• The transaction, equivalent to 8 percent of global annual mine production, involved daily sales from Oct. 19-30 at market prices and is in the process of being settled, the IMF said in a statement yesterday. The average price to India, the biggest consumer, was about $1,045 an ounce, an IMF official said on a conference call. Gold for immediate delivery gained 0.2 percent.
• “The fall in the U.S. dollar seems to be pushing all the central banks to strengthen their portfolio with gold,” said N.R. Bhanumurthy, professor at the National Institute of Public Finance and Policy in New Delhi. “Gold is a safe store of value compared to the U.S. dollar.”
• “The most important thing is that people want gold even at these prices,” said Ghee Peh, head of mining research, with UBS AG in Hong Kong. “There’s good support for prices for now” from the IMF’s disposal of bullion, he said.
• “There seems to be consensus among the central banks that it’s better to cut down on currency holdings and diversify into assets like gold, which has upside potential,” Krishna Reddy, a precious metal analyst at Way2Wealth Commodities Pvt. said in Mumbai. “The Reserve Bank of India gold purchase is a clear reflection of this belief.”
• Gold production has been declining for the past seven years, while demand, particularly the investment demand has been growing steadily,” Way2Wealth’s Reddy said. “Central banks and even ordinary investors want to own more gold.”

The IMF has been openly announcing the sale of approximately 400 tons of gold for some time now – a quick search reveals an article from as long as 18 months ago. In fact one may go so far as to say they have milked the announcement methodically, from at least that time frame to now, no doubt influencing the physical gold market for an extended period of time. As recently highlighted, in some of the more recent announcements, it was discussed that China may consider purchasing the entire 400 tons. China, along with Russia and other Asian countries are prime candidates to pick up the remaining 200 tons. The purchase by the Reserve Bank of India may mark a new trend where central banks are net buyers of gold versus their standard modus operandi – net sellers.

Also today, the Federal Reserve repeated it will keep interest rates near zero for “an extended period” and specified for the first time that policy will stay unchanged as long as inflation expectations are stable and unemployment fails to decline. This communiqué from the Federal Reserve, is equivalent to an amateur attempting to bluff Doyle Brunson with seven deuce off-suit hole cards in a game of Texas Hold’em – suffice to say it’s weak. One short term reaction was that the dollar fell the most versus the euro in two months as the Federal Reserve reiterated its pledge to keep borrowing costs near zero even as its $1 trillion injection into the economy helps revive growth. Longer term, however, smart investors understand that the Federal Reserve is in a box and has no place to go. Since they are at what amounts to 0% already, going lower is obviously not possible – especially since negative interest rates would require paying banks to hold your money! On the other hand, raising interest rates to any market impacting significance, would wipe out government efforts around bailouts and stimulus liquidity injected into the economy over the past year. Banks would quickly begin dealing with a resurgence of the balance sheet blues – Asset Backed Securities (ABS), Collateralized Debt Obligations (CDOs), Mortgage Back Securities (MBS), and other official sounding toxic derivatives exploding.

So it appears that 400 metric tons of IMF gold will never touch the market and the Federal Reserve refuses to come out of its corner in attempt to fight for the US Dollar.

While nothing is ever certain in markets, these recent market dynamics, in addition to an array of sound fundamentals, seem to provide gold a solid foundation in preparation for launch.

UPDATE: Audit the Federal Reserve

http://www.auditthefed.com

• H.R. 1207: Federal Reserve Transparency Act of 2009 now has 309 co-sponsors, up from 308 last week.
• S. 604: Federal Reserve Sunshine Act of 2009 now has 30 co-sponsors, flat from 30 last week.

Peter Schiff On CNBC Fast Money 11-3-09

http://www.youtube.com/watch?v=AX1SP00y_tU

Glenn Beck discusses the economy, inflation, & dollar collapse (10/28/09)

Part 1 – http://www.youtube.com/watch?v=tCTQnxoFVy0
Part 2 – http://www.youtube.com/watch?v=F4DiODl47ps

Ron Paul vs. Michael Moore on Larry King CNN 10/29/2009

http://www.youtube.com/watch?v=1Hn6ad4_FzM

Ron Paul Geithner: Fed Res As Lender Last Resort Contributes to Moral Hazard (10/29/09)

http://www.youtube.com/watch?v=f-ELw3z0BY8

Rogers Says Roubini Is Wrong on Bubbles as Gold, Stocks Rally (11/4/09)

http://www.bloomberg.com/apps/news?pid=20601087&sid=a8fc.G.WUIP8&pos=5

• Jim Rogers, the investor who predicted the start of the commodities rally in 1999, said that Nouriel Roubini is wrong about the threat of bubbles in gold and emerging-market stocks.
• Many commodities are still down from record highs and equity markets aren’t on the brink of collapse, Rogers, chairman of Singapore-based Rogers Holdings, said in an interview on Bloomberg Television today. The price of gold will double to at least $2,000 an ounce in the next decade, he said.
• “I suspect it’s going to go over $2000 some time in the bull market, but depending on what happens in the world it could go much, much higher,” Rogers said. “The old high, back in 1980 adjusted for inflation, would be over $2000 now, just to get back to the old high. So we’ll certainly get there some time in the next decade.”
• In contrast to Roubini, Rogers said the only bubble he sees in the Western world now is in U.S. bonds.
• “I cannot conceive of lending money to the U.S. for 30 years,” he said. “Other than that, I don’t see any bubbles going on, unless he knows something the rest of us don’t know.”

Can gold hit $1,500? (11/4/09)

The price of gold is flirting with $1,100 an ounce. Many other precious metals continue to surge. How much higher can gold go – and what’s it all mean?

http://money.cnn.com/2009/11/04/markets/thebuzz/index.htm?postversion=2009110413

• The price of the yellow precious metal hit yet another all-time high Wednesday. At nearly $1,100 an ounce, you have to wonder just how much higher gold can go in the next few months. Is it $1200? $1300? Heck, is $1500 out of the question?
• Investors around the world have fled the dollar due to worries that the massive amounts of money pumped into the U.S. economy by Congress, the Treasury Department and the Federal Reserve will eventually lead to inflation.
• Gold, unlike silver, copper and many other metals, does not have that much of an industrial use. But gold has often been considered the safest of safe havens when the dollar declines. As a hard, tangible asset of value, some investors buy gold as an alternative to the dollar.
• “On a day-to-day basis, people talk about gold going up because of the dollar or oil,” he said. “But the difficulties in finding significant new deposits is overlooked. Not only do you have to find it but determine how much there is and how you are going to get it out. Bringing new mines to production takes years.”

Could America go broke? (11/2/09)

http://www.washingtonpost.com/wp-dyn/content/article/2009/11/01/AR2009110101704.html?wpisrc=newsletter

• The idea that the government of a major advanced country would default on its debt — that is, tell lenders that it won’t repay them all they’re owed — was, until recently, a preposterous proposition. Argentina and Russia have stiffed their creditors, but surely the likes of the United States, Japan or Britain wouldn’t. Well, it’s still a very, very long shot, but it’s no longer entirely unimaginable. Governments of rich countries are borrowing so much that it’s conceivable that one day the twin assumptions underlying their burgeoning debt (that lenders will continue to lend and that governments will continue to pay) might collapse. What happens then?
• The question is so unfamiliar that the past provides few clues to the future. Psychology is crucial. To take a parallel example: the dollar. The fear is that foreigners (and Americans, too) will lose confidence in its value and dump it for yen, euros, gold or oil. If too many investors do that, a self-fulfilling stampede could trigger sell-offs in U.S. stocks and bonds. People have predicted such a crisis for decades. It hasn’t happened yet. The currency’s decline has been orderly, because the dollar retains a bedrock confidence based on America’s political stability, openness, wealth and low inflation. But something could shatter that confidence — tomorrow or 10 years from tomorrow.

Dollar Falls as Manufacturing Grows; Oil, Copper, Gold Rally (11/2/09)

http://www.bloomberg.com/apps/news?pid=20601087&sid=aGYpGVQ8NdkA

• The dollar slid against high-yielding currencies, led by the Australian dollar, as China reported a surge in manufacturing and investors bet factory production in the U.S. accelerated. Oil, copper and gold climbed.
• The dollar fell most against the Australian currency, dropping 0.7 percent, sending the Dollar Index, which IntercontinentalExchange Inc. uses to track the greenback versus some of the U.S.’s biggest trading partners, down 0.1 percent.
• The dollar’s decline buoyed commodities, while China’s manufacturing report revived optimism that the world’s biggest consume of metals will buy more raw materials. Copper for three- month delivery on the London Metal Exchange rose $45 a metric ton to $6,525. Crude oil for December delivery added 61 cents to $77.61 a barrel on the New York Mercantile Exchange. Gold for immediate delivery climbed as much as $8.35 an ounce to $1,053.76, the highest price since Oct. 26.

CIT Files Bankruptcy; U.S. Unlikely to Recoup Money (11/2/09)

http://www.bloomberg.com/apps/news?pid=20601087&sid=aW_ngoMWF.u0&pos=1

• CIT Group Inc., a 101-year-old commercial lender, filed for bankruptcy to cut $10 billion in debt after the credit crunch dried up its funding and a U.S. bailout and debt exchange offer failed.
• CIT, which filed the fifth-largest bankruptcy by assets, said it plans to exit quickly due to support from bondholders, who voted in favor of a so-called prepackaged plan. None of CIT’s operating subsidiaries, including Utah-based CIT Bank, were included in the filing, and operations will proceed as normal, CIT said in a statement.
• The failure of CIT’s bank-holding company is the biggest measured by assets since regulators seized Washington Mutual banking unit in September 2008. Washington Mutual and IndyMac Bancorp Inc. are other banks with unmanageable debt that sought court protection to wind down their holding companies. Both put their retail banking units in the hands of the Federal Deposit Insurance Corp. CIT became a bank-holding company in December to qualify for a Treasury bailout.

U.S. Bank, NA, of Minneapolis, Minnesota, Assumes All of the Deposits of Nine Failed Banks in Arizona, California, Illinois and Texas (10/30/09)

http://www.fdic.gov/news/news/press/2009/pr09195.html

• The Federal Deposit Insurance Corporation (FDIC) entered into a purchase and assumption agreement with U.S. Bank, NA, of Minneapolis, Minnesota, a wholly-owned subsidiary of U.S. Bancorp, to assume all of the deposits and essentially all of the assets of nine failed banks. The nine banks were closed this evening by federal and state bank regulators, which appointed the FDIC as receiver.
• The nine banks involved in today’s transaction are: Bank USA, National Association, Phoenix, Arizona; California National Bank, Los Angeles, California; San Diego National Bank, San Diego, California; Pacific National Bank, San Francisco, California; Park National Bank, Chicago, Illinois; Community Bank of Lemont, Lemont, Illinois; North Houston Bank, Houston, Texas; Madisonville State Bank, Madisonville, Texas; and Citizens National Bank, Teague, Texas. As of September 30, 2009, the banks had combined assets of $19.4 billion and deposits of $15.4 billion.
• The nine banks had 153 offices, which will reopen as branches of U.S. Bank beginning tomorrow during their normal business hours. Depositors of the nine banks will automatically become depositors of U.S. Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branches until U.S. Bank can fully integrate the deposit records of the nine failed banks.
• The FDIC estimates that the cost of the nine banks to the DIF will be a combined $2.5 billion. U.S. Bank’s acquisition of all the deposits was the “least costly” resolution for the FDIC’s DIF compared to alternatives. The failure of the nine banks brings the nation’s total number this year to 115.

Wilbur Ross Sees ‘Huge’ Commercial Real Estate Crash (10/30/09)

http://www.bloomberg.com/apps/news?pid=20601087&sid=amPXzjQV3nGQ

• Billionaire investor Wilbur L. Ross Jr., said today the U.S. is in the beginning of a “huge crash in commercial real estate.”
• “All of the components of real estate value are going in the wrong direction simultaneously,” said Ross, one of nine money managers participating in a government program to remove toxic assets from bank balance sheets. “Occupancy rates are going down. Rent rates are going down and the capitalization rate — the return that investors are demanding to buy a property — are going up.”
• Ross, the 71-year-old chairman and chief executive officer of WL Ross & Co. LLC, said in an interview on Bloomberg Radio that he would use “extreme caution” before putting money into commercial real estate, especially office space, because properties are losing tenants.

Ron Paul: Let the dollar prove itself (10/30/09)

http://www.cnn.com/2009/OPINION/10/30/ron.paul.fed/index.html

• Recent polls have shown that more than 75 percent of Americans support efforts to audit the Fed, something which my bill, HR 1207, the Federal Reserve Transparency Act, aims to do. HR 1207 has the support of 304 members of Congress, and the Senate version of the bill, S. 604, is supported by 31 U.S. senators.
• Fed Chairman Ben Bernanke has embarked on an ambitious program of monetary expansion, more than doubling the monetary base to almost $1.9 trillion and doubling the size of its balance sheet to over $2 trillion, placing the American economy in a precarious position.
• If all this excess money begins to be loaned out, the Fed risks creating a hyperinflationary crisis similar to 1920s Germany. If the Fed contracts this money, it risks harming the banks it desperately wants to see bailed out.
• It is imperative that the American people know what the Fed is up to, how much money it loans to banks and what types of agreements it enters into with foreign banks and governments. Just about all of this information is exempt from audit or oversight. The Fed’s actions directly affect the value of the dollar, which is coming under increasing pressure from our foreign creditors. If we do not wish to see a complete collapse of the dollar, the Fed needs to be subject to a strict audit of its actions, if not an outright abolition of its charter.
• The long-term strength of the dollar will only be weakened by maintaining the Fed’s monopoly on our monetary system. Our foreign creditors are already moving to dethrone the dollar as the world’s currency.
• The prospect of American citizens also turning away from the dollar toward alternate currencies should provide an impetus to the U.S. government to regain control of the dollar and halt its downward spiral. Restoring soundness to the dollar will remove the government’s ability and incentive to inflate the currency, and provide stability to the financial system. With a sound currency, everyone is better off, not just those who control the monetary system.

Gold to Make New Highs Above $2000, Says Commodity Maven Frank Holmes (10/30/09)

http://finance.yahoo.com/tech-ticker/article/363689/Gold-to-Make-New-Highs-Above-2000-Says-Commodity-Maven-Frank-Holmes

• Gold is likely to make a new inflation-adjusted high before its current bull move ends. That’s the word from Frank Holmes the man behind the Morningstar 5-star rated U.S. Global Investors Gold and Precious Metals Fund, which is up 33% in the past year.
• The journey to new highs will comes with bumps along the road. Holmes predicts several 10% price swings in the near future. But, he firmly believes negative interest rates combined with massive deficits is a recipe for gold to shine.
• What’s his price target? Holmes predicts gold can easily reach $2300 – the inflation-adjusted high it reached in the early 1980s.

China’s ‘Underweight’ Gold Holdings to Increase, Rhodes Says (10/23/09)

http://www.bloomberg.com/apps/news?pid=20601012&sid=alqq_kswlPlM

• China, which is “underweight” on gold holdings, will increase buying as the economy expands, said Jeffrey Rhodes, chief executive officer of INTL Commodities DMCC.
• China’s 1,054 tons of gold represents less than two percent of its reserves, Dubai-based Rhodes said in an interview today. That compares with the international average of 10.2 percent held by central banks worldwide which have under 30,000 tons of the metal, equivalent to about $960 billion.
• “Clearly China, as a percentage of holdings in gold, is underweight,” Rhodes said. “You’d definitely expect China to be accumulating gold in its reserves in the coming years. So the percentage is likely to grow. Obviously it should have a significant impact on demand.“

• There is still nothing constrained about what banks and brokerage houses are doing. They are still leveraged and the credit crisis is not over. We may get a respite over the next nine months, but if $2 trillion in stimulus and increased bank loans are not forthcoming, it won’t work. If the money and credit is put into the system they’ll extend another year and if not the house will come tumbling down. Even if they expand that will be negatively affected by selective higher interest rates, withdrawal of government loans and a cutback in money and credit, which is already in process.
• All of the foregoing will lead to even more volatility in markets. Economies will not improve for any lasting period of time,. All of this will also be negatively affected by the deliberate attempt by elitists to end the reign of the US and European economies. Get ready for ever lower wages in Western economies and permanent unemployment of 15% to 25%, while the transnational conglomerates and the third world prosper. This pandemonium of change will drive investors away from stock and bond markets and into commodities and gold and silver. Wealth preservation and safety will become the watchword by investing. This in part will be caused by falling stock markets, financial crisis and continued monetary disorder. Making matters worse re-flation has been underway since May. The inflation will manifest itself this coming year, as official inflation numbers hit 5% and real inflation rises above 14%. This game is not for everyone, but like it or not we are all in the game.
• The Fed will not only continue to buy government debt, but debt consisting of mortgage securities, commercial paper and credit card debt as they are now doing. Such action by the Fed actually encourages government debt. The thought process is, as in the last two administrations; let the next administration deal with it. Both the administration and the Fed will eventually take down the financial system. Even if proposed legislation is passed to give Treasury some power over the Fed it will mean little. Both entities are controlled by Illuminists. In order to save their skins we will be the recipients of crisis probably at first along the lines of what transpired in Argentina in the early 2000s, then eventually into a Zimbabwe or Weimar situation. The future is all there for one to see, especially for those who have studied history.
• The government is issuing about $250 billion a month in Treasury bills and notes and bonds and that figure increases each month. They tell us the bid to cover is 3 to 1; 2 to 1 is normal, but forget to tell you a good part of that participation is from foreign central banks that are buying Treasuries with swap funds or from primary dealers who assume no risk because the Fed guarantees their risk and profit. In order to assure a smooth auction both silver and gold are taken down, and they rally the dollar. These are temporary actions, which in this case included a lower gold price to help gold commercials on the Comex extricate themselves from in the money options. These are the deceitful actions that even most professionals do not understand. As we predicted gold and silver flattened out and have now resumed their upward movement to $1,200 or $1,250 an ounce where the elitists will make their next stand. After having tested $1,030 this past Wednesday, on Tuesday it’s trading at $1,061 as we predicted. It will now break above $1,070, as silver moves toward $20.00. It is currently $16.41. As usual the CFTC stands by and does nothing as our government rigs the market. Between the CFTC and the SEC there is regulation, except for those who are connected or are elitists. The Fed now shows a balance sheet approaching $3 trillion and that could be $5 to $6 trillion by the end of 2010. That should be enough to take the dollar to 50 or lower on the USDX. At all costs be out of the dollar. Without the existence of the “Working Group on Financial Markets,” gold would already be $2,500 to $3,000; silver at $50 or more and the dollar at 50 to 60. It will all come to pass, just be patient. Let’s see what they pull out of the hat in January when the FASB decrees no more mark-to-model and no more two sets of books. It will be very interesting. Then there is a well Basil II and III to deal with. 2010 will be a nightmare year for financial institutions if their edicts have to be followed. The stock market will truly get slammed. Front-running, naked shorting and black box trading are the order of the day as condoned by our SEC, an elitist appendage. We wonder how investors will view 2010 as some 1,000 banks go under. That is not very reassuring. The intent from its very inception is the nationalization of the US banking system. The Fed busted these banks deliberately to bring us closer to a one-world banking system run by the incompetent IMF, or World Bank. Not only does the investor not understand what is going on but neither do the professionals. It is the socialization of losses for the giant financial houses – banks, brokerage houses and insurance companies. Worse yet they are all broke. It’s like real estate, both residential and commercial, an act of planned destruction to destroy the savings of average Americans and to take down more lenders in a planned demolition of the lending and banking industry. This didn’t just happen; it was planned that way. These moves were planned to deliberately take the US and Europe to its knees financially and economically to force them to accept world government. That is what the coming Copenhagen conference is all about. Those who would sound the bell of truth have been compromised – our economists, analysts and the media almost all who are controlled by the Illuminati. They are all afraid to speak out, because they will lose their jobs and perhaps be banned forever from employment in their chosen fields. This is how the system works, by coercion and intimidation. This silence brings us to the doorstep of great inflation similar to those of Argentina, Zimbabwe and Weimar Germany. It as well includes the abandonment of the dollar as world reserve currency and the introduction of a world trading currency to be followed by a one-world currency. According to the Financial times interview with George Soros last week China has been chosen by the elitists as the successor to America. Including its communist government. You didn’t think that that abandonment of the gold backed dollar on 7/15/71 was an errant event did you? It was the beginning of the planning for the future death of the dollar and the beginning of a complete fiat world of money, whose value was guaranteed by the worst bunch of thieves in history.
• Obama recently approved a 2% salary increase for all federal employees effective January 1, 2010.
• Commerce Secretary Gary Locke was “imprecise” when he said President Barack Obama’s advisers are considering a second stimulus measure, his spokesman said today. Locke, in an interview with Bloomberg Television, said: “If there is to be another stimulus — and that’s being hotly discussed and very seriously considered within the administration as well as members of Congress — it needs to be very targeted, very specific and we need to be very mindful of the deficit as well.”