Golden Minerals Company

Prosecutors investigating the movement of money by global banks suspect HSBC of laundering money for Mexican drug cartels and moving cash for Saudi Arabian banks with ties to terrorists, according to federal authorities with direct knowledge of the investigations.

The federal and state prosecutors are also investigating whether HSBC flouted United States law by transferring money through its American subsidiary for sanctioned nations, including Iran, Sudan and North Korea.

The weight of the accusations could force HSBC, which has already set aside $700 million to cover the cost of potential fines, to pay at least $1 billion to settle the inquiry, said the authorities with knowledge of the investigation, which would make it the largest such settlement in history.

The money-laundering accusations against HSBC so far are more extensive than the potential violation of United States sanctions that is the focus of the investigations against other foreign banks, including Deutsche Bank and Commerzbank of Germany, BNP Paribas and Crédit Agricole of France and the Royal Bank of Scotland, said the law enforcement authorities, who requested anonymity because the investigations are continuing.

No surprises here. As I said many months ago, most of the world's major international banks are into all this criminal activity because there's big money to be made. The fine that HSBC and other banks will, or have already paid, are just a licensing fee. This story showed up on The New York Times website on Friday sometime...and I thank Donald Sinclair for providing our first story of the day. The link is here.

The prevalence of computer-generated trading in the modern share market has created an unpredictable, and sometimes dangerous, environment for investors.

Robots don't have to take over the world when they've got share markets in their clutches already.

Unlike a mere mortal trading, there isn't even a broker between machine and, well, machine. All that stands between them is a fee the Australian Stock Exchange collects.

Self-automated algorithms can generate 150 trades in the blink of an eye and, unlike ordinary investors or even the big funds, have been given the ultimate privilege of plugging straight into the ASX's computer. They're the ultimate inside traders.

Here's the high-frequency trading story from a 'down under' perspective. It was in the Sunday edition of The Sydney Morning Herald...and I thank Australian reader Wesley Legrand for sharing it with us. The link is here.

GoldMoney research director Alasdair Macleod explains today why big business loves government intervention in the economy: It's a source of subsidy and price fixing and thus is anti-market and anti-consumer.

This story was posted over at the goldmoney.com Internet site yesterday...and I plucked it from a GATA release. The link is here.

Argentine President Cristina Fernandez's popularity sank to 30 percent in August, less than half of what it was a year earlier, according to a poll published on Sunday that portrayed a country worried about crime and high inflation.

Since then the economy has slowed, and the poll suggests most people are not buying Fernandez's argument that external factors, such as Europe's financial mess, are mostly to blame.

Annual inflation, clocked by private analysts at over 20 percent, was another worry voiced in the survey. The government fines economists who publish their inflation estimates, which tend to double or triple the official figures.

This Reuters story was filed from Buenos Aires on Sunday afternoon...and I thank Scott Pluschau for sending it along. The link is here.

One Chinese province after another has stepped forward over the last fortnight to announce their plans, in what appears to be a propaganda effort to reassure the public that the economy is still on track.

Meanwhile, Wen Jiabao, the Chinese premier, promised over the weekend that the Chinese government would intensify its efforts to boost the economy in the second half of the year.

On a visit to Guangdong, the heartland of China's export industry, Mr Wen warned that "there will still be a lot of problems and uncertainties in exports going forward. The third quarter is a crucial period".

Analysts said the government could now steer the value of the yuan lower, after a gain of 4.7pc last year against the dollar. Further export tax rebates could also be used to bail out manufacturers.

This article was posted on the telegraph.co.uk Internet site early on Sunday evening...and goes on to state that "Many of the new stimulus projects appear to simply be restatements of existing commitments, and there was no indication of how they will be funded." I thank Donald Sinclair once again for providing this story...and the link is here.

At the entrance to the convention hall where Iran is sponsoring an international summit meeting are the crumpled wreckage of three cars driven by Iranian nuclear scientists who have been killed or hurt in bomb attacks. Placards with the photos of the scientists and their children stand alongside.

The message is clear. As Iran plays host to the biggest international conference the Islamic republic has organized in its 33-year history, it wants to tell its side of the long standoff with the Western powers, which are increasingly convinced that Tehran is pursuing nuclear weapons.

Tehran, which denies that it is after the bomb, believes the scientists were killed by Israeli agents, an assertion that Israel has not acknowledged but never fully disputed.

This very interesting read showed up on The New York Times website on Sunday...and is another offering from Donald Sinclair. The link is here.

Brent crude jumped to $115 a barrel last week. Petrol costs in Germany and across much of Europe are now at record levels in local currencies.

Diesel is above the political pain threshold of $4 a gallon in the US, hence reports circulating last week that the International Energy Agency (IEA) is preparing to release strategic reserves.

Barclays Capital expects a “monster” effect this quarter as the crude market tightens by 2.4m barrels a day (bpd), with little extra supply in sight.

Goldman Sachs said the industry is chronically incapable of meeting global needs. “It is only a matter of time before inventories and OPEC spare capacity become effectively exhausted, requiring higher oil prices to restrain demand,” said its oil guru David Greely.

This is a remarkable state of affairs given the world economy is close to a double-dip slump right now, the latest relapse in our contained global depression.

Yes, dear reader, it most certainly is. As I [and others] have been saying for many years now, we are on the downhill slope of Hubbard's Peak. Peak oil appeared to occur in 2005...and global output has been flat at best ever since. This must read story from The Telegraph on late Sunday afternoon was sent to us by Roy Stephens...and the link is here.

Angela Merkel and Francois Hollande pledged to keep Greece in the eurozone, but offered Greece no immediate relief from its current regime of painful austerity measures.

Following talks with the Greek prime minister, Antonis Samaras, on Saturday, Mr Hollande said that "Greece is in the eurozone and Greece must stay in the eurozone".

But, he cautioned: "It still has to demonstrate the credibility of its programme and the willingness of its leaders to go the whole way, while doing it in a way that is bearable for the population."

“Once these commitments, which are not only financial but about structural reforms that the Greeks want, have been ratified by parliament and confirmed, Europe must do its part,” the French president added.

This story showed up on The Telegraph's website early on Saturday evening...and I thank Roy Stephens once again for bringing it to our attention. The link is here.

Bundesbank President Jens Weidmann said a proposed new wave of sovereign bond purchases by the European Central Bank may increase governments’ reliance on such funding and won’t help solve the euro-area debt crisis.

“We shouldn’t underestimate the danger that central bank financing can become addictive like a drug,” Weidmann said in an interview with Der Spiegel. “Such policy is too close to state financing via the money press for me.”

ECB President Mario Draghi said earlier this month that the central bank may intervene in the secondary market to lower yields in countries that ask Europe’s bailout fund to buy its bonds in the primary market. While such a move would ensure conditionality, the Bundesbank has been critical of the plan.

“In democracies, parliaments rather than central banks should decide on such an encompassing mutualization of risks,” Spiegel cited Weidmann as saying in an e-mailed summary of the interview today. The plans are becoming “concerted actions by the state rescue mechanisms and the central bank. That causes a link between fiscal and monetary policy.”

This Bloomberg story was filed from Frankfurt...and posted on their website in the wee hours of Sunday morning. It's worth skimming...and I thank Ulrike Marx for sharing it with us. The link is here.

Angela Merkel tried to calm a growing storm over euro zone crisis strategy on Sunday after the Bundesbank likened ECB bond-buying plans to a 'dangerous drug' and a conservative ally of the German leader said Greece should leave the currency bloc by next year.

The comments, from central bank chief Jens Weidmann and a senior figure in the Bavarian Christian Social Union (CSU), Alexander Dobrindt, point to mounting unease in Germany with the policies being used to combat the three-year old debt crisis.

Domestic criticism has narrowed Merkel's room for maneuver at a time when Greece is in dire need of more aid and policymakers are scrambling to prevent contagion from enveloping big countries like Spain and Italy.

Despite Merkel's plea "that everyone weigh their words very carefully"...this is a situation that is only going to get worse...never better. This Reuters piece showed up on the money.ca.msn.com Internet site on Sunday afternoon...and I thank Donald Sinclair for sending it along. The link is here.

Unilever will adopt marketing strategies used in developing countries in order to drive future growth in Europe, as the head of its European business warned that poverty will rise in the region as a result of the debt crisis.

Poverty is returning to Europe," Jan Zijderveld, the head of Unilever's European business told the Financial Times Deutschland in an interview.

"If a consumer in Spain only spends €17 when they go shopping, then I'm not going to be able to sell them washing powder for half of their budget."

Unilever has already started to change the way it sells some of its products. In Spain, the company sells Surf detergent in packages for as few as five washes, while in Greece, it now offers mashed potatoes and mayonnaise in small packages, and has created a low-cost brand for basic goods such as tea and olive oil.

"In Indonesia, we sell individual packs of shampoo 2 to 3 cents and still make decent money," said Mr Zijderveld. "We know how to do that, but in Europe we have forgotten in the years before the crisis."

This Roy Stephens offering was posted on the telegraph.co.uk Internet site early yesterday afternoon BST...and it's worth reading. The link is here.

The first blog is with Dan Norcini. It's headlined "Absolutely Stunning Development in the Gold & Silver Markets". Next is this blog with Michael Pento...and it's entitled "Fed and the ECB are Involved in a Dangerous Game of Poker". The third blog is with John Hathaway...and it's headlined "Gold, Jim Grant, Bernanke, Draghi and a Collapse in Confidence". Next is a blog with Dr. Stephen Leeb...and it bears the headline "The Catalyst That Will Take Gold Over $10,000". The last blog is with Richard Russell...and it's entitled "This is the Beginning of a Major Move in Gold". The first audio interview is with Jean-Marie Eveillard...and the second audio interview is with Eric Sprott.

The dire economic situation that persists globally despite the best efforts of central planners to make things seem normal leads Sprott Inc.'s legendary Chairman Eric Sprott to broadcast a loud message of caution: "Fear the financial system." In this exclusive interview with The Gold Report, Sprott says it's time for people to take matters into their own hands and that means pushing further and further into precious metals equities as well as physical gold and silver. With 80% of his own portfolio in that arena, he certainly puts his money where his mouth is.

This interview was posted on The Gold Report Internet site yesterday...and it's always been my opinion that anything Eric has to say, is worth your time. This interview is no exception...and the link is here.

Founded in 1992, Smart Money magazine, a product of The Wall Street Journal, is going out of business with its September issue, which includes a review, titled "Hits and Misses," of what the magazine, its editors, and writers have gotten right and wrong in their 20 years. Perhaps their biggest miss is gold, as signified by the magazine's recapitulation of its June 2004 interview with GATA Chairman Bill Murphy, who remarked that the monetary metal, then priced at $422 per ounce, would double.

That article itself...and the rest of Chris Powell's preamble is worth reading as well. It was posted on the gata.org Internet site on Saturday...and the link is here.

GATA Chairman Bill Murphy is interviewed for a half hour by Jim Puplava on the latest Financial Sense Newshour Internet radio program. They discuss gold market manipulation, suppression of gold mining share prices, GATA's history, and the prospects for the monetary metals.

The interview was posted on the financialsense.com Internet site on Saturday...and the link is here.

Labour strife returned to South Africa's platinum sector on Monday, derailing London-based Lonmin's efforts to restart mining and fanning fears of a resurgence of the violence that has killed 44 people this month.

Workers blocked colleagues from going down mine shafts and used threats of violence to snarl transport at Lonmin's Marikana mine - where 10 people were killed in a union turf war and police shot dead 34 striking miners.

"There have been incidents of intimidation towards bus drivers overnight as well as intimidation of Eastern's workers this morning, preventing them from coming to work," Lonmin said in a statement, referring to its eastern operations, which had avoided such incidents until now.

This Reuters story was filed from Markana, South Africa yesterday...and posted on their website early in the afternoon BST. I thank Ulrike Marx for her second offering in today's column...and the link is here.

South Africa's gold mining companies have been hit by union demands for wage hikes but the industry has little room to budge as current collective agreements do not expire until the middle of next year, the country's chamber of mines said on Monday.

Elize Strydom, who heads employment relations at the chamber, said the demands were made several weeks ago by local branches of the National Union of Mineworkers and not the national office.

South Africa's big gold miners Gold Fields, Harmony and AngloGold Ashanti negotiate collectively through the chamber for industry-wide wage agreements and the current 2-year deals will not expire until June, 2013.

"The chamber feels very strongly that we should respect agreements," Strydom told Reuters. But she added that a task team was going to look into the matter.

This is another Reuters story...this one filed from Johannesburg on Monday. It's posted on the mineweb.com Internet site..and I thank Ulrike Marx for her third and final offering in today's column. The link is here.

Gold is poised to climb the most in two years as prospects for additional economic stimulus by governments from the U.S. to China stoke demand for the precious metal as a bet against inflation, a survey showed.

Bullion for immediate delivery may reach $1,800 an ounce by the year-end, extending gains this year to 15 percent, according to the median forecast in the Bloomberg survey of 15 traders and analysts at a conference in Hyderabad in South India on Aug. 25. That would be the most since a 30 percent surge in 2010, data compiled by Bloomberg show.

Gold is set for a 12th year of gains as the European sovereign-debt crisis boosts haven demand amid speculation of further policy easing by central banks, including the U.S. Federal Reserve, which may be considering a third round of so- called quantitative easing, or QE3. Investment holdings have expanded to a record on demand for a hedge against inflation.

“The euro zone has been quiet of late, but that doesn’t mean the problems have disappeared,” said Jeffrey Rhodes, global head of precious metals at INTL FCStone Inc. (INTL), who expects gold to rally to $1,975 by year-end. “The U.S. economy has been sluggish and there is a growing belief that there is going to be QE3 soon. This anticipation is driving the market.”

West Virginia reader Elliot Simon...who sent me this Bloomberg piece yesterday...commented that "Bloomberg can be annoying more often than not...even when they're being bullish on gold." By the time I was through reading the article, that's the impression I got as well. The link is here.

This Reuters story showed up on their website on Sunday. They finally got around to mentioning GATA in this article but, as Chris Powell put it in the GATA release on Sunday..."it was just to help disparage the Republican tease about gold." That's probably the truth.

Anyway, if you're interested, the story is linked here.

The lure of the yellow metal seems to be back and gold prices have been growing from strength to strength. On Monday morning, India's benchmark October gold contract extended gains to hit a high of $558.70 (Rs 31,077) per 10 grams, following a rally in the world markets and a weak rupee. On Friday, the yellow metal hit another life-time high in Rupee terms of $564.35 per 10 gram.

It seems, however, that high price levels have not really dampened retailers' seasonal buying mood in the run up to the festive season that kicks off this week in India. Bulk purchases for marriages continue, with most retailers stocking up and individuals buying smaller items of gold jewellery.

Though gifting of new clothes is a much loved custom of the festival, since the colours of the season are shades of cream and gold, people have decided to go one step further and gift smaller items of gold jewellery.

The traditional necklaces have been tweaked, at times beyond recognition, to appeal to a new generation of customers who want something more in keeping with their lifestyle. And this does not translate into something cheaper.

This mineweb.com story was filed from Mumbai yesterday...and I thank Donald Sinclair for his final offering in today's column. The link is here.

Gold makes its move. The bugs are rampant.

The yellow metal made life very difficult for commentators trying to keep a regular schedule on Wednesday.

MarketWatch's Claudia Assis could hardly have hit the 'send' button on her story headed "Gold ends lower as other metals gain," which dealt with the close of floor trading -- the December gold contract was down $2.40 -- when the Fed minutes set the market roaring.

By the stock market close, gold had risen over $17 to stand 1% above Tuesday's stock market closing level and at the highest since early May.

This marketwatch.com story was posted on their Internet site on Thursday of last week...and it showed up in a GATA release on Sunday, which is where I found it. The link is here.