...As The Baby Goes Out With The Bath Water

What can I say that has not already been said? I can only say one again, "What a joke." Outside of that, NO COMMENT.

Seriously? Consider the frozen credit markets for a moment relative to the commodity markets. No credit = no money. No money = no demand. No demand = No rise in prices. Sadly, it appears as simple as that for the futures markets and the CRIMEX.

“Here’s the deal at the moment the way I see it…

*Demand for physical gold is astonishing and yet the price goes nowhere. The dichotomy between the "real" gold market and the Comex is widening.

*The US Government is petrified of gold rising to any degree because of its importance, in that a sharply rising price will shed light on "Dracula" … or the hideous inflationary forces set in motion by Comrade Paulson’s bailout.

*The gold price suppression scheme is SO childish, yet most on Planet Wall Street fall for it, or eat it up because it is in their interest to do so … See No Evil, Hear No Evil, Speak No Evil

*They fall for it because they refuse "to go there" when it comes to understanding just how much the US has meddled with the gold price and in other financial markets.

*Gold, a barbaric relic? Hardly … to the contrary it is becoming more relevant than ever.

*The Gold Cartel has rendered the most widely watched barometer of US financial market health, gold, dysfunctional. The mainstream gold pundits come up with one silly notion after another why gold is not flying.

*The rigging of the price of gold was one of the main contributors to the financial market disasters of the day and GATA warned the world in our WSJ ad on Jan 31, 2008.

*The Gold Cartel is all over the price of gold because a few key ones are SHORT. The US Government is implementing another bailout of sorts to protect them and their own Gold Cartel position.

*I would much rather be making money with my gold, silver and sizeable share positions; however, each passing day The Gold Cartel proves how right GATA has been for a decade.

*For the most part the US financial market press refuses to give GATA the time of day. I guess they realize once we shine the light on Dracula to the general public, he is a goner. Anyone who can add 2 plus 2 can see what is occurring at the moment.

*It is only a matter of time before THE LIGHT is directed on The Gold Cartel and they will recoil.

*Several months ago we received reports that bullion dealers in the MidEast were making it much more difficult for buyers over there. Unfortunately similar reports are coming my way on a daily basis from all over the world that this trend is picking up speed. It appears governments and bullion banks are not banning gold, just making it very difficult to purchase.”- From yesterday’s Midas report by Bill Murphy of LemetropoleCafe.com

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It has been interesting reading the comments about this market in the financial press of late. The majority of gold pundits for the most part seems to be reading the same talking points which as usual are utterly and completely wrong. To hear them say it, gold as a safe haven is finished, over, kaput, pushing up daisies, swimming with the fishes, surfing its last wave, worm food, ad infinitum, ad nauseaum.

What these mindless robots seem unable to grasp is that the Comex is NOT the gold market. It is a paper market which has been the recipient of large speculative buys by commodity index funds. These funds take large positions in an entire gamut of commodities based on the weightings of those particular commodities in the various commodity indices that they use as a benchmark. It some cases it might be the Goldman Sachs commodity index. In others it is the Reuters/Jefferies CRB index; it still others it is the Dow Jones Commodity Index. That means they buy gold, silver, crude oil, corn, wheat, nat gas, sugar... etc... in the same percentage terms as they are weighted in those indices. For example, if the weighting in one of these indices for gold happens to be 5%, then for every million dollars of client money invested, they are required to buy $50,000 worth of gold futures contracts at the Comex. When these funds get redemption requests from clients, who now want out of the commodity sector, they are forced to sell FUTURES across the board to generate the cash needed to send back to their clients. That is why, for the most part, the entire commodity complex is sinking whether it is corn or soybeans or wheat or platinum, etc. If $20 million of cash is required to meet client redemption requests, then $20 million of commodity futures must be sold REGARDLESS OF THE FUNDAMENTALS IN THAT PARTICULAR MARKET. In other words, it is FORCED liquidation on account of redemption requests. That has NOTHING TO DO with the real physical gold market where demand remains at unprecedented levels, levels so high that it is producing serious shortages of bullion for would-be buyers. This is what is producing the increasing dichotomy between the Comex and the real gold market. I would go as far as saying that we are for all practical purposes seeing a BLACK MARKET in gold beginning to develop.
-Dan Norcini @ http://www.jsmineset.com/home.asp

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What we need now is a three-prong approach. Retail gold and silver investors, who we are very proud of for their steadfast commitment to gold and silver in the face of outrageous and brutal beatings, must continue to strip the dealers of all their gold and silver. Then, those who are well-heeled, such as non-Illuminist hedge funds and institutional investors, as well as non-Illuminist wealthy individual investors, must start paying cash for COMEX gold and silver bars by executing contracts for purposes of taking physical delivery, as opposed to speculating, thus emptying out the cupboards of the commodity exchange. Producers should, individually or in groups, start the process of vertical integration, buying out smelters and dealers so they can sell their production at far more profitable retail levels, thus siphoning supply away from the wholesale gold and silver markets and breaking the fraudulent commodity exchanges run by big commercial banking interests that are forcing them into ruin. If we all work together, we can break the back of the cartel and achieve the profits, which our investment wisdom and steadfast commitment to the cause of precious metals deserves. We would like to see some of the money being pumped into the gold and silver ETF's going into the purchase of gold and silver resource stocks, as they desperately need your help to support stock prices. Otherwise, they will be forced to dilute themselves into oblivion by selling an inordinately large number of shares to finance their operations. With oil down now, and the Illuminists forcing the credit markets open again, and hyperinflation on its way at ever-increasing levels, there could be a real bonanza waiting for us in the resource sector.
-Bob Chapman, The International Forecaster http://news.goldseek.com/InternationalForecaster/1224099655.php

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GOLD & SILVER AWAIT THEIR EXALTED STATUS
We are witnessing the disintegration cited in my recent forecasts. It is a systemic failure, marred by lost confidence and trust in the entire financial system. Expect foreigners soon to pull the rug from under the American syndicates in control. Several key meetings have already concluded, totally unreported in the US press, which occurred in Berlin Germany. Consider it the Anti-G7 Meeting. Implications are profound, and involved the Shanghai Coop Org tangentially, since its member nations possess so much new commodity supply. Consider it the Anti-NATO group. An important and powerful alternative financial system is soon to spring into action, including high-level bilateral barter. Those who expect the current US Regime to continue their financial terror are in for a big surprise.

Expect defaults in the COMEX with gold & silver, whose prices for paper vastly diverge from physical, to the anger of foreigners watching. They hold massive precious metals assets. Disparities now contribute to powerful forces, sure to break the current system. Grand systemic changes come. THE RESULT WILL BE A BREATH-TAKING DISCONTINUITY EVENT.

Ironically, the more inner anguish felt on the falling gold & silver prices, the closer we are to a new financial framework, with the USDollar relegated to a Third World role. A REPLACEMENT GLOBAL RESERVE CURRENCY HAS ALREADY BEEN DECIDED UPON. Its launch awaits the proper moment. The Americans are last to know, as usual. The US leaders are under the illusion of being in control!
-Jim Willie CB
http://news.goldseek.com/GoldenJackass/1224227280.php

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As the government takes over more and more functions of the economy many see the rise of socialism as an antidote to this failure of “capitalism.” However, the fact remains that our economy has been increasingly running on debt, not capital. Capitalism does not exist without capital and debt is not, has never been and will never be a form of capital. Only now are we seeing the more dire implications of an economy without capital.
-Dr. Ron Paul, U.S. Congressman
http://news.goldseek.com/RonPaul/1224161701.php