From Ed Steer:

Gold didn't do a whole heck of a lot in the Far East yesterday. A smallish rally into the London a.m. fix [5:30 a.m. in N.Y.] got smacked, but managed to gain that back and a bit more by 9:00 a.m. on the Comex in New York. Then the usual not-for-profit seller[s] showed up, and that was it for the day. The low came in after-hours electronic trading...shortly after the Comex trading pits closed. After that, it managed to tack on a few bucks before Globex trading closed in New York at 5:15 p.m. Volume was so-so. Only 99,266 contracts were estimated to have traded, including a switch effect of 8,734 contracts.

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Silver's action yesterday was similar to gold's...with the exception that the 'low' for yesterday [such as it was] occurred in early morning trading in Hong Kong...not in New York. However, silver's London rally ran into the same Comex brick wall as gold, and at precisely the same time...9:00 a.m. in New York.

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Despite the fact that both gold and silver got it in the neck on Tuesday, open interest numbers for that day's trading were underwhelming. Gold open interest only fell 2,071 contracts to 365,271...and silver's o.i actually rose 15 contracts to 93,051. Hopefully these figures will be in the Commitment of Traders tomorrow. In another long conversation with Ted Butler, he feels that the tech funds in silver have pretty much been cleaned out...even though the price didn't get anywhere near the 50-day moving average...and that gold had a long way to go to achieve the same position that silver is now in. Yesterday's low in gold for the April contract was $900.40...with the 50-day m.a. at $895.93...less than five bucks away. The gold price would have to be dropped to about $880-885 [or a bit lower] to clean out the majority of the tech longs in the Non-Commercial category. Will that happen? One way or another, it's my bet that we'll find out what JPMorgan et al have in store for us sometime during the next 48 hours.

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There were 111 contracts delivered in Comex gold yesterday. JPMorgan was the biggest issuer [77 contracts] and also the biggest stopper [97 contracts]. So far in March, 1,061 contracts in gold have been delivered...which is quite a bit for a non-delivery month. In silver, 261 contracts were delivered. The big issuers were Bank of N.S. [120] and JPMorgan [126]...with the biggest stoppers being JPMorgan [116] and Goldman Sachs [106]. Comex warehouse silver stocks rose a hair under one million ounces. The U.S. Mint has reported production for part of the first week of March. So far they've punched out 26,000 one troy ounce gold eagles and 541,500 silver eagles. There were no changes in either GLD or SLV inventories.

In other news today I note that Blockbuster Video and Reader's Digest are filing for bankruptcy. And as was pointed out over at lemetropolecafe.com yesterday...the share price action of JPMorgan and General Electric are ominous. On a huge up day in the Dow, GE sank 32 cents to $6.69, after making an intraday low of $5.72. GE credit default swaps are 17% bid...19% offered! Doesn't GE still have a AAA credit rating??? Just asking! JPMorgan lost $1.71. JPMorgan has the biggest derivatives position on planet earth. It would take tens of trillions of dollars to bail them out...if they can be bailed out, that is. And the once mighty AIG closed at 43 cents yesterday. In a Bloomberg story the headline read "More Than 8.3 Million U.S. Mortgages Underwater as Values Sink"..."An additional 2.2 million borrowers will be underwater if home prices decline another 5%...Households with negative equity or near it account for a quarter of all mortgage holders." [Gee, I wonder what will happen when house prices fall another 25-50%...which is what I expect they're going to do before this all over. - Ed] And lastly, in a story out of The Jerusalem Post the headline reads "Israel seriously considering military action against Iran"..."Israel is seriously considering taking unilateral military action to stop Iran from acquiring nuclear weapons according to a report by top US political figures and experts released Wednesday. The report also says Israel's time frame for action is growing shorter, not only because of Iranian advances, but because Teheran might soon acquire upgraded air defenses and disperse its nuclear program to additional locations."

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Today's first story is from The Telegraph in London...and as you might already suspect...it's from Ambrose Evans-Pritchard. "European banks face a US dollar 'funding gap' of almost $2 trillion as a result of aggressive expansion around the world and may have difficulties rolling over debts, according to a report by the Bank for International Settlements." The headline reads "Europe's banks face a $2 trillion dollar shortage"...and the link is here.

It appears that some French politicians are receiving plain brown envelopes with 9mm bullets in them...along with very sinister notes. The headline from the dailymail.co.uk says it all..."You're all dead men walking": The sinister threat sent with a BULLET to French politicians including Sarkozy". Once again I thank Craig McCarty for sending me the story. The link is here.

In the next story from New Jersey, they haven't broken out the firearms yet, but they did tar and feather the mayor of Hoboken...in effigy, that is. The story is from nj.com [via the King Report] and the headline reads "Protest outside Hoboken City Hall reveals anger, frustration" [Anger...frustration??? You ain't seen nothin' yet, baby!!! There will be plenty more of that across the USA, and other countries, before this meltdown is over. - Ed] The link is here.

And lastly, a gold story out of Taipan of all places...Justice Litle, editorial director for the Taipan Publishing Group newsletters, argues in his latest essay that neither threats by the International Monetary Fund and U.S. government to sell gold [nor actual sales of such gold] are likely to suppress the gold price much, insofar as too many governments with huge and depreciating dollar surpluses probably would scoop up any and all gold made available that way. Litle's essay, "Why the IMF and Fort Knox Won't Put the Hurt on Gold," can be found linked here.

The natural progress of things is for liberty to yield and government to gain ground. - Thomas Jefferson

Yesterday was just another effort to rearrange the world's financial and monetary deck chairs. The fact of the matter is, that central banks must hyperinflate...or die. Plain vanilla inflation is no longer an option. I also noted that the US Treasury has got several large auctions coming up next week and it will be interesting to see how well gold will be allowed to 'compete' against them. Regardless...we're at, or very close to, a bottom...and as I said earlier...the next 48 hours of gold trading should tell us a lot.

All of us at Casey's Daily Resource Plus look forward to seeing you right here...bright and early on Friday morning.