Early Tuesday morning trading in the Far East looked virtually the same as it did on Monday for gold. But once the Comex opened (minutes before, actually) gold got absolutely hammered.

For half an hour or so after that, silver refused to follow suit and continued to rise, so it too had to be convinced that it should go down…and then it got creamed too. Give ‘da boyz’ a 9/10 on that pretty waterfall decline on the Kitco chart. This time, platinum and palladium followed suit. Once the bullion bank(s) got the avalanche started, sell stops got hit all the way down…and Bob’s your uncle!

It’s been a few weeks since the boys had to intervene this violently, but the 20-day moving average in gold was only a handful of dollars away…and silver’s 20-day m.a. had been broken once on Monday, and again yesterday morning just before the take-down. This is when some of the black box tech funds start getting interested in laying on some longs, but those moving averages are safely above the current gold and silver prices for the moment. Make no mistake, there was nothing free market about anything in the precious metals yesterday. As GATA’s secretary treasurer, Chris Powell, has said on many occasions…”There are no free markets anymore, only interventions.”

On Monday’s substantial price rise in silver, the open interest was only up a scant 469 contracts, and gold o.i. rose a substantial 6,929 contracts. The open interest numbers for Tuesday should be interesting when they’re released later this morning.

Yesterday was the cut-off for the COT report on Friday. Will all of Monday’s and Tuesday’s ‘action’ be in it? Knowing these crooks the way I do, I wouldn’t bet on it. It always seems like we have to wait until the following Friday before everything is reported…and by that time the market will have probably changed substantially and there will be no way of telling.

As per usual, I’ve got a couple of stories today, the first one being silver analyst Ted Butler’s latest commentary which is less than 24 hours old…completed shortly after the brutal take-down in both the gold and silver price yesterday. Needless to say, it’s my opinion that anything that he writes is more than worth reading. This commentary is entitled “A Critical Point?” and is linked here.

As if more proof were needed that the whole financial world is an overwhelming fraud, here’s a Bloomberg story about the credibility of the LIBOR (London Inter-Bank Offered Rate). “The LIBOR numbers that banks reported to the BBA were a lie,” said Tim Bond, head of global asset allocation at Barclays Capital in London. The story is linked here.

While markets have improved, they remain far from normal….we stand ready to increase the size of the (term) auctions if further warranted by financial developments. – Ben Bernanke, 13 May 2008 (Bloomberg)

Gee whiz…and I seem to remember Paulson at the Treasury Department, and the CEO of Citigroup saying on the weekend that the “worst of the credit crisis is over.” As Bill Murphy over at lemetropolecafe.com said today…”We are entering the Twilight Zone!” From Alice in Wonderland to the Twilight Zone…from the sublime to the ridiculous! It was ever thus.

I hope your Wednesday goes well, and I’ll see you here tomorrow.

Casey Research correspondent-at-large Ed Steer is a keen observer of the financial scene and a board member of GATA.org.

Source: And then there’s This…Wednesday, May 14th, 2008