From Ed Steer:

It was no surprise to me to see gold and silver get sold off the moment that Globex trading began in New York at 6:00 p.m. Wednesday night. Sydney and Hong Kong both open for Thursday morning trading shortly after that, and this gives New York the opportunity to set the tone for trading in the Far East if they wish to do so. The Far East is not a big market [Don't forget that 90%+ of all gold and silver trading volume is during Comex hours in New York] and it can be shoved around quite easily, as volume is never very heavy. Note the bottom of the Kitco graph [below] where it shows the times that various world gold markets are open. Carefully note that the New York-based U.S. bullion banks can enter the global market for 23 hours and 15 minutes every day...not just in the Far East...but in London trading as well. But I digress...

Once the London a.m. fix was in, gold began a gentle rally that lasted through the Comex open...and until lunchtime in New York. From there it flat-lined until the close of electronic trading on the Globex at 5:15 p.m. Eastern. I was delighted to see such a wonderful looking gold graph when I rolled out of bed yesterday morning. It certainly appears that we are away to the races...but I'm sure that JPMorgan et al will be riding shotgun on this advance to make sure that it doesn't show too many signs of "irrational exuberance".

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Silver's path was virtually identical to gold's...however the 'top' was in shortly before 11:00 a.m. in New York...an hour before gold's top for the day. Volume in both metals yesterday was not particularly heavy...which is encouraging...and the shares had another spectacular day.

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Open interest changes on Wednesday's wild roller coaster ride in both metals was as follows...gold o.i. rose for the second day in a row...this time by 3,594 contracts...and silver o.i. was down for the second day in a row...this time by 312 contracts. It's difficult to read a lot into these figures...especially gold. Since all the big action happened on a Wednesday...the day after the cut-off for today's COT report...we won't see these numbers until they show up in next Friday's COT on March 27th.

In other precious metals news, there were 90 gold contracts delivered on the Comex yesterday. The two biggest issuers were Prudential Bache [56 contracts] and Fortis Clearing [24 contracts]...and the biggest stopper was the Bank of Nova Scotia [75]. In silver, there were only 56 contracts delivered. The biggest issuer was the Bank of Nova Scotia [56]...and the biggest stopper was JPMorgan [49]. Comex-designated silver warehouse stocks fell a very small 10,065 ounces. The gold ETF...GLD...had another huge inflow yesterday...up 19 tonnes, almost 610,000 ounces. SLV was unchanged. There were no changes in gold or silver eagle production from the U.S. Mint yesterday either. And lastly, Ted Butler pointed out to me that the backwardation in silver had disappeared.

I have four stories today. The first is from the New York Post and bears the headline "World of Trouble: AIG could be on $1.6 Trillion Hook for Global Swaps" The link is here.

The second story is a commentary by Bloomberg news columnist, Jonathan Weil. From it, you get some idea of how far the accounting industry has sunk...and the title pretty much says it all..."Accounting Brothel Opens Doors for Banker Fiesta". Weil says..."the FASB ought to change its name to the Fraudulent Accounting Standards Board. It’s that bad." I thank P.S. for sending me the story, and the link is here.

The next story is posted at Reuters. Its headline reads "China backs talks on dollar as reserve, says Russian source". "China and other emerging nations back Russia's call for a discussion on how to replace the dollar as the world's primary reserve currency, a senior Russian government source said on Thursday. Russia has proposed the creation of a new reserve currency, to be issued by international financial institutions, among other measures...". The link is here.

The last story is a piece that was posted over at Kitco. It's by Julian Phillips and is entitled "Central Banks are Buying Gold for their Reserves Now!". Phillips says..."However, after nearly 30 years of opposition to gold by central banks and occasionally governments, it is a remarkable turnaround that tells us that gold is returning to the monetary arena again!" The story is well worth the read and the link is here.

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A black market is a free market operating against the wishes of the state. - Harry Browne

I was not impressed by the U.S. equity market action yesterday. If this is the best results that they could get just two days after they announced $1.1 trillion worth of money printing, then it won't be too long before we see the next $1.1 trillion of debt monetization. And judging by the price activity of both gold and silver...and their respective shares...I'd say that the market has spoken the words that we at Casey Research have been going on about for years. Buy gold and silver and good quality mining stocks...as this "inflate, or die!" era has just begun.

Enjoy your weekend, and all of us at Casey's Daily Resource Plus look forward to seeing 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.