August 18, 2019 
 Sunday 
 
 

Forum
Topic:
Gold Enters Major Bull Market

       

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 By bluejay

04/15/2007  9:31PM

Gold $685.40
Silver $14.03
Gold/Silver Index 48.85

It was reported on April 14, 2007 by Dow Jones that, "Japan's finance minister said Saturday he had proposed to the International Monetary Funds's policy-steering body that the fund sell its gold reserves to cover falling income." As of last year, the IMF said it held 103.4 million ounces of gold.

"Japan has told(the committee): "Why not sell gold?"

"Omi's proposal is in line with Japan's long-held stance as well as recommendations made earlier this year by a high-level panel at the IMF. In late January, the panel, chaired by Andrew Crockett, president of JPMorgan Chase & Co.(JPM), urged the fund to sell some of its vast gold reserves and invest the proceeds to raise money."

1- The action of gold is indicating that the Japanese Yen is a short sale.

2- JPMorgan Chase is a bullion bank which is short gold and is also a commercial bank whose financial health will always look good when gold is low.

Both their philosophies are the same: kill gold, the messenger, if you don't like the news. The news today is that gold is very strong at $685.40.

Japan's currency as measured against gold is in the dumpster and the Dollar is starting to slip off a cliff compared to gold. Sorry boys, you only have yourselves to blame. Attempting to kill the teacher won't change your grades.

The London Sunday Times today is reminding its readers that Gordon Brown has cost the English people two billion pounds following his gold sales campaign for the Treasury between 1999 and 2002.

The Times' report on Gordon lists many comical reasons given by the Treasury saying why Gordon did no wrong. Oh I forgot, Gordon is their boss.

Gold's current push in here has a lot of people worried and it appears that the miscreants have started a new campaign to discredit gold.

This is an old trick that has been used in markets since the beginning. If you want a commodity, stock, currency or in this case gold to go down, then start your attack in the media.

The hedge funds continue to short the gold stocks probably with naked shorts. Why not? The SEC doesn't care. Oh I forgot, the SEC is a member of the Exchange Stabilization Fund that has no interest in seeing a higher gold price.

There is no question that a good portion of the attack against gold has been all this naked shorting of gold stocks by the hedge funds in an attempt to quiet the public interest as they are related to the metal.

Don't be a victim of the tricks that these miscreants are throwing our way. Sit tight and enjoy the ride to offset inflation and take some profits along the way!
 By bluejay

04/11/2007  10:37AM

Gold $676.70
Silver $13.78
Gold/Silver Index 49.11

The following is a list of metals with their five year performances:

Nickel + 792%

Zinc + 489%

Copper + 482%

Lead + 394%

Silver + 198%

Aluminum+ 113%

Gold + 111%

Over the same five year period:

Dow Jones Industrial Averages + 74%

Philadelphia Gold % Silver Index + 158%

Assuming a loss in purchasing power of 10% per year over the past five years, all the percentage gains of the above should be reduced 50% to reflect this subjective estimate for the real rate of inflation.

Unfortunately, the inflation estimates have to be made because the government skews the numbers with their CPI.

The five year trends in the metals are well established and will continue as our money supply continues to expand.

The Dow Jones Industrial stocks are the worst performer of this group. Sadly, the biggest loser of all is having your excess funds in government bonds or in the banks where you are losing part of your wealth as a result of the inflation factor.

Is there any wonder why the government doesn't want the price of gold to seek its natural levels?

If gold were to be higher there would be more questions about: What is happening to our money? Remember, gold is the inflation report card. The government is playing a dangerous game in trying to control a bull market in gold.

If the bull gets loose the Exchange Stabilization boys will have to account for the country's gold or go to jail.
 By bluejay

04/04/2007  8:11PM

Gold $672.80
Silver $13.53
Gold/Silver Index 49.73

The following are comments
made today by Mr. Gold, Jim Sinclair at 4:47:00 PM EST.

"Even I am shocked at the strength of gold today. You probably never thought you would hear that from me."

"The first move up was from the belief that Iran was going to hold and try the captives, but after Iran said they were free to go, gold ran right back up to the high and held it."

"That is outrageous strength. I have not seen anything like this since 1979."(In 1979 gold advanced from $250 to nearly $900 in January of 1980.)

There is no one that has bettered Mr. Sinclair's track record concerning his opinions and predictions of gold. His long standing prediction is that gold will trade at $1,650.

Jim is a true patriot for offering his many years of market experience free of charge for those interested in "seeking the truth" at http://www.jsmineset.com.
 By bluejay

04/02/2007  6:29PM

Gold $665.40
Silver $13.30
Gold/Silver Index 50.03

Gold is the ultimate report card.

The price that gold reports in each country's related currency is the type of job government officials are performing in their perspective financial responsibilities, both domestically and internationally.

When governments don't like their grades they attack the gold market by forcing it lower with all their little schemes. It is as simple as that.

One of their schemes is practiced on the COMEX where these people sell contracts through their hired hands for future delivery that don't require settlement in gold. They just roll them over to the next trading month cycle or settle the difference in cash for any amount due. In London where they don't really operate, all consummated sell sides have to be settled with the delivery of physical gold.

Another scheme to depress interest in gold in this country is by giving the hedge funds a free hand at selling gold shares that they don't own or that they can't borrow. This scheme is meant to drive people crazy as their stocks don't act well against a higher gold price. This kind of manipulation only works during the short term.

The Securities and Exchange Commission does not put pressure on the hedge funds to deliver physical shares like you and I would be required to do. They seem to have an understanding with them. Remember, the Securities & Exchange Commission is a member of the Exchange Stabilization Fund which was created in 1987.

These sold shares by the hedge funds circulate as "failure to deliver(FTD's)" shares. Who knows, maybe you have bought some of these FTD's and although your brokerage statement says that you have the stock in your account, they maybe only FTD's. Who really knows, as they are not specified. FTD's are basically betting vouchers, or so called promises to deliver and they are not physical stock.

These paper instruments, futures and FTD's, are controlling the prices of real assets. Specifically gold, and to a lesser degree, silver.

These "paper tiger" schemes only display weakness and desperation on the part of the western central bankers who sense the emergence of gold as the supreme world currency. The days of seriously suppressing gold's price by selling physical gold to a large degree ended with the demise of the London Gold Pool and later in 1971 when president Nixon closed the gold window.

Thanks to a new scheme when Barrick Gold was directly involved with these bankers they invented a new way to depress gold's price in or about 1980. The bankers would lend gold to Barrick to sell in the open market. The bone given to Barrick was enough inside information concerning their ultimate goal that Peter Monk joined into selling with them in earnest.

In fact, Barrick sold in the process more gold for future delivery than they had gold reserves in the ground. Barrick was a commodities trading house then not really a miner. Prior to the creation of American Barrick, now Barrick Gold, Barrick's Monk had no practical experience in the mining industry. Greedy over indulgence cost many in the gold industry along with their shareholders untold millions of dollars.

Many years ago when Monk was a college student during the Christmas season he reamed some Christmas shoppers as well. He specialized in arbitrage, hopping around like a human sized African jerboa with Christmas trees on his back buying from one mall lot and selling to another mall lot for a profit.

Barrick continues to be short gold from their earlier gold bashing days of the 80's and 90's.

Respect goes out to the corporate officers of Nova Gold for telling Barrick to stick it when they tried to take over the company.

Any weakness in gold's price should continue to be viewed as a buying opportunity. The best is yet to come!

Miscreants, your days are coming too. What is your exit plan? Oh I forgot, you guys think you are in control. Your exit plan will be one of the fastest short covering rallies in history, both in the metal and in the gold shares.

The other side of gold is the U.S. Dollar Index. These miscreants are going to find it impossible to contain gold's strength when the Dollar takes its expected swan dive.
 By bluejay

03/23/2007  1:06PM

Gold $656.20
Silver $13.13
Gold/Silver Index 49.98

Bloomberg has presented a shocking 25 minute presentation entitled "Phamtom Shares" that everyone holding stocks needs to view.

The easiest way to access this YouTube video is to google search Bloomberg Phantom Shares.

Every December Wall Street firms brag about the bonuses that are handed out to their employees. Now we know where the money comes from: It comes from investor's pockets.

The policeman on Wall Street is the Securities and Exchange Commission(SEC). After viewing the video, the only conclusion that can be made is:

The SEC thinks greed and stealing is good which is amply demonstrated by their inaction to control and prosecute trading abuses conducted by Wall Street manipulators.

What ever happened to: For the people and by the people?
 By bluejay

03/20/2007  9:01PM

Gold $659.00
Silver $13.28
Gold/Silver Index 49.62

Why are the precious metal stocks underwater as gold continues higher in its well established bull market?

There have been many entries in this section concerning suspected manipulation of gold and the gold stocks. The finger has been regularly pointed at the bullion banks, the Exchange Stabilization Fund and the hedge fund boys.

Tonight on the jsmineset.com website there is a current video interview of Jim Cramer the host of CNBS's "Mad Money" where he admits price manipulation by the hedge funds. This could be one source that has manipulated gold stocks lower way out of character compared to past trading norms against gold's price.

The point is, sadly, that the whole stock market must be a rigged event. What chances do well meaning investors have using their life savings against a group that clearly has one greedy motive: big salaries and big bonuses at any cost?

Jim Cramer basically said that the SEC can't figure out what the hedge funds are doing.

It clearly appears that the SEC is not doing their market surveillance job. Is the SEC just looking the other way for the benefit of the hedge funds as well meaning stockholders of precious metal shares get reamed by them?

It's a cruel world when gold company shareholders get fried when their main reason for being in this group in the first place is to protect their family's wealth against monetary inflation.

As a point of interest: The Federal Reserve has tripled our money supply since 1990 and is printing more money faster today as a result of the failing subprime loan market.

Check out the video tonight at jsmineset.com.
 By bluejay

03/14/2007  12:31PM

Gold $641.50
Silver $12.73
Gold/Silver Ratio 50.39

The suppression of gold's price continues as the miscreants run scared.

The FED is now obviously concerned with the possibility of a melt down in the OTC interest sensitive derivatives market.

As Jim Sinclair said this morning, "This situation is serious as the first flame of a financial melt down is getting closer to the fuse of the interest sensitive over the counter derivatives. A flop in those OTC derivatives would be devastating to the international financial community so it is reasonable to assume it will not occur, at least here and now. In order to prevent such a situation that would act as a vacuum on liquidity, the Federal Reserve must act to add liquidity to an already brimming over the top world liquidity situation."

"Since this is super bearish for the U.S. dollar, it is super bullish for gold."

Gold's price manipulation starts with the bullion banks on orders and is continued by the hedge fund boys.

It's not too difficult to see how the primary miscreants operate: Selling is usually exerted on gold near the close of the N.Y. COMEX trading session and into the N.Y. Access Market where trading is usually thin. Just before N.Y. trading begins, London's gold market usually weakens. If gold strengthens following early morning weakness in N.Y. it is hit again.

These miscreants take gold down hard making price with no thoughts of getting a better price like you and I would. They just bang away at it to please their handlers.

The main group that operates in total secrecy is the Exchange Stabilization Fund which is accountable only to the president. Concerning gold, this clandestine group should be called the Exchange Destabilization Fund.

History has taught us that these shenanigans only work for a short period of time. Gold's current weakness is just another buying opportunity in the march to much higher prices for the metal. Don't be fooled by these tricksters.
 By bluejay

03/04/2007  9:58PM

Gold $640.60
Silver $12.73
Gold/Silver Ratio 50.32

The ordered hit on gold Wednesday was a direct result of the stock market being off nearly 546 points at one time on Tuesday.

Sid Reynolds in an entry on FN Arena in August of 2006 said:

"The U.S. government's motive for covert gold sales is firstly to keep interest rates low by deceiving bond markets about actual inflation levels. This sets in track the effect of lower gold price = lower inflation = lower bond price = higher stock market."

That's it in a nutshell.
 By Michael Miller

02/28/2007  9:13AM

Comment regarding: Bluejay entry below.

A few months before the Homestake shareholder meeting, when the shareholders voted to merge with Barrick, Jack Thompson, Homestake number one officer, and Walter, the president, came to Alleghany for a tour of the Sixteen to One. We had a good time and when we got underground at the Ballroom, we were safely alone and no one could have heard our conversations. I asked him some private questions. One was about the English dumping gold always at low prices (Bluejay’s entry is not the first time the Brits have unloaded at the bottom). Jack was on some international committee or board where he should have first hand information about the banking people. He said he did not see any conspiracies but just plain old stupidity. He could be right or he could be naive. My outside view of the international gold and anti gold folks is based on thirty plus years of reading history and living the consequences of their behaviors. My conclusion is: gold players do conspire; gold players are stupid; gold players are some of the most sophisticated businessmen and some are also very naive. Greed, fear and power rule the game as has done throughout history. Some are purely self-serving and some have higher goals but use fear and greed to gain or hold on to power. I hope Bluejay is right with his predictions of wide swings in the relationship of currencies and gold. Who continues to say that gold is a dinosaur and no longer a factor in international trade? Do you believe them?
 By bluejay

02/28/2007  8:32AM

Gold $667.70
Silver $14.04
Gold/Silver Index

Riding the Bucking Bronco!

Yesterday gold hit a daily high of 686 only to be smacked to 659, then it rallied in the early morning hours to 677 and now it's getting stomped on again at 667.70. Yahoo!

The killing zone of the Philadelphia Gold & Silver Index(XAU) at the 150 area has lived up to reputation by influencing the XAU lower where it hit near 136 earlier. These shares are currently on the bargain table.

The not so good news for the faint of heart is that these price gyrations will only be expanding. Are you ready for moves up and down in the same day for gold of 100 to 200 points? Well, those days are coming, so fasten your seat belt!

All this price weakness is being brought to you by the miscreants of darkness with a smile on their face. These guys are the same group that got one of their buddies, the head of England's central bank, the infamous metal's price predictor Gordon Brown, to sell nearly 400 tons of England's gold during the period from 1999 to 2002 at $275 an ounce. At the time, even the dense central bank for the Euro said, "gold was a bad investment."

What did Gordon do with the receipts from his gold sales? He invested in three currencies: The Euro, the Dollar and the Yen. Not only did Gordon miss the move in gold for the English people but he had only a tiny gain in the Euro, a moderate loss in the Dollar and a much bigger loss in the Yen. Way to go Gordon! Another miscreant bites the dust. Yahoo!

These central bankers will be in the market buying gold along with the public in months ahead at 100's of dollars higher. These central bankers are a pinheaded group investing in each others currencies while they all depreciate against gold.
 By bluejay

02/25/2007  11:55PM

Gold $685.30
Silver $14.61
Gold/Silver Ratio 46.91

Prediction of probability:

The gold price is capable of hitting $880 in August of this year.

The prognosis is based upon subjective interpretation of gold's weekly chart patterns for the last two years.

An important intermediate reversal in gold has taken place to the upside following a significant breakout above the $650 level.

Along the way expect some fast price reactions to the downside. This is to be expected as the anti-gold camp becomes nervous and desperate with the intermediate rally. For sure, they will be fighting gold's strength tooth and nail with all their available resources.
 By bluejay

02/23/2007  1:23PM

Gold $682.90
Silver $14.49
Gold/Silver Ratio 47.13

Attempting to reason out the relationship of gold stocks to the price of gold can be frustrating. The constant set of changing variables for each gold producing, development or exploration company can be a real challenge for investors.

What investors and prospective investors don't need is the meddling in the share prices of these companies by the Dark Empire. The Dark Empire is a secret association of bullion banks acting in the interests of their handlers, the people who control your currency. You know who they are. The bullion banks are usually the Wall Street firms that get to sell all the new Treasury issues for the government. Get the picture, one hand washes the other.

It was mentioned on February 6, 2007 that there was short selling pressure being exerted on gold shares in the 139 to 142 area on the chart of the Philadelphia Gold & Silver Index(XAU). It was suspected at the time it was the work of the anti-gold community, the Dark Empire.

Gold is higher today and the group is back at work selling the shares short again. It's fairly easy to imagine the conversations coming from their clandestine control stations. Their ally in selling the shares is the formidable resistance on the Index in the vicinity of the 150 area which has choked off intermediate term advances for some time. This area has been the bear's killing zone for the past 20 years.

Today, the high on the XAU was 148.11 with a low and last of 145.68. Unless the gold price starts to tank very soon, these unscrupulous operators are destined to have their worst nightmare come true, a violent short squeeze. This squeeze could easily take the Index 20% higher, above and beyond major resistance. This event will be monumental in presenting to gold share owners the best of all worlds for profits in the years ahead.

It would not be surprising for the timing of this foreseen event to take place without any help from gold.

It is important for investors to understand what makes markets tick. It is not always about what you think it is.
 By bluejay

02/19/2007  2:11PM

Gold $670.80
Silver $13.98

Gold appears to have established itself above resistance at the $650 area. This action indicates that gold's resting period is over and we can look forward to intermediate strength.

Today I read a short article concerning GoldCorp selling off some of their smaller gold operations in Australia and in South America. It looks likes GoldCorp may be getting ready to do a deal soon for additional superior reserves.

In an article today by Grant Smith out of London for Bloomberg he states, "Gold producers are rushing to boost supply because mines are being depleted at a faster rate than discovery of reserves."

I remember reading somewhere that in the past 10 years there have not been any new major deposits of gold discovered. I believe the category for a deposit to be classified as a major discovery that it has to be of at least three millions ounces.

According to Dr. Chaize from France there are only 77,000 tons of gold left to be mined in the world today. If it took 103 years from 1900 to 2003 to mine 121,546 tons of gold, how many more years of gold mining remain with only 77,000 tons left?

Another way to put it is to ask the question, what percentage of gold has been mined over earth's history and what percentage remains? One certain statement can be made; the great majority of earth's gold has already been removed from the ground. Do you have yours?

In the future a person's wealth will be judged by the amount of ounces of gold that each owns. Our country has a lot of catching up to do with the general population of India where this is the case.

As China's populace continues the trend of becoming richer, based on international standards, you can bet they'll be buying their ounces too.

In the future, if you don't have some of your wealth in gold coins or bullion or a gold company or two your goose will be cooked when the real truth about fiat currencies is understood by all.
 By bluejay

02/15/2007  5:01PM

Gold $668.40
Silver $13.92

Rae

The first section is from Ferdinand Lips's book, "Gold Wars."

There can be no discussion of gold without also discussing some historic facts about silver, the first metallic monetary standard in ancient times.

While gold was also known, it was mostly concentrated in royal or religious temples and treasuries and rarely entered trade. The value attributed to silver in relation to gold was not measured according to a worldly but to a cosmetic yardstick. The ancients had an explanation for this.

As the moon travels 13.3 times faster through the zodiac than the sun, it was thought that gold was 13.3 times more precious than silver. Man was aware that in money there also ruled a divine order. The gold treasures of Egypt were known for their relationship with the sun. The silver amulets and temple pictures of Ephesus were thought to be related to certain influences of the moon.

Some men believed that gold and silver were ordained, not by elected governments, but by millennia of human experience under divine guidance, and that they are the true monetary metals that have been handed down to us from Biblical times.

In Egypt, the symbol for gold and silver were the same, and gold was considered to be the metal of the gods. In antiquity, gold and silver were stored in shrines and temples, but as they entered circulation, they facilitated trade forever, and the barter economy was a thing of the past.

The Gold/Silver Ratio

One of the most fascinating questions of monetary history, and also one of the most mysterious, is the economic interpretation of the gold/silver ratio and its changes. The ratio was as low as 10 in antiquity. By the beginning of the Modern Age, it crept up to 14. Governments tried to stabilize it at 15 in the eighteen century, but without success. In the nineteeth century the ratio was completely destabilized as it raced towards 60, only to come down to 16 by the end of World War I.

In the post-war years it rose again and hit 100 during the Great Depression in the early 1930's, when silver was selling for 25 cents an ounce. From this all-time high, the ratio started its long descent "pari passu" with the deliberate debasement of world currencies to reach a low of 16 in 1980. From there it began climbing again. At the time of this writing(2001) the Au/Ag ratio is 61.

For thousands of years, the ratio fluctuated between 10 and 15. There was only one exception. During early Egyptian history the ratio was as low as 2.5, but there was a good reason for that: There was a shortage of silver, which came mainly from Greece.

During the following transition period from intrinsic value to non-intrinsic value coinage, the Treasury Department vowed to maintain the $1.29 ceiling on silver by continuing to supply the market from governemnt stocks. The Treasury boosted that it could hold the line on the price of silver until 1980 if necessary. But, speculators
and investors alike rushed to exchange their depreciating Federal Reserve notes for silver bullion in such quantities at the bargain price of $1.29 that direct Treasury sales had to be suspended by the summer of 1967. The price of silver immediately soared above $2 per ounce.

The current Gold/Silver Ratio is 48.02 today according to kitco.com. As gold continues higher in the years ahead there will be more interest in silver and the ratio will reflect this by coming down.

When gold hits $1000 in U.S. dollars expect silver's ratio to gold's to be much lower.

A ratio of 40 would make silver worth $25.

A ratio of 35 would make silver worth $28.57.

An unchanged ratio would make silver worth $20.82.

The following was written by Dr. Thomas Chaize on October 17, 2004 and accessed from dani2989.com.

The Gold/Silver Ratio was constant at 15 for two hundred years, from 1680 to 1870. At the beginning of the sixteenth century the ratio was 10.

Current estimates from this source state that there are 77,000 ton of gold left to be mined and 420,000 tons of silver left.

The ratio of the available reserves is 5.45, this means that the gold still left in the ground is 5.45 times rarer than silver.

In 2002 the world production of silver was 20,000 tons compared to gold's 2,550 tons.
The ratio of production in 2002 is 7.84, this means that the silver is produced 7.84 times more than gold.

Production figures of gold and silver prior to 1900 are difficult to verify.

Silver production 1900-2003: 929,312 tons.

Gold production 1900-2003 121,546 tons.

The gold to silver ratio production from 1900-2003 is 7.64. This figure is very close to the 200 year production ratio.

In 2004 it was estimated that the (average)production costs for silver were $5 an ounce and gold's were $300 an ounce.

The ratio between the production costs of silver and gold is 60.

In conclusion the report states that the price of silver is determined thus largely by its production cost and not by its rarity. The ratio of 60 between gold and silver will fall with the appearance of peak production. Following this event the silver ratio will go to 7.

It is difficult to know at which moment the Gold/Silver Ratio fall will take place, but it is easy to guess that it will pull a vague unprecedented bull on the silver sector, this wave, such as a Tsunami, will take silver to unthinkable heights.

Dr. Chaize's article was translated by Paul Lilliott along with minor adjustments of my own.
 By bluejay

02/14/2007  2:27PM

Gold $668.40

According to the Money and Markets' publication the old high in gold of $875 in 1980 adjusted for inflation is now a high of $2,100.

If we continue to think of gold in constant dollars which we naturally do, then gold is off 23.6% from its old high.

Considering the impact of inflation, gold is really off 68.17% from its adjusted high of $2,100 an ounce.

Gold, aside from the other precious metals, is one of the best buys on the planet.
 By Rae Bell

02/12/2007  8:59AM

Thanks for the interesting article Bluejay.

An integral part of the school tours conducted by the museum is a discussion of the 16 to 1 ratio and we always look at the current ratio for comparison.

The raw gold (dore) from the Sixteen to One Mine is 83.75% gold and 15% silver. The remainder is waste. It is interesting to note that all the mines in the Alleghany District run different purities. I believe the Oriental runs 81% with traces of copper but no silver. The placer nuggets found in the streams and rivers tend to be higher in gold content 90% and usually have a percentage of copper. The nuggets vary depending on where they originated.

When traveling in Mexico a couple years ago several public buildings had signs in the bathrooms stating that the water was purified using colloidal(?) silver.
 By bluejay

02/12/2007  2:06AM

Gold $664.90

To some it may come as a surprise but the Alleghany Mining District's gold ore is not 24 karat which is pure gold. I stand to be corrected by David in gold sales but I believe about 17% of the extracted gold ore is made up of other metals with the majority being silver.

Silver seems to have gone off the radar screen with the public. I overheard a conversation between two cashiers in Rite Aid a few weeks back discussing one of them finding an all silver quarter in her change drawer. Actually, it was 90% silver and 10% copper.

The two employees said they check their change frequently and occasionally silver coins turn up. One lady said that she saves them for her son. I couldn't help mentioning to her that that was an excellent idea and she should buy some more and add to his collection.

She said, how much would that cost? I said how much do you think silver sells for an ounce? Her reply shocked me. She said, 25 cents.

The silver quarter story reminded me of something I had learned many years ago. During the turn of the twentieth century a day's labor was worth one silver quarter. The currency not backed by silver or gold has practically lost 100% of its purchasing power since 1900.

The silent and indirect taxation by currency debasement and monetary inflation to the consumer is what keeps the rich richer and the middle class and the less fortunate poorer.

In 1892 one of the finance platforms for the new Populist Party demanded the free and unlimited coinage of silver to gold at the then present legal ratio of 16 to 1. The Sixteen to One Mine took its name from that 1892 ratio.

It's interesting how things change. At that ratio, if it were allowed to continue, would have made the price of silver today $41.55. Friday's price on silver was $13.81 or by exchanging one ounce of gold worth $664.50 you would end up with 48 ounces of silver.

Today there are more uses for silver than ever before. Silver is even entering the medical field in a big way. Silver has anti-viral and anti-bacterial properties. American Biotech Labs sells a patented silver supplement that is recommended by doctors as a natural alternative for immune support. Hospitals are using more and more minor amounts of silver in cleaning agents and in their sheets and patient's gowns. Cells phones, computers and many other electronic devices are just eating up the annual mine production of silver.

Some say that the price of silver has been manipulated to stay low while others argue against this point. There is more silver consumed every year than is mined. It has been this way for many years. Some say that this condition has existed since the early 1970's.

When the silver to gold ratio is in the upper range gold is outperforming silver and when it is in the lower range silver is outperforming gold.

During the last 37 years an ounce of gold could have purchased as little as 22 ounces of silver in early 1980 when gold hit its high and all the way up to 98 ounces of silver for an ounce of gold in 1991.

Since 1982 silver has been forming a bottom on the chart at and around the $5 an ounce level. Last year silver completed its long term bottom by breaking through the psychological $10 an ounce barrier. Remember what happened to the Dow Jones Industrials when it cleared the 1000 level to the upside? Currently, the price of silver is firmly established above $10 at $13.81. The market has reversed to the upside and is now in a bull market.

This 25 year bottom will serve as an important energy source to take silver higher in the years ahead. Maybe, it might catch up to the 16 to 1 ratio or even go lower which means it is out performing gold and is advancing against it.

Some years ago when the Peso in Mexico collapsed the few people that were able to hold Mexican silver coins survived the near destruction of their country's currency.

Today with the declining production of the PEMEX oil fields in Mexico the populace is demanding a return to silver coinage to protect themselves as government revenues from the oil fields decline faster than forecast. Declining government revenues means certain higher interest rates and increased inflation that Mexico's populace knows all about.

The day may come when our neighbor to the south will be back on a silver standard. If that be the case, a much higher floor on silver will result than the $13.81 in today's market as less silver will be exported by Mexico and available to the market.

For many reasons silver will continue higher and should break an important $15 an ounce barrier. The metal most certainly is entitled to flex its muscles with a bull charge following this event.
 By bluejay

02/06/2007  3:14PM

Gold $652.60

This a day that saw gold firm to $659.50, only to be beaten back in a hurry to just below the $651 level.

This type of market activity is the style of the anti-gold market participants. These guys want to make price, they are not much interested in trading for big profits as a normal trader would be. Their main gig is to play with your mind by frightening you in an attempt to get you to sell.

This is a excellent day to be watching them closely and observing what they do. The Philadelphia Gold & Silver Index(XAU) has been laboring for a few days now. It is suspected that there is a fair amount of shorting in the gold stocks by them over the past few days. The key area for putting pressue on the Index is the 139 to 142 zone, which they are doing.

If this area is surmounted then the gold shares would have a nice run and our little friends will get their fingers burnt. If not and they have their way, the Index could drop to the 130.00 level or so.

All these contrary moves by the group will be short lived as it is most difficult to fight with a bull market. In a bull market you buy weakness not sell strength, that's a fool's game. When the bull market in gold and gold shares is ready to resume following their current resting periods these people are going to be toast again.

The XAU has been in a consolidation area for the past 12 months. The last three major pushes in the Index started once a minimum resting period of 12 months had been met. The average appreciation on those three advances was a minimum of 100% each.

The current shorting of gold shares and messing with the paper gold market appears to be just another act of desperation from a power base that is swimming in a pool of fiat currencies. In the end, the miscreants are in store for the shock of their lives.
 By bluejay

02/02/2007  10:23PM

Gold $645.70

Two great articles to check out.

"A Massive Transfer of Wealth"
321gold.com/editorials/vaneeden/vaneeden012107.html

"The Gold Price-Fixing Conspiracy"
321gold.com/editorials/casey/casey013007.html
 By bluejay

02/01/2007  3:48PM

Gold $656.80

In the comments that were submitted last night some basics in regards to the Philadelphia Gold & Silver Index(XAU) were omitted.

An excellent chart of the XAU can be viewed by going to the website http://www.bigcharts.com. The last sale on the XAU today is 141.09.

When you get there enter the symbol XAU and select basic chart. Later you can select any time period you would like, 1 day to ALL DATA from the box in front of basic chart. Usually, a good enough picture of what you want to see can be found on a two year chart.

I enjoy working with charts and have been doing so for many years. As Sir Isaac Newton once said, "Truth is ever found in the simplicity, and not in the multiplicity and confusion of things."

Charts are recorded days and parts of days of price activity from the interactions between, potentially, millions of people around the globe.

Unfortunately today with all the hedge funds in operation and the government's meddling in the free market system, students of the chart world need to be more vigilant.

For those of you who might be interested, there is an excellent article in the archives of financialsense.com written by Frank Barbera, CMT.

The article, "The Coming Bull Market in Gold Stocks" was submitted on April 14, 2005.

The bottom line according to Elliott Wave Analysis which is interpreted by Mr. Barbera is that significant gains will be made by gold shares in the years ahead.

How about an 8500% gain by 2018? Repeat, an 8500% gain by 2018. Check out the article, it's a real thriller.

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