Source: James West, Midas Letter  05/26/2009
Here we go again. The forces of legitimate money versus the incumbent purveyors of the candy floss economy squared off at the $1,000 an ounce line over which yet another battle will be fought. Arrayed against either side are formidable new elements and tried and true old ones. As usual, the first volley has been catapulted over the walls of the hucksters by the defenders of the essential timeless truth of gold’s naturally stored value against the counterfeit paper currencies.

The liabilities of the enemy have increased, and the short positions in the COMEX market are sufficiently stacked that the big bank defenders simply cannot allow gold to win decisively. G7 governments are allied against gold to a man, while emerging economic behemoths China and Russia stand in opposition.

In particular, China’s revelations that it has been in a continuous accumulation mode for the last several …

Now the government has decided not to buy the junk left behind by the giant US Banking system garage sale, and instead has decided to funnel the cash directly onto the balance sheets of the banks who were peddling them, I am convinced the American and global consumer public has been zapped with some kind of stun gun. As Bob Moriarty asked on 321gold.com recently, “Where’s the outrage?”

Complacency would seem to be the default reaction. Like cattle at the abattoir, we mill about munching straw while one by one our brethren receive a bolt to the head before being parceled into roasts.

I hereby provide notice of an avenue for action. We here at MidasLetter.com are in development on a feature length documentary film called “Crime of the Century”. This film takes a long view of the economic history of the world from the establishment of the US Federal Reserve (conceptually

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Pack a lunch and blow the froth off a cool one…as I’ve got three days of gold and silver market activities to talk about…and lots of fascinating reading as well.

Wednesday, November 26th

This was the last day for all parties to get their gold and silver contracts switched to the 2009 year…or they would have to stand for delivery on Friday. With the U.S. in holiday mode almost from the beginning of trading, the tiny rally at the Comex open was stepped on and never recovered. But it hardly mattered…as volume was virtually non-existent. Silver was the same. Call the day a big zero. However, the shares reacted otherwise. Even though gold was down ten bucks at the close of the equity markets, the HUI still managed a surprising 6% increase…the second day in a row that gold has been flat or down…and the HUI up. Hmmm!

Open interest on Tuesday showed

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 Gold is another one that’s hard to figure out. Supply is dropping in South Africa and Australia, yet overall mine supply rose 8% to 590 metric tonnes in the second quarter of this year. Demand is surging in India, but prices are plunging today (probably due to a combination of the ever-strengthening U.S. dollar and fund selling).

Where do we go from here? Here are some stories that may lend some insight …

GFMS bullish on gold but cites risk that investor demand could drop

The chief executive of precious metals research firm GFMS said on Monday that bullish macroeconomic factors should keep the price of gold at a high level over the next few years, but a potential decline in investor appetite could also pose a huge downside risk.

SPDR Gold Trust holdings dip more than 10 tons  The SPDR Gold Trust GLD, the

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I am always looking for some extra money with which to buy gold, and if I am ever successful without actually getting a job, I intend to buy some right away, as Bob Moriarty has taken a look at the XAU gold equities index compared to gold, and finds that a recent ratio of 0.182 means that today "is the most negative ratio of gold shares to gold in the last five years.Continue reading