A Gentle upward slope - No Bubble Spike here

With gold hitting all time highs in nominal US$ there is again ill-informed commentary about a bubble forming in gold. As can be seen in the 10 year US$ gold chart above the gentle 45% degree slope is as expected in a cyclical bull market, with no signs of a bubble spike in prices and resultant blowoff. As in all bull markets 90% of the price rises are made in the last 10% of the bull run and we are no where near that phase in this market.

Central Banking's "Grotesque" War On Your Money

By Adrian Ash: DURING the Second World War, Nazi Germany hatched a plot to flood Britain with fake bank notes.

Working first at the Sachsenhausen concentration camp just north of Berlin, some 140 Jewish printers and forgers made perhaps £132 million in high-quality fakes (some US$650m at the wartime exchange rate, but nearer $6bn today), equal to around 15% of Great Britain's then paper-money supply.

Named after the SS engineer who ran the operation, Operation Bernhard only saw a handful of its counterfeit fivers and tenners reach England. (The Bank of England apparently burnt what it found, along with its records.) Because, "by 1943, the Luftwaffe was almost kaput," writes historian Lawrence Malkin, and so "instead of pursuing their original goal of dropping the counterfeits on England to cast suspicion on real Pound notes, the SS used the fakes to finance its own espionage service."

The Nazis' slave-fake money thus flooded the black markets of Central Europe and North Africa, driving down the street value of Sterling (and spooking the hell out of the Bank of England, which couldn't detect those forgeries which found their way to London). Eventually, through a bizarre twist of fate (and the canny money-launderers of the Jewish underground), it helped fund the post-war flight to Palestine of Holocaust survivors.....read on

Gold actually mentioned in the Main Stream Media

Seems the record gold price has finally woken up the near comatose western media about gold's wealth preservation attributes and the parlour state of the world economy. As usual for such article the best and most informed critique is to be found in the comments section. Please go to the story link and read the excellent comment from "lucdog" and note even this blog's author gets a mention under "totm" :-)

From the UK Telegraph: Gold hit $1,269.45 on the London Bullion Market on Tuesday afternoon, beating the previous record of $1,265.30 struck on June 21.

"Renewed sovereign debt concerns" have driven up gold, said Robin Bhar, senior metals analyst at Credit Agricole bank. Fears of a resurgent eurozone debt crisis are likely to stunt European economic growth prospects this year, the EU warned on Monday.

"The global recovery is still expected to be uneven and is surrounded by major uncertainties," the European Commission said in its autumn forecast, citing "the resurfacing of global imbalances, high debt levels and lingering tensions in sovereign-debt markets".

Gold, whose two main drivers are jewellery and investment buyers, is also regarded as a good store of value in times of high inflation.

Amid rising bullion prices, the International Monetary Fund last week said it was selling gold worth around $403m to Bangladesh. The Washington-based institution has been selling gold as it seeks to bolster its finances amid the global economic crisis.

IMF members agreed in 2008 that the fund could sell an eighth of its gold assets in order to diversify its financial model. The fund is one of the world's largest holders of the precious metal.

Jeremy Cook, the chief economist of World First, the currency broker, said: "The recent upsurge in gold is down to a couple of things.

"Primarily, it's a hedge against uncertainty. Stock markets are still vulnerable and government debt, in some cases, cannot be trusted, so market participants are flooding into the yellow metal as fears over the global recovery continue.

"Secondly, it follows a huge move higher in silver, which is up over 20pc since the beginning of the year on the back of supply concerns." ......link to story

The Western Media Ignores Asian Precious Metal Interest

Dr. Jeffrey Lewis: While all eyes are on India for its annual gold festivals, its neighbor to the northwest is quietly stockpiling millions upon millions of investment grade gold and silver. Chinese gold and silver buyers are out in force, and they want physical metals.

Chinese newspapers and financial media are reporting that buyers are primarily wealthier investors. Prior to the gold and silver rush, buyers were primarily lower income and purchased only one ounce silver rounds or one gram gold pieces. However, today's buyers are reaching out for heavier bars and coins of both gold and silver.

Newer buyers are moving towards silver as a value play. While the traditional silver to gold ratio is anywhere from 15-25:1, today's prices show a discrepancy, as silver trades at a more than 60 times less an equal weight in gold.

Chinese Currency History
Perhaps more than any other nation on the world, China appreciates the value of physical gold and silver as not only an investment, but also as a currency. As recently as the 1920s, Chinese currency was backed by physical metals, and for the thousands of years prior, both gold and silver played a part in both domestic and “international” trade.

If history is any indicator of the present and foreseeable future, silver will play an important role in the move to hard assets. As recently as the fall of 2009, the Chinese government issued a notice in which it suggested precious metals to individual investors. The government backed up its announcement with a cross country media campaign touting the various investment options and sizes that would be preferably to individual investors.

However, outside of Asia, the news on precious metals has been scarce. It was only last week that the Gold Anti-Trust Action Committee or GATA was formally cited by a significant news outlet, the Financial Times, for its work in uncovering illegal price suppression in the commodity markets. That coverage, however, was late. The interview that was cited was several months old, stemming from a discussion that occurred around the same time new events were popping up daily surrounding a whistle blower. Of course, even that news – the news that someone had real evidence supporting suppression claims – was also suppressed in the media.

No More Dry Powder

The mainstream press does not have much more to throw at those who push the idea that gold and silver prices are not only manipulated, but artificially suppressed. The move to physical metals is well documented, and it is only a matter of months before years of global events come full circle. For those who have known about the intricacies of the commodities markets for quite some time, the next few months to years will be undoubtedly profitable. For those just entering the metals market, well, you too still have a very long ride ahead of you. Price suppression is breaking into the mainstream, and when it finally reaches the threshold, we should only expect an influx of mainstream investment dollars and higher gold and silver prices across the board and all over the world.

Ted Butler and silver position limits

Ted Butler has come up with a simple proposal to limit silver contact holding by one entity to no more than 1% of world annual mine output.....read in full

Real IRA says it will target UK bankers

From the Guardian: Banks and bankers are now potential targets for the Real IRA, leaders of the dissident republican terror group have warned in an exclusive interview with the Guardian. Despite having only 100 activists they also said that targets in England remained a high priority.

In an attempt to tap into the intense hostility towards the banks on both sides of the Irish border they branded bankers as "criminals" and said: "We have a track record of attacking high-profile economic targets and financial institutions such as the City of London. The role of bankers and the institutions they serve in financing Britain's colonial and capitalist system has not gone unnoticed.

"Let's not forget that the bankers are the next-door neighbours of the politicians. Most people can see the picture: the bankers grease the politicians' palms, the politicians bail out the bankers with public funds, the bankers pay themselves fat bonuses and loan the money back to the public with interest. It's essentially a crime spree that benefits a social elite at the expense of many millions of victims."......read on

AngloGold to cut gold hedge through share and bond issue

JOHANNESBURG (Reuters) -

AngloGold Ashanti Ltd (ANGJ.J), the world's third-largest gold miner, plans to offer up to 18.1 million shares and issue convertible bonds to cut its gold hedge and benefit from the spot gold price.

AngloGold has chipped away at its hedge book -- one of the biggest among its global peers -- to increase its exposure to the spot price of gold and take advantage of the gold price rally like its rivals.

"Removing the hedge book represents the last phase of the balance sheet restructuring and once completed, is expected to give us full exposure to the gold price, widening profit margins and improving cash flow," Chief Executive Mark Cutifani said.

AngloGold said it would offer up to 15.8 million new ordinary shares and up to an additional of 2.4 million new ordinary shares through over-allotment.

It also plans to offer mandatory convertible subordinated bonds due 2013 which will convert into 15.8 million American Depositary Shares (ADS) and an additional 2.4 million ADSs via an over-allotment option.

The final price of both offerings will be announced after the completion of the bookbuilding process.

AngloGold has cut its hedge book -- gold sold forward or covered by derivatives -- to 2.72 million ounces by Sept. 14 and plans to eliminate all of it by early next year, also by procuring early settlements of all existing contracts that mature beyond 2010.

AngloGold said this would allow it to be fully exposed from 2011 to the spot price of gold and expects to realise higher profit margins and cash flows from 2011 as a result of the low committed prices under existing contracts that would be removed.

The company said outlook for the price of bullion remained robust, supported by strong physical and investment demand and diminishing supply of gold mines globally. (Reporting by Agnieszka Flak; Editing by Matthew Tostevin)

Nine main reasons to push gold, and silver, higher and higher

By Lawrence Williams: Gold expert Jeff Nichols, in a speech last week in Bangkok, Thailand, put forward nine main reasons for gold to rise and continue to rise in the short, medium and long term before, eventually, the bull market will end and the bears may have their day - but he sees this as a long way off yet.

Nichols reiterated his predictions on the gold price which, in the short term, could even be considered conservative in the light of yesterday's breakthrough to new highs as buying pressure exceeded that of profit-takers and those whose interests may otherwise lie in keeping the gold price down. He believes, he said, that "before long, we will see gold hit $1500 an ounce - possibly even before the end of this year . . . or during the first half of 2011." And followed with "Not only will prices move substantially higher in the months ahead - but the uptrend still has years to go . . . with gold very likely reaching $2,000 and eventually $3,000 or even $5,000 before the gold-price cycle shifts into reverse."

The nine major points which bring Nichols to this conclusion are as follows:

· First, inflationary U.S. monetary and fiscal policies - past, present, and future - along with a recession-like economic performance - a "double dip" or worse for years to come.

· Second, Europe's simmering sovereign debt crisis, which has not only undermined the euro's appeal as an official reserve asset . . . but has also pushed the European Central Bank to pursue inflationary monetary policies . . . and has pushed more investors in Europe and around the world to seek the safety of gold.

· Third, continuing - if not growing - interest by the official sector. In particular, the central banks of a number of newly industrialized emerging nations are seeking to diversify official reserve assets into dollar alternatives.

· Fourth, rising long-term saving, investment, and jewelry demand for gold from China, India, and other gold-friendly nations enjoying healthy growth in business activity and household incomes - growth that is likely to continue at least several years.

· Fifth, rising private-sector investment demand in the older industrialized nations reflecting fear of inflation, currency depreciation, and a loss of confidence in governments to deal effectively with today's economic challenges.

· Sixth, the continuing maturation of what I call the "gold-investment infrastructure" - in other words, the development of new gold-investment products and channels of distribution in many important geographic markets.

· Seventh, the relatively small size of the world gold market compared to other capital markets - such as equities or currencies - so that even small shifts in portfolio preferences away from currencies, or equities, or real estate, for example, may have little price effect on these big markets but will have a relatively large, indeed profound, effect on gold.

· Eighth, the recent onset of global food and agricultural inflation.

· Ninth, stagnant world gold-mine production for the next five years or longer..........read on

What Was Safe Is Now Risky…And Vice-Versa

By Jeff Berwick: It is like the entire world flip-flopped 20 years ago.

Twenty years ago communism was still hanging on in the USSR and China still hadn't quite emerged from the Communist fog while the USA was still seen as a bastion of free markets.

Twenty years ago a prudent, conservative financial portfolio would include a mix of large US industrial and bank stocks and government and corporate bonds.

Segue to today and China and Russia, and many of the former Soviet states are, in many ways, more free market than the US. And the US, now, is much closer to being outright communist, with central control of banking, real estate (Fannie May & Freddie Mac), transportation (Amtrack, General Motors), the public education system and with its tentacles intertwined into every facet of American life with rules, regulations, subsidies and taxes.

A portfolio that worked very well for the last 20 years in US stocks and bonds has now gone from being very conservative to extremely risky.

This is never reported to the American people via their government mass media cabal but many of the largest players in the financial markets, including us here at The Dollar Vigilante, have stated, openly, that almost all large western nations will default on their debts and/or promises (Social Security etc) at some point in the near future.....read on

Gold Bullion - An Essential Part Of One's Investment Portfolio

By David Levenstein: Suddenly, as the price of gold is showing signs of strength again, analysts from many major financial institutions are talking about prices going to $1300 per ounce and higher. Yet, a few weeks ago, when the gold price was trading down, they were talking about lower prices in gold. Being able to correctly predict future prices of any commodity is one thing, giving a commentary on the current trend is another. As far as I am concerned I don't know who these analysts are and don't much care either. They all seem confused and unable to see that the primary trend is upwards and that there are certain fundamental reasons why this happening.

Many individuals still have the misconception that gold is used only for jewellery, and have forgotten that gold is also a monetary metal as well as a global currency. It is not a barbaric relic as it is often referred to by analysts who don't understand this metal.

Gold has always had value to humans, even before it was money. This is demonstrated by the extraordinary efforts made to obtain it. Prospecting for gold was a worldwide effort going back thousands of years, even before the first money in the form of gold coins appeared about 700 B.C. The first pure gold coins were struck by King Croesus of Lydia (present-day Turkey) during his reign between 560 and 547 BC and gold coins have continued as legal tender ever since. It changed the world of commerce as the yellow metal became a currency - a medium of exchange with a definite value - replacing barter and other commodities as money......read on