Real gold or paper gold -- which do you own?


9p ET Thursday, August 5, 2010

Dear Friend of GATA and Gold:

Zero Hedge today went after the gold price suppression scheme again, this time in commentary by Michael Kreiger. He wrote:

"Anyone who doesn't understand that the Comex is a manipulated illusion isn't paying attention. More and more investors around the world are coming to understand this, which is why there is a movement into the physical. Real gold versus paper gold -- which do you own?

"The article in the Financial Tiems the other day that seemed to uncover the mystery of the BIS gold swap is required reading:

"Here is one excerpt:

"'The gold used in the swaps came mainly from investors' deposit accounts at the European commercial banks. Some investors prefer to deposit their gold in so-called 'allocated accounts,' which restrict the custodian banks' ability to use the gold in their market operations by assigning them specific bullion bars. But other investors prefer cheaper 'unallocated accounts,' which give banks access to their bullion for their day-to-day operations.'"

"The banks identified in the swaps were HSBC, Societe Generale, and BNP Paribas. First of all I think it's insane for anyone to have gold within a bank. The entire purpose of gold is to escape the banking system once it becomes so big, complex, and fraudulent that there is no place to go but collapse upon its Ponzi scheme structure.

"I smell a rat in this BIS deal. People are not going to be happy when they try to redeem their paper gold. I can't tell you how many people I know who are selling [exchange-traded fund] GLD (HSBC is the custodian!) and buying physical. Of great significance is also the fact that on every orchestrated Comex plunge physical buying accelerates.

"As an example, the U.S. Mint reported selling only 85,000 coins in the first 21 days of July but then sold 57,000 in the last seven days of the month. This sort of behavior is what will limit the downside. There are enough smart people with lots of money who see the current system for the fraud that it is and are getting out while physical gold is still available."

Krieger's commentary is headlined "Russia Bans Grain Exports as the End Game Trade Begins" and you can find it at Zero Hedge here:

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


Prophecy to Become Coal Producer This Year
with 1.5 Billion Tonnes of Resource

Prophecy Resource Corp. (TSX.V: PCY) announced on May 11 that it has entered into a mine services agreement with Leighton Asia Ltd. to begin coal production this year. Production will begin with a 250,000-tonne starter pit as planned in August, with production advancing to 2 million tonnes per year in 2011. Prophecy is fully funded to production and its management team includes John Morganti, Arnold Armstrong, and Rob McEwen.

For Prophecy's complete press release about its production plans, please visit:

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Hilton New Orleans Riverside Hotel

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Sona Resources Expects Positive Cash Flow from Blackdome,
Plans Aggressive Exploration of Elizabeth Gold Property

On May 18, 2010, Sona Resources Corp. (TSXV: SYS, Frankfurt: QS7) announced the release of a preliminary economic assessment for gold production at its flagship Blackdome and Elizabeth properties in British Columbia.

Sona Executive Chairman Nick Ferris says: "We view this as a baseline scenario for gold production. The project is highly sensitive to the price of gold. A conservative valuation of gold at $1,093 per ounce would result in a pre-tax cash flow of $54 million. The assessment indicates that underground mining at the two sites would recover 183,600 ounces of gold and 62,500 ounces of silver. Permitting and infrastructure are already in place for processing ore at the Blackdome mill, with a 200-tonne per day throughput over an eight-year mine life. Our near-term goal is to continue aggressive exploration at Elizabeth and develop a million-plus-ounce gold resource, commencing production in 2013."

For complete information on Sona Resources Corp. please visit:

A Canadian gold opportunity ready for growth