USAGOLD Gold Discussion Forum Archive

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WaveriderU.S. intervened for Japan, O'Neill says#7961107/01/02; 14:06:13

The HoopleMartha Stewart in Hell's Kitchen#7961207/01/02; 14:11:33

I just thought I would beat the New York Post to that headline. I look at the gold bashing the last few weeks and wonder what would be happening right now if it were hanging around $330. Worldcom would have maybe just done the trick to force the cabal off the cliff. Wonder how GE, IBM, AOL,Cisco, JPM, and the titans will survive possible re-statements? I've never seen a more favorable climate for gold ownership in my lifetime. Like the old saying a paranoid is someone who truly understands the situation.
MO VER MEGthe hoople#7961307/01/02; 14:32:49

On a hot, windy, drought stricken day on the high plains, your post was just what I needed - thanks for the uplift.
YGMCanada Day Fireworks Display ........(real time)#7961407/01/02; 14:43:46

Awesome solar event today....check out lower left of Sol.
PizzDetterance#7961507/01/02; 15:03:35

Just watched the HBO movie Deterrance this weekend. Good flick with a not so subtile message. For those who haven't seen it, the basis is a nonelected president who has to make a nuclear decision from a diner in Colorado (he's snowed in during a crisis)after Iraq makes a move on Kuwait with the US undermanned and concentraiting on the Eastern Pacific.

Thought of it again when I read a comment on another board stating kind of tongue in cheek that the way things are going we need another major terrorist event inside the US to be able to explain away all the current problems and blame for the upcoming (further) collapse.

Not so tongue in cheek with me,


WaveriderYGM - Solar Eruption#7961607/01/02; 15:07:17

The eruption today was 30 times the length of Earth's diameter. If aimed at Earth, it could destroy the magnetosphere. I believe that Black Blade posted a story on one some time back with a title that read..."Sun Farts but Earth not Downwind". Thanks for the photo!
NomadChina#7961707/01/02; 15:17:02

re : mdgc You're welcome and thank you ! :)

I should mention one thing about Tibet. I have never been there so I do NOT speak from experience ... but when I confront my Chinese friends about Tibet, something I have done many times in PUBLIC in my classes, their explanation is that the Tibet people are VERY poor and that it is the economic help of the Chinese government which keeps them going.

They also point out that better than 90 percent of all tourists to Tibet are Chinese and this is the principal economic activity in the region. This is probably true, in that all the Chinese cities I have been in are regularly visited by itinerant bands of Tibetans selling knives and jewelry and cow skulls, the women ususally also with a baby strapped to the back.

As an example, the mother of one of my best students is off to Tibet to do the tourist thing this weekend.

My basic impression is that the (Chinese) government would love to preserve Tibet the way it is, as during the Cultural Revolution the Chinese managed to destroy 99 percent of all antiquities that they had and not much is left to look at, whereas many parts of Tibet are still intact.

Jimbo@Waverider & Black Blade#796187/1/02; 15:37:52

Help me understand, please, exactly how the U.S. Federal Reserve intervened in foreign exchange markets on Friday. (The Globe and Mail article really doesn't specify.) Let's see, if I read correctly, Black Blade, the Japanese Central Bank fiddled with the Yen to retain a cheaper exchange rate relative to the dollar. (Which, in turn, stalled the dollar's slide and depressed the price of gold.) Is that correct? Could you or anyone else surmise how the Fed worked with the Japanese Central Bank to accomplish this task? And how could it be good for the U.S? After all, wouldn't a somewhat devalued dollar help U.S. exporters make more money? Of course, the Japanese exporters would make less. But, if memory serves, the Japanese exporters screwed us in this regard during the early to mid-90s?
mdgcTibet#796197/1/02; 15:53:16

Re: Tibet

I cannot tell the Chinese tourists from the Chinese residents in Tibet. They all look the same to me. There are lots of Western tourists: older Americans and Europeans in group tours; college girls with tattoos; Aussies and New Zealand trekkers, folks like me.

There was plenty of destruction during the Cultural Revolution; my understanding is that it was not Chinese, but Tibetan Red Guards that did the destruction, no doubt following what was happening elsewhere in China.

Yes, the people are very poor. My sense is what the Chinese first goal is to improve the standard of living of Tibetan in order to reduce the support for the Dalai Lama and Tibetan independence.


YGMRBC Report Re-Visited......Because it needs to be......(FOR THOSE WITH DOUBTS ON GOLD OWNERSHIP)#796207/1/02; 15:54:19




Clearly, with gold stocks on a tear as the gold price moves laboriously forward battling the fervent attempts to suppress it, one must be comfortable with the notion that the gold price is going to overcome the forces that are aligned against it. What is happening today is no different than what was happening in the late '60s and the very early '70s, when the Gold Pool was in existence and the gold price was contained at $35 per oz. by a consortium of central banks that dumped a considerable amount of gold to keep prices down. Today, instead of the overt action of yesteryear, it is covert because the market is allegedly free, and it has entailed a different mechanism, which has resulted in a humongous physical short position. In addition, there has been an enormous amount of derivatives piled on top, which could make the ultimate upside explosion all the more spectacular.

So the question obviously is: "Will the gold rally ever begin?" The following arguments emphatically suggest that it will more than rally; it will explode to the upside.

1.Unsustainable Supply/Demand Imbalance

Mine production has flattened out at 2,600 tonnes and is beginning to fall due to a lack of exploration, falling grade at many mines due to previous high-grading, and the closing of older mines as they run out of ore. It has been estimated by Beacon & Associates in an exhaustive study that if gold prices were to remain under $300/oz., production will fall in the neighborhood of 25% over the next 5 to 7 years. Scrap supply tends to average about 600 tonnes annually. Demand is currently estimated to be roughly 4800 tons (primarily jewelry) without any investment demand from the Western world. The present deficit has been met by direct central bank sales (roughly 400 tonnes per year) and central bank leasing for mining hedges and financial speculation.

2) Unsustainable Short Position

Central banks have ostensibly lent increasing amounts of gold to earn interest on their reserves. However, when one lends at an rate (less than 1% generally), the question arises as to whether there may be another motivation. As a rising gold price stands as a direct repudiation of their alleged responsible monetary policy, perhaps this is the real reason they have been so aggressive in this area. Bullion banks have borrowed gold from the central banks for their own accounts and those of various speculators, such as hedge funds and financial institutions (the carry trade) and for producers (mine hedging) and have used derivatives to limit their risks and generate additional income. The loaned gold has been sold into the physical market and is now in jewelry, primarily in the Middle East, India, and other parts of the Far East. The size of the short position, officially acknowledged to be more than 5,000 tonness by the bullion bank apologists, is thought to be well over 10,000 tonnes and may exceed 15,000 tonnes. To put this in context, this constitutes between one-third and one-half of all central bank gold, and the vast majority of it is no longer accessible.

3) Unsustainable Low Inflation

The gold price has a tendency to rise at the first whiff of accelerating inflation. CPI inflation has been unrealistically low due to the very strong dollar, which has underwritten vicious foreign competition and removed pricing power in many sectors. However, in the final analysis, inflation is a monetary phenomenon and the aggressive interest rate cuts and monetary expansion to avoid recession/deflation is expected to result in re-inflation. Year-to-date, the liquidity injection is more than $1 trillion and MZM has grown by 16.5% in the past year. To avoid debt default, the Fed must err on the side of ease, virtually ensuring upside pressure on the CPI. In addition, the "war on terror" superimposed on Bush's mammoth tax cuts and a four-year government real rate of spending increases that is the greatest since the '60s portends large U.S. government deficits, yet another recipe for inflation.

4) Unsustainable U.S. Dollar

The U.S. dollar has been levitating for a long time, but the underlying fundamentals continue to erode. The U.S. current account deficit exceeds $400 billion annually, and the continuation of this chronic deficit turned the U.S. into the world's largest debtor as most of these deficits are being recycled into U.S. debt instruments. However, foreign appetite for U.S. securities appears to be ebbing and the chart on the U.S. dollar looks very toppy . Gold is already in a bull market in U.S. dollars, and an established bull market in every other currency. If the reserve currency, the U.S. dollar, falters, gold could well be launched on the upside as people recognize its status as the only "true currency."

5) Unsustainable Prices for Financial Assets

Western world investment demand will be the true fundamental that drives gold much higher. Gold tends to be counter-cyclical and investors buy it when financial assets begin to lose credibility. Ownership and pricing (P/E) of financial assets are at historic highs and if inflation accelerates, the U.S. stock market is extremely vulnerable. The ratio of the S & P 500 Index to the price of gold reached an all-time high, by a considerable margin, in 2000, but this parabola have been broken and a downward trend is in effect. At the margin, if a small amount of money is moved from financial assets into gold, the price effect on gold will be dramatic and the ratio will continue to move in gold's favor.

6) Increasing Evidence of Unsustainable Gold Price Manipulation

a. Aggressive gold lending, which from an economic perspective is indefensible, has filled the supply/demand gap.

b. NY Fed gold has been mobilized when the gold price is rising.

c. Timing of Exchange Stabilization Fund gains/losses corresponds to gold price movements.

d. Audited reports of U.S. gold reserves show unexplained variances.

e. Minutes of Fed meetings confirm officially denied gold swaps.

f. Rules on gold swaps revised but subsequently denied. However, individual central banks have repudiated the denial.

g. U.S. gold reserves have recently been re-designated twice, initially to "custodial gold" and latterly to "deep storage gold."

h. Statistical analysis of unusual gold price movements since 1994 indicate high probability of price suppression. The invalidation since 1995 of Gibson's Paradox -- that gold prices rise when real interest rates fall -- suggests that the real manipulation began then.

i. NY gold price movements versus London trading defy odds.

j. Timing of huge increases in bullion bank gold derivatives is consistent with gold price declines.

k. Rapid decline in U.S. Treasury holdings of gold-backed SDR certificates is not explained.

One or two of these factors could be viewed as random, but the full body of evidence is overwhelming.

It would appear that gold is beginning to be viewed as money again. Gold is the only monetary asset that doesn't represent somebody else's liability, and with U.S. real short-term interest rates now in negative territory, there is no disadvantage in holding gold. Those with a vested interest in containing the price of gold -- central banks, bullion banks, heavily hedged gold companies -- will not die easily, but the tide is moving strongly against them and the embedded short positions could catapult the gold price higher while imperiling the future of those holding the short positions.

The great rallying cry of the bears is the mobilization of even more central bank gold to the tide. Recently, Ernst Welteke of the Bundesbank has spoken publicly of the Germans selling gold after the initial Washington Agreement limiting European central bank gold sales to 400 tonnes per year expires in late 2004 with the intention of redeploying into stocks and bonds. Formerly, commentary and action of this sort by central banks (the announcement of Swiss sales, the initiation of English gold auctions, etc.) devastated the gold market but this elicited little more than a yawn. An astute gold analyst in South Africa postulated the reason why, perhaps. There are strong rumors that Deutschebank has borrowed an enormous amount of gold (more than $10 billion worth) from the Bundesbank over the years to facilitate the carry trade, producer hedging, etc. and it is becoming apparent that there is no way they will be able to pay it back. Perhaps, to make good on their gold loans, they will reimburse the Bundesbank with stocks and bonds and Mr. Welteke is readying the German public for with his statements.

In addition, there are enormous dollar reserves building up in the Far East, particularly in China, and the Far East has acknowledged being significant buyers of gold. So the flow of central bank gold is not only one-way. Even the Russian Central Bank is on the buy side. The shibboleth of central bank sales will undoubtedly be trotted out again, but it is losing its sting, particularly if the possibility that as much as half of all the central bank gold may already be in the market starts to become more widely recognized.

In addition, in the '70s, when gold was rising sharply in price, central banks, after having been heavy sellers at $35/oz., sold little or none at higher prices. Central bankers are no different than the momentum players; if the price is rising, they are more likely to be buyers than sellers.

One last observation concerns the gold share price action prior to the explosion of gold prices in the '70s. Then, as now, gold stocks rose to prices that made no sense to observers who had a static view on gold prices, but the stock buyers knew that sharply higher gold prices were inevitable. I suspect that is the case today, particularly when one examines the foregoing evidence.

**How much convincing does the Gold Shy spec need beyond this???....YGM.

misetichRelax: Japan Won't Bring on Financial Armageddon#796217/1/02; 16:06:07


In global finance, it has long been the sum of all fears. What if one of Tokyo's $1 trillion money- center banks keels over, triggering a cascade of other failures among Japanese companies and lenders. Banks, life insurers, and companies frantically shore up their balance sheets by cashing out their U.S. Treasuries and stocks, causing the dollar to crater and U.S. interest rates to spike. Big Japanese lenders default on their end of complex derivative transactions, exposing U.S. and European banks to horrendous losses. Chaos ensues.

That prospect is why big guns in Washington such as Treasury Secretary Paul H. O'Neill and Federal Reserve Chairman Alan Greenspan nag Tokyo about fixing its decade-long banking crisis before it's too late. With signs that Prime Minister Junichiro Koizumi's government has lost interest in reform, the calls have become more shrill. "The time for half-measures and postponement has passed," warned O'Neill last month.

Take U.S. Treasuries. The Japanese do own 27% of the $1.2 trillion in Treasury bills, bonds, and notes held by foreigners, but other big players such as Britain, Germany, China, and the deep pool of U.S. pension and mutual funds, could pick up the slack if the Japanese pulled out. Also, only the most cash-strapped Japanese banks would forsake the healthy returns on U.S. Treasuries. And foreign investors hold only a measly 5% of Japan's $4-trillion bond market, which could take a beating if the Japanese sold their domestic bond holdings to raise cash.

As for the stock market, a bank-induced crash in the Nikkei would hurt but wouldn't be catastrophic. Back in 1990, the Japanese markets represented 30% of global market capitalization. Now, it's only 10%. And there are only 36 foreign companies listed on the first section of the Tokyo Stock Exchange, vs. 127 in 1991.

What about the loans foreign banks made to highly indebted Japanese companies that could get cut off at the knees by their cash-strapped domestic bankers? Well, in a two-year period ending last September, international banks' loans outstanding to Japanese borrowers fell by 16%, to about $513 billion, and the loans are mostly to blue chips with strong balance sheets. As for the big, highly leveraged derivatives deals that might leave foreign banks burned if a Japanese counterparty bank defaulted, Japanese banks represent only 10%, or $100 billion, of that market.

It's true that by dithering over its banking mess and keeping its economy in low gear, Japan is robbing the rest of the world of potential trade and investment. O'Neill figures that Japan sacrificed $5 trillion worth of economic output over the past decade by growing an average of 1% instead of 3%. But forget those overwrought predictions of a global market firestorm touched off by a failure in Japan's financial system. It just isn't going to happen.

JULY 8, 2002

By Brian Bremner


It sounds like Bremmer is tailored made for either US Treasury or Federal Reserve- A court jester

"Take U.S. Treasuries. The Japanese do own 27% of the $1.2 trillion in Treasury bills, bonds, and notes held by foreigners, but other big players such as Britain, Germany, China, and the deep pool of U.S. pension and mutual funds, could pick up the slack if the Japanese pulled out"

OK - now that you've had your -daily funny - get going and

get some gold!

misetichGlobal Corporate Defaults Spike During First Quarter of 2002#796227/1/02; 16:23:06


The rate of global corporate default spiked during the first quarter of 2002 due to 38 defaults in Argentina, driving the quarterly issuer-based speculative grade default rate to 4.11%, its highest level ever. The Argentine corporate defaults were largely the result of pesification, the term used to describe the Argentine government's de-dollarization of all transactions and redenomination of those transactions in pesos. Excluding the Argentine corporate defaults, the global rate of default sustained the high pitch reached in 2001 with 2.25% of speculative-grade issuers defaulting. Defaults are expected to continue at their current level through mid- 2002, at which time the default rate should begin to gradually diminish. By year- end the annual rate of default is expected to exceed that of 2001.

First Quarter 2002 Results
Globally, 94 companies defaulted on $32.4 billion of rated corporate bonds during the first quarter of 2002 (see table 1). This is the largest number of issuers ever to default during a single quarter (see chart 1), exceeding the previous high of 59 defaulters during the fourth quarter of 2001. The dollar amount is lower than the record $36.9 billion that defaulted during the first quarter of 2001 (see chart 2). Historically speaking, both of these quarterly numbers are extremely high, as they both exceeded all annual default figures for years previous to 1999 (see charts 3 and 4). The 38 first quarter Argentine defaulters represented $1.5 billion of rated debt.

When Will Defaults Peak?
The first quarter of 2002 was unique in that more than half of the rated companies from Argentina defaulted. This came on top of global default rates that were already very high, creating a temporary spike. As the Argentine defaults were a one-time event, Standard & Poor's does not expect to see a repeat of the first quarter's exceedingly high default rate. Taking Argentina into account, it is safe to say that defaults peaked during the first quarter of 2002.


OK S&P back to your research - and this time don't forget to include Brazil, and the wipeout of 1 1/2 trillions in US market value in the last few weeks and continued deterioriation of investor confidence in corporate America, and the continued Japanese recession

Got gold?

BelgianWeak US$ AND weak POG......hahaaaaa#796237/1/02; 17:37:11

A contradictio in terminis or paradox ? No, not from my lilliputan standpoint ! It is the "euro" that makes it different today...

The dollar exchange-rate (dollar-index) is on its way to the 1995 lows, in phase I. Doubts anyone ? If yes, then explain the swift and vigorous decline of recent. Sign on the wall for an irreversable trend. But...
Where to hide ? And here we land at Euroland's ivory tower concept builders. The euro's top priority (recently firmly restated), is its expansion from the present 300 million Eurolanders to 500 million...and this IN ONE BIG GO !? The euro has no less ambition than to dethrone the US$. Therefore the euro-builders prefer to "guide" the dollar-leavers into the euro-currency as dollar alternative. So it is very convenient, at present, to block (?) to a certain extend the VOG alternative, up until a more appropiate moment (dollar-loss-compensation)!?

Two flies in one slam. POG rise (290$ > 326$) urged/signaled dollar-weakness and the desire to enhance its downtrend against the euro. Once the dollar-holders understood the message (Soros), the Gold-alternative (dollar-escape) should, temporary, remain less attractive. At the same time (fly 2), the 330$/354$ forward sales, danger zone has been respected (postponed-slowed down).

As explained before, I still do believe that POG is used by many different "interests" for different purposes, but serving, temporary, mutual interests...FOR THE TIME BEING !!!
Forward sales possible debacle...extension for US$ lifetime...and the subtle "dept" building for the expansionist euro, still aiming at oil for euro (part of it).

On top of all this, Gold's basic fundamentals, have landed in pole position : Again I want to refer to the past 30 years (1971 > 2002). First of all, the bulk of underground Gold has been mined and not much (percentage wise) is to be added for decades to come. The in-accurate figure of total aboveground refined of 144.000 (must be more) is nicely distributed amongst 1/Official Giants (CBs) - 2/Private Giants (discrete) - 3/Jewelry (scrap provider) - 4/Underground Gold, variable amounts to be mined profitable in function of POG and mining currency costs (10 years ???).

May we conclude that the existing stashes of Physical in Possession will "percentage wise", not change dramatically in the next decades !? BUT...the globe's total population, debts and fiat stashes have been growing at astronomical proportions against the yellow, becoming scarcer and scarcer. There is NOT enough Gold to keep on distributing the Physical, amongst the growing billions of economic actives and/or the existing different Giants. Price changes will cause re-distribution patterns (concentration).

Is it co-incidence that since 1971 up until now, POG and DOW, multiplied by ten (10) (give and take a little) ???
1971 : POG=41$ and zigzagged to a balanced pricing around the 400$ (1995) when the biggest manipulation started and replaced normal *management*. The DOW going from the 1960-1980 horizontal-average of 1.000 to 10.000 plus !
And here we are at this very crossing point (2000-2002), where, inevitable, *DRAMATIC AND FUNDAMENTAL CHANGE* is in the air !

Gold, the REAL store of wealth and the REAL future, purchasing power, shall be valued, proportionate to the accumulated DEBT (TOTAL DEBT) ...US$ debt. Whatever the real debt figure might be...6 Trillion or 38 trillion dollars or any other un-official figure or estimate (virtual digits). DEBT KEEPS GROWING AND NO FUTURE PROFITS CAN EVER REPAY (or even service) A FRACTION OF THIS GROWING DEBT !!! Yes, indeed Sir Douglas.

But it is that (approximate) factor-10 for DOW and POG that caught my attention when staring at those LT-charts. As if the Giants, organized their VOG in function and lockstep with other (more speculative) opportunities (stocks/bonds).
This regardless of the offer/demand fluctuations of the commodity gold, during these 30 years. Isn't this evidence that Gold as an Investment does exists (always has) !? And that the WA was (still is) the action taken by the Official Giants...when things (POG) went out of hand and too far from that x10 factor ?
Isn't this a kind of evidence that the Golden store of wealth and Real future purchasing power has always been there to compensate, gradually, in anticipation, for that final reckoning/collision, with THE Debtberg ?
The WA emergency action wanted to prevent Gold dissapearing fom the radars and make too many (little) Giants, possibly panic ? The *Washington*, thing in the agreement, meaning that a POG below 200$, could have broken Gold's spine ? Not even wanted by Gold's antithesis : the US$.

It was Gold (POG) that forced the dollar down ! And up until now, most (all) commentators just see Gold (POG) as an automatic dollar-exchange, *compensator* . I think they have it wrong, this time ? Am I really alone with this upside down vieuw ?

AristotleTwo questions from today's discussion#796247/1/02; 18:08:07

Hipplebleck (msg#: 79603)

Regarding the little dip in the price of Gold, you said you "suspect that some South African miners are selling forward to cash in on reserves that they fear they will lose."

How would that work in practice (what's the settlement and cashflow) and who's buying? For that matter, what exactly are they buying? (Maybe I'd be a buyer too if the discount were deep enough, but hell, I can still get Physical Gold at these prices.)

goldquest (msg#: 79610)

Regarding the Fed's intervention "on behalf of the Bank of Japan," you said, "thought the FR was formed to look out for the U S interests, but I guess they will work for the highest bidder. The Fed should be disbanded immediately!"

Please forgive me if I don't quite follow your meaning. Will you explain?

As I see it, if we are to buy into the so called "strong dollar policy" and the associated rhetoric, since when is it NOT in the U.S. interest to seize upon the Japanese's excuse for a little dirty float action to prop up the value of the dollar at the expense of the yen; done more than likely through reciprocal currency arrangements -- or let's call them CB "swap facilites" if you prefer?

Seen this way, is it any wonder the ECB was not to be left out, saying something like "Hey, we want in on some of that sweet action, too. Ahhh... er, we mean, there's a larger market trend of euro appreciation that has to be addressed within the context of your dollar/yen shenanigans. Yeah, that's the ticket!"

My point is this: go easy on the boys in the marble shack. They're buying you time to get your mind around worldly financial events and to buy Gold cheaply if you have the wherewithal.

Our government knows, as well as any other, that no nation ever rises to (or maintains) greatness on the backs of impoverished citizens.

Gold. Do your multipurpose duty and get you some. Good for you, good for your country. --- Aristotle

aussieWest Australian Newspaper Article#796257/1/02; 18:10:43

Just sat down to breakfast and opened the West Australian Newspaper July 2nd. In the Business and Market Section the report said, "Gold stocks fell with the gold price. Mr. Turkington (WA State Manager of Tolhurst Noall) said the decline in gold was an indication of strength in the US dollar and that US market was possibly on the mend".

Just thought this would be of interest to demonstrate how Mum and Dad investors in WA are presented with the market forces.

As an aside, I received Placer Dome Inc. offer dated 27th June to AurionGold shareholders yesterday. Still appears they are positive about the transaction which is scheduled to close on 12th July.

Mr GreshamBelgian#796267/1/02; 18:12:18

In FOA's absence, you sure pack a strong punch! Keep it up, and thanks.

(Isn't it the interesting mark of a mature commentator, when he's ahead of the curve, to keep on exploring and reaching for understanding, and cogent expression. And then, when things are confirming what he's said -- when events are making his early "thoughts" into bygone histories -- he holds silent. No need to rush in and claim the laurels of "victory".)

We'll be seeing, soon enough, the accuracy or otherwise of those "thoughts", on such original ideas as paper/physical separation, and on oil for Euro changeover. (Amazing, too, the reticence of other commentators to take on these topics for corroborative examination. You would think they'd be the first?)

How long? Not long now...

Canuck@ sector @ Belgian#796277/1/02; 18:18:23

Good post (79604)

"How much gold is "Left" to continue the manipulation? "

Care to hazard a guess? The RBC report again mentioned the 'double counting' by CB's. It seems to me that some CB's report their gold holdings more visibly than others. Also, going by BB's recent (a month or so ago) about offical held gold (via the WGC) is there any way to guessimate the proportion of gold 'in the vault' and gold 'on loan'. The 'offical' held gold of some 29,000 tonnes may be split into the 2 above fractions at an alarming figure.


"Whatever the real debt figure might be...6 Trillion or 38 trillion dollars or any other un-official figure or estimate (virtual digits). DEBT KEEPS GROWING AND NO FUTURE PROFITS CAN EVER REPAY (or even service) A FRACTION OF THIS GROWING DEBT !!!"

I remember as a kid (19 yrs) hearing about millionaires. A million bucks was a unheard of amount of money. When was the first billionaire declared? In the same year (1980) gold had its stellar run. So millionaires in the 60's, 70's and now billionaires, and lots of them in the '90's, yet let's say for simplicity that gold is 'flat'. How does that happen? Money has piled on with reckless abandon, in the case of millionaire to billionaire a thousand times, and gold is still X hundred dollars. It doesn't seem to make alot of sense. Pop, candy, groceries, gas, cars, houses, EVERYTHING has gone up 5-fold, 10-fold, MORE and gold is 'flat'.

I don't understand this?

Even taking out the 1980 spike and using the $42 number, a 10-fold increase is $420. Why is gold so cheap?

I'd like to see an inflation 'graph' of items over the last 30 years, something like this:


$30.............$300 week of groceries.....10
$0.15...........$1.50 gas..................10
$2000...........$20,000 car................10
$20,000.........$200,000 house.............10
$5000...........$50,000 salary.............10
$42.............$294 gold...................7

A nice BIG, ACCURATE list. Have you seen such a thing?

What's that 7 crap?


slingshotCoin Dealers Wanting.#796287/1/02; 18:23:44


Went to two coin dealers today and they both were out of 1oz Gold Eagles. One half oz and lower were limited supply at both stores. The first dealer was completely out of silver and the second had 1 ozs waffers but all those Silver Eagles I have talked about in the past were gone. 1986- 2002 sold at the book price and I know some dates went for $16.00 plus. Both dealers said no body is selling them anything, business is good and waiting on their orders to come in the mail.

R PowellBelgian#796297/1/02; 18:30:07

Interesting thought, "It was Gold (POG) that forced the dollar down!"

Most would say it was the dollar's decline that forced the POG up, no? And why did the dollar decline against other (also fiat) currencies? Many would point to lower real interest rate returns in dollar denominated investments after the Fed. lowered rates. The dollar's decline is also connected somehow to a declining inflow of dollars entering the US economy and stock markets but whether the dollar's decline is now a cause or effect of the declining markets is not clear, at least in my cloudy brain. Likewise, does the up in POG cause the down in the dollar or is it the down in the dollar that causes the up in POG? Do we have a chicken and egg question?

I don't have any answer but will add another question. (evil smile!) The price of mining company stocks (XAU or HUI) started rising before either the POG started up or the dollar started down. They started after the Nasdog cracked in early 2000. What was known to start these before any POG up or dollar down? I don't see the XAU upside as causing anything but as foretelling something. But how did they know? Did the lowering of interest rates (induced by the bubble burst)indicate the coming of a weakening dollar and POG upsurge both of which were then predicted by the mining stocks?

Can we then say that a bursting market bubble caused by "irrational exuberance" or mania will beget a rally in precious metals? Or was it the Fed's response to the bursting bubble that will determine if a rally is forthcoming? But the response (monetary inflation) indicated price of goods inflation to some while others saw deflation (money gone to the big vault in the sky). Now I'm getting thoroughly confused. Cause and/or effect?

Belgian, I'm not disagreeing with your statement. It makes perfect sense that when $1000 are needed to purchase one ounce gold, then the old buck just ain't gona be what she used to be! By then the dollar probably won't be a "green"back anymore either. I think I'll save a few green ones to show to the next generation.

CanuckCheck the 18:53 over at next castle#796307/1/02; 19:00:02

G.E. overstated profits by 2.1 billion.

Let's find out about this one!!

ShapurGold#796317/1/02; 19:02:44

"Gold-- its just a reverse split on the US Buck"
USAGOLDCongrats. . . #796327/1/02; 19:10:43

Congrats to my old friend, Lenny Kaplan, on a good call.

Gold up $4 from a trader induced correction. Off by four hours, Lenny. You're slipping. MK

AristotleSir Belgian, I'll join you#796337/1/02; 19:11:58

Belgian (msg#: 79623)

You concluded your commentary with the following comment and question:

"up until now, most (all) commentators just see Gold (POG) as an automatic dollar-exchange, *compensator* . I think they have it wrong, this time ? Am I really alone with this upside down vieuw ?"

Not alone, my dear friend, not alone! I, too, see Gold as something much more than merely an "anti-dollar" (i.e., with each being like a small child on either end of a teeter-totter.) Gold will surely rise against all *all* ALL currencies, making it <*gasp!*> not money, but rather, <big smile for Belgian> an Investment of a lifetime. Make that, THE Investment of a lifetime.

So, now that I've done my part to answer your question -- "No, you're not alone, and not without a friend," let me move onward to the substantive part of your post.

I applaud your "two fly" observation, and want to draw it out for further notice and appreciation.

The euro has no less ambition than to dethrone the US$. Therefore the euro-builders prefer to "guide" the dollar-leavers into the euro-currency as dollar alternative. So it is very convenient, at present, to block (?) to a certain extend the VOG alternative, up until a more appropiate moment (dollar-loss-compensation)!?

Two flies in one slam. POG rise (290$ > 326$) urged/signaled dollar-weakness and the desire to enhance its downtrend against the euro. Once the dollar-holders understood the message (Soros), the Gold-alternative (dollar-escape) should, temporary, remain less attractive. At the same time (fly 2), the 330$/354$ forward sales, danger zone has been respected (postponed-slowed down).

As explained before, I still do believe that POG is used by many different "interests" for different purposes, but serving, temporary, mutual interests...FOR THE TIME BEING !!!

And naturally, here's where we are wise to heed Sir Townie's advice today:

"Prepare your portfolio for what will likely be the greatest monetary transition the world has ever seen."

Belgian, you go onward to make the very important point that, in relative terms, the supply of physical Gold we are capable of concentrating above ground has largely been acheived, whereas the modern financial and economic activities in a (best case scenario) peaceful and prosperous world have only just scratched the surface of printing money on terms of credit, collateral, and debt. While you've focused on the outstanding dollar float, this isn't limited to a dollar-only phenomenon. Although I'll grant you, the dollar surely dominates. To be sure, there's a world of nondollar-denominated debt also that may be added to the buying pressure on Gold's grand "coming of age" in an enlightened world. The Investment of a lifetime.

Gold. Get you some. --- Aristotle

USAGOLDAristotle. . .#796347/1/02; 19:16:04

As I remember it:

" Gold - - the investment "for" a lifetime!"

That preposition being an important one.

By the way, if I haven't said it as yet, thanks for returning. One of my favorite all time posters, and one I quote frequently to new clientele.


Golden BearBelgian (msg#: 79623)#796357/1/02; 19:19:37

"...As explained before, I still do believe that POG is used by many different "interests" for different purposes,..."

Well said Sir Belgium,

and it should be remembered that this applies without exception to all tradable goods and commodities. This is the cause for the shifting of value vs price of goods and creates confusion amongst market participants. This is the reason we have witnessed the simultaneous fall of US dollar and POG - which seems absurd and inexplicable to so many, but is normal market action, no matter how much we "gold advocates" want to blame the cabal for the recent so called suppression of the POG.

As Sir Ari might say, Gold - just got more inconveniently heavy for the price, temporarily...

CanuckMonster 5-yr. 'Head & Shoulders' for the S&P#796367/1/02; 19:21:24

Break 944 and it may be freefall time.
AristotleUSAGOLD#796377/1/02; 19:31:50

The pleasure, my good Sir, is entirely mine.

English/Comp was always my weak area. Prabably explains a lot... in all my life I've succeeded in getting across only two points, and those were both in shuffleboard!


CanuckNasdaq closes below 9-11#796387/1/02; 19:35:19

"The broader market also dropped sharply. The Nasdaq fell 59.38, or 4.1 percent, to 1,403.83 – below its post Sept. 11 low of 1,423.19 on Sept. 21. It was the lowest close for the index since June 10, 1997, when it finished at 1,401.69."
YGMS African News,...... re: Mining Regs.#796397/1/02; 19:44:22

Mining giants dig heels in over South African seizures

By Leo Lewis
30 June 2002

The South African government is heading for a major fight with the country's biggest mining companies such as Anglo American and De Beers after proceeding with a controversial new law.

The showdown centres on a minerals Bill that would transfer historic ownership of mining rights to the state. It means the government could seize land if companies cannot prove they plan to use their deposit.

Mining companies have protested vigorously. Although all minerals are covered, the biggest effects will be felt by miners of platinum, diamonds and gold. Companies fear years of hard work could be undone and the country will become unappealing to foreign investors.

Anglo American Platinum and De Beers and other firms are understood to be attempting to prevent the Bill passing in its current form, though time is running out. They have criticised its lack of detail, saying it leaves too many questions unanswered for them to accept something so radical.

Despite court actions and intense lobbying by the miners, the law – brainchild of the country's minerals minister, Phumzile Mlambo-Ngcuka – has sailed over the first two major hurdles, and now only needs the endorsement of the Constitutional Court. Its aim to increase black empowerment has given the Bill considerable public approval.

Interstate@ Slingshot - coin dealers#796407/1/02; 20:01:38

A real twist came my way today. My broker called me and asked if I wanted to sell any of my PMs. I said, "Are you kidding?" He was not kidding, but was in desperate need of gold. It is his opinion that there will not be confiscation, because "the regular people" are much more defiant than they were in 1933. Already, some municipalities have voted to not accept and be under The Patriot Act.


Black BladeMarket Wrap Up - Puplava#796417/1/02; 20:05:16

What Happens When More Want What There's Less Of?


Gold funds were by far the stellar performer this quarter and since the beginning of the year, followed by short-selling funds. Where people have made money in this type of market is gold, shorts and foreign currencies, such as the Euro. Gold funds are finally starting to catch on with Main Street investors as more than a passing fancy. However, gold investing is still relatively obscure as a means of investment. Total funds invested into gold are only about $4 billion compared to the $3 trillion invested in all equity funds. The market's availability for investing in gold and silver stocks is so small it recently forced Vanguard to close its Precious Metals Fund, which took in $124 million of new cash this year, and now has $628 million under management. The consolidation in the gold mining industry has limited the number of stocks to invest in according to company officials. The fund only holds just 28 stocks, and 10 of its holdings account for 74% of the fund's assets.

You can imagine just how explosive these markets will become if only a fraction of that $3 trillion decides to move in the nation's 41, $4 billion in asset-sized gold mutual funds. This is a very select and thin market. That is why when gold and silver move, these companies will explode to the upside. It isn't because of a mania as so many idiots on Wall Street caution. It is because of scarcity of supply. Common sense tells you that when demand is greater than supply, prices rise. When that supply is scarce, as is the case with physical metals or with the choice of mining stocks, the price goes up. In this case, if even 5-10% of that mutual fund money moves into gold and silver, the prices of bullion and the equities are headed north of the moon.

Black Blade: I posted on the Vanguard Gold Fund closure this weekend. There are only a handful of PM funds and the overflow of frightened investors will push these funds and PM stocks beyond reasonable valuations. That leaves under priced physical metals as the remaining value for potential PM investors. PM shares typically run ahead of the PM metals so I would expect to see at the very least some "catch up" and in the current market – an explosive march to higher levels.

R PowellCanuck#796427/1/02; 20:11:50

GE's cooked books

That "GE overstates profits by 2.1 billion" remark comes from a reliable poster who claims she heard it from Bill Murphy. This should not be difficult to verify although I tend to believe Goldilocks from the get-go!
How many times are we going to hear the disclaimer tomorrow, "the parent company of CNBC"....?
Kernian will be more tougue tied than usual. Maria will be downright POed.
Car manufactures next? Or should that be auto finance companies? Is it General Motors or GMAC? Maybe the BLS will have to restate some numbers? For them it's Revisions, not cooked books.
Anyone got any confirmation on this GE rumor??

WaveriderCurrency intervention costs 3.3 trillion yen#796437/1/02; 20:25:01

"Japanese monetary authorities have spent more than 3 trillion yen intervening in the currency market since late May, according to statistics compiled by the Finance Ministry. During the yen-weakening campaign, the exchange rate has gone from 125 yen.61-64 to the dollar on May 21, the day before the intervention began, to 119 yen.55-57 at 5 p.m. Monday.

Vice Finance Minister for International Affairs Haruhiko Kuroda said Monday the nation's exchange rate policy remains unchanged, hinting the ministry is prepared to continue intervening in the currency markets as the dollar continues to drop in value. A weak dollar and strong yen saps overseas earnings of Japanese companies, the main driver of the recent economic uptick."

Waverider: ~Jimbo - my apologies but I don't have the depth of understanding to explain the details of how the FR intervened in concert with the ECB. Maybe BB will comment. Cheers!

Speedy8 seconds#796447/1/02; 20:30:32

I just want to thank you guys for all the info you guys put on the screen!!!I spend 1 hour a day learning about the things you guys talk about, so keep the info coming!!!! GO GOLD!!!!!
Black BladeTough Year Sinks Pundits’ Forecasts#796457/1/02; 20:35:28{952EF5D4-6CF1-4FFD-A7AB-859A27470C40}


The S&P 500 index is now in its 27th month of bear market territory, the longest since the early 1970s and the deepest drop, 35%, in five decades. Most major indexes, other than the Dow Jones and S&P/TSX composite, which are stacked with Old Economy and so-called slow-growth firms, have pierced Sept. 21 lows.

Six months ago, strategists were confident the worst was over. "Down markets don't last very long. In the past 60 years, the S&P 500 has never fallen three years in a row," said Standard & Poor's The Outlook at the end of 2001. Well, with the S&P down 14% in 2002, it is looking like another down year. Of course the soothsayers weren't expecting Enron, WorldCom, or Adelphia, or the staining of Martha Stewart's apron to sour investors' taste for equities. A whopping US$4.1-billion was pulled from U.S. mutual funds this week, a level of redemptions not seen since the five-week period after Sept. 11, when US$20-billion was siphoned from the markets.

Also this:

Scott Walters, a partner at Toronto-based hedge fund Delta One Capital Partners, passed along a new definition of EBITDA - Earnings Before I Trick Da' Auditors.

A few of the others we received:

EBIT = Earnings Before Irregularities and Tampering

CEO = Chief Embezzlement Officer

CFO = Corporate Fraud Officer

NAV = Normal Andersen Valuation

EPS = Eventual Prison Sentence

Black Blade: The pundits were saying that it will get better (always next quarter of course). It will actually get worse – It's a "no brainer" because earnings are declining, corporations are buried under crushing debt, corporate scandals galore, Accounting scandals galore, reduced capital expenditures, lost consumer and investor confidence, etc. We live in "interesting times".

Black BladeRe: Jimbo - Foriegn CB Interactions#796467/1/02; 20:41:55

Typically foriegn central banks will act on behalf of other banks. This is actually common. The Federal Reserve also keeps funds on account for several banks, including the Bank of Japan. These funds may be in the form of bonds, treasuries, cash, and even (gulp) gold. This is really nothing special though. When the BOJ asks that certain holdings be sold or bought they can do so through foriegn accounts held by other nations central banks (in this latest instance the ECB and Fed).

This is a simplistic answer of course, but I don't know all the gory details either. Cheers!

- Black Blade

CanuckFor the debt followers, great essay#796477/1/02; 20:45:13

Black BladeThe prosperous '90s -- a hoax? #796487/1/02; 20:51:35


NEW YORK (CNN/Money) - U.S. investors, learning every day that some of the same companies that swept them off their feet in the 1990s were cheating on them all along, are so jaded they're even starting to wonder if the '90s economic boom, a rock-steady source of comfort, was a big lie, too.

Black Blade: A lot of people are licking their wounds these days. Too many investors are "gun shy" now that they have seen their hopes and dreams disappear. As always, get outta debt (and stay outta debt), stash enough cash for several months expenses, get Gold and Silver portfolio insurance, and start a nonperishable food and basic necessities storage program. Prepare for the worst and hope for the best.

barnaclebob@R Powell, Canuck#796497/1/02; 20:55:44

I speculate that the GE $2.1 billion referenced is related to the current essay appearing at, whereas GE has claimed $2 billion in nonexistent pension fund profits, to wit;

Nasdaq breaks down:

GE's name has been tossed about as a company where a closer look at the financials may be in order. It appears that GE recorded more than $2 billion from pension fund profits in ’99 and ’00 even though its pension investments were losing money. There's nothing non-GAAP about that, lots of assumptions are involved in pension accounting, a lot of them wrong, especially at the end of bull market. CNBC and Wall Street may have overlooked that risk in ’99 and ’00 however*****

This would be my guess! Caveat Emptor

mikalRe: Currency intervention via Fed to assist Japan#796507/1/02; 20:56:24

Whatever the means that was used, the affect was to assist the Japan CB politically through dollar support(purchase) and yen weakening(sale). The Fed was widely seen to be using only token intervention, as noted in news reports this past weekend. Also at least one or two other major CB's participated; the total amount was less than 10% of a typical Japanese 1-day sale.
Gimli_Above Ground Silver Really Almost Gone??#796517/1/02; 21:02:27

I understand most silver goes into film processing, and that reclamation of silver in spent film is significant. So I just find it hard to believe that the world is really so close to being out of silver--the US have 'permanently' consumed 96.5% of all its silver over the past decades.

Can anyone else offer tangible proof this is all true?

HoratioHedging#796527/1/02; 21:10:09

Why are some investors surprised when S.African mines hedge ?If I owned Anglo,Durban et al ,I would hedge as far forward as I possibly could.I would borrow from central banks sell the gold and get the cash out of S.Africa .My country of choice would be Canada for investment in gold stocks.Why are some of you so inclined to believe that Mandela government is a benevelent government.Not one self governing people in Africa has a record of protection of Capitalism or Protection of private property,not even those that are rich in resources such as Nigeria (oil),also the SCAM capital of the world. Then there is Rhodesia that used to export food,now inports it.
You are just fooling yourself if you believe S.Africa is a safe investment.I believe this hedging business started in S.Africa and will continue as long as private property is at risk.If those communists in S.Africa want to confiscate mines ,they will have to deal with the banks that hold the mortgages and forward sales contracts that say the gold in the ground has a lein on it. If I owned those mines I would sell 30 years production forward and get the cash out.
Putting blame on those miners is like blaming the victum of a crime for his part,for without a victum there is no crime.
I believe the future in mining lies in Canada as a home base.The best place to mine is S.America where the mines are rich and labor costs are low because of devaluations.My idle cash would be left in Euros.
I realize my comments may be unpopular with some but if free speech has any value you must support my right to use it in order to protect your own.IMHO

TheJuniorMinerGold and the Financial Times#796537/1/02; 21:15:33

Gold slips as safe-haven status loses appeal
By Adrienne Roberts in London and site;
Jul 01, 2002
Gold prices slipped to six-week lows in Europe on Monday as a stronger US dollar and firmer stock markets reduced the precious metal's appeal as a safe haven.

This taken from the Financial Times web page
In the last 6 weeks Dow -12%, NASD -14%, US$ index – 6%. Gold? Only down 4.5 %.
Is this stuff written out of ignorance or purpose. I'd like some opinions.

TheJuniorMinergimli/silver#796547/1/02; 21:26:47

Been researching Silver for 'bout 2 months. Best I can come up with is we (world) use about 100 million ounces a year over what is produced and scrapped. Silver demand in industrial use alone is = to mine production.

So all that said, why 5$ an ounce. Your guess is as good as mine. But my research leads me to belive there is MUCH less avaiable silver than gold. Silver cannot keep coming out of warehouses forever, can it?

For a great place to start research, try
and then let me know what you think. Could be a bigger story than gold.

HoratioVanguard Gold Fund#796557/1/02; 21:33:38

I am a long time holder of Vanguard gold fund ,but I say "shame on you Vanguard".It looks like you yielded to Gumment pressure to help keep the lid on Gold prices.
Even the appearance of yielding to pressure should be avoided.It doesen't matter if there are a limited number gold mines to invest in.(I don't believe that)You didn't use that excuse when you were selling the "Dot Coms" did you? You were happy to take investor money and invest in stocks with no earning's selling at 150/share. Why use selective reasoning for one industry.?You should have taken all investors money and invested in Gold mines as THEY WOULD HAVE YOU DO.
Bid up the price if necessary, its thier money isn't it?

HoratioSilver#796567/1/02; 21:50:26

Just to give an example of being consistant ,I own shares in Apex,cde and Hecla .They all are headquarted in stable political locations and all have put great efforts in S.American mines for development.The mines are rich'some have over 140 oz of Silver / ton mined AND 4-5 oz of gold /ton.
All have cheap labor costs because of devaluations.
In some cases the Government is helping to pay for some developement costs such as road building and electricity distribution costs just to bring jobs in.(Peru,Bolivia,Argentina )Thats a enviornment friendly to the mining industry!
I believe thats where the future of mining is,not S.Africa,but thats just my humble opinion.

HoratioNigeria SCAMS#796577/1/02; 22:09:56

The SCAM capital of the world.Beware of appeals sent out from Nigeria to please help some former government offical or some widow get money out of Nigeria.They want to use your bank account ,your name ,and sometimes your money to help them get money out of the country by promiseing you 10,20,even 30 per cent of what they claim they have in exchange for your help.
I use to get RANDOM faxes where I used to work from Nigeria.I have a friend that gets appeals from CHURCHES and from people he doesen't know claiming to be church people that need to get a widows money out of Nigeria if only you could help by supplying your bank account number and send some money
that could be used to secure bribery favors.
Be fore warned !!

YGMSilver Stockpiles...USA......Charts...#796587/1/02; 22:17:48

NIL, ZILCH, NADA....Hang on to your hat cause Gold ain't the only game in town...YGM
YGMIraq & Egypt sign Oil Deal......."InViolation of UN Sanctions"#796597/1/02; 22:25:29


LONDON [MENL] -- Egypt and Iraq have signed a multi-billion dollar oil deal that Western diplomats assert has violated United Nations sanctions on the regime of President Saddam Hussein.

The deal signed last year and which has been implemented over the last few months calls for Iraqi export of an estimated 300 million barrels of oil to Egypt during 2002. The oil has been delivered through both Jordan and Syria.

Industry sources and Western diplomats said Baghdad and Cairo have agreed to split the revenues from the sale of the Iraqi oil. One industry source said the agreement calls for Iraq to receive at least $11 per barrel with Egypt receiving another $7.

Under the terms of the accord, Jordan or Syria would receive another $4 per barrel for allowing deliveries through their territory.


NOTE: The above is not the full item.

Black BladeAsia Awash In Red#796607/1/02; 22:28:31

Looks like Asia is starting off on a negative note tonight.

- Black Blade

YGMUS Troops Supposedly in Iraq.....#796617/1/02; 22:30:36,4057,4610298%255E401,00.html


US troops in Iraq: report
From AFP

BEIRUT: Dozens of US troops and intelligence services had been sent into northern Iraq from Jordan under a plan to overthrow President Saddam Hussein, a Lebanese newspaper reported yesterday.

In a story datelined London, As-Safir daily quoted "well informed diplomatic sources" as saying Washington "has launched a security and military operation in Iraq".

Central Intelligence Agency chief George Tenet had "personally visited northern Iraq during his last tour of the region and had given orders to start the security plan after US President George W. Bush (recently) approved a decision to ask the CIA to overthrow Saddam", the source said.

The paper, which maintains close relations with the Syrian leadership, said forward bases for US troops had been set up in Jordan.

"Jordanian King Abdullah has given orders to clear two military airports in Jordan for the US forces. About 2000 US troops have been deployed in Jordan so far," the newspaper said.

"Dozens of those US soldiers, along with CIA agents, have been sent into Iraqi territory."

The sources said the US had started a "flurry of contacts with various forces among the Iraqi opposition, and there are great difficulties in forming a coalition similar to the Northern Alliance in Afghanistan".

"Intensive contacts are being held with both the Kurdish and Shi'ite opposition in order to establish springboards for potential operations," sources said.

They added that Washington had first approached Saudi Arabia, which "refused to let its territory be used for any military attack against Iraq".

Jordan vehemently denied the newspaper report. Cont'd...

YGMMore on US Troop Activity in N Iraq..#796627/1/02; 22:37:48

We wait and see if nothing else....
Golden BearBlack Blade (msg#: 79648)#796637/1/02; 22:40:16

Good article BB,

Kurt Richebacher has stated that corporate profits peaked in 1997. So from 1998-2002, corporations have been cooking the books to keep this bull market alive in the minds of investors (todays' further revelations from Worldcom), and provide time for them to sell their stakes to these same investors, thus cashing out billions of dollars...

For the stock market, the fat lady has been singing for over 2 years now...

KTCYGM--your message 79745, Will Xerox dwaft Worldcom? No#797737/3/02; 00:33:55

When Worldcom stock price peak at $53 on 12/31/99, to now, shareowners lost $100B, and Bond investers lost about $30B (I am not that sure about that number). Ernon costs share holders $60B, and some more for Bond holders.

I did not follow Xerox stock price long enough. But on 1/1/2000, Xerox stock was at $24, by 10/16/2000 Xerox stock already fell to $7.75, pretty close to the stock price now. I think Xerox has close to 600M--650M shares outstanding, so from 7.75 to 6, it may cost stock owners lost $1B more or less, nothing close to Worldcom or Enron.

Horatio Nothings changed#797747/3/02; 00:41:03

An Oklahoman writes to his Banker

?It is impossible for me to send you a check in response to your request.
My present financial condition is due to the effects of federal laws, state laws, county laws, corporation laws, by-laws, brother-in-laws, mother-in-laws, and outlaws that have been foisted upon an unsuspecting public. Through the various laws, I have been held down, held up, walked on, sat on, flattened and squeezed until I do not know where I am, what I am, or why I am.
?These laws compel me to pay a merchants tax, capital tax, stock tax, income tax, real estate tax ,property tax, auto tax, gas tax, water tax, light tax, cigar tax, street tax, school tax, syntax, and carpet tax.
?The government has so supervised my business that I do not know who owns it. I am suspected, expected, inspected, disrespected, examined, reexamined until all I know is that I am supplicated for money for every known need, desire or hope of the human race and, because I refuse to fall and go out and beg, borrow and steal money to give away, I am cussed and discussed, boycotted, talked to, talked about, lied to , lied about, held up, held down, and robbed until I am nearly ruined. So the only reason I am clinging to life is to see what the hell is coming next,? ____ Bennett?s News 1934

Black BladeNorth American Banks Under Growing Pressure From Gold Derivative Positions.#797757/3/02; 01:19:55


This interplay between gold and paper currencies may be of academic interest to commentators, but is life and death to banks who have been making money in derivatives all the time gold has been in a bear market. Now the game has changed and a fascinating article has been published on a website called which claims that JP Morgan Chase & Co had notional amounts of derivative contracts outstanding which amounted to US$23.5 trillion as at the end of December 2001. To put this in context, the GDP of the United States is roughly US$10 trillion. And according to the Office of the Comptroller of the Currency JP Morgan had over US$41 billion of gold derivatives in this figure which represents around 65 per cent of all the gold derivatives held by US banks.

Small wonder then that the Royal Bank of Canada got its knickers in a twist recently when John Embry, a senior director who runs its Royal Precious Metals Fund, issued a report suggesting that central banks have, indeed, conspired to keep the price of gold low. RBC's position is nowhere near as big as JP Morgan's as it had total outstanding derivatives of only US$1.2 trillion and is one third the size. Nevertheless an implosion would do serious damage on a scale that is reflected in its decision to retract this research report which suggested that the price of gold is set for further steep rises. This was a remarkably naïve reaction as all it did was put the spotlight on RBC's vulnerability to gold. By so doing RBC raised memories of a certain Dinsa Mehta who was with JP Morgan for a long time and ran its gold book. Panic is not a pretty sight.

Black Blade: "Interesting" article. The banks are desperate to defend the "line in the sand" at $325 to 330 an ounce. When the derivative books blow up so do the financial stability of the banks. In other words – "Game Over".

SteveHPower of the Purse Delegated to Fed#797767/3/02; 01:40:59

Remarks by

William J. McDonough
President and Chief Executive Officer
Federal Reserve Bank of New York


before the

National Bank of Poland

Warsaw, Poland

July 2, 2002

I am honored this afternoon to visit the National Bank of Poland and to address this distinguished group of central bankers and their guests. One timely issue confronting policymakers throughout the world is the proper scope for central bank independence. As is widely accepted, central banks that are both powerful and autonomous, yet at the same time responsive to the needs and wishes of their people, are fundamental not only to the economic development of all countries, but also to their political and economic stability.

Integral to economic development as well as to political and economic stability is a commitment to the liberty, dignity, and independence of people. These are ideals most countries share today. But liberty and independence, while precious, assume different form as they take root in countries throughout the world. How much liberty and independence do we give to people? How much is responsibility for governing people to be centralized? How much is sovereignty to be divided? In the United States, these are questions we continue to air and debate in public.

Today, I would like to share with you some of my views as to how these issues are reflected in the development of the Federal Reserve System and why I believe central bank independence is so vital to a country's economic development and its ability to control inflation. Independence has, perhaps, a special meaning in the context of the United States' experience with central banking. We as a nation were born primarily of individuals who set an independent course for themselves by leaving their own countries to seek a better life in the New World. Our country owes its growth, its prosperity, and its prominence to these individuals. How to preserve the individual liberty they sought and won has become an enduring theme in the history of the United States.

This history reflects the dynamic tension set forth in our Constitution of checks and balances to ensure that the powers of government do not alienate the rights of people. The responsibilities of government versus the rights of individuals, the centralization of power in the federal government versus its dispersal to the states, the mistrust of government versus faith in individuals are notions that are as alive in the Federal Reserve System today as they were when our republic was being shaped more than two centuries ago.

Compared with a number of other countries' experience with central banking, which goes back centuries, the Federal Reserve, at almost 90-years old, is a relative youth. Not widely known is that there were two earlier central banks in the United States prior to the creation of the Federal Reserve System in 1913. The first was chartered in 1791, the second in 1816. Each bank remained in operation for twenty years. It was not until repeated financial crises, however, with their associated business bankruptcies and general economic contractions, notably the panic of 1907, that the need for a central banking system found support in Congress.

The Federal Reserve Act was passed by Congress in 1913 with the goals of providing for a safer and more flexible banking and monetary system. One of its original purposes was to provide the country with an elastic currency--that is, one that would expand as appropriate to accommodate the need for additional transactions as production and spending grew. The Federal Reserve Act was also intended to establish facilities for discounting commercial credits and to improve the supervision of the banking system. More broadly, in establishing the Federal Reserve System, Congress sought to create an institution that would combine the benefits of public and private outlooks while insulating its functions from day-to-day political pressures.

The central banking system Congress put in place reflects the country's historic concerns, traceable to its early experiments with central banking, about a centralized government monopoly of the creation of money and the desire to disperse that control through a system incorporating regional diversity and private sector involvement. The Federal Reserve today is thus a regionally dispersed institution with both government and private interests represented in its ownership and control, a testament to the longstanding belief that formal involvement by the private sector is essential to the credibility and management of the nation's central bank.

Initially, the government was represented on the seven-member Board of Governors by the Secretary of the Treasury and the Comptroller of the Currency. In 1935, Congress removed these two officials from the Board in an effort to strengthen the Federal Reserve's independence from political pressures within the government. The seven governors who now comprise the Board are appointed by the President with the approval of the Senate. Each must come from a different geographic region, or district. Originally, Board members were appointed for ten-year terms so as to insulate them from short-term political pressures; the terms were increased to fourteen years in 1935.

To balance central oversight in Washington with regional and private sector input, Congress created twelve Federal Reserve district banks, each serving a geographic region. The creation of the district banks as separate corporate entities with local boards of directors and member banks as stockholders was a key aspect of the Federal Reserve Act.

The Reserve Bank directors, then as now, are one of the primary means by which the Federal Reserve Banks interact with the private sector on an ongoing basis. Six of the nine directors of each district bank are elected by the member banks; three are appointed by the Board of Governors. Of the nine directors, three represent banks and six represent the public, with particular consideration to the interests of agriculture, commerce, industry, services, labor, and consumers. The Reserve Bank presidents are appointed by the directors, subject to approval by the Board of Governors.

In the early decades of the Federal Reserve, responsibility for formulating and implementing monetary policy was not centralized in the Federal Open Market Committee, or FOMC, as it is today. Instead, the twelve district banks undertook open market operations and set the discount rate for banks in their areas, which required the Board's approval. In 1922, the district banks created their own committee to coordinate their open market activities. Since 1935, the FOMC has existed in its current form.

The debate surrounding the creation of the FOMC pitted some members of Congress who wanted only the Presidentially-appointed governors in Washington to set monetary policy against others who wanted the regional Reserve Banks to continue control of the Committee. The compromise reached allows all seven governors and the president of the Federal Reserve Bank of New York a permanent vote on the Committee but only four of the remaining eleven district bank presidents a vote at any time. This compromise reflects that delicate tension of checks and balances on centralized authority, which lies at the core of the Federal Reserve System today.

This brings me to consider the basic functions and goals of central banks in democratic countries. We all recognize that the ways central banks choose to carry out their functions and the importance they attach to specific instruments or tools to achieve their goals vary across countries. The degree of independence central banks have within their governments also varies across countries. These differences are to be expected. They reflect each country's individual history, traditions, financial market structures, and legal frameworks.

Nonetheless, I do believe that central banks in democracies the world over share certain basic functions and goals in common. What are these? First and foremost, a central bank's most time-honored duty is to formulate and implement monetary policy--with its twin goals of promoting domestic price stability while stimulating real growth. These goals remain at the core of central bank policy.

Integral to achieving price stability is the need for central banks to avoid the direct financing of government budget deficits. Central banks can't indulge in this practice and simultaneously hold inflation in check, over the long run. At the same time, central banks must strive to maintain positive real interest rates, which tend to increase private savings and discourage investments with low expected returns, thereby promoting growth in the economy.

Central banks implement monetary policy by affecting the growth of money and credit in the economy in response to deflationary or inflationary pressures as they arise. Central banks alter monetary policy through the use of a set of instruments, or tools. In the United States, these tools are grouped into three broad categories: 1) setting reserve requirements for banks, 2) setting the lending rate and making loans to commercial banks, and 3) buying and selling government securities or other government-guaranteed instruments. As lenders of last resort, central banks also stand ready to use the available policy instruments to forestall national liquidity crises and financial panics.

Another major responsibility of many central banks is to oversee, or have some participation in the oversight of, their banking and financial systems. A sound banking and financial structure is essential for an effective monetary policy. Confidence in the soundness of the banking and financial system is what mobilizes a society's savings, allows the savings to be channeled into productive investments, and encourages economic growth.

In the United States, the regulatory role of the Federal Reserve strengthens its ability to act as ultimate providers of liquidity to the financial system. Moreover, because monetary policy involves judgments about conditions in financial markets and financial institutions, including a detailed working knowledge of those markets and institutions, a major ingredient in the decision-making process comes from the direct, hands-on knowledge central banks gain through interaction with institutions under their supervision. I am firmly convinced that the Federal Reserve's hands-on involvement in bank supervision is integral to its ability to meet its monetary policy responsibilities and contain or forestall crises, if they emerge.

The third major function of central banks is to oversee the payments mechanism. A payments mechanism which is dependable and allows the efficient clearing and settlement of interbank transactions is crucial to a well-functioning financial system. Commercial banks participate directly in a country's payments system, extending short-term credit in their role as financial intermediaries in the payment, transfer, and settlement of financial instruments, including interbank deposits and government securities. Central banks participate directly in the payments system as well, in part because numerous types of payments, including large-value interbank transfers and check clearing settlements, are likely to occur across their books.

The central bank's participation in the payments system and its role as supervisor of the system enhance its ability to foresee and prevent or moderate financial disruptions. The payments system is a source of major credit risk because of the lags in time during which the processing of transactions takes place. During these intervals, one party extends credit to another pending the receipt of funds. These lags between the payments associated with both sides of a financial obligation, which can vary from hours to days, result in large, interwoven extensions of credit among financial institutions.

A payments gridlock or other financial disruption can arise from numerous sources, including the sudden failure of a major participant, credit concerns by some participants which make them reluctant to release payments, and various technical interruptions. Because a gridlock can spread rapidly throughout the financial system, central banks have a keen interest in avoiding a payments system disruption and ensuring that participants in the system manage their credit risks properly. In carrying out the functions of a central bank, we must ask ourselves why it is desirable that central banks in democracies have an important degree of political independence within government. I think we would all agree that central banks neither can nor should be fully independent of government, since it is governments--and not central banks--that hold final responsibility for the economic and financial policy of the country.

Nevertheless, some degree of central bank independence is critical. Why is this so?Basically, the greater the independence the central bank has, the less subject it is likely to be to short-term political pressures. Central banks under the direct day-to-day control of governments seem inevitably to be tempted to promote easy credit policies, particularly when elections are in view, or, even worse, to finance government budget deficits directly. While these policies may relieve certain short-term problems, such as high unemployment or difficulties in financing fiscal deficits, they ultimately result in higher inflation and the need for severe credit tightening in the future. Independence is also helpful to central banks in carrying out their supervisory responsibilities, by enabling them to resist pressures to relax or strengthen regulatory standards depending on political winds.

A number of studies in recent years have found some empirical basis for the desirability of central bank independence as well. Although these studies cannot prove causality, they do find that the greater the independence of the central bank, the lower the average level of inflation the country experiences and the less volatile the inflation rate.

Moreover, the fact that a country's central bank is independent is likely to enhance the credibility of that bank's commitment to price stability. This enhanced credibility, as one of my former colleagues on the Board of Governors has argued, may provide additional benefits. For example, this enhanced credibility may enable the central bank to reduce the cost of lowering inflation. Economists generally agree that if inflation is to be lower, monetary policy must reduce output for a while, relative to potential, by reducing aggregate demand. The output that is lost during the transition to lower inflation is a measure of the cost of reducing inflation. The faster expectations of inflation fall, the faster inflation itself will decline. The result will be lower costs to reducing inflation.

The credibility of a central bank's commitment to price stability is also important because a credible central bank may be more effective in conducting stabilization policy. A stimulative monetary policy in response to a slowdown in aggregate demand would be less likely to undermine a central bank's commitment to price stability when the central bank is independent. In addition, inflation expectations could be less likely to follow immediately were inflation to rise when a central bank is independent, easing the ability of the central bank to contain inflation.

In my view, controlling inflation is particularly important. When countries incur a significant level of public sector debt and run large budget deficits, fiscal policy is no longer available as a tool of macroeconomic policy. If fiscal policy is unavailable to address some of the social needs that confront so many economies throughout the world, it becomes especially important for inflation to remain under control, largely because of its regressive tax aspects.

In my view, price stability is therefore critical not only for the classic economic reasons but also because it takes on a greater social importance as well. The benefits to society of achieving price stability are all too often overlooked, which has allowed some unfortunate myths to flourish. One myth is that inflation is actually good for growth. This simply is not true. History teaches us that a necessary condition for winning the confidence of savers and investors is an environment in which prices remain reasonably stable, that is, prices
do not vary significantly over time. The ability to develop this environment requires the assurance that economic policymakers will be robust and consistent fighters against inflation.

Another myth says that inflation creates jobs, which is assumed to benefit the poor. This, too, is false. Inflation actually hurts the poor more than the wealthy. Those with less wealth have fewer financial alternatives and are likely to live on fixed incomes. This means that in an environment of rising prices, the purchasing power of their income is reduced and their standard of living may severely decline. Moreover, those who are lower on the economic ladder are often the last to be hired during economic good times and the first to lose their jobs during slowdowns that result from the need to reduce inflation.

Thus, it is in everybody's interest to keep prices stable and to maximize the job creation that accompanies growth. It not only is good economics, it also is good social policy. For better or worse, the task of keeping to this appropriate policy path often falls to the central bank. This is because the goals and long-term objectives of monetary policy can be more immune to political concerns, particularly near-term election considerations. That is why so many studies show that countries whose central banks have a high degree of independence from day-to-day political interference have had a far better record in terms of lower inflation and stronger growth.

But, we may reasonably ask, what exactly do we mean by central bank independence and how do we know it when we see it, recognizing, of course, that de jure measures of independence may not fully reflect de facto independence? Without being exhaustive, let me suggest a few answers and how they apply to the Federal Reserve System today.

One way to assess independence is to determine the extent to which the central bank enjoys freedom from the government in formulating and implementing its policies, particularly monetary policy. A key component of this measure of independence is the degree of freedom the central bank has to change official interest rates and select the mix of policy instruments and techniques it uses in undertaking open market operations. In these respects, I believe that Congress has provided the Federal Reserve with considerable scope for independently exercising its best judgment as to what monetary policy should be.

Another way to assess independence is to look at the procedures in place for central bank leaders to be nominated and dismissed. In the case of the Federal Reserve, staggered fourteen-year terms for governors clearly insulate the leadership from short-term political pressures and fears of falling out of grace politically. Moreover, once appointed, governors can be removed only for cause.

Still another way to measure independence has to do with the way the central bank finances itself. In the United States, the Federal Reserve System is self-financing, its earnings stemming principally from interest income on the portfolio of government securities it holds to conduct open market operations. Financing itself internally means that the Federal Reserve is not dependent on Congress for
annual appropriations and is therefore insulated from pressures that might otherwise flow from the "power of the purse."

Whatever their degree of independence, central banks typically are nonetheless created by and accountable to legislatures. In the United States, the Federal Reserve is accountable to Congress which has delegated to it specific powers Congress is granted by the Constitution. Congress thus retains the authority to oversee and instruct the Federal Reserve as it sees fit.

The Federal Reserve accounts to Congress in numerous formal and informal ways. There are continuous contacts between officials in the Federal Reserve and the government. Twice a year, the Federal Reserve reports to Congress on its monetary policy goals and its senior officials routinely appear before Congressional committees and sub-committees.

Over the years, Congress and the Administration have periodically sought to alter certain elements of the Federal Reserve. These efforts have contributed to many changes in the Federal Reserve's procedures and authority, in many cases allowing the Federal Reserve to evolve and keep pace with the needs of changing times. At no time, however, has the fundamental independence of the Federal Reserve been in jeopardy. The Federal Reserve's basic independence today is a widely shared value, which no one questions.

In reviewing the experience of central banking in the United States and the vital importance of an independent central bank, I cannot help but conclude that ultimately the only way central banks can achieve their goals and control inflation is if their integrity is without question and people have confidence in the policies they pursue. At the end of the day, it is public confidence that is a central bank's most precious commodity in a democracy.

Thank you.

Black BladeUSD Rallies - Gold Lower#797777/3/02; 01:50:55

It looks like the US dollar has strengthened against all other major currencies. The Japanese appear to have won the "Currency War" of the weaker currency. Now European countries want in on the fun and they too are falling sharply against the US dollar. US exporters are the big losers. However, the trade deficit will likely balloon unless the trend is reversed. This will play positively on the POG as well. Meanwhile the POG is slightly lower, petroleum is higher, and the US market indices are higher. All of which can change at the drop of a hat. We are just a "scandal" or "arrest" away from another market reversal.

- Black Blade

Black BladeAsian and European Markets Rally#797787/3/02; 01:56:22

Foreign markets are rallying on the stronger US dollar. The threat to exporters in foreign nations has subsided for now. It appears that equities trading on Wall Street could be "entertaining" today just before the 4 day weekend. To hold or not to hold. Hmmm...

- Black Blade

YGMKTC....#797797/3/02; 02:01:30

I'm Not So Sure re Xerox & WorldCom.....

But I'm far from an expert and the facts and figures are not nearly all tallied yet....Part of my supposition comes from earlier comments by Marketalk here...MarkeTalk (7/2/02; 14:32:40MT - msg#: 79725)
and part from the comments by a 30 yr employee at a Xerox Stock Forum..(her 1000 shs average $54.00) (My Post # 79760) and many other comments of late on the final tally of Debt carried by Xerox as yet unknown.
Now you used the figures of $53 high for WorldCom in /99 and $24 High for Xerox in /00...but Xerox had a high of about $60++ in /99. I have no info re Xerox Bonds or Debt load but even if it is not a bigger scandal/financial loss than Wcom it will rock the already crumbling foundation of Wall St and put even more fear into Worldwide investors of US Dow and Nasdaq stocks...Each blue chip dominoe to fall will bring the US Stock Markets closer to the abyss and each one may be the one to send it over the edge NO?...Like I say you and most other market players probably have a better handle on all this than I, but I see trouble brewing and it won't end with the few dominoes we've seen fall...There's undoubtably much more to come......Thanks for your interest and discussion, I am learning as I go...YGM

KTCYGM -- Xerox#797807/3/02; 02:41:22

I remember (may not be exact) Xerox now still has about 23B in debt, current market cap of Xerox is about 3B--4B. If you use the high of $60, it losed $30B during the bull market so the impact for overall market is smaller. Worldcom is still bigger, Xerox just is an older and more familiar name.

But I agree with you, any accounting probelm and big company goes belly up is not good to the Market phyche right now. But this is a good thing needed to wash out the excess of bull market. Besides, when market went down, then gold usually went up.

I own a thouand Xerox shares purchasing at 8, if it goes to zero, the lost is about 1/10th of the amount of money I lost in gold miming shares between 1993--2000. Many of my mining shares went to zero. But I kept maintaining a certain amount in mining shares (dumped all the hedgers and switched to non-hedgers in 2000) and finally make some back this year (but still not broke even yet). Reading at this forum help me stick in there.

YGMKTC...#797817/3/02; 02:58:25

Well Hang in... The Gold & Silver Play is our Last Hope.....IMHO

I got out of all stock plays in 95/96 during Bre-X fall...Lost about half but made good overall. Gotta get some Zzzzz's here, been writing up a Resume` tonite pertaining to Mining sector....Can't seem to get to an ending...Nowadays they're probably more inclined to hire me if I BS than if I tell the truth...Nah, he couldn't have done all that stuff...Oh well, we try....G'Nite....YGM.
Black BladeU.S. Stocks Fall, Driving S&P 500 to Lowest Since January 1998#797827/3/02; 03:15:05,&s2=ad_right1_topfin&tp=ad_topright_topfin&refer=topfin&


New York, July 2 (Bloomberg) -- U.S. stocks slumped, dragging the Standard & Poor's 500 Index to the lowest level in 4 1/2 years, led by semiconductor and pharmaceutical companies.

Black Blade: And the S&P 500 is still grossly overvalued. Also, just out is that Advanced Micro Devices (AMD) is crashing in Europe. Looks like something is happening with the stock. Looks like a very negative open on Wall Street if the sudden reversal in Market Index Futures are any indication. And Gold turned slightly positive.

Black BladeBrazil's real chalks up new record low#797837/3/02; 03:21:49

Traders fear victory of left-wing candidate


Brazil's currency has hit new record lows as the financial markets panic over the possible victory of a left-wing candidate in October's presidential elections. The real, introduced in 1994, fell to 2.94 against the US dollar from Monday's record low close of 2.89, leaving the currency 21% below where it began 2002.

Black Blade: The smart ones have Gold and Silver portfolio insurance. The stupid ones will end up eating at the landfill and take care of the stray cat and dog problem.

Black BladeAbsolute Wealth Corrupts Absolutely#797847/3/02; 03:32:03,8599,269373,00.html

The boom of the 1920s spawned corporate misdoings that were ultimately unveiled when the economy fell to pieces. Sound familiar?


The country is now waking to the unpleasant reality that boom-era excesses and corporate malfeasance go hand in hand. When the wealth of the million richest U.S. families, the top one percent, expands too much over a decade or two of booming stock prices, the eventual result seems to be a taste for speculation and highly developed sense of "gimme" that winds up jeopardizing both the American economy and the vitality of the American democracy. Especially in corporations, this ethical erosion over the last 4-5 years is now coming home to roost.

Economic history has seen other such surges, and the classic U.S. example involves the perverse proportionality of how the binge of the 1920s was followed by a three-year wringing-out after the 1929 Crash. Thus it's highly relevant — and a little scary — that experts are beginning to compare current circumstances with the precedents of that era.

Black Blade: There are more comparisons to the 1929 market crash and the Great Depression than one can shake a ticker tape at. The recent accounting scandals and corporate malfeasance is just the tip of the iceberg. Where there's one cockroach there are probably more, and where there a several cockroaches then it's a sure bet that there's an infestation.

Black BladeHow many Enrons are there? More than people may think.#797857/3/02; 03:39:16

One-quarter of public firms have to amend reports after SEC review – a sign of widespread manipulation.


NEW YORK – It's one of the central questions behind the growing scandal in corporate America: Just how pervasive is the number fudging? Some believe the mistakes in financial reporting and accounting are limited to a handful of companies – an Enron here and a WorldCom there. Others see the balance-sheet manipulation as extensive. Now a new study finds that financial shenanigans may, in fact, be more widespread than many Americans are aware of.

Black Blade: Like I said about cockroaches, where there are several, it's a sure bet that there's an infestation. We should be hearing of earnings warnings over the next week before the bad news is officially released. Don't worry as companies are sure to meet or beat "substantially lowered" analysts consensus earnings estimates. Hmmm…

Black BladeCorporate lies have broader implications#797867/3/02; 04:10:25


It's an issue that affects more than just investors in one specific company, however. WorldCom shareholders may be the latest winners (or losers) of the 'Who's A Bigger Fraud' contest that seems to be under way in the United States at the moment, but the impact of such scandals is much broader than just one company or its shareholders. In a very real way, it affects not just the stock market, but the health of the economy itself.

WorldCom is a particularly good (or bad) example, because the fraud that it has been accused of perpetrating involved overstating its capital expenditures by a staggering $4-billion (U.S.) in a little over a year. The company apparently took money spent on routine maintenance of its network — such as upgrading of switches or paying other companies a fee for the use of their networks — and treated it as a long-term investment.

Black Blade: Turn on the lights and watch the cockroaches scatter. I have posted here in the past about phoney baloney accounting including booking such items as mentioned in the article. It is much worse than that. It involves the corrupt practice of pro forma earnings, operating earnings, synthetic leases, etc. Investors are slowing waking up to the chicanery on Wall Street and now realizes that they have been played for fools at the boiler rooms at Merrill Lynch, Goldman Sachs, Solomon Smith Barney, etc. We are coming to the end game. Load up on Gold and Silver portfolio insurance while it's still cheap. It's going to get mighty ugly.

Black BladeBritish Government Loses 480 Million Euros on Ill-Timed Gold Sale#797877/3/02; 05:26:50


Jun. 30--The British government has admitted that it lost UKpound 300 million (E480 million) by the bad timing of its decision to sell off a chunk of Britain's gold reserves.
The Bank of England, under government instructions, sold 395 tonnes of gold as part of a restructuring of the United Kingdom's foreign currency reserves, announced in May 1999. The Bank used the money it raised to invest in a portfolio split between 40 percent in euros, 40 percent in dollars and 20 percent in yen. Gold has recently made a strong recovery on the world markets and the UK gold reserves were sold at the bottom of the market.

Black Blade: With the current Currency Wars underway we should see the toll rise as the double whammy of depreciating currencies and rising Gold hits home. A real "smooth move" by Captain Tony and First Mate Eddie George (aka "Little Buddy"). I have always found it "interesting" that politicians once elected become "experts" in everything overnight by virtue of winning the bi popularity contest. Well these "experts" just cost the British people a nice chunk of change.

Black BladeSwaps And Options: The Next Investor Time Bombs? #797887/3/02; 05:44:25


NEW YORK - Given the headlines of the past few months, most investors now regard corporate accounting as an exercise in creative writing, and ethics as joke. Unfortunately, the bad news might not be over. While swapping lowers borrowing costs today, Hesler fears that if the Fed begins to raise short-term rates, it will dramatically increase financing costs for these companies, perhaps causing some to default, which could send waves through credit markets and the economy. To be certain, says Hesler, it would significantly reduce earnings. "This means that short-term interest rates are much more important to the U.S. corporate bottom line than they were ten years ago," says Hesler. Hesler warns that these swaps are generally not disclosed to investors but could affect a large number of companies, especially banks.

Charles Allmon, editor of Growth Stock Outlook, has been pounding the table about the way companies account for stock option grants to employees. Allmon estimates that if companies treated options as expenses, than earnings on the S&P 500 would be 30% less than they are today. "It's crooked, and nobody wants to do anything about it," says Allmon. "Nobody's showing any leadership. It's taking this whole trust thing down the tubes." "Anytime you have options tied to stock prices, you're in trouble. You should link them to something like real profits," says Allmon, who adds that "if something isn't done to clean up this mess, George Bush is going to be a one-termer." Hesler does Allmon one better: "If the economy remains in recession when the next presidential election comes around, we may find that Hillary Clinton is on the slate with a better than even chance of becoming the first female U.S. president."

Black Blade: This is scary because I have said similar things (except about Hillary). Of course it was a Clinton that ran against a Bush with the slogan "It's the economy stupid". Actually I have said that George W. Bush would likely be the Herbert Hoover of our generation. It's going to get very ugly going forward.

BTW, market index futures are looking very ugly this morning.

LeSinHow Important are Comex, Tocom ? Russia Goes Around Them & Direct#797897/3/02; 05:46:27

Snip from near the end of the above article:

"The dynamically developing Southeast Asian market looks very promising to us," he said, adding that the company wanted to sell up to 25 percent of all metals it produced there.

"But in case of palladium, our main targets are U.S. car-making and electronic companies," Finsky said. "It is a large market, and we are interested in long-term ties with end-users on the American continent."

Finsky said that currently Norilsk saw no reason to sell palladium, used essentially in catalytic exhaust converters in the car industry, on the spot market it had abandoned in the second half of 2001 due to weak prices.

"We are not planning sales on the the spot (palladium) market ... which is practically nonexistent," Finsky said.
But Norilsk intended to continue spot sales of sister metal platinum, whose market is more liquid, he said.

Black BladeEurope Awash In Red#797907/3/02; 05:52:33

Europe looks ugly this morning on diminished confidence and earnings warnings. No economic recovery for Europe either.

- Black Blade

misetichUS $ - Bottom Line: Living on the Edge#797917/3/02; 06:00:27


In the aggregate, portfolio inflows slowed to $38 billion in April, down from the sharp spike in March ($66.5 billion). Our theme of bifurcated US portfolio inflows was all too present in the April figures. For the month, diminished flows from Euroland were offset by surging flows from Asia, mostly from Japan. Inflows from Asia Ex-Japan were quite small relative to the past few months. The United Kingdom was a substantial source of capital in April, although the monthly total was less than half the level of the prior month.

Disillusionment in Europe

There is little doubt that the appetite among Euroland investors for US securities has abated. Indeed, inflows to the US from Euroland in the first four months of 2002 totaled just $7.5 billion compared with $25 billion for the same period a year ago. In April, net inflows totaled just $1.6 billion, among the weakest months of the past year. By asset class, Euroland investors were net sellers of Treasuries and nominal buyers of corporate bonds, agencies, and equities. Net equity purchases of $1.8 billion were at among the weakest levels (excluding September 2001) in more than two years.

Reflecting the growing disillusionment of European investors toward US securities, Euroland investors accounted for less than 6% of US inflows in the first four months of this year after accounting for nearly one-quarter of US inflows just a few years ago. Given the rise of the euro in the second quarter, we strongly suspect that Euroland investors continued to pare their US holdings in May and June. In fact, while the Enron debacle helped diminish confidence in US securities earlier this year, we can only assume that subsequent meltdowns at Tyco, WorldCom, and Xerox may have further soured investors on US assets.

Asian Dependence

As we have highlighted in prior dispatches, no country in Asia wants its currency to rally too quickly or too strongly against the dollar, on account of their underlying dependence on the US market for export growth. Asia's dependence has prompted central banks in Japan, Australia, South Korea, and other countries to buy dollar-denominated assets in an effort to stanch the dollar's decline.

Japan was the largest provider of portfolio capital to the US in April. Typically, Japanese investment in US securities slows at the end of its fiscal year (March) as investors sell foreign securities to build up their balance sheets at home. However, the beginning of the new fiscal year generally coincides with a return to foreign markets. In April, Japanese residents poured $13 billion into US securities, reversing the sell-off seen during the prior three months. This was a larger-than-usual surge compared with prior years, but much more is needed to offset the pullback in other regions.

Bottom Line: Living on the Edge

The trajectory of US portfolio inflows over the past few years has been nothing short of astonishing. Recall that over the 1999-2000 period, the external financing needs of the US were supported by strong inflows of both FDI (thanks to surging M&A inflows) and portfolio flows. This double-barreled financing was more than enough to cover the US current-account deficit and helped to boost US capital investment, consumer spending, and the value of US financial assets. In 2001, the bust in global M&A activity forced portfolio flows to do the heavy lifting of financing the US current-account deficit. In general, inflows were relatively balanced and emanated fairly uniformly from all regions. Thus far in 2002, portfolio inflows have continued to dominate overall capital flows, although flows from Euroland have narrowed, leaving Asia as the lender of last resort to the US. Against this backdrop, as long as Asia is willing to send capital to America, the US should avoid a capital shortage and potential dollar crash.


Got gold?

misetichSouth America - Contagion - Argentina, Brazil, Peru, Uraguay, Chile, Ecuador, Venezuela#797927/3/02; 06:20:56


In the past three months, as Latin currencies have suffered from turbulence in Brazil and dollar weakness, Chile's peso has lost nearly 10% of its value. Despite an improvement in the last two days of June, the pace of the peso's decline since April has been startling, as has the deterioration in the prices of Chilean assets in other markets. Although we remain cautious on our outlook for the Chilean economy, we see few "home-grown" reasons to justify the peso's recent weakness.

Indeed, Chile's recent saga serves as a warning sign to the region's watchers. Even in countries without the political difficulties seen in Argentina or Venezuela, the election uncertainty of Brazil, or the unrest seen in Peru, Chile's return to growth in 2002 remains complicated by the feedback from financial market turbulence in the region. And given the indiscriminate nature of the contagion, there is little guarantee that Chile's peso will not once again come under pressure in the weeks ahead. Although we reaffirm our end-year peso/US dollar forecast of 660, we would not be surprised to see the peso trade above 700 in the coming months and even retest levels near 720 seen late last year.

The Chilean Peso/Brazilian Real Link

Despite the absence of the fiscal difficulties seen in Brazil and Argentina, and the political difficulties that have engulfed much of the region, Chile has been unable to escape contagion from Brazil. The clearest sign has been the link between real weakness and weakness in the Chilean peso. Although the trade linkages between Chile and the rest of Latin America (which would likely suffer first from greater turmoil in Brazil) may explain some of the weakness, we question whether Chile would suffer from a longer downturn in Brazil. Instead, we expect that a rebound in the US and global markets could compensate for any downturn in Chilean exports to the region and help the currency break its current Brazil link.


The article writer is counting on a US economic recovery - they've been counting it on it for the past 18 months and still waiting -

Got gold?

miner49erCongratulations to all the contest winners!#797937/3/02; 06:51:01

Aureo - well done! Nice Orwellian read... btw, what was the exchange rate to convert Oldbux for Newbux...?

Esteemed Castle Review Panel - thank you for considering my offering. Being among the honored silver recipients is good company to be associated with, indeed...


Mr GreshamSteveH -- Thanks#797947/3/02; 07:16:53

Thanks for posting McDonough's speech (I can't wait for the Polish translation!), but you must have been holding your stomach throughout reading it. As nauseating as it is, it's interesting to see the system's view of itself. Sort of. Well -- not really.

"The responsibilities of government versus the rights of individuals, the centralization of power in the federal government versus its dispersal to the states, the mistrust of government versus faith in individuals are notions that are as alive in the Federal Reserve System today as they were when our republic was being shaped more than two centuries ago."

They are what they are, doing what they set themselves up to do, or whatever they've evolved into while continually tapping into people's labor, savings, and productive efforts

McFiat. Over 50 Trillion Served. Still Indigestible. Yecch.

sectorFed's McDonough on "Inflation Fighting"#797957/3/02; 07:46:27

Since June 1985 M3 has risen from $3.2 Trillion to $8Trillion [150%]

In my view, price stability is therefore critical not only for the classic economic reasons but also because it takes on a greater social importance as well. The benefits to society of achieving price stability are all too often overlooked, which has allowed some unfortunate myths to flourish. One myth is that inflation is actually good for growth. This simply is not true. History teaches us that a necessary condition for winning the confidence of savers and investors is an environment in which prices remain reasonably stable, that is, pricesdo not vary significantly over time. The ability to develop this environment requires the assurance that economic policymakers will be robust and consistent fighters against inflation.

Another myth says that inflation creates jobs, which is assumed to benefit the poor. This, too, is false. Inflation actually hurts the poor more than the wealthy. Those with less wealth have fewer financial alternatives and are likely to live on fixed incomes. This means that in an environment of rising prices, the purchasing power of their income is reduced and their standard of living may severely decline. Moreover, those who are lower on the economic ladder are often the last to be hired during economic good times and the first to lose their jobs during slowdowns that result from the need to reduce inflation.

Thus, it is in everybody's interest to keep prices stable and to maximize the job creation that accompanies growth. It not only is good economics, it also is good social policy. For better or worse, the task of keeping to this appropriate policy path often falls to the central bank. This is because the goals and long-term objectives of monetary policy can be more immune to political concerns, particularly near-term election considerations. That is why so many studies show that countries whose central banks have a high degree of independence from day-to-day political interference have had a far better record in terms of lower inflation and stronger growth.

The rank hypocricy of this "Officer" can be seen in the actual numbers of inflation since 1985. If one chooses to measure from 1970 the loss in the dollar's purchasing power is 10X.

Absolute power corrupts absolutely...Mr. McDonough is a classic example....First Acolyte to the Master of the Universe.

"...monetary policy can be more immune to political concerns, particularly election considerations."

What Mr. McDonough really means here is that HE is immune from and resides above the election process.

Jimbo@Psyops re. hapless "newbie"#797967/3/02; 07:54:51

I can assure you that I'm not a cabal shill posing as a hapless "newbie." Rather, I'm a middle-aged, self-employed gold stock investor who admittedly has been brainwashed for years, as you put it, "by the nice people on TV." I pose my continual questions not to sew seeds of doubt, but to better understand the forces in the domestic and world economy that determine the price of gold. Without a doubt, there are many investors like me who daily visit this forum to learn from you and others who have years of experience in gold. I urge you to be objective and realize that physical gold has not been perceived to be a viable investment by the general public for many, many years. Most investors have been brainwashed into believing gold is "too risky." Hell, you can't even buy physical and put it into your IRA. I urge you to be patient and forbearing with the "Jimbos" of the world who visit this forum to ask seemingly naive questions. In time, as they build confidence and knowledge, they, too, will buy physical. But they won't migrate from paper to physical if their questions are treated with intolerance. The cabal uses fear and mis-information to intimidate gold "newbies" such as myself and others. The well-informed posters on this forum need to continue to use sincerity and knowledge to undo the cabal's work. Many thanks to you, Psyops, and all the others who have helped me learn and progress.
Carl HPPT at work#797977/3/02; 08:13:24

Yahoo headlines:

Advance Micro Cuts Sales Forecast Again
American Airlines Sees Job Cuts Over Time
Jobless Claims Lowest Since March 2001
Vivendi Clobbered, Seeks to Avert Crisis
Compuware Warns of Weaker Profit, Sales
Knight Trading Sees Losses, Cuts Staff
WorldCom CEO Says in Talks for Financing Options
HP, Compaq Europe Job Cuts Total 5,900

and of course, the DJIA opens up. For those from the US, isn't it nice to see our tax dollars being used for such noble purposes as manipulating financial markets to make things look "good" right before we take a holiday to celebrate the freedoms and liberties that we supposedly have.

PizzMusings#797987/3/02; 08:36:56

What will it take to get out of this mess?

The dollar's last (hyperinflationary) run. Corporate balance sheets are bloated and beyond repair, and deflation is not an option.

Wonder why European markets are fairing worse lately than Japan or US? It's the Euro and the cap on budget deficits.

Expect terrorists attack(s) in US soon. When the derivitives (PM's and financial) markets explode the banks and when the US economy really heads towards the bottom, expect reserve requirements at the banks to be suspended and massive government bailouts for the banks and major corprations.

It's what I think the markets are discounting.



The HooplePizz#797997/3/02; 09:10:31

I figure the U.S. government is like Worldcom X 1,000. Worldcom has 30 billion of debt and maybe 3-5 billion of assets and is losing money hand over fist. Our government has 30(?) trillion of unfunded liabilities and a fraction of that as assets and is losing money hand over fist. The difference is the Fed can print confetti thereby transferring obligation to all of us. There will be 2 bailouts; 1 directly to industry sectors and the quiet kind where fiat gets debased 90%. Some "event" will have to explain this happening, it will never be a banksters fault.
PizzHoople#798007/3/02; 10:04:00

Didn't have time before I left the house to post any reasons for my nearterm hyperinflationary predicitions, but here's what's happening out here in "trenches" land.

Insurance companies are on the ropes big time. Their investment income is going negative, they've survived on bond capital gains over the past couple years, but that dried up lately. Their stock portfolios are negative, their annuity business has been based upon the same "pie in the sky" projections as GM's (and others)pension plans have been, and claims are starting to go thru the roof. I've submitted more claims for theft and fraud in the past 6 months than I have for the previous 5 years. We're in renewal right now, and I'm forcasting we'll get half the coverage for twice the price. Business is going to have to self insure more, or go broke faster paying huge premiums.

Yesterday a national check guarantee company increased their minimum billing amounts five to ten fold (depending on the account). They usually work on a very small percentage of total value of checks called in. What does that tell you about the recovery?

If anyone out there thinks this government is going to sit back and let the "debt berg" implode the banks, insurance companies, and half of corporate America (yes, half because that's about my estimate of just how bad the inflated balance sheets are) they are just not being realistic.

The sad thing is that to remain in power, and to save face, the PTB need a trigger device, and so far the terrorists haven't been cooperative. I don't expect that to last for long, one way or the other. Desperate people do desperate things, and governments are not exempt.

My contrarian vision of the markets do not see a summer rally, cause most are expecting one, since we are deeply oversold. But we can get more oversold. I'm more prone to think of a fall rally after more selling (possibly a spike down due to an extranious "event") and then up, and up big as we inflate our way to a false prosperity and attempt to war our way out of this mess.

Not investment advice, just one man's opinion, subject to change as events unfold.


barnaclebobWhy July 4 is significant to Islamists#798017/3/02; 10:14:23


Bin Laden is trying to raise the entire Muslim world to Jihad. Creating the mystique of the Chosen is central to his goal, and symbolism is the greatest weapon in his arsenal (thus far). Consider what he said (twice) in his post-Sept. 11 video: "… after 80 years, the sword has come to America …" He was clearly referring to the resolution passed by the U.S. Congress endorsing the partition of Palestine (creation of a Zionist homeland) on Sept. 11, 1922.

We, in our narcissism, assume that July 4 is all about us. But to Muslims it is a day of ultimate triumph.

On July 4, 1197, Saladin (Salah al-Din) completely annihilated the 20,000-man Crusader army at the battle of the Horns of Hattin, driving the "Christians" from the Holy Land until the 20th century. And we can be sure it is not lost on bin Laden that Saladin won this battle in spite of the fact that the Crusaders carried with them the "True Cross" (the True Cross was a relic designated by Constantine's mother during the initial phase of the paganization of Christianity).

The first question is, do they? Recently, al-Qaida spokesman Abu Ghaith promised to kill 4,000,000 of us, referring to America as "Hubal." Hubal was the last and the largest of the 364 pagan gods in the Kaaba to be toppled by Muhammad (al-ilah, the predecessor to Allah, was left standing). The image of Hubal was so large that Ali (Muhammad's son and the first Imam) had to stand on the Prophet's shoulders to push it over.

Got Gold?

YGMJimbo (7/3/02; 07:54:51MT - msg#: 79796)#798027/3/02; 10:22:05

Classy Post.....

Hope I didn't come off sounding like a know it all w/ my reply to you re: Info sites etc....If so my apolog's.... While you're learning more here you've done a little teaching in the 'Class' dept....IMHO....YGM
Gandalf the WhiteWOWSERS Sir Pizz !! Are things really THAT "good" out there ?#798037/3/02; 10:39:34

Pizz (7/3/02; 10:04:00MT - msg#: 79800)

AND I thought that everyone realized that the "DARK CONTEST" was over ! That post about the present reality in The Emerald City is FRIGHTENING to say the least. Are there ANY rays of hope that you can throw out to appease the Hobbits a little ? Are TRUCK SALES at least holding steady?

The HooplePizz#798047/3/02; 10:50:39

"1/2 the coverage at twice the price" - isn't that a 400% increase? My business is experiencing exactly this scenario.Dittos for health insurance. My agent after feebly blaming 9/11 admittted when I presed him it was poor investments just like you said. We have hyper-inflation of certain sectors yet rigged CPI's and PPI's mask the fraud. Imagine what scary things would happen to entitlements if they were being raised 10- 15% annually. No way they can reveal true inflation. It's as if gold is the only exit from the burning building and they are trying to seal it off to make sure no one gets out alive. At least we know where the door is.
kludge(No Subject)#798057/3/02; 10:54:49

Hard to believe spot will close down going into a 4 day weekend in the US, particularly with stocks down and concerns of terrorism over the 4th. Ah well, think I'll add a little to the collection today, better safe....

BTW, Jimbo's NOT a cabal member - he's never at the meetings.

YGMBlack Blades Previous Post,..... Deserves a repost....."A Strong Heads Up" Report.#798067/3/02; 10:55:44

***BTW...BB...Thanks for all your hard work here...YGM

Date : July 3, 2002

North American Banks Under Growing Pressure From Gold Derivative Positions.

When someone returns to the bosom of their family after a long spell in jail reactions range over the whole spectrum. Some relations reject that person on the grounds that shame has been brought on the family; some ignore him as they find the situation embarrassing; some are over- effusive; and some are constructive and welcoming. So it is with gold. It has been off the financial scene for fourteen years or so and, as Andy Smith of Mitsui Precious Metals pointed out recently, it is not easy to think of gold from a bullish perspective after being a bear for all that time.

Last Friday was a case in point. The price of gold fell sharply and there was a shrill ululation from bankers and analysts claiming that the whole performance by gold in recent months was nothing more than a spike. Few of them, presumably, read the sanity written by Rhona O'Connell in her daily gold commentary from the World Gold Council on the following Monday: "After a steady morning in London, and opening in New York in a reasonably buoyant condition, the mood changed in gold at the end of New York trading last Friday with a rapid fall in prices towards the close of trading. Dealers report that volume was light, but the move was extremely fast and involved some stop-loss selling as key technical levels were severed. Prices fell by $5/ounce and regained $3 in as many minutes, before further liquidation developed in the Far East. Physical demand is in evidence at prevailing levels and with the dollar again under pressure in London this morning, conditions have calmed."

No signs of panic here from Ms O'Connell, just a report on a volatile market. Nobody in their right mind expects the price of any commodity, be it gold or pork bellies, to go up in a straight line. Profit takers always make an appearance and a correction results. In the gold market there is the added influence of international official intervention against leading currencies. In her gold commentary Rhona O'Connell said that, " The Fed and the ECB are both reported to have intervened in the currency markets last Friday in order to bolster the dollar, which looked above ¥120, but is now again below that level and under some pressure." Those with longish memories will remember just how useless such intervention proved to be in the last currency crisis - if anything it provided fuel for the flames.

This interplay between gold and paper currencies may be of academic interest to commentators, but is life and death to banks who have been making money in derivatives all the time gold has been in a bear market. Now the game has changed and a fascinating article has been published on a website called which claims that JP Morgan Chase & Co had notional amounts of derivative contracts outstanding which amounted to US$23.5 trillion as at the end of December 2001. To put this in context, the GDP of the United States is roughly US$10 trillion. And according to the Office of the Comptroller of the Currency JP Morgan had over US$41 billion of gold derivatives in this figure which represents around 65 per cent of all the gold derivatives held by US banks.

It also represents 149 million ounces of gold based on the price of US$279/oz as it then was. This is more than ten times the amount of UK gold sold by our deluded Chancellor between July 1999 and March 2002. There is little doubt that his action helped to keep a lid on gold during the period, so what chance would JP Morgan have of retrieving its position without sending the price through the roof? The figures above are the gross outstandings and no one knows the exact the position. Common sense, however, dictates that they were running a short book and the squeals from JP Morgan analysts every time the gold price rises confirm this. If this is the case the derivatives book could implode if gold rises to a certain level and there are guesstimates circling the market that it is no more than US$340/oz.

Small wonder then that the Royal Bank of Canada got its knickers in a twist recently when John Embry, a senior director who runs its Royal Precious Metals Fund, issued a report suggesting that central banks have, indeed, conspired to keep the price of gold low. RBC's position is nowhere near as big as JP Morgan's as it had total outstanding derivatives of only US$1.2 trillion and is one third the size. Nevertheless an implosion would do serious damage on a scale that is reflected in its decision to retract this research report which suggested that the price of gold is set for further steep rises.

This was a remarkably naïve reaction as all it did was put the spotlight on RBC's vulnerability to gold. By so doing RBC raised memories of a certain Dinsa Mehta who was with JP Morgan for a long time and ran its gold book. Suddenly he was not there any more and the mystery of his departure led to rumours, doubtless wholly unjustified, that he had done a Keatley on the hedging position. Mark Keatley was the finance director who ran Ashanti's gold hedging programme which brought the company to its knees three years ago. In such circumstances these banks should take a lead from London stockbrokers Cazenove which simply closed ranks when under pressure during the Guinness fiasco. Panic is not a pretty sight.


PizzGandalf#798077/3/02; 11:22:43

Re: The Pacific NW. Yes, things are pretty bad out here. Boeing didn't move their corporate headquarters to Chicago for drill, and our Eastside surrounding Microsoft is being decimated. We're also pretty big on bio-tech, and that's starting to head south. Consider us the canary in the mine.

But my post was not meant to be regional. Look at the charts of all the European Stock Markets, and the dollar.
Every one has broken major neckline support and everyone seems to be heading for cash. THE STOCK MARKETS OF THE WORLD ARE LEADING INDICATORS, NO MATTER WHAT THE PTB TELL YOU. THEY ARE NOT DISCOUNTING ANY KIND OF GRADUAL RECOVERY. They're dicounting something bigger than any of us have seen.

If LTCM darn near took the world's financial markets down, what does anyone think is happening when our markets are down trillions, Europe down trillions, etc. Keep in mind, that these assets are part of our world-wide fractional banking system, insurance company reserve assets, pension fund assets, and on and on.

You cannot have ten's of trillions of dollars of asset value that are collateral for nearly everything just disappear without dire consequenses-because the liabilities are still there. Granted, we have derivitives that are supposed to insure against risk. But who is going to pay??

My guess is it will be the US government, cause it makes sense.

If my comments regarding a trigger device bother people, sorry. The mess is to big to clean up. It takes a team 2 years to clean up a small corporation, and that's with the resources and assets to do it. How do you clean up half of corporate America plus the government? You can't. Kind of like a forest fire out of control. You'll probably have to backfire half the assets to save the other half.

Something very big this way come, and again just MHO.


TownCrierNow THAT is funny!#798087/3/02; 11:41:26

I received this today from a friend, and now hasten to pass it along, without further comment, for a special group of my friends and kinsmen here.

And to that small list of names I have in mind I say: I am sure you will take this precisely as I did -- bent over with laughter.

"Would you like fries with that standard?"


adminThe Daily Specials Board: For Immediate Delivery. . . . #798097/3/02; 11:56:54

The catch?

You can only find out what they are (and the prices) by picking up the phone. You'll want to speak with any one of these friendly folks:

Marie Ballard (ext.106)
Jonathan Kosares (ext.110)
George Cooper (ext.102)

First Come, First Served. Limited daily quantities of each item for immediate delivery. Items will come off the SPECIAL board as they are sold out.

Call us toll free (800) 869-5115

PizzTown Crier#798107/3/02; 12:00:22

Randy, thanks, but I'm laughing and crying at the same time.

The most profound statement (to me) over the last year was one that Belgian made during a discussion of Central Bank Gold reserves and my comment that we would go to a gold standard (I wasn't as "enlightened" as I am now.) He stated something to the effect that the US would probably hang on to our collective arrogance to the bitter end.

Hard to argue both your cartoon and his comment, nor will I try.

Thanks for the chuckle.


YGMIf Only We Could Rent It From Vatican.....#798117/3/02; 12:12:27

Just to see the next couple months Financial Pages :>}
PizzYGM#798127/3/02; 12:27:07

That machine in my opinion has only been flashing two words.


And the Vatican probably has plenty.


Mr GreshamBugos from yesterday#798137/3/02; 12:53:56

Jimbo -- I second what YGM said. Your #79796 gives us that attitude correction reminder of the steps we took and other people must take: "sincerity and knowledge to undo the cabal's work".

Pizz -- you're belting 'em out today. "If LTCM...", "takes a team 2 years to clean up a small corporation", "Kind of like a forest fire out of control. You'll probably have to backfire half the assets to save the other half." (Forest fire analogy may be the image for this season, eh?) Insurance companies driving paying customers away 'cause their stock portfolios are down? Awww-w-w-w, weally? Poor baby!

barnaclebob -- Thanks for presenting the Islamic perspective for July 4 -- we need the regular eye-opener on that.

Bugos: (on the RBC flap): "The covert mandate of any central bank that intends on surviving the long term is to sustain the inflation and persuade the market that its currency is better than the one it (the market) might otherwise choose...the economic fact that the Fed's notes (US dollar) compete with gold for the prestigious role that money plays in any economy - to facilitate the free exchange of goods and services...

"To believe that central bankers are really willing to sell the rest of their gold reserves is what requires religion, for it is their only ammunition. Though they've been robbing us with a blank gun for years, it is paramount that people believe the gun is loaded.

"You see, it isn't the gold bulls that are religious, folks. It's the paper preachers that are. They are the ones constantly preaching falsities to solicit our full faith & credit.

" 'Buy and hold; Buy the dips; Stocks are not expensive over the long term; the dollar is money; money supply has to grow with the economy; inflation is measured by price indexes; aggregate computing power determines productivity; Greenspan is a capitalist.'

"These things are largely false but can work to an extent if we believe they will. They can all be made true by the economic participant's willingness to offer his or her faith. "

G: Faith is the ultimate valuer of an asset. What will people get up in the morning and go to work for? If one asset abuses their faith in it, they will move to another.

Carl HPPT at work!#798147/3/02; 13:05:08

After spending most of the day negative, now the DJIA is positive. Looks like we will have a >9000 close for the holiday weekend.
Black BladeBankruptcy Filings Continue to Surge Even as Economy Improves#7981507/03/02; 13:41:54


Washington, July 3 (Bloomberg) -- U.S. corporate bankruptcies are headed for a second straight record year after filings by Adelphia Communications Corp., Global Crossing Ltd. and Kmart Corp. Last year, 255 publicly traded companies, led by Enron Corp., put $260 billion of assets under court protection, almost triple the record that stood for a decade. So far this year, 113 companies with $149.3 billion in assets have filed. WorldCom Inc., with $103.8 billion, may seek Chapter 11 protection after acknowledging it hid expenses to boost profits. The recovering economy hasn't been enough to stem a bankruptcy trend fueled by corporate scandals and the collapse of last decade's speculative bubble. Reckless optimism created excess capacity in industries such as telecommunications, experts say.

``The worst isn't over by any means,'' said Ken Buckfire of the investment banking firm Miller, Buckfire Lewis & Co. ``I don't see any decrease in the volume of bankruptcies for the next year- and-a-half to two years.'' ``I've never seen the magnitude and the concentration of financial failures in such a short period of time,'' said corporate lawyer David Heiman of Jones, Day, Reavis & Pogue, who has handled some of the biggest Chapter 11 restructurings. ``There are some huge companies where the value has simply evaporated.''

Black Blade: And some "economic recovery" it is too. Meanwhile corporate earnings are falling, debt is rising, more people are added to the unemployment rolls, bankruptcies are on the rise, investor and consumer confidence is low, etc. So far we only have the warts that we can see. We await the quarterly earnings announcements. The shills continue to remark that bankruptcy (or unemployment, or whatever you want to insert) are lagging indicators. Well guess what? These indicators have been lagging going on three years now. The US economy can't stand much more "lagging". I think that during the Great Depression there was a lot of "lagging" as well. In fact the economy was just "lagging" for several years.

TownCrierCommentary plus an idle thought to kick around...#7981607/03/02; 13:49:26

Yesterday, Rhona O'Connell of the WGC ( offered the following comments on the gold market. It might be helpful perspective for any physical gold owner that finds themselves unduly rattled by the downward drift in gold price these past couple days:

"Funds were buyers throughout the New York session and the physical market in the Middle East has also been a buyer over the past 24 hours. This is constructive, given that price-sensitive physical markets normally stand aside in periods of volatility; this time the fall has generated bargain hunting.

"A similar situation applies in India...

"Indian traders are reporting that the recent fall in gold prices has rejuvenated the local market, with daily imports of ten tola bars, the favoured investment product, rising to 12,000-15,000 in the past few days. In early June imports had fallen to between 1,000 and 2,000 bars per day with demand being fed by locally recycled supply. The average in June and July 2001 was approximately 16,000 bars per day."

-------(end of WGC excerpt)--------

Additionally, the idle thought I wanted to toss out for general scorn and ridicule has to do with the generally accepted PPT ("Pluge Protection Team") of the federal government in conducting market interventions to help stabilize (or at least attenuate) adverse effects of market gyrations.

Just the other day I posted two Reuters articles regarding how the bond market has been a primary beneficiary these days from the weakness in the stock market. The reason I posted them at the time was merely to call attention to the oddity that bonds (long-term dollars) could be strengthening even as the spot-dollar (currency) was weakening -- both conditions being attributed to consequences of investor aversion to the risks in the U.S. stock market.

Intuition would have you think that as the bond market rallied, the spot-dollar would ultimately benefit, too; stocks (up or down) be damned.

Having said that, given the government's choice to "save" one market or the other, it seems to me that the bond market (being the bigger and more important of the two) would be the logical choice.

If you have in the past been willing to consider the PPT intevening to "buy" the stock market, is is really so big a leap for you to consider, possibly, that they might also (at critical times for the bond market and for the dollar itself) intervene to "sell" to help induce a broader stock market selloff? The small tail of the stock market thus being used negatively to wag the big dog of the bond market positively?

Whatever you choose to believe, there is no end to the possible paper games that can be played with you -- assuming that you are among the players at the table.

The comforting thing about physical gold is that you know the limitations (of its paper substitutes) can be streched only so far before the crisis/contraction returns value recognition (and prices) to be based upon the ownership of the physical supply only, not the imaginary contracted supply.


Black BladeRe: CarlH#7981707/03/02; 13:50:32

The markets would like to see the Dow hold above the psychological level of 9,000 and the S&P above 948. The investment house coalition and governing agencies(President's Working Group on Financial Markets)are moving a lot of cash around. The trading volumes have been much higher over the last few days - although over half that yesterday was selling WorldCon shares. Looks like these psychological levels will be defended going into the weekend. It is "entertaining" though. Cheers!

- Black Blade

Got to get goodies together for tomorrow (ice, Negra Modelo and mammal flesh).

Chap XCarl H / BB - Aint it the truth!!#7981807/03/02; 13:58:41

And the Dow comes back from a 100+ negative to a positive close!

Simply amazing!

Wish I had a enough cash to buy puts on hundreds of these "great values". In a short time from now, a fortune will be made as a result.

Hope you all have a good 4th!


Chap XCarl H / BB - Re last post#7981907/03/02; 14:02:10

Meant to say... SELL SHORT on 100's of these "values", although puts as well....


Black BladeReason For Positive Market#7982007/03/02; 14:40:24

The Trolls on CNBC say the reason that the markets rallied was because Home Depot shares jumped higher. I know the real reason though - There were no corporate or accounting scandals exposed today! ;-)

- Black Blade

misetichQwest's Junk Bond Credit Rating May Be Cut by Moody's#7982107/03/02; 14:40:28


New York, July 3 (Bloomberg) -- Qwest Communications International Inc.'s junk credit rating may be lowered by Moody's Investors Service on concern that it won't be able to sell assets or obtain financing to pay $5.6 billion in debt in the next year.

The biggest local phone company in 14 western U.S. states has had eight consecutive quarterly losses and is under federal investigation for its accounting. Qwest, whose sales dropped 14 percent in the first quarter, is rated Ba2 by Moody's.


The U.S. Securities and Exchange Commission is probing the bookkeeping of Qwest, which has said it may restate three years of results. The SEC is examining Qwest's accounting for transactions in which the company sold capacity on its fiber-optic network to rivals such as Global Crossing Ltd. and bought back a similar amount. Some investors have questioned whether the company engaged in the so-called swaps only to inflate sales. Qwest says its books were proper.

The company said in an April SEC filing that the investigation ``may have a material effect on Qwest's reported net income or earnings per share,'' from 1999 through 2001. Qwest also revised last year's revenue down, resulting in a wider loss.


``may have a material effect on Qwest's reported net income or earnings per share,'' from 1999 through 2001.-

Wouldn't want to be Qwest banker or bondholder

Got gold?

misetichSearching for hints of "US economic recovery" - Bankruptcies Continue Surge#7982207/03/02; 14:48:18


Washington, July 3 (Bloomberg) -- U.S. corporate bankruptcies are headed for a second straight record year after filings by Adelphia Communications Corp., Global Crossing Ltd. and Kmart Corp.

Last year, 255 publicly traded companies, led by Enron Corp., put $260 billion of assets under court protection, almost triple the record that stood for a decade. So far this year, 113 companies with $149 billion in assets have filed, according to WorldCom Inc., which listed $103.8 billion in assets in a May Securities and Exchange Commission filing, may seek Chapter 11 protection after hiding costs to boost profits.

Based on the $40 billion of junk bonds that have defaulted this year, Altman predicts about a 12 percent default rate in all of 2002. That's compared with last year's record 9.8 percent rate, representing about $64 billion of debt.

``There's about $750 billion of distressed and defaulted debt out there,'' Altman said. ``That's more than Italy's gross domestic product or about three-quarters of Great Britain's GDP.''


Finally found one industry who is leading the recovery - receivers and auctioneers
-750 billion of distressed and defaulted debt! and we ain't seen nothing yet!

Got gold?

sector@Jimbo Actually, You CAN Place Precious Metals in Your IRA Account#7982307/03/02; 15:04:29

There's just a Mountain of paperwork.

Your broker can get the rules and it pays to be physically near your broker's office AND the depository location for your metal.

Think of it as being similar to getting a driver's license.

misetichBush failed to follow US law on shares#7982407/03/02; 15:31:44


The White House has acknowledged that President Bush failed to follow the US law and disclose details of shares he sold when he was a company director.
A spokesman blamed it on a clerical mistake by company lawyers.

The US President's business dealings have sparked renewed interest since the accounting irregularities at WorldCom were revealed last week.

After those problems were announced, Mr Bush said he was angry with company directors who abused their position.

Now his own actions have been called into question.


Old motto: Do as I say, not as I do

Got gold?

misetichEquitable may pull all funds out of equities#7982507/03/02; 15:38:44


Equitable Life is considering moving almost all of its funds out of the equity markets in a move that would, in effect, end its life as a with-profits fund.

The society, which slashed policy values on Monday by a further 20 per cent partly because of the continued fall of the FTSE 100, hinted yesterday that it might reduce the number of equities it holds to practically nothing in an attempt to create some stability for beleaguered policyholders.


Times are changing- Best move by Equitable - better move would be to buy some gold for their portfolio

Got gold?

misetichCongress questions SEC reports #7982607/03/02; 15:46:58


WASHINGTON (Reuters) - A congressional committee Wednesday demanded to know how thoroughly the Securities and Exchange Commission has been checking the books of five U.S. corporations that in recent weeks have been rocked by scandal.

In a letter to SEC Chairman Harvey Pitt, Republican leaders of the House Energy and Commerce Committee requested SEC records and a report by July 9 on its policing of WorldCom Inc. (WCOME: up $0.12 to $0.22, Research, Estimates), Tyco International Ltd. (TYC: up $0.01 to $12.66, Research, Estimates), Global Crossing Ltd. (GBLXQ: Research, Estimates), Xerox Corp. (XRX: down $0.51 to $6.04, Research, Estimates), and Qwest Communications International Inc. (Q: down $0.23 to $1.70, Research, Estimates)

"The committee is profoundly disturbed about the recent string of allegations that companies...may have engaged in questionable accounting practices," wrote Rep. Billy Tauzin and Rep. James Greenwood in the letter to Pitt.

"We are conducting a full review of the issues surrounding the allegations of accounting improprieties and financial misrepresentation that have arisen in connection with the above-mentioned companies," the lawmakers said.

Tauzin and Greenwood asked Pitt whether the SEC reviewed any of the five companies' quarterly and annual financial reports from January 1998 until the date when the SEC launched investigations of each company.

They also asked about any SEC inquiries involving the five companies since 1998 and their outcomes, as well as for various records and correspondence involving the companies.

Finally, the lawmakers asked the commission to explain how it decides to investigate companies and how it decides which companies' financial records to review closely.


While congress is at it, perhaps they should ask themselves why they're not investigating GATA and Reg Howe's claims on gold manipulation

Got gold?

JJJimbo Mess 79796#7982707/03/02; 15:48:42

Nice response, Jimbo! (yr 79796) The really funny thing is that some of this forum's posters take them selves so seriously they really do believe that so called 'cabal' people are posing as 'newbies' on this site to post dis-information. That's a hoot! I can just imagine senior staffers at Rothschilds, JPM etc rushing to their screens at 8am to see what Paper Avalanche is saying today…!!

The truth is more prosaic, Jimbo. As a 'newbie', if you question the 'authority' of the regular posters, or the general 'gold to the moon' philosophy of this board, either they'll blast you or freeze you out.

An example of the former is a post from an Aussie poster a couple of weeks ago, fed up with people with 'attitude', who got stuck into YGM for being (amongst other things) condescending. YGM took his bat & ball, went home and refused to play anymore ( but after numerous 'No, Don't Go's', was persuaded to return to the fold after 5 minutes, thank Heavens!) Haven't heard much from the Aussie poster though. No-one wanted him to stay.Not in the 'club' you see.

The latter - ignoring you or freezing you out - is particularly effective, and I've seen several people try a couple of times, then give up. I think I can be used as an example:

A week or so ago I posted, what I thought was very much on topic, commenting on a gold newsletter writer who said the charts showed an imminent drop in gold stocks. It turned out he was spot on, 100% right, and most GS are well down. I genuinely wanted to share this with the forum, and also said the same author indicated a much bigger fall was possible, and the charts showed gold going as low as $270.

One would think this would be of passing interest to a gold forum, but as far as I could see when I scrolled through next day, nary a comment! It wasn't what most of the posters on this board want to hear, so ignore it and it'll go away. Actually, I don't have a problem with that - the board belongs to the posters, and if that's how they want to play it, that's OK with me. But I can't see much use in preaching to the converted, and that's what's happening - you become insular and just tell each other what you want to hear. Not much value there.

Along comes a Jimbo (or a JJ) and you get blasted, or ignored. So be it. "Cabals" come in different shapes, sizes & forms.

Disclaimer & Admissions:
I am not a Troll (haven't been fishing for a while)
I am smug (I sold most of my GS at the top.)
I'm short the GI (gold will visit high mid 200's before vertical climb)
I am not in the "Cabal" ( wouldn't join any club that would have me as a member)

Thank you Gold Bugs, & Goodnight.

alankaGold Price#7982807/03/02; 15:49:48

once again please somebody out there explain to me why the gold price did mot move up today? currency under pressure dow was under pressure. when is gold going to go though $330-00
JJ(No Subject)#7982907/03/02; 15:58:07


Alanka, what I said yesterday may have sounded flippant, but it's true. Markets don't do what they should do or what you expect them to do. Logic doesn't apply to markets because they are made up of many many people and many many people aren't logical or rational. Just when you KNOW the market is going up or down, it does the opposite. The market has a mind of it's own. That's what contrary investing is all about. Now's the time to short gold because every one thinks it's set for a rise but the market will do what the market will do - and catch most people out.
YGMNick...#7983007/03/02; 15:58:43

Your mailbox is too full....YGM.
alankagold report kamal naqvi #7983107/03/02; 16:09:59

>Kamal Naqvi: Precious metals expert, Macquarie Bank

By: Byron Kennedy

Posted: 2002/07/02 Tue 21:00 | © Moneyweb 1997-2002

MONEYWEB: The gold price has been under pressure over the past week or so and to put this weakness into some perspective is Kamal Naqvi, He's the precious metals specialist at Macquarie Bank. Kamal, the last time we spoke to you on this programme, back in January, gold was trading at $286 an ounce at the time, and you were quite confident that gold would push through $300 sometime this year. But were you surprised by the magnitude of the rally?
KAMAL NAQVI: I have to admit I was a little bit. I think I was looking at prices getting up to testing $315 and suspected that that would prove quite a hardy resistance. But the weakness that we saw in the equity market, then in the US dollar and also the extent of some of the statements from gold producers regarding [indistinct] in hedging were a little bit stronger than I had expected. And as a result, I think it did justify it's move up to a peak of just above $330 an ounce.

MONEYWEB: As you say, gold did threaten to crack through the $300 level, It's currently back at $314.50. What do you think is behind this latest bout of weakness?

KAMAL NAQVI: It's been interesting, the latest bout, given of course over the last two weeks it's seen further equity market weakness. And with the WorldCom scandal, followed then by Xerox and of course pressure on the US dollar, I think that one of the reasons why we haven't seen gold react as maybe it might have was because of timing. We've come up to the end of the quarter, the end of the financial year for some organisations, and also coming up just towards the July 4th holiday in the US, and I think that we saw a lot of profit-taking from funds that were already long gold and, indeed, probably making up for losses that they made in other markets. So I do suspect there was a bit of a timing issue for gold The other issue which is perhaps more of a problem is that many of the normal market participants, the CTAs, the funds, a number of the bank traders, are already long gold and it really needs to get significant worse for them to decide to go longer and we are still yet awaiting a more general move into gold. But I still remain fairly optimistic, over the next few months, that we can still see a new high for the year.

MONEYWEB: You did talk about investor confidence. It seems to be taking a knock almost on a daily basis in America. Surely we would have expected a rush to gold, following the likes of the WorldCom disaster?

KAMAL NAQVI: Yes. As I said, I don't think the timing was one of the reasons why we haven't quite seen that push. I think post the July 4th holiday will be a far better time to assess whether or not we are seeing a more of a move from investors, and particularly from some of the funds into gold, and I suspect it will be a much better reflection of the underlying sentiment. But I certainly do believe that if we see a continuation of the equity market losses that we have certainly seen over the last couple of weeks, and more pressure on the US dollar, with only really intervention resisting further weakness, then I do think gold will reflect that further, and indeed gold equities will also.

MONEYWEB: Do you think we could see another attack on the $330 level, given what you've said?

KAMAL NAQVI: I do expect that. I have to admit, I don't expect it very, very quickly. I think that what you will need to see is a move for maybe some of the more generalist funds to be concerned about underlying values, with furthermore significant losses in equity markets – talking about 10% losses in that. And under that circumstance, I think you could see a wider push, in which case getting through $330 in towards my target of $340 still seems quite obtainable. I see that happening over this quarter, as the most likely time, and then perhaps easing back towards the end of the year, as I and I guess a number of economists are expecting some sort of recovery, stabilising equity markets towards the end of the year.

MONEYWEB: Is there any danger of gold falling below $300 an ounce any time soon?

KAMAL NAQVI: I think it's unlikely. One of the interesting things that I've heard over the last week or so was, with that push down on Friday down to $310 and indeed before that, were a number of reports form Asia of quite good interest, if prices fell towards that level. And certainly when we saw that fall on Friday, there were a number of interested buyers in Asia, and there were also a number of investors and indeed some of the banks that are interested buyers on a significant dip, like we saw on Friday, and I think there's enough interest to withstand what I suspect would be a fairly modest amount of selling. I guess that's the other point. Is it unlike previous failed rallies in gold. This time around, most investors are going to be very weary about short-selling in the market in any size, because clearly we are seeing quite a bit of volatility, particularly on the upside, and I suspect that will restrict the level of short selling.

MONEYWEB: And when you talk about Asian banks, do you mean central banks in particular?

KAMAL NAQVI: No. I'm talking about Asian investors, Asian funds, looking to buy [indistinct] Asian central banks. I wrote a note this week just noting that Asian central banks have moved into US dollars in a significant manner, ever since the Asian crisis in '97, '98, and the possibility that in the current climate and the uncertainty over foreign exchange values, that they might consider increasing their level of reserves from 2% and less to something more significant in gold. But it has to be said, there has been absolutely no sign of that so far.

MONEYWEB: Making a call on gold is also like making a call on the dollar – how do you see that moving in the second part of this year?

KAMAL NAQVI: I think continued weakness for as long as the equity markets remain volatile and falling lower. I see very little in the short term to see that changing, I suspect that the economic data are going to continue to be mixed. Clearly further earnings results and concerns about accounting measures are only going to add to some of the downwards pressure. However, as I mentioned earlier before, I think towards the end of the year, we certainly are expecting things to stabilise and the early signs of a much more genuine recovery than what we saw earlier this year, and we think that will give the sort of support to earnings that's required for equities to stabilise and to start to improve. Indeed, I think the dollar will follow a very similar pattern.

MONEYWEB: Let's move away from gold. The last time we spoke to you, you were also quite bullish on platinum. That's a call that's also proved to be pretty much on the mark. It has done a bit better than you expected, but do you think the fundamental outlook is still pretty good for platinum?

KAMAL NAQVI: I'm still reasonably optimistic for the reasons we spoke of last time. I quite liked the demand outlook and I think supply, while increasing, will not come on line quite quick enough to feed prices back below $500. However, I think it is fair to say that demand, maybe, in terms of industrial demand, is not growing quite as quick as I would have liked. It's been offset by jewellery demand, particularly in China, holding up much, much stronger than I would have expected. However, like with base metals, the strength of the recovery is going to be very important for platinum demand, in particular. And if this recovery is even further delayed than we are currently seeing, then I think that will put some downward pressure on prices, even where they stand today, given that a lot of the supply and increase in South Africa seem to be coming right on line.

MONEYWEB: The platinum currently at around the $530 level, where do you see it finishing the year off?

KAMAL NAQVI: I think we will see it higher, I think we will see it up towards $575. Certainly I would expect to see it above $550 on the basis that demand, particularly industrial demand, will start to be coming through quite strong. I think it won't be until the second half of next year that we will see a lot of this new supply coming on line. I'm quite optimistic that the market will remain quite tight over the next six to nine months.

MONEYWEB: That was Kamal Naqvi, he's the precious metals specialist at Macquarie Bank, and still pretty bullish on both gold and platinum. He says platinum could go as high as high as $575 by year-end.

Carl Halanka: Gold price.#7983207/03/02; 16:19:44

The gold price is being manipulated. The Gold Antitrust Action Committee has uncovered a huge amount of evidence to support this claim over the past 3.5 years. I suggest you look at the link I posted in response to you yesterday.
CanuckWhat is happening to the dollar???#7983307/03/02; 16:22:30

Why the sudden reversal and booming up again?
JJ(No Subject)#7983407/03/02; 16:23:28

Testing... testing...he hasn't seen it yet, YGM
Mr GreshamJJ#7983507/03/02; 16:25:49

"wouldn't join any club that would have me as a member"

Smugness is only one attitude. Being the clever foil who's always catching EVERYONE else off base is another. Oh yes, everyone has a closed mind here -- except for the one who gets to flog everyone.

Setting yourself up on a pedestal, of whatever type, is pretty easy to do on a quick Internet "post and run" raid. (Very few of that type stick around a forum for long, but it's VERY interesting when they do. I'm betting we have room for even that around here, depending...)

Being a troll is all in your attitude. Your intention, to move the discussion forward, or block it with your own ego. Most trolls do not recognize their own obstructive presence, and have to be removed. Sorry. (Some are quite aware, and simply don't care about others. Hey -- I hate freeway lane-swervers, too.)

"wouldn't join any club that would have me as a member"

The above statement applies to forums as well as cabals. And if everyone had your approach to collective discourse, there would never have been a forum here for you to run to, post on, and (?) run away from.

When a Forum gets to be about the Forum, rather than about the topic that 95% of readers are spending their precious time to learn about, then the moderators are letting a few cheat the many. I'm also betting they won't do that.

Basically: Don't waste my time. Nearly everyone here is worth reading, and on busy days, it means skimming over great stuff I'd love to spend time with. Bad attitude? Costs me my time, AND my patience.

It IS all in your attitude. Dissenting views? Yeah, that's tender ground -- anywhere. How do we approach it? Flog everyone, up and down? Seems to be your approach, and explanation. I disagree. (Can ya handle it? Show us an example, bro...)

Try to be helpful, is what occurs to me. Try to read what others have poured themselves into, worked hard on. Show your appreciation for what goes on. Don't expect more out of it than you've put into it. In fact, most of what you will get out of it WILL be your own work, just as in school. Waiting for others to cheer you up and down? Just doesn't happen as much as ANYONE would like it to. (That's why I try to start out on the Appreciation note.)

Something about the Golden Rule, emphasizing the "as you would have them do unto you," rather than the "Do unto others..."

Places to go, thing to do. Click...

JJMr Gresham#7983607/03/02; 16:45:09

I was trying to make a point and inject a little humour. Looks like I missed on both counts with your good self.

I won't respond to name calling. This IS a good forum - but it's not perfect and I believe my comments are fair & valid - and shared by others who may not be regular posters. Try not to be so sensitive, Mr G.

Have a good 4th July

R Powellalanka // JJ#7983707/03/02; 16:54:58

Alanka, I believe there is a corrolation between the POG and the strength of the dollar but, like most financial or trading rules or so-called truisms, this one too falls far short of the always truisms like the certainty of death and taxes. There are a multitude of other things influencing the price of gold. Actually, the dollar gained strength today- up 0.56 to 107.55 on mrci's dollar index.
Gold, if viewed as a political, monetary commodity, may move up or down over longer time periods (much like currencies) than other seasonal-type commodities or even the currently favored stock sector. Watching every daily tick and down may drive you nuts. Myself, I'm immune to it as I was certified crazy long ago.

JJ. One of the little tricks our minds tend to play on us is to filter out any conflicting or negative information or input that is contrary to our established beliefs. A position or belief once taken seems to bias our interpretation of any and all information available after the position is established. We cheer loudly when news is favorable or substatiates our opinion. We tend to overlook or downplay any evidence contrary to the position taken. This is human nature and must be avoided as a trader. The ups are cheered and the downs are viewed as another reason to avoid all paper trades and invest in physical only. I do not agree with this but it is the overwhelming view here. I believe the analyst you mentioned based his downward POG prediction on technical analysis. Many have discussed at length with no clear cut conclusion, whether technical analysis can be applied to manipulated markets. Certainly long term charts are flawed by the fixed gold price of past years- fixed by government and the London Gold Pool. Now the fix is covert instead of openly published.
Please correct me if his opinion is otherwise based and tell us, if so, why this analyst sees POG falling once more to test the bottom?

steadyignored/not ignored who cares im honered#7983807/03/02; 17:08:02

re Gandalf The Whites Question mesg #79803 are the truck sales holding steady? duno have to go ask the dealers. Thanks for including me though appreciate it!
Gandalf the WhiteSir Steady !#7983907/03/02; 17:27:40

YES, and the Hobbits love ya !

slingshotGold to $200.00#7984007/03/02; 17:32:21

Hold the stones, please.

Getting Blasted or Frozen and Trolls runnning amuck on the forum gave me a chuckle.
Look there Jim Bob, a troll running amuck. Think we ought to Blast him? Please excuse my weird sense of humor. Anyhow.
What would the world/economy/ banking/ debt be like if Gold did drop to $200.00/ $100.00. Would the Die Hard Goldbug become extinct or would his surroundings only enforce his belief in Gold accumulation?

Congrats to the winners of "Dark Visions". Enjoyed all the entries.

R Powellalanka // Moneyweb report // tomorrow's TV#7984107/03/02; 17:48:21

Interesting. I wish he had given more reasons for his targeted POG $340 level. He mentioned the dollar's stength and equities which he sees firming or stabilizing.
I also wish the interviewer had asked him for an estimated POG target if the stock markets continue downward!
Quote of the day, received today by e-mail but the source does not give the date of the quote.
"Based on our model, we think the S+P 500 is more than 20% overvalued."
Abbey Cohen, Goldman, Sacks
For fans of Fleckenstein, tomorrow morning at 8:00 EST on the peoples' stock picking television channel. Also scheduled is an interview with Warren Buffett, I think at 10:00 EST (not sure on the times!). Sometimes when the markets are closed, CNBC has some interesting guests and plenty of time to get past the usual two questions and three stock picks.
Holiday tomorrow
So, for those not working, I can say
Happy Long Weekend!

darkhorsejust an observation...#7984207/03/02; 18:00:16

"A week or so ago I posted, what I thought was very much on topic..." and later "...when I scrolled through next day, nary a comment!"

There's quite a bit of discussion that gets read and "digested" without any further's an arrogant attitude about your own posts/position (sound familiar?) that leads you to believe anybody has to respond

"The truth is more prosaic, Jimbo. As a 'newbie', if you question the 'authority' of the regular posters, or the general 'gold to the moon' philosophy of this board, either they'll blast you or freeze you out."

Yeah, a lot of that goin' on around must have us confused with somebody next door.

Mr GreshamThanks, JJ!#7984307/03/02; 18:01:53

Good answer -- I'll re-read and try to enter a more festive mood -- always room for improvement, as you've said.

Also, sorry -- you got my rant for the day, after hearing of my wife's new spending plans. Lost a bit o' sleep over that one last night. Welcome, and let's party on from here!

R Powellslingshot#7984407/03/02; 18:11:35

Trolls are always getting underfoot, aren't they? Use ice cubes for bait in this hot weather and then blast them. Or just give them enough ice cubes and they freeze up entirely. JJ has a point (and I know there are opposing views) but it's still good to see someone laughing.
One man's opinion of all this is to have fun, learn and hopefully profit. Be careful with the clam dip during food fights, it stains badly.
Your question, if POG goes down to $200 or $100 will goldbugs buy more or become extinct?
I can speak for myself only, concerning the silver that I'm partial towards. Unless I can discover a valid and fundamental reason why the POS should be lower, then any downside toward the $4.00 or even $3.50 level will see me stocking up with more.

R PowellMarkets closed tomorrow#7984507/03/02; 18:38:30

Of course, for the fourth of July. Are they open again on Friday and, if so, how many active players will show up?
POG got ambushed in the last few minutes of trading last Friday, probably to help second quarter final numbers, especially marked-to-market positions of paper traders. We've also seen POG attacked recently during the very thin trading of the afterhours globex electronic trading.
If someone(s) wanted to counterattack, what better time than now, with US markets closed tomorrow and likely very thin action on Friday and then another shot overseas next Monday before our Monday Comex open? This is just "supposins" but not impossible. Anyone got a few extra billion to buy with? If Soros really thinks, as he says he does, that the US dollar is going to weaken further by 20-25%, then what would he do to capitalize on this?
Also, concerning honor among thieves, what's to keep one or more of the big gold shorts from secretly positioning long? They must be watching one another like gunfigthers facing off.
"Well boys, are you going to draw them pistols or you gona whistle Dixie?"
Notice-- this post must be read, studied and memorized for future reference but no response is required!

R PowellTroll control#7984607/03/02; 18:49:29

Hey slingshot, isn't Gandalf in charge of controling amuck running trolls? I know he almost singlehandedly put the orcs on the endangered species list. I thought that's why he filled the moat with crocs, to keep the troll population down. Crocs eat them at night when they venture too close for a drink.
Black BladeP is a fact, E is negotiable#7984707/03/02; 19:02:54

Amid the lies, stock market's retreat is gentle, so far


SAN FRANCISCO (CBS.MW) - How many times, during the good stock-market days, did we hear chart readers tell us the market was saying we're going higher? And higher. Until March 10, 2000, anyway. And how many times in these bad stock-market days have we heard chart readers tell us the market is going lower? And lower.

Everyone's a Galileo. With the wind at their backs, chart-readers and other market technicians always seem to have a leg up on the rest of us. Yet their methods rarely take into account the so-called fundamentals of the 8,000-plus companies that compose the U.S. stock market. Technicians can quote you chapter, page and verse of statistics: resistance, support, volume, put-call ratios, moving averages and so on. Yet their work rarely relies on earnings, profit margins, market share or return on capital.

McAvity, who sees gold's price going far higher in this corporate storm, says "the worst corporate scandals haven't yet surfaced. It isn't over yet." A technician himself, McAvity's hand-crafted charts and numbers go back 30 years, and more. So he puts his faith first in numbers, and then listens to what the CEOs and CFOs have to say to investors. "My old favorite still remains: On the question of P/Es, P is a fact, E is negotiable," McAvity says about stock prices and their earnings multiples. In other words, how do you handicap a horse when the jockey is cheating?

Black Blade: Being one who does not follow TA, I think that those who do are finding it impossible to get a read on the markets. On the other hand, I tend to follow FA from a "big picture" perspective. However, I also have been very critical of the corruption on Wall Street with regard to the phoney baloney accounting and use of such nebulous standards as pro forma accounting (something that ORO and I debated in the past). If anything we have only seen the tip of the iceberg. Once the layers are peeled back we will seen minions of cockroaches hiding behind the phoney data. Where there's a few cockroaches, it's an obvious bet that there are many more. The SEC reviewed corporate statements and found that over 25% public companies make mistakes in the filing of their reports. They also found that most of those mistakes turn out to be significant and material enough to affect the price of the stock when the company is forced to amend their statements. In fact there are so many problems that match those of Enron, WorldCon, Qwest and Global Crossing that the SEC plans on auditing every Fortune 500 firm this year. The market meltdown is going to get much worse. Best get prepared for the New Great Depression.

slingshotR Powell#7984807/03/02; 19:03:05

Expect the Unexpected

All that I have read on this forum is the TA and fundamentals that Gold should move higher. There are the pullbacks resulting from profit taking and selling of gold into the market by CB"s or a shell game using paper to surpress the POG. The ride down to $250.00 POG was a learning experience for me. Should Gold slide down to $250.00 or below the outside factors, unemployment, high consumer debt, credit card defaults, mortage defaults and the general publics ignorance of gold and or unaceptance as a save haven for wealth, contribute to a compressed POG.
If the idea was to remove gold from the market to help increase POG, who will buy even at $100.00 per oz if they can not afford it. The time from point A to point B although elusive I feel is the controling factor. So as the POG slides the ability to accumulate decreases with unemployment, etc. Thus as we would believe more gold will be taken from the market it will actually decrease even at a lower price. Possibly defeating our intentions.
Lower silver prices since it would be more affordable will be the first to go. I will also take advantage of it ASAP.
IMO if gold went to $200.00 or even $100.00 I would not be so concern as to the price but, more concern what is going on around me.


Mr GreshamFunloving Doomers on a Forum#7984907/03/02; 19:03:44

Well, I was trying to find the ones where music played on some threads, and cartoons danced. The Y2k'ers partied together, online, before _and_ after the dreaded date.

I can't even remember what "FRL" stood for, except "Fruitcake something League". Links are in this one to those threads, and I haven't checked them in -- years. See what happens when you don't buy a new computer often enough ;)

We fought some hard wars with the Troll Federation in those days, but y'know, they seemed to stay away from the party threads. Energy field around it, or some such. And back at work next day, saving the Universe or whatever, well, it wouldn't have been the same without 'em.

Next link, the Quest for Dieter...

Black BladeInflation fears rise as trade deficit jumps, foreign investors flee #7985007/03/02; 19:14:34


Shaken by Wall Street's growing scandals and sickly profits, foreign investors are pulling the plug on their U.S. investments, adding to an outflow of cash that tops $1.25 billion a day. Some economists worry that if the exodus goes too far, it could threaten the underpinnings of the wobbly economy.

"This is an enormous problem that will become unsustainable within a very short period of time," said Mark Weisbrot, co-director of the Center for Economic and Policy Research in Washington, D.C.

If the trend continues, some economists warn, inflation could roar back to life. That would force the Federal Reserve to raise interest rates, which in turn would slow the economic recovery. "Foreigners don't have to sell their U.S. securities to have a tremendous impact on our economy," said James Welsh, who heads Welsh Money Management in Carlsbad. "They just have to stop buying."

Black Blade: I alluded to this yesterday in the DGMR when I discussed how Alan Greenspan and the Federal Reserve were "caught between a rock and a hard place". Raise rates or not and the outcome is still dire for the US economy and the only two sectors that are likely to benefit are energy and precious metals. Energy because "cheap energy" will be necessary to kick start the economy and precious metals because of the safe haven – flight to quality aspects. Also, the threat of terrorism and war are much greater now. We do live in "Interesting Times".

Definitely a good article to peruse (see link).

Mr GreshamThe Master Speaks: diEtER#7985107/03/02; 19:25:04

Remember Wolavka here? An Internet personality is a work of art, indeed. The consummate actor, who stays in character, and fields whatever comes by his tiny opening onto the universe...

On a thread (chosen, for illustration, at random) titled: "What's the use? Why prepare?" dIEtEr spake thusly:

wHY???? wHY InDEEd!!!!! aS SOOn aS YoU WEre BOrN ThE TrIP tO tHe grAVe beGaN, iS THaT Not sO????? wHY BOthER brUSHiNG YoUR TeeTH????? tO IDentIFy yOUr coRPsE?????? vITAmiNS????? WHo nEEdS THeM????? TheY OnLY POstPOnE THe INevITAbLe, cANnOT YoU SEe thAT????? tO HeLL WIth EAtINg!!!!! wHY BOthER?????? iT OnLY COmeS OuT THe oTHeR EnD In a FEw hOUrS ANywAY!!!!! dIETeR Has NoT LeFT His BEd siNCE THeSE TruTHS BecAME SELf-evIDENt!!!!!!! wHY SHouLD He???????

-- Dieter ( This email address is being protected from spambots. You need JavaScript enabled to view it. ), September 06, 1999.

Someday, the biography of the Net's most Excellent sites shall be written, and, yes, we deserve a paragraph or so in it. It is the people together who make it so, and their joy in mutually creating something, where there was empty canvas before. A juicy topic, a wise host, and away we go...

slingshotR Powell#7985207/03/02; 19:26:36

Troll catching

You are right. Gandalf has them under control. Jim Bob has a new refridgerator trap. Only problem is he can't find an outlet in the woods. :0)

Mr GreshamDieter's Farewell#7985307/03/02; 19:30:39

"ParINg iS SUCh sWEEt sORRow Is it Not???? oF COUrSE IT is NOT!!!!! dILLwICk hYEnA!!!! hOW iN THe nAMe of tHE bLeeDINg eYeS Of diETeR CaN ParTIng bE SWeeT????? IDIot!!!!! hUh???? wELL??? gOOD mORniNG!!!! "

G: Sometimes the people you love the most hurt your eyes...

Have an explosive weekend, all. Independence is where YOU find it...

The Invisible HandMassaging of profits and the tax collector#7985407/03/02; 19:32:37

If Enron, WorldCom, Vivendi, Xerox et alt. massaged their profits to increase their share price, did they not have a higher tax bill?
What am I missing?

YGMJJ.....#7985507/03/02; 19:39:56

}}">Saw Your Post :>}}

Hey you know alot of what you said makes sense (I Think?)(I just skimmed it) But it's not a ass-kissin club here...If I screw up I could have a regular/long time poster jump me just as quick or quicker than a lurker...They may just do it with out fan fare by email...When some one jumps from the bushes with snide criticism or name calling well that causes response. When you have so much free time as many to post and continually throw stuff out there, well the more you do the more chance of offending someone whether it be sensibilities or ego, no matter it gets someone riled...I myself NEVER freeze anyone out because I may not agree...Mostly it's because I feel some else is better siuted to giving the reply or I don't have the knowledge to respond even tho I think I know they're wrong...We all do our bit over time to stand for something as in beliefs in gold and Cabals etc...Maybe at times I sound condescending (among other things)cause I've had my beliefs and attitude re: Gold Markets for years and I've seen dozens if not hundreds of new posters come and go....Can't argue/educate them all, much less convince them to think like me nor want to...We're not all (me anyway) that well educated or very prolific writers/deep thinkers and as such can give conflicting or confusing signals to some folks unintentionally...Just like your post and your looking for a reply or response from YGM...I'm not sure how to take it, really don't care all that much anyway but here I am giving you a long winded reply in the interest of keeping an even keel in this place....I like it here, some like me some don't, but unless attacked I keep my opinions of other posters to myself or go head to head...I left with last dispute cause I felt YGM had worn out and was worn out...Time better spent with kids...AND it was the name calling over the Rumour questioning of the PM story that set me off...I hate to see any poster go and I read all personal thinking but not all news posts...The personal level is the most interesting and usually has more effect than news...Anyway I gotta go aaaand I'm not makin any sense as usual probably, but one thing to remember is YGM reads JJ, Jimbo and everybody else here and I do have respect and admiration for those who take the time to inform and ask questions....No respect for name calling over civil repudiation.....YGM.
slingshotJJ#7985607/03/02; 19:45:39


Whoop! There he is. Whoop! There he is.

CamelTibet - Population Transfers#7985707/03/02; 19:52:59

mdgc says:

"Camel has surely never been to Tibet. Had he been there, he would not suggest that there are now five million Chinese in Tibet and that their numbers exceed the Tibetans. This is certainly false, blatant anti-Chinese propaganda from the Tibetan Government in Exile."


Camel: (compiled from several internet sources)

I dont' know why mdgc would be surprised if the PRC could conceive of mass population transfers as this was common during China's mass settlement campaigns in Manchuria in the late-19th century, and in East Turkestan during the 1950s.

Manchuria now has a population of 75 million Chinese to some three million Manchus; Inner Mongolia has about 8.5 million Chinese to two million Mongols and East Turkestan has seven million Chinese to about five million Uygurs.

In the days when these countries were opened up to Chinese settlement, roughly 100, 70, and 40 years ago respectively the policies of mass resettlement and assimilation were quite explicit, and even in the 1980s Chinese officials were still referring to the great opportunity the western regions held for absorbing China's expanding population

Such development is seen as natural in Chinese world views and is also regarded as necessary and beneficial to the "backward" peoples who could gain from assimilation with the Chinese. It is, however, contrary to international law as applied to occupied territories.

In 1952, Mao Zedong said: "There are hardly any Han (Chinese) in Tibet".(Selected Works of Mao, Vol. 5; p73; China Reconstructs, Sep 1987).

In 1990, the Chinese Governments census figures from The Present Population of the Tibetan Nationality in China (Zhang & Zhang 1994) claim the total non-Tibetan population to be approximately 4.2 million and the total Tibetan population to be 4.59 million.

Tibetan Government-in-Exile puts the present figure a bit higher,upwards of 7.6 million Chinese settlers in all Tibetan regions and considering that the rate of migration has increased dramatically over the last 12 years, this number is probably closer to the truth.

sector@alanka Why Didn't Gold Go Up Today?...The short answer...#7985807/03/02; 19:54:39

...because 20,000 contracts were sold today into our nascent rally.

Folks who sell 20,000 contracts on the day before a long weekend [1,000,000 ounces transferred] are on a mission to lower the price of gold.

There is no TA or charting skills that are applicable to today's gold market...only fundamental knowledge [As Bleak Blade advises] of the price suppression game being played out by the Federal Reserve and Treasury with aide from their side kicks, JP Morgan, CitiBank, Deutsche Bank, Goldman Sachs and others.

They have a problem in that the World economy is a wreck, stocks are being sold for money market funds and those money market investments are just now seeking safe havens so the bad guys want to make it appear that gold is a bad bet.

That dog won't hunt any more. The World knows what is going on. The World knows that the bullion banks are in trouble with their gold derivatives, not to mention their 100s of Trillions of interest rates derivatives [Which are linked to gold].

The corporate borrowing, as evidenced by the Fed's own commercial paper chart [At their website], reveals the inescapable truth that a recovery is way over the time horizon, deep into 2003...if ever. There really isn't a recovery. The Fed is misleading the World...just like World Com did. Ken Lay and Alan Greenspan are one and the same. The European scuttlebutt is that ALL the US government econ figures are bogus.

But the story of Enron, World Com and many more like them to come has long political legs since the Demos think they have finally found a resonating a blizzard of media coverage is still in the future, thus ensuring further investor angst and anger. As people lose their life savings they will revisit gold over and over until they satisfy themselves that it is better than the alternatives...which it clearly is.

This atmosphere remains positive for gold since the manipulation truth refuses to be bottled up. It is that truth that will embolden large and small to investors support gold and prevent any return to $250. The central bank lies of 1997 are found out…they have already sold their vaults nearly dry. They are 26,000 tonnes light according to BIS gold derivative data. They are carrying gold losses and counting them as assets an accounting scam worse than World Com.

As or the Russians who "Bought" a NATO seat with 40 tonnes of gold to rescue the Fed [Currently almost all gone], they are too sharp to be conned by the Fed much longer...indeed they are known as the wisest traders in the commodities world. Even now they are busy issuing numerous conflicting press releases about bank gold sales to obfuscate things. One says yes one say no. Masters at work. They will keep their gold.

The trigger event of the gold bull of the late 70's and early 80s was the sudden buying shift of Dredsner Bank according to Ferdi Lips in his "Gold Wars". this switch caught the market by surprise and Dresdner profited handsomely because they were FIRST. China may be the wild card. Nobody can predict the trigger...but there will be one...the continuing failing economies guarantee it.

We should all watch for such a switch. Maybe it will be Dentsche Bank as they desperately seek a merger with Credit Suisse. DB has $50 Billion in gold derivatives or gold loans they must pay back at market prices [Posted at the Cafe this evening].

Paper AvalanchePsyops - Day 2#7985907/03/02; 20:04:10

I humbly present the following post to all of the valued members fo this forum to whom I owe an untold debt of gratitude for enlightening me to the invaluable information found on the gold trail.

I come to you as someone who previously spent over a year's worth of time monitoring, studying and participating on a forum hosted by a big name search engine for those interested in a particular gold mining company. The reason that I posted the message that I did last night directed specifically at Jimbo is as follows:

The MO (Motis Operandi) of anyone trying to undermine the fundamental premise of the message being delivered by a specific source, whether website, newspaper, etc. is to call into question the validity of the information presented relative to other more "accepted" sources.

The most effective way to do so is to co-opt the same general goal of the participants in said forum and then distract them from the primary goal (as well as distract others from joining the movement). After reviewing the previous posts from Jimbo, I could not help but wonder why questions, which were easily answered by doing a nominal amount of due diligence, given the plethora of information supplied by this fine forum, were even being asked, other than to sew the seeds of doubt in what was being presented on this forum.

When I was participating on the forum at unsaid website, there was an MO that I gleaned from seeing the pattern of forum participation relative to the price of the stock and/or gold. In a nutshell, it was as follows:

1. Provide a hapless newbie that simply asked questions as to why either the value of the stock, or gold itself, should rise.

2. Provide a persona for a supporter of the hapless newbie.

3. Provide a couple of ancillary supporters (hell, what does it cost to participate in a forum)

4. Have said hapless newbie appeal to the emotional aspect of his/her simplemindness and post a message so as to make the person bringing such things to light to appear as intollerant.

This was the MO for a poster at a yahoo site (sorry MK) that sought to distract and disinform.

Think about it.

How many of the questions posed by Jimbo (and/or those supporting Jimbo - JJ and alanka) could have been answered by simply educating one's self by reading the gold trail, etc.? To what end does it serve to ask questions to which the answers already exist other than to sew the seeds of doubt in the minds of those who have migrated to this webiste for the first time.

If I have offended anyone, please note that I do not care.

Best regards,
Paper Avalanche

YGMHey JJ...#7986007/03/02; 20:04:24

Now that's a Odd thing to post here.....

I'm short the GI (gold will visit high mid 200's before vertical climb)...JJ

**That comment comes seriously close to a comment that would get blasted out of the water by many on a pro Gold Forum looking for reality and fairness in Gold prices. Even moreso by the host who sells Gold. Who'll buy Gold Coin if they believe the price is going to drop 20%.....Anyways I did see humor in your post and I can laugh with you and at you and at myself....I hope 'Some' of your investments pan out but not all......YGM

YGMPaper Avalanche....#7986107/03/02; 20:14:19

and now we have "the other side" of the story....

and it makes just as much sense to my addeled mind as any other....
Two lines tonite got me LOL....

"I'm short the GI (gold will visit high mid 200's before vertical climb)"
"If I have offended anyone, please note that I do not care."

Regards to you and all....YGM. (again the laughter starts in)

R PowellPaper Avalanche#7986207/03/02; 20:39:59

I find your reasoning intriquing.
You made a statement on a means (MO) that could be employed by "anyone trying to undermine the fundamental premise of the message being delivered by a specific source."
This implies that there is a "fundamental premise" of a "message being delivered by a specific source." This sounds like dogma or an unquestionable tenet required for membership to the club. Is delivering this message the reason for the existence of this forum?
"To undermine the fundamental premise" sounds like a serious offence.
May I ask what you consider that fundamental premise to be?

R Powellsector#7986307/03/02; 20:53:50

If it weren't for the sale of 20,000 contracts, there would have been buy orders for 20,000 contracts left unfilled. This number does not seem unusual for the daily volume. Were these large block sell orders late in the day?

sector@RPowell 20,000 all at once from a single source, the same source who sold at the end of Friday's trade#7986407/03/02; 21:04:38

I too have seen the straw men on other boards to which Paper avalanche alludes

Speedygold below 300#7986507/03/02; 21:05:06

If GOLD drops below 300, I'm going to BUY 20,000 dollars worth of the shinny yellow metal!!!!!! But I personally do not see that happening, considering the BIG DOGS haven't started playing yet!!! Maybe next week we'll see some fire crackers go off!!!! GO GOLD
YGMSpeedy...#7986607/03/02; 21:24:56

Big Dogs..."YES"...

There's a gazillion $$ sidelined right now and alot of it probably in money markets, not doing too well...Just wait til we see all that cash head for the PM sector...Make the Nasduck bubble look pathetic...IMO as with many folks here when the Dow & Duck fall into the abyss the stampede will be awesome to behold....Go GOLD & "SILVER"


Paper AvalancheTo Rich / My fundamental premise#7986707/03/02; 21:26:39

Greetings Sir Rich!

I have much admired your postings with respect to silver. I too am heavily invested in the white metal to the admonition otherwise by those on the gold trail.

You ask what I embrace as the "fundamental premise" relative to my earlier post.

My desire in posting what I did was not to establish a specific dogma or other codified set of unquestionable tenets required by anyone visiting this forum to participate in the exchange of ideas. Such a desire would be exclusive, arbitrary and counter to our implicit goal (specifically to educate people that they are their own masters and gold is simply a vehicle to deliver them from their current financial bondage).

My intent in my post this evening was to inform those who may have only participated in the exchange of ideas on this forum only, that our advesaries are well schooled in the art of presenting a "straw man" argument to deflate the momentun of a current movement.

I would imagine that the number of lurkers to this site has grown exponentially in the last 12 months. I would also imagine that such a growth in interest on the part of such lurkers to liquidate paper assets in order to purchase physical gold / silver has many of the PTB horrified.

That said, how much further of a stretch is it to postulate that said PTB might pay people to actively participate in very popular web site chat rooms so as to serve as a decoy?

The good news is that all decoy measures are temporary at best and the big boom in gold and silver prices is only one to two months away.

Take care and have a safe holiday weekend.

mikal@Sector#7986807/03/02; 21:26:57

Re: msg# 79858 Thank you for that! It never ceases to amaze me what you can post.
R Powellsector#7986907/03/02; 21:33:32

I know the sellers have targeted the afterhours market and the last few minutes of trading time during regular hours. I also know you keep a careful watch on these occurances.
I'm wondering about the relative strength or resilence of gold. Does it take a larger number of block sell orders to depress POG now as opposed to a few years ago? Do you see this happening more often than in the past?
One more please, how do you differentiate between between the normal everyday selling and that intended only to depress POG?

YGMmikal (07/03/02; 21:26:57MT - msg#: 79868) Sector...#7987007/03/02; 21:37:46

I'd like to 2nd that if I may....

And thanks to you for all your input Mikal....RPowell, you're steadfast and continue to amaze....I think you missed your calling...Cement man indeed!. What a place this forum. 'Crockagators' and all..YGM
TheJuniorMinersilver/Sector#7987107/03/02; 21:40:42

Though I started my PM research it has led me to be more interested in the story behind silver. I would be greatly interested in all your thoughts on this subject Sector. I find it interesting that there is much less above ground silver than gold. It seems to be running a annual deficit around 100 million ounces/tr for the last 10 years. When do you think the above ground silver will not be able to fill the gap between mining/scrap and usage

My father tells me he followed this story in the mid 80's only to get completly disgusted, as I discussed this subject with him a few weeks ago.

As in Gold, the hedgers and shorts are all over it. But silver has an increadble demand and usage pattern well ahead of gold.

Any thought about this out there?

Talk about accounting tricks. The Government has been buying US treasuries with our Social Security contributions. Uses the funds to offset the budget deficit. And just think, our SS funds are tied up in that $5 trillion debt that needs to be repaid for us to get our Retirement money.

JJThank you Gentlemen & Ladies#7987207/03/02; 21:42:32

for a largely tolerant & good humoured response to my stir, sorry, post, especially YGM & Mr Gresham - a pleasure to be ranted at by you, Mr G.

R Powell - Rich, I can't say by what analysis the gold newsletter author arrived at $270 as I'm not an expert. However, he did get the current downturn right, and apparently has quite a solid track record, so (I at least) feel it's worth taking on board.

One only has to look at virtually any historical long term chart - metals, stocks, whatever, to see huge, usually unexpected swings. Whether manipulated or not, it's still the market and is valid as such. As many wise folk on this board have stated, with all that's going on around us, a dropping POG doesn't make any sense what so ever, but it's there, at $310.50 as I type. It should be $330 plus, but it 'aint.

There are a million reasons why it shouldn't go to $300 or $290 or less. If $310 is crazy, $290 would be just a little crazier. But when the bottom IS in, when ever that is, you'll need a ride on the Shuttle to keep up with the POG as it accelerates into the stratosphere. USA Gold will wonder what hit them as they struggle to fill orders.

Gotta go now, I see some ice cubes...whoops missed that one...oops there's another, darn it they're getting close...
dodged that one....SPLAT..

OOOhhh my head....

SpeedyPPT#7987307/03/02; 22:08:05

Can anybody answer one question I have!! The question is.... How many times in the last 21 trading days has the PPT stepped in to save the markets from the abyss?
sector@RPowell It's Different now...#7987407/03/02; 22:08:31

It seems to take much more to drop pog than it once did...

..the large spec longs are far more resolute these days because they know what id going on. The small specs still get whacked because...well...they are small.

Ordinary doesn't come with a neon sign for identification. But huge blocks timed at end-of-day or timed for obvious stock market stress points tell the tale just as Fed repos can be used to retroactively show that same market stress.

Why is it different now? Price discovery has occurred and the stock market is in an accelerating fall. Except for the Dow the other indexes are ramped down. The end of this World downward ramp is a Japan-like ocean bottom that will last a long time.

Can the cabal hang on? Sure but each new desperate move shows their position more clearly and attracts more sharks.

To me the main event is the final removal of Japan's savings insurance due in April 2003. The Japanese debt is growing and their economy is further being hurt by a stronger yen.

I think there may be a nationalization of banks there and a simultaneous deval of US and Japanese currencies.

YGMGATA Email.....Bill Interviewed by Jim Puplava#7987507/03/02; 22:14:02

9:32p ET Wednesday, July 3, 2002

Dear Friend of GATA and Gold:

GATA Chairman Bill Murphy was interviewed today by
Jim Pupalava's "Financial Sense Newshour," which, with
the right audio programming, you can hear over the
Internet here:

Scroll toward the bottom left of the page and click on
"7-3-02 interview," below the image of a microphone.

Note what wonderful publicity Pupalava's "Financial Sense"
Internet site has given to GATA on this page. And while
you're there, check out the whole site:

It has an amazing amount of information and commentary.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

DOWNUNDER@ PAPER AVALANCHE - - - MY SUPPORT #7987607/03/02; 22:18:44

Just a short note to say that overall I support your alert re the postings you highlighted.My radar alarm also went off after about the 3rd post from Jimbo requesting reassurances that his investments in Gold were going to be "safe". I felt that "first time" the questions were very relevent especially for a newcomer to Gold investing. We ALL have to battle the wall of worry when our investments are going the wrong way -- even after 2-3 years experience.

Jimbo's questions were answered with kindness,patience and understanding by many experienced forum members & I applaud them for that. However it is not expected that a poster will continually need a moral boost EVERY time the POG goes down.After all the same basic questions are being repeated
and it's hard to fathom why. The POG is going to wildly fluctuate -- get used to it & if thats too hard to handle then don't invest in this area.

R PowellPaper Avalanche// silver// straw men#7987707/03/02; 22:33:37

I'm glad to hear that you have a fondness for silver. There used to be a number of silver enthusiasts here but I fear our numbers have dwindled. Silver news has been very scarce but both houses of Congress have passed the bill required for the purchase of silver for the Philly mint. This now awaits Bush's signature. The amount of silver necessary for the coin program is small compared to overall usage but the government buying will give evidence to the belief that the 4.2-5.8 Billion ounces they once had- are almost all gone! This may shock many. Sometimes markets don't budge from the disclosure of important information but rather from what many would consider less impressive news. The market doesn't know how much silver the coin program uses versus total world use. It will just know that the government, for the first time in the memory of many, has to buy silver! Many will ask, "Who do they buy it from, isn't silver made in factories in China?
Concerning "straw men", pure disruption is easily ended as a code is required to disrupt. Unfortunately, I have another to remember as massive, endless posting caused one of my regular visiting sites to institute coded access.
I would think that those trying to instill doubt would ask questions very similar to those very new to the subject. How does one identify intent? When repeatedly asked "Why did POG go down today" almost every day, is our friend asking, "POG down today, what's happening?" I don't know.
Also, if we talk among ourselves only, we will have very few questioning some opinions we hold in common. Sometimes conditions change which should force us to re-examine (to reaffirm or change) our opinions. We should not, I think, become complacent and "set in our ways" in all our thoughts. Some (not all, I know!) are subject to change. These I refer to may be more trading conditions than beliefs such as that honest money helps insure liberty.
My introduction to the silver situation was through Butler. I questioned him all the way, even searching for the sources of his statistics and facts. He and Morgan are among the most knowledgable silver analysts producing information and opinions that I'm aware of but I question them constantly. I have too much invested both financially and otherwise, to not constantly "play devil's advocate" with their writings and my own view of silver. My point is that perhaps even "straw men" can be useful forcing us to answer questions, perhaps clarifying understanding through explaining or, perhaps altering a previously held opinion. Pure disruption can be unpluged and innane disruptions can be, as has been mentioned, ignored.
There hasn't been too much news about silver but I'm always looking and appreciate every mention made here.
Thanks to all

YGMDOWUNDER......#7987807/03/02; 22:41:20


The POG is going to wildly fluctuate -- get used to it & if thats too hard to handle then don't invest in this area.

**If I let it get to me over the years and Dollars I've invested in Gold thru, Stocks, Mining and Physical I'd have ulcers on my ulcers...It a rocky road & not for faint of heart. Hopefully the road is getting shorter and smoother soon.....Regards...YGM

Mr GreshamRPowell#7987907/03/02; 23:03:44

Rich -- good posts today and a good blending of two topics just below.

I sure hope they get silver to a sellable point sooner rather than later -- every time I carry it, the straining muscles cry out to me that "silver is a YOUNG man's metal, fool". I imagine that old men (the ones with the big fortunes) prefer gold because they can hold more wealth per handful, and aren't as likely to throw their backs out. ;)

At the same time, it's kind of a thrill to be able to own a thousand of something valuable, isn't it?

Mr GreshamBig OOOPS! for anti-Euro side in Britain#7988007/03/02; 23:05:21

Using Hitler in ad. Big flap. Dumb, dumber, dumbest. What were they thinking?
R PowellThe JuniorMiner#7988107/03/02; 23:08:39

May I suggest Butler's work, the SilverInstitute and David Morgan's work for starters on basic silver info. As far as I've been able to figure out, the most widely accepted and reliable(?) numbers come from GFMS's Silver Survey which listed 2001's deficit at 89 million ounces. 2002 will be the 13th consecutive deficit year. Most estimates guess that world supply is 300-500 million ounces including Buffett's 129.7 million and the 107 million listed as held by Comex.
The yearly production and total use are probably fairly well documented. What is unknown is from what amount of total world surplus we should subtract the last 13 years' deficit (about 1.5 billion ounces)? Who knew 50 years ago how much silver there was. Who knew or even gave it a thought as there was almost no demand then other than for jewelry and money? 5000 years of growing supply and then 50 years of massive usage to come close to running dry?
That this market can run an ongoing deficit without price rationing defies the laws of supply and demand. It is an ongoing puzzle. I'm constantly looking for the flaw in the scenario because if there isn't something we're overlooking, then someday soon the POS will skyrocket.
Hope this helps,

YGMHAPPY "INDEPENDENCE DAY " USA#7988207/03/02; 23:15:25

Truly the Home of the Brave & Land of the Free......

Only in America could an organization like GATA be born...
The American Constitution and Continuing Fight for Basic Rights, Freedoms & Truths is still today an inspiration to the rest of the world. Regardless of Politics and Government of the day, Americans have more than enough to be rightly proud of......Have a safe and happy holiday all ....YGM


YGMOf Interest....#7988307/03/02; 23:23:13

A Small excerpt from tonites


CONCERNING THE EURO: While in St. Petersburg late last week, we had a most interesting conversation regarding the euro with our friend and client, Boris Sirochkin. We discussed the US dollar's recent substantive weakness and we discussed the strong tendency on the part of St. Petersburgers to have owned US dollars over the past several years. Boris said that in the past two weeks he's noticed something quite extra-ordinary.

Clients in Russia have called to ask him about changing US dollars into euros. He said he'd not heard that question asked before! Further, and more interesting still was that he understood that for sizeable transactions moving US dollars into euros, those wishing to do so were suddenly paying 1.01 at a time when the euro was trading .9900. Those making the transactions asked only "how much could be done." They apparently were quite willing to swap dollars for euros at a discount to the spot rate.... a circumstance heretofore seen as wholly unlikely, if not wholly impossible, and certainly wholly imponderable.

What have we learned? We've learned that the psychology of the dollar has indeed changed, making it more and more likely that the dollar's trend has indeed changed. Further, we've learned that the Fed's problem in managing the monetary base will become even more disconcerting in the future. In the course of the past five years, we've argued that the Fed has had a problem managing the base, for much of the base's growth has been due to the demand for cash... much, if not most, of which has come from abroad. If Russians, who've been perhaps the most assiduous holders of US dollars in the past several years, suddenly wish to swap dollars for euros, the base is about to implode, and we fear that the authorities won't understand what it taking place until far too late.


DOWNUNDER@ YGM - - - THANKS#7988407/03/02; 23:39:45

Thanks for your comments AND for your research which is very
much appreciated --much more often than not. :) I too spend a fair bit of time as an activist,posting gold & silver related information to Jouralists & mining Co's.It's bloody frustrating & that's for sure -- but without it there would be even less of a turnaround than what's occuring.Keep up the good work Sir.

AristotleSelling that COMEX stuff down the river#798857/4/02; 00:23:52

I was almost *almost* among the brain surgeons and rocket scientists who "sold" COMEX Gold (contracts) today.

No, I didn't have a long position to liquidate (never have, never will.)

What I'm talking about is establishing an outright short. Plunking down my $1,350 margin per each and every contract on what could easily become a one way ride down to the Intrinsic Value (i.e., Zero) of these danged ol paper contract thingies.

I know, I know... one of you good-hearted (yet sweetly naive) souls will at this point surely chime in, "But Ari... the COMEX exchange promises -- PROMISES on their own good name -- to ensure against counterparty default! Therefore these contracts CAN'T be considered intrinsically worthless! Being short on COMEX Gold can be dangerous!"

To that I'd say the world is filled with danger. Now run along and play indoors where it's safe, my sweet innocent wearer of short pants, and leave the grown-ups to look each other eye-to-eye across the table until the weak side blinks.

I've said this before, as have many others, and I'll say it again now. It is naive to think that COMEX Gold futures -- merely private contract instruments overseen by a commercial enterprise (the Exchange) -- are immune from reaching their intrinsic value of zero simply because The Exchange stands behind them with their "full faith and credit."

Sheeeeeeeeeeesh!!! Where have I heard *that* one before?!

Ohhhhhhh YES! NOW I remember! There was once an entity, no less powerful than the United States Government itself (in fact, it WAS the Government) throughout the 1960's (and before) tried to put across the same scam. But even better than mere COMEX guarantees, these futures contracts were backed by the full faith and credit of the United States of America.

And you know what, folks?

That's right. They defaulted.

For those not quite up to speed on their history, the parallel I'm talking about here is the U.S. bond market, and the 1971-73 default on the Bretton Woods "Gold standard."

You see, if you'll allow me a bit of latitude, similar to the COMEX Gold futures contracts were the monetary bonds issued under the monetary system of that era. (Bretton Woods is where the post WWII treaty was held that established the international Gold-exchange standard in which the U.S. dollar was "guaranteed" to be exchangeable and as good as Gold at a rate of $35/oz.) As such, a person could plunk down a little bit of money (similar to a COMEX margin) to buy a bond -- a contract which promised (under the full faith and credit of the U.S.of A.) to give them future control of an even greater quantity of money/Gold. (That quantity being the principle PLUS interest, paid out in a schedule according to the terms of the bond contract.)

I submit to you, if the U.S. government can thumb its nose at contract participants no less prestigious and influential than its international trading partners (among others,) then it takes no stretch of the imagination to see COMEX doing the same to you under very similar circumstances, that being a crisis of confidence in the deliverable good of all those contract thingies.

And for those obstinate folks who think that a COMEX fallback plan of "cash settlement" is good enough to make the Long Gold contract worth their while/risk, listen to me now and do yourself this favor of FULL consideration. Those market participants in the wide world (yes, the grown-ups wearing the long pants) who have no faith in the dollar will short the dollar outright as a pure currency play. They won't piss away their resources through this pathetic little Exchange -- expressing their expectation of dollar demise through plunking down margin money on Long positions in COMEX Gold futures contracts. They simply don't play that way.

Yes, there are exceptions, but these exceptions don't set the trend, and the prevailing trend is for Gold paper -- Gold contracts backed by ANYBODY regardless of size or power -- to default and to diminish to the intrinsic value of the paper they are written on.

So why DIDN'T I plunk down my big fat wad of cash on margins for a bunch of COMEX Shorts?

Because there's a curious feature about your own money -- you can only spend it once. Given one alternative or the other, I decided it would be most beneficial to forego each payment of an initial Short margin for an outright purchase of 4 ounces of real Gold.

I can't say with any certainty when it will happen, but when the contract market does go into default, neither the Short side nor the Long side will benefit from the outcome. The way I figure it, with my latest tranche of spendable cash, I would be better off with an additional 40 ounces of Gold in my vault than holding ten Intrinsically Paper COMEX Gold contracts, be they Short OR Long!

Protest if you must, Mister Small Pants. The lesson of 1971 is apparently too big for you to fathom... "A problem for others," perhaps you'll say, one that only afflicts sailors who allow themselves to foolishly drift past the clear warning signs too close to the edge of the flat earth. You, of course, will surely *know* when to turn back.

The world is round, my friend... and we've been this way before.

Real Gold. Get you some. --- Aristotle

Black BladePension Plunge #798867/4/02; 00:41:43


What horrified some people most about the Enron Corp. collapse was the way its employees' retirement accounts got wiped out. The increasingly popular 401(k) is a pension plan in which employees are responsible for investing a tax-sheltered portion of their earnings and employers kick in matching funds or stock. In the booming 1990s, millions came to see their 401(k) plans as perpetual wealth-spinners.

They're anything but, say former BusinessWeek chief economist William Wolman and Anne Colamosca in The Great 401(k) Hoax. They argue that Americans have been hoodwinked by corporations and Wall Street into believing that investing savings in stocks will guarantee income enough for a comfortable retirement. But even at the end of the '90s, a decade in which stock prices quintupled, the average 401(k) account held just $46,740.

Worse, the authors say, there's strong evidence that stock market returns will probably average less than 2% a year throughout the first decade of the 21st century. They draw parallels to market bubbles that peaked in 1901, 1929, and 1966 and were followed by years of declining or stagnating stock prices.

Snippit: Better not get off the treadmill just yet. We will see many more retirements plans blow up. With nearly $7 Trillion of wealth gone to "money heaven", many have seen their hopes and dreams for a cozy retirement crushed and their finances destroyed beyond repair. This story is far from over. More wealth will be vaporized to "money heaven" before this "New Depression" wraps up.

steadythe return of the bi-metalic monetarysystem#798877/4/02; 00:50:16

see link for the rest of the story.....

Copyright 2002 J.N. Tlaga

By defeating France in early summer of 1940, Nazi Germany acquired momentary window of opportunity to defeat England too, depending solely on Luftwaffe's ability to destroy Royal Air Force before the autumn storms would make landing across the English Channel impossible. But when relentless raids on RAF airfields brought Luftwaffe dangerously close to accomplishing this goal, Winston Churchill erased the German edge by ordering RAF to bomb civilian targets in Berlin. Enraged by this provocation, Adolf Hitler ordered around-the-clock bombardment of London in response, and thus RAF's time to breathe and England's ultimate victory in the Second World War were won by focusing foe's attention on the wrong target.

Why this masterful maneuver of England's most illustrious leader never found its way into history books? In order not to enlighten the masses that great powers and numbers, which are difficult to defeat by outright destruction, are easily thwarted by way of distraction. Distraction is the ultimate weapon of war and the ultimate instrument of politico-economic control. How does the fiat money elite, whose entire membership would fit into an opera house, manage to keep the six billion people of the planet Earth in their present state of subjugation? By keeping them distracted!

It would not serve any good purpose to receive Judge Lindsay's decision of March 26, 2002 in Howe vs BIS with anything but magnanimity. Merriam-Webster's Dictionary defines magnanimity as "loftiness of spirit enabling one to bear trouble calmly, to disdain meanness and pettiness, and to display a noble generosity".

In this spirit we should have no difficulties to grasp that when Judge Lindsay upheld the sovereign immunity of gold price manipulators, he in effect said that the proper remedy of the people aggrieved by such misdeeds lay not at law but in the realm of politics. Translated into colloquial format, the underlying message of his decision reads:

"You the people should not try to force administrative officials to correct their discretionary policies by suing them. Such an approach in effect merges the administrative branch of the government into judiciary one, and forces the judges to second-guess administrative decisions rather than to interpret the law. Because you have the power to elect public officials, you should not ask me, a trial judge, to tell them what to do; if you are not happy with their policy, you should throw them out of their offices in the next elections instead. And if you are unable or unwilling to do it, you deserve what you are getting. Don't ask me to pick up chestnuts from the open fire for you! Put your own fingers at risk!"

In this generous interpretation, Judge Lindsay's decision means that our attention should be focused on electing honest-money President and honest-money Congress, and we should allow no one to distract us from this objective, because any change of direction will in the end be like targeting London instead of RAF airbases.

Most emphatically, no effort should be made to relitigate gold price manipulation as a class action of gold mining companies against bullion banks, because two more years down this road, in the election year 2004, sovereign immunity will be invoked again. What the bullion banks need to do to avail themselves protection of the sovereign immunity veil all over again is to tell the truth:

"We are manipulating the price of gold upon request of Secretary of the Treasury and of the Chairman of the Federal Reserve Board as their agents and assigns, we are merely executing the policy of the President of the United States."

It were not the central banks that were drawn into gold-carry trade in order to save the leading bullion banks from their folly that brought them to the edge of the abyss - as an apocryphal or deliberately deceptive statement of Edward A. J. George, Governor of the Bank of England, tends to suggest. It were the bullion banks that were drawn into gold-carry trade by the central banks to execute a global policy decision to make the world safer for the fiat money regime. The fact, that the blueprint of this policy was "sold" in 1992 to then Governor of the State of Arkansas by then Co-Senior Partner and Co-Chairman of Goldman Sachs during a dinner meeting in New York, does not undermine this conclusion. There are plenty of similar dinners in Presidential election years. This is how the winners of incoming elections are actually selected, their campaigns charted, and their policies conformed. The point is, if Mr Clinton would have decided to renege on his promise after becoming the President of the United States, and would have refused to commit the gold reserves of US Treasury to this "strong dollar" policy (a code name for gold price manipulation), the bullion banks would not have been in the position to launch this policy on their own.

To be sure, every player in the "strong dollar" game always had his own ax or two to grind, but the fundamental purpose of the gold price manipulation has been and is to save the fiat dollar regime by converting it into trilateral euro-dollar-yen regime. Creating the source of cheap capital in the form of gold-carry trade to finance hedge funds operations was not the primary purpose; yen-carry trade was already supplying much more than gold-carry trade could ever hope to supply. The specter of collapse of the likes of Goldman Sachs would require no greater attention than actual collapse of Barring Brothers required. And LTCM was bailed out not because its insolvency would destroy world finances, but because its insolvency would expose the fact that central banks gold (and US Treasury's gold) was not being lent into gold-carry trade but outrightly sold in exchange for US Treasury securities.

In EURO AND GOLD PRICE MANIPULATION, PART II, I rushed to judgment that the probable purpose of sudden switch from de facto pegged gold price of $384 in 1995 to the suppression of the price of gold from early 1996 on was "to throw monkey wrench into development of euro". Obviously, I was wrong. The purpose was exactly opposite. It was to assist euro rather than to sabotage it.

Even though launching of euro would in the end displace hundreds of billions of Eurodollars, strategically, the fiat euro is the fiat dollar's natural ally, and the Anglo-American establishment, sitting on top of the world, has no choice but to upgrade the fiat dollar regime to euro-dollar-yen regime. The myth of euro's competition is being recycled for usual disinformation purposes to make the average Joe and Jane completely unaware of what is going on until it will be too late for their voting power to do anything about it.

Anglo-American establishment's imperial control of the world rests on the proposition that the world is ruled by those who buy, not those who sell. Anyone anywhere can always make cars as good as or better than General Motors, and anyone anywhere will always conform to the will of those who wield the power to buy. Herein lies raison d'etre of the Bank of England and its American subsidiary, the Federal Reserve System: without God-like power to create the world money out of thin air, the power to buy is naturally limited by the power to earn. This means that whoever will stay in control of the world fiat currency system long enough, will in the end own the planet Earth. Ever since 1717, England's elite has been driven and possessed by this thought alone. See: GOLD STANDARD = FIAT IN DISGUISE.

pluss the link to the rest of his work

AristotleIndependence Day!#798887/4/02; 00:52:11

A day for hammocks and beer, in peaceful repose with the knowledge that financial independence can be yours, too, for the straightforward price of buying personal property upon the Sovereign Isle of Gold Ownership.

Get you some. (And enjoy your only (hopefully "only" -- unless your second home is a diamond-shaped stadium) hotdog sandwich of the year... with lots golden mustard. A must!!!) --- Aristotle

Huh? Oh, nothing against 'dog sandwiches, it's just that you'll want to live a long healthy life to enjoy spending your Golden fortune. Keeling over suddenly simply will not do!

steadymore foreclosures#798897/4/02; 01:12:32

Denver-Area Foreclosures
Go Through The Roof
Metro-area home foreclosures are headed for their highest level in 11 years, as the battered economy leads to a huge spike in homeowners defaulting on mortgages in the first half of the year.
got gold, give it a silver lining!



Prior to the year 2000 the world's Liberals were ever so smug about Zimbabwe and South Africa. They pointed their fingers at us whites in Africa and smugly told us that our worst fears had never been realised. Neither Zimbabwe nor South Africa had collapsed as we had said it would. We looked like fools, and those haughty liberals mocked us. We whites, having lost military and political power were trying to exist under regimes hostile to us, and so we just said nothing.

What I am about to tell you has never, to my knowledge, been written about anywhere. The blacks here have long suspected it, but no whites have ever come forth to openly talk about how we work against them. Let me tell you the real reason why Zimbabwe lasted as long as it did, and why South Africa and Namibia have not yet collapsed.

Black Blade: An interesting take from a former Rhodesian and current South African on the state of economic affairs both Zim and SA. For anyone concerned about investment in South Africa and the possibility of government intervention in the Gold mining business, this article may provide a little insight.

The CoinGuyAristotle...Felt a crack,But will take a step Forward in Faith and Truth#798917/4/02; 02:28:21


Your response seemed straight from the heart in your usual style. I felt it might be beneficial to force a foot forward at this point. So I shall step away from the trunk of this tree i grasp so tightly. I have sensed the urgency in your message from the beginning of your return, and I post my heart felt warnings that others may benefit to the degree of their understanding, or disagree as their viewpoint may govern their feelings.

As an oft called "Market Maker", I have been stepping out on those thin paper limbs for quite some time and counter-balancing those paper trades you speak not so highly of.

I may live quite the reticent lifestyle, but I feel it is necessary to forward this opinion.

To not take my words to heart could possibly be the workings of a fool, yet life is elusive, I may be the fool myself. I only wish there were answers to these questions so that we may know what the future holds now, but why would life be worth living? Although my account, as well as my feelings on the matter hold true.

After the rhetoric's of life. Let's not be subtle, frankly put, and yes this is only my seasoned opinion. Until there is a divergence in paper backing, I, as well as others will be on the other side of those paper trades "some" believe to be executing with precision; and folks I wish you the best of luck in your trading, but there is no secret. The money to be made from paper executioners is rather liquid and free. This is including your paper stocks, very liquid at this stage of the game, and making for a great play from both sides of the fence, but the long term wealth holding may be elusive?

Barring elusiveness, paper profits have governed our physical purchases for some time.

Yet, to switch roles, it is of my utmost and sincere opinion that scooping up the physical metal at this point is a gift from the one above, and there isn't any lyrical stance where i could govern my opinions or your oppositions to satisfaction. Other than knowing history, and living through it well.

Only for Aristotles sacrifice do I step out with conjecture. Yet, as a human being, i wish all the best of luck with all posters endeavors, whether they be small or large...Silver or Gold. If my opinion be known, I would prefer the sun of the Gods.

This may be thought provoking to some. I carry one post from FOA on my desk that is well worn and has been read repeatedly, well worn with my desire for a future holding of my family, as well as the vision of what this/our future holds. It is a simple, but succinct post, and was addressed to Cavan some time back. Gold Trail post #77, I hope none are taking this lightly?

In reflection of all the past posts read, I'm aware some will consider the consequences of a currency that has already been thrown to the wind. Yet I believe most Americans will readily go down with this sinking ship. Their collective arses aren't large enough to plug the gaping hole in this currency's underbelly.

The consequences of this argument is not readily absorbed, but it is not on the resting of your laurels to consider, for it is not the fault of your own management. Time is truly on the side of the simple man here, yet there should be no haste in his soul. For now is the time to gather his fruits for the future. May his transition be prosperous to his family, friends and relatives besides. There is no time to waste.

saddened, but hopeful...Ari you are truly a gem in the eyes of my next generations future.

I've tried to leave plenty of ammunition, but I hope all was spent. Those that are in this game as I, are not alone, and will not be alone as time goes forward...

Happy 4th of July, may we keep our independence well into the future,

The CoinGuy

P.S. Congratulations to all contest winners. Miner49er, I continue to learn from you with a steady beat, although my heart cannot condense your speech as well as my wisdom. Kudos my friend...

TopazFleshing out the upcoming Equities Megabubble.#798927/4/02; 04:33:34

This WILL BE my last post on the subject.....thanks one and all for tolerating

Righto, hidden amongst all the doom and gloom there lie some fundamental signposts that, when added to the following, provide for a fait accompli, lay down misere DJIA Megabull.....and by my estimation there's about 4 hrs trading to get set.
Basic Plusses:
Signs of growth returning.
Capital spending on the increase.
Profit margins widening.
Price is "reasonable" in the p/e arena. (I'll get to the "E" directly)

Then we have the Bond market Yields (dropping) and Truckloads of Cash taking it in the neck.

All the above can be further researched via my NEW good friends Abby Jo or Larry. (wink)
Now for the kicker:
The $US was decimated recently and now (with some help from the PoG) is once again strengthening.....guess when it was at or near it's lowest....30/06/02.....The LAST day of the Q2 reporting period.
A co-incidence? or a pre determined mechanism for bolstering "E" in the upcoming reporting season? Foreign earned Q2 income went UP by 10% Simplex and no doubt a lot more Complex.
Chow down on that one for a few minutes....

Next, it is NOT AN OPTION for the DJIA to be BELOW it's 911 level on the Anniversary of that fateful be so would send an unacceptable signal of capitulation to the ENEMY (whomever they are?) so all stops will be pulled to drive the Market to (at least) that height and - I'm thinking - a good bit higher.
The Patriotic thing to the upside, then, the INDEPENDENT thing to out on, or shortly before/after, 91102, race in to CPM and convert to Bullion, at, I'm guessing, VERY reasonable prices.

Good luck and Happy Independence Day one and all.

Golden BearAristotle (msg#: 79885)#798937/4/02; 04:48:39

Poignant message expressed clearly. Well done Sir Ari...

and let us not forget the deceit of 1934. Americans were ordered to surrender their bullion to the government, on which they received $20.67 per ounce. Once relieved of their wealth, FDR promptly raised the value to $35!

Thats right, the people were swindled to the tune of 75%! And if you could stomach that, then how about being forbidden to own this wealth of kings.

And the people have continued to allow themselves to be swindled through stealth - Inflation - to this day. Only a fool believes that contracts will be honoured in times of crisis.

In contrast, America was on a gold standard from 1834 to 1914 (except briefly from 1862-1879) where general price levels remained flat. Can you imagine what that's like..., gasoline stays the same price for over 50 years!
(information courtesy of Mr Lips' Gold Wars).

kludgePaper Avalanche / All#798947/4/02; 05:53:16

"To what end does it serve to ask questions to which the answers already exist other than to sew the seeds of doubt in the minds of those who have migrated to this webiste for the first time."

If a couple posts can sow the seeds of doubt about an item whose value has endured for thousands of years, then I'd think those swayed were foolish. Those that need constant reassurance that their decision to buy physical may not know their history very well. Maybe they were the weak longs?

I've taken some moderate heat here for my view that gold is a means to store and transfer wealth through the generations and ages. That it's the ultimate conserative, long term investment and not a get rich quick scheme. As DOWNUNDER stated, it's current price will fluctuate, but I believe that viewed in terms of decades or generations it's value, it's convertability to other "real goods", will probably average out in the future to what it has always been in the past. And I believe it's value today is not far off from that average, although perhaps a little low.

With the wealth of good info here, and the obvious intelligence of the posters, I am perplexed that many seem to look at gold with the same eyes as a stock investment. "ooh, it's up today" or "awww, it's down". Where's my calculator so that I can figure out my unrecognized gain/loss?

Guess this is my "newbie" question, considering all the havok that would be caused by the true currency of the ages suddenly skyrocketing against any/all fiat - why would anyone desire it - which many here seem to? Greed, to the extent that we care not about anyone or anything else so long as we're rich? At what fiat level would you sell?

Personally, I'd rather just hold it for my life and pass it to my kids - with full disclosure to the IRS, of course... It's a no-brainer in my view, thousands of years of stability isn't likely to change in my lifetime - but if it should and gold skyrockets, then I was wise, rolling in wealth, and have a clear conscience.

Happy and safe 4th to all.

LeSinDependence or Independence?#798957/4/02; 06:28:58

Unhappy Dependence Day to all US Government Citizens

Happy Independence Day to all Americans!


CoBra(too)Derivative Time Bomb looming - according to hedge fund manager#798967/4/02; 07:23:23

- And the biggest of all may well be the gold derivative games, played by "the too big to fail for too long to bail"?

We'll see - cb2

And have a great independence day USA.

YGMJuly 4th Email Message from GATA#798977/4/02; 07:33:29


The following email was sent last night to the GATA Strategic Army Command:


We only need one of these main stream buggers to shine the light on DRACULA.
When that happens and if we can cultivate an "industry crew" to ask some official questions to the Treasury and the Fed, the cabal is sunk.

Fineman is a "big league" guy who takes on these sort of things in his Newsweek feature stories. He may bite. He may not. If not, we move on. Chris and I have sent him missives and I spoke to him briefly. More importantly, the GATA Royal Air Force Pilot in our ARMY, the famed novelist Arthur Hailey, also has alerted Howard Fineman to the GATA story.

We are one BIG splash from winning the day. Let us attack like there is no tomorrow, especially with the Royal Bank of Canada report at our backs.

All the best and a happy 4th to all.


Hello Howard again,

This is Bill Murphy, chairman of the Gold Anti-Trust Action Committee (GATA). Yesterday, I did an interview with Jim Puplava, one of the most brilliant men on the financial scene (

If interested, you can read more on GATA and listen to the interview at:

As I mentioned to you in our brief conversation the other day, this gold mess dwarfs Watergate and Enron combined and I have THE PROOF to back it up. I have already been to Washington 5 times on this matter and met with the Speaker of House, Dennis Hastert, and James Saxton, who was chairman of the House Joint Economic Committee. If you are interested in JUST reviewing what evidence GATA has of the biggest fraud/scandals in the history of our great country, please let me know. I could be at your office in a heartbeat, with all of GATA's proof of the manipulation of the gold price laid out at your disposal.

I look forward to hearing from you.

All the best,

Bill Murphy

*** Howard Fineman can be contacted at....
This email address is being protected from spambots. You need JavaScript enabled to view it.

"GO GATA" "GO ARMY".......Email Mr. Fineman....YGM

**Again "Happy July 4th" to all my American Friends...Ken R.

Black BladeTice on CNBC#798987/4/02; 08:02:56

For anyone interested, David Tice of Prudent Bear Fund and Gold Bull is on CNBC. Should be interesting.

- Black Blade

WaveriderUSAGOLD#798997/4/02; 08:07:02

My apologies for not acknowledging the French Angel earlier, but I have been in transit and am writing from Zurich.

Thank you very much...I am both humbled and honoured. A special thank you to Gandalf for all your work in making the competition possible, and to USAGold for hosting it. Thank you Michael. I think that by the time I return home from Switzerland I shall have a very special parcel waiting for me.

Also congratulations to all of the other winners and to everyone who entered. What a fun event to participate in. Thank you again USAGOLD. Cheers,


YGMA Preview of the Future.....#799007/4/02; 08:54:11,1299,DRMN_414_1242052,00.html


Foreclosures soar
Weak economy could spur highest level in 11 years

By John Rebchook, Rocky Mountain News
July 2, 2002

Metro-area home foreclosures are headed for their highest level in 11 years, as the battered economy leads to a huge spike in homeowners defaulting on mortgages in the first half of the year.

Foreclosures rose by 53.7 percent in the first six months of the year, compared with the same period in 2001, assuming that Denver and Jefferson counties continue the same pace of previous months. Those two counties have not tallied their foreclosures through June.

Adams, Arapahoe, Boulder, Broomfield and Douglas counties report a total of 2,130 foreclosures in the first half of the year, compared with 1,365 foreclosures through June of last year, a 57 percent increase.

Toss in expected foreclosures from Denver and Jefferson counties and the number in the seven-county region rises to more than 3,500 through June of this year, compared with 2,306 in the first half of 2001.

That would be the most yearly foreclosures since 5,379 in 1992.

Whatever the final number, the trend is clear: Foreclosures are going through the roof.

Cont'd @ Link....

sector@ Aristotle COMEX Default? But...But...But#799017/4/02; 09:53:42

There are allot of "Buts" in COMEX paper

With $71 Billion in gold derivatives. US banks are as strung out as cokeheads. They have converted their real gold or the Treasury's real gold into paper and there it is...a sitting duck...way underwater.

As for specs thinking they can get their gold back from the COMEX "Warehouses"? This bullion is the inventory of individual corporations and people who KNOW the value of gold and they most certainly would NOT give it up in any emergency...which would be the case during very high COMEX volatility.

So...should there be a squeeze, COMEX will default plain and simple and the contract holders will get nada except FRNs.

The real deal is the metal, the beautiful metal. It's the most prime undeveloped real estate one can ever find. It is a shield in times of social unrest.

BTW predicting unrest as a result of trillions in financial losses is easy. The hard part is getting up off one's duff and actually painting a CLEAR picture of the future. We don't need a n ME war to upset things. We don't need heightened awareness of Greenspan's relentless inflation. We don't even need more political and ideological division nor do we need the potent catalyst of massive Wall Street and Washington corruption to trigger social unrest.

The falling stock market will do it that all by itself. Pension funds will be decimated as a direct result of the SM fall and pensioners will develop that "Deer-in-the-headlights" look. Add a little more reality about their vanishing social security fund and voila! A CLEAR bleak future and the big blame game cranks UP. Vote the bums out? Citizens already know Washington is powerless.

Need more? How 'bout those Japanese? Wrecked banks and senior citizens who stand to be World-Class chumps in a "Government bailout"...$1.2 Trillion in their life savings confiscated for the "Good of the country" [Watch for preparations later this year].

COMEX default? Set your watch baby. Buy the popcorn,…pull up the chaise lounge. The warning clue is the departure of Wendy Gramm [CFTC] and her estimable husband, Senate Banking heavyweight, Phil Gramm [Who personally knows ALL about GoldGate]...gettin outa Dodge along with Minority Whip, J.C. Watts [R-OK].

They will shut off COMEX gold and silver when the heat gets up there around $ more trading. You want gold? Try Mumbai, Shanghai, London [Maybe], Tokyo [Perhaps] ...oh yeah Istanbul…you can pop over there and get all the gold you want. But don't expect to bring it back IN the US without hefty tariffs. As for the Treasury's gold bullion trade…it will dry up as the Treasury cuts overtime and goes on a two-and-a-half-day workweek.

Au-some(No Subject)#799027/4/02; 10:57:59

Happy Fourth!
Congrats to all winners...
And thanks to YGM for the Puplava/Murphy link. Check it out.

The TravelerZero hour may be sooner than you think#7990307/04/02; 11:22:27

Quotes by OPEC President Rilwanu Lukman from his opening remarks to the OPEC meeting in Vienna late last month as reported by Petroleum Finance Week.

"After a period of ascendancy stretching back years, it appears that the dollar is finally weakening vis-à-vis other leading currencies – notably the Euro and the Yen."

"For oil producers, it could easily mean a reduction in the real value of the revenue they receive from sales of petroleum on world markets."

OPEC sees the future of the dollar and the repercussions of its fall from grace. Do you?

Black BladeGold Talk on CNBC#7990407/04/02; 11:40:55

I see that there has been some talk of gold on CNBC today. Bob Pisani said he has had a lot of gold questions from the email today. The word is getting out.

BTW, the Daily Gold Market Report is updated with the gold market activity over the last 24 hours.

- Black Blade

Safe and happy 4th all...

Mr GreshamTopaz, CoinGuy, sector#7990507/04/02; 12:17:57

Topaz -- please don't take your contrarian's contrarian viewpoint away -- I need the regular corrective to help me "peek around the corner" at the opposition's next possible moves.

CoinGuy -- quite a post, and yes, that #77 is the keeper.

sector, sector, sector! Contest's over! No, actually -- a recitation like yours, done in a good rhythm, is like poetry, music. "prime undeveloped real estate" -- good! And as always, we need the contrast to the "Deer-in-the-headlights" majority around us. Because that is still the music the loudspeakers on the plaza are blasting out at all us proles. Keep on keepin' on.

In fact the danger of complacency occurred to me this A.M. in a new light -- focusing too much on our PM preps, what else is going bye-bye that we need to cover? I'll stop here, but it is obvious that the basic instincts of self-preservation have been lulled to sleep in those around us, and I hope it is not catching!

I get a feeling of "Oh no, not THAT again" but y'know, that 1998-99 period of Y2k prep was one of unusual clarity for me, as it seemed that the people I was hanging out with online were dissecting society and re-designing (an alternative future) from the ground up. A wealth of survival -- or call it "living well in hard times" -- info was collected and shared by all...

oops, gotta go. Reality beckons...

Troy BoyHappy fireworks day#7990607/04/02; 13:54:21

A hard hitting read for the day

While fireworks are sold legally in Florida, most counties, municipalities and incorporated zones ban the igniting of the fireworks with legal action against the law breaker. So while you are having fun tonight be careful.
I found the following document and thought I might pass it on as it reflects on the case of freedom in the US and what we celebrate today for, supposedly.


Issue 155 July 4, 2002


The best way to destroy the public's memory of an
important event is to make it into an American national

Every Christmas, Americans celebrate the arrival of a
bearded, red-suited Communist who looks suspiciously like
Karl Marx, and who gives presents to everyone, irrespective
of race, color, creed, or national origin. Parents tell
their children that only good little boys and girls are so
rewarded, but the kids catch on fast: they're going to get
some of the loot, no matter what. Also, they never think
that their share of the booty is fair. This prepares them
to be voters.

Then there is Easter, the celebration of a rabbit who,
for some unexplained reason, hides colored hard-boiled
chicken eggs in everyone's back yard and on the White
House's lawn.

On New Year's Day, people recover from hangovers by
watching the Rose Parade, a TV show so excruciatingly
boring that it looks as though it was produced by PBS with
a major government grant. (Note: it was to comment on the
Rose Parade that national TV networks first brought in
women to serve as "colorful" co-anchors, something for
which the original producers will answer for on judgment
day.) Later in the day, tens of millions of men watch
college football bowl games, most of which settle nothing,
but one of which unofficially determines which major team
was the best during the season -- an exclusively past-
oriented celebration for the new year.

On Thanksgiving Day, only those people give thanks
whose favorite college football team wins the annual Big
Game with the school's major rival.

On Presidents Day, we celebrate the birth of two men
with two things in common: they were born in February, and
they were twice elected President. Because we combine
their birthdays, we learn nothing about either of them.

On Labor Day, nobody works.

On Memorial Day, nobody remembers World War I.

Because there has been insufficient time to transform
the holiday into something else, Martin Luther King Day
still officially honors the birth of Michael King (aka
Martin Luther King, Jr.). About 80% of Americans do their
best to forget, and 10% -- immigrants -- never knew.

This brings me to the Fourth of July. There are no
Fourth of July parades on TV, or anywhere else, as far as I
know. I cannot remember any in my youth.

We have all heard the phrase, "a Fourth of July
oration." Maybe in my parents' day, or my grandparents'
day, but not in mine. I do not recall ever hearing a
single patriotic speech on the Fourth of July.

On July Fourth, we set off fireworks. But fireworks
have nothing to do with the great event of the Fourth of
July. Fireworks are associated with the national anthem,
which was composed for British War II (1812), not British
War I.

Public fireworks are almost always funded by tax
money, since there is no way to keep non-paying viewers
from watching. But as government expenditures go,
fireworks should be the model for all government
expenditures: only once a year, no full-time employees,
funded locally, benefits are not means-tested, access is
first come-first served, no politician gets any credit, no
mailing lists are involved, and Congress always shuts down
during the show.


Americans get most of their knowledge of history from

Think of the movies about the American Revolution that
were made in Hollywood's golden era. There was. . . .

I can't think of any.

There were a few swashbucklers that were set in the
late eighteenth century, but none of them is about
defending the traditional rights of Englishmen.

I don't count "Johnny Tremain," a 1957 Disney film
based on Catherine Drinker Bowen's novel. It was Hal
Stalmaster's first and last movie. He later decided --
wisely, I think -- that he could make more money as an
actors' agent than as an actor, especially since his
brother owns one of Hollywood's major casting agencies.
The movie isn't bad, but ultimately it was a "Luana Patten,
almost grown up" movie, which did not bode well for it.
(Miss Patten was Disney's late 1940's version of Shirley
Temple, except that she couldn't dance or sing.)

Of course, there is "The Patriot." It doesn't deal
with ideology. It's initially the story of a politically
uninvolved man who is trying to save his son from a
murderous Redcoat. A similar theme governs "Revolution,"
with Al Pacino. It is about a man who wanted no part of
the war, but whose son gets persuaded to sign up, so he
signs up to protect his son. His patriotism grows out of
the war experience. It does not precede it.

"The Last of the Mohicans" is about Mohicans. Its
soundtrack is more memorable than its script.

There are more movies about Wyatt Earp than about
Thomas Jefferson or George Washington.

Let's face it: movies about people who write with
quills don't make a lot of money. This is why there are
not many French Revolution movies, either.


For most Americans, the story of the American
Revolution is more like a series of museum displays with
toy soldiers than a series of events that grab our
collective imagination. Other than George Washington, the
most famous general of the American Revolution is Benedict
Arnold. In third place is Gentleman Johnny Burgoyne. He
was a Brit, and he is famous only because of "Gentleman."

In my library are boxes of microcards. Each card
contains tiny images of up to 200 pages. On these cards is
every document published in the United States from 1639 to
1811. Yet I rarely consult those cards. I have shelves of
books on the American Revolution. I rarely pull one of
them down and read it. I read McCullough's "John Adams,"
but so did a million other people -- or at least they
bought the book. Thirty years ago, I earned a Ph.D. with a
specialty in colonial American history, although my sub-
specialty was New England, 1630-1720, not the American
Revolution. But even for me, the events and the issues of
1776 have faded. Think of the average American high school
graduate, whose history class spent two weeks on the
American Revolution two decades ago.

There was a slogan: "No taxation without
representation." How did that slogan turn out? In 1776,
there was no income tax. So, we got our representation,
but taxes today are at 40% of our income. Washington
extracts 25% of the nation's output. In 1776, taxes
imposed by the British were in the range of 1% in the
North, and possibly 3% in the South. I'm ready to make a
deal: I'll give up being represented in Washington, but
I'll get to keep 74% of my income. I'll work out
something else with state and local politicians. Just get
Washington out of my pocket.

Jefferson put these words into the Declaration of

He has erected a multitude of New Offices, and
sent hither swarms of Officers to harrass our
people, and eat out their substance.

He had no idea. Not counting troops, who were here to
defend the Western territory from the French after 1763,
the number of British officials was probably well under a
thousand. They resided mainly in port cities, where they
collected customs (import taxes): Boston, New York,
Philadelphia, and Charleston. The average American had
never met a British official in 1776.

By any modern standard, in any nation, what Jefferson
wrote in the Declaration to prove the tyranny of King
George III would be regarded by voters today as a
libertarian revolution beyond the dreams of any elected
politician, including Ron Paul. Voters would
unquestionably destroy the political career of anyone who
would call for the restoration of King George's tyranny,
which voters would see as the destruction of their economic
security, which they believe is provided only by
politicians and each other's tax money.

I have therefore revised the Declaration of
Independence, in order to make it conform to the prevailing
American view of liberty and justice for all. You may read
my revision here:

This is why the documents of the American Revolution
make no sense to us. We read the words and marvel at the
courage of those who risked their lives, fortunes and
sacred honor by signing the Declaration. But we cannot
really understand why they did it. We live under a self-
imposed tyranny so vast, so all-encompassing by the
standards of 18th-century British politics, that we cannot
imagine risking everything we own in order to throw off the
level of government interference suffered by the average
American businessman in 1776, let alone the average farmer.

If we could start politically where the Continental
Congress started in 1775, we would call home the members of
that Congress. We would regard as crazy anyone who was
willing to risk a war of secession for the sake of throwing
off an import tax system that imposed a 1% burden on our

The Declaration of Independence points a finger at us,
and shouts from the grave on behalf of the 56 signers:
"What have you done? What have you surrendered in our
name? What, in the name of Nature and Nature's God, do you
people think liberty is all about?"

We have no clue. American voters surrender more
liberty in one session of Congress than the colonists
surrendered to the British crown/Parliament from 1700 to

We do not read the documents of the American
Revolution. They make us uneasy and even guilty when we
understand them, and most of the time, we do not understand
them. They use language that is above us. The common
discourse of American politics in 1776 was beyond what most
university faculty members are capable of understanding.

You think I'm exaggerating. I'm not. My friend
Bertel Sparks used to teach in the Duke University Law
School. Every year, he conducted an experiment. He wanted
to put his first year law students -- among the cream of
the crop of American college graduates -- in their place.

He assigned an extract from Blackstone's Commentaries
on the Laws of England. This was the most important legal
document of the American Revolution era. It was written in
the 1760's. Every American lawyer read all four volumes.
It was read by American lawyers for a generation after the
Revolution. Sparks would assign a section on the rights of
property. He made them take it home, and then return to
class, ready to discuss it.

When they returned, they could not discuss it. The
language was too foreign. The concepts were too foreign.
The students were utterly confused.

Then Sparks would hold up the source of the extract
from Blackstone. The source was the Sixth McGuffey reader,
the most popular American public school textbook series of
the second half of the 19th century.

That put the kiddies in their place.

If you want to be put in your place, pick up a copy of
the Sixth McGuffey reader and try to read it.

Try to read the "Federalist Papers." These were
newspaper columns written to persuade the voters of New
York to elect representatives to ratify the Constitution.
These essays were political tracts. They were aimed at the
average voter. Few college graduates could get through
them today, so students are not asked to read them in their
American history course, which isn't required for
graduation anyway.

* * * * * * * * * * * * * * * * * * * * * * * * * * *


Our march into what Jefferson would have described as
tyranny has been a self-imposed march. Voters today would
be unwilling to go to war to restore the Declaration's
ideal of liberty. In fact, Americans would go to war to
keep from having the Declaration's ideal of liberty from
being imposed on us. By today's standards, King George III
was indeed a madman: a libertarian madman, a character out
of an Ayn Rand novel that never got published. On politics
and economics, Jefferson was madder than King George.

Forty years ago, Stan Freberg produced an LP record,
"Stan Freberg Presents the United States of America." It
was a musical. Freberg is one of America's great comic
geniuses, but he spent most of his career after 1962
creating advertisements.

In the musical, Thomas Jefferson comes to Ben Franklin
to persuade him to sign the Declaration. Franklin reads it
over briefly. Then he refuses to sign. Why not? asks
Jefferson. "It sounds a little pinko to me," Franklin
replies. Also, there was the question of spelling.
Franklin asks: "Life, liberty, and the perfuit of

It was a funny skit, and the music was really good.
(The song for the first Thanksgiving, "Take an Indian to
Lunch," remains my favorite.) But "pinko," Jefferson
wasn't. Calling for secession was not the same as calling
for a social revolution. The revolutionaries were calling
for secession in the name of traditional rights of
Englishmen. They were calling for a reversal of a slow-
motion political revolution by the Parliament, an erosion
of political rights. They saw themselves as conservatives
involved in a counter-revolution.

They won the battle. We have lost the war.

Generation after generation, Americans have imposed
taxation with representation. We could use less taxation
and less representation. But voters believe in lots of
representation and lots of taxation to match. Voters elect
more politicians, who then hire far more officials, than
King George ever thought about sending to the colonies.

Voters send these politicians off to the various
capital cities with a mandate: "Bring more swag back home
than those other crooks extract from us." Voters hand a
credit card to their representatives and tell them: "Make
sure the bill that you send to us at the end of the year is
less than the value of the loot that you send to us." So,
the bills keep getting bigger. We think Garrison Keeler is
funny with his description of Lake Wobegon: "Where all the
children are above average." But we all want our elected
representatives to keep our tax bills below average.

Cartoonist Walt Kelly drew "Pogo" for decades. "Pogo"
was probably the most politically sophisticated of all
American comic strips, including "Doonesbury," although not
the funniest. Kelly immortalized a phrase, which he put
into the mouth of Pogo Possum: "We have met the enemy and
he is us." The statement rings true because it is true.
We did it to ourselves.

This is why the American Revolution seems like a
museum display. Our hearts may be with those men of old,
but our minds are not. We live in a fundamentally
different world. Europe is on the far side of Marx and
Engels, while we are on the far side of Wilson and

My professor, Robert Nisbet, remarked in an
autobiographical passage in one of his books that when he
was born, in 1913, the only contact that most Americans had
with the Federal Government was the Post Office. It was in
that year that the first income tax forms were mailed out.
Take a look at the original Form 1040. Consider that the
average American family in 1913 earned less than $1,000 a
year. Then look at the tax rates.

We say that we want our high school graduates to be
familiar with American history. But do we? Really? The
history of America is the story of our surrender to a
philosophy of government that was alien to the West in
1776. What Jefferson regarded as a tyranny worth dying to
oppose, American voters today regard as a world so unjust
economically that no moral person would want to live in it,
let alone risk his life and wealth to obtain it for himself
and his posterity.

Voters get what they think they really want. When
things turn out badly, they re-think what it is that they
really want.

What the signers of the Declaration of Independence
really wanted was the right of self-government, beginning
with individual self-government. To achieve this, they
demanded the right of home rule politically. They fought a
war to attain this.

We have used home rule to place above us men whose
views of the rights of citizens Jefferson would have
regarded as beyond anything King George III dreamed of in
his madness.

Millions of voters who regard the present social and
political order as morally valid are not interested in
telling the story of the Revolution from the words of those
who began the fight. They elect Superintendants of Public
Instruction to hire teachers who also do not like that
story. The senior bureaucrats then ask these teachers to
abandon the teaching of the story of America prior to 1900,
and substitute social studies.

I am not exaggerating. The battle at the state level
to retain the teaching of American history prior to 1900
has been going on in Texas high schools for over a decade.
Texas public schools buy so many textbooks that what Texas
does -- along with New York, California, and Illinois --
determines what the rest of the nation's students will be
taught. The state of Texas allows a committee that
includes laymen to sit in judgment on the textbooks. This
is why Mel and Norma Gabler have been able to inflict so
much economic pain on liberal textbook publishers for the
last 25 years. But theirs is at best a holding action.


The story of America is the story of this nation's
self-imposed abandonment of the Declaration of
Independence. This is why the story of the Declaration is
rarely taught in school, and is taught badly when it is

If you want to re-gain your liberty, a good place to
begin is with the primary source documents of the world
that existed a century before the Declaration was written,
before the kings of England meddled very much in colonial
affairs. It is hard to believe, but Jefferson would have
been regarded as a little bit pinko in 1676.

That is the world we have lost. Fireworks won't get
it back.

Home schooling just might.

darkhorseDiscovery channel this afternoon#7990707/04/02; 14:16:23

Y'all oughta check out the show they're running about Fort Knox. It's somewhat long in the tooth, but listen to some of the crap they shell out about physical audits and who they "hired" to do them. I haven't heard this much crap coming out of my TV since the last presidential conventions. This should air again a couple times tonight and into early tomorrow morning.
USAGOLD / Centennial Precious Metals, Inc.Have a Happy 4th of July -- An Independence Day thought...#7990807/04/02; 15:34:37

Golden Goal

"For as long as cannons have thundered,
they have echoed
with the sound of men yearning for gold."

-- R. Strauss

Black BladeThe Barbarous Relic Files - Sea hunt for Cromwell's stolen gold #7990907/04/02; 16:20:29;$sessionid$3C2KF3IAALPCZQFIQMGSFFWAVCBQWIV0?xml=/news/2002/07/04/ntreas04.xml&sSheet=/news/2002/07/04/ixhome.html&_requestid=594727&_requestid=610359


A search for a fleet of 60 sunken Cromwellian ships carrying treasure worth up to £2.5 billion was launched in the River Tay yesterday. Scientists and bounty hunters hope to locate the fleet, which sank in stormy seas at the mouth of the river, after Oliver Cromwell's troops had sacked Dundee in 1651 and slaughtered 500 people.

Historic documents show that the ships were laden with the treasures of wealthy families from Angus, Fife, Perthshire and Edinburgh, which had been taken to Dundee for safekeeping. Yesterday the Coventry-based diving firm of Subsea Explorer began a 10-week search for the cache, which has been lying at the bottom of the Tay for more than 350 years.

Ornamental plates, gold and silver coins and religious artefacts plundered from churches and monasteries all over Scotland are believed to make up the riches on the seabed. General Monck's army devastated Dundee as part of Cromwell's campaign to suppress Royalist support in Dundee, Aberdeen and Stirling.

Black Blade: This appears to be quite an effort over a few "barbarous relics". Hmmm…

Black BladeNewmont predicts gold in multi-year uptrend#7991007/04/02; 16:36:15{6B773E44-BD86-478B-818F-FE83928A3145}

Newmont predicts gold in multi-year uptrend
U.S. dollar decline, trade deficit drive appreciation


MONTREAL - Pierre Lassonde, president of Newmont Mining Corp., the world's biggest gold miner, said yesterday the metal is in a "multi-year" uptrend because of weakness in the U.S. economy and political turmoil. "Gold at around US$320 an ounce is already at a five-year high with the U.S. current account deficit running at an unsustainable 5% of gross domestic product and a 10% decline in the U.S. dollar," he said in an interview before receiving the Ecole Polytechnique's 24th Prix Mérite for professional excellence.

"I base my prediction on fundamentals and it'll take two years to wring the excesses out of the U.S. system," said Mr. Lassonde, co-founder of Franco-Nevada Mining Corp. Ltd. and former manager of two successful gold funds. "There are more WorldComs to come." The U.S. needs a US$1.3-billion daily inflow of foreign currencies to maintain its former exchange rate but is getting only half that with the collapsing stock market, economic uncertainty, rock-bottom interest rates and an international flight to bullion, he said.

Black Blade: He also states that the increasing money supply will result in high rates of inflation. I agree that we are in a long term trend of higher gold prices. We may find some short term resistance as bankers and fund managers desperately search for a way out of the derivatives hole they dug for themselves.

Mr GreshamHoly Gibberish Batman!#7991107/04/02; 17:17:00

Troy Boy -- Thanks -- GN really hit it today. The big big BIG picture. Battle won; war lost. Founding Fathers have been sold out. No reason why the biggest Empire on earth would not also contain the most corruption, veiled of course by the finest rhetoric ever deployable in its service. Conduct the rest of your life accordingly...

Did Rumsfeld really say this? (as quoted by Bill Bonner): Donald Rumsfeld reflects on the WAT: "There are no
knowns," said the Secretary of Defense. "There are
things we know that we know. There are known unknowns,
that is to say there are things we now know we don't
know. But there are also unknown unknowns, things we do
not know we don't know."

We are truly through the Looking Glass -- and not in Kansas anymore, either. (But then, I'd say, "destroying the village" -- in Vietnam -- "in order to save it" was pretty far gone, too.) Idiots with guns -- no wonder Gladiator was such a hit -- Man In Combat has comparatively looked pretty pathetic since gunpowder arrived.

Bonner continues: "The people of Kakarak rediscovered a "known" a couple of days ago: a bomb dropped from an American warplane into a wedding party does a lot of damage. Le Monde reports as many as 40 people killed.

"*** What will happen next? What unknown unknown unknowns
await the unwary? Will the gods look with favor on
people who drop bombs on nuptial ceremonies? ..."

Was Osama's name on the invite list, d'ya think? (What a tip-off!)

What was ANYBODY thinking?

Hmmmm...I smell BOB-e-que, comin' through my window!

misetichECB Duisenberg: No Discussion of Correct Size of FX/Gold Rsvs#7991207/04/02; 18:07:55

Full article - subscription

ECB Duisenberg: No Discussion of Correct Size of FX/Gold Rsvs> Jul 4 / 9:32 EDT

LUXEMBOURG (MktNews) - ECB President Wim Duisenberg said Thursday
there is currently no discussion concerning the appropriate size of
foreign currency and gold reserves in the euro-system.

Asked at the press conference following the ECB's governing council
meeting how much foreign currency and gold a strong euro currency
requires, Duisenberg said the euro system contained enough foreign
currency reserves to cope with "any disaster."

"Inside the euro-system, there is no discussion and there can also
be no conclusion about what precisely should be the appropriate size of
the reserves of the euro system," Duisenberg said.

"We are in the happy position that the euro system contains or
holds so much foreign currency reserves that it will at all times be
equipped to meet any disaster which might loom over the horizon.

"The holdings are no prohibition for whatever action we might want
to take," he said.

Duisenberg noted the foreign currency and gold reserves of the euro
system are "inherited from the past, sometimes during hundreds of
years," he said.

--Frankfurt Newsroom. Tel: +49-69-720-142 Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

[TOPICS: M$$EC$,MT$$$$,M$X$$$,M$$FX$]


Duisenberg said the euro system contained enough foreign
currency reserves to cope with "any disaster." -Duisenberg noted the foreign currency and gold reserves of the euro
system are "inherited from the past, sometimes during hundreds of years," he said

Euro system has gold to cope with "any disaster" - do you?

Black BladeMore Wall Street Jobs Threatened#7991307/04/02; 18:29:28


NEW YORK (Reuters) - Wall Street firms have pinned their hopes on a stock market rebound to boost business, but they could end up cutting thousands more jobs if things don't get better.Major U.S. stock gauges are at multiyear lows amid high-profile accounting scandals, corporate profit worries and distrust of Wall Street itself. Still, even after a vicious series of layoffs, there are 118,000 more jobs on Wall Street today than five years ago.

Black Blade: It looks a lot like there is plenty of fat to trim on Wall Street. There's just way too many nonessential bankers and brokers. BTW, with online investing who the hell needs a broker these days? Arn't they redundant?

sectorLA Airport Fatal Ticket Counter Attack..Israeli El Al was the target... from; 18:34:09

...the dead shooter was a 52 year old arab

Yakov Aminov, 46, and 20-year Old Ground Hostess –
Both from Los Angeles – Died in Shooting
Attack Thursday at El Al Ticket Counter of
Los Angeles Airport

The Gunman Described as Arab Aged 52
Was Shot Dead by El Al Security Guards
Haim Sapir, Head of El Al Security, Sustained
Stab Wounds When He Tackled Gunman

Six More Wounded from Line Waiting to Board
El Al 106 to Tel Aviv Via Toronto

FBI Takes over Investigation, Holds One or Two Suspects,
Declines to Ascribe Attack to Terrorists

Israeli Official Spokesmen Insist This Was Act of Terror

In Separate Incident Thursday,
Pilot of El Al Flight 615 from Tel Aviv to Moscow
Reports Ground-to-Air Missile Shooting Past
Right Side of His Plane and Bright Flash
Plane Landed Safely in Moscow
Note the part where the FBI declines to link the attack to terrorists...the most chilling part of the story.

Black BladeFour convicted of armed robbery have their hands and legs amputated.#7991507/04/02; 18:40:44


CAIRO, Egypt (AP) -- Libyan authorities have amputated the right hands and left legs of four armed robbers in accordance with Islamic law, Libyan radio reported Thursday. The four men had been convicted of robbing a Chinese oil exploration company in the district of Muradah, 750 kilometers (470 miles) southeast of the Libyan capital of Tripoli, on April 30. They assaulted members of the company's personnel, fired shots to frighten them and stole vehicles, telecommunications sets, food and fuel, the state radio said in a report monitored by the British Broadcasting Corp.

Black Blade: Well at least it would solve the prison overcrowding problem. Something to consider – come now, lets give these guys a hand. Hmmm…

sectorIndia/Pak Tensions...On the Way Back Up#7991607/04/02; 18:59:59

Indian army warns of action if Pakistan does not end 'terrorism'

New Delhi rules out further de-escalation

NEW DELHI: India's army chief said on Thursday New Delhi would be left with no option but to take "some action" if Pakistan did not end cross-border infiltration into disputed Kashmir.

"My troops are there (at the border). Their troops are on the border," said General S Padmanabhan, as quoted by the Press Trust of India (PTI) news agency. "The reason for which we stood out there for six to seven months now is that we wanted this infiltration and cross-border terrorism to stop ... it continues. If it does not stop ... we have to take some action."
He said despite the promises made by President Pervez Musharraf to end infiltration, there had been five recently aborted attempts by militants to cross the Line of Control. According to army estimates, around 107 militants had sneaked into Kashmir in recent weeks, he added.

Try to see clearly into the future.

timbervisionBelgian, miner49'er, Aristotle, ....... et al#7991707/04/02; 23:49:14

In the provided link, the author seems to discount the inevitability of the eventual revaluation of gold. What do you think of his "In reality" points? What is he missing?

....""Not a few among us have been distracted into endless driving around intellectual cul-de-sac centered on the belief that gold price manipulation must inevitably collapse into a financial meltdown of infernal proportions, by which the market forces will ultimately reassert themselves and will thwart the machinations of the gold cabal when gold will hit again $800 per ounce or more. It is not the first time in history for the helpless to seek solace in the concept of inevitability of the triumph of good over evil. In reality: (1) central bank gold is sold outrightly for US Treasury securities which means that central banks will never call in their gold "loans"; (2) some trillion dollars were erased by NASDAQ bubble alone which means Regular Joes and Plain Janes simply cannot buy physical gold; (3) Congressionally injected compulsory cash settlement clauses into gold contracts will ratify already existing practice to allow orderly unwinding of the gold derivatives pyramids if those invested in paper gold would elect en masse to take physical delivery.

Similar innocence about the real state of affairs is present in the thought that derivative pyramid of notional value exceeding twenty trillion dollars accumulated by JP Morgan Chase must lead to cataclysmic downfall of the entire financial system. In reality, when divided by the outlandish leverage ratios (inadvertently disclosed by LTCM debacle) this score of trillions translates into few scores of billions, which can be settled with few clicks on Alan Greenspan's computer. (When pyramid of derivatives is netted, no one is "too big to bail"; whatever was done by a few clicks on Alan Greenspan's computer, can be undone by a few clicks on Alan Greenspan's computer.) Furthermore, derivatives written by JP Morgan Chase are mostly interest rate derivatives written from the position of advance notice of the interest rate changes, meaning, no risk is involved because the entire game is played under the roof of one and the same rigged casino.""....

Black BladeHedge fund manager warns of derivatives time bomb#799187/5/02; 00:19:19


Tony Dye, the fund manager dubbed Dr Doom for his pessimistic outlook on stock markets during the technology boom, warned yesterday of a "lurking time bomb" of creative accounting in the derivatives market. The value of contracts in the over-the-counter derivatives market has hit $110 trillion (£72 trillion), he said, with the market now worth three times the global economy.

Now an independent hedge fund manager, Mr Dye reckoned that the end of 10 years of a bull market in the 1990s was exposing "the aggressiveness of chief executives and accountants in creating fictitious numbers". He warned: "We're getting into that period when we'll see all the fraudulent practices come to the surface. I'd like to remind people that in 1991-1992, people didn't realise that Japanese banks were almost bankrupt."

Black Blade: I have already posted this, however, it is worth another look.

Black BladeArgentina Central Bank Says 50% of Banks May Close, Papers Say#799197/5/02; 00:30:04


Buenos Aires, July 4 (Bloomberg) -- Half of Argentina's 86 banks may shut or be merged during the next several months as the country attempts to rebuild its financial system after defaulting on debt and devaluing the peso, Central Bank President Aldo Pignanelli told newspapers.

Black Blade: Looks bad for Argentina. Many Argentines are going to lose everything. Definitely, get outta debt (and stay outta debt), stash enough cash for several months expenses, get Gold and Silver portfolio insurance, and start a nonperishable food and basic necessities storage program. If it can happen in the European-style oasis of Argentina, it can happen about anywhere. Next is Brazil, Colombia, Uruguay and Venezuela.

Black BladeWhy It's Not A Bottom#799207/5/02; 00:44:30


In our view the market is still along way from making a major bottom. Summing up our recent comments, here are our reasons.

Black Blade: Short concise to the point article. Exactly what I have been saying. The US markets have a very long way to go yet before hitting bottom. As I watched CNBC yesterday, I noticed that reporter Bob Pissani appeared to be beside himself wondering why almost all the emails were so pessimistic about the US economy and stocks in general, Nearly all the call in viewers were people who lost big in the market and who saw diminished returns on their 401K statements. This must have been a surprise to the trolls at CNBC as nearly every caller had no confidence in Wall Street. Bob Pissani also noted that there was a large number of people inquiring about Gold and Real estate as alternatives. Yet poor old Bob had no clue as to what to think. This market crash has much further to go.

Black BladeSour markets hit mutual funds hard - Net redemptions soar#799217/5/02; 00:53:50{CE0CB275-D26B-4240-B458-0A02A5C11D37}


The sour mood in the stock markets hit the country's mutual fund industry with a thud last month, as managers reported more than $1-billion in net redemptions -- a massive jump from May and one of the worst months on record. "It appears investors' lack of confidence in the markets is the major contributing factor to the declining sales," said Tom Hockin, IFIC president and chief executive. June marks the third straight month in which investors took more money out of mutual funds than they entrusted to them, and it represented a radical increase in the volume of redemptions, to the deepest level since at least the mid-1990s.

Black Blade: It is called "running for the exits". Investors have lost confidence in the alleged "economic recovery". When investors cash out their 401K investments into money market funds (actually many have), then we will eventually see the so-called capitulation of the investor. We have not even come close yet.

Black Blade401(k) proves risky business#799227/5/02; 01:02:23


Lots of new investment ideas hatched and thrived during the relentlessly bullish stock market of the past 20 years. Defined contribution retirement plans were near the top of the list. Unlike traditional pensions, these plans offer no guarantees on an eventual benefit. Some defined contribution plans are a supplemental benefit but many others are not.

Black Blade: Nothing in life is certain. That includes long term retirement investments. The only one you can count on in life is yourself.

Black BladeCrash Test #799237/5/02; 01:07:08


As markets dip to their lowest level in years, some wonder whether the crisis in corporate confidence could trigger a far more serious downturn.

Black Blade: Where there's one cockroach, there are definitely many more.

Black BladeNew SEC Order Forces CEOs to Swear Firm's Numbers are Correct#799247/5/02; 01:14:33

A new SEC order requires CEOs and finance chiefs to swear under oath in writing that the numbers in their companies' financial reports are correct, Friday's Wall Street Journal reported. In a little-noticed move amid the din of corporate-accounting scandals, the Securities and Exchange Commission last week implemented the order that could have major implications -- civil penalties or jail time -- for errant chief executive officers and chief financial officers at the nation's biggest companies. It also could lead to a spate of financial restatements in the next few weeks as companies scramble to review their recent results....

Black Blade: It appears that these charlatans wit the title CEO could do time if they follow in the footsteps of Ken Lay, Jeff Skilling, etc., as well they should.

Black Blade'Corporate America has been lying for years' #799257/5/02; 01:25:24,6903,746373,00.html

The victims: Disillusioned small investors are giving up on equities and turning to cash


The poisonous fallout from the WorldCom collapse will further undermine the confidence of millions of homeowners, pension savers and small-time share traders in a financial system already shaken by scandals. 'This time no one believes earnings. Corporate America has been lying for years.'

Black Blade: If you haven't already, bail out while you can. It will definitely get much worse. Go defensive until the carnage is over. These cockroaches are everywhere in American business. There will be more scandals – especially now that the SEC has required a review of corporate balance sheets and the "Big Five" (formerly "Big Five") accounting firms are less likely to cook the books in the current environment. It's going to get very ugly. Who can blame the small investor for making tracks with his cash? They are simply fed up. You know some of that cash will find its way to precious metals.

Black BladeAurionGold rejects Placer Dome bid#799267/5/02; 01:57:02


SYDNEY, July 5 (Reuters) - Takeover target AurionGold Ltd said on Friday it recommended shareholders reject a scrip takeover offer from Canada's Placer Dome Inc (Toronto:PDG.TO), saying the market continued to top Placer's bid by a large margin. "Each of your directors who has an interest in AurionGold shares intends to reject the offer, and does not intend to sell on market," chairman Dick Warburton said in a statement.

Black Blade: Jilted and left at the alter. These two mega hedgers were well suited to each other. Hmmm…

Black Blade"Scandal Of The Day" - Qwest Focus Of Criminal Probe#799277/5/02; 03:13:19

Just out on the wire is that Qwest Communications is the focus of an FBI led criminal probe. No details are released yet. This follows on news that SBC will pay a $27 million fine for cheating customers. Not a good day for telecoms.

Markets futures are screaming higher with the DOW up 100 points, Nasdaq up 15 and the S&P 500 up 11. However, the premarket action is extremely thin so it could change rapidly and violently before the open.

"Interesting Times"

- Black Blade

steadyNEWS MEDIA SILVER BLACKOUT! #7992807/05/02; 04:51:55

its kinda long but it does show the relationships . kinda like a chain of command for the oppression. interesting weekend reading material.

Be assured at the outset that the following report is far from complete; and that certain details not mentioned here are subject to being released at a future date, possibly at another website if appropriate. This is not a limitation on the part of Silver Investor; rather, at this time, the threshold of controversy needs to be expanded to a certain boundary and no further. Sorry to tantalize you! In case anyone has wondered---I have never functioned as an informal voice on behalf of any silver company, there is no editorial consultation; views expressed are those of private investor and concerned individual. For the time being, consider this as an introductory outline of subversion in the mass media concerning the precious metals markets, and what kind of noises we may expect to hear from these allegedly distinguished sources (the awards they have come from one another) as silver enters (visible) crisis phase in 2002 and triggers earthquakes and lightening also in gold and platinum. This subversion consists mainly in what they have failed to tell the public---that these markets are manipulated, and a crisis is unavoidable. What little is said about silver is mostly falsehoods---there are few new uses for silver, demand is falling, and the fundamentals are poor or weak.

Black Blade"Bone Pile" Grows#7992907/05/02; 06:37:41

Just over the wire - Unemployment for June grows to 5.9%. March and April revised downward to losses from positive job growth. This is definitely not good as the last couple of months show a continued trend of job losses. It is difficult to have job creation in a deepening recession. Now analysts (per CNBC) are calling for more job losses in the second half of the second half of the year.

- Black Blade

YGMLooks like a great day for the Cashing Out Crowd....#7993007/05/02; 08:30:26

Lots of Buyers 'Think' it's a Great Day Also....

Guess it just may be a buying day if you can outlive the BearMarket for possibly years to come. What a wild bunch investors are. Just as diverse in opinions as the 'Anal-ysts' they continue to feed and hang from....YGM

"Gold has no Opinion, just Reality of Sound Money"

goldquestStock Decline to Resume on Monday#7993107/05/02; 08:47:43

A bleak picture if you are not in PMs.
sectorIMF chief hints at action on the dollar...[A Gold Proxy]#7993207/05/02; 09:31:26

By Scheherazade Daneshkhu and Chris Giles in London
Published: July 4 2002 22:13 | Last Updated: July 4 2002 22:13

The International Monetary Fund could seek international co-ordination of exchange rates if nervousness in currency markets led to a run on the dollar, Horst Köhler, IMF managing director, signalled on Thursday.

In an interview with the Financial Times, Mr Köhler said he was cautious about advocating intervention but, if the dollar were to fall rapidly and in a disorderly fashion, "no intervention at all is not the right answer".

The dollar has fallen by 12 per cent against the euro since January, almost reaching parity last week. On Thursday, it rose slightly, ending European trading at $0.9793 to the euro.

But risks to the dollar continue as currency markets remain nervous about the state of the US economy and, in particular, the current account deficit.

The last time exchange rates were co-ordinated was in September 2000 when central bank intervention slowed the slide of the euro. The current US administration has been opposed to currency intervention, maintaining that the market should determine exchange rates. Japan has frequently intervened to weaken the yen.

The IMF supported intervention in the 1980s through the Plaza and Louvre international agreements but large-scale global currency management fell out of favour in the 1990s.

Another bluster from the IMF. After steam rolling Argentina they now set their sights on the currency markets.

Statements such as this are equivalent to those by Ernst Weltke of the Bundesbank that Germany will sell it's gold. Never mind that they have already sold it.

Though this release covers the $USD, it really is about gold and as such is another example of cabal weakness. I have been waiting for something like this as a CLEAR signal that the Russian gold "Ammo clip" has run out and now must be replaced by jawboning.

RobotGuyAlas! Forgive me for I have been on vacation.#7993307/05/02; 09:43:17

A close friend of mine from Italy was looking at a one ounce silver maple leaf I had sitting out, and I know he likes Canadian coins so I gave it to him. Low and behold it appears as if the silver maple leaf may wander right back to me!

Thank-you Gandalf for all of your hard work, and the panel of judges of which I wouldn't be paid to be a member. Your task was a gruelling one at best.

I can honestly say that I am honoured to be considered for such a prize.

Cogratulations all winners!!

I shall now return to the largest freshwater beach in all of the world and soak up more golden rays!



YGMNoteworthy.....Thanks (justingold.2)#7993407/05/02; 10:08:22

The World Gold Council, which sponsors gold-denominated bonds, is working on plans for an exchange-traded fund for the actual metal. If the council, a trade group, succeeds in navigating regulatory waters, investors would be able to buy gold in the shape of a security at any time during the U.S. market day.

del Nortegold and silver portfolio insurance#7993507/05/02; 10:29:46

Tell me about gold and silver portfolio insurance? How does it work? Who sell it? Recommended co.'s? How much is the coverage? Thanks. del Norte.
Gandalf the WhiteWELCOME Sir Del Norte ! (and now some suggestions)#7993607/05/02; 11:08:26

del Norte (07/05/02; 10:29:46MT - msg#: 79935)
gold and silver portfolio insurance
YES, USAGOLD/Centennial Precious Metals sells this type "insurance" !! This is not as you are thinking, BUT PHYSICAL inhand Gold and/or Silver coins and/or BULLION !!
Please stick around the TABLEROUND for a while and you will understand better why one needs such "portfolio insurance" !!! AND, if you desire referrences, ask anyone from Argentina or Turkey.

Chris PowellAnother analyst agrees that U.S. government is capping gold secretly#7993707/05/02; 11:18:30

Gold Stock Analyst's John Doody agrees that
the U.S. government is intervening surreptitiously
in the stock and gold markets:

To subscribe to GATA's dispatches
by email and get them immediately so
you don't have to go look for them,
send an email to:

This email address is being protected from spambots. You need JavaScript enabled to view it.

Mr Greshamsteady's link below#7993807/05/02; 12:05:28

detailing the media blackout on silver, and showing -- page after page after page -- the institutional and family links to the fortunes -- old and new -- and their control of media, banking, and many other industries.

My overwhelming impression is "What a pool of SHARKS the financial world is!", for us little guys to be swimming in. Yeah, we might have a nice day at the beach Saturday, and get eaten on Sunday. These people may nibble at each other once in awhile, but it's for sure the markets do not bend rules in OUR directions to save our paltry sums. No, when WE go down, we're OUT -- until the county tags our toe and puts us away.

Just that these last 10 years or so, a lot of little guys got to feel pretty big. They can't BEGIN to know the PIRATES (literally!) they've gotten themselves in with.

All the more reason to have your assets close at hand in a time of turmoil. Those other ones look like all risk -- and no reward.

YGMWorldCom Discussion Board#7993907/05/02; 13:46:56

Lurking like spys is a two way st....There's a discussion board for every soon to be bone pile Co out there and some of the posts are revealing......Have a great wkend all..YGM
HuascarThe spring is getting coiled#7994007/05/02; 13:51:27

OK, first post. I think the correction isn't over yet, but we're already past the halfway mark, and we're getting closer to it's end every day. If the XAU stays at 69, 65 or goes down to 60, who knows.... What I do know is that the lower it goes, the higher it will come back.

We are just experiencing an intermediate term correction. Gold in US$ peaked a month ago, but in Euros, it peaked in February, made a triple top through May, broke down big time during June, and may have started to consolidate.

I think watching the chart of gold in Euros is key here.

YGMHuascar (07/05/02; 13:51:27MT - msg#: 79940)#7994107/05/02; 14:02:32

"Welcome" to this fine but quiet (today) place.....

Sounds like you know your stuff...Keep em coming. We definately need more technical opinions around here.

YGMCalgary Stampede Time......#7994207/05/02; 14:13:33

Well, it's 80 above and I don't care about the 'Duck'
Got windows in my truck, and I'm off to the Rodeo!!!

Black BladeA Picture Is Worth A Thousand Words#7994307/05/02; 14:14:13

What is the state of the world's stock markets? - see link
Paper AvalanchePPT / ESF popped the clutch today#7994407/05/02; 14:19:02

painting the tape on low volume is not too hard to do when everyone is away on vacation.

If I were a betting man (and I am), I would bet that we are sub 9,000 again on the DOW within ten trading days. All of the foreigners who have been yanking their capital from US$ markets over the past few months and may have been out of the office today will no doubt see any spike as an opportunity.

Paper Avalanche - it's not just a handle, it's the mathematically inevtiable outcome of a debt based, fiat paper moeny system.

I tried to post this a few minutes ago, and magically as I was about to post this, my computer turned off. Hmmmmm.....

Black BladeIMF warns over dollar collapse#7994507/05/02; 14:36:03

IMF's Koehler: Guardian of global financial markets


The head of the International Monetary Fund, Horst Koehler, has warned that central banks worldwide might need to work together to prop up the US dollar.

Black Blade: That's right. We Americans need more intervention to prop up the US dollar so other countries can benefit. Sheesh.

kludgeWelcome#7994607/05/02; 14:43:36


Yes, welcome Huascar!

I too will enjoy reading any technical analysis you care to share, good or bad, short term or long term.


HenriTest?#7994707/05/02; 14:45:27

USAGOLD / Centennial Precious Metals, Inc.In bookstores for $14.95 (plus tax). Get it here for ONLY $5.95 ($3 postage)!#7994807/05/02; 14:52:24

The ABCs of Gold Investing

ABCs of Gold by MK"Without waxing philosophical, a few words are helpful concerning the mind-set with which you pursue your interest in gold ownership. Some enter the gold market to make a profit, others to hedge disaster, some to accomplish both. No matter into which category you fit, make sure you understand why you are going into the gold market. Convey that understanding to the individual with whom you are structuring your gold portfolio. The whys have quite a bit to do with what you end up owning.

"Frequently investors will say that any kind of gold will do because after all gold is gold, isn't it? This type of attitude has helped a great many coin shop owners unload unwanted inventory they hadn't been able to get rid of for years. This is probably a good deal for the coin dealer, but it could spell disaster for you. In the same vein, I have talked to hundreds, probably thousands, of investors in nearly a quarter century in the business. Quite often, potential investors have no more reason for buying gold than 'everybody else is doing it.'

"In Chapter 16 on portfolio planning, you will find some details on this important subject. For now, consider the inscription over the entrance to the temple of the ancient Delphic Oracle: 'Know Thyself.' Study. Read. Learn what's going on around you. Call a few gold firms and ask questions. There's nothing like conversation to stimulate thinking. Take time to lay a little groundwork. Then make your move. The political and economic situation being what it is, there is no better time to start than now. Know thyself -- your goals and needs -- and you will be a more confident, happier gold investor." (more)

Please Remember: It is your purchase from USAGOLD / Centennial Precious Metals that nourishes these pages.

TownCrierFed Stats -- money supply grows#7994907/05/02; 15:12:16

You can call these numbers "money" but you sure can't call it "wealth".


Gandalf the WhiteWELCOME Sir Huascar !! #7995007/05/02; 15:36:55

Huascar (07/05/02; 13:51:27MT - msg#: 79940)
The spring is getting coiled
OK, first post.
Looks as if you and the Hobbits are reading the same Crystal Ball ! They love to compare notes with people like you. Don't be a stranger to the FORUM now that you are here.
BTW that reminds me !! -- WHERE are you "The Stranger" ? LOST again ?

Paper AvalancheOff topic - a tribute to a truly inspirational man#7995107/05/02; 17:25:36

I was cooking some stir fry dinner when I heard the name Bill Porter as part of a promo for an upcoming movie to air on one of Ted Turner's stations (can't remember if TBS or TNT). In any event, for anyone who has not heard the Bill Porter story, he is one of the truly most inspirational men to have ever lived. If you are in sales, especially, as am I, you will appreciate the Bill Porter story. I was fortunate enough to have been taping a 20/20 story about five years ago when Hugh Downs and Barbara Walters were running the show. It was on that episode of 20/20 that they interviewed Bill Porter, a man who, despite a number of physical conditions that would otherwise encourage others to give up early in life, chose a profession, sales, where he had to overcome his physical impairments to walk from door to door to sell household goods. The Bill Porter story has inspired me the way no other story, or recount of the life of any other person alive today, has. About once a year, when I am ready to call it quits in sales (it is a grind), I put in the VCR tape of the Bill Porter story from that 20/20 episode and it does something to both make me appreciate the few talents that I do have as well as feel like a complete heel for complaining about my job.

I am not a sales man by nature, yet I am relatively successful in sales. This is not a result of any particular talent that I possess. The fact is that I possess few if any talents that make a sales person successful. Rather, I draw my energy to continue to pursue sales from the stories and admonitions of a few men who have lived before me or continue to be alive today. Among them I include:

Bill Porter - that I may never take for granted those few talents that I have, and to never let my lack of particular talents deter me from striving to succeed.

Rush Limbaugh - that I may always strive to achieve a level of excellence as can only be measured by goals that I have set for myself

Thomas Jefferson - to always recognize that eternal vigilence is the price of liberty

My dad - to always realize that nothing too good or too bad lasts too long and to treat every man with respect and dignity

To that end, I strongly encourage anyone who has ever faced any degree of adversity in their lives, whether in a sales position or not, to watch the Bill Porter story which is scheduled to air Sunday, July 14th at 8:00 pm EST on one of Ted's stations.

Have a terrific weekend.
Paper Avalanche

Paper AvalancheI found a link on google - Bill Porter#7995207/05/02; 17:34:20,5878,341694%7C3133%7C3195~,00.html

We are but hobbits following in the footsteps of giants on this forum. I am proud to acknowledge Bill Porter as a hobbit who has set a tremendous example for each and every one of us as to how we should set goals in our lives and never, ever retreat from doing what it takes to accomplish those goals despite what obstacles befall us before or after we embark on the journey to excellence.

My thanks to the forum for your indulgence in allowing me to post this.


sectorDavid Tice and His Latest Essay...A Classic#7995307/05/02; 19:16:42

The upshot has been an unprecedented explosion of non-productive debt, along with an underlying maladjusted economy with little capacity for generating sufficient cash flows when these speculative flows inevitably reverse.

Like Argentina, we see in the U.S. all the necessary ingredients for an inevitable run against U.S. financial claims. Again paralleling Argentina, debt growth has greatly surpassed GDP growth, while consumption and not true economic investment has been driving economic "output."
The Treasury's monthly report of "Foreign Purchases and Sales of U.S. Long-Term Securities" shows net monthly inflows into U.S. securities averaged $53.6 billion during the fourth quarter and $42 billion for all of 2001.

For the first two months of 2002, net flows have ebbed markedly to $14.6 billion. After being net monthly buyers of $12.7 billion in Treasuries during the fourth quarter, foreigners have turned sellers to the tune of $8.5 billion. During 2001, foreign-sourced purchases accounted for a monthly average of $13.8 billion of agency bonds and $19.7 billion of U.S. corporates.
As the legendary credit authority Henry Kaufman warned:

"The integrity of credit is being chipped away by a financial revolution that is helping to lower credit standards and muting the responsibilities of both debtors and creditors.
Derivative players that were selling default protection for pennies on the dollar (believing their derivative book was diversified, that only a fraction of industry debt would eventually default, and that recoveries from these limited number of bankruptcies would be significant) are now faced with a much different equation: a general industry collapse and the possibility of upwards of a dollar of loss on a dollar of insurance written (as opposed to pennies!). Credit loss models can be thrown out the window as potential losses quickly grow exponentially.
The ongoing collapse of the telecom/technology bubble will result in unprecedented credit losses. The Fed has responded aggressively to the bursting tech bubble by accommodating a much larger bubble.
We are witnessing a dysfunctional system having set course for a serious financial accident. The U.S. bubble economy requires continuing credit excess to sustain boom-time demand and to maintain inflated asset prices.
Here is the foundation of the coming gold bull market. There can be no escape for the foolish Fed…no out for the trapped Treasury...nor the impotent IMF.

Each time one feels a pang of doubt, let him or her return to this essay and reread it over and over again.

Mr GreshamMannfm11 sighting#7995407/05/02; 19:17:06

Always a good read...who's the other fan here -- OldYeller?

Off to get a coffee, and savor words of wisdom. Doug Noland should be along soon, too...

Mr GreshamUSAGOLD: Coin premium?#7995507/05/02; 19:25:09

Michael -- are there signs of a shortage beginning? I haven't watched coin premiums very seriously, and you're there everyday...
barnaclebob''High treason in the U.S. government'' #7995607/05/02; 20:26:15

They came for the "suspected" terrorists, and I didn't object -
For I wasn't a "suspected" terrorist;
They came for those of Middle Eastern descent, and I didn't object -
For I wasn't of Middle Eastern descent;
They came for the unpatriotic, and I didn't object -
For I was not unpatriotic;
They came for the dissenters and activists, and I didn't object -
For I wasn't a dissenter or an activist;
"They came for the Communists, and I didn't object -
For I wasn't a Communist;
They came for the Socialists, and I didn't object -
For I wasn't a Socialist;
They came for the labor leaders, and I didn't object -
For I wasn't a labor leader;
They came for the Jews, and I didn't object -
For I wasn't a Jew;
Then they came for me -
And there was no one left to object."

Paper AvalancheThis will put me first in line to the camps#7995707/05/02; 20:49:50

I do realize that this, and many forums, are actively monitored for various reasons by our good friends at the NSA, FBI, CIA, etc. However, I find it important to post the entirety of barnaclebob's previous post for the review of all who lurk or participate on this forum. See you at the camps:

By Doreen Miller Columnist (United States)

( – Q: Just who is a terrorist?
A: Anyone (non-U.S. citizen or U.S. citizen alike) Attorney General Ashcroft designates as one.

Q: On what evidence can Ashcroft designate someone as a terrorist?
A: Mere suspicion and hearsay.

Q: What legal rights and Constitutional protections does someone detained on the grounds of being a suspected terrorist have?
A: Next to none.

It may be difficult for some hard-core, patriotic Americans to believe the veracity of the preceding question and answer series, but the answers to the questions are based upon the implications and dangerous ramifications of the USA PATRIOT Act (USAPA) that was passed last October by so-called congressional representatives who never bothered to read or debate it.

It slipped through at the midnight hour under the cover of darkness, voted on by men and women engulfed in a terrifying atmosphere of shock, fear, mass media hysteria, and suspiciously targeted anthrax mailings.

U.S. government officials would have us believe that this 342-page, complexly nuanced document was allegedly crafted after September 11 in the time span of a little over a month. To accomplish this feat would have required the in-depth study of fifteen other lengthy acts and statutes which it modifies and amends.

The act's extremely clever yet highly misleading acronym USA PATRIOT, which stands for "Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism," is an obvious attempt to intimidate and brand as "unpatriotic" and treasonous anyone who might dare to question its alarmingly overreaching provisions.

In light of the egregious evisceration of the Bill of Rights that this law undertakes, those who blindly supported and signed this blatantly unconstitutional act into law should be collectively condemned and charged for high treason to the Constitution and the people of the United States of America.

Careful perusal of the USAPA reveals that it defiantly and maliciously tramples on:

The First Amendment - the people's right to exercise freedom of religion, speech and peaceful assembly "to petition the Government for a redress of grievances"
The Fourth Amendment - the right "to be secure in their persons, houses, papers and effects, against unreasonable searches and seizures" whereby warrants - only to be issued upon "probable cause" - must be specific as to place to be searched and persons or things to be seized
The Fifth, Sixth and Fourteenth amendments - which outline the right to due process - a trial by one's peers, to face one's accuser as well as view the evidence against oneself, and to have an attorney
The Eighth Amendment - which safeguards the people against excessive bale and fines, or cruel and unusual punishment
Under sections 411 and 802 in the USAPA, a terrorist is loosely defined as anyone being "a representative of a foreign terrorist organization, as designated by the Secretary of State," and domestically, anyone engaging in "activities that - involve acts dangerous to human life that are a violation of the criminal laws of the United States or of any state; APPEAR to be intended to intimidate or coerce a civilian population; TO INFLUENCE THE POLICY OF A GOVERNMENT BY INTIMIDATION OR COERCION..." [capitals mine]

The inclusion of the word "appear" leaves interpretation of the law wide open to subjectivity and personal whim, as anyone can rightfully claim something "appears" to be intended for a particular purpose. Note also that our first amendment right to gather in protest against what we may see as unjust government policies could easily fall under the concept of "influencing" government policy by "intimidation or coercion."

Anyone participating in activist groups such as Greenpeace, Earth Liberation Front, People for the Ethical Treatment of Animals, or in protests like the 1999 demonstration in Seattle against the WTO could find himself suddenly stripped of his rights by the simple act of being declared a "terrorist" in keeping with the definition of this law. Under section 803 of this Act, even the simple act of giving food or shelter to a friend who may have been involved in any of the aforementioned activities could, in turn, have you incriminated and branded as a "terrorist" as well.

The USA Patriot Act absolutely shreds to bits the fourth amendment. Section 213 permits so-called "sneak and peek" searches. Translated, that means the government has the right to go into your home while you are away, copy your hard drive, files, or whatever, gather and take any information or items they please without ever serving you notice since "the execution of a warrant may have adverse effect." They can then delay serving you notice for up to 90 days after the fact. These newfangled warrants can now be issued for a flimsy "reasonable cause," further undermining the much more difficult to achieve "probable cause" stipulation of the fourth amendment.

Sections 216, 217 and 218 allow for unrestricted wiretapping, the tracing and spying on email messages and internet activities of anyone anywhere in the USA without the need to obtain a court order as long as "the information likely to be obtained... is relevant to an ongoing criminal investigation." How nebulous can that get? A lawyer of any worth would be able to argue the "relevance" of anything to an unspecified "ongoing criminal investigation." Kiss your protection from "unreasonable searches" good-bye and say hello to Big Brother USA.

If you think this law applies only to foreign nationals, think again. José Padilla, although by no means a model U.S.-born citizen, had his civil rights stripped from him this past May just by Ashcroft's uttering the magic words, "enemy combatant" and "suspected terrorist." To this day, no solid evidence has been produced to substantiate Ashcroft's claims - neither bomb parts, nor bomb assembly instructions, nor any plans or maps of intended strike areas.

A "suspected terrorist," according to section 112, needs only to be "certified" by the Attorney General on "reasonable grounds" that he "believes" someone to be engaged in terrorist activities. Again, no solid evidence is required, only a belief or suspicion suffices.

Section 236A gives the Attorney General unprecedented powers untouchable by any court, whereby he may detain a suspect in increments of up to six months at a time if he believes the suspect's release would threaten national security, or the safety of the community or any person. "At the Attorney General's discretion" [read: personal whims], "NO court shall have jurisdiction to review, by habeas corpus, petition, or otherwise, any such action or decision." [capitals mine]

In other words, the Attorney General's word is sacrosanct! To give one man such grave and all-encompassing power over the fate of any other individual is akin to what happens in fascist police states, not in a free and openly democratic society.

Whatever happened to one's right to face one's accuser, to have a fair trial by one's peers, to be allowed to view the evidence against oneself, or to have an attorney?

Is it not cruel and unusual punishment to be denied your civil rights, to be considered guilty until you can "prove yourself innocent" - which is, in fact, very difficult to do - to be held in prison on "secret evidence" for months or years on end with no access to a lawyer and no chance of defending yourself against false and unfounded accusations?

I heard President Bush on the news a few weeks ago boasting that the U.S. has so far "captured and detained over 2,400 suspected terrorists." Yet, by most accounts, most people being detained were initially brought in on minor violations (which in a saner world would not have resulted in incarceration), and have not had any terrorist-related charges brought against them.

To this day, it is my understanding that fewer than a dozen have actually been connected to any terrorist activity. Is that what a democracy does: imprison whole groups of people to catch the fewer than 1 percent who are actually committing criminal acts?

The USA PATRIOT Act also includes under the "crimes of terrorism" umbrella the destruction of property even if no one is hurt (section 808), telemarketing fraud (section 1011), as well as any kind of computer hacking (section 217). Under the rubric of "guilt by association," this act also permits the denial of entry to and even the imprisonment of "the spouse or child of an inadmissible alien" who's been "designated" as a terrorist within the past five years (section 211).

The FBI can now legitimately demand access to anyone's business, medical, student, bank, library or any other personal records in order "to protect against ... clandestine intelligence activities." (Sec. 501) The Associated Press reported on June 25 that the FBI has been reviewing the library records of several hundred individuals in libraries across the nation using a quick and largely secret process which is now legal under the PATRIOT Act.

Judith Krug, the American Library Association's director for intellectual freedom, in a straight-forward statement is quoted as saying, "... these records and information can be had with so little reason or explanation. It's super secret, and anyone who wants to talk about what the FBI did at their library faces prosecution. That has nothing to do with patriotism."

It seems we must now extend Ashcroft's warning about watching what we say in public to include what we may read as well. It is really not such a large leap to imagine our hyperparanoid government beginning to imprison people suspected of "aiding and abetting the enemy" based upon their "unpatriotic" ideologies and choice of reading material.

The USA PATRIOT Act creates and allows for a virtual police state with little to no judicial oversight. We, as a nation, are literally treading the razor's edge when it comes to flirting with the grave dangers inherent in giving up our rights for the empty promises of "safety" and "national security" masquerading under the guise of a "patriotic" PATRIOT Act. Once we fall off that edge, reclaiming and reinstating our rights, authority and power as "WE THE PEOPLE" of this great nation might prove very difficult.

The next obvious question is: just what can the average person do? Across this nation, wise and enlightened individuals have been forming groups to fight the injustices that the PATRIOT Act imposes on us. Resolutions have been passed unanimously by city councils in Amherst, Leverett, Northampton, Ann Arbor, Berkeley, Denver, and Cambridge. Other cities and towns are in the process of preparing their own resolutions and gathering signatures on petitions to protect our civil liberties against the offenses of this Act.

The Northampton Bill of Rights Defense Committee's website, (, offers a wide range of organizing tools, links, and information about similar campaigns around the country to help you get started in your own community.

A rally in Boston this past June 22 kicked off a movement in Massachusetts to gather 100,000 signatures to petition our Mass. congressional delegates to introduce a bill that would call for the repeal or amendment of those sections of the PATRIOT Act that stand in clear violation of our constitutional rights. For more information or to get involved, you may contact the ACLU of Massachusetts at 617-482-3170 x 314.

At this critical juncture, to sit back and naïvely trust our government officials to protect anything other than maintaining their own uncontested, ill-gotten power is to risk losing the very liberties, rights, and freedoms our founding fathers fought so hard to procure for each and every one of us.

If we don't stand up for our rights, then who will? If we don't demand the extension of these same rights to all people within our borders, then we are nothing but accomplices in the hypocritical, haphazard, and biased application of our nation's core principles of democracy and equal rights.

In closing admonition, I have taken the liberty of adding a few lines to an excerpt taken from a sermon given in various times and places by Martin Niemoller, 1892-1984, a Protestant pastor in Nazi Germany:

They came for the "suspected" terrorists, and I didn't object -
For I wasn't a "suspected" terrorist;
They came for those of Middle Eastern descent, and I didn't object -
For I wasn't of Middle Eastern descent;
They came for the unpatriotic, and I didn't object -
For I was not unpatriotic;
They came for the dissenters and activists, and I didn't object -
For I wasn't a dissenter or an activist;
"They came for the Communists, and I didn't object -
For I wasn't a Communist;
They came for the Socialists, and I didn't object -
For I wasn't a Socialist;
They came for the labor leaders, and I didn't object -
For I wasn't a labor leader;
They came for the Jews, and I didn't object -
For I wasn't a Jew;
Then they came for me -
And there was no one left to object."

Addendum: For those who may be interested, the final official version of the USA PATRIOT Act can be found at the following site:

[Doreen Miller lived, studied, worked and traveled abroad for several years, and is currently a Senior Lecturer and educator of international students. She dedicates part of her time to serving the elderly and Alzheimer patients. Mother, musician and poet, she pursues an avid interest in Buddhist and Eastern philosophy. She advocates human rights, social justice, fair trade, and environmental protection. Doreen lives in the United States.]

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Paper AvalancheWhat sucks about being a gold bug#7995807/05/02; 21:15:27

I guess what sucks the most about being a gold bug is that you so dearly love the very principals as stated in the Constitution and the Bill of Rights only to realize that 99%+ of the population is oblivivious to the rights that were initially provided to them by the many men who fought and died to secure those rights.

How many people even know that the Federal Reserve Bank is a private corporation?

I will likely go the way of all others who have opposed tyrrany (William Wallace, Martin Luther King, JFK and many others who are unknown).

I know that to openly post such opposition to the powers that be is essentially signing my own death warrant, but I cannot bring myself to simply accept the status quo and arbitrarily consign my God given rights to those who have no claim upon them.

That is the fear which is struck in the hearts of the paper money cabal, that persons such as myself might opt to no longer participate in the ill-conceived and highly manipulated credit system that sucks the very life blood of those who seek only to be free.

I pray to my God that I may be given the strength to remain free in light of the efforts of those who seek to subjugate me.

Paper Avalanche - not only a cool handle, but the mathematically inevitable outcome of a debt-based, fiat paper monetary system

Speedyto the camps!!!#799597/5/02; 21:30:32

Paper Avalanche, you are not the only one out there who feels the way you do!! I too will be there in camp, knowing the life I choose{Christ ONLY} and the way I feel inside about our fine government,and those who enslave the people like they do!!!!!!
Chap XPaper Avalanche #799607/5/02; 21:31:44

"Is that what a democracy does"

"Are you naive enough to think we live in a democracy"
Gordon Gecko - Wall Street - 1987

And a few more (but not limited to) goodies.....

On Sept. 14th, 2001, President George W. Bush declared a state of national emergency, enumerated the
statutes under which he would now be operating, and began issuing numerous Executive Orders. Here's a snapshot of what powers each of those statutes give to the President.-

The White House
For Immediate Release
Office of the Press Secretary


EXECUTIVE ORDER 10990 allows the government to take over all modes of transportation and control of highways and seaports.

EXECUTIVE ORDER 10995 allows the government to seize and control the communication media.

EXECUTIVE ORDER 10997 allows the government to take over all electrical power, gas, petroleum, fuels and minerals.

EXECUTIVE ORDER 10998 allows the government to take over all food resources and farms.

EXECUTIVE ORDER 11000 allows the government to mobilize civilians into work brigades under government supervision.

EXECUTIVE ORDER 11001 allows the government to take over all health, education and welfare functions.

EXECUTIVE ORDER 11002 designates the Postmaster General to operate a national registration of all persons.

EXECUTIVE ORDER 11003 allows the government to take over all airports and aircraft, including commercial aircraft.

EXECUTIVE ORDER 11004 allows the Housing and Finance Authority to relocate communities, build new housing with public funds, designate areas to be abandoned, and establish new locations for populations.

EXECUTIVE ORDER 11005 allows the government to take over railroads, inland
waterways and public storage facilities.

EXECUTIVE ORDER 11051 specifies the responsibility of the Office of Emergency Planning and gives authorization to put all Executive Orders in to effect in times of increased international tensions and economic or financial crisis.

EXECUTIVE ORDER 11310 grants authority to the Department of Justice to enforce the plans set out in Executive Orders, to institute industrial support, to establish judicial and legislative liaison, to control
all aliens, to operate penal and correctional institutions, and to advise and assist the President.

EXECUTIVE ORDER 11049 assigns emergency preparedness function to federal departments and agencies, consolidating 21 operative Executive Orders issued over a fifteen-year period.

EXECUTIVE ORDER 11921 allows the Federal Emergency Preparedness Agency to develop plans to establish control over the mechanisms of production and distribution, of energy sources, wages, salaries, credit and the flow of money in U.S. financial institution in any undefined national emergency. It also provides that when a state of emergency is declared by the President, Congress cannot review the action for six months.

Black BladeScandals make it harder for companies to raise cash #799617/5/02; 21:37:30


WASHINGTON — The investor confidence sag stemming from corporate accounting scandals is making it harder for companies, even those unrelated to the firms in question, to raise cash in the key corporate bond market. That is likely to put a damper on already weak business spending, the key piece of the economic puzzle that is lagging other sectors, especially consumer buying. While that alone won't be enough to bring the USA back into recession, it is acting as a drag on an already soft rebound, analysts say. "It slows the recovery down," says Barry Evans, John Hancock Funds' chief fixed income officer.

Economists say most of the blame for the spread increase goes to the accounting scandals. "Investors have found they can't trust anybody," says Stephen Slifer, chief U.S. economist at Lehman Bros. "You can't trust the company to be reporting earnings honestly. You can't trust the accountants, you can't trust your broker, you can't trust Martha Stewart." So, he says investors think, " 'Why buy a corporate bond?' Just buy a house or put the money under your mattress."

Black Blade: It should be no surprise that confidence is so low and companies can't raise cash. Scandals are now a daily occurrence. Unfortunately we are perhaps becoming complacent and should we let our guard down, we will see a lot of unnecessary suffering. Today's positive market action is more likely a "dead cat bounce".

Paper AvalancheExecutive Order 11110#799627/5/02; 21:46:06

If I am not mistaken, this is the EO that JFK issued which essentially abolished the Fed vis a vis the re-establishment of a silver standard for the US$. If memory serves me, he was assinated five months after issuing said EO. The EO was never enforced.


Paper AvalanchePer google, I am correct - here is the link#799637/5/02; 21:49:17
Paper Avalanchebetter link#799647/5/02; 21:51:26

a quicker link
TopazMr Gresham et al#799657/5/02; 22:38:44

I'll be splattering these here Walls with Graffiti for some time to come Mr G - just gonna refrain from Marketmania predicting - (did you see the indices today, If Alcoa "beats the Street" by 25% it's off to the Races)....sheeeesh, just can't help myself!!
Black BladeAll in a day's graft in the US #799667/5/02; 22:58:43


It's a pity George W. Bush hails from Texas and not New York, because it might be interesting to hear his thoughts on "honest graft" and how this venerable institution has fallen from favour these past few years in the Big Apple. Modest, moderate corruption was almost considered a good thing in its day - an unofficial reward, for example, to cap the careers of relatively honest cops. If an officer kept his nose out of real mischief, ignored hookers and gambling but busted heroin dealers, he might get to spend his last few years policing the flesh pits of Times Square, where a retirement fund could really blossom.

"No more hamburgers," one NYPD veteran is said to have exclaimed when his transfer arrived. "It's my turn for tenderloin." It was his contribution to the language, for that is the name America's red light districts have borne ever since. The Tenderloin - it's a location and a state of mind: the place to collect a red-meat reward for righteous dishonesty.

Black Blade: An amusing take on US corruption from the Kiwi side.

Mr Greshambarnaclebob#799677/5/02; 23:00:07

Thanks for the link to the "Patriot" act essay at yellowtimes. It took me awhile to be able to stand reading anything about it.

R.Powell & other Valley folk (link above -- who was our other Hamp dweller?): Look who is raising the Spirit of Shays! "Resolutions have been passed unanimously by city councils in Amherst, Leverett, Northampton, Ann Arbor, Berkeley, Denver, and Cambridge. Other cities and towns are in the process of preparing their own resolutions and gathering signatures on petitions to protect our civil liberties against the offenses of this Act."

I would say that there either isn't as much of a terrorist threat as thought 9 months ago, or it is being quietly neutralized through normal police/intelligence work. I doubt that the provisions of this bill hit the mark in this particular time of need, and will overshoot it and cost us bigtime in the long run -- or even sooner. It really looks like "something else" coattailing on a national emergency, manufactured or genuine. And all brought to you by "The Gang That Couldn't Budget Straight."

This is really a case where you have to have your LIBERTIES in place in advance of the next emergency, not LAWS that violate them, because the tides running afterward will not be friendly to Liberty.

Mr GreshamDoug Noland on NextBank meltdown#799687/5/02; 23:19:11

Including a chronology of how a "New Economy" "business model" fleeced investors and ultimately taxpayers. Tip o' th' iceberg to ya!
HoratioArgentina#799697/5/02; 23:27:09

Government proposes to to convert cash in the bank to bonds..
The U.S. did the same thing in the 30's,if you had a 1 year bond,they made it a 5 year bond.If you had a 10 year Bond ,they made it a 10 year bond.The result was an immediate loss of the present value of your holding whatever it was.A 30 year Bond might sell for 150.00 even though the value at maturity is 1000.00.So if you had 1000 dollars cash in an Argentine bank and they converted it to a 30 year bond ,you could sell it for 150.00 now.....Don't worry your moneys good,you just have to wait 30 years to get it back and who knows what it will buy in thirty years.Ill venture a guess that $ 1000 in thirty years will buy what 150.00 buys now!!Some deal...

HoratioArgentina#799707/5/02; 23:35:12

If they convert cash to bonds its a clear sign they have chosen DEPRESSION over inflation.
I believe after consultation with the U.S. they have decided as the U.S. did in the 30's to do this because history shows .......Wild inflation brings with it an overthrow of the government.Depression does not bring about an overthrow of the government,just demands for more socialism and redistribution of wealth,clearly the preferred choice for governments.

Horatiocontraction#799717/5/02; 23:46:54

Conversion from cash to bonds will cause a rapid CONTRACTION in the money supply just as it did in the U.S. in the thirtys.The failures of many banks was a result of this contraction ,not the other way around as they would have you believe.All those Dollars floating around and printing press money will be contracted in the same manner,when they get ready to do it.A contraction of the money supply ,zero interest rates,credit drying up are all part of the same plan to avoid hyper- inflation and an overthrow of the government..
HoratioWatch Argentina !#799727/6/02; 00:08:11

When the currency contracts everyone wants out!Give me my cash!Everything stops while everybody scrambles for cash and golds soars,because it can't be devalued or inflated .It becomes the currency of choice.You can't save cash because it gets converted to a bond ,you can spend it for something tangable and get good value or you can convert it to a currency like gold.All paper currencys will be revalued in the same way ,there will be no safe paper.Then gold MAY be reinstated as a backing in order to restore confidence in paper again.
Gold and Silver are always used as collateral against new financing of wars or backing of currencys until confidence is restored and then the backing is removed and used somewhere else for the same purpose,to restore confidence......

Black BladeJobless Ranks Grow Amid Sluggish Hiring#799737/6/02; 00:08:49


WASHINGTON (Reuters) - The U.S. unemployment rate ticked higher in June amid stubbornly sluggish hiring, a sign the road back to full economic health could be long and rocky. Employers outside the farm sector added a paltry 36,000 workers to their payrolls last month, the Labor Department said on Friday -- less than half what economists had expected. Moreover, the department ratcheted down its data for April and May to show jobs growth of just 3,000 over those two months, compared to a total rise of 47,000 reported earlier. With the jobs market still so frail, the unemployment rate rose to 5.9 percent in June from 5.8 percent a month earlier.

Black Blade: Lets see here. Jobs were added and the unemployment rate grew. What the report does not mention is that many are no longer counted as unemployed because they don't qualify for benefits or the unemployment benefits have run out. Also many have simply given up looking for work while living off of savings, mortgages, or declining investments. Notice that nearly every revision of unemployment data has been a downward revision.

BTW, the rise in the markets yesterday are now being attributed to relief that there were no terrorist acts on the July 4th holiday. However, when real traders and investors return on Monday the markets could do a 180.

Black BladeDollar Rises Against Euro#799747/6/02; 00:43:54


NEW YORK (AP) -- Cheered by hefty gains in U.S. equities, the dollar edged higher against its key counterparts Friday, gaining against the euro for the fifth straight day -- its longest advancing streak on the European currency in a year. After looking like it was stuck on a one-way trip lower for the past couple of months, the dollar's gains on the euro have suddenly made talk that the single currency is about to shatter parity with the greenback seem premature.

"The problem for the dollar has been capital flows and there's little on the immediate horizon to suggest capital flows are going to start coming into the U.S.," said Robert Sinche, head of global currency strategy at Citibank. "The dollar had a bit of a recovery this week but there's very little in the fundamental environment to support the dollar over the next three months," he said. Indeed, perhaps the key weight on the dollar this year has been the reversal in the flow of capital into the country, as foreign investors, who have showed a remarkable appetite for U.S. stocks and bonds in recent years, begin to shift their funds elsewhere.

Black Blade: Nearly all the action in the currency markets has been due to numerous official interventions. This is truly amazing as the US, Japan, and Europe is now all involved in a three-way currency war. This is not a currency war to maintain the stronger currency – but amazingly it is a currency war to achieve the weakest currency. Bizarre as that may seem, it is necessary for each region to have the weakest currency. The reason is obvious. First the US dollar is already extremely overvalued and in a weak economy a weak currency is the only way to stimulate US exports. Second, Japan is nothing more than a factory on a couple of island with no raw materials. They must import raw materials and manufacture trinkets for export in order to survive economically. The Japanese economy appears to be in for a rough ride and their only possible hope is a weaker yen to float their economy with exports. Europe has just realized that their economy is not as strong as they had thought. In fact there are concerns about rising inflation. They too are now hoping for an increase in the export of goods to other regions. In short – everyone is fighting for that piece of the shrinking global economic pie. It is quite odd that everywhere the world economy is retracting and there may simply be very little if any global economic pie to go around. Life in this world is just about to get very "interesting".

Black BladeBest gold & silver stocks for the half-year #799757/6/02; 01:23:10


NEW YORK -- Gold producers with reserves sold forward have paid a heavy penalty as stock prices idled relative to the supercharged performance of companies offering full exposure to the gold price. Whereas hedged producers have bested the gold price by 35%, unhedged producers were a 100% better at the half-way mark, with a 129% gap over the imperilled S&P500 index.

Black Blade: Hedgers (mainly Mega-Hedgers) have been part of the problem in the low gold price environment experienced over the last 6 years. The question I have is why would anyone invest in a hedged gold company? Isn't the whole point to have full exposure to the rising price of the underlying product? It therefore does not surprise me that non-hedgers have so dramatically outperformed the hedgers.

BTW, I am not pushing any particular stock, however, as hedgers have contributed to the lower POG they should be exposed as under performers. As disclosure I only hold highly profitable non-hedgers as well as a nice stash of physical for portfolio insurance.

HenriTest#799767/6/02; 02:30:38

HenriGolden Word#799777/6/02; 02:42:42

I hereby declare that my privately held corporation retains 500% of the par value of all its stock in pm's (gold silver and platinum)as the sole indication of its strength. Books smooks, anyone who runs a business knows that the amount of money in the checking account doesn't mean smotz unless it is balanced against current and future liabilities.

The pm reserve will be distributed to real and beneficial holders of corporate stock upon dissolution.

In addition, the corporation will acquire and hold an another 100% of the par value of its stock as assurance for each client. This pm is profered in lieu of liability insurance which my corporation will not purchase. This additional pm reserve stands along with my solemn word that I will deliver my services in good faith and meet contractual obligations. If my word and the full company's worth in pm is not good enough for a client, then i do not need their business.

Go small business!

Take that you wall street geeks!

HenriHi Black Blade#799787/6/02; 02:46:24

yes, I am up early. Off to Scout camp with my troop for a week. No phones no lights no TV, No internet (aaarrrggghhhh!!!!!)

5 am departure

Adios mi amigos
vaya con Dios

Black BladeWall Street Still Over Its Head in Overhead#799797/6/02; 03:02:38


Die-hard tech investors aren't the only ones crossing their fingers for a screaming stock market rally, it seems. Wall Street's big investment firms are talking up the prospect of a big second-half pickup, too. That would pass for standard-issue optimism if it weren't for the fact that Wall Street desperately needs business to bounce back if it is to avoid a wave of new layoffs, observers say.

Black Blade: It appears that more confidence men will be fired from Wall Street's boiler rooms. There is the same old boiler room line of "growing profits" in the next quarter or half or year, etc. A lot of analysts are screaming for investors to jump into the markets since today's "dead cat bounce". It should be quite "entertaining" on Monday whatever direction the market takes. Presumably we have a "State of the Union" address coming up next week and I suspect that the Pied Pipers will play it up.

Black BladeForeign Direct Investment Slid 56% to $565 Billion in 2001#799807/6/02; 03:19:13

Foreign direct investment flows to developed countries tumbled by 56% last year to $565 billion from more than $1 trillion, Friday's Wall Street Journal reported. And it looks like they're going to fall again this year, according to the Organization for Economic Cooperation and Development, a Paris group representing 30 industrialized nations.

Leading the decline was the U.S., which saw direct investment tumble more than 57% to $131 billion in 2001, down $177 billion from $308 billion in 2000, and the lowest level since 1997. Germany, Japan, Ireland, Sweden and the United Kingdom also saw big declines....

Black Blade: The lower interest rates won't attract much foreign cash to US bond markets either. Notice how desperately the Pied Pipers are announcing the "economic recovery" today. It is doubtful that they can slow the stampede for the exits. The foreign investor has been helping to prop up US equities markets (and the dollar). Once that foreign cash goes home it will get very "interesting".

Black BladeBreaking News - Afghan Vice President Assasinated#799817/6/02; 04:28:44

The Afghan Vice President Haji Abdul Qadir was just assasinated. The assassin got away although 10 of the VP's guards have been arrested. Looks like the Afghan governmnet is crippled and could collapse as there are too many clans fightening each other. That is what helped collapse the governmnet previous to the Taliba. I am not surprised though. "Interesting Times"

- Black Blade

WaveriderCurrency War#799827/6/02; 06:15:12

BB - you mentioned the 3 way currency war between Japan, US and Europe...maybe Switzerland makes it 4? The Swiss are quite concerned about the strength of the CHF, it has gained around 4% on the Euro and has appreciated faster than the Ca dollar against the US. For the 1st time in approximately 21/2 years, the CHF is stronger than the Ca dollar. Funny, isn`t it that there`d be a war for the `weakest`currency. Cheers,

PanNews From Asia ! Gold Certificates, backed with real Gold !#799837/6/02; 06:17:26,1870,129875,00.html

The Straits Time - Singapore

5. July 2002 FRI

Gold rush - sure thing or passing fad?

With currencies volatile and stock markets heading south, some investors are once again investing in gold - one of the few assets that have seen a steady price rise since last year. In My Money, OH BOON PING finds out how you can participate in the current gold rush, as well as how long the rally will last

IF YOU still haven't heard, gold prices are on the rise.

It is a dramatic reversal of fortunes for the precious metal that had been shunned for much of the 1980s and 1990s.

As governments and central banks around the world converted their reserves from gold to currencies such as the US dollar and the yen, the price of gold fell from highs of US$660 per ounce in the 1980s to a low of US$252 per ounce last year.

But since the Sept 11 terrorist attacks last year, gold has been back in vogue.

The price of the precious metal surged to a five-year high of US$328 per ounce last month - a return of 21 per cent in less than one year.

Gold-related stocks and funds have put up even more impressive performances.

For instance, the United Gold and General Fund saw its net asset value rising by 83 per cent in the comparative period.

And stocks of companies that deal in gold have also doubled or even tripled their value.

The result: Whether it is the Philadelphia XAU, Toronto Gold or FT Gold Mine index, gold indexes have far outperformed their floundering equity market counterparts.

Still, to most Singaporeans today, the concept of investing in gold is both quaint and alien.

Indeed, many associate it with the ubiquitous Credit Suisse gold wafers worn around their necks or ankles when they were little children, or with old ladies exchanging hard-earned savings for necklaces or bracelets at the neighbourhood jewellery store.

Thankfully, banks in Singapore offer a number of other options.


United Overseas Bank (UOB) says it offers a wide variety of assets, ranging from gold bars to gold certificates, that will provide investors with sufficient exposure.

If you are after something to have and to hold, then you may want to consider gold bars or gold bullion coins.

These are sold according to the prevailing Singapore gold kilobar price, plus 3 per cent Goods and Services Tax (GST).

However, the inconvenience lies in the storage of gold bars and coins, which is not provided for.

There is therefore an additional cost associated with buying gold bars or coins - the rental of safe deposit boxes at the bank.

Alternatively, you can choose not to buy physical gold and instead opt for:

Gold certificates; or

Gold savings accounts.

Gold certificates give their owners a legal claim to physical gold.

They are also sold in multiples of one kilobar, subject to a maximum of 30 kilobars per certificate.

With no expiry date, these certificates can be exchanged for physical gold whenever the need arises.

But this is typically more expensive than buying physical gold, notes UOB.

That is because the investor is charged an additional flat fee of $5 per certificate and a storage fee of $30 per kilobar per annum.

A gold savings account, on the other hand, is for investors who expect to trade in gold more frequently.

Any cash deposited into the account is converted into grams of gold at the prevailing gold prices.

The balance held is strictly not convertible into physical gold. This means that to withdraw from the account, the customer has to sell part or all of his balance back to the bank at the prevailing Singapore gold price.

However, UOB says that if the client insists on converting the account balance into physical gold, it is willing to make an exception.

But upon delivery of the gold, GST will be levied and no storage services will be provided.

Gold account holders can make transactions at any time during banking hours in units of one gram of gold, subject to a minimum of five grams per transaction.

An administrative fee - in grams of gold - of 0.25 per cent per annum on the highest balance per month or 0.12 gram per month, whichever is higher, is charged.


All right, so there are options. But what is the likely performance of the market over the next 12 months and will the rally persist?

Mr Alfred Wong, portfolio manager for UOB's United Gold and General Fund, is bullish.

Historically, gold has had a strong negative correlation with the US dollar and the continued weakening of the greenback implies that the price of gold will appreciate further.

Also, gold has anecdotally always done well in an environment with low short-term interest rates.

This is because a government attempting to pump-prime the lacklustre economy using low rates runs the risk of raising inflationary pressures inadvertently.

Thus, gold, which is seen as a traditional hedge against inflation, will emerge as a favourite store of value.

Moreover, there is still the strong investment demand for gold, especially from Japan, says Mr Wong.

'In the first quarter of 2002, gold demand in Japan was 45 tonnes, double that of the fourth quarter of 2001 and triple the volume in the same quarter of the previous year,' he notes.

A large part of this demand from Japan came about as a result of the new insurance limits on term deposit introduced by the Japanese government on April 1.

Because their deposits are no longer insured fully by the banks, Japanese savers have been channelling part of their wealth into gold.

Come April 1 next year, this insurance limit will be extended to include current accounts as well.

And should the Japanese banking system and the Japanese or global economy take a turn for the worse, one can logically expect more funds to flow into gold, which is seen as a traditional asset of last resort and has a safe haven status, he added.

Is there enough supply in world markets to meet this added demand?

According to analysts The Straits Times spoke to, years of structural decline and low gold prices have created a scenario where exploration has been slashed and producers now face the serious problem of replenishing their reserves.

Hence, supply may not be readily available.

Given rising gold prices, major holders of gold - including the world's central banks - are unlikely to sell their gold reserves.

Economics 101 teaches us that when demand rises faster than supply, prices are likely to rise.

Is gold, therefore, a sure bet?

Well, when prices have surged to new highs, the risk of the rally having run its course is always present.

Said Mr V. Anantha Nageswaran, regional head of investment consulting at Credit Suisse Private Banking Singapore: 'The risk of all this optimism about gold is that markets somehow judge that US stocks have been oversold and they suddenly start to rally.

'The other risk is that, as the US dollar weakens, central banks in Asia and Europe decide that the greenback's weakness is a bigger evil than its strength and begin to resist it by verbally talking the greenback up or through intervening in the market.'

Investors will do well to heed such early warning signs of a reversal in the upward trend in gold prices.

But until then, gold is an asset that is shining for now.

misetichReliant takes billions off books - SCANDAL OF THE DAY#799847/6/02; 07:26:46


July 6, 2002, 1:01AM

Reliant takes billions off books
Phony trades inflated revenues
Copyright 2002 Houston Chronicle
Reliant Energy has reduced its reported revenue for the years 1999-2001 by $7.8 billion to exclude the sham energy trades the company admitted to earlier this year, according to a filing Friday with federal regulators.

Reliant Resources, the unregulated subsidiary of Reliant Energy, also restated its revenues for the same three years, trimming off $8 billion in reported revenues. Reliant Resources is under investigation by the Securities and Exchange Commission for the phony trades used to inflate its revenues and trading volumes.

Round-trip trades involve a company buying and selling the same amount of a commodity.

Other companies have admitted conducting such trades but did not record them on their books. Reliant Resources is the only one that has conceded it booked the trades as revenue in its reports to the SEC.


Reliant Energy previously reported $15.2 billion in revenues in 1999, $29.3 billion in 2000 and $46.2 billion in 2001. On Friday, the company restated its revenues to $13.79 billion in 1999, $28.26 billion in 2000 and $40.81 billion in 2001.

It also restated its expenses for the same three-year period, decreasing its expenses from $13.9 billion to $12.5 billion in 1999, $27.5 billion to $26.4 billion in 2000 and $44.2 billion to $38.3 billion in 2001.

Reliant Resources reduced 2001 revenue by 15 percent to $31.1 billion from $36.5 billion. It adjusted 2000 revenue by 5.4 percent to $18.7 billion from $19.8 billion, and 1999 revenue by 18 percent to $6.5 billion from $8 billion, according to filings.


Corporate America is following the principle of "what is is"

Got gold?

misetichSearching for signs of "US economic recovery" - NOT in Securities industry#799857/6/02; 07:42:48

Merrill Eliminates More Jobs as Markets Decline

``There are still far too many people in investment banking,'' said Olgerd Eichler, who manages about $480 million in U.S. equities at Union Investment GmbH, including Merrill Lynch shares. ``Merrill will probably cut even more jobs.''


It sounds like the "second half US economic recovery" is being post-poned, yet again - to 2003

Wait till next year, is the battle cry ( the Bear is licking its chops, waiting..)

Got gold?

barnaclebobMOUSSAOUI CLAIMS THE U.S. ALLOWED SEPT 11 ATTACKS #799867/6/02; 08:20:45

Scroll down the page to "HIJACKERS" to review the motions.

ATTACKS TO TAKE PLACE. Zacarias Moussaoui, who is on trial in federal court in Alexandria, Va., for conspiracy charges in connection with the Sept. 11 attacks, has filed motions asking to talk to Congress and to a federal grand jury about the "FBI cover-up" of Sept. 11.

One of his handwritten motions is captioned "Motion to
appear in front of Congress hearing on FBI knowledge and
responsibility on the Sept. 11 attack," and in it, Moussaoui says that "I have relevant information and proof relating to conduct of the FBI regarding the Sept. 11."

In another motion, he said he wants to testify before the
federal grand jury investigating 9/11 because "I have extensive and relevant information on how did this operation happen." He says that "I will stipulate to chains, handcuffs, leg cuffs, stun belt, 20 or 30 marshalls as long as I can say what I know about Sept. 11 attack."

In another "Motion to compel the government to withdraw the
charge against me because the FBI were conducting an undercover surveillance operation," Moussaoui says that he was arrested and held in secret to prevent newspapers headlines saying that "the FBI had arrested a Muslim Arab at Pan Am [Flight Academy] the same school where [suspected hijacker Hani] Hanjour the believe hijacker train a few weeks before." Moussaoui seems to be saying that his testimony will allow Americans to know "how their
government cynically allow Sept. 11 in order to destroy

In another place, Moussaoui says that the government's
theory that the Sept. 11 attacks were carried out by Osama bin Laden is a hypothesis which is "unproven."

barnaclebobMoussaoui: Judge to Stage 'Incident'#799877/6/02; 08:24:26

ALEXANDRIA, Va. (AP) - The only man charged as a Sept. 11 conspirator has repeatedly accused the judge in his case of trying to kill him. In a motion released Wednesday, Zacarias Moussaoui predicted how it would happen.

The guy wants to talk on the record to Congress about the alleged FBI cover-up and now he's scared sheepless!

WoodieGot me some, ... now what?#799887/6/02; 11:59:09

First time poster. Let me first say thank you to all of the great and informative posts that I have been reading for the past several months. I hope to continue to learn, and become a more contributing member of this society.

I recently cashed in some positions in PM stocks, and converted it to physical. Now I can't help but wonder what to DO with it. The logical part of my brain knows that I am not supposed to do anything with it except store it in a secure place, and let it give me peace of mind as any other type of "insurance" does. But that other half of my brain is trained to think in terms of making a "profit" on my investments. Is this a common affliction of the new physical owner?

Thanks, Woodie.

Gandalf the WhiteWELCOME Sir Woodie -- You have taken the BIG STEP !#799897/6/02; 12:21:09

Woodie (7/6/02; 11:59:09MT - msg#: 79988)
Got me some, ... now what?
First time poster.
IF you have any hesitations on the feelings of not getting "interest", just take out some of the PHYSICAL and hold it in your hand and look at it and think about it for a minute. The smile that you get on your face will be far better than the lost "interest" !! Remember, this is wealth (PORTFOLIO) insurance. Ask anyone in Argentina if they would trade you some of those BONDS for a little of that PHYSICAL ?

Black BladeA tear for Argentina's pension funds#799907/6/02; 13:06:51


A quarter of the Argentine population is unemployed. Over half the population is now officially below the poverty line. Rioters loot supermarkets. A people, once proud of eating the best beef in the world, now fight over carcasses of cows when cattle-trucks overturn. The exchange rate has gone from one peso to one US dollar - fixed for over a decade under the convertibility law - to over three pesos to the dollar: Argentines' savings have been cut by two-thirds in five months. The government has defaulted on its $150-billion debt. Bank deposits have been frozen since December and the government now proposes to give depositors long-term peso-denominated government bonds in lieu of their US dollar deposits. Cash has disappeared since only limited withdrawals are allowed. The stories of interest on radio stations are those that involve ATMs that still have cash. Barter is rampant in private transactions. The entire banking system, shut down several times in the past four months, is now bankrupt.

Black Blade: The reports out of Argentina get worse all the time. It has been reported that many Argentines are scrounging for food in landfills and garbage cans. Some are eating stray pets and toads. Crime is rampant. Now Argentines not only have lost their savings, but now they have lost their retirement funds. More hopes and dreams are dashed. How far behind are the other dominoes in South America? And how long until the U.S and other western nations follow? In a word – "Grim".

barnaclebob@Woodie: Markets to fall further 50 per cent #799917/6/02; 13:13:04

With most economic predictions suggesting major economic declines thirties style, you own and possess the greatest assett available, it's compact, fungible, and the value does not rely on any underlying assett. Is there any better "storehouse of value and wealth" than Gold in times like these? If there is, I have not found it!

LONDON (FT Investor) - Hugh Hendry, Europe's best-performing fund manager, believes equity markets will fall a further 50 per cent before bottoming.

Despite this year's rise, Mr Hendry is running scared of equities since detecting a significant shift in the markets in mid June.

"Up until the second week in June I was up about 22 per cent, now it's 15 per cent. The last three weeks have been quite difficult."

Rather than flowing into the equity markets, as has historically been the norm, this liquidity has flooded into assets such gold, property and commodities.

"I have been consistently 100 per cent invested for the last three years, but I am now selling stocks," he says.

Mr Hendry admits he is not certain what will happen next, but he is raising the possibility that we may be heading for a 1930s-style depression, rendering it impossible to make money from the markets.

"One has to give serious consideration to that now the bear market has encroached into my golden 5 per cent [of stocks]. And no equity strategy succeeds with that outcome: value growth, good management, strong balance sheets, nothing works."

As an example, Mr Hendry says global markets bottomed in November 1929 at an average price-to-earnings ratio of around 10. Caterpillar, the tractor manufacturer, would have looked good value on a p/e of eight, but investors who thought so would have lost 95 per cent of their money in the following three years.

The 1929 example also supports his thesis that bear markets typically bottom at p/es of around 10-11, with 12 in 1962 the highest on record.

So where will it all end? Mr Hendry argues that the last five years of gains from a bull market are typically wiped out in the following bear market.

As markets peaked in March 2000, we need to fall back to March 1995 levels before reaching the bottom, he believes.

Black BladeRe: Woodie,...All – PM Insurance#799927/6/02; 13:36:21

Your position is not unique. Most everyone wants to be in "the game". I would suggest that everyone take care of his or her most basic needs first. That is to secure food and shelter of course. I would also suggest that everyone get out of debt as soon as possible. Once that is done you can sleep a lot easier as that sword is no longer hanging over your head. Also start a storage program of several months of nonperishable food and basic necessary items. You just never know when some financial or natural disaster will strike. With the growing numbers of layoffs it is good to be secure with no (or very little debt) and to have enough food for yourself and your family. Then it is best to take care of other needs such as stashing enough cash for expense that you are likely to encounter for several months should you find yourself unemployed either through layoff, illness, or injury. Then as Alan Greenspan said, have gold as the "ultimate" form of money to insure your investment portfolio. I tend to add physical in proportion to my stock investments (yep, I like to play "the game" too). In the current economic environment I see more danger than in the recent past so I had added to my precious metal position while adjusting my stock portfolio to sound defensive investments (mostly profitable and some good yielding energy, utility, and non-hedged gold shares, with a dash of biotechs and (gulp) mortgage bankers). Still I keep a portion of my investment portfolio in physical precious metals, as it is the "ultimate" form of money. I have been in many countries around the world and most everywhere gold is revered above all currencies. In many areas of SE Asia when I show people a U.S. dollar bill, they just don't get it. When I show them a couple of specks of gold in a rock sample, their eyes light up because they do understand gold. Now if only the Argentines had set aside a portion of their cash in precious metals they would have been much better off today. I did not acquire any gold Argentinos when offered at USAGOLD, though I did get some Gold pesos from Uruguay. Both Argentina and Uruguay are deeply mired in a worsening economic disaster. This has already begun to spread throughout the region to Brazil, Colombia, and Venezuela. Chile is also feeling the heat as is Mexico far to the north. When LatAm crumbles the bankers and politicians in the U.S. will be under intense pressure for yet another bailout. It look to get very ugly. We in the US are not immune from similar problems. Look at the near disaster triggered by LTCM. The derivatives mess on Wall Street and in the major world banks dwarfs any concern once held by the LTCM and Russian bond defaults. As I said, be glad that you have taken steps to acquire some measure of insurance in this uncertain world. When the collapse comes it could be rapid and it will be difficult to get out of the way as everyone runs for the exits all at once.


- Black Blade

Off to the gym!

SiochainChapX#7999307/06/02; 13:56:43

Would you be so kind as to list reference for the Executive Orders....Thanks
misetichOminous portents from the NextBank meltdown - Doug Noland#7999407/06/02; 15:14:38


July 1, Bloomberg: "A failure by WorldCom Inc. to pay interest on its bonds would roil the market for collateralized debt obligations, affecting one out of eight of the securities. Of the 800 such securities in the $350 billion market, at least 100 have WorldCom debt pooled with that of other companies, said Stephen Anderberg, an analyst at Standard & Poor's in New York. Collateralized debt obligations are bonds backed by other kinds of debt, and are held mainly by pension funds and insurers... Sellers of collateralized debt repackage corporate bonds and credit-default swaps into new securities. They profit from the gap between the interest they pay on the debt and the higher rates they get from the pool. They promise investors who buy the safest part of the fund triple-A ratings and a very low risk of default. They can do this because they put all the security's risk into a small portion of low-rated bonds and unrated equity that absorb losses first. Fund managers complain the cushions aren't enough and say defaults in the investment pool put the principal at risk. ‘Some of the synthetic investment-grade collateralized debt

obligations are just too leveraged to deal with one-off-shocks like this,’ said John O’Grady Walshe, who helps manage $3 billion of asset-backed debt for Zais Group Investment Advisors in Dublin."

Expecting a "post-Bubble" barrage of major defaults, it's been our fear that some of these types of structures would soon be in serious jeopardy. We suspect that we have now reached this point, although there is little if any transparency.

If these synthetic CDOs are today at risk of "blowing up," then the value of the insurance they have written now comes into question. This would mark the commencement of what we expect will be major counterparty derivative issues.

The fragile underpinnings of contemporary consumer lending were brought to light this week, as the American Banker reported on the escalating cost of the failure of pioneer Internet credit card lender NextBank. It is now estimated that this failure will cost the bank insurance fund between $300 million and $400 million, rather shocking news (although I don't believe it was covered in the Wall Street Journal). When the Office of the Comptroller of the Currency closed this bank on February 7th, it's assets totaled only about $700 million and insured deposits were $554 million. Just a few months ago (April 17th), a spokesperson from the FDIC stated that losses were expected to be about $25 million. This proved an especially poor estimate. The ugly fact is that this bank was closed down only 30 months after NextCard acquired it. At the time, it had only $3 million of assets. NextCard proceeded to aggressively market insured jumbo CDs that enabled it to easily raise more than one-half billion of deposits. We live in an exceedingly dangerous financial environment.

The NextCard fiasco is pertinent today on many levels.


A must read!

Got gold?

BoilermakerAsian Currency#7999507/06/02; 15:27:42

COPENHAGEN, July 6 (Reuters) - Five years after the Asian crisis, the countours of a future regional currency regime is starting to emerge with a study that calls for the creation of a currency basket system and ultimately a single Asia currency.

The proposal, which foresees a single Asian currency, an Asian central bank and a monetary union after 2030, is part of the Kobe Research Project, an initiative launched by Asian and European finance ministers (ASEM) in 2001.

On Saturday Japanese Finance Minister Masajuro Shiokawa presented the study to his counterparts, who were attending the fourth ASEM meeting here.

Japan has been very active in helping create a web of central bank swap agreements to avoid a repeat of the region-wide crisis which began with the Thai baht's plunge in 1997.

comment; No mention of gold as part of reserves. Looks like paper on paper. What's the point? Looks like an attempt to get in on the US$ scam.

misetichJapan in denial - Japan Battles Bond Rating#7999607/06/02; 15:37:08


Japan's total debt to G.D.P. is expected to hit 157 percent at the end of this year, according to the International Monetary Fund — almost triple the level of a decade ago, and triple the American level. That is the highest any major industrialized country has faced in about 50 years.

Japan's stock of government bonds has risen 15 to 20 percent a year lately, to the equivalent of $4,000 for each Japanese citizen last year. Although few people doubt the willingness of Japan to pay its debt, many say the burden is only worsening Japan's economic problems.

Although Japan's government plans to increase bond issuance by only 1.5 percent this year, to about $1.1 trillion, this figure may come under pressure if tax receipts continue to fall. On Thursday, the Finance Ministry reported that because of an economic contraction, Japan's tax revenues last year were 5.5 percent below projections.

Over the last decade, the economy has stagnated. After shrinking by 1.3 percent last year, Japan's economy is expected to tread water this year. At the same time, the average age has crept up to 41, the highest in the world.

Japan's foreign reserves and overseas assets look small when compared with its $5 trillion in primary government debt, $3.7 trillion of which is bonds.

The reserves "are just a drop in a bucket against its outstanding debt, equivalent to $4.6 trillion, unless the government is contemplating paying off investors with U.S. Treasury bills at 9 cents on the dollar or foresees the day when the U.S. dollar is trading at 1,463 yen," Marshall Gittler, currency strategist here for the Bank of America, wrote recently.

Even $11 trillion in private savings looks less impressive in light of Japan's mountain of debt, which stands at $9.3 trillion if government loan guarantees and unfunded pension liabilities are included, said Takashi Asia, author of a financial newsletter.


"unless the government is contemplating paying off investors with U.S. Treasury bills" - With the US $ ready to fall off the cliff - Japan needs to diversify - Hashitomo where are you? Sell US $ and buy gold!

NY Times requires registration

misetichEveryone Is Outraged - Are they genuine?#7999707/06/02; 15:46:19


Arthur Levitt, Bill Clinton's choice to head the Securities and Exchange Commission, crusaded for better policing of corporate accounting — though he was often stymied by the power of lobbyists. George W. Bush replaced him with Harvey Pitt, who promised a "kinder and gentler" S.E.C. Even after Enron, the Bush administration steadfastly opposed any significant accounting reforms. For example, it rejected calls from the likes of Warren Buffett to require deduction of the cost of executive stock options from reported profits.

But Mr. Bush and Mr. Pitt say they are outraged about WorldCom.

Representative Michael Oxley, the Republican chairman of the House Financial Services Committee, played a key role in passing a 1995 law (over Mr. Clinton's veto) that, by blocking investor lawsuits, may have opened the door for a wave of corporate crime. More recently, when Merrill Lynch admitted having pushed stocks that its analysts privately considered worthless, Mr. Oxley was furious — not because the company had misled investors, but because it had agreed to pay a fine, possibly setting a precedent. But he also says he is outraged about WorldCom.

Might this sudden outbreak of moral clarity have something to do with polls showing mounting public dismay over crooked corporations?

Still, even a poll-induced epiphany is welcome. But it probably isn't genuine. As the Web site put it, last week "the foxes assured Americans that they are hot on the trail of those missing chickens."
Now to the story of Harken Energy, as reported in The Wall Street Journal on March 4. In 1989 Mr. Bush was on the board of directors and audit committee of Harken. He acquired that position, along with a lot of company stock, when Harken paid $2 million for Spectrum 7, a tiny, money-losing energy company with large debts of which Mr. Bush was C.E.O. Explaining what it was buying, Harken's founder said, "His name was George Bush."

Unfortunately, Harken was also losing money hand over fist. But in 1989 the company managed to hide most of those losses with the profits it reported from selling a subsidiary, Aloha Petroleum, at a high price. Who bought Aloha? A group of Harken insiders, who got most of the money for the purchase by borrowing from Harken itself. Eventually the Securities and Exchange Commission ruled that this was a phony transaction, and forced the company to restate its 1989 earnings.

But long before that ruling — though only a few weeks before bad news that could not be concealed caused Harken's shares to tumble — Mr. Bush sold off two-thirds of his stake, for $848,000. Just for the record, that's about four times bigger than the sale that has Martha Stewart in hot water. Oddly, though the law requires prompt disclosure of insider sales, he neglected to inform the S.E.C. about this transaction until 34 weeks had passed. An internal S.E.C. memorandum concluded that he had broken the law, but no charges were filed. This, everyone insists, had nothing to do with the fact that his father was president.

Given this history — and an equally interesting history involving Dick Cheney's tenure as C.E.O. of Halliburton — you could say that this administration is uniquely well qualified to chase after corporate evildoers. After all, Mr. Bush and Mr. Cheney have firsthand experience of the subject.

And if some cynic should suggest that Mr. Bush's new anger over corporate fraud is less than sincere, I know how his spokesmen will react. They'll be outraged.

By PAUL KRUGMAN - NY Times (registration req'd)


Don't know whether or not Krugman is a democrat or a republican- but he makes his point - can't trust politicians
- you got to love that line -

"the foxes assured Americans that they are hot on the trail of those missing chickens."

Got gold?

sectorC'Mon Woodie#7999807/06/02; 16:05:47

Physical is Physical

Don't imagine that you should trade it as if it were some dot-bomb paper.

One must always think of gold as prime undeveloped real estate the one smart players do with real estate is to WAIT.

Wait for the US financial house of cards to ...well...fall down.

The above link to Doug Nolan's latest ought to be enough to convince anyone of the prudence of holding a sock drawer if necessary...or in plain sight.

Visitor probably have never seen the stuff before.

Clint Hmisetich (msg#: 79997)#7999907/06/02; 16:21:33

<<Everyone Is Outraged -
Don't know whether or not Krugman is a democrat or a republican- but he makes his point - can't trust politicians>>

Krugman makes HIS point. Not necessarily fair or balanced. This deserves a counter point but this forum is not the place.

misetichClint H#8000007/06/02; 16:43:48

Krugman editorial was posted not for its political message (if any) - but more importantly as it relates to Corporate accounting frauds and the alleged "outraged" Bush - and SEC's Harvey Pitt and his predecessor Arthur Levitt inaction
which has/is causing financial distress within the US borders and worldwide.

Here's an excerpt of ANOTHER column by Krugman (NY Times, June 28, 2002)

Finally, there's the WorldCom strategy. Here you don't create imaginary sales; you make real costs disappear, by pretending that operating expenses — cream, sugar, chocolate syrup — are part of the purchase price of a new refrigerator. So your unprofitable business seems, on paper, to be a highly profitable business that borrows money only to finance its purchases of new equipment. And you can sell shares at inflated prices.

Oh, I almost forgot: How do you enrich yourself personally? The easiest way is to give yourself lots of stock options, so that you benefit from those inflated prices. But you can also use Enron-style special-purpose entities, Adelphia-style personal loans and so on to add to the windfall. It's good to be C.E.O.

There are a couple of ominous things about this menu of mischief. First is that each of the major business scandals to emerge so far involved a different scam. So there's no comfort in saying that few other companies could have employed the same tricks used by Enron or WorldCom — surely other companies found other tricks. Second, the scams shouldn't have been all that hard to spot. For example, WorldCom now says that 40 percent of its investment last year was bogus, that it was really operating expenses. How could the people who should have been alert to the possibility of corporate fraud — auditors, banks and government regulators — miss something that big? The answer, of course, is that they either didn't want to see it or were prevented from doing something about it.

I'm not saying that all U.S. corporations are corrupt. But it's clear that executives who want to be corrupt have faced few obstacles. Auditors weren't interested in giving a hard time to companies that gave them lots of consulting income; bank executives weren't interested in giving a hard time to companies that, as we've learned in the Enron case, let them in on some of those lucrative side deals. And elected officials, kept compliant by campaign contributions and other inducements, kept the regulators from doing their job — starving their agencies for funds, creating regulatory "black holes" in which shady practices could flourish.

(Even while loudly denouncing WorldCom, George W. Bush is trying to appoint the man who drafted the infamous "Enron exemption" — a law custom-designed to protect the company from scrutiny — to a top position with a key regulatory agency. And some congressmen seem more interested in clamping down on New York's attorney general, Eliot Spitzer, than in doing something about the corruption he has been investigating.)

Meanwhile the revelations keep coming. Six months ago, in a widely denounced column, I suggested that in the end the Enron scandal would mark a bigger turning point for America's perception of itself than Sept. 11 did. Does that sound so implausible today?


As revelations and frauds are exposed, .....

Got gold?

Chris PowellAn exchange about the commodities exchange, and the "sport of kings"#8000107/06/02; 16:47:21

An exchange about the commodities exchange
and the "sport of kings."

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misetichSay A Prayer, He Won't Be The Pretender#8000207/06/02; 16:56:53


That essay remains the favorite thing I've ever written, and its conclusion remains as true today as it was eighteen months ago:

"Both Wall Street and Main Street are currently exploding bubbles, and the explosion will self-feed, not self-correct, until (1) the Fed eases massively, and/or (2) the federal government proactively reduces the budget surplus.

Debt deflation is the beast of burden that capitalism cannot bear alone. It ain't rich enough, it ain't tough enough. Capitalism's prosperity is hostage to the hope that policy makers are not simply too blind to see."

Deflation is indeed the beast of burden that private enterprise cannot bear alone, because the private sector does not own a press that prints money. Only "we the people" can address deflation risk, by demanding that our government lever its balance sheet to support nominal aggregate demand, underwritten by liberal use of the Fed's power to print money. Yes, that's the essence of Keynesian macroeconomics: attack private sector deflation with public sector reflation. And policy makers owe nobody any apology for doing so, as it is capitalism's own excesses and hubris that create deflation risk. When capitalism's stuff is hitting the oscillator, it is democracy's duty to unplug it.2

Mr. Greenspan is trying with a 13/4% Fed funds rate, and fiscal authorities are trying with budget deficits of some 2% of nominal GDP. Will it be enough? A few months ago, I thought so, and said so.3 But I'm also mindful of Keynes' dictum that when a man gets new information, he should be willing to change his mind. And recent months have revealed new information: many, far too many, balance sheets in Corporate America are not just infected with illiquidity, but are reeking with the gangrene of default risk.

The evolving "crisis" in Corporate America is not just about a few crooks in the executive suite, but rather too much debt relative to a "balance of risks" tilted towards deflation (the FOMC may say that the "balance of risks" is balanced between deflation and inflation risks, but from a policy perspective, that is poppycock, per the Volcker Doctrine; and Greenspan knows it).

Minsky passed away in 1996, as corporate financing patterns of the New Age Economy were following precisely his script, moving progressively toward Ponzi Finance Units. And at the end of the decade, the Fed did indeed declare the economy to be in an inflationary state (even if it wasn't) and sought to exorcise the (irrelevantly low) inflation with monetary constraint (I like how Minksy called it "constraint," rather than "restraint"…a more fulsome word!).

And sure enough, Ponzi Finance Units have been evaporating ever since, with ever more putative Speculative Finance Units being exposed as Ponzi Finance Units in drag. These developments are, as Minsky declared, a prescription for an "unstable system" - to wit, a system in which the purging of capitalist excesses is not a self-correcting therapeutic process, but a self-feeding contagion: debt deflation. Eighteen months ago, I dubbed the outlook to be a Minksy Moment.

It still is. I don't, however, think we've reached a "tipping point" into a Minsky Meltdown in the United States. But we're far closer to the point than I thought we would get eighteen months ago, or even three months ago. What frightens me most is the herd notion "in play" right now that all Speculative Finance Units must strive to rehabilitate themselves into Hedge Finance Units; to wit, that the only truly "money good" credit is a borrower that can both service and amortize its debt with cash flow from its operations. This is the emerging, and frightening paradox of our times: for a company to prove that it is a going concern, it must prove that it could liquidate itself.
Bottom Line
It is time for Mr. Greenspan to order banks to expand their "liquidity" lending, and cease contracting it: good loans are made in bad times, and the time has come to make them! And as part of the "deal," it is time for Mr. Greenspan to commit actively to pursue higher inflation, by declaring the "doctrine" of pre-emptive tightening to be dead: short rates will not be raised to prevent rising inflation, but only raised once inflation is rising.

Capitalism's beast of burden won't go away until the Fed is willing to slay it. It's time for Mr. Greenspan to use all his armaments. Unless he does, he will ride into the sunset himself as the Pretender, who started out so young and strong against inflation, only to surrender to debt deflation.

Debt deflation - we live in "interesting times"

Got gold?

Black BladeGas drillers tap coal beds#8000307/06/02; 19:12:59


The thousands of wells that now dot the basin produce about 1.5% of all U.S. natural gas, and if ambitious plans of Williams and other energy companies go through, coal-bed methane in the Powder River Basin could supply almost 10% of U.S. production, a potentially crucial boost for a nation that uses more and more of the clean-burning fuel but is finding less and less from conventional wells.

A report by the federal Energy Information Administration on the potential for gas production here and elsewhere in the Rocky Mountain region refers to the area as a possible "Persian Gulf for natural gas," noting its resources "are more than adequate to meet the expected increase in (U.S.) demand." Companies had produced coal-bed methane from gas-rich coal seams in Alabama and Colorado for years before production caught on here. As late as the mid-1990s, most production companies thought the Powder River Basin held little promise for coal-bed gas production, noting that the gas content of the water here was not as rich as other areas and guessing the little gas that bubbled up from coal de-watering wells was a localized phenomenon.

But the coalfields here are immense. From a small plane a few thousand feet up, the open-pit mines between Casper and Gillette are stunning for their sheer size, studded with enormous mechanical shovels and mammoth dump trucks, and attended by busy coal-hauling trains that seem to stretch forever across the high plains. As producers drilled more and more successful wells to tap coal-bed methane, they realized they'd stumbled on a rare "elephant" — a gas field of the size rarely found anymore outside the Gulf of Mexico or Alaska's North Slope. "It took enough people pumping long enough to convince themselves it wasn't just a local play around the gas mines," Zavadil says. The land boom that ensued saw companies snap up 95% of the available land in mineral leases.

Black Blade: The Powder River Basin is a potential energy target of nearly 24 Trillion cubic feet of methane. It is the largest potential source of methane energy in the lower 48 states. Its development is absolutely necessary if the US economy is to have a prayer of survival. Without energy the US economy is toast and this source of energy is a rare untapped resource. Regardless, the world is fast approaching peak energy development couple with rising economic development and growing population and will soon enter a period of permanent energy crisis. We live in "Interesting Times".

Black BladeCrash Test #8000407/06/02; 20:11:00

As markets dip to their lowest level in years, some wonder whether the crisis in corporate confidence could trigger a far more serious downturn


THIS WEEK, on Tuesday, the Dow broke through the psychologically significant 9,000 mark during the session. And the Standard & Poor 500 index (which contains financially troubled Tyco International) followed in step, falling to a four-year low. "What we're seeing is individuals throwing up their hands and saying, it's just one thing after another." global investment strategist for J.P. Morgan Fleming Asset Management "It's all about confidence and faith in corporate profits," says Stuart A. Schweitzer, global investment strategist for J.P. Morgan Fleming Asset Management. "What we're seeing is individuals throwing up their hands and saying, it's just one thing after another." Could the growing crisis of confidence trigger another market crash?

Black Blade: A somewhat overly optimistic article in my opinion, however, at least the author admits that investors are fed up with corporate malfeasance and corrupt/inept boards of directors who act in concert with criminal auditors like Arthur Andersen. With a "Scandal a Day", it's a tough call for anyone calling an end to this "Bear Market".

R PowellLease default#8000507/06/02; 20:36:52

The New York branch of Deutsche Bank stated that Asarco has defaulted on a lease of 1.5 million ounces of silver. The lease was extended at least once (last Dec.) and due recently but payment was not made.
I don't know if repayment in metal form was demanded or not. The monetary value is $6.3 million and the silver was used for hedging.
Did the company hedge more than it could mine? This seems unlikely given that the lease was extended once giving the company more time to mine. Did the company sell leased metal thinking it could buy back at a lower price and get burned with a higher POS? It would not appear so as $6.3 divided by 1.5 = $4.20/ounce. This could have been bought back at that price and even lower during this year. The lease extention was granted last December. Did the company lease and sell silver to raise working capital which is now gone with not enough monetary mining profit or metal to repay the loan? Would you move your family out of your home if you couldn't pay the monthly mortgage or would you pay the mortgage with a credit card? Perhaps a low interest (for six months) loan. Perhaps this company prolonged its life, hoping for better times (higher prices for its product) which never materialized?
Perhaps Mr. Blade, who is very knowledgeable about the mining industry, will comment. Anyone else? Is this the first of many metal leases defaults?

Black BladeTrading on former glories#8000607/06/02; 20:45:40,,630-347963,00.html

London's declining role in world trade


SINCE the days of the coffee houses of old, London has played a pivotal role in setting the price of world commodities. The traditions live on, influencing events thousands of miles away, from goldmines in New Guinea to bulk carriers rounding the Cape of Good Hope.
Famously, the London gold fixings take place twice daily, at 10.30am and 3pm, at the offices of NM Rothschild on St Swithin's Lane. The ceremony, which involves five men lowering tiny Union Jacks, has been enacted here since September 1919 when it began as a way of marketing South African gold.

Each fixing takes about ten minutes. The chairman suggests an opening price, which is relayed by the others to dealing rooms by telephone. He then asks who wants to buy — or sell — 400-ounce gold bars. The gold price increases or declines accordingly. When the business is done, the flags are lowered and the price is fixed.

Black Blade: Increasingly London is becoming irrelevant. Trade will likely go online 24/7.

Black BladeRe: R. Powell#8000707/06/02; 20:55:18

A couple of years ago Dakota Mining went tits up and left the Bank of NY on the hook for a few $million of forwards. Pegasus Gold also went tits up and the financiers took over the company in bankruptcy. The company changed its name to Apollo Gold and recovered their investment (though I am unsure if this necessarily involved forwards). The bankers recovered their investment by operating the mine no less. We nearly saw similar events with Ashanti, Cambior, and Emperor Mines. They are still around (though perhaps on borrowed time). Cambior is just a shell of their former selves after divesting themselves of some mining operations and Ashanti just threatened nationalization unless given acceptable terms. They are all buried deep under crushing debt and still may not survive (especially if the POG continues to rise).

- Black Blade

steadyhow the fed reserve uses sdrs. and are more on the way?#8000807/06/02; 21:02:51

SDR Allocations and the Gold Price
After writing Bombshell from the IMF, I decided to take an in-depth look at the introduction of the Special Drawing Right (SDR) and see if there was an effect on the gold price.

First, an SDR is a reserve asset that is issued by the International Monetary Fund (IMF). Gold is also a reserve asset that is found on the balance sheet of a central bank.

My theory was that if there is X amount of gold on the balance sheet and a new asset is created that is designed to be a reserve asset, then the SDR would be filling a slot that would normally be held by gold.

Using that basis of thought, one would expect a decline in the gold price as the SDR was introduced. To date there have been two allocations of SDR's. The first period shows a link to a gold price decline, the second does not. The current period of the third allocation indeed does show a relationship with the decline in the gold price.

It is important to note that the third SDR allocation is not formally approved and awaits the vote of the United States to approve the Fourth Amendment to the IMF's Articles of Agreement.

Black BladeRe: R. Powell#8000907/06/02; 21:15:02

BTW, wasn't Asarco acquired in October 1999 by Grupo Mexico SA? I don't think that Asarco exists as a company anymore. Grupo Mexico is the world's third largest copper producer, fourth largest silver producer and fifth largest producer of zinc and molybdenum. Grupo Mexico is the leading by-product producer, with a total output of approximately 700t each year, mainly from its Santa Barbara and San Francisco del Oro lead zinc operations in Chihuahua and Charcas in San Luis Potosi. Other major producers were Grupo Frisco, that produces 200t each year from its Real de Angeles lead zinc mine. The Real de Angeles mine is to supposedly cease operation. Still, it is quite strange that such a large producer cannot meet its obligation on such a small debt. Cheers!

- Black Blade

Black BladeMexico – The World's Largest Silver Producer#8001007/06/02; 21:38:39

Mexico is the largest silver producer in the world. Production comes from several primary silver mines, with silver also being produced as a by-product of base metal and gold operations. Silver production totaled 89 Moz in 2000. Mexico contributes approximately 17% of the world's total annual output. Four states were responsible for 74% of the country's silver output, listed in decreasing order of output: Zacatecas, Chihuahua, Durango, and Guanajuato. The largest producing company, Industrias Pe--oles, that contributes approximately 40% of the Mexican total. More than half of the company's output is derived from the Proa--o operation near Fresnillo in the Zacatecas State. Penoles' other major mines include the Las Torres mine in Guanajuato and the Naica lead zinc mine in Chihuahua.

- Black Blade

Max RabbitzSector's Real Estate#8001107/06/02; 21:40:52

Yes Sector, Someone at this site turned me on to Doug Noland 48 weeks ago. What an education. You can't buy this at any University I know of. It's like seeing a train wreck in slow motion before reading about it in some dusty old history book modified for political correctness.

Also, Gold is the best kind of real estate. You don't have to pay taxes while waiting and it's transportable. What a deal for times like these.

R PowellBlack Blade#8001207/06/02; 21:56:13

Yes, Asarco is part of the Grupo Mexico company. I would think but don't know for sure that, as such, Grupo Mexico would have no problem paying off $6.3 million or, at least, renegotiating the loan.
I've wondered for a long time about metal loans and whether they are normally simply rolled over when due. Maybe the interest rate changes a little but rolled over just the same. Wasn't the original sales pitch made to central banks to induce lending - interest on metal that otherwise wasn't producing any profit- so why not, from the bankster's point of view, roll over the loan for continued interest. This assumes that they aren't worried about eventually getting physical back. Bankers think interest, not default on capital. They are unaware or don't believe anything that would make them think otherwise concerning repayment. They're probably happy to collect interest on leased metal until kingdom come and a few years beyond if they could without ever recapturing the "principle". They won't let me pay off my mortgage without constantly telling me that the house should be mortgaged!
I've heard that interest on metal loans must be paid in metal. I've never seen this confirmed and, last year, asked David Morgan about this. He said he had never seen any lease forms for metals and thus did not know.
I do believe that silver supply will get tight soon and even 1.5 million ounces will be a significant amount. In 1000 bars, I could create some nice landscaping designs- walls and walkways and small outbuildings with 1.5 million ounces. I guess I'd have to hire a guard. No, I'd watch it myself while selling tickets to visitors!
Any more lease info?

sectorAnd...Max...The Best Part is "They" Don't Know you have it#8001307/06/02; 21:56:16

Nor can "They" ever tax your "Capital Gains"

I prefer to to think of profitable physical gold sales as local currency losses so one ought to be able to book the metallic "Gain" AND write off the currency "Loss".
R PowellMax Rabbitz#8001407/06/02; 22:17:04

Max, if you like Doug's Noland, you might like some of the stuff at longwaves.
Chapman has some thoughts on debt economy collapse too. Basically, can the Fed make money fast enough and convince banks to lend and borrowers to borrow to keep the system going? The Greenman has to keep this train running at full throttle. It will derail at any slower speed.
I hope the link works!

R PowellCorrection#8001507/06/02; 22:29:08

I think the 1,000 ounce silver bars will do nicely for the walls and outbuildings but I'll use the 100 ounce bars for the walkways. They'll be easier to work with and will look better too.
"I say I don't know but I've been told.
The streets in heaven are paved with gold."
But the sidewalks are made from silver bars, just a little smaller than a regular sized brick.
I guess I'd better get some sleep.
Goodnight good people.

Max RabbitzRich#8001607/06/02; 22:43:19

Thanks, I'll take a look. I appreciate Noland so much because he took the time to clearly explain things like collaterized debt obligations and structured finance. It seems to me like modern finance is a very creative attempt to hide risk with paper creations. Currently I tend towards the belief that the Fed will end up monitizing all the bad loans. We shall have the hyper inflation?

Tomorrow I attempt to install a hardwood kitchen floor. Pray for me.

Black BladeGold rush - sure thing or passing fad? #8001707/07/02; 00:54:57,1870,129875,00.html


With currencies volatile and stock markets heading south, some investors are once again investing in gold - one of the few assets that have seen a steady price rise since last year. The price of the precious metal surged to a five-year high of US$328 per ounce last month - a return of 21 per cent in less than one year.

If you are after something to have and to hold, then you may want to consider gold bars or gold bullion coins. Historically, gold has had a strong negative correlation with the US dollar and the continued weakening of the greenback implies that the price of gold will appreciate further. Also, gold has anecdotally always done well in an environment with low short-term interest rates. This is because a government attempting to pump-prime the lacklustre economy using low rates runs the risk of raising inflationary pressures inadvertently. Thus, gold, which is seen as a traditional hedge against inflation, will emerge as a favourite store of value.

'In the first quarter of 2002, gold demand in Japan was 45 tonnes, double that of the fourth quarter of 2001 and triple the volume in the same quarter of the previous year,' he notes. A large part of this demand from Japan came about as a result of the new insurance limits on term deposit introduced by the Japanese government on April 1. Because their deposits are no longer insured fully by the banks, Japanese savers have been channelling part of their wealth into gold. Come April 1 next year, this insurance limit will be extended to include current accounts as well. And should the Japanese banking system and the Japanese or global economy take a turn for the worse, one can logically expect more funds to flow into gold, which is seen as a traditional asset of last resort and has a safe haven status, he added.

According to analysts The Straits Times spoke to, years of structural decline and low gold prices have created a scenario where exploration has been slashed and producers now face the serious problem of replenishing their reserves. Hence, supply may not be readily available. Given rising gold prices, major holders of gold - including the world's central banks - are unlikely to sell their gold reserves. Economics 101 teaches us that when demand rises faster than supply, prices are likely to rise.

Black Blade: An interesting article from Singapore. The topic of declining gold reserves at existing mines is addressed in the latest Daily Gold Market Report. Asia is the next major gold consumer. Current Japanese bank deposits will longer be fully insured come next April 1st. Yes, another "April Fools Day Surprise" awaits the hapless Japanese citizen as they are about to be taken advantage of again by their banks and government. They will seek other means to preserve wealth (unlike the Argentines who lost it all). Much of the Japanese savings will likely be withdrawn from the insolvent Japanese banks before the "April Fools Day Surprise" and some will be transformed into Gold, Platinum, and Silver. Note that this month the Chinese will begin another phase of a 5 step program to liberalize the Gold market (beginning in Shanghai). Soon over 1 billion Chinese will be able to trade in the Gold markets and the convenience of Gold ownership will expand throughout China. That is one huge market in a country where Gold and Silver have traditionally been seen as a safe haven store of wealth. Currently most Hong Kong Gold dealers say that the bulk of their business is from Mainland Chinese coming into the islands. When the convenience of purchases can be made throughout China we shall see Gold demand skyrocket. In a recent article, many citizens of Vietnam have been buying Gold. According to Gold trends – listed by the WGC – Vietnam Gold purchases have reached record levels. Asia is a region on the verge of a Gold buying binge.

Chap XSiochain - Re: link#8001807/07/02; 01:01:40

Here is the link to the post, which contains a link to the actual declaration.

Chap XGold Standard - What a great idea!#8001907/07/02; 01:03:53

6 July 2002.
[Source: FAZ 5.7.02]

July 5 -- STOCK MARKETS WILL CONTINUE GOING DOWN FOR THE NEXT 5 TO 10 YEARS, states London-based hedge fund manager Hugh Hendry in an extended interview with Frankfurter Allgemeine Zeitung.

Stocks will have to crash another 35%, states Hendry, and thereby the "stock market culture will be eradicated."

The top central bankers, and in particular the Federal Reserve, have to be blamed for the disaster taking place on world stock markets. They have pumped the liquidity into the markets. And now, as investors have lost all confidence into corporations and their stocks, this liquidity in ending up in physical assets like gold, raw materials, and real estate.

It all started in 1971, states Hendry, when the dollar was decoupled from gold. Since then, central banks again and again created money to rescue the stock markets. In addition, semi-public agencies like Fannie Mae and Freddie Mac were used to create huge amounts of cheap credit for consumers.

The last stock market bubble, centered around the Nasdaq, was triggered by none other than Alan Greenspan, "who played James Bond, rescuing the world."

Therefore, he wouldn't be surprised at all if the Federal Reserve were to intervene directly as a buyer at stock markets. Greenspan is very worried about the huge liquidity, which he himself created, and which is no longer tied to stock markets.

For the US economy, with all the implications for the rest of the world, there are only two possible scenarios, states Hendry.

First, a long and worldwide recession, triggered by the US, which could take the dimension of a 1930s-style depression.

Alternatively, states Hendry, central banks could create even more liquidity trying to rescue the stock markets. In this case, there will be a huge inflationary push, and in the end investors will loose confidence in any paper values. We would then see the return to a gold standard.

Black BladeEnron Board Knew of Accounting Shams#8002007/07/02; 01:23:14


WASHINGTON (Reuters) - A U.S. Senate subcommittee concluded the board of directors of Enron Corp. "knowingly allowed Enron to engage in high-risk accounting," Time magazine said on its web site Sunday. In a report, the subcommittee also said the board was aware of matters that included off-ledger deals, conflicts of interest and excessive compensation for top officers but did little or nothing about it. The magazine said it obtained a copy of the report.

Black Blade: This is not uncommon. The board of directors are usually friends of the executive leadership. It's a matter of "you scratch my back and I'll scratch yours". Although the board is supposed to look after the interests of the shareholder, they rarely do. It's unfortunate but those are the facts of life in corporate America.

steadyimf/sdr vote#8002107/07/02; 03:58:04

the last annual meeting of the IMF was canceled due to 911 so perhaps thay will hold one this year and possibly approve the SDR allocation.
Paper AvalancheSilver market reaching critical mass#8002207/07/02; 07:53:01

Chapman summarizes the current sitaution in silver very well in his latest report. One might surmize that we are but weeks, or at most months, away from seeing the spot price for silver go vertical.

Paper Avalanche

USAGOLDSunday Thoughts. . . .#8002407/07/02; 10:11:52

Haven't done this in a while, so here goes:

- - - - - - - - - - - - -

A headline in the Denver Post Sunday edition reads:


Anyone who reads my analysis on an on-going basis knows that I've consistently called to question the "hear-no-evil, see-no-evil, speak-no-evil" role of regulatory authorities in the U.S. markets. Not only have I called it to
question, my concerns were surfaced and published here long before they became the concerns of the media and society at large ( and only after high profile corruption and failure in corporate America became daily fare).

To go to the heart of it, I believe that the regulatory authorities' abandonment of their congressionally-mandated mission to provide free and fair markets is the root cause of the problems prominently featured in the media at the
moment, both in the gold and stock markets. This corruption and and these failures -- overlooked and even nurtured by political considerations in BOTH political parties -- goes to the heart of what's wrong with Wall Street,
and points demonstratively to the role of gold ownership as an antitoxin for what ails the American investment portfolio.

If you believe that the Enrons and World Coms of the world are isolated (some think even "culminating") events, then you've missed the point of my analysis and will probably hold onto your stocks until the bitter end -- or
your personal financial collapse -- whichever comes first. These are not isolated or singular events, my friends, they are systemic in nature and the concluding chapters to a long novel thematically based on the all-encompassing
and pervasive breakdown of the post World War II economic order. In other words, we are not talking about the collapse of individual companies here, but the potential collapse of the entire system. If you are not affected
now, you will be in the future. If you think its the other guy's portfolio on fire. Think again. If there's no fire in yours there's probably smoke.

For those who can't let go of the stock market and all its problems -- who think that we've finally reached the end of this sordid chapter in financial history, I will refer you to Gretchen Morgenstern's column in this morning's
New York Times. Morgenstern profiles the analysis of Sean Egan (Egan-Jones Ratings Company) who has a penchant for sniffing out corporate smoke and warned his subscribers in November, 2000 of the upcoming
WorldCom fiasco. He now says US Airways, United Airlines, Continental Airlines, Ford Motor Company and Xerox will all face "significant" problems along the same lines -- all having with debt, or more precisely, debts
they may not be able to pay. And lest you still miss my point let me say that, even with those inclusions, you are still only seeing the tip of the iceberg seated firmly in the path of the Wall Street Titanic.

Denial lies at the heart of the reason why this problem is not going to be rectified easily (and where denial has been subdued, outright corruption might well have taken its place), and denial is at the heart of why most investors
are going to take their hit and slog insistently on with the rest of their lives.

With reference to institutional denial: In that same Denver Post article referenced earlier, former Securities and Exchange chief accountant, Lynn Turner, states "The SEC is not funded, nor is it staffed, nor does it have the
statutory mandate to catch ‘crooks.’" My question to Mr. Turner would be "Then what is the purpose of the SEC -- to put in the run-ways so the ‘crooks’ have a place to land?" I think not. The SEC has failed in the regulation
of corrupt practices -- in its oversight duties -- and the CFTC has failed in the regulation of corrupt practices -- most notably in the gold market (the problems in which they have been warned consistently and repeatedly.) In the
SEC's case, the apologists now say that it is not their duty to prevent financial crime but to gather "information." So. . . "information to what end?" To fill government file drawers? This is a familiar pattern -- accountants,
board members, management, regulators -- a circle of monkeys, arms akimbo, with fingers pointed in either direction. The American public is forced to witness this frustrating spectacle and shake their heads in collective
disillusionment -- fun reading, but not the sort of thing which generates market confidence -- and even more threatening, confidence in the society as a whole.

With reference to personal denial: Also in this morning's New York Times, the front section features an article by Alessandra Stanley titled:


The point of the article is that psychotherapy, as you might have guessed, has become all the rage with major stock players, traders, investment advisers and the like. One of the primary disorders being treated is a special kind
of anxiety having to do with selling one's holdings -- the psychologists have dubbed it "divestiture anxiety." One patient told his analyst: "I can't seem to let go." When asked if that sounded familiar, the patient said that it
reminded him of "trouble letting go of his mother when it was time to go to school." Of course, it goes deeper than that and the article avoids the problems of not being able to get out if you happen to manage one of the larger
mutual funds, or if your stock halves in the course of two or three trading days, or if its stuck in a corporate or government retirement plan where the chief investment officer is similarly afflicted. One bold hedge fund manager
claimed that taking drugs like Prozac diminished one's anxiety about the end of the world scenario which means "you are not as anxious as you should be about an obvious downside."

So get out the prozac and let it ride. "I'm losing everything!!! Whoooooooooopeeeeeeeee!!"

- - - - - - - - - - - - - -

Fortunately, most gold investors are no so easily drugged into market submission, nor do they believe everything the government tells them, nor do they believe that Alan Greenspan can pull all the levers, all the time, come hell
or high-water. They used to laugh at us. Who's doing the laughing now?

We will be open for business Monday selling our own version of therapy:

Gold in the portfolio.

Mr GreshamThe Silence of FOA#8002507/07/02; 10:12:38

Haven't caught up on this weekend's posts, but looks from a glance like some good stuff from Max and RPowell. Have links up to read on "Debt" collapse, etc. Topical to the Max, indeed!

(My FOA thought is that the guy likes to be out ahead of the curve, not just hang around saying "I told you so." So, he's either totally gone -- I hope he misses us enough to come by and say HOWDY! -- or he's just letting us watch events and match them up with his Trail writings. And -- if he's on to something new, that would be nice to hear about, too.)

How does gold do in deflationary debt collapse, the kinds we see after accounting scandals reveal empty balance sheets? FOA's take is that Greenspan will liquefy the bad debts with new e-cash, leading to hyperinflation.

I'm guessing that the money won't be put out there to rescue your jumbo house, but just the creditor who lent you the jumbo mortgage. You'll still have to work out your debt with the Fed's designated receiver, and your house price won't be inflating you out of your debt, either.

The key is "WHERE is the now-paid-off creditor going to put HIS money?" after Greenie buys his debt paper? Lend it out again in an imploding asset scene? No. It's going to get parked in highly liquid, currency-collapse-insulated vehicles, waiting to buy up the assets at the bottom. And, it's going to seek momentum.

This is where all of the currents funnel the remaining (and any newly "manufactured") cash into the few available real, physical, and unleveraged assets available. Everything else gets starved for liquidity. Bingo!

USAGOLD / Centennial Precious Metals, Inc.How to Protect Your Wealth through Private Gold Ownership -- An Education at Your Doorstep#8002607/07/02; 11:18:38

ABCs of Au by MK

The ABCs of Gold Investing

"Gold will play a critically important role in American investment portfolios in the years to come. This book provides investors a basic education on private gold ownership from one of the nation's top experts." --Rep. Ron Paul, Texas, U.S. House of Representatives

Please Remember: It is your purchase from USAGOLD / Centennial Precious Metals that nourishes these pages.

TownCrierWhether they do or not, be aware of what governments CAN do in a tight spot#8002707/07/02; 11:31:49


BUENOS AIRES, Argentina, July 6 (Reuters) - Despite pressure to stop Argentina's financial system from collapsing, President Eduardo Duhalde crushed on Saturday market hopes he would forcibly transform billions of dollars of frozen bank deposits into bonds.

Instead, his economy ministry announced details of some new incentives that encourage Argentines to swap their savings for bonds...

"There will not be mandatory bonds," Duhalde told a news conference. He added that the government would look for other ways to save from collapse banks which lost billions of dollars after a bank freeze and a currency devaluation.

This week there was widespread market optimism the government would forcibly switch deposits into public bonds, a move that many analysts say is the only way of stopping banks from going bankrupt.


Bottom line: Such is the problem when you borrow short-term and lend long-term, coupled with a market that is perhaps too shallow for effective Central Bank open-market and Lombard operations without running a great risk of hyperinflation as a consequence.

Don't let yourself and the liquidity of your own portfolio be caught standing in the rain. Preparation, by definition, is something you do while the sky is still blue.


Mr GreshamPimco#8002807/07/02; 11:35:12

Thanks, misetich!

With the great insights from McCulley & Bill Gross, you wonder if at some point they will admit they shouldn't be running a bond fund ("Sure, we'll continue to do the best we can for you who want to stay in bonds, but...") and jump the divide over into something that really will preserve capital.

Hey -- if monetary "management" really WERE done responsibly, as the Fed would like all textbooks to assert it is, would we even be here talking about gold?

The sooner they shake it all out, the sooner we all could begin to talk about something else, something that will promote the _productive_ use of assets, and not just be a holding operation to survive the downslide. Meanwhile, they just want us all to mistake monetary THEORY for actual behavior.

Come over here, Charlie Brown, and kick this football...

Mr GreshamWoodie#8002907/07/02; 11:59:33

"what to DO with it?"

Nothing. Absolutely nothing.

(It's a very Zen thing we're into here ;-) Oh, yeah.)

misetichThe Trouble with Debt by Sean Corrigan#8003007/07/02; 12:12:39


Thus, another tenet of the Greenspan Model proves to be invalid. Not only were profits often fraudulently overstated--as well as being falsely, if legally, enhanced by stock-options accounting--but "growth," too, was slower than reported in the boom years.

Do you know what was real, though? Incontrovertibly, unimpeachably, and rigorously recorded? Debt--even if the ultimate title to much of it has been obscured by Wall Street's skills in financial engineering. Debt. Liabilities. Owing money. Claims on yet-to-be-earned income. A lien on the future. A mortgage on Tomorrow. Debt. The real, four-letter legacy of Alan Greenspan and his former accomplice, Bob Rubin.


FitchIBCA painted a somewhat bleaker picture, posting a 13.4-percent default rate on its high-yield universe, with any improvement in overall ratings a mere statistical artefact resulting from the fact that even as so many CCC and lower-grade bonds had defaulted--fully $34 billion out of $120 billion late last year--several "fallen angels" had been newly included, as they in turn dropped out of the investment grade rankings.

S&P was perhaps the most sombre, noting that "the second half of 2002 continues to be challenging." Standard & Poor's also pointed out that, while 60 percent of U.S. ratings outlooks were currently stable, negatives, at 35 percent, outpaced positives 7:1.

Moreover, the firm was at pains to point out that pressure was not restricted to tech, telecom, and energy, but that the malaise was much more widespread.

Autos were characterized thus: "financial performance deteriorated precipitously." In capital goods: "the extent of the weakness cannot be overstated." Banks? "The majority of the 25 percent subject to change have a negative outlook." Energy: "Dismal."

Chemicals, forestry & mining, auto supply, consumer goods, media & entertainment, airlines--all had more companies with negative outlooks than with positive. Only health had parity between the ups and the downs (thank you, socialized medicine!).

As for those banks, while earnings were a record $21.7 billion in the first quarter--largely due to the Fed's largesse and the corresponding aid to net interest income--the FDIC warns of two major risks; that high loan-to-value consumer loans are not performing as well as their grantors’ models predicted (Capital Insight Rule I: The Model is NOT the Market) and that there are heavy exposures to commercial property in some of the districts worst affected by the bust.

For thrifts, there are other worries. For the first time in four years, loan-loss provisions do not fully cover noncurrent loans, and there has been a sharp jump in problem thrift assets to a $15 billion level not seen since 1994.


Dr. Debt may well find it will not just be equity investors and overseas dollar holders who come to curse him. Overburdened homeowners and even those who count these debts and their derivatives among their own savings may well come to do likewise before the crisis passes.


"Do you know what was real, though? Incontrovertibly, unimpeachably, and rigorously recorded? Debt--even if the ultimate title to much of it has been obscured by Wall Street's skills in financial engineering. Debt. Liabilities. Owing money. Claims on yet-to-be-earned income. A lien on the future. A mortgage on Tomorrow. Debt. The real, four-letter legacy of Alan Greenspan and his former accomplice, Bob Rubin."

Greenspan, Rubin (now O'Neil), and the rest, the architects of Debt - Debt Engineers - and rest assured that they have the cure - More debt

Got gold?

misetichFannie Mae Distorts Markets #8003107/07/02; 12:24:34


An Affordable Housing Bubble
Fannie gives banks the ability to lend potential home buyers funds that they could not otherwise qualify for, with which they may purchase a home that they could not otherwise afford. For example, the Wall Street Journal reports that home loan mortgage payments as a percentage of disposable income are at record levels due to "changes in mortgage underwriting standards," and that the average down payment has declined over the last decade from 10 percent to 3 percent, with zero down payments not uncommon.[8] Fannie claims that it is using its regulatory privilege to decrease the cost of the credit to home buyers.

But does this make housing more affordable? The housing market will respond to an increase in demand by some combination of increasing supply and/or increasing prices. Research by Bert Ely, author of a study on the GSEs for the American Enterprise Institute, has suggested that subsidizing mortgage loans does not do much, if anything, to make housing more affordable because most of the subsidy goes into price increases rather than supply increases. His research shows that only a small increase in home prices is necessary to fully capitalize the interest rate subsidy.[9]

Ely's research also indicates that a portion of the demand subsidy goes toward an increase in the size of homes.[10] Ironically, it is this increase in home size that Raines cites as another factor driving demand for its lending activities.

The GSEs have linked home prices to the market for risk-free debt securities. Domestic and foreign buyers purchase these securities. In fact, they are a significant fraction of the capital accounts surplus funding U.S. the trade deficit. Fannie's continued ability to find buyers for riskless debt securities allows it to create what appears to be an increasing demand for housing by magnifying the amount of systemic risk.

Most home owners are completely unaware of this process, believing instead that their home prices are driven by the factors similar to those Raines cites, and that home prices move in only the upward direction. This process is not unlike the way small investors approached the stock market during the stock market bubble.

The fallacy of Raines's demand-side case for subsidized mortgage credit is that when a demand subsidy exists, home prices are partially a byproduct of the demand subsidy. Raines's claim that Fannie is simply stepping in the gap to supply much-needed credit is disingenuous. Increasing home prices are partially a consequence of Fannie's credit subsidy. Of Raines's list of so-called drivers of credit demand, most are side effects of the leverage and declining credit quality that Fannie has created.

If Fannie's policies enable some buyers to obtain loans credit that they could not otherwise afford, then for them, the cost of buying a home will be lower--"more affordable." As Raines has claimed in one of his speeches, "The suggestion that too much capital is going into housing is not new. We heard it a lot in the beginning of the 1990s. Fortunately for the 10 million families who became homeowners during this decade, the theory did not get much traction."[11]

It is not surprising that the recipients of a subsidy were pleased with the result: demand for a free good always exceeds supply. The borrowers, the banks, and Fannie's shareholders are quite happy with this arrangement. Taxpayers will probably remain unaware of their obligation until the bill becomes due. Were interest rates to rise, housing prices to turn down, or the ratio of mortgage loan defaults to increase beyond Fannie's reserves, a taxpayer bailout reminiscent of the S&L bailout would probably be called for by holders of GSE debt.


As chronicled by numerous observers of the current financial scene,[14] Fannie funding is increasingly used for "cash-out" refinancing and home equity loans, the proceeds of which are spent to pay down credit card debt, or to fund more consumption items. The long-term result of increasing consumption at the expense of savings investment is that capital is consumed without being replaced. An economy with less capital can produce fewer consumption goods. Overall wealth is diminished.

An economy grows, i.e., increases its ability to produce consumption goods, when people save enough to fund the accumulation of more capital. Thus, wealth creation depends on savings. This is the only real way to make most things more affordable for the bulk of the population. Only the accumulation of more capital goods will enable business firms to produce more consumption goods.

Raines may be in a dream business, but the net result of Fannie Mae's actions in the credit markets is a nightmare of resource misallocation and massive systemic risk.


Murphy's Law Mr. Raines, Murphy's Law

Got gold?

misetichRichard Russell on Gold#8003207/07/02; 12:40:17


The money supply figure for the latest week shows the broad M-3 money supply up a mind-blowing $39.7 billion. M-3 is now growing at the annualized rate of $2 trillion a year. I've been saying that when the bear market hits, the Fed will fight the trend "tooth and nail." I was wrong, the Fed is fighting the bear "tooth and nail and fists and feet and elbows and knees." The classic definition of inflation is an unusual growth in the money supply. If so, then boys and girls, the US is inflating -- big time.

I was almost shocked to see that the latest Confidence Index (CI) figure out of Barron's was 80.0, a huge drop from last week's figures of 83.3. The CI is Barron's High-Grade bond index divided by Barron's Medium-Grade bond index. The steady decline in the CI indicates that the bond market is increasingly worried about the credit-worthiness of the nation's corporations. The old rule was that the CI (sophisticated bond investors) moves two to four months before the stock market moves. If so, watch out.

A lot of subscribers are asking me for significant support levels for gold and the gold shares. I don't want to talk about such levels, because all such supposed "levels" will do is knock gold holders out of their positions, assuming they sell if such levels are violated. If this is a bull market in gold, which I believe it is, then you should take your position in gold items and hold them until the bull market fully expresses itself. This means that you should not assume a position that will worry you if gold and gold shares decline.

Remember, just as the bear wants to go down while taking the greatest number of stockholders with it, the bull wants to advance while taking the fewest investors with it. Therefore, this gold bull will try to shake as many gold investors off its back as possible as it rises. The best way to do that is to violate so-called support levels. Advice -- take a gold position that you can sleep with and forget about trading gold.

With the Fed pumping up the money supply at the rate of $2 trillion a year, even if gold never goes anywhere, holding gold items (real money) is logical and makes sense. Also, bull markets start in areas where most people are not. Who do you know who owns any physical gold or gold shares? Not many people. If fact, I'm flooded with people who ask me where to buy gold coins. They really have no idea.


Lifted from PrudentBear' Post - Thanks to Jessel

Got gold?

misetichLeftists could dominate Brazil presidential vote#8003307/07/02; 13:01:24;sz=336x280;ord=2002.


BRASILIA, Brazil, July 7 (Reuters) - Brazil on Sunday faced the possibility of two leftist opposition candidates squaring off in the October presidential election after two polls showed the center-right government's candidate sharing second place.

Such a scenario, which could further unnerve financial markets fretting about a turn to the left in Latin America's biggest country, has never taken place in Brazil's democracy.


Keep on eye on this possible financial explosive trouble spot- largest SA economy - US bank interests are heavy as are imports from US

Got gold?

BoilermakerWoodie's Dilemma#8003407/07/02; 14:01:03

Scrooge McDuck is a marvelous model for a gold bug's "what to do with it".
kludgeThar's gold in dem dare archives#8003507/07/02; 14:23:51

As luck would have it, I began early last week to reconsider the sector weightings of some investments. Friday's market action provided the impetus get out of some losers while the getting was good (or at least better), so consequently I spent a fair amount of the weekend reading, studying, and debating with myself where the new home for this cash should be.

After some more or less random browsing of newer analysis, commentary, and charts - I ultimately found myself in the USAGOLD forum archives. With as many browser windows open as my poor, tired PC would allow: I went day-to-day thru the earliest archives (got to 12/99) while constantly referring back to historical price charts, news archive sites, and the linked commentaries/predictions of the then current day. All with the benefit of 20/20 hindsight. The results were impressive, and I thank the posters then (some gone, many still here, one or two due back soon?) for their courage to "make the call".

While it'd be no surprise to those that read here where a significant chunk of the cash will be going, just wanted to thank CPM for providing this forum, and invite others to make use of this valuable repository and draw their own conclusions.


Ten BearsScattershooting while wondering what happened to ORO and PANDAGOLD#8003607/07/02; 17:02:35

The Poker Game-another analogy
How would you like to play poker where one player (the banker) had the power to create an infinite number of chips, loan them to other players, and collect interest on the loans as well as taxing a portion from the winner of each pot? Soon the banker would own not only all of the players' chips, but would also own the players he had loaned money to---not an easy game to win---unless you are the banker. Oh! Also, if you leave the game solvent, a portion of your chips is confiscated as a 'game leaving tax'. Your kin, who take your seat at the game, will be further disadvantaged with each successive generation.

David Ricardo's "Iron Law of Wages" in modern times= "trade, the race to the bottom". Remove all restrictions on importation of goods, and capital will move to the lowest labor and environmental cost regions, driving down worldwide wages to subsistence levels= "Socialism for financial corporations; aid as needed in exchange for control of industrial corporations; and cutthroat competition for natural (non-corporate) individuals." (Based on an article from The Royal Danish Ministry for Foreign Affairs)

Robert M. Hutchins's speech to a 20th century university graduating class: "The greatest, the most insidious, danger you will face is that you will be corrupted. Your friends will corrupt you, your business associates will corrupt you, and the system will corrupt you. It is this corruption that you must avoid." Recent news headlines indicate that his advice was not well received.

Cherokee neighbor says ... "the only people who can make corrupt corporate chiefs look good are politicians...they sell their services to the corporations. What does that make them?"

Alexander Del Mar noted in "History of Money Systems", published in 1895..."Coinage is the surest mark of sovereignty." Coinage in a more modern sense can be construed to mean the creation of money. That power (and sovereignty) resides with the Central Banks. This was pointed out recently by a post on this very board. Del Mar also observed that when a new order was in process of being established, new coins were struck with different names to note the change. Will we get new money and new names as FRN's depreciate at unprecedented rates?

Del Mar's research is extensive and his book is a good read...there is a chapter on the "Sacred Character of Gold". Also see "The Science of Money" published in 1896 from the same author.
__ Ten Bears

sectorLA Shooter was an Egyptian Jihad Islami Agent#8003707/07/02; 17:17:16

Met with Osama Bin Laden's top deputy in 1998

From DEBKAfile's Exclusive counter-terror sources
7 July: Hesham Mohamed Hadayat was no stranger toEl Al's Los Angeles airport office.

According to DEBKAfile's counter-terror sources, the man who murdered two Israelis on the El Al ticket line at Los Angeles airport on July 4th worked for the American Mercury ground service company from 1993 (one year after he arrived in the US) until 1998, when he left to set up his own limousine service for air passengers.

Exactly what he did at Mercury is vague, but during his five years in their employ, this former bank clerk from Cairo was free to move around Los Angeles international airport. Our sources reveal that during that time, he aroused the suspicions of El Al security personnel who warned airport security. When no action was taken, they put him under surveillance. El Al asked Mercury to rearrange Hadayat's shifts for periods when none of its planes were scheduled, which Mercury agreed to do

After the 4th of July attack, in order not to clash directly with the US authorities which refused to identify it as a terrorist assault, El Al and Israeli security spokesmen said that even if the Egyptian gunman was not a proven member of a terrorist group, his crime ranked as an act of terror.

However, Sunday, July 7 the influential Arabic London-based Al Hayat followed the original DEBKAfile disclosure of July 5 - that Hadayat was a member of the Egyptian Jihad Islami - and took it a step further. According to the Arabic paper, the Egyptian gunman met Dr. Ayman Zuwahri, the Jihad Islami chief who is Osama bin Laden's deputy, twice in California – once in 1995 and again in 1998.
According to DEBKAfile's sources, it was at that second encounter that Hadayat was told to leave his job with Mercury and given capital to set up his small limousine firm, so as to take advantage of his access to airport facilities and airline personnel contacts, while at the same time shaking off any watchers.

The Al Hayat report places Dr. Zuwahri in California unobserved less than three years before the 9/11 hijacking attacks in America and a year and a half before the Egyptair disaster (see first DEBKAfile story).

The Hadayat family lives in Cairo. His father, a retired Egyptian army general, and his uncle, a former minister of science, admit that Hesham was a fervent Muslim who did what he could to encourage everyone to read the Koran. They say he was happy in Irvine, California. His neighbors in that Los Angeles suburb tell a different story, that he hated Israelis and Jews and asked one of them to take down the American and US Marine flags put up after 9/11.

From all the foregoing, our counter-terror experts cite Hesham Hadayat as a classical a Qaeda plant. He was positioned at Los Angeles airport in the early 1990s to bide his time for the right moment to carry out a terrorist attack against an El Al flight. When Hayat's handlers saw he was under observation, they made him lower profile. His assignment was revised to fit his role as a limousine driver familiar to the Tom Bradley terminal staff and free to move around - namely to shoot down a line of passengers waiting to board an El Al flight.

Although from 1994 or 1995 at the latest, Hadayat was brought to the notice of American security, was under the eye of El Al security, and the Egyptian authorities must have known about him, he was never investigated - even after 9/11. The FBI has admitted he figured on no watch list for terrorists. This left him perfectly free to carry out his mission on behalf of the extremist Islamic organization – all of which raises some hard questions about the way in which the war against terror is carried out in the United States.
Another black eye for the FBI and CIA…This shooter was a deep underground operative. No wonder the Feds can't admit that fact.

Black BladeTop fund manager sees stock markets halving #8003807/07/02; 17:59:28


Hugh Hendry, Europe's best-performing fund manager, believes equity markets will fall a further 50 per cent before bottoming. In the last three weeks Mr Hendry says has sold off a third of his equity portfolio to seek the sanctuary of government bonds. Until recently Mr Hendry relied on the fact that a 'golden' 5 per cent of shares will rise even in a bear market. He identified these by following the flow of liquidity that central banks have been pumping into the economy by aggressively cutting interest rates. Rather than flowing into the equity markets, as has historically been the norm, this liquidity has flooded into assets such gold, property and commodities.

Mr Hendry played this trend by buying equities that were proxies for these assets, such as housebuilders, property companies, food manufacturers and tobacco companies. However, in recent weeks the market has turned against even these stocks. "I have been consistently 100 per cent invested for the last three years, but I am now selling stocks," he says. Mr Hendry admits he is not certain what will happen next, but he is raising the possibility that we may be heading for a 1930s-style depression, rendering it impossible to make money from the markets.

Black Blade: only a 50% decline in the equities markets? Quite the optimist. I agree that we are likely headed into a new Great Depression. There is absolutely nothing holding up the markets – certainly not growing profits.

Black BladeIn Mutual Fund Reports, a Midsummer's Nightmare #8003907/07/02; 18:13:23


Before you peruse your second-quarter mutual fund statements, you may want to pour yourself a drink. A stiff one. Chances are the news is not going to be good. In fact, from value to growth, small-cap to large-cap, the news about mutual fund performance over the last three months is pretty much across-the-board awful. Even fund styles that did fairly well in the first quarter, such as large-cap value, suffered in the second, unable to overcome the deluge of scandal that swamped the stock market, sent investors scurrying for cover and pulled down shares of just about any firm with a complicated balance sheet.

In the global arena, gold dominated with the 11.11 percent return, while Japanese funds provided the only other gain, a slim 3.83 percent advance driven by signs of recovery in that nation's long-battered economy. Latin American funds fared worst, plunging 19.37, a drop analysts blamed on reduced export potential for Mexico, as its biggest trading partner, the United States, continues to struggle.

Black Blade: It appears that the banks are at it again tonight in OZ. Some fund/bank is working hard to push Gold prices down during somewhat illiquid trading conditions. It could get more "interesting" when a real market opens in Europe or the US. It should be interesting to watch the equities markets as Friday's run up during extremely thin trading could reverse sharply unless "official" or suspicious "institutional" trading suddenly appears. Of course the end of quarter trading is also done for now – so "normal" institutional trading should be subdued.

mikal@BlackBlade, All#8004007/07/02; 18:36:44

As you know, some of Friday's US equities rally has been attributed to relief and release of pressure built up over July 4th terrorism worries. Since Friday was a shortened trading session, has all this pressure been released? And will many traders remain on the sidelines waiting for Bush's, Tuesday State of the Union speech? How will they react to it? TIA!
misetichRich lost $2.6trillion in financial markets in '01 #8004107/07/02; 18:37:55


LONDON, July 8 (Reuters) - Rich investors on both sides of the Atlantic lost $2.6 trillion -- or six percent of their wealth -- in 2001's plunging markets, according to a survey.

The mountain of assets wiped off in just one year is roughly the size of the entire private banking industry in Switzerland, where wealthy client assets managed by banks are estimated at between $2 trillion and $3 trillion.

"Few investors or regions were untouched by the destruction," said the benchmark industry survey published by global management consultants Boston Consulting Group (BCG).

The BCG, which surveyed more than 60 leading private banking firms representing total assets of $3 trillion, said 2.3 million households around the world slipped below a wealth threshold of $250,000 in net assets last year.

The rich are alarmed by the wealth destruction and are becoming risk averse, shifting to cash and money market funds, it said.

"Many competitors are still assuming unrealistic levels of growth...Institutions must actively manage their costs instead of focusing too narrowly on revenue and asset growth," it said.

It said 2001 industry revenues fell an average 11 percent, commission income 21 percent and asset fee income eight percent while compensation costs climbed one percent, marketing expenditure five percent and operational costs two percent.

As many banks managing money for the rich scale back ambitious expansion plans, bankers expect more job cuts.

Barclays Plc , Britain's fourth largest bank, has said it is mulling cuts to private bank staff costs due to tough market conditions which banking sources say could affect up to 15 percent of jobs in the international business in London.

Coutts & Co, private bankers to the Britain's Queen Elizabeth, says it is restructuring its London business to focus on profitable domestic clients.

In May, Britain's loss-making Schroders Plc shed top private banking executives and axed 19 jobs just a year after creating a private bank.

Citigroup Inc , the world's largest financial services firm, has recently announced cuts in European private banking jobs. Germany's largest Deutsche Bank has also taken the knife to its loss-making London private banking unit.

The survey said many banks were pursuing unprofitable low-balance accounts. On average, half of client accounts at most firms held balances below stated minimums, it added.


New Paradigm, New Economy - what a scam!

Got gold?

misetichBush under pressure on corporate fraudsters#8004207/07/02; 18:41:52


US senator Tom Daschle (pictured left), the Democratic leader, on Sunday called for the release of the case file of a 1991 insider trading investigation of George W. Bush, saying discrepancies in the president's account have raised new questions.

Mr Daschle's comments raised the pressure on the administration before a speech by Mr Bush on Tuesday, in which he is expected to announce tougher criminal penalties for executives who commit fraud. They also come as the Senate prepares this week to vote on tough accounting reform legislation, a bill the White House opposes.

The Democrats further turned up the heat with the publication of a 60-page report by the Senate sub-committee on investigations, chaired by Senator Carl Levin, in which the Enron board is charged with contributing to the energy trader's collapse by ignoring repeated warning signs that wrongdoing was under way among executives.
"The president would do well to ask the SEC to release the file . . . let everybody see just what is there," Mr Daschle said on the CBS News programme Face the Nation.

The administration has made a concerted effort in recent weeks to appear tougher on corporate wrongdoing, with Mr Bush speaking forcefully against the $3.8bn (£2.5bn) accounting restatement at WorldCom, and Harvey Pitt, SEC chairman, quickly filing a fraud suit against the telecommunications conglomerate.

But Mr Daschle said the misleading statements about the insider trading inquiry - and the acknowledged failure of Harken to report properly Mr Bush's sale of company stock - highlighted the administration's lack of responsiveness in the wake of recent corporate scandals.

Documents obtained by the Centre for Public Integrity, a watchdog, said the SEC found in 1991 that Mr Bush had insufficient knowledge of Harken's losses to have traded improperly on the information when he sold his stock.


Lets see...November elections around the corner - it will get "interesting" as they turn the knives on each other -

Got gold?

goldfoolGold and the precious metals - investment of last resort#8004307/07/02; 18:49:08

Hope springs eternal for the sheeple until employment and real estate values start eroding then look for a major shift into the PMs. Now that the Fed has lured many people into refinancing their mortgages with low interest rates and sucking the equity out their homes to keep the economy propped up, what's next on their agenda? Can they keep the stock market buoyed up long enough to allow corporate America to climb out of debt and start reexpanding? I doubt it. Consumer spending is showing signs of fatigue as accounts dwindle and the stock market wealth effect turns into the poverty effect ( Wait until the next quarterly 401K statements are sent out, do you think the little rally on Friday was to soothe the nerves of a few frazzled investors? ) . Insiders, the pros, and foreigner investors have seen the writing on the wall and are bailing out of the SM in droves as corporate scandals run amok. The only thing that is probably providing any comfort or solace for the sheeple is overinflated real estate values. People keep pouring money into upgrades ( pools, remodels, etc. ) and new purchases just as they poured money into the tech stocks at the top during the late nineties thinking home values will only keep appreciating. The consequence I'm afraid is going to be the same. Pretty soon unemployment is going to take it's toll and consumer spending is really going to snowball downward. When it does new construction and real estate values will plummet with demand and with no jobs many will default on their mortgages, credit cards, and car loans. Bankruptcies will skyrocket. The Fed has so far been able to control the exodus out of the SM by manipulation of key economic numbers, indexes, currencies, and commodities however pretty soon the dike is going to burst and a lot of capital is going to be desperately looking for a new home and that could be the PMs, the investment of last resort. The central bank selling of reserves in my opinion is nothing but a big bluff as up to 35% ( according to some estimates ) has already been loaned out. The cabal with their paper games will be overwhelmed and be forced to cover. Hopefully the government will take no extreme measures ( such as confiscation ) and let the markets find a natural equilibrium. What to do until then? Just lean back and consider the undulations and machinations of the markets as entertainment.
misetichRhetoric raised in JP Morgan's Mahonia trial#8004407/07/02; 18:54:35


Alleged fraud at WorldCom may be preoccupying markets. But a fierce legal battle is developing around another big US corporate scandal - the collapse of Enron - which could have important ramifications for both Wall Street and the insurance industry.

At issue is whether 11 insurers must pay nearly $1bn to JP Morgan Chase, Enron's adviser and one of its principal creditors, on surety bonds used to guarantee commodity deals between the US bank and the energy trader.

The trial of the case is not due to begin until December 2 - coincidentally under the same New York judge, Jed Rakoff, who will hear the Securities and Exchange Commission's fraud suit against WorldCom next year.


Chubb, whose Federal Insurance subsidiary is one of the 11 being sued by JP Morgan, raised the temperature two weeks ago by filing a direct claim against JP Morgan, alleging that the bank "surreptitiously lent money to Enron, by way of Mahonia, and expected to be repaid . . . by Enron, with interest" directly or via other offshore vehicles.

Such allegations have set regulators, Congress and prosecutors including Robert Morgenthau, the Manhattan district attorney, on the trail of JP Morgan, in search of evidence that the bank misled investors.

In making its case, however, JP Morgan has had to detail the nature of its own pre-paid forward commodity deals with Enron. The bank insists that the underlying sales of oil and gas were real transactions, but it says everybody, including the insurers, "knew that the [Mahonia] deals were part of a structured financing transaction for Enron's general corporate benefit".

What interests regulators is whether these were in reality loans that the bank did not declare. But to describe such deals in that way, JP Morgan suggests, is to over simplify what was a complex, but legal, structured financing technique.


Chubb declines to comment on the JP Morgan counter-claim. But the insurers are also probing sensitive territory for the bank, which was slow to detail its exposure to the surety bonds last December. Part of Chubb's complaint is that JP Morgan propped up Enron because, without the additional financial support, the bank risked losing its other outstanding loans.

The insurers have only recently won access to more than 400,000 e-mails and 350 warehoused boxes of documents related to the case, and JP Morgan is seeking further evidence of other surety bond contracts written by the insurers.


Will stay on the JP Morgan TRAIL...without deviating too far from FOA "wink, wink"

Got gold

slingshotFeeling Good Tonight.#8004507/07/02; 19:00:37


Welcome all new posters. Looking forward to reading your point of veiw on what is happening with Gold. Yepper, they are at it again trying to push the POG down again tonight. Can you blame them? They're in deep Kim Che. As for Another, FOA and all the rest, I have the feeling they are lurking. Waiting for the right time to come back, center stage.

Yea, I await the day.
Good fortune comes our way.
And we'll ride down the Kings Highway.
Tom Petty, "Kings Highway"

Thinking Positive.

misetichDollar Falls as Japan's Shiokawa Says Currency Likely to Weaken#8004607/07/02; 19:09:36


Japan's Finance Minister Masajuro Shiokawa said Saturday that many of his counterparts in other countries have a view that the dollar is weakening, and ``may fall to about 115,'' he told reporters after the Asia-Europe Finance Minister's meeting in Copenhagen.

``Shiokawa's comments led to the dollar's decline as they hint Japan may have changed its stance to tolerate a stronger yen before selling it,'' said Yasuo Kayamoto, vice president for foreign exchange at UFJ Bank Ltd. In the past months, ``Japan's yen sales were the only supporter of the dollar.''

Maybe they are getting wiser, maybe they're not telling the truth - maybe they know they can't fight the market-

Time will tell

Got gold?

Mr Greshamgoldfool#8004707/07/02; 19:10:45

That was a fine summary -- if I had to give someone my overview of the economic picture in ~200 words, I would borrow yours. Each sentence segues to another facet of what is around us, and points to what lies ahead of us in that department. Thank you.

I just saw a friend's $35,000 paint job on his house last night. He borrowed into equity to do it. He thinks he's a house millionaire. He already knows I think he should sell it and convert his remaining equity to "other forms", so I don't nag him about it anymore. Someday that 35k will be grocery money he doesn't have.

Sheesh! What a Doomer I am! Somebody stop me.

But when you think that 95% of all national economic policy since 1940 has been to AVOID a return to the 1930s, you just gotta put in a vote for the "Return of the Repressed" theory and say that what they've done overall is a PERFECT set-up for making it happen again.

misetichEuro will gain parity with dollar, says Prodi #8004807/07/02; 19:21:35


"I think that the euro will have in the future similar rate, similar dignity, similar weight as the dollar," he told a forum of government officials, diplomats, academics and businessmen here after delivering a lecture on Asia-Europe ties.

"Europe, when we shall arrive at 500 million people, we shall represent by far the biggest economic entity in the world," he said, referring to the moves to expand the European Union to around 25 members.

Prodi was replying to a question on the possibility of the single European currency increasing its share as part of the foreign reserves of countries worldwide currently dominated by the US dollar.

"We have given birth to a baby and it will grow big," Prodi said at the forum.


CB's holding vast amount of US $ reserves and little else must be getting a bit "worried" as they see their "just good as gold theory, sold to them in the last 20 years" being flushed down the proverbial toilet

Gold has no substitute

Got gold?

misetichBrazil's Dollar Denominated Debt Doomsday Machine: David DeRosa#8004907/07/02; 19:28:53


New Canaan, Connecticut, July 3 (Bloomberg) -- Brazil's Arminio Fraga, the former hedge fund manger turned central banker, could easily say he has hunted with the hounds and run with the hare.

You will remember that before Fraga took over his country's central bank in 1999, he worked for the Soros hedge fund. Soros, for many, has long been the lead dog in the hedge fund hunting pack.

Fraga's problem is that Brazil is now the number one rabbit in the field. One of the hunters has become one of the hunted and Fraga -- now Brazil's central banker - is having a hard time outrunning the hounds.

The source of Fraga's problems and Brazil's tribulations is presidential hopeful Luiz Inacio Lula da Silva. Lula is well poised to win the Oct. 6 election.

What worries investors is that as president, Lula will order Brazil to default on its debt. Or he might demand re-negotiations between Brazil and its creditors, which amounts to the same thing.

The odds that Lula will get elected and become Brazil's next president have caused the Brazilian currency to fall 19 percent since March.

If you really want to understand the explosive nature of Brazil's financial situation, consider that it owes $132 billion in debt denominated in dollars.

Doomsday Machine

This is the doomsday machine I referred to in the headline. For as the real sinks, Brazil's indebtedness, measured in terms of its own currency, climbs higher. Since March, the value of Brazil's debts in local currency has increased by 19 percent, or the equivalent of $25 billion dollars.

Where have we seen this before? Lots of places, mostly emerging markets nations. My favorite was Mexico, a country that before abandoning its fixed exchange rate for the peso in December 1994, converted substantial portions of its government debt to dollar-linked bonds.

When the peso exploded, the government went bust. Bust meaning it had to call on the U.S. and other nations as well as the International Monetary Fund for emergency funding.

Dollar-denominated debt is popular with emerging market nations because whereas capital markets are shallow in their own currencies, the dollar-based market is as deep as deep can get.

An Extraneous Factor

Yet fears about Lula are driving Brazil toward bankruptcy. The potential access to money is greater when Brazil taps the dollar debt market, but the country took on an unhedged -- I would argue speculative -- position when it borrowed in dollars. In effect, Brazil is short dollars and long on the local currency when it comes to dollar-denominated debt.

At this point, I would normally expound on the danger of having external dollar-denominated debt in conjunction with a fixed exchange rate regime. That is a witch's brew that took down most of Southeast Asia in 1997, not to mention Russia in 1998 and Argentina last year.

But Brazil already abandoned its peg for the real in 1999. Since then the real has been floating.

Instead, what we have here is a case of a floating exchange rate that is plagued by a crisis of political trust.

And the sad truth is that Fraga probably can't do much about it. Fear of Lula may literally drive Brazil bankrupt.


JP Morgan, Corporate Accounting Fraud, Fanny Mae, Life Insurance, Pension Funds, Mutual funds, Distressed bankers, Telecom Debt, Consumer Debt, Corporate Debt, overvalued Stock Markets - so many TRIBUTARIES to our TRAIL - waiting for the gold coil to snap

Got gold?

Black BladeInsider-trading creeps into limelight#8005007/07/02; 19:32:59{DF2EDCFC-DD7F-450B-B544-3C37A3C2D66A}&siteid=mktw

Regulators vow tougher stance, but can they handle it?


Even as the bad old days of Michael Milken and Ivan Boesky fade further from memory, insider trading is making a comeback in America. But those who dare to make ill-gotten earnings may be on a collision course with an SEC that's vowing to take a harder-line stance in the post-Enron era. "Insider trading is creeping back, and the agency wants to crack down on it like a ton of bricks," said Brian Lane, a Washington-based securities lawyer with the firm of Gibson, Dunn & Crutcher.

Black Blade: Insider trading will never end – not anymore than phoney bookkeeping or corporate corruption.

BoxmanCountries going under, are U.S. states next?#8005107/07/02; 19:55:11

The well to do are going to take it in the shorts (like they don't pay exceedingly more than their fair share now)with calls for increased taxes on them. If I were well heeled, and lived in California, I would high tail it to a friendlier state.

Joe six pack will also pay more, as sin taxes face extreme increases in the coming months.

The elderly, living on fixed incomes will be put in dire straits, as the cost of health care will increase, and state and federal help will be decreased.

If energy costs escalate due to hot weather (speaking primarily of CA), things will indeed become unbearable for far to many.

I believe that this decrease in revenues to the states is going to become a huge problem that only now seems to be gaining attention in the press.

Keep a low profile, and most importantly, follow Black Blades advice.

goldfoolMr. Gresham - Boomers vs. Doomers#8005207/07/02; 20:37:29

No need to feel apologetic about having a bad feelings about an economy built up on and perpetuated by lies, greed, and corruption. Believe me there are more than enough "cheerleaders" around to help try and keep the spirits of team America fully invested in the stock market. What the country needs now are more critical and independent thinkers like you who see beyond the facade that the bureaucrats, economic analysts, and mainstream media have created to cover up the cold and bleak economic realities and eventualities that exist underneath. Basically we have a good economic foundation but in order to fix a sagging house you've got to tear the siding off to expose the rot underneath.
A CanadianREAL T.V.#8005307/07/02; 20:55:22

The U.S. dollar index daily drama providing a great episode tonight. ( Japs finally realising folly of bailing with a puny scoop). Tomorrow's episode should be an eye-popper. Stay tuned.
Black BladeEU has own list of financial scandals #8005407/07/02; 21:20:39


Paris - Europe has its own list of financial scandals, from a Belgian software maker that fabricated income to a millionaire Briton who plundered his company's pension fund and then drowned. While none is as large as WorldCom's $3.9 billion in mischaracterised expenses, there is no guarantee against something similar happening in Europe, accountants and investors say. "It could definitely happen here," says Markus Straub, a spokesperson for German shareholder activist group SdK. "The reason you don't see cases on the same scale as in the US is that there is a time lag. Our regulators aren't as stringent." "Auditors are the last link in the chain," says Stella Fearnley, a lecturer in accounting at Portsmouth Business School, who in April testified to a UK parliamentary committee on financial regulation. "We are not exercising the right sort of controls." US regulators are better positioned to pick up on company wrongdoing than their European counterparts, experts say.

Black Blade: Not very reassuring.

Gandalf the WhiteOK SPOT !!! Enough of that JUMPING Down and Up !!#8005507/07/02; 21:25:27

Just JUMP UP !!!

sectorLevitating Stock Market#8005607/07/02; 21:31:20

The Fed Issued $39 Billion in "Repos" Last Week

Does it really take rocket science to connect the manipulation dots?

These Fed repos go straight to the stocks, bonds and swaps of the finance and brokerage industry. Indeed the annualized growth of the money supply is at a $2 Trillion run rate.

That spells inflation and voila right on cue, the Economic Cycles Research Institute [ECRI] has just released the USFIG or future inflation gauge data. Jeeze it went UP by 5.5% and is in a kind of moon shot trajectory. For the last year the FIG has risen well over 15% from its low.

The Fed watches this parameter and no doubt is feeling the heat a bit these days. But not to worry, the Master of the Universe is IN CONTROL. He will print and print and print...damn the FIG!

Gandalf the WhiteWOWSERS there Sir 'A Canadian' !!!#8005707/07/02; 21:48:26

A Canadian (07/07/02; 20:55:22MT - msg#: 80053)
Looks like a bottomless PIT !
HOLD ON to your PM's.
This is getting SEROIUS !

Black BladeMixed Indicators#8005807/07/02; 22:00:16

The USD is falling flat tonight (so far). Gold is static, petroleum is lower as the deepening recession decreases demand for energy, and the market index futures indicate a lower opening at these levels. Looks like fun.

- Black Blade

axMERCK EARNINGS NEWS#8005907/07/02; 22:49:53

There is something coming from CNBC Europe about Merck's
Earnings in Monday's Wall Street Journal. Does anyone
have more detailed information on this?

axMERCK ADJUSTMENT IN REVENUE #8006007/07/02; 23:04:49

The above link gives a detailed article on the Merck revenue

adjustment described in Monday's Wall Street Journal. This

may be having an impact on the USD now, and may also impact

stock trading in the U.S. on Monday.

Black BladeJapan may bail out banks with public funds after all #800617/8/02; 00:13:17,2276,50528,00.html?

Govt panel proposes indirect use of taxpayers' money to avoid backlash


JAPAN has begun to think what has up to now been the unthinkable - a full-scale bail-out of its bad debt-laden banks using public funds. If the plan goes ahead in the form proposed by a high-level government panel, it will be carried out by the Resolution and Collection Corporation (RCC). The government will not buy the banks' non-performing loans directly, so as to make the exercise palatable to taxpayers. Some analysts believe that the Bank of Japan will be forced to finance the operation indirectly by buying more government bonds, at a time when BOJ governor Masaru Hayami is said to be already very concerned about the high amount of government debt the central bank holds.

Shoichi Royama, head of the advisory panel which Mr Yanagisawa set up to come up with a 'vision for the future Japanese financial system', has suggested that the problem of NPLs must be solved partly through the use of public funds. Whichever route is chosen, it threatens an increase in liabilities for a government whose outstanding debt (at some 660 trillion yen) has already reached a record level equal to 140 per cent of GDP.

Black Blade: I think we know why the Yen is tanking in spite of the MOF and BOJ intervention. The Japanese taxpayer already has been paying the cost of currency intervention and for government adventures in propping up the Nikkei. Also, the name and purpose of the department - Resolution and Collection Corporation (RCC) – sounds eerily like the "Resolution Trust Corporation" created by the US government to bail out the Savings and Loans a few years ago. Hmmm…

"Interesting Times"

Black BladeBust is here - and it's not going away - (UK)#800627/8/02; 00:29:30,3604,750337,00.html

The final part of a Guardian investigation looks at the cyclical nature of markets and suggests the bear market will not change in the short term: 200 years of bulls and bears


The chancellor of the exchequer has used the phrase "no more return to boom and bust" 89 times in speeches and interviews since Labour took power in 1997. Or at least it feels that way. The office for national statistics does not keep a record. Neither does IG Index, the spread betting firm, which declined to make a price on the matter yesterday. But for Gordon Brown the claim is proving something of an embarrassment. It is difficult to fathom why an otherwise shrewd politician would continue to repeat it when even the most cursory glance at the financial history books illustrates how unlikely it would be.

Black Blade: First off, Gordie Brown is not an especially bright fellow. In fact I would refer to him as a dim bulb. His plan to give away the peoples Gold at the lowest price possible for BoE reserves in what are now fast depreciating currencies was at best a "poor" decision. I think he fancy's himself an economist – though he will go down in history as the opposite of King Midas. Everything he touched did not turn to Gold, rather turned to s***.

Black Blade"Scandal of the Day" - Merck Booked $12.4 Billion in Revenue It Never Collected #800637/8/02; 00:37:18


Drug giant Merck & Co. recorded $12.4 billion in revenue from the company's pharmacy-benefits unit over the past three years that the subsidiary never actually collected, according to a filing with the Securities and Exchange Commission. Monday's Wall Street Journal reported.

Black Blade: One does not have to look far to find a "Scandal of the Day" anymore. Sometimes there are two or three to chose from.

TownCrierThe U.S. dollar as one of the IMF's basketcases?#800647/8/02; 01:15:10

Fortunately, longtime readers of USAGOLD have been adequately warned of this inevitable downturn, even as the rest of the world was frenetically buying into Wall Street's hype of a new investment paradigm based on a "new economy".

The party raged on, and if there was any lingering doubt about whether the band was merely taking a break or if they had, in fact, left the building, the reality check has now been served this year with the dollar itself finally joining in the well-established downtrend of the equities markets. Adding again to previous years’ losses, so far this year the Nasdaq Composite is down 26 percent, the S&P 500 Index is down 14 percent, and the dollar has fallen 10 percent against the yen and the euro.

When there's somethin’ strange in your neighborhood, and looking at your quarterly portfolio statement gives you the creeps and the jitters, who ya gonna call... Ghostbusters? Try again. The IMF??? Don't laugh. The idea has been floated.

In the article linked above, Bloomberg reports that "IMF Managing Director Horst Koehler told the Financial Times in an interview last week the Fund may seek joint efforts to prevent the dollar from tumbling."

Did you ever think the U.S. would become one of the IMF's basketcases? In truth, unless my read on the unfolding situation has suddenly turned astray, they just might have to close the casket on this one.

Perhaps the Japanese government and central bank have grown weary of their singular enterprise to hold the dollar back from the brink of the abyss. They surely know, along with their counterparts, that despite the best efforts of central banks, however coordinated, the ultimate fate of a currency is authored by the hand of the market. And the writing is all over the wall on this one. Is it any wonder that Japan might someday look into that abyss and change its stance to "tolerate a stronger yen" in the tactful parlance of officialdom?

Here are some other pertinent excerpts from the article for your consideration:
Tokyo, July 8 (Bloomberg) -- The dollar had its biggest slide versus the euro in more than seven weeks and dropped against the yen after Japan's financial chief indicated the U.S. currency may extend its five-month decline.

The dollar dropped to 98.16 U.S. cents per euro from 97.27, the steepest fall since May 17. It weakened 1.1 percent to 119.22 yen from 120.43 in late trading Friday.

The loss reversed all of last week's 0.8 percent rally and is the biggest since June 26.

The dollar has weakened more than 10 percent this year against those currencies, prompting the Japanese government to sell yen on seven occasions in as many weeks to protect exporter earnings.

Masajuro Shiokawa told reporters Saturday after a meeting of European Union and Asian finance ministers in Copenhagen that many of his counterparts in other countries share the view the dollar is weakening, and ``may fall to about 115.''

``Shiokawa's comments led to the dollar's decline as they hint Japan may have changed its stance to tolerate a stronger yen,'' said Yasuo Kayamoto, vice president for foreign exchange at UFJ Bank Ltd. In the past months, ``Japan's yen sales were the only supporter of the dollar.''

----(See URL for more)----


Black BladeSpot Jumps!#800657/8/02; 01:31:42

Spot is getting a bit frisky tonight. London trading just opened and Spot is ready to play. He appears to have had enough of "playing dead" and "roll over". He wants to jump and leap.

Meanwhile, European markets are solidly in the red from the start. The USD is sinking back to its lows and the US market indices are off sharply. Looks like it will get very "entertaining" on Wall Street today. The new "Scandal of the Day" must be playing on every investors mind this morning. Investor confidence is crashing to new lows. I still believe that we are running headlong into the "New Great Depression". Watching Richard Quest on CNNfn this morning is also quite "entertaining" - can't wait to watch the grumbling on CNBC's "Wake Up Call".

- Black Blade

Black BladeNewcrest CFO Pays Price For Hedging#800667/8/02; 02:30:56

[Dow Jones] Resignation of Newcrest CFO Gary Scanlan isn't a surprise, Scanlan likely partly paying price for Newcrest's loss-making hedging strategy. "There has been a high level of dissatisfaction with Newcrest's hedging strategy over the recent past and the CFO has to take some of the blame for that," UBS Warburg's Shaun Giacomo says. Departure likely a slight negative for stock given uncertainty it causes. Giacomo has neutral rating on Newcrest. Shares last down 2.9% at A$6.94.

Black Blade: We will see many more such stories as the Mega-Hedgers look for scape goats. I recall that Stillwater Mining did the same thing a few years ago when their CFO locked in PGM prices at the lowest possible prices. Shareholders will be calling for heads to roll. We could see the same thing in coming months as mining CFOs start dropping like flies. They will be resigning with excuses like "he left to pursue other interests", or "wanted to spend more time with the family". Its going to be very "entertaining".

Black Blade"Barbarous Relic Files" - Five kilograms of counterfeit gold seized at Tehran airport#800677/8/02; 02:55:10


Five kilograms of counterfeit gold have been uncovered and seized at Mehrabad airport's customs. Customs officials have advised people to be careful about counterfeit gold.

Black Blade: A lot of effort over a "barbarous relic".

Black BladeEurope Awash In Red#800687/8/02; 03:23:11

Euro markets start off in negative territory on news of Merck fraud. Corruption reigns at yet another major company. I heard some amazing statements such as "it isn't as bad as WorldCom". Well it's bad enough as the health and biotech sector could get hit hard as well and the loss of investor confidence has just risen a notch or two. Elan and Cardinal Health are two more helth/biotech companies caught up in questionable bookkeeping.

Meanwhile, CNBC has gold up +$2.00. It could get very "interesting" as we enter "earnings season". There is a lot of hope centered on Dubya's State of the Union address tomorrow night. It will have to be one hell of a speech to "put lipstick on this pig".

- Black Blade

Black BladeJapanese Meltdown#800697/8/02; 03:56:29

The previous article on the insolvency problems surrounding the Japanese banking sector got me thinking. Japanese rushed into the gold markets to buy kilo bars when the April Fools Day Surprise approached. The next April Fools Day Surprise is on the horizon. I expect to see many more Japanese going for the gold this next time around as the insurance coverage for all deposits will be drastically slashed.

Japanese banks are drowning in debt. They have avoided writing off bad loans, as they do not wish their exposure to affect the markets. It appears that it is way too late for that. The only thing left aside from stealing from the Japanese people is to sell the nearly $500 billion worth of U.S. stocks and bonds they hold. That will send a tsunami over the world markets, especially the U.S. markets.

Over the last decade Japanese investors and citizens have watched their life savings vaporize. Much of that wealth disappeared when the Real Estate bubble popped. Unemployment is rising in a country where it was expected that workers would have jobs for life. The news get worse as the Nikkei 225 has hit levels not seen since before 1984. Bankruptcies are climbing along with the suicide rate.

It is only a matter of time before the whole banking sector crashes. These banks are buried under over $1 trillion in bad debt. That debt load is growing daily as more companies go into bankruptcy taking with them ever more Yen that will never be collected. Recently Japanese banks were able to legally hide their stock market losses from the public. Not anymore. New laws require that they report the value of their stock holding – and these holdings have been big losers.

Is it any wonder then that the Japanese prime minister fired the former Finance Minister, Kiichi Miyazawa when she said that Japan's "economy is very close to collapse". The country is over $5.6 trillion in debt and rapidly climbing. The Japanese economy will crash and the ripple effects will be felt around the globe. Rest assured that this is too big for the IMF and it is a sure bet that the U.S. government will step in to lend support with U.S. tax dollars. This is just way too big to stay on the Japanese islands. The smart Japanese will be holding precious metals as a store of wealth because the Yen will be essentially worthless. I expect to see Japanese buying pick up substantially as the next April Fools Day Surprise approaches.

- Black Blade

Black BladeGold Higher and Dollar Lower#800707/8/02; 04:07:23

The USD is sinking back toward recent lows as the Yen, Pound and Euro surge higher. Gold is up about $2 higher. It is about that time where institutional and official players (President's Working Group on Financial Markets?) tend to step in to cushion any possible drop at the open.

Worldcom hearings begin at 1 pm (EST) today. We will see former CEO Bernie Ebbers, CFO Scott Sullivan, CEO Sidgmore, and Salomon Smith Barney scumbag Jack Grubman get grilled. Expect to see more "under the advice of counsel I respectfully decline to answer as provided under the fifth amendment". Even if these guys get convicted - don't expect any prison time (at least not in a rfeal prison). It should be "entertaining" though.

- Black Blade

Black BladeDRD closes out hedge book#800717/8/02; 04:20:18,4186,2-8-24_1210522,00.html


Johannesburg - Durban Roodepoort Deep (DRD) said on Monday it had closed out its full revenue hedge book. "The outstanding fixed loss on the close out was US$17m, which will be repaid within the current financial year," DRD said in a statement. The company said it would now receive the full spot price from its gold sales.

Black Blade: Another one breaks from the pack. More and more we shall see miners drop the insidious practice of shorting their product and helping to cap the POG. We shall see more producers continue to unwind their hedge books. It is good to see AngloGold and Newmont beginning to break away from the pack by unwinding these onerous leg irons. This will help the POG a bit more.

Black BladeDollar Slides, Asian Stocks Sag on U.S. Worries#800727/8/02; 04:34:54


SINGAPORE (Reuters) - The dollar slumped and Asian stocks abandoned an early rally on Monday as the threat of new accounting scandals and talk that financial authorities accepted a weaker dollar tore attention from Friday's surge on Wall Street.

Black Blade: Another article on the effects of the weakening US dollar and Scandals in world markets.

CanuckQuestion to the money followers......#800737/8/02; 05:16:14

We see vast sums of money being created over the last several years and apparently inflation lies dormant. The money is invented, churned and lost in this deflationary spiral.

The gold gold advocates await the commodity spark it seems. Checking the above link, a 10-year snapshot of the CRB, we see it peaking in 1996 at 340. Was the economy roaring at that time? There was a mini-peak just a couple years ago to a level about 230 and when the 'recession' of 2001 hit the CRB fell off again. Now we see it rising once again.

What will cause the 'commodity bull' that many of us await?

My brother-in-law and I had a lengthy chat this week-end, apparently he has a hole burning in his pocket. He asked my opinion. Without saying the dreaded 'gold' word I introduced him to a 'natural resource fund'. He had a blank look about him. What might I say to reinforce the 'commodity' pitch?


CanuckQuestion to the currency followers...#800747/8/02; 05:22:42

As Japanese woes continues, we see the contagion building in slow motion in South America. By next April, BB's 'April Fool's Surprise' we may see full blown currency problems around the world.

Important question: If a few currencies begin to pop, does that in itself lead to strength in the USD?


misetichBIS - Economy Report - US $ OVERVALUED#800757/8/02; 06:42:10


BASEL, Switzerland, July 8 (Reuters) - The Bank for International Settlements on Monday sounded a cautious note on the potential damage to economies from higher interest rates, given high debt levels, and also said the dollar appeared overvalued according to some measures.

In its annual report, the BIS -- a bank and forum for the world's central banks -- noted that "household and corporate debt levels in a number of the English-speaking countries seem very high" measured against disposable income and cash flow.

It said there had been a sharp rise in mortgage debt and an even sharper rise in mortgage refinancing in several countries, partly a reaction to lower interest rates.

The cash raised through such means had helped to support consumption through the economic slowdown.

While debt service burdens still looked manageable, and the ratio of debt to assets was relatively low, "both these more positive indicators would deteriorate were interest rates to rise back to more usual levels," it said.

"In contemplating when and how quickly to raise interest rates, assuming the current recovery continues, the possible fragility of balance sheets may need to be taken into account," it said.

There may be less urgency for tightening if higher wages in Europe don't prove to be inflationary. Global competitive conditions were "more likely to reduce employment and growth potential than to raise prices," the BIS said.

It was less optimistic for Japan, saying that private sector debt levels remained quite high. Rising unemployment and falling confidence could dampen spending further there.

Regarding the dollar it said that by two different measures -- purchasing power parity and fundamental long-term equilibrium exchange rates -- the dollar lies above, and the euro below, long-term equilibrium values.

But it was hard to say by how much this is the case, with estimates of deviations vaying "substantially across empirical studies, ranging from five to 40 percent," it said.

While the BIS said financial markets had shown "remarkable resilience" to the global slowdown and string of prominent U.S. corporate failures, it noted in its annual report that equity valuations remained "exceptionally high".

It hoped the worst was over for equity markets but added that compared with conventional values stocks "particularly in the United States" still looked rather expensive.

Here the dollar could also have an impact. Given the fact many investment portfolios were weighted heavily towards dollars, there could be scope for rebalancing "should the period for dollar strength seem definitely over," it said.

It also cautioned about the potential risks tied to increased activity in credit derivatives among insurers and reinsurers saying "at this stage, it is difficult to assess the extent to which this trend may have exposed them to new risks".

Copyright 2002, Reuters News Service


"substantially across empirical studies, ranging from five to 40 percent," it said.

There must be a lot of nervous US $ holders - lets follow the TRAIL and see where this FEAR money goes- shall we

Got gold?

CanuckExcellent WGC info. at G-E at 10:51..............#800767/8/02; 10:38:25

Cheryl Martin is a cool woman.
sector@Black Blade---About those Long Term US Treasury Securities#800777/8/02; 11:06:36

There has been a vast amount purchased by Japan

As you point out, $500 Billion in US stocks and bonds.

The US Treasury website reveals that Japan has accumulated $338 Billion in Long-Term US treasuries too. They really haven't begun to sell them back [Repatriarte them]...yet. This indicates that the Japanese and US day of reckoning is in the future.

Moreover, totaling the "Net Purchases" from ALL foreign purchases of Long-Term US Treasuries, one also sees that there has been an accumulation of $821,650 Billion overseas since January 1988.

If only 10% of this figure repatriates then its $82 Billion...quite a hit...even for the Fed's "Repo Machine". With the rising tide of corruption and all the circus media attention "Interesting times" await.

Wagering on future US financial disaster is close to a sure thing.

sectorSystemic Risk--Stephen Roach of Morgan Stanley#800787/8/02; 11:20:27

Over the past several years, "bifurcation" has become a hallmark in the lexicon of market analysis. On the way up it was "new economy" versus "old economy." Then it became Nasdaq versus the broader equity market. On the way down, the dot-com implosion led the way, initially leaving the rest of the market largely unscathed. That was followed by similar downturns in information technology and, more recently, telecom. At each of these episodic milestones, however, the wider and more lethal strain of contagion associated with systemic risk largely absent.

There are signs that this is now beginning to change. Courtesy of the WorldCom debacle -- the most disruptive credit event since late 1998 -- credit spreads have widened back toward levels last seen in the aftermath of the September 11 terrorist attacks. For US investment-grade borrowers, spreads have increased by more than 30 bp since early June. While Steve Zamsky, our US corporate bond strategist, continues to stress that capital market access for good companies remains very much intact, he does concede that an increasing number of innocent victims have been affected. Steve Galbraith sees a similar tendency in US equity markets, noting that Aa and Aaa borrowers have significantly underperformed the broader market recently. Risk aversion is obviously spreading to the highest end of the quality spectrum -- a clear sign, in my view, that investors are beginning to anticipate a transition from discriminatory to systemic risk.
LTCM times ten may be upon us this Summer.

USAGOLD / Centennial Precious Metals, Inc.Put a Foundation Under Your Portfolio -- Don't be Fooled by Inflatable Substitutes#800797/8/02; 11:41:40

gold sovereigns
Gold Today!

Because you never know what tomorrow will bring.

In this global marketplace, a single event on the far side of the world can suddenly and adversely affect the performance-credibility value of the commercial positions within your investment portfolio.

Gold has no employees, no overhead, and no financial statement to balance. It cannot go bankrupt. Gold is wealth itself. It is valued worldwide on the basis of its uniquely reliable form and function -- a steadfast financial commodity which is immune to the contagious collapses to which all financial paper is prone.

In the final analysis -- in times of stress -- paper is only paper.

How solid is your portfolio?

adminThe Daily Specials Board: Available for Immediate Delivery. . . . #800807/8/02; 11:45:29

What's the catch?

You can only find out which coins they are (and the prices) by picking up the phone. You'll want to speak with any one of these friendly folks:

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sectorFleckenstein on World Com's Aftermath...An Ultimate Loss in Confidence by Christmas#800817/8/02; 12:00:34

Greenspan: Man of the shammy cloth

To summarize my outlook, stocks are not cheap. They've been propped up by confidence in the Fed, and up until now, Wall Street and Corporate America. But the eroding of confidence has already begun. As it gathers momentum and ultimately cracks later this year -- when people finally figure out what a sham the Fed is, and that we're headed on the path for three down years in a row -- I believe they will re-evaluate their positions, and that will result in people selling stocks. In short, I believe this process of realigning stock prices with the underlying fundamentals will accelerate in the second half of this year.

Lots of coal in Wall Street's Stockings

YGMBush Vows Jail Time For Fraudulant CEO's#800827/8/02; 12:49:44


White House officials were tight-lipped about the specifics of Bush's speech, but Bush has vowed that "executives who commit fraud will face financial penalties, and, when they are guilty of criminal wrongdoing, they will face jail time." (end)

** This action by the US Pres. may spur alot of "Pot Calling The Kettle Black" & "Fox in the Henhouse" commentaries....."BUT" there is no denying the fact that this tough stance "WILL" be making a lot of Co executives VERY NERVOUS which will in turn hasten and increase further disclosures and thus add more quickly and substantialy to the bonepile and further decline of Markets and investor confidence....GW is caught between a rock and a hard place it seems...Damned if he does and damned if he doesn't...When the final shoe drops what will he do to pull the economy and financial system out of the coming collapse?...Will history repeat?....How many will have the ultimate financial insurance?....Physical Gold and Silver!....The War machine always comes into play during times like this and if defaults become the order of the day in the world of paper then whether it's a Depression Era or a time of Wars, or 'BOTH' one can only view physical PM's as the best scenario for a portable, indestructable lifeline IMHO....YGM

"GO GATA" "GO PHYSICAL" and be part of the 'Solution & End' to Paper Manipulation of AU/AG prices.....

Black BladeContempt Proceedings For Bernie Ebbers and Scott Sullivan?#800837/8/02; 13:07:06

I am watching the House Hearing on WorldCom Scandal. There are now calls for "contempt" proceedings against former CEO Bernie Ebbers and former CFO Scott Sullivan for "selective" use of the fifth admendment. This is getting to be rather "entertaining".

- Black Blade

YGMBritish Fund Manager Hendry on Gold Standard....#800847/8/02; 13:21:22

FAZ..Archives 5/7/02

[Source: FAZ 5.7.02]

states London-based hedge fund manager Hugh Hendry
in an extended interview with Frankfurter Allgemeine Zeitung.

Stocks will have to crash another 35%, states Hendry,
and thereby the "stock market culture will be eradicated."

top central bankers, and in particular the Federal Reserve, have
to be blamed for the disaster taking place on world stock
markets. They have pumped the liquidity into the markets. And
now, as investors have lost all confidence into corporations and
their stocks, this liquidity in ending up in physical assets like
gold, raw materials, and real estate.

It all started in 1971,
states Hendry, when the dollar was decoupled from gold. Since
then, central banks again and again created money to rescue the
stock markets. In addition, semi-public agencies like Fannie Mae
and Freddie Mac were used to create huge amounts of cheap credit
for consumers.

The last stock market bubble, centered around the Nasdaq,
was triggered by none other than Alan Greenspan, "who played
James Bond, rescuing the world."

Therefore, he wouldn't be
surprised at all if the Federal Reserve were to intervene
directly as a buyer at stock markets. Greenspan is very worried
about the huge liquidity, which he himself created, and which is
no longer tied to stock markets.

For the US economy, with all the
implications for the rest of the world, there are only two
possible scenarios, states Hendry.

First, a long and worldwide
recession, triggered by the US, which could take the dimension of
a 1930s-style depression.

Alternatively, states Hendry, central
banks could create even more liquidity trying to rescue the stock
markets. In this case, there will be a huge inflationary push,
and in the end investors will loose confidence in any paper
values. We would then see the return to a gold standard.

**FWIW...IMO, you'll be hearing ALOT more comments like the above in the future....YGM

Sierra MadreHead 'em off at the pass!!!#800857/8/02; 14:31:06

There is no doubt in my mind, that the PPT is intervening not only in the Stock Market but also in currencies and of course, the No.1 currency is GOLD - always has been.

So, what these gentlemen or hoodlums are doing, is preempting any possibility that the human herd - not so different from a cattle herd - may stampede into gold.

Sucha sxtampede would be fatal. So, that's why we see dold drop whenever there is bad news. Can't let the herd get the idea that gold might be a good place to head for.


TownCrierClick for related chart#800867/8/02; 15:34:14

When you see the small magnitude of the price break on this chart, you will be amazed that it could foster such a an upswing in physical offtake.

As you'll surmise for yourself, at the risk of liquidity in the global physical market there is very little room for successful gold price suppression to continue when piggy-backed on top of a weakening U.S. dollar.

Pertinent excerpt from this week's WGC report by Rhona O'Connell:

"Indian traders are reporting that the recent fall in gold prices has rejuvenated the local market, with daily imports of ten tola bars, the favoured investment product, rising to 12,000-15,000 in the past few days. In early June imports had fallen to between 1,000 and 2,000 bars per day with demand being fed by locally recycled supply. The average in June and July 2001 was approximately 16,000 bars per day."

Click URL for more, plus chart.


TownCrierArgentine reprise -- the Market and Government: toe-to-toe, or hand-in-hand...?#800877/8/02; 16:09:42

BUENOS AIRES, Argentina, July 8 (Reuters) - Argentine stocks soared on Monday on continued talk of a new government plan to save the financial system from collapse, while heavy Central Bank intervention sent the peso slightly higher.

...Continuing a trend from last week, banking shares led the charge as investors continued to bet the government would force a switch of bank deposits into public bonds. Analysts say the unpopular move is necessary with banks short on cash amid a chaotic four-year recession.

Central Bank president Aldo Pignanelli on Monday ruled out an obligatory deposits conversion ... but traders said they believed the government would eventually be forced to face reality and make the switch.

"The deposit switch is a reality the government can not avoid," a stocks trader said.

----(click URL for full text)----

Now check out the article's concluding remarks. The recent performance of the dollar (not to mention the banking controls that were implemented) justifies our remarks offered long ago that this would become a case of "Out of the frying pan, into the fire".

-------Traders said the Central Bank had sold an above-average $49 million in dollars into the electronic wholesale market to prop up the peso. ... But the local currency is still about 70 percent weaker since January's traumatic currency devaluation, which sent investors scrambling to buy dollars to protect their savings.-------

We can only hope that everyone else learns from Argentina's mistakes.


Chap XMichael Parness challenges the media whores#800887/8/02; 16:24:37

He's certainly right when he says "you only want lies"


WAXIE (Michael Parness) will go on air and BEAT ANY analyst, ANY guest you have on air in ANY contest, market predictions, or anything you want.

I'll put up $1,000,000 if they want to stage a real contest.

I'll beat them in Tennis, too, damn it! (though I won't put up $1 for that, hehe!)


EVERY prediction I've ever made on air has come TRUE 100%. Go look at the tapes, they are unedited and in your OWN archives.

That is a FACT. I know you read my alerts, and I know you are SCARED to let me on your airways because I tell the TRUTH and you only want LIES.

Well, the time is now and the people are ANGRY and they want the TRUTH.

They will get it, one way or another, so do the right thing and tell the liars of the world that the TRUTH
is comin' to get them!!!

And, in the end - THE TRUTH can NOT be denied!!!

I am 100% on my on air calls. It's public record.

To my clients, please send emails to ALL these places by the TONS and FORCE them to have THE TRUTH on air!!!

Thank you, and God bless,

Michael Parness

TownCrier"Who Wants to be a Millionaire?"#800897/8/02; 16:27:39

Just stick a dollar in your pocket and fly to Turkey on holiday....


ISTANBUL, July 8 (Reuters) - Turkey's lira currency hit an all-time low at 1,680,000 to the dollar on Monday after deputy prime minister Devlet Bahceli on Sunday called for early elections in the crisis-hit country.


The revaluation/repricing for which gold is due should entail more than mere adjustment compensation for a weakening dollar. It should reflect a concentration of value of much illusory gold paper supply into the relatively small quantity of physical property.

For value "leverage", therefore, you want to buy and own the physical product. To be sure, today the sky is still blue, and "you ain't seen nothin' yet", Argentina being just a wisp of cloud, relatively speaking.


Carl HWASHINGTON (Reuters) Bush to Attack Corporate Abuses Caused by a 'Few' #800907/8/02; 16:33:47

A 'few'? Yeah, right.

Got gold?

YGMIndia "FAILS MISERABLY" in 'Effort' to trade paper Gold for Physical...5.6 T... not expected 100T#800917/8/02; 17:09:04

Gold bond scheme fails to dig up hoards

The gold bond scheme launched by the Indian government has failed woefully in its aim of retrieving some of the estimated 10,000 tonnes of gold held in private hands.

India's largest bank, the State Bank of India (SBI) had launched the scheme on November 19, 1999, as part of the government's policy of bringing private gold hoards into the economy and reducing the country's dependence on imports.

"We have mobilised 5.6 tonnes of gold as of December 31. This is well below expectations," an SBI official told AFP on Monday.

The SBI had hoped to mobilise about 100 tonnes of gold in the first year.

"People are unwilling to part with gold. This mentality has to change," the official said.

Under the scheme, the SBI accepts a minimum of 200 grammes (seven ounces) of gold, hallmarks it and issues a certificate to the depositor.

The gold must be kept with the SBI for a minimum one year, and a maximum seven years, with annual interest of between three and four percent.

At the end of the specified period, depositors can either retrieve the gold or its value in money.

Analyst Ashwin Arya, at gold trading house eMecklai, attributed the scheme's failure to the minimum deposit requirement and fear of prosecution.

"The average gold holding with a family is between 150 and 200 gms. So the minimum limit should be brought down," Arya said.

"Most of the large private gold hoards have been bought with black money, so people fear tax raids and investigations. If there was an amnesty attached to the scheme, much more gold would have come out," he added.

Analysts said one other reason for the poor response was the lack of quality control by jewellers.

"When a family takes gold jewellery to the bank to be deposited under the scheme, they think they are taking 24 carat gold, but after quality control tests by the bank, they find they are holding only 18 or 22 carat gold," said an analyst in SBI.

"This means they have been cheated by the jeweller and this is a great disappointment for them and they decide to keep the jewellery."

India is the world's largest market for gold but mines a negligible quantity of the metal, making it heavily reliant on imports.

Private gold stockpiles in India are estimated to total between 10,000 and 12,000 tonnes.

***No matter what Nation of the World you are in "Bankers Hate Physical Gold Ownership" to have burnable, defaultable, controlable, tracable, devaluable, PAPER, PAPER, PAPER....150 to 200 grms p/family, that's laughable....We Bankers must have that Gold....FOR YOU SIMPLE CHILDREN ARE NOT ALL KNOWING ENOUGH TO UNDERSTAND FINANCIAL FREEDOM.... Yeah right!....

I've often wondered if there ever was another attempt at Gold Confiscation, if that the new veil under which it might be attempted, would involve the forced use of E-Gold accounts....
Once again the NWO Bankster/Gangster crowd still get control of the physical, you'd get a passbook....No black market allowed under laws dreamed up by the NWO slime....They give you more worthless Fiat in exchange and say "Trust Us" we know best....
Lord is it even possible to think like a Bankster/Gangster Globalist in order to be one step ahead, or do you just own and hide all the Gold you can afford now and say to hell with all the rest!!!!..........YGM.

neer-do-wellYGM#800927/8/02; 17:17:29

What will GWB do when the shoes drop? He told us today in his speech, he will blame Congress. They fail to enact his agenda. SO.....executive order # ???. To hell with Congress.

Where we go from there uh..I really can't guess.

misetichAccenture to Fire 1,000 as Technology Spending Slows#800937/8/02; 17:25:57


New York, July 8 (Bloomberg) -- Accenture Ltd. will fire 1,000 workers by the end of August as customers of the world's largest computer consultant spend less.


No recovery in computer consultant industry. More downward earning revisions on the horizon. More scandals on the horizon as crooked bookkeeping will be exposed, as the "cooks" are unable to hide previous frauds in this type of climate

Got gold?

R PowellSilver flatline#800947/8/02; 17:28:16

Does anyone know what's up with silver? The Kitco chart shows that the price of $4.93 hasn't traded up or down since 9:00 AM. Another Kitco price reporting snaffo or was trading halted for some reason?

Carl HThe Ant and the Grasshopper#800957/8/02; 17:36:13

This was sent to me today and I thought it was quite applicable to GOLD BUGS, but probably even more so to NATURAL GAS BUGS and SILVER BUGS.


The ant works hard in the withering heat all summer long, building his
house and laying in supplies for the winter. The grasshopper thinks he's a
fool and laughs and dances and plays the summer away. Come winter, the ant
is warm and well fed. The grasshopper has no food or shelter, so he dies
out in the cold.


The ant works hard in the withering heat all summer long, building his
house and laying in supplies for the winter. The grasshopper thinks he's a
fool and laughs and dances and plays the summer away. Come winter, the
shivering grasshopper calls a press conference and demands to know why the
ant should be allowed to be warm and well-fed while others are cold and

CBS, NBC and ABC show up to provide pictures of the shivering grasshopper
next to a video of the ant in his comfortable home with a table filled with
food. America is stunned by the sharp contrast. How can this be, that in a
country of such wealth, this poor grasshopper is allowed to suffer so?
Kermit the Frog appears on Oprah with the grasshopper, and everybody cries
when they sing, "It's Not Easy Being Green." Jesse Jackson stages a
demonstration in front of the ant's house, where the news stations film the
group singing, "We shall overcome." Jesse then has the group kneel down to
pray to God for the grasshopper's sake. Al Gore exclaims in an interview
with Peter Jennings that the ant has gotten rich off the back of the
grasshopper, and calls for an immediate tax hike on the ant to make him pay
his "fair share."

Finally, the EEOC drafts the "Economic Equity and Anti-Grasshopper Act,"
retroactive to the beginning of the summer. The ant is fined for failing to
hire a proportionate number of green bugs and, having nothing left to pay
his retroactive taxes, his home is confiscated by the government. Hillary
gets her old law firm to represent the grasshopper in a defamation suit
against the ant, and the case is tried before a panel of Federal judges
that Bill had appointed from a list of single parent welfare recipients.
The ant loses the case.

The story ends as we see the grasshopper finishing up the last bits of the
ant's food while the government house he is in, which just happens to be
the ant's old house, crumbles around him because he doesn't maintain it.
The ant has disappeared in the snow. The grasshopper is found dead in a
drug-related incident and the house, now abandoned, is taken over by a gang
of spiders who terrorize the once peaceful neighborhood.

God Bless America

misetichKPNQwest had much wider 2001 loss than reported#800967/8/02; 17:37:49


AMSTERDAM, July 8 (Reuters) - Dutch telecoms group KPNQwest suffered a 2001 net loss that was much wider than the one it indicated earlier this year, a court-appointed trustee for the recently declared bankrupt company said on Monday.

KPNQwest officials never released the company's annual report showing that the company would have posted a net loss of some 375 million euros ($370 million) as the company spiraled into bankruptcy in May, Dutch trustee Jan van Apeldoorn said.

That higher loss figure amounts to a figure some 40 percent larger than the 266 million euros figure the company originally reported in February.

Legal questions, exacerbated by fears over its bookkeeping, as well as a large trail of unpaid bills and a complicated ownership structure, has already scared off U.S. telecoms giant AT&T Corp. (nyse: T - news - people), which was once a leading contender for most of KPNQwest's backbone network.
The bankrupt firm's lender banks -- led by Citigroup (nyse: C - news - people), Deutsche Bank <DBKGn.DE> and Dutch ABN AMRO <AAH.AS> -- have lost hope that they would recover an amount anywhere near the remaining 220 million euros they are owed. Bondholders and shareholders appear unlikely to recover anything.

The banks have already said they would ask the administrators to appoint an investigator to look into KPNQwest's accounts, especially its once cozy relationship with founders KPN and Qwest, who had accounted for over 40 percent of total venture sales and who were the company's biggest shareholders, with Qwest owning 47 percent of the company and and KPN 40 percent.

A flurry of lawsuits from the banks, investors and even employees are expected to haunt the firm's management and possibly reach its parent companies in the coming months.


ANOTHER day ANOTHER scandal - When/how will this end?

Got gold?

YGMExcellent Paper.......Well worth the time and bandwidth......#800977/8/02; 17:53:04

The Knowledge Economy and a Cross of Gold
2001 Bluffton College

Presidential Leadership Lecture Dr. David E. Martin, CEO M·CAM

October 2, 2001
"I come to speak to you in defense of a cause as holy as the cause of liberty ­ the cause of humanity." - William Jennings Bryan, 9 July 1896inds of change fanned flames of controversy the year Central Mennonite College (the name first used for the present Bluffton College) was founded. Across the country, upheaval caused by geopolitical and economic power realignment left Americans searching for a standard, a basis upon which they could denominate their existence. With the industrial machine drowning out the sound of the plow and scythe, a revolution was brewing ­ one that would change the landscape of the globe for a century. Productivity, industrial might, and cash now measured wealth, once denominated by property ownership. The idle holders of idle capital vilified by William Jennings Bryan at the Democratic National Convention in 1896 were the educated industrialist elites who, according to him, turned a deaf ear to the working masses. While all acknowledged the need to establish a currency standard, fierce battle lines were drawn on the 11thmeridian of the Periodic Table of Elements with impressive skirmishes in the "A" section. In the face of this tumultuous time, another debate was growing equally rancorous. As the 20th century dawned a movement was afoot to establish the infrastructure to consolidate the movement of wealth throughout the nascent continental country. Financial panic, alleged by many to have been instigated by proponents of a central bank, provided a stimulus to create the Federal Reserve Bank by 1913, the same year Noah Byers promoted the consolidation of Mennonite educational efforts under the banner of United Mennonites to then president Samuel Mosiman. The centralization of the mode of wealth and knowledge transfer, be it tangible or intangible, has long been known to be the path to dominance. After watching the Duke of Wellington defeat Napoleon at Waterloo, Baron Nathan Rothschild was quoted as saying, "I care not what puppet is placed upon the throne of England to rule the Empire on which the sun never sets. The man that controls Britain's money supply controls the British Empire, and I control the British money supply." While observing that, "whoever controls the volume of money in any country is the absolute master of all industry and commerce," President Garfield provided the inspiration for today's presentation in his words spoken in 1880. "I am an advocate for paper money, but that paper money must represent what it professes on its face. I do not wish to hold in my hands the printed lies of the government." One might reasonably ask, at this moment, "How do Bryan, Hirschy, Mosiman, Garfield, Rothschild, and Morgan find themselves visiting Bluffton on this 2nd day of October?" After all, isn't today the day most of us mourn the 1780 hanging of British Intelligence Officer Major John Andre and celebrate the President Johnson's swearing in of Supreme Court Justice Thurgood Marshall? An appropriate question may be the most eloquent uttering of the 1992 Vice Presidential Candidate Vice Admiral James Stockdale, "Why am I here?" Today, we will explore the realities of a crisis of humanity more polarizing than the debate of gold or banking. We will probe the enigma of the knowledge economy that has no standard ­ a wealth without denomination. We will address the challenge presented by President Garfield 120 years ago and resolve to valiantly seek to address the problems we encounter. What is knowledge, how is it's quality assessed, and who controls its distribution? Informed by the debates of yesterday, we will seek solutions for the challenges we face today. Let me begin by making the following observations. At the turn of this century, the International Leadership Forum estimated that the adult global literacy rate was 73%. That means that the written word was meaningless to over 1.3 billion adults. With many countries boasting rates of 95%, many had rates under 50%. An UNESCO report estimates that approximately 250 million children between the ages of 5 and 14 are working and going to school. Fifty percent of this group works full-time. When one considers the numbers of people trained beyond nominal literacy, the numbers are more poignant. Less than 40% of the world's population, over the course of their lifetime, can enter tertiary educational institutions.1Sixty three percent of the world's literate population lives in economically "developed" countries with African, Central and Southeast Asian countries disproportionately illiterate. These statistics should, in themselves, hold considerable weight.2However, this is not a lecture on education of the masses. No, today, I'm concerned with a far more complex topic that, while impacted by the numbers above, is far more unnerving. We find ourselves at a point in history where considerable acclaim is cast upon those who have achieved greatness in the pursuit of corporate goals. Forbesand Fortuneherald one after the other multi-millionaire whose fame is built on success in entrepreneurial imperialism of one sort or another. During the last four years of the past decade, more millionaires and billionaires (in economic adjusted terms) were created than in the cumulative running of all of human history. Are we really that much smarter and that much more productive than all civilizations that preceded us? Are our institutions of higher learning producing genius with every diploma? Do we live in Garrison Keillor's mythical town where, "every student is above average?" Or is it possible that we have built a tower of Babel? Let us examine three elements of the knowledge economy. First let us ask the question posed by Mr. Bryan. In the knowledge economy, we must ask ourselves the unsettling question of basis. In antiquity, wealth was denominated by raw materials. Those who had the most land, the most gold ­ in short, the most tangible property ­ were the wealthiest. In the evolution of economies, these basic elements were replaced by the metrics of the industrial age. In industrial economies, productivity, distribution, and market share served as the more abstract surrogates for the wealth of ages gone by. Now, in the knowledge economy, we find ourselves confronted by an economic reality without basis. Prior to the dot bomb, we were told that value was measured in "eye-balls" and "stickiness". Billions of dollars flowed into the creation of a virtual presence that conveyed virtual information virtually anywhere. Pause; let us consider what virtual means. Our faithful Webster tells us that virtual refers to a hypothetical particle whose existence is inferred; being in essence though not formally recognized. In other words ­ NOT. When value is ascribed to virtual reality, how is it denominated? More importantly, how is one to know whether it is real or imagined? As the educator and the educated, how can we learn to discern reality from that which is not? Revisiting President Garfield's conundrum ­ we need to know that face value is based on value or it's a lie. Is "knowledge" the presence or absence of literacy, the letters of degree conferred on an individual, the prestige of institution or commercial affiliation, nationality, race, creed? Or, is knowledge something more than these? I would suggest the sine qua nonof knowledge economy is the need for a gold standard. Copyright law of the United States established that facts have neither owner nor value. The organization and presentation of facts in various expressions have value. Our society is filled with data; our challenge is to transform that into usable information leading to wise deployment creating value. Yes, here's where I appeal to the student populous movement ­ educational assessment should not be based on the recitation of facts established by U.S. law as valueless ­ now here comes the part where I shamelessly pander to the faculty ­ but in the useful synthesis and application of the same. Knowledge built on rout memorization is valueless, knowledge built on application and problem solving has value.
Second, we explore the problem of ownership. There was a time when ownership was rather unambiguous. Possession was 9/10ths of the law. Land, buildings, shipping lines and trade names were clearly defined by title. In the knowledge economy, we are confronted with the timeless problem of counterfeit. When he realized that conventional warfare was not swinging in his favor, Hitler, in an effort to decimate the United States and Great Britain economies began the process of printing counterfeit dollars and pounds. The French tried the same technique in Vietnam and the U.S. introduced 20 Peso notes in Cuba for the infamous Bay of Pigs invasion. Why is it that from Duke Sforz of Venice in 1470, to Napoleon, to Hitler, to Kennedy counterfeiting has been an integral part of war? Because savvy tacticians know that economic chaos is one of the world's most effective weapons. Introducing counterfeit undermines all economic systems as confidence is lost in the representation of legal tender. So too, in the knowledge economy, counterfeits are an untold tactical weapon. In a recent study made of United States patents, our company found that over 35% of all current patents are intellectual forgeries. This means that the patent claims rights already secured by another party or already existent in the public domain. One cannot help being overwhelmed in Malaysia with copies of Microsoft Office being sold for $2 in the shopping malls of Jabor Bahru. Passing off as proprietary that which is not is an unmitigated disaster looming over our current economic system. For the knowledge economy to have any viability, forgery detection must be implemented. Last Spring, the University of Virginia gained national attention when one of its faculty implemented a computer system to determine whether term papers submitted by students were plagiarized or authentic. In certain sections, as many as 25% of the papers were copied, in part or in whole from other sources ­ often the papers of classmates. Is it any wonder that we go on in life to copy the works of others in business, education, and other walks of life when, in high school and college, we get away with intellectual theft? I think not. However, I believe that educators and students alike must realize that these patterned behaviors establish foundations that lead to ruin. Finally, let us consider trade. When Central Mennonite College was founded a century ago, Noah Hirschy advanced the premise that education needed to be relevant to the society and times in which students found themselves. Established to provide exceptional higher education in the context of the church as opposed to establishing an overtly sectarian curricular propagator, this college embraced social and political dialogue deemed heretical to many in the establishment. Knowledge, according to Bluffton's founders, was for the benefit of society ­ a mission without boundaries.
Many have proposed that with the ubiquitous nature of the internet, we are becoming a boundary-less world. Traditional geopolitical barriers are eroding. People are interacting with one another irrespective of time zone, language, tradition, or status. In real time, I collaborate with business partners overlooking Tiananmen Square, Big Ben and Tierra del Fuego. However, in these times of heady multinationalism, we must consider the often-overlooked dependency that is being created in this unrestricted World Wide Web. Knowledge must be transferred and shared for it to achieve its greatest impact. However, as we see the expansion of telecommunications-facilitated trade, we see an equally expanding malignancy of inadvertent isolationism. Geiger & Diller closes its doors while we shop on-line. Balmer's purchases are now made at All the while, we lose the priceless, informal interactions with our neighbors telling us of places, people and events that once were intrinsic to the broadening of our minds and perspectives. We miss the touch of the hand, the warmth of a smile and the sharing of a friend's tear ­ in our wealth, we gain poverty of soul and mind. In the midst of this efficiency, what has the knowledge economy lost? Is the local ISP the Rothschild of the knowledge economy? We have sacrificed human interaction. In our global economic conquests we have lost the innovative impact of observation. Rather than go to places, we visit them virtually (remember, that means we DON'T). I would like to suggest that one of the greatest threats of the knowledge economy is that we will actually see a reduction in global understanding. We will see, hear and trade with only those who are wired into the web. Rather than learning from the wisdom of the cultures that have passed before us, we will see only that which the content providers deem appropriate and, in so doing, we will see a contraction, not an expansion of knowledge. In short, we will choke the inventory of innovation and inquiry in the morass of irrelevancy. We must resist the centralization of information and knowledge. Efforts must be made to learn from the richness of indigenous knowledge that may never find its way to a web browser. We must develop multiple venues and vehicles for the exchange of knowledge so that the trade routes are not the monopolistic empire of the few. So today, we must heed the warnings of history and listen to the voices of the past so that we build a legacy of renaissance, not repression. We need to encourage one another to add value, not volume, to the knowledge of the ages. We must commit ourselves to respect and value the uniqueness of the intellectual property of each member of the human race and decry piracy of the same. And finally, we must vigorously resist the temptation of sloth and in its place actively participate with the global community. We must resolve to move forward the democratization of knowledge and be relentless in our efforts to bear the standard of substance in the face of maelstrom of virtual value. Let now ring true the statement made by Mr. Bryan on that hot July day in 1896,.........

"The humblest citizen in all the land, when clad in the armor of a righteous cause, is stronger than all the hosts of error."

misetichBrazil's Fraga to meet O'Neill and Greenspan#8009807/08/02; 18:00:54


BRASILIA, Brazil, July 8 (Reuters) - Brazilian Central Bank President Arminio Fraga will meet with U.S. Treasury Secretary Paul O'Neill and Federal Reserve Chairman Alan Greenspan when he visits Washington this week, a bank spokesman said on Monday.

Fraga is also scheduled to meet with International Monetary Fund Managing Director Horst Koehler, the spokesman said.

Fraga is traveling to the United States, where he is also due to meet with private banks, amid speculation that Brazil may seek an extension of its current IMF loan, which expires at year-end, to help it overcome a loss of investor confidence ahead of October elections.

Government officials have denied they are sounding out the IMF on such a loan, although local newspaper Valor reported the government has already proposed the idea to the IMF.

The loan would depend on the leading presidential candidates committing themselves to low inflation, independence for the Central Bank and fiscal austerity, according to daily Valor


Lets see IMF's Kohler hinted at co-ordinated currency intervention supporting the US $ -
IMF needed in Argentina, now Brazil
Greenspan & Co need to bail out US banks exposure in Brazil-look for the IMF extension to bail US interest and then?

Got gold?

Mr Gresham"I've fallen..."#8009907/08/02; 18:01:45

Bad day for Uncle Buck.
misetichTurkish disarray threatens IMF rescue plan#8010007/08/02; 18:28:12


Growing conflicts within Turkey's ruling coalition on Monday prompted further speculation that the government might collapse and undermine an economic rescue programme backed by the International Monetary Fund
The latest developments in Ankara jolted financial markets, which have been gripped for the past two months by fears that the poor health of Mr Ecevit, 77, could derail an economic rescue programme backed by a $16.3bn (€16.7bn) loan from the IMF.


There goes ANOTHER IMF rescue -

Got gold?

misetichKöhler warns against 'wrong signals' amid market volatility#8010107/08/02; 18:37:03


The biggest risk in today's uncertain financial markets is to "give the wrong signals and exaggerate problems so that they become a self- fulfilling prophecy," says Horst Köhler, managing director of the International Monetary Fund.

In an interview with the FT in London, Mr Köhler says he is careful not to underestimate the risks from the current period of extraordinary volatility. A nightmare scenario - the convergence of further and deeper market weakness in the developed markets with debt defaults in emerging markets such as Turkey and Brazil - cannot be ruled out. Indeed, Mr Köhler estimates there is a one in five chance of it occurring.

Mr Köhler says that capitalism is the best system but it depends on an ethical framework and that it is up to the "private sector to demonstrate that it is aware of this. I'm challenging business leaders to act more responsibly."


Mr Köhler says "A nightmare scenario - the convergence of further and deeper market weakness in the developed markets with debt defaults in emerging markets such as Turkey and Brazil - cannot be ruled out. Indeed, Mr Köhler estimates there is a one in five chance of it occurring. "

One in five? Odds will be even better as the "scandals" undermine investors confidence

Got gold?

misetichMoody's warns of severe downgrade at Vivendi#8010207/08/02; 18:41:05


Vivendi Universal faces a "severe" downgrade of its debt ratings unless it acts quickly to arrange additional funding and stave off a looming liquidity crisis, according to Moody's the debt rating agency
Moody's said on Monday that Vivendi was "facing a worsening liquidity situation which could result in further severe downward migration of the ratings".

"The longer it takes for Vivendi Universal to arrange additional committed funding, the more strained its financial condition is likely to become," Moody's said
With just E2.4bn in cash and unused credit lines, the first task of Jean-René Fourtou, the new chief executive, is to secure enough cash to stave off default. The board has asked Goldman Sachs to monitor the worsening liquidity position.

More debt required to solve Vivendi worsening liquidity situation . Ponzi would be so proud.

Got gold?

misetichBush - Pitt - SEC- then and now#8010307/08/02; 19:06:16



Mon Jul 8, 5:54 PM ET
WASHINGTON (Reuters) - President Bush ( news - web sites) said on Monday he would seek additional funding for the Securities and Exchange Commission ( news - web sites), allowing it to hire more investigators to combat corporate fraud.


A series of interviews USA TODAY conducted with top SEC officials shows that is no easy task. The agency is chronically understaffed and beset with high turnover. The investigative arm of Congress found that the SEC is "increasingly strained," yet Pitt has requested 20% less for the SEC's budget next year than his predecessor asked for in 2001. The head of the SEC's corporate finance division admits that Pitt probably hasn't asked for all the funding that the agency needs. And the head of the SEC's enforcement division concedes that he also feels stretched.

Clearly, Levitt has a point. Problems facing the SEC include:

High turnover. Some 17% of SEC lawyers and almost 14% of its accountants left in 2000 — nearly twice the rate of other government agencies. The average tenure of SEC examiners was just 1.9 years in 1999 and 2000, an all-time low. And at the SEC's enforcement division, 12 of 28 branch chiefs have been on the job less than a year.
Empty leadership positions. The five-seat commission has two vacancies. Meanwhile, two Bush administration nominees, Texas entrepreneur Roel Campos and Columbia University law professor Harvey Goldschmid, have yet to be officially confirmed.
Increasing workloads. There were 112 accounting fraud cases in all of 2001. There have been 64 so far this year. In a March report, the General Accounting Office (GAO) found that the SEC's workload has grown four times as much as staffing over the past decade.
The SEC reviewed just 16% of 14,000 annual reports filed by companies in 2001. Its goal is to review 33%. At a Senate Governmental Affairs subcommittee hearing last month, former and current agency officials said that problems at Enron may have been uncovered sooner if the SEC wasn't so understaffed. The GAO says the SEC is "increasingly strained" against increased corporate filings, complaints and investigations.

But despite all that, so far Pitt has asked for just $467 million for the agency's budget next year — $120 million less than what Levitt requested in 2001. Only 100 new people will be hired, increasing the SEC's head count by less than 1%.


Can anyone explain why Pitt asked for a reduced budget? in lieu of the know SEC constraints?

Got gold?

YGMMichael Rupperts FTW Global Financial Collapse Alert.......#8010407/08/02; 19:51:36



The Great Depression was not an event that wiped out U.S. capitalists. It was an event that made the rich even richer by transferring the wealth of the people into the hands of the wealthy. Legendary is Bank of America s rise to affluence through real estate foreclosures from 1929-37. Don t believe for a minute that the richest of the rich will be hurt by the coming collapse. The only ones hurt will be you and me.

George Soros is a member of the Bilderberger Group, a collection of the wealthiest individuals on the planet. It includes, from the U.S., both Democrats and Republicans, and from Europe and Asia the richest old money that can be found. U.S. participants in this year s conference included David Rockefeller, Henry Kissinger, former Treasury Secretary Larry Summer, former CIA Director John Deutch and George Soros. It was just after this year s meeting which ended in early June, that all of the revelations about corporate fraud started to really hit the news. One wonders if it had been on the agenda.

I also note sadly a recent financial report from the Denver area stating that mortgage foreclosures were going through the roof. This, at the same time that Reuters (July 2, 2002) reported that corporate layoff announcements had risen by 12% in one month. In this context Bush s tax cuts seem worse than bad judgment. As former Ass t Secretary of Housing Catherine Fitts pointed out to me in a last minute e-mail, By 2010, when (and if) the Bush tax reductions are fully in place, an astonishing 52 per cent of the total tax cuts will go to the richest one per cent & Put another way, of the estimated $234 billion in tax cuts scheduled for the year 2010, $121 billion will go to just 1.4 million taxpayers.

Unless you can convince me that gravity might suddenly reverse direction, this collapse is inevitable and imminent. It will be unspeakably brutal. How long do we have? Maybe weeks. Maybe months. Maybe only days. But the house of cards is already starting to collapse all around us. A major terrorist attack, the folly of an invasion of Iraq or a nuclear exchange between India and Pakistan would only be a momentary diversion from a much greater tragedy.

Complete article @ Link...YGM

PizzOn the Brink#8010507/08/02; 20:01:02

Anyone else notice any similarity to Bush going to Wall Street to boost investor confidence and Ken Lay's speech to Enron Employees right before the collapse?

Even though "401K" may turn into a four letter word for investors, at least most are somewhat employee directed. Now company pension plans are another thing. If the big three (Ford, GM, Chrysler) plus other large corporations with pension funds aren't able to fund their pensions due to the markets' inability to continue to go straight up, the administration has got to be sweating bullets.

Notice the recent lack of mainstream coverage of India-Pakistan, the Middle East, or anything else that might make gold go up? Did these problems all of sudden over the last 4 weeks heal themselves? The gag orders are in place, can't have a dervitives blow up can we?

You'd think that with the dollar in a vertual free fall, that gold would be rising, but gold, gold stocks, etc. are just hanging in there. Do you think a few highly placed phone calls have been made to the big money players? You're naive if you don't. They may not be buying, but nobody smart is selling out.

Notice how Bush has refrained from going after the previous administration for the economic problems? Got to be driving the GOP nuts coming into congressional off-year elections. But how can he? He'd have to admit we have major structural problems (bubbles) over and above some bad accounting and that just might send the sheeple over the edge.

Bottom line, when the number one has to turn "cheerleader", update your resume, cause the end is closer than you think. I've seen it too often in business - the PTB are running scared, and there are no more short term fixes.

Kind of like stepping into an empty elevator shaft when all you're doing is trying to is go up one floor.


Black BladeNumbers game and blame #8010607/08/02; 20:15:07,1413,36%257E33%257E715620%257E,00.html

Flurry of restatements expected


Sunday, July 07, 2002 - Multibillion-dollar lapses at Enron, Xerox and WorldCom may be just the beginning. "We are going to see an avalanche of (financial) restatements between now and the end of the year," said Allan Koltin, whose Chicago-based Practice Development Institute Inc. is one of the nation's leading consultants to the accounting industry.

More than 2,000 public companies are changing auditors following the conviction of Arthur Andersen on obstruction-of-justice charges. And many are changing management after years of shaky performance. Experts say the new auditors and managers will distance themselves from the financial sins of their predecessors, and the adjustments they may make to past financial statements will continue to haunt the stock market and erode the public's trust.

Black Blade: I somehow don't think that Wall Street is ready for this. The Pied Pipers are on CNBC, Bloomberg, and CNNfn screaming that all will be well as the economy has recovered. Aside from the absurdity of the economic recovery statement, they tend to ignore the avalanche of corporate restatements. IBM is one such stock that could hit Wall Street very hard in coming weeks. It is a DOW component and there are questions about the balance sheet. It has also been suggested that the stock is greatly overvalued. There are many other companies that will hammer the markets in coming weeks. Add to this the wave after wave of accounting scandals and corporate malfeasance. It is going to get very ugly. It is definitely in everyones best interest to sock away a small percentage of their portfolio in Gold and Silver as insurance against the continual assaults on the markets shake the foundations of the American economy, and the Global economy for that matter.

BTW, I watched the WorldCon hearings today. I was not impressed. This is just the current state of American business I suppose. Standards have slipped over the years – and that is putting it mildly. If you insist in "playing the game" in the stock markets – be extremely careful and learn "everything" you possibly can about the company. Just be aware that there are a lot of cockroaches out there.

Black BladeThe Drumbeat of Systemic Risk by Stephen Roach (New York) #8010707/08/02; 20:23:47


Notwithstanding the angst of June, financial markets have attempted to remain discriminating in assessing risk. Problems have largely been isolated before they have contaminated entire asset classes. That works fine as long as economic recovery stays on track. But as a double dipper, I fear that such discriminatory risk could well morph into systemic risk -- a wider and more lethal strain of financial market contagion that is reflective of the inherent flaws in markets and economies that exist under normal operating conditions. There are mounting signs that such a transition could well be close at hand.

I take the recent weakening of the dollar as yet another warning sign of the perils of systemic risk. America's excessive dependence on the rest of the world to fund its external deficit was always a delicate balancing act. But in the aftermath of a serious corporate governance shock, together with the growing realization that a return to an era of single-digit returns on dollar-denominated assets could well be hand, capital inflows are suddenly much tougher to come by. While the capital flow data lag, the figures for the first four months of this year underscore a stunning slowdown of foreign demand for US securities -- portfolio inflows were off about 35% from the comparable period a year earlier. As Joe Quinlan notes, this downshift mainly reflects the diminished appetite of European investors; in the first four months of 2002, portfolio inflows from Euroland amounted to just $7.5 billion, fully 70% short of the pace a year earlier. In my view, external imbalances are a classic set-up for systemic risk. America's outsized external imbalance highlights those risks all the more. The recent weakening of the dollar, in conjunction with the sharp recent reduction in foreign demand for US securities, suggests that the currency dimension of systemic risk may now be coming into play.

Black Blade: WOW!!! Too much too cover in a few comments, however, Stephen Roach nails it in the scathing review of "Systemic Risk". He makes a very good case for getting your house in order and going defensive.

Black BladeRecent scandals call regulators into question #8010807/08/02; 20:34:13,1413,36%257E33%257E713523%257E,00.html


"There's clearly a growing concern among investors about who's looking over the shoulder of these people who are using (questionable) accounting techniques," said U.S. Rep. Diana DeGette, a Denver Democrat and member of the House Energy and Commerce Committee. "There's concern that the SEC, under the leadership of Chairman (Harvey L.) Pitt, has not taken an aggressive enough oversight role."

Black Blade: Consider that a young man robs a bank at the point of a gun for a couple thousand dollars and is caught – he likely will go to prison for several years. Consider that a CEO (or CFO, or auditor, or….) robs thousands of investors with the point of a pen for millions of dollars and is caught – he will likely get a fine that to him is pocket change and just maybe get probation and be denied serving in such a position again. Don't count on any of these clowns ever serving a day in jail, let alone prison (and a real prison at that). Is the corporate crook any better than the poor stupid kid who robs a bank? Hmmm...

Black BladeHow Many WorldComs Does It Take?#8010907/08/02; 20:46:42


The worst isn't over until everyone fears the worst is yet to come. Even with the scandal du jour in the headlines and more waiting in the wings, we're not there yet.

Black Blade: Bill Fleckenstein exposes a few more warts on Wall Street. I agree with his IBM analysis. We will see much more damage to the markets. Investor confidence is nonexistent now. Foreign cash is leaving US shores. The US dollar will fall further. Definitely get prepared while you can. As always, get out of debt (and stay out of debt) if at all possible, stash enough cash for several months expenses, get Gold and Silver portfolio insurance, and start a nonperishable food and basic necessities storage program. Prepare for the worst and hope for the best. No one will look out for you or yours expect of course – you. Always look out for number one.

Gauntlet-Runner2("GR2")Gold shorting pigs are starting to squeal#8011007/08/02; 21:04:21

POG looks like it has a double bottom with an upslope, short term bullish. Rooy is in a snake coil and should gap pup. With a small bark. Does the metal precede the XAU? Maybe the short covering panic spills over from one to the other. We sometimes see "natural accumulation" of the goldstocks which shows a tighter supply of the metal in correlation, possibly. Other times the POG spikes on news and the goldstocks sit there like they missed the bus, until the next day.
Black BladeBush to seek jail for CEOs #8011107/08/02; 21:13:31

Speech seen as effort to distance president from critics and restore investor confidence.


NEW YORK (CNN/Money) - President Bush could tell Wall Street Tuesday that he will seek prison time for corporate executives who mislead investors -- even after he again answered questions about his own business activities. Bush's speech comes amid a crescendo of worry about the reliability of corporate accounting and presumed malfeasance by top executives, worry that has sunk U.S. stock markets and could hamper the country's nascent economic recovery.

Black Blade: It's a start I guess. A bit late, but a start nonetheless.

Gauntlet-Runner2("GR2")DOW-----GOLD Ratio Chart#8011207/08/02; 21:36:18

To comprehend what this means...........and the truth is always a bit scary.
Traveler345At LAST - GR2#8011307/08/02; 22:00:00


Welcome back!!!!!!

I have missed reading your posts. Please keep it up!!!

The Traveler345

kludge(No Subject)#8011407/08/02; 22:07:41

I know many of my posts haven't really been welcomed here as I've tried to reconcile what I know of gold's history and my personal beliefs and experiences with it, with - for my lack of a better term - "the truth(s) about gold today" that are presented here. From reading the posts and studying the archives, I've concluded that most here do not seem the type that would be prone to paranoia or conspiracy theories (anyone else here listen to shortwave radio programs solely for the entertainment value? :) And there is wisdom here or I wouldn't have wasted my time posting. But there is the one general underlying premise that I have the most difficult time understanding, and I hope you'll indulge me as I try to state it in as few words as possible.

Sierra Madre's post struck a chord and started me pondering, again, the various market manipulators that are generally identified here as the cabal or the PTB. More specifically, I've read from various posts that these (could) include the FED, BIS, IMF, ECB, LBMA, BBs, the big four, the oil state(s), among others.

It seems highly unlikely to me that there is any single unifying vision that is powerful enough to hold all these together with a single-mindedness that transcends borders, political goals/affiliations, and above all, their individual members desire for wealth and power. What keeps splinter groups from forming within the ranks? What keeps the lowly minions and minor players silent? What keeps powerful outsiders from learning the truth and spilling the beans?

I mean, or I think I mean, the interaction required to simultaneously attempt to control and/or manipulate the gold (and likely silver, if not all commodities?) price, the currencies, and the stock markets would have to be an immense worldwide operation to oversee and conduct on a daily basis. A collusion of this magnitude, thats goal is the control of the ONE real money of the world, couldn't be kept hidden from other powerful politicians, rulers, multi-national corporations, and the multi-{m|b}illionaires of the world easily. We're talking about REAL money here, and for the ones that win, ultimate power, right?

If something this big was afoot, with all the powerful players necessarily to pull it off, then they must be taking their marching orders from someone - or some overseeing group, right? Certainly if there was a power stuggle of this size between two or more groups it couldn't go unnoticed - the tug of war would be obvious. So who has the power to dictate course adjustments when necessary, unify the factions, ward off the challengers, silence the informers and media, and recruit the new Presidents, Princes, and Prime Ministers (along with the Congresses, Cabinets, and high-level bureaucrats) that happen into the scene every few years?

Too many questions, I know. But considering the scope, why hasn't GATA found a stool-pigeon with a briefcase of Evidence and a functioning moral compass yet? Why hasn't one insider come forward seeking asylum, or whistleblower protection, with The Proof? Why wasn't ANOTHER and FOA found and silenced for their years of betrayal to this group's plans? They masterminded a global conspiracy, but were helpless to plug a 5-year leak of information?

Surely the old-timers and the wiser newcomers here have pondered these questions and reached a logical conclusion as to how this may have come into being, and still continue to exist and function a couple decades later. If so, can you share your thoughts on this?

Thank you, and I apologize in advance if my questions have offended any.

PH in LAConspiracy#8011507/08/02; 22:42:09


Conspiracy is not really the right word, since it implies a degree of collusion, as you rightly point out, that would be easily punctured.

Rather, it is a process that is carried out publicly, right out in the open, under everyone's noses, with no apologies to anyone. It is simply the way things are done. Period. We keep the POG under control because the system works better that way!

It's a bit like Dubya's "high crimes & misdemeanors" that came under scrutiny today. The poor guy must be scratching his head at all the interest stirred up over something that happened 10 years ago. "But that's the way things were done" he must be saying to himself. "And we did the obligatory whitewash "investigation" by the SEC a long time ago... Of course, nothing was found then, so why does the press insist on beating that dead horse?"

It's just the way things are done. And so when one of our leaders finds out that a stock he owns is in for a beating, he sells it as fast as he can. Why did he buy it in the first place, if he didn't have some good information that it was going up? I mean, we don't actually expect him to lose his own money do we? We all know that's the way it works. This tempest in a teapot that the press is stirring up is just window dressing, isn't it? They knew it all along, too!

It's all been going on like this for years. Right out in the open, under everyone's noses. And nobody said a word!

cyberbat@kludge#8011607/08/02; 22:59:11

Your memory may be failing you just a bit. I can help.There onced was and still is a huge hedge fund called capital one. Their derivities in gold and stocks had turned South on them all of a sudden. Greenspan stepped in and said "This hedge fund with it massive losses is just too big to fail; it would take world banks and large industries down with it if it all caved in. Therefore, I will use your U.S. tax dollars to bail them out." There was no conspirousy here, it was just a simple fact that the big boys could move in to the market place and move mountains. Now, they have a license to do so with Greenspit's blessing.
Go sometime to KITCO 24 HOUR GOLD and watch how it begins each morning as the gold trading reaches New York. You can watch the hedge boys at work as they attempt to bring the price of gold down so they can unwind their shorts.
One guess now and one only; what is the prime competitor of paper money. If you know the answer, don't you think that the paper money boys know too. I don't see any behind the scenes activity; it's all going on out in the open just like when the japs are buying dollars or the us is buying yen to shore each other up and at the same time debasing the currency so that it is worth less so as to have a step up on each other on their trade deficits.
While they call gold a barbous relic, they are constantly putting it on dollies and rolling it around from cage to cage in New York in their basements of the federal reserve. If they are not scared of the relic, why are they not auctioning all of it off? Why indeed!!

CamelConspiracy#8011707/08/02; 23:27:53

PH in LA seems to have a good handle on one side of the coin, but to me ANOTHER and his friends are more the"conspirators" in the true sense of the word in that they are actively plotting to overturn the existing order of the way "things are done." The "Giants" to which ANOTHER refers are people like DeGaulle and the Rothchildes and the intellectual anf financial elite of Europe who started the euro, and they are attempting to convince the Arabs and the Chinese to go with the Euro, and overturn the dollar. I remember one of ANOTHER'S posts in which he was so elated that the Chinese were going to come on board because he feared he had only a "one tooth cat".

I think what happened was that Saddam Hussein got wind of ANOTHER'S plans and jumped out in front of it and tried to portray himself as the leader of the switch to the EURO, an unintended consequence, and that took the wind out of ANOTHER'S sails because he did not to want his ideas to be supportive of someone like Hussein.

Carl H@kludge Cabal Participants#801187/9/02; 00:17:31

First, thank you for recognizing that we are not all conspiracy nuts. 2.5 years ago I thought GATA was nuts -- then I started looking at GATA's evidence and was simply floored by it.

Second, I think that the view of an organized consipracy is not quite the right model to use here. Here is the way I think of it:

At the center is the President's Working Group on Financial Markets (PPT). Among this group are the Treasury and FED. They got the gold manipulation theory from Summers, the implementation wherewithal from Rubin and Fisher, and the OK from Clinton.

The treasury supplied the US gold reserve.

The FED supplied rampant dollar creation to take advantage of the "Strong Dollar" by printing a lot of them.

We know for a fact that ~1700 tons of the US gold is encumbered. I suspect that the only reason that was encumbered is that the other ~6500 tons of deliverable gold were already sold. (Why bother to involve someone else by encumbering the coin melt gold if you have deliverable gold available?) So I think it is _probable_ that substantially all of the US gold reserve has been disposed of.

From the work of Frank Veneroso, it is fairly clear that 8200 tons is not enough to account for the suppression. Some of the rest of the gold came from making deals for various things with various countries. Examples: Kuwait gave up their 80 tons in probably in exchange for a sweet deal on some fighteres. Russia probably got an adjunct NATO membership for some of theirs. And Bangladesh probably got generous flood aid for their 3 tons. What I have had trouble with is what the Euopeans are getting for theirs. My best guess is that they get they weill get a Strong Euro policy after the rot and corruption kill the Strong Dollar policy.

Now, what about the bullion banks -- I think that they got a sweet deal in that they could use the gold carry trade to make a very nice return. I suspect that there are unwritten assurances from ESF that the gold loans will be converted to gold sales if things turn against them.

Regarding the gold mining companies, for many the choice was between hedging and shutting down. Most managers would probably choose to hedge rather than shut down. Hedging is an effective way for the ESF to covertly subsidize the high cost miners.

This addresses many of the participants you suggested. Others included:
BIS - This perhaps makes sense if the strong Euro is intended as the replacement for the strong dollar.
IMF - Definitely complicit because of their instructions to the central banks about accounting for gold loans.
ECB - This perhaps makes sense if the strong Euro is intended as the replacement for the strong dollar.
LBMA - If memory serves me, the BB's are significant members of this.
the big four - I doubt that they were really aware. To Morgan - Chase, the gold stuff is somewhere in the decimal point -- until gold explodes.
the oil state(s) - Probably paid off like Kuwait with the deal on the fighters.

Thoughts anyone?

AristotleRight-O, kludge-man#801197/9/02; 00:18:50

First of all, I think you worry overmuch about offending people with your fair thoughts.

Second of all, for what it's worth, I'm one among a group here ((A majority? I don't know...most are silent.)) that rejects the notion of a "cabal" for many of the same reasons you've expressed in your post. I find there's no need to be apologetic about it. If the truth won't set a guy free, at the very least its the shortest route to enlightenment and prudent independence of action. So it's a key to freedom soon if not immediately, I guess. Nothing wrong with that.

So if it's not the coordinated act of a "cabal, "what are we seeing here, with Gold reduced to these recent neighborhoods of 22-year lows?

It's the aggregate effect of commercial and political interests acting within the parameters and under the influence of modern banking practices treating Gold as though it were Money (instead of the much-preferred condition -- in my studied opinion -- where Gold should be respected as Private Property.)

Modern banking is notorious for artificial inflation of the supply of its Monetary Unit. And to the extent that Gold is wrapped up in the sordid affair, its apparent Supply (existing in the form of equivalent credits and Gold Receivables) is expanded accordingly, and it's price-value suffers accordingly.

A tweaked monetary (banking) system that allows for a market in "Free Gold" to return to dominance should be the prize that all Physical Gold Advocates have their eye upon. Free Gold is physical Gold owned outright, free of encumbrances, warrants, attachments, liens, or claims of any kind other than that of it being Private Property belonging to its one sole owner who has paid for it outright and in full.

You will discover that Gold, when respected under that condition, is SCARCE! This is precisely what Sir Belgian has been driving at lately.

As we all grind our way through this global economic slump, I'd suggest that any government looking to rejuvenate the economy based on a "wealth effect" need look no further than to make haste with policy implementations for a *new* "Gold standard" of Free Gold. A standard of Private Property, not of socialized sharing (and hence inflation) via the Unallocated banking system and use of derivatives. By the very nature of its modern usage, Money -- however humble or solid its beginnings -- is elevated to (reduced to(??)) a Notion. An ignominy that no kingly ounce of Gold should ever have to endure! That is, now that a new structure (Eurosystem) is gaining footing thus allowing/empowering Free Gold to to throw off the legacy dollar-yoke and run afield. Why would they do such a thing? The fair-minded French spirits of Messrs. de Gualle and Rueff live on in others, wanting if nothing more advantages than a leveling of the playing field through termination of Bretton Woods enduring "exorbitant privilege" for the U.S.

I note, however, that it remains a sad fact many traditional Gold-Stardardites simply shoot from the hip in this regard, having an incomplete grasp on the very core of the banking and monetary system, thus failing to recognize the enduring incompatibility that Gold is very Real while Money is merely Notional. Humans being human, it can be no other way, and any honest look and interpretation of history confirms that. That, I guess, is the bad news. For them. Now for the good news.

Free Gold can be yours today if you want it. It's as easy as a bank run with no Lender of Last Resort.

Of course, to those who ask why the Biggies don't just step up to the window to single-handedly bring down the roof, as FOA said with such simple wisdom, (approximately) "Why rush to break up a game that's delivering in your favor?"

So, my friend, keep on earning those bucks, and without fuss keep on converting them into Gold while it remains inconveniently heavy for the price. You'll be richly rewarded in due course.

Free Gold. Get you some. --- Aristotle

HoratioHearings#801207/9/02; 00:33:20

Any CEO that doesen't take the Fifth is a Moron.
You can see from the attitude of the Politicians ,they are in need of a Scrapegoat ,lest the public turn on them.Why don't they call before thier panel of demogoges the regulators that were paid using public money,public payroll to watch these crooks.Give us thier names....and which politician was not paid with campaign funds to look the other way? What did they think that money was for?Altruistic benevelance ?
These hearings are a joke,the problem starts and ends with how we elect our politicians.Somebody is going to take the fall
and any ceo that opens his mouth will be it.Will the regulators go to jail?Thats where the buck stops,and with who hired them.

AristotleTimbervision#801217/9/02; 00:39:37

Thanks for thinking of me in soliciting a response to that Tlaga piece on July 4th.

The longer and more convoluted things get, the less they lend themselves to written discussion. And this is definitely one case where what has been proferred weighs heavily upon the "steaming load" factor. (To be fair, there is much about it that remains good... but to consider eating a pie when half the apples in it are bad??)

In no more than two beers on either side of a table you and I could be through it and crystal clear walking away. As is, however, I won't touch it. Too messy all over the map. Hopefully, my prior post to kludge will show largely where I stand apart from Tlaga's monstrosity. Respectfully, --- Ari

Belgian@ Timbervision # 79917 : Sorry for late answer on the Tlaga article.#801227/9/02; 01:07:25

Yes, my intuition (1 year ago) also suspected the euro/dollar-block, "parity" (including yen). It's all in the exchange rates, isn't it ? This euro/dollar-block "temporary" mutual interest, in GOLD management, is suggested in the "Washington" aspect of the Washington Agreement ! Euroland CBs, pro forma sales of Goldreserves and the US, redefining Goldreserves, twice. Both currency blocks ($/€) in a joint effort to hide THE REAL DEGREE OF PERMANENT CURRENCY DEPRECIATION, with an agreed OFFICIAL degree of PCD. An enormous difference between these two !
Official PCD since 1971 with a factor between 8 and 10 and Real¨PCD with a factor between 15 and 20.

Wouldn't it be nice if both currency blocks, "converge" (parity) to the perception of "stability and growth" as to start, together, from, there on (parity), adjust in lockstep (tandem) for past real depreciation ? Nice, isn't it ? Maybe Kludge can find an answer for the "who" is conspiring/managing, with what kind of force ?

But this joint venture between dollar and euro-blocks is NOT going to last !? Both are extremely ambitious and want dominance as soon as "total collapse" is percepted as impossible. And Gold will play its leverage (fulcrum) role into this power-play.

$/€ (and yen) blocks, as 50% of "contracting" global GDP, has to face the other 50% in full expansion ! A friend just back from China/Hong Kong, witnessed with reliable objectivity, the action going on in the Gold shops. Massive accumulation of the Physical stuff by ordinarry (far eastern) folks. And...
Hugh Hendrey (Odey Asset Management), did it again (was allowed to) on CNBC-Euroland : A very strong Gold statement:
1/ The JPM/C, dangerous derivative situation,
Wow ! The financial media, seem to go for cover and organize the : We told you so !

Sorry for being so brief on this. Hollidays without the www-gear. Greetings Timbervision.

Yellow MetalCarl H (7/8/02; 17:36:13MT - msg#: 80095)#801237/9/02; 01:10:26

The Ant and the Grasshopper

So what's your point Carl ?
Yellow MetalApologies for brevity of previous post#801247/9/02; 01:16:19

Upon reviewing my question to you I found it unnecessarily blunt and indeed rude.
But in all sincerity I do ask the question.
I just don't get it.

Gandalf the WhiteDon't look now, BUT SPOThas awoken and is about to ----#801257/9/02; 01:22:04

JUMP, SPOT !! JUMP !!!!!

steady yellow metal re not getting the ant and the grasshopper#801267/9/02; 03:34:55

The objective of this lesson is to help you to understand that all living creatures have needs. It is
important to know what you need to do in order to survive. Click on the Website in the resource area to the pathway of knowledge.

Aesop's Fables: The Ant and the Grasshopper. In this fable, the Ant is trying to teach the Grasshopper the need to save for an emergency. .
substitue gold for corn and financial meltdown for winter

however in our society there are many who would want to penalize u , ridicule you and possibly even take away the fruits you have labored hard for, and give to those who do nothing and expect everything. I think that was the point there!
got gold, give it a silver lining!

Humble PieAristotle post #80119#801277/9/02; 03:45:15

I wish I had said that,a masterpiece
Black BladeInteresting Night With A Couple Of Gold Bugs#801287/9/02; 04:01:11

I am just getting in from a night having a few cold ones with a couple of Latvian and Russian visitors. They have some interesting comments about oil and gold in the former Soviet Union. However, I will probably discuss this later on as I am a bit unable to focus right now. Can those boys drink! Of course I held up the flag in face of nearly impossible odds. But for now I need some recovery time. It's been a while since I had consumed that much. Cheers!

- Black Blade

Mr GreshamAway#801297/9/02; 04:07:32

Away from computer-land for a couple weeks.

As Bill (Murphy?) and Ted (Butler?) would say:

"Be EXCELLENT to one another!"

Mr GreshamSirs kludge, cyberbat, Camel, Carl H, Aristotle#801307/9/02; 04:44:35

Excellent questions! Excellent answers!

A mystery to me, too. I imagine that the first thing the insiders (and those who wannabe) can agree upon is that the Public (the Cow for the milking) is the Outsider, and no need to rile it.

Nothing to be gained by exposing the game. They (the public) wouldn't get it, and you could only lose _your_ chance at the brass ring. (Rise above the Pubic one notch, and you -- we -- ARE already an Insider, relatively -- now we're just talking your percentage.)

No percentage in being the Spoiler, and perhaps a significant downside as some notable accidents may have served to remind, whether intended that way or not.

Mr GreshamPizz#801317/9/02; 05:05:47

Mixing metaphors here: You keep peeking under the hood, and hitting 'em out of the park.

GR2 -- great to see you around.

misetichANOTHER SCANDAL - Elan CEO Geaney Quits After Drugmaker's Shares Tumble #801327/9/02; 05:45:08


Dublin, July 9 (Bloomberg) -- Elan Corp. Chief Executive Officer and Chairman Donal Geaney stepped down after a U.S. investigation of accounting procedures at Ireland's biggest drugmaker caused its shares to tumble 96 percent in a year.

Analysts have questioned how Geaney and Lynch, both former partners at the accounting firm KPMG LLP, used off-balance sheet investments to lower Elan's debt and boost earnings.


Off-balance sheet items again - this time the auditors are KPMG -
Accounting profession is taking a run at oldest profession, - prostitution - and appears to be taking the lead

Got gold?

misetichChina Gains on Dollar Loss as Yuan Peg Lifts Exports #801337/9/02; 05:53:04


Euro-Asia Agricultural Holdings Co., which gets almost two- thirds of its revenue from Japan and the Netherlands, is benefiting from China's weak currency. The yuan's peg to the U.S. dollar means the two are falling in tandem against the euro, the yen and other currencies.

Chinese exporters stand to get a windfall from the drop in the dollar, which has tumbled 10.2 percent against the yen and 12.2 percent against the euro in the past three months. A falling currency lets them sell more cheaply than competitors in countries such as Korea and Thailand, whose goods become more expensive overseas as their own currencies follow the yen higher.


Can we expect ANOTHER round of currency devaluations in SE Asia?
ANOTHER blow to Japan?
Round and round we go, the domino effect of globalization is staggering - "Somebody" is underestimating China!

Got gold?

Hipplebeckpog#801347/9/02; 05:55:39

I believe things are just as they should be.
The price of gold is balanced between the central banks desire to hold the price steady, doubt about the global recovery and fear of war.
I have said many times that the price will not skyrocket until the general public perceives inflation.
The effects of the dollar fall have not been felt yet by most. But when it is felt, we are going to see the price move.
Gold will not take it's rightful place until people see inflation as real. Right now, all you hear is that there is no inflation, and most people have been conditioned to think that gold only moves when there is inflation. Most people know about how gold was selling for $800 twenty years ago, and they all know it was because of inflation.
Be patient if you want the price to rise so that you can make money off of gold.
Me, I hold gold because I treasure it. I hope to be able to give it to the next generation rather than sell it.

misetichHedge funds attack bondholders#801357/9/02; 06:11:32


Gross said his observations of the market lead him to conclude hedge funds may be shorting bonds of debt-laden companies, sometimes anticipating downgrades by credit-rating companies, which want to counter the perception they were too slow to warn of problems at Enron Corp. and other companies.

``Just as lions cull the weakest and slowest from the zebra herd, hedge fund managers prey on disabled or temporarily injured companies by shorting their bonds,'' Gross said. Shorting means selling borrowed securities in hopes of buying them back at a lower price and profiting from the difference.

Forced to Sell

Hedge funds may be taking advantage of rules that force many managers to sell any bond demoted to junk status, wrote Gross. Bonds of WorldCom, Gap Inc., and Enron traded as if they were junk- rated in the days preceding actual downgrades.

``The game results in billions of dollars of profits'' for hedge funds and threatens companies' survival by hurting their ability to access capital, wrote Gross.

He said corporate bond prices and yield spreads also are being affected by the withdrawal of banks from short-term lending, which underpinned the commercial paper market for decades. Companies were able to borrow at relatively low interest rates because banks offered such credit lines at nominal cost, keeping the spread between corporate and government yields ``artificially low'' since the late 1990s, he said.

``Yield spreads will not return to the narrow levels of yesteryear no matter how strong an economic recovery we have,'' he said.


The Stock Market is small relative to the bondmarket. Distress is being caused as the value of bonds held by pension plans, insurance companies decline. These same institutions have leveraged their declining bondholdings in other assets...

How will this end?

Got gold?

Paper AvalancheThe E in P/E#801367/9/02; 06:41:37

Imagine what the real, GAAP earnings will be for the major indices once CEO's truly fear for their personal freedom, a la threats of jail time for cooking the books. I believe that the notional value of major market indices will be cut in half in six months and still the P/E of the major averages may be higher than they are today once the truth is known.

Thanks Kludge, Aristotle and Belgian for your insight and thoughts. This board never ceases to amaze me in the concentration of intellectual thought and exchange of ideas.

Paper Avalanche

Carl H@Yellow Metal - The Ant and the Grasshopper.#801377/9/02; 07:16:35

My point is people don't like to see a few make money when most are loosing their shirts. So before this is over, expect gold and silver holders to be made to look like villians in the press and expect attempts to either confiscate the metal(s) (for the national good, of course) or heavily tax the profits from it.
Paper AvalancheSilver chart on Kitco - trading halted?#801387/9/02; 09:04:56

Does anyone know why the Kitco chart for silver show it flat-lined at 4.98? It would appear that all trading has been halted. Am I mistaken in this interpretation? Rich, have you heard anything? Any word from Ted Butler or David Morgan with respect to defaults on the exchnage suspending trading?

Or is this simply a glitch on Kitco's systems (they have happened before). Please note that silver flat-lined yesterday as well a few minutes into trading.


Paper Avalanche

miner49ertimbervision @ 79917 #801397/9/02; 09:11:41

Greetings, timbervision -- Sorry for the late response re: Tlaga article; been away... Will just try to briefly address your question. The discussion of whether the money powers want to keep gold from ever re-valuing (upward) is in part a matter of one's perspective of how the whole thing is played by these powers. And since our view of the activity is remote, and left to much guesswork, it is really only possible to evaluate at all in very large chunks.

First, if the global banking system were indeed content to continue within the current dollar-centric framework, then it is not unreasonable to conclude that the current game-playing could go on in all its hideous excess for a long time to come. In it gold, as a de facto currency, must be subjected to all the exchange games to which every currency is exposed. So, IF all these monetary forces do continue to subscribe to a dollar-dominated world, then it IS in their best interests to keep the dollar looking good by keeping the gold price down in terms of dollars.

This, however, is a very big IF. If this paradigm is challenged with a viable alternative, one that does treat gold differently, one that conceives of gold positively, then the real possibility exists for the gold price to rise drastically (as the real-physical stuff IS very scarce). There are chiefly two currency blocs in viable competition for global reserve/settlement status: the dollar and the euro. One suppresses the gold price as a constant (officially), and at an artificially low price (unofficially, in the paper markets as transacted in dollars). The other revalues it to the spot price quarterly.

The gold-price suppressing currency must remain strong in its users' eyes relative to gold, since it is declaring itself to be stable in terms of gold. Human nature will, however, inflate it recklessly as long as it can get away with maintaining this stability fiction. In order to create and maintain this illusion, the system must (among other things) make the gold supply seem more than enough for all who want it. Hence its supply is also (artificially) inflated with paper gold. Eventually, unless ALL the players keep agreeing to pretend and play along, this is one giant train-wreck in the making.

The currency that revalues to the market price of gold, on the other hand, benefits by a rising gold-price, as this increases the value of its gold reserves. It is not in competition with gold as a currency, is not threatened by it, and is opposed by design to its price suppression (and artificial supply inflation).

If nothing else, this alone should refute the notion that ALL the players are in cohoots to keep the current dollar gold-price suppression paradigm intact. Here you have the no-turning-back committment of the financial structure and economies of hundreds of millions of people to a new currency that demands a positive view of gold, and ultimately its true value to be recognized. Why on God's green earth would they subscribe to furthering the current price suppressing framework? Why would they have spent several decades making a new currency with this in mind, if they did not intend to see a revaluation of this component of their reserve base?

Certainly, as the euro faction is just as prone to the failings of our human nature, they will themselves find a way to wreck their system eventually, too. But that is for worrying about another day. In this phase, a transition to the euro as the dominant currency of trade will necessitate the eventual rupture of the dollar paper gold markets, and likely the dollar itself. It will also bring about a very major upward revaluation in the price of gold. This will not be BECAUSE of the masses moving the market -- although their participation is essential. It will be because of the design and dynamcis of the monetary forces in place, and how they relate to the natural human tendency to consider gold as something of lasting, real value. One has fought against this current of human nature for ages by controlling its price, and is at exhaustion; the other has postured itself to ride this flow to its advantage by liberating its price, and not only ride it, but even be energized by it for some time to come.

So, like Ari mentioned to you, this could probably be ironed out quite handily over a beer or two, but there are so many rabbit trails to this whole issue that written discussion becomes next to impossible. I encourage you to read through the various archives at this site, especially the FOA/Another archives to get a fuller treatment of all this. This is probably better than rewriting what's been written a hundred times, anyway...

Best regards,

PizzPaper Avalanche#801407/9/02; 09:11:59

Try this for silver quotes


YGMUSA GOLD BANNER @ GOLD-EAGLE.........What a Great Sight!#801417/9/02; 09:29:10

Kinda makes ya feel like saluting.....Anyways it is nice to see when you open the GE Forum page.....I hope this leads to more mutual contact between the two "BEST" Gold Forums on the Web.....United we stand, good neighbours all with the greatest common interest.....YGM...(a relic from both worlds)
tedwAdvertisements #801427/9/02; 09:38:56

Noticed the last few days more ads for precious metals. Cable tv ads are promotng gold as an alternative investment
due to declining dollar and stock market.

Ive noticed it in some print media too (worldnetdaily).

Investor demand has been the missing item in the Gold market, and the above are anecdotal evidence of the return of the investor.

Since most people are hypnotized already,Im sure fixating on a tv that tells you to buy gold is not going to hurt investor demand one bit.

After reading the above, concentrate on this dot . for a while. Wordlessly, it is saying "buy gold"

YGMStrange to see the Yellow jump with GW pep talk on Wall St.#801437/9/02; 09:58:37

This is not what I expected....YGM
RobotGuyNice to see old yeller back to her old tricks#801447/9/02; 10:08:32

Mini-spike at high noon eastern. They'd better hurry back from lunch to smack 'er down.



sectorTlaga's Tripod -- 1$=100Y=1euro#801457/9/02; 10:15:22

The Slipper is Too Tight

Tlaga has offered on July 4th that there may be a tacit agreement between authorities so as to assure that 1 $USD=100Y=1Euro.

There are at least three fatal problems with this idea.

First, Japan's industrial export base is already strapped badly at Y=120. Expecting them to take another 20% discount hit to their anemic bottom lines is unreasonable given the terminal state of their banks and life insurance companies. Recall that life insurance dividends to elderly Japanese are severely threatened in their worsening recession and debt crunch...which further threatens savings deposits which are losing as of April 2003, ALL deposit insurance. The gold market would have received a steroid boost if the yen had fallen under 140, as it was threatening earlier this year. The Japanese are caught between the gold monster if they devalue and failing industry if they don't.

Second, Tlaga's formula ignores the deteriorating credit integrity in both the US and Japan [Not that Europe is much better]. The credit shell game got even more stressed by all the emerging corporate scandals. Inflation as a way of life is a dream afflicting only a few at the Fed and ECB. Countervailing forces exist in Moody's and the S&P...not to mention the listing bond market.

Finally, seeking a magic fulcrum number to balance Western currencies also passes by the gold manipulation can't be manipulated forever because it requires physical tonnage as a derivative consumable. Perhaps Tlaga imagines that gold will be somehow released at the $1=Y100=E1 fulcrum point since Western currencies will equally divide the gold losses? I don't think so.

More likely is a replay of the 1971 dollar deval when rebel Dredsner Bank finally broke ranks and became a buyer of precious metal. Russia, China, The ME money centers and others standing to gain from a gold price rise, have the power at any moment to upset the gold cartel's delicate shell-game equilibrium.

It is a nice try, but at the end of the day the theory ascribes unreasonable cooperation among theives.

jayzeeBush speech#801467/9/02; 10:22:22

Bush says that we should double the prison time for corporate officers that are guilty of fraud. The problem is that these big money people usually get off with a relatively small fine if they are caught, and they do not serve any prison time. So, 2 times zero still equals zero, so doubling the time in prison amounts to NOTHING!!
sectorFed "Studies" Japan--The Fed KNOW'S It's in Trouble#801477/9/02; 10:46:44

07/09 00:01
Fed Research Is Window Into Greenspan's Thinking: Caroline Baum
By Caroline Baum

West Tisbury, Massachusetts, July 9 (Bloomberg) -- Accounting scandals must be becoming pass‚. How else to explain the buzz about a Federal Reserve working paper, even as congressional hearings on WorldCom were getting underway?

``Preventing Deflation: Lessons from Japan's Experience in the 1990s,'' by Alan Ahearne, Joseph Gagnon, Jane Haltmaier, Steve Kamin and a gaggle of other economists from the Fed's Division of International Finance, explores Japan's experience in the 1990s and the lessons learned about the policy response when inflation and interest rates are close to zero.
Often it seems as if Greenspan starts with the conclusion and works backward from there, dangling the challenge of ``who can get me the answer I want?'' in front of the staff, says Paul Kasriel, director of economic research at the Northern Trust Corp. in Chicago.
Economic "Scientists" who START with conclusions are wrapping themselves in the cloth of failure.

YGMFinacial Swat Team?....OK!>>> :>}}#801487/9/02; 11:05:00

Bush announces 'financial crimes SWAT team'

President George W Bush has called for stiff new penalties for corporate criminals and a crackdown on boardroom scandals.

He made the call in a speech on Wall Street.

President Bush announced a new task force for the pursuit and prosecution of corporate criminal activity.

He said, "We will use the full weight of the law to expose and root out corruption."

The president called on the US Sentencing Commission to recommend longer prison terms for corporate executives guilty of fraud.

The task force will be headed by Deputy Attorney General Larry Thompson and include investigators from the Department of Justice and other agencies.

Bush likened it to a "financial crimes SWAT team, overseeing the investigation of corporate abusers and bringing them to account."

***This new team is going to get an email/fax barrage from the GATA Army...IMHO....YGM

YGMA Repost from a Friend and his own valued comments.....#801497/9/02; 11:30:46

Bang on Commentary........"DERIVATIVES"

Poster's Note: Anyone reading this article can not help come away without realizing why the Central Banks are very scared about higher gold prices. Barrick in conjunction with some bullion banks have created a monster than can destroy the banking system and also ultimately Barrick Gold (ABX). I would not own ABX under any circumstances. Nor will I own any of the shares of the bullion banks.

It appears to me gold prices will have to go much higher some day in the future for reasons that are obvious to any gold bug. The only question in my mind is when. The central banks and the bullion banks do not have enough physical gold metal to keep up this charade forever. When the day comes when these people can not longer play their dangerous game, ALL HELL WILL BREAK LOOSE.
Gold Derivatives

By Ian Williams
Tue 9 Jul 2002(11151)

LONDON (ShareCast) - There may be trouble brewing in the gold market. But for a change, this trouble will be good for gold bugs as an unusual confluence of events pushes gold, currently trading around $310 an ounce, to $400 and above. And it will prove very bad for any big-name banks caught on the wrong side of this price move.

The phenomenon revolves around a highly unusual form of gold derivatives, a market in which Citibank, Goldman Sachs and JP Morgan are the major players. The particular form of derivative is a type of hedging pioneered by Barrick, one of the world's largest gold producers and a leader in innovative hedges.

Ordinarily, a hedge protects a producer or investor from the downside, but, other things being equal, it does so by limiting their upside. Barrick, however, has managed to construct a hedge that allows it considerable upside if gold rises. And one big bank could be caught very short.

Barrick has been a very good hedger, making use of all sorts of instruments and investment strategies. In fact, at the end of 2001, its hedge book had assets of $5.5bn, which was more than the gold-mining part of the company.

It appears that part of this success comes from what is known as a spot deferred forward sale contract, which it started using in 1990.

Barrick makes a forward contract with a bank to deliver (unmined) gold at a certain price at a certain date. But - and this is what makes these contracts different and, indeed, dangerous for counter-parties - Barrick also had the right to defer the delivery of the gold for periods ranging from five to 10 years. Recently Barrick has entered into contracts that allow it to defer delivery for 15 years.

While deferring or rolling over a contract is not unusual in the financial world, it can usually be done for only a short period and both parties have to agree. But Barrick appears to have pulled off a coup by writing extended-length contracts that allow it to take the decision unilaterally.

This can be very lucrative for Barrick. Say gold is trading at $300 an ounce and Barrick agrees to sell Bank X 1m oz of gold at $320 an ounce in 12 months. If gold then trades at $310 an ounce one year later, Barrick will sell the gold to the bank and receive a better price than it would get elsewhere. But if gold has shot up to $350, Barrick can choose to defer the sale to the bank, and sell its gold in the market. This gives it the best of both worlds - little risk and the highest price available.

If you are Bank X holding the obligation to buy the 1m oz at $320 per ounce, then you need to hedge this position in the market. Standard gold futures contracts have no deferral clauses, so you sell forward the gold that you don't have, which means you are now relying on Barrick to deliver the gold so you can fulfil your end of the bargain.

If Barrick decides to defer the sale, though, there could be trouble - which is what we hear could happen.

Apparently, one sizeable bank active in this market has a gold derivatives book of $41bn, a significant part of which is attributable to its dealings with Barrick. Barrick's contract apparently has the option to defer any sale. If the gold price starts to accelerate, Barrick could choose to defer and the bank will have to find some other way to get the gold it needs to fulfil its own obligations.

How will it do that? It will have to buy the gold - potentially hundreds of millions of dollars worth - in the market. A forced buyer of that size would send gold rocketing to $400 or even $450 an ounce, prices not seen since the early 1980s.

You may have a question: How could a bank do something so risky? Eight words give a clue to that: Enron, Savings & Loans, Long-Term Capital Management.

Ian Williams is head of fixed-income and commodity research at Durlacher.

Financial broadcaster Ian Williams is head of Durlacher's fixed-interest team

PizzYGM#801507/9/02; 11:33:57

I've got about the same amount of faith in the new swat team as I have had in "the war on drugs". You can't legislate morality, and who's going to decide if it's criminal or requires a hand slap? All it's going to do is be the enforcement arm of the upcoming "do they get a governmemnt bailout or not?"

Right now the PTB are discussing what to do next. Gee, the speech didn't work and gold's goin' up. What? Nobody believes our reformed attitude? Why should they? All they've managed to do is put every CFO in the country on alert, and even the ones with just aggressive accounting are going to be telling the CEO's and Boards what to do with their agressive ways. Earnings rebound? Not likely.

Default and deflation? No way, look for Japanese devaluation and massive stimulus via bailouts, and massive war time spending, further decreases in interest rates, and bailouts in the US (and any other country that needs it and toes the line).

Gold and silver should start discounting the coming inflation.


goldfoolYGM/RobotGuy - Old Yeller back to its old tricks#801517/9/02; 11:41:55

Every once in awhile the cabal finds it prudent to allow these mini-spikes to occur to run the buy stops (a house cleaning of sorts) then turn around and hammer the price down again so as not to spark any major interest and provide any momentum to the upside. Quite effective in teasing and demoralizing the longs and picking up profits. They talk about Wall Street being a sewer, well the COMEX is the resevoir outside a sewage treatment plant. The other scam they run is writing out of the money call or put options to unsuspecting investors. These investors are lured into the trap by the price gyrations as described above, good gold fundamentals, and by precious metal "con artist" bank analysts who set overly optimistic price targets. The banks or funds they represent will even participate in the buying to drive the price up then at strategic points turn around and sell heavily to get momentum going in the other direction by running stop losses and then pocket the big profits. Upon option expiration the price is fine tuned so that it falls in between big blocks of out of the money strike prices and they collect almost all the premiums. You can do this easily with the resources they have. This happens not only with gold futures and futures options but gold stocks as well. Small investors with even with good money management skills have almost no chance of making any money from this rigged casino which serves two purposes: it's an easy money maker for the large investment banks who in actuality carry out the dirty work for the central banks who want to keep the price of gold down in order to maintain confidence in their fiat currencies. The government of course officially denies any participation and looks upon this these activities as a necessary evil.
The HoopleJames Grant's excellent WSJ article#801527/9/02; 11:56:32

As usual James Grant offers wisdom where buffoons like Bush and his cronies offer chicanery and hypocrisy.

Snippit: "if U.S. stocks were absolutely and unequivocally cheap, today's alleged crisis would be self-correcting. Having fled an overvalued market, people would be creeping back into an undervalued one...(the stock market) is a proverbial $20 hamburger, or $25 hamburger, a bargain only in comparison with the %100 sandwich".

Well said, Jimmy. The gold market appeared to treat the Bush drivel like the soldier on the fort in the Monty Python movie "The Holy Grail". "I fart in your general direction".

YGMFWIW....Gold Spike Today....#801537/9/02; 12:02:39

One Big Buyer Today?

So far today I have read "Two" different Brokerage in house memo's referring to an (undisclosed)Investment Bank going long Gold...Expecting a near term retest of $330.00+ level....All fundamentals remain bullish for Golds move both reports say.....What two trading houses think/know, many others will also....FWIW....YGM.
YGMPizz (7/9/02; 11:33:57MT - msg#: 80150)#801547/9/02; 12:09:42

No faith here either.....

Just a hope that this so called 'team' may put a little fear in the Paper Whores.....Plus the GATA email/fax machine Army has another venue to drive crazy and gain a little more exposure possibly?....YGM
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adminThe Daily Specials Board: For Immediate Delivery. . . .#801567/9/02; 12:30:53

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BelgianDecoding Rhona (WGC) CNBC-Europ, this morning ?#801577/9/02; 12:32:26

The WGC wants to create easier acces to Gold-Holdings by means of gold-certificates (say : paper) !? Reason : Gold is to heavy for its price...whoehaa (You like this Sir Ari ?). But, more seriously is the fact that the WGC was on CNBC and talked about Gold... most probably becoming scarcer and scarcer. Let us suggest to WGC that our host has no problem with shipping the PHYSICAL, only a call away.
Let us suggest to WGC, that more and more accumulation of Physical, inevitably leads to much higher prices and declining shipping costs. Etc...etc...

1971 >>> present :

POG : 41$ >>> 320$ (x 8)
Oil : 2,5$ >>> 25$ (x 10)
US debt : 600 Million >>> 6 Trillion (x 10)
Bonds : capitalization (x 8)
Dow Jones : 1.000 >>> 11.000 (x 11)
Newspaper, haircut, bread and other regulated (controlled) items, are within this same 8x/10x Currency Depreciation ratio : The Official one ! The managed one !

Detecting the REAL degree of currency depreciation is a very difficult job. There are not that much real goods and services that are not price-influenced by the above mentioned items or imported cost elements from the colonized workers on the globe. But even with the managed (falsified) depreciation factor od 8x/10x, the more "free" priced goods/services are within the 15x/20x range.
Once oil/gold/interest rates, are adjusting to the real depreciation...HYPERINFLATION will surface much more clearly. And will be much higher than factor 20x from 1971 till now.

It is in this coming period of inevitable "hyperinflation" that GOLD will set itself FREE. Trainloads of fiat will be needed (provided) to keep the bulk of our western economy afloat and sailing. This whilst more than 2 billion non western people, expand, economically, at the speed of light.
800 million (m not t) will soon have much reasons for panicking, with or without confidence restoration speeches or acts. It is too little, too late. Western Economic expansion (compromise) and WAT (Sassam ousting) don't go (will never), hand in hand (Bush speech)! War AND prosperity is nonsense.

Under normal, officialy managed, circumstances... POG should, presently, be floating into the 600$ to 800$ zone.
(41$ x 20 = 800$) Taking well into consideration that the 1971 POG=41$ was already a strongly manipulated price. A ridicule low POG is reason for an as ridicule low POO and a surviving economy. The West (numeric minority) succeeded in having the "purchasing power" on its side. Not much is needed to crash this purchasing power. When the scarcing Physical Gold, becomes un-available...the whole charade implodes. And it is not because POG increased by as little as 20% (253$ >>> 315$) that the media start to bring some serious Gold talk on the show ! They knew already what is the achillus heel of the Gold Management : PERMANENT (sustained) PHYSICAL ACCUMULATION ! Denial >>> Acceptance >>> Capitulation and panic. In that order...again and again.
A POG of 600$/800$ would bring a POO = 40$/50$. This price zone has already been tested, twice. Do you remember how much pain it caused ??? And all this with a succesfull price-raid on oil in 1999 = 10$ per barril ! POO strenght, today, is VERY significant for what the future will look like !

Disclaimer : Belgian is holding his "heavy" coins !

PizzYGM & your paper ladies of night#801587/9/02; 12:43:41

My take would be systematic covering of short PM positions in indirect ways. I don't think the paper gold markets can handle the direct offset, so if the fundamentals and a few big money players (taking long positions in gold) push up the price, the bullion banks might have to "offset" gold losses with profits from other areas. Not their first choice, but better to lose a manageable chunk rather than go belly up chasing gold to the moon.

The kicker here is the bond markets. Most think Greenspan will have to raise rates to support the dollar. I don't think so, in fact, my guess would be the opposite. a couple of 1/2 point cuts, very timely, sending the bond market skyward (and a relief rally in the SM) (my guess is there are quite a few big players short right now, and Greenspan hates the arbitragers, could give the JPM's of the world an indirect windfall to offset the gold derivitives losses now brewing(or a big chunk of it). Besides, if Japan devalues like I think they will, the rate cuts would keep the dollar in play in the currency race to the bottom.

Everyone says were're in a housing/real estate bubble. I disagree. They have to hyper inflate, and with freddie and fannie making it easier for loans, I'd say they're going to try to get all who can into housing before the inflation.

Think about it, the NASdaq was a bubble, but we're no where near a real estate bubble like Japan got into. Lots of room there, and it will stave off armageddon for a few years.

Kind of rambling, but they're backed into a corner. Defalt and deflation will send us into the abyss. When you're really scared, the instinct is to run as hard as you can in the opposite direction. We'll see.


YGMAOL Bonds Nearing Junk Status...#8015907/09/02; 12:54:37


The company has roughly $23.7 billion in outstanding bonds and its 10-year notes are trading as though the company were rated four steps below its BBB+ grade.

AOL's coupon notes rated at 6 7/8 percent and maturing in 2012 were quoted at $885 per $1,000 of face value, with a yield of 8.63 percent.

That figure is 3.8 percentage points more than comparable U.S. Treasuries.

Junk bonds are generally defined as those that trade more than 3.5 percentage points above Treasuries.

"In this market, there's no tolerance for an opaque credit, and that's what these guys are," said Eli Lapp, a fixed-income analyst at BNP Paribas in New York, referring to AOL.


**Imagine the fallout if AOL is also discovered at having done some "CREATIVE" Accounting in this great purge....YGM.

TownCrierThrough this, can you see why the U.S. Treasury quit selling 30-year bonds?#8016007/09/02; 12:57:50

BUENOS AIRES, Argentina, July 9 (Reuters) - In a regular debt sale aimed at soaking up liquidity to prop up the peso, Argentina's Central Bank said late on Monday it had sold 247.9 million pesos ($68.9 million) in 14-day debt at an annual interest rate of 129.7 percent, higher than recent auctions.

-----(see URL for more)-----

You can see from the Argentina experience, the market price gives away the game, revealing the state of affairs. It's more prudent not to try selling them (30-yr) and let the price get somewhat propped up from the dwindling supply.


TownCrierPost Script to previous...#8016107/09/02; 13:01:09

With an annual rate of 129.7 percent on 14-day loans, can you imagine what interest the market would require if Argentina tried to float 30-year debt?


Belgian@ YGM / @ Goldfool#8016207/09/02; 13:01:12

Nice description and, most probably, a correct vieuw on how the derivative gordian nod is entangled. I'm pretty convinced that the final outcome of this paper-circus will be heavely reduced in importance, once the Gold community (what's left of it) sees that continious, under-the-skin- accumulation of the Physical is a factual given. Once, Physical Holding will be experienced as a *happy* feeling in the midst of other paper vaporization. POG momentum-phases, are increasing in frequency and soon in magnitude.
The paper is heating up. The entropy within the Gold molecule is increasing ...and so on. Thanks for the derivative mechanism, explained, better and better.

Black BladeFBI sweeps jewellers for 'terror link'#8016307/09/02; 13:05:27

Dozens of stores were raided by FBI agents


US investigators have raided dozens of jewellery stores across America suspected of laundering money for Osama bin Laden's al-Qaeda network, US officials have said.
About 75 jewellery kiosks, mainly owned by Pakistanis, were reportedly targeted by FBI and immigration officials over the past two weeks. The stores came under suspicion after an employee was detained after spending hours photographing the World Trade Center days before it was destroyed.

The owner of Intrigue Jewelers in Pittsburgh, Tariq Hussain, said FBI agents questioned him for several hours and wanted to know about any links he had with bin Laden of al-Qaeda. "They took everything, my paperwork, bills, my computer, my cheques," he said. Civil liberty and Muslim groups have reacted angrily to the raids. "These people are being confronted - and in some cases terrorised - based on no evidence," said Ibrahim Hooper, from the Council on American-Islamic Relations. "Even when the FBI says there is evidence, it is never anything anyone else is allowed to see," he said.

Black Blade: It could be worse. We no longer have concentration camps like we had for Americans of Japanese decent.

goldfoolPizz @ I don't think there's a housing bubble#8016407/09/02; 13:18:34

The U.S. financial system is now dependent to an unprecedented degree upon one prop: the greatest housing-real estate bubble in human history. A hyperinflationary spiral has sent home prices shooting up by 10-40% annually in recent years—depending on the region of the country—and artificially pushed the price of millions of homes into the $400,000 to $1 million range or above. Already in 2001, one out of every ten homes for sale in the United States was priced at $1,000,000 or more. Since then, prices, assessments, real estate taxes, and mortgage credit volume have continued to spiral upwards, even as the productive economy staggered downhill. Many homes today are simultaneously glorified shacks—with plastic exteriors and gold-plated faucets in the bathroom—and yet unaffordable to most American families.

goldfoolPizz @ I don't think there's a housing bubble#8016507/09/02; 13:21:42

Sorry, first timer.
YGMGATA news @; 13:58:47

Widely read site that helps....YGM
goldfoolPizz - One more thought about the housing bubble#8016707/09/02; 14:01:54

Isn't it ironic (or is it?) that the current inflationary trend in home prices started about the same time as the manipulation of the gold price in '95-96 as evidenced by Gibson's paradox? (The divergence between the price of gold and real interest rates).
Gandalf the WhiteThanks "newbie" Sir Goldfool !! AND, a belated WELCOME !!#8016807/09/02; 14:03:06

You are doing well after you "Jumped-in" !!
Now you have MASTERED the "LINK" !!
The Hobbits are all re-reading you posts and wish to advise you that they think that you were trying to "fool" them with the use of that "handle" !!

Pizz@goldfool#8016907/09/02; 14:05:52

You may be right, but keep in mind, Greenspan thought we had irrational exuberance a few years too early also. Housing may not be real affordable now, but people are still buying what ever way they can.

A bubble is when prices are so high people just walk around shaking their heads saying "impossible", and then the prices go higher.

I'm wrong about 45% of the time, but I still throw my thinking out for others to comment on.

thanks for the feedback.


Gandalf the White"Oh, What a difference a DAY makes!!!!"#8017007/09/02; 14:17:02

The Hobbits are singing and smiling again ! Look at the BEST Sector on the Markets today. How are you feeling now Sir Jimbo ?
Chap X(No Subject)#8017107/09/02; 14:23:18

YGMPizz....#8017207/09/02; 14:25:14

Housing Bubble?

Whether or not one views it as a bubble probably depends on which side of the spectrum you're viewing the picture from....A Bubble to those who can ill afford the sector and for those that can afford it remains a viable market with expected upside potential....Trouble is which view is reality based and also how long will RE sector continue to draw investment from the Trillions of sidelined Market dollars...I see it as both a Bubble and a yet one with lots of possible upside before correction....Even after 1929 and thru the 30's RE skyrocketed in some geological areas and bottomed out in others....Good insights are hard to mold and you're helping mine....Thnx for the discussion....YGM.
AristotleA couple handshakes#8017307/09/02; 14:35:51

miner ( msg#: 80139),
You, my friend, are a Saint.

Belgian ( msg#: 80157),
"Trainloads of fiat will be needed (provided) to keep the bulk of our western economy afloat and sailing. This whilst more than 2 billion non western people, expand, economically, at the speed of light. ......Western Economic expansion (compromise) and WAT (Sassam ousting) don't go (will never), hand in hand (Bush speech)! War AND prosperity is nonsense."

Belg, ol' man, on that first item you point clearly to a key element that many would overlook to their everlasting financial misfortune (missed opportunity.) The current bullion banking Gold market structure (shell games with Paper Gold) simply can't weather the coming "Storm" that prosperity will bring with it. Doom arrives on the wings of doves!

I've actually made the same claim myself that Gold would benefit most in good times rather than bad. Seeing this same point made by the most estimable YOU, Sir Belg, gives me great comfort to know I've not actually beome witless wandering lost and alone in the wilderness.

--- Ari

misetichANOTHER Scandal? Vivendi's Financial Information Probed by Regulator #8017407/09/02; 14:47:45


Paris, July 9 (Bloomberg) -- Vivendi Universal SA is under investigation by French securities regulators over its reporting of financial information since January 2001.

Jean-Rene Fourtou, who replaced Jean-Marie Messier as chief executive officer, said last Wednesday, his first day on the job, that the company faced a ``liquidity crisis.'' Prior to that, Messier had told investors the company had no cash problems.



They're coming fast and furious - crooked bookkeeping - crooked CEO's, crooked investment bankers, brokers everywhere
How will this end?

Got gold?

Black BladeCLEAN UP YOUR ACT OR THE BULL GETS IT By JOHN CRUDELE #8017507/09/02; 14:48:36


July 9, 2002 -- A ransom note from the little guys to the business bigwigs who blew our life savings.

TO: Wall Street, corporate and Washington fat cats.
From: Angry investors.

If you want your bull back alive, here are a dozen demands.

Black Blade: An interesting article that lays it on the line. The bull is dead and now investors threaten to bury the carcass.

R PowellPizz // housing bubble// today's POG and POS#8017607/09/02; 14:55:20

Like most of us over half a century old, I think today's housing prices are outrageous. However, the houses selling at $200,000 will be priced about right when the dollar devalues POG up to about $650/ounce. I found the driveway covered with change once. My daugther had cleaned out her car! Money in the driveway. "But dad, it's only change!" You bet your life dear old dad picked it up. I cheek the driveway, now, every morning. What will they do after Belgian's hyperinflation (after Bigfloat's return?) starts and POG flies into four figures? Will the kids throw away anything less than a sawbuck?
I've heard the government is now printing paper of a different color. When the time comes, how many of the old green ones will it take to buy a shiny new "blueback"? How many of the blues after that will be needed to buy the next color?
Belgian, I enjoyed your list of 1971 versus todays prices and number of times inflated. If we included silver in the list, I think we'd see something even more undervalued than gold.
Pizz, you caught my attention with your, "Gold and silver should start discounting the coming inflation."

Perhaps prophetic prediction previously (80150)
proclaimed, properly precipitating prescient positions, perchance predicating preserved purchasing power.
It appeals to my financial instincts that POG and POS will move up more before the everyday Jills and Joes start complaining about even higher prices of goods and services. I'm doing my part, I raised the price of my labor (work) this year. It's become almost an annual family business tradition, to acknowledge all the good printing of the Fed. I even see it as a patriotic gesture to insure good use of the Fed.'s work. Everyone should carry many pounds of paper money all the time.
YGM, thanks for the word of large players entering on the long side. Can you reveal any more?
Beware, this Friday is expiration day for August precious metals' options. What, now, is the dollar price that requires the least amount of payout from the option writers?? Actually, some studies have found that there is no advantage (profitwise) in granting options over purchasing them. This, I believe, assumes a "free" market.
Any other news as to today's delightful price results???

misetichWhite House's Lindsey-only a few CEOs broke the law#8017707/09/02; 15:03:33


WASHINGTON, July 9 (Reuters) - White House economic adviser Lawrence Lindsey said on Tuesday that relatively few top executives were involved in corporate misbehavior but promised that any offenders will be hunted down.

"The crooks are being investigated and the crooks will go to jail," Lindsey said on CNBC television.
"The number of people who've actually committed crimes is relatively small, it may be a matter of dozens or whatever, but it's a relatively small number."


Dozen or whatever? Over 7.5 trillions of market value has disappeared (transfer of wealth to investment bankers, CEO's, auditors, corporate insiders) and Lindsey has the audacity to claim only a dozen - hundreds if not thousands of dot.coms scams have taken place - probably over 25% of the S&P 500 have cooked their books in a variety of ways, pro-forma etc- investors are not going to be soothed by this type of nonsense - they want their money back -

Go ahead Lindsey, underestimate and perpetuate the problem -they say if it isn't broken don't fix it - its broken Lawrence!

It is this type of leadership that lets me say

Got gold?

Black BladeFalling dollar's far-reaching effect#8017807/09/02; 15:06:56

Tourists and investors feel the pinch – and home-buyers might soon


For foreign investors, a falling dollar also reduces the value of their stock holdings – at a time when the US markets are falling. This could make it more expensive to finance the federal budget if foreigners decide to move their money elsewhere. That could ultimately make it more expensive to buy a house or car, since Treasury bills are the base against which most interest rates are set.

There are already signs that some of the world's central bankers are getting queasy about the weakening dollar. Last week, for example, the Bank of Japan and the European Central Bank intervened in the currency markets to try to stabilize prices. Both are concerned about competitiveness.

Black Blade: This could lead to some serious readjustments to the long overvalued US dollar and push precious metals much higher. Amazingly the three major regional currencies (the US dollar, Euro, and Yen) are struggling to have the weaker currency. For the Japanese it is a matter of nothing less than survival. For the US and Europe it is a matter of fighting to emerge from the deepening recession – in spite of the ludicrous claims of a "recovered economy". There are so many parallels to what happened in the last Great Depression it is too hard to ignore any longer. As always, get out of debt (and stay out of debt), stash enough cash for several months expenses, get Gold and Silver portfolio insurance, and start a nonperishable food and basic goods storage program. Prepare for the worst and hope for the best.

Off to the gym!

YGMRich.....#8017907/09/02; 15:15:44

Traders Info....

Reveal more? no I wish I could but it would be detrimental to my sources & then me:>}...actualy there was little more than what's available mainstream sentiment. I'm sure they're just guaging the temp & flow like the rest of us...
I just thought it relevant both (separate Bourse) memos had almost the same comments and both were anti-dollar, market declines, Gold shines attitudes. Both felt a strong retest of $330. was in the cards..Not pro bear type hype we have to live on usually.... I wouldn't doubt Bill (Cafe) will have the scoop on the big buyer/s in his Midas tonite. ..YGM.

"Go Silver, Go Gold, Go GATA"

misetichO'Neill says US stock market laying foundation for 'another leap forward' #8018007/09/02; 15:23:33


"Technical people would tell you what we're now going through is testing the lows that we hit after September the 11th," O'Neill said in answering reporters' questions aboard Air Force One en route to President George Bush's speech earlier.

"And that's a basis for creating a foundation for another leap forward, above the highs that we've ever achieved," O'Neill said.
Separately, he likened the task of Justice Department's newly proposed Corporate Fraud Task Force to the federal government's 1930s campaign against mafia alcohol-running.

"In my mind, it's the equivalent of the Elliot Ness attack on organised crime," O'Neill said.


Lets hope O'Neil is right - would like to see an "Elliot Ness" type investigate the ESF and Treasury alleged manipulation of gold

It is this type of nonsense -resorting to"technical analysis" from the US Treasury - concealing the obvious - the bubble has burst - and since the bubble was created by a combination of debt creation ad infinitum, fraudlent bookkeeping, gold suppression schemes

Mr. O'Neil is not going to convince too many investors with his "technical analysis" - and I wouldn't be too surprised if the market gives O'Neil, Lindsay, Greenspan, Bush a vote of no confidence - This is not time (2 1/2 trillions of Stock Market wealth has evaporated in the last few weeks - bondholders such as pension plans, insurance companies are being decimated) for O'Neil to show how naive he is

Got gold?

sectorGSEs Creating Inflation?#8018107/09/02; 15:25:28

It seems so...

"They [FNM/FRE] have to hyper inflate, and with freddie and fannie making it easier for loans, I'd say they're going to try to get all who can into housing before the inflation."

Sir Pizz, with the utmost respect…the "Money" used by FNM and FRE …IS… the inflation. It's reflected in M3.

Just as John Law attempted to monetize real estate in France's fiat disaster, so too has Alan Greenspan. These GSEs have received and created mortgages for over $1.2 Trillion since 1997. By channeling inflated money directionally into mortgages the idiots at the Fed imagine that they have corralled it, prevented it from leaking out into the general markets where it would lead to higher prices.

The key that Doug Nolan keeps pounding at is this debt is a non-producing obligation. The income necessary to service this debt has withered away as America's true GDP has disappeared behind a tapestry of Fed economist's hedonic chicanery. Look at steel, refinery capicity, oil production. The fraction of personal income needed to pay the freight on these mortgages is at an all-time high even with Moms working.

The end-game in real estate has begun. Foreclosures in Denver are the lead tendril of flame in the lead wave of fire that will consume the housing market. The mania in housing, like the gold manipulation scheme, is unsustainable because their required economic foundation has already crumbled to dust.

But the Fed is surrounded with lots of fire on all sides. Gold supply needed to run their increasingly visible scam, Balance of trade payments deficit, angry US industry at the moronic [To them] "Strong Dollar" policy, breath-taking inflation in health care, the Japanese all-around financial debacle, World currency instability boiling uo from Latin America AND a competing euro that seems to be getting a life.

The high-density entertainment value to all this Fed squirming is priceless.
It's all the more enjoyable with your piggy filled with many "Coins of the Realm".

Pizz@Misetich #8018207/09/02; 15:34:57

"probably 25% of the S&P 500'?

That is probably closer to the percentage that are legally agressive.

For 20 years the name of the game has been "increase shareholders' value" and you do that by capital gains, not dividends. You can't get a CFO's job in public corporations without the ability to affect the bottom line.

The signs have been with us for years. When was the last time a merger came about without a "restructuring charge". During the up market, companies pumped their books to get bought out at lofty premiums, and the restructuring charges were a nice way of writing off the BS (after the sale).

Remember a company not so long ago that had a 6 billion dollar inventory writeoff one quarter? As if it happened in a 3 month period - right.

Over the next six months or so, it's going to be interesting to watch the gross margins of companies drop rather presipitously. The companies that have been just aggressive will use the slowing (crashing?) economy to write off the book pumping as a cost of sales. The more aggressive will do some conslidations, etc. that will require rather substantial "restructuring charges", and the really guilty who have the billions of worthless goodwill, will try to inflate that even more with the rest of their pumped up balance sheets.

The PTB will let any of them that still have the ability to survive get away with it. They'll prosecute the ones that they deem both "we can live without this company" and "they won't survive anyway". It's the way the game is played, and don't expect it to change much.

And finally, we have to have a good reason for all the econoanalysts to be able to retract their lofty second have earnings projections. "Well, we didn't realize the books were cooked that much!!!".


misetichJapanese companies lose trillions of yen #8018307/09/02; 15:44:43



TOKYO - Japanese listed firms, excluding financial concerns, posted combined group net losses of 616.86 billion ($10.63 billion) last financial year, largely due to restructuring costs. The previous year they made a 6.67 trillion profit.

The combined net loss totalled a stunning 3 trillion including those reported by financial concerns - banks, brokerages and others - in the year ended in March, according to the survey of 1507 listed companies by the Tokyo Stock Exchange.

Banks alone, in the middle of a battle to eliminate massive bad loans, scored a combined group net loss of 2.36 trillion.

One hundred and seventy electronics manufacturers lost 2.27 trillion, after profits of 1.5 trillion the previous year.

No earning recovery in Japan - It is no wonder Japanese gold buying - reportedly 45 tons in 1st quarter is rocketing

Got gold?

Pizz@Sector#8018407/09/02; 16:00:15

No argument, and I think we're both looking at the same issue but from different ends of the rope.

The government/fred/fran/ or whomever have to get the inflation started and they have, IMHO only two ways to do it. BUBBLE housing/real estate even more with even easier credit/subsidies which will draw a very big chunk of the hot cash (and keep it from sending gold to the moon too quick)and/or direct injection. Direct injection bypasses the banks, and they're not writing them off yet. The housing forclosures you see now are just the overextended casualties of 911, and don't represent the 90%+ of homeowners that still have the ability to trade up and keep pushing the market along with the 5% or so that have the cash. If you have an extra 20% equity in your home and a job, trust me, you can find a bank that will finance another piece of dirt. Gold/Silver just aren't on the radar screen YET, but a few quick turns on some prime real estate is well within the boomers mentality. (I know some who are doing it with what's left of their stock protfolios.)


R Powellmisetich#8018507/09/02; 16:01:23

There was a crash in stock prices in 1907. O'Neill, while stating his views on technical analysis, didn't happen to mention testing those lows did he? How about some of the lows from the 1970s or 1980s? It's amazing what can be assumed by increasing or decreasing the time of cycles or by changing the scales on charts and graphs.
It's reassuring to know that Mr. O'Neill has this all figured out. I've been waiting for someone in authority to clarify it for me. Thanks
Buy the dips!

sectorAsians [Ex Japan] in Control #8018607/09/02; 16:19:04

07/08 22:29
An American Crisis That Dwarfs Asia's? Hmmm: William Pesek Jr.
By William Pesek Jr.

Jakarta, July 9 (Bloomberg) -- Of all the headlines leaping out from the Jakarta Post last week, one was particularly striking: ``Asian Stocks Favored as Investors Flee U.S.''

The headline's timing was ironic. It ran two days after the fifth anniversary of the start of the Asian financial crisis. And it underscored the reversal of fortune between the world's largest economy and Asian ones knocked on their backs in 1997. These days, it's the U.S. that seems to be falling over.

The Asians can undercut their Western competitors any day they choose. All they need to do is buy the COMEX dry and channel their $USD long-term Treasury assets into gold. Upon doing this, they own the world.


Sir Pizz: Right-O on the coming inflation to "Support" the dollar since the Fed can't raise interest rates due to the minefield of interest rate derivatives. They have with the best on intentions constructed a complex paper house that is now on fire.

I'm particularly enchanted with the coming derivatives neutron bomb. All the thirty-something, inside the beltway, econo-rocket science PhDs will end up flipping hamburgers under tents.

Fire burning on all sides for the Fed. Even Larry Lindsay is in the fray with tidbits of his "Wisdom"..."Only a few CEOs violated the law" ...give 'em a break. And how 'bout that O'Neill fella? Doing his A-1, Don Knotts "Nothing Wrong HERE"... "Only a stock market pull-back" imitation.

These bozos will be crushed by gold.

misetichSchroeder Says US Corporate Scandals 'Iceberg Tip'#8018707/09/02; 16:33:53


July 9
— By Steven Silber

LUDWIGSHAFEN, Germany (Reuters) - German Chancellor Gerhard Schroeder blamed U.S. corporate culture for recent accounting scandals and lauded Europe's model on Tuesday as President Bush launched new penalties for such abuses.

Faced with a raft of accounting abuses, including at energy firm Enron and telecoms giant WorldCom, Bush unveiled a number of proposals on Tuesday aimed at fighting fraud and rebuilding confidence in corporate America's finances.

A senior European Union official also blasted U.S. corporate practice saying American accounting rules had been used to raise share prices rather than reflect fair company values.

"Now it has been revealed that egotism practiced at the top under the catchphrase 'shareholder value' is worth less in macroeconomic terms, but also as far as the companies themselves are concerned, than a system based on a fair balance between the interests of workers and employers," he said.

Schroeder, who has often rejected calls to adopt what he calls U.S. "hire and fire" practices to help create more jobs in Germany, said the scandals at Enron and WorldCom showed that the American economic model should not always be emulated in Europe.

"That is presumably just the tip of the iceberg and it has to do with a corporate culture which is different from here. There the individual employee is not valued and shareholder value is everything," he said.

"Egoism at the top does not suffice to have lasting economic success," he said. "It must perhaps lie in the structure and not just individual lapses."


Asked to respond to Bush's speech to Wall Street leaders, European Union Commission spokesman for internal markets Jonathan Todd said the EU's executive body had been active on the corporate governance front for many years.

"Ever since the 1970s, it has been a requirement under EU law to ensure that accounts give a fair view of what is the true value of a company," he said.

"One has the impression that accounting rules in the U.S. have been used as a tool to push up share prices rather than to reflect the fair value of a company."

Todd said an EU action plan on financial services reform was geared to boosting investors confidence by concrete means such as the planned introduction of international accounting standards and rules on independent auditors.

In France, Michel Prada, head of the COB stock market watchdog, said he doubted there were similar cases of financial fraud in France.

He told France 2 television he could not say that French firms had been under more pressure in recent years from shareholders to produce strong results.

"That's not the impression I have," he said. "I think we have to be very careful not to compare an American situation in which some companies had cases of real fraud with the situation on the French markets.

"We have good reasons to think that the transparency and pertinence of information provided by French companies are well controlled. So I would like to warn against the temptation to think that what happens four or five thousand kilometers from here would be happening in France."

Prada said the COB conducts about 90 investigations of company finances per year, with about 10 to 15 resulting in charges against the firms in question.

"This is not more than we used to have," he said.


"That is presumably just the tip of the iceberg and it has to do with a corporate culture which is different from here. There the individual employee is not valued and shareholder value is everything," he said.

Interesting comments from Chancellor Gerhard Schroeder- Did they forsee this when they implemented the 1999 Gold Washington agreement?

Salvos have been fired !

Got gold?

BoilermakerHousing Sector Bubble#8018807/09/02; 16:44:54

I have always thought that the mortgage interest deduction for income taxe purposes was eventually going to create a massive imbalance between productive and non productive investment in the US. It has come to pass. Americans live in the most colossal homes in the world. They use more energy to keep them warm/cool than anywhere else. Many service industries are devoted to their care and feeding. This is sapping the capital and energy from the productive sector.

A big house and mortgage is viewed as a sensible investment from a tax and capital gains standpoint. Noone is concerned that a $1,000,000 house only provides the same comfort and shelter as a $100,000 home. Prestige is what you get for the $900,000 difference along with a taxpayer subsidy.

The housing and related sectors will be devastated by the coming depression.

Disclaimer; I live in a barn built in 1901. No mortgage.

misetichGoldman Says Fed Will Wait Until 2003 to Raise Rates#8018907/09/02; 16:44:56


A slowing in consumer spending and stock market declines have ``neutralized'' the Fed's efforts to jumpstart the economy through rate reductions last year, prompting policy makers to leave the benchmark rate at a 40-year low of 1.75 percent for longer, the economists said. They lowered their economic growth forecasts for the first two quarters of next year to 2.8 percent and 3 percent.

``People are a little too optimistic about the prospects of a recovery in the U.S.,'' said William Dudley, chief U.S. economist. ``It will take a while for the stock market to recover.''

William Dudley has been right on the money in the last couple of years - he also says US $ could crash 30-40% -
The Feds will do what they do best - pump more fiat ad nauseum -
Where is the "hot" money going to go in a climate of negative interest rate returns? Stocks? Bonds?

Got gold?

misetichPension losses will hurt many firms' bottom lines#8019007/09/02; 16:55:58


Already reeling from accounting suspicions and a prolonged stock-market decline, many of the nation's biggest and oldest companies are facing another threat to their stability.
Corporate pension funds at companies such as Safeco, Alaska Airlines, Airborne and Paccar are running short of money. Rather than earning income on their investments, these large pools of wealth that pay out benefits to retirees are suffering losses along with the stock market.
But the pain will begin to hit corporate bottom lines this year and next as hundreds of companies start recognizing the losses on their earnings reports — and start putting in more money to shore up underfunded plans.

The bad news could ripple into the stock market. Earnings are one of the key drivers of stock prices, and a recovery in earnings is supposed to help power the market higher. If the market decline deepens, some foresee a vicious cycle in which lower earnings push down stock prices, further depressing pension assets, which in turn reduce earnings.

"You have these humongous losses," says John Ehrhardt, a principal at Milliman USA, a Seattle-based actuarial firm. "Some of these are going to start showing up in second-quarter results."

Of the 14 biggest funds at Northwest companies examined by The Seattle Times, all but three are under-funded. The plans expected to earn nearly a billion dollars last year but lost a half-billion instead.

That $1.5 billion gap, up from $400 million in 2000, could rise to $3 billion this year and remain at that level in 2003, according to some experts. That's a sizable chunk of the $9.2 billion in pension obligations the companies are pledged to pay out under the plans.

The situation provides another stark illustration of the sharp and enduring reversal of the 1990s stock-market boom. Until a few years ago, pension funds outperformed expectations and the excess was used to pad corporate earnings. By one estimate, as much as 30 percent of earnings reported for Standard & Poor's 500 companies was due to pension-fund gains.

Pension funds at four Northwest companies — Albertson's, Alaska Airlines, Precision Castparts and Washington Mutual — swung to a loss last year after being in the black in 2000. The rest — Airborne, Safeco, Paccar, Boise Cascade, Louisiana-Pacific, Avista and Consolidated Freightways — are experiencing their second or third consecutive year of worsening decline.

Northwest companies aren't alone. The market's drop left a $90 billion hole in the pensions of the nation's 50 biggest companies last year, according to Milliman.

General Motors, home to the country's largest corporate pension fund, said last month it may pour in as much as $2 billion to help fill a $9 billion hole caused by stock losses. The cost could cut pretax-earnings by $1.37 a share this year.

A number of companies have avoided the problem by not having the traditional defined-benefit pension plans. Instead, they use so-called defined-contribution plans, where employee and employer contribute to an investment fund held by the employee. With these plans, such as the popular 401(k), employers avoid the risk of a down market. That risk shifts to the employee.

Underfunded pensions also pose a threat to corporate balance sheets, reducing the assets the companies can claim. In some cases, steep declines could trigger problems with creditors, whose lending agreements often stipulate minimum levels of capital and assets.

"That's the thing that's scaring the hell out of some (companies) right now," says Michael Hall, a consultant at Frank Russell in Tacoma. "Their balance sheet looks a whole lot less strong than it did before because the bottom line is $100 million in assets has just flown out the window."


ANOTHER shoe ready to drop - Earnings recession continues. Stock Market losses to accelerate- How will this end?

How can investors protect themselves?

Got gold?

misetichU.S. says to back Brazil through economic problems#8019107/09/02; 17:01:48


BRASILIA, Brazil, July 9 (Reuters) - The United States "would do whatever is necessary," to help Brazil out of economic troubles that are roiling the country, a senior U.S. official said on Tuesday amid talk the country is seeking IMF cash.

"I wouldn't want to speculate about what needs Brazil would have in the future," Otto Reich, U.S. assistant secretary of state for Western Hemisphere affairs, told reporters during a press conference at the U.S. embassy. "But we would do whatever is necessary to help Brazil, certainly out of a problem not of its own doing

No surprises there. US bailing out US banks with taxpayers(IMF) money - and then Brazilians will get stuck with ANOTHER autsterity program!!! Currency traders will have a field day!

Got gold?

R PowellTranporter#8019207/09/02; 17:02:35

I just came from next door by way of direct transport. Just clicked on the Usagold logo and here I am. Sort of like Star Trek. Cool!
misetichStandard & Poor's takes foreign firms out of S&P 500#8019307/09/02; 17:08:30


NEW YORK, July 9 (Reuters) - Standard & Poor's yanked the seven overseas firms from its benchmark S&P 500 index on Tuesday, replacing them with U.S. firms, saying the change would make the index a better guide to the performance of large-cap U.S. stocks.
The companies removed from the index are: Royal Dutch Petroleum (nyse: RD - news - people), Unilever (nyse: RD - news - people), Nortel Networks (nyse: RD - news - people), Alcan (nyse: RD - news - people), Barrick Gold (nyse: RD - news - people), Placer Dome (nyse: RD - news - people) and Inco (nyse: RD - news - people).


Barrick Gold? Placer Dome? Alcan ? Nortel? Inco? I guess the US got upset as Canada beat their butts in both Man's and Women's hockey this year-

Who got the gold?

PizzCan anyone guess who was missing in the markets today?#8019407/09/02; 17:11:02

Probably the first day that I can remember in a long while where I really felt that there was NO intervention.

Europe & US Markets all down about the same percentage. PM's in nice, unfettered up trends.

PM stocks in uptrends with orderly trading swings.

Makes me really start thinking that even the government may be starting to think that the jig is up with market manipulation. Course 1 day a trend do not make, but free markets?? What a novel idea, and glad you thought of it Mr. Bush (smile).

You other tape watchers out there, did you feel the same thing. Honestly, the PPT or whomever were not in the markets today.


USAGOLDLadies and Gentlemen. . .#8019507/09/02; 17:11:16

Faith is the glue that holds this system together. Faith has been subracted from Wall Street. If someone wanted to engineer a foolproof scheme to completely and inalterably undermine Faith in Wall Street, they could not have done a better job of it than Wall Street has done itself. The investment business has only itself to blame for this one, but unfortunately they are going to take a bunch of innocent people with them. The same one's who keep telling you that the "market is going to come back. . . ."
Chap XMartin Weiss Comments.....#8019607/09/02; 17:16:55

Corporate Forecast: Fraud with a Chance of Obstruction
-- July 9, 2002

More corporate scandals are about to rain down. And the
umbrella President Bush is offering is the size of a thimble!

That's why investors have continued to dump their stocks and
run for cover.

Investors know that Wall Street needs more than just a stern
"talking to" before it will change its ways and before confidence will be restored. Unfortunately, President Bush's proposal, even if it is implemented fully, won't reform Wall Street. And it certainly won't wash away all of the rampant fraud that exists right now.

Plus, corporate fraud aside, the underlying economy is still
running into a ditch ... stocks are still wildly overvalued ... and earnings are getting worse by the week, making stocks even more overvalued. That's not a forecast for recovery -- it's a forecast for disaster!

misetichSupport grows for expensing options#8019707/09/02; 17:21:24


So far, only two companies in the Standard & Poor's 500 index -- Boeing and Winn-Dixie -- expense options. AMB is not in the S&P 500, although its market value, at $2.5 billion, is bigger than Winn-Dixie's.

Most public companies disclose the estimated value of employee stock options granted each year in a footnote to financial statements but do not deduct an option expense. As a result, the earnings they report to shareholders are higher than they would be if they deducted options.

However, companies get a tax deduction when their employees exercise nonqualified stock options, the most popular kind.

This favorable accounting treatment, along with a booming stock market, made stock options the compensation of choice at many companies in the late 1990s. Some say the craze went too far and encouraged executives to do whatever it took to keep their stock prices up, even if it meant cooking the books.

A growing chorus of financial luminaries -- including Federal Reserve Chairman Alan Greenspan, billionaire Warren Buffett and former Securities and Exchange Commission Chairman Arthur Levitt -- would like to see mandatory expensing of stock options.


Bush said -

"With strict enforcement and higher ethical standards, we must usher in a new era of integrity in corporate America," he said.

Notice the absent luminaries "missing" such as Bush, O'Neil, Lindsay- Pitt

No wonder the market gave Bush a thumbs down!

Market is questioning US financial leadership

Got gold?

misetichRecovery underway but fragile, says bank- BIS#8019807/09/02; 17:36:14


However BIS warned that share prices still look high compared with historical levels, particularly in the US, and further falls could endanger economic recovery.

On a day when Wall Street was hit by a fresh accounting controversy, BIS president and chairman of the board of directors Nout Wellink cautioned that poor-quality financial information also threatened to put the skids under any recovery, while the full repercussions from the crisis in Argentina had still to be felt.


The report singled out Japan among the leading industrial nations as likely to be heading for economic decline, predicting a 1pc fall in real GDP this year.

"Further legacy charges against profits might still materialise given the long period during which profits appear to have been heavily managed and pension funds might have to be topped up," it said.


" given the long period during which profits appear to have been heavily managed and pension funds might have to be topped up," it said."

If earnings have been "heavily manged" (no doubt), and say they have been exaggerated by 15% add pension topping off and expense stock options- we are left with no earnings growth or negligible earnings growth - Current Stock Market P/E ratio to the moon! and so will GOLD!

Got gold?

LimitUpReport from the bottom of the food chain#8019907/09/02; 17:51:18

I ordered 300 silver Maples from my local dealer one month ago - still waiting for delivery. I have never had to wait more than a week in the past! Supply shortage?
A Canadian@ PIZZ#8020007/09/02; 17:53:02

Indeed, things seemed unmuddled for a change (kinda creepy!). However, I never view manipulation or regulation as anything unusual. Cheating is a regular component of all contests (human imperfection) and must always be discounted. Play well, outsmart the crooks, build fort Knox for your loved ones. If you believe that the universe is in perfect equilibrium (as I do) then take comfort in the knowledge that all cheats are eventually left to twist in the wind.

P.S. enjoy your posts immensely.

Jimbo@Gandalf the White#8020107/09/02; 18:08:53

It's been a wonderful two-day run, Sir Gandalf the White, and I'm feeling much better, thank you! Those of us who hold paper gold are still smarting from the effects of six weeks of cabal and government intervention. Best I can figure, my gold stocks are still down about 10 percent (but they've come up an equal amount recently). This is encouraging, of course, but I'm waiting for the other shoe to fall and the cabal to start intervening again tomorrow. Someone posted earlier that there was no intervention today. Anyone guess how long that will last?
A Canadian@ BLACK BLADE#8020207/09/02; 18:12:16

Hope you have been re-hydrating yourself and can provide me with my morning fix.(I'm an appreciative parasite). I seriously think you would be an excellent trade liason to the former soviet block since you can actually keep up.(My only attempt resulted in hospitalisation). Perhaps your pain and spikes gain are correlational? Please conduct appropriate research. :)
Carl H@Limit up: Maple Leafs#8020307/09/02; 18:23:30

We just ordered 1K Silver Maple Leafs and a couple ingots they arrived in good time, especially considering the holiday. The sales person commented that they were doing a brisk business in silver. And, as usual, he thought I was nuts for taking delivery.
BoxmanStage 1 alert in California#8020407/09/02; 18:38:22

Looks like it's going to be a long, hot, and expensive summer for Californias residents. Good thing they have the very best and brightest in their state government to steer them through all of this (some say I have a strange sense of humor, I prefer to think of it a having a wry sense of humor).

Black Blade, it looks like your work load just increased. Good to know that you will be up to the task. Thanks for all that you do for us.

Black BladeMarket Wrap Up – Puplava#8020507/09/02; 19:26:59


No, dear reader, the theme is still decidedly bullish. Most publications don't even acknowledge that a bear market exists, much less talk about bear market strategies. Try to find regular coverage of gold or silver stocks or gold mutual funds. Maybe a few say that having as little 5% in gold isn't such a bad idea. But do they really think having 5% in gold is going to protect a stock portfolio that is heavily-weighted towards stocks at 70%? Or if they recommend a heavy portion of a portfolio to be invested in bonds, they forget the last time we had a dollar crisis back in 1985-87 when we had rising interest rates that led to a stock market crash.

Black Blade: Jim Puplava's message today is quite appropriate. I have been saying for some time now to go "defensive". The market collapse isn't anywhere close to being over. I would see what could easily be another 50% clipping for today's unsuspecting investors. The problem is that stocks are grossly overvalued by any common and reasonable measure. I occasionally gag when I hear Pied Pipers on CNBC or CNNfn say something absurd such as "the economy has recovered", "stocks are a bargain right now", or "the sell-off is overdone". Who are these guys kidding? Obviously not as many these days, because trading volumes have been relatively light except when investors are "running for the exits" when yet another corporate or accounting scandal surfaces. It's going to get very ugly in the markets. I continue to tell people time and again, get "defensive" with your portfolios. Get Gold and Silver insurance, get outta debt, stash some cash and survival goods such as nonperishable food and basic necessities. I'm not saying to get into a bunker with loaded firearms surrounded by MRE's and sit atop a pile of Gold. I am just saying get prepared for rough financial times. What if you are out of work for …. oh say a year. Can you make it? What about 6 months? What about 3 months? I have been living off some of my supplies quite well and occasionally rotating with fresh supplies. Heck, I might even make some more home brew! My point is you will at the very least sleep a lot easier if you are prepared.

PH in LASale of US Gold Reserves?#8020607/09/02; 19:37:49

Is there anything to this?
USAGOLDYGM. . . .#8020707/09/02; 19:43:40

Thanks for noticing. Vronsky runs a first-class web site and discussion group. Proud to be associated with him and Gold Eagle -- like all of us here, at the vanguard of bringing the public into the gold market.

While I'm handing out the kudos, I want to thank Randy again for his extraordinary long term contribution to our web site (as our sitemaster) -- this site runs like a fine Swiss Watch due to his efforts. I'd also like to congratulate Black Blade (aka Jon Warner) for his Daily Reports -- read far and wide and providing much-needed balance in the gold reporting field.

And last but not least, I lift my bubbly glass to Sir Gandalf the White. . . .our Contest Master and Keeper of the Gate. It wouldn't be the same without you, my wizardrous friend.

If you want to know what's going on in the gold market, you eventually find your way to USAGOLD and Gold Eagle. . .stay awhile, you actually find yourself a considerably wiser investor and individual . . . . .

The one comment that keeps coming back to us in almost daily conversation at the office is a note of thanks for the helping hand in avoiding disaster over the past several months. . . . . .We are happy to extend that helping hand . . . . In the end thought, it's gold that's doing it for you. We just happen to broker it. . . . . .MK

Black BladeRe: Boxman, Canadian, and R. Powell#8020807/09/02; 19:45:11

Boxman – Hope you are enjoying retirement. I know that California has experienced a couple of alerts so far this summer. They just might squeak by. However, we still have 2 or 3 months of summer heat to get through. The NatGas situation for this coming winter is still up in the air. One question is how much of a difference in the data collection can be attributed to the switch over from the American Gas Association (AGA) to the Energy Information Agency (EIA). Still drilling activity has increased during the traditional drilling season and storage injection rates are moderate at best. We could see some possible energy crunches develop this winter and early spring.

Canadian – I somehow managed to face the Russian Bear last night and survive (not too badly gashed and bruised). Some of the conversation can be found in the Daily Gold Market Report (comments). I think I will try to avoid such adventures for the time being. I did manage to get to the gym and finish my routine without too much suffering. I guess "moderation" is in order for a while.

R. Powell – I noticed your post where you mentioned the crash of 1907. It should be noted that a complete disaster was narrowly averted when Wall Street bankers approached John Pierpont Morgan for help. He offered several million dollars and told them to go to the exchange and start buying shares. They did this and the market took notice. The market turned around and the eventual crash occurred a few years later. I guess that this could be referred to as the early version of the "President's Working Group on Financial Markets".


- Black Blade

Black BladeU.S. Economy: Consumer Debt Rose $9.5 Billion in May #8020907/09/02; 19:59:25


Washington, July 8 (Bloomberg) -- U.S. consumers borrowed more in May than at any time since November as their spending is helping fuel a rebounding economy. Borrowing through credit cards and other types of loans increased by $9.5 billion after an $8.6 billion rise in April, the Federal Reserve said. ``Consumer spending is alive and well,'' said Sung Won Sohn, chief economist at Wells Fargo & Co. in Minneapolis. ``The consumer's willingness to borrow is really the best confidence indicator of the economy.''

The Fed's consumer credit report doesn't include loans secured by real estate, such as mortgages and home equity lines of credit. Mortgage debt is more than three times the amount of credit card debt, auto loans and other personal borrowing. Home mortgage debt increased to $5.87 trillion at the end of the first quarter from $5.74 trillion at the end of the fourth.

Black Blade: Someone is really "putting a lot of lipstick on this pig". People are not borrowing because they are confident of a recovering economy and have a lot of confidence in the markets. It is more likely that they are tapped out and must borrow to finance their lifestyles or too just survive while the hope against hope that they will remain employed and are able to recoup massive horrific stock market losses. Personally I think that living off of credit cards is a dangerous proposition. It's amazing the "spin" these boys and girls on Wall Street can dream up.

Black BladeThis bear is betting on Nasdaq 500#8021007/09/02; 20:12:58


The Prudent Bear Fund is up a whopping 109% in the last 27 months. Its manager, David Tice, thinks he has plenty of room to run yet and sees the Nasdaq falling deeper into the hole. "Unfortunately, markets overshoot their fair value," says Tice, whose Dallas-based fund is approaching a five-year high. "We will correct excesses and imbalances, and we have an imbalance -- a maladjusted U.S. economy where there's too much debt in the system." He thinks the Nasdaq "could easily fall to 500," as the Dow Jones Industrial Average ($INDU) tumbles another 67% to below 3,000. Tice is betting the carnage will continue. The 18-year bull market that ended in 2000 was preceded by 17 years of bear market. "We have gone from record low participation by individual investors to a record high, and what happens in secular bear markets is you wash all of that out," he says. The process has, he thinks, about 15 years to go.

Black Blade: I am more inclined to agree with Tice, though the author of the article disagrees. There is a lot of room to fall back to historical valuations. That includes an S&P 500 of about 425. It looks ugly and toss in scandals that wear on investor confidence it could easily overshoot to the downside.

Pizz@ A Canadian#8021107/09/02; 20:22:47

Agree 100% with your manipulation & regulation comments. And yes, sooner or later they all twist in the wind.

Speeking of wind, those of us in the trenches who have played the dark gray line for most of our careers and are still survivors, (white being holy than Thou, and black being the Ken Lay's of the world) always have a very good sense of which way the wind is blowing, and an uncanny sense of knowing when it's changing. It's changing.

Be prepared for a decent run of basic accounting from corporations and government, and a little more straight shooting from the hedge funds, bullion banks, and especially the central banks. May sound strange, but nobody, and I repeat nobody, wants to be at or near the top of anything that blows up over the next couple years. The first few that go to jail will make the history books, and these guys are not your run of the mill street crooks - they do care if their asses are literally on the line.

And even though I tend to bash Bush a little bit, do not underestimate him or his administration. They have some of the best minds out there, all the resources our money can buy, and most of all, thanks to Bush Sr. and his experience, Jr. knows what doesn't work, and that improves his odds immensly.

Gold/Silver? Right now we have probably have the first fair shot at a fair market in over 20 years. I don't think the administration will want to take GATA in this environment. The best way to make GATA go away is to free gold, and my gut says today may have been the start of what we've been looking for.

Just my humble opinion, subject to change (as usual) as events unfold.


Black BladeElectricity Prices in California Soar for 3rd Day in Heat Wave#8021207/09/02; 20:38:06


Sacramento, California, July 9 (Bloomberg) -- Electricity prices in California rose for a third session, to an 11-month high, on expectations that sustained heat will boost demand for power to run air conditioners and agricultural water pumps. California's grid operator ordered power-plant owners in the state to defer maintenance so generators will continue running in this afternoon's heat, with demand approaching record levels. Temperatures in Sacramento will climb to 105 degrees Fahrenheit (41 Celsius) today and 107 tomorrow, the Weather Channel said.

Prices have more than doubled in the three trading sessions since July 3. Temperatures in the 100s today were expected to increase demand to 40,402 megawatts, the highest level so far this year, according to the California Independent System Operator, which controls most of the state's transmission network. Demand tomorrow is expected to peak at 40,287 megawatts. ``This is going to be a challenging week for us,'' said Lorie O'Donley, a spokeswoman for the grid operator. Edison International's Southern California Edison Co. and PG&E Corp.'s Pacific Gas & Electric Co. utility asked customers to raise thermostats and reduce lighting where possible to reduce demand during peak periods and help avert blackouts.

Black Blade: There may be some problems as there are many bottlenecks in the energy grid. A long heat wave or a sustained series of heat waves could mean trouble. The higher energy costs are not what the California economy needs right now – especially energy devouring Silicon Valley.

Black BladeDubai launches global gold centre#8021307/09/02; 20:49:15,3523,1071489-49567233-0,00.html


DUBAI - Dubai, the self-styled "city of gold", has launched a metal and commodities centre for trading gold, diamonds and key commodities with an initial goal of securing half of the global gold trade. The centre will offer physical trading facilities, storage, hallmarking, package and delivery facilities; a training centre and a gems lab; and "transparency, flexibility and a regulatory environment of international standard", said Kazim. "The physical location of Dubai is a huge asset in this project as the city is close to many of the key markets. We also have the opportunity to build on the established infrastructure that we have in place, particularly in the gold trade. "Investment is going to be significant," Kazim said, without giving details or a timetable for the centre's construction.

Black Blade: Interesting if it gains acceptance. There are in an excellent location for several markets.

YukonH.R4846, "The Silver Eagle Coin Continuation Act of 2002"...#8021407/09/02; 22:14:44

Greetings all. Well the first step in getting more silver for the U.S. Mint's Silver Eagle program (as well as providing the silver needed for the silver proof sets and commemorative programs) has been completed. June 25, 2002 the House of Representatives passed H.R. 4846 by a vote of 417-1.

This legislation primarily authorizes the Treasury Dept. to buy silver for the above named programs from sources other than the strategic stockpile which is rapidly nearing depletion.

So its on to the Senate Banking, Housing and Urban Affairs Committee. What shall become of it here? We shall see. But also, it will be very interesting to see the effects on the silver market as the U.S. Mint uses a hell-of-a-lotta silver! (Proof Silver Eagles are still on backorder direct from the Mint...I hope the Senate acts quickly lest the Treasury miss out on some easy profits).

Viva Liberty!


Kagamushalack of intervention today#8021507/09/02; 22:19:33

With respect to the several comments that there did not appear to be any intervention today, I agree. It seems to me that with all the new talk recently of a deflationary collapse (especially from PIMCO and credible others) it may be in the best interest of the Fed to let gold signal an inflationary bias to the 325 to 330 level and cap it there. They seem to think reality matters little and perception is all. What better way to turn on the inflation signal without the problems associated with showing it in the CPI with all the implications that has - Soc Sec etc. Just a thought!
The CoinGuyBush's New Era of Corporate Integrity Starts off with a Real Bang#8021607/09/02; 22:31:05

Comment: Excellent article on Dubai BB, Naz 500 sounds about right.

The CoinGuy

timbervisionAristotle, Belgian, miner49'er, and Sector#8021707/09/02; 22:37:33

Thank you all for your reply to my Tlaga question. Aristotle, your "Tlaga's monstrosity" reveals a lot. From Sector, "unreasonable cooperation among theives", Miner, "why on god's green earth would they subscribe to furthering the current price suppressing framework?" and Belgian, "this joint venture between dollar and euro-blocks is NOT going to last !?"

Your posts are all like oases in an media desert. I'll file Tlaga under "mirage."

Miner, you are more than right to re-direct me back to the Gold Trail. I first dug into it months ago but have known for some time that I must return to it for a careful and thorough study.

Thanks again to all of you for the time and effort you applied to my question. Your scholarship and desire to educate continues to impress.

Best regards,

Carl HSilver at 5.11?#8021807/09/02; 23:03:56

According to K, silver is at 5.11. Is this real or a K glitch?
Gandalf the WhiteSir Carl H's Question !#8021907/09/02; 23:32:01

Sorry, Sir Carl H, but I can not answer that Question with a proven fact, as all the other Quote Boards (like "thebulliondesk") are not yet past 12 Midnight NY time. BUT, looking at the chart, it appears to be another normal K Chart "FOULUP" !!! Note the axis skip.
BUT, the Hobbits are wishing that you are CORRECT !

Gandalf the WhiteThere is the ANSWER !#8022007/09/02; 23:38:03

Just updated at BD and PROVES that the K Chart is indeed INCORRECT AGAIN !! Tis as $5.04 though.

Gandalf the WhiteROFL !!!!#8022107/09/02; 23:41:46

There is your answer, Sir Carl H.
Check it out now !
And then don't waste your time there unless you like heart attacks !

tedwAccounting Scandals #8022207/09/02; 23:47:34

|The aggressive accounting (lying) is coming to the attention of everyone. I noticed President Bush has created a task force to solve the problem. More Bureaucracy. There are some things that Government just cant solve. I propose the following solution:

1)Ministers across America start telling their flocks:

"What profit a man if he gain the whole world and lose his soul"

2) And they start telling their congregations that if they abandon their principles for personal ambition and gain that they are going to HELL for cheating innocent people.

3) They stop telling their congregations that God loves them just the way they are, and start telling them that God cant stand their sight and stench and that they need to repent.

And thats just for starters.

YGMWorldCom 3 wks to decide Bankruptcy or not....#8022307/09/02; 23:48:34

WorldCom Considering Reorganization
Tue Jul 9, 7:14 PM ET
By JOHN PORRETTO, AP Business Writer

JACKSON, Miss. (AP) - WorldCom Inc. says it will know within three weeks whether it will pursue what would be the largest corporate bankruptcy filing in U.S. history.


AP Photo

The Clinton-based long-distance and data services company is on the verge of bankruptcy after disclosing it disguised $3.9 billion of expenses as capital expenditures in a bid to appear more profitable.

WorldCom executives clashed with former auditors Arthur Andersen LLP Monday during Congressional hearings over who's to blame for the improprieties, which prompted President Bush ( news - web sites) to propose tougher penalties for company officials who lie on financial statements.

As the WorldCom case unfolds, the company continues to negotiate with lenders for $5 billion in critical funding — as it was doing before news of the accounting scandal broke June 25.

The company said Tuesday it also was awaiting word from banks on interim financing that could avert a bankruptcy filing — at least for now.

Another option is a debt-for-equity swap with bondholders as part of a prepackaged Chapter 11 filing. A company spokeswoman said chief executive John Sidgmore has been contacted by certain bondholders, but no formal discussions have started.

"We're fighting for our life," Sidgmore testified Monday before a House panel investigating the debacle, which is under investigation by the Securities and Exchange Commission ( news - web sites) and the Justice Department ( news - web sites).

WorldCom has laid off 17,000 of its 80,000 workers, and Sidgmore has said additional layoffs are possible. The company, which has $30 billion in debt, also is looking to sell parts of the business to raise cash.

Telecom analyst Pat Comack of Guzman & Co. in Miami said WorldCom's next move — bankruptcy or not — places bondholders and lenders in a tenuous situation.

Comack said any new bank loans almost certainly would be secured with collateral, placing those lenders at the top of the creditor's list should a bankruptcy filing eventually occur.

On the other hand, he said, a debt-for-equity arrangement would give bondholders — who hold $26 billion in bonds — greater leverage and a better chance of recovering their investment.

Without debt, Comack said, a leaner WorldCom could emerge from bankruptcy and possibly survive on its own or become a takeover target.

With more than $100 billion in assets reported at the end of March, a WorldCom bankruptcy would be twice as large as Enron's slide into Chapter 11 last fall and four times as big as Global Crossing's in January.

The company's shares have plunged from more than $64 in June 1999 to 21 cents Monday.

BelgianLost and alone, wandering in the wilderness.....(Ari)#802247/10/02; 00:17:53

No Sir, we are NOT alone at all ! Have a look at the of juveniled Aden sisters.
Stare at that magnificent POG picture and its 8 years bottom to bottom cycles. What a beautifull, WAVING, flag pattern ! 1971 > 1980 stick (x 25) and enormous waving flag 1980 > 2001 ! What will happen with such a flag-pattern when fundamental "storm-winds" (gails), come thundering in ? The flag-pattern, you see today, has the shape of a triangle (pennon). It is a "deformed" pattern. It already should have been a rectangle flag-pattern (POG=800$ plus).
This is technical interpretation of a price-pattern, linked to fundamentals (20x depreciation adjustments).
But it is exactly this *anomaly* that will cause the reshaping of that 30 years old pattern, too perfect to be true. Now let your creative imagination and intuition, run free...and ask yourself how such a nice pattern should be altered/shaped, into another, recognizable, one ? What happens with a "flag" when gail-winds are tearing it from its mast and sweeping it up ? (the flag) goes much higher than the mast (x 25) it was pending on !

Gold into the thousands is NOT going to sink the world. Gold into the thousands is not going to provoke massive dishoarding (Don Stott has it wrong)!!! When POG rocketed to 850$ changed some hands, but is still there, where it originally found shelter, care and admiration. Rare and valuable tangibles, whatever their nature, remain scarce and increase proportionally in scarcity. And therefore, always keep rising in price to reflect their VALUE !
GOLD IS AN INVESTMENT ! A Rubens painting is an investment, also changing hands. Paper comes...and paper goes...all paper !

And will the above story, happen in our lifetime, dearest Ari ? Yes Sir, it definitely will ! Why Belgian ?
Because, flags...either fly away or grow too long and desintegrate around their mast (POG sub 200$).

Look at the fundamentals, behind the 30 year old Gold pattern...and you will see ! There is nothing more "factual" than a price PATTERN for interpreting how the hidden fundamentals will evolve. Ask yourself why the 253$ bottom has been created within this pattern and POG could not be maneuvered to sub 200$ as to destroy the visible pattern ? Thanks to the WA !
Do the same for POO and the 10$ (1999) low.

Back to the pleasures of Holidays. Regards to you Ari.

RobotGuyToo da moon!#802257/10/02; 00:47:30

Let's go Alice'.. I love those after hours spikes!!
RobotGuyWhere are ya B.B.??#802267/10/02; 00:49:11

Black Bird should be singing tonight!!(Blade)
RobotGuyTonight may not be the night,.. but the loonie shall fly!!#802277/10/02; 00:52:09

Cheers to my fellow Canucks, for the time is ripe!
Black BladeRe: RobotGuy#802287/10/02; 00:52:19

Hi there. I'm just catching up on some reading. I'm "locked and loaded". Well locked anyway. Cheers!

- Black Blade

RobotGuyLike you my friend,.. I sometimes suffer from the whole insomniac dilemna...#802297/10/02; 00:55:13

RobotGuySell your gold,.. fools!,.. For there are plenty wise who are ready to afford it.#802307/10/02; 01:00:35

Black BladeAsia Awash In Red and Europe Starts Off Ugly#802317/10/02; 01:20:18

The Nikkei 225 got hammered and the rest of the world's markets look rather sickly this morning. There is no positive news and with the threat of more terrorism and a new scandal ready to emerge at any minute, the markets look to be under a lot of pressure.

- Black Blade

RobotGuyI am Canadian!#802327/10/02; 01:24:34

My father said to me,.. and I quote "I don't trust that Bush Fellow!" unquote. I don't know what it is exactly, but he strikes me as a very guided simplistic leader,.. don't get me wrong, our Canadian leader (Cretien) is the executor of every American desire,.. but something still isn't right here in N.A.. From the understanding I've arrived at (thank-you to the members of this wondrous forum) we're in for a couple of real eye opening changes. I just hope my survival skills are as dependable as I might think. Look out crown land,.. here I come!


Black BladeMixed Indicators#802337/10/02; 01:28:23

The US market futures are slightly lower this morning. The USD is weakening again as the Japanese appear to have run out of ammo for now. The Japanese are trying a new strategy of "jaw-boning" the currency markets. So far not much reaction as the yen strengthened to where the dollar is now equal to 117.75 yen. Gold is standing firm and silver had spiked 9 cents higher at one point. Oil and NatGas have jumped higher (I haven't checked today's inventory data), however, OPEC is likely to announce increased production - that's another story altogether. The ME and Russian producers really don't have a lot of extra capacity, however, we are fortunate to have a deepening recession with declining demand so supply should be fairly adequate for now. It appears that trading on Wall Street could be "entertaining" again.

- Black Blade

Black BladeTHE GREAT CRASH OF 2002#802347/10/02; 01:47:17

Every cloud has a GOLD lining!


Clive Maund is an English technical analyst, holding a diploma from the Society of Technical Analysts, Cambridge and living in southern Bavaria, Germany where he trades US markets. There has been a lot of talk over the past year or two about "the bear market," how long it's run and the damage it's caused etc. Well, if you think what we've seen to date is a bear market, I've got news for you:- it's BEARly begun - you ain't seen nothin' yet!

I state now, without exaggeration, that I firmly believe that we are now about to witness, within the next few months, possibly within the next few weeks, the MOST DRAMATIC STOCK MARKET CRASH IN HISTORY, which will make the crash of '29 look like a Sunday School outing. THE WRITING IS ON THE WALL - it's as clear as that NASDAQ board in Times Square (and what a warning that was!). A clear break of the neckline of the Head-and-Shoulders formation on the S&P500 will probably, as often happens, be followed by a brief but deceptive pullback towards the neckline. After that a vertical all-out crash to the 560 area is to be expected. This will be a straight down vertical plunge - the market will go down like an elevator with its wire cut.

Black Blade: I have no allusions as to how is will occur or the precise time frame. I follow fundamental analysis and look at the big picture. However, the author (Clive Maund) presents pretty much the same scenario as I see it. So far the crash looks like a slow-mo "slow burn" with occasional upticks. Unless some Herculean effort by some unseen forces can "successfully" intervene, then it is going to get very ugly on Wall Street. "Interesting Times" lie ahead.

Black BladeGold hedging here to stay, says expert #802357/10/02; 02:09:18


A leading commodities risk-management expert has come out in defence of gold-price hedging, suggesting that it will continue to play a role in the gold market well into the future despite current negativity. Speaking in South Africa last week, ScotiaMocatta MD Steven Lowe, who is based in London, argued that companies with well-structured hedges could protect revenues while maintaining critical exposure to any gold-price upside, and that, in many cases, would outperform non-hedged producers.

Black Blade: Of course the non-hedgers have greatly outperformed the mega-hedgers by a huge margin. So my question is why in the world would anyone invest in a company that shorts its own product in a belief that their company is not viable otherwise. I would run like the blazes and seek out another investment. It simply makes no sense. As we know the Gold community is split into two camps where the Gold Bulls seek bullion and non-hedgers, whereas tepid Gold Bears seek out mega-hedgers that could suffer with a stronger Gold price. So far the non-hedgers have been the clear winners. It is interesting to note that Gold bullion has outperformed many of the mega-hedgers. As the non-hedgers front run the Gold price, it appears that physical Gold is set to charge hard and fast.

BelgianSP_500#802367/10/02; 03:50:38

Non American companies (Unilever, Royal Dutch...etc) removed from SP-500 !? Waww...Free Trade ? Goodbye dollar.
SteveHPlacer and Barrick too#802377/10/02; 04:09:58


The subject companies were also removed from S&P 500.

Goldman Sachs, UPS, and Ebay amongst a few others were put in their place.

Black BladeGlobal Platinum Shortage Sees Production Surge and Palladium Sidelined#802387/10/02; 04:24:21


HOUSTON--(BUSINESS WIRE)--July 10, 2002--Researched by (Industrial Information Resources Inc.; Houston). After peaking at $1094 an ounce and then falling to around $400 an ounce in the last 12 months, platinum seems now to be on an upward trend moving up to and near the $550 mark. Angloplat (Anglo American Platinum) (JSE) (Johannesburg), along with other producers, plans to boost production by 1.5 million ounces by 2006 bringing the company's total output to 3.5 million ounces by 2006. This is in response from surging demand from automakers.

Black Blade: Not much of a concern is Russia as they sold off their stockpiles of PGMs years ago in the frantic search for "hard currency" during the "Russian Bond Default" in 1998. Nearly all PGM supply out of Russia is current production from Norilsk Nickel. Announced deliveries often fail to materialize for months at a time. The last major crunch came when PGM prices skyrocketed. Now the deepening recession has reduced demand – at least until the zero financing for autos craze.

JCTexRobotGuy (7/10/02; 01:24:34MT - msg#: 80232)#802397/10/02; 06:06:23

Gosh, golly, geewiz! I guess we would be better off with AlGore or Hillary. <sarcasm off>
Black BladeDollar's rapid fall must be checked: Shiokawa#802407/10/02; 06:21:12


Finance Minister Masajuro Shiokawa said Tuesday that the rapid decline of the dollar must be checked before it reaches the 115 yen level. "Since there is a (pessimistic dollar) tendency, we must prevent the dollar from reaching that level by all means," Shiokawa told a regular news conference. Shiokawa made a similar remark on exchange rates last week, inviting speculation that the Japanese government would tolerate the dollar falling to the 115 yen level.

Economy, Trade and Industry Minister Takeo Hiranuma said the dollar weakening could hurt the export-led pickup in the Japanese economy. "As an export-oriented nation, it is not desirable that the strengthening of the yen advances too much," he said. Japan has intervened on behalf of the dollar seven times since late May in an effort to keep the nation's exports affordable abroad and keep exporters' profit margins from narrowing.

Black Blade: "By all means" – and what a stellar success the Japanese intervention has been so far. Hmmm… Japan's economy is toast.

Black BladeProperty market takes a beating #802417/10/02; 06:27:09

Corporate scandals mean problems for landlords


July 10 — The corporate scandals racking the business world are giving office landlords skyscraper-sized headaches.

Black Blade: A lot of rental space opening up.

Black BladeUS Bank Failure - Feds Seize Credit Cards#802427/10/02; 06:34:12

Banks to Close NextCard Accounts


Some of NexCard Inc.'s 800,000 customers may be surprised when they try to swipe their Visa cards Wednesday — federal regulators are closing all accounts as a result of the online credit card issuer's financial failure. The Federal Deposit Insurance Corp., the government agency that has been overseeing the business since regulators seized the accounts Feb. 7, waited until Tuesday to tell NextCard customers their credit cards would become worthless Wednesday. Regulators closed NextCard's banking subsidiary because of heavy loan losses.

Black Blade: Just the tip o’ the iceberg. FDIC steps in and freezes credit card accounts. A lot of ticked off people today. Yep fill up the gas tank and the card is no good. Hmmm…

Black BladeThe hidden costs of stock options#802437/10/02; 06:42:14


Cognos Inc. reported a profit of $19.4-million (U.S.) in fiscal 2002, based on U.S. accounting standards. The company's chief executive officer said Cognos had a "great" fourth quarter, and its earnings handily beat analysts' expectations. There was a catch, but one only sophisticated analysts and investors could appreciate. It was the cost of the technology company's employee stock options.

Black Blade: perhaps this will evolve into the next scandal on Wall Street when investors wake up.

The HoopleBB: Shiokawa sailing in a ship of fools#802447/10/02; 07:35:22

Shiokawa basically gives a full confession to fraud. How asinine to declare to his populace their worth, in yen, must decline. Little wonder they are taking a liking to the shiny stuff. All CB's that talk about strength or weakness of currencies are obfuscating the core issue: they are purveyors of dishonesty and thieves of wealth. No stretch
understanding why so much business becomes dishonest when pitted in a race against a depreciating asset. CB's should be on trial before a REAL American congress that represents the people. The evidence is overwhelming. Even "Law and Order" could slam dunk this one.

Tommy PJunk bond Mania!!!!!!!!!!!!!!!!#802457/10/02; 07:44:47{4E5B55FE-046B-4232-B871-F306D1467341}

Oops there she blows!
YGMCBS MarketWatch "Bulletin"..............Ouch! -30%, -26%, -34%#8024607/10/02; 08:24:26


ADC Telecommunications (ADCT: news, chart, profile) fell more than 7 percent after the company said that fiscal third quarter earnings and revenue would fall short of forecasts due to reductions in capital spending in the telecommunications industry. The broadband services provider added that it would attempt to lower its breakeven point to $250 million in quarterly sales from $300 million by consolidating facilities, reducing its workforce, increasing outsourcing, divesting low revenue product lines and cutting operating expenses.

Chiron (CHIR: news, chart, profile) dropped more than 2 percent after the company said Wednesday it granted a non-exclusive license to genetic data on the hepatitis C virus to Abbott Laboratories (ABT: news, chart, profile). Financial terms weren't disclosed. Abbott will use the information to develop potential treatments for hepatitis.

Gymboree (GYMB: news, chart, profile) slipped more than 4 percent after the company reaffirmed its outlook for earnings of 60 to 66 cents a share in fiscal 2002. The Burlingame, Calif., children's apparel and accessories retailer is also disclosing that same-store sales rose 3 percent in June. Total sales for the five weeks ended July 6 rose to $38.8 million from $37.3 million in the same period a year earlier. Gymboree projects same-store sales will increase in the positive mid-single digits in July.

Ligand Pharmaceuticals (LGND: news, chart, profile) plunged more than 30 percent after the company said that second quarter sales were negatively affected by $6 million to $8 million due to the decision by several wholesalers not to buy, or to buy reduced quantities of, its marketed products. Ligand added that delays in completion and data publication of ongoing clinical trials have led to lower-than-expected demand growth. Meanwhile, the company reiterated its full-year product sales forecast. Separately, Ligand said it has begun a full, national launch of Avinza, a treatment for chronic, moderate-to-severe pain.

Merck (MRK: news, chart, profile) sank more than 1 percent after the company pulled back its $1 billion spin-off of MedcoHealth Solutions for a third time late Tuesday, even as it defended its accounting for revenue in the pharmacy benefits subsidiary. Merck pointed to market conditions and attempted to diffuse heat for reporting some $12.4 billion in MedcoHealth revenue it never collected from co-payments on medicine from consumers to pharmacies.

Novadigm (NVDM: news, chart, profile) fell more than 26 percent after the software and content management company said preliminary results for its fiscal first quarter were "disappointing" government license revenue was below-plan due to delays in end-of-quarter closings and the adverse affects of a sluggish information technology spending environment of commercial license revenue. Meanwhile, license revenue in Europe witnessed "robust" growth. The company now expects to report revenue of $10.5 million to $11 million for the quarter ending June, and a pro forma net loss of 21 to 24 cents a share.

Qwest Communications International (Q: news, chart, profile) plummeted more than 34 percent after the U.S. Attorney's office in Denver began a criminal investigation of the telecom giant. The U.S. Attorney's office did not disclose the subject matter of the investigation, Qwest said. Qwest plans to fully cooperate with the probe.

The Wet Seal (WTSLA: news, chart, profile) tripped more than 7 percent after the company said net sales for the five-week period ending July 6 totaled $55.3 million, up 11 percent from the comparable period a year ago. Same-store sales for the period rose 5.6 percent.

Michael Baron is a reporter for based in New York.

YGMThe 40 Billion $ EMU Question..."They want Gold Higher"#8024707/10/02; 08:49:15

Don't think the EMU want Gold to drop in value, exactly the opposite it seems to me...YGM
RobotGuyJCTex - - - Is there anyone we can really trust?#8024807/10/02; 08:49:56

Actually, I think Hillary would have been a little better, but anyone who plays in those circles has a little sheister in 'em.

No offense intended Tex, I could be just as wrong as the next public office hater. I get this way from being a Canadian/Nature lover who has seen enough ignoring to last a thousand plus years. We all contribute to the destruction of this planet, but our leaders show us how.

I know you're a Bush lover, perhaps he is better than the other available options, but at an economic time like this do you think it's wise to be spending billions of dollars bombing Afghanistan churches?

Sorry,, back to gold :)


BoxmanLatest from Stehpen Roach#8024907/10/02; 08:58:35

I do believe that he is becoming more concerned. How does this guy keep his job?
YGMCIBC (Major Canadian Bank) reveals new Gold Stock Valuation Model#8025007/10/02; 08:59:05

RobotGuyBlack Blade (7/10/02; 01:47:17MT - msg#: 80234)#8025107/10/02; 09:00:59

"will make the crash of '29 look like a Sunday School outing"

Okay,.. that made me laugh!! :)

Cheers B.B.!

YGMThom Calandra see's Market Meltdown....#8025207/10/02; 09:44:11's+StockWatch&dist=nwtwatch&siteid=mktw

Gold gain points to market meltdown
Stock turmoil, dollar's slide highlight trend

By Thom Calandra,
Last Update: 10:38 AM ET July 10, 2002

SAN FRANCISCO (CBS.MW) -- When gold stocks rise sharply as a group on extremely heavy volume, it's almost always a sign of trouble ahead for the overall stock market.

Analysts say the 7.5 percent advance for U.S.-traded gold shares earlier this week -- the sector's largest increase since May 2000 -- points to renewed interest in the metal. It's also a sign investors accept the possibility that the stock market, and those few industries still holding onto gains this year, could come crashing down in coming days or weeks.

Gold's price, subdued until this week, is up almost 20 percent from 12 months ago. The spot price on Wednesday morning in New York was $315 an ounce, down $1.40 after a gain of almost $4 the previous day. Trading activity in top gold mining companies like Newmont Mining (NEM: news, chart, profile), Gold Fields Ltd. (GFI: news, chart, profile) and Barrick Gold (ABX: news, chart, profile) is regularly exceeding the stocks' three-month volume averages.

Analysts and newsletter writers say the metal and corresponding shares have been winners at a time when the stock market and the U.S. dollar are losers. What is new is the growing belief that the metal's gains, and those of gold mining companies, are telltale signs of an impending stock-market meltdown.

"What the market seems to be saying is that we've seen the end of Wall Street's oversold relief rally, and the resumption of gold's bull trend," said Bob Bishop, the longtime editor of Gold Mining Stock Report. "I'm guessing that (the July 5) lows in many gold stocks are likely to be the lows for some time, principally because of the amount of bad news that appears to be baked in the cake of the broader market and the U.S. dollar. That's good for gold, and bad for U.S. stocks and the dollar."

Gold shares Wednesday morning were down a little more than 2 percent, as measured by the XAU (XAU: news, chart, profile) index of major miners.

Barry Cooper, gold mining analyst at CIBC World Markets in Toronto, is convinced gold's gains will proceed lockstep with the fall of the dollar against other major currencies, such as the euro. The euro is flirting with the $1 level for the first time since January 2000.

The rise of gold mining shares "suggests the broader markets are not that healthy, but most people could have surmised that," says Cooper. "The equities have been leaders to bullion for the past while so I would expect we will see some further strength coming." One of Cooper's top gold stocks, Canada's Goldcorp. (GG: news, chart, profile), staged a 9 percent gain in a single day this week.

Joseph Duarte, a Dallas fund manager and author of "Successful Energy Sector Investing," says the mining companies' stellar stock-market gains this year bode poorly for other industries. "Gold is the refuge du jour, because there isn't any place else to run. Hospitals, HMOs, drugs, banks, oil -- everything that is 'safe' is getting clobbered," Duarte said Wednesday.

Homebuilder stocks were one of the few industries holding onto substantial gains this year. No more. Adds Duarte: "Look at the charts of the home builders, especially Toll Bros. (TOL: news, chart, profile) and Ryland Group (RYL: news, chart, profile). These stocks are clearly under heavy selling pressure, suggesting that even these invincible stocks are being abandoned. That may well be the sign that indeed capitulation is either here or just around the corner, as when people are truly getting scared."

Not everyone expects a surge for gold this summer, traditionally a weak season for jewelry sales. James Turk, founder of payment system and a longtime precious metals newsletter editor, sees a trading range of $300 to $320 an ounce for gold "in the next 2-3 months, then gold makes another attempt to hurdle $325 in September or October."

Mike Darda, an economist at Polyconomics Inc. in Parsippany, N.J., sees a "slight upward bias" for dollar-gold prices, "but not a bias that will cause the price to rise by leaps and bounds. We'd need an attack on Iraq for that -- and we still think that prospect remains remote." Polyconomics sees gold prices moved most by the supply and demand for currency and bank reserves, which are influenced in turn by tax policy expectations and geopolitical developments.

"For gold to fall hard, we would need to see a turn in U.S. fiscal policy (i.e. a cut in the capital-gains tax) or another big downshift in global political risk," Darda says.

John C. Doody, editor of Gold Stock Analyst, expects that gold mining shares will continue to reflect gains in the metal. The "rule of thumb is a 1 percent change in gold price yields a 3 percent change in stock price," says Doody. "This is because the price increase adds directly to the bottom line, or takes from it if the price falls. Witness the recent $15-an-ounce slide, or 5 percent, that saw most stocks off 15 percent to 20 percent."

Higher gold prices provide gold miners with more cash flow from their annual production. Investors in turn are more willing to pay a higher price for a miner's reserves, generally 10 times annual production for the best companies. "The price increase," he says, "makes all the reserves more profitable and may make marginal ounces profitable now, which weren't economic at a lower price."

Thom Calandra's StockWatch appears each trading day.

Gandalf the WhiteSPOT !!! --- DID you hear the NY Noon Bell ? --- TIME to ----#8025307/10/02; 10:18:24


sectorDollar's rapid fall must be checked: Shiokawa#8025407/10/02; 10:20:21

Finance Minister Masajuro Shiokawa said Tuesday that the rapid decline of the dollar must be checked before it reaches the 115 yen level.

"Since there is a (pessimistic dollar) tendency, we must prevent the dollar from reaching that level by all means," Shiokawa told a regular news conference.

Shiokawa made a similar remark on exchange rates last week, inviting speculation that the Japanese government would tolerate the dollar falling to the 115 yen level.

While saying that there are various ways to interpret his remark, Shiokawa disavowed the speculation.

"I meant that, if (the dollar) falls rapidly, it would be troublesome. I did not mean to approve" of the dollar reaching that level, Shiokawa said.

He told a Diet committee later in the day that Japanese monetary authorities are following the pace of the yen's appreciation against the dollar, and repeated that they remain prepared to intervene in the markets if necessary.

"The authorities are interested in the speed" of the dollar's drop, Shiokawa said. "If it is too rapid, we must think of ways to deal with that."
What he is saying is Japan's industry can't tolerate a rising yen/dollar scenario because their export bottom lines, life insurance balances and cash flow rates will be adversely effected.

Since Japan's entire financial structure is hanging by a thread, the falling dollar poses a real threat of an immediate accident.

Gandalf the WhiteLOOK OUT SPOT --- Paper Avalanche in late NY trading !!!!!!#8025507/10/02; 11:06:23

YGMMore Gold-Dumping Hyperbole from Banksters.....(stopped todays advance)#8025607/10/02; 11:22:31

Currency Europe
07/10 08:00
Welteke Says Bundesbank Wants the Option to Sell Gold Reserves
By Christian Baumgaertel

Frankfurt, July 10 (Bloomberg) -- Germany's Bundesbank, the world's second largest holder of gold, wants the option to sell some of its bullion after a central bank accord to limit sales expires, said the central bank's president, Ernst Welteke.

Germany would ``want to keep the option open to possibly be able to sell gold,'' Welteke told reporters at an event organized by the Frankfurt Club of International Business Journalists. ``It must be an amount that's worth bringing to the market.''

A 15-nation accord signed in 1999 limits central bank gold sales to 400 tons per year, and the agreement is due for review in 2004. Germany lags only the U.S. in gold holdings and has 3,500 tons, equal to about 16 months of the total supply from mines worldwide. The banker said the agreement should be renewed.

Welteke in an interview in February said the bank wants to swap some of its gold reserves into better-returning assets such as stocks and bonds. Its gold reserves don't ``yield any profit,'' he said.

Gold prices in London rose as much as $1.10 to $317.35 an ounce. Gold has gained 14 percent so far this year.

***Sick of this never ending "Phoney" Banker, Gold Disinterest Bulls--t and sicker still of those who believe it......Keeps the boys in the Vault mighty busy moving the name tags around on the Bullion Dollies that never leave the premises...What a sham, so transparent it borders on ridiculous....YGM

Carl HReuters: US Treasury's Fisher to testify on mortgage agencies#8025707/10/02; 11:33:24

WASHINGTON, July 10 (Reuters) - U.S. Treasury Undersecretary for Domestic Finance Peter Fisher is scheduled to testify before Congress next week on administration policy regarding government-sponsored mortgage finance giants Fannie Mae (NYSE:FNM - News) and Freddie Mac (NYSE:FRE - News), the House Financial Services Committee announced on Wednesday.

Fisher's testimony, scheduled for July 16, represents the first time the Bush administration has broadly discussed publicly its views of the mortgage finance firms, who operate under congressional charters even though they are shareholder-owned.

"Undersecretary Fisher is expected to testify on a number of wide-ranging issues including restructuring GSE regulation and improving disclosure and market discipline," Committee Chairman Michael Oxley, an Ohio Republican, said in a statement.

Fisher is the only witness at the hearing.

The director of the federal agency that oversees the soundness of the companies' finances is expected to testify later this month.

Fannie Mae and Freddie Mac, known as government-sponsored enterprises because Congress chartered them to provide a deep and even flow of funds to the mortgage markets, buy mortgages from lenders and repackage them as bonds or hold them in their own portfolios.

Some members of Congress, led by Louisiana Republican Rep. Richard Baker, believe the GSEs have grown large and dominant enough to pose risks to taxpayers. Baker, who asked Fisher to testify, wants tougher government oversight of the two companies.

Members of Congress have also recently introduced legislation that would make mandatory some of the financial reporting the two companies currently do on a voluntary basis.

CarlH: I am sure that Mr. Fisher will heap praise on these upstanding institutions. Got Gold?

Traveler345Silver on the move...#8025807/10/02; 12:18:53

Calling R. Powell, calling R Powell

Watching the silver chart over at - extremely fascinating. What in you're erudite opinion is going on?

The Traveler345

R PowellPOG versus XAU#8025907/10/02; 12:45:06

YGM posted (80252) today's offering from Thom Calandra in which Calandra quoted from various sources. One of these analysts was a John Doody of Gold Stock Analyst who gave his "rule of thumb" concerning the POG and stock prices. He believes that a 1% POG gain should cause a 3% increase in stock prices. I mention this as it reminded me of the final consensus of opinion at GE of a 1 to 4 ratio. Of course, we never know which is the leading indicator and which is due to catch up although both have recently retracted and have hopefully bottomed. Perhaps they'll start to move together. Upside targets appear to be $330 for POG and 90 for the XAU. I'll bet there are buy orders just above these levels!
Message for George W. He does lurk here doesn't he?
Both houses of Congress have passed the bill authorizing the buying of silver for the Philly Mint's ongoing coin production. Come on, Mr. Pres., sign the bill!

It's my opinion that the silver market does not know much of silver's fundamental situation (or I don't!) and is trading more on technical trend following programs than the continuing supply/demand deficit. Unless there is an unknown supply available (black silver?), the severity of the drawdown should be raising the price more. Perhaps it will take the publicity of Bush's signing this bill to wake up the market to the paucity of the remaining supply. Depending upon which source one reads, the US government held between 4.2 and 5.8 billion ounces just after the end of WW2. That's Billions but now they're gone.
YGM, thanks for posting Calandra's article.

sourdoughBarrick , Placer Dome sell off#8026007/10/02; 12:49:07

Who is getting screwed today?
How about the joe 6 packs who hold index mutual funds?
One wonders? An article suggests that Barrick has outwitted the bullion banks with their hedging policy.
They get kicked out of the index so funds have to divest freeing up millions of shares at lower prices.
Who would benefit? How about the very same bullion bank who buys up the Barrick stock. If Barrick does do okay on their hedging policy as suggested, the very same bullion banks can sure use the gains to help offset their hedge loses.
In fact they better buy control so they can control when Barrick delivers.
Hey , thatsa good business for you. Sorry AMERICAN JOE, BUT BUSINESS IS BUSINESS IN AMERICA

RobotGuyI think it's obvious that not everyone is dumping U.S. dollars#8026107/10/02; 12:56:00

Today's currency chart's compared to the DJIA are a little different than the previous months. It would appear to me that even though the U.S. industrial market is failing, the EURO isn't giving up all hope in N.A. Now mind you, I have a limited understanding of these things, all I do is compare charts and graphs. In the previous few months when the DOW went DOWn, the Euro would rise, but today it's just sitting on a fairly level playing field.

Input please,..anyone


JonPPT#8026207/10/02; 13:17:25

Mkt now down 230 points. If there is a PPT where are they? Dow is now 8850!
sectorAbout Mr. Weltke's Bundesbank "Gold Sale"#8026307/10/02; 13:18:18

Watch to see if it is issued as an "Auction"...

...If so, the "Sale" is nothing more than a "Delivery" of previously sold gold.

Just as the BOE "Auctions" were. It is a sign of great stress that the Bundesbank feels compelled to deliver gold it has already sold to customers who must be pressing for possession of the metal.

A falling euro/gold price is the main justification. However, there may be problems for Mr. Weltke if even a few other banks decide to stop their euro/gold losses and actually start buying the metal.

Honor among thieves is a losing bet. Someone will crack under pressure.

The VictorianGold is moving up on "access" trading#8026407/10/02; 13:20:40

Gold just took a spike up on "access." This is becoming a frequent occurance in the last couple months. I really do not understand why it did not happen often before as it seems like a relatively new phenomenon.
R PowellTraveler 345#8026507/10/02; 13:26:26

Another silver bug? Excellent!
My opinions are only that but I believe that after POS severly retested the 475-480 level, which it took so many tries and so long to final clear on the upside, we may see POS clear up a chart gap around 510 and then hopefully higher. I expect buy orders to be hit at that point, just above that gap. Upside? Who knows!

I rely much more on fundamentals than technical chart reading but without much info lately and in keeping with my belief that the supply/demand situation is being overlooked by the market, it's about all I can offer. For technical purposes, I've always prefered reading the entrails of a plump Rhode Island Red chicken, slaughtered under a new moon
but, for now, chart reading will have to do.
I was surprised recently during a POS downturn that both the commercial and large speculative players did not sell, only the small specs were sellers. Usually, the position changes of large specs and commercials (as defined by the COT) counterbalance each other. They are the Zing and Zang with small specs just a baby zingzang. I saw this as unusual and a good omen. It lead me to believe the 475-480 level would hold.
For fundamentals, the Central Fund of Canada is presently purchasing a reported 5 million ounces and, if Georgie signs the bill, silver will be purchased for coinage. Publicity from this (if we get some!) will spark prices. I still contend that industrial silver is purchased off exchanges, more than 75% of mine production is by-product and very few analysts have taken the time to really study the situation. These conditions allow the undervaluation of silver to continue. As Butler says, it's hard to get any attention as most people simply decide that the long term near flatlining price tells the whole story. They look at a long term chart and loose interest. This is similar to not bending over to pick up a hundred dollar bill off the sidewalk of a very busy street, reasoning that it can't really be $100 because, if it were, someone would have already picked it up, no?
What do you think??

BTW, I have bought Silver Eagles, brokered through our host, and they are beautiful. Michael's service is always excellent. And yes, I still think the price will reach unbelievable levels but patience is needed and, for paper trading purposes, careful positioning until the eruption.
Disclaimer, I hold both paper and physical silver. Lots of each and still want more. Greed!, that which every single baby is born with plenty of.
Thoughts or news!!

Carl HSilver for Mint Question#8026607/10/02; 13:33:11

Does Bush have to sign it? Looks to me like a veto would be meaningless because of the very wide margins in congress.
Carl HReuters: US Treasury's O'Neill furious at corporate 'crooks'#8026707/10/02; 13:49:06

O'neil Quote Snip:

"It never occurred to me that I needed a law or a regulation to do the right thing but it's apparently true that not everyone's wired that way, so we have to re-wire them," he said.

End Snip.

Carl H: I can't even find the words for this one. Got Gold?

Black BladeAn Ugly Picture#8026807/10/02; 14:08:24^dji

A very ugly picture of the stock markets (see link). It isn't likely to get much better, though there will be some minor "bounce back rallies", the overall trend is down.

BTW, the DGMR is updated.

- Black Blade

R PowellAccess market#8026907/10/02; 14:13:16

Perhaps as The Victorian mentioned, we'll be seeing more action in the electronic after normal Comex hours market. The shorts hammered POG in the last few minutes of the last day of trading on Comex in the recently ended 2nd quarter. Perhaps this was to help the monetary derivative positions that have to be marked-to-market for quarterly statements?
Then the shorts ambushed POG in the afterhour's market but maybe this just highlighted this thinly traded opportunity to the would be longs. ?? If you had really big bucks and wanted to initiate a large long position in metals, how would you do it without sparking the price higher before you had bought enough? I still think it is amazing that Buffett was able to buy 89 million ounces of silver in the summer and fall of 1997 before a lawsuit filed against Philbro brokerage forced him to disclose his position. Apparently, until Philbro asked him to explain himself, the market and all its analysts were totally unaware of his presence. 89 million ounces bought and no one knew he was there! Maybe a diehard silver enthusiast will win a huge lottery or someone of means will take an interest. "What do you mean, now that you've won the lottery, you're going to the New York Comex and not Disneyland!"
Do you think that those wishing for lower POG and POS are finding this more and more difficult to achieve and are now resorting to sneak attacks like huge last minute orders and electronic trading? Good omens?

sectorMore on Japan's Woes and the Liklyhood of US Treasury Repatriation#8027007/10/02; 14:18:46

There's Less Demand for Japanese Exports Combined with a rising Yen

A double whammy. A twofer. Very bad for industry.

Americans are not buying as many Lexus due to job loss, a general loss in confidence and worries about their bloated housing expenses.

The competitiveness of Japanese industry has come to depend upon a falling yen, now it must also deal with a loss in US and World auto demand.

This unbearable pressure will lead them to take steps they would never have considered in the past...selling US Treasuries...some $338 Billion worth.

I think today's $USD volatility was due in part to Japanese dollar dumping. The BOJ can't play along with Greenspan indefinitely.

Honor among thieves has limits.

Gold gains strength as the markets melt and authorities blow more hot air and currencies roil.

R PowellPost 9-11 lows#8027107/10/02; 14:26:10

Goodby post 9/11 market lows. Bye, bye.
Have we fallen below them on all indexes? How many years back (decades?) do the chartists have to look to find the next level of "support"?? Wow, can anyone see a bottom down there?

R Powellsector#8027207/10/02; 14:34:49

Your post brought this to mind. I believe Randy also has a copy of this here. If this happens, will there be any doubt as to whether deflation or inflation is the order of the day?

R PowellCarl H#8027307/10/02; 14:36:38

I've been waiting for someone to answer your question. I don't know. Can anyone help?

The HoopleR Powell#8027407/10/02; 14:47:25

Ironic it would be if the market found support at the lows of the 1991 Iraq invasion while making the second Iraq invasion. December- January seems possible. Same Prez last name, same month, same stock market numbers- now there's a groundhog day for you.
USAGOLD / Centennial Precious Metals, Inc.Put a Foundation Under Your Portfolio... Don't be fooled by inflatable paper substitutes#8027507/10/02; 14:52:08

gold sovereigns
Gold Today!

Because you never know what tomorrow will bring.

In this global marketplace, a single event on the far side of the world can suddenly and adversely affect the performance-credibility value of the commercial positions within your investment portfolio.

Gold has no employees, no overhead, and no financial statement to balance. It cannot go bankrupt. Gold is wealth itself. It is valued worldwide on the basis of its uniquely reliable form and function -- a steadfast financial commodity which is immune to the contagious collapses to which all financial paper is prone.

In the final analysis -- in times of stress -- paper is only paper.

How solid is your portfolio?

sector@RPowell The "D" Thingy or the "I" Thingy#8027607/10/02; 15:10:57

Deflation is now... Inflation is just around the corner..When "Big Float Phones Home"

Falling utilities are the tell-tale. Real estate Bubs popping. They both drop with rising interest rates.

Although the Fed Funds rate is steady, all the other "Spreads" are worsening.

Stagflation, then inflation of historic proportions.

It seems to be happening sooner rather than later.

The master of the Universe is losing a bit of traction these days.

Then there's the SECTREAS O'Neill dude doing his best Don Knotts..."We'll rewire the them [The BAD CEOs]". What should have happened was an announcement of arrests by John Ashcroft followed by incarceration at a "Base" in the Caribbean…but then the Enron boys would have ratted on their gold carry trade with the Fed.

alanka(No Subject)#8027707/10/02; 15:13:08

Gold Conspiracy
A group of Central, supranational and bullion banks have been manipulating the gold market since the mid-1990s, according the Bill Murphy, President of GATA (the Gold Anti-Trust Action Committee). GATA's accusations of illegal collusion to control the price and supply of gold also received a great deal of attention at the recent AMA meeting. The gold price is going up, not because of a weak dollar or low interest rate etc. but because the, " ... rigging of the gold market is becoming unglued," said Murphy, an impassioned speaker who's organisation ballots politicians, the press and gold producers on its theories relating to the suppression of the gold price.
Their prognosis centres around the fact that gold reserve figures and the amount of lending/sales has been artificially understated, particularly in the US. Moreover, this action is "un-constitutional, " say GATA.

GATA contend that between 14,000-15,000 tonnes of gold has been loaned/swapped out by Central Banks. How much of the 32,000 tonnes of Central Bank reserves is actually in the vaults (or returning to them)? This "Gold derivative neutron bomb," as Murphy describes, it is about to explode. "We believe the shorts are trapped," he told the conference, "The gold scandal will break and the funny games exposed," he said, with the result that, "the gold market will melt-up much like Enron melted-down." Gold will therefore "stun" people on the upside, with GATA suggesting a range of $800 - 1,000/oz – "Murphy's law will hit them," he told delegates.

Nonetheless, GATA have a lot of work to do assembling concrete evidence and convincing the market that they have a case, particularly given their failure to gain mainstream attention and the recent dismissal by the Boston Federal Court of Reg Howe's (another GATA protagonist) highly credible legal case, citing him as an "inappropriate plaintiff".

The GATA "army" continues its claims, mainly via the Internet, in pursuit of justice, (see:

Just over a year ago a gold price fall through $250/oz seemed imminent. Now for some, $350/oz seems a distinct possibility, although, on the surface, the rally could be conceived to be the result of frenzied buying by panic-stricken Japanese housewives.

Gold's price rise is leading some analysts to predict that the metal will have to fall, particularly as speculators hold large long positions on futures markets, making it increasingly vulnerable to a short-term correction. Large speculators have recently been trimming their net long exposure to gold futures as evidenced by the latest (May) Commitment of Traders Report from the CFTC.

Gold bulls have waited a long time to flex their muscles, and with sideways stock markets, political unrest and banking crises in the offing, are now increasingly calling the market significantly higher – even from these levels.

Calls for gold to reach the heady heights of the early 1980s seem tsunamic. Conversely, gold could go the way of silver as Central Bank sales escalate, gold is de-monetised, and if so, "... goes to $68/oz," – a favourite scenario cited my Smith. Either way, and perversely as ever, we should all hope that gold will stabilise in months to come.


Silver Markets Look Brighter?
"Silver fabrication should recover fairly strongly in 2002," according to The Silver Institute in a May 2002 release. This prognosis supposes that the world economy will "pick up steam," says the World Silver Survey 2002, although they do acknowledge that over the rest of the year, the health of the electronics industry in particular, will be an important factor2.

Fabrication demand fell 4.9% in 2001, principally due to the downturn in global GDP, the "anaemic" performance of the electronics industry and the bursting of the 'tech bubble', said the Survey . Electronics was the key factor behind the decline.

Supply and demand for silver last year was roughly in balance at 880 million oz – with fabrication demand totalling 863 million oz. Industrial use of silver is the single largest component of fabrication demand – with electrical and electronics applications accounting for its largest use – 133 million troy ounces in 2001 (with brazing alloys and solders – other important industrial uses – taking up 36 million oz).
Jewellery and silverware fabrication demand escalated a solid 2.2% in 2001 with Asian demand accounting for most gains, (India up 22% and Thailand 8%). Photographic demand fell 4%, although radiography demand remained fairly steady at 73 million oz.

Output of silver coins and medals was off 9% in 2001 – a result of lower demand in the US and Germany (two of the largest silver coin manufacturing countries) as against gains posted by Mexico, Spain and China.

Silver supply fell 6% last year, despite a small increase in mine production – such as Peru and Chile where silver is a by-product of base metals operations. Mexico again mined the most silver in 2001.

"As for 2002, the weak outlook for base metals prices generally, coupled with the implementation of numerous production cutbacks at zinc and copper operations, and reduced silver by-product from gold mines in 2001, suggests lower silver output from these sources in 2002," according to the survey.

For the third year in a row, the silver markets have had to withstand and absorb a high level of government stock sales. Official sector sales were up nearly 10% year-on-year, although lower than levels recorded in 1999. "Of note, for the first time in over a decade, there were virtually no net sales out of private sector stocks," said the report, suggesting that this was the first time in over 10 years that there was an increase in investment.

Silver prices averaged $4.38 per troy oz in 2001 against the average COMEX closing spot price of $4.51 in 2002 (to May 17th). Most commentators expect little upside for silver prices this year given the huge supply potential overhanging the market and the dominance of gold in the current move to 'pure exotica'. Silver fabrication could rise by up to 3.7% this year to 860 million oz while total supply could see a 1.0% decline to 790 million oz, according to the newly released CPM Group Silver Survey 2002.

YGMalanka (07/10/02; 15:13:08MT - msg#: 80277)#8027807/10/02; 15:40:55


I haven't seen your handle here before, so can you tell us what your post was all about? It seems like it was maybe lost in transit for mo's???...Left me scratchin my head anyways....Don't think the Gold and Silver scenario you paint seem quite right at present as per your post....The GATA news is old hat now also....YGM
Clint Halanka (msg#: 80277)#8027907/10/02; 15:42:09

alanka, is your name Smith?
sectorMoody's expects pressure on CDOs [Due to Wold Com]#8028007/10/02; 15:43:05

Collateralized Debt Obligations --An "Exotic" By Any Other Name...

Moody's expects pressure on CDOs
By Rebecca Bream
Published: July 10 2002 5:00 | Last Updated: July 10 2002 5:00

The booming collateralised debt obligation market may come under ratings pressure as a result of the fraud at WorldCom, according to the latest research by Moody's Investors Service.

Moody's report says WorldCom's $30bn of debt is widely held by CDOs, which are managed funds that invest in various debt markets and finance themselves through structured bond issues.

The leveraged nature of the funds means one large default can have a serious effect on returns, especially for synthetic CDOs that take positions through the credit derivatives market.

The exposure to the collapsed US telecoms company will be felt in both Europe and the US, and is likely to hit both investment-grade and junk CDOs.

WorldCom's fall down the credit ratings scale was so rapid that many high-grade funds were still holding the company's junk bonds when the extent of the fraud was revealed two weeks ago.

Moody's found a total of 58 synthetic CDOs that have large amounts of WorldCom exposure through credit derivatives, about $1bn, with 30 per cent of these contracts denominated in euros. In the case of one fund, WorldCom made up 4.6 per cent of its portfolio.

If the fund managers cannot salvage the situation, Moody's says many CDOs could be downgraded.

"Several investment-grade CDO deals are already very close to triggering early amortisation tests," says Gus Harris of Moody's structured finance group and author of the report.
Other World Coms lurke just out of sight and the "Tsunamic" effects from their failures and frauds will trigger lethal, domino-like waves throughout US finance.

YGMalanka (07/10/02; 15:13:08MT - msg#: 80277)#8028107/10/02; 15:51:51

Panic Stricken Japanese House wives??

Gold to $68.00?
Markets going sideways?
Perversely hope Gold should stabilize?
Gov't Siver stock sales?
Huge Silver supply overhang?

Partner I don't know what's up with your info meter, but last time I looked the Markets were dumping on everyone in them, Gold was in a Bull market, Silver's goin up, the Gov is buying AG, not selling! What market overhang? And frenzied panic stricken housewives got naught to do w/ anything I know of....YGM.

misetichUp Up and Away - US Current Account Deficit 4.3% in 1st Qtr 2002 - Seen climbing over 5%#8028207/10/02; 15:58:17


Would You Keep Investing In An Enterprise That Was Just Throwing Parties With Your Funds?
July 09, 2002

Paul Kasriel
Director of Economic Research

In the 1990s, the US was the recipient of a huge amount of the rest of the world's savings. As shown in the chart below, the US current account, a proxy for capital inflows, went from a surplus of almost 1% of GDP in early 1991 to a deficit of over 4% of GDP at the end of 2000. And what were we doing with the savings of the rest of the world? The other line in the chart shows that we were spending a good portion of the resources on loan to us on nonresidential fixed investment -- i.e., computers, servers, routers, drill presses, office buildings, and warehouses. Presumably, by investing the savings of the rest of the world, we would become more productive. If so, we would then be able to pay the interest and dividends owed to foreign investors and have enough output left over to still provide us with a rising standard of living. This is why global investors were so willing to place funds with us - because we appeared to be employing those funds in way which increased the probability that they could be paid back without undue hardship on Americans. Global investors didn't care about the hardship on Americans, per se. Rather they felt that if debt and equity servicing required hardship on Americans, we would try to repay global investors with "cheaper" US dollars.

The US current account as a percent of GDP peaked out at 4.4% in the fourth quarter of 2000. But starting in the fourth quarter of 2001, the current account deficit relative to GDP started moving up again. It had risen back to 4.3% by the first quarter of this year. So, global investors have stepped up again their placement of funds with us. But what are we using the savings of others for now? A form of partying, I would argue. Now, we are using the resources of the rest of the world to erect houses here, buy Lincoln Navigators, and build cruise missiles. Nonresidential fixed investment as a percent of GDP peaked out at 13.2% back in the second quarter of 2000. By the first quarter of this year, this percentage had slipped to 11.1%. So, we are borrowing more resources from the rest of the world, but not employing these resources in ways that are likely to boost our productivity in the coming years. Do you think that global investors will want to keep throwing good money after bad? Judging by our weak stock market and weak dollar, the answer is "no."


The "productivity miracle" is over. US $ is in trouble. Foreign investors are taking it on the chin - falling investment values and foreign exchange losses

Got gold?

YGMsector....#8028307/10/02; 16:03:30


"Tsunamic" effects from their failures and frauds will trigger lethal, domino-like waves throughout US finance.....

*so ineffect future Bond issues are going to be tougher to market and highly scrutinized I presume??? I obviously know nothing of the Bond Market but it seems to me this area will be hardest hit by these cascading failures and create further dominoe effects??....YGM

misetichUS wants INFLATION not Deflation#8028407/10/02; 16:05:38


But, because we are the biggest net-debtor nation in the world, deflation could beget more deflation as it would make it more difficult for us to service our debt. So, as net debtors, we Americans want inflation, not deflation. And Greenspan aims to please us now, just as he did when he created the credit to inflate the stock market.
I said that we are the world's largest net-debtor nation. Chart 2 shows that the rest of the world now owns almost 12% of our total outstanding debt - up from less than 2% thirty years ago. When foreign creditors - and domestic ones, too -- get wind of Greenspan's intent to lower US inflation-adjusted interest rates, which today are only 0.55% in terms of the fed funds rate -- by stepping up US inflation, how do you think they will react? My bet is that they will run to the currency that will give them a positive inflation-adjusted return on their short-term money. And if all central banks join in with the Fed in pushing inflation-adjusted interest rates into negative territory, then there always is gold.


Greenspan stepping US inflation -

On behalf of gold investors everywhere Allan, for giving us the opportunity to acquire gold at these cheap prices in recent years - Thanks

Got gold?

CanuckWhat a thrashing#8028507/10/02; 16:10:23

Markets got murdered again.

Checked the non-hedgers, G, AGE, MNG, and PAA on the TSE. All had strong finishes in the final hour/half-hour, a couple closing on their highs.

This puppy may pop REAL soon.

NT bounced off 2 bucks (even) several times, (closed at 2.07 CDN) if it breaks that all hell will break loose here in Canuckland.

Time to SERIOUSLY consider the short term future, long-term is secure with the REAL McCOY!!!!!!!!

Get you the REAL McCOY.

misetichU.S. accounting rules seriously weak-ECB official #8028607/10/02; 16:12:02


Wednesday July 10, 11:41 AM EDT

By Lisa Jucca

BRUSSELS, July 10 (Reuters) - European regulators took aim at U.S. accountancy rules on Wednesday, saying the Enron scandal showed they were seriously flawed and that EU-backed standards were superior.

But a day after President George W. Bush declared war on corporate fraud, officials conceded that EU member states needed to make sure they were enforcing their rules properly.

The European Union has long promoted the superiority of International Accounting Standards (IAS), to be adopted across the EU in 2005, over the Generally Accepted Accounting Principles (GAAP), the standard accepted in the United States.

"The Enron case raises many issues. It is complacent to think that such issues are simply about a violation of the rules," European Central Bank board member Padoa-Schioppa told a European Parliament committee.

"The rules themselves have shown very serious weaknesses... Even when complying with the rules, things that should not happen are allowed to happen."

Bush's fight against corporate abuses is aimed at restoring confidence in stock markets after the accounting scandals emerged at energy trader Enron (ENRNQ) and telecoms giant WorldCom (WCOME).

In February, European Internal Market Commissioner Frits Bolkestein publicly slammed U.S. accounting rules by partly blaming the Enron scandal on their approach of having hundreds of detailed rules.


Its always good to see 'good friends' give wise advice when needed -

Got gold?

misetichCleveland Federal Reserve Bank president retiring #8028707/10/02; 16:18:23


CLEVELAND (AP) Jerry Jordan, president of the Federal Reserve Bank of Cleveland for the last 10 years, plans to retire in January. In the post, Jordan helped set the nation's monetary policy.

Jordan, 60, said he plans to spend more time with friends and family.


ANOTHER Fed "retires" to spend more time with friends - How many Fed retirees in the last year or so?

The Financial Titanic captain is being deserted!

Got gold?

misetichSeaching for US "economic recovery" GM, Ford Shares Fall on Cost Worries #8028807/10/02; 16:26:49§ion=news&news_id=bus-n10366280&date=20020710&alias=/alias/money/cm/nw


DETROIT (Reuters) - Shares of Ford Motor Co. (F) closed at a seven-year low on Wednesday, and General Motors Corp. (GM) shares also dropped after an analyst downgraded the automakers, saying they would be forced to follow DaimlerChrysler AG's (DCX) (DCXGn) offer of a longer powertrain warranty.

Banc of America analyst Ron Tadross and other Wall Street industry experts were also raising questions about how GM and Ford would cover growing liabilities for pensions and health-care costs.

Tadross and other analysts have also raised questions in the past few weeks about the billions of dollars in pension and health-care liabilities facing the Big Three, especially GM. All three rely on investments to fund retirement benefits, but analysts say weak stock markets have put automakers' assumptions of investment returns in doubt.


There goes that "pension" thing again - The markets have fallen for the last 3 years and analysts have put "investment returns in doubt".

On the run with no place to hide.

Got gold?

HoratioBarrick#8028907/10/02; 16:43:41

UPDATE 2-Barrick doubles gold estimate at Alto Chicama

(Recasts lead, adds company and analyst quotes, updates stock price. Figures in U.S. dollars unless noted)

By Scott Anderson

TORONTO, July 10 (Reuters) - Barrick Gold Corp. <ABX.TO> <ABX.N> doubled the estimated reserves at its Alto Chicama gold find on Wednesday, but some analysts said the revision might only be the beginning of even brighter forecasts for the property in north-central Peru.

The company, which first announced the find in April, now estimates the property could contain as much 7.3 million ounces of gold, twice the 3.5 million ounces it originally estimated.

"Obviously it's great news to see any company in this environment expanding reserves, and what appears to be low-cost ounces," said David Christensen, a director at CS First Boston, in Toronto.

"There's no surprise they doubled and there would be no surprise if this reserve continues to grow. It's awfully early in the development program to say that's the end."

Barrick also said it was increasing its 2002 exploration spending for Alto Chicama by $15 million to $35 million, the second major increase in the exploration budget this year.

That is more than one-third of the estimated $92 million Barrick has earmarked for exploration and development in 2002.

Company executives said the increase sends the message that Barrick, the world's second largest gold producer, will use its financial strength to increase its clout in a rapidly consolidating industry. "What we want to do is build a company that is firing on every cylinder... Now what we've shown is that we have got another cylinder that we can fire on and that's grassroots exploration," Randall Oliphant, president and chief executive told reporters.

With indications of significant amounts of gold at Alto Chicama, the company said it has begun a mine development plan for the rest of the year, including metallurgical testing, and a mine and process feasibility study, to be completed in 2003.

It will also start the process of gaining permits for the Lagunas Norte section of the property, where most of the intensive test drilling has taken place.

Barrick said it does not expect many hurdles in having the permits in place by next year.

The Alto Chicama discovery, which the company has dubbed "one of the most significant gold finds in the past decade," is about 175 km (105 miles) from Pierina, a low-cost producer with average annual production of 500,000 ounces of gold at total cash cost of $90 an ounce.

Barrick has been exploring the Alto Chicama property since early 2001, after it was the only bidder in a tender by Centromin, the Peruvian state mining company.

The only financial commitment Barrick had to make was to spend $6 million over three-years and prepare a feasibility study for mine development. It has already spent $3 million.

It must pay an additional $2 million and give Centromin a net smelter royalty of 2.5 percent over the life of the mine.

"In an industry where supply is expected to fall off in the next couple of years due to the reduced emphasis on exploration and lack of significant new projects, a grassroots discovery like this is significant, especially given the fact that Barrick has more than doubled the resource number in...a couple of months," said John Bridges, a mining analyst at J.P. Morgan.

Barrick stock slipped 85 Canadian cents to C$28.65 on a volume of 4.1 million shares on the Toronto Stock Exchange on Wednesday afternoon, but that was largely due to news it was one of five Canadian firms being dropped from the U.S. Standard and Poor's 500 index this month.

Fellow gold miner Placer Dome <PDG.TO>, also being dropped from the S&P 500, was down 68 Canadian cents at C$16.58.

Barrick stock has risen 11.7 percent so far this year, outperforming rival Placer which has slipped 4.7 percent in the same period.


misetichO'Neill Warns Senate on Accounting Oversight Board #8029007/10/02; 16:44:42


Treasury Secretary Paul H. O'Neill warned the Senate today against establishing a new, independent oversight board with power to enforce accounting standards, saying the entity would compete with existing regulators and allow scofflaws to slip through the cracks.

On corporate wrongdoers

"In their greed and their gluttony, these crooks sacrificed the retirement years of teachers, truck drivers, nurses and farmers to enrich themselves," he said, telling the business audience, "Face it, the '90s are over. Now's the time for sober virtues."



Tough talk from Mr. O'Neil

Is he related to this Paul O'Neil?

In April, O'Neill agreed to sell $100 million in Alcoa stock. Three months later, he still owned stock in his former company, had profited from its increase since the new Administration took over, and suddenly refused to reveal how much stock he had left.

O'Neill's seeming reluctance to divest, while Alcoa shares skyrocketed, didn't exactly assist an Administration seeking to distance itself from its predecessors in terms of candor.

"One of the sad truths of Washington is you can't take people at their word anymore on anything," said the executive director of the Center for Public Integrity, adding that the Treasury Secretary "made money by holding onto [the Alcoa shares] while the Administration's policies have driven up the price of his stock."


Yep - one and the same -

Got gold?

Paper Avalanchealanka#8029107/10/02; 16:59:11

Where are Jimbo and JJ tonight?
HoratioAgnico-Eagle#8029207/10/02; 17:10:30

Yesterday there was an order inbalance for about half an hour
the spread between bid and asked was $2.00,favor asked!They woulden't open the stock until the got the spread down.!
Don't sell a single share!They are snapped up as fast as offered.I'll bet if all of us offered shares at $3.00 above the market we could start a "RUN"on the price.Same holds true for most gold and Silver stocks.The order inbalance is on the favor
of "asked".We could start a "RUN" simply by raiseing the offered prices far above the markets...I have no doubts it would work !....On 5/31 I sold some Barrick at 22.25 and it was snapped up so fast I was very surprised.(I used the money to buy Apex Sil.)I won't be selling any metals except to switch for some balance in portfolio.

R Powellalanka#8029307/10/02; 17:22:27

Thanks for the silver information which I recognize as coming from GFMS's 2002 Silver Survey. May I suggest that sources of info get included so that all will know who said what and then include your response as such.
Black Blade is a master of this method, giving not only the source but a link to it, then a sample of what the link offers and then his own personal thoughts clearly marked as such.
This may also help deflect the negative responses of those who disagree with what you are quoting.
Concerning the silver numbers for the year 2001, you mentioned supply and demand being in balance at 880 million ounces. It also should be mentioned that total supply from primary mining, by-product supply and recycled sources fell approximately 89 million ounces short of demand. Thus the year 2001 was the 12th continuous year of a supply vs usage (demand) deficit. The shortfall had to be, as always, made up by a drawdown of existing stores. Total yearly numbers of supply versus demand rarely balance. The question is, after the tally, are there now more soybeans, cotton, silver or whatever commodity, listed as "carryover" or leftover to be added to next year's production to give next year's total supply OR is there less "carryover" for the future?
For 12 years in a row, the demand has exceeded production with the shortfall lowering the carryover to the point where the average monthly deficit of 10 million ounces will consume all leftover within the forseeable future. This 10 million per month is approximately the 12 year average while 2001's deficit was only about 7-8 million per month. Economic slowdown with increased Mexican production? Still, the deficit continues with no price rationing of the 300-500 million ounce estimate of remaining supply. My point, supply and demand were roughly in balance but ONLY after adding 89 million ounces of drawdown from the ever shrinking "carryover". These numbers are from memory from that 2002 Silver Survey.
Two questions
How much is really left, in weak hands?
How close to actually running out will silver come before serious price rationing ($25/ounce at least) begins?

YGMalanka....#8029407/10/02; 17:31:55

Not trying to scare you off..I 'did' mean the Welcome!

You just got me, and looks like others totally confused with your post...Take RPowell's good advice when posting so we can separate your thoughts from your copied info and do give a link in the optional box please...Now please join in here...If I seemed rude in 2nd post I apologize. We all needed some time to get used to this posting stuff...YGM.
goldfoolReal Estate Replacing Gold as Safe Haven#8029507/10/02; 17:38:17

Courtesy of Fannie Mae and Freddie Mac.
YGMHmmmmm!#8029607/10/02; 17:43:51

DT Letter....

Yep, words out. R Russell says today he bought a batch of Kruggerands. Says Gold is the only money with no debt attached...Tells us watch out the Mutual Funds are idle but the selling hasn't begun yet and when it does...Kaboom.

Maybe Richard lurks here...Sure be nice if he was posting his intelligent outlook and Market savvy......YGM.

Canuck@ misetich#8029707/10/02; 18:14:06

Love your coverage of the gory details, please continue.

Just wait until Greenspan announces his retirement!!

CanuckVice President being sued..............#8029807/10/02; 18:18:28

apparently over fraudulent accounting at Haliburton.

Can it get more grim?

CanuckS&P closes at 920..........#8029907/10/02; 18:22:25

breaches 911 intra-day low of 944.

The Titanic has struck.

(Forget about Nasdaq, last week's news)

goldfoolReal Estate Replacing Gold as a Safe Haven#8030007/10/02; 18:25:43

Here's the full report from the Milken Institute (a name you can trust) in pdf. It's kind of difficult to read though because it's full of holes.
R PowellYGM#8030107/10/02; 18:32:09


Your mention of Richard Russell's thoughts led me to think of how much that we've talked about here and elsewhere along with how much we've read of various predictions that have now happened. Also, what is now unfolding has been discussed, hashed over and rehashed here along with other good internet sites (like Puplava's, for example) but it's still amazing to watch it now occur.
So much financial history (manias, bubbles, post bubble economies, etc.), so many thoughts of people like Adam Hamilton etc. and the investment community's typical response to this bear market seems to be unfolding as if on schedule. If this continues according to script, it may get seriously frightening soon, certainly before year's end.
I think either I'm getting paronoid or It's time to double up efforts to follow Mr. Blade's advice with the squirreling away of food, money, howitzers, etc. As more and more transpires as predicted, I become more and more convinced.

R Powell Ponzi#8030207/10/02; 18:37:34

Remember Shifty's daily Ponzi number?
Today's Ponzi is 5079. I wonder how far back in time we have to go to find a lower number?

misetichUruguay Debt Rating Cut by Moody's on Neighbors' Woes#8030307/10/02; 18:47:01


Buenos Aires, July 10 (Bloomberg) -- Uruguay's credit rating was lowered by Moody's Investors Service for a second time this year on concern financial problems in neighboring Brazil and Argentina have reduced the country's ability to pay foreign debt.

``The foreign currency earning capacity of Uruguay has been weakened by the contracting local and regional economy, and instability of financial markets throughout much of South America,'' Moody's said in a statement.

Uruguay, which sends more than half its $2.3 billion exports to Brazil and Argentina and is on track for a fourth year of recession, has been the country most hurt by a fallout from Argentina's December debt default and January devaluation. The downgrade signals that Uruguay, which obtained a $3 billion loan last month led by the International Monetary Fund to slow a run on banks, may have trouble getting access to fresh loans as concerns grow that Brazil will be the next to default.

``Fiscal deterioration, if it occurs, may jeopardize the continuance of much-needed financial support from the international financial institutions,'' Moody's said.


Latin America is not an economic healthy place - What will make the situation improve? The "Rest of the World" except Europe is US consumer dependent. Economic recovery in the US is expected to be under 3% for the rest of the year - unless loss of confidence and corresponding consumer spending declines - a double dip recession cannot be dismissed for the US and US dependent countries

Got gold?

Got gold?

Black BladeReal estate replacing gold as safe haven-study#8030407/10/02; 19:07:41


WASHINGTON, July 10 (Reuters) - Real estate -- it's the new gold for wary U.S. investors seeking security in a bear stock market that won't quit, a study released on Wednesday says. "Much like gold in the 1970s, Americans now appear to be treating the purchase of residential real estate as the investment of choice in times of economic uncertainty," said a study by the Milken Institute, the California think tank funded by the foundation of former junk bond trader Michael Milken.

Gold was historically the investor's shield of choice against inflation and uncertainty, the study said. But the precious metal's status as a safe haven has been in decline since the 1970s, due to the rise of the importance of oil as a commodity and because central banks have been willing to manipulate the supply of gold, the study's authors wrote.

Black Blade: Aside from this report coming from a convicted felon, it does not address that we are in a real estate bubble. What are we to do? Rent from each other? I had discussed this before, and the report is partially right though. People are looking for hard assets as a safe haven and that is why real estate (as well as Gold) has done fairly well. Of course it depends on where in the country you are looking. In the intermountain west I see a lot of real estate for sale that has been on the market for several months. Could the bubble be ready to pop? Also, there are several reports of commercial property going begging for renters. Hmmm…

USAGOLDWelteke/Murphy. . .#8030507/10/02; 19:13:49

You know. . .I have to agree with Bill Murphy on this. Either Welteke is involved in some kind of political chicanery that not one of us can understand or interpret, or the guy's a complete moron. Myself. . .I think it's the latter. This guy has come out of the ozone ever since the first time I ran into his name. And the Germans are dumping on us about our accounting scandals??

Think again.

YGMRich P#8030607/10/02; 19:18:48

Long Ahead of the Curve....

..yes the posters and followers here and Gold-Eagle, Kitco the Ranch and all the other Pro Gold/Silver forums have been a long time ahead of the sheeple as we've always called the masses....I guess it's small consolation if we get down to needing all those Y2K type supplies....Like the man says prepare for the worst and hope for the best (I still will enjoy the perversion of watching all that airy nothing dissapear tho)...Down here at my much reduced level of $$$$ & PMs nowadays isn't so bad but even 'Miner' misery likes company...Wall St can use the flushing out and the Banks can use the Vacant Mansions to store all the Porches & Jags they will own....I got a little more Ag today. Like the US ones better tho. They still seem more valuable or real than the Canadian ones regardless of purity......YGM
Black BladeBear market one of most painful yet #8030707/10/02; 19:23:24

Many analysts say there's no way to predict when stocks will recover


The latest slide in stock prices has turned a painful bear market into one of historic proportions - the worst in more than 50 years by one measure. And many analysts say there is no way to predict confidently that the pain will end anytime soon. "It's bad by just about any kind of standard you use," said Hugh Johnson, chief investment officer of First Albany Cos. "Just based on chronology and severity, this is historic. This one is very long and very severe."

Black Blade: This isn't the small downward spike that bounces back – this is the real deal. I expect to see a lot of pain yet. The markets roared high during the go-go nineties when the speculative mania lured investors to invest in companies that did not have a prayer. Remember those companies that had no game plan and only existed in the faint hope that they would be acquired because they fit the "new paradigm" – were part of the "new economy". We sent over $6.7 Trillion of wealth to "money heaven" in this bear market (so far). That's money gone for ever – never to be seen again – gone to "money heaven". Amazingly the Pied Pipers like Abby Jo are trotted out to say how wonder everything is and how much better is will be. Excuse me! But didn't these very same people entirely miss this bear market purging of the markets? Hmmm…

Go defensive! Get outta debt as soon as possible (and stay outta debt), stash enough cash for several months expenses, get Gold and Silver portfolio insurance, and start a nonperishable food and basic goods storage program. At the very least you will sleep a lot easier.

YGMUSA Gold.......................#8030807/10/02; 19:27:31

Maybe both.....Chicanery and a Moron....

Spew the chicanery for the string pullers and a moron if he thinks it won't affect his future reputation....And not only Germany dumping on the USA, but the British as well...Short memory on what the BOE cost the people there!
Little do they know the Gold wars will affect them all!
No form of trade barriers or isolationism can protect the world today from a financial collapse, if one goes we all go right?.....YGM

Black BladeStocks Careen to 1997 Lows – And "Scandal Of The Day"#8030907/10/02; 19:32:51


NEW YORK (Reuters) - Major U.S. stock gauges slammed to lows unseen since 1997 on Wednesday after Qwest Communications International Inc. Q.N inflamed worries over corporate accounting and Standard & Poor's booted a handful of companies from its prestigious index. "There are no buyers and that's a proxy for a major lack of confidence in U.S. companies," said Gary Wedbush, head of trading at Wedbush Morgan Securities. Qwest lost almost one-third of its value after federal prosecutors launched an unspecified criminal probe into the No. 4 U.S. local phone company. The latest in a string of high-profile investigations into Corporate America dealt another stinging blow to investor confidence.

Black Blade: Qwest could qualify for our "Scandal of the Day". They admit that they are now officially under investigation. Though this was not unexpected.

Black BladeWorkers' 401(k)s Lost $1.1 Billion #8031007/10/02; 19:44:36


Employees of WorldCom Inc. who own shares in the telecommunications company in their retirement plans collectively have lost at least $1.1 billion during the past three years.

Former WorldCom employee Lisa Brown, 35, says she heeded the encouragement of former chief executive Bernard J. Ebbers and invested all of her retirement contributions in company stock. She said the value of her 401(k) account fell from $45,000 to $210. "I lost 10 years of investments, and so financially I am 10 years behind where I should have been," said Brown, who now works for a nonprofit agency near Wichita, Kan. "I might have to work to supplement my income after I retire."

Black Blade: Money is gone – "to money heaven".

Go defensive!

goldfoolWelteke - USA Gold/YGM#8031107/10/02; 19:46:48

Maybe Welteke realizes gold is going to be $1,000/OZ in two years (Near a top) and stocks will be near a bottom - a good time to buy. HAH!
Black BladeAsia Starts Off Ugly#8031207/10/02; 20:10:35

The "entertainment" should be market action in Asia and early Europe as markets struggle as "monkey see - monkey do" following the US "slo-mo" market crash. I expect to see continued intervention in the currency markets by the MOF and BOJ. Success has been elusive so far. Should be fun.

- Black Blade

sector@USAGold Welke as Bundesbank Moron...or more dangerous...#8031307/10/02; 20:33:06

...a bureacrat

As a good little bureaucrat, he simply mimics the wishes of his puppet-masters...the thirty-somethings, "New Guard" at the Bundesbank. It's the old guys there who oppose the sale of German gold and constantly undermine Welke. It was they who assembled the Washington Agreement cadre.

One can make a case for them giving Welke just enough rope so as to effect a self-hanging event.

Perhaps the most important item this week so far is the gold bullish turn of UBS Warburg and their savvy lead analyst, John Reade. I continue to place more than a modicum of weight on a single ambitious bank as the breaker of the gold cabal. UBS could be the one. Winning big is but a matter of choosing to move first.

Surely at some point, cabal members will realize through some form of trading-floor osmotic process, that more and more buyers have arrived to partake of the gold feast and that they will be doomed.

The smell of defeat is in the air...another run at $330 is all but assured. Will it hold? Time waits, and gold is prepares for it's vengeance.

Entertainment like this is priceless.

YGMIf Central Banks have no Interest in Gold "Then Why does the BIS" The Banker to THE Banks Value it's Assets in Gold Francs?#8031507/10/02; 21:08:27

From B.I.S. 72nd Annual Report issued July 8th /02 Excerpt:

The Bank reported an audited Balance Sheet totalling 87,714.4 million gold francs at 31 March 2002, and a net profit of 225.7 million gold francs after deduction of costs of administration (1 gold franc = 0.29032258... grams of fine gold, or US$ 1.94149..., converted at US$ 208 per ounce of fine gold) end Quote:

*complete News Release and links to Annual Report at above link........YGM

Next press release:
Basel Committee reaches agreement on New Capital Accord issues (10 Jul)

USAGOLDSector. . . .#8031607/10/02; 21:27:10

Sector. . .
You know something? That's a great post. . .Hope others read it and internalize its meaning. Nothing is etched in stone. All is in the process of becoming something else. . . .even with respect to our Mr. Welteke. . .

steadyhow the fed hides its gold movements out of the u.s.a.#8031707/10/02; 21:55:33

you see the basement vault of the NY Fed has special status, it is considered a foreign country. That is how they get away with gold leaving the vault and not having it show up on the export numbers. When it leaves the vault they file an import document and when it leaves the country they file an export document. That makes it a wash so it is as though no gold moved at all.
could this really be true can someone find out. im assuming it is.
got gold? give it a silver lining.
also that million ounces off the comex, could that be the balance of cefs silver delivery?

Black BladeCapital Report on CNBC#8031807/10/02; 23:02:51

Well, I just watched a show on CNBC called "Capital Report". The guests were Sec. of the Treasury Paul O'Neil and Comerce Sec. Donald Evans. O'Neill was ... well, O'Neill. However, when Tyler Matheson asked Sec. Evans how come there were no arrests over this series of scandals on Wall Street, Evans replied "Don't worry, we're just getting started". It sounds like a lot more scandals and corporate executives headed to criminal court in the coming months. He was also asked what can be done because the investor is essentially saying "I won't be fooled again". Evans said that we just have to have trust. Hmmm...

Looks like the markets are going to crash some more.

- Black Blade

YGMFed Res Gold Vaults.......(Tours)#8031907/10/02; 23:46:49

The Federal Reserve Bank of New York is located in the heart of the financial district in at 33 Liberty Street. Visitors will learn about the central banking functions that the Federal Reserve System performs and they will see the Bank's vault of international monetary gold on the bedrock of Manhattan Island, five stories below street level.
YGMsteady....#8032007/10/02; 23:53:08

Do you remember?

A discussion or inquiry some time back (2 yrs?)in GATA's early days about the NY Port Authority not having the exports of Fed Gold in their records? If I remember rightly they were supposed to be reported and were not?...BTW, the Port Auth main offices I believe were in the W Trade Towers...another small coincidence? Records gone maybe? Someone else might have further knowledge in this area.....YGM
steadyim just a hobbit .a burowing one at that #8032107/10/02; 23:58:10

ygm nope i missed that by about 6-8 months im just a lil ole hobbit who likes to burrow and find the truth. thats why i found gold and then this wonderful form.
got gold give it a silver lining .

YGMsteady.....found this on Google search of "NY Port Authority & Gold"#803227/11/02; 00:18:27


But it was on these floors that the entire accumulation of evidence and investigation briefs on two highly important cases were being stored:

the case against Mobil Oil and James Giffen on illegal oil swaps between Iran and Kazakhstan (at that time before a New York grand jury as described in great detail by Seymore Hersh in the July 9 New Yorker magazine);
and even more important, the evidence in the investigation of GOLD PRICE FIXING stemming from charges brought against Alan Greenspan, Morgan & Company, Goldman Sachs.
(see below [truth.htm] for full reconstruction of this crime -- that is now all but confirmed by this revelation of a bomb devastating the FBI floors of the North Tower before the tower collapsed.)

YGMWTC & 12 Tons of Gold.....#803237/11/02; 00:28:06

More WTC & GOLD Intrigue....

One last thing to keep track of: why have we heard nothing in the press except one Reuters/AP article regarding the 12 tons of gold in the basement of the WTC? Gold story here:

**This article has now been pulled...YGM

YGMEnough Surfin for one night...Last look in the Fed Vault...only 5%? OK !#803247/11/02; 00:42:35


After a short introduction we were seated in a room where we were told about the Fed'smain duties. Mainly the Fed controls the monetary policy in the US and is also responsible for the disposal of damaged notes. After this we watched a video on how the Fed receives money from the banks, checksthem for forgery and packs them so as they are ready to go back out to the banks. All this happens automaticly to ensure optimal security. We then walked on to the 9th floor and listened to a speach on how monetary policyworks. The Fed has three main monetary policy tools. These are open market operations, discount window lending and reserve requirements. The Fed stores gold bars for 60 different governments and international agencies whichadds up to 700,000 bars equivalent to 9,000 tons. 5% of the gold belongs to America. Each bar contains approximately 99.5% pure gold. There are two reasons for the 60 go-vernments to store their gold in the Federal Reserve Bank of New York. Firstly it is stored there free of charge and also it makes it easy to trade gold in between the countries. We were transported by lift down to an unknown floor nearly 80 feet under the ground, wherewe were able to see the gold.

We do thank you for a very interesting and most educational visit.

Black BladeGlobal Market Meltdown#8032507/11/02; 01:13:49

Asia is solid red (unless you invest in Sri Lanka) and Europe is starting off very UGLY! Looks like the hammer is coming down.

- Black Blade

UsulS&P 500 index buys American#8032607/11/02; 01:48:54

"The changes will decimate the representation of gold stocks in the S&P 500, reduce the representation of oil stocks and raise that of financial companies.

The changes will take out some of the index's better performers. So far this year, an index of the stocks coming out would have been up 3 percent, while an index of the stocks being added would have been down 6.2 percent..."

Upside-down logic... what is the most likely explanation?

(1) This will strengthen the SP500 performance going forward
(2) Down with global free trade, up with isolationism
(3) We know something is in the works that won't allow us to keep the non-US members.
(4) Any chance to put gold down
(5) Oil's getting cheaper because the dollar will soon get even stronger
(6) Financials will need all the help they can get (any connections here?)
(7) None of the above

Black BladeNo neat pattern can explain the fortunes of gold #8032707/11/02; 01:50:16


There have been six gold price cycles since the price of the precious metal hit an all time high of $850 per ounce in January 1980. That peak came after the US abandoned the gold standard in August 1971 - when the dollar was pegged at $35 an ounce - and mainly reflected mounting investors' concerns during the 1970s about inflation. Somewhat surprisingly, however, research undertaken by Straszheim Global Advisors, the Santa Monica, California-based investment advisory firm run by Donald Straszheim, Merrill Lynch's former chief economist, suggests there is no common denominator to subsequent gold price spikes.

The Straszheim research is significant because it suggests that it is almost impossible for investors to anticipate a gold price rise such as the recent rally, which has seen the price of gold rise by 28 per cent from a low of $255 in April last year to $327 early last month. "Gold prices have not followed normal business cycles, either here or abroad," says the report. "Sometimes gold's attraction is its 'safe haven' quality. At other times, it is an inflation hedge.

The investment advisory firm argues that the current gold price rise has been driven mainly by geopolitical concerns - particularly the threat of terrorism - the potential for significant wealth destruction in equity and real assets, heightened economic uncertainty and the growing distrust of corporate behaviour reflected in equity market prices. Essentially this gold cycle is a "safe haven" effect.

Black Blade: Sounds like a glowing review for staying invested in Gold through thick and thin. It is always good to have insurance.

misetichTough Talk on Corporate Ethics, but Where's the Regulatory Bite?#8032807/11/02; 05:01:56


But something more systemic than a few clever swindlers is staining America. It is hard to believe that Mr. Bush's economic advisers don't know that. The Enron deceptions alone involved some of the nation's most prestigious accountants, lawyers, Wall Street brokers and commercial bankers, along with some of Enron's own highly respected directors. About 1,000 corporations have had to restate earnings the last five years.

A good economist's first instinct would be to determine whether there are incentives built into the financial system that encourage deception and fraud. A president who wanted to make business trustworthy again and renew the nation's confidence would address these incentives directly.

NY Times (Registration Req'd)

Bush, O'Neil, Lindsay - have been slammed by the markets - for the attempted CONfidence jawboning. Most investors are still being ill advised and are "holding for the long run" - captives and prey to the Big Bad Bear -
The smarter investor is adding some insurance to their portfolio - GOLD

Got gold?

misetichNo Cheer in Japan over America's Woes - FEAR has taken over#8032907/11/02; 05:19:22

Tokyo is too busy sweating about what'll happen to it if U.S. corporate scandals keep weighing down the greenback
TERRORISM WILDCARD. It may well be that the great corporate crime wave of 2002 will prove short-lived. Sure, a tsunami of earnings restatements will likely occur in the months ahead as everyone catches on to the idea that the days of creative earnings management are over. Eventually, confidence will be restored, and the U.S. will recover its image as a global financial center governed by financial probity, the ultimate haven. Let's hope so.

Yet even under the most bullish scenario, the terrorism wildcard remains. A guy I know at the BOJ wondered over lunch what the world would be like if there were no havens, or at least if the U.S. could no longer play such a role. Instead of corporate scandals dragging down investor confidence, the fear is that America is heading into a turbulent period of civilian killings and bombings, something on the scale of September 11 or perhaps worse.

Japan is the world's biggest net creditor, meaning it has huge claims on the rest of the world, particularly the U.S. This includes a huge amount of dollar claims -- stocks, Treasury bonds, truck plants in Indiana, and resort complexes on Maui -- all sorts of stuff. If terrorists were able to regularly deliver multibillion-dollar shocks to American cities and infrastructure, the greenback would get pounded, and so would a lot of Japanese wealth.

INEXTRICABLY LINKED. During much of the 1990s, a robust U.S. economy, the importer of last resort, bailed out Japan and exporting economies all over Asia. But now the outlook is uncertain. America's monster current-account deficit and swelling budget deficit mean it's heavily reliant on foreign capital. A lot of things -- corporate scandals or terrorism -- could be the tipping point for a dollar crash.

That scenario would be a double blow for Japan. Its big institutional investors, such as life insurers with big U.S. bond portfolios, would endure huge losses, and the export sector now carrying the economy would also take a beating. Such are the financial and trade ties that bind the world's two biggest economies.


Fear of a US $ CRASH - must be making Japanese housewives nervous - Lineup for gold coins and bars are going to get longer in JAPAN as the domino effect rambles on

Got gold?

misetichDEFLATION #8033007/11/02; 05:41:43


by Bill Bonner

There is no greater genius than the man who bounces our own ideas right back at us.

That was our first thought upon reading a subscriber's letter to Richard Russell, on his website.

The subject was the fate of the dollar...and the economy. Like Barron's and now Forbes, the writer had come to the same conclusion we had: both are headed down.

We take it for granted that stocks are in a bear market.

What goes up, goes down. That stocks are on the downside of the cycle seems almost too obvious. Of course, it if were any more obvious, the yahoos and patsies would have seen it already and already forsaken stocks. They have not yet; so the bear market must continue.

But what of the rest of the story? Whither the dollar? What will happen as the Fed desperately tries to revive the economy and the stock market? Will inflation suddenly erupt, like a pimple on a 14-year-old...and spoil the picture?

Most economists will tell you that the economic system is controlled by mood changes at the Fed. When the Fed governors feel the need for a little more bustling about in the nation's shops and factories, they administer a little "coup de whiskey", as Fed chief Norman Strong once put it. When they are in the mood for calm, by contrast, they take away the whiskey bottle and the party soon dies down.

Since WWII, the Fed's mood swings do seem to correspond with the ups and downs in the economy. But sometimes things happen even if America's central bankers are not particularly in the mood for them.

"Despite a flood of money and credit creation, and despite widespread predictions of recovery, the markets refuse to cooperate," writes Dr. Kurt Richebacher in his July letter. "Why? In short, because we are not experiencing a cyclical recession, and therefore a cyclical recovery is not on the way. Instead, the U.S. economy is sick to the bone."

The sickness doesn't seem to yield to a shot or two of whiskey. "For the first time in the postwar period, monetary easing - even the most aggressive easing in the Fed's history - is proving a flop in kindling a stock market rebound," Richebacher explains.

But all this extra money in the system is bound to have some effect, right? Won't it show up as inflation - if not in equities, at least in consumer prices?

Ah...maybe not.

"China is exporting deflation at a very rapid rate," explains Mr. Russell's correspondent. Almost no matter what Americans or Germans can make - the Chinese can make it cheaper.

Plus, "Russia is now moving towards becoming the world's largest supplier of most industrial commodities (including oil) and they too will use their competitive advantage and sell their goods cheaper than anyone else," he continues.

But as we mentioned above, nothing ruins a good economy faster than too much easy money. Thanks to Alan Greenspan and the Fed, "the U.S. private sector debt alone is over 280% of GDP," Russell's reader explains, "and is the largest debt pile in world economic history. The U.S. telecom sector alone has more debt than the entire Japanese property sector did or has." "In the first quarter of 2002, consumers borrowed at an annual rate of $695 billion - breaking all previous records," Dr. Richebacher elaborates. "Their incomes, on the other hand, rose at an annual rate of only $110 billion. And for the 12 months ending in April of this year, $5.9 dollars of debt was added for every $1 of growth in GDP."

Adding debt to the system is inflationary: there is the illusion of greater purchasing power, which boosts up whatever market is hot at the time. Stocks went up in the '80s and '90s; now real estate is having its turn.

If only it could continue forever! Alas, that is not the way of the world. For each additional dollar of debt produces less and less economic progress...and is therefore a heavier burden than the dollar that preceded it.

At some point, people realize that they cannot afford to continue borrowing - their debt-service payments have become too much of a burden. Instead, they have to cut expenses and pay down debt. Then, prices fall...sales go are lost...and the economy sinks into a deflationary recession.

This, of course, has been the economic history of Japan for the last 10 years.

More to come...

Bill Bonner

p.s. There is another little detail to the Japan story which the letter writer noticed: "It amazes me that most people miss the appalling demographics in the Western World," he continues. "This is the thing that keeps me awake at night. By the time a 31-year-old retires at 60, almost 50% of the population of the Western world and Japan will have retired before him..." (Hmmmn...)


Got gold?

tedwThe last great mania#8033107/11/02; 06:43:48

Doug Casey of the International Speculator has struck at
world net daily on gold.

"And when they do move in (to gold stocks) its going to be like trying to Siphon the contents of Hoover Dam thru a garden hose.And thats not even to mention the institutions"

see article at

Max RabbitzYGM & WTC#8033207/11/02; 07:10:03

The cambridge site is likely KGB disinformation. Tying the GATA gold evidence to the WTC towers does not make sense. The FBI was holding this evidence? I think rather Reg Howe was and is. Besides all they needed was a compliant judge to slip out of the tight spot. I believe Russian KGB/communists/mafia have not given up dreams of revenge and a new empire. They use Islamic terror as part of their grand stategy. Destroy both Islamic (oil) and US power by pitting them against each other. It is in their interest to deflect and confuse their enemy with disinformation. This fits in with the reports of Putins female economics advisor and KGB/mafia associate (Tatiana something) warning of financial attacks on the US last year and more currently…..and urging the Russian people to buy gold. She needs to remove KGB/mafia fingerprints from the crime scene and will use gold intrigue or anything else to do it.

From the above article reprinted from Stratfor Global Intelligence, March 21, 2002.

"Tenet delivered a blunt message to Putin: The United States believes that WMD proliferation is official Russian policy. The government in Moscow must either immediately halt this policy or face the consequences."

WaveriderThanks All#8033307/11/02; 08:14:33

Thanks all for the posts, news and DMR - I`ve little opportunity at the moment to contribute but greatly appreciate being able to stop in quickly to see what`s happening. Cheers.

sourdoughUsul (07/11/02; 01:48:54MT - msg#: 80326)#8033407/11/02; 09:21:17

I suggest removing placer and barrick from the S AND P, provide the opportunity for bullion banks to pick up shares of these companies which could eventually lead to a control position. This may provide 'book" in ground reserves to satisfy their own gold creditors (central banks?)
How many shares issued on Barrick? I see 538 million.
How much money required to buy company? $10 billion?
How many shares required to have control over Barrick hedging program? Half would be 250 million or 5 billion.
They could then force Barrick to deliver at any time required. Hell, with the power these guys have they could take the company private with enough financial assistance.
Share are being dumped by index funds (forced).
Trizec hahn has convertible bonds backed by 30 million Barrick shares. If convertible holders wish to take barrick stock, Trizec must pay the market price to keep their Barrick shares. The fact is, it is not Monks company anymore, the power of the 30 million shares he exerts on Barrick is somebody elses power.
p.s. Yesterday the changes in the S AND P were announced.
It raised my eyebrow to see who rang the bell at the NYSE.
I know who it was because Pisani gave him a plug complete with company chart and company discussion after market.
Guess who. THE PRESIDENT OF TRIZECHAHN, the same Trizechahn who has the lean on 30 million barrick.
Can the bullion banks save themselves by acquiring control (or all)of placer and barrick? I don`t know. They will have a lot of "deep storage gold" if they pull it off. After all American dollars (to purchase) are getting cheap.
The smart think to do is force the sale of barrick and placer and pick it up to get control. If they are clever they will eventually get both companies "private"! What the heck is a few billion these days.

YGMMUST READ!...Barrick Rumered to Defer Hedge Contracts, Subsequent Bank Losses and Gold Rockets.. #8033507/11/02; 09:30:23

If only this "What we hear" rumor came to pass....It would be known as "Barricks Revenge"......YGM


The HoopleSpeaking of Placer and Barrick...#8033607/11/02; 09:37:34

Snippit from latest Guarino/WSU:

You know what a gold mine is? A gold mine is a hole in the ground with a liar on top. Gold mines have committed the unthinkable sin. They are trading derivatives. They have sold their production forward at lower prices. Yeah, you got it right: The mines have committed to sell millions of ounces of gold $30 under the present price. As the gold market goes up, it does not help them because they have committed to sell gold for years in the future at below market prices. If you want to buy gold, buy gold. If you want to lose money, buy stocks. If you want to lose a lot of money, buy gold mine stocks. Pretty simple.

YGMI TAKE BACK EVERY NASTY THING I EVER SAID ABOUT BARRICK! (that's alot of retractions)#8033707/11/02; 09:48:36


Show em you can't be kicked off the S&P w/o revenge....
It would be totally "Ironic" if the Miner most despised by Goldbugs was the one to kick off the "Greatest Gold Rush in History"......If this Rumor of Mr. Ian Williams comes to pass, it will be the single best piece of Gold news ever read in recent times......YGM.

"Go GATA & Go Barrick" :>}

sectorJim [The Street.Com] Cramer's "Redemption"...Say Halleluliah Brother#8033807/11/02; 10:03:50

Now a born again, sandwich man for the truth

Jeeze! Who'da thought that Jim Cramer of all people would be lamenting the absence of transparency in the Mutual Fund redemption business. "You just can't find the numbers".

In today's YAHOO news <> [Registration required], he rants about how the biggie funds "Hide" their redemption numbers from the unsuspecting public.

He now says the redemptions are coming fast and furious and this is the reason for the DOW's crumble of late.

Actually he has company. Lance "Crash" Lewis, formerly of the Prudent Bear Fund, also alluded [In his pay site newsletter] to the smell of redemptions in yesterday's micro-melt.

So ...IF this is the case, we can expect today to be a replay of yesterday as the big funds in Boston continue to lighten up in order to meet rising redemption demands.

Four hours to go!

YGMLook at Spot Spike....#8033907/11/02; 10:04:03

Now is it Barrick or 'Fear' of Barrick :>}}}}}}}}}

Gandalf where are you, your dogs jumping on an unexpected day....YGM

"Go GATA, Go Barrick's Revenge"

USAGOLDOf Mice and Men. . . . .#8034007/11/02; 10:11:23

I can remember a small incident in my personal life from a few years back that tells volumes about what kind of stock market we've been through and what kind of stock market we are going to have in the future. I mentioned this incident here back then, but I thought it worthwhile to repeat it.

I was standing in line at the local Mexican grill. In front of me were two young gentlemen dressed casually. They were talking. It was apparent that one of the two was a 'veteran' day trader at the day trading office a couple blocks from our offices. The other someone new to the 'job.'

- - - - -

First Day Trader: "This day trading is fun. I think you're going to like it."

Second Day Trader: "I don't know. I'm a little worried about doing this. Took out the second mortgage. Money's ready to go but I just can't seem to pull the trigger."

First Day Trader: "I was the same way but once you figure out how you want to do it, they make it easy for you."

Second Day Trader: " Oh yea?"

First Day Trader: "You just need to know where to put the money. I get up every morning early. CNBC runs its picks of the day and I just buy those. They always hit. I just keep making money."

Second Day Trader: "That's it? Do you do any other research?"

First Day Trader: "Nah. That's all you need to do."

- - - - - - - - -

Their turn came in line and that was all of the conversation I was privvy too. To be honest, I was put off by the discussion thinking if it's that easy then why would anyone work for a living. Above and beyond that, the thought also ran through my mind that if you didn't have to know anything about the stocks you were buying, why would anyone need a stock broker or financial research. (At the time, I hadn't completely figured out that financial research wasn't worth the paper it was printed on anyway.) But that was then and this is now. One wonders if the first fellow is still brimming with confidence and whether the second has lost his house. I doubt it. Both are probably looking for jobs in a nearly impossible job market. Meanwhile, I'm at home today watching CNBC and the steady stock promotional efforts continue on as if nothing has changed in the equities markets. If there are still sheep out there to be fleeced, you can bet the CNBC crowd is going to woo them into putting distance between them and their money. Maybe a little Qwest stock is in order. . . . .

As Bill Bonner reported in his e-mail report yesterday:

"This week should be interesting..." Dan Denning wrote
me yesterday, "because second quarter 401(k) and mutual
statements should arrive all across America. Imagine how
most people feel opening them right now. The sense of
dread they feel looking at a number that keeps getting
smaller, even as they keep pumping more money in each
month. Maybe proof in black and white of just how bad
the market is will cause them to sell."

End quote.


Interesting indeed:

Monday: DJIA down about 100.

Tuesday: DJIA down about 200.

Wednesday: DJIA down about 200.

Thursday: DJIA down about 100 as this is written.

On the questions about the PPT and whether or not they have been present in the stock market the past several sessions: Keep in mind that these are powerful forces, but they are not omnipotent. Standing in front of this market might very well be like standing in front of a gully wash -- no place to go and no way to stop it. The socialist crowd would like to think it can play God with the markets but they're finding out they can't.

Just as the downside may have become unstoppable in the stock market, so the upside in the gold market might become unstoppable at some point in the future as well. What you don't want to do is wait for the most-underpriced primary asset in the world to become the object of the investment public's fancy before you've secured your position. I think you will find the wild scramble to get physical a bit unpleasant. CPM / USAGOLD clients can be assured that if supplies are rationed, those who can call themselves clients will get preferential treatment. We hope it doesn't come down to that, but if it does, that's what we'll do.

- - - - - - - -

Gold ownership should be pursued from a position of confidence and understanding. The best time to make a purchase is when

A. the gold market appears quiet

B. when the metal is greatly undervalued as it is now

The old dictum about a quality suit valued at an ounce of gold carries great weight at times like these. It is no secret to most that the rate of inflation has risen dramatically in recent years despite the phony statistics issued by the Labor Department -- so much so that a quality new suit runs roughly $700 -- not one ounce of gold but two and one-third ounces of gold. This thumbnail illustrates makes gold greatly undervalued vis a vis goods and services. Buying know and holding until the dam breaks is the equivalent of buying gold in the late 1960s, early 1970s at $35 per ounce -- a purchase in investment lore that equates to findiing the Holy Grail. What we are experiencing now in my mind is not only an environment which requires the an allocation for portfolio insurance, we may be sitting on one of the best investment opportunities in the past decade.

I happen to know a fellow who bought his first ounce of gold at $35. He's in his 80s now and he's buying gold now -- and lots of it. His most memorable statement to me: "We both know, Mike, it's not a question of 'if' but 'when.' I'll buy it and stick it away. If my grandchildren become the beneficiary, that's OK with me. I know what gold can do, and nobody's going to talk me out of it."

As I go to post this, CNBC talks of

foreign markets collapsing at the end of session

possible problems at Janus

Raymond James president telling CNBC anchor "people are screaming "get me out." Anchor says "Isn't that telling us were at the bottom?"




The HoopleDips R' Us#8034107/11/02; 10:14:32

The only dips worth buying the last 6 months has been gold and silver. Is the epiphany moment here finally for the hoards? Feels like it. Barriks's revenge might replace Montezuma's revenge in the anals (pun intended) of history.
Gandalf the WhiteYGMer's Question#8034207/11/02; 10:40:17

YGM (07/11/02; 10:04:03MT - msg#: 80339)
Look at Spot Spike....
Gandalf where are you, your dogs jumping on an unexpected day....YGM
SPOT and SPIKE are doing well !!
Saving their energy for the PAPER AVALANCHE that can happen at a moments notice !
They are ready to BITE the paper pushers in the rear-end THIS TIME !
SILVER is shinning too ! HELLO Rich ! Where are you ?

Carl HDollar#8034307/11/02; 10:54:05

The dollar is not looking healthy today.

Got Gold?

sectorDoug Nolen's July 5th Run at NEXTCARD's Demise and the FDIC's Losses.#8034407/11/02; 11:22:19

Let there be no doubt, when borrowers are informed that they will not be able to use their NextCard visas for new purchases, defaults will skyrocket (with rising servicing costs) and the value of card receivables (and related securitizations) will plummet. It is no mystery why there is little interest in acquiring NextBank trust assets. The NextCard experience (with loss estimates as high as 70% of deposits) does not bode well for the FDIC's exposure to other troubled lenders. Metris ended the first quarter with deposit liabilities of $1.725 billion and managed card receivables of $11.78 billion. Providian ended the quarter with deposits of $14.4 billion and a "managed consumer loan portfolio" of $22.1 billion.

How could it have ever made any sense to allow subprime lenders to finance reckless lending with insured deposits?

It is also worth mentioning that Internet mortgage king Countrywide Credit ended March with over $2.2 billion of deposit liabilities.

It is interesting to observe the timeline of the NextCard fiasco. From the company's website: "NextCard was so-founded on June 6, 1996 by Jeremy and Molly Lent…The first NextCard Visa was issued on December 23, 1997. Although many applied, only the best consumers passed the strict credit quality guidelines we established… The NextCard team is "not afraid to take chances." The company's founder (Jeremy Lent), CEO and president all learned their trade at Providian.
February 7, 2002: NextBank closed down by the Office of the Comptroller of the Currency. "NextBank's unsafe and unsound practices were likely to deplete all or substantially all of the bank's capital, and there was no reasonable prospect for the bank to become adequately capitalized without federal assistance."

February 11, 2002: FDIC mails $525 million of checks to NextBank's depositors.

April 17, 2002: FDIC spokesman estimates loss to insurance fund at $25 million.

July 3, 2002: American Banker runs story stating FDIC now expects NextBank-related losses to the insurance fund of between $300 million and $400 million.

With Billions of card defaults looming at NextCard and other aggressive subprime card lenders, how does the FDIC calculate a loss of only $400 million? Does the FDIC imagine IT will collect the amounts due?

The answer is the real FDIC loss is far larger and they are covering it up.

USAGOLD / Centennial Precious Metals, Inc.You don't have to stand idly by as the market or government policy plunders your wealth#8034507/11/02; 11:27:52

gold sovereigns
Empires rise and fall, as do economic freedoms,
and common fortunes fade away
like memories of common events.

Why should YOU buy gold Sovereigns today?

Because no one else will do it for you.

Centennial is here to help.

HuskyRE: Barrick, this isn't the first time.#8034607/11/02; 11:53:48

Snippits from a March 1996 article:

Gold Hedging Loses a Fan

Late in January, however, Barrick announced it was readjusting its hedging policy: it would hedge forward sales only two years in advance, instead of the three-year policy it now has in place. Several market sources believe that Barrick is responding to pressures from shareholders who think that the five-year high hit by spot gold is a harbinger of things to come, and want Barrick to ride the coming surge.

The strangest aspect of the story is why Barrick went to such great pains to trumpet the announcement in the financial press. It made some observers wonder if this was not a forewarning that it would soon scrap all hedging. "The curious thing is why they bothered to make an announce a change in their cost of funds methodology," says Douglas Newby of Moyes Newby, a corporate finance boutique that specializes in the mining industry. "It would normally be an internal matter. They are clearly signaling to the market that the perception of Barrick as a classic hedger is wrong."


So did anything change in 1996 as a result of this or not or not ?

Black Blade"Scandal Of The Day" - SEC opens Bristol-Myers investigation #8034707/11/02; 12:19:21


US regulators are investigating whether Bristol-Myers Squibb, one of the world's largest pharmaceuticals companies, inflated its revenues by $1bn last year. Company officials have met the Securities and Exchange Commission to discuss the circumstances behind sales to drug wholesalers that boosted inventories to unsustainable levels. Regulators are asking whether the company gave inappropriate incentives to wholesalers to help meet 2001 earnings expectations.

Black Blade: Yep, another corporate scandal.

YGMHusky#8034807/11/02; 12:23:22

Barrick in 95/96

They never did reduce their Hedges that I know of, in fact they increased them I believe. (they've been 4 yrs out for many yrs now)..The deferal and subsequent upward pressure on POG by Barrick buying physical and the grief caused the BB's seems much different to me than that news release of 96. No matter whether the rumor of Mr Williams holds true or not, if Gold does move high enough the Hedgers will be buying physical and the lenders will be biting the bullet from those who cannot afford to buy at rising values....Just my much shared opinion tho...Thx...YGM
R PowellGandalf the White#803497/11/02; 12:41:19

"Silver is shinning too. Hello Rich. Where are you?"

Why does a wizard need to ask that which a wizard knows? As with yourself and orc control, I've duties to perform but mine pertain to emptying concrete mixers. Otherwise I'm rarely far away. Thanks for thinking of me.
I'd dearly love to see POS convincingly take out this $5.10 barrier to avoid a possible 480 - 510 trading range. She may be encouraged if big brother Gold moves up to attack his $330 resistence. Close your eyes and click your heels three times....

barnaclebobAre Gold Bugs todays modern Noahs?#803507/11/02; 12:46:22

It is written that long ago on the orbiting orb we call earth that rain had never occurred in the history of the world. One day a visionary prophet named Noah recieved a vision from the Creator that a terrible rain and flooding would cover the earth.

The sheeple of the day discounted Noahs prediction as it had never rained on Earth before. Noah, knowing that the flood waters would consume the earth began building a giant wooden ship. The sheeple taunted and laughed and laughed at Noah and his family because Noah was constructing such a Ark, stockpiling food and readying themselves for the future disaster that was coming.

One day shortly after Noah had completed and stocked his great wooden Ark as prescribed by the Creator, a few rain drops began to fall on the dry parched earth. The sheeple at first thought rain was a novelty as they had never before experienced the fresh smell and feel of rain drops.

The rain began at first fallimg from the sky very lightly, the sheeple began prancing and dancing about the land as the new precipitation spawned new growth of flora and fauna never seen before. The rain however continued unabated until the new flora and fauna was covered by the now heavily falling rain. The sheeple began to realize that the land was now covered with six inches of water, they remained confident that the rain would soon stop and their lives would return to normal. The water levels continued to rise to 3 feet and the entire crops were lost. The sheeple were now beginning to become concerned.

The tribal elders were called upon to provide council. The elders explained that the rains would soon subside and the flood waters would soon recede. The minor flood condition was but a mere minor inconvienience. The sheeple filled with confidence returned to their protective lairs from the rains and flood waters. The tribal elders knew the rain was increasing ever more and more with each passing day but they did not dare tell the sheeple. When the flood waters rose to five feet, the sheeple began to panic.

No longer did the sheeple think Noah and his family were lunatics from the fringe as the flood waters began to lift the great giant wooden Ark and its very precious cargo. The sheeple had been warned by Noah and they had the time and opportunity to prepare for the great disaster.

Today, Forum Posters, Gold Bugs, PM Investors and GATA have been warning the sheeple of the imminent disasterous economic tsunami of red ink about to flood the global economies and financial markets.

This very diverse group of individuals from all walks of life have warned our families, friends, co-workers, employees, strangers, and even government officials of impending disaster. Our warnings have been recieved much like Noahs, we have been ridiculed, mocked, taunted and laughed at.

The flood waters are rapidly rising, the sheeple have again spoken to elders, the elders again know there is no stopping the flood of red ink. The sheeple are beginning to panic. The Gold Bug early warning does not appear so cynicle or laughable now.

Prepare and protect yourself like Noah did from the rising flood of red ink, get physical Gold!


HoratioBarrick Vs GoldmanSucks & Morgan#803517/11/02; 12:55:24

I was all alone in pointing out this part of Barricks contracts 6 months ago,and got a lot of ridicule from Black Blade,now someone else has pointed out the same observations.
If Barrick can defer delivery for 15 years,and not have margin calls,Goldman Sachs and Morgan have been snookered.
My heart goes out to Goldman Sucks.Now Barrick may become the vehicle by which the GOLD bugs get thier revenge!!
The Lord works in mysterious ways.

Quoted from Calandra article
"Hathaway estimates each $10 rise in the gold price "means the collective bullion dealers have extended another $1.4 billion to the gold mining industry, based on a 4,000-ton position."

Hathaway warns, "A $50 move, which is certainly in the cards, would be $7 billion. What does this mean? It means a serious squeeze on the bullion dealers, not the mining companies for the most part. Central bankers who have lent the gold to JP Morgan, Morgan Stanley (MWD: news, chart, profile), Goldman Sachs (GS: news, chart, profile) and others would not be happy with this situation."

What can the bullion dealers do about it? "Not a whole lot, other than buying gold to cover their short, which is what they are starting to do," says Hathaway from his Tocqueville (TGLDX: news, chart, profile ) offices in New York City. "Most mining companies, especially the big ones, have margin-free trading agreements with their various dealers. This means they do not have to advance cash when the gold price rises. It is too late for the bullion dealers to go back to the mining companies to change the deal, so they have no choice."


Hathaway sees Wall Street clean-up crews at work, frantic in their efforts to erase the gold derivatives. "There are all kinds of crazy, exotic deals made in the past that will come to light -- exploding puts, knock-in calls, etc., which had high fees originally but are now viewed as toxic waste by the dealers who sold them."

The fund manager points out that actual gold supplies do not move around as freely as those who need to cover their hedging strategies would like. "Physical gold is illiquid relative to short covering demand. This will take gold a lot higher, unless the central banks step in, which I expect them to do when the gold market gets really disorderly, like gapping $10-$20 a day or more.""

We'll hear more on the hedging debate, gold industry mergers and what Mitsui Precious Metals analyst Andy Smith calls "the new error of gold" early next week, when the London Bullion Market Association and the Washington-based Gold and Silver institutes stage a San Francisco conference.


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YGMHoratio...#803537/11/02; 13:19:45

The Lord works in mysterious ways.

Amen to that....YGM.
TownCrierCurrency turmoil around the world evident at USAGOLD Newswire#803547/11/02; 13:23:19

Some of the current headlines you can visit...

Here you see rouble spreading beyond Argentina in South America:

Brazil financial turmoil takes toll on real economy(12:36 Forbes)

Uruguay's peso falls 8.5 pct on economic uncertainty(12:19 Forbes)

Chilean peso tracks Brazilian real to end firmer(12:11 Forbes)

Here you see Japan's plight, yet U.S. dollar remains weak even against the yen:

Japanese government warns economic recovery shaky in global uncertainty(12:02 CBC Canada)

Dollar Losses Against Yen Grow(11:20 Reuters)

Dollar Drops to Nine-Month Low Against Yen(09:59 Bloomberg)

Here you see the ever-beleaguered lira, where citizens have well-learned to store their savings in gold:

Turk central bank props up lira as govt. crisis deepens(10:09 Forbes)

And here you see the euro playing strongman, challenging the dollar as the new currency of business and finance:

EU presidency satisfied with euro's rise(11:50 Ananova)

ECB stands sentinel against any wavering in euro deficit pledge(10:57 EU Business)

Bottom line: In a world of competing currencies, some of them in a race to the bottom, gold is wise man's choice for savings. Anywhere, anytime. It's that simple. Give Centennail a call.


Aquariani'm a new guy#803557/11/02; 13:29:35

I feel must first introduce myself to the group. i am 24 yrs old and work as a lobbyist in Minnesota. i'm not an economist nor do i have any real understanding of what is actually happening in the markets.

i have three questions:

1) in the event of a crash, are investment dollars lost to other investors (those who bet on a crash) or do they simply evaporate? if a currency were to collapse, wouldn't the debt also collapse? if i borrow money from you, and money becomes worthless, do i not owe you nothing? Pardon my ignorance--i'm sure this is an easy one for you guys.

2) are there any markets for souls? i'm sure if i sold mine now i could end up in decent shape by the time i want to retire.

3) isn't it all just semantics? aren't we all pretty much just serfs (of varying degrees and classes) living in a fuedal (futile) society?

siamo tutti naufragati in questo mare. salute.

TownCrierA mine is no substitute for gold -- it's a completely different investment class including corporate risk#803567/11/02; 13:37:02

HEADLINE: SABI Gold Mine Ceases Operations

The Herald (Harare)
July 11, 2002

SABI Gold, wholly owned by the Zimbabwe Mining Development Corporation, has ceased operations and requested to be placed under care and maintenance following a debt in excess of $1 billion.

A spokesperson in the Ministry of Mines and Energy said the board of directors had asked the ministry to put the mine under care and maintenance after realising the mine was technically insolvent and was no longer capable of producing cash to sustain operations.

"The current status of the business is that it is technically insolvent, because it has for a long time now been unable to generate cash flows to sustain its operations," the spokesperson.

The largest creditor, Trust Bank Corporation is owed over $900 million and has already begun fore closure proceedings.

...Problems at the mine started surfacing when the mining company increased its daily mined ore tonnage from 250 tonnes to 1 000 tonnes a day. ...This led the company to finance its expansion through a bank loan...

...A handful of gold mines have scaled down or ceased operations as they find it difficult to survive under these adverse macro-economic conditions.

...To ensure the sustainability of the industry, the central bank last year introduced the Gold Support Scheme, under which producers are fetching US$434 per ounce, which has ameliorated the situation.

----(click URL for full text)------

Know where your money is going. Are you merely speculating in management and operations, or are you indeed converting your inflatable national scrip into the timeless tangible wealth of gold?


Black BladeBarrick Hedges#803577/11/02; 14:01:15

I find it curious that Ian Williams is privy to the inner workings and fine print of Barrick's forward sales contracts when no one else is. Does he work for Barrick and have intimate knowledge of Barrick's legal affairs and corporate contracts? Does anyone really think that Barrick has fooled the masters of the game? Ian has just parroted the Barrick company line, however, he has not presented any evidence except a nice pet theory. I await even an example such as one measly contract (in whole with fine print and footnotes) that would support his contention that Barrick has absolutely no risk and all the benefits in these hedge agreements. It would be a first in the annals of investment banking. I remain unconvinced unless of course JP Morgan Chase, Citibank, and Goldman Sachs suffer on the bottom line as a result. Could this be the reason that Morgan's Dinsa Mehta was "allowed" to "spend more time with his family"? Apparently the market is unconvinced about Barrick's worth s it has grossly under performed the market whereas profitable non-hedgers have skyrocketed. Forward sales have contributed to the pain and suffering of the gold market over the last several years by giving a false impression of endless gold supply that depressed gold prices. However, that said, I await any evidence that Ian is willing to impart. I remain unimpressed.
Gandalf the WhiteWELCOME Sir Aquarian !!! #803587/11/02; 14:02:49

Aquarian (7/11/02; 13:29:35MT - msg#: 80355)
i'm a new guy---
Learning at a younger age is advantageous.
Stick around this TABLEROUND and you will "WIN" !!

Gandalf the WhitePS to Sir Aquarian !#803597/11/02; 14:11:24

You ended with --- loosely translated by BRUNO the Gate Guard ---- "We are all as shipwrecked in this sea, health to you."
BUT if the ballast is GOLD and SILVER, all is not lost !!

CoBra(too)Confidence - A Game?#803607/11/02; 15:14:22

It may seem obscene ... - Though nothing can be as obscene as the slow motion managed and manhandled crash of the trash of the "irrational exhuberance" - and make no mistake - that was 1996 and the Dow was 6.000! and the Duck a bit higher than today!
Way, irrationally and exhuberantly too high said the Fed's Mr. Greenman! - and the answer was to grease the bubble machine to the extreme. May the Greenman also succeed in putting the brakes to the slide of financial assets - the suspects of the economic malaise are dead ahead.

And as confidence in all walks of life takes a backseat and is in retreat - politics take up the slack and tell you - at best - to re-regulate your markets to make them really free! - Recall, the founding of the SEC, FTCT, antitrust and several other venerable institutions to ENFORCE a level "playing" - no, market place - right after 1929 - see FDR!

Or'Well - some-one said WAT abroad and SWAT back home will take care of the GWB syndrome. ... Maybe not before the IOU - becomes redeemable again - against a common commodity called labor and/or productivity - measured against the eternal scales of gold's value!

... And we may be far from any confidence in politics, fiat money and economics.

- As hopefully not misquoting the WSJ in a recent article GWB's career at Harken Energy was close to stock manipulation. 'But now that Mr. Bush has moved from the board room to the Oval Office, the man may pretend that he never held an honest job in his entire life. And maybe he didn't. - ... and being lectured by the Bush White House on ethics - is likely to raise more sneers than cheers, says Sean Corrigan. -

- The managed slow motion or stealth crash, aside from conj-(ass)-uring the sheeple offers more opportunity to prudently acquire reality - or as Ari says way or even weigh too heavy physical for the paper price tag - rag.

cb2 -

... and am sorry for GWB - to have squandered the potential to blame the eco and fiscal mess to the originators - instead - being accessories - at best.

BoilermakerRecent POG #803617/11/02; 15:24:06

I noticed that the gold stocks were down rather sharply this PM in spite of strong POG action. Recent history suggests that gold will get hammered tomorrow. Could it be that certain "investors" are given the word on the next day's POG sell off? POG $317 seems to be a current lid for the folks who are holding the lines. I'd like to hear from Pizz or others who read these charts and watch the market.
YGMBlack Blade...Barrick & Ability to Deferr Contracts up to 15 Years...#803627/11/02; 15:33:36

The information Mr. Ian Williams and others are using for this 15 yr deferral assumption is valid and also very public knowledge....Mr Williams is very astute in his views IMHO and "IF" his scenario should come to pass (that's a BIG IF, I agree) then the writers of those contracts would be the ones underwater....This would then be "BIG" for the POG. I'm not advocating owning Barrick shs myself but the facts remain what they are. I also believe Mr. Williams is a very astute/well documented analyst and one could consider he'd be very sure of his facts before making such statements.....YGM
PizzDow support#803637/11/02; 15:49:26

Scalped the chart off another forum with the comment of long term DOW support. Thought I might expand a bit on it.

As we listen to the talking heads and analysts discuss where DOW support is and where/when we resume an uptrend, this long term 100 year DOW chart gives a pretty good indication where long term support is.

Since we seem to be forming a real nice four year head and shoulders top now, makes you really stop and think about a right shoulder on the above chart over a 60 to 70 year time frame.

Hmmm, 20 year bear in gold while the dow climbs to the top.
Now, a 20 year bull in gold while we drop to long term support? Makes sense to me, but Wall Street might have a hard time swallowing it. Kind of hard to play derivitives with a 675 - 1050 DOW, an SPX of 60 to 100, and an OEX of 25 to 50. Assuming of course derivitives are still in existance by then, which I doubt seriously.

Heard one analyst this morning saying 400 to 500 gold MIGHT BE POSSIBLE, but 10,000 could never happen. I'm old enough to remember people saying the same thing about the DOW.


Was having a few (too many) cocktails last night with a few people in my industry and the conversation drifted to stocks and investments. Sat back and listened to the horror stories of all the tech and telecom losses. Finally one of the more drunk and boisterous members made a comment that I looked a bit too smug and asked me how I was doing with my investments and I told him. When he replied "impossible", I said "not with gold and silver". And that pretty much ended the conversation.

Maybe it's just programming, but I still find it almost impossible to get people to invest in the metals, even when they are going up. That's OK, cause it just gives us more time to buy lower so that when we finally sell some, it'll be to these idiots at much, much higher prices.

The Bull in PM's is just about as far along as the Bear is in the above long term DOW chart. It's just starting.


R PowellAquarian#803647/11/02; 15:51:56

There are many here much more qualified to answer your questions than I but I'll start with some of what I believe to be true. Others may correct me so stay tuned.

As to investment money being lost in a market downturn, I find it helpful to think of the Dow, Nasdaq and other exchanges as simply that- exchanges. One sells and another buys with the profit or loss tallied only after each one's transaction or position has been closed. As an example, if I buy a stock at $10 and the price rises to $100 but then falls back to $10 and I then sell at $10, what's my gain or loss? The exchange gained fees, the brokers collected commissions and, assuming that $10 still has the same purchasing power as when I first bought the stock, I'm even. Damn, I wish I'd sold that puppy at $100!
As to debt repayment, if the value or purchasing power of the dollar declines, then it would seem that old debts could be repaid with less value or weaker dollars if the dollar declines. I find this is a tempting notion but, usually, during those economic times when the dollar is losing appreciable value, it may be difficult to earn even deflated dollars. Perhaps it's better to try to reduce debt. As much as I love the long side of silver, I'm not ready to bet the farm on it. As I'm sure many will mention, an ounce of gold will still be an ounce of gold no matter what value or color our paper money becomes. It's dollar valuation is the variable. The metal is constant.
One last thought as to profiting in a decline equities market. It can be done but is difficult. Shorting the index numbers comes to mind. This can be done with futures or options in futures. The futures markets are zero sum markets where one profits at the expense of another, that is, profit from one position comes in an equal amount, out of the pocket of someone else.
Again brokers collect commissions, the exchange collects its $0.09 per transaction fee and the players place their bets against one another. It is more common or usual to see bets on the short side in commodities than it is in the stock market. Margins are the same for short positions as they are for longs. Short selling in equities is not common among the average investors. I hope this helps somewhat. I'm sure there will be other responses and probably differences of opinion. That's what makes any market, different opinions!

R PowellGood to see you#803657/11/02; 16:08:25

It's been too long- since CoBra(too) has spoken to- me and you. Hopefully the absence wasn't due to any sort of flu but I haven't a clue as to what or who- keep you.
Less time please, between appearances.

misetichExpect credit blowups even as economy improves - BofA#803667/11/02; 16:20:39


NEW YORK, July 11 (Reuters) - Corporate bond investors can look forward to a brighter economic and profit picture for the rest of the year, but they should still tread cautiously over the next few months, Banc of America Securities strategists said.
"The number of potential credit implosion candidates has not materially declined over the past six months," he said.
Telecom bonds, the market's worst performers so far this year, could continue to struggle with regulatory probes, concerns about liquidity, ratings downgrades and intense competition, Bartlett said. Banc of America recommends a market weight in the sector, meaning a weight matching corporate bond indexes.

The bank also cut its recommendation on the auto sector to market weight from overweight. Though sales were strong this year, they were achieved mostly through incentives that may have robbed future sales growth, said Tim Patrick, head of global high-grade research.

Negative business trends also could pressure ratings, though rating agencies will likely hold off this year while they monitor business trends, he said.


No recovery in sight for auto and telecom industry - Feds have one more tool at their disposal, since they have used up "interest rates", taxes decreases, higher budget deficits, higher government spending
The remaining tool is a lower US $

Got gold?

AllanCThis week's stock action#803677/11/02; 16:35:52

As I watch the SM debacle continue on a global scale
with persistent selloffs accompanied by violent rallies
followed by further selloffs etc, I am reminded of a
loooong grinding bear market never seen before. The "death by a thousand cuts" as one commentator stated.

Before it is over, existing notions that "stocks will always
bounce back higher", "buy the dips" and "don't panic, hold for long term" will be put to rest once and for all. People like Joe B and Abby C will get theirs. I wish I was a fly on the wall listening to their private conversations with the suckers they led into this mess.

For those of us still interested in making a profit from
stocks, I will remind you of these immortal words:

"Do ya feel lucky, punk?"

followed by the coup de grace:

"Your stock order has been filled, sir"

And gold has based and it's "paper price" is grinding higher in opposite fashion. Once big paper gold buyers decide to "test" the system and take physical delivery, then as ANOTHER poster reminded us, keep your physical close at hand, and watch the games begin...

misetichDebt Clock Revived as Deficits Soar#803687/11/02; 16:51:41


NEW YORK (Reuters) - The U.S. government has returned to its old ways of bursting budgets and so New York's landmark national debt clock lit up again on Thursday after a two-year hiatus, whizzing higher by $30 a second.

A spatter of puzzled pedestrians stared up in the morning sun's glare near the bustling corner of Sixth Avenue and 42nd Street near Times Square as workers switched on a massive 11-by-26-foot digital clock that had lay dormant for nearly two years.

After taking a few seconds for the 13-digit figure to sharpen, the sign read $6.1 trillion, or $66,791 per U.S. household, and immediately began ticking higher.

``It's frightening -- really frightening,'' said Ruth Davis, 48, a native New Yorker, who paused from reading her newspaper at a table in Bryant Park, located across the busy intersection, and cast a glance up at the sign.

But officials said late on Wednesday the Bush administration will release new budget projections next week showing higher budget deficits in part because of the recent stock market slide.

Many Wall Street analysts think this year's shortfall could top $200 billion.


A few $ here a few $ there
How long will foreigners keep on lending? Where to US $

Got gold?

misetichAcknowledging 2 whose foresight was accurate #803697/11/02; 16:56:03


But about five years ago, Allmon told his subscribers that the market had become "overvalued" based on what he called "real earnings," not the "pro forma" earnings that companies were reporting. It was an accounting distinction that went unnoticed by most stock market investors. As Allmon explained repeatedly: "Companies have been 'fudging' the numbers by not deducting expenses properly, especially when it comes to stock options."

As the decade ended, Allmon's list of recommended stocks contracted: only a real estate investment trust and a large gold- mining company, along with a few old-line companies. But most of his model portfolio was in short- to medium-term government securities. Subscribers defected. They wanted the hot technology stocks. Still, in every issue Allmon warned that not only tech stocks but other major companies would see huge losses in market valuation when people woke up the accounting legerdemain.

In mid-1999 Allmon forecast that the S&P 500, the Wilshire 5000 and the Dow Jones industrial average could fall 40 percent to 60 percent by 2001. The former two indices hit his forecast mark; the Dow, so far, is down 27 percent from its highs. And in February of 2000, Allmon forecast the NASDAQ (which he then noted he rarely follows) could drop 60 percent to 80 percent--another forecast that was right on the money.

Today, Allmon isn't gloating. He says that at his age, 82, he just "takes it as it comes." And what does he think is coming next? "More of the same," he responds promptly, adding, "There's something big out there we haven't seen in 70 years, and I'm talking about trust. It's gonna take a long time to get people to regain their trust in corporate America."


Do today's market headlines hold any surprises for Tice?

"No. It's coming out the way we had envisioned. Corporate accounting shouldn't shock people. We created an environment of speculation and recklessness, where the most aggressive professionals were promoted--accountants, money managers, analysts and stock brokers. The incentives were to 'go for it and get rich, baby.' And as long as executives met their targets, investors continued to buy without caring how the numbers were produced. So this blowup is no surprise."

What should investors do now?

"We're only in the third inning of this bear market, and the most important thing to do is protect principal ... We were wrong being bearish early. But I'm confident that we're still in the early stages of the biggest secular bear market in this century--because the excesses were so great. So I can't in good conscience advise people to put their money stocks today."

"There's something big out there we haven't seen in 70 years, and I'm talking about trust. It's gonna take a long time to get people to regain their trust in corporate America."

What does Mr. Allman forsee?

Got gold?

mikal@Boilermaker#803707/11/02; 16:58:09

"Recent history suggests gold will get hammered tomorrow." Maybe a large fund or bank or two will sell again, metal that is. Stocks too, but I don't hold any. But notice how miniscule the POG affects are. Clearly the volatility, characteristic of this market, is missing. Manipulation down, butts against buying pressure EVERY DAY except thin & after-hours trading. "Control" appears to be in place, but it's temporary stabilization only. There are easier ways to perceive POG market closes rather than "hammered", "dumped", "bopped", "clobbered", "faded", "sold off", "retreated" aren't there? We'll use psychological warfare against the Cabal and our personal doubts. Let's see, "corrected", no that's too repentent/pacifist. Whaddya think? "Adjusted", "Regrouped", "Paused"(White lies are ok in war), or "Retraced"?
misetichGold In Early Stages of Bull Market#803717/11/02; 17:02:11



On the demand side, Lassonde stressed that a reversal of hedging trends will work in favor of a rising price. Gold producers have borrowed 4,000 metric tons of gold from central banks over the last 10 years, he said. Now those producers are paying back more than they're borrowing.

Forward selling of production is not as attractive as it once was because of low interest rates. In a typical situation, a broker will borrow gold bullion from a central bank at, say, a 1% lease rate, sell the gold on the market, and park the proceeds in an interest-bearing account at 4% to 5%. That spread between the gold lease rate and interest rate enables the broker to pay a higher price to a producer of gold for future delivery than the current spot price. When it comes time to pay back the central bank, the broker receives delivery of the gold from the producer and pays back the central bank.

With a lower difference between the gold lease rate and the interest rate, central bank borrowing is less appealing and hedging of future production is less pronounced.

In 2002, Lassonde said, the net payback (after borrowings are subtracted) to central banks will be 350 metric tons. He figures that the price elasticity of gold is $5 an ounce per 100 metric tons of gold per year, so the net payback of 350 metric tons from production should translate to an increase in the gold price of $17.50 an ounce.

In 2001, the net payback to central banks was a negative 75 metric tons, he said. In 1999, hedging resulted in the dumping of 500 metric tons of central bank borrowings on the market, he said, and that can be directly correlated with the $25 drop in the gold price at the time, from $275 an ounce to $250 an ounce.

Lassonde also foresees a weaker dollar helping the dollar-denominated gold price. For example, he said, a stronger dollar hurt the gold price between 1980 and 1985, during which the gold price dropped from $800 an ounce to $300 an ounce. But when the dollar weakened by 33% versus a basket of currencies between 1985 and 1987, the price of gold partially rebounded, to $500 from $300, he said.

If the dollar falls 20% versus other currencies, then odds are that gold's going to go up 20%, he said. And because of trade deficits and other reasons, he thinks the dollar is on the brink of weakening.

think we're in the early stages of a bull market that will last many years. I don't think this is a flash in the pan whatsoever, Lassonde said.

On the supply side, the low gold prices of the last five years have curtailed exploration and development of new projects, said Lassonde. For that reason, he expects 2% to 4% less gold to be produced per year for the next five years. Currently, about 80 million ounces a year is produced worldwide.


A worthwhile repost of Mr. Lassonde's presentation at a Merrill Lynch conference in Boston not to long ago

Got gold?

mikal@Boilermaker#803727/11/02; 17:05:24

Tomorrow, August precious metals options expire. So, per your "recent history", gold'll get it again, if they're lucky, a two or three buck or so, "pause".
misetichO'Neill defends plan for Social Security#803737/11/02; 17:12:55


Washington -- Despite a sagging market and corporate scandals, Treasury Secretary Paul O'Neill on Wednesday defended the Bush administration's plan to allow workers to invest a portion of their Social Security taxes in stocks and bonds.

"Social Security was a monumental idea, but it is not sustainable in its present form," he said.

As the Baby Boom generation begins to retire, the system will not have enough workers to pay the benefits of retirees. The government projects that beginning in 2016, the system will not collect enough in payroll taxes to cover all the benefits it has to pay out.

To cover the gap, it must begin redeeming an expected $4.9 trillion worth of Treasury bonds that Social Security will have accumulated from surpluses it has been running since the mid-1980s.

As the bonds are redeemed, Congress will have to cover the costs by raising taxes, cutting spending or borrowing money. By 2038, according to government estimates, the bonds will be exhausted. If nothing were done, benefits would have to be cut 27 percent from promised levels to keep the system afloat.


Is Mr. O'Neil on drugs?

Got gold?

PizzBoilermaker/Rich#803747/11/02; 17:17:16

Boilermaker - These markets are way to volitile with 1% swings in minutes and would be near impossible to trade, even for the pros. One of my gold stocks had the specialist swallow about 50,000 shares right at the end of the day, problem is when they make a market inbetween the bid and ask, you can't tell if they are buy orders they're taking or sell orders. Lot's of cross currents.

I'm still bullish on PM's short term from a technical standpoint. Nearly everything I watch is at the lower end of up channels and they're holding. We should move to the upper end of the ranges over next 2 to three months. If we get a war or terrorist action, it'll be a lot quicker.

Rich - If you'd have sold at 100, you'd still be even, cause you'd have to pay-off all the extra stuff you bought when you were richer (is that a pun?) (smile).


Carl HTrying to put 2 and 2 together today.#803757/11/02; 17:17:58

Today was it was interesting the way all the mining stocks got hit hard this afternoon. I have been trying to make sense of this and I thought I would share a couple thoughts.

1. It is possible that there is going to be another attack on gold and silver before option expiration on gold and silver this week. (Is op ex this week?) So someone may be trying to profit from expected decline.

2. Another possibility is that the cabal is running low on ammo and is hoping to get some arbitragers to go long the mining stocks and short the metal. Again, this could be due to option expiration.

3. Looks like a buying opportunity in any event.

PizzMisetich#803767/11/02; 17:22:15

Re: Social Security

Bet you a maple they're dead serious, and you'll be able to invest you funds ONLY IN THE NEW AND REVISED S&P 500. Which are now sans gold stocks and foreign stocks - Bet me please!!!!


goldfoolSomething just doesn't smell right about megahedgers Barrick and Placer Dome getting booted from the S & P.#8037707/11/02; 17:40:46

I smell a skunk no, make that a herd of skunks. After the FT/Crudele article earlier this year describing the extreme measures the Fed was comtemplating in order to save the stock market (including the Fed buying gold mines) I think there's more to this story than appears on the surface. Unfortunately I don't know enough about international corporate law to put it together but something about this heretofore unholy alliance stinks. What does Barrick do? Turns around and doubles the resources at their Alto Chicama property or should I say deep storage gold. Then it might just qualify as a reserve asset, eh? HAH!
Carl H@goldfool Placer, Barrick and the SPX#8037807/11/02; 17:48:29

I think that the answer is that the cabal is trying everything they can think of to make gold, silver and mining stocks look bad. By kicking those two out of the SPX, index funds will have to sell them, and buy whatever toxic waste S&P adds to the index. I suspect that this is a large enough amount of stock to make a dent.
misetichPizz#8037907/11/02; 17:57:47

You'll do anything (wink) to add to your collection! I won't bite -
Something is up - and we will find out soon enough.
This "All-American S&P 500" stuff doesn't add up

PizzMisetich#8038007/11/02; 18:09:22

By letting us invest (long term til we retire) some of our SS funds into the market is nothing more than direct government subsidy of the markets, cause they are spending the funds anyway. And these funds will have to come from either increased taxes, or spending cuts, or more borrowing.
All it is is either now or later. (Unless there is really a PPT and they're trying to clean up their act without someone finding out - verrry possible????)

Much more thought required on this, but now it's time for a toddy and 9 holes of golf, or 9 holes of golf and a few toddy's.


R PowellPizz#8038107/11/02; 18:31:22

Did you mention volatile markets? I have friends who have no knowledge or interest in anything financial but, to be polite, often ask me how my stocks are doing. I used to correct them by stating I own no stocks buy trade commodities. That always ended that conversation cold. Now I gasp and say, "Stocks! They're much to volatile. I can't take the risk so I trade those stable commodities."
Now about selling that Nasdog stock when it was at $100, how many did buy low but not only didn't sell high but still haven't sold at all? What they did gain was a sense of wealth which was never collected but was utilized as justification to live beyond their means so maybe the exchange exchanged their initial buying price into debt which now exceeds whatever monetary value the stock still has. Now that that's done, maybe we can run up the appraised value of houses to finance more consumer spending. After that bubble bursts we'll think of something else to continue deficit spending. After all, if all else fails, we'll just set the date for exchanging greenbacks for the newly printed blue colored fiat. Does 20 green for one blue sound about right? This will discount all existing unpayable debt by 95%. Then we can really start pumping out the bluebacks! Hey, this is easy, John Law just didn't know when to change colors.
Thanks for the technical thoughts. I happen to agree completely so I've not much to add other than that imho all this will take much longer than most foresee. For the physical holders, strategy is easy beans, simply buy, buy, buy and hold. For those of us who also trade a bit, same thing but with some paper buying and selling within those channels you mentioned. Now then, is POS going solidly through the 510 level or does she have to back off again to get a running start?
Any thoughts, anyone?

misetichConsumer-driven commercial real estate strong, corporate-driven weak#8038207/11/02; 18:34:47


The real estate segments that are more dependent on the consumer side of the economy - multifamily and retail - are currently more stable. However, office and industrial properties, which are more driven by the corporate side of the economy, are presently fragile-to-grim. The health of these commercial real estate sectors affects the collateral that underlie commercial mortgage backed securities
The office segment has no green markets, and the national score of 40 is the lowest of any property type in the last two+ years that we have been reporting quarterly property market scores. Vacancy is still rising and at 16.1% is at the highest level since 1993. However, assuming that the macro-economy continues its nascent recovery, the office sector could at least stabilize within this calendar year and reverse its slide by some time next year.

The industrial score declined slightly, to 52 from 56 last quarter, still within yellow territory. The biggest culprit was rising vacancy rates. Nationally, vacancy increased to 10.2% in the first quarter of 2002, up from 9.7% last quarter and 7.2% a year ago and well above the long-term average for the product of approximately 8%. The trend of deteriorating vacancy was broadly based, as only three markets out of 51 saw vacancy improve year-over-year.


Vacancy still rising in the office real estate-
Vacancy rate rising in the industrial sector
Office and Industrial Real estate fragile-to-grim

No US Economic recovery in commercial real estate

The whole US and Global economy is fragile - it wouldn't take much to send it on a tailspin- and paper currencies will burn

How are you prepared?

Got gold?

misetichTrade deficit remains a ticking time bomb#8038307/11/02; 19:05:44|market|full report


3Q02 Earnings Outlook

Ominously, the estimates for 3Q02 appear to be moving into a free fall mode. From 1 April to 1 July, the expected earnings growth for 3Q02 over 3Q01 dropped from a 22.1% gain to a 17.0% gain, a decline of 5.1 percentage points. That is far more than the normal trimming for the three months before the start of a quarter. Worse yet, most of the drop came in the last few weeks of the period.

Adding to the deterioration in 3Q02 expectations is that another 0.5 percentage points was lopped off in the shortened first week of July. That included a drop of eight percentage points last week in expected tech sector earnings growth, but leaving tech sector earnings growth at a pie-in-the-sky 110%.

Four factors overhang the market and will continue to do so for some time.

1. High profile negative earnings pre-announcements in the tech sector giving further indications that 2H02 earnings are likely to be much less than analysts are currently anticipating.

2. Another escalation in the Israel/Palestinian conflict

3. Higher than expected trade deficit, sending the dollar to a 2-year


4. More congressional hearings on executive malfeasance, this time adding insider trading to the list. Also, announcement that Utah attorney general would be investigating analyst conflicts at Goldman Sachs (a la, the way NY AG did Merrill Lynch) and that other states would be assigned additional brokers.

Even though all the business scandals have pushed the trade deficit issue off center stage, it remains a ticking time bomb with the dollar likely to continue to weaken.


Trade deficit remains a ticking time bomb....

Got gold?

Black BladeJobless claims rise #8038407/11/02; 19:08:54

New claims for unemployment benefits again above benchmark 400,000 level; PPI gains.


NEW YORK (CNN/Money) - New jobless claims rose in the United States last week, the government said Thursday, as the labor market continued to show signs of a sluggish recovery. The Labor Department said the number of Americans filing new claims for unemployment benefits rose to 403,000 in the week ended July 6 from a revised 387,000 the prior week. It was the first week in six weeks that new claims were above 400,000, a level that points to a sluggish job market. Economists, on average, expected 390,000 new claims, according to

Black Blade: The "Bone Pile" grows again in spite of data massage at the BLS. Not a sign of a "recovering economy" as the financial media pundits would have us believe. Are you prepared if there were no work starting tomorrow? As always, get outta debt (and stay outta debt), stash cash for several months expenses, get Gold and Silver portfolio insurance, and start a nonperishable food and basic necessities program. At least you'll sleep a lot easier as the "Bone Pile" grows.

BoilermakerBarrick Hedges#8038507/11/02; 19:18:14

Here's a snippet of what Antal Fekete e-mailed to Ferdie Lips 11/3/2000 about Barrick's hedges and shows up in pages 162-167 of "Gold Wars".

"Barrick simply assumes that what goes up must come down. If the gold price goes up, say, $200 per ounce, then it is duty bound to come down at least that much in due course. Those with financial staying power, such as Barrick considers itself to possess in good measure, will be able to ride out any storm caused by temporary spikes in the gold price. They can roll over all futures contracts showing a loss, several times if necessary, until the gold price comes down again. Barrick and others will, therefore, always be able to close out their deals at a profit.

The truth remains, however, that all Barrick has accomplished is to have swept margin calls on its gold-borrowings under the rug, thereby concealing the potential liability from its shareholders and creditors. Therin lies the fraud, which SEC and other watchdog agencies of the US government should uncover and expose. Instead, they adopt the 'hear no evil, see no evil' attitude.

Barrick wasn't around in 1968. But suppose, for the sake of argument, that it was. Assume further that Barrick had sold borrowed gold at $38 per ounce (which may have appeared as an incredibly smart thing to do that year to the gold producers of the day). In that case Barrick would still be rolling over its gold loans in the forlorn hope that the price of gold will be good enough to drop below $38 per ounce, in order to enable Barrick to unwind its losing position with a profit. But in fact, after 1968, the year the US Treasury defaulted on its obligation to pay its creditors (foreign central banks with short-term dollar holdings) in gold at $35 per ounce as contracted, the price of gold took off never to come back again. Barrick could still be holding the bag of losses, and keep reporting huge profits, because the conspirator banks allow it to roll over its short position in gold at $38 per ounce. It may be pointed out that today the position of the US Treasury vis-a-vis its foreign central bank creditors is far inferior to its position in 1968.

It has happened any number of times in history that the gold price took off; never to come down to the level it has started from. For this reason, any accounting assumption that a commitment to deliver gold at a future date can be closed out profitably in the future (if only one is willing to wait long enough) is simply fraudulent. It should never be allowed in a society with self-respecting legislators making meaningful contract laws. And the fraud should be exposed by self-respecting accountants and other watchdogs of fair play"

Comment; Antal nails it. Barrick, its shareholders and creditors, are dead men walking.

Black BladeOuch! Investors Lost $2.4 Trillion in '02 #8038607/11/02; 19:39:52;jsessionid=YGGH2SM5JVMHACRBAE0CFFAKEEATGIWD?type=businessnews&StoryID=1191131


NEW YORK (Reuters) - A stock rout this year has erased $2.4 trillion in market value, representing almost one-quarter of the U.S. gross domestic product, as waves of accounting problems, executive skullduggery and profit warnings have pounded Wall Street's confidence.

Black Blade: Gone to "money heaven".

Black BladeRe: Boilermaker#8038707/11/02; 19:55:15

Exactly!!! The point is the "masters of the game" don't take on the risk, they pass it along to the "other guy". That is the nature of their business. Either Barrick will pay up with risk margin should gold prices rise, or some foolish insurer (or reinsurer) will bear the brunt of losses. I never ever heard of such an arrangement as some suggest between Barrick and their counter-parties where the borrower assumes literally "no risk".

- Black Blade

TrapperSir Hoople#8038807/11/02; 19:58:26

I must take some exception as to mining stocks. As for me personally I'm up 40% to 150%> I have bought many coins with the proceeds from those mines. I also enjoyed coming home from a long trip to find my dividend check from Gold Corp waiting to be cashed. I will call our host and try out their new service they are offering on "specials". History will show that Homestake did very well in 1930's. I would say most of here hold at least some stocks. It makes a good mix with some hard Ag, Au, and Pt. To each his own, or until America becomes Amerkia. Live small.

Black BladeWORLD BONDS-Outlook grim for bonds nearing junk status #8038907/11/02; 20:10:49


NEW YORK, July 10 (Reuters) - Warning: the line between junk and high-grade bonds is blurring, and if some economists are right, the trend could dampen the speed of the U.S. economy's current recovery. "Most economists are still kind of optimistic about the economy, but it throws a real fly in the ointment that investors are much more wary of anything Wall Street is telling them," said Peter Kretzmer, senior economist for Banc of America Securities. "This seems to be the headwind that is now facing the economy -- rather than a banking crisis or a savings and loan crisis like we had in the early '90s -- now it's this corporate-credibility issue."

Black Blade: Seriously, is anyone really surprised? Now that bond funds are willing to accept lower grade bonds as a matter of course, investors should beware that the safety nets are being removed. It looks worse day by day.

BTW, the national debt clock in New York has been turned back on. In my opinion it should never have been turned off because the national debt continued to grow in spite of absurd claims of a "surplus". Considering that now we are suffering in a period of corporate malfeasance and barraged by accounting scandals that permeate Wall Street, I am a bit squeamish when politicians claim to be on our side and that they will clean up the corruption on Wall Street when they themselves use even worse accounting standards and phoney baloney bookkeeping.

Gee, and I didn't even comment on international government loan defaults that are about to be coming to light. Hmmm...

Black BladeBracing for an earnings hit #8039007/11/02; 20:29:16

Expense options and disallow pension income and guess what earnings are? A lot lower.


NEW YORK (CNN/Money) - The earnings investors base their valuations on could be wildly overstated. As stocks have crumbled, a growing cadre of market watchers have begun to argue that shares have gotten downright cheap. "Look out above," was the title of the note Lehman Brothers strategist Jeff Applegate sent out Thursday morning. Later, Morgan Stanley global strategist Barton Biggs got on the squawk box saying it was time to buy. But while the benchmark S&P 500 might look cheap on, say, a price-to-earnings basis, the earnings part of that equation is dicey. Company results aren't nearly what they seem.

It's not just all the high-profile scandals. The way companies account for options will pad results by 10 percent this year according to one recent report while another suggests that the way companies run pension funds will inflate earnings by another 4.5 percent.

Black Blade: Amazingly, Barton Biggs came out and exclaimed that he is wildly bullish today. Shortly afterward the markets turned around from triple digit losses to end the session almost flat. I'm not impressed. We are entering "earnings season", and almost to each announcement is the tagline – "based on pro forma results". HUH!!! Here we go again, phoney baloney earnings and squirrelly accounting along with beating vastly lowered analysts "earning estimates". Funny how those "estimates" drop lower each quarter.

The markets are grossly overvalued - Go defensive!!!

Black BladeUncertain times boost top gold retailer's sales 3.17-fold#8039107/11/02; 21:50:52


Tanaka Kikinzoku Kogyo attributed the sharp increase to high levels of "cashability" during the period, meaning that gold was easily exchanged for cash, allied to the international marketability of gold ingots. "Gold ingots provide both high levels of cashability and international marketability at a time when the stock market is in the doldrums and interest rates are at ultra-low levels," an official of the firm explained. Purchasers stepped forward from across the social spectrum, with young people of both sexes joining their elderly counterparts to buy gold, the official said.

Black Blade: The smart Japanese will accumulate gold as the next "April Fools Day Surprise" approaches.

PizzR Powell#8039207/12/02; 00:04:23

Rich, about the 5.10 silver barrier. I think we're going to go thru it. Next day or two probably down into the high 4's as they run a few stop losses and then a push to 5.25 or higher mid to late next week.

I think we'll have a two or three day dead kitten bounce in the SM's to fight thru first. Tomorrow will be interesting. It appears a bunch of people will be going into the weekend long stocks, and with the world still a basket case, it's not the brightest move. Monday's could be real hell if the terrorists get frisky over a weekend.


My PM investments are long term, and I don't trade them based upon my thoughts and feelings, but I do have fun mentally playing the short term. If nothing else, when I'm right (about 55% of the time) it does make my day go a bit better. (smile)

Have a good one.


YGMHere's a great analyst I used to make money on long ago FWIW (HE'S STILL ONE OF THE BEST)#803937/12/02; 00:37:58

The last great mania

Posted: July 11, 2002
1:00 a.m. Eastern

DOUG CASEY.........
© 2002

Last week, I said the general public, innocent of any fundamental knowledge, will buy gold stocks the way they bought the Internet stocks, ultimately driving share prices to insane levels.

One reason I say that is because scores of millions of people were involved in the late mania in the stock market, and they still don't believe it's over. They're anxious to get into the next sector that looks hot. And they will move into mining; and the fact they have no understanding of economics, and even less of mining, won't put them off.

All they need to know is that the story tells well, and the sector is hot. And when they do move in, it's going to be like trying to siphon the contents of Hoover Dam through a garden hose. And that's not to even mention the institutions. They'll find it nearly impossible to buy the positions they'll have to. Stocks like Newmont, Harmony, Goldfields and Durban will tack on 10 percent and 20 percent a day. Their prices will cut through one new high after another, like a thermite torch through tissue paper.

In my view, many longtime gold bulls, who actually know the mining industry, are going to be left behind. The very fact they know all the things that can go wrong will work against them. They'll say (quite correctly) "A double is good. Make the money, take the money." Then they'll see the stock they sell … double, and redouble, and redouble again. They won't buy it back or get into others like it because they think in terms of value.


Black BladeDead Cat Bounce#803947/12/02; 01:36:54

Sharp rise in global markets (Asia and Europe). Hard to believe that this is due to Barton Biggs being "bullish" (per CNBC anchors Maria Bartiromo and Bob Pissani). Hmmm...

- Black Blade

Black BladeMixed Indicators#803957/12/02; 01:55:02

Gold is off $1.20, USD is higher, Oil is higher, and market indices are higher. There is no positive markets news so this could still get quite "entertaining" when Wall Street opens for trading.

- Black Blade

steadyworld startegy#803967/12/02; 02:42:00

is tomorrow option experation day on comex? doesnt gold usually get hammered down on those days.
need a way to make the manipulation more blatent right out there for everyone who is suspecting it ? how about this then!

U.S. Special Forces Base Attacked in Afghanistan
Fri Jul 12, 3:18 AM ET

BAGRAM AIR BASE, Afghanistan, July 12 (Reuters) - A compound being used by U.S. special forces in central Afghanistan ( news - web sites) was attacked with small arms, U.S. officials said on Friday.

Black BladeForget Enron - Congress is even worse #803977/12/02; 02:49:51


As members of Congress make political hay with corporate America's accounting scandals, their own financial mismanagement continues to dwarf those companies they excoriate. While securities regulation and criminal justice bring corporate culprits to justice (raising the question of whether more laws are really necessary), Congress violates its own management rules and standards on a daily basis. While states prohibit private sector firms from siphoning off pension trust funds for non-pension spending, there is no such restriction at the federal level. In fiscal 2000 and 2001, the federal government increased total debt to another record high while claiming a surplus. They took Social Security and other trust fund money worth $189 billion in 1998 and $228 billion in 1999 to cover general government operational deficit spending. For 2000 and 2001, they stole another $463 billion from the various trust funds, of which $272 billion came from Social Security.

Black Blade: Ditto that! The article has quite a litany of government malfeasance. The cockroaches aren't all in the boardrooms across America, they are in the halls of Congress too.

misetichHomes, Gold Attract Investors as Alternative to Stock #803987/12/02; 04:13:02


Washington, July 12 (Bloomberg) -- Falling stock prices, investigations of corporate deceit, and money-market funds that yield little more than inflation have pushed investors to real estate and precious metals as a shelter for their cash.

U.S. homebuyers are increasing down payments as a share of property values, and consumers are becoming reacquainted with gold pieces such as American Eagles and Krugerrands. Bullion has won converts among younger Japanese investors, even as the government is trying to entice them into bonds with ads by a movie star.

More Americans are seeking the comfort of precious metals as well. This week, a banker bought 1,524 one-ounce American Gold Eagle coins, worth about $500,000, says Michael Kramer, head trader at Manfra Tordella & Brookes Inc., a metals dealer in New York.

First Profit in Years

``One guy is buying 200 to 300 ounces of gold a week,'' Kramer says. Many people started picking up bullion at below $300 per ounce earlier this year, he says, so ``it is the first time in years that somebody has been able to have a profit.''

At FH Coins & Collectibles, a dusty, standing-room-only shop crammed with old porcelain and crystal as well as coins on New York's Upper East Side, owner David Heller says people are calling up or walking in off the street three out of five days a week and asking how to buy gold. Usually, he sells them American Eagle, Canada Maple Leaf, or South African Krugerrand coins.

``A year ago, you couldn't give it away,'' he says. Gold, which doesn't pay dividends, was trading below $300 an ounce and ``you couldn't interest anybody in buying.''

Demand at his shop now is almost as strong as it was in 1999, when investors hoarded gold on fears that the arrival of Jan. 1, 2000 would cause computers to malfunction and throw business into chaos. ``With everything going on in the economy, people want something substantial,'' he says.

Gold Highest Since 1997

Gold for August delivery rose June 4 to $328.80 an ounce, the highest closing price for the metal since October 1997. Back then, stocks had tumbled in reaction to a slump in Asian economies. Last month, investors were concerned that India and Pakistan were going to war. A year ago, gold fetched $266.

Few analysts expect gold, trading at more than $310 since mid- May, to exceed $400 an ounce this year. In London, gold recently traded at $316.85. Sales of jewelry, the largest consumer, have declined. And central banks, which hold about one-fourth of above- ground reserves, continue to sell.

The gold market, ``has an 800-pound gorilla in it and that is the world central banks,'' says Joseph Haubrich, an economist at the Fed Bank of Cleveland. Holdings have declined from an estimated 45.8 percent of total government reserves in 1985 to an estimated 12.2 percent in 2001.

``People just don't have any place to put their money,'' says Hitoshi Kosai, general manager at the precious metals division of Tanaka Kikinzoku Kogyo, the country's largest bullion dealer. Japanese started buying bullion after Sept. 11, and haven't stopped, Kosai said.

``This is the longest streak for a gold boom in Japan,'' he says. ``Usually, they end after a month.''

Japanese investments in gold bullion and coins rose to 47.5 tons, or about $487 million, in the first quarter, almost a fourfold increase from a year earlier, says the World Gold Council, a Geneva-based trade group.

In the U.S., homes continue to trump gold and other precious metals as the investment of choice for those diversifying into tangible assets.

Typically, homes and precious metals are snapped up in inflationary times because they hold their value. Indeed, gold reached a high of $834 an ounce in January 1980 after a year in which U.S. consumer prices rose 13.3 percent. By comparison, U.S. consumer prices were up 1.2 percent in May from a year earlier. Low inflation is also a reason why U.S. Treasury securities remain a popular haven for cash.

Gold-stock funds in the U.S. received $760 million in new cash in the first five months of the year, representing a 39.4 percent rise over year-end asset levels for those funds, according to Lipper Inc., a mutual fund analysis firm.

Demand for gold bullion and coins in the U.S. was 2.8 tons, or approximately $28.7 million, in the first quarter, according to the World Gold Council, a rise of 13 percent over the first quarter of 2001.


Japan had a stock bubble followed by a housing bubble - followed by debt deflation
The US is following the same pattern. The 800 lb Gorilla, was a featherweight when gold prices rocketed from $35 an oz to over $850
CB's are considerably WEAKER now - though - they have substituted Real Physical with a Paper Derivative Avalanche -
Paper burns - It is a question of when not IF

Got gold?

misetichMorgan Stanley research probed by NY Attorney Gen.#803997/12/02; 04:30:00


NEW YORK, July 12 (Reuters) - Morgan Stanley (nyse: MWD - news - people) has received requests from the New York attorney general's office for documents and information relating to its analyst research reports, according to a filing with the Securities and Exchange Commission on Thursday.

Morgan Stanley, in filing its financial report for the quarter ended May, said that it "has continued to receive and respond to requests for documents and information from the New York state attorney general in connection with his investigation of the company's research analyst practices."

The securities firm added it had also "received and is responding to subpoenas and requests for documents and information in parallel industrywide investigations being conducted by other governmental and regulatory agencies," including the Securities and Exchange Commission, the regulatory unit of the National Association of Securities Dealers, the New York Stock Exchange and the U.S. attorney's office for Manhattan.


ANOTHER slap on the wrist coming up - though investor confidence will suffer - but who cares - they're already billionaires - as the STING is over

Got gold?

misetichSenate Rejects Listing Of Stock Options as A Corporate Expense #804007/12/02; 05:50:05


By Helen Dewar and David S. Hilzenrath
Washington Post Staff Writers
Friday, July 12, 2002; Page A01

Senate Democrats yesterday blocked a proposal that would have changed the way companies account for stock options, an initiative vehemently opposed by high-tech companies that have used such grants to award billions of dollars in compensation to their executives and employees.

Sen. John McCain (R-Ariz.) tried unsuccessfully to attach to a broader corporate accountability bill a requirement that companies subtract the cost of stock option grants from their reported profits. But the Democratic leadership prevented McCain's amendment from reaching a vote.

"The fix is in," said McCain, vowing to try to force a vote on the measure in the future. McCain's proposal faced bipartisan resistance in the Senate.

Majority Leader Thomas A. Daschle (D-S.D.) said he had misgivings about a "one-size-fits-all" formula for dealing with stock options, suggesting instead that the bill require the Securities and Exchange Commission and a proposed accounting oversight board to come up with regulations on the issue.



What a farce! Interesting choice of words from McCain "The Fix is in!"

Got gold?

misetichCritics Call For Chavez To Give Up Presidency #804017/12/02; 06:03:14

The march took place two days after former president Jimmy Carter failed to bring together Chavez and opposition leaders for talks aimed at achieving a measure of political reconciliation. Despite urging from U.S. diplomats, who signaled beforehand that Carter represented perhaps the last hope to avert another coup, the opposition refused his invitation to meet with Chavez and begin a "national dialogue" to open up his leftist government to a wider range of views.


Oil - Oil - Oil
The Washington Post has four stories (Associated Press) "covering" the Venezuela situation

Chavez is a thorn on somebody's side

Got gold?

USAGOLD / Centennial Precious Metals, Inc.Put a Foundation Under Your Portfolio#804027/12/02; 06:11:59

gold sovereigns
Gold Today!

Because you never know what tomorrow will bring.

In this global marketplace, a single event on the far side of the world can suddenly and adversely affect the performance-credibility value of the commercial positions within your investment portfolio.

Gold has no employees, no overhead, and no financial statement to balance. It cannot go bankrupt. Gold is wealth itself. It is valued worldwide on the basis of its uniquely reliable form and function -- a steadfast financial commodity which is immune to the contagious collapses to which all financial paper is prone.

In the final analysis -- in times of stress -- paper is only paper.

How solid is your portfolio?

The HoopleBlinker light red day#8040307/12/02; 08:06:25

Notice HD at $29 , DUK at $25 ? Awful stuff is getting priced into these companies. Housing and utilities next on the hit list of scandal and fraud? Surely not. Sitting here in my office with Marketalk, aka George Cooper. These guys will fly 1,300 miles to personally take your pm order! MK: can I deduct the speeding ticket I got going to the airport to get him from my next order?

When the stock market declines, it's traditional for investors to turn to gold and the bond market, particularly federal Treasury securities in all their many flavors. Some may go for "munies" or real estate, but by far it's the U.S. Treasury's securities that gain the most.

What's more, there are other reasons the government might want to take investor dollars away from the stock market. These reasons have to do with the way that the government sells its securities.

Just consider it as a possible reason for clamping down on private companies that don't begin to commit the kind of fraud and deception our government commits. Run the competition in the ground and you've got the investor market almost to yourself.

I don't put anything beyond the Beltway Bandits.


What a gas, the possibility of the Government and Wall Street fighting over capital flows. Intentionally Crash the markets forcing investors to flee into Treasuries. Maybe the Fall Street crooks have been bested by the bureaucrats (LOL).

This could prove interesting if true!

Carl HJuniors by cash cost?#8040507/12/02; 08:48:17

Has anyone seen a list of juniors by cash cost?

Alternatively, does anyone know of a junior with cash cost between $325-$350?


luckypierreOur Founders sacrifices debunked?#8040607/12/02; 09:34:31

Last week, someone posted a message stating that the article on the sacrifices the signers of the Declaration of Independence had been debunked. Could whoever posted that message please provide a pointer to the counter information? I would like to send it to some friends. Thanks.


PizzCarl H#8040707/12/02; 09:44:51

Junior with cash costs around 350?

I only know of 1, BENGB, it's a Phillipine company that is not mining right now because of low gold prices. Read a report few years back that said their costs were somewhere around 350. They have lots of properties, but the company has had a bit of trouble over the years. Corrupt government, secondaries with questionable claims to ownership, and they're losing money right now trying to be a natural resource company. The only positives are that they've been around 100+ years and their stock is cheap.

Due your own due dilligence, this one is speculative as heck. I also own a little bit of it, but I don't think anyone could say the above represents any kind of recomendation.


R PowellPizz#8040807/12/02; 10:07:12

Thanks for the thoughts (80392). My metal investments are likewise long term but a part of them are options which, as time wasting assets, need periodic rolling over.
Basically, I'm taking a little profit when possible and reinvesting on the dips. If I catch it right, I can both increase my position and buy more time. If not, well...
This is not a great investment and profit is not necessary to pay any bills but money on the table certainly helps to focus my attention. I do love watching this great game, commodities, SM, the politics of Wall Street, etc.
One huge global puzzle. Thanks

UlyssesCarl H#8040907/12/02; 10:08:17

Check out US Gold-USGL. They have a recent story out.
PizzR Powell#8041007/12/02; 10:25:48

Rich, reading your posts is almost looking in a mirror.

My nemisis over the years has been Index options. Still fighting the emotions - especially during options expiration week when I'm playing the in the money's and they're fluctuating 10 points every 30 minutes. Also, at my age it tends to make me feel a bit alive. Pushin numbers for a bunch of questionable businessmen can be a bit of a drag on the mind, gotta have some fun in life cause my golf game sucks.

I don't consider myself a trader, but I do dabble every once in a while. Like my wife says, at least with my hobby I have a chance to make a buck or two, rather than a bunch of depreciating toys (cars, bikes, boats, etc.) Probably go to my grave still thinking I can nip a few bucks off the big boys, but if I don't, at least I tried, and no one gets hurt cept me.


RockCongress worst than Enron? How can that be?#8041107/12/02; 10:39:32

Welcome to the round table discussions where the unlearned
become the learned.

Great insight Blackblade pointing out the various places those cock roaches lurk including the halls of Congress.
All I can say is it almost makes me sick to see all this white collar robbery going on, brings me to the question, who can you trust?

At least gold in hand is something no one can minipulate or steal and no matter how many big corporate scandles may be happening at least those individuals with physical gold in their possession know how financially secure they feel because the big CEO's can't rob them. Thats one of the reasons I love ownership of PM's.

Have a great day all, thanks for the data, I
read here daily but once in a while I do have to respond out of kindness or respect or maybe both for all the things I have been taught here deserves some sort of recongition.


sectorDeficit Estimate Goes Up Again#8041207/12/02; 10:57:34

White House Maintains It Will Shrink Next Year

By Jonathan Weisman
Washington Post Staff Writer
Friday, July 12, 2002; Page E01

The White House plans to release new budget deficit projections today that will show the federal government to be as much as $150 billion in the red this fiscal year, according to congressional budget experts.

But the Office of Management and Budget also is expected to predict a smaller budget deficit for the next fiscal yea