October 14, 2019 
 Monday 
 
 

Forum
Topic:
Gold Enters Major Bull Market

       

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 By bluejay

11/19/2008  9:20PM

Last on gold is $736.90.

It was reported yesterday by a Beijing paper, Guangzhou Daily, that its central bank is considering the purchase of 4000 tons of gold. This equates to their possibly acquiring 128,600,000 ounces of gold.

China currently holds $1.9 trillion in reserves mainly in US paper products. If China did commit to purchasing 4000 tons this would use up only about 5% of their reserves.

Jim Sinclair made the following comment today, "Once 21,000 bars have been taken(from COMEX) the paper gold’s reign over the price of gold is over." 21,000 bars times 100 ounces equals 2,100,000 ounces of gold. I'm not sure if the COMEX bars are in 100 ounce lots but I figued it out that way to get total ounces anyway. If this is not correct, would someone please correct me.

The bottom line: There is a sizable potential buyer indicating, unofficially, that they may have a need for 128,600,000 ounces of gold. Where is this gold going to come from if China goes ahead with their possible buy program? What will COMEX do if China comes knocking with intentions on taking delivery?
 By bluejay

11/19/2008  9:36AM

Last on gold is $735.20.

Gold at one time was higher this morning at $764 only to have gotten smacked again by the dark forces with paper selling at the COMEX led by the strong arm of the Treasury and Hank Paulson via JP Morgan.

The following is a youtube presentation by Mr. Max Keiser doing what he does best, calling a spade a spade.

http://www.youtube.com/watch?v=PRe0lIbSeaE
 By bluejay

11/18/2008  11:12PM

Last on gold is $739.10.

The following is a clear message from China to the US: get your house in order. This perceived indirect message is especially serious as it follows last weekends G20 meeting of finance ministers and central bank governors.

Adding insult to injury President Hu Jintao of China who attended the G20 gathering visited Fidel Castro directly following the meetings. China is continuing to pump money into Cuba's economy in providing the funds for renovating and rebuilding aging hospitals and ports. China is also providing money to Costa Rica for the building of a refinery.


China PBOC Mulls Raising Gold Reserve By 4,000 Tons - Report
Wed, Nov 19 2008, 01:51 GMT

China PBOC Mulls Raising Gold Reserve By 4,000 Tons - Report

BEIJING (Dow Jones)--China's central bank is considering raising its gold reserve by 4,000 metric tons from 600 tons to diversify risks brought by the country's huge foreign exchange reserves, the Guangzhou Daily reported, citing unnamed industry people in Hong Kong.

The Guangzhou-based newspaper didn't elaborate on the plan.

China's forex reserves, at US$1.9056 trillion at the end of September, is the world's largest. U.S. dollar-denominated assets, including U.S. treasury bonds and mortgage agency bonds, account for a big proportion of the forex reserves.
 By bluejay

11/13/2008  11:25AM

Gold $714.00 up $4.50
Silver $9.03 down $0.22
Gold/XAU Ratio 9.71
Gold/Silver Ratio 79.09
DJ Industrials 8079.24 off 203.42
Crude Oil 55.53 0ff $0.63
US Dollar Index 87.98 plus 0.33

For the fist time the Treasury's agent JP Morgan is having difficulty keeping gold in a locked step with the declining DJ Industrial Averages.

It seems that from the action of gold today from a low of $698.50 to its last sale of $714.00, while the Dow remains in minus 200 red ink, a battle of the titans at COMEX may be in play.

Rumors have been circulating that there will be a big push in contract delivery requests for physical gold and silver for the month of December. Rumors have also been circulating that these requests may bust COMEX and force it to close as their suspected inventories do not match the amount of December contracts outstanding. Time will tell.

Its seems that such an event could settle the great disparity of prices that currently exists between paper prices at COMEX versus the physical market.

If for what any reason COMEX is unable to deliver any precious metals requested that particular metal would easily advance to new highs.
 By bluejay

11/12/2008  10:57PM

Last on gold is $713.90.
Last on crude oil is 55.38

It wouldn't be surprising to find out that JP Morgan is forcing down oil prices with the blessings of the Treasury. Not only has JP Morgan become a major influence on gold and silver exchanges but it has entered the oil and natural gas markets within the past year or so, also, as a major player. In case most people aren't aware of this, JP Morgan is now classified as a bank.

It seems odd these days that the banking industry is being allowed to effect prices in the commodities markets. JP Morgan and Goldman Sachs have close connections to the Treasury as they have been their main bullion banks to go to when they want gold lower. Since these guys are agents of the Treasury they basically have a blank check to accomplish the Treasury's orders at exchanges with no questions ever asked relating to their substance.

As with the precious metals markets along with the oil and natural gas markets, JP Morgan has most probably been on the short side. It's hard to imagine that the oil producing countries aren't aware of Morgan's exploits in oil and gas. It seems that we are sacrificing international relations just so the Treasury can bolster the economy somewhat as banks and other companies continue to suffer from capital loss.

Just as a reminder of why our economy is in so much trouble, some excerpts from Antal Fekete's October 20, 2008 article entitled "The Mechanisim of Capital Destruction" are provided:

Liquidation Value of Bonded Debt

Falling interest rates destroy capital in a way that is more subtle than destruction through rising rates. The liquidation-value of debt, contracted earlier at higher rates, rises. "Liquidation value" is the lump sum it takes to liquidate debt, should it be necessary to retire it before maturity -- for example, in the case of takeovers, mergers, shotgun marriages, bankruptcies, or the nationalization of the banking system. The point is that as the rate of interest falls, the liquidation value of debt rises. Why? Well, the stream of interest payments now has to be discounted at a lower rate. Therefore at maturity it falls short of liquidating the debt.

Here is a familiar example, the liquidation value of bonded debt. When the rate of interest falls, the market immediately bids up the price of bonds. The higher bond price represents the higher liquidation value of the underlying debt. The fall in the rate of interest, far from alleviating the burden of debt, aggravates it.

Bank capital has been eaten away by the fall of interest rates. The impairment has been ignored and, after 28 years of negligence the global banking system stands denuded of capital. Those shareholders who can read balance sheets see through the fancy values banks are putting on their assets. They dump the stock before bank capital goes all the way to zero.

This is not a real estate crisis, nor is it a sub-prime crisis. This is a crisis caused by the destruction (of) bank capital across the board, through the wrecker's ball of swinging interest rates. In the final analysis, it has been caused by exiling gold from the banking system.

Dissipating Capital Under False Pretenses

People tend to have a religious faith in the Fed's miraculous power to create something out of nothing. They think that the Fed is above capital requirements and accounting rules. They think that the Fed is above the law. They dismiss the idea that the Fed, too, can suffer from capital inadequacy, or that it may not be able to escape the ill effects of falling interest rates.

The Federal Reserve Act(as amended) explicitly forbids the Treasury from participating in the earnings of the Fed. The purpose of this provision is to retain the undivided surplus in the Federal Reserve System to meet emergencies precisely like the present crisis. The conspiracy of the Treasury and the Fed ignores this provision of the law. Year in and out the Fed remits about 90 percent of its earnings to the Treasury under false pretences, calling it the "franchise tax on Federal Reserve Notes." No sooner had the Treasury received the remittance than it spent the proceeds, and more, on consumption. As a result, the Fed is left with no undivided surpluses and no cushion to fall back on in hard times. And the Treasury has debt far greater than it has resources to retire. This high-handed disregard for the law is motivated by the desire to foster a public image of the Fed as an institution with supernatural powers. The Fed has the magic wand and can wave it to solve any problem by throwing money at it. In this view the Fed is not a bank, but the embodiment of divine power.
 By bluejay

11/12/2008  10:50AM

Gold $717.80 off $13.60
Silver $9.39 off $ 0.39
Gold/XAU Ratio 9.10
Gold/Silver Ratio 76.44
US Dollar 87.26 up 0.07
DJ Industrials 8395.52 off 298.44

The selling by the suspected banks and the Treasury(aka PPT) continues to have its effect on the price of gold. No fundamental or technical positives seem to effect the large amounts of paper that are being thrown at gold on the COMEX Exchange in NY. The whole scenario from the Exchange, to the CFTC to the Treasury represents a rigged game which is a far cry from free markets.

Things just got a little worse with the recent naming of Larry Summers as the new Secretary of the Treasury. According to sinbob at agoracom.com Larry runs with "Geithner, Corzine, Volcker, Fisher, Phil Gramm, Bernanke, Hank Paulson, not to mention Alan Greenspan, al al are buddies; they play golf together; they have links to the Council on Foreign Relations and the Bilderbergs; they act concurrently in accordance with interests of Wall Street; they meet behind closed doors; they are on the same wave length; they are Democrats and Republicans."

Going on sinbob states, "While they may disagree on some issues, they are firmly committed to the Washington-Wall Street Consensus. They are utterly ruthless in their management of economic and financial processes. Their actions are profit driven. Outside of their narrow interest in the "efficiency of markets," they have little concern for "living human beings." How are people's lives affected by the deadly gamut of macro-economic and financial reforms, which is spearheading entire sectors of economic activity into bankruptcy.(?)

The complete article with some specific history concerning Summers in available by using the following link:

http://www.agoracom.com/ir/ECU/messages/999759.

In 1991 Larry was the Chief Economist at the World Bank and made some disturbing commments on why dumping our waste in third world countries made perfect economic sense.

Sinbob has done some excellent research into Larry Summers involvement in the 1997 Asian Crises and in the 1999 Financial Services Modernization Act that permitted OTC derivatives to blossom into the world's current financial meltdown.

Sinbob titled his presentation as, "Putting the Fox in Charge of the Chicken Coop."

Nothing could be closer to the truth.
 By bluejay

11/10/2008  10:28AM

Gold $742.20
Silver $ 10.19
Gols/XAU Ratio 8.39
Gold/Silver Ratio 72.84
US Dollar Index 85.81

Gold is higher today by $8.30 but is down $25 from its early morning high at about $767. One wonders, when all this watering down of the metal's price will end on practically every show of strength?

Once the current administration leaves office we will have a new captain in the control seat at the Plunge Protection Team and possibly less pressure on gold.

In the paper this morning is more bad news coming from the Treasury Department and its banking industry buddy, Hank Paulson. It is absolutely amazing how much money Paulson is costing the taxpayers and no one is slapping his hands.

Now it is being reported by Amit R. Paley from the Washington Post that the Treasury is circumventing Section 382 of the tax code and thus costing us an additional $140 billion.

According to George Yin, the former chief of staff of the Joint Committee on Taxation, the nonpartian congressional authority on taxes said, "They (the Treasury) basically repealed a 22 year old law that Congress passed as a backdoor way of providing (more) aid to banks."

Basically, the Treasury is saying it is all right for banks to buy shell companies with losses and apply those losses against their earnings(thus avoiding income taxes).

This was sneaked by while all eyes were on formulating the relief plan funding. This is the same as taking advantage of a diversionary event to steal. How many times have we watched movies where the bank robbers create diversions for police to respond to while these same people empty the vaults of a financial institution in another part of town?

In this case, the bankers representative at the Treasury, Paulson, just handed them over $100 billion in saved tax expenses by ignoring #382. Paulson should be brought up on charges and the tax code inforced by the IRS against these bankers.

Write your Congressional representatives and Senators and complain, I did.
 By bluejay

11/06/2008  4:26PM

Last on gold is $726.90.

John Embry on paper gold versus physical gold:

http://envast.blogspot.com/2008/10/john-embry-golds-game-changing-moment.html
 By bluejay

11/04/2008  9:28AM

Last on gold is $758.40.

Rumor Flash

It has been reported from Lichtenstein, Germany that our 1933 gold coin melt bars are showing up in world markets.

The following was reported to the Agoracom.com's ECU forum page by member ESL:

"My colleague in Lichtenstein confirmed the proliferation of these bars on the European market and I just received information that dealers in Dubai are seeing them all over the place."

If this is true, all responsible should be put in jail. Putting Paulson, the great gold liquidator of the 90's, in charge of the Treasury was like putting the fox in charge of the hen-house.

How much money have all the ex-Goldman Sachs employees stolen from taxpayers since they became employess of the U.S. government at the Department of the Treasury?

Is there any wonder when Paulson first pushed his way into Nancy Pelosi's office looking for billions that he also requested immunity from prosecution?
 By bluejay

11/04/2008  8:44AM

Gold $762.40 up $40.40
Silver $10.51 up $ 0.71
Gold/XAU Ratio 8.49
Gold/Silver Ratio 72.61
Dollar Index 85.01 off 1.39

Gold is higher today following a weak dollar. Strong long term overhead resistance on the dollar chart is located at the 90 to 91.50 area. The dollar's high on its recent three month surge has been about 88.30. It is suspected that the dollar has already topped from its recent fast moving bear market rally.

It appears that too many dollar holders are falling over themselves as they become more aggressive in exiting their positions in the 87 to 88 area. Time will tell for them if they should have begun to liquidate their holdings sooner and at lower levels.

It's a great time to be considering selling the U.S. dollar and buying the Canadian dollar at .8621, the Australian dollar at .6996 and the Swiss Franc at .8661. The Canadian dollar is already up smartly from its recent lows in the .78 area.

As the U.S. dollar regains its terminal slide gold will benefit. We just have witnessed over the past months one of the most vicious bull market shakeouts in precious metals, base metals and their shares in recent history.

Historical charts clearly show that new intermediate bull markets, within major bull markets, spawn from the ashes of these types of breakdowns.

Last on gold is $756.80.
 By bluejay

11/03/2008  10:21AM

Last on gold is $727.70.

The following is an excerpt from a news release issued today from Emgold concerning the publishing by the city of Grass Valley of its environmental draft report:

The Idaho-Maryland mine was historically California's second largest underground gold mine producing 2.4 million ounces of gold from 1862 to 1956 at an average grade of 0.43 ounce per ton grade. It is adjacent to the historic Empire mine, which was Newmont Mining Corp.'s first operating mine. The Empire mine produced 5.8 million ounces of gold from 1850 to 1956. Newmont retains the mineral rights to this property. The Grass Valley mining district produced over 17 million ounces of gold and is historically one of the richest gold districts in North America.
 By bluejay

11/02/2008  10:32PM

Just a taste of what is coming.

The News Today
Posted: Nov 02 2008 By: Jim Sinclair Post Edited: November 3, 2008 at 1:24 am

Filed under: In The News

Jim Sinclair’s Commentary

Between 400,000 and 1,000,000 STILL cannot get access to their savings.

Don’t follow the spin, and let your guard down. This is the beginning, not the end. This could have been you!

The primary target that should be faced has not been even been aimed at. That target is called over the counter derivatives.

Part of the rescue is the use of an OTC derivative by the Federal Reserve - a swap.

Reserve Funds investors still waiting for their money
30 Oct 2008 11:53 am


This isn’t good:


At least 400,000 people, and perhaps as many as a million, can’t get access to their savings, a problem that has quietly persisted in spite of widely publicized federal efforts to restore confidence in money-fund investments.


Some of these customers — who, like most Americans, assumed their money funds were as safe and accessible as bank accounts — are getting desperate.


“Longer term, I just don’t know how we’ll deal with it,” said John Oakes, a retired engineer in Austin, Tex., who can’t tap $20,000 in a Reserve account to pay his mother’s nursing home bill. “They say we may get some money this week, but we don’t know if we’ll get 100 percent, 90 percent or 30 percent.”


Sandra and Lawton Dews, a retired couple in North Myrtle Beach, S.C., had more than $250,000 — 35 percent of their retirement assets –invested in the Reserve US Government Fund.


“They even bragged that you could sleep at night if you invested in their funds,” Mrs. Dews said. “In the past month and a half, we don’t sleep at all.”


Her insomnia began soon after Sept. 15, when the Reserve Fund was hit by a wave of redemptions, apparently because its largest fund had a stake in notes backed by the newly bankrupt Lehman Brothers.
 By bluejay

11/02/2008  11:14AM

Last on gold is $723.70.

The following article clearly reports the the debt abyss that is consuming the nation.

National Debt Soars $500B In Under A Month
Financial Bailout Plan The Primary Culprit In Record-Setting Debt Accumulation
Nov. 1, 2008

(CBS) This story was written by CBS News White House correspondent Mark Knoller

It’s the surge you won’t hear anyone boast about.

Never before in U.S. history has the national debt increased as much and as rapidly as it has over the past month.

Since September 30, the day the national debt hit the $10-trillion mark for the first time, the government has run up over $500 billion in new debt.

That’s more than the federal deficit for the entire 2008 fiscal year, which ended September 30. And it’s the most rapid increase in the national debt ever: over half a trillion dollars in less than a month - 23 days to be exact.

The government’s latest calculation of the national debt stands at $10,530,893,033,778.21 - that’s $10.5-trillion for short. It took less than four months for it to rocket to that level from $9.5 trillion on July 21.

Less than four months! To put it in perspective, consider this: it took the U.S. government over four decades, from 1940 to 1982, to run up its first trillion dollars of debt.

The second and third trillions were racked up much more quickly - each in just four years. And it only took from 1990 to 1992 for the national debt to hit $4 trillion.

On the day President Bush was sworn in, the debt stood at $5.7 trillion. Less than eight years later, the it’s within days of having swelled $5 trillion dollars on his watch - an embarrassing milestone for a president who considers himself a conservative and an advocate of fiscal discipline.

What’s to blame for the most recent surge in the debt? Above all else, it’s the federal government's response to the financial crisis.

“It’s the Supplementary Financing Program being run by Treasury to provide cash for the Federal Reserve,” says Corrine Hirsh, spokeswoman for the White House Office of Management and Budget.

By that, she means the billions of dollars disbursed by the Fed to keep the financial markets at home and abroad from collapsing. It includes the $124 billion used to keep insurance industry giant American International Group from going bust.

And this week, the Treasury Department started to spend the $700 billion dollars in the congressionally authorized bailout program, so the national debt can be expected to soar even more rapidly in the coming months.

But on January 20, it becomes another president’s problem. And unless he slashes federal spending or enacts major tax hikes, the ballooning deficit and debt leave no money for any of the big ticket programs he's promised to deliver.

Instead, the 44th president will have to deal with the problem of how to pay the interest on the expanding debt. If past practice holds, it’s a good bet the government will just borrow the money.
 By bluejay

11/01/2008  10:37PM

Last on gold is $723.70.

Extortion 101

Paulson's Swindle Revealed
By William Greider

October 29, 2008
The swindle of American taxpayers is proceeding more or less in broad daylight, as the unwitting voters are preoccupied with the national election. Treasury Secretary Hank Paulson agreed to invest $125 billion in the nine largest banks, including $10 billion for Goldman Sachs, his old firm. But, if you look more closely at Paulson's transaction, the taxpayers were taken for a ride--a very expensive ride. They paid $125 billion for bank stock that a private investor could purchase for $62.5 billion. That means half of the public's money was a straight-out gift to Wall Street, for which taxpayers got nothing in return.

William Greider: United Steelworkers Union prez Leo Gerard cracks open the sweetheart deal that bailed out nine banks--and likely lined the Treasury Secretary's own pockets--with billions of taxpayer dollars. Does anybody care?

These are dynamite facts that demand immediate action to halt the bailout deal and correct its giveaway terms. Stop payment on the Treasury checks before the bankers can cash them. Open an immediate Congressional investigation into how Paulson and his staff determined such a sweetheart deal for leading players in the financial sector and for their own former employer. Paulson's bailout staff is heavily populated with Goldman Sachs veterans and individuals from other Wall Street firms. Yet we do not know whether these financiers have fully divested their own Wall Street holdings. Were they perhaps enriching themselves as they engineered this generous distribution of public wealth to embattled private banks and their shareholders?

Leo W. Gerard, president of the United Steelworkers, raised these explosive questions in a stinging letter sent to Paulson this week. The union did what any private investor would do. Its finance experts vetted the terms of the bailout investment and calculated the real value of what Treasury bought with the public's money. In the case of Goldman Sachs, the analysis could conveniently rely on a comparable sale twenty days earlier. Billionaire Warren Buffett invested $5 billion in Goldman Sachs and bought the same types of securities--preferred stock and warrants to purchase common stock in the future. Only Buffett's preferred shares pay a 10 percent dividend, while the public gets only 5 percent. Dollar for dollar, Buffett "received at least seven and perhaps up to 14 times more warrants than Treasury did and his warrants have more favorable terms," Gerard pointed out.

"I am sure that someone at Treasury saw the terms of Buffett's investment," the union president wrote. "In fact, my suspicion is that you studied it pretty closely and knew exactly what you were doing. The 50-50 deal--50 percent invested and 50 percent as a gift--is quite consistent with the Republican version of spread-the-wealth-around philosophy."

The Steelworkers' close analysis was done by Ron W. Bloom, director of the union's corporate research and a Wall Street veteran himself who worked at Larzard Freres, the investment house. Bloom applied standard valuation techniques to establish the market price Buffett paid per share compared to Treasury's price. "The analysis is based on the assumption that Warren Buffett is an intelligent third party investor who paid no more for his investment than he had to," Bloom's report explained. "It also assumes that Gold Sachs' job is to protect its existing shareholders so that it extracted from Mr. Buffett the most that it could.... Further, it is assumed that Henry Paulson is likewise an intelligent man and that if he paid any more than Mr. Buffett--if he paid $1 for something for which Mr. Buffett would have paid 50 cents--that the difference is a gift from the taxpayers of the United States to the shareholders of Goldman Sachs."

The implications are staggering. Leo Gerard told Paulson: "If the result of our analysis is applied to the deals that you made at the other eight institutions--which on average most would view as being less well positioned than Goldman and therefore requiring an even greater rate of return--you paid a$125 billion for securities for which a disinterested party would have paid $62.5 billion. That means you gifted the other $62.5 billion to the shareholders of these nine institutions."

If the same rule of thumb is applied to Paulson's grand $700 billion bailout fund, Gerard said this will constitute a gift of $350 billion from the American taxpayers "to reward the institutions that have driven our nation and it now appears the whole world into its most serious economic crisis in 75 years."

Is anyone angry? Will anyone look into these very serious accusations? Congress is off campaigning. The financiers at Treasury probably assume any public outrage will be lost in the election returns. I hope they are mistaken.

About William Greider
National affairs correspondent William Greider has been a political journalist for more than thirty-five years. A former Rolling Stone and Washington Post editor, he is the author of the national bestsellers One World, Ready or Not, Secrets of the Temple, Who Will Tell The People, The
 By bluejay

10/30/2008  11:42PM

Last on gold is $733.50.

For a behind the scenes analysis on what's up and where gold is going, go to http://www.jsmineset.com and read Mr. Jim Sinclair's commentary, "The Beginning Of A Great Economic Drama."

Also, in another commentary Mr. Sinclair states that he is buying gold future contracts and will be taking deliveries of the 100 ounce contracts on a monthly trading cycle basis.
 By bluejay

10/30/2008  11:31AM

Last on gold is $734.40.

In another daily vain attempt at approaching the $775 area gold has failed to hold and has slid back with renewed selling pressure. The move above recent resistance at $748 or abouts is now moot.

An anticipated major low on gold will apparently take its time and on its own terms to establish. At the moment, $680 is its recent down spike low.

Yesterday the Fed reduced its benchmark interest rate lower by one half point from 1.5% to 1.0% to lessen major threats to economic growth and did not rule out more reductions to follow.

Lower interest rates eat up bank capital as it stimulates the redemption of higher interest debt. This occurs when the redemption amount is higher resulting from lower interest rates. When rates go down bonds go up, as an example, thus retiring the original debt becomes more expensive and eats up capital in the process. The bailout package is intended to replenish lost bank capital.

The banker's and the Treasury's greatest fear is that the banks will go belly-up for lack of capital. The derivatives mess only adds to their problems. Reacting to banking troubles, people have been pulling their funds out of these institutions and into U.S. Treasuries and into gold and silver. The threat has been so great that the FDIC has recently announced doubling the insurance levels for funds on deposit at banks.

On an important note, people must know exactly what insurance means. In the worst case scenario, what are the mechanics of returning your insured money?? One possiblity that some folks might not like is how the money is returned to them. Will it be in restricted Treasury instruments? Will it be in another short term irredeemable form of some sorts?

This is the main reason that the western central bankers became part of a major price suppression scheme in July to effect gold and silver prices. It seems that the Asian markets have been buying gold when they are open for business and as trading switches to London and in the U.S. at the infamous COMEX Exchange prices fall on a somewhat, regular basis.

Paul Van Eeden of Canada has generally stated that the approximate area of $650 is a rock-bottom low price for gold based on current monetary expansion. Some months ago Paul correctly forecast lower base metal prices based on his projection of reduced economic activity.

These unanticipated lower prices in gold and silver should continue to be considered a rare purchase opportunity and certainly, not a time to sell.
 By bluejay

10/29/2008  6:10PM

Last on gold is $768.10.

Check out this 80 year view on the sell-offs in the Barron's Gold Stock Index.

http://www.kitco.com/ind/sobolev/oct272008.html
 By bluejay

10/29/2008  5:58PM

Last on gold is $766.30

The following in an eye-opening article concerning China's future and our worsening status in the eyes of the world.

Quotable
I'm fed up to the ears with old men dreaming up wars for young men to die in.
– George McGovern

Source: antiwar.com
October 28, 2008
A Win-Win Situation for China


by Sascha Matuszak
China currently stands alone in its ability to weather virtually any storm the banking crisis in the U.S. whips up. With almost $2 trillion in foreign currency reserves, China can afford to be unconcerned about an economic decline in the West that spreads throughout the world, hurting dependent and emerging economies from Pakistan to Panama.

China is not completely insulated from the economic crisis – a slowdown in orders from abroad and a credit crunch at home will hurt the Chinese economy like it hasn't been hurt before – but the difference is preparation. China is prepared, socially and economically, for a slowdown. The U.S. is not.

The calls are beginning for China to step forward as a responsible stakeholder and shore up the currencies and liquidity of the Asian economies and help ease the pressure on European banks as well. China, in turn, assures the world that it is "seriously" considering its options and the proposals of near-desperate bankers hoping that China's 20-year economic rise will help defuse the West's 20-year economic decline.

China is now in a position of power that it may have been enjoying for years, but it is now becoming even more apparent. The talk of China taking over the world has always been a "what if" scenario accompanied by calls for social and political reform and sidelong glances at the U.S., still considered by many to be the preeminent power in the world. The next few years will see more and more nations gathering under the umbrella of Chinese solvency and leaving the Coalition of the Willing(ly Misled) behind.

For now, China is taking care of its own through land reform that should give peasants in China the freedom to "lease their land use rights to other individuals or companies, such as big farm contractors, or to exchange them" and send hordes of country folk flocking toward the cities with their loot looking for fortune. This is the latest in a development, started after Deng Xiao Ping took over in 1979, that will bring the peasants of China into the social fold and eventually urbanize the nation.

China hopes to protect its domestic and international interests through increasing the sophistication of its military. In the final frontier, the U.S. is "apoplectic" over the success of a Chinese space program that has now "changed the game" with the recent Shenzhou manned space mission and the addition of a surveillance satellite that passed within 30 mi. of the International Space Station. According to the Richard Fisher in the Asia Times:

"By the middle of the next decade the PLA [People's Liberation Army] will have a robust surveillance satellite network that will allow a many-times daily target tasking on a global level. It will also have the ability to perform 'information operations' by being able to give a range of clients updates on global U.S. military activities multiple times a day."

China might be getting those rushes of adrenaline one gets when victory is nigh and your opponent lies struggling in your dust trail. America's irresponsible, immoral leadership in the White House, on Wall Street, and by extension throughout the world has finally come home to roost with this economic crisis. Now, with the giant of the 20th century down and in trouble, all of the nations in the world that have suffered under America's benevolent hegemony are looking for somewhere to hide.

This is exactly what the Chinese leadership has hoped and prayed for and most likely expected: the return of China to the center of the world.

Supposed allies of the U.S. are looking to China for help in these days of crisis, with Thailand's deputy prime minister, Olarn Chaipravat, who is attending the Asia-Europe Meeting, stating in the Sydney Morning Herald:

''The message of this initiative is for China to consider whether or not China would open up its banking system and allow the strongest currency in the world, which is the Chinese yuan, relative to anybody, to be the rightful and anointed convertible currency of the world."

Pakistan's President Ali Asif Zardari just finished a visit to China in which he declared that he would be ready to "visit every three months" and that Pakistan's economic and security crises are best solved through cooperation with China, not with the U.S.

The whole Asia-Europe Meeting is a sign of times to come. Nobody trusts U.S. leadership anymore, and despite China's list of thuggish buddies (Burma, Sudan, Iran, North Korea, etc.), protest-strangling Great Firewall, and tendency to sell counterfeit and/or tainted goods, world leaders are choosing China. What an incredible statement about the influence and reputation of the U.S.

The bailouts engineered by the central banks of Europe and the U.S. represent the desperation of thieves caught in the act together, not sympathy and goodwill between two staunch allies. The collapse of Wall Street is the last act in the tragedy of America's fall from leadership in the world.

So What?

What we will see is the decisive triumph of the merchants in the low-level battle over what to do with China. Many of the campaigns to halt human rights abuses in China will migrate to the fringe of U.S. policy, if they haven't already, and the tone will ease.

The U.S. will not be able to confront nations with the arrogance of a world leader and the righteous indignation of a moral compass. For many of us, this is a development that has been a long time coming, but for most of America, it will be something very new.

What Americans lack more than anything is a concept of history. It is absolutely natural and normal and desirable for a nation to go through hardship and struggle and eventual transformation. The era of the American Imperium, dependent on historical ignorance and determined action, is over.

What is needed now is a domestic revival and a more nuanced and intelligent approach to international relations. This means talking with people before we bomb them. This means an emphasis on cooperation, not obedience.

China's sound economy and pragmatic, if despotic, leadership make whatever happens in the coming American election into an opportunity to gain political capital or financial assets. It's a win-win either way.
 By bluejay

10/29/2008  11:59AM

Gold $754.00 Up $10.20
Silver $9.83 Up $ 0.64
Gold/XAU Ratio 9.53
Gold/Silver 76.70

Gold is higher today as it has pushed above some recent daily resistance in the $745 area. Gold reached higher into the vicinity of the previous important low spike reached some weeks back at $675 where China was reported to have taken gold from two failing hedge funds. Reaching this level awoke the bear element in the market as the attack dogs were unleashed chasing the buyers and driving the price back down to about $752. Hopefully, the $745 level holds which is now short term support.

We read in the paper that every asset has been effected by margin calls, failing hedge funds and fearful selling but never is it mentioned in the general news that there are entities out there that have agendas for twisting people's minds concerning the banking industry by trashing gold and silver. Sure, it's reported that the public is leary of banks these days but no reports concerning the US Treasury's efforts to depress the precious metals prices.

It's been the belief here that all along that a great transfer of wealth is taking place from the public into the hands of connected people or entities and foreign countries, especially China. One just has to take note of all the shenanigans that have taken place to force all the gold and silver related stocks down to the bottom of the pit.

Unbridled savage attacks of the exploration sector in Canada have left that group devastated with percentage declines of 80% and more common. The naked short sellers have been ravaging shareholder's assets as if they were prey locked in a cage. What has been permitted in Canada says very little of the country's regulators. The regulator's up there run a "so-called" honor system with the naked shorts, they just have to state that they have intentions to deliver sold stock and THAT IS IT. One would have a difficult time proving that the regulators weren't crooks themselves.

In this country the SEC has allowed the gold stocks to be pummeled unmercifully by naked short selling, effecting lower prices without delivering any shares. Not many in Washington care to admit this. The gold and the gold stock shelling is working on the minds of the public and is putting money into the pockets of thiefs.

The trading norm of the relationship of the XAU Gold & Silver Index to gold was, with a few minor exceptions, 3 to about 6. Each time the Index reached the neighborhood of 6 the gold stocks were a buy and when they returned to the 3 to 1 ratio with gold it was time to sell them for followers of this intermediate to long term trading approach.

Last week the Index hit 11.50. Where did this come from? It's all the naked shorts looking for more and more of the investor's blood. Hello, Mr. Cox are you there? Cox is the head of the SEC and is the worst do-nothing Chairman of all-time.

Jim Rogers has said other guys in government along with their handlers, the banks, have messed up the system far more than the average person comprehends. Like Jim Sinclair says, no one wants to talk of OTC derivatives. They are all sucking the system dry in their final attempt to make off with all the silverware before their day comes to an end with disgrace and a lot big money stuffed into their pockets.

Unfortunately as has already been established from the Blanchard-Barrick lawsuit in New orleans the governement and their agents are immune from prosecution, how convenient. So that just leaves the banks and certain connected people to answer.

Jim Sinclair has said that the massive OTC derivatices disaster can't be remedied. All the Treasury can do is hide the problem and hope that it goes away. Fat chance! The Fed buys the junk contracts in exchange for more taxpayer debt and the banks get a free pass with massive infusions so they can start over again. This is the biggest crime of the century, all at our expense. Even the banks have influenced their buddies in government to lower generally accepts accounting standards to put a value on all the worthless derivatives that they still hold.

In Japan the banks did the samething 18 years ago with all their junk real estate loans. Banks that lie about their real worth are known as "zombie banks."

In this country all the banks are basically bankrupt. Why do you think the government is giving them all this money, our money? There capital has evaporated with 28 years of declining interest rates as Mr. Antal Fekete has so brilliantly described in past articles.

Golden Sachs and J.P. Morgan recently reclassified themselves as banks and now the both of them are in line with the other banks milking us of our long term financial security as a country.

When this mess finally ends, if ever, all these criminals will be holding gold, silver and all the related companies and they will have secured them at fire-sale prices that they, themselves, created. That is why it is important to just tune out from all these temporary, ridiculously low prices.

What do you do when a burglar approaches your home at night? You lock all the doors and windows, hunker down and be prepared, you most certainly don't run away crying in hysterics.

On another note, the Chinese have been recently more vocal with their thoughts on our continuing meltdown. The "People's Daily" the official newspaper of China's ruling communist party recently stated the following, "Growing chorus of Chinese disdain for Washington's economic policies and financial dominance in the wake of the credit crisis." "The U.S. has plundered the world's wealth."

China is quite worried and with the recent strength of the dollar inspired by financial unrest in Europe who could blame them for quietly reducing their masssive exposure to the dollar. This is one significant reason that the recent strong rally of the dollar is doomed and gold's rebound is near.

One reason that Fannie Mae and Freddie Mac were temporarily saved is that China holds one fifth of their total agency debt. This amounts to $447.50 billion as of June of 2008. China also for the same period holds $502 billion in US treasuries.

One thing the Treasury doesn't want and that is a panic out of the dollar of which China would not really want to be part of. China is more of a methodical buyer and seller. It would be quite naive if anyone would assume that China is not buying gold, silver and many of the bigger precious metals companies along with base metals and their producing companies and relieving themselves of their excessive dollar holdings.

Go Gold!
 By bluejay

10/27/2008  10:23AM

Last on gold is $741.30.

A link is provided to the December 08 commodity chart where you can get an idea of trading volume in the most popular month. This does not include the electronic market.

It is difficult to pinpoint volume. Dan Norcini does a commitment of traders volume chart about every week at jsmineset.com with comments.

http://www.marketwatch.com/tools/quotes/intchart.asp?intflavor=advanced&symb=GC08Z&sid=1633395&freq=1&time=8&dist=TQP_chart_image

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