Last evening I had the pleasure of having dinner with Rick Van Nieuwenhuyse, president and CEO of NovaGold Resources, Inc. (AMEX, TSX: NG) As most of you must know, NovaGold is suddenly fighting a hostile takeover bid from Barrick Gold.

In days of yore Rick, born in Belgium, was head of exploration for Placer Dome before deciding to build his own company. He was very aware that the former chairman of Placer, John Willson, was one of GATA's first corporate supporters. (When Willson retired, Placer went anti-GATA and began to hedge its gold production at around $300 per ounce.)

At the moment the most significant happening in the gold world is Barrick's bid for NovaGold. For many reasons this cannot be allowed to succeed at a price less than $30 per share. (NovaGold this week has been trading a little below $17.) For their own interest and the interest of a free gold price, all gold shareholders, whether they own NovaGold shares or not, must OPPOSE Barrick's bid.

Here's why:

* Placer Dome got fouled up and only fiddled around with some of the NovaGold properties in which they were joint partners.

* Having taken over Placer Dome, Barrick was like a breath of fresh air to NovaGold because it promised to spend a lot of money to drill the properties at an aggressive pace.

* NovaGold laid out the entire deal to Barrick, and all was hunky-dory for Nova's shareholders until, OUT OF NOWHERE, Barrick launched a hostile takeover bid -- and while Van Nieuwenhuyse was on vacation in Italy.

* Barrick's hedge book is mega-toxic so the company is desperate for the unhedged gold in the ground at NovaGold, with which Barrick would extricate itself from a nightmare. Taking over NovaGold will help Barrick immensely. This cannot be allowed to happen UNLESS Barrick has to pay so much that it impairs their credit situation:

TORONTO (Standard & Poor's) July 25, 2006--Standard & Poor's Rating Services today said it placed its 'A-' long-term corporate credit and senior unsecured debt ratings on Barrick Gold Corp. on CreditWatch with negative implications after the company announced an unsolicited US$1.53 billion takeover of NovaGold Resources Inc. (unrated). The 'A-2' CP rating on Barrick is affirmed.

-END-

* The flagship property of NovaGold is Donlin Creek in Alaska, a 28.5-million ounce resource. That is the figure the company is allowed to use due to stringent filing requirements. Barrick knows that the gold at Donlin Creek is closer to 50 MILLION OUNCES because Barrick played good guy to NovaGold to learn everything before turning to their usual bad-guy drill. Barrick KNOWS!

* Some of the smartest people I know tell me that anything under $30 per share for NovaGold can be considered practically theft by Barrick and an insult to deserving NovaGold shareholders. In response to NovaGold's appeal to GATA, we ask the entire GATA ARMY, and the whole gold world, to make sure Barrick is unable to take over NovaGold for anything less than that price. GATA consultant Adrian Douglas, a substantial NovaGold shareholder, puts it in perspective:

Dear Sir,
Public record shows that your fund/institution is a large holder of NovaGold shares. I would like to bring to your attention some very important information concerning Barrick Gold who has launched a hostile bid for NovaGold.

Barrick is a company where some detailed public domain hard facts are now available on it being complicit in the suppression of the gold price. First and foremost is Barrick’s own confession to manipulating the gold price on behalf of the central banks as admitted in a filing in US Federal court (http://www.gata.org/node/4279).

In this same GATA (Gold Anti Trust Action Committee) reference a speech by Mr. William R. White of the BIS is cited in which a scheme to suppress gold was admitted.

A report by Cheuvreux/Credit Agricole (http://www.gata.org/node/4270) confirms many of the findings of GATA. A recent report by the IMF http://www.gata.org/node/4123 confirms what GATA has claimed for many years that Central Banks treat gold in the vault and gold receivables as the same line item. This means that gold loaned out or swapped to be sold in the market to suppress the gold price has been "invisible" to gold market participants as it still appears on the Central Banks balance sheet as if it were in the bank vault. This gives a totally erroneous and deceptive impression of an abundant supply of gold when in fact mine supply can not meet demand.

The scheme to suppress gold is FACT. It has been admitted to by important key official figures. Barrick’s involvement in the scheme is also FACT. They admitted to it themselves in that they said they were acting on behalf of the Central banks who have immunity from prosecution.

Bob Landis pointed out in his article (March 24, 2006. Now They Tell Us: BIS Confirms Rigging Gold Prices http://www.goldensextant.com/ ) that the entering into the public record that the BIS and Central Banks do indeed manipulate the gold price when they feel it is "useful" means that Gold Company Executives have a fiduciary responsibility to declare this to their shareholders when issuing a prospectus for new offerings of shares and securities. By extension, it is reasonable to conclude that because any fund or institutional investment manager has a fiduciary responsibility to act in the best interests of its investors he or she must be fully cognizant of the background of Barrick and what type of activities it has participated in as relevant and essential information in order to reach a decision with respect to the Barrick hostile offer.

If gold had only kept pace with inflation it would now be $2000/oz let alone being able to have its price reflect the shrinking supply and increasing demand situation. A gold price of such a magnitude would value NovaGold at $145 per share and not $14.5 per share as is being offered. Barrick is complicit in the scheme that has resulted in NovaGold being valued 90% less than where it should be. It is unthinkable then that Barrick should be allowed to acquire NovaGold at that price!

We strongly urge you to examine carefully the true value and the potential value of NovaGold and to reject the current offer by Barrick. Even in today’s suppressed gold price environment a very conservative valuation of NovaGold would put it at more than $30 per share. Barrick should not be allowed to cheat your investors out of a very valuable mining company which has a much brighter future in terms of shareholder value as an independent mining entity.

Regards

* Thanks to NovaGold, GATA now has the practical opportunity to capitalize on all we have accomplished over the years. Many of our supporters have rightly suggested doing this and doing that and doing some other thing -- much of which we have already done, in many cases to no avail, as we have gone to the financial and mining industry establishment to correct the wrongs. In this case we don't need the establishment. We need only NovaGold shareholders. We need only to make everyone aware of what is going on here, and that is JUST WHAT WE ARE GOING TO DO.

GATA is asking that our entire ARMY mobilize to win the day for all of us.

* Barrick is going to pay a dear price for being what it is and for what it has done to help the Gold Cartel keep the gold price down. For starters, and we are only warming up, GATA would like the ARMY to contact NovaGold's major shareholders to oppose the Barrick offer for the reasons cited above.

With just the following, we can reach around 30 percent of NovaGold's shareholders:

Sprott Asset Management Inc 4.65%
invest@sprott.com

SNYDER CAPITAL MANAGEMENT, LP 3.78%
Pjoyce@ixisag.com

ROYCE & ASSOCIATES, INC. 3.09%
funds@roycenet.com

NWQ INVESTMENT MANAGEMENT COMPANY, LLC 3.04%
scase@nwq.com

WELLS FARGO & COMPANY 2.61%
wellsfmf@wellsfargo.com

NEUBERGER BERMAN, LLC 11.03%
sri@nb.com

BLACKROCK INC. 1.81%
info@blackrock.com

What struck me the most during my meeting with Rick Van Nieuwenhuyse was a conversation he had with his 8-year-old son, who said of Barrick: "Dad, this means they lied to you." Rick could not disagree. Even more, his son is a big "Star Wars" fan and in his world and NovaGold's, Barrick is now the Evil Empire and it must be defeated.

NovaGold has requested GATA's "Force" to defeat the Evil Empire of the Gold Cartel and its agent, Barrick Gold. We are warming up to do just that.

Who ya gonna call (just make it GOLD instead of Ghost):

http://www.youtube.com/watch?v=If5phlHLOeQ&mode=related&search=

Once again, The Gold Cartel showed up to make their presence known by calming a price of gold that wants to soar. In what seems like a daily occurrence, gold closed well off its highs. At the same time, it is clear this Evil Empire has its hands full and is VERY likely to be over powered by a surging physical market.

The gold chart is one of strength, not weakness:

The reasons for gold to move higher abound, as pounded on in this column for weeks.

Crude oil was last at $76.35 off 5 cents.

The dollar fell .06 to 84.42.

The gold open interest fell 1461 contracts to 309,097, while the silver open interest dropped 826 contracts to 108,463.

Silver is an explosion waiting to happen. From Adrian on the US silver stocks:

Bill,
As of the close of business August 8 the COMEX warehouse silver inventory saw another stunning drawdown. The total inventory reduced by 309,548 ozs to 100.77 million ozs. The silver stored on behalf of clients (eligible category) increased by 596,568 ozs but the dealers inventory (registered category) dropped by a substantial 906,116 ozs. The dealer inventory stands at a rather paltry 42.7 million ozs.
This is looking astonishingly bullish!
Cheers
Adrian

September silver
http://futures.tradingcharts.com/chart/SV/96

More gold goodies:

Indian ex-duty premiums: AM $9.88. PM $7.87, with world gold at $636.50 and $642.05. Very ample, and quite adequate, for legal imports. India seems a ready buyer in the $630s. The rupee firmed a little and the stock market closed up 1.18%, a new post-May collapse high.

World gold appears to have been subjected to a meaningful bear raid last night. By the time TOCOM opened it was already down $5.70 from the NY close. While the dollar did stage an abrupt rally in this uninhabited period of the day, gold was down 5 in Euro too, clearly indicating non-currency pressure.

TOCOM seemed puzzled by this development. On heavy volume – up 51% to the equivalent of 35,654 Comex lots - world gold eventually went out at $639, $6.85 below the NY close and $1.30 below TOCOM open: the active contract was down 24 yen. However, open interest was actually up 1.4 tonnes (462 Comex lots) while Mitsubishi’s data implies that the public shed only 1.5 tonnes from its long: Japan was not the cause of this move.

Shanghai, for what it is worth, saw premiums contract by about $1 to just barely positive. Today saw the PBOC actually express an interest in seeing the Chinese currency appreciate in order to reap long-obvious public policy objectives. In that context, Shanghai gold is indicating skepticism about a yuan appreciation.

In NY yesterday, the failure to topple gold down and its’ subsequent substantial recovery was on only 22,299 contracts: open interest slipped 1461 lots. Consolidated CBOT volume was equal to 29,530 NY lots: net open interest rose 652 NY contracts.

Some commentators express puzzlement and concern that the ECB CB herd seems headed in the direction of underselling itsWAG2 quota. Apart from the obvious fact that sales began to falter as soon as gold established itself on a substantial upward trajectory, could it be possible that co operating with the Americans is less popular than it was?

Today’s forceful rejection in NY of overnight weakness in world gold was rendered less impressive by the 2 hour sidewards move at the high during the late morning, and the usual soft close. Gold finished up $4.70 on volume of 35,000. Clearly there is a continuous overhead seller.

CARTEL CAPITULATION WATCH

US economic news:

10:00 Jun Wholesale Inventories reported 0.8% vs. consensus 0.6%
Prior revised to 0.9% from 0.8%.
* * * * *

WASHINGTON, Aug 9 (Reuters) - Inventories at U.S. wholesalers rose a larger-than-expected 0.8 percent in June as higher stocks of lumber, machinery and metals were offset by leaner automotive and petroleum inventories, a government report on Wednesday showed.

Sales rose 1.4 percent in June after a 1.9 percent advance he previous month, the Commerce Department said. The inventory-to-sales ratio - a measure of how long it would take to sell off stocks of goods at the current pace - fell to a record 1.14 months' worth from 1.15 months' in May.

-END-

10:30 DOE reports crude oil inventories (1.11M) barrels vs. consensus (1.0M) barrels
Gasoline inventories reported (3.21M) barrels vs. consensus (1.0M) barrels.Distillate inventories reported (136K) barrels vs. consensus +700Kbarrels.
* * * * *

10:30 API reports crude oil inventories +5.65M barrels
Gasoline inventories (3.14M) barrels, while distillate inventories +45K barrels.
* * * * *

Bill,
This Toll Bros. earnings article is just about the worst news on the U.S. housing industry one could imagine. I don't say jaw-dropping lightly but what Toll Bros. just reported should send shivers through Fed corridors. The thought of a soft landing in housing is officially dead. This, and there are still millions of ARM's and interest only mortgages ready to reset. 43% of all mortgages written in 2005 were ARM or interest only. It can only get worse from here. Plummeting taxes and cascading defaults are inevitable. So is cranking up the dollar printing press.

New orders off 47%
Contract values off 45%
Inventories of unsold homes in various markets up 60-97%
Cancellation rates still increasing, no bottom in sight

http://news
.yahoo.com/s/nm/20060809/bs_nm/constructi0n_toll_outlook_dc_7&
printer=1;_ylt=Ai.b8._WW2qTbw4vDKHM
C6Wb.HQA;_ylu=X3oDMTA3MXN1bHE0BHNlYwN0bWE-

The latest on Fannie Mae:

FNM to delay 2nd quarter financials...they haven't filed audited financials for 2 years, why the hell should they start now? I reiterate my call to have the largest holders of this stock to publicly answer to their mutual fund investors as to why they continue to invest in FNM...I would add to that that Franklin Raines needs to be thrown in jail...Dave in Denver

Nigeria checking in:

Afternoon Bill, from Nigeria,
As you are now saying so often, it is all so predictable. You published my comments on the Saturday morning Midas. If I can sit here in LAGOS on a Friday evening, with no time for even a cup of tea and yet predict with unerring accuracy that POG will be trashed in about 96 hours time, then the whole charade has become an absolute farce. It won't be long now before POG has one bounce too many for the Beast. Maybe its the bounce occurring right now (15.55 CET) or maybe its 500 bounce backs from now ,but this is clearly the end game. "They" never had an exit strategy after their initial successes, and now there is just no way out.
Pity about HARMONY becoming a basket case, but I have always been a GOLDFIELDS man. Thank goodness the HARMONY bid was eventually defeated leaving the unhedged, well managed GOLDFIELDS as a wonderful play on POG.
Regards
Nicholas

TOCOM:

Good Evening:
During the August 8th TOCOM sessions the seven large gold shorts reduced their total net short position by 3,702 contracts to 145,738 contracts.

http://www.tocom.or.jp/souba/gold/torikumi.html

In silver, they further reduced their total net short position by 122 contracts to 3,164 contracts. The low (since Feb. 17) came on April 7 when their total net short position dropped to 2,865 contracts. We continue to edge closer to this low in silver.

http://www.tocom.or.jp/souba/silver/torikumi.html
Take care,
Scott

Bill,
In the August 8th session on the TOCOM Goldman Sachs increased their net short position by a rather insignificant 60 contracts. Their net short position stands at 37,135 contracts.
Cheers
Adrian

Golden Star Resources is FINALLY showing signs of life:

HUI
http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=hui&sid=0&o_symb=hui&freq=1&time=

GATA BE IN IT TO WIN IT!

Appendix

Hello Bill,
The Café has reported on the topic of electronic commodity exchanges many times over the years. The linked story shows the unfortunate but predictible result of this development which has led to the manipulation of the oil market by firms such as Goldman Sachs:

"The key here is that CFMA allowed for the creation of electronic futures exchanges that would not be governed by the CFTC, and determined that energy futures and derivatives could be traded on such exchanges. In the view of this Senate report, this precipitated a tremendous expansion in the demand for energy related contracts – and the potential for manipulation by large investors around the world – that has likely increased the price of oil by as much as $25 per barrel.

Taking advantage of this situation is BP Capital, a hedge fund managed by famed oilman T. Boone Pickens and estimated to be about $5 billion in size. Pickens is reported to be a huge participant on the ICE. Through the support of hedge funds like his, as well as major brokerage firms such as Goldman Sachs, about 30 percent of all U.S. crude oil futures now trade at the ICE."

Reading the Café sure puts a person ahead of the curve.
Hank Fellerman

http://www.americanthinker.com/articles.php?article_id=5747

http://www.americanthinker.com/articles.php?article_id=5747Le Patron (GATA Bill Murphy)
Well, I for one, am no longer a doubting Thomas. These are truly exciting days for us gold bugs, in the midts of a commodities supercycle set to last 5 to 10 more years, after years of gold suppression now losing steam, with a high bullion prices, and with pending massive short squeezes ready to launch gold and silver prices to four and three figures respectively in the very near term. Confirmation of this state of affairs in bullion land continues to roll in. This day, documented proof reveals that European Central Banks gold sales are in deed decreasing.
---------
European Central Banks Late on Gold Sales
By Jon A. Nones
08 Aug 2006 at 08:18 PM EDT
St. LOUIS -- The 15 central banks within the European Gold Agreement (EGA) have sold only 331 tonnes, 169 tonnes short of the 500-tonne limit. With less than two months to go in the EGA year, what does this mean for the gold market? . . .
--------
I commented to this article, with a post entitled: ECB Gold Sales & Return to Real Money, As Predicted, stating in part: It seems that the Bullion situation is unfolding as predicted before our eyes. It has been world bank gold sales that have suppressed gold over the last decade, including leasing, loaning, and dehedging for market shorting, only now seriously breaking out to the up side, post December 05 phase I channel bull.

Anyone notice how yesterday, gold was off, just before the rate pause was announced? Oh, my world is so safe now, with such low gold prices and low interest rates!!! Yeah-Right, give me a break. No doubt from here that Gold will reach $1000 in the very near term, say by year end, in its move towards $3000 by 2010, only to then reach a minimum relative honest value vis-a-vis the almighty dollar with 6$ Trillion in worthless paper, in foreign banks, ready to collapse in value at the drop of another world perturbation shock.

Bill Murphy and the GATA gang has had it right for the last six years now, that the POG has been manipulated by the world banks, and their commercial co-conspirators of the GOLD CARTEL, and the (DOW) Plunge Protection Team (PPT) including members like the FOMC, to make us sheeple feel cozies that all is well in fiatmoneyville. I would like to share and revisit some prior posts, that seem even more true this day, as we approach the fall gold buying season, and off to $1000/oz by year end, with declining world bank gold sales. Note below several predictions that world bank gold sales are slowing, and now, it seems for real, for every one to see."

There are also rumors that other Asian banks, such as China and Japan, may increase their gold reserves from a tiny 1% of their FOREX reserves. Other world banks seem to be taking notice as well of gold trends and ballooning US debt, as Venezuela and South Africa, inter alia, have also indicated new interest in building their gold reserves. Central bank gold sales by the EU seem to be slowing as well, if not reversed, as the British exchequer, Mr. Brown, gets repeatedly slammed for selling vast amounts of British gold reserves at the bottom of the gold price in about 2000. I suspect Britain will now think twice about selling any more gold from its reserves. There is a global movement out there and something big is afoot for sure."

-- Posted Thursday, 10 August 2006 | Digg This Article