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From Ed Steer:


The Cartel showed up on Globex trading shortly after London opened for business. Someone was offering physical in size and they were successful in driving down the gold price below $900 briefly before it recovered somewhat to slightly over $900. Silver had the same chart pattern.

With options expiry in progress, and first day notice for silver delivery next week, the boys are shaking this tree as hard as they can to get all the weak longs and tech funds to cough up their positions so they can cover. This bear raid is totally illegal, of course. It's like a Mafia/Nazi controlled town...there's nothing that we can do except sit and watch and mutter obscenities at them under our collective breaths. When will this be over? Don't know. Are they gunning for the 200-day moving averages? Don't know that either. Only they know, and they aren't about to tell us. Note the rise in the US$ yesterday...up a bunch. Funny thing is, that gold is never allowed to rise that much when the dollar heads south.

For Tuesday, gold open interest fell another 3,148 contracts, but once again silver o.i headed in the opposite direction...up 2,636 contracts. Like I said yesterday, don't look to me for why this is so. Volume was reasonably light on Tuesday, as it was yesterday. If the boys have anything to do with it, all these changes in o.i. that we've seen in the last couple of days, won't be showing up in this week's COT. As I've mentioned several times before, they are great at withholding information when they're in the middle of one of their classic bear raids.

From The King Report last night: "Bennet Seddaca in The Moral Hazard Club writes, When you add up all the Level II assets by just the eight largest holders in the U.S: JP Morgan, Citibank, Bank of America, Merrill Lynch, Goldman Sachs, Bear, Morgan Stanley and Lehman Brothers , it comes to a staggering $5 trillion - nearly half the size of the economy. Level III assets are nearly $600 billion. Is the Fed big enough to bail out all these assets? My best guess is probably not, and more firms will fail."

A couple of stories today. The first has to do with Dennis Gartman selling out his gold position. This isn't the first time that his friends in the Cartel have cut him off at the knees. Probably won't be the last either. Chris Powell, GATA's secretary treasurer, who is senior editor at the Journal Enquirer in Manchester, Connecticut has a few choice words of his own about Gartman, and the reporter who wrote the Bloomberg story. Click here.

The other story is from The Wall Street Journal and is an oil story from Saudi Arabia. It's a 'good news'...'bad news' story. Yes, it's more production, but.....! It's entitled "Saudis Face Hurdle in New Oil Drilling" and it's linked here.

I see a Costco store in California has advised its shoppers "to follow their regular rice-buying habits" and have also put restrictions on flour purchases. And the Sam's Club division of Wal-Mart "is restricting purchases of some types of rice to four bags a visit." Lastly, Government of Singapore Investment Corp (the country's sovereign wealth fund) said "the world economy may be headed for its worst recession in three decades." Just three? How about eight!

The boys were everywhere yesterday...the US$, the Dow, gold, silver...I'm sure there was more. It just goes on and on. I don't expect today to be any different.

See you on Friday.

Casey Research correspondent-at-large Ed Steer is a keen observer of the financial scene and a board member of GATA.org.