The Fed and the IMF say: "Print... or Die!"

Gold pretty much traded sideways during the Far East session... with the gold's low of the day... such as it was... occurring shortly before 10:00 a.m. Hong Kong time on Friday morning... which translates into shortly before 9:00 p.m. Thursday evening in New York.

Once the London a.m. gold fix was in [10:30 a.m. Friday morning] at the close of Hong Kong trading [6:30 p.m. Friday night]... gold was on the move upwards. And, once New York opened, there were several attempts at an up-side breakout... with the first occurring at precisely 9:00 a.m. Eastern. This met with huge selling... as did every subsequent rally attempt from there. Gold's high price for the day [$1,214.80 spot] appeared to be set at the vertical price spike that occurred at 10:20 a.m. Eastern time... shortly after the London p.m. gold fix was in for the day. Although that time could have been the fix itself. Gold volume was pretty decent... around 110,000 contracts net of everything.

Here's the New York Spot Gold [Bid] chart which shows New York trading in much more detail. I also found it slightly unusual that the gold price continued to creep up in electronic trading after the Comex had closed for the weekend. I don't know what to make of that, but I'm sure that it didn't happen on much volume. Maybe it's nothing.

Silver had a similar day to gold... the only two differences were that silver's low [around $17.82 spot] occurred either late in Hong Kong trading or early in London trading on Friday. You chose. And the high [$18.25 spot] was set in New York about 10:35 a.m. Eastern time.

The dollar's trading action on Friday was another yawner... as the graph below illustrates.

The HUI hit its peak when gold hit its high of the day... around 10:20 a.m. Eastern time. And although the precious metals shares drifted lower from there, the HUI finished up 2.22% on the day. Here's the HUI graph for all of all of last week to put the entire week in context.

The CME Delivery Report for Friday showed that 5 gold and 25 silver contracts were posted for delivery on Tuesday. The link to the action, if you wish to dignify it with that name, is here. And I note that there are still 748 silver contracts yet to be delivered in July. That's 3.74 million ounces... and one has to wonder what the issuers are waiting for. Maybe they're waiting for more silver to be delivered onto the Comex so they can actually have silver to deliver?

The GLD ETF reported another small withdrawal yesterday. This time it was 48,897 troy ounces. There was, as usual, no report from SLV. The U.S. Mint had another busy sales day on Friday. They reported selling another 10,000 ounces of gold in their gold eagle program... plus another 2,000 24-K gold buffaloes... and a further 225,500 silver eagles. Month-to-date... 43,500 ounces of gold have disappeared into the gold eagle program... 8,500 into the 24-K gold buffaloes... and 1,101,000 ounces of silver into silver eagles. I hope you were buying your share, dear reader.

The Comex-approved depositories reported that their silver stocks declined 400,279 troy ounces on Thursday... with the lion's share coming out of HSBC, USA. The link to the action is here.

Well, the Commitment of Traders report came in just as Ted Butler figured it would... with huge drops in open interest... and large declines in the bullion banks' short positions. This was the object of the smash-down on July 1st... and it worked like a charm. The link to the report is here.

In silver [for positions held at the close of trading on Tuesday, July 6th], the Commercial net short position [where the bullion banks hide] fell 6,142 contracts... which means they covered 30.7 million ounces of paper silver that they had sold short. The Commercial net short position still sits at a grotesque 261.9 million ounces. Of that amount, the '4 or less' bullion banks hold 249.8 million ounces of that... with the '8 or less' bullion banks [which includes the '4 or less'] are short 321.7 million ounces. These '8 or less' bullion banks hold 78% of the entire gross Commercial short position all by themselves... leaving the other 25 trader in the Commercial short category sharing the remaining 22% of the short position amongst themselves. It should be obvious to anyone that these eight bullion banks holding such a concentrated short position, totally control the silver price. Yet the CFTC and our silver companies say, and do, nothing. The link to the full-colour COT silver graph is here.

In gold, the Commercial net short position declined by a whopping 40,814 contracts. Ted says that this number either is, or is very close to, a record drop in gold for a one week time period. The Commercial net short position fell all the way down to 24.9 million ounces... a drop of 4.3 million ounces in one week. That's a lot! Of that 24.9 million ounces... the '4 or less' bullion banks are short 23.5 million ounces... and the '8 or less' traders hold 29.3 million ounces short. The link to the full-colour COT gold graph is here... and the page was very slow to load in the wee hours of this morning.

The '8 or less' bullion banks hold 64.7% of the entire gross short position in the Commercial category in gold. The remaining 36.3% is split up between the 42 remaining traders in that category. Who controls the price, dear reader? The '8 or less' bullions [who work in collusion] that hold 64.7%... or the 42 remaining traders working independently that hold the remaining 36.3%?

This isn't rocket science... it's Grade 3 arithmetic. The Commitment of Traders report was specifically designed to spot concentrated positions [either long or short]... which you have to have in order to have price manipulation. The evidence is all here... and has been here for a decade. You can see it. I can see it. The CFTC can see it... but they do nothing. It's always been my opinion that the CFTC is there to protect these big shorts. That's Gary Gensler's real job.

But, having said that, I'll give him a little more time until this new financial regulation bill is passed... and see what happens from there... before I hang the guy from the nearest yardarm.

As you can imagine, silver analyst Ted Butler has quite a bit to say about yesterday's COT report... and the link to his interview with Eric King over at King World News is here. I suggest you stop reading at this point and listen.

Yesterday I ran a story headlined "$600 Sale? Get Ready for Tax Form" about a new law coming into effect on January 1, 2012 where all bullion sales/purchases over $600 had to be reported. Well, I heard from reader Ken Duquette on this issue... and he said his lawyer has read the appropriate section of the bill [Section 9006]... and states the following... "Good news. I have reviewed the health care law as passed (pl 111-148) and there is no reference to gold silver bullion etc. except as various "tiers" in the new law. there is a pending bill to repeal section 9006 reporting requirements. However, section 9006 has nothing to do with reporting sales of gold silver bullion etc. but instead with some rather dry corporate reporting issues. Perhaps the original bill had something that would cause us to be concerned, but nothing in the final law as passed."

So there you have it. Who is right? I don't know, but I'm sure we'll hear a lot more about it in the next eighteen months if there really is going to be an issue. For those of you who are already panic stricken... I'd suggest you take the red pill... then wait until the real facts show up. And they will.

Here's some rather startling information that I lifted from the Friday edition of the King Report. In it, Bill commented that... "consumer credit was the really big fundamental story on Thursday. May consumer credit tanked $9.1B (-4.5% annualized) while April was revised sharply lower, from +$1.0B to -$14.9B. Revolving credit collapsed at a 10.5% annualized rate. (Non-revolving credit -1.5%). Lower income, no job growth and plunging consumer credit can mean only one thing economically." Yes, it does... and that's why the trial balloons are already out for Q.E. 2.0. More on that further down.

Bill also mentioned that the Baltic Dry Index plunged 4% on Thursday, the 31st straight daily decline. The BDI is a leading indicator... and, if you give the graph below a glance, you'll see that this "leading indicator" is pointing straight down.

Before I get on with my stories, here's another nifty graph courtesy of Nick Laird over at sharelynx.com. The chart is titled "Gold vs. Silver... 200-day moving average deviation". I talk about the 2000-day m.a. all the time. Here it is charted out for both gold and silver going back to the year 2000. The top two lines are the gold and silver prices... and the bottom two lines are the percentages either above or below the 200-day moving average for each metal over that time period. As of Thursday's close, the silver price was 1.5% above its 200-day m.a... and gold was 5.6% above its... basically market neutral. I feel that you should spend a couple of minutes looking over this chart... and maybe printing yourself a copy... or saving it in your computer might be worth your while.

Today's first story is courtesy of 'Vern in Ventura'... and comes from the Thursday edition of The Washington Post. I mentioned a few paragraphs ago that "Quantative Easing 2.0" was probably in the cards... well, here's the trial balloon. The headline reads "Federal Reserve weighs steps to offset slowdown in economic recovery". Earlier this week the IMF was telling Europe the same thing... print or die. Now the Fed has weighed in with the same rhetoric on this side of the Atlantic Ocean. This is a must read from one end to the other... and the link is here.

The next offering is a piece sent to me by Washington state reader S.A. It's another piece about High Frequency Trading... and how the average trader is hung out to dry. Now, traders say, humans are responding to machines rather than the other way around. "There are no real buyers or sellers," says Joe Saluzzi, trader at Themis Trading. "It's all about the machines." It's a bit of a read, but it's the weekend, so I hope you can fit it in. The headline reads "Computerized stock trading leaves investors vulnerable"... and the link is here.

Yesterday I ran an Ambrose Evans-Pritchard piece from The Telegraph about the horrific consequences of the destruction of the EMU [European Monetary Unit]. In response to that article, I received a piece from California reader Carl Linfors. It was something that was posted over at the Swiss website thedailybell.com. This is all about money printing and the banks... specifically the IMF and the U.S. Federal Reserve. They are panic-stricken at the thought that governments may actually stop borrowing and spending... and are more concerned about their own existence... than the benefits that national governments might enjoy if they stuck to their fiscal guns. The headline of this essay reads "Central Bankers Losing Control". In the piece, the author actually mentions the article from The Washington Post that I linked above. It, too, is a must read from one end to the other... and the link is here.

Well, it's hard to believe [at least those of us with the tin foil hats at GATA] that our cause has finally become main stream. I have two GATA releases about that were posted over at gata.org in the wee hours of this morning. As Chris Powell's intro states... "If Friday's edition of The Gartman Letter, perhaps the leading daily commodity market letter, is any indication, either GATA is getting respectable or, perhaps more likely, central banking is quickly losing what remains of its respect." Dennis Gartman throwing in the towel??? I didn't think I'd ever live to see the day! The headline to the GATA release reads "Is gold price manipulation becoming a respectable topic?"... and the link is here.

Chris Powell introduces the second GATA release as follows... "Interviewed Friday by Eric King of King World News, Hinde Capital CEO Ben Davies credited GATA for "a fantastic job" alerting gold fund managers like himself to the necessity of buying real metal rather than paper claims to it like exchange-traded funds." The headline reads "Gold fund manager Ben Davies praises GATA in King World News interview"... I would suspect that it's worth the listen [I haven't heard it myself yet, as I can't listen and write at the same time]... and the link is here.

Eric King has been a busy boy for the last 24 hours. Here's his third interview in this column. This one is a follow-up to his blog posting that I linked yesterday. This is an interview with Goldmoney founder, James Turk. I haven't listened to this one either... and the link is here.

To compel a man to subsidize with his taxes the propagation of ideas which he disbelieves and abhors is sinful and tyrannical. - Thomas Jefferson

Today's 'blast from the past' is courtesy of reader Dave Mancini. I was in Grade 12 when this song was a hit. And yes, I'm that old. Turn up your speakers and click here.

Well, with massive deflation looming, the IMF and the Fed are at battle stations. It's "print... or die"... or "print and die". Which one would you chose, dear reader.

Not that it really matters... death by a thousand cuts, or death by one single thrust... as in the end, it will all boil down to the precious metals when the dust finally settles.

I'm still all 100% invested in precious metals and the companies that produce them... and that will continue until they are ripped from my "cold and dying hands" as the saying goes.

And do not underestimate the fact that Dennis Gartman has finally come in from the cold. If he's crossed that line, even if only a little... can the rest of the world's investment managers be far behind? And, heaven forbid, maybe even the miners themselves! The gold price management scheme is now fully in the public domain... and it's just a matter of time [and let's hope that it's not too much time] before it's finally reflected in the price of both gold and silver.

The central banks appear to have lost the battle... and it's now up to them to decide when they'll throw in the towel... and hopefully they'll decide to do that before the market does it for them.

There's still time to get on board this gold and silver train... so if you're seriously considering making an investment in the precious metals, I urge you to step up to the plate and purchase a subscription for either Casey's Gold and Resource Report... or Casey Research's flagship publication... the International Speculator... which also includes Casey's Gold and Resource Report for free. Consider it an investment in asset protection and wealth accumulation. I certainly do... and our 100% money-back guarantee is always there.

Enjoy the rest of your weekend and I'll see you on Tuesday.