1. Many people say the bankers/commercials are naked shorting the COMEX yet the regulators do nothing. Others, (who are not anti-gold) have stated publicly that the bankers are not naked short but have offsetting long positions.

Those contracts that they have for financing the mines are very likely a portion of what they can legally claim on their balance sheets as offsetting positions against their shorts with which they "manage" the paper gold price.

Every miner, when they agree to such financing, is financing the banks (putting an asset on their balance sheets) to fight against the price of paper gold and hence what they can get for their product. This whole deal will blow apart some day but it won't be the bankers who walk away with the short straw.

2. I said I wouldn't discuss the inflation/deflation but I guess I will after all, as I thought of a different way of expressing it..

Someone once said and this is my attempt at the quote; it is not precise, That if central bankers ever get control of the monetary system, they will by a successive process of inflation and deflation rob the entire wealth of the society and do it in such a manner that not one man in a million (possibly the quote said a thousand) will understand what happened.

This is absolutely true. The definitions you read in dictionaries have been changed from what they used to be. This adds to the confusion. Colleges in their business courses teach inflation and deflation according to these newer definitions and virtually no one understands what has happened and is happening; precisely as the quote above says.

If we define "good and services" as the economy or GDP; then inflation would be a rise in the monetary aggregate relative to the GDP. The economy or GDP is not and has not been, on average, positive for some time when properly adjusted for inflation. I am not a subscriber but I believe Shadowstats.com would back up that statement. Thus true GDP is at best neutral and likely negative.*

If the monetary aggregate remains the same or increases at the same time the economy, goods and services, shrink everyone screams deflation because the economy has slowed and prices have fallen a bit. They never take into account the fact that the goods and services were horribly mispriced as a result of the bubble. Correcting that mispricing is not deflation.

When you look at the facts, the monetary aggregates have never gone negative. Year over year negative, yes! But not absolutely negative, No! M1 has fallen but it is still positive. I believe it is still in the +(4-5%) range.

There is more money and credit in the system than ever, yet there are less goods and services available as properly corrected GDP is negative. More money chasing the same good and services is inflation by definition. Even the same money chasing less goods and services is inflation. We are and have been experiencing inflation. We have been continually increasing the monetary aggregate and have reduced the goods and services that money is chasing.

The things that we didn't need became horribly overpriced. It was not necessary that everyone own their own home. People did not need a new car every time the old one needed to be washed. That is an area where price and credit have been smashed, but the aggregate is still positive.

Everyday needs have been rising in price and that is why everyone is hurting. People can no longer draw upon (HELOC's) what didn't exist in the first place. Unfortunately prices for things we need will continue to rise because we are still inflating the monetary aggregate relative to the goods and services that we produce. What we collectively produce is the true measure of our purchasing power and it continues to decline relative to the monetary aggregate in our system.

One needs to understand the causes, forget about the "apparent" effects. In a cause and effect relationship the cause forces the effect, eventually. It is because we believe that cause forces effect that we have invested in Tyhee.

P.

*World GDP might be slightly positive and hence our inflation to the world GDP might be somwhat less. But if we continually spend more than we produce (negative trade balance) we must "print or borrow" the money to buy the goods and services. It is a whole new level of complication for this discussion that has to end up in the same place because the world is a closed loop and their are no countries whose policies counterbalance what the US is doing. Most of the other nations are doing exactly as the US has done or they wouldn't be in the debt position that they are.