7:10AM PDST GOOD MORNING GOLD BUGS!

Late in posting this as I slept in a bit for some much needed rest. I'm locked into a gold spread, so it didn't really matter if gold went up or down for my position. Besides, the swings in gold are too tight to allow me to trade the short leg of my spread as it is in Feb09 Comex gold, and that is still a very thin market and hard to get a fill. Gold is convulsing to the downside this morning because any buyers who jump in here are getting beat down by the big boys who are doing whatever it takes to keep the gold price down to allow the new PLAN OF THE DAY (we will soon have the PLAN OF THE HOUR!)by Paulson/Bernanke to have a chance to do whatever the hell it's supposed to do. I say, putting more water in the Kool-Aid weakens the Kool-Aid! None of today's markets are going in one direction long enough to be able to say a new long term trend has developed. Hence, this is just a wild ass trading market for those who need a fix of some adrenaline pumping action, especially if you get caught on the wrong side of things and overleveraged. Just continue to buy your CASH GOLD AND SILVER at whatever prices the markets allow and average all your prices later after the PMs go up so high you won't even bother to think about what you paid for them, as they will be the only tool you have that will allow you to survive in coming months and years.

GOOGLE LIBOR TO UNDERSTAND IT

LIBOR is an abbreviation for the "London Interbank Offered Rate," and is the interest rate offered by a specific group of London banks for U.S. dollar deposits of a stated maturity. LIBOR is used as a base index for setting rates of some adjustable rate financial instruments, including Adjustable Rate Mortgages (ARM's) Today's LIBOR Interest Rates are listed below and updated daily: LIBOR - 1 Yr 4.131% -0.038% LIBOR - 6 Mo 4.376% -0.018% LIBOR - 3 Mo 4.750% -0.002% LIBOR - 1 Mo 4.560% -0.027% Treasury - 30 Yr 4.14% 0.05% Treasury - 10 Yr 3.84% 0.12% Fed Prime Rate 4.50% 0.00% as of 14-Oct-08 09:32 ET sources: DTN, Federal Reserve © theFinancials.com

FROM NOURIEL ROUBINI'S WEBSITE...YOU NEED TO UNDERSTAND THESE DETAILS...AS THEY ARE ROBBING YOU BLIND

http://www.rgemonitor.com/ TARP Progress Report: U.S. Treasury Will Buy Ownership Stakes In Nine Major Banks for $250bn Oct 13: The Bush administration will announce a plan to rescue frozen credit markets that includes spending from $125 billion to entire $250bn tranche for stakes in nine major banks, according to people briefed on the matter. Recipients Include Citi, Bank of America, Goldman; Government Pressures All to Accept Money as Part of Broadened Rescue Effort * Problem: In order to meaningfully recapitalize the U.S. banking system a good part of the TARP budget should be used for this purpose. This leaves but little resources for addressing the root cause of the problem in the housing market. * Oct 13 Interim Assistant Secretary for Financial Stability Neel Kashkari progress report on the bipartisan Emergency Economic Stabilization Act of 2008 in implementing the Troubled Asset Relief Program (TARP). * TARP Goal and Scope: Treasury is implementing its new authorities with one simple goal - to restore capital flows to the consumers and businesses that form the core of our economy. The law gives the Treasury Secretary broad and flexible authority to purchase and insure mortgage assets, and to purchase any other financial instrument that the Secretary, in consultation with the Federal Reserve Chairman, deems necessary to stabilize our financial markets. Implementation: 7 policy teams are devising optimal strategies in the following areas: 1) Mortgage-backed securities purchase program: which troubled assets to purchase, from whom to buy them and which purchase mechanism (detailed auction protocols)--> under a separate program, Fannie&Freddie are ready to start purchasing $40 billion a month of underperforming mortgage bonds.(Bloomberg) 2) Whole loan purchase program: especially for regional banks; 3) Insurance program for troubled assets: on Friday we submitted to the Federal Register a public Request for Comment to solicit the best ideas on structuring options (14 day period); 4) Equity purchase program: standardized program to purchase equity in a broad array of financial institutions. As with the other programs, the equity purchase program will be voluntary and designed with attractive terms to encourage participation from healthy institutions. It will also encourage firms to raise new private capital to complement public capital.5) Homeownership preservation: When we purchase mortgages and mortgage-backed securities, we will look for every opportunity possible to help homeowners. This goal is consistent with other programs - such as HOPE NOW - aimed at working with borrowers, counselors and servicers to keep people in their homes. 6) Executive compensation: define the requirements for financial institutions to participate in three possible scenarios: One, an auction purchase of troubled assets; two, a broad equity or direct purchase program; and three, a case of an intervention to prevent the impending failure of a systemically significant institution. 7) Compliance: Oversight Board (members: Secretary of the Treasury, Fed Chairman, SEC Chairman, HUD Secretary, FHA Director), on-site participation of the General Accounting Office and the creation of a Special Inspector General, with thorough reporting requirements. Procurement: Taking aggressive steps to manage potential conflicts of interest is essential because firms with the relevant financial expertise may also hold assets that become eligible for sale into the TARP. * Luigi Zingales: Treasury's piecemeal equity injection plan a la AIG might be too little too late. Nothing short of a 5% increase in the equity capital of the banking system will do the trick - or $600bn. * cont.: But even if the entire TARP budget is used for capital injection, there is still no guarantee that the money will be used for new loans: First, to restore the necessary confidence, a capital infusion needs to reduce a financial institutions’ risk of default to trivial levels. This implies transforming the existing, outstanding debt (roughly two trillion if we just count the long-term bonds) into safe debt. A large fraction of the equity injected will not go to generate new loans, but to provide this insurance to the existing debtholders. How much? At recent CDS prices the cost of insuring the two trillion of outstanding long-term bonds outstanding would be more than $300 billion. * cont.: Second, a capital infusion does not address the root of the problem, which stems from the housing market. * Where do we stop? If we bail out Wall Street, why not bail out Detroit (probably another 150 billion) and Main Street? Even if we limit ourselves only to the subprime mortgages, we are talking about $1.3 trillion. * to do instead: For Main Street: Government should prevent costly foreclosures and instead provide standardized option to renegotiate underwater/unviable mortgages per zip code according to house value drops in exchange for paying a large fraction to the government when reselling the house at a gain. * cont: for Wall Street: follow the same renegotiation principle: facilitating an efficient renegotiation with a pre-packaged bankruptcy that would allow banks to restructure their debt and restart lending. Firms who enter into this special bankruptcy would have their old equity holders wiped out and their existing debt (commercial paper and bonds) transformed into equity.

FROM TOM DISPATCH.COM

Here's a rock-you-to-your-socks fact I happened to read in a news report the afternoon of the day that Barack Obama and John McCain had their town hall meeting with 80 uncommitted voters and moderator Tom Brokaw. In the last 15 months, according to the Associated Press, Americans lost $2 trillion from their retirement plans. Now, that's a world of hurt and you could feel it the moment Brokaw first called on an audience member. Allen Shaffer rose and asked: "With the economy on the downturn and retired and older citizens and workers losing their incomes, what's the fastest, most positive solution to bail these people out of the economic ruin?" I have no idea what Shaffer's situation is, but I'll tell you this, his didn't sound like a reporter's question. It sounded close to the bone. It sounded like a world of hurt. Not surprisingly, neither presidential candidate actually responded, in part, undoubtedly, because to be close to the truth either would have had to say something like: Hey, how the hell do I know?

DOG SHIT INTERPRETATION OF JIM'S REMARKS TONIGHT by GT

The Guv'mint is dumping unimaginable amounts of paper money into the system. This will cause the value of the dollar to plummet, and the prices of all goods and services to escalate to levels you are unable to conceive. In other words, paper money is becoming toilet paper or fire starter. This is all intentional if you understand the BIG PLAN of the Illuminati to eliminate more than TWO BILLION of us from the planet so they can have more of the abundance of the earth for themselves without having to share any of it with those whom they think are lesser beings.

ESOTERIC DEFINED

esoteric 7 dictionary results for: esoteric Dictionary.com Unabridged (v 1.1) - Cite This Source - Share This es·o·ter·ic /ˌɛsəˈtɛrɪk/ Pronunciation Key - Show Spelled Pronunciation[es-uh-ter-ik] Pronunciation Key - Show IPA Pronunciation –adjective 1. understood by or meant for only the select few who have special knowledge or interest; recondite: poetry full of esoteric allusions. 2. belonging to the select few. 3. private; secret; confidential. 4. (of a philosophical doctrine or the like) intended to be revealed only to the initiates of a group: the esoteric doctrines of Pythagoras.

TOO BAD JIM DOESN'T KNOW HOW TO SPEAK "DOG SHIT"

Sinclair is not only grammatically and puncutuationally challenged, but he insists upon using "high falootin'" language that even he doesn't know how to correctly use. If he truly wanted to COMMUNICATE TO THE MASSES... he would simply drop the attempt to be esoteric and just speak to us in PLAIN, EVERY DAY LANGUAGE... but alas, that is what happens to people who become elevated to positions of worship by those who consider themselves "lesser beings" WHICH YOU ARE CERTAINLY....NOT! Get what you can of what Jim is saying... and I will interpret it for you in "DOG SHIT" LANGUAGE that anybody can understand. GT Posted On: Monday, October 13, 2008, 7:44:00 PM EST Gold and Dollar Market Summary Author: Jim Sinclair Dear CIGAs, To sum up today: Once again the exact economic actions that caused former market bubbles, today's credit crisis (that is made up of massive legal financial fabrications) and enormous injections of US dollars into the world monetary system by the Fed (Helicopter Drop) were taken. The FASB has once again allowed egregious financial fabrication in the valuing of OTC derivatives outrageously far away from the reality of their true worthless value. The injection of dollars into the world monetary system, assuming you understand the mechanism of swaps, and the number that non US central banks said was going to be utilized ($2 trillion NOW) is monetary stimulation faster and larger by orders of magnitude than any monetary action in the history of economics, even when adjusted for inflation. If you do the same things but to a factor of ten you might get CONSEQUENCES times 100, but hey, it might fool the world for 22 more days.

MOGAMBO GURU MONDAY OCT 13, 2008

The Daily Reckoning PRESENTS: The only saving grace for the dollar recently has been that it’s performed relatively well against a few other currencies. But, as the Mighty Mogambo points out, that’s really just like being the nicest smelling cow pie in a field full of fertilizer. In the end, you’re sill just a piece of crap. Read on... CURRENCIES BATTLE FOR DIRTBAG SUPREMACY by The Mogambo Guru Bill Bonner notes that “Here at The Daily Reckoning ...we stand back...aghast...agog...paralyzed by the whole spectacle...from the lunatic assumptions of the credit bubble...to the solemn farce now taking place in the U.S. Congress.” I can’t actually verify this “aghast and agog” thing, although I could hear them in there, hiding in his office with the door closed and locked, and while I never heard anyone actually say the words “aghast” or “agog”, I did hear several people say, “Shhh! Don’t open the door! He’s still out there!” But I am pretty aghast and agog, too, now that the despicable Congress has passed a staggering $850 billion emergency spending bill, and so I felt a certain kinship with Mr. Bonner and The Daily Reckoning people who were, as he said, aghast and agog. As I stood there in the hallway listening to them furtively whispering, “Is he gone yet?” I felt alone, comforted only by the companionship of my imaginary friends, as we were drawn together by our shared abilities to mentally intercept coded messages from outer space directing us to eat char-broiled steaks, various entrees containing yummy pork products and to rail loudly against the whole stupid concept of letting the Federal Reserve expand a fiat currency by creating excess money and credit, unlimited fractional-reserve banking, unlimited debt, off-balance-sheet accounting, and the economic suicide of huge collectivist governments growing like a cancer, made possible only by the excessive creation of money, credit and credit, and only sustainable by the continued exponential creation of more excess money and credit, and we are tightly bonded together by our mortal dread of the terrifying inflation in consumer prices as all of this new money and credit diffuses through the economy. I could hear them whispering to each other behind that closed and locked door, and they were saying, in shocked tones, that “The Fed, on its own initiative, began passing out the cash. $49 billion last Wednesday alone went to the banks. That same day, the Fed lent $146 billion to investment firms. By the time people went home for the weekend, $410 billion had passed from the Fed to private firms. The money was lent, says the Bloomberg report, at about 2.25% interest.” As a point of reference, I got an email where Oliver Garret of Casey Research by way of The Daily Reckoning which said, “To put this amount into perspective: if you had spent one million dollars a day, from the birth of Christ until today, you would have only spent about 732 billion dollars.” This is, indeed, a lot of money, and I know two things about it: 1.) I will not get any of it, and 2.) All of this new monetary inflation will cause more inflation in prices, which will be felt as a loss of buying power of the dollar. And speaking of that, I have the uncanny ability to never be at a loss of words when I can cruelly mock people who are smarter than me, better looking than me, taller than me, richer than me and/or any other petty envy that strikes my childish fancy at the time. It’s a gift, I guess, which unfortunately does not make up for the woeful lack of gifts in all other areas, cruelly dashing any dreams of being a great ballerina (“You’re a man, for God’s sake!”), or an artist pouring out his pain on canvas (“That painting really sucks!”), or a great musician/composer (“Your music sucks worse than your painting!”), or being anything (“You suck at everything!”). So it is with great relish that this week, my Gratuitous Mogambo Attack (GMA) is the “Economic Focus” column in The Economist magazine, this one titled “The Resilient Dollar”, which I thought would be interesting, in that not only is the dollar strangely going up against other currencies, but still going down against inflation, as are all the other countries in the world that are showing positive rates of inflation, which is, oddly enough, ALL the other countries in the world! Hahaha! Equally weird is that gold is also paradoxically going down in price, even though the dollar is going down in buying power because inflation is higher than the yields the dollars can buy, and the only strength of the dirtbag dollar is that it is appreciating against other currencies, but it is only because those other currencies are a worse bunch of dirtbags! The article starts off with a question about what to use as “store of value” in these uncertain and unsettling times, and before I could jump into the conversation and say how everybody else in the whole history of the freaking world scrambled to get their wealth into gold and out of a depreciating currency, they cut me off by noting that “Gold is for the really scared”. What’s more, the evidence is that there are plenty of scared people, as the price of gold “has risen by about one-fifth in the space of three weeks”, and those who produce gold bars “are struggling to keep up with demand.” In the ultimate irony, they report, “Even central banks now seem less keen to swap gold for paper currencies”! Hmmm! Anyway, they note, “Gold tends to do well when the dollar struggles. And there are good reasons to be anxious about the dollar”, which is a pretty flimsy code, telling you to “go out and buy some gold, because it is going to go up in terms of how many dollars (which increasingly nobody wants) it takes to buy one ounce of gold, which every body wants.” Anyway, I loved the line, “Bailouts and state guarantees to shore up the system may help, but they also strain public finances and raise concerns that the government may be tempted to inflate away its debts by printing money.” Hahaha! Now we get to the part where I am rude and scornful. “Tempted?” Did they say that the government “may be tempted to inflate away its debt by printing money”, when at the beginning of the article they acknowledge the existence of a wildly expensive, historically unprecedented “rescue package”? Hahahaha! Let me get this straight; a sudden injection of (now) more than $850 billion into the economy to buy up bad debt and bail out the hapless owners of all that bad debt so that they can spend this new money on other things to drive their prices up, and they still think that the government is NOT trying to “inflate away its debts by printing money”? Hahaha! I have got to get a job as an editor of The Economist , hopefully with a huge salary, fabulous benefits package and a nervous, wimpy boss who can be intimidated by finding, for example, voodoo dolls on his desk, because they need my help to screen for the use of the word “may” in describing the motives of a corrupt, spendthrift, economically-ignorant, socialist government in trying to save itself by creating more money, which everybody agrees will gradually, faster and faster, destroy the currency until each dollar buys so little stuff that it takes heaps of dollars to buy anything at all! Like gold, silver and oil, all three of which will make a mockery of Ben Bernanke, Congress and the financial services hustlers and con men! Whee! Investing is easy! Until next time, The Mogambo Guru for The Daily Reckoning

CURRENCY SWAPS

FROM WIKIPEDIA: http://en.wikipedia.org/wiki/Currency_swap A currency swap (or cross currency swap) is a foreign exchange agreement between two parties to exchange a given amount of one currency for another and, after a specified period of time, to give back the original amounts swapped. Currency swaps can be negotiated for a variety of maturities of up to 30 years. Unlike a back-to-back loan, a currency swap is not considered to be a loan by United States accounting laws and thus it is not reflected on a company's balance sheet. A swap is considered to be a foreign exchange transaction (short leg) plus an obligation to close the swap (far leg) being a forward contract. Unlike interest rate swaps, currency swaps involve the exchange of the principal amount. Interest payments are not netted (as they are in interest rate swaps) because they are denominated in different currencies. Further, many currency swaps are traded on organized exchanges - lowering counter-party risk, as evidenced by the bid-ask spread on most listings. See also John Hull.

GREAT WESTERN SONG "PAY ME IN SILVER AND GOLD"

http://www.lemetropolecafe.com/img2008/Midas/pay_me.mp3 Burn it into a CD and play it on loudspeakers Credit to J.B. Slear at JSMINESET.COM

Infinite Money For Infinite Loans Creates Infinite Inflation

CULTUREOFLIFENEWS.COM http://elainemeinelsupkis.typepad.com/ezmoneymatters/2008/10/infinite-money.html "This is no helicopter drop. This is every bank bomber on earth is going to load up with paper money backed by vast government debts and then it will dump the entire mess right on top of the huge pile of worthless paper equities. This supposedly will restart lending in a world awash in red ink." IF YOU AREN'T READING THIS LADY EVERY DAY...YOU ARE MISSING OUT ON EVERYTHING. SHE IS PURE GENIUS! SHE DOESN'T MISS ANYTHING!

4:55AM PDST GOOD MORNING GOLD BUGS!

NO REPORTS TODAY Not much to do in the markets until some type of certainty is announced in regards to the "plan" the G7 meeting produced. So far, the U.S. CNBC talking boobs sound like a gossip session in high school. Gold sold off some just before 5:00am pdst, as usual, but this time I think it's more just some traders who are afraid of what will happen on the day session open, because gold didn't move up strongly over night. I put a spread on my long position in Dec Comex gold with a short Feb09 position locking me in where I am until this market decides what it wants to do. I got creamed holding on to my longs on Friday, but the loss is only on paper so far. Gold WILL be back up, and probably dramatically. Everything I read and share with you folks, says the gold shorts/manipulators HAVE to get destroyed eventually. But they are very smart and well practiced crooks and know how to make money in either direction, as they profit when they cover their shorts when they drive the market down and blow out all the weak longs, then they turn around and scoop up either futures long, or cash gold at the bottom and profit from that too. You just have to trade with them, or around them. Japan markets are closed today and some of our markets are too, so trading can be either slow and weak, or make large moves on light volume. Gold was moving in a large range over night on very light volume... Thirty dollars range from top to bottom isn't chicken feed. I may have to catch up on some sleep early today as I was watching the market every hour all last night and will probably start to get dingy in a few hours. It's a good day to not worry about too much as it's all going to do what it has to do anyway and will be getting much crazier for the rest of the week. Might be a good day to read the article posted below on the German Hyperinflation to get a feel of what we are going to go through, but with modern tools, like the internet, IF we can keep them running and don't go into a total fascist dictatorship, which is very likely.

Hyperinflation in Germany, 1914–1923 by Hans F. Sennholz

http://mises.org/story/2347 [This article is excerpted from the book The Age of Inflation.] The German inflation of 1914–1923 had an inconspicuous beginning, a creeping rate of one to two percent. On the first day of the war, the German Reichsbank, like the other central banks of the belligerent powers, suspended redeemability of its notes in order to prevent a run on its gold reserves.

FROM LEW ROCKWELL

Gold, the Dollar, and the Dollar Index by Michael S. Rozeff http://www.lewrockwell.com/rozeff/rozeff228.html This article responds to a request to explain the recent strength in the dollar, by which I think was meant the dollar index. The following discussion explains some of the longer term factors that I think are important. This provides perspective on the recent movement. After that, the discussion turns to the question of gold prices. A long-term view of the dollar index is here (SEE US DOLLAR LONG TERM CHART BELOW). The dollar index is not the dollar against gold. It is the dollar against other major currencies like the Euro, British pound, and yen. The current period of rally in the dollar (index) is from 74.82 to 82.46 today. The index had gone to a new long-term low and stabilized there for 5 months (March-July of 2008) before starting the current rally. The dollar was strong in the early 1980s, as U.S. growth improved. However, the national debt rose sharply (it doubled) from 1980 to 1985. The 1985 Plaza Accord made matters worse. Despite the debt rise, the U.S. agreed to a weaker dollar. It also agreed to cut its budget deficit, which it didn't. By 1991, the debt had again doubled! The dollar fell sharply, from 164.72 to the 80s area where it stabilized. This was a 50% devaluation in terms of other currencies. Increased U.S. debt is a factor that undermines the dollar. Better U.S. growth helps the dollar. The reason for this is that the dollar's value depends on its backing on the Federal Reserve's balance sheet. The backing consists of two main items: gold and U.S. Treasury debt securities. The backing of the U.S. bonds is the tax collections of the federal government. As the debt rises, all else equal, the greater debt must be serviced by the same amount of taxes. This reduces the debt's quality. The backing of the dollar worsens and it declines. The Fed could maintain the dollar's value by selling bonds, but it chooses not to do that because that tends to impact the economy negatively. As growth increases, all else equal, the dollar gains strength because the tax revenues improve and the dollar's bond backing improves in quality. The dollar index is also influenced by what the other countries are experiencing for their deficits and growth rates. The dollar index mounted a strong rally starting in 1995 and through mid-2001. The debt rise in those years was "only" from 5 trillion to 6 trillion, which was at a far lower rate than when it was doubling every 5 years. The U.S. government ran a surplus at times and was able to retire some debt. The dollar's backing thus improved and so did its value. Meanwhile, growth was robust and that helped too. The recession in 2001-2002 ended this rosy picture. Tax revenues fell as growth fell. Since government spending remained high, more bonds were issued. The growth of government debt accelerated sharply. The Bush administration added to this of its own accord by big rises in deficit spending. The dollar started falling in mid-2001 and really has not had a rally yet that clearly indicates a change in that trend. The latest little rally is against some other currencies in the index whose economies have taken an even greater turn for the worse (except the strong yen). That is probably why the dollar index has shown some strength. As the U.S. enters another recession, which looks to be deep and prolonged, deficits will mount even more as growth slows. This is bad news for the dollar. The news will be bad for some other countries too that are in the dollar index, and the index need not decline if those other countries face even greater difficulties than the U.S.. The dollar index will strengthen if the next administration raises taxes and holds spending in line, as the Clinton administration did. An end to the Iraq war spending would help the dollar. The dollar versus gold is another matter. They have to move inversely to one another. The course of gold prices tells that story. It is not all that easy to interpret the movements of gold. I analyzed gold versus money supplies in an article "$10,000 Gold" and an article "Gold at $635: Buy, Sell, or Hold?" The latter estimated a gold value of $656 to $1,099 based on M1 money supply and the monetary base. Using M2, the estimate was $3,100. The theory there, such as it was, was that gold more or less appreciated as the Fed increased the money supply per capita. But it is obvious that gold's appreciation has been anything but smooth or even! See here. Gold had a tremendous rise in 1980 and then languished with ups and downs until mid-2001. The price rise of gold in 1980 was too far too fast in terms of the currency depreciations at that time. That is one reason why it stood still for so many years thereafter, albeit with some large interim fluctuations. Since 2001, gold has risen as the dollar index has fallen, but it has risen more sharply because the other currencies have also fallen in terms of gold. This appreciation in gold coincides with a world-wide inflation of paper currencies. Gold caught up to the inflation, so to speak. As long as these central bank currencies continue to be manufactured without solid backing, either gold or tax revenues, gold will continue to have a long-term upward trend. The volatility in gold prices will, in all likelihood, also continue, and that makes it hard to forecast the shorter-term movements with a factor like money supply. Note that the big increases of recent days have not pushed gold to new highs. In the longer run, however, we can be quite sure that gold will move higher if nothing is done to improve the backing of the world’s central bank currencies.

US DOLLAR LONG TERM CHART

THE LATEST BOB CHAPMAN ARTICLE

The Quadrillion Dollar Powder Keg Waiting To Blow Derivatives at the heart of the crisis, catastrophic losses are inevitable, financial system headed for oblivion, the new world disorder, EU doomed, Credit Default Swaps at the heart of the problem, Plunge Protection Team history, coverups for globalization failures, Bloodbath for the Yen "All of Western Civilization is about to become a smoldering collection of fascist police states. The entire world financial system is headed for oblivion, and there is nothing on earth that can stop it. All they can do currently is try to delay and hide the destruction so that they can continue to milk their Ponzi system dry, ripping off the sheople in one final orgy of fraud and profligacy before the government and financial system are merged into an all-powerful super-entity that will rule all non-insider institutions with an iron fist." http://theinternationalforecaster.com/International_Forecaster_Weekly/The_Quadrillion_Dollar_Powder_Keg_Waiting_To_Blow

2:50 PM PDST SUNDAY AFTERNOON OCT 12, 2008 BEFORE THE GOLD MARKET OPENS

The Euro has gapped up from 1.3418 to 1.3625 on its opening today, but has fallen back to 1.3591 at present on my delayed charts. My real time prices don't open until 3pm or a bit after that time. Oil has fallen down to the 77 dollar range. Bonds were last in the 116s on Friday. It will be interesting to see whether they are bought or sold. They need to be sold to increase long term interest rates to attract investment into the dollar, but the dollar is so damaged now, I wonder if anyone even want to fool with it anymore. All this so-called "planning" by the G7 and other entities is all for naught. We are broke...the money is gone...and the economic system will collapse. Although the criminals who are still in power will have to have stakes driven through their corrupt hearts before they will ever stop destroying the system with their unlimited ability to drown the world in worthless paper money to attempt to avoid being executed for what they have done to the World's Economy and Peoples. May they receive their dues in a court as soon as possible.

European Leaders Agree to Inject Cash Into Banks

http://www.nytimes.com/2008/10/13/business/13europe.html?_r=1&hp&oref=slogin

COMMERCIAL PAPER

According to the Federal Reserve, commercial paper "consists of short-term, promissary notes issued primarily by corporations. Maturities range up to 270 days but average about 30 days. Many companies use commercial paper to raise cash needed for current transactions, and many find it to be a lower-cost alternative to bank loans." Because these companies (or banks and muncipalities, which also issue commercial paper) generally have excellent credit ratings, much of the paper is issued without collateral being pledged, and is regarded as being extremely safe, and therefore attractive to lenders. Commercial paper is sometimes described as the lubricant that keeps modern economies moving, and the amount of commercial paper issued has increased rapidly in recent years. But as the credit crisis took hold in 2007 and deepened in 2008, the commercial paper market began to dry up. In October 2008, the market for that kind of debt all but shut down, with many major corporations unable to borrow for longer than a day at a time, as banks become more fearful of giving out cash. The volume of such debt totaled about $1.6 trillion as of Oct. 1, down 11 percent from three weeks earlier. In response, the Federal Reserve on Oct. 7 announced a radical plan to buy large amounts of the notes directly in the hope of restoring liquidity to the commercial paper market and thereby to the credit markets at large. The purchases, to be conducted through a newly created Commercial Paper Funding Facility, would put large amounts of taxpayer money at risk, but reflect the Fed's dire assessment of the threat to the economy.

OUR BIGGEST PROBLEM MAY BE NUCLEAR WAR

Jim Sinclair's Commentary Please read the following article. Pakistan will turn out to be the most serious problem out there. It will be more disturbing and world changing than the present fact that there is no major money center bank, nor is there an international investment firm that is solvent. Dexter Filkins: Pakistan's long road to chaos 02:06 PM CDT on Friday, October 10, 2008 Hours after a truck bomber killed 53 people last month at the Marriott Hotel in Islamabad, Pakistan's interior minister laid responsibility for the attack on Taliban militants holed up in the Federally Administered Tribal Areas, or FATA – the remote, wild region that straddles the border with Afghanistan. "All roads lead to FATA," Rehman Malik said. If the past is any guide, Mr. Malik's statement is almost certainly correct. Also Online But what Mr. Malik did not say was that those same roads, if he chose to follow them, would very likely loop back to Islamabad itself. The chaos that is engulfing Pakistan appears to represent an especially frightening case of strategic blowback, one that has now begun to seriously undermine the American effort in Afghanistan. Tensions over Washington's demands that the militants be brought under control have been rising, and last month an exchange of fire erupted between U.S. and Pakistani troops along the Afghan border. So it seems a good moment to take a look back at how the chaos has developed. It was more than a decade ago that Pakistan's leaders began nurturing the Taliban and their brethren to help advance the country's regional interests. Now they are finding that their home-schooled militants have grown too strong to control. No longer content to just cross into Afghanistan to kill American soldiers, the militants have begun to challenge the government itself. "The Pakistanis are truly concerned about their whole country unraveling," said a Western military official, speaking on condition of anonymity because the matter is sensitive. That is a horrifying prospect, especially for Pakistan's fledgling civilian government, its first since 1999. The country has a substantial arsenal of nuclear weapons. The tribal areas, which harbor thousands of Taliban militants, are also believed to contain al-Qaeda's senior leaders, including Osama bin Laden and Ayman al-Zawahri. http://www.dallasnews.com/sharedcontent/dws/dn/opinion/points/stories/DN-filkins_12edi.State.Edition1.1e8fd60.html

JIM SINCLAIR COMMENTS THIS WEEKEND

Posted On: Sunday, October 12, 2008, 2:09:00 PM EST Jim Sinclair's Commentary Author: Jim Sinclair Dear Jim, You said that FASB, under significant pressure, would trade away years of their long and well earned reputation this weekend by more than likely supporting value to maturity - another title for accounting bullshit. Will this change everything? Your friend, The Green Hornet Mr Dear Old (me not you) Friend, The value of this garbage has already been set in cement. This is a professional, not yet public, panic based on the financial destruction between financial institutions. The FASB cannot cure bank (professional) trust of each other by instating a foundation of today's new fabrication, value top maturity. The reason for this is value has already been set to "Value to Maturity." Merrill got 20 cents on the dollar. Lehman got less than 10 cents. Only numb-nuts can fluff that off. What a shame to see the policemen of proper auditing of values bastardize all the good they have done in one cowardly act of submission Yours, Jim Posted On: Saturday, October 11, 2008, 7:54:00 PM EST The Almighty G7 Author: Jim Sinclair Dear Friends, According to news reports, the G7 on one weekend of mutual understanding will restructure the entire world monetary system and make the present consequences of more than one quadrillion one thousand one hundred forty-four trillion dollars of notional value rotten garbage go away. A few of the characteristics of the problem that will be solved in two days of deliberation of the G7, but they mistakenly think they are still the Sun of the World around which all other countries orbit quietly and obediently. That alone has to give you some insight into the problem. Behind the curtain of silence the subprime loan problem, better described as a global meltdown of credit and default derivatives, continues. The reason for this condition is an attempt to value that for which there is no value. It is spreading globally as a product of the limitless manufacturing PRIMARILY (above 75%) by USA financial entities. Keep in mind that over the counter derivatives created between 1999 and 2007 generally have the following characteristics: 1. Without regulation. 2. Without listing on public exchanges. 3. Without standards. 4. Therefore not in the least bit transparent. 5. Therefore without an open market of the bid/ask type. 6. Dealt in by private treaty negotiations. 7. Without a clearinghouse 8. Unfunded without financial guarantee of any kind. 9. Functioning as contracts of specific performance. 10. Financial character or ability to perform is totally dependent on the balance sheet of the loser in the arrangement. 11. Evaluated by computer assumptions made by geek, non market experienced mathematicians who assume religiously that all markets return to their normal relationships regardless of disruptions. 12. Now in the credit and default category alone considered by accepted authorities as totaling more than USD$20 trillion in notional value. 13. Notional value becomes real value when the agreement is forced to find a real market for ending the obligation which is how one says sell it. The US dollar has improved based on the well crafted Urban Myth that Euroland has more problems than the USA. That like all great lies of history becomes true by experts, saying it loud and often. This method of the transition of nonsense into manufacturer truth is known as Spin. It was one of the most important imports from Germany in 1945. Some think this method of spin exceeded the imports of Dr. Von Braun. The first plan crafted for the dollar recovery was experts assuring everyone that Euroland, as the source of this problem, clearly would have to have more problems than the USA, with a finger clearly pointing at UBS. Next many interventions took place with fanfare galore. I love the picture of the Congressional personality high fiving on the passage of the bailout bill. Since then the Secretary of the US treasury has announced investments in bankrupt banks four times, each time as a new intervention cure of problem. The best of all might be the collapse of FASB this weekend as the overseers of fair accounting making values where there is none. FASB to release fair value guidance this weekend Friday October 10 2008 NEW YORK, Oct 10 (Reuters) - The Financial Accounting Standards Board, which sets U.S. accounting rules, is likely to release formal guidance on mark-to-market accounting this weekend, it said at a meeting on Friday. The board's guidance is intended to formalize clarifications issued by FASB and the U.S. Securities and Exchange Commission last month, which told companies they could rely on internal estimates, rather than fire-sale prices, to value assets trading in illiquid markets. At a special meeting on Friday to consider the reforms, the FASB directed its staff to rework and clarify certain parts of its proposal, but stuck to the general concepts issued earlier. FASB members said at the meeting they wanted to make sure companies were not completely disregarding market transactions in illiquid markets, but rather using them as one of many inputs. http://www.forbes.com/reuters/feeds/reuters/2008/10/10/2008-10-10T222949Z_01_N10520600_RTRIDST_0_FINANCIAL-FASB-FAIRVALUE.html THE ABILITY TO GIVE VALUES TO VALUELESS INSTRUMENTS, CLEARLY KNOWN TO THE BANKS TO BE WORTHLESS IS NOT GOING TO MAKE INTER-BANK LENDING RECOVER.

VOTER BOMB GRAPHICS...

PRINT THESE OUT AND MAKE T SHIRTS, ETC, OR ENLARGE AND PUT ON YOUR CAR OR WHERE EVER THEY WILL BE HIGHLY VISIBLE. YOU CAN TAKE THESE GRAPHICS TO A LOCAL SILK SCREENER OR T SHIRT SHOP AND THEY CAN TRANSFER THEM TO A PLAIN WHITE T SHIRT, OR SWEAT SHIRT (it's getting cold now!) URL: http://www.voterbomb.com/graphics-1/

HELP WITH THE VOTER BOMB...SEE DETAILS

http://www.dailypaul.com/node/68252 Help me build the Voter Bomb Blog Roll Posted October 10th, 2008 by Michael Nystrom Cross posted at the Voter Bomb! As some of you know, I'm trying to build another site called the Voter Bomb. The mission of the Voterbomb is to re-empower Voters, not money in the electoral process. We have 24 days before the general election. I'd like to see every incumbent Congressman (with a couple notable exceptions - Dr. Paul and D. Kucinich) held responsible for the mess they've created and voted out of office on November 4th. It may be ambitious, but it is a worthy goal to let our representatives know that we're no longer asleep, and it is we the people who hold the real power. I am attempting to model the project on what we achieved during the r3VOLution. The project is meant to be peaceful, patriotic, educational, revolutionary, free, fun, non-partisan and completely open source. I'm not doing this to make a buck, and in fact, I'd just as soon go back to my normal life. There is just one problem. Like many of you, I took the red pill. And as Dr. Paul has informed us, those of us who are awake have a greater responsibility. There is no going back to sleep. USE URL LINK ABOVE for entire article

APMEX NEWS BLOG ON MINT SUSPENSION OF GOLD EAGLES

http://apmexdealer.blogspot.com/2008/10/us-mint-halts-gold-and-platinum.html The US Mint memo reads: October 6, 2008 MEMORANDUM TO ALL AMERICAN EAGLE AND AMERICAN BUFFALO AUTHORIZED PURCHASERS SUBJECT: 2008-Dated Bullion Products Due to the extreme fluctuating market conditions for 2008, as well as current market conditions, gold and silver demand is unprecedented and the demand for platinum is unusually high. The United States Mint has worked diligently to attempt to meet demand, however, blank supplies are very limited and it is necessary for the United States Mint to focus remaining bullion production primarily on American Eagle Gold One Ounce and Silver One Ounce Coins.For the remainder of 2008 bullion inventory, the following will apply: American Eagle Gold Bullion Coins One Ounce Coins will remain on allocation each week. Allocation amounts are based on available quality blanks each week.One Half Ounce Coins: Inventory was depleted last week. No more coins will be produced for 2008. One Quarter Ounce Coins: Inventory was depleted last week. No more coins will be produced for 2008. One Tenth Ounce Coins: Inventory was depleted last week. More coins will be produced based on current blank supplies, however, once that remaining inventory is depleted, no more coins will be produced for 2008. You will be notified when these are available for sale. American Buffalo One Ounce Bullion Coins Inventory was depleted and sales were suspended in late September. More coins will be produced based on current blank supplies, however, once that remaining inventory is depleted, no more coins will be produced for 2008. You will be notified when these are available for sale. American Eagle Silver One Ounce Bullion Coins American Eagle Silver One Ounce Coins will remain on allocation each week. Allocation amounts are based on available quality blanks each week. American Eagle Platinum Bullion Coins All denominations were depleted last week. More coins will be produced based on current blank supplies, however, once that remaining inventory is depleted, no more coins will be produced for 2008. You will be notified when these are available for sale.We will keep you updated as more information becomes available. SEE URL LINK for entire article

JIM SINCLAIR COMMENTS AND A WARNING

Posted On: Friday, October 10, 2008, 7:06:00 PM EST The Frying Pan or the Fire? Author: Jim Sinclair Dear Friends, Stay the course or jump directly into the fire! That's the soundest advice I can give you in this highly volatile market period. I told you that you would see volatility in gold beyond your wildest imagination. That statement usually went along with my warning that by margining anything gold you were putting yourself in great financial risk. Today has to seal the veracity of that advice. Now get a hold of yourself. There is absolutely no way governments can make a problem of this size go away over a weekend. Those that question me on this issue are the same ones that laughed in 2000 when I said the growth of OTC derivatives was going to break the world. I told the lead director of Bear Stearns at the time that OTC derivatives were going to break his firm but the profits from them was simply too intoxicating for anyone to listen. Now I am asking you to listen. Whatever is done to resolve this global financial crisis is going to inject incomprehensible amounts of new money into the global financial system. Academics see the world as a 'Picture In Time." That means they are static thinkers who can't perceive motion. Visionaries like Harry, Monty, Trader Dan & Tony are "Dynamic Thinkers." At present, some academics are promoting the dumbest line I have ever heard. They say that all this new money going into the system is not monetary inflation because it is simply replacing all the money lost and therefore is a wash. That is part of the thinking pattern I am talking about and it's dead wrong. Dynamic thinkers know that the outflow of these losses has existed from the time of transaction and therefore prior to truer valuation as mandated by Financial Accounting Standards Board (FASB). The day the FASB mandated truer value had existed for years but was not recognized as such because it was generally accounted for off balance sheet. Just because financial institutions tried to hide their losses, those capital depletions were already a growing cancer inside their organizations. You can be certain that a repetition of Germany's Weimar crisis is coming soon. There is nothing that can be done to make matters better - even if done by governments unilaterally in a unified action. In fact, such action will only serve to make matters worse. The larger the financial action, the deeper the financial fall. The G7 still thinks they run the world. That should tell you something about the degree of what they can do. Gold is honest money that will push all crappy paper out of its way. Why do you think so much intervention took place in gold in US market hours today? All I can tell you is to stay the course or jump directly into the fire! If the heat in the kitchen is too hot for you, there is nothing I can do for you. Regards, Jim Sinclair

JIM RODGERS ON CNBC FRIDAY MORNING

http://www.freedomsphoenix.com/Find-Freedom.htm?At=039506 Notice how the British interviewer completely misses the point of what Rodgers has just told him and persists in asking if there is some way to get out of this mess easily. Nobody in the media, or in Guv'mint seems to get THE POINT... THEY COMPLETELY FUCKED UP THE SYSTEM AND IT'S BANKRUPT! This means that THE MONEY IS GONE! The ONLY way to move beyond this mess is to ACCEPT THE LOSS, PICK UP THE PIECES, and create an HONEST, WORKABLE SYSTEM. This means that THERE ARE LOSERS, AND THERE ARE WINNERS, depending on what each did with their assets BEFORE the collapse finally took place. THERE IS NO GOING BACK TO BEFORE THE PHONEY PAPER WAS CREATED... Just like there is no taking poison out of the water after you drink it.

TODAY WAS A COMPLETE DISASTER

I feel like I just ran a Triathalon backwards. Just an unbelievably dishonest, manipulated catastrophe for all the people who moved into gold to survive and preserve what little they have. One point made today by one speaker on CNBC was that the participants of the G7 are the biggest gold holders in the World and would have sold their gold today before the meeting if they knew in advance what they would do to prop up this crippled, on life support World Economy. Thus the harsh sell off with no respite of over $100 down without any upticks of significance. Talk about Insider Trading. Read Dan Norcini's comments...he's furious about what is going on at the Comex. More later as I have to have a drink and go tightrope walking over a deep canyon.

READ DAN NORCINI'S REMARKS TODAY AT JSMINESET

Dan's remarks on his afternoon chart explain much about today's actions.

FROM CASEY RESEARCH ON YESTERDAY'S PM MARKETS

From Ed Steer: There was so little volume in Far East precious metals trading yesterday morning, that the prices could have moved significantly in either direction if there had been some serious buyers or sellers around. Ted Butler said it was the lowest volume day he can remember...certainly the lowest this year. Gold drifted from a high of about $909 in early Thursday morning trading in Sydney...down to its low of around $883 just after the Comex close in New York yesterday afternoon. Then, out of the blue, came a $38 dollar rally over a two hour period. My guess would be that this was a short covering rally by the boyz. I doubt this data will be in Thursday's o.i. numbers that will be reported later this morning. We'll probably have to wait until after the long weekend. Silver had a nice rise during yesterday's trading, but the volume was virtually non-existent...as only 12,500 contracts in silver were traded...and only 85,000 in gold. The Comex precious metals were trading on fumes yesterday. Gold open interest on Wednesday fell a whopping 8,459 contracts...and silver o.i. dropped a minuscule 23 contracts. The new COT will be out at 3:30 Eastern time today. As I said earlier this week..."it should be a sight to behold!" I'll be talking about it tomorrow. Some tidbits from the gold world on Thursday. The first item of note was taken from Bill Murphy's commentary over at lemetropolecafe.com...German gold dealers have stopped taking new orders for the precious metal as demand has skyrocketed. This is one sentence from a news story on the web site of Deutsche Welle...a German TV station. And according to the usual NY gold commentator..."The ECB (European Central Bank) reported that they had sold 7.79 tonnes" under the new year of the Central Bank Agreement on Gold. GLD was up about 60,000 ounces and there was no change in the SLV ETF. But the real gold news yesterday came from UBS gold analyst, John Reade...another story that I picked up at lemetropolecafe.com....and it's a dandy. First, the story that triggered Reade's comments... Record Dubai Commodity Exchange physical gold settlement (Reuters) "Dubai Gold and Commodities Exchange (DGCX) completed its largest-ever physical settlement of gold and steel reinforcing bar futures contracts with a total value of $25.2 million, it said on Wednesday. The settlement involved the delivery of 908 kg of gold and 40 tonnes of steel rebar for Oct 2008. No further details were available. Gold prices rallied more than 3 percent on Wednesday as investors rushed to purchase safer assets, while the worst financial crisis in nearly 80 years battered global stock markets. DGCX, which offers futures contracts in gold, silver, steel, fuel and crude oil and currencies, aims to become a major commodities centre in the region. Its activities almost doubled in 2007." Then Reade's comments: "This is a very interesting story that merits further investigation. We have heard investors, unable to get physical investment bars due to the safe-haven induced credit crunch, have bought Dec Comex futures with an intention of holding them to expiry. It seems that a similar trade took place on the DGCX. Historically we have discounted the chances of a physical squeeze of Comex gold because so few futures investors take physical delivery and, if they did, metal would be shipped in from London and Zurich. But the shortage of Comex-eligible bars may make the physical settlement of large deliveries ‘complicated’ to say the least. We will be closely monitoring this situation: if the market remains tight for kilobars over the next month or two then a squeeze in Comex gold could materialise. And if gold lease rates keep heading higher due to a supply/demand mismatch in the loco London market, the gold market could get very interesting into the end of the year." Yes it could...and probably will...if the gold and silver prices haven't already blown sky high before then.

TRADE BALANCE REPORT

U.S. trade gap narrows in August By Greg Robb Last update: 8:32 a.m. EDT Oct. 10, 2008 Comments: 2 WASHINGTON (MarketWatch) -- The U.S. trade deficit narrowed by 3.5% in August to $59.1 billion, the Commerce Department said Friday. The trade deficit was above the consensus forecast of Wall Street economists of a deficit of $58.5 billion. Both imports and exports declined in August, but imports fell faster than exports in August. However, the 2.0% drop in exports was the biggest since June 2004. Auto imports were the lowest since March 2005. Imports of crude oil dropped for the first time in six months. The U.S. trade deficit with China widened to $25.3 billion in compared with $22.5 billion in the same month last year. This is the highest deficit since last October. Imports from China hit a new record of $31.8 billion.

JIM SINCLAIR COMMENTS AND A WARNING

Posted On: Thursday, October 09, 2008, 10:17:00 PM EST Gold and Dollar Market Summary Author: Jim Sinclair Dear Friends, Gold is about to VAULT UP. I am reliably informed that the paper versus bullion gold war is lost by paper gold at a $930 close. Gold will vault to slightly under $900 then get pushed back, but not much at all. Directly after that we are off to $1200. A Bank Holiday is moving from possible to PROBABLE. * Have you fully protected yourself? * Have you distanced yourself as much as possible away from financial agents holding your assets? * Have you gotten paper certificates for your shares or became a direct registration book entry at the transfer agent? * Have you protected your retirement accounts the same way as your shares above but in the name of the retirement account and the trust holding them? * Have you closed your Money Market fund accounts regardless of what assurances your bankers offer? * Have you withdrawn from your Credit Union? * Have you exited your corporate retirement fund? * Do you have significant gold and related shares investments? It is getting UGLY out there as each day an attempt to postpone a bank holiday fails. Almost every other day lately financial leaders of the world have announced new plans that were "the final answer" to the super-glued credit market. All these plans have had no effect. The Dow fell like a rock off a cliff. This says all efforts have failed. Libor Holds Central Banks Hostage as Credit Freezes (Update2) By Gavin Finch and Ben Sills Oct. 9 (Bloomberg) -- Danilo Coronacion oversees 15 percent of global coconut oil production at CIIF Oil Mills Group in the Philippines. These days, he spends a lot of time worrying about events half a world away in London. The name of his pain? Libor. CIIF has more than $60 million of debt, or 70 percent of its working capital, linked to London interbank offered rates that have soared since Lehman Brothers Holdings Inc. collapsed on Sept. 15. The cost of borrowing in dollars for three-months in London jumped 23 basis points today to 4.75 percent, the highest level since December.

4:13AM PDST A REAL GOOD MORNING GOLD BUGS!

TODAY'S REPORTS: Trade balance Import price index (LIKE THEY MATTER ANYMORE!) Quite an end of market stock close yesterday and overnight! Nothing like watching the World collapse in real time on TV while watching all the lying spinmeisters keep blathering their bullshit non-stop. MW comments are back up, to give "the masses" a pressure relief value to express their outrage at what their pathetic, criminal leaders have done to the World's Economic System. These people should all be hunted down and turned into field slaves for eternity. Jim Rodgers was on CNBC Europe last night. It was pure joy to hear him answer the British doofus who only wanted to know how a smooth transition could be made back to some semblance of normalcy. Rodgers flat out told everyone..."You let the failures go BANKRUPT, and those who know what they are doing to pick up the remains". He said the G7 members should just go to the bar and stay out of the way. PURE GENIUS... There is no answer to this mess except to let the chips fall where they SHOULD (not may...like on the common man!)and just let the system collapse quickly and then restructure...of course with some type of humanitarian attempts to alleviate the suffering of the masses who will be starving and thus becoming violent in their search for food and shelter. I sure hate to see that everything I've been telling everyone for over 35 years is EXACTLY CORRECT.... BUT.... I TOLD YOU SO! Be sure to grab your survival supplies before they all run out!

READ CULTUREOFLIFENEWS.COM EVERY DAY

http://elainemeinelsupkis.typepad.com/ READ AND LEARN EVERY DAY.

THE LATEST BOB CHAPMAN ARTICLE

Massive Gains Wiped Out in Markets Despite Everyone Being Warned Subscribers to the IF were warned for serveral years about the financial crisis that is now upon us,five years of gains wiped out, Congress approves the Paulson Ponzi Plunder Plan, there is no intention of supporting the stock markets, credit default swaps are at the root of the big losses, Plan was approved only by adding 150 billion in pork to thelegislation http://theinternationalforecaster.com/ AND READ THIS ONE TOO! I just didn't have time to post it during my physical problems. Bailout Creating a Financial Black Hole to Suck Us All In October 4th, 2008 - A dish of Bailout with a side of pork, shareholders vaporized by Derivatives Death-Star, We all await the financial markets implosion, No problems solved by the bailout, Stay prepared for a full shutdown of the financial system with some cash on hand, Credit default swaps unregulated point in the chain http://theinternationalforecaster.com/International_Forecaster_Weekly/Bailout_Creating_a_Financial_Black_Hole_to_Suck_Us_All_In

JIM SINCLAIR COMMENTS AND A WARNING

Posted On: Wednesday, October 08, 2008, 8:56:00 PM EST Gold and Dollar Market Summary Author: Jim Sinclair and Dan Norcini Dear Friends, The Big Gun was rolled out today. The equity market had steadied from its recent drastic action and Paulson picked up the baton and ran with it. He is considered to be the best public speaker of the Money Men. The Bloomberg ladies were in total glee as the market was up about 125 points. As Paulson said that not all financial failures would be bailed out (now a major fib) the equity gang lost their instructions. In the blink of an eye what was up 125 points was then down almost 200. I imagine being a good public speaker does not carry much weight in a situation that can be described as "OUT OF CONTROL." If the Washington gang really does not want the financial calamity now in progress, statements that suggest another major financial entity could go bankrupt without a bailout should be avoided. If all powerful Money Man persists in bringing up thoughts of Lehman's Chapter 11, the equity market will have no bottom. Letting Lehman go after instituting bailouts of others is the event that has given way to this "Out of Control" condition. Out of Control means just what it says. If things were under control the equity market would not have given a Brooklyn Cheer to the President of the USA and the Chairman of the Federal Reserve and there would not have been an unprecedented drop of interest rates today. Bank holidays are on the way. Every major retirement fund is stone broke. Most money management entities are full of treasury OTC derivatives, not treasury instruments, and are therefore also broke. The local banks are in the web of the Money Center banks and are therefore in trouble they do not even know about yet. The paperwork behind OTC mortgages is a total disaster, adding more mess to an already major financial planetary killer. I am sorry to say that there is no way to make this process go away. The downward spiral will make its way to the bottom. Gold will be the tool that finally stops the plague in the form of the Federal Reserve Gold Certificate Ratio, revitalized and modernized, but not until the public is in such a condition that it cries out to God to stop the carnage. That will happen sometime before January 14th 2011. Protect yourself, this is out of control! Respectfully yours, Jim

4:40AM PDST GOOD MORNING GOLD BUGS!

TODAY'S REPORTS: Jobless claims Wholesale inventories Well, gold got pushed down overnight against all possible logic, as the Euro was rising the whole time. All those idiots on the public comments at MarketWatch, especially "mos" who derided me and others who claimed our cries of MANIPULATION were part of our mental problem, should be thoroughly ashamed and beg for our forgiveness. Many who pummeled us with insults day after day are now losing their ASSets by the minute. I know of one particularly vocal poster who says he is "hanging on" to his stock positions, and has a "secure job". We shall see just how secure anything is pretty soon. This economic crisis has the ability and potential to take the ENTIRE WORLD down to step one and turning us into cave dwellers. It is even going to test the rich, who don't seem to be able to live except upon the backs of others. So when those "others" simply say "fuck you" to them, it will be interesting to see the rich foraging for food by the side of the highway. I am not in a good mood today, am in pain again from this abdominal problem which the medical community seems to think can be handled any old time at their leisure. I have an appointment this morning at 7:30am pdst for an UltraSound which means I will leave no later than 6:15am pdst and not be able to comment or post charts until I get back... unless they find they have to operate, in which case it should be a day or more before I can follow the market and post from my lap top while in recovery. Gold should not be able to drop much lower... But I'm simply amazed that they have been able to push it lower on such low volume overnight... It's been like water torture (drip, drip, drip) watching it slip all night long. I also have to stop and get my truck lights fixed after my doctor appointment, so that will take some time too. It should be fun trying to get to my appointment with only my high beams and flasher as the sun is rising here at 7:00am pdst now. Everything always happens at once, doesn't it? Oh, has anyone else noticed that the MARKETWATCH comments are no longer, at least out on the public articles? I see that MattDragonSilver still has some of our members posting now and then and that his group has grown a bit. I would be nice to hear from any of the old GROUP members to see how they are fairing as this crisis comes to a head. Is anyone complaining now about all the effort I went through to get you folks into PHYSICAL CASH GOLD now? Especially as we are now finding it harder to acquire?

MOGAMBO GURU MONDAY OCT 6, 2008

The Daily Reckoning PRESENTS: As Wall Street gets smaller, the government gets bigger. This week, the Mogambo Guru explores the greedy underbelly of government spending...and what you should do about it. Read on... GOVERNMENT SPENDING SPREE by The Mogambo Guru If you want to know the Real, Real Reason (RRR) why we are being subjected to a $700 billion bailout of the economy, which is just the beginning, it is because the despicable Alan Greenspan, during his foul 18-years as chairman of the loathsome Federal Reserve, created all the money and credit that financed the stock market boom, the bond market boom, the housing boom and (worst of all) the growth-in-government boom. And now, all those things are bid up waaaAAAaaaayyyyy past their real values, and buyers are scarce while sellers are many. So the owners of those depreciating assets suddenly realize that they either have to hold onto them and go bust, or find some moron with a lot of money to buy them. Oops! Tragically, while stocks can go bust, and bonds can go bust, and houses can go bust (and they are), the growth-in-government boom cannot be allowed to go bankrupt, because half of the people in the country now receive a government check of some kind as their income every month (Social Security, welfare, etc.), AND the governments collectively “employ” half the workers in the country because half the nation’s workers have incomes that derive from government spending either directly or indirectly! So, the real reason is: Governments need the money! It’s as simple as that! I know you find it hard to believe me, since Total Payrolls is officially listed as $145.5 million, while government payrolls is shown as $22.5 million - but it’s true, nonetheless. Firstly, these “government payrolls” do not variously count such things as firemen, policemen, teachers or any of myriad “contracted out” services, which means that the contracting private-sector provider is a private company that gets all of its income from government, thus they are indirectly, but totally, employed by government. Now, add in ALL of those “contracted” services that government buys, such as building maintenance, lawn services, office supplies, equipment providers, equipment servicing contractors, rented office space, security services, pornography downloads, storage space, and parking areas, all of which is counted as being “private employment”, when in fact it is Pure Public Payroll (PPP). Now, we apply the multiplier as these incomes provided by the government are received and then spent, providing another income to someone else, which is also spent, providing another income to someone else, which is also spent, providing another income to someone else, over and over, all the while being whittled down by taxes. Since all multipliers range between 3 and 7, even a multiplier of 3 will be enough to enlarge the official 22.5 million government employees to 67.5 million, which is almost half of the total 145.5 million employed in the whole freaking country! As proof, I offer the Energy & Scarcity Investor newsletter, where we get the report that “Last year, the Pentagon spent $316 billion on contracts with private firms”, which is “more than it spends on actual weapons to fight wars.” So, not only do “military contractors account for more than half of all Defense Department spending – 57.6%”, but there are a lot of these “private employees” in the “47,000 companies to choose from – running the gamut from blue chips to start-ups” that are getting, and living on, government money. Ergo, the government desperately needs money, the Federal Reserve will create the money the government wants, the fresh government debt will be bought up, the money supply will increase, the value of the dollar will continue to fall, and gold will rise along with, and almost certainly more than, the rise in all other prices! Whee! This investing stuff is easy! Until next time, The Mogambo Guru for The Daily Reckoning

FROM THE DAILY RECKONING TUESDAY OCT 6, 2008

The Daily Reckoning PRESENTS: A cascading collapse of international finance is underway. While many fixers may jump heroically into the tumbling wreckage hoping to rescue this-and-that, James Kunstler believes that the outcome by Friday is liable to be an unrecognizable smoldering landscape of the G-7’s hopes and dreams. Read on… ALL FALL DOWN by James Howard Kunstler God knows what manner of deals went down this past weekend in the Hamptons’ wine cellars and below-decks among the Chesapeake Bay sailboat fleet. All these hidey-holes must have been dank and fetid with the sweat of mortal fear. Will the U.S. government declare itself a subsidiary of General Electric? Will Vlad Putin be roped in to save Goldman Sachs? Meanwhile, the whole noisome rat maze of international counter-party deals was taking on sewer water and rodents of every nationality were seen leaping for daylight all over the fusty old motherlands of Europe. A cascading collapse of international finance is underway. While many fixers may jump heroically into the tumbling wreckage hoping to rescue this-and-that, the outcome by Friday is liable to be an unrecognizable smoldering landscape of the G-7’s hopes and dreams. Some big questions for the week: will the Euro survive as a currency? Will the rush into the U.S. dollar continue even as the U.S. financial system dematerializes in a Fibonacci fever of accelerating de-leveraged infinitude? Will the remaining Big Boyz, Goldman Sachs and JP Morgan succumb to the counter-party hemorrhagic fever? Will great rows of lesser banking dominoes now start clacking onto their faces? Will all fifty states follow the leads of California and Massachusetts and line up at the U.S. Treasury’s hand-out window. Will the entity that calls itself the civilized world be left at week’s end with anything resembling money? Your guess is as good as mine. We’ve entered the realm of phase change, where everything is slipping and nothing has settled. The final result, when the dust settles – and that may not be for weeks to come – will certainly be a poorer western world. Will it be so poor that it can no longer afford to import anything? Including oil from the land of the date palm? If so, we are really in for a rough ride, poised as we are at the edge of the heating season here in the temperate regions. Notice, by the way, that the $700 billion just approved by congress to bail out Wall Street is exactly the same sum of money that we send to the oil exporting nations this year. Will millions stop receiving paychecks due to the turmoil in banking? It’s certainly possible, starting with the poor drones in Mr. Schwarzenegger’s motor vehicle bureau and eventually ranging to every payroll office in the land. Will Sarah Palin’s fellow Six-packers line up around the parking lagoons of the suburban banks trying desperately to withdraw the last seventy bucks in their checking accounts? (And will their thoughts in the event be: this economy is fundamentally sound....) Will the supermarket shelves of chipotle-flavored crunchy snacks and power drinks go empty as truckers refuse to deliver their loads without up-front payment? And how long does it take a hungry public to turn mean? We could see a parallel problem in the motor fuel supply sector. So far, gasoline shortages have only appeared in parts of the Southeast USA, due to interruptions caused by two hurricanes. If the oil tankers quit offloading now for lack of credible payment, then the whole nation will get an interesting lesson in the shortcomings of the suburban development pattern. The candidates’ debate Tuesday night should be interesting. I don’t expect too much give-and-take on the subject of East Ossetia this time around. Even at this point, the current crack-up in world finance makes the 1929 crash and the events of the 1930s look in comparison like an orderly small town auction of somebody’s grandmother’s effects. Back in that sepia day, America had plenty of everything except ready cash. We had, especially, plenty of our own oil, and – you’re not going to believe this but it’s true – the stuff was selling for as little as ten cents a barrel, it was so abundant. And yet still, America in the 1930s plunged into a dark depression of inactivity, loss of confidence, and impoverishment. This time around, things could get more disorderly. Personally, I think we may be beyond the reach even of fascist authoritarianism, because unlike the programmed industrial masses of the 1930s, we are unused to regimentation, to lining up at the factory gates and the movie theaters. Back then, society was so regimented that everybody wore uniforms in-and-out of the military. Look at movies from the 1930s. Every man-jack wore either a necktie and hat or overalls. The industrial masses behaved like termites. Once unemployment hit, they were waiting to be told what to do, to line up for something. It worked fabulously for Hitler, who took every advantage of this mentality. Luckily, the US went for Roosevelt (both FDR and Hitler entered office the same winter of 1933, by the way). FDR was more like everybody’s kindly Uncle Frank, and his reassuring persona enabled Americans to suck up their bad luck and altered circumstances. Many of them retreated to the family farm (which still existed then) and waited things out – and, anyway, the melodrama of the Great Depression soon resolved in the Second World War when Hitler’s love of regimentation led him into military misadventure. He shouldn’t have picked a fight with someone who had so much petroleum – end-of-story. Okay, what happens here and now? To this point (9 AM Monday October 6, 2008) events have been proceeding under a veneer of still-just-barely-credible authority. We (as represented by Congress) have allowed Mr. Paulson to advance and activate his remedies. As things unspool further, he will be out of credibility, perhaps in a few days, and it’s unlikely that his successor will have any either. Mr. Bernanke has simply gone AWOL. Notice, he has vanished from the media landscape. We may soon be hearing the declaration of various “emergency” measures involving the allocation of food and the rationing of oil products. The Big Bailout of last week may be partially rescinded as it becomes obvious that it has had no effect – I believe about half the $700 billion has already been allocated, which is to say: lost. I realize these things sound pretty extreme. But forces have been set in motion and momentum rules. One thing for sure: the American public is about to undergo a severe mood adjustment. There will be fewer American Idol fans and worshippers of Donald Trump by the close of business on Friday. Regards, James Howard Kunstler for The Daily Reckoning

READY TO RETIRE...THINK AGAIN

Retirement accounts have lost $2 trillion so far: By JULIE HIRSCHFELD DAVIS, Associated Press Writer Tue Oct 7, 7:27 PM ET Americans' retirement plans have lost as much as $2 trillion in the past 15 months - about 20 percent of their value - Congress' top budget analyst estimated Tuesday as lawmakers began investigating how turmoil in the financial industry is whittling away workers' nest eggs. http://news.yahoo.com/s/ap/20081007/ap_on_bi_ge/meltdown_retirement

SUICIDES ON THE INCREASE AS ECONOMIC CRISIS CONTINUES

'Economic 9/11' exacting grim psychological toll in US 8 Oct, 2008, 0718 hrs http://economictimes.indiatimes.com/News/International_Business/Economic_911_exacting_grim_psychological_toll_in_US/articleshow/3572068.cms LOS ANGELES: The murder-suicide of a Los Angeles financial manager who shot dead five members of his family before killing himself has highlighted the psychological toll of the economic meltdown.

THE EUROPEAN UNION COULD FALL TOO!

The financial crisis could be the euro's death knell and even end the shambolic EU By Christopher Booker http://www.informationclearinghouse.info/article20973.htm 08/10/08 "Daily Mail' -- At the very moment when Europe's banking system is teetering on the edge of collapse and national economies are in freefall, we might, perhaps, have expected the EU finally to live up to its more grandiose pretensions as the ' government of Europe'. Yet what have we seen by way of the EU's response to what is undoubtedly the most testing crisis in its history? A few perfunctory fine words and empty gestures - and then the national leaders flapping off like so many headless chickens to pursue their own national interests, regardless of all those laws and principles which in easier times they were apparently so happy to sign up to. The truth is that this massive banking crisis has exposed the hollowness, the impotence and the hypocrisy of the European Union like nothing before in its history.

AS OF OCT 1, 2008 MILITARY UNITS WILL BE USED FOR CIVIL INSURRECTIONS ABLE TO USE DEADLY FORCE

A little-noticed story surfaced a couple of weeks ago in the Army Times newspaper about the 3rd Infantry Division’s 1st Brigade Combat Team. “Beginning Oct. 1 for 12 months,” reported Army Times staff writer Gina Cavallaro, “the 1st BCT will be under the day-to-day control of U.S. Army North, the Army service component of Northern Command, as an on-call federal response force for natural or manmade emergencies and disasters, including terrorist attacks.” Disturbingly, she writes that “they may be called upon to help with civil unrest and crowd control” as well. http://www.democracynow.org/blog/2008/10/2/amy_goodmans_latest_column_invasion_of_the_sea_smurfs AND... Thousands of Troops Are Deployed on U.S. Streets Ready to Carry Out "Crowd Control" By Naomi Wolf 08/10/08 "AlterNet" http://www.informationclearinghouse.info/article20975.htm

JOHN McCAIN'S RAGE...THE MAN IS COMPLETELY NUTS!

I didn't think we could do worse than Bush....but.... Short video from Robert Greenwald... http://www.youtube.com/watch?v=fAyK-enrF1g

FROM JSMINESET.COM

Bullion lending by central banks all but dries up By Javier Blas in London , Financial Times, 7 Oct 2008 Central banks have all but stopped lending gold to commercial and investment banks and other participants in the precious metals market, in a move that on Tuesday sent the cost of borrowing bullion for one-month to more than twenty times its usual level. The one-month gold lease rate rocketed to 2.649 per cent, its highest level since May 2001 and significantly above its five-year average of 0.12 per cent, according to data from the London Bullion Market Association. Gold lease rates for two, three and six months and for a year also jumped to levels not seen in the last seven years. Traders said the jump reflects the fact that central banks – mostly European – have almost completely stopped lending gold in the last few days and are not rolling forward old leases after maturity. This is because of fears that some borrowers might not repay their bullion loans if they are engulfed by the financial crisis. "A number of central banks have been cutting back on their gold lending," said Tom Kendall, a precious metals strategist at Mitsubishi in London. http://money.ninemsn.com.au/article.aspx?id=643285

CENTRAL BANKS CO-ORDINATE RATE CUTS

Fed, major central banks slash rates By William L. Watts, MarketWatch Last update: 7:48 a.m. EDT Oct. 8, 2008 LONDON (MarketWatch) - The world's major central banks moved in concert Wednesday to slash key interest rates as policy makers struggle to head off global financial turmoil that has threatened to throttle world economic growth. In coordinated announcements, the Fed said it had cut its key lending rate by a half point to 1.5%. The Frankfurt-based European Central Bank trimmed its key refi rate to 3.75% from 4.25%, while the Bank of England cut its key rate to 4.5% from 5%. The Bank of Japan sat out the move, but issued a statement backing the action

4:26AM PDST GOOD MORNING GOLD BUGS!

TODAY'S REPORT: Pending home sales 7AM PDST Set my alarm for 1:00am pdst, as I suspected some overnight activity to the upside. Well, when it went off, I see that gold took off just minutes after I closed my eyes last night, in great pain, at 10pm pdst. Hadn't eaten anything since my pains started on Sunday evening, spent yesterday afternoon at the doctor and doing some blood work at the hospital where I am scheduled for an ultra sound at 7:30am on Thursday. Well I felt OK coming home last night, except I found out I had no headlights or running lights on my new truck that I just gave to Ford to fix another problem last week. I still had my hand held high beams and flashers and brake lights, and it was getting dark quick, but I made it home with out a ticket. Surprising how many people don't turn on their headlights until way after sunset, especially truckers. Anyhow, got home and ate some zucchini from the garden with onions, garlic and a bit of cheddar cheese and some Parmesan cheese sprinkled on it. How tough can that be on your intestine? Well, I found out a couple of hours later. The pain came back and I thought about going to the emergency room I had just been next to. But now it's dark and I don't have headlights. So I rolled over and somehow went to sleep only to wake up and see that gold exploded just as I had tuned out for the night in pain. Well, I set the alarm for 3:00am, then for 4:00am. At 4, the market fell about 27 dollars, apparently on the news of these "co-ordinated" rate cuts, but has also just rallied back almost to the top and is now giving back some of that. I can't believe how much money I've missed making while I'm either screwing around trying to keep this old body from hurting, or just sleeping for a couple of hours. It's like I'm being played with. Did anyone else notice that the "COMMENTS" at MarketWatch have disappeared?

THE CONSTITUTION IS HISTORY

Rumsfeld Updated Army's Continuity of Operations Plan before 9/11 By Tom Burghardt http://www.informationclearinghouse.info/article20960.htm 07/10/08 "Antifascist" -- - Ten months before the September 11, 2001 terrorist attacks, Secretary of Defense Donald Rumsfeld approved an updated version of the U.S. Army's secret operational Continuity of Government (COG) plans. A draft document published by the whistleblowing website Wikileaks entitled, "Army Regulation 500-3, Emergency Employment of Army and Other Resources. Army Continuity of Operations (COOP) Program," dated 19 January 2001, spells out changes in Army doctrine.

JIM SINCLAIR...THIS IS IT...TIME HAS RUN OUT...PROTECT YOURSELF NOW, OR LOSE IT ALL!

The Federal OTC Derivative Dealers Author: Jim Sinclair Dear Friends, Please understand that the Fed reacts to circumstances rather than acting before potential problems happen. If the Fed hadn't taken the rather strange action they took today by becoming OTC derivative dealers themselves this would have been the day the USA banking system imploded. Watch Libor rates to signal the point of detonation. Circumstances appear as if there were many problem Angels dancing on top of a pin that is being balanced on the nose of just those people who created the problem in the first place. An implosion of the banking system is coming, which means a bank holiday will occur. You now must have enough cash in hand to last a month or two. If you have not distanced yourself from financial agents then you have a financial death wish. If you have NOT made absolutely sure that your custodian account is a real custodial- ship you are probably in for a surprise. I took a call yesterday from a mature lady who told me she feels her money market fund that is only in Treasuries will not pay her out. They did tell her they intend to in seven days. I asked her to call me back in eight days. How does she know that this money market fund is not in OTC derivatives based on the movement of Treasuries? I do not want you to make that call to me. If you can retire from your retirement program at some reasonable discount do it NOW. This is it and it is NOW. Gold is going to $1200 and $1650. The US dollar rally has NO fundamental legs. Why are so many of you sitting there like a deer caught in the headlights? Protect yourself and do it TODAY! Respectfully, Jim

MONTY GUILD (jsmineset.com) RECOMMENDS THIS ARTICLE

Blocked pipes Oct 2nd 2008 | LONDON AND NEW YORK From The Economist print edition When banks find it hard to borrow, so do the rest of us http://www.economist.com/displaystory.cfm?story_id=12342237

WHO SAYS THERE ARE NO JOBS?

Treasury Announces Solicitations for Financial Agents October 6, 2008 hp-1185 Treasury Announces Solicitations for Financial Agents under the Emergency Economic Stabilization Act Washington, DC--The Treasury Department posted today three solicitations for financial agents to provide services that are needed for the effective implementation of the Troubled Asset Relief Program authorized under the Emergency Economic Stabilization Act. The three services being sought are: Custodian, Accounting, Auction Management, and Other Infrastructure Services Securities Asset Management Services Whole Loan Asset Management Services All interested and eligible parties that meet the requirements and guidelines required of each service should submit requests by the 5 p.m. (EDT) on Oct. 8, 2008. Treasury expects to announce the results of initial selections from these three competitions next week. In some cases more than one financial agent may be chosen. These services are being obtained through the Treasury's authority to retain financial agents to provide services on its behalf as provided for under the Emergency Economic Stabilization Act. These are not contracts governed by the provisions of the Federal Acquisition Regulation. More information on Treasury's procurement authorities under this Act can be found at: http://www.treasury.gov/press/releases/hp1179.htm.

MO' MONEY, MO' MONEY!

Global central banks set regular dollar auctions: Fed By Greg Robb Last update: 8:15 a.m. EDT Oct. 7, 2008 WASHINGTON (MarketWatch) -- Global central banks have set a schedule for dollar liquidity auctions that will take place every two weeks through the end of the year, the Federal Reserve announced Tuesday. These auctions include 28-day and 84-day loans and "forward auctions" of cash loans designed to bridge over the year-end. As part of the coordination, the Fed announced its schedule for cash auctions. Yesterday, the Fed said it planned to double the size of its lending to the banking system to a possible $900 billion at the end of the year

5:09AM PDST GOOD MORNING GOLD BUGS!

TODAY'S REPORTS: NOTHING THIS MORNING Retail chain index AT 5:45AM PDST Consumer credit AT NOON PDST Gold rallied overnite up to the 61.8% fib line of the whole move down from 932 to 82250. Dollar is slipping a bit, Euro is coming back up. Stocks are a disaster. Bonds are flopping around, but mainly being bought as a safe place to park money (for what? you almost have to pay them interest!) I am still in a good deal of discomfort as my "Ass Blaster" decided to work first thing this morning. With that and some cramps I'm barely able to keep my mind on the market and post. At 7:30am pdst, I call the doctor for an appointment. It's a 25 mile trip to town with no toilets for miles. fun, huh? Plus it's raining today. You can see the stair step pattern gold is making. Over night it waits until past midnight my time to move up another level. I may have to start trading nights which will make it very hard to post during the day. It's easier in some ways to trade at night, but much slower and with fewer signals and news available to me. A little pre-opening rally at 4.54am thru just now and the pull back. Well, lets's see what today brings us... It appears we are heading up in convulsive pulses to $1000 and beyond. READ SINCLAIR TO KEEP UP TO DATE!

1:40PM PDST GT IS BACK WITH NOT MUCH ACCOMPLISHED

Spent 3 hours finding out that our Medical Community is filled with money hunger pricks. My doctor was filled up today, emergency room is $200-500 entry fee depending on which chute they send you down, and usually not much gets accomplished. I went to the pharmacy and bought a bottle of "Ass Blaster" Phosphate Laxative that they give you before a colonoscopy. No free cork included! Forgot to get some adult diapers, but a towel will have to do. The directions say it should go to work with in 30 minutes to six HOURS! Must be produced by the Cable Company...(we'll be there sometime between 8 and 5)! I hope this is just the result of eating too much white flour in the vanilla and lemon oreo cookies I've been having with my coffee in the morning. Just sitting in front of a computer all day doesn't exercise the old Tube very much. Also went to the health food section of our Fred Meyer Store and got some Bran, some Brewer's Yeast, and a bag of apples and some cantaloupe. Ate one of the apples on the way home and the pain came back big time. I was almost ready to turn around and go to the emergency room, but by the time I got home and stood up the pain has now subsided. I sure hope this is something minor, but at my age, I've been wondering what is going to finally get me. I see that I should have made $5000 per contract on this morning's move, but instead, I only got $500 each. Hell, I could have bought a new intestine if I'd hung on!

9:35AM PDST GT IS OFF TO THE DOCTOR

7:55AM PDST GOOD MORNING GOLD BUGS!

Well, I feel much better this morning, physically, but I managed to screw up on my trade. I had trouble getting to sleep last night as I stayed in bed until after 1pm Sunday morning with a small headache, the kind you have just before you think you're going to puke. Didn't have much of an appetite but need something besides my coffee, so I had a mini-pizza, some garden tomatoes with Italian dressing, and a glass of red wine. Felt pretty good until the pain began. Thought it might be appendicitis, but the internet dispelled that. It's great to have all that info at your finger tips, because your doctor never tells you anything anymore. Anyway, I went to bed about 11:00pm and couldn't really sleep and was very uncomfortable but not in pain. I had to watch the market because my contracts (at the green line on my charts) were losing, and gold was looking very weak. Well, I finally fell asleep about 1:00am or so, and at 3:30am, I opened my eyes and was almost to tired to roll over and look at the laptop. But I did, thankfully, and saw that gold has jumped up above my contract price. Well, this happens all the time and then it falls back immediately and you are a loser again, and still sleepy. Well, I managed to organize my screens quickly and hit the SELL BUTTON and was happy to be out of what I thought was a weak market right when I have to be away from the computers while I go to the doctor. Right after I hit the Sell button, gold just kept going, and within minutes I would have had at least 5 times the profit I took. Well, that's the way it goes. At least I'm out with a profit, I thought and can go do what I have to do without having to worry about the market collapsing on me while I'm away...(I hate using stops!) So I rolled over and went back to sleep. The alarm goes off at 4:00am, but I switched it to 5:00am because I figured, I can't trade this morning, and I need some more sleep, or I'll be dragging later this afternoon when I'm at the doctor or in the hospital. Well, the alarm went off at 5:00am and I looked at the market and saw that it had moved up another step...but what could I do? So I rolled over again. Well, around 7am or so, I felt well enough to get up and the cats needed feeding (I feed them regularly at 5:30am and pm, and they usually let me know when I'm tardy, but this morning they let me sleep...animals are very intuitive. Well by now you can see where the market has gone and I made maybe a fifth or less of what I could have made. I wait for days for these moves and even get upside down in the trades, and wait them out with some degree of anguish, then manage to jump out just before they take off. Damn! Well, it looks as though gold has disconnected from everything so far. Dow is collapsing along with the rest of the World, Euro is way down, Oil fell to 88 but has come back up, Bonds are way up at 122s (ridiculous, because they are going to crash, and they don't pay anything, but that's where money goes for safety...Guv'mint Safety, hahaha!) Gold knows what it's doing, and Sinclair is right as usual that gold will go up no matter what happens elsewhere, as it is the UNIVERSAL SAFETY HEDGE and is REAL MONEY! You are now going to see gold moving up with shorter pull backs, like stair steps, as it pauses to consolidate to build energy for the next up moves (called "coiling"). You buy the dips and only sell PART of your CORE POSITION on really big run ups, and maybe not even then, as gold could just keep going as this whole nasty mess collapses like a volcano's crater does after it explodes, or like a giant sink hole collapses getting deeper and deeper as it sucks in everything around it. I am leaving for a quick run to the vet with my cat now, and then will watch the market unless I can get a quick doctor appointment and get my guts checked out. I probably get to have the hose stuck up my bumm to see what has died in there. Hang on gang...I think we are the winners after all!

MILITARIZING THE POLICE

Militarizing the Police by William Norman Grigg http://www.lewrockwell.com/grigg/grigg-w49.html EXCERPT: "The seamless integration of the military and law enforcement into a single "Internal Security Force" is the defining characteristic of a fully realized police state. Once this fusion is accomplished, the question becomes not "whether" a police state exists, but rather how acute its institutional violence against the subject population will become."

7: 40PM PDST SUNDAY WARNING TO MY READERS...

I am having some distressing pains this evening that require me to go to the doctor tomorrow after the day market closes, unless they become too severe before then. I also have to take one of my cats to the vet between 8 and 8:30am pdst for a minor surgery on the eye that was removed a month ago due to a tumor. The biggest problem is that I have contracts open that are not in profit, and I don't want to take a loss on them or let them fall any further. I can always do a spread on them with another contract month, but that month is Feb09, a very low volume month right now. Whatever happens, I will post charts and comments until I have to leave and will tell you when my last chart is. If for any reason I have to have surgery, I will take my laptop with me to the hospital and continue to the best of my ability. This all could be nothing, but it sure hurts. It's a pain in my left abdomen, so it's not appendicitis, which is on the right. It's more than likely an intestinal problem such as diverticulitis. Diverticulitis is a condition in which diverticuli in the colon rupture. The rupture results in infection in the tissues that surround the colon (large intestine). For further info on this condition, go to: http://www.medicinenet.com/diverticulosis/article.htm

MORE FROM JSMINESET.COM

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3123775/Financial-Crisis-Rush-for-gold-as-savers-queue-for-bullion.html Financial Crisis: Rush for gold as savers queue for bullion Savers have been queuing in the street to buy gold bars and coins, as they search for a safe place to invest their money. By Harry Wallop, Consumer Affairs Editor Last Updated: 6:26PM BST 02 Oct 2008 Gold nuggets and bars Traditionally, gold has been one of the safest investments during times of financial turmoil London's two leading bullion dealers, ATS Bullion and Baird & Co, have reported a rush of interest from savers, many of whom have hundreds of thousands of pounds worth of savings they want to convert into the precious metal. At least two customers have invested the entire proceeds from selling their houses into gold, each buying up more than £500,000-worth of gold bars, according to one dealer. Savers have been queuing in the street at ATS Bullion, whose offices are just off the Strand in London's west end. Sandra Conway, the company's managing director, said: "We've had to turn people away. The queues have been right out of the door and it's been really hectic at times. "Ever since Lehman Brothers went bankrupt, the phones have been going off the hook." Traditionally, gold has been one of the safest investments during times of financial turmoil. In 1973 gold cost just $60 an ounce and hit $650 in 1981. However, since the summer the price of gold has fallen as the dollar has strengthened – the two are linked quite closely. But the fact that gold has not performed well in recent months has not deterred thousands of investors. "They don't think of gold as a way of making money. They think of it as a safeguard in these turbulent times. You can move gold quickly, in a way that you can not with shares or cash in a bank account," Ms Conway said. The average investor is buying up between £10,000 and £50,000 in bars on each visit, but it is possible to buy as little as a half sovereign coin, which costs about £70. Some analysts say that while it may be romantic to buy bars of gold, there is a far more practical way to investing in gold. Investors can buy Exchange Traded Funds, which are like shares – they trade on the stock market – and they are directly linked to the price of gold. Mick Gilligan, at stockbrokers Killik & Co, said that his clients had been asking about investing in gold in far greater numbers in recent weeks. "It's lot easier to sell than the gold you keep in your sock drawer," he said.

CHARTS BY DAN NORCINI FROM FRIDAY AFTERNOON

ALWAYS...ALWAYS...ALWAYS... Study Dan Norcini's charts each afternoon after the market closes, and on Friday evening or Saturday, if he is swamped with market duties The Dollar is showing very heavy BEARISH divergence between the price action and some of his studies. LINK: from JSMINESET.COM http://www.jsmineset.com/cwsimages/Miscfiles/6626_Charts_for_10-3-2008.pdf

FROM JSMINESET.COM

Jim Sinclair's Commentary Be cautious of the "set in cement" opinion that the negative economic conditions in Europe will exceed the size of the unwind in the USA, the largest economy on the planet and the one who wrote over 75% of all OTC derivatives. This opinion is over discounted in the markets which tends to vote against it or at the least vote for overstatement. The European situation may come all at once, giving a scary visage, but in the final analysis will be considerably smaller in financial terms than the many trillions already fried in dollar based financial entities. IMF Says U.S. Faces `Sharp Downturn' as Market Crisis Worsens By Christopher Swann Oct. 2 (Bloomberg) -- The U.S. may fall into a recession as the financial rout deepens, the International Monetary Fund said in its most pessimistic outlook for the world's largest economy since the credit crisis began last year. ``The financial turmoil that began in the summer of 2007 has mutated into a full-blown crisis,'' the fund said in a section of its semiannual World Economic Outlook released in Washington today. There is ``a substantial likelihood of a sharp downturn in the United States,'' the fund said. By contrast, the IMF in July projected the U.S. would ``contract moderately'' in the second half of 2008 before recovering in 2009. Officials also said in a July update of economic forecasts that the global growth outlook was more ``balanced.'' ``Strong actions by policy makers to deal with the stress and support the restoration of financial system capital seem particularly important,'' the lender said today. Next week, the IMF will release updated projections for gross domestic product for the U.S. and other economies. The warning came as the U.S. Congress worked to pass a $700 billion bank rescue package to reassure financial markets. The Senate passed the legislation late yesterday, and the House of Representatives may vote tomorrow after rejecting a different version three days ago. http://www.bloomberg.com/apps/news?pid=20601068&sid=aNeRYv3hytE0&refer=home