Junior Gold Mining Stocks

Something smells fishy in Denmark! The Canadian Mint cannot account for missing gold. Whatsuuuup? Somebody wants that gold and has decided you're not going to get it.

If you can't get your hands on physical Gold then buy Silver coins. Either way, we don't know how badly this is going to all play out. It would be very prudent to cover all the bases in this order: enough food for 6 months, security (in so many ways), a vegetable garden, gold and silver coins in your possession, cash in your possession, gold and silver shares in your possession, and a Passport to get out of Dodge.

If you want to buy Junior Gold Mines then only by shares of companies with very good prospects and lots of cash. You'll have to do your own due diligence, but keep in mind, funding for junior gold mines is minimal, if any.

Metals & Mining Analysts' Ratings & Estimates as of June 15, 2009.

Typically the 3rd and 5th waves of a gold advance is when Junior Gold Mining shares make their big advance.

Two great junior gold plays are Yamana Gold (YRI.TO) and Northern Dynasty (NDM.TO). Northern Dynasty is managed by the Hunter Dickenson Group. Yamana, especially, is heavily traded. These 2 have great stories, prospects and loads of potential. Other great plays are Seabridge SEA.TO. It has a lot of gold in the ground. Centamin Egypt (CEE.TO) has great upside potential. Jay Taylor likes Sangold SGR.TO and Maudore Minerals. MAO.V.

In the blow off stage it's best to have sold your gold shares and just be in possession of the physical Gold, as Gold will continue to go up while the shares will telecast that the high is approaching. But we're no where near a blow-off; the fireworks are just starting.

If you don't like trading in gold stocks, consider purchasing a Gold Mutual Fund or buy physical Gold. I am no longer recommending a Gold ETF because it is counter-intuitive - Comex Gold cupboards must now be stripped clean! Explanation of this statement are below.

There is talk that juniors are out of favor because it is felt with the liquidity/credit crisis they might have problems raising cash for future exploration expenses, scoping studies, etc. or to bring their mines into production. Once again this might be opening the door for the majors to scoop these juniors up on the cheap. We'll see. Might be worth looking at some prospect generators.

Today an officer from Major Drilling was interviewed and he mentionned that natural resource demand is outstriping supply and supply is falling, plus it takes years to bring a mine on stream, plus there are not enough drills to go around.

Here's an excerpt from Bob Chapman and I believe it's worth heading: "Physical gold and silver everywhere through private dealers are totally gone or very scarce, yet prices are going down. Why? Because you left the COMEX cupboard full, and as long as they have that gold and silver to work with they can continue to paper you to death. Get a freaking clue, people! Pay cash for the COMEX gold and silver. You have the money. Use it, or they will continue to hand you your derriere on a platter. Gees Louise. And stop funding the ETF's. Their holdings are being leased against you. Use the money you have invested in the ETF's to bankrupt the COMEX gold and silver hoards and stop playing into their hands. You people have massive redemptions coming up if you don't produce soon, so time is of the essence. You are going belly up if you continue to roll over and play dead for these reprobates like some sort of pet dog. Move it!!!" Get Physical.

John Embry on Junior Golds (last few minutes of interview)

Gold is now launching an assault for the third time and should slice through $1,000 this time. This is the 3rd wave and not a good time to be trading out of Gold and Gold Stocks. Wave 2 probably ended in October 2008, as I discussed in the Gold Lease chart below, wherein a significant bottom similar to the double bottom in 1999 and 2001 occurred. Gold Juniors also look good here.

Of significance is the imminent demise of the $usd as the World Reserve Currency occurring now and this will be more evident before the end of the year. Did I say the Emperor has no clothes, and will they finally audit Fort Knox? Who will be the next Emperor = China, like it, or not!

Here is a list of Gold Mining ETF funds in Canada, the first, XGD iShares CDN Gold Sector Index Fund, contains Junior Gold Mining Stocks within its Gold ETF. As far as I can ascertain, there is no ETF which holds only Junior Gold Mining Stocks.

iShares CDN Gold Sector Index Fund (XGD) XGD.TO which is based on S&P/TSX Capped Gold Bloomberg Symbol - SPTSGD Reuters Symbol- .SPTTGD. There are many junior gold mines in this Gold ETF - iShares CDN Gold Sector Index Fund XGD.TO.

AQI.TO AQUILINE RESOURCES
GBG.TO GREAT BASIN GOLD
GBU.TO GABRIEL RESOURCES
GRZ.TO GOLD RESERVE INC CLASS'A'
GSC.TO GOLDEN STAR RES
HRG.TO HIGH RIVER GOLD MINES LTD
IRC.TO INTL ROYALTY CORP
KRY.TO CRYSTALLEX INTL
NG.TO NOVAGOLD RESOURCES
NGX.TO NORTHGATE MINERALS
SMF.TO SEMAFO INC
SVM.TO SILVERCORP METALS INC

and here is the list of junior gold stocks in this fund with their current stock prices.

There are also 2 other bull gold ETFs in Canada, however I was not able to mine their stock components, and they are:

Horizons BetaPro COMEX Gold Bullion Bull Plus ETF (HBU) HBU.TO

Horizons BetaPro S&P/TSX Global Gold Bull Plus ETF (HGU) HGU.TO

Wizard of Ob is no Wizard of Oz ...he's just the man behind the curtain!

Gold Launch Pad

Correction to the $880 area which is lower trend channel.

A red flag event has happened with regard to the Chinese counterfeiting of gold coins (lighter gold weighting), primarily U.S. gold coins. Now counterfeiting a paper currency is much easier than counterfeiting gold coins. Is this potentially another "establishment" attack on gold, or might it simply be disinformation? At any rate be wary that the powers that be might have gold in their cross hairs. They're going to try to shake all the loose gold coins out of the hands of weak holders. Wait for this gold correction to end before entering the market. If you're holding gold coins, then it would be pointless to sell them, as you might not be able to get your hands on gold coins easily again.

Geroge Ure at Urban Survival postulated "Ask yourself what would happen if a large financial entity - and it could be a private mint, an ETF, or something like that - was discovered in the next, oh, two or three weeks - to be holding a lot of counterfeit gold that was apparently made in China?"

Gold punched through $880 and support at $680 looks firm now. Next target is $920-$925. If we slice through $925 then watch her blow! Take delivery of gold contracts and help pull down the Comex warehouse stocks further. If you're American move your Gold out of the U.S. If an American buys gold coins through eBay, these would be untraceable. Frankly if the Government came after people for their coins they could just say they already gave them away as gifts, etc. ~ you get the idea.

Gold punched through $925 and is, today Feb. 17th, at $970 area. Our next target comes in around $990 - $1010. I expect either consolidation or a pullback to $925 area.

It is predicted that the U.S. economy will collapse end of February, early March 2009 and the $usd will collapse by the Summer of '09.... more ..... CODE RED - Economy in Collapse. "Celente advises to closely read the signals that have been clearly telegraphed by Mr. Geithner. "From proclaiming a bank holiday, confiscating gold to backstop devaluing currencies, mega-bailouts for the too-big-to-fails ... to nationalizing public firms and dollar devaluation ... whichever of these or other actions are taken, the financial burden will fall on the American people," Celente forecasts."

Big Inflation Coming

Gold does exceptionally well in a deflationary or an inflationary environment.

Code Red for econ is Code Green for Gold ...

BMO Capital Markets 2009 Global Metals & Mining Conference

Jim Willie has a paid subscription newsletter, but every once and a while he does publish a public article, and I feel he has a good grasp on the geo-political and geo-economic situation. Jim discusses the future of the U.S. reserve currency status.

There is a forced-liquidation event underway that is massive ... originated out of Asia ...All of the primary currency crosses got hit at once ...trillion-dollar enterprise - this is not some small company that went bankrupt, or even a large company ... is not "automatic selling"; this is forced liquidation. ~ February 16, 2009 ...

Forex failure continues in Poland.

Gold in Various Currencies as of January 22, 2009.

When priced in gold, the all time Dow high in 1999 to today is down 81%!

McEwen, Goldcorp Founder, Bets Crisis Will Drive Gold to $5,000.

GLD ETF (exchange traded fund) is a derivative.

A 30-year cup and handle presents the potential for explosive energy.

"Hello, this is Helicopter Ben.

Man the printing presses, and hit warp speed, NOW, or else we're FREAKING DOOMED! Roger, over and out."

It is recommended that all hot shot purveyors of derivatives quickly move to non-extraditing countries and instantly transfer your ill-gotten funds out of the U.S., else the angry soon-to-be mobs descend upon your evilness.

There will be many books written, decades after 2008, about this financial crisis that marked the epitome of greed on a massive scale. Please note any deflationary forces will be and are manifested in the loss in value of paper assets, coupled with inflationary forces in hard assets.

First time the bailout is rejected the markets get crushed, second time, same thing.

Gold coins are not immediately available - you will have to wait, however you can buy larger bullion. The Fed bails out practically every elitist investment bank in the U.S. with breakneck speed at the expense of the American taxpayers! I believe the only broker investment bank left in North American is now Canaccord Capital in Canada. By failing to save Lehman Brothers, the Money Markets seized up.

This is truly 'Shock and Awe' action by Bernanke. A lot can be accomplished, good and bad, when Congress and the people are shocked. The Awe will be more like a gasp next time you assess your financial statements.

Michael Moore has plenty to say about this $700 billion bail out The Rich Are Staging A Coup. Congratulations to those who put pressure on their reps in Congress and put a stop to lining the pockets of the fat cats for this bail out that supposedly would trickle down to the little guy - yah right!

By disallowing, temporarily, shorting of bank stocks ensures a slow steady bleed down of the stock price - Does the Fed perceive these 'blackpool' exchanges as 'in waiting' for the opportunity to short U.S. bank stocks or is there collusion? Further, George Soros, the UK's henchman, is another dog salivating at the prospect of shorting the U.S. stocks and currency. He and his consortium were probably shorting at the beginning, long before the ban on shorting financial stocks.

One would have to question with the collapse of some of the UK banks, if Soros has become a turncoat against the empire also. A man with no morals whatsoever, surely has no true allegiance.

Auto Loan deliquencies in the U.S. are up 11.5% over the past 60 days.

Sept. 23 (Bloomberg) -- Jean-Marie Eveillard says he has stashed $1 billion in gold in a vault near Times Square as insurance against ``extreme outcomes,'' like a market collapse or unintended consequences of the U.S. plan to avert one.

"Eveillard keeps as much as 8 percent of his $22 billion First Eagle Global Fund in bullion or gold-mining stocks. He occasionally visits the vault in a building about 12 blocks from his Midtown Manhattan office, he said."

"Commercial paper, without getting all bogged down in details, basically if you are a business, a big business, a small business, you need to take loans out. If you are a farmer, you know you have to take a loan out to be able to buy the seeds, buy the fertilizer, everything else so you can put the fertilizer and the seeds in the ground. Then you are going to need to take a loan out to get it, to harvest it, to get it to market and then you pay that loan back. It's the way that this runs. Small business, farms, General Motors, they run on commercial paper, which is just short term loans. It happens all the time. You go, you know your banker, "Okay, I need a short term loan, got it, got it," boom, boom, boom, and it's done. That's the way business is run. On Wednesday there was no commercial paper available, none. America had zero loans for business by Wednesday afternoon, none. When that happened they realized, the market started to realize that, wait a minute, if there's no commercial paper, if there's no loans going to business, businesses are going to start falling out of the sky by Friday, just gigantic companies will just close because they won't be able to afford the operations. There is no loan for any company of any size in America." Glenn Beck

Think the currency crisis is just limited to the U.S. ... well think again. The Bank of East Asia has denied rumours that it is in financial trouble, after thousands of customers queued to withdraw their savings.

This is the end of the American Empire as you know it. If you feel like the proverbial Deer in the Headlights, give yourself a hard slap in the face and 'Snap Out of It', and get your house in order now!

Will the financial crisis hurt refinancing for Junior Gold Mines - yes, it's quite possible. At this juncture it would be prudent to possess in your hand Gold and Silver Coinage.

The Pundits have argued long and hard - will we have deflation or inflation - so much so that it's very easy to be very confused as to what to do now!

Deflation or Inflation

Deflation occurs in a society where the nation is a creditor nation.

Inflation occurs in a nation that is a debtor nation. The United States is a Debtor Nation - Wile E. Coyote Nation - at the precipice.

Nice spike up in Gold this morning. The physical market for gold continues to tighten up.

Gold is now moving into backwardation. This last occurred after the Washington Agreement was announced in 1999 and there was a mad dash for physical gold by shorts. Gold very rarely goes into backwardation.

Backwardation of Gold only occurs when either the market fears a collapse in the currency, or, the market is worried about counterparties making good on their promise to deliver gold.

Dollar Endgame!

The Black Hole of which the U.S. financial crisis implodes into is getting worse.

The Fed "Bubble Factory" decided to go into Quantitative Easing to combat spiraling deflation.

i.e. Bernanke calls the Bureau of Engraving and Printing and says "Hello, this is Helicopter Ben. It's time, man the presses, and hit warp speed now, or else we're freaking doomed!. Roger over and out."

Quantitative easing brings interest rates close to near zero and floods the markets with manufactured liquidity to ease pressure on banks by giving them extra capital.

The Fed can create infinite amounts of toilet paper, er paper money. It's like transforming lead into gold, at no cost. Gold would not be worth much.

Is there any more gold held in Fort Knox? or, "The Emperor has no Clothes"? .... no audit since the 1950's! - he's as buck naked as a coked-up porn star.

The Derivatives Fiasco has created the stock market crisis 2008. The derivatives house of cards is all about where a dollar of capital is turned into 49 funnymoney dollars of additional debt to finance an investment of 50". Because derivative transactions were not monitored properly, there is no way to assess their toxic results as they implode on the stock markets of the world. This is truly mind boggling. No one knows who or what will be taken down next.

You might ask "why are gold mining stocks dropping?". Hedge Funds faced with huge redemptions, and, to compound the matter, receiving margin calls, were forced to sell, driving down stock prices across the board including gold mining stocks. Added to the mix was the largest mutual fund redemption this week. Throw in Sovereign Wealth Funds to the mix and a black hole occurred in stock markets around the world.

While one hedge fund manager appeared on TV and admittedly made a 40% profit in Bonds, he was practically in tears over the fiasco we are witnessing in the hedge funds.

The creation of Blackpool Exchanges such as 'Turquoise' in 2007, which went live on Sept 17, 2008, are dark and opaque and certainly sent chills up my spine. "Project Turquoise, the share trading system backed by a group of the world's largest investment banks, will allow transactions both on-exchange as well as in "dark liquidity" pools, where firms offer to buy and sell large blocks of shares away from public sight. Turquoise is to be a hybrid that will incorporate a public order book and a non-public order book," Mr Hylander told the conference. "Turquoise will be an agregator of 'dark pools'." "the pan-European equity trading platform backed by nine of Europe's leading investment banks, has gone live with its deployment of the Progress(R) Apama(R) CEP platform as part of its real-time and post-trade market surveillance system." Were these exchanges used to set up short trades prior to the crash of 2008? These exchanges must be made transparent, or eliminated.

It is regrettable that most Anglo Saxons have demonstrated a lack of moral standards and now the most unimaginable economic crisis has been laid at their feet. No one thought to demand that the monopoly money derivatives be unwound, so long as everyone was making lots of money. Asking the viper and ex-CEO of (Goldman Sachs, sellers of black money derivatives) to head up management of the Solvency Crisis of 2008, is like asking Hannibal Lecter to drop by for dinner! Goldman Sachs sold Subprime Bonds Short in 2007 and Escaped the Subprime Collapse. Q3 report of Sept. 20th: "Net revenues in [trading] mortgages were...significantly higher, despite continued deterioration in the market environment. Significant losses on non-prime loans and securities were more than offset by gains on short mortgage positions."

So far the Monetary Alchemists and the Fox guarding the Hen House, Hanky Panky Paulson, have been doing a bang-up job - Not.

Hey, anyone can make a mistake and destroy the World!

Spike in Gold Lease rates. Spikes of this magnitude occurred in 1999 through 2001 at the bottom of the Gold bear market. However, smaller Gold Lease spikes throughout the Gold Bull have marked times when Central Banks have raised the lease rate so that they can access the Gold and dump it on the market to push the price down. It appears that in this instance, this is what happened, in order to give the appearance of a stronger $usd, so while the markets crashed, Coyote Nation could escape into the Trasheries instead of Gold. So we can expect a potential bounce next week in the general markets. Irrespective of the immediate result, the Gold Lease spike is of extreme interest and should now be watched carefully.

The false appearance of the relative strength of the $usd, was also due to hot money returning home from collapsing emerging markets and entities and people seeking refuge in the Treasuries. The $usd has hit resistance and should lose stem in the next few weeks.

Many will discuss comparisons to past stock crashes. The author believes that one should look to historical economic crashes that correlate to the nadir of empires, so that would indicate when England lost the London Gold Pool and the Gold moved to the U.S. Who holds the Gold now? - China, Russia, Japan, India - the East. Most people keep referring to the crash of '87 or '29, whereas I believe the results from the crash of '08 will be neither - think Weimer Republic!

For those who still possess some expendable cash, I recommend you purchase and keep in your possession gold and silver coins and bullion and cash.

But the magnitude of this crisis now will be exponential due to the Derivatives funny money created outside the Federal Reserve that stood prior to the world stock market crashes in the month of October, 2008 at 16 times the World's entire GDP. "This is a credit house of cards where a dollar of capital is turned into 49 dollars of additional debt to finance an investment of 50". Because derivative transactions were not monitored properly, there is no way to assess their toxic results as they implode on the stock markets of the world. This is truly mind boggling. No one knows who or what will be taken down next.

The European Union is in disarray and potentially is in worse shape than the U.S. because they were sold a huge amount of toxic derivatives and their bank reserve system is more expansive than the U.S. Whether in retaliation or a telltale display of lack of gunpowder, the European Union did not come to the aid of Iceland, despite requests, as Iceland went bankrupt. The only one to step up to the plate was Russia. I imagine Iceland to be a very strategic ally, militarily-wise that is. ... another case of the strong repositioning themselves.

Canada appears to be the only solvent one of the Anglo Saxon countries, if we believe what the bankers are saying. This is little solace as Canada has sold all of their Gold and is too little to be of any significance or help.

I will repeat throughout this blog that - no debtor nation has ever experienced a deflationary depression - this only happens to creditor nations. The U.S. is a debtor nation and therefore will experience an inflationary depression and due to the sheer magnitude of the black money created from derivatives, it will turn out to be a hyper-inflationary depression. But first, we will have deflation.

Jim Rogers calls it like it is. You can either stick your head in the sand, or sit up and take notice.

"During a 40-minute interview during a wealth-management conference in this West Coast Canadian city last month, Rogers also said that:

* U.S. Federal Reserve Chairman Ben S. Bernanke should "resign" for the bailout deals he's handed out as he's tried to battle this credit crisis.
* That the U.S. national debt - the roughly $5 trillion held by the public- essentially doubled in the course of a single weekend because of the Fed-led credit crisis bailout deals.
* That U.S. consumers and investors can expect much-higher interest rates - noting that if the Fed doesn't raise borrowing costs, market forces will make that happen.
* And that the average American has no idea just how bad this financial crisis is going to get.

"The next shock is going to be bigger and bigger, still," Rogers said. "The shocks keep getting bigger because we keep propping things up [and] bailing everyone out."

Rogers first made a name for himself with The Quantum Fund, a hedge fund that's often described as the first real global investment fund, which he and partner George Soros founded in 1970. Over the next decade, Quantum gained 4,200%, while the Standard & Poor's 500 Index climbed about 50%.

It was after Rogers "retired" in 1980 that the investing masses got to see him in action. Rogers traveled the world (several times), and penned such bestsellers as "Investment Biker" and the recently released " A Bull in China ." And he made some historic market calls: Rogers predicted China's meteoric growth a good decade before it became apparent and he subsequently foretold of the powerful updraft in global commodities prices that's fueled a year-long bull market in the agriculture, energy and mining sectors.

Rogers' candor has made him a popular figure with individual investors, meaning his pronouncements are always closely watched." The Market Oracle

"This incident is not the last one," financier George Soros said of the deterioration in sentiment surrounding Fannie and Freddie. He described the current turmoil as the "most serious financial crisis of our lifetime."

"There was a story out yesterday that George Soros had shorted oil and bought Gold," notes Mitsui, the precious metals dealer in London, pointing to a story at Forbes.

"You must not allow these reprobates and sociopaths to steer our country in this direction. Fannie and Freddie, like the Wall Street bankster fraudsters, must be allowed to fail, and their various shareholders and bondholders must suffer the consequences. Otherwise, we have only been pretending to have markets that are run on capitalist principles. What Paulson and Bernanke are proposing is the next step toward an evil, corporatist, fascist system of government which consists primarily of governmental partnerships with elitist transnational conglomerates where moral hazard is the market mantra, a system which would have made Hitler and Mussolini green with envy. " The International Forecaster

"The scariest thing about it is that things seem to be getting worse rather than better. Estimates that more than 300 U.S. banks could close their doors in the next three years, double what he had estimated back in February. Only a handful have failed so far."

The Federal Deposit Insurance Corporation (FDIC), has a secret list of about 90 banks that could run into trouble. Developments surrounding Fannie and Freddie suggest that list could get longer.

"The only sane tactic an American tied up in U.S. dollar denominated assets can consider in light of this is the immediate liquidation of all such assets and the purchase of gold and silver to replace cash positions, and investments in commodities producers and explorers to replace investments.

The strengthening indicators suggesting a fresh assault on all time highs for gold are manifest, and the crescendo from the blogoshpere is intensifying.

In Bernanke's testimony previously mentioned, he alludes to special facilities, financings and easier terms for large corporate lenders repeatedly as evidence that the Fed has the problems in hand. Extending additional credit not only further destabilizes the U.S. dollar, but it will start to undermine the currencies of other nations with large U.S. dollar investments. The Fed has even instituted a program to facilitate the borrowing of U.S. dollars in Switzerland.

Investors will increasingly turn to gold, and there's a tipping point in there somewhere the price will start to gap up in thirty to sixty dollar spreads. The gold market has always been small, but if there's nowhere else to go but into gold and silver, the upward pressure that results with the entry of previously non participating institutional and sovereign investment entities on the largest scale will be stupendous.

Make no mistake is trying to weather the upcoming storm holding cash you'll find yourself with ashes slipping through your fingers. Bullion, ETF's, or mining companies, so run to gold. Run like the wind." RUN to Gold - James West

James Howard Kunstler -

"Is there anyone in the known universe who thinks that the US financial system is not fifty feet beyond the edge of the mesa of credibility?"

"Meanwhile, the foreign holders of those decrepitating dollars might not rush to the redemption window, but they certainly would use them to buy up every oil futures contract on God's not-so-green Earth as fast as possible -- they'd be dumb not to ..."

"This process is really out of control now. The bottom line is the comprehensive bankruptcy of the United States...."

"In the background of these energy conundrums is the sickening spectacle of the nation's fatal insolvency, which remains partially disguised by the machinations of the Federal Reserve, using the various new loan "windows" to maintain the illusion that the major banks have not swindled themselves out of existence -- and in doing so, caused at least $3 trillion (so far) in capital to vanish in a black hole. This three-card-monte game has gone on for a whole year now, and the consequences are hitting home. No more money can be lent into existence now."

James Howard Kunstler

"The notional value of all outstanding derivatives now totals approximately $1.144 QUADRILLION.

This appears to be Bank of International Settlement Spin to announce the largest gain in derivatives outstanding since they started to report. As of the last report it appeared that both listed and OTC derivatives was under $600 trillion. Now listed credit derivatives alone stood at $548 Trillion. The OTC derivatives are shown as $596 billion notional value, as of December 2007. One can only imagine what number they are at now.

Well we hit a QUADRILLION. We have more than $1000 trillion dollars in all derivatives outstanding. That is simply NUTS because notional value becomes real value when either counterparty to the OTC derivative goes bankrupt. $548 trillion plus $596 trillion means $1.144 quadrillion.

It would be an interesting piece of research to see what the breakdown is of listed derivatives according to exchange to see if it adds up to the reported number. Spin is now everywhere.

This means that no OTC derivative house can be allowed to go broke. This means that whatever funds are required to rescue failing international investment banks, banks and financial entities will be provided.

Keep this economic law in mind. Monetary inflation proceeds price inflation and is its primary cause in economic history from Rome to present.

Nothing can stop the juggernaut of price inflation heading towards every nation like a runaway freight train down a mountain." Source

With world banks freezing up due to the U.S. sub-prime mortgage debacle, it appears that the financial system would have collapsed without the interventions from the Fed, ECB et al. Comments of leading central bankers support this assumption. So in 2008 it's "inflate or die".

The U.S. Fed, ECB and Bank of Japan are injecting inordinate amounts of liquidity into the system. They're not going to defend the USD. They're going to try to save the world financial system. This means World Bankers are inflating and this is very pro-gold. A deflation such that occurred in Japan, only occurs when the nation is a creditor nation, the U.S. is the largest debtor nation and will have no recourse but to inflate.

They know they can't save the dollar by jacking up interest rates because they've had to drop rates to free up liquidity caused by the sub-prime mortgage liquidity crisis; which is cascading into car loans, credit card loans and so on.

Perhaps their trump card, you know the one to keep the $usd as the World Reserve Currency, is winning the wars in Iraq, Iran and any other country that has the nerve to open an Oil Bourse and request to be paid in anything but $usd. Oh, and you thought Iraq was invaded because America wanted to liberate Iraqi citizens? or punish Saddam for supporting Bin Laden? Iran is opening its Oil Bourse this month, February, 2008, so I expect they will be attacked in short order.

Iran's internet was cut off for several weeks and is now operational below 50%.

With ominous news headlines, people are starting to worry that we might experience another Great Depression with excruciating deflation. Prior to the Great Depression the U.S. was a Creditor Nation and its currency was backed by Gold. Today the U.S. is a major Debtor Nation, its currency is no longer backed by Gold, since Nixon took it off the Gold Standard in the 70s. It will inflate.

A Hyperinflationary Stagflation is more likely. Obtaining Credit will be next to impossible as many homeowners are finding out.

Nobody runs faster than a scared Bankster.

By examining historical Put / Call open-interest data on the Philadelphia Exchange's XAU index - we can clearly see a pre-emptive build in Put [short] open interest on the XAU Index Futures that is counter-intuitive to the upward price movement in the underlying precious metals prices.

The bloating of the open interest in the XAU Puts [ a precious metals derivative ] was DIRECTLY RESPONSIBLE for the collapse in the XAU. These derivative induced sales of equities had NOTHING TO DO with raising cash to meet other commitments as widely reported. This was a show of overwhelming brute force by placing 'levered bets' [I prefer the term fore-knowledge] to bring precious metals equity values DOWN prior to predictable dollar-negative news / events [like Iran telling Japan that they would only accept Yen for Crude oil shipments].

Someone clearly did not want investor sentiment aroused by soaring precious metals prices. Here is the chronology:

ref: XAU Gold Stocks Index Brought Down Through Derivatives Market Manipulation


So what explains the Junior Mining Stocks' depressed share prices, comparable in some cases to year 2000 prices just before the gold bull market commenced? If you look at the market when gold reached $850 in 1980 these juniors had soared. Some people are saying some juniors won't move until Gold surpasses $1000 an ounce. Maybe something else is at work.

But, there's more ... Large Cap Gold Companies, who in the past said they were looking to acquire juniors with multi-million ounce discoveries, are now looking for juniors with smaller discoveries. There's not too many multi-million ounce discoveries and they've already been acquired.

Let's say the Large Cap sends out some of their people to scout out potential junior gold mine acquisitions. If they like what they see, could it be ridiculous to speculate that they might:

If Junior is still in an uptrend,

a) buy millions of shares of junior til price reaches exhaustion by selling into the top, and on the way down
b) start shorting junior all the way down to, in some cases year 2000 share price levels
c) buy millions of junior's shares at bargain basement prices
d) chart technicians establish buy stops for next surge
e) major announces acquisition of junior at a depressed price, of course
f) junior's share price surges to reflect true value of junior and major's buy stops are hit at different levels all the way up (within days), which supports price advance further
g) major takes profits near top.

If Junior is already in a bear trend then short it heavily to depressed levels and then move to step c).

Recap: Major manipulated Junior's share price, made millions trading stock, bought Junior at a fraction of its true value and essentially bought Junior for nothing. i.e. Stock Profits $30 million, bought Junior for $15 million = junior for free - Major's profits $15 million.

Conflict of Interest - yes. But its always nice to have friends to help you out.

So many people watch this report to try to determine the direction of gold. They say the Commercial Traders are savy (and you should follow what they do) and know which side to bet on. All the years I have looked at the report, I have never seen the Commercial Traders long on Gold. This argument has kept Prechter & the rest of the $200/ gold crowd bearish for many years now.

Gold has gone up 300% in 7 years. The truth of the matter is "Commercial Traders short Gold in order to suppress the gold price and not to make profits". Period.

I like to refer to them as the "quasi gold suppression team". They're just another Fed team trying to maintain the $usd as the World's reserve currency to the bitter end ~ which is close at hand.

Update - Nov. 10, 2008: The big news this week is that the largest of the largest traders for gold futures, the commercial traders on the COMEX, are now the least net short gold they have been in years.

Buy physical Gold and keep it at home, not in a safe deposit box at the Bank!

Food prices are going to skyrocket - consider buying a stand alone freezer and stock up. Don't forget canned goods too.

Don't keep all your money in the bank - have a stash at home - just in case. Make sure your passports are updated, so you can get out of Dodge, and you are in possession of at least a few ounces of gold. Gerald Celente is out saying we're coming to a time (probably later this year) when credit cards and debit cards are going to stop working.

Pay down your credit card debts in a reasonable fashion. In a few years the interest rates will be staggering.

If you contemplating leaving your country then visit Living Overseas ~ International Real Estate ~ Asset Protection ~ Overseas Jobs ~ Overseas Retirement and the 2008 Quality of Life Index for all Countries of the World.

And just remember, "Nobody runs faster than a scared Bankster."