Pat Heller: How central banks might have smashed gold and silver down

Section:

11:17p ET Tuesday, September 27, 2011

Dear Friend of GATA and Gold:

With his new commentary at Numismaster, Patrick A. Heller of Liberty Coin Service in Michigan speculates on the possible mechanisms of central bank market manipulation that sent gold and silver prices plunging just as the eurozone was about to break down.

Heller writes:

"First, it is entirely possible that European central banks of nations in the eurozone could be liquidating some of their gold reserves as a desperate move to beef up their fiat currency reserves to stave off default on their debts. If this is happening to any degree, that could help explain the why short-term gold and silver lease rates have recently turned negative.

"Second, it is possible that the U.S. government may have informed the Chinese government in advance that is was preparing a major intervention to suppress gold and silver prices and asked the Chinese to refrain from jumping in to purchase physical metals until the market had been pushed near the bottom.

"Last week a longtime reliable source told me that there were massive quantities of Asian buy orders placed in the London market to execute if spot prices dropped to $1,760 all the way down to $1,715. I have every reason to believe that at least a sizable percentage of these buy orders may be have placed by the Chinese government as this would be consistent with their trading activity since 2003. If the Chinese were alerted that they could have the opportunity to purchase gold even cheaper than their standing buy orders, it would be reasonable for them to cooperate by putting their buy orders prices in the $1,700s.

"Third, it is possible that the U.S. government may have directly intervened in suppressing prices, through one or more agencies that are not drawing close scrutiny from Congress or the public. The prime suspect would be the Exchange Stabilization Fund, which was established in 1934. The ESF is an emergency reserve, not subject to congressional oversight, normally used to intervene (manipulate) in foreign exchange markets. In 1970 its mandate was changed by Congress to allow the secretary of the treasury, with the approval of the president, to use funds in the ESF to 'deal in gold, foreign exchange, and other instruments of credit and securities." Thus it would be possible and legal for the U.S. government to surreptitiously manipulate the gold market. The reason I consider this to be a plausible reason that gold and silver prices were suppressed is that the major beneficiaries of lower prices would be the U.S. government, its trading partners, and allies."

Heller's commentary is headlined "Buy Metals at Bargain Prices" and you can find it at Numismaster here:

http://www.numismaster.com/ta/numis/Article.jsp?ad=article&ArticleId=241...

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.



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Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit,
Extending the Mineralization of the Southwest Vein on the Property

Company Press Release, October 27, 2010

VANCOUVER, British Columbia -- Sona Resources Corp. reports on five drillling holes in the third round of assay results from the recently completed drill program at its 100 percent-owned Elizabeth Gold Deposit Property in the Lillooet Mining District of southern British Columbia. Highlights from the diamond drilling include:

-- Hole E10-66 intersected 17.4g gold/ton over 1.54 metres.

-- Hole E10-67 intersected 96.4g gold/ton over 2.5 metres, including one assay interval of 383g of gold/ton over 0.5 metres.

-- Hole E10-69 intersected 85.4g gold/ton over 4.03 metres, including one assay interval of 230g gold/ton over 1 metre.

Four drill holes, E10-66 to E10-69, targeted the southwestern end of the Southwest Vein, and three of the holes have expanded the mineralized zone in that direction. The Southwest Vein gold mineralization has now been intersected over a strike length of 325 metres, with the deepest hole drilled less than 200 metres from surface.

"The assay results from the Southwest Zone quartz vein continue to be extremely positive," says John P. Thompson, Sona's president and CEO. "We are expanding the Southwest Vein, and this high-grade gold mineralization remains wide open down dip and along strike to the southwest."

For the company's full press release, please visit:

http://sonaresources.com/_resources/news/SONA_NR19_2010.pdf



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Prophecy Platinum Drills 49.5 Meters Grading 1.27 g/t PGM+Au at Yukon Wellgreen Project

Company Press Release
August 22, 2011

Prophecy Platinum Corp. (TSX-V: NKL, OTC-QX: PNIKF, Frankfurt: P94P) announces results from its 2011 drilling program for its first completed hole on the Wellgreen Project in the Yukon Territory, Canada.

Borehole WS11-184 encountered 472.6 meters of mineralization grading 0.43% nickel equivalent from surface to the footwall contact. Within this larger swath of mineralization the hole encountered 49.5 meters of 1.27 grams per ton platinum group metals plus gold, 0.71% nickel, and 0.45% copper (or 1.11% nickel equivalent).

The geology transitioned from blebby disseminated to net-textured to massive sulphide approaching the footwall contact grading 6.3% nickel, 1.7% copper, 2.7 grams per ton platinum, 1.6 grams per ton palladium, 0.17 grams per ton gold, and 3.4 grams per ton silver. The drilling zones and results are tabulated here, with more information:

http://www.prophecyplat.com/news_2011_aug22_prophecy_platinum_wellgreen_...