From Ed Steer:

It was pretty quiet on the gold and silver front once again on Friday. Neither metal did much of anything...although the silver price was trashed to a new low for this particular move...which happened shortly before the Sydney market opened for trading. As per usual, all the major activity on Friday was confined to Comex trading hours in New York. Both metals rallied right from the open...and both got squashed shortly after that...with gold making a new low for this move. From that point there was a rally that showed signs of going parabolic right at the London close. Once London was done for the weekend, the '2 or 3' US bullion banks went to work...and that was it.

As far as open interest goes for 'Black Thursday' in the precious metals market; gold o.i. fell 5,013 contracts and silver o.i. rose 124 contracts. The usual NY commentator had the following to say about the gold o.i. numbers..."With the price action so much greater than the open interest decline, it seems likely that there was a good deal of short selling into this slump." I agree with that statement totally...and what he refers to in gold occurred to an even greater extent in silver...as it appears more contracts were added on the short side than there were long positions liquidated...which is why the open interest rose.

As far as the Commitment of Traders report went, there was a huge improvement in silver. The '2 or less' US bullion banks went long (or covered) 4,589 contracts...a big number. On the other side of the ledger, the tech funds tossed 3,764 long positions to the US bullion banks and also covered 943 short positions...for an improvement of 2,821 contracts. The rest of the positions were in the Non-Reportable or "small trader" category...where they pitched 1,314 longs to the US bullion bank(s) and went short an additional 454 contracts.

In gold, there wasn't a lot of visible change, and the o.i. numbers reflect that. Most of the change was within the Commercial category itself...between the Raptors and the T-rexes...and I'll leave that for Ted Butler to talk about next week. All in all, it was another wildly bullish report...and has improved even more since yesterday's COT cut-off...which was at the close of business on the Comex on Tuesday afternoon...because it was at exactly that point that the '2 or 3' US bullion banks really started this last assault on gold and silver that we've just experienced. Ted Butler says that we are very near the end of the "getting blood out of a stone" phase. He doesn't think that there's much more left...and I totally agree. We'll find out soon enough. However, one thing is for sure...now that the '2 or 3' US bullion banks have successfully extricated themselves from a large portion of their massive short positions over the last couple of months, they won't be going short either gold or silver on the next price rise...so look out above when that time comes!

In other gold news, a report from voanews.com says that..."Over the past 12 months, gold prices have increased by nearly 50 percent. But the high prices have not dampened India's appetite for the precious metal." India imported 64 tonnes of gold in September, down from 100 tonnes from the previous September. And from the usual NY gold commentator comes this item..."Reuters reports that Turkish gold imports for September were 29.7 tonnes, down 33% from August's record imports of 47.195 tonnes, but 118% above last September. This is the highest quantity for September in the 14 years the Istanbul Gold Exchange reports, and the sixth highest for any month. Someone in the area wanted a lot of gold." In another Reuters story, the CEO of Gold Fields says that "Global gold supply will likely contract as the financial crisis in the United States saps funds away from planned mining projects...Some of the juniors and intermediate companies are not going to be able to develop their projects. And I think what this means is that mine supply in gold is probably going to decline more than what people realize." And lastly, the GLD ETF dropped 500,000 ounces and the SLV ETF was flat...which is kind of surprising...and has to be another hugely bullish sign.

I see that that Wells Fargo has made an offer for the carcass of Wachovia...and Citigroup is throwing a hissy fit about it. Who really cares, but the fight will be interesting. Next is the headline: U.S. September job losses the steepest in more than five years. In another Reuters story..."U.S. companies slashed dividends by $22.5 billion in the third quarter, Standard & Poor's said on Friday, and September was the worst month for dividends since S&P started tracking the data in 1956." And lastly, AIG has already drawn down $61 billion from the $85 billion that they were given during the bailout/takeover last week.

Today's first story is from the New York Post and was written just after the Senate passed the $700 billion bailout package. It's well worth the read. The story starts out with the line "Here, little piggies!"...but the headline reads "Piggy Pols in Hog Heaven with Pork-Packed Pact" and the link is here.

In September, there was the annual Silver Summit in Coeur d'Alene, Idaho. This has become a hugely successful conference in the few short years that it’s been around. Here's a story about that conference posted at silverinvestingnews.com. It's certainly worth the read and is entitled "Silver Summit: Analysts Cry Manipulation". The link is here.

Recent events have proved that the paper-money system of this country may be used as an engine to undermine your free institutions, and that those who desire to engross all power in the hands of the few and to govern by corruption or force are aware of its power and prepared to employ it. Your banks now furnish your only circulating medium, and money is plenty or scarce according to the quantity of notes issued by them... - Andrew Jackson (Farewell Address)

Today's 'blast from the past' came out in 1976. Turn up your speakers and click here.

The die is cast...and our fate is sealed. We just don't know how the end will come...how long it will take to arrive...or what the world will look like when we get there. Doug Noland over at prudentbear.com stated in his Credit Bubble Bulletin last night that..."Today, confidence has been shattered, and Wall Street finance is a complete and unsalvageable bust. The spigots for Trillions of finance...has been essentially shut off....This historic speculative Bubble is now blowing up. One of the greatest manias ever -- surely The Greatest Episode of "Ponzi Finance" -- is absolutely coming apart...I have a very difficult time seeing a way out of this terrible mess."

Neither do I. Seat belts on...and crash helmets at the ready!

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