Gold & Silver Daily: World’s Central Banks Meet in Secret in Australia – Feb 09, 2010

World’s Central Banks Meet in Secret in Australia
Gold didn’t do much in Monday trading anywhere in the world. There was a peak in the price [around $1,075 spot] at 4:00 a.m. New York time, when the dollar was at one of its lows of the day… but it was basically all down hill from there, right into the New York close at 5:15 p.m. yesterday afternoon. The low of the day [$1,059.90 spot] occurred during New York trading at some point.

Silver’s high of the day [around $15.28 spot] was also at 4:00 a.m. Eastern time. Then it got smacked for about 30 cents at the Comex open in New York… got it all back by 12:45 p.m… but lost it all by the New York close. Silver’s low of the day [$14.92 spot] occurred shortly before 9:00 a.m. in New York trading.

I wouldn’t read a lot into the action of either metal yesterday. Most of it had to do with what the U.S. dollar was doing… or it was least made to appear that way.

Of course, the precious metals stocks rolled over the same time as the Dow… shortly after 11:00 a.m. yesterday morning… and most of Friday’s lovely gains disappeared.

As far as Friday’s open interest numbers go… gold o.i. rose 5,002 contracts. Volume was a fairly large 275,496 contracts. In silver, open interest was up 1,567 contracts. Volume was a monstrous 67,245 contracts. I’d give a day’s pay to know what the bullion banks did on Friday. On the new lows in both gold and silver, they must have covered a lot of shorts… but gone massively long as well… plus, they were probably 100% responsible for the big rallies off the bottom on Friday afternoon. I suspect that both of these rallies were the result of short covering by the bullion banks, because the tech funds would not be buyers at these prices and moving averages… as they were the ones puking up their long positions earlier in the day! And if this Friday’s Commitment of Traders report shows the correct information… all of this data should be in it.

Well, the CME Delivery Report yesterday showed that 337 gold and a rather large 216 silver contracts are up for delivery on Wednesday. There were two big issuers and stoppers in both metals… and all the details… right down to the last contract, is linked here.

There were no reported changes in the alleged holdings over at GLD… but the SLV added 1,472,061 ounces to their holdings! This, in the middle of one of the biggest bullion bank-orchestrated sell-offs of all time? The Zürcher Kantonalbank in Switzerland updated their ETFs for last week. They added a very small 7,542 ounces of gold… but their silver ETF increased a rather large 510,361 ounces. I thank Carl Loeb for those numbers. There was no report from the U.S. Mint and the Comex-approved depositories showed that 557,194 ounces of silver were added to their inventory on Friday.

Dan Norcini [of Welcome To Jim Sinclair’s MineSet fame] published some excellent graphs over the weekend. Here’s the first one. It shows that the “Commercial Traders” [read JPMorgan et al] are massively short the U.S. dollar index. Do you, dear reader, remember what happened to gold and silver when these fine folks were short both metals as much as that? As Dan says in the sidebar to this graph… “It could well be that the Dollar rally is getting long in the tooth.” No kidding!

There are two other graphs in the 5-page pdf file linked below. The graph above [if you’re having a tough time reading the fine print]… plus the graphs on page 5 and 6… are well worth your time. The link to all of them is here.

It’s Tuesday, and as per usual, I have a lot of stories for your consideration… quite a few of them are very important. Today’s first gold-related story is about another “let’s pretend we have all the physical we say we do” precious metals ETF. It’s called the “ETF Securities USA”. The prospectus, and the story about it, is located in this GATA dispatch that Chris Powell headlined “New ETF will claim to have gold, silver, platinum, and palladium”… and the link is here.

The second gold story is from Peter Brimelow over at MarketWatch – Stock Market Quotes, Business News, Financial News. The headline reads “Gold hit hard, but bugs buoyant”. It’s not very long… and I think you should read it… and the link is here.

There was a top secret banking meeting this past weekend. The only place I found the story was this item from of one of the Australian newspapers. The reason they have the story, is because Australia is the host country… but the location is secret. The headline reads “Secret Summit of Top Bankers: World’s top bankers fly in to meet at secret location… trouble on the horizon”… and the link to this must read story is here.

One must have to wonder, dear reader, just how bad things really are. Well, you should already know. As I’ve said many times over the last ten years… and long before I started writing for Casey Research… “if the free markets were allowed to have their way; the world’s economic, financial, and monetary systems would be a smoldering ruin within a week.”

Here’s another story along the slippery slope. This is a piece that’s posted over at zero hedge | on a long enough timeline, the survival rate for everyone drops to zero. The headline reads “Deutsche Bank And Unicredit Pull Out Of Greek Repo Market, Cease Lending Against Greek Collateral”. This is another must read… and the link is here.

Since it’s Tuesday, I have an Ambrose Evans-Pritchard piece from The Telegraph in London. It’s another one for your must read pile. The headline states “Greek Ouzo crisis escalates into global margin call as confidence ebbs”… “For the third time in 18 months the global financial system risks spinning out of control unless political leaders take immediate and radical action.” The link to the story is here.

In another directly related story from last Thursday’s Telegraph in London… courtesy of Friday’s King Report… comes this piece, and the title is so apropos… “Greece crisis: There, but for the grace of God, goes Britain”… “Should markets pass the same verdict on Britain as on Greece, the results would be almost identical – and just as disastrous, says Edmund Conway.” [That’s a big 10-4 good buddy!] I think this is a must reader… but, dear reader, I’ll leave that decision up to you… and the link is here.

Here’s an interesting story that you’d never find in the main-stream press. “The civil liberties committee in the European Parliament on Thursday recommended that the parliament’s MPs reject a deal that would allow U.S. authorities to continue accessing information held by a Brussels-based international money transfer system… commonly know as SWIFT.” It’s a very short article headlined “Bank Data Wars Escalate”… but has lots of links on this subject if you wish to pursue it. I thank GATA board member Catherine Austin Fitts for providing the story from her Solari | The Solari Report website… and the link is here.

And lastly… thankfully… is this video clip that was posted over at zero hedge | on a long enough timeline, the survival rate for everyone drops to zero. It’s a Marc Faber interview at Bloomberg yesterday. Marc says that “if the U.S. was a corporation, it’s credit rating would be junk.” The video runs about five and a half minutes… and the link is here.

Central banks meeting in secret it Australia… it sounds like The Creature From Jekyll Island all over again. Greece, Portugal and Spain et al on the brink. A stock market [the Dow] that wants to die. It appears that the central banks are watching their control of world financial and monetary events slip away… and are in a full panic mode.

From what I can see at this juncture, there are only two possible ways this economic, financial, and monetary situation is going to resolve itself, and they are… a hyper-inflationary depression… or a complete deflationary collapse. Both of which will result in the destruction of most of the world’s currencies. But, somewhere along either of those paths, or a combination of the two paths… individually or collectively, the central banks will be forced back into using gold as a convertible currency. When [and notice I didn’t say ‘if’] that happens, gold will have to be revalued to some fantastically high price. At that moment, the Golden Rule will come into play… He who has the gold, makes the rules!

Then, and only then, will we find out which countries and their respective central banks have gold reserves of any kind… and how much they really have left.

In the interim, things are going to get incredibly ugly. And, without doubt, the world’s central banks will resort to anything to prevent ‘all of the above’ from happening. But it’s way too late for that now. And, as Ambrose Evans-Pritchard said in his story from The Telegraph above… the crisis in Greece is now escalating into a “global margin call as confidence ebbs.”

These are not just interesting times… they are historic times!

In closing, I see that both metals are up a bit in ragged Far East and early London trading. Gold volume [at 5:03 a.m Eastern time] sits at 22,246 contracts for April… an in March silver, volume traded so far is 3,800 contracts. And the CME has posted the preliminary volume figures for gold and silver trading on Monday. Gold volume was a pretty light 162,375 contracts… and silver shows 47,771 contracts traded.

See you tomorrow.