From Ed Steer:

With the massive interest rate cuts in England and Europe yesterday morning, one would have expected more from gold and silver in European markets...but that didn't (or wasn't allowed to) happen. However, once the Comex opened in New York, gold and silver took off...but ran into massive resistance almost immediately. The top was in for gold around the London p.m. fix, and the usual US bullion banks in New York took care of the rest by pulling their bids (or selling a bunch of paper gold) shortly before London closed for the day...which was the same drill we had on Wednesday. Note the Kitco gold chart.

click to enlarge

Silver put in an even more impressive show, but ran into the same two sellers at precisely the same times (as gold) during the business day. These guys are blatantly out in the open and don't care who watches them do it...because nothing's going to happen to them...as the CFTC will do nothing to stop them. And as I've said before, you can forget about your mining companies raising a finger to help you.

We've had very few gold closes over $750 in the last three weeks, which seems to be a price that the boyz are trying to defend for whatever reason. They aren't just content to stop a rally cold, but also to drop the price a bunch to get the close well below that price. It beats me why they appear to be keeping the price in this holding pattern. Maybe I'm imagining things...but the truth of the matter is, if these not-for-profit sellers weren't there on every rally...God only knows how high the price of both gold and silver would be by now. But that's why they're there...isn't it?

Wednesday's open interest numbers are as follows....gold o.i. fell 917 contracts to 302,991, and silver o.i. was down again...this time by 467 contracts to 93,898. These aren't big numbers even though the volume was decent on Wednesday. The reason that the o.i. doesn't drop a lot on price breaks to the downside anymore is because virtually all the spec longs were flushed out weeks ago and the boyz are bouncing us around the bottom of a virtually empty barrel. This applies to all commodities...not just our two favourites. The open interest numbers for Thursday will be out later this morning...and in my report on Saturday. The new Commitment of Traders numbers will be released at 3:30 Eastern time this afternoon.

From The King Report last night..."The BoE’s dramatic 150bp rate cut, to the lowest rate (3%) since 1955, rallied stocks for only a few minutes, as we warned. US stocks tried to rally after a 100-point DJIA decline on the open but the ugly fundamentals pushed stocks lower…The ECB cut rates 50bps as expected…The BoE said it would provide ‘unlimited one-week dollar funds’. The Swiss National Bank abetted the fleeting rally in equities by unexpectedly cutting rates 50bps. But this isn't a liquidity game, it's a solvency and confidence game...The Fed’s balance sheet continues to explode. For the week ended Wednesday it surged $182.913 billion to $2.10989 trillion! Three months ago it was less than $900 billion! Now it's over 230% higher. Annualized...this is Weimar!!! (more than 2,600%)"

I also note that Circuit City is closing 155 stores in the U.S....jobless claims are at a 25-year high...and department store sales declined a stunning 10.9% in October!!!

In my report on Thursday, I mentioned the story that the Bank of England may have to lower interest rates to zero before all is said and done. Here's the Bloomberg piece on that issue entitled "King May Consider Most Radical BoE Rate Cuts Since World War II" and the link is here.

In another Bloomberg story, it appears that a report on Credit Default Swaps done by the Depository Trust And Clearing Corporation was "grossly incomplete"...and may not include up to "40% of the trades outstanding in the market." The story is headlined "Credit Swap Disclosure Obscures True Financial Risk" and the link is here.

And lastly...in his latest essay...Eric Sprott, chairman of Sprott Asset Management in Toronto, explains why gold is better than cash...a proposition that does not require much argument today in places like Iceland, Brazil, and Mexico and that, Sprott believes, soon will not require a lot of argument in the United States either. Sprott's essay is headlined "Cash or Gold?" and you can find it in PDF format at the Sprott site linked here.

If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State. - Joseph Goebbels, Minister of Nazi Propaganda

With interest rates heading towards zero all over the world at speeds that would take one's breath away, one wonders how long this money printing will take to show up in the real economy. Right now, all of the central banks' largesse is disappearing into the banking and financial system without a trace. And, with a credit contraction in full swing, it's not going to show up in the economy any time soon. But we are witnessing currency debasement on a massive scale, as most countries burn their currencies to save their respective banking systems...and try to revive lending. It won't work, but it's fun to watch.

All of us at Casey's Daily Resource Plus hope you have a good weekend and we'll be here on Saturday morning and we'll see you then.

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