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Something stinks about the moves in gold and silver
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August 26 - Gold $436.80 down $1.10
- Silver $6.67 down 13 cents
An Ominous Day For Planet Wall Street/Pathetic
Gold Cartel Struggling To Prevent Disaster
I have enclosed a quote I got from
my father back in the ‘60’s. It is my favorite and has
always inspired me to try and do a little more.
Doug Schwartz
Ephraim WI
"On the plains of hesitation bleach
the bones of countless millions who at the dawn of
victory, sat down to rest and resting, died." Anonymous
What we saw today not only was disgusting,
but extremely ominous. The US financial market system,
after years of market manipulation, is about to become
unhinged, unglued. The net worth of the average American
will take hits like they haven’t seen since the 1987
crash and eventually could resemble something similar
to what occurred in 1929. Most likely not that disastrous
in fact, but will feel that way to many.
Much of what MIDAS and a number of other
Café contributors have brought to you attention is
now quickly coming to pass. At the center of the nightmare
for Joe and Jane American is the rigging of the gold
price. We all know about Reg Howe’s Gibson’s Paradox
and the relationship between US interest rates and
the price of gold. Had gold been allowed to trade
freely, the price of gold would be hundreds of dollars
higher, perhaps even $500 per ounce higher. US interest
rates would be much, much higher too.
The US stock market would be much lower
and the US real estate market would never have reached
the bubble stages it has now. The major problem for
US stock market/real estate investors is they have
made investment decisions based on an illusion, based
on enormous market manipulations which have created
an atmosphere, or perception, that little can go wrong;
one in which fear has been taken out of the market
equation; and one which has encouraged the taking
of investment risks they would not have taken had
US financial markets (especially gold) been left to
trade freely.
What we saw today in the US financial
markets, along with the accompanying news, strongly
suggests the "S" is quietly hitting the fan. The Orwellians,
The Gold Cartel, the Washington power structure, and
the bigwigs on Planet Wall Street are petrified by
what they see on the horizon in the VERY near future.
Surely, this is one of the reasons the Fed will be
meeting with the largest 14 credit derivatives players
on September 15.
What other explanation could there be
for their manic defense of $440 gold? Gold came in
steady this morning. When the cabal would not let
gold rise along with a sinking dollar, the funds puked
their longs, taking spot down to $435.20. The trade
turned massive buyer and within 15 minutes gold was
up 50 cents on the day, eventually rising to $440
bid on the bulliondesk. Gold would have never traded
this way in years gone by. Something is different
here. That’s when the crooks attacked again, taking
gold right back down to up slightly on the day.
Meanwhile, the cabal forces continued
working silver over, breaking it down completely from
a technical viewpoint. It is one of the worst looking
charts you will ever see. But, how strange. The silver
fundamentals are as firm as ever and the prices of
oil and copper are at all-time highs. The CRB is right
off its multi-decade high. Don’t know how the cabal
is engineering this silver take down, but they have
inducing specs to load up on the short side in the
process. Yesterday’s open interest rose a sizeable
3833 contracts to 121,671.
Once again the funds long gold, seeing
the cap The Gold Cartel put on the price, began to
dump their longs, especially after noticing how silver
was crumbling. After all, if a market is not allowed
to go up, then why be long? Thus, in typically inspired
Gold Cartel fashion, gold sold off very late on a
Friday afternoon after trading higher for 90% of the
day. However, the price bent. It did not break, as
the trade showed up on the buy side, as they have
done for days on setbacks.
What does all this mean?
The powers mentioned above are scared
to death to let gold rise above their defense point
because they fear it could set off derivatives neutron
bombs in both the gold and credit markets. At the
same time, the trade shorts are very nervous to remain
that way for much longer. The gold fundamentals become
more positive by the day. The bad guys are having
trouble coming up with enough physical gold to meet
demand and it is having an impact on how they operate.
No sense repeating what MIDAS has presented
all week. Gold remains in explosive mode. What the
cabal is doing can be compared to a kid trying to
keep a rubber ball under water. It won’t work for
any length of time. There is too much pressure for
the price to rise, and to do so substantially.
As mentioned yesterday, gold will not
just blissfully rise above this $440 level, like a
normal, free market would. It will either fail, or
blow through it. A close near $439 today would have
been ideal. The Gold Cartel knew that might lead to
panic trade short-covering by Monday, so they called
out reinforcements nearing the Comex bell to take
gold down and make a gold price explosion through
$440 less likely Monday morning.
Perhaps The Gold Cartel can blow out
all the specs and take gold down to $420 like the
mob thinks. I doubt it. My bet is sometime soon the
dam breaks and the price of gold streaks towards $500
per ounce.
The gold open interest rose 4444 contracts
to 330,070 as the cabal crowd increased its defense
of $440.
Silver makes no sense. It probably is
as good a value buy here, especially as to what other
commodity related prices are doing, than at any time
in history. My guess is that this is an engineered
false breakdown that will not last long at all. Once
silver takes out $6.85, it will streak for $8.
The dollar was weak most of the day
until near the end. Oddly enough, perhaps predictably
enough would be more appropriate, I could find no
plausible reason for the dollar strength, as the news
was bearish. The dollar closed at 87.83, up .27.
The John Brimelow Report
Could be time to buy silver
Friday, August 26, 2005
Indian ex-duty premiums: AM $3.40, PM
$2.67, with world gold at $437.75 and $438.55. Ample,
and quite adequate, for legal imports. The world’s
largest bullion importer is a solid buyer at these
prices. This is a problem for the Bears.
Perhaps even more so in silver. Ex-duty
premiums in silver this morning were 9c and 20c, with
world silver at $6.84 both times. Adequate and lavish,
for legal imports. If silver trades in the low $6.70s
on Monday (as it appears to be closing in NY), this
will intensify. It may be recalled that when silver
briefly traded in the $6.40s in early January, dealers
were flying the metal into India, an event
which happens less than once a decade. MarketVane’s
Bullish Consensus for silver was 57% last night –
presumably it will be down again today. The low in
January was 51%. The technical situation is of course
absolutely gruesome – that is of no interest to the
Indian consumer. A useful trade may be developing:
IN THE TWO MONTHS AFTER THE JANUARY LOW THIS YEAR,
SILVER ROSE ALMOST 20%.
Japan was comatose. Volume slumped 47%
to only 7,069 Comex equivalent and open interest was
static – down 605 Comex equivalent to equal 97,449
NY contracts. Mitsubishi’s data implies only a 0.6
tonne (20 Comex) addition to the "General Public"’s
long. The active contract was down 6 yen, although
world gold went out $1.70 above the NY close – no
doubt reflecting buying from further west in Asia
as the day wore on.
On silver, though, Mitsubishi reports
bargain- hunting by the public and implies the "General
Public" added 32.8% to their long – 787 Comex lots.
On Thursday in NY of course an apparently
half hearted attempt on $440 was promptly suppressed
and reversed. In fact, this effort was more serious
than met the eye: on volume of only 28,236 lots open
interest soared 4,444 contracts – 13.8 tonnes – to
330,070, almost back to the recent high. Gold finished
up 90c. Apparently a serious buyer met a serious seller
in a quiet, but definitely not a thin market.
On Friday morning, an effort to drive
gold down (including in Euros) around 10 AM NY time
was decisively blocked. This kind of action, and India,
bodes ill for the Bears.
JB
CARTEL CAPITULATION WATCH
The perfect storm hit the stock market
this morning. With it becoming apparent to everyone
that higher oil prices are beginning to affect the
US consumer and economy in a material way, the following
hit the tape simultaneously:
*09:47 Univ of Michigan consumer
sentiment index 89.1 in August vs consensus 92.5
This is the final reading for August, and was significantly
lower than the preliminary report of 92.7. July was
96.5.
* * * * *
*10:00 Greenspan says that the Fed
is paying closer attention to asset prices
Greenspan is speaking at the Jackson Hole Fed conference.
* * * * *
Housing boom is an imbalance: Greenspan
JACKSON HOLE, Wyo. (MarketWatch)
-- In his sharpest words to date about rising home prices,
Fed chief Alan Greenspan described the housing boom
as an economic imbalance that could end badly for the
economy. In prepared
remarks to the Jackson Hole Fed policy conference,
Greenspan said high home prices were due in part to
low risk premiums demanded by investors. Such
increases in asset values "are too often viewed by
market participants as structural and permanent."
"History has not dealt kindly with the
aftermath of protracted periods of low risk premiums."
Read his remarks.Greenspan warned
asset values could fall if investors grow cautious
and demand higher interest rates. "What they perceive
as newly abundant liquidity can readily disappear,"
Greenspan said.
"Any onset of increased investor caution
elevates risk premiums and, as a consequence, lowers
asset values and promotes the liquidation of the debt
that supported higher prices," Greenspan said.
Greenspan said the flexibility of the
economy is the most important policy asset in handling
any shocks from a fall in asset values.
He expressed optimism that the adjustments
could be made gradually and a recession could be avoided.
"If we can maintain an adequate degree
of flexibility, some of America's economic imbalances,
most notably the large current account deficit and
the housing boom, can be rectified by adjustments
in prices, interest rates, and exchange rates rather
than through more-wrenching changes in output, incomes,
and employment," Greenspan said.
Protectionism and the large U.S. fiscal
deficit threaten flexibility, he said.
The Fed chairman, who is scheduled to
leave his position by the end of January, said central
bank forecasts and monetary policy are becoming increasingly
driven by changes in asset prices, such as equities,
bonds and real estate.
-END-
Thus, at the very moment Greenspan is
warning of increased investor caution, the consumer
sentiment number of the day drops far more than expected.
Meanwhile, a soaring crude price refused to go down.
Well, it refused until some weather report miraculously
surfaced near the end of oil trading to save the shorts’
bacon. At 2, oil was staring at $68 per barrel and
another all-time close. On the capricious weather
news, it sank like a stone, closing at $66.13, down
$1.36 per barrel. Still, this is very expensive oil.
The US stock market, weak all session
long, moved up on the oil setback and then faded late.
The DOW lost 53 to 10,397. The DOG gave up 14 to 2121,
closing lower for the fourth week in a row.
This statement by Greenspan today is
profoundly disturbing:
"In prepared remarks to the Jackson
Hole Fed policy conference, Greenspan said high home
prices were due in part to low risk premiums demanded
by investors."
As mentioned earlier, the reason for
low risk premiums out there is that Alan Greenspan
and friends rigged the gold price. The average US
investor will soon face a fiasco thanks to policies
of Mr. Greenspan and The Gold Cartel. This has been
one of the themes in my speeches over the last few
years.
On China:
06:45 China C. Bank advisor Yu says
big, one-off yuan revaluation "dangerous", China basket
system "transitional" - Reuters
Headlines only. Advisor Yu says China forex reserves
to grow sharply despiteyuan revaluation. China to
let market forces play a bigger role insetting yuan
exchange rate, according to Yu. Says yuan revaluation
helps reduce China's over-reliance on exports. China's
basket regime helps reduce speculation on yuan, according
to an advisor. Yu says China must guard against economic
slowdown, but no nedd to relax monetary policy. Currencies:
euro/dollar $1.2319, +0.0018; dollar/yen Y109.62,
(0.43).
* * * * *
The continuing margin squeeze on the
banks is an extremely important financial market development.
Thus, this story in its entirety (perhaps yet another
reason for the Fed meeting on credit derivatives in
mid-September):
US banks' margins fall to 15-year low,
FDIC says
Thu Aug 25, 2005 04:11 PM ET By Jonathan
Stempel
NEW YORK, Aug 25 (Reuters) - Perhaps
banks should go back to giving away toasters.
http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh08690_2005-08-25_20-11-15_n25339356_newsml
Rising short-term interest rates,
and the failure of long-term rates to rise with them,
have caused margins at federally-insured banks and
thrifts to shrink to their lowest level in 15 years,
the Federal Deposit Insurance Corp. said on Thursday.
Ten Federal Reserve interest rate
hikes since mid-2004 have forced banks to pay depositors
more, and to pay more on their own borrowings.
But competition among lenders and
a reticence of companies and individuals to borrow
beyond their means keeps lending costs down, amid
concerns the economy might slow, oil prices might
spiral higher, and real estate prices might fall.
Less-than-ideal rate bets already
cut into second-quarter profits at such giants as
Citigroup Inc. and Bank of America Corp. and JPMorgan
Chase & Co.
"Banks are trying to push out loans
that fewer people may want as the economy slows, while
their favorite user of money, corporations, still
have tremendous amounts of cash on their balance sheets,"
said James Cusser, senior portfolio manager at Waddell
& Reed Investment Management Co. "Bigger banks
would like to do more commercial lending, and if there's
not enough demand for it, they have to cut their prices."
The FDIC said net interest margin,
the difference between what banks earn on loans and
pay on deposits, fell to 3.49 percent from 3.53 percent
in the first quarter.
Margins are now the lowest since
the third quarter of 1990, when the U.S. economy was
in recession. Overall second-quarter profit at the
8,868 institutions insured by the FDIC fell 3.3 percent
from the first quarter to $33.1 billion.
Large institutions are feeling more
pain because they rely more on short-term borrowings
for funding, the FDIC said.
Banks with less than $100 million
of assets on average saw margins rise to 4.22 percent
from 4.14 percent. But the 114 institutions with more
than $10 billion of assets -- which together hold
nearly three-quarters of all industry assets -- saw
it fall to 3.32 percent from 3.41 percent, the FDIC
said.
WORSENING AHEAD?
For big banks, the problem could
get worse, as the U.S. Treasury yield curve flattens.
The yield on two-year notes this
week rose to within 0.15 percentage points of the
yield on 10-year notes. That's the narrowest since
early 2001, just before the last recession began.
The gap was 1.15 percentage points at the end of 2004.
Consumer rates reflect much of this
compression.
According to Bankrate.com, the average
yield on one-year bank certificates of deposit has
risen to 3.68 percent from about 2.25 percent a year
earlier.
In contrast, the average rate on
30-year fixed mortgages actually fell slightly, to
5.31 percent.
Most economists expect short-term
rates to keep rising, but there is less consensus
about to the degree to which long rates might follow.
Cusser, for his part, has been adding
two-year Treasury notes to the $1.4 billion he helps
invest. That note yields about 4 percent.
"You can get more than 90 percent
of the yield on a 30-year bond from an ultra-safe
two-year note," he noted.
-END-
Raymond comments:
Bill,
A yield curve inversion is on the way, but what is
missed in the financial press is why it is necessary.
With the problems of negative real-interest
rates and rampant inflation, either an inverted yield
curve, a decrease in the money supply or a combination
of both are necessary to cure these negative growth
problems.
Sustained positive real-economic
growth (not fake-economic growth due to fiat
money & credit creation) is impossible under these
current conditions.
However, this time the yield curve
inversion will be 'historic'.
With the Fed's new intervention paradigm,
this inversion will be 'historic' because for the
first time it will occur with long-term interest rates
falling. According to my records, dating back to 1900,
inversions have always occurred with long-term interest
rates rising, ... not falling.
In the past, inversions have been
sufficient enough to cure negative growth problems.
This attempt to get real-interest
rates positive and tame inflation will severely test
the Fed's new intervention paradigm. But with long-term
interest rates falling instead of rising, this inversion
will most likely not be sufficient enough to change
conditions.
This attempt may be successful in
the short-term, but in the long run it is doomed.
By the end of next summer, according
to my analysis of long-term cycles, the next stage
of inflation is expected to begin.
This next stage is anticipated
to be historic in magnitude. Finally,
the coming yield curve inversion confirms everything
that has been reporting over the past several years,which
the mainstream financial press refuses to
acknowledge.
Congratulations on the successful 'Gold
Rush 21'.
All the best,
Raymond M. Green
From Ron Lutka on the coming credit
derivatives meeting: Hi Bill,
SPECULATION
The apparent Fed Sept 15 meeting with
14 financial institutions is very suspect to my mind.
My understanding is a senior business executive and
senior risk executive from each firm are asked to
attend a meeting to address something as clerical
and mechanical as unmatched trades. Who are the brain
dead managing this part of the business? And the same
problem apparently exists across 14 financial institutions?
I would think phone calls and internal and external
auditors could easily clean that up. If they can't,
then which executives authorized personnel to trade
in these non-standardized instruments without putting
basic business controls in place prior to commencement
of business? And who is managing the daily, weekly,
monthly reconciliation? And who authorized the continuation
of trades after it was discovered trades were out-of-control?
14 financial institutions who cannot balance their
books? Something does not line up.
In my opinion, the meeting as publicly
described could be cover for the true intentions of
the meeting which might be different than the publicly
stated intentions. The true intentions might be to
give "friends" notice of an upcoming major potential
or real financial event in person rather than over
the internet or phone lines that can be tapped into
and heard by others.
What could such a possible upcoming
major financial event be? A planned stock market crash?
A violent change in Fed interest rates? A sharp decline
in the USD (as Saudi Arabia pulls out assets)? The
end of the suppression of the price of gold (I understand
Deutche Bank is invited)? Disclosure of the seriousness
of the problems at fannie mae or General Motors? The
disclosure of serious hedge fund problems? Other?
A combination of these?
The meeting might be to discuss a risk
issue, but I doubt the risk issue is soley in the
form of unmatched trades. And if it is, there are
surely much larger unseen problems lurking beneath
the surface in these financial institutions.
RL
Nicely put, Ron.
From George Ure at www.urbansurvival.com:
Stockgate to Pop?
Some serious odors are developing around
the financial industry's practice of doing naked puts
and calls (as the mood suits them) with stock they
don't own. And now, the Fed is calling a meeting on
credit derivatives and pointing out how extreme the
risk is. Some
good reports are surfacing around the edges, but as
we see if, the derivatives bubble, like it's kin
the housing bubble, may be too big now for regulators
to do anything about other than try - as Alan Greedspan
is - to manage the problem so when it pops it will
be after his watch is over. That way he will go into
the history books without footnotes like mine that
will point out that he and his cronies are the reason
the second leg down of the Second Depression will
be so much greater than the first - it's as usual
a tale of lust and greed - and oh yeah, leverage to
extremes.
Also worth seeing: The John
Embry/Sprott Asset Management interview on gold.
-END-
On silver:
Hi Bill,
(Almost) unbelievable what is happening to silver
today. Wish I had more spare fiat paper to get more
of this criminally underpriced store of value. The
brazen manipulators are handing the real thing to
those wise enough to take it.
Like you, I believe the Sept. gathering
of the banking vultures is presaging some event of
large magnitude that may already be manifesting, albeit
behind the scenes (the long expected derivative meltdown?).
Market behavior is so constrained and obviously controlled,
that when the dam finally breaks, at that time, it
may be too late to position oneself safely. The flood
waters have been held back for too long. Key words
- sudden and drastic. Hopefully, the cabal will not
close down markets altogether, blaming any meltdown
on the pretext of some foreknown (or God forbid a
false flag) exogenous, catastrophic event. Time will
tell, but I sense the rats in the kitchen working
overtime, cooking up some evil brew. What they have
underestimated is how many of us are onto them and
their wicked machinations.
best,
Tom K
Rhody:
Hello Bill:
I cut this paragraph out of yesterday's Midas. If
I am reading this correctly, it is saying that the
LBMA is a physical gold market. This I do not understand.
"The dog days of summer, for sure. Same
Gold Cartel drill, for sure. Once again, the cash
market took the gold price higher in London: AM Fix
$439.00 PM Fix $438.85. As repeatedly noted by many
Café members, as soon as the physical market pricing
is over for the day, the cabal forces take gold lower
on the Comex."
Here's why:
As you can see, 16 Moz of gold
pass through the LBMA every DAY. There
are 312 business days in a year and that means the
total gold transferred through the London "physical
market" would have to be 16 Moz X 312 = 5 billion
ounces, with a "b". If one says that this trade is
a physical gold exchange, then one is saying that
all the gold that has ever been produced passes
through the LBMA yearly. I think this is
rather unlikely. As you are well aware, a minimum
of 1 billion of this is in the form of jewelry and
art objects, and about one quarter of all the world's
gold has ended up in India, where it is never re-exported.
I am not splitting hairs here. I just don't think
London is a physical market. I know this market is
not futures, but I have never been able to determine
what form of "gold" trades occur on the LBMA. Perhaps
you can find out. Could this trade be in the form
of churning lease contracts?????
The situation in silver is even
worse. As you can see from the graph, silver transfers
are 100 Moz per day. Times 312 business days yields
a total physical trade of 31 billion ounces per year.
Since total world output is 600 Moz per year, I have
difficulty believing this is physical metal exchange.
It gets worse.
There are only about 400 Moz
of BULLION stockpiles in the entire world, tops.
To make London a "physical" market,
the entire world bullion stockpile would have to churn
through London every four (4) days, and that includes
COMEX stockpiles. Every day, 6 to 7 tractor trailers
loaded with silver would have to be moving around
in the London financial district. If you go there,
you won't see even one. I know I have beaten this
topic to death already, but I think it would be very
interesting to know what form the LBMA "bullion" trade
takes, because it looks like more paper metal to me,
but what kind?
Regards, Rhody.
Rhody,
All I said was the gold deals around the world are
almost all priced on the PM Fix. This is why it is
important. It is where the large buyers and sellers
congregate to do their business. When The Gold Cartel
wants to hit the price, they often wait until this
buying is concluded, thus making it easier to bring
the price down on the Comex.
MIDASAdrian is back this morning:
Bill,
Bring on the Clowns!
Just like in a real bull fight there
are always some clowns to distract the bull when the
Matador is down. There are certainly some clowns this
morning in this epic bullfight. The DOW takes a dump,
the dollar can’t wait to tank, the world’s biggest
gold producer just this week said they produced 18%
less gold than last year, the biggest gold consumer
in the world is about to enter the peak buying season…..
and here come the Clowns, selling probably their last
ozs of gold.
Bring them on! Let them dump their gold,
we’ll take it all. Just like in the real bull fights
they are a distraction, not the real show. Sometimes,
though, the clowns are so stupid and careless they
get gored to death! I have a feeling that August 26th
could be very auspicious.
Cheers
Adrian
From Mark O’Byrne in Ireland:
Hi Bill,
Congrats Bill on Gold Rush 21. The message is definitely
getting out there .
We posted all material on Gold Rush 21 on www.gold.ie and www.goldinvestments.org and in our
weekly newsletter which goes out to many of the major
investment analysts in major institutions in the world
and to many financial journalists in Ireland and the
UK.
Posted Embry's interview which was great. Embry is
excellent - articulate and matter of fact and in our
television age, people trust or believe TV to be more
authoritative than the written word.
I have thought we were on the verge of the big breakout
for a while and have been proved wrong but time is
on our side and $500 and then the next stage of this
multi year bull market is nigh.
The US Property Bubble appears to have already severely
burst but while being reported it is being spun with
misleading headlines by the sections of the media.
Check out these stories posted on www.gold.ie
http://www.usatoday.com/news/opinion/editorials/2005-08-24-our-view_x.htmUS Commerce
Department: Median Home Price down from $218K to $204
- Leonhardt, NYT via IHT, 26-08-05
http://www.iht.com/articles/2005/08/25/business/rent.php
Commerce Department
Reports US Median House Prices down 7.2% in July
- Fox News
http://www.foxnews.com/story/0,2933,166619,00.html
Dot.com
bust echoes in nation's housing boom -
USA Today, 26-08-05
Is The Housing Market
About to Bubble Over? - Buckner, Fox News,
26-08-05
The Beginning to
the End of the Housing Market? - Sjuggerud,
Investment University, 26-08-05
http://www.investmentu.com/IUEL/2005/20050825.html
Sjugerrud sums it up and he has a frightening US property
chart.
Well done again on Gold Rush 21 Bill,
Mark
On the markets:
I've been suspecting all week, given
the overnite rallies in gold in the access market,
and the blatant smack of gold using paper the instant
that comex opens, that perhaps the character of the
spec long in the COT report might be a bit different
this time. Moreover, when they decided to attack silver
the last few days after several days of trying to
force gold down and failing, I figured the cabal was
hoping to create a collateral sell-off effect in gold.
It did not happen. The tick by tick trading action
today in gold smells completely of someone out there
trying to knock down gold and then covering shorts.
I doubt this is your commercial signal failure, but
I believe that the cartel has failed to use the obviously
artificially contrived COT structure (thank you trader
Dan for your brilliant COT articles) to flush out
a large percentage of the large spec longs. Also,
for what it's worth, I've finally discovered the CBOT
silver contract. It suffers immensely from liquidity,
but it trades electronically and only requires a $1620
entry margin. I'm now using it for my "core" silver
contract holdings. Thanks for all you do Bill.
Dave in Denver
It didn’t take long for this new
Aussie Café member to catch on. What is taking the dopes
in the mainstream gold world so long to "get it?"
Hello Bill,
Something stinks about the moves in gold and silver
over the last few days.
Despite oil hitting US$68, a weakening
US dollar and a raft of horrible economic reports,
24 hour gold was unable to stay past US$440. It should
have been soaring.
But every time gold went up a few
dollars it immediately was met by heavy selling.
In a very bullish scenario for gold,
this did not look like normal market action to me.
To me it looked like US$440 was being
desperately defended, despite the fundamentals, and
despite the buying demand, in an attempt to prevent
an assault on US$450 and then higher prices.
I reckon you can bet your last dollar
if it was just as easy to manipulate the oil futures
market we’d have oil trading well under US$40 right
now.
On bullish news for oil, oil effortlessly
rises 1%, 2% and at times even more.
It doesn’t like gold have a huge
battle to increase 1%, often being sold off on the
same day after not even initially moving up 1%.
Something stinks.
What is happening now is so blatant.
It doesn’t even appear to be hidden anymore. There
are white collar crooks out there who think they have
the right to decide what the "free" market price for
gold is.
They should be prosecuted, fined
and thrown into jail.
Best wishes,
Neil Davis
Thank you Peter Spina of www.Goldseek.com for posting:
How do we know central banks
rig the gold market, and what can we do about it?
By: Chris Powell, Gold Anti-Trust Action Committee
Inc.
Remarks by Chris Powell
Secretary/Treasurer, Gold Anti-Trust Action Committee
Inc.
at Gold Rush 21
Dawson City, Yukon Territory, Canada
***
For those who have not read the commentary
by my special colleague, please go to:
http://news.goldseek.com/GATA/1124990882.php
One of my favorite people in the gold
world is Adam Fleming, former Harmony Gold chairman,
and now chairman of Wits Gold in South Africa.
I will never forget the day when Reg
Howe and I were at the FT Gold Conference in 2000.
There was a lull in the speaker flow. Right before
the GFMS person was about to present, Adam stood up
during the break and turned to Reg and I, saying:
"GO GATA." Adam has been a GATA supporter from the
get-go.
Adam, who took time from his summer
vacation to come to Dawson City, was one of the speakers
at GR 21 and gave a splendid presentation. He touched
on Wits and why it is worth a serious investor look.
Here are some bullet points from Adam's Dawson City
speech:
Got my attention, as I am already a
shareholder, and will be participating in their coming
IPO. Adam tells me they "hope to have an IPO in Johannesburg
with a possibility of a secondary listing on the TSE
in the first quarter of 2006." Their website is www.witsgold.com so people can keep in touch
with their progress towards that listing. Anyone interested
in participating in the offering should contact Wits
through that medium.
I love how Michel Roy, CEO of ECU and
another participant at GR 21, communicates with his
shareholders:
Dear Shareholders,
The official numbers for the last
Quarter show the significant progression made in recent
months. We intend to maintain this growth curve for
the rest of the year with extra production scheduled
to come on stream in early September and pyrite concentrates
to be produced on a regular basis in the fourth Quarter.
None of the other targets has
been forgotten as shown by the data on densities which
will result in a significant increase in resources
at no cost. Also we are progressing in the drift to
reach the San Mateo mine on the sixth level and have
encountered several veins which will be evaluated
over the next few weeks
If some people still doubt that we are
a real producer, one has to only consider the revenues
for the Second Quarter versus operating costs for
the same period, keeping in mind that ONLY June was
a normal month, May was about ¾ capacity while April
was at 50% at the most to realize that real progress
is being achieved on a month to month basis on the
operations side. Since the end of June, we did another
round of modifications and adjustments in July and
WE ARE already reaping the rewards in August. As for
September, a brilliant idea from our mining department
will be implemented to raise the production level
by 20%. This undertaking will only require one week
to implement (7 weeks less then we originally thought)
at a fraction of the initial planned cost (75% less
then we originally thought). Needless to say, we are
excited at the prospects these modifications will
contribute to our bottom line for the full Q4 of this
year.
Thank you for your continued support
and we will continue to put our best efforts forward
to create shareholder value.
Truly yours,
Michel
Chuck checks in:
Bill:
This is the only word that comes popping in my little
head. The action of the past couple of weeks is too
bizarre. We have had the golds opening higher each
day and then selling off. The same with the stock
market. We have now had a sharp drop in silver even
though there is an obvious squeeze in copper and oil.
The bond rates have dropped sharply in spite of these
squeezes.
Obviously, something very strange and
peculiar is afoot and it is not good. It appears as
though the financial stocks could cave in here at
any moment. We might limp through next week until
the holiday but I wouldn't bet on it. Scary! Chuck
I think it’s scary too Chuck, and it’s
how I picked the theme of today’s MIDAS. The financial
landscape of US markets is likely to change radically
in the months to come.
The gold shares were lower with the
XAU finishing at 93.87, down .29. The HUI close was
incorrect – not sure what the right number was.
Based on the emails I have been receiving,
veteran Café members gold/silver shareholders are
becoming very anxious over their gold/silver company
investments. The fatigue factor of nearly a two-year
bear market is beginning to take its toll.
Those feelings are only natural. Hang
in there. Gold, silver and the shares remain THE historic
investment opportunity of a lifetime. We have years
and years of good times ahead of us.
GATA BE IN IT TO WIN IT!
MIDAS
Appendix
Mint Confiscates Double Eagle Gold Coins
from Dealer Seeking View on Authenticity
By The Associated Press
via Newsday, Garden City, L.I., New York
Thursday, August 25, 2005
http://www.newsday.com/news/politics/wire/sns-ap-rare-coins,0,2382641.story?coll=sns-ap-politics-headlines
PHILADELPHIA -- The U.S. Mint seized
10 Double Eagle gold coins from 1933, among the rarest
and most valuable coins in the world, that a jeweler
says she turned in to determine their authenticity.
Joan S. Langbord plans a federal court
lawsuit to try to recover them, her attorney, Barry
H. Berke, said Wednesday. Langbord found the coins
among the possessions of her late father, longtime
jeweler Israel Switt, who had acknowledged selling
some of the coins decades ago. She now operates her
father's business.
David Lebryk, acting director of the
Mint, had announced in a news release that the rare
coins, which were never put in circulation, had been
taken from the Mint "in an unlawful manner" in the
mid-1930s and now were "recovered."
The coins, which are so rare that their
value is almost beyond calculation, are public property,
he said.
Berke said Mint officials couldn't prove
the coins had been stolen, or were subject to forfeiture.
But Mint officials said Thursday the double eagles
could not have legally been taken from the Mint.
In 2002, Sotheby's and numismatic firm
Stack's auctioned off a 1933 Double Eagle coin for
$7.59 million, the highest price ever paid for a coin.
That Double Eagle, believed to have been part of a
collection belonging to King Farouk of Egypt, surfaced
when a coin dealer tried selling it to undercover
Secret Service agents.
After a legal battle, the dealer was
permitted to sell the coin at auction on the condition
he split the proceeds with the Mint. One of the terms
of the settlement was that it would set no precedent
for any future double eagle that appeared.
In its statement, the Mint said officials
were still deciding what they would do with the seized
coins, which are being held at Fort Knox. They said
they had no plans to auction them but would consider
saving "these historical artifacts" for public exhibits.
Other double eagle coins seized in the past were melted
down.
Double Eagles were first minted in 1850
with a face value of $20. The 445,500 coins minted
in 1933 were never put into circulation because the
nation went off the gold standard. All the coins were
ordered melted down, but a handful are believed to
have survived, including two handed over to the Smithsonian
Institution.
Langbord declined to discuss how the
coins might have wound up with her father, who operated
an antiques and jewelry shop for 70 years and died
in 1990 at 95.
The Mint contends Switt obtained a cache
of the gold coins from his connections at the Mint
just before they were to be reduced to bullion in
1937.
Switt admitted in 1944 that he had sold
nine Double Eagle coins, but he was not charged in
connection with those transactions, according to the
Mint.
The family attorney said the coins were
found recently, and Langbord and her son, Roy, notified
the Mint of the discovery in September. Mint officials
asked to authenticate the coins, then confiscated
them after doing so, Berke said.
He contended Langbord and her son never
relinquished their right to the coins.
But Mint officials said Thursday that
Berke was told from the beginning that the coins would
not be returned because they were the government's
property.
-END-
From www.financialsense.com:
IRANIAN OIL
BOURSE COULD KILL THE US DOLLAR
by Toni Straka
August 23, 2005
Can the Iranian Oil Bourse become the catalyst for
a significant blow to the position of worldwide power
the US Dollar enjoys? Manifold supply fears have driven the price of crude oil near-wards its
recent highs of $67.10 which are also only a notch
below historical records in real dollar terms. With
the world facing a daily bill of roughly $5.5 billion
for crude oil at current price levels it becomes apparent
that sellers and purchasers of the black gold are
looking into all ways that could lead to a financial
improvement on their respective side.
While the worldwide bottleneck of inadequate
refining facilities and partly dramatic declines in
production - for example in the North Sea - are two
factors that cannot be eliminated in the short term
there is one area left which could result in smiling
faces of oil producers and (most) buyers likewise.
Non US dollar thinkers are the victim of a transaction
cost in the oil trade. The necessary conversion of
local banks can be considered a hidden tax, charged
and enjoyed by the banking sector.
Until now oil is solely priced, traded
and paid for in the greenback on both markets in London
and New York. The Treasury Inflow Capital data from mid-2005 show that OPEC members have parked only a skimpy
$120 billion in direct dollar holdings which are almost
equally split between equities and debt paper. This
is a clear indication that oil producers are investing
their windfalls elsewhere. The yield spread between
US and EU debt papers in favor of the EU is clearly
another hint where the petrodollars might flow after
conversion.
The Iranian Oil Bourse (IOB) will become
a factor that could further unsettle the dollar's
dominant position.
Especially in the case of Iran it does
not make sense to accept dollars only for its much
desired commodity. Being seen as a hostile country
by the USA for the intention to build its own nuclear
reactors one wonders whether the new IOB will not
try to attract other buyers than Americans who are
particularly unwelcome in that corner of the globe.
Iran has recently announced that the new oil exchange
will start up its computers in early 2006.
The IOB can count on two sharp arrows
in their holster. It can - and probably will - lure
European buyers with oil prices quoted in Euros, saving
them transaction costs. And it can strike barter deals
with oil-hungry giants like China and India who have
a lot of products and commodities to offer. I doubt
that hamburgers and legal services will be considered
adequate collateral for the world's most after-sought
resource.
A Renunciation Of The $ Is Worse
Than An Iranian Nuclear Attack
Steering away from the almighty commodity,
currency and commodity currency - the US dollar -
can have a deeper impact on the US economy than a
direct nuclear attack by Iran. The permanent demand
for dollar denominated paper stems to a good part
from the fact that until now almost all resources
of the world are quoted in it.
While this has led to the Eurodollar
market in the 1970's new terms of trade could ring
in the demise of the dollar as the premier reserve
currency. With the world economy depending so much
on oil, the black gold itself can be seen as a reserve
currency that will be handed out only against the
best collateral in the future. The Fed San Franciscos's
recent paper about the
progress of the diversification of international central
bank's reserves shows that the dollar position is
on the decline in many countries. NOTE: China
has officially declared to diversify a part of its
forex holdings into oil here .
Iran holds a strong hand as the #2
producer of crude behind Saudi Arabia. Politicians
there will also keep in mind that dollar deposits
might become a burden in the future when the US will
step up its current war of words to the level of economic
sanctions in the crusade against nuclear power plants.
Money in the bank does not help when you have no access
to it.
An abdication from the current status
quo has only one real enemy: the USA, where less than
five percent of the global population consume roughly
one third of global production. Oil in Euros would
benefit several million people more in the EU and
its trading partners though.
And it would loosen the grip the
USA has on OPEC members. Thinking of the rapid growth
of hostilities between the USA and Arab nations in
recent years a renunciation of the dollar appears
to be more than just a wish in Arabic dreams.
As this development poses a very
real and big danger to the superior status of the
greenback and the interests of the USA the "president
of war" can be expected to steer a close reach against
the winds blowing from the Middle East. One may be
reminded that the Iraqi despot Saddam Hussein had
entered into discreet talks with the EU, proposing
to sell his oil for Euros. That was in the year before
the first oil war of this century.
In my conclusion the IOB this way
could help the Euro to become the interim primary
reserve currency before China and India will rise
to the first two slots in the global economic ranking
in the next few decades, an issue discussed in the
post "What will be the next big reserve currency
."
A decline of the dollar's position
in oil trading might also open the floodgates in other
commodity markets where the dollar is the medium of
exchange but where the USA has only a minority market
share. A global economy driven by tough efficiency
demands in the light of thin profit margins almost
everywhere is a good primer for accounting changes
in other commodity markets. This process could begin
in resources like steel and energy and spread to all
other resources that are marketed globally. The world
outside the USA has a lot to gain and nothing to lose
from it.
© 2005 Toni Straka
Editorial Archive <../../contributors.html>
CONTACT INFORMATION
Toni Straka
Vienna, Austria
Blogspot l Email <mailto:tos1010@yahoo.com>
About the author: Toni Straka, CEFA,
aka The Prudent Investor, is a Vienna, Austria-based
independent financial analyst and portfolio manager,
who worked as a financial journalist for over 15 years
and now evaluates global market trends. He runs a
blog, The Prudent Investor - seeing too many bubbles
that focuses on global macroeconomics and the global redistribution of wealth.
***
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