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-- Posted Monday, 13 October 2008 | Digg This Article | Source: GoldSeek.com
October 12 - $851.60 ?? - Silver $10.49 ?? "Gold in the hands of the public is an enemy of the state." … Adolf Hitler GO GATA! This was to be my title for today, but the above was too compelling based on what is sent to me on a daily basis on the growing restrictions regarding gold availability at the bullion banks around the world… Time To Take Delivery of CBT/COMEX Gold/Silver Futures *** I figured I had better get a MIDAS out today or tomorrow’s might be 100 pages long at the rate pertinent news and sound input is coming my way to bring to your attention. What initially keeps hitting me over the head is that it is time to let everyone know in the investment world if they want to make easy money, which is almost never doable, just buy a gold, or silver, futures contract on the Comex, OR, for lesser amounts of money, the mini-contracts on the Chicago Board of Trade. Based on Friday’s Comex close, or even better, the plunging later afternoon prices on the Access Market, there is instant arbitrage money to be made in the months ahead. The deal… *We know from published reports in the media, and from the anecdotal input coming our way from everywhere, that it is becoming harder and harder to buy gold and silver in various forms. You can read the latest below. *It appears that various governments and bullion banks are intentionally making it harder and harder for individuals to buy physical gold. The US mint is restricting gold coin sales. The German banks are saying they don’t have supply. Scotiabank says they are out. They are not banning people from owning gold, they are just making it very difficult to buy because they say they have nothing for sale. *Therefore, prices of gold and silver in the unofficial markets are taking off all over the world. The price of gold in the real world is close to, or over, $1,000 per ounce and silver is $15 to $20 per ounce. *Meanwhile, the prices on the Comex are trounced by The Gold Cartel in order to deflect the seriousness of the true financial situation of the US. *Demand for gold and silver will continue to soar. I suspect we are only at the first stage of buying, as more and more investors realize what all these bailouts and liquidity injections really mean. *Therefore, investors are going to continually bid up the prices for what is available. *Thus, it is time for investors to learn, and wake up to, how to buy gold and silver on the cheap. The Gold Cartel is GIVING AWAY EASY MONEY to anyone willing to take the time to learn what to do. * We know demand for gold and silver will soar in the future as supply becomes more restricted … even mine supply is on the wane. So the prices for gold and silver in the real world are not going to come down in the months, even years ahead … which means investors can lock in 20%+ profits by taking delivery of gold and 50% to 100% profits in silver. All you have to do is take delivery and then offer the gold and silver for sale in the free market at prices below what people are able to buy the stuff on EBAY, etc. *Or you can keep the gold and silver in an exchange warehouse; or keep the metals in your own depository; or you can redeliver the futures contracts back to the exchange at much higher prices, which are sure to come … if for no other reason than the light bulb is going to go off all over the world about buying cheap gold and silver on the Comex. Want to start drooling about making EASY MONEY… Bill, I talked to the chief broker in charge of the precious metals dept. of one of the largest metals banks in the Netherlands this morning. He told me that his bank had no gold in the vault for the first time in one hundred and forty seven years of its history! He had clients waiting in line for bullion coins of any type, and for the first time in his career, he had No supply! None, zero, zip, nada! I called a broker in West palm beach, fl. and he confirmed he also had no supply! He also said he had funds of two and one half million dollars in his acct. from one client, and could not find product to fill his order! Bewilderment is a term he used! He asked me how silver and gold could be so cheap in the markets when there is no supply! That discussion I will have with him another day! Paul A distraught Café member sent me an email, which further convinced me to get this MIDAS out right away. This was my response to him yesterday: Hello Leigh
My best advice is for the right thing to do now is buy a December silver contract and wait for delivery. It would give them time to make decisions. At $10 silver, it would cost $50,000. They can open an account right away with a brokerage, if they don't have one. Dont know what the margin is now, but will probably have to put up around $5,000, or so ... paying $50,000 when they get delivery. Why do I like this? Because to buy silver in other forms now costs at least 50% more than that. This is the way to go. If they don't want to spend that much, got to the Chicago Board of trade mini contract: http://www.cbot.com/cbot/pub/cont_detail/0,3206,1276+14416,00.html Deal of a lifetime at these prices. If they want gold, to the Comex and do the same thing, or buy 33.2 troy ounces on the Chicago mini-gold contract... http://www.cbot.com/cbot/pub/cont_detail/0,3206,1248+14410,00.html All the best
Bill GATA supporter Jason Hommel has been all over this issue, rightly pounding the table about it, so I asked him for some more info for you and he was kind enough to respond… Bill,
For your readers who are considering taking delivery of COMEX bars from COMEX, there are a few things people should know.
First, they will do everything possible to talk you out of it. They will speak of mystifying and 'expensive' assaying charges. But I hear they assay is free at Brinks in LA!
Second, you don't have to go to COMEX to get COMEX bars. Here is a list of refineries that produce COMEX good delivery bars: http://www.lbma.org.uk/good_delivery_silver.html
Third, what do you do with a bar, or a few, once you take delivery? You can always send it to a mint to turn into 1 oz. rounds, 10 oz. bars, or 100 oz. bars, which you can sell at a premium these days. Many of the mints are backed up, but some are not. Some are just starting up again, or will soon. It's a good time, and I'll be looking to do this myself, so I can't reveal my sources at this time.
I always used to think that, long term, we investors should wait until minting fees return to the historic 1/2 of 1%, instead of 5%-10% like they are today, meaning that silver is 20 times higher in value, as compared to minting costs. However, with premiums on silver items ranging from 30% to 100%+, minting makes sense again, even though minting fees are so high compared to the cost of silver.
I saw 1 troy pound of silver listed at ebay.com for $33/oz! That's likely because bidders are unaware that a troy pound is 12 ounces, and not 16, but even at 16 ounces, the price was $24/oz.!
Jason Hommel
www.silverstockreport.com December is the actively traded month for both gold and silver on the Comex. To take delivery earlier, I suggest buying one of those contracts and then spread trade out of it with the nearest month traded. In gold, you would buy October and sell December, after having bought the Dec contract first. For further details, contact your broker. If he does not handle such transactions, have him recommend a futures broker to you, either at his firm, or at another one. One last point, if you aren’t able to actually take delivery right away (waiting for December deliveries for example, put up at least twice the margin required by the brokerage, so as not to think you are losing money should the price dip even further after your purchase. This exercise is to make money down the road on an arbitrage basis, not to make a quick killing in futures trading. That said, I can’t imagine the prices of gold and silver being lower in December than they are now. Have fun, make some money, and beat The Gold Cartel gang at their own game. AND, please spread the word on this everywhere you can. Some more physical input… From: redfordjewelryandcoin.com To: JLG771
Sent: 10/11/2008 12:12:41 P.M. Eastern Daylight Time
Subj: RE: Hello Cathy - Whats going on with silver today ? Hello Jeff,
There is a huge shortage of silver bars and coins. The demand is high and the supply is low because people are unwilling to sell in this low market. I've ordered 100 1 oz silver rounds which are currently being produced. I will let you know on Monday the prices of the 90% and silver eagles.
Regards,
Cathy Andy… wow, look at these physical silver prices on eBay http://shop.ebay.com/items/?_nkw=silver+bu
llion+1+oz&_sacat=0&_fromfsb=&_trksid=m270.l1313&_odkw=s
ilver+bullion&_osacat=0 I know that some of these coins have premia for specialty, but on AVERAGE it looks like about $20/oz., which is DEFINITELY higher than it was last week. Am I missing something here? I don’t think so; premia or not, these prices on average were DEFINITELY lower last week. eBay gold - NOTHING under $1,000/oz http://shop.ebay.com/items/?_nkw=gold+1+oz
.&_sacat=0&_fromfsb=&_trksid=m270.l1313&_
odkw=scott%27s+winterguard&_osacat=0 *** They finally called me back at 3:53 PM Eastern, even though their offices close at 2:30 PM. They have nothing for sale is Silver except 1000 OZ Silver bars. In Gold there is a limit on American Eagles of 5 and Buffalo Eagles of 10 per customer. The lady I talked with also said they get lots of calls. In fact she has been with Wilmington Trust since 1986. Wilmington Trust is the bank that used to be a big gold trader/holding bank, but they spun that business off to Fidelitrade. She said today was the busiest she can remember. Again, they do no marketing that I am aware of. I have never seen them advertise anywhere .
*** CARTEL CAPITULATION WATCH Chuck checked in… The NY Times remains the ultimate barometer. At the very top of the market, it had a full separate section on New York and the "New Guilded Age." Today, it doesn't have a major headline on the crisis. The lead article is on North Korea and a San DIego restaurant that bans tipping. It is the pinnacle of cluelessness. I think we are going down to about 5,000 on the Dow, perhaps a little lower. They must stop trading before this move is done and it might be this week judging by the utility and Goldman charts. It is so significant that Goldman was down almost 30% on Friday and no one noticed. Chuck… Bill:
It's incredible that every bit of advice is to wait this out or buy because we are near or at the bottom. Still no fear except that blowhard Cramer. Tip of the hat to him. They are going to have to close down everything and try to put in some kind of plan to stop gold. Maybe it will be that everyone who owns gold must sell it at $100 to Goldman. It's coming down the track. C And for his fourth BOW, my good friend Chuck Cohen for an encore, who has been so prescient about the stock market… Bill:
I thought I would dig up a comparison of the past 5 days to show how differently the bond market has reacted to the past 5 days of intense selling in the market. Note from the charts that from its bottom, 10 year bond rates have actually gone up about 40 basis points in the face of a 1500 drop in the Dow (actually 2200 points if you go to the bottom of this Friday.
Take not also that the Utilities appear to have fallen off a cliff during this same time, from 425 last Friday to an amazing close of 325 this Friday, and with an intraday low of 290 or so. That means instead of rising during this crushing deflationary environment including an enormous fall in oil, the conservative and low-beta utilities have dropped almost 30% and this in just 5 days. This total disconnect between bonds and the utilities a shocker, and hints strongly that something unthinkable is coming down the pike.
The other thing I saw is, that unlike an impending crash bottom, the volume in the Dow stocks has not increased as would be expected. As you can see in the one month Dow chart, the volume is actually less than what it was last month when the average was over 2,000 points higher. This is very unusual and very scary behavior. I would suspect that the bottom whenever and wherever it comes will be accompanied with amazing volume with perhaps only the world governments being the buyers.
If you are reading and listening to the mainstream coverage of what is happening, you can tell that there is still absolute calm and courage by the pundits. Almost all, except Jim Cramer surprisingly, continue to advise invesors not to panic and to stay the course because the bottom is just around the corner. They don't want you to miss out on the first fruits of the bounce.
If you will access the front page of my consummate mainstream barometer, the New York Times (nytimes.com), it is clear that the bottom in terms of distance is far away although very likely not in terms of time. Today there seemed to be more coverage on the San Diego restaurant that prohibits tips and on the style issues in Paris than there is on this historic event. It is like watching a Tsuanami coming at you and saying "What a huge wave!" Our once vigilant, great nation is totally lost and absolutely unprepared for what is about to hit?
This frightening event is not going to announce itself to the yet cheery mainstream financial bloggers. You can be certain that the day the bomb really hits home, it will be headlines seen only at historical events, and it will be even featured on the clueless Times. Chuck ikiecohen@msn.com
PS Bill, I might put all of the Dow charts in a separate issue tomorrow. From my nest, it looks like they have all dived off the same cliff, perhaps like lemmings. Are you interested? Chuck
18:39 Paulson says US will purchase equity in a broad array of financial firms - wires
Comments come in the wake of the G7 meeting. The Treasury is currently working to develop a "a standardized program that is open to a broad array of financial institutions". Paulson notes that the Treasury would not be involved in the management of any banks in which they take an equity stake. The equity purchases would take place in combination with the purchase of toxic assets via TARP. The program is "intended to encourage the raising of new private capital to complement public capital".
* * * * * 18:43 Paulson says US will purchase equity in a broad array of financial firms
In a statement released after talks with finance ministers and central bankers from the G7, Paulson also stresses the importance of international cooperation, noting that the G7 has "finalized an aggressive action plan to address the turmoil in global financial markets and the stresses on financial institutions".
* * * * * Two small US banks fail; brings year's tally to 15
WASHINGTON, Oct 10 (Reuters) - U.S. regulators took over two small banks on Friday, in Michigan and Illinois, bringing the tally of bank failures to 15 so far this year.
The Federal Deposit Insurance Corp. said it had seized Main Street Bank of Northville, Michigan, and Meridian Bank of Eldred, Illinois.
Main Street Bank had total assets of $98 million and total deposits of $86 million as of Oct. 7, the FDIC said, while Meridian Bank had $39.2 million in total assets and $36.9 million in total deposits as of Sept. 25.
The FDIC said it had found acquirers for the deposits of both failed banks. -END- Jesse: SP Long Term Charts Show the Effects of Federal Reserve Adventurism http://jessescrossroadscafe.blogspot.com/2008/10/l
onger-term-sp-charts-show-effects-of.html Jesse: LIBOR has ceased to function as a reliable benchmark suitable for commercial and residential loans.
http://jessescrossroadscafe.blogspot.com/2008/10/us-libor-is-in-backwardation-and.html *** -END- 17:50 STT State Street places restrictions on securities-lending funds reports the WSJ (43.20)
State Street told clients that they would not be allowed to pull out money all at once from the firm's securities-lending funds. The funds, State Street offers at least 4, loan the securities of investors and then manage cash collateral received, they usually invest in various short-term instruments. Clients can still cash out but a portion of their money will now be parked in a separate investment pool run by State Street. Northern Trust (NTRS) and Bank of New York Mellon (BK) have also imposed restrictions on securities lending funds.
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* * * * *
IMF warns of financial meltdown
WASHINGTON/ COLOMBEY-LES-DEUX-EGLISES, France (Reuters) - The IMF warned on Saturday that the global financial system was on the brink of meltdown, while France and Germany pushed ahead with a pan-European crisis response to try to prevent the worst global downturn in decades.
At a joint news conference, French President Nicolas Sarkozy and German Chancellor Angela Merkel said they had "prepared a certain number of decisions" to present at a Sunday meeting of European leaders as they work feverishly to restore blocked credit markets to working order.
The United States appealed for patience, but the International Monetary Fund stressed that time was running short after leading industrialized nations failed to agree on concrete measures to end the crisis at a meeting on Friday.
"Intensifying solvency concerns about a number of the largest U.S.-based and European financial institutions have pushed the global financial system to the brink of systemic meltdown," IMF chief Dominique Strauss-Kahn said….. -END- JIM WILLIE… I got a great source of info who is involved in the current "Post-US World" planning, execution, positioning utterly frightening / jw "some incredibly nasty "S" coming the USDollar is to be killed off, along with the USTreasury Bond it is to follow a plan, already agreed upon numerous global forces concluded and decided to kill off the US entirely since they could not separate the innocent from the crime syndicates they want to surgically cut off the Wall St guys, big bankers, arms dealers, Dept Treasury, a few global bank centers (IMF, WB) and more but they could not determine a method to do so, while sparing the US population SO THEY DECIDED TO KILL OFF THE US a new global currency has been agreed upon, a basket it will be based upon the euro, ruble, yen, dinar notice the dollar and psterling are not included, therefore to become Third World Nations the common factor is that all four come from export surplus nations the dinar will be gold-backed and bring a sudden end to the Petro-Dollar the ruble is expected before long to also be gold-backed, but smaller in scope after Europe is forced to purchase all energy products from Russia in rubles, big changes word has come to me that a global basket will SOON displace the USDollar that will immediately kick the US into the Third Wold the Canadian Dollar will survive ok since demanded to purchase commodities
the Chinese will want to keep it down somewhat, in order to render cheap their commodity bill
gold will be over 2000 by January, silver over 25
the paper gold and paper silver prices are now meaningless
the COMEX is setting up for a metals default
look for defaults in oil, gold, silver, and USTBonds before too many months
absolutely frightening nasty "S" is coming
/ jim Banks Hoarding Cash? (Anecdotal Evidence) Rumor: Bank of America has not settled any wire transfers in my accounts since the 7th. The delays are inexplicable. The delays apply both to incoming transfers that are not being credited and also to outgoing transfers which are being delayed. The anecdotal evidence suggests that the bank is holding incoming cash--refusing to credit money to customer accounts--and at the same time blocking outbound transfers preventing customers from moving money out of the bank. This suggests that they are maximizing the amount of cash that the bank has at the expense of customers.
As you know, banks often impose delays in crediting deposits to customer accounts when a paper check is deposited until the funds clear the issuing bank. These delays are arbitrary and typically exceed the amount of time needed for the interbank transaction to settle, thus the bank holds funds for some period of time before making them available to customers. Obviously, this practice creates a rolling pool of cash on the bank's balance sheet--cash that can be loaned out.
But this has never happened before with wire transfers. When an incoming wire transfer is classified as "pending" for several days without the funds being credited to the account there's something seriously wrong. The interesting question is what happens to "pending" transactions in the bank fails? Are pending transactions covered FDIC, or do these funds simply vanish into thin air?
Ron Now Morgan Stanley Needs "$60 Billion" Of New Equity Henry Blodget
Oct 11, 08 7:32 AM A few days ago, Morgan Stanley was apparently well-capitalized. Then rating agency Egan-Jones said the firm needed $30 billion of new equity. Then Moody's threatened a downgrade. Then the $10 billion Mitsubishi deal seemed ready to fall apart. Now Egan-Jones says Morgan Stanley needs $60 billion.
So what's the real number? Or, more pertinently, what will it be on Monday morning, when Morgan Stanley tries to reopen for business? God only knows.
In any event, Hank Paulson had better get ready to write one hell of a massive check.
Morgan Stanley's current market cap, by the way, is only about $11 billion. So, by all rights, Mitsubishi's $10 billion should buy it one half of the firm (instead of the one-quarter that Mitsubishi agreed to).
If Egan-Jones first estimate of $30 billion is right, Hank will have to write a $20 billion check and Morgan Stanley's current shareholders will end up with one-quarter of their firm. If Egan-Jones's new estimate is right, Hank will have to write a $50 billion check, and Morgan Stanley's current shareholders will end up with 16% of the firm. And that's if the Mitsubishi deal goes through and Hank doesn't demand warrants and a huge preferred dividend for his trouble, which, by all rights, he should. -END- >From Dave in Denver, one of THE BEST out there among those who analyze the financial market scene...
(Bill, I hope you print this because it's very realistic and my numbers are good. My work is, if anything, on the low side because we really need to see the inside books. We know Mitsubishi saw them and ran). The REAL number that Morgan Stanley needs? Morgan Stanley is a walking corpse being kept alive by the hope of a Treasury bailout that will cost $100's of billions. I just did a cursory anlaysis of MS's balance sheet. "Cursory" because their disclosure sucks. But here's a breakdown as per their latest 10-Q: http://www.morganstanley.com/about/ir/shareholder/10q0808/10q0808.pdf They report $420 billion in short term assets and $372 billion in long term investments. Of that: We have no idea what a detailed breakdown of most of the $372 in long term investments look like, but I'm guessing Mitsubishi looked at it and ran. It's probably safe to assume - and I'll ignore the short term investments but rest assured its less than where they carry it. Let's assume the long term stuff needs a 30% markdown. That would be quite generous based on what we're seeing with Lehman's liquidation. A 30% markdown means Morgan Stanley has a $111 biilon asset deficit just with the on-balance-sheet assets. They have a book value of $36 billion. So the net black hole on balance sheet is NEGATIVE $75 billion. Check out the off-balance sheet disclosures: $217 billion in commercial and resi mortgage assets that were transferred off balance sheet because the assessed risk exposure via credit default swaps and other accountning mechanisms was deemed minimal according to GAAP. As we've seen, starting with Enron and moving forward, that's a really bad assumption. They also have $6 trillion in "nominal" derivatives exposure. As we've come to see, "notional" becomes "actual" when there is counter-party default. Lehman, Bear and AIG are terrific examples of $100's of billions of counterparty default exposure. So, is $60 billion enough capital for Morgan Stanley? Looks to me like it's low by several multiples. I'm sure that's why Paulson is looking at nationalizing Morgan Stanley. Does anyone really want their tax money being used to keep Morgan Stanley alive. Just think about your tax money being used to pay huge bonuses to Morgan Stanley employees in a couple months. And guess what? I assure you that Goldman Sachs in right in line behind Morgan Stanley looking for a bailout and I'm sure that's why both of them received the rushed approval by the Fed of bank holding company status. This is going to cost taxpayers trillions. *** 15:40 FT discusses U.S. plans to provide implicit guarantee for bank deposits, debt; possible emergency recapitalization for MS
The FT reports that the US is likely to strengthen its implicit guarantee for all bank deposits and bank debt but stop short of a formal legal guarantee, as it fears that a formal guarantee would be damanging to the non-bank financial sector. The FT noted a comment from Paulson that it said had not been widely reported, in which the Treasury Secretary said that the FDIC would use emergency authorities "as appropriate" to reduce systemic risk by "protecting depositors, protecting unsecured claims, guaranteeing liabilities and adopting other measures to support the banking system". People familiar with the Treasury’s thinking told the FT that the authorities will intervene in the event of looming bank failures as they did in the case of Wachovia to ensure that uninsured depositors and senior debt holders suffer no losses. The FT also notes that in addition to the Fed's plan to provide 3-month funds to banks by purchasing their commercial paper, the Fed and Treasury continue to work on a plan to extend direct, unsecured term loans from the Fed to banks. And while there is pressure to unveil a plan to inject capital directly into banks next week, the FT reports that emergency recapitalization of troubled firms such as Morgan Stanley (MS) could happen more quickly.
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* * * * * China’s Central Bank Denies Plan to Buy U.S. Treasury Bonds Epoch Times
Friday, October 10, 2008
According to a British Broadcasting Corporation (BBC) report, China denied reports that it would buy up to $200 billion worth of U.S. Treasury bonds to partially finance the Bush Administration’s $700 billion rescue package.
Hong Kong’s Ming Pao reported on October 5 that China was going to buy another $200 billion in U.S. Treasury bonds from the financial bailout package, with initial investment fund of $70 to $80 billion.
Bai Li, spokesperson for the People’s Bank of China, said that the central bank has never announced any plan to buy additional U.S. Treasury bonds, according to the Evening Legal. -END- From Dave in Denver again… Jim Dines - and really Ludwig Von Mises - global race to devalue fiat currencies: http://calculatedrisk.blogspot.com/ say "hello" to global hyperinflation and extreme precious metals shortages -END- Bill,
http://www.marketwatch.com/news/story/fannie,br>-freddie-told-buy-40/story.aspx?guid=%7BE12BEB1C%2D85D
5%2D4B43%2D91CD%2DB6A4AB87F630%7D This looks a tad bit inflationary to me!
Cheers
Adrian TOCOM is open tonight. From Mike Ruppert’s commentary on Friday: From here on out I will write under the assumption that those who read me are familiar with Rubicon, the FTW site and its archives, and my videotapes. I'll assume that you already know what GATA is and that you understand all of my/our previous work on gold, intelligence agencies and economics…. I have never seen such a volatile market as I saw today. I saw (maybe there were more) no less than eight swings back and forth between positive and negative in the Dow. Five of them were in the last hour of trading. Up by a hundred then down 800. Then back up to even. Then back down again to -600. And then back and forth by 200-300 pts five times. A key moment, when the Dow was down by 600+ was a sudden drop in the price of gold by around $50 an ounce -- out of nowhere. When that happened, the 600 point loss evaporated to 128 or so points. The continuing blatant manipulation in gold prices is so obvious as to be ludicrous. It is sucking the last bits of cash out there into the markets. GATA has been right all along and I have said so consistently for many years. The panicked sheep who have been"looking at" gold (late, but not too late) will hesitate and leave their money in stocks, blindly believing we have hit the bottom on Wall Street.
There is no bottom until there is CAPITULATION. Today's volatility was anything but CAPITULATION. It looks to me like the violent, last-gasp throes before death which I have seen before in real life.
Capitulation is when the market hits a bottom and just stays there...for days and weeks. When there are no signs of struggle or life. No heartbeat. No thrashing… -END- Bill,
Steve Dore is a good friend, writes some great songs, did a bunch for Ron Paul. Give this a listen.
"Pay Me In Silver and Gold"
Pay_Me.mp3 *** Latest from my friend Dr. Fred Goldstein… Little Treasures, Big Secret -- ***
London calling…
Hi Bill,
What a week this has been. I have been to France, Spain and Switzerland and the mood of gloom is consistent. The real economy is slowing fast and, for example, sales in our business supplying the steel industry are down 35% in September as Arcelor-Mittal have cut production. The car industry and the construction industry in much of Europe are not in great shape. Companies with high debt levels, especially those owned by private equity businesses, face a very challenging time. Banks are quite clearly looking to cut lending wherever possible and many ancillary bank services are getting more expensive; for example, financing shipments of raw materials from Asia or South Africa is becoming a problem for us. The part-nationalisation of most of the UK big banks is going to put their management on the spot with current shareholders likely to lose out; although the alternatives to the rescue were not great either. The full details of the £50 billion scheme for the government to take convertible preference shares are still unclear apart from the clear intention to get rid of some senior bankers such as the CEO of RBS, Sir Fred Goodwin (who is clearly being lined-up to be the number one fall-guy, probably deservedly), block dividends to ordinary shareholders and to get a "good deal" for the tax payer - which presumably will mean a generous coupon on the preference shares and attractive conversion terms. It is going to be fascinating to see how much of this largesse is taken by each bank. Any bank management that fails to take enough government money will be crucified and hence perhaps the truth about their real assessment of their loan books will now come out. The entire rescue scheme is worth £500 billion and includes guarantees to try to reinvigorate the inter-bank lending market. In an economy with a GDP of about £1.6 trillion this really is a big move. I cannot see how we avoid inflation now as here virtually all politicians support pumping money into the system until it is "fixed". One worrying event here has been the use of anti-terrorism legislation by the government to freeze the UK assets of Icelandic banks. Somehow I think these laws will be used a few more times before this mess is sorted out. It seems that many charities and local councils have large sums of cash on deposit with the Icelandic banks and will need government bail-outs if their cash is not returned. These banks had AA ratings until very recently and it is claimed the depositors were encouraged to deposit there by the government. The crisis has resulted in much greater coverage of gold. Even the FT is covering the gold market in more detail and has started to comment on the gap between the prices paid for physical versus the "paper price". The link below is just one piece of the coverage. Can anyone really doubt that there is meddling now? I simply cannot understand the comments of Mr Gartmann that you reported; it now seems as if he is saying he never believed there was intervention in gold by the federal government, but he hopes they are doing so now. I guess it is tough on the ego to market yourself as a guru and not get the fact that the system was on life-support ever since Paulson came into office. http://www.ft.com/cms/s/0/3eaef7ae-972d-11dd-8cc4-000077b07658.html?nclick_check=1 In today's physical FT there is a piece called the Week in Numbers which under the headline $400 has the following to say about gold coins, "At $1,299.99 a piece on Ebay, South African krugerrands were selling at nearly a $400 premium over bullion, now at about $900 an ounce. The US seller describes the one-ounce coins, which were minted between 1970 and 1990, as 'the perfect safe haven from the revages of a government out of control'." Apart from the fact that you are unlikely to be able to get any physical bullion here at $900, the coverage is highlighting the premium to buy your own gold to stash away. There are few gold coins available on the UK Ebay site although you can pick up gold coins at about $1,000 per ounce from some online sellers. I hope you are in good form and enjoy your weekend.
Bob From The MidEast…
Good Morning Bill (from Qatar)
I heard one informed commentator suggest on Bloomberg (London) that, in cases where there are very finite globalized reserves remaining of commodities (eg. oil), then related stocks should start to be valued on the basis of WHAT THEY HAVE LEFT. If this mindset gains traction, BE WITH GOLDFIELDS. On Wednesday ,GFI was "forced" to embrace the rand equivalent Tuesday NY close of ZAR61.56 (amidst the usual flurry of single share trades-which smoke signals I am beginning to understand). On Friday the counter had risen NO LESS THAN 50% to an intra day high of ZAR90. This was facilitated by a trading update that contained no surprises and confirmed the forecast that from QR3 (starting in JAN 09), Goldfields is on course to produce one million ounzes per quarter. Surely a seasoned GATA supporter should not be surprised at gold's (and the PPT's) performance in NY on Friday afternoon. George Bush would not have risked a public address (saying absolutely nothing of substance) unless he was assured of market intervention. Better to do nothing than appear impotent. So predictable, especially given the G7 meetings over this weekend and the Columbus holiday on Monday. There was just no way gold was going into this critical period with a price over $900 and the DOW south of 8000. Anyway, thanks to my GATA training, I did the COUNTER INTUITIVE THING, and sold the trading portion of my GFI investment right at the top of the JSE action on Friday, and hopefully I will repurchase the same shares on Monday morning ,when the JSE initially adopts the NY GFI closing price some 14% lower! Whilst I am a very humble trader, if I am correct about Monday morning, I will have recouped 30 TIMES OVER, in this single little trade, the cost of my recent renewal of my GATA membership. GATA membership empowers its members to read the cartel like a book, which creates some windows of opportunities.
Regards
Nicholas Derek has this one nailed and says, in essence, the way I see it about what’s coming for our beleaguered gold/silver shares… Bill,
There seems to be a lot of conflicting opinion about when the mining shares will take off, and some analysts are even wondering IF they will do so. Here's my two cents: (now worth only about one percent of its value before the creation of the Federal Reserve)...
It is becoming quite clear to all but the most disingenuous that both gold and silver are growing scarce and difficult to obtain in significant quantity. It is also equally clear that the world's fiat money spigots are now full-open and are seriously devaluing the worth of ALL paper currencies, despite the temporary U.S. dollar-bolstering effects that dollar repatriation, unwinding of the yen carry trade, etc. are having on the FOREX markets. The bottom line remains that currency creation is now occurring at lightning speed. Thank heaven for digital computer entries, as they couldn't actually PRINT that much paper if their lives depended on it (and eventually they well might!).
Just in the last couple of weeks, a TRILLION new "dollars" were "created" by Helicopter Ben's injection of $300 Billion into the system, along with Hank "Just Let ME Handle It" Paulson's recent blackmailing of the American public for ANOTHER $700 Billion (I'll happily place a bet that within a few months, or even weeks, these sad hucksters will be back before congress cajoling for even more). I have yet to hear anyone other than Ron Paul even ask the question, "Where did all that new money COME from!??
But getting back to my original point...
So far, the number of investors around the planet who have actually bothered to purchase any REAL gold or silver probably amounts to—and it's just a wild guess—one to two percent. Just looking around my own locale and asking a few questions, I think it's reasonable to estimate that perhaps one or two people in every hundred investors has actually purchased any precious metal for the protection of their wealth. That estimate may be too generous. But who, in an environment of stagflation, which seems to be where we're headed, would be a logical candidate for gold and silver ownership? In my view, it would be everyone on the planet who operates within a fiat currency regime. In other words, the universe of potential precious metals investors equates to several BILLION people. And yet, only a few tens of millions have likely already purchased any.
The obvious conclusion is that when the Great Currency Panic begins in earnest, and I think it probably will as governments everywhere mimic America's policy of bailing out the rich elitists while sticking citizens with the tab— in our case let's call it "Robbing Peter to Pay Paulson"—then there simply won't BE enough gold and silver to satisfy the geometrically exploding demand. This doesn't require any prophetic prowess on my part, of course, since there's ALREADY not enough gold and silver to satisfy demand. And the demand has only just begun to ramp up.
So where will the average Joe, being late to the investment party as usual, turn to invest in gold and silver? To the companies that OWN it, is my reply. To the mining companies with proven in-ground reserves. In short, it will be the actual PHYSICAL SUPPLY situation that will drive investors into the mining sector. This correlates precisely to your prediction for several years now that it would be the physical off-take of supply that would eventually overwhelm the gold cartel and see them carried off on stretchers. So it all revolves around the actual metal and the relentlessly increasing demand. When investors can't find the real McCoy, they'll turn to the next logical thing: mining companies.
One last point. I've read some talk on message boards that because of the dismal failure of mining companies lately to protect investor wealth, more and more people will choose to invest in the gold and silver ETFs as a proxy for the metals,instead of opting to invest in mining companies directly. But that begs the question:
in an environment of extremely tight supply, where will the metal- hungry ETFs procure their own metal supply? Once again, we're back to the mining companies. They're the ones sitting on the world's remaining in-ground supplies of gold and silver, and if the price of their underlying product is soaring, then their EARNINGS will be soaring, too. And in a bear market and stagnant economy, nothing gets an investor's attention like solid earnings. So unless it really IS different this time, it seems reasonable to expect that at some point investors will once again pay attention to the precious metals mining sector. When they begin doing this in mass, ofcourse, prices will likely already be several multiples higher than they are.
Derek V. Bill H: To all; there is currently more and more talk about "revamping" or changing the system. I believe the problem or root cause of the current panic is that no currency on the planet can be trusted. The only way for "trust" to be restored is to restore confidence in the various currencies. As I have mentioned before, I believe the world's Central Banks will turn toward a Gold backing of their currencies. This will be vehemently opposed by the U.S. because I believe we have been liquidating our Gold reserves for years now and have precious little left. The solution to the current malaise is really not rocket science by any stretch of the imagination. There will be bankruptcies and wipeouts on a massive scale. Currencies will need to be withdrawn and replaced. Savings will be converted to these new currencies at a specified ratio. Gold will need to be massively revalued, possibly 100 to 1000 fold. This sounds crazy...it is not. I do not believe we will ever see convertibility of currency to Gold as there is simply not enough bullion available. BUT, and this is a huge but, ALL CENTRAL BANKS RESERVES WILL BE SUBJECT TO AUDIT. What an amazing con job the whole world has swallowed since 1956. 1956 was the last year the U.S. Treasury conducted an audit of its Gold. We didn't provide an audit and no one demanded one. The population hasn't demanded one because we as a nation have slowly been dumbed down to the point of stupidity when it comes to money and finance. None of our trading partners demanded an audit because we had the "big stick", the most powerful military on the planet. No one wanted to stand up to the bully in the 1960's-early 80's and demand an audit. The US had too much market share globally, and any "squeaky wheels" would be isolated and bankrupted. Then came the early 1980's to present. No one asked for an audit because the Dollar had become so widespread and permeated every Central Bank on the planet. Gold had been displaced by Dollars as the foundation of the worlds currencies. No one wanted an audit for fear what it might uncover. What would happen if the US didn't have the Gold as claimed? Who in their right mind would want to rock the boat while things seemed to be going along smoothly? Life was good so why shoot yourself in the head? So along we went, the world just kept accumulating more and more Dollars. The US was happy to supply as many as the world demanded. Free money! What a great concept. Then the Dollar started to lose value back in 1996. It was losing value because we kept cranking out $ Billions out of thin air. To mask the over supply, the Clinton administration [Tres. sec. Rubin] decided to break the thermometer and artificially suppress Gold's price by secretly selling our reserves into the market. And here we are today. The Gold is gone. The world knows that the Gold is gone, they know that their reserves of Dollars are mushy and worthless. The world now has no other choice than to revalue its Gold to previously unimaginable levels and use this newly revalued Gold as the reserves for their currencies. As I see it, this is the only option available to the rest of the world. If the US does have Gold in amounts as claimed, then we can move forward with the world. This final option of recapitalizing the banking system will be brutally painful. The financial system will be basically starting over from scratch, BUT starting over with a solid foundation that will mete out punishment to any Central Bank that over issues money supply based on their AUDITED Gold reserves. If the US does not have the Gold as claimed, God help us as we will be run over, left behind and left for dead. Just one more thought about the audit process. Just as we want to "verify" weapons production in other countries, the rest of the world will not accept an audit signed off and verified by the Three Stooges [you know who they are]. The world will want real proof since lack of proof, trust, confidence, etc. has gotten us to the stage of panic we are currently witnessing. I think this line of thinking is currently being discussed between global leaders as the current system cannot be fixed. This has clearly been the failure of another "fiat experiment". Fiat has never worked before and it was an abject failure once again. The world will soon vote with their capital and the incumbent is unelectable. This solution of revaluing Gold reserves has been used many times in the past, this is not new and revolutionary thinking. We don't need rocket science, just a solid foundation. Regards, Bill H. It’s no time to let governments get away with Hitleresque thinking. It is time to beat The Gold Cartel at their own game. 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MIDAS AppendixA view of the day… Hi Bill:
Glad the markets are closed for a little while.
I've noticed an alarming final trend towards my old book's stated premise of the predators "owning the earth in fee simple." I had no idea in the past on how they could possibly pull that off. Now it looks easy.
It looks like the Cartel's efforts to keep their thumb on metal prices will continue to make miners' stock cheaper. Since the Cartel control the banks, the miners can't get funds to produce, becoming sitting ducks for these financial predators. Taking TITLE to many of the mines would easily cover their shorts, would it not? Probably buying what's left with the taxpayers' money.
I've watched closely what they've done to NovaGold recently.
That's for the mines, and below for countries.
For how this would work, here's what they did to Iceland, just for Alcoa.
10/10/2008 - LIVE DEMO: Iceland Devoured
at http://GreatRedDragon.com
These "chessboard" countries are following closely on its heels.
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3174217/Financial-crisis-Countries-at-risk-of-bankruptcy-from-Pakistan-to-Baltics.htmlhttp://www.telegraph.co.uk/finance/financetopics/
financialcrisis/3174217/Financial-crisis-Countries-at-risk-of-bankruptcy
-from-Pakistan-to-Baltics.html
Financial crisis: Countries at risk of bankruptcy from Pakistan to Baltics A string of countries face the risk of "going bust" as financial panic sweeps Asia, Eastern Europe, and Latin America, raising the spectre of a strategic crisis in some of the world's most dangerous spots. By Ambrose Evans-Pritchard And like the little picture on my home page that you've seen before, there's little joy in being right. Thanks for all your efforts and good works!
Respectfully,
Edward Ulysses Cate LePatron, ROLL CALL!!!! Its roll call time to roll-over your rolls of coinage to help defeat the CARTEL and their collusive government MINTS. Come on gang, lets take them on collectively, and take the CARTEL down. Here is how coin holders can help. On Friday I traded 400 Au eagles for 32 1000oz JM comex Ag bars, and in so doing, sucked up some comex bars, that are now off market as I hold long, while providing 400 Au eagles, so that even the little guys, can continue to pick up eagles, who can not afford the bigger bars. In doing this kind of exchange with the dealers, and if repeated by others, we bugs can get more eagles out there to be snatched up by joe six-pack in 1 oz increments, yet also force a draw down of available big comex bars that will eventually help lead to a comex default. So, I would recommend now that premiums are highs and availability limited in coinage, to swap coinage for big bars, and bring down The House of Crimex through a cafe roll call.
Derrick Hey Bill, I just want to say thanks for the last 10 years of your writing the truth about what is going on, I was called back to active duty with the navy after 9/11, my father passed away in 2002, I had to take care of my parents financials, so I was looking to where I could invest their money and I came across your site and made a wise choice, I read and listen to you and David Morgan, I bought silver when a box of 500 silver eagles ran around $3700, that was a great investment. what really has me floored is what our gov't has done to us, I've had to sell my investment to make ends meet like everyone else, the cartel has driven down the mining stocks and bullion to where I can't sell anything without taking a big loss. The average person who has debt but still has good credit can't get a loan, can't get a refi on their mortgage and now will go under. All the while top executives get their 20 million for 3 weeks of pay and for lying to the public,all is just ok in mainstreet land than to to find out 2 weeks later they have gone bust, where is sarbains oxley reform bill for these big JERKS, big corporations get bailed out for lying and cheating and the public will get the shaft at the end, We live in interesting times, James
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-- Posted Monday, 13 October 2008 | Digg This Article | Source: GoldSeek.com
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