Today Sarkozy gave a speech at Davos in which he said:

"The disappearance of the euro would be so cataclysmic that we can't even possibly entertain the idea ... Europe has had 60 years of peace and therefore we will never let the euro go or be destroyed. ... I speak as much for my German friends as I do for the French"

As the Eurosystem bailouts and debts increase, it becomes increasingly important to maintain ultra low carrying charges. Increasing servicing costs would compound the problem. Since Gold is the regulator of interest rates, a rising Gold price forces debtors to increase the bribe (rate of interest) offered. Gold must therefore be made to appear dangerous and too volatile to be seen as a safe haven.

Although we may not be told about this for awhile, I think it now pretty obvious where the bullion component of the current take down is coming from. Gold is held in reserve for emergencies and the cataclysm Sarkozy is trying desperately to avoid would probably qualify as an emergency requiring the mobilization of French Gold reserves.

Cheers from Auckland,Ed Wener

Bill Murphy"s Close

"The assault on gold is as vicious as I have seen in the last 12 years taking into account the outside markets are GOLD SUPPORTIVE. If our information is correct, in addition to The Gold Cartel the bombing is coming from a G-8 French led initiative. What is important to keep in mind is how bad things must really be for officialdom to go all out in their efforts to SHOOT THE MESSENGER. What a bunch of bureaucratic sad sacks. In the years ahead, this will go down as yet another central bank faux pas … just as dumping their gold below $300 was a blunder.

All that said, the silver action is superlative. You can feel it wanting to explode, but the gold selling is just too much for the silver price at the present time. After all the bums have thrown at silver, it is still $27! And it is at $27 with the open interest very near its recent lows and WAY, WAY off its highs. IMO it is only a matter of weeks and months before the silver market seizes up and goes berserk to the upside … dragging gold along with it in the other direction this time."