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March 17 - Gold $336.50 up 50 cents - Silver $4.44 down 9 cents

The PTT Roars Its Blarney on St. Patrick’s Day

All war must be just the killing of strangers against whom you feel no personal animosity; strangers whom, in other circumstances, you would help if you found them in trouble, and who would help you if you needed it...Mark Twain

The financial market's trading action in the US is sick, almost beyond belief. As we came in today, the NIKKEI dropped into new low ground at 7871, down 135. Hong Kong also closed with big losses. The dollar was lower by a good amount as the world’s stock markets were under considerable pressure. Gold was limit up in Japan for a while (up $9 from the US close) and up $6.70 before the US stock market opened. What was interesting about this is the summit on Sunday was the most predictable, scripted one on record. There was not one surprise, yet the markets moved significantly in overseas trading as war came closer to reality.

That was over there. We then come to a different planet in its own trading universe: the US financial markets. Most countries do not have a Gestapo-like Working Group on Financial Markets (PPT) that inhibits the free market system we Americans so fondly say we cherish. This goon squad regulates the financial markets to their liking through such banks as Goldman Sachs and JP Morgan Chase. They do what they please, when they please and continually steal your hard-earned money. It is all done for elitist bullion banks and THE STATE. Little guy be damned.

It didn’t take the PPT long to put the fix in again, as they have done so often the past week. From The Café’s Sarge this morning:

http://finance.yahoo.com/q?s=^XAU&d=c&k=c1&c=^dji&a=v&p=s&t=1d&l=on&z=l&q=l

Operations began at 9:45, as usual. 300 point rally from the low on the DOW is just around the corner. Sell gold, buy index futures.

Gold was up $6.60 and the Dow was 70 lower right after the opening. Then BOOM! Gold was hit by The Gold Cartel at the exact same time the stock market futures were bought by the PPT. The supposed reason for the dramatic turn of events was the announcement President Bush was going to speak to the nation tonight at 8 PM. Is there anyone out there with a brain more potent than a grapefruit that did not believe the President was going to address the nation this evening?

Today's rally was no different from the last three triggered by the baseless Bin Laden/Iraq surrender rumors. The PPT needed cover, so they acted accordingly to their own demented criteria, timing their move to the Presidential speech announcement and spreading THE BLARNEY that was the reason for the stock market rally.

Can their activity be anymore transparent? Doesn’t anyone ever ask why this simultaneous kind of dramatic trading action ONLY happens in the US and not in overseas markets? It’s hard for me to believe that the investing world can’t be quietly catching on. As they do, few will want to invest in the US as time goes on. It is a sham. The dollar will be crushed in time; our stock market will be brutalized.

The PPT knows price action makes market commentary. The rah rahs will be out extolling why the start of the war is such bliss for the US economy, now that they goosed the stock market. The market may go up a bit more, but eventually the ills The Working Group on Financial Markets has created in the past are going to catch up to the stock market, and it WILL TANK! Maybe then, these bums will be found out and seriously put in their place. Unfortunately, by that time, most Americans will have lost a good amount of their retirement income in their 401K plans.

JP Morgan Chase and Goldman Sachs were the gold trashers, along with some other bullion banks (big surprise). The good news is they could not close gold lower on the day no matter how hard they tried. Gold was down $1.70 at one point, but rallied back near the close.

The cabal continues to maintain its ironfisted control of silver. Have no idea how they are doing it, but it is clear as day it is them. Copper closed up $1.70 at $77.15, as we prepare for war. Yet, silver is crushed!

I wrote the following pot-pourri commentary in the morning:

What’s with this blue tie thing? Bush always wears one and so did England’s Blair and Spain’s Aznar. Maybe it is a secret signal for war, signaling blue times ahead?

President Bush revealed how card games are played in Texas. When you say,"show me your cards," it means if the asker doesn't like the cards he sees, he quits the game and takes his chips back.

President Bush also defined the meaning of Texas-style diplomacy. It’s my way or the highway; therefore when setting up summits on diplomacy, only invite those that will obsequiously agree with you. Sounds a bit like the way the Soviet Communists used to do their business.

What I wouldn’t give to hear this just one time on CNBC:

Hello folks, this is Maria Bartiromo. This morning stock futures are being pummeled in overseas trading and we are due much lower here on our opening. But never fear folks, pay little attention to my opening call on Squawk Box because the Plunge Protection team will make sure there is no panic in the market, will support it during the day, and make sure the close is a grand one.
Followed by:
Gold was up $9 during Japanese trading hours and is now $6.60 higher, but don’t pay any attention to that either. The Gold Cartel's Exchange Stabilization Fund will instruct the massively short and privileged New York bullion banks to take gold down as soon as they prop up the Dow. Gold is limited to $6/$7 gains in the US, so this ought to be out about it for the day.

***

Yep, the US financial markets are pretty sick when I can write that right BEFORE the 9:30 opening of the stock market and it happens almost as per my script.

One has to wonder what’s up with Tony Blair and his ardent pro-war stance? Most of England is against the war, as is a good number of his own Labor Party. Now this today:

"Robin Cook (leader of the House of Commons) quit as a U.K. cabinet minister, protesting Prime Minister Tony Blair's support for the U.S. confrontation with Iraq and leaving the British leader facing a crisis in his ruling Labour Party."

This is the way I see it. Blair is bought and paid for by the British/US big money/elitists of the world, just like George Bush is. That crowd needs to secure the Iraq oil fields to keep the western economies from failing. Blair dares not go against them. He has to be desperately afraid of crossing them.

It all fits. Remember how cozy Blair and Clinton were? That made some sense as their parties have much in common. That is not the case with Bush and his conservatives.

What they do have in common is the money behind their powerful position. I recall a Clinton phrase that went something like,"I didn’t realize I wouldn’t be running things as President." President Clinton inferred he received marching orders. I suggest the same is true with Blair. He is receiving his orders from the same crowd.

The connection: money/gold. The British gold auction announcement of May 1999 is the linkage event. It made no sense for the Brits to do what they did and in the manner in which they sold their gold (the $280 per ounce average price of their gold sale has cost them a bundle already). It does make sense when related to The Gold Cartel and the big banking powers. Gold was about to explode after the US Congress killed the IMF gold sale idea. The bullion banks were desperate for physical gold to calm things down. Saved by the BRITISH BELL!

When is the world going to wake up to The Gold Cartel and their nefarious ways? Blair has sold his soul to"the company story" and it will cost him. Seems to me he won’t be around much longer.

The John Brimelow Report

Indian ex-duty premiums: AM $8.44, PM $8.36, with world gold at $344 and $340.75. Massively above legal import point. India was closed on Friday: world gold today was much where is was on Thursday - but premiums are some $3 higher. Reuters carries a story this morning from Bombay commenting on the strength of Indian buying. As usual, they find a dealer willing to echo conventional Western opinion, but with an important extra detail:

""Traders are cautiously buying as they know that prices will crash if there is no war. But at the same time, they want to have some quantity in hand to run the business for about a week," a trader said.".

In other words, buying pressure at these prices from the retail public is forcing these intermediaries to replenish inventory. Keeping gold down at these levels will call for a great deal of physical.

Those who have had the misfortune to watch today’s markets from early in the Asian day have suffered a schizophrenic experience. The same news - an increase in certainty of an American attack on Iraq - which has caused euphoria in America caused little less than panic in the Far East. Stock markets wilted, the dollar was pressured, and a sudden and violent rally in gold surprised many observers, including JP Morgan’s Technical Research which was blasted out of a $337.75 short/stop@ $341 position:

"Got this one wrong Friday, with the move back through 341 scuppering plans for an immediate decline under 330 towards 326 targets."

Which, at the least, illustrates the abruptness of the turn.

TOCOM itself exploded from the opening with buying by the public triggering short covering by others: prices were up the limit (40 yen) almost all afternoon, presumably leaving much public appetite unslaked. On constrained volume equal to 25,462 Comex lots open interest rose the equivalent of 659 Comex contracts. At the close $US gold was $8.25 above the NY Friday close at $344.25. (On Friday NY traded 37,087 contracts: open interest fell only 423 lots: more shorts?)

To the surprise of no experienced observer, gold in the early NY day was hit with another sudden barrage of unrestrained selling such has drawn comment on several days recently.

Several thoughts arise from this blinding contrast in time zone behavior, some of them not conducive to faith in the integrity of Financial Markets. From the particular point of view of gold, however, it is probably crucial to recognize that not everyone in the world finds the prospect of a violent unrestrained America appealing. Who knows what targets some enterprising domestic constituency might succeed in establishing next? (A quietening thought for an Englishman writing on St. Patrick’s Day.) From this perspective, increased bullion accumulation overseas seems inevitable.

JB

CARTEL CAPITULATION WATCH

The DOW (8141, up 281) and the DOG (1391, up 51) soared. If it was because of the imminent war, why didn't they open sharply higher? Thanks to the PPT, the DOW has rallied 10% off its low in three trading sessions. The bulls had best enjoy the hoopla over war, because it is going to be a brief party. There are just too many serious economic issues that must be worked out before the stock market is going anywhere of meaning to the upside. That will take a great deal of time.

DEBT, DEBT, DEBT is the most serious problem facing world economies:

New York, March 17 (Bloomberg) -- Spiegel Inc., owner of the 98-year-old Spiegel catalog, filed for bankruptcy protection to reduce $1.7 billion in debt it accumulated as sales fell and credit-card customers defaulted on payments.

Sao Paulo, March 17 (Bloomberg) -- Cia. Energetica de Sao Paulo, the state-owned power generator for Brazil's biggest city, will reschedule almost $700 million of debt payments, a sign of the troubles facing the nation's electricity industry after the currency tumbled and utility rates fell.

Vancouver’s Don Graham points out:

"I have always used Bill Gross as my main reference point when thinking about the stock market. Bill Gross is chief manager of PIMCO. He manages over $70 Billion worth of bonds and for 29 years has better than a 10% return on his fund. He stated over the weekend that the place to be is not in equity funds. He firmly believes that the DOW will yet settle at 5000 the S&P at 650 because dividend yields are still too low, p/e ratios still too high and real returns on stocks still far too low. This is devastating news because many fund managers and serious investors think of him as a guru in themarkets."

Gross was featured on the cover of Barron’s over the weekend. I didn’t spend much time after the early going listening to CNBC. Was it talked about much? I bet not.

The sentiments of a number of Cafe members are expressed in this note from a Canadian:
Hi Bill - It's hard to be sickened more than I am by the way things are, but the obscene surge in the Dow did it. People around the world are beginning to genuinely hate America and the picture of Wall Street and American investors"celebrating" the decision for war by buying stocks will only confirm the picture of America as an immoral, bloodthirsty monster. Barb


The following is from a recently issued report on gold producer hedging:

Cumulative hedging activities of 84 gold producers, representing 66% of global output - fell further in the fourth quarter of 2002, declining by 4.9 Moz (153 tonnes) to total 80.9 Moz (2,515t). The total fall during 2002 was a massive 14.8 Moz (459t), according to the latest issue of the Gold Hedging Indicator (GHI), which is produced by Haliburton Mineral Services and Virtual Metals Research and Consulting and is sponsored by NM Rothschild & Sons Limited. To put it into context, this reduction in hedging more than offsets the amount of central bank gold sold during 2002 under the terms of the European Gold Agreement. The recent strong climb in the gold price together with low interest rates have considerably weakened the propensity of gold producers to lock in prices through hedging, and gold has again become more of a ‘pure’ price play for investors. -END-

In other words, the gold producers bought back 59 more tonnes than the European central banks sold! With a natural supply demand difference of around 1500 tonnes per year, who supplied almost that amount of gold to keep the gold price from flying? The Gold Cartel of course. This hedging report is just one more piece of evidence that GATA has been right all along.

This is a real surprise. Barclay’s was the most bearish of all the bullion banks for years. Really bearish. Perhaps they have had a change of heart, or more appropriately, they know the rig is on its way out:

Barclays to launch bonds linked to gold price
Source: The Sunday Telegraph - London
Publication date: 2003-03-16

BARCLAYS Bank is to take advantage of the current enthusiasm for investing in gold by launching guaranteed bonds linked to movements in the gold price.

Gold, a traditional safe haven in times of uncertainty, has been in huge demand over the past three years as investors sought to avoid the volatile equity markets. In 1999 the price sank below $250 but, by last month, it had reached a six-year high of $388.

The bank said its high net-worth customers had expressed a growing interest in commodity-linked investments such as gold in light of the Iraq crisis and turbulent stock markets.

Details have yet to be finalised but the bond is likely to be similar to a product that has been piloted among a small number of Premier account customers.

This bond promises to pay a one-off return of 10 per cent if the gold price has risen by 8.5 per cent over its six-month term. Whatever happens to the gold price, investors are guaranteed to get back all of their original investment.

Barclays may also issue a separate bond that pays out if gold prices fall by a specified amount. Last Thursday, gold fell to an 11- week low of $334 as equity markets rebounded from Wednesday's sharp falls.

The bonds, due to be launched next month, will be offered to 600,000 Premier Banking customers, who earn more than pounds 60,000 a year.

-END-

The gold shares backed off a bit after a firmer opening. The XAU slipped.68 to 64.95 and the HUI fell.86 to 120.77. That should not surprise after the stunning market reversals of the day. They remain screaming buys. The Gold Cartel is holding back the gold tide for the moment, but the US has managed to tick off practically the entire world. The Iraq war is going to create more uncertainty than ever before. Financial markets will become more tentative and nervous than ever. More and more investors are going to turn to gold. The real gold rush is about to begin.

Happy Saint Patrick’s Day to all Café members. Everyone is IRISH on this day.


MIDAS IRISH MURPHY