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GOLD

Gold & Silver are awakening from a deep sleep after a year-long price consolidation. While the physical story leans toward growing demand and declining supply, all bullish for the precious metals prices, the paper story continues to reek of strongarms, naked shorting, propaganda, and other devious devices. Prepare for a grand divergence between the physical and paper Gold price, as described and warned in this newsletter for many months. Rumblings continue about JPMorgan being in far more trouble than simply CFTC position limits. They struggle under the gradual breakdown of their derivative machinery that extends far beyond the USTreasury Bond complex, to the currencies and gold market. Renewed hope from August has come for a resurgent price as seasonal factors join with other conditions whereby the bank cartel has weaker hands. Recall the gold cartel has been forced to relinquish over 6000 metric tons in the last six months. The real battleground is with the Gold price in Euro terms, which is pushing for a breakout. That makes sense, since the obvious breakdown is of the European sovereign bonds, the Euro currency, the European big banks, and the Euro Central Bank monetary policy. Notice how the Crude Oil price reveals significant hedging against the USDollar, stubbornly near the $100 per barrel mark despite a fierce global recession. The high cost structure will be maintained, with little relief from relaxation. Recovery will remain an illusion.

The Eastern Coalition has not gone away. They still pursue Gold. Perhaps their agents in acquisition are on European holiday. Soon it is back to the desks at work. Expect a price move toward $1800 very soon. Expect a Silver price move also, as it more clearly has broken out from the year-long consolidation, back over $30/oz. Moves in the two metals could come fast and furious. The Eastern world has consistently been big buyers, but now the Western world is seeking safe haven from the ruin in banks and bonds.