From Ed Steer:

Gold and silver both showed signs of life early in London trading yesterday morning, and really took off on the Comex open and the release of the 'employment' numbers. But then the boyz showed up and hammered them both hard. Gold managed to close with a smallish gain, but the bullion banks were really going after the silver market. Ted Butler says that they were after the "short gold/long silver" spread trades. With the gold/silver ratio moving from 62-1 to 66-1 in four hours, a huge portion of the traders playing this particular game must have been blown out of the water.

Ted says that the bullion banks have now declared all out war on leveraged long positions in both gold and silver. Neither the CFTC, the SEC or the COMEX will step in to stop the bullion banks from using whatever method, legal or otherwise, to cover all the short positions that they can...and to hell with the mining industry and their shareholders. After yesterday's activity in the silver market, there is no way of knowing when the bottom will be in. You can toss the rule book out the window.

However, on a more positive note...Ted says that once the bullion banks have covered as many shorts as they can, there will probably be a moon shot rise in the price of both metals. As I've said before...I must have been from Missouri in another life, because of the all the blood in the streets right now...so I'll believe it when I see it. He does have a point though. The current physical demand for both gold and silver is off the charts, and the bullion banks can't allow this sort of drain on their reserves to continue for much longer.

Al Korelin of the Korelin Economics Report was kind enough to interview me yesterday afternoon, and...if you wish to listen to the broadcast...it's linked here.

Despite the hammering that silver has taken, the SLV ETF continues to add silver to its stockpile. Another 1.7 million ounces was added a couple of days ago. And yesterday, my dealer here in Edmonton had one of his biggest days in silver...ever.

And in other silver news, silver commentator Jason Hommel mentioned in an essay of his the other day that AGM Matthey of Australia (a subsidiary of Johnson Matthey in the USA) had ceased operations. This appears to be confirmed, as a New Zealand contributor over at Bill Murphy's letmetropolecafe.com called their Auckland office to find that once they delivered all the back orders they had on their books, the Auckland office would close as well. Hommel also mentioned that JM in the USA had told a reputable bullion dealer in the US that they were "winding down" their 100 oz. bar operation in Salt Lake City. I'll await further confirmation of this before I consider it to be the "gospel's truth."

The Commitment of Traders report showed that the bullion banks covered about 22 million ounces of their short position in silver and 1.4 million ounces of their gold short position. The clean out of the last few months has taken the COT report to its lowest level in almost two years. How many more of their short positions these bullion banks can cover is an open question. We'll see what kind of damage they can do next week, if any.

In other news, a Bloomberg story stated that "Foreclosures accelerated to the fastest pace in almost three decades during the second quarter..." And this just out, Fannie and Freddie have been seized by the government and will be placed in a conservatorship. The executives and their respective boards will be replaced. Current shareholders will be wiped out. Of course they saved news like this until Friday night when the markets are closed.

The first story tonight is a 30 minute audio commentary by Don Coxe, Chief Investment Strategist from the Bank of Montreal...and one of Canada's most mainstream financial commentators. For him to say what he says here, is revolutionary for him. He calls what happened in the last six weeks to be "...the most massive intervention of government into the capital markets since Roosevelt closed the banks back in 1933." It's a 'must listen' and it's linked here.

The second story has to do with the 'big picture' over in Eurasia. A week or so ago I mentioned a book that's worth reading on this subject...and that was Zbigniew Brzezinski's tome entitled "The Grand Chessboard: American Primacy and its Geostrategic Imperatives". Here is the 'Reader's Digest' version of the book as written by F. William Engdahl. The title is "Russia, Europe and USA: Fundamental Geopolitics". It's an educational read and the link is here.

And Hank and Ben looked at their handiwork, and they were glad...as this is the most massive intervention of government into the capital markets, or financial system, since President Roosevelt closed the banks back in 1933 - Donald Coxe, Chief Investment Strategist, Bank of Montreal - September 5, 2008

Today's 'blast from the past' takes you back to the '70s again. Turn up your speakers and then click here. Enjoy!

The Dow got rescued...again. Big rallies in the precious metals got crushed...again. It also looked like someone was foolin' with the gold stocks as well. Plus the US$ is sitting pretty at 79 cents. It's sheer madness, isn't it? It's like a nightmare that you just can't wake up from.

There are no markets anymore...only interventions.

Enjoy the rest of your weekend and we at Casey's Daily Resource Plus will see you here again on Tuesday.

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