Theory Psychology":
Shedlock wrote, as if it is GATA's position: "Theory 1: The U.S. government, foreign governments, central banks, various broker-dealers, and a consortium of 10 large U.S. banks are all acting together in some massive conspiracy to suppress the price of precious metals for 15 years running, and not a single insider has stepped up to expose the fraud even though housing fraud stories from insiders are being disclosed at a rapid pace, and government, CIA, and other intelligence leaks have been running rampant throughout that entire timeframe."
Actually, of course, GATA's position is that quite a few insiders have testified to the gold price suppression scheme. Though Shedlock purports not to notice it, GATA has been publicizing their admissions for years. It would be decent of Shedlock and those who share his views to familiarize themselves with and respond to these admissions, particularly:
January 1995: The Federal Reserve's general counsel, J. Virgil Mattingly, told the Federal Open Market Committee, according to the committee's minutes, that the U.S. Treasury Department's Exchange Stabilization Fund had undertaken "gold swaps." Central banks have only one purpose for "gold swaps": market intervention. The January 1995 FOMC minutes with Mattingly's statement are posted at the Fed's Internet site here:
July 1998: Federal Reserve Chairman Alan Greenspan told Congress, "Central banks stand ready to lease gold in increasing quantities should the price rise." That is, Greenspan himself contradicted the usual central bank explanation for leasing gold -- supposedly to earn a little interest on a dead asset -- and admitted that gold leasing was all about suppressing the price. Greenspan's admission about the gold price suppression scheme is posted at the Fed's Internet site here:
September 1999: The Washington Agreement on Gold, made by the European central banks in 1999, was a proclamation that Western central banks were working together to control the gold price. The central banks in the Washington Agreement claimed that, by restricting their gold sales and leasing, they meant to prevent the gold price from falling too hard. But even if you believed that explanation, it was still collusive intervention in the gold market. The Washington Agreement can be found at the World Gold Council's Internet site here:
February 2003: Barrick Gold confessed to the gold price suppression scheme in U.S. District Court in New Orleans when it filed a motion to dismiss Blanchard & Co.'s anti-trust lawsuit against Barrick and its bullion banker, JPMorganChase, for rigging the gold market. Barrick's motion said that in borrowing gold from central banks and selling it, the company had become the agent of the central banks in the gold market, and, as the agent of the central banks, Barrick should share their sovereign immunity and be exempt from suit. Barrick's confession can be found here:
September 2003: The Reserve Bank of Australia confessed to the gold price suppression scheme in its annual report for 2003. "Foreign currency reserve assets and gold," the RBA's report said, "are held primarily to support intervention in the foreign exchange market." The RBA's report is posted at the central bank's site here:
June 2005: Maybe the most brazen admission of the Western central bank scheme to suppress the gold price was made by the head of the monetary and economic department of the Bank for International Settlements, William S. White, in a speech to a BIS conference in Basel, Switzerland. There are five main purposes of central bank cooperation, White announced, and one of them is "the provision of international credits and joint efforts to influence asset prices (especially gold and foreign exchange) in circumstances where this might be thought useful." White's speech is posted at GATA's Internet site here:
Further, government manipulation of the gold price is only the unanimously accepted history of the world prior to the period about which GATA is complaining. That's what the gold standard was about, fixing the price of gold to certain amounts of government currencies. That's what the London Gold Pool was about, the effort of the U.S. and British governments, abandoned in 1968 amid extraordinary demand for the metal, to hold the gold price at $35 per ounce.
Shedlock does acknowledge government's propensity for market manipulation. He writes:
"Of course there are conspiracies and manipulations. I have listed many of them.
"-- Term Auction Facility.
"-- Primary Dealer Credit Facility.
"-- Term Securities Lending Facility.
"-- SEC rule changes options expiration week.
"-- Selective enforcement of naked shorting rules.
"-- Discount window changes in options expiration week.
"-- Shotgun marriages arranged by the Fed.
"-- The bailout of JPMorgan/Bear Stearns."
So Shedlock's position seems to be that government is trying to rig almost every market except the one government used to rig openly. What strange and sublime faith he must have!
Despite the misrepresentation of GATA's work by Shedlock and others, we're actually in fairly respectable company in maintaining that the gold market is manipulated. Some big investment houses have said the same thing.
Sprott Asset Management:
The Cheuvreux brokerage house of the French bank Credit Agricole:
There's a lot of admission and documentation above, which, it seems, is why Shedlock, Kitco's Jon Nadler, the World Gold Council, and others who disparage complaints of manipulation of the gold market refuse to debate the issue, where they might be compelled to address the evidence specifically. But GATA remains ready, any time these folks or others on their side work up the honesty and courage.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
|Last on gold is $830.10
Gold is the safety of last resort. The fiat currency governement around the world fear gold more so then anyone will ever know. These governemnts hate it with a passion. Gold is the alternative currency to all the tricks these governements use that fail and continue to burden us financially.
The Fed's latest experiment is to hand out money to bankrupt concerns that never thought past their creed for more and more money or that had some other unreported devious agenda.
Consumers are paying dearly for the bailouts of financial institutions and now General Motors($50 billion just for starters). Who's next? One thing is for sure: we're not next, we're on our own.
How will all this end? The people aren't sure but they are learning one thing: gold is the safety of last resort.
A peculiar event happened recently: As government cohorts swung the pendulum lower with the recent collaspse in gold and silver prices a strange unexpected thing took place, there was unprecedented demand for one ounce bullion coins.
This development is extremely significant and deserves some attention.
How could this happen, say the fiat western nations? Well boys, there is a simmering and growing lack of confidence in what you guys are doing to our money, you are destroying it as a store of value and people are wising up.
The fact is that there is not enough gold or silver to go around for the hundreds that want it now and the thousands that may want it in the time period ahead.
What fiat nations fear the most is that people won't accept their fiat money anymore. Before the gold window closed in 1971 our dollar was backed by 25% gold. Foreign nations were free to exchange their dollors held at the rate of $35 for each ounce of gold wanted.
How things have changed, now the public wants gold when it sells off. Some people with wealth are scared and rightly so. The US is in the midst of a major meltdown all because of the failing OTC derivatives that we rarely read about or is on the news.
Expect governments to restrict access to the one ounce bullion coins and others that the public now wants. Call it rationing, shortage of blanks or whatever you wish. The games are on.
If the public is so interested in gold now, what do you think they'll do when gold takes off again and there aren't any gold coins available except from private sellers if they wish to offer any?
What will they turn to? Yes, gold stocks and possibly, the 16 to 1. Don't forget the Chinese. These guys want out of dollars and into resource companies.
But above all and don't ever forget this, the anti-gold people can make your life miserable. The true test for your future will be, will you be able to withstand their propagnada attacks?
Gold, long and strong.
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