Latest libor

3 mth libor = 2.39%
TED Spread = 2.05%

The 2.39% libor is even better than the 2.8% level (which was where it was at prior to the escalation in the crisis crisis, and the subsequent move up to the 4.8% level). The 2.39% clearly means that interbank lending has picked up significantly. The governments now need to forced their banks to increase lending to small businesses and the general public. France's government has threatened its banks to immediately increase lending to the public or the government will nationalize the banks (further nationalize in some cases, I guess) then fire bank top executives - BNP Paribas is headquartered in France.

The T-bill rate component of the TED Spread is way too low. It means foreign money managers are still moving large amounts of money into T-bills (as a safe haven), thus leading to the continued US dollar strength. They are only getting a .34%, which is basically nothing. Eventually (once things stabilize a bit) these money managers will feel the pressure to achieve bonus targets and to make money for their clients. That is the stage where we should see a substantial US dollar reversal, and protentially a stronger gold price. Also, the continuing forced redeptions is not helping the gold price either. Gold gets knocked down $30 - 40 at a time when these large paper contracts are sold on the COMEX. There has been some talk that these parties might have difficulties finding the physical gold to settle the December contracts.