From Ed Steer:

Gold tacked on about ten bucks between the time that trading began on the Globex in the Far East on Thursday morning until shortly after London opened. From that point...and up until the Comex open...gold gave up five dollars of its gains, and silver got sold off about two bits. As per usual, the bullion banks pulled their bids on the Comex open, and down went the price. Then they did it again the moment that London closed for the day. By the time that trading was over on the Globex at 5:15 p.m. New York time yesterday afternoon, silver was down about 95 cents from its London high...and gold got smacked for $30.

All of Wednesday's gains and much much more evaporated under the Cartel onslaught. All the new longs that were placed on the Comex on Wednesday disappeared in a New York minute. Obviously the boyz have a reason that they don't want the price to go anywhere for the moment. As I said in my closing remarks yesterday...look out for "in your ear".

Open interest on Wednesday's up day in the gold price, showed a rise of 3,645 contracts. This time silver o.i. dropped, even though the price was up! Go figure.

I noted a story over at mineweb.com that retail buying in India is so heavy that local bullion suppliers have been cleaned out, and are now having delivery problems...some having to wait as long as a week to get fresh supplies. My bullion dealer here in town informed me yesterday that he had already surpassed 2007 bullion sales sometime during July. The summer, which is notoriously slow in his line of work, has been busier than he dreamed possible. Now it matters not whether bullion prices are high, low...rising or falling...his sales just get stronger and stronger. Delivery times for silver...6 weeks minimum...except for the Canadian silver maple leaf, which is only a few weeks. All the silver and gold he's receiving now is 'fresh product'...made in the last week or two; there is virtually no 'after market' product coming through the front door.

Besides what's happening in the Caucasus right now, other stories in the international press include this story from the state of Bihar in India. The secretary of the state's welfare department, Vijay Prakash unveiled his plan to promote the consumption of rat meat in homes, street stalls, restaurants and even international five-star hotels. I wish him well.

And from the ridiculous to the unbelievable, I see that Zimbabwe's annual inflation rate has now been pegged at 42 million percent. Do you want to see what a cheque looks like in Zimbabwe dollars? Here's one for over $1 quadrillion dollars...but it had probably inflated to worthlessness by the time the bearer got a chance to cash it. I thank P. Spicer for both these tidbits.

click to enlarge

The news was so bad yesterday, starting with the CPI numbers, that the President's Working Group was obviously out in full force...which would include, of course...making sure that the precious metals headed south whether they wanted to or not. And I see that the Baltic Dry Index (BDI) has fallen 23 consecutive days...a third of its value lost in the last six weeks.

The first story of the day comes from that blithering idiot from the lunatic fringe (TBIFTLF)..."The Mogambo Guru" over at Bill Bonner's site...dailyreckoning.com. In it, he talks kindly about other members of the tinfoil hat society(TTHS)...including your humble scribe. We'll take the publicity any way we can get it...and he even spelled our names right! The story is entitled "The Great Variety of Rich Poor People"...and the link is here.

The second story is of a far more serious nature. Pakistan (which is about to give the old 'heave-ho' to President Musharraf) is now almost at daggers drawn with India. That's just another brick in the wall in the Middle/Far East...two developing nations, armed to the teeth with nuclear weapons, now about to get at each other's throats. Wonderful! The story, fromAsia Times on Line, is entitled "India-Pakistan relations in free fall" and the link is here.

President Roosevelt Studying $2.6 Billion Budget - New York Times, December 12, 1933 (Page 2)

As I write this in the early evening hours of Thursday (NY time), I see that the boyz have gold and silver back at their lows of earlier this week. Are they painting a double bottom...or are we going to wake and find gold and silver at shockingly lower prices? Don't know. But this I do know for sure...if the prices get hammered from here...there isn't a thing that anyone will do to stop these criminals...least of all the regulators or the mining companies. As Ted Butler said on the phone yesterday..."nothing that's happening in the gold and silver markets right now is accidental...it's intentional"...and I agree.

Take the rest of the day off...with pay, and I'll see you Saturday morning.

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