$TNX/!PRII Weekly

I believe what we're seeing in the markets is a tug-of-war between the expectations of the banking sector and central banks unwillingnes to lay their cards on the table with a forthright declaration of a liquidity trap. 

Wall St. banks are firmly in favour of hyperinflation, if only to be provided with an exit for debt burdens that can be written off with the stroke of a pen, and only dimly percieve this as the outcome.  Or, despite the euphoria in the markets remain silent, never to discuss the 'H' word.

Central Banks carry the burden of avoiding a bond market downgrade, thus will back this market to the extent necessary, without informing the public that taxpayer dollars directly subsidize the affluent bankers, who are not in the least bit concerned what public debacle arises as a result of money printing, since the system is grinding towards hyperinflation at a glacial pace.

The only way out for the central banks is a generation of interest rates below inflation before extraordinary debt burdens are eased,  and if interest rates are falling, to maintain intetrest rates below inflation.

For now, deflation can be exported while the dollar remains viable.  Deflation means currency devaluation mostly, where at one time it meant bond market defaults.  It's also a bet on the absolute inviolate supremacy of your own currency.

But there is a turn in the fundamentals in the TNX/PRII, a sure leading indicator for gold prices.  What has been an 'iron collar' on bullion bank whims in the past has completely washed out in the trough, but another weekly close with a turn in the mix, and you can expect gold orices to follow.

http://schrts.co/bTtSjF

via Sask Gazette - 19 February, 2010

In looking for the final piece of the puzzle as to how an in-substantive debt defeasance, amalgamation squeeze out and payment-in-kind asset transfer held off the books tesulting in a pro-forma insolvency and going-private transaction, I stumbled across my own error.  

I assumed Sprott would have to make some kind of public disclosure in their financials, and that would solve the problem for me.  

Sprott must have set up a private company in order that gold could be delivered to the mint without reporting it, and that the ETFs at the mint need not disclose their source.

In the Sask Gazette for the 19 Feb., 2010 Sprott set up the following company in Saskatchewan:

"Sprott 2010 Flow-Through   Limited Partnership," as it were, to "invest in resource issuers."

They are the angel investor to Golden Band, a resource issuer.  But this is how they can accomplish an asset transfer, a capitalization process.

http://www.qp.gov.sk.ca/documents/gazette/part1/2010/G1201007.pdf

-F6