Thanks again to GWR for presenting us with Ed Steer's viewpoints.

Ed writes:

"In silver, two [or less] U.S. bullion banks are net short 27,500 contracts...137.5 million ounces. The Bank Participation Report shows that twelve [12] Non-U.S. banks are net long the silver market by 5,200 contracts...26 million ounces!!!

Ted Butler says, and I totally agree, that this has to be resolved...one way or another. The bullion banks are either going to get overrun with a huge short position on in both metals...or they're going to smash gold so they can beat the living snot out of the silver price. Unfortunately...as both Ted and I have already gone on record as stating...the end result will most likely be the latter, not the former. We figure that it will be quick and ugly. Very ugly. We'd both LOVE to be proven wrong on this one...but past history [with the COT in this configuration] is not on our side. Sorry!"

How does one reconcile this kind of report with the constant comments relative to the Cartel being on its "last legs" or "making one last stand," or being "just about out of ammunition?" From the comments above, it appears the power of the bullion banks is almost plenary - how do so many level thinkers (I try to include myself in this category), continue to invest in what many think is a rigged game, and what's more, where the "riggers" are acting contra to our interests.

The spike down in the jobless claims is thought by many to signal the beginning of the end of the recession in the US (Gartman, Coxe, etc.). That would remove, or at least assuage the "fear factor" as one of the support pillars of price of gold. I can see gold and silver dropping hard in that environment (Friday would qualify for that dubious honor), while base metals (and many other stocks) should be bolstered (that didn't exactly happen in any vigorous manner on Friday). The eventual inflation that's sure to visit the US with a terrible vengence will obviously be bullish for PM's, but that's still some time off, and for now, it looks like the most recent assualt on $1,000 is going to have to wait a while.

Counter thoughts?