From Ed Steer:

Both gold and silver were off to the races the moment that trading began on the Globex early Monday morning in the Far East. But then they both mysteriously got sold off for a couple of hours. The bottom was in shortly after Hong Kong opened. From there gold and silver rose more or less steadily until the top came during after the close of trading on the Comex in New York late yesterday afternoon.

In early trading this morning, both metals rose for about three hours after the Globex opening in the Far East and then ran into another rather suspicious looking selloff which continued until the London open shortly before 4:00 a.m. NY time.

I'm going to discuss Friday's open interest for gold and silver because the news is great. Gold open interest fell another 2,676 contracts and silver o.i. fell again...744 contracts. This means that the '2 or 3' bullion banks that have these huge short positions, are continuing to cover them. Today is cut-off for Friday's COT report...and despite the $130 run-up in gold and about $3 in silver...we should actually see a decline in open interest. This price move we've had in the last week was virtually all caused by the boyz short covering and running up the price as they did so.

In gold and silver news, I hear that Tulving is now bidding $3/oz over spot for silver eagles. For the third time this year my coin guy phoned his supplier yesterday to place an order and was informed that he was (once again) not taking orders for any silver unless it was for 1,000 ounce good delivery bars. I see that Central Fund of Canada (CEF) just issued a press release about a proposed offering. The final amount will be announced this morning about 8:00 a.m. eastern time when the underwriters have closed their order book. It should be a dandy! I'll have the details tomorrow. Ted Butler advised me that another million ounces was added to GLD yesterday...that's over 3 million ounces in less than a week...about $2.5 billion...which ain't chopped liver, folks. Nothing was added to SLV yesterday. Could it be that they can't find any silver to add? Maybe it’s already been sold to CEF in this new offering? And last week, I see that Gold Field Mineral Services (GFMS) announced that global gold mine output was down 70 tonnes (6%) in the first half of 2008 compared to the same period last year. Dennis Gartman went long "1 unit" of gold on Friday. If that's not a short-term kiss of death for the gold price, I don't know what is. Where was he at $750? Let's see how he makes out. But I can tell you right now that I'm rooting for him big time! And lastly (I mentioned this last week) sometime in the next seven days, the participants of the central bank agreement on gold will announce their plans for selling gold in the 2009 year. This new year starts October 1st. I'll be amazed if they sell any more than a handful of tonnes. Sell it to get what in return???

In a Bloomberg story yesterday, McDonald's Corporation told some of its US franchisees to seek other ways to finance store improvement because their bank, Bank of America Corp., declined to increase lending. If a very successful company like the Golden Arches Supper Club can't get more money...what are the chances for "lesser lights" out there? From the King Report on Sunday night..."We are now at the limit of what solons can do constitutionally...so Hank is trying to circumvent the Constitution, by asking Congress to write a bailout bill that grants Hank and his minions absolute power, free of judicial review. Unbelievable!!!" Yes it is, Bill. I see in an Itar-Tass story that Prime Minister Vladimir Putin has called for changing the architecture of the international financial system. He said that "the whole world economy cannot depend on one money-printing machine." I also note that the Russians have sent a couple of warships to the Caribbean to join military exercises with the two bombers they've got sitting in Venezuela. According to The Times out of London, one of them is 'Peter the Great' and "is armed with 20 nuclear cruise missiles and is one of the world's most formidable warships."

So many stories. It was tough to narrow it down to just three. The first is directly about the Hank and his $700 billion. The story is from the New York Times and is entitled "A Bailout Above the Law". It's well worth the read, despite the plethora of stories that have appeared elsewhere on this topic...and the link is here.

The second is a GATA release of a story from the Wall Street Journal. It has the wonderful title of "Gold May Regain Luster for World's Central Banks". I wonder if this is the sort of thing that Putin had in mind in his comments earlier in my rant? Just asking. The link to the WSJ article is here.

The last article is another offering from Patrick Buchanan. I don't know what's come over him lately, but it sounds like Doug Casey has been ghost writing for him for the last few articles. This one is entitled "The Party's Over"...and it really is! The link is here.

Greenspan was considered a master...now we must ask ourselves whether he is not, after (Osama) bin Laden, the man who hurt America the most...It is clear that what is happening is a disease. It is not the failure of a bank, but the failure of a system. Until a few days ago, very few were willing to realize the intensity and the dramatic nature of the crisis. - Giulio Tremonti, Italian Finance Minister

Besides having a ring-side seat to history in the making, it's my humble opinion that anything decided now...bailout or not...is the proverbial final arrangement of the deck chairs on the Titanic. Not only that, the safety catch is now off the entire world's financial system...and nothing can reverse that process now. Before too long, and it's already started, the golden lifeboat will be the only one that floats.

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