Thai Guru's Gold und Silber ... (Informationen und Vermutungen)

The XAU lost 2.50 to 88.59 and the HUI gave up 5.36 to 192.37.

The gold and silver shares continue to fall out of bed. Demoralization is rampant. Regardless of whatever comes out of the IMF gold sale proposal, the negative talk of IMF gold flooding the market has done damage to all. What a pity it is the poor who must suffer once again at the hands of the sinister central/bullion banks (the way my gold stocks are disappearing, it is making me poor). If the gold market doesn’t turn around in the weeks/months to come, which it should, England’s Brown and South Africa’s Manuel will have done more damage than any gold sale would eventually do to actually help those “down and out” in sub-Saharan Africa.

And how pitiful there is nary a peep about this travesty from the mainstream gold world.

GATA BE IN IT TO WIN IT!

MIDAS

Confession Time
Stephen Roach (New York)
MORGAN STANLEY
2/7

At long last, Federal Reserve Chairman Alan Greenspan has owned up to the central role he has played in sparking unprecedented global imbalances. His confession came in the form of a speech innocuously entitled, "Current Account" that was given in London at the Advancing Enterprise 2005 Conference on the eve of the 5 February G-7 meeting. In the narrow world of econo-speak, his prepared text contains the functional equivalent of a "smoking gun."

Greenspan’s admission came when he finally made the connection between the excesses of America’s property market and its gaping current account deficit. To the best of my knowledge, this was the first time he ventured into this realm of the debate with such clarity. He starts by conceding "…the growth of home mortgage debt has been the major contributor to the decline in the personal saving rate in the United States from almost 6 percent in 1993 to its current level of 1 percent." He then goes on to admit that the rapid growth in home mortgage debt over the past five years has been "driven largely by equity extraction" -- jargon for the withdrawal of asset appreciation from the consumer’s largest portfolio holding, the home. In addition, the Chairman cites survey data suggesting, "Approximately half of equity extraction shows up in additional household expenditures, reducing savings commensurately and thereby presumably contributing to the current account deficit." In other words, he concedes that a debt-induced consumption boom has led to a massive current account deficit. That says it all, in my view.

The obvious and most important point is that rapid growth of US mortgage debt did not come out of thin air. It was, of course, a direct outgrowth of the Fed’s hyper-accommodation of the post-bubble era -- namely, short-term interest rates that have been negative in real terms for longer than at any point since the 1970s. As Greenspan’s dryly notes, "The fall in US interest rates since the early 1980s has supported home price increases." That’s putting it mildly. Suffice it to say, were it not for the Fed’s aggressive monetary accommodation -- especially the post-bubble easing of some 550 bps in 2001-03 -- the home mortgage refinancing cycle would have been in a very different state. But it wasn’t just lower borrowing costs that spurred equity extraction. It was also the rapid rate of house price appreciation -- an outgrowth of what Greenspan notes has been the "unprecedented rate of existing home turnover" that he also attributes to sharply lower interest rates.

Equity extraction has been the pixie dust of America’s post-bubble recovery -- the newfound purchasing power that has fostered the biggest consumption binge in post-World War II history. Were it not for this wealth effect, consumers would have been constrained by an anemic pace of labor income generation -- long the most decisive variable in the macro consumption equation. Lacking in job creation and real wage growth, private sector real wage and salary disbursements have increased a mere 4% over the first 37 months of this recovery -- fully ten percentage points short of the average gains of more than 14% that occurred over the five preceding cyclical upturns. Yet consumers didn’t flinch in the face of what in the past would have been a major impediment to spending. Spurred on by home equity extraction and Bush Administration tax cuts, income-short households pushed the consumption share of US GDP up to a record 71.1% in early 2003 (and still 70.7% in 4Q04) -- an unprecedented breakout from the 67% norm that had prevailed over the 1975 to 2000 period.

These are the telltale footprints of what I have called the Asset Economy (see my 21 June 2004 dispatch, "The Asset Economy"). It’s a story that began in the latter half of the 1990s with the equity bubble. And it’s a story that involved the Federal Reserve as a key player at every subsequent twist and turn. Its role can be traced back to December 1996 with Alan Greenspan’s famous "irrational exuberance" speech -- his first and only warning of the bubble-related perils to come. Unfortunately, the Chairman was quick to become a convert to the very excesses he warned of -- embracing the New Paradigm of rapid productivity growth as justification for why the central bank would be willing to stand by and tolerate faster than normal growth. That acquiescence -- putting the Fed Chairman in the dangerous role of a cheerleader insofar as the financial markets were concerned - (the great unanswered question is why? Why did Greenspan visibly change his course at the end of 1996, after a visit by Robert Rubin. - Jesse) - gave a green light to investors and speculators all the way to NASDAQ 5000. Then when that bubble popped, the Fed went into its well-rehearsed "Japan drill" -- unleashing the aggressive easing that gave rise to the excesses of the home mortgage equity extraction cycle. This is the grand continuum of the Asset Economy -- wealth effects that morphed seamlessly from the stock market into the property market.

Aided and abetted by the conscious policy tactics of the Fed, Alan Greenspan can hardly profess innocence in assessing the current state of global imbalances. By warmly embracing asset appreciation and the debt binge it fostered, the central bank has encouraged consumers to all but abandon traditional income-based saving strategies. Instead asset-based saving has become the "new new" thing of the Asset Economy -- as has the debt-induced equity extraction that has driven US consumption to unprecedented excess. This shortfall of income-based personal saving, in conjunction with outsize government budget deficits, has created the very shortfall of national saving that makes ever-widening current-account deficits unavoidable. And that, of course, puts extraordinary pressure on the rest of the world to fund America’s profligate ways. (A role to which Roach's and Morgan Stanley's good and BIG customer, China, stepped up to more than willingly to support their mercantilist policies. Jesse) At long last, Chairman Greenspan owns up to the central role he and his colleagues at the Federal Reserve have played in fostering these developments.

Alas, he offers a hopeful prognosis as to how this all works out. Greenspan’s basic argument as set forth in his London speech is that we can all relax -- that "market pressures" are likely to play a key role in the coming US current account adjustment and in the global rebalancing that adjustment would spawn. In particular, he is optimistic both on the outlook for public and private sector saving. Undaunted by his mis-diagnosis of the fiscal outlook in 2001 -- he argued that tax cuts would be the wisest way to spend the government’s budget surplus -- Greenspan offers hope that the "voices of fiscal restraint" will finally prevail in Washington. We’ll know more on the fiscal policy front soon enough as the Bush Administration prepares to release its new budget. Suffice it say, a credible program of significant deficit reduction will be tough to pull off as the White House rules out tax increases and focuses, instead, on the 18% of federal expenditures that can be classified as nondefense discretionary spending (excluding homeland security).

Moreover, Greenspan also expresses the belief that "An increase in household saving should also act to diminish borrowing from abroad." This is a key assertion. What he is saying implicitly is that the Fed will need to withdraw support from the Asset Economy by restoring some semblance of normalcy to America’s real interest rate structure. What he is also implying is the hope that the US labor market will now provide increased support to the American consumer -- in essence, spurring the long-awaited "hand-off" from the new asset economy back to the more traditional income economy. January’s disappointing employment survey -- just the latest in a long string of subpar gains on the hiring front -- underscores how difficult it will be to execute this hand-off.

This may be the toughest nut of all to crack for the US central bank. It underscores the delicate tradeoff between real interest rates and saving as the Fed attempts to wean the American consumer from the excesses of the Asset Economy. Financial markets are presuming that the central bank will err on the side of caution in executing this delicate transition back to the income-based economy of yesteryear. The broad consensus of investors believes that the Fed wouldn’t dare flirt with a meaningful shortfall of economic growth. Futures markets are quite explicit in validating this perception by now pricing in only two and a half measured tightenings of 25 basis points each, between now and midyear. That’s hardly a move that would spur a spontaneous revival of personal saving, in my view. Nor would it be enough of a move to take away what I have called the "candy" of the carry trade that has spawned speculative excesses in a variety of risky assets -- including emerging-market, high-yield, and even investment-grade corporate debt. I continue to believe that it will take more Fed tightening than the markets are expecting -- in conjunction with a long overdue backup in long-term interest rates -- to spur a shift from asset- to income-based saving.

The Federal Reserve is trapped in a moral-hazard dilemma of its own making. It dates back to the Great Bubble of the late 1990s and the central bank’s unwillingness to take away the proverbial punch bowl just when the party was getting good. The close brush with deflation that then ensued was a painfully classic post-bubble aftershock. That experience underscores the greatest shortcoming of modern-day central banking -- the inability of monetary policy to cope successfully with asset bubbles and the deflationary perils they engender. The history of the 1930s and Japan in the 1990s are grim reminders of that shortcoming. Alan Greenspan’s confession finally sets the record straight on how he got us into this mess. But it is a confession that is still steeped in denial. The presumption that natural market forces can cure all ignores the lingering perils of an all-too treacherous endgame. Let’s not forget that nearly five years after the equity bubble popped, America’s imbalances -- to say nothing of the world’s imbalances -- remain in uncharted territory.

-END-

Café member's letters of interest:

Bill,
Hope all is well. Dropping you this e-mail to keep you up to date on the Spitzer letter I sent you back in the beginning of January. I sent you a copy and you said you would hold it. As of today Feb 5th, I have not received a reply back AT ALL. I find this to be very interesting in the grand scheme of things. Let me explain. When I first wrote to Eliot Spitzer back in February of last year they received my letter on Feb18th.This is verified because I have sent all my letters to him certified mail. I received a letter back from them on March 8th. It took them 18 days to respond back to me. Remember this was back during the campaign were many people were writing him letters. In May of last year, I wrote them a letter after the bombing of gold and silver, which they received on May 11th via certified mail. This was the letter in which Mr. Peter Drago wrote thanking me of my continued interest in this IMPORTANT issue. I would like you to know that I received this reply back from them on May17th.It took them only 6 DAYS to respond.

Bill,I truly think as Ted Butler has written recently that something very big is about to happen in silver. Remember the article I wrote a couple of weeks ago saying I thought silver was coiled and ready to blow! For the last month the big commercial shorts have been dropping like hotcakes. Although I cannot tell, maybe there has been some extreme pressure put on them. Back in Dec 2003 they were able to bring 20 million ounces of silver into the warehouse. Since then, as you well know, we are down to roughly 103 million ounces. This is with NO BIG shipments brought into the warehouse in well over 13 months! This is with many silver dealers saying they cannot fill many of there orders. This is the silver trap that David Morgan has eluded to.

I respect and admire all of the work and effort that you and GATA have done to bring this gold suppression scheme to light. But I must say, that the key to exposing the scam in the gold market, is the SILVER MARKET! This is the key to opening Pandoras Box. Unlike gold, there is far less silver to go around than gold. I would like to say, we owe a great deal of thanks to TED BUTLER, as he has been the pioneer in exposing the great silver manipulation. As Ted points out, silver is consumed while gold is not. Time will tell very shortly, as we have the march silver contact coming up on delivery. In a recent Midas, you said you heard of some big silver buyers coming in the middle of february. I know the sharks smell blood, but one thing they are careful of is not making the Mistakes the Hunt brothers did.

I respect and admire the attorney generals office. Really they are in a tough position, because I think they KNOW the truth, and they have been forewarned. Put yourself in their shoes, as Ted wrote some months back, what would you do? It is my hope and prayer that the attorney generals office will help put an end to this.

May the LORD bless you,your family, and all those in the GATA army. Thank you Bill,you are truly a pioneer in the gold camp.
Sincerely,
Scott Hennessey

Shaka Jr.,
FIAT NIRVANA & THE TEMPER-TANTRUM

Please thank the kind soldier who dug up Alan's missive.

After reading it through and attempting to filter the green-speak I concluded that somewhere in 1987 Alan must have been asked if he thought he could actually conjure up enough magic to create the "Fiat Nirvana" he described so well in his article from 1981.

I describe it as such because he almost succeeded, but not quite. His quote; "The only seeming solution is for the U.S. to create a fiscal and monetary environment which in effect makes the dollar as good as gold, ...". (read strong dollar policy).

He went on to conclude that this "environment" would produce (I'll paraphrase);

- a stable gold price, (a statistician could give you a perfect number), I'll speculate that since 1984 the mean gold price is about $350, and over the last twenty years I'd say that was "stable" when you consider the deterioration of everything else around us, so I think he succeeded in this regard.

- a sharp reduction in interest-rates, (even to 1%), again we got to hand it to him, he delivered.

- a "possible" further side benefit of political pressure on the administration and Congress to move expeditiously toward non-inflationary policies. (but how can this only be a "possible" side benefit IF you need this benefit as a PRECONDITION to the "dollar as good as gold environment" in the first place? This is the "great circular reasoning" of the banking caste that is used like a magician uses "slight-of-hand" to CONVINCE you OF his magic.

So this is where the whole daisy chain breaks down, and the Greenspan MAGIC unwinds in a chaotic schmutz, UNLESS YOU ACTUALLY SUCCEED IN CREATING NON-INFLATIONARY POLICIES YOU SHOULD NOT REAP THE REWARDS IT
PROMISES!

Yet America has reaped and reaped and reaped and raped ............

What I can't figure out is why Alan is not storming the halls of the Congress and the White House rage-fully screaming; "I used every tool in the bag to deliver you a "dollar as good as gold", and all you could do was squandered the greatest opportunity ever!" aaaaahhhh.

Oh well, I'm a happier man, and richer for pursuing the simple truths in life, and oh look ... there's ToTo pulling on a curtain ......
Buena Fe

@hpoth,
mit dem In-Ruhe-Lassen meinst Du hoffentlich nur den diskutierten Punkt.

Du weißt, ich schätze sonst Deine Beiträge sehr.

----------------------------------------

TV-Programm

Heute ARTE 19:00
Glanz der Erde - Nickel aus Neukaledonien

Morgen Arte 19:00 - Eisen in China

# ulfur

bezieht sich nur auf die Diskusion, bist Du jetzt beruhigt?

gruß hpoth

In dieser Analyse wird auf China und den finalen Krieg bzgl. der Ressourcen eingegangen, der schon voll in Gange ist:

http://news.goldseek.com/OnlineInvestorsNews/1107897207.php

Das ganze wird die USA schlimmer treffen als eine Atombombe !

February 8 – Gold $412.10 down $1.30 – Silver $6.53 unchanged

Passion From Cafe Members Over IMF Gold Sale Talk Is Pronounced
***"The poor do not need hand outs of the wealth stolen from them in the form of grants that control what they do and how they live. They need sound currency and the rule of law so they can do and live as they please as is in harmony with their neighbors and the land. Hence, the current manipulations in the gold market --- including the proposed sales of gold by the IMF -- are part of waging war on the poor. Ask yourself, who is it exactly that is accumulating all of this gold at suppressed prices? Finding out who is "piratizing" the gold out of central banks and governments and understanding the dirty tricks and black budget operations that have bankers and government officials kow-towing to such financial insanity will answer what is the most important UnAnswered Question regarding economic warfare today." ***
Catherine Austin Fitts

GO GATA!

When I had dinner in Vancouver with my friend John Anderson, President and CEO of Key Gold, he unequivocally stated that gold would trade down to $410 and then reverse. Well, so far he got the first part right…to the penny. Now for the reversal.

Today was vintage cabal. After an early slam to $410, gold fought back to unchanged, sold off and then went up on the day. Technical reversal in the air? Nope, not allowed – that would change the tone of the market. Gold was taken right down again. The Gold Cartel is milking this move down for all they have and with every market maneuver they can muster. Gold has now closed lower the last 9 out of 10 days:

April gold
http://futures.tradingcharts.com/chart/GD/45

Let’s hear it for IMF gold sales to help the poor!

Some very disturbing news coming out of London from my STALKER source. Seems like the big physical players over there plan to go into action soon to take silver down 50 cents to a dollar. This is a major change from what we heard recently that they would be going after silver on the upside in the middle of February.

The reasoning behind the supposed coming raid is even more disturbing and makes little sense to me. They want to teach the paper longs a lesson, which means what is left of the little guy specs, etc. Our STALKER source was contacted to warn him of what they say is coming. They also said once the raid was over, the market would take off again so there was no reason to panic.

Why these so-called big shots don’t just take delivery on Comex instead is beyond me. THAT would teach some people a lesson and point out the importance of owning physical. This kind of talk is sickening from these turkeys. This input is from the same guys who ranted over the Comex shorts ruining their market. So what are they going to do…reward them even more? You got me on this one. We shall see. Could be gobble-gobble talk, could be the real deal? What I do know is this is the sort of market commentary which is circulated when it is darkest before the dawn and when markets tend to turn around.

Gold and silver are very oversold, yet if The Gold Cartel and other market players are going to bury the markets, nothing can stop them in the very short-term.

When it comes to the significance of what The Gold Cartel and allies are doing, one only need reflect on the G-7 meeting. What came out of this trumped-up meeting? NOTHING except for talk of IMF gold sales and talk of these sales has been trumpeted all over the world… the BBC, the FT, CNBC, Reuters, Bloomberg, etc. This was a culmination of a month’s worth of effort by British finance minister Brown to cast a pall over the market. He and his cohorts, the financial market press, were effective.

Over the years critics of GATA have objected to our findings by querying the motives of The Gold Cartel. "Why would holders of gold assets talk down the market?" they query. "That would not be in their interest." Our retort has centered around the following:

*It is the essence of the US strong dollar policy, the evidence of which we have seen over and over again these past years.

*Gold as an asset is insignificant compared to the rest of the US and world financial markets.

*It is used by market pundits and the public as a barometer of the health of the US and world financial system. The lower the "barometer" price, the more this system is decreed to be healthy.

*When the gold price soars, what does the financial market ALWAYS focus on? Answer: inflation, crisis, safe-haven investing. Wall Street (and its bullion banks), the Fed and US administrations abhor a higher gold price for those reasons and have done all they can to manufacture a lower gold price than should be over the last decade.

The following is a perfect example GATA has hit the nail on the head with our rationale. Don Hayes is a veteran, highly-regarded observer of the markets and is known for his keen technical analysis and market commentary. So here we have The Gold Cartel and officialdom orchestrating the price of gold down, the most obvious of market manipulations. Therefore, in terms of what it inherently means to the state of the US financial markets, the real/essential correlation is ZERO because the lower price is an artificial and orchestrated one. Yet, look at what Mr. Hays said yesterday in his market analysis:

..have cited that I am watching with HUGE interest the price of gold in dollars, as well as in euros and yen. I strongly suspect Greenspan is as well. The action last week is sending pretty strong hints that the Fed needs to take a breather on raising interest rates. Let’s give this economy a few months to send the next message. Remember, there is nothing I believe on the economic realm as much as that the real enemy the Fed is fighting during these next few decades will be Deflation, and not Inflation. I believe the Technology Productivity enhancement, the perfect pricing of the e-net, plus the glut of workers on the international scene will keep prices under control. There will be many battles in this war. The Fed has been fighting a serious battle since 9-11, and they have won it, BUT that is just one battle, the next one will be right over the hill. The price of gold is sending good vibes that we are not too hot, not too cold, but j….u….s….t right for the moment. But it is also warning Europe to wake up and smell the growth roses. It is also starting to warn Japan that they have a tough road ahead, and need to keep promoting those few reforms of the past few years to get back on track….

I am purely guessing about what the perfect price of gold is, but keying off of the other times in recent history when conditions were "just right" as far as inflation vs. growth parameters. I think that the price of gold in U.S. dollars should be somewhere in the $380 dollar range. When it is above that, my thesis is that the Federal Reserve and the U.S. Government are adopting a too-liquid monetary blend of stimulus to keep inflation and deflation under control, while maintaining a healthy economic proposal. So the recent breakdown in the price of gold, according to my interpretation, is confirmation that the Fed is doing good—returning to norm. As we turn to Europe and Japan, however, we see that those ranges I’ve guessed are "just right" are now showing that they need to step up their pro-growth stances. I am really delighted to see this latest action in gold. This Baseline chart shows Friday’s lower low action very well. …Hays Advisory llc

So there you have it. I rest my case. That is exactly why The Gold Cartel and allies have done what they have – to elicit this sort of commentary, which in turn, does affect the markets in the short-term as various market participants act accordingly.

Do you think the US Treasury bonds would be soaring if gold was $475 bid? The significance of drawing this to your attention might turn on some light bulbs when you compare the US long bond with that of the share price of Fannie Mae (see below).

The John Brimelow Report

IMF considered

Tuesday, February 08, 2005

Indian ex-duty premiums: AM $7.69, PM $7.83, with world gold at $412.40 and $411 35. Ample for legal imports. The Reserve Bank of India is said to have intervened today to prevent the rupee following the rise of the dollar.

UBS remarks this morning:

"One of the most interesting factors in the gold market in 2005 has been very strong physical demand, mostly from India, Japan and other Asia and to a lesser extent Europe. This week has seen further demand, although at a slower rate than was noted in January."

Physical demand, of course, was far from absent in late 2004. As to recent demand, Reuters says today:

"In Singapore, premiums inched up to 60 U.S. cents an ounce from 50 cents last week, indicating that consumers from Indonesia, Malaysia and Thailand were buying gold at the lower prices." Gold stands today at a 4-year low in Thailand.

The ECB announced gold sales last week from subordinate banks of 81 Mm Euros, about 7.9 tonnes, rather more than in previous weeks.

TOCOM stepped aside. World gold did go out $1.30 below NY with the active contact up 7 yen, but volume was down 53% to only equal 11,895 Comex lots and open interest was static (down 27 Comex). Japan is not currently influential in gold.

Last night Refco Research issued a short call on gold, probably the first in half a dozen gold forays:

TRADE RECOMMENDATIONS:

Sell 1 April gold at market. Risk 420 (intra-day). Expect 405. Every momentum (or even short term chartist) must feel the same impulse. Rothschild – Sydney said yesterday:

"It now seems only a matter of time before we will see a net speculative short position."

A situation normally seen only at major lows.

A good exemplification of the curiousness surrounding gold commentary appeared to day on Reuters :

"IMF seen favoring gold sales over revaluation"

By Lesley Wroughton
WASHINGTON, Feb 8 (Reuters) - The International Monetary Fund is likely to favor sales over revaluation …analysts said… most analysts think the Washington-based lender's best course would be to sell some of its gold stocks rather than revalue them. While revaluing the gold stocks would increase the carrying price of the gold on the IMF's books, analysts said, it would not provide cash to fund the debt write-off. It would also come with costs for certain borrowers and shareholders."

In fact, of course, as discussed yesterday, most analysts actually involved in the gold business, who tend to be mildly literate in Financial matters, are bemused that anything except a revaluation/debt write-off would be considered.

This question of Financial literacy is really serious. Consider the comments later in this account by a spokeswoman for a basket-case nation lobbying group

"Nancy Birdsall, head of the Washington-based Center for Global Development and author of "Delivering on Debt Relief," said revaluing the gold would be less politically sensitive but would lower the IMF's cash balance and stifle its ability to lend to needy countries in the future.

"When it is gone, particularly if it is revalued so that there is a loss on the balance sheet, the heads of central banks of the G7 and other non-borrowing countries will sleep somewhat less well at night," Birdsall said. (JB italics)

Apart from accounting literacy, IMF gold sales are an esoteric matter. If the IMF revalued to market their gold on hand, they could then apparently write off some 72% of the 11 billion of basket case debt they have without impairing their capital. This is denounced as a book keeping matter, but in reality debt forgiveness is an extremely direct benefit to the debtor (as any mortgage borrower would immediately agree). Unless of course the debtor – and perhaps the lender – had already decided to ignore the obligation.

Fresh cash is a different matter. This could be realized by liquidating gold – or indeed any other IMF balance sheet asset – if the members felt like being charitable.

To confine the issue to gold, the strictly rational approach to debt relief would be to revalue and forgive to the maximum extent, and then turn to sales. The resistance to this sequential approach, to the extent that it is not simply illiterate, has to be considered as revealing the extent to which this campaign is driven by anti gold animus, as opposed to charity.

The noted gold bear today floats an interesting analysis, indicating that a massive decline in Comex call open interest starting late last year preceded the subsequent weakness in gold. He offers no explanation.

One wonders how sophisticated players could be so prescient.

JB

CARTEL CAPITULATION WATCH

The US stock market flutters right along. The DOW rose 9 to 10,724, while the DOG gained 5 to 2086. Of concern to stock bulls should the dive-bombing action of Fannie Mae (see below) and the extraordinary strength of the 30-year long bond. March closed up another 13/32 to 116 7/8, another contract high.

As I recall, 9 out of the last 10 US economic reports over the last two months have come out on the negative side – nothing disastrous yet most all of them have been disappointing. The bond market action suggests something more than disappointing lies ahead. Seems clear to me why:

*Effects of low interest rates are behind us.

*Government stimulus programs are behind us, with a number of them to be cut back in the near future. One market sophisticate from Canada said it all today. The US is cutting back on programs whose money would have been parked with the US consumer and deploying it in bullets which will be blown up in Iraq.

*The US consumer is tapped out.

*The effects of prior US tax benefit reductions have mostly run their course.

The dollar closed up a scant .05 to 85.14 led by a strong yen (105.75). The euro gave up .08 to 127.72.

US economic news:

NEW YORK, Feb 8 (Reuters) - U.S. consumers felt less confident about the economy in February, due in part to unease over federal economic policies, though the outlook for personal finances improved, according to a survey released on Tuesday.

Investor's Business Daily and TechnoMetrica Market Intelligence said their economic optimism index fell 1.4 points, or 2.5 percent, to 54.8 in February after rising to 56.2 in January. A reading above 50 indicates optimism….

-END-

Rhody with a PM leasing update:

Hi Bill:
What is up with lease rates??????? Yesterday, near term rates in silver rose almost 20% and today they are down by over 30%, and this pattern repeats all the way out to the 6 month term. It's almost like someone said, mission accomplished, stop leasing. When I am talking these large percentages it's from very small base levels. Silver lease rates are down to .22% from .38% in the one month term.

I did not comment about gold yesterday, because little happened. The same goes for today. There is no backwardation, but the rate curve is absolutely level, and at somewhat elevated rates. Someone is keeping the pressure on both these metals.

This is not for profit. For some reason the monetary interests want gold and silver down and that still screams financial system instability to me, and so does all this talk about selling IMF gold. That won't happen, as the IMF doesn't actually own it. The IMF manages the gold provided by other nations as emergency funding should the Bretton Woods system be at risk.

Somebody should tell people that the BW system ended over 30 years ago when the United States defaulted on its sovereign debt. That means the IMF is a relic and its gold serves no purpose. That's why the CABAL wants it mobilized to cap gold prices.
Regards, Rhody.
http://www.kitco.com/market/lfrate.html

Which leads me to this note from a fellow Café member, one that makes a lot of sense as to the latest IMF doings vis-a-vis Fannie Mae:

Bill,
Your team may have already addressed this but...

Have you all looked into the likelihood that the Fed and its international brethren are actively taking control of the international financial markets in order to buy them time to straighten up Fannie's balance book?

Back in December, when the auditor came out and found Fannie to be around $9 billion off and left severely undercapitalized I thought:

"Oh crud. They can't let that problem hit the bond and currency markets. They'll do something drastic, even by their standards."

Look what's happened since then.

Every market that had to move in a certain direction to help out Fannie, has. And we all know how divergent that has been from economic fundamentals. Then we get crap like Brown is pulling with the IMF. I think they are preparing the markets to absorb the full news when Fannie's corrective action plan is announced.

Go back and look what went on behind the scenes with Long Term Capital Management became a serious problem. All hell was breaking lose but the domestic and international press was held in the dark. Or kept their knowledge hidden. These guys will do anything and they can't let Fannie take down the markets.

Just thought it might be worth investigating if your team hasn't yet. If you have, ignore this and keep up the good work.
Ron

Fine heads-up here by Ron. Fannie Mae (FNM) made new lows today ($61.86, down $2.59), leaving one noticeably ugly chart:

(Worth a good look)
http://new.stockwatch.com/swne…utilit_snapsh_result.aspx

The obvious attack on gold by The Gold Cartel forces via the IMF talk has elicited more passion from Café members than anything in years. What is mind-boggling is it has been days now since IMF gold sale comments have circulated and still not a peep out of anyone from the mainstream gold world.

More on this tomorrow and on why GOLD RUSH 21 is so important. Some of those reasons are expressed in a number of emails sent my way. What stands out is the noticeably well thought out outrage of fellow Café members compared to the Casper Milquetoast silence from the gold industry/World Gold Council, etc.

Bill:
"To finance the relief of debts owed to the IMF and to enable the Fund to continue to play a role in the poorest countries, the Managing Director has stated that he will bring forward proposals ... covering the Fund's gold and other resources and in an orderly way," the communique said.

What am I missing here - the IMF has loaned these poor countries "money" created out of thin air, and now they are going to sell their gold to relieve the "debt"! Why not write off the loans and keep their gold. I can't believe this nonsense can go on for much longer.
Keep Up The Good Work
Elton

Dear Bill,

Remember Mel Gibsons "The Patriot"

I've been a member for at least the last 4 or more years and can't wait till our day comes. We've done pretty good against the bought off financial media and brotherhood of bankers. Times right now are tough but we went through a few of these the last 5 years or so.

I'm writing to ask you shouldn't we take it to these rats? I would suggest we expose the truth about the gold sales from the IMF. We had support as you know from congress the last time this was floated. Whose gold is it anyhow? I would bet most of it is ours (the US). Turn this issue into them verses us. Who does Gordon Brown think he is suggesting we sell OUR gold to pay off bankers who have enslaved these countries! Tell the bankers to write off the loans! This is totally outrageous and should be ridiculed to the hilt. What do you think of putting advertisements in many smaller city newspapers and maybe a few of the larger ones (Washington Post, NY times)? If the GATA treasury doesn't have the funds I'm sure you can raise them through your readers and network.

I just don't want to see us sit back and take this bull. Keep up the fight and lets get more proactive. You use to be more so a few years ago and maybe that is what this Goldrush 21 is about. I just don't know if that is going to get the message out to the normal Joes out there who don't follow gold. I think some Joes out there would be upset if they here our country is ready to bail out bankers because of their oppressive loans.
Best Regards,
David

Better take a deep breath on this one from this German Café member re Brown and his Godfather:

Dear Mr. Gordon, ( public.enquiries@hm-treasury.gov.uk )

You are the most cynical member of parliament in EU - just like my Godfather and national socialist Prof. Dr. med. Karl Brandt (http://www.ushmm.org/research/doctors/medical.htm), the secret killer of hundreds of thousands of innocent human beings - who, being a medical doctor and the head of the nazi "health" ministry just killed and killed and killed...

While his justification was, the more he killed, the more he was helping to feed the hungry german army ...

It just depends on how you look at it!

So you are killing and killing and killing entire industries in the mining sector especially in sub-saharan africa, and you are killing these mines and these miners to feed their poor children ... ?

Why don't you create the british branch of secret modern NAZI cleaning program: To rid the earth of all "life, unworthy living" ?

At least that would be more honest than your screwed up and cynical "Gold sale for the poor."

Sorry for being honest with you !

Anyone can make a mistake.

But you are doing this for the second time.

So it is not that you are stupid. You know what you are doing.

It is clearly your evil intention - to hurt and further help to enslave the poor !

You are just too cowardly to stand up to your secret determination to hurt and destroy.

But we - the people of the world - we have had enough of national socialism, and silent killing.

So stop your lies, and get honest.

If you want to help poor countries - buy what they are mining - buy their gold !

Or shut up, and go home.

Sincerely,
Karl Bernhard Möllmann