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

March 31, 2011 by · Leave a Comment 

GATA

8:28p ET Monday, March 28, 2011

Dear Friend of GATA and Gold (and Silver):

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

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

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


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


Didn’t Fed attend other G-10 gold committee meetings?

March 31, 2011 by · Leave a Comment 

GATA

6:24p ET Tuesday, March 1, 2011

Dear Friend of GATA and Gold:

After 12 years of collecting and publishing government documents confirming or implying the Western central bank gold price suppression scheme, and collecting and publishing the many evasions of central banks and their refusals to answer simple questions about their gold policy, GATA sometimes feels as if it is engaged in a never-ending struggle to prove that the sun rises in the east.

But here’s still another potential proof for you, stemming from the Federal Reserve’s release to GATA two weeks ago, at federal court order, of the minutes of the secret meeting held on April 7, 1997, by the G-10 Gold and Foreign Exchange Committee, at which the committee discussed at great length how member nations might coordinate their gold policies and how this coordination might affect gold’s price:

http://www.gata.org/node/9623

In GATA’s lawsuit, brought under the federal Freedom of Information Act in U.S. District Court for the District of Columbia, the Fed insisted that it could not find any more documents dealing substantively with gold than the dozen or so it produced for the court’s private review. The record of the G-10 committee meeting was the only document the court ordered the Fed to disclose, such minutes, the court ruled, falling outside the law’s several exemptions.

To make sense of any of this, one has to believe some of the following things:

1) The Fed has no other records of the G-10′s Gold and Foreign Exchange Committee because the committee has met only on April 7, 1997, and neither before nor since.

2) The committee has met more than that once but the Fed has no records of any other committee meetings because the Fed was represented only at the meeting on April 7, 1997.

3) The committee has met more than that once and the Fed was represented at those other meetings, but the Fed’s representatives failed to report in writing about those other meetings, even as they reported at such length about the April 7, 1997, meeting.

4) The Fed did have records of those other committee meetings but they were discarded, misfiled, or, when GATA started asking questions, hurriedly transferred to the office of the Exchange Stabilization Fund over at the Treasury Department, the ESF being exempted by law from any accountability to Congress, the public, and the courts.

If, after reflecting on the strange singularity of the minutes of the April 7, 1997, meeting of the G-10 Gold and Foreign Exchange Committee, you still don’t think the Fed is hiding a lot about its involvement with the gold market, you may be qualified to write daily gold market commentary at Kitco.

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

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


‘Fisher’ at G-10 gold meeting was likely NY Fed market rigger Peter Fisher

March 31, 2011 by · Leave a Comment 

GATA

2a MT Saturday, February 19, 2011

Dear Friend of GATA and Gold:

A well-informed friend notes that the “Fisher” quoted in the minutes of the April 1997 meeting of the G-10 Gold and Foreign Exchange Committee, dispatched to you yesterday, was almost certainly Peter R. Fisher, then head of open market operations and foreign exchange trading for the Federal Reserve Bank of New York, not Richard W. Fisher, lately president of the Federal Reserve Bank of Dallas, as first suspected.

This makes wonderful sense, since the office Peter Fisher held at the New York Fed in 1997 was essentially the Fed’s primary market-rigging office, and Peter Fisher’s work was inadvertently brought under suspicion the following year in an admiring but later notorious profile published by The Wall Street Journal, which reported that he “swaps intelligence and rumors with traders and dealers from his office in the Fed’s 10th-floor executive suite that overlooks the trading floor he runs.” Of course there was then and is now no more important market for the Fed to rig than the gold market, and when the G-10 Committee on Gold and Foreign Exchange met in April 1997 to discuss “coordination” of Western central bank policy on gold, Peter Fisher would have been a vital participant.

The Fisher identification has been corrected in yesterday’s dispatch in the GATA archive here:

http://www.gata.org/node/9623

And here:

http://www.gata.org/node/9624

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

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


G-10 minutes from 1997 show central bankers conspiring about gold

March 31, 2011 by · Leave a Comment 

GATA

3:43p MT Friday, February 18, 2011

Dear Friend of GATA and Gold (and Silver):

Western government and central bank officials discussed coordinating their gold market policies at a private meeting of the G-10 Gold and Foreign Exchange Committee in April 1997, according to minutes of the meeting released to GATA today by the Federal Reserve Board upon the order of a federal court. The minutes also quote a U.S. delegate as warning that a rising gold price would increase the U.S. government’s debt burden.

The document was only one of many whose release was sought by GATA in its freedom-of-information lawsuit against the Fed in U.S. District Court for the District of Columbia. The judge, Ellen Segal Huvelle, ruled two weeks ago that other documents containing the Fed’s gold-related secrets were exempt from disclosure under the law.

The G-10 committee minutes were compiled by New York Fed official Dino Kos and were transmitted to the Fed’s Board of Governors by Edwin M. Truman, then director of the Fed’s International Finance Division and a participant in the meeting.

They quote a British delegate as saying that while the gold price seemed “sluggish,” the gold market itself was actually showing “resilience” and “physical demand is high.” The British delegate described the gold market as “traditionally secretive.”

The minutes show committee members acknowledging the heavy involvement of central banks in gold leasing, with the British delegate estimating that a year’s worth of gold production already had been sold forward. That was 14 years ago and of course much central bank gold leasing followed until the last year or so.

According to the minutes, the U.S. delegate cited above, identified only as “Fisher” — apparently Peter R. Fisher, head of open market operations and foreign exchange trading for the Federal Reserve Bank of New York — also warned that central bank gold sales and leasing might be construed as positive for gold. The minutes say: “First, he noted that some market cynics viewed central bank activity as a contrary indicator and therefore one had to be conscious of possible feedback effects. Second, he noted that the price of gold, unlike other commodities, had historically not trended toward the cost of production. This seemed to suggest an ongoing supply/demand imbalance. Third, he had the sense that the gold leasing market was an important component in this puzzle, though he did not understand enough about that market, particularly the credit risk aspects of gold lending.”

A Canadian delegate, the minutes say, wondered whether data about the gold market could be trusted — a point much pressed by GATA and others lately.

U.S. delegate Fisher, the minutes say, “explained that U.S. gold belongs to the Treasury. However, the Treasury had issued gold certificates to the Reserve Banks, and so gold (by these means) also appears on the Federal Reserve balance sheet. If there were to be a revaluation of gold, the certificates would also be revalued upwards; however [to prevent the Fed’s balance sheet from expanding] this would lead to sales of government securities. So the net benefit to Treasury would need to be carefully calculated, since sales of government securities would expand the public portfolio of government securities and hence also expand the Treasury’s debt-servicing burden.”

This seems to be as candid an acknowledgement as any of the U.S. government’s profound interest in suppressing the price of gold.

Two years after the G-10′s Gold and Foreign Exchange Committee discussed coordinating Western central bank policies toward gold, most of those central banks announced just such a formal mechanism of cooperation, the Washington Agreement on Gold:

http://www.ecb.int/press/pr/date/1999/html/pr990926.en.html

The minutes of the April 1997 meeting of the G-10 Gold and Foreign Exchange Committee, which the Fed sought to conceal, along with the secrecy on which the Fed successfully has insisted for its other gold records, are powerful confirmations of Western central bank interest in controlling the gold market surreptitiously. The minutes have been posted at GATA’s Internet site here:

http://www.gata.org/files/FedMemoG-10Gold&FXCommittee-4-29-1997.pdf

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


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


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FedMemoG-10Gold&FXCommittee-4-29-1997.pdf 391.97 KB

Fed can keep most gold secrets but must yield one, judge rules

March 31, 2011 by · 1 Comment 

GATA

8:55p ET Thursday, February 3, 2011

Dear Friend of GATA and Gold:

The Federal Reserve can keep secret most of the gold documents at issue in GATA’s freedom-of-information lawsuit against it, a federal judge ruled today. But the judge, Ellen Segal Huvelle of U.S. District Court for the District of Columbia, ordered the Fed to disclose to GATA a potentially crucial document by February 18.

Judge Huvelle ruled that most of the Fed’s documents were exempt from disclosure under the U.S. Freedom of Information Act for being “pre-decisional or deliberative” or for containing privileged or confidential commercial or financial information obtained from a person or corporation.

Among the documents so exempted, the judge found, is “an email exchange” among Federal Reserve Board and Federal Reserve Bank of New York staff members “discussing what information to include in response to requests from Congress regarding the Federal Reserve’s involvement in gold.”

Similarly exempted, the judge found, is “a September 17, 2001, draft document entitled ‘Confidential Draft: Potential Repo/Swap Involving Treasury Gold.’ The document identifies issues that would be raised if a swap or repurchase transaction involving Treasury gold were to occur.”

The one document whose disclosure was ordered by the judge was described in her memorandum of decision as “a staff member’s notes on the discussion by the Gold and Foreign Exchange Committee of the Group of Ten (or “G-10″), as well as a transmission memorandum from Mr. [Ted] Truman to the board.” The notes, the judge found, “are a straightforward factual recounting of a meeting with representatives of foreign central banks, detailing what each of the participants said.”

Judge Huvelle ruled in favor of the Fed and against GATA on the adequacy of the Fed’s search for documents relevant to GATA’s FOI request. GATA considered the search inadequate for several reasons, not least because the Fed never acknowledged the gold swap arrangements with foreign banks that were acknowledged by Fed Governor Kevin M. Warsh in his denial of GATA’s FOI request in September 2009:

http://www.gata.org/files/GATAFedResponse-09-17-2009.pdf

Regardless of the adverse parts of the judge’s decision, GATA considers its lawsuit a success for having established in open court that the Fed has many secrets about gold, a subject where secrecy’s only plausible purpose can be surreptitious market intervention, which would be fully consistent with the official documentation GATA has compiled about such intervention. (See http://www.gata.org/taxonomy/term/21 and particularly http://www.gata.org/node/9545.)

That the Fed has participated in gold swaps for market-rigging purposes has been established, among other things, by the January 1995 minutes of its own Federal Open Market Committee (http://www.federalreserve.gov/monetarypolicy/files/FOMC19950201meeting.p…) and by the refusal two months ago of Germany’s central bank, the Bundesbank, to deny that it has undertaken gold swaps with the United States (http://www.gata.org/node/9363).

Further, the record of GATA’s case may be useful to U.S. Rep. Ron Paul, R-Texas, new chairman of the House Financial Services Committee’s Subcommittee on Domestic Monetary Policy, should he, as many hope and expect, formally question Federal Reserve officials about the Fed’s surreptitious involvement in the gold market.

Of course GATA’s case also suggests all sorts of questions that could put to Fed officials about gold should financial journalism ever report on that market seriously.

Judge Huvelle’s memorandum of decision in GATA’s lawsuit against the Fed can be found here:

http://www.gata.org/files/GATAFOILawsuitRuling-02-03-2011.pdf

The judge’s order can be found here:

http://www.gata.org/files/GATAFOILawsuitOrder-02-03-2011.pdf

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

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


Are Stocks & Commodities About To Start Another Rally?

March 31, 2011 by · Leave a Comment 

By Chris Vermeulen, TheGoldAndOilGuy

Over the past couple months everyone seems to have been preparing for a sharp market correction. Crazy part is that the SP500 dropped about 10% from the high and that is a typical bull market correction. The thing is… the stock market has a way of slowly unfolding making it look and feel minor, then before you know it, the correction is over and it’s back to an uptrend. That is kind of how this one unfolded.

The good news is that we caught the low risk portion of the correction locking in a 4.5% drop, and we are now in a long trade and in the money by 2.5% with very little down side risk at this point. Time will tell if this up trend is sustainable or not…

Now, let’s take a look at the charts…

Dollar 60 minute intraday chart
As you can see below the dollar looks to have started a breakdown today. If there is continued selling pressure in the next couple days then expect to stocks and commodities to move higher as the US Dollar drops. It is important to know that when a bullish pattern fails we typically see a very strong reaction in the opposite direction (down) catching the majority off guard and they rush to the door.

SPY Broad Market ETF – Daily Chart
A couple weeks ago we watched the market go into a free fall creating a washout bottom. From there we saw prices bounce back and retake my key moving averages. This gave us a bullish bias and dips should be looked at as buying opportunities. I will admit that stocks still have a long way to go before the masses are convinced. I feel we need to see the February and March highs get taken out first. Once they get taken out there should be strong buying as short covering (protective stops from traders who are short) causes a surge in buying pressure sending stocks sharply higher yet again.

My trading buddy David Banister at Active Trading Partners is starting to see small cap stocks come back to life. Money is starting to flow into these lucrative areas of the market and he is on top of things… This week’s trade is up 20% in less than 24 hours which is very exciting.

Gold Daily Chart
Gold has been moving up this year but the current price action is not really getting me excited to buy just yet. Recently we have seen strong selling volume and very light buying volume. My bias still favors higher prices but there is still a good chance we get another dip in the coming sessions.

Mid-Week Trading Conclusion:
In short, I feel as though the dollar will trigger the next wave of buying in stocks and commodities for the next week or two… We should see the dollar make a clean moving in either direction shortly and that will help guide my analysis, positions and setups. I hope this analysis helps you to see the market from a different perspective.

If you would like to get my mid-week reports free please join my free newsletter here: http://www.thegoldandoilguy.com/trade-money-emotions.php

Chris Vermeulen

When Gold Becomes Money Again

March 31, 2011 by · 1 Comment 

The Daily Reckoning

On the night our documentary I.O.U.S.A. made its nationwide premiere in August 2008, the film was followed up by a live panel discussion, broadcast via satellite. Our friend David Walker, the former US comptroller general and “star” of the film, took part…along with several other luminaries.

At one point, the question was asked: Might America’s trading partners one day sell off their US Treasury holdings?

Impossible, said Warren Buffett. In fact, he insisted, they couldn’t…because they’d need to convert it into some other currency, which would be little better than the dollar. No one else chimed in to challenge the assertion.

“Buffett’s answer assumes that there is no alternative,” author, friend and local Baltimore resident Bill Baker writes in his 2009 book Endless Money: The Moral Hazards of Socialism, “because for generations, all the world’s currencies have been backed only by the promise that governments would accept them in payment of taxes.

“But that ignores a currency that has been used effectively by man for thousands of years: gold. China and other countries might exchange their US dollars for it now.”

Indeed, China is quietly building its gold reserves. They totaled 600 metric tons in 2004. Then in April 2009 came an announcement they’d grown to 1,054 metric tons. And the buzz from Beijing is that the central bankers want to grow that stash another tenfold.

Meanwhile, China has trimmed its US Treasury holdings for three months in a row. The January total was $1.15 trillion – down 1.75% from October.

These are the first steps toward what Baker sees as the “remonetization” of gold – coming soon to a country near you.

History is a pendulum.

“Once gold and silver had been written into the Constitution,” Baker says, “no one might have thought that it would be replaced by paper within 60 years.” But the pendulum swung, the Union issuing its infamous greenbacks during the Civil War.

Then the pendulum swung back, the greenbacks’ critics were “able to successfully push for an agenda of gold resumption. But before the London Economic Conference of 1933, the world would be shocked by Roosevelt’s rejection of the gold standard.” The pendulum swung again.

Now, “a series of crises such as was the case in Rome might ultimately bring the pendulum back toward gold,” Baker writes.

In other words, we’re approaching the end of the Great Dollar Standard we wrote about in The Demise of the Dollar. The only world anyone below the age of 40 has ever known – in which all the world’s currencies float freely against each other – is nearly over.

And Baker is investing accordingly.

In late 2010, he began accumulating shares of a tiny gold miner called Orezone. “Our cost basis is 78 cents, and now it’s $3.61,” Baker tells us on a wintry afternoon in his office on the outskirts of Baltimore. “I’ve sold off two-thirds of the shares that I own, and it’s still one of our largest positions. I can’t keep it down!”

It’s a good problem to have. And Baker has it because he’s willing to go further afield than your typical money manager…as far afield as Burkina Faso.

We’ll pause here to place it on a map, so you can get your bearings. (If you were a geography geek growing up, you might remember it as Upper Volta.)

“I read these other quarterlies from these hedge fund managers,” Baker tells us, surrounded by family pictures, CDs of composers like Brahms and rafts of company research. “They’ll get really absorbed in the macroeconomic picture, but they don’t really know what they’re doing, so they just buy GLD [the gold ETF].

“Or they’ll hire two all-star Canadian analysts. Then I look at what they own, and they own Gabriel Resources because John Paulson owns it. It’s safe. Or they bought some big South African company because it’s cheap based on reserves in the ground when they ran it through their stock screener.

“They don’t have a coherent philosophy about really kicking the tires and really finding these companies that people don’t know about.”

Baker does. His firm, Gaineswood Investment Management, has taken sizeable positions in tiny gold miners working well off the beaten paths of the Americas, Australia and South Africa.

Burkina Faso is smack in the middle of a geological formation called the Birimian Trend…the richest source of growth for gold miners in recent years.

Even better is how many miners in West Africa have consolidated their holdings. “In Canada, you might have a district filled up with 12 companies. One company might have each block, or half a block. But in West Africa, these guys own all of it. They’ve got a lot of time, a lot of land, and now they’ve raised a lot more money, so they can keep going after it…and we’ll keep getting these upside surprises.

“That’s our philosophy, to find opportunity where, for example, this one outfit has found 1.2 million ounces of gold. But with all the new discoveries they’re making, they’ll probably come out and say we have 2, 2.5, and next year they’ll say, well, we have 3, 3.5, 4… and it isn’t over yet, because of this whole giant region that’s been unexplored.”

Before we go any further, we’d better make something clear: Bill Baker isn’t your typical gold bug. Nor is he your typical stock market bear.

“The timing or eventuality of financial calamity is unable to be forecast,” Baker writes in Endless Money. “At best, it might be like a hurricane warning: The tempest may strike here, it may hit there, it may be downgraded to a tropical storm or it may go elsewhere entirely.”

But that doesn’t mean investors should fail to prepare for financial calamities…or the demise of paper currencies. Financial calamities are becoming increasingly likely in this overly indebted world of ours…and the death of paper currencies is becoming increasingly certain. The best time to prepare is ahead of time.

Regards,

Addison Wiggin
for The Daily Reckoning

When Gold Becomes Money Again originally appeared in the Daily Reckoning. Daily Reckoning founder Bill Bonner recently wrote articles on stagflation and the great correction.

More articles from The Daily Reckoning….

More Fantasy-Jobs From U.S. ‘Recovery’

March 31, 2011 by · Leave a Comment 

By Jeff Nielson, Bullion Bulls Canada

It becomes more and more difficult to discuss U.S. employment “statistics”, since an ever greater percentage of what is presented is simply total fabrication. The U.S. Bureau of Labor Statistics (BLS) might as well abbreviate its name to “Bureau of LieS”, as none of the reports it produces bear any resemblance to the real world.

To this mountain of fiction we can now add the “ADP” monthly-payrolls report. This statistic is supposed to be beyond manipulation, as its data-stream comes directly from the payrolls of U.S. employers. However, look at “the fine print” and we will see that its report represents the data of less than 1/6th of total employment.

When their reporting excludes more than 80% of the U.S. economy, it obviously becomes very easy to “stack the deck”. As an easy example: the U.S. is (still) embroiled in two (and now three?) “wars”. With the biggest war-machine in the history of the world, certainly more than 1/6th of the U.S. economy is devoted to simply servicing that war-machine.

Thus all that ADP Employment Services needed to do to create a “U.S. economic recovery” is to focus its reporting on U.S. companies which derive a substantial part of their revenues from the U.S. military – a very long list. Having established that this data-stream could have easily been skewed to the point of total irrelevance, the question then becomes: is there evidence of such fabrication?

Fortunately, there remain a few niches of data reporting in the U.S. economy which have not yet been completely “sterilized” by the U.S. government’s propaganda-machine. When such data is depicted in the form of long-term charts, those charts paint an irrefutable picture of an economy mired not merely in a “recession”, but one which is clearly experiencing a depression.

Let’s start with the one measurement of the U.S. unemployment rate which is still in the same ballpark as real-world numbers: the “U6” measurement.


First let’s look at the overall level. Current U.S. unemployment is about 16% – nearly double what the U.S. government pretends it to be. Note the tiny improvement from the worst level. The roughly 1% decline in this rate takes it back to where it was when the U.S. government claimed that the U.S. economy had “hit bottom”.

More articles from Bullion Bulls Canada….

Fractional Reserve Banking Gone Amok

March 31, 2011 by · Leave a Comment 

By The Mogambo Guru

From Chartoftheday.com we get the Quote of the Day, which is from the legendary Will Rogers, who cleverly said, “The fellow that can only see a week ahead is always the popular fellow, for he is looking with the crowd. But the one that can see years ahead, he has a telescope but he can’t make anybody believe that he has it.”

In a frantic bid for attention, which I obviously crave, I tell the kids to shut the hell up, explaining that the hospital emergency room is open 24/7 and they just have to stop bleeding all over the damned place for a lousy minute so that I can take this serendipitous opportunity to improve on Will Rogers, which will prove how smart I am, and how some lucky business owner might say, “Wow! Look at this Mogambo character! What a brain! And a stalwart family man, too! I must offer him a position that has a large salary and a benefits package to rival that of the average government employee, even though hiring him would make me look like an idiot!”

To those nonbelievers who say to me, “You never had an original thought in your life,” I thus cleverly add to Mr. Rogers’ witticism, saying that he would have continued by saying, “And so the wise man buys gold and silver as a bulwark against the insanity of a grotesque government-centric system, because owning those metals is how one historically capitalizes on such profound economic idiocy.”

To head off your insults, I quickly continue that it reminds me of when I was an options trader, way, way back, back when we huddled under a tree and traded options on dinosaur futures, and where market insiders and manipulators preyed on my profound idiocy.

In fact, I am sure that I became known as an Infallible Contrary Indicator (ICI), in that if I went long, it went down, and if I went short, it went up.

This nostalgic trip down my path of shame is not the point, however, but is instead about “profound idiocy,” of the kind that I have alluded to in my brilliant addition to Will Roger’s famous quote, which is the idea that a crushing load of a combined, gargantuan $53 trillion in personal, business and government debt can ever, ever be, somehow, “bailed out” by continually going farther into debt to spend another gigantic, humongous load of new money created – literally! – out of thin air by the Federal Reserve.

“And the idiocy is compounded when believing, for even an instant, that in doing so it will not cause a ruinous hyperinflation, like it has all the other thousands and thousands of times in the last 4,500 years every single time any idiot government tried this Same Silly Crap (SSC).

It makes you ask yourself, “How is such a thing possible? How in the hell can $53 trillion of borrowed money exist on the aching back of a mere $1 trillion in actual ‘bills and coins’ cash?”

And then you ask yourself, “How can the derivatives market be estimated to be over $225 trillion?”

Suffice it to say, “Talk about fractional-reserve banking gone amok! Wow!”

And don’t bother bringing up the legend of the Federal Reserve famously claiming ownership of 160 million ounces of gold, which would be worth, at $1,400 an ounce, a lousy $224 billion, which it would be if the Fed still owned it, but surely doesn’t, as all those hundreds and hundreds of tons of leased gold that flooded the market for the last couple of decades had to come from someplace!

Anyway, this is not about gold, or how you ought to be buying gold, or how you ought to be buying silver if you are not buying gold, or how you should be digging a deep hole in which to hide (“Dig your own grave and save!”) if you are buying neither gold nor silver.

No, this is about how I lied to make the famous Will Rogers appear to recommend that you buy silver and gold as a defense against the federal government’s insane deficit-spending fiscal policy and the Federal Reserve’s insane monetary policy, which together guarantee roaring, ruinous inflation in consumer prices, although Mr. Roger’s died long before we even started getting into the scary part about the crushing accrued liabilities, amounting to hundreds and hundreds of trillions of dollars!

Actually, you may be glad to know that what was true for Will Rogers almost a hundred years ago was still true after the 4,400 years before that, and it is still true today: Buy gold and silver when your idiotic, suicidal government is allowing so much money to be created because it guarantees inflation, and inflation guarantees that gold and silver will increase in price!

Whee! This investing stuff is easy!

The Mogambo Guru
for The Daily Reckoning

Fractional Reserve Banking Gone Amok originally appeared in the Daily Reckoning. Daily Reckoning founder Bill Bonner recently wrote articles on stagflation and the great correction.

Randgold Resources weathering Côte d’Ivoire storm, producing to plan – CEO

March 31, 2011 by · Leave a Comment 

London-listed African gold miner Randgold Resources, which is weathering the Côte d’Ivoire storm well, remains on track to produce more than a quarter million gold ounces at its self-discovered Tongon mine in the north of the country, where hopes of a settlement are rising fast.

Randgold on Thursday also reported an overall 5% increase in its mineral resources and reserves, its eighth successive annual increase.

Read more….

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