Simmering Hope

WASHINGTON (Commodity Online): Politicians in the United States are coming out in the open demanding constitutional remedies to curb manipulation and rampant speculation in gold prices. Congressman Ron Paul said that the US Federal Reserve and the Treasury department have been manipulating gold prices to deflate the price of gold.

Congressman Ron Paul of Texas this week introduced legislation designed to curb the ability of the President or the Treasury Secretary to manipulate worldwide gold prices. The “Monetary Freedom and Accountability Act” restores proper congressional authority over gold policy by requiring that body to vote its approval before the President or Secretary buys or sells gold.

“The Constitution grants authority over monetary policy specifically to Congress alone, not to the executive or the administration,” Paul stated. “Yet Congress has neglected its duty for decades, and now our foolish fiat money system is run without challenge exclusively by unelected Treasury and Fed bureaucrats. As a result, the Treasury has been able to engage in the buying and selling of gold to manipulate the worldwide market price. Gold is very important to markets and investors in America and across the globe, and Congress should not allow the administration to interfere in the gold market behind closed doors.”

The private Gold Antitrust Action Committee held a press conference this week to discuss federal manipulation of gold markets. The group has uncovered evidence suggesting that the Federal Reserve and the Treasury department, operating through the Exchange-Stabilization fund and in cooperation with the International Monetary Fund, have been systematically working to deflate the price of gold.

Because rising gold prices are seen by investors as a barometer of inflation, the Fed has purportedly suppressed prices to disguise the true nature of the financial bubble of the 1990s.

“The Fed wants all of us to think the stock market is not overvalued, and that credit and monetary expansion can create lasting prosperity,” Paul concluded. “My bill will make it harder for the Fed and the Treasury to manipulate gold prices, which should always serve as an unbiased indicator of the true health of world markets.”

As per December 10, 2009, let’s see what are the short sellers playing in the near future, courtesy of Douglas A. McIntyre from 247wallst.com

Short sellers sharply increased their gamble that financial stocks would fall based on short selling data from NYSE and Nasdaq on the last day of November.
Shorts pushed into Citigroup (NYSE:C), increasing their positions by 11% to 216 million shares making the bank stock the most shorted among all US companies. Bets against Bank of America (NYSE:BAC) rose 13% to 75.5 million shares and 2% against Wells Fargo (NYSE:WFC) to 77.2 million.

Short selling made very large gambles against the big companies in the retail sector probably based on the belief that holiday sales will be weak. Shares short in Wal-Mart (NYSE:WMT) rose 37% to 28.2 million. The short interest in Macy’s (NYSE:M) was up 13% to 40 million shares. Shares short in Barnes & Noble (NYSE:BKS) rose 15% to 17.1 million The short interest in Office Depot (NYSE:ODP) was higher by 20% to 21.7 million, and shares sold short in Nordstrom (NYSE:JWN) were up 15% to 21.8 million. However, shares short in e-commerce leader Amazon (NASDAQ:AMZN) dropped by 13% to 17.1 million.

Short sellers appear to think that the results for airlines and hotels will be good in the near term. Shares sold short in Southwest (NYSE:LUV) fell 9% to 26.1 million. The short interest in Marriott (NYSE:MAR) was down 7% to 33.2 million. Shares short in Delta (NYSE:DAL) fell 15% to 24 million.

Among big tech stocks, shares sold short in Dell (NASDAQ:DELL) rose 35% to 37.9 million. Most other changes in hardware and software stocks were modest. Share short in Microsoft (NASDAQ:MSFT) fell 18% to 64 million. The short interest in Intel (NASDAQ:INTC) fell 4% to 52.6 million. Shares sold short in Cisco (NASDAQ:CSCO) rose 2% to 42.4 million. The short interest in Nvidia (NASDAQ:NVDA) rose 3% to 34.3 million. The short interest in Symantec (NASDAQ:SYMC) was down 1% to 21.7 million. Shares short in RIM (NASDAQ:RIMM) rose 1% to 22.3 million.
The short interest in Oracle (NASDAQ:ORCL) fell 14% to 21.6 million ahead of the EU decision on the company’s buy-out of Sun (NASDAQ:JAVA). The market reacted well to the restructuring of Electronic Arts (NASDAQ:ERTS) as its short interest was up only 2% to 21 million shares. Investors are betting that Palm (NASDAQ:PALM) will have a rough fourth quarter sending shares short up 19% to 56.5 million.
Among tech giants, shares short in Apple (NASDAQ:AAPL) dropped 14% to 13.5 million ahead of the holiday sales period. Shares short in Google (NASDAQ:GOOG) fell 11% to 3.8 million.

Is Gold into a seasonal pullback or is it something worse?
Are any real, objective reasons to believe that the US economy is in recovery as mentioned by Ben Bernanke?

Let’s see some facts, courtesy of USDebtClock.org.

US Population: 308,112,749
US National Debt: over 12 trillion
Official Unemployment: 15,403,107
Actual Unemployment: 26,467,659
Food Stamps Recipients: 37,887,326
Foreclosures: 782,592

Over the past days, gold was in pullback. Healthy, as considered by various stock market gurus, scary as considered by me. Having invested in gold mining companies, the pullback was anything but a warm feeling. The question is: are we going to see a Christmas rally in gold price?

The gold bears are cheering now, but for how long?

On December 2, 2009, a key figure at the People’s Bank of China made the following remark:
“We must keep in mind the long-term effects when considering what to use as our reserves,” Hu Xiaolian, a vice-governor at the People’s Bank of China, told reporters in Taipei, when asked if China had plans to increase its gold holding in its foreign exchange reserves.
“We must watch out for bubbles forming on certain assets, and be careful in those areas.”

Interesting enough, before the Chinese talked about gold being in a bubble on December 2nd, they were talking about needing to buy more. But naturally, why would they be eager to buy at such a high price when India purchased 200 tons of IMF gold and paid only $1,045/oz. for it.
Immediately after that, the price has skyrocketed to $1,227/oz. It’s pretty clear that speculation has pushed prices up after the Indian purchase and as clear it is that the Chinese will wait for a correction before they buy, and if the correction does not happen naturally, a ‘bubble gold’ announce may do the trick. The lemmings with weak hands are jumping off the cliff, and the Chinese are getting the supply they need to buy 6000 tons of gold cheaper.
Between Chinese ‘gold bubble’ comment and Bernanke’s comment that the U.S. economy faces “formidable headwinds,”, gold has nothing else to go but down.
Let’s hope that after the weak hands were dealt with, the strong ones are going to push the gold up once again.

The following article is from Stockhouse website.

Stockhouse Canadian Small and Micro-cap Stock Report for Monday, December 7, 2009

TORONTO (SHfn) – A natural gas discovery was ‘sweet’ news for some shareholders Monday, while oil flowed for one junior.

Sure Energy (TSX: T.SHR) shares climbed 20% to 48 cents on Monday after the oil and gas explorer/producer said it has made a sweet dual zone natural gas discovery in the Peace River Arch area of Alberta. The 100% working interest well production flow tested for eight days at a combined stabilized rate of 3.5 MMcf/d from two separate zones. This discovery well is anticipated to begin production at a rate of 2.0 MMcf/d (335 BOE/d) net to the company.

As well, shares of International Royalty (TSX: T.IRC) shot up 50% to $7.06 as the mineral royalty firm reported that it has been informed of the intention of Franco-Nevada Corporation to, directly or indirectly through a wholly-owned subsidiary, make a formal all-cash offer to IRC shareholders to acquire any or all of the outstanding common shares of IRC for $6.75 cash per share.

Talon Metals (TSX: T.TLO) shares powered 26% higher to 58 cents after the explorer/developer said it has concluded an agreement in which it has a right to acquire a 75% interest in a subsidiary of Lara Exploration, that holds all 13 of Lara’s potash exploration licences (including five applications for potash exploration licences), in Brazil.

Vulcan Minerals (TSX: V.VUL), meanwhile, announced that Vulcan-Investcan Red Brook#2 in Newfoundland has flowed natural gas to surface on three drill stem tests. This is the first flow of natural gas to surface for any petroleum well in the Bay St George basin and the company claims it “clearly demonstrates the hydrocarbon potential of this under-explored area.” The well will be cased to a total depth of 1965 metres for further evaluation and determination of accurate sustainable flow rates in order to fully assess this discovery. Vulcan stock popped 28% to 68 cents.

And, Nexstar Energy (TSX: V.NXE.A) Monday reported on developments with respect to its Cardium horizontal light oil exploration and development program in the Pembina area of Alberta. During a three-day test of its 8-16-48-5 W5M Pembina Cardium horizontal oil well, the well flowed frac oil and new oil at a controlled rate of approximately 850 bbls/day. Management expects the well to be placed on production within 30 days at an initial rate of between 200 to 300 bbls/day. Its shares jumped 11% to 25 cents.

Top Canadian Small/Micro-cap Advancers (as of 4 PM Eastern)
Tanqueray Resources (TSX: V.TQY) + 133%
Northern Spirit Resources (TSX: V.NS) + 47%
Darnley Bay Resources (TSX: V.DBL) + 44%
X-Ore Resources (TSX: V.XOR) + 36%
Int’l Sovereign Energy (TSX: T.ISR) + 34%

Top Canadian Small/Micro-cap Decliners
Richards Oil & Gas (TSX: V.RIX) - 50%
Silver Shield Resources (TSX: V.SSR) - 33%
Copper Mesa Mining (TSX: T.CUX) - 33%
Radius Resources (TSX: V.RAX) - 27%
Sola Resource (TSX: V.SL) - 25%

Well, by now everybody knows what the smart minds (mine included) suspected from the very beginning, and that is that the car smashing incident was the continuation of a domestic dispute.
Tiger Woods said ‘I am sorry’ and according to some sources forked in an immediate $5 million present to his wife as a token of his appreciation for her continuous efforts to save the face of the family, along with a shortening of the length of the pre-nuptial agreement from 10 years to a more manageable 7 years.
In danger are the huge endorsements which are the major source of Tiger’s wealth. To keep them who knows how far is he ready to go? I guess a public apology won’t suffice, especially after the paparazzi started digging for more.
Until more dirty details of his extra marital affairs are ready to surface, let’s enjoy the jokes.

“Crouching Tiger, hidden hydrant”

What does Tiger Woods have in common with baby seals? They both get clubbed by Norwegians.

Thats the first time Tiger Woods has failed to drive 300 yards.

Tiger Woods crashed into a fire hydrant and a tree … he couldn’t decide between a wood and an iron.

Perhaps Tiger should have used a driver.

I find it’s a nightmare driving at 2.05am: sometimes you can’t see the Woods for the trees.

Tiger’s wife went for him over a birdie.

What was the second worst part of Tiger’s car accident? The police found the driver in the trunk.

What were Tiger Woods and his wife doing out at 2.30 in the morning? They went clubbing.

Whats the difference between a car and a golf ball? Tiger can drive a ball 400 yards.

Finally, the holier than thou Tiger Woods is being thrown to the wolfs. I bet that the guys who built his 155 ft yacht and got sued for using Tiger Woods’s name to promote their business, are having a ‘hooray’ moment.
Karma is a bitch.