Gold World News Flash

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• Two Profitable, Undervalued Gold Stocks With Low Put/Call Ratios
• Gold Continues to Drop; Silver Firm, Broad Based Commodities Strong
• In The News Today
• FOFOA: Who is draining GLD? Probably giants who want metal
• REGRESSION TO THE MEAN
• Market Update: Wk 172 after the October 2007 Top Bear Signs on Wall Street!
• Money's not worth the paper it's printed on
• Elite Desperation Over Failing Middle East Psyops... Obama is a Socialist
• Saudi Stock Exchange Plummets 6%
• Barron's Roundtable Wrapup
• Gold, Oil and the Contrarian Mindset
• Kitco News reports on GATA's lawsuit seeking Fed's gold records
• Silver Liberation Army and the Global Insurrection Against Banker Occupation reaches Saudi Arabia
• When Gold Bullion Fails
• MUST READ
• Silver futures trading has nothing to do with metal's real price, Sprott says
• Silver shortage, bond market manipulation figure in metals wrap at KWN
• Tracking The Gold "Conspiracy" - GATA's Must Read Presentation To The Cheviot Asset Management Sound Money Conference
• You Can No Longer Invest with Carl Estep
• Germany promised U.S. in 1967 not to convert dollars to gold
• ‘Miners Challenge’ Entering the Home-Stretch
• Friday's Panic in the SP500 and Gold Futures
• “We had to go into the market and buy about 15 million net ounces from third parties and it took us about ten weeks. It was a very, very long process and the one thing we can read out of it is obviously there weren’t 15 million ounces sitting around
• Kathryn A Derbes CFA on FS: ‘Yes, if everyone demanded their Silver it would' referring to the Crash JP Morgan Buy Silver campaign (23:00)
• FX Charts That Matter: The Screaming EURUSD Spot-2 Year Fwd Swap Spread Convergence Trade
• Welcome, ‘Peak Oil’
• Did The Market Top Out on Friday?
• Gold Chart - This Is What I Thought Was Probably Going To Happen Ex Egypt
• A Buying Opportunity In Gold?
• Bet on gold nets Paulson $5 billion
• Gold and Silver Progress Report
• Debt and Deficits, “The New Humpty Dumpty”
• Gold Short-Term Rally?
• Who is Draining GLD?
• Stay Focused Gold Investors
• Silver Supply Shortage?
• Gold, It's Time to Buy
• Silver Futures Market Developments, Commitment of Traders Report
• Great Gold, Silver & Green Investment Opportunities Arise
• If Metals Decline After a Rise in Stocks, What Would Happen If Stocks Declined?

Two Profitable, Undervalued Gold Stocks With Low Put/Call Ratios Posted: 29 Jan 2011 07:55 PM PST Kapitall submits: This is a follow-up to a list we generated a few days ago (Top 15 Most Undervalued Gold Stocks by Analyst Target Price). In that list we identified gold stocks that are deeply undervalued, when comparing the current price to the average analyst target price (used as a proxy for fair value). Complete Story »

Gold Continues to Drop; Silver Firm, Broad Based Commodities Strong Posted: 29 Jan 2011 06:54 PM PST MyPlanIQ submits: Gold (GLD) is again under pressure: On Thursday it went under its 130-day simple moving average and recovered Friday just above the moving average. Silver (SLV) recovered strongly Friday and eked out a 1.75% gain for the week. GLD is now 6.3% off its peak while SLV is now 9.5% off its recent peak. The broad based commodity index (DBC), on the other hand, is at 52-week high after Friday's market close. For more performance details, refer here. The trend table for commodities shown below indicates that silver (SLV), agriculture (DBA), broad based commodities (DBC) and energy (DBE) are at the top spots. GLD remains close to the bottom, along with oil (USO) and natural gas (UNG). Complete Story »

In The News Today Posted: 29 Jan 2011 05:51 PM PST View the original post at jsmineset.com... January 29, 2011 02:51 PM Dear CIGAs, On Friday we found out the supply on the Comex and hammering of gold was primarily the product of an undisciplined hedge fund trader who got caught in an outrageously large spread while heavily under-financed. We also learned the problems in Egypt have become a lot more serious than many anticipated. Gold had two drivers Friday. Those drivers were the clear fact that the supply in gold was an aberration that drew the chart and yes, Egypt, but that was not fully appreciated. Egypt is Iran and the Shah revisited. That is extremely serious. The Egyptian Unrest: A Special Report January 29, 2011 | 2207 GMT Egyptian President Hosni Mubarak remains the lifeblood of the demonstrators, who still number in the tens of thousands in downtown Cairo and in other major cities, albeit on a lesser scale. After being overwhelmed in the Jan. 28 Day of Rage protests, Egypt's internal security forces — with the a...

FOFOA: Who is draining GLD? Probably giants who want metal Posted: 29 Jan 2011 12:22 PM PST 1:20a GMT Sunday, January 30, 2011 Dear Friend of GATA and Gold: Blogger FOFOA yesterday offered some brilliant observations about the gold exchange-traded fund GLD -- foremost among them that, far from being negative for gold, the liquidation of large amounts of GLD shares on any particular day is likely actually an indication of vast demand for gold by "giants" in amounts so large that they can be obtained by only by converting GLD shares to metal. FOFOA quotes financial letter writer Lance Lewis' stunning observation that large disgorgements of GLD shares have corresponded closely with important gold price lows that have quickly been reversed. FOFOA's commentary is headlined "Who Is Draining GLD?" and you can find it at his blog here: http://fofoa.blogspot.com/2011/01/who-is-draining-gld.html CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. ADVERTISEMENT Prophecy Resource Spins Off Platinum/Palladium Venture: World-Class PGM Deposit in Yukon Company Press Release, January 18, 2011 VANCOUVER, British Columbia -- Prophecy Resource Corp. (TSX-V:PCY)and Pacific Coast Nickel Corp. announce that they have agreed that PCNC will acquire Prophecy's Nickel PGM projects by issuing common shares to Prophecy. PCNC will acquire the Wellgreen PGM Ni-Cu and Lynn Lake nickel projects in the Yukon Territory and Manitoba respectively by issuing up to 550 million common shares of PCNC to Prophecy. PCNC has 55.7 million shares outstanding. Following the transaction: -- Prophecy will own approximately 90 percent of PCNC. -- PCNC will consolidate its share capital on a 10 old for one new basis. -- Prophecy will change its name to Prophecy Coal Corp. and PCNC will be renamed Prophecy Platinum Corp. -- Prophecy intends to distribute half of its PCNC shares to shareholders pro-rata in accordance with their holdings. Based on the closing price of the common shares of PCNC on January 17, $0.195 per share, the gross value of the transaction is $107,250,000. For the complete announcement, please visit: http://prophecyresource.com/news_2011_jan18.php Join GATA here: Phoenix Investment Conference and Silver Summit Renaissance Glendale Hotel and Spa Friday-Saturday, February 18-19, 2011 Glendale, Arizona http://cambridgehouse3.com/conference-details/phoenix-investment-confere... Support GATA by purchasing a colorful GATA T-shirt: http://gata.org/tshirts Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: http://www.goldrush21.com/ Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit, Extending the Mineralization of the Southwest Vein on the Property Company Press Release, October 27, 2010 VANCOUVER, British Columbia -- Sona Resources Corp. reports on five drillling holes in the third round of assay results from the recently completed drill program at its 100 percent-owned Elizabeth Gold Deposit Property in the Lillooet Mining District of southern British Columbia. Highlights from the diamond drilling include: -- Hole E10-66 intersected 17.4g gold/ton over 1.54 metres. -- Hole E10-67 intersected 96.4g gold/ton over 2.5 metres, including one assay interval of 383g of gold/ton over 0.5 metres. -- Hole E10-69 intersected 85.4g gold/ton over 4.03 metres, including one assay interval of 230g gold/ton over 1 metre. Four drill holes, E10-66 to E10-69, targeted the southwestern end of the Southwest Vein, and three of the holes have expanded the mineralized zone in that direction. The Southwest Vein gold mineralization has now been intersected over a strike length of 325 metres, with the deepest hole drilled less than 200 metres from surface. "The assay results from the Southwest Zone quartz vein continue to be extremely positive," says John P. Thompson, Sona's president and CEO. "We are expanding the Southwest Vein, and this high-grade gold mineralization remains wide open down dip and along strike to the southwest." For the company's full press release, please visit: http://sonaresources.com/_resources/news/SONA_NR19_2010.pdf

REGRESSION TO THE MEAN Posted: 29 Jan 2011 11:53 AM PST All markets are subject to the forces of regression. Newton's basic laws of motion; Action and reaction. At current levels both the S&P and Nasdaq 100 are stretched further above the 200 day moving average that virtually any other time in  the last 10 years. Not surprisingly the further a market stretches in one direction the harder it snaps back in the other once the law of regression to the mean gets it's hooks into the market. The Fed is exacerbating this process with their constant meddling in the markets. The flood of liquidity unleashed by Greenspan and Bernanke from 2002 to 2007 in the vain attempt to abort the bear market was directly responsible for creating the conditions that led to the market crash of 08/09. The rally in April was pushed much higher than it would normally go by the forces unleashed during QE1. The end result; the correction when it finally came was much more severe than it would have been normally, even including a mini-crash in May. QE2 has now driven the market even further above the mean than in April. Unless the law of action and reaction has been repealed we should see an extreme regression to the mean event . Personally I believe the Fed has put into place the conditions that will bring about the end of this cyclical bull market and usher in the next leg down in the secular bear.  During the next 3 months we should see the dollar begin to collapse down into the 3 year cycle low unleashing the currency crisis we've been expecting. This will drive a massive surge in inflationary pressure that will poison the fragile recovery and send the global economy back down into the next recession. A recession that should be even greater than the last Great Recession as it will begin with economic conditions much weaker than in 07. The last time the Fed did this it produced a brief period of prosperity lasting about 5 years (and a real estate and credit bubble). This time I expect the party to last two years tops, which means this cyclical bull should top by March. And the price we will pay when the house of cards comes crashing down again will be multiples more expensive than last time. This posting includes an audio/video/photo media file: Download Now

Market Update: Wk 172 after the October 2007 Top Bear Signs on Wall Street! Posted: 29 Jan 2011 11:25 AM PST Mark J. Lundeen [EMAIL="Mlundeen2@Comcast.net"]Mlundeen2@Comcast.net[/EMAIL] 28 January 2011 I wasn't going to write an article this week, but then Mr Bear began inciting riots in the Middle East, and there are visible signs of distress on Wall Street. So what the heck, after today's action in Gold & Silver, and the stock markets, I might as well do an update on some key indicators I used in my Bear Market Reports from October 2008 to August 2009. My readers can review them here. Gold & Silver's BEV Charts After today's explosive gains in the gold and silver markets, the question that should be on everyone's mind is whether or not the metals have found a bottom in this recent * MINOR * price correction, before going on to new all-time highs later this year. And yes, the declines of January were minor in every sense of the word. But investors would not have KNOWN that listening to the financial media. This is one of the reasons I urge people to turn off ...

Money's not worth the paper it's printed on Posted: 29 Jan 2011 11:14 AM PST "Bet on Gold Nets Paulson $5 Billion.Peru Mines Ministry reports declines in gold, silver production. The Fed Is Now In The Business Of Manipulating The Stock Market: James Grant...and much more. " Yesterday in Gold and Silver All in all, it was pretty quiet in Far East and London trading on Friday...and the gold price was basically unchanged when trading in New York began at 8:20 a.m. Eastern time. Gold got sold off about seven bucks from that point...but minutes before 9:30 a.m...a fairly impressive rally began that lasted until a few minutes after noon. During that time period, the gold price tacked on a bit over $35 before the buyer disappeared. From Friday's high of $1,348.30 spot, the gold price gave up a bit going into the close of trading at 5:15 p.m. Eastern time. After expecting the worst, I was delighted with yesterday's pleasant turn of events. Who the buyer might have been when the gold price is below the 50-day moving average, is open to deba...

Elite Desperation Over Failing Middle East Psyops... Obama is a Socialist Posted: 29 Jan 2011 11:06 AM PST Elite Desperation Over Failing Middle East Psyops Saturday, January 29, 2011 – by Anthony Wile Once again, the power elite manipulates the Middle East for its own gain. It is a dangerous game, especially in Egypt, which controls the Suez Canal. Because of the violence, gold is up and oil, too. And just as I finish writing this article, the UK Telegraph has released an extraordinary story. It claims that the United States leadership not only secretly backed the current uprisings in Egypt, it was actively aiding and abetting the protestors. Hello rewrite! "America's secret backing for rebel leaders behind uprising," the article reads. It explains that The American Embassy in Cairo helped a young dissident attend a US-sponsored summit for activists in New York. "On his return to Cairo in December 2008, the activist told US diplomats that an alliance of opposition groups had drawn up a plan to overthrow President Hosni Mubarak and install a democratic...

Saudi Stock Exchange Plummets 6% Posted: 29 Jan 2011 10:43 AM PST Not many exchanges are open on Saturday. But the one that matters in a contagionary light sure was. And the drubbing it took was not pretty. "Saudi Arabia's stock exchange tumbled by over 6 percent on Saturday, setting the stage for other regional markets to drop as concerns mounted about the violent protests in Egypt. The Tadawul All Shares Index fell 6.44 percent to close at 6,267 points. The market in Saudi Arabia, where the start of the work week is Saturday, was the first to react to the violence in Egypt and the drop in the TASI offered a window into the potential battering that could emerge when other regional markets reopen on Sunday. On the Saudi market, there were no gainers as investors sold off holdings. Hit hard was Sabic, one of the world's largest petrochemical companies and the largest publicly traded firm on the exchange. Sabic's shares fell 8 percent, closing at 97.75 Saudi riyals." And this is just the beginning. If there are any further rumors (or confirmed sighting) of protests in Jeddah and elsewhere, regional markets will go bidless, oil will go offerless, GETCO and other NYSE SLPs will go bankrupt in their attempt to keep the stock market alive, and Bernanke will just go, once the entire world realizes that Genocide Ben, which is what ZH has been calling him for quite a while now, is really much more appropriate an appellation for the man who gives a bad name to helicopters. From the AP: "The fall is due to sentiment about what's happening in Egypt, and also in the US because the Dow went down" on Friday, said John Sfakianakis, chief economist at the Riyadh-based Banque Saudi Fransi-Credit Agricole Group. "You have some collateral damage which is related to investors .... who have exposure in Egypt, and are trying to hedge that exposure by selling down their positions in Saudi Arabia," he said. Egypt's stocks exchange canceled its start-of-week session on Sunday, and the country's banks were to remain closed following the weekend, Egyptian state television reported. Some banks in Cairo had been looted on Saturday as the violence entered its fifth day. The protesters have demanded President Hosni Mubarak's ouster and measures to deal with the crippling poverty in the country, rampant corruption and the growing disparity in income distribution. The rioting — inspired by similar protests in Tunisia two weeks earlier — prompted Mubarak to ask his cabinet to step down. But that move appears unlikely to significantly allay the anger of Egyptians who argue that the 82-year-old leader of the Arab world's most populous nation is sorely out of touch with their daily lives. The violence sent Egypt's benchmark index tumbling almost 17 percent over two days ending Thursday, and analysts expect that the unrest will fuel another plunge both in Egypt and in regional markets which are slated to reopen on Sunday. "The momentum is there," said Sfakianakis, predicting that regional markets drop. "There's no reason to expect the Saudi market to go up because the general sentiment is sell-off and wait- and-see rather than sell-off and immediate buying," he said. On the other hand, once Ben sends his plunge prevention emissaries to Saudi, and the exchange starts the same endless  meltup only reserved for the US stock market, at least the silver lining will be that Chinese fraud companies, about 99% of them, will commence IPOing in Mecca and finally force the US housewife momo chasers to go cold turkey on 100x beta stocks that only trade up on short covering sprees.

Barron's Roundtable Wrapup Posted: 29 Jan 2011 08:19 AM PST The portfolio managers convene on January 10th to discuss their top picks. The editors at Barron’s dispense these musing over three weeks. This edition continues previous themes around Gold and other commodities. This makes one wonder if the gold’s recent downdraft is just a pause that refreshes. Continue reading for a summary of the last of the three installments from this year’s roundtable. Meryl Witmer – the recent run-up in the market has made it hard to find bargains. She and her team are looking for companies emerging from bankruptcy. Out of the blocks she surprisingly recommends a specialty chemicals company once owned by KKR and now trades for a free cash-flow multiple of 12. Returning to the original script, she recommends Tronox (TROXV), a manufacturer of titanium dioxide, which is emerging from bankruptcy. Next up is Six Flags (SIX) – more flags, more fun! She believes SIX, emerging from bankruptcy, is worth 12x earnings. Her last pick out of bankruptcy protection is Spansion (CODE), a flash memory producer which is trading at approximately 6.5x after tax cash flow. Marc Faber – all paper currencies are doomed and WWIII has already started. His theme is LNG. As oil demand turned up and when we have war, prices will go up substantially. He notes that China and the US have little in common beyond commercial interests. As China is a supporter of North Korea and the Taliban, he wants to be hedged in case of complete disaster. His strategy is to buy commodities when supply is abundant (and cheap)…then wait. He is also likes physical gold but says you shouldn’t own it in America where the government could take it away. He likes a few gold miners and sees opportunities in water, fertilizer and potash. He believes Asia has run up, but you could still find a basket of shares yielding 5% and trading at 10x earnings. While he is bearish on currencies, he is not as bearish as some on the US Dollar. In an interesting twist, he recommends a basket of Swiss insurance stocks he thinks are trading at attractive valuations. Mario Gabelli – looking for divestitures and break-ups (carrying on a theme I wrote about earlier). Gabelli likes a lot of stocks, I will only cover a few here. He starts with Genuine Parts (NYSE: GPC), with the average age of cars increasing the stock could see continued earnings growth. More on the natural gas theme, he likes Natural Fuel Gas (NYSE: NFG) as a way to play shale. On the break-up theme, he likes Fortune Brands (NYSE: FO) which announced it is splitting in three. He thinks the spirits business could go for 12x EBITDA. Another pick that is close to home (at least for me) is Madison Square Garden (NYSE: MSG). The company has a high value cable network and it is spending $800 million to renovate the Garden – in addition to owning the Knicks and Rangers. His play on the recovery of the industrial world is Thomas & Betts (NYSE: TNB) which is in the energy efficiency business. The stock trades at 6.5x projected EBITDA. Finally, he mentions a gold related stock – Brink’s (NYSE: BCO). BCO specializes in global logistics for the movement of precious metals and cash.   Oscar Schafer – seeking companies that have a catalyst. Schafer likes companies that have gone public post LBO because their management knows how to maintain costs, they tend to have low tax rates (due to the stepped up basis) and generate lots of free cash flow. First up is Sensata Technologies (NYSE: ST). Formerly part of Texas Instruments (NYSE: TI), the sensor and control maker went public in March. The company has significant exposure to the auto industry. As auto sales recover, this should be additive to the company. Schafer also sees growth in its China business as the country ratchets up its standards. Once again on the spin-off theme, he recommends NXP Semiconductors (NASDAQ: NXPI) which was spun out of Philips Electronics (NYSE: PHG) and taken private. NXPI, a maker of high-performance mixed-signal solutions and semi-conductors, went public in August. In December, Google (NASDAQ: GOOG) announced it was designing the NXP standard into its latest Android platform. NXPI trades at a single digit earnings multiple. Anyone who has rented a car is familiar with his next pick – Hertz Global Holdings (NYSE: HTZ). Taken private in 2005 and back public in 2006, he believes the company is poised to take advantage of the recovery in the rental car market. The stock also trades at a single digit earnings multiple. Schafer is calling for 50%-100% upside in Quantum (NYSE: QTM), a small cap company focused on enterprise computing software. A market leader with a single digit multiple, the QTM should benefit from dislocation in the market created by Oracle’s (NASDAQ: ORCL) acquisition of Sun Microsystems. His final pick is Mako Surgical (NASDAQ: MAKO). Schafer believes the aging demographic and competition among hospitals to increase patient volumes should drive growth. Short interest is 25% of the float – the shorts worry that the high upfront costs of the company’s robot will hinder sales and the stock trades at 7x REVENUE. Schafer isn’t concerned because revenues are growing north of 50%.

Gold, Oil and the Contrarian Mindset Posted: 29 Jan 2011 08:00 AM PST

Kitco News reports on GATA's lawsuit seeking Fed's gold records Posted: 29 Jan 2011 07:10 AM PST 8p GMT Saturday, January 29, 2011 Dear Friend of GATA and Gold: Kitco News reports this weekend about GATA's lawsuit against the Federal Reserve in U.S. District Court for the District of Columbia, which seeks access to the Fed's gold records. You can find the story here: http://www.kitco.com/reports/KitcoNews20110128CT_focus.html CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. ADVERTISEMENT Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit, Extending the Mineralization of the Southwest Vein on the Property Company Press Release, October 27, 2010 VANCOUVER, British Columbia -- Sona Resources Corp. reports on five drillling holes in the third round of assay results from the recently completed drill program at its 100 percent-owned Elizabeth Gold Deposit Property in the Lillooet Mining District of southern British Columbia. Highlights from the diamond drilling include: -- Hole E10-66 intersected 17.4g gold/ton over 1.54 metres. -- Hole E10-67 intersected 96.4g gold/ton over 2.5 metres, including one assay interval of 383g of gold/ton over 0.5 metres. -- Hole E10-69 intersected 85.4g gold/ton over 4.03 metres, including one assay interval of 230g gold/ton over 1 metre. Four drill holes, E10-66 to E10-69, targeted the southwestern end of the Southwest Vein, and three of the holes have expanded the mineralized zone in that direction. The Southwest Vein gold mineralization has now been intersected over a strike length of 325 metres, with the deepest hole drilled less than 200 metres from surface. "The assay results from the Southwest Zone quartz vein continue to be extremely positive," says John P. Thompson, Sona's president and CEO. "We are expanding the Southwest Vein, and this high-grade gold mineralization remains wide open down dip and along strike to the southwest." For the company's full press release, please visit: http://sonaresources.com/_resources/news/SONA_NR19_2010.pdf Join GATA here: Phoenix Investment Conference and Silver Summit Renaissance Glendale Hotel and Spa Friday-Saturday, February 18-19, 2011 Glendale, Arizona http://cambridgehouse3.com/conference-details/phoenix-investment-confere... Support GATA by purchasing a colorful GATA T-shirt: http://gata.org/tshirts Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: http://www.goldrush21.com/ Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT Prophecy Resource Spins Off Platinum/Palladium Venture: World-Class PGM Deposit in Yukon Company Press Release, January 18, 2011 VANCOUVER, British Columbia -- Prophecy Resource Corp. (TSX-V:PCY)and Pacific Coast Nickel Corp. announce that they have agreed that PCNC will acquire Prophecy's Nickel PGM projects by issuing common shares to Prophecy. PCNC will acquire the Wellgreen PGM Ni-Cu and Lynn Lake nickel projects in the Yukon Territory and Manitoba respectively by issuing up to 550 million common shares of PCNC to Prophecy. PCNC has 55.7 million shares outstanding. Following the transaction: -- Prophecy will own approximately 90 percent of PCNC. -- PCNC will consolidate its share capital on a 10 old for one new basis. -- Prophecy will change its name to Prophecy Coal Corp. and PCNC will be renamed Prophecy Platinum Corp. -- Prophecy intends to distribute half of its PCNC shares to shareholders pro-rata in accordance with their holdings. Based on the closing price of the common shares of PCNC on January 17, $0.195 per share, the gross value of the transaction is $107,250,000. For the complete announcement, please visit: http://prophecyresource.com/news_2011_jan18.php

Silver Liberation Army and the Global Insurrection Against Banker Occupation reaches Saudi Arabia Posted: 29 Jan 2011 07:08 AM PST Protests Spread To Saudi Arabia MK: I was listening to Webster Tarpley's breakdown of events in the region and he seems to be think that the U.S. is behind these revolts. I have a lot of respect for Tarpley and appreciate his wealth of knowledge and comprehensive understanding of history, but I have to disagree [...]

When Gold Bullion Fails Posted: 29 Jan 2011 06:49 AM PST Call it "diversification" if you must, but Gold Bullion tends to do badly when other assets go up... read more

MUST READ Posted: 29 Jan 2011 06:47 AM PST Tracking The Gold "Conspiracy" – GATA's Must Read Presentation To The Cheviot Asset Management Sound Money Conference MK: This presentation was one of the highlights of the conference. To hear the whole timeline of the GATA story put things into prospective . . . and it's quite chilling to see how blatant the manipulation has [...]

Silver futures trading has nothing to do with metal's real price, Sprott says Posted: 29 Jan 2011 06:39 AM PST 7:37p GMT Saturday, January 29, 2011 Dear Friend of GATA and Gold (and Silver): Interviewed by King World News this week, Sprott Asset Management CEO Eric Sprott discusses, among many things, the silver shortage, worldwide food shortages and inflation, and the likely massive gold offtake caused by millions of new retail gold accounts at banks in China. Regarding silver, Sprott says "99.9 percent" of daily silver futures trading has nothing to do with the physical market. The interview is about 18 minutes long and you can listen to it at King World News here: http://kingworldnews.com/kingworldnews/Broadcast/Entries/2011/1/29_Eric_... CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. ADVERTISEMENT Prophecy Resource Spins Off Platinum/Palladium Venture: World-Class PGM Deposit in Yukon Company Press Release, January 18, 2011 VANCOUVER, British Columbia -- Prophecy Resource Corp. (TSX-V:PCY)and Pacific Coast Nickel Corp. announce that they have agreed that PCNC will acquire Prophecy's Nickel PGM projects by issuing common shares to Prophecy. PCNC will acquire the Wellgreen PGM Ni-Cu and Lynn Lake nickel projects in the Yukon Territory and Manitoba respectively by issuing up to 550 million common shares of PCNC to Prophecy. PCNC has 55.7 million shares outstanding. Following the transaction: -- Prophecy will own approximately 90 percent of PCNC. -- PCNC will consolidate its share capital on a 10 old for one new basis. -- Prophecy will change its name to Prophecy Coal Corp. and PCNC will be renamed Prophecy Platinum Corp. -- Prophecy intends to distribute half of its PCNC shares to shareholders pro-rata in accordance with their holdings. Based on the closing price of the common shares of PCNC on January 17, $0.195 per share, the gross value of the transaction is $107,250,000. For the complete announcement, please visit: http://prophecyresource.com/news_2011_jan18.php Join GATA here: Phoenix Investment Conference and Silver Summit Renaissance Glendale Hotel and Spa Friday-Saturday, February 18-19, 2011 Glendale, Arizona http://cambridgehouse3.com/conference-details/phoenix-investment-confere... Support GATA by purchasing a colorful GATA T-shirt: http://gata.org/tshirts Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: http://www.goldrush21.com/ Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit, Extending the Mineralization of the Southwest Vein on the Property Company Press Release, October 27, 2010 VANCOUVER, British Columbia -- Sona Resources Corp. reports on five drillling holes in the third round of assay results from the recently completed drill program at its 100 percent-owned Elizabeth Gold Deposit Property in the Lillooet Mining District of southern British Columbia. Highlights from the diamond drilling include: -- Hole E10-66 intersected 17.4g gold/ton over 1.54 metres. -- Hole E10-67 intersected 96.4g gold/ton over 2.5 metres, including one assay interval of 383g of gold/ton over 0.5 metres. -- Hole E10-69 intersected 85.4g gold/ton over 4.03 metres, including one assay interval of 230g gold/ton over 1 metre. Four drill holes, E10-66 to E10-69, targeted the southwestern end of the Southwest Vein, and three of the holes have expanded the mineralized zone in that direction. The Southwest Vein gold mineralization has now been intersected over a strike length of 325 metres, with the deepest hole drilled less than 200 metres from surface. "The assay results from the Southwest Zone quartz vein continue to be extremely positive," says John P. Thompson, Sona's president and CEO. "We are expanding the Southwest Vein, and this high-grade gold mineralization remains wide open down dip and along strike to the southwest." For the company's full press release, please visit: http://sonaresources.com/_resources/news/SONA_NR19_2010.pdf

Silver shortage, bond market manipulation figure in metals wrap at KWN Posted: 29 Jan 2011 06:09 AM PST 7:08p GMT Saturday, January 29, 2011 Dear Friend of GATA and Gold (and Silver): The weekly precious metals review at King World News finds Bill Haynes of CMI Gold and Silver reporting in detail on the severe shortage in large silver bars, and JSMineSet.com's Dan Norcini commenting on the upward manipulation of the government bond market by the Federal Reserve. Norcini also remarks that he expects gold to be returned to an official role in the world's monetary system. The interviews are about 20 minutes long altogether and you can listen to them at King World News here: http://kingworldnews.com/kingworldnews/Broadcast/Entries/2011/1/29_KWN_W... Or try this abbreviated link: http://tinyurl.com/4obrv5a CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. ADVERTISEMENT Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit, Extending the Mineralization of the Southwest Vein on the Property Company Press Release, October 27, 2010 VANCOUVER, British Columbia -- Sona Resources Corp. reports on five drillling holes in the third round of assay results from the recently completed drill program at its 100 percent-owned Elizabeth Gold Deposit Property in the Lillooet Mining District of southern British Columbia. Highlights from the diamond drilling include: -- Hole E10-66 intersected 17.4g gold/ton over 1.54 metres. -- Hole E10-67 intersected 96.4g gold/ton over 2.5 metres, including one assay interval of 383g of gold/ton over 0.5 metres. -- Hole E10-69 intersected 85.4g gold/ton over 4.03 metres, including one assay interval of 230g gold/ton over 1 metre. Four drill holes, E10-66 to E10-69, targeted the southwestern end of the Southwest Vein, and three of the holes have expanded the mineralized zone in that direction. The Southwest Vein gold mineralization has now been intersected over a strike length of 325 metres, with the deepest hole drilled less than 200 metres from surface. "The assay results from the Southwest Zone quartz vein continue to be extremely positive," says John P. Thompson, Sona's president and CEO. "We are expanding the Southwest Vein, and this high-grade gold mineralization remains wide open down dip and along strike to the southwest." For the company's full press release, please visit: http://sonaresources.com/_resources/news/SONA_NR19_2010.pdf Join GATA here: Phoenix Investment Conference and Silver Summit Renaissance Glendale Hotel and Spa Friday-Saturday, February 18-19, 2011 Glendale, Arizona http://cambridgehouse3.com/conference-details/phoenix-investment-confere... Support GATA by purchasing a colorful GATA T-shirt: http://gata.org/tshirts Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: http://www.goldrush21.com/ Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT Prophecy Resource Spins Off Platinum/Palladium Venture: World-Class PGM Deposit in Yukon Company Press Release, January 18, 2011 VANCOUVER, British Columbia -- Prophecy Resource Corp. (TSX-V:PCY)and Pacific Coast Nickel Corp. announce that they have agreed that PCNC will acquire Prophecy's Nickel PGM projects by issuing common shares to Prophecy. PCNC will acquire the Wellgreen PGM Ni-Cu and Lynn Lake nickel projects in the Yukon Territory and Manitoba respectively by issuing up to 550 million common shares of PCNC to Prophecy. PCNC has 55.7 million shares outstanding. Following the transaction: -- Prophecy will own approximately 90 percent of PCNC. -- PCNC will consolidate its share capital on a 10 old for one new basis. -- Prophecy will change its name to Prophecy Coal Corp. and PCNC will be renamed Prophecy Platinum Corp. -- Prophecy intends to distribute half of its PCNC shares to shareholders pro-rata in accordance with their holdings. Based on the closing price of the common shares of PCNC on January 17, $0.195 per share, the gross value of the transaction is $107,250,000. For the complete announcement, please visit: http://prophecyresource.com/news_2011_jan18.php

Tracking The Gold "Conspiracy" - GATA's Must Read Presentation To The Cheviot Asset Management Sound Money Conference Posted: 29 Jan 2011 05:45 AM PST Submitted by GATA The Cheviot Asset Management Sound Money Conference The Guildhall, London Thursday, January 27, 2011 Most Americans will believe almost anything if it's said with a British accent. I'm not here to ask you to return the favor, but rather to consider some evidence, to be receptive to questions, and to start asking some questions of your own. In September 2009 Jim Rickards, director of market intelligence for the Omnis consulting firm in Virginia, was interviewed about the currency markets on the cable television network CNBC. Rickards remarked: "When you own gold you're fighting every central bank in the world." That's because gold is a currency that competes with government currencies and has a powerful influence on interest rates and the value of government bonds. This was documented in an academic study published in 1988 in the Journal of Political Economy by Lawrence Summers, then professor of economics at Harvard, future U.S. treasury secretary, and Robert Barsky, professor of economics at the University of Michigan -- a study titled "Gibson's Paradox and the Gold Standard": http://www.gata.org/files/gibson.pdf This close correlation among gold, interest rates, and government bond values is why central banks long have tried to control -- usually suppress -- the price of gold. Gold is the ticket out of the central banking system, the escape from coercive central bank and government power. As an independent currency, a currency to which investors can resort when they are dissatisfied with government currencies, gold carries the enormous power to discipline governments, to call them to account for their inflation of the money supply and to warn the world against it. Because gold is the vehicle of escape from the central bank system, the manipulation of the gold market is the manipulation that makes possible all other market manipulation by government. Of course what Jim Rickards said about gold was no surprise to my organization, the Gold Anti-Trust Action Committee. To the contrary, what Rickards said has been our premise for most of our 12 years, and we have documented it extensively. But while the gold price suppression scheme is a hard fact of history, it is seldom mentioned in polite company in the financial world. So it is a thrill for me that everyone here today is being so polite. How have central banks tried to suppress the price of gold? The gold price suppression scheme was undertaken openly by governments for a long time prior to 1971. That's what the gold standard was about -- governments fixing the price of gold to a precise value in their currencies, a price at which governments would exchange their currencies for gold, currencies backed by gold. Though the gold standard was abandoned during World War I, restored briefly in the 1920s, and then abandoned again during the Great Depression, that was not the end of government efforts to control the gold price. Throughout the 1960s the United States, Great Britain, and some of their allies attempted to hold the price at $35 per ounce in a public arrangement of the dishoarding of U.S. gold reserves. This arrangement was known as the London Gold Pool. As monetary inflation rose sharply, the London Gold Pool was overwhelmed by gold demand and was shut down abruptly in April 1968. Three years later, in 1971, the United States repudiated the remaining convertibility of the dollar into gold -- convertibility for government treasuries that wanted to exchange dollars for gold. At that moment currencies began to float against each other and against gold -- or so the world was told. In fact since 1971 the gold price suppression scheme has been undertaken largely surreptitiously, seldom acknowledged officially. But sometimes it has been acknowledged officially, and with a little detective work, still more about the price suppression can be discovered. You may have heard GATA derided as a "conspiracy theory" organization. We are not that at all. To the contrary, we examine the public record, produce documentation, question public officials, publicize their most interesting answers, or their most interesting refusals to answer, and sometimes litigate to get information. I'd like to review some of the public record with you. The official records The gold price suppression scheme was a matter of public record in January 1995, when the general counsel of the U.S. Federal Reserve Board, J. Virgil Mattingly, told the Federal Open Market Committee, according to the committee's minutes, that the U.S. Treasury Department's Exchange Stabilization Fund had undertaken gold swaps. Gold swaps are exchanges of gold allowing one central bank to intervene in the gold market on behalf of another central bank, potentially giving anonymity to the central bank that wants to undertake the intervention. The 1995 Federal Open Market Committee minutes in which Mattingly acknowledges gold swaps are still posted at the Fed's Internet site: http://www.federalreserve.gov/monetarypolicy/files/FOMC19950201meeting.p... The gold price suppression scheme was again a matter of public record in July 1998, six months before GATA was formed, when Federal Reserve Chairman Alan Greenspan told Congress: "Central banks stand ready to lease gold in increasing quantities should the price rise." That is, Greenspan contradicted the usual central bank explanation for leasing gold -- supposedly to earn a little interest on a dead asset -- and admitted that gold leasing is all about suppressing the price. Greenspan's admission is still posted at the Fed's Internet site: http://www.federalreserve.gov/boarddocs/testimony/1998/19980724.htm Incidentally, while gold advocates love to cite Greenspan's testimony from 1998 because of its reference to gold leasing, that testimony was mainly about something else, for which it is far more important. For with that testimony Greenspan persuaded Congress not to regulate the sort of financial derivatives that lately have devastated the world financial system. The Washington Agreement on Gold, made by the European central banks in 1999, was another admission -- no, a proclamation -- that central banks were working together to control the gold price. The central banks in the Washington Agreement claimed that, by restricting their gold sales and leasing, they meant to prevent the gold price from falling too hard. But even if you believed that explanation, it was still collusive intervention in the gold market. You can find the Washington Agreement and its successor agreements at the World Gold Council's Internet site: http://www.reserveasset.gold.org/central_bank_agreements/cbga1/ Barrick Gold, then the largest gold-mining company in the world, confessed to the gold price suppression scheme in U.S. District Court in New Orleans on February 28, 2003. That is when Barrick filed a motion to dismiss Blanchard & Co.'s anti-trust lawsuit against Barrick and its bullion banker, JPMorganChase, for rigging the gold market. Barrick's motion claimed that in borrowing gold from central banks and selling it, the mining company had become the agent of the central banks in the gold market, and, as the agent of the central banks, Barrick should share their sovereign immunity and be exempt from suit. Barrick's confession to the gold price suppression scheme is posted at GATA's Internet site: http://www.gata.org/files/BarrickConfessionMotionToDismiss.pdf The Reserve Bank of Australia confessed to the gold price suppression scheme in its annual report for 2003. "Foreign currency reserve assets and gold," the Reserve Bank's report said, "are held primarily to support intervention in the foreign exchange market." The Reserve Bank's report is still posted at its Internet site: http://www.rba.gov.au/publications/annual-reports/rba/2003/pdf/2003-repo... Maybe the most brazen admission of the Western central bank scheme to suppress the gold price was made by the head of the monetary and economic department of the Bank for International Settlements, William S. White, in a speech to a BIS conference in Basel, Switzerland, in June 2005. There are five main purposes of central bank cooperation, White announced, and one of them is "the provision of international credits and joint efforts to influence asset prices (especially gold and foreign exchange) in circumstances where this might be thought useful." White's speech is posted at GATA's Internet site: http://www.gata.org/node/4279 Two years ago a remarkable 16-page memorandum was found in the archive of the late Federal Reserve Chairman William McChesney Martin. The memorandum is dated April 5, 1961, and is titled "U.S. Foreign Exchange Operations: Needs and Methods." It is a detailed plan of surreptitious intervention to rig the currency and gold markets to support the dollar and to conceal, obscure, or falsify U.S. government records and reports so that the rigging might not be discovered. Amazingly, this plan for rigging the currency and gold markets remains on the Internet site of the Federal Reserve Bank of St. Louis: http://fraser.stlouisfed.org/docs/historical/martin/23_06_19610405.pdf In August 2009 the international journalist and provocateur Max Keiser reported an interview he had with the Bundesbank, Germany's central bank, in which he was told that all of Germany's gold reserves were held in New York. That interview is posted at the YouTube Internet site: http://www.youtube.com/watch?v=EzVhzoAqMhU Some people saw the Bundesbank's admission as a suggestion that Germany's gold had become the tool of the U.S. government. GATA consultant Rob Kirby of Kirby Analytics in Toronto then pressed the Bundesbank for clarification. The Bundesbank quickly replied to Kirby by e-mail with a denial of Keiser's report, but the denial was actually pretty much a confirmation: http://www.gata.org/node/7713 "The Deutsche Bundesbank," the reply said, "keeps a large part of its gold holdings in its own vaults in Germany, while some of its gold is also stored with the central banks located at major gold trading centers. This," the Bundesbank continued, "has historical and market-related reasons, the gold having been transferred to the Bundesbank at these trading centers. Moreover, the Bundesbank needs to hold gold at the various trading centers in order to conduct its gold activities." The Bundesbank did not specify those "gold activities" and those "trading centers." But those "activities" can mean only that the Bundesbank is or recently has been surreptitiously active in the gold market, perhaps at the behest of others -- like the United States, the custodian of German gold. A few weeks ago the German journalist Lars Schall, at GATA's urging, pressed the Bundesbank for clarification about the German gold reserves, and particularly about whether the Bundesbank had undertaken gold swaps with any U.S. government agency. Schall sent the Bundesbank 13 questions. But the Bundesbank brushed him off, even as it seemed to acknowledge meddling surreptitiously in the gold market: http://www.gata.org/node/9363 The Bundesbank replied: "In managing foreign reserves, the Bundesbank fulfils one of its mandated tasks as an integral part of the European System of Central Banks. We trust you will understand that we are not able to divulge any further information regarding this activity. Particularly with respect to the confidential nature of information about where gold holdings are kept, we are unable to go into any greater detail concerning exact locations and the quantities stored at each of these. Likewise, owing to the strategic nature of the activity, we are not at liberty to provide you with more detailed information about gold transactions." In 2009 a New York financial market professional and student of history, Geoffrey Batt, posted at the Zero Hedge Internet site three declassified U.S. government documents involving the gold market. The first was a long cable dated March 6, 1968, sent by someone named Deming at the U.S. Embassy in Paris to the State Department in Washington. It has been posted at the Zero Hedge Internet site: http://www.zerohedge.com/article/declassified-state-dept-data-highlights... The cable described the strains on the London Gold Pool, the gold-dishoarding mechanism established by the U.S. Treasury and the Bank of England to hold the gold price to the official price of $35 per ounce. The London Gold Pool was to last only six months longer. The cable is a detailed speculation on what would have to be done to control the gold price and particularly to convince investors "that there is no point anymore in speculating on an increase in the price of gold" and "to establish beyond doubt" that the world financial system "is immune to gold losses" by central banks. The cable recommended creation of a "new reserve asset" with "gold-like qualities" to replace gold and prevent gold from gaining value. To accomplish this, the cable proposed "monthly or quarterly reshuffles" of gold reserves among central banks -- what the cable called a "reshuffle club" that would apply gold where market intervention seemed most necessary. Of course these "reshuffles" sound very much like the central bank gold swaps and leases of recent years. The idea, the cable says, is for the central banks "to remain the masters of gold." Also disclosed in 2009 by Zero Hedge's Geoffrey Batt was a memorandum from the Central Intelligence Agency dated December 4, 1968, several months after the collapse of the London Gold Pool. This too has been posted at the Zero Hedge Internet site: http://www.zerohedge.com/article/cia-chimes-gold-control-highlights-hist... The CIA memo said that to keep the dollar strong and prevent "a major outflow of gold," U.S. strategy would be: "-- To isolate official from private gold markets by obtaining a pledge from central banks that they will neither buy nor sell gold except to each other." And: "-- To bring South Africa to sell its current production of gold in the private market, and thus keep the private price down." The third declassified U.S. government document published by Geoffrey Batt at Zero Hedge in 2009 may be the most interesting, because it was written on June 3, 1975, four years after the last bit of official fixed convertibility of the dollar and gold had been eliminated and the world had been told that currencies henceforth would float against each other and against gold and that gold would be free-trading. The document is a seven-page memorandum from Federal Reserve Board Chairman Arthur Burns to President Gerald Ford. It is all about controlling the gold price through foreign policy and defeating any free market for gold. It has been posted at GATA's Internet site: http://www.gata.org/files/FedArthurBurnsOnGold-6-03-1975.pdf Burns tells the president: "I have a secret understanding in writing with the Bundesbank, concurred in by Mr. Schmidt" -- that's Helmut Schmidt, West Germany's chancellor at the time -- "that Germany will not buy gold, either from the market or from another government, at a price above the official price of $42.22 per ounce." Burns adds, "I am convinced that by far the best position for us to take at this time is to resist arrangements that provide wide latitude for central banks and governments to purchase gold at a market-related price." While the Burns memo is consistent with the long-established interest of central banks in controlling the gold price, it was written 36 years ago. But there is a contemporaneous admission of U.S. government intervention in the gold market. It has come out of GATA's long Freedom of Information Act struggle with the U.S. Treasury Department and Federal Reserve for information about the U.S. gold reserves and gold swaps, information that has been denied to GATA on the grounds that it would compromise certain private proprietary interests. (Of course such a denial, a denial based on private proprietary interests, is in itself a suggestion that the U.S. gold reserve has been placed, at least partly, in private hands.) Responding to President Obama's declaration, soon after his inauguration, that the federal government would be more open, GATA renewed its informational requests to the Fed and the Treasury. These requests concentrated on gold swaps. Of course both requests were denied again. But through its Washington lawyer, William J. Olson (http://www.lawandfreedom.com), GATA brought an appeal of the Fed's denial, and this appeal was directed to a full member of the Fed's Board of Governors, Kevin M. Warsh, formerly a member of the President's Working Group on Financial Markets, nicknamed the Plunge Protection Team. Warsh denied GATA's appeal but in his letter to our lawyer he let slip some stunning information: http://www.gata.org/files/GATAFedResponse-09-17-2009.pdf Warsh wrote: "In connection with your appeal, I have confirmed that the information withheld under Exemption 4" -- that's Exemption 4 of the Freedom of Information Act -- "consists of confidential commercial or financial information relating to the operations of the Federal Reserve Banks that was obtained within the meaning of Exemption 4. This includes information relating to swap arrangements with foreign banks on behalf of the Federal Reserve System and is not the type of information that is customarily disclosed to the public. This information was properly withheld from you." So there it is: The Federal Reserve today -- right now -- has gold swap arrangements with "foreign banks," and the public and the markets must not be permitted to know about them. Eight years ago Fed Chairman Alan Greenspan and the general counsel of the Federal Open Market Committee, Virgil Mattingly, vigorously denied to GATA, through two U.S. senators who had inquired of the Fed on our behalf, that the Fed had gold swap arrangements, even though FOMC minutes from 1995 quote Mattingly as saying the U.S. has engaged in gold swaps: http://www.gata.org/node/1181 But now the Fed has admitted such arrangements, if only inadvertently. GATA subsequently sued the Fed in U.S. District Court for the District of Columbia to gain access to the documents involved. That suit is pending. Central banks are out of control There is a reason for the Fed's insistence that the public and the markets must not know what the Fed is doing in the gold market. It is because, as the documents compiled and publicized by GATA suggest, suppressing or controlling the gold price is part of the general surreptitious rigging of the currency, bond, and commodity markets by the U.S. and allied governments; because this market rigging is the foremost objective of U.S. foreign and economic policy; and because this rigging cannot work if it is exposed and the markets realize that they are not really markets at all. This should not be so surprising. For intervening in markets is what central banks do.. They have no other purpose. They've just gotten out of control. Central banks often admit intervening in the currency markets, buying and selling their own currencies and those of other governments to maintain exchange rates at what they consider politically desirable levels. Central banks admit doing the same in the government bond markets. There is even evidence that the Federal Reserve and Treasury Department, through intermediaries, have been intervening frequently in the U.S. stock markets since the crash of 1987. You do not have to settle for rumors about the "Plunge Protection Team," the President's Working Group on Financial Markets. Again you can just look at the public record. The Federal Reserve injects billions of dollars into the stock and bond markets every week, on the public record, through the major New York financial houses, its so-called primary dealers in federal government bonds, using what are called repurchase agreements and the Fed's Primary Dealer Credit Facility. The financial houses thus have become the Fed's agents in directing that money into the markets. As GoldMoney's James Turk notes, the recent rise in the U.S. stock market matches almost exactly the money funneled by the Fed to the New York financial houses t

You Can No Longer Invest with Carl Estep Posted: 29 Jan 2011 05:34 AM PST A short break from The Best of the Bozeman Police Reports will be observed here today in order to share a local story about a man with barrels of gold-bearing ore, fraudulent assay reports, and a pocket full of investors' money now on his way to jail, his court case popping up in the local paper on a number of occasions recently before coming to a welcomed conclusion the other day. The details are in this report at the Bozeman Daily Chronicle. A Belgrade man was sentenced in a Missoula federal court Thursday to four years in prison and three years supervised release in conjunction with his gold and platinum trading scheme, the U.S. Attorney's Office said. U.S. District Judge Donald W. Molloy also ordered Carl Lawrence Estep, 66, to pay nearly $1.5 million in restitution. Estep previously pleaded guilty to charges of wire and mail fraud. Prosecutors were prepared to prove that Estep wooed potential investors using "singles dating websites," and "by claiming that he used to work for the Howard Hughes Corporation and operated their mining division," Assistant U.S. Attorney Ryan M. Archer said in a written statement released Thursday afternoon. "The scheme defrauded numerous investors out of significant amounts of money by promising them large returns from overseas investments that were allegedly realized by leveraging 'gold ore' as collateral for overseas trading," Archer said. Shortly after moving to the Gallatin Valley from Las Vegas in 2003, Estep convinced a Belgrade man to allow him to store 200 barrels of rock and sand in his barn. Estep told the man the barrels contained large amounts of gold or platinum and used a forged document from a metals analysis company to bolster his claim. Now, I don't know about you, but I don't think I'd be much convinced to cut a check to a man using barrels of rock and sand as collateral for overseas trading. I don't know what it is, but something about that just doesn't sound right. Of course, he had paperwork that attested to the precious metals content of the barrels and apparently told a good story about a successful career in the mining industry including his highly unusual form of compensation. He enticed investors by telling them the Howard Hughes Corp. paid him "in barrels of gold ore that was worth millions" and often provided the forged assessment report as proof, prosecutors said. Estep also claimed to own a gold refinery in Montana and to be developing additional ones. He invited investors to invest in the gold barrels and refinery operations, telling them their money would be used for business operating expenses such as security guards for the precious metals and refinery infrastructure, the statement said. He promised investors their money would be returned in full within six months. When that didn't happen, Estep "made elaborate excuses as to why they could not be paid," claiming the Department of Homeland Security had "tied the money up overseas due to terrorist-related activities around the world," Archer said. Meanwhile, Estep used the money for cars, overseas travel, daily expenses "and unreasonably large expenses on his hunting dogs," Archer wrote. Estep never worked for the Howard Hughes Corp. Analysis of the barrels' contents found no gold. "It would be more profitable to use the rock and sand as road grade rather than attempt to extract any gold," prosecutors said. The investigation was a cooperative effort between the FBI and the Criminal Investigation Division of the Internal Revenue Service. What amazes me most is that anyone dumb enough to place their confidence in Estep would have any money to invest to begin with. What is that old saying about a fool and his money being separated? For anyone disappointed with Estep's story, the link to the Bozeman Police Reports is here.

Germany promised U.S. in 1967 not to convert dollars to gold Posted: 29 Jan 2011 05:30 AM PST By Lars Schall Saturday, January 29, 2011 Thanks to GATA consultant Dimitri Speck and U.S. economist James K. Galbraith, a copy of the so-called Blessing letter, written on March 30, 1967, can be published for the first time on the Internet. The letter's text refutes the widespread assumption among German gold bugs that the letter promised the U.S. government that the German central bank, the Bundesbank, would never relocate the German gold reserve from New York to Germany as long as U.S. troops were stationed in Germany. The letter has nothing to do with the location of the German gold reserve. Instead, the letter, written by the Bundesbank's president at the time, Karl Blessing, and sent to the then-chairman of Board of Governors of the U.S. Federal Reserve System, William McChesney Martin Jr., made this important promise on behalf of the Bundesbank: "By refraining from dollar conversions into gold from the United States Treasury, the Bundesbank has intended to contribute to international monetary cooperation and to avoid any disturbing effects on the foreign exchange and gold markets. You may be assured that also in the future the Bundesbank intends to continue this policy and to play its full part in contributing to international monetary cooperation." ... Dispatch continues below ... ADVERTISEMENT Prophecy Resource Spins Off Platinum/Palladium Venture: World-Class PGM Deposit in Yukon Company Press Release, January 18, 2011 VANCOUVER, British Columbia -- Prophecy Resource Corp. (TSX-V:PCY)and Pacific Coast Nickel Corp. announce that they have agreed that PCNC will acquire Prophecy's Nickel PGM projects by issuing common shares to Prophecy. PCNC will acquire the Wellgreen PGM Ni-Cu and Lynn Lake nickel projects in the Yukon Territory and Manitoba respectively by issuing up to 550 million common shares of PCNC to Prophecy. PCNC has 55.7 million shares outstanding. Following the transaction: -- Prophecy will own approximately 90 percent of PCNC. -- PCNC will consolidate its share capital on a 10 old for one new basis. -- Prophecy will change its name to Prophecy Coal Corp. and PCNC will be renamed Prophecy Platinum Corp. -- Prophecy intends to distribute half of its PCNC shares to shareholders pro-rata in accordance with their holdings. Based on the closing price of the common shares of PCNC on January 17, $0.195 per share, the gross value of the transaction is $107,250,000. For the complete announcement, please visit: http://prophecyresource.com/news_2011_jan18.php Speck, author of the German-language book "Geheime Goldpolitik" ("Secret Gold Politics," about which more information is available at http://www.gata.org/node/9349), puts the Blessing letter in context: "In 1967 the Americans and British threatened to reduce their troops in West Germany on account of the cost. Because of the Cold War, West Germany wanted to avoid a reduction in military forces but didn't want to pay more for those forces. Part of the resolution of the issue was the Blessing letter, which confirmed Germany's waiver of conversion of dollars into gold. Thus Germany, like other countries, bought security by accumulating dollar claims as foreign-exchange reserve. "The right of governments to convert dollars into gold from the U.S. Treasury was canceled by the U.S. government in 1971. But four years earlier the Blessing letter affirmed the formal renunciation of the largest dollar holder, Germany, of conversions of dollars into gold. The letter was thus an essential step toward the global dollar standard, which was recognized already by the U.S. government and communicated in internal documents." The Blessing letter is archived at the Lyndon B. Johnson Presidential Library in Austin, Texas. Because of his research, Speck gave the decisive encouragement for its publication here. Galbraith, a professor at the University of Texas in Austin and author of "The Predator State," gave the decisive help in obtaining a copy of the letter. The Blessing letter can be viewed at GATA's Internet site here: http://www.gata.org/files/BundesbankLetter-03-30-1967.pdf An article in German about this discovery has been published simultaneously at the German Internet site Goldseiten here: http://www.goldseiten.de/content/diverses/artikel.php?storyid=15325 And at the German Internet site Infokriegernews here: http://www.infokriegernews.de/wordpress/2011/01/29/der-mysterioese-brief... ----- Lars Schall is a freelance journalist based in Germany. * * * Join GATA here: Phoenix Investment Conference and Silver Summit Renaissance Glendale Hotel and Spa Friday-Saturday, February 18-19, 2011 Glendale, Arizona http://cambridgehouse3.com/conference-details/phoenix-investment-confere... Support GATA by purchasing a colorful GATA T-shirt: http://gata.org/tshirts Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: http://www.goldrush21.com/ Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit, Extending the Mineralization of the Southwest Vein on the Property Company Press Release, October 27, 2010 VANCOUVER, British Columbia -- Sona Resources Corp. reports on five drillling holes in the third round of assay results from the recently completed drill program at its 100 percent-owned Elizabeth Gold Deposit Property in the Lillooet Mining District of southern British Columbia. Highlights from the diamond drilling include: -- Hole E10-66 intersected 17.4g gold/ton over 1.54 metres. -- Hole E10-67 intersected 96.4g gold/ton over 2.5 metres, including one assay interval of 383g of gold/ton over 0.5 metres. -- Hole E10-69 intersected 85.4g gold/ton over 4.03 metres, including one assay interval of 230g gold/ton over 1 metre. Four drill holes, E10-66 to E10-69, targeted the southwestern end of the Southwest Vein, and three of the holes have expanded the mineralized zone in that direction. The Southwest Vein gold mineralization has now been intersected over a strike length of 325 metres, with the deepest hole drilled less than 200 metres from surface. "The assay results from the Southwest Zone quartz vein continue to be extremely positive," says John P. Thompson, Sona's president and CEO. "We are expanding the Southwest Vein, and this high-grade gold mineralization remains wide open down dip and along strike to the southwest." For the company's full press release, please visit: http://sonaresources.com/_resources/news/SONA_NR19_2010.pdf Attachment Size BundesbankLetter-03-30-1967.pdf 41.38 KB This posting includes an audio/video/photo media file: Download Now

‘Miners Challenge’ Entering the Home-Stretch Posted: 29 Jan 2011 05:17 AM PST For those readers who have been following the SilverGoldBull Miners Challenge since it began in October, things are finally starting to get "interesting". As everyone knows, the latest round of banker bullion-bashing has caused a pull-back in the sector – with signs toward the end of the week that we have finally found a bottom following this latest "ambush". At the same time, with the end of January near (and a short month ahead), we are now 2/3 of the way through our contest. Not unexpectedly, the pull-back in the miners has caused the standings to tighten. While Clint009's pick (South American Silver) is still in the lead (+ 187.50%), his margin has shrunk – while some of the other "contenders" flip-flop their positions. Marcocruces' pick (Great Panther Silver) has slipped to 3rd position (+ 116.67%), while BringTheGold's entry (Arian Silver) has surged into 2nd place (+ 143.33%). In case there are newer readers who don't know what all the "fuss" is about, here is a review of the contest. Members were asked to choose the gold or silver miner whom they expected to perform the best (in percentage terms) over the contest period (Oct/10 – Mar/11). But they certainly aren't doing this just for the "glory". Our generous contest sponsor, SilverGoldBull.com has made things interesting by donating gold bullion prizes to be awarded to our winners, as follows: 1st prize: (1) 1-oz gold coin 2nd prize: (1) ½-oz gold coin 3rd prize: (1) ¼-oz gold coin Halfway leader:  (1) ¼-oz gold coin Alert readers will note that over our contest period the silver miners have been giving the gold miners a good "spanking", with all three of our leaders coming from the silver sector. This has much less to do with "underperformance" by the gold miners, and much more to do with the fact that not only has silver outperformed gold over recent months, but prior to that, valuations for the silver miners were certainly stingier than for the gold miners. As the silver miners "catch up" to the gold miners in terms of their relative value, this sets the stage for a much more interesting cycle in the market in the months ahead – as gold and silver prices appear set to rebound, while the relative parity between the miners makes it a toss-up as to which half of the precious metals sector will put in the strongest performance over the next few months. For those readers/members who missed out on our first Miners Challenge, rest assured that we plan on repeating our contest this fall – so don't miss out on your next opportunity to "bring home the gold" by picking the best-performing miner. Those in the contest should check our forum for the latest (full) contest standings – which have been updated regularly courtesy of another one of our members. With 2/3 of the contest now completed, we would like to thank all of those members who participated, and thank SilverGoldBull.com (once again) for their continued sponsorship of our member contests (and a "thank you" to SilverCaper for your regular updates of the standings). Full list of contestants, and their picks:

Friday's Panic in the SP500 and Gold Futures Posted: 29 Jan 2011 05:10 AM PST Mr. Market has thrown traders a few curve balls lately as precious metals and crude oil have been selling off while the U.S. Dollar Index futures were consolidating. Additionally, the volatility index has been very choppy and was indicating that ... Read More...

“We had to go into the market and buy about 15 million net ounces from third parties and it took us about ten weeks. It was a very, very long process and the one thing we can read out of it is obviously there weren’t 15 million ounces sitting around Posted: 29 Jan 2011 04:56 AM PST Eric Sprott – Expect $50 Silver, Gold Possibly $2,150 by Spring Share this:

Kathryn A Derbes CFA on FS: ‘Yes, if everyone demanded their Silver it would' referring to the Crash JP Morgan Buy Silver campaign (23:00) Posted: 29 Jan 2011 04:53 AM PST Kathryn A Derbes CFA MK: I would hate to be one of Puplava's clients. He doesn't seem to understand how to read a balance sheet. But I think these comments are driven more by fear that fact. Obviously, if you're a white guy living in San Diego kowtowing to Big Paper is understandable. Additionally, you [...]

FX Charts That Matter: The Screaming EURUSD Spot-2 Year Fwd Swap Spread Convergence Trade Posted: 29 Jan 2011 04:21 AM PST Goldman's John Noyce once again confirms that he is the signal to Thomas Stolper's endless noise (pun intended). After Goldman did its traditional flip flop yesterday on the EURUSD, Noyce has been steadfast in his position on where he sees the euro. Indeed while Stolper was chasing the bouncing ball, and recommending every nano-uptick, and bailing the second there was a more than 10 pip pullback, Noyce actually has had some actionable long-term advice. That said, with Noyce's report coming out on Thursday ahead of Friday's EURUSD rout, he did provide some critical resistance pivots that appear to have been sustained, and it seems the interim top in the EURUSD is now fully in place even based on technicals (as for fundamentals, should the North Africa crisis jump across the Suez and hit Jordan, Syria or Saudi, watch as the scramble to cover dollar carry shorts goes into overdrive). Technically speaking, the 61.8% retrace resistance from November of 1.3740 has held and it appears there is much downside from here, with firm support in the low 1.30s, and possibly as low as a the January 1.28 lows. On the other hand the spread between spot and the 2 Year EURUSD forward continues to be very wide. Without taking a directional bet, a convergence between the two legs would certainly seem like an attractive trade for those who can put it on. Yet one trade which appears like a slam dunk here is a compression between the EURJPY and its 2 year swap spreads. The divergence is several 6 sigma intervals wide, and is a screaming compression trade here. Full presentation from John Noyce Charts That Matter 1.28

Welcome, ‘Peak Oil’ Posted: 29 Jan 2011 04:00 AM PST The day of reckoning is approaching and the world does not have a contingency plan. The truth is that the world's output of conventional crude oil peaked in 2005 and global oil exports are also past their prime. Furthermore, the unconventional sources (tar sands, heavy sour crude, ethanol, natural gas liquids, bio-fuels and shale) are struggling to keep up with the ongoing depletion in the world's largest oil fields. Therefore, it is probable that the world's current production of total liquids is at or near maximum capacity. Veteran clients and subscribers will recall that we have been extremely concerned about 'Peak Oil'. However, for many years, ours was one of the lone voices in the dark. It is interesting to observe that up until 2007, various government sponsored energy agencies were extremely optimistic about their oil production forecasts. In fact, before it commissioned its first field by field analysis in 2008, the IEA used to claim that the world could easily produce over 110 million barrels of total liquids per day! Ironically, other agencies such as CERA and the EIA were even more liberal with their oil production projections and 'Peak Oil' was dismissed as a lunacy. Thereafter, in November 2008, the IEA released its World Energy Outlook 2010 report, which contained a thorough analysis of the world's 800 largest oil fields. In this study, the IEA admitted (for the first time) that most of the world's largest oil fields are depleting at a rapid clip and serious capital spending is essential to avoid an energy crunch in 2020. Although this report was a step in the right direction, in our view, the IEA was still painting an unrealistic picture. Fortunately, it has taken the IEA only two years to realise its mistake and its latest World Energy Outlook 2010 report presents a far more realistic scenario. According to its latest study, the IEA now expects global total liquids production to increase to just 96 million barrels per day by 2035! Bearing in mind the fact that the world currently produces 88 million barrels of total liquids per day, the IEA is now essentially implying that output will only increase by 9% over the next 25 years! It is notable that in 2009, the IEA stressed the importance of oil for economic growth and concluded that 106 million barrels per day will be required by 2030; representing an increase of approximately 18 million barrels per day above current output. Interestingly, in last year's report, the IEA predicted that global production will peak at only 96 million barrels per day in 2035! So, within the course of a single year, the energy watchdog for the developed world lowered its production estimate by 10 million barrels per day! To complicate matters further, the IEA's latest forecast of 96 million barrels per day of peak production depends on the assumption of finding an extra 900 billion barrels of oil over the next 25 years! However, given the fact that over the recent past, we have managed to discover only 10 billion barrels of oil each year, we cannot help but take the IEA's rosy forecast with a pinch of salt. Call us skeptics, but at the current rate of discovery, it will take us 90 years to discover 900 billion barrels of oil. Yet, the IEA somehow believes that this task can be accomplished by 2035! The chart below is taken from the IEA's World Energy Outlook 2010 report and it does a good job of capturing the sorry state of affairs. As you can see, the IEA now expects the output from the currently producing fields (dark blue area on the chart) to drop from approximately 70 million barrels per day to only 16 million barrels per day by 2035. Furthermore, the IEA also believes that 60% of oil production in 2035 will come from oil fields not yet found (light blue area on the chart) or developed (grey area on the chart)! Once again, call us skeptics, but we do not believe that oil fields yet to be found or developed will somehow succeed in offsetting the ongoing depletion. It is our contention that the world will struggle to produce more than 91-92 million barrels of total liquids per day and global demand will collide with available supply. Of course, we do not know the exact timing of this event but if global consumption continues to grow by 1.5% per annum, we will get there within the next 2-3 years. Needless to say, when aggregate demand hits available supply, the price of oil will rise sharply. More importantly, if demand continues to increase in the developed world, there will be a permanent shortage of crude and governments will probably end up rationing petroleum. Furthermore, it is our firm belief that ultimately, oil will only be used for its highest uses (agriculture and aviation). If history is any guide, the price of oil will not rise in a straight line and the secular uptrend will be punctuated by severe economic recessions. After all, the cure for a high oil price is a high oil price! At some point during the course of this business cycle, as the price of oil continues to rise, it will (once again) cause economic pain for the overstretched citizens of the developed world. When that happens, consumption will slow down and we will experience demand destruction in some parts of the world. In our view, the next economic recession will be caused by yet another spike in the price of oil and during the next business slowdown, crude will get whacked again. This is the reason why we will liquidate all our energy related investments prior to the onset of the next economic recession. Turning to the current situation, the price of oil is trading around US$90 per barrel and during the course of this business cycle, we expect it to surpass its previous record of US$147 per barrel. In addition to crude oil, we are also optimistic about the prospects of uranium. As you may know, various nations are scrambling to build new nuclear reactors and this is good news for uranium (raw material used for a nuclear reaction). As the world approaches 'Peak Oil' and crude is conserved, demand for electricity will surge. Either that or the world will go back to horse drawn carriages, which we seriously doubt! Furthermore, given the environmental damage associated with burning poor quality coal, the world will turn to nuclear energy to meets its energy needs. Therefore, worldwide consumption of uranium will appreciate over the following years and this will exert enormous pressure on mined supply. At the time of writing, the price of uranium has climbed to US$61.5 per pound and it is probable that it will at least double from this level. In the previous cycle, the price of uranium peaked around US$140 per pound and we will not be surprised to see that level exceeded within the next 2-3 years. Such a bullish scenario for uranium is great news for the unhedged uranium mining companies and a modest exposure to these stocks seems like a reasonable bet. In summary, given the reality of 'Peak Oil' and our bullish bias, we have allocated approximately 30% of our clients' capital to those assets which will benefit from the looming energy crunch. At present, we have exposure to upstream oil companies, integrated energy giants, oil services firms, renewable energy stocks, uranium and electric car/rechargeable battery manufacturers. It is our contention that these businesses will prosper over the following years, thereby rewarding our investors. Regards, Puru Saxena for The Daily Reckoning Welcome, 'Peak Oil' originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today's markets. Its been called "the most entertaining read of the day."

Did The Market Top Out on Friday? Posted: 29 Jan 2011 02:17 AM PST With "billions under management" at risk and thousands of nervous hedge funds playing with 3x leverage (thanks to Bank of America Prime Brokerage), everyone wants to know if now is the time to "make a killing" by going short stocks.  After reviewing many charts, it sure looks like another "Get Out of Dodge" day. Let's review the checklist: 1) QQQQ and IWM breakdown?  Yep, they cracked big. 2) Financials breaking down?  Not quite yet. 3) Retail stocks breaking down?  Not quite yet. 4) Commodity "Midnight Massacre"?  No. 5) Fleeing to USDX as carry trades unwind?  Not yet. 6) Emerging market status?  Blowtorched. 7) VIX going vertical?  Yep. 8) Summation Index and McClellan Oscillator going down? Yep. http://stockcharts.com/charts/indices/McSumNYSE.html   The "all important 21-day" keenly eyeballed by the mo-mo crowd is about to break.  One more day, or a gap down on Monday will seal the deal. Check out the VIX: Instead of showing the bad break of the EEM, instead, you can see the mo-mo gamers immediately started piling into the EDZ "Triple Whammy" casino table with 5x normal volume: With everyone attempting to "make their year", the hedge funds are acting like "speculative locusts".  We'll have to watch and see how fast everyone swarms over to the bear casino tables. Put/call ratio today went ballistic: Note the huge volume in USO today.  1974 all over again? So where do the hedge funds hide during bouts of geopolitical turmoil? Netflix, of course.... Unfortunately, the card playing, booze drinking, and escort playing Plutocrats in Davos will have to have an emergency meeting this weekend to avoid a complete and total meltdown in the global financial system. Because the girls are all sitting home with their clickers, scared to death, toggling between CNN news and watching the latest horror flick on NFLX. Rest assured that come Monday, if the market gets smoked, the 19-year old video game console traders at TIAA-CREF, CalPERS, Fidelity, etc. will be forced to flip and go short as the FemBots will be screaming and shouting: "If it's going down, short it!!!"

Gold Chart - This Is What I Thought Was Probably Going To Happen Ex Egypt Posted: 29 Jan 2011 02:12 AM PST This posting includes an audio/video/photo media file: Download Now

A Buying Opportunity In Gold? Posted: 28 Jan 2011 11:01 PM PST Dominic Frisby looks at some key moving averages for gold and gold stocks and argues that not only is the correction normal, we could be a close to a buying opportunity ...

Bet on gold nets Paulson $5 billion Posted: 28 Jan 2011 09:41 PM PST By Azam Ahmed and Julie Creswell The New York Times Saturday, January 29, 2011 http://www.nytimes.com/2011/01/29/business/29paulson.html?adxnnl=1&dxnn... John A. Paulson made $4 billion betting against newfangled mortgage investments. But he made even more betting on an old-fashioned investment: gold. Mr. Paulson, a hedge fund manager who sprang to fame when the housing market collapsed, personally made about $5 billion in 2010, according to two investors in his company. How? Mr. Paulson bought gold -- lots of it. His firm, Paulson & Co. owns securities that represent the rough equivalent of 96 metric tons of the metal. It is an outsize wager by almost any standard. Mr. Paulson's firm does not actually own all that gold. But if it did, it would be sitting atop more gold than the Australian government. Mr. Paulson himself would be holding more gold than Bulgaria. ... Dispatch continues below ... ADVERTISEMENT Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit, Extending the Mineralization of the Southwest Vein on the Property Company Press Release, October 27, 2010 VANCOUVER, British Columbia -- Sona Resources Corp. reports on five drillling holes in the third round of assay results from the recently completed drill program at its 100 percent-owned Elizabeth Gold Deposit Property in the Lillooet Mining District of southern British Columbia. Highlights from the diamond drilling include: -- Hole E10-66 intersected 17.4g gold/ton over 1.54 metres. -- Hole E10-67 intersected 96.4g gold/ton over 2.5 metres, including one assay interval of 383g of gold/ton over 0.5 metres. -- Hole E10-69 intersected 85.4g gold/ton over 4.03 metres, including one assay interval of 230g gold/ton over 1 metre. Four drill holes, E10-66 to E10-69, targeted the southwestern end of the Southwest Vein, and three of the holes have expanded the mineralized zone in that direction. The Southwest Vein gold mineralization has now been intersected over a strike length of 325 metres, with the deepest hole drilled less than 200 metres from surface. "The assay results from the Southwest Zone quartz vein continue to be extremely positive," says John P. Thompson, Sona's president and CEO. "We are expanding the Southwest Vein, and this high-grade gold mineralization remains wide open down dip and along strike to the southwest." For the company's full press release, please visit: http://sonaresources.com/_resources/news/SONA_NR19_2010.pdf Mr. Paulson is known for betting big. His payday for last year exceeds the $4 billion he made for 2007. He became one of the most celebrated hedge fund managers in the business after his firm shorted subprime investments. The 2010 income, which was first reported by The Wall Street Journal, was the culmination of a remarkable comeback for Mr. Paulson last year. While Mr. Paulson's firm oversees about $36 billion of assets in a range of hedge funds, the bulk of his personal fortune is invested in his funds that buy securities linked to the price of gold. Gold jumped almost 30 percent in 2010. So far this year, however, it has fallen almost 6 percent. While some other hedge fund stars turned in strong performances last year -- David Tepper of Appaloosa Management, Daniel Loeb of Third Point, and William A. Ackman of Pershing Square, for instance -- Mr. Paulson's payday most likely dwarfed theirs, as he oversees funds that are substantially bigger. Throughout much of last year, Mr. Paulson's funds lagged the market. Amid questions about whether the funds had become too big to beat the markets or whether Mr. Paulson had lost his touch, some investors asked for their money back midyear. But those who stayed were rewarded. In the final quarter of the year, many of Mr. Paulson's core stock holdings rose substantially. His two largest funds, with a combined $18 billion in assets, the Advantage and Advantage Plus fund, were up 11.1 percent and 17.6 percent by the end of the year. (The difference between the two funds is that the Advantage Plus fund uses leverage, or borrowed money, to increase its returns.) The average hedge fund gained a little more than 10.5 percent in 2010, a lukewarm year for many hedge fund managers, according to a composite index tracked by Hedge Fund Research of Chicago. Many investors would have achieved bigger gains by putting their money in an index that tracked the Standard & Poor's 500-stock index, which was up about 15 percent last year, including dividends. But Mr. Paulson's personal payday was probably greater than that of many of his investors. The $5 billion he earned was almost twice the entire payroll of all Major League Baseball teams. While part of that came from his firm's 20 percent cut of his funds' profits -- a typical "performance fee" in the industry -- the bulk of his gains came from his own money he has in his funds. Investors say Mr. Paulson has about $10 billion of his own money invested with the funds and that the vast majority of his money is invested in a special gold-share class he created a few years ago that is invested alongside his other portfolios. So while the Paulson Advantage fund was up 11.1 percent last year, the gold class shares of that portfolio surged 30.8 percent, according to investors in the fund, who spoke on the condition they not be named so as not to endanger their professional relationship with Mr. Paulson. Mr. Paulson invested heavily in gold on the belief that the dollar would lose value in the coming years. His gold investments are primarily done via a gold exchange-traded fund, SPDR Gold Shares. One of the largest ETF's in the world, SPDR Gold Shares is a trust that holds nearly 1,230 metric tons of gold bars in the vaults of HSBC bank in London. The gold fund has attracted a lot of big investors who are looking for a hedge against inflation. George Soros and Eric Mindich of Eton Park both held substantial stakes in the gold shares trust, according to filings with the Securities and Exchange Commission. "It's massively popular. It's been growing by leaps and bounds ever since the financial crisis," said Scott Burns, director of ETF research at the research firm Morningstar. Investors in the special gold shares class do not pay an additional management fee for their stake in the gold funds, but they do give Mr. Paulson 20 percent of any profits. Only about one-third of his total investors are in the gold-shares class, many choosing instead to invest directly in the gold fund and keep all of their gains. * * * Join GATA here: Phoenix Investment Conference and Silver Summit Renaissance Glendale Hotel and Spa Friday-Saturday, February 18-19, 2011 Glendale, Arizona http://cambridgehouse3.com/conference-details/phoenix-investment-confere... Support GATA by purchasing a colorful GATA T-shirt: http://gata.org/tshirts Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: http://www.goldrush21.com/ Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT Prophecy Resource Spins Off Platinum/Palladium Venture: World-Class PGM Deposit in Yukon Company Press Release, January 18, 2011 VANCOUVER, British Columbia -- Prophecy Resource Corp. (TSX-V:PCY)and Pacific Coast Nickel Corp. announce that they have agreed that PCNC will acquire Prophecy's Nickel PGM projects by issuing common shares to Prophecy. PCNC will acquire the Wellgreen PGM Ni-Cu and Lynn Lake nickel projects in the Yukon Territory and Manitoba respectively by issuing up to 550 million common shares of PCNC to Prophecy. PCNC has 55.7 million shares outstanding. Following the transaction: -- Prophecy will own approximately 90 percent of PCNC. -- PCNC will consolidate its share capital on a 10 old for one new basis. -- Prophecy will change its name to Prophecy Coal Corp. and PCNC will be renamed Prophecy Platinum Corp. -- Prophecy intends to distribute half of its PCNC shares to shareholders pro-rata in accordance with their holdings. Based on the closing price of the common shares of PCNC on January 17, $0.195 per share, the gross value of the transaction is $107,250,000. For the complete announcement, please visit: http://prophecyresource.com/news_2011_jan18.php

Gold and Silver Progress Report Posted: 28 Jan 2011 08:57 PM PST This chart courtesy Federal Reserve Bank of St. Louis shows the increase in M2 money supply is speeding up again after a somewhat slower rise during the past year. This represents monetary inflation, which precedes price inflation, which in turn provides energy for gold, silver and many other commodities.

Debt and Deficits, “The New Humpty Dumpty” Posted: 28 Jan 2011 08:14 PM PST Irony is a wonderful thing sometimes. It has a habit of framing things exactly the way they need to be framed. Unfortunately, this is a knife that cuts both ways and irony sometimes points out awful realities. I am not a political animal per se, but I find it incredibly ironic how the avalanche of bad news on the deficit, Social Security, and essentially most of the things wrong with our economy was saved until after Tuesday’s SOTU speech. Make no mistake, this has happened before, and each time I find the timing to be absolutely incredible. It is very clear at least at this point that our leaders prefer to pay lip service to the idea of reducing the deficit rather than actually trying to rectify the situation. I say this because, with very few exceptions, the rhetoric centers around a silver bullet solution that will allow programs and spending to remain pretty much on the same path as what got us here, but at the same time, ‘fixing’ things.

Gold Short-Term Rally? Posted: 28 Jan 2011 08:07 PM PST January has been a tough month for gold. From its year-end 2010 price of $1,420 an ounce to its recent low just over $1,320, gold has lost some $100 - about seven percent. In percentage terms, this doesn’t amount to much of a correction in the metal’s 10-year- old bull market. Gold has corrected in price in excess of 20% no less than 46 times since the onset of the bull market in 2001. Each time, the market mavens heralded the bull market’s demise. On Wednesday, the World Gold Council published its annual Gold Investment Digest for the fourth quarter and full-year 2010 with some interesting insights.

Who is Draining GLD? Posted: 28 Jan 2011 08:06 PM PST Actual GLD VaultThere seems to be a misunderstanding in the gold market that when you buy or sell shares of GLD you are putting pressure on the price of gold. That selling shares of GLD into the exchange is somehow analogous to selling physical into the marketplace. Or that buying shares of GLD is somehow, somewhere down the chain, removing physical gold from the marketplace.We often look at

Stay Focused Gold Investors Posted: 28 Jan 2011 08:03 PM PST By Frank Holmes CEO and Chief Investment Officer U.S. Global Investors It’s been an eventful week at home and abroad with several events directly showing up in the performance of global markets and the price of gold. Today, Egypt’s mayhem in the streets caused uncertainty in the markets, but sent gold shooting up over $21 to close at $1,336.75. On Wednesday, a continuation of the Federal Reserve’s easy monetary policy pushed gold up double-digits. Earlier in the week, a small hedge fund that had overleveraged itself to gold futures blew out its position, causing the biggest ever one-day reduction in futures contracts for the Comex. This small hedge fund trader fell victim to one of the oldest flaws in capital markets—arrogance with excessive leverage. This is the same infallible, overleveraged attitude that took down Fannie Mae, Lehman Brothers, Long-Term Capital Management, Enron and a number of Main Street American Home Buyers who leverage...

Silver Supply Shortage? Posted: 28 Jan 2011 07:57 PM PST There are some bizarre things going on in the silver market at the moment, reminiscent of the supply shortages and high premiums witnessed in 2008. For starters, silver is currently in both short-term and long-term backwardation, suggesting there is higher demand for silver NOW than in the future. This is backed up by the U.S. mint reporting all-time record sales for silver eagles during the month of January, with three days still left to go. Sales are on pace to breach 5 million coins sold, shattering the November 2010 record of 4.6 million. It is worth noting that all of the 2010 American eagle gold proof coins also sold out, but the focus of this article will be on the increasing signs of a shortage in silver.

Gold, It's Time to Buy Posted: 28 Jan 2011 07:52 PM PST The value of gold may be plummeting but many gold stocks are clocking double-digit gains, according to Lawrence Roulston, the editor of the Resource Opportunities newsletter and an expert on mining investments."It's definitely a buying opportunity. The fundamentals are strong, and we're seeing weaknesses in the prices on a short-term basis here," he says. In this exclusive interview with The Gold Report, Roulston explains why he loves the prospect generator model and why now is the perfect time to snub bullion and cozy up to mining equities.

Silver Futures Market Developments, Commitment of Traders Report Posted: 28 Jan 2011 07:46 PM PST After rocketing 76% higher in just 5 months, silver continues to enthrall investors and speculators.  In the decade I’ve been gaming its bull through actively trading silver stocks, I’ve never seen this metal so popular.  As more traders discover silver and start following and trading it, I’ve heard a lot of questions on a recent development in the silver-futures market.  Its open interest recently declined sharply.

Great Gold, Silver & Green Investment Opportunities Arise Posted: 28 Jan 2011 07:38 PM PST “Whether Americans and Westerners in general like it or not, the Chinese have become and will remain the key drivers to many economic and financial market developments, progress, and averted wreckage. The intrepid lapdog US press, loyal to the syndicate, is a critical element to maintain distractions… for years they have maintained a tight link in monetary policy. Doing so has linked their asset bubble expansion and bust cycle to the deadly one in the United States, and filled their coffers with US$-denominated toxic debt securities. However, China has three advantages over the US… They have $2.65 trillion in savings… a vast industrial base, courtesy of the US, the West, and Japan, which donated the technology… They have an expanding middle class… It is slowly becoming clear that the US granted the Most Favored Nation status to China in return for massive gold & silver swaps to the USGovt. The Wall Street fraud kings illicitly sold the leased bullion into the market, to sustain the American fiat paper congame, and thus a betrayal to the Chinese.

If Metals Decline After a Rise in Stocks, What Would Happen If Stocks Declined? Posted: 28 Jan 2011 10:49 AM PST Przemyslaw Radomski submits: With gold prices showing no signs of a breakout in 2011, so far, many investors have started unwinding long positions in anticipation of no further upside. The situation warrants a close scrutiny of the state of affairs. In the following part of this essay we analyze indications from the correlation matrix and technical indicators from silver and mining stocks to gauge the extent of this concern. However, first, we would like to draw your attention to the fact that the London Bullion Market Association conducted its annual survey of leading analysts to ask them where the price for gold will go in 2011. A total of 24 contributors gave their estimates for the high, low and average price for 2011 for gold, silver, platinum and palladium. In 2011, forecast contributors predict rises for all precious metals. Their average gold forecast is U.S. $1,457, a 19.0% increase on the 2010 average price, similar to the forecast of $1,450 made by delegates at the 2010 LBMA Precious Metals Conference in Berlin last September. Analysts predict that the average silver price will be $29.88, a 48% rise on the 2010 average price. The average 2011 platinum price is forecast to rise 12.6% from the average 2010 price, to $1,813 and palladium shows no sign of slowing down with an average 2011 price prediction of $814.65, a 54.8% increase on last year’s bumper average price. Complete Story »

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