Monday, August 24, 2009

Tipping The Scales

Gold Market Update
By: Clive Maund
UPSIDE BREAKOUT ALERT: gold is now believed to be very close to an upside breakout to new highs, a development that should lead to a rapid advance towards the $1300 area, and it should be noted that this scenario will not be negated by a brief sharp drop that may be aimed at wrong-footing a lot of traders. The reasons for shifting from our recent stance of neutral/bullish to flat out bullish are as follows... 1. Massive inflationary pressures building as the gargantuan panic measure increases in M0 money supply by the US Fed late last year and well into this year come through the pipe, replicated in other countries around the world although probably not on such a grand scale. 2. strong breakout by US stockmarkets late last week that portends continued gains, confirming the building inflationary pressures. 3. ongoing gains in the prices of other commodities - copper continues to advance, crude oil threatening to break clear above June highs. 4. window for dollar to stage a strong rally believed to be closing, increasing downside risk - it appears that the dollar is to be sacrificed in favor of Treasuries - a quite logical way of reducing reducing the debt burden, even if not entirely appreciated by creditors. 5. significant improvement in gold COT last week. 4. gold's best month of the year seasonally, September, is just around the corner.

GATA presses Fed to give up its golden secrets

Dear Friend of GATA and Gold:

Yesterday GATA's Washington-area law firm, William J. Olson P.C. of Vienna, Virginia -- -- filed with the Federal Reserve Board an administrative appeal of the Fed's most recent refusal to grant us access to the agency's records involving the U.S. gold reserve.

By letter dated August 5, the Fed reported to us that 137 pages of documents being withheld "contain the following kinds of exempt information: 'trade secrets and commercial or financial information obtained from a person and privileged or confidential' (confidential commercial information); and 'inter-agency or intra-agency memorandums or letters which would not be available by law to a party other than an agency in litigation with the agency' (staff memoranda, draft memoranda and letters, and intra- and inter-agency communications). Such information is exempt from disclosure under authority of Exemptions 4 and 5 of the [Freedom of Information] Act, respectively, 5 U.S.C. 552(b)(4) and (b)(5)."

We construe this as an admission that the U.S. gold reserve has been put into private hands to some extent or has been compromised in some way by possession by private interests, such as financial houses that trade in gold. Really, why should any Federal Reserve record involving the national gold reserves be confidential, except perhaps records involving the most ordinary security of the reserve's vaulting? Plainly the Fed has knowledge of something that has been done with the gold reserve that the U.S. government does not want the American people and the financial markets to know.

Further, GATA's administrative appeal notes, the Fed's search of its records in response to our request was negligent, insofar as it did not cite at least one document involving gold swaps that is posted and publicly accessible at the Fed's own Internet site. That is, it seems that GATA's lawyers looked harder for the relevant documents than the Fed itself did.

It strikes GATA as remarkable that the financial market commentators who most often disparage suggestions that central banks are intervening surreptitiously as well as openly in the gold market never have tried to put a critical question about gold to any central bank. Even big financial news organizations have failed to do this when reporting on the gold market. But if they ever did start asking critical questions, they would have to report that the Fed has some big secrets about gold. It is more justification for U.S. Rep. Ron Paul's legislation to audit the Fed.

You can read GATA's administrative appeal of the Fed's denial of our freedom-of-information request here:

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

International Forecaster
By: Bob Chapman, The International Forecaster
Speaking of regulators, Ted Butler thinks he can work with someone like Gary Gensler, who is the current chairman of the CFTC, and an alumni of Goldman Sachs (gee, what a surprise). Gary Gensler helped Larry Summers rig the gold market as the Clinton Administration established its strong dollar policy, taking gold down to its market bottom as Gordon Brown put his two cents in to create "Brown's Bottom."

Gensler also teamed up with Summers to advocate the repeal of Glass-Steagall and the deregulation of derivatives via the Commodity Futures Modernization Act. Ted thinks he can work with Gary because Ted is a gentlemen, but he should know better. These people do not think like he thinks. They are greedy, slimy animals. Never in a million years will they decrease position limits for the COMEX silver market without continuing the various exemptions enjoyed by the commercial shorts even though they have absolutely no legitimate business purpose to hedge other than pure manipulation. In fact, it is most likely that any reduction in position limits by the CFTC will be used to suppress the large specs, and thereby to strengthen the positions of the large commercial shorts. But Ted is serving an important function in that he is documenting the rampant fraud and manipulation, and putting officials on notice, so they do not have the excuse that they were ignorant. We commend him for this. That way, when the trials and recriminations start, we will know who to prosecute and we will also know the precise nature of their crimes. This is why we always put links to Ted's articles in the IF. He is intelligent and well-meaning, and that is more than we can say for most newsletter writers who are little more than Illuminist disinformation specialists, or just plain idiots, with few exceptions.

The Chinese, on the other hand, might very well accomplish what the CFTC regulators have refused to do, which is to break the paper log jam created by the Illuminist cabal in the silver futures market. The Chinese just made it legal for their citizens to buy silver, probably so they can protect themselves from the idiot QE (Quantitative Easing) monetary debauchery being perpetrated against them and the rest of people in the world, including Americans, by Buck-Busting Ben. Even though China's hands are just as filthy-dirty as America's, we can only say: Go, China!!!

Speaking of COMEX gold and silver futures, it appears that the Illuminati have solved their physical gold and silver inventory shortage which was causing them great headaches as massive demands for physical delivery were received. At first, they just lied about their inventory. The inventories did not change even as hundreds of requests for physical bullion were settled month after month, often with the help of central banks like the ECB and other outsiders like the Canadian mint. Now, instead of using physical bullion, they can hand you an ETF contract instead. So they are trading paper for, well, more paper! Pretty slick, eh? They want to give investors the convenience of having an interest in a publicly traded security so they will just hang onto it and not demand physical delivery. But therein lies the trap. These ETF's have leased large portions of their bullion out to the bullion banks for purposes of gold and silver suppression. They do not have what they say they have any more than the COMEX does, and if you hold on to your ETF contract, you may well become the next victim of a Madoff-like Ponzi scheme.

What this means, oh precious members of the hard money community, is that you should demand delivery of your metals from the ETF's assuming that this is possible pursuant to your contract. Otherwise, here is what the system looks like: You buy a COMEX gold or silver contract with cash. You demand physical delivery of your gold or silver. Instead, they hand you an ETF contract. Unless you can demand the metal from the ETF, the ETF will simply hand you back cash instead when you liquidate your position, and you will be left hanging right where you started, with a pile of depreciating cash and no physical metals. If you try to hold on to your ETF position to at least get the appreciation in value of precious metals, you may never be able to cash it in, because the ETF's may well turn out to be nothing more than Ponzi schemes. If the sponsors do not have the metals, they will not be in a position to cash out all the shares. And the COMEX can just hand out as many ETF shares as they please, because no one will be checking the legitimacy of these contracts, especially the ETF sponsors, who will be in cahoots with the COMEX.

Theoretically, under such a system where you are run around in paper circles leading to nowhere, you could buy and sell gold and silver in any quantity, no matter how vast and ludicrous, because there would never be a requirement anywhere in the system to produce the actual physical bullion! This is unadulterated BS poppycock!!! They can just short gold and silver forever and keep handing out ETF contracts to satisfy requests for delivery, and no one will be the wiser as there will never be enough ETF liquidations to empty the ETF's cash pot until it is too late and the Ponzi scheme blows up. If the Illuminists need a technical advisor, they can always consult with Pat Kiley.

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