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The last on gold is $881.50.
The following is another educational and informative article by Dr. Darryl Schoon. Both Dr. Schoon and Jim Sinclair advise us all to email representatives in the House expressing our opinions considering the proposed bailout of financial institutions.
Check out jsmineset.com for further comments concerning the bailout and a list of Republicans who voted for it for possible email comments.
What’s Next?
By Darryl Robert Schoon
Sep 30 2008 12:01PMThis article was written just prior to the announcement of the rejection of the bailout bill but has been qualified to reflect current conditions. Celebrate today’s victory! It is a victory for all of us, whether we know it or not. Much thanks to Ron Paul and all the brave souls both Republican and Democrat who withstood their party’s commands and instead sided with us, the people of the United States of America!
Darryl Robert Schoon
From a Reader on 9/25/08:
The town of 2,000 where I reside is functioning normally. The people haven’t a glimmer or a clue or a suspicion of what America is facing and will be undergoing – it is painfully bizarre, almost maddening.
My “nightmare dreams” since January have concerned soon-to-occur events in the U.S. I cannot stop their flow. But I am often reminded of your prophetic statements made some nine months ago in the “Christmas on Threadneedle Street” essay. In your essay two salient and prescient paragraphs were written and both are relevant today:
“The triumph of the moneylenders over government is almost complete and because of it, in the coming crisis governments will protect the interests of bankers, not the people.”
“As we watched the New Year’s merriment from the Langham, I could not help but be reminded of the play, Cabaret, we had seen earlier that evening. Cabaret, set in 1931 Berlin, begins on New Years Eve and ends with the participants awaiting their respective fates in Hitler’s Germany. Most were in denial about what was to occur. The same is true today.”
Thank you for writing that essay, it deeply affected me at the time and still does.Michael Thomas Bucci
Last New Year’s Eve, Martha and I were in London and from our room at the Langham Hotel we watched the fireworks over the Thames. That night, although England was celebrating the coming New Year, they were doing so in ignorance of what was to come—a financial cataclysm that would destroy the very system that had transformed their small island into a world power. Unbeknownst to the British, The City, the banker’s bunker, would soon be in shambles.
We were in London again last June and by then the mood had changed, the optimism that the wealth effect from the financial services industry—since when was parasitoidism considered an industry?— would sustain England was no more. By June, the troubles of The City and the collapsing British real estate bubble had stripped bare the fear that lies beneath hope.
The British bubble had burst and in more ways than one. In many ways, the British and Americans have shared and will continue to share a common fate, albeit with little of the power and glory of yesteryear. The immediate future of both England and the US will be in stark contrast to what was previous. The past will not be prologue.
BEING RIGHT IS BITTER MEDICINE IN BAD TIMES BEING WRONG HOWEVER WILL BE FATA.L
All of us, whether aware, asleep or in deep denial of our present circumstances are in the same boat, a boat that is rapidly sinking. Most people, however, have little awareness or understanding of what is happening. Michael Thomas Bucci’s recounting of his community’s ignorance is not unusual, it is the norm.
All of us who are aware of the reasons for the collapse of our economies are shocked by this bifurcated reality. We and those not yet aware exist in worlds as separate as black and white. What we share, however, is a mutual inability to change what is.
Those ignorant of what is to come, however, will suffer in far greater measure than those who understand what is happening. In the not too distant future, economic fear and uncertainty will be replaced by abject terror and despair; and if you don’t understand the now changing world, you will soon be its victim.
What is happening is an economic rendering that will destroy credit markets as we know them. The end of an era is at hand, the British banking system built on paper money, credit and debt is collapsing from within. Its collapse is just beginning and by its end, everyone will be affected.
We are witness to the end of an empire, an empire built on debased currencies, the substitution of debt and credit for gold and silver, and human greed. In the approaching end, the dying and damaged system built by bankers in collusion with governments will fall by its own hand.
The cost of prolonging its stay, however, will be steep. The attempted US $700 billion bailout of the bankers is only one step in the escalating and futile attempts of governments and bankers to preserve their immense power and wealth. It would do us well, especially now, to remember that our welfare is not their concern.
A MÉNAGE A TROIS BETWEEN GOVERNMENTS, BANKERS AND CITIZENS SOMEONE’S GETTING SCREWED (NOT IN A GOOD WAY)
It is often said that the road to hell is paved with good intentions and while that may sometimes be true, it is also true that hell is reached far more quickly when the road is paved with evil.
The road on which we now travel was built by bankers and governments together. The bankers’ purpose was to indebt society, e.g. governments, businesses, and producers and savers, whereas governments’ purpose was to gain as much power as possible; and if the original intent of both was not evil, it has certainly crossed that line since.
The bankers achieved their first step towards our present nightmare when the King of England in 1694 delivered the English people into the hands of the bankers. In return for the right to spend all he wanted, the King gave bankers the right to issue England’s currency as paper money and to charge compounding interest on the debts. This was to eventually indebt the English people into perpetuity.
The English then became directly responsible for the King’s wars and the increasing demands of government fed by its central bank, the Bank of England. Consequently, their debts became so great that that a new form of taxation had to be levied upon the English people—the income tax.
The tax on income was first implemented in 1799, in England, as a temporary tax,
as a source of revenue needed to finance the war against the French Army, lead
by Napoleon. It was repealed in 1816, after the English triumph in the Waterloo
Battle, due to strong opposition by society and the Parliament. The permanent
implementation of the tax on income occurred only in 1842, justified by the
increasing deficit of the English Treasury.Luis Fernando Wasilewski
The English invention of the income tax, like their debasement of money and promotion of credit and debt, has now spread—as terrible ideas often do—around the world. Elected governments have continued this royal tradition, using the income tax to obligate the citizenry beyond their ability to repay; and, now, as a consequence citizens everywhere are being taken advantage of by those they elect.
Of this indebting, Thomas Jefferson warned almost two centuries ago:
To preserve [the] independence [of the people,] we must not let our rulers load us with perpetual debt. We must make our election between economy and liberty, or profusion and servitude. If we run into such debts as that we must be taxed in our meat and in our drink, in our necessaries and our comforts, in our labors and our amusements, for our callings and our creeds, as the people of England are, our people, like them, must come to labor sixteen hours in the twenty-four, give the earnings of fifteen of these to the government for their debts and daily expenses, and the sixteenth being insufficient to afford us bread, we must live, as they now do, on oatmeal and potatoes, have no time to think, no means of calling the mismanagers to account, but be glad to obtain subsistence by hiring ourselves to rivet their chains on the necks of our fellow-sufferers.
Thomas Jefferson to Samuel Kercheval, 1816.
No earthly consideration could induce my consent to contract such a debt as England has by her wars for commerce, to reduce our citizens by taxes to such wretchedness, as that laboring sixteen of the twenty-four hours, they are still unable to afford themselves bread, or barely to earn as much oatmeal or potatoes as will keep soul and body together. And all this to feed the avidity of a few millionary merchants and to keep up one thousand ships of war for the protection of their commercial speculations.
Thomas Jefferson to William H. Crawford, 1816.
Truth as well as human perfidy becomes more obvious with time’s passage.
We asked for signs
the signs were sent
Lyrics by Leonard Cohen
Anthem from the album The FutureTHE SLAVES ARE GETTING RESTLESS THE DEFEAT OF THE BANKERS BAILOUT BILL
Bush’s $700 billion bailout bill has been defeated. It should have been named BSAAAAAA, for Bankers Screwing America Again And Again And Again—and no, all those A’s are not redundant and yes, I could have used another word but it would have been less acceptable.
The Rasmussen poll showed only 11 % of Americans supported the bill that would bail out the very bankers responsible for the destruction of the US economy. The passage of the banker’s bailout bill indemnifying investment banks would have been the same as bonusing the Nazis after WW II.
In Christmas On Threadneedle Street, I wrote that when the king and the moneylenders made their bargain, the king was believed the more powerful; and, at the time, he was. In the long term, however, the bankers got the better of the bargain. Today, investment banks are more powerful than governments.
The king to the banker did say
Tis I who ride you this day
This day it is true the banker did say
But tomorrow tis I who ride you
From Christmas On Threadneedle StreetIn 1999, England’s Chancellor of the Exchequer Gordon Browne sold 415 tonnes of England’s gold reserves at the very bottom of the market, costing England billions in losses along with the loss of its bullion.
The rumor was that investment bank Goldman Sachs had a 1,000 tonne short position in the market and had bet the price of gold would go down. But when it went up Goldman Sachs could not cover. So, Gordon Browne sold 58 % of England’s gold reserves to help out Goldman Sachs by keeping down the price of gold. Gordon Browne is now the Prime Minister of England.
At the time, the CEO of Goldman Sachs was Henry Paulson. In less than 10 years, Paulson cost has England the majority of its gold reserves and may cost America trillions more before it’s over. Perhaps Paulson should be reclassified as a danger to the community or at least a gross public nuisance because of what he has done to England and the US. With his position comes responsibility—or does it?
1) “The triumph of the moneylenders over government is almost complete and because of it, in the coming crisis governments will protect the interests of bankers, not the people.”
From Christmas on Threadneedle Street January 5, 2008
The following is taken from today’s Wall Street Journal, Sept 29, 2008:
To some, the government’s decision to resort to a bailout represents a tacit admission: For all officials’ desire to allow markets to punish the risk-taking that engendered the crisis, banks have the upper hand.
WHAT’S NEXT?
Our present problems began with the establishment of the Bank of England in 1694 which substituted their paper money for England’s gold and silver. Those troubles gained momentum when US bankers did the same in 1913 with the creation of the Federal Reserve Bank in the US.
From these central banks issued the first debt-based paper money that was to eventually be leveraged beyond the capacity of capital markets to absorb or contain. Within 20 years after the Federal Reserve was created in the US, the Fed’s loose credit policies plunged the world into the Great Depression of the 1930s.
Now, in 2008, the same loose credit policies of the Federal Reserve are again about to plunge the US and perhaps the world into another Great Depression even more destructive than the first. The banks may not survive, indeed they are already failing—and neither may the governments.
The coming together which led to the present falling apart was the collusion of banks and governments to substitute paper money for gold and silver. Therein lies the key to survive what is to come, an end that is already in motion.
Last year on New Year’s Eve, Martha and I were in London. This year we will be in New York City. I wonder what the mood of Americans will be then, on New Year’s Eve when they bring in the New Year. Hopefully, it may be a continuation of what happened today.
Today’s repudiation of Wall Street’s brazen demand to be bailed out by American taxpayers’ may be the beginning of America’s long needed and long awaited renewal. Americans should now check on how their Representatives voted on the bailout bill.
If they voted against the bailout, they should be congratulated. If they voted for it, they should be told bluntly and strongly they will not receive your vote in the future. Remember, it’s all about jobs and their jobs are at stake too.
The rebirth of America will only happen when our system of central bank debt-based money imported from England is thrown out; and, if England, too, wants to survive, the English people may well consider doing the same. Once upon a time, gold and silver were replaced by paper money. The opposite can happen as well.
The road to the future must be repaved if we are to survive the present crisis and coming collapse. Gold, silver, and faith must be our pavement of choice and, of the three, faith is the most precious.
Darryl Robert Schoon
http://www.survivethecrisis.comLast on gold is $893.90
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Out Of StockGold $876.90
Silver $13.74Strange things are happening with the conduits of gold and silver from mines to the public in the form of bullion coins. It all started a few months back when the US Mint halted sales of the one ounce gold eagles because of a shortage of blanks. Then the Mint stated that they were going to resume those sales but they would be allocated. Then a few days ago the Mint halted sales of the one ounce gold Buffalo coins, saying an exhaustion of supplies.
Now we have the following report in Ireland that government mints and refiners had stopped offering new supplies.
Breaking News Business Ireland
Gold and silver dealer reports an ‘unprecedented’ shortage of metals
Sunday, September 28, 2008 By David Clerkin, Markets Correspondent
A surge for demand in gold and silver has resulted in an unprecedented shortage of the metals for retail investors in recent days, according to Gold and Silver Investments, a Dublin-based firm that allows retail investors to speculate on movements in the value of precious metals.
Gold and Silver Investments director Mark O’Byrne said the supply of gold and silver available for small retail investors suffered a dramatic deterioration within hours on Friday, as wholesalers reported that government mints and refiners, the primary suppliers of the metals, had stopped offering new supplies.
‘‘It’s absolutely unprecedented,” said O’Byrne, who said the shortages were likely to drive up the costs of gold and silver in the secondary market.
————————–Gold is and will always be the ultimate power. Do governments believe that there is too much gold and silver going into the hands of the public? All this is taking place within the global meltdown of OTC derivatives. The fiat currency system is under attack when the public can’t get enough precious metals in exchange for their currencies.
Or could it be something more basic and simple? Could it be that the sellers of physical gold and silver don’t believe the last posted prices of these metals?
On E-Bay, for example, the silver eagle one ounce coins sell for around $20 each. If you buy the coins from golddealer.com in Englewood, California the price is $18 a coin. At that price you are paying a hefty 31% above the last silver COMEX price in NY of $13.74.
In regards to the physical bullion gold coin market no comparisons are available for US one ounce coins at golddealer.com because they are not offered. They do have some 1/2 ounce gold eagles which are for sale at $480 each which is the same as paying $960 an ounce for gold which is a 10% premium above the last price.
Are people wising up to the rigging of these markets? COMEX supposedly has gold and silver on deposit in their vaults to back up futures trading in these items but are they audited by an independent concern?
Mike related the story to us some time ago about his friend that wanted to take delivery on a gold contract for 100 ounces and was told to either settle in cash or exchange his contract for another one, further out in time. That didn’t make sense to him and it wouldn’t make sense to any reasonable person, either.
What’s interesting is the London Bullion Market is basically a cash and carry physical market. Do shenanigans go on in this market too as is suspected of COMEX? How about the TOCOM in Japan?
Are fiat currency governments all rigging the precious metals to dampen investor demand? You can bet Russia isn’t. It has been again rumored that they will be backing the Ruble with gold and some form of convertibility into it.
Concerning China, they are the world’s largest producer of gold and may not choose to export it at questionable world prices. In 2007 China mined 276 tons of the metal or 9,700,000 ounces. Their domestic production is expected to increase while many country’s production totals are in decline.
In conclusion it appears appropriate to view the COMEX prices for both gold and silver with suspicion and the transacted prices of the physical metals as creditable.
Last of gold is $877.80
The following is an excerpt from the Casey Research Saturday morning comments.
“Some of the largest wholesalers in the world are out of all bullion product except for exchange bullion product – 100 ozt and 400 ozt gold bars and 1,000 ozt silver bars. They cannot supply South African Krugerrands, American Eagles and Buffaloes, Canadian Maples, Austrian Philharmonics, Chinese Pandas, Australian Nuggets (all 1 oz.). They cannot supply 1 oz. or 10 oz. gold bars or 1, 10 and 100 oz. silver bars. And I have confirmed they cannot sell any European or world gold coins such as British sovereigns, francs, marcs, Mexican pesos etc. etc.
“They have confirmed that there is no physical supply at all from the primary marketplace – large refiners and government mints. Worryingly they are being informed that this is not a temporary problem and there are no supply side commitments and there is little in the pipeline for the foreseeable future due to excessive and unprecedented demand. Secondary supply from the public and retailers is nearly non existent as there are nearly no sellers and nearly all buyers.
“Bullion shortages and the confluence of unprecedented demand and limited supply in conjunction with macroeconomic, inflation and systemic factors is leading to extremely bullish conditions for the gold market – probably even more bullish than in the 1970s when gold rose some 3,000% from $35 to over $850 in just 9 years.”
US Mint Suspends Sale of 24-Karat Gold Coins. Read this story at: http://hosted.ap.org/dynamic/stories/M/MINT_GOLD_COINS?SITE=MOSPL&SECTION=HOME&TEMPLATE=DEFAULT
Gold $877.80
Silvr $ 13.31
Gold/XAU Ratio 6.35
Gold/Silver Index 65.95Pierre Lossande made some observations in the September 19, 2008 Gold Report.
Mr. Lassonda is the Chairman of the Board of Franco-Nevada. Pierre is one of Canada’s most astute gold analysts.
“What really bothers me is that in the 1980’s and 1990’s, we saw three to five discoveries of 5-20 million ounces ounces each and upwards of 30 to 50 million ounces(of gold) a year. That is what makes or breaks an industry. There are no discoveries of that magnitute now.”
“Gold supply fell by 4% in the first six months of this year. This will be the seventh year in which production has dropped. It’s probably going to fall more in 2008 than it has in prior years. Australia, Indonesia, Canada, and the U.S. are all experiencing declines. Combine this with the drop off in central bank sales. 2008 will have the lowest central bank sales on record because the bankers have all had theirs head handed to them. They all sold gold for $250, $350, and $400—losing tens of billions of dollars. We could soon reach the point where central bank sales will be non-existent. That represents a loss of 500 tons of gold a year in a 3,000-ton market. That’s huge—nearly 20% of supply. Recycling has declined in the last six months too. Even though demand fell when gold hit $900 and $1,000, the supply has been shrinking just as fast. I don’t see gold dropping much below $800—plus or minus $50.
——————————-The last on gold is $873.50
News > US Markt > Wirtschaft
Interpretation of the following article: The Chinese will say whatever has to be said to keep the dollar stable as they qietly and slowly make their way to the exits. I think the Chinese are very very sorry that they ever got themselves into holding such vast quantities of US dollar denominated financial instruments.
25-09-2008 07:41 U.S. Financial Crisis Impact Could Worsen – Chinese Press
UNITED NATIONS (Thomson Financial) – Cash-flush China weighed in on the U.S. financial crisis on Wednesday, with Premier Wen Jiabao warning its international impact could become ‘more serious’ and stressing the need for concerted efforts to contain the turmoil.
He indicated China, the world’s biggest holder of foreign reserves and second-biggest holder of .U.S treasury bills, was ready to help in an international bid to defuse the turmoil that has rocked financial markets across the globe.
‘The ongoing financial volatility, in particular, has affected many countries and its impact is likely to become more serious,’ Wen told the UN General Assembly.
‘To tackle the challenge, we must all make concerted efforts,’ Wen told the UN meeting at the tail end of his address, which touched on various issues, including a pledge to push ahead with reforms to fuel growth in the world’s most populous nations.
U.S. President George W. Bush, who is also attending the UN General Assembly, had telephoned Chinese President Hu Jintao on Monday to brief him about the financial turmoil and his administration’s bid to stage a $700 billion Wall Street bailout to stem the crisis.
Hu told Bush that China welcomed Washington’s efforts to stabilise the U.S. financial markets and hoped they succeed, according to Beijing state media.
But as Wen spoke on Wednesday at the United Nations, the Bush administration remained locked in a dispute with U.S. Congress over the massive bailout package aimed at buying distressed mortgages and mortgage-related securities from financial institutions.
Financial markets, including in China, have been volatile since the US crisis peaked this month, triggered by the bankruptcy of Lehman Brothers and a Federal Reserve rescue of insurance and financial giant AIG last week.
Wen hinted that China would help in any international bid to defuse financial contagion arising from the US crisis, saying this was not the time for ‘hostility’ or ‘prejudice.’
‘So long as people of all countries, especially their leaders, can do away with hostility, estrangement and prejudice, treat each other with sincerity and an open mind, and forge ahead hand in hand, mankind will overcome all difficulties and embrace a brighter and better future,’ he said.
‘China, as a responsible major developing country, is ready to work with other members of the international community to strengthen cooperation, share opportunities, meet challenges and contribute to the harmonious and sustainable development of the world,’ he said. tf.TFN-Europe_newsdesk@thomsonreuters.com ms1
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Last on Gold is $877.70
The following article was written by John Crudele of the New York Post.
Thursday, September 25, 2008
Last Update: 10:20 PM EDTBAILOUT PLAYS INTO BERNANKE’S DEFLATION FIGHTING THEORY Posted: 4:08 am
September 25, 2008IS Ben Bernanke deviously planning to run the nation’s printing presses overtime in order to get out of the jam caused by Wall Street?
Wait, hear me out before you scoff!
I know the guy looks harmless enough. And with Treasury Secretary Hank Paulson by his side, the pair could be a couple of doctors whose diagnosis you wouldn’t dare second-guess.
But back when Bernanke was a mere governor of the Federal Reserve he now leads, he told a group of Washington economists that he’d fight deflation by printing money.
“The US government,” said Bernanke in 2002, “has a technology, called a printing press – or today, its electronic equivalent – that allows it to produce as many US dollars as it wishes at essentially no cost.”(The cost will be born directly by the people of the US by way of an indirect significant tax which is not free to them but a liability in the form of inflation)
You have to understand, that’s like me saying the government should censor my column. Or a priest saying he’ll get his next sermon from George W. Bush.
It’s heresy for anyone associated with the Fed to say that we can just print money if we get into a jam. That would cause hyperinflation like Germany had in the 1920s. It’s the bane of any economy. It’s toxic.
And a guy like Bernanke, who went to MIT and Harvard and taught at Princeton, didn’t need me to tell him so.
But I did anyway. And Bernanke responded by saying the right thing: He believes in price stability.
Yet, the man did say the stuff about the printing press. And he’s now asking Congress for a massive $700 billion – and probably more later – to bail out banks.
The hope – and that’s all it is – is that the pile of manure that the government gets from the banks will turn to gold some day.
But we all know how that fairy tale ends.
Of course, you are hearing a lot today about inflation – not deflation. In fact, this column has been documenting for a long time how prices have been rising beyond what Washington will admit.
So is Bernanke’s statement about how he’d cope with deflation irrelevant?
Not if you understand Fed-speak.
Bernanke’s predecessor Alan Greenspan used to publicly worry about inflation constantly, even when the prices of things we buy seemed contained. That’s because Greenspan was really talking about asset inflation, namely the rising price of stocks and real estate.
Now that real estate is deflating in price, Bernanke’s printing press suggestion could be one that – perhaps only deep down in his subconscious – he’s holding onto.
It all makes sense.
Let’s say the government takes over all troubled mortgages, pays for them essentially with an electronic entry in its books (today’s printing press) and then just waits for everyone to forget about the whole mess.
We’d be bailing out the banks with Monopoly money.
Nice and neat, until the financial markets get wise. Then – like in Germany – there’d be hell to pay.
*
Note to Washington: Before you bankrupt the country, try what I’ve been suggesting.
Let people withdraw money from retirement accounts without tax penalty in order to purchase real estate.
It’ll cost the government nothing except the loss of taxes sometime in the future. And it will, at the very least, get some real estate off the market. Maybe even a lot of real estate.
With a reasonably good p.r. campaign, Washington can pretend that the housing problem is being fixed, since what Washington is now proposing won’t get one condo off the market.
Of course, it’s easier just to give away $700 billion when it isn’t your money.
*
Let me pick nits for a minute.
It has been fairly well documented (and not by me) that Paulson was on the phone last week to Wall Street firms telling them that the federal government was riding to the rescue
That’s when stocks rallied sharply late last week – only to fall heavily the first two days of this week.
I’ve written before how Paulson readily admits that he keeps in touch with “market participants.”
How is that not insider trading?
Why can Paulson call up some firms and deliver to them the incredibly important information that the federal government is about to do something and not tell everyone – including Wall Street firms that are not in the loop as well as the public?
Which brings me back to a very important question I asked last year: When Paulson met with Bernanke hours before rumors of the first of a series of interest-rate cuts in August 2007, did he share what he had learned with these so-called market participants?
Lesser human beings have gone to jail for such phone calls. His role as Treasury Secretary doesn’t give him immunity from the insider trading laws, even if he thinks his motives are noble.
john.crudele
Last on gold is $877.50
Are we to believe that the mint is out of gold? Or, are Americans being restricted from buying gold?
Gold coin sales halted after retail rush
By Javier Blas in LondonPublished: September 25 2008 23:03 | Last updated: September 25 2008 23:03
The rush by retail investors into gold on Thursday forced the US government to “temporarily” suspend the sales of the popular American Buffalo one-ounce bullion coin after depleting its inventories.
The shortage of gold coins is the latest sign of investors seeking a safe haven into bullion amid Wall Street woes. Gold prices this week surged above $900 an ounce, up about 20 per cent from its level before the collapse of Lehman Brothers.
Safe-haven buying spurred by a weakening dollar and rising inflation on the back of high commodity prices have also benefited gold sales, analyst said.
The US Mint said in a memorandum that “demand has exceeded supply” and, therefore, it was “temporarily suspending sales of these coins”. “We are working diligently to build up our inventory and hope to resume sales shortly,” it added.
Spot gold in New York on Thursday traded at $875 an ounce, down $5 on the day. Traders said bullion prices came under pressure from a strengthening in the dollar. Gold set a record of $1,030.80 an ounce in March.
The US Mint said it has sold 164,000 ounces of gold in American Buffalo one-ounce bullion coins since January, almost 54 per cent more than in the same period of last year. Demand for other gold coins from the US Mint is also very strong.
Last August, a shortage of American Eagles one-ounce bullion coins, another popular gold investment, due to “unprecedented demand” also forced the US Mint to suspend sales and later to place limits on the number it ships to dealers.
The US Mint has sold since last January about 419,500 ounces of bullion in the form of American Eagles coins, more than double the 198,500 ounces it sold during the whole 2007. In 2006, it sold 261,000 ounces.
The scarcity of gold coins comes as investors in bullion-backed exchange traded funds (ETFs) have amassed a record 1,054 tonnes of bullion, becoming the largest holders of gold after the reserves of the US, Germany, the International Monetary Fund, Italy, France and Switzerland.
Last on gold is $885.00.
Thanks Hans for your, always, great comments.
A lengthly but informative article follows from Dr. Darryl Spoon:
The Killers are with the Patient
Darryl Robert Schoon
Posted Sep 23, 2008There is nothing more dangerous than when those responsible for a nation’s troubles are believed to be its savior.
The Wall Street Journal had one fact correct regarding Wall Street’s accelerating collapse when on September 20th they wrote: When government officials surveyed the failing American financial system this week, they didn’t see only a collapsed investment bank or the surrender of a giant insurance firm. They saw the circulatory system of the U.S. economy – credit markets – starting to fail.
The Wall Street Journal was correct in that the circulatory system of the US economy was failing. Because the Wall Street Journal is the house organ of Wall Street investment banks and their co-conspirators in government, the Wall Street Journal blamed deteriorating credit markets for America’s troubles, not those responsible – to wit, Alan Greenspan, Ben Bernanke, and their cohorts at the Federal Reserve Banks.
ALAN GREENSPAN’S BASTARD SON
Ben Bernanke, Alan Greenspan’s surrogate successor at the Federal Reserve is using Greenspan’s discredited playbook to hopefully resuscitate America’s economy. But pouring more credit into America’s stalled economy will not restart the US economy anymore than pouring gasoline into a flooded engine will restart an engine.
Excessive credit caused the problem and more credit will only exacerbate it. The US central bank, the Federal Reserve, however is now backed into a corner, a corner from which there is no exit.
After credit markets contracted in August 2007, it was hoped that central bank intervention would reverse the deterioration of global markets that was then only beginning. A year ago, on October 1, 2007, I addressed that hope in my article, The Winter of Our Discontent:
As we collectively move towards the economic disaster awaiting us, the investment community is hoping the world’s central banks will be able to save them from the crisis set in motion by this summer’s [August 2007] credit collapse.
If the truth be known – and someday it will be – central banks are at the very center of today’s problems. Indeed, they caused them. Today’s disintegration of capital markets based on debt-based paper began in 1913 with the creation of the US Federal Reserve Bank, the central bank of the US.
…Debt-based paper money has led nations and the world down a very dangerous path. Facilitating expansion by encumbering future revenues with compounding debt inevitably indebts individuals, businesses, and governments beyond their ability to repay.
In the beginning, production expands, needs are met and everyone goes home happy. In the end, everyone’s home gets repossessed. This is when the amount of debt has grown so large, governments, businesses, and consumers collapse under its collective weight.
That’s where we are today. We lived off tomorrow and tomorrow has arrived. What a surprise.
Although in the past, continuing central bank intervention has proved inadequate, the ignorant, unknowing and desperate are yet again hoping that Paulson’s latest plan will save them. But the collective solutions of Bernanke, Paulson, et. al. will again prove wanting.
Indeed, Paulson’s and Bernanke’s continuing attempts to reverse the accelerating credit contraction will only make the final rendering all the more devastating. What I wrote last year is true today – except, today, we are now one year closer to the inevitable end of this still unfolding crisis.
cont’d, The Winter of Our Discontent October 1, 2007
…As autumn approaches, this summer’s credit crisis continues to spread through the global grid created by today’s financial wizards – wizards so adept they do not understand what they have set in motion. That this summer’s credit crisis surprised them the most is the most disturbing news of all.
The financial wizards of Wall Street and The City are hoping this summer’s credit crisis is a bad cold at worst, that perhaps a slight fever and time will heal the illness and they can return once again to the task of carving out billion-dollar bonuses from capitalism’s rotting carcass (sic capitalism, any economic system based on central bank issuance of debt-based paper money).
But the wizards of Wall Street and The City will be wrong this fall. This summer’s credit contraction looks increasingly less like a cold and more like cancer which has metastasized and made its way into the lymph nodes of our global economy.
The credit contraction of August 2007 was not a cold. It was cancer and since then it has spread with increasing rapidity throughout the US and global economies; and, now, one year later, the ignorant, unknowing and desperate led by the deceitful, selfish and clever are hoping that its only pneumonia.
CHINA’S KEEPING THE PATIENT ALIVE
Some are alleging that the US government’s accelerating bailout of banks, insurance companies et. al. is socialism. Although it is government intervention in extremis, such intervention in the markets does not constitute socialism.
The bailout of investment banks and corporations by the US government is fascism; the control and intervention of government by corporate interests designed to further corporate and state control. The multi-trillion dollar state support of JP Morgan, AIG, Fannie Mae and Freddie Mac and now perhaps soon GM, Ford, and Chrysler is fascism, not socialism.
Fascism should more appropriately be called corporatism because it is the merger of state and corporate power.
Benito Mussolini, fascist dictator of Italy (1922-1943)What is ironic is that China, a self-described socialist state, is increasingly now responsible for the well-being of the US, a nation rapidly transforming itself into a fascist nation right before our eyes; and, while this might be the ultimate resolution of the two competing ideologies of the 20th century, I don’t think so. Instead, it could be the end of both.
CHINA, PAPER MONEY, AND THE WEST
Paper along with paper money was first invented in China and Ralph T. Foster’s Fiat Paper Money, The History and Evolution of Our Currency, states that “On January 12, 1024, the Sung court directed the imperial treasury to issue national paper money for general use”.
Two centuries later, the Sung Dynasty’s paper money had lost almost all its value due to over printing. Later attempts were made to resuscitate paper money but all such attempts were to end in economic collapse. Foster sums up China’s experiment with paper money as follows:
Over the course of 600 years, five dynasties had implemented paper money and all five made frequent use of the printing press to solve problems. Economic catastrophe and political chaos inevitably followed. Time and again, officials looked to paper money for instant liquidity and the immediate transfer of wealth. But its ostensible virtues could not withstand its tragic legacy: those who held it as a store of value found that in time all they held were worthless pieces of paper. [bold, mine]
Fiat Paper Money, The History and Evolution of Our Currency, Ralph T. Foster 2nd ed 2008, page 29, available email tfdf(at)pacbell.net or by phone 520-845-3015.In 1661, China formally outlawed the use of paper money and it wasn’t to reappear in China until the 1800s when English traders wanted to pay for Chinese goods with paper bank notes issued by the Bank of England. The Bank of England claimed its paper money was backed by gold and therefore “good as gold”.
The Chinese, suspicious of western ways and rightfully so, demanded instead to be paid in their circulating currency, silver; and, as the British badly wanted China’s porcelains, teas, and silks, this forced the British to buy silver on the open market in order to purchase goods from China.
If the British bank notes were de facto fully backed by gold as claimed by the Bank of England, there would have been little need for England to go to war in order to instead force China to accept British opium. But the British claim of 100 % convertibility to gold was more a public relations gesture than an actual reality, at least in the large amounts demanded by the growing China trade.
BUYERS ALWAYS PREFER PAYMENT WITH PAPER MONEY
SELLERS ALWAYS PREFER PAYMENT WITH GOLD OR SILVERThe subjugation of China, first by the England and the West and then by Japan, continued until the Chinese Communists forced out the Japanese who had previously forced out the Russians, the British, the Germans, the French and the Americans.
But in the intervening years, between the British invasion in the 1840s and the Chinese Communist victory one century later, the Bank of England with the aid of the US Federal Reserve had instituted the universal acceptance of central bank issued paper money everywhere in the world and China was no exception.
Wikipedia recounts the long experience of China with paper money and hyperinflation:
As the first user of fiat currency, China has had an early history of troubles caused by hyperinflation. The Yuan Dynasty (1271-1368) printed huge amounts of fiat paper money to fund their wars, and the resulting hyperinflation, coupled with other factors, led to its demise at the hands of a revolution. The Republic of China went through the worst inflation 1948-49. In 1947, the highest denomination was 50,000 yuan. By mid-1948, the highest denomination was 180,000,000 yuan. The 1948 currency reform replaced the yuan by the gold yuan at an exchange rate of 1 gold yuan = 3,000,000 yuan. In less than 1 year, the highest denomination was 10,000,000 gold yuan. The highest denomination by a regional bank was 6,000,000,000 yuan issued by XinJiang Provincial Bank in 1949. After the renminbi was instituted by the new communist government, hyperinflation ceased with a revaluation of 1:10,000 in 1955.
Although China first outlawed the use of paper money in the 17th century, it now possesses over a trillion dollars worth of fiat paper money here in the 21st, the majority in the form of recently issued US paper dollars.
Now, the problems of hyperinflation may soon again affect China – because if the US continues to print its way out of its increasing problems, hyperinflation of the US dollar will destroy the value of China’s “monetary” reserves.
Although China has a much longer history than does the US, both the world’s oldest civilization, China, and the relative newcomer, the US, will face a dangerous economic future if the US continues to accelerate the growth of its money supply. But no one can control the US in this regard, not even the US.
Flooded by the West’s paper money
China has joined the West’s game against its will
How long will the game continue?
How long before China can reassert its will?
Heaven moves in its own timeEARTHQUAKE, FIRE
& FULFILLMENT OF THE PROPHECYThe August 2007 credit contraction was like a financial earthquake that unexpectedly shook global markets. It began as a series of crises that have continually escalated demanding greater and greater taxpayer resources.
Now, the house itself is on fire but the cause and the proposed solution are always the same. The cause is always investment bank greed. The proposed solution is always more taxpayer money to bailout out more investment banks. This is not a solution. This is societal blackmail.
When the US handed over the issuance of its money to the Federal Reserve in 1913 it did so in violation of the US Constitution. It illegally gave the right to issue US currency to a private bank and set in motion forces that would lead to today’s extraordinary crisis.
Today’s extraordinary banking crisis was not unexpected – as private bankers claim and we believe. Today’s crisis was inevitable and was in fact prophesized long before it happened. We were warned about this very occurrence two hundred years ago by no less than a founding father of the American republic, Thomas Jefferson.
I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.
Jefferson’s prophecy has now come true and, yet, we act surprised; and, if we are, it is because the corporate controlled media has effectively misled Americans about the cause of their problems.
Double-dipping welfare moms? Illegal immigrants? Muslim terrorists? It’s anyone – except, of course, the bankers and the Federal Reserve – or so say again and again America’s corrupt corporate media in whose interest it is for Americans to mistakenly blame others for the real cause of its woes.
Otherwise, Americans, left on their own, might wake up.
THE BUTLER DIDN’T DO IT
THE BANKERS DIDIt is bankers such as Henry Paulson who are responsible for America’s disintegrating and imploding economy. Since 1913 America has allowed private bankers to control the issuance of America’s money and now, in the very midst of the problems they themselves created, the bankers through Paulson’s plan are seeking unsupervised control over America’s economy complete with immunity from any future criminal prosecution.
This is because the bankers not only want America to bail them out, they are planning to steal their assets back in the process.
TREASURY SEEKS ASSET-BUYING POWER UNCHECKED
BY COURTS (Update2)
By Alison Fitzgerald and John BrinsleySept. 21 (Bloomberg) — The Bush administration sought unchecked power from Congress to buy $700 billion in bad mortgage investments from financial companies in what would be an unprecedented government intrusion into the markets.
Through his plan, Treasury Secretary Henry Paulson aims to avert a credit freeze that would bring the financial system and the world’s largest economy to a standstill. The bill would prevent courts from reviewing actions taken under its authority. [bold, mine]
“He’s asking for a huge amount of power,” said Nouriel Roubini, an economist at New York University. “He’s saying, ‘Trust me, I’m going to do it right if you give me absolute control.’ This is not a monarchy.”
The investment banks are even now intending to violate the law in Paulson’s proposed government takeover and redistribution of bank assets. It is in the redistribution and sale of bank assets where the crimes will occur – crimes which will be granted pre-existing immunity from judicial prosecution under Paulson’s proposal.
This same caveat – immunity from subsequent criminal prosecution – was also written into the authorization of the original Resolution Trust Corporation which disposed of government seized property after the Savings & Loan crisis.
The reason no one remembers the hundreds of billions of dollars of seized property from Savings & Loans listed for sale by the RTC is because it never happened.
The greatest wealth transfer in recent history happened when taxpayer money was used to liquidate S&L properties which were then “sold” to well-connected insiders in transactions immune from criminal prosecution for literally pennies on the dollar.
The soon-to-be owned bank assets under Paulson’s plan will not be sold to the highest bidders in an open and fair auction, they will be disposed of again to pools of the wealthy and well-connected at highly discounted insider valuations. The people will pay, the rich will profit.
QUI CUSTODIAT CUSTODES
WHO WILL GUARD THE GUARDIANSNo, this isn’t a monarchy. This is fascism.
THE FOX IS IN THE HENHOUSE
Today, investment banker Henry Paulson, former CEO of investment bank Goldman Sachs is US Secretary of the Treasury. This is no coincidence. Thomas Jefferson would not be surprised.
Paulson’s plan to bail out the banks is being presented to American citizens as a fait accompli, as a necessary step to prevent the complete meltdown of our financial system. Paulson’s plan is exactly what every venal, opportunistic and self-serving banker would propose as a solution to America’s problems in such circumstances.
INVESTMENT BANKERS
DON’T NEED TO BE BAILED OUT
INVESTMENT BANKERS NEED TO BE THROWN OUTThe answer to America’s problems is clear. Thomas Jefferson said it two hundred years ago.
The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.
Let’s do what has to be done, America – or do you still want to blame Muslim terrorists and illegal immigrants for America’s problems; or maybe you are still hoping that somehow maybe somehow Paulson’s proposed trillion dollar government bailout of the rich and well-connected will somehow trickle down to you and save you and your family from being tossed out onto the streets when your house is foreclosed on by the banks he is going to save.
The majority will always willing pay the price of fascism
When this is all over – and someday it will be – it is my hope that we will have learned the lessons that we have now forgotten. That bankers, like vicious dogs, must always be kept on short leashes for the public safety and public good (neutering should also be a requirement); and, that gold and silver, not credit and debt, are the only foundation of sound money.
PREDICTIONS
(1) Paulson’s bailout of investment banks giving bankers total control over America’s economy will be rushed through Congress and quickly signed into law damaging international perceptions of US creditworthiness which will lead to further uncertainty in the markets. US Treasuries and the US dollar will ultimately bear the long term consequences of Paulson’s self-serving short term “solution”.
Conclusion: Even greater financial disaster will result from Paulson’s taxpayer bailout of his wealthy Wall Street friends.
(2) Written into the investment banking bailout law will be provisions expanding the police powers of the state, e.g. Congressman Ron Paul noted the recent passage of the housing bill contained the requirement that by 2009 “every credit card transaction will be reported to the IRS”.
FASCISM IS ALWASY SOLD AS NECESSITY IN THE NAME OF THE PUBLIC GOOD
Conclusion: Fascism is the new zeitgeist.
This, too, shall pass
Thank you bluejay. You do a great job in digging out well-reflected articles.
Today I would like to share some information on my family’s experience in the Weimar Republic and the founding days of the former Deutsche Mark Era with you.
Ever since 1932 my ancestors have made it an important issue to encourage every new generation to buy and save some gold and/or silver bullion.
And to store it in a place that will still be accessible in case that banks are closed down by a government order.
Hans Kummerow
Gold $892.40
Silver $13.17
Gold/XAU Ratio 6.11
Gold/Silver Ratio 67.69It appears that the dark forces are reigning in the gold price following its recent quick advance in the general area of $900. It’s apparent the governement’s grip on gold prices isn’t as well placed as it used to be with the latest enlistment of US banks in the continuing effort. From gold loans, to gold swaps, to bullion banks, to hedge funds, the government has tried everything to extinguish gold’s demand.
Over the past 18 months the naked short selling tool has worked like a charm for the government in having all their cronies sell everything gold related to break public confidence in gold. Unfortunately as greed goes, the public played the leverage game with the metal and the shares and got severly burned when the dark side turned up the heat as three US banks started shelling the metal prices that ended with gold hitting $740 and Silver just north of the $10 level.
All is not lost, just time. The sad fact is the government will do whatever is necessary to keep the gold price checked. It will be quite interesting when inflation hits the hyperinflation stage where they will get the gold from or participants to aid in their efforts. The long term direction of a higher gold price CAN NOT BE STOPPED.
The only possibility that will never be attempted according to Mr. John Williams of shadowstatistics.com is:
1- Increase the individual tax to 44%, now.
2- Cut governement spending by 20%, now.
If we delay the costs go up to:
1- Increase the individual tax to 88%
2- Cut government spending by 40%.
Who has the stomach for that???
So, hyperinflation here we come.
The current figure being used to fix the financial dislocation in the US is $700 billion. How will this ever work with the world’s outstanding derivative contracts far in excess of a quadtrillion, that’s a thousand trillion dollar’s worth. Now, size that up with the $700 billion bailout in this country to fix the problem and you quickly understand the magnitude of these potential failures greatly overshadows this tiny, if you can call it that, $700 billion figure.
$700,000,000,000
versus
$1,400,000,000,000,000
The $700 billion rescue plan only deals with 1/2000ths of the entire problem.
If you were a bookie what odds would you give to the proposed $700 billion figure fixing the potention exposure to the greater amount?
If you know of a better way to survive and keep your wealth undamaged without gold please share it.
Paulson and 699 of his billionaire friends should get together and buy 700 billion worth of “mortgage-related assets from any financial institution having its headquarters in the United States”.
Then let them earn all the profits and get away with them.Last on gold is $881.50.
The following is an excellent article written by a Canadian from Calgary that was presented today on the Agoracom.com website under the stock ECU in the Forum Discussion section.
Mob will be growing with startling awareness
Posted by: sinbob on September 23, 2008 03:52PMShattering the myths.
As Senator Shelby kicked off this morning’s “hearings” with Paulson and Bernanke, one could not help but note his tone of justifiable repudiation towards the Treasury, Fed., SEC and Wall St. Shelby made pointed references to his opposition since 1979 to the bailing out of any private institutions/corporations with taxpayer’s dollars, going back to Chrysler. He also made it graphically clear that Congress has been assured on many occasions over the years, starting with Greenspan and ending Cox, Paulson and Bernanke, as recently as February, that there was no cause for concern and that the economy was sound. So, now Paulson wants undisputed power to move quickly forward, “clean and decisively” to legislate action that would favor even more private control over the US markets. He is holding the ultimate “bazooka” to the head of the people of the US making it clear that urgency is of the utmost importance. This is the man who many are on to, now despised by many (all you had to do was watch the demeanors of the many panned shots of several of the committee members). This is the man who, as President of Goldman, sold out his options for $700 million and became the Secretary of the US Treasury. This is the man who has linkage to all the ex Goldman executives now sprinkled strategically throughout the financial and political power bases in the US, Canada ( Mark Carney, Gov. Of the Bank of Canada, former GS ) and Europe.
As the bankers proceeded to raid the life time savings and personal accounts of Americans last week in order to cover their collective bottoms, overriding the rule of contract law, and bail out the crooks (hidden inside the AIG bail out) Paulson and team were hurridly crafting their grand plan for financial crisis legislation, legislation allowing the use of unlimited public funds well over the $700 billion teaser price (say $Trillions) mentioned. Here are just a few proposals of the Act that should strike fear into all Americans:
LEGISLATIVE PROPOSAL FOR TREASURY AUTHORITY
TO PURCHASE MORTGAGE-RELATED ASSETSSec. 2. Purchases of Mortgage-Related Assets.
(a) Authority to Purchase.—The Secretary is authorized to purchase, and to make and fund commitments to purchase, on such terms and conditions as determined by the Secretary, mortgage-related assets from any financial institution having its headquarters in the United States.
Sec. 8. Review.
Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.Today, Diane Francis in her column in the Financial Post titled “In the U.S. the monkeys guard the bananas” makes some interesting observations. The real attacks on the New York towers “have been coming from inside by the Capitalist Cowboys”. Making GS and Morgan holding companies completes the demise of all five Wall St. Banks. Paulson, the former Czar of Wall St. has a major conflict of social interest in taking any tough measures against the culprits that have been responsible for the financial Tsunami looming over the U.S. and global markets. He is one of them, beginning is career with Nixon’s sidekick John Erhlichson (Watergate) and culminating as the CEO and Chairman of Goldman form 1999 to 2005. He, along with the rest of the Bush Admin. are now bailing out the problems they created and they won’t attack their base as they leave Washington for Palm Beach and Palm Springs “with the gangs that got away”. I would like to point out here that there are those from the Clinton Admin. That should also be on the hook, such as gold basher, “strong dollar Rubin” and others. Did someone mention Greenspan?
There are many who should have their feet held to the fire as they profited greedily from allowing the capital derivatives monster to grow into Buffet’s “financial weapons of mass financial destruction”. Ms Francis believes that “lawsuits and handcuffs and… RICO prosecutions are in order”, that there should be mass arrests. She also thinks that “taxpayers should be able to seize all the assets of the managers, of all the managers, directors and executives who oversaw this conspiracy of recklessness for years” and that there should be “induced foreclosures in Palm Beach and Palm Springs of Wall Streeter’s mansions, stock portfolios, Porches and private jets.”
I briefly observed part of the statement of the Senator from Ohio this morning commenting on the more than palpable anger emanating from so many of his constituents, that one man had driven over seven hours to meet with him to express his anguish and concerns. Observing the somber expressions of worry so apparent on the faces of so many of those Senators today truly struck almost a chord of fear. One could see that there was every effort being made to disguise negative emotion towards those being interviewed. It seemed to have very little effect on Paulson. That’s when I turned off the TV.
In an aside to all Canadians, we should not delude ourselves into thinking that all of the above does not and will not have serious fallout here. It is only delayed. As the above hearings are being played out, Canadian regulators, politicians, bankers, brokers and others are, and have been erring through omission, ignorance and illegality. Many investors have been and are complaining about apparent “inconsistencies” in our markets, notably the JPMs and specifically naked shorting. There are no satisfactory or accountable replies to such complaints at this time, at least those forwarded by me. We have no idea of what role Mr. M. Carney or the Bank of Canada (at arm’s length to our Government.) has played, or is playing in the above globally infected derivatives markets, now estimated by the Bank of International Settlements to be well over seven hundred and fifty TRILLION dollars. Canadian banks are exposed by $800 billion through credit default swaps. They rely on their guarantors, such as AIG, to back them during a crisis. “Canadian banks and financial institutions are exposed to AIG in several ways, with one of the greatest sources of risk being their reliance on opaque credit markets that link lenders in complex was through an elaborate system for sharing risk in which AIG plays a central role.” (Financial Post, FP1, Se. 17/08) The Royal Bank alone has $300 billion notional exposure, many times its own value. As Jim Sinclair points out, when there is no counter party, it’s real dollars. TD has $197 billion exposure. I openly wonder at their seeming lengthy shenanigans in the trading of one junior’s shares, ECU on the TSE. They aren’t alone.
Suffice it to say, we investors in Canada are still in the dark and there are many factors that we should be urgently cognizant of. I have personally written many times to many authorities and have basically been ignored. That arrogance and off-handedness alone are red flags, and tells me there are some serious speed bumps ahead that will grow proportionately bigger with time and continued obfuscation. Ignorance, recklessness, and/or illegality on behalf of our bureaucrats , regulators, politicians, banks and brokerages is presently greasing the wheels of greed, arrogance, power and malfeasance as we “unaffected” Canadians plunge headlong into the wake of the U.S. juggernaut without a very small jacket.
Last on gold is $868.00
The following are observations and opinions from one of the best information sites on the web at agoracom.com under the stock ECU Discussion Forum.
Govt allows financial firms to raid individual accounts
Posted by: ESL on September 21, 2008 10:53AMPrecedent has been set that allows bankers to raid your personal accounts & use your lifetime savings to keep the ship afloat for a few more weeks. This is another example of authorities out of control that are overriding the rule of contract law, tearing up your investment account legal agreements with the banks and replacing it with laws that cater to bailing out the crooks who created this fine mess. This is the most utterly disgusting measure yet that shows how very broken the system is. The politicians and other scumbags at the helm don’t give a hoot for your welfare and it’s every man for himself when tshtf. On the other hand you can bet your last bar of Gold that members of tptb are busy squirelling away their savings outside of the US before Capital Controls are inevitably instituted in the not too distant future. Best of luck to all.
===============================
RAIDS OF INDIVIDUAL ACCOUNTS
This is so important a topic, that it deserves top billing!!! Hidden inside the AIG bailout funding package, surely hastily cobbled together, but carefully enough to include a totally corrupt clause, was a handy dandy clause that permits raids. The conglomerate financial firms are permitted at this point to use private individual brokerage account funds to relieve their own liquidity pressures. This represents unauthorized loans of your stock account assets. So next, if the conglomerate fails, your stock account is part of the bankruptcy process. Finally the corrupt USGovt and corrupt Wall Street houses are desperate enough to put into policy, stated by the US Federal Reserve, outlining the authorized raid of your money.
——————————-Jim Sinclair warned us months ago to take physical possession of our stock certificates.
It’s becoming clearer everyday that everyone must have a secure safe in their home.
Another point Mr. Sinclair has been repeating is that YOU MUST ELIMINATE ALL MIDDLEMEN BETWEEN YOU AND YOUR ASSETS.
Last on gold is $871.80
September 19, 2008
The Bi-Partisan Origins of the Financial Crisis
Shattering the Glass-Steagall Act
By WILLIAM KAUFMANIf you’re looking for a major cause of the current banking meltdown, you need seek no farther than the 1999 repeal of the Glass-Steagall Act.
The Glass-Steagall Act, passed in 1933, mandated the separation of commercial and investment banking in order to protect depositors from the hazards of risky investment and speculation. It worked fine for fifty years until the banking industry began lobbying for its repeal during the 1980s, the go-go years of Reaganesque market fundamentalism, an outlook embraced wholeheartedly by mainstream Democrats under the rubric “neoliberalism.”
The main cheerleader for the repeal was Phil Gramm, the fulsome reactionary who, until he recently shoved his foot even farther into his mouth than usual, was McCain’s chief economic advisor.
But wait . . . as usual, the Democrats were eager to pile on to this reversal of New Deal regulatory progressivism — fully 38 of 45 Senate Democrats voted for the repeal (which passed 90-8), including some famous names commonly associated with “progressive” politics by the easily gulled: Dodd, Kennedy, Kerry, Reid, and Schumer. And, of course, there was the inevitable shout of “yea” from the ever-servile corporate factotum Joseph Biden, Barack Obama’s idea of a tribune of “change”–if by change one means erasing any lingering obstacle to corporate domination of the polity.
This disgraceful bow to the banking industry, eagerly signed into law by Bill Clinton in 1999, bears a major share of responsibility for the current banking crisis. Here’s the complete roll call of shame:
REPUBLICANS FOR (52): Abraham, Allard, Ashcroft, Bennett, Brownback, Bond, Bunning, Burns, Campbell, Chafee, Cochran, Collins, Coverdell, Craig, Crapo, DeWine, Domenici, Enzi, Frist, Gorton, Gramm (Tex.), Grams (Minn.), Grassley, Gregg, Hegel, Hatch, Helms, Hutchinson (Ark.), Hutchison (Tex.), Inhofe, Jeffords, Kyl, Lott, Lugar, Mack, McConnell, Murkowski, Nickles, Roberts, Roth, Santorum, Sessions, Smith (N.H.), Smith (Ore.), Snowe, Specter, Stevens, Thomas, Thompson, Thurmond, Voinovich and Warner. DEMOCRATS FOR (38): Akaka, Baucus, Bayh, Biden, Bingaman, Breaux, Byrd, Cleland, Conrad, Daschle, Dodd, Durbin, Edwards, Feinstein, Graham (Fla.), Hollings, Inouye, Johnson, Kennedy, Kerrey (Neb.), Kerry (Mass.), Kohl, Landrieu, Lautenberg, Leahy, Levin, Lieberman, Lincoln, Moynihan, Murray, Reed (R.L), Reid (Nev.), Robb, Rockefeller, Sarbanes, Schumer, Torricelli and Wyden.
REPUBLICANS AGAINST(1): Shelby.
DEMOCRATS AGAINST(7): Boxer, Bryan, Dorgan, Feingold, Harkin, Mikulski and Wellstone.
NOT VOTING: 2 REPUBLICANS (2): Fitzgerald (voted present) and McCain.
The House Democrats were no less enthusiastic in their endorsement of this invitation to plunder–the repeal passed there by a margin of 343-86, with the Donkey Party favoring the measure by a two-to-one margin, 138-69. Current House speaker Nancy Pelosi managed not to register a vote on this one, so great was her fear of offending her party’s corporate paymasters even though she knew passage was a sure thing.
According to Wikipedia, many economists “have criticized the repeal of the Glass-Steagall Act as contributing to the 2007 subprime mortgage financial crisis. The repeal enabled commercial lenders such as Citigroup, the largest U.S. bank by assets, to underwrite and trade instruments such as mortgage-backed securities and collateralized debt obligations and establish so-called structured investment vehicles, or SIVs, that bought those securities. Citigroup played a major part in the repeal. Then called Citicorp, the company merged with Travelers Insurance company the year before using loopholes in Glass-Steagall that allowed for temporary exemptions. With lobbying led by Roger Levy, the ‘finance, insurance and real estate industries together are regularly the largest campaign contributors and biggest spenders on lobbying of all business sectors [in 1999]. They laid out more than $200 million for lobbying in 1998, ‘ according to the Center for Responsive Politics. ‘ These industries succeeded in their two decades long effort to repeal the act. ‘ ”
This lust for banking largesse is as wanton among Democrats as Republicans–right up to the current presidential campaign. According to the Phoenix Business Journal,
Obama and McCain . . . have accepted a substantial amount of campaign money from Wall Street bankers, investment and securities firms and their executives during this election cycle.
Investment firms have donated $9.9 million to Obama and $6.9 million to McCain this campaign thus far, according to the Center for Responsive Politics. Commercial banks have given Obama $2.1 million and McCain $1.9 million. Private equity firms and hedge funds have given Obama $2 million and McCain $1.4 million, according to CFRP.
Lehman Brothers, Goldman Sachs, JP Morgan Chase & Co., UBS and heavyweight law firm DLA Piper are among Obama’s top contributors. JP Morgan acquired Bear Stearns with the federal government taking on as much as $30 billion Bear assets as part of the deal. McCain’s top donor sources include Merrill Lynch, Goldman Sachs, Citigroup and Blank Rome and Greenberg Traurig LLP law firms.
So . . . the next time a mass-media-lulled Democrat ridicules Ralph Nader for arguing that there are few significant differences between the two major parties on the truly important issues, you might refer them to this atrocity, along with all the other ones.
William Kaufman can be reached at kman484@earthlink.net
Last on gold is $876.60.
India continues to take 30% of world gold production. That percentage should increase as it is looking more and more like gold production has already peaked out.
India’s love affair with gold keeps going despite volatile prices
Module bodySun Sep 21, 1:20 AM
NEW DELHI (AFP) – Pushpa Bhatia is in a dilemma as she scans the glittering gold offerings laid out on a showcase at a fancy jewellery store in the Indian capital.
ADVERTISEMENT
With the precious metal’s price on a roller-coaster ride, she’s wondering whether she should buy now or wait.
“Will the price go up or down — you tell me,” the sari-clad Bhatia says to the salesman, who responds with a shrug.
Last week, gold posted its biggest weekly gain in a decade, climbing by 13 percent to 864.70 dollars an ounce, as mounting credit turmoil pushed investors into safe haven assets.
But Bhatia can’t wait too long — India’s marriage and festival seasons are approaching and she needs gold for both.
She has a 23-year-old daughter getting married in November and she likes to give small “auspicious” golden gifts for the Hindu calendar’s biggest holiday of Diwali, or the Festival of Lights, in October.
India is the world’s biggest gold consumer, importing 700 tonnes to 800 tonnes a year on average — around 30 percent of global demand.
And higher prices won’t stop Indians buying, said Suresh Hundia, head of the Bombay Bullion Association.
“Those who have marriage commitments will buy — no matter what the rates,” said Hundia.
Indian brides are traditionally bedecked in heavy gold jewellery — seen as a family heirloom and also security.
With around 10 million marriages a year in the country of 1.1 billion people, wedding-related demand is huge, especially during the nuptial season between October and January and April and May.
“The idea of giving gold to the bride is it will bail her and her family out in times of crisis,” said Ajay Mitra, managing director of the World Gold Council in India.
The gold given to a bride is known as “streedhan,” or “woman’s wealth.”
In fact, said jewellery store salesman Devender Kumar, “most of the time the customers don’t even look at the design — they just look at the weight.”
However, lifestyles are changing in urban areas.
Bhatia’s daughter, Supriya, a newly minted accountant in tight trousers and an applique T-shirt, says she’s bored with the metal.
“It’s too heavy to put on,” she says, screwing her face in disgust at an elaborate gold chain the salesman is looping around her mother’s neck.
The vast array of consumer goods and trendy accessory jewellery to be found in India’s cities have made gold a less sought-after item for many.
“For thousands of years women had very little personal wealth other than their jewellery — they didn’t have bank accounts,” said Arvind Singhal, head of retail consulting firm Technopak.
“But now with the empowerment of women in urban areas, they want to spend their disposable income on cars, TVs, holidays, a new handbag,” said Singhal.
Still, bride-to-be Supriya Bhatia knows she won’t win the battle over her gold wedding jewellery as her mother orders her to sit and pay attention.
“It’s a necessity to own gold if you’re a woman,” said her mother firmly.
And even though urban tastes are changing, India’s overall gold consumption is unlikely to alter much in the foreseeable future, analysts say.
There is “a growing trend toward luxury goods rather than wanting to buy gold in urban areas,” noted Suki Cooper, analyst at London’s Barclays Capital.
But she said “the majority of gold consumption is in rural areas,” where “that level of consumerism doesn’t exist so India is likely to stay a very important gold consuming nation.”
In the countryside, where the banking system is still poorly developed, gold rules as a medium of financial exchange and secure savings vehicle.
“Beyond the big cities, gold is something which has intrinsic value for consumers,” said the Gold Council’s Mitra.
“They know they will never get cheated. It’s an insurance.”
India continues to take 30% of world gold production. That percentage should increase as it is looking more and more like gold production has already peaked out.
India’s love affair with gold keeps going despite volatile prices
Module bodySun Sep 21, 1:20 AM
NEW DELHI (AFP) – Pushpa Bhatia is in a dilemma as she scans the glittering gold offerings laid out on a showcase at a fancy jewellery store in the Indian capital.
ADVERTISEMENT
With the precious metal’s price on a roller-coaster ride, she’s wondering whether she should buy now or wait.
“Will the price go up or down — you tell me,” the sari-clad Bhatia says to the salesman, who responds with a shrug.
Last week, gold posted its biggest weekly gain in a decade, climbing by 13 percent to 864.70 dollars an ounce, as mounting credit turmoil pushed investors into safe haven assets.
But Bhatia can’t wait too long — India’s marriage and festival seasons are approaching and she needs gold for both.
She has a 23-year-old daughter getting married in November and she likes to give small “auspicious” golden gifts for the Hindu calendar’s biggest holiday of Diwali, or the Festival of Lights, in October.
India is the world’s biggest gold consumer, importing 700 tonnes to 800 tonnes a year on average — around 30 percent of global demand.
And higher prices won’t stop Indians buying, said Suresh Hundia, head of the Bombay Bullion Association.
“Those who have marriage commitments will buy — no matter what the rates,” said Hundia.
Indian brides are traditionally bedecked in heavy gold jewellery — seen as a family heirloom and also security.
With around 10 million marriages a year in the country of 1.1 billion people, wedding-related demand is huge, especially during the nuptial season between October and January and April and May.
“The idea of giving gold to the bride is it will bail her and her family out in times of crisis,” said Ajay Mitra, managing director of the World Gold Council in India.
The gold given to a bride is known as “streedhan,” or “woman’s wealth.”
In fact, said jewellery store salesman Devender Kumar, “most of the time the customers don’t even look at the design — they just look at the weight.”
However, lifestyles are changing in urban areas.
Bhatia’s daughter, Supriya, a newly minted accountant in tight trousers and an applique T-shirt, says she’s bored with the metal.
“It’s too heavy to put on,” she says, screwing her face in disgust at an elaborate gold chain the salesman is looping around her mother’s neck.
The vast array of consumer goods and trendy accessory jewellery to be found in India’s cities have made gold a less sought-after item for many.
“For thousands of years women had very little personal wealth other than their jewellery — they didn’t have bank accounts,” said Arvind Singhal, head of retail consulting firm Technopak.
“But now with the empowerment of women in urban areas, they want to spend their disposable income on cars, TVs, holidays, a new handbag,” said Singhal.
Still, bride-to-be Supriya Bhatia knows she won’t win the battle over her gold wedding jewellery as her mother orders her to sit and pay attention.
“It’s a necessity to own gold if you’re a woman,” said her mother firmly.
And even though urban tastes are changing, India’s overall gold consumption is unlikely to alter much in the foreseeable future, analysts say.
There is “a growing trend toward luxury goods rather than wanting to buy gold in urban areas,” noted Suki Cooper, analyst at London’s Barclays Capital.
But she said “the majority of gold consumption is in rural areas,” where “that level of consumerism doesn’t exist so India is likely to stay a very important gold consuming nation.”
In the countryside, where the banking system is still poorly developed, gold rules as a medium of financial exchange and secure savings vehicle.
“Beyond the big cities, gold is something which has intrinsic value for consumers,” said the Gold Council’s Mitra.
“They know they will never get cheated. It’s an insurance.”
Bailout plain will not be in place before Summer of 2009
Just sit down for a minute and try to write down the basic rules for a nation-wide bail-out-plan for financial institutions – it is a terrible job. And Mc Cain’s refusal of the plan actually means, the present administration will not be able to resolve the issue before election day.
If Mc Cain wins, he will kill the issue. If Obama wins he will have to consider the justice-issue he stressed today. Not an easy job either.
Chances are: This bail-out-plan will never become effective at all.Last on Gold is $861.90
Listening to a calm, collected and experienced mind is preferred to bureaucrats who who are croud pleasers until their house starts to burn down.
The appropriate question is, if these people are so smart why did they not heed warnings years ago from Warren Buffett when he was widely quoted in the media as saying, “OTC derivatives are weapons of mass destruction?”
And these are the same people that are going to fix the problem????
Posted On: Friday, September 19, 2008, 9:49:00 AM EST
Potential Infinite Bailouts To Explode Money Supply
Author: Jim Sinclair
Dear Friends,
Today’s reported potential infinite bailout of all and any portends, if adopted, is the largest increase in dollars outstanding since the Jurassic Age.
It closely models actions undertaken regarding the production of currency liquidity seen in the “Weimar Republic.”
It is reported now that more than 1000 hedge funds are on the rocks. This has the potential for a significant financial impact.
The only way to hide the numbers from the statistics produced by the suspected actions of the Fed is to value the indebtedness purchased at 100%, claiming a wash transaction.The only conclusion is that when the smoke clears and the advertised actions have been adopted, nothing more dollar negative than this has ever occurred due to the potential expansion of T bills and therefore dollar supply explosion.
Gold is the only currency with no liability attached to it which, as you have seen recently, will be selected as the currency of the people.
Respectfully yours,
Jim Sinclair“In Defense of Gold.” An article written by Christopher Barker. Read it and then make a comment about it if you want It is located at: http://www.fool.com/investing/small-cap/2008/09/12/in-defense-of-gold.aspx
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 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, 2008All Swans Are Black
Saturdays and Sundays
Used to be fun
Weekends were holidays
Perhaps time in the sunBut now it’s all changing
Changing for worse
As bankers are draining
The public’s thin purseNorthern Rock Fannie Mae
Freddie Mac and Bear
What’s next we all wonder
Who will it be where?Lehman’s a lemming
As was Bear Stearns
WaMu AIG
They’re all gonna burnOnly 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, 2008Geithner’s statement really means that Wall Street no longer possesses the requisite political muscle to extract more US dollars from a bankrupt electorate. Last weekend, Wall Street bankers finally understood that their privileged position in the welfare line of US government largesse had come to an end. This time, the banker’s begging bowl would remain empty.
With their co-conspirators in the US government no longer able or willing to provide additional US guarantees, the position of investment banks has now become increasingly fragile; and their newly hatched liquidity plan concocted by the bankers over the weekend is another indication of just how fragile their system is.
THE BANKERS’ NEW PLAN
Last Saturday when the bankers realized they could no longer depend on government money to bail them out, they came up with a plan. Granted, they did so with only one night’s sleep but nonetheless there appears to be a significant flaw in their thinking.
This is the plan:
Sept. 14 (Bloomberg) — A group of banks including Bank of America, CitiGroup and JPMorgan Chase & Co. are putting up $70 billion for a borrowing fund aimed at providing liquidity… Each participating financial firm will provide $7 billion to establish the fund and have the ability to borrow up to a third of the total. Other banks include Barclays Plc, Credit Suisse Group AG, Deutsche Bank AG, Goldman Sachs Group Inc., Morgan Stanley, Merrill Lynch & Co. and UBS AG. The pool could expand as other companies join.
Now, let’s get this straight. Ten banks put up $7 billion for a total of $70 billion. Because any bank can withdraw up to $23.3 billion, if three banks take $23.3 billion each, there will be nothing left for the others. Am I missing something?
There is nothing wrong with the plan, per se. The flaw lies in the flawed character of the participants. These are investment banks and if investment banks can exploit a situation, they will do so. That’s what investment banks do for a living, they exploit situations for their own advantage in order to maximize profits.
Last year when two Bear Stearns highly leveraged funds were in danger of failing, Bear Stearns came to the “rescue” of one of its funds and lent it more capital, albeit with the caveat that Bear now had first claim on the fund’s assets. Then, when the fund collapsed shortly thereafter Bear Stearns exercised its now first-in-line rights to all the assets.
Since self-serving behavior is common among investment bankers, it will be interesting to see how the bankers’ $70 billion fund will fare. After the first withdrawal, there may be a “bank run” on the remaining assets by the remaining banks – a real life version of what will be “the Banker’s Dilemma”.
A FRACTIONAL RESERVE SAFETY NET
The investment banks’ $70 billion liquidity fund is predicated on much the same premise that fractional reserve banking is based. While it is understood there may not be enough in the fund to cover all needs, it is assumed that not everyone one will need their funds at the same time.
This thinking/sic assumption is the basis of today’s fractional reserve banking system; because, as in the banker’s “liquidity plan”, there is not enough money in US banks in the event of significant withdrawals by savers.
There is $6.84 trillion on deposit in US banks; but US banks have only $273.7 billion cash on hand. The banks cannot possibly pay back depositors all their money as only 4 % of depositors’ funds are actually available. The rest has been loaned out, i.e. to real estate developers, etc.
The safety net of both bankers and depositors may prove inadequate in the days ahead. Be forewarned.
INVESTING IN CHAOS
Investing in these times is investing in a time of chaos; and gold and silver, traditional havens, appear to have failed in that role, both having sustained significant losses of late. But don’t dismiss gold and silver so quickly. Their day is coming.
The recent correction of gold and silver was not unexpected. In my book, I noted that in 2006 UBS had predicted a commodities sell-off – an avalanche sale of all commodities – could occur and take down gold in the process.
Page 48, from How To Survive The Crisis And Prosper In The Process:
In the June 5, 2006 article, UBS also warned that while the long term outlook for gold was decidedly positive, there was an intermediate risk of a global economic downturn that would drag “gold down in an avalanche sale of all commodities”; an avalanche that gold would ultimately survive before embarking again on a strong upward path.The global turndown predicted by UBS in 2006 is underway; and the current sell-off of commodities, an avalanche sale of all commodities, may well be the event predicted by UBS. That such is occurring means we are now entering what I call the third and final stage of economic-collapse.
No one knows how long this stage will be. It is clear, however, from the recent takeovers of Fannie Mae and Freddie Mac, and the collapse of Bear Stearns and Lehman Bros. that there has been a seismic shift recently in the global financial landscape.
This stage is the last period in which investments can be profitably re-allocated to take advantage of what will soon happen, a financial tsunami the likes of which have never before been seen. A deflationary collapse with hyperinflation is only one possibility. There are more.
Professor Fekete’s final session of Gold Standard University Live will take place in Canberra, Australia, November 11-14. I will be joining Professor Fekete and Tom Szabo in discussing the gold and silver basis as a trading strategy in this critical period, see feketeaustralia@yahoo.com.
There are proven ways to prepare for what is to come. In matters of money trust in gold and silver; in matters of the world trust in the perfidy of man; and in everything, trust in God.
Until humanity changes, history will not.
blog:
http://www.posdev.net/pdn/index.php?option=com_myblog&blogger=drs&Itemid=81Darryl Robert Schoon
email: info@drschoon.com
website: http://www.drschoon.com
website: http://www.survivethecrisis.com
Schoon ArchiveLast 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!!!
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!
Gold $884.60 up $106.90
Silver $12.37up $ 1.92
Gold/XAU Ratio 6.73
Gold/Silver Ratio 71.24Big 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.
Last of gold is $781.20
A financial cataclysm on the way?
Posted On: Tuesday, September 16, 2008, 3:33:00 PM EST
In The News Today
Author: Jim Sinclair
Dear CIGAs,
The quoted amount of OTC derivatives on Lehman’s books are not notional value, but some silly mark to no market. The real number is trillions. When either party to an OTC derivative fails the value of that derivative instantaneously become the size of what was previously called notional value. With one quadrillion, one thousand one hundred and forty four trillion (BIS) in notional value, there is NO means to stop this financial cataclysm.
The s*** has hit the fan because trillions of dollars of OTC derivatives failed Monday.
The entity to fail is not the winner on those fraudulent pieces of paper but the loser. Otherwise it would not have failed.
Many other counter parties to those derivatives have fallen into potential bankruptcy.
The long spoken about “domino effect” is active and I now believe the Fed did not consider how a derivative becomes full value (formerly called notional value) when one side goes into bankruptcy.
Yes, Pandora’s Box opened Monday morning.
For years I was laughed out when this present condition was clearly described.
Gold is going to $1200 and $1650. Laugh at me again if you must.
Those that demand a date already have one – on or before January 14th, 2011.
This is it and it is now.
The greatest damage done to gold shares and gold came directly from those that were over-margined. Yes shorts got it down but those on margin got them here. Shame on you who demanded margin!
Continue to ignore all the means of protecting yourself and you do not deserve to be protected.
If you fail to retain proper parties such as an attorney to read your custodian agreement you do not deserve to be protected. Cheap out NOW and you crap out later, and that won’t be much later…
Gold $783.50 Up $19.80
Silver $11.00 Up $ 0.16
Gold/XAU Ratio 6.60
Gold/Silver Ratio 71.23I guess now we understand why the government wanted gold down in a hurry, the pending financial mess that Wall Street is now in with both feet.
For months you have been informed of how dangerous OTC derivatives are and now we are finding out first hand what Warren Buffett said years back which is now true, “they are weapons of mass destruction.”
The old-line brokerage firm of Lehman Brothers is now bankrupt. Merrill Lynch, which should be considered worthless, is being taken over by the second largest OTC derivatives holding bank in the US, the Bank of America(BAC). The takeover price makes no sense as Merril is technically bankrupt if they were ever to value their OTC derivatives holdings correctly.
Someone knows something is wrong. The takeover price for stock only, more paper floating around without an anchor to gold, is $29 a share. No cash is involved, just an entry for a different colored certificate.
Funny thing, the last on MER on the NYSE is $18.81 not anywhere near to $29 takeover price. It sounds like the BAC shareholders are not expected to approve the deal. Would you?
Already, Bank of America’s shares are down $6.72 at $27.02. It’s a bad deal for BAC shareholders. The Fed, the Treasury and some kingpin bankers seem to have forgotten they are not the majority of BAC’s shareholders. This is just a proposed deal and nothing more.
It looks like Merrill will follow in the footsteps of Lehman. The price activity on Merrill and Bank America says one thing, people want out.
The gold price looks to have put in a major intermediate low at $740 only days ago. The price of silver went down from over $21 to somewhere near $10.50.
The current ratio on gold to silver is 71.23 which is the highest for sometime. All this weakness is being brough to you by three large US banks and a handfull of questionable big short sellers with the blessings from the CFTC who refuse to say, “anything is wrong.” Oh I forgot to mention, the CFTC is a member of the Plunge Protection Team also know as the MMM(Mighty Market Manipulators).
The PPT has a good reason to hold down the silver prices as there is five times more gold above the ground than there is silver. What?? Yes, this is true according to Jim Butler the expert on silver. So, silver is the wildcard with the potential to explode in price at a far greater percentage than gold. This is what fiat producing currency central banks fear the most, for the public to take charge of the silver market and bring back silver as a monetary metal. This would greatly undermine any fiat currency.
Look what happened to Bunker Hunt when he tried to take charge of the small silver market in the early 80’s. The governement stepped in with the CFTC banning on the US futures exchanges all purchases. This creamed Bunker and sent the price spiralling south.
If ever there were a manipulated market it is the silver market. Having a cash market set up for the public is wishful thinking. Already, suspected intervention is taking place behind the government’s curtain of secrecy to withhold the supply of newly minted silver bullion coins, mainly because it’s in short supply. Call it anything you like, it’s happening. The mint says there is a shortage of blanks to account for the dry-up in supplies. If you believe them they your mind is being manipulated according to their plan.
You see, silver is 100% consumed by industry, mainly for jewelry, industrial uses and some left over for silver bars and bullion coins, if possible. In the case of gold, only 5% is used up by industry and the rest just accumulates above ground.
Currently, not much silver is left over for bars and coins and the public is feeling the pinch at their local coin stores by having to go on a waiting list. No more cash and carry. It’s now, cash and wait. Never put a middleman between you and yous assets. You can still do cash and carry on e-Bay but with a premium to silver’s last sale as a result of the silver shortage.
Here’s something that doesn’t find its way in the media: the above the ground gold holdings are at a 250 year high while the above the ground holdings of silver are at a 250 year low. Now we know why the silver market is manipulated, so the public doesn’t find out and want it more.
One thing is painfully clear, the government uses all of its resources and more just to hold back the true value of silver.
Just like the gold price was held down to buffer it from the continuing meltdown to hit Wall Street today to make fiat currencies appear to look better. So too will the price of silver be temporally held back to restrain the public from making it a competing monetary metal and a confidence breaker to any fiat currency during these continuing financial crises.
Recently, a banking analyst stated there there will be from 125 to 150 more bank failures in this country before the whole thing is over.
With a last sale on silver at $11, one doesn’t have to possess that much of an imagination to grasp that silver’s potential to trade significantly higher is just a matter of time.
Jim Sinclair has stated that $1,650 on gold is coming in 2011. Premiums are starting to build up in the bullion coins now for people not wanting to wait for new supplies, if that ever does happen.
You see, that is the trick that they are trying to use on you to prevent your purchase today. Face it, the silver bullion supply channels have been bent to slow down or cut off silver bullion flow. The days of buying silver with a slight premium are over, especially at these levels.
The gold and silver markets should be much higher today but instead the government just goes on killing the messengers left and right.
In the Patriot Act it states that all gold valued at two times more the last sale and less is considered bullion. Will they come for our gold? If they do, everything above the value of twice gold’s last price will immediately jump in premium, including ownership in all gold realted companies.
Large numbers of the public have been chased from their gold stocks recently. Who has been buying? Remember, follow the money? Who has been allowing all these naked short sellers to bring the gold related companies down on their knees? Who has been influencing regulators to look the other way?
Who has been buying silver and the silver related companies during this criminal price suppression scheme? If you continue holding on to the horn of this precious metal’s bucking bronco you, too, will be a survivor.
Good luck!
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 $ 0.12The real reason commodities are tumbling
Article Comments JOHN HEINZLGlobe and Mail Update
E-mail John Heinzl | Read Bio | Latest Columns
September 10, 2008 at 6:00 AM EDTTo 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 $ 0.32Gold 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 67.11Kill 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, 2008In an interesting twist, Jon Nadler posted a report by a blogger two days ago that I could mostly agree with.
http://www.kitco.com/ind/nadler/sep0…http://goldchat.blogspot.com/2008/08…
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:
https://www.blogger.com/comment.g?bl…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.
http://goldchat.blogspot.com/2008/09…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.
http://www.occ.treas.gov/ftp/deriv/d…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).
http://www.perthmint.com.au//documen…
p. 81, bottomI 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!
https://www.kitcomm.com/showthread.p…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?
What??!!
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.
http://www.matthey.com/about/locatio…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!
Sincerely,
Jason Hommel
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
Dear CIGAs,
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 $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.
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 $829.90
Silver $13.59
Gold/XAU Ratio 5.56
Gold/Silver Ratio 61.07Another 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”:
http://globaleconomicanalysis.blogsp…
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:
http://www.federalreserve.gov/moneta…
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:
http://www.federalreserve.gov/boardd…
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:
http://www.reserveasset.gold.org/cen…
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:
http://www.lemetropolecafe.com/img20…
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:
http://www.rba.gov.au/PublicationsAn…
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.
“Blatant manipulations:
“– 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:
http://www.sprott.com/pdf/pressrelea…
The Cheuvreux brokerage house of the French bank Credit Agricole:
http://www.gata.org/files/CheuvreuxG…
And Citigroup:
http://www.gata.org/files/CitigroupG…
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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