There are just too many factors that benefit gold operating in the world today.

1-Great uncertainty
2-Coming massive inflation (deflation now)
3-Government defaults
4-Deficits beyond redemption or restoration
5-Coming stock market crash (Cardinal Climax)
6-Wars
7-And a list of other minor items

JB at Fortwealth writes, “Some of my clients have not yet been able to secure May silver contract deliveries from the supposedly “warehousing” bank involved, which only adds to our thoughts that there’s hanky-panky in silver-counting…and a certain warehousing bank seems to be stalling deliveries.”

George Ure writes, “Meantime, a friend of mine in the wholesale gold business in the Pacific Northwest is thinking that gold will hit $3,000 an ounce by the end of the year which wouldn’t surprise us in the least. The only question is will that come from massive inflation going on by then, or because demand for a paper currency alternative rockets? ‘Course it doesn’t matter to people who bought (as we did) silver when it was under $7 in 2005…”.

Nor does it matter to people who bought gold at $350 when stock brokers were still saying it was a yellow RELIC!

Fundamentally though, gold has a long way to run be it $2,500 or $5,000, it’s really the only SAFE HAVEN!

And those who are still in the stock market, you still have maybe a week to get out before the next leg down starts. And then comes the Cardinal Climax in August that could take the Dow below the recent lows of 6,500: Richard Russell says 4,400 isn’t out of the picture.

For those that decided to buy gold instead in 2001 for the then going price of $265, the return would be something like 459%.

Let’s see now, 29% or 459%. Hmmm!

As I write this before the gold markets close (1:50pm), gold is up $30 for the day at $1,230 (give or take a dollar or two of fiat money that isn’t worth the paper it’s written on). Comex gold futures Tuesday afternoon hit a new all-time record high of $1,232.50 an ounce. The previous record high of $1,227.50, basis nearby futures, was set in December of 2009.

Gold continues to benefit from safe-haven buying interest amid the European Union’s sovereign debt crisis, and on building bullish technical momentum. With gold prices now in uncharted territory, traders should look for higher volatility both on the upside and on the downside, but with a continued upside bias. I mean like UP, UP, and away. Why even Mahendra has come clean and confessed his sins-errors.

Mahendra wrote, “While stocks and base metals were collapsing as predicted, one commodity stood against all tides: gold. Last week all these uncertainties helped gold to stay hotly demanded. Last week we were wrong in judging gold’s trend because we thought that when everything comes down, gold will also be pressured by liquidities. But that did not happen.” Of course the new mantra will be that gold ahs TOPPED OUT!

Yeah right! NOT!

With nothing but crises up the road, while sovereign states going bankrupt (like Caleee-Forni-aaa too), deficits are going out of sight, and INFLATION about to become the eight hundred pound gorilla on the block, gold has nowhere to go but up. Will there be pull backs? Sure! Will the powers that be try and tamp down the gold bugs? Sure, but the operative word is TRY (not do).

The king has no clothes and you can put humpty-dumpty (The Euro for one) back together again. Richard Russell wrote yesterday, “Save the euro, must save the euro. All the world’s central banks rush to save a fiat currency. If the euro should collapse, it would demonstrate the inherent vulnerability of a leading fiat currency. The central banks and the IMF have put up nearly one trillion dollars to bail out Greece, but more important, to show the world that fiat currencies are “safe” and here to stay. Remember, the business and power of central banks lies in their fiat, non-intrinsic money- money they can create at will). To hell with Greece, the euro, therefore, at all costs, MUST be saved”.

Sorry Charlie. Oh yes, and have you protected your 401k- by divesting yourself of it?

Up 122, down 159, up, 143, and today down 225!

Of course you might be saying, hey, that only a loss of 120 points for four days. Right! And that’s just the “warm up”. The “distribution days” are now more than numerous which is another way of saying that the institutional investors are SELLING into this market.

Could Richard Russell and a host of others be right in saying that we’re been in a “bear market rally” since March 9, 2009? We won’t have to wait much longer to find that out. And have you been checking out the S&P P/E?

The price/earnings ratio for the S&P is above 20. Historically, when the P/E for the S&P is above 20, stocks, in general, are expensive and end up providing buyer with losses. The last I checked, the HERD (of bulls) are running for the cliff with the CALL to PUT ratio being more than 2-1.

There are two ancient expressions that might be worth mentioning here at this point.

>Sell in May and go away
>The TOP has been in for some time now and the bigger the TOP, the bigger the DROP!

What’s a person to do? Who knows except that PAPER never has been a good asset to keep one at the tables. If you stay at the tables long enough (can you say Vegas?), you’ll eventually run out of money. I might mention though this yellow metal called GOLD! It got nicked a little today; however, it’s been up 30% over the last twelve months- up $270 an ounce.

Hmm.

Let’s see now. A solid, physical investment that’s headed to $2,500 to $5,000 or the wild roller coaster ride of the current stock market? I guess it all depends upon how much of a gambler you are and how much a thrill you get out of a “white knuckle” ride.

There’s two dynamics in the above title to today’s commentary. A mutiny is a rebellion against legal authority, especially by the military- refusing to obey orders. Whose orders? Well, in this case the Commander-in-Chief, otherwise known as Barack Hussein Obama. A revolution is the overthrow of a ruler or political system. Can you say the Democratic Party? Can you say Tea Party?

Can you say web bot linguistics? Say what?

Those who are familiar with Cliff High (HalfPastHuman web site) and his web bot linguistics time machine know that the revolutionary meme has been showing up for some time, especially around July 4-8. George Ure (Urban Survival web site) has chronicled this many times; however, what’s it all mean? Let’s look at some recent events and see if you can connect the dots.

>Nov. 2009 we saw the suicide attack at Ft. Hood
>Feb. 2010 we saw the suicide attack on the Austin IRS office building
>Mar. 2010 we saw the suicide attack outside the Pentagon
>April 2010 we SEE a Congress that has 9-11% approval ratings and polls showing that more than 80% of the citizenry feel that the Federal government (as opposed to State and local) is dysfunctional and doesn’t work.

Add to the growing discontent the fact that more than 26,000,000 Americans (once workers) have exhausted most of their savings if not all, many have lost their homes, and more are becoming desperate: revolutionary-style desperate.

Add to the above the fact that Obama has now put his cards on the table so the world can see what hand he’s playing (nuclear disarmament) leaving us and especially our military vulnerable. Have you read the Armed Forces Journal recently? The February 201 issue has a copy of the United States Constitution along with the title “Dereliction of Duty”. Additionally you can read, “The U.S. faces a number of difficult challenges in civil-military relations that carry with them profound effects on our national security. Among these issues are declining popular support for the wars in Iraq and Afghanistan, growing isolation between the U.S. military and the society it serves, and unresolved disputes over the limits of executive authority.”

Unresolved disputes over limits of executive authority is code for… MUTINY!

Who would have belied that we would find America where we do today? And my take is that TODAY is much better than what TOMORROW potentially has in store and I’m talking about the next nine months of 2010, not December 21, 2012.

When it became obvious that the Obama administration was going to take a SOCIALISTIC approach and use the economic crisis as an excuse to take over more and more of the capitalistic turf, I moved my prediction on gold from $1,500 an ounce to $2,500 an ounce…..provided the U.S. didn’t default before then.

We’ve done nothing but move head long into a default mode; however, I can’t believe that the “powers that be” are that stupid!

Thus, let’s subscribe to a wild conspiracy theory or maybe just a common sense approach to the trillions of dollars of debts that the United States is building up that cannot be paid off by any manner of taxation. And since China, the new 800 pound gorilla on the block owns close to TWO TRILLION in worthless U.S. treasuries, they surely don’t want to see a default. The slow death by a million cuts (which is what’s going on currently with the US$) is their death of preference.

But, let’s consider this thought.

The US Treasury has a declared hoard of 261.5 million ounces of gold. What if we quit pretending that it was worth $35 an ounce (you know, we go real about life and valuations) and we priced it at “market”. But, before we do that, let’s add another piece to the puzzle. According to the US Dept. of Treasury (as of 2008) the value of US currency and coin in circulation is 85.2 billion dollars with 70% of this being located outside of the US.

If the US Treasury were to back the total of US dollars in circulation worldwide with its 261.5 million ounces of gold; that gold would be priced at 3530 dollars an ounce. However, if gold were to reach 5000 dollar an ounce, and with circulating currency at 923 billion, that would seem a propitious time to announce a new monetary policy. Can we do that? Can “they” do that? You betcha!

At $5000 gold the Treasury’s gold would be valued at more the 1.4 times the existing dollars in circulation. The US could then proclaim that it would redeem these dollars at the market price of gold, whatever that might be. That would still leave the Treasury with approximately 384 billion dollars in gold if the market price were $5000 an ounce.

Works for me, especially if I own some gold coins, currently at $1,150 an ounce (which is up $308 an ounce) over the last twelve months. Hey, that’s a 36% return in a year. You doing better?

Today, gold opened down $20 but clawed back to closing down just $10. So, what’s going on here? Is this a correction or some sort of “plunge team” manipulation?

First off, nothing goes straight up that doesn’t have a BAD ending, so periodic corrections are not only needful, but helpful. But, looking at the grand scheme of things, the government needed a good day for the US$ (there aren’t many left you know).

The big EXCUSE for the fall of gold and the rise of the US$ was the low unemployment numbers of a loss of only 11,000 jobs! Thus the unemployment rate dropped from 10.2 to 10%. Of course the real number for unemployment is 17.2%

Don’t let the 11,000 number fool you, nor get you being optimistic. The second leg down starts in the 1Q of 2010.

So, what’s a person to do that has a few Eagles stashed away, or maybe Maple Leafs?

The answer to that question depends upon each person’s financial picture. If you want to take profits then you should do it when you HAVE profits and not try and get greedy. If you’ve got a steady income and bills are being paid, hang on! In fact, if you believe as I do (here it comes), I’d be buying one every drop, especially a drop of around $65 like we’ve just seen.

And by the way, Houston Numismatic is open tomorrow (hint, hint).

Of course people like Mahendra say gold is headed to $550. Me? I see the US$ as dead but the funeral isn’t planned until around April of 2010. My crystal ball gazing has gold going to $5,000 an ounce somewhere over the next 3 years, maybe sooner than later. During that same time frame count on the government (ours) trying to confiscate gold once more; however, that will fail as our government is going to have more problems that they can handle (already do have).

Correction? Sure. Manipulation? Probably.

That said, even after the correction, gold is up $60.50 in the last 30 days and up $403.10 (54%) in the last twelve months. You know where you can do better than that?

The US$ has shed another 40 cents at the opening bell this morning as it slowly slip-slides away.

Let’s see now, the US$ has lost 97% of it’s value in the last 97 years (since the Fed was created in 1913 to protect the US$). Thus, gold futures for February delivery advanced to $1,200.50 an ounce on the New York Mercantile Exchange’s Comex division. Ole Hansen, senior manager at Saxo Bank, said: “The fact that we are seeing the dollar weaken is helping to drive gold.”

Oh yes, and don’t forget the coming hyper inflation, the massive trillions of dollars in debt, and the military shambles in Afghanistan and 150+ other places where the United States has a military presence. So, since we’re $12,000,000,000,000.00 in debt, what’s another trillion over the next ten years? Let’s go ahead and add a national health care program.

Let’s add another 50,000,000 uninsured people to the medical program. I’m sure we can find the added and needed doctors to take care of them. NOT!

Everyone was waiting for gold to CORRECT and they have been WAITING for five years now; however, the way gold keeps recovering suggests there is still a lot of buying lurking in the wings (among) people who missed the opportunity to get into the market in the first place. If you believe Richard Russell and Harry Schultz as an example, gold is going to $2,500+. If you believe Mahendra, gold is going to $550.

Place your bets gentlemen (and ladies), we’re about to roll the ball and throw the dice for today!

The sun is setting for America! The sun has set for the US$!

The turn towards SOCIALISM that Barack Obama and the liberal wing of the nation is leading us is the next to the last nail in the coffin. Can it be changed? Yes! Will it be turned around? Doubtful! There are too many people here in America on the Federal Dole! Too many people are not working and living off of entitlements to which they are not entitled. But, in the Oriental world, in the Far East, we have a totally different mentality not too unlike what existed in America (in some ways) two hundred years ago.

China, India, and Russia are HUNGRY!

China, India, and Russia are also seeing that PAPER MONEY (which isn’t real money) is FIAT-BOGUS JUNK! Sure, they all have their own PAPER, but they are also smart enough to see where things are going, especially in light of Barack Obama and the SOCIALISTIC turn wherein America and the Fed just keeps printing money, taking over the capitalistic landscape, and setting us up for such HYPER INFLATION that we’ll not recover.

What this could mean is not gold $1,500 or $2,500, but gold at $4,000 an ounce somewhere a few years down the road. Or is Mahendra right and gold will be at $550 sometime in 2010?

Stephen Jen is an expert on sovereign wealth funds from his days at Morgan Stanley. The gold story — essentially — is that the rising economic powers of Asia, the Middle East, and the commodity bloc are rejecting Western fiat currencies. China, India, and Russia have all been buying gold on a large scale over recent months. Is anyone watching? These new players account for almost all the accumulation of foreign currency reserves worldwide over the last five years, so what they do matters enormously.

After crunching the numbers, Jen found that the share of gold in their reserves is just 2.2pc compared to 38pc for the Old World (perhaps we should just call them the deadbeats from now on). They (China, India, and Russia) would have to buy $115bn of gold at current prices to raise their bullion to just 5pc of total reserves, and $700bn to reach just half western levels.

But, they will, and they are on their way which means that at current prices such a move in the tiny global market for gold would send prices into the stratosphere. See what I’m saying here?

China alone accumulated $150bn in reserves in the third quarter, pushing the total to $2.3 trillion. These are colossal sums. China is amassing almost as much each month as the United States ($63bn) has built up in the entire history of the country. True, the US understates the value of its gold, but you get the picture. Something big is going on. Something really BIG!

So far, China has just 1.7pc of its reserves in gold, or 34m troy ounces. Chinese officials say that they are buying on the dips so as not to crowd out the market, which means of course that gold cannot “crash” unless you think China itself is going to crash — or stop building reserves (which is possible: Albert Edwards from SocGen says China may be in current account deficit next year, leading to a yuan move — down, not up). With the news out of Dubai (default) who knows what’s possible (or how much in trouble the whole world really is)?

$4,000 gold, or a world-wide depression? I vote for the former.

Gold is up at the opening bell this morning $10. Gold is currently selling at $1,117 an ounce!

The US$ which has had its fame is slowly sinking in the West. Once it becomes obvious that it is worse than FIAT money, its TRASH, then gold can really take off. The US$ has fallen to the $74.90 level while the Euro is now over $1.50. My web site introductory banner prediction of $1,500 gold which has now been there for some 4-5 years, isn’t looking so impossible now as compared to when gold was at $600 an ounce.

We are living in unprecedented times. As Richard Russell wrote yesterday, “I’ve been on this earth for almost 86 years. I was around during the Jazz age, I was around during the Great Depression, I participated in World War II, I struggled through the post-War recession, and starting in the mid-1940s I was an intense student of the stock market. What’s happening now is the greatest transfer of power and wealth that I’ve seen in my lifetime.”

The world is awakening to the US con game of printing money, spending trillions that we don’t have and then borrowing from them with money that have lost 98% of it’s value in 90 years. Nations today realize that too many dollars were being created, all in an effort to levitate the sinking US economy. Too many dollars means a weakening dollar. Almost every nation possesses dollars as part of their reserves. As the dollar weakened, nations sought to diversify out of dollars — and into other currencies including gold.

Goldman Sachs coined a name for the new powerful nations. They were called the BRICs — Brazil, Russia, India, and China. These BRICS and now falling on our head!

The Financial Times recently quoted Luis Ignacio Lula da Silva, Brazil’s president, as seeing inspiration in the model of the EU, noting that only two generations ago France and Germany were at war. “That’s how we will build a strong alliance among the BRICs. At our first meeting I suggested we should begin trading in our own currencies. We don’t need the dollar. It’s just cultural, and it can change.”

It’s not just the US$ that is FIAT-TRASH, it’s that ALL PAPER currency is worthless. Is there any wonder that GOLD has been advancing and furthermore, will continue to do so?

It’s kind of hard to find a better return!

The International Monetary Fund has sold 200 tonnes of gold to the Reserve Bank of India for $6,7 billion, quietly executing half of a long-planned bullion sale that has threatened to slow gold’s ascent. The deal, which surprised traders who expected China to be the most likely buyer, will relieve the gold market of some uncertainty over how and when the IMF would sell 403,3 tonnes of gold, about one-eighth of its total stock.

The deal will increase India’s gold holdings to the tenth largest among central banks.

It also fuelled speculation that other governments, including Beijing, may be ready to diversify their reserves even at near-record gold prices, helping soak up IMF supply that the fund may otherwise be forced to sell on the open market.

Why not, the G-20 is meeting to try anbd figure out how to DUMP the DOLLAR and bring on a new world currency. Thanks a lot Dubya and Obama for taking us down the road to ruin! Oh wait, you had a lot of help from Congress and the Federal Reserve whose job it is to protect the US$.

What a mess we are in!

In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.

This is not NEW news, just more PUBLIC news!

The United Nations called on Tuesday for a new global reserve currency to end dollar supremacy which has allowed the United States the “privilege” of building a huge trade deficit. “Important progress in managing imbalances can be made by reducing the reserve currency countries ‘privilege’ to run external deficits in order to provide international liquidity,” UN undersecretary-general for economic and social affairs, Sha Zukang, said.

As I write this article Tuesday morning, October 6th, gold is up more than $25 an ounce touching $1,045!

Gold futures hit a new record high on Tuesday, lifted by not just weakness in the dollar, but also after Australia hiked interest rates. Why are they raising interest rates, and why will America have to do the same sooner than later? It’s called INFLATION! We’ve flooded the markets with US$’s that are worth less and less.

So, who wants to hold on to fiat PAPER that is losing value when you can buy some bright coins that have increasing value?

Remember that ten years ago gold was $$250 an ounce. Today gold sits at the $1,000 level. Let’s look at the BIG THREE that will continue to propel gold:

1-The Death of the US$
The US$ is toast! Rumors have it that several countries are already preparing new currencies that they can trot out over the next 1-3 years in anticipation of the death of the US$. World Bank President Robert Zoellick said the United States should not take the dollar’s status as the world’s key reserve currency for granted because other options are emerging. Zoellick said global economic forces were shifting and it was time now to prepare for the fact that growth will come from multiple sources. “The United States would be mistaken to take for granted the dollar’s place as the world’s predominant reserve currency. Looking forward, there will increasingly be other options.”

2-The Death of Low Inflation
Ben Bernanke says that inflation is under control. Don’t believe it. Believe that he’s trying to figure out how to drain the “liquidity swamp” without causing that feared “W” in economic parlance. There’s really no way that one can open a down pillow, dump it’s contents from the empire state building and then go down to the street and put all those feathers back in the pillow case. In other words the horse has long since left not just the barn, but the entire ranch. The only question is will inflation be 10% or more like 20%?

3-The Death of Peace & Security
If there is anything the stock market hates it is uncertainty. And with the Iran rhetoric increasing, with North Korea feeling more empowered, with Hugo Chavez buying as much military hardware as he can, with India ready to go to more sophisticated nuclear potentials, with America about to run from Afghanistan, and with an America that no one is any longer afraid of- we’ve got trouble right here in river city, spelled with a capital “T”.

So, regardless of what Mahendra sees in the stars, what I see here on planet earth is nothing but fertile ground for gold to move from $1,000 to $1,500 an ounce and then who knows where from there.

Then came today- Friday!

I couldn’t believe my eyes when I opened the US$ morning report and saw that the US$ had dropped $1.02. So, I wasn’t surprsied when I opened up the gold report and saw that it was up $20.50! As I write, two hours before the close of the markets, gold is up $19.60 to $957 and ounce.

Nice move!

Gold sales in the form of old jewelry and other used pieces of metal probably dropped to about 350 metric tons in the second quarter as some owners declined to sell at lower prices, GFMS Ltd. said.

Total scrap sales fell “over 40 percent” from the first quarter as disposals in Turkey “dried up,” GFMS said today in an e-mailed statement. Bullion prices in the country declined 4 percent in the second quarter from the prior three months, said Philip Newman, an analyst at the London-based metals researcher.

Scrap sales were a record 1,218 tons last year as the world recession spurred some owners to raise cash and others took advantage of higher prices, GFMS said in April.

Gold for immediate delivery rose to an 11-month high of $1,006.29 an ounce in February as investors sought a haven against stock-market losses. So, we’re still off the highs but at least the small dip of last week has been wiped out in one day- GOOD FRIDAY!

But, let’s get back to the REAL DEAL- gold coins and or bullion.

As an investor I’m a buyer of a few coins at this level. We will probably see a few more months of a sideway movements (otherwise known as a trading range) before gold looks at that $1,000 level for the third time (3rd time is a charm). When gold passes the $1,000 once more, I expect it to not look back. When will that happen? You tell me.

The yellow dog has been down $45 in the last thirty days and that’s a good deal. As Richard Russell reported, “Gold continues to be interesting. A daily chart of gold going back six months shows the 50-day MA is rising and above the rising red 200-day MA. RSI and MACD are in bullish positions, and it remains to be seen whether gold will (once again) try for the “over-one-thousand area. The obvious question is whether gold can rally to break out above the resistance at roughly 1000. This is a potentially very powerful formation, and gold is at an exciting juncture. Hard to believe that this formation won’t eventually break out to the upside, but gold is the most emotional of all tradable items.”

The Fed does not want to see gold spurt higher, and there’s no telling what the Fed might do to halt gold’s progress, but, the supreme irony is that the Fed and the government want a lower devalued dollar, but they don’t want the world to see what they’re doing via surging gold. They can’t have it both ways. It’s an exciting time!