Avery Goodman: Euro zone gets vast bond monetization through the back door


11:11p ET Thursday, December 22, 2011

Dear Friend of GATA and Gold:

Securities lawyer Avery Goodman explains at Seeking Alpha tonight how the European Central Bank's new long-term refinancing operations (LTRO) will constitute back-door quantitative easing, as big banks borrow from the ECB at negligible interest rates, buy the bonds of insolvent governments that the ECB is prohibited from buying, collect a handsome spread, and keep coming back to repeat the maneuver while the eurozone figures out how to monetize those bonds permanently.

Of course setting up interest-rate differentials that only big banks and investment houses can exploit long has been how the Federal Reserve has reliquefied and bestowed lucrative patronage on financial institutions in the United States.

The gold carry trade of the 1980s and '90s, apparently invented by Robert Rubin while he was at Goldman Sachs, before he became U.S. treasury secretary, was the same sort of mechanism to support government bonds and enrich financial institutions -- borrow gold from central banks at negligible rates, sell it, use the proceeds to buy government bonds, and collect a big spread risk-free as long as central banks kept dishoarding enough gold to prevent the price from rising and as long as they were ready to write off borrowed gold in cash settlement of leases.

That the gold carry trade devastated gold- and commodity-producing developing countries was no deterrent; indeed, this devastation, the suppression of commodity prices, was another objective.

Thus Western central banking becomes an ever-more totalitarian and parasitic system, which is why GATA long has been opposing and trying to expose it.

Goodman's essay is headlined "How Gold, Silver, and Platinum Will Respond to ECB's Money Printing" and it's posted at Seeking Alpha here:


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


Golden Phoenix Completes Operating Agreement
for Santa Rosa Gold Mine in Panama

Golden Phoenix Minerals Inc. (GPXM) has entered a joint venture operating agreement with Silver Global S.A., a Panamanian corporation, governing the operational and management aspects of their new joint venture company, Golden Phoenix Panama S.A., a Panamanian corporation formed to hold and operate the Santa Rosa gold mine in Canazas, Panama, and explore the mine's adjacent property.

Golden Phoenix will be manager of the joint venture company. Silver Global will handle all social programs, political and community relations, and human resource matters for the joint venture company in Panama. Golden Phoenix and Silver Global also have agreed to work together on all future acquisitions within Panama and to bring such new opportunities to the joint venture company.

Golden Phoenix will be earning in to a 60 percent interest (and potentially an 80 percent interest) in the Santa Rosa mine. Upon signing the joint venture agreement and completing the corresponding acquisition payment, Golden Phoenix will earn an initial 15 percent interest in the joint venture company.

Tom Klein, CEO of Golden Phoenix, says the agreement "creates a solid foundation for the development and planned re-opening of Mina Santa Rosa."

For Golden Phoenix's full statement on the joint venture operating agreement, please visit:


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Sonora Aims to Follow First Majestic's Success
With Silver Mining Exploration in Mexico

Sonora Resources (OTCBB: SURE) is a silver mining exploration company focused on the development of prospective opportunities in Mexico. The company president and CEO is Juan Miguel Rios Gutierrez, who helped build First Majestic Silver Corp., which began trading for pennies and today is at more than $16 per share. Gutierrez was the fourth person to join First Majestic Silver, originally as general manager, then manager for new business initiatives and strategic planning. He left First Majestic Silver to work with Sonora Resources and yet maintains strong contacts with First Majestic. In fact, First Majestic is a large shareholder in Sonora and has a joint venture with the company.

For more information about Sonora Resources, please visit: