What A SHAM !!!

Gold and silver remained near unchanged in Asia and London, but they then plummeted at the New York open, remained near their lows for the rest of trade, and gold closed about 0.5% off its low of $816.80 with a loss of 3.89% while silver closed at its low of the day with a loss of 4.88%.

Oil fell nearly 8% on continued worries over demand while the U.S. dollar index rose as the euro fell on talk the ECB may cut interest rates by 50 basis points to 2.00% on Thursday.
- The Goldseeker Closing Report

WHAT?!!! The US Dollar Index rose because the ECB may cut interest rates 50 basis points to 2.00%. Excuse me? Last time I checked, 2.00% is 2 points more than the ZERO the US Fed is currently paying. Why on earth would anybody sell the Euro to buy the Dollar? The Euro is paying 2.50% today. If you cut 50 basis points to 2.00% Thursday, you STILL get 2% on your money in the Euro vs. ZERO PERCENT on the Dollar. It's beyond laughable. If you started to laugh at this you may never be able to stop. Now really stop and think about it. Why would anybody buy the US Dollar period? Seriously, WHY?! A nervous short in the Dollar would buy the Dollar, and I'd like to suggest that just that occurred today and nothing more.

Further more, if today's and Friday's CRIMEX is not proof of what a total SHAM the paper Gold market is, I don't know what is. The KITCO chart of Gold posted above is worth a thousand words on this SHAM. Nuff said...

Last Nail in the Coffin
The government has just released one of the most shocking federal budget reports of all time.

Even if you overlook the gaping holes in their economic assumptions, it’s obvious the federal deficit is going to deliver a punch below the belt of the economy.

And once you unveil the shaky assumptions, it’s equally obvious the deficit could be the last nail in its coffin.

• The 2009 federal deficit will be $1.186 trillion! Even after adjusting for inflation, that’s more than the combined cost of the Vietnam War ($698 billion) and the Korean War ($454 billion) … 4.6 times more than the entire S&L bailout of the 1980s … and 5.5 times larger than the Louisiana Purchase


• In sheer dollars, the 2009 federal deficit will shatter every record deficit of every nation in history.


• Even in proportion to the larger U.S. economy, the 2009 deficit will represent 8.6% of GDP — more than four times the average under Bush, nearly seven times the average under Clinton, and 1.4 times the post-World War II record of 6% under Reagan.


• After you factor in the additional deficit spending and tax cuts proposed in the Obama stimulus package, the deficit will surge to 10% of GDP.


• Federal spending will reach 25% of GDP — the highest level in American history outside of World War II. But during World War II, most of the money was spent on war-related production, creating entire new industries and keeping millions of Americans in uniform or on the job. In contrast, most of the 2009 deficit spending will be for corporate bailouts, unemployment benefits, Social Security and Medicare.


• Already, in the first quarter of fiscal 2009, the federal deficit has ballooned to $485 billion, an unprecedented increase of 353% compared to the previous year. If it continues to grow at that pace, it will make all the above estimates look small by comparison.

This is not a fictional scenario conjured up by a gloomy economists with a murky crystal ball. Nor does it represent a third-party diatribe against Democrats and Republicans. It accurately represents the actual numbers just released by the nonpartisan CBO on January 8. http://www.moneyandmarkets.com/last-nail-in-the-coffin-29223

In Fraud We Trust
by Rob Kirby
Some central banks (those of China, Russia, Iran and Venezuela) are actually buying physical gold to bolster their reserves. Perhaps you will take notice that countries that have a penchant for gold coincidentally are not viewed as America’s best friends. Ever wonder why?

Fondness for gold makes the dollar look bad. If you are America and are in the business of printing dollars to buy whatever you want, folks buying gold are raining on your parade, and if they do too much buying of gold, dollars can become worthless and not welcome in exchange for goods and services. (I would suggest that this is happening right now.)

JPMorgan Chase is the Federal Reserve in drag. It is Morgan Chase’s job to make sure that gold remains viewed as an unworthy means of wealth preservation, so that the biggest Ponzi scheme in the world stays viable — the U.S. government bond market.

Plunges of $200 in the gold market require FUEL.

JPMorgan Chase’s swelling of its gold derivatives book by $15 billion in three months [Q3 / 08] was undoubtedly the fuel. The implication here is that the Morgan Chase gold trader in the Comex pit “fireballed” the price of gold by selling dizzying amounts of paper gold [futures] over the period in question.

An incredible feat, in a world that is supposedly starved for capital, this institution somehow saw fit to take $15 billion in notional risk to short the living bleep out of gold.

Unless you live in a vacuum, you can only conclude that the Morgan Chase gold trader was INSTRUCTED to beat gold with a stick.

The instructors were Messrs. Paulson and Bernanke.

But in the end, just as physical shortages of staple goods – in the face of limitless money creation - will push prices higher; it will be the same where gold is concerned. This process is now underway with the fraudulent futures [paper] price of gold already decoupled from the cost of buying physical ounces. Continued fraudulent interventions only ensure that this sordid perversion ends sooner rather than later. http://www.financialsense.com/fsu/editorials/kirby/2009/0109.html

Gold to have boom year
GOLD - the traditional safe haven in times of crisis - has performed well in the downturn as other investments have been battered.

But some experts predict it could be a standout investment this year because of major concerns about the stability of the US dollar and limited supplies available.

Gold is a unique commodity - not only is it consumed, like other metals, but it is also an intrinsic store of value that historically has been immune to inflation.

That is why most central banks hold gold in their reserves.

According to Mark Pervan, head of commodity research at the ANZ, central banks are hoarding it.

"There is 33,000 tonnes sitting in central banks, which is the equivalent of 10 years' supply of gold," he said.

Mr Pervan said central banks are holding the gold because of fear about the way the US is using the printing press to refloat its economy.

"We haven't seen how all the cash they are printing will play out yet," he said.

"They're giving it to banks and the banks aren't doing anything with it, but the moment the banks start pushing that money back into the economy, inflation will come back and gold will surge."

His view is shared by American finance guru Peter Schiff - one of the few economists to predict the credit crisis.

Mr Schiff recently spoke out against the current rally by the dollar - saying it made no sense and was likely to end in a big correction this year.

"I think it's a safe haven," he said of gold.

" A lot of people are seeking safety right now in the US dollar, but that makes no sense to me. That's like jumping out of the frying pan into the fire.

"I think the dollar is a fundamentally flawed currency that is doomed to collapse and temporarily it's benefiting from the fact it's seen as the alternative to everything else." http://www.news.com.au/heraldsun/story/0,21985,24895117-664,00.html