$3000.00 Gold - "The Purest Play Against the United States Dollar."

Posted On: Monday, September 22, 2008, 12:12:00 PM EST

Consequences Is The Word To Remember

Author: Jim Sinclair

Dear Friends,

If the actions this weekend had not been undertaken, the world?s financial system would now be directly inside a category 5 hurricane. Between now and the election, intervention to keep markets somewhat calm is being undertaken

CONSEQUENCES is the word to remember.

The devil is in the details.

The purpose of this weekend's event is to attempt to consolidate a huge amount of OTC derivatives into one location in hopes of creating a wash. The point of this is to prevent OTC derivative counterparties from going broke.

When an OTC derivative fails, notional value becomes real value. They got a taste of what a broken counterparty meant when Lehman went Chapter 11. It wasn?t pretty.

Lehman Brothers, in Chapter 11, will be the first to benefit from the $700 billion to $1 trillion plus bailout.

Do not let your guard down. Continue to take all the precautionary measures spoken about here. The dollar is toast around election time. Gold will trade at $1200 and $1650.

The glory days of the naked short have passed even if they do not know it yet.

Respectfully yours,
Jim

Thursday's low of 10,459.44, is the line in the sand for the DJIA.

If we break this, we'll probably stay under 11,000 permanently with the bailout.

Durable Goods Collapsing

The new durable goods orders out this morning show orders for big ticket items collapsing:

"New Orders New orders for manufactured durable goods in August decreased $9.9 billion or 4.5 percent to $208.5 billion, the U.S. Census Bureau announced today. This was the largest percent decrease in new orders since January 2008 and followed three consecutive monthly increases including a 0.8 percent July increase. Excluding transportation, new orders decreased 3.0 percent. Excluding defense, new orders decreased 5.0 percent.

Shipments Shipments of manufactured durable goods in August, down following two consecutive monthly increases, decreased $7.7 billion or 3.5 percent to $210.1 billion. This was the largest percent decrease in shipments since December 2002 and followed a 2.3 percent July increase.

Unfilled Orders Unfilled orders for manufactured durable goods in August, up thirty of the last thirty-one months, increased $3.0 billion or 0.4 percent to $827.2 billion. This was at the highest level since the series was first stated on a NAICS basis in 1992 and followed a 0.8 percent July increase.

Inventories

Inventories of manufactured durable goods in August, up thirteen of the last fourteen months, increased $2.4 billion or 0.7 percent to $338.5 billion. This was also at the highest level since the series was first stated on a NAICS basis in 1992 and followed a 0.9 percent July increase.

Capital Goods Industries

Nondefense

Nondefense new orders for capital goods in August decreased $5.6 billion or 7.5 percent to $68.9 billion.

Defense

Defense new orders for capital goods in August increased $0.9 billion or 9.4 percent to $9.9 billion.

Berkut
User ID: 94605

9/24/2008 10:23 AM Re: $3000.00 Gold - "The Purest Play Against the United States Dollar." Quote

Thursday's low of 10,459.44, is the line in the sand for the DJIA.

If we break this, we'll probably stay under 11,000 permanently with the bailout.

Index data delayed 15 min.
DJIA 10,365.45 -777.68

NASDAQ 1,983.73 -199.61

NIKKEI 11,743.61 -149.55
RUSSELL 657.72 -47.07
NYSE 7,204.23 -686.14
TSX 11,285.07 -840.93
USD 77.63 +0.30
Crude Oil 95.69 -11.20
Charts...

Gold rose yesterday despite continuing dollar strength and falling oil prices ( gold closed at $880.80 up $6.80 while s ilver closed at $12.71 up 53 cents ). Once again in after hours trading there was determined selli ng which pushed the price as low as $862/oz in Asia prior to rallying in early European trade to over $870 /oz.




There appear to be good support in the $850/oz to 860/oz region but given the unprecedented nature of the volatil ity in global financial markets anything is possible in the short term and leveraged trading is not advisable .

I nterbank pressures remain elevated with a further rise in three month rates led by dollar Libor rising 4.15% and premiums for European bank bonds are now at record levels. Thus, financial and systemic risk remains elevated which will support gold. But w ith gold up significantly in the last 3 weeks it may need to consolidate between $850 and $910 prior to rechallenging $1,000/oz in the coming weeks.

EUR and GBP gold remain very firm as the euro and British pound weaken as financial and economic woes are becoming more pronounced in the Eurozone and the UK.

Western Central Banks Curtailing Gold Sales and Other Central Banks Buying Gold
Western central bank gold sales continue to fall while Russian and other large creditor nations such as China and OPEC nations with huge dollar denominated reserves and assets are believed to be increasing the percentage of gold that they hold in their currency reserves.

Contagion in the financial markets and U.S. dollar vulnerability are bolstering gold's reputation as the central monetary anchor within the international monetary system.

Gold sales by European central banks (the largest holders besides the Federal Reserve of gold in the world) under the Central Bank Gold Agreement (CBGA) in the year to September 26 were provisionally estimated at a record low 357.2 tonnes, the World Gold Council said on Wednesday. Sales in the final year of the pact could be lower still, the WGC added. Under the terms of the CBGA, signatories can sell up to 500 tonnes of gold per year. With the advent of the euro, European central banks began diversifying their reserves which were overweight in gold.

The gold sales were the lowest since the central bank gold agreement in 1999.

Financial market instability , concerns about the dollar and huge systemic risk are making gold more attractive as a reserve asset for central banks .

Governments and central bankers who sell their gold are likely to be asked very hard questions in the coming years. Already Gordon Brown's decision to sell much of the UK's gold in 1999 at near record low prices has been criticised. Some have even suggested that the sales have weakened the UK's monetary position and increase risks to the vulnerable pound.

The German Bundesbank and the Swiss National Bank confirm ed this week that they will not be selling any more of their gold reserves. The SNB said it doesn't plan a further reduction of its gold reserves, which now stand at 1040 metric tons.

Recently, the Bundesbank reaffirmed its belief in the importance of retaining significant holdings of gold bullion in their monetary reserves. The Bundesbank has said that financial and political uncertainty make the gold reserves even more important than before. The Bundesbank is the world's second-largest holder of gold after the US Federal Reserve, and has sold just 20 tonnes out of total reserves of over 3,000 tonnes in the past five years.

"National gold reserves have a confidence and stability-building function for the single currency in a monetary union," the Bundesbank said.

China is the elephant in the room and it holds the world's largest foreign reserves, worth 1.81 trillion U.S. dollars followed by Japan and Russia with 996.7 billion U.S. dollars and 581.6 billion U.S. dollars, respectively. India is fourth with 295.3 billion U.S. dollars.

China only has some 1% of it's reserves in gold whereas Germany's Bundesbank , the world's second-largest official holder of gold with 3417.4 tons, has 66.3% of its reserves in gold.

Even a small increase in central bank diversification into gold is likely to see markedly higher prices in the coming years.


By Mark O'Byrne, Executive Director

Sunday, October 05, 2008



Brace For Massive Layoffs


Main Street and Wall Street both better be bracing for layoff because they are coming. I talked about that a bit in Jobs Contract 9th Consecutive Month.

Mass Layoffs Rise

One measure of future unemployment can be found by looking at mass layoff announcements. These are mass layoffs that have been announced, and are coming down the road, but are not yet reflected in the unemployment numbers. Please note that U.S. September Job Cuts Rise 33% From Year Ago, Challenger Says


Job cuts announced by U.S. employers climbed 33 percent in September from a year earlier, led by reductions at computer- and automakers, according to a private placement firm.

Firing announcements rose to 95,094 last month from 71,739 in September 2007, Chicago-based Challenger, Gray & Christmas Inc. said in a statement today. Hewlett-Packard Co., the world's largest computer-maker, said last month it would eliminate 24,600 jobs, accounting for much of September's increase, Challenger said.
Economic data continues to suggest the Credit Crunch Has Reached Critical Mass and is rapidly picking up steam. Unemployment is poised to soar still higher. There is no driver for jobs, nor will the misguided $700+ billion bailout plan of Paulson provide any.

Bracing for U.S. Corporate Budget Cuts

BusinessWeek is is talking about Bracing for U.S. Corporate Budget Cuts

William P. Lauder was already adjusting his corporate budget for a tough holiday season. Then the financial crisis hit. Amid the turmoil, the Estée Lauder Cos. (EL) chief executive stopped at a Denver mall and found it practically empty. Now he's preparing for the worst. "We always do scenario planning, but not to the degree that we are doing now," says Lauder. He's asking each brand manager at the New York cosmetics giant three questions: "What must you have? What would you like to keep going? And what can you give up?"

Faced with squeezed credit and unpredictable sales, U.S. companies are bracing for budget cuts that could be far-reaching, painful, and in some cases unprecedented. Even before September's turmoil, Moody's Economy.com predicted that corporate operating expenses—a proxy for budgets—would rise, on average, no more than 7% annually through 2012 across 59 industries, down from several consecutive quarters of double-digit gains.

A mediocre outlook has suddenly grown worse. "Just in the last two days, I have had clients rethinking not only their 2009 budgets but all the way to 2011," says Anthony D. Begando, founder and CEO of Tenon Consulting Solutions in Alpharetta, Ga. On Sept. 25, Rite Aid (RAD) CEO Mary F. Sammons cited "the growing uncertainty of this economy" when announcing a $50 million cut in capital spending over the next six months.

Among the costs coming under immediate scrutiny are marketing and new construction. AT&T (T) and General Motors (GM) have already slashed their 2008 marketing budgets amid tough economic conditions. On Sept. 15, Visa (V) consolidated its ad account from four agencies to one to save money next year. Casino companies scrapped several high-profile expansion projects over the summer.

Faced with such instability, some executives feel it's more prudent to jettison troubled businesses than to fix them. Consumer-product maker Newell Rubbermaid (NWL) now plans to dump $500 million of low-margin products, such as $10 plastic garbage cans, reversing a previous plan to turn them around. Newell CEO Mark D. Ketchum says it's the best strategy, given the tough road ahead. "Two words come to mind when I think of 2009—difficult and volatile," says Ketchum.

The most painful trim, of course, is in payroll. Many executives expect layoffs to be swifter and deeper than before, accompanied by pruned salaries and bonuses for those who remain.
Shotgun Marriages and Bankruptcies

The recently announced shotgun marriages and bankruptcies are going to cost tens of thousands of high paying and or high benefit jobs. Here is a partial list.


Merrill Lynch (MER) and Bank of America (BAC) merger.
Lehman bankruptcy
Washington Mutual and JPMorgan (JPM)
Citigroup (C) and Wachovia (WB), OR Wells Fargo (WFC) and Wachovia (WB)

Expect to see more mergers, more bankruptcies, and more layoffs as a result of mergers and bankruptcies.

Hewlett-Packard Co., the world's largest computer-maker, fired a massive warning shot announcing it would eliminate 24,600 jobs, signaling it will not be just financial activities that are affected.

This holiday season is going to be a dismal one. Expect to see reduced profit margins and cutbacks in hours worked between now and Christmas. Those who supplemented income by working two jobs or by working overtime during the holiday season will find reduced opportunities this year. Expect to see more store closings in January as the shopping center economic model continues its slow death.

Commercial real estate, the last main bastion of job creation, is now crashing. There is no other source of jobs other than health care, and health care alone cannot fuel this economy.

Brace for massive layoffs as they are coming.

Mike "Mish" Shedlock

Germany takes hot seat as Europe falls into the abyss
We face extreme danger. Unless there is immediate intervention on every front by all the major powers acting in concert, we risk a disintegration of global finance within days. Nobody will be spared, unless they own gold bars.

By Ambrose Evans-Pritchard

Last Updated: 8:37PM BST 06 Oct 2008

Comments 408 | Comment on this article

Star-crossed bankers: The European Central Bank played a shockingly destructive role Photo: REUTERS
Investors will learn today whether the Paulson bail-out - fattened to $850bn (£480bn) by Congress - can begin to halt the death spiral in the credit system. So far, the response looks terrible.

Germany is now in the hot seat. The collapse of a rescue deal for Hypo Real Estate on Saturday threatens a €400bn (£311bn) bankruptcy that nearly matches the Lehman Brothers debacle for sheer scale.

Chancellor Angela Merkel has been forced to pull her head out of the sand, guaranteeing all German savings, a day after she rebuked Ireland for doing much the same thing. Reality intrudes.

During the past week, we have tipped over the edge, into the middle of the abyss. Systemic collapse is in full train. The Netherlands has just rushed through a second, more sweeping nationalisation of Fortis. Ireland and Greece have had to rescue all their banks. Iceland is facing an Argentine denouement.

The US commercial paper market is closed. It shrank $95bn last week, and has lost $208bn in three weeks. The interbank lending market has seized up. There are almost no bids. It is a ghost market. Healthy companies cannot roll over debt. Some will have to sack staff today to stave off default.

As the unflappable Warren Buffett puts it, the credit freeze is “sucking blood” out of the economy. “In my adult lifetime, I don’t think I’ve ever seen people as fearful,” he said.

We are fast approaching the point of no return. The only way out of this calamitous descent is “shock and awe” on a global scale, and even that may not be enough.

Drastic rate cuts would be a good start. Central bankers still paralysed by a misplaced fear of inflation – whether in Europe, Britain, or the US – have become a public menace and should be held to severe account by our democracies. The imminent and massive danger is now self-feeding debt deflation.

The lesson of the 1930s is that any country trying to reflate in isolation will be punished. The crisis will ricochet from one economy to another until every one is crippled. We are seeing it play again in this drama as our leaders fail to rise above their narrow, parochial agendas.

The European Central Bank – which raised rates into the teeth of the crisis in July – has played a shockingly destructive role in this enveloping slump. Its growth predictions this year have been, and still are, delusional. Neglecting its global role, it has vastly complicated the fire-fighting efforts of Washington.

It could have offered “cover” to the US Federal Reserve this spring when Ben Bernanke was forced by events to slash rates to 2pc. It could at least have signalled an end to monetary tightening. That is how an ally ought to behave.

Instead, it stuck maniacally to its Gothic script, with equally unhappy consequences for both sides of the Atlantic, as well as for China, Japan, and India. The euro rocketed yet further, which it turn set off an oil shock as crude metamorphosed into an anti-dollar with leverage.

The ECB policy was self-defeating, even on its own terms. It merely drove headline inflation even higher, while deeper forces of underlying debt deflation pulled the real economies of Germany, Italy, France, and Spain into a recessionary vortex.

Far from offering reassurance, the weekend mini-summit of EU leaders served only to highlight that nobody is in charge of this runaway train. There is still no lender of last resort in euroland. The £12bn stimulus package is risible.

Angela Merkel has revealed her deep limitations. It was she who vetoed French efforts to launch a pan-EU rescue package, suspecting that any lifeboat fund would prove to be Trojan Horse – a way of co-opting German taxpayers into colossal transfers of wealth to Latin Europe.

In that she is right, but it is too late now for dysfunctional EU political games. By demanding that those who caused the damage should pay for it, she crossed the line into caricature, or worse.

Her comments echo word for word the “we’re alright Jack” attitudes of Euro-pols during the first US banking crises in 1930-1931, until the storm hit Europe and the entire cast was swept away by furious electorates, or simply shot. Thankfully, this EU stupidity is at last drawing serious criticism.

“We have to make sure Europe takes its responsibilities, like the US: action must be taken quickly and in a concerted manner,” said IMF chief Dominique Strauss-Kahn.

As for the US itself, it has not yet exhausted its policy arsenal. It can escalate further up the nuclear ladder. The Fed can cut interest rates from 2pc to zero. If that fails, it can let rip with the mass purchase of US debt.

“The US government has a technology, called a printing press,” said Fed chief Ben Bernanke in November 2002. (His helicopter speech).

In extremis, the Treasury/Fed can swoop into any market to shore up asset prices. They can buy Florida property. They can even buy SUV guzzlers from the car lots in Detroit, and mangle them in scrap yards. As Bernanke put it, the Fed can “expand the menu of assets that it buys.”

There is a devilish catch to this ploy, of course. It assumes that foreign creditors will tolerate such action.

Japan entered its Lost Decade as the world’s top creditor, with a vast pool of household savings to cushion the slump. America starts its purge with net external liabilities of $3 trillion, and a savings rate near zero. Foreigners own over half the US Treasury debt, and two thirds of all Fannie, Freddie, and other US agency bonds.

But the risk of a dollar collapse is one for the distant future. Right now the world faces the opposite problem. There is a wild scramble for dollars as a $10 trillion pyramid of global lending based on dollar balance sheets “delevers” with a vengeance.

This is a “short squeeze” on those who have used the dollar for a vast global carry trade. International banks are facing margin calls on their dollar leverage. It is why the Fed is having to provide $1.25 trillion in dollar liquidity for the entire global system, according to estimates by Brad Setser from the Center for Geoeconomic Studies.

The crisis engulfing Europe, Asia and emerging markets, makes life easier for Washington. The United States is becoming a safe-haven again.

The Fed can now hope to pursue monetary stimulus “a l’outrance” without being slapped down by the currency, debt, and commodity markets. Take comfort where you can.

Ambrose Evans-Pritchard Get feed updatesComment Get feed updates

Germany takes hot seat as Europe falls into the abyss
We face extreme danger. Unless there is immediate intervention on every front by all the major powers acting in concert, we risk a disintegration of global finance within days. Nobody will be spared, unless they own gold bars.

By Ambrose Evans-Pritchard

Last Updated: 8:37PM BST 06 Oct 2008

Comments 408 | Comment on this article

Star-crossed bankers: The European Central Bank played a shockingly destructive role Photo: REUTERS
Investors will learn today whether the Paulson bail-out - fattened to $850bn (£480bn) by Congress - can begin to halt the death spiral in the credit system. So far, the response looks terrible.

Germany is now in the hot seat. The collapse of a rescue deal for Hypo Real Estate on Saturday threatens a €400bn (£311bn) bankruptcy that nearly matches the Lehman Brothers debacle for sheer scale.

Chancellor Angela Merkel has been forced to pull her head out of the sand, guaranteeing all German savings, a day after she rebuked Ireland for doing much the same thing. Reality intrudes.

During the past week, we have tipped over the edge, into the middle of the abyss. Systemic collapse is in full train. The Netherlands has just rushed through a second, more sweeping nationalisation of Fortis. Ireland and Greece have had to rescue all their banks. Iceland is facing an Argentine denouement.

The US commercial paper market is closed. It shrank $95bn last week, and has lost $208bn in three weeks. The interbank lending market has seized up. There are almost no bids. It is a ghost market. Healthy companies cannot roll over debt. Some will have to sack staff today to stave off default.

As the unflappable Warren Buffett puts it, the credit freeze is “sucking blood” out of the economy. “In my adult lifetime, I don’t think I’ve ever seen people as fearful,” he said.

We are fast approaching the point of no return. The only way out of this calamitous descent is “shock and awe” on a global scale, and even that may not be enough.

Drastic rate cuts would be a good start. Central bankers still paralysed by a misplaced fear of inflation – whether in Europe, Britain, or the US – have become a public menace and should be held to severe account by our democracies. The imminent and massive danger is now self-feeding debt deflation.

The lesson of the 1930s is that any country trying to reflate in isolation will be punished. The crisis will ricochet from one economy to another until every one is crippled. We are seeing it play again in this drama as our leaders fail to rise above their narrow, parochial agendas.

The European Central Bank – which raised rates into the teeth of the crisis in July – has played a shockingly destructive role in this enveloping slump. Its growth predictions this year have been, and still are, delusional. Neglecting its global role, it has vastly complicated the fire-fighting efforts of Washington.

It could have offered “cover” to the US Federal Reserve this spring when Ben Bernanke was forced by events to slash rates to 2pc. It could at least have signalled an end to monetary tightening. That is how an ally ought to behave.

Instead, it stuck maniacally to its Gothic script, with equally unhappy consequences for both sides of the Atlantic, as well as for China, Japan, and India. The euro rocketed yet further, which it turn set off an oil shock as crude metamorphosed into an anti-dollar with leverage.

The ECB policy was self-defeating, even on its own terms. It merely drove headline inflation even higher, while deeper forces of underlying debt deflation pulled the real economies of Germany, Italy, France, and Spain into a recessionary vortex.

Far from offering reassurance, the weekend mini-summit of EU leaders served only to highlight that nobody is in charge of this runaway train. There is still no lender of last resort in euroland. The £12bn stimulus package is risible.

Angela Merkel has revealed her deep limitations. It was she who vetoed French efforts to launch a pan-EU rescue package, suspecting that any lifeboat fund would prove to be Trojan Horse – a way of co-opting German taxpayers into colossal transfers of wealth to Latin Europe.

In that she is right, but it is too late now for dysfunctional EU political games. By demanding that those who caused the damage should pay for it, she crossed the line into caricature, or worse.

Her comments echo word for word the “we’re alright Jack” attitudes of Euro-pols during the first US banking crises in 1930-1931, until the storm hit Europe and the entire cast was swept away by furious electorates, or simply shot. Thankfully, this EU stupidity is at last drawing serious criticism.

“We have to make sure Europe takes its responsibilities, like the US: action must be taken quickly and in a concerted manner,” said IMF chief Dominique Strauss-Kahn.

As for the US itself, it has not yet exhausted its policy arsenal. It can escalate further up the nuclear ladder. The Fed can cut interest rates from 2pc to zero. If that fails, it can let rip with the mass purchase of US debt.

“The US government has a technology, called a printing press,” said Fed chief Ben Bernanke in November 2002. (His helicopter speech).

In extremis, the Treasury/Fed can swoop into any market to shore up asset prices. They can buy Florida property. They can even buy SUV guzzlers from the car lots in Detroit, and mangle them in scrap yards. As Bernanke put it, the Fed can “expand the menu of assets that it buys.”

There is a devilish catch to this ploy, of course. It assumes that foreign creditors will tolerate such action.

Japan entered its Lost Decade as the world’s top creditor, with a vast pool of household savings to cushion the slump. America starts its purge with net external liabilities of $3 trillion, and a savings rate near zero. Foreigners own over half the US Treasury debt, and two thirds of all Fannie, Freddie, and other US agency bonds.

But the risk of a dollar collapse is one for the distant future. Right now the world faces the opposite problem. There is a wild scramble for dollars as a $10 trillion pyramid of global lending based on dollar balance sheets “delevers” with a vengeance.

This is a “short squeeze” on those who have used the dollar for a vast global carry trade. International banks are facing margin calls on their dollar leverage. It is why the Fed is having to provide $1.25 trillion in dollar liquidity for the entire global system, according to estimates by Brad Setser from the Center for Geoeconomic Studies.

The crisis engulfing Europe, Asia and emerging markets, makes life easier for Washington. The United States is becoming a safe-haven again.

The Fed can now hope to pursue monetary stimulus “a l’outrance” without being slapped down by the currency, debt, and commodity markets. Take comfort where you can.

Ambrose Evans-Pritchard Get feed updatesComment Get feed updates

Dear Friends,

Please understand that the Fed reacts to circumstances rather than acting before potential problems happen.

If the Fed hadn't taken the rather strange action they took today by becoming OTC derivative dealers themselves this would have been the day the USA banking system imploded.

Watch Libor rates to signal the point of detonation.

Circumstances appear as if there were many problem Angels dancing on top of a pin that is being balanced on the nose of just those people who created the problem in the first place.

An implosion of the banking system is coming, which means a bank holiday will occur.

You now must have enough cash in hand to last a month or two.

If you have not distanced yourself from financial agents then you have a financial death wish.

If you have NOT made absolutely sure that your custodian account is a real custodial- ship you are probably in for a surprise.

I took a call yesterday from a mature lady who told me she feels her money market fund that is only in Treasuries will not pay her out. They did tell her they intend to in seven days. I asked her to call me back in eight days. How does she know that this money market fund is not in OTC derivatives based on the movement of Treasuries?

I do not want you to make that call to me.

If you can retire from your retirement program at some reasonable discount do it NOW.

This is it and it is NOW. Gold is going to $1200 and $1650. The US dollar rally has NO fundamental legs.

Why are so many of you sitting there like a deer caught in the headlights? Protect yourself and do it TODAY!

Respectfully,
Jim
[link to www.jsmineset.com]

SPOT MARKET IS OPEN
closes in 8 hrs. 29 mins.
Oct 08, 2008 08:47 NY Time

Bid/Ask 916.70 - 917.70

Low/High 876.30 - 920.60

Change +29.60 +3.34%

30daychg +115.20 +14.37%
1yearchg +184.10 +25.13%
Charts...



Latest Gold News NY Time

Brazil, Argentina abandon US dollar

Brazil and Argentina have launched a new payment system in their bilateral trade, doing away with the US dollar as a medium of exchange.

The two Latin American nations started the Payment System on Local Currency (SML) on Monday following a last month agreement inked by their presidents to use local currencies in a bid to end transaction in dollars

Tuesday, October 07, 2008



Nightmare Day For Banks


The Times Online is reporting 300,000 frozen accounts at Icesave bank.

The Financial Services Authority this afternoon drafted in Ernst & Young (E&Y) as emergency administrators of Landsbanki’s UK operations in a bid to protect retail depositors and British financial stability.

However, a spokeswoman for E&Y said the move will not protect the deposits of the 300,000 customers of Icesave, the internet savings bank that is owned by Landsbanki, who found their accounts frozen this morning after Iceland’s financial regulator took control of the country's second largest bank.

A notice on Icesave's website said: “We are not currently processing any deposits or any withdrawal requests through our Icesave internet accounts. We apologise for any inconvenience this may cause our customers. We hope to provide you with more information shortly.”

The Icelandic central bank said that Russia had agreed to provide Iceland with a €4 billion (£3.1 billion) loan to strengthen foreign reserves and support the Icelandic crown, which fell by 35 per cent on Monday.

The Icelandic crown continued to be volatile in today's trading, forcing the central bank to introduce a currency peg at a value of 131 per euro. It was last trading at 144 per euro.

(The signifigance of this post is that this is the first national bankruptcy of a western country. - Berkut)

Gold Prices May Spike


Within the gold complex, there is a disparity between the paper market and the physical market, notes Jurg Kiener, CEO of Swiss Asia Capital. He tells CNBC's Maura Fogarty & Rebecca Meehan that if the paper market collapses, gold prices may double very quickly.

"Expecting gold to double to $1800 shortly." [s.i.c.]

[link to www.cnbc.com]

Oct 8 11:47am ET † Price Change Yield Yld Chng

Notes and Bonds

2 yr 100 27/32 -6/32 1.56 +0.11

5 yr 102 5/32 -30/32 2.65 +0.20

10 yr 102 27/32 -1 8/32 3.65 +0.15

30 yr 107 7/32 -27/32 4.07 +0.04

Central banks all but stop lending bullion
By Javier Blas in London

Published: October 7 2008 21:44 | Last updated: October 7 2008 21:44

Central banks have all but stopped lending gold to commercial and investment banks and other participants in the precious metals market, in a move that on Tuesday sent the cost of borrowing bullion for one-month to more than twenty times its usual level.

The one-month gold lease rate rocketed to 2.649 per cent, its highest level since May 2001 and significantly above its five-year average of 0.12 per cent, according to data from the London Bullion Market Association.

EDITOR’S CHOICE
In depth: Gold - Jul-21Editorial Comment: All that glisters - Oct-05Gold rush as investors pile into bars - Oct-03Lex: Gold - Sep-30Investors start fresh gold rush - Oct-01Wealthy investors hoard bullion - Sep-30


(This new development could cause a large price spike in gold over a 30 day period. - Berkut)

Oct 9 12:28pm ET † Price Change Yield Yld Chng

Notes:

2 yr 100 18/32 -9/32 1.70 +0.15

5 yr 101 16/32 -25/32 2.79 +0.16

10 yr 101 23/32 -1 8/32 3.78 +0.15

Bond:

30 yr 106 15/32 -1 9/32 4.11 +0.07

Mr. Luskin is calling for $2,000 gold within 6 months. See the CNBC video.


[link to www.cnbc.com]


On an inflation adjusted basis gold should be $2,500 per ounce. Cash is not king. Gold is king. You can always borrow against u r gold to get some worthless cash. -Berkut

Remember cash is like running away from u r financial problem. Gold is the bail-out option. Its the parachute.

If I had money in stocks or a 401K - I would be doing everything I can to get my money out of them.

There are some safe places to put money... one of course is gold... but there are money market accounts... If I had any money, I would buy some gold and silver and put the rest in a money market or CD in an old credit union.

If you or any member of your family is or ever has been military.... call up Navy Federal Credit Union in Virginia and put your money there.

The Navy backs this credit union. The whole country would have to dissolve before this credit union sinks. And even then I doubt the Navy would let this one go down without a fight. All those retired Admirals have their money in this credit union.

Thursday, October 9, 2008
Examining "Unprecedented Demand" for Gold Eagles

Earlier this week, the United States Mint took further actions to meet the increased demand for gold and silver bullion coins. This included production halts for certain bullion offerings and the continued allocation for one ounce Gold and Silver American Eagle coins.

Within the memorandum sent to authorized bullion purchasers, the US Mint specifically stated, "gold and silver demand is unprecedented." Throughout the course of this year, the Mint has provided similar explanations each time a new suspension or allocation program went into effect. While sales of Silver Eagle coins are higher than any other year in history, the sales of Gold Eagle coins are far below their peak.

The following table shows the ounces of gold sold by the United States Mint in the form of American Eagle Gold bullion coins. These figures are taken from the US Mint website. You can visit the link for monthly data, as well as the figures for Silver and Platinum Eagles.

American Gold Eagle Bullion Sales (ounces)
1986 1,787,750
1987 1,253,000
1988 851,000
1989 839,000
1990 715,000
1991 472,000
1992 638,600
1993 796,000
1994 559,500
1995 600,500
1996 729,500
1997 1,317,000
1998 1,839,500
1999 2,055,500
2000 164,500
2001 325,000
2002 315,000
2003 484,500
2004 536,000
2005 449,000
2006 261,000
2007 198,500
2008 492,000*
*through October 2008

While the number of ounces of gold sold has already more than doubled from last year, it still does not approach the levels reached during the several prior years, most notably 1998 and 1999.

In terms of monthly demand, during 2008 the highest number of ounces sold was in September at 113,000 ounces. During 1998 and 1999, there were seven months with sales in excess of 200,000 ounces. The highest monthly sales total occurred in October 1998 at 288,500 ounces.

The demand for American Gold Eagles is clearly not unprecedented. What's actually unprecedented is the suspension and allocation of Gold Eagle coins. Even amidst the booming demand of the pre-Y2K years, the US Mint never resorted to suspensions or allocation programs. Why is the US Mint having so much trouble keeping pace with demand this year?

The mainstream press has recently given coverage to the US Mint's suspensions and allocations of gold and silver bullion coins. The stories have always reported about the US Mint's inability to produce enough coins to meet demand. Given that the Mint has been able to produce far greater quantities of gold bullion coins in the past, I think the real story is the Mint's inability to obtain the physical gold needed for the coins.

But that just raises another question: With unfulfilled physical demand, why has the market price of gold remained stagnant? I think we will see this situation play out with some interesting consequences during the remainder of the year.

Posted by Michael at 10:56 AM
Labels: Gold Eagles, US Mint
3 comments:
Anonymous said...
Amen brother. Amen. I think there's something rotten in Denmark.

GOLD GYRATES IN $100 TRADING RANGE TODAY ....

Looks like "they" are pulling "it" off quite well. Gold down, the dollar up and billions of crap fiat dollars being readied to turn into gold, silver, and platinum.

[bThe price of PMs will prolly stay depressed for may be as long as a year or more while "they" buy it up at rock-bottom prices like was done last depression then "Oh Gee fiat currency doesn't work! ! may be "we" should back currency with PMs? ?" Well freakin DUH!

The rumors about COMEX defaults are getting interesting, no? yes?

How long can you hang on to your PMs without having to sell for food or necesities in the chaos that's about to occur? Got chickens? Got pigs? Got a garden?

Investment | 08.10.2008
Germans Stockpiling Gold Amid Market Panic

Großansicht des Bildes mit der Bildunterschrift: Gold dealers can't keep up with the demand

German gold dealers have stopped taking new orders for the precious metal as demand has skyrocketed. Gold is seen as a safe investment during the market turmoil.

In uncertain economic times, Germans are dumping stocks and shares to take refuge in precious metal, accoring to a Wednesday article in a Berlin newspaper.

German gold dealers report running low on stocks of gold bars and coins.

Heiko Ganss, head of the Berlin branch of gold merchant Pro Aurum, told the Berliner Zeitung newspaper that most gold traders were refusing new orders, as they couldn't meet the current demand.

"Demand is running well above our capacity to supply," he was quoted saying, saying retail banks in Germany were also unable to meet demand.

"Exploding demand"

Gold traded in London at $913 (656 euros) per troy ounce on Wednesday morning, up from $876.75 late Tuesday.

"Demand has exploded in the past few days," said Stephan Henkel, a gold broker at Umicore, which presses gold bars and coins and puts them on sale. Delivery times were running at two to four weeks.

"Currently, demand is about 10 times what it is at normal times," he said.

:hitler:

You can be certain that a repetition of Germany's Weimar crisis is coming soon. There is nothing that can be done to make matters better - even if done by governments unilaterally in a unified action. In fact, such action will only serve to make matters worse.

The larger the financial action, the deeper the financial fall. The G7 still thinks they run the world. That should tell you something about the degree of what they can do.

Gold is honest money that will push all crappy paper out of its way. Why do you think so much intervention took place in gold in US market hours today?

All I can tell you is to stay the course or jump directly into the fire! If the heat in the kitchen is too hot for you, there is nothing I can do for you.

Regards,
Jim Sinclair

[link to www.jsmineset.com]

GOLD will B CRAP.

I could care less about Gold. It is nothing but Yellow Rock.

This crisis is way Beyond GOLD my friend.

Store all the RICHES you want. If it came down to the nitty gritty and I had food and water and you wanted to give me GOLD cause you were hungry...I may give you some because I have some and would care to help.

Other than that...TAKE YOUR GOLD and SHOVE IT !