The latest edition of BullionBuzz is out. Among the articles is one re Congressman Ron Paul's recent comments on US spending: Here is an excerpt: "The US State Department is building a $1-billion embassy in London; the plans even include a moat! This has Congressman Paul wondering about his government’s use of funds, especially given the difficult economic times. Many are unemployed; those who are employed worry about losing their jobs as they struggle to pay bills. Meanwhile, Washington talks about increasing taxes, something voters were promised would not happen during the Obama administration.

The US should be focusing on eliminating waste and preserving public funds rather than expanding the Federal budget. Most businesses have had to cut back in order to survive; the government should do the same. The administration has committed to doubling foreign aid, a promise that is likely to be kept despite the economic crisis. Paul asked Fed Chairman Bernanke about agreements with foreign central banks, and if he had discussed bailing out Greece, which he flatly denied. However, Bernanke recently announced the Fed will be looking into Goldman Sachs’ derivative agreements with Greece. Goldman Sachs has “too big to fail” status with the Fed, so it is conceivable that any Greece-related catastrophic losses at Goldman Sachs will once again be passed on to taxpayers. Perhaps most sinister are the revelations in Robert Auerbach’s Deception and Abuse at the Fed that $5.5 billion was sent to Saddam Hussein in the 1980s – money that allowed Iraq to build up its military machine to fight Iran prior to the first Gulf War, the same machine turned against Americans within just a few years.

Bernanke says it is “bizarre” to think that Americans at the Fed could engage in this type of behavior, which some have called criminal. However, Professor Auerbach served as a banking committee investigator, and an economist at the Treasury Department and at the Fed.  His claims are solidly backed by court rulings and other evidence. “We simply must keep pressing these issues and voicing our objections if we are ever to reverse our failed policies,” writes Congressman Paul." Read the Buzz here: BullionBuzz

John Embry – Canadian gold expert talks to The Gold Report on his view of gold in 2010. The bottom line? A big rise. Here is an excerpt: "The Gold Report: John, in Investors Digest of Canada you recently said you're expecting gold to gain another 30% this year.
John Embry: I would say at least 30%. I said that I thought it would be the best year to date. We've had nine years consecutive higher year-end prices and the best year in that span for a year's return was 31%. I think this will be the year that we exceed it in this, the 10th year of the bull market.
TGR: What's driving this? Why is this year going to be the best year?
JE: I think we're getting very close to the point when a greater proportion of the public realizes the degree of difficulty that sovereign debt is in. And at that point, when you can't depend on your government paper as a safe haven, I think that fact puts gold in a much better light in more people's eyes." Read more here: Gold will rise

Investment guru Peter Schiff talks about gold and the economy in this piece in Contact.com. Here is an excerpt: "Schiff sees the U.S. economy unraveling. The debt is unsustainable, made tolerable for the moment only by interest rates kept artificially low by a meddling central bank, the Federal Reserve. He likens the government's fiscal and monetary policies to a Ponzi scheme, destined to collapse when when China and other foreign lenders finally cut off credit. "At some point, they are going to look at the U.S. and decide we can't pay it back," he said. The dollar will crash. Interest rates will rise, fueling inflation that could leave currency worthless. And that's where the gold comes in. "You have to have real money, gold and silver," Schiff said." Read more here: Bullion and Policics

This article from Wealth Bulletin quotes gold expert James Turk on gold and currencies. Here is an excerpt: "All too often, people look at the price of gold the wrong way, according to James Turk, founder of bullion dealer GoldMoney.com, talking to US journal Barron’s.

He said the price of gold rose by between 10% and 20% against the world’s mainstream currencies over the last ten years. The Swiss franc has held its ground the best, with an average loss of just 10% a year against gold. The Sri Lankan rupee has dropped in value by 20% a year. The US dollar and sterling have each lost 15% annually." Read more here: Gold & Currencies

Adrian Douglas writes a compelling article in Before it's News about the 'paper gold' that is being created globally, and in particular by the London Bullion Market Association (LBMA). Here is an excerpt: "I estimate that as much as 50,000 tonnes of gold has been sold that does not exist. That is equivalent to all the gold reserves in the world that are yet to be mined, or put another way, 25 years of gold production. That is the grand-daddy of all short positions! The fractional reserve operation of the LBMA is likely to be the next Madoff scandal, except multiplied by 100…a 5 trillion dollar fraud as opposed to a 50 billion dollar fraud."

Further he wirtes…"There is only one way to protect yourself and to profit. You should own physical bullion. Simply don’t trust intermediaries like the LBMA who purportedly sell you gold but label you an “unsecured creditor”. Anyone who thinks they hold gold on the LBMA should demand delivery. The major desirable and unique characteristic of gold is that it is no one else’s liability, unlike almost every other financial asset. If you own a credit risk, an I.O.U. gold, you have not achieved the principle objective of owning gold. Are you a “gold owner” or an “unsecured creditor”?…you can not be both!" Read the article here: LBMA

Do you own real gold?

The Financial Times has picked up the story that the Gold Anti-Trust Action Committee (GATA) has been championing for years – that manipulation in the precious metals markets is a fact. Here is an excerpt from FT: "When the US commodities regulator sought public input last year on a plan to damp oil speculation, most of the hundreds of missives it received were not about energy, but silver and gold.

One letter read: "I know your time is precious so I will make my request short and sweet. Please limit concentrated short positions in the silver futures market. This will allow the little guy a fighting chance against powerful market manipulators."

The barrage was the latest salvo from a group of small silver and gold investors who claim that a cabal of banks is conspiring to keep precious metals too cheap.

Now the silver and gold bugs have got the regulator's ear. The Commodity Futures Trading Commission this week announced it would host a public meeting in late March to discuss speculation limits in US metal futures."  Read more on the GATA site here: GATA

More on possible manipulation in the precious metals market. This from Ron Kirby on Financial Sense. Here is an excerpt: "Something of significance occurred last week that went unreported in the mainstream financial press. This important development was the admission of the Commodities Futures Trading Commission [CFTC] that it was suppressing information that would expose precious metals market manipulation.

This issue was first publicly reported by GATA director, Adrian Douglas, in a February 20, 2010 article posted here.

Beginning in December, 2009, the CFTC began suppressing the disclosure of the identity of banks participating in the silver futures market [via the Bank Participation Report or BPR]." Read more here: CFTC

A good article by JS Kim writing on Seeking Alpha about the continued manipulation of gold and silver through COMEX. The focus in this is the recent announcement by the IMF on its planned sale of gold. Here is and excerpt: "The recently announced IMF sale of 191.3 tonnes of its gold reserves, though it caused an immediate sharp knee-jerk reaction in gold futures markets, will have a negligible effect on the long-term price of gold. Here’s why.

In December, 2009 the commercial bullion banks that serve as agents for the leading Western Central Banks were net short 303,791 contracts of gold. Each COMEX gold futures contract represents 100 troy ounces, so the Commercials were net short 30,379,100 troy ounces of gold. With the average price of gold $1,134.72 per troy ounce in December 2009, this net short commercial position represented $34.47 billion worth of gold. There are 32,150.74533 troy ounces in one metric tonne. So 30,379,100 troy ounces/ 32,150.74533 troy ounces = 944.90 metric tonnes of gold. Since gold contracts are supposed to be good for physical delivery, the commercial bullion banks that were short nearly 38% of annual world production of gold this past December should have had 944.90 physical metric tonnes of gold in their vaults to back up their short position at that time. In reality, this situation never exists." Read more here: IMF Gold Sales

The latest edition of BullionBuzz is out and you can find it here: BullionBuzz One of the articles is a piece by Richard Russell who discusses the role of gold today and the sorry financial state that the US has gotten itself into. Read an excerpt here: "A hundred years ago gold and silver were the only items accepted as money. Paper money was used because it was convenient as opposed to gold and silver, which are heavy. If you had any doubt about the paper, you could exchange it at any national bank for gold. And the dollar was backed by one of the strongest and most prosperous nations on earth. Today the dollar is backed only by the full faith and credit of the US, the greatest debtor the world has ever seen. Questions are now arising about the credit-worthiness of sovereign debt. Many analysts believe that the US will never be able to pay off its debt, which is not only rising but compounding. The Obama administration is putting off the solution of the debt and deficit problems to future administrations, a dangerous procedure that ensure future generations won’t have the fun and easy life this one has enjoyed. Today’s unsustainable debt is destroying the world, and the end will involve both deflation and monetary inflation through the production of fiat money. The survivor, the last man standing, will be gold."

Credit issues in the country of Greece continue to cause concern in global financial markets. Recent events have given a boost to gold. Here is an excerpt from BusinessWeek: “Sovereign debt concerns should continue to provide background support,” James Moore, an analyst at TheBullionDesk.com in London, said in a report. “With the role and stability of the euro being seriously questioned, we could see a broader shift by investors toward hard assets, particularly gold.” Read more here: BusinessWeek