Beware Of Promises Of Easy Profits From Buying Precious Metals And Other Commodities

Consumers should be alert to companies that sell investments in precious metals and other commodities based on sales pitches claiming that customers can make a lot of money, with little risk, by purchasing metal through a financing agreement. Sometimes these companies offer opportunities to speculate on the price movement of precious metals, or other commodities such as heating oil, without actually taking delivery of the commodity.

The United States Commodity Futures Trading Commission (CFTC) is the federal agency that regulates the trading of commodity futures and options contracts in the United States and takes action against firms suspected of illegally or fraudulently selling commodity futures and options. Over the past several years, the CFTC has taken enforcement action against wrongdoers who lured customers to purchase purported interests in precious metals without taking delivery, through various misrepresentations including claims that they would earn large profits with little risk.

Certain companies advertise on radio, television or internet websites, or make telephone "cold calls," to promote the purchase of precious metals such as gold, silver and platinum. In the CFTC's experience, the advertisements, infomercials and telephone solicitations often promise quick riches - such as the ability to double or triple the customer's initial investment in just two or three months - all with low risk. Companies making such statements typically ask that customers pay only a small percentage of the total purchase price, and also claim that they (or another company) will purchase and store the metal. These companies also pretend to arrange financing for the customer's metal purchase so the customer can obtain a larger profit by controlling a larger amount of metal with their relatively small downpayment. Companies often discourage customers from taking delivery of the metal. These companies often charge a commission for the purchase transaction, a loan origination fee, an interest charge on the remaining balance (which accrues over time), and fees relating to storage and shipping of the metal they pretend to purchase for the customer. Sometimes, not all of these fees are disclosed up front.

lie about or overstate their ability to predict prices or the direction of the metals markets;

fraudulently fail to disclose how much the price of metal must go up for the customer to break even (let alone profit), since hefty finance and storage fees and commissions are deducted from the customer's account before any profits accrue;

falsely claim to be purchasing and storing the metal, when they do not actually do so. Indeed, companies often discourage customers from taking delivery of the metal;

charge phony "storage" fees for metal, when no metal is actually purchased or stored;

charge phony "interest" fees that diminish a customer's account equity to the point where the customer has to deposit additional funds with the company or have his account closed out at a total loss. The interest fees are phony because no metal has been purchased, as promised, and the financing arrangement therefore is fictitious;

fail to point out that, because you are buying on "margin" or with leverage, you will have to send the company additional funds (or sell a portion of your "metal position") if the price of the precious metals moves unfavorably.

If you are solicited by a company to purchase commodities, watch for the warning signs listed below:

Avoid any company that predicts or guarantees large profits with little or no financial risk.

Be wary of high-pressure tactics to convince you to send or transfer cash immediately to the firm, via overnight delivery companies, the internet, by mail, or otherwise.

Be skeptical about unsolicited phone calls about investments from offshore salespersons or companies with which you are unfamiliar.

Prior to purchasing, contact the CFTC (www.cftc.gov) or other authorities, including your state's securities commissioner (www.nasaa.org), Attorney General's consumer protection bureau(www.naag.org/index2.html), the Better Business Bureau (www.bbb.com) and the National Futures Association (www.nfa.futures.org).

Be sure you get all information about the company and verify that data, if possible. If you can, check the company's materials with someone whose financial advice you trust.

Learn all possible information about fees and commissions charged, and the basis for each of these charges.

If in doubt, don't invest. If you can't get solid information about the company, the salesperson, and the investment, you may not want to risk your money

Sometimes companies that solicit customer investments in precious metals (or their purported storage facilities) are located outside the United States, even if they do not reveal that fact to you while soliciting your investment. United States government agencies generally have little or no regulatory authority over entities operating outside the United States. If you transfer funds to foreign firms, or place funds with United States firms that are later transferred to offshore companies, it may be difficult or impossible for you to recover your money. Storing metal offshore, particularly in countries with secrecy laws, might make it difficult for you to verify your investment.

Ask where all companies that would handle your funds are located, where any telephone call you receive originates, where your funds will be deposited and kept, and where the metal will be stored. If possible, telephone the company.

--------------------------------------------------------------------------------

Have you checked whether the company and salesperson are registered with the CFTC or are members of the National Futures Association (NFA)? You can do this easily by calling the NFA (800-621-3570 or 800-676-4NFA) or by checking the NFA's registration and membership information on its website at www.nfa.futures.org/basicnet/. While registration may not be required, you might want to confirm the status and disciplinary record of a particular company or salesperson.

Have you checked with the NFA to determine whether the company or salesperson has been disciplined by commodity regulators?

For other consumer advisories concerning possible fraudulent activity in the commodity futures and options industry, click on the following Consumer Alerts: www.cftc.gov/cftc/cftccustomer.htm.

The CFTC's website also offers general information about trading in the commodity futures and options markets. For example, the CFTC offers brochures on-line, such as "Futures and Options What You Should Know Before You Trade" (www.cftc.gov/opa/brochures/futures.htm ) and "Glossary: The Language of the Futures Industry" (www.cftc.gov/opa/glossary/opaglossary_a.htm). To obtain this and other information, go to the CFTC site map (www.cftc.gov/cftcmap.htm).

Questions concerning this advisory may be addressed to the CFTC's Office of Public Affairs at (202) 418-5080, or write to:

Commodity Futures Trading Commission Office of Public Affairs Three Lafayette Centre 1155 21st Street, N.W. Washington, D.C. 20581

2/6 Gold Is Far More Likely To Explode Before We Get A Meaningful Correction

February 6 – Gold $570.20 Up $3.10 - Silver $9.72 up 1 cent

Gold Is Far More Likely To Explode Before We Get A Meaningful Correction
So appropriate for the The Gold Cartel . . .

Bill,
The last half, "For the wretched," stands alone as an epitaph for the cartel. From, of all places, the Koran. We are all not so different as some would have us believe.

"For the felicitous, this knowledge is totally congruent and harmonious with their own souls, which have been shaped in this world through faith and practice, and hence every increase in knowledge is an increase in felicity.

For the wretched, knowledge of things as they actually are is a searing torture, since it contradicts their beliefs and practices in this world. Every new knowledge - every new self-disclosure, recognized now for what it is - is a new misery."

Koran 39:9

Go GATA! Go Credit Acricole Gold Report/ GOLD RUSH 21 DVD!

Both gold and oil stormed out of the box in Asia last evening with gold up over $4 and oil up over a dollar, presumably due to increased tension over the Iran issue. Before The Gold Cartel lost control, gold would have probably dipped and the commentary would be how gold lost its safe haven status. If we heard that once over the past many years, we heard it a hundred times. The fact that it was really The Gold Cartel forcing the price down went unsaid.

That strength was maintained at the AM Fix which came in at $570.00, the latest key resistance spot for gold to clear.

Is gold on the move again because of Iran? Could be. But compared to the Credit Agricole report, it is relatively meaningless because of its Big Picture implications. Iran might calm down in a blink. For a micro example, the price of oil fell back this morning from last night’s elevated levels ... gold sold off too, yet then stormed back and went up $6+ without oil recovering.

The importance of the Credit Agricole report, following what occurred at Gold Rush 21, cannot be overestimated. As Hugo Salinas Price mentioned last week, this is a HISTORIC document, just as Gold Rush 21 was a HISTORIC conference.

The entire gold world and investment world now has been put on notice that the central banks have less than half the gold than what they have been telling people. What you have here is a FRAUD perpetrated by the IMF (who instructed member central banks to account for leased gold as gold reserves) and The Gold Cartel. They have been found out by their own super establishment kind.

We know the pro-gold faction in Germany is well aware of GATA’s gold arguments as they published them in 2000 in a stunning two part story in the nation’s business newspaper, Frankfurter Allgemeine Zeitung:

http://www.lemetropolecafe.com/pfv.cfm?pfvID=1129

***

What do you think this pro-gold faction in Germany is doing with this Credit Agricole report? What are the odds that everyone in the Bundesbank and those who want to sell some of Germany’s gold will receive a copy? How about other central bankers who have already been duped by The Gold Cartel into selling their nation’s gold at ridiculously low prices? How many more want to commit a "Brown’s blunder," – as in England?

Then, think of the buy side. Now that the investment world is JUST beginning to learn what The Gold Cartel did and that the central banks have half (or less) the gold they say they have, how many more BIG TIME investors (hedge funds, etc.) will want in? When you fully realize what the cabal did, and they don’t have the gold they say they have, it is not hard to imagine gold reaching $2,000 an ounce, which is ONLY around its old 1980 high in inflation adjusted terms.

MIDAS will be pounding away on the importance of this report as the weeks go by.

Now to the market consensus situation. Last week the Market Vane consensus put up a warning sign as it topped 90%. These technical developments are important to monitor. However, Adrian and I both felt this particular red flag for the gold bulls was not significant for the following reasons:

*There is no corroboration of the market being overbought at all. Matter of fact, it is actually the reverse. The Market Vane consensus number is almost solely based on the chart pattern, which is, obviously, very bullish.

*Seems about 80% of the gold pundits, and even people I know, are calling for or warning of a correction.

*The COT report revealed specs more willing to go short at these price levels than buy.

*The Comex open interest is not expanding like it would if there was too much spec froth out there.

*As mentioned for some time now ... Few people are analyzing this market as an end to a FRAUD, a massive deception. The Gold Cartel has lost control of their rig. This is NOT a normal bull market. The Credit Agricole report confirmed GATA was right all along. The bad guys are meeting as you read this to figure out how they are going to extricate themselves from a growing nightmare.

*The public cannot even spell gold yet. That is all to come.

*The Café Sentiment Indicator which finally was catching fire, tanked from a 7 or 8 to a 3 this weekend! No interest … all because gold and the shares fell one day. That is pathetic.

*Many of the smaller golds still are not responding that much to the gold move. This is further proof of the short-term bearishness of many of the gold pundits and of the continuing lack of interest in gold by the general public.

An example why the Credit Agricole gold report is so MEGA. Our STALKER source just called. The Credit Agricole report has been shown to a few of his clients. One, with many millions in cash, immediately bought $100,000 of bullion and is contemplating buying more. Another, after reading the report, wants in too, but is waiting for a correction to do so.

This is MOST important to appreciate. As this report circulates around the world its cumulative impact will build and build, and so will the desire to own physical gold. This has DOOMED the bad guys.

The gold open interest rose 1749 contracts to 347,372. That is a surprise as far as I am concerned.

The silver open interest rose a hefty 3820 contracts to 132,856. Silver remains a mystery in the short term. It should explode, yet doesn’t.

The overall volume today on the Comex was extremely light. Word was a fair amount of the Comex brokers stayed home (hungover from Super Bowl parties). This is a plus from our standpoint, as it may reveal how tentative the bears are about pressing their case at these price levels. However, the volume was heavy near the highs of the day. GOLDMAN "Hannibal Lecter" SACHS was the featured seller along with HSBC.

The surest way to have gold tank would be to predict it CAN ONLY go up. That would be the kiss of death. Besides, predicting corrections has not been my forte the last 7 years (it is hard to get bearish when you believe gold is going to more than $2,000 per ounce). However, the evidence suggests gold needs to go much higher before it gives us a meaningful correction.

Meanwhile, as gold moves up more and more veteran gold players (and pundits) are taking their chips off the table waiting for gold to correct. This is classic for a roaring bull market. How and when do you get back in this market if it keeps going?

Once again, gold moved on its own. The dollar rose .42 to 90.16 with the March euro falling .58 to 119.92. After all the Iranian hubbub, crude fell 27 cents to $65.11 per barrel.

Thus, since Gold Rush 21, gold has rallied $134 per ounce, while the dollar has risen 3 from 87 to 90 and oil has dropped nearly $3 per barrel. What does that tell you?

Gold Rush 21 was the catalyst which changed the gold market for decades to come and the Credit Agricole/Cheuvreux gold report will eventually prove to be the final nail in the coffin of The cowardly Gold Cartel.

The John Brimelow Report

TOCOM, India there for Bulls: Bears need C. Banks

Monday, February 06, 2006

Indian ex-duty premiums: AM $3.14, PM $4.16, with world gold at $572.40 and $569.40. Adequate, and ample for legal imports. The Bombay Stock Exchange closed at yet another record high today (up 2.44%) and the Reserve Bank had to intervene aggressively to hold down the rupee – not enough to offset the weaker price of world gold in the afternoon.

It appears that India, the world’s largest importer, is poised to tolerate world gold at $570. This is important in gauging the timing, and magnitude, of any pullback.

The highest silver prices in India, on the other hand, were appreciably (12c +) below world prices, without even considering duty.

Apart from being a near-neighbor of Iran, India has a large minority of Muslims and is sensitive to trouble from this quarter. Maybe this is a factor too – at least in encouraging acceptance of the new world prices.

China re-opened, having been closed since January 27th. The Shanghai Gold Exchange showed discounts to the world price of $1.20-$1.74. This was $1 or so less than the previous close, even though world gold was $13.45 higher, and if sustained would be impressive. There is, however, no evidence that the Chinese are in any way driving this rally.

TOCOM is a slightly different story. This morning the Japanese found world gold down $2.60 and looking bedraggled, but the yen also weaker and looking even more dubious. The latter influence won: on volume equal to 37,236 Comex contracts (+14%), open interest jumped 5.6 tonnes (or 1,792 Comex equivalent), the active contract closed up 12 yen; world gold went out $5.25 above the NY close at $572.45. Mitsubishi’s data implies the public added 5.9 tonnes to their long: the House speaks of "good Public buying". Gold’s friends got some help from the Japanese today: and it may be significant the yen has weakened somewhat more since the Tokyo close.

A fairly serious and somewhat successful attempt to reverse the gold trend was seen in NY on Friday. ScotiaMocatta reports:

"aggressive selling came into the market from dealers catching a number of traders positioned long. Gold went into a free fall, as there was only light scale down physical buying in the market. On the day a low price of 565.00/565.50 was posted before bargain hunters appeared…"

However, on volume of 65,265 contracts open interest rose 1,749 lots (5.4 tonnes), suggesting that much of the selling effort was shorting. The GLD ETF added 2.1 tonnes.

Sentiment notwithstanding (MarketVane’s usually tenacious gold reading dropped a steep 3 points as a result of Friday’s action and of course gold shares were hard hit) it appears the buyers are not faltering at this level.

Those using traditional market maps were shaken by Friday’s CFTC data. The net spec long fell, despite a $10.20 rise in gold. UBS said this was

"continuing the theme of higher gold prices and smaller speculative positions that has been the case since the start of December. This is further evidence of the changed nature of the gold market with different players involved in the rally in gold that has been the case over the past few years." HSBC was even more outspoken:

"Even Friday’ s CFTC Commitments of Traders data, which showed a 800,000oz fall in the total net long speculative position on the Comex gold contract, has been seen in a bullish light. If the market can absorb such a weight of selling, then just imagine what will happen if the funds begin to reinstate long positions!"

Meantime, the non-traditional market map laid out in the astonishing Cheuvreux report continues to get respectful play in venues normally hostile to "conspiracy theory", for instance The MiningWeb.net

http://www.mineweb.net/columns/curve_ball/880653.htm

and the Australasian Investment Review

http://www.aireview.com/index.php?act=view&catid=5&id=3490

(So far only the enterprising Resource Investor site has a live link:

http://www.resourceinvestor.com/pebble.asp?relid=16712 )

The publication of this report by an orthodox (if French) entity looks likely to be a market force in its own right.

Where are the Central Banks when the bears need them?

JB
CARTEL CAPITULATION WATCH

A blah day for the market. The DOW gained 4 to 10,798, while the DOG gave up 4 to 2258.

The yield curve inversion is widening. The 2-year T note rose 7 points over the 10-year.

10:13 2-year yield rises briefly above 30-year yield
The move is the first such since December 2000. 2-year currently yields 4.6%; 10-yr. 4.53%; 30-yr. 4.61%. Dow +0.08% to 10802.59.
* * * * *

10:02 Bush proposes record $2.77T budget for f06
The budget forecasts $423B deficit in 2006 and $354B in 2007. The 2006 budget deficit was raised from $341B. The budget proposes $459 B ingrants to state and local governments in 2007, up from $449B in 2006. Dollar not showing much initial reaction vs. euro; quoted last $1.197.
* * * * *

Chuck checked in over the weekend:

Bill:
This market is ready to roll and I mean down. The extremely high trading sentiment, and particularly the one in copper means the game is up for the pumpers until stocks move sharply lower. We are breaking down fast in the housing sector, banks and, today IBM. This is quite a cross section. Given the unconscious babbling on the TV about how great the markets look, I think the next 3 or 4 weeks will take a lot of wind out their blabbering. I think that the selling in the senior golds the last couple of days is part of that and the way the market is correcting gold. We should see real relative strength in the mid-sized and juniors from here.

If I am right, we should see a 200-300 point drop one day next week and, most likely, early in the week. You know that the hedge funds will be as lemmings on their departure. Love Chuck

Richard Russell this evening:

February 6, 2006 -- Inflation rising. The yield on the 10 year T-note is 4.54%. The yield on the 10 year TIPS (the inflation-protected 10 year T-note) is 1.98%. The difference between the two yields is 2.56% and rising. This 2.56% is the bond market's assessment of average inflation over the coming 10 years. This is scaring the bond market, and the talk is that Treasuries are "no bargain" now in the face of rising inflation. It also suggests that Bernanke will raise rates again at the Fed meeting at the end of March.

The central banks of the world continue to inflate. Here are the year-over-year increases in the broad money supply: Australia up 9.1%; Britain 12.6%; Canada 7.7%; Denmark 14.7%; Sweden 9.9%; Switzerland 5.6%; United States 7.8%; Euro area 7.3% (statistics from the Economist)…

How about this report below -- Russell

MANCHESTER, Conn.--(BUSINESS WIRE)--Feb. 2, 2006--Cheuvreux, the equity brokerage house of Credit Agricole, the huge French bank, this week distributed a 56-page report that completely endorses in detail the findings of the Gold Anti-Trust Action Committee that the price of gold has been surreptitiously suppressed by Western central banks and that those banks do not have the gold they claim to have.

The report, written by Cheuvreux's mining sector analyst in London, Paul Mylchreest, is titled "Remonetization of Gold: Start Hoarding." It repeatedly cites GATA by name and foresees an "unprecedented" rise in the gold price, possibly accompanied by a spike to as much as USD2,000.

The report's executive summary says:

"We are raising our mid-cycle gold price estimate to USD900/oz from USD750/oz and see the possibility of a spike to USD2,000, or higher. Covert selling (via central bank lending) has artificially depressed the price for a decade.

"Central banks have 10,000-15,000 tonnes of gold less than their officially reported reserves of 31,000. This gold has been lent to bullion banks and their counterparties and has already been sold for jewelry, etc. Non-gold producers account for most and may be unable to cover shorts without causing a spike in the gold price.

"There is a supply deficit in the gold market of around 1,300 tonnes per year before any central bank selling and perhaps 700 tonnes per year after 'official' sales but before covert selling. This compares with world gold mine output of only 2,500 tonnes per year. Some central banks, notably Russia, are starting to buy gold.

"Gold acts as an early warning of potential crisis such rising inflationary/deflationary pressures and general confidence in paper currency, especially the U.S. dollar.

A strongly rising gold price could have severe consequences for U.S. monetary policy and the U.S. dollar. History suggests that gold always wins against an inflating paper currency (that is, one subject to excessive supply growth).

"Gold and gold mining stocks are poised for an unprecedented rise in prices and profile. Investors in UK/European equities need to assess the implications for their portfolios. ..."

The Cheuvreux/Credit Agricole report details GATA's findings in Chapter IV, "Analysis of the Gold Market," and concurs in them as "broadly correct."

"No financial house in Europe could be more part of the establishment than Credit Agricole," GATA Chairman Bill Murphy said today, "and now its endorsement of GATA is circulating among other big financial houses in Europe and around the world.

"This evokes what Adam Fleming, former chairman of Harmony Gold, now chairman of Wits Gold, said at GATA's Gold Rush 21 conference in Dawson City, Yukon Territory, Canada, last August, just hours before the current sharp rally in gold began: that just a little investment demand could take the central banks out of their gold 'in the blink of an eye.'

"A LITTLE investment demand? Credit Agricole's brokerage house has just declared: Start hoarding!"

Gold Rush 21, Murphy said, "was truly historic and decisive. It gathered the world's top experts on gold to spell out, explain, and publicize the gold price suppression scheme, and the conference issued the Dawson Declaration, an appeal for free markets in the precious metals as a matter of basic human rights."

A two-DVD set of the proceedings of the Gold Rush 21 conference, including a dramatic 25-minute video summarizing the conference, produced by the brilliant Vancouver videographer Trevor Johnston, can be obtained through this Internet link: http://www.goldrush21.com/

The Cheuvreux report on the gold market can be obtained at GATA's main Internet site here:

http://www.gata.org/CheuvreuxGoldReport.pdf

"As for gold itself," Murphy said, "you can get some from coin and bullion dealers, but as the Cheuvreux report gets around, there may not be much left."
***

Another bummer for The Gold Cartel:

09:19 GMT, Feb 06, 2006 Latest Headlines...

China Gold Association to set up first domestic gold investment fund

Shanghai. February 6. INTERFAX-CHINA . The China Gold Association (CGA)plans to set up China's first gold investment fund this year, a senior official said Monday.

"The Chinese government will strongly support the gold sector this year. Gold companies need a professional investment team with large funds to protect their interests in the gold market," he said.

http://www.interfax.com/4/127502/news.aspx

***

Rhody on the lease rates:

Hello Bill:
Gold lease rates were mixed this morning, leading to no change in the overall pattern. The spread is the same and the changes that did occur were in the middle terms.

Silver on the other hand, had significant increases in the near terms that flattened the rate curve and will likely lead to an under-performance in the spot market relative to gold as this metal hits the market.

Platinum and palladium showed minor increases this morning.

Over on COMEX, there were 188 contracts delivered in gold bringing the total so far this delivery month to 5,550 contracts (555,000 oz).

Total gold stockpiles are now 7.3 Moz, so the first 6 days of February has seen delivered 7.6% of total COMEX gold stockpiles. To be totally accurate, this percentage of stockpiles has changed ownership, but has not been removed from stockpiles.

http://www.kitco.com/market/lfrate.html
Regards, Rhody.

Fine input on the Credit Agricole gold report by Robert Blumen:

Hi Bill,
I did a short blog entry on the CA report: http://blog.mises.org/archives/004649.asp Robert

Feedback from a fellow Café member on the Credit Agricole report:

Bill
Good OMEN.........this blew me away....
www.Gold-Eagle.com posting
(Fullgoldcrown
Feb 05, 15:16

.......after watching a series of explosions last nite through our northern window..presumably transformers taken out by ice laden falling trees..and..On awakening to no power this morning...I found an old battery powered portable radio...fumbled in the dark to switch it on...and honest to Gold....the first words I heard were..."The really big news in the financial world this week was ..the Credit Agricole report on the Manipulation of the gold market..which agrees with what Bill Murphy of the Gold Anti Trust Action Comittee..GATA..has discovered.....etc......I was absolutely bowled over....apparently this program is on 640 am. weekly in Toronto at this time slot....but I never listen to A M radio..never this station for sure...talk about attracting what you think about....for once I had no internet conection....but still somehow I got the news I wanted to hear.....booga booga.... Go GATA Go

***

Adrian:

http://www.iht.com/articles/2006/02/05/news/allies.php
Bill,
The US has suddenly got an urge to take Russia to task on human rights issues. This is the same country that abused prisoners in Abu Ghraib, the same country that has secret detention centers to torture terrorist suspects, the same country that holds prisoners of war in a foreign country, that is under embargo, to keep the press away, the same country that illegally spies on its citizens, the same country that has squashed GATA’s attempts to be mentioned in the US Press, the same country that removes Ms Sheehan from the public gallery during a State of the Union address because she is wearing a politically unacceptable T-Shirt, the same country that outs an undercover spy and blows the cover on an anti-terrorist intelligence network because her husband exposed fabrication of intelligence.

Is human rights really the issue or the fact that Putin has declared he is amassing the most lethal weapon known to the USA…."GOLD"?
Cheers
Adrian

Jesse:

Profit Bubbles: Keeping Two Sets of Books
Now playing at Jesse's Charts

http://www.geocities.com/arthurcutten/jesse.html
David Icke's Lecture on Satanism in the US and Bohemian Grove
http://mp3.rbnlive.com/download/Bohemian%20Grove%20David%20Icke.WMV

***

As a college sophomore, I spent three weeks at the Bohemian Grove’s summer encampment outside the Russian River in Northern California. A memorable experience to stay the least. Art Linkletter was the Master of Ceremonies. Never will forget the orchestra playing Stanford and University of California fight songs in a cement Bowl in the middle of the Redwood Forest, with colored beams of lights shining on them. The alums of each school each got up and tried to outsing the other. It was stirring.
Then there was a fun Ray Bolger (Wizard of Oz) who gave me finger once riding by in a truck with the guys (no women allowed).

On increasing demand for silver:

Hi Bill,
A good friend of mine is the head technician at a large local audio equipment manufacturing company whose products are sold internationally. He has purchase some gold and silver from me over the years and when the topic of silver came up he informed me that as of July, any product that is shipped into Europe must be lead free. That means his company can no longer use (the traditional) lead based solder and will have to switch to a combination of tin and SILVER solder. Typically, he said, all circuit boards are "wave soldered" with a lead based solder and all of the circuit boards (theirs and those of any company who plan to sell their products to Europe) will soon have to be manufactured using - you guessed it - silver solder in the very near future. His company, in fact, has already made the change. Tin and silver are the only replacements for lead, he said, and he suggested that a LARGE amount of silver would be consumed due to the new lead free requirements.

Think of all the silver that will be needed on all the circuit boards and all of the soldered components and all the products involved. This is no small off-take. He thought that soon all markets would require lead free products, but regardless, the economics of changing an assembly line to use silver instead of lead for the large European market meant that all large manufacturing companies would most likely use silver solder on their products to all global markets since it would be easier to standardize than to have different parts, circuit boards, etc. for different markets.

It looks like a lot of silver is going to be consumed due to this regulation and I have not heard or read a word about it.

I am so glad that you and Chris are finally getting the respect you deserve. I have embraced your ideas for the past 5 years - personally and in writing - and there are probably quite of few of my readers who thought I was nuts too. Your newfound "credibility" give me credibility too, as my message has been your message since gold was in the $270s.

Have a beer, enjoy the Super Bowl and you gotta love the great golden-start to the new year!
Best,
David Schectman

In case you missed it:
Dear Friend of GATA and Gold:

Thanks to GATA's old friend and Netherlands correspondent Willem Middelkoop for reporting that his country's business television network, RTL Z, broadcast a report Friday about the Credit Agricole / Cheuvreux report endorsing GATA's findings about the suppression of the gold price by central banks.

You don't have to be able to read Dutch to makem out some of the words in the RTL Z report:

"Goudprijs," "gemanipuleerd," "Cheuvreux," "goudprijs naar minimaal 900 dollar," "2000 dollar,""centrale bankvoorraden," and "Internationaal Monetair Fonds," among others -- practically everything, it seems, except "Greenspan es beeg eedyut." But maybe that will be in one of tomorrow's RTL Z dispatches.

The RTL Z report even includes an Internet link to a copy of the Cheuvreux report.

You can find the text of the RTL Z report here:

http://www.rtl.nl/(/financien/rtlz/home/)/components/financien/rtlz/2006/weken_2006/05/03-goudprijs.xml

See ... the word IS getting around, and if the gold price-rigging scheme isn't quite finished, it IS exposed, its days are numbered, the big bad guys have been found out, and the manifesto of the philosopher William James is going to be vindicated again:

"I am against bigness and greatness in all their forms, and with the invisible molecular moral forces that work from individual to individual, stealing in through the crannies of the world like so many soft rootlets, or like the capillary oozing of water, and yet rending the hardest monuments of man's pride, if you give them time. The bigger the unit you deal with, the hollower, the more brutal, the more mendacious is the life displayed. So I am against all big organizations as such, national ones first and foremost; against all big successes and big results; and in favor of the eternal forces of truth, which always work in the individual and immediately unsuccessful way, underdogs always, till history comes, after they are long dead, and puts them on top."

Don't look now, but we're not dead, and still history is coming.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc

--END-

More:

Credit Agricole's Brokerage Says: GATA is Right, Start Hoarding Gold - Hartford

http://hartford.dbusinessnews.com/shownews.php?newsid=60408&type_news=latest

Adrian on the way it is:

What a week! I feel exhausted just having so much gold info to process!

The latest Dennis Gartman comments are stunning. The great thing about the Café is that everything is on record. This is what Gartman said on April 25, 2005

QUOTE-
Finally, while on gold, we find it fascinating that even as we are bullish of the metal the "gold bugs" are angry with us for we are not willing to accept their notions of conspiracy amongst the central banks and monetary authorities, nor are we willing to accept their theories of collusion, black helicopters, malfeasance et al. Messages left with our office last week from the "bugs" called our position on gold "intuitively insulting," or "idiotic," or "uncommonly stupid." We find the "bugs" all the more fascinating, for even when one agrees with them on the direction of gold, unless one agrees with them on all things, one is wrong. Ya' gotta' love'em! END

Now if you ridicule people for being conspiracy theorists and state publicly that you do not agree with their conclusions it would suggest that you think you possess a superior knowledge or have access to alternative data.

In the case of Dennis Gartman he now admits that this is not the case.

In today's Midas you quote him

QUOTE Our old friend, Bill Murphy (who heads GATA... whose basic thesis regarding nefarious trading activities by central banks, bullion dealers, Wall Street firms, et al we rather obviously and very consistently reject out of hand, but whose long term bullishness of gold we do indeed accept...-END

To "reject out of hand" means that you prejudiciously refuse to even give consideration to such things. However, he later concedes that:

QUOTE-"We are not nearly as versed on the minutia of gold lending operations as is GATA and Mr. Mylchreest. That is their life; ours is a broad overview of the markets generally.-END

So now he admits that he does not have GATA’s knowledge or data, and so never was in a position to intelligently discredit the GATA findings. But sadly, as is often the case, ignorance is not an impediment for many people to denigrate the painstakingly detailed research and conclusions of others, if it happens that those conclusions are at odds with the way they would like the world to be.

In view of the fact that those that endorse GATA’s findings number Sprott Asset Management, the Russian Central Bank and now Credit Agricole, Dennis Gartman has at least had the gumption to recuse himself from the debate.

We should bear him no ill will. He has waved the white flag.

There are still many other "Dennis Gartmans" out there who have not yet seen the light
Cheers
Adrian

From South Africa this morning:

Morning Bill,
In South Africa, Mark Mobius of Templeton Emerging Market Funds gets hero status press coverage, often because he is bullish on South Africa's prospects and reputedly controls billions of US$.Here is an extract of an interview posted on moneyweb.co.za. Gold will go higher because of central bank demand and investment interest from China and India. All very basic provided the spot market can handle these newcomers to a market already experiencing a supply side deficit of 1,500 tonnes per annum. Why can't these "educated" commentators do their simple sums and realize that superficial ,throwaway analysis and comments like this just cannot be right?.If the substance of Mobius's comments is well founded, then the impact on the spot gold price has to be explosive.Such a glib prognosis that gold may "plateau higher",given these newly identified demand streams, has to be predicated on the (unstated) assumption that the (now breaking down) equilibrium of the gold market over the last decade will continue to be maintained by the ongoing clandestine annual feed of 1,500 tonnes of leased central bank vault gold to the spot market. How can these "experts" have such a blind spot to the enormity of the assumptions that they (unwittingly ) underwrite.One more time Bill, just remind us again of how much vault gold can reasonably be expected to hit the spot market this year (that is excluding the Wahington Agreement 500 tonnes,which may not even be a "given" anymore.

Mobius gives his views on commodities, gold, SA

Dikatso Mametse
Posted: Mon, 06 Feb 2006 08:00 | © Moneyweb Holdings Limited, 1997-2005

Certain experts reckon that commodity prices have reached their top, while others believe that we are in a super cycle.

One such expert is the manager of Franklin Templeton Emerging Markets Fund Mark Mobius.

Speaking on Moneyweb Radio last Friday emerging markets expert Mobius said that commodities will stay at a plateau that is much higher than it was historically because of supply and demand. ( Click here for the full interview)

"The demand coming out of China, India, in other places, is going to sustain the prices of these commodities. We are already seeing a number of corrections in prices. Palladium has come down, steel has come down and a number of other commodities, tin has come down. So we can expect corrections along the way but, as these corrections take place, they will find a level which is higher than the historical average," he said.

Mobius added that we would continue to see gold at a higher plateau because of the demand coming out of the central banks.

"I get the feeling that, for example, the Chinese central bank would like to diversify out of US treasuries and have a little bit more gold, so that any additional inflows they have, in addition to the demand for jewellery out of China and India, are continuing to increase. So the prognosis for gold is pretty good."

And with oil prices at high levels, Mobius says that he is interested in Sasol, and companies like Sasol that are quite reasonably priced.

Mobius says that South Africa has great prospects for growth and that there is still value in the market.

"We’re not selling, so we think that there is still value in this market. Of course the market has gone up quite a lot, but earnings have also gone up so, if you look at it in terms of price: earnings ratio, price to book value, or dividend yields, they are still within reasonable ranges," he says.
Regards
Nicholas Biezanek

On Mining and Bolivia:

Bill,
The situation for mining companies in Bolivia may have just improved with the announcement of the new government's cabinet. Here is an excerpt I located. FWIW, the writer of this article is not pleased by the turn of events. Mining shareholders, on the other hand, will welcome the news:

"The key Ministry of Mines was handed to Walter Villarroel who defected from the rightwing UCS to jump on the Morales bandwagon. His appointment was denounced by mining leader Cesar Lugo because of Villarroel's previous stint in government in which he helped to dismantle the Bolivian Mining Corporation (COMOBOL) and for privatizing one of the biggest iron mines in the world. He has also been attacked for supporting previous neo-liberal President Carlos Mesa and promoting private co-operatives rather than strengthening state enterprises under worker control."*
Best wishes,
Peter R.

This Barrick story came out last week. With the extent of the real amount of gold out on loan now exposed to the gold/investment world, it makes it more poignant. According to Barrick, almost half of their hedge book is devoted to this project. Should this project get in trouble, Barrick will be in even worse trouble than they already are with that book many billions underwater.

Barrick vs Bachelet

New Chiliean president likely to oppose Canadian gold mining company's plans.

Dateline: Monday, January 30, 2006

by Stephen Leahy

The controversial, billion-dollar Pascua-Lama gold mine project, located on the Chile-Argentina border and requiring the removal of Andean glaciers, may begin construction this year despite strong opposition from environmentalists.

Pascua-Lama is one of the world's largest untapped sources of gold ore, with the potential to produce 17.5 million ounces.

Canada's Barrick Gold Corporation owns the mining concession for Pascua-Lama and for 3000 square kilometres in the surrounding region. The company, which recently became the world's largest gold producer, plans to begin construction of the 1.5-billion-dollar project this year, despite public protest inside and outside of Chile.

http://www.straightgoods.ca/ViewFeature6.cfm?REF=68
ECU Silver (ECU 70 cents Cdn, down 2 cents) continues to come up with stellar drill results ... one after another (for the press release, please go to www.ecu.ca later. Their CEO, Michel Roy:

Dear Shareholders,
The real significance of these assay results is that we continue to confirm that the veins in the Tres Aguilas sector have vertical continuity. Some of these veins have been opened on the 14, 15, 15.5, 16, 17 and 17.5 levels giving them a minimal vertical extension of approximately 300 meters, and all of them have excellent grades in gold and silver with variable concentrations in base metals. The Company have purchased more mining equipment in recent weeks to accelerate the underground development in that area with the objective of having the 5 known veins opened on level 14, 15, 15.5, 16 and 17 before next summer.

For other new veins, extensions of veins at other mines, specific exploration targets such as the “skarn model” or the deeper extensions of the Tres Aguilas sector, the current drilling program will address those issues one by one. Initial targets being tested are in the Santa Juana mine area and the Tres Aguilas sector and results will be forthcoming in the near future.

Truly yours,
Michel Roy

Partial press release:

ECU Silver Mining Inc. (the “Company”) is pleased to announce assay results from drifting on the 16th level in the Tres Aguilas area of the Santa Juana mine. These results were compiled from the extension of the newly discovered fifth mineralized vein on the 17th level, the “A4” vein (see Stockwatch Jan. 19 and 23, 2006), which was also found to extend on to level 16 (see Stockwatch Jan. 30, 2006).

The results outlined in table 1A below were obtained from 18 meters of drift driven along the “A4” vein on level 16. This section, near the Tres Aguilas fault, clearly demonstrate a high calcite content with high values in gold and silver averaging 0.52 meter grading 23.05 g/t Au, 647 g/t Ag, 0.17% Pb, 0.09% Zn and 0.65% Cu. Again we see a strong association between copper and silver. The vein has been opened along strike for another 32 meters and assays are pending.

*oz Au-eq is gold plus silver converted in gold at a 60:1 ratio (base metals excluded)...

***

The senior gold shares performed admirably, ... rising early ... selling off when Goldman stopped the gold market at its highs ... then rallying late to close not far off its highs of the day.

The XAU gained 4.05 to 151.80 and the HUI rose 9.60 to 341.89.

Gold investors and pundits out of position may find it harder and harder to put those positions back on without paying up ... maybe way up.

Gold, silver and the shares remain THE historic investment opportunity of a lifetime!

GATA BE IN IT TO WIN IT!
MIDAS

Appendix

Hi Bill,
Congratulations to GATA on the brilliant DVD. I have only had time to review two or three hours at this time . I loaned it to the stock broker next door. He is reviewing the DVD. He works for a well known Main Street broker.

Although he is in his mid to late 50s I get the feeling he is new to the PMs. Yesterday he said he had a client call who asked him if he should sell 15000 double eagles. He asked me, the local podiatrist, what to do. I told him to hold. If I had been prepared for the question I would have told him to advise his client to accumulate! Not used to brokers asking me for advice.

The broker recently moved here from Alaska. One of his clients is reporting sharply rising land values near mining properties west of Anchorage. Ed
Sent wirelessly via BlackBerry from T-Mobile.

Great DVD by the way...
Any chance that a Blockbuster could pick up on this at some point? I know they have a big series on Gold called Gold! - The History of Man's Greatest Obsession

http://www.blockbuster.com/catalog/DisplayMovieSpecialOffers.action?
channel=Movies&subChannel=sub&movieID=135339&displayBoxArt=true

Might be a long shot, but I think once word gets out this could be a HUGE option to reach the masses even further.

Possibly other avenues like Peerflix might work to help spread as well.

Keep up the great work and stay the course.
-Josh

Bill, I received my Gold Rush 21 DVD yesterday and I am about a third of the way through it and I want to tell you it is downright awesome. Your passion is evident along with Chris'. I watched James Turk and Reg Howe and I am finally beginning to understand the derivative thing, how it works. You guys are to be commended for all your hard work.

With my limited resources the only thing I can do is help get the message out through my blog. I have posted this article today:

Tripe from the Economists! http://www.movermike.com/posts/1139076432.shtml

by movermike

I have continued to read tripe from the economists out there. This one from Macroblog called Jumping the Inflation Gun.

In the clouds around the silver lining department, the reported downside of yesterday's otherwise pleasing employment report was the relatively strong wage growth in January, a development that presumably brings with it renewed fears of inflation.

Here we have an employment picture (as I outlined in Nonfarm Payroll Data is Out) that is underperforming previous recoveries despite tax cuts and "prime the pump" outlandish spending at all levels of government, AND the "cloud" may be wage pressures, because presumably of the low unemployment. Then we get this quote:

from MarketWatch:

[Al Goldman, chief market strategist at AG Edwards] said a tight labor market worries the central bank as companies have to offer higher salaries to attract workers, which leads to wage inflation: "And the Fed is in business for one reason only, and that is to try and control inflation."

No it's not, it's in business for only one reason only and that is to make money for the banking cartel. The Fed has inflated the currency to the point since 1971 that the USD has lost 95% of its value. It has not "controlled inflation". Inflation is not defined by rising prices, but a creation or increase in the money supply that manifests itself in the appearance of rising prices. The prices are mot rising, the currency is being depreciated. The FED has done a great job managing inflation at 5 to 7% a year, and a great job hiding its work in the CPI by all sorts of manauvers like hedonics and substitutions of rent for housing ownership and the selling of the "core" rate of inflation.

Don't be deceived. As Steven King would say, "We have a shit storm headed towards us!" It will involve much higher prices of gold and a collapse of the currency!

Mike Landfair
Mover Mike http://www.movermike.com/

On confiscation:

Hello Bill, Late last year I sent my senator a letter voicing my concerns over the gold confiscation issue. I recently received a letter from Senator Judd Gregg (New Hampshire, dated Jan 12th 2006)in response to my letter. Here is the applicable paragraph

As you are aware, the value of the dollar has fallen over the last year. Several factors, including the national debt and economic uncertainty, have contributed to this decline. You specifically mention your concerns with the federal government seizing private gold and silver holdings. As you know, the federal government is allowed to seize these private holdings, as well as any other financial instrument should the U.S. government declare an emergency. The government has the authority to do this during a declared time of war through the Trading with the Enemy Act of 1917 and during times without a declared war through the International Emergency Economic Powers Act of 1977;however, the government has determined that the use of gold and silver is no longer meaningful to commerce. Please be assured that I understand your concerns with these powers and I will certainly follow any such actions taken by the government, keeping your concerns in mind as your concerns are well taken.

That is verbatim and on United States Senate letterhead. Interesting choice of words. I leave it to you to decide if it is newsworthy. I can fax you a copy of the letter if you would like. Regards, Bob Dutton

Re: Hugo's Message on Delivery of Physical Metals

Dear Bill and Chris,
I have to say I heartily agree with Hugo. Only by demanding delivery, will we break this manipulation cycle. Since this cartel has its hands on the printing press controls, it does not care if the US Gov and taxpayer takes their losses. As "Lender of Last Resort" the Fed is adept at passing their burden onto the taxpayer. However by putting into CIRCULATION, the very metals being manipulated, it will overwhelm the bastards. Plain and simple. They obviously are able to manipulate the market still to a large degree, and frankly, I have to wonder if the remaining 15,000 tons of gold means much to them either as I am sure that the situation we are in now, was most assuredly researched into their risk models when they formed the London Gold Pool. However I think we are at a tipping point obviously, and we will eventually win this game. We just need to speed up the progress. Hugo is pushing something VERY dear to my heart, a silver currency. Our organization is doing the same thing except we have silver as well as gold (and certificates and electronic) that circulate. We have been pushing the metals down to the street level, ensuring physical demand down to the currency user since 1998. We are doing this knowing FULL well that it will be the physical delivery that overruns these guys. The Liberty Dollar now has over $17 million in circulation in the US, Canada and Europe, and it is being used on a daily basis by tens of thousands of individuals and businesses. Any one can do it and profit from its use as well, the system is incredibly sophisticated with anti counterfeit measures many times superior to the FRN as remarked by the Fed themselves.

I urge you guys to check out the Liberty Dollar, watch the Learning Channel Special on the Liberty Dollar http://www.libertydollar.org/tlc/libertydollar.wmv and realize it is one of THE best methods we have to get physical delivery happening EN MASSE and lessen the effects that this looming wall street "correction" ...ahem, will have on the average family in America.

All the best, Karl Reile Community Currency Association

Alan Greenspan once had a conscience...

"In the absence of the gold standard, there is no way to protect savings from
confiscation through inflation. There is no safe store of value. If there were, the
government would have to make its holding illegal, as was done in the case of
gold.... The financial policy of the welfare state requires that there be no way
for the owners of wealth to protect themselves."
Alan Greenspan

Still using Federal Reserve Notes?
www.CommunityCurrencyAssociation.com

Returning Buffalo to the People, One Dollar at a Time.
www.LibertyDollarBuffalo.com

Hi Bill,
Congratulations to you, Chris and Gata. In the years since I have been a subscriber, I have watched you lead the fight - correctly - against hedging, and lead the debate - correctly against the lying and misinformation of the cartel and central bank gold suppy.

While I know there has been occasional mention, and one of your frequent contributors has written specifically, the next big issue could be illegal short selling. I think most of your subscribers do not really understand the nefarious and likely illegal nature of short selling today. Most people feel it is natural and legal, so there is no issue. But there is a huge issue in that short sellers actually increase the outstanding shares, can run fails, and never have to cover. I came to really understand the issue through reading Alan Newman's Crosscurrents at http://www.cross-currents.net/.

If things really heat up with the trapped shorts, you can expect massive short selling in shares. Canadian or dual listing of many shares may make the process even more insidious. In any event, give some thought to this. I think the next great service you can do, may be in this area.
Best,
Mike O'Hallaron
Go Pats (wherever they are)

Hi Bill,
The warning signs (e.g. bullish sentiment as reported by John Brimelow) make the market a little scary right now, particularly if one is working with futures contracts. As far as stocks go, I see no reason to try to play this. Even if we have a significant correction, I doubt it will last for long. The most I could imagine doing is working with a small trading position in stocks while holding one's major position intact.

Although people are worrying about gold "going parabolic, " I think there is another way to see the chart, especially given all the other factors you keep reporting. It could also be that gold is just starting a parabolic rise. I would not be surprised to see another hundred dollars an ounce on this rise, some of the vast investment liquidity start to pile on, and then a major pullback to scare the latecomers silly. If this happens, it will be proclaimed as the "blow-off top" and the end of the gold bull, when in reality, gold will have just finished a "warm-up lap".

Hope you have a great Superbowl Sunday!
Paul

Hi Bill,
I'm sure you already know about it, but just in case, James Turk was on Bloomberg TV this morning (repeated segments) talking about $600-$875 gold soon and even mentioning the Cheuvreux report. He didn't fully explain the corruption side of the story but did talk about the shorts being squeezed. Seems like every day the bubble gets a little closer to the pin, however, I do agree totally with Hugo Salinas Price in that Barrick, the bullion banks such as Goldman Sachs and JP Morgan and the Fed, the Treasury and the US Govt. are all one, essentially. Therefore "paper money" losses mean nothing since they simply print more money. My biggest fear is that the Bush Administration will work a "deal" with the Saudis, China, Russia, India and other non-cartel banks and we will see a sudden selling of more central bank gold (and silver) and at least a pause in buying by the non-cartel banks. It is hard to imagine that the U.S. could give any more concessions to China, but who knows. Perhaps Bush and Congress will make it illegal to produce anything in the U.S. in return for Chinese gold! We have clearly seen that welfare of the U.S. economy and people means absolutely nothing to our "leaders", especially if their necks are in the noose. Gold biggest allies remarkably enough will probably end up being Iran and Iraq. What a perverted world we live in!
Regards, Chuck

10p ET Sunday, February 5, 2006
Dear Friend of GATA and Gold:

Our hero John Embry, chief investment strategist for Sprott Asset Management in Toronto and speaker at Gold Rush 21, has written an essay for Investor's Digest of Canada, "Gold Finally Doubles," which has been posted at Gold-Eagle.

Embry writes: "If gold has disappointed, it is only because the central banks and their bullion-bank cronies have made a concerted effort to suppress the price by surreptitiously dumping thousands of tonnes of gold into the market over the past 10 years while further holding back the price with the extensive use of derivatives.

Now that they are finally getting stuffed, they are reduced to petulant, essentially incorrect articles intended to mislead the public."

You can find Embry's essay here:

http://www.gold-eagle.com/editorials_05/embry020306.html

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

12:25p ET Sunday, February 5, 2006
Dear Friend of GATA and Gold:

The story appended here from the business section of Sunday's New York Times may be interesting for two reasons:

First, it approves investing in gold and commodities while carefully failing to mention the best reasons for doing so, monetary debasement and strains on the
gold price suppression scheme.

And second, it asserts that Middle East oil producers are putting surplus cash into gold, which is exactly what GATA consultant Reg Howe recommended they do at
the Gold Rush 21 conference last August.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *

Have Commodities Become the New Tech Stocks?

By Conrad De Aenlle
The New York Times
Sunday, February 5, 2006

http://www.nytimes.com/2006/02/05/business/yourmoney/05comm.html

Returning to basics has been a major theme in the markets. If investors in the late 1990s took a bold leap into the future with technology stocks -- off a high ledge, as it turned out -- they are now embracing age-old economic mainstays like copper, lumber, oil and gold....
-END

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