Well if I had spare cash to work with, I would pull the trigger to buy more ECU in this price range. My views have not changed: I still think this market is completely rigged from top to bottom, and I do not expect to see any positive momentum at all for at least a year or two. But I think ECU is going to pull through and survive this, and the value of the resources controlled by the company are far in excess of the current market cap. At the end of the day, it is the physical gold and silver that will be the most valuable, and then the large proven deposits which can be extracted by conventional mining that will be in great demand.

When I commented earlier this week that the game has changed, it is because I am now convinced that the malignant interests who suppress the metals will fight to the death before the scheme is ended. Those who have been in this sector since 2002 will know that manipulation has been a factor throughout the bull market, but it was more in the order of a fighting retreat, punctuated by short, sharp bear raids. The metals were held up, but they always recovered and went on to new highs.

Why has the game changed? Well, the damage continues as the credit crisis works its way through. It was fine to allow gold to rise when the entire commodity space was in a bull market. Gold was not even the best performer so the rigging was profit motivated. Now that the seems are coming apart on almost the entire economy, the rigging has become an issue of survival. Gold must NOT be allowed to rise whatsoever, or attract any attention at all. If the retail investors get a sniff that gold represents a safe haven, then money will be yanked from bonds and banks and flow into gold, and that is the one migration that cannot be encouraged when so many countries and currencies are on the brink.

Also, we should note that the price of gold was smashed deliberately with an obvious price target. The pattern for weeks has been to pound the metal lower with physical gold sales, even as there was buying of paper futures to close outstanding shorts. If a large open interest had been in the money for gold futures, then a big chunk of inventory gold may have been called away for delivery. Again, that could not be allowed to happen at any cost. So the price of gold was pounded down week after week, in obvious fashion I might add, just to ensure that the majority of open futures contracts expire worthless. The exercise was costly in terms of diminishing CB and BB phyiscal gold supplies, but it achieved the desired goal of keeping interest away from gold, continuing the illusion that there is abundant supply, and allowing clueless idiots to suggest that gold is being sold due to hedge fund liquidation and deflationary forces.

As long as we are in crisis mode, and as long as there is one ounce left in the CBs to dump, then this will go on. I have absolutely no optimism left that we can depend on regulatory oversight to end this scam. The treasury can throw money around in the trillions, the Fed can print money 24/7, and inflation can run rampant, and it will not amount to a hill of beans for our sector. As long as the invisible hand of manipulation is able to continue, then we are dead in the water and will have to just put up with getting robbed blind.

So again, my strategy is to hold my juniors from here. I fully expect some will go bankrupt and I will take a 100% loss. But I also know they are so close to zero in many cases that the risks are worth holding on. The ones that survive (and I think ECU will be one of them) will regain my losses for the entire PF once the sector is rightside up again.

My final hope for a quick resolution is based on the knowledge that the supply of gold available to dump is finite. CBs have already unloaded a large chunk of their holdings on the way up to keep the scam going. European banks are not selling much gold now at all. Worldwide production has dropped sharply, drawing even more physical gold inventory down. Investment demand worldwide is running at record levels. So I do not know if the crooks can keep up their act for another year, or 10 years. I just know that it cannot go on forever. IF China or other nations decide to buy up a chunk of gold for their reserves, they could take out every ounce the CBs have left and end it overnight.

I am going to wait. But I am not going to pretend that I am optimistic.

cheers!

mike