Gold World News Flash

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• Crude Oil, Gold Recoveries Showing Early Signs of Exhaustion
• From whatever Low Silver and Gold Prices Eventually Make, they Will Rocket Back to Double, Triple, or Quadruple that Low
• Gold Decisions and The T-Bond. Get Real
• Silver Update 9/27/11: Occupy Silver
• Goldman's 'Unconventional' Inflation Policy vs. Austrian Deflation Endgame
• Goldman's 'Unconventional' Inflation Policy vs. Austrian Deflation Endgame
• Silver Price Changes
• Richard Russell - You Must Own Gold in World Drowning in Fiat
• Viet Nam State Bank Authorises More Gold Imports as Prices Soar
• Asia Gold: Buyers Rush in After Price Slump; Premiums Up
• 17 Facts That Prove That The Average American Family Is Getting Absolutely Pulverized By This Economy
• Pat Heller: How central banks might have smashed gold and silver down
• Gold Chart And Comments
• Vietnam hopes to rig domestic gold market before others do
• Seems Like Mexico Purchased 110 Tons Of Gold That Don't Exist
• The Chinese Mean To Control The Global Gold Market
• Gold as a Safe Haven is Worthless!
• 12 Reasons Not To Fear September’s Gold And Silver Price Smackdown
• Gold And Silver: Free Markets?
• Doug Casey: How to Prepare for When Money Dies
• Gold and silver bull will rescue recent buyers, Leeb tells King World News
• Inflation As Solution: Hosing The Middle Class
• Robert Lenzner: The Chinese mean to control the global gold market
• Avery Goodman: Looks like Mexico purchased only imaginary gold
• "The Carnage...The Carnage..." - Presenting The Complete September And YTD Hedge Fund Bloodbath
• "The Carnage...The Carnage..." - Presenting The Complete September And YTD Hedge Fund Bloodbath
• What’s Happening with Gold?
• BBC Speechless As Trader Warns of Stock Market Crash and Economic Collapse Is Coming
• The Rare Earth Sector: Questions Must Be Asked
• Stephen Leeb - How the Gold & Silver Bull Will Rescue You

Crude Oil, Gold Recoveries Showing Early Signs of Exhaustion Posted: 27 Sep 2011 05:54 PM PDT courtesy of DailyFX.com September 27, 2011 09:50 PM Crude oil and gold prices may resume trending lower as the retracement of sharp post-FOMC moves shows signs of exhaustion across financial markets. Talking Points [LIST] [*]Crude Oil Losses Hinted Ahead as S&P 500 Index Futures Decline [*]Gold, Silver May Take Direction Cues from Ben Bernanke Speech [/LIST] WTI Crude Oil (NY Close): $84.45 // +4.21 // +5.25% Crude oil prices bounced as expected amid a broad-based recovery in risk appetite. The rise may run into resistance going forward however as S&P 500 stock index futures point to weakness in late Asian trade, suggesting the correction may have run out of steam. Technically, the upside is capped by the 23.6% Fibonacci extension at $84.61, with a break above that targeting the top of a falling channel set from early May at $87.92. Near-term support stands at $80.97, the 38.2% Fib. US Durable Goods Orders figures headline the economic calendar, but the recent focus on EU debt ...

From whatever Low Silver and Gold Prices Eventually Make, they Will Rocket Back to Double, Triple, or Quadruple that Low Posted: 27 Sep 2011 05:39 PM PDT Gold Price Close Today : 1,650.60 Change : 58.10 or 3.5% Silver Price Close Today : 31.49 Change : 1.57 or 5.0% Platinum Price Close Today : 1,574.00 Change : 27.10 or 1.7% Palladium Price Close Today : 649.00 Change : 22.55 or 3.5% Gold Silver Ratio Today : 52.42 Change : -0.81 or 0.98% Dow Industrial : 11,043.86 Change : 272.38 or 2.5% US Dollar Index : 78.12 Change : -0.14 or -0.2% Think of a waterfall. The water flows over the edge of a cliff, plummets to a pool below, splashes high up from the pool, then falls again to a lower pool. That pretty well describes and forecasts waterfall declines in markets, such as what y'all saw in SILVER and GOLD PRICES the last four days. When anything falls that far that straight down, it is bound to bounce. The bounce may last quite a while, the bounce may look stronger than a garlic milkshake, but it fails at last. I confess I am no more than a natural born fool from Tennessee, and fools -- the better fools, anyhow -- know enough to doubt themselves. Thus I might be wrong and there may be no lower prices in the futures than those already observed, but fool that I am, I still expect to see them. And bad as I got whipped by swapping out of SILVER into GOLD too soon, I am willing to risk waiting too long now by shooting for a higher target (57.5:1) than today's 51.638. May be wrong, but at least I won't be whipping myself for being rash. In a bounce worthy of Superman, the GOLD PRICE today shot up $57.90 (3.6%) to $1,650.60 at Comex close. High was $1,676.65, low $1,630.89. Hard for me to judge the 5 day chart and say whether the rise has ended or not, but plain enough is mighty resistance beginning at $1,700 and rising above like the Great Wall of China. This can go on for weeks with great frustration, trading sideways, rallying, fading, rallying again. Y'all need great patience, and 'twill pay off. The SILVER PRICE out-did GOLD by rising 5.25% (157c) to close Comex at 3149.7c. High, however, was 3347c, so SILVER gave back about half its gains. Stiffest resistance awaits silver at 3400c, then 3600c. One complication of waiting for lower SILVER PRICES is what happened in 2008. While the paper price dropped to 880c, the price for physicals never dropped below 1200c. Shortages emerged, and people just asked higher and higher premiums for whatever silver they had. Still, I have to wait for lower prices. I understand this will win me no bonus points with the silver and gold cheerleaders, but the chart says what it says. Do not misunderstand anything I have written above. You are watching a major correction in silver and gold, but not by any means the end of the bull market. From whatever low they eventually make, they will rocket back to double, triple, or quadruple that low. That's why this correction offers you such a rare opportunity to shoot fish in a rain barrel. About palladium: it broke about $700 then fell to $605. Today it closed at $648. Platinum broke about $1750, and yesterday's low was $1,475.30. Today it recovered to $1,558. None of this is helpful to silver and gold. Stocks staged a love fest around the globe yesterday and today, which only demonstrates that the public is even brain-deader and brain-washeder than ever I suspected. Looking for that story that affected the market last night, I went home and got on the internet. Y'all know what the cause of all this stock-buying euphoria was? A bucket. Yep, a bucket. The bucket is a dodge the banks and central banks and government -- working together in one vast, loving, and larcenous partnership -- use to solve the crisis after the banks blow up a bubble, and to shuck the loss off on taxpayers. Think of the early 1990s. Savings and Loans went on a lending spree, bubbled the real estate market, then it crashed and what on earth can we do with all these rotten loans? A bucket. The Resolution Trust Corporation. The government/banks create a bucket (a.k.a. Special Purpose Vehicle, Sublime Lending "Facility", or other hogwash) into which they can throw all the bubble's rotting offal, the toxic assets worth 10c on the dollar that the banks must carry on their balance sheets. They throw all the toxic assets into the bucket to buy time, then work them off little by little, usually picking the taxpayers' pockets in the process. Presto! The banks can sell their offal at 75c or 100c on the dollar to the bucket and clean up their balance sheets and the Taxpayers can pay. Normally this is done with such pompous sleight of hand, propaganda, and posturing that even the people being cheated -- the entire commonwealth -- think the banks are doing 'em a favor. So last night I was surprised to learn that all the hoo-hoo in stocks apparently had been built on limp rumors of a bucket for the European sovereign debt crisis. Friends, this is thin gruel, because this mess has become too big for that bucket. Besides, it's full of holes. I reckon they'll find out in a few days, and when the news of the bucket (as opposed to the rumor) hits the electrons, stocks will suddenly, rapidly, bloodily re-align themselves with reality. Dow today rose 1.33% or 146.83 points to close at 11,190.69. S&P500 added 12.43 points (1.07%) to close 1,175.38. Considering the high came at 11,369, the Dow's grip wasn't too tight. Lots of resistance at 11,300-11,400. Stocks -- the e. coli in your Investment Shopping Basket. On 27 September 1964 the Warren Commission issued its report on John F. Kennedy's assassination a year earlier. The report concluded that Lee Harvey Oswald had acted alone, then sealed all the documents for 50 years. Right. The Tooth Fairy had intended to join him, but she backed out at the last minute Argentum et aurum comparenda sunt -- -- Gold and silver must be bought. - Franklin Sanders, The Moneychanger The-MoneyChanger.com © 2011, The Moneychanger. May not be republished in any form, including electronically, without our express permission. To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate in a bubble, primary trend way down. Whenever I write "Stay out of stocks" readers inevitably ask, "Do you mean precious metals mining stocks, too?" No, I don't. Be advised and warned: Do NOT use these commentaries to trade futures contracts. I don't intend them for that or write them with that outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures.

Gold Decisions and The T-Bond. Get Real Posted: 27 Sep 2011 05:37 PM PDT Graceland Update

Silver Update 9/27/11: Occupy Silver Posted: 27 Sep 2011 05:31 PM PDT

Goldman's 'Unconventional' Inflation Policy vs. Austrian Deflation Endgame Posted: 27 Sep 2011 05:20 PM PDT An intriguing research note from Goldman's Global Economics team tonight brought up the subject of 'unconventional' unconventional policies and how they ended the 'first' Great Depression. This gentle push towards softening the inflation leg of the Fed's mandate 'stool', while interesting in its own right given Goldman's policy-leading record, reminded us, by contrast, of a paper discussing how deflation is perhaps the more likely outcome when one shifts perspective from Keynesianism to a more Austrian view of the Fed's options. We are not choosing sides but for a quiet evening following a hope-shattering sell-off in risk assets, we thought it worth reflection. Goldman Sachs: "Unconventional" Unconventional Policies and the End of the Great Depression We argued in last Friday's US Economics Analyst that the Fed retains a number of "unconventional" unconventional options that would entail pushing inflation above the Fed's "mandate consistent" rate for a number of years through a temporary change in the Fed's inflation goal. In an interesting paper, Gauti Eggertsson of the New York Fed argues that Franklin D. Roosevelt's successful implementation of such policy actions in the 1930s – adopting a price level target and combining it with fiscal stimulus – shifted expectations and thereby played a key role in lifting the economy out of deflation and depression. Eggertsson's analysis holds two potential lessons for US policymakers in the current context: (1) credible commitment to raising inflation expectations could deliver a powerful boost to the economy, and an effective way to enhance the credibility would be to pair such a policy change with additional fiscal stimulus; (2) commitment to raise inflation to boost the economy is most desirable – and thus most likely – during times when the economy is weak and inflation is below the Fed's target. In Friday's US Economics Analyst, we explored the Fed's options for delivering additional monetary stimulus. (See "The Fed's "Unconventional" Unconventional Options," US Economics Analyst, September 23, 2011.) We believe the Fed is most likely to make further use of the "conventional" unconventional monetary policies already pursued through renewed asset purchases. But the Fed also retains a set of "unconventional" unconventional options that would entail pushing inflation above the Fed's "mandate consistent" rate for a number of years through a temporary change in the Fed's inflation goal. Doing so could boost the economy by pushing down real interest rates and by inflating away some private sector debt. Proposals to do so include a higher inflation target, the "Evans proposal," and a price/nominal GDP level target.   Our simulations of a "toy economy" suggest that the boost to the economy from such policies could be sizable if the Fed managed to commit credibly to their implementation. But this would require a delicate balancing act. In the short term, the Fed would need to "commit to being irresponsible." That is, the real interest rate would only fall if the Fed managed to commit credibly to generating higher inflation in the future. But promising to do so is difficult because the Fed cannot cut the funds rate any further to boost the economy and, once inflation has risen—and real rates fallen to stimulate the economy—the Fed has an incentive to renege on its promise and raise interest rates prematurely. Markets understand this and no short-term benefits might be achieved. In the long run, the Fed would need to return to its usual "responsible" behavior and keep inflation in the "mandate-consistent" range. Although the Fed would again have the funds rate at its disposal to do so, the concern is that a temporary change in the Fed's inflation goals could lead to a persistent increase in inflation expectations and that a return to price stability would require a prolonged period of tight monetary policy and subdued growth in the future.   In an interesting paper, Gauti Eggertsson of the New York Fed argues that Franklin D. Roosevelt's successful implementation of such "unconventional" unconventional policies was a key factor in ending the Great Depression. (See "Great Expectations and the End of the Great Depression," American Economic Review, 98:4, 2008.) President Roosevelt took office in March 1933 at the height of the Great Depression: real GDP had declined by 13.4% in 1932—pushing the unemployment rate up to 25%—and deflation was running at double-digit levels (see exhibit below). Conventional monetary policy, however, was powerless as short-term nominal interest rates were stuck near zero (see exhibit). With negative inflation rates, real short-term interest rates—both ex-post and ex-ante—were therefore sharply positive, acting as a further drag on activity. (The ex-ante measure of the real interest rate is taken from a paper by Stephen Cecchetti, who estimates inflation expectations from available data on prices, interest rates and money growth. For details see "Prices During the Great Depression: Was the Deflation of 1930-32 Really Unanticipated?" American Economic Review, 82:1, 1992).   The Economy Climbed Out of Depression after 1933, As Real Interest Rates Declined Sharply   In this environment, President Roosevelt implemented two radical new policies. First, he abolished the gold standard in 1933—giving the administration unlimited power to print money—and announced the objective of inflating the price level to pre-Depression levels. That is, he adopted a price-level target that was designed to raise inflation for a number of years. Second, Eggertsson argues that President Roosevelt abandoned prior balanced budget principles and sharply expanded federal spending by running record-high budget deficits. Between 1932 and 1934, federal consumption and investment spending almost doubled.   Eggertsson shows that this policy regime change was key in breaking out of the Great Depression by affecting expectations about future policy: the adoption of price level targeting was a commitment to raise inflation and fiscal stimulus made this commitment credible. That is, the cooperation of monetary and fiscal policies shifted expectations from "contractionary" (the private sector expected future economic contraction and deflation) to "expansionary" (the private sector expected future expansion and inflation). Although short-term nominal interest rates continued to be stuck at zero, inflation expectations rose and real interest rates declined sharply after 1933 (see exhibit above). At the same time, the economy received a boost and the economy climbed out of deflation (see exhibit).   We can draw two potential lessons from Eggertsson's analysis for US policymakers in the current context. First, credible commitment to raising inflation expectations could deliver a powerful boost to the economy and the best way to enhance the credibility of any such commitment would be to pair a temporary change in the Fed's inflation goal with additional stimulus. Fiscal stimulus would probably be the most effective option but, if unavailable, the Fed could combine any promise to boost inflation with additional balance sheet expansion. Second, a commitment to raise inflation to boost the economy is most desirable during times when the economy is weak and inflation is below the Fed's target (as was the case when President Roosevelt took office). Otherwise, the Fed would need to trade off the costs of above-target inflation with more growth. The likelihood that the Fed would adopt an "unconventional" unconventional policy would thus rise sharply should deflationary concerns re-emerge going forward.   Which contracts interestingly with the insights of the following article, particularly the author's perspective on the Fed's raison d'etre (for the benefit of the banking class) versus its capability to print, advocating a slow-and-steady 'controlled deflation': Austrian_Econ_Deflation

Goldman's 'Unconventional' Inflation Policy vs. Austrian Deflation Endgame Posted: 27 Sep 2011 05:20 PM PDT An intriguing research note from Goldman's Global Economics team tonight brought up the subject of 'unconventional' unconventional policies and how they ended the 'first' Great Depression. This gentle push towards softening the inflation leg of the Fed's mandate 'stool', while interesting in its own right given Goldman's policy-leading record, reminded us, by contrast, of a paper discussing how deflation is perhaps the more likely outcome when one shifts perspective from Keynesianism to a more Austrian view of the Fed's options. We are not choosing sides but for a quiet evening following a hope-shattering sell-off in risk assets, we thought it worth reflection. Goldman Sachs: "Unconventional" Unconventional Policies and the End of the Great Depression We argued in last Friday's US Economics Analyst that the Fed retains a number of "unconventional" unconventional options that would entail pushing inflation above the Fed's "mandate consistent" rate for a number of years through a temporary change in the Fed's inflation goal. In an interesting paper, Gauti Eggertsson of the New York Fed argues that Franklin D. Roosevelt's successful implementation of such policy actions in the 1930s – adopting a price level target and combining it with fiscal stimulus – shifted expectations and thereby played a key role in lifting the economy out of deflation and depression. Eggertsson's analysis holds two potential lessons for US policymakers in the current context: (1) credible commitment to raising inflation expectations could deliver a powerful boost to the economy, and an effective way to enhance the credibility would be to pair such a policy change with additional fiscal stimulus; (2) commitment to raise inflation to boost the economy is most desirable – and thus most likely – during times when the economy is weak and inflation is below the Fed's target. In Friday's US Economics Analyst, we explored the Fed's options for delivering additional monetary stimulus. (See "The Fed's "Unconventional" Unconventional Options," US Economics Analyst, September 23, 2011.) We believe the Fed is most likely to make further use of the "conventional" unconventional monetary policies already pursued through renewed asset purchases. But the Fed also retains a set of "unconventional" unconventional options that would entail pushing inflation above the Fed's "mandate consistent" rate for a number of years through a temporary change in the Fed's inflation goal. Doing so could boost the economy by pushing down real interest rates and by inflating away some private sector debt. Proposals to do so include a higher inflation target, the "Evans proposal," and a price/nominal GDP level target.   Our simulations of a "toy economy" suggest that the boost to the economy from such policies could be sizable if the Fed managed to commit credibly to their implementation. But this would require a delicate balancing act. In the short term, the Fed would need to "commit to being irresponsible." That is, the real interest rate would only fall if the Fed managed to commit credibly to generating higher inflation in the future. But promising to do so is difficult because the Fed cannot cut the funds rate any further to boost the economy and, once inflation has risen—and real rates fallen to stimulate the economy—the Fed has an incentive to renege on its promise and raise interest rates prematurely. Markets understand this and no short-term benefits might be achieved. In the long run, the Fed would need to return to its usual "responsible" behavior and keep inflation in the "mandate-consistent" range. Although the Fed would again have the funds rate at its disposal to do so, the concern is that a temporary change in the Fed's inflation goals could lead to a persistent increase in inflation expectations and that a return to price stability would require a prolonged period of tight monetary policy and subdued growth in the future.   In an interesting paper, Gauti Eggertsson of the New York Fed argues that Franklin D. Roosevelt's successful implementation of such "unconventional" unconventional policies was a key factor in ending the Great Depression. (See "Great Expectations and the End of the Great Depression," American Economic Review, 98:4, 2008.) President Roosevelt took office in March 1933 at the height of the Great Depression: real GDP had declined by 13.4% in 1932—pushing the unemployment rate up to 25%—and deflation was running at double-digit levels (see exhibit below). Conventional monetary policy, however, was powerless as short-term nominal interest rates were stuck near zero (see exhibit). With negative inflation rates, real short-term interest rates—both ex-post and ex-ante—were therefore sharply positive, acting as a further drag on activity. (The ex-ante measure of the real interest rate is taken from a paper by Stephen Cecchetti, who estimates inflation expectations from available data on prices, interest rates and money growth. For details see "Prices During the Great Depression: Was the Deflation of 1930-32 Really Unanticipated?" American Economic Review, 82:1, 1992).   The Economy Climbed Out of Depression after 1933, As Real Interest Rates Declined Sharply   In this environment, President Roosevelt implemented two radical new policies. First, he abolished the gold standard in 1933—giving the administration unlimited power to print money—and announced the objective of inflating the price level to pre-Depression levels. That is, he adopted a price-level target that was designed to raise inflation for a number of years. Second, Eggertsson argues that President Roosevelt abandoned prior balanced budget principles and sharply expanded federal spending by running record-high budget deficits. Between 1932 and 1934, federal consumption and investment spending almost doubled.   Eggertsson shows that this policy regime change was key in breaking out of the Great Depression by affecting expectations about future policy: the adoption of price level targeting was a commitment to raise inflation and fiscal stimulus made this commitment credible. That is, the cooperation of monetary and fiscal policies shifted expectations from "contractionary" (the private sector expected future economic contraction and deflation) to "expansionary" (the private sector expected future expansion and inflation). Although short-term nominal interest rates continued to be stuck at zero, inflation expectations rose and real interest rates declined sharply after 1933 (see exhibit above). At the same time, the economy received a boost and the economy climbed out of deflation (see exhibit).   We can draw two potential lessons from Eggertsson's analysis for US policymakers in the current context. First, credible commitment to raising inflation expectations could deliver a powerful boost to the economy and the best way to enhance the credibility of any such commitment would be to pair a temporary change in the Fed's inflation goal with additional stimulus. Fiscal stimulus would probably be the most effective option but, if unavailable, the Fed could combine any promise to boost inflation with additional balance sheet expansion. Second, a commitment to raise inflation to boost the economy is most desirable during times when the economy is weak and inflation is below the Fed's target (as was the case when President Roosevelt took office). Otherwise, the Fed would need to trade off the costs of above-target inflation with more growth. The likelihood that the Fed would adopt an "unconventional" unconventional policy would thus rise sharply should deflationary concerns re-emerge going forward.   Which contracts interestingly with the insights of the following article, particularly the author's perspective on the Fed's raison d'etre (for the benefit of the banking class) versus its capability to print, advocating a slow-and-steady 'controlled deflation': Austrian_Econ_Deflation

Silver Price Changes Posted: 27 Sep 2011 04:58 PM PDT (Down 36%, and back up 29%!?!) Silver Stock Report by Jason Hommel, September 27th, 2011 This kind of volatility we are seeing in silver is insane, and is further proof that the paper market is manipulating the price! Silver hit a low of $26 yesterday, yet 3 days earlier it was $40.50! $40.50 minus $26 = $14.50/oz. dip. $14.50/$40.50 = 35.8% drop in three days!?! And yet, this morning, silver hit a high of $33.65. In just over 24 hours, silver bounced back by about 29%? $33.65 minus $26 = $7.65/oz. gain. $7.56/$26 = 29.4% gain in just over 24 hours!?! I know this kind of market volatility and price changes are unusual. It's unusual even for a tiny $3 million market cap penny stock! And the silver market is a major $30 billion annual industry, which is 10,000 times larger than more stable penny stocks! How can a dealer deal at 3% or less in this kind of environment? We, at www.jhmint.com were super busy on Monday, 9-26-11. We sold $260,000 worth of silver and...

Richard Russell - You Must Own Gold in World Drowning in Fiat Posted: 27 Sep 2011 04:50 PM PDT With extreme volatility across markets globally, including gold and silver, here are some key points the Godfather of newsletter writers, Richard Russell, wrote about in last couple of commentaries, "Gold -- Here we have a pattern breaking down but gold is still trading ABOVE its 200-day moving average. I think a lot of gold has been sold to cover losses and margin calls. MACD is deeply oversold, and RSI is becoming oversold. That should slow the decline in gold. The big picture that is affecting everything is massive world debt, de-leveraging, and nobody knows how or can agree on halting deflation." This posting includes an audio/video/photo media file: Download Now

Viet Nam State Bank Authorises More Gold Imports as Prices Soar Posted: 27 Sep 2011 03:41 PM PDT from VNAgency.com.vn: HA NOI — The State Bank of Viet Nam has designated businesses that will be allowed to import additional gold in an effort to cool down the domestic price. The bank said on Monday that gold price had dropped to its lowest level in weeks to just US$1,532.45 per ounce on global markets – from a record high of $1,920 per ounce on September 6 – leading to dramatic fluctuations on the domestic market. The result has been a domestic gold price that has remained for weeks much higher than the world price. On Monday afternoon, after plummeting to VND43 million ($2,067.30) per tael, the domestic gold price quickly soared to VND45 million ($2,163.46) per tael – VND4 million ($192.3) per tael above the global price. (One tael is equivalent to 1.2 ounces). At the same time, the exchange rate between the Vietnamese dong and the US dollar also spiked dramatically on the black market, rising to VND21,300 per dollar, even as interbank and official rates remained at VND20,628 and VND20,834, respectively. The new gold imports, by increasing supply, were expected to help stabilise some of these fluctuations. Read More @ VNAgency.com.vn

Asia Gold: Buyers Rush in After Price Slump; Premiums Up Posted: 27 Sep 2011 03:38 PM PDT from AsiaOne.com: SINGAPORE/MUMBAI – Asia's gold bugs have raced to snatch up physical material after the sharp correction in prices, just as the world's biggest gold consumer India prepares for its festival season. The surge in buying interest boosted gold premiums in the region. In Tokyo, the spread between local and global prices returned to the positive territory for the first time since March. A strong rally in the dollar and margin calls triggered a 10-per cent tumble over just four sessions in spot gold. Prices fell to a 7-1/2-month low of US$1,534.49 (S$1,971.97) on Monday, 20 per cent below the record of US$1,920.30 hit in early September, and rebounded to about US$1,650. Read More @ AsiaOne.com

17 Facts That Prove That The Average American Family Is Getting Absolutely Pulverized By This Economy Posted: 27 Sep 2011 03:30 PM PDT from The Economic Collapse Blog: How in the world does the average American family survive in this economy? The median household income is a little bit less than $50,000 a year right now. So let's call that about $4000 a month. But before any of that money gets spent, you have to take out at least $1000 in taxes. That leaves about $3000 a month to pay all the bills with. With that $3000 you have to pay the mortgage (or rent), make the car payments, make the student loan payments, pay for power and water, pay for health insurance, pay for home insurance, pay for car insurance, pay the phone bill, pay the Internet bill and pay the cable bill. On top of all that, every member of the family needs three meals a day and the cars need to be filled up with gasoline or they won't go anywhere. Of course I haven't even mentioned expenses that don't happen every month such as car repairs or new shoes. No wonder so many families are feeling so financially stressed! The truth is that American families are getting squeezed harder than they have been in ages. The number of good jobs is declining, incomes are going down, and the cost of living just keeps going up. The following are 17 facts that prove that the average American family is getting absolutely pulverized by this economy…. Read More @ TheEconomicCollapseBlog.com

Pat Heller: How central banks might have smashed gold and silver down Posted: 27 Sep 2011 03:16 PM PDT 11:17p ET Tuesday, September 27, 2011 Dear Friend of GATA and Gold: With his new commentary at Numismaster, Patrick A. Heller of Liberty Coin Service in Michigan speculates on the possible mechanisms of central bank market manipulation that sent gold and silver prices plunging just as the eurozone was about to break down. Heller writes: "First, it is entirely possible that European central banks of nations in the eurozone could be liquidating some of their gold reserves as a desperate move to beef up their fiat currency reserves to stave off default on their debts. If this is happening to any degree, that could help explain the why short-term gold and silver lease rates have recently turned negative. "Second, it is possible that the U.S. government may have informed the Chinese government in advance that is was preparing a major intervention to suppress gold and silver prices and asked the Chinese to refrain from jumping in to purchase physical metals until the market had been pushed near the bottom. "Last week a longtime reliable source told me that there were massive quantities of Asian buy orders placed in the London market to execute if spot prices dropped to $1,760 all the way down to $1,715. I have every reason to believe that at least a sizable percentage of these buy orders may be have placed by the Chinese government as this would be consistent with their trading activity since 2003. If the Chinese were alerted that they could have the opportunity to purchase gold even cheaper than their standing buy orders, it would be reasonable for them to cooperate by putting their buy orders prices in the $1,700s. "Third, it is possible that the U.S. government may have directly intervened in suppressing prices, through one or more agencies that are not drawing close scrutiny from Congress or the public. The prime suspect would be the Exchange Stabilization Fund, which was established in 1934. The ESF is an emergency reserve, not subject to congressional oversight, normally used to intervene (manipulate) in foreign exchange markets. In 1970 its mandate was changed by Congress to allow the secretary of the treasury, with the approval of the president, to use funds in the ESF to 'deal in gold, foreign exchange, and other instruments of credit and securities." Thus it would be possible and legal for the U.S. government to surreptitiously manipulate the gold market. The reason I consider this to be a plausible reason that gold and silver prices were suppressed is that the major beneficiaries of lower prices would be the U.S. government, its trading partners, and allies." Heller's commentary is headlined "Buy Metals at Bargain Prices" and you can find it at Numismaster here: http://www.numismaster.com/ta/numis/Article.jsp?ad=article&ArticleId=241... 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: The Silver Summit Thursday-Friday, October 20-21, 2011 Davenport Hotel, Spokane, Washington http://cambridgehouse.com/conference-details/the-silver-summit-2011/48 New Orleans Investment Conference Wednesday-Saturday, October 26-29, 2011 Hilton New Orelans Riverside Hotel http://www.neworleansconference.com/ 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 Platinum Drills 49.5 Meters Grading 1.27 g/t PGM+Au at Yukon Wellgreen Project Company Press Release August 22, 2011 Prophecy Platinum Corp. (TSX-V: NKL, OTC-QX: PNIKF, Frankfurt: P94P) announces results from its 2011 drilling program for its first completed hole on the Wellgreen Project in the Yukon Territory, Canada. Borehole WS11-184 encountered 472.6 meters of mineralization grading 0.43% nickel equivalent from surface to the footwall contact. Within this larger swath of mineralization the hole encountered 49.5 meters of 1.27 grams per ton platinum group metals plus gold, 0.71% nickel, and 0.45% copper (or 1.11% nickel equivalent). The geology transitioned from blebby disseminated to net-textured to massive sulphide approaching the footwall contact grading 6.3% nickel, 1.7% copper, 2.7 grams per ton platinum, 1.6 grams per ton palladium, 0.17 grams per ton gold, and 3.4 grams per ton silver. The drilling zones and results are tabulated here, with more information: http://www.prophecyplat.com/news_2011_aug22_prophecy_platinum_wellgreen_...

Gold Chart And Comments Posted: 27 Sep 2011 03:16 PM PDT For more commentary from Trader Dan Norcini check out his website at www.TraderDan.net Dear CIGAs, I am basically reposting the 4 hour chart that I sent up yesterday as it has been a good guide for locating resistance levels and support levels. I noted yesterday that gold would run into selling near the $1680 Continue reading Gold Chart And Comments

Vietnam hopes to rig domestic gold market before others do Posted: 27 Sep 2011 02:41 PM PDT State Bank Authorizes More Gold Imports as Prices Soar From Viet Nam News, Hanoi Wednesday, September 28, 2011 http://vietnamnews.vnagency.com.vn/Economy/215905/State-Bank-authorises-... The State Bank of Vietnam has designated businesses that will be allowed to import additional gold in an effort to cool down the domestic price. The bank said on Monday that gold price had dropped to its lowest level in weeks to just US$1,532.45 per ounce on global markets -- from a record high of US$1,920 per ounce on September 6 -- leading to dramatic fluctuations on the domestic market. The result has been a domestic gold price that has remained for weeks much higher than the world price. On Monday afternoon, after plummeting to Viet Nam Dong 43 million (US$2,067.30) per tael, the domestic gold price quickly soared to VND45 million (US$2,163.46) per tael -- VND4 million (US$192.3) per tael above the global price. (One tael is equivalent to 1.2 ounces). ... Dispatch continues below ... ADVERTISEMENT Zacks Starts Coverage of Golden Phoenix with 'Outperform' Rating Friday, September 9, 2011 SPARKS, Nevada -- Golden Phoenix Minerals Inc. (OTC Bulletin Board: GPXM) announced today that Zacks Investment Research has initiated coverage of the company with a comprehensive report giving a rating of "outperform." The Zacks report provides information about the company's business model, its royalty mining growth strategy, recent acquisitions, drilling plans, and gold production. The report is available at the Golden Phoenix Internet site here: http://goldenphoenix.us/pdf/GPXM_InitiationReport.pdf Golden Phoenix Minerals Inc. is a Nevada-based mining company whose focus is royalty mining in the Americas. Golden Phoenix is committed to delivering shareholder value by identifying, acquiring, developing, and joint-venturing gold, silver, and strategic metal deposits. Golden Phoenix owns, has an interest in, or has entered agreements with respect to mineral properties in the United States, Canada, Panama, and Peru, including the company's 30 percent interest in the Mineral Ridge gold project near Silver Peak, Nevada. Please visit the Golden Phoenix Internet site here: http://goldenphoenix.us For the company's full announcement of the coverage by Zacks, please visit: http://goldenphoenix.us/press-release/zacks-investment-research-initiate... At the same time, the exchange rate between the Vietnamese dong and the US dollar also spiked dramatically on the black market, rising to VND21,300 per dollar, even as interbank and official rates remained at VND20,628 and VND20,834, respectively. The new gold imports, by increasing supply, were expected to help stabilise some of these fluctuations. However, Nguyen Thanh Truc, general director of Agribank Gold Joint Stock Co., warned that gold traders would continue to be able to set their own prices without management from authorities, and some companies might continue to hold supplies back from the market, contributing to price manipulation. By late yesterday, DOJI Gold and Germs Group was posting buy/sell prices of VND45.05 million/VND44.6 5 million per tael, while the world spot price on the London Bullion Market was US$1,649.90 an ounce. The black market foreign exchange rate had also eased back to VND21,270 per dollar. Eximbank general director Truong Van Phuoc said that it was necessary to import more gold to cool down the overheated domestic market, noting that domestic commercial banks were holding a significant quantity of US dollars, so the additional gold imports would not affect foreign currency reserves. Meanwhile, Tran Thanh Hai, general director of the Vietnam Gold Business Co., suggested that the central bank issue gold certificates to sell to individuals at prices below the market price, discouraging citizens from buying and selling gold on the market and incurring risks, while helping the country retain its foreign currency reserves. State Bank deputy governor Nguyen Dong Tien also revealed yesterday that the central bank would submit its final draft of a decree on the gold market to the Government for approval this week. Under the draft, the State Bank would control and intervene in the gold market if needed, preventing speculation and price manipulation. Trading in gold bars would also be restrained, Tien said. Individuals and organisations who wanted to do business in gold jewelry or artworks would be required to establish enterprises and meet several stringent requirements, he added. Meanwhile, the central bank has warned investors to be wary of speculation and manipulation when trading in gold. * * * Join GATA here: The Silver Summit Thursday-Friday, October 20-21, 2011 Davenport Hotel, Spokane, Washington http://cambridgehouse.com/conference-details/the-silver-summit-2011/48 New Orleans Investment Conference Wednesday-Saturday, October 26-29, 2011 Hilton New Orelans Riverside Hotel http://www.neworleansconference.com/ 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

Seems Like Mexico Purchased 110 Tons Of Gold That Don't Exist Posted: 27 Sep 2011 01:46 PM PDT by Avery Goodman, SeekingAlpha.com: Back on March 9, 2009, I devoted an entire article to a discussion of the unallocated precious metals storage schemes that are being marketed by LBMA member banks. See Jeff Christian's March 25, 2010 testimony in my mico-doc: "The Curious Case For $936 Silver" As explained in more detail in that article, both small investors and large institutions have been "purchasing" what they think are precious metals, but ending up paying banks to "store" vault air. To make matters worse, Jeffrey Christian, a gold market analyst who has often worked for bullion banks, testified at a CFTC hearing on March 25, 2010, and let it slip that the LBMA banks have only about 1% of all the physical gold they've allegedly "sold" and "stored", after you add up both the derivatives they've issued, and the unallocated storage schemes. This means that if more than a few percent worth of the owners of the unallocated gold ever demanded delivery at the same time, they would get nothing. The same is true in the silver market. Read More @ SeekingAlpha.com

The Chinese Mean To Control The Global Gold Market Posted: 27 Sep 2011 01:42 PM PDT by Robert Lenzner, Forbes.com: Get ready for the Pan Asian Gold Exchange, scheduled to open in June, 2012 in Kunming City, Yunman Province– the gateway to all of Southeast Asia. This is serious, as the Pan Asian Gold Exchange is a part of China's five year plan– which means it is part of China's strategy for dominance in global financial markets and the global economy. Pan Asian will allow Chinese to speculate in gold futures contracts or buy physical gold through an account with a bank or broker. All 320 million customers of the giant Agricultural Bank of China will. simply be able to use their Renminbi, the Chinese currency, from their bank accounts to trade gold. Sounds bloody dangerous doesn't it. It means the spot market in gold could be headed for China– and away from London's Metals Exchange or the Comex in New York. I'd like to know who is going to oversee and regulate all this action. For example, when the Comex raises margin requirements to dampen speculative fervor– will China be governed by that? I doubt it very much. Read More @ Forbes.com

Gold as a Safe Haven is Worthless! Posted: 27 Sep 2011 01:41 PM PDT If there is one thing we've learned about gold in recent years – and recent days -*it is this: gold is not a haven investment… There are many theories*about gold’s correction. [Let's take a look.] Words: 781 So says David Berman ([url]www.theglobeandmail.com/globe-investor/markets/markets-blog/[/url]) in edited excerpts from an article* entitled Gold Is For The Fool – If You Are Looking For Safety*which Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!), has further edited for the sake of clarity and brevity to ensure a fast and easy read. The author's views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement.* Berman goes on to say, in part: [INDENT]We learned this lesson before, when gold – pitched by some observers as the safest thing going, next to matches an...

12 Reasons Not To Fear September’s Gold And Silver Price Smackdown Posted: 27 Sep 2011 01:27 PM PDT by Scott Wolf, Dont-Tread-On.Me: I absolutely love the precious metals price correction for it allows me to buy more! Nothing would make me happier than to see $800 gold and $10 silver again. The dollar price means absolutely nothing to me. The NWO's continuing war with precious metals investors is as transparent as it is futile.Their predictable behavior this month is just more of the same and fits hand in glove with the last three years.The last thing men like the George Soros or David de Rothschild want is for regular people to invest in an asset class that has marked the course of human economic progress for thousands of years.These cowards will stop at nothing to postpone their day of reckoning.But fail they shall. Global investors around the world are finally embracing investment alternatives outside the purview of the fractional reserve banking system and the elites know it. Take some time to consider these 12 disturbing facts and developments before liquidating your metals position, but, most importantly, LEARN TO THINK FOR YOURSELF.The following represent nothing less than a prelude to revolution. Read More @ Dont-Tread-On.Me

Gold And Silver: Free Markets? Posted: 27 Sep 2011 01:20 PM PDT The price manipulations fail when the public goes on a buying spree like they did on Thursday and Friday...and with a vengence Monday. [MUST READING] Ranting Andy Alert: The Greatest Precious Metals Buying Opportunity of All Time So be comforted, readers, that the gold and silver action we saw the last three days was a DESPERATE, ORCHESTRATED PAPER ATTACK by the Cartel to deflect safe haven buying away from Precious Metals while global stock, credit, and commodity markets collapsed. And if THAT comforts you, get ready for what the AFTERMATH of this PAPER SMASH took the form of, a textbook example of the physical truth "EVERY ACTION HAS A REACTION." As I noted yesterday, not only have OFFICIAL RESPONSES to the global equity and credit collapses been brazenly manipulative, they also SLOPPY and UNAUTHORITATIVE. Their slip is clearly showing, as observed by the HASTE and AMBIGUITY of their actions, such as the vague G-7 and G-20 communiques, the blatant Swiss Franc and Japanese Yen devaluations, the shocking Slovenian government collapse, the $500 billion joint U.S. dollar bank credit line, the lack of clarity from the Bundesbank and ECB regarding the all-important proposed changes to the EFSF stability fund, and of course the ghastly FOMC Fed statement following its vaunted two-day meeting. Yes, this all happened in the past two WEEKS! Anyhow, the situation is clearly becoming so dire, and the OFFICIAL FEAR of a Precious Metals mania so acute, that the ALL-OUT PAPER ATTACK was orchestrated just as gold and silver were about to EXPLODE. By the way, does anyone remember August, i.e. LAST MONTH, when gold and silver SOARED for the exact same reasons the media is portraying for why it is PLUMETTING now? Unfortunately for the bad guys, they miscalculated what the public's RESPONSE would be. During past PAPER gold and silver attacks, individuals and institutions alike would curl up in the fetal position, waiting for the storm to pass and upward PM momentum to return before wading back into the market. However, in today's environment of PENDING GLOBAL ECONOMIC COLLAPSE, massive buying is emerging from all corners of the earth, including INDIVIDUALS, INSTITUTIONS, and SOVEREIGNS! Between my Friday evening bike ride and Saturday morning soccer game, I was BESEIGED with information depicting ASTOUNDING PHYSICAL BUYING of GOLD and, particularly, SILVER. This information is so powerful, it could serve to ignite the final Cartel-busting pushes above $2,000/oz and $50/oz, respectively, in my opinion. Here are some examples, both empirical and anecdotal: READ MORE: Gold Rebounds After Biggest 3-day Drop Since 1983- Bloomberg Gold gained for the first time in five days in New York as the biggest three-day drop in 28 years spurred some investors to buy the metal on concern about economic growth and debt crises. I don't write the headlines...I just laugh at them. Gold & Silver Bubbles, Panics and Stink Bids By Jeff Berwick The Dollar Vigilante If/when we do reach the end of this gold bull market there is one thing that is certain: it will not be called by the mainstream media. In fact, the nightly newscast will likely lead off with the "news" readers telling you to rush out and buy gold. For now, gold and silver haven't even entered into a bubble yet. They are still catching up to the price of everything else... and lag dramatically the one true bubble. The bubble in government debt. Is Gold No Longer A Safe Haven? Not According To Capital Economics: "Gold Will Surge When Euro Crisis Escalates" Financial Warfare by Mike Krieger What has ensued since the Swiss intervention has been nothing short of total currency chaos throughout the emerging markets world.  Gold is not falling, emerging market currencies have just been devalued. This is what might be expected within the current macro environment of general fiat currency death as the globe enters a recession within a depression. Things are going to be very, very choppy and I would be extremely cautious in all markets but physical precious metals should absolutely be accumulated on weakness. The system has already blown up and while that makes thing extra volatile and confusing, as JP Morgan said in 1912 "gold is money, everything else is credit." It shall be seen to be true again.

Doug Casey: How to Prepare for When Money Dies Posted: 27 Sep 2011 01:16 PM PDT http://www.caseyresearch.com/editorial.php?page=articles/doug-casey-how-prepare-when-money-dies&ppref=TBP419ED0911B An eye-opening interview with renowned speculator Doug Casey, conducted by Karen Roche and JT Long of The Gold Report. Doug explains why fiat currencies around the world are destined for collapse… and what investors can, and should, do to protect themselves.    If dollar-dumping turns from a trickle into a flood, look out. Exploding [...]

Gold and silver bull will rescue recent buyers, Leeb tells King World News Posted: 27 Sep 2011 01:13 PM PDT 9:10p ET Tuesday, September 27, 2011 Dear Friend of GATA and Gold (and Silver): Money manager Stephen Leeb tonight explains to King World News how continuing bull markets in gold and silver will rescue even those who bought the metals and mining shares at their recent highs. You can find an excerpt from the interview at the King World News blog here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/9/27_St... CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. ADVERTISEMENT Be Part of a Chance to Discover Multi-Million-Ounce Gold and Silver Deposits in Canada Northaven Resources Corp. (TSX-V:NTV) is advancing five gold and silver projects in highly prospective and politically stable British Columbia, Canada. Check out the exploration program on our Allco gold/silver project : -- A large (13,000 hectare) property, covering more than 15 square kilometers of a regional mineralized trend just 3km from a recently announced 1.2-million-ounce gold and 15-million-ounce silver deposit. -- The property hosts historic high-grade silver workings and many mineral showings as well as former mines at the property's northern and southern boundaries. -- A deep-penetrating airborne geophysics survey has just been completed on the entire property and neighboring deposits and its results are eagerly awaited. To learn more about the Allco property or Northaven's other gold and silver projects, please visit: http://www.northavenresources.com Or call Northaven CEO Allen Leschert at 604-696-3600. Join GATA here: The Silver Summit Thursday-Friday, October 20-21, 2011 Davenport Hotel, Spokane, Washington http://cambridgehouse.com/conference-details/the-silver-summit-2011/48 New Orleans Investment Conference Wednesday-Saturday, October 26-29, 2011 Hilton New Orelans Riverside Hotel http://www.neworleansconference.com/ 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 Lewis E. Lehrman on How to Solve the U.S. Debt Problem Lewis E. Lehrman, chairman of the Lehrman Institute, sponsor of The Gold Standard Now project, advises that to reduce the $1 1/2 trillion U.S. deficit, the Republican Party must initiate an investment program. Working Americans are not saving, which enables the banks to lead the country into a cycle of debt, leverage, boom, panic, and bust. Lehrman says: Eliminating the budget deficit of a trillion and a half dollars cannot be done overnight. The proposal by U.S. Rep. Paul Ryan was very dramatic -- one Republican called it radical -- but it was not happily received. The solution, of course, is to design an American program for prosperity, because you can solve these entitlement problems with a growing economy. We need a tremendous program of investment, and investment comes from savings. When you pay savers, middle-income professionals, and working people 0 percent at the bank, you are not going to encourage them to save. Then we are left with a bank cycle of debt, leverage, boom, panic, and bust." To read more and to sign up for The Gold Standard Now's free, noncommercial, weekly report, "Prosperity through Gold," please visit: http://www.thegoldstandardnow.org/gata

Inflation As Solution: Hosing The Middle Class Posted: 27 Sep 2011 01:10 PM PDT By Wolf Richter   www.testosteronepit.com The FOMC's often and clearly stated policy of creating sufficient inflation has been effective: up 3.8% from August 2010 and up a breathtaking 36% from January 2000. But there are winners and losers. Tax revenues? Huge winner. Yes, inflation is taxable. If we bought a stock in early 2000 for $100, and we sold it today for $136, we'd pay taxes on a "gain" of $36 though that "gain" just kept us even with inflation. Stocks? Losers. For the NASDAQ to reach its 2000 high on an inflation-adjusted basis, it would have to close at 6,800, the S&P 500 at 2,040, and the Dow at 15,000 (based on the BLS CPI Inflation Calculator). OK, we did earn dividends, but we also paid fees, commissions, and taxes. Yet the eye-popping ups and downs of the markets tend to distract us from the insidious, hidden worm that gnaws away at our assets day and night. Home owners? Losers. The housing nightmare hasn't fully played out yet, but it's already destroying the old saw that housing keeps up with inflation: Adjusted for inflation, home values are now back at a level they first touched in 1989 (excellent graph here). Bondholders and savers? Huge losers. The Fed has taken the credit markets hostage with its asset purchases and interest rate policies, and the U.S. Government owns 95% of the mortgage market outright through Fannie Mae, Freddie Mac, and the FHA. Between them, they can do with the credit markets whatever they want. So the Fed has forced yields below the rate of inflation across the entire yield curve. Bondholders and savers turn over their money without being compensated for inflation or credit risk, and their income streams have dried up. Gold and silver? That'll be a fun conversation a few years from now. Debtors? It depends. Inflation is good for debtors if their salary, operating profit, etc. rises at the same rate or faster than inflation. The $1,000 payment of a fixed rate 30-year mortgage will get easier to make as income goes up with inflation. A business that can raise its prices and keep its costs down (!) will also benefit. Middle class? It gets hosed. Wage increases make the Fed nervous. It wants inflation in goods and services. But when wages go up, all hell breaks lose, and it slams on the brake. Alan Greenspan's Fed famously did so in 1999 - 2000, and then started again in 2005. In 2006, Ben Bernanke's Fed continued the rate increases. The stated goal was to avoid an "inflation spiral" where rising wages and prices push each other up. The actual result was that real wages (adjusted for inflation) crashed 1.8% from a year ago and 9% from early 2000. The Fed's bifurcated approach to inflation and wages has devastated the middle class over the past decade, not at one fell swoop, but in tiny increments, year after year, in a planned disciplined manner that makes hyperinflation unlikely. Declining real wages result in declining purchasing power. The hole is often filled by using credit cards. But the ensuing pile of costly debt only makes the problem worse. Squeezed from all sides, homeowners find that mortgage payments get harder to make, not easier. And they join the ranks of the losers among the debtors. Companies can be winners or losers. They benefit from cheap labor, cheap or free capital, and an ability to raise prices to make their numbers look good. Walgreens reported a 6.5% increase in sales today. How much of that was due to price increases? However, inflation can eventually eat into corporate profits through rising input costs and expenses (healthcare, for example). Over the longer term, a hollowed-out middle class spends less. Demand becomes an issue, and job creation dries up. That's where we are today. Yet, the Fed seems determined to stay the course. Speaking of the housing market: US Housing Hangover Or 20-Year Japanese Nightmare Wolf Richter   www.testosteronepit.com

Robert Lenzner: The Chinese mean to control the global gold market Posted: 27 Sep 2011 12:57 PM PDT By Robert Lenzner Forbes.com Tuesday, September 27, 2011 http://www.forbes.com/sites/robertlenzner/2011/09/27/the-chinese-mean-to... Get ready for the Pan-Asia Gold Exchange, scheduled to open in June 2012 in Kunming City, Yunnan Province -- the gateway to all of Southeast Asia. This is serious, as the Pan Asian Gold Exchange is a part of China's five-year plan -- which means it is part of China's strategy for dominance in global financial markets and the global economy. Pan Asia will allow Chinese to speculate in gold futures contracts or buy physical gold through an account with a bank or broker. All 320 million customers of the giant Agricultural Bank of China will simply be able to use their renminbi, the Chinese currency, from their bank accounts to trade gold. Sounds bloody dangerous, doesn't it? It means that the spot market in gold could be headed for China -- and away from London's Metals Exchange or the Comex in New York. I'd like to know who is going to oversee and regulate all this action. For example, when the Comex raises margin requirements to dampen speculative fervor, will China bew governed by that? I doubt it very much. ... Dispatch continues below ... ADVERTISEMENT Lewis E. Lehrman on How to Solve the U.S. Debt Problem Lewis E. Lehrman, chairman of the Lehrman Institute, sponsor of The Gold Standard Now project, advises that to reduce the $1 1/2 trillion U.S. deficit, the Republican Party must initiate an investment program. Working Americans are not saving, which enables the banks to lead the country into a cycle of debt, leverage, boom, panic, and bust. Lehrman says: Eliminating the budget deficit of a trillion and a half dollars cannot be done overnight. The proposal by U.S. Rep. Paul Ryan was very dramatic -- one Republican called it radical -- but it was not happily received. The solution, of course, is to design an American program for prosperity, because you can solve these entitlement problems with a growing economy. We need a tremendous program of investment, and investment comes from savings. When you pay savers, middle-income professionals, and working people 0 percent at the bank, you are not going to encourage them to save. Then we are left with a bank cycle of debt, leverage, boom, panic, and bust." To read more and to sign up for The Gold Standard Now's free, noncommercial, weekly report, "Prosperity through Gold," please visit: http://www.thegoldstandardnow.org/gata In June you'll be able to buy spot gold or futures contracts in China. It also means that the Chinese currency -- not dollars -- will for the first time become the ruling currency used in one of the major speculative commodities of our age. All eyes will be on the influence of the gold trade in China rather than New York, London, Switzerland, or South Africa. This is another reason for registering the reality of gold as a trading vehicle, an investment for households, central banks, hedge funds, endowments -- another bullish force powering gold prices higher. No wonder George Soros has bought back some or all of the gold position he sold around $1,600 an ounce. ----- Robert Lenzner writes the StreetTalk column for Forbes.com and anchors the StreetTalk video show. * * * Join GATA here: The Silver Summit Thursday-Friday, October 20-21, 2011 Davenport Hotel, Spokane, Washington http://cambridgehouse.com/conference-details/the-silver-summit-2011/48 New Orleans Investment Conference Wednesday-Saturday, October 26-29, 2011 Hilton New Orelans Riverside Hotel http://www.neworleansconference.com/ 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 Be Part of a Chance to Discover Multi-Million-Ounce Gold and Silver Deposits in Canada Northaven Resources Corp. (TSX-V:NTV) is advancing five gold and silver projects in highly prospective and politically stable British Columbia, Canada. Check out the exploration program on our Allco gold/silver project : -- A large (13,000 hectare) property, covering more than 15 square kilometers of a regional mineralized trend just 3km from a recently announced 1.2-million-ounce gold and 15-million-ounce silver deposit. -- The property hosts historic high-grade silver workings and many mineral showings as well as former mines at the property's northern and southern boundaries. -- A deep-penetrating airborne geophysics survey has just been completed on the entire property and neighboring deposits and its results are eagerly awaited. To learn more about the Allco property or Northaven's other gold and silver projects, please visit: http://www.northavenresources.com Or call Northaven CEO Allen Leschert at 604-696-3600.

Avery Goodman: Looks like Mexico purchased only imaginary gold Posted: 27 Sep 2011 12:46 PM PDT 8:40p ET Tuesday, September 27, 2011 Dear Friend of GATA and Gold: Writing today at Seeking Alpha, securities lawyer and market analyst Avery Goodman elaborates on the disclosure Sunday by the Mexican journalist Guillermo Barba that the Bank of Mexico's recent gold purchase was probably only an unallocated paper gold claim against a bullion bank in London that has sold much more gold than it keeps in any vault (http://www.gata.org/node/10487). Goodman writes: "All gold investors owe a debt of gratitude to Mr. Barba, and the English-speaking community owes part of that gratitude to Hugo Salinas Price, the president of the Mexican Civic Association for Silver, who translated Barba's essay and Banxico's response into English. The biggest debt is owed to Mr. Barba by the Mexican people. By forcing disclosure, he may have saved them from becoming victims in what may well be the biggest collective fraud the world has ever seen." Goodman's essay is headlined "Seems Like Mexico Purchased 110 Tons of Gold that Doesn't Exist" and you can find it at Seeking Alpha here: http://seekingalpha.com/article/296124-seems-like-mexico-purchased-110-t... CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. ADVERTISEMENT Prophecy Platinum Drills 49.5 Meters Grading 1.27 g/t PGM+Au at Yukon Wellgreen Project Company Press Release August 22, 2011 Prophecy Platinum Corp. (TSX-V: NKL, OTC-QX: PNIKF, Frankfurt: P94P) announces results from its 2011 drilling program for its first completed hole on the Wellgreen Project in the Yukon Territory, Canada. Borehole WS11-184 encountered 472.6 meters of mineralization grading 0.43% nickel equivalent from surface to the footwall contact. Within this larger swath of mineralization the hole encountered 49.5 meters of 1.27 grams per ton platinum group metals plus gold, 0.71% nickel, and 0.45% copper (or 1.11% nickel equivalent). The geology transitioned from blebby disseminated to net-textured to massive sulphide approaching the footwall contact grading 6.3% nickel, 1.7% copper, 2.7 grams per ton platinum, 1.6 grams per ton palladium, 0.17 grams per ton gold, and 3.4 grams per ton silver. The drilling zones and results are tabulated here, with more information: http://www.prophecyplat.com/news_2011_aug22_prophecy_platinum_wellgreen_... Join GATA here: The Silver Summit Thursday-Friday, October 20-21, 2011 Davenport Hotel, Spokane, Washington http://cambridgehouse.com/conference-details/the-silver-summit-2011/48 New Orleans Investment Conference Wednesday-Saturday, October 26-29, 2011 Hilton New Orelans Riverside Hotel http://www.neworleansconference.com/ 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 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

"The Carnage...The Carnage..." - Presenting The Complete September And YTD Hedge Fund Bloodbath Posted: 27 Sep 2011 11:19 AM PDT HSBC has just released their latest weekly hedge fund return compilation report. There is no sugarcoating this: it is a complete bloodbath. It is no surprise why hedge funds are desperate to pull off any sort of month end rally. Without it we fear the hedge fund space, which at last check was approaching $2 trillion in AUM, will collapse by 25% after the new year when the full carnage of the redemption requests is made public. And while we know that Paulson is a, well, liquidator is such a harsh word, but if the word fits (unless of course he makes whole all of his more "senior" investors with his personal cash, something which has been vaguely rumored), we certainly had no idea just how pervasive the decimation within the hedge funds ranks was until we saw the mid-September results. We really, really hope the collusive short squeeze-cum-month end rally works out for the hedge fund community, becuase it really will be "or else." Summary YTD performance, in which we find that the Paulson Advantage Plus is the third worst performing fund YTD in HSBC's entire universe! Full report (pdf): HedgeWeekly2011_No39

"The Carnage...The Carnage..." - Presenting The Complete September And YTD Hedge Fund Bloodbath Posted: 27 Sep 2011 11:19 AM PDT HSBC has just released their latest weekly hedge fund return compilation report. There is no sugarcoating this: it is a complete bloodbath. It is no surprise why hedge funds are desperate to pull off any sort of month end rally. Without it we fear the hedge fund space, which at last check was approaching $2 trillion in AUM, will collapse by 25% after the new year when the full carnage of the redemption requests is made public. And while we know that Paulson is a, well, liquidator is such a harsh word, but if the word fits (unless of course he makes whole all of his more "senior" investors with his personal cash, something which has been vaguely rumored), we certainly had no idea just how pervasive the decimation within the hedge funds ranks was until we saw the mid-September results. We really, really hope the collusive short squeeze-cum-month end rally works out for the hedge fund community, becuase it really will be "or else." Summary YTD performance, in which we find that the Paulson Advantage Plus is the third worst performing fund YTD in HSBC's entire universe! Full report (pdf): HedgeWeekly2011_No39

What’s Happening with Gold? Posted: 27 Sep 2011 10:40 AM PDT Author: Vedran Vuk Synopsis: With precious metals prices dropping over the past few days, many investors are wondering why they're taking a beating. As is usually the case, it's a combination of several factors, none of which is a genuine cause for concern. Dear Reader, People from nearly all political stripes and philosophies blame greed for the current financial crisis. At some level, greed seems like a clear culprit, but a closer examination reveals some major problems with this theory. First of all, how does one measure greed? Not only is it impossible to measure, it's nearly impossible to even observe. If it's raining outside, one might not know the exact inches of rain falling, but one can make a good guess. If one had a cup, the measurement problem would be solved entirely, but with greed even observation is a problem. For example, was 1994 less greedy than ...

BBC Speechless As Trader Warns of Stock Market Crash and Economic Collapse Is Coming Posted: 27 Sep 2011 10:29 AM PDT "know the stock market is finished. The euro, as far as they're concerned, they don't really care". "For most traders, we don't really care that much how they're going to fix the economy, how they're going to fix the whole situation — our job is to make money from it," he said.

The Rare Earth Sector: Questions Must Be Asked Posted: 27 Sep 2011 09:25 AM PDT This week, Molycorp Minerals (MCP:NYSE) went to bat before the House Foreign Affairs Committee, represented by CEO Mark Smith. What was needed was a confident batter presenting an urgent case for national survival. But instead of a strong slugger, all we got was a little leaguer. Opportunities were missed and runners were left stranded. The industry sent a very conflicted Mr. Smith to Washington. First of all, Mr. Smith never questioned the categorization of the metal class, namely that heavy rare earths (HREEs) are lumped in with the more common, garden-variety light earths (LREEs). Not once were the members of the committee informed of the importance of the highly critical dysprosium and terbium minerals, or the serious consequences China's supply monopoly poses for American industry. Meanwhile, Alaska-based miner Ucore Rare Metals Inc. (UCU:TSX.V; UURAF:OTCQX) is sitting on a mountain of dysprosium and terbium in North America's backyard. Indeed, the Machiavellian hand of China's mining industry was not merely overlooked, but praised. Mark Smith's presentation before the Congressional Committee read like an apologia for the nation's draconian quotas. Not once in his presentation did he make reference to American sources of these valuable minerals. Instead, Molycorp was hailed as king of the REE hill, as if there were no other viable rare earth entities. It became an obvious case of not-too-skilled investor relations. In every missed opportunity there exists a valuable learning experience. What else was omitted that would have made for a stronger presentation? Where does Molycorp get its heavy rare earths? Smith claimed Molycorp possesses a complete suite of rare earths at their Mountain Pass property. Assays have shown that this mountain possesses predominately light rare earths with little or no heavies. Why does Molycorp venture to far-away Estonia to process U.S. ore when it can be done more efficiently and economically on American soil? A new industry could be created here offering jobs to build a new, native industry. What was the significance of the aborted deal between Hitachi and Molycorp? The Japanese claim that Molycorp did not possess sufficient heavy rare earths to satisfy Japanese industrial needs. Smith glossed over the strategic importance of heavy rare earths right here in the United States. Why was no mention made of the Critical Minerals Act that has been languishing on congressional desks for many months? Encouraging Federal Government to support this act might have served to fast-track vital legislation. What could be more pertinent than weaning the U.S. from its dependency on China? Chinese policy makers have stated that the nation needs strategic rare earths for its own markets and that there are simply not enough of these resources to go around. They've even said they would welcome American firms to develop the sector on Chinese soil. Why not explore this opportunity to assist our Chinese colleagues, thereby furthering a more harmonious relationship? Let's hope that a more voluble and reasoned representative will inspire Congress at the next opportunity. Sadly, only four committee members were present at the hearing. Perhaps such North American players as Ucore, Rare Element Resources Ltd. (RES:TSX; REE:NYSE.A) and Great Western Minerals Group Ltd. (GWG:TSX.V; GWMGF:OTCQX) can send a slugger up to bat to advance our indigenous rare earth industry. It's not just Congress who could use some enlightenment on this oft-misunderstood market; even major investment firms demonstrate limited understanding of the rare earth sector. J.P. Morgan recently downgraded Molycorp's rating, slanting its sector thesis by forecasting declining prices. Nowhere did they differentiate between the heavies and the lights. Dysprosium and terbium prices have not gone much lower. Investors fear that Molycorp and Lynas Corp. (LYC:ASX) will flood the rare earth supply when they come online, but this is not the reality. Right now, LREE-heavy Lynas and Molycorp are half a loaf. All these two giants have to do is look to our recommendation list to find suitable heavy rare earth additions to complete the catalogue, or else they open themselves up to evisceration by bankers who may be playing both sides of the field. Finally, is it not passing strange that JP Morgan chose to issue this negative pronouncement on the eve of Bernanke's two-day conclave in Washington? Keep in mind that J.P. Morgan is being sued by individual silver investors who allege the bank "amassed an unfairly large position in silver futures and then used its position to drive down prices of silver and increase its own profits." (Wall Street Journal) This lawsuit may indeed throw into question good-old J.P.'s credibility as an impartial observer. Do not forget that our rare earth stocks have an incredibly large short-interest position. This is not the time to flee the battlefields in this vital sector. Gold Stock Trades Editor Jeb Handwerger is a highly sought-after stock analyst who is syndicated internationally and known throughout the financial industry for his accurate and timely analysis of the equities markets—particularly the precious metals sector. You can read his daily bulletin for timely updates on the rare earth sector by clicking here.

Stephen Leeb - How the Gold & Silver Bull Will Rescue You Posted: 27 Sep 2011 09:12 AM PDT With continued volatility in gold, silver and global markets, today King World News interviewed acclaimed money manager Stephen Leeb. When asked about the recent smash in gold and silver and comparisons to 2008, Leeb responded, "Let's step back for a moment, Eric, because people like to make comparisons to 2008.  Well, let's say you were bullish on gold and silver in 2008 or you had just gotten bullish in 2008 and you bought gold at its high, the worst possible point in 2008, you would have paid roughly $1,000.  Today gold is trading at $1,650, so you are up a remarkable 65% today, even though you would have bought the previous high." This posting includes an audio/video/photo media file: Download Now

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