Ventana Gold Corp. today announced that it has filed its National Instrument 43-101 technical report in respect of its initial resource estimate and scoping study for the La Bodega project announced on November 8, 2010. Each of the initial resource estimate and scoping study, including the preliminary assessment, was independently reviewed and verified and [...]

DURING the Second World War, Nazi Germany hatched a plot to flood Britain with fake bank notes.

Working first at the Sachsenhausen concentration camp just north of Berlin, some 140 Jewish printers and forgers made perhaps £132 million in high-quality fakes (some US$650m at the wartime exchange rate, but nearer $6bn today), equal to around 15% of Great Britain’s then paper-money supply.

Named after the SS engineer who ran the operation, Operation Bernhard only saw a handful of its counterfeit fivers and tenners reach England. (The Bank of England apparently burnt what it found, along with its records.) Because, “by 1943, the Luftwaffe was almost kaput,” writes historian Lawrence Malkin, and so “instead of pursuing their original goal of dropping the counterfeits on England to cast suspicion on real Pound notes, the SS used the fakes to finance its own espionage service.”

The Nazis’ slave-fake money thus flooded the black markets of Central Europe and North Africa, driving down the street value of Sterling (and spooking the hell out of the Bank of England, which couldn’t detect those forgeries which found their way to London). Eventually, through a bizarre twist of fate (and the canny money-launderers of the Jewish underground), it helped fund the post-war flight to Palestine of Holocaust survivors.

Whereas today? Economic warfare no longer seeks to drive down the enemy’s currency. In late 2010, in contrast, it’s through buying your foe’s money – bidding it higher – that you hurt him most.

“[Last] Friday’s Wall Street Journal had an article on Japanese anger at Chinese purchases of Yen,” notes Peking finance professor Michael Pettis, “which according to Japanese government data released Wednesday, showed that China’s Yen purchases this year equal $27 billion, more than six times China’s combined Yen buying in the previous five years.”

The scoundrels! Josef Goebbels, Hitler’s minister for propaganda, thought Operation Bernhard a “grotesque plan”, fearing that it might rebound on the Nazis if the US or Britain replied in kind. But what would the jack-booted villain have made of today’s dastardly attack on Japan by Beijing?

“Everyone is playing the same game,” says Pettis – “trying to force the brunt of the adjustment abroad…and here we have China and Japan squabbling over Chinese attempts to recycle its trade surplus into Japan rather than into the US or Europe.”

China buys the Yen, thus hurting Japanese exports…and so Japan buys up Dollars…which are already devalued by the US Fed’s zero-rate policy, and are now pulling ahead of the Yen in the race to the bottom. Over in Europe, the Swiss National Bank sold its own Francs for Euros in the spring of this year, while the Bank of England’s photon forgery team finished flooding the City of London with Pounds, creating enough money to fund an entire year of government borrowing and pushing consumer-price inflation above its own “upper tolerance” in 19 of the last 36 months with its own near-zero rates.

“The intervention is positive for the [US] Treasuries market, especially short-dated issues which Japan will likely focus on,” Reuters quotes one market strategist today. Which sounds a sweet deal for the Fed’s campaign to destroy Dollar savers. But nobody wins this war of attrition, however much money they print up and spend.

Rumor says Tokyo threw ¥500bn or perhaps ¥1 trillion at the Dollar on Wednesday. At that rate, it’s got another 34 days to go before matching the 2003-2004 campaign, when Japan tried to defend the Dollar above ¥100. It’s since slipped a further ¥17 regardless, and ¥80 has become the “line in the sand” according to currency traders.

There’s money to be made here, of course, either fighting the Fed or supporting the rear-guard action in Tokyo. But in the absence of strong consumer demand at home, central-bank policy the world over is dead set on weakening the local currency – wherever you live – in a bid to win market-share in exports, no matter the cost.

Investors and savers wanting a flak jacket just pushed gold to new Dollar highs, with silver hitting its best level in almost three decades. No, they’re not guaranteed to keep rising, but it’s hard to see them falling too far when policy worldwide turns to actively denting the value of cash. At least no one can create precious metals at will – unlike the Yen, Dollar or Swissie – simply to shell them into the market in a war everyone loses.

Adrian Ash
For Money Morning Australia

Adrian Ash is head of research at www.BullionVault.com

Romios Gold Resources Inc. announced that it placed 2,000,000 units on a flow-through basis (the “FT Units”) priced at $0.15 per FT Unit for gross proceeds of $300,000. Each FT Unit consists of one (1) flow-through common share (the “FT Share”) and one-half (1/2) of a share purchase warrant (a “FT Warrant”). Each full FT [...]

Dianor Resources Inc. announce that it has entered into a Credit Agreement dated August 28, 2010 with Third Eye Capital Corporation, as administrative agent, and a syndicate of lenders, pursuant to which the lenders have committed to provide up to $10 million in a term-credit facility to Dianor, subject to various terms and conditions.
“We are [...]

Strategic Mining Corp. announced that it has filed the amendment (10a) to the Form 10 that includes first quarter financials on August 9, 2010. The filing of the Form 10a immediately moves the company to the OTCQB tier with current status. The company has also sent a response letter to the SEC in order to [...]

WHATEVER FORCE you spy behind this week’s swoon in gold prices to $1160 per ounce and lower, ’tis but a scratch – a flesh wound – so far.

“I’ve had worse!” as Monty Python’s Black Knight says.

First, the current options contract on gold futures expired Wednesday, guaranteeing volatility. Because as bullish speculators moved to close and rollover their position in the derivatives market, those banks taking the other side of the trade were only too happy to oblige.

Call that manipulation if you must (double-check your facts first), but more broadly, long-time investors and traders would always expect to see a seasonal lull – if not drop – in gold prices between July and Sept. India’s gold-hungry millions don’t buy over the summer, waiting instead until autumn’s post-harvest Diwali festival. And after the huge gains spurred by the Greek crisis of April and May, a pullback in gold investment pressure looked due.

Of course, that’s not to say the gold bull-market starting a decade ago hasn’t just met its end. Some in the finance media would like to believe it’s over (even if, like this article at the Sydney Morning Herald, they seem more driven by resentment than analysis). But for now, recent history says the bull market in gold is a long way from losing both arms and legs just yet…

Dropping a little over 9% from last month’s top to date, the gold price in Dollars would have to reach $1073 an ounce before matching the 15% drops of Dec ‘09-Jan ‘10 and Feb-Apr ‘09.

Gold would need to hit $948 an ounce before matching the 25% drop of May-Jun ‘06. And it would have to reach $834 before matching the 33% Mar-Sept. loss of 2008.

This current swoon is also a good way from setting new records for pace, too. Top to bottom, it’s nothing – so far – next to the 16% week-on-week drops of June 2006 and Sept. 2008.

Western government deficits are set to keep rising, meantime, while real interest rates remain below zero everywhere, slowly destroying the value of cash. Gold, in contrast, continues to find favor with central-bank reserve managers, and private Chinese gold demand is undimmed.

Indeed, “with all the deregulation we’ve seen in China and the Chinese gold market being so alive, it may just turn out to become a bit of a casino atmosphere over there,” says gold-mining magnate Pierre Lassonde, speaking to MineWeb – “a gambling atmosphere [that] could very well push the gold price beyond anything that we believe is reasonable.”

Small comfort to investors or traders picking early July’s dip as a bargain, perhaps. But so far, it’s only a scratch. And whatever nemesis gold has stumbled across in July, it’s certainly got nothing to do with the long-term drivers of its four-fold gains to date.

Adrian Ash
for Money Morning Australia

Adrian Ash is head of research at www.BullionVault.com

Vantex Resources Ltd. announces that it will increase the previously announced $1,700,000 financing, to a maximum of $2,100,000 due to increased investor demand.
Vantex has therefore entered into an amended agreement with Jones, Gable & Company Limited (“Jones, Gable”) in respect of a brokered private placement financing consisting of up to 2,100 units (the “Units”) at [...]

Nuukfjord Gold Ltd. announce that it has retained the services of First Canadian Capital Corp. (“First Canadian”), a Toronto based investor relations service provider, to act as a marketing and investor relations consultant for the Company. First Canadian provides corporate communications, investor relations and market awareness services to emerging small cap and mid-cap public companies [...]

Ventana Gold Corp. announce that 63X Master Fund (“63X”), its largest shareholder, has acquired ownership and control of an additional 1.1 million common shares of Ventana through the facilities of the Toronto Stock Exchange, bringing its aggregate ownership in Ventana to 19,306,000 common shares. 63X paid cash consideration of $10.62 per share, for aggregate consideration [...]

Northrock Resources Inc. has arranged a non-brokered private placement of up to 6,000,000 units (the “Units”) at a price of $0.05 per unit for aggregate proceeds of up to $300,000 and up to 10,000,000 flow through units (the “FT Units”) at a price of $0.075 per FT Unit for aggregate proceeds of up to $750,000.
Each [...]