Sunday, July 31, 2011

Priceless Walmart moment

Stalemate in Washington as clock ticks

From: Euronews | Jul 31, 2011

Less than 24 hours after the US Senate rejected a Republican plan to end the country's debt stalemate, the House has returned the favour, throwing out a Democrat bill.

Optimists say this opens the way for real negotiations to avoid a catastrophic default.

But frustration is clearly growing.

Democratic Representative Sander Levin commented to the House: "This is a disgraceful moment. What you're doing with this bill is to undermine thew chances for compromise. That's what you're doing."

Press TV - World News with a difference

On The Edge - The Pan Asian Gold Exchange

by on Jul 30, 2011

In this edition of On the Edge, Max Keiser interviews Ned Naylor-Leyland from Cheviot Asset Management about the new Pan Asian Gold Exchange (PAGE), and what it means for global currency and commodities markets.

David Morgan: Silver, Gold And The US Dollar

Is the US just a series of loosely co-joined holes?

Max Keiser: 'America will lose its sovereignty'

Saturday, July 30, 2011

Alex Jones and Bob Chapman

Clarke and Dawe - The Greek Economy

Gerald Celente: 'Deal or no debt deal, the debt still exists'

From: RTAmerica | Jul 29, 2011

The debt standoff continues and still lawmakers cannot come to terms on a deal. August 2nd is the day that the US is supposed to default and many are concerned on how this will affect the US's AAA rating. Gerald Celente, publisher of the Trends Journal, tells us the numbers don't lie.

US House OKs, Senate Nixes 11th-hour Debt Plan

From: AssociatedPress | Jul 29, 2011

Shrugging off warnings from President Barack Obama that it won't resolve the crisis, House Republicans muscled through a new plan to raise the debt limit, but the Senate promptly scuttled it.

Obama: Multiple Ways Out of Debt Ceiling Mess

Stupid is as stupid does

Why most Americans will never own gold is that they can't count to 1600, let alone 5000.

A sign at a Walmart checkout

Europe, the US debt ceiling and the fundamentals of gold demand - HSBC

HSBC precious metals analyst, James Steel looks at the likelihood of increased volatility in the gold market and the continued growth in emerging market demand in the wake of the macro economic turmoil with Geoff Candy of here

Gold showers over all other asset classes

Gold has just hit a new all time intraday high north of $1630/oz in early trade in New York.

Robin Griffiths on Gold and Liquidity

Robin Griffiths discusses Gold, markets and liquidity with Eric King of King World News....listen hereLink

Friday, July 29, 2011

Weekend Chillout

This weekend's chillout is inspired by the carnival of the US debt ceiling talks, hopefully as in the song the carnival is over very soon.

The Seekers ~ 'The Carnival Is Over' 1967

Silver in Your Bandages and Copper in Your Pillow

By Dr. Jeffrey Lewis:

The value of industrial commodities to human health is well documented. Silver is used in medical settings where its anti-microbial benefits prevent illness from spreading. It can be found in creams, catheters, and even bed sheets. Copper, the metal which leads to most silver production, is found in anti-wrinkle creams, and even new pillows meant to curb signs of aging while you sleep.

As the health benefits of industrial benefits become more mainstream, the use of both silver and copper in every day products will trend linearly. Already, several companies have created new products which play on the benefits of industrial metals. New socks contain trace amounts of copper, which has proven to be excellent at reducing odors and relieving sufferers of athlete’s foot.

In medical settings, silver is growing in usefulness in bandages. According to the Wall Street Journal, Argentum Medical LLC created a new product which is proven to kill MRSA. Its anti-bacterial properties are, of course, powered by silver. The bandages are naturally more expensive - $.75 vs. $.07 for regular bandages - but the advantages are numerous. Most importantly, MRSA is expensive to treat, but bandages which cost only 75 cents are not expensive in the least.

Niche products aren’t just for the active or hospitalized; a new company promises that their silver-infused mattresses can kill dust mites, reduce allergens, and improve your quality of sleep.

The Emerging Trends

Whether or not new copper and silver products will catch on with consumers and find a special place in every home remains to be seen. However, one thing is certain: a small increase in demand for silver does result in exponential price growth.

Additionally, there is no real way to make worthwhile the time it takes to recycle silver used in textiles for socks, mattresses, and bandages. Once used, the silver will be left to rest in a landfill, not in a recycling facility. Each ounce of silver consumed for disposable purposes is one less that can be purchased by producers or investors, and one more checkbox ticked for higher silver prices.

Each product is in its infancy, and there are plenty of technologies that present higher consumption potential, and thus better growth opportunities for silver. However, few industrial applications allow for the raw destruction of silver. Most silver used today can be recycled, and much of it is. New applications for silver only temporarily take each gram of the metal off the market. But textiles, medical treatments, and creams are the perfect drain on silver, even if each makes up a minute percentage of total consumption.

Seeing as each product is confined to a niche market with thick profit margins and low total silver costs, each silver-infused product is just as profitable at $40 silver as it would be at $100 silver. If technology has proven anything, it is that it has become far more costly to the world’s limited resources. Silver, being one of the most demanded products in technology sectors, still has a long way to run.

Dr. Jeffrey Lewis

911 The Road to Tyranny - A Film by Alex Jones

China dives deeper into resource race

Takeaway conclusion from this news is that the Communist Party of China thinks that silver and gold will become so rare in the future that it will become profitable to mine the deep ocean ridges for them both.

From: AlJazeeraEnglish | Jul 26, 2011

A Chinese undersea vessel has completed the country's deepest dive, putting China a step closer to the vast resources on the ocean floor.

Oh the irony

From: AlJazeeraEnglish | Jul 27, 2011

The ongoing debt crisis in the US is a painful reminder of Argentina's past when in 2001 the Latin American country defaulted on its debts.

For years, it was the US and developed nations who closely watched as Latin American economies struggled with their debt crises, and in many cases lectured them on what they should do about it.

But now it is the other way around, as this region is enjoying years of economic prosperity.

Economists in Argentina say a potential US default could spark a domino effect in the Americas and they think governments in Latin American countries should be ready.

Al Jazeera's Teresa Bo reports from the Argentinian capital, Buenos Aires.

The Carnival continues

Keiser Report: Ghettofication of America

by on Jul 28, 2011

This week Max Keiser and co-host, Stacy Herbert, look at gold's standing ovation for the Obama-Boehner debt ceiling theater. In the second half of the show, Max talks to Stefan Molyneux about the Fed audit and the debt ceiling.

Thursday, July 28, 2011

U.S. is Losing Economic Cold War with China

From: CaseyResearchFAN | Jul 27, 2011 Sign up for your weekly Conversation with Casey.

This week Stefan Molyneux (our video host) interviews Casey Research Chief Economist Bud Conrad on the current state of the U.S. and global economy, with a specific emphasis on investment implications.

Bud has a more bearish view on nuclear power than Casey Energy Strategist Marin Katusa, so we'll have to interview him soon as well. It's okay that their opinions differ; creative thinking can't occur where different views are not allowed. And Bud's basic analysis is highly consistent with the way Doug himself views things -- which is, in technical economic terms, "pretty darned scary."

Louise Yamada on Gold & Silver

Louise Yamada discusses the technicals for gold, silver, commodities and the US$ with Eric King of King World News.....listen here

Paul Craig Roberts: The Political Theater and The Debt Ceiling Crisis

Edwin Vieira, Jr. on the Fed's Transfer of Wealth

Hotspots: Greece

Max & Stacy's documentary on the finanical crisis in Greece, part funded by ABC Bullion via

Part I

Part II


Australian shares slide

From The Sydney Morning Herald:

Australian shares have fallen 1.3 per cent with investors jittery about the US's political standoff that could force a default or downgrade of sovereign debt.

The benchmark S&P/ASX200 index was down 59.6 points, or 1.31 per cent, at 4477.8, while the broader All Ordinaries index had dropped 59 points, or 1.28 per cent, to 4553.6.

US stocks fell sharply overnight, in the third consecutive day of losses, with the Dow Jones Industrial Average plunging 1.59 per cent and the broader S&P 500 tumbling 2.03 per on

China’s Stocks Decline

From Bloomberg:

China’s stocks fell for the first time in three days as a drop in U.S. durable-goods orders and a stalemate over raising the nation’s debt limit boosted concerns global economic growth will falter.

Industrial and Commercial Bank of China Ltd. sank to a five-month low after banking regulators reiterated controls on loans to local financing vehicles. China Shipping Container Lines Co. dropped 1.2 percent after saying it expects a first- half loss. China Shipbuilding Industry Co. advanced 2 percent after Xinhua News Agency said China is refitting an aircraft carrier for on

First gold-based emissions control technology in commercial production

First gold-based emissions control technology in commercial production with potential to reduce emissions by up to 30%

From the World Gold Council:

Nanostellar Inc., a Silicon Valley developer of advanced materials, has completed the commercialisation of a gold-based catalyst, NS Gold™, which is now in production with one of the four largest European diesel car manufacturers. The World Gold Council has provided an additional investment which will help the company to accelerate wider commercial adoption of NS Gold™.

The inclusion of gold in this technology provides significant benefits for diesel vehicle manufacturers, providing emission reductions of up to 30%, manufacturing cost reductions, or alternatively improved fuel economy. Catalytic converters in cars and trucks use precious metals, such as platinum, to catalyse the oxidation of harmful by-products in the engine exhaust, and thereby reduce noxious emissions. The potential to use gold in this type of application has long been considered by the industry, but until Nanostellar’s breakthrough the technical challenges concerning catalyst durability prevented its use. Following rigorous performance and durability testing, the NS Gold™ catalyst has proven to be fully compliant with the current European vehicle emissions standards (Euro-5) on

Jim Rogers - 'Prepare for a lost decade or more'

From: RTAmerica | Jul 27, 2011

There are 5 days until the default date of August 2nd. How will this affect everyday Americans? While Obama and Boehner play chicken Jim Rogers, co-founder of Quantum fund, sounds off on the economic issue. Is this a political charade?

US debt ceiling talks become a carnival

From: AssociatedPress | Jul 27, 2011

White House press secretary Jay Carney says that time is running out to strike a deal to prevent the first government default in the nation's history. He urged Congress to do what they were elected to do, come together to get a deal done.

Golden Salute to Global Breakdown

Wednesday, July 27, 2011

How are those 'Green Shoots' going Barry?

exponential average in red.
200 day exp. avr. green

Marc Farber - 'The ultimate currency is Gold & Silver'

Marc Faber discusses gold, silver, the US$, Euro and increasing demand for all commodities in Asia with Eric King of King World News......listen here

Investing Under Cloud of U.S. Default

From: AssociatedPress | Jul 26, 2011

They have one eye on Washington and the other on Wall Street. Investors are paying close attention because the contentious debate in Congress could have very serious implications for their 401(k) accounts.

Clock Keeps Ticking During Debt Limit Debate

From: AssociatedPress | Jul 26, 2011

The clock is ticking down to next week's deadline to raise the government's debt limit and avoid defaulting on U.S. loans. Late Tuesday, the House Speaker pushed off a vote on a debt-ceiling measure that is opposed by tea party conservatives.

Two reasons to be bullish on Gold

click on chart for a clearer image

Keiser Report: Mass Psychosis

by on Jul 26, 2011

This week Max Keiser and co-host, Stacy Herbert, look at the one in 66 Americans now classified as psychotic and the matter of 'selective default' as the over prescribed anti-psychotic medication for financial marketss. In the second half of the show, Max talks to Adrian Salbuchi about the similarities between the financial attack on Greece and what happened to Argentina in 2001/2002.

Tuesday, July 26, 2011

Eric Sprott on Silver

From: Transferofwealth | Jul 11, 2011

Dancing with Default

From: RTAmerica | Jul 25, 2011

This past weekend President Obama called for a mandatory meeting to try to come to a resolve to raising the debt ceiling. Top lawmakers met with the president, but was anything settled upon? Are we any closer to a solution? Dr. Paul Craig Roberts, former Reagan Administration Official, sheds some light on the situation.

House Speaker Says Obama Won't Get 'blank Check'

From: AssociatedPress | Jul 25, 2011

House Speaker John Boehner says Pres. Barack Obama wants a blank check from Congress to raise the debt ceiling, but that he's not going to get one. In his response to Obama's televised address, Boehner gave no indication of compromise.

Obama: Default Would Be Reckless, Irresponsible

From: AssociatedPress | Jul 25, 2011

President Barack Obama says the only ones standing in the way of a balanced compromise to the nation's debt crisis are those Republicans in Congress who are insisting only on spending cuts.

'Germany will turn out light on euro'

From: RussiaToday | Jul 25, 2011

While the EU struggles to keep the euro afloat with bailouts for Portugal and Greece, and Spain looks to be next in line for a rescue package, financial journalist Johan Van Overtveldt believes the limit of what the EU can do for the euro is close. Johan Van Overtveldt believes that the EU will keep throwing cash into the failing economies until the Germany reaches its limits.

Jim Rogers on US Debt

Monday, July 25, 2011

Rense & Dr Judy Wood - Where Did The Towers Go?

Obama hosts last-ditch debt talks

From: Euronews | Jul 24, 2011

US President Barack Obama held emergency talks with top lawmakers on Saturday in an attempt to prevent the country from defaulting on its debt.

Obama financially lynched by racist GOP

by on Jul 24, 2011

Greece let out a sigh of relief this week as - after long talks - EU leaders finally agreed on how to help the country avoid defaulting on its debt. Athens will now receive a new bailout worth an estimated 109 billion euros. The plan was agreed after Greece approved severe austerity measures, sending thousands onto the streets in protest. The rescue will also involve lowering interest rates on Greek debt and extending the repayment period. The package also doubles the time given to bankrupt Portugal and Ireland to pay back their own loans. Meanwhile, Spain - which has the highest unemployment rate in the Eurozone - saw thousands of protestors converge on Madrid on Saturday. They camped out in the city centre, after marching from across the country. For more on where the Eurozone is headed RT talks to financial analyst and host of the 'Keiser Report' here on RT, Max Keiser.

Greece Credit Rating Cut Three Levels by Moody’s


Greece’s sovereign credit rating was cut three steps by Moody’s Investors Service, which said the European Union’s financing package for the debt-laden nation implies “substantial economic losses” for private creditors.

Greece’s long-term foreign currency debt was downgraded to Ca from Caa1, the ratings company said in a statement in London today. Moody’s assigned a developing outlook to the ratings and said it will re-assess the credit risk profile of any outstanding or new securities issued by the Greek government after Greece’s debt exchange has been completed.

“The announced EU program along with the Institute of International Finance’s statement representing major financial institutions implies that the probability of a distressed exchange, and hence a default, on Greek government bonds is virtually 100 percent,” Moody’s on

Gold soars on unsolved debt crises

From Reuters Jul 18:

The early gold bug gets the worm

image from

Gold has just set another all time intra-day high in US$ of $1622/oz on the open in the New York Globex market.

Bernie's Bombshell

From Urban Survival:

(Snowflake, AZ) Oh oh, Senator Bernie Sanders (Vermont's lucky) has issued a major statement on how the Fed engineered $16 trillion to bail our not only US but also foreign banks. His website reports in part:

"The first top-to-bottom audit of the Federal Reserve uncovered eye-popping new details about how the U.S. provided a whopping $16 trillion in secret loans to bail out American and foreign banks and businesses during the worst economic crisis since the Great Depression. An amendment by Sen. Bernie Sanders to the Wall Street reform law passed one year ago this week directed the Government Accountability Office to conduct the study.

"As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world," said Sanders. "This is a clear case of socialism for the rich and rugged, you're-on-your-own individualism for everyone else."

Among the investigation's key findings is that the Fed unilaterally provided trillions of dollars in financial assistance to foreign banks and corporations from South Korea to Scotland, according to the GAO report. "No agency of the United States government should be allowed to bailout a foreign bank or corporation without the direct approval of Congress and the president," Sanders said.

The non-partisan, investigative arm of Congress also determined that the Fed lacks a comprehensive system to deal with conflicts of interest, despite the serious potential for abuse. In fact, according to the report, the Fed provided conflict of interest waivers to employees and private contractors so they could keep investments in the same financial institutions and corporations that were given emergency loans.

For example, the CEO of JP Morgan Chase served on the New York Fed's board of directors at the same time that his bank received more than $390 billion in financial assistance from the Fed.

Moreover, JP Morgan Chase served as one of the clearing banks for the Fed's emergency lending programs. In another disturbing finding, the GAO said that on Sept. 19, 2008, William Dudley, who is now the New York Fed president, was granted a waiver to let him keep investments in AIG and General Electric at the same time AIG and GE were given bailout on

Ron Paul - 'The US has defaulted 3 times in the past '


The U.S. government defaulted at least three times on its obligations during the 20th century.

-- In 1934, the government banned ownership of gold and eliminated the right to exchange gold certificates for gold coins. It then immediately revalued gold from $20.67 per troy ounce to $35, thus devaluing the dollar holdings of all Americans by 40 percent. (actually 70%, a convenient typo?)

-- From 1934 to 1968, the federal government continued to issue and redeem silver certificates, notes that circulated as legal tender that could be redeemed for silver coins or silver bars. In 1968, Congress unilaterally reneged on this obligation, too.

-- From 1934 to 1971, foreign governments were permitted by the U.S. government to exchange their dollars for gold through the gold window. In 1971, President Richard Nixon severed this final link between the dollar and gold by closing the gold window, thus in effect defaulting once again on a debt obligation of the U.S. story in full

Sunday, July 24, 2011

And the hit job starts........

Haven't I seen this movie before, a single white guy takes on the world. Lee Harvey Oswald, Timothy McVeigh, Martin Bryant, now this Aryan guy. The elite really do need a new script writer.

Phoneman to the rescue

I felt the blog was getting decidedly dark and morbid, so Phoneman has come to rescue us from the darkness.

Question everything

From: RussiaToday | Jul 23, 2011

Compressing the facts

Does anyone else find the difference in the damage done to this building above in Oslo, by a suspected fuel oil/fertiliser bomb detonated in the open and the damaged done the Murrah Building in Oklahoma, again a by fuel oil/fertiliser bomb detonated in the open, a bit odd?

How is it that in Oslo steel reinforced concrete can remain undamaged yet in the US it turns to dust? What doesn't the air compress in the USA? actually with all the hot air most Americans come out with you would think it would compress even more.

Interesting link re The Murrah Building

Oslo attack a false flag?

Alex Jones and Bob Chapman

Is US already defaulting?

From: RTAmerica | Jul 22, 2011

The clock is ticking for the country to default and the government is expected to act quickly. August 2 is the deadline for lawmakers to reach an agreement and raise the debt ceiling. People all over the US are worried of the consequences this could have on the country. Jennifer Depaul, staff writer at Fiscal Times, joins Lauren to discuss the issue.

On The Edge - with Gonzalo Lira

by on Jul 23, 2011

In this edition of On the Edge, Max Keiser interviews Gonzalo Lira from

He talks about Pentagon's "Full Spectrum Dominance" policy. As the name implies, the policy's aim is for the United States' military to control all aspects of a battlefield or as proponents of the doctrine call it, the "battlespace": Air, land, sea, space and cyberspace.

Saturday, July 23, 2011

Silver is Money II

Eurozone debt crisis - 'They want the Gold'

From: PressTVGlobalNews | Jul 22, 2011

Which warning is worse: the one from European Commission president Jose Manuel Barroso, who earlier this week said: a failure to deal with Greece's problems will have "negative consequences that will be felt in all corners of Europe and beyond, or the Greek president, who said Europe is "in danger", or how about the IMF, that a resulting crash might trigger a global recession?

This edition of News Analysis will be discussing the dire economic situation of eurozone countries as EU leaders are meeting in Brussels to do the same.

Marco Pietropoli, Max Keiser and Jeoffrey Hall have joined Kaveh Taghvai to discuss the issue.

Dems Flip Out At Obama For Budget Deal

From: TheYoungTurks | Jul 21, 2011
The Obama White House is backpedaling after Senate Democrats expressed disbelief that that the president was poised to accept a disastrous budget deal from the Republicans. Cenk Uygur explains.

Even the Anti-Christ is bullish on Gold now

'Gold price floor to remain above $1,000 for at least the next decade' - Jeff Christian

Listen to the interview of Jeff Christian by Geoff Candy of Mineweb here

Return of Mass Layoffs a Grim Sign for U.S. Workers

Twin terror attacks in Norway

Friday, July 22, 2011

John Embry - On Gold and Debt

John Embry discusses gold and debt with Eric King of King World News......listen here

John Robb: The Next Stage of Terrorism and the End of Globalism

From: CaseyResearchFAN | Jul 7, 2011

Weekend Chillout

Inspired by the News of the World phone hacking scandal, this weekend's chillout disappears down the rabbit hole to a more innocent time when only the government hacked your phone calls.

ABBA - Ring, Ring

Debt ceiling political Kabuki theater

From: RTAmerica | Jul 20, 2011

Raising the debt ceiling has sparked the furious debate. Congress is playing games with our economic future. Sam Seder, host of The Majority Report, explains how playing chicken with politics could end in a disaster.

Sick to Debt: Euro virus spreads as EU bickers in Brussels

From: RussiaToday | Jul 21, 2011

EU leaders have gathered in Brussels for an emergency summit, on how to come up with the cash promised for a second bailout to Greece. The heads of state are said to be considering a new bank tax to payroll Athens, and stave off a looming default. But with Italy and Spain now showing the first symptoms of the debt epidemic, there are fresh tensions between the attendees. Squabbles have already broken out, with Germany pessimistic about the summit, and France calling for bloc-wide unity. But as RT's Daniel Bushell reports, the in-fighting is continuing, while the Euro's future hangs by a thread.

David Morgan on Silver market manipulation

Chris Martenson interviews Silver Guru David Morgan on the silver and the suspected manipulation of the market.......listen here

Link to Chris Martenson's website

Caught in the act

From BrotherJohnF:

Martin Armstrong - The Fate and Outlook for Gold

The lastest musings on Gold by cycles guru Martin Armstrong.
Click on the images to access the files.



The Global Physical Gold & Silver Reserves Race is the New Nuclear Arms Race

By J.S Kim:

The old Cold War USA-USSR nuclear arms race has been replaced by the East-West Central Bank battle to accumulate physical gold and physical silver reserves. While Western Central Banks and their puppet bullion banks have distracted and goaded private citizens with the invention of fraudulent bogus paper gold and paper silver derivative products, including ETFs more recently, and paper futures contracts for a much longer period of time, they themselves have been making sure to avoid the very fraudulent paper products they have invented and have been diving headfirst into real physical precious metals.

As Central Banks continue to significantly devalue all major global currencies through excessive creation of new supply out of thin air in a digital world where “new money” is never even printed into paper/cotton form but only is created as digital bytes that are sent across international borders, the private families that are the majority shareholders in the world’s most powerful Central Banks have engaged in heavy buying of physical gold in particular, and to a lesser degree, physical silver. In 2010, Central Banks as a group, became net buyers of physical gold after two decades as net sellers. EU Central Bankers became net buyers of physical gold for the first time during the 1st Quarter 2011 since their introduction of the heavily flawed Euro into circulation in January of 2002.

As of April 2011, China was, according to “officially reported” statistics, the sixth-largest official holder of gold, with 1,054.1 tonness, according to World Gold Council estimates. The U.S. was still reported to possess the largest gold reserves at 8,133.5 tonnes. However, all of you know by now that I believe all “officially reported” statistics, whether the statistic is GDP, unemployment, inflation, or gold reserves, to be a charade and mockery of the truth. To this day I am highly skeptical of the US reported reserves of 8,133.5 tonnes, especially since these reserves have neither been independently audited nor independently tested to ensure that they meet good-for-delivery bar status since Dwight D. Eisenhower was the US President in the 1950s. As for China’s “officially reported” holdings of only 1,054.1 tonnes, anyone that takes these reported stats at face value as the truth is a fool for any number of logical reasons. One, China reported that its “official” gold holdings were a constant 600 tonnes from 2003 to 2009 and then reported that it had increased its holdings to more than 1,000 tonnes overnight in 2009. Since China lied about its gold reserve holdings for more than 6 years, one cannot and should not assume that their “officially” announced 1,054.1 tonne level was truthful. Since China made that announcement in 2009, their “official” gold reserve level has not increased at all.

Anyone that believes that China has not accumulated more gold, and lots of it, since that time, does not understand the Chinese government and Chinese bankers. Chinese bankers have been studying the best ways to invest in gold and silver for many years now in preparation for this global monetary war and they realize that one of the best ways to invest in PMs is to own the real thing. Furthermore, there are multiple mechanisms by which China could be secretly increasing their gold reserves out of the scrutiny of the public eye. In 2008, China replaced South Africa as the largest gold producer in the world, but nobody really knows exactly how much gold China produces or how many proven/ probable reserves or how much measured/indicated resources they own. Thus, China could be increasing gold reserves significantly on in-house production alone. Certainly we know that China is increasing its silver reserves through a policy of decreasing its domestic silver exports and increasing its foreign silver imports.

For example, last month, China’s General Administration of Customs reported that its net imports of silver nearly quadrupled year-over-year in 2010 to more than 3,500 metric tons. Also of important note is the fact that in 2010, China exported 1,575 metric tons of silver, 58% less than in 2009, and imported 5,159 metric tons of the metal, 15% more than in 2009. This is a huge change if one realizes that from 2005 to 2010 China transitioned from a net exporter of 2,900 metric tonnes of silver to a net importer of 3,500 metric tonnes.

From 2005 to 2010, China increased its gold holdings in its State Administration of Foreign Exchange (SAFE) more than tenfold from a very small starting point of USD $4.2 billion to USD $48.1 billion. However, China could be increasing gold (and silver) reserves significantly through purchases in its Sovereign Wealth Fund – purchases that are not made available for public inspection or consumption. For China to publicly announce their buildup of gold and silver reserves that would drive up the price of the very commodity they wished to accumulate more of would be akin to then-Chancellor of the Exchequer Gordon Brown’s foolish decision to pre-announce in 1999 that the UK would be selling half of its gold reserves.

Also of important note are the following facts. China only recently deregulated gold in 2003 to allow gold prices in China to mirror international prices. The Shanghai Gold Exchange only opened in October of 2002. In late 2009, the Chinese started making gold and silver bullion easily accessible to its citizens through introducing physical sales of multiple size bars at its banks and China finally legalized ownership of 99.999% pure silver bullion. The Chinese typically have a tendency to buy PHYSICAL gold and PHYSICAL silver, not the fraudulent paper gold and paper silver derivatives invented by bankers to suppress the price of gold and silver. For the first time ever, Chinese citizens will be able to buy silver futures in Hong Kong this week and later in Shanghai; however, since the Chinese are fond of owning Physical metals, perhaps even the majority of Chinese may settle these futures contracts with physical delivery. Furthermore, even when the option to buy gold and silver ETFs in China becomes a reality, the average Chinese citizen may shy away from these products due to his or her propensity for owning real gold and real silver.

For Asians in general, gold and silver have always been money. In Thailand, the word for money “ngen” is also the word for silver. In China, the word for bank combines the characters for “silver” and “movement”. In China not only is private demand strong AND relatively young, but even in India, private ownership of gold bullion bars was not legalized until 1990. Thus, the war between East and West over gold and silver will intensify in coming months and coming years. The objective of the East will be to release the gold and silver price from the clutches of Western price suppression schemes while the objective of the West will be to hoard gold in an attempt to prevent citizens of Western nations from owning the asset that will protect them the most from their currency devaluation schemes.

The current talk in the mainstream financial media about gold being a bubble at $1,600 an ounce and of silver having already reached its top of its long-term peak at $50 an ounce is simply rubbish. A bubble is never defined by high prices, the perception of high prices or even a decade long rise in prices. What defines a bubble is a meteoric rise in price that is not supported by fundamental reasons. For example, the US NASDAQ stock market was a bubble because stocks that had zero earnings were trading at impossible valuations and sometimes double and triple digit dollar values per share. However, the fundamental reasons that have driven gold from $250 to $1,600 and silver from $4 to its current $39 – $40 range are even stronger today than they were at the beginning of this precious metals bull. Therefore, it is impossible for a bubble in gold and silver to exist at their current prices and at this current time.
And for this reason, this is precisely why the global nuclear arms race has been replaced by a global physical gold race. Welcome to the new global war in precious metals.

About the author: JS Kim is the Managing Director of SmartKnowledgeU. SmartKnowledgeU now offers monthly subscriptions to our premium investment newsletter, the Crisis Investment Opportunities newsletter, an investment newsletter that has returned well over a cumulative 200% (on all opened and closed positions) since its launch in June 2007 to present day. Follow us on Twitter here.

Asian investors stricken by gold fever on record price

By Manolo Serapio Jr. and Rujun Shen
Reuters Thursday, July 21, 2011

SINGAPORE -- Gold fever is gripping Asian investors and could spread to central banks as global growth uncertainties tarnish the appeal of other assets, putting bullion on course for more gains but also provoking fears about supply.

Spot gold surged more than $100 in 11 straight days to Tuesday, its longest winning streak in four decades, hitting a record $1,609.51 an ounce, as debt default fears in the United States and Europe drove investors to seek safety.

Gold stayed above $1,600 on Thursday as market watchers remained cautious about the debt situation on both sides of the Atlantic.

Asian giants India and China, the world's two biggest consumers of the precious metal, expect to see demand continue to climb for the rest of the year, as growing wealth and stubbornly high inflation make bullion an attractive asset.

"Record high prices won't scare away investors," said Shi Heqing, an analyst at Antaike, a state-backed metals consultancy based in Beijing.

"Investors are likely to chase the rally and continue to buy gold because paper money feels increasingly worthless and they are worried about inflation."

Shi expects China's gold demand to rise about 20 percent to near 700 tonnes this year from 570 tonnes in 2010 as Beijing struggles to tame annual inflation that hit a three-year high of 6.4 percent in June.

In India, the wedding season in mid-August is expected to drive up sales of gold, a fixture in dowry and gifts.

"The case for gold in the longer term is still very strong. Gold may appeal to new classes of investors who previously avoided the market in favor of more mainstream investments like bank deposits, bonds and equities," said a Singapore-based trader.

"Potentially there's a whole new market for small-sized physical gold bars if these investors lose faith in paper." on