Posted at 4:15 PM (CST) by & filed under Trader Dan Norcini.

Dear CIGAs,

Another day, another brand new all-time high in gold priced in terms of the British Pound and in Euros. Euro gold indeed looks like it has a legitimate shot at the 700 level while Sterling gold  has taken out the 650 level.  Euro gold was set at 691.627 at the PM Fix.

I found the remarks by one of the investment houses that gold was undergoing a period of “irrational exuberance” almost laughable to read. People actually pay good money to read such reports which I find a tragic waste of wealth. The gist of the notion set forth in the report was that since there is no inflation and that gold performs poorly during periods of recessionary environments, gold buying  has no fundamental underpinnings.  I had to wonder if the person who wrote it was just out of business graduate school since it is obvious they have not a clue as to what gold actually is. For some reason there remains this almost fog-like obstruction that exists in the minds of so many, particularly the younger folks working in investment circles, that prevents them from recognizing that gold is a currency, not a commodity. When it is viewed as a commodity, of course its price will decline during periods in which jewelry or even industrial demand is waning. However, and this is the key, when a crisis of confidence in paper currencies exists, then gold resumes its historic, time-tested role of being a store of value and investors seek it out to preserve that which they have labored so diligently to acquire. After all, if Central Bankers are diligently at work seeking to undermine any “value” that might or might not exist in their paper by debauching it as quickly as they can, where else can one put their wealth if not into something tangible that is a perceived store of value. Try telling the good folk of Britain who are watching their once proud currency disappearing that gold is experiencing irrational exuberance. The only thing irrational that I see is the actions of the Central Banks and the governments who continue to manufacture money faster than a flock of hungry wild geese can pick clean a rice field.

Technically gold was able to muster sufficient buying power to kick it above the round number resistance and psychologically significant $900. The handle or “9” in front of the gold price tends to garner attention which is the reason you often see sellers attempting to push prices back from such levels. The push higher was a follow through to the upside breakout of the wedge formation noted last week that can be seen on the daily chart and partially on the shorter-term chart that I use for analysis during the day. Any subsequent setbacks in price should find buyers resurfacing near the $880 and then $870 level to keep the bullish chart picture in the favor of the longs.

Gold was capped however by concerted bullion bank selling which came in especially as crude oil began to weaken and moved into negative territory after rallying to $48.59.

I want to again urge some the bigger players and fund managers to seriously consider making a portion of their long positions at the Comex designated specifically for taking physical delivery of the gold out of the warehouses. Do not settle for the receipt but actually remove the gold. You cannot hope to beat opponents who never have to meet a margin call nor have trading practices put in place that would force them to liquidate losing positions to prevent major losses as most responsible commercial firms currently have in place. Playing the paper game is not the best way to take on such concerted selling. The reason I say this is because Friday’s open interest showed a huge, and I do mean HUGE jump in open interest in gold with an increase of 17,817 contracts to 359,905. That is a lot of new long positions which were added into strength – a number large enough to offset what was undoubtedly a substantial number of buy stops that were triggered forcing out the funds who had gone short. The volume was simply enormous with over 250,000 contracts trading hands – some of that is rollover activity which always artificially distorts volume numbers but even after accounting for switches, it is still a very strong number. Take the gold out of the warehouses – your old “strategy” of chasing prices higher leaves you susceptible to big losses as you are failing to buy low and sell high but are instead hoping to buy higher and sell yet even higher. You will be the first ones to get picked off if prices stall out with the result that you will have a book full of losses before you know it. The reason the bullion banks can sell with impunity in the face of such bullish fundamentals for gold is because no one will call their bluff and take the gold out of the warehouses leaving them with nothing to backstop their gambit.

February gold will be going into the delivery period at the end of this week so I will be switching charts and commentary to the April contract but will also be monitoring and reporting on the deliveries. An interesting side note is that for the month of January, the largest stopper has been JP Morgan’s futures arm. Whether they will retender that gold is unclear but I want to see what they may or may not do with it come next week.

Both of the mining indices, the HUI and the XAU faded well off their highs after punching through horizontal resistance near the December highs and triggering buy stops in the process. A close above those levels would generate buy signals on many of the technical charts particularly the old Point and Figure style charts that were once widely used by longer-term oriented investors. I sometimes wonder if anyone even uses those things anymore since they were primarily trend identifying charts and today’s crowd of money throwers are momentum oriented. I must say that I do not like what I see taking place in these indices today as it shows a potential short term buying exhaustion pattern. Tomorrow’s session will be important in determining what we get in there.

The jump in copper prices today is most interesting and something we will want to watch. A couple of factors were working in its favor in today’s session most notably the weakness in the Dollar, but the December existing home sales, which came in above expectations, sparked a sizeable jump in the red metal which has a large short position among specs built up in it. It is a bit tricky getting a read on this because trading in copper has been thin due to the Chinese Lunar New Year holiday this week. Still, a technical breakout will be significant, should it occur on gold volume as copper is often a barometer of economic activity in advance. We’ll see.

Incidentally, the large SPRD’s gold ETF, GLD,  reported that its holdings had reached another record high of 832 tons last Friday.

Bonds dropped yet again today – Gee – what a surprise! Seriously, this market is so overdue for a bounce but the fact that it cannot even seem to hold its gains for more than an hour is quite revealing. Bonds must bounce soon or they are setting up for a major technical collapse. On the technical charts there really is not much support until we get down to the 123^20 – 124^00 level. That is also near the 100 day moving average. Failure there and we are going to see long term interest rates shoot sharply higher; something which the Fed does not want to see with housing still in such a tenuous condition.

Equities managed a bit of a bounce but ran out of buyers after mid-morning.

The Dollar got smacked today and once again faded from the region near 88. It just cannot seem to get through that level which is where the rally failed back in December of last year. Unless it can get through there and do it quickly, it is beginning to look more and more like a double top with a weak right top has formed. That needs to be confirmed however.

Click chart to enlarge today’s hourly action in Gold in PDF format with commentary from Trader Dan Norcini

January2609Gold1230pmCDT.jpg

Posted at 3:21 PM (CST) by & filed under General Editorial.

Dear CIGAs,

The day in 2009 that insolvency comes in the planetary form, you can be sure of only one thing: You will not know it.

Your government, whomever they are, will keep the collapse a total secret until you are completely wiped out by hyper-inflation and/or insolvency of your retirement plan.

You cannot trade your way to insurance. That concept is egomaniacal and downright stupid.

Own gold and gold shares or you will be the victim of your government and the media’s feeling that you are:

NOT WORTHY OF THE TRUTH

Revealed: Day the banks were just three hours from collapse
By Glen Owen
Last updated at 11:21 PM on 24th January 2009

Britain was just three hours away from going bust last year after a secret run on the banks, one of Gordon Brown’s Ministers has revealed.

City Minister Paul Myners disclosed that on Friday, October 10, the country was ‘very close’ to a complete banking collapse after ‘major depositors’ attempted to withdraw their money en masse.

The Mail on Sunday has been told that the Treasury was preparing for the banks to shut their doors to all customers, terminate electronic transfers and even block hole-in-the-wall cash withdrawals.

Only frantic behind-the-scenes efforts averted financial meltdown.

If the moves had failed, Mr Brown would have been forced to announce that the Government was nationalising the entire financial system and guaranteeing all deposits.

But 60-year-old Lord Myners was accused last night of being ‘completely irresponsible’ for admitting the scale of the crisis while the recession was still deepening and major institutions such as Barclays remain under intense pressure.

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Jim’s Outlook On 2009
Posted: Jan 26 2009 By: Jim Sinclair Post Edited: January 26, 2009 at 12:20 am
Filed under: General Editorial

Dear CIGAs,

1. Before 2009 is out the next major economic shock will become obvious. There is not one major funded retirement program intact thanks to the manufacturers and distributors of OTC derivatives. The unfunded ones are a total loss. Retirement in the future is totally out of the question. Many now retired will end up in the same situation as those trying to live off fixed income. Both categories are being culled from the human gene pool.

2. By my 68th birthday Obama will recognize his position as a bagged President, knowing then that the economic situation does not have any practical solution.

3. By July 4th, 2009 the rally in the US dollar will have become a simple hope for the lows to hold.

4. My long held targets of $1250 and $1650 for Gold that were once laughed at as outrageously high can now be laughed at for being painfully too low.

5. Only gold and related shares are insurance against the economic cataclysm now taking place.

 

Everyone is looking for where and when the top in gold will come. Will it be Jim’s $1650 or Alf Field’s $10,000 plus before it comes back down?

To put it nicely, you are all wrong. Gold is going up and STAYING up.

There is no top to look for because like all things people strive for, the top does not exist.

Gold will trade within $200 of a given point as a product of the Master of the Financial Universe, Paul Volcker, taking control when all this is totally out of control. He will instate the revitalized and modernized Federal Reserve Gold Certificate Ratio, not gold convertibility, and not tied to interest rates as an automaticity. Only then can Volcker put in place policy backed by the sitting administration that has a provable history of starting the change from deficit to surplus, his price of saving the world one more time.

The Gold mining business will then be the best business there is and the highest dividend paying monetary utility.

Respectfully yours,
Jim

Posted at 12:20 AM (CST) by & filed under General Editorial.

Dear CIGAs,

1. Before 2009 is out the next major economic shock will become obvious. There is not one major funded retirement program intact thanks to the manufacturers and distributors of OTC derivatives. The unfunded ones are a total loss. Retirement in the future is totally out of the question. Many now retired will end up in the same situation as those trying to live off fixed income. Both categories are being culled from the human gene pool.

2. By my 68th birthday Obama will recognize his position as a bagged President, knowing then that the economic situation does not have any practical solution.

3. By July 4th, 2009 the rally in the US dollar will have become a simple hope for the lows to hold.

4. My long held targets of $1250 and $1650 for Gold that were once laughed at as outrageously high can now be laughed at for being painfully too low.

5. Only gold and related shares are insurance against the economic cataclysm now taking place.

Posted at 12:14 AM (CST) by & filed under General Editorial, Guild Investment.

Dear CIGAs,

IT IS NEVER WISE TO INSULT YOUR BIGGEST CUSTOMER, ESPECIALLY WHEN YOU PLAN A BIG SALE OF PRODUCT THAT YOU WANT THEM TO BUY. Even if you have political debts to large donors who do not care about what is best for the average American, they care only about what is best for them.

Respectfully yours,

Monty Guild
www.GuildInvestment.com

Chinese Ministry Denies Geithner’s Currency Claims
JANUARY 25, 2009, 9:35 P.M. ET
By IAN JOHNSON and SHEN HONG

BEIJING — A Chinese ministry Saturday strongly denied Obama administration claims that China "manipulates" its currency, as the first contact between the new administration and China takes a markedly sour tone.

On Thursday, President Obama’s nominee for Treasury secretary, Timothy Geithner, told U.S. lawmakers that President Barack Obama, "backed by the conclusions of a broad range of economists — believes that China is manipulating its currency." No Chinese official of Mr. Geithner’s standing has fired back — a move analysts say shows that China doesn’t want to overreact to the statement — but Saturday morning an official from China’s Ministry of Commerce said "we never have used currency manipulation or exchange-rate manipulation as a mains to gain an advantage in international trade." The statement, provided by an official from the ministry’s news department, also said China would not "rely on devaluations" of its currency, the yuan, to promote exports.

Some Chinese commentators say the verbal sparring is a sign of greater trade friction to come with Washington. They noted that both sides’ comments were written, not spoken — and therefore should be taken as a serious view of intent.

"This is the first communication by the new president’s team to China and it is provocative," said Shen Dingli, professor of international relations at Fudan University in Shanghai. China’s official Xinhua news agency also weighed in Friday evening, saying that Mr. Geithner’s claim "fans Sino-U.S. trade fears," alluding to concern in Beijing over protectionism in the new administration.

Chinese officials are deeply concerned that the global economic downturn could spur protectionist moves in the U.S. and elsewhere that could further damage China’s trade-dependent economy. Mr. Geithner’s comments marked a significant escalation in U.S. criticism of China’s exchange-rate system.

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Posted at 3:36 PM (CST) by & filed under General Editorial.

JimsAdvisors

 

Jim Sinclair’s Commentary

#28 and counting!

First Centennial Bank of California Shut by Regulator (Update1)
By Margaret Chadbourn and Ari Levy

Jan. 23 (Bloomberg) — First Centennial Bank of Redlands, California, was seized by a state regulator, the third U.S. bank to fail this year, as the recession deepens and the slump in the housing industry sends home foreclosures to records.

First Centennial, with $803.3 million in assets and $676.9 million in deposits, was shut by the California Department of Financial Institutions and the Federal Deposit Insurance Corp. was named receiver. First California Bank, based in Westlake Village, will assume deposits. The failed bank’s 6 offices will open Jan. 26 as branches of First California, the FDIC said.

“Depositors of the failed bank will automatically become depositors of First California,” the FDIC said in an e-mailed statement. “There is no need for customers to change their banking relationship to retain their deposit insurance coverage.”

Regulators closed 25 banks last year, the most since 1993, draining money from the FDIC deposit insurance fund, which had $34.6 billion as of Sept. 30. National Bank of Commerce in Berkeley, Illinois, and Bank of Clark County in Vancouver, Washington, were shuttered by regulators on Jan. 16.

First California will buy about $293 million in assets and will pay a premium of 5.3 percent to assume the failed bank’s insured deposits, the FDIC said. The cost to the deposit insurance fund, supported by fees on insured banks, will be an estimated $227 million, the agency said. First Centennial had about $12.8 million in deposits that exceeded insured limits, the FDIC said.

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Posted at 6:05 PM (CST) by & filed under General Editorial.

My Dear Friends,

Everyone is looking for where and when the top in gold will come. Will it be Jim’s $1650 or Alf Field’s $10,000 plus before it comes back down?

To put it nicely, you are all wrong. Gold is going up and STAYING up.

There is no top to look for because like all things people strive for, the top does not exist.

Gold will trade within $200 of a given point as a product of the Master of the Financial Universe, Paul Volcker, taking control when all this is totally out of control. He will instate the revitalized and modernized Federal Reserve Gold Certificate Ratio, not gold convertibility, and not tied to interest rates as an automaticity.

The Gold mining business will then be the best business there is and the highest dividend paying monetary utility.

Respectfully yours,
Jim

Posted at 3:58 PM (CST) by & filed under Trader Dan Norcini.

Dear CIGAs,

“The battle for Helms-Deep is over; the battle for Middle Earth has begun”!

So says Gandolph the Wizard in the second of Lord of the Rings trilogy, “The Two Towers”.

Gold has beaten back the Orcs and Uruk-Hai to regain the critical $880 level and must now deal with the Ringwraiths (the bullion banks) and Sauron (the monetary lords) as they attempt to defend Mordor (the unbacked paper money system – the root of all economic woes in the global universe). If Frodo can just make it to the fires of Mt. Doom and throw the golden ring of power into the volcanic flow (reintroduce gold into the monetary system), the system will topple freeing the masses from the tyranny of the money masters!

Okay – so it’s a bit melodramatic but gold has smashed through the level which all of the technical studies point to as being the lynchpin of the monetary authorities’ defense – the $880 level. That level marks the upper boundary of the bullish wedge formation I mentioned in yesterday’s commentary as well as the horizontal resistance level which has held it in check since the middle of last December. Bulls were able to take it through this barrage of bullion bank selling who not unexpectedly were attempting to absorb all of the bids and force it back down. The battle could be seen on the 5 minute charts where for a while they were successful at defending their position but a strong wave of buying stormed into the market and effectively routed them out. They were then forced back to $900 where they are regrouping.

Once again gold has defied the action in the Dollar keying off the banking crisis now occurring in Britain as the British Pound disappears into a black hole while the Euro continues to swoon as confidence in the economic fortunes of Euroland disappears like the morning mist. Gold is seeing strong safe haven flows from Europe, which as all the regular readers of this site have known for some time, has generally been the scene of bear raids on gold commencing around the 2:00 AM CST hour. Not so any longer – there is real fear gripping Britain and Europe. Gold has again made yet another all time record high in terms of Sterling at the PM Fix coming in at 641.012 while Euro price gold did indeed set a brand new all time high at the Fix, coming in at €682.420. Euro gold looks like it might be making a run towards €700. At the risk of being repetitive – it certainly appears that a loss of confidence in the European currencies is occurring with the resulting rush into gold being led by European investors. New York is keying off of that as momentum players now move in on the long side.

Overhead resistance now becomes $900 which is near today’s session high followed by more stiff resistance near the $935 – $940 level. Support initially emerges back near $880 and then near the downsloping trendline at the top of the wedge formation which comes in near the $870 level. Oftentimes markets will break up and out of such a formation and then come back down to the broken trendline where they should find buying support and bounce back higher if the breakout is a bona-fide one.

The HUI and the XAU look like they have finalized a divorce from the broader equity markets after their trial separation period which began early this week. The HUI is closing in on former double top resistance near the 310 – 312 level which if it can best that should put it on path to target the general region near 350. The XAU appears to be the stronger looking of the two indices as it closes in on 127, again, a double top that has been in place for the last 5 weeks. A breach of that level and it has a good shot at making a run towards 138 – 140.

I should point out that the major gold ETF, GLD, reported a surge in gold investment demand driving reported tonnage to a new record high of 819 tons. You all know how I feel about that particular entity but nonetheless it still remains a good barometer for gold investment demand.

Keep in mind that this drive higher in gold has been occurring against a backdrop of relatively very low open interest. After making a peak above $1000 last year, open interest in gold reached to almost the 600,000 mark, topping out at 593,953 nearly a year ago to this exact date. Yesterday’s open interest number was a paltry 342,088 or 57.5% of the peak. This comes with gold around $110 or so away from reaching the $1000 level again. Clearly, there is a great deal of room in the paper gold market should momentum players begin returning in size. I would still suggest to some of these managers that they consider standing and taking delivery of some of the gold contracts that they are buying and help pull down the Comex warehouse stocks further. Even so, I wonder what the price might be should another 100,000 new longs move into this market…

Bonds continue to sink as excessive supply fears overwhelm any flight to safety buying that might be occurring. I am certain the Fed does not like seeing interest rates going in this direction especially since they were hoping to push longer dated yields lower by announcing potential plans to buy along the long end of the curve in an attempt to stimulate the housing sector.

Stocks have moved into positive territory as I finish this commentary. That is only helping put additional strength into the HUI and the XAU.

Click chart to enlarge today’s hourly action in Gold in PDF format with commentary from Trader Dan Norcini

January2309Gold1230pmCDT.jpg

Posted at 3:03 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

Maybe nationalized? Who are you kidding, they are!

The Economist Of The Year award is going to Lenin.

Citigroup, Bank of America May Look ‘Nationalized’ (Update1)
By Ari Levy

Jan. 23 (Bloomberg) — The U.S. government’s decision to pledge billions of additional dollars with strings attached to Citigroup Inc. and Bank of America Corp. may be nationalization by another name, according to former bankers and regulators.

Faced with pressure from lawmakers, banks have shaken up management, eliminated executive bonuses and staff and canceled conventions. They’ll be forced to do monthly reports on how they’ve boosted lending while slashing quarterly dividends to one cent a share for three years.

“When the Treasury tells a bank to pay a penny a share vs. its old dividend, you know who’s calling the shots,” said Jon Bruss, a 40-year industry veteran and founder of Hartland, Wisconsin-based Fortress Partners Capital Management Ltd., which invests in banks. “It may not be de jure nationalization but I think it’s de facto nationalization.”

While avoiding steps taken by the U.K., which this week acquired a 70 percent stake in Royal Bank of Scotland Plc, U.S. regulators are no longer passively injecting capital into the nation’s biggest banks. Investors have fled, sending Citigroup and Bank of America down by more than 50 percent this year, on concern that tougher U.S. oversight is coming after the government takeover last year of mortgage financers Fannie Mae and Freddie Mac, and insurer American International Group Inc.

Citigroup, based in New York, tumbled 56 cents, or 15 percent, to $3.11 yesterday on the New York Stock Exchange. Bank of America plunged 97 cents, or 15 percent, to $5.71. The 24- company KBW Bank Index has dropped 38 percent in 2009, following last year’s 50 percent decline.

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Jim Sinclair’s Commentary

My apology to those that object, but I believe there are three human rights.

1. Potable Water
2. Health
3. Education

A society that fails to provide this is not a society but simply a grouping of people.

I firmly believe that these requirement come before Bernard Madoff hedge fund rescues, any Administration, declaration of preemptive wars and rampant white collar theft.

Having said that the following cannot be funded without a resort to inflating away old debt, NOW. Too bad.

House Committee on Ways and Means
For Immediate Release:
Thursday, January 22, 2009

Ways and Means Passes Economic Recovery Legislation

Bill would provide critical tax, health and unemployment benefits for families, gives incentives to create jobs

WASHINGTON, D.C. – The House Committee on Ways and Means voted today in support of a comprehensive economic recovery package to provide tax, health and unemployment relief to families while also encouraging businesses to create new jobs.  The legislation, H.R. 598, passed the Committee by a party-line vote of 24 to 13.  The legislation will now be combined with other components of the recovery package from other House Committees into H.R. 1, the American Recovery and Reinvestment Act for consideration by the full House of Representatives next week.

“This legislation will provide critical benefits and incentives to middle-America, poor-America, and businesses, large and small, who are struggling during this economic downturn,” said Chairman Charles B. Rangel (D-NY).  “This plan will go a long way to help relieve the pain these families and businesses are experiencing so that we can restore some confidence and economic security and help America maintain its prominence in the global marketplace.  Simply put, the American people cannot keep the engine of our economy running if they don’t have money to spend and this package provides tax relief and critical benefits to help them take home a little more each month and help the economy grow.”

Critical Benefits to Families, Businesses, Incentives to Create New, Green Jobs:

The Plan, as passed by the Committee will provide critical tax relief to working families and assistance with healthcare costs as well as extended and enhanced unemployment benefits for those who have lost their jobs during the economic downturn.  The Plan would also give businesses, large and small, tax incentives to invest in plants and equipment and expand to hire new workers, helping to strengthen our economy and create new jobs.   In particular, the Plan would help create new, green jobs by making a critical investment in renewable energy and energy efficiency.

Important Health Benefits, Improvements to Care:

The Plan would also provide payment incentives to encourage the widespread adoption of Health Information Technology (HIT) and establish standards for interoperability and privacy.  The investment in HIT is a critical step toward modernizing American healthcare, cutting red tape, eliminating redundant care and reducing health insurance premiums for millions.

Finally, the Plan would provide temporary subsidies to help families who have lost their jobs maintain their healthcare coverage through the Consolidated Omnibus Budget Reconciliation Act (COBRA).  This benefit will be of tremendous assistance to families struggling to find new work and maintain economic security during the downturn.

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Jim Sinclair’s Commentary

It is really never going to happen in absolute terms. Wait until you see what gold does as the dollar treasuries reveals themselves to not be a safe haven.

DJ MARKET TALK: Higher Comex Gold Decoupling From Dollar

1426 GMT [Dow Jones] – Comex gold is decoupling from its normal inverse relationship to the U.S. dollar, says Bart Melek, global commodity strategist with BMO Capital Markets. Despite a stronger dollar, February gold is up $21.70 to $880.50 an ounce as investors turn to the metal as a safe haven and monetary asset, he says. He also describes the market as tightening physically, with mining output down lately but strong investment demand for physical gold and holdings rising in ETFs. Metal that is backing the SPDR Gold Trust, the world’s largest gold ETF, rose 13.15 metric tons Thursday and now stand at a record 819.11 metric tons. March silver is up a more modest 21 cents to $11.575. (ALS)

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Jim Sinclair’s Commentary

Do you really think that the US and GB are going to avoid social unrest? Wait until you see how politicians react to these upcoming events.

It will be physically nasty, and the balance of payments together will be expensive.

Iceland Is Burning — Day 2
Iris Erlingsdottir
The Huffington Post
01-23-09

The extensive protests that shook Iceland Tuesday have continued into Wednesday and are beginning to have an effect on one of the two political parties making up Iceland’s coalition government.

Late Wednesday night, as thousands of protesters re-lit a large bonfire in front of the Parliament, the Reykjavik chapter of the Progressive Party voted to recommend to the party’s national representatives that they withdraw from the ruling coalition, and called for new elections in May 2009. As the night wore on, though, matters descended into violence. Around 1:30 am, police dispersed the crowd with tear gas, the first time tear gas had been used against Icelanders in 60 years. The crowd soon reformed and pelted riot police with stones. One officer was severely injured by a cobblestone, the newspaper Morgunbladid said.

Although the leader of the Social Democratic Alliance, Foreign Minister Ingibjorg Solrun Gisladottir, was out of the country, Prime Minister Geir Haarde, leader of the Independence Party, told reporters that he believed she remained committed to the current ruling coalition. He insisted that the government was "functional" and that holding elections this spring would result in nationwide chaos.

The rank and file members of the Social Democratic Alliance appear to differ, however. Calls for the current representatives within the Party to step aside were widely applauded at tonight’s meeting, as were calls for spring elections and a new coalition.

The protests have been sparked by Iceland’s catastrophic economic collapse over the past three months, and the failure of the government to call for immediate elections or to investigate the rumored widespread malfeasance by the country’s leading bankers, businessmen, and politicians. "It should be clear to everyone that a government that has failed as utterly as the Icelandic government has can neither investigate, nor clear up the past, nor forge a new path into the future," said retired professor Njörður P. Njarðvík.

Wednesday morning began with angry protesters throwing paint at the government building and surrounding Prime Minister Geir Haarde’s car. They banged on the vehicle’s windows and pelted it with eggs for several minutes before his bodyguards and police pushed them away. The protesters gathered in front of the Parliament building banged on pots and pans while shouting "Unfit government!" "You’re fired!" and more creative insults. Although the racket calmed down to show respect to mourners at a funeral in the neighboring Reykjavik Cathedral, a mourner encouraged them to "produce enough racket to be heard across the country" when it was over.

Iceland has come to expect little change from the members of Althingi, the elected representatives, who have been widely criticized for being little but a rubberstamp for the conservative government agenda, but they claim they are getting the message. "So why aren’t the protests getting through to you, why hasn’t there been any change?" a state television reporter asked a Social Democratic Alliance representative. "We very clearly noticed the protests, and we get the message that people want change," he said without elaborating. The Conservative Party Representative’s reply to the question painfully demonstrated whose interests the Icelandic Althingi represents: "Well, representatives are just representatives," Ms. Ragnheidur Rikhardsdottir, said, "and ministers are ministers, and theirs is the power."

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