Out of South Beach later this afternoon so I can get back to Dallas and greet Hurricane Rita there on Saturday. Can’t get away from this thing.

Gold took off for $470 again when The Gold Cartel (probably cabal ally Bank of England) took it down with a vengeance, even though the dollar was hit hard and the price of oil was up over $1. Yet another contrived maneuver by the cartel to do what they can to take the steam out of the gold stampede.

With the dollar under pressure, oil firm, and the stock market futures weak before the opening for a change, gold was due unchanged in New York. The bulls were not to be deterred and gold was soon up $2.50.

What struck me this morning was the query by CNBC to a White House spokesman about the budgetary effects of Katrina and what they all mean. His mantra was to focus on the notion it was a one time event and would be nothing which couldn’t be handled. Not even Planet Wall Street is going to handle this hooey.

*Iraq is a one off budget item which is costing over $200 billion.

*Katrina is a one time event costing $200 billion.

*Now Rita is bearing down on Houston. Who knows what damage it might do?

Thus, it is likely the US will have three one time events in play at the same time. There is only one way all of this may be "handled." Every American is going to have to ante up and reduce their standard of living. While this is a no no for politicians and Planet Wall Street, there is no other realistic way for this to be sorted out.

The problem with that for the Bush Administration is once this becomes apparent and takes hold in the US psyche, Americans are going to revolt over the money spent in Iraq. We went there on lies and now over 1900 US soldiers are dead and around 12,000 maimed and wounded with no end in sight. The only outcome in sight is Civil War. The reason for touching on this is the coming turmoil among the American public is going to bury the dollar and send more and more investors around the world into gold.

It is very difficult to know at times whether the movements in the various US financial markets are due to manipulation or normal market forces. One thing I don’t want to do is overdue the intervention analysis (gold can never be overdone). What I try to do is ask what makes sense. For example, with oil near $70 per barrel, it makes no sense for gold not to be hundreds of dollars per ounce higher. With the Planet Wall Street pundits all citing the rise in the price of gold due to increasing inflation concerns, it makes no sense for bond yields to be so low. At the moment bonds are up 2/3 on the day. Any time the 10-year notes approach 4.3% yields, they fall precipitously, just as gold is bombed every time it approaches $470. It also makes no sense that US stock market volatility would be minimal with so much tension and economic turmoil riling the key US Gulf Coast.

We are back to the Stepford Wives bit again. With Iraq a mess, the aftermath of Katrina a mess, and a potential Rita disaster, the Orwellians (when asked, "How is everything?") keep responding, "Everything is fine." The PPT and Gold Cartel are intervening in the US financial markets to foster that illusion.

To accomplish their objectives, The Working Group on Financial Markets (PPT) are employing zillions of dollars worth of derivatives and market maneuvers to keep "order." Yet, Murphy’s Law is operative everywhere. One can compare their activity to the proverbial boy trying to plug the Dutch dykes with one finger at a time. Plug one hole and another shows up.

It is only a matter of time before this massive derivatives operation blows up and causes extreme chaos in the US economy and financial markets. This is when the bums lose control of their farcical gold rig. Remember, these low-lifes are short 12,000 tonnes to 16,000 tonnes of gold and have lied to the world about it for many years. They are trapped as badly as those poor souls in New Orleans were.

The major point I would like to make again is the risk/reward ratio of owning gold/silver and the shares is off the charts. Gold is headed many, many hundreds of dollars per ounce higher. Eventually more than $1,000 per ounce higher. Its future price action will blow people away just as Katrina did and Rita will. Batten down the hatches and spread the word.

The PM Gold Fix was $ 469.10, indicating physical market demand continues to surge despite the price rise. The Gold Cartel has lost control of the monster they have kept under control the past few years. That monster is European and other investment demand for gold. As mentioned here till the cows come home, The Gold Cartel used the dollar to suppress the gold price. They knew if gold were allowed to do what it is doing now in foreign currency terms, they could not handle the demand. Now that foreigners see gold rising in a meaningful way, they want in. Love, love, love it.

Good morning Bill:

There were no increases in any of the one month terms for any of the metals this morning, while terms from the two month out mostly rose. Gold is out of its minor backwardation. Palladium is unchanged but remains in severe backwardation, all at rates under .20%. Silver's rates rose marginally in the three month on terms. This is interesting as it may be related to delivery obligations on CRIMEX for December and January. If later terms rates continue to firm, this becomes more likely. Near term lease rates suggest there is no delivery crunch in silver this month, where another 2 contracts were stopped yesterday. We are on trend for 30 Moz of physical silver transfers this month on Crimex. The Bank of Nova Scotia took both and continues as a prominent stopper. There were no lease rate changes in platinum.
Regards, Rhody
http://www.kitco.com/market/lfrate.html

A number of queries have come my way re what happens to gold when the new Washington Agreement kicks in on September 26?

*Very little because The Gold Cartel has already pre-sold a sizeable amount of the allotted gold to sell by using the futures market. They will deliver gold against those shorts to waiting and willing buyers.

*There are other major buyers beginning to line up to take this central bank gold off their hands.

*It is important to keep in mind that demand for gold is 1500 tonnes+ greater than mine and scrap supply. Mine supply is shrinking, as we all know. Available gold for lease is on the wane. The bums are gradually looking like trapped rats in a corner.

Another question I keep receiving is what if there is a 29 type of crash? How will it affect the gold shares?

*On a very short-term basis anything could happen in a margin call, liquidity crunch. However, gold is going to go berserk, crash or no crash. Most of the investment world, and many of the gold bugs, are out of the share market, especially the smaller golds. The tiny gold market will not be able to handle voluminous buying which will surface from all over the world. Gold Rush 21 was aptly named.

GATA’s battle plan to defeat The Gold Cartel was patterned after the brilliant strategy of Africa’s greatest general, SHAKA. See:

-- Posted Thursday, 22 September 2005 | Digg This Article