Anyone who doesnt believe the PM markets are somewhat manipulated should follow the paper vs. phsyical discrepancies in order to understand.

Ed Steer comments this morning

From Ed Steer:

Both gold and silver didn't do much of anything until Friday afternoon trading in the Far East began. Then sellers entered the market in both metals. The bottoms were in during early morning trading in Europe and London, and from there a rally commenced right into the first thirty minutes of trading on the Comex in New York. Then they both got sold off (silver more than gold) before their prices headed skyward (gold more than silver) into the London p.m. fix. And, like Thursday, the prices were immediately hammered once the 'fix' was in.

Ted Butler says that the one or two bullion banks that are massively short silver and gold are the ones behind these rather bizarre price moves at the London p.m. fix we've been seeing during the last few days. In his commentary on Tuesday, Ted said this..."The only way the largest T. rexes could further reduce their short position was to turn to the only available source of potential selling - the heavily long raptors." To refresh your memory on this, scroll down to the heading "Raptors Revisited", and read it a couple of times until you understand it. The "T. rexes", as Ted calls them, are the '1 or 2' U.S. bullion banks that hold the largest short positions in both metals. The link is here.

As I mentioned yesterday, I was awaiting the open interest numbers for Thursday's price activity in both metals with great enthusiasm...and I wasn't disappointed. Gold o.i. fell another 8,422 contracts! Silver dropped another 1,126. You can take it to the bank (now there's a saying that has little meaning anymore...LOL!) that the vast majority of the selling was by "The Raptors"...and the "T. Rexes" were there to gobble up every long contract that the raptors pitched in both metals. Make no mistake about it, these last two (or one) U.S. bullion banks are using every trick in the book to cover as many shorts as they can. And it's pretty obvious...at least to me...that they won't be around to short the next 'rally'. It's my bet that when it does arrive, it's going to look like a NASA space launch.

Shortly after GATA held its 'Gold Rush 21' conference in Dawson City, Yukon...where one of Putin's economic advisors showed up...a photo of Russian President Vladimir Putin appeared in a Russian newspaper holding a gold bar. I've run this picture before.

Earlier this week in my daily rant, I ran a news story from Moscow that talked about the possibility that Russia might back the rouble with gold. That's not the first story I've read about that sort of thing over the last number of years. Then on Thursday, another story came out of Moscow that was posted at Bill Murphy's lemetropolecafe.com, which was entitled "(Russian President Dmitry) Medvedev lashes out at gold producers." Here's the photo from that article...and here's the link.

Is it something? Is it nothing? Is it just a warning to the west...or are they going to follow through on this? The Russian leaders have very long memories...and the injustices heaped upon them by the West in general, and the US in particular, since the fall of the old Soviet Union...have not been forgotten. You can read into this whatever you want...but I just can't shake the feeling that some earth shattering event is about to visited upon us. Will it be this...or something else? The world's economic, financial and monetary system is broken beyond repair...and can't continue like this for much longer. Who is going to be the one to wield the golden sword that puts this "great thrashing beast" out of its misery? Just food for thought on this early fall Saturday. Al Korelin of the Korelin Economics Report discussed this sort of thing on Friday during our weekly interview. The link for that is here.

Here's a story from the timesonline.com out of London. I'm sure that this story never saw the light of day in any of the main-stream press outlets on this side of the Atlantic Ocean. The title says it all..."UK banks hold US$175 billion of sour assets that could qualify for US bailout plan"....and that's just the UK! The link is here.

And in the "You Can't Make This Stuff Up Department" comes this story regarding the big White House meeting on Thursday night about the $700 billion bailout. However, since I read that story in the wee hours of Friday morning, the story was 'updated' late on Friday evening. Here's a direct quote out of the original story as it was published in the King Report...."the meeting was described as among the wildest in memory. A beleaguered President Bush had to struggle to maintain order and reassert himself. And when Democrats left to caucus in the Roosevelt Room, Paulson pursued them, begging that they not ‘blow up’ the legislation. The former Goldman Sachs CEO even went down on one knee as if genuflecting, to which Speaker Nancy Pelosi is said to have joked, ‘I didn't know you were Catholic’. " I know that part was in there, because I read the whole story...knowing that I would use it here. The part quoted above has been removed in its entirety. The "Updated" version, now entitled "Frank: Deal can be reached by Sunday" (Originally titled: "Wild Day, no deal") is linked here. The 'thought police' are working overtime.

Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly, and applying the wrong remedies. - Groucho Marx

Today's 'blast from the past' is another trip down memory lane, as two greats...one on guitar and the other on piano...hammer out a couple of well known tunes together. Turn up your speakers, click here...then enjoy!

What a week! As a Canadian, it's really sad to watch the late great U.S.A. that I knew and loved back in the 50s and 60s, slowly slide beneath the waves without a shot being fired. James Grant was right..."where's the outrage!"

See you on Tuesday.

Casey Research correspondent-at-large Ed Steer is a keen observer of the financial scene and a board member of GATA.org.