Gold World News Flash

As of Thursday, March 24, there were still 632 futures contracts open, meaning 3.16 million ounces are still awaiting delivery even though the month is quickly drawing to a close
Same Shit, Different Day
World Gold Council to CFTC: Don't mess with paper gold
Paradigm Shift
Silver Linings
Buying Silver to Combat the Vampire Craze
“Asian Money Will Eventually Revive the U.S.”
Hourly Action In Gold From Trader Dan
Gold Seeker Closing Report: Gold and Silver End Near Unchanged
World Gold Council to CFTC: Don't mess with paper gold
Gold?s Performance vs. Martin Armstrong?s Economic Confidence Model: An Update
Are You Prepared For Another 2008? Part 2
Rick Rule: Silver Linings
Gene Arensberg credits GATA for silver's surge in last year
Gold’s Hyperbolic Trajectory
James Turk: Gold's hyperbolic trajectory
Rob Kirby: Silver price suppression -- how, why, and effect
In The News Today
We are Way Over the Edge Right Now
Jim?s Mailbox
Silver - The Math is Quite Simple
GGR Excerpt – Silver COT
With The CFTC Position Limit Response Period Over, Here Are Select Opinions By PIMCO, World Gold Council And Goldman Sachs
The Gold Trade Is Breaking Out
Gold Step Up To Heaven
Healthy consolidation in gold, Norcini tells King World News
Beware the Wealth Effect
Ron Paul legislation seeks competition in currency
JP Morgan, Blythe, CFTC and Comex are scared shitless. The SLA is forcing these clowns into making multi mega mistakes.
Finding Financial Sunshine in the Midst of a Rainy Recovery

As of Thursday, March 24, there were still 632 futures contracts open, meaning 3.16 million ounces are still awaiting delivery even though the month is quickly drawing to a close

Posted: 28 Mar 2011 06:24 PM PDT

Precious Metals Investing: Expect Fireworks in Silver Share this:

Same Shit, Different Day

Posted: 28 Mar 2011 06:12 PM PDT

The market rose for most of the day like the radiation readings from the Fukushima Dai-ichi Nuclear Power Plant (where engineers recently found plutonium in the soil which is either from the nuclear melt down or a broken flux capacitor) until it sagged in the afternoon like Dez Bryant's shorts (and perhaps his bank account and credibility), as investors realized that perhaps the Middle East imploding like Chris Lee's political career, Europe figuratively sweeping their monetary problems under a rug larger than Burt Reynolds' thanks to Portugal's latest potential downgrade, Tokyo being more of a threat to shut down than that likely assawful Spiderman musical, and AAPL reporting a bomb in one of their distrubution centers (though it turned out to just be an employee downloading a Nicolas Cage film on a company iPad), may not bode well for the ponzeconomy™. So while Larry Summers continues to pick the remnants of the economy out of his triple chin, it is important to be more careful than Fergie's gynecologist (because herpes are forever) as shit still sucks in the real world. Or just buy the fucking dip. Your choice.

As for US macro news, consumer spending was up .7%, though up only .2% not including food and energy so that should make the Fed happy since they continue to believe food and energy are as relevant to consumers as old man smell is to Andrea Mitchell or carding is to Lawrence Taylor (even if Fed Governor Dennis P. Lockhart wrote "...contrary to popular opinion, Fed officials actually do eat and fill up their gas tanks." Of course what he left out is they fill up their gas with the tears of the poor and unfortunate, so inflate away economy, inflate away). That said, the rise in consumer spend was driven by people in California loading up on geiger counters, iodine pills, and back issues of Shanna Marie Mclaughlin's Playboy spread, just in case the wind blows the nuclear radiation across the ocean and they are forced in to quarantine. It was the 8th consecutive month consumer spend rose, though the rise was higher than wage growth of .3% (or 0% for the 18MM+ unemployed, discouraged, and fucking discouraged workers) which caused the savings rate to contract like the soon to be readership of the NY Times.

In other macro news, pending homesales gained 2.1% in February which beat estimates of a drop of 1% (so at least analysts would have been directionally correct had they used the absolute value sign, and yes, that was sarcasm). The index is still down 8% for the year and as soon as foreclosures, shadow inventory, cardboard boxes, and Karin Mackaliunas' vagina are off the market, which should be sometime around 20infinity, home sales should once again start to rise (and note to Ms. Mackaliunas: Really? Money McBags can almost understand the heroin, but $.22? It does beg the question of if it was 4 nickels and two pennies, 2 dimes and 2 pennies, 22 pennies, or whatever. Though perhaps she was on her way to First CityWide).

Internationally, shit is still so fucked up that even 3 year olds have taken to the drink. Portugal may be downgraded by S&P from "kind of fucked" to "just fucking collapse already," Germany saw something called the Green Party win power in one of their States (that state of course being the state of confusion and despair), and Italy's 74 year old prime minister still maintains he was too old for all the sex he was accused of having by claiming, he's not 69 anymore. In addition to Europe, the Middle East is in more disarray than the Fed's balance sheet (but shhhhhhh, don't tell anyone about that) or Newt Gingrch's policy stands as not only are unified forces bombing Libya in support of the rebels but Syria is getting serious about not wanting a dictator all up in their Damascuses. Syrian forces opened fire to disperse hundreds of protesters as the government discusses repealing the decades long rule of emergency just as an emergency hits, so go figure.

In the market, EBAY announced they are buying GSIG for $2.4B after waiting until the last millisecond and hitting the bid button. They are paying a 51% cash premium for GSIG after checking the seller's ratings and now just need to wait for GSIG to open a Paypal account to deliver payment. Elsewhere, ALU was up 10% after Goldman raised them to a strong buy based on the fact that the analyst's coin flip came up heads and GS also upgraded NOK to buy citing a run on shitty mobile companies.

Finally, Kodak was up 6% after a US trade panel agreed to rule on whether or not AAPL and RIMM are infringing on Kodak's patents. If Kodak is successful in this case, they say they will next bring patent suits up against Borders, subprime lenders, and Mickey Rooney, for mimicking Kodak's patented drop in to obsolescence. That said, if Kodak wins in this suit it could bring them ~$1B which should be enough to allow them to stay afloat until their next big idea fails.

Yep, Money McBags is back after a brief respite where he tried to solve Fermat's Last Theorem using only his fingers and some used chewing gum (the answer is 42 by the way). As always, he has more on small cap stocks and Lucy Clarkson on the award winning When Genius Prevailed.

World Gold Council to CFTC: Don't mess with paper gold

Posted: 28 Mar 2011 06:09 PM PDT

Thanks to Zero Hedge's pseudonymous Tyler Durden tonight for unearthing the long statement submitted this month by World Gold Council CEO Aram Shishmanian to the U.S. Commodity Futures Trading Commission in opposition to the commission's proposal to impose limits on traders' positions in the precious metals futures markets:

Paradigm Shift

Posted: 28 Mar 2011 06:05 PM PDT

As an investor, sometimes the best action you can take is no action. Jason Hamlin of the Gold Stock Bull newsletter didn't start snapping up stocks on news of disaster in Japan and military attacks in Libya. In this exclusive interview with The Gold Report, Jason tells why he's holding his ground and how macro issues spanning the globe could push precious metal prices.

Silver Linings

Posted: 28 Mar 2011 06:03 PM PDT

If the clouds of crisis enveloping Japan, the Middle East and North Africa hold any silver linings, they may be in the form of opportunity for resource investors, particularly in the uranium, oil, natural gas and alternative energy sectors—at least that's how Rick Rule sees it.

Buying Silver to Combat the Vampire Craze

Posted: 28 Mar 2011 06:02 PM PDT

Dominic Frisby of Money Morning newsletter quotes Nick Laird of Sharelynx as saying that the situation in silver is such that "since 1950, almost 925,000 tonnes have gone into demand with 570,000 tonnes of this having come from production. This leaves a shortfall of 350,000 tonnes, which has come from central bank sales, stockpiles and scrap. This deficit equals approximately 16 years of production."

“Asian Money Will Eventually Revive the U.S.”

Posted: 28 Mar 2011 06:01 PM PDT

With debt spinning wildly out of control and the States threatening to revolt against the tyranny of Washington, we asked some frequent contributors to the Rick's Picks forum how they thought the nation would look five years from now. In the essay below, Mario Cavolo, an expatriate whose business is based in Shanghai, says Chinese wealth is clamoring for bargains in the U.S. and that a falling dollar will bring enormous Asian investment to our shores, infusing the U.S. economy with new vitality. The bad news is that large swaths of the American middle class will be devastated by the shifting economic landscape, unable to take advantage of the opportunities that voracious demand from foreigners will create.

Hourly Action In Gold From Trader Dan

Posted: 28 Mar 2011 04:16 PM PDT

Dear CIGAs,

Click chart to enlarge in PDF format with commentary from Trader Dan Norcini

For further market analysis and commentary, please see Trader Dan's website at www.traderdan.net

Gold Seeker Closing Report: Gold and Silver End Near Unchanged

Posted: 28 Mar 2011 04:00 PM PDT

Gold fell as much as $16.17 to $1410.03 by a little after 8AM EST, but it then rallied back higher in New York and ended with a loss of just 0.46%. Silver fell to as low as $36.39 before it also rallied back higher and ended with a gain of 0.03%.

World Gold Council to CFTC: Don't mess with paper gold

Posted: 28 Mar 2011 03:18 PM PDT

11:28p ET Monday, March 28, 2011

Dear Friend of GATA and Gold (and Silver):

http://www.zerohedge.com/article/cftc-position-limit-response-period-ove...

The council's objection to position limits involves to a great extent their potential to interfere with the derivative instruments that have diverted monetary demand for gold away from real metal and into paper promises of metal that suppress gold's price but can't be fulfilled, and the potential for position limits to interfere with hedging by gold miners, another price-suppressive practice.

In essence, the council's statement is a defense of an unlimited supply of paper gold issued by the several big international banks that control the gold and silver markets, paper gold being the enemy of real metal priced in a free market as well as the enemy of accountability for government currencies.

... Dispatch continues below ...

"The current proposed definition of 'deliverable supply' includes the quantity of the commodity meeting a contract's delivery specifications that a market participant could, with 'prudent planning,' procure during the relevant time period from available local supply, deliverable non-local supply, and comparable supply (based on factors such as product and location). The World Gold Council believes that the CFTC should update its definition of 'deliverable supply' to account for changes in the commodity markets over the last 20 years which have increased the complexities and products within the commodity markets.

"For example, 'exchanges for related positions' ('EFRPs') are transactions used by market participants in the futures exchanges to accommodate more flexible settlement options for physically settled commodity transactions. An EFRP consists of two discrete but related simultaneous transactions. One party to the EFRP must be the buyer of (or the holder of the long market exposure associated with) the related position and the seller of the corresponding exchange contract. The other party to the EFRP must be the seller of (or the holder of the short market exposure associated with) the related position and the buyer of the corresponding exchange contract. The related position (cash, OTC swap, OTC option, or other OTC derivative) must involve the commodity underlying the exchange contract, or must be a derivative, byproduct, or related product of such commodity that has a reasonable degree of price correlation to the commodity underlying the exchange contract.

"In the majority of circumstances, EFRPs (particularly exchange for physical transactions) make physical settlement of exchange-traded commodity futures and option contracts unnecessary, and therefore increasingly less common. Additionally, the exchange for physical transaction makes a commodity's futures contract substantially less vulnerable to a corner or squeeze because, in effect, the exchange for physical transaction has introduced flexibility to an otherwise limited physical settlement process.

"The World Gold Council encourages the CFTC to update the proposed definition of deliverable supply to reflect the more flexible settlement options for physically settled commodity transactions, and thereby expanding the definition of deliverable supply (and increase the applicable spot-month position limits). Furthermore, an updated definition of deliverable supply which accurately reflects the manner in which the current commodity markets function will reduce the threat of price volatility and manipulation, while promoting liquidity and encourage effective risk management.

"The CFTC's proposal to recalculate the position limits annually based on changes in open interest potentially may reduce the participation of market participants in the more deferred delivery months, particularly for long-term contracts that include positions in relatively illiquid deferred months.

"For example, a market participant may be wary of entering into a long-term transaction if the position limit that makes the trade permissible at one point in time may be reduced in the future. In order to secure financing for many mining projects, the World Gold Council's members must be able to hedge price risk many years into the future. However, the uncertainty associated with floating position limits may inadvertently discourage market participants from providing the requisite long-term hedges which, in turn, would make it difficult for the World Gold Council's members to finance investments for crucial infrastructure projects. In general, the annual recalculation will make it difficult to hedge long-term transactions. This, in turn, likely will lead to more price volatility due to reduced liquidity."

The World Gold Council's letter to the CFTC has been posted at GATA's Internet site here --

http://www.gata.org/files/WGCtoCFTC-03-28-2011.pdf

-- but apparently not at the council's own Internet site. One has to wonder here whether the council is representing mining companies or their bankers instead.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *

Join GATA here:

An Evening with Bill Murphy and James Turk
Sponsored by Deutsche Edelmetall-Gesellschaft
Friday, April 29, 2011
Hofbrauhaus, Munich, Germany

http://www.goldmoney.com/munich-2011-april-29.html

Support GATA by purchasing gold and silver commemorative coins:

https://www.amsterdamgold.eu/gata/index.asp?BiD=12

Or 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

Attachment	Size
WGCtoCFTC-03-28-2011.pdf	127.61 KB

This posting includes an audio/video/photo media file: Download Now

Gold?s Performance vs. Martin Armstrong?s Economic Confidence Model: An Update

Posted: 28 Mar 2011 01:52 PM PDT

Martin Armstrong, considered to be one of the best – if not the best -*market prognosticator in history, had maintained until recently that the price of gold would correct sideways to down into the next bottom of his Economic Confidence Model into June 13, 2011.*In*a new*article*that appears to be an apparent response to a recent*editorial* I wrote he seems to have changed his position somewhat. Let me explain. Words: 1979 So*says**Goldrunner (www.GoldrunnerFractalAnalysis.com)*in*an article* which Lorimer Wilson, editor of www.munKNEE.com, has reformatted*and edited* below for the sake of clarity and brevity to ensure a fast and easy read. (Please note that this paragraph must be included in any article re-posting to avoid copyright infringement.)*Goldrunner*goes*on to say: (The material below*is only a small condensed version of what I will be posting for subscribers to*my site*where we are currently in the process of building content. If you have any questions about our ne...

Are You Prepared For Another 2008? Part 2

Posted: 28 Mar 2011 01:36 PM PDT

The Financial World has entered a period that is strikingly similar to that of 2008, at least regarding three key issues. They are:

1) The Oil/ USD correlation (as noted recently on ZeroHedge)

2) Bearish bets against the US Dollar

3) “In the Know” investors getting out of the market

We covered #1 in Part 1 of this series of articles. This article is focused on #2: investor bearishness regarding the US Dollar.

As you know, I’m a huge Dollar bear. As noted in Monday’s Free Market Forecast last week on Gains Pains & Capital, not only has the US Dollar broken down through multi-year support, but it has even taken out its 2010 lows:

Long-term, I fully believe we will be seeing an 50% devaluation in the US currency in the coming years as predicted by the massive Head and Shoulders pattern in the greenback:

However, right now US Dollar bearishness has gotten to a point that we should at least get some kind of short-covering bounce. Last week, the Commodity Futures Trading Commission reported the largest net short dollar position in three years last week. They are even more bearish than they were in 2010 or 2009.

Now, they have a very good reason to do this. The US deficit in February was the LARGEST in history. And with the US’s public debt at $14 trillion we’ve got a debt-to-GDP ratio of 100%. Throw in unfunded liabilities like Social Security and Medicare and the REAL debt-to-GDP ratio is north of 400%.

On top of this, our entire debt issuance system has become a giant Ponzi scheme in which the Treasury issues new debt to Wall Street banks, which then flip the debt over to the US Federal Reserve a few weeks later. Indeed, yesterday’s Fed QE 2 action saw the Fed buying 53% of the new debt issued a mere 13 days ago.

Thus, to say that the US Dollar and debt system are broken would be the understatement of the century… However, the US Dollar has become a massively lopsided trade with investors betting heavily on its demise. When you consider its position relative to the Euro (another doomed currency), it is clear that the US Dollar could bounce just based on the lopsidedness of this situation.

In this sense we are in a state of “do or die” for the Greenback. From a “do” perspective we could see a small bounce, possibly to 77 or 78 just based on how lopsided the US Dollar trade has become.

In contrast, from a “die” perspective, the greenback has taken out its multi-year trendline:

If we don’t get a bounce in the Greenback soon, we will be heading for something far worse than 2008: a CURRENCY crisis. Sure seeing the stock market collapse was bad. But what about the US Dollar, the world’s reserve currency collapsing?

On that note, if you’re getting worried about the future of the stock market and have yet to take steps to prepare for the Second Round of the Financial Crisis… I highly suggest you download my FREE Special Report specifying exactly how to prepare for what’s to come.

I call it The Financial Crisis “Round Two” Survival Kit. And its 17 pages contain a wealth of information about portfolio protection, which investments to own and how to take out Catastrophe Insurance on the stock market (this “insurance” paid out triple digit gains in the Autumn of 2008).

Again, this is all 100% FREE. To pick up your copy today, got to http://www.gainspainscapital.com and click on FREE REPORTS.

More to come…

Graham Summers

PS. We ALSO publish a FREE Special Report on Inflation detailing three investments that have all already SOARED as a result of the Fed’s monetary policy.

You can access this Report at the link above.

Rick Rule: Silver Linings

Posted: 28 Mar 2011 01:17 PM PDT

Source: The Energy Report 03/24/2011 If the clouds of crisis enveloping Japan, the Middle East and North Africa hold any silver linings, they may be in the form of opportunity for resource investors, particularly in the uranium, oil, natural gas and alternative energy sectors—at least that's how Rick Rule sees it. The widely known and well-respected founder of Global Resource Investments returned to cyberspace this week for a webcast wherein he explored some of the investment implications of these recent crises. In this Energy Report exclusive, Rick shares his insights and investment ideas. Rick Rule, world-renowned expert in resource investing, anticipates ongoing repercussions on the nuclear energy front as one consequence of the reactor crisis that has kept Japan in daily headlines for weeks. As you may recall from The Energy Report interview with Alka Singh last week, citizens and politicians around the world, fearful that catastrophes like that at Japan's F...

Gene Arensberg credits GATA for silver's surge in last year

Posted: 28 Mar 2011 01:05 PM PDT

9p ET Monday, March 28, 2011

Dear Friend of GATA and Gold (and Silver):

In his new edition of the Got Gold Report, Gene Arensberg credits GATA Chairman Bill Murphy and GATA Board of Directors member Adrian Douglas for sparking the surge in the price of silver over the last year with their testimony last March to the hearing of the U.S. Commodity Futures Trading Commission about silver price suppression.

Arensberg writes:

"Certainly we cannot account for the recent historic run-up in price with action in the futures markets. We are likely witness to at least the perception of if not an actual physical squeeze of sorts as dealers, warehousemen, and operators who have sold 'silver' to investors and speculators in 'pooled' or unallocated accounts are now having to locate and allocate actual physical bar stocks, real metal, to their clients from what has been a fractional-reserve metal system.

"The issue gained broad exposure when Gold Anti-Trust Action Committee consultant Adrian Douglas and GATA Chairman Bill Murphy appeared before the CFTC in a hearing about one year ago, and it has been building to a crescendo ever since. We suggest that comments then by CPM Group head honcho Jeffrey Christian were the seed of the current rush to physical metal. Christian indicated then that the large bullion banks and metal dealers operated what amounted to a fractional-reserve system for their paper metal transactions -- with as much as 100:1 leverage, no less.

"Shortly after that hearing, Douglas and other like-minded analysts put a laser-like focus on the perils of holding unallocated or undefined metal as opposed to allocated metal accounts or actual physical metal."

An excerpt from the new Got Gold Report is headlined "GGR Excerpt -- Silver COT" and you can find it at the Got Gold Report's Internet site here:

http://www.gotgoldreport.com/2011/03/ggr-excerpt-silver-cot.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:

An Evening with Bill Murphy and James Turk
Sponsored by Deutsche Edelmetall-Gesellschaft
Friday, April 29, 2011
Hofbrauhaus, Munich, Germany

Support GATA by purchasing gold and silver commemorative coins:

https://www.amsterdamgold.eu/gata/index.asp?BiD=12

Or 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

Gold’s Hyperbolic Trajectory

Posted: 28 Mar 2011 12:54 PM PDT

FGMR - Free Gold Money Report March 28, 2011 – I am not a mathematician, but those knowledgeable about math have explained to me the difference between a parabola and a hyperbola. I’ll cut through the math to get to the key point. A hyperbolic rise in price is much faster than a parabolic one. This distinction is important because the gold price in recent years has been rising at a hyperbolic rate, which is illustrated in the following chart. The above chart has been prepared on a log scale so that, for example, the distance between $250 and $500 is equal to the distance between $750 and $1500. A chart prepared with an arithmetic scale does not accurately portray percent changes, while a log scale chart illustrates percentage changes perfectly, which is important. After all, if an asset you own doubles in price, it is this percentage gain that shows the relative increase in your wealth. In other words, if your asset doubles in price from $2 to $4,...

James Turk: Gold's hyperbolic trajectory

Posted: 28 Mar 2011 12:43 PM PDT

8:41p ET Monday, March 28, 2011

Dear Friend of GATA and Gold (and Silver):

Gold's ascent, GoldMoney founder and Free Gold Money Report publisher James Turk writes today, is better described as hyperbolic rather than parabolic, and hyperbolic is much faster than parabolic. Further, Turk writes, gold is going hyperbolic not only against the U.S. dollar but also against the British pound, the euro, and the Swiss franc. Turk, a longtime consultant to GATA, believes that hyperinflation of the major currencies is imminent. His new commentary is headlined "Gold's Hyperbolic Trajectory" and you can find it at the Free Gold Money Report Internet site here:

http://www.fgmr.com/golds-hyperbolic-trajectory.html

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

http://www.gata.org/node/16

Rob Kirby: Silver price suppression -- how, why, and effect

Posted: 28 Mar 2011 12:33 PM PDT

8:28p ET Monday, March 28, 2011

Dear Friend of GATA and Gold (and Silver):

In commentary posted tonight at GoldSeek, GATA consultant Rob Kirby of Kirby Analytics in Toronto explains and documents simply and concisely how the silver price suppression scheme is undertaken with derivatives by J.P. Morgan Chase and HSBC, the two biggest shorts in the silver market, acting as agents for the U.S. government. Kirby's commentary is headlined "Silver Price Suppression: How, Why, and Effect" and you can find it at GoldSeek's companion site, SilverSeek, here:

http://news.silverseek.com/SilverSeek/1301340431.php

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:

An Evening with Bill Murphy and James Turk
Sponsored by Deutsche Edelmetall-Gesellschaft
Friday, April 29, 2011
Hofbrauhaus, Munich, Germany

http://www.goldmoney.com/munich-2011-april-29.html

Support GATA by purchasing gold and silver commemorative coins:

https://www.amsterdamgold.eu/gata/index.asp?BiD=12

Or 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

In The News Today

Posted: 28 Mar 2011 12:30 PM PDT

View the original post at jsmineset.com... March 28, 2011 04:04 PM My Dear Friends, The paper gold market is not the gold market. As in the 1970s, cash will rule the ultimate price. Gold’s involvement in a new virtual world currency will sustain 80% of that high price. In the 1970s paper gold was a short term game and influence on price. Today paper gold has been just that. Greg’s article posted today has reviewed what you must realize by now. Pay no attention to the games the gold banks are playing. That is for their short term benefit. Gold will trade at $1650 before it goes much higher. Regards, Jim Jim Sinclair’s Commentary Ok, it has to be said. If Gadaffi did not have his hoard of gold he would be buried in hole in the ground with candy bars or hanging from a tree by now. Jim Sinclair’s Commentary "Forget Travelers, just own gold and do not the COMEX bast**ds get you down." The following video is compliments of CIGA Black Swan &#...

We are Way Over the Edge Right Now

Posted: 28 Mar 2011 12:30 PM PDT

View the original post at jsmineset.com... March 28, 2011 09:38 AM By Greg Hunter USAWatchdog.com Dear CIGAs, Last Friday, I wrote a piece called "Could America be Pushed over the Economic Edge?" It was about how Libya, Japan or even covert economic warfare (from America's enemies) could push the U.S. into another financial meltdown. I received a one sentence email from my friend Jim Sinclair that said, "We are way over the edge right now." His message gave me a sinking feeling. Mr. Sinclair is a world renowned gold expert, but in order to trade that market, you must be extremely knowledgeable in many aspects of economics and politics. Almost everything affects the price of gold. War, government, oil, debt, money creation, the Fed and many other variables can dictate how much the yellow metal costs. Gold is probably the single most difficult market to trade, and Sinclair is the Yoda of the gold traders (except much better looking.) Last week on his web...

Jim?s Mailbox

Posted: 28 Mar 2011 12:30 PM PDT

View the original post at jsmineset.com... March 28, 2011 09:36 AM Buffett Says Buy Businesses Over Long-Term Bonds as Dollar Value to Erode CIGA Eric This also includes gold, but don’t look for this suggestion to get a lot of headline space from notable names. Warren Buffett, the billionaire who urged Congress in 2009 to guard against inflation, said investors should avoid long-term fixed-income bets in U.S. dollars because the currency's purchasing power will decline. "I would recommend against buying long-term fixed-dollar investments," Buffett, chairman and chief executive officer of Berkshire Hathaway Inc. (BRK/A), said today in New Delhi. "If you ask me if the U.S. dollar is going to hold its purchasing power fully at the level of 2011, 5 years, 10 years or 20 years from now, I would tell you it will not." Source: bloomberg.com More… Jim, It’s a shame our Founder’s wisdom is lost on our current leaders while China can see it clearl...

Silver - The Math is Quite Simple

Posted: 28 Mar 2011 12:30 PM PDT

Silver has doubled in price in 8 months from near 18 to 37. On any [COLOR=#e06666]chart, one can see the current price is 1.48x its 200 day moving average. This is a range that is generally considered excessive.[/COLOR] No matter what your entry point, anytime a particular investment position exceeds 100%, the math becomes quite simple. One can take half off the table and let the rest ride for free. For example, if you have $1000 invested in any investment and it becomes worth $2000, one can sell 50% ($1000) and the remaining $1000 is now risk free. This is the same protocol we use in the [COLOR=#e06666]Pendulum Trading System to achieve low core postions in our Portfolios[/COLOR] over and over again. This is not to say that silver is not a great investment with excellent fundamentals and prospects. Clearly it has these characteristics. It is simply a matter of the math and a total no brainer. ...

GGR Excerpt – Silver COT

Posted: 28 Mar 2011 11:38 AM PDT

Just below is an excerpt of Sunday's full 25-page Got Gold Report which was delivered to GGR subscribers via email and posted to the subscriber pages of the web site. Depending on events and timing, we may post another excerpt in the very near future, so stay tuned. In addition to the full GGR this past weekend, we also noted for Vultures a new Vulture Bargain Candidate of Interest (VBCI) and posted a new 2-year tracking chart for it, bringing to 11 the number of VBCI charts, in addition to the now eight fully fledged Vulture Bargain companies. There are several other issues we are tracking that could make the VBCI list in the next couple of weeks, so Vultures need to check in on the subscriber pages from time to time to see what's new.

With The CFTC Position Limit Response Period Over, Here Are Select Opinions By PIMCO, World Gold Council And Goldman Sachs

Posted: 28 Mar 2011 11:21 AM PDT

The public comment period for the CFTC's proposed position limit rule has come and gone. It should come as no surprise to anyone (and particularly those transfixed by the massive surges in various commodities, among them most certainly gold and silver) that what is at stake here is not some actual position limit definition and subsequent regulation and enforcement (although that most certainly is), but yet another challenge to the klepocratic status quo which naturally prefers the status quo to remain as is, and public interests, which seeing 100% moves in the price of grain, cotton, corn, and other commodities, would obviously prefer to reign in speculative fervor. At the end of the day, Wall Street will find loopholes in whatever the end rule is as it always does, but the polemic on the way there is quite interesting. Which is why having combed through some of the last minute public comment submissions (of which there were 5,561 in total at last check), we present some of the most indicative ones: one the one hand that of Carl "Shitty Deal" Levin, Chair of the Permanent Subcommittee on Investigations, who obviously is for the most prompt implementation of position limits as envisioned in Dodd Frank, and on the other hand institutional money managers and traders such as PIMCO, Morgan Stanley, the World Gold Council, and, naturally, Goldman Sachs (oddly, we have yet to track down the response by one JP Morgan). We present these for our readers' perusal below.

But before that, here is a brief summary of where we stand in this process, via of Reuters:

A global push to temper wild swings in oil and other commodity prices reached a pivotal point on Monday as big traders mounted their last attack on a U.S. plan to limit the role of speculators.

Many of the world's biggest commodity market participants such as U.S. agribusiness giant Cargill Inc and Delta Air Lines are resisting new rules that would cap how many futures and related swaps contracts any one company can control.

The plan to impose "position limits", which has been under debate since prices first surged to records in 2007 and 2008, is now reaching its culmination, with companies rushing to submit their views to the U.S. Commodity Futures Trading Commission by Monday's deadline.

Most are reframing familiar complaints: Banks, traders and exchanges say the rules would make it harder to hedge risk, and that it would reduce liquidity and increase consumer costs.

If the proposed rules are adopted with no change, "there is a substantial risk that they would undermine the efficiency of the markets for hedgers, by reducing liquidity and disrupting markets which currently function well", Linda Cutler, a Cargill vice president, said in a letter to the agency.

Ah yes, the same "we provide liquidity" straw man excuse that the HFT scalp brigade uses every time someone threatens to take away their market frontrunning power.

Continuing:

But at a time when oil, grain and metal prices have again shot up, some reaching new heights, consumers too are looking for some regulatory relief. Politicians are stepping up pressure for action.

"The banks think this rule is too strong. Commercial end users, consumers, unions ... think it's far too weak," Michael Greenberger, a University of Maryland law professor and former senior CFTC staffer, told Reuters Insider.

"As the American public starts suffering from $4 a gallon gasoline ... the issue becomes more visible, the debate between the consumer and the big banks is more highlighted," he said.

Wall Street firms, including Morgan Stanley and Barclays Capital, want the CFTC to hold back on position limits until the agency can gather more data to assess the size of the swaps market.

"Only after it receives and reviews relevant market data should the Commission consider whether position limits are necessary and, if so, set appropriate and commercially practicable limits that preserver market liquidity and promote efficient price discovery," said Simon Greenshields, global co-head of Morgan Stanley's commodities business.

Roger Jones, a managing director at Barclays, warned the CFTC proposal was too vague and "oversimplifies the legitimate complexity of risk management."

And so forth. It is pretty clear where this is headed - another institution vs end-consumer debate. And with the CFTC head having worked long years at Goldman Sachs is there any doubt how it will be resolved.

For those interested here is a comparison of the the old and the new proposed plan are comparable and divergent:

That's all in theory.

In practice, here is how it is going to go down. All proposals such as the one immediately below from Carl Levin will be ignored, while those of the likes of PIMCO, Morgan Stanley, the WGC and of course Goldman Sachs, will be very much considered and probably implemented, resulting in a much watered down position limit rule, which will likely imitate the status quo almost verbatim.

Carl Levin response:

Levin CFTC

PIMCO response:

PIMCO CFTC

World Gold Council response:

WGC CFTC

Morgan Stanley response:

Morgan Stanley CFTC

Goldman Sachs response:

Goldman CFTC

The Gold Trade Is Breaking Out

Posted: 28 Mar 2011 10:49 AM PDT

Jeb Handwerger submits:

Physical demand for gold and silver is strong as investors seek protection of wealth against uncertainty in the Middle East. It has already been reported that Col. Gaddafi has been a wise gold investor, preparing for this crisis by hoarding a large amount of the precious metal to fund his military and to hedge against economic sanctions. Just as he's been hoarding precious metals, many throughout the Middle East are trying to sell their assets and seek out the shelter of safe havens.

It is being reported by the International Monetary Fund that Gaddafi has amassed one of the largest gold positions in the world. Libya's gold reserves are estimated to be worth over $6 billion, and the gold can be used to buy paid fighters. At a time when international sanctions have been increased, gold has been Gaddafi's store of wealth; he appears to have been ready for this

Complete Story »

Gold Step Up To Heaven

Posted: 28 Mar 2011 10:25 AM PDT

Gold continues to run up the Gann angle 45 degree line. Buyers come in on the dips. Question, what will stop or even slow down this power rally. Answer, changes in central bank and government policies. Read More...

Healthy consolidation in gold, Norcini tells King World News

Posted: 28 Mar 2011 10:02 AM PDT

6p ET Monday, March 28, 2011

Dear Friend of GATA and Gold (and Silver):

Trader and market analyst Dan Norcini tonight provides King World News with some technical analysis. It's headlined "Healthy Consolidation in Gold After Profit Taking" and you can find it at the King World News blog here:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/3/28_Da...

Or try this abbreviated link:

http://tinyurl.com/4qzwh7k

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

Beware the Wealth Effect

Posted: 28 Mar 2011 10:01 AM PDT

The 5 min. Forecast March 28, 2011 01:36 PM by Addison Wiggin - March 28, 2011 [LIST] [*]Fed's "wealth effect" gives precious metals a smackdown... Dan Amoss on what the Fed really is likely to do next... and what you should expect [*]Six reasons natural gas is still a good bet... and 11 ways to play it [*]Jim Nelson on an emerging market juggernaut about to take a breather... [*]Artificial clouds fixing soccer matches... a "jobs program" by another name... a reader who gets it... another book recommendation... and more! [/LIST][FONT=courier][SIZE=3]0:00 — Gold slumped about $25 over the weekend. At last check, the spot price was $1,412. Silver, too, got whacked. At $36.55, it remains $2 above where it was only a month ago. As today is options expiration on the Chicago Mercantile Exchange, we're sure traders are covering bets and taking profits. But we detected another sell signal for the yellow metal... and it's a specious one, at best. 0:23 R...

Ron Paul legislation seeks competition in currency

Posted: 28 Mar 2011 09:50 AM PDT

5:49p ET Monday, March 28, 2011

Dear Friend of GATA and Gold (and Silver):

At Coin News, Darrin Lee Unser reports at length on U.S. Rep. Ron Paul's legislation to legalize competition in currencies in the United States. The proposed Free Competition in Currency Act would eliminate capital gains taxes on gold and silver coins, repeal legal tender laws, and repeal the federal prohibition against private mints, the law recently used to destroy the Liberty Dollar operation and convict its founder, Bernard von NotHaus. The Coin News report is headlined "Ron Paul Introduces Free Competition in Currency Act of 2011" and you can find it here:

http://www.coinnews.net/2011/03/24/ron-paul-introduces-free-competition-...

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

ADVERTISEMENT

The Gold Standard Now: It Can Work

Today a dollar is worth 80 percent less than it was 40 years ago, and less than 5 percent of its value a hundred years ago. We deserve a dollar that is as good as gold, a dollar that will hold its value from year to year so we can be financially secure and our economy can generate more and better jobs.

For most of America's history, our dollar was literally as good as gold. But on August 15, 1971, our politicians destroyed the link between gold and the dollar. They destroyed the foundations of our economic system.

A new Internet site, TheGoldStandardNow.org, provides news and cutting-edge analysis about this most important issue and explains how the gold standard worked in the past and how it can work in the future. Visit us today:

http://www.thegoldstandardnow.org/about/137-welcome-newsmax

Join GATA here:

An Evening with Bill Murphy and James Turk
Sponsored by Deutsche Edelmetall-Gesellschaft
Friday, April 29, 2011
Hofbrauhaus, Munich, Germany

http://www.goldmoney.com/munich-2011-april-29.html

Support GATA by purchasing gold and silver commemorative coins:

https://www.amsterdamgold.eu/gata/index.asp?BiD=12

Or 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

JP Morgan, Blythe, CFTC and Comex are scared shitless. The SLA is forcing these clowns into making multi mega mistakes.

Posted: 28 Mar 2011 09:35 AM PDT

The U.S. futures regulator said on Monday it has canceled its latest rule-making meeting scheduled on March 30. MK: Silver vigilantes like Sprott and others simply read this stuff and buy more. They love to see rats squirm in their traps. Share this:

Finding Financial Sunshine in the Midst of a Rainy Recovery

Posted: 28 Mar 2011 09:30 AM PDT

Investors always talk about bulls and bears…but no one ever talks about Chihuahuas. Maybe they should. The Chihuahua in your editor's household, "Tango," spends most of his time finding the warmest spot on the floor…and sitting there…until someone offers him food or some other enticing attraction.

Tango doesn't worry about much of anything. When he's out and about, he trots along the sidewalk, darts in and out of the shrubs, chases after birds and generally enjoys himself. And when he's not out and about, he's lying on some sun-drenched floor tile.

Tango doesn't fear much – not even much bigger dogs – but he's terrified of the rain. So when you add it all up, you get a happy-go-lucky little pooch who loves sunshine and hates rain.

Investors could do worse than to "be a Chihuahua." Find the sunshine and repose…until the rain clouds begin gathering.

Throughout most of the global financial atmosphere, the barometric pressure is dropping. Scattered clouds are encroaching upon what has been a delightful two-year run of warm, sunny weather. Japan is radioactive; the Middle East of hyperactive; and most of the Western world is insolvent.

Thankfully, a few select companies are providing selective investment opportunities. But even selective investors must pay close attention to the clouds overhead. There aren't a lot of breezy cirrus clouds these days; it's all nimbus. The US economy is visibly slowing down, while the growth rates of places like China, India and Brazil are contracting.

At the same time, the desperate financial conditions of countries like Ireland and Portugal – as well as states like California and Illinois – are retuning to the front pages. These are real crises, dear reader. Feels like time to avoid the rain…and to try finding the sun wherever you can.

Here in the US, the economic recovery is providing very little legitimate sunshine. This so-called recovery is a tanning booth, powered by outrageously large and expensive "stimulus measures." Unfortunately, now that the stimulus dollars are spent, and vast portions of the real American economy have failed to revive as hoped, we Americans are left standing out in the rain with our fake tans…and no sign of sunshine anywhere.

A quick foray through today's headlines tells the story…

"Uncertainty Fuels Portugal's Financial Tailspin"

"More Radioactive Water Spills at Japan Nuke Plan"

"Disposable Incomes Drop For First Time Since September"

…and lastly, "Harry and David File for Bankruptcy." Yes, it's true; the gift-box retailer that began selling fruit by mail in the 1930s has filed for bankruptcy protection. Gift-box buyers – as well as "re-gifters" of gift boxes – will no longer be able to rely on Harry and David as their "go-to" present of last resort.

Lost, temporarily, amidst these disturbing headlines is the even more disturbing fact that nations cannot spend their way to prosperity, no matter what clever name they slap on the escapade. From FDR's "New Deal" to Lyndon Johnsons' "Great Society" to Obama's "Build America Bonds," the programs follow a familiar path: spend first, ask questions never.

Eric Fry
for The Daily Reckoning

Finding Financial Sunshine in the Midst of a Rainy Recovery originally appeared in the Daily Reckoning. Daily Reckoning founder Bill Bonner recently wrote articles on stagflation and the great correction.