I am not looking to get into a big pissing contest here, but just to comment on a few points from the Chief...

First off, he neglects to point out that most of the big institutions that have been short gold all the way through this bull market are nownet long gold, or at least have reduced their shorts to marginal levels. I think that is incredibly significant that we are on the verge of a major breakout.

Chief also suggests that gold is going to get crushed due to a short squeeze in USD, which has been the case so far. But I would argue that gold will disconnect from the USD soon, and soar right along with the dollar, short squeeze or not. Gold is not just an inverse relationship with the USD, its a competing currency.

The flaw in the entire commentary by Chief is that he considers the price of gold as quoted on the COMEX as the real price of gold. This is and has always been a manipulated market, and its relevance is declining along with the open interest. People are beginning to recognize that real gold trumps promises to deliver real gold, and they are moving away from playing with bits of paper as the rest of the paper trade is imploding.

The comment that banks have been selling gold to raise cash is also not correct. Prove to me where there is any significant selling of physical gold to raise cash. This has been a common falacy stated by many analysts and the truth is that volumes have been lower than normal during this slump in gold prices, and very few banks or institutions own real gold. The selling of gold futures does not equate to selling gold to raise cash.

It has been widely reported that most suppliers of small bar bullion worldwide are now sold out. Evidence is also coming in that it is becoming increasingly difficult to obtain large bar bullion, which would suggest that a default is looming and that the supply of metals is indeed facing shortage. One could attribute that to holders of real metal being unwilling to sell at these low prices, and that would just go to refute the idea that there will be widespread sellers lined up below $600.

I think real bullion is on the verge of calling the manipulators on their bluff. The lower the spot price is driven down, the more people are coming to realize that its all a scam. People are driven to own gold for security these days, and not for investment, and therefore the lower gold price makes it more attractive to own, and not likely to drive in capitulative selling presure.

Chief stated: "A properly executed trade by the Feds and Central Banks of the World is to put the coinage and bars into the public. If the coins and bars were sitting in vaults somewhere in the hands of the hoarders, the FED plan would not work." - ENDQUOTE

That statement is incorrect. Simple review of historical data shows that less gold and silver has been made available at the current time than in prior years. Therefore there is no FED plan to put gold and silver in the hands of the public. In fact, the plan seems to be to limit supply and not allow the public to flee to the safety of real bullion. Why else would government mints in various countries of the world including Canada and the US report that they have no supply left?

Keep in mind my final comment. If we are wrong for buying and owning real bullion, we still have that metal and it will still be a viable form of exchange for something in the future. If we are wrong to buy and hold dollars, and the fiat currency are about to go in the tank in a terminal devaluation, then we will be left with nothing when the dust settles. Again, I am not looking to make a quick killing here. My motivation is towards security and preservation of wealth. I will not be dishoarding my bullion regardless of any FED plan or sentiment swings.

Again, I respect the opinion of the Chief and welcome any rebuttle to my comments.

cheers!

mike