The steady rise in platinum group metals prices continues following supply disruptions in South Africa which accounts for around 80 percent of new mine production.

SINGAPORE (Reuters) -

Platinum hit another record high on Monday on lingering supply concerns in South Africa, which produces four-fifths of the world's supply of the metal, while gold firmed near an historic high.

Platinum has gained nearly 25 percent so far this year after power shortages disrupted mining in South Africa, triggering worries about a bigger market deficit for 2008. The metal is used in jewellery and auto catalysts to clean exhaust fumes…

-END-

And we also know how desperate the cowardly, deceitful Gold Cartel really is … REAL desperate … the big gold news over the weekend:

The company, which has units that originate, insure and invest in subprime loans, has declined about 30 percent in the past year. AIG said in December that the value of the ``super senior credit derivatives' declined by about $1.1 billion in the first two months of the fourth quarter.

``AIG is still accumulating market data in order to update its valuation' of the portfolio, it said in today's filing.

-END-

From Sabre:

Hands off financial markets: White House

Government would only get in way of market's self-correction: new report

This is simply laughable. These banks obviously run the world and the only thing saving them is the fact that elected officials have no idea what an OTC derivative is at the moment. They also will not have anyone in any regulatory oversight that will understand them either, for if they did they would be making a hell of a lot more money selling them than regulating them.

From Doug Noland's Credit Bubble Bulletin:

February 8 – The Wall Street Journal (Nicole Gelinas): "Fitch Ratings, while telling investors last Friday to expect additional 'widespread and significant downgrades' on $139 billion worth of subprime loans, has cited a new factor in their ‘worsening performance.’ ‘The apparent willingness of borrowers to ‘walk away’ from mortgage debt,’ the analysts noted, ‘has contributed to extraordinary high levels of early default’ on loans issued during the 18 months before the mortgage bubble burst. It expects losses to reach 21% of initial loan balances for subprime mortgages issued in 2006 and 26% for those issued in early 2007. Such behavior, where not precipitated by willful fraud, shows that American homebuyers supposedly duped by their lenders aren't so dumb. They’re perfectly capable of acting rationally without political interference."

-END-

This is not good and vintage Bush:

Bush 'kills' Freedom of Information Act compliance officer

http://rawstory.com/news/2008/Bush_effectiveless
_kills_Freedom_of_Information_0206.html

-END-

From Jesse:

http://jessescrossroadscafe.blogspot.com/2008/02/us-dollar-long-term-chart.html

-END-

What an extraordinary time for the commodities markets…

Venezuela's Chavez Threatens `Economic War' Over Exxon Freeze

Feb. 11 (Bloomberg) -- Venezuelan President Hugo Chavez threatened to halt oil shipments to the U.S. and fight an ``economic war' in retaliation for Exxon Mobil Corp.'s bid to freeze the country's oil assets overseas.

Exxon last week said it won court orders blocking Petroleos de Venezuela SA from selling assets as part of a legal battle over the seizure of operations. Chavez held U.S. President George W. Bush partly responsible for the freeze and worsening relations between the two countries…

-END-

A horror show…

Rand Sinks to Worst Performer as South African Power Grid Fails

Feb. 11 (Bloomberg) -- Gold is above $900 an ounce and platinum has never been higher, yet traders are selling the South African rand faster than any other major currency because President Thabo Mbeki can't keep the lights on.

-END-

The TOCOM was closed.

Abu Dhabi gold sales recovering

-END-

Bill,
AT $900 gold, the commercial short position is equal to 32B on the NYMEX. I think it is time for the nay sayers to throw in the towel on manipulation. Who knows how many they are short in London. The fact is that there is no way that this can possibly be someone hedging.
Sabre

Prechter and the gold bears...

Bill:
I bet if gold is at new highs he will pretend that he has not changed his stripes and never called for a $100 drop. I think that the top callers have been sucked in by what appeared to be an ugly top on oil. But the move on Friday in ALL of the commodities is significant if we go up on Monday. If gold is up, we could have new highs by Tuesday. If the three SA companies Harmony, Goldfields and Anglo-American were taken out of the XAU and HUI, the charts would look entirely different.

Just in: Prechter is taking a shot at the Precious Metals in a recession again. Soon, he will be like John the Baptist, a voice crying in the wilderness. That makes at least 4 calling for a correction here. Chuck

Precious Metals: Are They Safe Places for Your Capital?
2/8/2008 4:41:07 PM

-END-

This Prechter is a whacko. He has, for the most part, been bearish on gold for $650 of the move up. Not just missed it … been bearish. He has zero credibility. Why anyone would pay attention to him anymore is beyond me.

Speaking of little credibility … GFMS …

Resource Investor - Gold Bull May Have Just Two to Three Years Left to Run

***

Bill,
I hope the cabal shorts in gold and silver got a good look at KCBT and CBOT wheat futures today. This is their future; a prison with no escape. It is a fate the cartel surely faces in the metals. Anybody wanting to short ANY commodity should take a hard look at those wheat charts.

We may be nearing not only peak oil, we could be close to peak commodities in general. The whole commodity complex is exploding as production costs for everything go through the roof. What for the U.S. used to be a one way street of imported low cost commodities has now reversed with a vengeance. Worse yet U.S. agriculture and mining has been in near-depression for years, and retooling will not come overnight. Add to this the credit crunch, violent weather, and instability in many regions and you get some perspective on how dangerous it is to be shorting many commodities.

Mining is facing an additional power outage not being mentioned. There is also a financial power outage coming. The seizing up of fiat liquidity and debt issuance will constrain exploration and development. With the go-juice of commercial bond and CDO offerings gone many projects will be put on hold, or cancelled. Marginal mines that are debt-laden will be heavily scrutinized. The phrase "perfect storm" is hackneyed for sure. It may, however, actually apply at this point in time to the precious metals.

I wouldn't be surprised to see the IMF actually show a "sale" of some of their gold in the future. It may be unavoidable if the GATA Ft. Knox gold audit is successful. Their current blustering could turn into full blown book squaring when Ft. Knox is proven largely empty.
James Mc

More on the commodities uproar:

Bill,
I think that Friday was noteworthy, not only for the magnitude of many commodities gains, including the precious metals, but also for the breadth of those moves. If we were watching a similar across the board surge in stocks, everyone would be talking about the beginning of a major new phase in a bull market—or, perhaps, a blow-off. Considering that sentiment in the gold and silver group already stinks, with numerous analysts already bearish, the blow-off scenario is easily eliminated. So it is possible that Friday may have heralded the beginning of a new bull phase in commodities, presumably including gold. Today, while everything else continues to pop the Cartel is again sitting on gold, effectively declaring, "over our dead bodies." I can only reply, "I hope so," (financially-speaking, of course).
Best wishes,
Peter R.
www.pandacollector.com

Chris Powell and I spent a fun dinner with Thom Calandra at the Phoenix show …

Blog: ThomInAtor Bullets
Post: Special hello to Phoenix show-goers!
Link: http://thomcalandra.blogspot.com/2008/02/special-hello-to-phoenix-show-goers.html

***

Some feedback on the South African Business Day full page WSJ ad:

Pleasure! It was nice to see it in the paper. I had a few brokers mention it to me, without them knowing we’d paid for it, so I think it had a lot of impact! Well done, the momentum is now on our side.

Quinton George
Managing Director
Trinity Asset Management (Pty) Ltd
Financial Service Provider (FSP 766)

The nightmare of owning some of the smaller gold and silver companies continues for the most part. It is almost beyond comprehension, with no sign yet of any change for many firms in this beleaguered market sector. The other day I mentioned that a highly regarded hedge fund manager said that the sector as a whole had gone to 8 standard deviations below where it should be. ECU Silver ($1.88 Cdn, up 3 cents) is a perfect example. Take a look at this:

Hi Bill,
Attached you can see my little artwork :-).
On the monthly chart of silver combined with the monthly chart of ECU, we see a very high correlation from january 2004 to august or september 2007 (red circle).
I do not understand the decoupling, especially when we take into account the recent resource update and the reduction of the short positions.
Should’t the price be between 4 and 4,5?
Stefaan Moyaert
Belgium Europe

Andy has it right:

I hope that in all the positive things to write about gold and silver prices, it isn’t lost on readers that the junior exploration sector is being completely decimated. As I wrote a few months ago, if things do not change soon we’d see our first wave of bankruptcies, and clearly things have not only remained unchanged but gotten significantly worse since year-end.

To watch gold and silver power ahead each day to new highs and watch the stocks have literally no buyers and unlimited sellers is unfathomable. Today the Dow is up, oil and oil stocks are on fire, gold is at a new high, and silver is exploding.

Yet the HUI is up only 2 points and the juniors, from high quality to low quality, have nearly gone no bid. Even high quality names with Street support, fat bank accounts, and no discernible issues of any kind have nearly no buyers right now. Few financings are getting done, and many companies face the execution of such transactions at the most onerous of terms, including issuing equity at multi-year lows with huge warrant coverage.

This is the worst of the worst, and I cannot imagine what will have to happen for this to change.
Andy

This too shall pass. There is NO doubt in my mind, the shares of the downtrodden gold/silver companies will go bananas. The light bulb about the real gold and silver story continues to elude the investing public. They will "get it" in time and then lookout above.

Gold, silver and the shares remain THE historic investment opportunity of a lifetime!

GATA BE IN IT TO WIN IT!

MIDAS

Appendix

Please pass on to contributor......

CHRIS POWELL.....Have I not read somewhere that the IMF does not actually "own" any gold (in the sense that they possess it) , but rather that a number of nations have "pledged" ounces from their own inventory to the IMF as a means "providing assets" to the IMF "Balance sheet" ????

In the meantime the various "pledgers" get to "spend" / "allocate" their gold yet a third or fourth time. It sure would be interesting to see who is left standing if all these various "paper gold" pledges/securities/allocations/contracts were eventually unwound and resolved into physical deliveries ?????

As I read more and more at the LeMetropoleCafe and learn more about the GATA investigations it is so obvious that the GOLD MARKET today is just one big FRAUDULENT PONZI SCHEME.......BUT.....how much longer can these boys hold it together?

Looking forward to the WASHINGTON CONFERENCE and to the results (if any ) of the GATA demands for an "inventory accounting" of the U S GOLD RESERVES.....GOOD LUCK
Pat S

I'm sure that if the IMF offered CHINA all of their gold at $ 1200.00 per ounce it would find a ready buyer. The Chinese would be only too happy to part with 125 million worth of paper in exchange for the yellow stuff. J. Canuck

Hi Bill -
It heartens me to see so many gold writers casting doubt on the validity of the Silver and Gold ETF's. This fraud has to be stopped for REAL gold and silver to finally be freely traded.

I recently read the iShares Silver Prospectus again. As I have written before the changes in the new prospectus (removing the word "bullion" and changing the JP Morgan liability from $1B to 264,550,265 oz) are very telling but this time I was struck by this statement on the very first page:

"Neither the Securities and Exchange Commission (SEC) nor any state securities commission has approved or disapproved of the securities offered in this prospectus, or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense."

How could the SEC allow this security to publically trade without performing any due diligence as to the FRAUDULANT nature of this offering? If the SEC refuses to authorize or even look at SLV, how is it a pubically traded security. But the even bigger question: WHO REGULATES THE iSHARES ETF? Looks like NOBODY!

Great GATA exposure lately....keep up the fight!
Bix

From Andy:

More and more, the government’s fraudulent reporting practices are being written up in mainstream media. First the birth/death model and hedonic/BS inflation statistics, and now this BRILLIANT article on the vaguaries of reporting what is employed and unemployed….

UP AND DOWN WALL STREET DAILY |

By RANDALL W. FORSYTH

THE LINES AT THE UNEMPLOYMENT OFFICES these days are surprisingly short these days, which is puzzling to observers who can see signs of recession everywhere else.

"Claims Are Still Amazingly Low," according to the Daily Economic Report of International Strategy & Investment, headed by the redoubtable Ed Hyman and Nancy Lazar. The claims to which they refer are for first-time filings for unemployment insurance, which is a leading indicator for the labor market and for the economy as a whole (they're a component in the Index of Leading Economic Indicators.) As such, their release each Thursday morning is eagerly awaited by the markets.

Of course, the weekly numbers have more noise than signal, in large part because of the inability to be adjusted accurately for seasonal factors, such as the Martin Luther King holiday, which distorted the data a couple of weeks ago. For that reason, it's better to look at the trend in the four-week moving of initial unemployment claims.

On that basis, they indeed have been "amazingly low," running at about 335,000 claims per week. That would be consistent with the economy growing at a 3% inflation-adjusted annual rate, according to ISI. That pace is not consistent, however, with a contracting economy, falling employment or a drop in the service economy, as indicated in the recently reported negative readings for January's non-farm payrolls or the Institute for Supply Management's Purchasing Managers' gauge for the non-manufacturing. First-time jobless claims typically average closer to 400,000 per week, or higher, during recessionary periods.

So where are all the filers of jobless claims? Some economists say their absence at the unemployment office indicates the economy isn't really in such dire straits, notwithstanding other evidence, such as the punk chain-store sales for January reported Thursday.

But there might be a different explanation. And clues are buried in, of all places, the surprisingly strong productivity data for the fourth quarter.

Despite a sharp slowing in output in the last three months of the year, productivity still grew by a fairly healthy 1.8% during the period, more than three times as fast as economists generally had forecast. Usually, when the economy decelerates, productivity -- which is defined as output per hours worked -- declines because the numerator falls faster than the denominator of that fraction. Businesses don't immediately furlough workers as soon as production slows; it's not that they're soft-hearted, but it takes time to see if the falloff is temporary or not.

In the second half of 2007, there was an unusually sharp decline in the hours worked by self-employed workers, so the denominator fell, resulting in the fraction rising.

According to the productivity numbers, total hours worked fell by 1.5% in the fourth quarter. Looking at the Labor Department's payroll data, however, hours worked rose 1% during that period.

Why the discrepancy? The payrolls data count workers on companies' payrolls. The productivity data, by contrast, count all workers, including the self-employed. If the latter rose while the former fell, it's reasonable to infer that the self-employed were working less.

That's important because the self-employed have become an increasingly large portion of the U.S. economy, and not just because of the E-bay entrepreneurs that Vice President Dick Cheney is fond of citing.

During the housing bubble, the army of mortgage brokers and realtors swelled. The barriers to entry into those fields are minimal. As the former head of mortgage operations of a major New York bank once told me, a mortgage broker is a used-car salesman with a better suit. (Apologies to used-car salesmen.)

In any case, thousands of people began to earn a living by getting a slice of the housing boom. But even when they went to work for a mortgage or real-estate firm, they remained independent contractors, not employees. That meant that they weren't on firms' payrolls (and not counted in the establishment survey of the monthly employment report.)

Their independent-contractor status also precludes their receiving unemployment benefits. The legions of freelancers extend beyond the salesmen and saleswomen who raked it in during the housing boom to those did the honest work in the construction trades, from electricians to carpenters, who worked for contractors (also entrepreneurs.)

Many of this corps that swelled and prospered during the housing bubble are out of work. But they can't file for unemployment insurance.

According to Paul Kasriel, the director of economic research for Northern Trust, hours worked by the self-employed were down sharply in the fourth quarter. Jobless claims, meanwhile, are moving up but not as rapidly as in past recessions.

"So, the independent-contractor hypothesis might be the explanation given everything else seems to indicate we have entered a recession," he writes in an e-mail.

Rarely is it worthwhile to parse a single data series so closely, but the low level of initial unemployment claims has been a thin reed on which recession deniers have leaned. (That should not be construed to include ISI, which has been early to catch the signs of a weakening economy.)

The key conclusion is that there are more folks out of work or not earning income than those who are showing up at the unemployment lines. That's one reason why it is, indeed, different this time.

-END-

Hello Bill - this is the first time Ive written after years of membership benefits in the form of 'truthful' if somewhat biased money making infromation. I could not resist however, after reading the Reuters report on the G7 agreement to sell IMF gold - first of all isn't it the G8 now and doesn't the US, as part of that have to approve if they are part of the G8 (or7)? and haven't they always been the ones (Greenspan) to veto any IMF sales before? and as Jim Sinclair notes any sale would bring out large (eg: sovereign wealth fund large) buyers at a single price. I wondered how much of the 92 billion 103.4million ounzes of gold those old bankers 'The Rothchilds" will grab to add to the nice haul they got from the venerable B of E before they pulled up stakes at the bullion fix in London and basically retreated back to France. I also wondered if this might be the last chance for the US to acquire enough gold to meet an audit (and avoid revolution)....and to stay as part of the world financial heirarchy. Just a lot of wonders that are no doubt as verifiable as myths. They do say (Historians that is) that all myths hold a grain of truth (ie. have some degree of factural basis).. So this little missive to you is to say thank you for more than the subscription cost and to see if your thoughts are as full as variables and scenarios as mine. Feel free to respond (or not -as you choose) and/or to print (or not - as you choose). Trevor

Bill.
My trusty Bloomberg informs me this morning that since commencing my subscription about three years ago, I have managed, bucking and heaving, to scratch out a 123.65% gain on my physical gold, including 39.75% over the past year.I don't know the number on my silver other than its considerably higher than the gold.I confess to being somewhat embarrased by all this.

This investment appears to be working out, well, shall we simply say, somewhat adequately.

Accordingly, I am beginning to worry a bit about what you are doing to the Cartel.

First of all ,by confining my returns to 40 % -60% percent per year they kind of keep me centred,disciplined in a paradoxical sense; and secondly, the periodic raids give me wonderful opportunities to add to my positions at healthy discounts .I find myself a bit reluctant to trifle with this arrangement, it seems, well it seems to be sort of working.

So, I thought I might just ask, is there any chance we could perhaps ease up a hair on the old Cartel, maybe even kind of prop them up for a couple more years? Two more like this would about do it. And then we can slay them, ok? Just a thought.
gs

Hi Bill,
You gotta love this from Morgan Stanley:

"Morgan Stanley analyst Stephen Jen said the Fund held 103.4 million
ounces of gold worth some $92 billion at current market prices. That
was up from $23 billion just five years ago.

" 'The IMF is rich, if it wants to be,' he wrote in a recent note to
clients, issued before the G7's approval of the gold sales. 'This is
arguably a good time to consider selling some of these gold holdings
and investing the proceeds in financial securities with positive
yields.'

So, gold was only up 300%, but Stephen Jen of Morgan Stanley thinks
the IMF could do better by investing in financial securities with
positive yields. Maybe something like sub-prime mortgages? Or Morgan
Stanley stock? Or how about US Treasuries?

If they are selling some IMF gold, that means that there is no gold
left to sell? Makes you wonder.

Keep up the great work!..... Tom

Bill,
I had another conversation with my bagel store manager before church. This time he said that the price of poppy seeds just went through the roof; 50 lb. bag for $145. He said the same bag 3 months ago was $81... there is no inflation, but there is hyper inflation.

Keep up the battle and thanks for all your bravery fighting the good fight.

Men love darkness rather than light because there deeds are evil. Everyone who does evil hates the light and will not come into the light for fear that his deeds will be exposed. But whoever lives by the truth comes into the light, so that it may be seen plainly that what he has done has been done through God. John 3:19b-21

Andy :-) †