USAGOLD Gold Discussion Forum Archive

Electronic reproduction sourced from
Black Blade12 SARS Patients Report Relapses#10218605/01/03; 00:04:57


HONG KONG, April 30 — Local health officials said here tonight that a dozen patients who had seemed to recover from SARS became ill again after leaving the hospital. In some cases, the illness returned more than two weeks after discharge, according to a medical expert here who refused to be quoted by name. It is not clear whether the patients contracted the infection a second time, or simply became ill with the same virus after seeming to recover. Six of the patients are still hospitalized, their condition described as "stable and good" by the Hong Kong Hospital Authority, while the rest have been discharged for a second time. But the relapses, the first reported since the epidemic broke out in China last fall, raise unsettling questions on the disease, about which much is still unknown. The relapses may mean that patients can still transmit SARS even when they are no longer thought to be infectious. If so, that raises the possibility that transmission might recur in countries where officials have said the outbreak is over.

Black Blade: This isn't good.

BTW, I just noticed that the USD went sub 97!

WaveriderSir Gandalf#1021875/1/03; 00:30:32

Let's try this Gandalf as a new student of TA...

1. EMA - Exponential Moving Average
The moving average shows the underlying trend of the POG. Here we have the short-term average POG over 10 days at $333.59 (blue line), and the long-term average POG over 50 days at $336.50 (red line). The short term EMA is on an upward slope and about to break the long term EMA, establishing a reversal pattern. This would suggest that a sizable price increase is imminent.

2. Slow STO - Slow Stochastic
The stochastic is an oscillator that looks at he current POG as a percentage of the past few days trading range. The Fast STO is the average of the last three raw STOs. The Slow STO is a 3 day average of the Fast STO. It appears that the Fast STO (black line) is moving above the Slow STO (red line) and both have just broken 80. This suggests positive price movements.

3. MACD - Moving Average Convergence/Divergence
MACD looks at the difference between the short, more volatile moving average and the long term less volative moving average. It looks like both of these are plotted. These are both trending upward and the short term (black line) is about to break above O - VERY bullish for POG.

In a nutshell...Gold MOAB - mother of all Gold bull markets. Please clarify or correct anything in my crash TA exercise! Cheers and bonsoir,


The Invisible HandOn a lighter note – the bull market is alive and well#1021885/1/03; 00:44:57

Bordello shares in high demand
"Obviously the price is going to go up," said Hollywood madam Heidi Fleiss, hired by the brothel to boost its publicity. "It's sex, and everyone knows sex is a smart investment."
When will others say "It's gold, and everyone knows gold is a smart investment."?

Black BladeEuro at Four-Year Dollar High#1021895/1/03; 01:06:29


SINGAPORE (Reuters) - The euro hit a fresh four-year high against the dollar on Thursday as doubts lingered over the U.S. economic outlook, while oil prices rose after OPEC said it might intervene to stop a steep slide. Shares gained in Japan and held steady in Australia as most Asian markets stayed shut for the Labor Day holiday. Gold climbed to a six-week high on the weaker dollar. Currency dealers said the murky U.S. economic outlook was prompting investors to diversify their assets and seek higher yields, such as euro deposits. That drove the euro to a four-year high of $1.1198, dealers said.

Black Blade: Now Euroland markets are open.

skiSilver and Gold move of 4-30-03???#1021905/1/03; 01:30:03

On 4-30-03, both silver and gold put in nice moves. However did anyone notice "where on earth" did the moves originate?

Price movement ALMOST ALWAYS originates in the New York market. However, on 4-30-03, the POS & POG made their biggest gains in the London market. Unusual things get my attention.

Ideas anyone?? What might be up??

TopazWho's moving PoG? @ski#1021915/1/03; 03:56:02

The headline brief of the ECB is to tame inflation...and one assumes disinflation also.
If E/PoG is in decline (disinflation) as we are seeing, (have been seeing) is it not reasonable to expect the ECB to purchase Gold with Euro...raising the E/PoG (to it's equilibrium E320) and in the process negating the "flation"?
$PoG may well be at the mercy of E/PoG from here on out...I expected a parity play ..the spike on MondayNY was a last ditch effort I feel.

TopazBonds and Gold.#1021925/1/03; 04:53:47

Defying all expert opinion 30 Yr T's moved lower yesterday "into the RED Zone" @ 4.76%. The short end of the curve is almost down to 1%.
IF they last till next week there may be some respite with a swaith of new Debt including the new 3 Yr...Big If imo.
Gold (the index proxy) is indicating a weaker $ and as such a nett Zero Yield moves further above 0.

silvercollectorsundeck et al#1021935/1/03; 05:07:33

Excellent work.

I going to quote parts of your post then piece it together so I may ask the BIG question.

"The linear fit to the scatter plot mentioned below is for the last couple of years (from data on INO). One can fit lines to similar scatter plots compiled for earlier periods, but the slopes are different indicating different "apparent" relationships between USDX and POG over those times"

Perfect, confirming my belief of a linear relationship in the recent past (couple years), confirming Belgium's satement of gold at $850 in 1980(different slope) and confirming miner49er's post that 'overall' no USD/POG 'mathematical' relationship.

"Many factors are involved. "


" ...there is no physical underpinning of the linear relationship is just an empirical fit to the data since 2001."

BINGO!! The linear relationship since 2001 is an "empirical fit" What a wonderful (horrid) phrase. On a off-topic note, I wonder if the invasion of Iraq falls into the "empirical fit" category!!

I posted the "empirical"/linear fit the other day; here's another look removing the war spike, speculating a few months out and speculating the current USD/POG breakdown:

Date.....Dollar Index.......Gold

May (2002)...114............310

Note the "empirical" fit until July and finally we get liftoff. The numbers and timing following post-July are simply plugged in for effect, of course they represent not any probability.

So without any further rant.......the question.

When do we breakout from this monotonous and torturous
P = -4.35 x D + 782?

(P.S.: How in god's green earth did you come up with that formula? Thanks again, superb observation!)


silvercollectorsundeck#1021945/1/03; 05:26:52

I'm playing around with POG = -4.15 x USD + 782 and it's creating a 'wide' divergence, probably the multiple of 4 causing this. (big slope)

I'm getting closer results w/ P=-2D + 534


silvercollectorsundeck#1021955/1/03; 05:35:09

I'm playing around with POG = -4.15 x USD + 782 and it's creating a 'wide' divergence, probably the multiple of 4 causing this. (big slope)

I'm getting closer results w/ P=-2D + 534


Belgian@ Silvercollector#1021965/1/03; 06:02:37

At sharelynx, you can find a treasure on charts !
LT (up to 600 yrs) charts in historical charts/data.
Compare 1985 dollarindex/POG with 2003. Miner49er and Ari's theories confirmed/evidenced.

All : Isn't it a bit bizar that B.Godsell (Anglogold) is so certain about a continious strong rand (inside information)?

Will the Swiss CB-gold, swing producer, be unhappy with restraining its 1 tonne a day sales and start selling the remainder in 2004...2005...3000 AT MUCH HIGHER PRICES ?

Has anyone yet come up with an explanation why the CBs goldsellers, are not selling goldcoins with a hefty premium to their citizens ?

Can the growing international boycott of the dollar be reversed ?

SundeckSilvercollector - USDX/POG relationship#10219705/01/03; 07:14:46

Hi Silvercollector,

What I did was:

1. Refer to the INO "Max" charts of POG and USDX. These provide data back to mid 2001.

2. Compile a table of POG and corresponding USDX. The grid lines on the INO Max charts are at 3-month intervals, so samples at one-and-a-half-month intervals is convenient. This gives about 17 number pairs. I took an "eyeball" average over a few days around each sample point to smooth the data a bit.

3. Use the table to make a "scatter plot" of POG (vertical axis) versus corresponding USDX (horizontal axis). This results in 17 points. They do not fall on a straight line, but are "scattered" in an elongated pattern from the upper left to the lower right.

4. Fit a straight line, by eye, to the points. Ideally one would do a "least-squares" fit, but that is probably overkill.

5. Derive the equation of the line. I got:

P = -4.35 x D + 782

as an approximate line of best fit to the points.

6. Do a couple of test points to see if things seem to be roughly correct.

a) When USDX was 118, POG = 269 (compare, for example, Jul 2001)

b) When USDX was 100, POG = 347 (compare, for example, Mar 2003)


You ask when do we break out from this "monotonous and torturous" relationship? It is impossible to say. However, IF this trend between the USDX and the POG holds until the USDX is around 70, say, then we should see POG around $480. But then many things may happen along the way - short-covering spikes, herd stampeding into gold, Fort Knox getting nuked (unless James Bond prevents it in the nick of time)...who knows?


You refer to "empirical". This is the term used to describe a mathematical model that is made to fit a set of observational data, without any understanding of why the data are as they are. In other words, and in the present context, I have not derived the above equation from fundamental considerations (like the supply and demand of gold, the number and magnitude of gold transactions, psychological models of trader mentality, the number of convolutions in the large intestine of the great albino bat, etc, etc) ( Apologies to Lothar ;-) )


Hope this helps



Clink!@Sundeck#10219805/01/03; 07:30:39

Great albino bat intestines ? Does that work like the Rhode Island rooster that has been suggested here (by BB, as I recall) ?


SundeckClink! - Bat versus Rooster#10219905/01/03; 07:47:56


I am not aware of any studies that have compared the predictive powers of Rhode Island rooster entrails with those of the Great Albino bat.

My gut feeling is that they would both yield similar results.

A test of this might be a worthy Masters project for a bright young financial analyst. I am sure a suitable candidate could be readily located in the bowels of Wall St.



SundeckGo spot#10220005/01/03; 07:54:41

Shhhh...nobody say anything, but Spot and Spike are on the loose...
White RoseIt now takes more than $1.12 for a Euro#10220105/01/03; 08:10:22

Dollar still dropping
ZhishengMay Day! May Day!#10220205/01/03; 08:13:43

SOS from the HMS Manipulation!
silvercollectorSundeck#10220305/01/03; 08:15:44


The journey to D-index 70 and POG 480 would be BEYOND "monotonous and torturous". I have a gut feeling POG will bust loose if and when we approach 90. John Ing is calling for $529 by year end. I like Topaz's call that the bond market may pop before gold.

The ice is getting precariously thin!!

Have a golden day. Thanks for the notes (and help rescuing my floundering 'linear' messages)


Eleanor of Aquitainevolatility#10220405/01/03; 08:23:30

stupid question for those of you with more experience than me: As gold rises up a wall, will there be down spikes in price, for example every two months or so, so that one might sell on an uptick and then buy on on a lower tick?
silvercollectorLast question for the monetary gurus#10220505/01/03; 08:26:31

If the USD continues to fall as many expect (many say below 90) does this:

a)allow the PTB opportunity to stabilize deficits, bond markets etc. and bring back equilibrium to monetary matters


b)precipatate further downward spirals and a self-feeding problem (frenzy) that complicates issues even more.


SundeckEleanor of Aquitaine - The Sinclair Strategy#10220605/01/03; 08:35:57

Greetings EoA

Yes...there will certainly be hills and hollows along the way. I understand that Sinclair recommends selling one third of ones position into the rising trend and buying back as price falls.

Only problem is that "bells do not ring at the peaks and troughs". Noone can judge the timing or magnitude of local price maxima and local price minima.

Doesn't matter that much in a secular bull market... but extended downturns can be very in Feb this year. Investing is a very personal thing...everyone has different pain thresholds.

It is harder to win a King's Ransom than to surrender it...

FWIW and IMO only....



CamelFinal straw#10220705/01/03; 08:55:32

It has been observed that the total value of all the above ground gold at today's dollar price is about 1.1 trillion , so for gold to double from here presumably another 1.1 trillion would have to move into gold. It has also been observed that the total amount of dollar reserves held by foreign entities is about 3.2 trillion, so if 1/3 of these assets went into gold, its price would double.

If there were such a shift out of the dollar (US stocks ,bonds and cash) much of this would move into the euro, which theoretically would also benifit gold as the Europeans are obliged to keep 15% of their reserves in gold.. We know that the ECB will mark to market its gold reserves, but for the price of gold to rise Europe must be a buyer so as to keep the correct reserve ratio.

There seems to ba little schizophrenia concerning the dollar . Some say that the dollar musrt be preserved at all costs , hence the semi-official supression of gold however this dollar weakness would be the effect (not the cause) of foreign liquidation of US stocks , bonds and cash.

On the other hand there are groups such as the US Association of Manufacturers that are activly lobbying for a weaker dollar so as to make US products more competitive . Returning the dollar to levals seen in the 1980s would restore profitabily to US companies and start a new cycle of increasing stock valuations. Hardly the end of the world.

It is only the foreign sales of dollar denominated assets that would effect the value of the dollar . The US stock market could rise from domestic money flows while the dollar still declines as foreign governments and corporations shift assets to the euro..

The final straw for the dollar, would certainly be a shift in the oil pricing mechanism,as was predicted by Another /FOA so long ago.All the producing countries are studing this issue, as so much of world trade and oil demand originates in Europe it is only natural that this trade be conducted in euros rather than the dollar.There is nothing a malevolent in these actions 'simply that a country doing business with Europe would want to hold the European currency to accomodate their trading partner .

There is a danger that the dollar could collapse to levals far below the historical norms,as the big float comes home like" wet snow on the roof" yet as we have seen with Japan and more recently Germany a stronger currency is the kiss of death for these countries cutting into exports and dampening the profitability of their corporations.

Now with all the "new friends" the US has made because of the Iraq war there is considerably less good will that might mitigate these trends.

Looming over it all is the impending peak in oil production, now probably delayed another 5 years untill 2012 ,as the big oil companies put more straws in the ground in Iraq for a quick fix but hasten the rate of depletion of Iraqs reserves. Finnally all countries will have to print money to buy oil, and gold will be set free.

adminMKs Gold Commentary & Review#10220805/01/03; 09:40:00


New QuickNotes

What is "Financial Wilsonianism?"

" In the back of many traders minds has to be the CPM annual assessment of gold's prospects which quantified the greatest single year demand for gold since 1967.......... Deja Vu?? I recall that those were times when we had similar problems with the transatlantic alliance. The Europeans, led by the French, German and Dutch, began bleeding the US Treasury of physical gold; dollar superiority was challenged; and, the US newspapers began carrying reports from a far-off jungle war across the Pacific in a place called Viet Nam....."

Tune in.

Buena FeTOPAZ#10220905/01/03; 10:38:00

possible T-Bond reversal today?!

enjoy your postulations, i agree that this is a very strategic market to watch to gain insight into things golden

Alaskan hunterlast straw#10221005/01/03; 11:19:06

Hi Camel.

I have to comment on your presumption that if the amount of money that was invested in gold doubled then the price would double. This is just plain wrong. Markets are not linear. For example, at the top of the bubble US Equities had a market cap of around 15 trillion; now, it is closer to 7 (I've no idea of actual numbers and they are not important for my example). Anyway, I'm sure that there hasn't been 7 trillion dollars "taken out" of the market. What has happened is that 7 trillion dollars of "perceived wealth" has disappeared.

In all markets, the total amount of money buying must match the total amount of money selling (because a buyer must match a seller dollar for dollar (less a small part in commission)). Therefore, there is not 1.1 trillion dollars in gold; there is 1.1 perceived dollars in gold; a major distinction.

If all of the banks collapsed tomorrow, gold could go up dramatically without a single purchase because no one would be willing to sell. It could also drop dramtically as people without cash might want to sell their gold to raise cash. Obviously, the latter scenario is not what I'm betting on as a holder of Physical metal.

That's it for my thoughts.

Have a nice day, -Ron

KiloCamel..... Exponential Rises in Valuations#10221105/01/03; 12:50:27

Hello Camel,

To add a few thoughts to those of Alaskan Hunter, it's important to remember that you never place "money" into any market. It simply flows through the markets. Take for example the stock market. If you were to invest one million dollars in the market, that money would flow through rather than remaining. The cash would simply go to the party selling the stocks to you, and presumeably be used (or at least available for use) elsewhere. It is not "in the market" in the technical sense.

Lets assume for a minute that the figure of 1.1 trillion dollars valuation of above ground gold is an absolute dollar value of every last gram. It would be an impossibility to put 1.1 trillion dollars on the table and buy every gram of above ground gold at current valuation at any given point in time. Even supposing you could, again that "money" in the form of payment on the gold would not go "into" the market, but would simply provide a shift in cash liquidity from you to the person(s) selling you all of the gold. The simple act of buying the gold would not necessarily change the dollar, yen, euro, etc. value of that gold. It's the shift in the supply (all yours) vs. demand (nobody else has any) fundamentals that would cause the gold to rise in value against any specific currency or fiat. If by chance you could "buy it all", then the "fiat value" would be any number you wished to assign to it. A total monopoly if you will.

Here is another good analogy of the perceived "value" of gold vs. money moving through the respective markets. In late 1979 and into early 1980, a South African Krugerrand would have cost you in the range of $700 to $900 during the heat of the all-time top of the gold market. But we can easily buy 1979 or 1980 dated Krugerrands at today's market in the range of $340 to $360, depending on the premiums involved. These coins were "worth" 700-900 dollars at one time, but are now only "worth" 340-360 dollars, a good example of perceived value over time. In mid-1999, these same coins could be had for $260 apiece or less. Much like the stock market, "perceived fiat valuations" expand and contract right along with the ebb and flow of supply-demand fundamentals. The gold market, as all other markets, are ever-changing with winners on the up side and losers on the down side. Thats just a matter of how all markets operate.

As long as there are markets for anything, those markets (for the most part) are always priced correctly at any particular moment. This is simply a matter of sellers willing to sell at a given level and buyers willing to buy at that same level. If both sides do not agree, there is no trade, and in a technical sense, no valuation level in the form of fiat. Sellers unwilling to sell for less, and buyers unwilling to pay more come to the point of settlement on the "correct price" for the particular market at any particular time.

With all of the talk of manipulation of the gold markets since circa 1995, doesn't it all basically boil down to supplies being provided above and beyond demand, and thus a lower overall "perceived" value of an ounce of gold ?

Economics in general can best be thought of as a balancing act. Always an equal buyer to offset any seller, and visa versa. Perceived value in the form of fiat is just that..... a perception. "The money (fiat) is not here" as the old saying goes. It was just a tool to perform the transfer, and is still in "circulation" via the party receiving it in payment. The seller becomes the owner of the property (stock, gold, silver, etc) while the seller, taking in the currency becomes nothing more than another creditor, depending on the stability of the fiat he has received to remain desirable to the next person selling to him what he wants in the next deal...... kind of a shuffling of the "debt" chairs on a sinking Titanic.

Gold is always one of the best life rafts.

TownCrierThis is too good to last#10221205/01/03; 12:57:12

Three special coins from Hamburg and Prussia.

Jonathan outdid himself patching together this offer of a small assortment of German gold coins. I have a feeling that these fantastic Hamburg coins might not last to the weekend so dive right in and don't worry about acing me out -- I already bought my share as soon as JK told me about the coins. And to ensure I had no regrets later, I got the Prussian ones, too.

In order to give more people a chance to own these beauties, the good folks at Centennial have decided to limit the total number that any one person can buy from this latest Buyers' Group offer. Act quickly to pick up the phone and claim the ones you want. You'll be smiling and everyone around you will wonder what you have up your sleeve.

"Must be a peach of a hand." --Doc Holliday, Tombstone

Thanks for your support of USAGOLD-Centennial Precious Metals.


BelgianThe Price of Gold !#10221305/01/03; 13:38:39

LBMA, COMEX, TOCOM trade the equivalent of 600 tonnes of Gold in papergold contracts. That is the visible part (since 1997) of daily paper-goldtrade . It is widely recognized and accepted that the "real" trade (visible + unvisible) is 5 times as much = 2,500 à 3,000 tonnes (paper)
If one percent (1%) of this volume wants delivery in have a price explosion, since offer of new gold is 10 tonnes per day.

When, in theory, nobody wants to sell a gram of Gold, any bidder for physical Gold can drive POG up infinitely with one dollar, until the first seller agrees on a settlement price. Reverse is true for a no-buyers market.

Point is...there are still many, many Goldphiles out there...but they, almost all, became papergold addicts !
As much papergold per day (2,500 tonnes) as a year's total goldmine production !!!

If I would have the intention to become the absolute Gold-ruler...I would create the perfect environment for the destruction of that papergold-market (LBMA/COMEX/TOCOM).
Simply by reducing the Physical goldtrade to an absolute minimum (gold-industry) and maximizing the currencies-Gold hedging (insurance) game. Masses of paper-gold-contracts trade as to let the currency holders feel save and complacent with their confetti. I would pick up all the available physical Gold and exhaust that physical availability with another trick like goldmine forward sales of underground gold (3,000 tonnes). All the time, carefully watching that POG fluctuates less and less as to slowly make those currency gamblers/holders that hedging their positions with papergold gets unprofitable...less and less possible.

This can only become a succesfull strategy when one is absolutely sure that the dollar-reserve will be challenged up until that dollar reserve gives up and throws the towel into the ring.

This is what the euro (euro-concept) has been planning.
It is against this background that I see the euro-dollar exchange rate rising whilst POG is as contained as possible and papergold is declining and the chase for physical gold is rising (CPM figures).
Is the strengthening rand suspecting this ? Does the rand, srengthening against the dollar AND the euro, signaling a possible POG explosion ???

I was simply speculating a bit.

TownCrierFed adds $7.75 billion to banking system today#10221405/01/03; 15:13:17

$4 billion through open market operations with 28-day repurchase agreements, $3.75 billion through overnight repos.

... no "meaningful limit" to this power to add...


Black BladeDollar Falls Against Rivals As Poor Economic Reports Spur Worldwide Flight From U.S. Currency #10221505/01/03; 16:02:03


NEW YORK (AP) -- The dollar took a beating for the second straight day on Thursday, dropping against its widely traded rivals as poor economic data and a host of longer-term weights again spurred a worldwide flight from the U.S. currency. The euro climbed to fresh four-year highs, while the Canadian dollar respectively hit a new five-year peak as investors courted better yields abroad. Should the U.S. employment report for April, set for release Friday morning, prove disappointing to markets, the dollar could face a third consecutive session of multiyear lows, analysts said.

Black Blade: I suspect an ugly April jobs data report tomorrow morning. Of course the carnival barkers on CNBC will make stupid comments like "it's a lagging indicator". However, after about three years of "lagging" with no end in sight, we should see a negative reaction on Wall Street should the numbers look "grim". That said, it should get "interesting" when Treasury floats an additional $67 billion in bonds next week(?).

R PowellCytek // Invisible Hand// sector#10221605/01/03; 16:35:56

Cytek, you asked yesterday....

"I have been on vacation for two weeks and notice that now Sir Sector has made his last post.
Ok. Who pissed him off.
WOW, we just lost a wealth of knowledge"

The Invisible Hand quickly answered that perhaps sector took offense to the Hand's questioning of some of sector's assumptions concerning the amount of gold sold by European banks.

I need to also speak up here as I may also have upset sector with my (post 101852) in which I agreed with Aristotle's (post 101776) which disagreed with some of sector's conclusions from an earlier post. I do not believe any of us are happy that sector left but I also do not believe we should fail to question assumptions and/or conclusions that do not make sense to us. Without questions and discussion how are we to learn?

I also do not think highly of sector's reaction of calling us paid anti-gold antagonists (but I've been called much worse) or of his advice to only listen to those praising GATA and reporting only good news supporting gold. I like good news as much as the next guy but we can censure and ignore the not-so-good news only at our great collective peril. Anyway, if you're looking to place "blame" on someone for sector's departure, I guess you might include Aristotle and myself along with The Invisible Hand.

Finally, I hope that sector reconsiders and returns as I too will miss him and his views. Imho this forum would have little value if everyone always agreed with everyone else and any difference of opinion was a great threat to the force.

Now I'm searching for some upbeat way to end this post. Let's see, how about the POG today! If that doesn't do it, look also at the POS!

Townie, thanks for links in post 102175. I'm off to check them out.

silvercollectorPM stocks hesitant today?#10221705/01/03; 16:52:46$hui,uu[w,a]waclyyay[df][pb50!b13!f][vc60][iub14!la12,26,9][J11563524,Y]&pref=G

Here's a beauty pic on the PM action for the last 2 years. I was a little disappointed in the action today especially with the fallout in the USD.

We have the triple top thingy, will we move up and more importantly will we take out 154 on the gold bug index.

Gold no doubt is following the dollar's lead, the market is still not sure.

TownCrierGold higher on weak dollar, equities, data#10221805/01/03; 17:05:15

NEW YORK, May 1 (Reuters) - Gold prices finished with healthy gains on Thursday, closing at their highest levels in nearly seven weeks, driven higher by a string of worsening U.S. economic data that undermined the dollar and equity prices.

June gold on the New York Mercantile Exchange's COMEX division rose $3.00 to end at $342.40...

COMEX estimated 40,000 gold lots traded on Thursday.

[Randy's note: 40,000 futures contracts multiplied by 100 "ounces" per contract translates into a New York market "Zeitgeist" of 4 million hypothetical ounces of gold action -- 124 "tonnes" of yellow karma, nothing more. <Hello, Belgian!>]

"Above and beyond everything else, most of the strength you are getting in gold is coming from significant weakness in the dollar against most major currencies," said David Meger, metals analyst at Alaron Trading in Chicago.

In particular, the stronger euro continued to thrash the dollar on Thursday. A string of gloomy U.S. economic readings helped the euro blow through $1.1210 to the session high at $1.1287, a level last seen in February 1999.

The stronger euro gives European investors a currency advantage when buying dollar-denominated gold. Also, the deteriorating U.S. economic picture increases gold's desirability as a safe-haven investment.

-------(see url for article)-----

The interest is there in significant quantity to usher in a new reality for the market in gold, but the understanding of true gold investment remains woefully lacking. Use this interim time to your advantage (low prices) while investors begin to learn to shift from a merely superficial spirit of gold into the substance of gold.

Stay ahead of the learning curve. Call Centennial for prices and purchase arrangements.


TownCrierHEADLINE: Bundesbank's Stark unconcerned about euro rise#10221905/01/03; 17:25:12

FRANKFURT, May 1 (Reuters) - Bundesbank Vice President Juergen Stark said [in an interview to be published Friday] "The global economy is not heading toward a major crisis."

The euro, which is up 7.7 percent on the year, stood at 1.12 to the dollar on Thursday, its highest level since February 1999. It has also reached four-year highs against sterling and the yen.

A sustained rise could start to hurt manufacturers because of the rising cost of exports. Stark said the recent euro rise had been cushioned because export-oriented companies have hedged around 75 percent of currency risks over the next two to three years.

He also pointed to the fact that a strong euro made imports -- particularly oil -- cheaper, stimulating the economy.

...a further fall in the dollar would not surprise him.

"The American current account deficit is on track to reach $550 billion this year. To finance this deficit, the U.S. requires an inflow of $2.5 billion in fresh capital on every work day. This is not sustainable," he said.

------(see url for article)------

No international beggar-thy-neighbor monetary "policy" to be found here. A body of currency that has found a way to be comfortable circulating within its own skin...

What will happen to the corpus U.S. when the internationally administered intravenous drip of $2.5 billion daily runs dry? It's not likely to get up and dance. Diversify into gold to prepare your portfolio against the inflationary attempts by the Fed as they subsequently go it alone to breath life into the patient.


TownCrierFederal Reserve reports U.S. money supply up on the week#10222005/01/03; 17:33:53

In the latest reporting period by the Federal Reserve, the U.S. money supply grew over the previous week, slow economy be damned.

M-1 was up $18.3 billion, to $1,240.5 billion

M-2 was up $16.0 billion, to $4,910.2 billion

M-3 was up $24.8 billion, to $8,583.2 billion

see url for additional statistical data


TownCrier"What are they going to do... take away my birthday?"#10222105/01/03; 18:01:42

Hold your gold close, because they really CAN take away your birthday.

The misery knows no end... just one of many derailments challenging the attempt at having good life upon planet earth.


AnanseUnemployment#10222205/01/03; 18:40:18

Thought this might be of interest.

For Unemployed, Statistics Tell Only Part Of Story
By Ron Scherer | Staff writer of The Christian Science Monitor

NEW YORK - Philadelphia telecom worker Darnel Tanksley can makea dead phone line come to life. James Lee, a resident of Munster, Ind., has a knack for running construction projects. And Jane McGuire of San Luis Obispo, Calif., is a master of cajoling software programmers to meet their deadlines.

But all three have put their prize skills aside: They're out of work - and have been searching for jobs for more than six months. That irksome predicament puts these three into one of America's fastest growing groups: the long-term unemployed. They are people so discouraged by the job search that they've just quit looking.

While every downturn has its downtrodden, this one is worse than most. The percentage of people not in the workforce has grown nearly every month since early 2001.

"This is not only painful for the individuals and their families; it's unhealthy for the country," says Bill Brock, a former senator and labor secretary. "People in this country like to work, to be productive."

... As the so-called jobless recovery stumbles along, the number of long-term unemployed - now about 1.8 million - is up 36 percent from a year ago. The tally of discouraged workers - almost 500,000 - is up 44 percent. End Snip


silvercollectorI almost forgot#10222305/01/03; 20:53:43

BIG, BIG news and I'm shocked that it hasn't been brought up???????

US pulling out of Saudi. (On every front page) US pulling military out of Saudi and heading home.

What does this mean? Papers saying "roadmap to peace" accelerating.


Great Albino BatA gift of guano for today....#10222505/01/03; 20:55:51

Some interesting questions on this Board today. Here is my guano in response:

Camel: prices...piles of guano on the subject. To the point: a price is a "marginal indicator". That means, sort of, the last two guys standing win. It only takes two: one seller and one buyer, but - the last pair.

The physical price of gold is being controlled so as not to rise, or not rise violently. To do this with physical, the controllers must satisfy each and every buyer of gold and keep offering more gold, until the price begins to fall as buyers become scarcer and scarcer unless a lower price is offered. The controllers of the price of gold hate and fear this situation. Therefore, they prefer to "set the price" on the basis of COMEX, where the physcial offtake is only a fraction of the gold (paper) contracts traded.

On COMEX, the sellers - who have practically unlimited quantities of green stuff - can sell and sell and sell paper contracts, until they satisfy all the buyers, and then keep on selling until the price comes down to where they think it should be. Nobody can beat the controllers at this game, since they have all the money in the world to sell gold CONTRACTS down.

There's been a lot of huffing and puffing about this at this great Board, but the fact of the matter is - we don't have to dig too deeply to understand - that unless we are talking about DELIVERY OF PHYSICAL GOLD, the controllers have the upper hand.

If there are no sellers willing to part with their physical yellow metal, it would take only a determined buyer with a quite modest amount of money, to take the far as you want to imagine. This is not a situation we are likely to encounter - barring some catastrophic event. But it could happen. Enough guano on this subject.

Topaz: You mention that the ECB people might want to fight deflation by buying gold and raising the Euro price of gold. This is the final outcome, someday. To raise the price of gold in Euros, is like Roosevelt's rasing the price of gold in Dollars (from $20.67/oz to $35.00/oz) back in the 30's. It's really a "devaluation" and in the case of the Euro, it would be a devaluation of the Euro vis-a-vis the Dollar.

Now that Europe is pulling away from the U.S., that will happen, but I suppose it will happen later on, when things get a lot, lot worse. Not for now. Things are going to get out of hand; governments in the throes of crisis, are going to begin to do things they never thought they would have to do, things that were considered as out-of-date and belonging to a primitive past. They are going to go in for competitive devaluations, to see who raises the price of gold higher. That will only happen, when all international cooperation has been cast aside, due to enormous internal political pressures. It will happen, a little later.

Eleanor of Aquitaine: Sell on upticks? Don't try it, good Lady Eleanor! Only buy gold, as much as you can afford, and NEVER, EVER, SELL. Gold stocks? Suit yourself, might be good. My guano: if you like to gamble, go to Vegas. Quicker results, for good or bad.

Silvercollector: Will a fall of Dollar to 90 be stabilizing or destabilizing? My guano is that in former days, a fall of the Dollar could be interpreted as a passing phenomenon. Not any more. Credibility is lacking, conditions are totally different. The fall of the Dollar is going to unleash horrific problems, not like previous falls. Prepare of the worst.

Belgian: You asked if anyone had a suggestion as to why "CBs goldsellers are not selling gold coins with hefty premiums to their citizens."

This idea that CBs are institutions which are looking after their citizens and interested in maximizing returns as any bona fide public institution in charge of an asset belonging to the people should do, is - not my guano. It is the ordinary stuff, not the Great Albino Bat guano.

Von Clausewitz said: "War is politics by other means". The GAB (Great Albino Bat) says: Politics is war by other means.

The objective of the CBs is to maintain paper for as long as possible, since the end of paper means the end of an era on the other side of which, lie conditions unimaginable.

They are selling gold, to keep the price DOWN, not to maximize returns. B of England, prime example. They will fail, of course.

So, and this is no guano, BUY AS MUCH AS POSSIBLE gold, and never, ever, sell!

Good night to all!


GoldendomeRuminations#10222605/01/03; 21:01:19

The dollar weakens forcing foreign companies to either raise prices on the goods they export to us, or if U.S. consumers refuse the price hikes, causes the foreign companies to cut their margins and profitability?

Foreign currencies rising against the dollar causes an export decline in foreign countries making their national economies weaker and possibly forcing down their interest rates causing their own currencies to level out or decline if they go into recession?

Is the U.S. like one giant Wal-mart where we say to suppliers, "if you want to sell to us, we will pay this price, if you don't like it, find another buyer." And who will buy? Won't a lot of these foreign companies and their respective economies face the Wall without the U.S. as the consumer nation? Seems that a fall in consumption on the part of the U.S. will cause a recession-depression here, but we will not be alone. The entire world depends so much on our consumption, that it would quickly lead to recession-depression everywhere that depends upon us as their consumer.

I'm not sure how any of this would affect Gold. The way that it is manipulated in the paper markets, maybe it's going to take a "significant event" either in the financial markets, or politically, to really blow the lid off the manipulators. Incrementalism movements just seem to make money for the paper traders. Something "BIG" may be needed to really open eyes, and to change thinking and attitudes.

TateUS puling out of Saudi Arabia#10222705/01/03; 21:03:20


Two possibilities:

1.They have been told to get out.
2.They feel they control enough of that region without beeing in SA.

I tend to think first to be most likely.

silvercollectorIs Sinclair deep in left field?#10222805/01/03; 21:24:52

Just read Mr. Sinclair's latest. He's talking 400 bucks at USD index 72! Really!

I love Sundeck's "linear" POG= -4.35 + 782 but this is not funny. Plug it in; index at 72, POG = 468. No, no, no.

I listen to Mr. Sinclair often but if he's talking the dollar index at 72 will bring about gold to 468 or as he puts it better "than $400" I'm out of here. I'll collect marbles, slingshots, acorns.

I'm sure this will get back to the man, "Hey Jim, try that TA on us one more time man!"

Holy mackeral.

21mabry(No Subject)#10222905/01/03; 21:44:00

Cytek, Someone I know in herbal health field suggests buying collodial off the shelf.I guess its wise to use only so many parts per million,off the shelf you can tell the dose,I guess when you make it yourself its hard to know how much silver content you have.With very heavy use I guess your skin takes a on a blue tinge.This is just what I have been told. The person told me also its great to use in a little bottle to put drops in your nose,great for sinus problems they said.
Dollar Billsilvercollector#10223005/01/03; 21:47:32

Hi Silvercollector, You got me to go look at sinclair and after reading his (ahem) analysis, quoted below, I think we can dismiss him as past his prime. If he had a prime.

"It is no secret that the super rich potentates of the Arab oil producing nations are livid about US control of the Iraq oil fields which they interpret as no short term event and one that will likely be used to finance the rebuilding of Iraq.
The net result of a democracy in Iraq today could be a merger of Iraq with Iran in which the name Iraq would be dropped. Plus, we could also see the establishment of a new country called Kurdland that would seek to merge with their compatriots in Turkey.
The only chance of revitalizing the dollar is gold in a new modernized and revitalized Federal Reserve Gold Certificate Ratio which, IMO, will come by 2004. This will help to turn the equity market from bear to bull by turning the dollar from a ruble to a currency again thereby getting "the man" back in the White House for another four years."

Black BladeMarket wrap Up – Puplava#10223105/01/03; 21:51:03


In a larger sense, the U.S. economy has been turned upside down by the overemphasis on consumption. Over the last several decades, and since the Great Depression, the emphasis in government policy has been to encourage debt accumulation and consumption at the expense of savings and investment. A good example of this fallacy is that interest expense is deductible by corporations while dividends are taxed twice. A company can deduct all of the interest it pays while the dividend it declares to shareholders is nondeductible and taxed twice, once at the corporate level and then again and the personal level. The left in this country is fighting hard to maintain this policy and opposes the President's elimination of the double taxation of dividends. However, given the choice between a deduction or no deduction, it is no wonder that it has paid for most individuals and companies to accumulate more debt. The tax laws favor debt accumulation. At the same time, the tax laws discourage capital accumulation by punishing those who save through higher marginal tax rates. These kinds of polices have transformed the United States from the largest creditor nation to the world's largest debtor nation. This becomes obvious from looking at the macro economic numbers over the last five years.


Other sectors doing well today were gold and silver shares, which have been rising as the U.S. dollar continues to hit new lows. The dollar broke down today and hit a new four–year low. The dollar fell on news of economic weakness in the manufacturing sector, which has gone back into recession. Precious metals shares travel in the opposite direction of the dollar. The bulls believe the markets will be range bound until the recovery kicks into gear now that the conflict in Iraq is over. The bears see the market differently. They see signs of weakness as the economic news and real earnings news deteriorates. They also see widespread complacency amongst advisors and investors. No new market leadership has asserted itself outside of precious metals, which remain within a bull market trend. The rest of the market has become similar to a casino with fund managers and speculators jumping from one hot sector to the next with no permanent trend emerging. What is hot one day or one week can quickly go cold the next day or following week as speculators jump from one gambling table to the next. This is definitely a speculators market versus an investors market.

Black Blade: An exceptionally good article tonight from Puplava. It's mostly about debt (consumer, corporate, and government). There is no need to wonder why the US dollar is weakening or why it will continue to plummet much further. Also, a few good comments about why many states have good reason to fear a mass immigration of Californians as they bring their "baggage" with them (aka Californication).

Dollar BillR. Powell#10223205/01/03; 22:05:58

Greetings Sir Powell,
I would not look for whom to blame or even want someone back. Even Aristotle gives the impression that he is a student. A crucial quality for us all to have in order for the forum to not be a crusade. I am willing to read even the slowest learner here, but if I stop being a student, I should not post.

Black BladeSilvercollector - USD and POG#10223305/01/03; 22:06:48

I don't read much of Sinclair or know exactly what he is talking about as I did not read the article. But if the USD falls to 72 I would be willing to bet that gold could easily be priced in excess of $400. A rough gauge here would be about a $3 gain for each point lost from the USD index (based on historical correlations and even that perhaps is quite conservative). From the current level that would be about $412 an ounce. Of course this is just a rough "back of the envelope" calculation. If other factors come into play the POG could be much higher. A speculative mania or a rush to wealth preservation during economic calamity could spur the POG to unheard of levels. As gold is priced in dollars it would be reasonable to assume a higher (perhaps much higher) price on a weaker US currency. Such a low USD would also indicate that there are other more serious factors at work than a simple reduction of the dollar index. Even so, gold at $340 an ounce is still undervalued. Cheers!

- Black Blade

Gandalf the WhiteWELCOME "GAB"#10223405/01/03; 22:07:30

Great Albino Bat (05/01/03; 20:55:51MT - msg#: 102225)
A gift of guano for today....
No "guano" in your discussions !
I was "thinking" that you might join us at the TABLEROUND !
WELCOME (and does Lothar know that your out?)

silvercollectorTate#10223505/01/03; 22:25:04

Good man!

Everyone else is dead here. Counting their Euro's or Rand or something. CDN buck and AUD buck way, way up too! Do I smell the golden commodity currencies screaming higher (yippee, yippee) or is it a false CRB breakout (boo, boo).

BB has been on the 'oil ball' as he always is, thanks BB. Why did I read the other day that Iraqi oil is coming 'on-line' much, much quicker than expected. Explains the 5-6 dollar drop in crude in the last week. Hope we're getting both sides of the story, we love to complain when CNN is 'appearing' lopsided.

Mr. Bush was sure proud as a peacock on that warship wasn't he. Looks like the military has no issue with getting the Iraqi civilian population in line. Beat 'em up, throw 'em around and hell, since it's still officially "war times" shoot the sons-of-guns if they get too enthusiastic. The "beatings will continue until moral improves". We'll get you suckers pumping oil soon and you'll get your 5 US dollars a day, NOW FORM A LINE!

Ahhh, the 'liberated' Iraqi's. Can you even BEGIN to imagine the huffing and puffing going on at the UN, in Moscow, the EU, ALL of the Arab countries, the rest of the world. Hmmmm, maybe the US dollar is now inversely linked to each Iraqi civilian shot when he removes his shoes.

It's a good thing SARS broke out in a nick of time, the media might still be covering the 'war'. I just saw half an hour of the Baghdad action, that's DEFINITELY under control. I wonder if it's got anything to do with the lack of food, water, electricity and human essentials. CNN said Basra is still severely short of water, well it's only been a month, it'll be okay.

Hmmm, maybe this dollar flogging is the concerted effort of a planet voting NO to the ever becoming obvious intention of the US in Iraq. I heard about WMD last week, sorry, a week ago yesterday. What was that expert, military, chemical engineer, woman's name again? She said the drums or barrels of whatever the heck the containers, that were sitting in the middle of the desert for how many years, were pre-tested and had a 98% chance of containing 'nerve' agents of whatever. Yeah, it was the upteenth discovery of TRACES of WMD, all in the 98 percentile. The marine interviewed said, "Yeah man, we were walking across the desert and we found these barrels with NERVE gas in them."
CNN showed the drums/barrels and the busted up, rusted out vehicles nearly. Judging by the rust and how far they had sank into the ground one could guesstimate the vehicles were abandoned say 12 years ago.

Now wouldn't it be nice to hear one tiny, teeny microscopic tidbit of truth at least once every blue moon. Tony Blair, wouldn't you just love to give this guy a tune-up? So the war is over, excellent. Iraq is done, Afganistan is done and the tents are being folded in Saudia. We'll probably hear tomorrow that N.Korea is happy and they apologize for any 'hard feelings'.


Oh, did I hear that Japan squeaked out 0.0000001% of growth last quarter, looks like a second half recovery to me. The papers report that all embezzelling crooks are out of the system, corporate tycoons are ready to 'play ball' again. Looking good!!

I'm going to cash out of my gold tomorrow, throw a little into 'foreign equities' preferably North Korea and Japan, short oil, hit the futures long and put the rest in tech!

And Tate, as far as the reasons for leaving Saudi, I'll leave that for the press to handle, know what I mean.

Black BladeDeficit Grows At Agency That Backs Pensions #10223605/01/03; 22:29:14


The federal agency that guarantees the pensions of workers whose employers go bankrupt sank deeper into the red in the past six months, to a deficit of about $5.4 billion, officials disclosed yesterday. The Pension Benefit Guaranty Corp. is in no immediate danger of being unable to meet its obligations to retirees, the officials hastened to add, because, despite the growth in future liabilities, the agency only pays out a fraction of its assets each year in benefits. The balance sheet has deteriorated by $13.1 billion -- from a surplus of $7.7 billion just 18 months ago.

Black Blade: A sign of the times.

silvercollectorBB#10223705/01/03; 22:29:31

Thanks for pulling my leg. Index 72, gold 412; had me going for a minute.

I was going to ask you if your fridge is working!

mikal@BlackBlade#10223805/01/03; 23:04:58

Re: "Gold is undervalued"
Doesn't that just about say it all? Were the dollar to rise, instead of fall, gold would still clear $430 in the first half or shortly after, IMHO.
Re: Investment demand. MK and Randy posted a news story you have seen, where CPM shows investment demand highest since '71. Great news, and so few even mention it. This reminds me of the current, very low VIX reading, showing complacency! The mainstream, politically correct, establishment media, their "experts" and the public go to extremes of naivete to coincide with other extremes, as if enough cycles and "interesting" circumstances weren't coordinated already.
Also USAGOLD mentions the very tight supply, evidenced by Portugal's recent sales. And buying ahead of summer season, fund buying, mines covering, short covering, and many other market factors.
Finally, the "rogue wave", an important subject that we all have dissected. Parts made of wavelets like Enrons affecting confidence, low consumer savings or curtailed mine exploration. It also consists of the larger waves- might be a large terrorist attack or war or our "cascading sequences", "bubbles", "avalanches" and "vicious spirals" discussions of current and hypothesized events.
Making precious metals and their sincere advocates, indispensable for the safety of individual investors, their families and society at large.

Black BladeSilvercollector – Iraqi Oil#10223905/01/03; 23:09:59

I wouldn't be too concerned about a tidal wave of Iraqi Oil. It will take years to get back to pre-sanction production levels. In fact the projections of full production by year end are grossly over optimistic. The infrastructure is in a bad state after years of neglect, the reservoirs have been compromised (even need to be re-pressurized), even the north Kirkuk oil must sit in settling tanks at Ceyhan, Turkey for at least 24 hours for water separation before transport, pipelines leak badly, some well heads have corroded and even production casings are collapsing, critical repairs at separation plants hasn't even begun, there's a lack of competent personnel, facilities have been badly vandalized and critical equipment stolen, and workers don't even have any tools to work with. The list of problems goes on and on. But to say that oil will be flowing at full production by year-end makes for nice press and for political mileage and gullible or deceptive analysts have been spinning this tale what whatever reason. Nevertheless only a trickle of Iraqi oil is flowing.

But the real story is not oil but one about "cheap energy". Oil is not necessarily a large part of the domestic energy picture as far as electricity and heating are concerned. Watch the NatGas situation develop into a crisis by this winter as storage is at critically low levels. There are not enough drill rigs working for adequate refill by winter and unless we are really lucky to have an economic depression for "demand destruction" and a mild summer coupled with a mild winter, we could easily see a lot of shivering Americans this winter along with high utility rates. If we have a normal to hot summer we could see prices rocket as storage operators compete for NatGas production and as NatGas "peaker" power plants fire up to meet demand during "air conditioning season".

- Black Blade

(see link for today's storage injection - the graph is worth a thousand words - we need a minimum injection of 80 bcf/week just to meet demand for a normal winter)

Black BladeUS to issue a record $58bn of debt #10224005/01/03; 23:16:01


The US Treasury said Wednesday it would issue a record $58bn in debt this quarter to combat a rising budget deficit, but bond investors shrugged this aside and Treasury prices rose sharply on fears over the economy. Market estimates for the 2003 budget deficit range from $350bn to $450bn, almost $150bn higher than the start of the fiscal year and the shortfall is thought to increase next year. "Most expect that the budget situation will deteriorate further in 2004," the Treasury's borrowing advisory committee said. The Treasury is reintroducing the three-year note this quarter after suspending it in 1998. It will auction $22bn in three-year notes, $18bn of 5-year notes and $18bn in 10-year notes next week. The Treasury has decided to hold more auctions rather than dramatically increasing their size. Next quarter, it will start selling 5-year notes on a monthly basis and issue 10-year notes more often.

Black Blade: This a bit less than the previously announced $6 billion, but still quite a chunk.

Black BladeBOJ's Fukui Brushes Aside Calls to Buy Shares of Japan's Banks #10224105/01/03; 23:25:03


Tokyo, May 2 (Bloomberg) -- Bank of Japan Governor Toshihiko Fukui brushed aside politicians' calls to buy shares of the nation's lenders, saying the central bank cannot ``spend limitlessly'' to support asset prices. ``Propping up asset prices would force us to spend limitlessly and force us to take unlimited responsibility,'' Fukui said in his first interview with reporters.

Black Blade: Looks to me like he needs to have a talk with Fed Governor Bernanke.

TopazGAB.#10224205/01/03; 23:50:41

Holy excrement Bat-Man!...welcome aboard...
You said:
You mention that the ECB people might want to fight deflation by buying gold and raising the Euro price of gold. This is the final outcome, someday. To raise the price of gold in Euros, is like Roosevelt's rasing the price of gold in Dollars (from $20.67/oz to $35.00/oz) back in the 30's. It's really a "devaluation" and in the case of the Euro, it would be a devaluation of the Euro vis-a-vis the Dollar.

NOW seems as good a time as any GAB. They're (ECB) trying to manage their new "currency" in a "flationary neutral" manner and perception dictates a neutral position vis Gold. (yep, I know, Market isn't structured thataway...Yet, but!)
We have the odd situation whereby to regain the E320/Oz level the Euro/$ exchange rate may be driven to 1/1.5 (or E320 - $480 PoG) This would be a revaluation of E vis Dollar and grossly compound the Dollars already precarious position...but would be totally in keeping with their "brief". Bad things will happen outside Gold beforehand I feel.
Speaking of Guano, the tiny Pacific Island Nation of Nauru finds itself in deep do-do with the US Admin at present. The Patriot Act has bought both barrels to bear on Nauru in an effort to tidy up it's money-laundering function.
Nauru was once a treasure trove of Guano, exporting fertilizer the world over, Since that resource has been depleted they've become quite "creative" in sourcing income.

Black BladeIraq's tanks full - with wrong type of oil #10224305/01/03; 23:58:30


Iraq may now be producing more than 300,000 barrels of oil a day but, three weeks after the country came under US occupation, success in restoring output is bringing its own problems. "Nearly all of the pipelines and all of the storage tanks are full," says an official with the Office of Rehabilitation and Humanitarian Assistance (ORHA), the US-led body now leading the reconstruction of Iraq. The problem is that Iraq's oil tanks and other storage sites are full of the wrong kind of product - heavy fuel oil, the bottom fraction from a barrel which is used mainly in power generation. Iraq's refineries cannot produce more gasoline and LPG without producing more fuel oil. As a result they might even have to cut back on gasoline production. As a result of the fuel oil backlog, Baghdad's Daura refinery is running at less than 20 per cent capacity, refining about 20,000 barrels a day when it is ready to produce 110,000 barrels, according to managers.

Spencer Abraham, US energy secretary, admitted earlier this week that "significant infrastructure problems" remained to be addressed before Iraqi oil production could be brought to pre-war levels. Mr Abraham said the US hoped restoration would "take a matter of months".

Black Blade: It appears that full production could be a long way off.

Chris PowellA too-brief exchange with a former Federal Reserve official#1022445/2/03; 01:00:30

Latest GATA dispatch....

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.

WAC (Wide Awake Club)'Old Europe' presses ahead with plans for an EU army#1022455/2/03; 03:39:50

Old Europe" threw down the gauntlet at the feet of Britain, the United States and the Atlantic Alliance at a mini-summit yesterday, unveiling plans for a new Euro-army with its own military headquarters.

France, Germany, Belgium and Luxembourg - described by some in the US as the "Axis of Weasel" - vowed to press ahead with a full-fledged defence union, brushing aside warnings that the move would entrench the European Union's bitter divisions over Iraq and could lead to the break-up of Nato.

A new rapid reaction force would be built around the existing Franco-German brigade, taking in Belgian commandos and units from Luxembourg. It would answer to a headquarters in the Brussels suburb of Tervuren and be ready for joint operations next year.

Black BladeSEC Chairman Berates Morgan Stanley Exec #1022465/2/03; 05:15:07


WASHINGTON - The nation's chief securities regulator lashed out at the head of Morgan Stanley, one of the Wall Street firms in a $1.4 billion settlement with the government, for suggesting his firm's conduct didn't harm ordinary investors. In a letter dated Wednesday, Securities and Exchange Commission Chairman William Donaldson accused Philip Purcell of showing "a troubling lack of contrition." It was an unusual public airing of an SEC chairman's complaint against the leader of a major brokerage firm. Purcell, the investment firm's chairman and chief executive officer, told a financial conference in New York Tuesday: "I don't see anything in the settlement that will concern the retail investor about Morgan Stanley." His remarks, as reported by The New York Times, prompted Donaldson to tell Purcell he was "deeply troubled." The comments "reflect a disturbing and misguided perspective on Morgan Stanley's alleged misconduct," Donaldson wrote, calling regulators' allegations "extremely serious."

Black Blade: The song remains the same. A slap on the wrist and nothing has really changed. Purcell and the others on Wall Street are probably just having a good laugh over this. Seriously, did Chairman Donaldson really think these people have a conscience? They are even havin a good chuckle over this on CNBC. Hmmm...

BelgianHugh Hendry at CNBC-Euroland#1022475/2/03; 05:37:07

Gold is still in a bull market !
Many (most) fund-managers don't understand Gold !
The dollar (dollar-reserve) is just a paper and will continue to decline against most other currencies (euro) ! Gold is money ! (a wealth-reserve, imo)
Hugh doesn't care what TA/TI are saying !

TopazSomething could be up!#1022485/2/03; 07:36:35

That's as flat a pre-open as I can recall...Currencies, Bonds, Gold, everything.
Euro Mkt's all off 1%ish...Hmmm!

CytekJobless numbers - what's the real unemployment rate#1022495/2/03; 08:10:11

The Bureau of Labor Statistics admits that the US economy has lost 500,000 jobs so far this year. Compared to a total work force of about 125,000,000, this amounts to 0.4% of the workforce. Now, consider the fact that because of population growth, the US economy needs to create 125,000 jobs every month, just to keep the unemployment rate steady. Since Jan. 1, then, the size of the workforce should have increased by 500,000.

This means that the "job gap" - the difference between the number of jobs that actually were created and the number that should have been created - is about 1,000,000, since the start of the year.

This translates to an increase in the unemployment rate of 0.8%.
So, why do the official numbers only show a 0.2% increase since Jan. 1??

The real unemployment rate? It could be closing in on 10.0%. Put this on CNBC.

Clink!(No Subject)#1022505/2/03; 09:26:03

@GAB. Welcome to the forum - that was quite a debut. And now, about that quip yesterday about entrail reading - it was just a joke, OK ? Honest. (Next new moon, it'll be the rooster who gets it .....)

@Cytek. Nice analysis. It always amazes me that comparisons are made with year-on-year changes, without taking demographics into account. For instance, the US is always cited as having a more powerful economy than Europe because its GDP is growing faster. This completely ignores the two vital factors of inflation - money supply and population. Europe has a more-or-less stable population (I don't know if it is still true after unification, but West Germany's was even shrinking at one stage in the '90s) so can quite happily survive at a lower growth rate than the US, all other things aside. Further, I wonder what the relative growth rates of the different economic segments are. Services can balloon much faster than industrial, for instance, because they require much less infrastructure investment. But they are much more vulnerable to downturns.

USAGOLD / Centennial Precious Metals, Inc.Why should YOU buy gold? Because no one else will do it FOR you. We can help.#1022515/2/03; 09:43:43

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 and 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 asset 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?

USAGOLD - Centennial is here to help.

CamelFOREX#1022525/2/03; 09:50:21

Kilo- Alaskan hunter, - Thanks for the response. Would anyone be willing to give an explanation of the FOREX? Who is doing all the buying and selling and why? Is it governments and corporations settling trade or changeing local currencies to dollars to buy oil, speculators? Isn't this where the value of the dollar would finally be determined?
TownCrierThe U.S. Treasury's "strong dollar" seems to be missing in action#1022535/2/03; 10:20:10


The dollar fell further yesterday across the board, making new multi-year lows. Against the euro, the worst level was 1.1285, the lowest since right after the euro was launched (Feb ’99). It was the third consecutive daily 4-year low.

Against the Canadian dollar, the US$ was a 5-year low (Apr ’98) and against the A$, the low from Feb ‘00.

...The threat of a Friday correction is very real, but a stampede will probably not develop, because the consensus is firming that the US economy will need a Fed stimulus (in some form), and on a real yield basis, the dollar is joining the yen and the Swiss franc as the lending currency in carry-trades. As we have to keep pointing out, to borrow at low rates to invest in emerging market high yields is perfectly fine as long as you appreciate that a Shock will make it impossible to get out. Any number of firms have gone under for lack of understanding that liquidity is king, including Long-Term Capital. This always happens. The difference this time is that a far bigger proportion of hedge fund investment these days is coming from the middle class, who don't have a clue as to the risk they are taking.

-------(from url given above)-----

You do have a clue about the risks that paper of all kind has to sudden discounting by the market. Do right by yourself and your family with a prudent diversification into the king of hard assets, gold.


Great Albino BatMetaphysical guano considerations from the GAB....#1022545/2/03; 10:49:15

Greenspan admitted he could not define a "Dollar", upon interrogation by Ron Paul. The reason he could not do so - whether he stated this or not - is because the Dollar has neither "substance" nor even "form", the poles which, combined, produce reality or manifestation. We could go into this at length, but suffice it to say that all reality was abandoned when the Dollar mutated from a promise of redemption into a reality - gold - into: nothing.

Today, all currencies in the world are nothings. Not one of them is "something".

One nothing cannot be better than another nothing.

In order for one thing to be compared to another thing, they must both BE something. We can certainly compare gold with silver, or with platinum, or...whatever you please. But not currencies. This means that ANY "price" today, for gold, is a bargain. The world has not yet discovered this fact.

This world is living (or subsisting) for the moment, on a grand delusion, and living in a delusion is the definition of insanity.

Life is a process which is sustained by dealing with reality efficiently. A deluded world cannot do so.

Therefore, this world is on the path to self-destruction.

There is no guaranty that any reading this, will survive the coming collapse (nor is it possible to foretell just how long that collapse will take in arriving). There are 1800 airliners baking in the sun in the Western U.S.; a symbol of the collapse.

Those few who will resist the insanity - some through a process of reasoning, others through their simplicity, which is a great antidote to delusion - will purchase and store away gold and silver as anchors to reality, and await, in the tranquility of Faith, or at least Hope, the inevitable outcome.

The GAB from Nauru.

adminMK's Gold Commentary & Review#1022555/2/03; 10:59:58


Friday's Question ( A New Feature). The effects of deflation on gold. Thanks to MS for the question.

A new Stein

Interesting quotes logged from Phillip Stevens, James Grant.

Ian McAvity says Gold Bull Monitors Dollar Bear

A short QuickNotes launching the weekend and an interesting to Offer to all goldmeisters (far and wide)

Thanks to Black Blade for great Afternoon Gold Report yesterday. He doesn't know it but the report is heavily read in Europe. (We got the numbers here at the castle. . .very impressive.)

TownCrierGearing for the weekend?#10225605/02/03; 12:04:27

If you're enjoying a restful day, have a look at these and give your thought to some worthy additions to the list.


TownCrierThey're movin' out!#10225705/02/03; 12:06:21

Don't drag your feet too long deciding on this one.


Buena FeGreat Albino Bat (5/2/03; 10:49:15MT - msg#: 102254)#10225805/02/03; 12:13:40

ha ha, great post GAB, i won't even attempt to say it better.

looking forward to May 15, for my next dash of sanity ... Matrix II

call me simple but don't call me shirley (airplane, remember?)

Chris PowellHarmony Gold to merge with African Rainbow Minerals#10225905/02/03; 12:39:14

Looks like a smart move economically and

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 GreshamGreat Albino Bat!#10226005/02/03; 12:55:04

I can't read further on without seconding Buena Fe's commendation of your clear and forceful statement of the situation we are surrounded by.

The human brain is a tool, a tool of survival. Unlike other animals, it is able to create and deal with abstractions. These, too, can be tools of survival, but, of late (and perhaps all along), they are used more often as a weapon of taking from other, less astute, humans. Zero sum, or worse, on the basis of real goods produced.

Greenspan can't define a Dollar, and Clinton had trouble with "is". Close kinship there. Especially when someone's trying to run out the clock on a game they've finagled beyond repair.

I sniff a "derivative event" ahead. Don't ask me why; it's just been overdue for so long, and I'm taking a W.A.G. here.

On that day, of Dollar or similar collapse, in any of several likely forms, watch out for people's driving on the roadways. They might be having trouble sorting out reality from derivative abstractions, like "Stop" vs. "Go", and Red vs. Green.

(I've gotten that way myself after some intense days of reading the Forum here. Better to get my poor ol' brain tempered in advance for such reversals, eh? But it doesn't do much good to be the only sane driver on the road that day, does it?)

(Hey -- aren't "Red" and "Green" just abstractions along the electromagnetic spectrum?)

21mabry(No Subject)#10226105/02/03; 13:15:05

Mr. Gresham, I agree with what you say, I have always believed that cheating or taking from someone unjustly because you are more intelligent is wrong.I consider it as bad or worse than using physical force to take from others. Welcome to GAB . Just some info,I bought a basket of gold stocks last december, performance so far has been a peak of 10 percent profit during run to 390, as of yesterday down about 7 percent.Actually my best peformer is a company that rents and services natural gas rigs. Black Blade I think you said you see a shortage of rigs on the horizon. Do they take long to build new ones, I imagine they are very costly to build. Physical gold is better on your nerves than equities. No one can take the metal from you.
Camel Money is nothing#10226205/02/03; 13:32:36

Hey GAB, how about letting me have some of those old nothing dollars that you don't want and I'll get a boat, a lot at the coast and cruse the bays for the rest of my life, instead of punching a clock.
Black Blade21mabry – Rigs#10226305/02/03; 14:05:40

It isn't so much a matter of building new drill rigs though there is a pressing need or more and an aggressive drilling effort to replace fast declining production. Rather it is a matter of few viable and accessible drill targets. Actually there is a growing concern that prospects in the Gulf of Mexico are declining and that all the "low hanging fruit" has been plucked. There is actually a growing number of "cold stacked" rigs as prospects decline. The real need will be for land rigs to tackle onshore prospects and especially for the "cheap" nonconventional shallow NatGas sources (such as coalbed methane).

There are few companies left that build drill rigs since the last downturn in energy in 1998. When the latest boom was on, companies were scrambling to find old rigs in scrap yards to refurbish. I personally know one individual who found an abandoned rig rusting away in a "hay field". He bought it for more than the price of a new one and rebuilt it. During the "NatGas Boom" a couple of years ago he was being offered nearly four times what he paid for it a month before (including the maintenance) by the time he had it turning in the field. It was the "wild west" as peope approached drill rigs and made "on the spot" offers. I have a friend who was following an old decrepit rig being transported to another site. He said that when they stopped for road construction a couple of people jumped out of a couple of following pickups and started to "haggle" with the rig owner (who happened to be along) and against each other trying to rent or buy his rig.

However, the antiquated energy infrastructure and inadequate pipeline capacity is rather constrained and that has been a major problem. An interesting development is that yesterday the Opal/Kern River pipeline opened up for business (a Warren Buffett backed company) that will transport Rocky Mtn. NatGas to power plants in the southwest and into southern California just as the "air conditioning" season starts up. Also, the BLM just gave it's "Record of Decision" for drillers to work the Powder River Basin in Wyoming/Montana to tap 24+ tcf of coalbed methane. Just in the "nick o’ time"? Who knows.

It will take a lot this late in the season to get energy companies to reverse course and pick up spending on new or shelved projects. Even with every available drill rig working on NatGas production, it is ever more doubtful that NatGas storage can be adequately refilled for this coming winter. This is especially true if we have a normal to hot summer as NatGas fired "peaker" plants come online to deal with increased demand. Also, decline rates are increasing in mature fields and nonconventional plays.

Regardless, the price of NatGas will remain high and likely soar higher as the year progresses. The cost to the consumer and business is obvious. The sad thing for cash strapped consumers and businesses is that it could have been avoided if tough political decisions had been made. Of course if you are in the domestic energy business it isn't necessarily all that bad either as "one man's loss is another man's gain" so to speak.


- Black Blade

KiloCamel - Still Working On That "Perceived Value"#10226405/02/03; 14:38:01

I guess GAB's cash (bat dung, beach shells, Yap stones, or what have you) is driving home a point. The value of anything and everything is nothing more than perception. If everyone the world over decided on a whim that gold were suddenly worthless (God help us), then so it would be. Same holds true for that green (soon to be pink?) cash in your pocket, the pot metal token coins, to the rusty old Chevy in the driveway. And like those online auctions, it's the person with the highest perceived value of any item that ultimately becomes the owner. Don't let those who are supposedly selling all their gold at giveaway prices fool you. It will all one day expose itself as the charade it is. The not-so-well-known "lesser fool theory"...... where everything is worth something to someone. The problem is that the more esoteric the item, the harder it is to find that "someone" who values it. Everyone values cash, many value stocks, most value the shelter over their heads and the food in the cubbord or the soils they till. But those growing numbers who really know the score and value gold also know that "perception" can turn in an instant, against the status quo and toward the formerly ignored and despised. That's when you want to be positioned ahead of time.

>>>Isn't this where the value of the dollar would finally be determined?<<<

The value of the "dollar" is determined every minute of every day in the billions of transactions that take place everywhere on this globe, one at a time. Nothing remains readily convertible to a fixed number of dollars over any given time. The percieved value of everything floats in relation to the dollar depending on that very perception "at the moment". I might be willing to pay $20k for a new automobile that I want today, but may not have perceived that value vs. dollars yesterday, and may not tomorrow. "Buyers remorse" as they call it is a good example in point. The same holds true for your boat and coastal lot as each has either a ready market or the lack thereof depending on perceived value in relation to what it costs in dollar terms to own. For most readers/writers here, the PM's generally have more perceived value than the fiat it takes to obtain them. This is based on historical precidence as much as current market trends, where 5000+ years of history tends to outweigh 90 years of our hocus-pocus Fed and their production of "value", "money", or "wealth" out of thin air. The "physical vs. the farce".....

Just a few rambling thoughts.

Black BladeCanadian Dollar Rises Above 70 U.S. Cents, 1st Time Since 1998 #10226505/02/03; 14:45:01


Toronto, May 1 (Bloomberg) -- The Canadian dollar rose above 70 U.S. cents for the first time in five years, pushed higher by investors drawn to economic growth and bond yields that have exceeded all other major industrialized nations. The 70-cent threshold hadn't been crossed since April 23, 1998, and brings the currency's year-to-date gain to 11 percent. It may prove a mixed blessing. Canadian bonds and other financial assets become more appealing, but a higher Canadian currency squeezes exporters who sell their goods in U.S. dollars. ``It's something I'm not happy with,'' said Martin Schwartz, chief executive of furniture maker Dorel Industries Inc. in Montreal. Investors have flocked to Canada's currency after the central bank twice this year raised interest rates by a quarter of a percentage point to cool the pace of the economy. The Canadian overnight rate of 3.25 percent is now 2 full percentage points over the comparable U.S. rate -- a lure for buyers of bonds as well as short-term securities such as commercial paper.

Black Blade: Oh my! The Loonie has wings. Foreign funds will continue to flee the US dollar based instruments and flow elsewhere for a better return. It should be interesting as the US Treasury floats a few more $billion in bonds with a pathetic 1.25% to service growing US debt. Meanwhile the US dollar (not the loonie or toonie) weakens and must weaken further to salvage domestic manufacturing. It doesn't look good the dollar but it is necessary as it is grossly overvalued. It makes gold look more attractive day by day. Too bad the Canadian government sold off their gold reserves at fire sale prices.

WaveriderVIP: DAILY GOLD MARKET REPORT #10226605/02/03; 15:35:49

"Gold ended the New York trading session slightly lower as equities rallied and the U.S. dollar rebounded slightly off recent lows in spite of a grim unemployment report. The reasoning is that the number of jobs lost was not as bad as expected by several Wall Street economists. It should be noted that the data is almost always revised higher in the following months’ data as evidenced by the additional 16,000 job losses added to last month's data. Of course the unemployment data only accounts for those who have filed for first time unemployment claims and not for those who do not qualify for benefits."

Thanks Black Blade, a good weekend to All!

Black BladeFrom The Mailbag#10226705/02/03; 16:23:57

I got a few nice email comments on the Gold and NatGas markets courtesy of Bill Bonner and Eric Fry at


The U.S. dollar is stuck in a "doomsday cycle", says, offering as evidence all the many things we've discussed.

"U.S. economy continues to struggle," observes the Financial Times, citing the usual reasons.

"Gold up $3," reports no one in particular, and giving no reasons nor apologies. Gold does what it wants to do, regardless of what anyone says. Right now, it seems to want to go up.

"Where does one look for satisfactory returns in a world of 1.25% money market rates and 5% long-term bonds?" asks Dogs-of-the-Dow inventor, Michael O'Higgins. In one word, gold! "Because it is undervalued, under-owned and in a strong uptrend after 20 years in the doghouse. Not only that, but gold has historically served as a great hedge against the kind of falling stock market and weak economy that we are likely to experience going forward."

Gold has been in the doghouse for so long that most investors are afraid to touch it; they think it has fleas. In the last two decades of the 20th century gold fell 70% in price, while the Dow stocks skyrocketed 1200%.

This was such an extraordinary event that it made us feel like soothsayers. Looking into the future, we guessed that the world would have to veer back towards the mean sometime soon. We suggested what we called the Trade of the Decade: sell stocks and buy gold.

Since then stocks have fallen about 50% on average, and gold has risen about 40%. But it still takes 22 ounces of gold to buy the Dow, which is twice as many as it has, on average, for the last 100 years. Which makes us think this trend has a long way to go.

"In other words," explains O'Higgins, "the price of gold could more than double and it would still be reasonably valued relative to stocks. Of course, if it went back to the levels of 1980, 1932, or 1896, it could go up by 1,000% to 2,000%.


And now, a few more bullish musings from the oil patch...or more properly, the natural gas patch, which we presume is located somewhere nearby. The US Energy Department's weekly natural gas report showed a slightly larger-than-expected increase in gas inventories, but one week does not a trend make. Natural gas inventories are still a stunning 54% below year-ago levels.

"Last week marked the official start of the annual six-month push to fill up the [nation's] natural-gas storage tanks," the Wall Street Journal notes. "With gas inventories at their lowest levels in a decade, the effort takes on increased urgency this year." And as T. Boone Pickens stressed at Wednesday's Grant's Spring Investment Conference, the urgency to replenish badly depleted natural gas inventories is likely to lead to rising gas prices sometime over the next few months.

If high, and rising, natural gas prices seem so probable, why aren't the exploration and production companies working feverishly to increase their drilling activity? The answer, according to Pickens, is that "there's nuthin' to drill". Natural gas companies have stepped up their drilling activity somewhat, but not nearly as much as one might expect, given today's elevated gas prices.

"One year ago, 613 gas rigs were toiling away on American soil and in contiguous waters," James Grant observes. "Now, following a propitiously cold winter and a backward spring (we write from the New York perspective), there are 805. However, as recently as July 2001, there were 1,068.

"As high corn prices elicit more corn, other things being the same, so do high gas prices elicit more gas, other things being the same. But exploration activity presupposes a belief on the part of the explorers that there's gas to be found. Among U.S. drillers, the faith seems to be waning, the current high gas price notwithstanding...Over the long run, exploration will become less and less fruitful in the lower 48 states."

Black Blade: Interesting comments. Gold is definitely in an uptrend while the dollar tanks. That won't change anytime soon. The US economy is a total mess and few have the guts to admit it (yet). And "cheap energy" is likely a thing of the past. The higher energy costs drop directly to the bottom line for both consumers and businesses. In a struggling economy that is very painful but due to limited supply and decaying infrastructure this too will not likely change for a very long time. Of course you can't store NatGas in your home very well, so that leaves precious metals as the obvious choice for wealth preservation and "portfolio insurance"

Off to the gym (for a bit o’ torture)- yeah, I know, it will all be wasted time today as I will swill some good ole Negra Modelo tonight with a couple of old energy patch friends.

Cometosesilver/ SIX ITEMS ON SILVER by Savoie#10226805/02/03; 16:33:05

Here's a Lucky Strike extra for all you silver bugs out there.....Interesting article with several references to getting even and many famous lines from many famous movies.
A little long but there's a factual imbedded gem in the text that you should see brought to you by Ted Butler.....
When people throw that kind of money around at the options desk ; it usually represents a self fulfilling prophecy...already in the making because of strong hands in the market....
.....and another thing....I'm wondering..................
Is silver the achilles heel ....which will bring the whole derivitives house of cards down......?????????
May silver explode first and GOLD follow after (6 months later) Amen.....

GoldendomeMK's answer to MS on Gold in deflation#10226905/02/03; 16:36:45

Good honest answer and worth a short read. Not much need to elaborate, it's a matter of degree, whether inflation or deflation and the stress and fear that mounts in the markets.

...On today's up action in the stock market. Are they just following the post-war trend, or are they anticipating another interest rate cut do to the continuing economic and employment doledrums?

21mabry(No Subject)#10227005/02/03; 16:39:13

BlackBlade, that was some good info on natural gas market. Sounds like the wildcat days in oil around the turn of the century in my homestate of ohio, and yes to all at one time ohio was a big oil state. thnx BB 21
R PowellBooks, underlined or not#10227105/02/03; 17:14:51

Hamilton's essay this week is another look at Jessie Livermore's career as described in "Reminiscences of a Stock Operator" by Edwin LeFevre. We all owe Black Blade a big "Thanks" for all he does here including the daily report. I mention this daily effort as I know how constant deadlines can wear on human nature. I'm sure he would agree. The clock (deadline) doesn't recognise sick days, psychological days or writer's block. No one is at the peak of their game every single day. It's just a guess but perhaps Hamilton has a few of these Livermore articles ready for those weeks when the Friday deadline seems to come too quickly. However, let me second his recommendation for anyone who hasn't read Reminiscences. It's the only financial book that I didn't read with a ruler and pen for underlining. What's the point in highlighting if too much gets underlined? I just keep rereading it instead.

"The Crash of the Millennium" by Batra is one of those other books that was marked with ink while being read. I've noted that the notion that workers' pay is losing ground to even the government's lower-than-reality inflation numbers is popping up in the news lately. Unemployment also doesn't greatly increase disposable income (other than groceries). This depreciating income value was one of Batra's main views as a coming cause of a slowing economy. One of the few avenues to "surviving the coming inflationary depression", according to Batra, is to place a goodly portion of wealth (or investment dollars?) in gold. Sometimes the great sages foresee the economic future with uncanny precision but none of them (that I'm aware of) has combined both clarvoyent forecasting with exquisite timing. Maybe those who possess this rarest of abilities merely prefer to remain silent, they're probably too busy counting their wealth to gloat, boast or brag. Maybe Ravi Batra's warnings are valid, just a few years early. Who knew interest rates would fall so low allowing the consumer to consume excessively for so long?

Silver has traded on her own handle as opposed to gold during the last week but, as usual, I can find no fundamental news, just the usual excuses. I thought perhaps the COT might help as I've been starved into looking for any silver news (even technical) but it didn't. The numbers are through last Tuesday while Wednesday through today were the big up days for POS. I included the link to the COT (futures only) numbers. Can anyone see anything exciting here? Technical analysis is not my strong suit.'s Friday....
Happy Weekend One and All !!

R PowellCOT#10227205/02/03; 17:31:57

For those interested in such as COT numbers, please remember that the link I just put up is for futures only. Some COT numbers include options with the futures.

I did notice during the last down trend in silver that, at it's bottom around 440 or so, that the Commercials were still short roughly 20,000 contracts. They were short covering on the down trend but were still holding about 20,000 shorts when POS bottomed. As usual, they are now increasing their shorts as POS rises. However, getting stuck with that number of shorts as POS rises while the so-called Big Speculative money or Funds were only slightly short when POS bottomed leads me to believe that the Commercials are not fairing any better than the Specs. This is just my opinion and does not agree with many other well-known silver (and commodity) analysts. Again, the so-called Small Speculators held their longs all the way up, then down and (hopefully) all the way up again this time! Only this time, perhaps we can place a higher high and then, mercifully, only retract to another higher low. How about somewhere around $7.00 with a quick 38% only retraction before the next move to $97 and change. Hey, it's Friday, a bit of dreaming is permitted.

Gold StandardSilver - Irrefutable logic#10227305/02/03; 21:17:47

Charles Savoie has certainly done it again in his inimicable style. (Link to post Cometose #102268 below)

I harbour no doubts at all that his prophesised "Press Conference" will be EXACTLY along the lines he has suggested, with the extended "Axis of Evil" to blame for the forthcoming silver shortages.

To me, it defies the imagination that Ted Butler's soundly argued position as to the looming silver crisis can be wrong.

"Endgame" has postulated the only flaw in Ted Butler's argument is the "known" world silver reserves, that are ready to be dumped on the market in order to keep the POS down.

Ted Butler has (I think) acknowledged that "Endgame" has raised a valid contrarian position, insofar as Butler admits the surprising extent of Chinese dumping of silver.

However, for how long can this dumping of previously unverified resources continue? Is it conceivable that this will continue forever?

Ted Butler has also distinguished "available" silver hoards, as opposed to "private" silver hoards, and given the opening of the Shanghai Bullion Exchange, and China's apparent (or required) willingness to free up the private possession of gold and silver bullion, it would be reasonable to assume that the "available" bullion (i.e. Government holdings) will draw-down well before the private holdings are prised open.

I think that silver bugs are far more hardened than gold bugs, and that there is a dearth of evidence to support a contrary position to that put forth by Savoie, Butler Morgan, and other enthusiasts.

I'm just glad that Charles Savoie has stopped posting his poetry - it really was a bit like Vogon poetry, for those fans of "Hitch-hiker's Guide to the Galaxy", Douglas Adams 1980.

21mabryLarouche#10227405/02/03; 21:48:04

I was listening to a 2002 interview of Lyndon Larouche, among other things Mr. Larouche advocated tying gold back into our economic system and valuing it between 800 and 1000 dollars an ounce.He said it must be tied to our economic system it is the only way to clean up the mess where in.
mikal@21Mabry#10227505/02/03; 22:10:37

What is it about that Larouche guy that makes him so smart he's got alot of years behind him but doesn't show up in the pressExcept he's a convicted felon they didn't miss that oneI guess he's on to their smoke and mirrorsDo you think he's too political? some think he's too ambitious
i wish I had his energy.

mikal@Gold Standard#10227605/02/03; 22:20:55

Re: silver bugs "far more hardened"? Why? After all they've been through? Maybe you are closer to them than you think.
Re: "A dearth of evidence" While I like my silver investments, I find that there are as many doubts about silver as could possibly be construed towards gold. That's why I have both. But I campaign for honesty and truth as long as I live and the PM's have been a part of that for many years, and will remain so. That's why there are so many posters and lurkers here for exmple- each seeking and finding and sharing truth with an open mind and carrying it with them throughout the day.

Black BladeMarket Wrap Up – Hartman#10227705/02/03; 22:30:52


The dollar decline has been a very happy occasion for precious metals investors this week as gold added another $7.70 to close at $340.70, after bouncing its head off the $343 resistance level yesterday and today. Once we clear $343 there will be some resistance in the $350 area, then we should be clear for another run to test $400. As the dollar declines, the price of gold goes down in other currencies, which puts strength in the physical market since foreign investors can buy at bargain basement prices. Silver also put in a nice performance this week to close $0.15 higher at $4.77 per ounce. Notice the dollar was down 1.4%, but silver added 3.2% to its price. Moving forward silver will have more catching-up to do, so I expect it to outperform within the commodities sector, and especially outperform versus paper assets. Silver is undervalued based on its own fundamentals of supply and demand, but the declining dollar will work to multiply the coming gains for silver investors.

Black Blade: I did a "quick and dirty" run on the numbers and I figure that gold should have been pegged at $343.60 and silver at $5.01 (admittedly for silver this is more a speculative guess on my part) against the drop in the dollar this week. A floor trader was quoted earlier today saying that a fund was "selling the living daylights out of it (gold)". That may have been one reason why gold had difficulty holding above $343 an ounce. It may have been profit taking and reallocation of funds – who knows. The slight boost in the USD and the equities rally probably held some potential buyers in check ahead of the weekend. I understand that London will be closed on Monday due to a public holiday, so the market may be a little off kilter. That said, physical buying has been strong and should get stronger as the dollar weakens and the global economy tumbles. Another potential "fly in the ointment" is there are calls by some influential people in Japan to get aggressive with currency intervention again. If Japan continues to scuttle the Yen the effort will fail as it has in the past with nothing to show for except a lot of extremely low yielding US dollar denominated debt holdings and a worthless Yen currency. The Japanese monetary authorities are very desperate and now are left grasping at straws. Many Japanese are not waiting around to be taken to the cleaners by these foolish policies and are seeking asset protection, including buying physical gold. Gold buying has been described as "brisk" (I wish I didn't misplace the report because it would have been excellent to quote from here). No matter, continued dollar weakness must continue due to the extreme accumulations of debt and soaring record deficits (current account and budget).

BTW, Hartman has some interesting market notes as well. The "shell game" at the Labor Department would be almost "entertaining" if it did not reflect real pain for American workers. Also, he covers some interesting Berkshire Hathaway purchases (Warren Buffett).

21mabryMikal#10227805/02/03; 22:31:14

I dont know I am just starting to read and listen to his stuff.The present group running the country now turn me off totally, I am gonna read Larouche and then decide. 21
mikal@Gold Standard#10227905/02/03; 22:33:31

Re "Maybe you are closer to them than you think."
Should read: "Maybe you are closer to goldbugs than you think."
P.S. Your treatment of silver stockpiles is quite brief, but generally correct, IMHO. Mexico should not be overlooked. But mainly I am wary of various European (and Asian) hordes known to exist. Specifically, no one has announced at what point these, mostly private, stockpiles become weak hands and sell or simply attempt to shake down(out) the market with some very unexpected tonnage.
Nonetheless I remain a physical PM's advocate with a readiness to quickly sell either gold or silver on signal. There will be great volatility, but opportunity to buy low and sell high. At some point though, it's possible there should be a prolonged wait, with open eyes, before either action is committed.

Black Blademabry21 – Another Reason NatGas (energy) Prices Will Remain High#10228005/02/03; 23:00:45

US hunting ground off-limits to drillers


Two years after the release of a US national energy strategy designed to boost domestic production, the industry still complains about restricted access to federal lands while environmentalists counter that a "for sale" sign covers most of the western states. About one-third of the land in the US is controlled by the federal government and most of that is located in the west. The National Petroleum Council estimates that 63% of future natural gas resources in the west are under government lands.

"The intent of the federal government was clearly to use executive orders to streamline the well permit application process," says Lee Fuller, vice president of government relations for the Independent Petroleum Association of America. "That hasn't happened because of a well-orchestrated litigation campaign by anti-development groups on resource management plans and environmental impact statements. "We've heard that in some Bureau of Land Management (BLM) regional offices, up to 50% of their funding has been redirected from hiring more personnel to handle permits and put toward litigation support."

One of the main battlegrounds is the Powder River basin in Wyoming and Montana, which is thought to hold up to 45 trillion cubic feet of coalbed methane gas. The Department of Energy analysed activity on 29 million acres of land in the area, 16 million of which are owned by the federal government. The study found that 1% of the resources were off-limits because they were under national parks and wilderness areas that are closed by statute. Another 29% are completely off-limits due to administrative actions by federal agencies. Some 38% of the gas resource is available, but with various types of leasing stipulations that prevent access during various lengths of time of the year. The remaining 32% is available with standard lease terms, which still contain numerous environmental requirements.

Black Blade: This is the main reason for the difficulty in bringing NatGas supply to market. Land access issues have been a leading cause of the energy crisis in recent years and that will not likely change until utility rates soar high enough and long enough to put pressure on US legislators. Until then and even beyond the higher energy costs will have a devastating impact on consumers and industry.

21mabrykyoto treaty#10228105/02/03; 23:07:03

Black blade, if ever ratified the kyoto treaty on global warming places a strong use of natural gas to replace coal and oil. I imagine that would reduce supplies even more. 21
21mabryBB#10228205/02/03; 23:14:09

I imagine much of this western gas could be on indian reservations.If they allow drilling I hope these tribes benefit from them. I have a soft spot for their plight as a people, they have been decimated as a people.
Black Blade21mabry#10228305/02/03; 23:48:34

NatGas would be the primary source for hydrogen in the "hydrogen economy" if it ever becomes viable as electrolysis (hydrogen from water) is an energy loser that is more energy going in than is gained. There are NatGas powered vehicles but the infrastructure for refueling is lacking. As far as power generation, NatGas fired power plants are easier to permit and can be constructed faster due to stricter environmental constraints for oil and coal fired power.

Actually Reservations are technically "sovereign nations" under treaty. However, they are not always treated that way by the individual states. That said, they side step a lot of government restrictions. The Crow Reservation on the Montana side of the border is embarking on the coalbed methane track and several wells are planned. The state of Montana (which is known to be anti-development) is against it. But they can't really stop it. Many western reservations are exploiting natural resources, however, not many have NatGas resources though some have coal, phosphate, limestone, aggregates, uranium, etc. Funny thing is that some private landowners are opposed to CBM production even though they are somewhat in receipt of "stolen goods" as far as many tribes are concerned. In fact the majority of Inuit and Alaskan native peoples are in favor of drilling ANWR for example.

- Black Blade

Black BladeThe Dollar Nightmare#1022845/3/03; 00:25:32


Thursday, the buck fell to new four-year lows against the euro (really the "synthetic euro", because the currency hadn't even been introduced yet four years ago). Meanwhile, the Dollar Index, which shows how the dollar is faring against a basket of major currencies, has fallen 9.2 percent this year.

The nightmare scenario - It comes up every few years, and it goes like this: All those global portfolio managers, worried about the hits they're taking from the dollar, are going to start selling U.S. assets which is going to: A) send U.S. stocks lower and B) further damage the dollar. Which is only going to make the global investors (and U.S. ones) more twitchy, and beget more selling. Which will beget more selling. Pretty soon you have a massive rush to exit U.S. assets, and a global financial catastrophe.

Pretty scary, right? If it's any consolation, there have always been people who worry investors are going to rush out of the United States. They point out that the United States' has a huge current account deficit, meaning that, on net, foreigners own far more U.S. assets than U.S. investors own foreign assets. Eventually, the argument goes, the foreigners are going to want to repatriate their money -- and if the dollar is falling badly, they may want to repatriate it in a hurry.

Black Blade: Of course the author is making light of the subject and really doesn't have a good handle on the subject, but the rush out of the dollar is happening and now there's the Euro as an alternative, not to mention better returns in other countries. There is much more to the story than this simplistic story line but the point is the dollar is falling and will fall further.

Black BladeTHE EMPLOYMENT SITUATION: APRIL 2003#1022855/3/03; 00:26:45


The unemployment rate rose to 6.0 percent in April, and nonfarm payroll employment edged down by 48,000, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. In April, job losses continued in manufacturing, some travel-related industries, and department stores.

In April, 4.8 million persons were working part time even though they would have preferred a full-time schedule. The number of such workers increased by about 600,000 over the year.

In April, 1.4 million persons were marginally attached to the labor force, the same as a year earlier. These individuals wanted and were available to work and had looked for a job sometime in the prior 12 months. They were not counted as unemployed, however, because they did not actively search for work in the 4 weeks preceding the survey. There were 437,000 discouraged workers in April, up from 320,000 in April 2002. Discouraged workers, a subset of the marginally attached, were not currently looking for work specifically because they believed no jobs were available for them.

Black Blade: A rundown on "official" unemployment. There are a large number of underemployed and the number is rising. This is not good for the so-called "economic recovery".

The Invisible HandBeyond the pale #1022865/3/03; 02:32:28

Last Saturday (04/26/03), I quoted The Independent on Sunday as revealing that the case for invading Iraq to remove its weapons of mass destruction was based on selective use of intelligence, exaggeration, use of sources known to be discredited and outright fabrication

The FT article in the URL box is entitled "Doubts grow over Iraq 'smoking gun'"
Saddam Hussein appears to have shut down or destroyed large parts of his unconventional weapons programmes before the war in Iraq, a senior Bush administration official who has been closely involved in the quest to purge Iraq of weapons of mass destruction said this week.

I just wonder what the British Sunday papers will be saying tonight at 12 p.m., British Time, that should be 5 p.m. today Usagold Standard Time.

In the meantime, The Times is reporting in its Saturday editions that Mr Bush will take far longer to forgive Herr Schröder than M Chirac over their opposition to the war, a stance that may have far-reaching implications.
It suggests that Mr Bush's team accepts M Chirac never gave anyone his word. He is French and takes a different view. But for Herr Schröder, the mood was not so forgiving. The view at Camp David was that his anti-American language during the German elections was beyond the pale,,2-667521,00.html

My dictionary defines "beyond the pale" as "outside the limits of social convention". Does this mean that the Bush administration allows the Old Continent to advocate its own (monetary?) policies as long as no anti-American language is being used?

Can anyone(Goeimorgen, Belgian) guess some other far-reaching implications?

Mr GreshamTrail Weekend? Trail Sunday? Hiker Alert!#1022875/3/03; 04:39:43

Occurred to me while lying awake in bed (jet lag recovery) to pop into FOA's Trail and read through with two windows open -- one to read, and one to post occasional thoughts.

Can anyone imagine reading through it _without_ having a lot of comparisons jump out at us from current and recent events?

(Or is it all happening so near to his descriptions, that FOA has become almost commentary rather than prophecy? I don't know -- fuzzy memory -- that's why I need a refresher!)

Anyway, occurs to me now to ask whether anyone else wants to make an intensive weekend sometime this merry month of May out of reading through the Trail together, and seeing what it offers up to us, with so much more experience behind us.

Here we are, at the end of a Dollar/Oil/(Gold?) War, beginning another Dollar slide, and PM rise. Also, a Saudi pull-out. Does this hit just about every point on the Trail, or what?

(I'm also imagining that immersing ourselves in this might be our best springboard to whatever future vision we can conjure up for the direction ahead.)

Any takers? If so, I probably don't want to start out on this alone.

Suggestions for when? Maybe 1-day only, like on a Sunday? Try May 11? (Everyone who might be interested will have a chance to be alerted during this week. Anyone who wishes to "read ahead" and make notes can then do so.)

Cavan ManThe Invisible Hand#1022885/3/03; 06:30:55

"Beyond the Pale" is a term coined hundreds of years ago by the English to describe the area outside (essentially, the rest of the country) of a large area surrounding what is present day Dublin. The murderous English could control but a small area of the country at that time and "beyond the pale" was an area they did not venture.
Belgian@ Gresham and @TIH#1022895/3/03; 07:26:13

Gresham : Together with the beautiful weather overhere...Your "wise" posting made smile with a nice warm feeling of undefinable joy ! Sounds almost kind of a intimate declaration.


Time and time again, I do find new evidence of FOA's theories. These theories are NO prdections but an all embracing and consistant view of what is happening NOW ...and MOST PROBABLY will happen in the not so distant future !

But I must remain fully honest with you...I gave up on repeatingly proving, point per point, where things are happening as said by FOA ! That's why I've been smiling overhere when reading your post (FOA reminder).

There are a multitude of reasons, why I stopped referring to the FOA-Phenomenon. The most important one is simply because IT IS is in the process of developping ! We will experience "it" !

I do realise what "shock" it will be, when we all have to accept that the US$-Reserve is in the process of losing its "Reserve" status. All people do prefer a status quo on this, whilst intuitively feeling it becomes more and more impossible. Don't we all live our lifes without the thought that one day w'll die ?

Each time, FOA is communicated to a so called *authority*, the only response is a deafening silence. A paralysis !
A silent expression of "HOPE" it want happen !

Bush's re-election campaign has already started. It is a campaign that will NOT be based on the certainty of an economic recovery. It will be based on military logics.
I simply substitute President Bush with the US$-reserve.

Am patiently waiting for the first person to evidence "why" FOA has it completely wrong and things will NOT turn out the way he has been stating.

I do NOT need the evidence of a POG-explosion as an argumentation that FOA has it right ! Understanding FOA is understanding WHY and HOW the POG is contained ! FOA's story is a "consistant" one. A "whole" story and not a fraction of the Gold-story. Goldbugs want "it" to happen today ! Gold-Advocates give time...its time.

People's emotional approach to the US$-euro-Gold-finances and war on/for handicapping their view/insight on the Big Picture. Very human and understandable.

There must be a major "aversion" to Gold in order to let things happen as they are ! Bringing Gold back into the epicenter of our economical/financial/monetary/political arena is rightout *shocking* ! One wants to postpone this as long as possible and keep on believing that it can be postponed for ever !

Is the growing US$ budget deficit + trade deficit, reversable ? Did this present evolving phenomenon had its alikes in the past ? Is it really different this time ?
How "cyclic" or how "systemic" is the present global situation on the US$ AS RESERVE CURRENCY ? That's what FOA is all about, isn't it ? What are the chances that the US$, survives this deep malaise, again ? What has changed that is slimming the dollar-reserve's chances to survive...or to keep functioning as it did in the past 3 - 7 decades ?

The present €/$ exchange rate is telling us "something" !
The "fabricated" geopolitical embroglio is telling us something more. Easy money tells us already very much for quite some time now. One day, more and more indications are going to give evidence that the world's reserve-currency is strongly questioned and has come under attack.
Is all the "maneuvering", dollar survival related ? I still think it is. Worse...I think this process is as irreversable *NOW*, as it has never been in the past 3-7 decades. My main argument remains Dollar-Debt ! Debt is "the" silent killer.

Daily, we get hundreds of subtle indications that can be related to a dollar-reserve under siege. Think for instance, why the UK isn't joining EMU and $-must-$ remain the US's staunchiest ally !!! Look at the pound's exchange rate against dollar and euro.


Thank you Gressie.

Belgian@ TIH ('k was oe vergete zenne)#10229005/03/03; 08:55:02

Shroder (Germany) made a terrible mistake by joining La France ! A terrible dollar-unfriendly mistake of historical proportions. Result : The Shroder-clan will not be re-elected (regime change, whoepsss!) and the more pro-dollar faction should be encouraged to win the next elections and take a more accomodative-friendly attitude towards the US$ in their €/$ exch.rate management. The pruning of FOA's bonzai !

For the time being, the dollar (reserve) doesn't mind that the euro exists and evolves...for as long as the euro "remains" DOLLAR FRIENDLY ! A gentle euro is OK but once the euro should show some explicite ambitious signs of dollar-challenge.....oeeeeiiiiiiii ! Does this make it clear WHY Euroland (a growing faction within) remains soooooooohhhhhhh silent about its real intentions !?

I remember President Bush, insisting publicly, Turkey to join EMU ! What a very strange thing !? Nonooooo TIH, France was (is-?) opposing the idea of having Turkey in EMU now, for a whole bunch of very good reasons. And we certainly agree that EMU means euro.

The global €/$ matters are treated as a sort off mini side-show, by the general (???) media. It is a global process of "democratization" and liberation that is on everyone's real agenda . 3x B.S. !!!

The dollar (dollar-reserve) wants as much dollar-friendly regimes on its side, as possible. Quite normal and "accepted" standard procedure for the past 3 decades.
Today, this recruitment of dollar-"friends" has become less evident ! And how "friendly" do ancient dollar-friends, actually remain ? And more important : DO WE STILL NEED THE DOLLAR AS A RESERVE ?

Maybe I have it completely wrong, but...isn't the dollar-block showing us that it is on the defense, rather than preparing for a reserve-transition ?
That's how I interprete the war on oil...war on Gold. Isn't that evidence that the dollar-reserve is losing its once oh so mighty reserve-autority ?

American citizens dont care about their dollar being/remaining a reserve-currency or not. Why should they ?
But it are all the non-Americans (non dollar block) who care about their reserves...being/remaining dollar-reserves !!! Worse...we can't ship those loads of dollars back from where they came from ! Soon, Euroland businesses will realize what this means ! We will have to change our trade flows !!! That's why the dollar is on the conquest of new territories (ME/Eurazia). That's why Euroland, Russia, China, ME show signs of sticking more and more together, dispite their intrinsic differences ! Whatch the debates on this effect coming soon. And sooner or later it will be the euro-dollar relationship that will come into the forefront !
By then Gold's role will become clear within the euro-concept and challenging the old dollar-gold system.

The above is the main reason WHY the US (dollar-block and friends) must go it solo (unipolar)! With as much friends if possible...whole alone if we (US) must have to !
coconut cheers to you, TIH.

MKBelgian. . .#10229105/03/03; 09:42:36

You are seeing evidence of the 'pruning of FOA's bonzai' with the announcements that military bases will be moved from Germany to Poland, Hungary and Bulgaria. (Backdoor, the appearance of a contentious force within its borders will force Europe to ratchet up its military capabilities and that is what the meeting between the Military4 was all about) The U.S. will substitute bases along the Gulf (including those in Saudi Arabia) for a major military system erected in Iraq. The New World Order (erected with a bridge across the Atlantic) feared by the conspiracy theorists has turned to dust; what we really have is an attempt at an American New World Order being fashioned from the wreckage of Iraq -- and I'm not talking about the rubble-filled streets of Baghdad, but the old post World War II entente. Divisiveness (divide and conquer) -- not conglomeration -- has become the point of reference for the present time period, and unless something is done quickly, I fear the positions will become like cement, not to be penetrated for many years to come. The rhetoric is becoming more clipped, pointed and directed -- something I have not seen the entire time I have been a student of interest in international political economy -- some 35 years. It is surprising to say the least and the fact that the animosities are being flagrantly thrown around as if they were so much fairy dust goes beyond anything most of us define as the art of diplomacy. The United States has decided to drive a wedge into Europe -- perhaps a dagger aimed at its heart. The Europeans must decide how they will react. Yesterday, a Belgian cargo plane full of medical supplies destined for Baghdad was turned back by U.S. authorities and it wasn't for fear of the SARS virue. Perhaps the underlying strength in the gold market as I hinted in my Quick Notes the other day may be tied to that fracture, and as you are saying, the euro as well. This is another in a long list of symbolic underpinnings that are sure to make the upcoming discussions in Evian the most heated and divisive in G7's history.

(To FOA: This raises special problems for Tony Blair and the United Kingdom. They will try to play both sides from the middle -- and that could be their most effective foreign policy. ( I wouldn't blame them in the least bit, but Blair has his work cut out for him.) I believe you will see the British government announce that a euro vote will have to come at some point in the future -- what they will really mean by this is that under the current circumstances they can't join the euro -- because that would be akin to aligning itself with Europe against the United States. In fact, things may go in the opposite direction. There may come a point when elements in the European Union will work toward striking UK's name from the original Union agreements. Why let UK have any trade advantage at all? Tony Blair sees this and is working day and night to keep things patched in, but Putin showed him the door in St. Petersburg, and Chirac isn't any more receptive. Things are going badly all the way around. I believe we will be living in a substantially more contentious world over the next decade than we have in the tumultuous one just passed. What say you, old friend? Are you ready to pay that now even more depreciated dollar? Smile............. By the way, one more thought, this may lead to a smaller but more well-defined euro sphere as the direction becomes clear. And in the end, this will be better for the euro as some of the compromise and restraint will have been wrung out of it.)

Gold ownership makes a great deal of sense for both Americans and Europeans under the circumstances unless, of course, you know ahead of time who is going to win the upcoming currency war. Better, I would think, to hedge one's bets. What was it that Another said: Something about small dogs lying low when lions roam with empty bellies . . . . .Maybe someone can find the exact quote.

Dollar BillBelgian-Mr. Gresham#10229205/03/03; 09:54:34

I agree Belgian, Chirac was counting on or expecting the kind of ghastly nightmare that the Iraq war could have easily been. America was extremely fortunate.
He has made the move to rally the world to the euro way too soon I am guessing.
The Dollar is not ready to be toppled and even though
the German Shroder said (quoted on the forum) that german companies were prepared to handle ("factored in"I believe was the qoute)3 years of euro strength versus the dollar, I dont believe it.
The 3.5 or 4.5 trillion cash that has been mentioned recently as being on the sidelines, I'll bet is on the dollar side in this war. The US defense of leaving the strong dollar is, or must be, a tolerable action that
will harm the euro nations exporting businesses enough till they cry "uncle".
Is is possible that by triggering this currency war this soon, that the euro, or the european countries, france and germany at least, will suffer too much and go into deflation. With the ok and a push from the US.
GAB guano readings predict a step back from the cliff
once we get there, doesnt it appear that the US will push
germany and france to that cliff? WIth chirac actively
continueing this struggle against the dollar openly, it is coming to mortal financial blows and I just dont think
the Bush team will back down. They see it, they are pissed for a few reasons, and France wants a currency war.
Chirac thinks it has to happen on his watch.
Maybe the US will take the chance and chirac will play his hand wrong all the way to a changed future where the euro is not headed to the FOA future.
The Jews are laced throughout the financial world, and they
are STILL white hot about that messy little holocost
issue that everyone may think they have "gotten over".
The euro is not Israel's freind, and I just dont think
Chirac understands the powerful forces arrayed against him.
Just guessing.
Mr Gresham, Great Idea.

21mabryFOA#10229305/03/03; 10:00:06

Mr. Gresham I will read the trail for that sunday may 11. 21
21mabryLarouche#10229405/03/03; 10:11:20

I am not a lyndon Larouche supporte, I have not read enough of his work yet. What I read from his writings so far is the same as a lot of things we talk about on this board, in fact the man would be at home writing in this forum. He speaks about golds role in economics, discusses the new pax americana that TPTB are trying to implement. Although someone needs to help me out on his constant discourse on plato'socratese,and aristotle.
Great Albino BatMr. Lyndon Larouche#10229505/03/03; 10:32:08

Some guano for mabry21:

Mr. Lyndon Larouche is an intelligent man. His personal goal is power, and if he attained it he would - in my opinion (even the GAB has opinions) - be quite likely to rule like a dictator with a policy not very different from Socialism - just Socialism with a Larouchian face, you might say.

His policy is intelligent: he is trying to turn the flank of the American electorate, by furnishing its "intelligentsia" - its scientists and more highly trained (not to say educated) with ideas which the standardized and "dry-cleaned" educational system of America has completely wrung out of all curricula.

So, that is why he is talking about Plato and Socrates and Aristotle - themes which were part of EVERY educated person's formation in 1880, but which have been completely forgotten or rather, suppressed.

If Larouche wins over the brightest, the rest will follow as a matter of course. This is what he is attempting to do, and the only thing he could do, to turn America on to another course, and away from its present suicidal course.

Prime guano from the GAB.

Belgian@ M.Kosares#10229605/03/03; 10:36:46

You : The NWO (with Atlantic bridge) >>> American NWO (attempt) ! Has been confirmed by Etienne Davignon (Belgian Bilderberger).

Your "cemented positions" will succomb under an increasing dollar under attack (imo).

As long as we hear the "rhetoric"...there is hope/scope for reconsiliationarry efforts (moderation). Watch out when it becomes silent (post Evian). Subtle sign of major action(s).
There is always that uncertain elections outcome that can change major policies (or the speed of the existing policies). Part of the pruning work, bonzai growth, final form and timing of the finale.

UK : Don't exclude, too hastely, the possibility of dramatic, sudden shifts towards EMU. Tony and "the" old/present ideas are not forever. Tories are watching.

MK : It is not a matter of winning/losing currencies ($/€). It is Gold that will win with the euro's leverage.

Regards from a tiny small Belgian (studentical) dog, somewhat afraid from a hungry lion pack. Nice WE to you all. Gold ownership for Eurolanders makes as much sense as it does for dollar-holders/users, though for somewhat different reasons.

21mabry(No Subject)#10229705/03/03; 10:47:26

Thnx GAB I need to start reading the classical greek thinkers. Two more questions.Why does Larouche dislike eucldian geometry so much and who is Gaust I guess he was a math scholar specializing in algebraic thought? THNX AGAIN 21
USAGOLD / Centennial Precious Metals, Inc.A complete gold education for $5.95!#10229805/03/03; 10:52:15

ABCs of Au by MK

The ABCs of Gold Investing

"If you are looking for thorough guidelines for making good decisions about private gold ownership, The ABCs of Gold Investing has all the answers." --Money World Magazine

Please Remember: It is your purchase from USAGOLD - Centennial Precious Metals that nourishes these pages.

misetichThe dollar nightmare - The drooping greenback is starting to get investors jittery#10229905/03/03; 11:17:28


NEW YORK (CNN/Money) - In just a week, the Treasury Department is going to unveil a new $20 bill that's going to use, ahem, a "subtle background color". What the color is going to be is a state secret, but the way things are going for the U.S. dollar lately, the appropriate hue for the Jackson is going to be red.

The red... we mean greenback keeps dropping and in some investing circles this is causing increasing alarm.
All of which leads us to the nightmare scenario. It comes up every few years, and it goes like this: All those global portfolio managers, worried about the hits they're taking from the dollar, are going to start selling U.S. assets which is going to: A) send U.S. stocks lower and B) further damage the dollar. Which is only going to make the global investors (and U.S. ones) more twitchy, and beget more selling. Which will beget more selling. Pretty soon you have a massive rush to exit U.S. assets, and a global financial catastrophe.

As tax revenues shortfalls continues at both the state and federal level, government spending increases - deficits will soar increasing the dependency on foreigners

The US $ corrections is far from over

All On Board The Gold Bull Express

mikal@misetich#10230005/03/03; 11:42:22

Re: "The gold bull is far from over." Nice summation and welcome back.
And yes, Belgium is correct that the movement of gold is preeminent over that of currencies. A recent, balanced media article on the declining dollar's pros and cons, quotes an economist in Europe. He mentions the usual, losses for some investors, gains for others; but proceeds to specify numerous great advantages of a stronger euro for Europeans- lower prices for: energy inputs, foreign parts, foreign food and other consumer and durable goods. Their growing "purchasing power" plus "ROI"-returns on investments in euro instruments like bonds and gold.

Great Albino BatOn reading the Greek classics...#10230105/03/03; 11:50:12


I am enormously pleased with your decision to begin reading the Greek Classics! If you carry out your decision, even to a small degree, you will in the classics true enriching treasures to last you a lifetime. What a wonderful experience you have awaiting you!

I suggest you begin with Herodotus, known as the Father of History. Then go on to "Parallel Lives", by Plutarch.

You can enjoyably read Herodotus by opening his book at any page. Read about the world's first recorded "swinger" and what happened to him. How Darius became King of Persia with the assistance of his horseman.

You can also read a present-day novel, based on the Classics, by an Italian whose first name I recall is Valerio; it's a fascinating trilogy on the Life of Alexander the Great elaborated on the data in various texts, and the first is "Child of a Dream".
Why does Larouche love Gauss and detest Euclidean geometry?

This is a profound question which could only be answered properly through reference to a world-view that is difficult to resume in a few words.

It seems to me that Larouche is captivated with an idea of Society as a machine that can be operated scientifically, with no limits to its performance: unlimited development. This is part of his attempt to seduce the technocratic element in the US, to whom he plays up by talking of "higher" mathematics. Since the US electorate is seduced by technology, he thinks, perhaps correctly, that if he can pull over to his side the technologists in the US, he will have on his side the leaders whom the electorate will follow blindly.

I do not believe in the possibility of unlimited development, as it is an inhumane objective. Society is NOT a machine to be operated by any person or agency. Larouche is blind to tranquility and repose as desireable values. Therefore, he is not interested in gold and personal independence.
St. Augustine in his "Confessions", mentions that in his time (360 A.D. more or less) 40 solidus were sufficient to maintain the life of a scholar for a year. A solidus was about 3.5 grams of gold, so that made 4.5 troy ounces of
gold enough to pay for food, lodging, clothing, servant(s) and entertainment for one year, in his time.

Guano from the GAB

mikal@Misetich#10230205/03/03; 11:55:47

My:"The gold bull is far from over." was meant to be your: "The U.S.$ decline is far from over." Still, a nice summation, and the two have very similar implications. But I feel gold will be in a bull longer than, and in spite of, the dollar. Most objective gold analysis acknowledges far more factors than currency movements, including cycles, rigging of markets and fundamentals- social, political, religious, cultural, geographical, economic, investment, etc.
Chris PowellFormer Fed official's presentation was deceptive#10230305/03/03; 11:57:46

Former Federal Reserve official's presentation to the
Committee for Monetary Research and Education
pretends that the gold price isn't the inverse of the
dollar price and interest rates.

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.

mikal@misetich#10230405/03/03; 12:00:05

Correction: " will be in a bull longer than, and in spite of, the dollar BEAR."
Belgian@ Dollar Bill # 102292#10230505/03/03; 12:29:09

The invasion was a cake-walk, known in advance and organized as such for a multitude of reasons ! Try to find France's (and its willing partners) role into this. Yes, DB...a lot of things don't are what they seem, more often these days. Cetainly to be continued.

Yes, there is a general consensus (whoewww) that there is a "Benign Neglect" around the US$. Waw, what a nice wording.
FOA stated that Gold cannot/will not move before the dollar gets out of *USE* ! One doesn't "topple" a decades old reserve currency, overnight, especially when that currency has just come to pass its cycle-top.

Planting new and more US-military basises is not going to give the dollar more "reserve" status. That's "old" logic and not applicable anymore. On the contrary, the increasing dollar-military-might is dollar-counterproductive in today's evolving constellations. Watch the nefast "Yankee Go Home" effects !
In the ME and Balkans (New Europ) as well. Euroland will NOT cry, uncle, for as long as we get the normal flow of crude oil and gas. It is the global economical detoriation that is increasingly affecting us ALL ! This is the main reason (economic reality) why constraints remain on the $/€ exchange rate, from ALL sides !!! Dollar block and euro block and their respective allies. In these bad times, nobody wants trade-wars as well. But will this remain so ?
Can the US (THE DOLLAR) remain the export savior of last resort, indefinitely ? No it can't !

There must be a breaking inflection point that puts an end to the ongoing and increasing currency battle/competition.

It is much more than a row between old Europe and the US...much, much more than that ! Look for instances at wich growing powers that are not permanent members of the UN !

Not defla-inflala, dear DB, but "debasement", "competitive devaluation", "permanent depreciation", are the hot topics of today's global monetary debacle. Deep intrinsic rot on top of insane imperialistic maneuvers. Contained Chaos imvho.

Demonizing France is a side show. France is NOT alone ! But its willing partners are of a rather discrete type.

Allow me to skip commentary on Israel's role into the equation. London based James Rubin plays a role into the UK's aversion for EMU. And unfortunately, the jewish internationalists, don't realize that they will carry the burden, again, when this dollar-offensive should crash ! But that's another story.

FOA msg 101 : At the right time (!!!) the euro-zone will withdraw from the IMF (Iraq-?), leaving the US and its factions as the only support for dollar credit assets held overseas. Then the evolution of the SDR use, our guide (A) knows so well, will be complete. Etc...

...dollar-credibility placed in question...

Thus we see a trapped currency-policy, that can only travel towards intense dollar inflation, riding ever lower paper gold values....

Their governments (euro/BIS faction) consider their current derivatives based gold market to be just as important a tool in economic and INTERNATIONAL affairs as the dollar gold exchange standard was prior to 1971.

...political attitudes concerning gold and its prominent position in INTERNATIONAL CURRENCY VALUATIONS.

A dollar-debt that cannot be traded back into the US economy to receive goods at anything close to today's prices !

DB : This world on the dollar-system will most probably be pushed by the recent/future events (PNAC) to a point where the dollar-reserve system has become unworkable and will be forced out of order. The consequences will be less harmful than if we should have remained on the dollar-reserve system. Do you see any sign/action of President Bush that could avoid such an outcome ? Today's and coming, US exposure of military might is a sign of intrinsic dollar-weakness to me.

The well known, specific, tactic of "fait accompli" (accomplished fact)
applicated on the present and future occupations (dollarization) is a dead end street, sooner rather than later.

Gandalf the WhiteSir GAB -- Nice to see you here again on the WEEKEND !#10230605/03/03; 13:24:30

Great Albino Bat (05/03/03; 11:50:12MT - msg#: 102301)
On reading the Greek classics...
Don't stop now !
You are on a "ROLL" !!
KEEP them coming !!!

Artie FarkleFOA quote#10230705/03/03; 13:41:34

"when a thousand hungry lions fight over one scrap of food, small dogs should hide with what's in their belly"
BelgianA more balanced a safer World.#10230805/03/03; 14:13:10

Nice WE reading on US/Euroland relationships. At the end, one can ask himself if the euro and the dollar, can/will, live with or without one another.
BelgianPower and Weakness by Robert Kagan#10230905/03/03; 14:24:45

Hope this link works.
Kevno but this one works:#10231005/03/03; 14:26:46

it's a zero, not an O :)
BelgianKEV#10231105/03/03; 14:33:50

It must be me...that zero. Thanks mate.
21mabryGAB#10231205/03/03; 14:42:15

GAB, Thanks for the answers. I have a feeling will be reading you in the Hall of Fame one day. 21
Kevno zeros here#10231305/03/03; 14:45:00

i doubt there are any zeros on this forum, Belgian. i can only see heros.
the real zeros are the ones that keep me awake at night (Minister Durand and her airplanes) and the old dog that doesn't understand why the CVP in the 80s abolished the tax on Gold over here (ex-Minister Tobback, in tv program Ter Zake tonight).

misetichDollar Whisper- Don't look now, but the US dollar is falling. -- Stephen Roach - #10231405/03/03; 15:28:29


The problem is the gap between nations with current-account deficits (mainly the US) and surpluses (mainly Asia but also Europe) has never been larger. And for a saving-short US economy, a dramatic deterioration of America's fiscal position points to an ever-wider current account deficit over the next few years -- moving from a record 5.2% of GDP in late 2002 into the 6.5% to 7.0% range by late 2004. Meanwhile, with growth stymied in the rest of the world, non-US external imbalances could well be moving into ever-wider surpluses -- leading to a highly unstable disequilibrium between deficit and surplus regions. This is a recipe for a significant currency realignment. The only question in my mind is whether the dollar falls quickly or gradually. There are good cases that can be made for either outcome.

Investors appear inclined yet again to propel the US stock markets higher anticipating a US led global recovery -

The betting of these investors is that this time the US economic recovery is just around the corner - yet the majority consensus has been proven wrong time and time again in the last 3 years as the jobless recovery has failed to materialize

The number of SM optimists is fodder for the big bad bear who is still licking its chops in anticipation of ANOTHER raid

mikal (05/03/03; 11:42:22MT - msg#: 102300)


Belgian@ Kev#10231505/03/03; 17:11:21

The fact that during a pré election debate, suddenly and completely out of the blue, without any explicable context, there is a statement (question-disapproval) about the past decision to remove VAT on Gold...means, that there is something brewing about Gold, rather than having something to do with taxes, wich was non of the subjects. I'll try to find out.
The Invisible HandWaiting for the golden coconut to fall!#10231605/03/03; 18:11:10

Intervention, asnybody?

Whereas the Observer (which says that the European Central Bank and the US Federal Reserve will also decide on rates this week and that both are expected to make no change.)
is reporting that City economists say that the Bank of England is poised to cut its base rate this week, but that the weakness of the pound may yet postpone the decision.,6903,948868,00.html ,
the Sunday Times says that the City expects the Bank of England to cut interest rates to 3.5% this week, despite sterling's fall to a four-year low against the euro,,2086,00.html

Is this an acceleration of the weakening of sterling (in order to have a favourable EMU entrance exchange rate) as, what Belgian called in msg#: 102296, a dramatic sudden shift towards EMU? Or is this mimicking the dollar by what the Independent on Sunday calls in the snip which follows a competitive devaluation?

Economic view: Europe's force de frappe
The US now owes France and Germany no favours. It may not be openly vindictive but it is not going to help them
When the dollar rose to unsustainable levels in 1985 and world trade was threatened, such fears led to the Plaza Pact, so-called because it was signed at the Plaza Hotel in New York, between the G5 nations (as they were in those days). Their main central banks agreed to intervene to curb the rise. But it would be hard today to assemble a similar coalition of those willing to support the dollar, were it to fall too low. For a start, global economic co-operation is going to be harder in the wake of the Iraq bust-up. And in any case it would suit the US administration, whatever it might say, to have a more competitive currency. Fears of inflation have given way to fears of deflation. While it is far too early to think in terms of a series of competitive devaluations, as took place in the 1930s, the fact remains that in a period of slow global growth, it helps to be able to corner a few more exports by being able to undercut competitors.

Intervention, anybody?

(sorry, I found no articles on the absence of WMD in Iraq.)

TateChirac is not alone#10231705/03/03; 18:34:08

Dollar Bill
Chirac is not alone. Where did Frances foreign minister go while bombs where still falling over Baghdad? US with their pro-Israeli foreign policy alienated entire Muslim world. They only managed to bribe one Muslim country -Pakistan. After Iraq occupation and $ devaluation number of truckloads of $ will have go to substantially higher to continue US foreign policy. This is why it is getting cheaper to drop Daisy Cutter bombs then continue bribing policy.
Chirac remembers history well when France shipped $$ back where they came from. Who was the victor?
I still remember recent US Secretary of State (Snow's predecessor) say: "We never devalued dollar". Who are you kidding Mr. Secretary.

Dollar BillBelgian#10231805/03/03; 21:47:28

Greetings, I am still rereading your and Tates post to me,
but in the meantime I read the Kagan link you posted,
and here is a snippet. His attempts to describe european character left me longing for the straight talk of this forum. Here we are more willing to see naked human self interest motivations.
It was an interesting link, thank you.

"Americans, as good children of the Enlightenment, still believe in the perfectibility of man, and they retain hope for the perfectibility of the world. But they remain realists in the limited sense that they still believe in the necessity of power in a world that remains far from perfection. Such law as there may be to regulate international behavior, they believe, exists because a power like the United States defends it by force of arms. In other words, just as Europeans claim, Americans can still sometimes see themselves in heroic terms — as Gary Cooper at high noon. They will defend the townspeople, whether the townspeople want them to or not.

The problem lies neither in American will or capability, then, but precisely in the inherent moral tension of the current international situation. As is so often the case in human affairs, the real question is one of intangibles — of fears, passions, and beliefs. The problem is that the United States must sometimes play by the rules of a Hobbesian world, even though in doing so it violates European norms. It must refuse to abide by certain international conventions that may constrain its ability to fight effectively in Robert Cooper's jungle. It must support arms control, but not always for itself. It must live by a double standard. And it must sometimes act unilaterally, not out of a passion for unilateralism but, given a weak Europe that has moved beyond power, because the United States has no choice but to act unilaterally.

Few Europeans admit, as Cooper does implicitly, that such American behavior may redound to the greater benefit of the civilized world, that American power, even employed under a double standard, may be the best means of advancing human progress — and perhaps the only means. Instead, many Europeans today have come to consider the United States itself to be the outlaw, a rogue colossus. Europeans have complained about President Bush's "unilateralism," but they are coming to the deeper realization that the problem is not Bush or any American president. It is systemic. And it is incurable."

Belgian, at the start of this snippet, he talks about the US belief in perfectability of man, and at the end he talks about the "incurable". buddhists and thier ilk, and john lennon "Imagine" style thinkers, and DNA materialists, and I suppose socialists, think we can attain a perfectablity.
Bush, comes from the Bible belt, Stand in the Gap, Promise Keeper world. Where the "incurable" thing is the nature of the game here. That this place is
the chessboard of God who for, I suppose, maximum creativity, is playing a deadly serious game with the devil part of himself. In us.
And in the Bush view, and in many American's view,
the devil constantly works through human nature and the battle can never be conclusively won. In the Bush view,
there is the need to always ask god for help. And this Iraq war, which was frightening to bush, although you imagine it was more of a dominoe game of preset pieces, was to Bush,
a dilemma that he didnt want, and he didnt want to see good men die, and he was justifiably afraid of terrible outcomes,
to him the way this war went was a complete blessing from god and that is why he called the war phase essentially over on the day of the US National Day of Prayer.

The Invisible HandThe coconuts are falling #10231905/03/03; 22:09:06

"We're learning that, for example, that Tariq Aziz still doesn't know how to tell the truth. He didn't know how to tell the truth when he was in office, he doesn't know how to tell the truth as a captive," said Mr Bush.
The president said the search for prohibited weapons of mass destruction would be difficult and lengthy, but ultimately successful.
Since when are politicians supposed to tell the truth?
But if Mr Aziz is not telling the truth, why should Bush be telling it? (Remember his rhetoric before the war.) Is the latter's regime going to "plant" WMD's in Iraq and say it found them there? What is that regime afraid of?

Warren Buffett is holding this week-end his annual shareholders’ meeting in Omaha, Nebraska. Is he going to reveal something? Here's all I found: "Buffett elaborated a little on some recent moves which have puzzled some observers. " snipped from

"Puzzling times!"

FreeWillie Mr. Gresham: Trail Weekend? Trail Sunday? Hiker Alert!#10232005/03/03; 23:58:31

FOA: 02-09-01 msg#59:

(Under FOA's reply to Carl's "Lining up the Gold to Unwind the Carry Trade"):

"The next dynamic of that process in the transition of oil settlement support into Euro denominations. Notwithstanding Iraq's move as a convenient trial balloon, the mass of this transition will not begin until the US has clearly embarked on a slowdown. And that slowdown, energy induced as it is, will, this time, force the fed to fight it with a super inflationary buyout of anything and everything that defaults. Right down to your shoe laces. This, my friends is the inflation dynamic unleashed once a currency is removed from reserve status."

Compare: (See Link for source)


According to an Associated Press report of April 7, 2003, by Martin Krutzman, the US money-
supply tsar, His Excellency Sir Alan Greenspin, had this creative epiphany:

"the central bank is signaling that it is poised to move beyond its traditional buying and selling of short-term Treasury securities to the direct purchase of longer-term securities in an effort to pump more money into the banking system and influence long-term interest rates."

Oh, goodie!! More inflation!!

"Also, Fed officials have indicated they are prepared in the event of an unexpected shock to the system to lend massive amounts of money directly to commercial banks to make sure that financial markets do not freeze up."

Yippieee!! More debt!!!

Looks like Mr. FOA has all the ramifications well thought out. Almost prophetic in his deadly accuracy. Oh well, its not like Alan has left himself too many escape routes open recently.

FreeWillieMr. Gresham: Trail Weekend? Trail Sunday? Hiker Alert!#10232105/04/03; 00:00:33

Sorry. That FOA quote was from Part 3 of the gold trail: "Scenic Overview", about halfway down.


BelgianAlways expect the un-expected.....#10232205/04/03; 01:33:08

Saw some beautiful pictures of an idyllic fishermans bay in Greece...with a reunion of foreign ministers, having a relaxed *good* time on board of a private luxury cruiser.(Was it yours MK ? - smile)
Well well well...De Villepin (Fr.) with Straw (UK)...Michel (B) and the Polish FM...they seemed to get on much better with each other...!?
Only to say that behind the scenes, surprises can and do give birth.

Let us therefore not exclude that on the dollar-euro front...a temporary consensus *might* suddenly pop up !!!
A concerted $/€ currency policy (interventions) that give the exchange rate of both currencies some breathing space and time, as to settle (calm down) the differences.
If this should happen we can conclude that the euro was (is) in the drivers seat and was forcing the dollar to some concessions !?

Euro saying to dollar : Talk to us, negociate with us or we put pressure on the dollar AND gold !? W'll find out next week if I percepted it wrongly (€/$ exc.r.)
I know that the French maneuvered in such a way as to force the US to cry "oncle" (uncle)! How many uncles are there ?

In my respons to Kev, yesterday, about that slip of the Belgian tonque concerning VAT on Gold...says that there was (is) "talk" about the Gold-weapon !?

Dollar Bill : Although written by Americans (Hoover TT), the "Power and Weakness" essay is very interesting as to have more insight on how one sees (percepts) the other.
This can serve as a guide for the future relationships and the €-$-Gold affair(s) aka Power plays.
Don't get blinded by the (pseudo) "ideological" sauce on it.
BTW, why don't you send FOA-archives to all those US thinktanks...they have some more to think about and fill the tank (smile DB and don't send me a bill for this) ?

The Invisible HandOil still priced in dollars, but OPEC's books are kept in euro#10232305/04/03; 03:19:55

No 6/2003 Vienna, Austria, April 11, 2003
Resolutions of the 124th Meeting of the OPEC Conference
No 6/2003
Vienna, Austria April 11, 2003

Resolutions of the 124th Meeting of the OPEC Conference
The 124th Meeting of the Conference of the Organization of the Petroleum Exporting Countries, held in Vienna, Austria, on March 11, 2003, adopted the following Resolutions, which, in accordance with customary procedures, have been ratified by the Member Countries and are issued herewith:
Resolution No 124.400
The Conference,
upon the recommendation of the Board of Governors,
1. The Statement of Income and Expenditure for 2002 showing a total expenditure of _€15,439,442_. (emphasis mine)
2. The Statement of Accounts as at December 31, 2002, and the Audit Report submitted thereon by the appointed Auditors, TPA Control Wirtschaftsprüfung G.m.b.H.
So what happens if OPEC as a group decides to follow Iraq's lead and suddenly begins trading oil on the euro standard? Economic meltdown. Oil-consuming nations would have to flush dollars out of their central bank reserves and replace them with euros. The dollar would crash in value and the consequences would be those one could expect from any currency collapse and massive inflation (think of Argentina for an easy example). Foreign funds would stream out of U.S. stock markets and dollar denominated assets; there would be a run on the banks much like the 1930s; the current account deficit would become unserviceable; the budget deficit would go into default; and so on.

Belgian@ TIH#10232405/04/03; 06:06:47

It is quite normal that the OPEC-bureau in Vienna is operating in euro. Austria is in Euroland.

Euroland will continue for some time to seek a compromise with US policies. Oil for euro and a Free Physical Goldmarket and the euro taking over as reserve currency...are not yet for tomorrow morning. Be realistic and don't confound the present struggles with rightout "war" between the dollar and the euro for/about oil/gold/reserve-status ! That's what the FM's meeting on Rhodos (Greece) was all about : Keep talking...keep walking !

USAGOLD / Centennial Precious Metals, Inc.In bookstores it retails for $14.95. Get it here for only $5.95#10232505/04/03; 07:13:54

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.

21mabrypoliticians#10232605/04/03; 09:32:00

If you ever have a chance to ask your elected representatives a face to face question, ask them to recite the preamble and the first 10 ammendments to the constitution to you. Their response will speak volumes to you. If they cant do it they probably have no idea what honest money is.
Aristotle21mabs -- making 'em jump through hoops#10232705/04/03; 09:58:00

Politicians, bankers, whatever.

What do *YOU* think "honest money" is? Howsabout this, let's start small. First tell me whaddaya think "money" is, and then the "honesty" part of the equation can follow after that. Maybe I'll understand the significance of your hoops game after I hear your own personal take on this stuff.

OK, roll the theme music to "Jeopardy": Dum da dum dom dum da dummm....

Gold. Get you some. --- Aristotle

21mabryjust got back#10232805/04/03; 10:06:22

According to the constution they swore touphold its the specific weights of metals that were send to be a dollar. I was trying more to show how politicians get elected and many dont take the time to realize what they have sworn to do.
21mabry(No Subject)#10232905/04/03; 10:12:47

For example I asked my local congress person, why do you pass laws in congress that the populace have to live with and then exempt yourself in congress from these laws.They refused to answer, I said ok can you respond by mail when you have time to think about it. They never did.
21mabryAristotle#10233005/04/03; 10:21:31

But I guess you want my definition.I think honest money can be anything someone is knowingly and willingly ready to accept in a transaction. A cow can be honest money a bushel of wheat can be honest money,and to some yes a frn is honest money.Gold and silver and copper have proven over time to be the best stores and most easily transportable money for people. So I they are the most honest of money as they have been able to command all goods and maintain there worth over time. Thats all I got.
21mabryAristotle#10233105/04/03; 10:27:59

Does capital command labor or does labor command capital. I guess labor is the most honest of money.
21mabry(No Subject)#10233205/04/03; 10:33:38

I am ready to be weighed and measured Aristotle, and please be brutaly honest I can take it.
mikalBill Murphy interview#10233305/04/03; 12:00:41

On behalf of GATA, Bill Murphy will be on Radio Free America this evening at 9 PM EDT. It will have a worldwide audience via shortwave over 5.085 and/or 6.380; also live on the internet at; archived over and
The host, Tom Valentine, reportsthey have a very intelligent audience.
Source: The Charleston Voice

21mabrymikal#10233405/04/03; 12:11:31

I have listened to Mr. Valentine extensivly granted it was several years ago. His shows mostly revolved around new world order,masonic societys, secret societies and conspiracy theories some of which I think are true. The late William Cooper who had a great shortwave program called Tom Valentine a trojan horse.
21mabry(No Subject)#10233505/04/03; 12:21:40

I hope Mr. Murphy is aware of the audience and the type of show he will be on.It will not be like going on Jim Puplavas show. I am a from the conspiratorial school of history and Mr. Valentines show is one you cut your teeth on when you begin your studies. All this said many of his shows are very good and interesting.
TopazA History of Money.#10233605/04/03; 12:33:02

FYI Mabs... You'll note "wampum" was in use for a Century, and "making money" was a worthwhile persuit.
21mabry(No Subject)#10233705/04/03; 12:38:47

Thnx Topaz I willread it,in all honesty I am just glad Aristotle even notices my posts.
21mabryTom Valentine#10233805/04/03; 13:11:01

There used to be listener called stan the money man who would call Mr. Valentines show and give a speach about gold and money and the constitution,he was great he sounded very old he may have passed on by now. If you are into unconventional thought research the connections some of these programs give to the merovigian dynasty in early france and to their origins. Its the kinda stuff that will blow your mind.
Liberty HeadGold, Oil, Guns or Rock, Paper, Scissors #10233905/04/03; 13:53:40

As the U.S, Whoops! I mean coalition ;-) has demonstrated in Iraq, military force will play a major role in determining our future.
Those pesky euro countries may have a clever winning hand with their new currency. However fair, they may be playing poker with a desperado. Things could get dicey.
Those of us who follow the gold trail need to be aware. There are desperados and many ambush points along the way. So, by all means, take the journey with your eyes and ears open.
What a fascinating time we live in.
Place your bets, no regrets.

CoBra(too)Iraq's WMD's Elusive ...#10234005/04/03; 16:44:34

Says Rumsfeld.

... And all the while I've thought Colin Powell's "winning" arguments before the UN Security Council were proven facts - of course before they've been found out to be what they were. Ultimately, the imaginations of a London graduate student...

... And all the while diplomacy is thrown out of the door, as pep talk is taking its place. Former allies (and "other allies") are treated as fiends, enemies to the common US cause - in short the WAT! And by the neo-con definition - a terrorist is anybody, who's not "with US"! All the way!

Beware, of a unilateral world - a world accepting only US, but there's no place for any other of 'US'.
... Or by extension there's only the US-Dollar - and if you decide not to vote for US paper, or even remit it to sender your not with US any longer - and maybe a terrorist.

... and if you go for GOLD you're absolutely subverting US.

... And all the while I've thought - GOLD- will set US free from "US"? ... and it will ... cb2

CoBra(too)From the Mogambo Guru - Hey, I'm still fuming - eh, smoking?#10234105/04/03; 17:17:08

In The End... Everything Was Debased
"...When someone in one of the next generations writes the book entitled 'The Rise and Fall of the United States,' I can sum it up in, oh, one sentence. 'In the end, everything about America was debased.' Ethics... Morality... Politics... Continuing on, the currency is debased. The budget is debased. The Constitution is debased. Even personal fitness and health is debased..."

... and I'm also rationally exuberant about the private ownership of GOLD ... cb2

CoBra(too)From the WSJ. Aug. 1990#10234205/04/03; 17:36:24

"U.S. Military lacks some tools it needs in the Middle East Crisis".

Terrorists will be able to slip between the seams of superpower establishments. The US spent ten Trillion Dollars alone during the colsd war in developing a formidable military force ( Hey, that's one year of US GDP!). But the money was largely invested in the anticipation of conflict of large scale with another superpower.
- Gleaned from "The Great Reckoning" published in 1991.

The paragraph ends: "The US has far less capacity to project power against irregular forces at the periphery, in spite of the success against Saddam Hussein".
Ha, whatever you say about history - it seems to rhyme!

... Will "Homeland Security" under the Patriot Act do the trick? Except costing more for the overly indebted taxpayer? I wouldn't know, though I'd doubt it, anyway!

Is there a way out of the debt trap? I wouldn't know, either! Though, I wouldn't wait for an answer, nor a conclusion!

Though, being in doubt I'd sell half of US Dollars and buy the insurance - GOLD! ... cb2

CoBra(too)And Finally ...#10234305/04/03; 17:48:53

What does it do on the home front!?

... Spreading democracy, liberty and freedom? Hardly, nor saving the hegemony of the US Dollar Reserve Currency!

C US - cb2

PS - sorry for the late nite barrages ...

melda laureHerodotus, penguin classics pp. 57.#10234505/04/03; 18:55:29

Book 1, line 139ff

"They (the persians) consider telling lies more disgraceful than anything else, and, next to that, owing money. There are many reasons for their horror of debt, but the chief is their conviction that a man who owes money is bound also to tell lies."

regards to GAB and 21mabry
(hope I haven't spoiled your appetite for the subject by serving up the dessert)

Speaking of classics, (or at least those works I have found memorable) you might peruse Geoffrfrey de Monmouthe, History of the Kings of Britain. It's interesting to see how a bunch of guys on the roman "frontier" manage their own affairs after the mother country (empire) goes bust.

The answer is "with great difficulty".

For a more dramatic re-hash, Norma Goodwin has a nice book on the period, titled "Merlin". I suppose the lesson is that gold is not a substitute for guns. Not a particularly nice lesson. Though St Paddy seems to have managed without much of either. (but then again, he was a Saint)

Cavan ManUSAGOLD 102344#10234605/04/03; 19:39:33

Dear Mssrs. Kosares and Randy et al:

If you are intent upon enforcing a code of conduct here as you are entitled, I humbly suggest you take note of this guy's repeated references to Bogle and Vanguard. Apart from the lack of clear and independent thought processing, there is a definite sychophantic theme running through his ideological rants. Kind regards...CM

Bogle and investors take note; mutual funds are among the worst investment vehicles one can own and drive.

mikalGold #10234805/04/03; 21:30:21

QUOTE Magazine
The Netherlands
May Edition
GOLD! How a Bank conspiracy ruins the world economy!
(Translation from Dutch into English)
"The time to buy gold is when blood is in the streets, Nathan Rotchild once said. With crashing equity markets, the WTC changed into Ground Zero and an army crossing the desert, those words seems to have a certain prophecy value. For the first time in 20 years, the price of gold increased by 35%. But gold investors (so called Gold bugs) aren't satisfied yet. The WTC disaster and the Iraq war is only background noise. The price of gold should have been much higher already years ago they say, with or without war !
The so called gold bugs are convinced of a so called conspiracy of big Bullion Banks, the FED and Central Banks to suppress the price of Gold.
The recent run-up in the price of Gold may be the first signs that the suppression scheme is not much longer to maintain. The price of Gold will explode, gold bugs say, and could very well bring down a few big investment banks. The official Gold community speaks of 'the lunatic fringe' but more and more well respected people in the Gold industry endorse their claims. John Embry (manager of the Royal Bank of Canada)said : 'Everyone with a IQ higher than a Grapefruit have to admit that they have a point'..."

RocketmanThe Invisible Hand's post from yesterday#10234905/04/03; 21:55:10

Your comment "Warren Buffett is holding this week-end his annual shareholders’ meeting in Omaha, Nebraska. Is he going to reveal something? Here's all I found: "Buffett elaborated a little on some recent moves which have puzzled some observers. " snipped from" jogged my mind to a comment I heard by I believe it was James Turk on the radio Saturday morning.

Mr. Turks speculation was that Warren Buffett had off loaded much of his Silver and was loading up on Gold. This is just speculation but it is a rumor that was not started by me.

Anyone else out there heard similar rumblings?


Black BladeBuffett renews call against executive greed #10235005/04/03; 22:29:14


Warren Buffett launched a fresh assault over the weekend against greedy chief executives, complacent directors and pliable compensation consultants by urging investors to rebel against excessive executive pay. The influential investor - one of America's richest men - told the shareholder meeting of Berkshire Hathaway, the investment and insurance group he chairs, there had been more misdirected compensation in corporate America in the past five years than in the previous century. US chief executives "don't care whether their boards are diverse, or not diverse - they care about how much money they make", Mr Buffett warned more than 10,000 shareholders and guests who gathered in Omaha for the meeting.

Black Blade: I agree with Buffett. It appears that one over riding requirement to be a corporate CEO, top line executive, or board member is that one MUST be a sociopath. They MUST have no conscience whatsoever. They MUST have tan attitude like that of Tony Montana (of "Scar Face" fame as played by Al Pacino). Hey. maybe even a psychopath would work as well. Beware of how you invest. Even when a company goes tits up, corrupt bankruptcy judges and lawyers will usually give out huge payouts to those who drove those companies into the ground while stripping the workers of their retirement benefits and severances.

The Invisible HandRumblings that Buffett is loading up on Gold#10235105/04/03; 23:36:49

Here's an old (60 days) one (so no reference to this week-end)

2003/03/04 Tue 11:00 EST | © Mineweb 1997-2003
Here is a selection of his quotes: time bombs; madmen; mark-to-myth; daisy-chain risk; dominoes toppling; it pays to minimise links of any kind; linkage, when it surfaces, can trigger serious systemic problems; derivatives genie is now well out of the bottle; toxicity; alert to any sort of mega-catastrophe risk; derivatives are financial weapons of mass destruction, carrying dangers that while latent, are potentially lethal; hangover may prove proportional to the binge. Music to the ears of any hardened gold bull, despite the fact that bullion doesn't score a single mention.
"True, the ‘G’ word does not appear. Except between every line," says (Mitsui Metals analyst Andy) Smith.

Black BladeDeeper Look at Jobs Numbers Prompts Gloom #1023525/5/03; 00:20:05


WASHINGTON (Reuters) - The drop in U.S. jobs in April may not have been as bad as many had feared, but bleak signals within the data have economists convinced the labor market is even weaker than the headlines suggest. While some market watchers expressed initial relief at the 48,000 decline in employment last month, which was not as dire as the expected 53,000 job loss, a closer look left them gloomy about a near-term employment recovery. Labor Department figures show the work week fell to 34.0 hours from 34.3 in March, aggregate weekly hours slid a steep 0.7 percent, manufacturing hours declined to 40.5 from 40.8 and overtime hours dipped to 3.9 from 4.0. Which means that not only were there fewer workers on the payroll last month, but they were working fewer hours and less overtime -- effectively cutting the amount of work done by more than the drop in jobs suggests. "So if you look at the overall report, while the headline employment decline was actually smaller than we expected it to be, the rest of the report was certainly more negative," said Tim O'Neill, chief economist at Bank of Montreal/Harris Bank. "No matter how you cut this report, there is nothing in it that would suggest that the labor market is on the verge of picking up."

Black Blade: Indeed it does not look good at all. Let the pundits say what they will, but "lagging indicator" or not, the trend has been ugly three years running with no end in sight.

BelgianThe euro "against" the dollar.#1023535/5/03; 03:21:16

Some commentators and analysts are suggesting that something is going wrong with the new US imperium. "Independent Strategy" (I.S.), a financial research company for institutional investors, argues, in a paper that is being circulated in the boardrooms of big investment banks like Goldman Sachs, that the US empire has reached its peak. (me : as if GS wasn't aware of this).
I.S. foresees heightened global terrorism in response to US unilateralism. I.S. also argues that the US economy faces serious economic difficulties due in part to the costs of war an Bush's massive tax cuts. The dollar is falling in international markets "because the good empire has the same fault lines as many other empires : unsustainable living standards at the core (that) depend on flows of wealth from the periphery "
The costs of war and unilateralism will increase the thist for capital, but reduce the return earned by it.

This morning at CNBC-europ : Anti American (ME) Petro-dollars are flowing into the euro. Will the euro be demonized ?

SundeckDollars for oil - how important is it?#1023545/5/03; 03:56:35,3604,949435,00.html


A little dollars and sense

Richard Adams
Monday May 5, 2003
The Guardian

A variety of strategic reasons have been suggested for the US assault on Iraq, some plausible and others on the wilder fringes of speculation. One idea been popular in the twilight world of conspiracy theorists - alongside the notion that the Rothschilds secretly control the US central bank - is that the war was about protecting the US dollar's international economic dominance.
On this view, the "real reason" for the war on Iraq was Saddam Hussein's decision in 2000 to take Iraq's oil revenues in euros rather than dollars. The invasion, so this argument goes, was to warn away other Opec member countries from doing the same.

One of the internet's conspiracy theorists, William Clark, put it this way: "Although completely suppressed by the US media, the answer to the Iraq enigma is simple yet shocking - it is an oil currency war." Sadly for the swivel-eyed conspirati, this "simple yet shocking" answer is completely wrong.


It certainly does not mean the US somehow gets to import oil for "free" because it pays for it in dollars - it can't simply print money to pay for barrels of black stuff. Or, to be theoretically correct, it could do so but not for long - the value of the US dollar would sink on foreign exchange markets as a result, and cost the US economy far more.

If Opec tomorrow switched to demanding that its contracts be paid in euros, would the US economy collapse, as some have predicted? No. The US economy has its own problems, but how Kuwait or Algeria gets paid for oil is not one of them. There are enough plausible, worrying justifications for why the US administration was so determined to invade Iraq without the US dollar being one of them.


Why does this article by Richard Adams worry me? Has he got it right or wrong?

I thought that if oil was paid for in Euros, say, instead of dollars, then that would encourage most countries to divest themselves of an appropriate number of "dollar asset reserves" in favour of "Euro asset reserves", thereby reducing the demand for dollars and lowering its "value", and increasing the demand for the Euro and raising its value.

...and in his second last paragraph, I thought that the US HAS been "simply printing money" - maybe not to to "get oil for nothing" directly, but to support US asset price booms (or "bubbles") which encourage foreigners to invest in the US and thereby keep the dollar strong. Mr Adams seems not to have noticed that the value of the dollar IS sinking on foreign exchange markets. I suspect he fails to understand that loss of faith in the dollar is not coupled simultaneously with the dollar's inflation (i.e. creation by printing) - there is a delay, which is a function of how long "confidence" can be maintained; which of course depends on how long one or more US asset bubbles can be maintained and made to grow fast enough to remain profitable investments for foreigners.

Well, the equity bubbles (NASDOG, the Stranded and Porous and the DOWN) are deflating, the bond bubble looks like being full and the housing bubble seems to be getting rather "tight". The dollar is dropping as well, so that gains in asset price are offset by foreign exchange losses. So where is the incentive for foreigners to hold dollar assets? The incentive is there only if they can be made to think that an economic turnaround is imminent - the perennial "second-half recovery".

Any other opinions out there?


SundeckInflation is 'exclusively caused by governments' #1023555/5/03; 04:29:49


Prices go up not because of sinful traders or consumers but because the Central Bank is printing more money than is taken in tax receipts. Inflation is wholly and exclusively caused by governments. Double the notes in circulation and prices will double.


Could we open up a new front on the policy horizon? Friedrich Hayek, argued in Denationalise Money that the politicians and their agents, the central banks, should forfeit their monopoly. His assertion is that honesty or reputation would be tested daily on the exchanges.

We can see in half the nations of the world the local state monopoly currencies are little more than cruel jokes. People prefer to trade US dollars or possibly gold coins. In some territories the US dollar has displaced the central bank.

Sundeck: An advocate for less control by central banks.

Knallgoldeuro/oil#1023565/5/03; 04:43:17

I have learned the last years that the $ rose because to buy oil,Europ etc had to change its own currencies to $'s first creating thus a demand for Dollars.

If someone changes(or just prepares!) now secretly to euros as the currency standard for his oil,how can we spot that?

He buys first euros,maybe even exchange $'s for it-the euro would gain against the $ in the FX markets,right?Now what if oil gets scarcer? It would not reflect in an inflated $-oilprice (initially)-is that right (oops,I see an analogy with the $-Goldmarket)?Didn't the oilprice collapse from 35 to 25 and yet the euro rose?

SundeckGold Price/Through 2007:Gold Mine Output At 2,515 MT 02#1023575/5/03; 04:53:01


Gold Price/Through 2007:Gold Mine Output At 2,515 MT 02

DJ Gold Price To Remain Firm Through 2007 -Australian Report

Canberra, May 5 (Dow Jones) - A bull market for gold will persist through 2003, and its price will then remain firm through 2007, underpinned in part by lower mine output, according to a report issued late Sunday by Australian consultancy AME Mineral Economics Pty. Ltd.


The report said a decline in gold output in 2002, in the wake of a sustained period of declining exploration expenditure, will be reversed between now and 2005, helped by rising prices.

Gold mine output fell 3.2% in 2002 to 2,515 metric tons, the lowest since 1997, it said.

The report also found South Africa remained the largest producer nation in 2002 with mine output of 394 tons, unchanged from 2001, which was the lowest output since 1953.

The proportion of world gold output mined outside the four major producer nations of South Africa, U.S., Australia and Canada, continued to rise last year to 45% from 25% in 1990. Principal contributors to this trend include Indonesia, Papua New Guinea, Peru, Ghana, Mali, Argentina and Tanzania.

The average total production cost for Western World gold mines in 2002, which includes cash cost plus depreciation and royalties, was estimated at US$217/oz, up from US$216/oz in 2001, the report said.

The average cash operating cost in 2002 was US$148/oz, down from US$151 in 2001, it said.

The average cost of gold production by Western World gold mines has fallen by 24% in real terms from US$194/oz over the four years since 1998, it said.


Sundeck: Some statistics that may be of interest.

SundeckThe Bank of Japan that can say 'no'#1023585/5/03; 05:11:55


"...And Fukui responded with "propping up asset prices would force us to spend limitlessly and force us to take unlimited responsibility."
That means no - with a capital N.
Even better was Fukui's next statement: "It's just a fantasy to believe that lifting stock prices would resolve all the issues of the economy."
And, of course, he is right on all counts.
Moreover, there is no reason to believe that higher bank stock prices would halt the deflation of consumer and producer prices stymieing Japan. Bank stock prices are asset prices. The deflation problem is in the so-called real economy for goods and services.

Sundeck: Looks like at least one official wants to make japan take it's medicine. Maybe the Japanese government could pursuade the PPT to buy Japanese bank stocks as well as Dow futures?

Incidently, Puplava's guest on News Hour was Nelson Hultberg talking about the PPT - worth a listen.

SundeckStocksView: Greenspan vs. Nostradamus#1023595/5/03; 05:31:46


By Pierre Belec

NEW YORK (Reuters) - Don't throw away your Alan Greenspan collectible dolls.

President Bush raised some eyebrows among the shrinking ranks of Greenspan fans last week when he said the Fed chairman deserved a fifth term.

``The president thinks he has done a very able job as a steward of the economy, making certain that we had the proper monetary policies in place,'' White House spokesman Ari Fleischer said.

The big question: Is Greenspan as smart as many people make him out to be?

You be the judge.

After a painful three-year bear market in stocks, people have discovered that Greenspan -- the modern-day Nostradamus -- was right when he warned in December 1996 that the Dow Jones industrial average, then at 6,000, was out of sight and investors had a bad case of ``irrational exuberance.''

Investors were buying stocks regardless of the companies' performances. Do-it-yourself investors lacked the ability to discriminate. Like a drunken gold miner in a boom-town house of ill repute, stock investors rewarded the winners and the losers alike, particularly in the high-tech sector.

New milestones in the Dow, the Standard & Poor's 500 and the technology-laced Nasdaq composite begat more milestones as the market became ``bubblicious.''

The Fed chief may not have been solely to blame for inflating the market bubble, which is still destabilizing the economy three years after it burst. But his inaction extended the life of the speculative mania.

``Greenspan has maintained that he could do nothing to stop the stock market bubble because bubbles can only be known after they pop,'' said Ray DeVoe, publisher of the DeVoe Report. ``With all due respect, I disagree. Bubbles are obvious to all who want to see them.''


The Fed policy-makers played a major role in pumping up the Nasdaq to more than 5,000 by March 2000, DeVoe says. The master mechanics of the $10 trillion U.S. economy could have raised interest rates to cool things down, but instead, they chose to keep interest rates on hold and let asset prices skyrocket.


Greenspan insists that a bubble in housing is ``unlikely.'' He has assured Congress that ``the types of underlying conditions that create bubbles are very difficult to initiate in the housing market.''

Says DeVoe: ``Well, if he was unable to spot a bubble in stocks until after it popped, he would be equally unlikely to see one in housing.''

If the Fed gets it wrong, the economy's long-term health will be at risk.

A housing crash may have more serious consequences on the economy than the slump in stocks because consumer confidence, i.e. household wealth, would be directly affected. Worth remembering is that consumer spending accounts for an awesome two-thirds of national economic activity.

There's a real risk to the American dream of owning a home. The enriching liquidity that has made home buying so rewarding may morph into impoverishing illiquidity.

The big difference between Greenspan and Nostradamus is that the 16th-century French crystal ball reader got it right more often than the Fed chairman, with all of his economic models.


Sundeck: Is Al a financial guru, or just a vain old man caught up in the political momentum of the times?

Belgian@ Sundeck : the euro-dollar-oil (gold) " conspirati "#1023605/5/03; 07:51:10

When things are in their "theoretical" phase (FOA)...nobody bothers. How shocking the theory might be. The theories are qualified as "fantasies".

Once these theories actually start to "happen", the observers (Guardian) start denying them.

The shift out of the dollar into the euro as a "second" currency IS TAKING PLACE ! And not only for 300 > 500 million Eurolanders but for many other regions that had the US$ as a second currency. This is a "process" !

It is not only Iraq or anti americanism, that is responsible for dollar-flight. It is simply the existence and increasing availability of a dollar-alternative (euro) that succeeds in attracting more and more attention, globally. Evidenced by the evolving dollar/euro exchange rate. The euro and the dollar are competing and the citizens on the American continent will be the last ones to realize that this competition is growing. POG-containment is in place as to not wake up, alarming, complacent, sleeping dollar-dogs. Gold-Psyops !

Euroland's CBs and euro faction within BIS are NOT stupid or outright irresponsible with the percepted high profile on goldsales ! There is a plan/purpose behind all this !
(Read Tlaga's essay next door). This happened before !

Gold's future is the biggest "inside information" one can imagine. It was because Americans were NOT allowed to possess Gold-Property-Wealth for more than 4 decades (!!!) that Nixon could close the Gold window in 1971 !!!
Reread FOA's insights on this period and why POG had to be contained from going the 850$/Oz.

Indeed KnallGold...POO went down and euro strengthened against the dollar-oil currency. Significant, indeed Sir !

There is also another aspect on the euro-Gold-concept : Old (whoepsss) Euroland knows very well that it has a serious demographic problem (aging population). We need something to fall back on for the not so distant future. That could most probably be the Free Gold market enhancing euro-savings and cushing dollar catastrophes !? De Gaulle had it right, already in 1965 !

J-BullionCanada has about 4 months of gold left at present sales rate#1023615/5/03; 08:32:39

Canada sold off another tranche of its dwindling GOLD???
OTTAWA, May 5 (Reuters) - Canadian foreign reserve holdings
rose by US$337 million to US$36.26 billion in April, and the
government sold off another tranche of its dwindling gold
reserves, the Finance Department data said on Monday.

RESERVES April March
Total 36.263 35.926
U.S. dollars 16.587 16.501
Other foreign currencies 15.045 14.754
Gold 0.142 0.170
Special drawing rights 0.745 0.739
IMF reserves 3.744 3.762
NOTE - Figures in billions of U.S. dollars.

Official government operations -- net purchases or sales of
foreign currency for government foreign exchange requirements
and for additions to or subtractions from reserves -- had no
effect on reserves in April.

Gold sales during the month totaled 85,703 ounces, leaving
government holdings at approximately 400,000 ounces on April
30. The government has a policy of gradually selling off gold
reserves and replacing them with interest-bearing instruments.

Details of changes in net reserves this month:
Reserves management operations -30
Gain and losses on gold sales -1
Earnings on investments +94
Foreign currency debt charges -66
Revaluation effects +340
Official intervention 0
Other transactions 0

NOTE - In millions of U.S. dollars

a nation of oneSundeck, your posts...#1023625/5/03; 08:45:37

The true way to think of Alan Greenspan is not to believe that he cannot see what is happening, but that he
knows very well what is happening, that he helps cause some of it to happen, and that he then says whatever
is necessary to make it appear he had nothing to do with it. This is also the reason that his answers to
questions asked by elected representatives are difficult to comprehend. It is not because he is smart, that his
verbal expressions are hard to understand. He is not especially very smart. But his answers are so
unnecessarily wordy, lengthy, and involve uncommon words and unnecessary side issues, because that
makes them harder for other people to figure out what he is saying, especially in a real-time public forum
such as a congressional committee hearing, where, if a questioner admits that he or she doesn't understand
Greenspan's answer, it is the questioner that seems at fault, not Greenspan. This is the reason his answers are
convoluted, not because they need to be, and certainly not because he is smart. He's not smart. He simply is
involved in what is called obfuscation. The deliberate and knowing obscuring of information partly in order
to avoid receiving blame. But also partly to enable his destructive efforts to continue. Even top people in the
Administration are successfully bamboozled by this. That is why he does it. If they were to sit down and
patiently figure out what it is that he really did say, they would have no choice but to conclude that his
creation of confusion is deliberate. Do this yourself sometime. Take one of his longer sentences, and then
edit it down to get its real meaning. Your eyes will open.

21mabryHunts #1023635/5/03; 08:52:57

I read an article that said the Hunt brothers intention in cornering silver was so they could sell bonds or notes that were silver backed.There by establishing a competing hard form of money to the world currencies. I have just been wondering if a wealthy individual could buy say 15 million ounces of gold.That would be about 5 billion dollars, and purchase a billion dollars in silver, and set something like this up. I know it would be hard to get delievery of all that metal.It would also take someone of Buffets or Gates wealth. Also, it would take someone who was not fearful of goverments reprisals.
Gandalf the WhiteTHERE GOES the US$ again !#1023645/5/03; 09:12:36

Like a green submarine --- DIVE, DIVE, DIVE !

Gandalf the WhiteWAY ta GO SPIKE !! #1023655/5/03; 09:17:58

now you too, SPOT --- JUMP !!!!

adminMK's Gold Commentary & Review#1023665/5/03; 09:32:58


New Quick Notes: Buffets Blasts CEOs

New Stein

Important Link: China Gold Rush Hurdles Cleared



MK Comment: A handful of commentators have commented recently that there seems to be an underlying strength to the gold market that they can't put their finger on. Is China in the market? Japan? Or has Warren Buffett's Berkshire Hathaway with its $5 billion in ready available cash become player in the gold market? It could be. And if so I wouldn't be surprised. Beyond the appeal to WB's Nebraskan grown common sense, Howard Buffett, the four term US Congressman from Nebraska and Warren's father, was a well known advocate of the United States' return to a gold backed currency. One can imagine a dinner conversation or two centered around the benefits of the yellow metal. Did the sound money philosophy of the politician father transfer to the financier son? There is no way to know for certain, but Andy Smith's 'read between the lines' seems to have a ring of truth about it. And then, as well, there's the small matter of WB already being the world's largest private holder of silver..........

(For Full Report: Is Buffet in Gold - Smith? -- MineWeb.Com)
Thanks to 'Invisible Hand' at the USAGOLD Forum for bringing this article to my attention.

BelgianSir Allspan...Nostradamus ?#1023675/5/03; 10:06:35

Greenspan and ALL of us knew very well about the "Bubble" !
BUT IT WAS GREAT FUN !!! And its over...and out. Many will soon start to make up their balance. Happy "few" Big winners...a lot of "losers".

We were... and still are "OBSESSED" with "growth" and expansion ! Emphasis on "Obsession". We want that specific kind of growth that satisfies our demand for getting it ALL...NOW at once...and by preference for almost nothing !

We must accept that since the 1987-crash, the ESF has been holding up things and created the space for the exuberance (obsessional virtual growth). There will be a decade of debates about those organized/fabricated, absurd over-valuations, and the massive abuses that went with it. But that's eggs after Easter because the next era will be another copy of all the previous ones.

Today, it ain't gone work anymore, brothers and sisters ! Game over up until "everything" goes back to the "REAL" basics . Gold will be part of the coming new realities. We are NOT in the process of finishing an intermediate cycle but ending an era that went totally wrong IMVHO !!!

USAGOLD / Centennial Precious Metals, Inc.Would you invest in a stock that graphed like this?#1023685/5/03; 11:25:18

purchasing power

Would you invest in a stock that graphed like this?

Probably not. But that is precisely what you have done if you own
stocks, bonds, cds, money markets or anything denominated in U.S.

Sooner or later gold is going to react strongly to this simple dynamic:

The dollar has been continuously devalued without stop for the past 57 years. It has
not appreciated against goods and services once -- not even once -- in that entire time period.
There are periods when this policy has not been fully reflected in the price of gold.

Is "Now" one of them? "Is Now the Right Time for Gold?"

If you've received your initial information packet from us, you qualify to
receive this important report FREE OF CHARGE.

Please call 800-869-5115 if you would like us to send it to you --


George Cooper Ext 102

Jonathan Kosares Ext 110

Marie Ballard Ext 106

We look forward to your inquiry.

USAGOLD / Centennial Precious Metals, Inc.Dollar becomes a limping reserve asset...#1023695/5/03; 11:28:26

Swiss gold francs
Gold Today!

Because the phrase "strong dollar policy" is sounding anemic.

While the Treasury Department's half-hearted rhetoric about a "strong dollar" sounds ever less like policy and ever more like pabulum for the media, the FOMC target rate (at 1.25%) by the Federal Reserve (with a bank lifeline discount rate at 0.75%) tells the score loud and clear. In recent Congressional testimony Chairman Greenspan said that there is no "meaningful limit" to the Fed's power to inject money into the economy. And consider the dollar's legacy position as a reserve asset currently being held throughout the world. These are the things that sudden financial crisis and hyperinflations are made of.

In the final analysis -- in times of stress -- paper is only paper.
How solid is your portfolio?

USAGOLD - Centennial is here to help.

Black BladeEuro/dollar breaks atop key $1.13 area #1023705/5/03; 12:21:45


NEW YORK (CBS.MW) - The dollar weakened to a fresh four-year low on euro in Monday's action as investors bet against a U.S. economic rebound and higher Fed interest rates. The single currency also struck four-year peaks against yen and sterling and neared the 1 1/2-year high on the Swiss reached last week as investors find yield advantages with euro. Euro/dollar's move above $1.13 engaged a flurry of open-interest positions in the forex market that were waiting for the cross the break through this area of chart congestion.

Black Blade: This pretty well confirms that the US has abandoned the "strong dollar" policy.

Black BladeJobless In America#10237105/05/03; 12:57:23

Several articles on the growing jobless in America (see link). It looks more "grim" than most expected with no "economic recovery" anywhere in sight. Even government jobs are few and layoffs are coming for the governmnet worker. Can you say "New Deal Economy"? Maybe we will see a return to government jobs a la FDR as the "New Depression" deepens.

- Black Blade

Eleanor of AquitaineBlack Blade#10237205/05/03; 13:14:42

I honestly don't see how the government can create "new deal" jobs, being in the amount of debt they're in now. They're laying off people in order to save money on the local and state-wide levels. On the federal level, I don't see how they can create jobs with the deficit and debt at record levels.
Black BladeEleanor#10237305/05/03; 13:26:44

Maybe not, but then who thought they could afford a war in Iraq, a dubious fiscal stimulus package, increased federal spending (including military spending), tax cuts, etc. Ya just never know. Besides, wasn't it Fed Gov. Bernanke who said - "just print more money"? Hmmm...

- Black Blade

NEMO me impune lacessitGSS out of the woods#10237405/05/03; 14:08:17

R PowellThoughts on the dollar and gold#10237505/05/03; 14:14:39

I would not be surprised if someone has already posted this article by Fleckenstein (great sage) but, in case anyone missed it....

Here's a little part....

"This suggests to me that the dollar is on borrowed time, and trouble is coming, sooner rather than later. It also means to me that the price of gold has seen its lows. And, while the tsunami of investment demand that I envision may still be months away, I believe the surprises will now all be on the upside for gold."

R Powell21mabry#10237605/05/03; 14:45:26

Earlier today you mentioned the Hunt brothers and silver. Imo there isn't a precious metals incident more famous (infamous) than the 1979-1980 silver market and more misunderstood!! Mention the silver market and the first response from most people is something about the Hunts and trying to corner the market. That's usually the extent of what most people know and it's incorrect! The Hunts were not alone in buying silver and they did not try to corner the market. In fact they rolled forward positions, limited their buying, accepted EFP (exchange for physical) and even accepted silver which was less pure than exchange standards ALL to relieve pressure on the market which was no where near cornered!

I know you are a prodigious reader (second best way to learn anything!) so let me recommend "Silver Bulls" by Paul Sarnoff who was a broker (and author of many books) right in the middle of that market. I found this book fascinating but I'm easily interested in anything remotely silvery. The book is out of print so you'll have to search (many libraries will do this for you) for it. We'll expect a full report when you're finished. Remember, spelling and grammer count!

KiloInspired by Gandalf -- (sorry, couldn't help myself)#10237705/05/03; 15:06:47

Greenspan's Submarine

(to the tune of the Beatles "Yellow Submarine")

In the land where I was born
Lived a man who printed green
And he filled us all with lies
In the language of Greenspanese

So we started hoarding gold
as he filled the sea of green
And we lived above the waves
Over Greenspan's submarine....

We avoided the Greenspan submarine,
Greenspan submarine, Greenspan submarine
Yes, we avoided the Greenspan submarine,
Greenspan submarine, Greenspan submarine

And our friends are all on board
Many more of them are soon to see
And the band begins to play

We avoided the Greenspan submarine,
Greenspan submarine, Greenspan submarine
We avoided the Greenspan submarine,
Greenspan submarine, Greenspan submarine

As we live a life of ease
Everyone of us has all we need
Sky of gold is all we see
Above the sinking sea of green.

We avoided the Greenspan submarine,
Greenspan submarine, Greenspan submarine
Yes, we avoided the Greenspan submarine,
Greenspan submarine, Greenspan submarine

We avoided the Greenspan submarine,
Greenspan submarine, Greenspan submarine
We avoided the Greenspan submarine,
Greenspan submarine, Greenspan submarine

AaaaaaHA !

BelgianHistory of chocolate bars (R.Powell - Fleckenstein article)#10237805/05/03; 15:29:39

The 1908 - 1998 chocolat/Oz price-chart (0,0250 > 0,4250) :
60 Years of relative price stability : 1908 > 1968 = x 2 (0,0250 > 0,0500)
Next 30 yrs (1971 >'98): 0,0500 > 0,4250 = x 8 1/2
(give and take a bit on the figures)
1971-POG = 41$ x 8,5 = 348,5 $/Oz ! An "artistic" co-incidence !

During the London Gold Pool, Gold was unofficially traded/physically exchanged at a "contained" price of 68,5$ before 1971 ! My 1971 > 2003 inflation (depreciation) factor is x 25 in Euroland (personal experienced average).
68,5$ x25 = 1,712$/Oz as an official (but falsified-fabricated) inflation-adjusted price for contained Gold.

I would like to re-confirm some old news : A certain (Pro-Atlantic) faction within Euroland, desires a continued co-operation between the FED and ECB to keep on managing the * appropiate * euro-dollar exchange rate, around parity !
They want the status quo and consolidation on the Free Trade zone, concentrated around the Atlantic shores (US-Euroland) !

More on this later.

Socrates964Sir Alan of Productivity#10237905/05/03; 15:31:58

Somewhere in Michael Steinhardt's otherwise dull book is a paragraph on meeting Greenie in the 1960s when the bond brokers dragged him round the asset management client base - Steinhardt tries to be diplomatic but makes it clear that then as now, it was hard to detect any great thinking behind the façade of verbosity.

My view is that it is precisely this characteristic that endears him to his paymasters (oh, and he's also very eager to please). Surely, if you're going to create the biggest asset bubble in history, you want someone who will turn up on time to all the official meetings, emit a long stream of hot air with the right statistical frequency of soundbite words ... and do precisely nothing except cut interest rates again and again and give the money center banks a nice profit on their T-bond holdings at the expense of the US taxpayer.

Btw, can anyone remember Greenie's agonising in late 2000, when Dubya came to power, about how the Democrats might be running too large a budget surplus and misallocating capital that should be returned to the private sector??????
And if memory serves me, didn't he make speeches in 1999-2000 about how the US economy was so unbelievably productive that interest rates would have to follow surging ROIC rates upwards???

If anyone wants to know why the euro is rising, look no further than Sir Alan - the economic fundamentals of France and Germany may indeed suck, but at least the ECB is run by proper central bankers who realise the need to keep their hands on the wheel and (in some cases at least) remember the post-WWII inflation.

Paper AvalancheTo paraphrase the previous Treasury Secretary O'Neil#10238005/05/03; 15:46:31

"The new currency will be issued later this year, but we are prepared to introduce it earlier if necessary."


I wish that I could find the news story where Paul said this. I took note of it the day that I read it and it led me to the conclusion that the new pink dollars will be gold friendly in the same manner as the euro. If anyone can locate this story with the paraphrased line above I would be forever grateful. I remeber it vividly. I believe that we are witnessing the prelude to the new currency becoming "necessary" with the USDX plunging and no end in sight to the world wide fire sale of the greenback.

I believe that on that day physical gold will be impossible to buy. If memeory serves me a second time, I believe that someone on the gold trail said that such an event would happen "overnight" and not gradually so as to allow the world to shift its assets away from the greenback. If so, we are weeks (possibly days) away per the news article from the week of 3/20 that stated that the release of the new pink dollars would be delayed six to eight weeks.

Tick, tock.


John the JuteThe view from the Sundeck is particularly clear to-day#10238105/05/03; 16:04:12,3604,949435,00.html

Do you mind if I think out loud awhile?

Like Sundeck, I was surprised at the Guardian author's blunt dismissal of the importance of the dollar's being a reserve currency. Don't get me wrong: I am not for a moment suggesting that preserving reserve status is the ONLY factor in deciding US foreign policy; but I do believe that losing reserve status would knock the US quantity of money wildly out of balance and that the US Treasury knows this.

The more I learn about economics, the less certain I become that I know exactly what "money" is. The Guardian author is more certain than I: 'Open any reputable economics textbook and you will find a chapter on the role of money. They pretty much all say the same thing: money is a unit of account, a store of value and a medium of exchange.' Well, yes: money is those three things ... but it is at least another half-dozen things as well, not all of them economic. I do hope his reputable economics textbook mentions those as well.

His argument about the unimportance of oil's being priced in dollars is then expressed as: '... the "medium of exchange" and "unit of account" elements are just functions of liquidity and convenience. If South Korea buys oil from Kazakhstan by converting Korean won into US dollars, then Kazakhstan can either keep the payment in dollars or convert it into Kazakh tenge for domestic use.'

It's an argument I've seen before: if I have dollars, and oil is priced in euros, then this makes no difference -- I can "convert" my dollars to euros before I buy the oil. And to me, his use of the word "convert" seems to confuse the "medium of exchange" and "unit of account" uses of money.

Let me explain what I mean. There are some transactions which are much the same whether they are carried out by me or by the United States ... give or take an extra eight zeros on the numbers involved. But there are others where the large transaction is different in kind from the small.

If I want to buy an ounce of gold, I can go into any coin dealer in the High Street and buy a Krugerrand for a few per cent over the intrinsic metal value.

If I want to buy 200 times as much, 200 Krugerrands, I can telephone Centennial, where I'll pay a smaller percentage premium because of the quantity I am buying.

If I want to buy 200 times as much again, 40,000 ounces, then everything changes. "Economies of scale" become less important than "supply and demand." I am probably buying most of the available physical gold in the market and need to compete against other major buyers of physical gold. My purchase will take time and cost more.

If I want to buy 200 times as much again, 8,000,000 ounces, then probably nobody anywhere has that much on sale. This is 10% of the gold mined worldwide in a year.

Much the same holds for "converting" from one currency to another for the purposes of exchange. As a unit of account, I can just use multiplication: "Your account at present stands at 1,000 pounds sterling, John, which is the equivalent of 1,500 US dollars." But if I want to use those dollars as a medium of exchange -- to buy something with them -- I first have to use my pounds to buy the dollars.

If I want to buy 1,000 pounds-worth of dollars, then first I must come out of the coin dealer in the High Street -- or I shall wind up with 1,500 Sacagawea golden dollar coins -- and go into any bank, which will give me Federal Reserve notes in exchange for Bank of England notes, at the tourist rate. I can "convert" the currency easily.

If I want to buy a thousand times as much -- 1,000,000 pounds-worth of dollars -- then I can still convert the currency easily. In foreign exchange terms, a million pounds is a very modest amount, though large enough for me to get the forex (rather than the tourist) exchange rate. My own bank will have an account with USD 1,500,000 in it, which it can withdraw and pay into a dollar account in my name; at the same time deducting GBP 1,000,000 from my sterling account. (I should perhaps point out that I have never actually done this!)

If I want to buy a thousand times as much again -- 1,000,000,000 pounds-worth of dollars -- then it becomes clear that I am buying dollars, rather than converting pounds to dollars. The extra demand for dollars that I have created will increase the price of a dollar. My bank, however, will have no great difficulty finding that many dollars. The reason for this is that there is a huge quantity of dollars in the London foreign exchange market ... because the US dollar is the principal reserve currency. These are the dollars that European oil users buy so that they can buy oil, and which the oil producers later use to buy euros so that they can buy the things they need from the Eurozone. These dollars are, in practice, never taken back to the US and spent there.

It is this need to find dollars -- in practice, to find banks which have large dollar deposits which they are willing to sell to me -- that makes the big difference between a "medium of exchange" and a "unit of account". And it affects the monetary policy of the owner of the reserve currency. If there was no longer a demand in London for US dollars to buy oil, then the banks in London would no longer need large dollar deposits. Where can these dollars be spent if they cannot be spent on oil? In the United States.

This is what I meant when I wrote that losing reserve status would knock the US quantity of money wildly out of balance. The repatriation of the petrodollars would considerably increase the quantity of money available for spending in the US ... with an immediate inflationary effect.

How much of an effect, I don't know. Does any of the Folk of the Forum know?

mikal@Paper Avalanche#10238205/05/03; 16:35:08

According to Coin World and the Treasury Dept., the new $20 bill will experience a "showing" on the 13th- 8 days away. Numerous Treasury press releases have stated that this photo-op show is NOT the release into circulation, which involves one denomination at a time, in stages beginning this fall with the $20.00 bill.
But I would not be surprised if all four of the bills($50,20,10&$5) are ready to be released. Aside from your posts, I've heard rumors of new money for several years.

GoldiloxDollar's demise good for gold?#10238305/05/03; 16:41:11

Excerpt from posting by Chris Temple entitled "Will Gold now pull Gold shares higher?"- an excellent description of the falling dollar momentum.

I did not post the link because it is from a mutual fund site, possibly considered competitive by our hosts.


". . . a development that is truly extraordinary?currency traders have in recent days been giving their strongest signals yet that they now believe there shall be no return to previous glory days for the greenback. Ever since the great bull market for the dollar began in 1995, it was routine for currency traders to borrow currencies both weak and cheap (such as the Japanese yen) and invest them elsewhere in anticipation of both relative currency strength and higher interest rates, allowing this ?carry trade? to generate profits. The dollar was clearly the depository and beneficiary of this, helping to explain how the dollar itself became a momentum-created bubble over several years? time.

Now, of all things, we?re seeing reports of traders borrowing dollars and investing them in safer and higher-yielding currencies. Not only the euro is benefiting from this; higher-yielding (and more commodity-dependent) currencies such as the Canadian and Australian dollars are getting some action as well. The significance of this sea change in the attitude of the currency markets cannot be overstated and, though this very different treatment of the U.S. dollar will be inviting even more volatility in its value down the road, it nevertheless shows the growing conviction that the buck?s long term trend has been decided upon by those who matter most.

A weaker U.S. dollar?which in the end will do more harm than good, no matter how much you hear about how wonderful it will be for some multinationals who might temporarily be able to export more?will ultimately be inflationary. It could cause financial turmoil world-wide. That will be a bonus for gold, on top of the many reasons already existing. "

GoldiloxNew currency release#10238405/05/03; 16:55:11

I was at a local Indian casino yesterday, and they were posting pictures of the new money in their cage, so I think "financial" businesses are already getting the heads-up on new currency release.
specie-manSure Thing#10238505/05/03; 17:03:38

Socrates964, I like that description of Alan Greenspan:
"no great thinking behind a facade of verbosity".

I'm continually amazed at how much he says without really saying anything. And he never really seems to say "I think ...". It is usually "most analysts think ....". As if he never wants to let on what he really thinks.

Anyway, I wrote a "Sure Thing" essay about this a few weeks ago that was posted at the Prudent Bear site (see link above).

Dollar BillJohn the Jute#10238605/05/03; 17:14:46

Greetings JtJ,
Good post. As seemingly all are here. I was reading Harvard's 2 Mags today and articles from the oil patch and one from a world bank official were of interest. The investment big boys of Bahrain, I believe if was, were finding lots of interest in thier customers for properties in the US and Europe and were hot on investing in US businesses.
Thier customers are representative of the arab men who own 1.6 Trillion dollars. Also mentioned was the positive mood
in the air now that saddam was gone.
The world bank fellow mentioned that the world market would not work without the role played by the US. Countries who
run trade surpluses cause trade deficits in other countries and the US role is to be deficit country of last resort. (he said it much better).

I keep coming back to the idea that the oil countries count on the US being THIER military. The US has played thier cards well with the govts in that region lately. And gotten support there. In spite of any state media comments otherwise. Arab shieks are not jealous of US riches.
THEY themselves run their countries to thier families advantage. They have thier own enemies. And maybe they understand that euro men are not any better than US men.

As long as they feel the US listens to them and responds to them, gives them the respect they want, I dont see thier motivation to upend the US and thier world. Just for what? So that the euro guys can run up trillions of deficits like the US does now? Isnt that really what "reserve currency" means?
Just guessing here, but isnt it really about giveing politicians the ability to spend like mad for decades?

misetichUS layoff soar in April #10238705/05/03; 18:50:47


A separate survey, however, showed job cut announcements surged 71 percent in April, driven mainly by cash-strapped state and local governments.

Planned layoffs rose to 146,399 in April -- the highest level in five months -- from 85,396 in March, according to job placement company Challenger, Gray & Christmas. That prompted economists at Lehman Brothers to raise their forecasts for a drop in May payrolls to 80,000 from 50,000.
"The sharp increase in job cuts last month should serve as a warning that it is premature to conclude that the quick end to the war in Iraq will bring a quick turnaround in the economy and job market," Challenger Chief Executive John Challenger said in a statement.

The US jobless recovery continues -
Some say trillions are on the sideline ready to invest - yet stock PE multiples are near an all time of 30 -
Tech stocks analysts have forecasted 3rd quarter earnings growth to the tune of 54% - and the valuation of is already reflected - most investors will be disappointed by the reality of a slow moving (recession) US economy
Corporate insiders did not buy the recent SM move - fewest purchase since 1995 during April-
Buffet says junk bonds are now overvalued
The Real Estate market is in bubble territory
Money market funds investments are showing negative returns adjusted for inflation

Logic defies that foreigners especially Arabs are willing to invest in the US -

All On Board The Gold Bull Express

21mabry(No Subject)#10238805/05/03; 18:54:10

R Powell, will look for the book, and make a report.I live near Ann Arbor, great used bookstores. 21
misetichPlanned layoffs increase 71 percent#10238905/05/03; 19:01:30


LAYOFFS AT U.S. FIRMS surged 71 percent to 146,399 in April from 85,396 job cuts planned in March, job placement firm Challenger, Gray & Christmas said. That brought the year's total job cut announcements to a hefty 502,194 even as U.S. troops made rapid progress in the battle for Baghdad.
The 57,927 job cuts announced by government agencies in April were the largest one-month total from a single industry since Sept. 11, 2001

Most municipalities, cities and states finances are in disarray - tax inflows have been curtailed as the reality of the unemployment numbers appears to suggest that the reported 6% is much much higher -
Pension plans are in the red
SAARS is taking a toll on the travel and tourism industry -

Most investors hoped that history would repeat itself as after the 90 Gulf War - yet most forget that it real estate was the engine of the early 90's turnaround whilst currently it is in a satured mode as is the technology industry (overcapacity abounding)

All On Board The Gold Bull Expess

KiloThey really said it !#10239005/05/03; 19:10:22

...."The U.S. government has never recalled or devalued its currency".....

Link to "official" information on the new currency.

misetichThe dollar is on borrowed time#10239105/05/03; 19:11:51


Expect a crisis of confidence when reality finally sinks in. It's the reason I think the place to be is in currencies that have lasted 5,000 years, can't be forged or rendered valueless by inflation: gold and silver.
We all know that the government will cheat us over time, via inflation. We just don't know at what rate. While lots of intelligent people believe that deflation is right around the corner, this is not my belief (nor has it ever been). I believe that people have come to confuse declining asset markets with "deflation." Deflation, to me, means that the value of the dollar appreciates against a basket of goods and services.
This suggests to me that the dollar is on borrowed time, and trouble is coming, sooner rather than later. It also means to me that the price of gold has seen its lows. And, while the tsunami of investment demand that I envision may still be months away, I believe the surprises will now all be on the upside for gold.

I would just like to close by leaving you with one of my opening thoughts: In a social democracy with a fiat currency, all roads ultimately lead to inflation.

Bill sums it up pretty well -

All On Board The Gold Bull Express

Maverick1Kilo#10239205/05/03; 19:14:58

They really said that? What do they call the stunt they pulled in 1933?
misetichBechtel tied to bin Ladens - Osama bin Laden family members invested $10M in an equity fund run by former Bechtel unit.#10239305/05/03; 19:22:04


NEW YORK (CNN/Money) - The Bush administration launched a war on terror because of the alleged acts of Osama bin Laden. Ironically, one of the companies the administration has picked to rebuild Iraq after the latest phase of that war has ties to bin Laden's family, according to a published report.
According to an article in the May 5 issue of New Yorker magazine, several bin Laden family members -- part of a large, Saudi Arabian family that made a fortune in the construction business -- invested about $10 million in a private equity fund operated by former subsidiary of Bechtel before Sept. 11.


21mabry(No Subject)#10239405/05/03; 19:29:48

I think Jim rogers is on financial sense newshour this saturday. That should be a good interview. I appreciate the suggestion given earlier about the book on Roman Britian. That is an interesting subject, how the military outposts of the roman empire fared after the collapse. I imagine many garrison and legion commanders became warlords and local nobility. CNBC is going to have to get a commodity show soon. People have to soon realise that its a traders stock market and thats it.Luis Rukyser had 2 money mangers on telling people to invest in the QQQs, and look for 15 percent gains in the big board this year. 2003 is allmost half over how can they say that.
AristotleSome people "get it." Alas, some people never will.#10239505/05/03; 19:34:19

I went for a walkabout and came back with this shiny plaything. Tim's my hero for the day if his comments can help anyone else around here "get it." Have youe read it? Got it? Good!!! Gold. Get you some.

This bit along with a few comments of my own oughta get y'all started down the path of righteous thought:

= = snip = =
By Tim Wood, 2003/05/05

NEW YORK -- One popular excuse for weak gold prices is the lack of product and distribution. It is really a coded phrase meaning that the majority of Western investors would prefer to own gold in a non-physical form.

It is not difficult to buy gold if you desire it. You can buy gold coins by mail order in most places while dealers of one sort or another dot every major city in North America, Europe and Japan. Walk in, put your money down and take home your gold. If you're a more substantial player, you can also buy futures contracts and take delivery of large lots.

For modern gold marketers the base of investors who like to buy physical gold in this way has been declining, so they have had to switch to alternatives which amount to a single thing whatever they are called – securitized gold. Whether it's GoldMoney's goldgrams, gold stocks, gold futures on Comex, precious metal mutual funds or the forty year old Central Fund of Canada [CEF], investors are buying paper that promises to represent gold in some way.

That sounds an awful lot like a fiat currency, doesn't it?

It is, though antagonists will cry foul because gold is ûber money. Fair enough, but unless you hold the metal physically, anything else you have is a promissory note and little else. Possession is nine-tenths of the law, especially for hardcore gold bugs and even then president Roosevelt proved to have a trump card.
= = end = =

I wanna draw a bit of attention to the next part where he says on behalf of the investment industry:

===="If you want to do volume business in gold, you need to tap the general retail market and that group is firmly wedded to paper instruments of one sort or another; representations of either a perceived or actual value."====

After that does anyone besides me find the next couple of steps a bit perverse?

= = snip = =
"While the retail investment market is not being presented with *new* ways to buy gold, there is increasing *choice* which is the most important development because it drives down the final price to the consumer..."
= = end = =

Do we all really *really* want a slough full of more and more paper promises (of perceived value) piled higher and higher to drive down the price/value for the consumer?

What's the outcome that we'd be seeing from all this additional securitization -- would we be getting a better handle on a market-price for the value of Gold metal? ...or would it be on the market-price of the various paperGold promises?

Ask yourself: At least until such time as a market shock shattered confidence, wouldn't the market having the higher profile volume tend to serve (as it does now, e.g., COMEX) as the driving method for price discovery? So, as metal-buying pressure is bled away by the derivitization/securitization craze, the true value of Gold will be held (and cheaply obtained, thank you very much!!!) by only those smart few who continue to demand the Real Thing for their investment buck.

To the extent that miners aren't complaining about the derivitization and securitization of Gold, do you think we might be seeing these mining companies being taken for a ride with their bullion banking financial advisors behind the wheel? Who's the beneficiary? Carefully consider Tim's following comments:

= = snip = =
An unintended consequence [of securitization] is a lurking threat to gold producer equities. The rash of new funds all promise an absolute discipline where the amount of paper you own is fixed to a specific amount of metal. Not so gold equities where the oft mentioned value of investing indirectly in gold is subject to relentless dilution -- simply examine the change in gold produced per share in issue from one year to the next to see this impact. It is hardly trivial.
= = end = =

It is also hardly trivial that the more in which Gold investment pressure can be diverted from Metal into inflatable defaultable paper instead, the more obscured the price/value becomes in the market for real Gold, and hence, the smaller their profit from their primary production. Through complicity miners have become important subsidiaries of bullion banking enterprises -- much more concerned with the maintenance of status quo and clearing liquidity than obtaining a fair market price (sky high) for Gold as tangible property.

As his article continues, Tim's overview of the push for and development of many varieties of paperGold in various places of the world hints at the size of the problem at hand. His conclusion is noteworthy if not altogether remarkable:

= = = =
[...] he market anxiously awaits the WGC's ETF, not because it is a unique product, but to see whether or not it can change gold investing dynamics. [...] The dark horse is one of the producers taking the initiative. Here, Goldcorp [GG] especially comes to mind. If it allowed investors to convert their shares into a special class of scrip representing the firm's bullion holdings and vice versa, that could become quite a play with dual benefits for the company and gold itself. After all, Goldcorp has done a lot of heavy lifting in the gold market over the last year; some help from its investors would not go amiss.
= = = =

Investors would do well to become better educated in price-discovery dynamics, grasp the concept of *value* and then do some *heavy lifting* of their very own.

Gold. Get you some. --- Aristotle

LeighSARS#10239605/05/03; 20:02:24

Here's a conspiracy thought for us to ponder: Does anyone remember FOA talking about the Asian crisis and saying that it was created deliberately? He said it was because certain parties were afraid the newly-rich Asians would start buying up too much gold. Well, SARS came out just about the time that the Chinese gold market opened up. And it's now devastating the economies of China and lots of surrounding countries. You can't buy a lot of gold if your economy's in a meltdown.

Sounds suspicious to me! Hey, even my kids are SARS-aware. They "quarantined" my six-year-old's stuffed kitten the other day because it was from China. Sick humor.

Paper Avalanche@ mikal - thanks for the story!#10239705/05/03; 20:07:54

I appreciate the link and the story. 5/13. Hmmmmm.


GoldendomeWhere are the higher interest rates?#10239805/05/03; 20:21:03

A year ago, if some one had said the dollar would fall by 20% in the coming year, nearly everyone, I believe, would have said, "Oh, in that case, interest rates will have to rise to keep investors in the dollar." Well, what gives here? The dollar is falling steadily, and viewed from a year ago, it kinda looks like a collapse, but interest rates have also fallen appreciably in the past year. I can think of no other currency that would hold such confidence...sure wouldn't see that paradox in a Latin American currency. So, what's with these these investors and fereiners? Do they just like to be at their own blood-letting or what? Has the dollar fallen so much that now they think, "well, it's down 20%, too late to get out now, might just as well ride it to the bottom and wait for a rebound."

Any ideas?..............Maybe they just like dollars, huh?

AristotleI.V. Holtzman#10239905/05/03; 20:44:52

Who luvs ya, baby!!!

--- Ari

TrapperSir Kilo#10240005/05/03; 20:53:58

The never devalue part is by letter correct but by experience NOT. Now value against goods or gold is another story.
But here is what gets me. Say we have the plates ( i don't think they use printing plates any more) to print us up some last years $20.00 bills. The new money is out but still make the old ones as we don't have new plates yet. How much good did the new bills do against us...none as I see it.
You can still spend all the old money you like. I have a small collection of 500.00 and 1,000.00 bills and I have great fun spending one of those every once in while, but the still spend, go figure.
Live small.

KiloMaverick1......Trapper......Aristotle#10240105/05/03; 21:15:08

Maverick1..... Yep, really said it. Right there on their own propaganda web page (see link). I suppose, "technically", they didn't really "recall the currency" since the gold coins were domesticly demonitized PRIOR to the recall..... you know, typical legal-speak, mumbo-jumbo, chicken and egg.

On the other hand, every time gold (as an official backing) of U.S. currency has been "revalued" upward (ala FDR), the net effect has been a direct and immediate devaluation of the dollar, whether they want to admit that or not.

Above is a good link in the FED's own words which might put things in better perspective..... i.e. doing exactly what they claim to "NOT" be doing.

Trapper....agreed. Monetary inflation by definition has the same effect as devaluation over time. Just look at recent dollar charts for proof of that.

Would be interesting to see just how far one could go in spending older currency..... back to the old "horse blankets" perhaps ?

Aristotle. ummmmmmm, everything but physical-in-hand can (will) burn. Anyone buying paper promises is subject to same (getting burned). Am I getting warm yet ? (big grin) Preaching to the choir to some of us who go back before "re-legalization", and wish your messages could see more exposure over on the "share-pushers" forum. Good stuff!

21mabry(No Subject)#10240205/05/03; 21:49:36

According to Ferdinand Lips book Gold Wars. The ancients measured the gold silver ration cosmicaly. The moon travels 13.3 times faster thru the zodiac than the sun.It was therefor thought gold was 13.3 times more precious than silver.In this way man was shown that even in money there is a divine order.
GoldnSilver2002@Goldendome,waiting for the fed to pull another rabbit out of the hat!#10240305/05/03; 21:59:09

Never bet against the fed ,they say.The stock market never goes down four years in a row, they say.Yes people are trapped,if the market doesnt go up,they are screwed anyway.Many are just waiting for the fed to pump up the market a little more to sell.People nowadays are leveraged way over their heads,they dont want to sell in case the fed does pull another rabbit out of their hat and others have either waited this long or otherwise their stocks are down so far,they feel they have little to lose.Now we are seeing the true dangers of propaganda.Precious few people are still alive who can remember 1929 or for that matter the nazi propaganda machine.They are waiting for the last minute hail mary pass.Precious few seem to realize,just how bad things really are,those that do are happily acquiring gold and silver at silly ,low prices.The fed continues to try proping up the markets and fooling people back into the markets only to find too many have been waiting/vowing to sell at these levels or that lo and behold the people are broke.Most people lived a lifestyle they couldnt really afford in the 90's living off profits from stocks and now equity in their homes.Everytime the market rises now,a wave of sellers will hit,as people need that money to pay debt.Lets face it debt accrues faster(interest) than the markets will rise.Anyone with a calculator can see its better to pay that debt off,than hope for a 20 percent year in a crooked market.As for the dollar ,just call it shock,no one in the american propaganda machine warned them and the average joe doesnt know where to hide his/her money.They have no savings'so no need to worry about a systemic collapse.Maybe many are hoping for it'so they can get out of all that debt and mortgage...ever seen "fight club"?If the system collpses no one owes anything,besides there is safety in numbers,if we all go bankrupt together,how can they collect?
SundeckGreenspan#10240405/05/03; 21:59:34

A Nation of One, Belgian, Socrates964, Specie-man

Agree, Greenspan uses lots of words to say comparitively little.

In his defence, at that level in politics (and FED Chairman is largely a political position) there is a great need to fill up space with bland utterances. With the eyes of the political and financial worlds apon him, a few ill-chosen words (those that have a clear meaning) could set the hares running in a dozen directions or the herd thundering off in unison. And that might be unpleasing for one's "masters".

The more serious the economic/financial situation, the more carefully must the utterances be crafted, so that the "situation" does not try to correct itself too suddenly. At those times, financial control is maintained by being vague, and subtly nudging things in the direction one thinks they ought to go. Perhaps his "irrational exuberance" utterance was such a nudge, but one that probably should have been a much firmer shove...but then there would have been political pressures from the highest levels to keep the party going.

While on the subject of "masters", who are Greenspan's masters? On the one hand he (and his Board) seems answerable to the Congress and the Administration, but on the other hand there are the owners of the Federal Reserve. A cynical person might say that "Serving the Administration" means "Getting them re-elected", while "Serving the owners" means "Making acceptable profits and preserving that capacity". Are these two aims always compatible?


Gandalf the WhiteSir Misetich --- TIES ----#10240505/05/03; 22:27:30

misetich (05/05/03; 19:22:04MT - msg#: 102393)
Bechtel tied to bin Ladens
WOWSERS Sir Misetich !!
Just because a BLACK SHEEP is of a certain FAMILY, does not make everyone in that FAMILY totally worthless, or EVERYTHING that other members of that FAMILY do an evil deed !! IF SO, my Family's name perhaps should be removed from the HISTORY of the Earth for my deeds.

Black BladeExpenses on Rise, Homeowner Burdens Get Heavier #10240605/05/03; 23:46:21;jsessionid=FY33MD4PKGOBYCRBAEKSFFA?type=reutersEdge&storyID=2684894


"Recent indications that insurance rates are going up, combined with the likelihood the fiscal difficulties of state and local governments will lead them to raise property taxes, will also affect the ability of borrowers to acquire mortgages or meet their current mortgage obligations," said Douglas Duncan, chief economist at the Mortgage Bankers Association of America, an industry trade group. "For those stretched to make mortgage payments, we could see a rise in delinquencies," he said. Duncan predicts "it will take a while to feed through, maybe later in the year, or early next year." State and local governments, hit hard by the economic slump, are boosting taxes to close huge budget gaps.

Signs of trouble for home owners may already be brewing. Usually, late payments on mortgage debt are preceded by late payments on credit cards and auto loans. After all, few people want to lose the roof over their head. The rise in late credit card payments has already been spotted. In March, the American Bankers Association said fourth-quarter 2002 credit card delinquencies shot to highs not seen since the group began tracking payment behavior 13 years ago. Much of that rise in delinquencies was tied to a sluggish employment market, which has worsened since March. Last week, the U.S. government said the nation's jobless rate rose to 6 percent in April. At the same time, Moody's credit rating agency reported that auto loan delinquencies were on the rise and the MBA reported homes in foreclosure in the final quarter of 2002 zipped to record highs. These signs all point to tough going for home owners.

Black Blade: It's going to get ugly. As always, get out of debt and stay out of debt, stash enough emergency cash for several months expenses, accumulate Gold and Silver portfolio insurance, and start a storage program of nonperishable food and basic necessities.

UsulFirms warn of big job losses#1024075/6/03; 01:45:00

"Up to 86,000 jobs will have been lost in UK manufacturing in the first six months of 2003 if current trends continue, the CBI has warned..."

"Sharp deterioration in domestic demand"

"weak global trading conditions had spread to the UK market"

"no region recorded an increase in orders"

Sure doesn't look much like a forthcoming 2nd half recovery to me

slingshotSir Black Blade Msg# 102406#1024085/6/03; 01:54:28

Expenses on rise

I almost went on a rant. Thank you kind Sir for bringing it to light.

slingshotUS DOLLAR#1024095/6/03; 02:34:21

Sub 96.00





May 6, 2003 -- THE only bright spot in the economy these days is personal income, which the government recently said rose 0.4 percent in March and 0.2 percent the month before. But Washington has to go through some mighty strange contortions to produce that type of gain at a time when each month thousands of people are losing their jobs and the rest are too frightened to ask for raises. The trick is in something called "imputations." That's a big bureaucratic word which means, in Pig Latin I suppose, that the government adds a lot of stuff into its calculations that no sane person would consider income.

For one, the government thinks the free checking accounts given to you by banks are actually income in disguise. The thinking goes like this: Years ago, banks used to charge for checking accounts. Now that they are free, the amount you don't have to pay actually saves you money. Voila, income. That's a line buried deep in the Bureau of Economic Analysis' Survey of Current Business. In case you have nothing more important to do, it's line 134, titled "Services furnished without payment by financial intermediaries except life insurance carriers."

And there's the imputed income that homeowners are supposed to get because they occupy their own houses. I'll say that again, in case your brain went numb: The government calculates imaginary income that you receive because you own your house and don't have to rent. In other words, the government thinks you get income from your home because you don't have to rent space from someone else. That's line 129 of the survey.

The government actually counts the meals served to military personnel as well as military clothing as income. I suppose you can't fight naked - the enemy would laugh at you.

Black Blade: Just another way that Washington is screwing you. And you thought that "hedonic deflators" were stupid. When Arthur Andersen does this it is called accounting fraud. When the BLS does this it is called accounting statistics. Hmmm…

ToolieAn end to the dinar news famine?#1024115/6/03; 03:11:14

This is the first mention that I am aware of, that there are plans to "mint" the Dinar. Though the article states that the intended use is to be commemorative in nature, it also goes on to say that "On the planned denomination of the dinar, he said that it would be up to the central bank to decide." This question comes to my mind; Why denominate a commemorative coin, with defined weight and purity? Could this be a precursor to introduction as common money?

On one hand, the article seems to try to relegate the use of the Dinar to religious uses, tithes and dowry. On the other hand, it goes on to state: "As for Royal Mint's plan to produce coins for Asian countries, he said that the company was in serious discussion with "a big Asian country" on the matter. "We are supposed to go there and talk but because of the Severe Acute Respiratory Syndrome (SARS), we have to postpone it for a while," he said." I wonder which country this may be Hmmmm. Further, why would this "Big Asian country" have interest in a religious commemorative coin? It seems as if this article is trying to tell two separate stories.

"The new facility allows the company to produce two billion pieces of blank coins per year." This seems like a great deal of capacity to me, for a commemorative coin. I may be reading too much into this but, the posturing of this coin as only a religious instrument seems a good deal like Greenspanspeak.

ToolieRe: Imputed Income#1024125/6/03; 03:40:01

Thanks Black Blade, The static level of my unemployment income had been cause for my recent lament. Thanks to your previous post, I now recognize that I have underestimated my prosperity during these times. I had failed to add the income from those fast food ketchup packages and the tomato soup that they produced. :-)
TopazBonds and Gold.#1024135/6/03; 03:41:14

There's a swag of T's coming to market this week, $65B thereabouts...will it tame the Bond bull?...methinks not!
Curiously, the Long Yield and Gold are in an inverse lockstep if you take out the 34-42 spike. Either Bonds hit their floor *again* @ 4.78% (nett Zero) or someone is driving PoG.
Euro/PoG is the key here imo...E300 it seems is the LIMIT...and a return to equilibrium E320 now seems does $320...but certainly NOT out of the question.
If they (ECB) do persist with it, E320-$480 is distinctly possible. The other option would be a biggish rate cut and a return to something resembling parity.
All irrelevant when/if Bonds do their Swan-dive.

SundeckDollars for oil - repatriation of petrodollars#1024145/6/03; 03:46:21

John the Jute #102381, Belgian et al.

Enjoyed your post JtJ - thanks for painting the circumstances surrounding "medium of exchange" so clearly. You've got me thinking about repatriation of dollars now.

From first principles, I suspect that the net global "float" of petrodollars is related to the cumulative total-dollar-expenditure on oil by all countries per unit time, and to the time-rate at which the dollars are recycled. On top of this will be the "oil-portion" of dollar-reserves set aside by all countries to buffer their balance of payments at any give time. Do away with the dollar-oil symbiosis and both the "whirlpool" of circulating dollars and the oil-portion of reserves will look for another home...back in the U.S of A.

Probably heaps been written about this here and elsewhere in the past, but how to find a definitive and succinct treatise???

Belgian: Thanks for your comments (always evocative) and for the Tlaga reference at the neighbouring castle.


HenriToolie on the Dinar#1024155/6/03; 05:47:00

The Dinar and its silver companion the dirham have been with us since time immemorial. This is not a "new" coin. These coins are mentioned in the Koran and their use certainly predates this religeous text of islam. They are defined as a certain weight of gold/silver. When they say let the central banks decide the value of the coins they mean something more like the value of the gold will determine their worth. The country they are most likely referring to in asia is Maylasia as their president/leader is the biggest proponent of Dinar usage for settlement of international imbalances and protector of the ringit (Malaysia's currency). Indonesia has also joined this movement and both of these countries are predominately islamic.
slingshotBlack Blade#1024165/6/03; 06:11:30

Msg# 102410

Meals served to Military.
Clothing for Military

What a sham!

I paid for my uniform before I left Boot Camp and was given a pitance for uniform upkeep. Hey do you rememeber the Zumwalt Ice Cream Man Uniform for the US Navy.What a waste.

Meals? Well they all have Comrats now and eat at a galley which charges for meals. Not a bad price though.

What about on board ship? Have to feed the troops. It has been a long time since I have been shipboard. Maybe they charge them for their meals?

misetichCorporate Cash Flow — Thank Goodness For Depreciation#1024175/6/03; 06:34:59


The Fed's flow of funds database is just packed with nuggets of information. Unfortunately, these days those nuggets are radioactive when it comes to the economy. For example, one of the nuggets I just discovered is that for the past three years running economic depreciation for nonfinancial corporations has accounted for over 90% of their domestic cash flow. (Cash flow is defined here as essentially book profits minus accrued tax liabilities, dividend payments, and depreciation.)
This nugget or "factoid" has some disturbingly interesting implications for business capital spending and/or the stock market. If corporations use all of their cash flow to purchase plant and equipment when most of their cash flow is generated by economic depreciation, they will be essentially "running in place" with respect to increasing their capital stock. All that they will be doing is replacing worn out or obsolete equipment. This cannot be good for corporate profits or productivity going forward.

ANOTHER nail in the coffin in Sir Alan productivity miracle

All On Board The Gold Bull Express

HenriHow to beat inflationary forces#1024185/6/03; 07:17:12

Good grief! I had a horrible thought. If the US administration knows deep down that the dollar is toast and that reams of paper are coming home to roost from foreign lodgements, how do they intend to keep inflation at bay. They first had to run the printing presses to satisfy immediate what?

With Fed/street manipulations of the market all they need to do to remove uneeded dollars is drive down the major trading indices with leveraged backroom action and make trillions just disappear...if they collect their side of the bet and send their take to the shredder, the influx of foreign based dollars will rush in to fill the void and maintain order...

The operating assumption justifying such a move would be something like..."This is spare money that people don't really need or they wouldn't have put it into the market."

On the other end of course government buddie companies set up to intercept the influx and channel it into seemingly legitimate avenues to replace the sucking void created by the enginered market crash. Low to zero interest direct deposits in everybank allowing easy credit that does not have to be and is not traceable directly to the Fed.

A thing of beauty. Joy forever

UsulNikkei April '00 versus S&P500 May 2003#1024195/6/03; 07:34:58

ZhishengGandulf's Pups#1024205/6/03; 08:11:59


I think you ought to check on Spot and Spike. Someone is abusing them.

Liberty HeadInflation Equals Tax Re Henri # 102418#1024215/6/03; 08:29:13

I do not think our government wants to prevent or halt inflation. Inflation is simply another form of taxation with the added benefit of stealth. Only a reduction in government spending will prevent the death of our economy.
Don't hold your breath waiting for that to happen.
Better to store your wealth somewhere else, like gold for instance.


slingshotGold Thoughts.#1024225/6/03; 08:29:25

I ask my brethern.
What they have left.
These scoundrals many.
With short breath.
And with short lives.
Face certain death.
We stand steadfast.

They have no life.
Of which to share.
Just bleached bones.
On which to stare.
Once putrid smell.
That fills the air.
That could not last.

Yet there are many.
Which still hang on.
To the sirens.
Enchanting songs.
Upon the rocks.
Their ships belong.
And with hope dashed.

But for the few.
Who listen sound.
Their journeys end.
Shall be found.
Upon rock and solid ground.
A golden light does flash.


Are you looking Goldenrod?

adminMK's Commentary & Review#10242305/06/03; 08:45:38


Light news day so far.

Couple new links:

One on Mine Company de-hedging, with an explanatory note for those new to the gold market

Another on why stock mutual funds could become a minefield for unsuspecting investors

Also, we invite you to submit your entry for "Friday's Question." If it's chosen for publication, you win a one ounce silver Eagle.

Submit question to
This email address is being protected from spambots. You need JavaScript enabled to view it. .

USAGOLD / Centennial Precious Metals, Inc.Put a Solid Foundation Under Your Portfolio#10242405/06/03; 09:30:55

Swiss Gold Francs

Get the Legendary SECURITY of a Swiss Account...

...Delivered to Your Door.

Call USAGOLD - Centennial for Arrangements

Gandalf the WhiteIN CASE that you missed the note for the NEW WEEKLY CONTEST !!!#10242505/06/03; 09:31:28

Also, we invite you to submit your entry for "Friday's Question." If it's chosen for publication, you win a one ounce silver Eagle.

Submit question to
This email address is being protected from spambots. You need JavaScript enabled to view it. .
**** In his DAILY "MK's Commentary & Review", SIR MK said:

Please Note: We are going to try to make Friday's Question a regular feature and will award a Silver Eagle to the question from the public selected for publication. Submit your questions to This email address is being protected from spambots. You need JavaScript enabled to view it.
SO, NOW the American one ounce PURE SILVER EAGLES are flying out of the Castle on a WEEKLY BASIS !
(Did you see that Rich ?)

TownCriertic... tic... tic... tic... tic...#10242605/06/03; 09:46:42

Speaking with Jonathan early yesterday evening I learned that one of these offers is down to the final twelve coins. If you have an interest, don't delay. The call is free, the service is friendly, and the product is everlasting ... a good countermeasure to the value of today's shrinking dollar.


balzacINFLATION HEDGE OR SAFE PARKING??#10242705/06/03; 09:47:18

It seems that with the fall in the US dollar , the SM is becoming
the place to avoid loss in capital, have people forgotten that
gold is the best hedge against inflation?


Socrates964Henri#10242805/06/03; 09:52:26

think you're on the right track, but possibly not digging in entirely the right place - much easier, IMHO, to make money disappear by manipulating the bond markets.

Currently appears that the Fed is sterilising $-inflows by printing money to mop up bonds. In a way, like equities, you create a spike to sell into.

This does not, of course, rule out a sharp drop in equity prices, I just don't think that equities are the main game, as bond markets are much deeper.

Assuming that the Japanese are the last to sell their T-bond holdings, the Fed may be able to pull this one off by simultaneously engineering a bounce in the $ against the Y so that even if bond prices crash from their high (say 116-18 on the T-bond future), by pushing the yen down to say the high 120s, the Yen return on US bonds over the crash period can be set to zero.

My point is that when you have two rotten currencies falling off a cliff, one can use aerodynamics to temporarily levitate with respect to the other (i.e. the BoJ prints lots of Y while the Fed contracts broad money) - evidently, they both eventually hit the rocks below.

miner49erJohn the Jute @ 102381 - Homeless Dollars...#10242905/06/03; 10:06:12

Good post, John! Very nice way of explaining the relativeness of scale.

Regarding your musings re: dollar repatriation, it can be a tough one to answer. The obvious take is of course as you express, that without use for dollars, they would simply find their way back to US shores, and help drive (hyper-)inflationary pressure. Yet, if you will permit me also to think out loud for a moment ;->, perhaps we can take a look at this currency as the derivative instrument it effectively is, and then try to figure out its ultimate fate. Let's view it specifically as a kind of call option; one that commands a premium as a price paid for its exercise-ability at any time for any of the goods or investment media that exchange in the currency's universe (or the settlement of debts). This amounts effectively to a liquidity premium.

This premium gives it a trade value in its own right, and as such, as long as there is a market that believes in the currency's stability, the currency itself trades on its own merits. Not unlike futures and options. And just as many of these contract instruments get exercised for whatever underlying asset they represent, most are simply exchanged among speculators and hedgers trying to benefit from movements in the contract price, never actually intending to exercise or take delivery. The paper remains viable so long as the holder is confident that the next guy believes the contract is generally good.

While many holders of a currency intend to "exercise" the currency for real things, especially those in the currency's principal use domain, most of these currency units are likewise exchanged among speculators and hedgers (including all those private individuals, who own dollar denominated savings and investment accounts overseas), who are only trying to profit (speculate) from the currency's movement, or preserve (hedge) their own currency's seemingly endless trek of depreciation vis-a-vis this US dollar. Most of these have no intention whatsoever of "taking delivery" of things with these currency instruments.

So, what happens to the dollars they sell? For these average citizen types, the banks that held their accounts buy them. They then either sell them to another institution or may enter the foreign exchange markets themselves (depending on how they are regulated). They also may hold some back, depending on how they wish to balance their own portfolio. So, now these dollars that have not ended up remaining in reserves at these banks have entered the foreign exchange markets putting upward pressure on the currency of the seller, and downward pressure on the dollar.

Historically, the paradigm was to do as little of this as was necessary in order to keep the seller's currency "competitively" weak (among other reasons). As the influence of export to the US wanes (tapped out US consumer + growing size and sophistication of other markets), the need to keep one's currency weak vs. the USD, so as to compete for this market also wanes. Instead the stabilizing and strengthening of one's currency becomes more important (thereby encouraging borrowing in the local capital markets), and allowing local workers to enjoy a bit more the fruit of their labors, instead of always helplessly watching the value of their labors get sucked into the vortex of a dollar-dominant currency paradigm.

So, do these orphaned dollars eventually come home to roost in the US domestic markets? We will be told that. The media will wring their hands over anecdotal wake-up stories like Arabs buying up vast tracts of property, and how "they" will soon "own" the country... (This has been going on for ages in the U.K., as you're aware... every other lovely English manor is seemingly owned by some Saudi mogul...) We experienced the same with the Japanese in the 80's (Rockefeller Center...). Hence part of the political response will be to enact capital flow restrictions. But anecdote amounts to chump change, in a purely financial evaluation.

The really big holders of dollars are the central banks. What they do with their reserves will make or break. Their influence over other banks and financial institutions will also largely dictate the destiny of these dollars. In the gold standard, the currency acted as something of a title deed for a specific good at a specific price. Central Banks could and did take these "receipts" and claim gold from each other. In this day, there is nothing for CBs to "claim," as these dollars are no longer "title deeds." Rather, they are like non-expiring calls for things on demand, at the variable and going price. CBs are likely to neither a) dump them on the forex markets, as this would simply devastate the currency, and risk dreaded instability globally -- something banks are NOT prone to do; or b) race to our markets to try and buy things (like gold), as this would also be fruitless, since a market revaluation for this action would instantly make gold unpriceable, and it would not even be offered. Again, why engender the instability?

Without a certain weapon in the arsenal of the euro's design, the foreign CBs would indeed be over a barrel. Previously they were forced to evermore be on a dollar standard, since they would realistically only opt for this as the lesser of two evils. The alternative of saying no to the dollar at that time, would only have meant a return to a gold standard, and the politically unacceptable bone-crushing depression that would follow (as well as instability). In 1979, the European CBs began marking their gold reserves to market. This one act demonstrated immense foresight, and would provide the escape valve from the rock-and-hard-place no-win choices between eternal dollar support, or global depression.

Quietly, the euro-system banks have been divesting themselves of dollars. Collectively they retain something like 211 bn. currently. (This is not a large amount relatively speaking, but consider fractional reserve lending, and quickly we perceive the immesity of euro-dollar infestation.) This decline in dollar holdings is desired to take place concurrently with a rise in the price of gold to offset this. Spoonfeeding dollars into the system won't crash it, as well a slow commensurate rise in gold. The discipline that they have thus far maintained is indicative of the tectonic movement of the geopolitical strata. Ideally there will be no rash or even discernible activity. The perfect result is to simply keep shifting these plates until we wake up one day and the world has been remapped. Reality of course is that there are points of friction that cause tremors of unpredictable frequency and proportion all along the way. At some point critical mass will be reached, and the dollar contract markets for gold will no longer be able to contain its price as market perception on a large enough scale discounts paper parity with the real metal accordingly. It is at this juncture that the gold reserves of the CBs will provide immense expansionary leeway, as they are for a season revalued constantly upward. This bona fide liabilityless reserve base will make the ECB member banks the premier lending institutions to fuel the economic growth of the euro zone, and those align themselves with it.

In this respect it is important to curry the cooperation of the more maverick dollar holders, like China and Russia, as their track record of unpredictablility, may lead them to use their dollars as weapons... (And don't think that their dollar debt is of much concern to them, as they know all too well that those totals can be reduced in real terms to pocket change, if such a hyper-inflation were to manifest.) Indeed as far as the books are concerned, this one use for these dollars overseas -- the repayment of dollar debts -- would actually provide a contractionary effect as these receivables are cleared from the balance sheet... One reason why Goldendome's sought after interest rate hikes can't happen... (gotta keep expanding..., and making it more expensive to borrow, isn't gonna help matters...) [Goldendome, there is much to this discussion, and I would like to provide my opinion in response to you -- as I used to think exactly the same... I likely won't have time, but the Trail provides some excellent discussion along these lines...]

The strategy of the level-headed is to slowly remap the globe financially. This involves as much as possible a SLOW transformation from one currency paradigm to Another. These dollars en masse will not return home. They were born in exile and will die in exile. We will hyperinflate ourselves, and won't need help from overseas...

Take care John the Jute,

TownCrier"The dollar is continuing to fall, and dramatically."#10243005/06/03; 10:37:25

Commentary excerpts:

(Tuesday, May 6, 2003) -- The dollar is continuing to fall, and dramatically. Yesterday the euro closed in NY at 1.1285 after having flirted with 1.1302... This morning it hit a new 4-year high against both the dollar (1.1341) and yen. It's a 4-year high against sterling, too.

The dollar made new lows against the pound (1.6109) and the yen, too (118.26). Against the higher-yielding commodity currencies, the dollar low is a 5-year one against the C$ (1.5061) and a 3-year one against the A$ (63.89).

...Today the big event is the FOMC, which the majority of observers say will take no action but might signal a "balance of risk" change.

...In Tokyo, the government announced that it will announce a stock-boosting plan, and the Nikkei closed over the psychologically important 8,000 level for the first time in almost a month.

...On the euro, a fascinating tidbit: former minister Robin Cook wrote an editorial in the Independent newspaper urging that the UK not "shut the door" on EMU entry and proposing a firm date for a referendum--before 2007.

-----(see url for full forex commentary)----

TownCrierMetals - Gold higher in late London as dollar hit fresh lows, all eyes on FOMC #10243105/06/03; 10:44:12

LONDON (AFX) - Gold pushed higher in late trade boosted by another weak performance of the US dollar which touched a fresh four-year low against both the euro and sterling overnight, dealers said.

At 3.50 pm, gold traded 90 cents higher at 343.00 usd per ounce.

Trading conditions were thin as London and Tokyo returned from May Day holidays today, and all eyes are on the Federal Open Market Committee interest rate decision today at 7.15 pm, they added.

-----(from url)-----

I will bring forth the FOMC statement when it is released this afternoon.


John the Juteminer49er @ 102429 -- Homeless Dollars#10243205/06/03; 11:25:50

Gosh, what a thorough response, miner! You've clearly thought about this matter in considerable detail. Thank you for sharing the results of your thoughts with me.


JemeJordanHussein's Son Took $1 Billion Just Before War, Bank Aide Says#10243305/06/03; 11:42:58

Hussein's Son Took $1 Billion Just Before War, Bank Aide Says
JemeJordanGag reflex: When U.S. cooks books#10243405/06/03; 12:21:36

Gag reflex: When U.S. cooks books
TownCrierFOMC Statement -- May 6, 2003#10243505/06/03; 12:26:19

The Federal Open Market Committee decided to keep its target for the federal funds rate unchanged at 1-1/4 percent.

Recent readings on production and employment, though mostly reflecting decisions made before the conclusion of hostilities, have proven disappointing. However, the ebbing of geopolitical tensions has rolled back oil prices, bolstered consumer confidence, and strengthened debt and equity markets. These developments, along with the accommodative stance of monetary policy and ongoing growth in productivity, should foster an improving economic climate over time.

Although the timing and extent of that improvement remain uncertain, the Committee perceives that over the next few quarters the upside and downside risks to the attainment of sustainable growth are roughly equal. In contrast, over the same period, the probability of an unwelcome substantial fall in inflation, though minor, exceeds that of a pickup in inflation from its already low level. The Committee believes that, taken together, the balance of risks to achieving its goals is weighted toward weakness over the foreseeable future.

Voting for the FOMC monetary policy action were Alan Greenspan, Chairman; William J. McDonough, Vice Chairman; Ben S. Bernanke; Susan S. Bies; J. Alfred Broaddus, Jr.; Roger W. Ferguson, Jr.; Edward M. Gramlich; Jack Guynn; Donald L. Kohn; Michael H. Moskow; Mark W. Olson; and Robert T. Parry.

------ end of statement -----

Looks like an easing bias to me. How low will they go? Stay tuned for the June 24/25 meeting, and August 12 after that, September 16 after that, October 28 after that...


R.J.Gold Bullion Dealers#10243605/06/03; 12:43:21

Can someone help me with this one -
I need to find a hallmark wholesale gold bullion dealer/distributor/seller who can issue a discount on the sale of large quantities.
Its getting impossible to find the right man.
Any help/direction with names tele no.s etc would be most appreciated.

TownCrierR.J., the phone call is free#10243705/06/03; 12:51:34

USAGOLD - Centennial Precious Metals
P.O. Box 460009
Denver, CO 80246-0009

United States toll free (800) 869-5115

local/direct dial (303) 393-0322
fax (303) 399-6759

The "right man" has a name. It is Mike Kosares. If your objective is indeed doable, he is the man who can get it done.


MarkeTalkMexican Central Bank Selling US Dollars#10243805/06/03; 12:56:30

I was told by a friend of the firm that today's edition of the Financial Times carried an article about the Mexican Central Bank selling US Dollars in a big way. So now the Mighty Buck is falling against both the "northern peso" (Canadian Dollar) and the "southern peso" (Mexican Peso). Who would have thought such a thing would have been possible just a year ago? It is no wonder that the US Dollar Index has broken major support and appears to be in a freefall state. The US currency is going a lot lower very soon. Expect gold to react very strongly to the upside just as platinum did today.

Even notable market analyst, Arch Crawford (Crawford Perspectives), is expecting to see a HUGE move up in gold and commodities in general during this very month of May. Time will tell if he is right again. He was right in calling the bottom in gold in April 2001 at $255/oz. I was reading his newsletter very closely back then with a sceptical eye. I would not want to bet against him this time. For those clients of mine who have been waiting to make their first-time purchases or to even add to their holdings, now might be the right time. Don't hesitate in calling me today or any day this week here at Centennial on extension 102.


TownCrierGold bars#10243905/06/03; 13:01:00

Living in an economic "tornado alley"?

Secure yourself with financial bedrock right here.

mdgcdollar plunging#10244005/06/03; 13:22:19

The dollar is in freefall against the Euro, the Yen and the Canadian dollar since the Fed statement.

IMNHO the Fed is going to have to raise rates in June to protect the US dollar. Any thought of reducing the rate any further are just wishful thinking.

cyberbatWhat Happened#10244105/06/03; 13:34:36

Can anyone explain why spot gold went vertical after the close, up $2.00 with no market trading? (see -itco chart)
cyberbatGold & the EURO#10244205/06/03; 13:45:30

Euro now up to 1.1442 and gold up 2.40/oz. Is there some breaking news somewhere that is causing all of this or is that giant sucking sound I hear just dollars coming home to stay?
CoBra(too)@ Cyberbat#10244305/06/03; 13:47:39

Seems the Dollar is in freefall - down to 95.40 on the DXO -the € is trading at 14.40 and POG shot up in the aftermarket.
Seems like Greenspan kept his last IR powder dry - as it won't be to any avail - after 12 rate cuts - anyway.

Seems like the globe started dumping the fiat reserve in earnest - who's going to blame them. It's the only way to express that military superpower status is only one side of the coin - the other - can the PTP afford it?

The market seems to have the answer to this question - definetly NOT!

... And BTW - it's the € - holders time to load up on gold at give away prices. Wow, what a bonanza ... cb2

AristotleMiner-man#10244405/06/03; 13:54:06

As I read your post I was held in rapt admiration. So many folks stubbornly live in the past, but when a few guys like you (y'all know who you are) can lay it out so clearly for general consumption, surely the future for everyone is brought forward by *at least* a few days.

Thanks for your contribution toward making the world, in aggregate, a more rational place one post at a time.

Gold. You know the drill. --- Ari

cyberbat@ CoBra (two)#10244505/06/03; 13:55:05

If the PPT is going to short this market again, they will require more dollars /oz. as the dollar is dropping. You can cozy up to the feds and the brokerage houses and even the hedging gold stocks CEO's with their evil game of manipulation but this act is just about over. Remember I said it here. YOU CAN'T FOOL THE CURRENCY TRADERS or even manipulate it for long. They will have to short gold and sell EUROS to keep this game alive and I don't believe they can do it.
Black BladeUSD Down Hard - Gold Up Nicely#10244605/06/03; 14:07:02

The Head Fed did not say much except to encourage his buds to keep rates unchanged. Meanwhile, the USD looks to fall below 95 anytime now and Gold rebounds over $2.00. This should get "interesting".

- Black Blade

CoBra(too)Law suits against SA Miners ...#10244705/06/03; 15:23:00

Being aware of MK's short passage about it a few days ago I've almost dismissed it.

Now the notorious Ed Fagan, being the blackmailer for Swiss Gold, Austrian forced labor during the Nazi regime and lately the Kaprun Glacier cable car inferno - is at it again.

What began as Apartheid accusations across the SA Gold Mining sector, became toxic uraniumn radiation in between a few days - directed at Gold Fields. As the co. has a listing on the NYSE, as well as US interests it seems they're liable in the US for prosecution. Even if the facts may be true, these alledged violations of good conduct have not happened in the US, but in a sovereign country within their own jurisdiction.

A US based lawyer trying to bring his own jurisdiction to the rest of the world just shows how far the fundamental rot of the system has advanced. A lawyer based in a country not accepting international law, nor jurisdiction has IMHO not the standing to speak for the rest of the world. The US law professional vultures are undermining the US at a faster rate than the FED.

... In due course, countries trying to sell their excess Dollars may be outlawed - as it's against the IMF and WB and now BIS rules - as GOLD may again be outlawed?!

Isn't it kind'a ackward that the cradle of liberty and personal freedom was the first country to confiscate and ban and make it illegal to own gold from the public?

... and even as the US Dollar reserve currency is tanking fast - against all major and some minor currencies, even against the much laughed at Pesos of the world - the US is losing any form of its liberty and is on the way to a super (power) banana republic.

The jurisdiction of the country, maybe enhanced by another neo-con inhibiting, and yes inhabitating, the supreme court is just a sign of the time. Reminiscences of the last days of the Roman Empire may not be - just coincidence.


PS: Got a kick out'a the Polish sec. def., who's promised German and Danish troops for their quarter of Iraq ...Oh, without asking them beforehand.

PPS: Seems like the US has great allies, even if some deserted - so what! We'll treat 'em accordingly.

PPPS: For how long does the neo-con admin think it will fool the rest of the world ... or better, when will the globe call it quits and send the reserve paper home to sender? The consumer of last resort is capitulating, corporate America in default and the government too!
Don't go Yahoo ... go Gold!

TownCrierHEADLINE: The Fed's Call Hits the Dollar#10244805/06/03; 16:08:18


Somewhat unexpectedly, the FOMC said the risks are weighted toward economic weakness, which put additional pressure on an already sinking dollar.

...Treasuries rallied in reaction to the Fed announcement after struggling early following poor demand for the three-year note auction.

The dollar, which was getting pummeled prior to the Fed meeting, weakened further, with the euro breaking through the $1.14 level ...The dollar also weakened vs. the yen and other major currencies.

...The Fed's statement hinted that more rate cuts may be forthcoming, which would further undermine the dollar's relative attractiveness to foreigners.

..."[Tuesday's] decision signals that the Fed is a step closer to resorting to its emergency liquidity driving measures, a possibility that portrays the path towards economic deterioration."

..."They will not implement policies designed to support the dollar, and will tolerate a weaker currency, because it helps their goal of long-term economic growth."

...The Fed, in concert with the Bush administration, seems to be betting that the dollar's fall can be managed and the salutary effects of a gradual decline will kick in rather than the more draconian impact of an accelerating dollar decline.

As with life, it turns out running the global economy is a gamble, after all.

-----(see url)-------

When you lose the stomach for speculation in your life you can instead choose to keep it real -- with gold.


steadyother countries liberalizing gold trade and rules#10244905/06/03; 17:04:12

HANOI (Dow Jones)--Vietnam's restrictions on trading in gold products could
be lifted as early as the second quarter, making gold trading easier and, the
government hopes, cut down on some illegal operations, a central bank official
told Dow Jones Newswires Tuesday.

Currently, Vietnam law puts all gold import-export activities under the
central bank's control and trading in more than three kilograms of gold
requires a license.

"We have allowed unlimited imports of gold products, including bullion gold,
and will soon remove controls on granting licenses to create easier conditions
for gold traders," said the official at the central bank's Department of Forex

The changes are expected to allow traders to openly trade larger volumes and
expand operations.

rest at link.

yep the part time paper pushing gold slackers over at comex are looking sillier and siller all the time. heck they cant even get there market back to normal hours yet even after how many months from 9-11.

CoBra(too)USA Contra Saddam - An Unavoidable War ...?#10245005/06/03; 17:39:58

Please excuse the fact that I seemingly can't get off the topic. I do, never-the-less, feel it's an all important topic and I'd like to expand on it again.

A Berliner politics professor of the Humboldt University, Herfried Muenkler, has already published a study of the Irak War: " The New Gulf War"!

He's reasoning in citing 3 strategical goals - stabilization of the region, insure free access to the vast ME oil and last but not least, garuanteeing the security of Israel! - may be a bit rash.

Though, if that's so - the US are now in the drivers seat of global power politics and have no real foe - except the real and true weakness of the economy and the as a result the overstretched viability of its currency.

As the globe's largest creditor, ever in history, it will potentially meet the same fate as the Roman Empire losing its capability to pay for its expansion ... by implosion of monetary system ... and even if the rest of us have to accept the superiority of US force - will we forever accept the denigrating effect of a fiat reserve hegemony?

... Well, will you? cb2

silvercollectorbalzac#10245105/06/03; 17:40:07

I may be in left field with these comments so I hope someone corrects me if I am wrong.

I believe Argentina had a SM bounce before it's deval., it seems to me that money parked in quality shares might not be a bad idea. If a company's share price is $10 a currency's halving must make the share worth $20, yes?

I wonder if a house falls into the quasi-similiar situation. If we expect monstrous inflation (a la currency deval) if I can service the debt, ie hold onto a job, then servicing a smaller debt is to my benefit. Conversely, the mortgage holder, say the banks with the astronomical amounts of re-fi's in the last couple years, must be in a horrid situation. What's the saying, "inflation kills the saver (the loaner) and relieves the spendor (the loanee)"
Horrible attempt at reproducing the quote I apologize.

With this concept in mind I have racked up all credit cards and lines of credit to the max. Not the way I want to play it, not the way it should be played, I definitely do not recommend this avenue for anyone. I have accumulated gold, guns, silver, "chocolate bars" and shares of oil & gas, food & beverage and high dividend companies. I hold zero cash for it is depreciating, and as mentioned, I am using 'other peoples cash' for this.

The linear relationship of gold and the dollar index, discussed at length this past week, should break to a new slope and I have a feeling it's going to be a sight to behold.

Anything with a 'derived', conceived value will be surplanted by items of real, tangible value.

CoBra(too)Erratum#10245205/06/03; 17:44:26

Creditor - exchange for Debtor ... of course - cb2

Otherwise - don't bother...

Socrates964silvercollector#10245305/06/03; 18:14:39

Re: Argie - you're right about stocks being seen as a safe haven, but the thinking was more that it wasn't safe to leave money on deposit in the banks, since the government could freeze accounts from one day to the next.
ArcticfoxTo bad Jim wasn't asked to meet with Bush instead of L. Kudlow.....#10245405/06/03; 18:25:39

Though Lawrence is starting to speak more favorably of Au...


The economy is in trouble and there is a great debate going on in Washington on how to fix it. The major philosophical debate is how government can fix an ailing economy. Lost in this argument is the fact that the current mess was caused by government. And now we are asking the very institution that gave us the bubble and altered spending and investment habits in this country to fix the mess it created. A central tenet in American economic thinking is intervention, redistribution and consumption. This doctrine was borne out of the Great Depression where the cause and the effects of the depression were misunderstood. The giant credit and money bubble, which led to the Great Depression, was misinterpreted. What started out as a market correction was turned into a great bear market and a depression.

a nation of oneTo silvercollector (05/06/03; 17:40:07MT - msg#: 102451)#10245505/06/03; 18:46:17

1. "If a company's share price is $10, a currency's halving must make the share worth $20, yes?"

Not if the stock is already selling at twice its value. Let's remember there are only two reasons to buy or own stock. 1) to receive dividends, 2) to benefit from an increase in the stock's price. Normally, the only real value a stock has is the company's ability to pay dividends. A rise in the stock price due to growth is just an implied increase in this ability. Since dividend value depends to an extent on the availability of other -and competitive- yield-paying instruments, such as bonds, notes, and bills, the interest rate plays a role in the attractiveness which stocks are seen to have. For some time, however, the value of stocks has been largely unrelated to companys' abilities to pay dividends, due to a distortion in the government's, and the FED's, handling of certain elements of the nation's economy, including those which are related to markets. News fabricators and their managers, plus share pushers, would knowingly have investors believe, falsely, that there need be no connection between a stock's value and its company's ability to pay dividends. Such a perception, on the part of the public, powerfully enables a wide range of deception related to share marketing. People who don't know any better than to wear their blinders faithfully and work hard all day and believe everything that everybody says, especially if the talker is wearing a suit and tie, equate honesty with a shaved face and a neat haircut, accept the idea that stock values are based on what brokers tell them, and that what happens to their own money is not really worth doing anything about, once it is all gone.

2) Your second expression, which assumes that it is sound to set yourself to repay loans with a currenty that is undergoing a devaluation depends for its validity on a number of variables; a: the term of the loan and the time it takes for the currency to devalue need to be proportional if benefit is intended to be obtained, b: the same is true of the amount of the loan and the amount of the devaluation, c: both need to be anticipated with some degree of accuracy, d: additional wherewithal should be in place to accommodate unforeseen contingencies.

3) "The linear relationship of gold and the dollar index, discussed at length this past week, should break to a new slope and I have a feeling it's going to be a sight to behold."

This is a special situation. One reason the POG has not been moving inversely proportional to the dollar in recent weeks is due to POG's rise to, and fall from, the vicinity of 390, a type of phenomemon which necessitates a degree of independence in POG's behavior. It goes too high, then it goes too low. Somewhere toward the direction of the middle is its real and enduring value, though this -as at present- may also currently be changing. Relative to fiat currencies POG is fluid, not solid. And the market itself is like a river whose depth and speed can only be known at one moment, in one place, and from which the remainder must be extrapolated. Its general direction, however, can be known with a good degree of certainty. POG is loose. It is not tied down. Not to the dollar. Not to anything. In a realm of fiat currency, its value can at times appear to be subect to seemingly irrational variation.

4) "Anything with a 'derived', conceived value will be surplanted by items of real, tangible value."

This is true, provided the necessary events take place. And if the necessary events do not take place, it is not true. One event that is necessary in order for tangible assests to surplant 'conceived' value is that the confidence of those having to deal in assets of 'derived' value must erode. With regard to the dollar, this has only now begun to occur in the minds of relatively more knowledgeable persons. The great majority of less knowledgeable people still are not aware of what is happening. Right now, therefore, the knowledgeable have a tremendous opportunity, which is something that the knowledgeable tend always to have, whereas, the ignorant are unaware of that which could save them, which is the situation the ignorant are usually in.

CometoseSilver Collector#10245605/06/03; 18:53:15

Value on companies is based on the Net Present Value of Future Net Earnings......was based on this ingredient...

For the past 6 years , it's been mostly hype .....
All numbers that are being reported based on what I hear from Martin Wiess are still Proforma .....If a company doesn't have any earnings ( ebay , Amazon) there's no way of knowing whether it's all blue sky.... The new law evidently isn't being enforced or You may know only if you read the quarterly report.......with all the footnotes.

You have to have specialist that knows how to read those to find the lies....Try Nick Guarino.

THe Stock Market is a leading indicator isn't it? So it tells you where the economy is going....months into the future.....

THe market knows but it isn't going to tell you if holding Stocks is a safe 30 times earnings we haven't come close to the bottom of a bear market cycle....bear market rallies yes ....NO NEW BULL....only bulls***
if the Market knows that the economy is going further into the Toilet inspite of ALL THE KINGS HORSES AND ALL THE KINGS MEN , the stock market will be priced accordingly..
and since the big boys know it's not going to go anywhere on the basis of new will go down and they probably will help it to the downside so it's an exagerrated fall...( Psychology of Crowds behavior)
So they can scoop up bargains nobody wants at the bottom...

False Hope is bad medicine but it's the only medicine Wall Street has to SELL.... Homestake Mining did really well in the Depression .....everything else went south.....

Foreign holders of our paper , bonds and stocks may use the cash flow valuation model to analyse the value of their holdings and if they don't like the return , they will dump, and if there's massive dumping and no buying ( supply and no demand ) the value of that paper will fall....until it reaches and equilibrium point at which supply and demand balance.....

If the foreigners decide to quit supporting the balance of trade showing up at our bond auctions ....
it will put upward pressure on TBOND yields forcing the bond prices to recede......There are a lot of dominoes standing in line around here.......Hedge funds and Derivitives players.....Banks and Insurance Companies.....
The Stock Market seems to have been marching lock step with the DOLLAR.....

Gold and SILVER are speaking to the fact that there is something going on out there and it isn't stable the financial markets.....

For the past 7 years people were enticed by the .25 interet rate in Japan to borro money (YEN) by the car load and invest it in our Stock Markets because of the spread .
Billions of dollare sought our shores for that reason and because of the Cheap money available in Japan because they were in a RECESSION DEPRESSION...THere's no future growth around or arbitrage opportunity with Stock market returns of 15-30% anymore......That game is over .....therefore the money is leaving to EUROPE ....Far EAST and thankfully GOLD AND SILVER>>... In a free market , that will cause asset prices to fall.....

They may wait for and appropriate fall to bounce the market back up ......all that's left is timing to Get George BUSH REelected......That bounce to be effective should come in the fall and bouy the market up for several months after...
It maybe they won't be able to do it anyway....

THE PPT may bave a more difficult time managing these markets than we might imagine. THere are plenty of saavy financial people out there that may be in the employ of US PPT's arch enemies......ENEMIES that the US makes because of poor diplomacy and an attitude of arrogance.....

Safety ....Safe haven........REAL MONEY .....the kind that doesn't evaporate in a hyperinflationary meltdown...
did someone say something about ARGENTINA why does ARgentina keep coming up ?????

WaveriderVIP: DAILY GOLD MARKET REPORT #10245705/06/03; 19:10:58

"...Meanwhile the U.S. dollar continues to weaken due to the enormous current account and budget deficits that show no sign of easing anytime soon, if ever. The dollar has long been considered grossly overvalued by many economists and the "strong dollar policy" only served to delay the day of reckoning. Though the U.S. government may pay lip service to the "strong dollar policy", it is now evident that this misguided effort has been abandoned. As a result gold will revert to more reasonable valuations after having been constrained since 1996 ahead of one of the wildest speculative stock investment manias in recent memory. Further dollar weakness will help propel gold much higher over time and a valuation well over $400 an ounce in coming months is certainly a reasonable assumption."

TownCrierA snapshot of Argentina six months after the currency devaluation#10245805/06/03; 19:11:53

In the wake of the devaluation the Buenos Aires MerVal stock index increased by forty percent, from 200 to 280. The price of gold had quadrupled from 280 to nearly 1200.

By the end of the first year, the MerVal had finally climbed by 150% to 500 while gold held on to its early 300% gains near the 1200 level.


silvercollectorTownie#10245905/06/03; 19:23:32

Thanks buddy.

Now I know where to put the vast majority!

Goldendome@ Miner 49er#10246005/06/03; 19:26:47

Miner: I appreciate your interest in my question involving the paradox between a falling dollar and falling interest rates. Thanks for pointing me toward The Trail. Also, think I'll study your post some more. Takes me awhile....Thanks for the help.
ToolieHenri Re:102415#10246105/06/03; 19:42:41

Greetings Henri,
I am unable to find a source that says a Gold dinar is currently being minted. In fact, prior to reading this article, I was under the impression that a *dinar's worth of gold* was to be used exclusively by national treasuries for the settlement of debt between agreeing nations. The fact that coins are to be minted is news (to me).

regarding this excerpt from the article: As for Royal Mint's plan to produce coins for Asean countries, he said that the company was in serious discussion with "a big Asean country" on the matter. "We are supposed to go there and talk but because of the Severe Acute Respiratory Syndrome (SARS), we have to postpone it for a while," he said ------ This article is from Malaysia, I took the above snip to mean China, possibly Indonesia. Do we witness the rebirth of gold money for the common folk? I think so!

I am still left wondering why denominate a dinar. Isn't one dinar a denomination?
Have an AUful good one kind sir.

Chris PowellEven Turk's documentation isn't enough for some#10246205/06/03; 19:45:00

An exchange with James Turk over his essay
"More Proof."

To subscribe to GATA's dispatches, send an e-mail to:

This email address is being protected from spambots. You need JavaScript enabled to view it.

silvercollectora nation of one, cometose#10246305/06/03; 19:59:33

There are a few stocks that I have ventured into, a foodstore chain whose shareprice has been miraculously flat during this market turmoil, a natural gas wholesaler/supplier whose dividend (4.3%) has been unaffected and a oil & gas trust whose unit price and dividend has been fairly consistant.

I hope these stocks might be consistant and reliable during any coming hystery (but who is really to know). All things being equal surely these stocks will double if the currency halves?

P.S.: a question to nation: Will the 'necessary events' take place.

a nation of oneReply to silvercollector (05/06/03; 19:59:33MT - msg#: 102463)#10246405/06/03; 21:02:09

I think the key to answering your question correctly is to realize that in America public confidence is a
function of managed perception. I wouldn't want to say that the matter of tangible assets versus 'derived'
valuations of fiat currency is entirely a sucker game controlled by confidence shysters managing things for
their own selfish purposes. But I believe it would be inaccurate to omit citing that aspect of its nature. And I
do perceive that it appears to be rather more so, than less so. It seems to make more sense when seen from
this view, I think. More things are explained from this perspective. We tend to want answers that satisfy us
completely, which display certainty in an absolute way. But this desire fails to recognize both the essential
nature of the universe we live in, and the nature of men. The best answer that I can give to your question is
that I think the necessary events will occur more or less, but I don't know how, or when, that it is also
probable that those in positions to wield their influence in curtailing its occurrence will probably do so, and
that to some extent they may succeed. Somewhere between the best case and the worst case is what I look
for. Ultimately of course, human evolution will require that such confidence be destroyed completely, if the
human race is to advance. But I do not expect that will occur this week. Or next. To me anything that fits
comfortably within these extremes seems most probable. And anything near an extreme seems
proportionally less probable. This may be because I don't know more than I do. To someone else it is perhaps

a nation of onesome more#10246505/06/03; 21:09:30

What I think is going to happen to the dollar though, is that those involved won't be able to hold it up.
a nation of oneit's in a word#10246605/06/03; 21:43:46

"reflate: to increase again the amount of money and credit in circulation." In other words, "to print some more money and lend more, not the first time but some subsequent time, after having already printed some more of it the first time, probably because it didn't work the first time." It probably won't work this time either. And it should be criminal besides. Here's 'reflation.' "reflation: restoration of economic activity, consumer prices, etc., to higher levels by manipulating monetary policy." Tell me again that economics is a field not accustomed to hiding behind words. These particular ones are not sophisticated. They are short and mean. If the economy doesn't do right, beat it with a stick. If it won't get up, beat it harder. If you kill it, put lipstick on it. Drag it to the theater and put your arm around it, and when it starts stinking blame it on the next president. If they would just leave things alone, things would be all right. But they don't know how to be happy unless they are making bubbles out of other people's fortunes, popping them, explaining why it's not their fault that everything is falling apart and markets are not forever going up, while dancing around their desks wailing loudly that a surplus is not right, that the rich should not be taxed, and trying to make everyone believe that not spending too much money is insane.
a nation of oneZzzzzz#10246705/06/03; 21:44:55

I guess everybody's gone to bed now, probably bored by what I've said. So I'll go now too.
Black BladeMarket Wrap Up – Puplava#10246805/06/03; 21:45:04


As the following charts below illustrate, it doesn't matter whether it is government debt, consumer debt, or corporate debt; debt has risen to levels never seen in the history of the world. Total outstanding U.S. debt now totals $34 trillion, or $119,442 per man, women, and child. According to Michael Hodges, of the Grandfather report, 61% of this debt or $21 trillion was created since 1990. Contrary to popular myths, the 1990's weren't a decade of savings and investment. In place of savings and investment, Americans cut back on savings and replaced it with debt and consumption.

The emphasis in government and monetary policy is to enable American consumers to borrow more and spend more money in order to grow the economy. The emphasis for the last half-century has been on expanding credit and debt, and increasing consumption. The result is that we as Americans save little, invest little and consume a lot. We are, in effect, consuming all of our seed corn.

Black Blade: Obviously the US dollar must devalue. Who in their right mind would invest in US government debt (since the government obviously has no intention whatsoever of paying it off) and pays a miserly yield for tremendous risk. After all "full faith and credit" only goes so far. Who in their right mind would in invest in US based stocks that have no "real" profits (not "pro forma", "operating", etc.), engage in dubious accounting standards, and pay no or little dividend to the owners. All else being equal, foreign investors are not likely to keep propping up the dollar when there are better opportunities elsewhere. Is it no wonder that central banks are dumping the dollar and some are actually buying gold? Who wants to be the only ones standing without a chair when the music stops?

Tate$$$$ Run for exit !!!#10246905/06/03; 22:02:41

Best solution for debt laden Uncle Sam is devalue dollar and pay debt with new devalued currency.
Biggest losers will be debt holders. Bad news - this is well known game in town. Watch for the door jam as foreigners try to run for exit.

mikal@Tate#10247005/06/03; 22:29:06

Re: "Watch for door jam as foreigners try to run for exits."
Actually, if the world would have it's currencies fairly reapportioned one to another, it would seem to be in their best interest, this ongoing revaluation.
Long-sought remediation per se, to compensate for overvalued dollars and malignant foreign exchange and reserve currency leverage. The exploits of banker/industrialist/financier connivance and coercion in toppling and appointing dictator puppets, using American issued dollars in most cases, subverting foreign and international laws, expropriating foreign resources, sweat, industries and public works. Alongside the IMF, the UN & it's World Bank and large foreign and domestic money-center and investment banks. And their proxy trusts, think tanks and universities fronting creditors while masquerading as legitimate, benevolent institutions.
And yes, you can no longer blame the Franc or Deutchemark when they no longer exist.

Black Bladetate and mikal#10247105/06/03; 22:46:03

All the Treasury has to do is print away like no tomorrow and pay off the debt. According to Fed Governor Bernanke it can be done at virtually "no cost". Hmmm...

- Black Blade

Black BladeHas Wall Street Caught Jihaditis?#10247205/06/03; 23:14:11,8599,221333,00.html

The Middle East is giving investors 70's flashabacks — and just the worrying could be trouble for the recovery


Poor economic recovery — it just can't seem to stay on Wall Street's mind. First it was Enronitis. Then it was a lack of pent-up consumer demand. And now, just when it seemed economists and investors had decided that the road back to boom times might well be steep and swift, the markets have caught jihaditis. Now everyone's having 70s flashbacks. Stocks sold off across the board Tuesday, with the Dow losing another 49 points, the S&P dropping 10 and the NASDAQ losing 58 (although techs are dealing with internal earnings issues more than geopolitical ones). Crude oil prices, meanwhile, hit six-month highs during Tuesday's session, and coal, natural gas and pipeline stocks followed suit to become the new hot tickets of the week.

Too bad energy is the one sector that no one else wants to see go up right now. Higher fuel prices are bad for the exact businesses that are still recovering from Sept. 11 — namely airlines, transportation, tourism and travel, not to mention the slowdown's long-time whipping boy, manufacturing. And if economists have said it once, they've said it a million times — all that adds up to a virtual tax hike on consumers, upon whose open wallets this nascent recovery depends. And then there's the Fed, for who a virtual tax on consumers and businesses means only one thing — higher prices, without higher profits or faster growth. High energy costs will force Alan Greenspan to step in with interest-rate hikes much sooner than he would like in order to control prices and avoid that 70s bogeyman, stagflation. The very thing that is helping the Middle East push those energy prices up — the nascent U.S. and global economic recovery — could be those price hikes' first victim.

Black Blade: The energy picture becomes more complicated with a weakening US dollar as oil like gold is priced in dollars. Then there is the deteriorating NatGas energy picture with record low storage levels (not to mention several nuke power plant outages) and a certainty that another "energy crisis" is brewing. "Economic recovery" looks less likely than ever.

otish mountainTake a look at the 1 year chart at ino on the US dollar index#10247305/06/03; 23:38:47

May thru July/02 3 months downward loss of approx. .06
Aug thru Oct/02 3 months Sidewinding
Nov thru Jan/03 3 months Downward Loss of approx .08
Feb thru April/03 3 months Sidewinding

Could one assume the next 3 months May thru July Down .10 ?

Not really into TA but do see a pattern.

steady90 year charade#10247405/06/03; 23:58:22

for 90 years the federeal reserve has been trying to prove that fiat is better than gold. but gold trumps fiat every time always has always will! gold the judge ,arbitrator and executioner of fiat currency regims.
SundeckGreenspan - The World He Lives In#1024755/7/03; 02:30:09

An essay by Bill Bonner from over at Puplavaville...


But an odd thing: even as the dollar lost value...and the trade deficit hit 5% of GDP...and federal deficits soared...long T bonds, recently, went up. Why would people lend money for 30 years, at paltry rates of interest, to a government openly declaring that it intends to inflate?

We don't know. Perhaps people need the income, as small as it is. But, whatever the reason, the bond market is unconcerned about inflation. Not only did long T bonds go up, the differential between regular treasury bonds and those whose return is adjusted for inflation narrowed. (We would give you the figures, but we don't have them at hand; you will have to take our word for it.) [Editor's note: Bill is lost in the wilds of his château in Ouzilly, taking advantage of the long May-Day weekend in France.]

The bond market seems to anticipate not a rerun of the inflationary '70s...but something else; perhaps America will follow in Japan's footsteps after all. For the last 8 years or so, the U.S. economy and its stock market have done a fair imitation of the Japanese trendsetter...with a 10-year time lag. When the Japanese economy boomed, so did the U.S. economy - 10 years later. Then, Japan entered its bubble phase, followed by the U.S., 10 years later. Then came the bear market in Japan, again trailed a decade later by a bear market in America.

At first, no one paid any attention to the Japanese situation. It was just a blip, said economists; Japan will come back fast.

That was 14 years ago. And last week, the Nikkei Dow sank to new lows - down 80% from a high set back in the final year of the Reagan Administration. After Reagan, Bush the Elder took over in America, up-chucked on Japan's Prime Minister...and it has been downhill for the Japanese ever since.

But the Japanese did not go gently into that good night. They fought the dying light just as the Greenspan Fed would do - 10 years later. Rates were cut...and cut...and cut some more, until they reached zero. Nor did the Japanese shirk from government spending...public works projects of all manner and description were begun. Never before has so much concrete been mixed and poured in such a small place.

But it didn't work. The money supply fell anyway...and Japan became the first major nation to experience outright consumer price deflation since the Great Depression. Twenty years of stock market gains have been wiped out. Unemployment edges up as the economy experiences multiple recessions. Consumers seem unwilling to spend - guessing that they will get more for their money next week than they would this one.

How could it be, we ask ourselves? How could a central bank be unable to do what central banks do best?



A sobering reminder that "rescuing" economies by printing money and loaning it, or having the government spend it, is simplistic. It has not worked in Japan. How is Bernanke/Greenspan's proposal any different?

I do not believe that many people (if any) truly understand how economies work. In particular, I do not believe that Greenspan and his colleagues at the FED have any great enlightenment. If they knew how things worked and truly had influence over affairs, then we would not be in this mess in the first place.

TopazSpeech "B" might have been "too" gloomy.#1024765/7/03; 03:20:15

Here's a look at FedFunds since 1970. The "irrational exuberance" upmove and subsequent fall off the cliff are evident... and I'm sure tech observers will agree (trendwise) Zero is L O N G overdue.
Following a fairly benign 3 Yr Bond offering the FOMC reignited interest in T's stating things weren't very rosy economically...had the 3's been better received, who knows how the picture may have been painted.

This statement might well be the "event" trigger I've been harping on about for several Mth's now, Yield Futures neg, Dow F's neg, $ a tad higher....let's see how the 5's are received today...and 10's tomorrow. If they (FOMC) have overdone it, Long Yields will blow through 4.7% into the RED ZONE.

TopazSundeck.#1024775/7/03; 03:25:24

Yes indeedy Sir, the omnipotence of the Fed...or ANY CB is greatly exaggerated imo.
Black BladeIslamic Chamber of Commerce to hold gold dinar convention on July 1#1024785/7/03; 03:28:13


KUALA LUMPUR May 6 - The Malaysian Islamic Chamber of Commerce, Kuala Lumpur branch, will hold a one-day convention on the use of the gold dinar as an alternative medium of exchange for international trade at the Putra World Trade Centre here on July 1, said its chairman, Tan Sri Elyas Omar.

Black Blade: The plan is to implement the gold dinar in October.

TopazFYI,,,3 Yr Treasury Auction results.#1024795/7/03; 04:32:05

SundeckW Australia Govt Backs Listing Of Gold Warrant On ASX#1024805/7/03; 05:39:05


Sydney, May 7 (Dow Jones) - The Western Australian state government backs the listing of a gold call warrant on the Australian Stock Exchange May 16.

The government-owned Gold Corp., which operates the Perth Mint, Wednesday issued details of the product called Perth Mint Gold Quoted Product, or PMG.

Each PMG, structured as a call warrant, will be fully backed by one- hundredth of a troy ounce of fine gold owned by Gold Corp., the company said in a statement.

Investors will be able to buy gold through their stockbrokers, and every 100 PMGs will entitle them to a troy ounce of fine gold on exercise.

Sundeck: More paper gold? At least it is in quantities that Jack and Jill Ordinary can acquire...

SundeckShanghai Gold Exchange seeks to open gold trading for individual investors #1024815/7/03; 05:43:29


Shanghai. (Interfax-China) - The Shanghai Gold Exchange (SGE) has submitted an application to the People's Bank of China, China's central bank, requesting that individual investors be allowed to participate in gold trading on the exchange, an official with the SGE told Interfax.

At present, only legal person entities, including companies engaged in gold production, processing and trading, together with China's four state-owned commercial banks have been granted access to the SGE's trading facilities.

The official declined to speculate on when the application would be approved, saying that the central bank had the final say on such matters.

Compared to purchases and sales conducted by gold retail outlets, which are subjected to various surcharges and arbitrary prices set by the central bank, exchange trading would offer individual investors a better and more liquid opportunity to profit from gold price rises and falls, he noted.



Freeing up gold trading - positive for gold?

BelgianThe " dollar-currency " (DC) and The " dollar-debt " (DD)#1024825/7/03; 06:23:54

DC AND DD are the two * most important * elements in the evolving global economy AND finances !
It is this global dollar-currency and debt that are increasingly under pressure...ENORMOUS, rising pressures !

What is pressuring DC and DD...or better, what can (is) threathening DC/DD in such a general way that it is clearly percepted as "fatal" :

1/ Interest rates (IR)
3/ Dollar exchange rates

It must be very clear by now that the dollarized world is frantically working on total *** STABILIZATION *** of DC/DD by stabilizing (intervening) on 1/-2/-3/ massively.

1/ IRs on a 45 years Low !
2/ POO and POG "contained" !
3/ $/€ exc. rate is present challenge on duty !

This is an escalating fight between 1/ all the CBs and 2/ those who want to put their money-digits (?) at work.
This is the one and only explanation for the gigantic "derivative"-mania ! To derivatize out of deep fear and mistrust in the whole dollar-system.

We are increasingly creating an "illusion" of stability of the dollar-(reserve)currency-debt SYSTEM !
The gigantic stabilization work that is being done, results in a verry, very *selective* price-inflation ! Very confusing because of the blatant UN-logic of it. The dollar-system is being "managed" on a gigantic scale. The "openly" B.Bernanke logic.

Today, it is the declining $, that makes the third alarmbell, sound a bit too high. Is de-stabilizing for the "system". All hens on deck for concerted intervention as to bring this alarmbell-noise into the background.
Lower the IRs (FED and ECB)...contain POO and POG...slow down the $/€ exch.rate...get them back into the SMs and make those digits "WORK" , again at full steam !

The "stabilization" efforts are only supporting the "financial" part of the economy and NOT the global economy itself...a *net* contracting economy !
Big difference !

The dollar-system risks a fatal blow, if and when the global economy should remain lacklustre (economy NOT financial markets). Zero IRs + rising SMs + convenient $ exch.levels + cheap oil + frozen gold...ARE NOT HAVING POSITIVE EFFECTS ON THE GLOBAL ECONOMY !
This global dollar-system economy must be declared "death" when 5 dollars of debt are needed to add 1 dollar to the existing GDP (K.R.)!

The created confetti is "absorbed" for anything but economical expansion...needed "growth". Destroying Iraq and rebuilding it WITH DEBT is NOT genuine economical expansion/growth. It simply is the continuation of dollar-debt logic within the dollar-system with the dollar-confetti. Again, more "stabilization" is needed to support the dollar-system (currency + debt). More massive amounts of dollar-currency/digits will be needed to keep a *virtual* global economy going. Only possible for as long as a majority is found to agree with continious "stabilization" as a support for helicopter confetti. A forward flight without a possibility left for any kind of partial retreat ! Suicidal !!! Yes, the real "globilization".

Is the euro *showing* that it is a unit that wants to match modern needs for fiat by marking the value of all debts as they change (grow)...? Is it the euro that wants to allow a Free Market in Gold Wealth to exist OUTSIDE THE MONEY CONCEPT !!!-???
Crude Oil reserves are irreplaceable with a dollar-currency/digit that is caught in a coercive flight forwards ! Oil Owners must have been realizing this long ago. Are we confiscating their oil as to maintain the dollar-system ?

Are we "stabilizing" all financials in concert up until we control oil-reserves ! We don't want to exit the dollar-system and dollar-use, despite the existence of the euro-alternative. Can we do it ? FOA's political winds are blowing !

The $/€ exchange rate changes so far, have the appearence of an orderly dollar-exit as to do something about the twin deficits of the US, dollar fabricator. W'll see if this works.

The dollar-reserve is almost totally and INVISIBLY destroyed as a unit for * saving * ! Than what is the purpose of the world's "dollar-reserves" in CB vaults or private pockets ??? What are your virtual dollar-reserves/savings worth when a global economy is contracting and risks to collapse without further debasing of "that" dollar unit !?

A *through-start* of the global economy is only possible within a general hyper-inflationary context. In simpliest of words : much more dollar-confetti and MAKE IT WORK for God's sake !!! It is this credo that is destroying the illusionary dollar-wealth that each of us is saving. Or in FOA-terms : your wealth is not what your confetti says, it is ! I wanted to relate that statement to what is happening today with the economy and finances.
We have been using this non-wealth dollar fiat, within the dollar-system, for so long, without having it destroyed by runaway hyper-price-inflation !

One can ask oneself if this is taking place, because *another* (euro)system is in progress, or...shall we continue with the use of this dollar-system until we cannot "stabilize" it anymore ?

Today's "ARBITRARY" goldprice must be maintained (contained) by those who know very well what "must" come.
All hens on deck to invent more leveraged bets (securitization) on gold's price as the evolution of Gold from official money to a WEALTH HOLDING bleeds away any credible currency pricing of gold's value in the "short" run !!!
*Money* in it's purest form is a mental association of values in trade...a concept IN MEMORY...NOT A REAL ITEM !!!
Understand money and you understand Gold !

The exhorbitant growing confetti-creation, policies...NEED TO BECOME DETERMINED BY WEALTH *OUTSIDE* THIS OFFICIAL MONEY REALM ! will be realised how idiotic the paper-chase really is...the mantra of "making your money work" will soon be realised as futile and...considered as more and more of the same worthlesness.
This is NOT a worry for those who are only trying to service their debts and stay afloat...but NOT for those who want to *save* what they managed to create.
Debt-Holders versus Wealth-Holders ! An incompatability...sooner or later.

renGold,Euro.Oil,Dollar,Realestate#10248305/07/03; 10:01:56

Am i out of line to say,Gold will go to $500+,Euro will soar,Oil down to $10,U.S Dollar will crumble,Realestate will loose 75%.Do you people think this is the case in the years to come.Any comments?
GoldnSilver2002So who is the gold cartel anyway?#10248405/07/03; 10:05:57

Last time gold went to 390 the gold shares effectively did nothing,as if they knew gold wasnt going anywhere.We are eternally promised a gold explosion is at hand.This time as gold crept of the floor(319) and jumped up to 344,the gold shares once again did nothing.Frankly,im glad to see the gold stock analysts being ignored.This game has become tired and lame and the shares reflect that.What makes the gold market any different than the dow or nasdaq?The answer:nothing,it is the exact same routine played by a different set of players.Pump and dump,pump and dump.The problem is,it isnt working anymore.People took the last of what they had and got fleeced.Inflation is 4 percent you say?Wow,maybe i should lose 20 to 30 percent in gold shares instead.From silverado to royal gold,i dont see any difference in the gold market.Dont worry a gold explosion is imminent,all you have to do is lose 20 to 30 percent and hopefully,maybe probably you can make it back.My advice stay the hell out the gold shares and stick to physical.Ignore all gold analysts,and dont invest one dime in their literature.They never have anything to say anyway.They criticize wall st and then do the exact same thing.The best plan is to refuse to invest in the gold share market,let the mines die their death and then we can know that gold will run out.Oh we are early into the second phase?Wake up mr gold analyst,no one is buying anymore.Here is one guy who wont be at the next gold conference.See those empty seats?Those are the people you fleeced.Oh but a gold price explosion is imminent?Yada yada yada.Stick to physical.I beleive their is a gold cartel alright,the question is,who is the gold cartel?We are in the early phase of the second wave alright.In the second phase the gold shares fail to make thier old highs and the gold analysts wake up and realize,wow,things really are different this time.Our pump and dump,doesnt work anymore.Of course the 3rd phase is where all the gold analysts dump their shares at a loss.The amrket is fixed alright,but by whom?
TownCrierFed adds $6.25 billion to banking system today#10248505/07/03; 10:14:10

Although the official FOMC directive to the NY trading desk calls for targeting a fed funds rate at 1.25 percent, the desk today nevertheless saw fit to enter the open market and add new money to bank reserves at a lower rate -- entertaining bids for overnight repos on Treasury collateral from 1.11 to 1.21 percent and accepting $2.25 billion in operations at 1.21 percent.

The Fed also added $4 billion to the reserves of the banking system with eight-day repurchase agreements collateralized by mortgage-backed securities at 1.26 percent.

'...there is no "meaningful limit" to this power to add...'


contrarianthank you goldnsilver2002#10248605/07/03; 10:31:21

Yes, all you hear is gold stocks are going up, up, up, etc.

I'm sure if you know how to read the tea leaves, you can ferret out the wheat from the chaff, but I wouldn't presume to be in that position.

Indeed, gold stocks seem to be an area prone to chicanery. It's like playing dice. And then if you do find something good, it's swallowed up by a trashy hedged "major".

I suggest: if you invest in gold stocks, do it with limited exposure, and do it for "fun".

Perhaps better to keep your feet grounded on the physical.

Knallgold#102484,GoldnSilver2002#10248705/07/03; 10:52:36

Good post-in short,the paper Goldmarket isn't working anymore,is failing to function properly!Its already here!(" will fail,up or down,but it will fail!"--FOA)
a nation of oneTo ren (05/07/03; 10:01:56MT - msg#: 102483)#10248805/07/03; 10:53:37

I think your estimations are possible.
TrurlRen - some comments#10248905/07/03; 11:24:05

Ren --

Certainly I don't know the future. But, the smartest human who ever lived suggested diverifying into six or seven different things.

A problem occurs when contemplating the "value" of the US dollar, and then valuing other items in terms of that perhaps volatile reference.

If Oil alone goes to $10, that could delay major structural problem for a LONG time.

It isn't too clear why the Euro will soar, except as the dollar sinks. What comparative advantage do they possess?
Flexible labor? a young well trained population? A free market? More government? Untapped natural resources?

I remember being in Guadalajara some time ago, and guys were handing out flyers for 260.000.000 starter single family houses. The exchange rate was 2500-3000 pesos/US$.
Recall that in the early 1900s one Peso was worth more than one US dollar. People adapt to change amazingly well.

Past performance is no predictor of future results...

I must laugh at the notion of gold at $500 or $1000 as meaning anything.

I will observe that historically a man's daily wage was about an ounce of silver. So for about US1.500 you can store a years labor.

Another seemingly unrelated comment: compute what your retirement savings will be worth at 65, assuming you save
8-10% a year and earn the 2-3% over inflation actual return.

Then compute what your final salary will be assuming the same inflation rate, say 4%. You will be suprised to see that your final annual salary will be very similar to your accumulated savings.

Given this insight I have little trouble in recommending gold for long term savings, some silver for trading, and several other long term investments. But NOT diamonds.

TevyeRen prediction comments#10249005/07/03; 12:28:02

Any prediction without a timeframe is worthless.
I predict gold will rise in price.
I predict gold will fall in price.
I am 100% correct on both predictions.
There also needs to be defensible logic to the prediction, or its just 'noise'. When folk cite "the trend", they make a prediction for the (near) timeframe based on (recent) past. That's much more usefull than X will be at $$$ without qualifiers.

A question I've considered sending to MK for his report is "how far off in time can one's prediction be and still be considered 'right'?" "e.g. is FOA 'right' after 5 years? 10 years? XX years?" Being early (or late) is the same as being wrong at some point.

Also beware oversimplifications. The real estate market is a very diverse thing. Against some inflation adjusted reference, we might expect: 1) commercial RE values to track (paid) occupancy rates of the local area; 2) Calif. RE to decline, 3) pricey suburban RE to decline; 4) rural small town RE to remain unchanged (it never boomed); 5) good farmland to remain unchanged or perhaps increase slightly (as a poor milkman might hope) 6), 7) 8) etc

$500 gold in 2004 - hope so.
$500 gold in 2012 - hope not.
$10 oil - won't happen. 10 euro oil maybe.
Crumbling dollar? yes. look for price inflation over time. The PTB will make as imperceptible as possible. At minimum I expect double prices of most things (including some RE) in 10years (7% annual rate average)

Gold. Its Tradition.


Alaskan hunterTrurl msg#: 102489#10249105/07/03; 12:49:34

Trurl, You wrote.

"Certainly I don't know the future. But, the smartest human who ever lived suggested diverifying into six or seven different things."

Huh? The smartest human? I didn't know that there had been a competition. No one even sent me a plaque.

Guess I'll just wait and see if it comes.

Happy trails, -Ron

Belgian@ GoldnSilver2002 (Gold cabal)#10249205/07/03; 13:15:52

Maybe, a better question would be : For how long has Gold already been managed ? Go back 70 years...US confiscation (40 yrs) of Gold...Fixed POG in gold-standard...In the sixties, the London Gold Pool and De Gaulle...1971, Nixons Gold window...And finaly, 30 yrs of central banks, treasuries, bullion banks-goldminers-private goldholders... paper gold management.

In other words...Gold hasn't been Absolutely FREE for quite some time ! Communism also managed to survive 70 years.
So many different parties were involved under the umbrella of the leading central bankers. The paper-confetti producers and their major friends in the financial brotherhood have only one mantra : * Gold shall NOT compete with any paper * !!!

But in the late nineties, in the run up of the euro, Gold was managed/manipulated with much more vigour. The dollar-reserve and a lot of other paper, needed to be defended / safeguarded. A faction of the previous goldmanagers turned into a cabal (?) that wanted POG seriously down. And it is exactly here that FOA stands alone with his theory that this was done to sabotage the birth of the euro with an overwhelming strength of the dollar. We will probably never know why POG had to be knocked down from the 400$ to 253$ low. Was it a pure market phenomenon or was it an organized raid on Gold ? What was and is the ECB's exact role within the total Gold management ? We will find out, one day.

But, what is more important today, is finding out who the major pro-Gold factions are and why they are pro Gold !
If one believes that a new pro-Gold faction has emerged...than we have a major shift/break in the Gold's history of concerted management !
And here we have that immense paradox : How can an ECB be considered as a pro-Gold faction, when the Euroland central banks are Gold sellers !? And here we have to follow FOA's Gold Trail and his insights on the role of the euro-concept versus the dollar.

I'll end this with the rhetorical question, again : If the euro-concept has nothing to do with Gold's future (FOA)...what else is going to set Gold Free from 7 decades of containment ? Who stopped POG's dive at 253$ ?
And who is going to stop Bernanke from printing against Gold in favor of the paper chasers and avoid all defaults ?

Gold (POG) has been "shorted" for the past 21 years ! This can go on for as long as Gold is mined and DOLLAR_RESERVE confetti is increasingly printed. Isn't it this what is happening ? The pro Gold faction are those who see this happening and simply wait until time is ripe to stop this systemic mismanagement. The dollar-reserve will most probably, never (?) admit that it is on the way out and will therefore never stop to short Gold. It takes a challenger (euro) to call a halt to this . That's what the pro-Gold factions within different central banks are telling each other. Protect yourself from an outgoing dollar with enough Gold exchange reserves.

Cabals will never die ! Sometimes they are forced to give up their profitable plays...especially when it suits other parties that are gaining strength/influence/self-confidence/more support...etc !

POG going to 500$/600$ is the worst case scenario where Gold's mini cycles are permitted (short covering) within the constant shorting, for reasons of the pro-Gold factions not yet being ready to stop the dollar-system and replace it with a Free Gold market .

POG can be temporary and partially "unfrozen" (price-spikelets) when and if there should emerge some renewed confidence in paper and dollar-reserve currency. I don't see this happening today and am afraid it will NOT happen, soon ! Is the euro in the process of exposing dollar's intrinsic weakness ? What if bonds crash with rising interest rates ? What if stockmarkets crash to a valuation level of P/E=8 in an contracting economy where the remaining profits remain squeezed or non existant ? What if a financial panic make the Bernanke's presses, print 24/7 ?

Anddddddd, the US$-Reserve finally collapses ?

All other scenarios are postponements of the inevitable final reckoning. Stabilize...intervene till he dies (the dollar) dies (the dollar-debt-system) !
Simply, because DEBT is expanding faster and faster than genuine Growth. You can't organize dot.bomb after dot.bomb after dot.bomb. Everything has been bombed already ! Cover the runes with layers of printed confetti.

Belgian@ ren#10249305/07/03; 14:00:13

Your (and many, many others) assumption of a POG = 600$ is something I don't understand. If I would share the idea of POG going to 600$ and turn south...I wouldn't accumulate any of my confetti into Gold as a wealth saving or even as an investment, speculation, gambling.

Review the 20 years of stockmarket/bond adventure. The Dow was more than a tenbagger. A trainload of stocks went up 60% to 100% (yep even 300%) from their recent lows. With the projection of a 600$/Oz (doubling) of Gold...I would simply remain on the sidelines with the bulk of the confetti and play-gamble the rallies, up and down, with derivative stuff.

A projected doubling of POG is peanuts and not worth going for, when one considers the remaining volatility and gambling opportunities, still being available in the paper circus.

I do believe that something "IS" changing, fundamentally and dramatically. IMVHO it will become impossible to make ones confetti "work" in the coming decade, in the same way, as has been done in the past 2 decades ! Making paper "work" will be different. Time for safely "SAVING" what has been acquired. Gold Wealth is accumulated to comfortably live through the coming transition.

Projecting a POG of 600$/Oz is nothing more than accepting that the old Gold-management will remain in place and that the dollar-system wil survive and prosper again after a period of transitional weakness. This fundamental difference about Gold's future is the difference between goldbugs and goldadvocates. I evolved from a 20 year bug to an advocate. Right or wrong will be proven by the future itself. Is it because I'm aging and want to put my humble savings into the Real Wealth reserve...or am I scared to death from the past era of gambling and the derivative monster ?

My first coin will be sold when POG reaches around 6,000 € instead of the generally projected 600$... or the entire Wealth Reserve will remain in the family's saving pot.
That's how I think about Gold NOW ! As a two decades old goldbug (goldmines) this same *Gold Wealth thought* never occured to me during that period ! NIA !!!!

Waverider*VIP* DAILY GOLD MARKET REPORT #10249405/07/03; 14:47:44

"Though U.S. officials pay lip service to the "strong dollar policy", the central bankers (the Federal Reserve) appear poised to scuttle the policy by creating an inflationary environment in the desperate hope of creating economic growth. In effect the "strong dollar policy" comments are nothing but hot air designed to maintain confidence in what is clearly a weakening U.S. currency. If the Fed does spur on inflation and "official" interest rates remain low, then "real" rates will sink further into negative territory creating an exceptionally bullish scenario for precious metals where downside risk is limited and the upside potential is wide open. That said, precious metals will continue to rise once global market participants realize that there no longer a possibility of a stronger dollar anytime soon."

Waverider: Excellent commentary once again, thanks Black Blade!

Black BladeNo end in sight for dollar's pain #10249505/07/03; 15:05:21


NEW YORK (CNN/Money) - When the Federal Reserve hinted this week that another interest-rate cut might be coming, U.S. stock prices rallied. But the already-shrinking dollar fell even more -- just another episode in the lonely plunge of the greenback, which many analysts say is only going to get worse. To be sure, the dollar, like Icarus, has flown very high in recent years and was destined to fall to earth. The currency gained about 47 percent during an amazing seven-year run, fueled by the late-1990s boom and then a flight to the relative safety of U.S. assets in the months after Sept. 11, 2001.

Since peaking in early 2002, however, the dollar has lost about 20 percent of its value, according to the Dollar Index, a measure of the greenback's performance against other currencies -- and could still have further to fall. "The structural dollar descent is roughly half-way complete, [and] over the coming 18 months, the Dollar Index...may need to fall by another 10 to 15 percent," Morgan Stanley economists Stephen Jen and Fatih Yilmaz said in a recent note.

This is ominous news, in the sense that foreign money is the drug the American economy desperately needs to function normally. The U.S. current account -- a measure of the money flowing into and out of the country that includes the trade of goods and services -- ran a whopping deficit in 2002 of $503 billion, or about 5.3 percent of gross domestic product (GDP). That percentage is expected to climb even higher in 2004. Throw in the surging deficit in the federal budget, which is likely to approach $400 billion, or more than 4 percent of GDP, this year, and you have the recipe for a "twin deficit" scenario worse than the one that preceded trouble for the dollar and U.S. stocks in the late 1980s.

Black Blade: The Bush administration's support of a "strong dollar policy" notwithstanding, the currency cannot hold up under this kind of pressure. It will only get worse as the economy worsens and the government piles on more debt (already at all time record levels).

Great Albino BatSatisfactory performance for gold, after all...#10249605/07/03; 17:53:34

I see where Ted Turner bit the bullet and finally cashed out, half-way, from AOL, after losing a potential over $100 a share through a fall in the market value of his investment. More or less $6 billion in dream-money vanished for him, on the shares he sold, and he still holds another similar bunch of crummy shares. He got his haircut; he, Ted the Terrible, Ted the Mighty. How are the mighty fallen!

Galbraith the Tall says in his excellent little book, "A Short History of Financial Manias", that people with money are considered by others to be extraordinarily intelligent; and also, people with money come to think of themselves as extraordinarily intelligent. This makes them vulnerable to great mistakes. And in Ted Turner, we have a prime example of the perils of succumbing to manias. The smart guys run great risks, due to the psychological trap that is built on "money equals intelligence".

On the other hand, gold from early May 2002 to early May 2003, on the INO charts, shows that the 50 day moving averages were about $310 early May 2002, and $327 early May 2003.

That's up 8.7%, and the best is yet to be. Not bad, not bad at all. The GAB is very patient.

But will Ted Turner think about gold?

Not likely. It doesn't go with his personality and life-experience. Americas Cup winners don't buy gold.

Guano from the GAB.

AristotleTRUTH!#10249705/07/03; 18:17:02

"*Money* in it's purest form is a mental association of values in trade...a concept IN MEMORY...NOT A REAL ITEM!!! Understand money and you understand Gold!" --- Belgian

Amen. And further:

"The exhorbitant growing confetti-creation, policies... NEED TO BECOME DETERMINED BY WEALTH *OUTSIDE* THIS OFFICIAL MONEY REALM!" --- Belgian

Amen. Hence the primary universal function of global physical Gold comes into view -- an asset for savings that lets its owner know the true size and shape of his wealth.

True Wealth. Get you some. --- Ari

Mr GreshamHuh? (and HOF nomination for miner49er)#10249805/07/03; 19:32:50

Has anyone here ever tried to describe to a close associate (wife? etc.) who you hang out with here? Just mention a name like "Great Albino Bat", what kind of stare would you get? End of any discussion.

No, me, I just keep quiet -- year after year after year. Well, I told my Dad I've got some friends from around the world, Belgium, Australia (did we lose our Kiwis?), Canada, Mexico, Austria, Japan, Brazil, etc, that I share economic news with. (I've already seen his reaction to the G-word.) "Better than reading the WSJ: they link us to everything!" But that's about it.

Thanks to all, for being colorful, creative, for being indescribably yourselves. Ten years ago, I did not imagine I would be privileged to be part of something like this (the 'Net, and those who wisely use it to its max); rarely do I take it for granted.

Now, off to re-read that miner49er post from yesterday -- I read it, bleary-eyed, head nodding, after midnight -- oh yeah, HOF anyone? (If no-one spots this nomination, and seconds, I'll re-nom it later, with all the official # references etc, OK?)

omegamanAristotle refering to Belgian#10249905/07/03; 19:48:15

I might add that money is also known as a time value judgment as per Mises. It's what you think your time is worth and how you as an individual would measure it, or value it. Each person decides as an individual what their time on this earth is worth. I will fade into the shadows once again.
steady i get it./maybe i dont. but better to try and fail than not try at all!#10250005/07/03; 20:31:09

aristotle i have been thinkg and tell me if im close or not. as these two post help solidify my thoughts
Aristotle (05/07/03; 18:17:02MT - msg#: 102497)
omegaman (05/07/03; 19:48:15MT - msg#: 102499)

what it boils down to is one is ones own capitol maker. you get your capitol from what you produce and that value varries with what value society puts on what you produce . once you start to exchange your capitol that you created by your own energy, then that capitol become fodder for the currency speculators, since its valued isnt fixed and it can go up or down. and its exact value is unknow untill the moment the transaction happens.but gold on the other hand is constant . its real. its value doesnt ever change all that is changing is the amount of fiat one gets for it.
isnt it unfair that some group of bankers can meet and make your life worthless by devaluing your capital? That simply is not fair, not honest, most importantly not cool . not cool at all.
do not think for a second that planned devaluations take place on countries to just on a larger scale making every life in there worthless and the country as well thats why we still have developing natins 20 years after teh term was coined. and when they did it to the east asains well they took note and said ok two can play at that game.
gold lasts fiat comes and goes. hence gold- the arbitrator, judge, and executionerr of fiat money!

so with this becoming widely more understood as the inteelctualism of banking/ gold / oil/ currencys/ are being distributed not in hallow hallways and in classes that are expensive and in a way allocated to the chosen elite, but rather over the internet in infromal discussions such as this.
peole will look to gold quantify there wealth ( an asset for savings that lets its owner know the true size and shape of his wealth. thanks ari.) rather than conceptualize the present/past/ futre value of the fiat currencys.
gold get u something that is real!

ari or whoever is this close? comments corections welcomed.

misetich Deflationary Perils of a Dysfunctional World - S. Roach#10250105/07/03; 20:37:12


A saving-short US economy has had to import surplus saving from abroad, mainly from Asia but also from Europe, in order to support economic growth. And the US has had to run a massive balance-of-payments deficit in order to attract that capital. As America's federal budget now goes deeper into deficit, the country's net national saving rate -- for consumers, businesses, and the government sector combined -- could easily plunge from a record low of 1.3% in late 2002 toward "zero." In that case, the US current-account deficit could approach 7% of GDP, requiring about $3 billion of foreign financing every business day. The world has never before faced an external financing burden of that magnitude.
The confluence of these two forces -- a US-centric world and a post-bubble US economy -- sets the stage for the world's deflationary perils.
Globalization is a third leg to the deflation stool
The big surprise is that a similar phenomenon is now playing out in "non-tradable" services. Deregulation of once sheltered services industries is now global in scope, transforming administered pricing into market-driven pricing for this vast segment of economic activity.
The case for global deflation is not just theoretical conjecture. A large portion of Asia is already in deflation, and inflation rates in the United States and Germany are currently running at around 1%, as measured by broad GDP deflators. America's so-called "core rate" of inflation is receding sharply.
A dysfunctional global economy is at a critical juncture. An intensification of deflationary risks is a real threat if an imbalanced world stays its present course.

The "spinsters" led by the Maestro had their ways from the mid 90's to early 2001 as cheap imports materializing from globalization such as Nafta (Mexico) China lowered price inflation as a whole notwithstanding the jump in the service industry -

The ill winds of deflation through cheap imports (exporting US jobs) has decimated the manufacturing industry as fewer and fewer NA corporations are able to compete with Asian economies

Asset deflation (bursting of the SM bubble) was the second peg of acceleration

The hedonics of productiviy boasted by the Maestro are being put to the test as India is slowly but surely hitting at the US technology sector (over 500,000 tech jobs are slated to disappear from US corporations and moved to India)

The strong US $ policy is slowly crumbling

Not a pretty picture and the worse is yet to come as stocks have priced in a rosy 2nd half recovery

All On Board The Gold Bull Express

Aristotleomegaman -- money is also known as a time value judgment#10250205/07/03; 20:44:46


The key point to recognize is that it's the multitude of goods prices that we're exposed to along with our various wage-level associations that we hold in our minds which gives money a functional *unit valueness* even though it's not a standard weight or measure of any single physical thing. Physicality be damned. As a *nominal* (mental value) measuring unit it serves perfectly as the lubricating *unit of account* in the ever-adjusting network of purchase orders, loan contracts and labor agreements which all form the backbone of our economy and monetary system.

To deny ourselves that pure nominal form for our monetary system is to deny that we are human with warts and all. Although Gold has no right place *IN* the monetary system, it is by natural selection the nearest neighbor living in the real *OUTSIDE* world that can act as a universal translator to judge and announce *without bias(!!)* the temporal values of the many monetary pricing units being wiggled and jiggled around *inside* the "gamey" system.

Only if and when *observed* by Gold like this can we begin to call it a *perfect* monetary System for our admittedly imperfect world. Don't worry, we'll get there from here on that vehicle -- even if only by default as every other sort of vehicle will break down during the journey.

Gold. Rolling rolling rolling along like a song. --- Ari

Dollar BillMA from prudent bear#10250305/07/03; 20:49:19

The US Treasury releases securities data with a long lag, with the February data released last week. The report indicates that there was net selling of $4.74bn of Treasuries by the foreign sector, the first net selling since April 2002. More revealing was the actual composition of the flows: Large net Treasury buying from Japan ($5.58bn) and China ($1.80bn) is consistent with our belief that the official sectors of both countries are still accumulating mountainous reserves which they have been using to prevent any natural rebalancing process from taking place in the US external account.

Conversely, there has been widespread selling from the Euro area (-$3.4bn), the UK (-$2.9bn) and Canada (-$1.9bn). Of even greater concern, however, was net selling of -$4.19bn from the "other Asia" region, generally dominated by Middle East countries.
Saudi Arabia keeps as much as a trillion dollars on deposit in US banks – an agreement worked out in the early eighties by the Reagan Administration, in an effort to get the Saudis to offset US government budget deficits. The Saudis hold another trillion dollars or so in the US stock markets. This gives them a remarkable degree of leverage in Washington" ("The Fall of the House of Saud", Atlantic Monthly, May 2003).

The HK and Chinese economies have been smashed by the sars epidemic: last month, Hong Kong's economy experienced its worst monthly contraction in at least 5 years, largely as a consequence of the outbreak of SARS. In China, service-sector industries such as tourism and restaurants have been brought close to collapse. The entire retail sector is suffering badly. The fragile banking industry is tottering, and the enormous level of foreign investment China has enjoyed over the past decade is under threat. Since their respective currencies are pegged to the dollar, the only means of alleviating the resulting deflationary shock may have been through the expedient of devaluation, which by virtue of the peg, could only eventuate in the event of dollar weakness.
Given China's primary role in helping to establish the external value of the US dollar (by virtue of its mountainous accumulation of dollar reserves in the past), the SARS crisis has depressed the rate of accumulation in official reserves, which were being habitually cycled into dollars. This put greater pressure on the Europeans and others to soak up the excess dollars sloshing around as a function of the burgeoning current account deficit, and they were unable/unwilling to do so until the dollar assumed a weaker position vis-à-vis the euro.

The process has contributed to a further problem in relation to US trade and the corresponding goal to alleviate the country's external imbalances: Quite apart for the fact that the dollar has been weaker against the wrong currencies, its strength against the euro has not translated into real pressure yet on core Europe. Whatever US officials might say about "punishing" the anti-war bloc of "Old Europe", net exports and current accounts in Germany, France and Belgium are still positive, and healthily so. The euro is working fine for core Europe. Anyone in the US administration who thinks that devaluation is an easy or straightforward option for "disciplining" America's recalcitrant allies might need to reconsider. The only real beneficiaries here, according to Goldman Sachs economist John Youngdahl, are the economies of emerging Asia, in that "a weaker dollar is the means by which the Asian NICs try to lay off some of their SARS-related deterioration onto the Europeans."

CytekManipulation of the markets#10250405/07/03; 20:56:21

What if powerful men began to manipulate the U.S. stock markets on a daily basis? What if these men justified doing so, for "national security reasons"? After all, wasn't one of the reasons for the 9-11 attack, to strike at our economy? What if these men chose the 8,000 - 8,500 range on the DOW as a "leveling off area? What if they chose not to let the Dow move more than 125 points + or - in a day of trading? They would know whats at stake if they didn't.........collapse of all 401-k's and retirement accounts, collapse of the U.S. economy, civil unrest. America would plunge into turmoil and chaos. They would lose all!!!
And if they did manipulate the stock markets on a daily basis, how would those markets appear to behave? Would they go up into that 8,000 - 8,500 range for no apparent reason? In fact why would they go up at all in an ocean of bad economic news day after day? Would the markets plunge at the opening bell on bad news, only to start its way up as the news got worse, and then to finish POSITIVE by the closing bell +125!!!??? And then repeat this scenario day after day?
What if, instead of printing money to fuel the economy, they created "electronic" money from thin air to pump up the markets?........................And now the greatest WHAT IF? What if the U.S. stock markets have already crashed? Crashed months ago, but were pumped up by "electronic" money? Like a dead patient kept alive on life support. Would anyone be able to understand that? Would they WANT TO UNDERSTAND THAT?
What scares me is not an economic crash. What scares me is what has been going on for the last 3 months! I sit in front of the "finance" channels and shake my head is disbelief! To watch a stock market go up on more and more bad news is simply incredible. To watch these "economists" try to explain this current bull trend is amazing. That people believe this stuff is breath taking! That they can vote is horrifying! This has to be the most GREEDY, SELFISH, SELF CENTERED, SCHIZOPHRENIC SOCIETY IN THE HISTORY OF MAN KIND!

Dollar BillJon Warner comment USAGOLD#10250505/07/03; 21:01:10

Now I may be missing something here (but I doubt it), with interest rates barely above zero and little room left to cut interest rates the only door left open to the Fed to counter the rising threat of deflation is to rapidly increase the money supply and spur on inflation. This would effectively put an end to the so-called "strong dollar policy" talk by creating a much weaker dollar. Many speculate that the Treasury Secretary's comments supporting the policy were designed to create foreign investor interest in this week's sale of $58 billion in government debt. Goldman Sachs chief economist Bill Dudley summed it up nicely today when he said, "They're just saying that inflation is too low now, rather than too high, and that means we want growth, and we want growth to be strong enough to push inflation up and we're not tightening monetary policy for quite a long time."
Aristotlesteady -- it's VERY good to know the true size and shape of your wealth#10250605/07/03; 21:10:04

I was deep in your vest pocket up until you offered this extreme:

"gold [...] is constant . [...] its value doesnt ever change all that is changing is the amount of fiat one gets for it."

Wellllllll,,,, I suppooooose we *could* accept Gold as the fixed-value center of the relative value universe. But what's wrong with accepting that its value in human affairs could in fact climb even higher than it is relative to other real things like butter and bread and eggs as we put it to this special modern (ancient!!) usage we're describing?

You went onward to ask and bemoan:

"isnt it unfair that some group of bankers can meet and make your life worthless by devaluing your capital? That simply is not fair, not honest, most importantly not cool."

Take heart! If we can finally rid ourselves of the paperGold games that are played in parallel with money games, they can then only make your life worthless if you let them. That is, if you hold your primary savings in the form of money instead of Gold.

It doesn't take much training to fall into the excellent rhythm of Gold savings as the harmony to accompany your monetary melody of earnings and spendings. Billions of little easterlings and southrons are in graceful step even as we westerners only begin to hearken to the distant hum.

Gold. Get you some. --- Aristotle

Black BladeMarket Wrap Up – Puplava#10250705/07/03; 22:28:24


Another tidbit that I just learned yesterday from the Austrian group is the personal income figures reported each month are also statistically massaged. For example, included in the monthly personal income numbers are a number of hypothetical numbers that you don't receive. One example is free checking accounts now offered by banks. Since you used to pay for them and they are now free, this saves you money. The money you no longer pay is computed as income each month in the personal income figures. It gets better.

They also impute a theoretical income value that you hypothetically get as a homeowner. The government calculates an imaginary income that you would receive because you own your home instead of rent one. They also compute the value of meals served and clothing provided to military personnel as income. Imagine the GDP growth we'll get from the latest war. But hold the fort... it is going to get better.

Government statisticians are now studying the value of chores you perform around your household such as cooking, gardening, housecleaning, babysitting your children or mowing your lawn. Imagine the economic growth we could get if people start mowing their lawn twice a week instead of just once.

Black Blade: A good one tonight on how government and Wall Street fudge the numbers. I have harped on this myself but Puplava covers it fairly well. I have always found "hedonic deflators" to be among the most absurd methods the government uses. For example: if the price of steak rises it is assumed that people will buy something cheaper like chicken instead – therefore no inflation impact from rising steak prices, and if the price of chicken rises it is assumed that people will buy spam instead if it is cheaper, and so on. What was it that Mark Twain said? "There are three kinds of liars – liars, damned liars, and statisticians". Government and Wall Street (and corporate accounts for that matter) take it to a whole new level. Well worth reading!

TopazBonds and Gold.#1025085/8/03; 01:36:02

As suspected we've seen a marked drop in Yields following the FOMC'S comments. Notice Gold has stalled in line with the slightly strengthening Dollar!
OK! Watch carefully over the next few Day''s setting up as a rush through the previous "bottom" @ 4.65%.
What we are about to experience is the equivalent of driving a Locomotive head-long into a dark tunnel, while hoping and praying the excavation, trackwork etc. have been/are completed.
Good Luck All!

Black BladeMarket missing gold signals - Lassonde #1025095/8/03; 02:37:43

By: Tim Wood
Posted: 2003/05/07 Wed 17:36 EDT | © Mineweb 1997-2003

NEW YORK -- Pierre Lassonde, president of Newmont [NEM], said investors had paid insufficient attention to two developments likely to positively impact the gold market.
Providing his customary colour commentary on the gold market during the company's first quarter conference call, Lassonde said Chinese gold market deregulation and tensions in the Cold War alliance were significant factors.

"We have a tailwind with a very strong commodity price. There are some events that have occurred in the last few months that have been largely ignored by the investing community, but are very significant longer term for the gold price."

"The first issue is the deregulation of the Chinese gold market. China has annual savings of $1 trillion and for the first time the Chinese population can access gold in any form. If you look at one tenth of one per cent of those savings going into gold, that represents 100 tonnes of gold per year. It has a very large potential impact on the gold price.

"The second aspect is gold as a currency. Gold has been one of the best performing currencies against the US dollar over the last fifteen months. When you look at the Central Banks holding US dollars and paying 1.5% interest, gold only has to go up $5 to beat that.

"I would just recall that in the 1960s, when the French became a little disenchanted with US policy, they decided to switch their reserve into gold. That forced the US to close the gold window and deregulate the gold market. That finally ended up with the gold price going from $35 an ounce in 1970 to $800 by 1980.

"If you look at the tensions between France, Germany and the US, it is well worth considering history and what could happen to gold in that mode.

"So we continue to be very bullish on the commodity."

Lassonde reaffirmed his confidence in Newmont's ability to reward shareholders, citing the reduction in debt and hedging, group exploration performance and operating cash flow that is primed for higher gold prices.

Black Blade: Sounds good. Though the US dollar is rebounding a little this morning, it is still in a downtrend. It is rumored that the Japanese have intervened again by buying dollars (stealth intervention?). Another point is that physical gold buying gains steam with any price weakness.

SpartacusEur/Usd#1025105/8/03; 04:26:39

If ECB keeps its interest rates unchanged, the US dollar might suffer a lot today. It´s gonna be an interesting day today, me thinks..
BelgianOhhhlala... Those Western Gold Gurus.....#1025115/8/03; 04:32:26

....Keep on, systematically, pointing to the Easterners, India and now China...who have to do the Gold Wealth buying/accumulation !

Advocating Gold Wealth in the West is political incorrect and controversial. The dollar-reserve must remain immaculate
and is not allowed to be put in question. Thy shall worship the dollar and hate Physical Gold in Possession.

So be it !

misetichReaility Check - US Unemployment - beyond statistics#1025125/8/03; 04:51:25


Kennedy is one of a growing number of the "long-term unemployed," defined as those who have been looking for work unsuccessfully for six months or more. Of the 8.8 million jobless workers in America, almost 2 million have been out of work for half a year or longer, the highest number in two decades, according to the Bureau of Labor Statistics.
The survey of 413 adults, conducted April 17-28 by Peter D. Hart Research Associates, found that 83 percent of unemployed workers said it is harder to find acceptable employment today than in the past, with 51 percent calling it "very hard" to find jobs similar to the positions they lost.
More than half said they had had to postpone medical or dental treatment, and about one-third said they had lost their health insurance. About 26 percent said other family members had been forced to go to work to make up the lost income. And a quarter of the respondents said they had moved to other housing or moved in with friends or family since becoming unemployed. "The poll provides a picture of the real story behind the unemployment numbers," Emsellem said. "It really shows the sacrifices being made, the impact on workers and on the economy."

It is difficult to invision how consumer spending the locomotion of US economy sooner rather than later will start to decelarate commencing ANOTHER round of cascading asset deflation

All On Board The Gold Bull Express

misetichThe forgotten media item - US CEILING DEBT - How can the US $ maintain its reserve currency status?#1025135/8/03; 05:19:07


"We are also as sure as we can be about anything which has yet to happen that long before the US reaches that projected "debt limit" of $US 12 TRILLION, the US Dollar will cease to exist as a viable world reserve currency."

As many people have now noticed, as it has every day since February 20, the Treasury is still reporting its debt "subject to limit" at $US 6.399975 TRILLION - that's $US 25 million below the debt ceiling of $US 6.4 TRILLION which was set in place on June 28, 2002. In February and March combined, the Treasury reported deficits of $US 155 Billion. It is a safe bet that the Treasury debt by now is WELL above the June 2002 $US 6.4 TRILLION ceiling. Yet no new "ceiling" has been reported and the Treasury has simply stopped reporting on the actual amount of debt.

How long can this continue in a nation which has to borrow $US 1.5 Billion a day to feed its trade deficit habit? How long can it continue in a nation which has stated that its government deficits over the next three years (including 2003) will total just over $US 1 TRILLION? Those are the official figures. The REAL figures, if anyone can find them, are sure to be MUCH higher.

Amazingly little media coverage - wonder why

Imagine how nervous countries financial gurus are as they see their portfolio in US $ shrink each passing day - Wonder how many of them are slowly dishording them or contemplating dishording for safer havens such as real money - GOLD

As US economy, stock markets, investment returns disappoint a US $ rout is not out of the question

All On Board The Gold Bull Express

ToolieLook out below!#1025145/8/03; 06:41:28

The usd @ 95.03
CoBra(too)ECB and BoE leave rates unchanged!#1025155/8/03; 07:03:57

As the US Dollar hit a new low at 95.03 (DXO) and the € is regaining the 14.40 level.
Gold moving up sharply vs the $ and traded as high as 345.80.

Interesting comment by the ECB ... cb2

CometoseMyths / and a RIDDLE#1025165/8/03; 07:04:58

If man is so smart and HE/SHE has been around so long;
why did it take until 2500 B C for man to determine to use silver and gold as money (medium of value /exchange).
Either HE/SHE is not that smart or we haven't been around as long as the Myth tellers purport...

WaveriderSpot 'n Spike#1025175/8/03; 07:55:52

Gandalf - Spot just bumped his head again - did you fit him with his hard hat before you let him out this morning?
Clink!A thought for the day#1025185/8/03; 09:15:43

Right at the bottom of the Mogambo Guru's column (yes, it takes stamina to get all the way through, sometimes) ranting about inflationist policies, he finishes with the following :-

I am struck by how Bush's plan for being "bold" differs by only one letter from "gold." One measly letter is the difference between something that will ruin you and one will save you. How poetic.

Gandalf the WhiteYES Lady Waverider !! SPIKE is leading the way and SPOT is following !!#1025195/8/03; 09:50:24

FULLY outfitted with the Kevlar hardhats and jackets to protect themselves ! "ONWARD to the MOON" is the new motto ! Perhaps we need a new POEM (or maybe a SONG from Sir GOLDFLY) !! WHERE are you Sir Goldfly ?

GondolinExchange £/€/$ rates...#1025205/8/03; 10:05:24

The announcement was made today by the Bank of England that 'for now' they will not drop interest rates. Is this, in the opinion of any of the learned here, an indication of whether the UK will follow the hard learned misconception of the dollar that low interest rates will spur the economy (taking into account the lag that the UK always seems to have on following the US lead), or is this an indication that the UK may actually adopt a more Eurocentric mode in the future.

And leading on (to my albeit small interest in the the relevance of the £), where does the GBP sit in the Euro v Dollar war, and what relevance does it have to the big picture in the current currency wars.

The UK is regarded as the foremost ally of the USA. Does this apply economically, as much as it does sometimes to those resident here non-sensically, in military matters?

Will or should, in anyone's opinion, the UK adopt the euro? This would surely be as much a political as an economic move if it ever happens. The political and press concencus is against it. Is this just more propaganda for the masses, or is there any real reason in the big picture painted on this forum that the UK should NOT adopt the euro?

Any comments would be welcome.

Magister AureliusAn English surprise??#1025215/8/03; 10:26:07


I just don't see Britain adopting the euro especially after France's latest behavior. The likelihood of Britons agreeing to submit their national economy to the direction and command of the Frogs is almost nil. Especially since most of the economies of the euro are very statist and socialistic in model, I see Britain aligning more with Canada and the US. And if the dollar totally tanks, maybe it will be Britain who returns to the pound sterling backed with gold? After, we don't know who bought the Portuguese gold...

JemeJordanEuro on Fire, Hits 4-Year High Vs Dollar#1025225/8/03; 10:31:35

Euro on Fire, Hits 4-Year High Vs Dollar
May 08, 2003 11:42:00 AM ET

MK"Big Two" Taking Turns Adds up to Major Turning Point for Gold#1025235/8/03; 10:37:24

Note: This article will be archived for the next several days at the MKs Gold Commentary and Review page. Please feel free to post on internet as you please with proper reference back to that page. I see this as a major turning point not just for gold but the world economy as you will see when you read what's below. Given the time, I will do some further updates on other areas of concern and interest, but I wanted to get this up to offer my take on why gold is making this strong move this morning. Please excuse any typo and/or text errors in the interest of getting the information out quickly.

Gold is rising sharply in international markets this morning following the European central bank's decision no to raise intererest rates. That decision, though it is sure to have a dramatic effect in the short term, is more important to gold investors for what it reveals about the long term. If you go back and look at the drama that was the 1970s, you will note a phenomena which not only has historical import but one which has practical application today. Gold did not rise alone. The yen, deutsch mark and a half-dozen other key currencies rose with it -- and rose dramatically over a number of years. What they all -- including gold -- had in common is that they were rising against the dollar. The ECB's accomplishment -- and I use that word "accomplishment" deliberately -- comes at a time of increasing, not decreasing, tensions across the board in the transatlantic relationship including rising trade sanctions, a fracturing political framework, and tightly drawn tensions over a unipolar (read US dominated), as opposed to multipolar (read US/EU dominated) approach to the third world.

So why did the ECB do it? Why did they seem to come down on the side of a weaker dollar and send gold catapulting through the $345 glass ceiling, at a time one would have guessed they would be more accomodative? They did it because it is their turn. It is the yen's turn as well. They also did it to send a message -- one the gold market read instinctively as very bullish.

As the world has become more universal (at least in a trade sense),and as we have moved from the auto-functioning that various manifestations of the gold standard afforded us, the nations of the world have had to learn to cooperate on some level as a matter of mutual survival. Thus the nations of the world have taken turns at the plate in the interest of ebb and flow -- cyclicality, if you will. In other words, as the socialist economies of the world -- and the U.S. is one of them (despite the protestations to the contrary likely to emanate from a conservative administration like the current one) -- have discovered that though they would like to substitute the onslaught of nature through government planning, they cannot do it economically without creating a semblance of it, if not by outright agreement, then by a wink, and a nod -- an "artificial" policy meant to mimic what Nature would have done given the opportunity. All of this variously falls under the G8's rubric of "policy coordination." Whether this was done intellectually or intuitively, by policy or accident, matters not: It is being done, and "it" is what we need to react to. The quote from Horace prominent at the left speaks to the same issue wisely and concisely: "You may drive out Nature with a pitchfork, yet she still will hurry back."

Above, I use the word "accomplishment" with reference to the ECB rate cut. It is an accomplishment because the ECB left rates where they were under heavy pressure from exporting manufacturers. In other words for the sake of the international economy in the long run, exporters like Volkswagen, for example, (which today blamed the strong euro for the blow delivered its bottom line) will take the gas for awhile, just as American auto manufacturers took the gas during most of the 1990s (despite heavy protestations logged with administrations of both political parties.) In so many words, the ECB told Volkswagen (and others): "Live with it."

In this morning's Financial Times , an article under the heading "Fed's Change of Focus Shifts Onus on to the Eurozone" Alan Beattie, that newspaper's astute US based reporter framed the scene this way:

". . .[T]he Fed's new orientation could have implications beyond the US economy. If it helps to undercut an already soggy dollar, its actions will shift the onus on to the euro-zone to become the global consumer of last resort. And while many economists have been hoping for a rebalancing of the world economy for years, a question remains whether the eurozone is ready for the role the currency markets are inviting it to take up."

In that regard, the ECB's rate decision is a step in the right direction. Ebb and flow. You're turn. My turn. What cannot be accomplished by Bush, Blair, Chirac, Shroeder, et al will like be accomplished by Alan Greenspan and Wim Duisenberg -- two ivory tower econo-banker types who would run from the word 'politics' the way you or I would flee a disturbed hornet's nest. I recall the book written years ago titled along the lines "Everything I Needed to Know I Learned in Kindergarten." If I recall correctly, "taking turns" was one of its admonitions. So, it is now the United State's turn to rebuild its productive sector. And Europe and Japan's turn to become consumer. If it doesn't happen, we do not hold out much hope for the world economy. And this perhaps at the end of the day is what Greenspan and Duisenberg can accomplish that the squabbling political sector cannot. Without the unspoken co-operation, we could get that collapse that seems to be the center of so-many concerns both in and out of government and, a concern certainly prominent these days in the financial hierarchy.

If the policy is not "enlightened" (as some will argue in the weeks ahead as this all sinks in), it is at least pragmatic -- and from that it will derive its staying power. What this fait d' accompli does for gold and gold owners can be seen in the rear view mirror -- about 30 years ago -- in far away time and place called the 1970s. The chart shown below certainly hints at something in the air, and a market building toward what could be a major breakout. Today could very well be the opening volley signalling a major move to the upside.

USAGOLD / Centennial Precious Metals, Inc.What you need to know before you buy your first ounce of gold...#1025245/8/03; 10:45:09

Q. I've noticed that USAGOLD / Centennial stresses education more than most of your competitors. Why is that?

MK. For years, we have emphasized "We educate first-time investors" in our advertising. We believe education to be the key to successful gold ownership. To make a long story short, we tend to keep our clientele as they become better educated, while many of our competitors tend to lose their clientele once they become educated. It shows in the type of services we consider important to complement our sales and delivery programs.

Randy interjects... Mike is way too nice to say this bluntly so I will. What I've noticed about the apparent rationale behind some of those other firms' operating philosophy is that, if they bend the client over far enough for their wallet the first time they ever do business together, they really don't have to care about getting repeat business. They find new uneducated targets ripe for picking arriving at their doorstep every day. It doesn't have to be that way, but some investors simply don't take the time to shop around for a quality firm that will treat them professionally and with respect. They should.

Q. What are some of the criteria a prospective investor should look for in a gold firm?

MK. Credibility, longevity, pricing, service and compatibility -- all come into the mix. Of those I rate credibility and its sister virtues -- reliability and reputability -- the most important. Too many of the national firms have brokers who were selling condos at the beach or automobiles a month ago and now suddenly they've become "gold experts" selling leverage schemes, $50,000 rare coins, reproduction medallions at 25 times their gold content, or overpriced silver investments. Most sophisticated gold investors would probably like to avoid that sort of thing.

USAGOLD / Centennial Precious Metals, Inc.Because nothing else passes undiminished through time and turmoil so well as gold#10252505/08/03; 10:58:08

Golden Goal

"Treasure chests throughout history
have been filled with gold, and not by idle choice."

-- R. Strauss

BelgianA Rapprochement....A dangerous liaison.....?#10252605/08/03; 11:11:32

France is inviting China to the G8 !!!
ZhishengUp into the Close!#10252705/08/03; 11:30:15

Not a bad day for gold: $350 tomorrow?
John the JuteSeconding HOF nomination for miner49er @ 102429#10252805/08/03; 11:43:55

I'd like to second the Hall-of-Fame nomination made by Sir Thomas Gresham @ 102498 for miner49er's post on why petrodollars are unlikely to be repatriated in a destabilizing rush. He answered all the questions I had asked, and several I hadn't realized that I ought to ask, in a model of clear writing.


Gandalf the WhiteSir Zhisheng <;-)#10252905/08/03; 11:44:35

Zhisheng (05/08/03; 11:30:15MT - msg#: 102527)
Up into the Close!
Not a bad day for gold: $350 tomorrow?
SORRY, SPOT can't wait for TOMORROW !
The "aftermarket" will do it !

CoBra(too)Re - Miner 49er#10253005/08/03; 12:00:06

As always, would feel miner's well thought out essays and responses deserve to have its own nich on HOF.

I am (cb)too seconding the latest miner49er essay!

Cheers cb2

TopazBonds.#10253105/08/03; 12:26:02

Long Yield hit 4.65% and retreated slightly today (currently back down to 4.64%) T-Auction results disappointing this week -- E-Zone rate hold should have been Yield positive...but it wasn't!
The ECB to my mind are signalling a shift in "management" from IR's to Gold-ratio...and if this be the case, E/PoG should rise back to 320. Under such a scenario, the Dollar is toast.
If the strategy fails they (ECB) may as well all pack up and go home!

Gandalf the WhiteANOTHER nice looking CHART ! <;-)#10253205/08/03; 12:44:48$GOLD:dow,uu[w,a]dalaynay[de][pf][i]&pref=G

See Lady Waverider, why SPOT was not worried !
Look tomorrow for today's UPDATE.

Gandalf the WhiteYES Sir -- Sir Topaz --- Looks as if you are CORRECT !#10253305/08/03; 12:47:04$GOLD:$XEU,uu[w,a]dalaynay[de][pf][i]&pref=G

I can't wait to see today's action plotted !

mikal@Gandalf #10253405/08/03; 12:58:27

Re: "Perhaps we need a new poem!"
You couldn't have asked a more capable bard in the Lady Waverider. But I couldn't resist:

Crystal gazing ball
Rarified gold company
'Lectric exosphere

AristotlePop culture on Gold#10253505/08/03; 13:34:56

When I saw the last comment the scene wrote itself in a crisp black and white TV image.

= = = =
NEW YORK, May 8 (Reuters) - COMEX gold soared ... the dollar weakened in response to European Central Bankers' decision to hold key interest rates steady, traders said.

A weaker dollar offers a currency advantage to overseas buyers of dollar-denominated gold.

Both funds and speculators were pulled into the fray...

"Yesterday's sellers here in the gold turned out to be today's buyers. A lot of people who had gotten short on reversals yesterday, had to reverse again today to get long," said one COMEX broker of Thursday's upside action.
= = = =

__Leave it to Beaver__
(starring Jerry Mathers and Tony Dow)

"Gee wiz, Wally, I don't care what Mom or Dad says, wouldn't it be better to drop outta sight like a hermit to spend all my time bein' a babysitter for a whole lotta trading turns -- you know... flipping longs and shorts back and forth?"

"Gosh, I dunno, Beave. Sounds kinda dumb if you ask me."

"But Wally, holding physical Gold is kinda too easy and boring 'cept for all the kids at school kinda make fun of me on accounta it makes my pants sag. They also call me 'old fashioned'."

"Gee, Beave, sagging pants ARE kinda creepy. Why don't you just ask Dad for a safe place to keep your Gold and then shut up about it around school."

"Thanks, Wally. I guess I sorta gotta learn to keep my pants up and my big mouth shut."

"Hey, Beave, how much Gold DO you have already?"

"Gold? What Gold, Wally?"

"You know, Beave, for bein' justa kid, you're not so dumb."

"Maybe its on accounta I have an older brother lookin' out for me. Thanks, Wally."

A better way of life. Get you one. --- Aristotle

AristotleHall of fame for Miner49er?#10253605/08/03; 13:42:08

Make it happen, Townie. By my count this makes the third endorsement of the original nomination.

Gold. Archive you some. --- Ari

axRepeat Question: Time for INCREASE in U.S. GOLD RESERVES?#10253705/08/03; 14:13:49

I realize I have been asking this question for a number of

years, here on this forum and elsewhere, as well as
advocating that the U.S. government do this, but I shall

repeat the thought again:

What do you think , as a start in the reintroduction of gold
as a better stabilizer of the financial system, that there
should be an increase in the total tonnage of gold in the
U.S. Reserves?

If the USD is to continue as the world's reference currency,
wouldn't this help to maintain it there, as the USD

gradually devalues against the other currencies? Extremely

low interest rates, hugely expanded money

supply and a USD better backed by gold would be a natural

prescription to economic recovery led by the U.S.

Gold could be acquired by small open market purchases as

well as larger lots from the European Central Banks ( such

as Switzeraland) who is now selling.

Would this be something infeasible?

Respectfully, I raise the point again to the Forum.


Aristotleax -- "Would this be something infeasible?"#10253805/08/03; 14:20:38


You oughtta try to recall the responses that others and I gave the last time you brought this up.

Gold. Get YOU some. --- Aristotle

GoldiloxDMR#10253905/08/03; 14:22:19



" To balance the current account deficit the U.S. needs about $1.5 billion a day of foreign investment and that figure is rising. With falling equities markets (which are still grossly overvalued by the way) and the measly return on bonds and Treasuries, I certainly EXPECT (emphasis is mine) foreign investors to continue to bail out of U.S. based investments. This in turn will add additional pressure on the dollar leading to greater investment demand elsewhere, including the precious metals."

Did you mean "Expect" or "Do not expect"? Your wording in the rest of the statement suggests a negative. If "Expect" is correct, would you elaborate?

Black BladeBet Your Bottom Dollar On More Declines#10254005/08/03; 14:32:54


With U.S. interest rates nowhere near ready to rise, foreign interest in dollar-denominated securities remaining weak and a growing federal budget deficit, betting on anything more than a short-term rebound in the dollar seems risky right now. Indeed, with Treasury Secretary John Snow apparently in no hurry to talk the dollar higher -- a low dollar does increase profits for big U.S. multinationals -- my bet is we'll see a $1.20 euro before we see a $1 euro again.

That could be good for the Federal Reserve, which has tried everything to boost the economy for three years and may be resorting to a weak-dollar policy because it at least stimulates some parts of Corporate America. And the thinking may be that at some point the U.S. stock markets will start to climb again, and that will attract foreign capital back into the country.

But that weak-dollar policy could backfire if the run on the dollar becomes a rout and its fall starts making front-page news. And while the dollar isn't likely to go down the same road as Iraq's ill-fated Saddam dinar, now serving as toilet paper, another big drop from these levels could hurt the stock market. Whatever the case, we're likely to see this event climax in the next few months as the economy decides whether it will recover or slip further into the abyss.

Black Blade: I bet on further dollar declines. There is nothing that can be done now as interest rates cuts will go nowhere. OK, maybe a short term spike but with a cut more foreign investors will "beat their feet" toward the exits as paltry returns fall further. I fully expect the Fed to give the Treasury the go ahead to "fire up the presses" in order to stimulate the economy and in turn spur inflation. Consider that the Fed tends to "overshoot" both on the upside as well as the downside in monetary policy. Alan and the boys and girls at the Fed are sure to be squirming in their seats at each new FOMC meeting here on out. What a choice! Cut short term interest rates or create higher inflation as a counter to deflation worries. Look for increasing flights toward safety in precious metals.

Goldilox"Derivatives are a BOON to US Economy" - AG#10254105/08/03; 15:02:42

More Greenspanspeak:

CHICAGO (Reuters) - Federal Reserve Chairman Alan Greenspan said Thursday the increased use of sophisticated financial instruments called derivatives has been a boon to the U.S. economy during a period of unusual stress.

"Although the benefits and costs of derivatives remain the subject of spirited debate, the performance of the economy and the financial system in recent years suggests that these benefits have materially exceeded the costs," Greenspan said in remarks prepared for delivery to a conference sponsored by the Chicago Federal Reserve bank.

While the U.S. economy's performance has been "subpar for some time," it has been "remarkably resilient" in the face of severe shocks including the collapse of stock prices, terror attacks and global turmoil, Greenspan said, partly because the U.S. banking system has remained healthy.

Copyright 2003, Reuters News Service

Black BladeRe: Goldilox#10254205/08/03; 15:03:33

I do believe that given the paltry returns in US based investments are a definite "turn off" for foreign investors. Not that I see the Euro (or any other major global currency) as performing exceptionally well, but in relative terms it is certainly performing better. If foreign investors have US based investments they are rapidly losing ground with a weakening dollar. That is compounded by the currency exchange rates as the dollar declines. I therefore "expect" to see foreign investors to look elsewhere to invest their cash if for no other reason than for safety (wealth preservation). This should lead many investors (including foreign investors) to seek out better returns elsewhere and some to seek out safe havens such as precious metals while at the same time curtail new investment in the US. Several analysts and economist now expect to see the dollar decline in excess of $1.20 to the Euro and as the dollar (and dollar-based investments) declines, gold (priced in dollars) gains. Actually I am surprised at the Euro strength (or maybe it's just that the dollar is that much weaker). After all, indications are that the global economy is in real trouble. That said, there are clear indications that the Fed will "reflate" by sharply increasing the money supply to counter deflation concerns and to "stimulate" the economy as there is little room to cut short term rates. This time however, I think the Fed is backed into a corner. Given the outlook for further dollar declines I do "expect" that foreign investors will throw in the towel on the US and take their "chips off the table".

Sometimes I fail to express myself well and that has got me into a bit of trouble in the past. I do hope this helps. ;-)

- Black Blade

Socrates964Gondolin/Euro#10254305/08/03; 15:07:40

Gondolin -

My own feeling is that most English people and the leading politicians of both major UK parties lack the part of the brain which allows them to think objectively about Europe. They seem incapable of perceiving the benefits of sharing a currency with a bloc that accounts for 60% of that country's trade, and on which they are likely to become even more dependent given that North Sea Oil is running out.

Despite the fact that UK laws let foreigners come to London and do more or less exactly as they please, they recoil in terror in the idea of signing up for Brussels, since, they claim, it would allow foreigners to come to London and do more or less exactly as they want. Point out to them that despite the tyranny of Strasbourg, national sovereignty still seems to be alive and well in Euroland (e.g. foreigners don't just pull out a checkbook and buy a French or German bank) and they'll look at you as if you're mad. Let's face it, the Brits just want to be Airstrip One, and that's all there is to it - rather like the Bulgarian communist leader who tried to sell his country to the Soviet Union.

The Guardian, IMHO, got it precisely right when they pointed out a) that Tomy Blair has burnt his bridges in Europe, b) he has surrendered membership of the Euro (probably the most important political issue of the day) to Gordon Brown, who has turned his '5 tests' into a test of whether the Euro qualifies to join the pound.

While the electorate can probably be pushed into voting either way, I can't see the political will to do so. The economic force certainly exists, but even assuming that Britain loses bucket loads of jobs to companies that relocate away, you have to remember that a) it probably won't happen in the City, since it is essentially a colony of Wall Street and the CEO's wife doesn't want to live in Frankfurt, b) the anti-European media will cover it all over and claim, with some justification that the UK's contracting economic base is due to worldwide recession, rather than the wrong strategic choices on Europe.

PS it goes without saying that we are at a critical juncture on the Euro - a number of TA people who I otherwise respect (all Americans) genuinely seem to believe that this is the top on the Euro and it will now turn round and head down to parity. My own reading is that it has already broken the key 78.6% level around 1.13 and may hesitate a bit, but is now going to 1.20 and probably 1.29.

After all, if the net result of the BoJ's action to support the dollar and weaken the Yen was to take it from 120 to 117, how are pro-Fed forces going to get the Euro back to parity?

Socrates964Euro II#10254405/08/03; 15:12:01

The other point about the Euro is that the easiest way to unleash forces within Euroeconomies that tear its economic fabric apart is to turn it into a hugely overvalued currency - e.g. $1.40 to $1.50.

This kind of rate also gives the US a fighting chance to turn its trade deficit around.

Black BladeWho says inflation is dead? #10254505/08/03; 15:36:07


New York (CNN/Money) – Economists reassure us that life for the average American really isn't that much more expensive than it was a year ago. In fact, for certain goods, prices have never been so low. Companies are practically giving away cars, clothing, computers and televisions. Fast-food restaurants hand out burgers for a buck. But even as prices for certain goods are being pushed down, prices for other essentials are ticking higher. "The theme is most goods are going down in price and most services are going up," said Stuart Hoffman, chief economist for PNC Financial Services. "College tuition, insurance, transportation and healthcare...these are all items where prices have gone up noticeably."

Black Blade: Unfortunately government and the Fed don't count "essentials" as being inflationary. This is by design of course. There is a political element as well as a fiscal element. For example it promotes the illusion of fiscal responsibility and reduces cost of living allowances (among other reasons). Besides, if the "real" inflation rate were revealed, then compared against the short term interest rate we would see "real" rates sink further into negative territory - good for gold.

R PowellDollar carry trade#10254605/08/03; 15:50:07

Someone mentioned recently (although I've forgotten exactly who, sorry) that he/she had taken a second mortgage and maxed out the plastic cards to buy precious metals and some stocks leveraged by the price of metals. I was struck by risk inherent here but also was somewhat in awe of the nerve involved to really initiate this position. Each can judge for oneself whether this shows the courage of convictions or a too risky bet or both. I did take notice of this and, as a similar speculation, A nation of one's decision to back long Comex gold positions to the n-th degree with whatever margin was necessary until the dollar POG turned these into great profits. As a gambler of sorts my interest was immediately caught by these schemes and I wish them good luck. I honestly do believe the dollar POG will rise appreciably for some time. However, both the upturns and downturns will become greater, ie scary!

While thinking about these speculations, it occured to me that these might be called "dollar carry trades" with the dollar being the depreciating asset now being sold and/or borrowed and sold to initiate (buy) positions elsewhere in investments deamed likely to rise in dollar value terms but, at the same time, somewhat immune to the now occuring dollar depreciation. Dollars can be borrowed at low interest rates much as gold was years ago. Repayment of gold during the gold carry years was often done at a lower gold price adding to profit made from the interest spread between interest paid on gold borrowed and the higher interest earned from the capital investment. Is it not plausible that we now have a dollar carry trade with the major hurdle being simply finding the right investment for the borrowed dollars? The only investment requirement would be that it appreciates while the dollar's relative value is falling. Is it also not plausible that the big players who previously sold gold to raise investment dollars will awaken to the opportunity of now borrowing dollars to buy gold?

I've often agreed with the old saying that nothing is certain but death and taxes but the case for higher dollar gold prices in the foreseeable near term is imho awfully hard to deny. However, this scale of speculation is extremely risky. Beware also of the unforeseeable and good luck.

The amounts of physical gold available to be sold during the gold carry days was always limited by how much was available and how much the market could absorb. What are the limitations on dollar credit for a dollar carry trade? How great is the investment venue for returns not downsized by a depreciating dollar? Are inventment dollars now being positioned with such reasoning? Now, wouldn't that be nice? Basically, this is the logic behind purchasing physical gold for wealth protection but, it now may also be seen as a leveraged financial speculative opportunity by the BIG money players. If I were a big time money manager responsible for investment, a whole lot more than 5-10% would be "barbarically" invested at this time.

Gandalf: Please see to it that the boys are well fed as they worked hard today and did a yeoman's job of it!

GoldiloxDMR Correction#10254705/08/03; 15:53:07


I thought the jist of your remarks were leaning that way, I just wanted to ensure that I wasn't missing an aside that had another focus.

I often catch myself, during editing, encompassed in double negatives, or some equally confusing silliness, as I trip on my own wordsmithing. Please accept my humble thanks for the clarification.

BTW, I visited a local coin/bullion dealer today, and he said business has been "brisk". Methinks John Q is starting to doubt the market spin messengers more and more.

Run, Spot, Run!

misetichJim Sinclair - Saudis and US major divorce - #10254805/08/03; 16:01:11


Well, it's basically telling us that those that have been the major buyers of the US dollar over the past six years, basically Islamic Asia, and the great success of the sales policy, salesmen in fact, of the dollar reserve standard, which now is internationalised everywhere – that we basically have overstuffed the central banks around the world and the dollar has become a non-performing asset, because the depreciation of the dollar is orders of magnitude larger than the present interest being earned on US treasury instruments by central banks.
However, the dollar weakness we see now is primarily out of the Mid-East, primarily out of Saudi interest, where the US has had a major divorce in the last week, if you've been watching the news concerning the withdrawal of military bases from Saudi Arabia, to be relocated – guess where? – in Iraq.

On the ESF interventions

" But recently, from 99.20 down, each time they've entered the market to stabilise, they've run right into tremendous amounts of dollars for sale."

There are other reasons too. There's a court case here in the US naming certain members of the Saudi royal family as allegedly having supported the 9/11 situation financially. Now that's allegedly.
here's a lot of things we're doing all at one time to cause the major dollar-holders to, let's say, be much less obligated to take a loss holding US dollars. So a major divorce has just taken place between the United States and Saudi Arabia at the same time as we've taken a military stand and, after the military stand, having a difficult time sustaining the reasons why we were there.
So the probability is more in the area of between $400 and $450, but not as a fixed price.

Jim claims a divorce has taken place between Saudis and US which conflicts with previous postings here at the Forum (if I'm not erring from Mr. Dollar Bill - of trillions of US $ ready to be invested in US and Europeans assets from the Middle East (Barhain?)

If Jim is correct and the Saudis are behind the recent US $ selloff the price of getting on The Gold Bull Express is getting higher and higher

GoldiloxDollar Carry Trade#10254905/08/03; 16:15:01

@ R Powell

Your logic is correct, but as most margin schemes, it suggests "if a little is good, a lot is better", which is not always true. During the SM bubble, I knew a number of SillyClone valley collegues margining their limits to take advantage of the meteoric rise. Only the ones who predicted the correction properly made money. The others are broke!!!!

Margin investing requires so much more attention to timing, up and down jitters, and "where the ball bounces" than value investing.

From what I have gleaned on this forum and in other study, a certain safety factor helps me sleep better. I will continue to invest my liquid FIAT in solid PM, but I think I'll refrain from borrowing to increase my risk/reward exposure.

My logic is :

1) If Au finds a "natural price", I will probably profit over other investments.
2) If Au reacts violently, and I sell some after a hyperbolic rise, I may be lucky enough to profit a lot.
3) If the PTB keep Au contained, I will not lose any more money on toilet paper investments, but instead maintain value.

Maybe I'm chicken, but my stomach for gambling is much less than my younger days.

R Powell BIS news in PDF form#10255005/08/03; 16:15:19

Your current news on phrase "gold(any word)" at a glance:

1 new document(s) found since 06.05.2003:

1. Regular OTC Derivatives Market Statistics - BIS -May 2003 (07.05.2003 17:17)
Full text, including the graphs and tables, of the Regular OTC Derivatives Market Statistics for the second half of 2002. (PDF, 95686 bytes)

..386 364 49 58 62 61 Options 1,556 1,561 1,828 1,944 150 147 181 194 Commodity contracts3 590 598 777 923 83 75 78 85 Gold 203 231 279 315 21 20 28 28 Other 387 367 498 608 62 55 51 57 Forwards and swaps 229 217 290 402 ... ... ......

Magister AureliusSaudi-US divorce#10255105/08/03; 16:18:14


There is an unexpected bonus in the removal of US bases from Saudi Arabia. Osama's biggest burr in the saddle was the presence of US military forces in the same country as Mecca and Medina. And most of the bases are going to be moved to Qatar where Centcom is now.

Now gold is going to get costly, because the House of Saud will now know that we are not going to accomodate them, and the House seeking its own survival will look to a hefty gold reserve and maybe if the heat in Arabia gets too hot, then they will go chill with Saddam on the Riviera after they get some French passports.

misetich Greenspan Sees Risks in Derivatives#10255205/08/03; 16:29:27


CHICAGO (Reuters) - Federal Reserve Chairman Alan Greenspan on Thursday expressed concern over the risks posed to financial markets by the concentration of the $142 trillion derivatives market in the hands of a few investment banks.

'If a major dealer exited and other dealers were unwilling to fill the void, the liquidity of the market likely would be impaired,' Greenspan said.
According to the Swiss-based Bank for International Settlements, the global over-the-counter derivatives market had grown to nearly $142 trillion by the end of last year
Representatives of J.P. Morgan Chase, the biggest player in both those markets, were not immediately available to comment.

'When concentration reaches these kinds of levels, market participants need to consider the implications of exit by one or more leading dealers,' Greenspan said.

It wouldn't surprise if derivatives market keeps on growing - What choices do the big players have? Keep on going until...bust

All On Board The Gold Bull Express

Cavan ManUSAG102523#10255305/08/03; 16:32:54

Commentary by MK

That is one of the best pieces of analysis I have read in four years.
misetichMounting Job Losses Signal Double-Dip Recession!#10255405/08/03; 16:35:13


Here are some facts...
The more reliable 4-week average hit 446,000 -- a new one-year high!

The official unemployment rate hit 6% in April. That means there are 8.8 million people looking for a job who can't find a job -- any job. But there are also 1.4 million "discouraged" men and women not officially counted because they stopped looking for work entirely. There are also 4.8 million people who are working part time because they can't find full-time jobs.

Employers announced over 146,000 layoffs in April on top of more than 85,000 job cuts in March, according to outplacement firm Challenger, Gray & Christmas. Since most of those layoffs have yet to hit the economy, that should send the unemployment rate soaring!

The payroll survey reveals 525,000 jobs disappeared in the past three months. Going back to World War II, the economy never lost jobs for three months in a row -- except during recessions!
This is dismal news for the US economy. Capital spending by corporations dried up three years ago and still isn't coming back. Consumer spending -- which accounts for 70% of all goods and services produced -- is one of the last legs supporting our tottering economy

1.4 million discouraged and 4.8 million working part-time who can't find ft jobs -

If these numbers are correct (and chances are they are) the aspired US economic recovery is not going to materialize any time soon -

All On Board The Gold Bull Express

misetichMagister Aurelius (05/08/03; 16:18:14MT - msg#: 102551)#10255505/08/03; 16:43:05

Lets stay tuned on this one shall we! With another round of Europe + Russia vs US etc coming up over lifting UN sanctions -

The need for US etc to use Iraq oil sales for the reconstruction of Iraq against the unwillingess of both France and Russia

The Palestian Road Map - Iran - Syria - North Korea


Saudis - Venezuela (referendum soon) + Opec

Malasya (Dr. Mahatir just promoted sale of US $ and switch to Euros) and its Dinar - The Chinese Gold Market

Global Deflation -

The tumbling US $

Interesting times ahead!

All On Board The Gold Bull Express

GoldiloxQuack Quack#10255605/08/03; 16:45:09

In the past couple of days I have heard the statement, "We have never experienced [insert calamity here] before outside of a recession" more times than I can count. The spin doctors need to quit plagiarizing each other with such predictability. Aren't there any original writers left in the media?

If it walks like a duck, talks like a duck, and smells like a duck,


As Bart Simpson would so eloquently suggest,


R PowellGoldilox // Dollar carry trade#10255705/08/03; 16:52:33

Thanks for responding. I found your reaction ....

"Maybe I'm chicken, but my stomach for gambling is much less than my younger days."

...... to be exactly what I expect from most of us. I wouldn't say chicken, one man's tea is another man's poison. The degree of risk undertaken by different people at different times during life under different circumstances has absolutely nothing to do with the quality of one's character. Much depends upon the individual financial situation and one's tolerance for risk. Many studies concerning the rates of financial investment returns have all come to the same conclusion that usually, the higher rates of return simply require undertaking higher degrees of risk. I was not and am not recommending, endorsing or even suggesting that anyone take such risks.

Now, hopefully having cleared that one, I will say that I am fascinated by the risk/opportunity that is presented here. I do speculate myself (and have paid for some interesting lessons, the more so as I started totally ignorant of financial matters) but on a smaller scale. To all those who can stand the heat, whether fund manager or individual small speculator, whether invested in paper speculation or physical accumulation or both, and correctly read the situation, invest accordingly and then prosper, I tip my cap to you. For the vast majority, the gunslinging type of investment trading I mentioned is not appropriate but for others willing to do the work..(lots of time and effort),..well....

However, the dollar carry trade may be becoming more and more attractive to huge sources of money held for investment by those whose exact job description might best be described as financial and/or commodity and/or currency traders. There isn't much room in the precious metals' markets for the amounts of money these guys move around.

Great Albino BatSome news on silver in Mexico#10255805/08/03; 18:00:59

I think it might be of interest to posters and lurkers at this Forum, to be aware of developments in silver in Mexico. (For those who are not aware of the existence of this country, it lies to the south of the U.S., and its inhabitants number some 100 million. Up until the U.S. went to war with Spain and "liberated" the Philippines in 1898, the "Mexican silver dollar" was the world's most abundant coin.)

In early April, the Mexican Senate voted UNANIMOUSLY in favor of the introduction of a silver coin into the monetary system. (The Green Party abstained, from a mistaken idea that this would accelerate mining and thus deplete a non-renewable resource, when the fact is, that by creating a durable silver coin, silver is withdrawn from consumption and thus, coinage preserves silver, rather than increasing its consumption.) ALL other parties voted in favor of the measure.

The Senators evidently did not read the text of the Bill, only the glowing words written to present the Bill, and automatically voted in favor.

The projected Bill was shot down due to voices which pointed out that the Bill had no substance and Mexico would be worse off than if nothing was done. So the Bill died in Committee in the House of Representatives.

There will probably be a new effort to introduce a silver coin into the Mexican monetary system, later this year.

The essential elements would represent a GRAFTING of silver on to the monetary system, by a simple yet novel expedient:

1. The silver coin, the one ounce "Libertad", to have NO NOMINAL VALUE engraved upon it.

2. The silver coin to represent full legal tender for all transactions, at a FLOATING VALUE in Mexican pesos determined by a daily quote from the Bank of Mexico, and based upon a) the international price of the silver ounce b) the exchange rate of the Mexican peso c) a percentage of seignorage accruing to the Bank of Mexico d) a value rounded upwards to the nearest zero or multiple of five.

3. The last quote of the Bank of Mexico, to remain A BASE BELOW WHICH THE QUOTE CANNOT DESCEND.

If this measure is enacted, Mexico may be the first country in the world to incorporate once again, a silver coin into its monetary system, in a long-lasting manner, through the mechanism of FLOATING VALUE and BASE VALUE. In other words, the coin will only be allowed to go up in pesos, or remain unchanged, but never be worth less pesos.

The unanimous vote of the Mexican Senate is testimony to the unifying force of silver in politics. The idea of silver coinage is alive and will not die out. Especially with developments in the world today.

Hope you find this interesting and encouraging.

Back to hanging out - upside down.

the GAB.

misetichAct On Road Map: Kingdom#10255905/08/03; 18:03:41


MOSCOW, 9 May 2003 — Russian Foreign Minister Igor Ivanov and his Saudi counterpart Prince Saud Al-Faisal made a joint appeal yesterday for the rapid implementation of an internationally backed road map for peace in the Middle East, during talks in the Russian capital.
At the Moscow press conference, Prince Saud said the Kingdom and Russia were united in their desire to see a stable government take shape in post-Saddam Iraq. "What is most important is that we are united by the desire to preserve Iraq's sovereignty, independence, and territorial integrity," the prince said.

Russia and Saudi Arabia "will work so that the Iraqis take control of the state in their hands, so that this governance serves the interests of the entire Iraqi people," Prince Saud said.

Russia, which strongly opposed the war, has called for the United Nations to take the lead in post-war Iraq, a move designed to put some limits on the United States and ensure that Moscow has a role. Ivanov again stressed the need for a key UN role during his meeting with Prince Saud.

Interesting ....

All On Board The Gold Bull Express

R PowellForex market#10256005/08/03; 18:05:53

The Euro is up over 115.
The US dollar index is under 95.

21mabryIMF#10256105/08/03; 19:48:28

As of Jan. 31 2003 the IMF reports its gold holdings at 103 million ounces. It valued this gold at 38.3 billion dollars or 27.8 billion SDR. FYI
axWhat the Treasury Should Buy#10256205/08/03; 20:07:02

ref: Aristotle (05/08/03; 14:20:38MT - msg#: 102538) . Get YOU some. --- Aristotle
(05/08/03; 14:13:49MT - msg#: 102537)ax
Repeat Question: Time for INCREASE in U.S. GOLD RESERVES?

Aristotle,thank you for the comment. Everyone should have some or alot of gold. Particularly our government.

There seems to be little problem in accepting a strategy
by which the U.S. Treasury would be buying back gov Bonds, or even shares in corporations.

Why should not the buying of gold to add to gold reserves
which are now the largest of any country be such a
cumbersome concept?

The U.S. govt wishes to maintain the dollar as the reserve
currency of choice, keep money supply up and interest
rates low, and keep the dollar strong enough that it
retains consumer purchasing power for domestic and foreign

The only the above can happen is to increase the intrinic
value of the USD. Without an expanding manufacturing and
export base by which to to do this, the addition of gold
to the treasury reserves is the only solution - in my
view. Do you have an alternative remedy - let us say
if you were the President, Federal Reserve Chairman, or
the Sec. of the Treasury?



goldquestU S Treasury and Gold#10256305/08/03; 21:13:03

ax, don't be suprised if one day soon, it is announced that the U S has been buying gold all along. The U S, in cahoots with the U K, are probably cornering the gold market as we speak. If you noticed that during the gold sales by the BOE, payment was always required in U S dollars, payable to their account in NY. If the U S has been the buyer, my guess is that the gold is still in the vaults at the BOE and the dollars are still in the bank in NY. We don't really know who the buyer or buyers have been of the gold that has been sold since the Washington agreement. If this agreement was a ruse to get other countries to part with their gold, my bet is that the U S and the U K have been buying it up big time. When the time is right, gold will make a grand entrance into the world monetary system. If you are already onboard the gold train, sit back and relax! The payoff is going to be enormous!
Black BladeIntel warns stock option changes would hit profits #10256405/08/03; 21:55:55


Intel, a leading opponent of radical changes to the treatment of stock options, warned that the measures would have cut its first quarter earnings by a third. The claim adds further fuel to a growing battle between senior executive management in US technology companies and shareholder groups. In a filing with the Securities and Exchange Commission on Wednesday, the world's largest chipmaker said its option expensing under the Black-Scholes valuation model would have been $298m, or five cents per share.

Black Blade: Of course stock investors should be concerned with "real" earnings and not imagined earnings. So many ways to cook the books.

Black BladeMahathir pushes oil firms to ditch dollar for euro#10256505/08/03; 22:12:35,,5-674251,00.html


THE euro has found an unexpected supporter in the form of Malaysia's Prime Minister, Datuk Seri Mahathir Mohamad, who yesterday urged the state oil company, Petronas, to abandon the dollar in favour of the euro. Dr Mahathir said that Petronas would earn more if it priced its gas and oil in euros. "It is something that Petronas should consider. The US dollar has depreciated by 25 per cent. In other words, we are earning 25 per cent less," he said. Dr Mahathir is known for his suspicion of the currency markets, which he regards as driven by greedy speculators, and his distrust of the United States. He famously blamed hedge funds and, in particular, George Soros, for the collapse of the ringgit during the 1998 Asian financial crisis. Last year, he suggested use of the gold dinar as a means of exchange in international trade and in February he gave warning that the US dollar was overvalued.

Black Blade: Sounds like a man with a plan. First it was the gold dinar and now oil for euros.

Gandalf the WhiteThanks Sir "Bard" Mikal !#10256605/08/03; 22:37:59

mikal (05/08/03; 12:58:27MT - msg#: 102534)
Re: "Perhaps we need a new poem!"
GOLDEN ! Short and SWEET.

Gandalf the WhiteSir RICH -- SPIKE & SPOT send their THANKS !! #10256705/08/03; 22:48:54

Yes, they each got a BIG STEAK this evening !
Hope that it does not slow them down tomorrow !!

axWhat if the U.S. Treasury were buying gold?#10256805/08/03; 22:50:14


goldquest (05/08/03; 21:13:03MT - msg#: 102563)

U S Treasury and Gold

ax, don't be suprised if one day soon, it is announced that the U S has
been buying gold all along.


That would be very good for the U.S. if this was actually

Depending on how much gold the U.S. treasury has been
acquiring, to that extent the policies of low USD interest
rates and increased money supply would more be effective.

Naturally, the dollar value of U.S. gold reserves would
rise just with the rise in the price of gold itself.
This rise in the value of U.S. reserves could be augmented
by purchase of gold now while the price is still relatively

If the U.S. is not now purchasing gold for the treasury,
it should begin doing so as soon as possible, in my opinion,
to keep the purchasing power of the dollar from falling

This supports the combination of low interest rates,
increased money supply and a strong enough dollar to
maintain consumption in the U.S. of foreign and domestic



Gandalf the WhiteLOOKING Good (Chart)#10256905/08/03; 22:57:53$GOLD,P

LOOK at today's added "X", Lady Waverider !
NICE "Low Pole Reverse" ALERT !!
Up,Up and Away "Yellow Bird" !!
OOPS -- That reminds me of an airline of years back, that CONSTANTLY played the song "Yellow Bird" on ALL their flights !!!
The Airline had all ofits plane painted a bright YELLOW !!
Nice on short flights, BUT my wife and I happened to take ONE LONG FLIGHT and that was the LAST one on that Airline.
IF I every just happen to start to whistle "Yellow Bird" and she hears me --- she starts SCREAMING !!!

bugsspeaking of yellow things..#1025705/9/03; 00:15:15

My apologies if this was posted previously.

According to the Beatles,

In the town where I was born lived a man who sailed to sea. And he told us of his life in the land of submarines.

So we sailed up to the sun until we found the sea of green. And we lived beneath the waves in our yellow submarine.

We all live in our yellow submarine
Yellow submarine, yellow submarine
We all live in our yellow submarine
Yellow submarine, yellow submarine

I don't think I like the idea of converting gold into money (for method of payment of debts or coinage for buying goods/services in real life.)

Wouldn't floating a gold coin for legal tender of payment of regular goods on the street wreak havoc with store owners? Would your average Shop need a real-time price calculator to figure out how much to charge customers, considering a global gold/commodity trade environment?

I don't understand the Mexico/Nevada silver arrangements... why bother... but then I am a newbie, so.

I believe I'd rather own Gold and maybe some Silver as wealth to preserve against monetary inflation and insurance, but not for a currency/daily medium of exchange. I'd also look at land/real-estate as a store of wealth if it wasn't so rigged and paper-infested already. Maybe the Bat Guano would be good stores as well if Bats were hard to breed. Not looking for "the moon" in Gold; just to keep wealth as wealth, over time.

However, if "money" is defined to also be to be a "store of value", then I would say Gold is money. But I wouldn't think physical or paper Gold is a good method for transacting in daily life. I wouldn't want to slap down a 1-Kilo gold bar to purchase a house, or a 1/1000th coin to buy a ham sandwich for lunch.

Though, I'd feel more confident in using a currency that was valued based on its "wealth" collateral, which could be Gold reserves or maybe Guano if it was in limited and somewhat fixed supply. I don't consider the ability of a government to collect taxes, or the the ability of a government to hold a gun (however effective) as "wealth" collateral for a currency. My opinion only..

Apologies for rambling..

Mr GreshamSilver "Carry Trade"#1025715/9/03; 00:51:37

Whew! Stuff's heavy! Someday probably will come with a product warning label "Consult your cardiologist before carrying." (Now I know why BB faithfully gets to the gym.)

Too tired to read. (didn't even get back to miner's -- glad it'll be around in the HOF) Gonna sleep well tonight...zzzzzzzzzz

WAC (Wide Awake Club)@Socrates964, Gondolin - Euro#1025725/9/03; 01:19:50

I think the main clue we have as to whether the English (Welsh, Scottish and others would join tomorrow if asked) will join is to watch the behaviour of sterling. I believe TPTB in England would join if offered a seat at the TOP table in Brussels, or better still to be the ONLY one at the TOP table. Given that this is somewhat unlikely, some tough negotiations would have to take place. One of the topic for negotiation as obvioulsy got to be sterling.

In the last 6 months, sterling as depreciated almost 20% against the Euro, while remaining quite stable against the USD. I believe we have some way to go yet. I expect to see STG/Euro parity in the near future. We have been there before, in the days of the DM, so folks would have forgotten.
I am sure Belgian remembers not too long ago, 1 STG = BFr 40, which today is equal to 1 Euro.

I have posted here before that this is a back door way of cooling down the housing market in the UK without anyone suspecting. Hence, if the English join the Euro today, they would have effectively experienced a 20% fall in the housing market. I sold my flat in London in December 2002 and if I had the same monies today, I would be a few kilos of yellow lighter.

Finally, I believe the English will join, but it will need the following 3 things:

1. Political will
2. Euro/STG parity
3. WTC type event to encourage the people to join, and to assist Tony in preaching that Europe can bail us out in these 'dreadful' times.

ZhishengGandulf's Champion Canines#1025735/9/03; 03:48:22

I notice Spot and Spike have woken up and climbed about 85 cents. How can they stay healthy when you exercise them nearly 24 hours a day?

Or did you send them to canine retreat to learn to practice "transcendental levitation" in their sleep?

Belgian@ WAC#1025745/9/03; 04:18:01

Yes, I do remember sterling at 120 Bf (former imperial exch.r.) and 40 Bf (1 ecu at that time).
Old Europ (I start to like this adjective) is running out of patience with the UK and the Tony-clan ! If the UK doesn't wish to join EMU...don't expect the euro and Euroland to be (remain) accodomotive.

Following to MK's post last night...the € and the $ are going to try to revive (hummm) the economy with a currency-trick !!!-??? Shall we have to put *everything* upside down ? Monetary magic to alter economic flows ? IMO, pure cosmetics and most probably another act of desperation.
Fabricating "profitability" with currency-jugling ?

I'll stick to my old (whoeps, old again) diagnosis of general "saturation". An economical death lock.

Question : Gold producing currencies (rising rand-Aus$-Can$)
take away the remaining profitability of goldmining. Is this another subtle way to lead one to PHYSICAL GOLD, away from papergold ?

WAC (Wide Awake Club)Euro/EMU#1025755/9/03; 04:34:07

I don't know if anyone remembers, but The Bank of England made a contribution of 75M pounds to EMU at startup. I could not understand at the time why make such a contribution if you do not intend to join. Was is it just some kind of withholding fee to keep the option open to join the Euro at a later date?
When you are used to been the Chief Decisionmaker, it is difficult to now have to share that position with others.

Socrates964WAC#1025765/9/03; 04:39:29

Your analysis sounds suspiciously like another '5 tests':

1. WTC style attack - based on the exploits of the IRA in the 80s and 90s (they did some pretty serious damage to a whole block of Bishopsgate in the early 90s), I don't think terrorism shifts the political mood of the UK in the same way as it does the US. Nor is it a political tool given that the balance of power in the UK is pretty well defined. Hence it is not politically beneficial in the way it was in the US

2. Political will - I think the key point is that the US is driving the UK's foreign policy agenda. I only see a shift in the event of a change in occupant at the White House - so you may have a point, but we'll have to wait until Dec 2004 to find out.

3. Euro/STG parity - hmmmm...granted the Oil is running out, which should exacerbate the UK's BoP problems over time. To me, though, parity seems to entail extremely expansive monetary policy (i.e. benign neglect is not enough). I won't say that this is impossible, since we've seen Blair's mentors shift the switch in his back from 'What do the opinion polls say?' mode to 'God will be my judge', so Brown's switch may be shifted from 'Fiscal Prrrudence and Prrobity' to '40 crredit carrds is nae enough, mon' mode. Evidently, this is a bad idea and will keep the property market on the boil, but since politicians seem to be addicted to dreadful economic policy ideas, it remains a possibility. FOA/A made the point that in the event of a rise in the oil price, the Euro would have to cut loose from the Dollar in order for the Euroeconomy to survive. The same goes for Britain. It thus seems to me that this kind of UK policy shift could only occur in the event of a stable to falling oil price. I wouldn't bet on the US' ability to hold the price down any time soon.

It thus seems to me that your condition for getting a seat at top table is for the UK to trash its own economy. Now look at it from the European point of view. I've made the point that the way to really stiff the Euro economy is to drive up the Euro to eye-watering levels. So let's assume that it goes there - why would the French and the Germans want the UK to come in at the top? - it would only provide an even greater incentive to use the Euro as a reserve currency and prolong their agony.

To me it looks like a rerun of EU membership. The sensible thing was for the UK to join in the 1950s when it was a strong economy and was able to influence the policy debate. As it was, it took until 1973 to join, and then not on its own terms - and we have been grumbling ever since. By this token, the UK will be joining some time after 2015 after the Euro has marched to the top of the hill and marched all the way down again, and will probably get the spare table next to the bathroom.

BelgianQuestion#1025775/9/03; 05:19:10

Could it be that the present $-€ altering exchange rate is a speedening up of the transitional process from and "old" dollar-system to a "new" euro-standard ? FED and ECB, ivory towers, agreeing on this, above the politicians heads (M.K. post)(FOA's theory) ?

FOA msg#127 (10/26/01) Comments on comments:

Snippit : The Euroland Germans, and the ECB studied our (US)ways for a long time and now fully understand how to attrackt other nations into a fair game. The euro will become a "world standard" more so than a reserve because they (Euroland) want it to be a fair currency that's accepted for its value. For the euro to gain American financial acceptability later, it will do so because it will be the "last man" standing when this inflation storm resides.

There will be no political exposure, forcing them (Euroland CBs) to settle in Physical (Gold for big dollar gold shorts) delivery...
(Portugal, comes here to my mind...?)

There is simply no way that China will let them (Japan) into the euro-house...
(France's present rapprochements to China...?)

Those who are covering their dollars with paper-gold-insurances...will NOT be paid in Gold when the dollar-house burns down. We just have to agree on "what" is a burning dollar ! At present, the dollar (dollar-system) is heating up. More invitations for dollar/covering-insurance are distributed...
Reread FOA and gain more understanding as to decode the present events.

BelgianCentral Bank of Russia#1025785/9/03; 05:35:54

Oleg Vyugin : Gold should account for a minimum of 10% (387 t) of the CB's combined foreign exchange reserves and that basqically we (CBR) are satisfied with the amount of Gold we have now.

Ready for the euro-Gold standard...!?

WaveriderHeads up Rich#1025795/9/03; 07:02:12

I see next door @ K that the 2 month silver lease rates took a big jump today - 1.16% if it's not a technical error.

Thanks Gandalf - I haven't had an opportunity yet to study P&F in detail.

Great forum yesterday - thanks for the timely and critical commentary MK, the haiku Mikal, the DMR, and educational discussion All! A Golden Day to everyone!


Socrates964Belgian#1025805/9/03; 08:17:59

Agree, China is a key point. A while back, I posted that Japan's game is to export like crazy to a partner and then plough all the proceeds back into that country's financial markets so that its own currency does not appreciate.

It has been doing this successfully with the US, but the game is in jeopardy as the US' ability to absorb Japanese goods looks set to decline.

If the rest of the world refuses to sign on for this Japanese quid-pro-quo, then the Japs are essentially locked into a fatal embrace with the US - making them the buyer of dollars of the last resort - which is no bad thing from the point of view of a Chinese central banker full of dollars that he's desperate to get rid of. is too conspiratorial for my taste (with his theory that China is locked in a battle with the NWO and is using SARS to destroy globalisation), but Ehrlich makes the interesting point that the Chinese are going decidedly slow on opening their internal capital markets to foreigners (for which read Japanese), so there may well be something to the above.

TownCrierFederal Reserve reports M-3 money supply rises $55.4 billion on the week#1025815/9/03; 09:19:10

In the latest reporting period by the Federal Reserve, the U.S. money supply grew over the previous week. Not too shabby for a so-called slow economy, eh? Almost seems like helicopter money.

M-1 was up $5.9 billion, to $1,246.3 billion

M-2 was up $44.5 billion, to $5,953.8 billion

M-3 was up $55.4 billion, to $8,644.8 billion

see url for additional statistical data


USAGOLD / Centennial Precious Metals, Inc.Put a Solid Foundation Under Your Portfolio#1025825/9/03; 10:02:36

Swiss Gold Francs

Get the Legendary SECURITY of a Swiss Account...

...Delivered to Your Door.

Call USAGOLD - Centennial for Arrangements

steadyanother bank bites the dust < paper is smoldring>#1025835/9/03; 10:07:41

OCC Closes The First National Bank of Blanchardville and Appoints FDIC Receiver

WASHINGTON - The First National Bank of Blanchardville, Blanchardville, Wisconsin, was closed today by the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation was appointed receiver.

The OCC acted after finding that the Bank, which had assets of approximately $29 million, was unlikely to be able to pay its obligations or meet depositor demands.

The FDIC will release information about the resolution of the Bank.

adminMKs Commentary & Review #1025845/9/03; 10:13:18


Two new links: Greenspan Hits Back at Buffett Warning & Guru's Still Going for Gold

New QuickNotes

JemeJordanPBS Front Line - The Wall Street Fix #1025855/9/03; 11:08:00

The Wall Street Fix – This was an awesome PBS/Front Line special that was on TV last night, check your local listings

If you think that your BankBrokerageAnalyst has your best interest at hart?

Think again!

Yet Another good reason to buy & Store Gold

Gandalf the WhiteTOWNIE -- Thanks for the M-3 UPDATE -- It goes well with Sec Snow's pronouncement!!#1025865/9/03; 11:30:25

TownCrier (5/9/03; 09:19:10MT - msg#: 102581)
Federal Reserve reports M-3 money supply rises $55.4 billion on the week
I just happened to see a news flash on CNBC (sound turned off) -- which said "USA Treas Sec. Snowman sees no indication of DEFLATION" !!!

My THOUGHT ---HOW can Treas Sec. Snowman say "he sees no indication of DEFLATION" !!!
My conclusion ---
SIMPLE !! HE KNOWS THAT WE shall have either STAGFLATION or INFLATION, not Deflation !! JUST Generate more money supply !!!!

Black BladeBye-Bye Strong Dollar Policy #1025875/9/03; 11:42:02;jsessionid=VPH4APCT2BSBACRBAEZSFFA?type=businessNews&storyID=2714093


NEW YORK (Reuters) - Sayonara, strong-dollar policy. And if you ask most market observers, Godspeed. One recession, two wars and four U.S. Treasury secretaries after it was instituted under the Clinton Administration, the U.S. currency's armor plating appears to have ruptured. The dollar has tumbled to 4-year lows against a broadly stronger euro and the Swiss franc while barely staying afloat against other major currencies.

An interesting aspect of the dollar's swift reversal is the seeming nonchalance shown by the Bush Administration, analysts say. As a result, traders pay little heed whenever U.S. officials swear fealty to the strong dollar policy. 'The strong-dollar policy seems like a strong-dollar policy, 'nudge-nudge, wink-wink," quipped David Mozina, director of global foreign exchange research at Bank of America in New York. However, 'from a policy perspective and looking at the imbalances in the U.S., it's welcomed.' In the market's view, the policy created by former Treasury Secretary Robert Rubin and ostensibly continued by his successors ceased to exist the moment George W. Bush moved into the Oval Office.

'I think it is dead. If it's not dead, it's crippled,' said Lara Rhame, U.S. economist at Brown Brothers Harriman in New York. 'Ever since the Bush Administration came into office, they've been giving their tacit acceptance of a weaker dollar.' 'All the Treasury is looking for at this point is a controlled dollar decline,' she said. 'At the margin it's positive for the economy and ... it's sort of a cost-free way for the administration to give small relief to manufacturers and exporters, and help on price deflation.'

Meanwhile, Japan is waging an uphill battle to keep the yen weak against the dollar. Although the euro has soared to a 4-year high against the Japanese currency, the yen climbed on Wednesday to a 10-month high versus the dollar.

Black Blade: The "strong dollar policy" is dead and as I have said, even though the administration publicly states that they support the "strong dollar", it's now an open secret that they really don't. A "strong dollar policy" in the current economic environment is absurd. With record high current account and budget deficits the dollar must trend lower.

Belgian@Socrates#1025885/9/03; 11:59:26

Point about China is this growing dragon's ambitions to become a formidable power player on the globe. A continent where the sun never sets.
What is the most important for us, is that China will chose the euro side when it comes to Gold's function outside the money system. Physical Gold as the only defense against a failing dollar-system. And the euro (standard) as the next in line, trading currency.
With the dollar in the dollar-system for as long as possible...with less dollar-trade within a new euro-system, if necessary. Let's remain pragmatic.

We await Evian and watch how China will behave as the G8(9) newcomer.

JemeJordanFinancial weapons of mass destruction#1025895/9/03; 12:31:50

Greenspan hits back at Buffett warnings
Cometoseinflation /volatility#1025905/9/03; 12:40:36

grains having an interesting day
july wheat up 8%
I smell smoke

AristotleKnow your limitations#1025925/9/03; 13:20:55

How many more people wanna step forward and demonstrate their sad confusion -- treating Goldish proxies (e.g., mining stocks) as if they were the same as Metal?

Thanks for the insights into human behavior, mister2002. Looks to me like you're near to throwing the Gold baby out with the miner bathwater. Ohhhh weeeeellllllll...

When you look back in time don't say nobody around here never lifted a finger to try to set you right.

Gold. Get you some. --- Aristotle

a nation of onejust a question#1025935/9/03; 13:42:10

From previous link: "In a speech yesterday Mr Greenspan, the 77-year-old chairman of the US Federal Reserve, acknowledged the fears, but noted: "Even the largest corporate defaults in history - WorldCom and Enron - and the largest sovereign default in history - Argentina - have not significantly impaired the capital of any major financial intermediary. The benefits of derivatives, in my judgment, have far exceeded the costs.""

*** Let us have Mr. Greenspan tell us what those benefits are. I notice he doesn't specify them. Is this because they are benefits only in his own judgement, and not in ours?

Black BladeTrapped Like Japan?#1025945/9/03; 14:08:09


There are some disturbing similarities between what the Japanese economy went through to get to its current sorry state and what the U.S. economy is going through now. In the 1980s, Japan had a great big investment bubble. In 1990s the United States got a bubble of its own. The popping of the Japanese bubble led to stagnation in Japan's economy. Ditto for what happened after the U.S. bubble busted. Japan's central bank (eventually) cut rates to the quick, but the Japanese economy couldn't get back on its feet. Since the beginning of 2001 the Federal Reserve has cut its fed funds target rate 11 times, bringing it from 6.5 percent to 1.25 percent. And yet, here we are.

But deflation didn't come until rather late in the game for Japan. For most of the 1990s, the problem in Japan was something else: a liquidity trap. Here's how it works: For some reason (like a busted bubble) everyone gets tremendously worried about the future. The central bank cuts rates, the government passes fiscal stimulus measures, but consumers and businesses are so jittery that they just stuff all that money into the proverbial mattress. Or at least in Japan, a nation of savers, they stuff it into their mattress. In the United States, a nation of debtors, the money would go (and it seems to be going) to "balance sheet repair." Now both saving and getting oneself out of hock are noble things, but when everyone does it at once, it does the economy no good at all. It's what the economist John Maynard Keynes called "the paradox of thrift."

How do you fix a liquidity trap? You print money until inflation is introduced to the economy. For savers, inflation means that the money they have in the bank today will be worth less tomorrow -- so they spend it. For debtors, today's debts will not cost them as much tomorrow, so they get less worried about their balance sheets and beginning to spend as well.

Black Blade: Oh yeah, "the paradox of thrift." – that's rich! However, I agree that the Fed will give the go ahead to print like there's no tomorrow. Ben Bernanke and other Fed governors have been laying the groundwork by preparing the public for this eventuality with recent comments about firing up the printing presses. We are definitely in for some "interesting times".

a nation of onea translation#1025955/9/03; 14:09:21

'I do not wish to suggest ... that I am entirely sanguine with respect to the risks
associated with derivatives,' Greenspan told a conference organized by the Chicago Fed.

Everyday English: "I don't want people to think I'm happy about the risks created by

Clearer English [choose one]: 1) "I am not happy about derivative risk," or, 2) "I am
happy about it, but I don't want everybody to know it."

As you or I would say it: "I don't like the consequences of derivatives."

As Greenspan would say it to his dog, when no one else is listening: "Derivatives are
great. The risk is just collateral damage. I wouldn't say that publicly though."

There should be no question that this interpretation of his statement could be a correct.

Linguistically it is entirely consistent.

It is also consistent with the behavior of the FED.

Black BladeDollar's Descent Has Currency Watchers on Edge #1025965/9/03; 14:23:06


A long slide by the dollar has turned into a rout in recent days, providing a new competitive edge to American manufacturers but arousing worries about potential instability in the global financial system. As is always the case for big currency moves, the dollar's weakness has both benefits and costs. It helps American industry compete with foreign firms by making U.S.-made goods cheaper on world markets, and that should eventually help shrink the massive U.S. trade deficit. But a tumble in the dollar risks getting out of hand by prompting foreign investors to dump their holdings of U.S. stocks and bonds, which could drive interest rates up and choke off U.S. economic growth. "If it falls a moderate amount, that's a welcome correction," said Kenneth Rogoff, the chief economist at the International Monetary Fund, who has long viewed the dollar as overvalued because of the size of the trade gap. "But if it falls too precipitously, that could certainly create problems." Of particular concern, he said, is that a sudden drop in the dollar's value "might lay bare weaknesses in the financial system" by inflicting severe losses on major market players that have engaged in complex trades and hedging strategies, some of which may depend on a stronger or more stable greenback.

The reasons for the dollar's fall are clear: As a country that imports far more than it exports, the United States needs huge amounts of investment from abroad to balance the scales -- roughly $500 billion a year. But persuading investors to put their funds in the United States has become increasingly difficult because yields in many overseas markets are higher than they are in this country. The result, a shift from U.S. securities to foreign ones, lowers the value of the dollar. That has become much more pronounced in recent days, in part because markets have perceived that the Federal Reserve is more likely to lower interest rates in coming months than other central banks, the European Central Bank in particular.

Black Blade: Ah yes, the tumbling dollar is a threat to "complex trades and hedging strategies" or derivatives (also referred to as "weapons of mass financial destruction"). As I said before, the Fed has little choice now. The Fed may cut rates but with only 125 basis points left the Fed is about out of ammo. That leaves firing up the "printing press". Talk about being caught "between a rock and a hard place".

Black BladeWhere in the world is Joe Investor? #1025975/9/03; 14:47:10

While institutions have begun wading into stocks, the individual investor is stuck in the sand.


Many investors are still frightened and they want proof that this rally's not a fluke. There's evidence some investors have returned to equities, including rising trading volume and decreasing levels of cash flowing out of mutual funds. But, for the most part, retail investors remain frozen. While there is evidence of an increase in small-time investing, it's going to take a lot more than the end of war and a quarter of generally better-than-expected earnings to bring everyone back, traders said. For the average investor, only evidence of increasing business and consumer spending over time, coupled with signs of growing consumer confidence and an improving labor market, will bring enticement to get back into stocks. Investors will have to start getting more confidence that an economic recovery has taken hold," said John Forelli, senior vice president and portfolio manager at Independence Investments. "The chances of this happening are improving, but that doesn't mean that it's happening right now." Forelli and other market watchers said small investors will see hope when two key events occur -- jobless claims hold below 400,000 week after week, and monthly manufacturing activity numbers start rising above their key 50 level. Neither has happened since February. Whenever individual investors do come back, their level of involvement in stocks may never fully recover, experts said, because apart from the pain of market losses in the past three years, much trust in Corporate America has been lost in the post-Enron era.

Black Blade: I have pointed this out before. The major moves are institutional players reallocating cash positions and some short-covering by funds while the small fry are sitting on the sidelines. Meanwhile the Wall Street pimps and the carnival barkers on the CNBC infomercial tout "stocks are cheap" – yeah right, at over 30 times earnings on average with little growth improvement expected. We should expect Wall Street to cast a few more "lures" to snag some hapless small fry into the market, but tapped out consumers are more concerned about jobs and day to day expenses in a deteriorating economy.

GoldiloxGreeenspan vs. Buffett#1025985/9/03; 15:00:25

OK, who am I going to believe, the one who has made billions in smart business moves, or the one who has cost the economy trillions in value due to reactionary moves?
Black BladeWhat deflation? #1025995/9/03; 15:04:11§ion=BUSINESS&subsection=MONEY_SMARTS&year=2003&month=5&day=9


If the Federal Reserve is so concerned about deflation, why are so many of the everyday costs of life on the rise? Postage stamps, sporting events, auto insurance, real estate taxes and even haircuts have been increasing in price in recent years at a faster pace than the official inflation rate. The government's Consumer Price Index has increased an average of 2.5 percent annually over the past three years. In the same period, by some measures, cable-TV costs are up 9.1 percent annually, auto insurance is up 7.6 percent a year and even movie popcorn is up more than 3 percent. Health-care costs, college tuition and the price of heating your home have been rising at far faster rates - in the case of natural gas, around 21.4 percent a year. Richard Yamarone, chief economist at Argus Research Corp. in New York, "No matter where you go, no matter who you talk to, prices are on the rise."

Even Pat Jackman, economist at the Bureau of Labor Statistics, which calculates the official inflation rate, says the widely reported numbers understate the rising cost of life from one year to the next. The fact is, he says, "more money is coming out of your pocket." The discrepancy comes from the way the government calculates inflation. In compiling its Consumer Price Index, the BLS relies on roughly 80,000 price quotes that flow into its offices every month. The bureau smoothes and adjust those numbers in varying ways to account for improvements in quality, among other things. For example, the bureau looks at the price of a car today and the price of a similar version of that car in the past. If the car now costs more but comes with a lot of extra features, the bureau may consider that just a minor price increase or even a price reduction. That's because the consumer got a higher-quality product for roughly the same cost. But the reality, of course, is that you're still paying more money for a car than you used to. "You had to pay more because you can't buy exactly what you did last time," says Jackman. "It's forced substitution." The disconnect becomes even bigger when you look at the Federal Reserve's preferred measure of inflation, the personal consumption expenditures index. It's running at just 1 percent a year on an annualized basis.

Black Blade: Yeah, the BLS "smoothing" of data (hedonic deflators, seasonality, "imputed income", etc.) is a cruel joke perpetrated on the average Joe. I find it amazing that the quoted BLS economist is apparently coming clean about the "illusion" and statistical data massage. He might soon be on the growing "Bone Pile" for those remarks. It does not pay to "pull back the curtain" of the Great Hall" to expose the wizards pulling switches and punching buttons that manipulate the smoke and mirrors.

Buongiorno!Black Blade-re: inflation#1026005/9/03; 16:10:51

Concurr with your comments, esp. inflation in things we have no control over, such as health care. Premiums, co-pay, all going up. A major health issue could bankrupt someone without coverage.

We may be facing "situational inflation", with things such as housing, health care, education, energy, and entertainment going up at four or more times the posted rate of inflation. If we have a home ('bout paid for), good health, cars paid for, no one to educate, stay energy effecient, and do not need too many evenings out--perhaps inflation is not so bad. "Thor and Oden" help you though, if you seek housing, have health issues, kids in college, and want to go out some. "Situational inflation!"

I help advise a city on its budget and years ago, my study revealed the cost of items the city must buy was increasing about 8-12% per year. (Lots of energy-related and health costs just must be paid, and a city is perhaps more vulnerable than the average family.) They were not happy to hear my ideas, but the predicted deficits are just what did happen, here and elsewhere.

Consider also, "inflation through obsolescence" when we are forced to buy new computers, not because the old ones do not work, but because they will not work with the new software. Computers last about four years, then must be replaced. That would be about 25% per year to stay up with the times. City fathers were not happy to hear that, either. Ah well, it is still a great life!


Black BladeFrom The Mailbag#1026015/9/03; 16:24:15

A couple of nice observations that popped into my email courtesy of Eric Fry and Bill Bonner at Daily Reckoning:

Eric Fry:

A whopping 525,000 jobs have been lost in the past three months and the economy continues to shed jobs at a rapid pace. Although the number of initial claims for state
unemployment benefits fell by 28,000 to 425,000 in the most recent week, the average number of weekly first-time claims over the past four weeks hit a fresh one-year high of 446,000 in the week ending May 3.

More worrisome however, is the fact that the average number of Americans who collected state benefits over the past four weeks rose to 3.6 million, the most in six
months. "Of the 8.8 million jobless workers in America, almost 2 million have been out of work for half a year or longer," the Washington Post reports, "the highest number
in two decades, according to the Bureau of Labor Statistics.

"Blue-collar jobs in the manufacturing sector...continue to be hit particularly hard...There were 817 mass layoffs of 50 workers or more in January, 427 in February and 385 in March, according to the Bureau of Labor Statistics. Overall, about 2.7 million jobs have been lost in mass layoffs since January 2002, with about one-third in the manufacturing sectors."

As we've noted previously, unemployed consumers don't do a whole lot of consuming. They tend not to buy TVs or cars or houses, or even rounds of drinks at the local bar. In
fact, they tend not to buy much of anything. Meanwhile, most fully employed folks aren't spending with their habitual gusto. Perhaps they, too, are feeling the pinch of a sluggish economy or the squeeze of too much debt.

"We're not really laying a very strong foundation for an economic recovery when it's on the backs of consumers who are either going into debt through refinancing mortgages, or taking equity out of their homes, or whose net worth has been declining with the stock market," says Comstock Partners' Charles Minter. "Typically, to have a good, sustained recovery you need investment and hiring by corporations."

Bill Bonner:

"The Fed is doing everything it can to support this market," said our old friend Jim Rogers. We had him on the phone yesterday to talk about his new book...and our own new book. What we spoke about was inflation. "I just spent three years traveling around the world," he continued in his Alabama voice. "You can't tell me there isn't any inflation. Everything I buy has gone up in price. And it's going to go up a lot more when all this liquidity the Fed is putting in the system in order to support the bond market and the stock market finally reach consumer prices."

Black Blade: And so it goes.

Off to the gym!

R PowellThis week's COT#1026025/9/03; 18:23:42

I've had my suspicions about POS getting much higher than the 480 level on this upturn. The Funds have added long positions while offsetting over 6,000 short ones. The Commercials took the other side so now the Funds are extremely long while the Commercials are big time short. I'm encouraged once again that the Small specs did not sell into this latest rally. They did not panic into selling at the 430-440 level nor have they sold for profit taking on the way up to the present 478-480 level. Who are these guys? Whoever they are, they're hanging in hard. I'd like to see them accumulate a greater percentage of the open interest. One of these days, Alice, one of these days but maybe not quite yet.

The gold market numbers are similar with the Funds going long and the Commercials accomodating them by selling. The Small specs are also still long but have covered some short futures on this latest move higher. Just one man's opinion but I've a feeling that the fundamental forces encouraging (forcing?) a higher POG and the beginnings of investment speculative money entering the gold market on the long side will (may have already started to) overpower the usual see-saw technical trading between the Funds and the Commercials. Perhaps all that's needed is confirmation of the underlying economic problems. A resumption of the equities downtrend might be the last straw and would be the most blatant signal to even those wearing rose colored glasses, those least likely to recognise the baby gold bull.

If Spot and Spike have enough energy on this upturn to panic the 70,000 Commercial short futures into covering (by BUYING back the shorts), then Katie bar the door. I'm not suggesting a "to da moon" happening but perhaps 70,000 shorts provides the potential for some fireworks. Are you ready?

Friday again and the last one of this year before Mother's's see...ah yes...
Happy (Mother's day) Weekend !!!

R PowellBooks?#1026035/9/03; 18:47:32

This from Bill Bonner in Black Blade's last post.....

"The Fed is doing everything it can to support this market," said our old friend Jim Rogers. We had him on the phone yesterday to talk about his new book...and our own new book. What we spoke about was inflation."

I've a $40. bookstore giftcertificate from my son that needs spending before the dollars lose any more purchasing power. Does anyone know the names of Jim Roger's and/or Bill Bonner's new books?

Dollar Bill(No Subject)#1026045/9/03; 19:05:04

Ernst Welteke, president of the German Bundesbank and an ECB board member, said the strong euro is not harming German competitiveness. "In our opinion, this is not the case," he said on a visit to Munich. He added: "A quick end to the economic stagnation is not in sight."

The strong euro is not helping the euro zone's exporters and there was more evidence of the continuing economic difficulties. A monthly survey of the region's purchasing managers found that the business activity index was unchanged at 47.7 in April. Any number below 50 indicates current orders are falling.

The iron stance of the ECB, combined with government borrowing restrictions, has provoked fears that the euro zone, especially Germany, could succumb to deflation.

The euro zone has one of the toughest monetary policies in the world and high real interest rates. Stephen Jen, an analyst at Morgan Stanley, said this has encouraged funds from Japan, where interest rates are close to zero, to pour into European government bonds.

mikalObserving raw inputs- materials, commodities and energy#1026055/9/03; 20:38:32

3:10pm 05/09/03 Crude up 8%, natural gas up 10% for the weekBy Myra P. Saefong
June crude closed at $27.72 a barrel, up 74 cents on the session to rake in a total gain of $2 a barrel for the week amid growing concerns about the possibility of another OPEC output cut and an unexpected fall in domestic crude stocks. June unleaded gasoline closed up 2.55 cents a gallon, at 83.39 cents and June heating oil rose 0.92 cent to close at 91.89 cents a gallon. June natural gas also climbed by 3.4 cents to close at $5.806 per million British thermal units -- up 10 percent for the week.

mikal"Economics" in the Central School District #1026065/9/03; 20:52:05

By: Ted Lang
This once great nation started its journey without any real government oversight. The government of King George III in England was far removed from the day-to-day routines of the American colonists. The piddling taxes imposed by England were downright laughable when compared to today.
Our freedom was far greater under King George than President George. The American colonies fought for independence driven by the rage of exclusion from government processes. Correctly interpreted as minor trends in taxation indicative of ever-expanding and increasingly burdensome taxes yet to come, "representation" was the panacea for those being taxed. Being viewed as only cash cows angered the colonists; but at no time did our King's taxes ever exceed even two percent of earnings. Compare that to the 50 percent today!
Correctly fearing and anticipating such tyranny at the hands of the artificially created being and monster that is government, our nation began as a limited-government constitutional republic. The intent of our Founders was to make each individual citizen in the population superior to the central government. And to ensure this hierarchy of authority, the anti-Federalists clearly spelled it out in our Bill of Rights.
But big government liberalism has manipulated us progressively to a nation where the people and its government first became equal partners in the form of democracy, and now to where we are an oligarchic plutocracy - a nation ruled by a few rich men. Columnist Charley Reese once identified these behind-the-scenes rich men as numbering about 7,000 individuals. These "Magnificent Seven" are, for the most part, rich former capitalists like Ted Turner, who unlike him, do not desire coming forward and proclaiming themselves socialists as he has. They embrace socialism for all of us because it is the easiest form of government philosophy that they can control to protect their wealth and power.
These Magnificent Seven thousand behind-the-scenes controllers ride herd over our political processes by giving huge and astonishing amounts of cash to politicians, political campaigns, activist groups, or by the outright control over media outlets to form public opinion. Ted Turner founded CNN, and we all know how pro-socialist and anti-American they are. Billionaire capitalist Andrew McKelvey has spent millions on advertising to advance the continuing control over Americans by their government via a radio ad campaign to abolish firearms ownership, the latter prohibited in any form by the Second Amendment. He can buy politicians like Chuck Schumer such that the Senator can boldly remark: "The Second Amendment is a myth."
McKelvey's "front" is "Americans for Gun Safety," a gun control activist group with no members. How do they compare with the National Rifle Association? They are much, much more powerful than the NRA. They've got McKelvey's billions backing them, whereas the NRA depends on $35 annual membership fees from its four million grass roots constituents. This illustrates the inefficacy of the American people when compared to the rich and powerful.
These controllers, who I refer to as the "Magnificent Seven," continue to pull the strings by purchasing politicians and manipulating public opinion by their control of the mainstream establishment media. Campaign finance reform is, therefore, just so much legalistic fraud and bunk. So is the judicially activated fraudulent legalistics that offer that the Second Amendment applies to only groups such as the National Guard. That is a double-edged attempt to abolish both the individual citizen's right to firearms as well as to render illegitimate groups of citizens individually armed who are correctly termed as "militia." The latter is the most horrendously frightening concept that can be envisioned by liberals and the Magnificent Seven.
Voting doesn't frighten America's oligarchic, plutocratic Magnificent Seven and their liberal big government "useful idiots." It has no effect. America is a cash business, and America is for sale to the highest bidder. We are less in control of our own government than was ever the case when we were English subjects under King George.
"Published originally at : republication allowed with this notice and hyperlink intact."
Ted Lang is a columnist for the The Patriotist and the Sierra Times. He is a regular columnist for Ether Zone.
Ted Lang can be reached at: This email address is being protected from spambots. You need JavaScript enabled to view it.

21mabry(No Subject)#1026075/9/03; 20:53:22

R.POWELL, DR.Mark Faber has a new book out called asian gold it was excellent.I had to special order it though.Gold Wars by F. Lips is also very good.But I read investment Biker by Rogers it was really good to. I dont know the name of his new book. MR.Puplava is having him on soon.
mikalU.S. Dollar#1026085/9/03; 21:07:09

The US Dollar and Its Loss in Foreign Exchange Value
Thirty-three Year Decline by Michael W. Hodges, Author
Grandfather Economic Report -May 9, 2003 -Excerpt:
I think many scared eyes these days are on the US dollar, now down 26% vs. the Euro past year, also down against many others including 21% vs. Swiss franc. To help place this decline in historic perspective, look at my long term trend chart which comes from my chapter called 'Grandfather Foreign Exchange Report'.
Scary times, regardless of the impact of U.S. stock, bond, real estate or commodity markets. In the end most Americans think of their assets in terms of dollars, yet few recognize that a huge international depreciation (write-down) of those assets....
All of this leaves the too few US savers (including a lot of seniors) vulnerable and devastated, wondering who represents them and why are powers-to-be making war on savers instead of on debtors?
© 2003 Michael W. Hodges
Web note: The above editorial is a recent summary of an updated chapter from Michael Hodges series, Grandfather Economic Report. Read the full article..."

Black BladeJim Rogers - Book#1026095/9/03; 21:13:54

Jim Rogers new book is called "Adventure Capitalist". I haven't read it so I don't know what is covered but you could probably check out a review at one of the online book retailers to get an idea.

- Black Blade

Black BladeMarket Wrap Up – Hartman#1026105/9/03; 21:23:32


Spin of the Week

We could spend lots of time taking the press release apart piece by piece, but let's focus on one particular sentence in their statement. This one sentence has got to take the prize for the "Spin of the Week." In the third paragraph they state, "In contrast, over the same period, the probability of an unwelcome substantial fall in inflation, though minor, exceeds that of a pickup in inflation from its already low level."

First of all, let's be sure that the time frame that they are referring to is, "The next few quarters" as noted in the preceding sentence. For conversation's sake we can safely say sometime in the next nine months. The next key to the sentence is the word "probability" along with some clarification to the degree of probability stated as "though minor." This should be translated as more than a 50% chance (probable) though minor (let's call that less than a 70% chance) that we will see, "An unwelcome substantial fall in inflation."

What is Inflation? With all of the disinformation out there, most people don't even know how to define inflation. All these years we have been spoon fed the notion that an increase in inflation is a bad thing. Most people think of inflation as having to pay more money for the things we need and use. To be more specific, it is usually referred to as consumer inflation. That is why inflation is usually measured by the CPI (Consumer Price Index) and the PPI (Producer Price Index). We usually hear that low inflation is a good thing. So how can the Fed say that it will be an "unwelcome" large decline in inflation? Also note that they could have said "deflation" instead of a "fall in inflation." Funny use of words.

Wouldn't you welcome a decline in price for school tuition, homeowners insurance, medical and prescription costs, lower gas prices, more affordable gas and electric bills, knock 20% off your weekly grocery bill, etc.? So how can it be considered unwelcome? I'll tell ya’ how. It's called ASSET DEFLATION. What are the biggest assets Americans hold? I would have to say they are stocks, bonds (meaning debt instruments of all kinds) and real estate. That is the only way the deflation would be considered unwelcome.

Black Blade: That sounds about right.

mikalNY stock exchange blues#1026115/9/03; 22:01:42

NYSE faces scrutiny
The exchange is a non-profit organization that is not bound by the same rules as public companies.
May 9, 2003: 7:18 PM EDT
NEW YORK (Reuters) - The New York Stock Exchange drew wide praise last June by unveiling a sweeping set of rule changes aimed at overhauling governance at its listed companies as corporate scandals rattled investors and the markets. Nearly a year later, corporate governance at the NYSE remains under question following last week's $1.4 billion settlement between regulators and big Wall Street firms, as well as a number of missteps and revelations by the exchange.....
Some say the NYSE's structure gives too much power to members, whose interests are not necessarily aligned with investors. Others contend the structure has served the NYSE well and gives it discretion in how to run its business.
A membership at the NYSE is often referred to as owning a "seat" at the exchange. There are 1,366 seats and they give their owners, who are typically brokers and specialists, the right to trade shares on the floor. Members, who can lease their seats to others, own the NYSE and hold four seats on the 27-person NYSE board.
"It's very much a country club atmosphere down there," said one industry source of the NYSE. "Lease rates are determined by how much profit potential there is to owning or leasing a seat. The more pro-investor-friendly the rules are, the less profitable the seat ownership is going to be." Being a membership organization "makes the internal governance a little bit tricky," said James Angel, associate professor of finance at Georgetown University's McDonough School of Business. Members will use their influence to maximize their ability to make money trading at the exchange, he said, and that may not be in the exchange's best interest..."

goldquestPatriot Act Banking and Financial Spying#1026125/9/03; 22:11:14

Coming soon to your neighborhood!
goldquestOh Yes#1026135/9/03; 22:17:13

Commodities are covered also!
TopazMr Bond says No to Snow.#1026145/10/03; 05:05:12

Following on from the FOMC's "too gloomy" statement on the economy which saw a marked decline in Bond Yields, the rosier picture painted later in the week by TreasSec Snow was all but shugged off in the Bond arena.
SM's rallied across the board...but Bonds barely moved. This doesn't bode well for next week imo as ATL Yields are again on the anticipate a repeat of the Japanese scenario where rates meander down to Zero (as several respected commentators have alluded to recently) is a dangerous gambit for I believe we are thereabouts (Yields nett-Zero) already...thanks to Mr G's beloved derivs.

Let's watch next week VERY closely!

silvercollectorBelgium#10261505/10/03; 05:35:50

Good day Sir.

At some point last week you had mentioned tracing the 'dollar index' back to 1986. Do you know where one might get this information?


Nomadsome tidbiits#10261605/10/03; 07:45:47

Greetings Everyone Again !

UNEMPLOYMENT ... in view of the rising unemployment I would like to point out that a VERY large group of individuals (2 to 3 million now) are also left out of those figures ... anyone wanna guess who they might be ?


the USA (land of the free, home of the 'enemy combatant') now has the HIGHEST PERCENTAGE OF IT'S CITIZENS BEHIND BARS THAN ANY CIVILIZATION IN HUMAN HISTORY.

SARS ... when I lived in Shanghai a few years ago, there was a statistic that, on average, 4 people were killed EACH DAY in that city from traffic accidents. SARS, of course is no where as near as dangerous. it just seems to be perceived that way.

USAGOLD ... i have to thank the people of this forum ... over the last 5 years that I have been here, I have found the individuals here the BEST source of world-wide information regarding all aspects of current society/world situation. every once in awhile i like to pop in here and add my 2 cents worth too. and of course I sincerely want to thank our kind host (especially since I have the first silver coin I ever owned sitting on a shelf, and one of the few things I ever 'won' in my whole life :)

911/IRAQ/PREDICTING THE FUTURE ... I still think my biggest contribution here has been recommending a book called 'The Fourth Turning' (see link).

written by William Strauss and Neil Howe, 4T attempts to predict the future as far ahead as 2069, based on a cyclical pattern they traced back as far as 1584. Enthusiasts for their system, and there are many, believe that their 1997 book anticipated the 9/11 attacks. The book predicted that America would suffer a major 'turning point' at or about the year 2003, triggered by an event such a group of terrorists blowing up an aircraft. They did not expect America to react well to the crisis, instead they advised Americans to prepare for twenty years of unyielding responses and further emergencies culminating in a final 'CRISIS' on or about 2020.

I personally have made a number of preparations in my own life in response to this book, gold and silver of course being part of my financial response to the current situation.

best of luck to everyone in their responses to the events of the first 2 decades of the new century.


Nomad(No Subject)#10261705/10/03; 08:07:18

... one more tidbit ...

from Black Blade's quote yesterday ... 'A long slide by the dollar has turned into a rout in recent days, providing a new competitive edge to American manufacturers but arousing worries about potential instability in the global financial system. It helps American industry compete with foreign firms by making U.S.-made goods cheaper on world markets, and that should eventually help shrink the massive U.S. trade deficit. '

the problem with the statement above is well illustrated within my own family circle. my brother-in-law is about to get laid off after more than 20 years at a manufacturing job that he has held for most of his adult life. his company has gone from thousands of workers down to just 3, which is a testament to his abilities, since he is one of the three remaining :) but the double whammy of the economy combined with the fact that better than 80 percent of manufacuring jobs have moved overseas, especially to China, is mostly to blame for his coming unemplyment problems.

so ... if there is no manufacturing left in the USA, how does a weak dollar help ? it doesn't. and if our primary competition is China, which ties its currency (the yuan or RMB) directly to the dollar (8.227 to 1 fixed) how does the weaker currency help. it doesn't.

in the past this WAS a good strategy to revitalize a nation's export base, but the USA HAS NO MANUFACTURING any more. don't believe me ? name one product that you are SURE is completely produced in the USA ? not clothing, not machine tools, not automobiles, not housewares, not computers, not shoes, not not not ... we've pissed it all away and we are going to pay the price, and the sheeple are diverted by the 'Video Games War' playing on the 'Corporate News Network : CNN'


CoBra(too)Interesting Essay on PNAC - #10261805/10/03; 09:08:23

- even if I don't agree with some of its conjectures.

Historically, US foreign policy was certainly not the most sophisticated instrument the country had had to offer. Power politics may seem different, though, again historically it also always carried the seed of ultimate failure.

Global power politics, even carried out in a begnign and maybe humanitarian belief, based on military power alone, despite internal economic structural and debt problems may be envisioned as particularily vicious by the rest of the globe. Biting the bullet in the ME may mean to have to go the whole way! Probably a bite too big to chew.

A scary future scenario, as no-one really can comprehend potential responses to this kind of power politics.

The seignorage, or hegemony of the US Dollar is already questioned and there may, probably, be no respite in the green back's further erosion. The €'s appreciation of some 30% in such a short time frame, as well as other currencies like rhe CDN., the Aussie and NZ Dollar, to name a few commodity based countries, will eventually have to reciprocate in some way. Competitive devaluations seem to be not too far off.

In this kind of scenario, where fiat currencies, owing their creation to debt only and are found out to having no underlying tangible or intrinsic value the only protection or insurance for wealth, accumulated by hard work will again only be GOLD. The 5.000 year old barbaric relic, which has always fulfilled and proven its role as the sole arbiter of value.

In recognition of MK's brilliant essay a few days ago I'm still waiting to see GOLD move up against all currencies. Though, I'm convinced it will - as this powerful Gold Bull is still in its infancy (...though, I buy my bullion a lot cheaper than a year ago!).

See U - cb2

21mabryCHINA#10261905/10/03; 09:18:43

Strong wealthy countries throught history have alawys imported raw commodities and turned out finished goods. Its what made the British rich and it made the U.S. rich. China is importing huge amounts of raw goods and it will keep increasing. I think we can track Chinas economis strength by following their commodity import statistics. Maybe the Chinese are giving the west a taste on mercantiism.
Wild Haredollar index data#10262005/10/03; 10:14:57


When the conversation about dollar index vs. pog was going on, I grabbed dollar index data from the above link (although I'm not sure what the true source of the data is and i couldn't easily find any other historical data) and the pog table from the WGC site and used the FORECAST function in Excel to see what numbers came up.

Here are some samples from a given DXY what the POG would be.

120 256.04
115 275.18
110 294.31
105 313.45
100 332.59
95 351.73
90 370.87
85 390.01
80 409.15
75 428.29
70 447.43

This was just an exercise for fun not meant to be a meaningful analysis. I also ran the numbers the other way ie, dxy for a given pog (Gold at $1,000 = DXY 11)


PizzMake or Break for the PTB#10262105/10/03; 10:15:13

One thing I'm noticing about rural America. They have patience, but you sure better not lie to them, cause they are a very unforgiving lot.

Over the past month I've noticed a light and day change in moods regarding the administration and the "war". Seems most were expecting relief in the economy, the discovery of WMD, the capture of Saddam, and some real justification for the war. . . seems all were (oil) pipe dreams.

If the second half recovery does not materialize this time Bush is done, and if we get another terrorist attack at home it's going to be lynching time (country mood and talk in the bars).

Two months ago I could not find qualified workers no matter how much I advertised (very localized captive work force). Over the past two weeks I am getting two or three qualified walk in applicants A DAY. Seems small business is hunkering down for the storm ( as I am by laying off middle managers and culling out the dead wood). Over half of my applicants are coming out of government and quasi government positions - grass roots support for our cause coming like a freight train, but still way down the track.

Second leg up in the gold bull underway - just feels like it and the markets seems to confirm. This last wash out in the PM's killed off the weaker gold hands. . .mood on the boards is still pretty skeptical - good sign. . . hang in there.

And if any out there are contiplating getting out of the rat race and heading to the country like I am, all I can say is do it, but make darn sure it's what you want cause so far it's been one of the toughest things I've ever tried to accomplish in my entire life. It's equivalent to trying to unwind a complicated derivatives position, both mentally and pysically with your entire life. . .and without my gold in reserve I honestly do not think I'd be able to make it.

What I have is wealth in the hole so to speak, very comforting in uncertain times whether personal or in the macro sense. . . .could not have done it without a golden light at the end of the tunnel. . .not there yet, but over the hump so to speak (you Pacific Northwesterners know what I mean and living in Lake Chelan can't be all that bad. . )


Wild Hareinfo on 2oz silver bars#10262205/10/03; 10:29:36

I was at a coin shop in Medford, OR this week and bought some 1000 grain .999 silver bars stamped "Wittnauer P.M.G. 1973" that are part of a constitutional series.

One example has the front saying "Freedom of Speech" and the back says "One of the basic liberties ensured by the U.S. bill of rights, the right to free speech is extended to all citizens in this country. Any view, even if unpopular, may be publicly expressed without fear or penalty."

Seeing how the constitution is a fading memory and these may be collector's items I bought the six that he had - The Right to Counsel, Freedom of the Press, The Right to Privacy, Freedom of Religion, The Right to Trial by Jury.

Anyway, i'm curious if anyone knows how many of these were in the complete series. Thanks in advance.

btw - i was in medford to attend Bob Schulz's We the People Congress campaign tour. I highly recommend catching it when it comes to a city near you.

Gandalf the WhiteWELCOME BACK Sir Pizz !! -- The Hobbits missed you !! <;-)#10262305/10/03; 10:30:59

Pizz (05/10/03; 10:15:13MT - msg#: 102621)
Now that you are "settled in" at the big LONG LAKE, give us some more of your time and thoughts on the "Eastside of the Hump" economy !

R Powell Moving while POG rises#10262405/10/03; 10:45:50

Wild Hare: Thanks for the dollar vs. POG numbers. The weaker dollar leading to a higher POG is just one of many factors but it's one of those that many are watching. It has a direct link shown by your numbers but may also turn investment sentiment in favor of gold too. I'd guess that the dollar index below 90 will be accompanied by a POG higher than the accompanying number you reported just because the very factors moving the dollar down will also be forcing the POG up, no?

Pizz: I sincerely hope that by the time you get comfortably moved and settled that you'll look back on the decision to move as one of the very best you ever made.

TownCrierHo hum: strong dollar comments uninspiring#10262505/10/03; 11:21:53

MEMPHIS, Tenn, May 9 (Reuters) - U.S. Treasury Secretary John Snow on Friday repeated his backing for a strong dollar but said he was not targeting a specific value for it against other currencies.

"We don't have a target for the U.S. dollar," Snow said...

"We have a policy on the dollar that I have articulated over and over again, which basically says we don't intervene in markets as a general rule," Snow added. "The best way to have a strong currency is to focus on the fundamentals of the economy."

------(see url for full text)-------

If that is what passes as support, then the dollar is on thin ice indeed. Diversify your portfolio with gold -- a substance you can count on. Literally.


PizzGandalf the White#10262605/10/03; 11:35:06

Thank you kind Sir!

Far from "settled in" and now have to sell the city homestead into a fairly soft market. Pulled most of my equity over the past few years and stuffed it into PM's, kind of felt like a better place for it and I was right.

Now I keep telling myself a house is nothing more than a big car. Ask retail, but be willing to take wholesale cause I can always replace it for the same, or better. Just hoping I can find at least one qualified buyer that is totally tuned in to the BS the administrationis dishing out. Still don't buy the bubble in housing, but substantial appreciation in home prices will come with hyper inflation, but you still have to find a buyer.

Goal is to take equity I get, pay off the rest of my debt, invest balance in physical, rent for a year or more and try life without the debt gun at my head. . .


As far as the rural economy in the Eastern part of the state, it's slow but better than the metro area by a mile. I don't see the extremes in business.

What does concern me is the mindset I see developing. If this economy doesn't "light up" the rurals will elect ANYONE with ANY BS plan next year, so try this senario:

The fast drop to the dollar IMHO is being orchestrated on purpose. As foreign goods become more expensive, it will give what's left of our manufacturing and dollar denominated sellers room to move up prices and hence dollar inflation in something else other than core necessities of life. If they can get it started, the boom comes from the new mindset - "I'd better buy what I want now before the price goes up any more". (I see no other short term option that will work - period).

Now, the political cycle only has 9 to twelve months left to get something started, so it has to be fast and hard, and it sure looks like it has started.

Another inflation plus just may be the fact that cheap Chinese goods may just be "quarantined" for a while here in the future. Probably just coincidence, but if my mind is working correctly, the Yuan is tied to the dollar and can't appreciate to help on the reinflation. . .

Now if you put your mind into the macro sense, look at the last shake out we've had in PM's, read FED and Buffet comments (Buffet's right as usual, cause the massive short term drop required in the dollar is going to play hell with the derivatives) we appear to be heading for a short term, inflationary, quick fix to the economy for a desperate re-election bid, and then the current administration will have another four years of survival while they pick up the pieces of an even bigger mess -

Seems to make sense in the macro PM senario. We've had wave one up, a decent shake out, wave two should be strong and starting right now, one last ditch effort by the cabal in a last ditch effort to stave off BK as the final correction, and the big blow off when the inflation genie goes nuts as the US pays off it's debt in worthless bucks.

All I can say is as far as Gold and Silver are concerned, BUY BUY BUY and HOLD HOLD HOLD and just forget the day to day miscellaneous BS.

Hey Rich, just heard Morgan drop a hint of the medicinal benefits of silver. In solution sprayed upon surfaces to stop the spread of infection. . . .hmmm.


USAGOLD / Centennial Precious Metals, Inc.A complete gold investment education for $5.95#10262705/10/03; 11:40:08

ABCs of Au by MK

The ABCs of Gold Investing

"If you are looking for thorough guidelines for making good decisions about private gold ownership, The ABCs of Gold Investing has all the answers." --Money World Magazine

Please Remember: It is your purchase from USAGOLD - Centennial Precious Metals that nourishes these pages.

Belgian@ Silvercollector#10262805/10/03; 12:06:17

You can find all the charts you want at or
May I suggest not to pull conclusions from any temporary, artificial relationship, to be spotted, between the dollar-index and POG ! Keep it simple :
Price-inflation since the sixties is (x 25). Fixed POG was 31$ then...Today's arbitrary price of POG should be x25 = 775$/Oz if you think that Gold has something to do with inflation. It doesn't !

The simple fact that "everything"...EVERYTHING, was constantly price-adjusted for the phenomenon of permanent currency depreciation...EXCEPT the POG...!!!...*must*...MUST make you think WHY...WHYYYYYYY this is so !

The decade's old goldpricing "anomaly" is sohhh intimidating that this threath (containment) must have a very profound, fundamental, all embrazing reason. Yes, an absurd and obscene price anomaly for Gold...exclusively Gold ! This goes much beyond the dollar-index.

The long term dollar-index chart gives us an idea about the dollar-future and where the dollar-system might be heading.
The world's *central bankers* will decide when the POG-Intimidation (containment) has to stop. Once there is a growing opposition against further dollar-use...the dollar-system will collapse and Gold will be brought into the global currency equation. As M. Kosares pointed out...NOT the politicians, but the central bankers are the ones who really know how far the monetary rot has taken place. The dollar-reserve-rot, that is. The US$ (dollar-reserve) is *representing* less and less. The US-GDP of 10 trillion $ is not representing (backing) the dollar in its reserve function. China/India produce 5$ Nike shoes wich go into the US_GDP statistic at 100$.

Make the essential difference between the intrinsic worth of any currency and the worth of a nation with hard working/saving people, producing *real* goods and services for that US$ that loads up more and more Debts.

The Middle East, the globe's main oil-reserves for the next two generations, has a total GDP the size of Spain ! What a dis-proportion for the valuation of the black wealth that is the basis of the world's economic happening !
The dollar-system managed to give the dollar (reserve) currency, the illusion of intrinsic worth thanks to very cheap oil, flow of oil, and massive amounts of real goods and services, produced by people who can't even afford 1/10 of our life-style. How long can this system be maintained ?
I try to find the answer in the evolving dollar-index, dollar exchange rate, dollar purchasing power, dollar creation, dollar debt.

And it is here, in this reasoning, that the euro plays a major role. Will the euro-standard, replace the dollar-system ??? That's why FOA so often repeated...we will watch this evolve, all together ! The old dollar system to become replaced with a new euro-concept that could evolve to an euro-standard !

PizzR Powell et al#10262905/10/03; 12:37:27

Thanks for the support. In business I've always tried to practice all the good things I've seen work and to not practice all the ones that haven't or won't.

The same goes for moderation and diversification in a chosen direction.

I sincerely believe in the axiom of putting the bulk of your investment eggs into one long term basket and watching that basket very closely - PM's because we are NOT wrong long term - where's the downside as compared to paper??? IT'S NOT THERE!!!!

As far as moderation and diversification in both life and investments:

Trapper: Live simple! Probably the two most profound words ever put back to back on this forum. Thank you.

Aristotle and Belgium: Without your input I'd be holding a lot more paper PM's than physical - thank you.

Rich: You've got me diversified into a few dollars worth and very heavy(smile) physical silver and most of my paper PM's into silver producers where the bigger % gains will be made (IMHO)- thank you.

Black Blade: Get out of debt, and get the basics of life in possession - heading a bit more there every day. . .thank you.

Mr. Gresham: Your gracious support of varying thoughts and ideas put forth by nearly all has reinforced my diversification with PM's. No one is 100% right, but a little bit of the best of everyone here sure as heck can't and won't be wrong.

Miner49er: You probably have one of the deeper, most astute minds I've ever run across. Keep it coming and soon I will have both the time and mindset to feebly try to respond to some of your excellent, excellent posts. Thank you.

Gandalf, Sector, Waverider, CB2, and all others, new and old, I have a little piece of your minds in mine - thank you.

FOA and Another: All I can say is I am very sorry I came to this board too late to converse with you. Hope you both return.

MK: You provided the Forum, what more can I say but THANK YOU VERY, VERY MUCH.


Rich, sorry but you're wrong! Coming here is by far and away the best move of my life. My lifestyle change and piece of mind that is getting better every day is only the result.

A very thankful,


Liberty HeadInflation is Taxation in Disguise#10263005/10/03; 12:39:12

In a free market economy, the price of anything is determined by the dynamics of supply and demand constantly moving towards equilibrium. This is a great system provided that debt levels are held constant.
Tic Tic Tic Tic

Without restrained debt, this dynamic provides those who spend newly printed currency, before supply and demand have adjusted, an advantage over those of us who don't see this additional currency until after supply and demand have balanced to the new inflated, higher priced equilibrium point.
Tic Tic Tic Tic

Pre-existing debt is one way to spend before the market adjusts to the increased supply of currency. The largest debtor, the U.S. government, covertly reaps the lion's share of this advantage. A small fraction of this advantage can then be returned as a high profile tax cut to further enhance the illusion and buy more time.
Tic Tic Tic Tic

However, our government has a terminal spending disease. Like a parasite that kills its host, this situation is self-limiting. Debt will no longer provide an advantage, only liabilities. Don't be holding debt when the debt bomb reaches the critical mass point.
Cash and carry will rule.
Tic Tic Tic Tic

The only remaining variable is time. Time, being determined in large part by our level of tolerance and understanding. Tic Tic Tic Tic

Now, seems like a good time to speak out.
Gold-Good, Debt-Bad

Great Albino BatWide Hare: Your dollar index data....#10263105/10/03; 13:12:36

That's an interesting progression, Wild Hare. However, we have to bear in mind that graphing presupposes all other things remain equal, and they never do.

If you put a marble on a flat table, and tilt the table a little, you can graph the increasing speed of the marble across the top of the table - until it reaches the edge, where we encounter a "discontinuity" and a breaching of the parameter of the table top: the marble falls off the top, all of a sudden.

This is the fallacy in the Black-Scholes method that kills derivative speculation. There always comes an unexpected moment when psychology cuts in and changes all forecasts: bankruptcy, or in the case of the dollar - massive and sudden flight.

Pizz - your comments on moving to the country bring to mind the comments of poet Horace 2,000 years ago. He sang the praises of simple country living, but ended by recalling that on the end of the month, he had to renew his loan arrangments. Very, very hard to embrace a new lifestyle. Mostly such changes are made when there is no other alternative. They require great strength of spirit.

As I hang in my cave, I meditate that living on bare essentials and apparent poverty, is much easier when you have a hefty stash of gold - an "ace in the hole" that nobody knows about.

A great film, "I Remember Mama", about Swedish immigrants who were so poor. Mama always had a "bank account" to fall back on, even when times were toughest. This gave the family the feeling of security - so important. Only much later did it turn out the bank account was mythical. There was no bank account, ever. But everyone thought there was!

Everyone should strive to have his own "ace in the hole" of gold, not bank accounts.

"If you can keep your head when all about you
Are losing theirs and blaming it on you"....then it's because you have a stash of gold.

Guano from the GAB. Good weekend to all!

CometoseNomad post 102616 Fourth Turning parrallels to Z Warnings (14b) at link#10263205/10/03; 13:36:57

Astute observation regarding unemployed in prison that our
economy failed in true opportunity or legitimacy....THis indeed is a large component of unemployed....
I was following a RUSH report about the improved employment and statistics relative to Blacks being better off than they were in 2000 .... I listened to the numbers and thought exactly what you are purporting here...but for the the Black and perhaps other minorities , these (imprisoned) numbers are excluded....

on the Fourth Turning: I went and read several of the chapter headings but went more indepth to specifically follow the latter chapter devoted to ends and new beginnings and allusions to Man and its unfolding , I found it uncannily similar to someone else I read recently that is also into Prophecy....THis sight is also where I have learned of Mohammed Atta's (flew airliner into one of Twin Towers) complicity in bombing of bus in Isreal , his subsequent enternment in Israeli prison and further release in 93 in conjunction with Olso accord and demands of President Clinton inspite of his blood stained hands... I was so moved by his statements in Todays Z Warnings that I read it aloud to my three sons...'It was made known to me this morning that Apocalypse means seems that this is now occuring
Let all things be made plain for all eyes to see....

adminMKs Gold Commentary & Review #10263305/10/03; 13:58:38


Some Soggy Saturday References & Remarks

DeGaulle's "Criterion Speech"

misetichSOS - Washington must help states #10263405/10/03; 15:12:53;jsessionid=E22OY2PK5XYW0CRBAEZSFEY?type=bondsNews&storyID=2716850


WASHINGTON, May 10 (Reuters) - New Jersey Gov. James McGreevey called for federal aid to cash-strapped states on Saturday and denounced the Bush administration for leaving them out of its economic plan.
With state governments facing their worst economic crisis since World War Two, state tax increases and service cuts were inevitable without federal help, McGreevey said in the weekly Democratic radio address.

Forty-six states faced budget deficits totaling $70 billion, McGreevey said. "Yet the stimulus package offered by the president fails to provide a single dollar in aid to the states," he said of Bush's tax cut plan.

Job cuts, budget cuts, budget deficits soaring, economy crawling, stalled or in reverse the juggling act of keeping the SM and US $ from falling hard is getting more difficult by the minute

All On Board The Gold Bull Express

misetichSOS - Washington must help states #10263505/10/03; 15:18:58;jsessionid=E22OY2PK5XYW0CRBAEZSFEY?type=bondsNews&storyID=2716850


WASHINGTON, May 10 (Reuters) - New Jersey Gov. James McGreevey called for federal aid to cash-strapped states on Saturday and denounced the Bush administration for leaving them out of its economic plan.
With state governments facing their worst economic crisis since World War Two, state tax increases and service cuts were inevitable without federal help, McGreevey said in the weekly Democratic radio address.

Forty-six states faced budget deficits totaling $70 billion, McGreevey said. "Yet the stimulus package offered by the president fails to provide a single dollar in aid to the states," he said of Bush's tax cut plan.

Job cuts, budget cuts, budget deficits soaring, economy crawling, stalled or in reverse the juggling act of keeping the SM and US $ from falling hard is getting more difficult by the minute

All On Board The Gold Bull Express

Wild Hare(No Subject)#10263605/10/03; 15:33:19

Batty batty batty...

As I said - that exercise was for FUN. I'm not assuming any true "predictability" given the variables we're discussing. I'd say there is a correlation - just what it is we simply can't say.

What is DXY anyway? A variable fiat currency referenced to 16 others just like it - ALL whose true underlying value is people's faith in said currencies. What's the faith composite index look like?

CometoseIran#10263705/10/03; 16:12:44

I have it on good authority that 35 military (transports and fighter jets )airplanes took off from Kirtland Air Force base between the hours of three and four am on the morning of April 8.... Why then ....Why 35 ? Deployment ? to IRAQ for OUR IRAN ADVENTURE......
ON this flight , you will be experiencing turbulence and discomfort due to high velocity winds of WORLD OUTRAGE...
During the PROVOCATION , there will be RETALIATION that will surely follow : you will want to look out port and starbord windows of your Aircraft to notice the UPHEAVAL and RECIPROCATIONS that are certain to follow , the KNOWN and NATURAL CONSEQUENCE that the PROVOCATION was designed to instigate....


I have learned the lyrics and the chord progressions
to this song this week.....

THE SONG IS about being chained to a habit that
causes the writer to be enslaved in a particular area of his life.....a decision is made .... a compromise is given
... an exchange of this for that ....and a prison is established.....could be heroin addiction, could be prostitution, could be alchoholism.....gambling ,,,, cheating,,,, etc, etc, etc... you know it's a sell out when it begins to affect the freedom of the individuals involved....(when it is apparent that their habit owns them and runs their life)

THE men that run our Country ....REPRESENTATIVES or
POLITICAL HACKS (QUALIFIED) that go there for power....
go for the wrong reason.... and have been there too long...
THEY TURN FOR MONEY ..........and INFLUENCE (like a reined horse); that is a sellout...when they do it......but its our freedoms that are going down the tubes...

Is our future being sold to build some kind of VISION someone cooked up in a SOCIAL ENGINEERING LAB??????

I may see the future ; and it looks peculiarly strange in some ways and very familiar in some others.
"THINGS ARE NOT GOING TO GO BACK TO NORMAL "..... this has definite ramifications for GOLD and the Markets ......don't miss the big picture by getting tunnelled vision on Economics......WHY IS THIS POOPICAH GOING ON ???
COULD it be that we are entering the end of the age?

If the ride gets very turbulent , we suggest that you take your pillow and put it on your lap and then lean over in crouch position and PRAY!

WaveriderU.S. dollar slide sounds warning#10263805/10/03; 16:54:07

"The dollar is in the throes of a dramatic and potentially cataclys­mic slide against most major currencies — including the euro and the loonie — that is sending shiv­ers through financial markets. Since January, 2002, the dollar has lost 17 per cent of its value on a trade-weighted basis against a basket of other major currencies. The slide has been even more pro­nounced against the surging euro, which has gained 36 per cent in the past two years to $1.15 (U.S.) — its highest level since its launch in January, 1999.

Investors, corporate executives, traders and central bankers are now watching anxiously to see whether this is just a healthy correction, or a fundamental post-Second World War realignment that could wreck the U.S. economy and shift the epicentre of growth...Barring a crash landing, a weaker dollar is exactly what a dysfunctional global economy needs," suggested Stephen Roach, chief economist at Morgan Stanley. "An unbalanced world is in in­creasingly desperate need of a rebalancing — less domestic de­mand growth in America and more elsewhere around the world. A weaker dollar may well be the only way to achieve such a result." Even Mr. Snow and Mr. Green­span are probably quietly rooting for a weaker dollar. Concerned about possible deflation at home, a lower dollar has the effect of importing inflation from the rest of the world by making foreign cars, electronics and everything else more expensive here. With rela­tively little room to inject more in­terest-rate relief into the U.S. economy, Mr. Greenspan can get much of the same benefit via a cheaper dollar, including an eco­nomic lift and a counterweight to falling prices. The Fed's own models show that every 5-per-cent decline in the dollar can deliver the same economic punch as a half-a-per­centage-point cut in interest rates.

Interestingly, it is the rise of the euro, as much as the fall of the dollar, that is threatening to remake the world financial order. The euro's emergence has pro­vided a stable alternative, particu­larly for central banks. Several countries, including Canada, have switched a greater share of their reserves into euro-denominated assets since 1999.

Oddly, one of the first countries to begin the switch to the euro was Iraq, which converted roughly $10-billion of its oil revenues in late 2000 into euros just to stick it to the United States."

Waverider: A good article on the fate of the US dollar and the remaking of the wolrd financial order - interesting last paragraph re: Iraq!

CoBra(too)@Lady Waverider#10263905/10/03; 17:43:33

Thanks for the Globe & Mail article. Barry McKenna, at least, seems to remain one of the few un-"brain"-washed journalists of a mainstream publication.

Just read Richard Russell's latest excerpt about the Dollar, the SM's and Gold; Together with MK's commentary today I'm getting a feeling that the proverbial "something" has to give - rather sooner than later.

Thanks for all your input and warm regards - cb2

The Invisible HandAnyone in a German translation mood?#10264005/10/03; 18:40:42

From a May 09, 2003 column by Roland Leuschel under the title "Waiting for a fourth rally".
Three paragraphs are snipped.
The first is an ad for a gold-linked bond issued by HSBC-bank>
The second paragraph starts by saying that Sir Alan got a new term, but then jumps to excess of demand over supply of gold. I don't understand that "jump".
The third snipped paragraph says that there are more reasons for the POG to rise.

Eine Möglichkeit seine Anlagen gegen die Dollarschwäche abzusichern ist die neue währungsgesicherte Goldanleihe von HSBC Trinkaus & Burkhardt, die eine Laufzeit von 5 Jahren hat und einen Zins von 1% per annum abwirft. Ausserdem erhält der Inhaber 45% der positiven Performance des Goldpreises, in US-Dollar gerechnet. Die Anleihe liegt zur Zeichnung vor. Bei einer angenommenen jährlichen Entwicklung des Goldpreises von 15% (was sehr konservativ ist) ist die Performance dieser Garantie-Anleihe in Euro per annum 8,7%. Sie können also an der zukünftigen Goldpreisentwicklung ohne Risiko teilhaben, da Sie nach 5 Jahren Ihre Anleihe zu 100% in Euro zurückgezahlt bekommen.

« Ich denke, Alan Greenspan sollte eine weitere Amtszeit bekommen », erklärte am 22. April dieses Jahres der amerikanische Präsident. Die amerikanische Börse antwortete spontan positiv, und die Medien diesseits und jenseits des Ozeans waren voller Lob für diese Entscheidung, und Alan Greenspan hat auch bereits zugesagt. Ich bin darüber auch sehr froh und stimme Claus Vogt von der Berliner Effektenbank zu, der in seiner letzten Ausgabe von Perspektiven nüchtern bemerkt : « Mit einer weiteren Amtszeit kann sich Greenspan als verantwortungsvoller Mensch hervortun, der die von ihm eingebrockte Suppe auch auszulöffeln gewillt ist. » (Weitere Details werden Sie in einem Buch finden können, das mit dem Titel « Alan und seine Jünger » im Finanzbuch Verlag München im Herbst erscheinen soll.) Übrigens die gesamte industrielle Nachfrage (insbesondere der Schmuckindustrie) übertrifft seit einigen Jahren die jährliche Goldproduktion um rund 900 bis 1.200 Tonnen jährlich. Mehr als ausgeglichen wurde dieser Fehlbetrag durch die Verkäufe der europäischen Notenbanken, die den Erlös in zinstragende Dollar-Titel angelegt haben. Darüber kann sich der Bürger nur wundern. Als Argument haben diese Notenbanken angeführt, Gold bringe eben keine Erlöse. Da frage ich mich, warum haben diese Bürokraten das nicht vor 20 Jahren entdeckt, als der Goldpreis bei 850 Dollar die Feinunze lag und der US-Diskontsatz bei 14% ?

Fazit : Es gibt noch andere Gründe warum der Goldpreis demnächst stark ansteigen könnte. Erhöhen Sie daher den Gold-Anteil Ihres Portefeuillesüber die bisher empfohlene 5%-Grenze. Ansonsten machen sie Kasse bei Ihren Aktien-Tradingpositionen und vermindern Sie den Dollar-Anteil in Ihrem Portefeuille.

R PowellPizz#10264105/10/03; 18:41:57

Pizz: I'm confused by your words...

"Rich, sorry but you're wrong! Coming here is by far and away the best move of my life. My lifestyle change and piece of mind that is getting better every day is only the result."

Hopefully, then, I was right when I said...(102624)..

"Pizz: I sincerely hope that by the time you get comfortably moved and settled that you'll look back on the decision to move as one of the very best you ever made."

I share your conviction that physical possession will prove profitable as both insurance against a questionable fiat and (imho) as an investment. I confess to having felt the weight (responsibility) of my silver rants when you mentioned paper silver investments perhaps influenced by my words. I try to present facts but these invariably lead to opinions. I've still found nothing to refute the ongoing silver deficit which should (eventually and inevitably) bring a much higher POS. I feel relieved knowing that you are knowledgeable about paper investments. Even a rising POS doesn't guarantee profits with mining company share ownership or with futures positions without the proper stewardship. So many are so disinterested in anything economic that I've given up mentioning anything and, when asked directly, simply advocate physical silver hoarding. (I always recommend Usagold) If asked why, I say only that I believe the POS is destined to increase many times over. Until then the game of trading and repositioning continues as I now look for a short term POS retraction and have to play accordingly. I'm always nervous even hedging to the short side because I think the real long-awaited POS rise, when it arrives, will be fast and sudden. POG, on the other hand, seems more predictable, now trending up!

In my youth I sometimes had to comfort "city" kids who could not sleep at night in summer camp, in the country, because, "It's too quiet." For most people, acclimating to a less stressful environment is easier than jacking up the adrenoline level. We (wife and I) made a similar decision to move twenty years ago with two babies and, at the same time, I decided to seek work as self-employed rather than as an employee. Thankfully, it worked and actually lowered the stress in my daily work. I noted that you mentioned a sense of security derived from your gold stash. Gold...lowers stress and blood pressure! I am taking notes as the idea of moving back to a more rural setting is never far from my thoughts. My silver stash will be heavier to move than was your gold. Silver!... more weight for your dollar! Glad things are going well for you!

PS Happy Mother's Day to all who are!

PizzRich#10264205/10/03; 19:20:02

Coming to this "forum" was the "best" move of my life, going to the country is second (with physical of course).

On silver stock?. Feel responsible after it goes up - ok?? Cause I made the investment decisions myself, and it's part of my diversification with speculative capital. Morgan, Butler, Ghengis, Puplava, and a few others had some input also, so consider yourself in some prety darn good company. Besides, a reasonable amount of fiat has been made being a contrarian, why should a gold dominated PM forum be an exception???. Besides, I like your strength of conviction. . .it has just the right amount of "hope I haven't screwed up" in it to probably be correct.

Back to trying to make an older home a teenager again. . .facelifts, bathroom jobs, makeup, etc. taking on a whole new demention. . . .

Deflation is not an option, so buy what you feel comfortable with. . .PM's might work. . .


CoBra(too)@TIH - Re - Roland Leuschel#10264305/10/03; 19:22:41

As much as I used to like the guy, the rest of the commentary is not really worth to translate and gibberish.

1) A new possibility of a 5 year gold bond at an IR of 1%, and a max participation of POG's performance of 45% over the 5 year life! A product brought to you by HSBC/Trinkaus& Burkhardt ... though, these guys see conservatively an annual appreciation of 15% by POG. Lovely - in the best case they bag it all and in the worst case only 55% plus accrued 5% interest!

... I'd rather have my stash in deep storage under my favorite oak tree!

2) Accolades to Alan G's perpetual FED presidency - and some voicing of the dire consequences he's got to abide by his own deals. The rest of the chapter is nonsense and promotion of a book about AG and his followers.

3) Summary ... There are other reasons, why the POG could advance rapidly no reasons offered) - only the avice to add to Gold above 5% of the portfolio and Take profits on your SM trading positions - as well as reduce your US Dollar investments.

Wow, sound advice - only a li'l late anno domini MMIII -
Sorry for being snide - the hand(writing) is too visible - cb2

PizzRich#10264405/10/03; 19:25:33

Now that I've reread your comment three times at least, forget both my first response and second. . .your statement covers the entire issue and thank you. . .my move appears to be 'one of' my better ones.

paint fumes must be going to my head, but the grey is going away in spots. . . .


TrapperSir Hand#10264505/10/03; 21:05:32

My pig latin is a little rusty but i think the article you posted says...sell paper and buy gold! Well anyway, live small and enjoy your gift of life.

Mr GreshamTrail Walk?#10264605/10/03; 21:26:44

Good to see you back Pizz.

I've got to admit, I'm NOT ready to follow up on my idea of a week ago: taking a group hike on Sunday through A/FOA's Archives for an update and mutual commentary based on recent events. (I only saw 21mabry take me up on it...)Maybe next weekend?

Got into a work project that could help me $lide into home plate ahead of the next "derivative event", so that's gotta come first. Bust on it till it's done. (Elderly clients -- you want to take Very Good Care of them, and also get done and paid fast, as time may not be too patient for us, know what I mean?)

My random spare moments of reading this week, however, was MK's "ABCs of Gold Investing" book, and it's a real interesting experience to spend some time in his mind (as of 1996 -- and not that much new in the world since to change what he offered then) and reflect on how this Forum had to be the logical outcome -- the almost inevitable brainchild -- of someone who expresses necessary concepts as clearly as MK.

I guess we see him, in profile, at odd moments around the Castle. His role here is a unique one, so there's not much to compare it to, especially historically.

But, when the history of the "new gold market" is written, I think many of us "small dogs" will be insistent that Michael's name be clearly spelled out among all the celebrity names who have made this a community worth being a member of.

Back to work...[Crack of Whip sounds offstage]

The Invisible HandCoBra(too) - the rest of the Leuschel commentary#10264705/11/03; 00:32:58


You say that as much as you used to like the guy, the rest of the commentary is not really worth to translate and gibberish.

The commentary contains six paragraphs, I snipped paragraphs, 3 , 4 and 5. Paragraph 6 is again an announcement for a speech by Leuschel.

Paragraphs 1 and 2 do however say on the one hand that the euro will rise to 1.40 vis-a-vis the dollar, which will lead to a deep recession in Europe, and on the other hand that the ECB will cut rates next month. Perhaps, you want to translate that? Especially as ECB cutting goes against MK and FOA (and would thus support GATA).

Wie in den vorangegangenen Kolumnen angedeutet, scheint die dritte Rallye an den Börsen nach Beginn des Crashes im Frühjahr 2000 « programmgemäss » zu Ende zu gehen. Zwar hat der Dax zweimal die 3.000er Marke knacken können, konnte aber nicht die 200 Tage Durchschnittslinie entscheidend überwinden. Diese 200 Tage Durchschnittslinie hat sich in der Vergangenheit oft als entscheidende Widerstands- und Unterstützungslinie erwiesen, obwohl man es fundamental nicht erklären kann. Aber Sie wissen ja, die Börse ist weiblich, und ihre Natur bleibt daher den Börsianern immer und ewig verschlossen. Eine andere in mehreren Kolumnen vorausgesagte Entwicklung scheint jetzt Form anzunehmen : Der Euro stieg über 1,15 gegenüber dem Dollar, und die nächste Etappe dürfte bei 1,40 Euro sein. Dann allerdings wird es ernst. Wie in dieser Kolumne schon öfters erwähnt riskieren wir die Weltwirtschaftskrise II, und ein Dollar über 1,40 Euro würde eine tiefe Rezession in Europa bedeuten.

Wie aus den Protokollen des Offenmarktausschusses (FOMC) der US-Notenbank vom 18. März hervorgeht, herrscht in diesem Gremium inzwischen ein pessimistischer Grundton. Von mehreren Mitgliedern dieses Gremiums wird die Gefahr einer Deflation (dort spricht man von Desinflation der Kern-Verbraucherpreise) als wahrscheinlich erachtet, und « ein schwaches Wachstum für längere Zeit » nicht ausgeschlossen. Wie wir alle wissen, ist eine Deflation keine gute Aussicht für Unternehmensgewinne und Investitionen, daher glaube ich den ... konomen von Goldman Sachs, die behaupten, « eine weitere Zinssenkung in naher Zukunft, womöglich schon im nächsten Monat, wird immer wahrscheinlicher ». Ich vermute, der Zinssatz für Tagesgeld, der schon auf 40-jährigem Tiefstpunkt ist, wird schon im Juni um 0,5 Prozentpunkte auf 0,75% gesenkt.

geJohn Murphy chart on CRB/DOW Ratio#10264805/11/03; 00:41:45

BelgianConsequences of a weakening US$.....#10264905/11/03; 01:38:45

Many different *dollar-perceptions* will gradually change if the US$ remains weak/weaker.
The world (bigger part of it) might even come to a conclusion that it is NOT local US goods that stands behind the (enormous) dollar-growth. It will surely be those (the East) who are massively producing, inexpensive goods for dollars, that will understand this when the dollar remains weak/weaker.

The euro will gain more "status" as did the German Mark and Swiss franc already had. Wit euro interest rates just a fraction above the dollar IRs, people will consider to "SAVE" more and more in euro, and opt out of the dollar as the former evidency for "saving" with a perception of relative safety. This is a "major" shift with enormous consequences for the dollar-system. The dollar, always in need for expansion, can't expand anymore without the consequential inflation pressure. The dollar (reserve currency) will finally undergo the same fate that so many other currencies suffered before the dollar. Expansion + (price)inflation.

The 12 rate-cuts had only 1 purpose : Refinancing. More credit created buying power for the dollar on a structure of fractional credit reserve banking. More and more, almost free credit, to buy more and more, non-inflationary priced goods. An increasingly building debt-load that is "covered" by the FED with lower IRs as to keep re-financing. This seems to have reached its limits and must be the major explanation why the euro (and other currencies) exchange rate rised 15% above the US$.

FOA msg#126 : Somewhere in the middle of all this, real savers will supply Euroland with a solid base of credit wealth that can be borrowed without driving their local price inflation thru the roof. Then, other national economies will have a market that shares realistic price levels for all goods. Then, all economic systems will begin a non inflationary expansion that centers around euro-USE.
All of this period will mirror the US internal coming inflationary expansion that limits our ability to "import" or export !

Is it the above what the dollar's exchange rate is telling us ?

Belgian@ TIH#10265005/11/03; 02:50:33

Go to FOA msg# 125 : There is an "end" to dollar-inflation without credit markets functioning in a non-inflationary (deflationary) environment !!!

Leuschel has still his dollar-signs in his eyes. He still considers the euro as a "LOCAL" currency ! Euro-concept-standard is Chinese to him !!! The euro is still NOT percepted as a dollar challenger !!! Everybody simply expects (believes) more of the last several decades of economic theory to keep right on going ! Will it ??? Is it ???

Leuschel, other bankers and politicians are NOT central bankers (FED/ECB/IMF/BIS).

The whole IMF-dollar system has always been based on an expanding fiat theory that swells GDP over time. Economic function remained...essentially because price-inflation could not rout the overall market for long credit.
The evolving €/$ exchange rate is forcing the dollar system into INFLALALAdidada ! All expanding fiat bases do lead to inflala growth. How can one remain sticked to that deflala thing !? On top of all this we simply forget, conveniently, that the promotion of derivative hedges was a way of insuring dollar infinitum !

Is the euro in the process of initiating the Big kaboom on the derivative construction !?

Last night on BBC an in dept program on the effects of excessive price-swings of real estate : FRIGHTENING for what is most probably to come! More and more creation of "artificial" collateral value as to support economic activity with enforced credibility.

As the euro is building more base, it will drive an "Inflationary Recognition" into the credit markets and freezing up the derivative markets. That perception will fuel a complete failure of the US bond markets and force the FED to buy up any and all credit, paying in full. ISN'T THIS HAPPENING RIGHT NOW !!! ???

The ECB is acting in a way that lends *** credibility *** to it being a "true" hard backer behind the euro-currency-system. The ECB is taking an *International*, long term (!!!) stance to managing their money...and the dollar faction hates it. They hate it, because such a policy position is no longer open to the dollar as he ($) is forced
into a super-inflationary direction from wich there is no turning back.
The ECB is more driven to keep the euro strong (STABLE) and NOT base its policy on local politics, the way the FED (US policy) does. WHO is pointing to this very fundamental differences in policies between the FED and ECB !? And we are witnessing this "difference" NOW, consistantly.

Ok, ok, ok...the dollar will unwind progressively, go through a small valley once again and will get back on its feet...No Sir, not this time ! Not You, but those central bankers are TIH ! The US$ is a shorted stock now, a quick trade, and soon its reserve status will be questioned...if the euro feels ready or is considered to be ready to take over.

Sure, the dollar (and/or euro) will certainly have an optimum exchange rate in mind as a rest-level in the process. But bear im mind that Euroland (the ECB /BIS) has structured the euro-system so it could completely discard all dollar-reserve-function IF NEEDED OR WANTED !!!

How does one make dollar and dollar-debts, outside the US, "valueless" ? Right,...with the building up of a sound alternative (euro)"system" ! Euroland's politicians and bankers don't want to hear about this !!! And you certainly can guess all the reasons WHY they don't. The (ivory tower) central bankers already constructed the perfect safety net, not for "just in case" but with the intention of finally replacing the dollar-system, they know very well as unsustainable. France wants and will get ECB's presidency !
Duisenberg and Trichet...two invisible hands on the same stomach.

Gold-Wealth will stand beside the next reserve-system. Gold-Wealth is today on offer at a 300% discount to its arbitrary price, for all ***SMALL*** (!!!) investors.
Watch the financial media connecting dollar-reporting, intuitively followed with Gold reporting ! Soon they will realise that there is much more behind Gold's behavior than the old straithforward Gold-dollar connection.

miner49erBelgian @ 102649 / 102650#10265105/11/03; 10:28:20

2 Excellent posts, today Sir... Thank you!
21mabryMr. Gresham#10265205/11/03; 10:38:11

Whenever you want to have the FAO count me in, but mostly as an observor, mostly have just gotten thru Another so far. I do know others on the forum liked the idea. Just some thoughts.I went to a minor league baseball game last night in my city,we have a great new stadium as good as a big league park only on smalle model. After the game which I spent thinking about Gold Wars by F.Lips they had fireworks.They were nice of course but looking around I thought this is all thats needed to keep most people fat dumband happy.Beer a ballgame and fireworks is how you contorl the masses.These people didnt care about anything more than getting another beer before the 7 inning last call.
Chris PowellHowe's new study shows how the central banks' 'long con' in gold is ending#10265305/11/03; 10:50:05

Reg Howe's new study comprehensively documents
the central banks' "long con" in gold and how it is
coming to an explosive end.

To subscribe to GATA's dispatches, send an e-mail to:

This email address is being protected from spambots. You need JavaScript enabled to view it.

21mabryGAB#10265405/11/03; 10:54:14

Started reading Platos republic, the journey begins. I totally agree with your ace in the whole comments.It gives me piece of mind to be able to bug out by throwing a duffell bag of clothes and such and a hardcase with your metal and some fiat into my car and whoosh your gone. Please elaborate on Horace and his struggle to live a simpler life .If you would please. 21
R PowellProbability and predestination#10265505/11/03; 10:56:03

Ge: Thanks for the CRB/DOW Ratio Chart. (102648)

Wild Hare: Thanks for the $/POG index numbers. (102620)

The goal for me is to try to understand what has happened, what is happening and then, of course, to attempt to project what will happen. Many of us had thought that there would be a shift from paper holdings to tangibles. This is in keeping with a currency that is losing purchasing power and paper assets that are losing value. Ge's chart re-inforces this conclusion. I find it reassuring that we thought this would happen and it has and still is. Perhaps our logical deductions, made from what information we had to deal with some years ago, have proven correct. Hey, guys, we got it right!

Wild Hare's $/POG index adds another piece to the ongoing puzzle. Of course it's more a probability than a predictable certainty, all TA is such, but I think it has merit. Thanks Mr. Hare. I also noted that you claim to have looked for this info for FUN. Anyone who finds his research work to be fun is the right guy for the job. You're hired!

Belgium and Hand: Thanks for the information. Your analysis (as best as I can understand it!!) seems plausible enough. I just can't imagine that the architects of world currencies could have had the foresight to have concocted this scheme or any other that takes so many years to unfold. That is, I wonder if they intended everything to happen as it has, as you suggest? How much happenstance of events or mutations of intended outcomes has played into the current situation? I guess I tend to believe that things do not always evolve according to plan (no predestination) but rather are determined by a myraid of events always in flux. I greatly appreciate your work and the assurance with which you project your opinions. I just find it less than plausible that it's all occuring on schedule according to a predetermined plan. How much power do the powers-that-be really possess??
Happy Mother's Day!

Goldendome@ 21 Mabry and Belgian#10265605/11/03; 11:08:23

Mabry: Minor league B Ball sounds like it might be the right price level. Over in Seattle (I don't live there, nor go to the ball park, just too expensive, and I refuse to fork it over.) You can pay anywhere from $20. on up for a ticket. Your refer to beer and a hot dog. A beer at that major league venue goes for $6.50, and the hot dog--I'm not sure, but for sure, one heck of a lot more than it is worth. Anybody else notice, the empty seats around the leagues this year when viewing on TV? Upper decks often completely empty, as well as, alot of the mid-teer seating. Maybe a sign of the economic time.

Belgian-- How much change have you noticed in The Gold price, with Euro's appreciation against the dollar? Your Euro must be able to buy you more now, (no,yes.)

21mabryGoldendome#10265705/11/03; 11:21:50

Hot dog 2.75 12 ounce beer 4.75 good seats 8 dollars 3 bucks to park.Its triple aaa ball so its quality baseball. My brother in laws company has a suite at the stadium 30 grand a year you buy your food and alchol from stadium food service, 6 pack of beer goes from 21 dollars to 35 dollars a six pack for imports.
Mr Gresham21mabry#10265805/11/03; 11:40:46

Good observations. With friends like Belgian, miner, and IHand around, we are carried forward well in the topics I wanted to revisit. They are, I feel, holding my place in the book until I can get "back to the classroom."

The people at the ballpark are acting on their personal sense of a future timeline. My POV in recent years has been that any real serious looking forward is started "under the gun" when you hit your 40s and your kids are in college or out of the house.

Then you start looking toward care for your aged parents, and then you see your own future much more clearly. (Surprise, surprise!) YOU are becoming the older generation, and your saving/spending decisions have real consequence for YOU down the road not so far off.

There's no one left to rescue you. Too many nights out on the town could mean more meals of cat food tuna 20 years from now. Hard to predict, true, but still closer to the time of finding out IF 'twill be so. Better safe than...

[YIELDING to Temptation:] At this point, I've gotta paraphrase Dirty Harry:

"Now you're probably asking yourself, 'Should I save 5% of my income annually, or 6%?'. Well, I'll tell ya. This is a Grand Supercycle Bear Kondratieff Winter, and it can blow the entire fiat paper money system's head clean off.

"Money and asset values of all types are going to disappear off the face of the Earth, by the trillions. Anyone left with real wealth will be wealthy beyond his dreams. If you were to save 20-25% of your income NOW, and lucky enough to pick the right wealth vehicle, then that would be you.

"So, now I've gotta ask you: Do you feel lucky? Well, do ya?"

Whew! Mr G's fun rants on a Sunday morning...

Most of the stock mania we are descending from was Baby Boomers suddenly getting the saving religion, and, conveniently for Wall Street, it coincided with a 3-year surge in stock prices 1997-99. For most Boomers, "Savings = Stocks" was the simple equation. WRONNNNNGGGGGG!!!

They Saved, all right, but someone else walked away with their savings.

Now, for a young person who makes the "right" investment choices early, he will have options (and the opportunity to blow it, too -- but better that than no options at all, right?) to live a life he will see elude those older retirees.

Diversification, and watching market cycles, will really mean something then, with time to play out.

Right now, I'm seeing these mutual fund "families" (like Mafia clans are "families") with their bond funds sidling up alongside their stock funds. I'm seeing people in their 80s who lost money on Internet stocks because they could make a telephone switch in 5 minutes to the hot sector. Sheesh! I feel another rant coming on, I'm outta here!

Old YellerA good thread from PruBear#10265905/11/03; 12:08:23

On the long term implications of the Bernanke put.
Dollar Bill99 FOA#10266005/11/03; 12:25:18

The ECB can now slowly phase out dollar reserves as the Euro assumes more of the world trade settlement function. A function in and of itself, that will further lower the dollar's world need, use, and therefore, value. Because the US still runs a trade deficit, it still ships a surplus of dollars to most countries. In today's new Euro world, the dollar exchange rate will eventually be forced to fall enough to balance this flow. Further, a falling dollar will release ECB dollar reserves as fair game to buy physical gold from any and all entities. However, this buying will most likely be through the BIS and member CBs, not the over leveraged LBMA [London Bullion Market Association] or world gold paper.

In addition, because the Euroland external debt is very low compared to the US and they posses a positive trade balance, a rising price of gold reserves (in Euros or dollars) will support their currency with extra reserve value. Their policy of marking gold reserves to market (on a quarterly basis) and eventually establishing a "true physical" marketplace offers every enticement to get the dollar (and Euro) price of gold higher. Because this process creates a unique reserve benefit, not used in the old gold standard, they will never officially back the Euro with gold. Rather, allow a new "free market" in physical gold (not paper) to supplement their currency operations. The efficiency of modern trade requires a digital currency. That need alone will always support the use of a currency. If gold can trade beside paper money, neither will drive the other out of circulation (as old money gold coins did to paper gold money) as long as they can each seek their own values. ( a very interesting concept??)

During the last several years, the dollar-established gold exchanges created more paper gold than existing gold could ever cover. All done in an effort to create additional world support for a strong dollar. The middle of last year it became apparent that the successful Euro launch would, in time, remove most of the major physical (sales and lending and lending guarantees) support from this marketplace. The result was an IMF/dollar move to sell the physical gold of others into the paper gold arena. In as much as this supply would help, the continued further building of "fractional gold paper" has completely overwhelmed any ability for large physical stocks to cover it. I believe, the BOE sales have been part of a last ditch effort to salvage their London gold operations. Truly, the last round fired in this final battle.

steadybaseball#10266105/11/03; 12:32:46

only 3 teams made a profit last year.
i have been keeping track.
the stadiums are empty. how will they pay there bills?

Dollar Billfrom one of todays links#10266205/11/03; 12:51:19

A collapse in inflation (deflation) is not the problem, for the inflation has never stopped. But by lending infinite amounts at near-zero nominal rates (and negative real rates) to any and all comers, a deadly collapse in demand is forestalled to some future, but finite date. Unfortunately, this dynamic, supra-inflating (though not yet hyper-inflating) to forestall a collapse in demand, is or will be fully countered by the falling value of the dollar. This is what is known as "not a good thing" to the prudent, productive sector of the surviving real economy.

A one-trick pony is just that. More (or accelerating) inflation won't restore real corporate profitability or any of the other collapses listed above, but it may help introduce nominal (before inflation) profitability, which is exactly what the PIMCO bunch has been pleading for months. Unfortunately, I don't believe the banking system can restore balance to the system at this high a level of debt expansion and with real rates this negative without going bankrupt itself. The rest of the financial sector has been enlisted for this task (mortgage refis, debt pooling and marketing, derivatives, etc.) but they've merely inflated rotating asset classes, further indebted all sectors of the economy, eliminated any pent-up demand, and shifted the outstanding and future risks to the weakest hands, thus insuring more (and potentially more severe) collapses to come

21mabrySTEADY#10266305/11/03; 12:53:32

They cant. Neither can the NHL, SABERS almost went bankrupt this year, abc wants to cut NHL tv revenues in half next contract.
Goldendome(No Subject)#10266405/11/03; 14:22:10

This from: Prospector Asset Management---Evanston, Ill.

Now that the first stage of the Iraqi conflict is over, the market can now revert to its former trend, and that direction is most decidedly higher. Gold was rallying BEFORE the war, and now can move higher, in a grinding manner, AFTER the war. The bull market in gold is based upon its quite solid fundamentals, and these considerations moved gold from the $250's to the $330's. The gold market then withstood the onslaught of the speculative crowd, which pushed gold all the way to $390, and then as these short-term traders sold, ALL the way back to $320.00.

The lesson to be learned is that sharp rallies in gold, based upon global fears and safe haven buying, RARELY if ever hold. Once the fear dissipates, the gold market tends to retreat to support, defined loosely as the level at which physical demand re-enters the market. "Paper" buying and "paper" selling can move the gold market dramatically, but all downward price movements are curtailed when the global investor, or jewelry buyer, comes back and demands actual physical product. And, when you look at the gold market over the past several years, these buyers of physical product are more and more comfortable buying at successively higher levels. Nothing could argue more decidedly that this a long-term bull market.

Belgianeuro - dollar - oil#10266505/11/03; 16:06:55

What if....the dollar weakens further against the euro ?
Today, Euroland's economy, buys its oil 15% cheaper than the dollar. In the assumption that €/$ would run up to 1,40...the euro buys oil 40% cheaper whilst the dollar-reserve (US) is in the process of controlling the ME with the purpose to control OPEC with the pressure to keep the POO within the 22$-28$ range.

The euro becomes a pseudo oil-currency when oil is still priced in US$. The euro gains dept and the dollar weakens further up until oilproducers refuse to accept dollars for oil or want the POO above the 22$-28$ range.

At a certain culminating €/$ exchange rate, oil wants euro instead of dollars or a certain amount of Gold with dollar settlement. Euro and Gold rise against the dollar and the dollar loses the advantage of OPEC control.

This is another reason why we must focus all our attention on the evolving €/$ exchange rate !!! Where is the inflexion point ? Euro control over the dollar-reserve !

The substantial dollar weakening after the occupation of Iraq is NOT a coincidence ! This was planned !

Ten BearsScatter Shooting, while wondering what happened to Goldenrod.#10266605/11/03; 16:38:49

"Temporary prosperity based on debt is fleeting, permanent prosperity must be based on earnings. The chains of debt extend through to the as yet unborn." F.A.Hayek

"IF there is a Devil he wears an expensive suit and promises perpetual growth." Green Literature
The fiat dollar system requires perpetual increase in supply for its continued existence. (by definition a Ponzi scheme)

"Dollars are units of control over resources, human, natural, and combinations thereof. When they are no longer accepted and control is fading or lost, war and occupation
are more direct methods of control." recent internet poster

"The financial corporations have sucked the life from the industrial corporations, by granting easy loans, changing the rules by which the industries operate, forcing bankruptcy,and then individually buying assets for pennies on the dollar. (Bethlehem Steel, and LTV Steel's assets recently acquired by ex-Rothschild banker) Utilities and airlines are next. Stockholders, employees, pensioners and taxpayers are left holding the bag." poster at a large utility board

Greenspan over the trough in the business cycle...historically, both fiscal and monetary policy have been used to control money supply;however, since Sir G.S.'s reign, monetary policy has been used almost exclusively to expand. Does the span go all the way over the trough or only to the middle, and to a great fall?...Got Gold? Ten Bears

"The term 'free markets' has come to mean freedom to rig the markets via derivatives with a lack of visibility." internet

"The futures market may trade units far in excess of the actual amounts existing in a commodity. Prices are controlled by market makers using this leverage.The fix can be broken only when there is a run on the commodity. A run on a fractional reserve bank is a good analogy. Still, when such a run occurs, the market makers may prevail by changing the rules...example: Hunt brothers and silver" finance lecture

"No other subject in economics is as taboo as the study of money." J. K. Galbraith

"The commercial community has been subjected to alternate epochs of monetary contraction and expansion in which much of what it accumulates at one period is filched from it at another." Alexander Del Mar

"Two centuries ago (now three) the moneylending class were comparatively poor and humble. Now they drag the entire country by the heels and their retainers fill every department of government, every avenue of profit, and every source of influence" Alexander Del Mar

Thanks,to the posters on this board for sharing their knowledge, and to the proprietor for providing this site...Dollar down 20%, and certain foreign currencies and gold up since the dollar peak in April 2002...Ten Bears.

slingshot21Mabry Msg#102652#10266705/11/03; 18:00:21

New Stadium

You live in North Florida?

TownCrierOfficial: Britain Will Someday Join Euro#10266805/11/03; 18:37:12

AP Finance News (05/11/2003) -- The government believes Britain's membership in the European single currency is a matter of when, not if, a senior Cabinet minister said Sunday.

Leader of the House of Commons John Reid said an upcoming assessment of whether the economic conditions were right for entry was only a "short term" conclusion.

"It is a decision for now, it doesn't bind us for any specified period in advance because the decision we are taking is not whether we will join the euro but it is when we will join the euro," Reid told Britain's independent television network ITV.

...[Brown said in an interview Sunday] "I have always been pro-Europe. And by history, by geography, by economics we are very much part of Europe,"....

"It would be entirely the wrong policy to take the Conservative Party's view on this issue. They would refuse to join the euro even if it was in the national economic interest to do so.

"That is to rule out the euro on grounds of dogma, something that is unacceptable to me."

-------(see url)------

As with much that has been discussed here in the earliest stages of event, a matter of when, not if.


R PowellSinclair#10266905/11/03; 18:48:42

He's still bullish on gold .....

"Well, the watershed announcement of last week means to the "establishment" the absolute opposite of what made me leave gold in 1980. It is a world-wide central bank invitation to inflation. "Fighting deflation is what makes gold go up. Fighting inflation is what makes gold go down."

Where is all the money that the Fed. is creating going? Is it going into equities again, thus prolonging the war rally?

The dollar index number opened lower tonight and POG was up a little. Sinclair also thinks the opening of personal gold ownership in China will create enough demand so as to raise POG even more. He says this will happen in 20 days. He's looking for a correction in silver as am I but it may not happen if Spot and Spike run up the POG too fast. Easy boys, just a few dollars every day would be nice.

TownCrier"We shall have the hyperinflation."#10267005/11/03; 18:49:10

NEW YORK (Reuters) - Are the Federal Reserve's latest hints about the dangers of deflation in the U.S. economy a signal that Treasuries and the dollar could be teetering on the brink of a Japan-style scenario of falling prices?

...even the slim chance of deflation in the United States, which would imply a gloomy economic backdrop with widespread erosion of dollar-denominated investments, is raising market analysts' eyebrows.

In such a situation, the Fed could be forced to intensify its already considerable efforts to slash interest rates in a bid to stoke demand for goods and services...

...Any further declines of dollar-denominated bond yields would exacerbate the already marked dollar weakness, being driven by investors seeking higher-yielding currencies elsewhere. ...even mild price declines in the United States could cause the greenback to fare much worse than the yen.

While the yen has withstood underlying weakness in Japan's economy, buoyed by the nation's current account surplus, the dollar is being weighed by the wide U.S. current account deficit.

"The dollar would be in a more difficult position to withstand deflation because we in the U.S. are (a country of) borrowers. In the case of the Japanese, they are net savers," said Michael Cheah, a fixed income portfolio manager with SunAmerica Asset Management in New York.

------(see url for article)-----

(hyper)IN' instead of DE' because politics drives the path of least complaint.


21mabrySlingshot#10267105/11/03; 19:39:57

Northwest Ohio, Toledo Mudhens
Black BladeGold Bounces and USD Slumps#10267205/11/03; 19:41:21

Gold is taking a nice little bounce up $1.30 in Hong Kong and the USD sinks toward sub 94. It could get a bit more "interesting" tonight but the real story is that the dollar has no way to go but lower.

- Black Blade

slingshot21 Mabry#10267305/11/03; 19:51:24

Baseball AAA

Everyone in AAA seems to be getting a new stadium.

Jacksonville, SUNS


CytekWhen it Snow's it pours- and Gold will fly#10267405/11/03; 20:06:43

Welcome [Sign In] To track stocks & more, Register
Financial News
Enter symbol(s) BasicDayWatchPerformanceReal-time MktDetailedChartResearchOptionsOrder Book Symbol Lookup

Euro Hits 4-Year High on Snow Comments
Sunday May 11, 7:26 pm ET

TOKYO (Reuters) - The euro hit another four-year high against the dollar on Monday after U.S. Treasury Secretary John Snow said a cheap U.S. currency would help U.S. exports.
"When the dollar is at a lower level it helps exports, and I think exports are getting stronger as a result," Snow said on a U.S. television program on Sunday.

On another program, Snow said Washington was committed to a strong dollar but that its value would be set by markets.

"The fact that he mentioned the benefits of a weak dollar could be taken as a sign that he accepts weak dollar. His comments will set the tone of the market this week," said Shogo Nagaya, forex manager at Nomura Trust and Banking Corp in Tokyo.

The dollar has been steadily weakening in recent weeks on doubts about the outlook for the U.S. economy and due to lower U.S. interest rates compared to those of other currencies.

As of 7:20 p.m. EDT Sunday, the euro was at $1.1572/77 (EUR=), up about three quarters of a percent from about $1.1490 in late U.S. trade on Friday, and hitting its highest level since January 1999.

The single currency also hit a record high against the yen, touching 135.40/52 yen (EURJPY=R) from around 134.67 in New York.

The dollar's slide against the yen was curbed by wariness that Japanese authorities could intervene to stem the yen's rise.

Like we didn't know this allready, but now joe sixpack knows it also. Wonder if joe sixpack will buy some Gold, probably not, just another sixpack.

Clink!@ Belgian your #: 102665#10267505/11/03; 20:50:13

You said :-
The substantial dollar weakening after the occupation of Iraq is NOT a coincidence ! This was planned !

My comment :-
I was amused recently when Colin Powell warned Jacques Chirac that France would have to face the consequences of its opposition to the war. On the superficial level, it's not difficult to see why he said it, but to us here it would seem that the warning should have been in exactly the opposite direction ! There was a very recent article at the Eagle which described the forcing of the US from the gold standard by de Gaulle back in the late sixties. Putting this an a few other bits and pieces together, we have :-

1/ France was the principal opponent to the invasion of Iraq.
2/ France is the only major country with huge, intact gold reserves (3000+ tonnes) with no leasing. They could be founder members of this forum !
3/ Chirac is a 'Gaulist' politician.
4/ Last but not least - the finance minister under de Gaulle was none other than (a very young) Valerie Giscard d'Estaing, later president of France. And to say that he is still active in politics, he is chairing the committee discussing the role of a European president.

So, could the train of thought be 'The last time we wanted to teach the Americans a lesson, we used gold, and it worked. Let's try it again !' ? And it won't just be the next ECB president who will be French !


Dollar Billfrom MK#10267605/11/03; 21:03:26

************the ECB left rates where they were despite heavy pressure from exporting manufacturers.
The Fed's actions (letting the dollar slide) will shift the onus on to the euro-zone to become the global consumer of last resort. And while many economists have been hoping for a rebalancing of the world economy for years, a question remains whether the eurozone is ready for the role the currency markets are inviting it to take up.

In that regard, the ECB's rate decision is a step in the right direction. So, it is now the United State's turn to rebuild its productive sector. And Europe and Japan's turn to become consumer. If it doesn't happen, we do not hold out much hope for the world economy. If the policy is not "enlightened" (as some will argue in the weeks ahead as this all sinks in), it is at least pragmatic -- and from that it will derive its staying power.**********

This is a combination of MK thinking and the Financial Times. I keep stareing at it.

Dollar Billa currency traders opinion#10267705/11/03; 21:53:15

Jim O'Neill, global currency strategist for Goldman Sachs, expects the dollar to sink for four to five years more: "We are nowhere near the end."

GS is a de facto agenct of the Fed. For one of their analysts to go on record being bearish on the dollar after it has already experienced such a slide is really suspicious to me. We all know that the normal human reaction is to be bearish at the bottom and bullish at the top. His remarks encourage the typical emotional reaction. based on this alone I would expect some strong support to come under the dollar RIGHT HERE blowing out all the dollar shorts in the world.

Dollar Bill(No Subject)#10267805/11/03; 21:58:23

Even though Treasury Secretary John Snow officially reaffirmed Washington's strong-dollar policy last week, market watchers are skeptical because the United States has much to —gain from a weak dollar. It would raise the price of imports and entice Americans to Buy American—effectively importing a welcome bit of inflation but also exporting deflation, with all its crippling effects (following story).

But there are a few snags in the gradual-correction scenario. The U.S., European and Japanese economies are all sluggish, and could all use a cheaper currency to boost exports—but they can't all devalue at once. And governments may intervene to protect domestic markets against cheaper U.S. goods on the ground that America is trying to beggar its neighbors. One reason the dollar made headlines last week is that many European companies announcing first-quarter earnings, including Bertelsmann publishing and Volkswagen, blamed weak sales on the weak dollar. "The next few weeks are going to be critical," warned a London money manager last week, requesting anonymity. "America's interests are in conflict with the rest of the world. Watch for further falls in the dollar, followed by new calls for protection and trade friction. And wear a seat belt."

That was Tuesday. On Wednesday the European Union warned the United States to end a special tax subsidy for exporters or face $4 billion in European sanctions. On Friday Washington responded by leaking plans to file a World Trade Organization complaint against the EU ban on genetically modified foods. The battle begins?

The meltdown scenario is gaining followers. Bernard Connolly, strategist for AIG Trading Group, thinks the dollar must fall an additional 25 percent before it begins to help the U.S. economy—an impossible target at a time when most of the world is too weak to grow without exporting to the United States. The rest of the world, Euro-zone countries in particular, will use all means necessary to protect their economies from an aggressively cheap dollar, warns Connolly. "We can't square the circle at the world level," he says. "I think we're in deep trouble."

It's still unclear how the new dollar politics will play out. Just about everyone agrees that in the long run, the dollar is a better buy than other currencies. The United States still has higher economic growth potential (about 3 percent) than Europe (2 percent) or Japan (1 percent), and that would normally be enough to protect its reserve-currency status were the postbubble world not so out of whack. As it is, notes Gartman, nations that now trade heavily with Europe, but still hold few euros in reserve, are likely to move quietly to correct that imbalance over time. That means selling dollars to buy euros—and the end of cheap loans and easy money in America. Dollar holders, beware.

Black BladeOld Bull or New Bologna?#10267905/11/03; 22:59:51


Doesn't add up

As to the "market looking into the future argument," let me see if I have this straight. Most of the negative economic data are lagging indicators, so the real strength in the economy isn't showing up on the radar screen yet. Accordingly we can run up the "P" because the "E" will be catching up quickly. Is that right? Hmm... We're starting at 30:1, so let's say we run the "P" up to 40 or 50:1, when the "E" catches up won't we be right back at 30:1? Doesn't this sound eerily familiar to the dot-com era when we were told not to worry about fundamentals and numbers that don't make sense? You bet it is, and until this type of speculation is eliminated from the market we won't reach a meaningful bottom where a "real" new bull can get started.

Technically speaking

The April rally has been your typical, garden-variety bull rally in a bear market, otherwise known as a technical rally. These rallies are born from chart patterns and indicators found in the trader's bag of technical tricks. This is by no means to disparage the technical analysts out there, especially since we use the technicals ourselves. But technical rallies can be confusing to fundamental investors unfamiliar with this perspective. Most folks don't appreciate that "terribly oversold" means something completely different to a technical trader than to a fundamental buy-and-hold investor. Where a trader may look for divergences between a monthly, weekly or daily chart, the fundamental investor will look for low price and high yield. Where a technician will see an "oversold" condition on the Dow, our subscribers see "overvalued." For example, the average yield for the Dow since 1929 has been about 4.5 percent. To reach 4.5 percent the Dow would need to decline to about 4500.

Black Blade: Aside from the fun and games, the equities markets are quite overvalued. Even Warren Buffett is pessimistic over the stock market recently saying that "there are few stocks that even mildly interest us".

WaveriderThe Diving Dollar#10268005/11/03; 23:31:20

"The currency headlines are not just big news, they are signs of the shifting balance in global economic power. The dollar is weak in Europe, weak in Japan, weak against every currency save the Brazilian real, signaling perhaps the end of the strong dollar as we have known it, currency trader Dennis Gartman wrote in his insider newsletter last week, finishing with an ominous quote from "a former African central banker" and "seasoned observer of the world." The banker warns that the euro is "slowly but surely easing out the dollar from its half-century dominance as the reserve currency of the world" and raising an immediate threat. Invoking the long history of currency meltdowns, most recently in Latin America, the banker concludes: "The turn for the dollar to melt may be at hand!"

Waverider: This may already have been posted - interesting perspective to see in Newsweek.

Black BladeJob Outlook Clouds Political Horizon #10268105/11/03; 23:44:44


WASHINGTON (Reuters) - By any measure, the Bush administration looks likely to take the United States into a 2004 presidential campaign down hundreds of thousands of jobs -- and under pressure to prove it can fix the problem. As the administration's new team of leading economic officials step up their public push for a "jobs and growth" plan some see as flawed, analysts say the arithmetic implies a bleak prospect for the single issue that means most to voters. Since President Bush took office in January 2001, some 2.7 million jobs have been lost from private-sector payrolls, including more than half a million in February through April alone, according to government statistics. There is little in recent economic data to suggest a sharp resurgence in growth. The most optimistic projections see a recovery of only 1.5 million jobs by the end of 2004, leaving hundreds of thousands unemployed as they go to the polls.

Black Blade: Before the last presidential election I posted that whoever won the election would be looked at as this generation's "Herbert Hoover". Looks like I was right.

Liberty HeadBlack Blade#10268205/12/03; 00:05:54

I remember when you said whoever won the election would be looked at as this generation's "Herbert Hoover".
Boy, I sure hope our next president isn't this generations "FDR". :-)


TopazHere we GO!#1026835/12/03; 03:00:15

Dollar weakas...E-Bonds powering...This could all be over before you guys get out of Bed! Capital won't tolerate their "hard-earned" succumbing to the whims of the speculator for much longer.
Dollar Bill, Index reversal a given imo...don't think we'll see 92 @ this rate.

Black BladeMarket Indicators#1026845/12/03; 04:44:08

US Market Index futures head lower, the USD could tumble below 94 before long as many observers grow ever more pessimistic, oil and gas head higher as OPEC talks dropping quotas lower, and gold bounces higher ($2.30) on dollar weakness. It could get quite active today as economic outlook dims and dollar is poised to fall much further. Some Asian and Euroland economists suggest another 25% to 30% easing of the dollar as in reality the US appears to have abandoned the "strong dollar policy" while still giving lip service to the now defunct policy. No one is fooled anymore.

- Black Blade

misetichSnow dismisses concerns on US deficit#1026855/12/03; 06:11:01


John Snow, US Treasury secretary, on Sunday dismissed concerns over the record budget deficit projected this year, saying the "soggy" US economy and a commitment to a strong dollar needed stimulus from the Bush administration's proposed tax cuts.

With the federal budget deficit projected to soar to $300bn (262bn) this year, Mr Snow said concerns were "misplaced"
Noting that GDP grew by 1.6 per cent in the first quarter, Mr Snow described the economic recovery as "weak" and "soggy", saying the growth rate needed to be doubled to bring about full employment.
Mr Snow said he would press for the final outcome to be "closer" to the House figure. He said Wall Street "experts" he consulted had predicted a boost to equity values from the proposed dividend tax cut, ranging from a low of 3 per cent to a high of 15 to 20 per cent. A 10 per cent increase would add $1,000bn in wealth, he said.

Snow and Wall Street "experts" in lala land -

All On Board The Gold Bull Express

ZhishengPotent Challenge.#1026865/12/03; 07:22:14

The cartel has its work cut out for it this morning.

If there is is a cartel to cap the supply of gold (and there is considerable circumstantial evidence for this), the weak dollar and the apparent US acceptance of its further weakness in months to come, will tend to work for the disintegration of said cartel: "every man for himself!"

TownCrierDollar slides as Snow stirs "strong dollar" doubts#1026875/12/03; 08:14:06

NEW YORK, May 12 (Reuters) - The dollar tumbled to new lows ... after a remark by U.S. Treasury Secretary John Snow renewed broad skepticism about America's commitment to a strong dollar.

In an interview with ABC This Week on Sunday, Snow said that a cheaper dollar was aiding U.S. exports. His comments reinforced what is widely suspected by market observers -- that America's 'strong dollar' policy has been abandoned in all but name.

...Europe's single currency rose as high as $1.1623 against the dollar in the London session...

Bank of Japan governor Toshihiko Fukui declined to comment on the yen's appreciation when asked about it on the sidelines of a Bank for International Settlements meeting in Basel.

Euro zone central bankers have sounded relaxed thus far about the euro's rise on the foreign exchanges. But analysts suspect that European politicians and finance ministers may be concerned...

---(see url for article)----

Ahem... I'll give you one guess which group is driving the boat. Good for gold.


USAGOLD / Centennial Precious Metals, Inc.Why you should consider diversification into gold...#1026885/12/03; 08:18:03

Swiss gold francs
Gold Today!

Because the phrase "strong dollar policy" is sounding anemic.

While the Treasury Department's half-hearted rhetoric about a "strong dollar" sounds ever less like policy and ever more like pabulum for the media, the FOMC target rate (at 1.25%) by the Federal Reserve (with a bank lifeline discount rate at 0.75%) tells the score loud and clear. In recent Congressional testimony Chairman Greenspan said that there is no "meaningful limit" to the Fed's power to inject money into the economy. And consider the dollar's legacy position as a reserve asset currently being held throughout the world. These are the things that sudden financial crisis and hyperinflations are made of.

In the final analysis -- in times of stress -- paper is only paper.
How solid is your portfolio?

USAGOLD - Centennial is here to help.

TownCrierJonathan told me the rationing of these coins has gone well#1026895/12/03; 08:35:55

Implementing order limits on these three German coins has helped to ensure a larger number of clients have gotten an opportunity to gain the pleasure of ownership of these relatively scarce items. It might not be too late for you to claim your piece of the remaining pie.

Call Jonathan at (800) 869-5115 ext. 110


TownCrierFederal Reserve adds $4 billion#1026905/12/03; 08:45:26

The Fed today manufactured $4 billion as a fresh injection of money supply to the nation's banking system through three-day repurchase agreements in open market operations. The add came even as the market in fed funds was trading in line with the FOMC directive to its NY trading desk. Nothing new there.


CoBra(too)It's A Gold Bull Market - All right!#1026915/12/03; 09:45:42

- Albeit only measured against the US Dollar. It will become a Global Gold Bull Market again - when Gold goes up again against all major currencies.

Since the beginning of the year POG depreciated substantially against AUD (13%), CDN. $ (12%), € 9% and the SFR (5%), while the ZAR is a special story - even if Goldfields did quite well in the latest quarter - the rest of the SA Miners have been badly shaved by ZAR's dramatic appreciation.

The dramatic fall in the US $ value vs other currencies, specifically vs the € already constitutes the most rapid erosion of any major world currency I've ever witnessed. In the US Dollar's case - we're also witnessing the erosion of the value of other major countries monetary reserves - 75% of global reserves are held in US D's - while meantime the delusion of the illusion is held up in the paper asset markets.

How much longer can this game, accentuated by tremendous riks of derivative mega players can be kept up, is anybody's guess. The japanization of the industrialized world may be around the corner. Europe's exporters are already wheezing under the heavy burden of a dramatically and relentlessly appreciating common currency.

Not that I personally would complain, after all I can acquire more physical at the cheap - incidentally a lot cheaper than a year ago - the real question is: How far away would competitive devaluations be from here?

The ingredients for a global meltdown in trade, SM's and any paper assets seem in place ... as is a world depression not seen since the 1930'.

Physical Gold - lastly the only place to weather the storm and retain the value of our hard earned wealth.

Not so cheery - Cheers cb2

JemeJordanFeds Need To 'Raise Debt Limit Before Memorial Day'#1026925/12/03; 09:49:13

Feds Need To 'Raise Debt Limit Before Memorial Day'
TownCrierHave you gotten your daily dose yet? Click link, scroll right.#1026935/12/03; 10:46:27

MK's QuickNotes for 5/12/03:
We have a slew of government reports this week to follow SecTreas Snow's "What Me Worry"performance yesterday (on deficits, dollars, international trade, etc.) : Tomorrow we have the trade balance. Weds., retail sales. Thurs should prove to be the big day this week., April Producer Prices, inventories,industrial production and cap utilization -- all the same day -- followed by consumer prices and Michigan sentiment index on Friday.........FT said it best this morning: "Central bank fears of inflation, disinflation, deflation should be underlined this week..." ................Choose your poison. Whatever it is the numbers are likely to satisfy it sometime this week....

TownCrierIncreasing euro sphere#1026945/12/03; 11:26:00

In case you missed this before, this article is dated by a few weeks, still relevant when you try to consider the dollar's changing niche in the world.

HEADLINE: EU Rolls East. Towards Russia?

22/04/2003 -- Last week's EU summit in Greece is already being called historic after ten countries signed a treaty on EU entry. This is the largest round of expansion in the EU's history. On the eve of the summit people in Russia were also suggesting that it could have a historic effect on relations between Russia and the united Europe.

...the closeness of the Russian and European positions regarding the Iraqi crisis, can and should play a role in this.
Secondly, this June will mark the end of a four-year common European strategy for relations with Russia, which was agreed in 1999 and, in the light of recent events, is clearly out of date. The European Commission and the Russia-EU Cooperation Council, which will be responsible for deciding what to do with the strategy, are faced with three choices: to extend the strategy - which is unlikely; to make some changes to it; or to re-examine it entirely. Russia would like any changes to be profound and concrete.

...on his arrival in Greece, Russian Foreign Minister Igor Ivanov stated that Russia and the EU had agreed to set up a working group for a step-by-step switch to a visa-free regime. The timescale mentioned suggested this could be done by 2007.

...during discussions of trade and economic issues between Russia and the EU 'the progress that has been made in the energy sector was noted.'

------(see url)-----

As the euro sphere grows, the dollar loses footing. The reserve asset status of the dollar makes this otherwise natural adjustment among currencies (usage and exchange rates) particularly problematic. A diversification into tangible gold should
help see you and your savings (purchasing power) travel safely through the transition.


ZhishengUp into the Close!#1026955/12/03; 11:30:55

And a $351.20 close in the Comex June futures.
Black BladeThe de-regulation of the Chinese gold market#1026965/12/03; 12:41:51


Possibly among the most significant developments in the global gold market in recent months have been the steps taken by the Chinese authorities with respect to the local gold market. Until the start of this decade, the Chinese gold market was relatively tightly controlled by the Chinese Government, but this is now changing significantly. The jewellery market, which has performed disappointingly in recent years, will soon have the oxygen of flexibility, and the scope for substantial improvements.

Last October saw the Shanghai Gold Exchange formally open for business, and at the end of March 2003 the State Council altered the rules governing both domestic and international participation in the gold fabrication market within China. Both of these are pivotal developments, highlighting a long process of hard work that has been going on behind the scenes for a number of years.

It has been reported that private financial assets stand at about RMB10 trillion (US$1.208 trillion), but most of this pool has been sitting in bank deposits. Of these funds, individual bank deposits totalled RMB8.47 trillion at the end of 2002 (about US$1 trillion) and foreign currency bank savings deposits (mainly in US dollars) reached over US$81.1 billion, plus about RMB1 trillion (US$120.8 billion) cash in residents’ hands.
In China, this pool of individual bank savings is called the "Crouching Tiger". There are numerous markets competing for this tiger's attention, of which gold is only one. To put the numbers into context; a successful conversion of 0.1% of local private bank savings into gold bullion would mean the mobilisation of approximately $940M, which at $330/ounce (the spot price as we write) would purchase almost 90 tonnes of gold. The early interest already shown by local individuals for some small bars (10 grammes up to one kilo), on offer by opportunistic traders despite the fact that channels are not yet officially open, suggests that, while the Tiger may not live exclusively on a golden diet, he is likely to be a frequent visitor at table.

Black Blade: The Chinese gold market looks set to explode as Chinese regulation of the Gold Market relaxes restrictions on private ownership. Authorities have said that they will do the same for the platinum trade. Just a fraction of Chinese funds flowing into a small Gold position will have dramatic effects on the physical market even as the Central Asian "wedding season" comes to an end in the next couple of weeks. Even so, Central Asian demand will pick up steam again in August as crops are harvested (and this year looks like a possibility of bumper crops over last year's drought) and Indians begin to accumulate gold and silver as part of their savings and gear up for the traditional buying in a couple of months as the "festival season" gears up. Meanwhile a weaker U.S. dollar will also drive gold prices going forward while higher Indian inflation may slacken if the dollar soon inflates once the Fed goes about the "planned" reflation policy.

Quite a bullish outlook for the physical gold market will excellent graphs illustrating exciting potential (the report is in pdf format).

Waverider** VIP ** DAILY GOLD MARKET REPORT #10269705/12/03; 13:34:06

"There should be no doubt now that the dollar will continue to weaken as even though U.S. officials say that they publicly support a "strong dollar policy", the reality is that they support a "weak dollar policy", or as the Europeans are calling it now – ‘a policy of benign neglect". Given the raging "cat fight" between the Bush administration and the increasingly hostile U.S. Congress over the fiscal stimulus package, economic reforms, and tax cuts, and the difficulties in passing effective legislation to head off looming financial and economic disaster, it is quite apparent now that by abandoning the "strong dollar policy" the Bush administration is hoping to stimulate the U.S. manufacturing base by making U.S. goods competitive in a shrinking world market."

Waverider: Thanks for the DMR Black Blade!

Black BladeGood Luck or Bad Luck?#10269805/12/03; 14:01:39

Gold investors over the last few years have had a rough time as speculative mania in the "New Economy" passed by, and a real estate mania followed on the heels afterward. Yet precious metals remained in slump mostly due to the artificial support of the U.S. dollar. Others would look to the precious metals investor and say "What bad luck". Well, times do change and that leads me to an old Chinese story about a man who had a horse and a son:

One day his horse broke out of the coral and fled to the freedom of the hills.

"Your horse got out" What bad luck" said his neighbor.

"Why?" the old man responded. How do you know it's bad luck?"

Sure enough, the next night the horse returned to his feeding and watering, leading 12 wild stallions with him! The old man's son saw the 13 horses in the coral, slipped out and locked the gate. Suddenly he had 13 horses instead of none.

The neighbor heard the good news and excitedly came to the old man saying: "Oh, you have 13 horses," the neighbor said. "What good luck".

He old man responded, "How do you know that's good luck?"

Some days later his strong, young son was trying to break one of the wild stallions only to be thrown off and break a leg. The neighbor came by that night and passed another hasty judgment: "Your son broke his leg, What bad luck!"

The wise old man answered again, "How do you know it's bad luck?"

Sure enough, a few days later a Chinese warlord came through and conscripted every able-bodied young man, taking them off to war, never to return again. But the son was saved because of his broken leg.

The moral of the story – What is fortune? What is misfortune? Precious metals investors have had an opportunity to accumulate physical precious metals at fire sale prices subsidized by a foolish U.S. government "strong dollar policy". This run is far from over as we are just in the beginning stages of a primary Bull Market in precious metals.

- Black Blade

CoBra(too)Good Luck or Bad Luck?#10269905/12/03; 15:10:49

As it seems, BB some of us in areas of appreciating currencies vs the USD get their opportunity to clean up the rest of the precious.

Nice allegory - thanks - cb2

Black BladeForeigners still shunning dollar-backed assets#10270005/12/03; 15:12:56


Foreigners continue to show disinterest in U.S. assets like stocks and bonds, with volatile financial markets and continued economic weakness keeping them away. The problem is we need their money. The United States has become so reliant on foreign investment and borrowing that without those dollars it is going to be difficult to propel growth. They started pulling back when the bear market began three years ago, and the retreat has only been more pronounced in the last year as anxieties grew over owning U.S. assets. Also problematic has been the lack of compelling corporate investment opportunities here. With the economy's sluggishness lingering, there is little incentive to take on new business projects. When foreigners aren't making investments here, they don't need to convert their money into U.S. dollars, so that drives the greenback down.

Black Blade: The US needs a weaker dollar even more. That is the US must reflate to stimulate the economy so any talk of a "strong dollar policy" is simply idiotic and as most everyone knows it, foreign investors included, investors will simply continue to brush off the yapping of John Snow and others about such support. The weaker dollar also helps the manufacturing sector compete in a world of shrinking opportunities. This realization has set in for not only PM and bond investors, but also for stock investors who see the weaker dollar and continued long-term reflation as a necessity for eventual economic recovery. That is why there was a rally "across the board" even though the equities rally is somewhat suspect.

Black BladeCB2 – Gold Accumulation#10270105/12/03; 15:32:17

It is a "win-win" situation for those interested in gold. The weaker dollar makes gold more affordable for those with stronger currencies as it becomes more affordable leading to more "off take" as it were. It also leads to more "wealth preservation" for those such as in Japan who are concerned about the destruction of the Yen. Then there are the added "kickers" such as the liberalization of the Gold market in China and India where demand will rocket over the next several years as an emerging middle class grows, and with the added "dehedging" from major gold producers adding more "ooommmph!" to the demand side. Gold is shining brighter day by day.

Actually, producers need a long sustained "comfort zone" of about $380-$420 an ounce before any real significant gold exploration activity occurs. A lot of uncertainty persists for foreign gold producers. BTW, it would be "interesting" to hear how the G7 meetings go later this month - oh to be a "fly on the wall" during some of those meetings.


- Black Blade

Black BladeHartford cutting 1,500 jobs #10270205/12/03; 15:46:08


NEW YORK (Reuters) - Insurer Hartford Financial Services Group Inc. said Monday it will cut 1,500 jobs, or about 5 percent of its staff, and boost its reserves for asbestos claims by $2.6 billion.

Black Blade: Meanwhile, Hartford will do its part to insure that there's growth to the "Bone Pile" by adding another 1,500 logs to the fire.

BTW, breaking news – a car bomb exploded in Riyadh in a compound housing foreign workers. Reports are sketchy but it appears that there are casualties.

Cavan ManSaudi terror?#10270305/12/03; 15:50:24

US compound 'on fire after blasts'
From correspondents in Riyadh
AT least two explosions have been heard in the Saudi capital and have started a fire in a compound housing US nationals, witnesses said.

They said the blasts were in eastern Riyadh and that at least one of them occurred inside the compound.

An interior ministry source would not confirm the explosions and said only that an official statement would be issued later.

Black BladeInsiders' stock-selling spree ominous#10270405/12/03; 16:01:50


Just when the average investor may be thinking of getting back into the stock market, many company insiders are getting out. Statistics gleaned from three firms that track legal insider buying and selling show a sharp rise in insider selling at a time when Wall Street is experiencing its best run since last fall. Even though the Standard & Poor's 500 index is up 20.2% from its Oct. 9 bear market low after closing at nearly its highest level of the year Friday, roughly seven out of every 10 recent insider transactions were "sell" orders, according to Market Profile Theorems. In addition, insider buying plummeted 40% from March to $70 million, says Lon Gerber, director of insider research at Thomson Financial. Insider buying has fallen below $100 million only three times since 1998. "I keep looking and waiting to see people stepping in (to buy), but there's no sign of it," Gerber says.

Black Blade: I have also noticed the surge in insider selling, but there is so much else going on in the markets that I haven't found time to mention it. The trend usually goes like this: 1) insiders and institutions buy; 2) funds jump in driving prices higher; and 3) finally the small fry jump onboard after the "run up" has largely occurred while insiders and institutions bail, leaving the small fry "standing without a chair when the music stops". Like all pyramid scams the stock market really isn't all that different. That's why a "portfolio insurance" position in safe haven investments like gold and silver are a necessity. The small fry are "out of the loop" and usually don't have or take the time to watch the market fundamentals shift to and fro.

misetichU.S. deficit forecast up again amid tax cut debate #10270505/12/03; 16:54:27;jsessionid=HH5F0GXCIEFPECRBAEKSFEY?type=bondsNews&storyID=2725651


WASHINGTON, May 12 (Reuters) - The U.S. government will run a record deficit of more than $300 billion this year as increased military spending and weak tax revenues continue to eat into the federal budget, congressional budget analysts said.
In its monthly budget report, released late on Friday, the Congressional Budget Office boosted its 2003 deficit forecast from the $246 billion it last predicted in March


CBO is optimistically predicting ONLY $300 billion deficit for the year - however the Iraq War is not included, neither is the interest paid on the $6.4 trillion, neither the off-budget items, neither other tax cuts, neither the possible State budgets bailouts

All in all a grim picture for the US $ as the reliance on foreigners to keep on funding is getting extreme

All On Board The Gold Bull Express

CoBra(too)John Snow's Statements ...#10270605/12/03; 16:55:49

...Lend some credibility to global warming - they seem to melt away faster than the last spring snow - and only leave a moist, or is it wet feeling.
If i would be really snide, which i'm not i would suggest diapers ... oh, no, not for melting Snow, just for the leakages and the utility of the of the aging USD as "THE" global reserve currency.

Washington, May 11 (Bloomberg) -- U.S. Treasury Secretary John Snow said he continues to support a strong dollar and he predicted President George W. Bush's tax cut would fortify that by boosting a ``soggy'' economy.

Here's some more (of the same from official main stream, gleaned from the Cafe):

``We believe in a strong dollar,'' Snow told ``Fox News Sunday.'' ``The best thing we can do to have a strong dollar is to see that the fundamentals of the economy are strong and that's why we come back to the president's jobs-and-growth plan.''
Snow spoke after a week in which the dollar fell by the most against the euro since March and traded within 0.5 percent of a four-year low. It has dropped in seven of the last eight weeks and has fallen 21 percent against the euro and 10 percent against the yen during the past 12 months.
The Treasury chief projected that the dollar would benefit from a more vibrant economy. He used appearances on four television news shows to say the Bush administration is focused on securing a tax cut to gird an economy.
Indicating acceptance if not endorsement of the dollar's drop, Snow said ``the dollar's value gets set in competitive exchange rates,'' and he told ABC's ``This Week'' that a lower currency ``helps exports, and I think exports are getting stronger as a result.''
Exports fell by $8.6 billion at an annual rate in the first quarter, almost half their decline of the previous three months and the weaker currency is helping boost profit at companies including 3M and United Technologies by making their goods cheaper overseas and increasing the value of international sales when they are converted back into dollars.

... Wow, what a vexing guy! BTW always have a diversified group of media to sell the stories back to the public and pretend that's what you've meant, anyway!

Not being a linguist, i do feel a "snow job" is the equivalent of an unnessary job - as the sun is going to take over the clean up eventually and is quite the opposite of Sysiphos - John Snow might as well melt away to history as his pronouncements are to say the least divergent, if not outright oxyMORONic.
- And as it may be - he would just beatifically fit in with some other members of this current admin to fit into this (ir-)realm of superpower status of total idiocy. (Please, friends don't take that as a personal insult ... i just feel the WMD's -not ...yet... found in Iraq ... are a clear and present danger - and superiority, even only militarily is ALWAYS a danger).

WAT, lastly, means occupation of the Homeland - as Patriot Act.I manifests and PA.II will allow the government of the US of A to occupy the rest of it. 1984 - George Orwell revisited ... Or, do you feel i'm a bit degenerated? Hopefully so, as my formerly occupied country was liberated from the liberators, liberating it from its liberators.

--- Dam'n it! As i was looking forward to a GWB admin to replace a rotten Clinton/Rubin displacement of ethics,i do feel like a fool. I feel like cheated by my best friends from Purgatorio to outright hell - and that's where i feel the neo-cons. should be privileged to roast themselves from bloody to well done!

Not sorry - needed the rant ... cb2

PS: BB - yeah ... what a windfall! Almost like free Gold!

misetichCommerce Echoes Snow Dollar Comments #10270705/12/03; 17:12:27


RESTON, Va. (Reuters) - The U.S. dollar's recent fall is improving prospects for exporters, a Commerce Department official said on Monday, echoing Sunday comments from Treasury Secretary John Snow that raised questions about Bush administration dollar policy.

Kathleen Cooper, undersecretary of Commerce for economic affairs, told a Commerce conference on international trade the dollar's drop was giving U.S. companies "somewhat more pricing power" on sales to Canada, Japan and "especially" nations of the European Union, as well as at home.

The strong US $ policy is dead - in an era of slow global economic growth the impact on US exports will be minimal

US is reliant on imports and higher prices do not augur well for margins or consumers who are tapped off

It is interesting that neither Mr. Snow or the Commerce Dept has not made any statements on the effect on those foreign investors who have lost a bundle in currency exchange flactuation recently - and who are poised to add to their losses as the US $ continues its descent

Time will tell

All On Board The Gold Bull Express

misetichEU ministers meet to discuss rising euro #10270805/12/03; 17:22:32


BRUSSELS, Belgium (May 12, 3:40 p.m. PDT) - European finance ministers kicked off two days of talks Monday dominated by concern over lethargic growth, swelling budget deficits and a euro rising to four-year highs against the dollar.

Belgian Finance Minister Didier Reynders suggested that the euro's rapid ascent gave the European Central Bank scope to cut interest rates to boost the economy.

"We have more room (to) maneuver on the monetary side," he said.
Although the strong euro hurts European exporters, it does help keep inflation under control by taming the price of dollar-denominated oil and other imports
"On balance a strong euro is in the interests of the euro area and the world economy," said Pedro Solbes, the European Economic and Monetary Affairs Commissioner, after a meeting of ministers from the 12-nation euro-zone.

However Solbes warned the effects of the euro's race to near record levels were not yet clear. "Our concern today is to avoid excess volatility and any overshooting," Solbes told a news conference.

Overall, Reynders said the euro's rise was good for Europe's economy.

"We want to have a strong euro," he said. "It's now more in line with economic fundamentals."

The Euro is back to its "IPO" introductory level as it readies to increase its reserve currency market share and establish a long term base

All On Board The Gold Bull Express

misetichChristodoulakis says strong, stable euro good for EU, global economy UPDATE#10270905/12/03; 17:26:50


BRUSSELS (AFX) - Euro group president Nikos Christodoulakis said a strong, stable euro is good for the euro zone and the global economy, and has helped curb inflation.

Speaking after euro zone finance ministers met here tonight, he also said the reduction of geopolitical uncertainty and the resulting fall in oil prices means the economic recovery forecast for the second half of the year "seems increasingly likely".
Next year, growth should accelerate in line with the European Commission's spring forecasts, he said.

On the euro's rise, he said this "has contributed to contain inflationary pressures and thereby to support purchasing power and domestic demand."

He added: "A strong and stable euro is in the interest of the euro area and the global economy. The exchange rate of the euro needs to reflect economic fundamentals."

It appears the stage is set for a European interest rate cut

All On Board The Gold Bull Express

silvercollectorEurope is unwise to ignore deflation fears#10271005/12/03; 17:35:57

The other side of the coin??


"Sickly economies, soaring budget deficits, Japan-style structural problems and market rigidities, and a central bank that remains stubbornly fixated on inflation have helped to produce the sort of conditions where deflation can take root. Add a soaring currency to that toxic mix, and you have a recipe for big trouble"


"Yet Mr. Duisenberg, who is mercifully nearing the end of his term, and fellow members of the ECB's governing council continue to sit on their hands and fret about inflation. No wonder critics have started asking whether this bunch has been smoking funny cigarettes."

Does this kind of article provide strength to the concept that many currencies are racing to the bottom? Does Mr. Roach have a point in that global deflation is the next step? Are they correct in saying that other countries have more to lose that the US with a depreciating currency? How does this play out for equities, bonds, gold?

misetich "Nobody seems to care about deficits any more. It's truly stunning," former White House budget director and chief of staff Leon Panetta told Market News International.#10271105/12/03; 18:05:53


Private analysts say the budget deficit could hit $450 billion for
the current fiscal year and then widen in the future if additional tax
cuts or spending are approved.
A recent report by Goldman Sachs argues the U.S. federal budget
could easily accumulate deficits of $4 trillion over the coming decade.
This is, to put it mildly, a huge swing from the $5.6 trillion in budget
surpluses that were projected in January of 2001.
"We are going through one of the most breathtaking fiscal reversals
ever and no one seems to care. I just don't know what it will take to
get people's attention. I take that back. I do know. It will take
presidential leadership or a crisis," he adds.

Military spending, homeland security costs have been underestimated - both in its effects on the budget deficit and economic growth as the burden of security has added to affect productivity levels and overhead costs

With the savings rate plunging the dependancy on foreign investment gets higher and higher . Risk Premium?

All On Board The Gold Bull Express

misetichReality Check:US Cargo Execs Report Strong March/April Inflow>#10271205/12/03; 18:15:15


NEW YORK, May 12 (MktNews) - Massive inflows of Asian goods landed
on U.S. shores in March and April as importers sought to beat a May
deadline for rate increases and handled cargo held back by the Chinese
New Year in early February, say transportation executives.
The weaker dollar lifted exports of agricultural products and
low-value bulk goods but not nearly at the levels it would take to
narrow the trade deficit, they say.
A preliminary early May sounding indicates carriers continue to
enter U.S. ports fully loaded despite rate hikes estimated at around 40%
for trans-Pacific containerized cargo, which carriers demanded and
generally got.

Trade numbers being reported tomorrow - should be interesting -

Little improvement if any on exports - here's another excerpt from the same article

"Who do we need most to start buying our
exports? The Chinese," he said. "I don't see anything changing until we
get a reasonable exchange rate with the Chinese yuan,

All On Board The Gold Bull Express

CoBra(too)New Greenback?#10271305/12/03; 18:16:19

John Snow will lift the mystery of the new US Dollar Bill as of tomorrow.

I do understand it won't be green ... so, just in case - i brace myself for another ... pink slip!

... Refrain from any more comments ... so hope it'll buy some Gold - Hu? ... cb2

GoldiloxLinks#10271405/12/03; 18:22:32



Your news links are taking me to a page which lists a number of stories, but none have the same title that you list. There is also a login box on the page. Do I need a login to find the stories you are referencing, or am I just getting confused too easily?


misetichThe Diving Dollar - The currency headlines are not just big news, they are signs of the shifting balance in global economic power#10271505/12/03; 18:31:10


the end of the strong dollar as we have known it, currency trader Dennis Gartman wrote in his insider newsletter last week, finishing with an ominous quote from "a former African central banker" and "seasoned observer of the world." The banker warns that the euro is "slowly but surely easing out the dollar from its half-century dominance as the reserve currency of the world" and raising an immediate threat. Invoking the long history of currency meltdowns, most recently in Latin America, the banker concludes: "The turn for the dollar to melt may be at hand!"
Does the fall end with the dollar's losing its status as the world's reserve currency or melting down like the Argentine peso, as the African banker warns? "We think not," wrote Gartman, "but we are certain our friend is right that the central banks of the world" will shift away from a "preposterously imbalanced" bias for holding dollars above all other currencies.
If American prices are at risk of falling, why hold dollar assets? After the Fed's remarks, the dollar fell a further 2 percent against the euro. Jim O’Neill, global currency strategist for Goldman Sachs, expects the dollar to sink for four to five years more: "We are nowhere near the end."
"America's interests are in conflict with the rest of the world. Watch for further falls in the dollar, followed by new calls for protection and trade friction. And wear a seat belt."
Bernard Connolly, strategist for AIG Trading Group, thinks the dollar must fall an additional 25 percent before it begins to help the U.S. economy—
As it is, notes Gartman, nations that now trade heavily with Europe, but still hold few euros in reserve, are likely to move quietly to correct that imbalance over time. That means selling dollars to buy euros—and the end of cheap loans and easy money in America. Dollar holders, beware.

Great article - well worth reading

All On Board The Gold Bull Express

GoldiloxRolly-Coaster Ride#10271605/12/03; 18:38:04

Spot and Spike are outside playing on the Jungle-Gym.
misetichGoldilox (05/12/03; 18:22:32MT - msg#: 102714)#10271705/12/03; 18:41:18

I'm assuming you're referring to the Market News International links ( Indeed you do need to register (its free)

One article is under today's Main Wire Features - Reality Check and the other under the heading " US Budget Experts Say Path To Fiscal Health Is Clear,But Hard " in its main page

GoldiloxNews Articles#10271805/12/03; 18:43:01



silvercollector22 year reversal#10271905/12/03; 18:49:48

"I want to drive home as strongly and as clearly as possible that the announcements made by the leadership of the US Federal Reserve and the European Central Bank are going to POSITIVELY and SIGNIFICANTLY change the character of both gold shares and gold.

Up to now it has been the choir buying and selling to the choir. The Gold Community has been trading back and forth with itself totally devoid of new blood entering into that exchange. This is why gold shares have been tired - even those that have ethical management and good assets.

The Gold Community grew out of the slumber of those who were latently positive on gold. When all those potential gold share buyers had entered the market, it was the faster gold positive share traders selling to the slower gold positive share traders that created each market high until the gold market participants just tired of buying and selling to each other. Now an entire, richer and much larger public is about to enter into gold investments.

To make my point I am publishing a Letter to the Editor that was published in the Washington Post on October 3, 1981 concerning gold and treasury instruments. It's been in my files for a while so please pardon the quality of the copy.

Twenty two years ago I said: "My opinion on the market is that opportunity is not simply knocking. It is screaming. The bear market in bills and bonds is coming to an end. An end that will be as spectacular as the 40-year bear market has been in decimating the capital markets. Be prepared to enter the bond market with your capital soon. The opportunity is not in my opinion in gold, even though it will benefit somewhat. Near bonds as measured by December Treasury Bonds look headed to 51 to 53. At the lower end I will be an enthusiastic buyer. Good Luck, have courage. James Sinclair"

I then went to First National City Bank where I arranged a $25,000,000 personal loan for the purchase of US Treasury 10 year bonds. I took 100% of the loan and all my capital from the long gold bull market and paid between 53 and 56 cents on the dollar for 10 year US Treasury instruments resulting in an effective yield of 12 7/8%.

I did this because I believed the Federal Reserve was embarking on a mission to restrict the supply of money by selling bonds to the commercial banks via the New York Federal Reserve Bank's trading department as a result of a decision taken by the FOMC meeting under the leadership of Chairman Volker, a class act and master of his universe.

Now comrades in arms, the absolute opposite event has taken place and has been reported to you in detail. So, today as the US Treasury long and medium bonds are surging into the uncharted stratosphere of new high prices, yours truly, after a full 22 years since the Washington Post article was printed, go on record as saying: "For the long term investor BUY Gold, Buy Quality Gold shares and get ready to go long puts on the 30 year and 10 year US Treasury bonds. Good luck, have courage. James Sinclair."

WaveriderGoldilox#10272005/12/03; 18:51:12

I also see that the US$ index is edging up - a little intervention from the Japanese PTT I suspect - the currency war is on! Cheers,


Dollar Billon the euro#10272105/12/03; 18:52:55

On more structural ground, is it possible that a sustained over-valuation of the euro would prove a "blessing in disguise" and act as a catalyst for structural reforms? According to my colleague Robert Feldman, the Japanese experience suggests that the answer might be yes, but also that a very large misalignment is needed to get there. Being "close to death," to borrow from PM Koizumi's own words is a necessary condition to gain the support of public opinion for reforms, in Feldman's view. According to my colleagues Joachim Fels and Elga Bartsch, reforms in Germany would be accelerated by another year of zero or even negative growth and, in that case, other euro area countries will have to follow. Another school of thought, more popular in Washington than in Frankfurt or Brussels, considers that a super-strong euro would force European politicians to embrace the reflationary policies they have been reluctant to implement so far. No doubt in my view this will be debated at the next G-7 summit in Deauville. Practically, the reflationist camp thinks that the Stability Pact should be scrapped, so that the job of kick-starting the global economy by fiscal means would be more evenly shared between the United States and Europe. This camp also thinks that a super-strong euro will force the ECB to team up with the Fed in a kind of global fight against deflation.

I am not convinced by either camp and I am afraid that on these highly political grounds, there are more opinions than evidence. However, I would concede that the Stability Pact could be one of the collateral damages of a super-strong euro. If, instead of a mild recovery, Euroland is to fall into recession, I do not see how the governments of the three largest countries could cut their deficits below 3% of GDP next year. The rule of thumb is simple: a 1% loss in real GDP growth implies a rise of 0.5% of GDP for budget deficits. In the cases of France and Germany, which are likely to start from 3.5% of GDP this year, abiding with the Pact would imply a discretionary tightening amounting to 1% of GDP, which, I think, is not politically feasible. The same would hold for Italy, which, so far, has managed to conceal the deterioration of its public finances, in my opinion, by selling state assets.

Ditching the Stability Pact would not be in the interest of Europe, where big governments have accumulated huge debts and where baby boomers will start to retire in the coming years. Writing off the Pact would be an incentive for governments to endorse "muddling through" strategies and postpone reforms even more, because it would open the door to higher public spending.

Halting the rise of the euro has become an urgent necessity, I believe. The European Central Bank missed an opportunity to send a first signal last Thursday. But even a bold action on interest rates might not be sufficient to stabilise currency markets. Interventions, if they are backed by a strong commitment to respect the Stability Pact and meaningful decisions on structural reforms (pensions and/or labour markets), should be considered as well.

Dollar Billmore euro thoughts from Morgan Stanley#10272205/12/03; 19:05:01

We analyze how the European economy would react in the short term if the euro rose to USD 1.20 and stayed there. We explain why even a bold reaction from the ECB by means of interest rate cuts might not be sufficient to prevent deflation to penetrate in the continent. Our conclusion is that, in order to prevent the Stability Pact from being the first casualty of the super-strong euro, not only monetary policy but also market intervention and an acceleration of reforms are necessary.

On a unit labour cost basis, 0.90 would be a neutral €/$ rate My colleagues Stephen Jen and Fatih Yilmaz consider that the fair value of the €/$ rate is 1.06, this number being the median output of a large set of econometric models, from interest-rate-differential-based equations to more PPP-oriented ones. We take a different approach here, based on relative total labour costs corrected from relative productivity levels, in other words on relative unit labour costs. International institutions do not carry out this sort of statistical analysis, because of significant discrepancies in national statistical concepts. This reservation aside, we think that unit labour costs comparisons are nevertheless useful to assess the over- or undervaluation of a currency on a pure competitiveness ground.

Once numbers are fully crunched, we find that, since 1997, the euro-to-be, then the actual one, should have traded at around 90 cents to equalize unit labour costs on both sides of the Atlantic. I am the first to concede that the concept of "neutral rate" is neither a predictor for the actual exchange rate nor even a policy recommendation. As econometric models, which "fair values" are in a more or less, depending on their degree of sophistication, long term averages, suggest, the euro area-to-be managed to live with an exchange rate significantly above 90 cents over the last ten years. An important reason for that is often labelled as "non price competitiveness." If customers are willing to pay a premium for German cars, Italian design, or French fashion, companies enjoying this kind of brand premium can be profitable with an overvalued exchange rate. However, there must be a limit to the average customer's appetite for, say, German quality. At 1.17, the IPO rate markets want to revisit, the euro would stand 30% above its neutral rate. There is little doubt in my view that the euro is now overvalued whichever way you look at it.

Regional differences matter, i.e., Germany matters

Although in general high-wage countries are also high productivity ones and vice versa, yet there are still large differences in unit labour costs. On our estimates, only two countries could afford living with a strong euro, i.e., France and Portugal, for which neutral exchange rates are respectively 1.03 and 1.16. On the other hand, the German neutral rate is 0.80, indicating that, at 1.15, the euro is already 45% above neutrality. Since labour mobility is very low in Europe, unemployment is likely to rise further in Germany, despite Berlin's commendable efforts to raise incentives to work. The vicious circle in which Germany is caught is indeed a vicious circle for Europe as a whole: Germany still accounts for 30% of Euroland's output and it is by far the main export market for most of its European trade partners.

A super-strong euro would derail the recovery and initiate deflation

Our recovery script is forecasting a rebound of euro area economies, with GDP growth accelerating to 0.5% per quarter in the second half of the year, after a dip in the current quarter. Note that very poor economic indicators, such as the fall of German orders in March, are consistent with a contraction in the second quarter, without invalidating the prospect for a rebound. However, a super-strong euro could well derail the recovery. Our forecast was based on EUR/USD averaging 1.08 for the remainder of the year. Let us assume for a moment that, because markets often over-react, the correct hypothesis is 1.20, other currencies being stable vis-à-vis the UDS. According to econometric models, a 10% rise of the single currency would cut output by 0.7%. If models converge about the multiplier, they give very different views about the time lags. A fresh view on lags was given by a quarterly model developed by INSEE experts for the euro area (see "Note de Conjoncture," March 2003). According to INSEE's model, the maximum impact on GDP, 1% of GDP, is reached after only two quarters. Not surprisingly, the main casualty is fixed investment as companies both anticipate a smaller share of the global pie but also thinner profits. On the other hand, consumers benefit from stronger purchasing power but the rise of unemployment nullifies this positive effect.

Well, if the euro rallies to 1.20 and stays there for a while, the loss of output at the end of this year would be of the magnitude of the recovery we have in our GDP forecast. Practically, GDP would be down 0.2% in Q3 and up only 0.4% in Q4, instead of growing by 0.4% and then 0.5%. On annual average growth numbers, the main loss would be for 2004 (1.8% instead of 2.3%) although 2003 results would also be trimmed (0.6% instead of 0.9%).

Things might turn even worse than the models suggest

Models assume that economies react linearly to changes in macro inputs. The real world is different, I think, especially for reactions to exchange rate gyrations. I believe for instance that, when a currency is largely undervalued -- this was the case for the euro in 2000 -- an appreciation can be positive for growth, because positive wealth effects would largely overcome negative profitability effects. In the real world, producers know when a currency is far out of reasonable bounds and, in the case of an undervaluation, they know that super-profits cannot last forever. At the other end of the spectrum, if the initial conditions of a currency rise are already over-stretched, then the negative impact on the real economy is likely to be worse than model multipliers suggest, because of self-reinforcing effects on corporate spending, especially if deflation appears.

Models suggest that a 10% rise of the euro would cut inflation by 0.5% to 2%, most of the divergences coming from differently specified wage-price loops. Let's assume that inflation would be cut by only 1.2%, after four quarters. Since our inflation forecast for 2004 is 1.5%, only 0.3% would be left. Whatever the uncertainties regarding the inflation measurement bias, often assumed to be around 0.8%, there is no doubt in my view that, without monetary reaction, Euroland would enter into deflation territory. Note that if inflation drops below 1% next year, it is most likely to print in red ink in Germany. Also, for highly indebted companies, the vicious circle of real debt increased by deflation would start, with straightforward consequences for banks: non-performing loans would rise faster than write-offs. I guess readers already have a feeling of déja vu and may stop here

21mabryJIM ROGERS#10272305/12/03; 19:33:36

Jim Rogers is on cnbc right now until 10 pm eastern time.He was just saying he is long the stocks right now especially the QQQ.
Black BladeMarket Wrap Up – Puplava#10272405/12/03; 21:42:42


Burn the Currency

It has become apparent that traditional Fed policy of lowering interest rates has failed to give us a sustained recovery in the economy. It has in effect given us additional bubbles to worry about in mortgages, housing and consumption. However, it is always reminding the financial markets that it has plenty of other tools at its disposal to fight deflation besides monetary easing. They can monetize Treasury debt by purchasing Treasury bonds in an effort to drive down long-term rates, a policy which they are now actively pursuing. By driving and keeping long-term rates low they can generate another round of mortgage refi's and keep consumption going for most consumers who are now relying more heavily on debt to live. Another option is the purchase of non-dollar denominated currencies in order to drive down the dollar. They can also intervene in the financial markets to prop up stocks when necessary, although they will never admit it other than to say it is a policy option. In Japan, the government is intervening in the stock market in an effort to prop up the market and buying shares of virtually bankrupt institutions.

It is obvious at this point that the "strong dollar policy" has been abandoned. Now there is a deliberate effort to drive down the dollar to restore pricing power for U.S. companies and bring down the trade deficit, which is running around 5% of GDP. The only problem with depreciating your currency is how to make the rest of the market go along with devaluation. The Fed has done a good job of this by scaring the hell out of the financial markets with memories of deflation from the Depression era. Today the dollar plunged at the open, thanks to the U.S. Treasury Secretary talking the dollar down. The stock market response to a dollar fall was to rally. Initially the stock market fell, bonds plunged, and the gold markets went up. Gold pulled back, stocks rose, and the dollar-recouped part of its losses.

Capping The Gold Markets

The only problem the Fed is going to have in devaluing the dollar is the gold market. Gold is a barometer of financial difficulties and confidence in the financial system. As the Fed inflates, it must also cap gold prices. A rising gold market signals trouble for the financial markets, especially for the bond markets. Therefore the central banks, and especially the Fed, must keep gold prices from rising too rapidly. Just as they are trying to manage the financial markets, they must also manage gold. Rising gold prices and rising goods prices spells trouble. Even John Q. might put two and two together when he looks at what he spends each month to live and a rising gold price.

Black Blade: Some interesting commentary by Puplava and interesting graphs. The rumors are flying tonight about widespread Japanese market intervention. The Japanese are coordinating (actually have been coordinating for several weeks now) the buying of stocks from defunct banking institutions. This has had the result of a soaring Nikkei on days when by all means the stock markets should have tanked very hard on grizzly economic data and a crumbling Yen. This has also lured in Japanese and foreign institutions as well as the small fry in the belief that the government will always be there to prop up the indices come what may. The MOF and BOJ have been buying US dollars again as well as selling off Yen. Who is buying Yen no one seems to know for sure. The return on Yen is essentially zero (maybe even negative depending if there is any inflation but maybe slightly positive due to continuing deflation). The Japanese have taken a new policy of not announcing monetary intervention but stated that they will "monitor the situation" and "act accordingly". It is a safe bet that as the Yen tumbled lower toward the critical 115 area that the MOF stepped in "big time" once again in yet another fruitless effort to destroy the nation's currency in the false hope of stimulating the export driven Japanese industry instead of biting the bullet and work to repair the Japanese economy. This will be another short-term stimulus that will fail as in the past. The US has all but said that the "strong dollar policy" is dead and buried with a stake driven through its heart. Unfortunately the Japanese citizens are being played for fools by their very own government. The soaring record level US debt, budget and current account deficits all guarantee that the dollar will continue to weaken further. The "currency war" between the US and Japan continues but the US now holds all the best cards while Japan has used up most of their chips. "Interesting Times"

KiloFrom the Daily Reckoning this morning.......#10272505/12/03; 21:45:02

It is hard to get interested in the stock market. The days
of giddy hallucination - when investors thought they were
going to get rich on IPOs, techs, and dotcoms - are over.

Now, investors still think they will get rich in stocks; it
will just take longer. The Delusion du Jour is that stocks
always go up in the long run, which is no less mistaken
than the IPO mania...but less fun to watch.

The consensus view on Wall Street is that stocks will go up
7%. Where do they get that number? If only they were in
front of us so we could laugh in their faces! They must
just make this stuff up...for they have no more idea than
anyone else what stocks will do, which is no idea at all.

Here at the Daily Reckoning, we put up our hands and
surrendered, unconditionally, to ignorance a long time ago.
Mr. Market will do what he damned well wants to
do...without consulting us, asking our opinion, or giving
advance notice.

Not having any idea what Mr. Market will do, we have
developed a philosophy that is ignorance-friendly. As long-
time Daily Reckoning sufferers know, we don't aim to do the
smart thing...we just try to do the right thing. Nor do we
worry about buying investments that we think will go up in
price...we just try to find those that have fallen so much
there doesn't seem much room left.

S&P stocks, at 33 times earnings, still have plenty of
space on the downside. And looking at Japan for a role
model, we notice that the trip from top to bottom can take
a surprisingly long time. Investors began losing money in
Japan in 1990 - 13 years ago. But the Japanese government
and central bank rigged up so many safety nets, the poor
fellows could hardly find a square meter of hard concrete
on which to fall.

No one pays much attention to Japan anymore. 'Tis a pity,
since if you wanted to peek into the financial future at
any time in the last 10 years, you could have read Japan
like tomorrow's newspaper. And even when people do bother
to look across the broad Pacific, they don't seem to
understand what it is they are looking at.

"Trapped like Japan," begins a CNN/Money article. The trap
the piece is talking about is a "liquidity trap," in which
people stop spending or investing money. Money makes the
world go 'round, as they say. And when people grow so
fearful that they're no longer willing to part with it, the
economic world comes to a halt which, I know I don't have
to tell you, dear reader, is very bad news for central
bankers seeking immortality and presidents seeking

But don't worry about it, says CNN/Money. It's an easy
problem to fix. "You print money until inflation is
introduced to the economy. For savers, inflation means that
the money they have in the bank today will be worth less
tomorrow - so they spend it. For debtors, today's debts
will not cost them as much tomorrow, so they get less
worried about their balance sheets and beginning to spend
as well."

If it were that easy, why didn't Japan get itself out of
the liquidity trap 10 years ago? Why isn't the inflation
rate a positive number in Japan?

We don't know and don't mind saying so. But most analysts,
kibitzers, and shills still struggle against ignorance like
a grown man arguing with his wife; he must know it is
hopeless, but he can't help himself. And who knows, maybe
he will get lucky. Maybe stocks really will go up 7% this
year. And maybe the very same policies that failed in Japan
will work in America.

Then again, maybe not...


Kilo: Kind of begs the question, what if the FED threw an inflation party, and nobody borrowed ? And what comes first, the inflation or the loan ? If someone has to borrow to create new money, doesn't the very act of borrowing negate the lack of inflation ?

Black BladePayouts drop for some retirees#10272605/12/03; 21:51:54

Bad fortune points to state plan's complexity


Most retirees in the Wisconsin Retirement System have had no declines in their monthly benefit checks during the last two years, despite the stock-market downturn. Others - about 25% of the retirees in the defined benefit plan, according to state pension fund administrators - haven't been so lucky. One former state government employee, who asked that her name not be used, said her monthly pension check dropped 7% last year - and she's anticipating an additional 15% decline starting May 1. The reason for the divergence is that the state pension plan offers participants the option of putting half of their plan assets in an all-stock fund. The retiree, whose monthly benefits check has been declining, has slightly less than half her account assets in the all-stock fund. This unusual option that allows participants to choose between two investment funds is one of many features that make the state pension plan difficult to understand and vulnerable to abuse.

Black Blade: Too bad these retirees can't have the freedom to invest their own retirement funds with their own choices of investments. Unfortunately they must rely on the investments within two funds "managed" by so-called "experts".

Black BladeGerman, Italian Economies Stagnate as Euro Climbs #10272705/12/03; 21:56:45


Frankfurt, May 12 (Bloomberg) -- The German and Italian economies probably stagnated in the first quarter as the euro's increase sapped demand for European products and unemployment rose, discouraging consumers from spending.

Black Blade: A grim economic outlook in Euroland too.

RocketmanSilvercollector#10272805/12/03; 21:57:38

Thanks for the post.

Could you please explain what the following snipit from your last entry means. ". . . . go long puts on the 30 year and 10 year US Treasury bonds. " Does this mean to short the US T bonds in that they will be dropping in value in the opinion of the author?"

I ask this because I have done well selling put options behind the rising bonds out to Dec 03.



CaradocRocky and Bullwinkle?#10272905/12/03; 22:05:01

21Mabrey: As long as folks in DC continue to toss billions into the market every few days, I suppose QQQ, SPY, and others will continue to rise. The money does have to end up somewhere or other.

But... recent price action in equities reminds me of a cartoon where Boris Badenov was in front of the rowboat with a megaphone yelling "Stroke! Bail! Stroke! Bail!" Poor Rocky and Bullwinkle were stroking and bailing for all they were worth and -- sure enough -- the boat stayed afloat and actually moved forward.

'Nuff said.


mikalA quiet moment of reflection by a dollar long trader seeing the fruits of his most recent "labor":#10273005/12/03; 22:10:34

"Well would you look at that. I wonder if those doom kooks know it was me again? I couldn't help noticing another oversold dollar index. But this time it was funny how much news and commentary the dollar (and euro) got over a few days. Coincidence? No way Jose. Truth IS stranger than fiction, and I wouldn't want it any other way.
And with the stocks getting virtually "remonetized" from Tokyo to Soho, I had to get a piece of the latest action.
So it wasn't my fault if there was another delicious trading opportunity laid out in front of me. I just got my signal loud and clear was all.
The shorts got their turn to make a killing; now it's mine again.
And I heard the very latest- the financial experts are saying the world won't change overnight!
I didn't think so, 'cause I'm counting on at least a couple more years of this racket. With this kind of set up, it doesn't get any better than this!
Doom. Ha ha ha ha."

21mabry(No Subject)#10273105/12/03; 22:21:06

Cardoc, I was just surprised to hear Jim Rogers say he is long stocks and tech stocks to boot. Although he does have the know how and capital to trade a market.
Black BladeSnow: Forex Intervention Won't Help Japan#10273205/12/03; 22:28:21


MEMPHIS, Tenn. (Reuters) - Japan and Europe shouldn't blame a weaker dollar for their economic woes, U.S. Treasury Secretary John Snow said, adding that devaluing the euro and the yen was not the way to boost their longer term growth. In a wide-ranging interview with Reuters, Snow questioned the effectiveness of intervention as a tool. Tokyo has stepped into currency markets to curb the yen's gains, trying to guard its huge exports to the United States. Snow said intervention would do little to help Japan's economy in the long run. Data last week showed Japan spent 2.39 trillion yen on currency market moves in the first quarter. "As I've said on various occasions, devaluation strategies are not well calculated to breed long-run domestic prosperity," Snow said. "You can't devalue your way to long-term high standards of living." Snow said currency intervention should be kept "to a minimum ... I don't want to be critical of other countries but our broad policy is that we prefer to see relative values of currencies ... determined through open exchange markets."

Black Blade: Nevertheless, Japan is grasping at straws to find a way out of their predicament. Rumors are rampant over Japanese currency intervention tonight.

Black BladeUS Treasury's Snow hopes for debt ceiling deal soon#10273305/12/03; 22:36:14


MEMPHIS, Tenn., May 13 (Reuters) - U.S. Treasury Secretary John Snow said he was hopeful Congress will approve a U.S. debt-limit hike this week to preserve the government's borrowing power and guard against any chance of default. "We hope to get that resolved soon. Maybe next week," Snow said on Friday in an interview embargoed until Tuesday by Treasury. Snow said it was important to settle it before lawmakers break for the Memorial Day holiday in about two weeks' time. "We want to get it done before that." The politically sensitive debt ceiling was last raised by $450 billion in June 2002 to $6.4 trillion. But Treasury began bumping against the raised limit in February and has since had to engage in a series of unusual maneuvers to juggle the nation's cash flow to stay beneath the legally set limit on the government's total debt. The U.S. House of Representatives approved legislation to boost the debt limit by around $980 billion when it passed a budget resolution for 2004 and beyond last month but the Senate has yet to tackle the issue.

Black Blade: Raise the debt limit by another $trillion eh? Hmmm…

steadywheat and chaff#10273405/12/03; 22:45:36

be discriminate. stay on the trail. !
man it is so f'ing great to know the true size and shape of my wealth.!

Black BladeJapan Shiokawa: FX Moves Over Past Two Weeks Too Rapid#10273505/12/03; 22:47:43


TOKYO -(Dow Jones)- Japanese Finance Minister Masajuro Shiokawa reiterated Tuesday that his ministry will intervene to stem yen strength, saying foreign exchange market movements over the past two weeks have been too rapid and unnatural. "The yen has moved some Y5 or Y6 (against the dollar) over the past two weeks. That's too rapid to reflect natural market movements," Shiokawa told reporters. While he declined to comment on whether the government has intervened in recent sessions to weaken the yen, Shiokawa said, "we are watching so that yen doesn't become too strong." The ministry is widely believed to have intervened in recent sessions to keep the dollar supported above Y116.00. Daily money market operations conducted by the Bank of Japan show the ministry may have quietly sold up to some Y1.2 trillion Thursday and Friday to prop up the dollar as it slid toward Y116.00. The government is also suspected of stepping into the market Monday.

Black Blade: It sure looks like intervention has been underway over the last few trading sessions. It should be an interesting G7 meeting. Too bad it isn't open to the public.

Black BladeU.S. Trade Deficit Seen Widening in March: Bloomberg Survey #10273605/13/03; 00:03:20


Washington, May 13 (Bloomberg) -- The U.S. trade deficit widened in March as slow growth overseas restrained demand for American exports, economists said they expect the government to report today. The deficit in goods and services was probably $41 billion for the month, up from $40.3 billion in February, a Bloomberg News survey found. That would be the third-largest deficit on record and the fifth straight month the deficit topped $40 billion. ``Trade flows respond much more to relative levels of domestic demand, not relative currencies, at least not where the U.S. is concerned,'' said Lara Rhame, a foreign-exchange economist at Brown Brothers Harriman in New York. ``I don't think the current impact of the dollar on trade will be dramatic.''

Black Blade: We find out this morning.

TownCrierBusinessWeek Online -- the Super Euro#1027375/13/03; 00:11:38

The almighty euro? It's hard to believe. Almost since the moment of its birth, the European single currency has played a secondary role to the greenback, slipping from a value of $1.18 just after its launch to a low of 83 cents in the fall of 2000.

...Although the euro has been gradually strengthening for months, of late it has been act- ing like a sprinter on steroids: It rose 6% just in April and early May against the dollar, to $1.14 or so. After Germany announced bad unemployment numbers, the euro dipped a bit on May 7, but traders don't foresee a long-term retreat.

All this in an economy -- the euro zone -- that will barely register 1% in growth this year, and whose most important player, Germany, is looking increasingly atrophied. No matter. Foreign investors who piled into U.S. stocks, bonds, and property in the late 1990s are now wary of America's massive current account deficit and its fiscal profligacy.

One analyst estimates that European investors alone have pulled $70 billion out of U.S. assets in the past year.

"What is happening to the euro is really that something is happening to the dollar," says Jean-Paul Betbèze the chief economist at Crédit Lyonnais.

-------(see url)-----

You don't have to suffer the same fate as the dollar. Diversify your holdings. Choose gold -- because, yes, even the euro zone will experience inflation before this economic transition runs its course.

Call Centennial to discuss the form and quantity of coin and bullion that's right for you.


Black BladeDollar Weakens Against Yen After Snow Signals U.S. Won't Buy #1027385/13/03; 00:17:29


Tokyo, May 13 (Bloomberg) -- The dollar fell against the yen after Treasury Secretary John Snow said government buying or selling of currencies has little effect on an economy, signaling U.S. reluctance to purchase its currency to stem the slide. Japan sold its currency between May 8 and May 12 in unannounced trades totaling several hundreds of billions of yen to counter its rise against the dollar, the Nikkei English News reported, without citing anyone. ``Snow's comments read like a snub for Japan's intervention policy, and traders smacked the dollar against the yen,'' said Robert Rennie, currency strategist in Sydney at Westpac Banking Corp. The dollar dropped to 116.50 yen at 2:23 p.m. in Tokyo, after rising as high as 117.51 yen, from 117.01 late yesterday in New York. It also pared gains to $1.1542 versus the euro from as high as $1.1466 and from $1.1563 late yesterday in New York. ``As a general rule, we'd prefer to see interventions kept to a minimum,'' Snow said in an interview Friday. He agreed to the interview on condition his comments not be published until today. The dollar fell to a more than four-year low of $1.1624 yesterday after Snow said the currency's 21 percent decline is helping the nation's exports. ``His recent comments led speculation the U.S. stance on the currency has gradually changed and it would accept the weaker dollar to help the domestic economy,'' said Takashi Toyahara, foreign exchange manager at Nomura Securities Co. The dollar may fall close to 116 yen today, he said.

Black Blade: Looks like we now know the reason for the late day reversal in Tokyo. Apparently Sec. Snow played the Japanese like a fine tuned fiddle by having the his comments released late last night causing the dollar to suddenly weaken against the Yen even as Japanese monetary authorities were apparently selling Yen again. One might say that they were caught flat-footed. That's one big "oops!" in Tokyo. So much for the "strong dollar policy".

TownCrierHEADLINE: ECB May Lower Rates in June to Stem Euro's Rise, Economists Say#1027395/13/03; 00:33:58

Frankfurt, May 13 (Bloomberg) -- The European Central Bank may lower interest rates next month to stem an increase in the value of the euro that is curbing demand for the region's exports, some economists said.

Yields on interest rate futures contracts fell Monday as the euro rose to $1.16 against the dollar for the first time in more than four years. The ECB, which sets the price of money in the dozen European Union nations using the currency, kept its benchmark rate at 2.5 percent last week, a 3 1/2 year low.

"...we haven't seen an appreciation like this since at least the early 1990's,'' said Joerg Kraemer, chief economist in Frankfurt at Invesco Asset Management, which oversees $178 billion. ``I'm pretty sure they will cut in June.''

``We expect the ECB to cut rates by 50 basis points in June,'' said Silvia Pepino, an economist at J.P. Morgan Chase & Co. in London.

...Gernot Nerb, an economist at the Ifo economic institute, which each month surveys 7,000 executives. ``If the ECB cut rates, the attractiveness of the euro would diminish and stabilize.''

-------(see url)------

The last word on the matter really goes to ECB President Wim Duisenberg: ``The development of the euro-dollar rate isn't a cause for concern yet. But as they say in English, we are alert.''

To help you make sense of my comment in the previous post, the dollar zone shall suffer inflation as necessary to save the banking system, and the euro zone shall likely see the euro tag along for part of that inflationary ride in the interests of smoothing the transition with respect to international trade balance.

Gold is your singular "must have" safe haven on either side of the Atlantic to see you through the times ahead.


slingshotRocky and Bullwinkle#1027405/13/03; 00:43:41

Come full circle

"And you thought we were not watching"

Was that you R Powell?

TownCrierSnow's particulary insightful comments#1027415/13/03; 00:48:03

"As I've said on various occasions, devaluation strategies are not well calculated to breed long-run domestic prosperity. You can't devalue your way to long-term high standards of living."

------(see url)-----

Amen. Neither can you get there trying to hold onto an intemperate asset such as national monies that naturally devalue through the banking and political process over its timeline. Put yourself on an "appreciation strategy" with a regular conversion of your paper assets into gold, and you will likely fare better in the try to "upvalue" your way to long-term high standards of living.

Call USAGOLD-Centennial today to get the motion started in your favor.


TopazWhere else to go but Gold?#1027425/13/03; 00:55:54

What appeared in pre-trade to be a strong run at ATL's was thwarted... and finds the Long Yield currently at the 4.65 % level. Weak econ data this week will provide a spectacle to behold imho.
Black BladeBOJ seen buying dollars for yen-dealers#1027435/13/03; 02:05:35


TOKYO, May 13 (Reuters) - The Bank of Japan was detected intervening in the foreign exchange market on Tuesday, buying dollars for yen, dealers said. Traders said the BOJ, acting as an agent for the Ministry of Finance, was seen repeatedly buying the dollar after it fell to as low as 116.36 yen in late Tokyo afternoon trade.

Black Blade: Apparently the rumors are true and the late release of Treasury Sec. Snow's comments upset the planned currency intervention. Very "interesting".

Shapurdollar dropping deja vu#1027445/13/03; 07:19:58

Seeing the Snow fall on Sunday was like revisiting the James Baker 1987 Sunday dollar bash--although much more gentle and softer in approach. OK, republicans have learned from the past--but in both cases the dollar was on a ledge, ready to go and all it took to acknowledge that market fact was a treasury secretary saying so.

However, the Fed is absorbing the Bonds and the ESF is absorbing the stocks, and holding a rag over gold's mouth-- so a dollar that falls doesn't much matter in terms of measurable results, like prices.

It was very amazing to see the cnbc crowd baffled by this--no one can square the circular market logic. I still say bonds yields to the floor--stock market as firm as you can get it--which is choppy and sideways action for the most part--and gold slowly climbs a sheer rockface of disgust, hate and apathy.

The strong dollar tonic has spilled. But Greenspan seems to be foolishly wiser in how to clean up the mess.

WaveriderU.S. March Trade Deficit Widens to $43.5 Billion, Second Highest on Record #1027455/13/03; 07:45:29

"The U.S. trade deficit widened in March to the second highest on record, as imports of petroleum, autos and pharmaceuticals jumped, a government report showed. The $43.5 billion trade gap in goods and services followed a revised $40.4 billion deficit in February, the Commerce Department said. The figure compares with a record $44.9 billion shortfall in December."

Shapurgolds stocks getting hit#1027465/13/03; 08:10:44

Is Snow Green talking up the dollar??
Carl HPress release from the Treasury#10274705/13/03; 08:21:19

This is a press release that I received from the treasury a few minutes ago:


A few months ago, I gave my signature to the Bureau engravers, so they could put it on the plates used to print our currency. One of the highest honors bestowed on the Treasury Secretary is the Secretary's signature on the currency. Our currency is one of the most powerful symbols of our republic.

U.S. currency represents security and integrity around the world. The design we are introducing today will help us keep it that way by protecting against counterfeiting and making it easier for people to confirm the authenticity of their hard-earned money.

The purpose of the new design is to stay ahead of anyone who would compromise the security and integrity of the dollar through counterfeiting. Thanks to the changes we made to our currency in the late 1990s, aggressive law enforcement efforts led by the Secret Service, and the help of an informed public, we've been able to do just that.

Nonetheless, technology changes quickly and counterfeiters develop new tools, so we plan to introduce new designs for our currency every 7 to 10 years. In fact, as soon as the current $20 note was introduced in 1998, work began on the new design you're about to see.

This new $20 note will go into circulation later this year. New designs for the $50 and $100 notes will follow in 2004 and 2005.

The most distinctive change in the new currency design is the color. Different colors for different denominations will make it easier to tell one note from another, especially for those with visual impairments. Color also makes the currency more difficult to counterfeit.

Even with the new colors and other features, the world will recognize the new notes as distinctly American. Everyone who sees the note will know instantly what it is and what it stands for.

I'm looking forward to the unveiling of the new currency design. I'm also looking forward to the passage of President Bush's Jobs and Growth Plan, which will enable Americans to keep more of these new bills in their own pockets. The plan will stimulate the economy and create new jobs -- benefiting American businesses and investors, workers and retirees. I urge Congress to act swiftly to enact the plan, to keep economic recovery on track and ensure that families enjoy a lasting prosperity.

Thank you very much.

CarlH: Ok, so we will now have multi-color toilet paper instead of green toilet paper. Whoopeee. Got Gold?

Paper AvalancheIf the new currency has a gold cover....#10274805/13/03; 08:56:41

then I would not expect the announcement to be made until after 1:30 EST when the COMEX closes.

Just a thought.


JemeJordanPaper Avalanche #10274905/13/03; 09:15:09

So my question is how much is this fancy new $ going to cost the American taxpayer? And couldn't the money been better spent paying down the deficit so the old style money actually has value?

Food for though

Got Gold ?

Paper Avalanche@ JemeJordan#10275005/13/03; 09:53:13

you may want to try calling into C-SPAN to better develop your point and question.


Paper AvalancheNew dollars do not have a gold cover#10275105/13/03; 10:08:20


TownCrierThe face of the new United States $20 note#10275205/13/03; 10:24:28

See url above.


TownCrierYou get your money's worth. The note has TWO sides! :-)#10275305/13/03; 10:34:12

Here is a look at the back.

This is where it ends. I'll not be posting views of the four edges. Alright, maybe just one. Here is an end view:



contrariannew notes#10275405/13/03; 10:42:33

and the new notes are just as much of a fraud as before!
USAGOLD / Centennial Precious Metals, Inc.Put a REAL Foundation Under Your Portfolio#10275505/13/03; 10:43:53

Swiss Gold Francs

Get the Legendary SECURITY of a Swiss Account...

...Delivered to Your Door.

Call USAGOLD - Centennial for Arrangements

TownCrierHEADLINE: Cen bankers calm on euro now, $1.30 a worry#10275605/13/03; 11:45:01

FRANKFURT, May 13 (Reuters) - Top central bankers are comfortable with the euro's rise so far and would not balk at further appreciation -- as long as it stays shy of $1.30 against the dollar, a senior monetary source said on Tuesday.

In their [Group of 10] meetings, the central bankers lacked sympathy for corporations that complain that the currency's rapid rise -- up over 10 percent this year to reach fresh four-year highs by Monday -- was hurting profits and robbing European firms of their competitive position on world markets, the source said.

Corporate leaders were well aware they enjoyed a competitive bonus when the euro was sinking -- it hit a low of around $0.82 in 2000 -- and they had plenty of time to adjust to its eventual appreciation, the monetary source said.

As for intervention, he said central bankers are loath to go down that route...

...Irish Finance Minister Charlie McCreevy showed no expectation of intervention at least by the United States to stop the dollar's descent against the euro and other currencies...

------(see url for full text)-----

The dollar needs a champion with none to be seen anywhere. Meanwhile, gold is bouyed on the shoulders of value-minded peoples found everywhere.


White RoseHmm ... $1.30 for a Euro -- that means $400/oz gold#10275705/13/03; 11:53:07

Right now it is $1.152 for a Euro. $1.30 takes prices up by 1.13. $350 times 1.13 is just shy of $400.

As nearly as I can guess, the "wizards" that run the world economy need to devalue the dollar to get gold at $400 an ounce. The trick is to contain it at that level. If anyone has any suggestions, just e-mail your neighborhood central bank.

slingshotPaper Avalanche#10275805/13/03; 12:05:15

Time to pay up.
Would you be so kind to post the full address.Want to make sure it gets there.

Cost 8 cents to manufacture. Wonder if that includes an inflation factor?


Gandalf the WhiteThanks Sir Townie !!!#10275905/13/03; 12:12:29

TownCrier (5/13/03; 00:33:58MT - msg#: 102739)
"Gold is your singular 'must have' safe haven on either side of the Atlantic to see you through the times ahead."
I and the Hobbits wish you to know that we read EVERY WORD that you send to the USAGOLD Forum TABLEROUND !!
AND, we feel that also, it would be true for those on all the sides of the PACIFIC, the statement of "Gold is your singular 'must have' safe haven on any side of the Pacific to see you through the times ahead."
BUT, most likely, on ANY SIDE of ANY "pond" the statement would still hold !

Gandalf the WhiteThanks Townie for the LOOK at our "NEW" paper bill ! #10276005/13/03; 12:23:34

WOWSERS !! Did they give Pres. Jackson even MORE HAIR atop his facelift ? BUT, FINALLY !! GOLD on the face of the $20 bill !!! Do you see the inset "20" in the bottom right ?
REAL GOLD COLOR !! That is the closest the we will get to a paper $20 bill having a gold link !

GondolinUK/Euro/Gold#10276105/13/03; 12:24:30

Thanks to all for your comments which as usual raise more questions. Please excuse or enlighten me if any of my lines of thought are off target- my economic grounding is generally based on what I read within this and similar sites, but my reasoning is usually sound.

Magister Aurelius, you mentioned that it is possible the UK sold bullion to the US and purchased the Portuguese bullion. As no-one knows who is purchasing the CB gold is it not possible that despite all appearances Gordon Brown actually has a plan? As per Goldquests post 102563, which time may prove to be close to the mark, would it be that big a surprise to discover down the track that the UK and US are the two biggest buyers?

Again, despite appearances, surely TPTB in the UK and US can see the implications of an explosion in the POG; they can't be totally blind.UK policy is dictated by US policy, as Belgian kindly pointed out, and as Tony Blair has so delicately indicated this year. So hand in hand it would appear that the UK and US will follow the same road, certainly along the lines of Foreign policy as already demonstrated to date. How much will this apply with regard to economic policy for the two most solid allies of the last and this Century.Do they have a Plan B once fighting the rise of gold is eventually abandoned? They surely will not sit back and miss the boat while China, Russia and the rest of the world grab all the yellow metal. Obviously they aren't going to advertise that they are accumulating (replacing?) gold whilst their own government, financial institutuons and media poo poo the barbaric relic, lest they precipitate a rush and a resultant collapse of the dollar.

Out of interest can anyone provide details or recommend a site that indicates the level of debt in the UK relative to GDP. There have been a few mutterings in the media about the impending debt problems,the housing bubble, and credit and loan offers seem to be the most common advertisements now both on tv and in the mail. How far behind the US is the UK on this count? The UK much like the US have become a nation of consumers, which is much in contrast with their European neighbours.

I agree with Magister Aurelius and Belgian that it seems unlikely that the UK will join the euro in the near future, if ever. The long awaited referendum is delayed again. As the tabloids will always appeal to nationalism and pride in the £ and all things British, it would appear remote that the UK will adopt the euro- the vote would be a resounding NO. As Socrates so kindly pointed out, the British cannot be objective about Europe and the Euro, and Tony Blair this year has all but burnt his bridges with regards to Europe. Does this suggest recognition on Blairs part that unless he eventually stands aside and hands the ship to Gordon Brown to bring the UK back into the euro fold, that the UKs interests are tightly and irrevocably linked to the US.

Again, thanks to all for your comments.

Paper Avalanche@ slingshot#10276205/13/03; 12:55:22

A check for $100.00 will be mailed tomorrow to:

St. Jude's Children's Research Hospital
501 St. Jude Place
Memphis, TN 38105

You can call Jennelle at 800-822-6344 x2049 to verify that they received it in the next few days. I spoke with her and discussed our bet. She would be expecting your call.

Thank you for making it interesting!


Black BladeGold looks forward to Washington Accord renewal #10276305/13/03; 14:06:14

Gold looks forward to Washington Accord renewal

By: Daniel Thole
Posted: 2003/05/13 Tue 16:59 ZE2 | © Mineweb 1997-2003

JOHANNESBURG – High-ranking South African government officials will head the drive to renew the key Washington Accord, which has helped underpin so much of gold's strength over the last three years.

Treasury director general Maria Ramos was one of the architects of the original accord Accord, signed in September 1999, which ensured that 15 European central banks would not sell in excess of 400 tonnes of gold a year. At the time of the agreement the gold price was floundering around $260/oz, but the accord helped the metal higher by stemming the tide of Central Bank sales – famously started by the Bank of England's ill conceived gold auction programme - that had until then put gold under pressure.

Ramos told Mineweb in an exclusive interview that she would resume her attempts to secure the extension of the Accord on central banks’ gold sales. The agreement expires next year.

Ramos undertook a whirlwind tour of the world's central banks with then SA Reserve Bank deputy governor James Cross in 1999, eventually securing the support of key institutions for the more responsible sale of gold reserves. It is an endeavour she is keen to repeat.

"I think it is one of those things that we will be discussing with the (South African) Reserve Bank over the next couple of months, and I think we'll probably take that up with our colleagues in the central banks over the next few months," Ramos said.

"But, in the same way as last time, we wanted to ensure that what we have is a more orderly, more transparent gold market. I think that those principles would be principles that are worth retaining," Ramos said. She said she had only just been reminded that the accord was close to expiration, and would now be driving its renewal.

Despite the fact that gold is now trading around the $350/oz level, analysts said the market still needed the accord to support the metal's value. "I wouldn't say the accord is vital – but it certainly underpins the gold price," a Johannesburg based bullion trader said.

"Of the 32,000 tons of gold held by the world's central banks, 46% is held by the 15 European banks that signed the accord – that provides some serious stability for the gold price," the trader said.

The US Federal Reserve holds another 25% of the world's total reserves, the International Monetary Fund 10% and the Japanese central bank and other smaller players hold the balance. It remains unclear whether the US will join the accord.

The accord helped shift the tone of the market from one wary of central banks pushing huge amounts of gold onto the market, to smaller, but nonetheless important drivers like currencies and de-hedging.

South African players said the market has not forgotten the importance of the accord, and is looking forward to its renewal. They said the market was expecting Ramos to at least push for the retention of the 400 ton a year sale limit.

Some said, however, they would not be surprised if the limit on sales was increased this time around – there are rumours that certain European central banks want to reduce their holdings.

Initial speculation names Germany as one of the prime suspects for lightening its gold holdings, rumour fuelled by governor Ernst Welteke's persistent comments to that effect. Italy and France have also featured as prime candidates for getting in on the action.

But the timing for a favourable sequel to the first Washington Accord may be just right for the gold market; there may also be external factors supporting the retention of gold as a reserve asset - dollar weakness may sway central bankers to hold onto their gold as they shy away from the dollar.

Black Blade: It appears that the WA will be extended in spite of ECB governor Ernst Welteke's blathering on about wanting to sell gold reserves. He is but only one of several board members that must vote on such a sale. Other ECB members are not that enthusiastic about selling gold reserves. Besides, if there were any sales it will be easily absorbed by other banks. The 32,000 ton figure is misleading as this is only the amount held "on the books". The amount of physical metal on hand is considerably less and unless bankers want to go around the globe stripping jewelry off the bodies of men and women in order to recover loaned gold they may that a difficult task indeed. ;-)

Black BladeStrong euro good for economy, says EU #10276405/13/03; 14:19:10


Finance ministers from Europe's single currency area on Monday night insisted that a strong euro was good for the EU and for the global economy. The statement came after the euro climbed within sight of its January 1999 launch rate of $1.1750, sparking renewed concern about the eurozone's competitiveness. The single currency briefly touched four-year highs above $1.16, fuelled by comments from John Snow, US Treasury secretary, that the dollar's decline was helping US exporters. But the 12 eurozone finance ministers, meeting in Brussels, said the rise in the euro helped to control inflation in the EU and forced exporters to become more competitive. Nikos Christodoulakis, the Greek chairman of Monday night's eurogroup meeting, said: "Strength is very useful because it reflects the economic fundamentals which pertain in the European economy." Pedro Solbes, EU monetary affairs commissioner, said volatility was a problem, but added: "On balance, a strong euro is in the interests of the euro area and the global economy."

Black Blade: Some interesting statements, though I wonder if they really believe it. This is quite a change in sentiment.

J-BullionWashington Agreement#10276505/13/03; 14:23:11

"Italy and France get in on the agreement?"
I have a feeling that Italy and France have been buying gold as oppossed to wanting to sell any. Canada should be out of gold in about 4 more months. I wonder who will pick up the slack in gold sales in the coming years. It seems that there is a lot more demand than can be met with just 400 tons/yr. from the European banks. Considering that the U.S. is intent on bombing all their trading partners into oblivion, and with the dollar being devalued...why would the Europeans continue to want to sell the rest of their gold off. Then again they are all central bankers.......which means they live in their own little world and no one really knows what they are thinking.

Black BladeSurvey: Pension Woes Worrying CFOs#10276605/13/03; 14:40:39,5309,9501,00.html?f=features


More than half of respondents said they'll have to cover a pension liability this year. In a study just released, global outsourcing and consulting firm Hewitt Associates found that pension shortfalls, pension regulations, and pension accounting are high on CFOs' lists of concerns these days. More than half of the CFOs and treasurers at the 174 midsize to large companies in the survey said they will need to fund a pension liability this year. Only 8 percent are considering terminating their plans because of liabilities, however. "One of the reasons for current concern is that contributions are driven by the 30-year Treasury rate, which is no longer issued," said Mike Johnston, Hewitt's North American practice leader for retirement and financial management. As a result, the rate has become artificially low, causing an excessive assessment of pension liabilities and overstating the need for contributions. Congressional action is required to change the discount rate. Once the rate is adjusted, Johnston believes, pension liabilities should be more manageable.

The Treasury Department recently introduced a proposal that would allow companies to convert their traditional plans to cash-balance plans. But the proposal touched off a whole lot of controversy. Shortly after officials at the Treasury Department announced their intention, Reps. George Miller (D-Calif.), Bernie Sanders (I-Vt.), and Rahm Emanual (D-Ill.) introduced a bill in the House of Representatives requiring Treasury to nix the proposal. The House bill also gives managers the option to offer workers age 40 or older and those with at least 10 years of service at a company the opportunity to decide whether they want to stay in a defined benefits program or switch to a cash-balance plan.

Black Blade: Under funded pension plans must be boosted from corporate profits. As many of these companies are reporting phoney profits it will be a tough job indeed. They need actual "real" profits to build up shortfalls in defined pension plans. Of course they are scared and they well should be. However, there is an intense lobbying effort to get Congress to change the laws in regard to pension plan funding. Meanwhile, the shell game continues as companies continue to "cook the books".

Black BladeManufacturing activity contracted for third straight month in April; employment and average workweek fell; expectations favorable #10276705/13/03; 14:52:42


Fifth District manufacturing activity contracted for the third straight month in April according to our latest survey. Shipments, new orders, order backlogs and capacity utilization fell sharply at District plants. Vendor lead-time changed little, while factory inventories rose slightly faster than a month ago. Employment continued to contract at District plants--indexes for employment and the average workweek fell more sharply in April, while wages advanced slightly.

Black Blade: Looks "grim", however, the report attempts to put a "smiley face" on the situation. The recession is deepening and the outlook according to the nation's CEO's (the Business Roundtable report) is especially "grim" as few have a positive outlook in their industries.

Black BladeCentral bankers calm on euro now, $1.30 a worry#10276805/13/03; 15:11:19


FRANKFURT, May 13 (Reuters) - Top central bankers are comfortable with the euro's rise so far and would not balk at further appreciation -- as long as it stays shy of $1.30 against the dollar, a senior monetary source said on Tuesday. Central bankers from the top industrialised countries meeting at the Group of 10 session in Basel this weekend viewed the currency's rise as a correction from oversold levels, the source told Reuters. This echoes the statement by Bank of England Governor Sir Edward George who told reporters on Monday at the International Settlements (BIS): "The sense was, in the case of the euro, it was a recovery from weakness rather than remarkable strength," George said, noting the euro was now back near levels at which it was launched.

Corporate leaders were well aware they enjoyed a competitive bonus when the euro was sinking -- it hit a low of around $0.82 in 2000 -- and they had plenty of time to adjust to its eventual appreciation, the monetary source said. As for intervention, he said central bankers are loath to go down that route, but in Europe they are aware that support for the common currency is a political issue and if politicians express a high degree of concern about the currency's strength, it is a factor that central bankers must weigh, he said.

Black Blade: I know that this has already been mentioned. I have read several comments and groused through a few reports as well as listened to some interviews today about the rise of the euro. It appears that most are resigned to the euro's rise against the dollar, however, the concern for most is not the rise of the euro but the velocity of that rise. It appears that Japan is the most concerned about dollar weakness (at least publicly). Previously there were concerns that the euro could rise to $1.25 and now there is a growing belief that the euro could rise further. The dollar has been and still is grossly overvalued as US debt and deficits rise to unmanageable levels. The "stateless" currency – gold should continue to do well. Of course the inevitable rise of gold and fall of the dollar will not necessarily be linear but perhaps a jerky ride as "King Canute" interventionists frantically fight against the tide. Should prove to be somewhat amusing.

Great Albino Bat; 16:15:23

Bill Murphy of GATA has provided the link to Reg Howe's most recent article, which he calls "a gem". Indeed it is a gem, a veritable Koh-i-noor diamond of an article!

The title of the article is "Long Con: Mother of Bank Runs"

If you really want to know what has been transpiring behind the scenes for the last decade, and how and why it is going to end in a massive run for gold by the same wise-guys that planned the greatest con job of all time, on the people of the whole world, you have to read this article carefully. Print it out and keep it, it's important.

the GAB

"Mother of Bank Runs. Ponzi schemes and other long cons that try to take advantage of not just one or a few marks but a much broader public always hit the wall described in a famous but unauthenticated quote regularly attributed to Abraham Lincoln: "You can fool all the people some of the time and some of the people all the time, but you cannot fool all the people all the time."

"When a long con unravels in the world of gold banking, it is well to remember that there's no run like a bank run, and no rush like a gold rush. Then the key to financial survival is found in two bits of common sporting advice: Go for the gold. He who hesitates is lost.

"In the era of free banking under the gold standard, bank panics were typically rather local events unless they occurred in important financial centers. With the advent of central banking, major bank panics took on more national importance, and in the most severe instances could lead to devaluation, going off gold, or other extreme measures, e.g., gold confiscation as happened in the United States in 1933.

"All these problems were supposed to have passed into history with the breakdown of the Bretton Woods system and the effective removal of gold from the international and nearly all national monetary systems. See Second Amendment to the IMF's Articles of Agreement (effective April 1, 1978), which prohibits members from linking their currencies to gold and commits the IMF and its members to "the objective of avoiding the management of the price, or the establishment of a fixed price, in the gold market."

"The recent con pulled by the central banks to suppress gold prices did not merely violate this provision. Rather, it demonstrated that the provision itself was unrealistic, and that whatever governments may say or order, gold remains in fact what it has always been: permanent, natural money and the standard against which all paper money must eventually be judged. Indeed, by suppressing gold prices, the central banks (and certain finance ministries) were trying to perpetrate and maintain a far grander illusion: that today's dollar-based reserve currency international monetary system with floating exchange rates remains sound; that they can successfully manage any major financial crises that occur; and that they have both the tools and the ability to guide the world economy to satisfactory levels of growth and prosperity.

"These assertions have long been questioned in numerous commentaries at this site. See, e.g., The Greatest Con: The Rubin Dollar (February 8, 2000). What is much more important is that they are now being more widely questioned, as several interesting articles from the past few days illustrate. See, e.g., John Dobosz, "Guru's Still Going For Gold," (May 7, 2003); Marshall Auerback, "Is Dollar Weakness Signalling Problems Ahead," (May 6, 2003); Bill Fleckenstein, "The dollar is on borrowed time," (May 5, 2003). Two of these articles pointedly discuss how individual investors can use gold to protect themselves from an imploding dollar.

"In many ways a more interesting question is how foreign central banks -- stuffed to the gills with dollar-denominated paper -- can accomplish the same objective. And the answer is the same: with gold, their traditional reserve asset. When the central banks realize that too many are not just wise to their scam but also are taking advantage of it, that the gold con artists themselves have become the marks, the greatest bank run in history will shift into high gear. It will be a run not just from dollars, or even from paper currency in general, but from modern central banking itself as the lenders of last resort succumb to the resurrected worldwide preference for the financial asset of last resort."

KiloRandy (TC)#10277005/13/03; 16:15:43

RE: New note pics. Thank you sir. Thick SOBs aren't they. And black edges ! Must have something to do with oil....... 8^)
Belgian@ Gondolin (euro-dollar-UK)#10277105/13/03; 16:17:10

Joining EMU (euro) and Euroland is not a decision to be taken lightly, not in the least because of the complexity. Cfr. Argentina and its dollar-adherence.
It took many decades before the EU-12 were able to align around a minimum minimorum.
The euro common currency is one thing and the political Euroland is another. The UK has many difficulties with both.
The UK will remain on the dollar-US ship for as long as it is opportune/convenient for both the UK and US.

But things do change ! How will the global dollar-system evolve vis à vis the euro concept(s) ? What if the dollar-system succombs under its (past-?) omnipotence ?
Nobody has the answers. We simply watch the dollar-euro chess game and count the points, the two rivals are scoring.

Euroland is investing (its euro) into the Eastern block with the purpose of internal expansion (300 million > 500 million people), whilst promoting the euro concept(s) to other (future) Big trading blocks (China, Russia, ME, India)

Euroland is in the process of liberating itself from the dollar (dollar-system) whilst the UK remains in the midst, with its pound, between the two $/€ chairs. For how long will this remain a comfortable position, when more Euroland and others are giving less and less support to the dollar-system ?

How will economical realities (foreign investments) for the UK evolve, when they remain outside EMU and keep supporting the dollar-system ?

It is not as much a question of dollar-euro-gold BUT rather Gold within the two different currency ($/€) SYSTEMS !
Note, that nobody is never, ever, commenting on currency-systems ! This is an exclusive central bank affair and an absolute taboo for the general public. Snow's statement : "sound dollar-currency" ! How can one say this when the dollar-printing inflation is the main reason for the declining dollar exchange rate !? The dollar printing is unstoppable, because of the euro (tactics) ! These links are explained by FOA, the lonely voice.

One day, the "political thrust" on Gold will break into the open as to destroy the dollar-system and let the euro-system rise.

Do you hear anyone of the gold authorities, ask those CBs (Duisenberg for instance), *WHY* they are supposedly selling Gold exchange reserves ??? No Sir, nobody does !

Is it a coincidence that more and more dollar-reserve is created (Thanks for reporting Randy) whilst the euro rises or dollar declines ? Nobody dares to make such a link.

The US banking system, the dollar originators, must inflate the dollar ad infinitum simply to protect themselves. Because of the outside dollar-liabilities, the printing can't slow down. The recent Ryad's bombing is not of a nature to assist any (impossible) policy for a sound dollar.

Resigning Claire Short (UK) and the torpedo she send to Tony is evidence that the UK might become "politically" isolated from EMU's goodwill. A seemingly succesfull EMU, gaining momentum, up until now. The euro currency block is increasingly functioning as (an appealing) "local" (Euroland) reserve. Political Euroland starts to realize the "good" effects of the euro (concept(s)), especially during the difficult times we are living in.

This is happening without the UK ! The UK is not an impediment for the euro...but would surely be welcomed when they decided to join wholehartly.

BTW, the lacklustre performance of the goldmines (papergold) and the low april-volume on LBMA paper gold rather bizar (or not) in the light of a papid declining dollar exchange rate !!!-??? Conclusions anyone ?

GoldiloxSnow Job#10277205/13/03; 16:17:28

Chuck Butler of EverBank:


Well, it's still snowing... U.S. Treasury Secretary, John Snow, tried
some major spin doctoring yesterday after seeing his comments on Sunday become the spring board for the euro to venture to 1.16 VS the dollar.
He tried like the dickens, but it wasn't until the U.S. stock market got
some wind in its sails that the dollar reversed its direction and came
back during the day. Snow was telling everyone that would listen that
the "strong dollar policy" was still in force... But Hey! Memo to Mr.
Snow... You can't bang the drum for a strong dollar, and turn around an
bang the drum for President Bush's tax cuts! The markets aren't buying

Mr. Snow, then started sticking his nose into the Japanese problems...
And telling them a weak currency isn't the answer to their problems...
Geez... Talk about the irony of it all!

Anyway... The dollar did rebound overnight after the strong U.S. stock
session, but has turned south again, and is back trading above the 1.15
handle... The U.S. Current Account Deficit was printed this morning...
Are you ready for this? $43.6 Billion! OUCH! Can you say... 6% of GDP?
That's where that's going for sure! Unless.... (here I go again) we see
a weaker dollar!

All the other currencies backed off with the euro overnight, so it will
be interesting to see how they can rebound today after that
unsustainable figure!

Currency traders are NOT surprised by the continuing Dollar Freefall, and look qat Snow's comments as completely transparent.

KiloExcuse Me ?#10277305/13/03; 16:21:55

From this mornings press release on the new currency;

...."Everyone who sees the note will know instantly what it is and what it stands for"....

Yeah, RIGHT ! We could only hope as much. (snicker)

Black BladeFrom the Mailbag#10277405/13/03; 16:29:05

The following courtesy of Bill Bonner at DailyReckoning:

Gold rose $3 yesterday. Twenty years ago - when stocks were at an historic low, and gold at an historic top - you could cash in a single ounce of gold and buy all thirty Dow stocks, and still have change left over. A couple of years ago, we passed another milestone – an historic low for gold and an historic top for stocks, when it took 42 ounces of gold to buy the Dow. Stocks are less expensive, and gold more dear, than they were in 2000. But it still takes 25 ounces of gold to buy the Dow. Our guess is that you'll be able to buy all 30 Dow stocks for one ounce of gold, once again, before this episode is over. We don't know how or when we'll get there...but our "Trade of the Decade" - sell stocks, buy gold – still looks good.

Black Blade: The fact is gold is undervalued and stocks are overvalued. Recent trading on Wall Street has been mostly institutional buying while the small fry are sitting out this "suckers rally". Corporations continue to play games with earnings reports and analysts are still lowering expectations (as if that were still possible). These guys continue to cast out lures by buying the stock indices (note that yesterday all indices were up by an equal percentage across the board – between 1.3% and 1.4%). Meanwhile the US dollar will remain under pressure as the current account deficit hovers above 5% of GDP. Debt keeps rising to all time record levels and tapped out consumers are not spending like they were. Energy costs are rising again as the IEA reports that oil inventories are shrinking again and the NatGas outlook is questionable with doubts that storage will be adequately refilled before next winter. So far relatively mild temperatures have helped NatGas storage refill, however, with several nukes down for a variety of problems and for seasonal maintenance the draw on NatGas this summer during "air conditioning season" could significantly slow down refill. The higher energy costs will continue to plague corporate and consumer budgets throughout the year. The outlook for gold looks quite positive in spite of some minor fund selling (profit taking) late in the New York session.

Off to the gym!

TownCrierMore tidbits and unique perspective from our friends at Central Banking Publications#10277505/13/03; 16:57:08

Check out our latest update to the 'Central Bank Insider' and learn about the magnitude of Saddam's bank heist, the Chinese worries over the possibility of banknotes spreading SARS, and Duisenberg's range of testiness over "targets" and the overlooked notion that to be "standing pat" is, in fact, to be doing "something".

See url above.


Paper Avalanche@ slingshot#10277605/13/03; 17:21:30

Check #3451
memo field has "usagold / slingshot"

It is being mailed to Jennelle's attention.


steady i just found this #10277705/13/03; 18:41:29

GLR is born.......
World Gold Trust Services, LLC Files Form S-1 Registration Statement for Equity Gold Shares
Tuesday May 13, 5:52 pm ET

GLR is born/ concieved. did the part time paper pushing gold slackers over at comex approve of this?
NEW YORK--(BUSINESS WIRE)--May 13, 2003--World Gold Trust Services, LLC today announced that it has filed a Form S-1 registration statement with the U.S. Securities and Exchange Commission ("SEC") for the proposed continuous offering of securities of the Equity Gold Trust, an investment trust that will hold gold bullion.
The Trust will issue Equity Gold Shares (the "Shares") in return for gold bullion, only following an order of the SEC declaring the registration statement effective. Subject to the notice of issuance, the shares will be listed on the New York Stock Exchange under the ticker "GLD".

Dollar Billdeadly fiat?#10277805/13/03; 19:44:16

China's central bank has not escaped the SARS epidemic unscathed. As might be imagined, infected banknotes could present an excellent way for the pestilence to seep through the country unnoticed. As a result, prescient central bankers ordered that banknotes be quarantined for 24 hours and are also exhorting people to use other methods of payment where humanly possible - this despite the fact that medical authorities say there is "no clear evidence" that the pesky bug can be transmitted via banknotes. But, like all good central bankers, they prefer to err on the side of caution. The Industrial and Commercial Bank of China is compliantly apprehending "suspicious" banknotes to sterilise them with disinfectant and expose them to ultraviolet light for four hours, which apparently does the trick. Possibly of greater concern, since the country is awash with dirty money, rather than launder it - which in most parts of the world would be controversial - the central bank has decided to start a clean sheet and step up its banknote printing operations to make sure there is enough clean money to go round. Presumably this is okay so long as old notes are destroyed at the same rate, which Newsmakers is assured they are - any unwanted inflationary side effects would be unfortunate indeed
Dollar BillGreat Albino Bat#10277905/13/03; 19:53:40

GAB, I have no hope that murphy and howe will ever progress past this genius realization that they are stuck on.

"When the central banks realize that too many are not just wise to their scam but also are taking advantage of it, that the gold con artists themselves have become the marks, the greatest bank run in history will shift into high gear. It will be a run not just from dollars, or even from paper currency in general, but from modern central banking itself as the lenders of last resort succumb to the resurrected worldwide preference for the financial asset of last resort"

WaveriderVIP: DAILY GOLD MARKET REPORT #10278005/13/03; 19:57:15

"...Meanwhile the dollar is under additional pressure as the U.S. trade deficit grew $43.5 billion in March just shy of another monthly record. The U.S. dollar will remain under severe pressure to weaken as soaring trade deficits, current account deficits, and budget deficits soar toward new records, making the current dollar valuation against major world currencies unsustainable. Many economists remain rather pessimistic over the overvalued U.S. dollar and suggest a further weakening against the Euro and Yen in spite of aggressive currency intervention."

Waverider: Each day is even more Golden with the DMR!
And Haiku from the HOF....

"Paper bills in heaps -
Autumn's chill wind scatters them;
Shining gold remains."

Sierra Madre

Sierra, we haven't heard from you for awhile...

Carl HPost 102777, Re GLR#10278105/13/03; 20:22:32

World Gold Trust Services looks like just yet another form of paper gold to divert money from physical. The cabal's tactics get so repitive they are boring. Got _Physical_ Gold in your posession? If not, I suggest you contact host.
Max RabbitzHas The Fed Already Gone Unconventional?#10278205/13/03; 20:41:33

By Marshall Auerback

Just one paragraph from an article that helps one read between the lines......

One tantalising bit of evidence that something more may be afoot is the odd delinkage between the level of Treasury bond yields and the US equity indexes since the end of the war. Between April 2nd and April 30th, the Fed's financial statements indicate that they have concentrated their buying in the 1-5 year maturity and been net sellers of Treasuries in the 16 to 90 day maturity. This is consistent with the a pattern in place since January, where they have bought $28 billion in the 91 day to 5 year maturity spectrum and sold a similar amount in the 16 to 91 day area. Although not definitive proof, there does appear to have been a focus by the Fed in its open market operations on buying longer dated Treasuries, and selling shorter dated paper. At the very least, this does point to the possibility that the Fed has already begun, unannounced, to peg Treasury yields.

Max: The central planners want to save the world regardless of moral hazzard. Most ominous is that it seems to me that most Americans don't seem to care what the Fed does as long as they make money. But they will lose their wealth ...... and their freedom ....... and still not know what they did wrong. When all is washed away gold remains.

Liberty HeadOne More Way to Own Gold#10278305/13/03; 21:30:35

Wow! I fell in love with Grace Kelly while watching "Rear Window". No wonder why the Prince of Monoco wanted to marry her, after seeing her in this gown.

Gold sure worked for her. :-)


makcumka@ Paper Avalanche - New Money#10278405/13/03; 22:00:42

I have been following your thoughts on the new currency for the last several months. Today we finally saw the new and improved dollars, yet same great taste. No announcements as far as the currency devaluation or PM standard is concerned. What are your thoughts for the immediate future? Somehow I think this exchange will not trigger much. Counterfeit issue will be presented as an excuse for exchange, and no other reason will surface. IMVHO.

TIA, makcumka

Black BladeRe: World Gold Trust Services and Other Gold Trusts#10278505/13/03; 22:09:28

The concept of a repository for bullion and issuing shares representing a fixed amount of physical gold sounds good and probably could work but it also requires a lot of trust and honest managers. The recent Australian Gold Bullion trust issues shares (or are they units as in typical trusts?) representing one-tenth ounce of gold apparently keeps physical gold in an HSBC vault in London. I think that Perth Mint has a gold certificate program as well. Canada has a couple of bullion funds that hold only physical precious metals. Then there are the various e-gold programs where gold is on account somewhere and transactions can be made using physical gold as the base currency. The World Gold Council supposedly has a plan in the works to issue shares (or units?) representing a fixed amount of gold per share sitting in some vault somewhere. Apparently this too will trade on some major exchanges if it ever happens. Recently India tried to implement a scheme to get Indians to deposit gold in the banks in return for a certificate and a paltry return in interest. As I recall the scheme came apart after only a couple of years and has been discontinued.

So where is all this going? I can understand the desire for people to have a convenient way to hold gold in their investment portfolios as insurance against the economic storms that are coming and will rock the world financial systems. However, with so many of these programs coming into existence there is a potential for abuse and many investors may simply become confused about the type of paper gold they are holding. Some may trade as closed end funds where there could be a premium or a discount to the NAV. Some may simply be paper representing an amount of gold either on deposit or that could supposedly be acquired by the institution.

Again who will have physical control of this gold? Who will audit these gold hoards to maintain the integrity of the fund/trust? Hell, we can't even get Congress to authorize an audit of Fort Knox gold to even see if the gold is actually there or if the amount that is on the books actually exists. If you were concerned about possible government confiscation issues before, then you should really be concerned now if you are considering this as your sole method pf holding gold. Criminals don't just lurk in the shadows they also sit in the highest offices of government and industry. Remember Franklin D. Roosevelt, Richard M. Nixon, Robert Vesco, etc.? With physical possession you control your own financial destiny without having to worry about the changing political winds.

On paper (no pun intended) it sounds like an interesting plan and it may even help to take a hell of a lot of physical precious metal off the table and drive prices higher if it catches on. But if these trusts come into existence I would hope that no derivative structures are allowed, no lending of metal is allowed, that frequent audits by more than one auditor are performed to ensure the quantity of metal on deposit matches the number of shares issued, etc. With all the chicanery on Wall Street and in Washington, can you really trust the people who control this gold? No thanks I will keep control of my own "insurance".

- Black Blade

slingshotPaper Avalanche#10278605/13/03; 22:25:40


I'm the one who has to pay up! Just was asking for the complete address. The money was rolled out before JUNE 6 as agreed. As I understood it was to be shown but not placed into circulation. They showed it before JUNE 6. Did we have a misunderstanding?

mikalU.S. "Debt Limit" leaving earth's orbit#10278705/13/03; 22:44:09

It is now close to three full months since the government hit the national debt limit of $6.4 trillion and has not been permitted to borrow. Almost a full quarter since the credit card was suspended on February 20, 2003 because it was maxed out.
Naturally, the government didn't want to show economic weakness during the invasion campaign and it looks like the Fourth Estate was told to keep quiet about what was happening. Even today, the so-called watchdogs are acting like running out of credit is something that just occurred yesterday instead of three months ago.
The real question is why Congress and the Bush administration did not perform their semi-automatic increase to the debt ceiling before or shortly after reaching the limit. In the past, this has been an easy task usually with some small amount of political posturing but sometimes without any fanfare at all because it's simply piggybacked on some other popular legislation just like other pork.
Remember that when it comes to raising revenue and managing money the government has only three options: (1) raise taxes (2) borrow from investors or (3) cut benefits. Of course, they can do any combination of the three. We've heard this time and again from leading economists and the government itself. It's also the same choices the poor dears will be forced to make if they must ever turn to the empty and false Social Security trust funds.
Well, since February 20th the government has not (1) raised taxes and is, in fact, talking about reducing them and (2) the government has, for three months, been prohibited from adding new debt. That leaves only (3) cutting benefits—and that's exactly what has been going on for three months.
Every State, City, and local government in the nation is suffering shortfalls in promised federal money. Local governments have been biting the bullet and forcefully learning to get by without elements of the federal government's fiscal 2003 budget for education, agriculture, block grants, Medicare payments to hospitals, even homeland security and all of the other parts of budgeted discretionary spending. The money has gone to support the invasion of Iraq. (See: New York Times article of May 8, 2003)
Will the government raise the debt limit and open the borrowholic's spigot once again? Of course they will. They've always done it and they will eventually do it this time and the next time, and the time after that, again, and again, and again.
Once credit is re-established, the national debt will leap at least $100 billion in practically no time as Bush makes up for lost time.
The only real question is why did they wait so long? What purpose was served by delaying the inevitable? Was the federal government actually thinking about biting the bullet and living within their constant flow of personal and corporate income taxes received daily plus the surpluses they steal from entitlements like Social Security?
Were they actually trying to "balanced the budget" as promised by the Balanced Budget Act of 1997 which, ironically, picked the year 2003 as the year the federal government would be able to do so? This was a popular 1997 bill that also piggybacked raising the old debt ceiling to $5.95 trillion thanks to John Kasich (R-Ohio), head of the House Budget Committee, who snuck it into the back pages.
Or has the government set out to teach states, cities, and local governments a lesson? To make them realize exactly how dependent on the federal government they've become. Was Bush simply flexing his muscle? Or has he been out to punish them for not sitting back, shutting up, and waving their flags like good citizens instead of coming out with resolutions against the Patriot Act?
Can you come up with a logical reason for the delay? After all, the debt limit was made law in 1968 simply as a futile attempt to make the federal government live within its means, balance the budget, and not plan budgets beyond expected income. It has never worked, never.
One of the reasons it always fails is that the debt limit was supposed to make it embarrassing for politicians to stand before Congress and ask for an extension to the credit card. Have you ever known an elected official who is afraid or embarrassed to ask for money? Begging for money is a prerequisite for their job.
Republicans and democrats alike have absolutely no compunction whatsoever about adding debt for you, your children, and your grandchildren to someday pay off.
But you can take heart in the fact that 43 percent of the national debt is fraudulent, worse than anything done by Enron and other private sector companies, and could theoretically be written off tomorrow without consequence to anyone but the Beltway Bandits. I'll explain this in the next article, tentatively titled "$2.7 Trillion Scam."
"Published originally at : republication allowed with this notice and hyperlink intact."

TopazGround Zero?#1027885/14/03; 02:08:31

I'd be thinking the Dollar HAS to strengthen from here.... and the Dow HAS to outperform. If either or both don't eventuate, Long Yield resistance is 5.1%---5.4% will confirm 20 Yr cycle reversal.
WaveriderSpot 'n Spike#1027895/14/03; 07:44:58


What did you feed those boys for breakfast? ;o)

ZhishengInteresting Spike.#1027905/14/03; 08:11:09

This time there was no accompanying spike down in the dollar (
a nation of one(No Subject)#1027915/14/03; 08:52:16

The needle of a gas gauge points always to an indicating
place. But pog is like a weathervane. When no wind is
blowing it stays where it was. A strong wind, though brief,
may move it quickly. Who can tell its true value? Why,
always, those who know its most recent transaction.

CytekSinclairs comments on the POG and Dollar#1027925/14/03; 09:02:32

A word of caution! For those of you that have done quite well in the Euro and Canadian dollar please take note. Every market ebbs and flows as it reaches for a final bottom or top.

We have witnessed a significant fall in the US dollar to present levels. Right now I want you to stay tuned to the .945 support and .955 resistances. A close above .955 could rally the dollar back to the general .98 area. I am not saying this will occur but in the end it's the market that is always right.

As you can see, we have not put together three rising days in the dollar in a long time. If it occurs here and closes above the .955 level, I would close my trading positions temporarily in the Euro and the Canadian dollar.

As for gold, we are still working a resistance higher than I suspected. I anticipated the top of the resistance to hold us back for a while was $348.50 but it looks like $352 was the resistance top. We closed at $350.50 today and are somewhat on the defensive this evening.

I do not expect any reaction here to endanger the basic uptrend #1 noted on the chart although it could be contained at up trend #2. I believe it all depends on the dollar so a close under .945 gives you the low $360s. A dollar at .92 gives you $380. A close above .955 will give us a short term reaction in gold depending on how long it holds an uptrend to UT #3, #2 or #1.

adminMK's Gold Commentary & Review#1027935/14/03; 09:08:54


"I have quite a bit of material this morning so grab that favorite morning beverage and buckle yourself in for the ride. As usual I won't dwell on the specifics -- just make an attempt to give you a snapshot of the situation -- which mostly centers around the international economic situation..........Keep in mind that all of this ramps up to the upcoming, crucial round of G8 meetings..."

New link on Washington Agreement renewal

New QuickNotes

New Stein

What do these three big name London banking families -- known for their financial savvy -- have in common?




I'll bet CB(too) knows..........

adminHere's the link......#1027945/14/03; 09:10:21

Gandalf the WhiteWAY ta GO !! SPIKE and SPOT <;-)#1027955/14/03; 09:36:11

Lady Waverider and Sir Dr. Zhisheng --- Could it have been the attacks in Saudi Arabia and Yemen, together with continued planned lawlessness and looting in Baghdad, to show that the WOT is not quite finished, and that GOLD is the BEST insurance ?

CoBra(too)Fleming, Barings and Hambro @ Admin#1027965/14/03; 09:50:00

You bet and you can add a few more names ... like Greiveson, Grant - former associate Mark Wellesly-Woods as CEO of Durban Deep. The Queens broker, Quilter Goodison, which was on the brink and re-invented by Malcolm (The Earl) of Buchan, by exhuming some of the old gold pro-'fessionals'.

Many more to add - though, it seems the sign of the times..

More later - best cb2

PS: Frank Giustra's essay on 321Gold was spot on.

USAGOLD / Centennial Precious Metals, Inc.What you need to know before you buy your first ounce of gold...#10279705/14/03; 10:09:54

Q. In your book, The ABCs of Gold Investing: Protecting Your Wealth through Private Gold Ownership you start the chapter by saying "Who you do business with is one of the most important aspects of gold investing." Why is that?

MK. Most, if not all, of the progress an investor makes towards realizing his or her goals with respect to gold ownership hinges on that relationship. Unbiased, objective advice from one's gold advisor is a key element. So are market information and education. Pricing, product selection, fulfillment and on-going support also rely on that relationship. Above all, it is extremely important for gold buyers to match their objectives with the type of gold they buy. Positive results in all of those areas depend upon a strong relationship with a gold firm. That is why it is important to spend some time finding the right one.

Q. Can you briefly describe some of the pitfalls a beginner might be on the look out for?

MK. The biggest trap investors fall into is buying a gold investment that bears little or no relationship to his or her objectives. Take safe haven investors for example. That group makes up 90% of our clientele, and probably a good 75% of the current physical gold market. Most often the safe-haven investors simply want to add gold coins to their portfolio mix, but by the time they finish talking with a typical national firm, they might end up in a leveraged gold position, exotic rare coins, or being diverted into silver or platinum. Others drift into gold stocks or gold futures which in reality are proxies for real gold ownership and could actually act opposite the intent of the investor. There's nothing wrong with any of these non-physical investments per se, it's just that none of them is really a safe-haven. The investor should bear this in mind. The question investors must always answer for themselves is "How will this investment serve me should the economy or financial markets suffer a major disruption?"

USAGOLD / Centennial Precious Metals, Inc.The perfect property: Liquid. Portable. No sales tax. No annual property taxes. No maintenance expenses.#10279805/14/03; 10:18:18

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 and 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 asset 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?

USAGOLD - Centennial is here to help.

21mabry(No Subject)#10279905/14/03; 10:21:53

I can see no rhyme or reason in mining stocks. We see a nice move in gold today but some stocks are down, it is very different than investing in the metal directly and far more of an unsure thing as I have seen.
BoilermakerNatural Gas Outlook#10280005/14/03; 10:25:04

If there were any prior doubt, after this past winter heating season it should be crystal clear that the U.S. natural gas market is experiencing a severe structural deficit. As explained below, supplies of natural gas available to the U.S. market in 2003 are certain to fall at least 1.0 – 1.5 TCf below the Energy Information Agency's ("EIA's’) most recent forecast of expected U.S. demand for the year.

This is a staggering shortfall, with profound implications for energy companies and for the health of the U.S. economy. Yet, the potential for a deficit of this magnitude is not yet widely recognized. Nor are most end users or state regulators prepared for the profound dislocations that are likely to occur in both the natural gas and power markets over the next 90 to 120 days.

Further, this growing imbalance between available supplies of natural gas and expected demand is not likely to be short-lived. Instead, it reflects the early stages of a long-term structural imbalance, in which supplies of natural gas available to the U.S. market are likely to consistently fall 10% or more below the levels achieved during the 1990's, at the same time that the underlying rate of demand is likely to continue to increase every year -- at least at prices anywhere near current levels. These continuing increases in the amount of natural gas needed to supply the U.S. market are due primarily to increased demand in the power sector -- which is expected to increase by at least 2.5 – 3.0 TCf between now and the end of the decade. See earlier articles on The Coming Natural Gas Crisis and A Cautionary Tale.

comment- The expectation of a NG shortage is starting to be seen in the marketplace. Prices likely to rise from now on unless we get into a deep economic depression. The author, Andy Weismann, will be on Kudlow & Cramer tonight.

TownCrierMarket in fed funds trade at FOMC target, Federal Reserve adds anyway#10280105/14/03; 11:40:01

Today the trading desk of the Federal Reserve Bank of New York waded into the open market on behalf of the System to add $5.751 billion in fresh money to the nation's banks through two-day repos collateralized primarily by agency securities.


Gandalf the WhiteWOWSERS !! SPOT got HAMMERED at the CLOSE of NY !!#10280205/14/03; 11:48:46

Rest SPIKE and SPOT -- Tomorrow is ANOTHER day !

21mabry(No Subject)#10280305/14/03; 12:15:18

I had a class called modern japan this past semester.It was japan from about 1800 to the present.We spent more time talking about japenese fashion of the 1960s than finance,we spent more time talking about squat toilets than the bank of japan. People I am not exagerating. I tried to get some discussions going in class about post ww2 economics in japan, tried to ask about the bank of japan the prof. told me he is not realy interested in economics.Whats more important mini skirts in japan or economics in japan. He had no idea what I was talking about when I brought up the yen carry trade. I am an A minus B plus student he gave me a C plus he is the head of the history department I am kinda upset.I am sorry but I dont think squat toilets are as important than japans response to the asian tiger nations in todays economic world.
mikal@Gandalf#10280405/14/03; 12:17:41

Re: "Spot got hammered"
They didn't knock the spots off of him. A spot check shows they've just hammered out a little agreement.
As always, thanks for being "Johnny-on-the-spot".

JemeJordanU.S. Supports Strong Dollar - White House#10280505/14/03; 12:26:45

For a good laugh read on !
mikal@Gandalf#10280605/14/03; 12:37:48

I suspect the Fed's in a bit of a spot about now to where spiking drinks has reached the water cooler. Their tightest spot is making it to the privy all at once.
Gandalf the WhiteLook at this chart and envision the PAPER AVALANCHE near the close#10280705/14/03; 12:40:59

BUT SPOT is still JUMPING !!

Buena Fet-bonds#10280805/14/03; 12:49:30

topaz, is this the short covering panic that somethimes marks the top/bubble-bursting action in markets?

looking for a reversal in bonds to signal major system failure dead ahead!

a nation of oneTo 21mabry (05/14/03; 12:15:18MT - msg#: 102803)#10280905/14/03; 13:01:28

You appear to be figuring out that just because a man has a Phd., that doesn't mean he has a brain or is able to use one. Therefore, you are getting a realistic education. That is one thing school is for. As for what to do next, you should probably buy a lot more gold. And maybe it wouldn't hurt you to read a little bit about smith and wesson.
TownCrierDoing the math#10281005/14/03; 13:57:51

WGC weekly excerpt:

Russian central bank gold reserves increased very slightly in April.

The central bank has reported that the value of its reserves on May 1st was US$3.736Bn, up from $3.735Bn on April 1st. The Russian government values its gold reserves at $300/ounce.

Russian gold reserves (387t) currently constitute 6.25% of its combined gold and foreign exchange reserves.

The First Deputy Chairman of the Central Bank of Russia, Oleg Vyugin, said in February that, subject to some extent to oil prices, he expects Russian gold and foreign currency reserves to reach approximately US$55Bn by the end of this year (they started the year at $47.3Bn).

He also said that gold should account for a minimum of 10% of the bank's combined gold foreign exchange reserves and that "Basically we are satisfied with the amount of gold that we have now".

TownCrierThe Afternoon Gold Report... by Jon Warner#10281105/14/03; 14:19:31


May 14, 2003 ( ... Today's market report is saturated with information about the U.S dollar because the gold story lately is the U.S. dollar story and the aggressive intervention efforts by Japanese monetary authorities to strengthen the currency at the expense of the Yen. The Japanese government is in a state of sheer panic at the prospect of a weak dollar because the export driven Japanese economy is nearly totally dependent on exports. A weaker dollar threatens any hope of economic recovery for Japan as they have no raw materials and must assemble goods for sale abroad. This is sure to be a point of contention at the upcoming G7 conference this weekend. Bank of Japan and the Ministry of Finance are rumored to have accelerated the pace of currency intervention since this weekend when Treasury Secretary John Snow inferred that the U.S. preferred a weaker dollar in spite of publicly insisting that the U.S. "strong dollar policy" remained intact while at the same time repeating that government interventions in the market were a bad idea. In data released last week, Japan said it spent 2.38 trillion yen ($20.44 billion) on currency intervention during the first quarter. Even European officials are starting to worry about the dollar's impact on the competitiveness of European exports as its economy also suffers. However, it appears that the EU are content for now to let Japan do all the heavy lifting as far as currency intervention is concerned.

...The fundamental case for gold remains very strong as outlined above in today's news release from gold producer Goldcorp. When industry insiders are confident in their industry and the product they produce that is a very bullish sign. CEO Rob McEwen announced that the company would withhold gold from current production to double its physical gold reserves rather than exchange the metal for a weakening dollar currency....

----(see url for full report)----

Good overview and analysis to be found there, as always.

21mabryNation of One#10281205/14/03; 14:23:08

I AGREE NATION. This gun range by my house refuses to sell smith and wesson, I guess smith wesson reports all there gun buyers to the feds I dont know the details.The owner just wont sell them anymore.
Black BladeRe: Boilermaker – NatGas Supply#10281305/14/03; 14:25:34

Another Roundtable poster (who posts here on occasion) mentioned another point today that hurricane forecasts suggest another potential problem for storage injection. The EIA forecasts for lower to normal summer temperatures are disputed by other forecasters such as the NWS who believe that this summer's temperatures could be normal to above normal (The EIA has always been a bit over optimistic in my opinion but then they are a Government agency and creating a climate of concern is not "good for business"). Even if we have a normal summer we cannot expect to reach the needed 2.8 tcf storage levels before November. As temperatures rise there will be increased demand from NatGas fired peaker power plants. As I have pointed out before, we are looking at another developing energy crisis this year. One point is that we simply do not have enough drill rigs turning for NatGas and mature fields are experiencing a rapid decline in production. Add to this scenario prime drill targets are either "off limits", permitting is restricted, and pipeline capacity from highly productive regions (especially in the western US) is insufficient and do not lead to the most vulnerable markets on the east coast and northeast.

The cost of energy will soar this year killing any expected economic recovery just as in the past. These higher costs drop straight to the corporate bottom line, not to mention the higher costs will hit already tapped out consumers. Already farmers are paying higher costs for ammonium fertilizers because NatGas is the feedstock for fertilizer production. Chemical producers are screaming for Congress to "do something" about NatGas prices as they are being killed in the market, however, there is little energy producers can do. Wall Street financing has not been forthcoming since the Enron scandal and credit rating agencies have been getting tough in recent years demanding that companies pare down debt. Fortunately since energy and food costs are not counted in the "core rate" of inflation everything will be just "peachy" as far as the Fed and BLS are concerned – right? Hmmm…

The point is, don't be surprised when NatGas prices soar and other energy sources can't make up for energy demand. Utility rates are certain to squeeze corporations and consumers going into the latter part of the year as realization of this crisis becomes apparent. I guess I really should say "I told you so", but the fact is I did. I haven't talked to my friends in the industry this week as the AAPG conference is underway in Salt Lake City and most are out of the office. We have discussed this growing problem over the last few months and there appears to be no solution on the horizon. It is going to get very ugly and most will be caught unprepared. I will check out the "Heckel and Jeckel" show tonight to see the Weissman interview (I have read his other material on the developing crisis as well). He makes the same case that many of us in the industry have been warning about but falling on deaf ears.

It is definitely a good time to get gold and silver portfolio insurance into your investment portfolio if you haven't already done so.

- Black Blade

HenriMK on Portugal's gold loss#10281405/14/03; 14:57:18

It occurs to me that with Portugal being a suprise signatory of the original Washington Accord. Its transfer of gold could only have been excluded from the 400 ton limit if it was a previously arranged affair or an affair precipitated in agreement with another signatory. Perhaps it doesn't count as a sale if is transferred between signatories? That leaves a lot of leeway for backroom hanky panky. So much for transparency. Perhaps Switzerland decided to hedge its gold sales risk by selling the gold belonging to other signatories? Maybe Germany swapped its gold for US treasury gold which it sold and does not have the confidence in ever recovering its own gold. I can see them wanting to sell US gold promissory notes. Maybe the US called away Portugal's gold to feed a swap gone bad to another signatory.
Questions, questions, questions...sorry, no answers from this corner.

21mabry(No Subject)#10281505/14/03; 15:07:40

Turn history channel on good program on gold as money showing right now.
WaveriderTownCrier#10281605/14/03; 15:11:36

A big THANK YOU for posting the DMR. This forum is where the action is and I know for myself that I don't always get to other pages here if I don't come across a link on the forum - I just figured others may be the same which is why I've tried to post the DMR when I can. Thanks and thank you for all that you do to keep the forum the BEST and MOST EXCELLENT on the web! Cheers,

Black BladeJawboning reality for Treasury's Snow#10281705/14/03; 15:58:06{D15B18BA-8EE8-4B60-BF01-8E9ACE58D1DA}&siteid=mktw

Couldn't fight dollar drop if he wanted to (and he doesn't)


WASHINGTON (CBS.MW) -- Once is a gaffe. Twice is a policy statement. Treasury Secretary John Snow this week sent the strongest signals yet that the Bush administration no longer believes in a so-called "strong dollar policy," at least in terms of an active effort to hold or push up the value of the currency. Back in March when he was still wet behind the ears in his role as the Bush administration's top economic salesperson, Snow told reporters he wasn't that worried about the recent slide in the greenback. When that sent the dollar tanking, he took it back -- sort of -- by taking care to emphasize later that he believed in a "strong" dollar.

While a weakening dollar had seemed to suit the early Clinton administration, Robert Rubin began talking up the greenback once he became Treasury secretary in 1995. No doubt, Rubin and company philosophically opposed efforts to artificially weaken the dollar to gain trade advantages or to politically pressure trading partners. And the benefits of a strong dollar -- lower inflation, lower interest rates, etc. -- fit into the bond market-friendly framework of Rubinomics. But currency markets, like most markets, often overshoot. And the U.S. dollar appeared to become significantly overvalued by the late 1990s, especially in light of a burgeoning current account deficit -- its international payments balance. "To me it was just a matter of time until a) the dollar fell on its own, or b) the administration took action to actually bring it down," said Dean Baker of the Center for Economic and Policy Research. "It would have been appropriate even when Clinton was still in office." Baker in 2000 wrote a paper that argued that the U.S. economy was witnessing a double bubble in both the stock market and the U.S. dollar. The current account deficit has only grown from there, now near a record 5 percent of gross domestic product. "Reality is catching up to the dollar and it has to go down and the administration, whether they realize that or they realize they have no choice, they are more or less recognizing reality," Baker said.

Black Blade: A good analysis of the "real" US dollar policy. The dollar must weaken – there's no choice in the matter. Either the market or government will ultimately make a weaker dollar reality. With current account and budget deficits soaring to record levels with no end in sight and ballooning debt across the board (consumer, corporate, and government), the dollar at current levels must devalue. The "currency war" will intensify and the G7 meeting this weekend should be very "interesting". Too bad the proceedings are not open to the public. The POG should respond accordingly and a price well in excess of $400 in coming weeks/months is certainly not out of the realm of possibilities.

Off to the gym (and watch "Heckel and Jeckel")!

BTW, the news with Brian Williams (on CNBC) will begin a series this week on the rising unemployment picture. Soon there will be many more singing the tune "dem bones dem bones dem dry bones").

mikalU.S. long bonds#10281805/14/03; 16:50:13

Intentional or not, the liquidity and easy credit of the Fed, is reflating bonds at an accelerating pace this year. The little INO box at the top of the page shows the 10 year Treasury up big almost every day. This is not sustainable. Eventually, cash outs will occur en masse, especially as the dollar has nowhere to go but down. And I wouldn't be surprised to see the Dow and Nasdaq daily volume continue at high levels until foreigners withdraw.
TownCrierchink chink chink... like any good miner I'm chipping away at the stone#10281905/14/03; 17:04:35

Here is the link to Ski's large collection of Golden Nuggets which was voted into the Hall of Fame.

In short order I'll have it indexed on the main Hall page, and also have miner49er's latest qualifying text incorporated and indexed so that you can find them in the future.


Dollar BillR.Benson sez#10282005/14/03; 17:25:38

In order to understand what is wrong with the system, one needs to focus on what used to be right. The old economy rewarded saving and investment. A balance between the need for funds and the use of funds was achieved by the concepts called credit underwriting and interest rate risk, and a return on capital as well as a return of capital. Investors needed to rely on the credit worthiness of a borrower to be paid back. Savers cared about their money. Lenders and portfolio managers were there to protect them and held to a prudent man rule. Through careful underwriting, only the best projects that could pay the required return got financed. Reasonably high interest rates balanced the risk of repayment, and many credits were denied because, frankly, supplying those projects with credit was foolish and would result in loss. In the Mid-1990's, the Fed changed and so did the world.

The new Fed Model is based on two simple rules: 1) Forget about actual cash savings, and 2) if two entities in the economy enter into a contract, make sure that the contract is financed. Indeed, everything gets financed. There is no need to ration investments to the best projects and credits. Saving is not necessary because there is credit creation. Since credit can be created without limit, credit underwriting is not necessary. All ideas deserve to be financed. The Fed's lack of knowledge or concern about credit underwriting is understandable because Fed officials are unlikely to have ever made a loan of their own money that they personally had to collect.

Indeed, the only loan the Fed ever makes is by buying United States Treasury Bonds, which the Fed knows will be paid. Old Treasury bonds will be paid because the Fed can always buy more New Treasury bonds with their own money (just printed up) to pay off the Old Treasury Bonds. Since the Fed can print money, it can always pay itself off! So, why would a central bank concern itself with credit underwriting or whether investments are any good? Money can always be created to make the investments good!

R PowellBlack Blade#10282105/14/03; 17:46:58

This is from Black Blade's afternoon report....

John Reade, metals analyst at UBS Warburg concurred: "It's the first time since the beginning of April that gold is showing a life of its own." He went on to say. "It looks like Comex fund buyers are re-establishing their long positions."


Does he mean that the Commercials are going long? He refers to the "Comex funds" which I have always thought of as the Non-commercials or Speculative funds. I'm confused as these guys are now long and have been for some time. They were net long 39,291 contracts as of May 6th according to the COT report released on May 9th. I suspect they have been and are still adding to their net long positions as they are trend followers and POG is trending up.

I wonder if John Reade meant to refer to the Commercials when he used the word "re-establish"? I wouldn't mention this except that if the Commercials are really going long right now, then !!!! as there won't be anywhere near enough contracts available for sale to cover the buying.

misetichUPDATE 3-U.S. supports strong dollar - White House #10282205/14/03; 19:12:35;jsessionid=VHZVW2CQBH1PYCRBAELCFEY?type=bondsNews&storyID=2744129


WASHINGTON, May 14 (Reuters) - The United States is still behind a strong dollar, the White House said on Wednesday as questions about the Bush administration's commitment to the policy bubbled through currency markets.

White House spokesman Ari Fleischer told reporters that U.S. Treasury Secretary John Snow, who has made a spate of comments in recent days, had accurately described U.S. policy. Snow has said the Bush administration backs a currency that is set by competitive markets and reflects economic fundamentals.

"The Treasury Secretary said the policy exactly as it is," Fleischer said. "The United States continues to support a strong dollar."
The market shrugged off the White House's latest remarks.

"The comments don't have much impact anymore. The market is not really focused on what U.S. officials say because it is pretty clear the United States is not going to take policy action to support the dollar," said Steven Englander, chief North American foreign exchange strategist at Barclays Capital in New York.

The White House said exports depended on more than just currency values and tried to damp down any speculation about a change in U.S. policy on the dollar.

The Wall Street Voltures are in denial - The White officials are constantly pressurized into backing the US strong dollar policy -

Wall Street isn't too fond of a weak US $ and a gold bull -

The twin deficit is here to stay and so is the gold bull - and its only the beginning

All On Board The Gold Bull Express

misetichN.Y. Fed Candidates Withdraw#10282305/14/03; 19:23:16


The two top candidates to become president of the New York Federal Reserve Bank, Treasury Undersecretary Peter R. Fisher and Citigroup Vice Chairman Stanley Fischer, have withdrawn their names from consideration, knowledgeable sources said yesterday.
In addition, the New York Fed president has a major international role with the Fed, such as attending regular meetings of central bankers from industrial nations in Basel, Switzerland, along with Greenspan or another Fed board member from Washington.
Rumors about Fischer's withdrawal have circulated recently on Wall Street. He declined, through an aide, to comment. Before joining Citigroup last February, Fischer, 59, a highly regarded economist, served as the No. 2 official at the International Monetary Fund for seven years. According to Citigroup, Fischer was to receive a base salary of $500,000 last year, plus a $500,000 signing bonus, incentive compensation of at least $2 million and stock options.

The sources said Fischer apparently withdrew around the first of this month before the New York Fed's search committee interviewed him.
Fisher, a lawyer and a former executive vice president at the New York Fed who became Treasury undersecretary for domestic finance in August 2001, also declined to comment. However, a source close to Fisher confirmed that he had withdrawn his name after he was interviewed.
Another potential candidate, Fed Vice Chairman Roger W. Ferguson Jr., has said he is not interested in the position.

Interesting - wonder why?!

All On Board The Gold Bull Express

silvercollectorRocketman#10282405/14/03; 19:25:40

Hey Rocket Man! How are ya?

I haven't re-read Sinclair's article but he sure seems to be excited about the end of the 'bond rally'. I BELIEVE what he is saying is that interest rates will soon be on the rise. If this is correct one would want to be buying the puts not selling them, yes?

I've been reading (following) the bond posts which are beginning to frequent this and other forums much more frequently in the last few weeks. Interesting how the folks are maturing in watching the bond and currency markets much more so than the SM's ;)

It is interesting to note the very wide divergence between the crowd believing interest rates are heading up versus those that are betting on interest rates continuing its fall. It is not a coincidence that the inflation/deflation debate rages on and with this thinking, the CRB (up/down?), SM (up/down?), etc., etc.

So with the USD falling in the 94/95 zone oil has reversed again and is sitting at a nudge over $29/bbl., gold has crossed the lovely $350 mark and the CRB has crossed back over 240.

I haven't the foggiest where this mess (markets) is going so I try to keep it simple. The dollar has fallen another leg in the last couple weeks so we have a bounce in the commodity prices. This seems mathematically correct; gold was 340 a week ago with the dollar index at 98ish and now we see the 350/95 ratio. Fitting when one understands the ratio of 350 dollars for an oz. of gold; if the dollar got a little smaller in the last week it takes a couple extra bucks (10) to buy the same common unit, in this case an oz. of the yellow.


Inflation has crept into the spotlight as it should, smaller dollar, more of the same dollars to buy the same old, same old. This begs the question at what point does the PTB intervene to stem the dollar's slide and more importantly how? Raising interest rates is the first (perhaps not only) obvious answer but in saving the currency (ending inflation) it will murder all other markets and at the same time the economy.

So what will Greenie-baby do? Answer the question and win a prize!

And what will other currencies do, follow suit? The proverbial race to the bottom? If other currencies fall in sympathy and in tandem we might have our GOLDEN day. I often wonder if this is the best scenario for gold. What do you think?

We've seen deflation in the last few years, that is to say the USD going up, going up and gold going down. I don't want that anymore. I think option B, the USD going down (inflation) or option C, all currencies going down (global inflation) is the way to go. I personally don't believe the USD is going to fall alone.

Roach is big on global 'deflation'. It's funny how deflation is used in so many contexts. If he infers to economic deflation, asset deflation etc. does he imply interest rates falling worldwide because of lethargic growth and thus not the need to defend one's currency (global currency depreciation; the race to keep exports) and thus commodity inflation and thus gold to the moon?

If this is Roach's theory I love the guy.

Anyway......selling or buying long bond puts. I won't touch that one with a 10 foot pole.


misetichJapan Pension Fund Transfers May Harm Nikkei/Koizumi#10282505/14/03; 19:37:40


NEW YORK (MktNews) - Upcoming transfers of Japanese pension fund
assets could weigh on the Japanese stock market and hurt Prime Minister
Junichiro Koizumi's chances for re-election as party leader this fall,
analysts said.
"Thus if all corporate pension funds were to return 100% of capital
managed for the government in cash, then about Y3.5 trillion yen ($30
billion) of foreign bonds would need to be sold by the fall of this
year," Rennie said.
Merrill Lynch estimates that Y2.0 ($17 billion) trillion worth of
foreign assets are expected to be returned in fiscal year 2004 alone,
and said the FX effect could be significant -- in their estimates a 3.2%
rise in the real trade-weighted yen.
"If the U.S. economy declines, the situation in Japan will also be
getting worse," he explained.

More troubles ahead in the House of the Rising Sun - hand in hand with the US - Japane benefits in good times - the global downndraft being experienced means the heat is on - both - the US and Japan -

All On Board The Gold Bull Express

All On Board The Gold Bull Express

silvercollectormikal#10282605/14/03; 19:39:22

I just checked the INO bond box as you mention. Quite the little spike in the last couple weeks. I maximized the look and it shows zero in 2002, what is this?

Are there other bonds charts?

CytekPension shortfalls#10282705/14/03; 20:41:58

It's interesting to note that Barrick is on the list.


Black BladeMarket Wrap Up – Puplava#10282805/14/03; 21:03:38


Today is very reminiscent of the mid-80's when the dollar began a precipitous decline between 1985-1987. The U.S. trade deficit was accelerating, budget deficits were growing and the U.S. was transitioning from the world's largest creditor nation to the world's largest debtor country. Stocks and bonds continued to rise while deficits rose, and the dollar fell. Fast forward to today and multiply by a factor of 3-4. The trade deficit is much larger as shown in the graph below. The dollar is falling, and stock prices are rising again. In typical Wall Street fashion, this is all viewed as bullish. They're right to be bullish. However, they are bullish over the wrong asset class. A rising trade deficit, rising budget deficits, and a falling dollar are bullish for hard assets especially gold and silver, not stocks.

Black Blade: Check out the graphs at the link – especially the current account deficit! As I have been saying, the current account and budget deficits are spinning out of control and there's no end in sight. In fact I seriously doubt it can turn around before the dollar implodes and economic disaster hits home. Of course those in hard assets like precious metals will likely fare well, but for the Lemmings it paints a very ugly picture.

Black BladeU.S. 10-Year Treasuries Touch 45-Year Low #10282905/14/03; 21:12:01


CHICAGO (Reuters) - U.S. Treasuries rose sharply on Wednesday as monthly retail sales and import data solidified expectations for the Federal Reserve to cut interest rates, probably in June. The benchmark 10-year note yield briefly dropped at midday to a 45-year low of 3.545 percent as economic pessimism gathered pace. Bond prices move in the opposite direction of yield. The string of deflationary data, and prospects for more to come, heightened the potential for a rate cut and sent the 30-year bond surging by 2 points. U.S. April retail sales dipped 0.1 percent, against a forecast of a 0.4 percent rise, while April import prices fell by 2.7 percent, the largest amount since the data series started. "Whisper numbers" for wholesale and consumer inflation are being lowered based on the import data, said Tony Crescenzi, chief bond market strategist with Miller Tabak & Co. The April producer price report is due Thursday and consumer prices on Friday. "The latest inflation news will have a downward bias," Crescenzi said. Much of the drop in monthly import prices came from petroleum, down 16.2 percent, but nonpetroleum prices eased by 0.9 percent, with those for industrial supplies down 9.7 percent, the largest decline on record.

Black Blade: The news and data just gets more "interesting" all the time.

BTW, I considered going to the late show tonight for the opening of the new "Matrix" movie, but I suspect that it will be too crowded. Maybe tomorrow night. So instead I will just relax at home my fellow "batteries". ;)

Dollar BillWarner sez#10283005/14/03; 21:20:43

The Medley report, seen by market sources on Tuesday, said U.S. officials plan to counter any complaints at a G7 meeting this weekend with calls for Europe to cut interest rates and for Japan to undertake structural reform. "This is the U.S. retort at the G7 meeting. If the Europeans complain about the weak dollar, all the Treasury has to do is tell them to cut interest rates," said a trader at a large European bank in New York who had seen the report.
mikalDavid Chapman on bonds, gold, dollar and stocks#10283105/14/03; 22:03:08

Dollar woes! by David Chapman -Excerpt:
"What would send interest rates soaring is a serious credit crunch, an event that has not as yet happened in this cycle yet.
Although the US$ has weakened considerably since topping two years ago we have not as yet experienced a full dollar crisis. The current rift in the world over Iraq accompanied with the threat of trade retaliations is not a policy that will result in strengthening the US$. With record trade and budgetary deficits the US can ill afford to jeopardize capital flows that are required to finance these debts. The current strength in the stock market appears to be largely the result of the ongoing easy monetary policy being followed by the Federal Reserve. A serious assault on the US$ especially if there is a realization that the US will not defend the dollar could trigger that crisis. An attempt to leapfrog through competitive devaluations by other countries concerned about protecting their export competitive position could trigger a serious currency crisis.
It is one thing to have a currency crisis as we last saw in 1998 largely with secondary currencies. It is another thing to have a crisis with the world's reserve currency. Investors would be well advised to be aware of this relation between the US Dollar, gold, stocks and bonds. A US Dollar crisis would trigger a stock and bond crisis and a rush into gold. The historical reference tells us that has been the way it has been for years particularly since the world abandoned the gold standard some thirty plus years ago."

GoldiloxG7 Meeting#10283205/14/03; 22:06:04

@Dollar Bill

The visual of all those guys with the arms crossed and their fingers pointing at each other is just "priceless".

I was remarking to my roomie the other day that it would be interesting to be a fly on the wall at that meeting, but just as I spoke, she swatted a fly on the bathroom mirror and I changed my mind.

mikalMore proof of Fed rate cut by June on gold forum#10283305/14/03; 22:13:24

Will the Fed Cut Rates ?(SeattleSun) May 14, 23:03
Yea, Yea I know who cares at this point but
when the 2 year bond rate currently at 1.37% FALLS through the Fed Funds Rate of 1.25% a rate cut is 100% assured! We are only 12 basis point away from that after losing 5 basis points today on the 2 year.

TacitusWhen will Gold break 400?#10283405/14/03; 22:16:25

When will Gold break 400? What should one be looking for?
GoldiloxWhen Gold breaks 400#10283505/14/03; 22:23:52


When Gold breaks $400, you should look for a deeper, more secure hiding place so you can continue to add to your position.

:) Goldilox

TopazBenchmark 10 Yr Yield drills ATL.#10283605/14/03; 22:49:08

Amid rumors of great swaithes of Capital exiting the Dollar for distant shores, Bond Yields headed into uncharted territory today and imo are now negative to Cash!
The threat posed is that participants will "Cash-out" en-masse... and in so doing, render the system inoperative.

$400 Gold? ...methinks not in this incarnation.

Buena, we watch in awe!

shadesBlack Blade and natural gas#10283705/14/03; 23:12:49

Black Blade I know you emphasize having gold and silver in our portfolios, but do you beleive that we should have a certain amount in some natural gas plays? if so how much do you think would be a safe play? which companies? Your opinion would be greatly appreciated fully understanding that we must do our own DD regards
Black BladeRhetoric gives way to reality in U.S. dollar policy#10283805/14/03; 23:13:27


Robert Hormats, vice chairman of Goldman Sachs International in New York, said the Bush administration faces a dilemma: while a cheaper dollar would be a welcome stimulus for a flagging economy, to say so out loud carries hefty risks. "It clearly would like to see a gradual lowering of the dollar because that would be helpful for boosting exports," Hormats said. "But they can't say that directly because of the risk the dollar could drop too dramatically and that would hurt the bond market (and push up long-term interest rates)." A weaker dollar would help the battered manufacturing sector, which has been fast losing jobs, and could provide a needed buffer against deflation dangers. Ultimately, it would also help narrow the record trade deficit.

Black Blade: I would not be all that surprised to see a slow moderation of the "strong dollar policy" rhetoric to signal to the market that the dollar should weaken further as the Bush administration appears to be growing more concerned over unemployment and deflation threats.

Black BladeRe: shades#10283905/14/03; 23:33:45

I don't make specific stock recommendations, but that said I do have energy shares in my investment portfolio. Generally I lean toward energy trusts and limited partnerships for the decent yields as the earnings are mostly passed through to the unit holder. But there are some good energy plays out there (mostly NatGas, propane distribution services, niche energy plays and pipelines). Given the developing energy crisis having a small position in energy is another way to diversify but as for the weighting in a portfolio it always comes down to your comfort level. I have about an equal weighting between gold and energy myself as well as a smaller position in pharma and health care. Overall the stock market is just too overvalued at current levels for my comfort level so I lean more toward safety and current income. Though I do have some "play money" for occasional speculation – but I would not suggest that anyone should speculate on risky plays (for me it's just entertainment or on a recognized special situation). Still it is best to have an anchor made of physical gold and silver before venturing into "the casino". ;-)


- Black Blade

WAC (Wide Awake Club)UK 'not ready' for euro#10284005/14/03; 23:34:08

Chancellor Gordon Brown has concluded the UK is not yet ready to join the euro, the BBC has learnt.

Prime Minister Tony Blair has accepted the chancellor's view, though the finer details of an official announcement - which could come as soon as next week - are still being worked on.

But Mr Brown's ruling is that the UK has not passed his five economic tests for joining the currency

A further key decision - when to assess the tests again - has yet to be reached.

Responding to the BBC story, Downing Street was quick to play down news a decision had been taken.

"The government has nothing to say on this topic until the economic assessment is published," a spokesman said.

MalfleurIsolated Spike#10284105/14/03; 23:59:56

What was that 5 dollar spike at lunchtime in Hong Kong (or afternoon in Sydney)? What exactly causes a spike like that - both in the sense of the background situation and the actual mechanics of buyer and seller agreeing a price? (I'm still learning my ABC of POG.)
axWould Weak USD Really Reduce Trade Deficit?#1028425/15/03; 00:28:13

U.S.Trade Deficit =$ Value U.S. Imports-$Value U.S. Exports

A weak USD would tend to raise the $ Value of U.S. Exports
because foreigners would be attracted by the relatively
lower prices in foreign currency terms of U. S. goods.

The question is , how much would the $ Value of U.S.
Imports drop? Yes, Americans might shy away from some
foreign goods ( such as automobiles ) because of their
relatively higher cost in dollar terms.

But, there has been a growing reliance by U.S. consumers
on the quality and cost value of foreign goods. How much
will Americans be able to forego brand loyalty and switch
over to domestic brands because of an upward shift in
prices? Americans have become accustomed to paying much
higher prices for such things as gasoline and real estate,
why couldn't they adjust to paying higher prices for
foreign goods?

If the Americans did adjust to such a higher cost of
foreign goods, then the $ Value of Imports might actually
rise. If the volume of imports continued more or less
unabated, then the higher dollar cost of these goods would
produce an increase in the $ Value of Imports.

If the rise in the $ Value of Imports exceeded the rise
in the $ Value of Exports, then, under weak USD conditions,
the U.S. trade deficit itself could actually rise some more.

The above condition is exactly what the U.S. wishes to

CometoseBlack Blade / Pupulva Wrap up post 102828#1028435/15/03; 01:20:20

Interesting comment made by Pupulva on 85= 87 period looking like the mirror of what we are seeing now in
the form of escalating debt , trade deficits and sinking dollar ( he said today we are at four times )

What is more interesting is to take a look at a 20 year chart of the Silver Market, which my son Joshua and I did a little earlier tonight...

Way early in 87 , like January , Silver spiked 6 dollars to 11....9 months later we had a severe Stock Market Crash.
Martin Wiess in his latest book "Crash Profits" states in a chapter that demand for bonds completely dried up . It was after this crisis that PPT was formed....Reagan....

Could this happen again........yes and when it does ....I will prefer that it happen sequentially in the same manner.
Silver first , as signal, and then the fall in the market..
Bond market dropped close to 50% then....

I don't understand why Sinclair is bearish on Silver unless he's doing some counter espionage for silent partners who are the deep pockets in Silver SOROS < BUFFET and Gates ...
Perhaps he just knows more than they or .....he's trash talking silver so that he gets to buy his before the masses step into the market and bid the market higher.....
THe insiders don't want any one to know until the last possilbe moment.....that a move is going to happen...that way they get to continue to buy cheap....

Black BladeBuffett hits back at Greenspan over the risk of derivatives#1028445/15/03; 01:23:37


Warren Buffett, the billionaire investor, has unleashed a further blistering attack on the use of derivatives by banks, arguing that the complex financial instruments could pose significant risks for the health of the global economy. In an interview with The Sunday Telegraph, Buffett said: "Any time you get a great concentration of risk and interdependence among a few institutions upon the creditworthiness of others. . . it could get back to the days when you had runs on banks, when the good banks got pulled down by the bad banks."

Buffett told The Sunday Telegraph that "banks could suffer the same fate as some energy companies" which have been "brought to their knees" by their derivatives books. "Greenspan says that this is a way of spreading risk for these companies but the truth is that it's concentrating risks," Buffett said. Derivatives are complex financial instruments that allow investors to take bets on movements in anything from equities to interest rates, energy prices or even the weather. The market is estimated to have grown in value from just $3 trillion in 1990 to more than $125 trillion. Two months ago, Buffett rattled the markets by branding derivatives as "time bombs" and "financial weapons of mass destruction".

Black Blade: Very interesting. I don't think Alan and Andrea Greenspan will have Warren over for dinner anytime soon. Could break out into a food fight.

SpartacusTOCOM gold gains, focus still on weak dollar #1028455/15/03; 03:25:35;jsessionid=T2S1C3IBFHBS2CRBAEKSFEY?storyID=2747060&newsType=usGoldRpt&menuType=markets

TOKYO, May 15 (Reuters) - Tokyo gold futures advanced on Thursday, encouraged by overnight gains in New York futures and arbitrage buying by big trading houses as the dollar struggled to regain ground against the yen.
A weaker dollar makes yen-based futures more expensive for Japanese players, relative to dollar-denominated gold, even as it makes spot bullion cheaper for participants using currencies other than the greenback.

TopazGold and Dollar rising in tandem.#10284605/15/03; 03:56:27

E/PoG @ 309 (ask) 320.
SundeckBuffett and Greenspan and "derivatives"#10284705/15/03; 04:48:37

From my reading of Buffett, it is unusual for him to seek out public controversy. He doesn't NEED to say anything about derivatives, or Greenspan ... in the past he has concentrated on going about business fairly quietly...and very successfully.

Why does he feel so inclined to speak out so strongly in this instance?

Drastic times? A genuine concern for the well-being of his fellows?

In any contest of credibility, I would back Buffett against almost anyone else...interesting times.


SundeckMisetich #102823 - N. Y. Fed Candidates#10284805/15/03; 04:58:10


Interesting to speculate on the withdrawals...

It used to be that the Captain went down with his ship. Perhaps that era of gallantry has gone.

Senior public servants are usually very astute...especially when it comes down to their own interests. Don't need 20/20 vision to see the looming iceberg...or is it Belgian's "debtberg"?

Just speculating, of course...


misetichFrance Says It Is Target of Untruths - U.S. Official Calls Claim 'Nonsense' #10284905/15/03; 05:27:34


The French government believes it is the victim of an "organized campaign of disinformation" from within the Bush administration, designed to discredit it with allegations of complicity with the Iraqi government of Saddam Hussein.
The unprecedented letter, signed by French Ambassador Jean-David Levitte, is an indication of the depth and bitterness of the breach between the two historic allies and NATO partners over the issue of Iraq. Although French officials maintain they have tried to overcome the differences and renew the partnership, they say the administration has expressed little interest in rapprochement.

Since this linked article is strong in its geopolitical implications and since France is the biggest booster of gold not having sold or leased any of their reserves - the heating up of this bickering cannot be assumed not to spread in the economic (trade) and most importantly to the upcoming renewal of the Gold Washington Agreement

KevMenem pulls out of presidential election (Argentina)#10285005/15/03; 05:28:44

Kircher president.
Can you see the panic in the eyes of the US and IMF ?
They're losing grip on the Southern part of the Americas...

WAC (Wide Awake Club)@Kev - Argentina#10285105/15/03; 05:46:49

Didn't this new Prezzie of the Argies say he was going to back the Peso with Gold if elected? This could be the next 'Axis of Evil' site.
Kev@ WAC (Argentina : Kirchner)#10285205/15/03; 05:51:25

Argentine President Candidate Urges Peso-Gold Link, Herald Says
By Claire Shoesmith

Buenos Aires, March 13 (Bloomberg) -- Nestor Kirchner, seeking to become president of Argentina, will try to return the country to a monetary system where the peso is backed by gold reserves, the Buenos Aires Herald said, citing Kirchner's economics adviser.

The return to a gold standard would be part of a policy involving ``neither dollarization nor multiple currencies,'' the paper cited Kirchner's adviser, Jose Maria Las Heras, as saying.

The policy would aim for the peso's value to eventually converge with a single Mercosur currency, Heras was cited as saying. The Mercosur region includes Argentina, Uruguay and Paraguay.

Gold prices fell for a third day in London as the dollar strengthened against the euro and equities rose, making the dollar-denominated metal less attractive to European investors.

Kirchner, governor of the Santa Cruz province in Argentina's south, is seeking to defeat rivals including former President Carlos Menem in April 27 presidential elections.

CoBra(too)Mr. Yen, Eisuki Sakakibara, former vp finance on Deflation #10285305/15/03; 06:48:49

..."Even if we don't yet have [global] deflation, you have to concede that we have disinflation," he said, attributing falling prices to rapid productivity gains in manufacturing, particularly in China. "Deflation is a structural, not a monetary phenomenon."

"Alan Greenspan never used the word deflation," he said, referring to the chairman of the US Federal Reserve. "He called it an increase in productivity. But it's the same thing."

An interesting view, to say the least.

Meanwhile Germany shocks with negative growth of - 0.2% for the 1st. quarter. R&D is hence translated as resession followed by depression? ... followed by competitive devaluation? ... At least Mr. Yen can claim that he knows what he's talking about ... from personal experience.

Nowhere to hide - other than Gold! cb2

Max RabbitzBill Gross of PIMCO takes shot at Greenspan#10285405/15/03; 06:51:06

A snippet:

The U.S. economy still faces risks, including another terrorist attack that would be "calamitous," unregulated hedge funds, and credit derivatives, according to Gross. He also took a shot at Federal Reserve Chairman Alan Greenspan, saying his view that derivatives are beneficial is "clearly off base."

Max: He also advocates owning Treasury Inflation Protected Securities. So far this has worked well for me in my resticted retirement account where I have no Gold option. However, I think they would also get hit in a general bond sell off. Paper burns.

Cavan ManEngland and the Euro#10285505/15/03; 06:54:45

My opinion: They're holding out for better terms under the guise of their "tests" at this juncture.

The evolving, global currency regime loks like a three legged bar stoll to me (even at this early hour here). China/US/EU. GOLD in your hand is the best bet.

Cavan ManMy preceeding post.....#10285605/15/03; 07:25:22

I meant to say "bar stool"; and I've not even had an "eye opener" yet!
Clink!@ax re benefit of weak dollar#10285705/15/03; 07:31:51

I have been thinking exactly the same thing over the last few weeks. The only reason I can think of (apart from the mouthpieces either not knowing or caring how they are insulting people's intelligence) is that more workers are employed in producing goods for export than handling imports, so it sounds like they are protecting their voters.
(Not that that appears to have been much of a consideration in the past as the STRONG dollar has sent jobs overseas....)


MKEarly NY gold hits 9-1/2 week high, despite PPI drop#10285805/15/03; 09:14:13

(Reuters) "It's not so much that people are looking for a return, they're just looking for protection. Maybe it's a delayed reaction to the Saudi bombings," said a bullion trader

No MKGCR today.....

Mr Greshammisetich -- I oughta know better, but...#10285905/15/03; 09:38:13

I'll rise to the bait:

"Although French officials maintain they have tried to overcome the differences and renew the partnership, they say the administration has expressed little interest in rapprochement."

Hell, they ain't even a _word_ for "rapp-ro " -- whatever the thingy, in Texanese! I can't think of much near terminology beyond "jawboning", "Mexican standoff", or "dry gulch", can you?

But then, I woke up this morning wondering just how many Texans have a summer place in Maine? Thought of calling my friends in Kennebunk just to see if ribs places are overtaking lobster restaurants as the menu-du-jour.

I guess my serious point is that we are now in a world of unblushing fakery. (I almost said "naked fakery", but isn't that what Churchill called Gandhi? ("fakir", Too damn much edjamacation! Or at least, books actually read, long ago, before the Web.))

If we can invade a nation (no serious domestic consitutency outraged, headlines fade, fade away) over non-existent WMDs, then we can inflate our currency away (serious domestic financial constituency to benefit as it wraps up its speculative endgame) over non-existent deflation. Reporters have been imbedded where needed...

Oil, gold, fiat dominance: the Prizes. We've -- USA -- had at least two out of three (not bad!) going for some time now, with very little effort or sacrifice on our part.

We'll trade the fiat (faith) for physical hold on oil. 30 years of bad press don't worry us none. An' we'll just finish logging off those National Forests, send 'em over for luxury condos in Singapore -- hell, we can export too!

Gold is the hole card, we'll see who's got it, see who plays it.

Ante up, y'all...

Mr GreshamOops, just remembered#10286005/15/03; 10:04:51

how I had intended that little rant-thought to go when it popped in yesterday, and I couldn't get free to post:

"If we can invade a nation over non-existent WMDs, then we can issue a new currency design to fight non-existent (what, all this over $60 million out of 650 billion? Yer *****in' me!) counterfeiting."

Actually, to really confuse things, wasn't there that New Yorker article a few years back about how Saddam was sourcing the best and most counterfeit C-notes around? Now _there's_ a causus bellum! (And one you'd be leery of publicizing too loudly, as holders of your FRNs worldwide start to squirm when you do.)

And, to further fatten the fiat flummoxry files, didn't Edwin Vieira (or Fekete, or Howe -- someone at our erudite sister sites) cite a counterfeiting case in Portugal (Italy? Luxembourg?) where the counterfeiters got off light on civil damages because it couldn't be shown they had caused any "harm" that the Central Bank wasn't already doing anyway? (Dim memory from late-night browsing, sorry -- just to show how so many scams come around to bite the scammers, when it ends up in court.)

Gandalf the WhiteLOOKIN' Good, SPOT !! <;-)#10286105/15/03; 10:15:57

BUT, get ready for the FRIDAY PAPER AVALANCHE !!

Black BladeConditions grow worse for small businesses#10286205/15/03; 13:33:11,1299,DRMN_4_1962379,00.html


Fewer jobs. More malaise. Colorado seems to take one step forward, then two steps back, and that is reflected in the Vectra Bank Colorado Small Business Index. The index declined to 88.6 in April 2003 vs. a revised 89.4 in March. The chief culprit was a loss of 12,900 jobs year-over-year, a bigger number than the 4,600-job-loss of February. January showed growth of 5,300 jobs from the year before.

Black Blade: Not good at all. This is a common theme across the nation. It is no wonder that the Bush administration is getting a bit worried as the next election nears. The "Bone Pile" continues to grow as unemployment rises and discouraged workers give up looking for work. "Interesting Times"

USAGOLD / Centennial Precious Metals, Inc.The Fruit of Your Labor#10286305/15/03; 13:38:59

Swiss gold francs
Harvest Time
Whatever it is that you may have sown,
we'll give you the power to reap GOLD.

Centennial has three decades of experience in the field

VanRipUK and the Euro#10286405/15/03; 13:39:49

Blair sets June 9 for euro verdict
Thu May 15,10:19 AM ET

LONDON (AFP) - Britain set a date of June 9 to announce its verdict on adopting the euro, seeking to dampen feverish speculation that it has already decided against entry on economic grounds.

The results of the Labour government's five self-imposed economic tests for joining the euro zone will be announced after a special cabinet session on June 5 or 6, Prime Minister Tony Blair (news - web sites)'s official spokesman told reporters.

A positive verdict, seen as highly unlikely, would lead to a referendum on the issue.

The announcement puts an end to weeks of speculation over the timing of the decision, which had previously been promised before June 7.

The government also denied that a decision had already been made, insisting that Blair's top ministers would have a chance to debate the results of the tests, which are being assessed by the Treasury under the watchful eye of the euro-wary Chancellor of the Exchequer Gordon Brown.

"As always there will be a constructive discussion and consensus will emerge," Blair's spokesman said.

"What this process underlines, as the prime minister said to cabinet, is that no final decision has yet been made, that it will involve the whole cabinet and it will take account of all the relevant factors."

While a positive verdict would go some way to soothing fraught relations with European partners such as France and Germany, polls show that the diplomatic rift over Iraq (news - web sites) has only produced a more sceptical attitude among voters towards Europe.

In a YouGov survey published on Wednesday, those questioned said they would vote almost two to one against joining the single currency.

With successive polls suggesting the government would struggle to turn the eurosceptic tide in Britain, the debate has now switched to whether the door will be left ajar to a vote before the next election, due by mid-2006.

Thursday's surprise announcement came as the government scrambled to contain the fallout from a BBC report that Blair and Brown had already agreed that Britain is not yet ready to adopt the euro.

The BBC's respected political editor Andrew Marr reported, without giving his sources, that Blair had accepted Brown's "core economic judgment" that the government's five tests for euro entry had not been met.

However, a spokesman for the prime minister's office was scornful.

"Very few people know what is going on. Andrew Marr is not one of them," he said.

In his report, Marr said a decision had been reached following "intense discussion" in recent days between Blair and Brown, who is noticeably cooler on the single currency than the prime minister.

Marr added that no decision had been reached on the crucial issue of whether to rule out euro membership for the rest of the current parliament.

Though his remarks triggered a damage-limitation exercise by the government, they came as no surprise to most economic and political experts given a string of similar reports in the British media recently.

"When the decision comes out it will be the worst-kept secret in the world," said Bear Sterns economist Steve Barrow.

"I think you have to see these kind of leaks as spin, as a way maybe to test the waters," he added. "

canamamiBarrick/TrizecHahn/Morgan#10286505/15/03; 14:10:45

I don't want to violate copyright, so I can't copy and paste. Apparently, Blanchard alleges that Morgan has a monopoly position re gold derivatives. Blanchard alleges that, through TrizecHahn, Morgan has a beneficial interest in Barrick. Hence, the motivation for the alleged rigged contracts by which Barrick can't lose; and if Barrick wins, Morgan wins. And Morgan is the alleged gold derivatives monopolist, which is how the rigged game can be executed. Awesome stuff, if true.
Black BladeBlanchard files to amend complaint against Barrick#10286605/15/03; 14:49:09


TORONTO, May 15 (Reuters) - U.S.-based gold dealer Blanchard and Co. Inc. said on Thursday it had filed a motion with a Louisiana district court to supplement and amend its antitrust complaint against Barrick Gold Corp. and commercial bank J.P. Morgan Chase. It alleged in a lawsuit filed in mid-December that Barrick, the world's second-largest gold company, and J.P. Morgan Chase made $2 billion in short-selling profits by suppressing the gold price at the expense of investors. "These new filings include previously undisclosed information about J.P. Morgan's ownership interest in Barrick and Morgan's monopoly position in the U.S. market for gold derivative contracts," New Orleans-based Blanchard said in a statement. A group called the Gold Anti-Trust Action Committee said it will assist Blanchard in its case.

Black Blade: There may be some serious anti-trust implications as the undisclosed interest of JP Morgan Chase appears to be a major issue. Another issue may be that the derivatives deal between Barrick and JP Morgan appears to be a contract not available to other producers putting them at a material disadvantage. If true then this could end up as a bad situation for both Barrick and JP Morgan.

Black BladeFOREX-Dollar retraces losses on intervention talk#10286705/15/03; 15:00:47


CHICAGO, May 15 (Reuters) - The dollar recovered early losses against the yen on Thursday, lifted from a two-year low by traders who ranked Japan's desire for a weaker yen ahead of America's nonchalance over its currency's fall. Japan has openly pressed for a weak yen, saying yen strength dampens its export market. But in recent days, U.S. Treasury Secretary John Snow has been critical of using intervention as a tool to fine-tune economic growth, all the while demonstrating little concern over the dollar's slide. Nevertheless, traders strongly suspect Japan was selling its currency in an attempt to weaken it, ahead of a Group of Seven finance ministers meeting in France this weekend. "Snow has already made it clear that he wants markets to determine" the dollar's levels, said Enrico Caruso, a trader at Tempest Asset Management in Irvine, California.

Black Blade: It is now suspected that Japanese intervention has migrated from the Tokyo trade to the Euroland and U.S. trading hours in a desperate attempt to weaken the Yen. This is of course doomed to fail as it has in the past but desperate times call for desperate measures. The dollar is poised for further weakness on grim economic data including soaring deficits and all time record debt. Meanwhile the currency war will continue.

TownCrierBritain on euro -- nodding toward inevitability#10286805/15/03; 15:02:34

HEADLINE: Public might back euro in next two years

LONDON (Reuters) - People would overwhelmingly reject joining the euro if a referendum were held now...

...But when asked how they would vote in a year or two if the Labour government and business were to mount a campaign arguing strongly that it was in Britain's interest to adopt the euro, 47 percent said "Yes" and 45 percent "No".

...The survey showed 75 percent of people believed the country would join the euro within a decade regardless of public opinion.

-----(see url)----

Bottom line: as the euro constituency grows, the supporting pillars for the dollar (and its free ticket to ride ((= reserve status))) are eroded.

For the transition, you need gold. Call Centennial -- MK, Jonathan, and George will provide good guidance as you "back your truck up" to secure your share of wealth for the ages.


TownCrierBanks signal desire for cash with fed funds trading 12 bp over FOMC target#10286905/15/03; 15:22:28

Federal Reseve responds kindly, providing $6 billion through open market operations using 28-day repos collateralized primarily with U.S. Treasuries, also adds $7.75 billion with overnight RPs.

$13.75 billion in all.

... there is no "meaningful limit" to this power to add money to the system...


TownCrierSpeaking of adding money supply to the banking system...#10287005/15/03; 15:43:03

This week's money supply totals nearly give last week's massive increase a run for its... well, money.

First a remider from my posted figures last week:
M-1 was up $5.9 billion

M-2 was up $44.5 billion

M-3 was up $55.4 billion

Now, in this latest reporting period by the Federal Reserve, the U.S. money supply grew again over the previous week. Helicopter money? Being this deep in this kind of liquidity in a weak economy, there is no wondering how U.S. Treasury Secretary Snow came up with his recent adjective, "soggy", to describe the economy.

You can tread water indefinitely in a current you cannot control, or else you can climb into an unsinkable gilded lifeboat and chart your own course for the future.

This week's numbers:

M-1 was up $6.4 billion, to $1,252.6 billion

M-2 was up $38.9 billion, to $5,992.0 billion

M-3 was up $29.1 billion, to $8,673.2 billion

See url for additional statistical data.

Call Centennial to help trim your boat and give a hand with the oars.


misetichBarrick Lawsuit Update#10287105/15/03; 15:52:32


The TrizecHahn Revelation

TrizecHahn Corporation was formed in 1996 from the merged interests of Argo Partnership L.P. (a J.P. Morgan & Co. / J.W. O'Connor fund) and the Horsham Corporation. This newly formed corporation included several directors present on
Barrick's board as well as its Chairman, Peter Munk. Through this combination, TrizecHahn became the controlling shareholder in Barrick Gold Corporation.

and this from another link which supports the above

"The first to change ownership structure was Calgary-based Trizec Corp. In July, 1994, Argo Partnership LP, a J.P. Morgan/J.W. O'Conner fund, and Horsham Corp. of Canada invested C$ 1.1 billion to acquire 24 percent and 44.5 percent, respectively, of Trizec's outstanding equity."


and again from the article

" discovery of the Argo Partnership documents linking J.P. Morgan to a beneficial ownership
interest in Barrick helps to explain why J.P. Morgan provided Barrick with derivative contracts that virtually guaranteed it a risk free profit.


Interesting ...lets stay tuned on this one -

All On Board The Gold Bull Express

Black BladeFrom The Mailbag#10287205/15/03; 16:00:01

The following courtesy of Eric Fry at Daily Reckoning:

"Financing deals and cash rebates on new cars and trucks rose to record levels last month," the Lansing State Journal reports. "Despite heavy incentives in April, Ford, GM and DaimlerChrysler AG's Chrysler Group all saw their sales decline compared with a robust month a year ago. Nearly every automaker had some kind of incentive last month, contributing to a rise in the average industry outlay per vehicle to $2,508 from $2,207 in March...The average Big Three outlay surged 13.8 percent to $3,310 a vehicle."

Unfortunately, automakers are stuck with their outsized incentive programs. Eliminating incentives - like asking a long-term houseguest to pack up and move out - could be a tricky maneuver. Luring customers into dealerships, says GM's CEO Rick Wagoner, "is getting more expensive and requires even more creativity."

Meanwhile, unsold cars and trucks are piling up in inventory. "U.S. automakers are sitting on an overflow of unsold cars and trucks that appears to be the largest backlog in U.S. auto history," the Miami Herald reports. "About 3.93 million unsold vehicles are sitting on dealer lots, in transit from the plants where they were made or at hushed-up overflow sites like the Michigan State Fairgrounds. All told, about 630,000 more unsold cars and trucks are sitting around than a year ago. Since March, inventories have been at all-time highs."

Black Blade: I suspect a large contribution to the growing "bone pile" from automakers and parts suppliers shortly. Looks like no "economic recovery" here either. Maybe in the "second half". ;-)

Off to the gym!

a nation of oneinflation#10287305/15/03; 16:07:56

I do not have any formal schooling in economics. But yesterday I noticed that the price of my favorite brand of crackers has gone up thirty one precent -31%- in the last year and a half. That is not price stability. Nor is it deflation. There are still the same number of crackers in the box, approximately. I have not been able to avoid noticing that in the forty five years that I have been driving, gas has gone from 19cents, to around 150cents. That is a multiple of six (-6-!). I am shocked. Shocked! Cigarettes, which I smoked once, but didn't inhale, when I should have known better, used to be 20cents (a pack). Now I don't know what they are, but I do not afford them. Copies used to be impossible, before Xerox, so I guess there is no comparison to what they cost now. The ability to read, and to type, are a requirement in order to use the Internet, so we are evolving into a sort of beast that has ancillary non-bodily appendages, like monitors, cell phones, and lawnmowers. If you cut a man's phone antenna, he'd probably choke. Through all this Gold still weighs the same. My grandfather mentioned to me once that when he was a kid, sometime around 1890, that a man told his (my granddad's) father that when he died he was going to leave his wife 63 dollars, and that would be enough to take care of her for the rest of her life. He was in his sixties and didn't believe she would live much beyond eighty five or so. We have all heard of the nickle hamburger. So next year these crackers are going to cost $3.50. Gold will be worth what a small car used to cost. A man's suit of clothes will still have one pair of pants. And inflation will still be called a banana, the way Al Greenspan used to do when Carter told him not say 'inflation,' only now, when the word needs to be used, people change the subject, to talking about Japan, new dollars, shaky bets (derivatives), or petunias. So now tell me again how a government that takes advantage of people's ignorance and short memories, and which relies on various generation's inability to make sense of small changes, is to our advantage. Just the idea of government is itself a corruption.
mikalGold ownership#10287405/15/03; 16:12:54

"Gold. Heading to the moon at a world near you." -Aristotle (our forum)
"That which is common to the greatest number has the least care bestowed upon it."- Aristotle, 'POLITICS'(ancient forum)

TownCrierWhat passes for whimsical "analysis" and real reality checks#10287505/15/03; 16:34:29

Excerpts from this article show that traders will grasp at anything (such as personality) when they can't grasp the fundamentals. This article is also helpful in demonstrating the government's preference for "lightning in the night" as the method to deal with problems that it can't structurally repair.

First item:
NEW YORK, May 15 (Reuters) - For the rest of his days at the U.S. Treasury and perhaps beyond, Peter Fisher seems unlikely to ever escape the ghost of the 30-year bond that he killed.

The talk swirling in recent weeks about the Treasury undersecretary's departure to head the powerful Federal Reserve Bank of New York has swayed the price movements in the old 30-year bond. Investors have eagerly anticipated that a Fisher replacement at Treasury might revive the bond to help cover record budget deficits.

Since news reports on Wednesday that Fisher was now out of the running to head the New York Fed, traders drove up the price of the 30-year bond almost 3 full points and sent its yield as low as 4.43 percent, the lowest since it was first sold in the early 1970s.

...some traders clearly had Fisher on their mind as the bond soared.

"He's still at the Treasury. If there's any speculation that they're going to bring back the 30-year, that's gone away," said Sadakichi Robbins, head of global fixed-income trading at Bank Julius Baer.

Bottom line: It is not coming back because it cannot be fixed within the parameters of our political environment. Can you rattle any list of (typically) Banana Republics with chronic deficits that are able to float 30-year bonds? They can't, and our days were numbered. The taletell was therefore taken out of the market wind to buy more time against spooking the masses.

This leads to the second short-and-sweet item to be excerpted and demonstrated by this article:

Fisher, who as undersecretary for domestic finance is in charge of the Treasury's debt management, was behind the cancellation of future 30-year bond issuance on Oct. 31, 2001, saying it didn't fit with the Treasury's long-term debt plan.

The stunning end to future 30-year bonds, coming on Halloween no less, upset many market participants who had no inkling the Treasury was mulling such a move for what was once the benchmark for the economy's array of interest rates.

To reemphasize the point, traders had no inkling beforehand that the government was about to make this move. The same was true when President Nixon closed the window on gold under fixed convertibility with the dollar. Expect the market players to be "surprised" by future bold moves as the dollar and euro jockey for position and market share. Currently resting nicely off the radar screen, gold is well-positioned to serve as the lightning rod for the next left-field event wielded by the fittest in the current currency battle for survival and supremacy.


misetichCalif. Governor Seeks $8.3 Billion Increase in Taxes #10287605/15/03; 17:01:58


The $95.8 billion spending plan the governor sent to the Legislature differs greatly from his January proposal, which relied more heavily on spending cuts to bridge the gap. This time, Davis called for $8.3 billion in new taxes, including a half-cent increase in the state sales tax and higher taxes on cars, cigarettes and the wealthy


California is the 7th largest economy in the world and its finances are in a mess and getting worse - most other states are in the same shape as is the federal government

All On Board The Gold Bull Express

misetichConsumers Trimmed Spending In April - Consumers tapped out#10287705/15/03; 17:15:07


"Consumers are tapped out," said Sung Won Sohn, chief economic officer at Wells Fargo & Co. "They've done a marvelous job of supporting the economy, but they are basically done . . . We need something else to pull up the slack."
"It's not just that the unemployment rate is a problem, it's that the people who are unemployed are unemployed for a longer period of time," said John E. Silvia, chief economicst at Wachovia. "The job pool is stagnant."
"The saving rate is pretty much flat, which certainly suggests that consumers are spending as much money as they have," Wyss said. "You can't expect them to do much more than that."

Consumers are tapped out and debt out - hate to see what happens when interest rates rise

Hyperinflation coming in a location near you

All On Board The Gold Bull Express

goldquestTotal Lunar Eclipse#10287805/15/03; 17:25:56

tonight for North America. Starts at 10:03 pm and total eclipse is at 11: 14 pm, eastern time. A good time for gold to go ballistic!
misetichDeflation - deflation - deflation - everywhere - Is it a Fed con job?#10287905/15/03; 17:27:32


For most U.S. consumers facing sharply higher costs for medical care, education and other services, which account for a big chunk of the U.S. economy, deflation is probably not on their radar screens.

Medical care prices, as measured by the Consumer Price Index, have gone up 4.3 percent in the 12 months ending March. Education costs, including tuition and supplies, are up 6.3 percent over the same period.


The often "massaged" CPI showed a massive decline due to "falling" gasoline prices (though they forget to mention that prices are still much higher than they were a couple of years ago in the midst of bubblemania)

House prices are soaring! so are electricity prices, as are housing taxes and other services

Cable, entertainment, satellite, internet, telephone, cell phones prices are climbing

Food is climbing

Deflation - yes in stock market values and unfortunately those prices are need to adjust downward to reflect riality!

Other "deflation" is caused by overcapcity and low demand and the failure of the 90's CEO to adjust to tough times - some have (read Buffet) and are successful other are still following Sir Greenspan - the pied piper of optimism - and are paying the price

All On Board The Gold Bull Express

GoldiloxSpot and Spike must be reacting to Mid-east tensions#10288005/15/03; 17:41:23

Is the ride they are on a two-hump camel? I'm not too fond of the way the POG drops right after closing and comes up again right before opening. It keeps the retail price just a little higher than the daily average, once more screwing the little guys.
misetichYear of fears leaves trail of deflation despondency - Debt Deflation#10288105/15/03; 18:07:46


That's a familiar, sickening feeling in Japan but one that has only recently seized politicians and central bankers in Europe and the US in its icy clutch. Even now they can barely bring themselves to name this prospect, like patients who instinctively recoil from even breathing the word "cancer" lest they should, by doing so, bring the dread condition on themselves.

The consequences of deflation for highly indebted companies in the US and Europe would indeed be fearful. It would wreak havoc in financial markets that would make last year's wrenching volatility seem a tame prelude. That's why the world's financial leaders are now fully focused on the threat – even while portraying it as a distant one.
The big question facing many companies is how to deal with the pension and healthcare deficits that have built up as returns from the markets have fallen. A recent Merrill Lynch survey (Decomposing pensions) estimated that the 348 companies in the S&P500 that run defined-benefit pension plans would have had a combined net liability of between $458 billion and $638 billion at the end of 2002. That's going to need some creative solutions, and ones that won't be regarded as suspect or simply dodging tax or accounting rules.

The "controlled media" disinformation and misinformation campaign on deflation by focusing on "falling" managed CPI and PPI indexes -

Debt deflation - Stock Market Deflation is the "cancer" they are trying to cure. Japan has been trying to find this cure for the last 13 years and failed... Will the US fare better?

So far the verdict is a resounding NO!

All On Board The Gold Bull Express

GoldiloxOperation Iraqi Freedom: By the Numbers#10288205/15/03; 18:17:32


"A single source of aggregated facts about Operation Iraqi Freedom (OIF) from the Combined Forces Air Component Commander?s (CFACC) perspective. This report is based on information collected during operations at the Combined Air Operations Center, Prince Sultan Air Base, Kingdom of Saudi Arabia."

Hack has posted the unclassified finance report from the field command in Operation Iraqi Freedom. An interesting tabulation of the operational costs of a short sojourn in the desert. It seems low to me, since we were often quoted $1Bn/day, but closer examination reveals it contains no "fixed" or "CapEx" costs, so therein may lie the difference.

Goldiloxcorrection#10288305/15/03; 18:18:55

Oops, the link cut and paste got me again.
Goldiloxthe Truth about Jessica#10288405/15/03; 19:31:58,2763,956255,00.html

A great tale of US and UK media wagging opposite ends of the proverbial dog.


"Her Iraqi guards had long fled, she was being well cared for - and doctors had already tried to free her. John Kampfner discovers the real story behind a modern American war myth.

. . .But the American media tactics, culminating in the Lynch episode, infuriated the British, who were supposed to be working alongside them in Doha, Qatar. This Sunday (May 18), the BBC's Correspondent programme reveals the inside story of the rescue that may not have been as heroic as portrayed, and of divisions at the heart of the allies' media operation.

One story, two versions. The doctors in Nassiriya say they provided the best treatment they could for Lynch in the midst of war. She was assigned the only specialist bed in the hospital, and one of only two nurses on the floor. "I was like a mother to her and she was like a daughter,"says Khalida Shinah.

"We gave her three bottles of blood, two of them from the medical staff because there was no blood at this time,"said Dr Harith al-Houssona, who looked after her throughout her ordeal. "I examined her, I saw she had a broken arm, a broken thigh and a dislocated ankle. Then I did another examination. There was no [sign of] shooting, no bullet inside her body, no stab wound - only RTA, road traffic accident," he recalled. "They want to distort the picture. I don't know why they think there is some benefit in saying she has a bullet injury."

"It was like a Hollywood film. They cried, 'Go, go, go', with guns and blanks and the sound of explosions. They made a show - an action movie like Sylvester Stallone or Jackie Chan, with jumping and shouting, breaking down doors." All the time with the camera rolling. The Americans took no chances, restraining doctors and a patient who was handcuffed to a bed frame.

There was one more twist. Two days before the snatch squad arrived, Al-Houssona had arranged to deliver Jessica to the Americans in an ambulance. "I told her I will try and help you escape to the American Army but I will do this very secretly because I could lose my life." He put her in an ambulance and instructed the driver to go to the American checkpoint. When he was approaching it, the Americans opened fire. They fled just in time back to the hospital. The Americans had almost killed their prize catch.

Poor Jessica - She will forever be saddled with the knowledge that her story has been totally warped for propaganda purposes. This is one BBC story that will never make it to the US market. It is soooo important to "sell" the US public on the necessity and glory of this war to distract us from the bone pile and self-destructing dollar.

CytekSome thoughts on the POG.#10288505/15/03; 19:35:47$gold,uu[w,a]dahlyyay[de][pb50!b200!f][vc60][iut!ub14!la12,26,9]

Since the April low of $319, the POG has staged another remarkable rally for 6 weeks to reach today's close of $352. Now if you look back to the corretion that started on Feb.5th and ended on April 7th a 50% retracement occured. The Fibonacci target is $360, the only queston is will we get there on this leg up. Check out the chart and you will notice that every time the MACD hits 5 the rally ends, also when the RSI goes over 70 ... slame bang down it goes. If you ask me the rally since early April is looking overbought
bouncing off of $355 twice now. And then at 10:30 i saw the same old stuff, the commercials at it again, i watched Silver get yanked down but Gold held it's own, well at least for a while. And then bang went Gold down at 12:30 from $354.50 to $351. The Dollar also closed up at 95.40, and Mr. Sinclair said if it hits 95.50 it could turn up. I took profits on one of my PM holdings and anticipate
the POG retesting the 325-330 area in the next few weeks.


GoldiloxFalling Pound good for British Exports says BOE, Brown#10288605/15/03; 19:51:39,3604,956962,00.html

BOE and Gordon Brown disagree about the amount of growth stimulus from the dropping pound, but they both are publicly espousing its benefit to the export industry. Sounds vaguely familiar . . .


by Mark Tran
Thursday May 15, 2003

UK economic growth should pick up next year following weakness in the near term, as a cheaper pound boosts exports, the Bank of England said today.

In its quarterly inflation report, the Bank said growth this year was likely to be lower than it had estimated three months ago, but should accelerate to average at around 2.5% next year. This represents a modest upward revision of 0.25% from the Bank's February forecast, but still well below the bullish estimates of the chancellor, Gordon Brown, in his April Budget.

At the time, Mr Brown said growth for next year should reach between 3% and 3.5%, a figure dismissed as unrealistic by most City economists. But Charles Bean, the Bank's chief economist played down the gap at a press conference, saying that "the difference between us is small".

Dollar BillR. Daughty comments#10288705/15/03; 19:56:08

So let me get this straight, as interest rates are now pounded down to lows not seen in 40-plus years, and the Fed is actually trying to ignite inflation, in direct opposition to the entire history of the world, the entire history of the Fed, the entire corpus of economics as a science and even common sense? And at the same time as price inflation is already rising waaayyyy outside of Bernanke's preposterously-stupid range of inflation targets, where monetary inflation is blazing, Congressional budget-deficits are growing so high that it takes trained professionals with high-powered telescopes to even see the top of the Everest-sized pile, the dollar is falling, the current-account is exploding, and yet the Treasury-buying crowd sees nothing but reduction in rates, so that yields will fall at the exact same time as inflation is rising? Wow wow wow wow!

"Okay! Okay! You're not laid off! But that would mean that the prices you pay for things goes up. Would THAT be a bad thing?" Our factory-floor denizen scratches his head and allows that, "Yeah, maybe. I dunno." Obviously perplexed, our flustered reporter presses gamely on, "Okay, now suppose that bread goes to a thousand dollars a loaf, but you are not making any more money than you are right now. Would THAT be bad?" The camera flawlessly records an immediate reaction, and we notice that this has stirred something inside the head of our brave machine-jockey. "You mean, a loaf of bread costs a thousand dollars? Well, umm, then each slice would be worth, what, fifty bucks, right? Hey! I got a tuna-fish sandwich in my lunchbox right now! That two slices! That's a hundred bucks! And I got practically a whole loaf more at home right now! Ha ha! I'm rich! Rich! This is great news! Thanks, dude!"

Chad Hudson writes, that since March 2001, "While the private sector has been eliminating workers, the government sector has actually added almost 600,000 workers over the same time period. Local governments have been the source for most of governmental job creation, adding 446,000 jobs or about 3.4% growth. State governments have also been active in adding employees, adding 104,000 since March 2001, which is 2.2% higher than two years ago. The Federal government has lagged a bit, increasing its payrolls by 1.4% by adding 20,000 workers."

GoldiloxThe "R" word is being used to describe German economy#10288805/15/03; 19:56:57,3604,956577,00.html


German slump points to sluggish eurozone

Mark Tran
Thursday May 15, 2003

The German, Dutch and Italian economies - accounting for more than half of eurozone economic activity - all shuddered to a halt in the first quarter, official figures showed today.

The most worrying news came from Germany, the world's third largest economy. German gross domestic product (GDP) shrank 0.2% in the first three months of this year, following a slight decline in the last quarter of 2002, meaning that Germany technically is in recession - defined as two successive quarters of economic contraction.

Goldilox: It looks like more pressure on the ECB to drop rates and get in line with US and Japan.

silvercollectorGoldilox#10288905/15/03; 20:51:29

Thanks for the Lynch story. Perhaps the most sickening of the perverted media spin so far.

When are credible people going to start telling us the truth?

Black BladePIMCO's Gross Sees Fed Funds Around 1.25% For `Years'#1028905/16/03; 00:50:00


NEW YORK -(Dow Jones)- Low interest rates are here to stay "for a number of years," according to Bill Gross, managing director of PIMCO, the world's largest bond fund, who said Thursday he sees the Federal Reserve's key interest rate staying around the current 1.25% for some time to come. Interviewed on CNBC's "Business Center" program, Gross said the biggest change in his outlook this year is "recognition that the Federal Reserve, that (Fed Chairman Alan) Greenspan will probably stay down at these levels, these relatively low, historically low, short-term interest rates for perhaps a number of years." Investors shouldn't expect the double-digit returns "they are used to over the past 20 years," Gross said. And he cautioned against assuming more risk by buying high-yield junk bonds or volatile stocks. Citing the presence of "deflationary forces" in the economy, Gross said he did worry about deflation. But he said he believes the government will prevail, "and produce inflation as opposed to deflation."

Black Blade: If rates stay this low or lower and the government does "prevail" by producing inflation, then the "real" interest rates (which are already negative) will become more negative signaling an extremely "bullish" scenario for precious metals.

BTW, saw "Matrix Reloaded" tonight – "interesting".

TopazBonds and Gold.#1028915/16/03; 04:07:32

WoW! There seems to be a concerted effort to confine the Long end of the curve and let the Arbitrage Traders do the flattening...hope it works! B/Holders will succumb to the temptation to bail sooner rather than later I feel.
Imperative to keep $ and Dow afloat...ECB really needs to make some Gold noise shortly...maybe G7!

When Bonds collapse, hold your Gold tighter than ever as the short-term price could do anything!

ZhishengDead Cat Bounce?#1028925/16/03; 06:46:34

Looks like the dollar's rally is in trouble.
WaveriderSpot 'n Spike#1028935/16/03; 07:15:02

CAT??? Cat?? Did someone say cat? Spot'n Spike are frisky!
mikal@Zhisheng#1028945/16/03; 07:21:46

Dollar party almost wound down- Haiku poem

Dollar hangover-
Slowly tosses its cookies,
Bent over privy.

mikalL.A. "may face even bigger quakes"#1028955/16/03; 08:24:58

LOS ANGELES, May 15 —Excerpts: "The faults that crisscross Southern California may be capable of rupturing in concert to produce larger earthquakes than previously thought, according to several studies of the magnitude-7.9 quake that rocked Alaska last year.
The Nov. 3 Denali Quake was the largest to strike on land in North America in nearly 150 years, but caused few injuries and little damage given the remoteness of the area. It ripped across 210 miles in two minutes, split glaciers and triggered thousands of landslides.....
James Dolan, an earthquake geologist at the University of Southern California, said the new studies confirm what many had suspected about the simultaneous movement of multiple faults.....
The Denali quake also produced shaking of a longer duration and period, which can crack tall buildings and bridges, than do smaller earthquakes, scientists said. Also, the energy released by the earthquake was focused in the same direction as the southeasterly progression of the rupture of the three faults. Were a similar quake to occur on some segments of the San Andreas, its energy could be focused directly at the Los Angeles region..."

adminMK's Gold Commentary & Review#1028965/16/03; 09:15:05


Was MK stretching it when he posed this question?

"Speaking of Japan, Zembei Mizoguchi, vice finance minister for international affairs told reporters yesterday: 'We don't have the intention of purposely taking the yen higher or lower. We want to prevent excessive moves.' The question was posed after it was apparent to everyone except possibly Mr. Mizoguchi that the Japanese government had indeed been active in the forex markets in favor of the dollar recently. In fact, I am trying to recall an instance when Japan was on the other side of the market -- trying to drive the dollar down. Anyone have an idea?........

Well, this morning I got an answer -- not directly, but from Forbes magazine which apparently was scratching its head about that comment as well.

USAGOLD / Centennial Precious Metals, Inc.Why should YOU buy gold? Because no one else will do it FOR you. We can help.#1028975/16/03; 09:30:17

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 and 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 asset 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?

USAGOLD - Centennial is here to help.

21mabryGoldcorp#1028985/16/03; 09:48:33

Goldcorp stated in a press release they are buying bullion as an investment as they see a price of 800 dollars an ounce in six to eight years. Would it not be cheaper for the company to just keep any unhedged gold they mine. Their cost per ounce mined has to be cheaper than 350 an ounce. It seems to me like general mills buying quaker oats finished products because they think prices will rise.If you have capacity why not ramp up your own production.
Great Albino BatOn Haiku...#1028995/16/03; 09:49:53

Some trivial comments are perhaps to be tolerated, since gold is up $3.40 before getting its usual bashing a half hour before trading shuts down for the weekend, which I am sure we all expect. Our sadistic master has to thrash us all every day before we go home, just to show who is boss. (Sigh!)

Mikal, I must deplore the use of Haiku in your recent post. It's not proper! The proper sphere of poetry is the beauty of life, its evanescence, its brevity; love in its various levels; death or defeat as inevitable; Honor and Virtue as enduring, the Spirit only surviving Death.

Try again, I am sure you can do much better!

Best regards from the GAB.

Gandalf the WhiteWOWSERS !!! ANOTHER Roller Coaster RIDE !!!#1029005/16/03; 09:51:23

KEEP Jumping SPOT !!!
Clear that $356. level and FOLLOW SPIKE !!!

TownCrierHEADLINE: Strange new world of pricing in U.S. economy #1029015/16/03; 10:07:55

The Associated Press (5/16/03) -- For Alan Eade, the costs of sending his children to college and providing health insurance for his family keep going up, up, up. But when it comes to the stuff the 56-year-old finance executive buys -- from cars to DVD players -- it's a different story. Last year, he traded in his five-year-old Dodge Caravan for a new model of the same minivan for $5,000 less than he paid in 1997.

...Prices are falling for a wide array of products. In fact, the Bureau of Labor Statistics reported last month that prices of consumer durable goods, items that last longer than three years, are falling at the fastest pace since 1938.

...Why is that? Mr. McCulley notes that these products have a common trait. All are made in an intensely competitive global market. Manufacturers are burdened with lots of capacity and have an ability to shift production to countries where labor costs are low, such as China or Mexico. The fierce competition for scarce consumer spending has forced producers to push prices lower or to jazz up their products with new features, like heated car seats, faster computer processors or basketballs that include their own internal air pumps. In the strange calculus of economic statisticians, the Labor Department often counts product improvements as price declines when the improved product's price doesn't change.

But that's only half the story. The other half involves rising prices. Home prices, for instance, have risen sharply for several years. And while there are some signs that prices of expensivehouses have softened, prices overall remain high. Prices of many services are going up, too.

Indeed, for insurance companies, universities, doctors and even plumbers, inflation is still very much the norm. ... The service sector doesn't face the global competition that goods makers face, and that has helped to limit downward pressure on these prices. "If you need to get a plumber at 2 o'clock in the morning, you really can't call Bangkok and get one. You're going to call a local guy, and he's going to charge you $85 an hour."

-----(see url for full article)-----

Here is a key point from the article's concluding paragraph.

--------"...many consumers don't seem to see prices slowing, let along falling. In April, consumers in a poll said they expected prices to rise 4.5 percent during the next 12 months. "The things that people are really concerned about have not slowed all that much."-------

Perceptions and expectations have a remarkable influence for driving human behavior into self-fulfilling events. Add to that the government and Fed's resolve to fight deflation tooth and nail and it becomes fairly certain that the monster hiding under our bed is Inflation.

Protect yourself and sleep well at night with a prudent diversification into gold. Beat the crowd and enjoy good prices while they last. Call Centennial today.


USAGOLD / Centennial Precious Metals, Inc.What you need to know before you buy your first ounce of gold...#1029025/16/03; 10:22:30

Q. What is the best approach for the safe-haven investor?

MK. If you want to protect yourself against inflation, deflation, stock market weakness and potential currency problems -- in other words, if an economic disaster is your concern, there is only one portfolio item that will serve you in all seasons and under most circumstances -- gold coins or bullion.

Q. What makes USAGOLD / Centennial Precious Metals different from its competitors in terms of its interaction with clients?

MK. Our business philosophy allows us to take a more laid-back approach. We don't employ a room full of brokers spinning the phones day and night. We don't have multi-million dollar advertising expenses dictating what kind of advice we give clients. This is all by choice. I decided long ago that I didn't want the headaches that go with managing a large number of brokers and the support staff and facilities required. At the same time, we get hundreds of requests each month for introductory information packets. We do not make cold calls. We do not work mailing lists. We do not call people at all hours of the day or night. We do not use marketing and sales gimmicks -- leaders, bait and switch, and the rest of it. We primarily work with clients who have discovered us, like what they see, and want to form a long term relationship with a reputable and reliable gold firm.

Q. Does the "laid-back approach" limit your business?

MK. Yes and no. In the short run, "yes." In the long run, "no." We probably lose a few prospects to the aggressive companies which use hard-sell tactics but we will not be changing our client-friendly approach. We know that not every prospective investor is going to become a client of USAGOLD / Centennial. However, we know that the client who chooses us is likely to be the type of client we are accustomed to doing business with. We work with a large number of professional people and business owners -- active, retired and semi-retired. In fact, we work with clientele that span the economic spectrum and all walks of life. Getting back to how our approach sets us apart from our competitors, we get quite a few disgruntled high net worth clients who come to us after being run through the mill by some of the boiler-room operations I've referred to earlier. They are usually grateful that they found us.

Q. And finally, is there anything else you would like to share with us?

MK. Fundamentally, we believe that we are here to serve the client. Anyone who has done business with us will vouch for the courteous and professional service he or she has received. Our staff is carefully chosen and it shows. We get referrals on nearly a daily basis and are kept busy with strong repeat business. I would also like to call attention to the solid informational services offered at this website. We believe that any of our clients or visitors will find USAGOLD head and shoulders above anything else out there. I would encourage anyone attending this site to have a look around. We also publish a very good hard copy newsletter called News & Views: A Bi-monthly Review of Forecasts, Commentary & Analysis on the Economy and Precious Metals. Above and beyond that, the most important thing is the way we treat our clientele. From first inquiry through order fulfillment, we want to make the gold investing experience as pleasant and rewarding as possible. We have a large and satisfied clientele and that's the way we want to keep it.

Gandalf the WhiteNICE WORK, SPIKE & SPOT !!#1029035/16/03; 10:29:23

You have CLEARED $357. !!! Can you try for $358. ??

a nation of oneetc#1029045/16/03; 10:43:55

The poet felt strongly about gold
And said so with all his best powers.
His compatriot then gave him a scold,
Saying "Poetry is only for flowers."

"Emotion from a heart that is bold-"
Claimed the young lecturer for hours-
"Should never in verse be told,"
Lest all of his rules,
That he learned in his schools
Be proved to be frozen and cold.

CytekSPOT#1029055/16/03; 10:56:53

Watch right before the close they will try to pull SPOT down to below 354. Even though the dollar continues to drop.


Clink!Close @ $354.2#1029065/16/03; 11:36:43

Looks like someone was waiting for them in ambush. Well, a close over $354 is meant to be a critical level for some derivatives, according to Sinclair or Murphy (can't remember which), so I guess we just have to wait for the fireworks. But I'm not holding my breath - we've heard 'magic numbers' before.


Great Albino BatHaiku for Waverider...#1029075/16/03; 12:26:28

"Gold is for warriors,
Gold rings for their lady loves;
Paper bills for serfs."

Gandalf the WhiteHOW LOW CAN it GO ? the US$ that is !#1029085/16/03; 13:45:14

Trying to break 94.0 !!
GOLD must go in the opposite direction !!!
IF I could plot a chart of the US$ and POG -- I WOULD !
BUT, I know not how.

WaveriderHaiku for GAB#1029095/16/03; 13:47:58

I feel oh...modest
Interpretion Haiku
Proposal? A bat?

I'm flattered and thank you!

Black BladeFASB Sees Derivatives as Liabilities#1029105/16/03; 14:21:00,5309,9543,00.html?f=features


The Financial Accounting Standards Board has issued a new statement that aims to improve accounting for certain financial instruments, including mandatorily redeemable shares, put options, and forward purchase contracts. Under previous regulations, companies could account for these instruments as equity. Under Statement 150, they will be booked as liabilities. The new statement responds to the need to clarify how these financial instruments with characteristics of both equities and liabilities should be recorded. In addition to the instruments already mentioned, obligations that a company can settle by simply issuing its own shares also should be booked as a liability.

Black Blade: Well whattaya know. Apparently someone was listening the Warren Buffett and not Alan Greenspan.

Black BladeDollar Falls on Speculation G-7 Won't Act to Halt Its Decline #1029115/16/03; 14:31:49


New York, May 16 (Bloomberg) -- The dollar had its biggest drop against the euro in 10 months as investors speculated that ministers at a Group of Seven meeting this weekend won't take action to stop the dollar's 21 percent slump in the past year. ``The U.S. government has shown no desire to slow down the depreciation of its currency, so people have no choice but to sell dollars,'' said Andrew Feltus, who helps oversee $100 billion at Pioneer Investment Management Inc. in Boston. He holds more euro- denominated assets than dollar assets and has recently added French inflation-indexed bonds to his portfolios.

In a May 9 interview made public this week, Snow said that exchange rates are ``best set'' by the market. He said government buying or selling of currencies has little effect on an economy, signaling his reluctance to purchase dollars to stem declines. ``As a general rule, we'd prefer to see interventions kept to a minimum,'' he said. ``Expectations are that the BOJ will come into the market as the dollar continues to decline against the yen,'' said Robert Lynch, a currency strategist at BNP Paribas, the 13th-largest trader in the $1.2 trillion-a-day foreign exchange market, according to a 2003 Euromoney magazine poll.

Black Blade: Watch for a continued fall in the US dollar. There is no choice as the dollar will weaken further in spite of intervention efforts.

TownCrierThe Afternoon Gold Report... by Jon Warner#1029125/16/03; 14:47:19


May 16, 2003 ( --
New York spot gold settled higher at $354.20 an ounce up $2.10 an ounce from yesterday's close. "The dollar got crushed this morning an hour before we opened and that's what drove gold higher," said a floor broker. "The dollar is becoming worth less and the euro is not an appealing investment either," he added. "The dollar continues to get drilled and has made new contract lows with no support in sight," said Charles Nedoss, a gold analyst at "The so-called strong dollar policy is non-existent..."

...This weekend the G7 (or is it really the G8 now?) will meet in Deauville, France to discuss global economic and trade issues.

...a portfolio insurance position in precious metals will act as a counter balance to the continuing onslaught of grim economic news and the battered U.S. dollar.

-----(click url for full report)-----

Call Centennial to spin an appropriate portion of your portfolio into gold and enter the weekend with suitable peace of mind. Jon, Mike, and George stand ready to assist, but it is ultimately up to you to take action and do what must be done on your behalf. Pick up the phone and talk things over. The call is free, the counsel is friendly and helpful.
(800) 869-5115


BoilermakerPaper Gold Product#1029135/16/03; 14:48:22

There are those who will wonder why the proposed Equity Gold Trust only allows actual redemption of gold from paper to actual bullion in amounts of 10,000 ounces, about $3.5 million worth.
The best answer is that not many individuals will care about redeeming their gold paper. Indeed, Americans (and more than a few Canadians) have little inclination to actually hold gold and pay insurance and storage fees for the privilege.
Larger investors, including the hedge funds whose bets often precede a monstrous move in a stock or bond, are more likely to want that gold in their coffers and not just on paper. Each of the Equity Gold Trust's shares will represent a tenth of an ounce of actual gold and not some derivative formula for the gold price. At current prices, the shares would trade at about $35 each.
The physical gold as represented by the daily purchases and sales of investors in the proposed fund, will be deposited with Hong Kong Shanghai Bank in London.

This new paper gold can only be converted to the hard stuff for high rollers. I wonder if the prospectus fine print will allow derivitives to be part of the portfolio. I'm a bit surprised that Calandra didn't discuss the possibility for such mischief.

Black BladeUS National Debt Clock#1029145/16/03; 14:51:36

The "official" debt ceiling has been breached but with quick moves and creative accounting the actual debt is not fully disclosed. Including "off the books" debt, the US debt is well in excess of $30 trillion. "Interesting Times"

- Black Blade

R PowellDerivatives' value // liability#1029155/16/03; 15:08:23

See BB's post (102910)

The Infernal Revenue Disservice requires that any open derivative positions be marked-to-market to assess their value on December 31st of each year. These numbers along with profits and losses from positions closed during the year give a year end profit or loss total (number) that can be taxed as capital gains or losses. It's not that hard, simply mark them to market. The hard part occurs on the other 364 days of the year when decisions are made that will determine what that year end number will be. I don't pay any taxes on my physical stash.

Friday, again,!!
Happy... Weekend !!

R PowellPoetry#1029165/16/03; 15:13:47

Hey, Mikal, I got a good laugh from your (102894) haiku. How true that yesterday's excesses lead to tomorrow's displeasure, and, in both cases, self-inflicted.
misetichDeflationary spiral feared as Japan's GDP falls#1029175/16/03; 15:15:51


Japanese deflation gathered pace in the first quarter with year-on-year prices falling 3.5 per cent - their fastest drop on record.

The fall may fuel fears that Japan, which has managed to co-exist with relatively mild deflation since the mid-1990s, could be sliding into a deflationary spiral.
This week, Eisuke Sakakibara, former vice-finance minister, said Japan could live with mild deflation so long as it prevented the economy tipping into a destructive spiral of falling prices. He said deflation was the structural result of global productivity gains and would likely spread from Japan to the US and Europe.

Japan going from bad to worse and the contagion is spreading - debt and stock market deflation that is!

All On Board The Gold Bull Express

R PowellProducer buying#1029185/16/03; 15:26:44

I've read that Goldcorp is buying bullion as reported by 21mabry (102898) who asked an excellent question about whether Goldcorp is increasing its stash by withholding production or by buying on the open market.
Does anyone know?

Also, has Goldcorp stated that this buying is physical in hand or are they buying forward in futures? I would think that if it's going to be profitable to buy back forward sales (unhedging), then it's also going to be profitable to buy forward. Closing shorts and buying longs are quite similar, no?

GoldiloxHaiku#1029195/16/03; 16:03:12


before you bash Mikal's haiku, go read some EA Poe. Now, there's some optimistic peotry. Made in America!

GoldiloxPOG vs. $$#1029205/16/03; 16:12:37

@ Gandalf

The Spot chart is POG in $, so it's already in the chart. If you wanna track the downward movement of the dollar vs. gold, reverse the X and Y coordinates.

The $Index chart is not the same, however, as it tracks the dollar aginst a basket of currencies, I believe.

The easist way to compare these is probably to just overlay both graphs on the same grid.

eddiebhoyto boilermaker @ paper gold product#1029215/16/03; 16:16:13

"The physical gold as represented by the daily purchases and sales of investors in the proposed fund, will be deposited with Hong Kong Shanghai Bank in London."

is this not the very same bank that when the crises hit
in argentina shut their doors and refused to pay out to their us dollar account holders saying something along the line that

"we dont see why our shareholders worldwide should have to
pick up the tab for this local problem in argentina"

makes you think.....

TownCrier"Unprecedented" joint statement from #'s 10 and 11 Downing seeks to limit perceived separation of PM Tony Blair and Chancellor Gordon Brown#1029225/16/03; 16:19:13

Joint statement from 10 Downing Street and the Treasury:
"The Prime Minister and the Chancellor presented a totally united front at the Cabinet when they outlined the decision-making process on the euro on Thursday.

"The two men went out of their way to make two basic points: Firstly, to assure the Cabinet this was a vital process of consultation in which they have a real say. And secondly, to make clear that the dogmatic positions being ascribed to them by some in the media should be ignored."

The analysis I shall leave to you.


segel_fliegerRe: Producer buying#1029245/16/03; 16:31:28

The answer is "both", they hold back production and they
purchase physical in the cash markets. (See snippet from thier website below).

I think most readers here would find them to have a philosophy towards Gold that is very similar to thier own. I read somewhere they now have more bullion than 37 countries. (Which could possibly includes the US, unless you believe the "official" drivel that comes out of Treasury and the Fed :^).

Sometime last year, the CEO Rob McEwen tried to purchase 40,000 ounces of physical to "test" the liquidity of the cash markets. What was interesting is that he was told "no problem", but when he said let's do it! he got the run around. Unfortunately, the article about this incident seems to no longer be available for thier website...

From thier website;

"Goldcorp believes that gold is money and therefore we have increased our bullion inventory. As of March 31st, 2003 our gold bullion inventory increased to approximately 223,576 ounces. Our gold bullion inventory has been increased in two ways: first the company held back a portion of its gold production as inventory, 3,877 ounces were held back in the first quarter. Second, the Company purchased, at the end of the first quarter, 123,817 ounces of gold bullion at an average price of $322 per ounce."

A good weekend to all the "bugs" out there...

TownCrierBTW... *stamp*stamp*stamp*#1029255/16/03; 16:31:50

The red ink has spoken.

Congrats to everyone who joined ranks as new owners of these fine specimens. Jonathan is piecing together the next nifty offering to spice up your standard fare -- to be unveiled in the not-too-distant future if all goes well.


TownCriersegel_flieger "...the article about this incident seems to no longer be available..."#1029265/16/03; 16:39:33

Find the interview here in our Gilded Opinion section -- click the url above. McEwen discusses this incident near the end of his interview.


LeighMore Haiku from the Gutter#1029275/16/03; 16:46:41

In an effort to do things correctly, I vow to only write haiku that deal with these subjects: Beauty, evanescence, and brevity of life; various aspects of love; inevitable death or defeat; enduring honor or virtue; spirit surviving death.

Here are my contributions:

(Inevitable death or defeat)
Suicide dollar
Bursts into green confetti
Then a ghastly pink

(Spirit surviving death)
Bad thugs may get us
Because they envy our loot
But we'll still be rich

More to come later, maybe.

R PowellCOT#1029285/16/03; 16:46:44

As usual, the report appears on Friday but gives numbers as reported through last Tuesday 5/13/03.

Both gold and silver showed the Commercials increasing their short side positions while both the large and small speculative traders were increasing their longs. Open interest was up about 5,000 contracts in each. The above link gives the futures only numbers (without options). I'm happy to see the so-called small specs holding a good percentage of the long contracts. I'm especially happy to see this in silver as I've a theory that there may be a growing number of small silver investors holding firmly onto the long side, neither panicing into selling on the lows nor tempted into selling for profit taking on the higher end. I still fear a POS retraction but, maybe, a higher POG will negate the need for this and silver will break out over $5.00. It's hard for silver to fall too much when gold is so strong.

One of these days the fundamentals driving POG higher will drive the Commercial players to far, perhaps to the panic point of covering their shorts while the speculative players are still buying. This imho will also happen in silver but maybe not until a real physical shortage (or perception of shortage) appears. That is, silver shortage will drive the price higher unless the POG takes it higher first. Shortly after either event gold and silver will no longer be cheap. One fine day, in the not too distant future, the real supply and demand situation with both gold and silver will drive the market price with more force than the see-saw business as usual paper trades can muster. Then they'll all cover shorts and go long and wait patiently to sell into the Johnny-come-latelies mania buying frenzy. Then, exactly two moon's time after that happens.....Hey, what do I know? It could happen!
Happy weekend!

R PowellPowell's price prediction in poetic presentation#1029295/16/03; 17:33:36

Dark under new moon
From chicken entrails divined
Price frenzy very soon

GoldiloxMcEwen interview#1029305/16/03; 17:36:27


Thanks for the repoint to McEwen. A six month later update of that opinion would be worth its weight in .... well, gold!

R PowellSecond link try#1029315/16/03; 17:40:03

Hopefully this will work. Any thoughts?

Randy, as usual you're right there to link us to the Goldcorp information. You do good work, thanks.

R PowellGoldilox#1029325/16/03; 17:52:41

Agree entirely. Calling Mr. McEwen! Front and center please sir. Stop lurking and come forward with some current information. I'm sure the gatekeeper will issue to you, free for the asking, a password and aliases are available if you so desire. For instance, a handle like Goldcorp would hide your true identity. By the way, who was that ORO guy?
TopazWhat ho! what ho!#1029335/16/03; 18:12:13

A good resource for Poe and other literary "guttersnipes"
GoldiloxThe Gold Bug#1029345/16/03; 18:24:50


What Ho What Ho!
I had completely forgotten about this story. Thanks much!!!

WaveriderGreat Albino Bat#1029355/16/03; 18:53:30

I think I need to try again...I have only now caught up on today's forum. Earlier today I was presented with your Haiku following a 2 hour oral exam and did only a quick read and response. If I may say...I think there are many different expressions in poetry, with each person having a sense of what is important to that particular individual at a certain point in time. None is either better or worse, but just different - like looking at the same view through a different lens on a camera - wide angle, macro, etc. -what may appeal to some may not appeal to others. I think all expressions need to be welcome here. Realizing now what is important to the Great Albino Bat, please allow me to try again...

Whisperings of Gold
Caressing my Heart and Soul
Transcend time and space.


GoldiloxThe Desperate Experiment of Maximum Global Liquidity#1029365/16/03; 19:22:29

Today's musings on the Credit Bubble by our friend Doug Noland over at The Prudent Bear


And while today?s historic Bubble has faced near death experiences on several occasions (this past fall the latest, and perhaps most serious), it may today appear more impervious than ever. And yet this is perfectly consistent with speculative market dynamics, and recalls how surviving through the late-1998 crisis emboldened ?animal spirits? sufficiently to set the stage for the NASDAQ/technology parabolic blow-off. Clearly, Credit market speculators are today thoroughly ?emboldened,? and never before has a central bank so explicitly conveyed the convergence of mutual interests they share with the speculating community. Has the Fed set the stage for one final period of parabolic Credit excess? Such a view is appearing more plausible by the week.

But this scenario has set the course for dollar disaster. Here at home, the inflation of dollar financial claims accelerates, underpinned by little in the way of true economic wealth creation (exponential rise in non-productive debt). Endless liquidity is available for the taking, although acute financial fragility only hibernates. Meanwhile, the (non-dollar) world has become the oyster for the energized and emboldened speculator community. The torrent of liquidity, emanating from the deranged U.S. Credit system in the thick of historic parabolic excess, sees growing flows exiting the dollar in an endless pursuit of higher returns. Dollar selling begets dollar asset underperformance that begets dollar selling. And the more liquidity that flows to markets such as gold and basic commodities, or economies such as Brazil and Russia, the better these assets classes appear in comparison to dollar instruments.

And with the Fed?s current ?deflation?-fighting mandate stoking over-liquefied markets, I am convinced that dollar weakness will only exacerbate Credit excess and self-reinforcing dollar devaluation. If our authorities believe that the sinking dollar will settle at some level of ?fair value,? they surely don?t appreciate the dynamics of runaway Credit inflation, consequent currency debasement, and speculative Bubbles. Perhaps Washington actually believes that a weakening dollar is a good thing and that will help us get out of our mess. It?s not and it won't.The DesperateExperiment of Maximum Global Liquidity is playing with nitroglycerin.

Goldilox: Doug believes the "Credit Bubble" is one more incarnation of the Fed backed Bubble Economy of the last decade, and is seriously mirroring the NASDOG Bubble of 1999-2000.

GoldiloxStocks 20-25% Overvalued#1029375/16/03; 19:41:14

SAN FRANCISCO (CBS.MW) -- Bill Gross, chief investment officer of bond powerhouse Pacific Investment Management Co., or Pimco, said Friday that the U.S. stock market is "20 to 25 percent overvalued" at current prices, and also sees frothiness in the euro.

"The United States still has a little remnant of the bubble," Gross said in an interview in San Francisco with He expressed surprise when told that Internet auctioneer EBay (EBAY: news, chart, profile) had flirted with $100 a share. EBay closed at $99.19 on Friday.

But Gross, an influential investor who oversees $345 billion in bonds, added that even with stocks at levels he considers inflated, "that doesn't mean Dow 5000 is imminent."

Gross, manager of $74 billion Pimco Total Return (PTTAX: news, chart, profile), the world's biggest bond mutual fund, said he's bearish on prospects for large corporations with unrecognized pension obligations that "fail to recognize future realities" they must resolve.

"We're bearish on companies with high debt levels, large pension obligations that haven't been recognized, and inappropriate accounting that fails to reflect future obligations," he said, declining to be more specific.

Goldilox: Maybe Bill has not noticed all the activity in restructuring the pensioners out of their retirement benefits? Somewhere between the "Wall St Wipe-out", "Gubmint grab" and the "Corporate cleanout", John Q needs quick dance lessons to the "Screw-me-Shuffle".

21mabryJim Rogers#1029385/16/03; 20:08:10

Jim Rogers is on Jim Puplava tommorrow.I wish the intial investment in Mr. Rogers commodity fund was not so high,I think its a 20,000 minimum to start.Sometimes I get the feeling Mr. Rogers is talking down to those of us of lesser meens,like me.Although he is without denial a very savy investor.21
Cavan ManWAT#1029395/16/03; 20:13:01

The Associated Press
Friday, May 16, 2003; 8:42 PM

RABAT, Morocco - Four explosions tore through the coastal city of Casablanca Friday, leaving at least 20 people dead and many others wounded, Moroccan security officials said

steady golden grams!#1029405/16/03; 22:02:57

im sure if u do the math right gold corp gets there held back gold for free, see tehy value gold at price x to make sure they can meet there numbers, then they sell enough gold to meet the numbers and can retain say 1 or 2 grams per ounce produced for free i think it helps when they price it out in grams. produce x grams and y grams are free, simple stuff, and from there investment arm they create powder to buy in the spot market to support the pog on the charts. get it. simple concept. many mining cos should follow the gold corp money creation/retention business plan. they would be wellserved.
Great Albino BatPoetry ...some things are best expressed by it...#1029415/16/03; 23:01:00

Well, I never imagined my Haiku comments would provoke such responses...if I offended anyone, please forgive this Ancient Albino Bat.

Good work, Leigh and Waverider! Your poetic efforts do give our Forum a unique atmosphere of distinction.

The GAB feels a Haiku coming on...

"Heroic obstinacy of the GAB"

"I hang in my cave,
watch a topsy-turvy world;
batty bat, indeed?"

Passing on to matters of greater substance, I should like to spread some Royal Guano regarding the WGC. This entity is a "front" for Rothschild. So if you buy shares in the gold operation they are launching, you are buying a Rothschild paper. Not for this bat.

The GAB fears any paper scheme related to gold is just more run-of-the-mill guano, and likely to be used against gold, somehow. Get the physical gold and as someone said, in another day and age, "Walk in the footsteps of giants!"

The GAB.

Great Albino BatR Powell - you did nice work on your Haiku#1029425/16/03; 23:06:21

It has a brooding quality of ghastly foreboding. Quite poetic! Rather Gothic.

I am glad you are using chicken entrails and not bat entrails. Anyway, we bats are not birds, so we don't qualify for divination purposes, thankfully.


steadyRussia must ensure full convertibility of the ruble #1029435/16/03; 23:15:19

Russian President Vladimir Putin has assigned the country the task of ensuring full convertibility of the ruble, meaning both "internal and external" convertibility "for current and capital transactions." Russia used to have one of the most solid currencies in the world, the president reminded the Federal Assembly in his State of the Nation address on Friday. "The value of the 'gold ruble' showed what the state was worth," he said.

I'll put it straight: The country needs a ruble that would be tradable on international markets, it needs a solid and reliable bond with the world's economic system," declared the president. He stressed that Russia, a fully fledged member of the group of eight best-developed countries, simply had to achieve this goal.

Once this goal is achieved, the country will really begin to integrate into the world economy, Putin stressed. What will this mean for Russian citizens? "Whenever they travel abroad, they will only need two things, a Russian passport and Russian rubles," he said.

Dollar Billout on that refi limb#1029445/17/03; 08:06:53

"The hillside house Linda Lutz has lived in for 25 years isn't only her home. It's her bank too. The character actress has had little work in recent years, but she has been able to cover her expenses by cashing in on the equity of her house in Encinitas in northern San Diego County. In September, Lutz refinanced for the sixth time in five year, taking out $100,000… ‘Every time I thought we had tapped out, the property value had increased again…’ without refinancing, she said, ‘I would have been out on the street.’"

How many are playing this game?

Old YellerAsia,It's Reserves and the Coming Dollar Crisis#1029455/17/03; 09:37:18

It would appear that Asian countries have a problem,which
is self-inflicted,deeply entrenched and totally lacking in
visibility and accountability.

Old YellerMr Yen's "solution"#1029465/17/03; 09:46:37

Same as it ever was.

Criminal'selling out the savers of the country,they pay
for after effects of a centrally planned credit expansion/
asset bubble.

USAGOLD / Centennial Precious Metals, Inc.A complete gold investment education for $5.95#1029475/17/03; 10:12:23

ABCs of Au by MK

The ABCs of Gold Investing

"If you are looking for thorough guidelines for making good decisions about private gold ownership, The ABCs of Gold Investing has all the answers." --Money World Magazine

Please Remember: It is your purchase from USAGOLD - Centennial Precious Metals that nourishes these pages.

a nation of onegold as money#1029485/17/03; 10:26:27

One reason gold is not used as a money currency is that its value is perceived as
unstable. You can't offer a man a gold ounce for an antique chest, if nobody knows what
the ounce will be worth tomorrow. A merchant needs this surety. He is not in business
to accumulate stores of value, but to sell merchandise, and then buy more and sell
that. He needs a money that is thought of as stable. Dollars work for him right now,
because a dollar is the least unstable currency available to him. In one sense, gold's
value is reliable, but it is not seen to be so, when the number of dollars it takes to
buy it changes widely. And certainly this may be one reason that the price of gold is
under such influence. But provide the merchant with a money that is more stable than
the dollar, and he will use it. Thus the variation in perceived value, which is
characteristic of gold now, negatively influences its liquidity. That is another reason
gold is not used as cash money. One cause of all this may be that -as populations
increase- there is not enough gold to serve effectively as cash for every possible
transaction. In ancient times people met a substantial portion of their obligations by
giving produce and other items of agreed-upon value. Yet although cash could not be
printed, currencies were still nonetheless debased. This was not due to attrition or
erosion of value by unavoidable means, but by men -in positions to do so- intentionally
taking actions which devalued it. This, even though there were no so-called central
banks like the Fed. At one time, in Rome, the people had to pay their taxes in gold,
but the government only made payments in debased coin of a different metal, one which
the people would not use willingly. In Ancient Greece, there was a period of more than
a thousand years, in which there was no change in the value of the coin. No inflation,
no deflation. Of course they also did not have a central bank like the Fed. Just a
series of intelligent rulers who cared about the people, or, at least, cared about what
the people thought of them as men. They had been brought up to value reason, wisdom,
justice, nobility, and glory, none of which they could achieve without recognizing,
acknowledging, and respecting the legitimate human needs and rights of the free people,
who were like themselves, and who lived in the same city-state where they lived. In
America today children are educated to be tolerant, forgiving, calm, safe, sinless, and
submissive to authority, which, in reality, is merely other people. Cash money runs
into problems when men rise to power who are more interested in conquest and are
unconscionable in augmenting their own subjective well-being at the expense of less
powerful private individuals in the public at large. In America now, there is no stable
money currency. There is only gold, which is perceived as too problematic to work
freely as cash, and the dollar, of whose lack of real value the public are kept largely
ignorant. So we have a nation whose economy is based on monied activities transacted in
a currency inherently of no value, while that which does have value is not recognized.
It should be no wonder, then, that things are awry. My own personal understanding of
this is that one important underlying cause is the desire of some individuals to wrest
wealth from others by means of manipulation and lying, and that this is sociopathic.
Birds do this. But birds have no society. They do not sing in organized choirs,
standing all in robes, each reading his own notes, and it comes out sounding like Bach.
Or in scruffy leather jackets sounding like Eminem. In other words our society has a
malady. It is infested with mentalities whose effects are deleterious to its health. It
would be well for all of us if men, and today also women, had as their main goal not
the acquisition of riches and power by whatever means possible, but by the production
of products and services for which there is a real and useful need, together with
ideals and behaviors whose outcomes are non-sociopathic economic growth, including a
thoughtful and well-practiced maturity, and by the delivery of which a society would be
nurtured, whose qualities were more suitable to satisfying the needs and rights of
human beings individually and generally, instead of merely being intended to enrich a
few at the expense of the many.

PizzGovernment Spin and Inflation#1029495/17/03; 10:49:59

Am listening to an extremely good interview over at Financial Sense with Jim Rogers.

They were discussing Rogers' three year trip abroad and his reaction to government inflation numbers and his view that prices were going up much more than the official stats.

Rogers seemed rather please that the liberal press has now started to challenge the government numbers and the war on deflation.

What, IMHO, they both missed is the fact that I believe the press is doing just exactly what the government has in mind to get the current adminsistration reelected and to get the economy rolling up.

As Greeenspan, et al, banter deflation they are systematically laying a base for more and more money creation and the justification for extreme measures in keeping long rates down. We are now starting to see reports that a new housing refi round will be starting in about another half point drop. We are also hearing rumors of another fed short term rate drop.

If there is any doubt in anyone's mind that the FED has not started buying longer term bonds in mass, I'd wash that thought out of existance. The PTB are instructing the press to move on the inflation numbers for the sole purpose of putting enough fear into the consumer of rising prices so they will be more than willing to take this, more than likely LAST, round of refi money and use it for purchases. The deflation ruse is giving them eought time to run the presses day and night and will be the cop out when the INFLATION gets out of hand. Retired on a fixed fiat income??? That totally teed off group of voters won't have it figured out until the 2008 elections.

Combine this with the precipitous drop in the dollar (which we have seen little or no supporting intervention) that will confirm the press's inflation reporting as import prices rise, and you have a ready made prescription for enough "rebound" over the next year to be politically acceptable to the sitting administration.

Greeenspan's reappointment? Got to keep the (fiat) fires burning. . .

No doubt in my mind as to what's coming, and the desperate planners better hope the wind doesn't change when you light a backfire in dry timber, cause you can end up roasting yor own posterior.

We are still in a finacial world wide war, so if you throw a little terrorist activity into the mix, which seems to be picking up a bit, gee, need any more reasons to buy gold????


TownCrierAt G-7 gathering FinMins do what they can -- muddle through in absence of CenBankers#1029505/17/03; 11:07:19

DEAUVILLE, France, May 17 (Reuters) - The Group of Seven finance ministers meeting on Saturday held no major discussion of the current dollar/yen exchange, U.S. Treasury Secretary John Snow told reporters after the meeting.

Snow's comments tallied with the absence of any mention of currency markets in the final G7 statement after the meeting.

-----(see url for article)

Respectfully, this group of the world's most powerful "tax collectors and bean counters" hang their window dressing on an opening that offers a very narrow view of the world.


(For what it is worth, following is the "substance" (not) of the economic statement issued at the conclusion of the two-day meeting.)

"We met today ahead of the Evian summit. While major downside risks have receded, our economies continue to face many challenges. We are nonetheless confident in the potential for stronger growth. Our task is to realise this potential. We will therefore continue to cooperate to achieve higher growth in all of our economies, while ensuring domestic and external sustainability, and thereby to contribute to global economic growth. We are strengthening our commitments to structural reforms and sound macroeconomic policies.

"As we face a common challenge of ageing, our contribution to higher worldwide growth should rely more strongly on a good system of education and life-long learning, research and development, innovation and entrepreneurship, on the foundation of a sustainable fiscal and monetary framework. Europe will continue to foster innovation and to accelerate labour, product and capital market reforms so as to achieve a more flexible economy. The U.S. will act to create jobs and to encourage savings and investment by the private sector. Japan will continue its structural reforms, including in its financial and corporate sectors, and intensify its efforts to combat deflation. Canada will maintain monetary prudence and fiscal balance, while investing in productivity. Russia, which has greatly improved its performance, will pursue structural reforms, in particular in the financial sector."

Fun times in Deauville and seemingly little else, let me tell you...

Cavan ManUSA Macroeconomic Forecast#1029515/17/03; 13:08:35

Check the link for wisdom from a guy who's, "been to the rodeo once or twice before".
Cavan ManNo surpirse here eh?#1029525/17/03; 14:34:58

Where are the WMD?

US Wants Iraq To Quit Opec

Washington, May 17: A top American official has said Iraq may best be served by exporting as much oil as it can and "disregarding" quotas set by the Organisation of Petroleum Exporting Countries.

"Iraq has had an irregular participation in the Opec quota systems. They have from time to time, because of compelling national interest, elected to opt out of the quota system and pursue their own path. They may elect to do the same thing," US executive to advise Iraq's ministry of oil, Philip J Carroll, said.

The Saddam government had an official policy of steering contracts for drilling services, joint production and machinery to companies based in France, Russia and China, whose governments tended to be more supportive of Iraq in the UN Security Council.

Though Carroll did not single out any potentially imperilled contracts, he said the old system of preferential treatment ended with the demise of the Hussein regime.

Great Albino BatGuano from the GAB, FWIW.#1029535/17/03; 15:07:10

Extract from a letter to an art dealer based in Paris, who just sold a very expensive painting in N.Y.C.:

"…as I explained during your visit, I calculate costs in a peculiar manner, which is totally foreign to New Yorkers, who believe blindly in their overvalued dollar, and who think they will continue to be masters of the universe indefinitely.

"I calculate costs in terms of ounces of gold, at present ridiculously undervalued at $354.00 US/troy ounce. That means that one million dollars will purchase 88 kilograms of pure gold, or 2,825 troy ounces. This is quite an enormous amount of gold, and represents a value against which even your precious antiques, are extremely overvalued. New Yorkers, fortunately for you, are blind to all this!

"When gold reaches $2,500/oz – which will happen, without any doubt – then a "million dollar painting" will cost 400 ounces of gold. A much more reasonable price...."

Liberty HeadInflation, Deflation#1029545/17/03; 15:15:11

Thanks for the Jim Rogers post. He is someone who is well worth listening to. How many folks would dare walk some of the miles in his shoes? Listening to what he has to say, is the next best thing. The time to get out of dollars and into something else, like gold :-)for instance, is upon us.

Like everyone else, I see both Inflation and Deflation.
Inflation is most apparent in things like food, clothing and shelter. Deflation is most apparent in less urgent items like new cars and collectables. Priorities are a changin. More folks are borrowing against or selling things they love for the sake of hanging on to the things they need.
I think deflation may very well showup in the housing markets as unemployment continues higher. I see no economic recovery for the U.S.A. until the masses understand government lying and spending is at the root of our economic delema.
That sure seems a long way off. I doubt, I will live to see it, hopefully my progeny will. As most here must know, it's not easy being an outlier, but the man in the mirror won't have it any other way.

Illegitimi Non Carborundum
Cheers to All

CoBra(too)G8 - Meeting in Deauville#1029555/17/03; 15:30:40

- The G8 Finance Ministers see no inflation, nor deflation and left interest rate policy to their countries economic needs.

No word about about currencies - at least not openly , nor officially - which may be left to the system's need?

Probably, they're awaiting word from the Bilderberg meeting in Versailles, as presumably most of their bosses have attended the real "power lunches".

... Less comically, or rather disturbing, it does seem the global economy is on the brink of collapse ans so is the monetary system - while Gold yawns and awaits its day in the sun (or is to the moon?)...unruffled as ever by the shenanigans of day to day wonders of spin and bubbles.

Have a great weekend - cb2

Belgian@ Old Yeller @ GAB#1029565/17/03; 16:04:48

OY : The coming dollar crisis...already exists !
It is NOT the dollar(currency) but the *dollar System* that is perpetuating/aggravating the crisis ! I can't think but about one solution : A FREE PHYSICAL GOLD ONLY market !
One's ultimate reserves, to be defined as "WEALTH" should be stored/safeguarded as Physical Gold in Possession.
The most natural and evident reflex for as long as Gold exists. GOLD WAS AND WILL AGAIN, BECOME THE PUREST EXPRESSION OF GENUINE WEALTH ! From Paris over Moskou to any other palace in the East.
Great article Yeller, Thanks. Do you recommend us reading the book ?

GAB : Iraq out of OPEC : Breaking the power or having increased control on OPEC is the main underlying reason for the present geopolitical events. Note also that this is not only taking place in the Middle East but also in Africa under a much lower profile, though.
Flood the global economy with a secured flow of cheap oil !
That's what it is all about ! Any pretext to reach this goal is OK and will be adapted to circumstances and changing (different) interests of the altering coalition blocks.

The "right" of cheap oil belongs to the global economy and it is around this controversial and unspoken fundamental that the Anglo American central block is profiling itself with willing coalition partners. The free and unrestricted availability of cheap oil flows is a conditio sine qua non for further global economic development/expansion. Whatever the collateral damage (human suffering) might be of such a conditio. Cheap oil availability is a priority of a higher rangorder.

This cannot be presented to the general public, as such, for reasons of fear, doubts, panic and more radical controverse (division).

Why do they hate us...?

The Invisible HandThis guy wants the real thing#1029575/17/03; 18:19:32

Snow's description of a "strong" dollar on Saturday also revealed that a high exchange rate with the world's other major currencies was not necessarily part of his view.
Asked what he meant by "strong" in Washington's long-running policy, Snow said: "What you want to be strong is (that) you want people to have confidence in your currency, you want them to see a currency as a good medium of exchange."
"You want the currency to be a good store of value. You want it to be something people are willing to hold. You want it to be hard to counterfeit...those are the qualities," he added.
Pressed to say whether he considered the value of the dollar to be among the qualities that he used to define a strong currency, Snow said, "That reflects the fundamentals of the demand and supply for currencies."
Choose your colour - pink or yellow!

WaveriderHartman: Friday's Market Wrap Up#10295805/17/03; 18:49:32

Gandalf - Hartman has included graphs of the US$ Index and POG (albeit different time frames) in yesterday's market report (as per your request yesterday).


Dollar BillThanks for the link Ole Yeller#10295905/17/03; 18:49:40

Once the Asian central banks have acquired dollars, they must either convert them into some other foreign currency or else invest those dollars in an interest bearing dollar-denominated asset in order to earn a return on those funds.

They must decide between holding those dollars in dollar-denominated investments that will generate a return, converting the dollars into some other currency, or else buying some other store of value such as gold.

Their options are fewer than they at first appear however. That is because the amounts involved are so large.

For example, China and Japan each enjoyed a trade surplus of more than $100 billion with the United States last year. That is in addition to the hundreds of billions of dollar-denominated reserves assets they had accumulated in prior years.

Any attempt to convert even a small portion of that into gold would drive the price of gold wildly higher. Similarly, any strategy that attempted to convert a significant portion of those dollar holdings into Euros would cause a very sharp spike in that currency that the European Central Bank and other European policy makers would view as most unwelcome because of the negative impact it would have on Europe's exports.

It is quite probable that politicians and central bankers in Europe would call their counterparts in Asia and politely ask them to stop driving up the Euro. Or, imagine the response in Tokyo if China began converting its dollar hoard into Yen. Diplomatically, it would be unacceptable and, for that reason, it is not an option.

The fact of the matter is that Asia's dollar reserve holdings, both stock and flow, are so large that they only place they can be accommodated is in US Dollar-denominated assets such as Treasury Bonds; agency debt, such as Fannie Mae and Freddie Mac; corporate debt; equities; or bank deposits.

That is why it has been so easy for the United States to finance its enormous current account deficit. There is really nowhere else for that much money to go.

In other words, the US financial account surplus is actually merely a function of the US current account deficit. The surplus countries can't afford to convert those dollars into their own currencies because of the harm that would do to their exports, and other countries do not want the dollars converted into their currencies for the same reason.

Therefore, the dollar could be described as a boomerang currency. First it goes abroad as the export earnings of non-US exporters. Then foreign central banks send it back to be invested in US dollar-denominated assets because there is really no place else to put it.

It is ironic that not only has the US current account deficit fueled bubble economies in all the major surplus countries, it has also helped create the current economic bubble in the United States as the dollar export earnings of surplus nations come back into the US.

The investments by the surplus countries into US stocks, corporate bonds, and US agency debt have helped fuel the US stock market bubble, facilitated the extraordinary misallocation of corporate capital, and helped inflate the current US property bubble.

This year, the US current account deficit will be $500 to $600 billion. That means the surplus nations will have to find places to invest that sum of dollars in dollar-denominated assets. This is an annual task that is becoming increasingly difficult.

Which sector or sectors of the US economy can afford to issue and service $500 to $600 billion in additional debt - not only this year, but every year into the future so long as the United States continues to run such large current account deficits? The consumer sector has never been more indebted and corporations are going bankrupt in record numbers.

Neither the consumer sector nor the business sector can afford to take on any more debt. That leaves only the government sector.

Strangely, it is rather fortuitous - at least from the point of view of Asian central banks - that the United States gove