A decision by the Reserve Bank of India to buy 200 tonnes of gold from the IMF for $6.7 billion does not reflect a preference for the How to invest in gold metal over the dollar, the finance minister said Tuesday. The International Monetary Fund kicked off its planned sale of more than 400 tonnes of gold with an announcement Monday that it had sold almost half to India, the world's biggest gold consumer, at near-record prices. The purchase "doesn't mean we don't prefer the dollar any more or like gold any better," Finance Minister Pranab Mukherjee told reporters in New Delhi. Some analysts expect central banks around the world to diversify their holdings and purchase more gold as a shield against a weakening dollar. [Note: It will be real interesting to see what other countries start buying up gold.]

One lesson from the Great Depression is that you should never underestimate the destructive power of bad ideas. And some of the bad ideas that helped cause the Depression continue to influence economic debate today. In the early 1930s [the “gold-standard mentality”] led governments to raise interest rates and slash spending, despite mass unemployment, in an attempt to defend their gold reserves. [And] a modern version of the gold standard mentality is exerting a growing influence on our economic discourse [that] could undermine our chances for full recovery. Consider the falling dollar: [On] the Wall Street Journal’s editorial page, you’re told that the falling dollar is a sign that the world is losing faith in America (and especially, of course, in President Obama). And in practice the dollar’s decline has become a stick with which conservative members of Congress beat the Federal Reserve, pressuring the Fed to scale back its efforts to support the economy. There are worrying signs of a misguided monetary mentality within the Federal Reserve system itself-- [like] a number of statements from Fed officials calling for an early return to tighter money, including higher interest rates. It’s crucial that we don’t let this mentality guide policy. We do seem to have avoided a second Great Depression. But giving in to a modern version of our grandfathers’ prejudices would be a very good way to ensure the next worst thing: a prolonged era of sluggish growth and very high unemployment.

The International Monetary Fund said its executive board endorsed the sale of 403 tons of gold, worth an estimated 13 billion dollars, to boost its lending capacity to poor countries. The IMF said in a statement the sales would be “in a volume strictly limited to 403.3 metric tons, with these sales to be conducted under modalities that safeguard against disruption of the gold market.” [Note: As WRH says. This move is only to get the price of gold down and return investors to the equities markets.]

Russia is extracting more oil than Saudi Arabia, making it the biggest producer of "black gold" in the world, figures show. The statistics, from the oil cartel Opec, reflect a trend that has seen the Russians periodically surpass the Saudis as the world's biggest oil producers on and off since 2002. These latest figures are being hailed in Russia as evidence that such periodic production spikes are not one-offs though and that Moscow really does have a right to lay claim to the No 1 spot. According to Opec, Russia extracted 9.236 million barrels of oil a day in June, 46,000 more than Saudi Arabia.

"For the past two years, mining claims in California, the most gold-rich state, have grown by more than 3,000. Another 1,173 claims were filed in the first three months of 2009 alone, government figures show. However, the public figures don't tell the full story because there are still parts of the US where anyone can prospect for gold without a claim."

The biggest surprise at Barnes & Noble was to see my own book, “The Big Three in Economics,” (click here to order: http://www.amazon.com/Big-Three-Economics-Maynard-Keynes/dp/0765616947) prominently displayed along side all the Keynesian and Marxist books. It has suddenly become my most successful book. Mine was the only book there that took a dim view of Keynes and Marx, and their solutions to the financial crisis (always more government, more taxes, and more regulations). For my money, Adam Smith and his followers (Ludwig von Mises, Friedrich Hayek, Milton Friedman, Murray Rothbard) deserves to be on top of the Totem Pole of Economics. Keynes himself warned about the danger of going off gold: “There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.” NOTE: I posted this article because the last paragraph should be read repeatedly for as many times as it takes to understand the REAL agenda.

In the eastern regions of the Democratic Republic of the Congo where some analysts say a decade-long "resource war" has taken the lives of millions, a Canadian mining company has caught a fever over gold. Once again, the presence of a foreign mining company in the DRC offers a stunning example of disparity between the "have-mores" of the West and the local Congolese, who in turn seemingly have nothing but violence and struggle.

Here is a list of 6 states (4 in the last month) and (2 states today) that have pending legislation to authorize the use of gold and silver to settle debts with its citizens and to provide them the legal means to avoid the devaluing of the dollar by having a parallel currency in light of massive bailouts and to protect them in the event of the dollars failure.

Commodities experts are in agreement that the price of gold and silver is being manipulated by bankers and government officials in order to halt a mass abandonment of paper currencies and the debt based economy. The New York Post today carries a column by John Crudele declaring that there is a global run on gold coins and that demand is not being met by government mints. NOTE: Boy, isn't manipulation wonderful! So many hands on the masses heads.

I'm getting a lot of emails from list members wanting market updates; wanting to know what to do in the face of the momentous events now taking place internationally. At the risk of sounding trite, I've said it all before: get out of dollar-denominated assets and into physical silver and gold. Preferably silver, because I foresee the government confiscating gold once again. Yes, the spot prices of silver and gold - especially silver - have been hammered in the past month. That is why you buy and hold the physical metal for the long haul. There now has been a complete separation of the prices of physical precious metals and the paper gambling markers reported by COMEX. NOTE: A little disclaimer, while I do not agree with some other views that Edgar Steele has, I think he is right on spot in the economics arena, more so than some of our so called experts.

Put 'supply side' nonsense to the test! Demand that you be paid in gold bullion. If right wing ideology and theories were correct, your bosses shouldn't have a problem with it. They will not accede to your demands because they know that right wing economics, especially the bogus charge about 'spreading wealth around', is pure bullshit!

The U.S Mint said Thursday it was temporarily suspending sales of American Buffalo 24-karat gold one-ounce bullion coins because strong demand depleted its inventory. ----

There used to be a habit of framing old Tsarist bonds and putting them on the wall. Lenin's decision to renege on the Russian imperial debt meant that it became mere paper, interesting only as a historical relic. In the light of the recent financial crisis in the USA, could the same thing happen now to the bonds issued by the American government, and could the country which has dominated the world for the last half century now enter history as a bankrupt state? And what can Russia do in the circumstances? The decision by the US government to inject $700 billion into the financial system means that the already gigantic annual budget deficit of the American state (previously some $450 billion a year) will now rise by a factor of three. The total state debt of the USA will rise to well over $11 trillion. It is obvious that such a colossal debt can never be repaid. Instead, it will be serviced by more debt in the future. The contrast with Russia, which has painstakingly sanitised its state finances to the point that it now has more money to lend than the IMF, could hardly be greater. NOTE: If I were sitting in Russia right now, I could laugh. But under the circumstances this SOS is not funny!

"Critics of the administration’s Wall Street bailout condemn the waste of taxpayer dollars. But the taxpayers aren’t the weightiest American financial constituency, even in this election year. The dollar is the world’s currency. And it is on the world’s opinion of the dollar that the Treasury’s plan ultimately hangs. It hangs by a thread, if Monday’s steep drop of the greenback against the euro is any indication."

I’m going to preface this article by warning you that this is one of the longest and most important articles I have scripted in many months. During the recent gold and silver correction that began on July 14, 2008 and which perfectly coincided with the miraculous surge higher in the U.S. dollar, there was a massive story unfolding that should have been a lead story in every financial magazine, newspaper and website. Yet the media responded with silence. For instance, try explaining this. I know for a fact that certain gold coins that were selling in the low $700 range when the price of gold bullion was at $680 an ounce a couple of years ago were still being priced at more than $1,100 by gold coin dealers even when gold slid all the way down to $750 an ounce during this current correction. When I inquired as to why the prices of these gold coins had not also slid to $780 or so (as would have been dictated by the spot market price of gold), but were instead still selling for well over $1,100 a coin, the dealers answered that demand, not the spot price of gold in the futures market, was setting the prices of these coins. Since demand was off the charts, the prices did not reflect the monumental drops in price in the futures markets. When I checked the market for silver coins, I discovered the same massive disconnect between prices set in the physical markets for silver and in the silver futures markets (that only comprise “paper” silver). Note: [MUST READ]

In 1956 the top two Olympic female gymnasts were 35 and 29 years old. In 1968 gold medalist Vera Caslavska of Czechoslovakia was 26-years-old, stood 5 feet 3 inches and weighed 121 pounds. Back then, gymnastics was truly a woman's sport....[In 1976] 14-year-old Nadia Comaneci clutched a baby doll after scoring the first perfect 10.0 in Olympic history. She was 5 feet tall and weighed 85 pounds. The decline in age among American gymnasts since Comaneci's victory is startling. In 1976 the six US Olympic gymnasts were, on average, 17 and a half years old, stood 5 feet three and a half inches and weighed 106 pounds. By the 1992 Olympics in Barcelona, the average US Olympic gymnast was 16-years-old, stood 4 feet 9 inches and weighed 83 pounds, a year younger, 6 inches shorter and 23 pounds lighter than her counterparts of 16 years before.

Dear Friend of GATA and Gold: The U.S. Mint has suspended sales of American eagle gold coins and is refusing orders from dealers, two coin and bullion dealers confirmed Thursday.

Oil, it’s the lifeblood of our society. It’s given us the freedom and wealth we have today. It’s given us automobiles and machinery and greased the wheels of the industrial revolution. It made old Jed a millionaire. But oil’s in trouble, the price is up and everyone thinks they understand it. But what if the price of oil wasn’t really up? What if it were just an illusion? “The price of oil is skyrocketing, and that means gas prices are up…” That’s about the limit of what most Americans know and understand about the whole oil situation. But there are more complex issues at work, and they involve more than just Middle East politics and China.

Iran has withdrawn around $75 billion from European banks to prevent the assets from being blocked under threatened new sanctions over Teheran's disputed nuclear ambitions, Reuters reported Monday, quoting an Iranian weekly. About $75 billion of Iran's foreign assets which were under threat of being blocked were wired back to Iran based on Ahmadinejad's order. Part of Iran's assets in European banks have been converted to gold and shares and another part has been transferred to Asian banks. The UK's Daily Telegraph reported last week that Iranian assets held in Europe were being funneled back to Teheran using financial intermediaries in Dubai. Meanwhile, Prime Minister Gordon Brown said Monday that Britain will freeze the assets of Iran's largest bank. It was not clear how this may have affected the reported Iranian withdrawal.

Gold jumped the most in six months after the U.S. jobless rate had the biggest gain in more than two decades, spurring a drop in the dollar. Silver also rose. The unemployment rate increased to 5.5 percent in May from 5 percent in April, marking the biggest increase since February 1986, the U.S. Labor Department said today. The dollar dropped as much as 1 percent against the euro. Gold has gained 33 percent in the past 12 months as a slump by the dollar boosted demand for the metal as an inflation hedge.