Gold Market Watch

Breakdown in the Gold Market

2010-02-20T12:16:00.000-08:00

http://abundanthope.net/pages/Political_Information_43/Breakdown-in-the-Gold-Market.shtml

By Jim Willie
Feb 17, 2010

A great disconnect exists in the gold market between the exchange futures contract price (the paper price) and the gold bullion paid price for transactions (the physical price). The differential in price is growing wider, enough to place tremendous pressure on the gold market itself. Look not to the gold premium paid for purchases, but to high volume purchases in the tens of million$. In mid-December, almost every demand for gold contract delivery was matched by a cash delivery, complete with 25% bonus premium offered. The officials even produced a new ledger item called 'Cash For Delivery' that was necessary to balance their badgered books. It prompted little attention. Some call it a basic bribe. Others call it a technical default.

Fast approaching is the event of GAME OVER for London, a condition that has already reached critical level, according to a key reliable source of information with London connections and direct experience with its market events. How long can a major metals exchange sell contracts but have miniscule supply of gold in their vaulted possession? The paper gold market and the physical gold bullion market have finally separated in a practical manner, meaning actual gold has almost no role anymore in London paper contract settlement. The absence of gold in London requires extraordinary tactics to settle contracts and to obtain gold bullion. Red tape procedures delay delivery for individuals, and bribes accompany gold delivery demands as standard practice. The London Bullion Market Assn has almost zero gold, its supply having been drained in high volumes since early December, a process currently in acceleration. The opportunity to convert fiat money into precious
metal at prices considered reasonable is also vanishing. The London gold banker said,

"There is going on a lot more than meets the eye. The physical system is actually consolidating bigtime and is organizing itself with lightning speed, totally hidden from pretty much anyone, even the so-called insiders. The paper precious metal market and the physical precious metal market have defacto disconnected. The paper and physical gold markets currently operate in parallel universes. The outflow of physical metal from bank vaults is happening at a mind bending pace."

Notice the reference to consolidation and re-organization in a manner not apparent to those fixated on the existing cockamamy corrupted system that is permitted by loyalist regulators. The officials in the LBMA, COMEX, USDept Treasury, and elsewhere are struggling to maintain the current system, and reportedly are not in step with awareness of the newly devised structures coming into place. In the background, far from view, new systems are being fabricated from scratch. Some involve complex barter systems soon to emerge and hit the scene with a splash, with impressive vertical integration. At the same time, new currencies for usage are still undergoing planning, foundation setup, contract latticework, and more for actual implementation.

The true gold price might very soon become unknown, an extremely positive development. Telltale events such as bankruptcy, lawsuits, and arrests are likely to come, all in time, since the breakdown in order has led to extraordinary reactions. Right now, we see extremely strong tactics using naked gold short contracts at the London metals exchange (LBMA) and the COMEX in the United States to drive down the gold price. It is all illegal and permitted. Margin calls have hit, forcing further selling of paper contracts. Gold investor sentiment among the naive and less informed has been dragging, ever since early December.

The world is approaching a climax event. Sure, many analysts have made such a claim for months. But with Europe in flux, the USCongress in flux, the Persian Gulf in flux, the US-China trade battles escalating, and USTreasury debt finance recognized more and more as monetized printing press activity, we are truly approaching a climax event as gold metal has exited the London market. The trigger event is unknown. It will likely not be directly related to the above event fronts. It will probably be a typical garden variety event pertaining to the far from ordinary stresses tied to the ongoing crisis in the credit market, gold market, and currency market.

The financial press is critically important precisely now, for not spilling the facts on the current gold market breakdown and divergence. Much of the pressures are hidden though, since the financial press networks report only the official paper-based prices. Do not expect to read in Reuters or Bloomberg or the Associated Press or Wall Street Journal or the New York Times or Investors Business Daily or Barrons that a grotesque gold shortage exists in the London metals exchange or at the COMEX in New York and Chicago. They will not report that London is virtually drained of gold, yet still sells gold contracts. Accurate news reporting would accelerate the breakdown and remove the possibility for time extension. The press will not report that billionaires are emptying their gold bullion accounts at rapidfire pace, out of gross distrust of the bankers, since gold leasing has illegally been standard practice for many years. Imagine selling lumber contracts
without wood delivered. Imagine selling mortgages without home titles delivered. Actually, Wall Street did precisely that from 2003 to 2007.

LONDON AS TARGET

Last August 2009, a busload of former key employees from the USDept Treasury and Wall Street firms arrived in Brussels Belgium. They turned themselves in to legal authorities in an attempt to avoid eventual prosecution. They came loaded with evidence, documents, emails, testimony, boxes of CDs, and much more. They won asylum in exchange for turning state's evidence. The Brussels Serious Fraud Squad is running with the data. All indications point to a strategic decision made by the Brussels Interpol squad. Their target is London, because it lies at the center of the syndicate enforcement of the fiat currency system, where the gold suppression is centered, where the greatest point of weakness exists, where the absence of gold is most glaring to make them vulnerable. London is the weakest link in the Ponzi Scheme chain, known as the global monetary system with USDollar price mechanism and USTreasury Bond reserve component in banks.

Another important event occurred, this in December. A clearinghouse held a Letter of Intent to supply the London metals exchange with 250 metric tonnes of gold bullion. The contract was interrupted. The method used to disrupt and derail the contract is a story unto itself. Little is known in verifiable form. The point is that London bankers were denied an important channel of gold in supply. At the same time, demands came from private billionaires to take back possession of their gold in allocated accounts. They are often called in the gold industry the 'sovereigns' politely. When pressed for details, my sources tell of their Chinese background. In recent weeks, the billionaires have been joined by others from Central Europe, in particular from Switzerland. So London is being drained of gold and not being resupplied, from the front door and from the back door. A breakdown is coming, and accidents assured. Gold is the ultimate vulnerability. It underpins
the USDollar, competes with the USTreasury Bond, while the USDollar remains buttressed by the Petro-Dollar defacto standard. That too has been served notice. See the Saudi announcement last May 2009, with Russia, China, Japan, and Germany at their side. Eventually, crude oil sales will not be fulfilled in US$ settlement.

PARADOX OF INELASTICITY

Gold is unique as a market, as far as its tendency to seek equilibrium from matched supply and demand. Since the year 2005, my analysis has pointed out the unique condition of gold as far as supply inelasticity is concerned. My forecast over four years ago was to expect less gold output from the mining industry, even with higher gold price. That forecast was correct. In addition to more difficult mine projects, deeper ore bodies, thinner gold veins, and more costly projects, other paradoxical factors have been at work. The industry projects surely translate greater challenge into lower output. Introduce the lunatic management of the Marxist leaders in South Africa concerning electricity production. Dirty coal at power plants and higher mining firm taxation assure much lower gold output from the industry's former leader. Numerous are the reasons for lower gold output in the current year, even with high gold price. The industry is in decline. Ultra-rich
ore bodies are long gone.

My forecast of lower gold output at higher gold price, the inelastic factor, went like this. As large mining firms suffer the consequences of their unwise (surely illicit, perhaps illegal) future gold sales within their cratered hedge books, the losses would approach catastrophic levels. Take Barrick Gold for example. In 2007, they announced the complete cover of their disastrous hedge book. They lied and covered about one third, using dilutive new stock issuance and new long-term corporate debt. In summer 2009, they announced again the complete cover of their disastrous hedge book. The financial press forgot that they supposedly removed all future commitments just two years ago, hardly a surprise lapse of memory.

Again Barrick lied, since they ran out of funds from yet another grand stock issuance that again crippled their stock from vast dilution. The Toronto and Wall Street investment community still loves this total dog of a stock, as collusion and kickbacks must be main features to prop the stock. Just look at its Board of Directors to detect vast syndicate presence. In fact, it has two Boards to provide extra service to the stockholders, more like one to the syndicate. So in conclusion, the cover of huge hedge books cost the big mining firms tens of billion$ in funds that otherwise would be devoted to mine projects and additional gold output. It did not happen, since mine industry funds went into the sewer of future gold price suppression. The most curious aspect of this factor is the
lack of investor lawsuits for failed fiduciary responsibility.

The flip side to this important price reaction factor is the demand inelasticity. When on the upslope, the phenomenon is called Gold Fever. A rising gold price prompts a rising demand for gold. Imagine a 50% increase in the price of televisions resulting in lines forming to buy more costly TVs. Never. But such is normal for gold. When on the downslope, the phenomenon works in reverse. A falling gold price, in particular for the paper gold price dictated by brutal gold futures contract pressures, often not reinforced by the presence of gold bullion, results in a gradual darkened gloomy sentiment for gold. People do not rush to buy more gold since it has been offered at a cheaper price. Rather, they are trapped in margin calls when leverage is applied. Rather, they give up and sell out, dump their gold, and lick their wounds. These are the legion of dummies and risk junkies.

These are the vast hordes who do not exercise patience and prudence, fully aware of the gold exchange distress. They will return, but when they do, they will purchase gold at a price 50% higher than when they abandoned the precious yellow metal.

They will double up when the gold price has doubled.

DIVERGENCE TOWARD COLLAPSE

My forecast on gold made a couple months ago within the Hat Trick Letter was clear. The gold price will experience a remarkable divergence. As the collapse approaches, the paper gold price (from futures contracts) will decline while the physical gold price (from bullion purchases) will rise sharply. The differential will grow gradually at first, then burst into a grotesque price disparity. When this occurs, expect darkness to fall upon the gold market. At this point, pure speculation follows. My expectation is for the official gold metal exchanges to shut down, at least temporarily. They have no gold, after all, so there aint nuthin to sell! To remain open only aggravates their contract and legal risk. Look for prosecutions of middle level officials from the exchanges, heavy police pressures put on them, and deals cut to bring down the kingpins. This is standard police procedure. Lawsuits are the wild card, hard to control, difficult to predict.

Pressures build that contribute toward the divergence. Whenever large deliveries are made in recent months from the gold exchanges, a new rigorous procedure must be followed. Delivery verification involves strict assayer information like certificates and dates and firm names and stamps. Before autumn 2009, such procedures were unheard of. One can make two conclusions.

First, the buyers are distrustful of the gold bullion quality, amidst prevalent stories of not just 80-year old bottom of the barrel London gold bar quality, but of tungsten bars with gold plating. My sources tell of widespread cooperation toward data gathering for the documentation of the pathways that prove broad tungsten bar fraud. The risk is palpable, as murder threats hang over the project. These are after all syndicates, and they have had full control of the government treasuries ever since 1992, when Robert Rubin infiltrated the scene as US Treasury Secretary from his former Goldman Sachs currency trading post.

My expectation is when the breakdown comes, several key locations across the world will post and publish their actual transaction prices without names. They will vary somewhat. Even today, the Hong Kong gold spot price differs from the London gold spot price by $10 to $20 per ounce. This is standard, and reflects different demand levels against different supply levels. However, in the not too distant future, several key locations will herald their actual gold prices, which will be averaged, thus enabling the first true gold prices in a few decades. That day is coming, and those who stubbornly hold their physical gold & silver, do not yield to pressures, do not react to phony paper prices, they will be rewarded.

People who expect that day to be accompanied by unaltered political and economic landscapes are badly misguided. Think ugly! In fact, some ugly developments already have begun to crop up. A new USGovt rule requires that any large volume gold purchase must satisfy strict anti-money laundering guidelines. So further restrictions have come. Maybe the day will come also for declaration of any American owning a foreign bank account to be illegal. Think desperation!

THE GOLD BASE AMIDST CONFUSION

Many are the background factors to gold. The principal story comes from Europe. The default of sovereign debt is assured to all but the experts, for Greece, for Spain, for Italy, for Portugal. Germany walks a fine line, as they pretend to prevent the breakdowns. They eagerly push for defaults, along with expulsions from the European Monetary Union, that group sharing the Euro currency. The Euro experiment has been a failure to Germany, ransacked of $400 billion each year in savings for a full decade. That tally is $4 trillion to Germany, which wants the Southern European fat trimmed off completely. The Euro currency decline will continue until clarity comes to the expelled member nations and to the new structure in the aftermath. The current Euro will continue to flounder in confusion, seen as a queer benefit to the USDollar. The European core with Germany and Benelux nations at its nucleus has firm fundamentals, a fact to emerge soon. European leaders
benefit from a lower Euro valuation, as export trade can be encouraged in an economic stimulus, but more importantly as US$ reserve assets rise in value for bank support. Dubai started the process of debt intolerance. The Euro has embarked on a death-birth process, the end of the Broad Euro and the beginning of the Core Euro. The new Core Euro currency will resemble the old Deutsche Mark, whose return will coincide with other nations reverting to their former domestic currency. Except the new DMark will be strong and the reversion currencies will be trashed 25% to 40% lower. Unless and until Germany emerges with a solid plan with a new Super-Trim Euro currency, the US$ will benefit at the Euro's direct expense. The Euro usage as a secondary global reserve has caused suffering. It was not designed for that purpose. Reversal is demanded. Gold faces competing forces to both lift its price and harm its price.

The currency market is in disarray. A bizarre USDollar rally seems to be underway, a second chapter to the Dollar Death Dance from one year ago. The chaos in the Euro currency combines with threats to sidetrack the extreme USGovt wasteful spending course, to offer cause for a higher USDollar. Such confidence in restored fiscal management is grossly misplaced, as the Black Holes of Fannie Mae & AIG expose colossal costs, and as the military budget grows without check or balance. The wrecked USGovt, USBank, USHousing, and USEconomy indicate a continued decline is justified. The Q4 Gross Domestic Product figure should have elicited laughter, but at least analysts noted the powerful effect of inventory buildup. Q4 data will reveal a climax sugar high, clearly evident as the USFed and USDept Treasury attempt to step back from powerful monetary excessese. Without a lower USDollar and lower USHousing prices, no economic recovery is remotely possible. A
bright populist light attempts to expose the wayward US central bank. Chairman will defend its ramparts, but the syndicate is growing desperate.

Gold is hostage to the European reconstruction and the USCongressional revolt. At the same time, the paper gold market and the physical gold bullion market have finally separated. Divergence and havoc come next. The paper gold price might find the 1080 level to serve as a base for the next upward leg in recovery. Be sure to know that gold has entered the Twilight Zone, along with the major currencies. The USDollar and the Euro currencies float adrift in the FOREX seas of confusion, as fiat money is more openly doubted. What is the value of the Euro if suddenly two, three, or four nations must end its usage, default their debt in its denomination, revert to older drachma, peseta, lira, complete with devaluation? Who knows? Gold will benefit from the chaos and confusion. The USDollar appears to benefit. The USGovt is much like a desperate gambler in Las Vegas, who is doubling down as the bust looms large. The main tool used by the USGovt to finance its
debt is the hidden Printing Pre$$. So far in the last twelve months, credit must be given not by creditors, but instead credit must be given to the Inflation Engineers who have managed to keep the vast monetization of USTreasury debt off the pages of the financial press and off the air of the financial networks. For every dollar financed by actual bond bids and purchases, three to five dollars are financed by Printing Pre$$ kept as hidden as possible. The levitation of the USDollar in such an environment is a very temporary situation.

When the billionaire sovereigns demand their gold to be returned home, no longer under custodial mismanagement, this does not represent new demand. The new demand comes from legitimate funds like those run by Paulson and Sprott, which have actual gold bullion behind their funds as stipulated in the prospectuses. The trust for the biggest Exchange Traded Funds is grossly misplaced in my view. No further slam criticism will be provided for the GLD & SLV funds. In my view, they will each become objects of criticism, lawsuits, and possible legal action at later dates. When the flack comes, their shares will probably trade at deep discounts to the gold & silver prices, maybe sooner than one might think. Little fanfare came when the decade closed in December, and the big winner among all investment classes was Gold. As the story of its performance is more fully recognized, when the facts sink in, expect investment demand to increase.

Futures contract in gold are broken, and former failures to deliver will become common. Anticipate counter-parties to go bankrupt and investors to be stuck with worthless paper gold derivatives. Physical gold is the best protection. Sovereign gold reserve levels have been updated. These are lowball figures that exclude holdings outside central banks, like in certain sovereign wealth funds. The IMF & USGovt levels are pure fiction. The Russian central bank is ramping up its gold holdings. Private sources tell of Putin storing much more gold in non-govt Russian locations in addition, that avoids public accounting.

China also has hidden gold holdings. At a mere 1.5% of stated reserves held in gold, China has much catching up to do. Most nations command 15 times as much gold as China in ratios. Demand by China will surely be steadily strong, powerful, and significant for years. Most industrial nations command a 60% to 70% gold ratio in total reserves. Debate aside on reserves reality, if China were to strive toward 65% in gold ratio of reserves, it would need to accumulate 44,619 tonnes of gold bullion. Their deficit represents 27% of the total existing gold hoard held above ground. The path toward prudent reserves management will push the gold price skyward.

Gold inspectors have arrived in London, barbarians at the gate. The drainage of gold bullion at the exchanges is well along. Revelations of contract fraud and delivery failures has begun. Some analysts have dished out criticism of an article written by the Jackass last May 2009 about hitmen coming to bust the COMEX. Eric deCarbonnel of Market Skeptics seemed to require the signed contracts with dates and ordered hits, even weapons used, methods detailed, blood spray patterns documented, in a very foolish rebuttal. Curiously, Eric deC has provided corroborating evidence to fortify my arguments, with details on irregularities in well written articles to cover events from London. Otherwise, he does excellent analysis. My comments were general in the article, offered figuratively. In no way were they intended in literal fashion, like men with uzis and machine guns in a hail of bullets directed at exchange officials, laying waste to the corrupt halls leaving pools of blood. The process has begun, as hitmen have indeed arrived. The location is London, not New York, but no difference since a strong umbilical cord of fraud connects the two primary locations.

The hitmen came in two types. The first were contract holders who drained the London Bullion Market Assn of its gold in late autumn, especially December. Many were wealthy Chinese billionaires, demanding return of their own gold bullion, forcing return with legal action and hired attorneys. Others more recently were Swiss wealthy individuals, whose demands confirm suspicion of illegal and illicit practices, like leasing from gold accounts for sales. Now secondly have come the inspectors, hired by individual billionaire account holders who could soon demonstrate improperly leased gold. The inspectors are the HITMEN!!

They actually began arriving in early December but have widened their scope of work. The metals exchanges cannot stop them from performing their inspections and verifying hundreds of million$ in gold account holdings, sometimes billion$. Gold bullion has improperly been leased. Exchange officials should be worried about lawsuits and claims of contract fraud, as well as prosecutions and middle level employees offering state's evidence. They might be more worried about angry billionaires defrauded of their gold bullion, who hold mere paper certificates. Such men indeed have hefty budgets to hire professionals to do some dirty work in the shadows. Eric deC might actually see contract hits if patient enough

http://news.goldseek.com/GoldenJackass/1265295600.php

The Bank Of England Engaged In Flagrant Gold Manipulation In The Interwar Period Via The New York Fed; Does History Repeat Itself?

2010-02-16T14:00:00.000-08:00

http://www.sott.net/articles/show/202964-The-Bank-Of-England-Engaged-In-Flagrant-Gold-Manipulation-In-The-Interwar-Period-Via-The-New-York-Fed-Does-History-Repeat-Itself-

The Bank Of England Engaged In Flagrant Gold Manipulation In The Interwar Period Via The New York Fed; Does History Repeat Itself?

Tyler Durden
Zero Hedge
Sat, 13 Feb 2010 16:50 EST

An article written by University of Tennessee professor John R Garrett, "Monetary Policy and Expectations: Market-Control Techniques and the Bank of England, 1925-1931", which describes in exquisite detail the gold falsification measures undertaken by the Bank of England in the interwar period in order to impact interest rates in a favorable direction, performed with the full criminal complicity of the Federal Reserve Bank of New York, may mean paranoid "gold bugs" could soon be forever absolved of their "tin hat" wearing status as outright gold, and other data, manipulation by a major central bank is now proven beyond doubt. The implications regarding the possibility of comparable deceitful and treasonous acts by modern central bankers are staggering.

The Bank of England depleted its open-market portfolio by secretly sterilizing large gold inflows. Thereafter interest rates were influenced by manipulating reported gold flows.... A gold flow falsification was over two-thirds as effective as an open-market operation.

Falsifying critical gold data worked for Britain 70 years ago. Is it working now too? And is the BOE alone, or is Bernanke taking advantage of the Bank of England's experience? To be sure, the world was different with the Gold Standard the bedrock of monetary policy. Yet are the similarities between then and now not greater than the differences? With the shadow economy exposed as hinging on the investing community's desire to go with the prevailing "valuation" lie (a reason why the shadow economy in broad terms will take many years to return, if ever) the core asset is and always will be gold.

And yet the main question remains: why did the Bank of England openly and flagrantly manipulate critical data? Why did it mislead the citizens of the country it was supposed to serve? And if this happened in the past is it happening now? Is this the reason why the Federal Reserve is so opposed to exposing itself to public scrutiny and audits? If the BOE was engaging in outright fraud in the 1925-1931 period, why would today be any different?

Garett's mesmerizing report, published in the September 1995 issue of Monetary Policy and Expectations, has oddly not received much if any public notice, with not a single mention of the article or its implication in either the blogosphere or the mainstream arena. This is very unusual as Garret's disclosures would lend vast credence to not just gold bugs' claims that there is blatant (ongoing) gold data manipulation, but that Central Banks regularly engage in outright deception when it comes to achieving desired monetary policy results. To wit:

Montagu Norman, the Governor of the Bank of England... engaged in a large-scale deception that greatly over-stated the size of the effective open-market portfolio, understated the size of the gold stock, and misstated the size and even the direction of gold flows.

Not only that, but Garrett provides a direct link between secret gold market operations by the BOE and accumulation of US Treasuries: a critical concept not just in interwar Britain but more so currently, when faced with the need to finance trillions in budget deficits, the market is poised to decline by 25%+ should the US government experience a failed auction. Oh, and guess who was complicit in the BOE deception, and was used by the British central bank as a trading conduit? Why, the Federal Reserve Bank of New York, of which Tim Geithner was president from 2003 to 2009.

Norman sold pound-denominated securities to sterilize the additional bank reserves created by the gold inflow. He simultaneously sold gold for dollars, lowering the Bank's reported gold stock, and bought U.S. Treasury bills with the proceeds. He also had all transactions carried out on the New York market by the New York Federal Reserve Bank so that they could not be traced to the Bank of England. (see Figure 1) The U.S. Treasury bills were comingled with pound-denominated "other securities" in the Bank's published open-market portfolio and were assumed by the markets to have been pound-denominated securities. In one stroke the gold inflow and the decline in the open-market portfolio were hidden. Bank Rate was kept at a very high level given the abysmal state of the economy, well over the level that would have prevailed under the Bank of England's prewar reaction function.

The motive: the traditional misrepresentation of inflationary/deflationary forces to the general public.

Had it become public knowledge in the spring of 1928 that deflationary policy was three times as severe as reported and concurrently that gold inflows and the gold stock were at record levels, Norman would have been through.
And if anyone thinks the Fed's penchant for secret is a novel thing, just look at what was happening in the dark corridors of the Bank of England in those dark days after World War I:

Sayers documents that the Committee of Treasury, the Bank of England's day-to-day governing body, was left in the dark, as was the Court, the Bank's de jure and, before Norman, defacto policy body. Sayers expresses surprise at the secrecy with which open-market operations were surrounded even within the Bank's inner corridors. This extended to the point of declining to keep in the Bank's confidential archives any written records of policy decisions motivating transactions. However, for Norman's policy model the utmost secrecy was essential.

But it doesn't end there: what Montagu Norman did was virtually equivalent to treason. One, thus, can not help but wonder what Ben Bernanke does behind closed doors.

Norman's deception was audacious, as it involved the abrogation of Parliamentary authority over the coin of the realm and the subversion of the ancient charter of the Bank of England. These major questions of state, however, became bureaucratic trivialities compared to Norman's daily task of convincing the financial markets that he was in control when in fact he was not. An effective open-market portfolio of well over 50 million pounds was required to maintain control through standard open- market operations. From late 1926 until the end of the gold standard Norman never held the minimum portfolio, and normally could muster only one-fourth or less of the requisite strength.

And while we can be sure that the Federal Reserve is certainly not performing the same kind of illegal and treasonable activities, as otherwise Federal Reserve General Counsel Scott Alvarez would be in prison for gross perjury, courtesy of Alan Grayson, looking back at history may provide some other ideas of how the Fed could engage in other just as illicit monetary activities:

Montagu Norman maintained his tenuous grip on the market by fully exploiting all traditional policy instruments and through the creation of a wholly new expectations channel for monetary policy. Four methods were employed: open-market operations; special deposits; coordinating public finances; and false reporting of gold flows. The quantitatively least important method of market control was using confidential special time deposits from individual financial institutions to take reserves off the market. Special deposits had to be substantial and secret, as the Bank was claiming in its published figures that it had no reason to resort to special deposits to drain reserves. Thus special deposits were difficult to use as a regular policy tool (see Table 1). Although special deposits were used only three times, each instance came during a period of market-control difficulties (see Figure 2).

Yet monetary policy response were vastly limited:

As the open-market portfolio was completely exhausted by 1928: 2 (see Table 2), contractionary monetary policy could not have been maintained otherwise. However, there were limits to such help, as padding the Treasury's balance at the bank required issuing more Treasury bills than necessary, which cost the taxpayer, and was therefore certain to draw inconvenient questions from the Chancellor of the Exchequer.

And here is where we enter the twilight zone:

Norman published misleading Bank of England balance sheets that falsely reported gold flows. Up until late 1926 the gold inflow was consistently understated, but the direction of change in reported gold holdings faithfully followed actual gold holdings. Sayers states that Norman's intention in hiding gold was merely to accumulate a reserve cushion for a rainy day, and does not view the hidden gold as a market- control tool, though he admits that the secret reserves supported tighter monetary policy. Sayers's position, which is consistent with the pattern from July 1925 until October 1926, may reflect Norman's original intention. However, from late 1926, just as his open-market portfolio declined below the market-control threshold, Norman did not just underreport gold inflows, but began to under-, over-, and misreport gold flows as appropriate for his market-control needs. Every possible type of false reporting was committed.

If after reading this historical evidence of Central Banking treason, senators are unable to pass Ron Paul's Fed Transparency Act then there has to be open social action to clean out the Senate of all those who claim that the Fed's actions are pure and true, as they are merely corrupt cronies, bought entirely by interests of the Federal Reserve, and thus Wall Street. Furthermore, we urge readers to follow through on footnote 34 of the Garrett report "For example, Woolley, Monetary Politics; and Neumann, Precomitment. Note that Woolley also finds evidence for the U.S. of a channel of influence running "backwards" from the central bank to the administration." We are very curious just what "evidence", besides the circumstantial, exists that the administration is nothing but the Fed Chairman's puppet.

The BOE's actions, which were open and flagrant fraud and deceit, went far beyond just gold manipulation. One can easily find parallels between the Mutual Assured Destruction wild card used by Norman and such "end of the world" exhortation by Paulson, Bernanke, Geithner, Blankfein and everyone else who stands to see their accumulated wealth disappear should there be a full audit of the Federal Reserve.

Norman's proffered scenario called for a rise in Bank Rate supported by open-market operations. To restore reserves the London clearing banks would call in their overnight money, the chief source of finance for the discount market's bill portfolio. To pay off their call-loan borrowing, the discount houses would be forced "into the Bank," forced to discount their portfolios at Bank Rate, a full 2 percent above the call-money rate. Thus Norman was threatening to force the discount houses to liquidate their highly leveraged portfolios at rates 3 percent above those contemplated when the portfolios were purchased (the 2 percent differential between call money and Bank Rate plus a 1 percent increase in Bank Rate). Given the thin margins and low capital levels in the discount business, this would have produced severe losses.

Despite Norman's weekly meetings with the discount houses' governing body, he waited to deliver his ultimatum until the pound's seasonal autumn weakness, when the market was already nervous about an increase in Bank Rate, five months after the market-control incident began. Why Norman had simply not drained sufficient liquidity out of the market at the time of the incident was probably puzzling to the discount houses, but the dire consequences of Norman's threat made it unlikely that anyone would call his bluff, if anyone could have even conceived that he was bluffing. In fact, he was. His portfolio was empty.
Garrett's findings ultimately provide a critical basis to reevaluate the entire foundation of modern fiat-system based economics.

The results may be summarized as follows. Markets can not tell when a central bank is lying. They then have the option to accept all or reject all forecast information emanating from the central bank. Under such circumstances the credibility model asserts that private financial markets reject all central bank information. This is possible because the financial markets' private information is assumed to be almost complete. However, the results presented here contradict this assumption and lend support to the opposite case: the markets' private information is so incomplete that they can not dispense with central-bank sources. The implication for the credibility model is devastating because pervasive ignorance and uncertainty allow the central bank to maintain its position as a disseminator of forecast information even if the central bank is guilty of extreme dishonesty, as under Norman. Under these circumstances monetary policy will be an effective instrument to stabilize the economy against both money demand and real shocks, which contradicts the core result found in the large and influential credibility-model literature.

And, sure enough, with these findings, the death of Monetarism and Keynesianism is one step closer:

Recently support has increased for Kindleberger's "internationalness" hypothesis and in particular the role played by the internationally shared characteristics of the macroeconomic policy system. The three most important features of the macroeconomic policy system were fiscal policy constraints through balanced budget policy rules or laws; the independent central bank as the uncontested policy authority; and the gold standard as the system's enforcer. The postwar international financial order was managed by central bankers who were not stabilizers, whether of a Monetarist (stabilizing the money supply) or Keynesian (stabilizing the level of output) variety. Montagu Norman's policy model and his policy choices lend clear support to the new interpretation. Much of the earlier literature explicitly or implicitly assumes interwar central bankers were stabilizers. Conclusions dependent upon this premise must be reevaluated.

Garrett's conclusion is stunning. Should comparable deception be found at the epicenter of monetarism, i.e., the Federal Reserve, the refutation of the entire "goal seek" science of economics as we know it may soon be at hand.

[T]he behavior of British financial markets is shown to be inconsistent with the microfoundations of the new classical model- expectations not only moved in a policy reinforcing rather than a policy negating direction, but expectations became a reliable, systematic policy instrument. One of Thomas Sargent's hopes is fulfilled-economic history proves to be fertile ground for testing the accuracy of complex macroeconomic theory-though the outcome is probably not what he had expected.

We urge readers to read the Garrett paper and to send it to their representatives and senators, with the hope that once it becomes fully clear that formerly reputable Central Bankers openly, repeatedly and in flagrant violation of their charters, engaged in outright market manipulation and data fraud, that the Federal Reserve will finally be audited or abolished, which for all intents and purposes, will end up being the same thing.

We are confident that somewhere Mark Pittman is smirking, all too knowingly.

Gold - China's End Game?

2010-02-03T09:47:00.000-08:00

TV cash-for-gold firms 'offer fraction of true value'

2010-01-26T12:16:00.000-08:00

http://www.dailymail.co.uk/news/article-1244866/TV-cash-gold-firms-offer-fraction-true-value.html

Sean Poulter
UK Daily Mail
Sat, 23 Jan 2010 13:42 EST

© Cashmygold.co.uk
Money within 24hours... but at what cost?

Companies offering cash for gold jewellery in a recent flurry of TV adverts are paying a fraction of the items' true worth.

The firms, which have latched on to increases in the price of gold, are 'shockingly bad value', according to consumer group Which?

Three pieces of new jewellery purchased by Which? for a total of £729 drew offers from the firms of as little as £38.57 for the lot.

One company refused to return a £399 necklace free of charge, as promised, on the inaccurate pretext that it was not gold at all.

The firms sell their services on TV on the basis that customers can post off their old and unwanted jewellery and turn it into cash to pay for a holiday or to clear debts.

The Which? Money magazine picked out three items of jewellery on the high street, a £115 bracelet, £215 bangle and £399 necklace, and purchased four of each. In November 2009 it sent them to four TV gold buyers, as well as getting quotes from three high street pawnbrokers and three jewellers.

CashMyGold offered the lowest prices on all three items, offering just £38.57 in total for the three pieces.

The firm offered just under £10 for the 9ct gold bangle. This compared to a scrap metal price quote of £54 from an independent jeweller. In one instance, Money4Gold told a Which? Money researcher that a 9ct necklace he bought for £399 was 'not gold' and it would cost him £10.95 to have it returned.

The scrap value of a necklace will be considerably less than its price as a piece of jewellery. However, this does not explain the paltry offers.

On average, the TV gold buyers offered around 6 per cent of the retail price for gold. High street stores paid around 25 per cent.

The magazine said: 'Companies that encourage people to sell their unwanted gold by post are offering consumers shockingly bad value and should be avoided.'

Postal Gold surprised the researcher by upping its quote when he rejected its cheque - almost doubling its offer for the bracelet and bangle. However, these rates were still far lower than those from jewellers and pawnbrokers.

The firms insist the prices they offer reflect the fact they have different costs to pawnbrokers and jewellers.

CashMyGold's managing director Justin Prichard added: 'Gold retail prices and the prices obtained for smelted gold are not comparable.

'Retail gold can be sold at a marked up price of up to 300 per cent.' He said that for this reason, they advertised only for old or broken jewellery.

A King's Ransom in Precious Metals Seems to Have Disappeared

2010-01-16T15:37:00.000-08:00

http://911research.wtc7.net/wtc/evidence/gold.html

Missing Gold

This image is found on the PBS.org website companion for the television documentary America Rebuilds under the section Uncovering Property. The page, entitled A Treasure in Silver and Gold, describes the vault as two levels of 3,000 square feet each. See the source for the full-sized image. The page credits images to Leslie E. Robertson and Associates.

The basement of 4 World Trade Center housed vaults used to store gold and silver bullion. Published articles about precious metals recovered from the World Trade Center ruins in the aftermath of the attack mention less than $300 million worth of gold. All such reports appear to refer to a removal operation conducted in late October of 2001. On Nov. 1, Mayor Rudolph Giuliani announced that "more than $230 million" worth of gold and silver bars that had been stored in a bomb-proof vault had been recovered. A New York Times article contained:

Two Brinks trucks were at ground zero on Wednesday to start hauling away the $200 million in gold and silver that the Bank of Nova Scotia had stored in a vault under the trade center ... A team of 30 firefighters and police officers are helping to move the metals, a task that can be measured practically down to the flake but that has been rounded off at 379,036 ounces of gold and 29,942,619 ounces of silver .. 1
Reports describing the contents of the vaults before the attack suggest that nearly $1 billion in precious metals was stored in the vaults. A figure of $650 million in a National Real Estate Investor article published after the attack is apparently based on pre-attack reports.

Unknown to most people at the time, $650 million in gold and silver was being kept in a special vault four floors beneath Four World Trade Center. 2

An article in the TimesOnline gives the following rundown of precious metals that were being stored in the WTC vault belonging to Comex. 3

Comex metals trading - 3,800 gold bars weighing 12 tonnes and worth more than $100 million
Comex clients - 800,000 ounces of gold with a value of about $220 million
Comex clients - 102 million ounces of silver, worth $430 million
Bank of Nova Scotia - $200 million of gold
The TimesOnline article is not clear as to whether the $200 million in gold reported by the Bank of Nova Scotia was part of the $220 million in gold held by Comex for clients. If so, the total is $750 million; otherwise $950 million.

There appear to be no reports of precious metals discovered between November of 2001 and the completion of excavation several months later. Assuming that the above reports described the value of precious metals in the vaulst before the attack, and that the $230 million mentioned by Giuliani represented the approxmiate value of metals recovered, it would seem that at least the better part of a billion dollars worth of precious metals went missing. (It is not plausible, of course, that whatever destroyed the towers vaporized gold and silver, which are dense, inert metals that are extremely unlikely to participate in chemical reactions with other materials.)

An article in The Sierra Times suggests that gold was recovered from two trucks in a tunnel under 5 World Trade Center, giving rise to suspicions that the trucks were being used to remove the gold from the vaults before the South Tower fell. 4 However, this report may have been based on an erroneous reading of other reports that describe the removal of crushed vehicles from a tunnel under 5 WTC in order to gain access to the vaults under 4 WTC to remove their contents. 5

Why is there this huge discrepancy between the value of gold and silver reported recovered, and the value reported to have been stored in the vaults? There are a number of possible explanations, from outright theft using the attack as cover, to insurance fraud. Until there is a genuine investigation that probes all the relevant facts and circumstances surrounding the attack, we can only speculate.

References [Go to URL to get links]

1. Below Ground Zero, Silver and Gold, New York Times, 11/1/2001
2. Thanksgiving at Ground Zero, National Real Estate Investor, [cached]
3. Crushed towers give up cache of gold ingots, TimesOnline, 11/1/02 [cached]
4. Cache of Gold Found at WTC Two truckloads retrieved through a tunnel in rubble2, [cached]
5. , Reuters and New York Daily News, [cached]

Thoughts from Asia's Gold Exchange

2010-01-15T16:48:00.000-08:00

http://www.oilprice.com/article-thoughts-from-asias-gold-exchange.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+oilpricecom+%28Oil+Price%29

Dave Forest
13th Jan 2010

The Tokyo Commodities Exchange is a pretty unassuming place.

The Exchange is housed in a non-descript eight-story office building. In the relatively non-descript Tokyo borough of Kodenmacho, far from the hustle of the business districts.

In times past, the area was the center for Tokyo's cotton trade. The exchange sprung up in service of this industry. Today, the firm no longer trades cotton but instead specializes in oil, rubber and especially precious metals.

Passing by on the street, you'd never guess this is the second-largest gold exchange in the world.

In 2008, more than $300 billion worth of precious metals traded on TOCOM. Volume dropped off a little in 2009, but still averaged 2 to 3 million lots monthly. And in the first half of the year, 60% of that trading was in gold.

Only the NYMEX and India's MCX challenge TOCOM for supremacy in gold trade. The exchange is a hub for gold buyers worldwide, with significant trade volumes coming from Hong Kong, Singapore, Australia, Britain, and the U.S.

As I toured TOCOM earlier today, a few interesting points emerged.

Tokyo's trading is less speculative than in other parts of the world. Most of the volume is transacted by large, institutional buyers. Individual traders are relatively rare.

And those buyers tend to favor longer-duration trades. In North America, near-month contracts tend to see the most volume. But watching TOCOM's screens today, the contracts for the next several months were running illiquid. Only in the November and December 2010 contracts did the volume pick up significantly.

It seems that TOCOM's traders like to give themselves more time for a trade to work out. A sensible strategy. (Although the illiquid near-term contracts could offer some opportunities for steel-nerved traders.)

It's also notable that investment at TOCOM has been slow to spread to new metals. In North America, fund money has played "merry-go-round" with gold, silver, platinum, copper, zinc, lead, uranium and almost anything else that can be stacked in a warehouse.

TOCOM however, recently delisted its sole base metals contract, aluminum. The metal was seeing almost no action.

Despite the conservative stance, TOCOM trading is changing. In May 2009, the exchange upgraded its platform to a quicker system. One of the benefits being that large-volume, rapid-fire traders like quant funds can now execute in Tokyo.

This introduces potential for prices to become disconnected from fundamentals. Quant fund traders don't care a whit about supply and demand. They may know nothing about the market. They simply plug share prices and trading volumes into a formula and buy when the computer goes beep.

Such trading has had a dramatic effect in North America and on other exchanges globally. Such that it's very difficult today to tell the "proper" price for a commodity based on supply and demand. Investment money pushes prices too high when it enters and too low when it leaves.

Which has major implications for capacity growth. When prices are higher than supply-demand would dictate, it "fools" metals producers into believing there is excess demand. They build new mines and smelters to add supply.

But this is illusory. If and when investment money exits the market, prices fall unexpectedly. Eventually real buying comes in and stabilizes the market. But at a much lower level then producers expected. Suddenly all those mines that looked great at $4/lb copper are now money pits.

The trend of increasing access for investment money to commodities markets will continue. And it's important for investors to bear in mind.

Are you willing to bet that $3.35 is the right price for copper? That there's enough oil demand in the world to support $80 per barrel?

Dave Forest
dforest@piercepoints.com
www.piercepoints.com

Russia sells gold to itself

2010-01-15T14:18:00.000-08:00

http://www.financialsense.com/fsu/editorials/kirby/2010/0114.html

Russian-Roulette
by Rob Kirby | January 14, 2010
Print
Let’s consider a well publicized recent sale of Russian gold bullion to itself:

Russia sells gold to itself

December 14, 2009 3:47pm by Emma Saunders

The Russian central bank will spend $1bn next week, buying 30 metric tons of gold from Gokhran, the state repository. Gokhran had planned to sell 20-50 MT on the open market, but cancelled after news of the sale leaked. The sale would have helped plug Russia’s budget deficit, and, apparently, purchase some diamonds from state-run miner Alrosa….

Does this not strike you as being odd?

In case you missed it, Russia announced that they are selling gold to THEMSELVES!?!?

The source of the gold data table appended below is the World Gold Council. It states that Russia possesses 607 [actually, now officially 640 tonnes with the addition of the recent 30-ish tonne purchase from itself] metric tonnes of gold bullion.

The revelation that Russia is “selling gold to itself” and lack of acknowledgment that Gokhran exists - is a MAJOR omission by the World Gold Council in their aggregate gold bullion data.

++Additionally, the World Gold Council also reports that as of October 2009, gold exchange-traded funds held 1,750 tonnes of gold for private and institutional investors.

The World Gold Council’s data keeper is GFMS Ltd. The GFMS web site makes the following claim:

GFMS is the world's foremost precious metals consultancy, specializing in research into the global gold, silver, platinum and palladium markets.

GFMS is based in London, UK, but has representation in Australia, India, China, Germany, France, Spain and Russia, and a vast range of contacts and associates across the world.

Our research team of fifteen full-time analysts comprises qualified and experienced economists and geologists; while two consultants contribute insights on important regional markets.

Executive Chairman Philip Klapwijk and CEO Paul Walker appear regularly at international conferences and seminars, and their articles have been widely published. All analysts travel regularly and extensively to stay in touch with GFMS' unrivalled network of contacts and sources of information around the world.

With 15 full-time analysts, two consultants and “representation” in Russia – how is that GFMS [and by extension the World Gold Council] can omit such a large hoard as stored at Gokhran and materially misreport the nature of Russian gold reserves? They didn’t even mention the existence of Gokhran in a footnote.

Gold professionals who have been inside Gokhran [Russian] State bullion depositories have provided me with personal accounts of this bullion depository. They report scenes reminiscent of the movie Gold Finger - on steroids – literally countless metric tonnes of neatly stacked gold bullion.

So, a better question might be, what else – regarding GOLD - has GFMS and the World Gold Council not reported or omitted?

Getting A Beat On Where the World’s Physical Gold Is Stored

It is generally accepted that for the entirety of mankind’s existence on this planet – the earth’s crust has yielded roughly 160 thousand metric tonnes of gold. The World Gold Council / GFMS identifies where roughly 32 thousand tonnes of that total are located.

We might add to what’s listed above, the following:

“No one knows exactly how much gold has been passed from generation to generation and is now stashed in safe deposit boxes across India. But bullion analysts estimate Indian families are sitting on about 15,000 tonnes of gold worth more than $US550 billion ($A600 billion).”

Then, if we conservatively assume that the rest of the world has as much as India stored away in safe deposit boxes – that’s another 15,000 metric tonnes.

Therefore by using reported World Gold Council / GFMS data plus some very conservative assumptions, we can approximately account for 62,000 metric tonnes of the world’s roughly 160,000 metric tonnes ever mined.

By the process of elimination and adjusting for the 62 thousand metric tonnes referenced above, there is a residual 98 thousand metric tonnes of physical gold bullion; the location of which cannot be readily identified.

The very nature of World Gold Council / GFMS data may be characterized as being static and don’t tend to change much year-over-year. This demonstrates that the owners of gold bullion DO NOT GENERALLY TRADE THEIR PHYSICAL STASHES – they sit on them!

The Conundrum That “IS” the London Bullion Market Association [LBMA]

The LBMA is considered to be the world’s foremost physical gold market. Here is their data on the number of ounces of gold “transferred” DAILY – by month, year-over-year – from Nov. 08 – Nov. 09:

Month Millions of Ounces Transferred / Day
Dec 08 17.5
Jan 09 18.8
Feb 09 23.8
Mar 09 22.2
Apr 09 20.5
May 09 21.9
Jun 09 20.5
Jul 09 17.7
Aug 09 16.4
Sep 09 20.6
Oct 09 20.8
Nov 09 21.5
Total 242.2
There are 22 business days per month, so the LBMA claims to have traded 151,046 metric tonnes of gold in the most recent 12 month period.

242.2 x 22 = 5,328 million physical ozs or 151,046 metric tonnes

The LBMA reports that they have “transferred” or traded 151,046 metric tonnes of gold – a commodity that when folks possess it, they are demonstrably inclined NOT TO trade it. Using another bench mark, annual global mine production is in the neighborhood of 2,500 metric tonnes. The LBMA claims to have sold last year’s global mine supply over 60 times in 12 months.

The LBMA claims to do this year-in, year-out.

This implies that ANY LBMA physical gold stocks are HIGHLY LEVERAGED through trade in paper gold

London is but one exchange where gold trades. Others include N.Y., Tokyo, Dubai, Bombay and different points in China. Don’t forget, physical ounces traded on ANY of these exchanges are additional ounces that London cannot be trading.

The reality is that every physical ounce of gold reported to be in the vaults of the LBMA and exchanges in general, is sold tens and perhaps more than a hundred times over in paper form. This paper selling suppresses what would otherwise be the freemarket gold price.

The Russians are known to be very shrewd and calculating. It makes one wonder whether the Russian announcement of a sale of gold bullion – TO THEMSELVES – might not have been a “tell” signaling their intention to not only withhold physical metal from the market and ensure that paper promises of delivery of real metal are honored.

Could it be that the Russians are really signaling that the assignment of false, arbitrary values [using futures / derivatives] to finite resources will no longer be tolerated?

If so, the real leverage is in owning physical gold bullion – not the paper promises.

Copyright © 2010 Rob Kirby

Fake gold bars in Bank of England and Fort Knox

2010-01-15T14:17:00.000-08:00

http://www.daily.pk/fake-gold-bars-in-bank-of-england-and-fort-knox-14477/

daily.pk
Mon, 11 Jan 2010 09:40 EST

It's one thing to counterfeit a twenty or hundred dollar bill. The amount of financial damage is usually limited to a specific region and only affects dozens of people and thousands of dollars. Secret Service agents quickly notify the banks on how to recognize these phony bills and retail outlets usually have procedures in place (such as special pens to test the paper) to stop their proliferation.

But what about gold? This is the most sacred of all commodities because it is thought to be the most trusted, reliable and valuable means of saving wealth.

A recent discovery - in October of 2009 - has been suppressed by the main stream media but has been circulating among the "big money" brokers and financial kingpins and is just now being revealed to the public. It involves the gold in Fort Knox - the US Treasury gold - that is the equity of our national wealth. In short, millions (with an "m") of gold bars are fake!

Who did this? Apparently our own government.

Background: In October of 2009 the Chinese received a shipment of gold bars. Gold is regularly exchanges between countries to pay debts and to settle the so-called balance of trade. Most gold is exchanged and stored in vaults under the supervision of a special organization based in London, the London Bullion Market Association (or LBMA). When the shipment was received, the Chinese government asked that special tests be performed to guarantee the purity and weight of the gold bars. In this test, four small holed are drilled into the gold bars and the metal is then analyzed.

Officials were shocked to learn that the bars were fake. They contained cores of tungsten with only a outer coating of real gold. What's more, these gold bars, containing serial numbers for tracking, originated in the US and had been stored in Fort Knox for years. There were reportedly between 5,600 to 5,700 bars, weighing 400 oz. each, in the shipment!

At first many gold experts assumed the fake gold originated in China, the world's best knock-off producers. The Chinese were quick to investigate and issued a statement that implicated the US in the scheme.

What the Chinese uncovered:

Roughly 15 years ago - during the Clinton Administration [think Robert Rubin, Sir Alan Greenspan and Lawrence Summers] - between 1.3 and 1.5 million 400 oz tungsten blanks were allegedly manufactured by a very high-end, sophisticated refiner in the USA [more than 16 Thousand metric tonnes]. Subsequently, 640,000 of these tungsten blanks received their gold plating and WERE shipped to Ft. Knox and remain there to this day.

According to the Chinese investigation, the balance of this 1.3 million to 1.5 million 400 oz tungsten cache was also gold plated and then allegedly "sold" into the international market. Apparently, the global market is literally "stuffed full of 400 oz salted bars". Perhaps as much as 600-billion dollars worth.

An obscure news item originally published in the N.Y. Post [written by Jennifer Anderson] in late Jan. 04 perhaps makes sense now.
DA investigating NYMEX executive ,Manhattan, New York, - Feb. 2, 2004.
A top executive at the New York Mercantile Exchange is being investigated by the Manhattan district attorney. Sources close to the exchange said that Stuart Smith, senior vice president of operations at the exchange, was served with a search warrant by the district attorney's office last week. Details of the investigation have not been disclosed, but a NYMEX spokeswoman said it was unrelated to any of the exchange's markets. She declined to comment further other than to say that charges had not been brought. A spokeswoman for the Manhattan district attorney's office also declined comment.
The offices of the Senior Vice President of Operations - NYMEX - is exactly where you would go to find the records [serial number and smelter of origin] for EVERY GOLD BAR ever PHYSICALLY settled on the exchange. They are required to keep these records. These precise records would show the lineage of all the physical gold settled on the exchange and hence "prove" that the amount of gold in question could not have possibly come from the U.S. mining operations - because the amounts in question coming from U.S. smelters would undoubtedly be vastly bigger than domestic mine production.

No one knows whatever happened to Stuart Smith. After his offices were raided he took "administrative leave" from the NYMEX and he has never been heard from since. Amazingly, there never was any follow up on in the media on the original story as well as ZERO developments ever stemming from D.A. Morgenthau's office who executed the search warrant.

Are we to believe that NYMEX offices were raided, the Sr. V.P. of operations then takes leave - all for nothing?

The revelations of fake gold bars also explains another highly unusual story that also happened in 2004:
LONDON, April 14, 2004 (Reuters) - NM Rothschild & Sons Ltd., the London-based unit of investment bank Rothschild [ROT.UL], will withdraw from trading commodities, including gold, in London as it reviews its operations, it said on Wednesday.
Interestingly, GATA's Bill Murphy speculated about this back in 2004;
"Why is Rothschild leaving the gold business at this time my colleagues and I conjectured today? Just a guess on my part, but [I] suspect something is amiss. They know a big scandal is coming and they don't want to be a part of it... [The] Rothschild wants out before the proverbial "S" hits the fan." - BILL MURPHY, LEMETROPOLE, 4-18-2004

What is the GATA?

The Gold Antitrust Action Committee (GATA) is an organisation which has been nipping at the heels of the US Treasury Federal Reserve for several years now. The basis of GATA's accusations is that these institutions, in coordination with other complicit central banks and the large gold-trading investment banks in the US, have been manipulating the price of gold for decades.

What is the GLD?

GLD is a short form for Good London Delivery. The London Bullion Market Association (LBMA) has defined "good delivery" as a delivery from an entity which is listed on their delivery list or meets the standards for said list and whose bars have passed testing requirements established by the association and updated from time to time. The bars have to be pure for AU in an area of 995.0 to 999.9 per 1000. Weight, Shape, Appearance, Marks and Weight Stamps are regulated as follows:
Weight: minimum 350 fine ounces AU; maximum 430 fine ounces AU, gross weight of a bar is expressed in troy ounces, in multiples of 0.025, rounded down to the nearest 0.025 of an troy ounce.

Dimensions: the recommended dimensions for a Good Delivery gold bar are: Top Surface: 255 x 81 mm; Bottom Surface: 236 x 57 mm; Thickness: 37 mm.

Fineness: the minimum 995.0 parts per thousand fine gold. Marks: Serial number; Assay stamp of refiner; Fineness (to four significant figures); Year of manufacture (expressed in four digits).
After reviewing their prospectus yet again, it becomes pretty clear that GLD was established to purposefully deflect investment dollars away from legitimate gold pursuits and to create a stealth, cesspool / catch-all, slush-fund and a likely destination for many of these fake tungsten bars where they would never see the light of day - hidden behind the following legalese "shield" from the law:

[Excerpt from the GLD prospectus on page 11]
"Gold bars allocated to the Trust in connection with the creation of a Basket may not meet the London Good Delivery Standards and, if a Basket is issued against such gold, the Trust may suffer a loss. Neither the Trustee nor the Custodian independently confirms the fineness of the gold bars allocated to the Trust in connection with the creation of a Basket. The gold bars allocated to the Trust by the Custodian may be different from the reported fineness or weight required by the LBMA's standards for gold bars delivered in settlement of a gold trade, or the London Good Delivery Standards, the standards required by the Trust. If the Trustee nevertheless issues a Basket against such gold, and if the Custodian fails to satisfy its obligation to credit the Trust the amount of any deficiency, the Trust may suffer a loss."
The Federal Reserve knows but is apparently part of the scheme. Earlier this year GATA filed a second Freedom of Information Act (FOIA) request with the Federal Reserve System for documents from 1990 to date having to do with gold swaps, gold swapped, or proposed gold swaps.

On Aug. 5, The Federal Reserve responded to this FOIA request by adding two more documents to those disclosed to GATA in April 2008 from the earlier FOIA request. These documents totaled 173 pages, many parts of which were redacted (blacked out). The Fed's response also noted that there were 137 pages of documents not disclosed that were alleged to be exempt from disclosure.

GATA appealed this determination on Aug. 20. The appeal asked for more information to substantiate the legitimacy of the claimed exemptions from disclosure and an explanation on why some documents, such as one posted on the Federal Reserve Web site that discusses gold swaps, were not included in the Aug. 5 document release.

In a Sept. 17, 2009, letter on Federal Reserve System letterhead, Federal Reserve Governor Kevin M. Warsh completely denied GATA's appeal. The entire text of this letter can be examined here

The first paragraph on the third page is the most revealing.
"In connection with your appeal, I have confirmed that the information withheld under exemption 4 consists of confidential commercial or financial information relating to the operations of the Federal Reserve Banks that was obtained within the meaning of exemption 4. This includes information relating to swap arrangements with foreign banks on behalf of the Federal Reserve System and is not the type of information that is customarily disclosed to the public. This information was properly withheld from you.".
The above statement is an admission that the Federal Reserve has been involved with the fake gold bar swaps and that it refuses to disclose any information about its activities!

Why use tungsten?

If you are going to print fake money you need to have the special paper, otherwise the bills don't feel right and can be easily detected by special pens that most merchants and banks use. Likewise, if you are going to fake gold bars you had better be sure they have the same weight and properties of real gold.

In early 2008 millions of dollars in gold at the central bank of Ethiopia turned out to be fake. What were supposed to be bars of solid gold turned out to be nothing more than gold-plated steel. They tried to sell the stuff to South Africa and it was sent back when the South Africans noticed this little problem. The problem with making good-quality fake gold is that gold is remarkably dense. It's almost twice the density of lead, and two-and-a-half times more dense than steel. You don't usually notice this because small gold rings and the like don't weigh enough to make it obvious, but if you've ever held a larger bar of gold, it's absolutely unmistakable: The stuff is very, very heavy.

The standard gold bar for bank-to-bank trade, known as a "London good delivery bar" weighs 400 troy ounces (over thirty-three pounds), yet is no bigger than a paperback novel. A bar of steel the same size would weigh only thirteen and a half pounds.

According to gold expert, Theo Gray, the problem is that there are very few metals that are as dense as gold, and with only two exceptions they all cost as much or more than gold.

The first exception is depleted uranium, which is cheap if you're a government, but hard for individuals to get. It's also radioactive, which could be a bit of an issue.

The second exception is a real winner: tungsten

Tungsten is vastly cheaper than gold (maybe $30 dollars a pound compared to $12,000 a pound for gold right now). And remarkably, it has exactly the same density as gold, to three decimal places. The main differences are that it's the wrong color, and that it's much, much harder than gold. (Very pure gold is quite soft, you can dent it with a fingernail.)

A top-of-the-line fake gold bar should match the color, surface hardness, density, chemical, and nuclear properties of gold perfectly. To do this, you could could start with a tungsten slug about 1/8-inch smaller in each dimension than the gold bar you want, then cast a 1/16-inch layer of real pure gold all around it. This bar would feel right in the hand, it would have a dead ring when knocked as gold should, it would test right chemically, it would weigh *exactly* the right amount, and though I don't know this for sure, I think it would also pass an x-ray fluorescence scan, the 1/16″ layer of pure gold being enough to stop the x-rays from reaching any tungsten. You'd pretty much have to drill it to find out it's fake.

Such a top-quality fake London good delivery bar would cost about $50,000 to produce because it's got a lot of real gold in it, but you'd still make a nice profit considering that a real one is worth closer to $400,000.

What's going to happen now?

Politicians like Ron Paul have been demanding that the Federal Reserve be more transparent and open up their records for public scrutiny. But the Fed has consistently refused, stating that these disclosures would undermine its operation. Yes, it certainly would!

Gold And Silver: Why They Are Important, And Why They Are Often Manipulated

2010-01-11T06:54:00.000-08:00

http://neithercorp.us/npress/?p=184

They Are Often Manipulated
By Giordano Bruno
Neithercorp Press - 11/18/2009

For decades, gold and silver investors have been warning the masses about the catastrophic weaknesses inherent in fiat currencies; currencies backed by nothing but empty promises and printed out of thin air ad nauseam by Central Banks. Precious metals, they said, were the only safe form of currency because they were finite, and could not be duplicated, meaning they could not be inflated to worthlessness. Until recently, these warnings have gone almost completely ignored by the general public.

Critics of gold (often proponents of Central Banks) contended that gold was an unrealistic and outdated foundation for an economy because its limited supply restricted liquidity, and kept a country from being able to “spend effectively.”

Well, America is closing in on the year 2010, and most of us have now had an opportunity to see that “free money” actually has a price. As I write this the dollar is hurtling down against numerous other currencies due to the private Federal Reserve’s decision to keep interest rates artificially near zero, as well as their decision to pump trillions of dollars of liquidity into foreign and domestic banks. Bloomberg estimates that nearly $24 Trillion has been pumped into the financial system by the Fed:

http://www.bloomberg.com/apps/news?pid=20601087&sid=aY0tX8UysIaM

What critics of precious metals didn’t seem to grasp was that gold’s limited supply was actually a saving grace, not a weakness. Gold has been used as currency for over 6000 years, and the U.S. Dollar was backed by gold right up until 1971 when Richard Nixon severed the Greenback completely from any tangible resource, though the Dollar to gold ratio had been waning since the establishment of the private Federal Reserve in 1913. America’s greatest industrial and financial accomplishments were made during the gold standard era, so to claim that a gold standard hinders economic progress is simply absurd. Even former Fed Chairman Alan Greenspan once vehemently defended the use of a gold standard:

“In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.

This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.”
Alan Greenspan, 1967

http://www.usagold.com/gildedopinion/greenspan.html

Another argument I have often heard is that gold’s value is an “illusion,” and only worth anything because people “believe it to be valuable.” This is a highly naive position. First, gold’s value is rooted in its scarcity as a malleable and storable resource that cannot be reproduced, making it highly adaptable as a form of currency. Paper money on the other hand, is entirely an illusion. It has no scarcity, no inherent value, and can be reproduced to infinity. Its worth is based entirely on faith. Whenever I hear critics attack gold, I have to laugh at the irony. Every downfall gold is accused of having are actually the same sort of downfalls ever present in the fiat paper money those same critics hold in their pockets. Yet they go on attacking gold; a tangible, real asset.

As long as free markets or any trade on a large scale exists in the world, there will always be a need for currency, and precious metals (or currencies backed by them) are the only concrete and stable financial units in existence.

Investors in PM’s have also been pleading with the public for years to look deeper into the COMEX markets and the obvious attempts by a minority of bankers to hold the value of gold and silver down. The Commodity and Futures Trading Commission (CFTC) is supposed to regulate and oversee any abuses in the COMEX, however, their investigations appear largely for show, and they have even been known to attack those groups who suggest manipulation as “delusional conspiracy theorists”. However, the evidence for market manipulation by globalist banks is evident and available to anyone willing to take the time to look it up for themselves. Let’s examine it now…..

Why Manipulate Gold And Silver Down?

Many people can’t seem to fathom why Globalists and Central Banks (especially in the West) would want to keep the value of PM’s down. The answer is very simple. Globalists believe in a philosophy of “centralization”, meaning, they believe that control over the finances, the politics, and the people of the world should be delegated to a small group of individuals with a “superior” grasp of governance. They believe that first economic, then political sovereignty of all countries should be dismantled and one world rule established.

“The powers of financial capitalism had (a) far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations. Each central bank…sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world.”

Carroll Quigley, member of Council on Foreign Relations (CFR), mentor to Bill Clinton, quote from “Tragedy and Hope”, 1966

“[There must be] some dilution of sovereignty, to the immediate disadvantage of those nations which now possess the preponderance of power … the establishment of a common money, might be vested in a body created by and responsible to the principal trading and investing people. This would deprive our government of exclusive control over a national money.”
John Foster Dulles, CFR founder, former Secretary of State, 1939

To help in this task, the Central Banks of the world turned to a fiat money system. Completely fiat systems allow central banks tremendous leeway to either build up or break down a country’s economy. By restricting or increasing the flow of money through a system by any amount they chose, they could create deflationary panic, inflationary collapse, they could create bubbles in credit based systems as the Federal Reserve did to the housing market. Essentially, under a fiat currency, the lives of millions are in the hands of only a select few men. If the dollar were backed by a tangible asset such as gold or silver, their ability to determine the flow of currency would be greatly diminished, and this level of financial control would not be possible.

This fact led to banker manipulation of the precious metals. Gold and silver COMPETE with fiat currencies. They offer an alternative to the currencies controlled by central bankers, and thus had to be removed from the picture. By manipulating the value of PM’s down, globalists could convince the general public that such commodities were “too unstable,” or “too ineffective and unpredictable”. Most American’s would shrug off gold as a novelty, good only for jewelry making and circuit-boards, instead of thinking of it as actual “money.”

Many so called financial experts make the mistake of assuming that banks manipulate markets out of a greed for profit, but in reality, finance, especially on an international level, is about political and social control. Precious metals offer a way towards monetary independence, thus, globalists will always endeavor to control PM markets.

How Are Precious Metal Markets Manipulated?

There are two primary methods to manipulating PM markets. Both require that an individual or group have incredible amounts of capitalization (central bankers print their own capitalization from thin air whenever they please). The first method involves a sometimes confusing investment strategy called “Shorting.” The second involves the issuance of gold and silver “bonds”. Let’s examine both methods…

Shorting or Short Selling: Shorting is a legal investment strategy that can be used by those with large amounts of capitalization to take advantage of and control the value of an entire market. Essentially, it is a “bet” placed by the investor which says the price of a commodity (or security) will go down.

Say an investor wants to “short” 10 oz of silver at $20 an oz, for instance. That investor borrows 10 oz from a broker or a third party. The investor then sells the borrowed silver on the market for $200, hoping that the value of silver will go down before he has to return what he borrowed to the third party.

Now, say the value of silver goes down to $10 oz after the shorting investor sells. When he pays back the third party, he only has to spend $100 to buy back the 10 oz of silver he originally borrowed. He has just made a profit of $100. This chart and video can explain further:

Traditionally, short selling is an important component of the stock market, allowing investors to “cover” other investments should a drop in the market occur. However, large banks have taken the process a step further into what is called “naked short selling”. Naked short selling occurs when a bank short sells an asset that it doesn’t really own. When a bank like JPMorgan Chase naked short sells a massive amount of silver they don’t actually own, this gives the illusion that the supply of silver on the market is actually much higher than it is. This in turn forces the overall value of silver down, as the fake supply outweighs the perceived demand. It also creates a guiding force in market psychology. When an incredibly large volume of short selling appears in a market, it sometimes convinces other investors that the market is about to fall, and they also sell, creating a cascade which lowers the value of the entire market. The market, in effect, fulfills its own prophecy. In fact JPMorgan pulled this exact scam back in 2008 causing the silver market to lose half of its value:

http://news.silverseek.com/TedButler/1238441075.php

http://www.occ.gov/deriv/deriv.htm

This would seem like an obvious crime in terms of gold or silver, because eventually the person who bought fake PM’s from the bank would expect delivery. When the bank didn’t deliver, they would be caught, right? Not quite…

The problem is that on the COMEX, most gold and silver is traded in paper bonds and derivatives. These bonds are supposed to represent a certain amount of silver or gold, and often they only exist as numbers on a computer screen. This is where the second method of market manipulation comes in.

PM Bonds and Derivatives: The sad fact is, most gold and silver transactions on the market today rarely involve any real assets changing hands. It is all done with paper bonds and computer trading. This gives banks like JP Morgan an incredibly easy avenue to manipulate prices. All they have to do is create bonds out of thin air, just like Central Banks create money out of thin air. Those bonds are then treated by other investors as real silver or gold. This gives the market the illusion that there is more gold and silver than actually exists, driving down the price. As long as big banks keep just enough gold and silver on hand in case some people want the real thing, no one would be the wiser. This is very similar to the legalized fraud of “fractional reserve banking” which allows entities like the private Federal Reserve to exist in the first place.

This smoke-and-mirrors act is based on an assumption: the assumption that a majority of investors will not trade in their paper bonds for real gold and silver. But what would happen if they did…?

Want To Stop Market Manipulation? Demand Physical Delivery Now!

The banker scheme to hold down PM’s hangs by a very thin thread. If a large percentage of investors were to get rid of their paper bonds and trade them in for real commodities, banks would eventually be forced to admit they do not have nearly enough silver or gold to cover the bonds they issued. The entire lie would be exposed and the value of physical metals would skyrocket, while the value of paper bonds would plummet to zero.

Some investors may ask, “Why would I want to do that? I could lose all the value of my fake bonds. Why not just let the illusion go on?”

What these investors don’t realize is that naked short selling and the issuance of false bonds cannot go on forever. In fact, short selling by the large banks has begun to fail already.

Due to inflationary printing by the Federal Reserve, and a projected U.S. deficit of $9 trillion, foreign central banks in countries like China and India have begun to snap up tons of gold at a time as a hedge against a U.S. Dollar collapse, which is immanent. This massive gold buying spree has offset the once unchallenged short selling of Western banks, causing the price to leap regardless of manipulation. The IMF recently tried to dump 400 tons of gold onto the market in an attempt to drive prices back down from their record setting highs. Instead, India immediately bought 200 tons from the IMF outright, and the price of gold rocketed even higher:

http://online.wsj.com/article/SB125722876971624729.html

Remember, if someone short sells an asset, and the value of the asset goes up, the short seller has just lost money. If this continues, and prices keep going up despite the short seller’s actions, eventually the short sellers will be forced to buy just to cover their bad investments or risk losing everything. This will create what investors call a “short squeeze”. Imagine banks like JPMorgan rushing to buy tons of silver in an attempt to cover all the fake bonds they issued. The market would explode.

Investors in paper bonds will start demanding physical delivery of their silver and gold, especially in the face of a collapsing dollar, and again, banks will not be able to deliver the goods to everyone because they never had them to begin with. Central Bankers are hoping that by the time this occurs, the dollar will be in a shambles and a PM resurgence will be too late to save the day. After all, the reason they were keeping PM values down was so the Dollar would have no competition.

Once the dollar is destroyed, they can introduce Special Drawing Rights (SDR’s), which are semi-based in gold, as the new world reserve currency. The head of the IMF has openly stated that this is their intention:

http://www.reuters.com/article/ousivMolt/idUSTRE5AG0I720091117

However, if some investors take the market into their own hands and demand physical delivery now, they will be able to collect their gold and silver before the wave of crisis hits and before the paper bond market disintegrates, which will happen eventually anyway. The goal here is to be a part of the FIRST group of investors to collect their physical gold and silver, not the last group, which will receive nothing.

Time Is Running Out

The dollar loses substantial ground weekly, gold continues to hit new highs, and silver is on the edge of bursting forward. China and other BRIC nations have made it perfectly clear that they want the dollar replaced as the world reserve currency, and so has the IMF. When this happens, all faith in the dollar will be lost, and countries still holding Treasury Bonds will rush to dump them. Because of America’s historic level of debt, the dumping of T-bonds will result in the insolvency of the Treasury. No amount of printing will save it, because no country will accept U.S. dollars as payment. The dollar will be worthless and hyperinflation will commence. Only those people holding gold and silver will be able to operate financially on any level. They will be the only people able to maintain their wealth, because by their very nature PM’s increase in value as fiat currencies collapse. Only those holding gold and silver (or another country’s currency) will be able to get products made outside the U.S., and only those holding PM’s will be able to maintain an economy independent of the one now in disarray.

Critics have been attacking precious metals markets relentlessly, and yet, they continue to climb. Some financial analysts have openly admitted bewilderment, claiming that the epic rise on gold makes “no sense.” This is because they don’t understand the fundamentals of economics, and they never did. Fiat currencies always collapse. Always. The dollar is no different. Mainstream analysts simply cannot fathom that a dollar collapse is occurring, and this is why their predictions on PM’s and the economy in general are always wrong. The rise of gold makes perfect sense when one realizes and accepts the reality that the dollar is soon to end. It is time to prepare for this event, and precious metals are one of the best methods for doing so.

Mass Media Disinformation On Gold And The Dollar

2010-01-11T06:43:00.001-08:00

http://neithercorp.us/npress/?p=172

By Giordano Bruno
10/18/2009 - Neithercorp Press

The Liberty Movement has been warning of the eventual disaster inherent in the private Federal Reserve’s inflationary policies for years. Men like Ron Paul and Peter Schiff were pleading with media talking-heads about the coming collapse back when the Dow was at its peak, the housing market seemed invincible, and the dollar could do no wrong. They received nothing but ridicule and laughter for their tireless efforts. Of course, things change…..

Now that we have been proven correct in our warnings on the housing bubble, and the derivatives bubble, mass media shills have changed gears and are now denying the threat of the treasuries and dollar bubble. The most important information that we can share with friends and family today is on the progressive collapse of the dollar.

The MSM in the past few months has instituted an organized campaign to reign in public doubts on the safety of the dollar. Here are just two of their main tactics:

Deny The Dollar Is Collapsing

There are many economists and bloggers across the country desperately clinging to the mirage of the dollar. The MSM trumpets their unfounded opinions while real economists with warnings on our currency, based on fundamental financial principles, are often ignored or attacked, though day by day, we continue to gain ground. One of the most interesting and untenable positions against the reality of inflation I have heard so far has been from blogger and owner of SitkaPacific Capital Management, Mike Shedlock:

http://finance.yahoo.com/tech-ticker/article/354921/Exploding-Gold-Prices-Have-Nothing-To-Do-With-Inflation?tickers=gld,gdx,idn,uup,tlt,tbt

Strangely, Shedlock is pro-gold, yet his company invests very heavily in U.S. Treasuries and the Greenback? This appears to be a self-negating paradox of an investment strategy, which is probably why he is now trying to promote the theory that gold’s recent rise to prominence is not because of inflation and a weakening dollar, but simply a by-product of the credit crunch. It is true that banks have not unfrozen, and the lending process is virtually nonexistent despite trillions of dollars in bailout funds created by the private Federal Reserve. Shedlock’s completely unsupported assumption is that all this bailout money is being somehow driven into gold and this is why gold’s value has skyrocketed to new highs. But if this were true, then why is gold only just now reacting to this supposed “bailout bonanza”? Why didn’t gold jump to new highs after the first bailout? Why did it in fact drop in value for a time?

Shedlock’s theory is ridiculous and dangerous. Gold began to jump in value almost exactly when the dollar began to dramatically drop, and when international interest in physical gold increased (especially in China). We at Neithercorp warned Shedlock of his misconceptions almost a year ago when he wrote a vapid hit piece on Peter Schiff and his company, Euro Pacific Capital. Even though Shedlock’s company is in direct competition with Peter Schiff’s, presenting a conflict of interest, his hit piece was snapped up by numerous mainstream web news sources like candy and spread across the blogosphere. We were forced to correct him:

http://neithercorp.us/npress/?p=75

Almost every claim that Shedlock made a year ago is now being proven false, including the idea that China would never decouple from the U.S. or the Greenback:

http://www.telegraph.co.uk/finance/currency/5761033/Chinese-officials-call-for-end-to-dollars-global-dominance.html

http://www.chinadaily.com.cn/china/2009-09/03/content_8648691.htm

http://english.people.com.cn/90001/90780/91421/6734461.html

http://en.rian.ru/russia/20091014/156468599.html

http://neithercorp.us/npress/?p=105

His company has been awash in dollar investments while the Greenback continues to crumble. Why would any intelligent investor who understands monetary policy listen to him now?

In the Yahoo interview above, Shedlock poses the question; if banks are still not lending, where did all the TARP bailout funds go? He claims gold, but the fact is, it was not gold that began a meteoric rise after the bailouts, but the Stock Market! Now up nearly 45% from its lows early this year, the Dow has led a market charge that is completely unsupported in reality, especially given that companies like GE and Bank of America are continuing to post incredible revenue losses:

http://finance.yahoo.com/news/Bank-of-America-GE-results-apf-1024461756.html?x=0&sec=topStories&pos=4&asset=&ccode=

Some banks who received bailout funds have even admitted that they misused them to invest in the market:

http://www.washingtonpost.com/wp-dyn/content/article/2009/07/19/AR2009071901770.html

Shedlock knows that bailout funds have been propping up the Dow, not gold. His claim that the money went into gold is simply a maneuver to cover his own ass after putting his foot squarely in his own mouth a year ago. The theories of Shedlock and those like him are a threat to real economic awareness, because they are used as cannon fodder by the MSM to distract and confuse people away from the threat of a dollar collapse. The dollar is not “dying”, it is already dead! The inflationary activities of the Fed saw to this. We at Neithercorp are not predicting a future event, we are only pointing out what has already happened. The event’s after-affects have merely been delayed:

http://neithercorp.us/npress/?p=167

Claim The Dollar Collapse Is “Good For Us”

Another tactic used by the MSM has been to play a slick psychological game of half-truths coupled with a little smoke and mirrors. Much like a parent trying to get a reluctant child to eat his soggy overcooked spinach, they pretend its “yummy” while suppressing their own gag reflex.

Media talking heads have been testing this strategy in recent weeks, now that the failings in our currency have become widely visible to the average American. The new spin admits that the dollar is faltering, but contends that this is an “opportunity”:

http://www.reuters.com/article/ousivMolt/idUSTRE5985R820091012

http://www.latimes.com/business/la-fi-dollar10-2009oct10,0,4065414.story

http://network.nationalpost.com/np/blogs/francis/archive/2009/10/16/u-s-dollar-drop-managed-devaluation.aspx

A year ago, the same people were foaming at the mouth over the “impervious” U.S. dollar, now they welcome its destruction as a “needed foreign exchange correction”. The argument for a “good dollar collapse” can be divided into two points:

1) A Weaker Dollar Strengthens U.S. Exports

First off, only a MSM pundit could claim with a straight face that the U.S. has any semblance of an export economy. Our financial system is 70% service based, meaning retail and consumption, not industry and production. Our entire manufacturing infrastructure was shipped overseas decades ago. All that’s left is a skeleton of struggling American companies still producing goods on home soil, along with various software businesses and agricultural products. A weak dollar and more narrow trade deficit are not going to save us because we have almost nothing to export. Increased foreign purchases of video games and cheap poultry are a drop in the ocean of our economic troubles.

It would take a dozen years or more for the U.S. to retrieve anywhere near the level of production capacity we had during the 50’s and 60’s, and that is a generous estimate. So what do we do in the meantime? Wallow in financial misery for a couple of decades while our currency tanks, waiting until we can manufacture enough Nikes and paper umbrellas to bring in sufficient revenue?

The export argument is a distraction away from the real issue. It suggests that we “adapt” to the root problem (manipulative monetary policies) and even accept it as “necessary”, instead of trying to actually fix it. It also assumes that if we increase exports other countries will be in a position to consume them.

America does need to bring back its industry, and we do need to become self sufficient again, but that includes a stable currency backed by something more than “hope”. Otherwise, we become the next China, or even worse, and I don’t know anyone outside the MSM or the Globalists that thinks that is a good idea.

2) The End Of The Dollar Is Necessary To “Balance” The World Economy

This is a globalist scripted debate point if I’ve ever heard one. To begin with, why is it necessary to artificially balance the world economy at all? So called Economic Harmonization in the EU has not worked out so well for the regular citizens there, why would it work for the entire world? Essentially, what harmonization does is make every country equal……..equally poor. The idea that a country should not be allowed to surpass any other country in relative wealth is not only an affront to the idea of free markets, but the idea of freedom in general. The harmonization argument is a hook designed to draw unsuspecting people towards socialism and the lie that “free market capitalism failed”.

It was not free market capitalism that led us to this disaster, because we have not had a free market system for decades! Corporate control of markets with their monopolies and limited liability, central banker manipulation of interest rates along with unchecked inflation, were not part of Adam Smith’s original plan when wrote his treatise on capitalism. In fact, Adam Smith frequently spoke out against corporations or “Joint Stock Companies” as they were called in his day.

When governments (or small groups of elites) dominate the ebb and flow of commerce, they then determine the progression of society itself. Some of the most powerful new ideas, for good or ill, are given birth through the processes of commerce. Its systems are like a living breathing entity that adapts and grows according to the needs and dreams of humanity itself, at least, when it is left to grow naturally. But this has not been the case. Commerce has been co-opted by a minority of power brokers and financiers, and turned into a terrible weapon. Indeed, very few people alive today have ever actually seen true free markets in action because of this minority of men.

Another fact that proponents of harmonization rarely mention out loud is the end to American sovereignty that would be required in order for such balance to take place. The economic activities of all countries would have to be synchronized by a central authority, otherwise, balance could never be accomplished. By harmonizing the world economy, the push for global government becomes a common sense and even “rational” proposition. What seemed a spectacular and ridiculous concept to Americans before would then become almost predictable.

Never in history has the inflationary collapse of a currency “helped” any country or people. From ancient Rome, to the Weimar Republic, Russia, Argentina, and Zimbabwe, the results of a currency collapse have always been unimaginable disaster.

In the end, the collapse of the dollar was not fated until the inception of the private Federal Reserve in 1913, and the complete termination of the U.S. gold standard by the Nixon Administration in 1971. Those two events ultimately led us to the catastrophe we face today.

Three years ago the MSM told us that the U.S. economy was unstoppable; they were wrong. Two years ago they claimed the recession would be short lived at best; they were wrong. One year ago they told us the dollar was the safest investment possible and that buying gold was a fool’s gamble; yet again, they were wrong. On almost every conceivable point, the media has been incorrect. Even following statistical probability, they should have guessed correctly on something by now, yet for every claim they make, the opposite appears to happen. Even if I knew nothing of monetary policy or finance, I could easily deduce what will occur in our country next. If the MSM insists the dollar will thrive, along with our economy, by their track record you can be certain that the reverse will be immanently true.

Gold and Guns

2010-01-06T12:18:00.000-08:00

http://www.freemeninstitute.com/doug-french-gold-and-guns.html

Gold and Guns
Mises Daily: Friday, January 01, 2010 by Doug French

In his extraordinary book Democracy: The God that Failed, Hans Hermann Hoppe points out that the process of civilization is stopped when government continually violates property rights.

The natural process of civilization comes through delaying consumption, saving, and building capital. Undoing it leads to higher societal time preference.

When natural disasters strike or a gunman robs you in an alley, "the effect of these on time preference is temporary and unsystematic," Hoppe explains.

Victims are entitled to defend themselves against the individual aggressor and prepare themselves for the calamities of the occasional act of God. Resources will be reallocated to defend one against potential robbers, and provisions will be made for potential natural disasters.

However, when government aggresses, it is considered legitimate and "a victim may not legitimately defend himself against such violations." Democracy legitimizes this government aggression because the violence is sanctioned by a majority of voters.

This decivilization process that Hoppe describes continues in fits and starts. The uneducated continue to live in never-never land, believing that each new ruler means change and that their lives and happiness can safely be put in the hands of a kind and caring government. But government's current ham-handedness — with its bailouts, money printing, and rights violations — has alerted more than a few individuals to do what comes naturally: defend themselves and prepare for the worst.

The government's legal-tender money — the dollar — is now under questioning. While the commercial-banking fractional-reserve monetary engine is stalled with loan write-downs and bank failures, the Federal Reserve has expanded its balance sheet like never before. Man of the Year Ben Bernanke is deathly afraid of deflation, and John Maynard Keynes is a hero again. The inflation cake is in the oven, albeit not quite fully baked.

And the current administration does not seem friendly to the property right of allowing us to protect ourselves. The president believes that only law-enforcement officers should have weapons.

So while high-time-preference folks like Shannan DeCesare shout "Merry Christmas to me" after unloading some gold jewelry for $610 at a gold party, low-time-preference types are lining up in pawnshops and gun shows to buy gold, silver, lead, and guns.

DeCesare attended a gold party that the Wall Street Journal describes as an example of the new Tupperware party. These parties appeal to the cash-for-gold crowd trying to maintain a boom-time lifestyle by unloading their valuables. The cash poor end up taking between 65 and 75 percent of what their gold would be worth to a refiner according to the WSJ.

These parties offer a comfortable atmosphere for selling the yellow metal. "It can be really difficult for a lot of people to walk into a jewelry store or pawnshop holding a little bag of gold," Lisa Rosenthal, owner of Party of Gold, told the WSJ. Ms. Rosenthal's company has specialists working more than 1,000 parties a month. And why would anyone sell their gold for 65 to 75 cents on the dollar? In his book More Than You Know: Finding Financial Wisdom in Unconventional Places, author Michael J. Mauboussin has a chapter titled, "All I Need to Know I Learned at a Tupperware Party." People buy Tupperware because they feel like they must reciprocate the host for hosting the party and providing the free party favors. Plus, as Mauboussin explains, "the single most important fact of the Tupperware formula is the tendency to say yes to people you like."

In the case of gold parties, attendees don't want to just show up, drink the wine and eat the appetizers but leave turning their noses up at the low prices offered for their, or their departed mother's, old jewelry, especially when it's their friend down the block hosting the event. They happily trade a metal that has proven to have value for thousands of years for the government's depreciating paper.

But while gold sellers are shy to see the nearby pawn dealer, gold buyers go where they must to see who has inventory for sale. The demand for guns is so good that the gun show in Las Vegas recently charged $14 a head just to walk in and look around — after parking cost of $3. The lot was full and business was brisk.

The demand for space at gun ranges in Salt Lake City was strong enough the day after Christmas that it was a 15- to 20-minute wait to rent an "alley" at the second range we inquired with. The first range contacted was reservation only and completely booked for the day.

Panic buying of ammunition, silver, and gold has created shortages and led to price increases for all three in 2009. "Currently no .380 ammunition — I haven't seen any for about four months… .38 special, it's been at least a couple of months," Denver gun-store manager Richard Taylor told CNN earlier this year. "It's just that there's been a huge demand and it's far outweighed supply right now."

And in November, Bloomberg reported that the US Mint had suspended sales of most American Eagle coins made from precious metals, including gold and silver. With coin sales surging 88 percent in the first 10 months of this year, the mint is out of metal and sales will resume "once sufficient inventories of gold-bullion blanks can be acquired to meet market demand," the mint said in a statement posted on its website.

So, some Americans are unloading their family treasures and cheering for bailouts, money printing, and gun control, while others are stocking up on precious metals, guns, and ammo to protect themselves and their wealth.

There is no question which group is the civilized one.

Monoatomic White Powder Gold

2010-01-02T07:33:00.000-08:00

White Powder Gold - Activating the LightBody

2010-01-02T07:31:00.000-08:00

http://www.squidoo.com/White-Powder-Gold

White Powder Gold - Activating the LightBody
SuperHealth through Modern Alchemy

David Hudson is most frequently credited for the rediscovery of white powder gold. Laurence Gardner popularized it by writing about it in his books. Many civilizations across the world and throughout history have used white powder gold in many forms and under many names for natural healing and awakening. David Hudson theorized that the elongated nuclei of monoatomic elements allows them to have a high spin state. He also theorized that with paired electrons, they are superconductors. The energy produced by white powder gold can flow through the body with practically no resistance. White powder gold can also move past tension and resistances in the body that are built up from discomfort and imbalance. The elements can promote a continuing flow of positive light that will heal the body, mind, and soul by causing a trinity of balance.

White powder gold produces endless possibilities for experiencing increased light through the body. Your internal gold is your light energy, your fire, or your spirit. The gold in white powder form enhances your strength and growth path by relieving the struggle and helping it to fall away. At the same time, you can become more open and aware, and eventually be able to control this more naturally on your own.

White Powder of Gold -- the food of the gods? Part 1

2010-01-02T07:27:00.000-08:00

For the record, the white powder of gold is called orme and it can do some real cool stuff including levitation!

White Powder of Gold -- the food of the gods?

Date: Wednesday, 27-May-2009 00:46:47

In Part 1 Michael Tellinger discusses scientific anomalies discovered in gold and suggests these hidden properties may have been what the original Annunaki were after when they came to earth and upgraded the local lifeforms so they could have semi-intelligent slaves to mine the metal for them.

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

We have already discussed the issues around our obsession with gold. During my research I found that gold and slavery are the two common denominators that can be traced back to the earliest of human times. It seems that gold is the first and main obsession of not only humans, but all the ancient gods from all the religions all the way back to Genesis 2 and even further back in the Sumerian tablets. New discoveries are beginning to show some truly mysterious and even miraculous properties of gold. Are we finally revealing the real reasons why the GODS of antiquity were so obsessed by this metal?

Enjoy

Michael.

***********************

White Powder of GOLD

The food of the gods – manna from heaven!

In 1994 at the Global Sciences Congress hosted by Dean Stonier in Virginia Beach, David Hudson presented his new findings to an astonished audience. By this time he had spent 17 years researching the strange properties of gold and other Platinum Group Metals or PMGs. Hunter was a successful farmer who saw an opportunity in recovering gold from old mining sites where the sandy leftovers from the refining process were dumped. His idea was simple, to accumulate gold and silver without having to pay taxes and because he had all the farming equipment he began recovering gold using the Heap Leach Cyanide method. The crushed ore is laid out and irrigated with a dilute cyanide solution. The solution percolates through the ore and leaches out the precious metal. This can take several weeks.

The solution containing the precious metals is called the pregnant solution. It continues percolating through the crushed ore until it reaches an impermeable liner at the bottom of the heap where it drains into a storage tank. The precious metals are then separated from the pregnant solution and the dilute cyanide solution now called 'barren solution' is normally re-used in the heap-leach-process or occasionally sent to an industrial water facility where the residual cyanide is treated and residual metals are removed. The water is then discharged back into the environment where it poses possible and obvious ecological threats. But this is all really aside from the remarkable discovery made by Hudson.

During his recovery of gold and silver in this way and then assessing it with a standard fire assay process he found he was recovering something else which was causing losses in the recovered gold and silver. After consulting more knowledgeable experts he realized that nobody knew what this problem material was. It had a specific gravity and it would recover in molten lead just as if it was gold or silver. But when he tried to couple it with the lead, there was nothing.

This is where the mystery deepened when he discovered that people involved in mining and metallurgical work are familiar with this mystery substance. They often call it 'ghost gold'. It is a non-tradable and non-identifiable form of gold.

Hudson was introduced to the Soviet Academy of Sciences that had a very advanced emission spectroscopy program. This process involves taking two carbon electrodes and placing your sample on one of them while running a current between them through your sample.

As the current forms an electric arc between the two electrodes it also burns the sample matter in its path. The elements in the sample will ionize and give off specific light frequencies. This is the basis of spectroscopic analysis or DC Arc Emission Spectroscopy. This process is normally triggered for about 10 to 15 seconds before the carbon electrodes burn away. The interesting thing is that American spectroscopy analysts will tell you that everything that is there will be ionized and will be identified in the emission spectroscopy report.

In one such experiment the material Hudson was testing showed up to be iron, silica and aluminum. It took them three years of trying to actually get rid of those elements but this could not really be achieved. Because once the known elements were burnt away they still had 98% of the material left behind. This material on the DC arc did not indicate to be anything. They took the material back to Cornell University where Hudson worked with others trying to analyze this mystery substance.

They used X-ray analysis with 8 different X-ray heads, tunneling microscopy, diffraction, fluorescent microscopy, all this great technology confirmed the presence of iron, silica and aluminum. So they worked on removing those elements from the sample. When they no longer showed up on the spectroscopic analysis, it was pronounced that there was nothing left, and yet there was still material present.

So they opted to follow the advice of the Soviet Academy of Sciences who suggested that proper spectroscopic analysis requires a 300-second burn instead of the 15 seconds used in the USA. Within the first 15 seconds they got the standard readings of iron, silica and aluminum and sometimes traces of calcium. After that, nothing else was read until 90 seconds into the burn, where palladium began to read; at 110 seconds platinum began to read; at 130 seconds ruthenium began to read; at 140-150 seconds rhodium began to read; at 190 iridium began to read and at 220 seconds osmium was read. The Russians called this fractional vaporization.

The boiling point of these elements is about 5200 to 5300 degrees centigrade while the maximum temperature of a DC arc is theoretically about 5450 to 5500 centigrade, measured at the center of the arc. So if the material sits on the side of the electrode it can't get to the maximum temperature of the arc so quickly.

But during the longer burns the elements burnt off in the sequence of their boiling temperatures; palladium, platinum, ruthenium, rhodium, etc. To put this in perspective for the layman, we must realize that the boiling temperature of iron is to these elements like the boiling temperature of water is to iron. You can't get iron hotter than the boiling temperature of water until all the water is gone. The same applies to the carbon arc and the burning away of the iron, silica and aluminum. It's not until all of that is gone that you can reach the temperatures of the denser elements.

They experimented for two years to conclude that about 85% of the reading occurs way out there towards the end of the long burn. In other words, short burn times are incorrect when determining purity standards and so the people buying these precious metal standards are only getting about 15% to 20% of the sample assuming it is everything.

The best deposits in the world are still found in South Africa where they are mining 1/3 of an ounce per ton. Based on their research Hudson believes that they should get about 2400 oz per ton of these precious elements if it is recovered properly. He worked with a chemist in Arizona for over 3 years replicating the procedures that the Soviet academy recommended. They successfully separated 6-8 oz. per ton of palladium, 12-13 oz. per ton of platinum, 150 oz. per ton of osmium, 200 oz. per ton of ruthenium, 600 oz. per ton of iridium, 1200 oz. per ton of rhodium, the same values as found in spectroscopic analysis.

Hudson proved his point by producing three different samples of rhodium in different states and sending it for analysis to the leading US laboratory. All three came back analyzed [as being] different materials; iron, aluminum and calcium, and even calcium and silicon. The point being there was no consistency in the analysis of the three materials, even though they were all the same element, 99.9% pure rhodium. So once again Hudson asserts that the commercial standards used by the world are not technically correct.

And now we get into the more interesting properties of these precious metals. Monoatomic gold as a chloride has a forest green color while commercial gold chloride is gold or a light green depending on how much you dilute it. Why does nobody offer monoatomic gold commercially in batteries or wet cell appliances? When you put the green gold chloride solution in the wet cell it works about 20 times better. This is the true elemental chemistry of the precious elements and it applies to all of these elements, osmium, ruthenium, rhodium, iridium, palladium, platinum and gold.

Gold prefers to stay in a diatomic state and the diatonic bonds of gold are so strong it will never go to the monoatom without real encouragement and it never loses its metallic character. But if you know how to take those metallic bonds apart and create monoatomic gold, which is what mother nature did by literally dissolving it to a single atom when it comes up out of the earth, about 98% of the gold comes up as monoatomic gold and about 2% comes up as metal. The world has developed its method to recover yellow gold. But when it is dissolved to the monoatomic state it never comes back as yellow gold; it is not metallic and it has no metallic character. Hudson and his associate went further. They submitted the material to thermo-gravimetric analysis in Palo Alto.

Monoatomic gold is kind of gray-black, [similar to] hydrogen oxide. But under an inert gas you can heat it and the proton is stripped away. When it does this it converts to a snow-white powder and suddenly loses 45% of its weight.

How can it lose 4/9ths of its weight and yet if you take it back to metal, it regains its weight?

As they repeated this experiment this white material would literally levitate weighing less than the pan it was sitting in. When they cooled it it would sometimes go to 200% or 300% the weight. Then heat it again and it goes to less than nothing; cool it and it weighs 300% more than what you started with.

This only happens in this white powder form using this thermo-gravimetric analyzer. You take 100% of gold and make the hydrogen oride pellet and it weighs 103%, but you anneal it and it goes to 5/9ths or about 62-63% of the beginning weight, and yet, the mass has never changed or left the matter. This led Hudson and his team to investigate the properties of superconductivity. They called this the 'White powder of gold' and the incredible properties will be discussed in a few days, in part 2 of this article.

Thanks for your interest, hope it makes you realize that we are only now beginning to come to terms with the true reasons behind the ancient gods obsession with gold. There is a lot more to come.

Best regards,
Michael Tellinger
http://www.slavespecies.com/

GATA sues Fed to disclose gold market intervention records

2010-01-02T07:25:00.000-08:00

http://www.gata.org/node/8192

GATA sues Fed to disclose gold market intervention records
December 30, 2009

Dear Friend of GATA and Gold:

GATA today brought suit against the U.S. Federal Reserve Board, seeking a court order for disclosure of the central bank's records of its surreptitious market intervention to suppress the monetary metal's price.

The suit was filed in U.S. District Court for the District of Columbia and targets Fed records involving gold swaps, exchanges of gold with foreign financial institutions. In a letter dated September 17 this year to GATA's law firm, William J. Olson P.C. of Vienna, Virginia, (http://www.lawandfreedom.com) Fed Board of Governors member Kevin M. Warsh acknowledged that the Fed has gold swap agreements with foreign banks but insisted that such documents remain secret:

http://www.gata.org/files/GATAFedResponse-09-17-2009.pdf

The lawsuit follows two years of GATA's efforts to obtain from the Federal Reserve and the U.S. Treasury Department a candid accounting of the U.S. government's involvement in the gold market. These efforts parallel those of U.S. Rep. Ron Paul, R-Texas, who long has been proposing legislation to audit the Fed. The Fed has wrapped in secrecy much of its massive intervention in the markets over the last year, and Paul's legislation recently was approved by the U.S. House of Representatives.

The Fed claims that its gold swap records involve "trade secrets" exempt from disclosure under the U.S. Freedom of Information Act.

While GATA has produced many U.S. government records showing both open and surreptitious intervention in the gold market in recent decades (see http://www.gata.org/node/8052), Fed Governor Warsh's letter is confirmation that the government is surreptitiously operating in the gold market in the present as well. That intervention constitutes a huge deception of financial markets as well as expropriation of precious metals miners and investors particularly. This deception and expropriation are what GATA was established in 1999 to expose and oppose.

Of course GATA's lawsuit against the Fed will take months if not years to resolve. We think we have a good chance of winning it in court. But we can win it outside court, and much sooner, if the suit can gain enough publicity from the financial news media and market analysts and prompt enough inquiry from them and from the public, the mining industry, and members of Congress.

So GATA urges its friends to publicize the suit and to urge journalists, market analysts, mining companies, and members of Congress to join us in seeking disclosure of the Fed's gold market intervention records. If enough clamor is directed at the Fed about these records, the gold price suppression scheme will lose its surreptitiousness and fail.

Unfortunately the World Gold Council, which each year collects tens of millions of dollars in membership fees from mining companies in the name of representing them and gold investors, refuses to question governments about their surreptitious interventions in the gold market. These interventions powerfully influence not only gold's price but the prices of government bonds and currencies, as well as interest rates generally and the value of all capital and labor in the world. There is no more important issue in the world economy than gold price suppression.

So what should have been the World Gold Council's work has fallen to GATA, a non-profit educational and civil rights organization that operates from month to month on donations from people who share its objective -- free and transparent markets in the precious metals and fair dealing among nations generally. As we prosecute our lawsuit against the Fed, we'll be grateful for your support. We promise to do something with it.

For information about supporting GATA, please visit:

http://www.gata.org/node/16

GATA's lawsuit against the Fed is listed in federal court records as civil case No. 09-2436 ESH, the letters being the initials of the district court judge assigned to it, Ellen S. Huvelle.

You can find the lawsuit here:

http://www.gata.org/files/GATALawsuitVs.Fed-12-30-2009.pdf

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

Vietnam orders gold-trading floors shut by end-March

2010-01-02T06:41:00.000-08:00

http://www.expatica.com/nl/news/dutch-rss-news/vietnam-orders-gold-trading-floors-shut-by-end-march_15660.html

02/01/2010

Vietnam, where many people see gold as a safe haven against economic uncertainty, has ordered public gold-trading floors shut by March 31 because they rest on a "fragile foundation".The order affects about 20 gold-trading houses operated by banks and other firms, which have been running for more than two years, the state-run Vietnam News reported.Retailing of gold jewellery will still be allowed, it said.

Gold giant faces Honduras inquiry into alleged heavy metal pollution

2010-01-02T06:31:00.000-08:00

http://www.guardian.co.uk/environment/2009/dec/31/goldcorp-honduras-pollution-allegations

Gold giant faces Honduras inquiry into alleged heavy metal pollution
Villagers and NGOs have accused Goldcorp of poisoning people and livestock by contaminating the Siria valley
Rory Carroll in Palo Ralo
31 December 2009

A family carries laundry to a stream that has allegedly been contaminated by the San Martin mine owned by Goldcorp in the Valle de Siria, Honduras. Photograph: James Rodriguez/MiMundo.org

Authorities in Honduras are investigating claims that one of the world's biggest gold mining corporations has contaminated a valley with toxic heavy metals. Villagers and non-governmental organisations have accused Goldcorp of killing livestock and making people sick by polluting land and rivers in the Siria valley.

The environmental prosecutor is undertaking an investigation after being presented with evidence that the Canadian corporation's San Martin opencast mine discharged highly acidic and metal-rich water in 2008. The company has denied wrongdoing.

The inquiry comes at a critical time when record gold prices are encouraging other mining corporations to explore fresh sites in Honduras. Environmentalists fear the impoverished central American country will lift a moratorium on new mining after a new government takes office in January.

Goldcorp is shutting the decade-old San Martin mine after extracting nearly 12,000 tonnes of ore from its forested slopes. The dynamite explosions have stopped and there are no more ore-laden trucks rattling down rutted, dusty roads.

People in villages bordering the site say the damage is done and the fields and streams are poisoned. "The water tastes like acid, like something out of a car battery," said Roger Abraham, vice-president of the Siria Valley Environmental Committee, an activist group. "It would have been better if the mine never came. It has done more harm than good."

He said the damage to the valley would galvanise campaigns against other mines. "We will use peaceful, social actions to block access. We can't allow this to be repeated."

The community's complaints have been backed by two studies, commissioned by the UK-based advocacy group Cafod. The studies detected high acidity which could be linked to cyanide "heap-leaching" methods to extract gold from low-grade deposits. They describe how the process soaks piles of crushed gold ore in a cyanide solution which filters down, leaching out the precious metal from the rock but also releasing other toxic heavy metals such as arsenic, mercury and lead. Without careful management it can contaminate streams and groundwater.

The first study, by Paul Younger, a Newcastle university hydro-geochemical engineering professor and expert on mine water management, detected acidic mine drainage, whereby sulphides in the rock are exposed to oxygen and water and produce sulphuric acid. Younger said this can have devastating effects on animals and plants.

A follow-up study by Adam Jarvis and Jaime Amezaga, also of Newcastle University, found evidence of "severe" contamination in the form of highly acidic and metal-rich water from the mine site flowing into a stream used by villagers for agriculture and domestic purposes. The data was in a previously undisclosed 2008 report by Defomin, Honduras's mining regulatory authority.

"This new information provides concrete evidence that the San Martin mine has caused pollution in Honduras," said Sonya Maldar of Cafod. "Goldcorp must clean up its act so that the people of Siria Valley are not left with a toxic legacy."

The enviromental prosecutor is reviewing the information and is expected to decide soon whether to prosecute. Goldcorp did not respond to interview requests for this article. But in previous public statements, the company denied wrongdoing and said its mining operation and clean-up met the highest international environmental standards and had been vetted by authorities. The company said Defomin reported in September 2008 that water flowing from Palo Alto pit had been treated to international standards.

"The presence of the mine has had no impact on the quantity or quality of the water in the areas of the San Martin mine," Goldcorp said in May last year. In a televised debate in November two senior managers said there was no problem with the discharge of acidic waters. Honduran authorities, the company said, took water samples during three visits in 2008 and all pH measurements were normal. They also reviewed and approved the mine closure plan.

A skeleton crew is now cleaning up the area. "As the site becomes rehabilitated, Goldcorp will cede the land to the San Martin Foundation for commercial agricultural projects," said the company's website.

The mine is visible from miles away: an orange-coloured gash from which vegetation and clay have been stripped from the hillside, an incongruous sight in a landscape of meadows and sun-crinkled villagers on horse-back.

A Nevada-based company, Glamis Gold, started mining in 2000 after relocating the village of Palo Ralo. Entre Mares, a Honduran subsidiary owned by Goldcorp, took over the concession in 2005.

Initally the project had local support. As a rural backwater in the western hemisphere's third poorest country the prospect of good jobs and new houses was welcome, said Rudolfo Arteaga, a Palo Ralo farmer and community activist. Brick homes were an improvement on adobe and 400 people got temporary work – but the price was too high, he said.

Of 18 riverbeds, 15 were now parched, the alleged result of the mine using up to 220 gallons a minute during operations, according to Cafod. Crops had withered and, while drought currently afflicts much of central America, Siria's troubles, said Arteaga, arrived with the mine.

Water was not only scarce, it was contaminated, he said. Cattle had died – this year 24 carcasses were found on grazing land near the mine – and people suffered respiratory, skin and gastro-intestinal diseases.

Woods had been felled, leaving the area vulnerable to mudslides during tropical storms. Goldcorp had planted thousands of trees but often used alien species such as eucalyptus, Arteaga said, which sucked up more water.

Concern about environmental damage in Honduras prompted a moratorium on new mining in 2004 but the ban may not survive a political crisis which has left Honduras broke, starved of investment and short of economic options.

Campaigners fear Honduras's new government, which is due to be sworn in on 27 January, will bow to pressure from the national assembly and mining corporations to permit new explorations.

"In this climate it's difficult to be optimistic," said Pedro Landa, executive director of campaign group Caritas in Tegucigalpa. "There is a lot of pressure for mining to resume."

guardian.co.uk © Guardian News and Media Limited 2010

Where HAS All the Gold Gone?

2009-12-26T18:53:00.000-08:00

This guy has an idea. He says it's going off the planet.

UN to produce bullion coins as world currency

2009-12-26T05:00:00.000-08:00

http://dprogram.net/2009/12/24/un-to-produce-bullion-coins-as-world-currency/

UN to produce bullion coins as world currency
Posted by sakerfa on December 24, 2009
The announcement by the United Nations this week that it will license the minting of silver and gold bullion coins bearing the UN logo may be the button that launches metal prices into orbit.

In its wide-ranging report this fall, the UN Conference on Trade and Development (UNCTAD) stated that the system of currencies and international banking practices within today’s economies were inadequate, and responsible for the present economic crisis. The report advocates that the present monetary system, wherein the dollar acts as the global reserve currency be re-examined “with urgency”.

The UNCTAD Report was the first time a major multinational institution had forwarded such a suggestion or measure, although a number of countries, including Russia and Brazil have supported replacing the dollar as the world’s reserve currency. China’s central bank chief Zhou Xiaochuan has mentioned that the dollar could become a basket of currencies instead.

The UN commission dismissed such a widening, saying a multiple-country system “may be equally unstable, and not transparent.”

The panel is seeking more monetary balance for developing countries, and a means for them to retain their reserves and domestic savings independent of foreign agencies and arrangements.

Panel Chair US economist Joseph Stiglitz, a Nobel economics laureate, has made plain that there was “a growing consensus that there are problems with the dollar reserve system. Developing countries are lending the United States trillions dollars at almost zero interest rates when they have huge needs themselves,” Stiglitz stated.

“It’s indicative of the nature of the problem. It’s a net transfer, in a sense, to the United States, a form of foreign aid.”

A report contributor, Detlef Koffe, concluded that “Replacing the dollar with a bullion currency would solve some of the problems related to the potential of countries running large deficits and would help stability,”

US Fed spokesperson Patrick Paulsen acknowledged that there could be some strong reaction in the US to the global currency, and that it would “…be viewed as a step toward a New World Order. But those same people have probably lost patience with the money-changers as well.”

He clarified that he would “…nonetheless anticipate that the western currencies will continue to depreciate, given Asia’s ascendancy in trade and manufacturing, to find their own value and enable their economies to compete. This is a UN perogrative we cannot and should not control, it’s returning to what we had with Bretton-Woods.”

The UN decided to provide a “public option” savings currency, whereby currency mints will be licensed to mint two kinds of bullion coins the size of the 1€ coin – the Uno (silver ~$5) and the Oro (gold, ~$500). The names were adopted from the book “The Humanist”, which foresees the UN being better funded by 2015 via its licensing fees, expected to be 10-15%.

The coins have a marker chemical in them that enables their authentication and processing by modified retail ATM and exchange machines in Europe, which will be distributed globally. Any licensee, public or private, can produce such bullion coinage under contract. The United Nations is doing no more than what most countries do already, except that the value of its coins will reflect their bullion weight.

Armand Dufour of the European Bank welcomes their introduction. “People have enough Fiat currency options, government and banks cannot intrude on bullion coins – they will have their own inviolable value.”

He does have one concern, however. “If we see a dismounting from the US dollar, as is inevitable in the main view, there will be a strong move to the Oro, which may drive its price up to the point where governments will not allow its circulation; they will try to isolate it.”

“That’s when the fun begins.” he said.

Gold coins to bear the UN logo

2009-12-19T18:56:00.000-08:00

http://www.gold.org/news/2009/12/16/story/13674/gold_coins_to_bear_the_un_logo/

Gold coins to bear the UN logo
The news feeds on this site are independently provided by Adfero Limited © and do not represent the views or opinions of the World Gold Council.
Wednesday, 16th December 2009 (893 views)

The United Nations (UN) has licensed the minting of gold bullion coins bearing its logo to provide a "public option" world savings currency.

According to the Vancouver Examiner, Oro gold coins are hoped to contribute to making the UN better funded by 2015, with revenue rising by ten to 15 per cent.

The coins are set to be produced in Europe and then distributed globally, with any licensee able to produce such bullion under contract.

Armand Dufour of the European Bank says that he welcomes the introduction of the gold coins.

However, he goes on to add that there is a danger that if the US dollar weakens, there will be a strong move towards the Oro.

In turn this could potentially drive the value of the coin up to a level where international governments will not allow it to be circulated.

UN coins were previously made purely for commemoration in the 1970s, but they hold no monetary value.

Bernanke's golden heirloom

2009-12-14T17:12:00.000-08:00

http://www.atimes.com/atimes/Global_Economy/KL11Dj03.html

Dec 11, 2009
Bernanke's golden heirloom
By Hossein Askari and Noureddine Krichene

On December 1, gold breached the US$1,200 per ounce mark and, despite slight declines since then, it still looks that the sky is the limit for the precious metal's price. This shouldn't be a surprise. It was predicted a year ago, a sure outcome of US Federal Reserve chairman Ben Bernanke's zero interest rate policy and a US dollar printing press running on overtime.

This is the market's response, pointing to a failure of Fed's policies and a brewing of other bubbles in commodities and asset prices. It is also a blow to the Group of 20 countries' approach to restoring economic stability and growth.

While ignoring the link between Fed policies and gold, oil, and dollar exchange rates, Bernanke has been announcing deflation and the absence of inflationary expectations. But gold, and along with it stocks, and commodity prices tell another story - inflation and inflationary expectations.

Besides destabilizing the banking system in 2007 and inflicting trillions of dollars in bailouts on taxpayers, Fed policies have pushed the unemployment rate to over 10% from 4%. Through bailouts and money creation out of thin air, Bernanke may have rescued banks, bankers and money market funds at the expense of the rest of the economy and foreign creditors.

With the gold prices on an explosive path, the market's indications are for inflation and even higher unemployment. The US and world economy could be entering a replay of the pre-crisis events: a cheap-money policy, near zero-interest rates, a falling dollar, asset and commodity bubbles, another banking collapse, and trillions of dollars in bailouts.

The price of gold was at $35 per ounce in 1971, indicating a 34-fold depreciation of the dollar-gold exchange rate since that time. Gold prices stood at $801 per ounce in January 2009 and so far in 2009 the dollar has depreciated by 50% in relation to gold. As major reserve central banks have been inflating at breakneck speed since August 2007, their currencies have lost value, and, as expected, gold has appreciated.

The US policy of inflating the economy out of the crisis has essentially culminated in a tipping point and has triggered the gold alarm bells, spooking the holders of dollars and dollar-denominated assets. The pending reappointment of Bernanke is insurance for another four-year of monetary expansion.

The deficits under President Barack Obama's administration, at 13% of gross domestic product, are only going to get bigger. There will be another three to four years of fiscal profligacy and mounting US debt. Holders of dollars and dollar-denominated assets will keep seeking refuge in gold, other commodities, stocks, and other-inflation proof assets. Although gold does not yield any interest, it nevertheless constitutes a hedge against the inflationary policies of major central banks.

The record price for gold is nothing else but a reflection of the Fed's exploding balance sheet, at rates never seen in the US monetary history.

Since August 2007, the Fed has pumped US$1.3 trillion in liquidity at near zero interest rates through unorthodox facilities traditionally shunned by central banks. To circumvent banks that were saddled with toxic assets and would no longer extend loans with almost certain default risk and at very low interest rates, the Fed decided to go around the banks and cater directly to the same subprime sectors.

These are the same subprime sectors that fell into default before and triggered massive bank losses and government bailouts, namely mortgages and consumer loans. This risky Fed policy, endangering the Fed's balance sheet, did not add $1.3 trillion to US GDP in goods, such as corn, oil, sugar, and soybeans. The US GDP has in fact declined in real terms.

Instead, this has been a policy of wealth redistribution through an inflationary tax that operates through the exchange rate and price channels, by confiscating wealth from workers, foreign and domestic creditors, and awarding it to borrowers. This form of purchasing power redistribution can dry up real savings and investment and can have unintended consequences for growth and unemployment.

Seeking refuge in gold is a rational decision for those who hold dollars and dollar assets. Standing at $2.2 trillion in November 2009, up from $0.8 trillion in February 2006, Fed credit can only move up at record pace over the next four years under the influence of near zero interest rates, monetization of fiscal deficits, and direct lending to sub-prime markets and speculators. Financial markets may be wondering what will be the level of Fed credit at end of 2012. Based on observed data and on the unorthodox money and fiscal policy setting, a forecaster would most likely settle for a range of many trillions of dollars.

In gold, hedgers find protection against a cheapening dollar. Gold is also sought by speculators. This is a most attractive speculative environment, namely near zero interest rates and unlimited liquidity. Gold was $741 per ounce in December 2008. By December 1, 2009, it had appreciated by 62%. Such gains are fantastic in comparison to an annual yield of 0.67% for two-year US treasury notes. In view of large likely gains, negligible cost of money, and abundance of liquidity, speculation can only gain strength and boosting gold prices.

Gold price increases have invariably been accompanied by increases in the price of oil, food, and other commodities. The data on commodity prices for the 1970s and for the commodity price bubble during 2002-2008 shows that gold prices and other commodity prices rose at similar pace. For instance, when gold prices raced up to $1,000 per ounce in 2008, oil prices skyrocketed to $147 per barrel, and food prices climbed at a similar pace.

While the statistical association between gold, oil, and other commodity prices is very strong, the explanation is that oil and other commodity producers have been keen about the purchasing power of their commodity in terms of gold. Their response was to raise prices, restrain supplies, and convert their dollar holdings into gold and stable currencies. If the past is any indication of the future, severe commodity price inflation can be expected, with disruptive effects on growth and employment.

What is the relation between gold price inflation and world economic growth and unemployment? Based on the stagflation of the 1970s as well as the 2007-2008 gold price bubble, rapid increases in gold prices have been accompanied by economic stagnation and mass unemployment in the industrial world. If such association remains valid, the recently explosive gold prices could point to economic stagnation and rising unemployment. The explanation is that gold price inflation is a symptom of market instability, an uncertain future and unstable macroeconomic policies, an environment that is hardly conducive to investment and economic growth.

The Obama administration has failed to restore economic and financial order. A gold price explosion will make the foreign financing of the mountainous fiscal deficit of the US ever more difficult. Unpleasant arithmetic could lead to an outright monetization of the projected deficits and therefore an escalation of the run against the dollar and accelerating gold and commodity price inflation.

Furthermore, the fast depreciation of the US dollar will undercut the export competitiveness of other industrial countries, which might in turn re-inflate their economies, impose tariffs and other trade barriers. Hence, increased trade tensions and impediments to world trade could be expected following an explosion of gold prices.

Since his appointment as chairman of the Fed, it would appear that Bernanke has been plagued by the era of the Weimar Republic, haunted by the Great Depression and its deflation. He has, therefore, pushed interest rates to the lowest levels on US record and unleashed credit.

His theory is simple: cheap money will boost aggregate demand and lead to full employment. Even though it is this same policy that caused the collapse of huge financial institutions, institutions established decades ago, and resulted in trillions of dollars in bailouts, Bernanke still maintains that near-zero interest rates and unlimited liquidity will boost aggregate demand and re-establish full employment.

His theory implies that producers maximize quantities, not profits, and face no resource constraints. It implies, as during 2002-2007, that banks extend credit to subprime markets regardless of risk and profits. US banks have learned the hard lesson and are no longer ready to lend freely.

As of November 2009, they hold over $1.1 trillion in reserves as compared with $6 billion in 2007. Remarkably, near zero interest rates crippled Japan for nearly one decade; its growth was pulled up in 2002 only by exports and became negative in 2008 with the fall in exports. Near-zero interest rates did not at least maintain US unemployment at its 2007 level of 4%, but they pushed it 10.2% and to 17.5% if more encompassing measure is examined.

Are runaway gold prices inevitable? From the little available experience, gold price inflation stopped when the federal funds rate rose to 20% in 1981 and when the whole financial system collapsed and financial chaos spread in 2008. The explanation to the first episode is clear. Very high interest rates deter speculation, unproductive loans, and ensure that savings is channeled to high growth sectors. The explanation of the second episode is that bank failure and de-leveraging caused rapid liquidation of speculative positions and, therefore, a fast drop in gold and commodity prices.

The Fed's loose monetary policy since 2001 has inflicted tremendous losses, required massive bailouts and resulted in mass employment. As clearly reiterated by chairman Bernanke and his supporters, exit from unorthodox monetary policies will not be considered until the US economy has attained strong recovery.

The Fed can stay the course until a strong recovery takes hold but, in the meantime, the demise of the dollar will accelerate and gold will become ever more attractive.

Ron Paul Calls for Competition in Money, Including Precious Metals

2009-12-13T12:45:00.000-08:00

http://www.thenewamerican.com/index.php/economy/sectors-mainmenu-46/2534-ron-paul-calls-for-competition-in-money

Ron Paul Calls for Competition in Money
WRITTEN BY JOHN F. MCMANUS
FRIDAY, 11 DECEMBER 2009 17:00

Many years ago, John D. Rockefeller, Sr. famously stated, “Competition is a sin.” He preferred a monopoly, the very antithesis of economic freedom, in order to increase profits.

A monopoly accomplishes for its creator the opportunity to gouge the public, a consequence generally well-known, and generally despised. There is, however, one commodity existing as a monopoly that the public does not loathe, the creation of money. This monopoly seems to most Americans to be the only way to proceed. They are unaware that our nation once had competing currencies and this competition led to honesty in the field of money.

Several Spanish coins made of precious metal were circulating during colonial days, even after the Declaration of Independence. In 1792, the U.S. Mint began its constitutionally authorized operations and the people brought their gold and silver to be stamped into coinage of a fixed size, weight, and purity. Also, there were private mints issuing precious metal coinage; the government did not have a monopoly in the field of coining money. As a result, the nation thrived, as one always will when there is sound money. But, today, the only legal money is fiat money issued by the Federal Reserve that is deemed money by law. Its value continues to decrease because there is virtually no limit on how much of it can be issued. If our country were on a gold or silver standard, inflating the supply of those precious metals would be impossible.

Congressman Ron Paul has become well-known and equally well-admired for his advocacy of sound money and his opposition to the Federal Reserve. In addition to his bill calling for auditing the Fed, he has now introduced the “Free Competition in Currency Act of 2009.” He notes that, to be useful and honest, currency has to be durable, portable, divisible, uniform, stable, reproducible, and scarce. And he notes that mankind’s history demonstrates that gold and silver, not paper bills, have been the choices arrived at for money throughout the millennia.

The congressman’s new measure calls for three steps. The first is to repeal legal tender laws that give paper bills issued by the Fed the monopoly always sought by thieves and tyrants. The only legal tender in our nation today is the paper currency issued by the Fed. But Congress has constitutional power to coin money, not to monopolize paper.

The second step in this new bill would eliminate laws that prohibit private mints from creating coinage to be use as currency. If numerous mints were producing gold and silver coins and bars, the public would cease relying on the increasingly less valuable paper issued by the Fed. Would some mints possibly defraud customers by adding base metal to supposedly pure gold or silver? That’s a possibility and the recourse would be to take the mint owner to court and sue for fraud. What exists today is a Federal Reserve that defrauds everyone.

In his final step, he calls for eliminating capital gains and sales taxes on gold and silver coins. The congressman provides a clear explanation of the absurdity and injustice of taxing the purchase of gold and silver coins by noting how stupid and unjust it would be if a sales tax were charged every time a person exchanged a ten dollar bill for a roll of quarters.

The Texas legislator also makes the realistic assertion that a return to competition in money would see an end to inflation, even an end to unconstitutional wars financed by the Fed’s paper bills. Deficit spending for numerous other unconstitutional programs would also be phased out.

Let us ardently hope that this very sensible and very much needed measure receives the kind of support that 317 members of the House of Representatives have given by co-sponsoring H.R. 1207, the bill calling for the General Accounting office to audit the Federal Reserve. America needs competition in money as in the production and use of any commodity. Competition is a sin only in the eyes of monopolists or would-be monopolists who want to control the market.

Gold will Reach Mind-boggling Levels - for Good Reason!

2009-12-13T10:40:00.000-08:00

http://www.kitco.com/ind/Wilson/nov262009.html

Gold will Reach Mind-boggling Levels - for Good Reason!
By Lorimer Wilson
Nov 26 2009 10:56AM
www.preciousmetalswarrants.com

We are staring at a nascent but potentially and probably startling increase in the price of gold and precious metals mining stocks and warrants. Gold will reach mind- boggling levels because the actions of our political leaders and their academic and credentialed enablers are virtually guaranteeing it with their current actions.

Currency Traders Strengthening Price of Gold

The US dollar has and continues to be pummelled by currency traders because they see the US Treasury and FED working overtime to deliberately devalue the dollar in response to politicians who think that spending money the country doesn’t have on programs it doesn’t need is the answer to the continuing economic malaise. Setting interest rates at near zero percent obviously exacerbates the dollar problem.

Carry Trade Supporting Price of Gold

The dollar has now replaced the Japanese Yen as the favoured currency of the carry trade. Borrowing US dollars at nominal interest rates is the hedge fund manager’s most obvious go-to strategy. Currency traders will be most reluctant to allow a sudden rise in the US dollar to cut the legs from beneath the carry trade of which they are participants. Consequently, there is little reason to think a rise in the US dollar will interfere with the consistent and persistent rise in the price of gold.

Supply and Demand Ratio Increasing Price of Gold

Couple these currency issues with the limited supply of above-ground gold and the fact that mine production has been reducing year over year and the inevitable consequence is demand exceeding supply resulting in gold being bid to ever higher prices.

Loss of Safe-Haven Status for U.S. Dollar Supporting Price of Gold

Perhaps the most significant new factor in the gold price equation is that the US dollar is no longer perceived as the automatic safe haven harbour for concerned investors around the globe. While this statement cannot be made definitively, the fact is we are already a long distance from the fall of 2008 when global investors reflexively flocked to the US dollar as a safe haven in the face of the global financial turmoil.

Increased U.S. Budget Debts Strengthening Price of Gold

Needless to say, scepticism about the merits of the dollar mounts monthly. The actions of the US administration and Congress place it on an unprecedented spending binge organized by the Treasury and FED which dishes out vast quantities of new digital dollars designed to mop up the flood of new and maturing debt.

This revolting process is causing foreign central banks to rapidly lose their appetite for US Treasury bonds. The expanded FED balance sheet coupled with monetizing debt inherent in quantitative easing is the boogeyman of international finance.

Increased Investment Demand Maintaining Price of Gold

That leaves us with gold, the only safe haven refuge of undisputed value. It is real money, and everyone knows it instinctively. That is why many foreign central banks are quietly and actively accumulating it. Investment buying, especially by the big money players as represented by central banks, sovereign wealth funds and leveraged hedge funds inevitably spring into the purchase mode whenever price weakens, even modestly. They provide a floor price for the metal on its inexorable trek northward.

This means you and I can invest with confidence knowing that major pullbacks almost certainly will not happen. Moreover, if and when they occur, it will be purely a very temporary, brief and shallow phenomenon.

How high will precious metals equities and the gold price go?

My sense is that it will be in orders of magnitude far greater than most analysts allow themselves to state or believe. We frequently see price projections of 20 or 50 percent higher than today.

Some even allow themselves to suggest that gold will double in price before it has reached its cycle high. We may even see a rare analyst allow himself to speculate that gold prices may find and end at the $3,000 an ounce level. Of course a few discredited gold bugs suggest numbers even greater.

So why am I so optimistic about the eventual price of gold?

It is because an affinity for and an understanding of the political mindset causes me to understand what decision makers will do…and why. Because a politician follows the political calendar, s/he only concerns himself/herself with the time horizon leading to the next election.

Anything requiring decisions beyond the date of the next election will be the responsibility of whoever is on the next watch. If the politician in office today is in office after the next election, a shrug of the shoulder indicates that worries of that kind can be dismissed for now to be dealt with later.

So major and difficult, but necessary, decisions are inevitably deferred. In their place spending money gives the appearance of concern and of doing something to fix the apparent problem. Aren’t those elected officials doing what we elected them to do? It certainly looks as if they are.

More cynical observers would characterize these actions by the political class and their senior bureaucratic minions as buying time hoping that something positive might magically emerge.

Those who are super cynical would even conclude give-away programs are designed simply to bribe the voters in order to curry goodwill for another term at the levers of power.

What all this means is that there is no discipline or inclination to do anything of real value in fixing the core economic and financial problems. That being the case, new programs, more spending stimulus and money creation will always be the order of the day. Hence the currency will devalue and investors will find gold as their best safe-haven refuge.

The dollar will devalue because massive dilution caused by incessant money creation allows future obligations to become more manageable – for government – because it is the only way that it can meet its future obligations for employee pensions, accumulated debt, Medicare and social security.

A nominal dollar which buys much less in the future than it does today is still a dollar. Unfortunately the holders or recipients of those devalued pieces of paper will find they are essentially fraudulent promises.

These realities make gold the closest thing to a sure-bet investment. They are also the reasons why gold will go much higher than most of us allow ourselves to contemplate.

Buckle your seatbelts and enjoy the ride ahead!

This Little-Known Rule Could Send Gold to $10,000

2009-12-13T07:01:00.000-08:00

http://www.kitco.com/ind/stansberry/dec022009.html

This Little-Known Rule Could Send Gold to $10,000
By Porter Stansberry
Dec 2 2009 9:10AM
www.dailywealth.com

It's one of those numbers that's so unbelievable you have to actually think about it for a while...

Within the next 12 months, the U.S. Treasury will have to refinance $2 trillion in short-term debt. And that's not counting any additional deficit spending, which is estimated to be around $1.5 trillion.

Put the two numbers together. Then ask yourself, how in the world can the Treasury borrow $3.5 trillion in only one year? That's an amount equal to nearly 30% of our entire GDP. And we're the world's biggest economy. Where will the money come from?

How did we end up with so much short-term debt? Like most entities that have far too much debt – whether subprime borrowers, GM, Fannie, or GE – the U.S. Treasury has tried to minimize its interest burden by borrowing for short durations and then "rolling over" the loans when they come due. As they say on Wall Street, "a rolling debt collects no moss."

What they mean is, as long as you can extend the debt, you have no problem. Unfortunately, that leads folks to take on ever greater amounts of debt... at ever shorter durations... at ever lower interest rates. Sooner or later, the creditors wake up and ask themselves: What are the chances I will ever actually be repaid? And that's when the trouble starts. Interest rates go up dramatically. Funding costs soar. The party is over. Bankruptcy is next.

When governments go bankrupt, it's called a "default." Currency speculators figured out how to accurately predict when a country would default. Two well-known economists – Alan Greenspan and Pablo Guidotti – published the secret formula in a 1999 academic paper. The formula is called the Greenspan-Guidotti rule.

The rule states: To avoid a default, countries should maintain hard currency reserves equal to at least 100% of their short-term foreign debt maturities. The world's largest money-management firm, PIMCO, explains the rule this way: "The minimum benchmark of reserves equal to at least 100% of short-term external debt is known as the Greenspan-Guidotti rule. Greenspan-Guidotti is perhaps the single concept of reserve adequacy that has the most adherents and empirical support."

The principle behind the rule is simple. If you can't pay off all of your foreign debts in the next 12 months, you're a terrible credit risk. Speculators are going to target your bonds and your currency, making it impossible to refinance your debts. A default is assured.

So how does America rank on the Greenspan-Guidotti scale? It's a guaranteed default.

The U.S. holds gold, oil, and foreign currency in reserve. It has 8,133.5 metric tonnes of gold (it is the world's largest holder). At current dollar values, it's worth around $300 billion. The U.S. strategic petroleum reserve shows a current total position of 725 million barrels. At current dollar prices, that's roughly $58 billion worth of oil. And according to the IMF, the U.S. has $136 billion in foreign currency reserves. So altogether... that's around $500 billion of reserves. Our short-term foreign debts are far bigger.

According to the U.S. Treasury, $2 trillion worth of debt will mature in the next 12 months. So looking only at short-term debt, we know the Treasury will have to finance at least $2 trillion worth of maturing debt in the next 12 months. That might not cause a crisis if we were still funding our national debt internally. But since 1985, we've been a net debtor to the world. Today, foreigners own 44% of all our debts, which means we owe foreign creditors at least $880 billion in the next 12 months – an amount far larger than our reserves.

Keep in mind, this only covers our existing debts. The Office of Management and Budget is predicting a $1.5 trillion budget deficit over the next year. That puts our total funding requirements on the order of $3.5 trillion over the next 12 months.

So... where will the money come from? Total domestic savings in the U.S. are only around $600 billion annually. Even if we all put every penny of our savings into U.S. Treasury debt, we're still going to come up nearly $3 trillion short. That's an annual funding requirement equal to roughly 40% of GDP.

Where is the money going to come from? From our foreign creditors? Not according to Greenspan-Guidotti. And not according to the Indian or Russian central banks, which have stopped buying Treasury bills and begun to buy enormous amounts of gold. The Indians bought 200 metric tonnes this month. Sources in Russia say the central bank there will double its gold reserves.

So where will the money come from? The printing press. The Federal Reserve has already monetized nearly $2 trillion worth of Treasury debt and mortgage debt. This weakens the value of the dollar and devalues our existing Treasury bonds. Sooner or later, our creditors will face a stark choice: Hold our bonds and continue to see the value diminish slowly, or try to escape to gold and see the value of their U.S. bonds plummet.

One thing they're not going to do is buy more of our debt. Which central banks will abandon the dollar next? Brazil, Korea, and Chile. These are the three largest central banks that own the least amount of gold. None owns even 1% of its total reserves in gold.

I examined these issues in much greater detail in the most recent issue of my newsletter, Porter Stansberry's Investment Advisory. Coincidentally, the New York Times repeated my warnings – nearly word for word – a few weeks ago. They didn't mention Greenspan-Guidotti, however... It's a real secret of international speculators.

My readers know that Greenspan-Guidotti means the U.S. is likely to have a severe currency crisis within the next two years. How high will gold go during this crisis? Nobody can say for sure. We've never been in the situation we are now. The numbers have never been so large and dangerous. But I wouldn't be surprised at all to see gold at $10,000 an ounce by 2012. Make sure you own some.

Good investing,

Official Chinese Paper Calls for More Gold Reserves

2009-12-11T12:09:00.000-08:00

http://in.reuters.com/article/bankingfinancial-SP/idINTOE5B702F20091208?pageNumber=1&virtualBrandChannel=0

Official Chinese Paper Calls for More Gold Reserves
Reuters
Tue, 08 Dec 2009 20:27 EST

Beijing - China should increase the proportion of gold in its foreign exchange reserves to ensure the safety of its overall portfolio, an official Chinese newspaper said on Tuesday.

The commentary, which was written by an academic and appeared in the overseas edition of the People's Daily, also said that a bigger holding of gold was a crucial building block for the yuan to become an international currency.

Gold XAU= has soared to record highs over the past month, in part on expectations that China will step up gold purchases to boost its official reserves of the precious metal.

"Although the return on gold may not be high, its safety is widely acknowledged. We should put safety first in managing our foreign exchange reserves and do our utmost to ensure that we can maintain the value of our current assets," Jing Naiquan, an assistant professor of economics at Zhejiang University, wrote.

He added that the dollar's credibility has been supported over the decades by sizeable U.S. gold reserves, and that gold is an important backstop for all free-floating currencies.

"Having sufficient gold ensures that a currency will gain global acceptance, so the renminbi will inevitably need gold as a guarantor as it goes out to the world," he wrote.

The Chinese-language overseas edition of the People's Daily is a low-circulation offshoot of the domestic paper, which is the official mouthpiece of the ruling Communist Party.

While such a commentary might not directly reflect leadership opinion, its appearance in China's tightly controlled official media suggests the idea of buying more gold has at least some support in elite circles.

However, Hu Xiaolian, a vice-governor of the People's Bank of China, said last week that gold prices were high and that markets should be wary of the formation of an asset bubble.

China said in April that its official gold holdings had risen to 1,054 tonnes from 600 tonnes in 2003, but gold is still a small portion of its $2.27 trillion of foreign exchange reserves, which are mostly invested in dollar-denominated assets.

But China is the world's biggest producer of gold and the government said that its increase in gold holdings in recent years was acquired entirely domestically, not on the international market.

GOLD IS NOT GOING UP – PAPER MONEY IS GOING DOWN

2009-12-10T11:15:00.000-08:00

http://www.fourwinds10.com/siterun_data/business/currency/news.php?q=1260376146

GOLD IS NOT GOING UP – PAPER MONEY IS GOING DOWN
Dec. 7, 2009

This month we will discuss the illusion of gold going up. We will examine the destiny of the dollar and why it will reach its intrinsic value of zero. We will also demonstrate why money printing will accelerate rapidly in the next 12-24 months.

Paper Money Collapsing against Gold

The problem with paper money is that governments can create unlimited amounts. This is what they have done throughout history and especially in the last 100 years and which has led to the total destruction of most currencies. Most people don’t even understand that their government makes their money worthless. Money printing gives them the illusion of being richer whilst all they have are pieces of paper with more zeros on them. But there is one currency that governments can’t print which is gold. Gold has been real money for almost 5,000 years and it is the only currency that has survived throughout history. Gold can’t be printed and no government controls it. Therefore gold will, over time, always reveal governments’ fraudulent actions in creating money out of thin air. And this is what we are experiencing currently. Gold is not going up. Instead gold is doing what it has always done, namely maintaining its value and purchasing power.

What we are seeing currently is the total annihilation of paper money whether it is Dollars, Pounds or Euros etc. The chart below shows the US dollar against gold. In the last 10 years the dollar has declined by 79% against gold. Most currencies have declined by similar percentages. So it is an illusion to believe that gold is going up when it is the value of paper money that is going down. All gold is doing is to reflect the virtually limitless printing of paper currencies. Since gold can’t be printed, it is the only honest currency that exists. This is why many governments don’t like gold increasing in value against their paper money since it exposes their total incompetence in running their country’s economy.

To talk about gold being over-extended at these levels is in our view absolute nonsense. As we will discuss later, money printing can only accelerate in the coming months and years. And when worthless pieces of paper are printed, gold will always reveal such a fraud by maintaining its value against the ever increasing supply of paper called “money”.

The Real Move in Gold is Still to Come

In our view we have not seen the real move in gold yet although we have gone from $250 to $1,226. The reasons are many:
Money printing will accelerate as government deficits increase and problems in the financial system re-emerge.

There is a high risk of default of major financial institutions or sovereign states with unpredictable consequences for the world economy.

The fourfold increase in gold since 1999 has taken place without the participation of most investors. It has so far been a stealth market. But this will soon change and there is likely to be a major “gold rush” in the next couple of years.

The average fund manager, pension fund manager, asset manager or individual investor has virtually no exposure to gold today but in the next couple of years they will all invest in gold.

The gold market will soon become primarily a physical market because no one will trust paper gold or quasi physical gold such as Comex, ETF’s or unallocated gold. Nor will the market trust governments many of which might have lent out most of their gold. The last audit of the gold in Fort Knox was in 1953!

Gold production is going down every year and is currently only $90 billion p.a. There will not be sufficient physical gold at current prices to satisfy increased demand.

There is only $900 billion of physical gold held privately for investment purposes. This is circa 0.7% of world financial assets. A mere doubling of the allocation to gold, which is likely, would make the gold price surge. See chart below.

Central banks are now net buyers of gold. Many countries which are underweight in gold such as China, India, Russia, Japan, Singapore Brazil, Korea and many more are major buyers of gold. This means that gold will be underwritten by several sovereign countries for many years to come. Central banks are not fickle investors and a policy decision to increase their gold holdings is unlikely to be reversed for a very long time.

Although difficult to predict, the geopolitical risk in the next few years is substantial. Pakistan, Iran, Afghanistan, Al Qaeda, Middle East, Israel, acts of terrorism in the West etc. The preceding list is potentially explosive and the likelihood that something will happen in one these areas is very high. This would have a major effect on the gold price.

Gold has outperformed most stockmarkets

In the last ten years the Dow Jones has declined against gold by 80%. The graph below shows gold expressed in local currencies against the Nikkei, Dax, FTSE and S&P in the last 10 years (Nov 1999 – Nov 2009). For example gold in yen has appreciated by 233% whilst the Nikkei has fallen by 46%. The graph shows how badly most stockmarkets have performed measured in “real money” i.e. gold.

The Precious Metals market is minuscule

The graph below shows how small the gold and silver industries and markets are in relation to major US corporations and to total world financial assets. The market capitalisation of the silver industry is only $ 9 billion and of the gold industry $ 200 B whilst Microsoft is valued at $250 B and Exxon 350 B.

Both the silver and gold industries as well as the physical markets are so small that any increase in demand is likely to drive prices very substantially higher.

Quantitative Increasing

Governments and especially the US are making noises that money printing will soon cease. This statement is as credible as their statement about “a strong dollar policy”. Let us be very clear; just as there is no chance whatsoever that they actually want a stronger dollar or that the dollar can go up. There is even less of a chance that money printing or Quantitative Easing will be withdrawn. Instead we will have what we call QI – Quantitative Incr-easing. The Fed will in the next couple of years do what Helicopter Bernanke always promised; i.e. print unlimited amounts of worthless paper which will complete the move of the dollar to its intrinsic value of zero. This will totally destroy the US economy, thereby creating a frightening political and social climate.

The reasons for an acceleration of money printing are manifold:

1. Unemployment increasing

US unemployment adjusted for short- and long-term discouraged workers is now 22% as shown in the chart below. This is an absolute disaster and will have very severe ramifications for the US economy. And it is likely to get a lot worse. During the 1930s depression non-farm unemployment reached 35%. Since the real problems in the economy have not started we would expect the US unemployment to reach at least 35% in the next 2-3 years and possibly a lot higher. With over 30 million people unemployed, this will put enormous strain on the US economy with a major reduction in GDP and tax revenues and a major increase in social payments. A country that is already bankrupt today is unlikely to cope with this additional burden. Currently 36 million Americans receive food stamps, an increase of almost 3 million in the last 6 months.

2. Financial system still very vulnerable

The $12 trillion which the US government has injected to stave off an implosion of the financial system and economy has only benefited the financial sector. Banks that have received these funds have not lent them on to the real economy.

All they have done is to prop up their balance sheets and pay out record bonuses. But even with this massive injection of funds into the banking system virtually all banks are still bankrupt if their assets are taken at market value:

With the blessing of the government, banks have been allowed to value their toxic assets at totally phoney amounts. Instead of valuing these assets at market value they can be valued at expected maturity value which of course banks assume is 100%. This is just another fraudulent collusion between government and banks.

Mortgage loans are deteriorating at a rapid rate. In October 2009 another 330,000 properties went into foreclosure. There are 7 million US homes waiting to be repossessed. Resets of interest rates on Option ARM and ALT A mortgages in 2011-12 will lead to a massive increase in foreclosures and mortgage lender losses.

Commercial property values are declining fast and vacancy rates and defaults are surging. Values have declined by 35-50% but banks are so far not recognising the full reduction in values. For smaller banks, which make up 90% all US banks, 74% of loans are in commercial real estate. There is $1.4 trillion to be refinanced in the next four years much of which is property which is in negative equity or empty. It will be virtually impossible to refinance this amount.

More derivatives are being issued by the banks. The top four US banks now have $200 trillion outstanding. A big percentage of this could not be sold at anywhere near market value.

Over 130 US banks have failed so far in 2009. Values realised when the assets are sold are substantially below the stated values, making a mockery of the current valuation rules. Not to value at market is a crime and against all sound accounting principles. But this is of course done with the total blessing of the government since, if assets were valued at market, there would be no banking system.

3. Government Deficits will escalate
The increase in unemployment and the continued problems in the financial system are two of the major contributing factors that will make government deficits surge. But there are many other problem areas that will necessitate acceleration in money printing:

Tax revenues are falling rapidly

Many states in the US are already bankrupt and most others will follow.

Cash for clunkers and tax credits to new housing buyers are just two of many schemes that the government will launch to support failing industries.

Pension fund deficits will escalate rapidly and the government will need to subsidise pensioners.

Insurance companies will fail and the government will need to step in.

The list of areas which will need government support is endless and the US government will inevitably print money to “save” the economy.

Zero percent interest rates and unlimited money-printing = Lunacy

To artificially set interest rates at zero and to print whatever money is needed goes against every single principle of sound money and a sound economy. Interest should be set by the market in order not to violate the laws of supply and demand. And money printing should be totally illegal. So why is it done? For governments to stay in power and bankers to prosper! Nobody else is prospering. Normal people are being conned into taking enormous debts that they will never be able to repay. And the value of their paper money is being totally destroyed as we have demonstrated above.

We have in the last few years made clear to our investors and readers that there will be very serious consequences arising from the actions of the government:

Government deficit will surge. The current borrowings of $12 trillion are likely to increase to over $30 trillion as we have discussed in previous reports. Interest rates could then be 20% or more and the US government would have absolutely no possibility to finance the interest on this debt.

The dollar will collapse. It is only due to the fact the dollar is the reserve currency of the world that the US has been able to dupe the rest of the world into accepting its worthless currency and financing its enormous debts. But this will not last much longer.

There will be hyperinflation. A deflationary implosion of credit and assets financed by a credit bubble is the necessary precondition to hyperinflation. In order to counteract these deflationary factors, the government will be printing unlimited amounts of money. It is the fall of the currency that causes hyperinflation and the US will be no exception. The fall of the dollar will lead to a hyperinflationary depression in the US.

There will be major social and political consequences. The economic devastation caused by the mismanagement of the economy will not only create poverty and famine but also social unrest. There will be major changes in the political system and leadership.

Protection

This report has mainly discussed the United States since what happens there has major consequences for the rest of the world.
But what is likely to happen in the US is just as likely to happen in the UK and many other countries.

Many investors now feel that the worst is over with stockmarkets recovering. In our January 2009 Newsletter we forecast that the stockmarket could have a 50% recovery. We have now had that recovery, mainly fuelled by massive liquidity injection by the government and cost savings in corporations. In our view the resumption of the downtrend could start at any time.

It is not our purpose to frighten investors or to be sensational in our views and reports. Our purpose is to warn investors of the major dangers which make asset protection absolutely vital for financial survival in the next few years.

“THERE IS NO MEANS OF AVOIDING THE FINAL COLLAPSE OF A BOOM BROUGHT ABOUT BY CREDIT EXPANSION. THE ALTERNATIVE IS ONLY WHETHER THE CRISIS SHOULD COME SOONER AS THE RESULT OF A VOLUNTARY ABANDONMENT OF FURTHER CREDIT EXPANSION OR LATER AS A FINAL AND TOTAL CATASTROPHE OF THE CURRENCY SYSTEM INVOLVED.”

Ludwig von Mises – Austrian Economist (1881- 1973)
7th December
Egon von Greyerz

Ancient Human Metropolis Found in Africa - Occupants Dug for Gold

2009-12-09T16:05:00.000-08:00

http://www.viewzone.com/adamscalendar.html

Ancient Human Metropolis Found in Africa
By Dan Eden for viewzone.

They have always been there. People noticed them before. But no one could remember who made them -- or why? Until just recently, no one even knew how many there were. Now they are everywhere -- thousands -- no, hundreds of thousands of them! And the story they tell is the most important story of humanity. But it's one we might not be prepared to hear.

Something amazing has been discovered in an area of South Africa, about 150 miles inland, west of the port of Maputo. It is the remains of a huge metropolis that measures, in conservative estimates, about 1500 square miles. It's part of an even larger community that is about 10,000 square miles and appears to have been constructed -- are you ready -- from 160,000 to 200,000 BCE!

The image is a close-up view of just a few hundred meters of the landscape taken from google-earth. The region is somewhat remote and the "circles" have often been encountered by local farmers who assumed they were made by some indigenous people in the past. But, oddly, no one ever bothered to inquire about who could have made them or how old they were.

This changed when researcher and author, Michael Tellinger, teamed up with Johan Heine, a local fireman and pilot who had been looking at these ruins from his years flying over the region. Heine had the unique advantage to see the number and extent of these strange stone foundations and knew that their significance was not being appreciated.

"When Johan first introduced me to the ancient stone ruins of southern Africa, I had no idea of the incredible discoveries we would make in the year or two that followed. The photographs, artifacts and evidence we have accumulated points unquestionably to a lost and never-before-seen civilization that predates all others -- not by just a few hundred years, or a few thousand years... but many thousands of years. These discoveries are so staggering that they will not be easily digested by the mainstream historical and archaeological fraternity, as we have already experienced. It will require a complete paradigm shift in how we view our human history. " -- Tellinger

Where it was found

The area is significant for one striking thing -- gold. "The thousands of ancient gold mines discovered over the past 500 years, points to a vanished civilization that lived and dug for gold in this part of the world for thousands of years," says Tellinger.

"And if this is in fact the cradle of humankind, we may be looking at the activities of the oldest civilization on Earth."

To see the number and scope of these ruins, I suggest that you use google-earth and start with the following coordinates:
Carolina -- 25 55' 53.28" S / 30 16' 13.13" E
Badplaas -- 25 47' 33.45" S / 30 40' 38.76" E
Waterval -- 25 38' 07.82" S / 30 21' 18.79" E
Machadodorp -- 25 39' 22.42" S / 30 17' 03.25" E

Then perform a low flying search inside the area formed by this rectangle. Simply Amazing!

Did gold play some role in the dense population that once lived here? The site is just about 150 miles from an excellent port where maritime trade could have helped to support such a large population. But remember -- we're talking almost 200,000 years ago!

The individual ruins mostly consist of stone circles. Most have been buried in the sand and are only observable by satellite or aircraft. Some have been exposed when the changing climate has blown the sand away, revealing the walls and foundations.

"I see myself as a fairly open-minded chap but I will admit that it took me well over a year for the penny to drop, and for me to realise that we are actually dealing with the oldest structures ever built by humans on Earth.

The main reason for this is that we have been taught that nothing of significance has ever come from southern Africa. That the powerful civilizations all emerged in Sumeria and Egypt and other places. We are told that until the settlement of the BANTU people from the north, which was supposed to have started sometime in the 12th century AD, this part of the world was filled by hunter gatherers and so-called Bushmen, who did not make any major contributions in technology or civilization." -- Tellinger

A Rich and Diverse History

When explorers first encountered these ruins, they assumed that they were cattle corals made by nomadic tribes, like the Bantu people, as they moved south and settled the land from around the 13th century. There was no previous historical record of any older civilization capable of building such a densly populated community. Little effort was made to investigate the site because the scope of the ruins was not fully known.

Over the past 20 years, people like Cyril Hromnik, Richard Wade, Johan Heine and a handful of others have discovered that these stone structures are not what the seem to be. In fact these are now believed to be the remains of ancient temples and astronomical observatories of lost ancient civilizations that stretch back for many thousands of years.

These circular ruins are spread over a huge area. They can only truly be appreciated from the air or through modern sattelite images. Many of them have almost completely eroded or have been covered by the movement of soil from farming and the weather. Some have survived well enough to reveal their great size [see above] with some original walls standing almost 5 feet high and over a meter wide in places.

Looking at the entire metropolis, it becomes obvious that this was a well planned community, developed by a highly evolved civilization. The number of ancient gold mines suggests the reason for the community being in this location. We find roads -- some extending a hundred miles -- that connected the community and terraced agriculture, closely resembling those found in the Inca settlements in Peru.

But one question begs for an answer -- how could this be achieved by humans 200,000 years ago?

An example of what you will see on google-earth.

This is what you will see on google-earth at 25 37'40.90"S / 30 17'57.41E [A]. We are viewing the scene from an altitude of 357 meters.

This is not a "special" location -- just one we picked at random, within the previously described area. It shows artifacts that are everywhere and we encourage you to search the area with this great internet technology.

The circular stone structures are obvious from this view, even though they may not be visible from ground level. Notice that there are many very long roads [B] that connect groups of the circular structures. If you zoom out and follow these "roads" they travel for many miles.

The fact that we can see these structures is mainly because natural erosion has blown away the dirt and debris that has covered them for thousands of years. Once exposed to the wind, the rocks are scoured clean and may appear deceptively new.

If you look closely at what first appears to be empty land [C], you will notice many faint circles, indicating that even more dwellings lurk below the surface. In reality, the entire area is packed full of these structures and connecting roads.

Why has no one notices these before?

How the Site was dated

Once the ruins were examined, the researchers were anxious to place the lost civilization in a historical perspective. The rocks were covered with a patina that looked very old but there were no items sufficient for carbon-14 dating. It was then that a chance discovery revealed the age of the site, and sent a chill down the spine of archaeologists and historians!

Gold Bars in Fort Knox Are Fake!

2009-12-09T15:53:00.000-08:00

http://www.viewzone.com/fakegold.html

Gold Bars in Fort Knox Are Fake!
Fake gold bars! What's next?

It's one thing to counterfeit a twenty or hundred dollar bill. The amount of financial damage is usually limited to a specific region and only affects dozens of people and thousands of dollars. Secret Service agents quickly notify the banks on how to recognize these phony bills and retail outlets usually have procedures in place (such as special pens to test the paper) to stop their proliferation.

But what about gold? This is the most sacred of all commodities because it is thought to be the most trusted, reliable and valuable means of saving wealth.

A recent discovery -- in October of 2009 -- has been suppressed by the main stream media but has been circulating among the "big money" brokers and financial kingpins and is just now being revealed to the public. It involves the gold in Fort Knox -- the US Treasury gold -- that is the equity of our national wealth. In short, millions (with an "m") of gold bars are fake!

Who did this? Apparently our own government.

Background

In October of 2009 the Chinese received a shipment of gold bars. Gold is regularly exchanged between countries to pay debts and to settle the so-called balance of trade. Most gold is exchanged and stored in vaults under the supervision of a special organization based in London, the London Bullion Market Association (or LBMA). When the shipment was received, the Chinese government asked that special tests be performed to guarantee the purity and weight of the gold bars. In this test, four small holed are drilled into the gold bars and the metal is then analyzed.

Officials were shocked to learn that the bars were fake. They contained cores of tungsten with only a outer coating of real gold. What's more, these gold bars, containing serial numbers for tracking, originated in the US and had been stored in Fort Knox for years. There were reportedly between 5,600 to 5,700 bars, weighing 400 oz. each, in the shipment!

At first many gold experts assumed the fake gold originated in China, the world's best knock-off producers. The Chinese were quick to investigate and issued a statement that implicated the US in the scheme.

What the Chinese uncovered:

Roughly 15 years ago -- during the Clinton Administration [think Robert Rubin, Sir Alan Greenspan and Lawrence Summers] -- between 1.3 and 1.5 million 400 oz tungsten blanks were allegedly manufactured by a very high-end, sophisticated refiner in the USA [more than 16 Thousand metric tonnes]. Subsequently, 640,000 of these tungsten blanks received their gold plating and WERE shipped to Ft. Knox and remain there to this day.

According to the Chinese investigation, the balance of this 1.3 million to 1.5 million 400 oz tungsten cache was also gold plated and then allegedly "sold" into the international market. Apparently, the global market is literally "stuffed full of 400 oz salted bars". Perhaps as much as 600-billion dollars worth.

An obscure news item originally published in the N.Y. Post [written by Jennifer Anderson] in late Jan. 04 perhaps makes sense now.

DA investigating NYMEX executive
Manhattan, New York, --Feb. 2, 2004. A top executive at the New York Mercantile Exchange is being investigated by the Manhattan district attorney. Sources close to the exchange said that Stuart Smith, senior vice president of operations at the exchange, was served with a search warrant by the district attorney's office last week. Details of the investigation have not been disclosed, but a NYMEX spokeswoman said it was unrelated to any of the exchange's markets. She declined to comment further other than to say that charges had not been brought. A spokeswoman for the Manhattan district attorney's office also declined comment."

The offices of the Senior Vice President of Operations -- NYMEX -- is exactly where you would go to find the records [serial number and smelter of origin] for EVERY GOLD BAR ever PHYSICALLY settled on the exchange. They are required to keep these records. These precise records would show the lineage of all the physical gold settled on the exchange and hence "prove" that the amount of gold in question could not have possibly come from the U.S. mining operations -- because the amounts in question coming from U.S. smelters would undoubtedly be vastly bigger than domestic mine production.

No one knows whatever happened to Stuart Smith. After his offices were raided he took "administrative leave" from the NYMEX and he has never been heard from since. Amazingly, there never was any follow up on in the media on the original story as well as ZERO developments ever stemming from D.A. Morgenthauâ€™s office who executed the search warrant.

Are we to believe that NYMEX offices were raided, the Sr. V.P. of operations then takes leave -- all for nothing?

The revelations of fake gold bars also explains another highly unusual story that also happened in 2004:

LONDON, April 14, 2004 (Reuters) -- NM Rothschild & Sons Ltd., the London-based unit of investment bank Rothschild [ROT.UL], will withdraw from trading commodities, including gold, in London as it reviews its operations, it said on Wednesday.
Interestingly, GATA's Bill Murphy speculated about this back in 2004;

"Why is Rothschild leaving the gold business at this time my colleagues and I conjectured today? Just a guess on my part, but [I] suspect something is amiss. They know a big scandal is coming and they don't want to be a part of it... [The] Rothschild wants out before the proverbial "S" hits the fan." -- BILL MURPHY, LEMETROPOLE, 4-18-2004

What is the GATA?

The Gold Antitrust Action Committee (GATA) is an organisation which has been nipping at the heels of the US Treasury Federal Reserve for several years now. The basis of GATA's accusations is that these institutions, in coordination with other complicit central banks and the large gold-trading investment banks in the US, have been manipulating the price of gold for decades.

What is the GLD?

GLD is a short form for Good London Delivery. The London Bullion Market Association (LBMA) has defined "good delivery" as a delivery from an entity which is listed on their delivery list or meets the standards for said list and whose bars have passed testing requirements established by the associatin and updated from time to time. The bars have to be pure for AU in an area of 995.0 to 999.9 per 1000. Weight, Shape, Appearance, Marks and Weight Stamps are regulated as follows:

Weight: minimum 350 fine ounces AU; maximum 430 fine ounces AU, gross weight of a bar is expressed in troy ounces, in multiples of 0.025, rounded down to the nearest 0.025 of an troy ounce.

Dimensions: the recommended dimensions for a Good Delivery gold bar are: Top Surface: 255 x 81 mm; Bottom Surface: 236 x 57 mm; Thickness: 37 mm.

Fineness: the minimum 995.0 parts per thousand fine gold. Marks: Serial number; Assay stamp of refiner; Fineness (to four significant figures); Year of manufacture (expressed in four digits).

After reviewing their prospectus yet again, it becomes pretty clear that GLD was established to purposefully deflect investment dollars away from legitimate gold pursuits and to create a stealth, cesspool / catch-all, slush-fund and a likely destination for many of these fake tungsten bars where they would never see the light of day -- hidden behind the following legalese "shield" from the law:

[Excerpt from the GLD prospectus on page 11]
"Gold bars allocated to the Trust in connection with the creation of a Basket may not meet the London Good Delivery Standards and, if a Basket is issued against such gold, the Trust may suffer a loss. Neither the Trustee nor the Custodian independently confirms the fineness of the gold bars allocated to the Trust in connection with the creation of a Basket. The gold bars allocated to the Trust by the Custodian may be different from the reported fineness or weight required by the LBMAâ€™s standards for gold bars delivered in settlement of a gold trade, or the London Good Delivery Standards, the standards required by the Trust. If the Trustee nevertheless issues a Basket against such gold, and if the Custodian fails to satisfy its obligation to credit the Trust the amount of any deficiency, the Trust may suffer a loss."

The Federal Reserve knows but is apparently part of the scheme

Earlier this year GATA filed a second Freedom of Information Act (FOIA) request with the Federal Reserve System for documents from 1990 to date having to do with gold swaps, gold swapped, or proposed gold swaps.

On Aug. 5, The Federal Reserve responded to this FOIA request by adding two more documents to those disclosed to GATA in April 2008 from the earlier FOIA request. These documents totaled 173 pages, many parts of which were redacted (blacked out). The Fed's response also noted that there were 137 pages of documents not disclosed that were alleged to be exempt from disclosure.

GATA appealed this determination on Aug. 20. The appeal asked for more information to substantiate the legitimacy of the claimed exemptions from disclosure and an explanation on why some documents, such as one posted on the Federal Reserve Web site that discusses gold swaps, were not included in the Aug. 5 document release.

In a Sept. 17, 2009, letter on Federal Reserve System letterhead, Federal Reserve governor Kevin M. Warsh completely denied GATA's appeal. The entire text of this letter can be examined at http://www.gata.org/files/GATAFedResponse-09-17-2009.pdf.

The first paragraph on the third page is the most revealing.

"In connection with your appeal, I have confirmed that the information withheld under exemption 4 consists of confidential commercial or financial information relating to the operations of the Federal Reserve Banks that was obtained within the meaning of exemption 4. This includes information relating to swap arrangements with foreign banks on behalf of the Federal Reserve System and is not the type of information that is customarily disclosed to the public. This information was properly withheld from you."

The above statement is an admission that the Federal Reserve has been involved with the fake gold bar swaps and that it refuses to disclose any information about its activities!

Why use tungsten?

If you are going to print fake money you need to have the special paper, otherwise the bills don't feel right and can be easily detected by special pens that most merchants and banks use. Likewise, if you are going to fake gold bars you had better be sure they have the same weight and properties of real gold.

In early 2008 millions of dollars in gold at the central bank of Ethiopia turned out to be fake. What were supposed to be bars of solid gold turned out to be nothing more than gold-plated steel. They tried to sell the stuff to South Africa and it was sent back when the South Africans noticed this little problem.

The problem with making good-quality fake gold is that gold is remarkably dense. It's almost twice the density of lead, and two-and-a-half times more dense than steel. You don't usually notice this because small gold rings and the like don't weigh enough to make it obvious, but if you've ever held a larger bar of gold, it's absolutely unmistakable: The stuff is very, very heavy.

The standard gold bar for bank-to-bank trade, known as a "London good delivery bar" weighs 400 troy ounces (over thirty-three pounds), yet is no bigger than a paperback novel. A bar of steel the same size would weigh only thirteen and a half pounds.

According to gold expert, Theo Gray, the problem is that there are very few metals that are as dense as gold, and with only two exceptions they all cost as much or more than gold.

The first exception is depleted uranium, which is cheap if you're a government, but hard for individuals to get. It's also radioactive, which could be a bit of an issue.

The second exception is a real winner: tungsten. Tungsten is vastly cheaper than gold (maybe $30 dollars a pound compared to $12,000 a pound for gold right now). And remarkably, it has exactly the same density as gold, to three decimal places. The main differences are that it's the wrong color, and that it's much, much harder than gold. (Very pure gold is quite soft, you can dent it with a fingernail.)

A top-of-the-line fake gold bar should match the color, surface hardness, density, chemical, and nuclear properties of gold perfectly. To do this, you could could start with a tungsten slug about 1/8-inch smaller in each dimension than the gold bar you want, then cast a 1/16-inch layer of real pure gold all around it. This bar would feel right in the hand, it would have a dead ring when knocked as gold should, it would test right chemically, it would weigh *exactly* the right amount, and though I don't know this for sure, I think it would also pass an x-ray fluorescence scan, the 1/16" layer of pure gold being enough to stop the x-rays from reaching any tungsten. You'd pretty much have to drill it to find out it's fake.

Such a top-quality fake London good delivery bar would cost about $50,000 to produce because it's got a lot of real gold in it, but you'd still make a nice profit considering that a real one is worth closer to $400,000.

What's going to happen now?

Politicians like Ron Paul have been demanding that the Federal Reserve be more transparent and open up their records for public scrutiny. But the Fed has consistently refused, stating that these disclosures would undermine its operation. Yes, it certainly would!

Glenn Beck's "Buy Gold!" Hucksterism Pisses Off Fox News

2009-12-09T08:39:00.000-08:00

http://www.alternet.org/module/printversion/144440/?type=blog

Glenn Beck's "Buy Gold!" Hucksterism Pisses Off Fox News
By Tana Ganeva, AlterNet
December 9, 2009
http://www.alternet.org/bloggers/www.alternet.org/144440/

People who rely on Glenn Beck for financial advice may have to find another economist to tell them what to do with their money. Beck, who hawks investing in gold as a survival strategy for when Obama confiscates your guns and the world collapses, also profits from gold company advertising and endorsement deals with gold retailers. Beck's very-trustworthy face graces the website of Goldline International, Inc., with the following endorsement: "Before I started turning you on to Goldline, I wanted to look them in the eye. This is a top notch organization that's been in business since 1960." A video on his website, highlighted by Politico in a great piece about the connection between right-wing personalities and gold retailers, offers this sound financial advice from Beck:

If you’ve been watching for any length of time, and you still haven’t looked into buying gold, what’s wrong with you? I was going to say ‘are you just a reporter for the New York Times?’ but I don’t think they actually watch. They just write about it.

I think you’re nuts. When the system eventually collapses, and the government comes with guns and confiscates, you know, everything in your home and all your possessions, and then you fight off the raving mad cannibalistic crowds that Ted Turner talked about, don’t come crying to me. I told you: get gold.

According to a Daily Finance piece, Beck may have breached not only basic journalistic standards, but what counts as basic journalistic standards at Fox news:

Like other news organizations, Fox News prohibits its on-air personalities from making paid product endorsements. But it makes an exception for its commentators who are also radio hosts, who are allowed to perform live reads, says Joel Cheatwood, senior vice president for development.

"When we hired Glenn at Fox News, we hired him with the understanding that he had a well-established, burgeoning radio business, and we had to be accepting of certain elements of that," Cheatwood tells DailyFinance, noting that Beck's relationship with Goldline dates back to his time at HLN, CNN's sister network.

But the exemption is meant only to apply to live reads, not to the kind of broader spokesmanship Beck, to all appearances, provides Goldline. In particular, Beck's ubiquity on the Goldline website is not in keeping with Fox's rules. A Fox spokeswoman said the network's legal department is taking up the matter with Beck's agent, George Hiltzik.

Even so, it could be argued that taking money from a gold vendor in any form creates a conflict of interest that calls into question Beck's objectivity on stories touching on gold's investment value. I asked Cheatwood whether Beck is capable of covering the issue in an impartial way.

"I think the beauty is he doesn't operate in a vacuum with the show," he said. "He's got a staff. I'm involved with the show daily. The rundowns of the show are circulated through Bill Shine," the network's senior vice president of programming. "It's a cooperative effort."

Why would the Fed be hiding Gold Swaps at Foreign Banks?

2009-12-06T11:10:00.001-08:00

http://www.freedomsphoenix.com/Article/058179-2009-09-24-why-would-the-fed-be-hiding-gold-swaps-at-foreign.htm

Why would the Fed be hiding Gold Swaps at Foreign Banks? A possible explanation...
09-24-2009

I am a subscriber to the August Review. As such I have known about this story since it came out last December. I see it is now making the rounds on several sites. Chris Martenson carried the August Review story recently for example. For those who may not know the picture chosen to accompany this story represents the Tri Lateral Commissions insignia.

With Zero Hedge and others now starting to carry the story "Is The Fed Hiding Gold Swap Arrangements With Foreign Banks" and the Business Wire story "Federal Reserve Admits Hiding Gold Swap Arrangements, GATA Says" both being reported on here and many sites starting to publish the August Review story again I thought it was time to integrate the stories for your consideration.

Recall also the stories recently reported about Barrick Gold as you read the story below.

From the August Review...

Trilateral Plan to Corner World Gold Market?

Since 1973, this writer has made inquiry as to the location and ownership of the vast stores of monetary gold (400 oz., .999 pure bars) in the world. There has not been a formal audit on Fort Knox, for instance, since the Eisenhower administration. Official statistics on gold holdings are often contradictory. Getting plain answers from any Central Bank in the world, including the Fed, is virtually impossible.

This paper points out a pattern of manipulation that has been clearly observed by many people. However, patterns do not exist in a vacuum, but rather they are evidence of the existence of a stable and consistent methodology. Clearly, more study needs to be done in identifying the finer parts of the methodology and its designers, but this is a good start!

When Richard Nixon canceled the Bretton Woods system in 1971, exchangeability of paper dollars for gold was terminated. In 1970 alone, available gold vs. dollars outstanding had shrunk from 55 to 22 percent, thus exerting pressure for investors to switch to gold to avoid further dilution of dollar assets.

Although the economic and financial experts swore that gold was an outmoded, ineffective and useless financial asset, cooler heads knew better. In recent years, these same experts have reversed field and are now proclaiming that gold is still, and always has been, a consistent monetary asset. Why the flip-flop?

The economic chaos in the world today is a direct result of policies set in motion to foster a New International Economic Order (NIEO). The NIEO was the explicit creation of the Trilateral Commission, founded by David Rockefeller and Zbigniew Brzezinski in 1973, and their early papers and task force reports clearly asserted their NIEO plans.

Members of the Trilateral Commission were instrumental in creating the European Union as well. The EU is the prototype of global governance that will soon exert its influence to reshuffle world relationships.

Since 1973, Trilateralists have dominated the Executive Branch of the U.S. government with politicians like Jimmy Carter, George H. W. Bush, Bill Clinton, Al Gore and Dick Cheney. This has led to domination of the world trade mechanisms like the World Bank and negotiation of free trade agreements.

Six out of eight presidents of the World Bank have been members of the Commission. Eight out of ten of the U.S. Trade Representatives (USTR) have been Commissioners.

Indeed, the Trilateral Commission has had undue influence and control over the development of globalization, and it was self-interested at best.
With today's total meltdown in economic and global financial markets, one must ask, "Are these people just plain stupid?"

The answer has to be "No", considering their great success at consistently dominating political and economic processes over a span of thirty-five years.

So what else is going on?
There is mounting evidence that there has been a larger plan underway to corner the global supply of gold, thus laying the groundwork for a global currency exclusively controlled by Trilaterals and their friends. By extension, economic and political mechanisms would be controlled to the same extent.

From a Trilateral perspective, the Bretton Woods system had two flaws:

Gold was rapidly being decentralized into non-Trilateral hands It limited the arbitrary creation of paper money to finance projects launched by Trilateral-related global companies. (Read Trilaterals Over Washington (Sutton & Wood) for detailed documentation on this process)
The breakup of Bretton Woods and the resulting opportunities may have been the principal rationale for the creation of the Trilateral Commission in the first place.
Since 1973, there has been an overarching plan to quietly centralize gold into private hands, using incrementally created wealth made possible by rapidly inflating paper currencies.

This theory must be explored and tested, because if true, it represents not just the hijacking of America (already thoroughly demonstrated elsewhere in this writer's papers), but the hijacking of an entire planet!
In 1976, Antony Sutton wrote,

"The assault on gold today is an integral part of a planned move into a new economic order under the dominance of a single country. It was Nazi Germany in the 1940's; it is the United States in the 1970's. In brief, the war on gold that we observe today, and discuss below, is dollar imperialism, designed to maintain the U.S. dollar as the only world currency without competitors. The purpose is the formation of a world totalitarian state under Wall Street dominance." (The War on Gold, Antony C. Sutton, 1976, p. 63)
Sutton's view was limited because he had not yet discovered the Trilateral framework just created three years earlier in 1973. We can see now that the totalitarian state is still clearly in view, but the self-proposed rulers of this new arrangement will be members of the Trilateral Commission, and their monetary "enforcer" will be gold.

2008 Gold Hegemony
Bill Murphy is the chairman of the Gold Anti-Trust Action Committee (GATA), which has asserted for almost 10 years that a concentrated gold cartel has been manipulating the price of gold. Murphy and GATA are highly regarded around the world on their work to expose this cartel.

On September 10, 2008, Murphy made an opening statement at the 2008 Las Vegas Hard Assets Investment Conference, reprinted in full below. Murphy's perspective and argument does not include the Trilateral Commission, but the players in his narrative are largely members or former members of the Commission.

This leads this writer to connect some dots between 1973-1976 and 1998-2008.

In Murphy's comments, note that the famous bullion banks of 2008 include Goldman Sachs,JP Morgan Chase, Citigroup and Deutsche Bank, all of which have at least one director or senior official sitting on the Trilateral Commission. In addition, the players Murphy names are members of the Commission.

As Sutton did in 1976, to imply a "war on gold" necessitates an eventual victory, a victor and a loser. It is already painfully obvious that the citizens of America are the losers: The middle class is being wiped out and we all hold a debased paper currency that is headed toward destruction.

The question is, who will the winner be? And what is the victor's intent over the conquered?

Bill Murphy's Opening Statements
The Gold Anti-Trust Action Committee’s basic assertion for the past 9 ½ years is that there is a Gold Cartel out there suppressing the price of gold. It consists of the US Government, including the Fed and Treasury, various other central banks, and bullion banks like Goldman Sachs and JP Morgan Chase.

The motives of “the cabal” are to give support to the dollar, keep US interest rates lower than they should be, and to tone down the widely watched US barometer of US financial market health, that being the gold price. After all, whenever the price of gold soars, it congers up talk of too much inflation, a sinking dollar, or a crisis of some sort … all negative for Wall Street and the incumbent administration.

Therefore, “Shoot the Messenger” is The Gold Cartel’s key mission.

The suppression of the price of gold was the essence of Robert Rubin’s Strong Dollar Policy. What else did the US do to effect that policy? Talk? Jawbone?

It seems to have all started with Robert Rubin…

Before he was CEO of Goldman Sachs and then US Treasury Secretary, Robert Rubinworked in London for Goldman Sachs. One of his duties was to oversee their gold trading operations. We know this because the CEO of Kirkland Lake Gold, Brian Hinchcliffe, a staunch GATA supporter, worked in London back then for Goldman Sachs and reported directly to Robert Rubin.

This was many years ago and interest rates in the US were very high, say from 6 to 12%. Rubin had Goldman Sachs borrow gold from the central banks to fund their basic operations. They could do so at about a 1 % interest rate. This was like FREE money, as long as the price of gold did not rise to any sustained degree for any length of time.

Soon other major financial institutions realized what GS was doing and copied them.Rubin continued these operations as the Goldman Sachs CEO and then took it to a new level as US Secretary Treasurer. That is how the gold price suppression became the lynchpin of his widely acclaimed “Strong Dollar Policy.” GATA’s Reg Howe caught on to this notion in a paper titled, “Gibson’s Paradox and The Gold Standard,” co-authored by Lawrence Summers in 1988. Summers, a professor at Harvard at the time, succeeded Rubin as US Treasury Secretary. The bottom line of Summer’s analysis is that “gold prices in a free market should move inversely to real interest rates.” Control gold and it will help to control interest rates.

Bullion banks such as Goldman and Morgan became The Gold Cartel’s hit men, trading the gold market from the short side and bombing the market in coordinated anti-trust fashion at the beck and call of our government, making a great deal of money in the process … as you have all witnessed the past couple of months.

In a brilliant piece a few weeks ago Ted Butler reported 3 U.S. banks held a short position of 7,787 contracts (778,700 ounces) of gold in July, and, astonishingly the same 3 U.S. banks held a short position of 86,398 contracts (8,639,800 ounces) in August, an eleven-fold increase. Gold then declined more than $150 per ounce once Secretary Paulson (note: Paulson is ex-CEO of Goldman Sachs) gave the order, just as he did in May 2006 when a similar order was given, according to a US Senator from the state of Washington. Both times, various bullion banks made vast amounts of money quickly as the US government facilitated their short positions by feeding considerable clandestine central bank gold into the physical market.

It was the concerted, concentrated action of certain BULLION BANKS, which tipped off GATA what was going on nearly a decade ago now.

It was this clandestine feeding of central bank gold into the marketplace which clued GATA into the gold price suppression scheme. Three GATA consultants, Reg Howe, Frank Veneroso and James Turk, using independent, sophisticated methodologies, came to the same conclusion years ago … that the central banks have far less gold than the 30,000 tonnes of gold they say they have. The GATA camp research shows they have less than half that amount in their vaults, the difference being the amount that has been fed into the physical market to suppress the price. Since demand for physical gold exceeds mine and scrap supply by well over than 1,000 tonnes per year, this central bank gold is vital to prevent the price from exploding.

GATA is not alone in recognizing the central banks are not accounting for their gold properly. GATA revealed an IMF paper which corroborates GATA’s claims that much of the central bank gold has been double counted and that the central banks are not properly accounting for the gold no longer in their possession.

ISSUES PAPER (RESTEG) # 11

TREATMENT OF GOLD SWAPS AND GOLD DEPOSITS (LOANS)

“14. Regarding the statistical treatment of gold swaps, its treatment should be consistent with that of other reverse transactions, as presented in paragraph 7 above. Thus, swapped gold should be excluded from both reserve assets and IIP (demonetization). This is a logical consequence, and overstating of reserve assets can be avoided. On the other hand, this results in a decrease in the financial assets of the monetary authorities.”

Gold swaps and gold leasing are at the heart of the gold price suppression scheme. For example, the US cannot sell its 8,133.5 tonnes of gold without an Act of Congress, but they could lease or swap it. In 2006 the President of the Bundesbank made an astonishing statement for a central banker: “We have been asked to negotiate with other central banks’ about potential swap deals involving gold.”

Is this stuff hush hush? I guess so. in 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.” When the GATA camp had Kentucky Senator Jim Bunning inquire Alan Greenspan what that was all about, Mattingly came back and said the Fed testimony was GARBLED … Right…

Recently GATA filed Freedom of Information Act requests to the Fed and Treasury about US gold swaps. The Fed redacted 300 pages of information and refused to send another 400 pages. Now, think about it … if the US gold is, and has been, just sitting in our vaults, without a true independent audit since the Eisenhower Administration, what is their to withhold?

As for GATA’s request to the Treasury about any Exchange Stabilization Fund activity into the gold market, they answered in the negative by referring to the Exchange STABILITY Fund. Can they be that lame?

Is the gold price manipulated? You don’t need to read through GATA’s countless evidence to appreciate what is going on. It is on the public record…

beginning with Alan Greenspan’s testimony before Congress in 1998:

“Central banks stand ready to lease gold in increasing quantities should the price rise” … which is just what they have done!

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.

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 BISconference in Basel, Switzerland, in June 2005. 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.”

Barrick Gold, then the largest gold-mining company in the world, confessed to the gold price suppression scheme in U.S. District Court in New Orleans on February 28, 2003. On that date Barrick filed a motion to dismiss Blanchard & Co.’s anti-trust lawsuit against Barrick and its bullion banker, JP Morgan Chase, 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.

Is the gold price manipulated today? Former Federal Reserve Chairman Paul Volckerwrote the following in his memoirs:

“Joint intervention in gold sales to prevent a steep rise in the price of gold (in the 1970s), however, was not undertaken. That was a mistake.” …

Robert Rubin and gang took heed … as are more and more in the mainstream financial world. Just last week, the highly regarded Don Coxe of the Bank of Montreal stated the following in an audio presentation last about recent market action to the bank’s clients:

“The Most Massive Intervention Of Government Into The Capital Markets, Or The Financial Markets, Since President Roosevelt Closed The Banks Back In 1933,”

It’s wake up time, finally.

Recently, there has been talk about the Working Group on Financial Markets (more commonly known as The Plunge Protection Team), which consists of the President, Treasury Secretary, and heads of the CFTC and SEC. Think about it … why are bureaucrats included in meetings about the markets except to look the other way regarding government intervention?

To give you an idea just how pervasive and insidious our markets have become, I bring your attention to the Counterparty Risk Management Group. Ever hear of it?

It consists of major players in the investment banking/hedge fund community in New York, including Goldman Sachs. Citigroup, JPMorgan Chase, and Deutsche Bank (all defendants in GATA’s Reg Howe’s suit against The Gold Cartel in 2001). There are a number of other participants such as the famed hedge fund of Paul Tudor Jones.

On July 27, 2005, E. Gerald Corrigan, former President and CEO of the Federal Reserve Bank of New York, and now a Managing Director of Goldman Sachs, wrote:

The Report of the Counterparty Risk Management
Policy Group II

Addressing it to:

Mr. Henry M. Paulson, Jr.
Chairman and Chief Executive Officer
Goldman, Sachs & Co.

(all roads always lead back to Goldman Sachs)

He stated; “since we know that financial disturbances and even financial shocks will occur in the future, and we know that no approaches to risk management or official supervision are fail-safe, we also know that we must preserve and strengthen the institutional arrangements whereby, at the point of crisis, industry groups and industry leaders, as well as supervisors, are prepared to work together in order to serve the larger and shared goal of financial stability.”

This Orwellian shared goal of financial stability, which began with the serious rigging of the gold price under Robert Rubin, has led us to the financial market mess we have today. It is wrong and must be stopped!

Is the cat out of the bag?
In the 2007 May/June issue of Foreign Affairs, Benn Steil presented his paper, The End of National Currency. Steil is Director of International Economics at the Council on Foreign Relations. In his report, Steil stated,

"So what about gold? A revived gold standard is out of the question. In the nineteenth century, governments spent less than ten percent of national income in a given year. Today, they routinely spend half or more, and so they would never subordinate spending to the stringent requirements of sustaining a commodity-based monetary system. But private gold banks already exist, allowing account holders to make international payments in the form of shares in actual gold bars. Although clearly a niche business at present, gold banking has grown dramatically in recent years, in tandem with the dollar's decline. A new gold-based international monetary system surely sounds far-fetched. But so, in 1900, did a monetary system without gold.Modern technology makes a revival of gold money, through private gold banks, possible even without government support."

This is hardly far-fetched. Zbigniew Brzezinski noted in 1972 that "the nation-state as a fundamental unit of man's organized life has ceased to be the principal creative force: International banks and multinational corporations are acting and planning in terms that are far in advance of the political concepts of the nation-state."

Cracks in the dam
Noted Romanian economist, Professor Antal Fekete, released a critical report on December 5, 2008, entitled "Red Alert: Gold Backwardation."
For the first time in history, gold futures sold below spot price and creates a potential crisis in gold delivery at the end of December. Fekete states,

"According to the December 3rd Comex delivery report, there are 11,759 notices to take delivery. This represents 1.1759 million ounces of gold, while the Comex-approved warehouses hold 2.9 million ounces. Thus 40% of the total amount will have to be delivered by December 31st. Since not all the gold in the warehouses is available for delivery, Comex supply of gold falls far short of the demand at present rates. Futures markets in gold are breaking down. Paper gold is progressively being discredited..."

"Gold going to permanent backwardation means that gold is no longer for sale at any price, whether it is quoted in dollars, yens, euros, or Swiss francs. The situation is exactly the same as it has been for years: gold is not for sale at any price quoted in Zimbabwe currency, however high the quote is. To put it differently, all offers to sell gold are being withdrawn, whether it concerns newly mined gold, scrap gold, bullion gold or coined gold. I dubbed this event that has cast its long shadow forward for many a year, the last contango in Washington ― contango being the name for the condition opposite to backwardation (namely, that of a positive basis), and Washington being the city where the Paper-mill of the Potomac, the Federal Reserve Board, is located. This is a tongue-in-cheek way of saying that the jig in Washington is up. The music has stopped on the players of ‘musical chairs’. Those who have no gold in hand are out of luck. They won’t get it now through the regular channels. If they want it, they will have to go to the black market."

Conclusion
If Fekete is correct, and he has seldom been wrong, then the trap is snapping shut on who will own the gold in 2009. Free-market supplies of gold are drying up, but the price is being kept low as global institutions sop up whatever crumbs are left.

Several very serious implications can be drawn:
The massive amounts of gold leased to bullion banks will ultimately be seized by these same banks as collateral against worthless paper loans made to the Central Banks. Central Banks (including the Federal Reserve) could well be left to disintegrate in order to give way to a single global central bank controlled and fueled by the bullion banks who have monopoly control over the world's gold. These superbanks are all closely tied to the goals and membership of the Trilateral Commission, whose members have methodically carried out a monetary policy designed to bring about this eventuality. For all practical intent, individuals will be frozen out of the gold market at any price.
Indeed, a global totalitarian state may be closer than we think; as the globalist's golden rule states, "He who has the gold, makes the rules."

http://www.augustreview.com/issues/globalization/trilateral_plan_to_corner_world_gold_market?_20081209107/
http://www.chrismartenson.com/blog/daily-digest-september-17/27582
http://www.freedomsphoenix.com/News/058164-2009-09-23-is-the-fed-hiding-gold-swap-arrangements-with-foreign-central.htm
http://www.freedomsphoenix.com/Find-Freedom.htm?At=0072032&From=News
http://www.freedomsphoenix.com/News/058177-2009-09-24-fed-admits-hiding-gold-swap-arrangements.htm
http://www.theendrun.com/2009/clinton-quigley-and-the-new-world-order/

US Mint Gold Buffalo Bullion Coins Sold Out, Other Gold Coins Suspended or Limited

2009-12-06T07:31:00.000-08:00

http://news.coinupdate.com/us-mint-gold-buffalo-bullion-coins-sold-out-0069/

US Mint Gold Buffalo Bullion Coins Sold Out, Other Gold Coins Suspended or Limited
Michael Zielinski
Coin Collector News
Sat, 05 Dec 2009 16:29 EST

2009 Gold BuffaloYesterday, the United States Mint announced that their American Gold Buffalo bullion coins have sold out.

The Mint also announced the continued suspension of the remaining one ounce gold bullion offering, and the limited availability of recently released fractional gold bullion coins.

As it stands, all gold bullion offerings from the US Mint are currently either sold, out, suspended, or limited.

The Gold Buffalo bullion coins contain one ounce of 24 karat gold. Typically these coins have been available throughout the year for purchase through the US Mint's network of authorized bullion purchasers. This year the release was delayed until October 15, 2009. Since that date, the Mint has recorded sales of 200,000 coins. This amount, achieved in less than two months, exceeds the annual sales totals for each of the past two years.

The US Mint's other gold bullion offerings are suspended or subject to limited availability. Sales of the 22 karat one ounce American Gold Eagle bullion coins were suspended on November 25, 2009. The US Mint announced the suspension to authorized purchasers in a memo which cited a depleted inventory due to "continued strong demand." Additional coins are expected to be available by mid-December.

The US Mint began sales of fractional weight American Gold Eagle bullion coins this week on December 3, 2009. The coins available included one-half ounce, one-quarter ounce, and one-tenth ounce sizes. These fractional Gold Eagles are typically available throughout the year, but this year the Mint delayed the release to focus production on the one ounce bullion coins.

After only one day of availability, the US Mint recorded sales of 56,000 of the one-half ounce coins, 58,000 of the one-quarter ounce coins, and 260,000 of the one-tenth ounce coins. They have indicated that the inventory for one-tenth ounce coins has already been depleted and the inventory for one-half and one-quarter ounce coins is limited. The remaining limited inventory will be offered via the US Mint's standard allocation process and additional inventory is expected to be available in mid-December.

Last year, the United States Mint had been forced to suspend each of their gold bullion offerings, as they struggled to meet the increasing public demand for precious metals. By the end of the year the Mint decided to focus production on a single one ounce gold bullion coin, which was subject to rationing at the authorized purchaser level.

The rationing program finally ended in June 2009 and production of other gold bullion coins finally resumed in recent months. Although it seemed like the US Mint was finally catching up with precious metals demand, the latest round of suspensions, sold out coins, and limited availability suggest a recurrence of the supply problems of the past after only a brief reprieve.

Gold & Mount St. Helens

2009-11-30T07:11:00.000-08:00

http://news.goldseek.com/GoldenJackass/1259100000.php

Gold & Mount St. Helens
By: Jim Willie CB, GoldenJackass.com
24 November 2009

Not in the last few years have conditions been aligned for a truly explosive upward move in the gold & silver prices. A confluence of factors simply could not be more bullish, promising, and powerful. The psychology has also been raised in awareness on a global basis, as financial centers, media networks, and common folks have coordinated their recognition of the gold bull. They comprehend perhaps two or three of the main factors why gold is rising, out my stated list in a recent article "13 Reasons For a Major Gold Breakout" in September (CLICK HERE). The trio of fundamentals, psychology, and technical chart constitute the trifecta that will push gold & silver to extreme heights, and crush the silly shorts with their myopic half-baked tactics that are certain to make them roadkill, then someone else's lunch. The factors overlooked by most for the precious metals breakout run pertain to the broken monetary system, the Paradigm Shift away from the USDollar on both financial reserves management and commercial trade settlement, failure of the central bank franchise system, recognition of a criminal syndicate in charge of USGovt financial operations, the Black Hole of severe endless losses by firms taken under the USGovt aegis (AIG, Fannie Mae, and Wall Street firms), the hemorrhage of USGovt deficits, and lastly the dishonor of financial contract law, chronic lapses in financial market integrity, and constant intervention in those financial markets.

FALLACY IN THE DOW STOCK RALLY
The investment community rejoices when the USDollar slides further, since they have learned like a shallow minded Pavlov Dog that stocks gain. One anchor asked on Monday a basic question, "Gee, what happens if the USDollar heads toward zero, but the Dow charges ahead toward 30,000? Where does that leave us?" What a good question! The financial news networks have begun to openly wonder about the Dollar-Stock relationship and its endurance, but not yet what it means. They overlook how the S&P500 has fallen by 80% in the last several years in terms of its gold value. This is a stock bear market fully disguised, made hard to notice since the value of US money is falling fast. The stock market is rising from very easy money. One usage of the free money offered is investment in the US stock indexes. Others are Gold, Crude Oil, German Govt bonds, and commodity funds. in the Dollar Carry Trade, identified by borrowing free money and buying rising assets.

Like Wiley Coyote, a realization will soon come of a position over the canyon without footing for the stock investors. They are not prepared for a Double Dip recession, nor recognition of a recession that never ended. The common consensus belief is that the sharply lower USDollar will revitalize the USEconomy, will give a huge boost to export trade, will prevent the ravages of price deflation, will encourage foreign investment, will revive the labor market, and more baseless analytic rubbish best described as propaganda. Chalk it up to creative rationalizations and fantasy entries to the latest chapter of American Economic Mythology, and endless series of wrongful notions that has gutted the nation, enabled by the big banker parasites. Credit to Darryl Schoon for the fine image of blood sucking and targets, consistent with the Matt Taibbi comparison of Goldman Sachs to a vampire squid that extends its blood funnel into anything smelling like money across the entire planet.

Their reputation is finally seeing a spot of smear. Their plants like Geithner at Treasury Secy as finally suffering some disrespect as anger is shown.

Actually, this misguided belief of perking the USEconomy from a cheaper USDollar is not only horrendously incorrect, but it is backwards. The lower value of the USDollar has numerous extremely damaging effects, will cripple the United States further, and will eventually lead the nation to a place that is best described as a Third World nation. Let's examine each claim, each plank from the positive spin, then dismiss them all.

#1. A cheaper USDollar will give a huge boost to export trade. In normal times, the effect is direct and immediate, provided the USEconomy has a critical mass of an industrial base. The 1980 and 1990 decade sent almost the entire technology manufacturing factory base to Japan and the Pacific Rim. In the years 2000 to 2004, the US corporations invested heavily in China. Recall the 'Low Cost Solutions' that resulted in lost American jobs, burgeoning Chinese trade surpluses, and a climax in tension from a broadening trade war. The trade war was forecasted three years ago here. The USEconomy surely has some export businesses, but nothing to claim as broad. Moreover, the restrictions on computer and telecommunications export remain. The Chinese cannot purchase them, so they steal their designs left unprotected on the internet websites (see Sandia Labs). The above claim (#1) has no basis, as the gain in export business will show good growth, but its base will be too small to provide much significance. From an export trade standpoint, the common consensus belief is that the sharply lower USDollar will revitalize the USEconomy is nonsense.

#2. A cheaper USDollar will prevent the ravages of price deflation. Such a belief requires a shallow broad view with no distinction of various markets at all from a price perspective. The effect so far from the lower US$ has been higher crude oil price, higher industrial metal price, higher sugar price, and high prices for many other commodities. The effect shows up as a higher entire cost structure, enough to cause great strain. The scourge of the USDollar powerful relentless ongoing decline is the effect of commodity costs, something the investment community and bank leadership prefers to avoid in discussions. The above claim (#2) has no basis, as the entire cost structure of the USEconomy is in the process of rising. Notice higher costs with lower wages and shrinking corporate profit margins. These are hallmarks of an inflationary recession, hardly a positive development, and surely not a recovery. From prevented price deflation standpoint, the common consensus belief is that the sharply lower USDollar will revitalize the USEconomy is nonsense.

#3. A cheaper USDollar will encourage foreign investment. In normal times, the effect is direct and immediate, provided the USGovt and state governments create the right environment, and provided foreign corporations trust the skill level of American workers. Neither condition exists. Business regulations and taxes prohibit foreign firms from even considering much investment and expansion onto US shores. The United States continually ranks near the bottom in attractive for business environment in which to invest. As for their observation on American workers, they regard them as hard working but not blessed with sufficient skills or education. Asians have a big advantage on math and science skills. Increasingly, Americans are finding themselves unemployable, or else skilled in areas that serve as extensions to bubble economy businesses like home construction and mortgage finance. A nasty red herring exists on the foreign investment notion. The foreign corporate chieftains sense a looming risk of martial law, growing social chaos, and widening grassroot movements in opposition to the government and bankers. The above claim (#3) has no basis, as almost every single aspect gives off big warning signals or delivers roadblocks. From a foreign investment standpoint, the common consensus belief is that the sharply lower USDollar will revitalize the USEconomy is nonsense.

#4. A cheaper USDollar will revive the labor market. The USGovt and Wall Street each claim that interest rates must remain down since all the excess capacity in the system provides too much slack, thus a dampened price effect. Nowhere is that more clear that with wages, as workers continue to be shed in massive numbers. The ravages of price deflation has a continued effect on the labor market, keep wages down. Thus, the parade of continued home foreclosures. Furthermore, the shrinking profit margins inhibit expansion by US corporations. Just the opposite. They respond by reducing the workforce for the firms. The lack of incremental foreign investment, for reasons described above, also results in less revival of the US labor market. Please show me some big news items of foreign firms setting up shop in the Untied States, with a couple thousand new jobs that provide a nice shot in the arm for the labor market. The above claim (#4) has no basis, as the labor market will stick out as the grand contradiction to any claimed USEconomic recovery. The so-called Jobless Recovery is more like a Job-Loss Recovery. From a revived labor standpoint, the common consensus belief is that the sharply lower USDollar will revitalize the USEconomy is nonsense.

OFFICIAL RESPONSE: MORE DEFICITS, MORE MONETIZATION
The USGovt executive branch, the UDept Treasury ministry, and the USFed central bank are all desperate. The USEconomy has deteriorated to a great extent, and will degrade more. The incoming revenues to the USGovt are way down, another contradiction to recovery claims. Credit growth has gone into reverse. Foreign dependence for credit supply has turned acute. The federal debt limit is soon to be breached. The Obama Admin seems on a mission to force a USTreasury debt explosion and default. Integrity of the Wall Street capital market system had been extremely downgraded. Now comes the reports (none denied by ranking sources) of tungsten gold bars, the climax of national fraud by US bankers. The response on the official government and banker side has been more monetization. Also, no interest rate hike for as far as the eye can see. Today JPMorgan announced a new 162 Euro currency target, and stated its belief of no USFed rate hike until 2012. They should know, since they are the USFed, at least their administrative side for following through on market actions. They openly recognize the Dollar Carry Trade, a surprise even to my eyes.

The USTreasury auctions receive some of the least scrutiny and investigation in memory. The rapid move to Permanent Open Market Action that buys all the official bond dealer inventory renders the process to be indirect delayed monetization. The printing pre$$ payouts for foreign USAgency Mortgage Bonds enables foreign central banks to purchase USTreasurys at auction also renders the process to be indirect immediate monetization. Before long, the entire official auction process will be an exercise in direct recognized open monetization, deemed necessary due to abandonment by foreign creditors and disgust. That will be the turning point for a rapid shocking USDollar decline and the introduction to hyper-inflation within the US shores.

BREAKDOWNS LEAD TO GOLD PRICE ADVANCE
The most recent development is clearly the exposure of the tungsten gold bars. Some extremely naive analysts and editors alike will be the last to know what is happening, as they deny the story. One editor has a military intelligence background, which accounts for myopia. He also shows only disrespect for the Gold Anti-Trust Action committee (GATA). Their charges of USGovt conspiracy to fix and suppress the gold price have been admitted by Greenspan himself. Cannot the naysayers see the pattern of fraudulent money, fraudulent coins (ok, so pre-1964 silver was copper core -- my bad), fraudulent Fannie Mae bonds, fraudulent mortgage backed bonds, fraudulent municipal bonds, counterfeited USTreasury Bonds, naked shorting of bank stocks, flash trading (the Goldman Sachs front running of NYSE), and constant Plunge Protection Team interventions? The natural climax is tungsten bars given a gold plating. Leave following the trails to others, but one could guess they match the narco pathways.

Anyone who steps forward with actual data, evidence, documents, and hard facts worthy of investigation and high level prosecution is subject to being murdered. So the way this plays out is more likely to be a cratering, a dismantling, a breakdown in the gold metals exchange. The weak link, as claimed by both GATA and hard charging analysts like Jim Sinclair with Dan Norcini, is the lack of physical gold. The metals exchanges have been running a criminal shell game for years. They do not require collateral properly placed, like 80% on short sales. In London they are digging from the 50 and 60 year old barrels to produce gold bars for delivery. In London they are hastily seeking gold bars from the Bank of England and European Union central banks in order to avert delivery defaults. The strain was evident last spring when Deutsche Bank was caught without sufficient gold, rescued by the Euro Central Bank in the nick of time. The strain was repeated in early October when London borrowed central bank gold bullion in the nick of time. Word has it that all delivery demands were met, and all were from Asia, predominantly from China. The strain will repeat by the end of this November month. The strain will again reach critical levels in March, and if the system holds together after the upcoming demands for gold delivery are handled, or not managed, whatever, we will see events reaching climax next March and the spring months heading into June.

Review some indirect evidence serving as confirmation of the tungsten gold bar story. This is inductive reasoning, at the basic level. The London and New York metals exchanges cannot complete delivery of any order over one metric tonne without fresh assay reports. Trust has been shattered. This was never required before, but is now. Why is that? Could it be that Hong Kong's revelation of 5600 tungsten bars tungsten bars (fake gold) was true, verified, and spread via a global alert? Yes, clearly! Assayers the world over are unavailable. They are all tied up as bullion bankers, sovereign wealth fund managers, lesser central banks, and individual billionaires are scrambling to verify their gold holdings. The assayers were entirely available two months ago, but not now. Why is that? Could it be that Hong Kong's revelation of 5600 tungsten bars tungsten bars (fake gold) were true, verified, and spread via a global alert? Yes, clearly!

The Canadian Mint has released information that admits to 17.5 thousand troy ounces of gold and other precious metals missing, whose estimated value is $15.3 million. No credible explanation has been offered for the missing inventory. These are not lamps, boxes of paper, crates of machine tools, floor tile, stereo sets, or power tools sitting in inventory. These are gold bars. Or were they tungsten bars? Permit the Jackass to surmise that the Canadian Mint were interrupted in their coin production process. They poured what they thought were gold bars into a cauldron, but since tungsten melts at 8000 degrees, and gold melts at 2200 degrees, the cauldron soup was lumpy with tungsten cheese. Instead of admitting they held and discovered 17.5 thousand ounces of tungsten, sure to rile the Wall Street boys, sure to turn the gold market upside down more than already, sure to invite severe scrutiny to many bankers who already face criticism (but not prosecution) over mortgage bond fraud, THEY JUST SAY IT IS MISSING !!! Just where did it go, Ottawa? Did some high level bankers (surely not Goldman Sachs) borrow it or steal it? Maybe it went to an industrial supplier that specializes in zinc, tin, copper, lead, and tungsten!!! See the National Post article (CLICK HERE). It seems the B.S. story of lost gold invites the least criticism, scrutiny, and follow through, amazingly. Theft and fraud is rampant, and the name of the game. Of course, incompetence, and clumsiness are more acceptable than corruption and collusion.

The end result of all the extra authentication processes, the absence of available assayers. the missing gold at mints, and the scattered reports of tungsten gold that have this week extended to at least on European bank location in addition to Hong Kong, is less actual verifiable gold bullion in the hands of people that trade it. In other words, THE GOLD SHORTAGE IS MORE REVEALED AND EXPOSED. Notice lastly, the no Hong Kong banker denied the story of discovering tungsten bars with gold plating. Instead, the story proliferated to a global examining of gold inventory. Notice also that no Depositor bullion bank invited investigators inside for a closer look at inventory, after doubt and lost confidence within the system occurred. These are all tell-tale coincident signs, indirect evidence in support of the tungsten salted bars and the entire story. One has to be with a military intelligence background not to see it.

GOLD EXPLOSION COMING
Gold continues to log new highs. The market forces are powerful. The corrupt cords are being severed. The bottom of the barrels are being scoured for physical gold. Investors and investment firms want some real assets instead of mountains of paper assets. Paper piles are burning. A gold price explosion is coming. They cannot stop the gold locomotive. Monday this week was gold futures options expiration. The expiry was met the previous Thursday and Friday last week with gold closing at the highs for the day, and on Monday with a 12-15 point upward thrust. Pain is being felt in a big way with the gold cartel from their suppression game that backfires. Those two days ending last week formed daily bullish hammers, very bullish signals, identified by a high open, intraday prices much lower, but with a strong high close. Hey London, Hey New York: Open vise, insert nether stones, squeeze, and invite the dogs to feed off the floor. The pressure is on. The lack of real gold is palpable. the price rises. Heads will soon roll.

Exchange officials of middle rank will be the first led away in handcuffs, not by the FBI, not by the CFTC, but by state authorities and perhaps federal marshalls. The federales are part of the syndicate (lack of) law enforcement. Why middle level guys? Because they will offer evidence and testimony against the targeted higher level officials. Many people like myself wish for a much broader exposure of criminal behavior, some prosecutions, some justice, and an end to the Age of Impunity in the Untied States that comes with the Fascist Business Model. We will find little satisfaction, except for the breakdown of the Gold-Dollar balance beam in progress. The gold & silver prices might be the main satisfaction felt. The USDollar decline might be another satisfaction. Look for strange and misleading inaccurate stories to come from the metals exchanges as they break down. Also look for something to pop up with all those guys from last August who appealed for asylum in Europe, bearing boxes of Wall Street fraud evidence. That is saved for the Hat Trick Letter reports.

Predicting the gold price at this point accurately is difficult. The Powerz are losing control. The price advances are actually occurring in a welcome manner to the Chinese. They are the primary parties in accumulation. They will push the price higher only when gold supply at the current price is no longer available, their new Modus Operandi. A gradual rise in gold price actually works the best to crush the nether stones of the corrupted metals exchanges. Few big corrections are likely to come. The price rise is being managed in much the same way as the suppression was managed. The risk is for an accident that releases control of the gold price. In that case we will see a repeat of the Mt St Helens. A 1300 price is the next target, but it is just a target. It could be easily passed. When it is passed, the next target will be something like 1500 or 2000. The shorts will be crushed, of all types, who get in the way. We are in global redesign and restructure that removes the US & UK players from the helm. They are only left with viruses to distribute after bond fraud and gold counterfeit. The USDollar is slowly suffering a death. Few in the Untied States can recognize it, since they reside inside the Dome of Perception.

Jim Willie CB is a statistical analyst in marketing research and retail forecasting. He holds a PhD in Statistics. His career has stretched over 25 years. He aspires to thrive in the financial editor world, unencumbered by the limitations of economic credentials. Visit his free website to find articles from topflight authors at www.GoldenJackass.com . For personal questions about subscriptions, contact him at JimWillieCB@aol.com

Barrick shuts hedge book as world gold supply runs out

2009-11-30T06:39:00.000-08:00

http://www.telegraph.co.uk/finance/newsbysector/industry/mining/6546579/Barrick-shuts-hedge-book-as-world-gold-supply-runs-out.html

Barrick shuts hedge book as world gold supply runs out
Global gold production is in terminal decline despite record prices and Herculean efforts by mining companies to discover fresh sources of ore in remote spots, according to the world's top producer Barrick Gold.
By Ambrose Evans-Pritchard, International Business Editor
7:20PM GMT 11 Nov 2009

Liquid gold: Gold is poured from the induction kiln Photo: JULIAN SIMMONDS

Aaron Regent, president of the Canadian gold giant, said that global output has been falling by roughly 1m ounces a year since the start of the decade. Total mine supply has dropped by 10pc as ore quality erodes, implying that the roaring bull market of the last eight years may have further to run.

"There is a strong case to be made that we are already at 'peak gold'," he told The Daily Telegraph at the RBC's annual gold conference in London.

"Production peaked around 2000 and it has been in decline ever since, and we forecast that decline to continue. It is increasingly difficult to find ore," he said.

Ore grades have fallen from around 12 grams per tonne in 1950 to nearer 3 grams in the US, Canada, and Australia. South Africa's output has halved since peaking in 1970.

The supply crunch has helped push gold to an all-time high, reaching $1,118 an ounce at one stage yesterday. The key driver over recent days has been the move by India's central bank to soak up half of the gold being sold by the International Monetary Fund. It is the latest sign that the rising powers of Asia and the commodity bloc are growing wary of Western paper money and debt.

China has quietly doubled holdings to 1,054 tonnes and is thought to be adding gradually on price dips, creating a market floor. Gold remains a tiny fraction of its $2.3 trillion in foreign reserves.

Gold exchange-traded funds (ETFs) – dubbed the "People's Central Bank" – have accumulated 1,778 tonnes, making them the fifth biggest holder after the US, Germany, France, and Italy.

Ross Norman, director of theBullionDesk.com, said exploration budgets had tripled since the start of the decade with stubbornly disappointing results so far.

Output fell a further 14pc in South Africa last year as companies were forced to dig ever deeper - at greater cost - to replace depleted reserves, not helped by "social uplift" rules and power cuts. Harmony Gold said yesterday that it may close two more mines over coming months due to poor ore grades.

Mr Norman said the "false mine of central banks" had been the only new source of gold supply this decade as they auction off reserves, but they are switching sides to become net buyers.

Barrick is moving fast to wind down the remaining 3m ounces of its infamous hedge book over the next twelve months, an implicit bet on rising gold prices over time.

Mr Regent said the company had waited too long to ditch the policy, which has made the company enemy number one among 'gold bug' enthusiasts. The hedges oblige Barrick to deliver part of its gold into futures contracts set long ago at levels far below today's spot prices.

The strategy worked well in the falling market of the 1990s, but has cost the company dear in lost profits this decade. "Hindsight is always 20/20," said Mr Regent, who was appointed from the outside earlier this year.

Barrick bit the bullet in the third quarter, taking a $5.7bn charge against earnings on hedge contracts. Liberation is at last in sight. In 2001 the hedge book topped 20m ounces.

Mr Regent said the hedge policy has weighed badly on the share price and irked investors, becoming a bone of contention at every meeting. The financial crisis brought matters to a head as markets fretted about counterparty risk. "It was clear to me that there were a significant number of institutions who wouldn't invest in Barrick because of the hedge book," he said.

Barrick produced 1.9m ounces of gold last quarter, down from 1.95m a year earlier. Costs have been "trending down" to $456 an ounce, though rising energy prices pose a fresh threat. Total reserves are 139m ounces, far ahead of rival Newmont Mining at 86m.

The hedge book venture has not been a happy one, but those who predicted that Barrick would eventually "blow up" on its contracts may owe the company an apology.

Gold: how high can the price go?

2009-11-30T06:36:00.000-08:00

http://www.telegraph.co.uk/finance/personalfinance/investing/gold/6537637/Gold-how-high-can-the-price-go.html

Gold: how high can the price go?
Gold has reached an all-time high, breaking through the $1,100 an ounce barrier on a weaker US dollar and the continued appetite from investors for the precious metal's safe-haven attributes.

Published: 2:51PM GMT 10 Nov 2009

Demand continues to be strong – even Harrods, the famous Knightsbridge store, is getting in on the act by selling gold bars and coins to its upmarket customers.

Gold has returned more than 20pc over the past year but the question remains: how high can the price of gold go?

Here are the thoughts of analysts taken from around the globe.

SUKI COOPER, COMMODITIES ANALYST, BARCLAYS CAPITAL
Ms Cooper said: “We expect prices to maintain their upward momentum through to at least the first half of 2010, where we expect prices to average $1,140 in the second quarter. The unexpected purchase of gold by the Reserve Bank of India has only added to the positive sentiment towards gold. Even though gold's attributes have not changed, we have seen a change in attitude from investors towards gold. From the official sector through to retail investors, there has been a structural shift in the demand side.”

JIM ROGERS, CHAIRMAN OF SINGAPORE-BASED ROGERS HOLDINGS
Mr Rogers argues that gold hasn't begun to peak, adding that it will climb from a nominal record near $1,100 an ounce to $2,000 an ounce in the future. He said: “Just to get back to the old high back in 1980, adjusted for inflation, the price would need to be over $2,000 now. So we’ll certainly get there some time in the next decade.”

LONDON BULLION MARKET ASSOCIATION
A poll of about 370 delegates at the London Bullion Market Association's annual conference predicted that gold would be at $1,181 in 12 months' time. The poll covered 368 traders, analysts, miners and central bankers.

ELLISON CHU, STANDARD BANK ASIA
The Hong Kong based manager of precious metals at the bank expects the price of gold to maintain four-figure levels given the strong demand, particularly from Asia.
"India's purchase [India’s central bank recently bought 200 tonnes of gold] had a psychological impact on investors. They think other central banks will also buy gold for their reserves. Gold will probably hang on to these high levels. We're seeing good seasonal demand ahead of Christmas and the Chinese New Year."

NOURIEL ROUBINI, PROFESSOR OF ECONOMICS AT NEW YORK UNIVERSITY’S STERN SCHOOL OF BUSINESS
In an interview with Hard Assets Investor, Mr Roubini said there were only two scenarios that would see gold go much higher: inflation and Armageddon.
“We don’t have Armageddon, we don’t have inflation, so gold can maybe go slightly higher. But those people who delude themselves that gold can go to $1,500 or $2,000 are just talking nonsense. The fundamentals are not justified, and those people are just talking their books.”

DAVID LEVENSTEIN, INVESTMENT ADVISER
Writing on Mineweb, David Levenstein, a veteran of 29 years in futures, equities, forex and bullion, said gold appeared to be on course for a shift to $1,300 because of the gloomy outlook for the dollar.
"Frankly, I cannot see any bit of news that may suddenly appear that could have a miraculously powerful effect on the value of the dollar," he wrote. "While my experience has taught me that it is very difficult to predict future prices, all the empirical evidence tends to indicate that we can expect much higher prices for gold."

BILL DOWNEY, INVESTOR AND PRICE ANALYST
“Cycles suggest we are nearing a pullback. We have arrived at a key resistance area at a time when key cycles are due. We're modifying key resistance to $1,105-$1,110 followed by $1,132-$1,150. The potential for a high to be established this week and an autumn correction unfolding thereafter has grown significantly. We want to see at least a bit of price weakness first ... but longs [those who hold gold] should be cautious.”

Ten ways to invest in gold

2009-11-30T06:33:00.000-08:00

http://www.telegraph.co.uk/finance/personalfinance/investing/3530663/Ten-ways-to-invest-in-gold.html

Ten ways to invest in gold
Demand for gold is soaring and Citigroup analysts predict the price could break through the $2,000 an ounce barrier.
By Teresa Hunter
Published: 1:33PM GMT 27 Nov 2008

The price of gold itself has fallen, and is now trading in a range around $720 to $750 an ounce, having peaked at more than $1,000 in the summer. Nevertheless, this reflects a dramatic rise from a bottom of $270 in 2001.
However, the gold price has increased only modestly once inflation is taken into account; current prices match those of the late 1980s and early 1990s in real terms. But the gold price story is more complicated, particularly for sterling investors. As it is priced in dollars, it has proved a good hedge against a falling pound, and protected their savings from the currency devaluation.

"For sterling investors, the price remains at an all-time high, because of the slide in the pound," said Sandra Conway of ATS Bullion.

If you want gold that has an intrinsic and potentially rising investment value, your first options are gold bars or coins, which can be bought over the counter at a gold or bullion dealer (such as Baird & Co; www.goldline.co.uk), by post or over the internet. The World Gold Council's investment marketing manager, John Mulligan, said: "Go to Switzerland and you'll find bank vaults full of gold. It is not uncommon. But it can be arranged in the UK too."

Gold is a classic safe-haven asset – hence the pick-up in demand. Here are 10 ways to buy gold.

1. GOLD BARS
Bars come in metric sizes, and are based directly on that day's gold price, plus a premium for manufacture and marketing. The smaller the bar, the bigger the premium. According to ATS, a one-gram bar would cost £24 but has an immediate underlying resale value of only £16.20, giving a markup of 48pc to the retailer.

The 5g bar costs £100, with an underlying gold value of £81, reducing the markup to 23pc. A 1kg bar costing £17,035 has an underlying value of £16,140, making the markup 5pc.

2. SOVEREIGNS
One popular way to own gold is by buying gold coins, with 22-carat gold sovereigns the favourite with British investors. Sovereigns dating from about 1887 and up to 1982 are currently the best bet. Although their face value is only £1, they cost £136 to buy but have an immediate resale value of £118.

By contrast, modern coins dating from 2000 cost more, at around £160, yet their intrinsic value as an investment is the same £118. Coins from before the late Victorian period are even more desirable, but they have much greater rarity value and are therefore more expensive.

3. KRUGERRANDS
Another popular option is to buy South African Krugerrands. The smallest is a 0.1oz coin, which might cost £70 and have a resale value of £50. A 1oz coin costs £567 at the time of writing and has a resale value of £512.

4. EXCHANGE-TRADED FUNDS
Gold ETFs are not technically funds because they follow a single security. ETF gold securities are traded on the London Stock Exchange. They essentially track the gold price and can be traded daily – all you pay is the dealing charge of around 0.4pc. They are also regulated financial products. Visit www.exchangetradedgold.com or www.etfsecurities.com for more information.

Gold ETFs enjoyed a record quarterly inflow of 150 tonnes between July and September. The peak in inflows occurred in late September, triggered by the collapse of Lehman Brothers and a fear of further failures in the banking sector. Net inflows surged by an unprecedented 111 tonnes, equivalent to $7bn, during five consecutive trading days.

5. UNIT TRUSTS AND INVESTMENT TRUSTS
These are few and far between, the most popular being BlackRock Merrill Lynch Gold & General, which invests in the shares of gold mining companies as well as other commodity businesses. Advisers reckon general commodity funds could also do the job for private investors as they dabble in gold-related stocks – JPM Natural Resources and ACDS Australia Natural Resources remain popular. Gold mining equities tend to be more volatile than the gold price.

6. GOLD ACCOUNTS
Gold bullion banks offer two types of gold account – allocated and unallocated. An allocated account is effectively like keeping gold in a safety deposit box and is the most secure form of investment in physical gold. The gold is stored in a vault owned and managed by a recognised bullion dealer or depository.

With an unallocated account, on the other hand, investors do not have specific bars allotted to them. Traditionally, one advantage of unallocated accounts has been the absence of storage or insurance charges, because the bank reserves the right to lease the gold out.

7. GOLD SHARES
You can of course buy individual shares of companies that either trade or mine gold. Evy Hambro, who co-runs the BlackRock Gold & General fund, recently said the discount between the price of gold and that of gold shares was the greatest he had known. Meanwhile, Mark Harris of New Star said gold shares continued to look cheap and remained a decent portfolio diversifier.

London-listed shares include Highland Gold, the London-listed miner partly owned by the Russian billionaire Roman Abramovich, and Peter Hambro Mining, whose share price recently halved.

8. JEWELLERY
While thousands of items of gold jewellery will change hands this Christmas, they are not considered serious investments. Jewellery accounts for more than 60pc of total demand for gold, which was estimated at around 3,547 tonnes in 2007.
India devours 800 tonnes of bullion, more than 30pc of annual global gold mine production, mostly as jewellery. But although over the long term these jewels should hold their value and rise in line with inflation, manufacturing costs and the jewellers' markup mean they would sell for a fraction of the purchase price for the first few years of ownership.

9. GOLD CERTIFICATES
Historically, gold certificates were issued by the US Treasury from the Civil War until 1933. Denominated in dollars, the certificates were used as part of the gold standard and could be exchanged for an equal value of gold.

Nowadays, gold certificates offer investors a method of holding gold without taking physical delivery. Issued by individual banks, particularly in countries such as Germany and Switzerland, they confirm an individual's ownership while the bank holds the metal on the client's behalf.

The investor avoids storage and personal security problems, and gains liquidity by being able to sell portions of the holding by simply telephoning the custodian.

The Perth Mint also runs a certificate programme that is guaranteed by the government of Western Australia and is distributed in a number of countries (www.perthmint.com.au/investment_certificate.aspx).

10. STRUCTURED PRODUCTS
A number of structured products linked to commodities have been launched. They are either baskets of commodities or individual commodities such as sugar, oil, platinum or gold.

Structured products are typically five-year plans that aim to pay you a set return and limit your downside risk. For example, Quantum Asset Management's Protected Gold Portfolio offers a minimum capital return of 100pc at maturity plus 100pc participation in the rise of the underlying assets over the investment period, subject to an overall maximum capital return of 165pc.

Structured products can be complicated so ensure you read the small print, or preferably get expert advice.

Royal Mint's gold coin production more than quadruples

2009-11-30T06:31:00.000-08:00

http://www.telegraph.co.uk/finance/personalfinance/investing/gold/6611871/Royal-Mints-gold-coin-production-more-than-quadruples.html

Royal Mint's gold coin production more than quadruples
Britain's Royal Mint more than quadrupled its production of gold coins last quarter as uncertainty about the economic outlook fuels demand.
Published: 6:38AM GMT 20 Nov 2009

Production at the mint climbed to 32,735.8 ounces in the third quarter from 7,500.2 ounces a year in the third quarter of 2008, when the banking crisis was already driving up demand. In the first nine months of the year production tripled to 100,391 ounces, according to data secured by Bloomberg News under a Freedom of Information Act request.
Gold prices look poised for a ninth straight year of gains as fears over whether major economies are facing inflation or deflation helps drive demand for an investment that is typically seen as safe haven. Prices are already up almost 30pc this year and yesterday hit a record $1,150 an ounce.

The appetite for gold coins is not confined to Britain. The US Mint has seen sales of its Eagle gold coins more than double to 954,000 ounces in the first nine months of the year.
"Gold remains the critical investment for owners of capital who want to protect their wealth and preserve their purchasing power," said Christopher Wood, an analyst at CLSA.
The market has also been buoyed as a growing number of central banks pile money into the metal and move out of currencies. India, Sri Lank and Mauritius have all made purchases in recent weeks.

Is $6,300 fair value for gold?

2009-11-30T06:28:00.000-08:00

http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100002059/is-6300-fair-value-for-gold/

Is $6,300 fair value for gold?
By Ambrose Evans-Pritchard Economics
November 19th, 2009

The last parabolic spike in gold took off when central banks joined the fray in the 1970s, hoarding bullion with the same enthusiasm as gold bugs.

Dylan Grice from Société Générale says it smells much the same today.

He sees an eery similarity between the decision of India’s central bank to buy half the IMF’s entire sale of gold, and the move by France’s central bank to start converting dollars into gold in 1965 — which was, of course, the start of the slippery slope leading to the collapse of Bretton Woods and the closure of the US gold window under Nixon.

In the gold mania that followed, the price rose to levels that matched the US dollar monetary base (it reached 140pc at the peak). If that were to occur today after Ben Bernanke’s go at the printing press, gold would have to reach $6,300 an ounce.

The US owns 263m ounces of gold while the Fed’s monetary base is $1.7 trillion. Simple equation.

Gold has had its ups and downs, of course. It is trading today at roughly the same real price as in the mid-13th Century — when an ounce bought a light suit of chain mail.

It doubled in the late Medieval bubble, before crashing 90pc over the next 500 years after the Spanish gold discoveries by Cortes and Pizarro in the New World, and then the finds in California, Australia, and South Africa — bottoming around 1930.

“Gold isn’t intrinsically safer than any other asset. There is nothing mystical about it either,” said Mr Grice.

However, precisely because gold is almost useless, it makes the perfect currency, and that is the role it is playing right now as flight from fiat paper leads to fresh records each day ($1150 yesterday).

Almost all western governments are insolvent. The total net liabilities of the US and France are both over 500pc of GDP. The UK and Germany are over 400pc.

We are bust. To make matters worse — says Mr Grice — central bank credibility has been “permanently ruptured” by their collective failure to see the 2008 crash coming. (He is too polite: they caused the crisis by holding real rates too low for a decade, creating a debt bubble).

Given that central bankers have been exposed as mortals/charlatans (ie pretending to command an exact science, when economics is merely a descriptive branch of anthropology), who can have much faith that they will manage the exit from emergency stimulus with skill?

Markets fear that central bankers will try to satisfy political masters by inflating away our debt. (Here too, I have my doubts: my concern is that they do not yet understand the deflationary dynamic underway, and will stay too tight, for too long, until we are in the Japanese abyss. Look at the 7pc annualized contraction of the M3 money supply {not the same thing as the monetary base, at all} in the US over the last three months, which Bernanke refuses to look at because he regards M3 as a barbarous Friedmanite relic.)

Mr Grice’s method is an odd way to calculate fair value of gold, but as good as any in a mania — and certainly no worse than ARPU ratios and “market cap to clicks” in the dotcom bubble. So perhaps gold is cheap.

Personally, I take no view on this. As a contrarian, I never like an asset that is in fashion. I loved gold at $252 eight years ago.

The higher it goes, the less I love it.

Now, what asset today is as underpriced relative to the rest of the market as gold was in the depths of bear market in 2001?

The Harare stock exchange looks a good place to start.

Any other thoughts?

Gold Krugerrands Run Out

2009-11-30T06:27:00.000-08:00

http://www.numismaster.com/ta/numis/Article.jsp?ad=article&ArticleId=8590

Gold Krugerrands Run Out
By Patrick A. Heller
November 23, 2009

For some time, I have been warning that apparently plentiful supplies of gold and silver bullion-priced coins and ingots could quickly evaporate. Last Thursday we saw the first signs of a looming shortage of physical metals when just about all U.S. bullion wholesalers were unable to accept orders for the South Africa Krugerrand. One primary distributor said they expected coins in a few weeks, which I think means that they are waiting for a shipment of freshly minted coins from the South Africa Mint. My own company had to discontinue accepting new orders until we could lock in a supply.

Tens of millions of Krugerrands have been struck since they were introduced in 1967. They are not rare. If demand for physical gold is so strong (and the World Gold Council last week reported that global third quarter demand was 15 percent higher than the second quarter) that they are no longer available, we could quickly see a domino effect where other gold and silver bullion-priced products also become sold out.

We may see some temporary price dips this week as the gold and silver options expire. However, I fear that there is little time to lock in physical precious metals at reasonable premiums for quick delivery.

But this is short-term news. There is also a longer term view to consider.

Periodically, I have discussed reasons for owning gold that have nothing to do with direct consideration of whether prices are likely to rise in the future.

This week at Thanksgiving I will include owning gold and silver as one of my blessings. After I bought both metals in the 1970s, it then enabled me to purchase a home in 1980 for a much lower cost than if I had not owned them.

In more recent years, owning precious metals has helped me survive some of the ravages of the falling values of paper assets like stocks and bonds and the U.S. dollar.

As I reflected on the blessing of owning gold and silver, it occurred to me that it has also better enabled me to protect and care for my children.

Twelve years ago, the financial calamities in the Far East were so devastating in Indonesia that those who did not own gold were wiped out financially. Those who owned gold saw little impact on their standard of living.

There are hundreds of thousands of Southeast Asian refugees in the United States today who survived because they owned gold to get them away from the governments that killed so many of their compatriots. Owning gold definitely helped them provide a better life for their children.

After all the economic trials and tribulations of the past 30 months, it is not too difficult to imagine a world where U.S. dollars finally fall to the intrinsic value of the paper and ink used to produce them. In such a circumstance, all the dollars in your wallet, your bank accounts, your credit and debit card limits, and the like could become useless in providing for your children.

There are a large number of potential gold buyers who have not yet felt the urgency to make their first purchase. Maybe it just doesn’t seem that important to you. If it isn’t, then think about any children or grandchildren you may have. Would you buy gold if it had the potential to someday improve your ability to care for their health and welfare?

If you don’t yet own gold (or silver), then do it now. If not for you, then do it for the children.

Gold Sets Record as Dollar Drops, IMF May Sell More to India

2009-11-30T06:25:00.000-08:00

http://www.bloomberg.com/apps/news?pid=20601087&sid=aje39bpey_hw

Gold Sets Record as Dollar Drops, IMF May Sell More to India
By Nicholas Larkin and Halia Pavliva

Nov. 25 2009 (Bloomberg) -- Gold climbed to the highest price ever, capping the longest rally in 27 years, as the dollar’s slump deepened and on a report that India’s central bank may add to last month’s 200 metric-ton purchase.

Gold reached a record $1,189 an ounce and has rallied 13 percent since Nov. 2, after India said it bought bullion from the International Monetary Fund. The country, the world’s largest gold consumer, may buy more from the IMF, the Financial Chronicle reported. U.S. Dollar Index, a six-currency gauge of the greenback’s strength, fell to a 15-month low.

“There is a lot of central-bank buying, hedge-fund buying and gold is obviously getting to $1,200 an ounce before the end of the year,” David Lee, a trader at Heraeus Precious Metals Management in New York, said in a telephone interview. The metal has climbed 34 percent this year, heading for the sharpest annual increase since 1979.

Gold futures for February delivery climbed $21.20, or 1.8 percent, to $1,188.60 on the New York Mercantile Exchange’s Comex division. Up for a ninth straight session, the most-active contract’s rally is the longest since August 1982. The metal has climbed 14.1 percent this month, heading for the biggest monthly gain since September 1999.

“Funds and central banks around the world are nervous about the future of the U.S. dollar and the world economy, and that’s why they are buying gold,” Lee said by e-mail. “We’ve reached ‘irrational-exuberance’ levels on many commodities,” including gold and copper, he said.

One-Way Trade

“The gold trade is as crowded as a Tokyo subway car at rush hour,” Jon Nadler, a Kitco Inc. senior analyst in Montreal, said by e-mail. “This has been a one-way, dollar- carry-fueled street since Sept. 1, and it has seen the market become decoupled from anything resembling its fundamentals -- kind of like oil became last year.”

Bullion typically moves inversely to the U.S. currency. The dollar index slid as much as 0.9 percent today after Federal Reserve officials described this year’s decline as “orderly.”

“We expect gold to continue to break through new highs” through this year, Scott Licamele, the director of emerging- markets research at Red Star Asset Management, said by e-mail. “The weak-dollar trend will continue as dollar-debasement fears persist.”

In London, gold for immediate delivery rose $17.42, or 1.5 percent, to $1,186.82 an ounce at 7:17 p.m. local time after touching a record of $1,187.38.

‘Going Ballistic’

“Gold is in uncharted territory as it continues to go ballistic,” Ralph Preston, a Heritage West Futures Inc. analyst in San Diego, said by e-mail.

“With today’s push over Monday’s high, look for residual momentum to carry prices to $1,200 an ounce before month’s end, which represents the next psychological stop on this runaway bull train,” Preston said. “I don’t see a bubble. I see a changing world order, and gold is a reflection of that change.”

The central banks of Russia and Sri Lanka have acquired gold recently, prompting analysts at Bank of America Merrill Lynch, Societe Generale and Barclays Capital to forecast more such purchases. Governments are the biggest bullion holders.

“Actions from central banks are very important at the moment,” said Eugen Weinberg, an analyst at Commerzbank AG. “The purchase from India was like a seal of prices above $1,000 an ounce. Also, other central banks are buying gold.”

Mauritius bought 2 tons of gold from the IMF last month for $71.7 million after India’s $6.7 billion purchase. Reserve Bank of India Governor Duvvuri Subbarao declined to comment on yesterday’s Financial Chronicle report, which didn’t say where it got the information.

More to Sell

The IMF, which set out two months ago to dispose of one- eighth of its gold reserves, still has more than 200 tons to sell. It will do so on a “first-come, first-served” basis, Andrew Tweedie, the head of the fund’s finance department, said in a Nov. 20 interview.

“Despite the run up we have seen in gold equities, we still see value in select miners that will outgrow their peer group, either organically or through acquisitions,” Licamele said. “Polyus Gold in Russia is a good example of this.”

The rally has pushed the 14-day relative strength index for futures above the level of 70 viewed by some investors and analysts who follow technical charts as a sign that prices may soon fall. Today’s reading topped 80.

“Technically, gold remains overbought,” Walter de Wet, a London-based Standard Bank Ltd. analyst, said today in a report. “We have seen some scrap metal coming to the market at current levels, but still not enough to offset buying.”

Among metals traded in New York, silver futures for March delivery gained 30.6 cents, or 1.7 percent, to $18.80 an ounce. Platinum for January delivery climbed $35.70, or 2.5 percent, to $1,479.50 an ounce, after touching a 14-month high of $1,482. March palladium rose $2.05, or 0.6 percent, to $372.85 an ounce.

To contact the reporters on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net; Halia Pavliva in Kiev at hpavliva@bloomberg.net.

Gold Market Breakdown

2009-11-30T06:11:00.000-08:00

Gold Market Breakdown

Decarbonnel highlights a gold market breakdown at the metals exchanges. His work is comprehensive, and serves as an excellent summary update on the current situation.

November 19, 2009
Jim Willie, The Golden Jackass

The rise in gold pre-sages a currency collapse, led by the USDollar. Gold vaults at commodity exchanges in New York and especially London are being drained by delivery demands. Gold demand is skyrocketing, as distrust for the USDollar is broadening and revolt against the US$ is deepening. The quintessential finance war is between the United States and China, with the battlefield being the US$ and Gold. The race over the $1000 price level came in the face of mammoth shorting by the same Usual Suspects on Wall Street, which do so with paper, but without the required collateral. The gold market is poised for a surprise upward move from a basic broken condition, as the Powerz are losing control. It would be a joy to watch except for the extreme hardship due to come to the betrayed American people.

$$$ THE BIGGEST GOLD CRIME STORY OF THE CENTURY MIGHT BE SOON COMING TO FULL LIGHT. EVIDENCE IS BEING ACCUMULATING THAT THE CLINTON ADMIN WITH RUBIN AT US DEPT TREASURY REPLACED PERHAPS THE ENTIRE CONTENTS OF THE FORT KNOX GOLD WITH TUNGSTEN BARS PLATED BY GOLD. THE SALTED GOLD BARS ARE FASTING BECOMING A GLOBAL CRIME ISSUE. HONG KONG DISCOVERED THEM, AND NOW ASSAYERS ARE TRYING TO AUTHENTICATE MOST OF THE GLOBAL GOLD HELD IN BANKS. ENTIRE NATIONS ARE AT RISK. BEFORE LONG THE USGOVT COULD BE DECLARED A ROGUE NATION INTERNATIONALLY. $$$

Evidence is being gathered by perhaps a dozen key gold traders with diverse connections to the gold industry. They tie the delivery systems, the authentication processes, the assayers, record keeping, big financial firms, and trading platforms. Evidence mounts that as many as 1.5 million 400-oz gold bars were replaced at Fort Knox during the Clinton Admin with tungsten bars covered with a thin gold plate. This was a complex metallurgical feat, from what is told. The first 'salted bars' were discovered in Hong Kong a month ago, reported by the Hat Trick Letter. Since that time, tens of thousands of bars have been examined, usually using four test holes drilled for direct sampling. Other non-invasive methods are being used as well, such as electro-magnetic tests to detect the actual lattice structure of the metal to distinguish gold from other substitutes. Word came this week that almost every available assayer in the world is currently tied up, charged with proving the authenticity of gold bars worldwide, right now! Rob Kirby suspects that the Street Tracks GLD exchange traded fund might be loaded with such salted bars. It is a perfect destination for them, since the Wall Street syndicate prevents any audit. The total value of gold removed within the plot was worth over $500 billion. So where are the real gold bars stored? My guess is the same location where the Madoff money is secretly held.

My view is the story is not only credible, but it is the climax to the US financial collapse. In time the United States will be isolated, declared a Rogue Nation, unable to fund its debt except with monetization, whose leaders and former leaders face international prosecution. The resulting inflation will undermine the US Dollar to the point that it will not be accepted. A USTreasury default will be forced, all in time. To be sure, some demand for gold might be frozen into inaction obviously, as customers would fear owning fake gold bars. However, the significantly greater effect is that sellers of gold will scramble to purchase real gold bars, so as to avoid fraud charges, criminal prosecution, and jail time. They will be motivated to repair the fraudulent transaction with full expedience. The replacement effect will cause an extraordinarily huge demand. Only at that time, will the risk of exposing the stolen gold come, as the thieves will want to cash out on their crime, at least partially. The removal and illegal swap of gold has precedent. In the 1960 decade, around 1968, President Lyndon Johnson ordered the removal of 7000 of the 8000 tons of gold from Fort Knox, and had it sent to England. The motive was to support the gold price at the time. Just a few years later, the US under President Nixon abandoned the US$ Gold Standard, as dictated by the Bretton Woods Accord. The gold was replaced during the Johnson Admin in Fort Knox by lead bars plated by gold. A contact of mine was in the USMilitary Police at the time. He reported long caravans exiting Fort Knox for weeks at a time, but the details of shipments were not known to the guards, only their duties.

For some excellent forensic financial analysis on the fake gold project, called Operation Grand Slam, see Rob Kirby's article. It is entitled "On Doing God A New Take On Operation Grand Slam With A Tungsten Twist HERE), dated 12 November 2009. $$$ GOLD MARKET BREAKDOWN IS WITHIN VIEW. LONDON GOLD IS BEING DRAINED BY THE CHINESE. A DISMANTLE OF THE CRIMINAL APPARATUS IS THEIR GOAL. UPON FULL BREAKDOWN, THE GOLD PRICE WILL BE RELEASED FROM PAPER TENTACLES AND RISE SHARPLY. $$$

Pressures mounted in early October at the London metals exchange as gold contract holders demanded delivery of gold. My source tells me that the parties demanding gold were almost exclusively Chinese. It is mostly private billionaires. Their stated motive was to diversify out of US$-based assets. Their rumored motive was to ruin the exchange, expose the chronic fraud linked to government ministries, and force the USDollar to fight in the open to demonstrate value or lack of value. The source said the next round of gold contract delivery pressure comes in late November, then again in March 2010, and finally in June 2010. He said the gold is gradually being drained in London, and that all demands for gold delivery were met in October, using legal force, the courts, and powerful attorneys. Not a single gold contract was settled for cash with a 25% dividend bribe. He concluded that the financial system will be broken at the gold-USDollar cross beam. He openly stated that he could not conceive of the system holding together past June of next year, and a severe test is likely in March 2010. He said with sly tone, "There is a saying: Watch out or you become shit before your own shovel. That is what is happening to the BOYZ right now. The people in the driver seat of the bulldozer have clear instructions what to do in the gold market." When the breakdown comes, it will be next to impossible to trade in USDollars, to settle commerce in USDollars, to finance the USTreasurys, to supply the USEconomy with credit, and to maintain the US banking system. The banks in the United States will then shut down in all likelihood.

My view is that a battle royal is being played out with gross global pressures, between the old broken insolvent corrupted powers of the West versus the new wealthy ambitious powers of the East, led by China. The future chapters will possibly involve the Intl Court in The Hague for prosecutions against the Wall Street firms and former USTreasury officials. It will possibly involve a wave of murders from the middle levels, working up, since the guilty parties operate with impunity and government protection. It will surely involve relentless attacks on COMEX and London CME for gold deliveries, where collateral requirements are not enfoced. The practice is known as naked shorting, illegal. It will probably involve the isolation of the United States, with full recognition of a crime syndicate lodged within its government ministries and capital markets. These are truly incredible times.

South African gold on final deathwatch

2009-11-29T17:22:00.000-08:00

http://www.moneyweb.co.za/mw/view/mw/en/page292523?oid=330911&sn=2009%20Detail&pid=292518

Barry Sergeant
16 November 2009
South African gold on final deathwatch

JOHANNESBURG - The apparent bottom line in a paper published in the South African Journal of Science is that South Africa's gold industry is on final deathwatch, despite claims of massive existing below-ground reserves. Chris Hartnady, research and technical director of Cape Town earth sciences consultancy Umvoto Africa, has found that South Africa's Witwatersrand goldfields are around 95% exhausted, and anticipates that production rates should fall permanently below 100 tonnes a year within the coming decade.

Gold production from the Witwatersrand, the biggest known gold field in the world, peaked at around 1 000 tonnes in 1970 and has declined ever since. Hartnady says that while initially (1970-1975) the decline was "quite precipitous", it has been interrupted by only short periods of slight trend reversal (1982-1984 and 1992-1993).

Leon Esterhuizen, a London-based specialist analyst at RBC Capital Markets, has reacted to the research by saying that "South African gold is dying -- this is not new news", but adds "that it may be dying faster than we currently believe is novel". On the levels of reserves, Hartnady finds that the South African "residual gold reserve" after production through 2007 is only 2 948 tonnes, a little less than three times the 1970 production figure, and much less than 10% of the officially cited reserve.

The country's gold reserves are less than half of the current United States Geological Survey (USGS) estimate of 6 000 tonnes, and the country is not first, but fourth in world rankings, after Australia (5 000 tonnes), Peru (3 500 tonnes) and Russia (3 000 tonnes), Hartnady's research shows. The USGS currently cites South Africa's gold reserves at around 6 000 tonnes, while SA claims a 36 000 tonnes reserve base figure (or about 40% of the global total). Hartnady's findings are based on Chamber of Mines figures and mathematical modelling pioneered by the distinguished American geologist M King Hubbert.

Esterhuizen comments that "most recent indications from Harmony (even with gold bullion at new dollar records over $1 100/oz) is that its old shafts - effectively the Free State gold field - are dying. DRDGold has got Blyvooruitzicht on life support and is trying to get permission to keep the plug in for a little bit longer (with everything around Blyvooruitzicht now having been shut down), while Pamodzi Gold's demise and Simmer & Jack's failure at Buffelsfontein just proves the point -- all of this, at record gold prices in rand terms".

Analysts have also expressed surprise, if not amazement, about recent comments from AngloGold Ashanti CEO Mark Cutifani to the effect that its South African operations will be restructured. How is it, analysts ask, that "the highest margin operating gold assets in South Africa are . . . being re-structured ?"

A growing number of sceptics are also asking whether Gold Fields's developing South Deep operation - which it bought in 2007 for $3bn - will truly ever be able to make money. It is already evident that it will probably never deliver a real return on the capital that it took to bring it to life, says Esterhuizen. He also notes particular current promises by both Gold Fields and Harmony of growth from the South African base over the next three years.

Hartnady's prognosis is pretty grim: "Given the energy and environmental problems associated with ongoing groundwater control, water-resource contamination by acid mine drainage, and the possibility of widespread mercury and other factors of pollution caused by illicit underground ore-processing by the zama-zamas (illegal miners), the glory days of South African gold mining appear to have arrived finally at an ignominious end.

"There can be no further illusions, maintained by unrealistic expectation of a future fortune, about the seriousness of the present situation. In their various possible forms, the slow-onset disasters of environmental degradation associated with the death-throes of a formerly illustrious industry now pose a serious threat, and may ultimately cost far more than the net present value of some 3 000 tonnes of gold".

Esterhuizen mentions a number of other challenges faced by South African gold diggers: royalties (a new thing), zooming electricity charges, BEE (black economic empowerment) burdens, safety shutdowns, "massive security costs", and ever-present currency exchange control. In these areas, Esterhuizen argues that "government may achieve a ‘small' miracle or, more likely, simply hasten the end".

Esterhuizen says that "a small opportunity may be the possible stronger future uranium market- effectively reducing gold costs by obtaining revenue from by-products". This is already happening at a number of gold mines where uranium is also produced. Certain closed shafts known to hold good quantities of uranium are also being investigated for possible recommissioning.

Slide Show - The World's Biggest Gold Reserves

2009-11-28T13:20:00.000-08:00

Check it out at - http://www.cnbc.com/id/33242464

Missing Gold Never Left the Mint

2009-11-28T05:36:00.000-08:00

http://www.theglobeandmail.com/news/national/missing-gold-never-left-the-mint/article1379572/

Missing Gold Never Left the Mint
Daniel Leblanc
The Globe and Mail
Fri, 27 Nov 2009 09:06 EST

RCMP say an accounting error, not a heist, is responsible for the disappearance of 17,500 ounces - the equivalent of 41 bars worth $15-million

It was the mystery of the missing gold - some $15-million worth - and the Mounties were on the case. They descended on the Royal Canadian Mint, seeking a culprit in the touchy tale of 17,500 ounces somehow vanishing from the Crown corporation that refines the stuff.

This week, the RCMP rendered its verdict: No heist. In fact, say third-party experts who also snooped around within the Mint's fortified walls, the explanation is more banal, if no less bewildering: accounting errors and processing losses - gold disappearing on the books and in the chlorination baths.

Some of it may even be recoverable.

That would be good news for the Mint, which faced the humiliation this spring of searching for the equivalent of 41 bars of gold, before calling in police to see if brazen criminals had been at play.

The Harper government is expected in coming weeks to announce the results of recent accounting and technical reports by the third-party experts, after the Office of the Auditor-General approves the Mint's long-delayed 2008 financial statements.

But the broad lines of the reports are already circulating within government circles, with more precise details to be made public in mid-December.

"The Mint has put forth an explanation for where [the largest portion of] the metal is," a government official said yesterday. "It will come from a few different places, some accounting and some processing."

Accounting problems refer to mistakes in the formulas used to measure how much gold enters the Mint, in varying levels of purity, and how much goes out after being refined.

Government officials and experts added that some of the gold was also lost in the refining process, and there were hopes it could be recovered.

At least one company quietly approached the Mint this summer, stating that the chlorination process used at the Ottawa plant is outdated and offering its expertise to get back some of the precious metal.

Given that recent Mint accounting review went back to 2005, there are questions whether the amount of lost gold might be even higher.

Gold Sets Record as Dollar Drops, IMF May Sell More to India

2009-11-26T14:20:00.000-08:00

http://www.bloomberg.com/apps/news?pid=20601081&sid=aLrknf1puOXI

Gold Sets Record as Dollar Drops, IMF May Sell More to India
Nicholas Larkin and Halia Pavliva
Bloomberg
Wed, 25 Nov 2009 10:09 CST

Gold climbed to the highest price ever, capping the longest rally in 27 years, as the dollar's slump deepened and on a report that India's central bank may add to last month's 200 metric-ton purchase.

Gold reached a record $1,189 an ounce and has rallied 13 percent since Nov. 2, after India said it bought bullion from the International Monetary Fund. The country, the world's largest gold consumer, may buy more from the IMF, the Financial Chronicle reported. U.S. Dollar Index, a six-currency gauge of the greenback's strength, fell to a 15-month low.

"There is a lot of central-bank buying, hedge-fund buying and gold is obviously getting to $1,200 an ounce before the end of the year," David Lee, a trader at Heraeus Precious Metals Management in New York, said in a telephone interview. The metal has climbed 34 percent this year, heading for the sharpest annual increase since 1979.

Gold futures for February delivery climbed $21.20, or 1.8 percent, to $1,188.60 on the New York Mercantile Exchange's Comex division. Up for a ninth straight session, the most-active contract's rally is the longest since August 1982. The metal has climbed 14.1 percent this month, heading for the biggest monthly gain since September 1999.

"Funds and central banks around the world are nervous about the future of the U.S. dollar and the world economy, and that's why they are buying gold," Lee said by e-mail. "We've reached 'irrational-exuberance' levels on many commodities," including gold and copper, he said.

One-Way Trade

"The gold trade is as crowded as a Tokyo subway car at rush hour," Jon Nadler, a Kitco Inc. senior analyst in Montreal, said by e-mail. "This has been a one-way, dollar- carry-fueled street since Sept. 1, and it has seen the market become decoupled from anything resembling its fundamentals -- kind of like oil became last year."

Bullion typically moves inversely to the U.S. currency. The dollar index slid as much as 0.9 percent today after Federal Reserve officials described this year's decline as "orderly."

"We expect gold to continue to break through new highs" through this year, Scott Licamele, the director of emerging- markets research at Red Star Asset Management, said by e-mail. "The weak-dollar trend will continue as dollar-debasement fears persist."

In London, gold for immediate delivery rose $17.42, or 1.5 percent, to $1,186.82 an ounce at 7:17 p.m. local time after touching a record of $1,187.38.

'Going Ballistic'

"Gold is in uncharted territory as it continues to go ballistic," Ralph Preston, a Heritage West Futures Inc. analyst in San Diego, said by e-mail.

"With today's push over Monday's high, look for residual momentum to carry prices to $1,200 an ounce before month's end, which represents the next psychological stop on this runaway bull train," Preston said. "I don't see a bubble. I see a changing world order, and gold is a reflection of that change."

The central banks of Russia and Sri Lanka have acquired gold recently, prompting analysts at Bank of America Merrill Lynch, Societe Generale and Barclays Capital to forecast more such purchases. Governments are the biggest bullion holders.

"Actions from central banks are very important at the moment," said Eugen Weinberg, an analyst at Commerzbank AG. "The purchase from India was like a seal of prices above $1,000 an ounce. Also, other central banks are buying gold."

Mauritius bought 2 tons of gold from the IMF last month for $71.7 million after India's $6.7 billion purchase. Reserve Bank of India Governor Duvvuri Subbarao declined to comment on yesterday's Financial Chronicle report, which didn't say where it got the information.

More to Sell

The IMF, which set out two months ago to dispose of one- eighth of its gold reserves, still has more than 200 tons to sell. It will do so on a "first-come, first-served" basis, Andrew Tweedie, the head of the fund's finance department, said in a Nov. 20 interview.

"Despite the run up we have seen in gold equities, we still see value in select miners that will outgrow their peer group, either organically or through acquisitions," Licamele said. "Polyus Gold in Russia is a good example of this."

The rally has pushed the 14-day relative strength index for futures above the level of 70 viewed by some investors and analysts who follow technical charts as a sign that prices may soon fall. Today's reading topped 80.

"Technically, gold remains overbought," Walter de Wet, a London-based Standard Bank Ltd. analyst, said today in a report. "We have seen some scrap metal coming to the market at current levels, but still not enough to offset buying."

Among metals traded in New York, silver futures for March delivery gained 30.6 cents, or 1.7 percent, to $18.80 an ounce. Platinum for January delivery climbed $35.70, or 2.5 percent, to $1,479.50 an ounce, after touching a 14-month high of $1,482. March palladium rose $2.05, or 0.6 percent, to $372.85 an ounce.

Black Friday surprise: gold price could cause sticker shock

2009-11-25T10:11:00.000-08:00

http://features.csmonitor.com/economyrebuild/2009/11/24/black-friday-surprise-gold-price-could-cause-sticker-shock/

Black Friday surprise: gold price could cause sticker shock
The gold price is hitting record highs almost every day, reaching $1,174 an ounce Tuesday morning. A gold chain that cost $300 five years ago could go for $900 on Black Friday.
By Ron Scherer
November 24, 2009 edition
NEW YORK

When the wise men visited baby Jesus, they brought gifts: gold, frankincense, and myrrh. Today, they might have held off on the gold, because gold prices have hit record highs almost every day. On Tuesday morning, it reached $1,174 per ounce.

Indeed, lots of Americans may be in for some sticker shock if they’re buying jewelry as holiday gifts. The price of some bling has doubled so far this year. Couples who are making the trip to the altar will find that even a simple gold wedding band costs about 20 percent more than a year ago. As for gold watches – you might forget about it.

The sticker shock hit Dallas resident Victoria Snee last weekend when she was shopping for rings, bracelets, and necklaces at an outlet store. “I was stunned how expensive the pieces were,” says Ms. Snee, a radio co-host and personality. “I was familiar with some of the jewelry and knew the ballpark price, and they are not the same price anymore.”

The cost has been a turnoff to many consumers. Global demand for jewelry is down 30 percent compared with a year ago, according to a recent report from the World Gold Council, which promotes the metal.

A key reason for the rising price of gold, say gold analysts, is the falling US dollar, which is off 12.2 percent against major foreign currencies since March. The dollar was stronger during the financial crisis of the past two years as investors moved into US Treasury bills.

“One of the explanations is that investors are unwinding those purchases and going back into riskier assets,” says Axel Merk, president of the Merk Mutual Funds in Palo Alto, Calif., which invests in strong currencies and gold.

“But some believe there is going to be more inflation in the US than other countries,” Mr. Merk adds. “And buying gold is seen as a hedge against that.”

The price of gold has gone from $725 an ounce a year ago to $1,165 an ounce on Monday.

Jeweler Laurent Landau of Diamond Ideals in New York estimates that simple gold chains he used to buy for $50 now cost him closer to $100. A basic gold wedding band that he sold for $262 last year is now retailing for $300.

“Overall, the consumers are the losers here,” Mr. Landau says.

Well, not everyone. With the price so high, Americans have been scouring their dresser drawers and jewelry boxes for pieces they no longer use. William Oyster, president of the Dallas Gold & Silver Exchange, estimates that he is buying $500,000 to $1 million a month of the metal.

“With the economy being what it is and with all the publicity, people have something they can turn into cash,” says Mr. Oyster, whose company has been in business since 1988.

For example, he will buy back for $600 a gold chain that he sold five years ago for $300. “And it will cost $900” for a consumer to buy the chain, he says.

The industry is trying hard to keep prices as stable as possible, Landau says. “They are cutting profit margins,” he says.

But even that may not be enough to entice consumers in a weak economy. “Jewelry is a luxury,” he notes.

It may be a luxury, but for some people this holiday season, it’s a luxury that’s painful not to have. “Women love jewelry,” says Snee in Dallas. “This is not a good thing for us.”

Correction to My Imaginary Gold Article

2009-11-21T15:37:00.000-08:00

From: Ken Wrenn
To: greathierophant@yahoo.com
Sent: Thu, 19 November, 2009 0:07:40
Subject: correction to gold vs tungsten

I read your article about tungsten being similar to gold and thought I would point something out to you:

You said, "Kirby reports about irregular gold settlements which occurred in London during the first week of October, 2009.

Apparently, the ‘gold bars' were partially made of gold.

It's an old scam that's been around for centuries. In this case,the centers of the bars were gutted and filled with tungsten, a very heavy, relatively cheap industrial metal that is about 9% lighter than gold.

Some myths say that tungsten and gold weigh the same, but they don't. The atomic number for gold is 196.9. and the atomic number of tungsten is 183.8.

Fortunately for gold fraudsters, tungsten is as dense as gold, making it difficult to detect the slight weight difference. This weight difference, however, should have been noticed, as gold bars are supposed to be weighedwhenever they are moved to a new location."

However gold and tungsten do weigh very closely the same tungsten weighs or has a density of 19.25 grams per cubic centimeter gold weighs or has a density of 19.30 grams per cubic centimeter

So tungsten weighs only 0.26% less than gold and not 9% as you stated.

A counterfeit gold bar made of primarily tungsten, but the same size as gold would weigh 1.036 troy oz less.

So the tungsten salted bar would need to be slighlty larger than a pure gold bar.

If two materials have the same density and volume then they weigh the same weight.

If two materials have the same weight and volume then they have the same density.

Why Gold Will Reach a Record $2,000 in 2010

2009-11-21T02:05:00.000-08:00

http://www.moneymorning.com/2009/11/19/gold-prices-8/

Jason Simpkins
MoneyMorning.com
Fri, 20 Nov 2009 19:29 EST

Gold has surged 60% in the past 12 months and it's not letting up. The "yellow metal" is continuing that scorching surge into the last part of the year, establishing new highs on a near-daily basis. In fact, gold established yet another record price yesterday (Wednesday) when it peaked at $1,153.40 an ounce on the New York Mercantile Exchange (NYMEX).

And the records are going to keep on coming.

With the U.S. dollar in a freefall and global gold demand rising, analysts say the precious metal will likely continue its bullish trend through at least the first half of 2010. It could rise as high as $2,000 an ounce, which would represent a 73% gain from current record levels.

"Everything is pointing to the price of gold going higher," Mike Sander, an investment adviser at Seattle-based Sander Capital Advisors, wrote in an e-mailed report.

And "a whopping budget deficit continuing to balloon, a Federal Reserve in no place of raising rates, and central banks all over the world diversifying away from the dollar," will be the main catalysts for gold's continued rise, he said.

Indeed, the U.S. Federal Reserve's loose monetary policy has put the dollar under duress. The central bank has pumped more than $2 trillion into the U.S. economy since the financial crisis began more than two years ago. It has lowered its benchmark Federal Funds rate to a record-low range of 0%-0.25% and it has stepped up purchases of U.S. Treasuries and mortgage-backed securities.

More recently, the return of investor risk appetite and the widespread belief that the Fed will have to keep its stimulus measures in place as the U.S. economy struggles out of a long and deep recession have put downward pressure on the greenback.

The dollar tumbled about 20% against the euro in the past year, and the Dollar Index - which measures the greenback against the euro and five other currencies - fell to a 15-month low of 74.679 on Monday and was retesting that low as of Wednesday.

With the dollar in freefall, central banks and hedge funds have sought shelter in hard assets, particularly gold. That's a big reason why gold has experienced such a remarkable run this year.

© Money Morning

"You have to consider the amount of money sloshing around the world right now - China's $2.2 trillion in reserves, India's $285 billion in reserves, all of the money in central banks throughout the Middle East," said Martin Hutchinson, a contributing editor for Money Morning and a veteran banker with more than two decades experience in the international marketplace. "If all of the serious money charges into gold and gold really gets going, you'll see a tremendous spike in prices."

Concludes Hutchinson: "I believe the price of gold will hit $2,000 an ounce next year."

Such steep run-ups have happened before. From 1978 to 1980, for instance, gold soared from $185 an ounce to $850 an ounce, Hutchinson recalls. Interest rates were about 10% at that time. Credit is much easier to get today.

"Right now, the cost of borrowing money and investing in gold is virtually zero," Hutchinson said.

How Global Demand Will Drive Gold to $2,000

Indeed, the bull-run in gold is already well underway, and it's picking up steam.

Prices actually began their most recent rally when the International Monetary Fund (IMF) earlier this month revealed that it sold 200 metric tons of gold to the Reserve Bank of India (RBI) from Oct. 19 to Oct. 30.

The RBI paid $6.7 billion for the 200 metric tons of the yellow metal - the equivalent of about 8% of the world's annual mine production.

The move surprised many analysts, as India for the past 15 years had largely neglected its gold reserves.

India's gold holdings peaked at 20% of its foreign exchange reserves - all the way back in 1994. Since that time, India's gold holdings had fallen:

Indeed, prior to the central bank purchase, India's gold holdings had dropped to just 3.6% of the nation's estimated $285.5 billion in foreign reserves.

Little wonder that last month's gold purchase nearly doubled India's holdings, which now stand at 558 metric tons, or 6.2% of the nation's forex reserves.

India's gold holdings as a percentage of foreign reserves are now higher than even China's. The People's Bank of China (BOC) holds about 1,054 metric tons of gold, equal to roughly 2% of its $2.3 trillion in foreign currency reserves.

Asia's third-largest economy now has the world's 10th-largest gold reserve, behind Russia, which has about 568 metric tons.

"Our Reserve Bank decided to buy some gold. I think about 400 tonnes. That's normally something we do from time to time. The IMF wanted to sell gold and we wanted to buy gold," Pranab Mukherjee, India's finance minister, said in an interview with the Financial Times.

However, analysts have been far less flippant about the purchase.

Timothy Green, the author of The Ages of Gold, described India's purchase to Bloomberg News as "the biggest single central-bank purchase that we know about for at least 30 years in such a short period."

"The only comparable event was the U.S.'s steady purchases in the 1930s and 1940s," he said.

Analysts believe India's highly publicized purchase - which was made when prices were near record highs - will spawn a chain reaction in which other countries and investors ramp up their gold purchases.

"This is a landmark trade," Jonathan Spall, a director at Barclays Capital (NYSE ADR: BCS) and a gold specialist, told the FT. "Central banks are conservative institutions and India's move is a sign for other central banks and sovereign wealth funds that were contemplating buying gold."

The IMF said in September that it would sell 403.3 metric tons of the metal to shore up its finances and increase its ability to lend at reduced rates to low-income countries.

And with 203.3 metric tons still on sale at the IMF, don't be surprised if China decides to bulk up on gold, too. China, the world's sixth-largest holder of gold, has increased its yellow-metal reserves by 76% since 2003. But the 1,054 metric tons it now holds is equal in value to just 2% of its world-record $2.3 trillion in total reserves.

"It is but a matter of time until China and the IMF announce much of the same," Dennis Gartman, an economist and the editor of The Gartman Letter, told Bloomberg.

Worldwide demand for gold is clearly on the upswing. However, just as that's happening, supply and production of the precious metal are falling.

Annual worldwide mine production of gold has decreased by nearly 8% since 2001, even as the price of gold has tripled.

© Money Morning

Meanwhile, investment demand for gold remained very strong - surging 46% in the second quarter of 2009 from a year ago, according to the World Gold Council.

"Everyone who says that gold will hit $2,000 in five years is wrong," said Money Morning's Hutchinson. "It will be back down in 5 years. If it's going to $2,000 it will get there next year."

"It will turn around when [central banks] start taking monetary policy seriously, and they won't do that in a hurry," he added. "Gold's bull run is a bubble, just like all the other bubbles. Except this is more of a bang than a bubble, because it's taking place so quickly."

Four Ways to Play Gold

Market Vectors Gold Miners ETF (NYSE: GDX): Gold miners benefit disproportionately from a rise in the price of gold, because their production costs are fixed. This means that miners are a more-leveraged way to play gold than the metal itself, particularly since surging speculative demand can increase mining companies' Price/Earnings (P/E) ratios.

SPDR Gold Shares ETF (NYSE: GLD): GLD holds more than 1,000 ounces of gold, and has a market capitalization of $39 billion. As an investment, GLD is more convenient than buying gold bars directly. The fund's share price fluctuates in concert with the price of gold.

Barrick Gold Corp. (NYSE: ABX): Barrick is the largest and financially strongest gold producer, with a market capitalization of $43 billion, reserves of 124.6 million ounces of gold (plus copper and silver), and operations in North America, South America, Australasia and Africa.

Yamana Gold Inc. (NYSE: AUY): A growing gold producer with a $6.8 billion market capitalization that made an unexpectedly good profit in the fourth quarter of 2008, Yamana is expanding both production and reserves (currently 19.4 million ounces) with operations in Canada and Latin America. Its expansion magnifies the likely potential benefit from an increase in gold prices.

Gold hits record on inflation fears

2009-11-20T16:09:00.000-08:00

http://www.sott.net/articles/show/197338-Gold-hits-record-on-inflation-fears

Frank Tang and Jan Harvey
Reuters
Wed, 18 Nov 2009 04:08 EST

Gold rose to a record high above $1,150 an ounce on Wednesday as stronger-than-expected U.S. consumer prices and a steadily weakening dollar stirred inflation fears.

Market sentiment also improved after news that billionaire hedge fund manager John Paulson is launching a new gold fund, including $250 million of his own personal investment.

Doubts about a nascent economic recovery and worries about the consequence of unprecedented quantitative easing also increased gold's appeal as a safe haven.

"There is a lurking concern in the background that still exists," said Bill O'Neill, partner at LOGIC Advisors, noting that investors were worried about the vulnerability of banks and the financial system.

Spot gold hit an all-time high of $1,152.75 an ounce and was at $1,142.55 an ounce at 3:08 p.m. EST (2008 GMT), against $1,141.50 late in New York on Tuesday.

U.S. December gold futures settled up $1.80 at $1,141.20 an ounce on the COMEX division of NYMEX.

The metal remains firmly underpinned by technical support after several days of gains and is likely to break through to further fresh highs in coming sessions after a buildup of momentum, analysts said.

"This is a sentiment-driven market, which means that should data confirm expectations, the market trades on it. Otherwise, it ignores it," said Commerzbank analyst Eugen Weinberg.

"The liquidity is still there, risk appetite is still there, the dollar is weak, so all the factors which have been in place for weeks and months are still in place."

Gold is attracting a new wave of investment as it pushes through key technical resistance levels to fresh highs.

The euro rose to a session high against the dollar on Wednesday on benign U.S. inflation data, while the dollar index, which measures the U.S. currency's performance against a basket of six others, was down 0.4 percent.

Non-Dollar Gold Climbs

Gold denominated in currencies other than the U.S. dollar gained ground, reaching the highest levels since late February in euro and sterling terms and since May when priced in the Australian dollar.

The news that Paulson will launch a new gold fund stirred investment buying in gold.

Paulson is among a number of hedge fund managers stocking up on the precious metal, for centuries considered a hedge against inflation, as governments around the world ramp up spending to combat recession.

Gold's strength also lifted other precious metals, with silver hitting a 16-month high at $18.83 an ounce, platinum reaching a peak of $1,463.50, its highest since September 2008, and palladium reaching a 15-month high of $376.

Silver was last at $18.52 an ounce against $18.40, while platinum was at $1,439.50 an ounce against $1,453 and palladium was at $368.50 versus $370.

Congo "Conflict Minerals" Fuel Brutal Civil War

2009-11-20T10:24:00.000-08:00

Again, tungsten is being used to counterfeit the world's gold supply!

http://war-poverty.suite101.com/article.cfm/congo_conflict_minerals_fuel_brutal_civil_war

Congo "Conflict Minerals" Fuel Brutal Civil War
Human Rights Groups Raise Awareness About Illegal Trade in Congo War

Sep 5, 2009

Many mines in the eastern DRC are controlled by rebels and the national army, which terrorize the local populations. The mined minerals are used in consumer electronics.

The war in eastern Congo is one of the deadliest in the world since World War II. Over five million people have died in this conflict that has lasted for decades. According to UN figures at least 250,000 people in the provinces of North and South Kivu have been displaced this year alone. Rebel groups are fighting over control of Congo's mining areas. Illegal trade in minerals is financing the violence.

Congo's Conflict Minerals are Today's Blood Diamonds

Congo's natural resources have also become a curse. News articles compare "conflict minerals" to blood diamonds, referring to diamonds that were at the heart of civil wars in Sierra Leone and Angola in the 1990's. The minerals are mined in a war zone and sold to finance more fighting. The ores that produce the minerals are cassiterite (source of tin ore), wolframite (source of the element tungsten) and coltan (source of tantalum).

tin is used for tin cans and solder on the circuit boards of electronics
tungsten is used in a variety of electronics, including the vibration function in cell phones
tantalum is used to store electricity in capacitors in GPS systems, laptops, cell phones etc.
The Enough Project Started an Awareness Campaign

Many mines in the DRC are located in remote, inaccessible areas and controlled by rebel groups. They are plundering the minerals, selling them illegally and force civilians, including children, to work for them. Enough, the anti-genocide project at the Center for American Progress, has partnered with Raise Hope for Congo to increase news coverage of the crisis in Congo, especially the widespread sexual violence against women and girls. Soldiers use rape a s a weapon of war. The Enough Project created a conflict minerals pledge that commits electronics companies to ensure their products are conflict-free.

Congo Conflict Minerals Act of 2009

Earlier this year US Senators Sam Brownback, Dick Durbin and Russ Feingold introduced the Congo Conflict Minerals Act of 2009 in the United States Senate. The bill would map rebel-controlled mines and require companies who use minerals from Congo to report the mines of origin to the U.S. Securities and Exchange commission. Global Witness, an international NGO that works to break the links between natural resource exploitation and human rights abuses, supports the bill as an important step towards greater transparency. In the longer term Congo and its neighbors must implement a framework to prevent the illicit trade of minerals.

"Only when it becomes more profitable to exploit the minerals legally will there be sufficient incentive for peace in Congo."

Tin, Tantalum and Tungsten: The New Blood Diamonds

2009-11-20T10:18:00.000-08:00

Tungsten is used to counterfeit gold! All that blood and rape and suffering in the Congo so the western, financial elite can dupe the world with dirty gold!

http://www.huffingtonpost.com/janet-ranganathan/tin-tantalum-and-tungsten_b_255982.html

Posted: August 11, 2009 10:34 AM
Tin, Tantalum and Tungsten: The New Blood Diamonds

Two upcoming Senate bills could have a big impact on the Democratic Republic of Congo, by exposing how its 10-year conflict is being funded.

When Hillary Clinton visited the Democratic Republic of Congo this week, she called attention to the exploitation of the country's vast natural resources to fund its bloody ten-year conflict.

The Democratic Republic of Congo (DRC) is a country rich in natural resources, including large deposits of tin, tantalum, and tungsten -- metals used to manufacture many of the electronics found in U.S. homes, such as laptops, cell phones, iPods and digital cameras.

U.S. and international electronics companies purchase significant quantities of these metals from the DRC, despite a ten-year civil war that has cost an estimated 5.4 million lives. Rebel groups perpetuating the country's conflict are funded by profits from mining activities, and by unwitting American consumers who purchase electronics using minerals sourced from mines in eastern DRC.

However, two upcoming Senate bills could have significant impact on reducing the conflict by providing consumers and investors with information on where minerals are sourced and how much money is paid to foreign governments. Both the Congo Conflict Minerals Act and the Extractive Industries Transparency Disclosure Act would require companies listed on the Securities and Exchange Commission (SEC) to disclose this information in their financial reports.

The Congo Conflict Minerals Act, recently introduced by Senators Sam Brownback (R-KS), Richard Durbin (D-IL) and Russ Feingold (D-WI), would require electronic companies such as Apple, Nokia and Nintendo, to report the exact location of mines in DRC from which they receive tin, tantalum and tungsten. This publicly available information would inform consumers whether the electronics they purchase originate from conflict zones in the DRC.

Passing the Congo Conflict Minerals Act, if accompanied by sufficient publicity, would likely have a significant impact on consumer (and eventually, corporate) behavior. As evident from the effective embargo on blood diamonds from Sierra Leone, many Americans and Europeans are conscientious consumers, sensitive to breaking the link between conflict and natural resources. U.S. and international companies also have reputational concerns. The SEC is a principal source of company information for potential investors.

A second bill soon to be reintroduced in the Senate -- the Extractive Industries Transparency Disclosure Act -- would have broader implications for the effective use of natural resource revenues around the world.

Under this Act, all SEC-listed companies would be required to fully disclose the amount of money paid to foreign governments for oil, gas, and minerals in their required financial statements. Such transparency would allow companies to build solid reputations based on partnering with governments response to their citizens' needs and concerns. The Act would also mark an important step in ensuring sound revenue management, and fighting the corruption that hinders African countries from translating resource wealth into economic growth.

The pressing reality in eastern DRC, where on Monday Hillary Clinton met victims of one of the world's worst conflicts, underlines the urgency for precedent-setting U.S. action requiring companies to report on their financial flows into war-torn regions.

Despite a nine-year presence by the world's largest United Nations peacekeeping operation -- 18,422 personnel at an annual cost of $1.2 billion -- rebel forces in DRC continue to terrorize innocent citizens. Over one million women and children have become victims of sexual assault and rape in eastern DRC.

Lack of good governance in eastern DRC has played a significant role in allowing these atrocities to occur. Based on research by the World Resources Institute and our local partner organizations in Africa, we believe the Congo Conflict Minerals Act and the Extractive Industries Transparency Disclosure Act would provide a powerful platform for U.S. development assistance to work with governments to ensure revenues from natural resources contribute to economic growth and poverty reduction.

Ending the conflict in DRC is a long-standing and high-priority U.S. policy objective. In October 2006, then-President George Bush argued that the conflict constituted "an unusual and extraordinary threat" to our foreign policy. President Obama's administration has made its concern equally clear, hence the secretary of state's visit.

Strong Congressional support is needed now to prioritize and pass both the Congo Conflict Minerals Act and the Extractive Industries Transparency Disclosure Act. While iPods and cell phones are integral in our daily lives, our convenience should not be bought at great detriment to others.

Peter Veit, a Senior Associate with WRI, and Sarah McHaney, an intern at WRI, co-authored this post.

Zinc Dimes, Tungsten Gold & Lost Respect

2009-11-20T05:56:00.000-08:00

Dear Media Friends and Friends: Five days ago, I sent you an article I wrote about how the evil elite of the world has supplanted real gold with fake gold. Although Op-Ed News (http://www.opednews.com/articles/Imaginary-Gold-Bullion-Ho-by-Martha-Rose-Crow-091115-914.html) and four other places picked it up, the article pretty much died on the vine. I kind of thought this would happen because news like this could sink the whole economic ship (and it will eventually) plus the secret serpent puppet masters will try to punish you. They certainly tried to punish me this week. Some of my blogs have been hit, my computer was hit, so forth. Some of the links I used in the article was rendered useless plus the main link cited suddenly had a 'malware' warning on it!

I'm sick of living in a world of psychopathic shit run by psychopaths! I try to live and lead by example! I'm the first person on the planet who connected PUT Options and the Missing Minot Nuke (http://www.sott.net/articles/show/143091-The-Bin-Laden-Option-and-the-Missing-Minot-Nuke). I'm the first person on the planet that told the world WHY Israel was sieging Palestine almost a year ago (http://www.opednews.com/articles/A-Secret-Behind-Israel-s-S-by-Martha-Rose-Crow-090106-575.html)

Katherine Austin Fitts writes about how America is addicted to the narco dollars that are laundered through wal-street banks. When she confronted a 'spiritual' group she was speaking before in Philadelphia (http://www.ratical.org/co-globalize/solariRising.html) and asked how many would push the 'Red Button' to stop this criminality? Only ONE PERSON IN A HUNDRED would push the Red Button! ONLY ONE!!! Why would the other 99% of 'spiritual' persons not push the button? Their mutual funds would go down and their government checks might stop.

So yeah, I know why most of you were afraid to publish my latest article. *Thank You* to those who did publish me!

Unfortunately, I THINK I'M RIGHT ABOUT THE DIRTY GOLD. Someone sent me the article below late last night and I had to think hard about what to do about it. Me, I just want JUSTICE and you can't have Justice without the TRUTH.

Putting off the day of reckoning is not going to stop the suffering. In fact, it's only going to escalate the suffering and entrench the evil elite's hold on the world as while they are making money on bogus money instruments, they are buying up the world. More, the longer the world waits to stop these criminals, the more chance they will get away with their crimes and the more chance it will be harder to claw back their ill-gotten gains!

Below is the article sent to me and I BElieve that is Probably True. The evidence keeps growing.

I imagine in a few hours, the site below will have a malware sign. WHY? Because this is to be the new bubble of the puppet masters and probably because a lot of the gold on the market is not genuine.

Thank you for your time, ~Martha Rose Crow

http://www.kitco.com/ind/willie/nov182009.html

Zinc Dimes, Tungsten Gold & Lost Respect

By Jim Willie CB
Nov 18 2009
www.GoldenJackass.com

Use the above link to subscribe to the paid research reports, which include coverage of several smallcap companies positioned to rise during the ongoing panicky attempt to sustain an unsustainable system burdened by numerous imbalances aggravated by global village forces. An historically unprecedented mess has been created by compromised central bankers and inept economic advisors, whose interference has irreversibly altered and damaged the world financial system, urgently pushed after the removed anchor of money to gold. Analysis features Gold, Crude Oil, USDollar, Treasury bonds, and inter-market dynamics with the US Economy and US Federal Reserve monetary policy.

In 1964 the USGovt introduced the zinc dimes clad with silver. They at least admitted the debauchery publicly. Now pre-1964 silver coins are all considered different, and valued differently too, higher. Rome committed the same coinage fraud 1900 years ago. Their Empire went bust as the city burned almost concurrently. Ayn Rand is a guiding light for Alan Greenspan, the enabling destroyer of the US banking system, destroyer of the US household archipelago, and dispatcher of the US industrial base to Asia. He is the hero icon worshipped by Wall Street. The irony is thick, that his career was spent following Old Europe orders that delivered the slow motion coup de grace to the American Empire. Ayn Rand wrote "If you want to know when a society is set to vanish, watch the money. Whenever destroyers appear among men, they start by destroying money, for money is men’s protection and the base of moral existence. Destroyers seize gold and leave to its owner a counterfeit pile of papers." The Chinese are learning this lesson the hard way, challenged to convert their USTreasury Bonds and USAgency Mortgage Bonds into true wealth before the paper becomes untradable. Actually, the bonds will eventually be redeemed by the USFed with newly printed money, when an avalanche occurs of foreigners seeking redemption en masse. For almost ten years they have been exchanging their finished products to the US & West for paper with ink on it, in questionable stored wealth. The Chinese are cashing in on their paper, trading it for new global power.

NEW TUNGSTEN MINE DISCOVERY

The tungsten deposits come in very high grade ore, located in shallow rectangular deposits dispersed widely across the world, segregated in unusual vault heap leach mineralizations. In October, the Hong Kong bankers discovered some gold bars shipped from the United States were actuallytungsten with gold plating. This is the exact same Modus Operandi as the silver clad zinc dimes from 45 years ago. History repeats itself. The parallels to mortgage bond fraud with either subprime borrowers or multiple property titles used in bond securitization is easy to spot. A consistent theme runs through the American management of finance and dissemination of fraudulent assets on a global basis. Tungsten gold bars is a feat difficult to surpass. Credit must be given for not leaving any potential for fraud untapped. Refer to insider flash trading, naked shorting of bank stocks, commodity trading on behalf of the USGovt, and much more. No disrespect is intended for the trillion$ counterfeits of superstar grade. Refer defense appropriations, USTreasury Bond sales beyond issuance, and missing Fannie Mae funds. These are legacy crimes.

The initial discovery was something like four gold bars, which the Hong Kong bankers drilled invasively to test the contents. Reminds me of drilling the earth and measuring how many grams of gold per tonne. The HK bankers hoped to have 99% gold yield in their drill program for the resident bars. They found something like 1% instead and 99% tungsten. By the way, tungsten sells for less than $70 per ton, which makes its swaps for gold to be 60x more profitable than silver bar swaps. Another handy usage for the Gold/Silver ratio in calculations. The hunt was on. Now not a single assayer on the planet is available, as all are tied up. They have been commissioned to test the gold bars shipped from the United States of Fraudulent Banker America in their own bullion vaults. They use basic methods of four drill holes with direct assay of shavings, but also less invasive methods like electro-magnetic waves to examine the metal lattice structure. When highest level methods are needed, they turn to mass spectrometry. NOW ALMOST NO GOLD BARS WILL LEAVE THE LONDON OR NEW YORK METALS EXCHANGES WITHOUT SOME AUTHENTICATION, AS DISTRUST IS WIDESPREAD.

The global bankers must deal with toxic bonds and phony gold bars. Talk circulates that the entire contents of Fort Knox might have swapped a decade ago. Evidence is being accumulated and compiled. The assayers have also been commissioned to assist in authentication of gold bar delivery the world over from the US exchanges. Current estimates among the gold trader community run well past a few hundred thousand 'salted' gold bars, maybe over a million. So the introduction to sophisticated Wall Street methods of currency management during the Decade of Prosperity had a side game running simultaneously. In an age where the lines between patriotism and treason are blurred, this tungsten episode brings new meaning to the word HEIST.

BREAKDOWN AT GOLD EXCHANGES

The bust cometh, and it will be spectacular. The stories told in the press will be peculiar, since not told objectively. The headlines might be a comedy, with phony reports of foreign subterfuge, when the perpetrators are home grown. The focal point for attacks is actually London at their metals exchange. The early October events included numerous offers by exchange officials to settle gold contract deliveries in cash with a 25% extra vig bonus. Much gold was drained from London on demanded delivery, thanks to a small army of lawyers, a small blizzard of contracts, and a few key judges at the courts. They were all Asians, the majority Chinese. Gold was taken, thus enforcing futures contracts, which happen to be binding contracts. The pressure at the end of November will be worse to make good on gold contract deliveries. Recall the stories back in April for a Deutsche Bank rescue by the Euro Central Bank with a very large (over one million oz gold position) provision made. DBank was in trouble. The pressures are mounting every couple months. Next March will be a climax of the breakdown, or else June.

Breakdowns come from extreme pressures. Each delivery month event includes more gold removed from the London exchange, more gold demanded from it, and more movement toward a breakdown. So the next events have even more pressure, with less gold supply and continued relentless demand. Recall also that the exchange, along with the COMEX in the Untied States, exempt certain parties from maintaining 80% collateral when they short gold & silver with paper contracts. Thus the name suppression, or better yet corruption. They are being caught in their naked shorting game. The December 1st events surrounding settlement delivery demands will be more contentious and stressful than October 1st. In sequential manner, the March event will be even more pressure packed, with precious little physical gold in store and more targeted Chinese delivery demanded. The June event will be even more pressure packed still, a backup date for a potential breakdown if it does not occur in March.

The common denominator for the parties demanding gold delivery in London is simple: they are all Asians, all, as in all, and the great majority are Chinese. One can safely conclude that the US and British banks will be broken with the nexus being their gold management, which underpins the USDollar. Other pressure is sure to mount. Not the kind of pressure you might imagine. Pressure is mounting for senior bank executives and politicians to start revealing the identities, deeds, locations, and dates of the gold tungsten swap, the mortgage bond firehose, and other pervasive frauds protected by the USGovt and British Govt.

GOLD & SILVER BREAKOUTS

The gold & silver prices are moving in lead fashion, and have done so among the currencies for at least the last three months. The major currencies fiddle and diddle, but gold & silver continue to rise. The Chinese, according to word from connected sources, intend to push the gold price and the silver price relentless upward without explosive parabolic moves and without painful huge selloff corrections. That way, the army of public investors will not lose heart, and will remain on the path, in full phalanx support of the Chinese Govt initiative. The Euro currency has hit the 150 level in mid-October and in mid-November, only to fall back a little. The Euro is not ready for a powerful move to 160 just yet. Such an advance would bring with it a painful effect to German exporters again, not desired. As a result, the gold price in Europe has made significant moves, and is in the process of challenging the 785 high from February. The key to a massive gold bull market is confirmation in terms of other currencies. The gold breakout is being led globally in US$ terms, since it is the weakest currency among the majors. GOLD IS TAKING ITS RIGHTFUL PLACE AS THE PREMIER GLOBAL CURRENCY, AFTER A BREAKDOWN IN THE MONETARY SYSTEM AND INSOLVENCY IN THE BANKING SYSTEM.

My 1130 midterm target for gold has been hit, stated at least three times this summer and autumn in public articles. One must wonder if a sizeable selloff in gold is coming. My view is that given the lack of sudden sharp upward thrusts in the gold price, the prospect of a sharp correction is lessened. Charts tend to show symmetry oftentimes. Besides, the Beijing Put is becoming well-known in the financial circles. The Chinese are using some reverse technical analysis, buying heavily when the gold chart indicates imminent weakness. That way the clueless Western gold sellers will be denied their cheaper re-entry, and will be forced to buy at higher levels. The Chinese are employing an unusual pattern. They are accumulating gold. The Chinese will continue to buy gold with both hands until the supply is exhausted of turkeys who fail to comprehend the Paradigm Shift, fail to comprehend the USDollar revolt, fail to comprehend the broken Western banks, fail to comprehend the endless stimulus, and fail to dismiss the mindless gold bubble argument that seems to be floating around in recent propaganda ploys. Its author overlooks the USTreasury bubble of gigantic proportions.

Whether or not a notable pullback correction comes for gold, who knows? who cares? This is not a time to go in & out, selling & buying back a gold position. It is a time to acknowledge a powerful global shift that will send the USDollar into the dungeon, and deliver gold to unheardof heights. The next target for gold is 1300. The targets for gold are dictated by the size of the jumps from the head and shoulder of the inverted Head & Shoulders pattern. The lost respect from the gold bullion bar fraud, the Weimar output of printed money, the monetization dependence from global isolation, and the lack of leadership all tend to pull the USDollar down. More accurately, these factors will push gold up into a dominant currency position fully recognized, as nations struggle to rebuild their banks after toxic US infection that does not end.

G-20 CONFIRMS PARADIGM SHIFT
The Scotland gathering of bankers had some key signals to report. Note the signal how they ignored the USDollar as a topic in the open chambers. Conclude they wish for benign neglect, where the US$ can find its true value much lower, and eventually depart as the global reserve currency. Note the signal how they urged continued global stimulus. Conclude they wish for the major governments to continue to debauch, undermine, and destroy the major currencies such as the USDollar, British Pound, European Union Euro, Swiss Franc, and Japanese Yen. Conclude they wish for the emerging market economies to be given massive assistance by the industrialized submerged market economies. The more the prominent older nations render harm to their banking systems, economies, and balance sheets, the easier it will be for Brazil, Russia, India, and China to conduct the business of walking the earth as new leaders. The new BRIC nations will build their dominant positions one brick at a time. The Paradigm Shift is away from the USDollar, with power shifting from West to East and in particular toward the BRIC nations. Their most recent visible victory is killing off the G-8 Meeting, which does not convene anymore. Not only does the G-20 serve as the global banker conference forum, but the Chinese have a lead voice, precisely as they demanded. Creditors win their way.

The commodity currencies are in a different earth zone. My analysis has stated that the prominent older nations, the so-called industrialized nations, will not raise their official interest rates. They will only talk, since their banks are insolvent and their government debt securities are caught in asset bubbles. The Euro Central Bank is the most likely to raise interest rates, but only as part of a more diverse strategy to split the EU iteself. The German nation has been drained by $40 billion per year for each of the last ten years, and resentment is strong. The Australians and Norwegians hiked their official interest rates in recent weeks. They have commodities to fortify their national economies, and do not concentrate on the sale of inked paper in tainted export.

The Paradigm Shift is toward a more legitimate group of currencies. It is toward currencies backed by hard assets. The currency basket from the Intl Monetary Fund seems like the temporary device. It is actually a Straw Man carrying a straw basket. Before the grand shift is complete to at least one hard asset currency, the doomed currencies will be bound together with IMF twine. The bankers believe the IMF straw basket will give them the power to control the decline of the USDollar, or protect themselves from that decline. The strategy might succeed. It will surely enable the gold price to climb versus all currencies. Gold will be like Moses in a basket as a baby, except moving upstream. The candidates for hard asset currencies are the New Russian Ruble, the Gulf Dinar, maybe even a New Nordic Euro. The process will take time, as some bumpy roads lie ahead, and military protection is required.

EXIT STRATEGY & WEIMAR DOLLARS

No exit strategy is available either to the Untied States or the British. The USFed conducted its helpless display to announce the USEconomy remains weak with slack capacity, and that an ultra-low official interest rate would be firmly fixed for a long time still. No surprise here! What they did not say is that, like with Japan, they have no possible exit plan. Now almost twenty years later, Japan is stuck with a near 0% rate. If the USFed raises interest rates, they pop the biggest financial bubble on the planet, USTreasury Bonds. The USFed is further hindered since Wall Street is playing the Dollar Carry Trade. They are borrowing 0% money in US$ and investing in commodities like crude oil and US stock indexes. Other players are using the free borrowed money to invest in gold. In fact, just today St Louis Fed President Bullard stated his expectation of no further USFed rate hike until year 2012.

The Exit Strategy will lead to a road paved by Weimar Dollars. The world's major financial centers outside the central bank accomplices are ditching their dollars. They are diversifying out of US$-based bonds of all types. They are accumulating gold. Some are investing in facilities that are vertically integrated with commodity production, transport, and trade. Like China! The USGovt is investing, by contrast, in clunker cars, still more houses, dead car industry, spoiled AIG insurer, a mortgage cesspool Fannie Mae, pork projects (see unused airport in Johnstown Pennsylvania), and a dubious war on terrorism. Quite a contrast! With the news spreading globally about tungsten-laced gold bars, or actually gold-plated tungsten bars, the reputation of the Untied States will grow more tarnished.

In time, the only friend of the USDept Treasury to finance its steady stream of Trillion$ in debt will be the Printing Pre$$. Without the printed money to pull off the auctions, they would be utter loud failures. Without the USDollar Swap Facility, foreign central banks would not have funds to use in Treasury auctions. Without the funds from foreign USAgency Mortgage Bonds sold to the USFed for freshly printed USDollars, the foreign central banks would not have funds to use in Treasury auctions. Without the Permanent Market Operations used to scoop up all the unsold bonds stuck with primary dealers, one week routinely after each auction, dealers would be unable to participate in the next Treasury auctions. They would suffer from bond constipation. The key event in the next few months, pushed by the foreign disgust at fraud more pervasive than ever conceived by ordinary man, is THE EXPOSURE OF MONETIZATION for support of the USTreasury Bond. The debt monetization remains a dirty secret, well concealed by the USGovt and the financial press. What comes is isolation, and to those isolated, their best friend will be a Printing Pre$$.

Exposure comes, with detrimental impact to the USDollar. The resulting tarnish to the USGovt image and Wall Street reputation will be reflected on the USDollar. In time it will fully resemble a Third World currency. The process will take time, but hyper-inflation is coming to US shores. Where are the Deflation Knuckleheads who tended to dominate the web journals last spring and summer, in incredible dense vapid clueless fashion??? What a tremendously misguided group. They follow religiously the deteriorating economies, miss the twin storm, ignore the power of the unprecedented monetary inflation, and somehow overlook the entire global movement if not revolt against the USDollar in a grand Paradigm Shift. They represent the worst economists in the alternative media on web journals. Their tunnel vision on the falling asset price effect left them vulnerable to missing a tsunami on their own doorstep, incredibly. They still do not offer an explanation of why crude is at the $80 price level again. Supplies of oil are nowhere as great as the false USGovt statistics indicate, but the entire world is hedging at the same time against the US$ with oil assets.

OBAMA VISITS THE LEAD US CREDITOR

During the president visit to Beijing, Obama has been reminded of who the master creditor is. It is China. In public no discussions are made of the Chinese concentrated pressure in London at the metal exchange. Taboo topic. The US President has slipped on three key topics, with mention of the human rights issue, currency manipulation, and the future of communism.

The US has no place to lecture any other nation. China is actually moving toward capitalism, while America has forgotten what capitalism is, and marches with right foot in fascist mud and left foot in communism mud.

The Chinese serve as the spearhead to displace the USDollar from its perch as the global reserve currency. They realize fully that the battle that must be won is over the Gold-Dollar fiery rod. The Chinese might be orchestrating a gold price move to 1150 and a silver price move to 19 just to slap the US face a little during the state visit. Creo que si!

Why Chinese Gold could pay 100% MORE than U.S. Gold over the Next 2 Years

2009-11-18T05:30:00.000-08:00

http://stockideas.org/content/view/3002/87/

Why Chinese Gold could pay 100% MORE than U.S. Gold over the Next 2 Years
September 2009

Dear Reader,
China has gone crazy for gold. In April, for example, the government's Foreign-Exchange Agency announced the purchase of an additional 16 MILLION ounces for state coffers.

And just a few months earlier, National Geographic Magazine reported that for the first time China had surpassed the U.S. as a buyer of gold jewelry.

But here's the amazing thing few investors realize...

Behind the scenes, in a move that has gone almost completely unreported in the Western press, the Chinese government has created a gold investment that could dwarf the returns of gold bullion, ordinary gold stocks, or any other type of gold investment you've heard of before.

I wouldn't be surprised if you see gains of 1,000% or more.

I realize that may sound impossible, but consider...

This is not the first time Beijing leaders have secretly created such an opportunity:

In the late 1990s, the Chinese government created two similar investments. One (to help the local insurance industry) went up more than 625% in just a few years... the other (to aid the energy sector) has gone up about 1,084% over a similar period.

But this is the first time Chinese officials have intervened in this way in the gold marketsand I expect the result will be a windfall for savvy investors over the next few years.

After all, gold is one of the only "buy and hold" investments in the world right now. It is also the only investment in the world that has gone up EVERY YEAR for the past five years straight. And, remember, China remains the fastest-growing economy on the planet, with the wealthiest government on Earth.

The point is, if you are interested in an extremely lucrative way to own gold, right alongside the Chinese government, this is something you should consider.

I can just about guarantee you will not hear about this opportunity in any mainstream media publication. I heard about it only because of a contact in the industry, who met recently with officials in Beijing.

I expect the word will soon get out. But until then, you have an incredible opportunity. Let me show you what's going on...
When the Chinese government realized they needed to improve their insurance industry, for example, they broke up state-run agencies, and created China Life Insurance, the only company with a national license. Investors have made 625% in the past five years.
When the Chinese government realized they needed more industrial supplies for manufacturing, they spun off state operations and created a firm called Chalco... which paid more than 2,100% over a six year period. They did the same with mobile phones, turning state interests into a public company that has provided 583% gains since becoming available.
China's Secret Solution

For essentially the past 50 years, no one was allowed to touch gold in China... except for the government.

But today, that is changing... and in a hurry...

In short, the Chinese government wants more gold.

They realize gold is one of the only buy-and-hold investments in the world right now. And they've got a lot of money to spend... nearly $2 Trillion according to a recent report in The New York Times.

So the Ministry of Land and Resources has completely rewritten the country's mining laws (known as the Minerals and Resources Law) to encourage local and foreign companies to explore for and produce more gold.

The government has also recently created the Shanghai Gold Exchange, to allow anyone to trade gold, on the open market, without government interference.

But most importantly for you and me, the government has quietly gotten behind a handful of publicly traded gold companies.

China quietly introduces new financial system/Purchasing 10,000 tons of gold

2009-11-18T02:38:00.000-08:00

http://benjaminfulford.typepad.com/benjaminfulford/

11/17/2009
China quietly introduces new financial system/Purchasing 10,000 tons of gold
Benjamin Fulford

China has stealthily introduced a new financial system based on the renminbi which is well on its way to becoming fully convertible, according to a high-level Chinese source. In addition, China is purchasing 10,000 tons of gold to back up a new fund designed to develop and market heretofore forbidden and suppressed technologies. The fund will be based outside of China and will be controlled by prominent members of the Chinese overseas community. The gold purchase will take some time because of the logistics of transporting it and the Chinese wish to test it thoroughly. Both the Chinese government and MI6 now confirm reports that much of the gold sold by the Federal Reserve Board over the past decade is in fact gold plated tungsten.

For its part, the renminbi is now convertible with South American currencies, the rouble, Middle-Eastern currencies, the yen, South East Asian currencies and African currencies. “We will slowly introduce our new financial system in parallel with the old one and hope that people steadily migrate towards it,” the Chinese official says.

Meanwhile, the latest G20 meeting ended in acrimony and chaos. The leadership of the West is in total disarray and will remain so until the Federal Reserve Board’s bankruptcy becomes visible even to brainwashed section of the Western public. This is now expected by January or February. Both MI6 and a senior Chinese government source now predict the collapse of the Federal Reserve dollar by that time.

We are also hearing various reports that many Pentagon and other US alphabet suit agency figures with both US and Israeli citizenship have recently fled to Israel. Things are coming to a head.

IGNOMINIOUS END TO GLORY DAYS

2009-11-17T07:07:00.000-08:00

HTTP://WWW.MINEWEB.CO.ZA/MINEWEB/VIEW/MINEWEB/EN/PAGE34?OID=93062&SN=DETAIL

IGNOMINIOUS END TO GLORY DAYS
South African gold on final deathwatch as top grade scientist finds residual gold is more than 90% less than claimed
Research shows that production rates should fall permanently below 100 tonnes a year within the coming decade
Author: Barry Sergeant
Posted: Monday , 16 Nov 2009

JOHANNESBURG - The apparent bottom line in a paper published in the South African Journal of Science is that South Africa's gold industry is on final deathwatch, despite claims of massive existing below-ground reserves. Chris Hartnady, research and technical director of Cape Town earth sciences consultancy Umvoto Africa, has found that South Africa's Witwatersrand goldfields are around 95% exhausted, and anticipates that production rates should fall permanently below 100 tonnes a year within the coming decade.

Gold production from the Witwatersrand, the biggest known gold field in the world, peaked at around 1,000 tonnes in 1970 and has declined ever since. Hartnady says that while initially (1970-1975) the decline was "quite precipitous", it has been interrupted by only short periods of slight trend reversal (1982-1984 and 1992-1993).

Leon Esterhuizen, a London-based specialist analyst at RBC Capital Markets, has reacted to the research by saying that "South African gold is dying -- this is not new news", but adds "that it may be dying faster than we currently believe is novel". On the levels of reserves, Hartnady finds that the South African "residual gold reserve" after production through 2007 is only 2 948 tonnes, a little less than three times the 1970 production figure, and much less than 10% of the officially cited reserve.

The country's gold reserves are less than half of the current United States Geological Survey (USGS) estimate of 6 000 tonnes, and the country is not first, but fourth in world rankings, after Australia (5,000 tonnes), Peru (3,500 tonnes) and Russia (3,000 tonnes), Hartnady's research shows. The USGS currently cites South Africa's gold reserves at around 6,000 tonnes, while SA claims a 36,000 tonnes reserve base figure (or about 40% of the global total). Hartnady's findings are based onChamber of Mines figures and mathematical modeling pioneered by the distinguished American geologist M. King Hubbert.

Esterhuizen comments that "most recent indications from Harmony (even with gold bullion at new dollar records over USD 1,100/oz) is that its old shafts - effectively the Free State gold field - are dying. DRDGold has got Blyvooruitzicht on life support and is trying to get permission to keep the plug in for a little bit longer (with everything around Blyvooruitzicht now having been shut down), while Pamodzi Gold's demise and Simmer & Jack's failure at Buffelsfontein just proves the point -- all of this, at record gold prices in rand terms".

Analysts have also expressed surprise, if not amazement, about recent comments from AngloGold Ashanti CEO Mark Cutifani to the effect that its South African operations will be restructured. How is it, analysts ask, that "the highest margin operating gold assets in South Africa are . . . being re-structured ?"

A growing number of skeptics are also asking whether Gold Fields's developingSouth Deep operation - which it bought in 2007 for USD 3bn - will truly ever be able to make money. It is already evident that it will probably never deliver a real return on the capital that it took to bring it to life, says Esterhuizen. He also notes particular current promises by both Gold Fields and Harmony of growth from the South African base over the next three years.

Hartnady's prognosis is pretty grim: "Given the energy and environmental problems associated with ongoing groundwater control, water-resource contamination by acid mine drainage, and the possibility of widespread mercury and other factors of pollution caused by illicit underground ore-processing by the zama-zamas (illegal miners), the glory days of South African gold mining appear to have arrived finally at an ignominious end.

"There can be no further illusions, maintained by unrealistic expectation of a future fortune, about the seriousness of the present situation. In their various possible forms, the slow-onset disasters of environmental degradation associated with the death-throes of a formerly illustrious industry now pose a serious threat, and may ultimately cost far more than the net present value of some 3,000 tonnes of gold".

Esterhuizen mentions a number of other challenges faced by South African gold diggers: royalties (a new thing), zooming electricity charges, BEE (black economic empowerment) burdens, safety shutdowns, "massive security costs", and ever-present currency exchange control. In these areas, Esterhuizen argues that "government may achieve a ‘small' miracle or, more likely, simply hasten the end".

Esterhuizen says that "a small opportunity may be the possible stronger future uranium market -- effectively reducing gold costs by obtaining revenue from by-products". This is already happening at a number of gold mines where uranium is also produced. Certain closed shafts known to hold good quantities of uranium are also being investigated for possible recommissioning.

How Much of the World’s Gold Supply Is Salted with Tungsten and Steel?

2009-11-17T07:05:00.001-08:00

http://www.opednews.com/articles/Imaginary-Gold-Bullion-Ho-by-Martha-Rose-Crow-091115-914.html

Imaginary Gold Bullion: How Deep Does the Plunder of the World’s Resources Go?

How Much of the World’s Gold Supply Is Salted with Tungsten and Steel?

By Martha Rose Crow, M.S.

Because I manage 103 blogs, people send me many articles and bits of information. A lot of it is stuff I’ve seen or read before or can't use, but sometimes something ‘golden’(pun and metaphor intended) crosses my desk that sticks in my head and won’t go away.

Two days ago, someone sent me an important article. Besides posting the article (‘On Doing God’s Work’ by Ron Kirby) on my ‘Evil Economics’ blog (http://evileconomics.blogspot.com), I didn’t know how else to share the information but write this article and send it out into the world.

Most people on the planet know that Congress and the Obama administration have not yet really tried to investigate the corruption on wal-street (caustic pun and metaphor intended) and/or bring the cabal of criminals to justice --plus enact laws such as another Glass-Segal Act to prevent another such widespread scale of economic crisis and corruption in the future.

Proof of this is in a plethora of articles everywhere, including the New York Times article, ‘Why Won't Obama Draw a Line in the Sand and Take on the Wall Street Wrecking Crew? (http://moveobama.blogspot.com/2009/11/why-wont-obama-draw-line-in-sand-and.html)

There are many reasons for those in government power to resist the anti-corruption changes that 99%+ of the public want.

For example wal-street’s agents (notably, Goldman Sachs’ agents) are embedded in all government halls of economics, plus all halls of lobbying. In an invisible ‘revolving door’, elite wal-street bankers/employees move back and forth between choice bank and federal government positions. A good article about this is ‘Goldman Sachs In Government - Government in Goldman Sachs’ at http://www.goldmansachs666.com/2009/10/goldman-sachs-in-government-government.html

Lobbyists make sure that congress, the senate and other government officials keep it sweet for the captains of corruption (Lobbyists Influence Financial Reform-http://www.google.com/hostednews/ap/article/ALeqM5iZnfNIDibBZ2lgBu_KVRX_wauO2AD9BCKQJG1)

Almost half of Congress are millionaires (Nearly Half of Congress Millionaires While Only Earning 6 Figures-http://www.opednews.com/articles/Nearly-Half-of-Congress-Mi-by-Grant-Lawrence-091107-574.html) and thus are embedded in the System to keep it ‘business as usual’ for the established and entrenched status quo.

It is almost impossible to get selected for entry into the elite groups that run for high government offices unless you are an elite. Obama himself, one of the ‘poorest’ of these members skirted the multimillionaire requirement by raising most of his campaign funds through the Internet. His wealth has come mostly from his book sales or so we are told.

But the majority of high office seekers already have eight figures or more at their behest, comprising a class elite that further profits, after election, from deals and schemes usually disguised as ‘pork barrel projects’or the result of ‘good connections’.

The richest ‘members of the government houses’ are the foxes guarding the chicken coop or the ‘public bank’ from which they steal in the name of the law, or in the name of the law of power and privilege.

And of course, these agents of chaos, destruction and selfishness see no problem with their anti-human, psychopathic behavior. Somehow, they ‘know’ better and have ‘greater wisdom’ than the rest of us. Of course, these ‘sacred executioners’ are rewarded handsomely for keeping worldwide economic systems corrupt for their masters who reign above them, including their sychophantic allegiance to their interpretation of ‘god’.

Goldman Sachs CEO Lloyd Blankfein believes he is doing ‘God’s Work’ (http://www.huffingtonpost.com/2009/11/07/goldman-sachs-ceo-lloyd-b_0_n_349620.html).

And in this vein of doing ‘God’s Work’ comes an article with a similar name. This alarming article is called ‘On Doing God’s Work’ by Ron Kirby
(http://news.goldseek.com/GoldSeek/1258049769.php),

Kirby reports about irregular gold settlements which occurred in London during the first week of October, 2009.

Apparently, the ‘gold bars’ were partially made of gold.

It's an old scam that's been around for centuries. In this case, the centers of the bars were gutted and filled with tungsten, a very heavy, relatively cheap industrial metal that is about 9% lighter than gold.

Some myths say that tungsten and gold weigh the same, but they don’t. The atomic number for gold is 196.9. and the atomic number of tungsten is 183.8.

Fortunately for gold fraudsters, tungsten is as dense as gold, making it difficult to detect the slight weight difference. This weight difference, however, should have been noticed, as gold bars are supposed to be weighed whenever they are moved to a new location.

In ‘On Doing God’s Work’, Kirby writes:

Roughly 15 years ago – during the Clinton Administration [think Robert Rubin, Sir Alan Greenspan and Lawrence Summers] – between 1.3 and 1.5 million 400 oz tungsten blanks were allegedly manufactured by a very high-end, sophisticated refiner in the USA [more than 16 Thousand metric tonnes]. Subsequently, 640,000 of these tungsten blanks received their gold plating and WERE shipped to Ft. Knox and remain there to this day. I know folks who have copies of the original shipping docs with dates and exact weights of “tungsten” bars shipped to Ft. Knox.

The balance of this 1.3 million – 1.5 million 400 oz tungsten cache was also plated and then allegedly “sold” into the international market.

Apparently, the global market is literally “stuffed full of 400 oz salted bars”.

Another similar fraud like this turned up in Ethiopia in March of 2008. It should be noted that Ethiopia is the second poorest nation on the planet (Burundi takes first place).

In ‘Fake Fears Over Ethiopia’s Gold’ (http://news.bbc.co.uk/2/hi/africa/7294665.stm), Elizabeth Blunt writes that Ethiopia’s national bank had been told to inspect all the gold in its vaults to determine its authenticity because some of the gold that it bought was gold-plated steel.

Almost two weeks later, Elizabeth Blunt reported that 26 people were arrested for the gold fraud (http://news.bbc.co.uk/2/hi/7315137.stm).

In 1933, President Roosevelt made it illegal for U.S. citizens to own gold bullion. Most nations have made similar laws.

Basically, the only private gold ownership allowed to people is ownership in jewelry or coins like the English sovereign or South African krugerrand.

The problem is that most "gold purchases" by private individuals are really paper purchases. If ‘paper gold’ is based/backed upon the tungsten ‘fool’s gold’ that central banks and governments are trying to keep secret, how deep does this go? And if so, where did the real gold go and/or did it ever exist? Is this another gigantic fraud going on here, like the other ponzi and shadow/dark pool money scams of wal-street?

Many investors and commodity brokers are aware of the fraud in selling paper gold bullion (How much imaginary gold has been sold? - http://privateequityevil.blogspot.com/2009/11/how-much-imaginary-gold-has-been-sold.html).

Adrian Douglas writes in his October 10, 2009 article, ‘The explosive dynamics of the gold and silver markets’ (http://www.gata.org/node/7887):

“… Paper substitutes for gold are sold, instead of real gold, through derivatives, futures, pooled accounts, exchange-traded funds, gold certificates, etc. I estimate that each ounce of gold has been effectively sold 20 times over or more. To maintain this Ponzi scheme, some real gold is required, because some investors or jewelers demand to take possession of real gold. For the scam to be sustained there must always be plentiful physical gold for those who want it.
This physical supply has been met from mine supply and central bank leasing and selling.
The market is in effect a giant inverted pyramid with a huge paper gold market being supported above a small amount of physical gold at the tip of the inverted pyramid. The scam can continue until there are indications of a shortage of physical gold. If the 20 or so claimants of each ounce of real gold demand their gold, there is the potential for a squeeze such as never been seen before…”

In 2008, one country amassed a very large new supply of gold: Russian gold and hard currency reserve holdings hit a record 483.9 billion US dollars, an increase of 2.6 billion US in a single week. Did the Russians find out which gold was ‘good’ and buy it out? Or did they get scammed? Their stocks’ behavior might be worth watching for clues.

Interestingly, as of late September 2008, we saw the US Federal Government beginning to limit the access of ordinary citizens to gold bullion coins - by withdrawing new bullion coins from circulation.

Did the US government have to make up for a sudden "short" supply? More, could some gold coins be as tainted as the bullion in some banks? Where does this all go and who in authority can we believe when ‘western-style’ economics and its leaders can be so greedy, unethical, criminal and evil?

All over the world, people and nations have been buying gold to protect themselves from the coming economic darkness that is being conjured up by the evil wizards of wal-street. Now it seems that gold won’t protect them, either, if gold has been alchemically polluted and tempered with tungsten, steel, hype and bubbles by ‘appointed’ elite males who actually believe they are doing ‘God’s Work’.

The Smirking Chimp blog ran part of an article from www.borowitzreport.com called ‘“Goldman Sachs Not Doing "God's Work," Says Satan’ by Andy Borowitz (November 10, 2009)

The article must have come too close to the Truth. Neither the article or the website will pop up for me. You can read part of it at http://www.smirkingchimp.com/thread/24861

Maybe Satan doesn't want the world to know which ‘god’ the masters of economic disasters really serve so he cut off the URL’s.

To see a list of most of my blogs, go to http://martharosecrow.blogspot.com

I can be contacted at greathierophant@yahoo.com

On Doing God’s Work

2009-11-17T07:04:00.001-08:00

Even Gold is CORRUPTED!!! The puppet masters stripped that out, too!

http://news.goldseek.com/GoldSeek/1258049769.php
http://www.marketoracle.co.uk/Article14996.html

On Doing God’s Work
Thursday, 12 November 2009
By: Rob Kirby
“Gold Finger - A New Take On Operation Grand Slam With A Tungsten Twist”

I’ve already reported on irregular physical gold settlements which occurred in London, England back in the first week of October, 2009. Specifically, these settlements involved the intermediation of at least one Central Bank [The Bank of England] to resolve allocated settlements on behalf of J.P. Morgan and Deutsche Bank – who DID NOT have the gold bullion that they had sold short and were contracted to deliver. At the same time I reported on two other unusual occurrences:

1] - irregularities in the publication of the gold ETF - GLD’s bar list from Sept. 25 – Oct.14 where the length of the bar list went from 1,381 pages to under 200 pages and then back up to 800 or so pages.

2] - reports of 400 oz. “good delivery” bricks of gold found gutted and filled with tungsten within the confines of LBMA approved vaults in Hong Kong.

Why Tungsten?

If anyone were contemplating creating “fake” gold bars, tungsten [at roughly $10 per pound] would be the metal of choice since it has the exact same density as gold making a fake bar salted with tungsten indistinguishable from a solid gold bar by simply weighing it.

Unfortunately, there are now more sordid details to report.

When the news of tungsten “salted” gold bars in Hong Kong first surfaced, many people who I am acquainted with automatically assumed that these bars were manufactured in China – because China is generally viewed as “the knock-off capital of the world”.

Here’s what I now understand really happened:

The amount of “salted tungsten” gold bars in question was allegedly between 5,600 and 5,700 – 400 oz – good delivery bars [roughly 60 metric tonnes].

This was apparently all highly orchestrated by an extremely well financed criminal operation.

Within mere hours of this scam being identified – Chinese officials had many of the perpetrators in custody.

And here’s what the Chinese allegedly uncovered:

Roughly 15 years ago – during the Clinton Administration [think Robert Rubin, Sir Alan Greenspan and Lawrence Summers] – between 1.3 and 1.5 million 400 oz tungsten blanks were allegedly manufactured by a very high-end, sophisticated refiner in the USA [more than 16 Thousand metric tonnes]. Subsequently, 640,000 of these tungsten blanks received their gold plating and WERE shipped to Ft. Knox and remain there to this day. I know folks who have copies of the original shipping docs with dates and exact weights of “tungsten” bars shipped to Ft. Knox.

The balance of this 1.3 million – 1.5 million 400 oz tungsten cache was also plated and then allegedly “sold” into the international market.

Apparently, the global market is literally “stuffed full of 400 oz salted bars”.

Makes one wonder if the Indians were smart enough to assay their 200 tonne haul from the IMF?

A Slow Motion Train Wreck, Years in the Making
An obscure news item originally published in the N.Y. Post [written by Jennifer Anderson] in late Jan. 04 has always ‘stuck in my craw’:

DA investigating NYMEX executive - Manhattan, New York, district attorney's office, Stuart Smith - Melting Pot - Brief Article – Feb. 2, 2004

A top executive at the New York Mercantile Exchange is being investigated by the Manhattan district attorney. Sources close to the exchange said that Stuart Smith, senior vice president of operations at the exchange, was served with a search warrant by the district attorney's office last week. Details of the investigation have not been disclosed, but a NYMEX spokeswoman said it was unrelated to any of the exchange's markets. She declined to comment further other than to say that charges had not been brought. A spokeswoman for the Manhattan district attorney's office also declined comment.

The offices of the Senior Vice President of Operations - NYMEX – is exactly where you would go to find the records [serial number and smelter of origin] for EVERY GOLD BAR ever PHYSICALLY settled on the exchange. They are required to keep these records. These precise records would show the lineage of all the physical gold settled on the exchange and hence "prove" that the amount of gold in question could not have possibly come from the U.S. mining operations – because the amounts in question coming from U.S. smelters would undoubtedly be vastly bigger than domestic mine production.

We never have found out what happened to poor ole Stuart Smith – after his offices were "raided" – he took administrative leave from the NYMEX and he has never been heard from since. Amazingly [or perhaps not], there never was any follow up on in the media on the original story as well as ZERO developments ever stemming from D.A. Morgenthau’s office who executed the search warrant.

Are we to believe that NYMEX offices were raided, the Sr. V.P. of operations then takes leave - all for nothing?

These revelations should provide a “new filter” through which Rothschild exiting the gold market back in 2004 begins to make a little more sense:
“LONDON, April 14, 2004 (Reuters) - NM Rothschild & Sons Ltd., the London-based unit of investment bank Rothschild [ROT.UL], will withdraw from trading commodities, including gold, in London as it reviews its operations, it said on Wednesday.”
Interestingly, GATA’s Bill Murphy speculated about this back in 2004;
“Why is Rothschild leaving the gold business at this time my colleagues and I conjectured today? Just a guess on my part, but suspect:”

*SOMETHING IS AMISS. THEY KNOW A BIG GOLD SCANDAL IS COMING AND THEY WANT NO PART OF IT. …”

“ROTHSCHILD WANTS OUT BEFORE THE PROVERBIAL "S" HITS THE FAN.” BILL MURPHY, LEMETROPOLE, 4-18-2004
Coincidentally [or perhaps, not?], GLD Began Trading 11/12/2004

In light of what has occurred – regarding the Gold ETF, GLD – after reviewing their prospectus yet again, it becomes pretty clear that GLD was established to purposefully deflect investment dollars away from legitimate gold pursuits and to create a stealth, cesspool / catch-all, slush-fund and a likely destination for many of these “salted tungsten bars” where they would never see the light of day – hidden behind the following legalese “shield” from the law:

Excerpt from the GLD prospectus on page 11:

http://www.spdrgoldshares.com/media/GLD/file/SPDRGoldTrustProspectus.pdf

Gold bars allocated to the Trust in connection with the creation of a Basket may not meet the London Good Delivery Standards and, if a Basket is issued against such gold, the Trust may suffer a loss. Neither the Trustee nor the Custodian independently confirms the fineness of the gold bars allocated to the Trust in connection with the creation of a Basket. The gold bars allocated to the Trust by the Custodian may be different from the reported fineness or weight required by the LBMA’s standards for gold bars delivered in settlement of a gold trade, or the London Good Delivery Standards, the standards required by the Trust. If the Trustee nevertheless issues a Basket against such gold, and if the Custodian fails to satisfy its obligation to credit the Trust the amount of any deficiency, the Trust may suffer a loss.

The Fed Has Already Been Caught Lying

Liberty Coin’s Patrick Heller recently wrote,

Earlier this year, the Gold Anti-Trust Action Committee (GATA), filed a second Freedom of Information Act (FOIA) request with the Federal Reserve System for documents from 1990 to date having to do with gold swaps, gold swapped, or proposed gold swaps.

On Aug. 5, The Federal Reserve responded to this FOIA request by adding two more documents to those disclosed to GATA in April 2008 from the earlier FOIA request. These documents totaled 173 pages, many parts of which were redacted (covered up to omit sections of text). The Fed's response also noted that there were 137 pages of documents not disclosed that were alleged to be exempt from disclosure.

GATA appealed this determination on Aug. 20. The appeal asked for more information to substantiate the legitimacy of the claimed exemptions from disclosure and an explanation on why some documents, such as one posted on the Federal Reserve Web site that discusses gold swaps, were not included in the Aug. 5 document release.

In a Sept. 17, 2009, letter on Federal Reserve System letterhead, Federal Reserve governor Kevin M. Warsh completely denied GATA's appeal. The entire text of this letter can be examined at http://www.gata.org/files/GATAFedResponse-09-17-2009.pdf.

The first paragraph on the third page is the most revealing. Warsh wrote, "In connection with your appeal, I have confirmed that the information withheld under exemption 4 consists of confidential commercial or financial information relating to the operations of the Federal Reserve Banks that was obtained within the meaning of exemption 4. This includes information relating to swap arrangements with foreign banks on behalf of the Federal Reserve System and is not the type of information that is customarily disclosed to the public. This information was properly withheld from you."

This paragraph will likely be one of the most important news stories of the year.

Though not stated in plain English, this paragraph is an admission that the Fed has in the past and may now be engaged in trading gold swaps. Warsh's letter contradicts previous Fed statements to GATA denying that it ever engaged in gold swaps during the time period between Jan. 1, 1990 and the present.

[Perhaps most importantly], this was GATA's second FOIA request to the Federal Reserve on the issue of gold swaps. The 173 pages of documents received for the 2009 FOIA request all pre-dated the 2007 FOIA request, which means they should have been released in the response to the earlier FOIA request. This establishes a likelihood that the Federal Reserve has failed to adequately search or disclose relevant documents. Further, the Fed response admitted that it had copies of relevant records that originally appeared on the Treasury Department Web site, but failed to include them in its response.

Now that Federal Reserve governor Warsh has admitted that the Fed has lied in the past about the Fed’s involvement with gold. It should now be very clear to everyone why the Fed is lying and the true nature of what they are hiding / withholding.

On Doing God’s Work

An important footnote to consider is the inter-twined-ness of the U.S. Federal Reserve and the U.S. Treasury [can anyone really tell them apart?] as well as this duopoly’s two principal agents – J.P. Morgan-Chase and Goldman Sachs. When one truly grasps the nature of these highly conflicted relationships it gives a fuller meaning to words recently uttered by Goldman head, Lloyd Blankfein, who claimed,

“I’m doing god’s work”

[My Comment: He's doing the god of evil's work!]

Does this really mean that Mr. Blankfein believes that the Federal Reserve is god? You can judge for yourself. While the Fed prints money like no one else could - except god almighty himself [or Gideon Gono, perhaps?] – I really doubt that was the intent back in 1864, when the U.S. adopted “In God We Trust” as their official motto.

And that’s my two cents worth for today.

Got [real] physical gold yet?

Rob Kirby