Chris Powell (usagold.com 17October2008; 12:57)

2:53p ET Friday, October 17, 2008

Dear Friend of GATA and Gold:

MineWeb’s Lawrence Williams interviews Jeff Nichols of American Precious Metals advisers about gold’s decline on the commodities exchanges even as demand for the metal explodes, and they come up with a likely explanation — heavy surreptitious gold leasing by central banks.

Williams writes: “Nichols reckons it has been central bank gold loans — even more so than official gold sales — that have really pulled the rug out from under gold. Gold loans by central banks are an alternative — and invisible — means of injecting liquidity into the banking system. These gold loans to banks and bullion dealers by the leading central banks are probably a significant multiple of outright official sales."...

Meanwhile MIDAS reports that the financial charts for GS,JPM and BRKA look dreadful..heading to the bottom...so there is real panic out there citizens.

YIKES!!!!: "Banks borrow record $437.5 billion per day from Fed

Fri Oct 17, 2008 12:38am EDT
NEW YORK (Reuters) - Financial institutions ran to their lender of last resort for record amounts of cash in the latest week, under extreme pressure from the worst global financial crisis in a generation, Federal Reserve data showed on Thursday.

Banks and dealers' overall direct borrowings from the Fed averaged a record $437.53 billion per day in the week ended October 15, topping the previous week's $420.16 billion per day."

There is so much bad news o

The beat goes on... "One day our Prince will come..."

Pic is right...time for a break...looking for a big month end/beginning a rally into the New Year?

I'm still of the Embry bent and his latest is that gold really has been hammered as the banking and financial systems have been imploding.( Hence the above info on central bank surreptitious leasing.) Gold must never be seen as a safe haven alternate to fiat. Physical is hard to buy and premiums over spot are increasing. Future activity by the paper predators will continue until....? Dollar printing to buy depressed assets is hugely inflational. The mountain of outstanding derivatives is almost insurmountable to address. The US dollar will be debased causing raging inflation which will propel gold to "surreal price levels".

Ahhh, "when?", you ask. And so do I. Its' like that boulder, teetering on the edge of the canyon wall, always just stuck there...until it isn't.

And now you say: "jeez, doesn't Sinbob ever quit?" Just for the week-end.

ne truly has to be beyond wondering how long the insanity will go on. But then, old gold bugs, I have been uttering such repetitive mumblings for far too long.