About an hour after I filed my Friday column in the wee hours of the morning, the bullion banks launched another coordinated attack on the precious metals that began at precisely 11:00 a.m. BST in London. In about thirty minutes they had peeled about $45 off the gold price before the selling stopped.

A rally of sorts developed starting at 1:00 p.m. in London...which was 8:00 a.m. Eastern time right on the button. This rally took the price back up to just about Friday's close, before it got sold off again. Then a smallish rally developed in the thinly traded New York Access Market...and gold only finished down $11 spot on the day.

It doesn't take a masters degree in common sense to figure out that if 'da boyz' hadn't shown up in London...and probably in New York at times during their trading day...gold would have finished the week in spectacular fashion. Volume was pretty chunky.

Silver's price path was very similar to gold's...and the big rally that began at precisely 12 o'clock noon in New York, wasn't allowed to go very far before a not-for-profit seller showed up as silver was about to blast through Thursday's closing price.

From its New York high at around 12:15 p.m...to its close at 5:15 p.m...silver got sold off for about a dollar, closing down 96 cents from Thursday. Volume was pretty decent.

Here's the dollar chart for the last five days...including the Labour Day holiday. As you can see, the dollar has been rising all week...and it's obvious that there's no co-relation with the gold price at all. And gold itself would have finished much higher this week if it hadn't been for what GATA consultant Reg Howe calls "malignant government intervention".

The precious metal stocks continue to amaze me. Despite the fact that the gold price was down significantly when the equity markets opened...and the precious metal stocks gapped down...that buyer with very deep pockets showed up immediately...and bought more cheap gold equities for a significant part of the day.

The fact that the Dow cratered yesterday certainly kept the gold stocks on the defensive...but Mr. Deep Pockets was buying everything that fell off the table. Once the gold and silver price peaked at 12:15 p.m. yesterday, the stocks rolled over a bit...and the HUI finished down 1.06% on the day. It should have been worse...much worse...but we should all hold hands and thank the big buyer for saving us again.

Here's the 5-day HUI...which includes Friday, September 2nd, since Monday was a holiday. The HUI finished up about 1.6% on the week...and that's despite the two coordinated attacks on gold...the one at 11:00 a.m. in London yesterday morning...and the one in the thinly-traded Far East market during the Hong Kong lunch hour on Wednesday.

The silver shares turned in a rotten performance...and Nick Laird's Silver Sentiment Index really got whacked yesterday, as it was down 3.51%

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The CME's Daily Delivery Report showed that 56 gold and one whole silver contract were posted for delivery on Tuesday.

Despite the JPMorgan-sponsored smack down in gold yesterday...the GLD ETF added 337,962 troy ounces...and SLV showed no change.

The U.S. Mint finally had a sales report worthy of the name this month. They sold 15,000 ounces of gold eagles...4,000 one-ounce 24K gold buffaloes...along with another 476,000 silver eagles. Month-to-date sales show that the mint has sold 18,000 ounces of gold eagles...4,000 one-ounce 24K gold buffaloes...and 651,000 silver eagles.

It was another busy day over at the Comex-approved depositories on Thursday. They only received 3,077 ounces of silver, but shipped 1,334,791 troy ounces of the stuff out the door. The numbers are worth the look...and the link is here.

Yesterday's Commitment of Traders Report showed that the Commercial traders increased their net short position by 2,158 contracts, which is 10.8 million ounces. There was almost no corresponding change in the technical fund long position which I was delighted to see...and it was the small traders that were on the long side of the trade against the Commercials.

The Commercial net short position in silver now sits at 236.5 million ounces. The '4 or less' traders hold 201.4 million ounces of that...and the '5 through 8' traders are short an additional 66.9 million ounces. The 'big 8' in silver are short more silver than the entire net short position, which means if they weren't there, the remaining small traders [Ted Butler's raptors] would be net long in the Comex silver futures market.

There are 45 traders that hold short positions in silver in the Commercial category. If you subtract the 'big eight' you're left with 37 traders. Using Grade 3 arithmetic, each one of thirty-seven traders, on average, holds 654 Comex short contracts in silver, which is 3.27 million ounces. It should be obvious to anyone where the real price control lies...and I'll have more to say about that when I get into the Bank Participation Report.

Anyway, in gold, the Commercial traders increased their net short position by 10,359 contracts..which is a bit more than a million ounces on the week. The Commercial net short position [the Commercial long position minus the Commercial short position] as of the close of trading on Tuesday, September 6th, stood at 22.8 million ounces.

The '4 or less' Commercial traders are short 14.6 million ounces...and the '5 through 8' traders are short 5.0 million ounces...so you can see that the bullion banks aren't anywhere near as short in the gold market as they are in silver.

And, in case you've forgotten, the 'Big 8' Commercial traders in both gold and silver are all bullion banks.

The September Bank Participation Report, which is data extracted from Tuesday's COT report, showed that less than 4 [probably 2] U.S. bullion banks were short 24,584 Comex silver contracts...and held only 725 long contracts. That works out to 119.3 million ounces held short by two U.S. banks...and I would guess that at least 95% of that short position is held by JPMorgan.

Compared to August's BPR...these two U.S. bullion banks actually increased their net short position by about 1,100 contract during the prior month.

Now for the [probably 12] foreign banks' positions in Comex silver. These 12 banks held 3,096 long contracts and 2,781 short contracts. So, between the twelve of them, they are net long 315 Comex contracts...or 1,575,000 ounces. This is barely a rounding error in JPMorgan's entire silver short position!!! I would also bet that the lion's share of the 2,781 contracts held short by non-U.S. banks is held by the Bank of Nova Scotia...and maybe one other bank.

But it matters not. The foreign banks are all bit players in this...and the 800 pound gorilla on the short side of the Comex silver market is JPMorgan...and that's exactly what this report shows.

But the report showed a substantial change in the U.S. banks' short position in gold...as the four U.S. banks reporting, decreased their short position in gold by 22,000 contracts...or 2.2 million ounces. As of Tuesday, these four banks were net short 84,354 Comex contracts in gold...or 8.43 million ounces, down from 10.64 million ounces in the August report.

The eighteen non-U.S. banks actually increased their Comex short position in gold by about 3,700 contracts....and these eighteen banks are net short 38,286 Comex contracts...or 3.83 million ounces as of Tuesday.

¤ Critical Reads

Bank of America is doomed, says Chris Whalen

This dour outlook has nothing to do with the company's operating businesses, which Whalen thinks are fine. In fact, says Whalen, there's no need for the bank to be restructuring them and firing thousands of employees [40,000 is the latest estimate] to improve its bottom line.

The part of Bank of America that's not fine, in Whalen's view, is the ongoing liability from the mortgage underwriting that Bank of America's subsidiaries did during the housing bubble. The litigation exposure from this could be so humongous, Whalen argues, that it will bankrupt the company, forcing regulators to step in and restructure it. And Whalen doesn't think the country should wait for that day.

This story was posted over at posted over at businessinsider.com early yesterday morning...and I thank reader U.D for sending it along. The link is here.

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Obama's Job Package 'a Complete Joke' - Mark Faber

The package is “another complete failure of Keynesian economics and corrupt interventions,” Faber told CNBC.com on Friday morning.

Not too many shades of gray here. I note that the story, which was sent to me by reader Craig McCarty, does not include the video of the interview...only a transcript of the highlights...which are well worth the read...and the link is here.

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Marc Faber Interview at King World News

This interview was posted early yesterday...and I get the impression that the actual interview was done earlier this week. I haven't listened to all of it, but it's probably more than worth your time. Needless to say, the subject of gold and silver comes up. The link to the KWN interview is here.

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Economic gloom piles pressure on G7 finance talks

France has called for a “coordinated response” to the global debt crisis in the run-up to Friday’s meeting of G7 countries in the French city of Marseilles late Friday afternoon, following major falls on world stock markets in recent weeks.

G7 finance chiefs meet on Friday under heavy pressure to take action to revive flagging economic growth and calm the biggest confidence crisis in financial markets since the global credit crunch.

Well, it's "print, or die" time...and the world's stock markets have already passed judgment. Both gold and silver were in the process of doing that as well, until 11:00 a.m. in London yesterday morning. I thank Roy Stephens for this story that's posted over at the france24.com website yesterday...and the link is here.

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Here Comes The Non-Boring Weekend: G7 Says "Central Banks Ready To Provide Liquidity As Required"

The G-7 is in full panic mode. The organization for the prevention of harm to the Status Quo was expected to release a communiqué possibly over the weekend, but the speed with which one was dropped for mass circulation is stunning and confirms that its members are in full meltdown as the weekend comes. It is now certain that the G-7 will attempt some major intervention over the next 48 hours to inject a last dose of hope into capital markets, or else the Monday open will be an epic collapse.

This story was posted over at zerohedge.com yesterday...and was sent to me by reader 'David in California'. It's worth the read...and the link is here.

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World Entering 'Dangerous New Phase': Lagarde

Christine Lagarde, the managing director of the International Monetary Fund, warned that the global economy is entering a "dangerous new phase" on Friday, ahead of the G7 summit in Marseilles, France.

She warned that both advanced and emerging economies faced key economic challenges, and that governments must "act now" to stop further contagion.

"Policymakers should stand ready, as needed, to take more action to support the recovery, including through unconventional measures," Lagarde said.

I wonder what 'unconventional measures' they're going to dream up? The story is posted over at cnbc.com...and I thank reader Scott Pluschau for sharing it with us. The link is here.

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Markets take fright as ECB official quits in bond row

The top German official at the European Central Bank [ECB] is to leave early due to a conflict with the bank's policy of buying euro zone government bonds to combat the currency bloc's debt crisis.

The euro fell, and shares tumbled in Europe and on Wall Street on the shock development, which laid bare the rift inside the central bank over the handling of the worsening debt crisis and could undermine German public support for the euro.

This story was posted in the Irish Times yesterday...and was sent to me by Roy Stephens. The link is here.

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Market Chatter Of Greek Default Over The Weekend

From colleague: trader friend just hit me with the following: There is “Chatter” in the market of a Greek Default this Weekend - and their CDS is over 400 wider… Soc Gen is off 7% on exposure - German CDS more expensive than UK's - despite the ballooning in the CDS prices for Lloyds and RBS.

Here's another zerohedge.com story that's well worth your time...and I thank Phil Barlett for sending it. The link to this very short read is here.

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As Greece Denies, Germany Begins Greek Default Preparations

Literally seconds after the Greek finance ministry announce that any rumors of a Greek default over the weekend are absolute rubbish (we wonder who would admit such rumors?), we get the following from Bloomberg: "Chancellor Angela Merkel’s government is preparing plans to shore up German banks in the event that Greece fails to meet the terms of its aid package and defaults, three coalition officials said. The emergency plan involves measures to help banks and insurers that face a possible 50 percent loss on their Greek bonds if the next tranche of Greece’s bailout is withheld, said the people, who spoke on condition of anonymity because the deliberations are being held in private.

This is another zerohedge.com story...and this one is courtesy of Roy Stephens. The link is here.

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Parliament approves French participation in EU's Greek bailout

The Senate on Thursday voted to approve French participation in an EU financial aid plan for Greece just a day after its approval by the lower house, making France the first European country to give formal legal backing to the bailout.

"The next thing is for the Greek government and parliament to fully put into action the modalities of the plan that concern them and that they apply the programme as defined by the European Commission," Budget Minister Valerie Pecresse has said.

Something tells me we ain't in Kansas anymore, Toto...

This AFP story posted over at france24.com is another Roy Stephens offering...and the link is here.

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South Korea’s Producer Prices Rise 6.6%, Fastest in Four Months

Prices gained 6.6 percent in August from a year earlier, after a 6.5 percent gain in July, the Bank of Korea said in a statement in Seoul today. They increased 0.3 percent from July.

Consumer prices in South Korea increased at the fastest pace in three years, even after policy makers boosted borrowing costs three times this year and the government imposed price controls.

You can't make this stuff up...as this sort of [hyper] inflation is coming to a country near you.

I thank reader Bob Fitzwilson for sending this very short Bloomberg story along...and the link is here.

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John Embry audio interview now posted at King World News

Yesterday, or was it the day before, I posted a KWN blog with John Embry...and Eric sent me the entire interview in the wee hours of this morning...and the link is here.

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Sky's the limit for precious metals now, Eric Sprott tells King World News

Fund manager Eric Sprott today told King World News that the precious metals mining shares have separated from the general equity markets, going up while the rest are going down, and that the sky is the limit for gold and silver, what with currencies, government debt, and banks causing problem after problem.

The link to the KWN interview entitled 'Eric Sprott - from Here Silver is a 30 Bagger to $1,200' is here...and I thank Chris Powell for providing the introduction.

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Against stupidity, the gods themselves contend in vain... -- Friedrich Schiller [1759-1805]

Today's 'blast from the past' is an old chestnut from about forty years ago. It's one of my favourite songs of all time. The video has a time burn in it...but that matters not, as it's worth watching...and it's the music that really matters anyway. The link is here.

Yesterday's net volume in gold was around 255,000 contracts...and silver's volume was up there at 39,000 contracts.

As I mentioned a couple of times in this column already, the powers that be hammered the precious metals because of all the horrific political, economic and financial news that came pouring out of both Europe and America in front of the G7 meeting that's now underway in France this weekend.

Here's the 1-minute tick chart [over a three hour period] for the big 11:00 a.m. gold take-down in London yesterday morning. It looks very similar to the chart I posted here a couple of days back.

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And here's the same chart for silver.

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We're awfully close to crunch time...and as I've said more than a few times...we've come to the end of the road for the world's economic, financial and monetary system as it currently exists. Unless they pull a gold-backed currency out of a hat on the weekend, we're done for.

But IMF chief Christine Largade spoke of "unconventional measures". One has to wonder what that might include.

Before signing off for today...and the week...I'd like to point out that now is the time to either re-adjust your portfolio...or get fully invested in the continuing major up-leg of this bull market in both silver and gold...and I respectfully suggest that you take a trial subscription to either Casey Research's International Speculator [junior gold and silver exploration companies], or BIG GOLD [large producers], with all our best [and current] recommendations...as well as the archives. A subscription to the International Speculator also includes a free subscription to BIG GOLD as well. And don't forget that our 90-day guarantee of satisfaction is in effect for both publications.

I'd say that the safety catch is now off the world's financial and monetary system...and I await for whatever "unconventional measures" that show up...maybe starting when gold and silver open for trading on Sunday night at 6:00 p.m. Eastern time.

Enjoy what's left of your weekend...and I'll see you on Tuesday.