What we saw yesterday not only was disgusting, but extremely ominous. The US financial market system, after years of market manipulation, is about to become unhinged, unglued. The net worth of the average American will take hits like they haven’t seen since the 1987 crash and eventually could resemble something similar to what occurred in 1929. Most likely not that disastrous in fact, but will feel that way to many.
Much of what MIDAS and a number of other Café contributors have brought to you attention is now quickly coming to pass. At the center of the nightmare for Joe and Jane American is the rigging of the gold price. We all know about Reg Howe’s Gibson’s Paradox and the relationship between US interest rates and the price of gold. Had gold been allowed to trade freely, the price of gold would be hundreds of dollars higher, perhaps even $500 per ounce higher. US interest rates would be much, much higher too.
The US stock market would be much lower and the US real estate market would never have reached the bubble stages it has now. The major problem for US stock market/real estate investors is they have made investment decisions based on an illusion, based on enormous market manipulations which have created an atmosphere, or perception, that little can go wrong; one in which fear has been taken out of the market equation; and one which has encouraged the taking of investment risks they would not have taken had US financial markets (especially gold) been left to trade freely.
What we saw today in the US financial markets, along with the accompanying news, strongly suggests the "S" is quietly hitting the fan. The Orwellians, The Gold Cartel, the Washington power structure, and the bigwigs on Planet Wall Street are petrified by what they see on the horizon in the VERY near future. Surely, this is one of the reasons the Fed will be meeting with the largest 14 credit derivatives players on September 15.
What other explanation could there be for their manic defense of $440 gold? Gold came in steady this morning. When the cabal would not let gold rise along with a sinking dollar, the funds puked their longs, taking spot down to $435.20. The trade turned massive buyer and within 15 minutes gold was up 50 cents on the day, eventually rising to $440 bid on the bulliondesk. Gold would have never traded this way in years gone by. Something is different here. That’s when the crooks attacked again, taking gold right back down to up slightly on the day.
Meanwhile, the cabal forces continued working silver over, breaking it down completely from a technical viewpoint. It is one of the worst looking charts you will ever see. But, how strange. The silver fundamentals are as firm as ever and the prices of oil and copper are at all-time highs. The CRB is right off its multi-decade high. Don’t know how the cabal is engineering this silver take down, but they have inducing specs to load up on the short side in the process. Yesterday’s open interest rose a sizeable 3833 contracts to 121,671.
Once again the funds long gold, seeing the cap The Gold Cartel put on the price, began to dump their longs, especially after noticing how silver was crumbling. After all, if a market is not allowed to go up, then why be long? Thus, in typically inspired Gold Cartel fashion, gold sold off very late on a Friday afternoon after trading higher for 90% of the day. However, the price bent. It did not break, as the trade showed up on the buy side, as they have done for days on setbacks.
What does all this mean?
The powers mentioned above are scared to death to let gold rise above their defense point because they fear it could set off derivatives neutron bombs in both the gold and credit markets. At the same time, the trade shorts are very nervous to remain that way for much longer. The gold fundamentals become more positive by the day. The bad guys are having trouble coming up with enough physical gold to meet demand and it is having an impact on how they operate.
No sense repeating what MIDAS has presented all week. Gold remains in explosive mode. What the cabal is doing can be compared to a kid trying to keep a rubber ball under water. It won’t work for any length of time. There is too much pressure for the price to rise, and to do so substantially.
As mentioned yesterday, gold will not just blissfully rise above this $440 level, like a normal, free market would. It will either fail, or blow through it. A close near $439 today would have been ideal. The Gold Cartel knew that might lead to panic trade short-covering by Monday, so they called out reinforcements nearing the Comex bell to take gold down and make a gold price explosion through $440 less likely Monday morning.
Perhaps The Gold Cartel can blow out all the specs and take gold down to $420 like the mob thinks. I doubt it. My bet is sometime soon the dam breaks and the price of gold streaks towards $500 per ounce.
The gold open interest rose 4444 contracts to 330,070 as the cabal crowd increased its defense of $440.
Silver makes no sense. It probably is as good a value buy here, especially as to what other commodity related prices are doing, than at any time in history. My guess is that this is an engineered false breakdown that will not last long at all. Once silver takes out $6.85, it will streak for $8.
The dollar was weak most of the day until near the end. Oddly enough, perhaps predictably enough would be more appropriate, I could find no plausible reason for the dollar strength, as the news was bearish. The dollar closed at 87.83, up .27.
The John Brimelow Report
Could be time to buy silver
Friday, August 26, 2005
Indian ex-duty premiums: AM $3.40, PM $2.67, with world gold at $437.75 and $438.55. Ample, and quite adequate, for legal imports. The world’s largest bullion importer is a solid buyer at these prices. This is a problem for the Bears.
Perhaps even more so in silver. Ex-duty premiums in silver this morning were 9c and 20c, with world silver at $6.84 both times. Adequate and lavish, for legal imports. If silver trades in the low $6.70s on Monday (as it appears to be closing in NY), this will intensify. It may be recalled that when silver briefly traded in the $6.40s in early January, dealers were flying the metal into India, an event which happens less than once a decade. MarketVane’s Bullish Consensus for silver was 57% last night – presumably it will be down again today. The low in January was 51%. The technical situation is of course absolutely gruesome – that is of no interest to the Indian consumer. A useful trade may be developing: IN THE TWO MONTHS AFTER THE JANUARY LOW THIS YEAR, SILVER ROSE ALMOST 20%.
Japan was comatose. Volume slumped 47% to only 7,069 Comex equivalent and open interest was static – down 605 Comex equivalent to equal 97,449 NY contracts. Mitsubishi’s data implies only a 0.6 tonne (20 Comex) addition to the "General Public"’s long. The active contract was down 6 yen, although world gold went out $1.70 above the NY close – no doubt reflecting buying from further west in Asia as the day wore on.
On silver, though, Mitsubishi reports bargain- hunting by the public and implies the "General Public" added 32.8% to their long – 787 Comex lots.
On Thursday in NY of course an apparently half hearted attempt on $440 was promptly suppressed and reversed. In fact, this effort was more serious than met the eye: on volume of only 28,236 lots open interest soared 4,444 contracts – 13.8 tonnes – to 330,070, almost back to the recent high. Gold finished up 90c. Apparently a serious buyer met a serious seller in a quiet, but definitely not a thin market.
On Friday morning, an effort to drive gold down (including in Euros) around 10 AM NY time was decisively blocked. This kind of action, and India, bodes ill for the Bears.
JB
I shall include more details in my 2006 book about how the world will take shape financially as well as what one should trade in during 2006.
Last week silver broke the key astrological support of $6.84 and it therefore looks weak until crosses $6.84. My advice is NOT to take any position till it remains above $6.84 for 72 hours. This week’s low could touch $6.61. 
![:]](https://goldseiten-forum.com/wcf/images/smilies/pleased.gif "Freude"){kind=small}
