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Dan Norcini: As commodities soar, suppressing gold loses its point

Section: Daily Dispatches

By Dan Norcini
Monday, February 25, 2008

Today the Continuous Commodity Index made yet another all-time high as Minneapolis wheat prices surged almost $4 to an unfathomable price of $23 per bushel. Palladium prices are up to $520; soybeans hit another all-time high of $14.55; corn roared to nearly $5.40 a bushel; and cocoa notched a 24-year record. The list could go on and on and on.

This report from Reuters -- -- details what is taking place in France as a result of these record-setting moves across the entire commodity complex. But France is just an example of what is taking place globally.

That is why the noise about gold sales by the International Monetary Fund is just that for those who understand the game that is being played with the yellow metal by the Western monetary authorities. Wrap your mind around what is happening on the inflation front and then ask yourself: How much longer do they think that by attempting to drive the price of gold lower they can convince the public that inflation is under control?

The simple truth is that gold has either broken into all-time highs when measured in terms of every major currency or is threatening to do so. To reverse this inexorable trend, these haters of gold will have to work their alchemy on wheat, soybeans, rice, corn, sugar, cocoa, coffee, etc. In other words, they will have to wave their magic wands and reduce food prices. And from what hidden stockpiles of agricultural goods do they intend to do so? Good luck, fellas. You are going to need it.

Meanwhile, those rising economic powerhouse Eastern nations with burgeoning reserves consisting predominantly of less-than-desirable U.S. dollars will be more than happy to take all the gold that the hapless dolts at the IMF are willing to part with. With the staggering sums contained in their sovereign wealth funds, these countries can gobble up any and all gold the IMF wants to get rid of, and they will welcome the opportunity to buy gold in size at a set price.

Once again, the West is shown to think in terms of a checker game while the East is playing chess.

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