Saturday, November 15, 2008


Commitment Of Traders Data From Trader Dan Posted: Nov 14 2008 By: Dan Norcini Post Edited: November 14, 2008 at 7:48 pm GO TO JSMINESET.COM FOR ORIGINAL POST AND LINK TO CHARTS Dear Friends, Linked below is a set of charts detailing the latest Commitment of Traders reports from the CFTC. I have included some comments on the charts as is my custom but there are several things that stood out enough for me to mention separately. First of all - - the commercial shorts (the bullion banks) now hold their smallest number of outright short positions in nearly 3 1/2 years. One has to go all the way back to August 2005 to find a lower number. They have liquidated a mind-boggling 220,000 contracts since the beginning of this year but even more importantly, they have covered 190,000 shorts since July of this year. From a peak of 358,802 in July, before the gold market fell apart, they have now reduced their outright shorts down to a mere 167,614 contracts. Why is this important? It tells us that the selling in the Comex gold market has not been coming from the bullion banks. They have been buying since July. Now they might sell on occasions as the market rallies into a resistance zone and provide the intraday capping but they are not adding to those shorts. Instead they are taking them off immediately as soon as the market begins to sell off. Who then is doing the selling at the Comex? The answer is provided by looking at the data. The commercial long category has liquidated 52,000 longs since September 9. Lumped within this category are some of the giant index funds. At this point we have no way of knowing exactly how much of the selling in this category is specifically related to the index funds but I would guess that at least 50% of it is. The trading funds have sold out 124,000 of their existing longs since July with the small spec category unloading 33,000 longs over that same period (Note – these numbers are all rounded off). Not to be forgotten, some of the trading funds have gone short. What we are therefore witnessing is confirmation that the selling pressure in the paper gold market is coming from hedge fund deleveraging and index fund redemption requests alongside of the general public who have been abandoning the commodities sector. How much longer this selling can continue is open for debate but at some point the bulk of the redemption request selling will end as those who wish to get out of commodities will have done so. At that point the paper gold market will bottom. I submit that this will occur at or near the same time that the grain markets put in a concrete bottom. A bottom in the crude oil market will be further confirmation. When these things occur, the commodity markets will begin to trade their own specific set of fundamental factors instead of the one sided selling avalanches that have buried nearly all of them irrespective of their own supply/demand factors. Right now, the dynamic that marks the commodity world is money related selling irrespective of fundamental factors. Simply put – it is all a money game that we are currently witnessing. These things happen fairly regularly in the futures markets although not to the extent and scope that we are now observing. I have seen enough of this sort of action in my trading career to know that eventually fundamental factors reassert themselves but only after the money issues are exhausted. Trader

Friday, November 14, 2008


Paulson the Bungler By Mike Whitney November 13, 2008 "Information Clearinghouse" -- Henry Paulson's time at Treasury has been one pratfall after another. Even so, on Tuesday he managed to out-due himself. Paulson held a "surprise" press conference where he announced that the $700 billion Troubled Asset Relief Program (TARP) wouldn't be used to buy troubled assets after all. Instead, the money will used to bail out insurance giant AIG, provide extra capital for the banks to hoard, and now (this is new part) give money to "nonbank financial institutions, like insurers and specialty-finance companies" so they can lend to credit-worthy consumers. (Isn't that why we gave money to the banks?) "There is no solution. The first thing to realize is that it is not a matter of "fixing" the economy. The economy is fixing itself by purging the unsustainable debt from the system. That's how markets work. Greenspan's low interest rates created a subsidy for debt which--along with the alphabet soup of leveraged derivatives--buoyed the economy along on the biggest wave of speculative financing the world has ever seen. The distortions that were caused by the unprecedented credit expansion stimulated artificial demand that created the appearance of growth and prosperity but, in truth, was nothing more than an equity bubble. Now the bubble has popped and the financial system is returning to the mean."


The G-20’s Secret Debt Solution by Larry Edelson 11-13-08 Larry Edelson If you think this weekend’s G-20 meetings in Washington are only about designing short-term fixes to the financial system and regulatory reforms for banks, hedge funds, brokers, mortgage companies and investment banks … think again. Behind the scenes, a far more fundamental fix is being discussed — the possible revaluation of gold and the birth of an entirely new monetary system. I’ve been studying this issue in great depth, all my life. And given the speed at which the financial crisis is unfolding, I would be very surprised if what I’m about to tell you now is not on the G-20 table this weekend. Furthermore, I believe the end result will make my $2,270 price target for gold look conservative, to say the least. You’ll see why in a minute. First, the G-20’s motive for a new monetary system: It’s driven by and based upon this very simple proposition … “If we can’t print money fast enough to fend off another deflationary Great Depression, then let’s change the value of the money.” I call it … The G-20 may propose devaluing all currencies, including the U.S. dollar and the euro. The G-20 may propose devaluing all currencies, including the U.S. dollar and the euro. “The G-20’s Secret Debt Solution”


Whither the US dollar? * by Ronald Solberg * November 03, 2008 US dollar Appreciation The US dollar as measured against six major world currencies has appreciated approximately 19% during the last three months through end-October. In particular, the US Dollar index stands at 85, up from a recent low of 71.3. This trend reversal takes the US dollar’s valuation back to levels not seen since October, 2006 and represents nearly a 38.2% retracement from its index peak of 120 in January, 2002; by any measure a significant move and one largely unexpected by the financial markets both in terms of its timing, speed and magnitude. What has caused this abrupt appreciation of the US dollar during the past quarter and what can we expect over the next 12-24 months? There are both fundamental and technical reasons that have been US dollar supportive in the past several months.


Retail sales plunge record 2.8% in October By Rex Nutting Last update: 8:30 a.m. EST Nov. 14, 2008 WASHINGTON (MarketWatch) - Falling for a fourth straight month, U.S. retail sales plunged a record 2.8% in October as sales of autos and gasoline plummeted, the Commerce Department estimated Friday. Excluding the 5.5% drop in auto purchases, retail sales fell a record 2.2%. Economists were looking for the headline sales number to fall 2.3% and sales excluding autos to drop 1.7%. Falling gasoline prices accounted for about half the decline in total sales. Sales at gas stations fell a record 12.7% as the average price at the pump plunged. Sales excluding gas dropped 1.5%, the biggest decline in three years. Excluding both autos and gas, sales fell 0.5%. Sales were quite weak across a broad swath of the retail sector in October, an indication that the fourth quarter could be worse than the just completed third quarter, when inflation-adjusted consumer spending fell at the fastest pace in 28 years. Retail sales account for about half of consumer spending and about one-third of domestic demand. Retail sales are down 4.1% in the past year. Sales fell a downwardly revised 1.3% in September. Sales in August were also revised lower to a 0.7% decline. The dismal report confirms what the business sector has been saying: Consumer spending is falling rapidly. This week, for instance, Best Buy said it saw a seismic shift in spending. The world's largest retailer, Wal-Mart, reported better-than-expected revenues, but lowered its forecast for future sales. For their part, the automakers are pleading for a lifeline from Washington, with per capita sales dropping to the lowest levels since World War II. Details Sales of durable goods remained weak. Sales at furniture stores dropped 2.8%, sales at electronics and appliance stores fell 2.3%, and sales at hardware stores fell 0.4%. Sales at the mall were horrible. Department store sales dropped 1.3%, clothing store sales fell 1.4% and sporting and hobby stores sales fell 1.6%. As bad as those numbers are, they are slightly better than in September. Sales at grocery stores were flat, while sales at bars and restaurants rose 0.3%. Sales at health and personal care stores rose 0.4%. Sales at nonstore outlets, such as catalogs and online stores, fell 1.8%


TODAY'S REPORTS: Import price index Retail sales Retail sales ex-autos Consumer sentiment Inventories Good spike up on the opening this morning, but of course it gets sold off immediately. Dollar has remained lower from its sell off yesterday. Very few seem to think the Dow rally from yesterday will continue. It was a good opportunity to get out before stocks fall much further. Gold making a second attempt at going higher right now. more later.

Thursday, November 13, 2008

THURSDAY 11/13/08

I haven't been posting too much the last few days because I am simply exhausted from pushing myself too hard with insufficient sleep. I have been getting more sleep in the morning and am feeling better. I just needed to get away from this mess as it was wearing me down. Winter is coming and I'm still way behind on the projects I need to finish before the snows hit. Hopefully, I will be able to get them done on the Thanksgiving Holiday, as I only get Saturdays and half of Sunday to get anything done, and something always seems to pop up and steal that time too. I'm hoping that gold will take off as we approach the Comex Dec Gold contract First Notice on Nov 28th. Usually it would be on Nov 30th, but that falls on Sunday, so they've moved it to Friday the 28th. Today's sell off and big rally on the close and into the afternoon trading shows us that there are buyers just waiting for really low prices to buy back in. Also, the Dollar fell significantly at the end of the gold session as the Dow rose, so it appears the Dollar has pushed about as high as it's going to go. Just how fast it will fall will be interesting to watch, as these markets don't piddle around anymore. When they rise or fall, they do so in a big way. You are all going to be shocked to see how fast gold is going to rise when the World finally comes together and finally accepts that the Dollar is DEAD! I should be rested by this weekend when I hit the BIG 64 on Nov 16th. The lyrics, "Will you still need me, will you still feed me, when I'm 64?" have more meaning now, and I already know the answer... "NO!" It's so comforting to realize that our Guv'mint and all the leaders I've had throughout my life haven't given a shit about the people of our country, regardless of the Oath to the Constitution they all took to uphold that document. Just goes to show you, you can't trust anyone with your life but yourself.

Tuesday, November 11, 2008


Global systemic crisis Alert For Summer 2009: The US Government Defaults on its Debt By GEAB OR GO DIRECTLY TO THEIR WEBSITE AT:!-Global-systemic-crisis-Alert-Summer-2009-The-US-government-defaults-on-its-debt_a2250.html November 10, 2008 "GEAB N°28" (October 16, 2008) - -In this 28th edition of the GEAB, LEAP/E2020 has decided to launch a new global systemic crisis alert. Indeed our researchers anticipate that, before next summer 2009, the US government will default and be prevented to pay back its creditors (holders of US Treasury Bonds, of Fanny May and Freddy Mac shares, etc.). Of course such a bankruptcy will provoke some very negative outcome for all USD-denominated asset holders. According to our team, the period that will then begin should be conducive to the setting up of a « new Dollar » to remedy the problem of default and of induced massive capital drain from the US. The process will result from the following five factors studied in detail further in this GEAB: • The recent upward trend of the US Dollar is a direct and temporary consequence of the collapse of stock markets • Thanks to its recent « political baptism », the Euro becomes a credible « safe haven » value and therefore provides a « crisis » alternative to the US dollar • The US public debt is now swelling uncontrollably • The ongoing collapse of US real economy prevents from finding an alternative solution to the country's defaulting • « Strong inflation or hyper-inflation in the US in 2009? », that is the only question.


Gary North's REALITY CHECK Gold's price: The Federal debt: To subscribe to this letter: Issue 805 November 11, 2008 CHINA PULLS THE SECOND TRIGGER I'll bet you missed the first. I did. So did everyone else, except for one lone observer. The second trigger is this: China announced on Sunday, November 9, that it will launch a two-year program of subsidies amounting to something in the range of $600 billion. There were no details about how the government will do this. The magnitude of this sum is staggering. China has 1.3 billion people. It must therefore tax, borrow, or print the equivalent of $450 per capita. In 2006, per capita income was around $1,700. It's probably still under $2,000. The initial response of the financial press was positive. This policy is pure Keynesianism. This has been the governing theory of Western economies since 1945. The pundits embrace government spending. The Dow Jones Industrial Average opened up 200 points on Monday, the day after the announcement. It immediately turned south. It closed down 73. China is not in a recession. Its rate of growth slowed to 9% in the third quarter. That is down from 12% in 2007. (These are government figures.) It was the fear of 6% growth in 2009 that prompted this announcement. The government is terrified of a slowdown to merely double what the West is predicted to experience in 2009 (IMF estimate). The government of China is following in the footsteps of the failed policy of infrastructure building that Japan adopted in 1990. Japan spent the next decade and a half in slow growth, with mounting government deficits. It is assumed that China can somehow afford this expansion of government spending without distorting the economy. This move is not seen as a return to the Communist policies of the pre- reform era. It is seen as a belated adoption of Keynesian policies of government-directed spending. It is a repudiation of the free market in the name of a managed economy. This was the second trigger. What was the first? THE FIRST TRIGGER This has received no publicity. The man who discovered it is not famous. He published his findings in an English-language edition of a Mexican periodical. He says that he has searched the Web for a month, looking for some announcement and analysis of what the figures reveal. Nothing is on-line. The figures reveal that the world's central banks have ceased buying each other's debt. Take a look at the chart he published. It shows a nearly exponential growth in reserves until August. Then, without warning, they ceased. There was even a slight sell-off of securities in September. Prior to August, reserves had been growing at more than 25% per annum. Could the figures be incorrect? Yes. But the supreme issue is the trend, not the accuracy of the data-collecting. What would cause the world's central banks to stop buying government debt obligations, meaning primarily debt obligations of foreign governments? This answer comes to mind: fear of an international currency crisis so severe that major governments will default. Under normal times, this would not seem possible. But times in which central banks decide not to buy any more foreign currencies are not normal. This development is eerily similar to the situation facing the domestic credit markets. Bankers worry about lending to other banks. The Federal Reserve then intervenes to announce a target rate for the overnight loan rate among banks. This is the Federal Funds market. This persuades bankers that the FED is guaranteeing liquidity and therefore repayment. They lend to each other. There is no central bank for central banks. There is no top of the pyramid. This weekend, there will be a meeting of the G-20 nations. The topic under consideration is a restructuring of the international financial system. There is talk of the creation of a new international central bank. To get central bankers to submit to an international bureaucracy seems like a long shot. Talk of such an institution goes back to the 1970's. It has never been proposed officially. Over the next few weeks or months, this trial balloon will be floated: a new international central bank. If the credit crisis is perceived as severe, or threatening to become severe, central bankers may buy it. This would function as a cartel of cartels. The problem is, this central bank could not control the fiscal policies of the nations. Nations are free to run fiscal deficits or surpluses. There can be interest rate differences. There can be written rules governing deficits, but there is no agency to enforce these rules. There is no common civil government. The complexity of these problems will hamper any attempt by bureaucrats to come to an agreement regarding currencies and a common central bank. Central bankers do not fully trust each other, nor do they trust each other's governments. Under the international gold standard from 1815 to 1914, there was touchstone for honesty: redemption of a nation's currency for gold. This ended in 1914. From then until now, politicians have sought an arrangement in which politicians retain sovereignty and currency exchange rates retain stability. They have searched in vain. INTEREST RATES This new development means that nations must now finance their deficits without intervention of foreign central banks. International investors, domestic investors, and domestic central banks must supply a market for each nation's national debt. Inside the Western countries, we are seeing a lowering of interest rates. We are also seeing the decline in stock markets. These are part of the same phenomenon. Investors are selling stocks and buying bonds, especially government bonds. The perception is that bonds issued by sovereign nations are not subject to default. Their risk premium is low. Investors know that the central bank stands ready to purchase these bonds if taxes are insufficient to keep making payments to bond owners. Investors think they will be able to get out of long-term bonds before inflation hits. But an insurance company cannot easily do this. It wants predictable income to match its statistically predictable outflow. Fear of the stock market, fear of rising risk of default, and fear of the state of the economy combine to provide a subsidy for government debt. For as long as the economy remains precarious, the U.S. Treasury will be able to sell debt to investors at low rates. But every dollar that moves from the private capital markets to the U.S. Treasury erodes the ability of the free market to restore economic growth. This is a downward spiral. As more bankruptcies take place, as more corporate Rocks of Gibraltar sink into the sea of default, the investors will lose faith in the private capital markets. This re-directs wealth into the hands of government. The economy performs worse. This subsidizes the government debt market. What can reverse this? Two factors: (1) economic recovery; (2) price inflation. If the economy appears to be recovering, investors will sell short-term Treasury debt, which today pays less than the rate of price inflation. If price inflation reappears, due to Federal Reserve monetary policy, people will pull out of the government debt market to buy assets that may do well in an inflationary period. The commodities market will recover, not because of increased demand from industry, but as a bubble. At present, the FED is in panic mode. According to the Federal Reserve Bank of St. Louis, the FED has increased the monetary base by almost 800% from mid-September to early November. This was up from 341% between late August and late October. In other words, the rate of monetary inflation is accelerating rapidly. M1 is rising rapidly. What is not rising is the multiplier, which is falling rapidly. Banks are keeping funds as reserves at the FED. They are paid interest now, a new policy adopted on October 3. This retards the expansion of money. It is the equivalent of raising reserve requirements. For now, Treasury rates are lower across the board. Fear is doing its government-subsidizing work. But fear will move from recession avoidance to inflation avoidance. At that point, the Treasury bond market will begin its steady decline. The corporate bond market will begin even earlier. FROM MERCANTILISM TO KEYNESIANISM If only domestic purchasers and foreign private purchasers of debt are bidding for a government's debt, this means that the domestic central bank must pick up the slack. If the People's Bank of China refuses to increase its holdings of Western debt, then two things will happen: (1) it will see its currency rise in relation to foreign currencies; (2) it will export less to those countries. China has responded accordingly. It is now using government spending to shift the economy from exporting to domestic consumption. This is exactly what the West's central bankers have been telling China to do for years. China is not responding to these demands. It is responding to a fall in export demand. Politicians are inherently Keynesian. They do not want unemployment. They see government spending as a way to offset declining private consumption. The new policy will shift consumption from Americans and Europeans to Chinese citizens. This is not being done by the free market. It is being done by the government. It is pure Keynesianism. If this policy is accompanied by increased monetary inflation, the yuan will not rise. So far, it is not clear where the government will get the funds to spend: taxes, borrowing, central bank inflation, or the sale of currency reserves. It could get them by selling dollars and buying yuan. This would raise the value of the yuan and further decrease exports. My guess is that the central bank will inflate even faster. The government is now more worried about an economic slowdown than price inflation. Any recovery will bring price inflation with a vengeance. DECLINING TRADE If central banks are no longer intervening to subsidize their currencies, they will rise in value. But the dollar has risen most. Why? Because of the same reason Treasury rates have fallen: fear of default. The dollar is still seen as a safe haven. Private investors are still investing here even though central banks have ceased to add reserves. Trade is falling rapidly. The Baltic Dry Index has collapsed in recent months. This is the index of trade in coal, steel, and industrial commodities. The decline is nothing short of breathtaking: from 12,000 in June to a little over 800 today. This is a sign of the extent of the recession. It is international. It is killing demand for industrial commodities. This is because producers perceive that consumers are not going to buy their output. This is the way the free market ought to function. The free market lets consumers determine the value of goods. The profit and loss system rewards entrepreneurs who see what is coming and respond. The correct response is to stop buying production goods. It is to move to cash. Batten down the hatches. This is a good thing, if we believe in the legitimate authority of consumers. If they want to cut back on spending for consumer goods, the market should respond. Anything else is wasteful. But the central banks and the politicians want to substitute their judgment for consumers' judgments. They tax, spend, borrow, and inflate. This merely redistributes losses. The big losers will be taxpayers and holders of cash. But, in the meantime, it pays to hold cash. CONCLUSION China has pulled both triggers. Its central bank has ceased to buy Western government debt. Its politicians are moving to a domestic stimulus policy, which will move production toward large-scale public works projects and anything else the government wants to subsidize. Unless China soon resumes the purchase of Western government debt, the yuan will move up. This is bad news for Wal-Mart.


(GT sez: Unfortunately this blog [GOLDTRADERCOMMENTS] has several glitches in it and has for some time now. I haven't been able to find the time to fix it, as Blogger Help is a nightmare and very difficult to find answers. The problem is that the HTML on this blog is somehow broken and no longer displays links automatically when I insert a URL as it did when we started out. (Just look at some of the old posts and you will see that I had color too!) This is the only one of my blogs that does this for now. Blogger constantly comes up with error messages, and it's like falling into a black hole to find out how to fix them. So far, I have felt it was more important to get the info out, than to take the time to fix the problems. Hopefully, I will find the time soon to fix this blog's problems.) __________________________________________________ Use this URL to get the original article which will display the links more clearly. Learn to Link or Die by Jeffrey A. Tucker I've held my peace for as long as I can, but there will be no more silence on this critical issue of the day. Here is the bottom line: you need to learn to make a link or you should fall into the grave early. There is no getting by in life without this skill. It is a bloody outrage that people continue not to know how to do this. And yet it happens all the time. Very intelligent people who are not actually in fact dead get on blogs and forums and paste URLs hoping that they will send people to a particular website but they don't know how to make it active so that someone else can actually click it and go to that website. Then the administrator of the forum or blog has to go in and fix it, wasting his time. You have tried to help but in fact you are only leaving a path of annoyance everywhere you go. It's nothing short of incredible if you think about it. In 1995, you can sort of understand the ignorance. "Why should I learn to make a link. I'll leave that to the 'webmaster'. I'm a ________ (fill in the blank) not an internet geek. It's not my job." It's been 13 years – nearly a decade and a half – since linking has been part of the functioning of the world and part of daily life generally. There are no excuses left. Every person who lives and breathes and has use of his or her mental facilities should know how to create a web link. This is increasingly the bare minimum requirement of nearly every desk job on the planet. I was present at a job interview recently in which the interviewer asked the job candidate: "Can you explain to me how to create a web link." Answer: "Well, you look for the text in blue and you click on it." Interviewer: "What I mean is that you are called upon to make a link active on a blog or webpage, either to go to a webpage or send an email. Can you tell me the code that you need to write?" Answer: "To send an email, you type the address in the window in the area that says 'To:' You can put a link in the email." Okay, so it became rather clear that we have a problem here. And this is even true of some young people out of college, which is an astounding thing and doesn't speak very well of the person at all. It doesn't matter that the person is not being hired for a "tech job." All desk jobs are tech jobs now. In any case, look, learning to make a link takes you only a few seconds. Learn now! All links start with a "less than" caret: <. They end with a "greater than" caret: >. In between we have the link itself. So the syntax runs this way: a for anchor, href for the signal that a link is coming, with a quote mark to designate the actual thing. All open things must be closed, so close your quote mark and close your caret. Now you need to decide what text your want to display. Let's say you want the reader to see the words: great website. You next type those words, followed with a new open caret to close the anchor: Putting it all together, it should read great website That's the link. You do this enough and it becomes second nature. If you forget, you can go here. Now that link you didn't click was created using Word from the Microsoft Office suite. Working in Word, highlight the word or words you want to link, go to Insert, then Hyperlink. Then paste the link and hit enter. If you submit an article, you should just send in the article with these types of embedded links. Many blogging tools offer what is called a Rich Text Editor. Here you need to look for a button that has an image of a chain. What does this do? It writes the code for you. If you look at the raw code, it will end up looking exactly like what I typed above. The code above works for websites, images, sound files, or whatever. If you want to make a mail link, you follow the same format but instead of http:// you use mailto: So if you want to create a link so that people can email me, write That makes a link that displays my email address, which you can click on to bring up your mail-sending software or webmail page. If you are still reading, and you think, aw I don't need to know this stuff, you are just plain wrong. You have to know this stuff. If you don't in our age, it is really like not knowing your ABCs or not knowing how to use a knife and fork. Many people have hoped to wait for some conditions under which they won't have to learn these things. But it's been 13 years and that time has yet to arrive. Even if the rich text editor does it for you, you still might have to fix the code or make corrections or something. It is still essential for living a normal life in these times. I'm sorry to be the bearer of this news but, believe me, it is essential for your well-being. This is especially true for anyone with a desk job. Learn now. Don't put it off another day. Or you can always make the choice to check out of the stream of life altogether. November 11, 2008 Jeffrey Tucker [send him mail] is editorial vice president of Copyright © 2008 Ludwig von Mises Institute


The Real Story By: Theodore Butler -- Posted 10 November, 2008


Ted Butler: Silver was smashed to ease Morgan's takeover of Bear Submitted by cpowell on Mon, 2008-11-10 20:30. 3:22p ET Monday, November 10, 2008 Dear Friend of GATA and Gold: Silver market analyst Ted Butler has obtained a letter from the U.S. Commodity Futures Trading Commission to U.S. Rep. Gary G. Miller, Republican of California, that virtually confirms Butler's speculation in September that the smashing of the silver price this year involved JPMorganChase's takeover of Bear Stearns in March. Butler writes: "Bear Stearns held the largest concentrated short position in COMEX silver (and gold) futures at the time of its forced merger with JP Morgan in March. That position was not discovered until the publishing of the August Bank Participation Report followed by the October 8 letter from the CFTC to Congressman Miller. Furthermore, Bear Stearns had no legitimate backing to the short silver position, either in actual metal or cash. Otherwise it could have been delivered against or bought back, just as would have happened were it a long position. "The price of silver at the time of Bear Stearns implosion was $20 to $21 an ounce. A free-market covering of a concentrated short position of this size would have driven silver prices to the $50 or $100 level and would have exposed the long-term manipulation. Rather than let the free market deal with the required short covering of such an uneconomic and unbacked short position, government authorities arranged to have the short position transferred to JP Morgan. This was undertaken by the U.S. Treasury Department, along with taxpayer guarantees against loss to Morgan worth billions of dollars. This was done, no doubt, to save the financial system from imploding. This was also patently illegal, as it aided and abetted the silver manipulation." That is, it is now virtually certain that the big silver short (and the big gold short) is the U.S. government's New York bank, JPMorganChase. Butler's new commentary is headlined "The Real Story" and you can find it at GoldSeek's companion site, SilverSeek, here: CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc.

Monday, November 10, 2008


CREDIT TO CSPANJUNKIE FOR THIS LINK Warning of new bin Laden attack * Paola Totaro, London * November 10, 2008 OSAMA bin Laden is planning an attack against the United States that will "outdo by far" September 11, an Arab newspaper in London has reported. - bin Laden 'planning US attack' - Goal to 'outdo' September 11 - al-Qaeda reinforces training camps And according to a former senior Yemeni al-Qaeda operative, the terrorist organisation has entered a "positive phase", reinforcing specific training camps around the world that will lead the next "wave of action" against the West.


The Targeting Of Private Retirement Accounts Posted: Nov 10 2008 By: Jim Sinclair Post Edited: November 10, 2008 at 1:38 am Filed under: General Editorial Dear Friends, The following article is a Carolina Journal exclusive: Dems Target Private Retirement Accounts Democratic leaders in the U.S. House discuss confiscating 401(k)s, IRAs By Karen McMahan November 04, 2008 RALEIGH - Democrats in the U.S. House have been conducting hearings on proposals to confiscate workers’ personal retirement accounts - including 401(k)s and IRAs - and convert them to accounts managed by the Social Security Administration. Triggered by the financial crisis the past two months, the hearings reportedly were meant to stem losses incurred by many workers and retirees whose 401(k) and IRA balances have been shrinking rapidly. More… Let me first say this is improbable. However: 1. This would be Draconian. 2. What idiot feels that the Social Security Administration has any capacity to manage enormous investment funds other than through buying Treasury instruments? 3. This can only be an idea of how to refinance the pillaged social security funds. 4. This would not be any different than Chavez’s recent moves. 5. This would place the US alongside all Banana Republics. 6. This is not gold. 7. This is a liberal professor speaking to the left. 8. This is the most disturbing event to be suggested. 9. This is not good for the dollar. 10. This is good for gold. Now having said that, let’s address your major concerns based on today’s calls and faxes. 1. This is the most disturbing item I have experienced since OTC derivative dealings began in a serious way in 1991. 2. Discussions of the confiscation of citizen’s assets at this level, no matter how it is presented, has the potential for catastrophic consequences. 3. If Citizens can have their asset confiscated who in the world would consider the dollar, US Treasuries, or US depositories safe from confiscation without representation? 4. With the TIC reports already threatening the dollar, consider the flight of petro funds from the US. 5. Financially the back door was closed by the Patriot Act. On January 1st, 2009 expatriates will have practically all their assets taxed away. That is law and that is fact. The front door is closed because a nation of immigrants refuses to allow legal immigration. The country is locked down. 6. Never say never regarding confiscation of any asset if in the unlikely case the article above is true. 7. My solution is public. 8. Your solution is to do what I have done, not necessarily in the same way. 9. Incorporate in another country, operate in a third country, trade on multiple national exchanges. It is a form of Harry’s formula of having your money in one country, your citizenship in another country and your body in a third country. For me this is true corporately. 10. You do not need to do exactly what I have. If you look carefully there are other vehicles which you might already be in that contain the same characteristics. 11. Take physical delivery of your shares. 12. Do nothing illegal. 13. Do not deal with anyone that offers a service that is in the light of day illegal. If you do, they will own you. 14. If you select to expatriate your gold do it legally. 15. Gold ETFs will be treated exactly like gold. 16. Coin dealers will try to talk you into collector gold coins, declaring them free of confiscation risk. They may be but you are entering into an art, not gold market. You will be expertly screwed price wise. In conclusion, I strongly doubt retirement accounts will be confiscated this early in a new Administration. The USA is still a nation of NASCAR fans in the main. The public would simply go wild. You cannot try anything illegal as no transfer of funds goes unnoticed today. The front door is closed and the back door is closed for US citizens on 01/01/09. US citizens simply have to deal with it. I believe I have already. Take delivery of your shares in the form of paper certificates. As a second option become a direct registration book entry at the respective company’s transfer agent. Do it tomorrow because you already know that soon many gold and silver public companies will become fully computerized and cease the issue of paper certificates while dissuading direct registration if they even allow it. Every exit is shutting down. “This is it and it is now” takes on a new dimension. Even though I doubt that such Draconian means will be introduced, I believe in being prepared with all your funds that are now outside of retirement accounts. We can no longer say never on the possibility of gold confiscation talk at the same level. I still doubt both will ever happen, but be prepared. Do not act emotionally and pay confiscation tax levels. Cool down and think about things. Nothing so draconian will happen so early in a new Administration - believe me. What was reported is a liberal professor speaking to the left. Your watchman, Jim

Sunday, November 9, 2008


Obama vs. Medvedev Nuclear Smackdown in New Europe By Mike Whitney Most of what is written about Medvedev is nonsense. The same corporations that own the politicians own the media as well. Naturally, they want to demonize their rivals. In truth, most Americans would have a lot more in common with Medvedev than they would with Bush, Cheney or any of their "silver spoon" elitist cronies.


Conned Again By Paul Craig Roberts November 09, 2008 EXCERPT: " The change that is coming to America has nothing to do with Obama. Change is coming from the financial crisis brought on by Wall Street greed and irresponsibility, from the eroding role of the US dollar as reserve currency, from countless mortgage foreclosures, from the offshoring of millions of America’s best jobs, from a deepening recession, from pillars of American manufacturing--Ford and GM--begging the government for taxpayers’ money to stay alive, and from budget and trade deficits that are too large to be closed by normal means." "The world has tired of American hegemony and had its fill of American arrogance. America’s reputation is in tatters: the financial debacle, endless red ink, Abu Ghraib, Gitmo, rendition, torture, illegal wars based on lies and deception, disrespect for the sovereignty of other countries, war crimes, disregard for international law and the Geneva Conventions, the assault on habeas corpus and the separation of powers, a domestic police state, constant interference in the internal affairs of other countries, boundless hypocrisy. The change that is coming is the end of American empire. The hegemon has run out of money and influence. Obama as “America’s First Black President” will lift hopes and, thus, allow the act to be carried on a little longer. But the New American Century is already over."


Dollar Danger Ahead Posted: Nov 08 2008 By: Jim Sinclair Post Edited: November 8, 2008 at 11:19 pm Filed under: General Editorial Dear CIGAs, The Federal Reserve cannot be the lender of last resort to all nations near and dear and to all major US and international employers. President Obama’s 20 economic advisors will not accomplish anything real. The Federal Reserve under Bernanke has entered dangerous territory that up to now has been the bastion of academics. As the world turns to the Fed to be bailed out, the question will soon be who will bail out the Fed. The answer is clear - no one. The US dollar is in grave danger due to this shift to so far failed (Japan) academic solutions. In truth, all other solution are failing as well. This situation is bigger than the US Federal Reserve. The US Federal Reserve cannot accomplish what they have undertaken. If you don’t know that you simply lack a calculator with enough zeros. The US dollar as the common share of the USA cannot enjoy a bull market while their balance sheet is being torn to shreds. Gold is a currency, not a commodity. It has always been a currency. Industrial demand is a trivial constituent to the price of gold. There is no question about that. Gold as a currency moves inverse to the US dollar. It has always been so. It will always be so. Do not fail to protect yourself. You will need every avenue of protection that I have suggested to you. The US dollar is headed to .72, .62 and .52 on the USDX as a product of the move of the Fed into the “strategy of quantitative easing.” There is no doubt in the mind of those blessed by understanding that gold is headed to at least $1650. Order your shares as paper certificates while you still can. Potential confiscation of retirement plans now being discussed in legislative testimony is the most disturbing scenario I have ever heard. Consider gold confiscation now a potential whereas it was simply a bad dream before. Consider that Gold ETFs fit into the confiscation scenario assuming such a draconian act could actually be taken. Look for juniors that have strong characteristics of selection. These include juniors with strong management with proven track records that are willing to fight for their shareholders, ones with proven resources in the ground, ones that operate in politically sound countries, ones with no derivatives exposure and ones that have internal financing already in place. No we cannot provide you with a list - this is up to you to research on your own. If I were to construct such a vehicle it would be incorporated outside the USA, do business in a third country and trade outside the USA. Most importantly, the shares should be paper certificated with those certificates in my hands, not the hands of a US brokerage firm.


Expect The Recession To Increase In Severity Posted: November 8 2008 The dichotomy between paper and metals, US owes 3 trillion to foreigners, the wiemarization is coming, more banks go belly-up, gold manipulation poses problems for economic stability, consider the recent rallies to be as good as it will get EXCERPT: "We have reported extensively on the dichotomy between the physical and paper markets in precious metals. The pricing between these two types of markets is now completely out of sync, with the casinos, which some dare to call commodity markets, utilizing bogus manipulated prices based on paper sales of precious metals in volumes that do not physically exist, while the physical markets have become a de facto black market where the true value of gold and silver is recognized based on market fundamentals. This market split has resulted from an intentional bottleneck created by preventing wholesale gold and silver from being converted into retail gold and silver. This has been accomplished by withholding wholesale gold and silver in COMEX inventories under thinly veiled threats against anyone attempting to take physical delivery, while channeling existing wholesale supplies at the smelter and dealership levels to the large bullion banks that are using these wholesale supplies to suppress precious metal prices and to bolster their short positions."