What’s going on here and why the dramatic change in the trading patterns of gold and silver, which surged back along with gold after looking a bit tired all session long? VOILA…

13:11 14Jan10 RTRS-CFTC CHAIRMAN SAYS PLANNED MARCH AGENCY MEETING ON METALS POSITION LIMITS WILL FOCUS ON GOLD, SILVER

13:28 14Jan10 RTRS-U.S. CFTC to consider gold, silver position limits

WASHINGTON, Jan 14 (Reuters) - The chairman of the U.S. Commodity Futures Trading Commission said on Thursday that the agency's planned meeting in early March to discuss possible position limits on metal futures and options contracts will focus on gold and silver contracts. (Reporting by Tom Doggett)
Frank Tang
Journalist
Reuters…

All we need is for investors in the US, and around the world, to take a look at THE FACTS about the gold/silver price manipulation scheme, and what is behind it. Once they go there, they will begin to know what we know and WHY the price of gold (and silver) has to soar to clear the market. Once they realize there is a massive short position in gold and silver, which cannot be covered unless the prices of gold and silver go to much higher levels, the newly enlightened investors will pour into both markets, making The Gold Cartel’s task an impossible one.

It is helpful to keep in mind that GATA has been right about the gold price for a decade now, while most of the mainstream gold world analysts and Planet Wall Street have had it all wrong. It is precisely because we understand the real fundamentals and they do not because they refuse to deal with, and acknowledge, The Gold Cartel.

While it would be significant if the CFTC establishes limits on The Gold Cartel’s short gold and silver positions, it is just important that the subject matter be exposed to the investment world, most of which have no idea what is going on. These hearings, along with GATA’s lawsuit, are big steps in that direction….

The Gold Cartel has been managing a retreat since 2001 because they realized too much gold was getting consumed at too cheap a price. Of course, as we all know, that has not stopped the manipulation, which has been as blatant as ever lately. All they can do is calm down excitement over gold as a GO TO investment. Seems to me they have been very successful in their efforts, as gold is still off the radar screen for most of the American public and for Planet Wall Street in general,…

How Goldman Sachs Made Tens Of Billions Of Dollars From The Economic Collapse Of America In Four Easy Steps

Investment banking giant Goldman Sachs has become perhaps the most prominent symbol for everything that is wrong with the U.S. financial system, but most Americans cannot even begin to explain what they do or how they have made tens of billions of dollars from the economic collapse of America. The truth is that what Goldman Sachs did was fairly simple, and there may not have even been anything "illegal" about it (although they are now being investigated by the SEC among others).

http://theeconomiccollapseblog.com/archives/how-goldman-sachs-made-tens-
of-billions-of-dollars-from-the-economic-collapse-of-america-in-four-easy-steps…

To all; the heads of several banks were paraded before us yesterday by Congress. Of course CNBC reported the dog and pony show as one that that was informative and unlike past queries where nothing got done or resolved. I'm sorry but in my opinion yesterday was business as usual. If I were able to ask questions, I would want to know why derivatives are still growing? I would ask Goldman about their "front running" programs. I would ask Jamie Dimon about JPM's ridiculous short position in Silver. Yes the surface was scratched on bonus's and Goldman's trading against their own customers but Washington again displayed the fact that they are neutered lapdogs for the banking system….

In the CNN article below Gensler says they will be looking at the metals market in March. It is interesting that they are apparently proposing a solution for the metals markets yet after 16 months of investigation they haven’t officially declared what the problem is they are solving! I expect that the CFTC will be responsible for blowing up the metals market (and all commodities) because they are trying to "ration" supply with these position limits. What does rationing tell you about something? It’s in short supply (excuse the pun!). If investors are rationed in precious metal futures they will go to the physical market, which is the last thing the Cartel wants but the CFTC will inadvertently create that scenario. If they think that rationing gold futures will drive investors into treasuries they had better think again.

QUOTE

http://money.cnn.com/news/newsfeeds/articles/djf500/201001141425DOWJONESDJONLINE000591_FORTUNE5.htm

Gensler: CFTC Will Examine Trading Limits On Metals In March…

GOLD/SILVER

Richard Russell has been on a roll of late with some superb commentary on gold:

Gold -- I hear two explanations for gold's rise. I think one or both are correct.

(1) Negative interest rates are a positive for gold. Inflation is now around 2%. Short rates are now around zero. Zero rates minus the 2% inflation rate gives us a negative interest rate of minus 2%. At this negative interest rate the opportunity cost of owning gold is nothing, we're not giving up anything in the way of incoming cash to buy or hold gold. Yet gold is sensitive to the forces of inflation, and when it costs nothing to buy or hold gold and inflation is in the saddle, gold tends to rise.

(2) Interest rates alone do not account for gold's action. There's the matter of gold as money compared with fiat money. Central banks, the world over, fight deflation and recession by creating ever-more fiat currency. This means that the ratio of gold to fiat money is rising -- central banks can expand their currencies far faster than gold can be produced. As the world's total amount of fiat currencies expands, gold tends to rise.

Pressure is now increasing on the Fed to cut back on its money-printing and to raise rates. I've said before that I think Fed chief Bernanke has his ego on the line. Bernanke's thesis is "supply the money, and they will spend it." But America's shoppers were traumatized by last year's market collapse and the accompanying housing disaster. They're in no mood to spend, regardless of how many times the Fed and the administration tells them that "the recession is over, and the rainbow is just over the horizon."…

By Adrian Douglas

…I have recently described what is going on in the physical market to be the equivalent of a "Run on the Bank of the Gold Cartel". Here we have Paul Walker talk of "significant lumpy transactions". What does that mean? My guess is that can ONLY be referring to the physical market and it means some big players have asked for delivery of gold in LARGE quantities. And Walker says this has come at a time when "there has been a degree of illiquidity". What does that mean? The Cartel doesn’t have the gold to meet these large deliveries!

GFMS published their Q2 Report on the Gold Market. I wrote a critical analysis of this report

http://www.gata.org/node/7699

…I pointed out that GFMS, with a blatant manipulation of the statistics, had turned a 2% growth in gold demand to an 8.6% decline! This was because Central Banks had turned net buyers of gold in the quarter and GFMS excluded their purchases from the demand because, in their words, the Central Banks are a traditional source of supply!!!

But from the CEO himself we learn that the gold market is illiquid. Isn’t it disingenuous at best or fraudulent at the worst to turn a 2% demand surge into an 8.6% plunge just when the market is drying up knowing full well their report is widely followed? It also brings into question the motivations of the World Gold Council (WGC) who commissions the GFMS Gold Market reports.

Proving fraudulent intent is difficult, so we will settle for the lesser crime of being a complete moron…

http://www.lemetropolecafe.com/toulouse-lautrec_table.cfm?pid=8288

-END-

Adrian followed up today with:

Where is physical gold going to come from if the Central Banks are net buyers? The Cartel can make as much "paper gold" as the market is prepared to buy but there is a growing element of the demand that is "physical only". The GFMS will no doubt fabricate some numbers that show that huge amounts of "scrap gold" is entering the market but at the end of the day neither hype nor paper will bail out the gold cartel. It will require real metal and they have sold probably in excess of 50,000t of gold that doesn’t exist as well as leasing out more than 15,000t of actual CB gold. 65,000t of gold is impossible to find as it is more than what remains to be mined in the entire world…

A very important milestone has been reached which has not been noted by any analyst to the best of my knowledge. That is that the 200 day moving average in gold has risen above $1000/oz for the first time ever. This is very noteworthy because typically a severe correction will take gold back to its 200 DMA (excluding the extremely criminal and manipulative attack on gold in 2008 when JPM & HSBC sold short 10% of the world’s annual gold production in less than 4 weeks!). This means that we will most likely never see a 3 digit gold price ever again.
Cheers
Adrian

…The so called "Gold Bugs" have been portrayed as lunatics for years when in fact they were right all along AND for the right reasons! It was not luck or a string of good guesses, it was pure nuts and bolts Austrian economics. It was common sense. It IS common sense! If I had just one question I could ask the "Gods of Wall Street" it would be...how can ANY of your paper derivatives have ANY value at all when there are $1,000 Trillion Dollars+ outstanding in a global economy that produces only something like $70 Trillion per year?

Does this make sense? Does anything make sense? It has all become one giant pyramid scheme built atop probably the last one ounce of Gold left in Ft. Knox! Think about it, all the pensions, all the bonds, Social Security, Medicare, your insurance policies, ALL of it is based on a Ponzi/Pyramid scheme or whatever you want to call it (fractional reserve everything?) and the people who have lived within their means and saved in a currency that is real are called the "lunatics".

Jim Sinclair today:

Here are the rules of MOPE: (management of perception economics).

1. MOPE must be carefully timed:

a. The communication must reach the audience ahead of the competing truth.
b. A MOPE campaign must begin at the optimum moment.
c. A MOPE theme must be repeated, but not beyond some point of diminishing effectiveness

2. MOPE must label events and people with distinctive phrases or slogans such as "gold bugs" and "carry trade."

a. They must evoke desired responses which the audience previously possessed.
b. They must be easily learned.
c. They must be utilized again and again, but only in appropriate situations.
d. They must be boomerang-proof.