July 6, 2022 

Gold Enters Major Bull Market


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 By Rick

06/04/2009  7:20PM

Bluejay is right.

This is debt without asset. It is also by design. The degradation of the dollar is not by accident, but by purpose. As stated, a banana-state (no republic intended) is the focus and intention.

The references cited by Bluejay and Kitco.com are real. It is no longer a fringe topic for a fringe group of "righties" who want Obama to fail. The numbers don't lie. There is no assest, and there is debt. There is no plan to pay the debt back, and there is a plan to watch the debt take hold of our freedom, personal property and Constitution.

Despite the monetary warning (which I missed last time and stayed in the market, yet knowing that my gut told me to get out and solidify my tiny asset base with hard-holding gold, still didn't)....this time I will.

Damn, that it is still tomorrow's task. I keep feeling the cool-aid, but I won't drink it. Tomorrow I will convert my assets to gold, real-live gold.

Simple Math.

"Honey, I think we're broke."
"Great! Let's go spend while we can!"

While we can...time.
 By bluejay

06/04/2009  1:28PM

Last on gold is $980.30, following an early morning low of $960.00.

Copied below are pertinent comments made today b Monty Guild and Tony Danaher at http://www.Guildinvestment.com:


China is positioning itself using a panoply of agreements that include allowing Chinese Yuan bond financing by Hong Kong banks, arranging trade related currency swap agreements with Brazil and six other countries, and working with countries and companies all over to world to lock up assets that it will need to run its production machine. China’s purchases include oil, coal, iron ore, nickel, and zinc to name a few. In short, China is buying assets worldwide –including an ever increasing share of the world’s gold supply — to stoke its economic machine in coming years.

China’s lust for gold is significant and deserves note. The fact is that China has been buying much more gold than it is producing. China is buying gold in the open market, willing to take gold off of the hands of the poorly managed IMF and central banks like Britain, who sold most of their gold at about $250 per ounce. Britain, the IMF, and others who have been, or will be, gold sellers appear to us to be operating with an excess of pompous verbiage and a shortage of common sense.

Gold will be an instrumental part of any new monetary system that is created in the world to succeed the current Breton Woods system. When the U.S. turns over power as the world’s reserve currency to China, it will be China’s large holdings of gold and large cash hoard which will make them a new monetary superpower. When that transition takes place, the old cliché about the golden rule, “Whoever holds the gold makes the rules” will be remembered for its wisdom.

On a side note, http://www.jsmineset.com carried an article today that stated household national debt is currently running at $545,688 and on the rise.

Very few people can grasp that our country is on the road to becoming another banana republic. Geithner and Bernanke lead by their financial handlers are selling out Americans. If the people can't stop them, one of your few hopes is holding gold and silver and the companies that produce it.

Heaven help us all.
 By bluejay

05/28/2009  10:16AM

Last on gold is $960.90.

The following interesting comments were picked up from the ECU forum page at Agoracom.com this morning:

JW: Hitmen hired to strike at crimex and lbme
posted on May 28, 09 10:59AM
Please read the entire article!


The HITMEN have been hired, with highly lucrative contracts and wide berth in methods to be put to use. Their assigned task is to castrate the levered family jewels from some of the major players who illegally keep the gold price and silver price artificially low. The targeted victims know their awaited fate, and are presently defecating in their skivvies. A short list of banks facing the firing squad is already known, details for Hat Trick Letter members. Some detailed speculation will be devoted to the June HTL reports, since too controversial. This will be an evolving story, with new chapters soon written. The executions will be sudden. The missing US-UK levers will be immediate. Since last autumn, the global powers have aligned against Wall Street, even if the central bankers have supported it. If one wants to destroy a building, then weaken its pillars, cut a few support beams, then rush in a crowd of people, and wait for a turbulent storm. In the case of the COMEX, the wicked players will crowd the corrupted building. They will sink into ruin and then oblivion. They might become objects of mockery when they make noises from prison. If lucky, they will join Ken Lay from Enron fame in a remote Caribbean island where other favored operators live a secluded life, but a life nonetheless, complete with plenty of sunshine, fresh air, beaches, bikinis, and sailboats, but no intrusive cameras. Please, do not disturb the quasi-dead!

The financial cartel dominated by the United States and United Kingdom is soon to suffer some serious blows. The list of their financial crimes is as magnificent as it is long. Its list of victims is as prominent as it is long. The harbored resentment is great by many global players. They waited patiently for the Obama Admin to install a new group, but the old group remains due to a revolving door from the same smoky club, dominated by Goldman Sachs once more. Their influence, if not bribery, of the USCongress is in continuation, sufficient for unwanted obsequious approval. The regulatory agencies are from the same encrusted chambers replete with stench. The Coup d’Etat of the USGovt financial offices has not changed with Obama, who sounds like a refreshing leader but who is actually a marionette under control by those who selected him, favored him with publicity, then enabled his election. Nothing has changed except the rhetoric of change and the pace on the path to bankruptcy for a few icon firms like General Motors and Chrysler, if not the desperate cries from the 50 states suffering from insolvency. More prominent failures will follow, since nothing has been remedied. The channeled funds directed to Wall Street firms continue unabated. The bread crumbs to Main Street and the people continue unabated. Even the war continues unabated. Forget not that Marie Antoinette once said “Let them eat cake” before the French Revolution and the Storming of the Bastille. Today, the Bastille is the entire USEconomy where insolvent Americans are stuck.
 By bluejay

05/25/2009  8:31AM

Last on gold this Memorial Day is $957.60

Jim Sinclair’s(jsmineset.com) Commentary

I have not read a better encapsulation of conditions nor have I seen a better reason to get insured immediately if you are not in gold. If you are not insured, prepare to suffer the extraordinary loss of lifestyle you are accustomed to, if not your existence itself.

Let’s call our writer "CIGA Pedro the Informed."

A View From Abroad by an American in Brazil

We are witnessing the end of a very long phase in history. As a result there is a mass insecurity amongst the dominant nations of the past 300-years that is bordering on hysteria. This insecurity manifests itself in many different ways and markets are reflecting this. Gold prepares to soar, reflecting this insecurity, as gold is a barometer of fear.

Within the English-speaking world it is evident that “foreigners” are to blame. In the UK it is both the Poles and the “Pakis”. In America it is initially revealed via a general population viewing the Kyoto Protocol as a Chinese-led trick to destroy our economy. Then it is the belief that Mexicans are “invading” and Arabs are trying to kill us all. One has to stop and ask what the root of this paranoia really is.

As the American power structure tries to prepare for “inevitable conflict” with world Islam (c.f. Huntington, Clash of Civilizations) it also tries to hide its obsequious relationship with the Saudi Royal Family, which is incestuous at best, and perhaps more symbiotic than most would want to know. The financial population cannot reconcile this anymore than they can the fact that (perhaps apart from Jim) the accurate, unblended analysis of this crisis seems to have been foreshadowed by a two people with names: Nouriel Roubini and Naseem Taleb. People remain confused by the fact that the American power structure lacks patriotism and seems to favor its own interests over the interests of the country. They lash out at everyone, including, now, their own leaders. People don’t know whether to “blame” Obama’s socialism or Bush’s self-serving capitalism. Their foreign policies seem different but the rest appears the same. Major banks appear to have more control than we thought….even while teetering on bankruptcy.

This is reflected in markets. Currencies gyrate wildly. As Jim has noted many times, anybody trying to fathom the FX markets and trade them is likely to be carried out of the pit on the proverbial trader’s stretcher with a coronary. First the Euro is finished – its break-down elucidating thoughts of its demise – but then the belief that jettisoning the PIGS (Portugal, Italy (Ireland?), Greece, Spain) might be causing it to rise. The markets are schizophrenic. They don’t know what to think. The dollar and sterling take the brunt. There are reasons for this.

This is a system headed for breakdown. The established historical order is drifting to a close, and nothing can stop it. Changes in policy are manifestations of history – alter it they cannot. Gold’s rise becomes inevitable as countries who have ruled the Imperial phase of history try and resist their diminishment in status. Markets are manipulated as they try and hold on to power, while history shifts under their feet. China and Brasil cut deals that don’t include the USA and UK…the UAE starts to view separate currency arrangements with Russia, foregoing overtures by Saudi Arabia for a Gulf wide (GCC-led) monetary regime. Riyadh’s relationship is too close to Washington. Washington is yesterday’s news. (So much for the conspiracy of Islam.)

The end of an era is upon us. That is the era of the Global hegemon. The first phase took place in Britain, the second in the Soviet Union, and the third in America. Fukayama’s theory of history’s end is immolated on its very alter. The debacle of Iraq, as well as Afghanistan stand as testimony. The dominant powers simply cannot draw borders they way they did at San Remo in 1920 or via the Red-lines which economically created Kuwait. We seem to be unsure if we should break Iraq up, or let it be unified. Is it even our business, or has history out-run us and we have failed to acknowledge it? As the global hegemon is characterized through the Imperial phase of history, now draws to a close, people stand confused and amazed. The rulers of the dominant nations appear ready to sell them out…and this appears as “news” to educated observers.

Nobody can be sure of any currency regime any longer. The markets gyrate wildly. As fear and insecurity mount, Gold prepares for take off.
 By Rick

05/24/2009  5:47PM

For the time being, the Allegany gold production has peaked as well. The many many thousands of ounces of gold broght to the surface had much more of a chance to be discovered back when the oppressive forearms of anti-freedom statists weren't held so tightly to our throats....

These oppressive demamgogue statists, who believe they are the country and not the other way around, weren't around when the shackles allowed the spirits of miners to flourish.

This is the only conclusion I can draw regarding the reluctance and nervous posture of investor potential.

All shareholders will recall when the CDAA threw a dagger into the mix, breaking laws and ignoring facts, and scared everyone away...and Mike Miller brought the issue forth during that year's shareholder meeting: what was the sentiment and what were the consequences of doing nothing compared to fighting back?

History is always hindsight, but I believe the history of that protracted fight and subsequent railroading by yellow-bellied court crooks in the appellet court tells the story very well: the back-bone of virtue, freedom, inovative discovery and persistance is written in the record.
 By bluejay

05/23/2009  11:38PM

Bloomberg TV is showing a last cash sale for gold of $957.35.

Supplied below is a link to an informative report on gold relating to world production and the prominent regional producers. The writer, Thomas Chaize, has been stressing over recent years that world gold production has peaked.

The article has been translated to English from its orginal French format.

 By bluejay

05/22/2009  12:54AM

Last on gold is $952.00

“Gold cannot decline from its highs as it will be incorporated into the national and international monetary systems at that time.”
–Alf Fields, May 20, 2009

Now do you have any questions why Fund Wizard Paulson just got long a few billion dollars worth of Gold ETFs and a few major gold producers?

Finally a major event has taken place that is a US dollar milestone.

The financing and extremely important event is the arrangement between China and Brazil displaces the dollar as China becomes the major trading partner with Brazil. Since then the Rial has been celebrating and the dollar has been depressed.

This is a once in approximately a century replacement of a trading currency that has always meant a dethronement of the deposed and coronation of a new currency king.

The last time this happened was when the US dollar supplanted the British Pound as the major trading currency and entity with Brazil 79 years ago.

It took the Brits 300 years to supplant the Portuguese Escudo with the British Pound.

Only twice has this occurred in 379 years. This is obscure to most but not to Mr. Paulson the hedge wizard. Obscure to most, but not to our gang at JSMineset.

The dollar died in Rio and that means everywhere.\

The dollar is in for a very cold winter.

There is one thing that is absolutely certain and that is Gold is now headed to at least $1650 and in all probability much higher. This is happening NOW!

What more do you need to know?
 By bluejay

05/16/2009  10:04AM

Gold closed the week at $930.90

Evidently, the Telegraph took a lot of heat from Washinton concerning the recent article entitled "Geithner Enriches Speculators in "Sham Bank" Bail-Outs and took the story down from their website.

The truth will set you free.

The interaction between government, the media, and Wall Street.

Thursday, May 14, 2009
Geithner enriches speculators in "sham" bank bail-outs - Telegraph

Update (May 15): The article that was linked to this posting has been taken down by the newspaper. So, now you will not only not hear about it on CNBC, it is not in the press anywhere.

Original post:
At the Qatar Global Investment Forum, Mark Patterson shed some light on Geithner's Wall Street giveaway plan. This is not new information to Fraudonomics readers, but it is nice to have someone who is participating in the scheme tell the truth for a change. His words would cut like a knife if anyone in the government gave a damn about anything other than enriching the friends of Timmy and Ben.

Notice that the story is being carried by a British newspaper. I doubt if you will hear about it on CNBC. Enjoy!

Geithner enriches speculators in "sham" bank bail-outs - Telegraph: "The US Treasury’s effort to stabilise the banking system through the TARP programme is a hopelessly ill-conceived policy that enriches speculators at public expense, according to the buy-out firm supposed to be pioneering the joint public-private bank rescues.

“The taxpayers ought to know that we are in effect receiving a subsidy. They put in 40pc of the money but get little of the equity upside,” said Mark Patterson, chairman of MatlinPatterson Advisers.

The comments are likely to infuriate Tim Geithner, the US Treasury Secretary, because MatlinPatterson took advantage of the TARP’s matching funds to buy Flagstar Bancorp in Michigan. His confession appears to validate concerns that the bail-out strategy is geared towards Wall Street.

Under the convoluted deal agreed earlier this year, MatlinPatterson has come to own 80pc of the shares while the US government has ended up with under 10pc.

Mr Patterson said the US Treasury is out of its depth and seems to be trying to put off drastic action by pretending that the banking system is still viable.

“It’s a sham. The banks are insolvent. The US government is trying to sedate the public because they are down to the last $100bn (£66bn) of the $700bn TARP funds. They think they’re doing this for the greater good of society,” he said, speaking at the Qatar Global Investment Forum.

Mr Patterson said it would be better for the US to bite the bullet as Britain has done, accepting that crippled lenders must be nationalised. “At least the British are not hiding the bail-out,” he said.

MatlinPatterson said private equity and hedge funds were deluding themselves in hoping to go back to business as usual after the trauma of the last 18 months.

“This is not a normal recession and there will be no V-shaped recovery. The crisis has destroyed leveraged companies. We’re going to see a catastrophic increase in the number of LBO’s (leveraged buyouts) going into default because they’re knee-deep in debt and no solution exists since they can’t refinance,” he said.

“Alfa hedge funds have been making their money by gambling with excessive leverage, so the knife that cuts off leverage is going to cut off their heads as well,” he said.

Like many bears, Mr Patterson expects the great crunch to end in deliberate inflation, deemed a lesser evil than outright depression.

“The US government has thrown 29pc of GDP at this crisis compared to 8pc in the early 1930s. The Fed’s balance sheet has risen from $900bn to $2.7 trillion to bail out the system. America has to do it because the only way out is to debase the currency, but that is going to lead to some very high inflation three years down the road,” he said.

Matlin Patterson, however, has missed the Spring rebound, the most powerful rise in equities in over 70 years. “We shorted the equity rally because we thought it was lunatic. We’ve kept adding positions seven times, and we’re still holding,” he said. Ouch!"
 By bluejay

05/10/2009  8:38PM

Last of gold is $915.00.

The following submitted excerpts of a longer report were written by Mr. Murry Pollitt who is president of Pollitt & Company in Toronto.

Usually I provide a link but since these copied excerpts were from Agoracom.com it wouldn't have been easy to access, so no link.

Most interesting which you don't see often is Mr. Pollitt's questioning the accuracy of GFMS's(formerly Gold Fields Mineral Services) reporting and why? Otherwise, the excerpts are an excellent presentation of the truth concerning the lengths that some groups will go to to keep gold's price depressed and why those efforts are becoming strained.

Murray Pollitt: The gold monetization scheme is ending

By Murray Pollitt
Pollitt & Co., Toronto
Thursday, April 30, 2009

The G8 appears finished but their policymakers continue to try to bend the G20, and the world, to their will. The establishment, the Fed, the Bank of England, the Bank for International Settlements, the same gang that has been setting policy for decades, is still at it. They appear to remain in charge (with nary a whimper of criticism about the trillions of dollars' worth of damage their policies have caused) but, when it comes to gold, they are slowly losing their grip.

Besides setting the stage decades ago for sub-prime paper, CDSs, and so on, it appears policymakers embarked on a scheme, at more or less the same time, to monetize the hundreds of billions of dollars' worth of gold lying sterile in central bank vaults. The temptation was too much. One-percent income on gold for a central bank was better than nothing, so the argument ran, and for the Lehman types borrowing gold (and selling it) provided lots of money (capital) to play games with.

It was so easy. Besides, the gold carry trade involved selling lots of gold into the market and this helped keep the price down (and hopefully the dollar up), a subject near and dear to policymakers.

It also led to: a) huge mine hedging with the two biggest miners, each with a link to Morgan, together short over 30 million ounces ("making money on gold in the ground" was the argument) and b) significant outright central bank sales, which may have been interventionist or may have been for portfolio diversification, however ill-advised.

And if banks and markets didn't always follow the script, there was always high-level intervention. To illustrate the mindset, in 2004 one William White, advisor to the BIS, talked about the need for "international credits and joint efforts to influence asset prices (especially gold and foreign exchange) in circumstances where this might be thought useful." The idea of rigging markets is as old as the hills, and if the government is on your side. ...

Anyway, the great gold monetization (mobilization?) scheme appears to have started in the 1980s and the following events that, in part, characterize it are not necessarily in sequence.

1) Goldman bought gold dealer J. Aron.

2) In an early gold carry trade, Drexel borrowed hundreds of tonnes of gold from Portugal.

3) All the big swinging banks sought to get into the gold game and they bought all the London gold dealers except Rothschild, which was definitely in on the game on its own.

4) Mine hedging was pushed very hard, to a peak of about 120 million ounces.

5) Greenspan and others dropped broad hints that central Banks stood "ready" to supply gold to the market.

6) Drexel went broke and it apparently took Portugal five years to recover its gold.

7) Two long-term gold players, Republic and Safra, each with a somewhat checkered past, had a shotgun wedding. Later Mr. Safra was fried to death in his Monte Carlo apartment, presumably for nonrepayment of gold.

8) Two of the largest American players, JP Morgan and Chase, also had a shotgun wedding and now carry more gold derivatives than can be imagined.

9) Much of the Drexel brain trust apparently went to work for AIG, which promptly started boasting about mine hedging.

10) HSBC (often advised by Paul Volcker) bought Midland Bank (which had earlier bought bullion dealer Samuel Montagu) and, in another shotgun wedding, bought Republic, transactions that made HSBC one of the major gold players. HSBC's U.S. subsidiary is now the custodian for the SPDR ETF.

11) When the gold price started to move up, Rothschild said enough and sold its "book" (at a loss?) to Barclays.

12) Finally there was recently a shotgun wedding between Dresdner bank and Commerzbank.

Crisp details are rare, but the past generation has seen hundreds of millions of ounces of gold bled into the market. Canadian and Australian gold reserves are gone; Britain, Switzerland, and many others are down by two-thirds.

But this doesn't count the gold that has been lent. In general it seems that the same sort of banks that got into trouble investing in high-yield, low-quality sub- prime paper have also taken short positions in low-yield, high-quality gold. Too many favorite-son banks are on the wrong side of the market for policymakers to be rational. Given the option between common sense and helping a bank, well, the record is clear. This is probably the main reason the establishment remains anti-gold today -- the old ideological reasons are not that relevant.

So once again they trot out the idea of International Monetary Fund gold sales. What rubbish. The IMF hasn't sold gold since the 1970s, but every year the idea is advanced to frighten the gold market. Why would the IMF sell $10 billion of gold when central banks are printing $10 billion of new money every day? Gold is the only IMF asset worth 100 cents on the dollar -- everything else is junk.

As well the establishment hammers on the idea that the gold price is high, and GFMS continues its weird forecasts.

Well, the gold price is not high. Oil and several other commodities have outperformed gold since World War II. A good underground gold mine may grade 5 parts per million (ppm) while a good open pit may grade 1 ppm.

Nobody who has said the gold price is high has ever spent a nine-hour shift drilling rock -- it's a tough business. God only knows the blood-to-gold ratio for old Roman mines in Spain or Spanish mines in Peru, and getting the gold from mine to home base was often not easy. Much Victorian gold went from Ashanti by caravan through Timbuktu, the Sahara, and on to Europe -- the Brits were hardly keen to auction it off then.

Gold mine production is down about 12 percent from the 2001 peak (and still falling) and Barrick shares have barely moved in a decade. Much of the industry's cash flow is attributable to accounting magic, and the long years, even decades, of gold price suppression have taken their toll. There are few major new mines on the horizon, and lots of old ones on the way out.

Notwithstanding, GFMS has consistently forecast rising production for the past eight years (even though it has consistently fallen), raising the question: Why?

Our guess is that GFMS' big clients are the very banks we refer to above, the ones on the wrong side of the market, and for them Ms. Rosy Scenario needs the healthy, and expanding, industry model that GFMS gives them.

What are companies like Commerzbank and Societe Generale doing sponsoring GFMS anyway? Neither Germany nor France has any gold mining industry at all.

One would have to be barking mad not to see the benefits a higher gold price would have on vast chunks of the global economy. Even long-suffering Zimbabwe would be a huge beneficiary, and more wealth in Africa and Latin America would mean more exports of Fords and Cats from the United States. The establishment may not care, but that won't stop G20 members (and others) from connecting the dots and following China's lead in increasing gold weighting in monetary reserves.

Gold is again becoming a preferred central bank asset and the great monetization scheme is coming to an end. Western policymakers and banks have pushed their game too far for too long and the combination of the shift of power from G8 to G20, plus the reduced availability of gold, will turn the tide. You can sell gold only once, although, in the new wondrous world of derivatives, maybe somebody has actually sold it twice.


Murry Pollitt is president of Pollitt & Co., a brokerage firm in Toronto, and a veteran of mining industry finance. This essay is excerpted from his latest letter client letter and reprinted by permission.
 By bluejay

05/08/2009  8:33PM

Gold closed the week at $916.20, up about $16.

The dollar(USDX) closed out the week at 82.41, off about 2.50.

One last entry on the US Dollar from Jim Sinclair tonight at http://www.jsmineset.com:

My Dear Friends,

Under USDX .8200 the wheels of hyperinflation start turning.

Under USDX .7200 the impact of hyperinflation is visible to anyone who can see.

Under USDX .6200 the Quantitative Easing madness hits the fan

Under USDX .5200 Zimbabwe economics now being practiced become a US dollar condition moniker.


Respectfully yours,
 By bluejay

05/08/2009  5:20PM

Last on gold is $916.20.

The following remarks concerning the Dollar were made by an agoracom.com poster.

Terresainte is from Geneva

Dollar on retreat today -1.8% vs euro, -2.2% vs swissie

posted on May 08, 09 02:53PM

Would this be the beginning of the managed dollar takedown, e.g. vs hard currencies gold, silver? a hidden tax on dollar denominated holdings and purchasing power, no legislation or anything required. For foreign currency holders precious metals would get more attractive.

Warren Buffet: "With political leaders showing little inclination to raise taxes, one sure way to pay for excess spending is to inflate the value of the currency, Buffett said. The biggest losers in a surge of inflation, he added, would include holders of bonds and other fixed-income assets.

I haven't had my taxes raised," said Buffett, "My guess is the ultimate price will be paid by a shrinkage of the value of the dollar."

Jim Sinclair and Martin Armstrong have said the next contact with gold at $1,000 which makes it its third attempt, pushes it through for good. From here on out, it's China versus the COMEX boys.

I vote with the guy who holds almost 2$ trillion in foreign reserves.
 By bluejay

05/08/2009  12:57PM

Gold's last is $915.10.

The US dollar looks like its months of recent strength are nearing a close. In today's activity the dollar is quite weak against the Euro and Cando. The Loonie is up 1.52% at .8682 and continues to advance against the sagging dollar. Overall, the Dollar Index if off 0.62 today at 83.21. For some past weeks it had found support at the 84 level.

I guess George Soros knew what he was doing by selling the dollar in the 85.00 to 86.00 zone and above recently. It was fairly easy to pick this up from a recent Bloomberg interview of him when he was asked the question, What do you think of the dollar? Soros' comment was, "No comment." To me, that meant that he was in the midst of a US dollar currency positioning operation.

Chosing whether he was buying or selling was, also, not too complicated. Was the dollar at a international public orientented top or bottom? Easy guess, a top.

With the dollar breaking recent support at the 84.00 level, this event is expected to be mirrored in the time ahead with a rising gold price. Yes, it is time for us to show the world our hidden and elusive gold.

I always enjoy reading Dave's and Rick's well thought out comments.
 By Dave I.

05/07/2009  11:53PM

That is better than taxing flatulent activity
 By Rick

05/07/2009  6:02PM

Two major problems: 1) our national resources are being rejected as potential pollution, which is a complete oxymoron when economic analysis proves how importation of oil is far more costly than allowing the free market to bring forth our own natural resource oil, and 2) the current administration is doing everything it can dream up to not only kill the free market economy in this country, but condemn any capitalist incentive to see it achieve.

China is laughing its ass off, along with every other country that knows that taxing volcanoes would be about as sensible as hog-tying our own natural resources.

Hey, what a great idea! My new bumper sticker: TAX A VOLCANO, THINK OF THE REVENUE
 By Dave I.

05/07/2009  5:00PM

The reason the dollar has remained strong is because of our gross domestic production of a free market and its reliability to remain stable backed by all of our national resources.
The Chinese are a command economy, more efficient, but less innovative for the individual to drive for success.
Then there is the old quote " He who has the most gold makes the rules" it is time for us to take the gold from the ground to display for the world to see.
 By bluejay

05/07/2009  10:53AM

Last on gold is $912.60.

/More on China/

U.S. Dollar, Yuan and the New Reserve Currency
Chinese are making small moves to get more and more insulation from the dollar.

By Vadim Pokhlebkin
Thu, 02 Apr 2009 10:00:00 ET Email | Print | RSS | My Updates Bookmark and share It!

There has been a lot of talk lately about replacing the U.S. dollar as the world's reserve currency. Read these thoughts on this and another hot subject -- China's dependence on the dollar -- by Chris Carolan, the editor of Elliott Wave International's Sunday-Tuesday-Thursday Asian-Pacific Short Term Update. (Excerpted from the recent APSTU issues.)

...the Chinese have announced that they would like the world to establish a reserve currency alternative to the dollar, perhaps under the auspices of the IMF. The U.S. has responded (through Paul Volcker) that the Chinese have created their own predicament by not allowing the yuan to float higher. But we believe that the larger trends to watch are the inevitable leadership role that the Asian-Pacific markets will play in the next bull market as they have access to cheaper capital than the debt-stressed West.

We think that people who focus on the alleged Chinese problem of holding too many dollars miss the point. In the long run, they can reduce their new dollar positions, while the U.S. government is, through their recent actions especially, committing themselves to issuing greater and greater amounts of dollar debt. The Chinese can (and may) push themselves away from the table, but the U.S. does not have the luxury of that freedom.

The yuan, whose exchange rate is controlled, seems to be pushing higher within the boundaries of its restricted trading. [This] chart shows the dollar falling relative to the yuan.

(Sorry chart would not transfer)

How will the Chinese cut their exposure to the dollar over time? News accounts tend to focus on one big event, such as the possibility of a new reserve currency to replace the dollar. But in all likelihood, the Chinese will be making a series of moves, each one gaining them a little bit of insulation from the dollar. If they can protect one hundred billion (US$) here and another one hundred billion there, pretty soon they will have cut their dollar exposure significantly.

We highlighted one such action in our recent discussion of China’s move into owning more resources as a way of diversifying out of the dollar. Now comes news of China executing more currency swaps, where they trade yuan for a local currency, thereby allowing that trading partner to use the yuan in future trade with China. These swaps then remove the need for dollars as an intermediary exchange between trading partners. The Chinese have signed six such swap agreements since November totaling $95 billion. The latest swap agreement is with Argentina.

Step by incremental step, the Chinese are solving their dollar problem, or at least ameliorating it. Those looking for that one big news event to signal the dollar’s irrelevance may be missing the trend, though such an event may still occur further out in time
 By bluejay

05/06/2009  10:53PM

Last on gold is $913.80 in Asian markets tonight.

The most significant development for gold has been the recent announcement by China that they have secretly added gold to their reserves over the past few years with a well placed official stating that this trend should continue.

China for some time now has been bartering off US dollars for natural resources around the world. Since they hold large quantities of US Treasuries they have to be delicate in their divestiture of them. As they slide out of some of their Treasuries, it is at the same time they're maintaining the posture that they continue to buy them but overall their holdings are being scaled down.

China is preparing for their future and it doesn't involve the US dollar being the world's reserve currency. China is increasing its central bank hoard of gold in preparation for the Yuan becoming the world's reserve currency within 20 years or sooner.

The bottom line is that China has declared war against those who are manipulating gold's price to prop up their ailing fiat currencies as they have being since Bretton Woods and before.

It appears that China, as the number one producer of gold, is no longer willing to stand idly by watching fiat central bank manipulation of the gold price. One has to only recall that it wasn't too long ago that China suggested that the IMF sell its entire holdings of gold. Not only is China keeping all their domestic gold in country along with nibbling here and there on the international market, they want all the IMF's gold. One can only guess what amount of gold they are looking for.

Our central bank has manipulated gold where it stands today, well below where their own skewed CPI figures dictates it should be somewhere in the neighborhood of $2500 an ounce just to keep up with the erosion of our money's real worth.

The paper products shorting of gold at the COMEX by the bullion banks is just a matter of time before it all becomes history and blows up in the end. The supposed largest central bank holdings of gold by the US and Germany may very well be challenged in the not too distant future. It's my belief that these two countries have known the jig is up for the past 18 months and are scampering to get the gold back quietly. Has anyone wondered where all the scrap gold sales that amounted to about 500 tons went last year? Who is running all these offers on TV to buy the public's old gold jewelry for "quick cash" during this severe recession?

Let the games begin!

China wants to buy more gold

Posted Apr 24th 2009 6:20PM by Connie Madon
Filed under: International markets, China, Commodities, Financial Crisis

In rare public announcement, China has revealed its gold holdings, which are 1,054 tons up from 600 tons in 2002. Why is China's gold pot of concern to us? Well, for one thing China has been moving away from the US dollar as part of their reserve holdings since 2005. China is increasingly worried about the world economies and wants to protect itself against any deepening of the world financial crisis.

China is also asserting itself on the world stage. Chinese leaders feel that the country's gold holdings must be increased because of the size of China'a economy and the strengthening of its currency.

In a policy statement Hou Huimin, vice general secretary of the China Gold Association said that China should build its reserves to 5,000 tons. He feels that China should hold more gold than any other country because of China's international status and because of the financial crisis. He further said: "The financial crisis means the US dollar's value is changing fast and it may retreat from being the international reserve currency. If that happens, whoever holds the gold will be at an advantage."
 By bluejay

05/05/2009  10:55PM

Last on gold is $902.40

Effectively, Venezuela is reducing their gold exports by requiring the central bank to increase its purchases of the metal. Venezuela joins China in building up their gold reserves.

 By bluejay

05/03/2009  1:44PM

Gold $885.80
Silver $12.50
Gold/Silver Ratio 70.86
Gold/Xau Ratio 7.36
Canadian Dollar $0.8435

The Canadian Dollar's last sale is provided as an incentive for consideration to follow its action in the months ahead or take action as a result of its recently completed bottom formation against the US dollar when it advanced over $0.83. Smart money will be aggressively trading in their US dollars for Canadian dollars in purchasing Canadian gold orientented securities on any renewed strength in gold. In the mean time, these securities should have strong bids going forward as a result of the US dollar going negative against the Loonie.

Your secured cash wealth can be moved from US Treasuries into Canadian Government bonds with a great probability of success. Thus, avoiding continuing debasement of the US currency which the government likes to call inflation using their Mickey Mouse formula for it.

Just read in this mornings paper that Social Security increases for inflation adjustment will stop for the next two years. Whatever the cooked up reason is for this, it sucks. I guess the bankers are more important to them than are elderly which should require more respect than the government is willing to extend to them in their obvious time of need due to this cruel recession. Cut our Social Security inflation adjustments increases and keep handing out our IOU's to the banks when they are the big screw-ups is not the way to make friends.

There appears to be a floor in gold market at $860 as a result of China's declared intention to increase their gold reserves in a boston.com carried report from Shanghai/Beijing Reuters published on April 24, 2009. China revealed that it has been secretly buying gold. Currently, they hold 1,054 tons or $30.9 billion at current levels. Considering the Chinese hold nearly $2 trillion in their reserves account, they will have no trouble coming up with cash for more purchases anytime that they feel the metal is underpriced. The most significant aspect of their announcement is that a new trend has begun to acquire the royal metal by a potential sizable buyer.

Why did China ever make this disclosure if they are still buyers? It's quite apparent that it was intended as a stern warning to US monetary officials to get their house in order, or else. Reuters reports that Mr. Hou Huimin, vice general secretary of the China Gold Association, said China should build its reserves to 5,000 tons.

It will be a most interesting scenario in the months and years ahead witnessing China buying more gold for cash as opposed to the bullion bankers playing with the gold price on the COMEX with paper instruments or mirrors. The bottom line is that gold exports from China will cease to exist in the years ahead while they are temporarily the biggest world producing country. I say temporarily because China's gold deposits that can be mined at a profit at prevailing prices are only good for another 6 years or so. Some analysts say it could be as long as 14 years. Massively Putting the drill bit to the ground will tell the final story.

The silver market at $12.50 an ounce is still recovering from the damage done to it by some US banks in shorting it from the later part of last year from just under $20 all the way down to just about $8. The CFTC is a shameful outfit when they turned their heads while miners and silver holders were getting robbed blind during the beginnings of the banking crisis. The CFTC has a habit of listening only to the short manipulators and not the boni fided cash buyers.

As an example of this, years ago when Warren Buffett began acquiring a big silver position through a Connecticut broker and squeezing the shorts they all went crying and complained to the CFTC. The CFTC tracked down the broker buyer and demanded to know who they were representing. The buyer, Buffett, instructed his broker not to give up his name. The end result was that Buffett sold his silver forcing down prices in a hurry and packed his money bags and moved his buying operation to London where he acquired a $1 billion position and left it there, far away from the hands of the CFTC and its friends. When I complained through my Congressional representative concerning the bank's manipulative activity in the silver market last year, I have yet to see any regulatory action or a response to the complaint. I guess we know who is working for whom.

The Gold/Silver Ratio at 70.86 is still acting in favor of gold over silver. For the ratio to turn positive for silver against gold it has to spend some chart time below the 69.00 mark, then we'll see.

The Gold/XAU Ratio is in neutral territory at the moment. Above the 7.60 level it supports a better relative strength for gold while below 7.00 supports the case to hold gold shares versus the bullion.
 By bluejay

04/15/2009  3:43PM

Gold $890.80 UP $0.20
Silver $12.77 UP $0.01

Martin Armstrong's April 9th, 2009 commentary is available from the provided link below.

Mr. Armstrong's words give a surprising better insight into a Goldman Sach's conspiracy to control world financial markets along with his explanation why is was sent to prison and why he remains there.

The informative article is a real eye opener and may shake your world of beliefs but it is worth your time.


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