From Ed Steer:

All was calm in the Far East gold and silver markets early Thursday morning. There was a hair more activity during European trading, but the boyz, the 2 or 3 US bullion banks, saved their big guns for the Comex open...and then it was lights out! This had to be one of the biggest bear raids in both precious metals that I've ever seen. It was shockingly illegal too. Platinum, palladium and rhodium were crucified as well. There was probably some major new shorting by the tech funds on this down move...none of which will see the light of day until the COT on the 10th. However, the open interest numbers might give us a clue when they become available later this morning.

Gold open interest for Wednesday rose 956 contracts...and silver open interest dropped 1,141 contracts. I don't know why there was this dichotomy...as both metals were up sharply in Comex trading on Wednesday before being hammered by the boyz in after-market trading right after the Comex close. I'll report Friday's o.i. numbers and the new COT revelations on Saturday morning.

Activity such as we saw yesterday is the most visible, and shocking, form of market manipulation possible. It can't be any plainer than that. The world is in the grip of the biggest financial, monetary and economic crisis ever...and the precious metals were pounded into the ground...and in the case of silver...well below its cost of production. Yet the CFTC, with its new investigation into price management in the silver market, hasn't found a thing yet...and if they have, they're not telling us...or doing anything about it. Yesterday's activity is a prima facie case for price fixing by the '2 or 3' American bullion banks. Of course the precious metals miners will never admit that the price for their primary product is managed. Just take a look at silver producer Coeur D'Alene as an example. According to its last financial release, they were losing money when silver was $17 the ounce. Why are they even in production at these prices? Has any precious metals mining company admitted that there is a problem and that they plan on doing something about it? Not on your life! To mining companies, shareholders are a nuisance that must be tolerated.

A Bloomberg headline yesterday read as follows: Libor/Euribor Rates Soar, Commercial Paper Slumps as Credit Freeze Deepens..."The London and European interbank offered rates, that banks charge each other for loans, rose for a fourth day to 4.21% and 5.33% respectively, while a drop in financial issuance caused the U.S. commercial paper market to tumble 5.6% to a three-year low." And in a Reuters story on the same subject..."The U.S. commercial paper market contracted dramatically for a third straight week, as the global credit crisis effectively paralyzed companies' willingness to lend. For the week ended Oct. 1, the size of the U.S. commercial paper market, a vital source of short-term funding for daily operations at many companies, fell by $94.9 billion to $1.607 trillion, from $1.702 trillion the previous week. That brings the cumulative shrinkage of this market to $208 billion in the last three weeks, including the previous week's $61.0 billion fall. Analysts agree that the commercial paper market, along with most other conduits of short-term borrowing for banks and companies, has effectively seized up in recent weeks." Jim Sinclair over at jsmineset.com had this to say about it yesterday...."Unless the LIBOR rate drops sharply, we are facing a planetary financial crisis next week...The bailout bill is powerless to prevent what's happening now."

In the evolving banking panic in Europe, I see that Greece has now joined the stampede for a Europe-wide bank bailout...and Germany continues to dig in its heels on this issue. And here's some really bad news for us Canadians. The top five Canadian commercial banks have $800+ billion of credit default swaps on their books, which is several times their entire market capitalizations. How soon will they be looking for government guarantees? However, I digress. The story from The Telegraph in London about the Greek banks is linked here.

Here's more proof that the rush to physical gold is on in earnest. This story is once again out of The Telegraph in London and is entitled "Financial Crisis: Rush for gold as savers queue for bullion". I hope you, dear reader, have lots yourself...all tucked away in a safe place. The link is here.

Watch money. Money is the barometer of a society's virtue. When you see that trading is done, not by consent, but by compulsion---when you see that in order to produce, you need to obtain permission from men who produce nothing---when you see that money is flowing to those who deal, not in goods, but in favors---when you see that men get richer by graft and by pull than by work, and your laws don't protect you against them, but protect them against you---when you see corruption being rewarded and honesty becoming a self-sacrifice---you may know that your society is doomed. - Ayn Rand, circa 1959

I see that interest rate cuts in various countries are being bandied about once again. It also appears likely that the $700 billion bailout (which has gone from a 3 page document to 450 pages in less than a week) is probably going to get passed in the House of Representatives. But it makes no difference...as the deck chairs are likely being rearranged for the last time. Nothing can stop what's about to happen...whatever that may be. Let's just pray that we survive it.

I hope you enjoy your weekend. Please try to get out and make your last possible purchases of physical bullion...and to hell with the premiums. All of us at Casey's Daily Resource Plus will see you here on Saturday.

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