FROM CASEY RESEARCH DAILY EMAIL

And then there's this... From Ed Steer: Wednesday was a day of almost continuous speculative long liquidation on the Comex...especially in gold...as it made a new low price for the move yesterday. This quiet downward trend was maintained almost without a break through the entire 24-hour period. Any attempt at a rally ran into quiet (but firm) resistance. As the spec longs in the Non-Commercial and Non-Reportable category of the COT pitched their long positions, the '2 or less' US bullion banks covered every short they could...and probably went long themselves when the opportunity arose. Volume on the Comex yesterday was quite a bit heavier in gold than it was in silver. Here's the the 3-year gold chart. Never in its history has the gold price been this far below its 200-day moving average. It's not a pretty picture. (SEE CHART POSTED ABOVE) As for silver...it had a rather bumpy day in New York pricewise, but the results would have been the same...more spec long liquidation and more short covering by the US bullion banks. However, it would not have been as much as gold, because silver would have to break through to a new low (below US$9.00/oz.) for that to happen. How much liquidation there was yesterday will be hinted at when the open interest numbers become available later this morning. Open interest declines for Tuesday's activity are as follows...gold o.i. down 1,426 contracts and silver down 1,126. These numbers should be in tomorrow's COT. One thing I forgot about was options expiry in silver. Although November isn't a big delivery month for either metal, silver options expiry is October 28th...and first day notice for November delivery will be the 31st...Hallowe'en. Despite the horrendous drops in price for gold and silver yesterday...or the entire week for that matter...there were no changes in inventory levels in either the SLV or GLD. This is the third day in a row that the SLV has posted no changes...and only a few minor drops in the GLD. It will be interesting to see how long this trend lasts. In other news, I see that Norilsk Nickel is 'open to offers' for its 55.4% stake in the Stillwater platinum and palladium mine. Norilsk paid US$257 million for it back in 2003. It will be interesting to see what it ultimately sells for...if it sells at all. Now for my first 'story'. As you are aware, the Fed and the Treasury Department have been making up trillions of US dollars out of thin air over the last several months in order to keep up the liquidity in the world's banking system...which is a whole different issue than solvency. The boys over at The Nightly Business Report at PBS put their heads together and came up with this hilarious ad for the US Treasury Department. It's entitled "No credit? No assets? No problem at the U.S. Treasury!" The link is here: http://www.gata.org/node/6793 My second story is from CBS out of San Francisco. It's about the construction of the new George W. Bush Presidential Library. However, if 'Proposition R' is passed on November 4th...that won't be the only landmark named in Dubya's honour. Would you believe the "George W. Bush Sewage Plant?" I couldn't make up a story like this if I tried. The story (tee hee!)...entitled "San Francisco Votes To Give Dubya a Dubious Honor"...is linked here: http://cbs2.com/politics/George.Bush.President.2.843151.html A great deal of intelligence can be invested in ignorance when the need for illusion is deep. - Saul Bellow This historic commodity sell off (spec long liquidation on the Comex/CME) has plumbed new depths. At today's prices, there are virtually no metals that can be mined without losing big money on every ounce or pound that's dug out of the ground. This can't last...and won't. It's only the timing of the turnaround that is hard to know. However, just about every technical indicator that I've seen this week, shows that we are more oversold now than at any point in decades...if not longer. Oversold (and overbought) conditions at historic extremes such as these have only lasted for a very brief period of time...then reversed violently. Let's see if that scenario is in the cards this time.