"So central banks were accumulating dollars over the past three weeks at a rate far above what one would expect as a result of the US trade deficit. The logical conclusion is that they were intervening in currency markets. They were buying dollars for the purpose of propping it up, to keep the dollar from falling off the edge of the cliff and doing so ignited a short covering rally, which is not too difficult to do given the leverage employed in the markets these days by hedge funds and others. So central banks pushed in one direction and funds and traders then stepped on board. In other words, central banks ignited the fuse of a bear market rally. With this intervention, central banks have bought some time. But alas, they have not fixed the problem. Central bank intervention does not make the dollar"

"Gold & Silver : The August Lows Are Upon Us! -- Posted Thursday, 7 August 2008 | Digg This ArticleDigg It! | Source: GoldSeek.com Upon analyzing over 30 years of data involving the gold price, we conclude that the seasonal lows usually occur in March and June. Quite often however, after the June low a secondary low is experienced in August. This secondary low is usually slightly higher than the primary low. People who have resisted the temptation to buy the June low will usually take advantage of this last opportunity before the start of the Christmas rally that seems to happen almost every year."

"Thursday, 31 July 2008
Fisher's Debt-Deflation Theory of Great Depressions and a possible revision
“Panics do not destroy capital; they merely reveal the extent to which it has been previously destroyed by its betrayal into hopelessly unproductive works”.

- John Stuart Mill

I have been both a central banker and a market regulator. I now find myself questioning whether my early career, largely devoted to liberalising and deregulating banking and financial markets, was misguided. In short, I wonder whether I contributed - along with a countless others in regulation, banking, academia and politics - to a great misallocation of capital, distortion of markets and the impairment of the real economy. We permitted the banks to betray capital into “hopelessly unproductive works”, promoting their efforts with monetary laxity, regulatory forbearance and government tax incentives that marginalised investment in “productive works”. We permitted markets to become so fragmented by off-exchange trading and derivatives that they no longer perform the economically critical functions of capital/resource allocation and price discovery efficiently or transparently. The results have been serial bubbles - debt-financed speculative frenzy in real estate, investments and commodities.

Since August of 2007 we have been seeing a steady constriction of credit markets, starting with subprime mortgage back securities, spreading to commercial paper and then to interbank credit and then to bond markets and then to securities generally. While the problem is usually expressed as one of confidence, a more honest conclusion is that credit extended in the past has been employed unproductively and so will not be repaid according to the original terms. In other words, capital has been betrayed into unproductive works.

The credit crunch today is not destroying capital but recognising that capital was destroyed by misallocation in the years of irrational exuberance. If that is so, then we are entering a spiral of debt deflation that will play out slowly for years to come. To understand how that works, we turn to Professor Irving Fisher of Yale."

"Ask yourself this, why is selling something you don%u2019t own fraudulent in every walk of life, except in stocks? Why isn%u2019t it considered a fraud in stocks? The answer is because it has been going on for so long, that no one thinks any longer about why we allowed it to exist in the first place."

"Falling empires and their currencies: Rome, France, England and the USA by Rolf Nef When empires fall, their currencies fall first. Even clearer is the rising debt of empires in decline, because in most cases their physical expansion is financed with debt. In each case presented we have some useful statistical data to show the drama. Every case is different, but the common thing is that the currencies of each and every one of these falling empires lost dramatically in value. Let me go through every case starting with the Romans:"

"A series of articles on the crisis gripping the world economy and global markets starts where it all began%u2014with America%u2019s deeply flawed system of housing finance"

"(Here are a few handy bar charts)
Silver Stock Report


It's good to review the basics. This time, I made some charts, which can be useful to see the comparison of size. The concept of relative size is often lost when we discuss millions, billions and trillions, but the concepts of relative size is extremely important when considering growing your money.

Smaller Things Grow Faster June 19, 2006

The charts speak for themselves."

"However expensive Indians may perceive gold to be right now, it would be wise for them to put whatever disposable income, cash (and stock) assets they have back into gold. The rupee's fall makes holding cash unattractive. Equities are falling and so are Indian treasuries due to high inflation expectations.

Gold and silver will be some of the few things worth sinking money into - regardless of price - because the price of leaving their money in falling assets is obviously even higher. It only gets more and more expensive as time moves on.

Gold is rising even without India's traditional buying levels of approximately three times what they are now. The Indian gold train is moving and pulling out of the station. The more speed it gathers, the harder it will be to jump back on. "

"I%u2019ve taken data from the latest Office of the Comptroller of the Currency %u2013 Quarterly Derivatives Report [Q1/08 just released a week ago]. I%u2019ve done some comparisons of the same selected data Q4/07 vs. Q1/08. There are/were some interesting developments. Look at the signs of systemic stresses manifesting themselves [particularly at Citibank] in the precious metals arena. For Citibank to be %u201Cwithdrawing%u201D from the metals derivatives trading / rigging game %u2013 it obviously and logically is not profitable and is evidence that capital is too scarce within the institution for them to continue playing the game. Why else would Citibank be dramatically scaling back [as reported below] in a market enjoying record growth as reported by the NYMEX [reported above]? HSBC has clearly had to step into the breach to take Citibank%u2019s place. And it also appears that %u201Creal heat%u201D is being applied to the silver sector with the %u201Cballooning%u201D of Morgan%u2019s derivatives in Prec. Metals [other than gold] %u2013 which is undoubtedly all silver exposure. Makes me wonder if Citibank might have experienced a %u2018near death experience%u2019 %u2013 soon to be followed by the real thing?"

"What you are about to read is the single most important commentary I%u2019ve written since I first began publishing The Grandich Letter in 1984. Every American should read it, and those who do will likely wish they hadn%u2019t. What I%u2019m about to speak of is the hardest thing I ever had to do in my life. What I speak about is not only IMHO going to profoundly impact hundreds of millions of Americans but will also directly hit me and my family. Never have I wished anything I did could be as wrong as this, but I know in my heart it is right. Last October, I wrote a newsletter entitled %u201CMan Your Battle Stations.%u201D www.grandich.com/docs/financial.post_10-15-07.pdf. Soon after I wrote it, Canada%u2019s BNN -- Business News Network -- had me live on the phone www.grandich.com/audio/BNN-10.22.07.TBN.wma. At that time, I was confident of my forecast but had not even begun to imagine how many people in the world would be severely impacted if I was right. Unlike a prediction about something turning out good where the masses profit, being right about really bad news is not a way to make friends and influence people. Knowing that it won%u2019t sit well with most, I%u2019m going to tell what I think is the blunt truth. Trust me, it doesn%u2019t do me any good, either, except maybe to give the masses a realistic and what I believe to be accurate and down-to-earth assessment of what is to come and the reality of what is currently taking place. To do so, I have to go back in time and explain an event that lays the groundwork for where we are today as a nation."