USAGOLD Gold Discussion Forum Archive

Electronic reproduction sourced from
Topaz...on the Dinar, Dirham.#10389606/01/03; 02:18:53

The Islamic non-Ursurous System is creating some interest hereabouts today (HA!)
As the mechanisms mature and bearing in mind OPEC once considered a straight-out Oil/Gold deal, (Another)...would it not be more prudent to secure your Gold and silver in the "traditional" form from our Host...and settle back to watch developments?
The Iraqi Adventure has surely miffed a lot of Oil and..who knows, an Oil/Dinar deal may be only days/weeks away.

silvercollectorFrom the link that Goldilox just provided#10389706/01/03; 05:42:37

I can't believe I didn't see this anywhere!

"The four G-8 countries that opposed the war made a major move last week to get back into good standing with Bush by supporting the U.N. Security Council resolution that gives the United States and Britain a mandate to use Iraq's oil revenues to rebuild Iraq with only minimum input from the United Nations."

Let's see now, France, Germany, Russia and China, the 4 thorns in the backside of the US, have backpeddled in the UN and allowed the US to dictate where Iraq's oil revenues are spent. Say what? Pardon me?

Headline news reports that the 4 bonehead nations are climbing up and down the the back of Bush and Blair regarding the whereabouts of WMD but in the case of oil revenue, oh yeah, don't worry about it, spend it as you see fit???? What the H?

This is indeed HUGE news. The implications of this are MASSIVE, are they not? "minimum input" from the UN, is this not unbelievable?

Anyone with thoughts, opinions, news, links?


BoilermakerSilvercollector msg 103880#10389806/01/03; 05:43:34

Your question re my meaning of "ultimate release of the dollar" and "policy reversal".
It appears the $US is in a controlled descent pattern with ongoing efforts to prevent a nosedive. Efforts such as the capping of gold, public pronouncements of 3% growth in the 2nd half, economic stimulus via tax cuts and foreclosure of Iran's experiment with Euro for oil are needed and being applied to support the dollar and no doubt to support Bush's reelection next year. Ultimate release of the dollar is when the the Administration and the Fed capitulate in their controlled descent efforts. This is unlikely to occur before the election unless the dollar crashes from outside pressure. Ultimate release is when we wake up one morning and read about the new money system that is in place.
My meaning of policy reversal is that point when the Admin sees the hopelessness of continued dollar support and starts the planning and execution of a new money system.
Of course the planning will be done covertly and has probably already begun. No doubt there will be subtle signs that this process is in the works.

masSilvercollector#10389906/01/03; 06:02:10

Reference your concern, make them feel comfortable while you stab them from the back without notice.
You don't think they would have done what they did without further thought? They control the new currency don't they?
The dollar has lived it's life, let's move on......before it destroy's everyone and everything!
Got gold?

Boilermakercorrection to msg 103898#10390006/01/03; 06:10:48

"foreclosure of Iran's experiment with Euro for oil"
should read
"foreclosure of Iraq's experiment with Euro for oil"

Now off to church for some soul searching.


TateRegarding : planning and execution of a new money system.#10390106/01/03; 07:55:32

Boilermaker (06/01/03; 05:43:34MT - msg#: 103898)
Regarding : planning and execution of a new money system.
Indeed it may be in motion and Au with big swings in price does not behave as it did year ago.
Such event would eventually be impossible to hide from insiders like Robert Rubin and his CityBank They would be quick to make long gold positions. Just as they did play UD$/Euro markets ahead of government intervention a year or so ago on insiders tip. Any upcoming money system change will be revealed in gold price no matter what suppression. Remember these insiders are rich people. More rich you are greedier actions you take. Friday spike in Kinross, Goldcorp, Glamis and other un-hedged gold producers was amazing.
It is getting harder to hold USA Inc. share price $ from falling.

The Invisible HandWHY does the Evian website say abandonment of gold standard created monetary disorder? WHY, WHY, WHY?#10390206/01/03; 08:09:29

What is the G7 Finance Ministers' Meeting?
The meetings of finance ministers in the 1970s to some extent gave rise to the summits of the Heads of State and Government of the leading industrialised countries. On 25 March 1973, George Shultz, US Treasury Secretary at the time, invited the British, French and German finance ministers to an informal discussion in Washington . The four men discussed the_ international monetary disorder_ (emphasis: The Invisible Hand's) created by the American decision to drop the gold standard. They subsequently decided to continue their discussions and invite their Japanese counterpart to join them. In the months that followed, the five held meeting after meeting. The press started using the expression the "group of five" or "G5". Valéry Giscard d'Estaing took part in this first meeting as finance minister. When it became his turn to chair, he suggested that this type of meeting be held by the Heads of State and Government. This gave rise to the "G5 + 1" meeting in Rambouillet (to which Italy was also invited). The G5 expanded to become the G7 Finance Ministers' Meeting with the participation of Canada and Italy . Today, the finance ministers of the G7 countries, assisted by their central bank governors, generally meet three times a year, including twice alongside the IMF and World Bank spring and autumn meetings. They take stock of the development of the global economy and co-ordinate over current major financial problems. The Russian Federation is gradually being incorporated into these meetings.

This from 1999:
13. We recognize that these changes will entail significant costs, in particular arising from debt owed to the IFIs. We are prepared to support a number of mechanisms to meet these costs recognizing the importance of maintaining an adequate concessional lending capacity by the IFIs:
- To meet the IMF's costs, the Fund should mobilize its resources, while maintaining an appropriate level of reserves, through the use of premium interest income, the possible use of reflows from the special contingency account or equivalent financing, and the use of interest on the proceeds of a limited and cautiously phased sale of up to 10 million ounces of the IMF's gold reserves.
- The Multilateral Development Banks (MDBs) should build on the work they have begun to identify and exploit innovative approaches which maximize the use of their own resources.
- The costs to the IFIs will also require bilateral contributions. We have pledged substantial contributions to the existing HIPC Trust Fund. We will consider in good faith contributions to an expanded HIPC Trust Fund.
- In meeting the costs, we call for appropriate burden sharing among donors taking into account all relevant aspects, including the magnitude and quality of ODA already extended and past ODA forgiveness, and recognizing the contributions of countries with high ODA loans outstanding relative to GDP.

CaradocGovernment you can trust (wouldn't it be refreshing?)#10390306/01/03; 08:53:39

"The power of collecting and disbursing money at pleasure is the most dangerous power that can be entrusted to man, particularly under our system of collecting revenue…."
"Public Monies and Private Supplications" by Davy Crockett

"Public monies should be touched only with the utmost
conscientiousness of honor…."
"Common Sense" by Thomas Paine


Compare the two quotations above to Nixon's plea that people stop taking silver quarters out of circulation because "they're only worth a quarter" and because people were "only causing problems" in being able to distribute enough of the new quarters.


Caradoclink to Congressman Colonel Davy Crockett#10390406/01/03; 08:58:57

Sorry; meant to include link in previous post.


Goldendome@ Invisible Hand-- Your #103902--Why, Why?#10390506/01/03; 11:15:00

I would say abandonment of the gold Standard led to monetary disorder because it eliminated the possible redemption of fiat currencies in Gold from the country of origin. With the later elimiination of Gold convertability from the Bretton Woods agreement, the world has since been on "The Dollar Standard" which has led to the massive build-up of dollar reserves 'round the world and the inflation in foreign currencies. I don't want to ramble, so I'll finish with this: Elimination of the Gold Standard, was like cutting loose the anchor that helped to hold back the movement toward "created from nothing money."
We've been on a random and disorderly path ever since.----Gdome

BelgianGOLD#10390606/01/03; 12:16:22

@ TIH : Greenspan/R.Paul : The goldstandard was mentioned again. Span even answered that countries who wish to back their currency with Gold, can do so within IMF regulations.
The shocking effect of the 44 Trillion Debt, treasury-report, makes people a bit nervous.

Mentionning the old goldstandard is saying as much as...OK...ok, I know...the dollar-reserve is toasting, but leave me alone, will you.

@ Mas : I agree with your *short* answer to silvercollector. Euroland undere the present (de facto) French impulses, moves very slowly. Good or bad habbit ?

If and when the dollar-implosion, causes the destructive hyper-price-inflation, compensating for the past 7 decades of mis-management...ALL oil-trade will be settled in euro !
Whoever might have the control of what oil !

The next 50 years are about the unwinding of the dollar-reserve and the euro, embracing Gold, as the only alternative. This process on the rails can be delayed/upspeeded, but NOT stopped ! It is the dollar-system that causes all misery and at a certain point, the euro-gold-alternative will take over for the better or the worse.

All official references made to the old goldstandard are part of the circumstantial evidence that deep dollar-doubt has been installed. FOA was here, to explain us, what the role of the euro and Gold do play into this final dollar-demise.

Whilst the USUK, reconstruct (dollarize) Iraq and free (hum) its oil-reserves...the dollar must face growing euro-symphaty. Americanization (à la Kuwait) of the whole ME-region will NOT run according to the dollar's plans. The China-Factor !!!

*Adieu*, oh mighty dollar !

misetichBush, Chirac Smile for Cameras at Tense G8 Summit #10390806/01/03; 13:33:25


Bush got a short handshake and stiff smile from his loudest critic on arrival in Evian, the French spa on Lake Geneva hosting this year's summit of leading industrial democracies. Chirac gave other leaders a much warmer welcome.
On the summit's sidelines, a senior U.S. official issued a veiled warning to Paris not to try to rally Europeans against Washington again, while Colonna stressed France sought a "multipolar world" with a key role for the United Nations.

Colonna did not rule out a summit discussion about the U.S. dollar's recent sharp decline, an issue G8 leaders have been trying to play down, and said the meeting should send the world "a message of confidence on economic growth." Out beyond several heavily-guarded security rings, anarchists and anti-capitalists rampaged through towns in France and neighboring Switzerland smashing shops and blocking roads to protest against the rich men's club they say rules the world.

Bush's next moves could prove divisive. He has paved his way to Evian with proposals to track illegal shipments of weapons of mass destruction, pressure Iran and North Korea to curb nuclear programs and encourage Europeans to give up their opposition to genetically modified food.

Washington accuses Iran and North Korea of clandestinely developing atomic weapons. Bush and Putin discussed Tehran's nuclear program in St Petersburg but Russia says it will continue building a nuclear power plant in Iran.

Colonna said France thought Bush's plan for a global pact to seize illegal shipments of weapons was worth studying, but asked who would do this and under what legal authority.

The "spin" keeps on portraying as - France - is the only one opposing the US, UK vision of a polar world - whilst it is the majority of world opinion the US is fighting

Interesting comments by France's Colonna on a summit to discuss the depreciating US $

All On Board The Gold Bull Express

misetichDollar Fall Barges Way Into G8 Summit #10390906/01/03; 13:45:28


EVIAN, France (Reuters) - The dollar's tumble on the currency markets forced its way onto the agenda at a G8 summit in France on Sunday when leaders said that exchange rates would be discussed the following day.
With stagnation or worse threatening some of the Group of Eight economies such as Germany, Japan and Italy, Italian Prime Minister Silvio Berlusconi acknowledged that currencies would be discussed during Monday morning talks on economic prospects.

"We will be busy with that tomorrow," Berlusconi said when asked by reporters about the dollar, which has fallen to record lows versus the euro in recent days, raising fears that exports from the 12-nation euro zone will lose in price competitivity.

Berlusconi also referred to the possibility of a cut in interest rates, comments reflecting mounting belief that the European Central Bank could or should cut rates soon, a move that could tame the euro's surge versus the dollar. "A decision to cut rates might be in the air," he said.
But tomorrow we will talk about the global economy in which there will be (discussion) about recovery, unemployment, currencies, all aspects of the concerns we have today."

Officials from many countries said prior to the meeting in Evian that worries about the dollar level or at least the speed of its slide against the euro, would not be an issue at the G8 meeting, where central bankers and finance ministers are absent.

President Bush said in media interviews ahead of the summit, however, that Washington continued to back a strong dollar even if financial markets seemed to be putting a value on the currency which went against the grain of that policy.

Interesting -

All On Board The Gold Bull Express

misetichUS loses its allure for global investors#10391006/01/03; 14:07:28


For years, the US has been viewed as the most attractive region for global investors, but that distinction may be fading as concerns about the economic outlook, weak dollar and corporate governance issues damp the allure of US assets overseas.

A rush to the exit doors by overseas investors would be a huge blow to Wall Street and the fragile US economy. That's because overseas investors own about 45 per cent of all US government bonds, 35 per cent of corporate bonds and 12 per cent of equity holdings.

Jes Black, a currency strategist at MG Financial Group, said: "This is a tremendous cause for concern." He noted that while US equities have suffered from declining outflows, corporate bonds are also becoming vulnerable. Bonds saw a drop in annual investment for the first time in over a decade last year and the trend could continue if the dollar remains in its slump.

Clark Winter, global investment strategist at Citigroup Private Bank, said overseas investors are finding alternatives to the US, which has long been viewed as the region to "park" money. While the strengthening euro is attracting funds that may have otherwise gone to the dollar, there's also renewed interest in homeland repatriation.

Mr Winter said Brazil and Russia are two countries that are currently seeing a surge in repatriation of money. "For a variety of reasons, citizens of these countries took money out from their homelands and put them in [US assets] but now flight to quality often means a dramatic move to local [assets]."

The US $ used to be a safe haven - with dwindling returns and wipe out of trillions of equity values and the massive fraudlenty activities by brokers, investment bankers the US $ is no safe haven

Panic in the air

All On Board The Gold Bull Express

CometoseTim Wood / Dow Theory /ta#10391206/01/03; 14:26:44

Tim Wood for the month of June has discussed

two non confirmations between the DJI and THE DOW JONES transport average in the Two different sets of cycles...
SEASONAL AND Weekly , I believe... For that to correct
the DOW Industrials has to reach and exceed 9044...

We are in the middle of 22 week cycle which is into it's 11 the week and the one of his primary ocsillators is now turning down.....he says to watch for the index to follow...

He made an interesting comparison between the 1906/07 bear market confirmation that occured and subsequent sell off as to todays present market....
There is another interesting corrollary that he discovered between the two markets .....which he discovered by accident as he was directed to read some Prechter this week... He said he found it in the May newslwtter...
SUN SPOT ACTIVITY for 7 months prior to the 1907 fall off was less than 100 in 7 months ..(that is low; such activity in a bear market has been known to be traumatic in a negative sense) Prechter's assistant's reading for Sunspot activity concluded in April and the activity reported was in the same parameters as in 1906.....

THESE are very interesting facts that are substantiated by DATA.....I'm developing avery high respect level for people that love math and apply it to data....THIS In combination with the MEDIUM of the INTERNET .... makes the study of these sources mandatory..

He looks for gold to bottom in Aug and then for us to see new highs in SEPT....

HE says bonds are due to turn soon / new bottom in July August .

CometoseTim Woods #10391306/01/03; 14:31:35

cycle's work may be found at the above link...

Forgive the repeater post below

CoBra(too)From today (June 1st.) on -#10391406/01/03; 17:29:55

Every Chinese can trade and possess Gold bullion. Even if only a few may catch on at first ... there are always a "few more" out there to take up any slack!

... "Mean"-time GWB is scurrying from Krakow to St. Petersburg, from Evian - leaving before any tough questionaire regarding the Snow job on the reserve currency could unnerve diplomatists - to Cairo, from Eilat to other ME destinations and of course Kuwait ...

... As the international press is trying to cover and interpret every so slight facial expression, handshake or any body lingo of the president - while meeting friend and supposed foe with the surrogate arrogance of raw - though, past economic - power.

Patriots R'US? Other countries also love their Patria - even Zimbabweans, where oppression is rampant - though, who likes foreign interference on pretense of still missing WMD reasons?

cb-toeing along ...and having a great time in accumulation of gold on the cheap - aided by the € - may it last a li'l longer ...

USAGOLD / Centennial Precious Metals, Inc.A golden education in 175 pages for $5.95#10391506/01/03; 17:49:26

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

misetichStates Use Gimmicks To Tackle Deficits #10391606/01/03; 17:52:42


What's a governor to do when he raises corporate taxes by $1 billion, proposes $3 billion in spending cuts, taps his state's entire tobacco settlement and drains every state fund with a positive balance -- and still comes up $300 million short of a constitutionally required balanced budget?

The way New Jersey Gov. James E. McGreevey (D) got over -- or, actually, around -- this very hurdle sums up the precarious condition of budgets now being crafted in almost every state capital.
in Year Three of the worst fiscal crisis in a half-century, states are postponing -- and possibly exacerbating -- the day of reckoning through creative accounting.
Using financial sleight of hand, McGreevey shifted a June payment to school districts into the next fiscal year, which begins July 1, creating a paper windfall of almost $300 million in 2003. Presto! -- a balanced budget. But also a teetering one.
The proliferation of accounting gimmicks in almost every state budget has raised concerns in finance, health care, education, mental health, public safety and anti-poverty efforts -- every endeavor that relies on state government
"I compare it to Enron, because Enron's accounting, by and large, didn't violate generally accepted accounting principles. It was just extremely aggressive," he said. "That's what the states are doing. They're pushing the envelope. These gimmicks are basically off-the-balance-sheet debt. It's what Enron had."

Creative accounting - threading water - for how long can the shell game go on - It may work during prosperous economic times - but is a recipe for disaster during tough economic times - and unless the infamous US economic recovery shows up soon - this has the making of a real ugly mess

All On Board The Gold Bull Express

silvercollectorThe rubber meets the road...#10391706/01/03; 19:08:10

"Berlusconi also referred to the possibility of a cut in interest rates, comments reflecting mounting belief that the European Central Bank could or should cut rates soon, a move that could tame the euro's surge versus the dollar. "A decision to cut rates might be in the air," he said."

The dollar is up tonight, gold down considerably. Looks like the ECB is going to cave. I haven't checked the details from the Iraqi oil caving but it seems to me the planet it 'cow-towing' to Bush and the dollar machine.

Don't like it but unfortunately it might still be necessary to live with it.

Global deflation for a while trying to get global reflation re-inacted.

silvercollectorUN Resolution 1483#10391806/01/03; 19:48:10

Paragraph 11 pertains to WMD

Paragraph 16 pertains to "oil-for-food"

Paragraph 20 (ref.12) pertains to sale of oil & gas.

Paragraph 22 pertains to liabilities (contracts?) to oil & gas

silvercollectorWhoops, link attached for UN Resolution 1483#10391906/01/03; 19:51:35

BulldogPrice of oil#10392006/01/03; 19:52:10

Now that U.S. & Britain control the second largest oil reserves by occupying Iraq, once the infrastructure is developed, they should produce at least ten times the amount of oil produced under Saddam. If so, would Iraq still be part of OPEC or would GWB use Iraq to break the cartel? Why can't oil then go to $10/bbl? I suspect a partial answer is that all sides have an interest in keeping oil above $20/bbl. If oil does decrease in price, do we expect gold to follow it down?
silvercollector"What's happening in Iraq" (UN's perspective)#10392106/01/03; 19:53:27

Related news stories

Security Council seeks to bring peace and development to Africa - 30 May
Iraq: UN to host reconstruction meeting at New York Headquarters in June - 30 May

Upcoming G-8 summit should tackle, not debate, anti-poverty goals – UN official - 29 May

Iraq: UN food programme gears up for restarting distribution system - 29 May

Islamic Conference has key role in ensuring peace, fighting terrorism - Annan - 28 May

Old YellerThe New Asian Dollar#10392206/01/03; 20:05:10

Interesting developments afoot.This would give Asian
CB's another choice in currency reserves.

misetichPresident spells out fears over dollar's slide #10392306/01/03; 20:24:34,11268,968621,00.html


President George Bush sought yesterday to halt the dollar's rapid decline on the foreign exchanges as the annual gathering of eight of the world's leading industrial nations prepared to discuss the fragile state of the global economy.

After two weeks in which the US currency has been shunned by investors convinced that the US was happy to see the dollar fall, Mr Bush said the recent weakening ran counter to his administration's strong dollar policy.

"Our policy is aimed at a strengthening of the dollar. It's true that the value of the dollar is falling, which is against our policy," Mr Bush said in an interview with Russia's Rossiya TV channel.

Mr Bush, backed by Tony Blair, has insisted that this morning's session of the G8 summit in Evian should focus on the risk that slow growth in the west could trigger a period of deflation.
and Mr Chirac thought a full-scale discussion on the fall in the dollar and the rise in the euro might unsettle the markets.
The European Central Bank is expected to cut rates by half a percentage point to 2% on Thursday, a move which may take some of the pressure off the dollar.

Currencies crisis - How can one protect their portfolio with all this uncertainty?


All On Board The Gold Bull Express

silvercollectorDoes this statement make sense.... (Excellent article by Taylor)#10392406/01/03; 20:38:13

"For the first time in the Post war era, collapsing interest rates didn't help stocks. That meant that bond prices rose while stocks fell…..More than anything else, the decoupling of bonds and stocks was the main signal that deflation had become a serious threat. The last time a major decoupling of bonds and stocks had occurred was during the deflationary 1930s."
MKRandy....#1039256/1/03; 21:13:53

If you're around can you clarify something for me? I'm trying to conceptualize what it would take on the part of ECB to turn the tide of capital going into the euro in terms of lowering its interest rates -- assuming of course that the ECB finds it in Europe's best interest at the moment to attempt stemming the tide, something I'm not totally sure of. But looking for a starting point....

At the ECB site, they list the following interest rates:

Deposit facility.......1.5%

Refi operations......2.5%

Lending facility......3.5%

Which of these most closely approximates the Fed Funds rate (now 1.25% approx.)?

mikal"Gold Haiku"#1039266/1/03; 21:27:32

Thanks to Town Crier (Randy) for suggesting posts of Haiku(the Japanese 5-7-5 syllable "snapshot" of gold). Though it's true that the dollar is only one of a great many influences on POG, it's changing perception and transient forms, this little poem tells how the U.S. dollar index is pointing down for at least a year like a dragon's tail, unless an unexpected push accelerates it's realignment and correction.

Paper printing storm,
Dollars flutter down, up, down.
Who will catch them?

mikalCorrected Haiku #1039276/1/03; 21:38:19

Paper printing storm,
Dollars flutter down, up, down.
Who would've caught them?

WaveriderECB May Reduce Rate to 2 Percent on Thursday, Economists Say #1039286/1/03; 22:29:23

"The European Central Bank may reduce its benchmark interest rate for the third time in seven months this week as the economy stagnates and the euro's advance slows inflation, economists said. The ECB may cut its rate by half a percentage point to 2 percent when policy makers meet in Frankfurt on Thursday, according to a majority of the 32 economists surveyed by Bloomberg News. The Bank of England may keep its rate at 3.75 percent, a separate survey of 38 economists showed."

Waverider: Sir MK - it looks like a half percentage point drop is anticipated.

goldquestBernanke#1039296/1/03; 22:43:23

did such a great job of finding a solution to fix the US economy, that he is now telling the Japanese how to fix theirs!
BelgianDOLLAR_EURO RATE#1039306/2/03; 01:40:42

He (GWB) is talking him ($) up...and see...all your financial papers (Dow futures) inflare, folks. What a marvellous orchestra-orchestration !

Long live the US trade-deficit. The dollar-country that produces AND CONSUMES, 1/4 of global importing more real goods and services, produced by others.
"THE" main reason for having printed more dollar-confetti as to avoid the dollar exchange rate to collapse. A deadly cycle (trap) indeed ! IR differences between $ and € want matter anymore, sometime soon.

Official strategy (GWB-G8), policy (Snow/Bernanke/Greenspan), and thrust (markets) is changed to maintain the dollar-system's function with less to no regard to long term economic (not financial) results !

Maintain financial asset values...ignore the economical structural profitability !

There is NO room for a FED-induced business slow down !
The orchestration of the financials are evidence for the gravity of the global situation.

In the mean time, US's internal manufacturing sector keeps on weakening. What if China and Japan do integrate (merge) -Henry C K Liu ?

All those efforts to maintain the dollar-reserve-system, keeps the US shielded from true price inflation !

We watch with understanding, do we ?

BelgianInterest Rates.....#1039316/2/03; 02:57:15

The US wants (insists) Euroland to lower its IRs with 1/4% to 1/2% . Needless to repeat that almost zero IRs change nothing on the structural "illiquidity" in wich global economy has landed ! More price-deflation is the RESULT (not the cause-!!!) of the coagulating economies.

Even good old Keynes postulated that once the IR falls below 2%...its effect on monetary expansion (!!!) might be pushing on a string !

Zero IR rates are doing much more harm to the coagulating economies. More so in Euroland than elsewhere. Zero rates are affecting the 60% consumer part of the economies. Income from savings has dramatically declined. Big savers are also big consumers. They are supposed to keep on consuming when prices decline.

Economists are trapped in their "growth-obsession" and the financial hullabaloo is pulling the wool over their faces.
Consumers are not stupid and follow their intuitive economic reflexes. Zero IRs makes them more suspicious.

Organized Financial *stunts* will NOT, sufficiantly, revive any (GLOBALIZED) (DEBT PROPELLED) economy (of scale) . Coagulation (thrombosis) as the opposite of liquidy (fluidness)!!! We cannot afford this anymore, thanks to the enormous build up of Bad Debts. High degree of more debt possible to create more economic activity. Producers and consumers will go increasingly out of sync. Up until price inflation comes up and evolves into hyper-inflation ! Then, many things will dramatically and rapidly *change* ! The present status quo is simply a postponement of many executions.

masBelgian#10393206/02/03; 03:38:33

Clap, clap, clap, bravo meastro....Belgian!
Couldn't have said it any better than that. It's going to be a lot worse than people think the longer these guys, that are supposed to know what they are doing, continue doing what they are doing.
Yeap pushing on a string.... and over the cliff we go....
"Interesting times" GWB- You are either with us or against us! Hear ye hear ye. And when the s... hits the fan can we look your way my man. Cause I'll also want to know the whys, and what for as surely the children of this world will also want to know.
Got Gold! Now!

Black BladeGW- "I support the strong dollar"#10393306/02/03; 05:48:40

Yeah, and I support the Easter Bunny. Who the hell is he kidding? What is there to back up the US dollar? ECB will cut interest rates but so will the Fed. There is a US debt over $44 trillion and soaring deficits as far as the eye can see with no end in sight. The US economy is in the dumpster with rising unemployment (10+%), declining corporate and now consumer spending, equities prices are rising but still trading at least double historical valuations as earnings decline (at least the "real" earnings), and a domestic energy crisis is bearing down on the US. Now we have a situation of "good cop-bad cop" as Dubya says he favors a "strong dollar" while Treasury Secretary favors a "fair market price" dollar. Gimme a break! There's only one way for this to end and that's with a weaker-much weaker US dollar. Looking across the pond at Evian I see "the emperor wears no clothes". I know that politicians by their very nature are morons (it doesn't matter what political party) but this is unbelievable.

- Black Blade

Think I will go slay some fish for a couple of hours

masBB#10393406/02/03; 05:58:11

GWB = WMD, we have found them! Holsters with two SW tucked in'em. Yeap riden in the sunset there they go, GWB, GSpam, et all others of the elite troops.
Slay them fish BB. Pack some powder 2, cause thats the way they fish around these waters.
Got Gold, chart looks like it's on life support. Funny how when they have meetings like the G8 everything turns to normal.....

masEuro#10393506/02/03; 06:17:00

Do you notice how the sharks ah sorry , forex, guys are now trying to hammer the Euro for profit? I mean give me a break, strong dalla and now trash the euro is the mode operandi. Don't need to work no more just become a currency trader. Gold, whats that for..... can you make money (get it) at it?
I'm sorry they can only see slightly beyond their shoe tips.
Good luck, cause they are making it worse, slooshing all those dallar digites around the world, (where ever the "finger in the dike" requires the most plugging).
Get some values (real money)!
Got Real Gold? No digitized gold at this website.

TopazICU working overtime again.#10393606/02/03; 06:32:05

Tonight it was the Japanese turn to hold the patient down...touched 94.01, Yield curve showing sting in tail...under control as long as Dow performs. 94 upside and 92 downside seems the Box...outside these parameters things look grim.
silvercollectorBlack Blade#10393706/02/03; 06:58:47

You are so cool when you're hot dude!

Looking across the pond at Evian I see several "emperor's with no clothes". Chirac, Schroder, Putin and Bush are all a bunch of "morons". And nice to see the plan is to stabalize the dollar. I guess what Bush really told them was 'they' better get their act together and save the almighty dollar or ALL would be going down the toilet.

One must seriously wonder if Bush deserves the 'arrogant cowboy' (aka moron) label but now the rumor for the 'other 4' is the 'spineless wonders'.



P.S. : Quick off-topic question. I put an offer in on a house that has an oil furnace (urban setting) rather than the usual NG furnace. I thought that this might be a good thing (the oil furnace that is). Thoughts? Comments? Maybe you answer might simply say "My next house given the choice of oil or gas would be XXX"

Thanks amigo, have a golden day.

Belgian@ Bulldog >>> The POO # 103920#10393806/02/03; 06:58:59

USUK is occupying Iraq but at present, still far from controlling 50 years of future oil-flow ! Don't sell the bear's skin before...
Don't remain fixated on the *dollar*-price of oil ! Watch how the dollar evolves and see how the POO corresponds.
A *Contained* dollar-POG, correlates only periodically !

The major "trends" are and will remain in place : A US-dollar in the process of losing its "use" utility...and therefore a constant high dollar-POO. Regardless of the ancient/new OPEC-power. There is only but one problem : the dollar as the world's reserve-currency. The dollar-system !
Everything will become more and more subordinate to this main problem.

This is the main reason why the market for paper-dollar-gold will morfe into a PHYSICAL_EURO_GOLD market. The dollar going out as the oil-currency and replaced by the euro-gold standard.

As long as one keeps believing in the dollar as we have known that reserve-currency for many decades now... all old theories (business as usual) remain in place.

Find a 30 yrs chart of dollar-yen and see what can happen with ones currency. 1985 > 1995 : yen to the dollar from 242 to 79 (66%).

Dollar-paper-gold can be maneuvered down, anytime, with the Bernanke-confetti ! It is for this reason that this old dollar-goldmarket will be no more as soon as its main supporter, the US$, is dying in its function/use as global reserve currency. One DOES NOT sell any valuable tangible (oil-gold) for a dying/retreating dollar-currency.

All depends on how strong your *belief* in dollar-paper, and those who are managing this dollar-paper, still is.
I remain convinced that Arabian oil, in particular, doesn't want the dollar as a "partner" anymore !? See how the US keeps on flirting with Russia. Russia, China and Euroland are drifting away from the dollar ! I don't see what event could change this process.

misetichU.S. Debt In Asia Has Its Costs :#10393906/02/03; 07:06:35,0,7939281.story?coll=ny-business-print


In recent decades, Asian central banks and investors have lent trillions of U.S. dollars to the U.S. government and American corporations to finance everything from federal deficits to mergers and acquisitions. As a result, the Asian countries, which form the wheelhouse of the global economic machine, now have "the problem."

They're fed up with "dollar hegemony" or having to keep high dollar reserves to pay their debts and protect their currencies. Consequently, they're poised to issue "cross-border" debt instruments in their own currencies, essentially putting the rest of the world on notice that they no longer consider the United States as the sole safe haven for storing the considerable fruits of their financial success.

While it may sound innocuous, the possibility of such a move represents nothing less than a "massive hammer poised above the U.S. economy," warns Arun Motianey, the Citigroup Private Bank's director of investment research.

The pressure is on the US $ - Thus far Sir Greenspan & Co have failed to revive th moribund US economy as the bubble deflation is still running its course -

Tax cuts, IR cuts, a War, etc have not done it . The coming months is crucial to the US as its economy requires the promised 3 to 4% annual growth . Look out for the US $ if that doesn't occur - and chances are 70% it will not happen

All On Board The Gold Bull Express

(thanks to cjk(Kitco) (U.S. Debt In Asia Has Its Costs) ID#277212 for the link

Belgian@ silvercollector#10394006/02/03; 07:19:28

*WHY* would non US-partners, help to save the dollar when there is GOLD and another currency (€) !!!??? For the past decades, the world had no choice but to support and accept the dollar as currency AND as a reserve ! The dollar is backed by 25% of the world's GDP burdened with the enormous/gigantic debts AND twin deficits ! Capital AND trade flows can and do change (away from the dollar-block). It is up to the dollar to set its house in order. What exactly are you suggesting/argumenting, when saying : ...ALL go down the toilet ? TIA.
I need ONE good reason for "believing" in the dollar-reserve's survival...and then I sell my precious coins, immediately ! Only one reason ! Smile mate.

Cometose@SIILVERCOLLECTOR/ OIL BURNER FURNACE#10394106/02/03; 07:34:38

I have been informed that you can burn biodiesel in a
oil burning furnace......( where biodiesel is combination of 20% methanol 80% Fry grease concoction) Biodiesel may be much more cost effective as an alternative in the future.

BoilermakerSilvercollector msg 103937 Oil vs NG heat (off-topic)#10394206/02/03; 08:10:14

I've used both fuels over many years. Here's some of my thoughts.

Economics have favored NG in the past but that may change as BB has forecasted. I think it's likely that the energy equivalent prices of oil and gas will tend to equalize after spikes in one or the other. This is because there are many dual fuel users such as industrial and utility boiler operators who can switch or convert with minor modifications. On the other hand oil is easier to import. The US is now importing 60% of its oil and 15-20% of its NG. It would be wise to check the current fuel prices in the locality to see what the differences are.

Another factor in favor of NG is that the newer high efficiency gas furnaces can sqeeze more btu's from the same gas. They are reaching 95% efficiency vs a typical 65-80% for the older style gas furnaces and 65-80% for oil. This is done by condensing the moisture in the combustion gases and using that heat to preheat the incoming combustion air. Replacing and older low efficiency oil or gas furnace probably makes sense.

As for the quality and cleanliness of the heat there isn't much difference if you're looking at forced air systems
in both fuel cases. Oil furnaces tend to require more maintenence because they need a high pressure oil pump and burner tips that require periodic cleaning. Also, there is a little more noise from the turbulent flame in an oil furnace than the laminar flow flame in a gas furnace.

One thing you should also check is if there is an above ground or underground storage tank. If underground be aware that unseen tank leakage could have occured in the past or may in the future. I recommend a soil survey around/under the tank especially if it's been there for 20 years or more.
Hope this helps and pardon the off-topic subject
Good Luck,

Buena Fegreen - span follies are almost over#10394306/02/03; 08:14:37

Bush tells G8 he prefers strong dollar

U.S. President George W. Bush said he was committed to a strong dollar but played down his influence over exchange rates when Group of Eight leaders discussed the currency's recent tumble in France on Monday.............

.........Bush's remarks to other G8 leaders on were also relayed by Italian Prime Minister Silvio Berlusconi and several others. Bush repeated he would prefer a stronger dollar if it were up to him, they said.

"His administration's intention is to have a strong dollar... He did not exclude market fluctuations," Berlusconi said after G8 leaders discussed economic prospects and exchange rates at morning talks in the French spa town of Evian.

A Canadian official told reporters: "As far as the value of the U.S. dollar is concerned, Bush said he was not the one who decides. It is Mr. [Alan] Greenspan." ...........

.........Just what the U.S. strong policy is has never been officially spelled out since it was established in the mid-1990s, but financial markets feed on every word or expression, no matter how cryptic, for signals on when to buy and sell various currencies...........


what a hoot, the spin is getting so pathetic that even the press is getting a little sheepish.

i beleive that within 36 months the $ in its current form will not purchase a thing, let alone gold (new $ coming and not just in color).

BIG changes ahead, euro cabal is no saint either. gold is the only freedom (financially that is).

adminMK's Gold Commentary & Review#10394406/02/03; 08:19:36


Catching-up with Dr. Hans Senholz on Gold......
*********From the accompanying Editor's Note: "It has been awhile since we checked-in with the renowned economist, Dr. Hans Senholz, on the subject of gold. What he thinks about gold now is what he has thought about it for a very long time, but nevertheless, there are some new twists and nuances worth noting. At the same time, for those new to the gold arena, the short essay below offers some very good grounding. Probably most salient is his thesis toward the end of the piece that the weakness in the dollar we are seeing now could be the beginnings of a 'crisis in confidence' which could 'precipitate the end of the dollar standard.'"

New Quick Notes: "As you might recall, the Treasury Department stated bluntly that it was pulling rabbits out of the hat to keep the national debt from going over the $6.4 trillion mark -- the Congressionally mandated cap. Recently, Congress officially upped that cap and, you guessed it, the national debt took off on a rocket trajectory.............From April 1 through May 23, 2003, the national debt hovered in the vicinity of $6.46 trillion. It went to $6.542 trillion by May 27th and hit $6.557 trillion by the close of business Friday, May 31st! In case you do not have your calculator handy, that amounts to a $111 billion addition to the national debt in a little over a week (which has to be some kind of record for a single week).........."


'As we go to fetch this over to the server, Reuters reports presidential spokesman Ari Fleischer saying: "The president's position is that the United States supports a strong dollar and a strong dollar is determined by the market and that's why it is important to secure policies that advance growth in the United States.".........Sounds like an echo of TreasSec Snow's comments from a couple of weeks ago. After all that's been said, we're right back where we started...........'


New Stein

Sage Advice from the Aden Sisters

New Important Link:
Investors Turning to Gold
by Choy Leng Yeong / Bloomberg News/Oakland Tribune 5/30/03

Happy Monday........

silvercollectorBelgium#10394506/02/03; 08:19:55

We can speculate my good man but it seems clear that at least temporary resolve has been the order of the summit. The dollar is firmer this morning and gold is down. I must emphasis the phrase 'temporary resolve' strongly.

I hope you have been catching my drift in several of latest posts. The theme being 'beggar thy neighbor', a.k.a. competetive currency devaluation. I would bet a dime that Mr. Bush has sucessfully arm-twisted the other members of the G-8 into believing, again on a temporary basis that the 'engine of growth' (the USA a la S. Roach) must be revived or global growth will sputter and die. I am sure you are familiar with the passages of Mr. Roach.

Again, as per one of my previous messages, we shall soon see if the ECB follows suit with rate cuts. My guess is that Mr. Bush (the 'Fed') has cozied up (forced?) the hand of the ECB and both will cut. Failing that neither will cut. The US with the 'balance in question' is not going to cut alone; the cut-cut, no-cut--no-cut scenario has been worked out behind closed doors.

"I need ONE good reason for "believing" in the dollar-reserve's survival...and then I sell my precious coins, immediately !"

Belgium, dear friend, I may have mis-lead you for which I apologize. My note to BB was to portray my disgust at the 8 clowns 'at the fair'. The 'stabalizing' of the dollar, IMVHO, is of a temorary nature. ALL fiat will fail and thus the currency of (physical) last resort will win the day.

I suggest to BUY precious coin, not sell!!!

To you, I wish a golden day!

slingshotContest Winners#10394606/02/03; 08:48:30

Congrats to the winners of the PRICE GUESSING CONTEST.

What a Ride.

ZhishengVolatility#10394706/02/03; 09:05:44

Today's gold and dollar action indicates gold's volatility is now somewhat independent of the dollar.

Something seems to be up.

Mountain TopReturn of FOA/TG#10394806/02/03; 09:09:00

If I memory serves (it doesn't always), FOA/TG said he would return when the POG was $360. It has stayed at the magic number for some days now. Come out, come out where ever you are.
silvercollectorHumor of the Day : "Canada's Worst Nightmare"#10395006/02/03; 10:35:10

I just checked my email, animated picture of a "MAD COW with a SARS mask being bitten by a WEST NILE mosquito."
Socrates964Back of the Envelope#10395106/02/03; 10:51:05

Just trying to fit some numbers to the ideas.

Taking Euroland reserves from latest ECB bulletin:

E122bn in gold/gold instruments
E231bn in forex liabs (probably 85% $, 10% Y, 5% SwFr - I assume that the Y/$ exchange rate doesn't change very much)
E208bn in euro-liabilities.

Let's assume that gold appreciates by x% against the euro and the euro by y% against the dollar. Hence, the euro value of the above assets becomes:

(122*(1 + x)) + (231/(1 + y)) + 208.

The question is how much does x have to rise by to maintain the total value of the assets constant in Euro terms.

For 10%, the answer is around 16.5%, for 20%, around 30%. These equate to dollar gold prices of $460 and $560 respectively (Assuming a base gold price of $360).

Technically, I see the E as having broken long-term resistance against the $ and is now heading for 1.29 (albeit in a zig-zag way). This would be 10%.

Clearly, the ECB can tweak these values at the margin by selling dollars to buy gold or euros.

One idea that interests me is 'dollar leasing'. Just as central banks purportedly lease out gold while keeping it on their books as an asset, I wonder if they could not do the same with dollars - i.e. keep dollars on their books as assets that have actually been sold into the market. This would be a covert way of getting rid of dollar holdings while maintaining appearances.

Any comments?

Socrates964BoE2#10395206/02/03; 10:54:12

Sorry, not very clear - idea is that if the euro appreciates by 10% against the $, gold must rise by 16.5% to keep Euroland reserves constant.
ZhishengUp into the Close!#10395306/02/03; 11:31:03

Gold, that is.

June Euro: $1.1750
August Gold: $367.00

Great Albino BatSocrates 964: about Euroland and ECB reserves...#10395406/02/03; 12:10:10

Your thoughts regarding the necessary increase in gold reserves for Euroland, given a decline in the Euro value of dollars in the reserves, are interesting.

Why not try the same calculations on ECB reserves? As I understand, it is the ECB that is commited to maintaining 15% of its reserves, in gold. I have not heard that the Euroland Central Banks, as a whole, are commited to this policy. (Is the next ECB report out after the 2nd quarter, i.e. June 30?)

If this is so, and if the ECB commitment is to be honored, then an increase in the Euro value of reserves denominated in dollars (whether through appreciation, or because of increased holdings of dollar reserves – which by the way, is what would suit the U.S. policy) means a necessary increase in gold reserves, and these can increase either through additional purchases of gold, or through an increase in the Euro price of gold, to maintain the same 15% ratio of gold to other (paper) reserves.

Otherwise, the percentage of reserves in gold, would diminsh relative to the Euro value of holdings of dollar denominated reserves.

As I see it, your point, as expressed in the first paragraph above, is the maintaining of OVERALL RESERVES for EUROLAND. Yes, if the Euro value of dollar denominated reserves falls, the OVERALL RESERVES for EUROLAND would decline unless the gold reserves increase to compensate, OR other Euro denominated liability holdings increased, or both. However, there is, to my knowledge, no commitment to avoid a decrease in general reserves.

The only commitment of which I am aware, is by the ECB, in the sense of maintaining 15% of reserves, in gold. If the Euro value of the dollar denominated reserves falls, then the portion in gold can either fall, or remain at the same 15%, or even rise. This depends on whether the fall of the dollar is compensated or not, by a rise in the Euro price of gold.

If the gold portion of ECB reserves falls below 15% for whatever reason, then the ECB, to honor its commitment (how much honor will there be?) must buy additional gold, if gold does not go up in Euros sufficiently to meet the 15% requirement.

Somehow, I do NOT have the sensation that the ECB will be at all keen to buy more gold. I hope I am mistaken! I do hope that 15% of reserves in gold requirement, so valiantly proclaimed at the outset of the Euro, is strictly observed. I am not confident it will be.

To make matters worse, suppose the ECB leases the gold from other Euroland CBs. Then the ECB has more "gold" in its reserves, and the Euroland CBs simply have a "gold receivable" on their books. Everyone is happy! The ECB has more reserves - via cooking the books - and the Euroland CB's keep their gold reserves via the simple expedient of counting gold receivables the same as physical gold. Don't put anything past them!

We are talking about things which are kept secret, by desperate people in a desperate situation. This is not conducive to realistic thinking and honest action.

Perhaps all the above is not clear; probably not. In a word: if 15% of reserves are not held in gold by the ECB at any given moment, no one in authority will move a finger to right matters. That's the way I see it.

The rulers in Euroland, notably the Germans, are scared to death of deflation, and – to Hell with sound policies.

Bad news for the Euro!

Guano from the GAB.

GonlyoldReply To Belgian#10395506/02/03; 12:35:19

Belgian said, "I need ONE good reason for "believing" in the dollar-reserve's survival...and then I sell my precious coins, immediately !"

I'd like to offer a reply to his challenge. However, even if my thoughts have one iota of convincing him to believe in the dollar-reserve, I would not hold him to his agreeing to sell his precious coins, EVER. I still think he should keep them no matter what the economic issues are.

Also, I don't pretend to have an in depth understanding of financial matters as do most of the posters on this site. I don't post very often, mostly I try to learn and understand the issues being presented. So bear with me if my reply appears frivolous and elementary. And do feel free to correct me in any of my misunderstandings of the issues. With that in mind, I submit the following reasons why Belgian should believe in the survival of the US$.

Point #1: There is no assurance that the euro# will maintain it's gold backing.

Once upon a time, in a banking system far, far away, the paper US$ was backed 100% by gold and silver. Over time, the "Confederation" acted upon the dollar to the extent that the US$ has completely lost it's gold and silver backing and now is a 100% fiat currency.

Now comes the Euro, which is initially backed 15% by gold. This currency comes out of the shoot with only a 15% backing! What assurance does anyone have that this meager 15% will likewise not be completely eliminated? Ultimately, it's the same "Confederation! And as the "Confederation" can giveth, so also the "Confederation" can taketh.

Additionally, to me, the fact that Euro is a 15% gold backed currency means that the Euro is an 85% fiat currency. Am I to understand that the world is in such dire straits that it is shunning a 100% fiat currency for an 85% fiat currency? Am I to understand that Belgium has given up belief in a 100% fiat currency to contemplate belief in an 85% fiat currency?

So Belgian should believe in the survival of the US$ because the Euro doesn't offer enough security to switch beliefs.

Point #2: Gold is not, cannot, be denominated in pennies.

The US has a dollar, which is denominated in fractions. This allows people to buy a 67-cent widget with a dollar and get 37 cents in change. Gold does not have that ability. Gold cannot denominated in any amount, let alone a penny, and have that amount be maintained. Gold denominates itself according to economic conditions. One could contemplate a gold and silver and copper currency system: let gold and silver find it's own trading value and have the copper fill in the "small stuff". But I don't understand how gold alone could be used as a currency in minor everyday transactions.

Therefore Belgian should believe in the survival of the US$ until a gold currency system is established.

Again, I'm just a beginner, so do go easy if you decide to reply to my bold points.

GonlyoldGreat Albino Bat#10395606/02/03; 12:47:29

The Great Albino Bat said, "I do hope that 15% of reserves in gold requirement, so valiantly proclaimed at the outset of the Euro, is strictly observed. I am not confident it will be."

He posted his reply while I was composing my reply to Belgian. It appears the GAB has the same concerns as I do. Woohoo! Maybe I'm getting it!

Great Albino BatGonlyold: Things are much, much worse than you think...#10395706/02/03; 12:47:43

The Euro is NOT backed by 15% gold!

There is a relatively small general reserve in the ECB, for the Euro. This reserve is only a small fraction of the "liability side" of the Euro. A very small fraction!

And OF THAT FRACTION, there is 15% in gold.

That's 15% OF THE FRACTION, not of the Euro.

And even that is in doubt, according to my guano in the previous post.

The world's monetary mess stinks and it will likely kill our civilization.

It's that bad!

Get the physical gold and prepare for the worst.

Royal guano from the GAB.

USAGOLD / Centennial Precious Metals, Inc.The Fruit of Your Labor: another day, another dollar?#10395806/02/03; 12:51:26

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

GoldiloxFrance and US patch it up#10395906/02/03; 12:56:47

I'll leave the URL for you to read, but the most interesting to me was the mention of cordial relations with France and Russia, but NO meetings were planned or held with Schroeder. Could it be that having the US tactics compared to the 3rd Reich are a bit tougher to forgive, or is it just a desire to stay apart so te press doesn't even ask?

A third option, Germany is actually in a recessionary near-deflation, so perhaps GWB doesn't want to publicly expose himself to what they've got, like it was some communicable disease?

Socrates964GAB#10396006/02/03; 12:57:53

Yes, you've understood my argument exactly. As for your point about running the same calculation on the ECB reserves - one could certainly do it and I'll try and find the relevant figures.

What I'm trying to get at, however (and we can only get a rough feel for the truth here) is where the price of gold has to go to keep Europe's financial system happy in the face of a revaluing euro. On this basis, I think that you have to look at the overall reserves of Euroland, since at the end of the day, this is what is backing the Euroeconomy.

A lot of people write about the Euro as if it is a new currency. I view it as an extension of an old currency, consisting of the DM, the Guilder (which was pegged to the DM) and the French Franc (which, once it had adjusted its parities by the early 1980s, settled into a reasonably tight peg to the DM). While there was nothing on the scale of the Euro prior to its launch, I know lots of non-German, non-Swiss investors who were happy to hold their wealth in DM or ChFr for decades. Looking at the ECB is like looking at the balance sheet of the parent company for a large industrial group. To understand the whole, you have to look at the consolidated balance sheet, since depending on corporate strategy, the reserves may be at parent level or distributed throughout the subsidiaries.

It may be that these figures are misleading, but since many people have advanced the argument that POG is a macroeconomic adjustment variable, I'm just trying to get a feel for where POG has to go to compensate for slides in the dollar, and looking at European reserves gives you one answer, just as looking at other countries' reserves will give you others.

Gandalf the WhiteDate that keeps a SMILE on your face ! <;-)#10396106/02/03; 13:01:14

GC3Q 5/30/03 Settle = $365.6 OI = 117,710
GC3Q 6/2//03 HIGH = $368.3 low = $361.2 Settle = $367.1 Change +$1.5

silvercollectorGAB#10396206/02/03; 13:51:46

I was just re-reading your post of the 15% of Euro reserves being gold. Randy often publishes these numbers although I have had a difficult time reconciling this figures. I think someone had thought about putting together a spreadsheet to monitor the Euro reserve and gold fractions thereof going back to the inception of the currency.

I have not seen this or similiar charts.

Your post also interests me from the point of view of US reserves which I understand are principally gold. It says little that the reserves are '100%' gold but in terms of 'fractionality' $1000 of pure gold 'backs up' a zillion gadzillion dollars.

For the mathematically inclined (Sundeck and contrarian) this fractionality can be expressed by the formula;

1/infinity ;)


Thanks for the note, have a golden day.

Gandalf the WhiteTA TA TAAAAAAAAAAA --- We have ESSAY CONTEST WINNERS !!!#10396306/02/03; 13:59:38

This is a LONG POST !! and shall also be posted in the "HALL of FAME"

The Essay Contest TOP PRIZE WINNER of the Dutch King Willem 10 Guilder GOLD coin is Sir John the Jute !!!

And the Two Essays selected as "Honorable Mention" WINNERS which will each be awarded a SILVER one-ounce Canadian Maple Leaf are: Sir Sundeck and Sir Goldendome !!

Will the three prize WINNERS, Please provide Marie your REAL name and snailmail address for posting the PRIZES. She can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it.

ALSO -- Two Essays were granted "Mention" recognition status as they were very close to prize winners. These Two Essays are by: Sir Boilermaker and The Hopple !!


These COMPLETE Essays are setforth below:

John the Jute (5/30/03; 10:42:24MT - msg#: 103801)
What do you think will be the price of gold by traditional summers-end -- Labor Day, midnight, September 1, 2003? And why?

"And what, pray, is so fascinating about the price of gold?"

I came back from my day-dreaming with a start. "I beg your pardon, Holmes?" I said.

"Well, Watson, you stopped reading those papers in front of you some while ago, and have been in a reverie since then, thinking about the price of gold. I was just wondering why?"

"But how on Earth could you have known what I was thinking?"

"You know my methods, Watson. Apply them."

"But how? I can't imagine what you can have noticed. It's not as though I had taken a sovereign out of my pocket and was studying it."

"I didn't 'notice' anything: I observed. When you first lowered the papers to your lap, you gazed at the photograph on the wall which you took when you lived in Australia in your youth."

"So I did."

"And then you transferred your gaze to that stain on your hand which has resulted from your use of the wet collodion process for printing your photographs. You were thinking either of photography or of something from your days in 'Oz', as I think they call it."

"Please don't call Australia 'Oz', Holmes. Oz is quite a different story."

"No matter. The next subject of your gaze was the teapot. What, I asked myself, does a teapot have in common with the wet collodion process? The answer is obvious: silver.

"But the mines you knew in Australia were the gold mines of Ballarat in Victoria. Was the teapot just a tangent into precious metals in general? I watched carefully, and observed you feeling with your tongue at that large gold filling you have recently had in a tooth. And then you shook your head in just the same way as you did when you lamented the cost of that filling. Ergo, the price of gold."

"Wonderful," I said.

"Elementary," Holmes replied. "What is in those papers that started your chain of day-dreaming?"

"These are really very strange. Mr. H G Wells says that they came back to him in his Time Machine from 108 years in the future. They come from something called the "Inter Net" and relate to a contest in which people attempt to predict the future price of gold."

"And is this 'Inter Net' a sort of cloth netting used in place of a shroud, to wrap corpses before they are interred?"

"I'm not sure, Holmes. Wells is not at all clear."

"Hmmm. I suspect Wells's fertile imagination rather than a real example of time travel. But the problem is interesting enough. From the very nature of the question, I presume that the gold standard has not lasted until this year 2003."

"Clearly not. Which seems strange to me. The gold standard seems to be spreading all over the World. Even India, that bastion of silver coinage, adopted a gold standard two years ago. The United States is the only great power still using both silver and gold standards."

"Quite so. And unless Mr. William Jennings Bryan has his way, they too will adopt a gold standard soon. But a major war could blow that asunder. At least, it could if John Keynes is right."

"I'm sorry, Holmes. Who is John Keynes?"

"John Keynes is a schoolboy. A quite astonishingly precocious schoolboy."

"I see," I said chuckling. "Well, have a look at these letters from the Inter Net and see what you make of it all."

"Why not? I'll just light a pipe before I read."

"Ah, that's another thing. Wells tells me that in this future time, people are not allowed to smoke in public."

"Ridiculous! You'll be telling me that they have banned cocaine next."

I forbore from entering into that issue, one of our few major disagreements, and watched while Holmes scanned the Inter Net letters at great speed.

At last, he put his pipe down, and looked at me. "A strange world, this 2003. There would seem to be two major factors that will affect the price of gold that summer. One is War and the other is Politics. Supply is stable and well-known, so that won't have an impact in such a short time. And the Economies of the great powers appear to be in a mess, so the gold price is rising steadily as that mess becomes more and more apparent. But War and Politics could change everything in a period of three months.

"War in country A is bad for the economy of country A but can be good for the economy of country B. Take the United States for instance, since so many of the letters come from people living there. The War Between the States -- or whatever we are now supposed to call it -- was disastrous for the economy, particularly of the Confederacy. But the perennial squabbles in the Balkans have done wonders for the sale of Mr. Winchester's rifles."

"Oh, Holmes!" I cried. "That's far too hard-hearted a way of looking at things! The real disaster of the War Between the States was the death of so many brave young men."

"I am sorry, Watson," he replied. "I should have said that better. Yes, indeed, the human cost is the greatest cost. But we cannot ignore the economic results. Particularly when there are people who exploit them.

"During a war, the antagonists spend freely on the materials of war and, after the war, they spend as much as they have left on the materials of reconstruction. A country whose industries are undamaged -- and particularly a country like the United States, which is geared to responding to needs in the marketplace -- will benefit from that. And I'm not thinking of war profiteering. Quite ordinary industries, making weighing scales, or gas mantles, or telegraph machines, will receive a boost to their sales -- a boost which will trickle down to the rest of the economy.

"If the economies of the great powers benefit from such reconstruction in the summer of 2003, then the pressure on the gold price will ease.

"And there is also the effect of Politics. Elected politicians, such as the President of the United States, and our own Prime Minister, want their voters to feel that the economy is doing well. Partly of course, they want the economy to be doing well in actual fact -- that's why they went into politics -- but little more than a twelvemonth before a US presidential election, there will be a focus on the perception as well. Which again will ease the pressure on the gold price."

"So what do you think the gold price will be in September 2003?"

"It isn't so much a price as a probability distribution."

"What does that mean?"

"It means that the price of gold will be between 70 and 90 pounds. If you must have a single number, then let it be 80 pounds."

"The contest requires a value in US dollars. What rate should I use for the conversion?"

"The traditional one, as first calculated by Sir Isaac Newton, of one dollar to four shillings and sixpence ha'penny."

"Hmmm. A pound is 240 pence; four shillings and sixpence ha'penny is 54.5 pence. So eighty pounds is (19200 divided by 54.5) dollars."

I scribbled on a scrap of paper for a minute or so, wishing that someone would invent a pocket machine for long division.

"$352.30. That's a rather bearish view."

"Perhaps it is. Maybe I am giving more credence to market manipulation than to market forces. But my experience of crime leads me that way."

"Is this what you meant when you spoke of those who exploit the economic results of war?"

"It is indeed. Some of the greatest criminals in London, far worse than the late Professor Moriarty, are those who not only exploit war but even foster war so that they can exploit it. And these criminals are all too often welcomed into our highest society because of their wealth. But we mustn't get dragged into depression by Wells's little game."

"So you doubt whether the papers are genuine?"

"The nature of the prizes is significant, I think. One is a 10 guilder coin from the present Dutch Queen, Wilhelmina, and the other is a 10 guilder coin from the late King Willem III. Why should a contest in the early 21st century use money from the late 19th century? Have they no reliable money of their own?"


Sundeck (5/29/03; 05:57:52MT - msg#: 103715)
$$$$$$$ Essay Contest Entry $$$$$$$
What price Gold on September 1, 2003 and why? That is the question?

Technical Approach

From a simple technical standpoint, one can apply (at least) two approaches:

1. Extrapolate the primary up-trend in POG that has endured for the last two years. This yields a value of $374 plus or minus about $30 on 1 Sept. 03.

2. Extrapolate the primary down-trend in the USDX and convert to POG using the line-of-best-fit derived from the strong inverse correlation over the last few years between POG and the USDX. Using an extrapolated value of USDX = 90 on 1 Sept. 03 and evaluating the equation,

POG = - 4.35 USDX + 782

yields POG = $390.50. The uncertainty in this result is about plus or minus $40.

Halving the difference in these two results yields a POG around $382 plus or minus about $35.

How much faith can one put in this result? That boils down to how much faith one can put into the durability of the primary trends in the POG and the USDX.

Let's look first at the "scree slope" of the USDX. " ‘Scree slope’ you say? Isn't a scree slope the gradient of the accumulated loose rocks at the base of an eroding mesa?" Yes it is, and it has a characteristic slope that is a function of the force of gravity and the physical properties of the loose rocks and other materials involved; as well as other factors, like whether its base is being eaten away on one side by a river, or is periodically shaken by earth-quakes. Pretty complex, heh? Sure, but a well-defined and enduring slope results nonetheless! The principal "emergent property" from piling up rocks and sand. Fascinating! So it is with the US dollar. It is too high and it is eroding… and the forces and properties at play are like those in a scree slope. They are impossible to measure or predict individually, but a stunning property emerges - a characteristic down-trend in the USDX, that persists for as long as the basic ingredients stay the same. I am assuming that the basic ingredients stay the same until September 1. I am reassured because major "scree slopes" in the USDX over the past 30 years have persisted for several years and this one has only been going for a year-and-a-half and looks like being a beauty!

How about the up-trend in the POG? Pretty much the same deal. Unless there is a major seismic shift between now and September we can expect the trend to continue. But you never know and it is impossible to predict.

Fundamental Approach

Much more complex – akin to measuring the shapes, as well as the physical properties, of all the rocks, stones and grains of sand in the scree slope and also knowing when the river at the base is going to flood, and how high and how fast the water will go; as well as the timing and magnitude of the earth-quakes, and the interplay between the S and P components, and a whole lot more ... you can see why many people prefer technical analysis! But let's have a go anyway.

What does one regard as "fundamental" in pricing gold? Well, since it is priced in $US, I suppose the "value" of the $US is fundamental. Now the value of the $US is declining in giant steps. The rate of descent might be slowed, but not substantially reversed – unless the EU enters the market as a major buyer. Likely? I think not. The decline in the dollar is probably pretty well locked in. It might be moderated a little by the EU and other countries lowering interest rates before September, but that is likely to be offset by another cut in US rates. Hence the slide is on for quite a while. The US rate cut will probably be 50 basis points and that will encourage another round of house refinancings and ensure that the big bond bull is kept alive for at least the next three months. Some money may even flow back into shares, but the historical sequence of equity market corrections augurs strongly for a major sell-off before September. Also, while a rate cut will encourage US nationals to stay in the housing and bond markets, it will have the opposite effect on international traders who are already seeing their profits from bonds turn strongly negative from low interest rates and foreign exchange losses. Their interest in the housing sector may remain, but they would be concerned about its teetering top-heaviness and liquidity concerns should it fail. So ... the prognosis for the dollar is down at the same rate to a level of about 90 for the USDX. That's about a 5% drop from here and equates to a 5% increase in price for gold, or about $18. this would put gold at about $382 come Labor Day. (Well, look at that – the same answer as the TA provided!)

But wait! We haven't mentioned other "fundamentals", like supply and demand.

Take supply first, and that is relatively easy (I think). New mine production will go on much the same and there probably will not be any dramatic change in the current trends by miners to reduce forward sales and close out some of their hedged positions. The Washington Agreement is still in effect. Activity outside that accord will probably continue to see net acquisition, rather than net disbursement of gold reserves. No surprises there. The US position on gold is as unclear as ever, but the bias will continue to be away from leasing and more towards covering exposed positions. Recycling of scrap will probably go on as normal.

Demand? Well, that is where the uncertainty lies. Few would deny that gold as an investment and preserve of wealth has received increasing publicity in the last twelve months. Accessibility to gold investments of one form or another is increasing. Gold is probably entering portfolios with renewed confidence and the talk amongst "people in the know" is of a sustained, long-term bull market in gold. Bull markets being what they are, one would expect some "irrational exuberance" along the way, but how much of this will occur before 1 September? I think it is still too early for the glitter to appeal to Jack and Jill Ordinary – and they still have a bad taste in their mouths from the slumping equity markets. Also, "fear" has not set in yet in the equity markets and the "Greenspan put" will probably stave off that phenomenon for a while yet. Demand will continue to ramp up in China. In India, although the wedding season will be ending by September, many dealers may be wary of a runaway in the price of gold before next year. I therefore suspect that seasonal demand may not slacken as much as normal.

What about "demand shocks"? China revaluing or floating its currency? Mmmm ... don't know. Terrorist attack in the US? Maybe, but God forbid. The effect from 9/11 was a step in the gold price of about 8% for about a month. A similar event might see gold above $400 on September 1, but that is unlikely. Major bank failures in Japan? – could see a surge in Japanese buying, but probably not more than a few percent on the price. What else? Major US bullion bank caught short? Not much talk of that lately, but the risk is probably still there. Were they protected by the increase in COMEX margins back in February? Perhaps they were. Might COMEX increase margins still further? Well…it's a crooked game with some large asses swinging on the chairs. And then there is the Barrick / Blanchard law suite. If dismissed – gold may fall a few percent; if upheld – gold may go up a few percent. Derivatives failure – Buffett's weapons of financial mass destruction – they too are out there for gold and for just about everything else that can be gambled upon; and that could be a Puplava 10 sigma event, but probably not before September. War with Iran? Very real possibility if Mr. Bush and his colleagues cannot get the economy moving in time. The "Iran re-election contingency plan" is definitely on the cynics table – and they have oil too, and they need liberating just like Iraq, and they may be harbouring terrorists, and developing WMD... Yes, some premium might appear in the gold price from that contingency before September, but probably not much.

Whew! Where does that leave us on the fundamentals? I'd still say $382 plus or minus $35, but with a strong upside bias. Better than Fed-speak, but still not very clear. Oh well…we will just have to wait and see…





Goldendome (5/24/03; 13:32:32MT - msg#: 103426)
$$$$$$$$$$$$$ ESSAY CONTEST ENTRY $$$$$$$$$$$$$$$


On Tuesday, June 17th, 2003, after repeated denials, North Korea admitted that it was re-processing spent nuclear fuel, that they have found they have enough plutonium for several nuclear weapons, and that they have possessed more nuclear weapons than first estimated. Secretary of State Colin Powell condemns the news and says, "The North Koreans are on a path of recklessness." On the news, Gold moves up $6.10 to $386.40, sparked by heavy buying in Asian markets. The dollar also rises to its highest level in four months against the Yen. The Dow Jones sheds 181 points on the troubling news to 8338; Kudlow and Cramer claim the market will surge back once the true nature of the "bluster" is understood.

The last two weeks of June saw a choppy but steady rise in the gold price as the dollar continued its swoon against foreign currencies. The USDI fell to 87.65 by month's end. Rumors of problems developing in the financial markets with currency and interest rate spreads moving to adverse extremes against several large unnamed financial institutions, but rumored to be located in New York, Germany, and Japan. Of further Note: Several large short players and hedgers in the gold market were making aggressive moves on gold price dips, to exit unfavorable positions, as the gold price moved significantly into the $400 range as the month closed. New buyers entered the market when the Federal Reserve abruptly cut short-term interest rates to 3/4% in mid-June. Banks were reportedly paying as little as 1/10 of a percent interest on savings accounts. Gold had now gained a full 25% in the previous year alone!

By July 4th, several congressional, as well as United Nations' meetings had taken place to discuss the Korean situation. All agreed on one thing--Now was the time for talk. President Bush also chose this historic occasion to talk (by television) to the American people. Telling us all again, how we have always stood in times of trouble to defend freedom, whenever it was threatened. "We now face such a time; the North Koreans WILL NOT be allowed to keep their nuclear arsenal!"...(Well, that was clear enough). He continued, "We must first sit down with the North Koreans, in an attempt to voice our concern. Therefore, the United States will open dialog with representatives of the North Korean government as soon a possible [something we had previously said we would not do unilaterally] to bring lasting Peace and Stability to the region."

Monday, July 7th, the stock market opened up 136 points on the "good news of impending talks." Gold dipped $3.70, to $414.60. Later in the week the first estimate of second quarter growth was released showing a GDP up-tick of 2.3%; the Dow Jones tacked on another 91 points, and Gold closed at $416.10. At about this time, (no one knows for sure but the decision maker) Alan Greenspan, stepping out of character, decided to make a guest appearance on "Larry King Live". Don't ask me why, only he knows that answer. Although publicly supported for re-appointment by the President, some said it was the first stop on Al's "farewell tour".

Anyway, the guest appearance was on Thursday, July 24th. A record audience tuned in to see "The Maestro" and fellow market crooner, Louis Rukyser exchange notes with "Mr. Suspenders". The audience that night saw their beloved Chairman, Mr. Greenspan, "live" as never before; he was witty; he was even comically engaging, exchanging clips with "Rukey", and acting almost giddy at the economies recently reported performance. At a point near the show's end. "Rukey" offered that were it not for Alan Greenspan, that he [Rukyser] would not be were he is tonight. King looked perplexed, pondering the comments meaning, as if thinking and wishing to say: "Hey Bozo, who do you think gave you the invite here, anyway?" King then turned his head and asked Greenspan in his most sympathetic manner, "Alan, when do you see the economy returning us to real prosperity?" Greenspan, in rare historical based glibness responded, "Larry, prosperity is just around the corner."

Ted Turner, owner-or former owner of CNN, later commented about the show. "I thought I was going to throw up. Here are those three, yucking it up, like a bunch of drunken frat brothers at a fifty-year reunion. They should have shown a little more concern for the poor folks that lost all their money in the Markets." Ted failed to father mention, that he too, was now one of these much poorer folk.

The following day

Gandalf the WhiteTHE REST of my last POST ! ESSAY CONTEST WINNERS #10396406/02/03; 14:04:01

The following day, the markets gave their assessment of "The Maestro's" performance--Two thumbs down! Shedding nearly all of the post 4th of July rally and ending at 8351 on the Dow. News of a new record trade deficit, and a record slump in auto sales helped to push down the Chairman's scores. Gold surged ahead to $426.50 (a new high for the move) as both U.S. and Chinese efforts to organize talks with North Korea had come to nothing.

Outside of the USA Gold Forum's vigilant membership, few were aware that the Comptroller of the Currency, in a highly unusual move, had swooped in to examine both of New York's largest banks simultaneously. Obviously though, some gold traders had also taken note.

At the end of the day, Greenspan said that he used a poor choice of words, when referring to "prosperity," but had felt a little light-headed at the time. Both Rookies and King said they couldn't explain it either, but both said they had felt almost "high" during the television broadcast. After reviewing tape of the show, all three, it was noticed, were drinking much more liberally than would normally be expected, from their French bottled waters. The bottles were located and sure enough, tested positive for a mild hallucinogenic drug. Tom Ridge declared it, "An act of financial terrorism." Ordered a full investigation and promised, "total justice to the guilty." The French ambassador immediately denied any French involvement.

The poor Dow, NASDAQ, and S&P continued to sag into August as did the weary countenance, jowls, and eyes of the forlorn, Sir Alan.

On August 4th, (The one-month anniversary of the President's "Let's sit down with the North Koreans speech," They abruptly said all talks were off...They did not trust the United States...They were armed and well prepared for war...They as a sovereign nation would decide their future...They welcomed support in the name of freedom from any country willing to stand against the United States. They also now admitted to having over a dozen nuclear weapons and stated that those weapons would be used WITHOUT DISCRETION to defend themselves.

The following day Iran and Syria both issued support for North Korea and admitted having nuclear weaponry--nothing more than that. Within a day, Israel sealed its borders and declared that any provocation was a act of war.

Russia's Vladimir Putin spoke in Paris. "The World is poised for War...Only the United States can prevent it."

You can imagine what was going on in the markets.. Gold futures lock-limited up three consecutive days. After that, the COMEX was closed. A spokes man said, "because of computer tampering and the necessity to protect traders from the unscrupulousness of speculators." At the same time, spot rose to $500, then 6, then 7. Stocks? I wasn't watching them that much, but they crashed to about 6,000 on the Dow within days, and kept heading South.

The news of financial insolvencies and the inability of market makers and banks to meet obligations now were causing the public to "run" from the markets and banks. The FDIC had joined in the New York bank investigations and stated that a congressional "pay out" might be needed to meet legal mandates in certain situations.

Rumsfeld must have seen his face reflected in the new foreign enemies and blinked. He demanded, "The United Nations must act!" What!(?) This from the new town Marshall, who only months before had been looking for new gunslingers to blast? The world froze for two weeks. The USDI plummeted to 53.

Then at 8 A.M. in the morning, on Sunday, August 24th, one day after the traditional Dragon Boat Festival in Hawaii, a nuclear device was detonated a few hundred yards offshore of Waikiki Beach at Honolulu. The device, believed to be aboard one of the many luxury yachts in the area, leveled the beachfront Hotel Strip and immediately killed and estimated 300,000 people.

The following day, Monday, none of the markets opened-nor did they open for the remainder of the month. I visited the local trader in my small town. He figured physical gold at somewhere around a thousand dollars and ounce, but he didn't know for sure--didn't seem to care. Nothing seemed to matter now. "What were you thinking of doing?" He asked. "You DON'T want to sell it now. I don't even know if you'd get your money. And even if you did, you might not want it after a while. Because gold's probably just going to keep going up...for a while anyway."

By September 1st, --Labor Day-- Physical Gold Stood at $1787.35 per ounce and was still climbing, as the United States considered retaliation--but against whom?

Respectfully submitted by:

-------Goldendome 5-24-03

AND because of the CLOSE RANKING, the Judges are making RECOGNITION of two additional entries as

as FOURTH PLACE "Honorable Mention"

Boilermaker (5/29/03; 15:37:33MT - msg#: 103744)
Essay Entry
Whistle Blower Blues

We celebrate Labor Day as the hot dry summer drags on. But this is not a time for celebration with the markets in disarray. The Administration and all of Washington is in full panic deployment. No one could have predicted the financial devastation and fallout that began when the former head of security at the Fort Knox Gold Repository revealed that "large quantities of gold bars" had been shipped out of the facility over the past several years to unknown destinations. This former employee who was under oath to maintain secrecy about all aspects of the depository had become intrigued with several of the internet gold sites where the buzz in recent years has been about the alleged manipulation and suppression of the price of gold to create the illusion of a "strong dollar". It was June 16th when Robert Smith, a 30-year government employee of several different agencies wrote to his Congressman, Ron Paul of Texas, and revealed the ongoing reduction of the gold in our largest National Gold Repository. Miller suggested that it was part of the effort to subdue gold and brace the dollar. Interviewed on several financial news outlets, Miller made a convincing case for the allegations and got the attention of investors around the world.

Congressman Paul, himself a gold advocate, demanded an audit by Treasury that would be overseen by a congressional delegation. At first the Administration dug in their heels, denied the charges and refused the audit. But like Watergate, the denials only brought more criticism and pressure to reveal the truth. The media, at first not much interested in the story, became fully involved as the financial markets began to react violently to the allegations. The Administration, seeing the futility of further denials, finally confirmed on July 25th that shipments of gold from Fort Knox had occurred as part of a long-term program to reduce the US gold reserve. This reduction was "in keeping with the objective of stabilizing and strengthening the US$ and in recognition of the diminishing role of gold as a reserve asset".

The financial community was caught off guard by this sudden revelation and there was instant chaos in the gold markets that quickly spread to currencies, commodities, stocks, derivatives and even interest rates. As we celebrate Labor Day the financial landscape is littered with the confetti of worthless paper and firms that had so recently been given great value. Now the term "precious metal" has been given a renewed meaning to a humbled nation.

Gold has suddenly become the standard by which other assets are valued. With the closing of the COMEX and other official gold exchanges there is no market that establishes an official price. The value of physical gold can be measured only by comparison with what people are willing to offer for it from day to day. For instance, auto dealers are accepting gold at a ratio of $2250 per ounce and real estate brokers are advertising even higher exchange rates.

The government is in a frantic effort to reconfigure the dollar and is threatening to make gold illegal as they did in 1933. This has only served to strengthen gold and make the Euro the currency of choice with US producers and consumers. The most recent rumor is that the US is negotiating to become a member of the Euro system because OPEC will no longer accept the dollar.

This Labor Day is the painful turning point for Americans used to the special status of the dollar. Call it "The Night They Tore Old Dollar Down".

and FIFTH PLACE "Honorable Mention"

The Hoople (5/29/03; 13:27:47MT - msg#: 103735)
The POG on labor Day is an appropriate thought. It is labor that toils to mine, extract, refine, and ship gold. It is labor that builds wealth and fortunes. It is then bankers that cheat laborers out of their wealth by all the tried and true sleight of hand methods. How? By issuing worthless fiat that can never be a store of value but rather a depreciating asset. By confiscating gold 70 years ago and using it as a weapon against laborers. By publicly deriding gold as a "barbarous relic" while secretly knowing it is their only salvation. By devising paper instruments to manipulate and control the POG. There are many other schemes to mention that would be too lengthy for a simple essay, suffice it to say all schemes eventually fail.

One thought rarely mentioned about the big "scheme" is how the reported CPI/PPI numbers not only understate the real rate of inflation(a scheme itself), they are going the wrong way to actually reflect it. Hedonic deflators, quality improvements and superior technology are trumpeted as deflation adjustments but nowhere does cheapened product, smaller portions, and inferior service get any consideration. Whether it is a home, car, or pair of jeans products are cheaper and poorer service is the norm. This is another hidden wealth destroyer.

The old axiom about an ounce of gold being able to buy a fine men's tailored suit is still true. I recently bought a fine tailored suit at Nordstrom's for about $1,200.00. It still isn't as fine tailored as suits were years ago. The service while good by today's standard is still inferior to back then. I can only speculate that to replicate a fine tailored suit by those yesteryear standards would require up to $2,000.00. To me that represents the true value of gold. So what I submit as the POG on Labor Day are 2 prices: The real one ($2,000.00) and the banker scheme POG to defraud laborers everywhere- $392.00. By the time Labor Day rolls around we will have printed another 150 billion of FRN's. Our Gross Public Debt should have increased by a similar amount. Frightening possibilities for all holders of paper wealth.
THANKS to ALL that did spend the time, thought and effort to enter the ESSAY CONTEST !
These entries were all TRULY GOLDEN and very difficult to judge between.

Black BladeDollar Barely Up as Data Erodes Gains #10396506/02/03; 14:11:29§ion=news&news_id=bus-n02242377&date=20030602&alias=/alias/money/cm/nw


NEW YORK (Reuters) - The dollar held a small advantage against the euro on Monday as last week's upbeat tone for the U.S. economy was squelched by fresh and generally weak U.S. data coinciding with a slew of world leaders' comments on the U.S. currency. The battered U.S. manufacturing sector slowed its rate of decline in May by more than economists had expected, while U.S. construction spending fell in April instead of rising as forecast. "Even with some decent components within it, the overall ISM (Institute for Supply Management) headline threw cold water on the dollar rally, easing it back a bit," said Michael McGuinness, head of North American sales at American Express Bank in New York.

According to a Canadian official, Bush also said the value of the dollar was not up to him. "As far as the value of the U.S. dollar is concerned, Bush said he was not the one who decides. It is (Federal Reserve chief) Mr. (Alan) Greenspan," the Canadian official told reporters in Evian. The Federal Reserve determines interest rates, while the Treasury typically comments on the dollar. "It seems stupid on the face of it but it is really not if Bush was trying to say interest rates as a fundamental are more important than official speak in terms of setting the medium to long-term value of the dollar," said Greg Anderson, senior foreign exchange strategist at ABN AMRO in Chicago. "Maybe he is trying to tell other officials, especially Europe, that if the currency is bothering you, call your central bank president, don't call me," said Anderson.

Black Blade: Agreed, the president's moronic comments at the G8 conference were not exactly surprising but defied the reality of the situation. The direction of the dollar is out of his hands. Treasury Secretary John Snow jumped in with "me too" comments this afternoon. Perhaps he got a nasty phone call from France, who knows. But neither of them have any real control over Fed Chairman Alan Greenspan or the market. If Mr. Bush wants the dollar to be "strong" then he had better reverse the soaring budget, trade, and current account deficits as well as pay off the soaring national debt. Somehow I don't see that ever happening.

Belgian@ Gonly(g)old...#10396606/02/03; 14:26:44

I know and do understand how enormously difficult it is to "understand" the new, coming Gold ! It also took me a lot of efforts to reach some level of understanding and Gold-insights. But Gold's complete picture is to be found here at usagold's ARCHIVES ! Study A/FOA, again, again AND AGAIN ! Yes, fellow goldmeisters, FOA is very...VERY heavy stuff and written in a cryptic language. And I remain surprised that there is nobody out there who even attempted to re-write this whole thing.

Answering your questions would take quite some hours of concentration as to be complete. Certainly because of my poor English.

The euro is NOT and does NOT intend to be "backed" by Gold !!! The euro wants to take Gold out of its "money" association ! Free Physical Gold is a *wealth-reserve-asset* and NOT money or a derivative of money. The purpose of Free Physical Gold is to become a tangible representative of all the wealth this globe is producing.
Not a contained unprecious metal that is forced to walk in line with a currency/fiat. Free Gold is un-manipulated...un-engineered, Gold. A wealth-reserve-asset that evolves with all the wealth of the world and not with one particular fiat that wishes to claim reserve status. Gold is the only "REAL" reserve.

Gold is NOT a derivative of dollar-fiat-paper. Those trillions of dollar-reserves are NOT representing the globe's wealth. And it is the dollar-system that contains Gold from doing so (representing wealth). Gold is ment for storing your surplusses and function as a transferable wealth tangible. Fiat is not suitable for doing this because of its permanent depreciation. That's why Gold must be contained. The euro project wants to promote Gold as a permanent appreciating wealth reserve. That's why the ECB has introduced the marking to market of its goldreserves in anticipation of Free Gold that evolves, valuewise, with the total, wealth that we are producing and wish to consolidate in something tangible for all seasons and times.

A surviving dollar, dollar-reserve-system, will NEVER let Gold Free !!! The dollar or any other currency can never, ever compete, permanently, with Free Gold !

The present dollar-standard has evolved into a debtmeter !
The dollar must contain Gold from setting Free as to not signal how bad/accidented, this dollar-standard, really is.
Lost 70% of its purchasing power in 30 years and will soon lose its purchasing power at a dramatic speed, when the past confetti inflation translates into price-inflation !

The euro as an alternative fiat is will become as worthless as the dollar over time if the euro-system should copy the dollar-system with unfree, contained Gold !!! But this will NOT be the case ! The ECB has made its intentions, for Freeing Gold, very clear with openly exposing its goldreserves to the present dollar-paper-gold-market pricing. The ECB wants to set Gold Free from this dollar-system with the installment of an euro-PHYSICAL goldmarket !

The amount of Goldreserves in the ECB and National vaults is of no importance !!! Even one gram of Gold could theorethically revalue as to represent a bigger and bigger amount of wealth on the only condition that one has a free Physical goldmarket.

The dollar hates Gold, wich you all agree. The euro loves Gold...not because it has an arbitrary cover of 15%, but because the euro wants a Free "appreciating" Gold-Value as wealth-reserve, instead of the dollar fiat, artificially embedded in a percepted dollar-standard !

OK guys, for the last time...the euro-currency is a fiat with another system (than the dollar) behind it. The euro wants to become associated with a Free euro-Gold market that trades Physically and NOT dollar-paperly . The WAG was NOT a dollar initiative but an euro-measure !
Euroland's financial media have never, ever bashed Gold in private possession ! On the contrary, all our banks do sell Gold, everywhere, anytime...and will continue to do so !

It was Euroland who demanded US-Goldreserves (Gold-Wealth) for their excess earned fiat-dollars (worthless paper)before Nixon closed the Gold window !

Any fiat-digit-system, for trade settlement, that tries to imitate some new form of gold-backing will always remain unworkable, managed, frauded, flawed !
Yes, we need enough political will to take that step to Free Gold ! This political will will reach enough critical mass when the dollar-system calf is is in the process of happening. Fixing a new reference-POG is non-sense. It is another attempt to keep the dollar-system alive. It is NOT a matter of choice between the dollar or the euro but only a matter of Free Physical Goldtrade that runs parallel with the currency/digit that is used for trade settlement. Free Gold, the Wealth-Standard, regardless of any currency/digit. Free-Gold that is everyones instrument to control all those who desire to control you !

That's why the dollar-system hates the euro-project, wich is perfectly understandable.

Cheers !

Black BladeCanadian Natural Gas Drilling Cut by Bad Weather and Labor Woes #10396706/02/03; 14:43:15


June 2 (Bloomberg) -- Bad weather and labor shortages are forcing Canadian companies such as Precision Drilling Corp. to sink fewer natural gas wells, worsening the shortage that has caused the price of the fuel to surge. ``We had 70 rigs ready to go to work two weeks ago'' and no place to send them because of the weather, said Hank Swartout, chief executive officer of Calgary, Alberta-based Precision, which has a total of 227 rigs. Output from western Canada, a region that supplies 20 percent of U.S. needs, may fall for the first time in 17 years and may lag behind forecasts made as recently as a few months ago. That could mean even higher prices next winter, forcing some industrial users to switch to other fuels or curtail production. About three-quarters of the growth in U.S. natural gas demand has been met by increases in Canadian production since the mid- 1980s, according to Kenneth Vollman, chairman of Canada's National Energy Board. In the last few years, Canada's output appears to be ``flattening out,'' he said.

Setbacks due to weather have been compounded by a shortage of crews, drillers said. Construction of the oil sands facility in Fort McMurray, Alberta, is drawing away skilled labor, as are projects in other countries. ``A lot of rigs only had two crews and some rigs didn't get out of the yard because they had no crews,'' said Zane Reiter, manager of corporate development at the Petroleum Services Association. Lack of labor ``probably shaved quite a few wells'' off the first quarter tally. Without enough skilled operators, drilling rigs can't be run safely, Precision's Swartout said.

Black Blade: No surprise as I have hammered away at this before. Worse yet is that drill rig activity is actually up in Canada over last year but no real production gains while storage lags at critical levels. The US is not much better off either as drill rig counts are woefully low in the face of the crisis. Today oil and gas prices are ticking higher but no substantial increase in rig activity. This will obviously hurt an already crippled US economy with higher energy costs.

Black BladeBuffett, Economists Say Current Account Deficit Threatens U.S. #10396806/02/03; 15:00:07


June 2 (Bloomberg) -- Economists such as Morgan Stanley & Co.'s Stephen Roach long have predicted that the rising U.S. current account deficit, the broadest measure of trade and net investment flows, would sour investors on U.S. assets. The widening gap would send the dollar into a tailspin and force the Federal Reserve to raise interest rates to keep capital coming into the U.S., Roach and others have said. With U.S. interest rates lower than those in Europe, and the dollar's 20 percent drop against the euro in the last year reducing the value of U.S. assets, investment from outside the U.S. has fallen. Berkshire Hathaway Inc. Chairman Warren Buffett and International Monetary Fund Chief Economist Kenneth Rogoff, also have warned that the record deficit is unsustainable. ``We are in a country that is buying more from the rest of the world than we're selling, and we're doing it on a big scale,'' Buffett told U.S. chief executive officers at a Microsoft Corp. gathering in May 21 in Redmond, Washington. ``Any other country in the world that did that on that scale would have seen greater currency depreciation already,'' he said. ``We have such a strong currency historically that there's been a delayed effect. But it's started to happen in the last year, and unless the underlying conditions change it's going to continue.''

Investment from abroad is key to financing that gap because the deficit can only be reduced by income from trade or capital flows. The U.S. needs to attract about $1.5 billion a day from abroad to finance the deficit, said Don Alexander, a currency strategist at Citigroup Private Bank in New York, with $166 billion in assets. Two-thirds of the increase in the current account gap last year stemmed from a rise in the U.S. trade deficit, which widened after exports sagged because of the weak world economy. At the same time, net investment income fell as receipts from abroad fell more rapidly than payments on foreign investments in the U.S. ``Our demand for foreign capital is increasing dramatically at a time when we can't provide the returns needed to attract more of it,'' Morgan Stanley's Roach said in an interview.

Black Blade: Moronic government officials aside, the dollar must weaken as there is absolutely nothing there to support it. Besides, to stimulate economic growth the Fed must provide massive liquidity and that translates into a weaker dollar and higher inflation. Something that the Fed does not want to do but must do. They have no other choice as they are out of bullets and they are surrounded on all sides.

Black BladeJob searches now averaging 20 weeks#10396906/02/03; 15:17:23


PRINCETON, N.J. - It takes just a few minutes for the sheet of ledger paper to complete its trip around the circle, long enough for 28 pairs of hands to log months of frustration on its ruled blue lines. Unemployed workers, struggling for traction in a stagnant labor market, are slogging through some of the longest job searches in 20 years. The time the average jobless worker remains unemployed stretched to nearly 20 weeks in April. That is up from about 12 weeks in early 2001, and is the longest since late 1983, according to the federal Bureau of Labor Statistics. Many searches take even longer. Nearly 22 percent of unemployed workers, 2 million people, have been out of a job more than six months. That is double the number of two years ago. About 13 percent have been out for a year or more.

Black Blade: This Friday we get the unemployment data for May. If I have time and the motivation I may dig into the BLS data and crunch the numbers for the alternative rate which sits somewhere between 10-12%. Oh yeah, the BLS is changing their statistical approach for unemployment yet again. This should be amusing if not totally bogus.

WaveriderVIP: DAILY GOLD MARKET REPORT #10397006/02/03; 15:56:51

"Gold appears to have not suffered any ill effects of the stronger U.S. dollar and a rallying equities market into the close of trading in the New York gold pit. Funds were seen buying into the close of the session as skepticism crept into the market about the president's "strong dollar policy" comments and less that stellar data from the ISM manufacturing index and rising oil (and natural gas) prices. Oil prices moved north of $30/bbl and natural gas prices stubbornly hold above $6/Mfc giving investors pause as higher energy costs tend to throw a "monkey wrench" into the economic growth engine."

Waverider: Thanks Black Blade, and congratulations to the essay contest winners!

misetich Fed's Parry:Repeats,U.S. Economy Still'Mired' in 'Soft Patch' Jun 2 / 15:30 EDT#10397106/02/03; 15:57:32


WASHINGTON (MktNews) - San Francisco Federal Reserve Bank President
Robert Parry, repeating Monday for the third time in a week his speech
about the U.S. economy still being in a "soft patch," chose to leave in
his comments that downside surprises would be more of a concern than
upside surprises.
"So long as this remains a jobless
recovery, it can weigh on consumer confidence and lead people to pull
back on spending."
He added, "Frankly, the longer growth has to depend on the housing
and auto sectors, the riskier the situation becomes."
"We're still likely to have a considerable amount of excess
capacity by the end of the year -- even with the generally anticipated
pickup in growth in the second half," he repeated. "That means the
already low inflation rate is likely to trend lower."
"With a lower inflation rate, it wouldn't take a very big standard
error of the forecast to come up with a small, but still worrisome,
possibility of deflation going forward," he said.

The auto industry is going through a "soft patch" and housing has began its descend -

The SM has raced up again - the Big Bad Bear waiting - as the 4th qtr priced in earnings will not materialize

All On Board The Gold Bull Express

misetichOil Surges Over $30 on Low Fuel Stocks #10397206/02/03; 16:14:23


NEW YORK (Reuters) - U.S. oil prices topped $30 a barrel for the first time in six weeks on Monday as the threat that the OPEC cartel will cut supplies again next week strengthened concern about low U.S. inventories
Coming in the week leading up to the start of the summer driving season, when U.S. demand for motor fuel peaks, dealers feared a potential price spike.

"With global inventory still at extremely low levels and particular concern over low product and crude oil inventory in the U.S., there is little obvious sign of any significant weakness," said Barclays Capital analyst Kevin Norrish.

Signs the Organization of the Petroleum Exporting Countries could be preparing to announce an output cut at a meeting next week have bolstered the price strength.

Venezuelan Oil Minister Rafael Ramirez said last week that the cartel might cut its ceiling by up to one million bpd at the June 11 meeting, but any decision hinges on the extent and speed of recovery of Iraq's battered oil industry.

Will oil prices, natural gas, housing costs etc. going higher should please the Feds "deflation" worry

All On Board The Gold Bull Express

Black BladeNewmont says half cash offer for hedges accepted #10397306/02/03; 16:18:41


NEW YORK, June 2 (Reuters) - Newmont Mining Corp. NEM.N , the world's largest gold producer, said Monday that almost half of its offer to pay 50 cents on the dollar for outstanding unprofitable gold sales contracts with its Australian mining subsidiary had been accepted by the hedge counterparties.

Black Blade: Looks like Newmont stuck it to the bankers. In the current economic environment the bankers and investment houses are taking a beating as companies are backing those who bankrolled operations into a corner. This has been especially true of energy companies since the Enron fallout. I would not be surprised if other miners with mine specific hedges were to renegotiate some contracts down the road. As the old saying goes, "owe the bank a little and you're in trouble – owe the bank a lot and the bank is in trouble". Just wait as the "weapons of financial mass destruction" (aka derivatives) blow up. "Interesting Times"

BTW, only caught a couple of medium sized "bows" this morning as the weather turned bad. Of course the only thing attracting the fish were "gold" colored Kastmasters. Maybe a good sign. A little "golden" fried trout on a bed of "golden" safron rice with a "golden" ale for dinner tonight.

Off to the gym!

misetichLow Rates Spur Average Home Prices Up #10397406/02/03; 16:21:49


NEW YORK - The average price of a U.S. home during the first quarter was 6.48 percent higher than in the year-ago period, a government agency said on Monday, spurred by mortgage rates at 45-year lows.

However, the climb in home prices slowed to its weakest quarterly pace in five years, the Office of Federal Housing Enterprise Oversight said. The OFHEO is a unit of the Office of Housing and Urban Development.

This could be an worrisome sign for the economy, which has relied on the housing sector for support while other areas, like manufacturing, have struggled.

Sir Greenspan does not see a housing bubble - No signs of "deflation " in housing, medical costs, either

All On Board The Gold Bull Express

R PowellBIS news#10397506/02/03; 16:24:17

I'm not sure if anyone is interested in downloading this type of information but thought maybe Belgian, Cobra, Randy, Michael or others might find some value here so I'll post them. As usual, they are in PDF form.

Your current news on phrase "gold(any word)" at a glance:

2 new document(s) found since 27.05.2003:

1. Capital flows in East Asia since the 1997 crisis - BIS Quarterly Review, part 5, June 2003 (30.05.2003 16:51)
Part 5 of "International banking and financial market developments" (BIS Quarterly Review), June 2003, by Robert N McCauley (PDF, 114967 bytes)

..and the Graduate School of International Studies at Seoul National University, 26?27 March. Triffin, Robert (1969): Gold and the dollar crisis, Yale University Press, New Haven. ... but there are risks to wider access to credit 56 B...

2. Derivatives markets - BIS Quarterly Review, part 4, June 2003 (30.05.2003 16:49)
Part 4 of "International banking and financial market developments" (BIS Quarterly Review), June 2003, by Serge Jeanneau (PDF, 138895 bytes)

..364 49 58 62 61 Options 1,556 1,561 1,828 1,944 150 147 181 194 D. 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 ... ... ......

misetichG8 - US $#10397606/02/03; 16:44:05


Bush and Chirac shook hands and had a courteous private meeting, but each stuck to his rival view of world order, and the U.S. leader left early without holding the customary news conference, leaving a sense of anticlimax among delegates.

In a surprise move, France announced late on Monday that all eight leaders had agreed, in response to the dollar's recent sharp fall, that currency stability was a key condition for growth and they would monitor market movements closely.

It appeared to be the strongest signal on currencies issued in the name of the G8 since central banks intervened jointly in September 2000 to support a weak euro.

But officials said the position on currencies, designed to calm market volatility after a 12 percent fall in the dollar against the euro this year, would not be put in writing.

Participants quoted Bush as saying he did not want a weak dollar and would not use the currency as an economic weapon.

Bush left a "day early" - interesting - and Chirac addresses US $ and currency instability -

The descent of the US will continue... gradually

All On Board The Gold Bull Express

Goldilox"Repuchase Agreements and the DOW"#10397706/02/03; 16:55:43

An interesting, if somewhat lengthy editorial on a perceived relationship between the FED Repos and the DOW over at Papluva's site. It starts with a description and some links to the FED to define RPs.

"Repuchase Agreements and the DOW", June 2,2003 by Michael Bolser


Interest rates are low and the FOMC talks of going lower, repurchase agreements rising geometrically as the MCDI keeps falling far below its 200-day moving average, the DOW is barely able to stay above 8,000 even with large and increasing RP support. One can see great trouble ahead even without factoring in the Middle East turmoil, a burgeoning Euro-centric economic coalition, oil producer threats to re-price their crude in Euros or any of the other traditional economic indicators that we know to be badly deteriorating. Previously effective RP utilization seems no longer effective.

Intervention in otherwise free markets historically leads to scarcity and falling liquidity. One need only look to the price control regime of Richard Nixon for examples of this type of government interventional failure. The penultimate failure in then Fed Chairman Arthur Burn?s price control regime was the forced closing of the gold window. Today the Fed seems rapidly headed towards a similar event.

CoBra(too)Newmonts Offer - re. Yandal#10397806/02/03; 16:57:02

Already 48% accepted.

Considering the offer was for 50 Cents on the Dollar on Yandal's hedge position, doesn't it highlight the weak position these counterparties may find themselves entangled in? (As an aside, such things tend to happen, when the messianic message as Joe Gutnik claimed takes priority over common or business opr even ethical sense).

IMO, this tough take it or leave it stance of NEM might mark the beginning of the demise of gold hedging practises for both producers and bullion banks - while the de-hedging of producer forwards have been further accelerating in the first quarter.

Lastly the Dollar enjoyed only the briefest of all dead cat bounces - thanks to the briefest statements of GWB at the G8 Evian meetings ... and POO will be affordable at over 30 bucks again? Sure, against €' and au.

The call to arms, eh? GOLD becomes more distinct by the day - cb2

GoldiloxG-8 reporting (Forbes #103976 and BBC #103959)#10397906/02/03; 17:06:25

@ misetich, et al:

Forbes offers a much less upbeat description of the meetings than BBC. I wonder if anything can be read into that.

i.e., the Brits might be a little more anxious for everyone to "get along" than the US audience, many of whom are still talking boycotting Peugeot and French wines.

R PowellSocrates964#10398006/02/03; 17:20:44

Dollar carry trade ?

From 103951....

"One idea that interests me is 'dollar leasing'. Just as central banks purportedly lease out gold while keeping it on their books as an asset, I wonder if they could not do the same with dollars - i.e. keep dollars on their books as assets that have actually been sold into the market. This would be a covert way of getting rid of dollar holdings while maintaining appearances."

Rich: If the purchasing power of the dollar is declining, then wouldn't leasing or borrowing dollars to use immediately to purchase something that is appreciating in value make good sense? That something could be converted back into a currency in the future after the currency decline abates or when fiat is again needed to convert (immediately if the currency purchasing power is still declining) the purchasing power into another form, as when/if you wanted to convert gold into an equivalent value of silver. Why not call this a dollar-carry-trade? Question... if someone were to offer you a huge sum of money (currency) to borrow or "lease" for say 2%/year interest, would you take it ? (;>).

misetichDallas Fed eyes long-term debt in deflation #10398106/02/03; 17:24:04


WASHINGTON, May 29 (Reuters) - Buying longer-term government debt could prove to be the Federal Reserve's best anti-deflation tool if it ran out of room to cut interest rates, but such a strategy is not without problems, researchers at the Dallas Federal Reserve Bank said.
Because of the market stress a low overnight rate might cause, many economists on Wall Street think the Fed could turn to so-called unconventional policy tools once the rate reached 0.75 percentage point if further stimulus were needed.

Dallas Fed Research Director Harvey Rosenblum has said Fed policymakers would discuss "unconventional" tools at their next meeting on June 24-25.
"In the event it must act alone, the Fed's best policy option is probably open-market purchases of longer-term government bonds," they said. The Fed currently conducts open market operations in short-term securities only.

They warn, however, that calibrating such operations could prove difficult.

"No one, we believe, has a good quantitative sense of the mechanics of this strategy -- that is, what size operations are needed to secure a given stimulus?" Koenig and Dolmas said.

"If standard policy options are exhausted, the Fed's quiver is by no means empty. But the arrows that remain are less familiar and, perhaps, not quite as straight as the ones that have already been fired."

One of the other measures they said the Fed could pursue would be to substantially weaken the dollar.

But they cautioned that a policy of foreign exchange intervention would, in effect, be conducting a monetary contraction in the economies of U.S. trading partners.

"If the foreign central bank was attempting to pursue a neutral or expansionary policy, the Fed's action might generate some consternation or even a policy response," they warned.

"unconvential means" - uncharted territory - fasten your seatbelts - its going be a hot golden summer

Its desperation time at the Fed

All On Board The Gold Bull Express

R PowellBelgian#10398206/02/03; 17:33:53

My simple pragmatic, trader-type mind is not always fired up enough to fully comprehend all your words, although I often try. A total economic understanding or as near as I can get to that, is much more difficult than trading.

After reading your 103966, I found myself thinking or postulating from your thoughts that..?...?.. with Free Physical Gold ... the amount (say number of ounces or weight but NOT an amount in dollars) of gold held as a Euro reserve...does NOT need to be adjusted even if more Euros are created.
Am I catching on here or am I way off as usual?

Cavan ManThat dog (french poodle) might hunt?#10398306/02/03; 17:35:31

Excerpted from "The Straits Times"

The French leader was more reserved, avoiding any such direct personal praise for Mr Bush, but expressing total support for his efforts to bring peace to the Middle East.

Their 25-minute meeting, which the White House billed as a 'courtesy call', was one of the most scrutinised encounters at this year's summit.

It followed on their brief exchanges on Sunday, characterised by a cool handshake, stock smiles for the press and a Bush gift of three books on Native American culture.

Despite the upbeat signs, many areas for disagreement remain - notably on trade, agriculture and managing the post-Cold War world.

Mr Chirac also champions a vision of 'a multipolar world', where US dominance is kept in check by Europe and emerging powers such as China and India.

Some observers believe that US-French ties may not recover fully until both leaders leave office.

'It would be very dangerous to believe that relations are back on track now,' said Mr Dominique Moisi of the French Institute for International Relations.

'What we are witnessing is not a return to friendly collaboration, but an attempt on both sides to behave in a correct manner.

'You do not recreate trust just like that. They were very close to divorce

GoldiloxFCC adopts Media ownership rules change#10398406/02/03; 17:51:08


NEW YORK (CNN/Money) - The Federal Communications Commission narrowly approved new media ownership rules Monday, allowing television broadcasters to expand their reach, despite fears the move may reduce the variety of viewpoints available to consumers.

The Republican-led government agency voted 3-2 to allow the broadcast networks to own television stations that reach a combined 45 percent of the national audience, up from 35 percent.

. . . "I have heard the concerns expressed by the public about excessive consolidation," FCC Chairman Michael Powell said ahead of the vote. "They have introduced a note of caution in the choices we have made."

"Keeping the rules exactly as they are, as some so stridently suggest, was not a viable option," Powell added. "Without today's surgery, the rules will assuredly meet a swift death."


I wonder what he meant by "swift death"? That's a very strange way to talk about administering a public trust. Maybe two viewpoints in these troubled times is just one too many.

3-to-2, that sure seems like an awfully large committee to argue such a minor issue like this . . . probably two politicians, two "industry experts" and Colin Powell's kid casting the deciding vote. Hey, Rupert Murdoch did such a fine job disseminating war info and pretending to be an all-American, we should let him run the rest of the US media, as well. If you want public information, go to C-SPAN and take a nap.

"There are laws to protect the freedom of the press's speech, but none that are worth anything to protect the people from the press."
--Mark Twain

P.S. By the way, be extra grateful for this fine forum and our Hosts, as political dissent may soon find its outlets more and more difficult to obtain.

misetichGoldilox (06/02/03; 17:06:25MT - msg#: 103979)#10398506/02/03; 17:51:37

You wrote

Forbes offers a much less upbeat description of the meetings than BBC. I wonder if anything can be read into that.

i.e., the Brits might be a little more anxious for everyone to "get along" than the US audience, many of whom are still talking boycotting Peugeot and French wines.


Bush left a day earlier - very unusual - Chirac unprecendent comments on US $ seems to imply Europe is concerned US is using devaluation as a tool to 1) force Europe to cut IR and lure investments to US or at least stop the exodus as US investments would be rendered "attractive" due to currency flactuation

It will be interesting if ECB will cut IR at all - I would guess they will not give what markets expect (1/2%) and probably will cut 1/4 or not at all

The US vision is for Europe to toe the line and it won't happen - Bush has painted himself in the corner with his " you are with us or against us" syndrome

Gold investors will benefit from the oncoming caos

GoldiloxG-8 Press#10398606/02/03; 18:01:34

@ misetich, (and Cavan Man):

Interesting observation. I'm also glad that Cavan Man found an even more diverse opinion from "the Straits Times". I don't pretend to know how the leaders are actually reacting, but I was intrigued by the different media slants on opposing sides of The Pond.

I'm a firm believer in the adage that one can tell a politician is lying based on the movement of his lips.

misetichMexico May Sell Euro Bonds Via Citigroup, Deutsche #10398706/02/03; 18:17:35


June 2 (Bloomberg) -- Mexico may sell its first euro- denominated bonds in more than two years as early as this week as the European currency's gain against the dollar spurs demand.

Mexico has approached investors about a sale of 10-year bonds through Citigroup Inc. and Deutsche Bank AG, said David Dowsett, who says he would buy some of the bonds for the $500 million emerging-market debt fund he helps manage at BlueBay Asset Management in London. The sale would be for about 1 billion euros ($1.2 billion), Dowsett said.

Demand among some European investors for euro-denominated assets has risen amid the common currency's 11.4 percent surge against the dollar this year. Mexico typically taps international capital markets in dollars and has sold $5.5 billion of bonds denominated in the U.S. currency in three sales so far this year.

Changing times

All On Board The Gold Bull Express

Aristotlesocrates964 in msg#103951#10398806/02/03; 18:21:33

"One idea that interests me is 'dollar leasing'. Just as central banks purportedly lease out gold while keeping it on their books as an asset, I wonder if they could not do the same with dollars - i.e. keep dollars on their books as assets that have actually been sold into the market. This would be a covert way of getting rid of dollar holdings while maintaining appearances."

Ho HOY my boy!! You're a good thinker and I am not, so let's see if we can pound this answer out, Ari-style!

Whaddaya think a foreign-held U.S. Treasury note represents? CBs hold a lotta them, yes? That's my contribution. I will purport to know nothing on this matter until you instruct me under your gentle whip.


In the meanwhile...

Gold. Get you some. --- Aristotle

GoldiloxDollar Carry Trade#10398906/02/03; 18:26:58

@ARI, Socrates

If they adopt the C.R.A.P. accounting practices outlined on Papluva's site, I guess anything can be carried on the books after "loaning out" by using "goodwill" as colateral.

GoldiloxDaily Chart Timing#10399006/02/03; 18:36:41

Interestingly, today's Au rally preceded the SM selloff by about two hours. Any corelation?

Possible Trader scenarios:

1) Gold is going up again, so I better get me some Gold and take some profits from the wall paper investments.

2) GWB is adding no new confidence to the $$ by flapping his yap in Europe, so I expect the $$ to resume its Olympic downhill slope.

3) BB has pulled GWB's covers again so I better listen up and get me some Gold!

4. All of the above

Cavan ManWarnings 2 + years ago (here I think)#10399106/02/03; 18:56:06

Chickens will roost.

IBM Says SEC Probing Its Accounting

Monday, June 2, 2003; 6:50 PM

By Duncan Martell

SAN FRANCISCO (Reuters) - International Business Machines Corp. on Monday said that the U.S. Securities and Exchange Commission had begun a formal investigation of how the world's largest computer company accounted for some revenue in 2000 and 2001.

Armonk, New York-based IBM said in a statement that it "believes the investigation arose from a separate SEC investigation of a customer of IBM's Retail Store Solutions unit," which sells electronic cash registers and other point-of-sale products.

IBM shares fell almost 3 percent on electronic trading network Instinet after the announcement, which raised the specter of the accounting scandals of Enron, WorldCom and others that have undermined investor confidence.

"This is big news because it goes back to the old accounting scandals that have shaken investor confidence, starting with Enron," said Burton Schlichter, senior market analyst with Lind-Waldock & Co., a division of Refco LLC.

R PowellIBM accounting#10399206/02/03; 19:29:05

A plumber to comment on the electrical wiring?

Thanks Cavan Man for the news (103991). It did not surprise me but what did surprise me was the comment below,

"This is big news because it goes back to the old accounting scandals that have shaken investor confidence, starting with Enron," said Burton Schlichter, senior market analyst with Lind-Waldock & Co., a division of Refco LLC."

I'm surprised that Reuters News quoted someone from Lind-Waldock instead of a stockbroker. Refco bought Lind-Waldock a few years ago (much to my chagrin) but both are commodities brokers, not stock brokers. ??

AristotleGoldilox assets#10399306/02/03; 19:34:53

At the risk of offending Socrates with my premature comments, let me remind you of some standard banking ops.

VAULT CASH (i.e., "pocket money" if you will) is tallied on the asset side of a bank's ledger. If some of this cash is lent (or "leased") then the corresponding LOAN (mortgages, U.S. Treasury notes, etc.) resides in its place on the asset side of the ledger. Standard stuff.

Look at March for an illustrative sketch on the way the world has worked for many years -- the continuation of which in good faith is on borrowed time. The United States in March spent approximately $126.3 billion dollars to import goods and services while earning only a counterbalancing $82.8 billion on its exports. The difference being our monthly representative trade deficit of $43.5 billion.

Foreigner companies, with the CBs representing the ultimate decision makers, can choose to hold this excess in dollars or perhaps more logically their native currency. To the extent that the foreign companies want local currency to pay their workers and domestic bills, these $43.5 billion in trade earnings will be exchanged for their own domestic currency.

Then, depending on its various motivations of price stability versus export advantage, a foreign central bank may choose to absorb these dollars into its pile of currency reserves (asset side of ledger) and newly emit a corresponding value of domestic national currency. In this circumstance, it is a subsequential no-brainer to turn these sterile dollar assets into interest bearing assets by lending them back to the United States Government as a loan represented in the form of U.S. Treasury notes.

Of course, the international governments and CBs of the world may adopt a policy shift whereby "enough is enough!" and they abandon their longtime support of U.S. "deficits without tears" by allowing those excess trade dollars to either bid directly for domestic currency on the forex markets of the world, or else bid for Gold in the event that the CBs would like to increase their own money supply while bolstering their reserves with non-national type assets.

We've all gotta get this through our heads. As we move to the euro-styled system, we are not in for merely *more of the same old same old* nationally dominated reserve structure. After all, what would be the point of that??? A lot of effort for no material improvement??? I don't think so! The direction is clear...

Gold. Catch the wave of the future. --- Aristotle

Ray PattenBelgium...#10399406/02/03; 19:55:25

You said, "all our banks do sell Gold everywhere, anytime.. and will continue to do so."

We have read on this site over the years that it is very hard to buy physical Gold in Europe. All you can buy is certificates.

Are you telling us that it just isn't so?

glennh10Parasite and Host#10399506/02/03; 20:15:31

The article referenced by Misetich (103939), "U.S. Debt in Asia Has Its Costs", began with an interesting quote from Keynes, "If you owe the bank 100 pounds, you're the one with the problem. But if you owe a million pounds, the bank's the one with the problem."

At the G8, GWB said that he supports a "strong dollar". The other leaders also prefer a strong dollar (as unrealistic as it is), insofar as a strong dollar protects their precious export market. Well, as the U.S. debt grows ever greater, the debt burden at some point shifts, as Keynes' quote states. As it expands further into the stratosphere, the debt owed by the U.S. changes from being a U.S. burden to being used as a threat or a weapon. At the G8, it seems, a plan involving "mutual advantage" is being sought between the debtor (U.S.) and the creditor (exporting nations), for the presumed benefit of both sides. This is the exact type of arrangement between debtor/creditor that follows from bankruptcy.
On the Financial Sense Newshour (5/31), Jim Puplava and David Morgan discussed the Fed's considering imposing a "carry tax" on dollars that are "held" rather than "spent". Morgan went on to describe how that's the type of spending behavior that follows with the loss of purchasing power. Years ago (sometime after 8/15/71), the U.S. was described as being bankrupt. Nobody at the G8 dared use that term. But if one connects the various dots that get uncovered from time to time, a not-so-wholesome economic picture emerges quite clearly. As it is so aptly said, "interesting times".

GoldiloxAnother opinion on the FCC decision to relax media ownership limits#10399606/02/03; 20:23:35,3604,968375,00.html

"Now Dissent is Immoral", Gary Younge, The Guargian, 6/2/03


Where America does differ (from the UK) is in the nature of [the media] industry and the war it is engaged in. The American media industry is dominated by just a few companies. AOL Time Warner, to name but one example, owns among many other things, Time magazine, Fortune, Life, Sports Illustrated, CNN, Comedy Central, Warner Brothers Pictures and Black Entertainment Television.

With the the Federal Communications Commission, under Michael Powell (son of Secretary of State Colin Powell), set to relax ownership rules later this month [today, in fact], this consolidation and the lack of choice that goes with it will get worse before it gets better. And with a war that is endless against a foe that is stateless (terror has no nationality), invisible (it could be anyone) and ubiquitous (they could be anywhere), the potential for these media distortions to become both pervasive and permanent is very real indeed.


Certainly a more perilous warning about the media trend than the CNN post, but I would expect no less from the Guardian. However, if we allow dissent to be "demonized", gold ownership may come face-to-face with a desperate battle to save the FIAT currency. Anyone owning gold who is not on the "PTB A-Team" could be easily labeled "enemies of the $institution." I saw an article about Buffett and Soros last week entitled "Short Selling is not Treason". The idea that this even needs to be published is discomforting.

Perhaps I am sounding alarmist, but the latest erosions of the Bill of Rights also have some very strong historical analogues, some only a single generation past.

Gold, get you some and bury it deep!

Dollar Bill*>*#10399706/02/03; 20:24:06

Greetings Aristotle,
I have another post for you, but this one is about this comment in the post below.

"the international governments and CBs of the world may adopt a policy shift whereby "enough is enough!" and they abandon their longtime support of U.S. "deficits without tears" by allowing those excess trade dollars to either bid directly for domestic currency on the forex markets of the world, or else bid for Gold in the event that the CBs would like to increase their own money supply while bolstering their reserves with non-national type assets"

Isnt it a key issue for a country to work for a lower currency for trade reasons?
How to replace the US as deficeit nation? If the US does not play this role, how do all the various nations handle
thier imbalances? The asian idea floated here today sounds
minor league because the main trade beween those nations is with the US. I am looking for a bridge to another way, but
I cannot see it.
Taking down the US is not the answer, I am guessing that some joint CB agreement to share the ponzi scheme is the only way to avoid global depression.

Chirac is low on details on how to make this "multipolar world". MK has on his site a quote from DeGaulle, 1965.
Nice idea, but like Chirac, low on details on how to make it work.
No one here or elsewhere ever mentions that the strong dollar policy is not criticized when Bush mentions it now or earlier. The other nations prefer it.
They are happy that the US plays deficeit nation for the global benefit. They are ok that the US gets itself into
fantastic levels of debt. By that I mean that it has been to thier advantage also.
What is Chirac thinking? The US should play strong dollar till the EU can take over and stick it to the US?
And then the EU can run up thier own deficeits till the Chinese take over?
MK says he thinks the very top guys are cooperateing.
Above chirac/bush levels.
That would get me again thinking that the future path is
cooperative CB embrace of the infinite debt world where CB's will pour money as they see fit.

If not that, then a much uglier world system. A system that no one is articulating yet but they are trying. This multipolar mush.

just guessing.

GoldiloxStrong Dollar#10399806/02/03; 20:52:05

@Dollar Bill and ARI:

I think I agree in principle with what you are saying. given the cross border nature of manufacturing trade (systems made of sub-systems, made of parts, made of componentry, etc.). A large manufactured article (like a vehicle) has origins in many countries. The more imbalanced (volatile) currency exchanges are, the greater the difficulty for both parties to conduct the many transactions necessary to complete the manufacture and sale of the finished goods. i.e., even a company as American as Harley-Davidson is buying engine technology from Porsche. There are few industries that are not multi-national in today's market

It seems too simplistic to pick an outright winner in the manufacturing arena based on currency exchange. The oposite side of this is that customers face the reverse challenge of manufacturers in that they must buy goods at an inverse exchange imbalance to the sale. Countries exporting natural resources have a less complex algorithm of exchange to deal with, except that they often depend on customers for the technology to deliver the resource, so it is not completely unilateral.

In summary, currency exchange imbalances alone do not hinder trade as much as currency volitility, and trade imbalance eventually affects volitility, as we are currently witnessing. The biggest battle I see is not about exchange rates, but more about exchange reserves. The US dollar has been hugely proliferated as a result of being the world's reserve currency. Loss of that status means a glut of $$ in the marketplace as some international communities decide to change their preference for type of reserves. Herein lies a large impetus for more volitility.

Dollar Bill*>*#10399906/02/03; 21:29:39

Thanks for that sharp insight Goldilox.
I was thinking as I walked the dog, if the Euro actually had a decent gold backing, todays posts indicate otherwise,
The slogan on thier fiat could be "In Gold We Trust"

Wouldnt a more gold system quickly work to the advantage of China?

If the EU did go the route of a gold tie in, wouldnt those dollars awash in the system, includeing all the more that the fed could just print up electronically in a second, just make mincemeat out of that effort on day one?
Arent we stuck?
Married to the buck?
Till death do we........and all that?
Dreams of multipolar divorce court will just make us all poorer?
Arent the Arabs, and Persians, (iran), stuck also?
Their countries are big welfare states. A global depression will wack them hard.
The threat of disturbing the system will probably keep all the players in line.
mahathir and others bleating about whats "fair" or whats
"muslim" will be on the sidelines while the big players
basically get back in line.
Politicians in russia, france, germany may grouse and stir up agitation for change, but the Central Bankers will
probably not want instability. Will not take any big leaps
out of the present system.
I am guessing that the real big currency flows are heavily controlled or able to be controlled when needed.
Again, just guessing.

AristotleThoughts for Dollar Bill#10400006/02/03; 21:43:00

"Isn't it a key issue for a country to work for a lower currency for trade reasons?"

Thanks for posing the inquiry.

On your foremost point, "isn't it a key issue for a country to work for a lower currency for trade reasons?" the response I would offer is this -- sounds about right, !!BUT!! not carved in stone!

It is a political reality that governments find great comfort in a fully employed citizenry. This is true even at the cost to national welfare of spoiling the population's savings (through beggar-thy-neighbor type currency depreciation.) But there's a political limit (citizen tolerance) to the acceptible level cost incurred. That's to say, a trade advantage to support full employment through currency depreciation will not be tolerated or politically acceptible to the degree where the lost purchasing power effectively impoverishes the population. If many citizens are unemployed they are likely to riot (vote officials out of office) because they have no purchasing power (in the form of income;) and by a similar stroke of the brush even the fully employed are likely to fuss if their currency noticeably collapes and their savings and salaries lose significant purchasing power. Think Asian Contagion or Argentina on that one.

Ultimately, the various governmental monetary authorities must strike a fine balance between exporting their nation's goods and their race to the bottom regarding currency valuation.

Further evidence that your hypothesis isn't completely accurate can be found in a few examples to the contrary. Certainly, it can be argued that the United States was not among the *universal* list of all countries seeking a lower currency. Before it structurally failed in its effort a year and a half ago, Argentina tried to halt its long trending currency decline by pegging for a whole decade to the U.S. dollar. How about the Hong Kong dollar peg as another example to halt a race to the bottom? And hey!, how about all those wily European dudes who valiantly defended various exchange rate mechanisms among each other until finally forming a currency union in the form of the modern euro? Not *every* nation, apparently, thinks low and lower is the short path to righteousness. Think, therefore, we can chalk up some of that perception of yours as coming from observations and residue of a complex international league of semi-independents all struggling together to learn and evolve out of infancy? That's my shorthand explanation for that bit of "conventional wisdom" folklore.

When you then pose this question:

"How to replace the US as deficit nation? If the US does not play this role, how do all the various nations handle their imbalances?"

it naturally leads me to this following response.

For every nation to complacently continue exporting net wealth for the primary benefit of the United States seems to me to be the most unnatural state of affairs. And yet, if you can tacitly accept the U.S. as a national example of chronic imbalance (deficit) why can't you as easily accept an international move toward a more level playing field in which the imbalances among all the world's nations may shift around from temporal supply to deficit? Implement a new system where you set physical Gold at the center of the international reserve structure and you'll take a huge step toward eliminating the longtime exorbitant privilege held by the U.S.

Why is that proposed *strange* new world order any harder to swallow than what we actually witnessed over the past thirty years (++) with U.S. dollar hegemony?

The world *does* go 'round and 'round...

Gold. Get you some. --- Aristotle

Black BladeMarket Wrap Up – Puplava#10400106/02/03; 21:46:52


The Carry Tax Cometh?

Not to worry. The Fed is also considering unconventional means if money velocity shrinks. Fed senior vice president Marvin Goodfriend of the Richmond Federal Reserve branch first proposed a study of implementing a "carry tax." This tax would be imposed on cash if consumers don't spend the money as fast as the government wants it to. Essentially this tax would be designed to eliminate the problem of zero-bound interest rates. The tax would lower the value of the currency the longer it is held without making a transaction. In effect, it becomes a negative interest rate, which punishes cash holders for preferring to hold on to their cash. It would be designed to eliminate the Japanese problem where consumers and investors have preferred to hold on to cash as their assets deflated in the stock and real estate markets.

In my opinion, besides the constitutional problems this would present, it would most assuredly backfire. As the government continues to depreciate the currency, implementing a carry tax would force investors and savers into "things" as they see the value of their assets depreciate such as paper assets and real estate and the value of things they need go up in costs. People would simply put their money into "things" and avoid paper. The most valuable asset under these conditions would be the only real money that has ever existed throughout history: silver and gold.

We may soon be revisiting history as the alchemist take us back to the days of John Law, something I never thought I would see. However, it looks even more likely in the days ahead more of which will be written about in the future.

Black Blade: Unconventional methods to stave off the coming financial disaster. This is "interesting" reading in tonight's article. Definitely worth reading! We already know that the Fed is desperate after 12 rate cuts that did absolutely nothing and the problems just pile up. This debt ridden nation is fast approaching the end of the line and if foreign investors bail, then the dollar craps out, while on the other hand as debt piles up and if US investors bail, then the dollar craps out. Quite a catch-22 we got here. The Fed is outta bullets and all that's really left is to push for rapid massive inflation but even that is a hard pill to swallow. "Interesting Times" indeed!

Dollar Bill*>*#10400206/02/03; 21:56:12

Hate to make an email type post, give me couple days to respond, have to mull.

Black BladeRising retail inventories create headaches#10400306/02/03; 22:02:39

With below normal temperatures and the war in Iraq stifling consumer demand, retailers are saddled with an oversupply of merchandise.


Discounts will be perhaps most generous in apparel, where inventory growth -- up 8 percent -- was higher than a 2.9 percent sales gain in the first quarter, according to Slater's estimates. That marks the first time in at least a decade that inventory growth is higher than sales growth in apparel, he said. The inventory buildup is extending to other areas including electronics and home furnishings, said Frank Badillo, senior retail economist at Retail Forward, a consulting firm in Columbus, Ohio. In March, it took 1.6 months to sell merchandise overall, up from 1.54 months a year earlier and continuing a pattern of inventory buildup since last October, according to the Commerce Department.

Black Blade: Consumers are tapped out and not spending – who can blame them? People are worried about jobs and the economy. Costs are rising and necessities come first, and many now find themselves stuck deep in debt and are struggling to meet obligations after years of spending like drunken sailors. To make matters worse many have mortgaged their future by risking the family home to keep spending. It's going to get very 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 nonperishable food and basic necessities storage program.

Black BladePostwar oil prices flowing higher than analysts predicted#10400406/02/03; 22:15:48

Lower exploration levels partly to blame


What happened to the widely-predicted post-Iraq slump in crude oil prices? Back in early March, before the launch of the U.S.-led campaign to topple Saddam Hussein, oil prices rocketed to $37-$38 (U.S.) a barrel. Everyone knew those lofty prices weren't sustainable, and the flat performance of many energy stocks reflected that. Most analysts predicted crude oil prices would quickly fall to $23-$24 a barrel once the war ended. Some said prices could slump all the way to $18.

Boy, were they wrong.

Falling U.S. crude oil inventories and recent terrorist attacks in Saudi Arabia are two factors behind the latest run-up. Now, with the peak summer driving season already underway, some say oil prices could cling to the $30 level for months to come. Meanwhile, North American natural gas prices have stayed strong, closing Friday at $6.25 per MMBtu (million British thermal units) on NYMEX, $1 above the level of early May. Gas storage levels remain low and some analysts predict North American production capacity will drop this year, setting the stage for another price spike next winter.

Certainly the energy analysts at Merrill Lynch are convinced that the era of cheap oil is finished. In a 40-page report issued last Thursday, Merrill Lynch says major energy stocks are poised for their best run since the 1970s. Merrill Lynch is forecasting an average oil price of $28.50 a barrel for 2003 and a "normalized" price of $24 a barrel for 2004. "While there is a lot of noise as to why oil prices should eventually decline to $20 per barrel, the cold hard facts and analysis suggest that the normalized oil price is moving higher, not lower," Merrill Lynch says. At the same time, the number of geologists and other technical personnel in the upstream end of the business has plunged by half since 1982. So even though oil producers are awash in cash, they won't have the ability to quickly ramp up exploration and development, the report says.

Black Blade: yeah, I know and I am not one bit surprised either. ;-)

Black BladeThe Nation's Next Energy Crisis Won't Be At Corner Gas Station#10400506/02/03; 23:09:55


In the 1990s, natural gas was hailed as the growth fuel of the future. It was relatively cheap, burned cleanly and polluted less. Power plants that used the fuel were easy to build with reliable construction schedules. But it's become apparent that the early hosannas extolling the wonders of natural gas were overblown. Prices are now about $6 per million British thermal units (Btus), up from an average price of $2 in the 1990s. On May 21, Federal Reserve Chairman Alan Greenspan called attention to the problem in his testimony before Congress. "I'm quite surprised at how little attention the natural gas problem has been getting," Greenspan said. He went on to describe the issue as "very serious." Greenspan noted that, in addition to electricity generation, industry has found "myriad new uses for natural gas."

Even before Greenspan's comments, there were warnings from industrial users of natural gas, like the American Chemistry Council, which in February called on the government to take immediate measures to avoid a supply crisis. And in May, Energy Secretary Spencer Abraham called for a national summit. Greenspan said the reasons for the tight supplies were a "colder-than-average winter," the country's "limited capacity to import liquefied natural gas" and the failure of increased drilling to raise production. Greenspan also remarked on the contradictory federal policy toward natural gas. "If on the one hand we have encouraged, as we have, very significant growth in domestic demand for natural gas - but are very readily constrained by our ability to increase supply - then something has got to give, and what is giving, of course, is price," he said.

Said Jewell: "What he meant by that is that federal policy encourages consumption of natural gas, particularly in the electric power sector. At the same time, federal policy becomes more restrictive and more limiting as to where we can drill for natural gas." While the number of rigs drilling for natural gas has grown - tripling over the last 15 years - production has remained level since 1994 at about 19 tcf a year. There are places in the U.S. to get more gas - off the coasts of California and Florida and in areas of the Rocky Mountains - but they're off-limits, Jewell says. It's not just federal policy, he said, "It's state policy and concerns of the public that are limiting the areas we can drill." The natural gas industry's failure to meet demand is "not necessarily for a lack of effort," Jewell said. "They do drill more. The technology is improving. But it seems they're running faster and harder and making no progress."

Black Blade: A fairly good article that cuts to the chase and outlines the current NatGas supply problem. Even if we are somehow lucky enough to squeak by this year, the long term problem remains that there are simply not enough drill rigs in existence, land access remain a delicate issue, permitting is often too slow to prevent repeated crises, and infrastructure is woefully inadequate to get supply to where it's needed. This year will likely be just the first of many with low NatGas supply while demand continues to grow.

Bull MooseOil & Gas Personnel#10400606/02/03; 23:40:27

Merrill Lynch says 50% of seasoned personnel have left the Oil industry since 1982. That figure is absurdly low. As one of those seasoned persons, I know that since 1986 the people I knew in the industry has dwindled to less than 25%. These are the people with many years of experience like my self that have permanently left the industry. You cannot ramp up exploration quickly without those people who have the hands on experience. There is no body of memory and experience to avoid trouble and know where the secrets of the underground lay hidden. It takes years to develop that kind of experience and body of memory.
BelgianFREE GOLD#1040076/3/03; 01:09:58

@ Rich : Euroland's goldreserves (ECB+National banks) versus their dollarreserves :
The bulk of those dollar-reserves will have to be written off as none of these mega-piles of dollars can possibly be exchanged for goods ! We don't need those dollarreserves anymore, because we have our own euroreserve NOW !
The euro-project want to see a compensation for the total loss on these accumulated dollarreserves. That compensation is the permanent Gold-Revaluation, only possible when the old dollar papergoldmarket dies and is replaced with the Free Physical euro Goldmarket.

Euroland's goldreserves valued in euro (rising in price) and compensating for US$-reserves, booked at zero purchasing capacity.

A Free Goldmarket means that "Physical" trade of Gold will almost totally replace the dollar-paper-goldcontract-market wich has been containing Gold, up until now !
Individuals, corporations and nation states will consolidate their "wealth" (surplusses) in Physical Gold in possession as a temporary store of wealth. When you need fiat, just sell your (taxed) physical Gold on the Free euro Goldmarket for euro and settle your trade with it.

The whole world is going to like this ! The dollar-reserve out and Physical Gold in.

@ Ray Patten : Yes Sir, ALL small fish do get their Physical Gold in Possession, within 3 days ! This tiny amount of Physical (investment-Wealth) Bullion is guaranteed for each and every individual that desires to hold it. To make this possible, Gold Possession should NOT be promoted (not even suggested) for the time being !!!
This attitude will change 180° as soon as a euro-Free Goldmarket is in place after the funeral of the present dollar-paper-goldmarket.

@ ALL : I would like to learn "why" there is almost zero interest, on this forum, in what a "Free Goldmarket" could mean ? TIA.

AristotleSome "why" guesses of my own for Belgian#1040086/3/03; 02:36:45

I think one of the reasons is perhaps relatively few people understand the concept. I don't mean to come across with an "us" and "them" vibe, but lets face it -- I've noticed a whole lotta "them" passing through have said they found FOA's Gold Trail to be cryptic. A sign that they don't/can't yet quite grasp the concept of Free Gold as a full-bodied property.

Howzabout the subset group of "them" that are actually belligerent about it all and suggest that FOA has been purposefully and unnecessarily cryptic. ha HA! Truth is, FOA laid out the whole *WHOLE* thing, and frankly, I think he was as clear as was humanly possible. That group of "them" is the most hopeless because they don't even begin to appreciate how truly complex the *whole* subject is, trying to blame their own shortcoming as if it were the fault of another. They don't even try to come up to speed.

Then there's the group that can't fathom that a market's low current price for something (relative to all other things) might not even closely portray that item's relative value seen at a later point in time. Poisonous plutonium to a man with a stone age mind will always be priced worthless when he can't fathom a new age of nuclear energy.

Of course, there's always that group of addicts playing their leveraged games who reject any and all visions of a world where they can't get their gambling fix from the paper world of Gold fakery or where bankrupted counterparty majorities deny them (the minority) their longfought jackpot.

Then there's probably a final set of silent people around here who do understand Free Gold, but are probably reluctant to allow themselves to accept that they (yes, "hapless little ol' them") may indeed be on the threshold of a once-in-a-lifetime achievement in wealth transfer. Too heady and too scary to even imagine! How many dare not whisper to the night, "What if I, too, were suddenly wealthy?!!" for fear that they will once again, and always, wake up to face the same poor and disappointed soul in the morning mirror? Better to leave the "wild dreaming" to other less practical men.

Like you, I'd like to see this latter group put their scepticism aside and try to paint us a picture of their own little corner of the world as seen through the lens of an in-place-and-fully-functioning Free Gold market. What would change? What would stay the same? Would you be able to cope with the change?

Good questions for everyone to allow themselves to ponder aloud for mutual enlightenment.

Gold. Get you some. --- Aristotle

BelgianLBMA - conference - Lisbon Portugal#1040096/3/03; 02:52:25

I do like the "outspoken" - "blatant" - "demonstrative" - "public" , ABSOLUTE negativism on Gold's future, expressed/organized by LBMA in particular ! How perfect it is !

Yep, a gold...PAPER gold conference exactly in a country (Portugal) that brags with its goldreserve sales, present (90 tonnes) and future (560 tonnes) !!! Perfect ! Sickening perfect !

Papergold feels, sees, experiences...the "glowing" breath of physical gold-accumulation, worldwide ! Clown on duty is Kazakstan. Ridicule Gold, further, in a subtle way...anyway...if you can gentlemens !?

And BTW, promote some more creative book-keeping at IBM and other Big blue peers and shout Allelujha for that dollar-carry tax idea ! Why not !

GOLDSALES PERCEPTIONS must remain the one and only aspect of Gold that must reach the general public. *Impregnate* those nasty'stubborn, gold-advocates with the total insignificance of Gold. That's the main message, dearest forumers. Never, ever is asked *WHY* that ECB-thing overthere is marking its goldreserves to market...NEVER !
Don't you think this is "strange" ???

TopazIndex trend reversal?#1040106/3/03; 03:07:38

When "heavies" such as Soros etal start bad mouthing the Dollar, all good contrarians should prick up their ears.

The real and present danger of a stronger $Cash at these IR levels is that holding Cash is "more" riskless than paying $119 for the promise of getting $100 back in (say) 20 Yrs plus a pissant 1% PA...with carry protection!

Be aware that the true definition of cronic Deflation is that your CASH Today buys MORE in 12 Mths...more everything.

Someone mentioned the Dollar "lease-rate"...lets extrapolate a bit...We could also recommend Physical "Dollars" in Possession. Amazingly all the reasons, almost;-) for holding Gold close at hand can also apply to Cash at present... imho of course.

Black BladeU.S. Jobs Report Overhaul to Boost Accuracy #1040116/3/03; 03:24:50;jsessionid=KJEVCC04THAKMCRBAE0CFEY?type=reutersEdge&storyID=2864982


WASHINGTON (Reuters) - Statisticians at the U.S. Labor Department have been briefing economists for months on the looming overhaul of the jobless report, but deciphering the vital numbers come Friday morning will still be a tall order. The Bureau of Labor Statistics will unveil four changes to its closely watched payrolls report for May, incorporating a new industry classification system, the final phase-in of a new sampling method, updated seasonal adjustments and changes to the way government jobs are counted.

Black Blade: New ways to "cook the books" unveiled this Friday when May jobless data comes out.

BelgianTHANK YOU ARISTOTLES !#1040126/3/03; 03:38:31

Nice to find your answer that I secretly was expecting. Not as a confirmation for the inevitable future Free Gold, but rather as an encouragement to keep posting as to provoke "mutual enlightment" ! Because, sometimes...I get that funny feeling of being the only Golden lunatic overhere and elsewhere.

In my rather ridicule naivety, I can't understand WHY many amongst us and others, simply turn away from analysing/interpreting, the most clear and public Gold-Facts (WAG-ECB's marking to market-CB goldsales-LBMA statistics-etc...) ? Are they afraid of even suggesting another, reworked, Gold-era ? What is so ridicule about Gold ? What is so fantastic about paper that keeps on deluding us all ?

So many people don't realize that they *own*...OWN, very, very little in fact ! Their house is not even their property in possession but the majority is only renting (leasing) it from their banks ! The bulk of stocks are letting you down, at the time when you mostly need them.
Your currency loses purchasing power, rapidly, when hard times are there. Now even bonds at zero compensation and issued in a confetti-thing that continues to lose purchasing power (70% > 90% > 99,999 %).

How can one possibly doubt about the introduction of a Free Goldmarket under these detoriating circumstances. Most if not ALL remain in denial on the gravity of the situation (and future) or flatly discard such an idea/observation as impossible, due to the fact that we seemingly have overcome all past problems. Linear thinking !

Thanks Ari and goodnight !

TopazHey Belgian...#1040136/3/03; 04:13:16

Ah, FreeGold...a good thought for the future, it's the getting there thats fun to watch eh?
I think in the eventual, freegold trading will prove to be as oxymoronic as Dollar value... and the World will see a repeat of the Roman experience where Gold movement will come to a grinding many multiples of todays price I might add.
For mine I don't care if Gold meanders for another couple of Years, I already have "enough"...and "MY" timeline has a little left in it yet. Don't sell our fellow posters/lurkers too short Sir Ari, Rest assured "them" I'm sure, have acquired as much as their understanding allows.

Without an Oil/Dinar move or similar, it may well be quite some time to Freegold...but then again, it could be TODAY!

Socrates964Gold Leasing#1040146/3/03; 04:42:13

Gentlemen, thank you for your comments:

Rich/Goldilox - agreed, the mechanism is a kind of gold carry trade.

Ari - I always respect your comments on the gold market. What I don't respect is your supercilious dismissal of other posters. Anyway, water under the bridge.

I agree that central banks can hold US treasuries and related assets or release currency into markets. The point I was trying to make can be summarized in the word deception.

Most posters seem to incline to the view that the dollar and the euro are in a currency war - so what would be the actual mechanisms used in this war?

I have commented ad nauseam on the US policy side - i.e. that the economic corollary of US right wing foreign policy declarations is a weak dollar, in so far as the dollar has a natural tendency to decline over time against other currencies and gold/commodities because of excess dollar creation.

US monetary authorities are trying to turn weakness into political strength by accelerating the decline in the dollar so as to blackmail other rival central banks/governments with a 'if we go, we'll take you all with us' kind of threat.

Some posters here believe that this is actually the gospel truth. My own view is that it is largely US propaganda since a) other countries had no qualms about dumping the dollar and living with strong currencies as a response to US intransigence on monetary policy in the early 1970s, b) I don't believe that the US can hold down key commodity prices (mainly oil) and given ageing electorates in Europe, the political trade off between stable commodity prices through currency appreciation and reduced demand for exports weighs in favor of the former rather than the latter.

Anyway, what I'm trying to get at is how other central banks respond to this kind of pressure, since their foreign currency reserves (recorded as an asset) are essentially a loan to the US that is going bad by degrees.

Consider the following. Let's imagine that Schroeder et al. have decided that it is a national priority to bail out Commerzbank. The Bundesbank has to foot the bill willy-nilly. Instead of giving it a loan in euros, the Bundesbank lends it US treasuries which Commerzbank dumps in the market for Euros. As with gold leasing, the leasing contract may be rolled over ad infinitum, and just as the gold has gone for ever, the Treasuries may never return to the Bundesbank's vaults - it merely depends on the repayment clauses in the contract. Let's assume, for the sake of argument that Commerzbank returns the bonds on maturity.

How did the Central Bank benefit? It will evidently take a hefty write-down on these treasuries in euro terms due to the ongoing depreciation of the dollar. It nevertheless benefits more than it would by simply sitting on the instruments in so far as it is able to use these reserves to finance a bail out of a domestic company (which it would have to do anyway) rather than issuing extra euros. There is probably a compensating currency profit on its euro holdings as Commerzbank will drive up the value of the euro in order to realise its credit. In addition, the Central Bank can maintain the appearance of currency reserves in the same way that a central bank that leases gold can claim that a few paper IOUs are 'gold-related instruments'.

Thus, I agree this is just a gold carry trade under a different name. My point was to highlight the fact that just as gold leasing involves deception, a similar mechanism could be used by central banks to liquefy their dollar reserves while maintaining the façade that they are still in the vaults. This was the idea. I merely wonder if this is possible on a large scale.

TopazWatch Buck Jump!#10401506/03/03; 05:13:30

Take a look how ino saw the DX spike Monday...woooo!
BelgianRe:#10401606/03/03; 05:43:42

@ Topazzie : Freegold timing : Yes, indeed could happen this afternoon !? All other major changes had NO préset dates. They just happened overnight !
W're left with the more reasonable question of "Are we close" or better even "How close are we" ? My take is rather simple : If and when the euro shoots throught the 1,40 against the dollar...we must be pretty close. Why ?
IMO, this indicates that the euro is ready to take over the reserve function from the dollar. At this point, the dollar is going to let hyperinflation come and have its full run.
Will see of course.

@ Socrates : ...dumping dollars for euro...(or better, Gold) ...
Who possibly wants dollars for euro in the present picture ?
To who does one sell a losing-dollar...? Certainly NOT to the holder of a euro-winner !? I am NOT accepting dollars for my Gold and euro !

Yes, in the early stages of an unsuspicious dollar-decline, you might find a party that wants to unload some Gold or euro...But not in the present environment where the contrast between euro and dollar becomes more obvious.

There are much too many dollars out there to have them exchanged for euro or Gold or any other valuable tangible !!!!!!!!!!!!!!!!

First we have the decline in dollar exchange rate...than comes the decline in dollar purchasing power...than nobody, outside America, wants to hold any dollar anymore...than we have dollar-capital flights !

To avoid this infernal dollar-spiral, we all keep on supporting the dollar up until one particular faction stops its support, immediately followed by the less powerfull allies of that faction jumping on the (euro) wagon.

BTW, German banks are supported by taking out the problematic parts and stored into a seperate governmental idendity.

But we are not yet on the culmination point. We still firmly believe (whieuuuwwww), the global economy, still possesses the capability for genuine revival ( sufficient growth-potential) ! That's *why* we (more hesistantly) keep on supporting the dollar exchange rate as to not slipslide into the above mentionned negative spiral. Will this political will still be there at €-$ = 1,40 ?

WAC (Wide Awake Club)Timing - Second Coming#10401706/03/03; 06:30:48

It's just like the Second Coming. No man knows the day or the hour. Just make sure you are ever ready.!!
misetichMarket Insight: If all else fails - try plan B#10401806/03/03; 06:47:20


Plan B. That is the term that Dresdner Kleinwort Wasserstein strategists have been using for some time to describe the "unconventional" policy measures that might emerge from the US Federal Reserve.

The idea is that the Fed is running into the same dilemma that the Bank of Japan faced in the 1990s and still today. Interest rates are approaching zero (US rates are currently 1.25 per cent). There is little room left to cut.
One possibility would be for the Fed to try to control longer term interest rates, by making purchases in the bond market. At its very simplest, they could "print money" to buy bonds, thereby injecting liquidity into the economy. Lower bond yields might also encourage the corporate sector to borrow and invest more, particularly if the Fed set an explicit target for the yield level (eg 3 per cent and no higher).

Plan B? - This chaps are way behind - its more like plan U, or V going down the alphabet - IR have been lowered 11 times, tax cuts, reliquification, auto incentives, government spending etc etc

All desperate plans lead to owning PHYSICAL GOLD

All On Board The Gold Bull Express

Dollar Bill*>*#10401906/03/03; 07:12:12

Greetings Sir Belgian,
you said; "Because, sometimes...I get that funny feeling of being the only Golden lunatic overhere and elsewhere."
..I actually did think yesterday that this IS a gold forum, and I was glad you kept up the drumbeat. I didnt name myself "dollar bill". Forum folks did that. I am not complaining mind you :)
Next time at a breakfast restaurant, I will have a Belgian waffle in your honor.

TopazFreeGold#10402006/03/03; 07:28:49

Topaz (06/03/25) 0745MT usagold message No 1978492346
Well, as no-one has posted for three weeks now I thought I'd bring to the Table's attention a snippet of information that MAY see a turn for the better.
OREC today announced they are going to trade Rice on the Global market on a Ton for Ton basis with Gold (Good news Huh?) They stopped short of giving a guarantee that all that GM Rice in storage wouldn't be traded though ;-(...better than nothing!
Supply shortages persist locally it seems, my monthly 500KG order took 3 Days to deliver and the freight cost more than the Gold.. sheesh!
The link shows where we can all profit by taking a covered call on the contango Spot Ag - Colloidal - Dec 33 contract...I'm profiting every month with this one, applying methods gleaned from those wise posters who used to trade the Metals back around the turn of the Century...what a pity Gold didn't coat-tail silver back then, we'd ALL be Rich.
Haven't heard of Gandalf the Bald or Bludgeon for a while, I'm hoping they didn't succumb to Mad-Cars disease. If memory serves GtB was having his Dogs put down this week...sad times!
Thats all to report fellow Goldhearts, if the Rice deal falls through we well may see FreeGold in our lifetime eh?

masBelgian#10402106/03/03; 07:34:51

In response to your point, NO. 1=1.40 life moves on.
We need to understand who is doing what to who? The dallar is a mess but the world economy needs to move on, if they can't pay their bills then ask for cash (Euros) on delivery. Easy isn't it? No credit!
The 40 b (per month) deficit is gone tomorrow. Exchange dallars to euro's at port, and then see how everybody feels....
Got gold?

ZhishengGold this Morning.#10402206/03/03; 07:42:13

Except for its volitility, characteristic of late, the yellow metal is doing quite well this morning in view of the dollar mini-rally.
Cavan ManGood for AU#10402306/03/03; 07:49:07

(Wake up call ***AGAIN***for republicans and conservatives)

Ex-Army boss: Pentagon won't admit reality in Iraq
By Dave Moniz, USA TODAY
WASHINGTON — The former civilian head of the Army said Monday it is time for the Pentagon to admit that the military is in for a long occupation of Iraq that will require a major commitment of American troops.
Former Army secretary Thomas White said in an interview that senior Defense officials "are unwilling to come to grips" with the scale of the postwar U.S. obligation in Iraq. The Pentagon has about 150,000 troops in Iraq and recently announced that the Army's 3rd Infantry Division's stay there has been extended indefinitely.

"This is not what they were selling (before the war)," White said, describing how senior Defense officials downplayed the need for a large occupation force. "It's almost a question of people not wanting to 'fess up to the notion that we will be there a long time and they might have to set up a rotation and sustain it for the long term."

The interview was White's first since leaving the Pentagon in May after a series of public feuds with Defense Secretary Donald Rumsfeld led to his firing.

Rumsfeld and Deputy Defense Secretary Paul Wolfowitz criticized the Army's chief of staff, Gen. Eric Shinseki, after Shinseki told Congress in February that the occupation could require "several hundred thousand troops." Wolfowitz called Shinseki's estimate "wildly off the mark."

Rumsfeld was furious with White when the Army secretary agreed with Shinseki.

Last month, Rumsfeld said the United States would remain in Iraq as "long as it takes." But the Defense chief was not specific about the size of the force.

USAGOLD / Centennial Precious Metals, Inc.Tracking the dollar: Would you invest in a stock that graphed like this?#10402406/03/03; 08:02:20

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.Take a lesson from the ages -- a well-chosen treasure is one that does not go out of style#10402506/03/03; 08:09:49

Golden Goal

"Treasure chests throughout history
have been filled with gold, and not by idle choice."

-- R. Strauss

Socrates964Belgian#10402606/03/03; 08:13:43

"@ Socrates : ...dumping dollars for euro...(or better, Gold) ...
Who possibly wants dollars for euro in the present picture ?
To who does one sell a losing-dollar...? Certainly NOT to the holder of a euro-winner !? I am NOT accepting dollars for my Gold and euro !"

In a phrase - the US Treasury and the Japanese.

If the US wants to maintain the dollar as a reserve currency, it has to make a liquid market in dollar instruments. That means monetizing US treasuries. Hence if our hypothetical European bank were to sell through a proxy, I can't see how the US Treasury could fail to 'make a market'. As soon as it does, the whole $ game is over and the US has defaulted (actually I see this as a possibility, but only after the Neocons have had their fun - they then hand over the White House to a reforming Democrat who then goes down in history as the President who refused to honor the dollar).

I also expect the US authorities to be aided by the Japanese. In a previous post, I mentioned the hypothesis that the Japanese offer a quid pro quo policy 'buy our exports and we invest the trade surplus in your bond markets'. My hunch is that the Chinese have worked this one out and have realised that the way to stiff the Japanese is to keep them out of China's domestic capital markets, ensuring that Japan goes down with the sinking US ship. How does the BoJ spin this - by buying dollars. Note that US treasuries have been an indifferent investment over the last 3-6 months for a Euro-based investor, but a pretty good investment for a Yen-based investor. Again, my feeling is that this policy can only work for so long, but in the meantime, it's spin, spin, spin....

As I mentioned in

21mabry(No Subject)#10402706/03/03; 09:19:42

There has been quite a few posts latley about currency wars and who wins and who loses.I cant help but think that multi national corporations and other mega rich who can move in and out of currencies with little or no costs , they are the winners. It makes me think about the movie rollerball the one with James Caan not that other recent one.There were only corporations left no countries are those times in our future?
Mr GreshamAristotle#1040286/3/03; 09:32:01

Just racing through and had to respond to your early AM post, in which you lanced quite well some of the psychology we're all living in.

Phrases which popped in mind to parallel your thoughts are: "Las Vegas exists" (and has been a prosperous destination point in the desert). What goes on there? Rational expectations? Capital formation? No -- people go there to LOSE their money -- as ENTERTAINMENT! That should tell us how serious people may be at following the signals of markets, trying to buy low and sell high in the rest of their lives.

Some people go to LV with a budget in mind, to lose "only a thousand" or so (never having been hungry in their lives, they can't imagine those ever being their "bottom dollars"). Others cannot control themselves, and play until they are tapped out entirely. This is why Gamblers Anonymous exists.

In a less-forgiving economic environment, these people would die, along with many of their offspring, and fail to pass on whatever genes carry the impulse toward bad risk/reward choices.

Second phrase: "Wealth happens" Yes, it could happen to you. It's happened to a lot stupider, less worthy individuals. You've done your homework. Time has been the distorting factor here, plus any shenanigans that the players are playing, with the public's investment/tax money.

We'll see, won't we? Thanks for expressing core thoughts so clearly.

CoBra(too)Relative to What ? ...#10402906/03/03; 10:04:32

Gold appreciated against the US Dollar, the japanese Yen and maybe the inconvertible Yuan (Renmimbi), while it depreciated substantially against the €, and a host of commodity producing countries like the ZAR, CDN. - NZ and Aussie Dollar - even if the latter dumped their official gold holdings.

I guess Belgian would argue from the viewpoint that any- and everything is relative in value to free Gold.

I'm not too unhappy, though, as i can average down as the POG in € is actually way cheaper than a year ago.
I still wonder, though, when the breaking point, or better hurt level is reached in the $/€ relation? Is it 1.25 or is it 1.40, who knows and who cares. In the end the only arbitrator of value will still be rock solid gold - and the freely floating global fiat system based on 'reserve' Dollars will be part of histerical aberrations for students
of monetary economic history.

Does it only seem to me that that the pricing system of any commodity in Dollars and its futures derivatives is now proving to be double edged sword? A system, which is now starting to go against its inventors - or as MK mentioned some time back we're only another Black-Sholes LTCM like implosion away, freeing POG of its derivative encumbered shackles.

mikalGold bull market in very early stage#10403006/03/03; 10:12:13

Where are we? David Chapman 06/03/03 -Excerpts:
"...Of course there are many that argue that the cycle does not exist or today's modern monetary and fiscal policies will override such a cycle. But the record for the current Kondratieff cycle is compelling. The Kondratieff winter is all about debt collapse, a deflationary depression, and major bear markets in stocks, real estate and currencies and bonds and a major bull market in gold. We also believe that the Kondratieff winter not only is about an economic darkness but as well a political darkness. Indeed one would flow from the other as major economic problems give rise to false political prophets who have all the easy answers. During the last Kondratieff winter 1929-1933, the world suffered through not only an economic depression but also the rise of fascism and a world war.
Will this one be any different? We don't think so even if all of the pieces are not as yet evident. Our most compelling argument has been the currency devaluations and the potential for debt collapse. First the currency devaluations. As we have noted many times the 1990's was a period of currency devaluations. But a devaluation of the world's reserve currency the US$ has more far reaching ramifications.....

We leave you with a weekly chart of the Royal Bank of Canada (RY-TSX, NYSE) (, 416-974-8393) and Fannie Mae (FNM-NYSE) (, 202-752-7115). Royal Bank has been forming a bearish rising wedge over the past two years. The stock recently fell sharply after reporting sharply lower profits. Fannie Mae has been in a downtrend since 2001 but has recently recouped back above the 40 week moving average on reduced volume. But Fannie Mae along with Freddie Mac are extremely vulnerable as they are major holders of the US's household mortgages. Their capital ratios have been cited as being under stress. Over the past few years the number of mortgages on houses has grown sharply. Many of them have been made with only 5% down. Indeed the cry of "Buy now, nothing down, 0% interest" seems to have been a rallying cry for the consumer economy and it will be the Achilles heal for the Kondratieff winter. That is where we are."

Clink!@CoBra#10403106/03/03; 10:14:17

Would that implosion make it a case of Black-Sholes black holes ?!

Groan. Sorry, couldn't resist.


Old YellerLessons on How#10403206/03/03; 10:53:52

To make 43 trillion disappear.A good backgrounder on the
report deemed superfluous to USA Corp's finances.

Seems to me that if GWB was the great leader that he and
his promotional team portray him to be,he would address
this issue,as the ability to face up to difficult realities
is what makes a leader a great leader.

Seems to me all GWB really is,is a salesman.A salesman for the rich and for the MIC.One with a vast promotional network behind him.

America has truly lost what she once had,the ability for
self-reflection and the ability to face her problems head on.

So instead,the destiny and future of the great nation,her children,are looted through a horrific debt trap.

Enough offshore magic shows and action movies,Mr.Bush,the
economic future of the homeland needs some attention.No,
that doesn't mean 1 trillion added to the debt ceiling,it
means taking responsibility for the future,now.

CoBra(too)lack Holes? @ Clink#10403306/03/03; 11:01:36

Probably, as the ultimate mass material implosion of 44.2 Trillion particles of greenbacks unfunded liability - contracts to the reality of its own weight and value = ZERO!
clink to you too - cb2

Gandalf the WhiteIF you missed the Trumpets BLARE --- See the WINNERS #10403406/03/03; 11:48:20

The POG and ESSAY Contests winners are shown at the above LINK !
Thanks Sir Townie !!

CoBra(too)... And what else is new? #10403506/03/03; 11:51:51

Going full circle, though with brakes on. ESF, or whatever you'd wanna call it is out in force - everyday - until force majeure ... Just watch the daily POG gyrations ... a spectacle to behold ...

From Bill Bonner's Daily Reckoning:

"The end we are writing about today, however, is not our
own; rather, it is the conclusion of the good times we have
enjoyed over the last 30 years - during the Great Boom of
the Dollar Standard.

The division of labor was simple: foreigners would make
goods, Americans would buy them. Americans would pay with
dollars...and foreigners would lend them back.

It was easy work, exporting trillions of dollars; the
foreigners were happy to take as many as we shipped. They
set up factories and schlepped far into the night in order
to make geegaws that they could trade for them. Global
trade flourished...and everybody seemed better off for it.

"We are in a country that is buying more from the rest of
the world than we're selling, and we're doing it on a big
scale," Warren Buffett remarked on May 21.

"Any other country in the world that did that on that scale
would have seen greater currency depreciation already," he
added. "We have such a strong currency historically that
there's been a delayed effect. But it's started to happen
in the last year, and unless the underlying conditions
change, it's going to continue."

Before 1971, countries had to settle their current account
imbalances in gold. The amount of money in the world was
limited by how fast miners could dig the stuff out of the
ground. The Dollar Standard had a near-miraculous effect.
All of a sudden, there was almost no restraint on the
world's money supply. The central banks sold their gold and
piled up dollars. It was boomtime.

Charles de Gaulle saw the final act, even before the show
had started; foreigners wouldn't take the dollar at par
forever. A Dollar Standard, he said in the early '60s,
would allow the U.S. to pay its bills in money of any value
it chose.

Forty years later, it looks like the world's investors may
be catching on too - the Great Boom may be over. Germany
has edged into recession. Italy, too. Consumer prices fell
0.2% in Germany in April-May. Imports from China - driving
down prices - are increasing at a 62% annual rate.
Japan...well, Japan is always in recession, isn't it?

Germany is 30% of the European economy, prompting Stephen
Roach to conclude: "Europe is on the brink of economic

Here in the U.S., yesterday brought news that it takes
longer to find a new job than at any time in the last 20
years. And the Financial Times revealed the little secret
that our own Kurt Richebächer has been writing about for
years: the productivity numbers that lift Alan Greenspan's
spirits are phony. The numbers he relies upon are gross
numbers. The net figures, which are reduced by
depreciation, show no productivity miracle - not even

And so it was all a lie, after all. Every vanity of the New
Era has now been destroyed. No eternal bull market on Wall
Street. No faster GDP growth. No peace dividend. No extra
payoff from new technology. No greater productivity. No

It is all still the same. Everything comes to an end. Even
the big dollar boom. For now, the ungrateful foreigners are
growing chary of the dollar."

Chary and weary of the dollar? Gold is the natural alternative - cb2

silvercollector"Euro Wreck" by S. Roach.#10403806/03/03; 12:30:12

"Under these circumstances, the European policy response should be clear: The accepted script for deflation fighting tells us that authorities need to err on the side of aggressive stimulus. Yet the EMU policy decision-making framework all but rules out such an option. The special risks of Germany get swallowed up in the less alarming pan-regional averages. Therein lies Europe's greatest peril, in my view. At critical stress points such as this, stabilization policies need to become German-centric. That's true of fiscal policy, where Germany needs special dispensation to go well beyond the 3% deficit cap. It's also true of monetary policy, where the ECB needs to slash regional interest rates to levels that provide far more stimulus in Germany and ignore potential inflationary consequences elsewhere in the region; that will require a good deal more accommodation than this week's widely-expected 50 bp ECB rate cut, in my view.

Europe is on the brink of economic failure. Policy makers need to go into a state of "high alert." Unfortunately, the EMU-driven mindset shows no such concern. That must change, as the gorilla in the region moves inexorably closer to its own deflationary abyss. The recent appreciation of the euro — and the likelihood of more to come — adds a special urgency to a shift in the policy mindset. That won't be easy to do. EMU was a political endeavor from the start, basically aimed at locking in French-German détente — a goal complicated by the burden of German reunification. Notwithstanding powerful political motives, EMU never rested on a solid economic foundation, in my view. The cracks in that foundation are now growing wider. If the authorities don't move quickly, it may be too late to repair the damage."


Is a 50bp cut going to wallop gold? We will know soon enough.

BelgianGWB in the Middle East#10403906/03/03; 12:53:02

He expressed his desire to establish *free trade* between the US and the ME in exchange for a viable Palestinian state !? I don't buy this free trade proposal.
The US goes for """ dollar-support """ ! In fact, I think that everything the US undertakes is for a big part in function of direct/indirect dollar-support !!! Keeping the dollar in "use" at whatever price and by any means. Keeping up dollar-appearances.

Virtual strong stockmarket, regardless of crazy overvaluation. A 20 year IR decline as to increase bond-value and keep the bondmarket as liquid as possible (Yep Socrates). Contain Gold (dollar papergold market) and oilprices (occupation of Iraq) as to avoid a dollar-flight.
Deviate the N.Korea threath in Japan's direction as to valorize US' protection in exchange for further dollar support by Japan. Trying to seduce Putin, away from his attachment from Germany. Divide Euroland as to weaken the euro as the dollar's competitor.

It is remarkable that Saudi Arabia (S.A.) is left out of this whole US-ME affair ! Iraq and Iran have been/are selling oil for euro. The real joker is S.A. member of BIS.
And next to China, one of the Big players in the dollar papergold contract market (LBMA and invisible/untracable trades). All this must be euro for oil related and a constant pain for the dollar support-campaign.

The more the dollar gets debt-loaded, the more it ($) needs different lifesupports of all sorts. Containing Gold with dollar contracts will become insufficiant. Remember that the enigma around the US' "custodial Gold"-"deep storage Gold" hasn't been decoded ! Is this Gold that needs to be honored ? What if the US walks away from honoring (to S.A.) this Gold ?

Free euroGold wants to stop the dollar-management of Gold "entirely" and let Gold free to seek its own level against every fiat as a wordly tradable wealth ! This is an idea that the ME would welcome without having a presidential messenger coming down with an army of security guards to have a speech with no questions allowed, like the one we saw today !

The competition amongst the dollar-euro-Gold is a game between two to one : euro+Gold against dollar. Oil is shifting to the euro/gold side, regardless of US-ME free (humhum) trade relations. Iran is already a privileged trading partner of Euroland (and Russia). The more I think about it, the more I'm amazed that the US invader sees it the opportune moment to invite for mutual trade with the Arab moslim brotherhood. The more that Syria and Iran come under increasing pressure. How can one expect any positive respons for dollar-support ?
ME nation states are still experiencing the subjugation by the US through dollar-fiat dominance. Is this expressed in the smoothly (discretely) rising POO (Nymex crude over 30$ again) ? Remember that the POO should have been 144$/barril by now (in 2002-$).

Liberty HeadWMD Update#10404006/03/03; 13:02:55

The latest discovery.
Black BladeIMPORTANT!!! - 2-Year Treasury Yield Below Fed Fund Rate #10404106/03/03; 13:26:28;jsessionid=X4CMUY13535GQCRBAE0CFFA?type=businessNews&storyID=2871149


NEW YORK (Reuters) - Two-year U.S. Treasury yields fell to record lows on Tuesday, breaking beneath the Federal Reserve's 1.25 percent funds rate as investors bet the central bank would have to cut interest rates yet again. Yields began to slide after Federal Reserve Chairman Alan Greenspan said deflation would be on the agenda at a meeting of the central bank's policy-setting committee later this month. He noted that while deflation was unlikely, taking insurance against it would not cost much. The comments sparked speculation the Fed might decide to take preemptive action against deflation -- a sustained fall in the general price level -- either by cutting rates or perhaps buying longer-dated Treasuries.


The two-year note surged 5/32 in price, taking yields to 1.22 percent from 1.31 percent late Monday.

Black Blade: I am surprised that the gold market has missed this! With inflation (at least the official rate of inflation) running at least 1.7% and the nominal short term interest rate now at 1.22%, that is a NEGATIVE "real" interest rate of –0.48%!!! Historically the price of gold has a negative correlation to the dollar and low (and especially negative) "real" interest rates. It does not matter whether interest rates and inflation are either high or low, or somewhere in between. What matters is the "real" rate. For example – in 1980 when gold surged past $800 an ounce, the US had a very high inflation rate, but nominal interest rates were also very high, in fact higher. What happened then as now is "real" interest rates were negative. Well guess what? It cannot be denied that now we have negative "real" rates. Whenever this has occurred before the price of gold had a sustained increase in value (or at least held value) against a decline in other financial assets. Add to that a weakening dollar on the back of soaring trade, current account, and budget deficits against a backdrop of all time record US debt with absolutely no end in sight. This portends a rising rate of inflation as the Fed will have no choice but to cut rates further while at the same time opening the floodgates with massive infusions of liquidity. Actual "real" inflation suggests the "real" rate is even more negative. Did anyone else notice today's news? This is a big one!

WaveriderVIP: DAILY GOLD MARKET REPORT #10404206/03/03; 13:43:59

"More importantly is that now the U.S. nominal interest rate is well below the rate of inflation making the "real" interest rate negative. This should provide good support for hard asset investments, and with weak returns in other financial assets the obvious conclusion is that by holding gold, the opportunity cost is virtually nonexistent. History is on our side on this one."

Waverider: Thanks Black Blade - you're always at least one step ahead of the mainstream media!

BelgianThe global economic front.....#10404306/03/03; 14:04:01

The global economy is stuck. What does it help solving, to describe how bad this or that particular national economy is or isn't. All boats are on the same economic tide !
The longer this (systemic) situation drags on...the more (deeper) w're going to focus on the monetary aspect(s) of the global malaise. Dollar euro that is . Ideal combination of time and circumstances for taking dramatic steps and stop the "smooth" and "delicate" balancing excercises.

Time for hyperinflation and riddence of the dollar-standard.
Time for the euro-project, showing what it has in store.
We can't have one and a half standard. A new International Monetary System that takes the old (unworkable) and new (Gold) realities into account. The great dollar > euro transition runs smoothly up until that unknowable moment of final "Snap" in the adjustment process is there. Is this the answer to COBRA's question on POG in euro ? Euro first, POG somewhat later ! Allies in the euro-project must be ready to shift out of the dollar standard. In the mean time the competition can continue on a friendlier basis and Chirac (€) and Bush ($) have a polite relationship (Politics, Silvercollector) where the Bush oil-clan is in the perception that their private interests are being served (Right Old Yeller ?).

Remember FOA's bonzai pruning ...right Gresham !?

Stephen Roach analyses/conclusions on €/$ exchange rates and IRs don't hold water ! In german we say "kurieren am sympton"...cure the symptoms and ignore the causes of a coagulating global economy. Public financial reporting is totally ignoring (covering up) the floating dollar-"Debtberg" as the main cause for the agglutination of economic activity. The blood-stream has been diluted with constant, destructive easy-confetti and we will have to face the consequences of our virtualizing prosperity.

The reporting, read minimalizing of the IBM fraud is rather pathetic. Very soon we will all realize that this past all embracing paper-bonanza must end with a sobering nightmare.

All those who were finally lured into this virtual bonanza will remember this bad tasting mistake for a very long time. The same aftermath and worse than the 1929 affair.

Ideal for having FREE GOLD !

Dollar Bill*>*#10404406/03/03; 14:29:11

Sir Belgian,
Maybe I'm wierd, but this line of yours has great humor in it.
"...smoothly up until that unknowable moment of final "Snap" in the adjustment process is there."

GoldiloxWind until Snap#10404506/03/03; 14:50:51

@Belgian and Dollar Bill:

"...smoothly up until that unknowable moment of final "Snap" in the adjustment process is there."

Sounds like the sinking feeling one gets after accidently winding a pocket watch TOO tightly. . . snnnaaaapp, and then it winds never again.

Mr GreshamRoach#10404606/03/03; 15:34:07

"Europe is on the brink of economic failure. "

Roach & crew are good economists, or at least I should say well-trained. They work hard observing all the dynamics that we discuss here each day. Their viewpoint has to be on the conventional side, as Morgan Stanley's fees are received for advising large clients.

I appreciate the frequent links here to their reports (and yesterday read 'em all), but it's mostly to see just how much of what we discuss here (on the dire doomer network) is being mentioned at the high levels of institutional economics. Quite a lot. (And being several years early has helped us more educationally than financially. So far. -- Well, actually, has anyone here lost a lot in the stock market??? Snarf, snarf ;)

But this Euro failure thing. Sounds like he's carrying someone else's water. What about the self-regulating dynamics of markets? Sounds like Europe is trying to keep itself in a currency of integrity so that the markets can do just that. You have to keep savers in the loop. Encourage capital formation.

I think Roach is conflating the economics slowdown with the deflation fear, and I give the deflation fear credulity only in the problem the BOJ/Fed have of not being able to cut below zero. That's a peculiar problem of the engorged financial sector, which is itself strangling the productive economies. Of course they will scream bloody murder and ask for everyone else to sacrifice again to save their worthless -- oops, rant talk -- , but it might be better to let them walk off the plank they've created and let the rest of the economy float (more) free again.

I think Europe intends not to get itself near that point, take the slowdown as it comes, and let economies bring themselves back up. At least I hope that is their understanding of how to ride out the USD "perfect storm".

This prattling about Deflation as a black hole that will suck everything into it. What? -- are people going to stop eating? Price of bananas drops two months in a row, and people will leave them rotting on the docks? I don't theeeennnk so. So much for deflation fears.

Just when consumers might NEED a price break, the business/banking economists are going to tell them, try to convince them, it's not good for them? Sounds like "Trickle Down" economics again to me.

But if we take all that Deflation ranting as coded talk for liquidity crisis, and banking failure (US, Japan, AND some of Europe), then we might be talking about something. But then, Roach and crew -- very good economists -- work for a bank, don't they?

I'm getting more and more leery of this "we're all in this together" chatter. Seems that in both economics and war, it gets flouted about when someone is about to pick your pocket or put you in front of a bullet as part of their business dealings.

Mr Greshamoops#10404906/03/03; 15:39:01

Well, that's what i get for leaving the alternate "estreet" link to the forum up on my screen. Hitting a Submit on it did not feed back a confirmation as usual , went off into a lost URL 404 rejection type message... oh well, live n learn
misetichGreenspan No 'Major Evidence' of Growth #10405006/03/03; 15:42:47


Federal Reserve Chairman Alan Greenspan said today there is no "major evidence" that U.S. economic growth is accelerating and hinted again that the central bank may soon cut interest rates to boost growth and guard against a dangerous period of deflation.
The Fed is concerned not about "the issue of deflation in the sense of falling prices per se, but the issue of corrosive deflation, that is, a deflation that essentially feeds on itself, creates falling asset prices, which in turn brings down levels of economic activity," the Fed chairman said.

But the Fed chairman said such predictions remain just forecasts, and as long as that's the case, a further rate cut could provide "insurance" that they become a reality, the analysts said.


Often in the past the Post's John M. Berry has been "tuned in" with Greenspan's moves -

It appears a US interest rate cut is a certainty - and Sir Greenspan has left no doubt on what he alludes "deflation" as being - ASSET DEFLATION

All On Board The Gold Bull Express

misetichJohn Berry - Washington Post Link#10405106/03/03; 15:44:09

Jumped the gun
CoBra(too)Live n' Learn#10405206/03/03; 15:48:11

Mr. G. - your latest post could've been repeated endlessly -
as in live n' learn - thanks cb2

misetichFord - GM cut production#10405306/03/03; 16:00:36


Ford said its decline in May stemmed from fewer sales to rental car companies and corporate fleets. The company said it will cut third-quarter production by 15 percent to 810,000. The company said it would produce 1 million vehicles in the current quarter after previously estimating it would build 990,000. The revised second-quarter production schedule is also a 15 percent decline from the year before.

General Motors

The automaker said it trimmed 20,000 vehicles from its planned second-quarter production in North America to 1.37 million new cars and light trucks, which reflects the lost production from the closure of a tornado-damaged factory in Oklahoma City.

General Motors also said its planned third-quarter output will be 1.225 million vehicles, down about 6 percent from 1.307 million in the same period of 2002.

The auto industry is slowing as is the housing industry the two pillars that have kept the US economy going for the last two years

The "market" is ignoring all bad news of course - expecting a 2nd half recovery of gargantulan proportion -

They will be disappointed

All On Board The Gold Bull Express

Cavan ManMr. Gresham#10405406/03/03; 16:30:04

Fine post sir.
GoldiloxMarket Summary, by Rob Peebles (PruBear)#10405506/03/03; 16:57:47


FedEx lost 2.5% today. The company said it would fire 12% of its workers,or up to14,000 folks. As luck would have it, according to a Reuters report, a Wall Street analyst jacked up FedEx estimates for ?03 and ?04 yesterday, figuring the company would benefit from lower fuel costs and a weaker dollar. By late afternoon, however, the company announced the layoffs and actually lowered estimates for fiscal 2004.


More minions for the bonepile. Now it seems the 2004 estimates that companies were using for their C.R.A.P. earnings reporting are starting to be revised downward, as well.

Got Gold?

HuskyRE: Roach "Europe is on the brink of economic failure. "#10405606/03/03; 17:07:12

Agreed with Mr. Gresham that Roach is "carrying somebody else's water". Roach is normally and consistently a very good read. However this is at least twice now in the past 12 months or so that his comments about Europe have been very wide of the mark, I would even consider a characterisation of 'misleading' to have some substance. When you're in Europe and plugged into what is going on, this just jumps out at you, so it's not really a question of a narrow interpretation of what Roach is saying. I can understand that folks in the US can't tell the difference as they have little direct first-hand knowledge/experience of the situation on the ground in Europe, and nothing says they should have - nobody can know everything. Anyway, something is probably up as it would seem Roach's employer evidently needs to pump some very expensive hot air out the door.

It makes me sick to see the guy continue to ruin his credibility like this. He's better off leaving his employer and continuing to write as an independent I would think.

GoldiloxPruBear International Perspective, by Marshall Auerbach#10405706/03/03; 17:10:17


It is testimony to the state of US central banking practices today that nothing the Fed suggests these days has the power to shock any longer: helicopter money, currency debasement, unprecedented intervention in the fixed income markets, the mortgage market, corporate debt, the markets hardly bat a collective eyelid. Given the recent miraculous severance of domestic financial asset prices from the dollar exchange rate (which would imply foreign selling of US assets), and the similarly miraculous detachment of bond yields from stock prices, such posturing no longer appears like reckless hubris, but playing to an appreciative audience. The Bond Market Vigilantes left the theatre a long time ago, only to be replaced by a full house of inflation aficionados, applauding each new ?deflation-busting? proposal and screaming for an encore.

So it has come to this: The Fed must fill the helicopters with dollar bills, send them aloft, and drop them first. Households must find themselves with such bloated liquid balances that they will desire for diversification?s sake other assets in their portfolios. Only if a surfeit of money burns a hole in their pockets will they spend it on goods, services and private assets. It is hard to imagine any serious central bank in the world that would seek to enhance its credibility by advertising its capability of doing the equivalent of a helicopter money drops by including pictures of helicopters carrying crates in their research papers, but such is the legacy of the Greenspan Fed that this is now standard operating procedure.


Were the planeloads of $$ paper for Iraq just a dry run for bigger things?

Cavan ManInflation and/or Deflation Musings#10405806/03/03; 18:26:10

Inflation is a monetary phenomenom and rising prices are the end product right? Well, we certainly have excessive "monetary phenomenom" as witnessed by ongoing FED operations and prices of all sorts of very necessary products and services are registering large percentage increases in cost to both consumers and businesses.

Deflation, from my small perspective, is best viewed through the looking glass of the packaging business; specifically, corrugated boxes. I sell empty boxes for a living and one day hope to be a recovering box salesman :>)

The corrugated industry and many if not most of her customers are prime examples of deflation in real time; right here and right now. We have absolutely no pricing power--none. Pressure on selling prices and margins is incredible. I have never seen it this bad in 18 years. The real bad news is, the pressure is ratcheting up. There are five primary influences trending in confluence hampering our ability to eke out even a small profit.

1.) Overcapacity: a bi-product of malinvestment and a recessionary economic backdrop.

2.) Recession

3.) China and third world countries supplying products AND SERVICES at cost metrics the west cannot compete with.

4.) Specifically, WalMart but generally speaking, mass merchandisers of retail products with HUGE leverage on the buy side. The absolute POWER of these retailers, especially Wal-Mart cannot be comprehended easily unless you are a vendor or, selling a raw material to a vendor.

5.) Reverse auctions: This wonderful purchasing (weapon) tool is an event where an online bid is arranged and all those participating get to view their competitor's bids in real time. The lowest price gets the business. Typically what happens is the incumbent ends up retaining the business at or below variable cost.

That's what I see from my vantage point; that's my "man in the street" perspective. These five factors are weighing heavily on the packaging industry and the customers we service. For those of you from cape Girardeau, almost everything comes in contact with some sort of package and/or box. Regards....CM

SundeckEssay - Thanks to USA Gold / CPM#10405906/03/03; 18:34:36

Congratulatulations to John the Jute ... err I mean Dr Watson - "Frightfully good reading, old chap. Holmes will be pleased. ;-)" ... and well deserved.

...and a big thanks to USA Gold / CPM for conducting POG essay competitions ... and awarding great prizes...ANOTHER Canadian Maple Leaf for my grand children :-)

Congratulations also to Sir Goldendome - fellow vanquished knight :-( ... and also to Boilermaker and The Hoople.

..and an extra special THANK YOU to "The Master of the Joust" Sir Gandalf the White, who alone via his magic "crystal ball" knows the price of gold on 1 Sep 03 (and is not telling)...



21mabryfedex#10406006/03/03; 18:39:49

Goldilox, Your post about fedex struck home with me.I used to work for the company, when I was hired in the company had a no layoff policy and had never laid any one off in the history of the company.I no longer work for them but evidently the no layoff policy no longer applies to them
silvercollectorRoach#10406106/03/03; 19:02:56

I can't believe you guys!

Roach for over a year (a YEAR) has been discussing the 'double-dip' recession due to consumer plight and the fact that the USA is plain and simply financially exhausted.

His theme and his expression for quite a while now has been if the US is no longer in a postion to be the economic 'engine of growth' who, that is WHO, is going to be?

Answer the question and win a prize. Now we have the FED skating (and I don't think anyone can deny that!) with IR (12 cuts) with no economic response. There is no one out there who can pick up the ball and run with it. Roach has been saying this for a year. Now you guys jump down his throat for mentioning that Europe, in particular Germany, is faltering (failing) as well.

Roach has never said that the USA is not failing economically as well. If fact, as already mentioned, he's the guy calling the 'double-dip'.

He's calling the dip, and the deflation and the upcoming global scary times because ALL ships are sinking.

Don't knock him now, his theme is the same as it's always been. He's one of the few 'bankster' types that's calling it the way he see's it and I think he's right.

Anyway, no need to speculate, we'll know this week.

silvercollectorCavan Man#10406206/03/03; 19:11:28

You are one of the guys 'at the front'. Keep us informed good buddy with the 'empty box' numbers.

My brother-in-law was laid off yesterday from a medium sized high-tech firm. This guy was the purchasing manager who, in 2002, saved the firm some $1.5 million in contractual obligations. Now if they can't 'afford' him they are in trouble.

My neighbor was laid off from a major high-tech firm. He was one of the production managers. This guy was leaving his house at 6;30am to be at the plant at 7;00 and leaving at 6;00pm every day. His offical working hours are 8;30-4;30: The guy was working his tail off to keep the job. I told him if the corporation had to let him go they must be near the end.

Recall a year or so ago when the speculation ran rampant about 'cash burn rates' and 'remaining cash' etc, etc. I think we will have some major burnt-out victims upcoming very shortly. (Big high-tech corporate bankruptsy)

We shall see.

Socrates964Mr. Roach - Rhinoceros#10406406/03/03; 20:16:03

Reading US economists reminds me of Ionesco's play about everyone turning into rhinoceroses. Once there's a critical mass of them charging up and down the street, the remaining humans start to feel aggrieved that they haven't turned into rhinoceroses as well.

Hence, SC, Roach may have been claiming that the US is in recession, but this is about as intellectually challenging as pointing out that the twin towers of the WTC have fallen down.

His latest offering on 'Old Europe' makes me think that he is moonlighting as a speechwriter for Jon Snow and got his papers mixed up. See the impressive new horn on his nose for yourself:

"And unlike the United States, which has the luxury of addressing its economic problems from a position of strength, Europe must meet these challenges from a position of weakness."

Errr...what about that budget deficit and that trade deficit?

"...That would increase America's dependence on the rest of the world to finance its consumption-oriented economy — compounding an already serious balance-of-payments deficit problem. But that may now be an unavoidable outgrowth of new priorities now gripping the global economy."

....yup, the Euro/$ exchange rate shows that the rest of the world is queuing up to invest in the US because of the 'new priorities now gripping the global economy' whatever these are.

Now read this and laugh/cry/hurl:

"As we decompose the world through the stylized lens of the purchasing-power parity metric — all the more appropriate in these days of sharply fluctuating exchange rates — the European Union accounts for fully 20% of global GDP; that's only fractionally below the US share of 21% and nearly three times Japan's 7% portion."

and a few paragraphs later,

"Over the 1995 to 2001 period, the US economy accounted for 63% of the cumulative expansion in world GDP (at market exchange rates). Over the same period, Europe's contribution was about 8%. That means over that seven-year interval, America made about eight times the contribution to global economic growth that Europe did."

Note that when Roach wants to complain about Europe not pulling its economic weight, he uses 'the stylized lens of the purchasing-power parity metric' (sic) to emphasise the size of the Euroeconomy, but when he wants to complain about Europe failing to grow, he uses market exchange rates. On the basis of this argument, France and Germany should now be the economic dynamos of the world - given the recent revaluation of the euro, and we shouldn't forget the world's fastest growing economy - Iraq, which has quadrupled in size in the last three months (I can't say that I track the dinar in detail, but when I last saw, it had gone from 4,000 per $ to 900).

silvercollectorIt gets better every day.#10406506/03/03; 20:56:58


"Halliburton Co.'s $7 billion contract, awarded without competition, to make emergency repairs to Iraq's oil infrastructure also gives it the power to run all phases of Iraq's oil industry, according to U.S. Rep. Henry Waxman, D-Calif.

Waxman said, based on a letter he received May 2 from the Army, that "the contract with Halliburton -- a company with close ties to the administration -- can include 'operation' of Iraqi oil fields and 'distribution' of Iraqi oil."

Officials previously had said the contract dealt only with putting out oil well fires and performing emergency repairs as needed.

"These new disclosures are significant, and they seem at odds with the [Bush] administration's repeated assurances that the Iraqi oil belongs to the Iraqi people," Waxman said in a May 6 letter to the Army. "


Black BladeEconomy may just run out of gas #10406606/03/03; 21:44:43


THE THINKING AMONG traders is that if the U.S. industrial sector recovers, pushing up demand for energy, the price of natural gas could spike to record highs come winter and pose a serious threat to a nascent economic recovery. It wouldn't help, either, if this summer turns out to be a hot one, further increasing energy demand at a time when supplies are tight. The issue was raised by Federal Reserve Chairman Alan Greenspan during his testimony before the Congressional Joint Economic Committee on May 21. Greenspan told lawmakers that dwindling supplies of natural gas were a "very serious problem" that may put pressure on the U.S. economy. Industry analysts, government officials and traders share the Fed chief's concerns.

Natural gas prices are soaring too, as U.S. supplies sit near record lows, down 39 percent from last year's levels and 32 percent below the five-year industry average, according to Jim Williams, an analyst with WTRG Economics, a consulting group for the energy industry. Reasons for the tight supply include a cold winter and spring in the Northeastern United States, a primary natural-gas consuming region, and declines in U.S. production levels. "It's still touch-and-go as to whether there will be sufficient drilling for next winter — that's why there's so much uncertainty in the price of natural gas," said Williams. "My hunch is we'll make it," he added, "but two, three or four years on — that's another question."

Phil Flynn, energy analyst at Alaron Trading, worries that a hot summer may drain natural gas supplies, as power plants ramp up to power air conditioners, and push natural gas prices higher. With the U.S. economy already struggling to mount a recovery, a sustained rise in natural gas prices could make matters more difficult, he said. "High natural gas prices can hurt the consumer and manufacturing, which is trying to get itself on its feet," Flynn said, but added that the impact may be somewhat diminished by the Bush Administration's $350 billion tax cut, a declining dollar and an absence of inflationary pressures in the U.S. economy. "We're in better position to absorb the shock," he said. Another silver lining: companies in the natural gas sector are likely to profit from the growth in demand for natural gas. "Everyone's waking up to the fact that this could be a real crisis and realizing it could be profitable for the entire sector," he said. High energy costs hurt companies involved in manufacturing and heavy industry the most, as those sectors tend to guzzle large amounts of energy as they produce products like aluminum and chemicals, according to Williams. Companies in the services sector will also be hurt by higher energy costs.

Black Blade: It is looking ugly in spite of some positive injection data over the last couple of weeks. However, this is "shoulder season" and maybe a couple more weeks of lower than usual demand will end as summer temperatures arrive. It appears that high energy costs will hit the economy for the next several years at least.

silvercollectorSocrates964#10406706/03/03; 21:57:07

...and it was only the other day that you leveled Ari for not giving other posters the time of day. I forget the word you used, I never use a word with more than 10 letters, I would only forget it.

People turning into rhino's, don't know the play but I'm pleased that although you have belittled Roach and presumably myself in the process nowhere in your post do you alright say that Roach is wrong.

Come on make my day, tell me something I can understand. Tell me Roach is a jackass and he is dead wrong. I've been around for a long time, there are many, many people that have come and gone and they have ALL been wrong.

I'm not listening to stories and tales anymore. I know why gold is going up and it's not going up because Europe is going to save the day. Hard assets will rule this world, not paper, not even Europes paper. When oil, gold, water and food creation become critical issues paper money, IOU's, bonds and debt will mean nothing.

Perhaps I don't understand this cryptic association that the Euro has with gold, perhaps it is not necessary to understand this when it is certain that gold will surplant all fiat, be it a dollar or a Euro or otherwise.

That's another intellectually challenging concept to add to your list.

Sorry I am cranky, I am going to get lost for awhile, at least until this ECB/FED IR cut thing blows over.

mikalFinancial leverage is on borrowed money and borrowed time #10406806/03/03; 22:07:32

Chaos-onomics -Dave Lewis
Excerpts: "'The (People's Republic of China) is a backward, corrupt anachronism run by decrepit tyrants: old apparatchiks clinging to their dying regime' -Republican House Majority Leader Tom DeLay

Media deregulation, accounting scandals, Jayson Blair, PM Blair, President Bush and weapons of mass disappearance fill the airwaves these days and there is one simple thread which ties them all together, deception. Trust in the institutions of our times is fading fast and yet the powers that be continue to play the same old tired games.....

Returning to the public faith in Wall St. or to be more specific, the financial sector, let's examine today's graph. The aspect of the data which caught my attention was the enormous growth of financial sector debt. From a mere 8.6% of GDP and 6% of total debt in 1965, financial sector debt has ballooned to nearly 100% of GDP and 50% of of total debt today. For a sector that is supposed to intermediate, the finance buys sure seem to be borrowing lots of money.
I wonder if this growth in financial sector debt is related to the Federal Reserve's willingness to act as lender of last resort, or as an economist comic might ask, "can anyone spell moral hazard?" To what ends are these debts incurred?, not profits at least if you consider that 1987's 38:1 ratio of financial sector debt stock to profits has become 2002's 49:1. Of all the deceptions out there, this one takes the prize. Fiat money is not money and to the extent the system only operates if the financial sector becomes ever more leveraged, we are likely to discover just how un-money-like fiat money can be."

Dollar Bill*>*#10406906/03/03; 22:14:20

Greetings Silvercollector,
You said you perhaps were cranky, well, I dont know, I think THIS guy might qualify however.

One day after US President George W. Bush met with the new Chinese president and invited him to the United States, Republican House Majority Leader Tom DeLay, said....

"The (People's Republic of China) is a backward, corrupt anachronism run by decrepit tyrants: old apparatchiks clinging to their dying regime,"
"The notion that these oppressive and dangerous men could convince the United States that their murderous ideology should be imposed on a free and independent Taiwan is absurd. And refusing to say so, for fear of upsetting Beijing, is not tact: it is infantilism."

Dont majority leaders get schooled in diplomacy?

Black BladeU.S. seeks to avoid winter natgas shortages#10407006/03/03; 22:16:31


NEW YORK, June 3 (Reuters) - Facing concerns about natural gas price spikes or even shortages this winter, the U.S. government is taking steps to avoid any crisis that would leave consumers out in the cold next heating season. With gas inventories still near record lows and production struggling to catch up, concerns have been growing that supply might not suffice to meet heating needs six months from now. "This winter could be a disaster. We're really concerned about making it through, but it's tough to do anything in the short-term," said Stephen Thumb, principal at Virginia-based consultants Energy Ventures Analysis. U.S. Energy Secretary Spencer Abraham has called a June 26 meeting of the National Petroleum Council, an advisory panel, to devise ways to boost natural gas supplies this summer. While analysts generally agree that there is little government can do to immediately boost supply, they cite several steps that can be taken to avert a spike in prices above last winter's record high near $12 per million British thermal units (mmBtu), almost four times the average over the past 5 years.

Black Blade: It's way too late to be thinking about "quick fixes". There simply are none. They sandbagged the issue for the last few years and now the chickens have come home to roost. Another point to consider is that several nuke power plants have shutdown for repairs due to cracking in containment heads and for long term maintenance. Some of the "quick fixes" are unlikely as there are few "dual fuel" facilities anymore, fuels are not readily interchangeable, many older power plants have been decommissioned, etc. Alan Greenspan has good reason to be concerned.

Dollar Bill^/^#10407106/03/03; 22:47:31

..Jesper Koll, from Merrill Lynch (Japan), told a Minerals Council of Australia conference that reports of the imminent collapse of the Japanese banking system were nonsense. Mr Koll said because interest rates were zero, banks were infinitely wealthy to the point they could buy a country.
.."If Japan wanted to buy Australia, it could buy Australia tomorrow," he said. "With zero interest rates, Japanese banks can fund any asset, whether it's a good asset or a bad asset. With zero interest rates and zero funding costs there cannot be a financial crisis because the banks are infinitely wealthy."
..Making such property-infringing transfers ARE the point of the Grand Illusion (transfers away from creditors and towards debtors, from 'sticky wage' employees to importunate employers, from savers to consumers, and from hard-working citizens to parasitical ruling elites), the Court Jesper has still forgotten one basic law of economics - that of marginal utility.
..For even if the first extra unit of money could somehow do some real good, the next one would do less, and the next one less, and so on, ad infinitum, until the money, being in infinite supply, becomes a 'free good' and is therefore worth nothing - a process most nearly approximated in that wealth destroying pathology known as a 'hyperinflation'.
..All in all, another case of infinite money meaning infinite, if concealed, penury.
..All other nations must be induced into prostituting their own currencies at a rate commensurate with the process at work in the US, so that the dollar's debasement does not become too objectionable by comparison, else foreign workers will not continue to squander their savings on pampering the Western gerontocracy and their over-consumptive offspring.
..Infinite money will equate, as ever, to infinite mischief.
Sean Corrigan
..Only 13 out of the 50 US states are in a fiscally sustainable situation.

slingshotBuilding a better mousetrap.#10407206/03/03; 23:06:01

Cavan Man

In the pass couple of years I have noticed an increase in the products from China. More and more families are going into business at fleamarkets and the majority of merchandise is from China. As for Walmart a entrepenure has opened a warehouse (old K Mart) and it is something to see as the boxes piled high to the ceiling dissapate week to week and more from his loading docks fill the floor space.
I call it the store that has everything, but hard to find what you want. It is rare to see a box stamped, Made in the USA.

mikal*FOR IMMEDIATE RELEASE*...URGENT...BREAKING NEWS BULLETIN.... Official National Psychiatric Diagnosis: "Military/Industrial Complex exacerbated by Chronic Obsessive/Compulsive Psychosis and Acute Suicidal/Homicidal Dementia..."#10407306/03/03; 23:11:58

Don't worry. Don't fret. Your president did not forget. He's got a team of George Lucas and Steven Spielberg students working hard on a full scale production illustrating Iraq's weapons of mass destruction, how they were uncovered, and how George Bush has saved the day. It's almost ready.
Part of the delay was caused by arguments over the best scenes to produce. One group wanted President Bush dressed in white robes with a staff and tablets commanding a huge desert sand storm that would unearth monstrous laboratories and silos of nuclear missiles. This was fine, but they got sidetracked with thoughts of Saddam Hussein appearing as a huge evil cloud trying to devour the good guys, sucking helicopters into his maw, and doing other things before being smote by George and his staff.
Others wanted to include Hans Blix and his inspectors being hijacked by gazillions of scarabs before Donald Rumsfeld, Colin Powell, and Condalezza Rice rush in to save and redirect them.
Of course, Ari Fleischer and the White House staff nixed all of these wilder ideas and told the producers (played by Robert DeNiro and Dustin Hoffman) that things had to be more realistic and the old UN inspection team isn't allowed on the set or to be portrayed as anything but incompetent clowns told to go home in the beginning of the film.
No matter what happens, Disney wants rights to a "Weapons of Mass Destruction Theme Park" close to Baghdad if not in the center of town. Others are arguing over hotels, restaurants, airports and airlines, even casinos, all to kick back a healthy percentage of the take to the Iraqi people and their well being on condition they accept democracy and stop complaining about the low price of oil set by the Carlisle Group. They must also drop the Euro and go back to the Dollar.
The main stumbling block and cause for delay has been the White House insistence on realism, plus some confusion on just what they want the film to portray. It's a real challenge for the producers.
Everyone agrees that the main theme and perhaps the title must be "I Told You So" but the challenge is to show plausible reason why the weapons of mass destruction were not used during the invasion, how they evaded detection for so long, work in the Al Qaeda somehow, and convince skeptics in other nations of all this. Americans are not the problem since they will believe just about anything that comes from their father-figure in the White House, CNN, Fox News, the New York Times or telemarketers.
One group wants to show how weapons of mass destruction were spirited out of Iraq just before and during the invasion, particularly to Iran that appears to be next on the hit list.
Don't fret; it will all be ready before the next election gets seriously underway and George W. Bush will look like a knight in shining armor on a white horse. Of course, by that time the elections may be called off, we may have been dealt another 9/11, and in order to solve things Bush will have simply appointed himself King. We will, however, still need the court jesters.
"Published originally at : republication allowed with this notice and hyperlink intact."

Dollar Bill{*_*}#10407406/03/03; 23:13:15

If Jesper from Merril Lynch would talk like this........
in public. And as was posted today, no US group seems to flinch no matter what gets said by Fed officials or no matter what kind of state of affairs our financial reporting honesty is in.
Will Jesper be given a talking to? I strongly doubt that.
I am going to guess that the stock market is going to be inflated again and that will do wonders for state finances and peoples portfolios and retirement accounts.
The money is to be made not in gold at the moment, but in riding the build up of hyper inflation until...... Then, as they lose control of
the gold pricing, buy in again.
Of course, timing is unknown.
guessing agin.

mikalG8 meeting #10407506/03/03; 23:54:29

Posted 6/3/2003 3:54 PM Updated 6/3/2003 9:11 PM
World leaders avoid talk of weak dollar, trade differences
By Noelle Knox, USA TODAY
EVIAN-LES-BAINS, France — World leaders said Tuesday that the global economy is headed for a recovery but, publicly at least, dodged many of the thorny issues weighing on the minds of American businesses, investors and consumers.
There was no mention of trade disputes, the weak dollar or genetically modified food in the final, joint statement by the eight heads of state.
"Our economies face many challenges. However, major downside risks have receded, and the conditions for a recovery are in place," said the statement by the leaders of the United States, Great Britain, France, Germany, Italy, Japan, Canada and Russia.
French President Jacques Chirac said that with the war in Iraq over, oil prices lower than they were prewar and the prospect of lower interest rates, investors and consumers should be inspired.
"I don't see a risk of deflation," he said during closing remarks of the three-day summit here. "I am not worried about the Japanese economy ... and I am not worried about the German economy, either."
Both economies, which are critical for global prosperity, are in recession. Japan also is suffering from deflation, a prolonged, broad price decline. And some economists say Germany may also be headed in that direction.
Chirac also indicated that he expects the European Central Bank to cut interest rates when it meets Thursday. Interest rates in Europe are currently 2.5% ? twice the level of U.S. rates.
Meanwhile, the dollar continued to rise after a rare comment from President Bush that the soft dollar was "contrary to our policy."
A spokesman for Japanese Prime Minister Junichiro Koizumi on Tuesday quoted Bush as saying the United States will maintain a strong dollar and added that the prime minister welcomed those remarks.
Americans now have to pay $1.18 to get one euro, the currency used by a dozen European countries. The dollar has lost about 12% of its value against the euro this year, making U.S. exports, such as computers and aerospace equipment, cheaper while making European imports, such as cars, more expensive for Americans.
Chirac said the diplomats discussed exchange rates during the summit, adding, "Every one of us considers stability in currency markets extremely important to promote growth."
At the same time, the U.S. and Europe are locked in several major trade disagreements, including U.S. exports of steel and genetically modified foods, and corporate tax benefits.
Last month, the U.S. filed a lawsuit over Europe's ban on food that contains genetically modified organisms, while Europe has drawn up a list of $4.7 billion of U.S. products that it plans to hit with trade sanctions if the tax benefits aren't changed.
The leaders also failed to reach an agreement on freezing agriculture subsidies that hurt African farmers.
Chirac blamed it on "our American friends not having given their support."
The G8 summits, Chirac said, are designed to inspire confidence in investors and consumers by showing that the world leaders are cooperating and coordinating their actions.
Besides the handshakes for the cameras, however, there were few details on just how much they are cooperating.

GoldendomeCavan Man & Silvercollector--Your Man in the street posts.#1040766/4/03; 00:26:44

I enjoyed your antidotal assessments yesterday of the U.S.economy. I think we need more of them, so here is:

Another "man in the street" report.

In the eighteen years that I have owned and operated a small neighborhood grocery store, I have never, ever, seen so much change and hardship as is occurring now, the past year, in the local wholesale/retail industry.

Where to start? Most dramatic I guess, my Dairy supplier went bankrupt three months ago. One large grocery store, one convenience store, and two hardware stores have locked their doors in 2003.

I had two bread delivery companies for eighteen years. Just recently one pulled out--Said they just had to cut expenses as everything from sesame seeds, cooking oil, flour, chocolate, to labor, medical, and finally "the Nail"--fuel costs, were simply overwhelming them.

My cigarette and candy distributor that had been making twice a week deliveries for the past eleven years cut all routes to once/week delivery mainly because of fuel, but also labor costs. Now I have to be even more of an "expert" when gauging demand, or find a second distributor to do fill-ins.

An elderly gentleman that had been bringing in a few items every month for the past fifteen years just stopped showing up. I don't know what happened there, but for the past five of six years he had been trying to retire. I got the impression at the end, that he was attempting to liquidate his business piecemeal to us retailers.

Another company that had carried health and beauty aids, plus other household type items, decided to pull out of this State altogether, after what they termed was "A disastrous first quarter." (I can sure vouch for that. I had to go back one hell-of-a-long-way to find any lower sales figures for the month of January.

The two major poop companies,{ 'er read "pop" companies} are still trying to get away with every other week (winter) delivery schedules, even though winter is long gone. Again, to save time, labor, transportation costs.

The major grocery wholesaler has upped minimum order sizes--twice--do to labor and transportation costs, again. Sometimes, if the order doesn't look close enough (dollar wise), I just hold off the order for a week, rather than order crud that I really don't need at that time, but then, I almost always suffer, outs.

How is my business doing, you ask? Not so shiny--as you might expect.
I saw "the hammer" hovering in early 2001, after a poor net followed a decent revenue year in 2000. You probably guessed the problem......Again, too much labor cost. So, I like nearly 100% of American businesses today are trying to grow the bottom line, while the top line shrinks (way too much capacity built up in this industry also, in the "90's), by cutting the expenses in the middle--mainly labor, but also, other indulgences that have become so passe with the lingering recession...Like newer cars, and trips, and extra time off, and other expenses that got buried in the income statement.

Now it's five, or six, or maybe even seven days a week, and time-off spent tarring the roof! Business is not so much fun and glamour now as it is an aspect of pride in survival as others fall away---wondering if your turn is coming. My "Ace" is that I have been doing it so long now, that everything is either paid for, or being paid down to near debt extinguishment by my other tenants in the small strip mall. But like Cavan's box company, I have no pricing power, at all. Just offer to the public at a fair price, be competitive, and count on location. ---------Gdome

GonlyoldGAB & Belgian#1040776/4/03; 00:50:06

GAB, I guess that I should not have ben surprised by your information that the Euro is not backed by 15% gold. Since the banking system is ultimately ruled by the same world wide leaders, and since the "protection" offered by US banks is, I'm told, about 10% of deposits, then I should have expected that the euro backing would have been built along the same lines. What Why didn't I see that? I should have know better.

And from what I understand from you, that the gold "backing" of the euro is way less than 15%: perhaps only 90? 95%? 99%? This underscores the lack of reasoning to switch from a 100% fiat US$ to a possible 99% fiat Euro. So obviously it's not a fiat problem. I know many here have been attempting to explain exactly what that other cause is. I'm still trying to digest it. Thank you for your information.

The most frigntening think you said was, "The world's monetary mess stinks and it will likely kill our civilization." This statement arouses survival techniques more important that gold. (Dare I say that?)

In spite of my User name's dyslectic (sp?) play on the words "only gold", I'm tempered by reality in knowing that food, clothing, and shelter will override the need for gold. Gold will still be important for those who are secure in the those basics, but in spite of A's comment that you will not be able to pry gold out of someone's hand once the world goes into a depression, I feel that A still must realize that you can't eat gold. Feel free to correct me if I have misinterpreted A's comment.

Belgian, thank you for you response. When you say that, "(Gold is) Not a contained unprecious metal that is forced to walk in line with a currency/fiat." and "Gold is ment for storing your surplusses and function as a transferable wealth tangible.", I take that to mean that you feel that gold can never be a currency. Somewhere in A's or FOA's archives, he explains that gold can be viewed as: a currency, a commodity, and a something else(?).

I agree with you but probably not for the same reasons. My reasons are somewhat simplistic in that I don't see how gold can be demoninated into pennies. I will continue to read your and the other posts here to gain more knowledge on this issue.

You also said,

"The euro as an alternative fiat is will become as worthless as the dollar over time if the euro-system should copy the dollar-system with unfree, contained Gold !!! But this will NOT be the case ! The ECB has made its intentions, for Freeing Gold, very clear with openly exposing its goldreserves to the present dollar-paper-gold-market pricing. The ECB wants to set Gold Free from this dollar-system with the installment of an euro-PHYSICAL goldmarket !"

Let me see if I understand this. In my own words, I think you're saying that the Euro will not be able to survive as a currency if it is not tied to physical gold and that the ECB wants to establish the link between gold and the Euro. If my interpretation is correct, seems like the ECB has a long way to go before it meets it's objective. There is much here that I don't understand. Thank you for giving me some food for thought. I will think on these things. Take care.

GonlyoldCorrection to my post#1040786/4/03; 00:57:34

please change my sentence from "perhaps only 90? 95%? 99%?" to "perhaps a fiat equivalent of 90%? or 95% or 99%."
TopazDebt and Credit. @ BB#1040796/4/03; 01:09:10

ALL maturities are under the pump BB. Mr Greenspans role now is to attempt to instil in the market psyche low IR's are here to stay. The quirkiest thing now will be an ECB rate-cut... if it forces DX well above 94 it could start an avalanche of Futures to Cash ....GAME OVER!
BelgianMineweb reporting on LBMA conference - Lisboa#1040806/4/03; 01:27:17

The report in 3 words : DOOM DOOM DOOM ! Thanks Mineweb...

LBMA (London Bullion Market Association) where the equivalent of 500 tonnes Gold per day (ATHs were 1,000 tonnes/d) are *visibly* traded and an estimate of 1,500 tonnes Gold per day, *unvisible*.
In other words, this oldiest London based goldmarket, trades the yearly total new Goldproduction in *one* day. The paper goldcontract equivalent of 2,500 tonnes (visible + unvisible), that is.

Nobody is going to object, when we state that, the LBMA-insiders know * EXACTLY * what is happening in the Global Gold-World ! Repeat...the LBMA_Insiders (Rothshild-level).
A jolly group of LBMA-messengers got a nice conference-stay offered in sunny Portugal, where the living is nice and easy. These messengers had only ONE message for Gold's future : DOOM and GLOOM ! Our dearest and much appreciated clown Andy Smith (Mitsui), "boomeranged" POG for 2004 at 250$ !!! Yep, minus 100$ for your-mine-our, precious ounce-coins !

Please, take note that Gold is a "Boomerang" buy it and then you sell it again...according to the honorable Smith.

That same Mineweb (vehicle) states (re-confirms) in another article that present gold-consumption is 4,000 tonnes a year. And total production was...And the balance was "boomeranged" Gold !

Can anyone here guess the "REAL" message ??? TIA !

Dollar Bill, you surely can...(snap, joehoe *>*)

Topaz@Gonlyold.#1040816/4/03; 01:44:42

Sorry to butt in Sir...It may assist your understanding if you refer to ECB Gold as "reserves" and not "backing". The term "backing" is more relevant to the Gold standard of yore. Where the ECB differ is the Mark to Market evaluation of their Gold reserves. The "backing" today is more closely represented by the Human resources of a Nation/Bloc. In the case of America every man, woman and child is saddled with approx $30,000 Debt...Gold (at birth) and throughout it's lifetime (infinite) is debt free and from time to time extends it's credit-worthiness into the stratisphere. It's considered by some we are now at the beginning of one of these "Times".
BelgianHSBC - Forex analysts#1040826/4/03; 03:04:52

The world's central banks are in the process of exchanging their dollar-reserves for euro-reserves. A lot of inconsistant warnings are criscras shouted from the dollar-pit !
WAC (Wide Awake Club)The US Economy and the mighty $ needs all the help it can get#1040836/4/03; 03:39:14

A US brothel is offering free sex to US troops who took part in the war against Iraq to thank them for their endeavours abroad.
The Moonlight Bunnyranch in Carson City, Nevada, where brothels are legal, has produced a more erotic version of the standard TA-50 army kits issued to troops headed into battle.

WAC: Aid package for the Airlines, Stock Market, Auto industry etc. Why not extend this generous facility to other industries too. It all helps to increase and maintain liquidity. What as/is happened/happening to this once Great Land?

Black Blade"Currency War" - Competitive Currency Devaluations Ahead #1040846/4/03; 04:27:40


The move toward competitive currency devaluations that we have been expecting is quickly gathering steam as global economies continue to stagnate. The weakness in the dollar and strength in the Euro is putting increasing downward pressures on the already weak European economies, and elected officials are pushing for an EU rate cut at this Thursday's meeting of EU monetary leaders. Germany is already flirting with recession as GDP was negative in the first quarter while unemployment in the Euro zone is at a three-year high of 8.8 percent. With inflation under control even the EU central bankers will probably give in and lower rates by at least 25 basis points, or perhaps even 50. Whether the cut is 25 or 50 points, it will probably be only the first of a series of interest rate decreases through the remainder of the year.

Chairman Greenspan, too, clearly signaled today that another fed funds rate reduction was likely at the upcoming FOMC meeting on June 24th and 25th. With the economy failing to respond to the massive monetary and fiscal stimulus already in the pipeline, the Fed is desperately trying to pump up both the bond and stock markets at the same time. To do this they are saying that the economy will recover, hoping that this will stimulate the stock market. On the other hand they are saying that inflation is no threat, so the cost of taking out a little insurance (a rate cut) against the possibility of deflation is minimal. In addition they are also continuing to talk about the possibility of taking non-traditional measures such as long-bond purchases, thereby helping out the bond market.

Black Blade: Ah yes, the "Currency War". Add to this the Ministry of Finance through the Bank of Japan is selling off the Yen like there's no tomorrow. Everyone wants the weaker currency. Anyway the ECB will cut 50 bps and the Fed will follow up at least a 25 bps and maybe even 50 bps cut. The Japanese will say "what a bargain" and buy the lower yielding bonds while throwing around worthless Yen to weakening it further. Quite amusing really.

Socrates964Silvercollector#1040856/4/03; 05:30:56

Silvercollector, c'mon dude. Think about it.

I'm not abusing you. I actually thought your post on everyone losing their jobs was very interesting.

The point I'm making has nothing to do with some mystic association between gold and the Euro, but that Roach seems to be on 'message discipline' like all the other Wall Street shills. Call his work what you like, but hard analysis it ain't.

He's thus doing nothing more than resurrecting the old Cold War argument of 'it's bad here, but much much worse over there', and backing it up with ridiculous arguments of the kind you find on the Heritage Foundation site.

As such, when he tries to claim that the strong dollar is the same thing as robust economic growth, I slap my forehead with my palm and shout 'Duhhh!' because by the same argument, France, Germany and Iraq have just become economic miracles with surging GDP in dollar terms.

Unfortunately, it seems to me that if one makes this kind of point, a lot of people here assume that one is being a Franco/Germanophile partisan, when my point is that this is an idiotic tendentious argument, and the fact that a previously sound economist like Roach is making it tells you how far gone things are. Surely you see this???

This will be my last post for a while.

Cavan Manmikal104703#1040866/4/03; 05:51:29

Thanks for that one buddy. I think Pacino should play rumsfeld because both are so, "over the top". You know, rumsfeld might just be the AU market's secret weapon.
BoilermakerMirant on the ropes#1040876/4/03; 06:38:21

Mirant bankruptcy threat shakes U.S. energy market

NEW YORK, June 3 (Reuters) -
Rumblings from electricity generator Mirant Corp. that it might seek bankruptcy protection have stirred nerves in an already troubled energy market, traders said on Tuesday.

"Mirant is a big company that could potentially disrupt the market. They are probably holding a lot of positions," one Midwest natural gas trader said.

Atlanta-based Mirant, one of the nation's top merchant energy traders, on Monday offered its creditors a plan to restructure $1.45 billion of debt as part of a wider refinancing effort aimed at avoiding bankruptcy.

At the same time it warned that if the plan were not quickly approved, it might seek Chapter 11 bankruptcy protection using the same plan as the foundation for restructuring.

The move is the latest in a series of setbacks for an industry hit hard by the downfall of energy trader Enron Corp. in 2001, federal investigations into market manipulation and subsequent severe credit downgrades.

"Mirant is one of the few big players left," one New England electricity trader said. "If Mirant exits the market, it's going to be a lot harder to enter long term deals."

A year ago, Mirant was the biggest natural gas trader and sixth biggest power trader in the United States, according to a study by energy analyst Scott, Madden & Associates.


Over the past year, electricity traders have nearly abandoned speculative trading to return to the sale of megawatts generated at their power plants.

Speculative trading, which made Enron the biggest energy trader in the nation before it failed, involves making a bet on whether power prices will rise or fall in the future based on such factors as the weather or fuel supplies.

It is potentially more lucrative than trading around physical assets, like power plants, but much riskier.

Mirant was created by Southern Co. to buy and build power plants across the nation that would sell power into the newly deregulated regional electricity markets.

As with other energy merchants hurt by falling power prices, like Xcel Energy Inc. unit NRG Energy and PG&E Corp. unit PG&E National Energy Group (NEG), Mirant's credit rating has been cut to junk and its stock price has fallen sharply.

Here's another huge paper energy trader going down even though there's no sign (yet) of fraud. Someday soon the paper gold traders will meet the same fate. Back to basics be it physical energy or physical gold

Cavan ManNEM#10408806/04/03; 07:28:58

Newmont Announces Acceptances of Six of Seven Hedge Counter Parties, Representing 94% of Yandal Hedge Book Ounces
Tuesday June 3, 8:03 pm ET

DENVER, June 3 /PRNewswire-FirstCall/ -- Newmont Mining Corporation (NYSE: NEM - News) today announced that its subsidiary, Yandal Bond Company Limited (YBCL), has accepted assignments from six of a total of seven gold hedge counter parties for all their gold hedge contracts with Newmont's Australian subsidiary, Newmont Yandal Operations Limited (Yandal), formerly Great Central Mines Ltd., for a total cash payment of $77 million.
The total cash payment represents $0.50 for each $1.00 of net mark-to-market hedge liability, as calculated by YBCL as of May 22, 2003. These assignments represent 94% of the ounces in the Yandal hedge book and 76% of the negative mark-to-market liability of the Yandal hedge book. Yandal remains obligated to deliver to YBCL for the contracts assigned under the offer.

YBCL's offer to acquire all of the gold hedge contracts entered into between Yandal and its counter parties expired at 5:00 p.m. Mountain Daylight Time today. The remaining counter party alleges a right to terminate its gold hedge contract with Yandal before its respective maturity, based on the alleged occurrence of an early termination event under the contract.

Pursuant to the announcement of May 29, 2003, YBCL has also offered to purchase for cash all of the outstanding 8 7/8% Senior Notes due April 2008 of Yandal, YBCL has said in the Note offer that its failure to acquire all of the Notes not presently owned by it or all of the hedge contracts may result in an insolvency with respect to Yandal.

Newmont, based in Denver, is the world's premier gold mining company and the largest gold producer with significant assets on five continents.

CalidorOld Yeller - Lessons on how to make 43 trillion disappear. #10408906/04/03; 07:30:37

Old Yeller,

Thanks for yesterday's post (msg#: 104032) and link to the article. I was curious about the 43 or 44 trillion (ok, ok, a few trillion here, a few trillion there, pretty soon we're talking real money) and did a little "mining for more" information.

Snippit –
June 2, 2003, 1:23AM

Lessons in how to make $43 trillion disappear
Universal Press Syndicate

The material to be deleted from the budget document was an updating of generational accounting. O'Neill had requested an estimate of the government's true long-term obligations.

The new accounting shows the United States is broke.

It shows the true obligations of government were 10 times larger than Treasury debt held by the public. It shows the present value of these unfunded obligations is a mind-numbing $43 trillion.

In a recent telephone conversation I asked one of the project economists, Jagadeesh Gokhale, why he thought his work was cut. Gokhale, a senior economist for the Federal Reserve Bank of Cleveland, was circumspect. He suggested the figures were a surprise to the new Treasury secretary.
The American Enterprise Institute will soon publish a pamphlet, co-authored by Jagadeesh Gokhale and Kent Smetters.

The draft copy does more than lay out the size of the government's unfunded liabilities. It shows how much the current generation is benefiting at the expense of the next.

Calidore - The draft mentioned above is titled "Fiscal and Generational Imbalances: New Budget Measures For New Budget Priorities". Just click on Gokhale's Paper or Gokhale's Presentation to see them in pdf.

LeSinRussia's Reserves Soon To Be 50% EUROs#10409006/04/03; 07:43:54

Soon All Will "WILL" March to the Same Beat - Cheers "S"

Russia will switch to euro

The euro will make up at least a half of Russia's foreign exchange market in seven years, against the current 10 percent

During the 300th anniversary celebrations in St. Petersburg, Russian President Vladimir Putin said that the cooperation between Russia and the European Union could result in expanding the euro zone beyond EU borders. He also noted that the Central Bank of Russia had been increasing the percentage of euros in Russia's gold and foreign currency reserves. According to analysts, Mr. Putin's statement is purely political, and it is unlikely to be followed by concrete economic steps. However, the Kremlin's political backing of the euro in the euro-dollar stand-off can help speed up the process of Russia's foreign currency diversification, which is taking place due to natural reasons. Economists believe that the euro's role in the Russian economy will be strengthening, and the European currency will reach parity with the dollar in a few years’ time.

According to economists, the euro has already gained a foothold in Russia. "I think the euro does not need the Russian President's political backing," Denis Rodionov, an economist with Brunswick UBS, told RBC Daily. In his view, Mr. Putin's words about transferring part of the Central Bank's reserves into euros are not a guide to action but just a statement of fact. "The Central Bank has been purchasing euros actively over the past six months, and it is no secret. However, this policy is aimed not at helping Europe support its currency but at diversifying Russia's reserves," Mr. Rodionov stressed. Alexey Vorobyov, an analyst with the Aton investment company, agrees. "As Europe remains Russia's largest trade partner, it is necessary to increase the share of euros in the Central Bank's reserves. This is necessary in order to satisfy the demand for the European currency on the market, and, consequently, to smooth fluctuations in the ruble's exchange rate against the euro," he said. According to experts, about a half of Russia's foreign trade operations are with Europe.

The euro has strengthened by about 20 percent against the dollar since the start of the year. Nevertheless, the dollar's position as ‘the world currency’ is still very strong. "The dollar will remain the ‘reserve currency’ for a long time to come, because the American economy is still the strongest in the world. The dollar is over 300 years old, and, in fact, it replaced gold as a reserve instrument. And the euro is just four years old, and it is by far not as strong," Mr. Vorobyov said. That is why the European currency will not be able to play a role comparable with the role of the dollar, at least over the next one or two years, he believes. Indeed, over the past hundred years, Americans have managed to flood almost every country on the globe with their currency. Anton Struchenevsky, an economist with Troika Dialog brokerage, told RBC Daily that, in the estimation of the US Federal Reserve System, about 80 percent of the total dollar supply was outside the United States. "The circulation of a national currency outside the country is good for its economy. It means that investments are being made in it. And the status of a reserve currency directly supports the dollar," Mr. Struchenevsky said.

It is difficult to say when Europe will be able to use this resource and support the economy through the investments in its currency from abroad. "The question is how many euro notes will be printed. One thing is clear: there are more dollar notes (than euro notes) on the market now," Mr. Struchenevsky says. But analysts say the euro stands a good chance of strengthening its position both in Russia and on the world market. Certainly, the current weakening of the dollar affects the situation on the exchange market, with many investors trying to switch from the dollar to the euro, thus increasing the share of the European currency in global economy. And the deeper the dollar falls, the higher the demand for the euro will be. But, according to experts, the euro's success will be due not just to America's weakness but also to the strengthening of the European economy. "We are now witnessing the emergence of Europe as a powerful rival to the United States. And the admission of another ten countries into the European Union will further increase the euro's weight in the world," Mr. Vorobyov said.

As for the euro's position on the Russian market, analysts say the European currency should play a stronger role there. Traditionally, Russian exporters mostly receive dollars and not euros even for the goods they supply to Europe. This, in its turn, leads to the weakening of Russia's balance of trade. "Europe accounts for about 50 percent of Russia's foreign trade. So, fundamentally, we should give preference to the euro rather than to the dollar," Mr. Vorobyov noted. In his opinion, Mr. Putin's statement should be interpreted as a sign for foreign trade companies, particularly exporters, about the necessity of switching to the European currency. However, Mr. Struchenevsky believes that this process will go in a natural way, and Russian authorities are unlikely to put pressure on domestic companies: they will be guided by simple commercial interests.

The percentage of the euro in the cash savings of Russian people remains rather low, as well as in the payments of exporters. "Despite the situation on the world market, Russians have not yet lost their confidence in the dollar," Mr. Struchenevsky says. But this trend is changing, even if gradually. Earlier, the dollar made up nearly 100 percent of foreign currency purchased on the Russian cash market, but the figure has dropped to 90 percent over the past few months, giving way to the euro, according to the economist. According to him, the success of the euro on Russia's cash market hinges on the well-being of Russian citizens. "As living standards of Russian people rise, they will need various investment instruments. In addition, the citizens will become better acquainted with economic reality, and they will realize that investments should be diversified," Mr. Struchenevsky stressed. In his opinion, if Russia's GDP doubles by 2010, the ratio of the dollar to the euro in the Russian economy will be 50/50. But this will hardly be a substantial support for the EU economy. According to the economist, the deposits of Russian people in foreign currency total about $13.5bn, while their cash savings are estimated at about $35bn. This is a lot for Russia, but not for the world economy.


Soon the Summer Evian, St Petersburg White Night Festivals and G-8,9 & 10 Summer Picnics and Garden Parties together with photo oportunities of forced smiles and painful handshakes will give way to the reality of a worthless US$ and rising star status of the EURO and its' right/will to have oil supply to World priced in EUROS.

All this along side of Free GOLD that is not tied to New York or London Paper Contracts. See continued low price paper gold as they unwind paper positions and throw more paper on the fire.

Yes, Belgian, quick as snap - they will announce disconnection from paper gold and physical real price physical gold.

The Coalition of the Willing that occupied a soverign nation and is stealing that nations natural resources
will lose more respect. That same coalition now claims to have a Road-Map for ME peace. Yes a ME peace together with free trade priced in US$.

What makes me think that these boys are off with the fairies.

Ari, Belgian - Many here - Hear & Do understand - Phycical Gold in most forms - Get you Some, Yes!
Cheers "S"


Russia won't be discriminated against in Iraq
US authorities will not allow any discrimination against Russian companies in Iraq, Russian Foreign Minister Igor Ivanov said after a meeting of the Russia-NATO Council in Madrid on Wednesday. According to him, representatives of the US administration provided the necessary assurances to the Russian side during recent consultations in Moscow.
Mr. Ivanov stressed that Russian companies would participate in tenders for the development of Iraqi oilfields on equal terms with foreign companies. He expressed hope that Russian companies would manage to win the tenders, as they have vast experience in dealing with Iraq and are acquainted with the peculiarities of this country.

During his visit to St. Petersburg last weekend, US President George Bush also spoke about the possibility of Russian oil firms working in Iraq. However, it is unclear how much of the Iraqi pie Russian companies will get and how strong the Russian presence in Iraq will be. In this respect:
Mr. Bush indicated that Moscow should not expect any serious oil contracts with Baghdad

21mabry(No Subject)#10409206/04/03; 09:21:14

The stock market is singing her siren song trying to tempt the forgetful back in.She is like an old girlfriend you almost have forgotten about,then she calls you.O well we are all fools and prophets lifes a stage and were all in the cast.
John the JuteThank you#10409306/04/03; 09:23:29

On behalf of John H Watson MD, lately surgeon to Her Majesty's forces in Afghanistan, and myself, I would like to thank the folk of Centennial Precious Metals for sponsoring the contest, to thank Gandalf the White for organizing it, to thank the Lady Waverider for being away and so unable to win it, and to thank you all for information and stimulation.
Dollar Bill`*..*`#10409406/04/03; 10:14:32

Socrates 964,
Dont forget that you have readers who look forward to your insights. That includes me. Stick around, it is interesting times.

USAGOLD / Centennial Precious Metals, Inc.What you need to know before you buy your first ounce of gold...#10409506/04/03; 10:31:44

Q. How does USAGOLD / Centennial Precious Metals position itself among its competitors with regard to credibility, reputability and pricing?

MK. USAGOLD / Centennial Precious Metals has always been considered one of the most reputable firms in the business and it's always been that way. We have placed literally thousands of ounces of gold with investors and our repeat business and referrals are both very strong. That doesn't happen unless you know what you are doing and your clients know that you know what you are doing. If I were to sum it up, I would say we combine the first rate services and research that you would expect from a very large firm with the favorable pricing you would expect from a smaller, client-conscious firm.

mikal@Dollar Bill#10409606/04/03; 10:42:35

Well said.
USAGOLD / Centennial Precious Metals, Inc.Our Latest Buyers’ Group Special . . .#10409706/04/03; 11:06:51">Gold Buyers Group Special
Socrates964Dollar Bill#10409806/04/03; 11:34:52

Thanks for your gracious comments. I'm actually going to be travelling quite a bit as an attempt to stave off boredom with gold, which is a very exciting market in dollars, but a very dull market in euros/C$. I talked to my technical analysis guru last week who makes 40-50% annual returns trading Fib patterns year in year out, and he admitted that he was clueless as to which way the markets were going for the first time in 40 years but suspects that the US is heading for hyperinflation.

From a macro point of view, this market feels like Argentina, in that it was obvious to anyone with a basic grounding in economics that the economy was going over the cliff by 1997, but one had to put up with 4 years of spinning before it actually happened. The lesson to be learned from that economy is that appearances are maintained for as long as it takes the elite to get their money out.

Perhaps the launch date of the new gold bullion fund (GLD) is our best variable for judging when this might happen.

Gandalf the WhiteWOWSERS -- IT that REALLY you SPIKE ? or an ERROR ?#10409906/04/03; 12:19:40

Someone please give me a confirmation second source !

Gandalf the WhiteYep -- AN ERROR !!!!#10410006/04/03; 12:21:43

Forgetaboutit !

Great Albino BatPrescription from Dr. GAB.....the way to health#10410106/04/03; 12:43:20

June 4, 03

The Patient:

XXIst Century World.

Diagnosis: Humongous constipation following decades of overindulgence in unsound monetary and financial practices.


The patient will take daily enemas for the next ten years, to flush out all malinvestment and bankrupt companies. The patient's digestive system is blocked and this produces very bad breath and pronounced lassitude.

Hundreds of millions of inhabitants of the lower intestines will be flushed out, and will have to invent jobs for themselves.

Take a daily aspirin, and call me next year.


The GAB.

GonlyoldReply to Topaz#10410206/04/03; 14:06:05

Thank you, Topaz, for your informative clarification. I value information like that. Thanks again.

You commented that, "The "backing" today is more closely represented by the Human resources of a Nation/Bloc. In the case of America every man, woman and child is saddled with approx $30,000 Debt..." Much said in this verbage.

I won't extrapolate too much on the above except to opinion that it's interesting to note that there is no concerted effort in America to encourage the "human resources" to stay away from credit (debt). There are no economic programs to reward people for paying off their loans. There is no advertized cautions to keep people from selling off their future labor. If anything, they are constantly bombbarded with enticements to use credit. And once the human make up of America, or any country, becomes debt ridden, how can that counry itself, not be debt ridden?

Country's use their human resources as collateral for national loans. All that labor is valuable to the lenders. So the human collateral is important from the perspective of these loans.

But what happens when the future labor is all tapped out? The only thing the country can look forward to is being obligated and controlled by the lender. Not exactly a definition of freedom.

And what about the physical gold that's purchased with instruments of debt? The American dollar, i.e., the Federal Reserve Note (FRN), is an instrument of debt. If a debt instruments, FRN's, are used to buy non-debt gold, does not that physical gold now become a debt also? Can a bankrupt debtor own anything? Scarey.....

Black BladeADJUSTING NUMBERS TO THE POINT OF UNREALITY #10410306/04/03; 14:17:59


June 3, 2003 -- YOU probably didn't catch this on the news last week, but there are now 12 seasons in the year. Yeah, seasons. Not months. Who says so? Well, not me. It's the Bureau of Labor Statistics, which, starting with the politically important employment figure that will be released this Friday, has declared that the way it had been seasonally adjusting its numbers is no longer good enough. Starting with the tally for May - which will be released at precisely 8:30 a.m. Friday - the BLS will seasonally adjust its statistics each and every month. Officially the change is to something called the "Concurrent Seasonal Adjustment for Industry Employment Statistics." You can download a full academic paper on this from the BLS Web site.

The problem is, if you adjust a figure often enough you can completely lose touch with reality. And if you are adjusting monthly for the "seasons," why not daily? Why not change the numbers whenever they aren't to your liking? Naturally, both the job growth/loss figures and the unemployment rate will be the hottest topic of conversation this week, especially since the nation's "help wanted" ads index is currently at a 47-year low and more than 400,000 people each week are now filing new claims for unemployment insurance.

Black Blade: More statistical massage coming from the BLS. They hate raw data so they fudge the numbers a bit and "smooth" data with a few other statistical filters and then selectively release unemployment data. No one in government is too pleased when someone points out the real unemployment data but then few people with media access do that anyway. Just too painful to think about.

Black BladeThanks to the recent market rally, stocks are awfully expensive again.#10410406/04/03; 14:24:42


Take a look at what's been happening in the stock market, where investors have wholeheartedly embraced the Fed's promise to keep rates nice and low for a good long time by buying everything in sight. And while it was possible earlier this year to argue that stocks were at something like an appropriate valuation, you'd be hard-pressed to call them anything other than expensive at this point. If you look at earnings under generally accepted accounting principles, the S&P 500 is trading a price-to-earnings (P/E) ratio of 31.4, up from 27.5 at the end of March. Before 1998, it had never been above 30. If you are a kind and forgiving person, you can use pro forma earnings -- the numbers that companies post before charges for stuff like plant closings, layoffs, and the like. On that basis, the S&P's P/E is 19.7, a level rarely seen before the gaga years of the late 1990s.

Black Blade: Indeed, stock valuations are absurd and we appear to be reentering the bubble again. The end result will be the same with the small fry getting burned as they get lured in and the big boys bailing out laughing at the suckers. I guess milking investors out of over $5 trillion the first time around was not enough.

Black BladeWith jobs scarce, more than half of this year's college graduates will head home to Mom and Dad.#10410506/04/03; 14:33:41


NEW YORK (CNN/Money) - Study hard, get into a good college, graduate -- move back in with Mom and Dad? That's hardly what most parents had in mind as they were cutting checks for upwards of $100,000 to cover college costs. But the moribund economy has created some of the dimmest job prospects in years for grads. According to a study by the National Association of Colleges and Employers, 42 percent of employers plan to hire fewer new college graduates than they did last year. Meanwhile, only a few graduates with the most lucrative degrees can expect higher starting salaries than in years past. As a result, the Class of 2003 finds its ranks filled with so-called "boomerang" twenty-somethings. In fact, 61 percent of college seniors plan to return to their family home after graduation, according to a survey taken this spring by This year's class isn't the only one living at home, however. Young adults in their twenties -- some armed with graduate degrees -- have also returned to the nest.

Black Blade: With the "Bone Pile" growing and fewer jobs a lot of these new grads are finding it harder to land a job. Even those with some work experience are coming home to live with parents. I saw a report not long ago about high tech engineers and software programmers leaving the high priced Silicon Valley after being laid off to live with mom and pop. "Interesting Times"

Chris PowellNewmont beats the bullion banks into submission#10410606/04/03; 14:48:27

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Cavan ManThis information is relevant to the gold market guys.#10410706/04/03; 15:53:54,2763,970331,00.html

Wolfowitz: Iraq war was about oil

George Wright
Wednesday June 4, 2003

Oil was the main reason for military action against Iraq, a leading White House hawk has claimed, confirming the worst fears of those opposed to the US-led war.
The US deputy defence secretary, Paul Wolfowitz - who has already undermined Tony Blair's position over weapons of mass destruction (WMD) by describing them as a "bureaucratic" excuse for war - has now gone further by claiming the real motive was that Iraq is "swimming" in oil.

The latest comments were made by Mr Wolfowitz in an address to delegates at an Asian security summit in Singapore at the weekend, and reported today by German newspapers Der Tagesspiegel and Die Welt.

Asked why a nuclear power such as North Korea was being treated differently from Iraq, where hardly any weapons of mass destruction had been found, the deputy defence minister said: "Let's look at it simply. The most important difference between North Korea and Iraq is that economically, we just had no choice in Iraq. The country swims on a sea of oil."

Mr Wolfowitz went on to tell journalists at the conference that the US was set on a path of negotiation to help defuse tensions between North Korea and its neighbours - in contrast to the more belligerent attitude the Bush administration displayed in its dealings with Iraq.

His latest comments follow his widely reported statement from an interview in Vanity Fair last month, in which he said that "for reasons that have a lot to do with the US government bureaucracy, we settled on the one issue that everyone could agree on: weapons of mass destruction."

Prior to that, his boss, defence secretary Donald Rumsfeld, had already undermined the British government's position by saying Saddam Hussein may have destroyed his banned weapons before the war.

Mr Wolfowitz's frank assessment of the importance of oil could not come at a worse time for the US and UK governments, which are both facing fierce criticism at home and abroad over allegations that they exaggerated the threat posed by Saddam Hussein in order to justify the war.

Amid growing calls from all parties for a public inquiry, the foreign affairs select committee announced last night it would investigate claims that the UK government misled the country over its evidence of Iraq's WMD.

The move is a major setback for Tony Blair, who had hoped to contain any inquiry within the intelligence and security committee, which meets in secret and reports to the prime minister.

In the US, the failure to find solid proof of chemical, biological and nuclear arms in Iraq has raised similar concerns over Mr Bush's justification for the war and prompted calls for congressional investigations.

Mr Wolfowitz is viewed as one of the most hawkish members of the Bush administration. The 57-year old expert in international relations was a strong advocate of military action against Afghanistan and Iraq.

Following the September 11 terror attacks on the World Trade Centre and Pentagon, Mr Wolfowitz pledged that the US would pursue terrorists and "end" states' harbouring or sponsoring of militants.

Prior to his appointment to the Bush cabinet in February 2001, Mr Wolfowitz was dean and professor of international relations at the Paul H Nitze School of Advanced International Studies (SAIS), of the Johns Hopkins University.

Cavan ManWolfowitz#10410806/04/03; 16:37:37

Really, that is completely outrageous. It must be a misquote. I can't believe it.
Jacob MarleyNewmont beats the bullion banks into submission ?? - #104106#10410906/04/03; 16:43:45

Don't you think that's a bit of spin? Can you not see what this is perfect template of? When push comes to shove and deliverability is understood to be impossible without killing the deliverer ---- what happened?????


Negotiate cash out at pennies on the dollar !!!! And no gold changed hands that might have helped set up this ever elusive "short squeeze".

And these were the big boys. How then will any of you as "small spec", fare any better with your single or double digit total contracts???

Just a foretaste of how it's going to work on down the line.

goldquestYeah, but...#10411006/04/03; 16:50:20

does it really matter that the crooks in the White House,Defense Dept., Congress and big oil, lied to the American people and the rest of the world, when they have real criminals to pursue? The Martha Stewarts of the world must be taken off the streets, to make them safer for , "our children!" After all, Martha did cash in her stocks, worth about $200,000. How dare she! That is about the same amount that Hillery Clinton made a few years ago on her "Hot" tip on the futures market! Wink-Wink! It is coming unraveled for the gang of thieves. Best get your gold in possession while you can!
Cavan ManJacob Marley#10411106/04/03; 16:50:21

Great point! That's FOA 101.
Cavan Mangoldquest#10411206/04/03; 16:52:17

Yeah, and that "sea of oil" was worth blowing the kid's arms off and 86ing his parents. Go ahead and pull this eh?
R PowellSocrates964#10411306/04/03; 17:03:42

Earlier today you wrote...

"Thanks for your gracious comments. I'm actually going to be travelling quite a bit as an attempt to stave off boredom with gold, which is a very exciting market in dollars, but a very dull market in euros/C$. I talked to my technical analysis guru last week who makes 40-50% annual returns trading Fib patterns year in year out, and he admitted that he was clueless as to which way the markets were going for the first time in 40 years but suspects that the US is heading for hyperinflation"

I've always been suspicious of any and all trading systems. I suspect that excellent money management is more important than any system and that with good management, money can be made even with the toss of a coin determining one's position. However, commonly traded systems often become self-fulfilling prophesies which can be helpful if traded properly.

All that is an idle thought as I really wanted to say "Fare thee well" on your travels and also wanted to suggest that if the gold market in euros is boring, there are many others that may offer a greater challenge.

Remember too, we're never more than an internet connection away and we'll expect a full report either as you travel or upon your return. Have fun! ;>)

CoBra(too)NEM's Yandal Bluff -#10411406/04/03; 17:10:15

@ J. Marley - I guess you've touched reality.

The mega bullion bank hedgers are seemingly protected and vice versa protect their major producing hedgers. Otherwise, we'd have seen Ashanti type defaults at POG 330, 350, 370 or 390. Whoever lastly holds the bag is still unknown, though we may speculate that these guys got some kind of a carte blanche from very high up - and the bag is as always held by their trusting citizens and tax payers.

@ CM - Diplomacy is about elegantly evading reality, while the globe is now challenged by a group of US admin officials stuffing their blatant arrogance down our throats, unfiltered. At least we know where we stand - expendable ... Welcome to the new world (dis) order ... cb2
PS - and the ECB may well succumb to the international game of cutting IR's by 50bp and join the race to the bottom ... or is it beggar thy neighbour all over again ... ?

Brilliant, we sure came a long way from the memories of the 30's ...

Black BladeCobra(too) - memories #10411506/04/03; 17:16:20

Ah yes, as philosopher George Santayana said:

"Those who do not remember the past are doomed to repeat it"

Such is life. Cheers!

- Black Blade

off to the gym!

R PowellJacob Marley#10411606/04/03; 17:36:59

Private bankruptcy does not indicate Exchange default

Any bankruptcy by any individual and/or company often leads to pennies paid on the dollar for prior contracts or obligations. This should not be confused with legitimate futures contracts which are 98% of the time settled in cash, not gold, silver, cotton or soybeans. Entrance into the exchange casino requires margin money up front and immediate additional funds if so dictated by the market movements. All trades are cleared daily with the clearing houses insuring payment for the winners. It's mostly a cash exchange with the potential for actual delivery.

Please do not confuse these exchanges with covert, private deals which default as a result of bankruptcy. The only thing these transactions have in common is that both are derivatives of the POG. Legitimate, needed drugs are available with a doctor's prescription from a pharmacy for a cost. Illegal drugs are available from your local coked out drug lord for a cost. I'll not even suggest that the two can be compared nor would I suggest that just because you might get ripped off by the drug dealer, that therefore pharmacies are dangerous. Comparing private bankruptcy settlements to futures derivatives backed by the exchanges is like comparing apples to dumptrucks or rattlesnakes to guinea pigs. Waiting for the futures exchanges to default might require many livetimes. They are simply that--Exchanges--existing by charging a small transaction fee. Private, OTC deals are simply an entirely different ballgame.

R PowellJacob Marley#10411706/04/03; 17:52:22

Your words....

" And these were the big boys. How then will any of you as "small spec", fare any better with your single or double digit total contracts??? "

Since you asked, quite well, thank you, I caught both the spike up and retraction down in both gold and silver. I'm currently still short silver (short term) but ready to reverse at the drop of a pin. I'm always long silver, long term but always hedged. I'm not rich from trading but I am on the positive side, but, I do not recommend this endeavor, gambling, investing, whatever (pick a name) as it is much too risky, requires great effort and time, and is too hard to understand without much effort, at least, more than most people are willing to commit. Physical possession has almost no traps, pitfalls, room for error, potential for mistakes etc.

CoBra(too)Late Nite Musings ...#10411806/04/03; 18:19:20

... The western, now post industrialized, economies have smartly moved on to the next level of production. While the production of tangible and in some cases even usable goods have declined to a trickle - why, the Chinese can do it cheaper in some cases even better - the service sector, led by the financial service industry has grown exponentially in the US. Whatever memories of a productive economy we might have had is a delusion.

Well, why not. Somebody has to recycle the exponentially growing dollar debt, re-package it and sell it to the rest of the world in almost risk free, derivative hedged nutritious portions. After all the myriads of Dollar paper, uh, eletronic blips can't be digested wholesale anymore -says Greenspan - though, he finds it's a mere problem of the digestive tract. If the global community can't recycle the green stuff as rapidly as we- the FED - can grow it, then it becomes a problem of indigestion. And - even if the nutrition value of the green fodder decraeses with every repo any other fodder is still not adequately matching the mass production of at least fodder.

As some alternate paper and nutrition food producers are slowly expanding their gardens, the worlds main greenery is stepping up its production frantically in order not to lose any market share. In the process they also hedge their bets and in an unfriendly manner take over the energy suppliers to their greenhouses.

As the yields of the crop is becoming more and more ungainly and now slowly turning negative - the nutrition value of "Soylent Green" is diminishing exponentially.

... yearning for the old green, green grass of home ... and a golden sunrise - cb2

GoldiloxHas World Oil Production Peaked?#10411906/04/03; 18:24:10

Has World Oil Production Peaked? Has World Oil Production Peaked? Has the World's Oil production Peaked? snippit:

?Historians some years from now are going to get the giggles because my 2001 book (Hubbert's Peak: The Impending World Oil Shortage) failed to identify the year 2000 peak, even after it happened. My book attracted some criticism because it was too gloomy; turns out I wasn't gloomy enough. Back when I expected the peak to arrive around 2004, the thought of life in the post-peak years was frightening. So what has happened since the peak year 2000? More than a million jobs lost in the U.S.A., many retirement funds wiped out, government budget surplus reduced to deficit, interest rates near zero unable to jumpstart the economy. Even the loss of the World Trade Center was a Middle East byproduct. It exceeds my worst fears.'


An article by Bill Powers, editor of the Canadian Energy Viewpoint, including his analysis of declining production in OPEC and some production numbers for support. I'm sure BB has a better idea of the validity of those number than I do, but here's the link to the article over at Puplava's site.

GoldiloxOpps#10412006/04/03; 18:27:13

Sorry for the redundant titling, it's an error not an effect.


TrurlBlack Blade #104115#10412206/04/03; 19:24:35

I've always liked my father's spin on Santayana:

"Those who don't know history are doomed to hear it repeated."

He being a professor and all...

Goldendome@21 Mabry..."The Stock Market is singing a Sirens Song."#10412306/04/03; 19:43:15

Yes Sir, very probably. I just finished reading a rather extensive piece on the subject that refers to the false bull-market signals that have occurred in Japan in the last number of years. Moving avgs. crossing each other to the upside, briefly breaking above the shoulder in head and shoulders formations, etc. Here is I thought a catchy quote: ...There is an old saying in certain market circles that goes like this. "The public lost their money in 1929 and 1930. The smart guys lost their money in 1931 and the really, really smart guys lost their money in 1932." Of course the basic message of this little quip is that bear markets do their best to strip virtually everyone of their hard earned wealth. It's just the nature of the game.

Link provided: Hope it works, ok..........Gdome

Black BladeMarket Wrap Up – Puplava#10412406/04/03; 22:17:26


My Laundry List of Economic Worries

The fact that we are in the midst of a storm is more apparent with each passing day. The Fed will meet this month to consider the use of "unconventional means" should the markets and economy fail to recover in response to monetary or fiscal stimulus. The idiotic assumption that the biggest worry is deflation at a time the government is already running massive budget deficits is ludicrous. The Fed is pumping vast amounts of liquidity into the system. Interest rates are at half-century lows. The housing and bond market are in bubble territory. Consumers are borrowing and spending feverishly. The trade deficit is perpetually setting records. Equity valuations border on absurdity. Energy prices are rising. And the dollar looks like it is about to fall off a cliff.

All this tells me deflation is the least of our worries.


The best advice I could give now is caveat emptor. If you're an agile trader, then trade. However, you better have a hedge. Without one, you are exposed to any unexpected event. On the other hand, if you are truly are a long-term investor, then invest in what the fundamentals are pointing to--a falling dollar and a price rise in the "things" that you need. The rise in natural gas at this stage of the weather cycle is indicating that supplies are tight and that suppliers will have difficulty getting winter storage levels back to capacity. Heaven help us if we experience even a normal winter much less a harsh one or a warmer then normal summer. Oil prices are expected to peak within this decade or the middle of the next decade depending on which forecast you view. The geologists say 2003-2006. The optimists say 2016. Regardless of who is right, supplies and the price are likely to climb throughout this decade as demand continues to grow; while production decline curves accelerate.

With the dollar expected to decline further, if a crisis doesn't erupt first sending it into a freefall, you should be diversified into hard currencies and at least own some silver and gold. With central banks and especially the Fed putting the metal to the monetary pedal, the price of the paper you hold is depreciating rapidly to the tune of 30% over the last year against the euro--about half that against other major currencies. Other basic items that I believe will do well this decade, besides precious metals, are food and water. With water, there are few options to choose from, but they are there if you look hard enough. Finally, if you have enough confidence in your convictions and are not startled by short-term moves or manias, I would also be short. The degree to which you go short depends on your risk tolerance, ability to absorb short-term pain and understanding of the fundamentals.

Black Blade: Interesting article. I was reading an article that goes into the rising competition for world oil supply in a science journal no less. The article focused mainly on the Chinese who went from net exporters of oil to net importers and the demand is growing. I see that gold is taking a bit of a hit tonight and the dollar is gaining a bit of ground. This is likely in anticipation of tomorrow's ECB interest rate cut. I suspect a 50 bps cut is more likely as the ECB would like to pummel the Euro to stimulate the EU out of a deepening cycle of recession. Meanwhile Japan is rumored to be back to "stealth" intervention selling worthless Yen to whoever is foolish enough to accept it and buying dollars. Everyone it seems wants to debase their currency. "Interesting Times"

HektorBlackBlade#10412506/04/03; 22:46:41

The yen are not "worthless," but are just the opposite -- they are worth too much and the BOJ wants to sell them to reduce their value.
21mabryManias#10412606/04/03; 23:00:40

I was reading a book about railroad construction and funding in the U.S. in the 19th century.It just strikes you how all financial manias suck people in no matter the century or the country, railroad stock and bond issues were floated on nothing more than a company name and a promise, just like the tech mania in our time.People have never really changed have we. An interesting side note when a railline was built in the coal burning days the downwind side of the track was pretty messy and smokey, hence are saying their from the wrong side of the tracks. Goldendome you may have to go see the mariners this year they might win the american league.
21mabryEnergy#10412706/04/03; 23:13:35

Blackblade I never would presume to put words in your mouth but it seems to me you feel energy investors are in for a bull market run for at least a few years. Energy funds that I follow have had a good run so far this year some up 15 to 18 percent ytd.Do you feel people have caught on to energy investing yet,I dont really hear cnbc talking alot about these funds gains.Maybe I missed those segments, but if the public has not got in these funds yet maybe there are further big gains ahead. I just wonder if these funds are the place for new money after there recent gains.21
Goldendome@21mabry#10412806/04/03; 23:22:39

Mariners--Amazing what an 8 game winning streak will do for confidence! If only the season would end in June, the mariners might have won a few championships. Mabry, I still think the American league goes through Yankee Statium in Sept., maybe Oct.

I recently bought one of those 46 inch HDTV's after price deflation brought them down to a more reasonable price. The Hockey is quite a show on the Big Screen. My wife, at first, was hiding her eyes and "ooohing", everytime someone got boarded. Don't watch much of the regular season, but the last few years have really enjoyed following the games once the Stanley Cup Playoffs begin. After watching the fast pace of hockey (regardless the usual paucity of scoring), returning to watch the slow pace of Baseball is difficult. BTW the Anaheim Mighty Ducks tied the Final series at 2 games a piece with 2 overtime wins at Anaheim. The series resumes at the New Jersey Devils tomorrow night.

I know this is off usual subject and appologize if offending, but it seems to be an extremely slow night with only about a post an hour for the last 5 hours. Where is everyone?------Gdome

21mabryGoldendome#10412906/04/03; 23:46:37

Hockey is the most exciting sport there is I live in red wing country.I saw went and saw tigers stop Clemons try at 300 the other day,will be their only sell out of the year.Well Gdome I am hitting the hay its 3 hours latter here in the east go ducks. 21
GoldiloxBaseball#10413006/04/03; 23:53:55

G'dome and 21mabry:

I hope you're ready for the Giants. They are hopping mad after blowing it in game 6 last year, and they are much better in sync as a team this year.

GoldiloxFED chief vows decisive action on deflation#10418306/05/03; 18:57:35

misetichHousehold Borrowing Grew in First Quarter #10418406/05/03; 19:04:44


U.S. households' borrowing slowed in the first quarter of 2003, but was still strong enough to drag overall net worth slightly lower, the Federal Reserve said in a report on Thursday.

In its quarterly "flow of funds" report, the central bank said household debt grew at a seasonally adjusted 10.0 percent annual pace in the first quarter, down slightly from a 10.9 percent rate in the last three months of 2002.

Overall U.S. non-financial debt rose at 6.5 percent annual clip in the quarter, a slowdown from the revised 8.0 percent rate seen in the previous three months.

U.S. household borrowing was focused on mortgage and home equity loans.

Wonder what will happen if the housing bubble bursts?

All On Board The Gold Bull Express

GoldiloxUS makes new plans for war on Pyongyang#10418506/05/03; 19:07:47


The United States is said to be developing new plans for a war in North Korean that would bypass the demilitarised zone dividing the two Koreas and target the leadership in Pyongyang.

The plan is based on the success of US-led forces in Iraq in quickly reaching the capital, Baghdad.

US officials quoted by Reuters said the plan would involve the consolidation of the US and South Korean forces in two areas away from the demilitarised zone.

If war broke out, the forces would skirt the demilitarised zone and head for Pyongyang. "This is Kim Jong-il's worst nightmare," one official said.

It was estimated that the recently announced $US11 billion ($17 billion) upgrade of the capabilities of US forces in South Korea would give them the ability to "take down" North Korea's heavy presence on the border within an hour of war breaking out.

The report coincided with a visit to South Korea and Japan by the US Deputy Defence Secretary, Paul Wolfowitz.

Mr Wolfowitz, speaking in Tokyo after meeting Japan's Defence Minister, Shigeru Ishiba, would not be drawn on the reported plans.

"We don't discuss military plans for good operational reasons," he said.

But he said the US wanted to update its "force posture" so it could counter a North Korean attack "more quickly and more effectively".

In South Korea on Monday Mr Wolfowitz warned of a "devastatingly effective" response against any North Korean military aggression.

The US has 37,000 troops in South Korea, including 15,000 members of the Second Infantry Division deployed near the demilitarised zone. But it appears likely they will be moved as part of a realignment of US forces in the country.

GoldiloxFBI: Watch out for terrorists in wigs#10418606/05/03; 19:16:09


? The FBI is raising the possibility that al Qaeda operatives may disguise themselves as women.

In the bureau's weekly intelligence bulletin to 18,000 law enforcement agencies around the country, it warns that during recent searches, women's wigs were discovered in an al Qaeda-associated safe house in Saudi Arabia, sources said.

According to the sources, the bulletin says the intelligence community is "concerned that male operatives may attempt to disguise themselves as females in order to gain access to U.S. facilities."

It warns that the loose clothing worn by Arab women could conceal weapons and explosives, and that a female disguise could make it easier for a terrorist to approach a security checkpoint in a vehicle.

It also says that terrorist could dress in drag to conduct surveillance on potential targets.


Why does this make me wonder if Tommy Ridge and the boys have been slopping suds in one too many cross-dressing bars?
"Shake a memo . . ."

GoldiloxNo more "Official gold sales" without renewal of CB Gold Agreement#10418706/05/03; 19:41:28


"Indications from authoritative sources tell us that it is unlikely that no ?Official? gold sales, after September 2004, will take place unless the Washington or Central Bank Gold Agreement, is renewed!

The same sources have led us to believe that the Agreement will be renewed and at possibly a higher tonnage than before, around 500 tonnes, with the sole purpose of allowing the gold price to rise in an orderly manner, for even 500 tonnes will not keep the gold price down.

. . .All in all, a discouraging picture for Central Bankers, intending to sell gold.The only vocal prospect of gold sales comes from the President of the German Central Bank, Herr Welteke, feeling out public opinion, on the prospect of German Gold sales. After previously indicating that small sales of gold from German reserves were possible, he subsequently said that the Bundesbank would only sell Germany?s gold, provided it was able to invest the proceeds in income earning assets." [good luck -GL]


This article by Julian Phillips at talks a lot about the Washington agreement and its ramifications. MK or BB might know more about his stature in the info circle. I don't.

21mabry(No Subject)#10418806/05/03; 20:11:03

I was talking to a local bullion dealer today,he said he has been getting a few calls from dealers wanting to borrow silver for a month and offering to pay 20 cents an ounce to borrow it.He refused because he does not want to take the chance they wont be able to replace the metal.Why these dealers want to borrow the metal I dont know.The local guy here told me he is having trouble finding 100 ounce bars.
TownCrierSome key excerpts of today's ECB press conference#10418906/05/03; 21:02:18

Excerpt of Introductory statement by Willem F. Duisenberg, President of the European Central Bank:
"Let me at this point comment on the debate about the hypothetical risk of deflation. As far as the euro area is concerned, it should be recalled that inflation has been hovering around 2% for quite some time and that there are currently no forecasts indicating any deflationary risks. The ECB's monetary policy aims at inflation of below but close to 2% over the medium term. ... Within a monetary union, deflation is not a meaningful concept when applied to individual regions."

Excerpts from Q & A session


What do you expect from this rate cut? Do you want to dampen the euro...?

No. It is true that we have now made the interest rate differential between the dollar and the euro smaller. And that in itself subtracts, one could say, one impulse for the exchange rate movement we have witnessed in the last couple of months. But that is not the only factor. The main factor is that we think that this rate cut is compatible with our aim to preserve price stability over the medium term in a forward-looking way, and that is the main impulse for making this cut.


... my second question is related again to the IMF, which seems to be responsible for spreading a lot of pessimism. Of course, we keep hearing about this so-called deflationary threat. But today you have, out of hand, completely dismissed it – that there is a deflationary threat, that nobody has anything to worry about. Again, what does the IMF know which you don't know? Can you comment on this please?

I was already very clear when I said that what the IMF has done, that is, publish a staff paper on inflation differentials and deflation in the euro area, I must say I was almost astonished when I saw that. I have never seen the IMF publishing a paper on inflation differentials between California and New Hampshire or between Texas and Ohio.

Whereas there we are talking about one currency area which is even much smaller than the euro area. And so, that there are inflation differentials is nothing more than normal. There always will be between the various regions of a currency area.

But if I may quote myself, I said, "Within a monetary union" – which the euro area is and which the United States is – "deflation is not a meaningful concept when applied to individual regions", like New Hampshire or Germany.

Question: Mr. President, during your last meeting with Chairman Greenspan and other central bankers on Tuesday, Mr. Greenspan said – as far as I remember – that inflation in his view is not the biggest risk in the next months, if not in the next years. But he said that central bankers are quite ill prepared for deflation. Do you think that the ECB is well prepared for dealing with deflation and, if not, what should you do to be better prepared?

Duisenberg: We are convinced that we don't have to prepare ourselves for deflation because we don't see deflation coming. And that's what I have said, I think, loud and clear. Then, is the ECB prepared to deal with the "if" situation if it were to come? The answer is "yes". Many of us have experience with periods of deflation and we know what to do in that case.

Mr. Duisenberg, I respect your experience with deflation. But we are in a different world. We are in a globalised world now. Do you think that you can apply the experience of the 1930s with a completely different institutional framework to the situation we have today?

I'm not talking about the 30s. I'm talking about the 90s. I was ...

... where did you have serious deflation in the 90s?

In the Netherlands I had two consecutive years of deflation...

...can a small country like the Netherlands have deflation?

Well, we are always quoted as being an example for the rest of the world. So, ...

And maybe about deflation, once again. You can assure us that there is nothing in this rate cut today linked to the problem of deflation?

I assure you. There is nothing linked to the notion of deflation. It is only linked to, what in itself is, a very favourable outlook for price developments. It's so favourable that we can afford to lower interest rates without endangering our projection and goal of price stability, which is close to but below 2%.


Mr. Duisenberg, you said confidence would be enhanced if governments delivered what they promised to deliver. Now governments turn out to be rather helpless in implementing reforms. There is a lot of pressure in many countries. So, in the meantime, growth is declining and the ECB keeps lowering interest rates, always saying "we want to enhance confidence". Where does this process end? With the governments not doing anything, interest rates going down to zero and the whole euro area going bankrupt? I think you must be helpless too when you see what monetary policy is expected to do under these circumstances. Do you feel left alone?

Monetary policy is expected to be conducted in such a way that it primarily achieves price stability to prevail over the euro area as a whole. And that is what we promised the people that we will deliver. People can see that we do deliver. You might say that we have achieved price stability by now. And we promise to maintain it. I think that we are credible enough for people to believe that we will deliver what we promise to deliver. And now it is the turn of the governments to do the same thing.

... But then I always add that the aim of the Stability and Growth Pact is for one's budget to be in balance or even with a small surplus over the medium term. What you should not forget is that eight out of the twelve countries have already achieved that aim....

------(see url for full transcript)-------

Randy's note:
These few excerpts continue to make the distinction between "new" euroland and the "old" IMF/dollar candidates competing on the world stage, especially when you consider the Fed/press growing aggressiveness in trying to sell us all on the fear of deflation in a fiat economy. tsk tsk... Too big to contain with a cheap trick like that. Thus, sitting down, "We shall have the hyperinflation."


mikalState of the "Union"#10419006/05/03; 21:09:12

Get out there and spend, spend, spend. It's good for the economy and there are all kinds of deals out there today. You can buy a new car without interest. Buy two or three. You can refurnish your house and not have to pay anything on the tab for months. Eat out every night, but buy new cookware and have the kitchen and dining room redone. Put in a fireplace and a pizza oven. Get all sorts of new appliances and have them counter sunk with hydraulic push-button lifts. If the house isn't big enough, get a bigger one.
Buy everything you want. Buy the largest plasma televisions, new computers, limousines, chauffeurs, cooks and maids, butlers, a yacht or two with crew, an airplane, helicopter, anything. And buy things you don't want, maybe the neighbors can use them.
Why not? The government does it.
You haven't heard anything lately about the credit cards the federal government passes out to each of its three million employees have you? The news on how they abuse these cards stimulating the economy in the categories above has disappeared, hasn't it?
Forget that. It's nothing.
The federal government just increased its own credit card by a trillion dollars ($984 billion) and there's hardly a peep about that either. They can backhand this sort of increase in no time with ease.
Yet, the federal government allowed its credit card to expire on February 20th of this year and went 92 days without taking any action whatsoever. And they won a war in-between.
Of course, Daddy Warbucks took whatever money he needed to buy a coalition of the willing, conduct the war and start rebuilding another nation, from the billions that had been scheduled for goods and services to his own people. And he put every state, city, and local government further into so much financial difficulty that they fired people, cut projects, raised taxes, and went into austerity programs of the desperate.
But nobody's complaining about this pure power play. Instead, they're sitting back and waiting for the flow of federal money to come back—maybe.
When Daddy Warbucks decided that he needed another $75 billion for the invasion of Iraq, he asked Congress for it and they decided instead to give him $80 billion, stacking in five for their own pet projects. Where did that money come from? They couldn't borrow it. The safety mechanism permitted by the Constitution for emergencies was in abeyance, unusable. Why?
Do you realize how much just one billion is? It's a thousand million.
If you had a time machine that charged you to go back in time and it cost one dollar a second, do you realize how far one billion dollars would take you. That's $60 dollars a minute and $3,600 an hour 24 hours a day or $86,400 a day.
One billion dollars would take you back to 1959.
If you paid a dollar a minute, the time machine would take you back to the days of Jesus Christ and the beginning of the Gregorian calendar.
If you stayed there and started setting aside $7 million a day, do you know when your descendants would be able to pay off our current national debt—2065—at seven million a day from the time of Christ.
Once the debt limit was raised, the federal government just borrowed $100 billion ($97.8 billion) more in the next four working days.
And what would happen to you if you splurged?
Take a lesson.
Congress just passed new bankruptcy laws that make it more difficult for individuals to declare bankruptcy, much less be allowed to keep their car and home.
If you ran up the sort of debt you are truly capable of running up, if you went on a spending spree that you couldn't afford, that you didn't have the income to support, that would truly be fiscally irresponsible—you would lose everything.
The powers that be would come and take everything away from you, leaving you destitute and having to start all over.
Doesn't that give you some sort of clue about what must be done???
How long are you going to put up with this sort of crap from the government?
We are already indentured slaves working for people that are supposed to be working for us. The average American works more months of the year to pay taxes than the surfs worked for the feudal lords. The surfs only worked about four months each year to raise crops for their government, the rest of the year the land was theirs. We work almost six months to pay our taxes and we rent our property.
And don't forget that the federal government also steals about $100 billion a year from your retirement payments, from Social Security. Add in another $50 billion stolen from Medicare and other entitlements where the money we pay is not supposed to be used elsewhere and you've got a criminal scam that is worse than anything done by Enron or all of the crooked private sector companies together.
Don't you think we need a regime change? And remember, no single raindrop feels responsible for the flood.
"Published originally at : republication allowed with this notice and hyperlink intact."

Dollar Bill*>*#10419206/05/03; 21:32:46


We cannot ignore the Washington Agreement and its future successor any more. It is proving very successful! No doubt many of the Bullion Banks and Hedgers would have had many disasters had it not been in place. If these institutions don't take advantage of this "extra" supply to the market, they will face these disasters, because the "Official" supplies are dwindling rapidly this year and the 400 tonnes scheduled for next year are looking insufficient to hold the price down. If we are right, the maximum impact of next years supply of 400 tonnes, will, at best, simply keep the market orderly in its rise, just as the key Central Bankers want.

The next Central Bank Gold Agreement, will aim to reinforce the last one in its purpose, but not necessarily in its application. The next agreement can accommodate a lower, a higher, or the same level of sales as the present one, but it remains to be seen whether there will be willing sellers, in the face of the dubious stability of the $.

It may even be that this next Agreement accommodates a ‘new’ method of valuing Gold in the signatories "Official" Reserves at $ market prices, as a first step to the re-affirmation of gold's support role in the Monetary system. [More on that later]
Julian D. W. Phillips
Gold-Authentic Money

Black BladeFed Easing Now Likely As 'Insurance' Policy, Greenspan All But Says#10419306/05/03; 21:57:20


Federal Reserve Chairman Alan Greenspan hinted strongly Tuesday that the central bank will cut rates later this month as an insurance policy against deflation. At the same time, the Fed chairman said the economy stabilized in May and is poised to turn around. But he hedged his view on when or how strong. His remarks triggered sharp gains in bonds and drove the yield on the two-year Treasury note below the fed funds rate of 1.25%, a sign that markets expect a rate cut. Stocks scored modest gains. "The acceleration has not yet begun," Greenspan said, "even though, obviously, the marked moves of the stock market in recent weeks, and especially in the credit markets, are suggesting a fairly marked turnaround." Greenspan said deflation - a broad decline in prices that can erode corporate profits and lead to job cuts - is unlikely but may be a sufficient threat to warrant Fed steps to head it off.

Black Blade: The Fed Head is hedging his bets a little and today the rumor floated that the Fed may have an emergency conference cal and cut interest rates as early as tomorrow should the May unemployment rate look rather ugly. Personally I doubt that they will, but then it is a possibility.

On another note, I talked with a couple of Oklahoma NatGas execs today and they tell me that drilling programs may ramp up once they get a clear picture of how much support they can expect from Washington and the outcome of a couple of frivolous environmental lawsuits pending before the 9th Circuit Court of Appeals in San Francisco. The outcome there is a foregone conclusion, but will easily be overturned by the Supreme Court as these are issues already addressed by the high court before. However, drilling activity could really pick up this Fall but way too late to help out this winter. Next Tuesday I may have the DMR up just a little later than usual as a few others and myself will meet with Wyoming Governor Dave Freudenthal on some NatGas related issues. It appears that a lot of government officials in producing regions are taking in a crash course on energy ahead of this month's emergency NatGas meeting in Washington. I was among those contacted just this afternoon to meet with the Guv. I don't have any great expectations though as politicians are not exactly the most advanced bipedal hominids.

Dollar Bill"-"#10419406/05/03; 22:11:05

Bond Trading Bears, are commenting below about present market.

As I watch this market, I get the feeling that something weird is going on. The action just doesn't feel 'right' or 'normal' to me. And I think what it is--is that the stock market and the bond market are both being driven, not by improving business, but by rising liquidity. A Fed-created tidal wave of liquidity is floating everything higher--housing, stocks, bond. It's a false rise, but it's happening, and in this business we don't deal with morality, we deal with reality."
I wonder how long this false "reality" of a constantly rising stock market will continue? Surely, the Fed can't pump this pig forever? Or can it?

have this Mega Bull in my office who is a buy and hold man all the way. We started talking about the State's Budget problems and he said this was bullish. Heres his reasoning. Many states have deficits and underfunded pension plans. So they will issue bonds and put this money into the pension fund and buy stocks with 60% of the money. This is Bullish
Market melt UP tommorow through end of july

don't think. just buy more stock. go long. don't short this bull train.

In the name of everything that is holy, can someone tell me what do they see in the charts that tells them to go short-term short? And please don't say valuation because we all know how much that matters in the ST.
And please don't say we're overbought because that is meaningless when we break out of a range. In fact it is akin to trying to catch the proverbial falling knife.

How can one look at the massive breadth, the tremendous liquidity, the buying in the face of all news good or bad, the sky-rocketing P/C ratios in the ETFs, the shallow pull-backs that last merely a couple of hours, how can one see all that and still call a top ?

Perhaps the Fed is funding a new bull market?

Black BladeDollar's fall may not be over yet #10419506/05/03; 22:20:39


Since February 2002, the greenback has lost more than a third of its value against the euro - which would have been enough to placate all but the fiercest dollar bears just a year ago. Goldman Sachs, HSBC and Deutsche Bank all think that $1.05-$1.18 against the euro is the "fair" or equilibrium value for the dollar. So with the euro now hovering around $1.18, it might be tempting to think that the dollar's decline will soon run out of steam. At the G8 summit, too, President Jacques Chirac hinted on Tuesday at concern over currency gyrations, saying stability was helpful to growth.

Financial history, however, suggests the dollar's downward journey may be far from over and the fact that it is thought to be nearing "fair value" is unlikely to break the currency's fall. This is partly because the gravitational pull exerted by fair value - which is notoriously hard to calculate anyway - is extremely weak. Instead a range of automatic destabilisers tend to ensure that exchange rates overshoot. Most banks' fair value figures are a combination of purchasing power parity calculations - the comparative values of a basket of goods in different economies - and relative movements in productivity.

Following a period of over-valuation in 1985 a large US current account deficit accelerated the fall in the dollar - which slid 54 per cent against the D-Mark by 1987. Now as then, however, it may also be several years before the depreciation of the dollar helps to narrow a current account deficit - which is set to reach $600bn this year. The vicious cycle of currency depreciation is also exacerbated by financial markets. In the long run the fall in the dollar should help attract foreign capital to fund the current account deficit - serving as a discount on US assets. In the short-term, however, it is a deterrent, since investors may be wary of ploughing funds into a falling asset.

Currency intervention by leading industrial countries marked the dollar's peak and trough in 1985 and 1987. The nadir of the euro was reached close to the level at which the G7 intervened to protect the currency in September 2000. Despite rumblings of discontent at the G8 conference, the dollar will need to fall significantly to provoke a further policy response. But some analysts think this moment may come sooner than many expect. "We are heading towards a dollar crisis as soon as this summer," says Mr Persaud. "If the dollar's fall gathers momentum to the point that interest rates start to rise, policy makers will be forced to act."

Black Blade: Some analysts now are looking for the dollar to fall to $1.30 – $1.35 against the Euro. I would think it quite likely and possibly even more than that. However, for the dollar to come back in line with the dollar index before 1997, the dollar should fall another 10% to 15% (remember the Euro did not exist at the time). The "Currency War" could force the dollar much lower as foreign interventionists are only delaying the fall to some extend while the pressures on dollar still continue to build. The current account, trade and budget deficits are in uncharted waters now setting new all time records daily and a ballooning national debt that exceeds $44 trillion (including both on budget and "off the books" debt). This is of course unsustainable and for a currency based solely on faith the outlook is rather grim. Therefore holding at least a small position of physical precious metals as "portfolio insurance" is almost mandatory. It's a small price to pay for peace of mind.

21mabryBB#10419606/05/03; 22:33:24

Blackblade, Tell the govenor the best thing he can do is read this forum..21
Black BladeTreasury Yields Hit New Lows#10419706/05/03; 22:42:05


NEW YORK (Reuters) - U.S. Treasury yields set record lows on Thursday as the European Central Bank's rate cut fueled prospects for the Federal Reserve to ease when it meets at the end of June. The latest round of economic data was supportive to bond prices, with weekly jobless claims rising more than expected and April factory orders posting their largest fall in 17 months. The yield on the benchmark 10-year note dropped to a low of 3.24 percent, its lowest level in 45 years.

(Now here's the kicker): Two-year yields remained near record lows at 1.20 percent, down one basis point and below the Fed's 1.25 percent funds rate, a strong signal investors expect a cut at the bank's next policy meeting later this month. "Twenty-five (basis points) would be an insurance cut. Fifty is much more insurance than needed given the perception that we will have strong growth in the second half," said 4CAST's Robinson. "I don't think the Fed has to do anything (in response to the ECB cut) except possibly validate what the market is discounting, which is a 25-basis point cut, although there are people who think if the employment report is weak, the Fed could cut by 50 basis points," he said.

Black Blade: I won't go into all the gory details as anyone who has read the DMR over the last couple of weeks would have that info. However, with nominal short-term rates bouncing around 1.2% and inflation (the official rate anyway) running about 3% - OK, lets be generous and say 2%, that would mean we have a negative "real" rate of return at –0.75% (actually it's much greater if we assume "real" rates of inflation whatever that may be). Aside from the obvious effect of driving a stake deep into the heart of the "gold carry trade" vampire, it also means investors would be rather foolish to invest in money market funds, bank savings accounts, and CDs. The opportunity cost of buying precious metals is practically nil while the upside potential is open. In fact a case could be made that you are being paid to borrow and buy any hard asset that will hold its own against inflation. This same type of situation occurred in the 1970's to early 1980's when gold made some impressive gains. Sure, interest rates were high, but inflation was even higher. We have even seen the same scenario a couple of times before and each time gold rallied in a precious metals Bull Market. So here we are once again and we are just getting started. So hang on for the ride.

Topaz...and I thought 'ol Buck was off to the Moon!#10419806/05/03; 22:42:16

...still do!
HUGE Forex action to stem the rise last eve, a 92-94 Box, falling Dollar and higher Bond Yields...does not figure, expecting volatility to the upside...lets see!

21mabryConsolidation#10419906/05/03; 22:45:03

Black Blade, Could I please get your views on consolidation within the oil industry during the last twenty years.My dad worked for Gulf Oil for a number of years until cheveron bought them.Do you feel the industry is stronger or weaker? Has research and exploration been cut back with fewer big oil companies? I remember in my city we used to have 4 good sized refineries now we have 2 left and they always talk about closing the sunoco plant. Thnx your energy pupil 21
Cometosedollar#10420006/05/03; 22:50:02

I smell a confidence crisis brewing ........

upstaged by rampant buying of stocks and bonds.....
on the side show of center stage.

Black BladeThe last bad jobs report? #10420106/05/03; 23:03:53

May's job numbers will almost certainly be bad. Is improvement coming -- or more pain?


NEW YORK (CNN/Money) - You can pretty much bet Friday's employment report will be bad -- the only question is what comes next. Some economists hope the report will mark the end of the bad news for the nation's labor market, which is in its longest slump since World War II, while others worry there's more heartbreak to come. A vast majority of economists expect the Labor Department to say the unemployment rate rose to at least 6.1 percent in May -- the highest level since July 1994 -- and that employers cut tens of thousands of jobs.

1) Their worries are not unfounded -- most signs have been pointing to a weak report, including:

2) weekly jobless claims staying well above the 400,000 level, indicating labor market weakness

3) 83 percent of employers plan to cut jobs or hold payrolls steady in the second quarter, according to the latest Manpower Inc. survey of corporate hiring plans

the number of people who think jobs are hard to get rose in May while those thinking jobs easy to get fell, the Conference Board found in its latest consumer survey

employers in both the factory and service sectors kept cutting jobs in May, even as business conditions improved, purchasing manager surveys by the Institute for Supply Management (ISM) found

"I don't think we're back to a stable employment level; we're in for another decline, certainly in manufacturing employment," said Conference Board economist Ken Goldstein. "This should be the best month in the past three, but that's damning with faint praise, given how bad March and April were."

Before investors react to Friday's report, however, they may spend some time scratching their heads about it. The Labor Department is revising the numbers in its surveys of employers' payrolls. In addition to changing seasonal adjustments and updating benchmark figures, the department is shifting some job descriptions and moving some jobs from manufacturing into services in what it says is an effort to more accurately reflect the current economy. Economists, on average, expect employers cut 39,000 jobs outside the farm sector last month, according to a Reuters poll, down from 48,000 job cuts in April -- but prior data, going all the way back to 2001, are being revised, so comparisons to prior months might be difficult. Payrolls have lost 2.7 million jobs since March 2001, when most economists think a recession began. Excluding government workers, payrolls have been underwater for 22 straight months, the longest such stretch since 1944-46.

Black Blade: The unemployment picture is looking rather ugly and even the alternative index shows an unemployment rate of 9.8%. I reviewed the BLS data and still come up with about 11-12% rate (depending on how one calculates partial employment which is difficult not knowing the hours worked per employee, etc.). This does not even take into account the self employed who are not working or who are working less hours. If I get time this weekend I may dig up tomorrow's report and grind through the numbers, but with all the data revisions and changes in the statistical filters this could become more clouded. No matter how you slice it, the "Bone Pile" is growing faster and higher. There have been now 17 weeks over 400,000 first time jobless claims (that includes 2 upward revisions that took the count over the recessionary 400,000 level - a point conveniently ignored by the financial press) Still, no improvement is expected anytime soon. In a word – "grim".

mikal@Cometose#10420206/05/03; 23:32:20

A confidence crisis has been brewing for a long time. The Government, the bankers and the Fed are now up against a wall, so all their money spigots are nearly exhausted supporting banks, equities, loans and spending. And perceptions and "confidence" is managed by statistical sleight of hand, censorship, the diversions and isolation of tv and consumerism, and unresponsive, blackmailed "politicians".
They must define a crisis before the real crisis does them in. 9-11 was just a dry run some July 4th fireworks display?
Well, the DC PTB know they're running out of ammo for the markets, because foreigners and many Americans are now on to their schemes.
And the world economy needs a fix, the dollars are leaving here faster than ever and debt and derivatives are near the end of their leash.
So why not paint and fatten the old, tired stock market hog just in time for the Fourth of July roast and festivities? It IS a Federal Holiday after all, and we know how political culture substitutes for real culture in deciding our "celebrations". Besides, mortgages and other bubbles would make such a nice display going off all at once.
If you're in the stock market, or believe like most that it symbolizes America's greatness, good life and economy, you are politically correct believing when they tell you "accidents will happen". Isn't that what this "Homeland" thing is all about anyway?

mikal@Cometose #10420306/05/03; 23:37:33

...9-11 was just a dry run FOR some Fourth of July fireworks display?...

Black BladeRe: 21mabry – Energy Consolidation#10420406/05/03; 23:47:56

That's a tough one. Oil companies (and now NatGas) had little choice but to pursue economies of scale. The US companies had to compete against large foreign majors like Shell, Royal Dutch, BP, etc. in an increasingly competitive market where world class discoveries were fewer and fewer. The last one being the Canterell Field, Mexico. There are no more "elephants" so now it is a matter of acquisitions and mergers. Now we have the combinations of Exxon-Mobil, Chevron-Texaco, BP-Amoco, etc. Recently Russia's two large oil companies merged to become number one in size. Whether that makes them stronger or not is debatable but it is more competitive and supposedly led to some cost savings.

Exploration and research had fallen due to the "boom-bust" cycle common in natural resource industries (commonly seen in mining as well). I have known many people who left the industry with each "bust" never to return to the industry. People have been burned in this regard and it leaves a bad taste in their mouths. For example, I have seen mining and petroleum professionals get good paying jobs, buy a home, set their families up in nice rural communities, etc. where the largest employer was petroleum, minerals, metals, lumber, etc. When the "bust" happened you had people whose life savings were tied up in their new homes and in company stock 401Ks, etc. and unable to sell their homes because everyone else was selling too. Those people won't come back to the industry. Many went into other careers never to return. Universities no longer graduate many natural resource professionals, and many of those that do graduate from US universities are foreign nationals. That's why there is a shortage of experienced professionals when they are truly needed. It's not a life for a family man for sure. That's not to say that companies have given up on exploration and research, but few are willing to go through all the aggravation. I happen to love the work (especially the solitary field exploration) but if I had a son or daughter who expressed an interest in pursuing such a career I would slap them silly and tell them to go into health care or some other career with a future.

Forget about any new oil refineries in the US. The environmental regulations and permitting is a nightmare and to get permitted is impossible anyway. In fact more and more refineries in the US are closing up due to high costs, environmental restrictions and liabilities. Most new refining is moving offshore and much of that is in the Caribbean.

You might want to read "The Prize" by Daniel Yergin (probably the best one). It is an excellent resource to study the history of the oil industry and discusses many of the issues you are interested in. A couple of other books are: "GeoDestinies" by Walter Youngquist, "Hubbert's Peak" by Kenneth Deffeyes, and "The Skeptical Environmentist" by Bjorn Lomberg (loaded with more references than you can shake a stick at). There are some others but these come to mind right off.


- Black Blade

Topaz@ Comatose..."which" Dollar?#10420506/05/03; 23:57:53

The one you're holding in your Hand, the one ekeing out a 1% return that you lent to the Treasury for 6 Mth's...or the one you just paid $1.19 for and will see in 20 odd Years. Just three examples of the many "Dollars" (Yen, Euro etc) that are increasingly being lured into the front end...Cash.

RBA's Governor McFarlane out today repeating the Mantra, Low or Lower IR's are here to stay...I think Mr Market is on the verge of proving him and all CB honcho's wrong.. Wrong..WRONG!

Black BladeRe: 21mabry – Book List#10420606/06/03; 00:09:52

The following books are listed along with author and a short description by reviewers and myself:

1. "The Prize: The Epic Quest For Oil, Money, and Power" By Daniel Yergin, 1993. The book furthers ones understanding of the United States' place in this history which, in turn, helps us to understand why oil is a vital national interest to the most powerful nation on earth. With this in mind, the book helps one to understand not only the influence people like the Samuel brothers, the Rothschilds, and the Rockefellers had on the development and growth of the industry, but most importantly how and why this industry has such influence on the direction of U.S. foreign policy.

2. "Hubbert's Peak: The Impending Oil Shortage" By Kenneth S. Deffeyes, 2001. This book has been on the top 10 list and is one of the books recently seen carried by George Dubya. Kenneth S. Deffeyes was a protégé of M. King Hubbert at Shell and is currently a professor of Geology at Princeton University. He delivers a sobering message: the 100-year petroleum era is nearly over. Global oil production will peak sometime between 2004 and 2008, and the world's production of crude oil "will fall, never to rise again." If Deffeyes is right--and if nothing is done to reduce the increasing global thirst for oil--energy prices will soar and economies will be plunged into recession as they desperately search for alternatives. It is no wonder then that Oil Men like George "Dubya" Bush and Dick Cheney have read this book.

3. "Geodestinies: The Inevitable Control of Earth Resources Over Nations And Individuals" By Walter Lewellyn Youngquist, 1997. GeoDestinies helps to identify the forces that will determine our future. Some of these include the exponential population explosion, the ever-increasing demand and use of fossil fuels and other non-renewable resources, the degradation of our soils and groundwater, the truths and misinformation concerning alternative energy sources, and the relationships between natural resources and politics, economics, and our culture as a whole.

4. "The Coming Oil Crisis" By Colin J.Campbell, 1997. During 1997, an academic debate of immense significance for the future of civilization began to surface in a remarkably diverse array of media. The debate concerns the question, is there enough crude oil left in the world to get us to 2010 without a historically unprecedented discontinuity. The whole character of society in the 20th Century, and of its history, economics and politics is more a product of oil than of any other factor. The crucial question which Campbell addresses in his book is how much oil remains to be found and for how long global oil resources can continue to support the expected growth in demand. Having access to Petroconsultants' extensive database, he has carried out a detailed and comprehensive analysis of historical production data and of the Earth's ultimate oil potential. His estimate of the ultimate oil reserves is 1800 billion barrels of which 1600 billion barrels have been discovered, and he predicts that there are only a further 200 billion barrels yet to be found. His most crucial pronouncement however, is that once the global mid-point of depletion has been reached, production rate will decline.

5. "Green Monday" (out of print – Financial Thriller) By Michael Thomas, 1981. Financial Thriller – This is an excellent piece of fiction and I got it after Randy (our USAGOLD Admin guy) mentioned it once in passing on the forum. The author was a partner at Lehman Brothers and Burnham and Company. I just ordered a used copy tonight from an online book retailer.

6. "The Skeptical Enivornmentalist: Measuring the Real State of the World" By Bjorn Lomborg (Academic and former Greenpeace activist), 2001. Lomborg than correctly pointed out that incentive structure for the career environmental scientist/activist tilt them to communicate bad, or even alarmist, scenarios. Basically, it is money (donations and government grants) and livelihood (career and fame.) Similarly, the media is incented to communicate "news" that attracts a large viewership - the only real news is bad news. He merely points out that if we use scientific methods (rather than faith) and make claims responsibly (rather than based on self-interest), the populace will have a better understanding of the true state of the environment, and resources can be directed to the areas that are truly a source of concern. But of course that might well mean that less governmental money, and less environmental research jobs. Lomborg did not make many friends of the environmental stripe by publishing this book

7. "The ABCs of Gold Investing : Protecting Your Wealth Through Private Gold Ownership" By Michael J. Kosares, John Ritland (Illustrator), Rod Colvin (Editor), 1997. Of course our Host's book is listed as a recommended listing along with the previous literature. Now for the first time under one cover, novice investors will find thorough guidelines for making good decisions about private gold ownership. In The ABCs Of Gold Investing, gold investment expert Michael J. Kosares (with 25 years experience in the field) emphasizes the asset preservation qualities of gold at a time when investor uncertainty about the economy has led many to seek asset diversification. The ABCs Of Gold Investing covers a range of topics, from understanding gold's role in combatting inflation and deflation to how to select a gold firm. Kosares also examines reasons why gold has become an essential in many American portfolio and why that trend is likely to continue. – Midwest Book Review. Heck, if you ask real nice I am sure he will even sign the book for you. ;-)

8. "The Power of Gold : The History of an Obsession" By Peter L. Bernstein, 2001. Though I don't necessarily agree with all of Peter's conclusions, he does put together an interesting (and gory) picture of the history of the "barbarous relic". Peter Bernstein quotes the immortal words of King Ferdinand of Spain, who once declared: "Get gold, humanely if possible, but at all hazards--get gold." As ensuing chapters reveal, man's obsession with finding, keeping, selling, and evaluating gold has rarely been a humane adventure and has always been a hazardous one. If anything, the book does describe events through history concerning Gold that we know have influenced the course of history for over 6,000 years. Although he doesn't cover it, the earliest evidence of Gold influence in World culture is perhaps as early as 4,000 B.C. as evidenced by unearthed Thracian treasures. Other than the historical view presented I think that he tends to miss the point of Gold ownership in today's world and the necessity of having Gold as part of a diversification strategy. For that I would recommend MK's book.

Aside from "Green Monday", I would recommend the other books as a start to understanding the approaching financial crises and how to prepare for them. There are a couple of others I am going to get when I find time.

Another excellent source is "Oil & Gas Journal". It is a weekly publication with updated info on the petroleum sector. It covers material of general interest, exploration and development, drilling and production, processing, transportation, etc. It's actually a pretty good resource for those interested in the petroleum industry and it's reasonably priced (though I get the professional rate which works out to about a buck per issue). They also toss in a bimonthly issue of "Drilling Contractor". I won't post the web site here but you should be able to find it quickly with a search engine.

Anyway, so much good literature and so little time, but that is what life is – a lifetime of learning and accumulated knowledge. My philosophy here is: If you haven't learned at least one thing in the course of a day, then that day has been wasted.


- Black Blade

Topaz@Belgian (6/5/03; 03:59:58MT - msg#: 104139)#10420706/06/03; 01:37:59

Yes, I see it now SirB, not a word before "the Bridge" is needed. Makes sense...said it all with the WA. ECB could say: "We'll cross that (Gold) Bridge when we (the System) come to it" ...if you get my drift.
Black BladeNeither a borrower nor gold lender be #10420806/06/03; 03:05:04


The religious war in the gold market reached a climax this week with the announcement by Newmont Mining that all but one of the gold lenders to its Yandal mines in West Australia had agreed to take 50 cents on the dollar to liquidate their claims. Newmont's buy-out offer, which effectively saves the Yandal operation $77m, is a stunning blow to the gold banking business. For the past two decades, gold mines have been developed using the gold lending market. Roughly speaking, banks borrow gold from central banks and lend it to mining companies. The mining groups sell the gold, use the capital to develop mines, and pay the loans back from their production. Since gold interest rates are far below rates for borrowing in dollars or other main currencies, this has been a cheap way to build capacity.

But some gold investors, along with some gold mines, have believed that when mines "hedge" their gold production by borrowing, then selling the gold, they depress the price and cannibalise their ability to profit from future price rises. The "hedgers" believe they are only following prudent practice for commodity producers. This hasn't been a gentlemanly dispute. Newmont, now the biggest gold producer, has become the leader of the anti-hedging group. It acquired Yandal when it bought out Normandy Mining. Yandal, which is comprised of three mines in the Western Australian desert, has repeatedly seen its ore reserve numbers reduced by management, the engineers and the accountants. According to Newmont, the most recent and relevant numbers showed proven and probable reserves of 2.12m ounces at the end of last year, against which 3.5m ounces of gold had been sold in hedge contracts. As a quick pass with a supercomputer will show, 3.5m is larger than 2.1m. Therefore the hedge contracts were insupportable. Since the mine's finances are not guaranteed by Newmont, and Newmont doesn't feel like bailing out the banks voluntarily, the banks have no choice but to accept essentially an out-of-court bankruptcy workout.

Few doubt that miners will find it far more difficult to borrow gold on the same good terms they had before. Banks will want much tougher documentation. Among other points, they will want to make sure that all gold lenders are treated on the same terms. They will want to make sure reserves numbers are real. They will be reluctant to do project financing, or off-balance- sheet financing, of new mines. That means mines will have to be developed with equity financing or the security of a mining company's entire balance sheet and cash flows.

Black Blade: Thankfully this face-off may help to put an end to this horrible practice of selling forward gold and artificially depressing the price of gold. Hats off to Newmont!

BelgianIndeed, indeed Sir Topaz....#1042106/6/03; 03:44:37

We (all of us) are constantly on the look out for more, new, euro-Gold linkage, "evidence" and don't even understand the deepiest meaning (and purpose) of the WAG !
(Washington Agreement on Gold !) The "Washington" in WAG hasn't even been decoded !!!
How can we possibly correctly interpret the complex differences between (CB)Gold-sales-loans-leases !?

This weekend, the Poles (40 million people) are having their EU-membership referendum, with heavy (US-$) subversive action for boycot. The fact that the dollar-reserve-standard-system-currency, gives covered evidence of feeling threathened by an upcoming new currency euro-block, must point to the intrinsic strenght of that currency-system-project. Otherwise, the dollar wouldn't feel so uncomfortable with this.

The more that the euro is NOT to be feared by the dollar on pure economical (competitive) grounds. If..."if", the dollar were a sound currency it would surely welcome the euro competitor !!! It "must" be that nasty, "STUBBORN" Gold-Thing that is bothering the dollar (dollar-system)!?

Watch the POO, now that Saudi Arabia, Venezuela and Mexico (!!!) will gather in Madrid !

Since the dollar-system will become more and more defenseless without the Gold-Backing, it might pour its defense out of a heavely supported (AND MEGA OVERVALUED) stockmarket ? The oil-producers are certainly NOT impressed by such an fraudulent (supportive) undertaking. They "demand" equal value for the delivery of "their" oil as the fundamental basis for the whole global economy... RELIABLE OIL FLOWS FOR AN HONEST BARTER !

The French secret services catched, presumed terrorist, who planned an atrocity in Reunion island (Indian Ocean departement d'outre mer). I suspect a very specific, internationally well known, signature on these terrorists !?
I may have it wrongly interpreted, but this adds to the evidence of the lasting euro-dollar struggle >>> fight.
Unfortunately and very unpleasant for both !

steadysil ver #10421106/06/03; 05:38:30

it could just be

WaveriderJohn the Jute#10421206/06/03; 07:02:42

" thank the Lady Waverider for being away and so unable to win it..."

Somehow this slipped past me, but it's very funny and thank you! Actually Slingshot and I are working "behind the scenes" on what just might be...well..the mother of all Gold stories, we'll see! There are many ideas from this forum which, when mixed with a sprinkle of imagination, might just weave into something both educational and entertaining. If only there were more hours in the day for these little side projects. Cheers and kudos to ya!


Cavan ManExplains the London "FIX(er)"#10421306/06/03; 07:23:47

US stocks will like soar at open.

U.S. May Unemployment Rate Seen Rising to 6.1%: BN Survey
June 6 (Bloomberg) -- U.S. unemployment may have risen to 6.1 percent in May, the highest in almost nine years, as the economy lost jobs for a fourth straight month, economists said in advance of today's Labor Department report in Washington.

Companies may have eliminated 30,000 jobs last month, based on the median of 68 forecasts in a Bloomberg News survey of economists. That would bring the number of positions lost since February to 555,000. A 6.1 percent unemployment rate would be up from 6 percent in April and the highest since July 1994.

TopazI hope you Guys are awake for this!!#10421406/06/03; 07:31:08

Here we go AGAIN!
Buena FeWall Street Set to Open Sharply Higher#10421506/06/03; 07:35:48

...........The May jobs report included a major overhaul of the way the department compiles its survey and calculates its results. In an encouraging sign, the changes rendered the recent job picture less gloomy than it had appeared earlier.

"Because of the confusing changes, the numbers won't have a major impact on either stocks or bonds markets today," First Albany's Johnson said. "It appears early indications are that the market will open higher on Intel news, and I don't think these numbers change that.".............................


ha ha ha ha ha ha ha
sad joke for the day

Buena Feoutrageous#10421606/06/03; 07:39:13

my guesses,
-today is THE high in the indexes (DOW etc)
-gold will recover quickly
-a $ crash is only days away

BelgianEU - Iran#10421706/06/03; 08:13:23

Trade in euro as to come at oil for euro...
A multi-polar euro-world instead of a uni-polar dollar-world.
Bye bye NATO !???

Euroland's part in the US' stockmarket remained at the same level of 30%. If this stockmarket should crash and Euroland withdraws from Wall Street as Japan already did...Americans will have full control over their SM but will (imo) lose the last standing supporter of the dollar !?

The great Atlantic rift in progress !?

21mabryBlack Blade#10421806/06/03; 08:49:20

Thanks for the book list.I am gonna look for Daniel Yergins book this eekend,he is becoming one of my favorites to read and listen to.He is so clear and consice and also has such a calm manner that comes with knowing a subject well.I am also gonna dig through my dads old books he was Northwest Ohio sale rep for Gulf. The uote you gave from Philip of Spain is one of my favorites. I got the book by MK not a signed copy though wish it was. THNX 21
21mabryA BOOK#10421906/06/03; 09:06:12

I have been thinking of this for awhile I would love to see a book compiled from the writtings of this forum.The hall of fame, the gold trail,and the other writtings of what I call the giants of the forum.I would even prepay way in advance.I know publishing is expensive but its just a hope I have. 21
Waverider21mabry#10422006/06/03; 09:08:03

Just a tip - I didn't have success finding "The Prize" through a bookstore here in Vancouver, but was able to pick up a second hand copy (cheap) in excellent condition through the university bookstore. It used to be a required text for one of the courses and they had a few extra on hand. You may find one cheap through a university -it's a fabulous book - definitely worth the purchase. Cheers,

USAGOLD / Centennial Precious Metals, Inc.Our Latest Buyers’ Group Special . . . BULLION!#10422106/06/03; 09:13:31">Gold Buyers Group Special
adminMK's Gold Commentary & Review#10422206/06/03; 09:19:43


New Quick Notes (Comment on today's market action).

New Stein

"The Religious War in Gold Market Reaches Climax" -- FT/Dizard

TownCrierAutomaker Ford pushing UK toward EMU#10422306/06/03; 09:36:46

COVENTRY, England, June 6 (Reuters) - Ford Motor Co, the world's second-largest automaker, said on Friday it was essential that Britain adopt Europe's single currency to create the stability needed for investment.

"We really need to get into the euro. It is a strategic imperative for this country to move into the euro zone," Ford Chief Operating Officer Nick Scheele told reporters.

"The lack of predictability and stability is an inhibitor to future investments. So I look forward on Monday to a positive indication as to the strategic direction of this country."

The UK government is expected to announce on Monday it is not yet ready to adopt the euro. It will indicate when, if at all, it might be prepared to hold a referendum on the issue.

Ford Europe President and Chief Operating Officer Martin Leach told Reuters two weeks ago that the company assumed the country would join the euro sometime between 2004 and 2006.

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

Not an isolated viewpoint on the part of big business. Do you think it will eventually influence the political will on the issue? It is harder to imagine it NOT having an effect. A matter of time.

Gold for the transition.


21mabry(No Subject)#10422406/06/03; 10:09:01

Thnx Waverider, One of the best used bookstores I have been in is the Strand in Manhatten amazing if you go to New York visit it. Also to throw a gold refrence in tour the Fed Building you can see the gold in their underground vault, got to call ahead to register for tour, then go across the street and tour NYSE. 21
a nation of onemeandering cause#10422506/06/03; 11:35:04

Let us now temper the tale of the Naked Emperor with a touch of reality. If his domain were Cuba,
his ruse might continue for forty years. And what of a boy who would point out such a thing? Only
disapproval? Banishment? Prison? Death? Surely Bush is not such an emperor. For he has led his nation to
unequivocal victory over a vile and evil man. Nor are any of them naked emperors. They are all honorable
men, willing to do anything for the sake of the people, or to get re-elected, re-assigned, re-appointed, or
whatever. And now we have this DOW and GOLD thing. Do not lose heart, dear friends. Gold will always be
what gold will always be. And worthless paper? Well there is always some use for paper, isn't there, no
matter how worthless? When everything is going well, does the Bureau change the way it tallies its figures?
When unemployment is very low, does the government announce that, actually, the old way of figuring it can
be improved, and, guess what, the new figures are worse? No. When the truth has to be searched for to be
found, and the atmosphere is charged with illusions of sugar plumbs, and no child can explain why the stock
market is going up, what to do? Mr. Bush and his Meritorious Men will do anything and everything to make
it appear there is no economic problem, because his father failed to get re-elected because there was. That,
and other reasons. So we have the DOW climbing up with all the feeling of naturalness that the severed arm
of a long-dead corpse would show. For how long? For as long as a corpse's severed arm can be made to do
so. And how long is that? No mere boy can know that this emperor is naked. It takes an adult. And every
adult knows that emperors don't like their foibles exposed. The masses will be kept ignorant. Today is
Friday, time for the avid TV money shows that the masses go to worship at. Coincidence? To us it is
see-through clothes. But for those whose minds are occupied with their dissipated 401Ks, and yesterday's
paperwork, and who -instead of searching for the truth- stumble blithely about their real main business of
trying to escape that quiet desperation which they are the captains of, toward This Happy Saturday, beyond
this Silent-but-Nonetheless-Darkening Sunday, to Monday-and-The-Week, while all the time gladly
oblivious to whatever else might be.

adminMK's Gold Commentary & Review#10422606/06/03; 11:42:50


Inside story on the Washington Agreement from Central Bank Insider:

"Will the central bank agreement of 1999 - comprising all the big European gold holders - be renewed when it expires in September 2004? Opinions differ on whether it should be renewed: gold producers and gold investors are for it, as it has reduced fear of huge central bank sales, but bullion banks and traders are generally against it. Real market folk don't care what happens to the price so long as they can play with the gold.

specie-manEnergy Issues#10422706/06/03; 11:56:31

Black Blade,

I've not read any of those books, but I've often pondered those sorts of issues in my mind.

I agree with the general conclusion:
We are not a petroleum-based economy.
We are a petroleum-based CIVILIZATION !

No petroleum = no civilization.

When fossil fuels start to get truly scarce, look for things to get really ugly (as if they're not a little ugly already !).

Alternative energy sources must be found. I'm thinking that silver, platinum, and palladium may play an important role in future energy sources. Silver for it's reflectivity, conductivity (electrical & thermal), and photon sensitivity (solar cells ?). Platinum for it's use as a catalyst in fuel cells, etc. Palladium for it's use as a catalyst and as a hydrogen conduit/filter (for fuel cells, or maybe something like cold fusion).

21mabryOIL FOR GOLD#10422806/06/03; 12:11:30

Another and FOA discuss oil for gold quite extensively in their writings,by most accounts there is a 1000 to 1800 billion barrels of petroleum left on our planet the most important substance there is to our way of life. Figuring we use 25 billion to 30 billion barrels of oil a year and this amount per year will increase. We have about 30 years left of oil on this planet.why would a nation accept paper for this commodity as Another and Foa have said only gold is an acceptable form of payment.So I guess taking known gold reserves and plugging it into a formula with known oil reserves we can get an idea of golds true value.I am no mathamagician but that should put gold price in the statosphere.
GoldiloxOil for Gold or whatever the current fad is . . .#10422906/06/03; 14:27:25


Recently someone posted a reference to Nick Cook's book "The Search for Zero Point Energy" and a host of related references. Perhaps the energy moguls are completely aware of the short half-life of their "black gold" and are carefully controlling the phasing in of "new" energy sources, in order to maintain their economic and political control.

Gold has outlasted entire civilizations, it should have no trouble outlasting the waning industrial (oil and steel based) phase of this one. In fact, if the PTB get too nasty with each other, it might easily outlast this entire latest experiment in civilization. Look how imporatant the "gold" finds in Iraq are portrayed to be. Maybe the war was about more than dollar/euro? If the arab nations are hoarding gold to build the Arab gold dinar, they be even more demonic than we are told. Control of the masses is everything - PPT, 19th Century Fox, Jonestown, Warren Commission, you name it. Dis-information is a pervasive weapon.

Notice how carefully both sides "justify" their actions to the minions by relating it to "Biblical" and "Koran" prophesy. The militant Muslims and Christians of the world are perfectly happy using the spectre of world destruction to leverage their control over the disinformed sheeple. This is one observation where Marx was "right on the money". There is no opiate as powerful as "God voices". Perhaps not even "gold fever".

TopazBuena, Belgian etal. #10423006/06/03; 15:06:48

That has to be the most "interesting" (as in the proverb) week in the various Markets I can remember. I didn't want to take my eyes off the screen...but EVERY time I did (to sleep, work or whatever) the indices returned to some semblance of normalcy. The entire monetary spectrum has conspired to provide MY exclusive entertainment...HA!

Confidence: As Physical Gold holders,it appears a REAL possibility there are TWO hoops we have to jump through as we move forward...1: a Crisis of Confidence in the Future(s)...and 2: a Crisis of Confidence in the Present. The first may well see Gold plummet and will NOT be a Dollar/Euro thing. The Market will en-masse abandon any thought of future income to hold "present" Cash. Gold will shine brightly ONLY when 2 develops. Sadly the world will not be a pretty place at that time. FWIW.

BelgianTo WAG or not to WAG in 2004 ?#10423106/06/03; 15:41:24

The Washington in WAG "was" most probably indicating that the dollar and euro made an "entende cordial" on temporary POG-containment. Will this mutual interest, for dollar and euro, still be the same in sept. 2004 ? What will be the $-€ exchange rate be, by then ?
Where will the euro stand on a global scale, within the coming year ?

Yes, there surely will still be CB sales-loans-leases, as to "proportionate" (15%-?) the respective goldreserve-exchanges between memberstates within the EMU and friends.
But this does NOT automatically mean that this will put downward pressure on POG ! Certainly not when the euro has decided, that his time to replace the dollar, has come and is possible.

In other words, horizontal-cyclic, Gold containment can go on as it did in the past 20+ years up until the euro (or oil-or euro and oil) decides it is time to FREE GOLD from the dollar-system !

IMO, it is totally impossible to guess, even by approximation, the world's "monetary" status, one year from now ! One can only speculate on WAG-II or none at all.

If one accepts that CBs can and do contain POG, one must also accept that POG can be maneuvered to the moon. By consensus (ECB/FED) the strongest faction within the willing coalition of Gold containers (ECB or FED) an outside force (oil cartel), strong enough to convince the hesitant (EMU) a fifth horseman (China).

CBs "WANT" the world to see, their so called, goldsales !
What if CB goldsellers should decide to sell minimum goldrserves for highly needed emergency relief at VERY HIGH PRICES ? Well, they would maneuver POG into the stars !
And there "must" be a damned very good reason why they didn't do so, already !

The only consensus up until now is that goldsales were to support the dollar ! What happens when and if that dollar-support consensus, vaporizes ?

An official euro Free Phisical Goldmarket or quasi totally Privatized Gold are the two inevitabilities. The Gold containment cannot go on for ever (practically), because of the rapid detoriating dollar-standard. The dollar paper-mania went too far and too deep. At a given point, the euro will "need" (Free)Gold's support as to present itself as the new standard.

Speculating on what will happen around sept.2004 is as much as speculating on the *timing* of Gold's REVALUATION.

With Gold at 300€ (euro) per ounce for Eurolanders, I don't want to run the risk of making a bad bet on WAG II ! Totally out of the question ! 300€/Oz is an absolutely ridicule price from any point of view. Not even to be considered when taking any possible opportunity-cost into consideration.

CB Gold is and remains as UN_TRANSPARANT as can be ! We can only excercise in thinking/acting as if we were central bankers, ourselves and elaborate on the different stances we would take under different circumstances.
There is NO 101-manual on Gold central banking. The more we have NOW two different (diverging) CBs, ECB and FED !

Yep, THIS TIME IT IS DIFFERENT INDEED, from the two main milestones of 1933 and 1971 ! Then it was "STANDARD" it will become " FREE" Euro-Gold ! With or without the WAG II time-saver.

Ask yourself wich currency is containing wich ? Can the dollar contain the euro and/or shall the euro dethrone the dollar by letting it succomb under its own Debtberg ?

Jacob Marleythe current fad ... ?#10423206/06/03; 15:55:31

"Perhaps the energy moguls are completely aware of the short half-life of their "black gold" " ---- How stupid do you think "they" are? If you and I, who are nobody, can think about this --- don't you think that those whose wealth depends on it have thought about this once or twice???

"If the arab nations are hoarding gold to build the Arab gold dinar, they be even more demonic than we are told. " --

If some key producers made an arrangement to exchange a microgram of gold per barrel on some portion of barrels sold, is this evil???? I think they call that free trade. Many on this forum should herald this as a perfect step toward using their gold as "money". (And Mr. Maybry, the idea was not to run the price, that is why the premise involves such a little bit of gold. No one wants to upset the applecart, they just want a fair price for their production).

And as to your assertion that these "arab nations" may be "even more demonic than we are told." Did you really think about what you said - and here for all the world to see - forever???? You lump the term demonic on whole peoples because they wish to exchange some of their god-given resources for something more than a promise?

And why do you use the denigrating term "hoarding"? Would not "saving" work just as well???? If you sell your hard earned produce, and arrange to have someone pay you a little gold as part of the agreement, would you not call yourself fortunate??? And would you not consider your "hoard" as your savings, your wealth store???

Please, Sir Goldilox, reconsider the statement you make, as to is it fair. And regarding "fad", even though we don't have the "concrete" proof of oil for gold, the premise is as old as men, it is simple barter, and this sort of thing takes place at international levels all over the world -- it is their way to bypass somewhat the strangle of dollar settlement dynamics.

Belgian@ Topaz#10423306/06/03; 16:06:34

Any deep and prolonged crisis in confidence, read "Panic", will always activate the Gold-Reflex ! But this is the typical Gold boomerang thing that was the playground for the professional Gold-traders, seeing Gold as a currency !
This was very OK, for as long as the dollar was not put (could not) be put into question.

There is only ONE global crisis, MAJOR CRISIS, rapidly developping NOW : The final *dollar-crisis* ! All other crisisses are derivatives from the dollar-systemic detoriation. The only crisis that remains unvisible for the general public and the tutti quanti of analysts.
The perfect denial ! It is as simple as that Bro.

Black BladeRe: Marley, 21mabry, etc. - Energy#10423406/06/03; 16:15:37

The Arabs have a saying:

"My grandfather rode a camel, my father rose a car, I fly a plane, and my son will ride a camel"

The point is they know that their petroleum resources are not infinite. With a growing population and greater demands on their single-source economies they are well aware of the limitations they face.

BTW, I talked to a couple of industry people today and it appears that the domestic energy companies are getting a bit anxious about drilling. They are not ramping up sharply until some land access, permitting, and legal issues are resolved. They are growing a bit concerned that time is running short for the drill season ahead of winter and are concerned that they may not come close to any production targets this year. So far economic recession and Spring temperatures have cooperated to help add strong NatGas injection but summer is coming soon and with it warmer temperatures. Right now it appears that a court fight may be brewing between energy producers and environmentalist organizations over land access in the Rockies. I will be getting some paper work done for my meeting with the Governor on Tuesday. A friend is headed to Billings, and a couple of other friends are headed to Denver too as energy related meetings are popping up everywhere. I see a lot of movement that I haven't seen over the last two years. Obviously a lot of people are concerned about energy supply. All this is happening ahead of Energy Secretary Spencer Abraham's emergency NatGas meeting late this month. It should get quite interesting.

- Black Blade

Off to the gym!

Black BladeCorrection#10423506/06/03; 16:17:40

That should be:

"My grandfather rode a camel, my father rode a car, I fly a plane, and my son will ride a camel"


MKBelgian. . .#10423606/06/03; 16:20:04

The Central Bank Insider heads-up puts the bullish case for gold in the hands of Trichet -- but better stated, it puts the bullish case for gold in the hands of the French. It is France's turn to head up the ECB (they've been very patient) and if it isn't Trichet it will be another French financier or someone with French sympathies in my opinion. Welteke seems to be isolated in his gold position without much backing from the German board, otherwise he wouldn't have backed down on his calls for Bundesbank sales. So German central bankers appear to be leaning in Trichet's direction. When you bring the BIS into the mix, Crocket's push for the WAG (which was news to me) from his position of director of the BIS makes it representative of that organization (not simply Crockett), and what it may have to do with is attempting to restrain what amounts to fractional reserve gold lending. To keep it under control, the amount of gold exiting cb vaults must be controlled, hence the WAG -- as I see it, and of course I could be wrong. There's been much conjecture on this but after long thought that seems to be the situation and remarkably, as I recall, FOA pointed this out long before most others were public about it.

Now, I agree thinking about WAG now may be way too much conjecture way too far in advance, but it is worth considering if you wish to be medium to long term gold holder. If nothing else, the proper interpretation now may be central to locking onto gold at what might appear to be ridiculous prices two or three years from now. I rate the odds on renewal as very high for the reasons stated, though we may have a bigger tonnage number allowed as the inability to print one's way out of unemployment takes its toll, and the temptation to sell off the family treasures becomes unresistible. Still, restraint of cb supply will be the issue unappealing to the bullion banks, and the one which will put a bullish spin on gold in the future.

Having said all this, I do not believe that central bank gold sales are as completely negative events. Ultimately, gold ownership is based on a concern that the paper currencies are vulnerable to rapid and irrerversible depreciation. The number of investors who believe depreciation probable is likely to increase not decrease given the circumstances. A supply of gold is a good thing if you are a buyer. In that respect, I think central banks who find it comforting with their metal for interest bearing securities (as the British central bank justified its actions) are doing us all a service.


I am also watching the Newmont situation with interest as it ties into this whole gold lending scheme. The Dizard/FT article this morning states that the bullion banks have already bought back the Yandal hedge -- some 2.5 million to 3.5 million ounces -- and that accounts for gold's recent run-up.

Does that make sense to you? Why would you pay back a gold loan before you even negotiate to collect it at 50¢ on the dollar? Doesn't make sense and it sends the opposite message to Newmont from the one that seems to be most logicalbut maybe I'm reading the article wrong. If it hasn't been filled, it will need to be at some point in the future. But the situation with Newmont/Yandel goes far beyond this one incident. How many other mining companies will be tempted to test the waters?....Another reason for Goldman to hang tough (assuming it is Goldman that is holding out as rumored).

All in all, the Newmont ploy will put a damper on gold lending in the future and this too could effect WAG numbers -- as the sales may not be needed except to cover past dalliances (more Welteke blustering??).

This all fits into my long-standing claim that the bullion banks/central banks/mining companies are essentially in work out situations designed to ratchet down the gold carry trade and lending business with as little impact on the market as possible. But again, things could get out of control.

This is still in my mind the most bullish factor working in gold's favor for the immediate future. I have always thought that the mining companies and bullion banks which seemed gold's most implacable enemies in the past, could very well become its most important friends in the future. The currency situation adds fuel to that fire, as you point out, and if there's no gold to satiate the growing demand caused by the currency situation, the price is likely to rise subtantially in all currencies! If I were a bullion banker now, I would rather be on the other side of this equation at the moment. I would rather be long gold and short the dollar, than short gold and long the dollar. The reasons are rather obvious and perhaps a mad scramble is about to begin. We shall see.......

Thanks for you comments, Belgian. They always force me to think my way through the gold news.

R PowellWeekly COT numbers#10423706/06/03; 16:32:23

I look every week to see how the small speculative class in silver is holding out. And, as has been their habit, they are holding firm. Did today's nickle uptick signal the bottom of this current downturn? Will the 450 level equate to a bottom as the 430 level did on the last downturn?

These so-called small specs did not break (sell their long positions) on that last downturn to the 430 level, nor did they sell to take profits a few weeks ago when the POS was fluxuating just over and under the 480 price level. I am not surprised to see them holding fast here at 450.

Again, these are futures only numbers and they should be taken with a large grain of salt. Very often positions are hedged with the use of options or positions are initiated for the purpose of hedging sold options or either options or futures are either bought or sold as a result of market action to either hedge risk or even increase risk! Simple no? NO, it's not, and I'm always amazed at analysts who firmly state that they can read the COT reports or put/call ratios to determine investor sentiment and future price movements. I wish it were so but I have some grave doubts. So, what do we make of the small silver specs who have steadily held their long futures through thick and thin? I guess there are some silver deficit with dangerously low remaining silver supplies believers in the market. Either that or Ted Butler won the state lottery and is now margined up to his neck in long silver contracts. Actually, there are probably other more plausible explanations. Thoughts !??'s Friday
Happy Weekend !!!.....!

Cometose(No Subject)#10423806/06/03; 17:12:52

I've noticed over the past several days of seesawing on the gold market spot specter that over in the Mining SECTOR the HUI is holding firmly under resistance .......Just took closer look and am finding out that two of the larger
components ...FREEPORT MCMORAN and NEWMONT are both breaking out.....

There is also a rumor that STAMFORD ASSET Management
which has 17 billion under management has recently decided that they are going to now promote coins as a hedge against dollar devaluation....

Does this now indicate that that a change of information is to now be distributed from above signaling a coming change in perception and a flocking of the sheep toward the precious metals and other tangibles?????

What was it I heard about SELLING ( the indexes ) in May and GOING AWAY....
today's action was kind of interesting......
IN light of the reports that came out this week in the manufacturing sector and the cmployment area ,,,there's nothing to celebrate about but we have seen this before...
now haven't we....

THIS Is the pump before the dump where the sheysters on wall street with FED MONEY take futures postions and build a little volcanic top .......close out all their longs while the sheep jump in with both fists and then the sheysters use all the profits they made on the way up to build a nice short futures position right before all support in the bubble evaporates............again.......
We might have seen the high at 9200 on the dow today ......who knows????

One thing is for sure....IF we are in a refining smelter..
when the paper gets finished burning ....what will be left will be precious........metals......

21mabrySilver#10423906/06/03; 17:29:56

R POWELL , I was talking to my friends grandfather who is a bullion dealer in town here.He told me he is having a hard time getting enough silver bullion. He said nobody is selling everyone wants to buy and he tried to buy some 100 ounce bars but could not get near enough of them.
TownCrierFull of gems, er... gold nuggets.#10424006/06/03; 19:09:22 MK already gave you a taste in his Commentary & Review page. At the url above you will find the full installment of the latest 'Central Bank Insider' dated June 9th (yes, we're three days early) courtesy of the Benedict Mander and the rest of the fine folks at Central Banking Publications.

Click the link for some delightfully tasty bits on the BIS, Duisenberg's vexation with the IMF, the Zimbabwe inflation, the swelling Japanese monetary base, and a new world order should Alan Greenspan ever declare for pink grass.

A few story excerpts:
Zimbabwe Cash Crisis
...The central bank has been under fire recently because the country has been suffering from a disastrous shortage of banknotes, presumably because of the runaway inflation (currently speeding at an annual rate of 269%) that President Mugabe's cranky economic policies are causing -- he himself attributes Zimbabwe's economic woes to a "Western plot" to topple his regime. Nevertheless, the country is awash with queues of frustrated locals outside banks who aren't able to access cash as withdrawals have had to be strictly limited.
The government has been cajoling the central bank to be more flexible in its response to inflation, and to intensify efforts to make notes available for use "in cash transactions that have grown in size and in volume". [Bank governor] Tsumba had this week been exhorting the public not to panic, assuring them that extra printing paper had arrived in Harare and that it would be used immediately. The firm that prints Zimbabwe's banknotes has been firing on all cylinders to ease the cash shortage; Tsumba also announced that a new 1,000 Zimbabwe dollar note was on its way in November.
Japanese Monetary Base
...There is even a feeling that the central bank's view on the futility of setting an inflation target for Japan is getting across. The simple reason for their strongly-held view is that there is no credible instrument to attain the target. There has to be a link between monetary policy and the target, but this doesn't exist, they say. "The monetary base, which is all we can control, has risen by 50% over the past two years; prices have declined. The increased supply has simply been absorbed by increased demand for reserves. This is because reserves cost the banks nothing."
There is only one influential newspaper that causes them furrowed brows and deep sighs: "Why is the Financial Times so violent in its attacks on us?" they ask plaintively.

Click url for more of this unique and often insightful slant on the ins and outs of the central banks.


R Powell21mabry#10424106/06/03; 19:11:56

There are many who say that silver is too cumbersome to be a good store of value but, after fiquring how many of those 100 ounce bricks I'd need for a decent sized patio, I say that 100 ounce silver bricks are not cumbersome but too expensive. I do, however, have a great fondness for the silver eagle coins.

Silver... more weight and volume for your hard earned investment dollars.
Happy weekend...

GoldendomeFriday Night , and the Bull Market on Television#10424206/06/03; 19:12:39

Just now, while incessently thumbing the channel change button on my tv remote, I spent a few minutes, here and there, viewing Crudlow and Krammer.

They were busy giving their viewers a big injection of stock Bull-phoria along with their two guests (one a Mike Holland, the other ? ?.) To all of them, the little dividend tax rate cut is going to make All the difference in the world to tech stocks. They gave the big names that are actually probably making some money, but also assumed that even the tech stocks not making money would be rising in anticipation of dividends (but I assume to pay dividends over a longer period it would be good to actually have the money.)

Kudlow says he now expects a big summer rally in stocks-- (well, what have we been seeing since about March?) I guess they all basically see it the same way, since 3 of the 4 see the Dow Jones Stock avg. closing 2003 at between 10,000 and 10,500. The three also see second half growth of 4%! (not too shabby,eh.) Only Cramer was holding out for lower growth of only 3.5% and the Dow at 9500 by year end (what a party pooper.)

Now where all this growth was going to occur they did not say, or I missed in my channel surfing, but they didn't say anything about the persistent and poor employment numbers, the poor new factory order numbers, the swooning auto sales, etc. BUT, I can tell you one thing they all seem happy about, and that is monetary inflation! And personally, I believe that is where it is all expected to come from...Kudlow even said (and I know that you won't want to read this,) he said, that he even likes some of the Gold Stocks because they pay good dividends, and that he is Happy to see gold holding up here at 360 to 370. [As to him, that shows the Fed. is doing it's job of keeping the money supply flowing](my words there, not his).

I think it shows perspective from another angle... In the big Monopoly game of life, some of us pass go and get $200. Others pass go and get $2,000,000. Those receiving the big immediate payouts on all the billions of fiat created by the Fed. want all the more of it. .....Gdome

The Invisible HandHedging sang-froid of eurozone exporters vis-a-vis mighty euro#10424306/06/03; 20:31:08

From The Economist:

ON THE elegant Avenue de Breteuil in the heart of Paris is the corporate centre of Michelin, the world's biggest tyremaker. With 40% of its annual sales in North America, surely Michelin is worried by the dramatic rise of the euro against the dollar? Not at all, says the firm. To keep costs down, Michelin does not even routinely hedge its foreign-exchange risks. For much of what it stands to lose when its American revenues are translated back into euros, it will regain because almost all of its raw materials are priced in dollars.
This sang-froid in the face of a fundamental shift in currency values is typical among big European firms. None denies that the euro's strength will cause problems for Europe's economy overall. Indeed, it might even tip the continent into a full-blown recession-a risk that prompted the European Central Bank to cut interest rates on June 5th. But at the big company level, there is a widespread sense that the euro is one problem that can be handled.
Unlike Michelin, many firms do routinely hedge their currency risks using derivatives to lock in a particular exchange rate. A "partial hedge" can come from issuing dollar-denominated debt, which gets cheaper to service when the dollar weakens. Anecdotal evidence suggests that many European firms have increased their dollar loans from the banks that supply over 70% of European corporate debt.
Most hedging is done using standard financial contracts. Consider BMW, for instance. The Munich-based carmaker had sales of euro42 billion ($40 billion) last year, of which 31% came from America and Canada, and a further 24% from outside the euro zone. It uses derivatives to hedge its overseas profits fully in each current financial year, and partially for the year ahead.
BMW says that its decisions on where it locates production are driven by market needs, not currency considerations. Yet it has created natural hedges for itself by producing cars in America and Britain. By incurring costs in these markets, it greatly reduces the currency translation problem. It opened a factory in South Carolina in 1994 and will produce up to 150,000 vehicles there this year, largely for the American market. It also makes trendy Minis in Britain, which is handy as a hedge when (as of late) sterling weakens against the euro.
Rival Porsche makes most of its cars in Germany, so its costs are mostly in euros. Yet a large chunk of its revenues come from sales of its sports cars in America. Lacking BMW's natural hedge, Porsche uses financial hedging to minimise the short-term impact of currency swings.

silvercollectorG8 summit objectives become clear#10424406/06/03; 20:32:09


Global: Waiting for Traction

Stephen Roach (from Milano)

The global deflation battle has at long last been joined. Once labeled remote, deflation risks are now the defining force shaping macro stabilization policies around the world. Japan, of course, led the way in this assault, followed by massive monetary and fiscal policy stimulus in America. And now the European Central Bank has finally jumped into the fray. This massive policy stimulus is good news for those of us who have long worried about the perils of deflation. At least the authorities have finally smelled the coffee.

Euroland: We're All Deflation Fighters Now

Joachim Fels/Elga Bartsch (London)

50 bp today...

The message from both the ECB's and the Swedish Riksbank's 50 basis points rate cut today was loud and clear. The Fed is not alone in worrying about possible deflation risks, and Europe's central banks are willing and able to act decisively to contain such risks. The difference between the Fed and its two European peers is, however, that the Fed worries publicly about deflation but hasn't reduced rates since last November, while the ECB and the Riksbank worry about deflation only silently and prefer to let their actions speak.

... and real rates are at or close to zero

While real rates in Europe have not yet fallen into negative territory as in the US, they are now at or close to multi-year lows, hovering at or slightly above zero

... and according to the money and credit aggregates

Last but not least, money supply and credit growth also point to an expansionary stance of monetary policy in Euroland, the UK and Sweden. UK M4 was up 8.0% and M4 lending expanded at a brisk 9.6% pace in the year to April. Euroland M3 surged by 8.7%Y in the same month while credit to the private sector rose by a still-healthy 5%Y

What about the puzzling contrast between the ECB and the Fed? While Alan Greenspan has on various occasions expressed his concern about deflation, the Fed hasn't cut rates since last November. Meanwhile, the ECB has cut by 125 basis points while Wim Duisenberg and his fellow council members keep denying in public that there is a risk of deflation in the euro area. In the US case, the answer is obvious, in my view: Chairman Greenspan is truly worried and is trying to dispel fears about deflation by telling markets that the Fed will do everything to counter that risk. In Euroland, our guess is that the ECB is also worried privately but does not want to talk about the risk in public as it fears this could give rise to widespread expectations of deflation, which could become self-fulfilling. Rather, with more room for manoeuvre left than the Fed before the zero bound on nominal rates is hit, the ECB is trying to counter potential deflation risks via action on rates.

Cavan ManWorld opinion will further buttress POG#10424506/06/03; 20:34:52

Let's move on right? (Unbelievable!)

Posted on Fri, Jun. 06, 2003

Data didn't back Bush's weapons claims, officials say
Knight Ridder Newspapers

WASHINGTON - President Bush and his top aides made prewar claims about Iraq's weapons programs that weren't always backed up by available U.S. intelligence and painted a threatening picture that was far starker than what American spies knew, according to current and former intelligence officials and a review of available documents.

Bush and other White House officials also publicly cited evidence - particularly on Iraq's suspected nuclear-weapons program and ties with terrorists - that on closer examination turned out to be false or debatable.

Senior defense officials confirmed Friday that a report by the Pentagon's Defense Intelligence Agency last September expressed significant doubts about whether Saddam Hussein was producing and stockpiling chemical and biological weapons, as Bush, Defense Secretary Donald H. Rumsfeld and Secretary of State Colin Powell all claimed.

"There is no reliable information on whether Iraq is producing and stockpiling chemical weapons, or whether Iraq has - or will - establish its chemical warfare agent-production facilities," said portions of the report made available to Knight Ridder.

While Iraq had biological stockpiles, "the size of those stockpiles is uncertain and is subject to debate," said the classified report, titled "Iraq: Key Weapons Facilities - An Operational Support Study."

The DIA report and other developments illuminate a growing debate over the White House's use of intelligence on Iraq. So far that debate has revolved largely around allegations of pressure on professional analysts to shade intelligence estimates.

The new developments raise the possibility instead that some U.S. officials, deliberately or inadvertently, magnified what they were told by spy agencies, which had an incomplete picture of Iraq and few sources of their own to fill in the blanks.

The DIA report was completed just as the White House was launching a campaign last fall to make the case that Iraq's weapons of mass destruction and terrorist ties presented a grave danger that justified pre-emptive military action.

Vice Adm. Lowell Jacoby, the DIA's director, said after a private meeting with senators Friday that the report didn't mean that Iraq didn't have caches of chemical and biological weapons, only that his agency couldn't definitively pinpoint them.

"Some people higher up the food chain made the leap from suspicion to conviction," said a senior military official who is critical of how the intelligence was handled.

"I think they honestly believed that, based on how the Iraqis had always behaved in the past and not just because they wanted to scare the public into supporting the war," said the official, who spoke only on the condition of anonymity because of the classified information involved.

In a speech Oct. 7 in Cincinnati, Bush said the Iraqi regime "possesses and produces chemical and biological weapons." Powell told a television interviewer Sept. 8: "There is no doubt that (Saddam) has chemical weapons stocks."

The DIA report, whose existence was first reported by U.S. News & World Report magazine, illustrates how intelligence reports were much more equivocal. That reflected the shortfalls in U.S. spying capabilities in Iraq and the uncertain nature of the intelligence profession, officials have said.

"It's looking like in truth the Iraqi (weapons) program was gray. The Bush administration was trying to say it was black," said former CIA Iraq expert Kenneth Pollack, who's now at the Washington-based Brookings Institution, a research center.

Pollack, who advocated a war to overthrow Saddam, said he believes more evidence of Iraqi weapons activity will be found.

But on Iraq's suspected nuclear-weapons development, which for him and other analysts was the most alarming program, "we've clearly uncovered nothing" so far, he said.

The U.S. military has captured two Iraqi mobile laboratories apparently designed for biological arms, although no traces of germ weapons were found.

The failure by search teams nearly two months after the war's end to find chemical, biological or nuclear caches in Iraq has led to growing questions about the war, on Capitol Hill and in allied capitals.

It also has re-ignited vitriolic behind-the-scenes battles in Washington that have put administration hawks who advocated war on the defensive.

"The knives are out," said more than one official.

Undersecretary of Defense Douglas Feith, the Pentagon's No. 3 official, called a news conference Wednesday to deny reports that a special unit in his office had exerted pressure on the intelligence agencies to dramatize the evidence against Iraq.

The CIA is standing by its formal estimates of Iraqi weapons of mass destruction, said a senior U.S. intelligence official. Those include an October 2002 report, which stated in part: "Baghdad has chemical and biological weapons as well as missiles with ranges in excess of (United Nations) restrictions; if left unchecked, it probably will have a nuclear weapon during this decade."

"I think it's appropriately caveated," said the senior official, who also spoke on condition of anonymity.

The report parallels a highly classified National Intelligence Estimate on Iraq, which represents the combined views of all U.S. intelligence agencies. The NIE now is being rechecked as part of an internal CIA review.

American intelligence officials expressed cautious optimism this week that they are getting closer to new information on Iraqi weapons of mass destruction, after wasting a couple of months chasing bad leads drawn from Iraqi exiles and U.N. weapons inspections that ended in 1998.

Iraqi scientists and officials are beginning to talk after either refusing or repeating ritual denials that Iraq had any such weapons, they said. "We're starting to get better information now from people who initially didn't cooperate," one official said.

Still, along with the missing chemical and biological weapons stocks, several key statements by Bush and his aides have yet to pan out or have been proved false:

In the president's State of the Union address Jan. 28, he cited a British intelligence report that Iraq sought to import "significant quantities" of uranium from Africa.

Intelligence officials said his statement was based on documents forged by a diplomat in Rome from the African nation of Niger, who made them using a fax machine. The diplomat sold the forgeries to Italian intelligence officials, who dutifully passed them on to the United States and Britain, officials said.

Bush, Powell and others spoke of Iraq's attempt to import aluminum tubes, which they said could be used in centrifuges to enrich uranium for nuclear weapons.

Powell, in a presentation Feb. 5 to the U.N. Security Council, acknowledged there was a debate over the tubes' intended use, but said the majority of U.S. analysts believed they were meant for a nuclear weapons program.

Mohamed El Baradei, the director of the International Atomic Energy Agency, told the Security Council a month later that extensive investigation "failed to uncover any evidence that Iraq intended to use these 81-millimeter tubes for any project other than the reverse engineering of rockets."

Rumsfeld, Vice President Dick Cheney and, to a lesser degree, Powell charged that Iraq was harboring terrorists, including a major cell linked to al-Qaida. Officials say they stand behind these statements, although no new evidence of terrorist links has emerged publicly since the war's end.

"What happened here is that people who meant well and who had a really aggressive foreign-policy agenda allowed their enthusiasm to overcome them," said Walter P. "Pat" Lang, formerly the DIA's top Middle East analyst.

"In some cases, they managed to push the intel guys back," Lang said, referring to pressure on analysts. "In other cases, where they couldn't do that, they simply ignored them."

(Knight Ridder Newspapers correspondent Jonathan S. Landay contributed to this report.)

silvercollectorJacob Marley#10424606/06/03; 20:47:01

Very good post today.

He who holds the gold makes the rules; I believe this statement to be correct, AFTER the oil is gone.

In the interim, he who has the oil (and possibly/probably the biggest gun makes the rules. Inclusion of micrograms of gold in a barrel seems like a good idea to me.

"Here's your oil, thanks (?) for the monopoly money but more importantly thanks for the metal, talk to ya soon"

21mabry(No Subject)#10424706/06/03; 21:25:07

Jim Puplava has Mr. Fleckstein on interview this week its up on site now its a good interview he is bullish on gold but especially bullish on silver.Mr. Fleckstein also writes for the
Goldiloxcurrent fad . . .#10424806/06/03; 22:33:46

@Jacob Marley:

I'm apologize, but you missed my facetious tone. I was trying to paraphrase the PTB's demonizing the arab leaders, not express it myself. I strongly believe in fair trade, but how fair can it be when one sovereign nation invades another under the guise of WMD and that same demonization. Many of the participants on this forum are quite convinced that the currency and oil wars have more to do with picking Iraq as the premier invasion target than any WMD or tyranny smoke screens. Half the world's governments are tyrannical despots murdering their internal dissenters, many with the full military support of the major nations. Saddam was not any more deadly than our other "friends" in South America and Africa, but as Wolfowitz was quoted in Southeast Asia a couple days ago, "He was sitting on a sea of oil."

Black BladeGas prices hit manufacturers #10424906/06/03; 23:07:04

With natural gas prices about double what they were a year ago, companies starting to feel the cost.


NEW YORK (Reuters) - U.S. owners of paper mills, aluminum smelters, and chemical plants are still waiting for the "peace dividend" in the form of lower energy prices now that the war in Iraq is over. When war was being waged in March, investors and analysts were looking forward to an oil price heading to the range of $20 to $25 a barrel once American troops had taken over Baghdad. But with the price of oil still close to $30 a barrel, natural gas prices are nearly double what they were a year ago -- making energy costs in the second quarter higher than many had expected. "Unfortunately a lot of the things that we were hoping were going to make the second quarter better than the first quarter haven't materialized, including energy prices have not come down," said D.A. Davidson paper industry analyst Steven Chercover. "Anyone who was expecting a kicker from lower energy prices will be largely disappointed."

Concerns about the cost of natural gas have overtaken concerns about crude oil prices. And as North American gas output continues to decline, forecasters are not expecting relief anytime soon for companies like International Paper Co (IP)., Alcoa Inc (AA)., and DuPont Co. (DD) that use large amounts of natural gas to power factories and mills. "It's an ongoing issue," said Kent Newcomb, an analyst at Banc of America Capital Management. "The inventories were so low coming out of the winter, and there's just a good deal of concern that we're not going to get those built back up in time for next winter."

Black Blade: It's going to be a race to the finish now. Drill rig counts are still quite low and production is falling. The word is that companies are ready to hit the fields once land access issues and permitting is worked out, and environmentalist businesses stand ready to file suit to get injunctions to stop drilling. If the mild temperatures fail to stick around this summer and next winter, and US businesses actually experience the touted "economic recovery" then it's unlikely we will go into next winter with adequate NatGas supply. It's going to get very "interesting".

mikal@Black Blade#10425006/06/03; 23:42:39

Thanks for your excellent, committed output.
I see that the bottom line of local governments and consumers will also get hit by rising energy costs. And also hit indirectly, as manufacturers absorb the same costs only until they can no longer be passed on to customers.
This is one of the effects of stagflation. Another is the rising cost of imported products that our declining exchange rate imposes on public and private consumers and corporations.
While crude oil closed to almost $31.50, I have long considered this overdue and just the beginning phase. This and today's gradually rising natural gas prices, which in themselves are so high as to not be taken seriously by the majority of gullible commentators and consumers, are other elements in stagflation.
What is the true cost of resource and food commodities, like lumber, rubber, cotton, wheat and metals, is a question that will be more pervasive and unfortunately, more ponderous than most can imagine.

21mabry(No Subject)#10425106/06/03; 23:50:59

BlackBlade, I was listening to the bloomberg today energy sector analyst was on saying what you have been saying for 6 months now.She was even saying we could run out of stocks of natural gas next winter,if its a cold one.
Jacob MarleyGoldilox#1042526/7/03; 01:43:28

Good evening, Sir. Thank you for clarifying. Forgive me for not understanding your intent. It was though, important for this to be set straight. Please, let us now get back to the business at hand, and analyze these gold events as we perceive them unfold. I shall look forward to reading your posts.
BelgianM.Kosares : Forcing our way through the Gold news....#1042536/7/03; 02:00:24

WAG II : Self imposed discipline on CB Gold-exchange-reserves !
The "tonnage" of Gold kept at the CBs is much less important than the price-valuation of these Goldreserves and the pricing-mechanism in wich the existing Gold-volume is managed today...and is foreseen in the future.

It doesn't matter how much Gold you is its price-evolution (valuation) that is the most important !
It is for this reason that CBs can keep on "managing" the gold-volume AND its price. As long as we remain in the status quo of "contained" Gold, the temptation to diminish the CB goldvolume stays there short sighted solutions.
After all, let us not forget that Gold is a reserve and reserves are there to bridge difficult periods.

The less Goldreserves that CBs might (proportionately) hold into the future, the higher its price-valuation will/shall/must be, when goldreserves land into the FREE GOLD system.

Simple math : 1 tonne of Goldreserves x 300$(€)/Oz = 1 billion. 1 Kg of Goldreserves x 300,000$(€)/Oz = 1 billion.

The more CBs sell Physical Gold nakedly, the higher the price valuation of the remaining Goldreserves will go, later.

Remember the early discussions on by how much percentage the euro should be backed by Goldreserves : 30% or 15% ?
The lower this percentage might go, the more plausable that EURO FREE GOLD will emerge !

The Trichet gold-faction within EMU prefers an as high as possible tonnage (goldvolume) for CB goldreserves as to have maximum room for maneuvering. The other factions (Portugal for example) want to exhaust (exploid) the Goldreserves up until the absolute minimum holdings ! Voila, it is this struggle (difference of opinion) that's happening.
A compromis between those two, might be to absorb the CB goldsales, physically, into a BIS shelter for later use, distribution, re-allocation or transfer to outside EMU, euro-friends ! I bet on this theory that this has actually been going on. An anticipation of/on Free Gold.

It speaks for itself that such a game (project) must remain invisible. More precisely for the miners in particular.

Sir Kosares, I don't believe in any PHYSICAL "buy-backs" of the mining forward-sales ! Delivery into the forward sales, roll overs, renegoticiations, fiat settlements, decline in more of the same forward sales...are surely all possible, but not going to the Gold spotmarket and buy Physical as to neutralize/settle the forward sales. No way !

The POG is most probably managed as to provide the minimum minimorum price for the bulk of the miners as to NOT disturb the regular Gold offer to satisfy the demand for the industry AND to satisfy the Physical (investment) Gold demand of the masses of lilliputans (us) around the world.

The gold-contract players (fiat hedgers) are allowed to maneuver within this context. Keep the minimum of Physical Gold available for the masses, without rocking the price !
Don't disturb Gold (The Gold-management). Consolidate the business of contained Gold (prices) in all its aspects.

The installment of the paper-goldmarket after 1971 was not done for nothing and has proved to be in complete harmony with the CB's policies of price-inflation-management.
Greenspan suggested subtly (braggingly) that the world's CBs succeeded in having replaced the goldstandard with the perfect instrument of paper POG management.

And it is here that FOA's fundamental thoughts come in the forefront : PRICE INFLATION >>> CURRENCY DEPRECIATION !
CB's POG management as the perfect maskerade for the hopeless dollar-depreciation ! The fake "standard" !!!

A lot depends on France, being allowed to take Euroland's lead ! To what extend will we allow France to revive (aplicate) its Gaullistic nature !? Hahaaaa, why "must" France be the dollar's scapegoat ?

The euro-Gold project is in the pocket (Free Gold) but this has to get embedded into the politicians minds, slowly and very delicately. And that's a hell of a job (cfr. Welteke).

Let us NOT forget that a runaway POG simply finishes the dollar, instantly, in its reserve status !!! The "minds" (a lot of these) must be prepared (moulded) for this rockmoving transition !!!

And here I would like to reflect on Cavan Man's growing insights...
Yes, is about "oil"...OIL !!! Soon, much more will go "CLASSIFIED" on this subject, à la 9/11 !!!
Gold is the secret (classified) dossier of the dollar AND the euro ! France, risking to turn Gaullistic, once again, wants to rock the boat(s) ! Not Freedom fries but FREE GOLD to replace the dollar standard, based on oil-flows !

Nice weekend to all.

Yellow Metal"I fly a plane, and my son will ride a camel"#1042546/7/03; 03:18:34

The Oil/Energy concern seems more than usual to be a topic on this board today.
I have just read an interesting article in V Headline.Com by a Mr.Andrew McKillop who,

"is a former expert, policy and programming, Divn A - Policy, DG XVII-Energy, European Commission, founder member, Asian Chapter, Intl Assocn of Energy Economists"

(V headline is a often visited site of mine as I like to root for the underdog ) :-)

The author is probably familiar to BB and the concepts too but they opened my eyes wider so I thought I'd bring them here.

A couple of snips if I may . .

snip. petroleum industry commentarist Andrew McKillop writes: Like it or not, the world is moving rapidly to absolute peaks in the capacity to find, prove and extract ever more oil and gas. The time to reach Peak Oil, the maximum possible production rate for ‘all liquids’, that is including heavy oil and tarsand or bitumen-based oil as well as conventional crude, is probably less than 7 years depending on how world and regional demand profiles evolve.


agencies such as the OECD's International Energy Agency calmly publish forecasts that the world will be producing about 120 Mbd in the 2020-25 period. According to ASPO, and a growing number of oil geologists, consultants, advisory groups and ... without openly stating this ... increasing numbers of oil industry majors, this is simply impossible. By about 2010 production, and therefore demand, can only fall if slowly at first.


After a long period of unrealistically low prices, we will experience a ‘quantum change,’ stepwise leap in oil prices as in 1973-74 or 1987-81 with all that implies in terms of panic driven, ineffective or harmful responses to what, this time, will be permanent and physical shortage of oil.


A sudden stepwise increase in oil prices to even the $80-$90/barrel range will, perhaps ironically, but almost certainly in fact increase economic growth at the world level, leading to yet higher world oil demand, which will then reinforce price rises. This however will entrain an economic and then political context where firstly economic recession and then deep and unyielding economic depression will inevitably set in, in the formerly rich nations of the OECD.

end of snip

The article is quite long.
As I said, very interesting for me. I would be interested in other's views.

Cavan ManYes, Belgian#1042556/7/03; 04:54:41

It most certainly is, "Larceny on the High Dunes" (a CM original). Certainly, you may quote me on that :>)
BelgianHoi Yellow Metal#1042566/7/03; 05:20:40

Is there something like another "crystal ball" for Petroleum ? Perhaps a speculative one...yes ?
Today's facts : Military deployments at the major oilfields (reserves) and oil-corridors (pipelines).
Is this in anticipation of nearby future, oil/gas shortages (exhaustion) or is there another "fundamental" ? Or is it a combination of confluent factors ?

IMO, it is the latter. Monetary disorder AND the end of *CHEAP* oil-energy (availability).
But our main human asset is our extreme flexibility. For every problem we find a solution that carries another problem with it. The NWO is trying to monopolize the whole world. Let me control the remaining reserves and thy will fare well !? Yep, and with this supposed solution...the other problem comes with it and risks to aggravate the already precarious situation.

Cartelization of oil-Gold-money supply...etc ! It all results in one thing : The decline in standards (GOLD) that is NOT reflecting its rise or fall in value but its "detoriating" stability, credibility and constancy !!!

The oilreserve realities are having an impact on (dollar) monetary authorities who are NO more devoting themselves to maintaining the value of one dollar as a standard of value, a unit of account, a numeraire ! Unconcerned about the quantity of them ($) in use ! Main problem is that it is easier to measure distance than to measure value.

All this theorytisizing has already been done before we started it here on CPM. Much of the growing dollar-problem is falling on the resource-reserves (first and most important one-oil) and the management of it. For 3 decades now, the dollar must be protected at all costs.

The dollar affects the POO and that POO is the main determinant for oil-policies, including the management of the remaining global oilreserves. The dollar makes the difference between cheap and expensive oil. The outlooks for cheap or expensive oil are quite different. All a matter of wastage/spillage of the limited precious resources. It is NOT America who will go bankrupt but our dollar-reserve went already bankrupt a long time ago !

One can extend the lifetime of the available resources when using wise policies. This isn't the case and the dollar is the main culprit.

Note that in the constant flow of lies about Iraq...there was *one* constant : THIS IS NOT A WAR ABOUT OIL !!!

The appropiate supply of oil is as difficult as the appropiate supply of money !!!!!

At present there is one Giant Elephant bull running through both supply shops of oil and so called dollar-money.

Please do not forget that we already have an oil-alternative. Nuclear energy ! This to evidence that the oil (dollar) problem has been anticipated already quite some time ago ! But again this reduces the problem back to cheap or expensive oil. And that is absolutely dollar-related.

Let OIL and GOLD become VERY precious and revaluate BOTH for perfect barter. Than we have REAL standards on wich we can set out *wise* policies for the future. Make it a "NICE" world !!!

Free Precious Gold is the best barricade/dam against wars and other atroce stupidities causing needles suffering and misery. Wars'suffering, atrocities and stupidity are far from declining and that's why Gold will overcome !

7nomadsRE: Yellow Metal#1042576/7/03; 06:42:44

A couple of years ago I found the above site. It calls for Oil Production to peak in 2006. In 2008 OPEC will begin producing more oil than non-OPEC nations (before our last Middle-East intervention).

Of course most people think we've got lots of oil. They may fail to realize how much oil America uses in a day. Eighteen million barrel a day. That means every American uses 2.7 gals a day or 990 gals a year (every year).

America has some 20+ billion barrels of crude reserves(1,000 to 1,200 world reserve). We import about half of our needs so we use about 10 million barrels a day, 3.65 billion a year.

IMVHO we wouldn't hear anything about oil shortage in the major press agencies till after next year's elections. After that look for major changes in our society.

My grandfather used to tell me about horse and buggy days. But, it all seemed like a lot of work to me and I'm hoping for synthetic fuels and fuel cells.

Mr GreshamBelgian#1042586/7/03; 07:35:12

Excellent work today!

Oil reserves, gold reserves. My view on it is that the US will be turning into largely resembling third-world countries, with a very visibly divided class structure, and TPTB know how to maneuver with this. (Gated enclaves, private islands, etc. Orwell's "3-minute hates" against the atrocities Eurasia has lately committed.)

They cannot be planning to let the remaining oil be used up by teenagers cruising around the county on a Friday night. i.e., higher and higher prices, whether it's to be al Qaida or Trichet blamed for the "crime against our lifestyle".

The signals have to be out there for their tuned-in "members" to transition existing businesses into depression-secure revenue streams, or hard assets. We are fortunate in being able to tune our tiny little Lilliputian antennae to some of those signals.

And even if we're hearing these "messages" incorrectly through all of the static, -- I feel like we're the WW2 Enigma code-breaking staff here -- what's the downside with our investment of choice? I mean, if I'm crazy, then why does my risk/reward look so darn good?

Mr GreshamEamonn Fingleton#1042596/7/03; 07:50:15

"How America Lost Its Industial Edge" -- great, stimulating article that pulls together lots of what we've studied here, with a view toward future events.
cockerel1North American Oil Reserves#1042606/7/03; 08:25:29

As a relatively newcomer to this forum, and being somewhat overwhelmed by the good people who offer excellent information for all the "interested browsers", I feel as though this little snippet of information can add to the discussion. If not, my apologies in advance.

The vast area around Fort MacMurray, Alberta, Canada, know as the "Tar Sands" is believed to contain more oil than the Middle East. With todays price range, Billions of $'s are being invested into this area.

The area also stretches into the Province of Saskatchewan and as long as the price of oil stays in todays price range, this area becomes very viable as a contributer to the energy sector.


Cavan ManHi Belgian#1042616/7/03; 09:44:23

If there is any truth to the long running commentary (I really miss it) of A/FOA than with Iraq, the US has said, "We (US) call your (EU/ME) bluff. This is our contingency plan." Cheap insurance; but at what cost to global (in)stability? The train has only slowed somewhat then. Ultimately, the Euro deepens, the dollar weakens, the Yuan awaits but does not wait upon monetary destiny. The world monetary regime is in transition yet, while waiting and watching, the reasons to own physical gold (and perhaps a few, select jrs) are legion. We're all on that train. Those passengers with the golden tickets should have an opportunity to exit at the last stop before derailment.
LeighCavan Man#1042626/7/03; 10:37:38

Way back in the summer of 1999, when I first started reading ANOTHER and FOA, I told my husband what they were saying about gold, the euro, the dollar, and oil. The very first thing he said was, "If they don't sell the oil to us at a reasonable price, we'll go over there and take it." (He didn't "know" anything, and he's not a belligerent type of guy; he just said what he believed would probably happen.) I just laughed at his words back then, and now I'm amazed that it actually happened.
CoBra(too)Cockerel1 - Welcome to the Discussions#1042636/7/03; 10:48:33

The Atabasca Tar Sands, as well as shale oil and similar structures in other regions hold the promise of vast reserves of more hydrocarbons to be exploited by the "Hydrocarbon Man".

I've seen numerous promises of novel technologies to exploit this wealth at 'reasonable' cost come and go over the last 30 years. I've also seen most of these projects being abandonded again as the real $-cost of POO went back to below 10$/bl. It may be true and it may also be as delusional as the two oil price shocks in the 70's threatened to derail the US $ Reserve status to change the exploitation patterns of not re-newable reserves. -

- (The same holds true for the tar sands - and on top of it 2 generations have more or less staked their survival on these cheap resources - the chances missed to convert to really sustainable energy resources are legion ... and may be proportionally aggravating future distortions in this balance ... Not to touch on the environmental damages at this point).

Just by chance the last chance may be bio-mass - a saving grace of the global warming, enhanced by our reckless exploitation hydrocarbons, necessitating billion years of forming those mega crude pools like in the ME - as the only 2 generations used the dwindling supply for delusions, as the last resources may become much more important for the survival of humanity as an important resource for pharmacy and other vital uses.

In the end the (ab-)use of limited resources - as the abuse of savers for their retirement, offering negative IR's for the only productive capital enhancing productivity - which are savings, or consuming less than earnings - has beenn ridiculed officially by the Bernanke's of this Dollarized world. Soon to be ridiculed ny the real productive regions of this world.

I'm not at all forgetting the immense contributions of the US - and won't even go into the history of the aftermath of WWI and II - so suffice to say, no empire was prolonged by deluding and in the end dictating the price levels of real products for ever - and in particular against a fiat paper currency, which has declared bankruptcy, already twice in the last century.

The overall obligations of the US, internally and externally have reached a critical mass, which very well be self destructive in the near future.

Protect yourself with exchanging your fiat to real money as long as the PTB are providing bargain basement prices ... cb2

Cavan ManHi Leigh#1042646/7/03; 10:53:05

So good to see your post and, God bless you. There is an old movie about "taking" the ME oil in a pinch, "Three Days of the Condor" with Robert Redford. It's a 70's flick.
Cavan Man@CB(too)#1042656/7/03; 10:54:21

Now I understand your sobriquet.

I am a GREEN! Bio-mass is chic.
CoBra(too)CM#1042666/7/03; 11:08:32

Hi CM,
Not necesarily a Green, though really advocating sustainable supplies of any resources - and not purely exploiting them on a present cost calculation - as you guys have been demonstrating for quite awhile in your neck of the "woods"- you don't need to diminish forests at the same pace while you can use and recycle newsprint and other one day wonders.

Nice to hear you and also best regards to Leigh ... BTW - Is it Sacher Torte again, or I'd send one anyway for 'indepence' day ... cb2

Cavan Man@CB(too)#1042676/7/03; 11:15:11

No, I'm Irish! What I am for is a sustainable lifestyle for humanity. I wouldn't belong to any political party that would have me as a member. ("What's the secret word?")Smile and have a happy....CM
LeighCoBra(too) and Cavan Man#1042686/7/03; 11:32:47

Thank you for your kind greetings! I always read every day what you guys write, even if I don't have much to say. I'm still looking forward to our long-awaited Forum get-together, when we're all zillionaires.

CoBra, we've never forgotten about the wonderful chocolate Torte. In fact, somewhere around we still have the wooden box that it came in. That was such a kind gesture, and it meant a lot to me back then (I think you remember why). We're still at the same address, whether you send anything or show up to visit in person!

Best wishes from (very) soggy Virginia.

Mr GreshamRegarding Henry (C K Liu)#1042696/7/03; 12:30:44

I'll bet I could spend all weekend reading his 6-part series on banking. But I won't -- too nice outside -- into the bookmarks it goes.

Hi Leigh -- good to hear your "voice" again. I assume you'll send your jet to pick me up for out get together ;)

Also welcome to Cockerell, and g'marnin' t' th' green friends C & C. (Why don't we have a Condor(too)?) I might just lend my eminence gris to the next tree-sitting chainsaw-massacree-stopping hippie-no-goodnik getajob Bushco National Forest clearing expedition. Wear my best suit to it, though. Knowhuddahmean? (If I can't just fuhgeddaboutit.)

Camel"Here comes the sun"#1042706/7/03; 13:00:09

With the oil/ gas wells suckin air and unemployment on the rise don't forget solar power in the mix of alternatives to oil.

The economics of solar hot water heating are completely differant when natural gas is priced at $6 rather than $3, paying for itself in under 10 years.The average household spends about 15% of its energy consumption just heating water,using up huge quantities of gas that would be better saved for some other purpose.

Evidently we will have a Home Depot every few miles all over the country (world?) because their statisticions have told them that this is the optimuim leval of saturation
to capture just the right number of people to make each unit
economically viable, and they have unlimited credit to build as many units as they please, like a cancer spreading over the land.

Never mind what it does to all the mom and pop businesses that have to compete with them, someone has to build the new power plants to heat and cool them. Most people would be astounded at the monthly cost to keep a large stucture going, in the tens of thousands$ per month.

Photovolteics can't solve the problem but thermally powered solar heating and cooling units have been around for decades and are perfect for a large wharehouse type stucture.

BelgianCavan Man/Leigh (and husband)#1042716/7/03; 13:14:02

The dollar-Arabian oil-The ME...This story is far from a happy end. One of the major prices that needs to be payed, for a relative peace overthere, is a Palestinian viable state WITH the return of millions of Palestinian refugees to Palestine !!! In other words, the Israeli government must pay for some kind of apeasement. And I don't see this happen. Bush can't push this through or can forget, being re-elected. Iraq will turn into another Palestine and the world is NOT going to accept any other war/occupation attempt in the ME (Iran+oil). Therefore, the attention might be brought to something spectacular to happen in N.Korea as a means of distraction maneuver and luring Japan into the logic of war.

Certainly not the kind of environment for global economical prosperity. And a reason why we get closer and faster to monetary disorder.

CM : FOA stated that if there is a Gulf war II, the dollar exchange rate would plummet. Can't find the exact msg # number. Gulf war I was also about oil ! Arabian oil had to pay for the costs of this war with lower oilprices. That's when they got their message about oil (OPEC control) and contemplated about the euro for oil.

Nobody cared about Saddam being a cruel dictator (like many others). But when Saddam tried to find a solution to get the POO higher (at 21$) and invaded Kuwait for this...that was the fatal step to far. During the 12 years embargo, Saddam found another way to provoke the dollar, with his oil revenues turned into euro and thereby giving the euro an advantage in its struggle with the dollar who succeeded to knock down the euro by a hefty 30% at the outset.

All these elements, together, within this last decade, are not coincidence and therefore evidence that oil is in the middle of the euro and the dollar. Why should one doubt that this will happen, similary, with GOLD, standing in the middle of the two competing currency systems !?

Dollar-Oil-Euro >>> Dollar-GOLD-Euro !!!

Politicians are hiding behind 1/ noise 2/ confusion 3/ complexity as to cover their very, very simple and straithforward REAL intentions !

BTW (all) : There's a great essay at the neighbours by J.Mauldin. Some other people who think that the dollar standard (not the currency or America !!!) might be bankrupt.

Leigh: When Gold is Free, I'll bring a load of Belgian chocolats (pralines) to Sir Kosares' team in Denver and pay for dinner , wine and beer for all of us, millionaires or zillionaires or whatever. I have a strong habit of keeping my promesses. Let us hope it happens sooner rather than later.

Chris PowellAll that promises to glitter isn't necessarily gold#1042726/7/03; 14:00:47

GATA consultant James Turk explains how gold
certificates aren't really gold, and why allocated
gold in storage is a lot closer.

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.

21mabry(No Subject)#1042736/7/03; 14:02:39

MR. Gresham asian times is a good website. Leigh you are not alone,everyone who I discuss energy problems with says so what we will just take it.Sooner or later our country is gonna get more than we bargained for doing just that thing. I will bet the romans,persians,and all the others thought they would just take it also. 21
Cavan ManBelgian#1042746/7/03; 15:13:09

Can you post the Mauldin link. I stopped reading him because, even though his letter was NC (no charge), he was simply too ideological for me. TIA....CM
Dollar Bill*/*#1042756/7/03; 15:44:41

From Mr. Greshams link;
I would guess "moderate" inflation is what the fed hopes for.

..Moderate inflation benefits both the rich and the poor, though not equally, because it not only keeps asset prices rising, of which the rich own more, it also equalizes wealth distribution, making the rich less privileged. Moderate inflation enables the middle class to raise its standard of living faster through borrowing that can be paid back with depreciated dollars, as most homeowners in the United States have done in recent decades. Lenders would continue to lend under moderate inflation even if real interest rates yield a narrower or even a slightly negative spread over the inflation rate, because idle money would suffer more loss under moderate inflation and because moderate inflation reduces the default rate, thus making even a narrow spread between interest rate and inflation rate profitable to lenders. Moderate inflation also stimulates growth, which means a larger economic pie for all even if the slice of the pie for lenders may be smaller. Moderate inflation negates the fatalistic American folklore that the rich get richer and the poor get poorer, and enables the American dream of social and economic mobility.

Cavan ManWAR#1042766/7/03; 15:52:24

Four peacekeepers died in Kabul blast

KABUL, Afghanistan, June 7 (UPI) -- A suicide car bomb killed four German soldiers and injured dozens of other people in Kabul, military officials said Saturday.

The bomb exploded near a bus carrying more than 30 international peacekeepers.

The scene was near a base used by German and Dutch troops of the International Security Assistance Force.

Cavan ManRegime change results (more war)#1042776/7/03; 15:54:04

US Troops Ambushed Again in Iraq
VOA News
07 Jun 2003, 20:23 UTC

U.S. troops have been ambushed in Iraq near Saddam Hussein's hometown of Tikrit, while U.N. experts near Baghdad have begun assessing damage at a plundered nuclear facility.

The U.S. military says one soldier died and four were wounded Saturday when gunmen fired small arms and a rocket grenade at them.

It was the latest in a series of attacks on U.S. forces in Sunni Muslim areas of central Iraq that the military blames on remnants of Saddam Hussein's ousted Baathist Party government.

BoilermakerOil & Gas Outlook#1042786/7/03; 16:57:13

Check out this chart and see the reason for declining US O&G production and reserves. The rig count chart looks similar to the price of gold. Soon the combination of no cheap O&G and no cheap gold will reveal the economic charade that has been in progress for many years.

The US economy will be constrained by the price and availability of O&G. Much higher prices are needed to stimulate long term alternative energy sources. Two years ago I thought $50/bbl oil and $10mcf gas would be the trigger. With the dollar declining, these prices will need to be escalated. As long as the US$ is declining against the Euro and other currencies there will be a tendency for oil to rise inversely. NG will follow oil.


GratefulForGoldCavan Man #104274#1042796/7/03; 17:02:44

Here is the link for Mauldin's essay that you requested from Belgian.
Cavan ManGFG#10428006/07/03; 18:49:41

Thank you.
Cavan ManGuile, Cunning, Deceit#10428106/07/03; 18:57:24

How many innocent lives? Where's OBL & Co.?

Pardon the rhetoric please.

Did The Bush Administration Distort Intelligence?

Jun 7, 2003 4:58 pm US/Central
(CBS) President Bush's administration distorted intelligence and presented conjecture as evidence to justify a U.S. invasion of Iraq, according to a retired intelligence official who served during the months before the war.

"What disturbs me deeply is what I think are the disingenuous statements made from the very top about what the intelligence did say," said Greg Thielmann, who retired last September. "The area of distortion was greatest in the nuclear field."

GoldiloxVicious Circles & the US Dollar, Jim Willie CB#10428206/07/03; 19:09:48


International tension is leading Islamics to respond to our overwhelming advantage on the battlefield with an assault on the USDollar. Above the mundane marketplace of commerce, where state diplomacy strains, where world religions clash, where security is breached, where militaries lob missiles and bombs, a titanic battle is being waged with the USDollar, the EU's euro, crude oil, and GOLD. A climactic loop is materializing that centers on our military expeditions and terrorism, urged by national need. Peaceful resolution is unlikely in this battle, neither politically nor financially. The level of risk has risen, compounded by extreme interference with financial systems seeking equilibrium. A careening currency has historically been coupled with higher interest rates. That is precisely how an inflationary recession of a deep variety can occur in the USA. Soon feces might hit the fan, a lot of feces, and a mighty big fan.


Methinks the feces to fan cycle is well underway!

GratefulForGoldFiat Advice?#10428306/07/03; 20:03:16

I've been thinking, in the back of my mind, for a long time about this one issue and I wonder if anyone on this esteemed forum might offer his or her opinion.

I am fully invested in gold and silver. I have been keeping some cash on hand (not in a bank account, but actual fiat "under the mattress") for emergencies. As I've been watching the US$ be devalued, I've found myself wishing I had bought Euros with some of it back before the Euro reached parity with the US$.

My question now is: as a US citizen, would it still be worth my while to buy Euros and/or Canadian dollars? Or will the transaction fees, buying and selling, basically negate any profit? I'm not talking about a lot of money here, maybe $3,000...but I just hate having it sit there and lose value! I would buy more gold and silver, but I know I would be hesitant to sell any gold or silver if I needed money, but wouldn't hesitate to exchange the fiat.

In the Mauldin essay (, written by guest Porter Stansberry, he states:

"Dr. Sjuggerud compiled this list of the annual returns of various asset classes from 1968 to 1981, during the last major collapse in the dollar:

19.4% Gold
18.9% Stamps
15.7% Rare books
13.7% Silver
12.7% Coins (U.S. non-gold)
12.5% Old masters' paintings
11.8% Diamonds
11.3% Farmland
9.6% Single-family homes
6.5% Inflation (CPI)
6.4% Foreign currencies
5.8% High-grade corporate bonds
3.1% Stocks"

So, by his account, foreign currencies didn't produce that much profit.

I hope I haven't been too muddled in my question...and I appreciate any opinions offered!


Cavan ManExcerpted from the UK Independent#10428406/07/03; 20:06:31

Hello Rush Linbaugh.

Spies threaten Blair with 'smoking gun' over Iraq
Senior intelligence officers kept secret records of meetings after pressure from No 10
By Kim Sengupta and Andy McSmith
08 June 2003

Intelligence officers are holding a "smoking gun" which proves that they were subjected to a series of demands by Tony Blair's staff in the run-up to the Iraq war.

The officers are furious about the accusation levelled by the Leader of the Commons, John Reid, that "rogue elements" are at work in the security services. They fear they are being lined up to take the blame for faulty intelligence used to justify the Iraq war.

The intelligence services were so concerned about demands made by Downing Street for evidence to use against Iraq that extensive files have been built up detailing communications with Mr Blair's staff.

Stung by Dr Reid's accusations about misinformation over Iraq's alleged weapons of mass destruction, intelligence officials have given veiled warnings about what may emerge in the two official inquiries into the affair.

"A smoking gun may well exist over WMDs, but it may not be to the Government's liking," said one senior source. "Minuted details will show exactly what went on. Because of the frequency and, at times, unusual nature of the demands from Downing Street, people have made sure records were kept. There is a certain amount of self-preservation in this, of course."

The Invisible HandBritain to join the resurrected ERM before the end of 2003?#10428506/07/03; 20:07:59

and the euro flying with gold,6903,972757,00.html

David Miles, professor of finance at Imperial College, London, is investigating on (Chancellor of the Exchequer Gordon) Brown's behalf. He is due to publish an interim
report in the autumn and a full report before the next Budget.
This could lead to tax incentives, possibly the reintroduction of mortgage interest relief to encourage long-term, fixed-rate mortgages in time for next year's Budget. A fiscal incentive to shift mortgages will not only prepare the housing market for euro entry; it could invoke a spirit of mobilisation for the euro among Middle England's voters. But it may take some time unless the tax break is very attractive.
That mobilisation will be aided by developments around Europe. In September, Sweden is likely to vote to scrap the krona for the euro; then Denmark may decides it's time to cash in its own euro opt-out. In Norway, _not even a member of the European Union_ (emphasis The Invisible Hand's), support for joining the single currency has reached a
record high. By next year arrangements for admitting eastern
European countries will be finalised. By 2006, Britain could
stand alone in Europe outside the single currency. The pressure may be to choose to be in or out of the European Union, rather than just the euro.,6903,972708,00.html

The Bundesbank has issued a challenge to the British
Government by reminding it that entry to the Eurozone would
require a preliminary period back in the reviled Exchange Rate Mechanism.

Speaking to a London audience last week, Dr Jürgen Stark, vice-president of the German central bank, said observance of the Maastricht criteria to qualify for joining the
Eurozone, which include ERM membership, was more important than the British Government's 'five tests'.


The ERM was the Exchange Rate Mechanism from which Soros "took out" the pound sterling in September 1992.
Soros himself says that the reunification of Germany had created a conflict between the two roles of the Bundesbank (the German CB): its constitutional role and its role as the anchor of the ERM (George Soros, "Soros on Soros", John Wiley, 1995, p.79-80)
I like it that it is again the Bundesbank which is making the rules.
Just like the truth for starting Gulf War II is coming out these days, economic and financial events could overtake the politicians' games and give us a golden euro by the end of the year. Let's keep our visible and/or invisible fingers crossed.

TownCrierForbes takes a look at gold, inflation, deflation. Author Susan Kitchens spoke with MK, too.#10428606/07/03; 20:11:50

The above is a three page article by Forbes continued here:
and here:

Look to the second page of the article where our very own MK is quoted.

Despite what appears in typical financial media fashion as anti-gold spin, the article makes some good points if you read between the lines. Like an elephant in the room with you, you simply can't deny that gold is in fact rising, even if the author says that we should not expect a beast of this great size to have got in the room somehow. Whooop, there it is.


HEADLINE: Investment Guide -- What Goes Up
by Susan Kitchens, 06.09.03

Since early April gold prices have been rising, most notably in dollars but in other currencies as well. This might make sense in terms of the greenback's recent swan dive, but it is surprising in light of gold's traditional place as a hedge against inflation. With growing worries about deflation--the polar opposite of inflation--you would think the price of gold would be falling, all things being equal.

They aren't. Gold spiked up to nearly $390 an ounce in the run-up to the American invasion of Iraq, which fits well with classical theory: Global catastrophes can be inflationary. When it became clear that the fighting would be short and limited to the cradle of civilization formerly known as Saddam's, gold receded to the $320 level.

So now, with signs of recession in Europe, a decade of despair in Japan and as dire a deflation warning as you are likely to get from Alan Greenspan & Co., gold should be skulking back down toward $300. In the last two months, however, it has trundled up near $370. What gives?

...The logical factors behind its rise so far--like fear of terrorism--do not seem to account for all of the recent advance. Nor can gold's rise be attributed solely to a weakening dollar. Gold is advancing against most major currencies, up 4% in euro terms and 12% against the yen since April.

...Some investors told Bridges they're not really bothered which 'flation prevails "because they're confident that gold, in either inflation or deflation, will be an asset that performs better than other assets."

Why the confidence? Paradoxically, "‘Uncertainty' is the word," says Michael J. Kosares, author of The ABCs of Gold Investing: Protecting Your Wealth Through Private Gold Ownership, who runs, a gold brokerage in Denver.

"When you look at the menu of selections, it doesn't look that good to the investor. There are savings instruments with a very low rate of return, and the stock market is still overvalued in many people's eyes. The dollar looks like it might continue to go down. And with all that uncertainty out there, people are saying, ‘I better diversify into gold,' and that's exactly what they're doing."

...Since 1944 gold has fallen from 90% of international monetary reserves to 10%. [David Watt, manager of Phoenix Gold Fund in Kuala Lumpur, says] "Clearly if the world has lost faith in the U.S. dollar as a store of value and there is no other credible currency to replace it, then gold will have to be revalued dramatically."

Gold fans say that demand will rise beginning this summer. That's when China will let individuals buy gold for the first time. Later, a gold fund called Equity Gold Trust is expected to list shares on the New York Stock Exchange that will each be backed by a tenth of an ounce of the metal.

---------(these key excerpts from article at url above)------

Call MK and his staff on Monday to get a jump on the rest of the pack and rising prices with the growing trend toward gold diverisification.


Great Albino BatGratefulForGold: your questions...#10428706/07/03; 21:13:03

You will need to have a certain amount of "fiat" in your possession, even though it is losing value.

You have to go to market once in a while, to purchase groceries; you have daily needs which cannot be paid for in Euros, nor in anything but Dollars.

Sure, this stash is losing value, but you have to have it, nevertheless.

Nothing is perfect. You do the best you can, and that's all you can do.

Good luck to you!


Great Albino BatForbes is toxic trash...#10428806/07/03; 21:51:18

Don't you just love the smart-aleck tone of Susan Kitchens' article. This reporter learned her trade well, at a school for writing, but not at a school for thinking.

She thinks she knows it all - and she knows very little, pitifully little. But, she writes the articles because she did her lessons well; I guess one of the first rules of being a journalist, is, "Do NOT write about anything, except from the point of view of what is the prevalent opinion. Otherwise, your readers will not read what you say."

I guess Mr. Greenspan must have understood a long, long time ago, that it was useless for him to hold an unpopular opinion; that humanity, like the lemmings, has an unstoppable urge to cause itself immense harm. And so, he has gone along with the desires of the mass: "Feel Good!"
And he never, ever, talks about consequences, of which he is undoubtedly very well aware.

Perhaps we at this forum are making the mistake of hoping that the masses will catch on at some point, and will buy gold and/or silver.

Probably, it is not going to happen. What I am about to say, may strike some as rather harsh, but here goes:

Aristotle divided humanity into two types, the Free and the Slave. Of the Slaves, some were slaves by accident, having been born Free. Others were slaves by nature.

The slave by nature, does not really wish to deal with life as a Free man. He prefers to do as he is told, in return for his meals, shelter, clothing, etc.

Slaves in antiquity, were mostly treated like members of the family. It was NOT all whippings. I except from this statement, slaves sent to work mines, who lived out their lives in the dark underground. (Some of your gold was mined by these slaves) And other very cruel jobs were imposed upon slaves.

The world has gone upside down since the French Revolution and the elimination of social heirarchies. Nature has its ways of reinstalling the old, old social differences.

Once again, individuals will distinguish themselves according to their natures: some will have gold; the great majority, readers of Forbes trash, will have none. They are the Slave element in society, who want to have their thinking done for them, presented to them in a way they can easily understand, and after reading which, they can feel satisfied that they know what is going on: that everything is going to be OK! Never, ever does this sector want to read about some appalling disaster about to take place!

Don't waste money on Forbes!

Guano from the GAB

Great Albino BatOn "moderate inflation"...and other "moderations"#10428906/07/03; 22:09:40

Moderate cheating is useful to personal advancement, if done judiciously.

Moderate lying is favorable to accumulation of wealth, if it is indulged in with restraint.

Moderate stealing is quite favorable to an increase in personal wealth, if done in due measure.

Moderate cocaine use is quite recommendable as a source of personal pleasure, if done with moderation.

Moderate murder, if done to pre-empt the spread of WMD, is quite acceptable as a means to obtain oil.

Moderate guano from the GAB.

Mr GreshamPNAC, and how it got that way?#10429006/07/03; 22:22:14

Sorry, I'm not an expert, and don't really have the time to keep up with these rascals, but any clues that tie two or more culprits together at the crime scene get my attention.

But it always surprises me how often there is an academic link (Kissinger has a similar etiology) at the root of some nefarious fascisti tendency. I guess I just grew up when Tim Leary was gliding onto college campuses, and couldn't imagine anything arising like this.

Mr GreshamNeocons: A Company front?#10429106/07/03; 22:36:45

Sounds like Lew Rockwell was onto this from awhile back.

My sympathies to any conservatives out there. (Hey! Maybe I'M one! Who knows anymore???) You wuz HIJACKED!

I'd better tell my lefty friends to lay off you while you exhibit any erratic behavior during recovery. (Hopefully, you WILL recover. Seems a natural survival impulse should bring some conservative basics back into American life, shouldn't it?) After all, didn't that other 3-letter agency do that Co-something-pro thing to the "other" side? Talk about politics making strange bedfellows! I think survival will make even stranger ones.

All depends on the rate at which people are able to educated themselves.

Mr GreshamEducate#10429206/07/03; 22:43:56

Of course, that should be: "All depends on the rate at which people are able to educate themselves."

And that is a question indeed. In Rome the decline was gradual, so no generation noticed enough to alarm them.

In modern times, especially with technology rampant, we are able to cut the legs out from under our survival base in a matter of a few years. Now, that's PROGRESS!

I've been holding off diving into the dieoff link above all day -- was it from BB yesterday? Dunno; it's been given a few times. Looks like the chart of the Social Security Fund, eh? Good luck everyone -- I think you can plan your futures now. Tee-hee...

Great Albino BatThe GAB has this Forum all to himself tonight...#10429306/07/03; 22:56:37

The Forbes article quoted earlier, includes this:
Since 1944 gold has fallen from 90% of international monetary reserves to 10%. [David Watt, manager of Phoenix Gold Fund in Kuala Lumpur, says] "Clearly if the world has lost faith in the U.S. dollar as a store of value and there is no other credible currency to replace it, then gold will have to be revalued dramatically."

The fall in gold reserves is really much, much greater than from 90% to 10%.

Reason: When gold was 90% of reserves, that gold was valued worldwide at $35 US Dollars an ounce.

Now gold is approximately TEN TIMES the original $35 US/oz., at say, $350 (actually, we see it somewhat higher around $363 tonight)

So, if we have 10% of reserves in gold, with gold ten times higher in price, then the decline is more like, from 90% of reserves, to...1% of reserves.

World Central Bank reserves are in the neighborhood of $2 trillion (two million millions of US Dollars). The gold reserves (which probably include gold that has been leased out and is now irrecoverable by the CBs) are still around what they were fifty years ago - some 31,000 tonnes.

So how much do you have to stretch the price of gold, to turn those 31,000 tonnes into 90% of $2 trillion?

You work it out. The answer: "a lot!"

Good night from the GAB

21mabry(No Subject)#10429406/07/03; 23:11:33

I am here GAB just got back from the drive in movie was with my girl. Mr. Gresham I am starting on that diehoff link tomorrow it looks interesting..
21mabryBooks#10429506/07/03; 23:25:54

An interesting book on economic history is Fernand Braudel civilization and capitalism from the 15th to 18th century.IMHO its a remarkable work it deals in depth with the precious metals role in world trade. An interesting story related in the book was Colbert in france had oak trees planted to supply masts for the french navy, he figured they would be ready by the 19th century and then they would help challenge British naval supremacy. It was a good plan the trees grew tall and strong but the steam engine made the mast sailing ship obsolete by that time. 21
21mabryGrateful for Gold#10429606/07/03; 23:39:10

last december I bought a thousand dollars worth of Euros at my bank.They charge a 10 dollar fee on any size currency transaction no matter what the size if your a customer.I just did it as an experiment to see what would happen.I think its always good to have another strong currency in your possesion. Its smart to keep some Dollars around to you have to have them.GAB said it in his post you gotta live and do your best.Call around to banks for their rates on currency exchanges it took me 2 days to get my EUROS.21
KiloGAB - I think you got that backwards or inside-out#10429706/07/03; 23:48:45

If your gold is priced at 10x the former price, then your gold backing would be more, not less.

For example, if you have 100 ounces at $35 an ounce, you have $3500 worth of backing. If the gold is revalued at $350 an ounce, you have $35,000 of backing. If the price of gold doubles, so does the dollar amount backed by the gold.

Not that it really matters as fast as fiat is flooding the markets, or at the "official" price that gold is still pegged at by the govt....... 8^)

21mabryGOLDENDOME#10429806/07/03; 23:52:06

Game 7 monday night and remember thats eastern standard time.A friend went to the cubs yankee series tickets for the Clemons start were going for a little less than 3 ounces of gold at todays spot, those were prime seats of course.Go Ducks goodnight 21 those tickets were scalper price of course major leagues are not that expensive just yet.
AristotleGreat Albino One...#10429906/08/03; 00:37:54

RE: your msg#: 104293

The shift in international monetary reserve percentage from 90% to 10% wasn't so much a decline in Gold amount as it was a dramatic *dramatic* *INCREASE* in the non-Gold papery dollar-type portion of reserves.

Yes, you make the point that the amount of Gold is the same as 50 years ago, but not strongly enough. The stress should be on the vast *vast* amount of new dollars added to this mix. Don't jump on me... I just wanted to underscore that point.

There will be a reckoning...

Gold. Get you some. --- Aristotle

BelgianMorning#10430006/08/03; 03:06:58

@ GFG : Your 3,000 $ savings under the matrass : Exchange them for 5 Goldcoins (1 Oz), a phonecall away, and than you have been transforming your, permanent detoriating $-paper into a REAL UNIVERSAL SAVING ! Later you simply decide against wich currency you want to exchange your Physical Gold, for settlement of any kind. Make your own, personal, little, Free Gold Physical Market. IMVHO, the smartiest thing one can do today.

Currency and bond-gambling are NOT worth any risk, today...tomorrow. Currencies are not made (concepted) for "real" savings of one's Wealth.

And if you prefer to *gamble* with your surplus confetti, make a double or nothing bet on the stockmarket/derivative casino.

@ TIH : The euro is deepening, steadily and surely. I don't see any major setback, hanging around, for the time being.
Though, we must remain very cautious.
The UK (former empire and present poodle) will become euro-encircled. Give us an invisible smile, whilst thinking how the Brits will come and beg (sorry) if they may join (sorryyyyy - couldn't resist this one)

@ Gresham: PNAC is Mein Kampf to me. I am afraid, seriously afraid, as an observing Eurolander, that the American People are unwillingly catched in a fast moving process that looks very similar to what happened in Germany. It is amazingly recognizable to me ! Hope that this can be stopped and reversed in time. But will/can this happen if the dollar-system, stops backing/supporting the dollar currency ??? Or will it be the detoriation of the global economy AND the fall out of the dollar-system, together, that will cause further, *dangerous*, US-"unilateralism" !?

What is happening now, has very little to do with the classic "lefties" syndrome. The NWO-thing and globalization are taking a vicious turn imo. Sincerely hope I have it completely wrong here !

@ GAB : In this world, our village, there are not only slaves as you typified . There is a strong majority of wise, ordinarry good folks out there, that have no problem with the idea of GOLD being a real thing of precious Value.
We shouldn't make that old same mistake of "aristocratizing", Gold ! The West only represents 40% of this globe's wealth producers. The East and Far East is in the process of reorganizing itself and drifting away from our Western over-dominance. Gold-denial-aversion is a typical Western phenomenon of the past 20 years.

Sooner or later, the Valuable Gold faction, in the World's CB's exchange reserves (2 Trillion $) will appreciate, first to compensate for dollar losses and later as Free Gold in a Free Goldmarket. The ECB's model with the valuation of Gold as marked to market, Free Gold Market that is ! A precursor for Gold for the people as it should be !

@ Cavan Man : Did you find the recent J.Mauldin article, unbalanced ?

Mr GreshamBelgian#10430106/08/03; 04:52:33

Ditto that. Der Fuhrer had it all down on paper for anyone to read. Hey -- they read, and most of 'em liked it! Even here, where they had to shut up only after Pearl Harbor.

People think, "Oh, it's a nice sunny day, in the best land that ever was! How can any of that nasty stuff happen to me?" Ostriches. (Hey -- let CB(too) make one out of that)

Well, there were BEE-YEW-TIFUL sunny days in alpine Bavaria in Springtime, 1944. (Where I would have tried to hide out, if I couldn't get out of the country.) Could there be a care in the world for most Germans? Well, there certainly was, and besides losing the war "over there", they were getting bombed and about to get overrun, from two sides.

I think Americans even fail to see any resemblance partly for the idiotic reason that those old photos and newsreels of Nazis on the march (I just saw "The Pianist") are in BLACK and WHITE. But of course today, WE LIVE IN COLOR! So that COULDN'T be us!

Now -- in the greater perspective of a Just Universe (which I don't necessarily look for to exist, but let's try it on) -- what had the German noncombatant -- mother, elder, baby -- done to deserve the fiery ends so many of them met?

Not much, but. As near as I can tune in, it was, for the largest number of them: Fail to stop a renegade political regime from turning a naive and neurotic national political life into a criminal enterprise.

No, there won't be B-17s and B-27s pulverizing our cities. It will be something else. What a relief, eh, for following Richard Perle to hell.

TopazGFGold...touch nothing!#10430206/08/03; 05:20:53

A perfect portfolio you have long as your Au/Ag is physical in possession. A man of the future, Bullion Wealth in Hand and a smattering of Cash (as insurance). The USDollar is, imo trapped and can't go up or down from this level...when it does it is just as likely to shoot up as a precursor to a collapse of ALL currencies, Your $Cash will see you through....'till your Bullion can shine.
Cavan ManHi Belgian#10430306/08/03; 06:11:49

I thought the piece by Porter Stansbury written for Mauldin's weekly column was an excellent summing up. I have read it three times now (thick Irish skull). Last night I began looking at Farmland as I've, "got me some" already though, might be calling our host again. Euro knows (long ago); so did FOA.
Cavan ManPS Belgian#10430406/08/03; 06:13:23

Just one tiny oversight in the piece concerning the dependence on imported oil; MEOIL, we got us some.
Cavan Man@Belgian#10430506/08/03; 06:37:15

Here's the piece of data I found most interesting from the Stansbury piece--Gartman's note. Who's at the center of this initiative: BIS.

This possible move away from the dollar as the primary reserve currency for the world is high-lighted by a recent comment from Dennis Gartman (The Gartman Letter):

"At what has been promoted as "The Executives' Meeting of East Asia-Pacific Central Banks" (The EMEAP), those attending took the preliminary steps toward creating an Asian bond market fund to be managed by the central bank's central banker, the Bank for International Settlements (The BIS). According to the Nihon Keizai and The Japan Daily Digest, the EMEAP is a co-operative of eleven regional central banks and it intends to create a fund with contributions from its member banks and to use the money to invest in dollar denominated government debt... initially. Then from our perspective, the fun begins. Given that the idea works in practice, the fund will proceed to increase its size and to start buying debt denominated in local currencies, moving away from the US dollar. The idea according to the Nikkei is to give the Asian central banks a place to invest the dollars their economies generate in something other than U.S. Treasuries. The intention is ultimately to keep the foreign currencies that these economies generate available in the region for investment. They are apparently weary of washing these earnings back into the US dollar, and that weariness has become all the more emphatic in light of Mr. Snow's ill-advised comments over several weeks ago. President Bush's comments over the weekend might have assuaged those concerns somewhat, but they are still looking above for other avenues of investment. Were we in their shoes, certainly we'd be doing the same. The EMEAP's member central banks include Australia, China, Hong Kong, Indonesia, Japan, South Korea, Malaysia, New Zealand, the Philippines, Singapore and Thailand. Other's may join, making the effect even more material. Snow's comments created a veritable blizzard effect."

Golden BearCurrencies Cancelled For Lack Of Interest - By Bill Buckler#10430606/08/03; 07:07:07

"...Now there's a headline which would make quite a few people spray their morning cup of coffee all over the kitchen (or the computer screen). Whatever could it mean? Well, as you may know, both the US and Japan have had negative REAL interest rates for some time now, their official interest rates are BELOW their annual increases in price inflation. On June 5, the Europeans lowered their official rates to 2.0%. The latest European inflation number is 1.9%. Europe now has a REAL interest rate which is effectively ZERO.

This is a phenomenon which is NOT getting the ink it deserves. In fact, we haven't seen it get much ink at all. We go into it in detail in the early June issue of The Privateer (#477 - Published on June 8). Suffice it to say here that the three most important currencies in the world, the three currencies in which EVERYONE has a stake and in which almost ALL world trade is conducted, do not offer ANY real rate of return on investment.

Remember the long-standing "reason" why owning Gold is a bad idea - that it offers no rate of return? Well now, neither does the Dollar, or the Yen, or the Euro.

If the situation wasn't so potentially financially deadly, it would be screamingly hilarious. Japan has been in recession for nearly a decade and a half. The US has a manufacturing industry (the part of the economy which actually makes things) which has lost at least 60 years worth of growth. And Europe (especially Germany) is widely billed as facing the closest thing yet seen to 1930s depression levels of economic activity. Japanese government debt has passed 150% of GDP and is rising fast. US government debt is rising even faster. Anglo-Saxon and Japanese "economists" are urging Europe to scrap their 3.0% deficit limit

But according to the interest rates in these three economic bohemoths, there is no risk whatsoever to holding their currencies. There is no risk component built into their interest rates. In fact, nothing (except rampant manipulation and wishful thinking) is built into their interest rates. In real terms - THEY DON'T EXIST.

It is, of course, a fact that interest rates are one of the least understood phenomena in economics. An interest rate is (or should be), in essence, the physical expression of the truism that a present good is valued higher than a "future good". Austrians call this the "originary interest". For a lender, an interest rate compensates an individual for giving up the ability to acquire goods now by lending a portion of his saved capital. For a borrower, an interest rate reflects the fact that he does not have the capital to procure a present good and can only get it by borrowing it from someone who does. Again in essence, an interest rate is supposed to reflect the fluctuations between the supply of and the demand for capital.

All this, of course, subsumes a MARKET economy, an economy where "capital" is not created out of thin air and an interest rate is not merely a number at the mercy of those who inhabit the Central Bank. Unfortunately, none of us has any contact with a market economy, so capital is created at whim and interest rates are manipulated to get us to borrow it.

Today, most capital is borrowed to obtain consumer goods. But when capital is borrowed for investment, to create capital goods and thereby increase wealth, additional components become more important in the interest rate picture. Austrian economists speak of the "entrepreneurial component" of the interest rate, which is the portion of the rate which reflects the judged credit-worthiness of the borrower. They also talk about the "price premium", which is the portion of the rate which takes into account the possibility of future fluctuations in the purchasing power of the currency in which the loan must be repaid.

On the capital markets where interest rates would be derived in a MARKET economy, the rate is the total of the originary interest, the entrepreneurial component, and the price premium. The longer-term the loan, the more the second and third component enters the picture as RISK increases. In modern "money markets", interest rates are either derived by decree or "massaged" by Central Bank action. Now, with real interest rates at or below ZERO, "risk" is generally regarded as an outmoded concept, something like a "market economy".

It is precisely at such times that REAL risk is at its highest! Japan, the US, and now Europe have removed ALL impediments to borrowing. The nation at highest risk from this is the US, simply because Americans are much more prone to borrowing than are either the Japanese or the continental Europeans. Japan, the US, and now Europe have made the servicing of existing loans as "cheap" as it is ever going to get. Again, the nation most at risk is the US because their combined (internal and external) debts are the highest.

When the US divorced the Dollar from Gold in 1971, all discipline confining the borrowing and spending practices of governments was withdrawn. When the Fed hauled interest rates down from almost 9% to 3.25% between 1990 and 1992, the US private sector decided that what was good enough for government was good enough for them and the US savings rate started its journey towards ZERO. Now, the legacy of three decades of profligacy has reached the point that to sustain the present debt burden, it has been deemed necessary to reduce real interest rates to ZERO.

There is no incentive to save, there is no incentive to invest, there is no incentive to correct the decades of malinvestment which the debt orgy has created. In short, there is no incentive except to eat what remains of the seed corn.

The ultimate fate of every nation in history which has (literally or figuratively) eaten its seed corn has been the destruction of its medium of exchange, its MONEY. Except for a short interlude in 1994, the last time that the US had ZERO or negative REAL interest rates was in late 1979-early 1980. That came with the near extinction of the US Dollar, and the only cure was to leave interest rates to market forces, which forced them up to 20% plus levels very quickly indeed.

In stark contrast, with the ECB rate cut of June 5, a huge sigh of relief was felt around the world. The reason for this was the conviction that NO major nation would be RAISING its interest rates for a LONG time to come. But without higher interest rates to provide an incentive for REAL savings, investment, and CAPITAL ACCUMULATION, no "recovery" from the present economic malaise affecting Japan, the US, and Europe is possible.

No, currencies have not been "cancelled". But all impediments have now been finally removed for their continued creation out of thin air. The point is nearing when the lack of any incentive to hold such currencies will start to weigh heavily.

The efficacy of Gold as a medium of exchange lies in many factors. It cannot be created out of thin air. It is impossible for governments to rule and distort markets by decree when Gold acts as the money. When governments DO attempt to do this, they ALWAYS remove Gold from its monetary role. Then, it provides an escape from the ultimate destruction of its replacement as a medium of exchange.

Economic history is replete with the detritus of "cancelled currencies". It is one thing for governments to hold interest rates at a level below where they would have been without their interference. It is quite another thing to try to deny that the future is uncertain by doing away with interest rates altogether. In such a situation, the one certainty is that the longer it is maintained, the closer the currencies so affected are to being (to use the term euphemistically) "cancelled for lack of interest"...."

GB: A nice summary of the current deteriorating global economic picture.

misetichSnow Job - Snow says Tax Cuts to Boost U.S. Economy#10430706/08/03; 08:25:55


``We are going to see the jobless (rate) improve. We're going to see people going back to work. We're going to see higher growth rates. We're going to see a more vibrant economy. And we're going to see it by the fourth quarter of this year,'' Snow said in a taped interview with Fox News Channel that aired on Saturday.
``Lowering the tax on investments is going to increase the returns in the stock market and is going to help boost the stock market,'' Snow said. ``In fact, I think we're already seeing some effects of that.''
``I think we'll get back to growth rates that are in the high 3s, maybe over 4, and when you do that you put a lot of people back to work,'' he said.

Snow said the expected faster growth should help bring more revenues into government coffers and keep budget deficits ``manageable.'' He said restraining government spending would be key to ensuring deficits remain under control.

``The biggest single problem is spending,'' he said. ``The government gets plenty of revenues. What's wrong is the government spends too much money.''

The countdown to Snow's retirement into greener pastures is accelerating -

"Them boys and girls" are attempting to inflate the stock markets to solve all economic ills - A bubble here (housing) a bubble there (bonds) a bubble everywhere (Stock Market) a bubble in government deficits, trade deficit

Snow reputadly said

What's wrong is the government spends too much money.''

Someboy ought to tell Mr. Snow - lenders to the US will not be so kind for ever!

Do we need to say more? Do investors need any other reason to not to dump US $ in lieu of baffoons like Snow, running the US Treasury?

All On Board The Gold Bull Express

misetichMore in U.S. Late on Credit Card Payments#10430806/08/03; 08:41:40


NEW YORK ( Reuters) - More Americans fell behind on their credit card payments in April than a year ago, suggesting that consumers are straining to support their spending, Moody's Investors Services said on Friday.

Consumers, although debt heavy, do not owe so much that it will force them to sharply pull back their spending, which will be troublesome for an economy struggling to gain traction.

After the "Snow post" a dosage of reality

All On Board The Gold Bull Express

BelgianOPEC#10430906/08/03; 11:44:27

OPEC's president is stating, the cartel will NOT switch dollar oilsales to euro !!!

I simply add...FOR THE TIME BEING ! Any other interpretations from anyone ?

Mr GreshamHaving a Santayana moment#10431006/08/03; 12:13:24

How do we learn?

We learn from our mistakes. Or at least we have the opportunity to. Pain is a great reinforcer.

We also have the opportunity to learn from the mistakes of others. It is a rare person or people who will do that.

But, you would think that hunger, disease, or war would be sufficient pretext to practice that rarity. Think again.

Goldendome(No Subject)#10431106/08/03; 12:30:25

mabry: Thanks for Ducks update. Had to miss game six (graduation parties). Game 7 for the marbles, Monday, (must be about 5pm Eastern?). Ducks havenot played well at NJ though.

Also, thanks to Gresham, Townie, Goldi., GFG, for the links to very interesting articles the past couple of days. Makes it easy to access good reading material. Nice Sunday to all. ---------Gdome

Cavan ManBelgian reply#10431206/08/03; 13:28:14

Another and FOA were/are full of baloney.
Cavan ManPoland Referendum#10431306/08/03; 13:32:41

Posted on Sun, Jun. 08, 2003

Poles Return to Europe With EU Vote
Associated Press

WARSAW, Poland - President Aleksander Kwasniewski told cheering supporters Sunday that Poland has fulfilled its aspirations to return to Europe, after exit polls showed an overwhelming vote in favor of joining the European Union.

"We are coming back. We are coming back to Europe," Kwasniewski said at the presidential palace after kissing his wife, Jolanta, and hugging former Solidarity activists.

Concern that voter turnout would fall below the 50 percent

BoilermakerPolish Referendum#10431406/08/03; 14:45:24

Here's another clip
"WARSAW (Reuters) - Poles voted overwhelmingly to join the European Union (news - web sites) in a weekend referendum, leaving their communist past far behind them to lead up to 10 newcomers into the rich western bloc next year.
An exit poll for public television projected the "Yes" vote at 81.7 percent, with 18.3 percent against. Turnout at 58.8 percent easily cleared a 50 percent minimum required for the vote to be binding."

Poles see the future and it is with the Euro. The Euro Bloc gets bigger as the dollar shrinks. Someday the US may ask to join. That is if the Euro keeps its golden promise.

cyberbat@ Boilermaker#10431506/08/03; 14:55:35

I wonder if this will make the Euro move up or down on the outcome of this vote.
Your thoughts or anyone else's.

VanRipMore on Dollars for Oil#10431606/08/03; 15:03:51


OPEC's president made this announcement ahead of OPEC's meeting next week. Doesn't it look as if he has already discussed this with other members? Pretty strong statement it seems to me. No if's, and's or but's.


DOHA, June 8 (Reuters) - The OPEC oil cartel will not consider switching dollar-denominated oil sales to the euro, despite the fall in the value of the U.S. currency, OPEC's President said on Sunday.
But Attiyah said there was no prospect of a change.
"We will stick with the dollar. It is very difficult to change," he said. "Assume we changed to the euro and six months later the euro fell, we would have to switch back."
Any decision by OPEC to denominate oil sales in euro, even just to European customers, would severely undermine the dollar's status as the standard currency of international trade.

BoilermakerCyberbat#10431706/08/03; 15:36:56

"I wonder if this will make the Euro move up or down on the outcome of this vote.
Your thoughts or anyone else's."

I'm seeing it as positive for the Euro based on
1) The strong positive sentiment coming from the Poles suggests that they see it is time for Europe to become more integrated and to act together, at least financially, as a world power. This requires them to subjugate some traditional nationalistic predudices in that process. This is a gradual process possibly like the initial formation of the US from individual states in the 1780's.
2) The larger the Euro mass becomes the more likely that it will create a financial gravitational field that will begin to attract more international reserve investment.

Offsetting these positives is the ever present danger of political and economic disparities among the sovereign members of the Euro that can cause erosion of the unity.

I'm sure that Belgian will weigh in on this with a much more cogent analysis.


mikalRe: OPEC#10431806/08/03; 15:44:22

Since when can they be taken at their word. Seems to me their press releases are controlled by the highest bidder with an agenda that's full of surprises.
If we must have oil, where our dependence remains excessive, at the least oil consumers should be allowed to pay in the currency of their choice!
I too have reservations about the euro, where it appears unsubstantiated as a replacement for the dollar. The Dollar Reserve status's departure does not depend upon having a SINGLE replacement, let alone the Euro, IMO.

cyberbat@ Boilermaker#10431906/08/03; 15:45:38

In light of message # 104316, do you think that the Euro will fall against the dollar tomorrow or will the positive Polish referendum erase any shorts that would otherwise be in the offing on tomorrow's currency trading.
I'm heavy gold and Euro. The PPT doesn't seem to have as much effect upon the Euro as it does gold.
Thanks, anyone.

Goldendome@Van Rip your oil for dollars post#10432006/08/03; 15:45:58

Man, are these guys nuts, or what? Just what you learn in school; store your wealth in the dollar, it't good as Gold.
I don't figure at all why all these foreigners continue to use the dollar as store of value? Certainly there is nothing rare about it; billions made daily! But here in the U.S. We continue (as consumers only) to benefit from the over-valued dollar. We continue, so far, to get real things for nothing of lasting value. Of course, the manufacturing sector is leaving, or has already left this country.---------Gdome

BoilermakerVan Rip - Dollars for Oil#10432106/08/03; 15:46:00

It looks to me that OPEC is still taking dollars but pricing the product in equivalent Euros. By saying this (we do business in dollars) they avoid the hassle of pissing off the US and causing a run against the dollar.


BoilermakerCyberbat- Euro Outlook#10432206/08/03; 16:03:58

IMHO the long term Euro outlook is good but I haven't a clue what will happen tomorrow. The ESF/PPT may decide to crush any spike in the Euro or it may stand aside. I am not a trader and do not think or worry about short term fluctuations. I wish you luck with your short term investments but I will caution you that almost no one beats the "house" in short term betting.

AristotleOPEC says...#10432306/08/03; 16:39:12

Cavan Man, you found an excellent way to drive home Belgian's point. When Belgian asked for other interpretations, if yours was the only other one, we can immediately rule your scenario out as the obvious farce it is (time and time again has shown FOA to be a baloney-free zone,) leaving us with Belgian's interpretation as the only viable alternative.

First of all, there's no denying that the OPEC president counts as a political figure. Generally, guys like this don't generally waste time denying anything that isn't at least cooking on the back burner. Think about it. When's the last time you heard a politcal figure waste time denying the ridiculous or impossible? For example, when's the last time you heard a press conference where some figure spent time assuring us that Jupiter was not going to crash into the earth? See??? They don't waste time on that kinda stuff.

On the other hand, when enough people start catching whiffs of the auroma of things that are actually half-baked or on the back burner, then *then* you may in fact see a political figure expend time and energy to play down those rumors that something else might be cooking. It's the oldest game in the book. Nixon and his boys did it right up until they closed the Gold window in August 1971.

For a political figure stand up and deny something (or in this case *affirm* something) gives us a clearest signal that the alternative is not *NOT* easily dismissible as a wild fantasy. At a minimum, it certainly demonstrates that the alternative is on his mind.

To my own feeble mind, when making his *political* affirmation that OPEC would not switch dollar-denominated sales to the euro, OPEC president Attiyah seemed mostly to be using the opportunity to point out the nature of the current dollar pricing farce and to light a fire of inspiration under the euro authorities' arses.

If that much seems clear to me, just imagine how much clearer it came across to various central bankers and political leaders who are undeniably a helluva lot sharper at this game than I am!!

Let's look at some of the comments Attiyah made in Doha at the same time as his dollar affirmation, also pointing out how the dollar's fall given the importing nations of the world a bit of a break at the expense of OPEC's revenues.

"We are facing a very difficult situation with the dollar."

"The dollar has lost 20 percent of its value against the euro. The customer is receiving a discount from us."

"We will stick with the dollar. It is very difficult to change. Assume we changed to the euro and six months later the euro fell, we would have to switch back."

HA HA! There's a good contardictary item served up as eye opener. If, while hypothetically using the euro, they felt compelled to switch back to the dollar at such time as the euro fell, then why in the heck wouldn't they similarly feel compelled to punt the dollar at this point in time???

Now check out this red flag for anyone possessing any modicum of international financial acumen:

"We have no proposal to change the band, in my opinion $25 on average is good for consumers and producers. We never seek compensation for the rate of exchange."

Right. So we are being asked to believe that OPEC will will forever accept dollars and the dollar pricing mechanism in the same way that we're being asked to believe that they will forever martyr themselves with undercompensation for the benefit of the rest of the world.
<allow me a skeptical and sarcastic "Riiiiiiiiiiight.">

Gold. Get you some. --- Aristotle

GoldendomeInflationary Depression vs. Deflationary Depression#10432406/08/03; 16:39:56

Just dug out another old book you would enjoy:
"The Coming Currency Collapse, And What You Can Do About It." by Jerome F. Smith, c.1980. Bantam printing Oct.1981.

From page 58: "In real terms, an inflationary depression is indistiguishable from a deflationary depression. In both cases production and incomes decline in real terms; in both cases liquidity problems proliferate; in both cases widespread bankruptcies occur. The distinction between a deflationary and inflationary depression is this: in a deflationary depression-- production, incomes,and living standards generally all decline both in real terms and in nominal money terms; in an inflationary depression-- production, incomes and living standards generally also decline in real terms while at the same time all of these [categories] show increases in nominal money terms.

Inflation depreciates the purchasing value of the official currency and simultaneously appreciaes the value of the officially abandoned real money (gold and silver). Over time the rate of fiat money issue tends to increase, causing a coincident but greater rate of depreciation in the market value of each unit and of nominally increasing total stock of paper currency. This, in turn, forces the officials to increase the rate of counterfeiting again and again in order to try to cover the soaring cost of underfunded but already budgeted programs. The process then feeds on itself and ultimately destroys the currency completely, the currency ceases to be money by anybody's definition, and this pushes the paper money price of gold and silver into the stratosphere."

My comments: Hmm, This--twenty-three years later is beginning to sound familiar. I know if I were the Government and had to choose between "the rock" of a deflationary depression "and the hard place" of an inflationary depression, I'd take the inflationary every time. That way the official government propaganda and business news broadcasts could countinue spouting about how the economey is getting better, as all the "nominally" reported figures on incomes, GDP, production, etc. could continue to increase, as a larger and larger portion of the population heads to the Soup kitchens, the unemployment office, and the food stamp offices.


Cavan ManWhy, thank you Aristotle....#10432506/08/03; 17:17:08

.....and I do hope you are sincere.
AristotleCertainly.#10432606/08/03; 17:25:07

Why else would I type so much to back it up with context?

Gold. Time to shine drawing nearer at hand. --- Aristotle

Clint HCavan Man msg#: 104312)#10432706/08/03; 17:27:39

<<Another and FOA were/are full of baloney.>>

Cavan Man, you can do better than this. It would be helpful to me if you stated what parts you disagree with and why.

Cavan ManHi Clint H#10432806/08/03; 18:00:27

Somebody must play the straight man for Belgian :>)
Cavan ManHi Clint H#10432906/08/03; 18:02:15

Please read betwixt the lines.

Cavan Man (06/08/03; 06:37:15MT - msg#: 104305)
Here's the piece of data I found most interesting from the Stansbury piece--Gartman's note. Who's at the center of this initiative: BIS.

This possible move away from the dollar as the primary reserve currency for the world is high-lighted by a recent comment from Dennis Gartman (The Gartman Letter):

"At what has been promoted as "The Executives' Meeting of East Asia-Pacific Central Banks" (The EMEAP), those attending took the preliminary steps toward creating an Asian bond market fund to be managed by the central bank's central banker, the Bank for International Settlements (The BIS). According to the Nihon Keizai and The Japan Daily Digest, the EMEAP is a co-operative of eleven regional central banks and it intends to create a fund with contributions from its member banks and to use the money to invest in dollar denominated government debt... initially. Then from our perspective, the fun begins. Given that the idea works in practice, the fund will proceed to increase its size and to start buying debt denominated in local currencies, moving away from the US dollar. The idea according to the Nikkei is to give the Asian central banks a place to invest the dollars their economies generate in something other than U.S. Treasuries. The intention is ultimately to keep the foreign currencies that these economies generate available in the region for investment. They are apparently weary of washing these earnings back into the US dollar, and that weariness has become all the more emphatic in light of Mr. Snow's ill-advised comments over several weeks ago. President Bush's comments over the weekend might have assuaged those concerns somewhat, but they are still looking above for other avenues of investment. Were we in their shoes, certainly we'd be doing the same. The EMEAP's member central banks include Australia, China, Hong Kong, Indonesia, Japan, South Korea, Malaysia, New Zealand, the Philippines, Singapore and Thailand. Other's may join, making the effect even more material. Snow's comments created a veritable blizzard effect."

silvercollectorCavan Man, Aristotle#10433006/08/03; 18:37:26

@ Ari

"Why else would I type so much to back it up with context?"

I'm afraid your response (104323) to Cavan Man is pure speculation, you are guessing OPEC motives and thoughts thus you are entering into the baloney zone.

@ Cavan Man

Would I be in left field in guessing that baloney is made in Europe and the Real McCoy is developing in Asia?

silvercollectorIt's the oil STUPID!#10433106/08/03; 20:28:56


"What I like is the elegance of these corporate- political schemes. Say, for example, the US government "invests" $100 billion in "liberating" Iraqi oil and gas. The profits from exploiting that oil/gas don't flow back to the US treasury because a) foreign taxes are credited against US taxes; and b) most jobs created by these foreign ventures employ foreigners, these are after all, international megacorps. Instead, the profits flow to the megacorp upper management and shareholders, not to mention the foreign dictators -- oh, yeah, and back to the US politicians in the form of "political donations" (paid in debased currency of 1 dollar per million dollars benefit received.) A deal like the Iraq coup d'etat with decades worth of potential benefits should guarantee the US politicians a steady income stream, albeit subject to continued "back-scratching" and regulatory ex-lax. Meanwhile, the government has borrowed the $100 billion to pay for the coup d'etat that enables the oil/gas megacorp to win trillions of dollars in profits. The taxpayers end up paying twice or thrice that in interest on the bonds...held by you know who...and benefit from having gasoline for their SUV's. Essentially, the US government is turned into a whore, a puta, for the US oil/gas industry. A cheap whore (and not one of those whores with a heart of gold, like Melanie Griffith in "Milk Money", but a skanky Tijuana whore who'll give you crabs and then steal your wallet.)"

GoldendomeSilver at 600 year low!#10433206/08/03; 20:29:39

I think there's quite a little currency inflation adjustment going on here, but golly gee, no wonder we silver collectors feel so old and tired!

Full article by Doke linked above; link to the 600 year chart is contained early within the article.

misetichUS faces critical gas shortage#10433306/08/03; 20:36:07


Natural gas supplies in the US have reached critically low levels in recent months and may be inadequate to meet demand during a hot summer this year.

Spencer Abraham, the US energy secretary, has called an emergency meeting of the National Petroleum Council this month amid calls for the administration to deal urgently with the shortage.

No real news for loyal USA Gold Forum readers - thanks to Blackblade Forum readers have been forwarned for months now on how critical the US gas energy situation is

All On Board The Gold Bull Express

misetichDeflation holds unknown perils for the Fed#10433406/08/03; 20:48:08


Government bonds are also bound to lose their benchmark status, further complicating the Fed's task. In the 1940s both AAA and BAA corporate spreads narrowed sharply relative to treasuries, but these were war years, with undeveloped capital markets. This leads to many issues on appropriately calibrating policy, including: how can the Fed know what treasury yields are appropriate to engender correct private sector yields? How does the Fed encourage appropriate real yields when steady nominal yields are targeted? What is the impact on money supply and other key measures of liquidity? Amid all these questions, the signal effect of long-term rates for policymakers and the markets is bound to be lost.
Paradoxically, the more successful the Fed is in pushing interest rates down in the short term, the more destabilising will be the effects when it finally ends its strategy of intervention. For a central banker with as much respect for market forces as Mr Greenspan, the mere thought of tampering with the treasury market in this way must be a sacrilegious act. It is either testimony to how far the challenges facing the US economy have changed, or it is confirmation of a post-bubble monetary policy careering out of control.

Sir Greenspan and Co have few salvos left - to rescue their own mismanagement of the last 6 to 7 years.

No doubt Sir Greenspan will endeveur in some irrational exhuberance to rectify the present situation

All On Board The Gold Bull Express

21mabryOIL for OIL#10433506/08/03; 21:34:34

BlackBlade, I was doing some reading it use to cost one barrel of oil to find 50 barrels, now we use 1 barrel to find 5 barrels over the next several decades unless new tech is discovered it will cost 1 barrel to find 1 barrel.We are oviously on the downsloap of the bell curve of world petrol supplies.Fiat will not buy this precious commodity for to many more years I can almost see a time ahead when gold and silver mines become goverment property to pay for the countries oil needs.
Max RabbitzOPEC Statement#10433606/08/03; 21:39:47

OPEC support for the dollar comes days after EU central bank lowered interest rates. Now all three major world currencies offer zero to negative interest after inflation. If all currencies are just going to inflate, or try to, what is the difference? Perhaps the one with a military might be best. For savings there is gold.
mikalOPEC#10433706/08/03; 21:55:49

After Belgium's post I was convinced they'd be using Euros Then Cavan Man comes along and I'm not so sure. Then Aristotle has me convinced it's the Euro, but Cavan Man returns to team up with Silvercollector to give the Asian case which is very persuasive, especially if the Yuan is revalued i.e.(allowed to float, severed from it's current peg to the greenhiney) in a few months like many believe. Now Max Rabbitz has me all in a twirl, because if what he says is true, either the Malaysian or Arab Dinar wins hands down!
Max RabbitzNatural Gas Shortage#10433806/08/03; 22:06:34

After following the natural gas markets for the last 3 years it seems that major producers have some capacity to increase production during periods of high prices. The last few weeks had high storage injections and except for Texas it looks to be a moderate to cool summer. There has also been a big increase in the number of drill rigs in Canada the last few weeks and new interest in off-shore Nova Scotia again. This is Perfect Storm country with high development costs. People are getting serious about gas. So I'd guess we make it through another winter heating season but with high prices and no room for a growing economy. Get some wood stockpiled just in case we get some hurricanes in the gulf.

P.S. I tend to agree with Aristotle about the OPEC Statement. Why did they even bother to make a statement.

LeSin"Who's on First Base?" - " What's on Second!" etc etc#10433906/08/03; 22:07:35



Whenever it appears that we have once again gone full circle and again arrived at this present currency confusion and our minds are filled with Greenspan style double speak about the soundness of this false economy; the same solution comes to the fore.

When in doubt - Buy physical GOLD - with both Hands!!!

Cheers "S"

Black BladeSwitch to euro, says PM#1043406/9/03; 01:17:41

KUALA LUMPUR, June 7: Prime Minister Datuk Seri Dr Mahathir Mohamad today urged the private sector to use the euro in its export trade since the US dollar was likely to depreciate further. Speaking at the investiture ceremony in conjunction with Yang diPertuan Agong Tuanku Syed Sirajuddin Syed Putra Jamalullail's 60th birthday celebration here, he said the depreciating US dollar compared to the euro had influenced the export market and the value of the exported goods had declined. Reiterating that there was no intention to review the ringgit's peg against the greenback, he said the Government felt there was a need for the private sector, especially those involved in exporting manufactured goods, to use the euro for payments since the US dollar was likely to depreciate further. On May 8, Dr Mahathir had called on Petronas to explore the possibility of using the euro in its oil and gas trade, adding that it was worth considering as the greenback had depreciated by 25 per cent against the euro.

Black Blade: More and more nations appear ready to abandon the US dollar as the primary reserve currency. Malaysia is just one. It is the smart thing to do after all.

Black Blade"The Barbarous relic Files" - U.S. troops intercept 3rd 'gold truck' fleeing Iraq#1043416/9/03; 01:47:58,0,6767619.story?coll=orl-news-headlines


KIRKUK, Iraq -- Another battered truck hauling what appears to be a dazzling fortune in gold bars was stopped at a routine U.S. Army checkpoint in Iraq on Wednesday, the third such cache of bullion seized in two weeks. An officer with the 173rd Airborne Brigade, the unit that detained the truck near the northern Iraqi city of Kirkuk, said that 1,183 ingots were recovered in the latest bust. The seizure fits a pattern established by two similar gold-laden vehicles stopped by U.S. troops in late May. All the trucks appeared to have originated in Baghdad and seemed to be heading for either the Syrian or Iranian border. "Same modus operandi," the American officer said, on condition of anonymity. "Mercedes truck. Bad registration. Trying to pass it [the gold] off as brass." More than 4,100 gold bars have been confiscated so far from the rusty beds of old trucks trundling down the bomb-cratered roads of Iraq. The combined value of the gold has been calculated at between $718 million and $1 billion -- the worst act of plunder in Iraq since Saddam Hussein's younger son, Qusai, swiped $1 billion in cash from the Central Bank.

Black Blade: Suppose they grabbed em’ outta the "dust bins of history"? ;-)

For all we know it is brass or the same truck over and over again. ;-)

BelgianThe oil Message ....#1043426/9/03; 02:33:32

....Was as LOUD and CLEAR as possible for those who are "Anotherized" up to their bones !!!


Dear forumers, please, let us leave (contain) our respective, personal, nationalistc, etc... *emotions* OUT of these rapid evolving realities. Is blurring our vision.

Ari's interpretation is imo absolutely correct ! The dollar is happy for the (temporary) confirmation and got the message (threath) loud and clear. The euro knows what it has to do to comply for the final materialization of the silent agreements, already made. The euro, the future oil-currency. GOLD priced in euro !

Reread (and print) Jim Willie CB : Vicious circles & the US dollar.

Cavan Man was shocked ! I do understand his reaction. Sir, you suddenly strongly doubted on one of FOA's pillars in his theories. But OPEC just confirmed that FOA's theory is correct AND on track !!! It is exactly the deployment of enormous global military might that is undermining the warrior's currency (Yep Max)!!! Take five and let this sink through at its fullest ! Then...don't rush for the euro but for more GOLD in YOUR fists ! Smile and have a relaxing Belgian beer.

A similar "Denial" of Gold's deep currents is to be found, in Lisboa, where the LBMA and buddies, are keeping up the appearences of Gold's worthlessness. Now they even make a complete mess out of their totally unreliable statistics.

Today, we see-hear, so much outspoken public lies/lying by
a whole range of global politicians, as happened never before ! Don't bother making an account of those blatant lies...simply ask yourselve, WHY is this happening on such a scale and from wich corner(s) are the bulk of these lies coming ! Forced myself to listen to Condoleeza, last night ! This woman was simply panicking ! Sorry folks, but I've only ONE all-embracing answer, today : IT IS THE US$ !!! And, please, do not feel offended by this outcry from an Eurolander. This is NOT my purpose !

Go to the Gary North - Sam Parks, interview (The Gold Wars) and contemplate further on what they are trying to say ! Some nice, finetuned, analysis and evidence on the real reasons for Gold's behavior.

FOA, connected the euro-dot with the Gold-dot over the dollar-dot. OPEC's recent (pré-union) statement is the floating-dot. The pruning of the "new" euro-bonzai ! That old dollar, masterpiece, is producing more and more dead wood. Try to see how the euro evolves "cautiously" and very systematically ! Step by step ! Almost like an anaconda going for the "Golden" prey.

It never was the dollar who "directly" obstructed (abortion attempts) the birth of the euro-project. It was done by the intermediare of the UK (See The Bruges Group - M.Tatcher and J.Major<Carlyle> ) And moles à la B.Connolly.
This is almost history by now. Just ask yourself, again, WHY the euro-project had to be destroyed ??? IT IS BECAUSE OF THE DOLLAR !

The euro-project is still running under a very low profile. Not without reasons of course. There must remain some perception of dollar-support up until the great GOLD finale. Place the recent OPEC statement against this background. OPEC admitted openly (publicly) that oil for euro is on the rails. Maybe we will soon find out for "what" the dollar has been bargaining some more lifetime in its status as reserve-currency. Note again how silent Saudi Arabia remains and how it is subversively attacked in the media. A lot has to be *demonized* these days...a lot...EXCEPT THE DOLLAR AND ITS DEBTBERG !!!
Simply because it has become totally impossible to speak and act "honestly" about the dollar's irreversable detoriation.

It is against this personal interpretation of the events that I conclude that the Gold-industry (top) feels from where the wind is coming. FREE GOLD would mean the end of their present status. Think, they don't like see this eventuality.

Aristotlesilvercollector -- putting "context" in *context* for you#1043436/9/03; 02:36:17

If necessary, why don't you ask Cavan Man to instruct you in the meaning of the word "context" when it comes to the presentation of material aimed at establishing the level of *sincerity* behind a presentation. Did you miss that the issue being addressed was that of *sincerity*???? Try eating a high fiber cereal and spare us any more of your hasty wanting for what ain't being presented.

Gold. Get you some. --- Aristotle

Belgian*Another* Yellow Gold truck driving above the deep sand Black Gold.... #1043446/9/03; 03:20:04

What an amusing series of stories. The Gold-Show, definitely, *must* go on ! And by preference with naive and easy to understand pictures, that must lead to the targetted
Gold-perceptions towards/for, the general (goldbug) public.

1 billion $ worth of Gold is about 100 tonnes !

THE USUK HAVE FOUND THE WEAPONS OD DOLLAR MASS DESTRUCTION....The second biggest oilreserves and 100 tonnes of Gold (so far) to keep on supporting the dollar !!!
These are the REAL dots to be connected ! End of story ???

BelgianUK 's entry into EMU....#1043456/9/03; 04:01:25

If the arguments, for no entry, are to be interpreted as an intention of war against the euro...w're possibly gone see some fireworks.

Invest in Poland (40 million people) and leave the UK !?

Note that OPEC now gathers monthly instead of previously half yearly ! Why ? Oil production/flow is regulated against the dollar's exchange rate and purchasing power and much less against the offer/demand balance !

It is no coincidence that OPEC was coming in line with the UK's refusal to join EMU and consequently expression of further support for the dollar !
A euro with the UK would make a too big jump forward and knock the dollar too hard !

There will be no UK referendum on EMU entry ! After the recent events, the Britisch public wants to stick to the "old" (Hoi Donald) dollar-system and...Harry Potter !

Will see if Tony gets re-elected and the next politicians in power simply shift to the euro without a referendum.

In the mean time, the euro-dollar exchange rate will remain our pressure-meter whilst the "city" risks losing business against growing Frankfurt.

AristotleFor Belgian about the constant LBMA push to "expand the range of products"#1043466/9/03; 04:48:54

Those LBMA boys sure are running scared, ain't they?! Internally and as financial mouthpieces they've had the cheek to effectively mock China's SGE. Rather than joining the rest of us to applaud the achievement thus far in reaching one tonne of Physical clearing daily on the infant Exchange, the LBMA prefers to make light of the Exchange's early and admirable goal of "trading Gold *as a commodity*, satisfying the need of business supply and demand and ensuring safe and steady operation of spot trade."

After just six months Shanghai is already doing business on par with Istanbul, those paperGold-pushing egg-heads in the LBMA are almost taunting China derisively as a small-timer, challenging China to boost numbers by 100 to 1000 times (two to three orders of magnitude) in order to "compete on a global scale" with the likes of TOCOM, COMEX, and the LBMA.

Compete. *COMPETE*!! Can you believe it?? China is moving product and the LBMA tries to taunt them with, "Not good enough, little boy!" and then with their second breath they whisper, "Psssst... if you wanna be *respectable* like us, you gotta strive for a huge market in fool's Gold (derivatives) too!" Basically implying that the Shanghai market is pedestrian and unsophisticated for as long as it limits its market to Physical trade only.

All this as if to secretly admit "God forbid that the Chinese people get a prolonged exposure to this sorta thing and develop a lasting preference for Real Metal!" A reasonable fear because it was reported that demand grew so strong in late January that the Bank of China intervened to sell additional Gold so that the prices quoted through the Shanghai Exchange didn't move too far ahead of the big boy's (TOCOM, COMEX, LBMA) sophisticated prices. Ain't that a peach?!!! Those LBMA boys had to be pulling at their ties over that dose of reality. The collective sigh of relief from London in early February was almost audible as China showed this willingness to "play ball."

So here we have the LBMA banker boys watching their bread and butter business (clearing the volume of paper) dwindle as the miners step back from their hedging addiction, and meanwhile licking their chops at the trillion dollars of Chinese savings that could be driven toward a derivative market.

Their first step is to push the Exchange toward deferred delivery service. Those clever, tricksy lil' villains. I would like to think that China isn't so easily dazzled by those fast-talking suits pushing that paper London-style. Let's hope China opts to keep it real and nip this thing in the bud.

It's almost shameful to see the LBMA also trying to pull the same song and dance in India to inspire a "wider range of Gold products" there, too. Sheeeeeeesh! How hard is it to understand that if it ain't Metal, it ain't good as Gold? They would have us all think that volume, especially achieved through paper, is the holy grail in running a meaningful and successful market. What a load of hot air.

Those boys sure wanna keep their "sophisticated" jobs, don't they! I can't say that I blame them, but I also wonder why they don't just load up for themselves and then sit back and "fuggeddabouddit." I guess they like their office hours more than golfing. The only thing I can say for sure is this. The higher they build this house of paperGold cards, the more devastating will be the global effect when the airy volume all collapses to a concentration into the metallic base.

Gold. Get you some. --- Ari

Cavan Manmikal#1043476/9/03; 05:47:34

My two references to the Gartman note in the Porter Stansbury editorial/text were to underscore the involvement of the BIS working in concert with Central Banks to seek cover from a falling USD. This fact is consonant with FOA's long running commentary on BIS/EU vs. IMF/EU.


misetichUS banks' holdings of derivatives climb#1043486/9/03; 05:50:06


US commercial banks' derivatives holdings climbed by 9 per cent to a record $61,400bn in the first quarter as banks hedged against changes in interest rates.

However, banks' credit exposure to derivatives has been rising, indicating that their credit risk is growing at a time when a weak economy makes many companies vulnerable to a decline in creditworthiness.

Banks' total credit exposure from derivative contracts was up $68bn in the first quarter to $662bn. JP Morgan has the largest credit exposure, with some $339bn, followed by Bank of America with $114bn and Citibank with $109bn.

Some 96 per cent of derivatives contracts are held by just seven banks

Buffett (seconded by Pimco's Gross) has defined derivatives as Weapons of Mass Destruction - Sir Greenspan on the otherhand has praised the use of derivatives except the concentration on a major bank

Time will tell who's right

All On Board The Gold Bull Express

Dollar Bill*>*...........#1043496/9/03; 06:05:30

Aristotle and all,
This comment by OPEC..........
"We never seek compensation for the rate of exchange."
Am I wrong to guess that it hints at the opposite?
I wonder what country the US DOES compensate. Knowing the US is just printing money, some other countries would want
a secret interest rate on thier investments. Would doing such things allow the US to get around complaining countries objections?
Or at least those countries that really mattered to the US.
As long as all those that counted really were getting a part of the money rain pie, wouldnt they keep in line?
Would this be hard for the US?

I am guessing that the BIS involvment in the asian thing
provides the asians with the appearance of a local thing to show the masses, but underneath in the plumbing, it will be
used to support the IMF/BIS world. I know it is fun to view the BIS as a tool of the EU, but I wonder....

Dollar Bill^>^#1043506/9/03; 06:24:10

Some notes from Nolan;
..I found it rather interesting that Pimco's Paul McCulley ended his June article with "Good Lord willing, things'll work out."
..The Fed has succeeded in inciting a major destabilizing short-squeeze throughout the stock market, and I will assume something similar has unfolded in corporate bonds and Credit default swaps.

..Fannie Mae's Mortgage Market Analysis Department estimates that "with primary market fixed-rate mortgage yields around 5.30 percent, about 90 percent of all fixed-rate mortgages outstanding are ‘in the money’ to refinance. We project a rise in refinance originations of 61 percent to an astounding $2.59 trillion. This by itself is almost as large as last year's total origination figure. While we have not yet completed an estimate of the cash-out share of refi originations for 2003, the dollar volume of equity removed during these refinancings will be very large. The combination of record purchase originations and still strong cash-out refinancings should keep single-family mortgage debt outstanding (MDO) growth robust."

misetichGlobal: Macro Seduction - S. Roach#1043516/9/03; 06:54:24


Yet in the end, the policy bet may well be the weakest link in this daisy chain. History tells us that macro policy has had a truly terrible track record in dealing with deflation. That's been the case since the 19th century but has been especially evident in so-called modern times. The worldwide deflation of the 1930s, to say nothing of the more recent Japanese experience, are grim reminders of stunning policy failures in dealing with this most corrosive of all macro diseases. Yet this time, we're all being asked to believe it's different -- that policy makers have learned the lessons of history and will never allow deflation to occur again. None other than Fed Governor Ben Bernanke -- the intellectual force behind America's anti-deflation battle -- has said this in no uncertain terms. Recently, at Milton Friedman's 90th birthday celebration, he honored the world's most well-known monetarist by thanking him for showing us all the way. The "way" is Bernanke's belief in the power of the printing press as the central bank's antidote to deflation. It is at the core of the Fed's purported last line of defense against deflation. It's also as pure a monetarist prescription as you could ask for. Fed Chairman Alan Greenspan has echoed this confidence, boasting repeatedly of the Fed's possession of the unlimited ammunition of monetary creation as the means by which the anti-deflationary battle ultimately will be won. It's the ultimate compliment of a Friedmanesque view the world -- that fluctuations in the aggregate price level are first, and foremost, a monetary phenomenon.

There are few things that shock me these days -- with age comes an unfortunate cynicism. But I was truly shocked to read over this weekend that none other than the same Milton Freidman has just recanted the central premise of monetarism. In an astonishing interview published in the Financial Times, the now 91-year-old retired professor concedes that "The use of quantity of money as a target has not been a success. I'm not sure I would push it as hard as I once did" (see "The Long View," an interview with Simon London contained in the Weekend Section of the Financial Times, June 7-8, 2003). This is an extraordinary mea culpa for a man who single-handedly turned the macro policy debate inside out over the past 30 years. The founding father of modern-day monetarism is now telling us that the quantity of money doesn't matter after all. Ironically, the admission comes at just that same point in time when the Fed is telling us that it's all that matters.
But now the Fed is doing another about-face -- asking us to believe in monetarism as the ultimate cure for deflation. To rely on such a discredited framework, at precisely the time when its own intellectual founder has disavowed its central premise, smacks of the ultimate in macro hypocrisy. Unfortunately, the same can be said of the supply-side mantra that has once again infected the fiscal policy debate. Remember the infamous Laffer Curve that promised those trickle-down tax cuts would be self-financing? Think twice about that famous squiggle on a napkin when you look back at America in the 1980s as a nation of widening income disparities and massive budget deficits that averaged 5.1% of GDP over the four-year interval, 1983-86. Remember Rosy Scenario, that voluptuous temptress of the Reagan era who headed up the White House forecasting group that promised economic perfection for as far as the eye could see? Well the supply-siders are back with the same set of promises today. Never mind budget deficits or current-account gaps, they tell us. American can finance anything. Monetarism and supply-side economics made for strange bedfellows in the 1980s. It was such an alluring combination -- ever so seductive. Fast-forward 20 years and little has changed -- the infatuation endures.

All this fits too neatly with the understandable denial of the deflationary endgame -- it is simply too threatening for the economy and too scary for financial markets. Now that policy makers have ridden to the rescue, investors are eager to breathe a collective sigh of relief and even quicker to put aside the perils. And why not? The markets are up, and many an economic forecaster is joining the celebration. But a new note of caution is now in order: The same intellectual deception that was in vogue in the 1980s has returned with a vengeance. This is not the time to embrace the seductive promises of failed theories. Policy traction in a post-bubble and increasingly deflationary climate is not about the quick fix. That's the lesson from history that keeps me awake at night. And yet that's the very possibility that ever-bullish markets are now ignoring.

Roach maintains investors are betting on a team " Central Bankers" that have lost every battle against deflation -

This time its different they say - but come to think of it so was the new paradigm, the new economy, the productivity miracle....

All On Board The Gold Bull Express

Cavan ManCorporate malfeasance in GSE land#1043526/9/03; 07:31:07

Freddie Mac Replaces Top 3 Officers on Investigation (Update4)
June 9 (Bloomberg) -- Freddie Mac, the second-biggest buyer of U.S. mortgages, replaced its top three executives as federal regulators said they were investigating employee misconduct. The government-chartered enterprise's shares tumbled.

Freddie Mac, which is in the process of restating its earnings for the past three years, said it fired President and Chief Operating Officer David Glenn, and replaced Chairman and Chief Executive Leland Brendsel and Chief Financial Officer Vaughn Clarke, and Freddie Mac shares fell $5.87, or 9.8 percent, to $57.00 in trading before exchanges opened.

USAGOLD / Centennial Precious Metals, Inc.BULLION is Our Latest Buyers’ Group Special . . .#1043536/9/03; 07:31:08">Gold Buyers Group Special
KnallgoldOPEC oil#1043546/9/03; 07:34:07

I'm going with Aristotle on this one.Its not just a small OPEC country who denied going euro,its the whole OPEC.
And this is "don't believe in anything until its officially denied" IMHO.

The whole story euro for oil/FreeGold must remain a secret.The writings here merely gives us "red-pill-takers" a glimpse on the future, will therefore remain theories for outsiders (I tried to tell it to friends,but what do I have as facts to back it up except whats already official anyway?)

a nation of onetruth will out#1043556/9/03; 07:53:10

From the Morgan Stanley article by Stephen Roach:

"Convictions are rising that this rally is for real. Most believe that an imminent economic rebound is about to validate the increasingly optimistic earnings expectations now imbedded in share prices."

This is a reference to fundamentals. It reveals there is a conscious awareness that fundamentals are still the reason to own stocks. It also implies a hope, on the part of the writer, that this truth will be overlooked by most investors, and it discloses an intention they should not be smartened up. Underlying the obscuring term "...optimistic earnings expectations now imbedded in share prices," is the assumed understanding of, "...present share prices are not realistic relative to informed earnings expectations." Use of the word 'imbedded' is a covert way of referring to the fact that the excessive prices of those shares have been accepted as normal by so many for so long, that they now seem correct, at least to some, though not to Mr. Roach, and certainly not to those to whom he speaks.

TownCrierFed funds trade at FOMC 1.25% target, Federal Reserve intervenes anyway#1043566/9/03; 08:06:34

The Trading Desk on behalf of the System today entered the open market through an operation using three-day repos to add $5.75 billion to the supply of money in the nation's banking reserves. It was done easier than typing or reading this sentence. And you're wondering if you should be worried about deflation?


BelgianCM/Ari/Knall#10435706/09/03; 08:59:35

CM: We have quite some idea as "HOW" this Gold-Finale will look like ! But, understanding "WHAT" is happening,... what is in progress, is the same as saying : I DON'T KNOW *WHEN* this finale will start ! That's the main reason we are gathering here at CPM, to watch this whole thing evolving towards the inevitable finale = A FREE PHYSICAL EURO GOLD MARKET ! Remember these insights-communication, started when Gold was bottoming sub 300$ !!! A lot of theoretisizing has been done here for the only reason that enormous changes for Gold are to be expected. The short term speculators lost their patience and we don't know how they were faring elsewhere in the financial arena...or do we have a fair guestimate on how much "fiat" they have been making during their absence ?

KnallGold states he has difficulties to convince his friends due to lack of facts ! The most important facts, available, are NOT understood, and therefore NOT interesting to Gold ignorants ! Exactly, the perfect environment that Gold desires and NEEDS!

Ari, rightfully notes that the LBMA gnomes, even want India to paperize Gold !!! Such circumstantial facts are totally meaningless for those who aren't participating on our mutual Gold-education ! The connection between Tony the poodle-pony and the LondonBMA isn't made and when explained with boths hands and feet, isn't understood in its deepiest significance. Much too much effort and no visible, instant gain on the listeners golden paper-gambles. The result is harmless frustration at best, directed at those who find it pleasant to communicate their thoughts . Thoughts about the highest probability of making a personal fortune with an absolute minimum on risks. My strictly personal view and NOT an investment advise of any sort !!! This while many of my speculating buddies/confrators, left the Gold Trail already ! They haven't been making a fortune either during our 3 years of Gold-Talks ! They "lost" some of their unprecious confetti !
Many joined the endless blabla about the "deflation-Monster" ! How does one explain that helikopter-confetti isn't producing the desired effects !? Helikopter-thing...what is this in fact..? Even 91 yrs old Friedman seems to be confused !

The orchestrators aren't confused at all, dear forumers...they know it very ...VERY well...about the dollar ! If you are going to wait for having the evidence that the dollar is will be too late ! The purpose of our gatherings here, is to anticipate the coming CLEAR evidence, for all to see and understand !
It are the orchestrators who tell those media-people, "WHAT" show they have to play. W've landed in a period where the "WHY" question is of primordial importance before the do-thing ! Once you answered "WHY" Gold is behaving as it can start accumulating it.

During the past 20 years of SM-mania, those who went through the Why-Question got stuck and didn't make a piece of cake (fortune). Those fortune makers, who continue to think linear, will lose their fortune and miss the next Golden one.

Today's POG is the 1971 POG of 31$ x 10 = 310$. This multiple of 10 factor is exactly the artificial (official) infladada factor. It is confirmation for the confetti managers that they succeeded in replacing the good old goldstandard with the "perfect" dollar-standard ! Hey guys WE DON'T NEED GOLD ANYMORE !!! We, the central bankers of the world are as genial as Lenin and Trostky, Stalin, who managed to keep communism around for the same 70 years-plus !

Do you understand now why we so desperately needed that deflation monster !? IRs at 50 years low...and confetti printing à volonté ! Soon those Iraqi gold trucks come over and distribute gratis Gold !
The benign deflation monster as his master's Greenspan's voice. Sorry, *Sir* Span ! And NOT Sir Duisenberg but dim Wim with his ridicule euro-thing ! How does one elaborate on such a kind of evidence when talking about Gold ?

Last night there was a documentary on the Iraqi colonisation event (there was no war-!). I apologize for it, being a French documentary. It was about those special units who were in charge of distributing bags of newly printed dollar-confetti for each and every Iraqi who had to be compensated for whatever service/favor he/she was providing ! Eye opening, to say at least. But Condoleeza said that we must wait "patiently" for the WMD-evidence. Probably because of a dollar-printing machine, tempory, out of order. No, dearest goldmeisters, this was simply a bad joke of mine.

Melting PotCrude oil building left shoulder of H & S formation???#10435806/09/03; 09:49:42

It appears the left shoulder of a "GIANT" head and shoulders formation in crude oil began forming in 1999.

Is the US economy in recession? I believe so as the chart below when compared to past recessions (1991) indicates real GDP growth occurs when the POO is below $22 bbl. When POO rises above $22 the economy slows and recession occurs.
Business & Industry must adjust to the rising POO to retain profits by either:

A. Lower energy costs

B. Lower labor expense

C. Raise prices

D. Combination of the above

Energy costs are not going lower, and prices cannot be elevated in a saturated market that lacks demand, therefore labor will be burdened with layoffs and a lower standard of living relative to "real" inflation.

If my thoughts are correct that a giant H & S in crude is now forming, $80 - $100 bbl. will fuel an "inflationary depression" that may destroy the currency. This must be the central issue at hand in the dollar v. euro war. NIA


Magister AureliusLatest Sinclair warning#10435906/09/03; 10:10:43

Read Sinclair's morning update... interesting bit about the velocity of money with a warning that if the Fed doesn't fire up the printing presses even accumulating gold isn't going to save us from the Great Depression 2 coming down the pike thanks the mountain of deriviative sewage.
mikalU.S. Bonds, Interest Rates and Debt#10436006/09/03; 10:51:12

Yes, But
The Money Printers
James Grant, 06.09.03, 12:00 AM ET -Excerpts
"Fearing Japan-style deflation Greenspan's Fed is buying Treasurys with dollars it mints for that purpose. Bondholders and other creditors should beware.
Sufferers in the great inflation of the 1970s may have doubted they would ever live to see the day, but the day is here. On May 6 the policy-making arm of the Federal Reserve declared that the rate of inflation is worrisomely, almost unacceptably, low. The Fed indicated it wouldn't stand for it.
You may now be rubbing your eyes. The Fed is purportedly in the business of making prices "stable." But now that prices are virtually stable, the Fed is worried they might sag.....

However, There's nothing unprecedented about interest rates beginning with the numbers 1, 2 or 3. They were the rule rather than the exception in the days of the gold standard. But, as far as I know, no rates such as those quoted today ever appeared in a monetary system unballasted by gold or silver.
What ballasts the millennial U.S. monetary system is debt, and its weight is palpable. In the 1960s and 1970s total nonfinancial debt (corporate, government and individual) was around 140% of GDP. In the junk-bond revolution of the 1980s, the portion leapt to 180% and never looked back. Today it stands at 195%.
The Fed lives in mortal fear of a system so debt-clogged that not even a 1% bond yield could coax overextended debtors to consume or invest. The purpose of the Fed's May 6 pronouncement is to roll out the welcome mat for growth--and, by way of a higher inflation rate, to lighten the burden of debt.
But the dollar is the world's currency, and the non-U.S. portion of the world has a vote on dollar interest rates....."

SpartacusJapan Weighs Radical Deflation Therapy #10436106/09/03; 10:55:21

TOKYO - Japan is considering taxing all cash and savings in an effort to force its people to spend their money or lose it, according to Shukan Gendai, a leading Japanese newsweekly.

The plan, as outlined in the magazine, calls for an annual tax of 3% to 5% on all savings and time deposits in the country. The aim of the move is to force Japanese savers to either buy consumer goods or put their money in stock, bonds or real estate to avoid what in effect would become a steep negative interest rate on their savings. -

Cavan Manmikal#10436206/09/03; 11:02:34

Can you check the link please?
Cavan ManThe Inimitable Mogambo Guru#10436306/09/03; 11:16:00

Raise your hand if you are buying the S&P 500 at the
current P/E of 35. Raise your hand if you are loaning your
money at yields that are the lowest in more than forty
years, and on the idea that yields will keep going lower
and lower. Raise your hand if you are buying houses at
these outrageously high prices on the idea that you can
sell it in the future and make a handsome profit.

Now look at your hand. If it is holding a candy bar, you
are fat. If you are holding somebody else's hand, you are
in love. But if it is up in the air, you are a speculator,
and thus you are the guy that White, who was a professor,
who founded a University, who is a real smart guy, thinks
is the worst person in the world.

a nation of onemere words#10436406/09/03; 11:42:46

The economy is like an elephant. Economist are like blind men. Each one feels around and tells what he
finds. "Capital is derived only from labor," says one. "Capital is created by borrowing," cries another.
"Deflation is good because things are cheaper," says the third. And the fourth shouts, "No, deflation is bad,
because profits are harder to come by." The elephant, meanwhile, is a large animal, gray in places, black in
places, and white in places. Hairy here, smooth there. Thin in the ear, thick in the middle. Hard in the tusk,
soft in the belly.

Someone with eyes of course can see the whole beast, and believe me, while it may be beautiful, it isn't

I have had a lot of trouble understanding some of the words that economists use. To me they seem
characteristically vague and ambiguous, almost as if intended to be obscure, and I believe they are intended
to be so. Therefore I look them up. Sometimes it is surprising to learn what a word really means. The
impression one has is often incorrect, or incomplete. Here are some I have found very helpful to know the
real meanings of. These are perhaps not defined strictly in terms favored by highly disciplined professional
economists, but, rather, are the meanings the words most commonly have when used by people generally. I
am using Webster's Encyclopedic Unabridged, 1996, fourth edition.

Inflation: a persistent, substantial rise in the general level of prices related to an increase in the volume of
money and resulting in the loss of value of currency.

Deflation: a fall in the general price level or a contraction of credit and available money.

Disinflation: a period or process of slowing the rate of inflation.

Reflation: restoration of economic activity, consumer prices, etc., to higher levels by manipulating monetary

These words, and others which professional economists use, are esoteric in nature, or even arcane, and this is
no coincidence. Many professions use words and terms in uncommon ways in discussing the areas of their
knowledge, for one reason because it makes the source of their income less susceptible to invasion by
non-professionals. With economics, however, there is also a governmental factor involved, the fact of which
many persons in positions to govern have used to justify the concludsion that it is in the people's best interest
to be kept a little ignorant, or even quite ignorant, and, in some cases, even, totally ignorant, since that
makes it easier for those in governments to do things. The earliest writings I have found regarding this
phenomenon originated in Ancient China. But most other governments I have studied also cultivate this
same quality. And let us not forget that the primary purpose and effect of the Federal Reserve System is,
above all, one of governance.

21mabryFRED MAC#10436506/09/03; 12:05:08

Freddiemac fired some high ranking corporate officers today stock is down about 10 bucks a share, Accounting problems their saying another Enron who knows.21
TownCrierForbes takes a look at gold, inflation, deflation. Author Susan Kitchens spoke with MK, too.#10436606/09/03; 12:25:09

In this three page article by Forbes look to the second page where our very own MK is quoted.

Despite what appears in typical financial media fashion as anti-gold spin, the article makes some good points if you read between the lines. Like an elephant in the room with you, you simply can't deny that gold is in fact rising, even if the author says that we should not expect a beast of this great size to have got in the room somehow. Whooop, there it is.

HEADLINE: Investment Guide -- What Goes Up
by Susan Kitchens, 06.09.03

Since early April gold prices have been rising, most notably in dollars but in other currencies as well. This might make sense in terms of the greenback's recent swan dive, but it is surprising in light of gold's traditional place as a hedge against inflation. With growing worries about deflation--the polar opposite of inflation--you would think the price of gold would be falling, all things being equal.

They aren't. Gold spiked up to nearly $390 an ounce in the run-up to the American invasion of Iraq, which fits well with classical theory: Global catastrophes can be inflationary. When it became clear that the fighting would be short and limited to the cradle of civilization formerly known as Saddam's, gold receded to the $320 level.

So now, with signs of recession in Europe, a decade of despair in Japan and as dire a deflation warning as you are likely to get from Alan Greenspan & Co., gold should be skulking back down toward $300. In the last two months, however, it has trundled up near $370. What gives?

...The logical factors behind its rise so far--like fear of terrorism--do not seem to account for all of the recent advance. Nor can gold's rise be attributed solely to a weakening dollar. Gold is advancing against most major currencies, up 4% in euro terms and 12% against the yen since April.

...Some investors told Bridges they're not really bothered which 'flation prevails "because they're confident that gold, in either inflation or deflation, will be an asset that performs better than other assets."

Why the confidence? Paradoxically, "‘Uncertainty' is the word," says Michael J. Kosares, author of The ABCs of Gold Investing: Protecting Your Wealth Through Private Gold Ownership, who runs, a gold brokerage in Denver.

"When you look at the menu of selections, it doesn't look that good to the investor. There are savings instruments with a very low rate of return, and the stock market is still overvalued in many people's eyes. The dollar looks like it might continue to go down. And with all that uncertainty out there, people are saying, ‘I better diversify into gold,' and that's exactly what they're doing."

...Since 1944 gold has fallen from 90% of international monetary reserves to 10%. [David Watt, manager of Phoenix Gold Fund in Kuala Lumpur, says] "Clearly if the world has lost faith in the U.S. dollar as a store of value and there is no other credible currency to replace it, then gold will have to be revalued dramatically."

Gold fans say that demand will rise beginning this summer. That's when China will let individuals buy gold for the first time. Later, a gold fund called Equity Gold Trust is expected to list shares on the New York Stock Exchange that will each be backed by a tenth of an ounce of the metal.

---------(these key excerpts from article at url above)------

Call MK and his staff of helpful brokers to get a jump on the rest of the pack and expected rising prices with the growing trend toward gold diversification.


glennh10Link to "The Money Printers" Forbes Article#10436706/09/03; 12:36:50

Try this one.
mikal@Cavan Man, Glennh10#10436806/09/03; 12:41:22

Thank you.
glennh10Re: Japan Weighs Radical Deflation Therapy #10436906/09/03; 13:02:09

It looks like this "carry tax" as an option is getting around. Recall BB's post from 06/02/03, 21:46:52MT msg#: 104001 regarding the Fed considering this for the U.S.

Of course, as the dollar continues to fall, fewer and fewer people are going to want to hold onto dollars anyway, including (and, I might add, especially), OPEC.

Dollar index graph:

WaveriderVIP: DAILY GOLD MARKET REPORT #10437006/09/03; 14:10:35

"The equities markets came under pressure on news after Freddie Mac FRE.N replaced its top management team with its $1.29 trillion portfolio of home loans. Another hot topic gaining steam on Wall Street are concerns over rising energy costs and that emergency action will be required to bring emergency pricing under control. Natural Gas is becoming more of a concern on Wall Street and this weekend the Financial Times in a front page article suggested that there will not be enough U.S. natural gas supply to get through next winter. Alan Greenspan will speak before the House of Representatives tomorrow on the issue of depleting natural gas supply and rising energy costs in a special session."

davefingerWords#10437106/09/03; 14:51:03

While I in no way suggest that words are not purposely used by economists/politicos/etc to obfuscate, there is another side of the language coin. A guy named James Burke did a series of shows called Connections, in which he would trace some thread of technology through the ages and talk a little about the societal impacts along the way. In one of the later episodes he talks on the subject of specialized language specifically. He makes mention of the fact that a hundred and fifty years or so ago, a man could aspire to have a personal library that contained pretty much the sum total of human knowledge to that point. Then along came serious scientific (as we know it) enquiry and advances that began developing highly specialized language to describe highly specialized knowledge. He goes further into the ramifications of this high degree of specialization on society as well (we need more shows like that one). Anyway, specialized language for complex or just-plain-new fields is a natural thing, but one corrupted and taken advantage of by marketing types and economists/politicians equally.
Black BladeUS grapples with natural gas crisis#10437206/09/03; 15:21:13


WASHINGTON (AFP) - Fears of a US natural gas crisis mounted as policymakers grappled with soaring prices and a slump in supplies ahead of the summer. Federal Reserve chairman Alan Greenspan will brief US lawmakers at a House of Representatives panel Tuesday and the National Petroleum Council holds an emergency meeting on the matter this month. There was little they could do for now, said Fahnestock and Co. senior energy analyst Fadel Gheit. "The only thing that is really key to natural gas prices going forward is Mother Nature. It is out of anybody's control and nobody can forecast the weather," Gheit said. "They can hope for a cooler summer and warmer winter." The natural gas shortage reflected longer-term poor planning by the government, Gheit said. "This is not oil, it is not controlled by OPEC (Organization of Petroleum Exporting Countries)," he said. "It is something that we have here in our country and yet because of the regulations, because of the infighting between departments of the government and the states, we don't have the adequate infrastructure to take gas from the producing areas to the consuming areas." US Energy Secretary Spencer Abraham said Friday he had called for a meeting of the National Petroleum Council on June 26. Supplies were low because of weather, lower US output and declining imports, he said.

Black Blade: Tomorrow Alan Greenspan will speak to the House. It appears that some people are waking up but again it's too late. Even so, they will essentially do nothing until later this summer anyway. There are a number of meetings over the next couple of weeks to inform local politicians and government bureaucrats of the situation. Tomorrow a few industry people (myself included) will meet with the governor of Wyoming and a few of his entourage. There have already been a few meetings and more are planned ahead of the Energy Secretary's emergency meeting later this month. If the weather does not cooperate we could see some "interesting" effects this coming winter. Many are already beginning to worry about the economic impacts should current storage not be sufficient.

misetichFreddie Mac hit by management crisis#10437306/09/03; 15:40:16


Gregory Parseghian, who replaced Mr Brendsel as chief executive, said Mr Glenn had admitted to altering personal diaries, although the alterations had "nothing to do" with the review. "The economics of the company . . . are unaffected," he said.

The earnings review is expected to highlight that Freddie Mac's earnings are more volatile than it had disclosed. The review was initiated after it hired PwC to replace Andersen as auditor.


Sounds like Freddie Mac management used a "smoothing" process to portray a constant level of earnings growth -

Perhaps the "economics of the company are unaffected" but how can you trust them?

What if the smoothing process is hiding current earnings shortfall?

All On Board The Gold Bull Express

misetichEuro row to go on as Brown puts off decision#10437406/09/03; 15:45:21


Gordon Brown on Monday set the government on course for another nine months of wrangling over the euro, promising to revisit the case for entry in next year's Budget.

The conclusion of years of work by the Treasury, resulting in a 246-page assessment, a 171-page changeover plan and 18 supporting studies, totalling some 1.5m words, is that the government still does not know whether it will recommend joining the euro in the next couple of years.

The decision to leave open the option of a referendum in the current parliament is a defeat for Mr Brown, and was seen as an important concession by pro-euro cabinet members. The Treasury had wanted to rule out a referendum this side of the general election.

Tony Blair believes there is still a "distinct and realistic possibility" of a referendum next year - and this view will underpin his comments at a joint press conference with Mr Brown on Tuesday.

Sadly UK decision to post-pone adopting the Euro sidelines the UK in isolation and relegated to Europe's decision making process as a major bystander- being left behind and out - whilst the Euro Superpower machine marches on

All On Board The Gold Bull Express

misetichThe unbearable expense of global dominance#10437506/09/03; 15:56:18


Politically and militarily, it is profoundly unwise for the US to go it alone in the world. But from an economic point of view it simply cannot do so without seriously damaging the American way of life and standard of living.
The Iraq war, the recession and stock market losses, together with the tax cuts proposed by the Bush administration have transformed the US budget outlook. Three years after the budget ran a surplus of $240bn, this year's deficit could rise to $400bn. The president's recent request for $80bn for the Iraq war and reconstruction is likely to be a first installment; more realistic estimates run to $200bn or more over the next five years. In the long run, the picture is dismal. Instead of the $5,000bn-6,000bn surplus once estimated for the decade ending 2013, the present outlook is for a $1,800bn deficit, according to the Congressional Budget Office. Estimates of economists outside the government reach as high as $4,000bn. There are hopes that Iraq's oil revenues will offset most of the reconstruction costs. But it will take several years and billions of dollars to bring production to its full potential.
Financing the country's trade and budget deficits requires ever larger inflows of foreign capital. Its external deficit of about $600bn annually (a record level) requires financing of $2.7bn a day in capital inflows. Net foreign debt is now $3,000bn and growing, requiring ever more foreign investment as a source of capital. With the dollar under pressure, this is a precarious situation.

The spiralling costs of the Iraqi conflict -.........should make clear that another such war and reconstruction, now or later, against North Korea, Iran or even Syria, would be reckless without a different domestic economic policy and strong allied support.
The dollar has fallen 25 per cent against the euro since April last year. So far it has been an orderly decline. However, it could accelerate and, in a dangerous investment climate, foreign investment in the US could come under severe pressure. Foreign direct investment was down to less than $50bn in 2002 from over $300bn in 2000.

The recent statements of John Snow, US Treasury secretary, amount to a deliberate - and highly dangerous - policy of further devaluation of the dollar. ........ or let the dollar slide further and run the risk of an international financial crisis.

It is time for the US to stop and think about the contradictory nature of its economic policies and its new international doctrine. It cannot, over time, finance its domestic needs while bankrolling the spiralling costs of America's global military dominance. Something will have to give. A crippled Atlantic relationship will only make matters worse.

The writer is a former US ambassador to France


Hopefully Washington will listen up to this man - US need an equal partners not a Europe and the rest of the world as a foe

All On Board The Gold Bull Express

Mr GreshamSmoothing#10437606/09/03; 15:58:38

Misetich -- I imagine Wile E. Coyote uses the "smoothing process" as he goes over the cliff, too.

It is used by the great rationalizing device -- the human mind -- when reality does not match self-deluded expectation.

But wasn't accounting supposed to present "reality"? I mean, REAL, HARD reality. So that business could be totally BUSINESSlike. (As opposed to us foofy un-mathematically inclined civilians.)

And weren't all those enterprise-wide fast computers supposed to present up-to-the-minute reports on business conditions? Trouble is the people who don't want to believe the reports the told the computer to provide.

Or pension plans continuing with 9% stock market growth assumptions. "Stocks always come back."

Or is it just someone's way of "robbing the bank?" Always following Willie Sutton's (or Deep Throat's) advice.

There is a lot of money to be made fading the herd. Just stay away from the sharp hooves as they're dashing toward the slaughterhouse.

Never has so large a percentage of a population counted on an ethereal system-on-paper/computer to keep them alive after they abandon common sense. And never have the politicos in power given clearer signals that they are willing to undermine the ability of that system to deliver.

Hmmmm, think I might leave my house unpainted this summer; it might pay to look not too prosperous...

misetichThree Top Executives at Freddie Mac Are Out#10437706/09/03; 16:23:27


In a scathing letter to Freddie Mac's board dated June 7, Armando Falcon Jr., the oversight office's director, said, "Removal of members of the management team only goes a part of the way toward correcting serious problems — concerns surrounding management practices and controls remain."
The proximate source of concern appeared to center on a personal diary that Mr. Glenn maintained and provided to the special independent counsel hired by the audit committee.

The diary, which was turned over last week, was discovered to have pages that had been altered or torn out.
The analysts said the need to restate Freddie Mac's financial statements comes from a different interpretation of an accounting rule issued by the Financial Accounting Standards Board in 1999 which went into effect a year later.

Arthur Andersen, Freddie Mac's auditor when F.A.S. 133 became effective, was of the opinion that Treasury securities on Freddie's books qualified as derivatives.

PricewaterhouseCoopers took a different view, saying the securities had to be classified as cash securities, which need to be marked to market each quarter.

"By classifying these things as derivatives, they were offsetting losses on other hedges with those gains," Mr. Harting said. "PricewaterhouseCoopers came in and said you have to let those gains go to the bottom line. To me, this is a geography of income issue, not an erosion of earnings or a change in the business model. The company will still earn the same amount. It's just that some of it will be moved."


The bottom line is investors and management don't know the real financial position, risks and balance sheet health - and its taking longer than expected to put the house in order -

By smoothing or contra/offsets accounting practices investors were mislead on the losses incurred in specific areas and possibly hide future risks in those areas

The promotion of inhouse staffing to key positions may also boomerang in coming months as they will be severely tested

All On Board The Gold Bull Express

CoBra(too)Gordon Brown's Reluctance to join the € ...#10437806/09/03; 16:24:34

@ Misetich - may have a lot to do with the unexplainable fire sale of more than 50% of the nations gold, at fire sale prices as it became clear. It seems that neither the exchequer, nor the BoE have officially taken responsibility for this majestic losing blunder. ... Maybe, they can't afford the 15% gold reserves the ECB is maintaining - marked to market?
Nor has Tony Blair sufficiently explained his US alliance in the Iraq venture, as there is still no trace of WMD's - even if GWB assures us every other day to find 'em yet.

Looks like the UK is stranded like a dying whale - somewhere closer to the US shores - though, anyway in between two Continents... or only missed to occupy the last musical chair in the latest round of the game?

Who cares, as the EU is rapidly expanding towards the East, where the old Empire will be finding its place ... Still, have to say, i'm sorry as the British way used to be a beacon in my personal view of the world ... too bad - cb2

GoldiloxBarbarous Relic Files . . .#10437906/09/03; 16:26:00


I imagined that this might be the very gold Saddam was holding as reserve for his membership in the Gold Dinar consortium. If so, the US Army will, of course, hold this gold "in trust" for the Iraqi people and the creation of their glorious new democracy (wink, wink, nudge, nudge).

If my assumption is anywhere near the mark, the invasion accomplished more than just securing Wolfowitz's "sea of oil" by dealing a blow to the Gold Dinar club, as well.


misetichFreddie Mac Ousts Top 3 Officers Amid Investigation (Update10)#10438006/09/03; 16:35:26


``There's a huge question mark as to what's in the diary,'' said Bill Rubin, an analyst at Dreyfus Corp., which owns Freddie Mac shares. ``You have the company saying there's no further accounting issues, then the top three executives are let go? So it's got to be serious as to what's in the diary, yet not related to accounting.''

Freddie Mac said in January that changes in accounting for derivatives recommended by its new auditor would force it to restate results higher for the past three years. The audit is likely to result in accounting changes -- such as when Freddie Mac books revenue or one-time gains -- that may reduce the company's future profit, Standard & Poor's said in a report at the time. Derivatives are financial contracts whose values are derived from other securities.

The company's new auditor, PricewaterhouseCoopers, in January recommended Freddie Mac change the way it accounts for derivatives. The company has said it is possible issues other than derivatives accounting may arise from the audit. As government- chartered companies, Freddie Mac and Fannie Mac haven't been required to file financial statements with the SEC.
The restatement will likely result in ``significant volatility'' in earnings for past periods, and may increase past earnings at the expense of future results, the company has said. Brendsel earlier this year said the new accounting moves income to 2001 and 2002 that otherwise would have been counted in future quarters.

The more you read the bigger the odour - it appears that Freddie Mac used the smoothing contra/offset technique and applied and spread what was a one time gain over multiple accounting years thus providing a consistent earning growth pattern by offseting against period losses

Lets stay tuned....

All On Board The Gold Bull Express

a nation of onewords#10438106/09/03; 19:09:37

"... A guy named James Burke did a series of shows called
Connections, ... (we need more shows like that one)."

Yes. I agree. I saw them also and liked them. I specifically remember him saying that about libraries.

a nation of onemy homework#10438206/09/03; 19:46:21

My charting activities seem to suggest that there is an increase underway in the force with which gold's
upward moves are occurring. These indications do not show that gold is particularly moving strongly higher,
that's not what I'm saying. POG is moving up, then down, then up, then down. But during March and April,
the down movements were stronger and more decisive than the upswings. Up movements actually didn't
begin to recover consistently until around 320. And as it was falling to that price, POG showed considerable
strength around 350, and then around 330, though less so. But selling was stronger, and so it fell. During
recent sessions, upswings have been forming charting patterns consistent with increasing interest, I believe,
and selling has weakened, though it is still present in considerable force. I associate this with a tendency to
consolidate, in preparation for a more decisive move. In my opinion, a somewhat longer stay in this present
area will, in effect, constitute a process of helping to establish gold's long term valuation more in the range
of 350 and above. Otherwise it could rather easily be argued that it is worth only about 330, for the
intermediate future. But to do this, I think, POG would have to go down to around 330 pretty soon, or start
going there soon. Whether it will do this I don't know. But the more it plays around in this area, at least for a
while, the stronger I think it looks. From what I can see, there is still quite a bit more in favor of a POG
above 350, than below. But summer is acumin in. And the news has pegged the dollar, though for how long
is uncertain. Also, the Euro has lost its edge so to speak, at least for the moment. The world is laden with
exceptions, and is always working to deliver the unexpected. Numerous other factors still point higher.

21mabry(No Subject)#10438306/09/03; 19:52:12

President Bush today asserted that Iraq had I repeat had a WMD program.Blair and Bush have been trying to get past this fact since the war ended.If Iraq WMD program was so big and lethal they would have found something by now.They have managed to find Iraqs gold thats about it.Maybe the powers that be consider gold a weapon of mass destruction to the house of cards they built.
Liberty HeadSometimes The Truth Is A Jagged Edge#10438406/09/03; 22:22:13

There sure is lots of smoothing going on these days!
Fraudie Mac is neither the founder nor the final member of the Smoothie Club.
The smoothie mindset is all the rage with the folks who think they can hotwire reality. POG is surely no stranger to the smoothie treatment either.

Imagine a carpenter who decides to protect himself from injury by smoothing the teeth in all of his saw blades. He may be quite busy and not cut himself, but it won't be long before someone notices he doesn't cut much wood. Sometimes the truth is a jagged edge and nothing else will cut it.
If a carpenter can understand that, why can't a CEO?

Gold in your possession is great insurance against bogus CEOs, Presidents and Fed Chairmen.


mikalMarket news + Bush parrots dollar slogan#10438506/09/03; 22:33:41

Goodbye, Dow 9,000
Firing of two Freddie Mac execs, Motorola warning weigh on stocks. Dow dips back below key level.
June 9, 2003: 6:01 PM EDT
By Meghan Collins, CNN/Money Staff Writer
NEW YORK (CNN/Money) -Excerpts: ".....The Nasdaq composite logged the biggest loss, shedding 1.4 A trigger for selling Tuesday might be a report by a court-appointed examiner released late Monday alleging that bankrupt WorldCom created a special set of financial reports masking its true operating results. Meanwhile, some investors likely will look for signs in the Federal Reserve Board's Beige Book of where the economy, and interest rates, are heading. The Beige Book, due to be released at 2 p.m. ET Tuesday, is essentially a snapshot of where the economy stands in the agency's 12 districts around the nation – and sometimes provides an indication of the Fed's next move.....
Investors have watched with concern in recent months as the dollar lost value against the euro and the yen. There have been mixed statements by members of the Bush administration on their level of concern over a weak dollar. But President Bush reiterated to reporters Monday that the government supports a strong dollar, Reuters reported."

slingshotTaxation and Uncertainty#10438606/09/03; 23:18:46

Now that's a fine combination for you.MK's comment in Susan Kitchen's article truly reflects the growing investors mindset. Being a Shellback Goldbug (One who rode it down to the low of $254.00) It is my opinion, Gold, will prove to be the investment of a lifetime even if you enter at this time.As the states ascertain their shortfalls in their budgets, they will enact more and more tax upon the citizens to keep them in power and ensure the wealth distribution. I predict that the reporting of the sale of PM's will drop to $5000.00 to the IRS and that eventually the purchase of Gold bullion (eagles) will be taxed again. Maybe both federal and state sales tax will be tangible.
My foundation for these comments come from Cliff Droke's article on the Federal Debt and John Mauldin's Bankrupting of America. As to he Carry Tax, Who saves in America?

Just one more comment.

Are you out there Hoosier Goldbug!


GratefulForGoldMuchas gracias, thank you.....#10438706/09/03; 23:21:31

I appreciate the feedback I received regarding what to do with the "emergency fiat" I have in US$. For better or worse, guess it'll stay tucked under my mattress! (Perhaps I'll get to trade it in for the "new" currency someday?)

Needless to say, I'm very grateful that I have my physical gold and silver (stored safely) that I truly trust will be of inestimatable value in providing for myself and my loved ones in the years to come.

"Thank you" does not convey the gratitude I feel for the education received from the beautiful minds on this Forum.


GoldiloxFT sees no recovery #1044506/10/03; 23:20:00

GoldiloxBOJ buying SME issues#10449306/11/03; 20:43:55

DruidBelgian #104481#10449406/11/03; 21:16:50

Belgian, yours and a few other commentaries at this fine forum continue to enrich my learning and I certainly thank you all for that contribution. You thought the best actors/actresses were in hollyweird(these people have nothing on the politicos of the world). The drama that is unfolding now is on course and in accordance with the blueprint provided by "ANOTHER & FOA". I have spent the last three and a half to four years reading and learning from giants in the gold world and the two analysis I keep reverting back to are by "ANOTHER" and Professor Fekete's theory on interest rates which I believe is playing out in real time(although in a compressed time frame). Sir Maximus is penned in by the derivatives monster, if he raise rates, the destruction will be greater and faster then if he rides them into the ground. The other world players know this and will go along to avoid a discontinuous event, thus the fine acting. Just hope and pray that an outlier does not occur that was and is not anticipated by these fine architects. Got Gold?
Chris PowellDon't despair, for even Richard Russell is coming around ....#10449506/11/03; 21:26:50

... to GATA's side.

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.

Black BladeFed under pressure #10449606/11/03; 21:26:50


Financial markets drove their expectations for US interest rates still lower on Tuesday, putting pressure on the Federal Reserve either to cut rates or explain why not. Following a sustained fall in expectations over the past week, the turmoil at Freddie Mac, the mortgage lender, has fuelled the belief that the Fed is preparing to cut rates by at least a quarter-point when it meets in two weeks. A week ago, the market estimated a two-thirds probability of a quarter-point cut. By yesterday, investors had more than fully priced in such a reduction and prices were reflecting a 30 per cent chance of a half-point cut.

Black Blade: A half point certainly is not out of the question as the Fed and Treasury would like to see a weaker US dollar is spite of stupid comments to the contrary by the US president. The "strong dollar policy" has been abandoned and a weak dollar is a necessary readjustment after several years of doing all the heavy lifting for the global economy. The ECB rate cut of 50 basis points was probably a bit of a disappointment for the Fed as it puts on additional pressure to match it with a 50 basis point cut at the next FOMC meeting. As unemployment rises and US economic data looking very grim and the looming energy crisis on the horizon, the Fed and Treasury are desperate to weaken the dollar to stimulate borrowing, spending, and (hopefully) economic growth. So far rate cuts and massive infusions of cash have not worked (just like Japan). Like a black hole, the gravitational forces suck it all in and await more while giving nothing back. "Interesting Times"

Black BladeU.S. Attorney, SEC Probe Freddie Mac#10449706/11/03; 21:40:40


WASHINGTON (Reuters) - The U.S. government has launched an investigation into Freddie Mac (NYSE:FRE), the country's second largest mortgage financier, the U.S. Attorney in Virginia said on Wednesday. "The United States Attorneys office in the eastern district of Virginia has initiated an investigation involving Freddie Mac," U.S. Attorney Paul McNulty said. He gave no further details and officials would not say what the exact investigation would cover. The Washington Post reported on Wednesday that prosecutors were looking into alleged irregularities at the mortgage giant. The article cited one official who said the probe focused on possible violations of federal securities fraud. Acknowledgment of the investigation came just as Freddie Mac announced that the U.S. Securities and Exchange Commission had begun a formal investigation into the company. Freddie Mac, which manages a $1.29 trillion portfolio of home loans, on Monday announced it fired President and Chief Operating Officer David Glenn for failing to fully cooperate with a review of earnings statements from 2000 through 2002.

Black Blade: I watched an interview with PIMCO's Bill Gross and it appears that the US government and some banks may be on the hook for some losses (or at least be asked to cover if there are losses) and the investigation could widen beyond Freddie Mac. There are rumors that Freddie Mac had dabbled in exotic derivatives and cooked the books to make the balance sheet look better. For some reason this made me think of the Orange County derivatives scandal when fund managers got into investment schemes they did not understand. This could turn out to be a much bigger story in coming weeks. Now there there is some talk that Fannie Mae will be under the microscope as well.

Black BladeDanger rife in accounting's black box: derivatives #10449806/11/03; 21:51:27


NEW YORK, June 10 (Reuters) - Freddie Mac's accounting blowup that brought down its entire top management team highlights how the complexity of derivatives accounting can leave investors clueless while opening the door for earnings manipulation, analysts and accounting experts say. In recent years, one of the biggest warnings on derivatives has come from renowned investor Warren Buffett, who called them "financial weapons of mass destruction" and pointed to their "mind-boggling complexity." Buffett sold almost all his $2.8 billion stake in Freddie Mac in 2000, saying he didn't like the risks the company was running. Federal Reserve Chairman Alan Greenspan, who usually praises derivatives, also warned of the disruption that could result from a major derivatives dealer exiting the market and called for more meaningful disclosure of derivatives' use.

Black Blade: The entire senior executive management was fired. They refused to cooperate with the board and apparently destroyed documents - Interesting.

Black BladeFiring Fuels Doubts on Derivatives #10449906/11/03; 22:05:41

Freddie Mac's Use of Market Scrutinized


Freddie Mac's disclosure yesterday that its president was fired for his lack of candor during an investigation of its derivatives accounting touched some of the financial industry's worst sore spots. Freddie was quick to say that fired president David W. Glenn was not hiding anything that related to the company's financial strength. But the continuing accounting probe at Freddie, and concerns raised by its government regulator about Freddie's internal controls and management expertise, raised new questions about derivatives, a multitrillion-dollar unregulated market that Freddie makes extensive use of to manage financial risk.

Black Blade: Of course their previous auditor was none other that scam artists Arthur Andersen, the same criminal enterprise that helped Enron.

Liberty HeadThe Economy Of Freedom#10450006/11/03; 22:41:46

Never before in our history has the government of the USA demonstrated greater arrogance and disdain for the civil liberties and the rights of individuals. The assault on liberty has gone into high gear around the globe, with pitifully little active protest from our own citizenry.It is easy to invoke cognitive dissonance when it is someone else who is feeling the pain.
Verbal protest is key, but will not effect change alone.
A key prerequisite for mass active protest is mass active pain. This is why I think the economic travesties are the ones that matter most. Everybody is affected by the economy. Those with low debt, second amendment hardware, stores of food and gold have a much better chance of survival. A good guitar wouldn't hurt either. :-)
I hope to meet you all on the otherside of what's comming.
In the meantime, cheers.

cockerel1Accounting Practices#10450106/11/03; 23:11:51

Having been involved with and been the victim of "questionable" accounting types, as the majority of the investment world seems to have been recently, something needs to be done.

This is my beef.

It will probably get me chastized but it needs to be said, especially as the accounting profession has set itself up to being the all-powerful contollers of public companies. (I have been involved in both public and private organizations and the difference is night and day. Private companies focus on their expertise, whereas public companies focus on reporting and accounting.)

If you analyse exactly what accountants do, you will reach the ultimate conclusion, as I did, that they only record history. i.e. that which has already happened. If there are no transactions, there is no need for accountants. Yes, they can and do distort said history, but as far as honest contribution to the bottom line... nada.

By the way, mathematics is an exact science. In fact, it is the only exact science.

Except when it is practiced by accountants. Then it becomes a true art form.

Maybe its time to speak out and expose these so-called "leaders" for what they really are - pretencious artists in the real business world.

The sooner the world adopts a global currency, i.e. gold /silver, the less instruments we give these charlotans to distort history with.

BelgianRe :#10450206/11/03; 23:36:42

GAB : Nothing wrong with Salinas's Libertad (or silver dirham). But imo, these are systems that operate within an all embracing Global "reserve" system.
We are "ALL" on the dollar-standard now, and are therefore a derivative of the dollar. There can only be ONE global system that is to replace this dollar standard. There are only 2 major reserve items : dollar and Gold.
When Salinas states that a Libertad would be good for Mexico, because Mexican silver mining would profit from it...I'm getting suspicious about the naked honesty of the good-sounding-looking, silver plan/principle. I have my doubts about silver, being able to regain its place in a global monetary system.

Magister Aurelius : Sir Sinclair and his *Gold Cover Clause* :
As an Eurolander, I don't believe that the dollar will survive its "reserve" status ! Sinclair does (publicly)!
J.S sees the revival of the dollar-Gold-standard...if the Gold Cover Close is revitalized before gold trades above 529$ or before the derivativesberg, implodes ? Etc...etc...

The euro-project, suggests the principle of the defined FREE GOLDMARKET. This is only possible when the dollar loses its reserve status. Et voila, our thoughts go to the survival of the dollar-reserve and the consequential, fundamentally different future for Gold...FREE GOLD !

A lot of mixing up is done, when talking about the "dollar" : Clear Distinction must be made in specifying, wich aspect of the dollar one is talking about. The dollar as a currency unit for global trade settlement...or the "reserve" aspect of that dollar currency, where we all still accept the dollar's capacity as "standard" !!! Standard = an agreed reference !

As an Eurolander, the dollar-standard, doesn't exist, de facto for me, anymore. I already went on the euro-Gold standard ! And I wish (soon demand) to pay for oil in euro.
This is what's happening folks.

Simply a matter of continued acceptance of the dollar-standard (system) or a step by step shift to the euro alternative.

Is the euro making any chance to call the the dollar really threathened in its reserve close or far away are we from this questionable transition... ?
And to what extend has Gold already positioned itself into this process ?

99,999 % of global financial observers, don't even think of putting the above public ! Political totally "incorrect" of doing so ! As is Gold-Advocacy !!!

Yes Leigh, I wished FOA came back for some more guidance and reporting on the deep inside evolvements, invisible to us. Is there an unknown element that is delaying or slowing the $ > € transition ? Or has it been called off, temporary or definitely ??? And will or can the dollar-standard take over the Gold-Initiative ? What kind of new/old dollar-gold system would it look like...if any ?

In other words, we are not a forum on how to profit/lose on the dollar/euro currencies but how these two currencies (systems) will affect Gold's future. Are we ?

slingshotWar and the Dollar as World Reserve#1045036/12/03; 00:52:19

We all know that the USA outspent Russia in the Cold War and saved the world from the Evil Empire. Military expendensure at an all time high for the US drove the Russian military machine into the ground. They could not even pay the troops and today as an result have all sorts of Russian hardware being sold around the world. Did Ivan go home? No he just scaled back and uses his resourses to buy Gold. While the US embarks on a campaign to combat terrorism and prints/spends money to keep troops abroad. Did other countries refuse because the price to effect was too high with little results. Yes we did take down the evil man but occupation has its costs. Now all this may sound like malarky,but what if the US decided to withdraw and take an isolational stance because public out cry was too great because of economic impact? Military spending cut. Contracts cancelled. More off to the bone pile? Where would gold go in a world of instability? Are other countries willing to fill the gap we would leave behind. The more we spend on war the worse our infrastructure becomes.

Listen to me, I'm a Hawk by nature.


BelgianSocrates964 - #104484#1045046/12/03; 01:05:31

We all must agree on TI/TA that :

1/ $-€ exchange rate will decline further.
2/ USD-index will decline.

Remember my personal view of the ABC pattern down, from the 1985 ATH for the dollar. Dollar 1995 low will be taken out !

But, the dollar's local "purchasing" power hasn't moved yet !!! A fundamental that has its repercussions on how the coming dollar-decline might evolve in the short term (consolidation-?)

Another one of these present realities is : Where does all that printed confetti flows to ? Central banks'printing might have temporary power over the almighty market-forces !?

We are, imo, dealing with "extra-ordinarry" times and measures !

Fib./Bradly, risk of being temporary over-ruled and might have to catch up, later. More time elapsing whilst deliberate (manufactured) detoriation, results in more violent adjustments (dollar-Dow crashes), afterwards.

Point is : How reliable are the Technical Interpretations when having evidence of unimaginable "intervention" and engineering !? On a global scale !
If one accepts of being already into some acceleration of the $ > € transition...dollar collapse...We might be fooled with TA/TI ?
You seem rather confident that the financial system remains relatively in coyote-like control ? Remember the past wrong interpretations on JPM/C . Strong winds pushed that coyote back with its feet on hard soil/cliff ?

FRE/FNM will surely receive the right wind from the printing presses !

The dollar is *printing* its reserve status into the shredder ! The dollar's one and only escape route to win some more time. This printing-Mania is, imo, NOT a temporary phenomenon anymore ? For How long can the black holes (stock/bond markets-other) absorb the confetti flows ?

Question, Soc : '02 article by Sinclair/Shultz " Goldmines exposed" : We are back at 355$/Oz, where the HSL suggested the breaking point where Notional Value of a derivative becomes Real Market Value !!! Thoughts ? TIA.

BelgianSlingshot#1045056/12/03; 02:31:48

If the dollar hadn't been detoriating to such an extend that (imo) it doesn't qualify for being a reserve-currency, anymore...there would be much less war...wars of different kinds !
Topazsteady, Ari.#1045066/12/03; 02:48:25

Mundells suspension of Greshams Law is a good one...the "undenominated" Libertad will be mentally prescribed a "currency-value" minute by minute and eventually hoarded out of existance... I think!

Always good to see the awe eminating from those in the business for Central Banker types and their "theoretical" control of the System.<wink>
Despite re-reading your $/E post several times, I'm unable to distinguish between Debt (IR's)...and Credit (Bond Yield). I realise they're "joined at the hip" but the destinction is much greater than your post alluded to.
The Market is telling us that despite a sharp decline in the $/E exchange rate, buyers are still flocking to the T's in preference to Euro denominated paper... and taking the "temperary hit"...(obviously far more complicated than that but superficially sufficient).
The only...ONLY difference $/E is the MtoM Gold thing that "may" see it through "when" the Wheels fall off the far as Management goes, a 50bp cut at this stage of development screamed "poor management" imo...shoulda cut X 25 Months ago, Idiots!

TopazBonds, Gold and Dollar.#1045076/12/03; 03:40:38

What an "interesting" couple of weeks lie ahead for empirical market watchers. We've seen in the past, just before Q2-Q4 reporting, the $ taking a nosedive. My take on these has been to "fatten up" Dow component repatriation prior to quarerly book-keeping...and the DC's need it again if they're to justify the current price run-up. The Index/Yield Charts (above) are indicating BIG $ dilemma below 92, so without an index drop Dow could be vulnerable going forward.
The Index has been showing strength to the upside lately which could spell curtains for Bonds...and Stocks...and R/E...and ...and..if it goes unchecked. undenominated Gold holding just gets better and better with age.

Max RabbitzEuropean economy 'very weak'#10450806/12/03; 07:15:36

BBC Article

"Now, in his quarterly appearance before the European Parliament, Mr Duisenberg has cut back the ECB's forecasts for eurozone growth to 0.4-1.0% in 2003 from the 2% he had previously predicted."

"Inflation - the taming of which is at the core of the ECB's brief - is dropping significantly..."

"But with only a month left before he is meant to step down, Mr Duisenberg's rhetoric has changed. Underlining a policy shift unveiled in May, which stressed that inflation should be not below but "close to" the 2% target, Mr Duisenberg told the European Parliament's Monetary Affairs Committee that the ECB would work just as hard to avert deflation as it does to avert excessive price rises."

Max: Deflation in Europe? Can Europe be competitive with the "structural" problems they have? I just don't see how socialism, "entitlements", labor monopolies, and big government planning ministries can work in the long run for either the U.S. or Europe. Fighting over who gets to have the reserve currency while the sun rises in the East. I'll take the gold.

Cavan ManHey Maxie........#10450906/12/03; 07:42:07

Max: Deflation in Europe? Can Europe be competitive with the "structural" problems they have? I just don't see how socialism, "entitlements", labor monopolies, and big government planning ministries can work in the long run for either the U.S. or Europe. Fighting over who gets to have the reserve currency while the sun rises in the East. I'll take the gold.

Thanks for recognizing there are "big government planning ministries" on both continents.

Cavan Man"We are strong......we are united"#10451006/12/03; 07:53:16

Just in case, make mine GOLD.

Duisenberg- little chance G8 economic cooperation
Reuters, 06.12.03, 7:55 AM ET

BRUSSELS, June 12 (Reuters) - European Central Bank President Wim Duisenberg on Thursday said there was little prospect for international cooperation to address pressing global economic problems.

Asked by European Parliament committee members about the need for international cooperation to tackle problems such as the burgeoning U.S. current account deficit, Duisenberg said there was little inclination among Group of Eight (G8) countries to cooperate.

"I am not present at the G8, but I know the attitudes on both sides of these two oceans and I see little practical possibility to really cooperate or coordinate in the field of economic developments," he said.

Europe would be on its own in facing problems such as the price and exchange rate adjustments implied by the rebalancing of the U.S. current account deficit, which is approaching five percent of U.S. gross domestic product.

Yet Europe was not helpless, Duisenberg said.

"We are a factor not to be ignored in the world. We are strong and at least economically, we are united."

Melting Pot2 Pictures tell the story: P/E & Dividends#10451106/12/03; 07:54:51

No dividends, no profits, sorry take a hike! There will not be profits for as long as the POO remains above $25 bbl.

America is in recession again, it just has not been officially confirmed..........

Max RabbitzSir Cavan#10451206/12/03; 07:58:14

I have a Chinese friend who went through the "Great Leap Forward", spent her youth planting rice on a communal farm, lived for years in unheated government buildings, no hot water in winter, who says we, the U.S., are now more socialist than China.
Socrates964Belgian#10451306/12/03; 08:08:05

"But, the dollar's local "purchasing" power hasn't moved yet !!! A fundamental that has its repercussions on how the coming dollar-decline might evolve in the short term (consolidation-?)"

Don't worry, it will. I have a real problem with bonds as a concept because I have a deep mistrust of official inflation rates. When I use my own cost of living index to work out real interest rates, I discover that, surprise, surprise, most bonds have negative real yields.

One point I've observed with regard to a number of emerging economies with massively unequal wealth distribution is that in a recession, producers of value-added goods and services simply withdraw from servicing lower-income consumers and concentrate on wealthier customers who don't really care about higher prices, even if their sales volumes go down. In theory, this should not happen in first-world countries where the majority of the population is affluent, but in practice (I think it was silvercollector who pointed out that his wholesalers are trying to contract their supply network) it does, presumably because of high labor costs. And what about all the retailers who are trying to introduce 'loyalty discounts' which are actually 'poverty premiums'. At least during the Middle Ages, the lord of the manor understood that if he squeezed the peasants too hard, they were likely to revolt and massacre him. This appears to have been forgotten.

Evidently, importers will always try to adjust the domestic price of any good to offset exchange rate weakness, while a weak currency will also give domestic producers the ability to raise prices since imports become more expensive and less competitive.

Sooner or later, pricing pressures show up.

"Fib./Bradly, risk of being temporary over-ruled and might have to catch up, later. More time elapsing whilst deliberate (manufactured) detoriation, results in more violent adjustments (dollar-Dow crashes), afterwards."

-Well, time will tell. Looks like an Argentina-style situation where the door is wedged open to allow the corporate/financial élite to exit the markets, giving the appearance of irrationality. Sooner or later, they pull out the wedge (The PPT has to raise cash sometime) and markets will become beautifully rational again.

Actually, an interesting point occurs to me. Assume the PPT is massively long of Treasuries as it has been buying all the way up from 110. How does it offload these? How about a mini stockmarket crash that sends the general public fleeing the equity market into the safe haven of government bonds

"Question, Soc : '02 article by Sinclair/Shultz " Goldmines exposed" : We are back at 355$/Oz, where the HSL suggested the breaking point where Notional Value of a derivative becomes Real Market Value !!! Thoughts ? TIA."

-Well I presume that JS/HS are well-informed, and as I pointed out, 354 is a key Fib level. I merely expect that since it's the Boys whose hedge books submerge at this price, then their counterparties will cut them some slack. It's thus naive to assume that the world ends when gold trades through this price. It looks much more like trench warfare where gold trades through the 320 trench several times - the Cartel eventually gets the point and retreats to the 350 trench, the same happens again, and then it's the 380 trench, all the time gradually covering. Gold will explode when they are net long of the market.

Sir Alan has killed the gold leasing trade simply by bringing LIBOR down to below leasing rates (rates likely to go negative if he cuts again, IMHO). So where's the gold game? Evidently on the long side.

Aren't we all just waiting for the JPMs of this world to load up?

Econoclast"The skill of the teacher is measured in the growth of the students"#10451406/12/03; 08:29:42

Mr. Gresham

A truly golden thought. Thank you.
21mabryReal Bills Doctrine#10451506/12/03; 09:17:26

In order for a nation to maintain a constant value in its fiat should it be issued only in the amount buisness and industry require to function? During times of increasing buisness activity more fiat is issued and during times of receding buisness activity less fiat is issued. Will this retain fiat at state of equlibrium? If fiat was only issued in exchange for something of value such as labor or for buisness investment in capital goods would this give fiat a value in itself. Is this the essence of the real bills doctrine? If it is followed could fiat prove itself to be a legitamite form of money? just thinking outloud 21
Magister AureliusRe: real bills doctrine#10451606/12/03; 10:10:26

There is one big problem with a real bills doctrine at least in the current/modern US economy. A real bills policy might work if cash were the only circulating medium of monetary exchange and traditional loans such as mortgages, business loans, or where the lender loans the borrower a fixed amount of cash. The bane of a real bills doctrine are revolving lines of credit and electronic funds. Credit cards and other lines of credit are accessible during an economic condition, the lender cannot deny purchases made with a line of credit as long as they approved the line of credit in the first place. Thus, control of the money supply is limited to expansion only. Electronic funds are also a problem, as no cash is exchanging. Electronic funds and revolving credit turn money into mere accounting units and vastly expand the money supply. A workable real bills doctrine, as I understand from your post 21mabry, is only workable without revolving credit and electronic cash... so we would really have to rearrange the entire economic structure of the country.
21mabryAurelius #10451706/12/03; 10:26:28

Thnx for the response.What you said makes sense,our economy revolves around credit. I am interested in John Law and read anything I can about him. It is facsinating to me that so much economc thinking came out of a rather small and poor nation like Scotland of that time period. 21
21mabryStock Market Losses#10451806/12/03; 11:08:16

Like many in the U.S. I got caught up in the stock market of the late 1990s. Being new to investing and having some money for the first time in my life the years of 40 percent returns were addicting. But in the end they proved fleeting I came out with only principle in tact all my paper profits are gone. Always though I remembered my Grandfathers tachings to me about real value and I had always invested in small amounts of silver.Last august when I discovered this board those old teachings of my Grandfather along with this forum started a path to the awaking to the real world of economics. We can profit from paper markets but we must know when to get in and out that is very difficult.I now consider my paper losses as tution in my ongoing education and those losses were the catalyst that awoke old teachings in e and drove me to seek out things like this forum.If you are able use the stock market for profit and store that profit in the true forms of wealth we discuss on this forum. So in closing beware of greeks bearing gifts and carthage must be destroyed.21
Gandalf the WhiteOK ! -- I have a Question ! <;-)#10451906/12/03; 11:49:08$GOLD,P

On the Chart at the above LINK --
Which will come first ?
An "O" at $348. or a "X" at $376. ???
AND -- THANKS ALL, for all the GREAT INFO to allow me to make up my own mind !!

Magister AureliusAbout returning to a gold standard#10452006/12/03; 12:42:20

I'm interested in how a true gold standard where gold coins circulate as currency would be implemented nowadays. What circumstances would have to occur to bring this about? A total fiat currency collapse would lead to a governmental collapse, especially if world currencies tanked, but while gold and silver would be worth a tremendous amount they would only circulate as money after some sort of authority and/or state were stable enough to issue currency. In the meantime, there would be a great deal of "like money" goods in barter, ie, alcohol/liquor, firearms, food, tools, ammunition, etc.
Now, barring a total collapse of civilization, how would a government reestablish a gold standard? In my opinion, the first step would be the abolishment of the Federal Reserve System. What a government would have to do is keep the banks out of the nation's economic policy. In this modern age, there would not be enough gold to circulate all the coinage needed without massive exploration. therefore, perhaps a take on the GoldMoney concept is needed. A true "GoldCard". It would act like a debit card does for your checking account. The user would have their gold in a repository, ie bank or credit union, from which they could use the card to purchase goods and services. Now ideally there would still be gold and silver coins floating around as well, but let me know if this idea would even be workable, even as a transitionary measure.

Mr GreshamQuick read, quicker thought#10452106/12/03; 14:20:21

Gold standard? Do you mean, asking government to behave? Chortle, guffaw. Or are you thinking of people, exercising common sense?

Equating government with civilization? An easy conflation, for gov has hidden itself within that veneer since ever. A veneer wearing thinner by the minute. "Civilized Gov" looking more oxymoronic (and omni moronic, too) by the day.

Y'know, people are looking more intelligent to me lately -- maybe it's just springtime turning into summer, but I suspect something in them may know something is in the wind, and much of them is ready for a change. Ready to jettison these clowns. Tired of having their buttons pushed? I think most of 'em may behave pretty well. Of course, it doesn't take too many brownshirts to mess everybody up pretty well. We'll see...

USAGOLD / Centennial Precious Metals, Inc.Buyers’ Group Special . . . featuring BULLION#10452206/12/03; 14:30:56">Gold Buyers Group Special
axNo Real GOLD STANDARD : But USA can come CLOSE #10452306/12/03; 15:08:42

Realistically, paper currencies are here to stay. There is no hope that the USA will ever return to using physical gold
as currency.

BUT - the USA can come closer to this than it is now.
HOW? The USA Treasury must buy all the physical gold it can
get access to. The small 8000 ton USA gold reserve needs
to be drastically increased. During World War II and in the
immediate post war years, the US had a much larger gold reserve tonnage. WHY cannot the US Treasury get some of this back?

What are the sources?

1. Bullion dealers located in the United States
2. Gold Mines located within the United States
3. Non U.S. Central Bank Gold up for sale -
for example - Swiss Central Bank Gold, Portugal,
etc. -- or any other Central Bank that is foolish
enough to sell

4. Gold from mines located outside of the United States

5. Speculators, Comex, and

6. All other sources

The United States wants a stable currency or a "strong"
dollar? This is how you start.


TownCrierFederal Reserve adds $12.5 billion new cash to banking system today#10452406/12/03; 16:28:01

In as good a sign as you could ask for regarding future intentions, the Federal Reserve intervened in the open market today (while fed funds were trading at the latest FOMC target (1.25 percent)) with a $6 billion operation using 28-day repos -- clinched by Treasury collateral for half the amount accepted at the low rate of 1.06 percent. The other half was in "crap" (old term) collateral (Fred, Fan, Gin, and MBs) accepted 5 basis points higher.

The Fed also injected an additional $6.5 billion with overnight repos collateralized almost entirely by Treasuries, accepted on average right at the current FOMC target.

The writing is on the wall.


The Invisible HandLeuschel: gold standard in China – Inflation within 1 or 2 years#10452506/12/03; 17:33:25

After having drawn attention to the contradiction between on the one hand the stock markets recent rise on the hope that earnings will rise and on the other hand the bond markets recent rise on the conclusion that if the economy does not revive deflation will appear, Roland Leuschel ends today's column, which is titled "A serious crash is threatening", by drawing attention to the fact that the recent freeing of the Chinese gold market has been done with the aim of enabling China to be an economic power within ten years with its own currency. He concludes by saying that within one or two years there will be inflation as this is the only solution to what Belgian calls ‘debtbergs’.

China shows perhaps the way to today's discussion on the Forum on how the US of A could have (again) a gold standard. Just abolish legal tender laws (Hi, Mr. Gresham)? Private, not public, gold ownership. If the Fed continues to exist then, so be it.

Eine deftige Kurskorrektur droht !

Noch ist der dritte Aufschwung seit dem Platzen der Blase im Frühjahr 2000 im Gang, und die Aktieneuphorie wächst täglich, wobei das Bemerkenswerteste seit drei Monaten der gleichzeitige Anstieg der Aktien und Anleihenkurse ist. Die Aktienkurse steigen, weil die Anleger glauben, die Unternehmensgewinne sind im Begriff zu steigen, und die Anleihenkurse steigen, das heisst die Renditen fallen, weil die Anleger befürchten, eine Rezession steht vor der Tür, ja sogar eine Deflation wird befürchtet. Beide Lager können nicht recht haben. Entweder kommt der von vielen Optimisten vorhergesagten Wirtschaftsaufschwung, dann steigen die langfristigen Zinsen, auch wenn Alan Greenspan angekündigt hat, er kaufe Staatsanleihen, um die langfristigen Zinsen niedrig zu halten, und es gibt Turbulenzen auf den Anleihemärkten. « Wenn Sie berechnen, dass der faire Wert (fair value) für Anleihen zwischen 5 und 5,5% liegt, dann ist der Bondmarkt reif für Gewinnmitnahmen. », erklärt Mike Lenhoff, Chefstratege bei Brewin Dolphin Securities in der Financial Times. Wenn aber die Wirtschaftserholung nicht kommt, dann ist die Gefahr einer Deflation real, und ein Anstieg der Unternehmensgewinne reines Wunschdenken. Dann kommt es zu einem Mini-Crash am Aktienmarkt.
Vergessen Sie nicht, einen Teil Ihres Wertpapier-Portefeuilles (je nach Temperament 5 bis 10%) in Gold anzulegen. Wie Sie wissen, hat die chinesische Regierung angekündigt, ihre Goldreserven kräftig aufzustocken, ausserdem darf seit Beginn dieses Jahres der chinesische Staatsbürger zum ersten Male seit der kommunistischen Revolution wieder physisches Gold besitzen. China wird in rund 10 Jahren eine Wirtschaftsgrossmacht und wird mit einer eigenen Währung Machtpolitik treiben wollen…
In ein bis zwei Jahren werden wir uns wieder mit der Inflation beschäftigen, sie allein kann das Problem der insolventen Rentensysteme und der hohen Verschuldung « politisch lösen ».

R PowellAn X or an O#10452606/12/03; 17:38:18

Gandalf, an X or an O? I'm sure I don't know. That is, I can not say with any certainty but thanks for the chart. It's interesting to see the price direction displayed in that form.

It has occured to me that the 350 POG area and the 450 POS level may be focal points for some sideways price movements before either metal decides in which direction it will proceed. I've found, with paper trading, that I fare better coming out of these sideways moves by simply letting the market decide what positions I'll take. I do this with standing orders to be filled when a certain price is reached. I'd guess there are a great number of buy orders above the present range and a great number of sell orders below. Because the POG is subject more to paper trades than the reality of the economic situation, it would not surprise me to see such open order "stops" hit either above or below the present trading range. This has the potential to move the price rather quickly and perhaps further in either direction than otherwise would happen if the price were moving in an easily discernable trend.

I'd love to see gold and silver move the way cotton has in the last two weeks, +20% or so! Is coffee next? I'd especially enjoy seeing that silvery colored metal whose price has ignored all fundamental logic for so many years make a 20% move up. I've been watching the so-called small speculative traders who have been slowly accumulating an ever increasing percentage of the long open interest in silver, 35.4% as of 6/3/03. These guys don't panic and sell on the dips nor have they sold for profit at the last two highs. As they grow larger, there may be fewer contracts for the commercials and non-commercials to buy and sell to one another. Will this make the POS more volatile in the future? Is anyone really watching the silver market? Remember, Buffett managed to buy 89 million ounces over approximately six months (second half of 1997) BEFORE anyone noticed! Whose holding the silver longs now? Hedge funds don't "buy and hold" commodities. Who are these guys??
Hey, by the way, how many hobbits are there now in the neighborhood?

spotlightJP Morgan/insider trading?#10452706/12/03; 20:08:44

Regarding the Blanchard suit against Barrick Gold.
Any one with factual knowlege, please respond.

Now that Barrick has admitted they suppressed the gold price along with JP Morgan, acting as "agents for international central banks", are they not guilty of insider trading? They evidently received insider information from the central banks . If so,why shouldn't the US government charge and prosecute them? I realize that Barrick is not in the US but JP Morgan is. Also,has the US federal reserve been implicated by the Barrick admission?

GonlyoldRef: Magister Aurelius - Return To Gold Currency#10452806/12/03; 20:25:21

Magister Aurelius said, "I'm interested in how a true gold standard where gold coins circulate as currency would be implemented nowadays."

I've often thought of the same thing; US's return to a gold currency and how would it be implemented. One way is to consider how "they" are implementing their goals: "they" just do it!

Was anyone here asked whether or not they wanted metric measuring system in the US? Most likely not. It was just done. Somebody got the idea that it was fashionable to have a "world" market and the forcing of the US people to buy both english and metric tools would be a boon to the economy. Often wondered why Europe didn't get forced into using our english measurement system.

Was anyone here asked what kind of banking system they wanted? We know the answer to that one. Anyway you get the point.

So how do we implement the gold standard? I will admit that just using gold most likely will not get it started. (But it would be an interesting effort.) I've already mentioned that a gold curency cannot be denominated in pennies. Simplistic I know, but still an important consideration. Gold and silver plus something else, which is denominated in pennies, will have to be used. So an interim step may be in order.

May I suggest NOT using credit, as it presently exists, as a stepping stone to a gold currency system? Yes, that means that the use of electronic currency will have to get at least a temporary "attitude adjustment". I don't believe people can be persuaded into giving up their convenience of transacting business over the phone. So maybe there will have to be some true gold certificates, redeemable in actual gold at any redemption center (notice that I didn't say bank), to pacify their addiction. So, to get started, just not use credit.

BTW, I like the idea of the Mexican Silver coin: letting it float; having the peso fill in the "pennies". Hm-m-m-m-m....

Cytek@ Spotlight - JPM#10452906/12/03; 20:52:00

Our banking system is so crooked and perverse the FED would have to be investigated along with JPM and both would have to go to jail, do not pass go and do not collect $200.
Dollar Bill^>^ ' '////#10453006/12/03; 21:02:53

..The Invisible Hand, congrats on your mention in the link of yesterday. Such a valuble forum in this moment of great change.
..I dont see yet how china is actually freeing the gold market. I usually read all posts, if there was some posts on it I must have obsessing on something else and missed them. There IS so much terrific postings here. China's govt did actively intrude in the spring to keep the gold price low in its local markets. They dont want to have inflation in thier gold jewelry market perhaps. Folks there use the stuff for weddings I believe. I know you didnt say it, but the fellow you qouted makes a link between the gold market today and China in 10 years. He would need to elaborate more to be more helpful in offering us insight.

The Invisible Handspotlight - JP Morgan Insider Trading#10453106/12/03; 21:24:44

I have no factual knowledge, only theoretical.
As the name, Securities and Exchange Commission, suggests, the SEC-regulations on insider trading are only applicable to securities, thus not to commodities.
I therefore wonder whether to apply these regulations to, what I would cal, the "broad gold market", you would not have to prove that (the contract for) "paper gold" is a security.
Is that possible? I don't think so, but I'm open to suggestions.

Dollar Bill-_-#10453206/12/03; 21:31:43

"That whole societal idiocy aside, gold going down in price like this, at a time like this, is like a gift from above! I would hate myself if I let this moment go by without demonstrating my award-winning dramatic performance, well, not really, but I am quite pleased with myself, and thus I call for lights! Camera! Action! And as the camera pans in, I burst upon the screen, magnificently wrapped in a flowing, purple robe, maybe some nice gold border, not too fancy, standing astride a huge boulder, gesturing with a statuesque upraised hand, with lightning flashing dramatically in the sky behind me, and I silence all my critics at a blow as I thunder with a deafening voice of controlled fury, "Fall on your knees, Pilgrims! Verily, fall upon thy knees, and offer up thy humble thanks for this great favor. Instruct thy foul tongue to say, thank you! Say thank you, gracious gold price-manipulators! Say thank you, cooperative central banks! Open your hearts and let your overwhelming gratitude be shown as you say thank you, governments! Prostrate your worthless selves and press your foreheads to the very ground and say thank you! Thank you! Thank you!" Insert a gigantic peal of lightning, fade to black, and call it a wrap. I weakly bow in response to your deafening applause. I am exhausted by the effort.

And, as I am carried out, a la James Brown being escorted off-stage by the Famous Flames, I suggest that you show your gratitude by accepting their gift, as it would be rude not to. There is a steep handling charge of about $355 an ounce, but the peace of mind is, to paraphrase the TV commercial, "Priceless."
--- Mogambo Sez: As each day goes by, I try and take a moment to look at the world as we know it, and bask in the peaceful and predictable way things are. One day it will be much different. One day soon.

GonlyoldRef. SEC#10453306/12/03; 21:57:11

The Invisible Hand said, "As the name, Securities and Exchange Commission, suggests, the SEC-regulations on insider trading are only applicable to securities, thus not to commodities."

I agree the name applies to securities. But the full name includes the words "and EXCHANGE" These are two distinct items. I wonder what the word "exchange" refers to? Could it be exchanges of gold, currencies, private and public debt, maybe even commodities?

GoldiloxSnow defends fiscal policy#10453406/12/03; 22:14:29


John Snow, the US treasury secretary, made a spirited defence of his country's public sector deficit on Wednesday, saying it was "relatively modest and certainly manageable" and less important than the "jobs deficit" and the "growth deficit".

He was questioned on the issue during his visit to Mexico City after praising his Mexican counterpart, Francisco Gil Diaz, for maintaining tight fiscal policy which limits the deficit to 0.5 per cent of GDP. Some questioners thought that they could see an inconsistency.


Snow says "Do as I say, not as I do!" What inconsistency? What emperor's clothes?

GoldiloxToo Rich and Sophisticated to Work - PruBear Guest Commentary#10453506/12/03; 22:20:49


The latest unemployment report shows the psychologically important unemployment rate holding a ?rock solid? 5.8%, even though over 450,000 workers left employment over the last two months. The number of able- bodied but unemployed workers who bother to look for something to do to feed their families is only 8.4 million. If you dig deeply into the government?s own data put together by the Bureau of Labor Statistics (?BLS?), it strongly suggests that many Americans must be far too rich to work. For example, there are 4.8 million slackers who claim they would like a job but haven?t bothered to look for one in the past four weeks (if you don?t look for work, you are not in the labor force). If these same Americans had only looked, the unemployment rate would have been 8.8%. Obviously, they aren?t looking for work because they are rich Americans who don?t really need the money to pay the bills.

In addition, there are 4.7 million Americans who have a part-time job who claim they would like a full-time job. These workers must not require a full-time job or they would go get one! Because they are working, the BLS counts them as employed. If a person works for one hour during the week, they are considered fully employed by the BLS when calculating the only number the press ever reports - the monthly unemployment rate. Just imagine if Americans weren?t so rich and started to tell the truth. What if those who have dropped out of the labor force claimed to want a job, and those who clamed to want a full-time job really needed a job, the unemployment rate would clock in at 11.9%. We are led to believe we should trust the government and their statistics, and not what everyone is telling you. Besides, the concept of needing a job is not under the BLS mandate, so the issue of needing a job is not relevant to the calculation of the Official Unemployment Rate.

. . . With the massive increases in productivity that Fed Chairman Greenspan is so proud of, we just don?t need as many Americans working. Thank God Americans are so rich! The major reason Americans are so rich is that the Federal Reserve has created a New Economic Model. They have determined that we don?t need income, because we have wealth created in the stock, bond and housing markets. While wealth in stocks is down from the top, the wealth is still double what it would be without the Fed pumping up the market. With housing prices rising smartly every year, Americans can continue to borrow more against their homes. [and they do, of course - Goldilox]

GoldiloxMore for the growing bone pile#10453606/12/03; 22:31:18

E*Trade market news


By Jim Christie

SAN FRANCISCO, June 12 (Reuters) - Network equipment maker 3Com Corp. (COMS,Trade) said on Thursday it will cut 10 percent of its work force, or about 390 jobs over the next two quarters to reduce costs amid weak demand for its products.

3Com said the decision will mostly affect employees in the United States and Europe. Within the United States, the largest impact will be in the company's headquarters in Santa Clara, California.

3Com employed 3,900 people at the end of its fiscal third quarter, which ended in February.

The company's stock was up 4 cents at $5 Thursday afternoon on the Nasdaq.

"Continued weakness in demand requires we improve the company's overall cost structure," 3Com President and Chief Executive Bruce Claflin said in a statement.

Goldilox: More C.R.A.P. cost improvements to help the bottom line.

The Invisible HandGonlyold - Securities and EXCHANGE Commission#10453706/12/03; 22:32:13

SNIP from the Sec's website:
The primary mission of the U.S. Securities and Exchange Commission (SEC) is to protect investors and maintain the integrity of the securities markets. As more and more first-time investors turn to the markets to help secure their futures, pay for homes, and send children to college, these goals are more compelling than ever.
The SEC also oversees other key participants in the securities world, including stock exchanges, broker-dealers, investment advisors, mutual funds, and public utility holding companies. Here again, the SEC is concerned primarily with promoting disclosure of important information, enforcing the securities laws, and protecting investors who interact with these various organizations and individuals.
Crucial to the SEC's effectiveness is its enforcement authority. Each year the SEC brings between 400-500 civil enforcement actions against individuals and companies that break the securities laws. Typical infractions include insider trading, accounting fraud, and providing false or misleading information about securities and the companies that issue them.
Fighting securities fraud, however, requires teamwork. ...
The IVH's conclusion: exchange refers to the exchange of securities.

GonlyoldBelief in the Government?#10453806/12/03; 23:59:26

Thank you, Invisable Hand, in citing the government reference to make your point. But I have to admit, I am having a hard time with your reply. I'm going to ask you a question similar to what Belgian asked some time ago except with a different subject: Will you please give me one resaon why I should believe in our government leaders which includes the SEC?

Seemed like once I used to have such beliefs. There was a time when I was supportive of the Federal Reserve System. I used to think that the IRA program was to my benefit. I used to be in stocks: still ahead of the game even to this day.

But I found out the rest of the story. Now I ask, give me one reason to believe that the dissertation by the SEC which you cited, is true, complete, correct, and not misleading in any way. Explain it to me so that I will not continue to wonder about the word "exchange".

GoldendomeMore on A Gold Standard? (Of Sorts)#1045396/13/03; 00:16:31

James Sinclair discusses the issue on his website linked above, in part 4 of a media presentation. If you have Windows Media Player capability, the 4 parts are both audio and visual. In the first 3 parts he discusses what he feels is needed for a real Bull Market in Gold. Those items in his opinion are:
1) The dollar declining from a discernable historic top.
2) A negative trade balance in the context of:
3) A current account deficit in excess of 5% of GDP
4) A political and Federal reserve policy to fight deflation with monetary and fiscal stimulus, to flood the markets with dollars.
5) (and this is not in place yet) We must have a declining Bond Market. When #5 arrives, it will set off a Gold appreciation much greater than we have seen to this point, with only the other 4 elements in place.

Sinclair sees the situation that the Gold Cover Clause for the currency will be re-instated to save the dollar. But re-instated in an up-dated fashion, based on the value of Gold --not the volume of gold, backing the dollar. The price of gold would rise in value with a rise in the stock of paper money. He sees some sort of an index derivitive market linking Gold price to the Dollar volume increase. This derivative index would be traded by speculators in the market place. ( I don't see how this really would solve anything myself, because isn't the link between Gold and the dollar in the hands of speculators and manipulators now on the Comex a problem? Allowing Gold to be controlled?) Sinclair, also, doesn't offer what the new cover clause price of Gold would be initially.

BelgianPolitical Solutions !!!!#1045406/13/03; 01:10:18

Last sentence in TIH's post #104525, where ex guru Leushel says as much as that the accumulated Insolvencies and Debts can ONLY be solved with * POLITICAL SOLUTIONS * hereby referring to "inflation".

Inflation = currency depreciation (and nothing else !!!) and this is a "political process" ! Conclude that "politics" create the problem and solve it. The problem of currency depreciation and solving it with "MORE" currency depreciation !!!

That's why we went from a Goldstandard > Gold dollarstandard > Gold exchange standard > dollarstandard > NO STANDARD AT ALL !!!

One does NOT need to know what these different standards thoroughly mean. There is only ONE constant in this last 100 years of standard-evolution : PERMANENT DETORIATION OF THE GLOBAL MONETARY SYSTEM(s) !

The present "no standard at all" is a system where the central banks (FED in particular) think to give evidence of their omnipotence in their perceptive creation of a standardized, stable monetary (dollar)system. In other words : We, the central bankers are as good as Gold and the Goldstandard of 100 years ago !!!-???

The massive growing insolvencies, debtbergs, defaults, profitless economies ARE NOTHING compared to the global "paperization" of real economic activity. This process of global paperization IS the political ticking time-bomb !

Maybe we should concentrate on explaining, in simple words, what exactly is "confetti-creation" !? Any takers ?

The Invisible HandScrew all governments!#1045416/13/03; 01:24:57


You are asking me to give you one reason why you should believe in "your" (sic) government leaders which includes the SEC.

You should NEVER believe government. Government earns its money through taxation whereas the thief doesn't come back periodically, neither does he (the thief) pretend to be stealing in the general interest.

As to the SEC, it should be abolished immediately (if possible with retroactive effect – how to achieve that retroactive effect is another question) as the market is perfectly able to perform the functions which the SEC bureaucrats are supposed to perform at taxpayers’ expense.

Spotlight's question was however how to turn the SEC rules against the government's accomplices, i.e., in this case, JP Morgan/Chase. Just as I advocate the immediate abolition of the SEC rules as they are applied to honest businessmen, I think it's only fair those rules be, in the meantime (and thereafter also) applied to the bureaucrats (and their accomplics) who screw society.

Why you should believe government? Of course, never believe government. Although the rule of law is indeed an illusion, government has however to maintain a kind of facade. Now if you back to the SEC's website, you will find on
that the SEC was instituted by the Securities Exchange Act of 1934.

The site continues:
With this Act, Congress created the Securities and Exchange Commission. The Act empowers the SEC with broad authority over all aspects of the securities industry. This includes the power to register, regulate, and oversee brokerage firms, transfer agents, and clearing agencies as well as the nation's securities self regulatory organizations (SROs). The various stock exchanges, such as the New York Stock Exchange, and American Stock Exchange are SROs. The National Association of Securities Dealers, which operates the NASDAQ system, is also an SRO.
The Act also identifies and prohibits certain types of conduct in the markets and provides the Commission with disciplinary powers over regulated entities and persons associated with them.
The Act also empowers the SEC to require periodic reporting of information by companies with publicly traded securities.

If you're still not convinced, you can look the text of that Act in a Law library or on the web. I have given you the link above. Read that and if you still have any doubts, I will be happy to assist you.

Black BladeGold Bugs Get Their Answer#1045426/13/03; 02:08:09


Gold bugs have for years contended that the price of gold has been manipulated by bullion banks in cooperation with the central banks. Based on the admission of Barrick's attorney, it appears the central banks are indeed very much involved if only to assist in Barrick's defense.

Black Blade: OK, one more time.

AristotleAnswering Topaz#1045436/13/03; 02:46:09

Hi mate. I guess I didn't stitch my words together very well if I left you scratching your head (as you say, "I'm unable to distinguish between Debt (IR's)...and Credit (Bond Yield).")

Since I was talking about the Federal Open Market Committee policy directive (i.e., bankerspeak for fed funds target) as compared/contrasted with the European Central Bank Governing Council's main refi minimum bid, it was the near cash market (hence, overnight IRs) that I was especially focusing on in my post when I said, "For a moment, fancy yourself a big-time financial agent with massive supplies of dollars and euros at your disposal. If the going overnight market rate were...etc etc etc"

So you see, it was the overnight dabblings in the likes of fed funds and EONIA that I was drawing upon to color my hypothetical big trader's world in the near neighborhood of the central banks, not *not* the more far out credit/bondyield thingie that ought *ought* to represent the market boys factoring in their concurrent exchange rate expectations.

I stress *ought* because you'll note that Fed VP Ferguson told/reminded the world that same day (Wednesday) and not for the first time that "a central bank could expand its open market purchases of longer-term government securities, in sizable quantities if necessary, to drive term premiums lower..." I'll bet anyone that follow's Townie's Fed reports can tell us what effect that sorta thing would have on bank reserves and money supply. To(ward) the moon, Alice! That might qualify as a partial answer to Belgian's #104540 appeal for takers on the meaning of "confetti-creation" although, alas, not in the hoped-for "simple words."

If that's not enough, try Fergie's follow-up on for size. "Alternatively, as economists have long recognized, a central bank could [...] operate in the forward interest rate market. If such actions were successful, yields on longer-term government securities would decline. Through arbitrage across financial instruments, yields on longer-term private instruments, such as corporate bonds and home mortgages, would likely follow suit." Nice and roomy, ain't it? But it comes with a confidence warning:

"Such a situation would give rise to a risk that the targeted security might become disconnected from the rest of the yield curve and private interest rates,"
i.e., that is to say "disconnected from the *real market*." Does that sound familiar to some of the *paper*Gold refrains a few of us have long been singing about around here? Yesssss!!! The chorus grows stronger as more people may now begin to understand/accept the meaning and possibility of it all. That is to say in parallel: paperGold goes isolated down while metalGold goes distinctly up!

Gold. Get you some. --- Aristotle

ToolieDollar Bill#1045446/13/03; 02:55:32

Thank you!
Belgian@ Goldendome#1045456/13/03; 03:17:16

Sinclair is simply twisting around : A FREE PHYSICAL GOLDMARKET ! And he would like it to be a *dollar*-goldmarket in order to save the dollar ! Analyse the meaning of the Gold Cover Clause and make your conclusions about the probability of such a (political) initiative !?
TopazAri. All.#1045466/13/03; 03:55:25

There's a nice coincidence, open my favourite Forum and am greeted by an Ari post (to mois!!).
Yes indeed my Friend, enough to put the wind up any old Capitalist eh? Mr Fergusons "threat"...and I believe that's all it was, (although they may even now be covertly doing just that) ,opens the door to massive repos and consequent Hyper if done in the open...buying the Curve...woooo!
Raises the spectre of a concerted (in concert) Western Bloc CB assault on the combined accumulated private Dollar-holder Capital...Do you think they'll try to force a Euro transition...OR collapse it out of spite?

The Link (via Kitco) is as good a look at where we are as I've seen, Shostak does good imo.

TopazGandalf...and Ari (again)#1045476/13/03; 04:19:10

Oh Gandy! it's Friday the 13th...AND a Full Moon...are those Mutts of yours securely tethered??
My prior reply neglected to thank you for your concise explanation of the post referred to. An omission I can put down to the fact that it is Friday eve here in Oz...and I AM sufficiently imbibed <hick!%>

BelgianIndeed Ari....#1045486/13/03; 04:47:07

Your correct diagnosis " * DIS-CONNECTION * ! And oh dear, to what an enormous extend and multitude.
The cure to "re-connect" will inevitably be a political one.
Unexpected and schocking ! Gold will be part in/of it, directly (Free Gold) or indirectly (Devaluations).

Snow thought it necessary to reconfirm dollar-strength policy...whilst Wim was reconfirming euro-policies !

BelgianHow "they" want it for the next 6 months....#1045496/13/03; 05:11:18

- FED IR cut by 0,5 % to 1,25% - 0,5% = 0,75% !!!
- Euro - dollar up to 1,20 - 1,25 !!!
- POG up to 360$-370$ (Why not 380$-390$ in the allowed overshooting) !!!
- Stockmarket consolidation !!!

And here it comes... : All should short Gold at the next uptick, and...GOLD HAS NO PLACE IN ONE'S PORTFOLIO...!!!

The dollar-standard Oracles have spoken ! Remain more dis-connected, further down the road, ALL TOGETHER NOW ! Up until we "HAVE" to surpise you with the coming "HYPER_INFLALADIDA" !

Ohhh,.... what a fine orchestra !

You are being guided by ...thieves, Yep, self proclaimed, bening, Robinhoods.

TopazJust for fun, print these and WATCH!#1045506/13/03; 05:28:49

The e-trading shows Bonds firing again (Yield lower)...should drag $ lower (Gold up)... both yet to react.
Do CB's control the Markets? Does a Chicken lay an Egg?

SproutThis is only a#1045516/13/03; 06:59:11

Socrates964JPM derivative honcho to head FRE/FNM regulator#1045526/13/03; 07:57:58

One thing I admire about the Bush administration is their consistency.....

White House Sends OFHEO's Brickell Nomination To Senate
Thursday June 12, 5:13 pm ET

WASHINGTON -(Dow Jones)- After months of delay, the White House hurried to the U.S. Senate Thursday the formal nomination of a new director of the federal agency that regulates Freddie Mac , just three days after the company booted its top executives over problems with its accounting practices.
The White House tapped Mark Brickell, a former managing director for J.P. Morgan's derivatives group, to replace Democratic-appointee Armando Falcon at the Office of Federal Housing Enterprise Oversight just as the agency comes under fire for mishandling possible accounting misdeeds at Freddie Mac.

OFHEO is Freddie Mac's and Fannie Mae's safety and soundness regulator.

Brickell has more than 25 years of risk-management experience and a keen understanding of the way Fannie and Freddie do business.

Brickell's nomination has languished since the White House announced it in early February. The Senate Banking Committee has to vet all financial regulatory nominees, which also need confirmation by the full Senate.

Committee spokesman Andrew Gray said the committee's Chairman Sen. Richard Shelby, R-Ala., will schedule the nomination hearing as soon as Brickell completes a committee questionnaire and some other related materials.

"When they have their paperwork completed with the committee, we move expeditiously to process nominees," Gray said, adding that a hearing could be scheduled within the month. "It depends on when he's able to get his committee questionnaire and statements" finished.

Although Brickell has spent some time in Washington lobbying for J.P. Morgan, most his career has been on Wall Street. He is currently the chief executive of Blackbird Holdings, an electronic trading system for derivatives contracts.

Brickell also chaired the International Swaps and Derivatives Association from 1988 to 1992.

By comparison, Falcon has spent his entire career in Washington, working as chief counsel on the House Banking Committee for almost 10 years before taking over OFHEO in 1999.

The decade-old agency has been pegged in the past as a cheerleader for the companies it regulates and as an underfunded and ineffective disciplinary against the two most powerful mortgage companies in the U.S. Fannie and Freddie own or guarantee 45% of all outstanding residential mortgages in the U.S. Their combined mortgage portfolios are valued at more than $1.2 trillion, and the combined value of the mortgage-backed securities they guarantee for other investors is $1.5 trillion, according to OFHEO.

Lawmakers have been especially critical of OFHEO's handling of Freddie's recent accounting problems, which is now the focus of a federal criminal investigation. The agency signed off on a report last week that credited Fannie and Freddie for their strong management and internal controls - only to cite weaknesses in those areas three days later when the Freddie admitted to employee misconduct tied to its accounting woes.

-By Dawn Kopecki, Dow Jones Newswires; 202-862-6637; This email address is being protected from spambots. You need JavaScript enabled to view it.

Cavan ManGood morning Vietnam!#1045536/13/03; 08:01:37

Dozens of Iraqis killed in battles with US forces
13 June 2003

American forces killed 27 Iraqi fighters in a ground and air pursuit today after a tank patrol north of Baghdad came under attack.

US Central Command said an "organised group" ambushed the tanks with rocket propelled grenades in Balad, about 35 miles from the capital. The statement made no mention of US casualties.

The patrol returned fire and killed four of the assailants in the initial gunbattle, the military said.

When the rest of the attackers fled, Apache helicopters joined the chase along with tanks and Bradley Fighting Vehicles, killing 23 more assailants.

The attack was another indication of increasing resistance to the American–led occupation of Iraq, since the war was declared over on 1 May.

Since then, about 40 Americans have been killed

Cavan ManRepost#1045546/13/03; 08:03:35

Cavan Man (06/12/03; 07:53:16MT - msg#: 104510)
"We are strong......we are united"
Just in case, make mine GOLD.
Duisenberg- little chance G8 economic cooperation
Reuters, 06.12.03, 7:55 AM ET

BRUSSELS, June 12 (Reuters) - European Central Bank President Wim Duisenberg on Thursday said there was little prospect for international cooperation to address pressing global economic problems.

Asked by European Parliament committee members about the need for international cooperation to tackle problems such as the burgeoning U.S. current account deficit, Duisenberg said there was little inclination among Group of Eight (G8) countries to cooperate.

"I am not present at the G8, but I know the attitudes on both sides of these two oceans and I see little practical possibility to really cooperate or coordinate in the field of economic developments," he said.

Europe would be on its own in facing problems such as the price and exchange rate adjustments implied by the rebalancing of the U.S. current account deficit, which is approaching five percent of U.S. gross domestic product.

Yet Europe was not helpless, Duisenberg said.

"We are a factor not to be ignored in the world. We are strong and at least economically, we are united."

a nation of onespeaking of the emperor's clothes, ....#1045556/13/03; 08:50:10

I like Jim Sinclair's writing style, and I'm sure he is a fine person. I visit his web site most days. Often what
he says rings a bell. But really, if someone is in the business of giving advice and making predictions,
shouldn't the advice and predictions be correct once in a while? I am sure there are 125 reasons why POG
hasn't gone to 408. But shouldn't a predictor know that there are 125 reasons why it won't go there?

alkahulikBlack Friday#1045576/13/03; 09:41:51

When Black Friday comes.
I be selling my stocks and buying gold.
I wont stop until all my Telecom's are sold.
The talking heads, I wont listen to ya.
Cause I can see right through ya.
Sure don't want to be selling you my soul.
When Black Friday comes I'll have the means.
Cause I'll be counting my gold beans.

BelgianCavan Man's repost : Duisenberg and G8#1045586/13/03; 09:48:42

Decodation of his message (attitude) : The dollar and the euro are on their own and we (ECB) support or don't support (cooperate with) the dollar and dollar-policies, only at our own euro-convenience.

Why else does the dollar wants the euro to follow (in lockstep) the dollar-IR down to zero !?
Funny, that this is not expected/demanded from the dollar's UK, willing partner (pound-3,5%)!?

FED and ECB, two different animals as are both economies.
Consequently, monetary policies and management of Goldreserves must be different !

Gandalf the White*** WELCOME ***, Sir Sprout !! #1045596/13/03; 09:49:18

Sprout (6/13/03; 06:59:11MT - msg#: 104551)
WELCOME to the TABLEROUND Sir Sprout !
Pull up a chair next to me.
We all await your next posting.

Gandalf the WhiteTHAT was PERFECT !!, Sir Socrates -- A fox in charge ot the Henhouse !#1045606/13/03; 10:13:14

Socrates964 (6/13/03; 07:57:58MT - msg#: 104552)
JPM derivative honcho to head FRE/FNM regulator
One thing I admire about the Bush administration is their consistency.....
THANKS Sir Socrates !! Question ---
Do you also think that Mr. Brickell's first directive to FRE will be to buy MORE DERIVATIVES, from BLACKBIRD HOLDINGS ? --- OR, sell, unwind, and terminate some of the existing DERIVTIVES at a loss through BLACKBIRD HOLDINGS ?

WASHINGTON -(Dow Jones)-
The White House tapped Mark Brickell, a former managing director for J.P. Morgan's derivatives group, to replace Democratic-appointee Armando Falcon at the Office of Federal Housing Enterprise Oversight (OFHEO) just as the agency comes under fire for mishandling possible accounting misdeeds at Freddie Mac. OFHEO is Freddie Mac's and Fannie Mae's safety and soundness regulator.

Brickell is currently the chief executive of Blackbird Holdings, an electronic trading system for derivatives contracts.
NAW !!

Gandalf the WhiteNICE $5 move there SPIKE and SPOT !!!! --- KEEP JUMPING !! #1045616/13/03; 10:20:29

Looks as if SPIKE and SPOT are ending the week in the right direction !

SproutThank you for welcoming me to the TableRound Sir Gandalf #1045626/13/03; 10:28:01

I'd like to also say Thank You to the Fine People here at USAGOLD for setting up this marvelous Round Table to discuss Past, Present and Future ongings in our
(Gold) World, and Second to the Truly Remarkable People that visit here to fill our heads with such Knowledge!

Would also like to add that I have been a Lurker of this site for a few years now and was wondering how in the ? I would even fit in. (It seems this is the Only Place, I do fit in) imo
On that note:

I saw Tony Blair in France the other day with Jacques Chirac.
Tony Blair was quoted as saying:

"Britain's future lies in full-hearted membership in the EU"

Also earlier in the week - OPEC stated its continued support for the Dollar, but also hinted? at working the Euro into use.

Now these two comments sent my Brain into Overdrive.

Is it possible that Both, OPEC and the UK (Tony Blair) support the Euro, but would rather let the Dollar kill itself, rather than be the ones that actually stick the Dagger into the Dollars Heart, and also at the same time Signal they were ready to Jump Ship if needed?

And if I may stretch this out a bit without expressing to many Thoughts at one time,
I'll call it Pent up Thoughts. ;)

Reference Antal Fekete's Quartermasters of Inflation piece.
It appears to me, that the Bond Speculators have Milked that Cow Dry!
Am I way off base on this?


Socrates964Gandalf#1045636/13/03; 11:18:10

"THANKS Sir Socrates !! Question ---
Do you also think that Mr. Brickell's first directive to FRE will be to buy MORE DERIVATIVES, from BLACKBIRD HOLDINGS ? --- OR, sell, unwind, and terminate some of the existing DERIVTIVES at a loss through BLACKBIRD HOLDINGS ?"

Socrates knows nothing as ever, but suspects that he'll get FNM to do the former and FRE the latter. That way, assuming that FRE cracks first, he can claim that FNM a) is in a different line of business to FRE and b) only started to take on new derivative positions after it got the all clear from the regulator.

USAGOLD / Centennial Precious Metals, Inc.Our Latest Buyers’ Group Special . . . featuring BULLION!#1045646/13/03; 11:57:57">Gold Buyers Group Special
Belgian@ Sprout#1045656/13/03; 12:04:48

Tony went to Chirac ! Chirac didn't go to Tony. Significant difference. British soldiers are on a very low profile (almost invisible) in Iraq in contrast with their American allies. An example of how the UK, maneuvers to keep doors (gates) "open". Think you guessed it right about the UK's, ambigious, attitude versus the dollar-euro evolution.
The UK "will" jump into EMU (EU) when the dollarship is making water and risks capsizing.

Fekete has it right on his Bond-IRs theories ! Is the Bond cow dry ? One can theortically continue to halve the IRs on and on...0,75...0,35...0,17...
Coerced, Endless de-connection. Building the base for future *PRICE* Hyper-inflations, that might evolve into the coup de grace for the dollar (reserve). Re-connecting with the reality...rising interest rates will cause a disaster if the global economy (THE PROFITS) hasn't given evidence of revival.

Wellcome on board, Sprout.

Cavan ManEU vs. US#1045666/13/03; 13:03:25

Subject: Hydrogen and renewable energy

EU is moving agressively ahead. Conference in Brussels this coming week. Their "roadmap" will be unveiled. Focus is on renewable/sustainable. In stark contrast, US has yoked hydrogen to fossil fuels; creating hydrogen from fossil fuels rather than renewable sources. I'm not in a position to comment one way or Another. I simply wish to underscore the fundamental differences separating the two continents rund far and wide.
Gandalf the WhiteWOWSERS !!! --- Looks like a new closing LOW for the US$ !!!#1045676/13/03; 13:11:05

My Crystal Ball says NEXT week should be "VERY INTERESTING" !!

Black BladeStock Market Recovery#1045686/13/03; 13:34:59

Well whaddya know, it looks like in spite of very grim economic data and earnings warnings (not to mention daily corporate scandals), we once again have a last hour equities rally. What's this now, a last hour rise in 15 of the last 16 trading sessions? And on either no positive news or even gruesome economic data. Very "interesting" indeed.

- Black Blade

R PowellGandalf's answer and COT report#1045696/13/03; 14:44:27

I can now safely disclose that the answer (short term as in one day) to yesterday's question is "X". I wasn't holding out on you, honest, I would have told you this yesterday but I didn't know.

I like that X and O form of timeless charting. It clears some of the clouds out of the picture. Impatience is the cloud maker.

The link is to the COT report for those who have an interest in such.
Happy Weekend !!

GoldiloxHydrogen and renewable energy#1045706/13/03; 14:52:04

@ Cavan Man

Interesting timing. Willian Clay Ford was on CBS this morning talking about Ford's commitment to Hydrogen, Fuel Cell, and Hybrid technologies. Is he letting slip the idea that the big guys KNOW oil supply is temporary.

Get your home solar converters and gold today!!!!

Tony's mention of Britain's future in EU - He may know it's true, but he'll drag his feet as long as Big Oil supplies them and allows the pound to keep interest rates relatively high by world standards.

TownCrierApril U.S. trade deficit at $42 billion, on annual pace to $492 billion#1045716/13/03; 14:54:55


WASHINGTON -- The U.S. trade deficit declined slightly to $42.03 billion in April, after setting an all-time high in March ($42.87 billion)...

But even with the small improvement, America's trade deficit through the first four months of this year is running at an annual rate of $491 billion, far above last year's record deficit of $418 billion.

Bush administration critics point to the soaring trade deficit as evidence that the president's policies of pursuing free trade deals as a way to boost America's global competitiveness is not working. The critics say a flood of imports has cost millions of lost American manufacturing jobs.

The administration has also made a subtle shift in its policy of supporting a strong U.S. dollar, signaling to markets that it does not believe in using government intervention in currency markets to stem the dollar's decline.

U.S. manufacturers have been pressuring the administration to make the change as a way of helping lower the dollar's value against other currencies and thus boosting their competitiveness in overseas markets. A weaker dollar drives up the cost of imports for American consumers but it makes U.S. products cheaper in foreign markets.

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

With the conclusion of primary military action in Iraq, the April U.S. import levels where kept somewhat in check by the largest monthly decline in crude oil prices (down $4.25) since the 1991 Persian Gulf War. However, the volume of crude imported was the second-highest level on record, for an import bill of $11.21 billion for crude. The trade deficit with OPEC reached a record $5.03 billion. The largest trade deficit with a single country, China, climbed 25% on the month to $9.45 billion.

Overall imports of goods and services were $123 billion set against U.S. exports of $81 billion.

When they buy our goods with a surplus of their own goods, what need do they have for the dollars we use to provide the balance of trade -- if not for use as a reserve asset?

Don't you think it would be a good plan to acquire your gold in advance for such a time if they ever rethink the wisdom of this lop-sided wealth-transfer arrangement?

Gold is a universal good, so play the part of the independent nation; "import" it cheap now and then "export" it dear if you have to.


misetichMilberg Weiss Announces The Filing Of A Class Action Suit Against Barrick Gold Corp. on Behalf of Investors#1045726/13/03; 15:02:10


The complaint charges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of materially false and misleading statements to the market between February 14, 2002 and September 26, 2002. For example, throughout the Class Period, Barrick assured the markets that it was improving its operations by keeping its production costs in check and that the Company expected to earn $0.42-$0.47 per share in 2002, even taking into account the phasing out of several mines and decreasing ore quality (which increases costs) in several of its mines. These representations were materially false and misleading, according to the complaint,

ABX the target again. This mega hedger bank ...OOps .. miner... is lucky not to have more suits lodged against them by gold investors as a whole for Barrick's self admitted role as an agent of central banks in depressing gold prices expressed in US $...

On the other hand perhaps physical gold accumulators should thank Barrick for enabling them to pick up gold at these low prices

Thank you Barrick! and thanks for keeping a floor on the present gold market as you attempt to cover !

All On Board The Gold Bull Express

GoldiloxIs Martha Stewart a political prisoner?#1045736/13/03; 15:03:25


*** Martha, it seems, had a feeling the 4,000 shares she owned in ImClone were going to she put in a sell order on them. She claims she placed the order before her pal Sam Waksal - former scientist and CEO of ImClone, now convicted felon - told her anything about the company's balance sheets. At first, her broker backed her up - then he rolled over.

At least, those are the details as far as we can tell by sifting through the drivel that portends to be the news these days. For all we know, she may have added too much yeast to a bunt cake, and served it to the wrong people. But something disturbing this way comes.

For their part, the SEC has not accused the matron of Maytag of "insider trading," a charge that may have been warranted were she to have actually peeked under the hood at ImClone. But they do charge her with "obstruction of justice"...for what? For mounting her own defense? We don't know.

But a NYTimes piece quotes a former attorney for the SEC: "The deterrent effect is immeasurable. Even if the government puts a thousand hours into building this case against Martha Stewart, the risk-reward ratio is enormously positive and constitutes a very prudent allocation of government resources."

"One cannot discount the role of politics here," writes William Anderson, an adjunct professor with the Mises Insitute. "The government is seeking to make her into a political prisoner. It is politics, not the pursuit of justice, which is driving this case...Her wealth and public persona make her a convenient target of a very political U.S. Department of Justice, and of U.S. attorneys who see the example of the Guiliani path to fame and fortune.

"In the end, we are likely to have a well-known person owning a felony record and being sentenced to prison or, at best, receiving a suspended sentence or probation," Anderson continues, "and a once-prosperous company in tatters. Oh, and we will see some federal prosecutors being fundefinedted as though they had just solved the Case of the Century. These are dark times, indeed, for the pursuit of justice in the United States of America."

Dark times, indeed...dark times.

Addison Wiggin


While all the $Bn ENRON energy thieves party on in the white house, Hillary let it drop in an interview yesterday that Martha was a close friend. Supposedly, her indictment is NOT for ImClone insider trading, but obstruction of justice, claiming her denial of culpability was designed to manage the price of her own company stock. If this is true, perhaps we should indict TPTB for their continued support of the "Strong Dollar Policy". It's obviously designed to sucker the sheeple into believing there is hope for the dollar's reversal.

misetichMoody's Cuts GM Ratings, May Cut Again #1045746/13/03; 15:33:28


"The downgrade ... reflects Moody's expectation that the intensifying competitive environment in North America, in combination with large pension and other post-employment benefits (PEB) funding obligations, will result in the company's automotive earnings, cash generation, and debt protection measures remaining weak through 2003," the credit ratings agency said in a statement.

It said the negative outlook reflected concerns that the competitive U.S. environment could intensify further, and that weakness in the U.S. economy and consumer sentiment could extend well into 2004, causing GM to fall short of its operating and financial targets.

Another example of overcapacity as the REAL unemployment numbers show up in decelarating consumer spending -

Those pension plans underfunding is beginning to hit home.

All On Board The Gold Bull Express

GoldiloxYour papers, please?#1045756/13/03; 15:34:11



Americans who, five years ago, were so incensed at Bill Clinton's perjured testimony that impeachment proceedings were brought, now exhibit a willingness to be lied to about matters of far greater concern than oval office shenanigans. As the Bush administration continues to pile lie upon lie, it is evident that most Americans are completely indifferent to the purposes for the attack upon Iraq. I suspect that, if Bush and his fellow war conspirators were to publicly announce that the Iraqi invasion was deigned for no other purpose than to put money into their pockets, most Americans -- led by their electronic cheerleaders on talk-radio and cable television -- would praise them for showing "ambition" and "leadership!"


Butler Schaffer's scathing indictment of a civilization's decline into warrior mentality. He calls the 20th century "the holocaust century" with over 200,000,000 slaughtered in the name of God and nationalism. Interesting food for thought.

Black BladeFed Is Creating Golden Opportunity #1045766/13/03; 15:51:23


Whereas equity and fixed-income traders foresee only positive outcomes from the Federal Reserve's aggressive monetary policy, gold advocates see Alan Greenspan behind the wheel of an out-of-control vehicle headed for a steep turn. Where equity optimists spy salutary effects of a weaker dollar, gold bulls envision a crumbling currency leading to higher inflation, buoying the yellow metal.

Black Blade: Each day it appears that the dollar heads toward the abyss as the Fed desperately struggles to stimulate economic growth. Looks like a losing battle so far.

axSinclair Gold Standard: Needs an Extra Boost#1045776/13/03; 16:23:43


Goldendome (6/13/03; 00:16:31MT - msg#: 104539)
More on A Gold Standard? (Of Sorts)

James Sinclair discusses the issue on his website linked above.......

.....Sinclair sees the situation that the GOLD COVER CLAUSE for the currency will be re-instated to save the dollar. But re-instated in an UPDATED FASHION, based on the VALUE OF GOLD --NOT the VOLUME of GOLD , BACKING the DOLLAR. The price of gold would rise in value with a rise in the stock of paper money. He sees some sort of an index derivitive market linking Gold price to the Dollar volume increase. This derivative index would be traded by speculators in the market place. ( I don't see how this really would solve anything myself, because isn't the link between Gold and the dollar in the hands of speculators and manipulators now on the Comex a problem? Allowing Gold to be controlled?) Sinclair, also, doesn't offer what the new cover clause price of Gold would be initially.

COMMENT: This is all well and good but the total value
of the U.S. gold reserves backing the U.S. Dollar is:


The sensible thing for the U.S. Government to do in order
to boost the value of US Gold Reserves is to INCREASE



ax (06/12/03; 15:08:42MT - msg#: 104523)
No Real GOLD STANDARD : But USA can come CLOSE

Realistically, paper currencies are here to stay. There is no hope that the USA will ever return to using physical gold
as currency.

BUT - the USA can come closer to this than it is now.
HOW? The USA Treasury must buy all the physical gold it can
get access to. The small 8000 ton USA gold reserve needs
to be drastically increased. During World War II and in the
immediate post war years, the US had a much larger gold reserve tonnage. WHY cannot the US Treasury get some of this back?

What are the sources?

1. Bullion dealers located in the United States
2. Gold Mines located within the United States
3. Non U.S. Central Bank Gold up for sale -
for example - Swiss Central Bank Gold, Portugal,
etc. -- or any other Central Bank that is foolish
enough to sell

4. Gold from mines located outside of the United States

5. Speculators, Comex, and

6. All other sources

The United States wants a stable currency or a "strong"
dollar? This is how you start.


Aristotleax ax ax...#1045786/13/03; 17:57:07

We've been through this before, what part of "It can't work" don't you accept?

Listen, if we (U.S. Treasury) tried to buy Gold according to your remedy, we'd destroy the international value of the dollar almost instantly. It wouldn't just backfire, it'd be the mother of all backfires.

Gold. Get *you* some. --- Aristotle

Goldendome@ Ax your reply on Sinclair#1045796/13/03; 18:06:52

Yes, Sinclair (like everyone else) has his opinion on what will eventually happen, and his indexed derivative paper link to Gold in some manner may be just another Fairy Tale. I don't presume to have the slightest idea as to any accuracy in his opinion. I do find it somewhat humorous, however, that in any of his discussions that I have read or listened to, he ALWAYS trots out, that he sold out gold right at the peak in 1980 and bought into bonds right at their bottom. If I had done it, maybe I would keep bringing it up also. I have noticed that he keeps wanting to call the market to within 10 cents of some figure all the time though, and I'm not sure that helps his current credibility. Maybe he walked the walk twentyfive years ago and keeps bringing it up as he talks the talk. If you have Windows Media Player though, his dicussion on the elements needed for a raging Bull Market in Gold is interesting. He is a detailed and practiced speaker. Thanks for the feedback! --------Gdome
axUS TREAS GOLD: WAS SOLD IN THE 60's: WHY NOT BUY BACK?#1045806/13/03; 18:15:51

ARI: The U.S. Treasury sold gold after World II down from
a tonnage that was over 20,000 metric tons, to what we have now, just somewhat over 8000 metric tons.



WE are talking about a long term benefit, and an absolute,
not relative, strength.

Aristotle (6/13/03; 17:57:07MT - msg#: 104578)
ax ax ax...
We've been through this before, what part of "It can't work" don't you
Listen, if we (U.S. Treasury) tried to buy Gold according to your
remedy, we'd destroy the international value of the dollar almost
instantly. It wouldn't just backfire, it'd be the mother of all
Gold. Get *you* some. --- Aristotle
ax (6/13/03; 16:23:43MT - msg#: 104577)
Sinclair Gold Standard: Needs an Extra Boost

axGoldendome: Predicting the Gold Market #1045816/13/03; 18:35:00

reference: AX / Goldendome recent messages

Hi Goldendome:

I agree with you. The gold or any other market is very
difficult to predict and those of us who do predict it and
act on that prediction, make alot of money.

I have been working on this for many many years and have
not been very successful.

Many market analysts often say: the market will have gone up or down when it has gone up or down. This is indisputable, but can you make money with this hindsight?

As for the United States, I just think it would be in its
best interest and that of its citizens if it would fortify
its treasury gold reserves. This is all I am saying.
Whether or not it will do this, I cannot say.
I do not think, however, that such a move would destroy the
US Dollar ( because that it would be bad for all of us )
but rather, would ultimately make it stronger.



Aristotleax selling/buying#1045826/13/03; 18:47:22


Before you hitch your future to this wagon, first ponder the fuller (and more meaningful) context of the actions and motivations of the 1960's London Gold Pool.

If we (the U.S. Treasury) started to buy Gold, do think China would happily sit for very long, with all of its dollar hoard across the Pacific, clapping their hands saying "Oh, goodie! The U.S. is buying Gold, and by proxy now we don't have to!"????????

If we print so much as *one* dollar with which to buy Gold for the official coffers, I think it'll all come undone.

Simply put, getting Gold is just one of those things that you gotta do for *yourself*. As much as you might like to think it, the government can't be your nurse maiden from cradle to grave, ya know...

Gold. Get you some. --- Aristotle

The Invisible HandSaturday morning surfing notes#1045836/13/03; 18:54:11
The explosive growth in derivative and bond markets finds its justification in the idea that it spreads risk in a way that makes the wider economy less prone to shocks and the ups and downs of the business cycle. Yet another way of looking at the same phenomenon is that financial risk has been bought up wholesale by areas of the market with no proper understanding of it, thus exaggerating the boom and the subsequent bust by persuading investors to fund uneconomic activity.
Whatever the truth, the view that economic prosperity has been kept safe by all those clever investment bankers with their derivatives and corporate bond products looks an unreliable one. There's been no banking crisis, but there has been the most terrible crisis in the savings market, the long-term consequences of which we can still only guess at.,,630-712749,00.html
The price of oil on world markets fluctuates wildly. For example, there was a sharp upsurge earlier this year ahead of the Iraq War. But the prices quoted to you as you buy on the forecourt are again stable. No one goes out each day to change them at the pumps to reflect whatever Brent crude is trading at. Again, hedging is used, although any long-term trend must eventually be reflected on the forecourt.
The first crude oil to come out of Iraq after the war was yesterday awarded to a surprisingly international group of oil companies.
The six companies which won part of the shipment were Spanish refiners Repsol and Cepsa, TotalFinaElf from France, Tupras of Turkey, Italian ENI and US major ChevronTexaco.
Despite French opposition to the war, TotalFinaElf was awarded 2m barrels. A total of 52 companies bid for the crude, but three companies were disqualified for not being refiners
The Predictor's Paradox:
The impression made by an accurate prediction
is more a function of the reader's ignorance,
than of the writer's ability to predict.

DruidNolan Shines#1045846/13/03; 19:25:57

The Way We Were:

Traditionally, the monetary system was a Decentralized System Dominated by Local Bankers. Bankers operated with a prudent, "Loans for the Long-term" perspective. Gain on sale accounting and marked-to-market did not exist. It was a controlled banking/monetary system. Loan growth was limited by reserve requirements and there was a limited supply of loanable funds. Supply and demand for these limited funds dictated interest rates, with the price of Credit a fundamental stabilizing force. Credit Availability was generally dictated by business profitability and the expected return on investment.

Bank deposits were the primary liability created during the lending process. Or, stated differently, deposits were the major monetary IOU issued during financial sector expansion. Hence there was a strong correlation between "money" supply, the general Credit environment, and economic performance.

Within this monetary regime, the Federal Reserve governed currency expansion and the payment system. The monetary system was anchored by bank reserves. The Fed carefully controlled these reserves that were "multiplied" during the lending process into new deposits. Management of bank reserves was basically control over system liquidity and the broader financial environment.

The economy could be analyzed as an Industrial Economy. Goods-producing industries were at the epicenter of the economic system – the horse pulling the financial and services carts. Financial expansion paralleled GDP expansion, or stated differently, the expansion of financial claims was largely matched by the expansion of production capacity. The trade position was normally balanced. Excesses were temporary and largely self-correcting.....

Druid: In my opinion, a giant in analyzing credit markets shined recently in a rare speech.

21mabryVIETNAM#1045856/13/03; 21:29:26

Many in the world view China as the emerging economic powerhouse of the world.With rising standards of living come resentment at working lower paying jobs.With a growing prosperous China could a country like Vietnam be in a position geographicaly to prosper from Chinas economic growth, much like Canada and Mexico have prospered from their proximity to the U.S.Maybe there are other countries in that region that could also prosper, a free North Korea with its large population of workers could prosper also.Maybe countries like these will offer above average investment oppurtunities in the distant future.21
a nation of one...#1045866/13/03; 21:48:17

If a prediction is stated in a reasonable way,
the reader's impression will be correctly formed.
This does not rely on the reader's perception,
so much as on the predictor's ability to correctly state his prediction.

Of course if the work of predictors belong in the same category as the works of Monet and Renoir,
then that would be different.

Black BladeEIA: NATURAL GAS PRICES TO STAY HIGH#1045876/13/03; 22:17:02


Chemical producers are facing the prospect of high natural gas prices for the rest of the year, which will likely prompt more plant shutdowns, analysts say, according to Chemical Week magazine. Natural gas spot prices at the Henry Hub have been above $5/million Btu since the beginning of the year and have been above $6/million Btu for the past several weeks. The Energy Information Administration (EIA; Washington) expects natural gas prices to average an "unseasonably high" $5.50-$6/million Btu for the rest of the year, because of low inventories.

Black Blade: This is what is needed – plant shutdowns. That could help with the NatGas supply problem if we have enough energy intensive industries closing up shop. If we are fortunate enough to have a severe crippling economic recession along with mild temperatures we just might scratch by with a tight NatGas supply in storage next winter.

Black BladeHydrogen Leakage Could Expand Ozone Depletion#1045886/13/03; 22:22:56


PASADENA, California, June 13, 2003 (ENS) - Hydrogen is generally considered an environmentally friendly alternative to gasoline as a transportation fuel, but new research indicates that leakage of hydrogen gas could cause problems in the Earth's ozone layer. In an article appearing this week in the journal "Science," researchers from the California Institute of Technology (CalTech) report that the accumulation of leaked hydrogen gas resulting from a hydrogen economy could indirectly cause as much as a 10 percent decrease in atmospheric ozone.

Black Blade: Well that's not good. :-)

Gandalf the WhiteTHANKS, Sir Rich for the "X" CONFIRMATION and the COT report ! <;-)#1045896/13/03; 22:35:32

R Powell (6/13/03; 14:44:27MT - msg#: 104569)
Gandalf's answer and COT report
In the GOLD Pit --
Looks to the Hobbits as if the COMMERCIALS picked up a little over 4,000 LONG contracts from the SPEC's and closed out some 15,000+ of their heavy SHORT level. THE MOST interesting NUMBER is the NUMBER OF TRADERS in the COMMERCALS SHORT CATEGORY compared to the other CATEGORIES!!

21mabryBLACKBLADE#1045906/13/03; 22:39:28

The Prize arrived today was only 10 bucks I also purchased Commanding Heights by D. Yergin also got Hubberts Peak.Tomorrow I am reading all day. BB what are your thoughts on the global warming debate? Are we helpless to stop it? Is it a very real concern? Is the kyoto treaty a good start in answering this problem.21
Gandalf the WhiteNot to WORRY, Sir Black Blade !!!#1045916/13/03; 22:45:03

California Institute of Technology (CalTech) researchers report that the accumulation of leaked hydrogen gas resulting from a hydrogen economy could indirectly cause as much as a 10 percent decrease in atmospheric ozone.
As some people who used to fly ballons demonstrated -- the ozone layer is safer than humans around Hydrogen and lightning or lighted matches.

Black Blade21mabry – Global Warming#1045926/13/03; 23:17:22

I think it's overblown. Several studies even suggest an improvement in living conditions and a "bloom" from extra CO2 release leading to more abundant plant life (Carbon Sink Hypothesis). Nevertheless, natural variations and cycles appear to have much more impact than human activities. It is interesting to note the media feeding frenzy over the GB issue and references to "scientists conclude", etc. The science community is split over the issue and there is no overwhelming "scientific consensus". There are too many variables for causes of GB and global climate change has been a fact for millions of years previous to the Industrial Revolution". In fact I am one of the signers of the "Petition Project" where nearly 20,000 scientists dispute the claims of the alarmists (see link). There would be more but few are aware of the project (mostly by word of mouth). Clearly there is no "consensus".

- Black Blade

mikal@BlackBlade#1045936/13/03; 23:29:51

Those plant closings just keep coming. Many have been replaced with modern facilites overseas and in Mexico. Others have been run into the ground, operate inefficiently or in saturated or obsolete markets.
Fertilizer use in my state suffers on account of excessive rain, drought or extremes of temperature. Flooded fields this year in my area, contrast with excessive heat and drought last year. But irregular weather patterns have been rising everywhere, leading some to wonder whether HAARP, pollution or a natural earth cycle are to blame. The consequences of increases in record setting floods, freezes, droughts, locusts and other natural disasters are felt in energy use in disparate ways. But combined with the degradation of the air and water quality, deforestation, erosion and the interruptions and disruptons to the Water, Oxygen and Nitrogen Cycles, the effects on the health and well-being of the earth, water, climate, crops, and air are nearing the point of no return. Just like the vicious circle of the debt economy that threatens to exhaust all options.

P.S. R. Powell, Ski and the many silver attendees will like the solutions that will be coming to solve some of these problems. But gold will benefit too from it's growing industrial applications as I have shown from excerpts from the Gold Institute, but be preferred for it's liquidity, value and prominent and growing investment prevalence worldwide. As FOA was deliberately emphatic that gold requires unremitting focus and diligent action.

Gold StandardOzone Layer and Global Warming#1045946/14/03; 05:04:36

Sorry, this is a bit off-topic, but nonetheless is an important issue. Sir BB is, once again, perfectly correct.

The environmental issues of the depletion of the Ozone layer and the so-called "Global Warming" effect are miles apart.

The "hole" in the Ozone layer has been scientifically categorised, observed, and the effects of the world CFC ban of the 1980's have been able to be scientifically tabulated.

On the other hand, "Global Warming" is nothing more than a theory, and for any interested scientific observer, the problem seems to be two-fold:-

1. Since 1947, when scientific satellites were first put into orbit, there is no empirical evidence at all of any "warming" of the troposphere, or upper atmosphere.

2. Supposed scientific evidence of sea-level changes must be correlated to the extent that the observation point (i.e. "dry" land) has sunk or lifted. Continental plates are always shifting - always have, always will.

There is no connection between "Global Warming" and depletion of the Ozone layer.

Any attempt to tie together these concepts is just junk science.

The StrangerNed Davis in Barrons' this Morning#1045956/14/03; 07:51:58


[This]is the Catch-22 the economy is in. We've got this $32 trillion debt bubble out there, and it is as risky as can be. And, yet, rates are plunging, so everything looks manageable. It is true we've had 2.4 million bankruptcies filed since the economy started up in the fourth quarter of 2001. But, with rates down at these levels, we are managing. If somehow the Fed succeeds this time and things heat up again, interest rates will start up. The debt service will be enormous and that will put us right back to where we are now. That is the problem. If the Fed doesn't pull this off, and they don't trash cash and they don't force people to go out and spend their last dollar, or borrow their last dollar, then you are looking at deflation. And that is terrible.

If they heat things up, it is bad and if they don't heat things up, it is worse. They have clearly chosen to try to heat things up. You've got an election next year and they have a good shot at it. My guess is we'll have a great quarter, maybe a little longer than a quarter, then rates go up and it will end almost immediately. There is not a lot of pent-up demand. All the pent-up demand is coming from driving rates lower and lower and lower.

The other side of that, the other big secular risk I see -- and it all ties together -- is that our exports are exactly what they were back in 1997. This either means our goods are not competitive or the dollar is way overvalued. It is probably a little bit of both. We had a productivity jump, though I am not convinced it is as good as the numbers show. Given that productivity jump, our goods should be competitive, and they are not. We definitely needed to see the dollar come down, but it needs to come down carefully and slowly. If foreigners understood our policy is what I think it is, that is, making cash trash, why would they keep their $3 trillion in this country? At the point they realize this, this nice decline in the dollar all of a sudden becomes tremendously bad.

The Fed is trying to keep the economy afloat while we are working ourselves out of debt. The problem with what they've done to get the economy going is they've tried to cure the problem of too much debt by adding more debt. It all looks good as long as rates stay down here. I think whatever the Fed is doing is wrong, but I don't really know what else they can do. If our problem is we save too little and borrow too much, what are we doing now? We are making savings worth zero and we are telling people to borrow. We are doing just the opposite of what we need to do. The reason they are doing it because they are scared to death of deflation. They are scared to death of a depression. So they are fighting it tooth and nail, and I think short-term it is going to look pretty good. But I am very dubious about the long term.

Dollar Bill*>*...........$#1045966/14/03; 08:14:23

Good Morning Stranger, All.
..Couldnt the Fed just inflate the equity market till state budgets balance and company retirement accounts are in a plus?
..Since this Fed is willing to do anything at all, isnt global inflows of credit not the factor we suppose?
The credit markets manufacture credit in amounts not covered by international reinvestments. Isnt the US in a position to be able to pull off surviving this ponzi scheme?
..If the US Fed. is willing to do anything to keep things
working, is there really anything other countries can do?
..If arab countries want to switch to the euro, they are threatened by the effects on oil prices that a weakened US will cause. We are all tied into the present system, and as long as the US is ballsy enough to fight over the survival of the present dollar reserve system, who can defeat it?
..Except of course, that natural destructive and stupid
thingee that affects each and every one of us.
..I suppose that devil factor makes the present system so flawed, and we/others will always have "murphys laws"
to wreck the best laid or winging it plans that we make to set up human financial affairs in some bee or ant like

Mr GreshamGreat thread at Prudent Bear chat#1045976/14/03; 08:34:27

Some of my favorites, soul-baring and mutual support.

tanstaafl: "If you really don't HAVE to have the interest income to live on immediately, what is wrong with just holding physical gold? Even if you doubt the dollar collapse and think we may not have large, general price inflation (at least one of the two is near certain, imo), gold has hundreds or thousands of years of at least tracking inflation. So if the currency inflation rate is 7+% as reported, then IN THE LONG RUN gold is sure to go up at least an equal amount. The gain would be, at least, tax deferred and possibly tax free -- so the "interest" you're likely to "earn" by just sitting in physical is most likely to be quite respectable in real terms in the long run. If the dollar falls, the gain could be quite spectacular. Just because a CD generate s reportable interest income approximately equal to inflation and gold doesn't, doesn't mean the gold isn't effectively earning "interest"! The intrinsic interest is definitely there, as history has shown for thousands of years. Learn to laugh at the gorilla, but don't laugh too publicly! Those are two important lessons. "

pooky: "The Fed can mess with you, but it can't destroy you if you don't play its game. And playing your own game mostly amounts to a lot of watching and waiting. Paper is paper until it catches fire, promises are promises until they are broken, and paper promises are increasingly in breach of contract from one end of the spectrum to the other. For pure safety's sake, there really isn't much to do but pay off the house, pare debt to zero, avoid saving in dollars (and perhaps ANY fiat currency), diversify where you can, learn some useful skills, and maybe set up dual citizenship somewhere sunny. Oh, and eat more ice cream."

Melting PotGlobal warming and oil#1045986/14/03; 08:49:50

The subject of global warming has been postulated and connected with removing subsurface oil.

The theory is:

The outer earth surface rotates once every 24 hours, however the inner core rotates about once every four hundred years. The interaction between the constantly moving core and the surface produces earths magnetic qualities and friction that causes resonance. This is known, measured and recorded as the Schuman Resonance. The normal resonance of earth is 7.8 Hz.

Crude oil is found in differing amounts all over the globe, much like interconnected aquifers, only the vast pools where oil gathers are economically feasable to mine production.

It is believed oil acts as a natural lubricant and natural gas acts as a coolant between the inner core and surface plates. Removing the natural lubricant and cooling mechanism creates additional friction that over time begins to warm the earth, causing an increase in earth quake activity and collapse the magnetic field, hence surface warming not atmospheric warming.

The collapse of the magnetic field also produces spectacular electrical events (lighting) and surface storms as Earths biorythm is becoming out of sync as evidenced by the moving magnetic north pole.

The Schuman Resonance is normally 7.8 Hz, it has over time increased to todays 12 Hz. The resonance is again created by the friction between the inner core and surface plates. Remove the lubricant and additional friction is incurred, thusly the resonance and earths dynamic temperature increases.

If the theory is correct, TPTB do not want the people to know this is the cause of global surface warming and pole melt down. They blame the warming effect on CFC's, etc. and a host of other causes, ad nauseam, taking our eyes away from the true cause of the warming effect.

Lets go one step further here........

We are taught pursuant Boyles law of thermo dynamics that heat and cold cannot pass thru a vaccuum. This is the principle used in a Vaccuum THERMOS bottle. Outer Space is supposedly a vaccuum, how does sunlight produce heat after traveling through the cold, cold vaccuum of space??? Further, the higher we climb in the atmosphere, the cooler the atmosphere becomes, yet the deeper we burrow into the earth, the warmer it becomes.

It would stand to reason if the sun created the major percentage of earths heat, the higher we travel into the atmosphere, the hotter it should become, and the deeper into the earth we burrow it should become cooler. Yet, in the real world it is completely opposite. Hence, the major percentage of earths constant surface temperature is produced by the earth itself from;

A) The molten core

B) The friction between the core and surface plates

C) A combination of the above

Again if the theory is correct, such info would plunge mankind and the entire oil based economic system into chaos. A new dark ages would immediately begin.

Edward Teller advanced the concept of global spraying of fine reflective particals to reflect sunlight back into space (chem trails) to diminish the suns heat by 1% to help offset what TPTB claim is the cause of global warming, "green house gasses."

I suspect this is part truth and part fiction. If the earth itself is heating up due to removal of oil and natural gas, then all the spraying in the world will not stop the effect.
The promulgated story has us looking upwards and at green house gasses instead of downwards where the real problem lays.

Yes, in part green house gasses are somewhat to blame, but not to the degree it is said to effect earths temperature. This cannot be true, as volcanos and the natural break down of organic matter would have destroyed life on the orb long ago.

When TPTB say look up, I look down. Do you think the controllers would admit that pumping billions of barrels of oil has created a global catastrophe? Not on your life!

Look around, the weather is abnormal, earth quake activity, electrical activity and magnetic activity is increasing and becoming more volitile as we pump the remaining supply of oil and nat gas from the ground. Oh and blaming the elusive Planet X, pole shift, etc.......,just a cover story for the sheep to never discover the real reason for the coming environmental catastrophe.

Hope I'm wrong for all of our sakes!

barnacle billDumpster Diver Alert#1045996/14/03; 09:27:26

I work for the City of Minneapolis. At work I noticed a list of items that were not to be put into the garbage. Three of those items were gold, silver, and platinum.

This is a heads-up to all of you dumpster divers in Minneapolis: Abandon your search for PM's in Minneapolis dumpsters.

On a more positive note, I did hear a rumor that the dumpsters around Washington D.C. did contain gold. I will check with my sources and keep all of you up to date.

Clink!@ BB#1046006/14/03; 10:13:59

That must have been a bit of a jaw-dropper at the governor's meeting; 'If we are fortunate enough to have a severe crippling economic recession ....'!


Old YellerAsian CB's and their dollar dams#1046016/14/03; 10:36:40

They grow ever larger and the exit strategy ever more
uncertain.Meanwhile,the US government gets a free lunch
through negative interest rates.

Gandalf the White"WELCOME BACK" to The Stranger !!!#1046026/14/03; 11:27:21

The Stranger (6/14/03; 07:51:58MT - msg#: 104595)
The Hobbits love to read your messages !

MoegoldGlobal warming and oil (Melting Pot msg#: 104598)#1046036/14/03; 12:03:07

If global warming is due to removing oil from the ground, how do we account for past periods of global warming? Did the dinasaurs pump oil?

"We are taught pursuant Boyles law of thermo dynamics that heat and cold cannot pass thru a vaccuum. This is the principle used in a Vaccuum THERMOS bottle. Outer Space is supposedly a vaccuum, how does sunlight produce heat after traveling through the cold, cold vaccuum of space???"

I don't remember this version of Boyles Law, but radiation can and does pass through a vacuum. It can't produce heat there because , by definition, a vacuum contains nothing, no gasses or other matter to absorb radiant energy from the sun. The earth is not a vacuum and does absorb radiant energy from the sun. To ignore this is to ignore the daily difference in temperature from night to day.

We will continue to pump oil until it is gone. It will become a more valuable commodity just as gold is as more fiat money is printed.

The StrangerThe Oldtimer#1046046/14/03; 13:50:38


Thanks for yet another dose of your legendary hospitality. You are a true friend. I have never really left this forum, however. I still check in every day, and always enjoy seeing your familiar handle, along with those of numerous others. But I wonder how many know that you have been a continuous poster for longer than anyone else.

Bravo to you and to all of your Hobbits, Gandy!!!

USAGOLD / Centennial Precious Metals, Inc.A complete gold investment education in 175 pages for only $5.95#1046056/14/03; 13:53:27

The ABCs of Gold Investing

ABCs of Gold by MK"This book is a distillation of nearly a quarter-century of experience working with private investors interested in adding gold to their investment portfolios. It is not another "get rich quick" or "beat the market" treatise. Instead, it addresses a more practical concern -- how to protect your wealth during what many believe are increasingly dangerous times for the average investor. Sensational returns or making the quick turn of big profits is not what gold investing is all about. Gold has to do with medium to long-term asset preservation -- weathering the storm and having something left after the dust clears. Since the investor is essentially trading an inherently unstable and depreciating form of money for one that has withstood the test of time, incorporating gold into your investment plan is among the more conservative strategies you can undertake. I often counsel investors that purchasing gold is not 'investing' at all. In reality, you are simply replacing one form of money in your savings plan with another. . . .Perhaps gold can offer you what it has offered countless others over the centuries -- solid unassailable protection against the gathering storm." (order info)

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

21mabryMelting Pot#1046066/14/03; 14:03:54

Melting Pot, That was an excellent thought provoking post,I had never heard that theory before, it deserves to be studied. MK thnx for the copy of your book you sent me.I already have a copy this is my second one, I hope you do not mind if I give it to my library of my university maybe it will open some minds on campus. 21
The StrangerDollar Bill#1046076/14/03; 14:18:42

Lots of countries have tried to print their way out of debt traps before. As far as I know, the result has always been the same. The currency winds up practically worthless. If that happens here, I think it will be because the ego of one man (Greenspan) allowed him to think he was capable of successfully steering the world's largest economy (and a fiat-based one at that) away from every pothole that ever got in his way.

The fact is, credit-based economies simply have to go into recession once in a while. When the natural cycle is impeded, as it has been in the United States in recent years, imbalances will continue to worsen until something far more onerous comes along.

CaradocA favor....#1046086/14/03; 18:01:48

Could someone please repost from a week or so ago the URL to chart of silver price going back to 1875? (I bookmarked it on computer at work but not here at home.)

Thank you,


PS: Speaking of home, California is building the "house of cards" one tier higher with tricks like two different types of longterm borrowing to pay current year expenses and - even more amazingly -- a temporary (three year) increase in sales tax (1/2 per cent if I remember correctly) to be able to meet state pension payments for this year. You might wonder how extra sales tax revenue 2 or 3 years from now can be used to pay retirees this year. The answer is simple if you think like Governor Davis: just estimate that future revenue, issue notes against it, and you've got the money now (or 90-some percent of it). Makes you wonder what the plan is for next year.

Such shenanigans may postpone the inevitable but will only make it worse when it does happen.

The Invisible HandA first glance at Giscard's EU Constitution – Another step on the Trail?#1046096/14/03; 18:18:07|0|RAPID&lg=EN&display=

Article I-12 - Exclusive competence of the Union
1. The Union shall have exclusive competence to establish the competition rules necessary for the functioning of the internal market, and in the following areas:
– monetary policy, for the Member States which have adopted the Euro

Article I-29 - The European Central Bank
3. The ECB is an institution which has legal personality. It alone may authorise the issue of the Euro. In the exercise of its powers and for its finances, it shall be independent. Union Institutions, and bodies and the governments of the Member-States, shall undertake to respect the principle.

Art. I-12.1 raises the question what is monetary competition. Once this competition principle has been stated, art. I-29.3 authorises only the ECB to issue the Euro. Nowhere is the Euro given any legal-tender qualities. Is this Another step on the Trail?

GoldiloxNobel winners attack Bush Economics#1046106/14/03; 18:35:22


Ten Nobel prize winning economists have attacked President George W Bush's tax cutting policies.

On Monday, Mr Bush sent his budget - designed to help revive the US economy and boost military spending - to Congress for approval.

But the combination of cutting taxes and increasing spending will mean that the US is set to notch up record budget deficits greater than those run-up by his father more than 10 years ago.


What a surprise. Economists are not fond of Bushonomics?

John DoeCaradoc, here's a chart#1046116/14/03; 18:46:42

600 years of silver...
John DoeHere's another from 1792 in US$#1046126/14/03; 19:28:21

Silver since 1792...
Melting PotThe Dollar's Last Days #1046136/14/03; 19:38:37

If the government continues to fund its activities and meet its financial obligations through money creation, prices will overcome any deflationary pressures and rise precipitously. People will begin to see and feel the steady fall in purchasing power. They will rush to exchange money for material goods, causing prices to skyrocket.

At some point people will refuse U.S. currency as payment for goods and services. At that point, the dollar, like every fiat currency to come before it, will be worthless. [9]

The government may attempt to take over industry and seize wealth from businesses and individuals, and make it illegal to leave the country. [10] But it will only succeed in such measures if individuals do not have a way to defend themselves against such encroachments.

More likely, since America is still an armed nation, the government will accept a more limited role. It will either offer gold or silver currency, or money backed by gold and silver, or leave currency functions to the private sector. In an age when assets can be transferred electronically, a single unit of exchange may no longer be necessary. Gold and silver may be just two of many tradable commodities.

Individuals can prepare for a collapse by keeping as little wealth in U.S. currency as necessary, and transferring all wealth to material possessions and gold and silver gradually as events dictate.

Most importantly, individuals must attain firearms. As the collapse draws near, efforts to unarm the U.S. population will grow more strident. The federal government may share Adolf Hitler's insight that "the most foolish mistake [rulers] can make is to allow subjected people to carry arms. History shows that all conquerors who have allowed their subjected people to carry arms have prepared their own fall."

NOTE: A very well written and honest asessment of current reality. Read the entire article then send to friends, family, and associates.

glennh10Re: Housing Bubble#1046146/14/03; 21:50:48

There's been considerable discussion about the inflated real estate market (bubble), and the financial problems that will follow an inevitable decline in market value, affecting both indebted home "owners" as well as banks, fannie & freddie mac, derivatives, and so on. However, municipalities will also suffer as well, due to a drop in property tax receipts. They think they have it bad now.

The whole economy's sputtering along on nothing but fumes; presumed "safety nets" and economic turn-arounds are at best, unreliable. TPTB have so many pieces hanging in the balance, they can't afford at this point to drop even one ball. I would say we're getting pretty close to the "last train out". Anybody who hasn't done so already, should take out some (cheap) insurance against this ersatz "system", by allying with something of substance (gold). As is often said, it's going to get interesting.

Belgian@ TIH > EU - Constitution#1046156/15/03; 01:16:28

Most important is the *Independance* of the ECB ! All those Eurolanders " sharing the same currency "...<OUR> currency as Duisenberg often calls it !!! ECB's powers must reach much further than those of the former Bundesbank. Lot of work still to be done to represent, unanumously, the euro, outside EU.
The "Stability and Growth" pact is there to stay, whatever storms might (will) come. This project remains an exciting attempt in its offering of a better alternative for the dollar-system.

Let me remind you that Bernard Connolly (AIG) was a guest at LBMA conference in San Fransisco, 2002. This same B.C. who wrote the books " The rotten heart of Europe" AND " The dirty War for Europe's Money" !!! Do you follow me Invisible ? LBMA...> London...> UKUS...> EMU...> Money Wars...!!!

B.C. snippits : ...aggravated by the efforts of the European "imperialists" to achieve their ends through an economic and financial disaster deliberately created by EMU... !!!-???
Illustrates how a growing and succesfull euro-integration is perceived by outstanders.

The Invisible HandConnolly vs. the EU Constitution#1046166/15/03; 02:28:22


The joke about Connolly and the EU draft Constitution, for which I gave the wrong URL yesterday (the correct URL is indicated above), is that

whereas in the Connolly case, which was thought as having wider implications for free speech that could extend to EU citizens who do not work for the Brussels bureaucracy, the European Court of Justice (ECJ) ruled that the commission could restrict dissent in order to "protect the rights of others" and punish individuals who "damaged the institution's image and reputation".,

article 11.1 of the Draft Constitution says that everyone has the right of freedom of expression.

Connolly has appealed the ECJ’ s decision to the non-EU European Court for Human Rights. Maybe, he'll win under the Constitution, although the question arises whether the Constitution is applicable to facts before its entry its adoption and, a fortiori, before its entry into force.

masPrivateer and FOA#1046176/15/03; 06:22:12

Are you worried that we will enter an Japan like economic environment with rates at zero, economic stagnation and falling real asset values? Don't! They do not use an out going world reserve currency and we do! We will print what ever amounts needed to keep real Estate up, the Dow up and our economy purring: no matter what the value of the dollar on foreign exchange becomes. Or our eventual price inflation.

Our local economy will soar in dollar terms; no matter what our dollar is worth.

Are you worried that our 10 year bond, the new bench mark, will soar and squeeze off any recovery? Don't! We will just remove it from use and move to the 5 year,,,,,,,, to be replaced later by the 2 year,,,,,,,, to be replaced later by the 6 month,,,,,, 1 month,,,,,, 1 week,,,,, 1 day,,,,,, then

Privateer today.....
We have a situation in which the faster Treasury yields head towards their ultimate low, and the Treasury debt bubble its ultimate high, the more money is poured into them. Lemmings have got nothing on Wall Street these days.

Right on cue with the acceleration of the bond bubble, Gold took a hit this week when it fell $US 9.60 to $US 352.20 on June 10. The monetary mechanics at the Fed and the Treasury and on Wall Street are painting themselves into a corner. They have almost no room for manoeuvre left. To maintain the structure of the system, it is ABSOLUTELY MANDATORY that ANY potential "escape route" from paper assets be debunked. Hence Gold's fall, in the face of plummeting interest rates and a falling currency.

For almost a year, between December 2001 and November 2002, the Fed hoped that it could hold the line. It found that it couldn't, so it had to cut again in November 2002. That cut heralded the start of the Fed's warnings about "deflation", just in case their manoeuvre room on interest rates ran out. The acceleration downstairs of the $US and upstairs of the $US Gold price right after that November 2002 rate cut scared them green.

Had it not been for the distraction of the Iraq war, the Fed would probably have cut rates again at their March 18 meeting (remember, the Iraq war began on March 19). The war bought them three months. Now, another rate cut is a CERTAINTY. How anyone can seriously entertain the thought that this cut will "succeed" where the previous twelve failed is utterly beyond us. But then nobody wants to look beyond June 24-25 right now.

Remember, while Gold has resistance and support points, and is the most deadly enemy of the paper mechanics, it has no "ceiling". Bonds do have an absolute ceiling, a nominal interest rate of ZERO. One should not be surprised that the Fed has repeatedly "reassured" the markets that they will buy Treasuries "if necessary". At or near the ZERO rate level, who else would do so?

After the rate cut at the FOMC meeting on June 24/25, with the Fed Funds rate at 1.00% (or possibly 0.75%), the Fed will be left staring into the eyes of what has always been their ultimate nightmare, the necessity of having to MONETISE US Treasury debt issuance.

misetichFreddie Raises Fears of 'Cookie-Jar' Case #1046186/15/03; 06:51:25


Pushing current earnings into future years -- the accounting problem that some fear could be at the heart of the still unfolding scandal at U.S. mortgage company Freddie Mac -- is among the oldest gimmicks known to wily executives eager to burnish results, experts say.

Indeed, the practice of "smoothing" income -- typically done with so-called cookie-jar reserves -- has been the root of a host of high-profile accounting debacles, ranging from appliance maker Sunbeam Corp. to Cendant Corp. .

But Freddie Mac has said it expects to restate its earnings higher for 2000-2002 and warned that those increases would be offset in future periods. Future earnings could also be more volatile, it warned.

Sounds things will get messier for Freddie Mac - and those derivatives

All On Board The Gold Bull Express

geAbout the EU Court Decision on Connoly#1046196/15/03; 08:19:45

Is it true that, " The European Court of Justice ruled that the European Union can lawfully suppress political criticism of its institutions and of leading figures", and "that the commission could restrict dissent in order to protect the rights of others and punish individuals who damaged the institution's image and reputation."

I wonder if it is true?

misetichLingering Losses on Bonds Are Haunting Insurers#1046206/15/03; 08:40:43


That pressure figures to be especially intense on the insurance industry.

Insurers are swimming in billions of dollars of losses on corporate bonds that they bought years ago, but whose value has since plummeted. With the leeway afforded by vague accounting rules, many insurers are still carrying these securities on their books as if nothing had happened. An effect is the deceptive appearance of financial strength.

Now federal regulators are suggesting that tighter rules may be required on how companies value distressed securities. A tightening could push life insurers, in particular, into a financial squeeze, requiring them to borrow billions of dollars or issue shares to maintain capital requirements.

The knoose is getting tighter around financial fraudesters and misrepresenters -

As a result the odds of a major financial systemic risk has risen considerably

All On Board The Gold Bull Express

misetichJob Cutbacks Accelerating in California #1046216/15/03; 11:05:29,1,1394538.story?coll=la-headlines-business


California's labor market deteriorated sharply in May as the state's employers shed 21,500 jobs — even as the rest of the nation combined gained jobs, according to government data released Friday.

The cutbacks were felt across a wide spectrum of the economy, which is being weighed down by a massive budget gap and ballooning business costs. The job losses are the largest since December and mark the fourth consecutive month of payroll declines in California.

Just when you thought it was over .... here we go again... the long awaited US economic recovery appears to be a mirage

All On Board The Gold Bull Express

Gandalf the WhiteThanks Sir Mas, for connecting the TWO messages !#1046226/15/03; 12:12:06

mas (6/15/03; 06:22:12MT - msg#: 104617)
Privateer and FOA
You ALMOST had me there, Sir Mas --- UNTIL I thought that you must be thinking in European "date thought", and YES, FOA said that statement on NOVEMBER 2nd, 2001, and not as Feb. 11, 01 as most us on this side of the pond are taught!!
Is it not "real fun" to read the "Trail Writings" and see things that were pronounced then that are coming or HAVE been true in the present !!!
Back to reading the Archives and Trail !

Cavan ManEU vs US#1046236/15/03; 12:59:31

Another difference of opinion

Airbus and Boeing clash at air show
By Kevin Done in Paris
Published: June 15 2003 19:12 | Last Updated: June 15 2003 19:12

Airbus and Boeing clashed on Sunday at the Paris air show as the US group accused Airbus of being "irresponsible" in failing to make bigger cuts in production to bring its deliveries into line with the steep decline in the air travel market.

FreeWillie"Freegold" a tautology?#1046246/15/03; 13:04:14

Hi Everyone (especially Aristotle, Belgian, Oro, SteveH).

I have a question.

According to "A" and FOA, gold will be freed from the poltiicans'/bankers' need to control its price by the current euro set-up, which is to value gold at its market price and so let a rising gold price support the euro rather than undermine its viability, as gold currently does with the dollar.

Assuming the euro "wins" this currency war with the dollar, and the euro system becomes the norm for international currencies, what would be achieved by such a victory?

If the only real competitor, the dollar, is removed or taken over, and all the world runs on this new system, what does it mean anymore to say that a rising gold price "supports" the currency by buoying its reserves' value?

When there is no competing system, what does it mean to say the "price of gold is rising"? If gold "costs more" in terms of euros, the value of the euro 's reserves go up by definition, which then in theory allows for more euro creation.

Fine, but that "more euro creation" is supposedly "discounted" by gold, i.e., in that case gold gets too expensive in terms of euro, which means the euro loses value (inflates). But isn't the whole idea that such would lead to "more valuable reserves" which in turn allows for more euro creation?

In that case, we have a situation where both gold and euro (or whatever other currency is on this system) pull each other higher and higher, ad infinitum, which means that they entire "price discovery process" completely loses its meaning!

In truth, it seems that such a system cannot operate without a competitor like the dollar.

"Price" of a thing always means "value in terms of something else."

When the value of that "something else" and of our "thing" move in the same direction in lock-step, there is no longer a contrast between the two, and no comparison is possible.

In terms of everything else in the economy, i.e., all other goods and services <i>other than gold or euro</i>, both would then become cheaper, that means, it takes more of each of these to buy any of the other goods/services in the economy.

This, in turn would mean that under such a system the euro (or whatever other currency) would be allowed to inflate the price of gold (decrease its value) in terms of everything else in the economy AT WILL -which would mean that fiat is forever freed from ANY restraining function of gold, and could become a total tyrant. Inflation would still be rampant, and nothing would be achieved instead of the death of the US dollar system.

If this is correct, this can only mean that the current euro system was never designed to exist as a "better solution" to the fiat/gold problem, but was only designed to kill off the dollar. Once that is accomplished, there is no further benefit to perpetuating the current euro system because it would lose all meaning (i.e., all capacity of one commodity to "price" the other,where I am speaking of fiat as a "commodity" for purposes of this question).

Am I totally off the mark with this?

If so, please show me where.


FreeWillieTo: Belgian ( msg#: 104615)#1046256/15/03; 13:11:37


This ties in with your post below (first one of today) referenced in the subject line, which I read only after hitting the "submit" button. Maybe BC wasn't so far off? I haven't read any of his other statements yet, so I can't tell).

FreeWillieAs to msg#: 104625#1046266/15/03; 14:34:15

Of course, because gold is still scarce and cannot be inflated in quantity (as opposed to fiat-price), it will retain its value, unlike the fiat, so we are back to a situation where gold has to take up a monetary function again (when people dump the now worth-less fiat in favor of gold), much to the discontent to the euro-planners according to FOA.

An' round an' round we go. Looks like "freegold" will never happen.

The only "solution": a world-wide ban on individual gold ownership (by a UN type "governmnent"?)

Crazy times!


Liberty HeadUs And Them - A Matter of Degree#1046276/15/03; 15:14:58

Something to think about.

Liberated Iraq:
Foreign military commanders now rule and control the flow of oil and the selection of rulers to take their place. Citizens and homes are searched; weapons are seized, without warrants. Protesters are killed without trials. The fiat floodgate is wide open. Lies flow faster yet. Desperation is high and looting is widespread. The press is controlled. Gold bullion is confiscated.

Liberated Us:
Military style commanders now rule and control the f;ow of oil and the selection of rulers to take their place. Citizens and homes are searched; weapons are seized, without warrants. Protesters are killed without trials. The fiat floodgate is wide open. Lies flow faster yet. Desperation is high and looting is widespread. The press is controlled. Gold bullion is confiscated.
The threat of domestic acts of terror, social unrest and looting rise as does the likelihood that our government will task our military to police our own country as they now do Iraq.
Hopefully, many of our military will find it more difficult to treat their own friends and family members the same way they now treat foreigners. Sadly, many won't.

In hard times, the blood/gold index has upward momentum.
Protect yourself and your gold from the brute force thugs that may appear at your door. Be more clever than they.

Best wishes to all.

Belgian@ Free Willie #104624#1046286/15/03; 16:12:46

The purpose of an euro, free, physical only, goldmarket is to have a euro-currency that will continously *try* to be managed properly in order to be as good as Gold. This free goldmarket, wanted and induced by ECB and friends outside EU (EMU), has as purpose to impose a monetary selfdisciplinary-system, that keeps the politician's demands in check ! In Belgium we have a nice new example of this with the "silverfund" (a pensionfund-reserve).

The dollar-system (dollar-reserve) has already lost its credebility a long time ago. But there was NO alternative and now thet there is one, the euro-project, this one has to "grow" and mature. This is NOT a matter of winning or losing. The dollar as the sole reserve-currency is NOT a competitor anymore. Euroland takes the initiative for the dollar > euro transition. God knows how this will evolve.

Central bank goldreserves are there, in the first place, as to compensate for the total loss of the dollar-reserves. In the assumption that the euro will evolve into an oil-currency and reserve-currency.

In a REAL (instituionalised) euro free goldmarket, one can chose in what to consolidate one's wealth. Gold or the currency. Gold can be brought back into its original barter function. Oil for Gold or an euro currency as good as Gold.
Individuals can put their faith in free gold or in a genuinly managed currency.

Gold circulation will be officialy encouraged and not only by sporadic coin issuances, as in the past. Normal free goldtrade (taxed)(even trade-settlement) parallel to fiat or digital settlement. The euro currency wants to be "associated" with free gold that fluctuates in price according to the currency's quality of management. Currencies will not compete with each other as is now, but all will compete with free gold.

What is the difference between the permanent depreciation of the dollar-reserve, managed by the printer of that currency and a free goldprice that reflects total wealth that is produced ? Your Gold says what your wealth is !
Back to the REAL goldstandard with free gold that we wanted institutionalized. Today we do exactly the opposite and falsify the price of gold as to "unvalue" gold.

Of course, one will always find new ways to cheat with free gold and pull all power to one side...
Looks what's happening with oil-wealth !

The world went off the goldstandard in different stages,...why shouldn't/couldn't we go back to another form of free gold, also in different stages, starting with the euro-project ?

We have no knowledge of the full blue print of that euro free goldmarket. But Euroland gives evidence of evolving dynamics on so many different fronts. It happens with Gold/goldpolicies This is what FOA called, "pruning of the bonzai".

That's why that former Connolly raw, is getting a "meaning" to me now. Don't need much exact details about this whole affair...what has been said is more than explicite and illustrative for organized anti-euro-ism. And then the LBMA connection !

I (others surely can) can't possibly know how the dollar-block will fit into this new euro free goldmarket thing.

F.W. :It seems to me that you are still thinking in terms of gold-manipulation. A free goldmarket will most probably emerge because our dollar-monetary system is hopelessly broke. The euro has NO interest in destroying the dollar faction or the dollar currency. It is the dollar-system that will not be accepted any further by the rest of the world. The euro has NO Rambo ambitions !

In the good old days of the goldstandard, countries and individuals, consolidated their wealth (surplusses) in goldreserves = wealth. These goldreserves were sold in times of distress and when there was no possibility of generating surplusses (wealth). So in a free goldmarket you will have buyers and sellers of gold, according to their real efforts/successes of their work. More economical wealth production means more accumulation (demand) for physical gold (wealth), less prosperity means more goldsales and the declining POG, reflects the decline in total (or partial) wealth.

In our completely "paperized" world, a real free goldmarket (simple concept) is very difficult to understand and come to terms with that simple logic.

The euro, most probably, might start the concept of free goldmarket (MARKET !!!)...but it will not remain an Euroland exclusivity. Think about all those states that had the luck of abundant "vital" resources in their underground.
The majority of these regions live in absolute poverty ! This is NOT a coincidence !

A free goldmarket system might bring big changes into this situation (fait accompli). Why are Chinese, Russians, Middle East so familarising with Gold ? They want value for value, exchanged in an horizontal way. hey will buy physical gold for what they produce in excess on real goods and services and sell gold when they need it for settlements in a period of no excess !

As long as there was no alternative for the dollar-reserve (system), it was impossible to ever agree on a free goldmarket (standard) ever again ! The dollar couldn't ever accept this because of the long term mismanagenment that we all "had" to accept. The Gaulle was the last one to make a succesfull goldraid from the US goldreserves. Then the window "had" to be closed and paved the way for dollar-debauche. That's when Euroland started to be architected !!!

And here it is that Euroland and its euro. Maybe an ugly baby, but it will grow up and become attractive. I never believed it myself, but gradually became an Eurolander instead of a Belgian lilliputan.

I think that you make the mistake of not seeing the word "market" in the free goldmarket. Gold, the currency without a country in a global market. Up until now, we all had dollars as reserve. Maybe later, the dollarblock will have euro as a reserve, as good as gold, as others are already building !?
FOA suggested one major law that should be accepted in a free goldmarket. Gold-loan disputes can never be finalised in the delivery of physical gold, when settlled in EU courts.

And let us NOT forget the fact that 1,2 Billion chinese have their liberated goldmarket, now ! Nobody of the gold-authorities bothers to explain "WHY" exactly the chinese, are having this gold-affair !

I've done my best FW. But please, don't forget I'm only a gold-student and solely expressing/communicating my personal intuitions in poor English.

CoBra(too)LoCascio - An Important Interview by Jim Puplava#1046296/15/03; 16:52:00

If it doesn't work - please go to "Financial Sense" Broadcast ...

Meantime, the arrogance of Barrick/JPMC lawyers to dismiss the Blanchard case on terms of "too big to sue and not under your jurisdiction, Judge" - backfired as judge Helen C. Bergen dismissed this attempt of "blackmail"!

Rather,it seems to have triggered a rout of class actions against the perpetrators. An instance, quite opposite to the Reginald Howe case, which leaves us with some hope that the're still some incorruptible people in place.

On another topic it is slowly sinking in that to win a war is easy - to win the peace is somewhat different, even for the only superpower. Afghanistan, Iraq and the peace road map of israel/Palistine is blowing up in GWB's face.

... Is it that the bribes of paper dollars are seen as what they are - non-valeurs, like any other paper currency - and super power status alone is in the long run not enough to maintain an imperialistic power?

Any power built on clay (printing presses) have been toppled in history.

THE time to hold GOLD - in order to protect your wealth and liberty - as the "exorbitant privilege" of the US dollar reserve currency is being questioned! ... while doing everything to lower the relative worth (not value) ... cb2WOIE=-

FreeWillie@ Belgian: Stated purpose vs. actual effect.#1046306/15/03; 18:06:30

You said:

"This free goldmarket, wanted and induced by ECB and friends outside EU (EMU), has as purpose to impose a monetary selfdisciplinary-system, that keeps the politician's demands in check !"

Well, that's exactly why I asked my question. I know it's "supposed" to do that, and I know that you beliebve it, but technically speaking, when gold and euro (via the euro's gold reserves being valued at market) are moving in the same direction, then neither is a check on the other. That's just a fact. Good intentions do not change that.

Given that politicians are human, and humans are subject to temptations, and temptations get bigger the higher up in the power structure you get, once gold and fiat move in the same value-direction, there no longer IS a restraining effect coming from gold EXCEPT to the extent that people can always choose to switch to gold if the euro gets too plentiful.

But that brings with it two problems:

1. It would necessitate that people use gold as a medium of exchange again - which is something that goes wholly against FOA's theory of "free" gold (free from society treating it as money - which is subject to abuse as history has shown - but retaining only it's "wealth-asset" function, for which it is best suited, according to FOA). This was one of FOA's main tenets in describing what he calls the "best-use function" of gold.

2. That, in turn, would make politicians again perceive gold as being "in competition" with their fiat currency (which is what the euro still is, despite being supported by gold)> This in turn would cause them to be tempted to restrict gold ownership again.

My concern is - as you know - that the entire thing would be an exercise in futility, getting us right back where we were before, except that by virtue of the euro taking over the dollar's reserve function, it would cause hyper-inflation and therefore economic breakdown in the US.

Let's face it: the dollar is really "sick" from over-use and over-issuance. It cannot stand in the face of a gold-supported euro that has the sympathies of the oil-bloc on top of being "new" and not over-printed (yet.)

So the dollar WILL crash, and gold WILL reign free for awhile. But since we have seen that after the US collapse gold would no longer restrain any fiat (euro or otherwise)from over-printing, the promises of "freegold" will not be realized.

Again, I am asking this from a TECHNICAL, not ideological perspective:

Is there anything in the freegold concept that would avoid the temptation of politicians/bankers to view gold as a "competitor" again, once inflation of the fiat-supply will make people move out of euro and back into gold?

Put yet another way:

How is the euro/freegold situation different *in principle* from the gold/paper-dollar situation that FDR was confronted with? (Banks were threatened because people lost faith in the dollar and demanded gold instead, threatening to expose the fact that the banks had lent out more gold that they could back up with physical reserves.)

(I know that here there are no banks involved that risk exposure of a lack of gold reserves, but we are still dealing with the typical effect of over-inflation of one asset versus another. The same *principle* applies)

(Besides, your English is by no means "poor")

Does anyone else have input on this? Aristotle? Oro? anyone?



Cavan ManFreeWillie#1046316/15/03; 18:24:05

Excellent use of the word, tautology. Kudos!
AristotleFreeWillie, you've got something amiss#1046326/15/03; 20:16:38

A couple phrases of yours -- "...when gold and euro (via the euro's Gold reserves being valued at market) are moving in the same direction, then neither is a check on the other. [...] once gold and fiat move in the same value-direction [... etc etc]"

The euro is not going to get ever stronger with time. Like all fiat currencies, it will get weaker with time -- slowly (if all goes well) according to the ECBs price stability objective of inflation "below but close to" two percent annually. Getting back to your key issue, as the euro-denominated price of Gold rises, how on earth are you taking this to be representative of a *stronger* euro??? After the initial necessary one-time massive revaluation of Gold, the ongoing price adjustments after that will simply reflect the market's instantaneous opinion of the euro's purchasing power. In other words, a higher Gold price would generally be indicative of a weakening euro.

You might want to revisit your thoughts on this one.

Gold. Get you some. --- Aristotle

Chris PowellNew report by Reg Howe finds most central bank gold is committed....#1046336/15/03; 21:04:49

... to the gold price suppression scheme.

A new report by GATA consultant Reg Howe finds that
most central bank gold is now committed to the
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LeSin"Currencies Not To Compete With Each Other Only With ANOTHER - GOLD#1046346/15/03; 21:52:18

Belgian's Great Thoughts from a Master Student of EURO & GOLD

Sir Belgian

Wow! (At least for me) That is an enormous statement:

"Currencies will not compete with each other as is now, but all will compete with free gold."

Belgian, Ari and other esteemed participants here - please expand and elaborate on the above statement. Many here are eager to learn and avoid the coming inevitable storm.

It would be great if FOA and ANOTHER would contribute to further expand that "Thought" becoming a "Reality" very soon.

Gold get you some during these final June 03 clearance sales - at never to be repeated prices. Sure wish I had more fiat to exchange for real physical gold. Shucks

Cheers "S"

Max RabbitzEuro Tautology?#1046356/15/03; 22:25:51

Let's see if I understand this. The higher the price of gold in Euros the greater the EU gold reserve and therefore the more Euros can be issued. The more Euro inflation the greater the price of gold in Euros. This spirals up to an infinite number of Euros issued and an infinitely high gold price. Not good, well not for the Euro. Other reserve currencies are needed for stability. The Euro itself can't be a reserve currency in the Euro system, only elsewhere. If the 85% of reserves from these other currencies appreciate to the same degree as gold then the 15% gold ratio stays the same and no new Euros can be created. If these other currencies (or currency) decline in value then the percent gold in the EU reserve increases and more Euro's can be issued.
masGandalf#1046366/15/03; 23:29:22

Yes it is real fun.
But I still can't figure out how the gold price is to be "freed" in euro's? I see the rate of 302.80 today vrs 360. So how is the price to go to the moon. And using what system of trade to get it there? Just trying to figure out inbetween Belgians points and our present position, that is now.

seagullCavan Man re: Airbus vs Boeing#1046376/15/03; 23:33:29

I came across this article which discusses this topic, and presents a very controversial case, linking 911 with the debate! In the FWIW department!
FreeWillie@ Cavan Man ("tautology")#1046386/15/03; 23:36:09

Thanks. Got any input on my question?
Liberty HeadU.S. Mint#1046396/15/03; 23:37:24

I rarely watch T.V., however today I watched a Father's day showing of Young Guns. I could not resist.
The legend of Billy The Kid, son of a silver miner, fighting the cabal of his day, is still in the news. Graves are being dug up today to use DNA testing to find the truth of his death.

Back to the point, the U.S. Mint has T.V. commercials promoting Gold Eagles.
Curiouser and curiouser.

All comments welcome.


ZhishengGood Action Tonight.#1046406/15/03; 23:48:08

Last I looked gold was up $4.50 an ounce on the evening, with the dollar pretty much unchanged.
AristotleMax Rabbitz (msg#: 104635) #1046416/16/03; 00:01:37

Your comment:

"The higher the price of gold in Euros the greater the EU gold reserve and therefore the more Euros can be issued. The more Euro inflation the greater the price of gold in Euros. This spirals up to an infinite number of Euros issued and an infinitely high gold price. Not good..."

I think you have erred in making/assuming the progession purely automatic -- as if the ECB has somehow relinquished all control of money supply (an thus ignoring its principal mission of general price stability I mentioned earlier) and that any a priori racheting up of gold value/price must be (indeed, it instead need *not* be) accompanied by further emission of euro notes against the increased value of Gold reserves. Simply put, as the Gold price rises, the ECB need not *necessarily* puff up the money supply.

The ECB, for example, could conceivably sell some Gold to sponge up a quantity of an abundantly unwanted weak euro, or it could buy Gold to add euros as deemed fitting.

In a word: management is by flexibility. Not by rote.

Gold. Get you some. --- Aristotle

FreeWillie@ Aristotle: Exactly my question#1046426/16/03; 00:05:51

Thanks, Aristotle. That's exactly what I was asking.

I understand FOA to say that the ECB purpose of valuing gold at market every quarter is to allow the euro gold reserve position to rise along with the price of gold, which would serve to strengthen the euro. In other words, the "little trick" of marking gold to market would eliminate any competition between the euro and gold, while the dollar is trapped in its dependence on a low gold price. Did I get him wrong?

You are saying that gold will get only one, giant re-valuation and then the euro will still be in competition with gold, just like all other currencies, and just like the dollar now.

That was my concern. If the euro and gold were to rise simultaneously, there would not be any fiat inflation
"control" left in the system. But since then I thought about it some more and figured that the ability of the gold price to rise would "soak up" some of the excess fiat euros created (pretty much like the stock market has soaked up credit money here in the nineties), and thereby prevent or at least limit price inflation in the general economy. FOA did make allusions to that.

On the other hand, it seems that in buying gold, you are giving your fiat to a gold dealer or individual holder/trader who will eventually turn around and still spend his proceeds in the economy, putting on upward price pressures again. How do you see that?

Another question: I understand that the ECB inflation target is just below or at 2%. Does that mean 2% increase in money supply or 2% increase in price-inflation?

FreeWillie@ Aristotle: #1046436/16/03; 00:16:32

I think you answered my quesiton in your post to Max Rabbits while I was typing. Quote:

"I think you have erred in making/assuming the progession purely automatic -- as if the ECB has somehow relinquished all control of money supply (an thus ignoring its principal mission of general price stability I mentioned earlier) and that any a priori racheting up of gold value/price must be (indeed, it instead need *not* be) accompanied by further emission of euro notes against the increased value of Gold reserves. Simply put, as the Gold price rises, the ECB need not *necessarily* puff up the money supply.

The ECB, for example, could conceivably sell some Gold to sponge up a quantity of an abundantly unwanted weak euro, or it could buy Gold to add euros as deemed fitting.

In a word: management is by flexibility. Not by rote."

My question:

Is there anything "systemic" in this ECB setup that would eliminate the temptation of central bankers/politicians to over-print to pay the government's debts, given the opportunity? I.e., is there anything beyond the knowledge that "printing" leads to currency weakness down the road (which I am sure even our polits and bankers know, but do it anyway)?

My concern: as long as politicians have the ability to inflate, they will, no matter what the stated good intentions are (i.e., to keep it under 2%).

Belgian@ Free Willie as Free as Gold shall be.....#1046446/16/03; 01:28:13

Is the dollar spiralling upwards with a declining POG ! No it isn't. The dollar pseudo wealth owners keep their faith in the dollar and don't exchange the paper for Gold.

Fiat and Gold will always move into "OPPOSITE" directions !!! More euro for the same ounce means a weaker euro, becoming less, as good as Gold. The market will prefer to consolidate its wealth in Gold, rather than in fiat and the fiat managers "MUST" alter the management of their Gold OR LOSE PHYSICAL GOLD OUT OF THEIR GOLDRESERVES as to defend the currency !!! Declining Goldreserves in the vaults means degradation of the wealth of that state!

Problems :

1/ Gold as a medium of exchange : Not ALL trade will be settled in Gold and never was. Fiat will be here to stay !
GOLD WILL NOT BE MONEY !!! Gold always was and must become again, a WEALTH ASSET !!! Fiat for settlement must be associated with Gold Wealth as to give it (fiat) intrinsic value. Go back to the old days of the "Goldsmiths".
The global * MODERN * markets will always need modern fiat (plastic) for settlement and settlements in Gold will only be used in certain important fractions of the global (local) trade.

Gold and fiat settlements will live *freely* together, controlling each other. Today, we have such a similar UNFREE living together where POG wasn't/couldn't go to zero. Why should POG go to infinity in a future free goldmarket + fiat markets ?

A state who wishes to create more fiat will have to increase its *physical* goldreserves. Another state who wishes to devalue its fiat will sell out of its goldreserves (wealth not gold-money).

2/ Yes, Gold MUST/SHOULD, always remain in competition with fiat ! They succeeded in taking this competition away and leave everything to a pure goldstandard ! Freegold is Gold with no threat of confiscation ! You are thinking in dollar terms (dollar past). Euroland never confiscated Gold...ON THE CONTRARY, has always encouraged a minimum of PHYSICAL goldholdings for its citizens !!!

Hyperinflation is there to come. No matter what will happen next. It is this inevitabilty that speaks for the new freegold system. Freegold must carry us all over the "DEBTBERG" that must be inflated away, but not without the gold-refuge and a new (better) (euro)system in place and functionning !

You are suggesting a coming Goldprice debauche and fiat overprinting !? The dollar is already OVERPRINTED and you simply conclude that the euro will do exactly the same but instead of doing it with declining (contained) POG, with a rising POG !?
You keep thinking about Gold as money ! GOLD IS NOT MONEY !

Technically (not ideologically) : How can one increase its VOLUME of Gold Wealth when POG goes up and worthless fiat loses purchasing power ??? We will remain in a "dual" system of Gold and Fiat !!! It is the artificial meaning of "money" that causes the confusion. Fiat is a tool for trade settlement and if you destroy this tool, one cannot create "MODERN" wealth anymore. We are NOT going back carrying goldcoins and pay with them at Wall Mart. Your Gold Wealth cannot increase when you destroy the modern fiat/plastic way of trade settlement. That modern fiat/plastic only needs a back up system that avoids fiat/plastic debauchery. This was ( still is) possible with the past contained Gold.

As Ari already pointed out : Gold needs a gigantic "revaluation" as to correct for the past mismanagements. Once this revaluation has taken place, we land in a different constellation...freegold ! The ongoing fiat/plastic debauchery has limits. Out of a financial/monetary collapse, the new freegold market will see light. Maybe we can start Gold wars and loot it from each other ? Noooooo, just compete in making your fiat/plastic, for modern tade settlement as good as Gold and prosper in peace ! An ideology that is technically possible and a sure sign of another step in civilisation.

A good system always finds more participants to make sound agreements for the better. But if one remains in the logic of war and evil, nothing but destruction is the natural result ! Thnk deep about this !

BTW : WHO is refusing to make global agreements, today ?
Isn't it normal that onesided, increasing (dollar) pressure, provokes counter pressure ? Main difference is in the nature of both pressures ($ >< €) ! Euroland has its very turbulent history, already behind it. We learned our lessons and want to use this wisdom for a peaceful world. That's the main idea behind Euroland dear F.W. All people should be brothers (Beethoven) ! NOT an easy job of course.

The euro-gold-project will soon be ready if and when the dollar-systems collapses and becomes unworkable. Global agreements will instantly become easely possible for the better of us all.

It seems to me that your "logic" is one of total demise of all fiat/plastic and Gold going to give ALL power to its private owners ! That is a very *extreme* view and has vey little chance of becoming reality. This doesn't implicate that some private individuals (Giants) aren't anticipating the plausable euro-Gold outcome.

Thanks for provoking our thoughts ! Regards, B.

Black BladeGold Trust Buys Into Bullion#1046456/16/03; 02:43:51


Graham Birch, managing director, sector funds, at Merrill in London, says the purchase was triggered by the fall in the value of the US dollar against other trading currencies which in turn boosted the gold price to $370 an ounce at one stage.

"We look at gold [bullion] as cash. It's just a different type of cash," he explains. However, Birch also insists that gold is not an exact proxy for the dollar because "as gold falls by one percent, gold is likely to rise by 2 percent."

Birch adds: "Gold is not a bad investment at the moment. At $355 an ounce the price is not astonishingly high. There is plenty of scope for it to rise. We no longer see [gold producing] companies popping up to hedge as the price goes up and neither are central banks selling. That's why we have an upward trending market."

He also has expectations that liberalisation of the gold market in China will help investment buying – "that will mean a quarter of the world's population will be able to buy gold bars." Also, the new securitised gold products, some backed by the World Gold Council, should help lift demand. "The average US institution has zero gold at present. These products will enable them to have some."

Black Blade: More individuals and institutions are beginning to focus on gold ahead of the Federal reserve's half point rate cut next week.

Black BladeChina may cut its link to dollar#1046466/16/03; 03:02:18,,2769-713612,00.html


CHINA may be ready to break the link between its currency and the dollar, rather than track the falling American currency, analysts believe. The hugely competitive Chinese economy has been greatly helped by the dollar's fall, which has pulled its currency, the renminbi yuan, lower against the euro and yen.

Black Blade: Who can blame them if they do? China and other Asian central banks are top-heavy with dollars that they are anxious to unload. As they do unload the dollar will weaken further. Note that in the last quarter of last year China's central bank bought gold at a rate close to what the Washington Agreement allowed. A transfer of wealth toward the east perhaps? I would not be surprised to see Asian CB's accelerate gold purchases.

TopazCurrencies.#1046476/16/03; 03:04:15

Dollar just power-walked through 92...and is now struggling back up. Gold and Bonds yawningly benign as of this.
Black BladeGold's Short Position: Part Myth, Part Yesterday's News#1046486/16/03; 03:24:32


It has been long predicted that once gold moved above certain levels we would see an unprecedented buying stampede. The reputed source of such demand would be those players who, during the gold carry trade boom of the latter part of the 1990's, borrowed tons of the shiny stuff and sold it short, to profit both by reinvesting the proceeds elsewhere and from the declining gold price. By some accounts, the short position even now is as high as 15,000 metric tons, the equivalent of the expected new mine production over the next SIX YEARS. Certainly, if even a healthy minority of these positions (to the extent they really still exist) needed to be covered all at once, sheer bedlam would be created in the markets. Not only would gold's price indeed soar, but most other markets would be roiled as speculators would have to trash holdings in bonds, stocks, currencies and more to cover their behinds where gold is concerned.

Such a thing came perilously close to happening in the Fall of 1999. Following a well-bid Bank of England auction and the surprise Washington Agreement that limited new sales and leasing activities by most central banks, gold began to soar. At that time, gold's $80 per ounce spike in a mere three weeks was indeed caused primarily by those who had been caught with their pants down on the short side, and were scrambling to cover. Had not the New York Fed (via J.P. Morgan) intervened to cap gold's rise, it would indeed have been "off to the races." In my view - as I wrote at the time and have reviewed several times since - the world's financial markets were within a few days of having their wheels come off.

We're nearly four years later in time. And now - even during gold's two significant (but temporary) spikes higher during the last few months - we have seen no evidence of such a mad scramble as occurred in 1999. The question is - why not?

"I believe that the Fed - and perhaps other central banks - has been feverishly 'liquefying' the gold market so as to keep the recent advance a much more orderly one than was 1999's. . .The motive, of course, is to get as many of these institutions (those still heavily short) as possible out of harm's way in the event that gold rises far more, and in such a way that the bankers are unable to do anything more than slow it down. . .I am increasingly persuaded that the low lease rates are an indication that the bankers realize, in the end, that they cannot fight the markets where gold is concerned, any more than currency intervention works if the markets are of a mind to do something different. . ."

Among other things, I also wrote in that same report that the Fed now desired a rising gold price. I believe it continues to want this; though, again, in a fairly orderly fashion. In case you've been asleep in recent months - and especially in recent weeks - the central bank is hell bent on fighting DEFLATION now. In some respects it will succeed; in others, history and mathematics are against the Fed. Whatever the case, the most politically powerful and influential economists are telling us that a rising gold price is "proof" that the Fed's efforts at reflating both Wall Street and the economy are starting to bear fruit. And Alan Greenspan is not about to take that ammunition out of the pundits' hands when all of them need any and every reason, both real and imagined, to convince the public that all will be well.

Black Blade: Another interesting perspective on the rising POG and why it will continue. I tend to agree as I have heard several financial media buffoons changing tack and now saying that a rising POG is a good thing and it shows that the Fed is successful fighting deflation. CNBC's "Heckel" has been one visible pundit saying this. I still have to laugh when I hear the Wall Street morons champion the loss of "jewelry demand" even when gold as a "currency" is outperforming the dollar. Just because very few people hang dollar bills around their necks does not mean that the dollar is losing value because of some declining extraneous demand such as "jewelry", gold as a currency is simply more valuable against an increasing flood of dollars that can be created out of thin air and rolled off the printing presses because of some Fed officials or politicians wet dream about controlling currency. Gold is acquired by hard labor and is a rare metal that can't be pumped into the system at will. In fact the global human population is growing faster than gold is mined.

Belgian@ mas @ Le Sin#1046496/16/03; 03:49:11

The present low/lower "euro"-POG is evidencing an euro strong in Gold, in terms of the still existing dollar-paper-goldmarket ! Bear in mind that we have to get rid of this dollar-paper-goldmarket "FIRST", as to simultaniously have the euro-physical-goldmarket, where the huge REVALUATION should take place ! The seld-destructing process of the dollar must be given its appropiate time and ritme. No use to "force" things.

When the gold-management will be replaced by a freegold market, currencies can and will concentrate on their currency management in function of the Gold-Wealth. All currencies "floating" around Gold. Not your currency, but your Gold will say how wealthy you really are. Currencies will try to manage as to be able to acquire as much as Gold Wealth as possible. This is a "positive" approach and not a negative one as is "destructive", global currency competition (devaluation). Let's compete in how productive, inventive we are instead of how we can kill each other !

Let us agree to have GOLD as the ultimate arbitter. We will soon "have" to agree on that, after the dollar-euro duel has resulted in the dollar's surrender !

The Invisible HandNo comment#1046506/16/03; 04:25:10

KUALA LUMPUR-- Malaysian Prime Minister Mahathir Mohamad Monday proposed a currency basket of the euro and the US dollar for oil trades to hedge against a weak greenback and manipulation by currency traders.
The veteran Southeast Asian leader said oil-producing countries were feeling the impact of the weak greenback, which has fallen sharply against the euro.
"It is time that the quotation of oil prices in dollars be reviewed," he said in a speech read by his deputy Abdullah Ahmad Badawi at the opening of a two-day Asia oil and gas conference.
"Perhaps it would be better if payments for the sale of oil by producer countries are made with the euro equivalent of the US dollar. Then the appreciation of the euro would benefit the producers."

BelgianIran#1046516/16/03; 04:53:26

Iranian student revolts (invisible dollar-hand). EU quickly to urge Iran to comply with controls on Iran's nuclear projects as to not give the US (another) pretext for invading another gigantic oil/gas reserve in the ME. Note that Iran has China support !
silvercollectorBelgium#1046526/16/03; 05:07:51

From one of your messages you state:

"A state who wishes to create more fiat will have to increase its *physical* goldreserves. Another state who wishes to devalue its fiat will sell out of its goldreserves (wealth not gold-money)."

The ECB (at this time) maintains the same amount of gold. Since Jan 2001 up to and including this day gold reserves measure 24,656 million oz. As of Apr. 03 that amount of gold was valued at 7,459 million Euro. Total reserves were valued at 40,730 million Euro. Gold amounted to a little more than 18% of reserves. (These figures are available on their website)

Has the ECB printed more fiat? They have not increased *physical* holdings? Your statement implies a ratio (here we go again!!!) of fiat 'out there' backed by physical gold. I have documented the ECB reserves since the Euro inception, yes indeed, gold began at approximately 15% of reserves but since gold's appreciation the number has increased to slightly over 18%.

What does this mean? Perhaps simply that the increased percentage (15>18) is merely a reflection of a weaker dollar. The weaker dollar calculates to a lower "total reserve" thus a seemingly higher physical gold reserve.

So here's a question. Gold reserve percentage has increased, physical has not, therefore can the ECB 'print' more fiat? Based on your statement, because 'the state' has not increased physical holding it cannot, correct? Has the ECB increased the Euro base. Are there not more Euro's in existance?

The establishment of 15% gold to total reserves is in place. What is the relationship of total currency base (existance) to reserves? Is this the problem with the dollar, is there constantly and increasingly less and less 'reserve' backing up a massively increasing fiat existance?

A liitle sidebar; the ECB began to sport 'SDR' as reserves in Jan 2001, some 74 million. The number has increased to this day to 160 million. Why is this? Are the SDR's not the fiat derived from fiat?

As we can see the ECB has a little over 12,000 tonnes. We have been lead to believe that the USA has some 8,400 tonnes. Why does the USA not 'mark-to-market' and why is their 'reserve' gold valued at $42? Can their not accomodate a similiar 'gold-backing' reserve system? Is this not the essence of reserve held gold?


misetichThe Scary Side of Low Rates#1046536/16/03; 05:32:02


The trouble for the Fed, though, is that when it cuts rates, the money doesn't necessarily flow to the parts of the economy where it can do the most good. Despite all the money that the central bank has pumped out, industrial companies remain gun-shy about taking on new debt to finance investment. Commercial and industrial loans at banks have actually shrunk over the past year, by $75 billion according to the Fed.

Even though lending rates are extraordinarily low, chief executives in the goods-producing sector are reluctant to borrow for fear that, with prices falling and demand lackluster, they will have a hard time repaying loans. In essence, manufacturers are mired in a localized deflation and low interest rates make very little difference to them. Adjusted for expected deflation in the price of goods they sell, real interest rates for those firms "have been going up," says Wachovia Corp. economist Mark Vitner.

Sir Greenspan & Co have been saying - US is not like Japan - well it may not be - yet all Feds actions have failed to stimulate the economy - pushing on a string

All On Board The Gold Bull Express

LeSinRoad Maps & Trail Walks & Scouting Ahead & Looks Around the Bend #1046546/16/03; 06:06:30

Thanks Sir Belgian

Sir Belgian
Thank you for your efforts and insights. It seems that you now have a clear road map and understanding of where those trail walks are leading. The next bend in the road will be most interesting and telling. We wait however not patiently.
Cheers "S"

BelgianMerryl Lynch#1046556/16/03; 06:32:09

M.L. London, invests usually in unhedged gold producers...
but...increased its holdings (Holdings !!!) in Ashanti Gold (Anglogold)...
Are these two miners, small, state of the art, forward sellers of underground gold...?

Example of the ambiguity and inconsistancy, imvho.

Cavan ManEuro Recycling?#10465606/16/03; 07:49:45

What say you Aristotle?

By Noah Barkin and Jason Neely
LE BOURGET, France (Reuters) - European plane maker Airbus trumped arch-rival Boeing Monday by unveiling a massive $12.5 billion order for 41 wide-body jets from Dubai-based airline Emirates.

At the 45th Paris Air Show, state-owned Emirates also announced that it would take on 26 Boeing 777 planes, but none of those represent new orders for the Chicago-based aircraft maker.

The Airbus deal includes the purchase of 21 A380 superjumbos and makes Emirates by far the largest customer for the huge 555-seat double-decker that airlines will begin operating from 2006.

goldenpeaceRepos#10465706/16/03; 08:01:36

Fed did 52+ Billion in 10 day repos today

Belgian@ silvercollector.....on holidays with the 511 pages...#10465806/16/03; 09:25:54

To answer, with conclusions, on your correct observations, of ECB's facts...would require that the answerer is a professional central banker and has knowledge of the specifyc policies of the ECB bank. Central bankers don't play with their cards on the table !!!

We are all, amateur observers, silvercollector. And constantly with more questions (and theories) than answers.
ECB has 729 tonnes of Gold-reserves and the rest of EU-gold is still in the vaults of the national member banks. This is another complication to the equation...relationships between the ECB (BIS) and the member national central banks and their respective goldreserves under the EMU umbrella.

They are NOT (!!!) uncovering their policies up until they think it opportune (right moment) to inform the public with faits accomplis.

Central banks are per definition un-transparent !

We are still guessing what custodial-deep storage, FED Gold, means and what effect this name-change has on goldpolicies.

US' Gold priced (booked) at 42$ is evidence that the US desires to remain on the dollar-standard and that the US has other purposes (policies) for its goldreserves, whatever these purposes might be.

The only thing, that we can observe up until now, is that the FED and the ECB, must have totally different policy-intentions with their respective goldreserves. That's as far as we can get with a certain degree of certainty. Much of ALL the other commitments and present/future policies are guess-work, speculation and deductions.

The US stopped backing the dollar with Gold in 1971 ! Reason : an already hugely overprinted dollar...AND THE US WANTS TO KEEP IT THAT WAY !!!

Knallgold360 stiff resistance#10465906/16/03; 09:29:33

I thought 360 is just Another number on the way up...
geRumours about Iran#10466006/16/03; 09:31:31

Last week, a daily Turkish newspaper rumoured that CFR held meetings in Turkey. It was supposed to be related with a new US operation, expected to start in a few months targeting Azerbeycan, Iran and Middle East.

(link in Turkish)

The paper is not clear about the scope of the operation, but the implication is that an attempt to split a part of Iran and merge it with Azerbeycan shall be made….

If that is true, the event may coincide with a new upleg in gold.

21mabryMiners#10466106/16/03; 09:42:19

There have been several days in the past couple of weeks when silver and gold miners shares moved in opposite directions of each other.Today the silver miners are showing rising share price the golds I watch are mostly down. It just seems they have moved independently of each other as of late.21
goldenpeaceFoolin' with us...#10466206/16/03; 12:49:13

OK so i'm looking like an idiot. Now the Fed takes the 52+B in repos down from their NYFed web site and says they did 6.5B of overnight repos and 4B of ten day repos....nothing like jerking us around...why would that be?

USAGOLD / Centennial Precious Metals, Inc.Featuring BULLION...#10466306/16/03; 13:14:33">Gold Buyers Group Special
TownCrierOil pricing in euro denomination#10466406/16/03; 13:52:21

HEADLINE: EU says oil could one day be priced in euros

BRUSSELS, June 16 (Reuters) - The European Union's top energy official said on Monday she could see the euro replacing the dollar as the main currency for pricing oil.

"In the future the euro is (going to be) taking a place in the international markets in general as the money of exchange," European Energy Commissioner Loyola de Palacio said.

"It's a stable and a strong currency -- the role of the euro is going to be increased step by step -- it's normal," she told reporters after a meeting with U.S. Energy Secretary Spencer Abraham in Brussels.

...said European Commission President Romano Prodi had raised the issue on several occasions.

"It's a matter of realism," she said.

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

This should be no surprise among our regular participants and readers here. Now, have you made your preemptive move toward gold, yet?

Call Centennial for assistance with your order and take advantage of our competitive pricing. Check out that bullion special, ask about sovereigns, Swiss gold francs, etc. Call today, toll free. (800) 869-5115


Black BladeGet ready for warnings #10466506/16/03; 14:19:56

With the end of the quarter approaching, look for companies to start confessing.


NEW YORK (CNN/Money) - With the end of the second quarter, it is time again for companies that have sinned in the eyes of Wall Street to kneel at their pews and confess their sins.

Black Blade: Don't worry about it – analysts will just lower "earnings expectations" so that earnings (or losses) will meet or beat the street. I noticed the huge DIA, QQQ, and SPY orders and block trades that accelerated into the market close today. Apparently the individual investor has left this market and it is mostly institutional program trades. It looks like a rally on short covering and not on fundamentals, probably sparked off by the Federal Reserve "New York Manufacturing" data. Productivity continues to climb as workers are fired and remaining workers take on increased work loads (go figure). Volatility should remain high as this week is "triple witching" and stock market players will adjust positions. If there is a true economic expansion we should see a tremendous surge in energy use pressuring already strained NatGas and oil inventories. That has not been the case as yet. Personally I find it quite amusing. "Interesting Times"

Gandalf the WhiteFED "games"#10466606/16/03; 14:32:53

goldenpeace (06/16/03; 12:49:13MT - msg#: 104662)
Foolin' with us...
Your eyes were most likely not "Foolin" you, Goldenpeace.
Most likely someones BOSS saw it too and SCREAMED !!
ANOTHER posting somewhere will be made in VERY SMALL PRINT.

TownCriergoldenpeace, Gandalf: On the Fed's $52 billion blunder#10466706/16/03; 14:49:28

In the open market the Fed today added $10.25 billion, of which $4 billion was through ten-day repurchase agreements and $6.25 billion was through overnight repos.

Those are the official sizes of the two open market operations after the Fed did originally indicate $52.65 billion was done in the former operation.

Because that amount happens to exactly match the total of all bids submitted for the ten-day tender, I think you can chalk this one up to simple human error inputting stats in the wrong field on the reporting page.

Questions? Comments?


Black BladeDeflation Fears Renew on Wholesale Report #10466806/16/03; 15:02:01


WASHINGTON - The threat of national deflation, an economically dangerous long-term slide in prices, rose anew Friday with a second monthly decline in wholesale costs. The Federal Reserve is expected to shave interest rates this month to guard against possibly worse problems. The Labor Department reported Friday that its Producer Price Index, which measures prices before they reach consumers, fell 0.3 percent in May from April. That decline followed a record 1.9 percent plunge in wholesale prices registered from March to April. A big part of the decline in wholesale prices for both months came from retreating energy prices, which had been stoked in previous months on war tensions. Prices for some other goods, including clothing and trucks, also went down. "There are many flavors of deflation," said Mark Zandi, chief economist at "A mild case can hurt businesses but usually isn't a problem for consumers. But in a severe case, ... everyone is going to get nailed."

The back-to-back declines in wholesale prices come in the aftermath of recent warnings by Fed Chairman Alan Greenspan and his colleagues about the possibility of the country facing deflation, which is a widespread and destabilizing fall in prices. Although Fed policy-makers say the chance of that happening is remote, the Fed still must be alert for deflation because of its potential to wreck the economy, they said. While the country experienced limited bouts of falling prices at the end of the 1940s and in the mid-1950s, the United States' last serious case of deflation was during the Great Depression. In a bad case of deflation, prices generally fall for goods, services, stocks and real estate, economists said. Businesses, watching incomes and profits shrivel, lay off workers and cut salaries of those who retain their jobs. Individuals and businesses find it harder to pay off debt. Bankruptcies rise. "The issue we're concerned about is not deflation in the sense of falling prices per se, but the issue of what I would call corrosive deflation," Greenspan said last week.

Black Blade: I still think another rate cut is in the offing and additional surges in money supply are imminent. "Interesting Times"

TownCrierNo relationship carved in stone#10466906/16/03; 15:26:38

HEADLINE: COMEX gold ends higher, withstands euro pullback

NEW YORK, June 16 (Reuters) - COMEX gold recovered a second day Monday, losing momentum but keeping muscle tone after a rally in the euro fizzled just short of its recent peak on the dollar.

In fact, the dependable gold-euro relationship loosened a bit, with benchmark August ending up $2.50 ... as the currency retreated.

Spot gold was at $359.00 ... up from $356.70 at Friday's close.

"It's kind of on its own," said a chief dealer. "There seems to be a changing of hands."

...The euro was last quoted at $1.1841, down from $1.1868.

It touched $1.1931 overnight, its highest price since topping at $1.1932 on May 27, when gold rode its coattails to a 15-week high at $375.80. Because gold is priced in dollars, the stronger euro enhances the bullion buying power of European investors.

"At some point gold has to trade off its own fundamentals and stand by itself, rather than using the fate of the U.S. dollar as a constant crutch," wrote Societe Generale in New York's morning metals note.

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

Because no financial relationship involving gold and another instrument is carved in stone, one would be better advised to own gold outright while it is still relatively inexpensive rather than trying to leverage profits against any so-called relationship. Markets are notorious for somehow sucking a majority in with an apparent "sure-fire opportunity" that is here today but then gone in a flash... with their cash.


Dollar Bill*.*...............$>/__#10467006/16/03; 18:55:47

"This used to be among my prayers -- a piece of land not so very large, which would contain a garden, and near the house a spring of ever-flowing water, and beyond these a bit of wood."
-- Horace (65-8BC) --
That from MK's commentary page.
Perhaps Horace would add "a mine" to that list.

Gandalf the WhiteTownie -- Re: goldenpeace, Gandalf: On the Fed's $52 billion blunder#10467106/16/03; 19:14:46

TownCrier (06/16/03; 14:49:28MT - msg#: 104667)
--- the Fed did originally indicate $52.65 billion was done
Because that amount happens to exactly match the total of all bids submitted for the ten-day tender, I think you can chalk this one up to simple human error inputting stats in the wrong field on the reporting page.
Questions? Comments?
SEE, that means that someone at the FED -- IS HUMAN !
Thanks Townie -- I knew that you would be able to solve the problem !

mikalPushing on a string braids into a noose#10467206/16/03; 22:31:27

"Think you are walking on a treadmill that is accelerating in speed? Well, before long, you will need to master the skill of running on a tightrope, as the margins narrow and the cord tightens. Falling off the high wire, means plunging a long way onto a hard surface. If you survive the drop, it would be a miracle. At best, you might expect to be a cripple. Those prospects seem all too real for many Americans. Today, the economic future resembles the example of an emerging third world country, more than the dominate cradle of wealth creation. Primitive developing societies seems to be gaining energy, while our mature economy is losing steam. Is this a coincidence or are results just conforming to a well thought out plan?
Income can be derived from several sources. Most methods fall into defined categories.
1) Working for an employer for wages, salary, stock options and perks.
2) Engaging in a privately owned business that requires monetary risk and management responsibilities.
3) Promotion and entrepreneur endeavors, using other people's money, to acquire equity and compensation without personal investment.
4) Investment of accumulated capital with the expectation of earning sufficient rates of return.
5) Using borrowed or saved funds to gamble, win a lottery or simply pay bills.
6) Gaining a political position or a civil service occupation from the public sector.
7) Join a clergy that will supply your earthly needs.
8) Relying upon family resources, charity or social welfare programs.
9) Involvement in illegal activities of stealing, extortion or counterfeiting that takes or makes the money.
10) And the last and most successful means for acquiring, controlling and growing income - by directing and ruling economies - taking percentages of tribute in varied forms of interest, fees and manipulated markets.
We all are subject to some form or combination of the above. The timely and fundamental question becomes: Is your individual income situation improving or has your cash flow declined? Your answer may reflect at what stage you are within your earning years. However, as a society the current trend has the following dismal anticipation:
1) High paying jobs are vanishing as careers become far more uncertain and scarce.
2) Private businesses are hard pressed to sell at a profit or survive against corporate monopolies.
3) Returns from investments are minuscule as risks out strip rewards.
4) Inflation in basic and essential goods and service continues to rise.
5) The purchasing value of your money declines in worth.
This is a formula for a significantly reduced standard of living. The ordinary consumer is assaulted each time they attempt to provide for their family. When wealth shrinks the cost of survival extracts a much higher price. If bare essentials demand more sweat and guile, what are the prospects of most citizens keeping pace with a declining engine of affluence? Spiraling expenses for advanced education pushes most families to the wall or shackled with enormous debt. A common response is to remain single, childless and reduce expectations for a comfortable habitat.
Others take the opposite approach and continually demand from government that "free" services expand and become a 'right', while those still productive are sent the bill for payment. Deficit spending never disappeared, and is back with a vengeance. The continuous cycle of the tread wheel is not new, but its acceleration and the scarcity of alternatives has raised the stakes dramatically. Today, the future for the American economy looms uncertain, if not bleak.
The short circuit that has blown the economy, stems in a design flaw with the conversion from a free enterprise economy to a corporate/state redistribution system. Socialism in any and all forms is the tormentor and foe of entrepreneurial innovation. Wealth cannot be created by legislation. Capital cannot be earned without its access and availability to fund commerce. However, when macro economic policies are intended to restrict or eliminate the means to secure private financing through a system of public favoritism, the consumer is relegated to the inferno of usury credit card interest rates. The small businessman is edged out and often removed as a competitor. Only an apologist for elites will claim there is any sort of a level playing field.
NAFTA is a fine example of an organized transfer of riches and resources from productive domestic enterprises to foreign operations. The U.S. manufacturing trade deficit tells the tale. This is real money migrating from our economy, resulting in permanent lost jobs. The disconnect that most people undergo from the facts of empirical economic reality, avoid the crucial and systemic problem. State/Capitalism is not Free Enterprise!
The distinct payoff for elites - that direct and control economies - comes from their ability to make rules that enrich their crowd, while extracting a constant and incessant levy on the public to pay for the right of living."

Gandalf the WhiteSir GE --- Can you translate the items at that LINK ?#10467306/16/03; 23:51:19

ge (06/16/03; 09:31:31MT - msg#: 104660)
Sorry, but my Turkish is not as good as it used to be !

Black BladeMonkey See Monkey Do#1046746/17/03; 00:10:11

Asian markets are soaring tonight on the heels of the US stock market rally. No real reason really other than US markets did, so why not. Meanwhile gold marches higher as the dollar should remain weak with a FOMC rate cut in the offing and soaring US deficits with no end in sight and no possible solution either.

- Black Blade

Gandalf the WhiteWAY ta GO there SPOT and SPIKE ! TOGETHER now -- JUMP !!#1046756/17/03; 00:10:30

$361.60 is a NEW HIGH for the last few days !!
That is a good level to start JUMPING AGAIN !
Take is slow and easy and rest along the way UP.

slingshotNew Colored Money#1046766/17/03; 00:39:40

Good Morning Forum,
Just read a commentary by Daan Joubert about Japan and the Carry Tax. He states that if this becomes fact in 2004 a new anti-counterfeit notes could come into circulation.Hoarders of cash will face the prospect of paying a tax to exchange their old notes for new ones or lose the full value of their mattress money.

If this is a trail balloon in Japan, will this be associated with the release of the new money ,here in the USA. I have not heard of this before. I agree this could
perpetrate a run to gold. Yet I can not help feeling some restrictions will be involved.

The cautions of Black Blade to put away some cash will have to be monitored for in this case devaluation may take its toll.


Black BladeRe: Slingshot#1046776/17/03; 00:56:22

The "cash carry tax" or cash with an expiration date as proposed by the Fed as one of the "exotic" methods to weaken the dollar would be extremely bullish for gold as people would not be able to save as the plan would be for people to spend to keep the economy afloat. Naturally people would migrate to hard assets such as precious metals to save in lieu of cash. It would also likely destroy "faith" in the US currency. It is an "interesting" concept though.

- Black Blade

slingshotBlack Blade#1046786/17/03; 01:03:10

Something Evil comes this way.

slingshotMorning Fun#1046796/17/03; 01:22:46


TopazPapergold...taking a walk on the wild side.#1046806/17/03; 01:54:52

Acting as if it REALLY IS a force in this monetary world, Gold appears to be shaking off it's currency captors and embarking on an adventure of it's own. PaperGold to da moon...wee:-(
The taxing Cash idea is right on queue, Nothing threatens the System more at this juncture than a wholesale move to Cash... and the "Noise" is just that imo. When the move comes however, taxing Cash on account (as opposed to CiH) will only exaserbate an already acute shortage of the readies, driving a reappraisal of Au and Ag.

BelgianThe cash-carry tax ?#1046816/17/03; 03:16:44

Sort of negative interest rate. This happened already in Switzerland. Wealthy (confetti-rich) people who desired to "shield" their confetti, went to Switzerland and had to pay 0,5%-1% for having their confetti deposited. Banks only wished talking to you (customer) when there was a minimum minimorum of 1 million € involved.

Japanese savers have an estimated stash, equivalent of 10-12 Trillion (T-!) dollars. This is an enormous amount of "savings". How does one fabricates a return on such a huge amount of concentrated savings, within a global economy that has a total GDP of 40 Trillion $ ? Is this japanese savings figure correct and in what form (currency) are those savings ?

I remain convinced that none of these savings can be forced into any kind of coerced consumption. The result will always be a capital flight as was the case in Switzerland.

It is funny that we don't have any figure on the globe's "total" cash savings. Or can "savings" not be defined properly ? Savings in what...Bonds = Debt paper, = loans to the banks,...stocks = overvalued as to cover their debt to equity disaster,...real estate = overvalued against the debts it is carrying...???

Where do all these savings/investments have to find a real net positive return ?

Near Zero IRs over fiat depreciation = a de facto negative IR or return. How much confetti out there is simply shrinking ? Price declines do compensate in increased purchasing power for the confetti. But when your confetti is percepted as getting stronger (buying power) is the growing debtberg getting stronger and more impossible to service the rent on that debtberg ! But this disastrous side-effect remains completely ignored.

With nowhere to go for hiding with your confetti, it is of the utmost importance that Gold isn't giving any kind of signal. Having no fiat can be a problem, but having fiat and NOT finding a heaven for it is almost as bad as the former.

Where is the breaking point, where something is going to crack ? Can global intervention-containment continue and consolidate the whole situation for a much longer period ?
Kind of an hibernation period ? Immobilising undercooling ?
Muddling on and sinking deeper into shifting sands ?
Resulting in more and massive confetti creation as a desperate oxygenator. This looks a very grim picture to me and don't see any lightpoint for a sprankle of cautious optimism !

One gets the perception that the whole globe is on a regime of *price-stability* ! But can the growing debtberg remain stabilized in such a percepted price-balance ? These debts aren't inflated away or lightened. On the contrary, debts are weighting heavier and heavier on a situation of perceived balance. Why was O'Neil fired after he ordered the study on debt that projected the figure of 44 Trillion $ ?

Soon, very little will remain that can be taxed. Tax the confetti that you print and bring into circulation to be carried from A to B and backwards from B to A.

I feel more and more, comfortable, with the yellow in hand...and you ?

misetichUS housing mart at risk if recovery falters-report #1046826/17/03; 04:28:05;jsessionid=EP401E4CVRUDYCRBAELCFEY?type=bondsNews&storyID=2938709


The housing sector is the one prop supporting an economy struggling to recover for over two years as geopolitical tension as increased and the 1990s investment bubble has burst. Analysts are watching the sector carefully for signs of weakness.
But home prices have risen quickly over the last few years, forcing many consumers to spend a higher percentage of their income on housing and leaving them even more vulnerable to foreclosures if they are laid off.

If layoffs do increase, some neighborhoods could face instability and price declines from the resulting glut of homes put up for sale, the report said.
But even if housing prices do not fall dramatically in the long term, housing is increasingly unaffordable, the report said. Home prices and rents have grown faster than inflation since 1975, while while incomes for the bottom 40 percent of households have held more or less steady, the report said.

Thirty-six percent of households struggling with affordability are minority households, the report said.

Affordability problems increasingly affect middle-class households. Seventy-six percent of households that do not live in affordable housing are well above the poverty level, the report said. A household faces an affordability problem if it spends more than 50 percent of monthly pretax income on housing, according to the report.

Is housing the proverbial " next shoe to drop"?...tic..toc. tic. toc..

All On Board The Gold Bull Express

Gondolin(No Subject)#1046836/17/03; 04:32:21

Latest from the Mogambo Guru on the Daily Reckoning, articulating himself as always in an entertaining manner...


I finally have an exact quote from Alan Greenspan as to
what in the heck he thinks this deflation thing is; this
horrible bugbear that is clogging up his mind so much that
he cannot even think clearly.

Here it is: "Corrosive deflation, that is a deflation that
essentially feeds on itself, creates falling asset prices,
which in turn bring down levels of economic activity
through the wealth effect, contracting profit margins and a
type of weakness which we all at least theoretically
conclude is far more of a concern than inflation."

Right. This apparently means, as Greenspan has said, he
cannot see a bubble, either as it is forming or after it
has formed, and therefore does not fear a bubble in
anything, but that as soon as that bubble-that-cannot-be-
seen starts to deflate and bring down those overvalued
asset prices to some semblance of normal value, THAT is the
exact moment that he finally decides to spring into action
and do something about the bubble-that-previously-could-
not-be-seen-but-is-now-seen. Namely, keep it inflated!

who in the dangity-dang-dog, ding-dong hell IS this 'we'
that has the guts to stand up and say, in front of people
who know better, that they ' least theoretically
conclude (that deflation) is far more of a concern than

There may be a "we" that would agree on such a thing, but I
sure ain't in that group. And given the historical record
of economists and their ideas, I am not sure that saying
that some "supermajority-we" of modern economists has
agreed on something can be anything other than alarming.

So who are these "we," anyway?

I need names here! I want to know the exact names of the
people who think that falling prices are a danger, when
they have never said that rising prices were a danger! I
want to see actual names, addresses and Social Security
numbers, and colour photographs would be a nice touch too,
of the morons who think that prices of things coming down,
and thus making them more affordable to more people, after
they have risen so much for so long, is something worse
than the inflation which drove prices too high to start

-end snip-

When you put things in plain English they're so much easier to understand. But obviously understanding of the issues by the general public is not really what AG is looking for.

Topaz@ Gondolin...Mogambo's dilemma.#1046846/17/03; 05:33:32

It was announced today sections of the Aussie Coal industry are being forced to curtail activities due to the deflationary effect of the stronger A$. A small example of whats ahead as "prices" in US$ (or in this case Yen) when converted to the Exporters currency are deflating....Coal hedging is usually only a 12Mth thing, and time is up!
This effect can be extrapolated right across the board and will effectively decimate + International Trade. The other (main) consern is the Futures arena (when Cash leads ANY futures arrangement) ie: Systemic Nightmare.
Your Dollar HAD to devalue vis the Index (with $ denominated supply/demand fairly static) to export your own deflation, but the point is now reached where further erosion isn't possible imo. The one shining light these past 18Mth's has been R/E...but we now see cracks appearing here too...Not a pretty contemplation.

THX-1138 LOTR makes another mint at the bank #1046856/17/03; 05:42:08,2106,2540137a11,00.html

I can't believe nobody hasn't posted this yet. :)

A set of coins featuring designs from The Lord of the Rings films will become legal tender this year.

The currency has been commissioned by New Zealand Post to coincide with the release of the final part of Peter Jackson's movie trilogy, The Return of the King, in December.

Officials are deciding which famous characters from the big screen version of JRR Tolkien's novels will appear on the coins but hope to finalise plans in July.

The coins will come in denominations from 50c up to $10 and are being made from gold, silver and cupro-nickel by the British Royal Mint.

A release date for the coins, which will be available individually and in presentation packs, has not been set.

New Zealand Post officials said the launch was likely to closely follow the issue of a third set of The Lord of the Rings stamps on October 1.

mikalAmerica's predicament of ongoing global backlash demands a new role and new internal focus#1046866/17/03; 07:17:34

CBC News- Indepth: What the World thinks of America
"new American Empire"

AlbatrosPOG in AUD#1046876/17/03; 07:59:42

Greetings Goldbugs. Have been puzzling over various currency values and trying to work out what's going on with the USD going "down" and gold going "up" etc. I'm an Aussie & the AUD has been rising against the USD in almost precise inverse harmony with the fall of the USD against the Euro. The UKP has been falling against the Euro, almost mirroring the fall of the USD against the Euro. The AUD has been fairly steady against the Euro, which effectively erodes the gains made with increases in the POG caused by the "falling" price of the USD. The siliarities in the graphs are interesting. I would like to view a historical graph of the POG against the Euro. Does anyone know where to find one? I'm suspecting that the POG must be keeping relatively stable against the Euro. Can anyone explain what's going on? Does the Euro "Rule"?!!
Socrates964Gondolin#1046886/17/03; 08:15:57

Actually, on this one, I think that Mogambo protests too much, and that Sir Alan the Obscure is actually being uncommonly candid. The We is everyone who is in debt (i.e. most of the US), since, to paraphrase Love Story, 'Inflation means never having to say Sorry I can't pay you back'.

If your masters are politicians and the debtors have far more votes than the creditors (e.g. foreigners), where do your loyalties lie? Seems like a no-brainer to me.

Socrates964Albatros#1046896/17/03; 08:43:19

Can't find you a link, unfortunately, but my take on the Euro is that:

1. It has broken a key resistance around 1.14 and is now heading towards 1.29. The driving force behind this is simply holders of large quantities of dollars wanting to diversify away from what is now seen as a currency with severe structural weaknesses - hence Jim Sinclair's point that such parties (mainly Asian central banks, IMHO) are so keen to get out of dollars, that the great double act in which US bond and stock markets levitate at the same time, is having little effect on demand for dollars. The rest of the world just doesn't want to play with Uncle Sam.

Unless you believe that US bond/stock markets will carry on rising (those who believe in this remind me increasingly of the Monty Python sketch about buildings put up by hypnosis which stay up for as long as you believe in them), then sooner or later these unravel, and if the dollar doesn't rise when its capital markets are going up, then presumably it goes down when they start going down. Besides, Easy Al has been goosing markets for nearly 3 years - to what effect? As I previously mentioned, I have early July pencillled into my diary as a good time for a short on the Dow.

As for Euro/gold - gold looks like a show me story, since it has not yet made a definitive break out into a primary bull market (which it does by a definitive penetration of $380), while the Euro is red-hot. Also, the buyers are smart enough to know that only physical gold is worth buying. Hence, until gold can earn its spurs, it looks set to languish in the lower half of a E300-340 range.

I nevertheless think that Euroinvestors regard E300 as screaming buy territory. Hence I regard this as a rock solid floor, although until gold makes its real move, why push the price when you can't get your hands on the metal?

Once the Euro hits 1.29, the ECB will probably start massaging it to stop Euroland's BoP from going too far into the red. The move up there will probably be sufficient to break gold through $380, and hey presto, gold will start to appreciate in Euros. All that is required is patience.

Btw, note that sterling has started to strengthen again. I suspect that the BoE is operating a discreet peg (or crawling peg) to the Euro.

GondolinTopaz, Socrates#1046906/17/03; 09:33:23

Thanks for your comments. Still new to many of the concepts discussed here, and try to look at them all from every angle. AG is caught between a rock and a hard place it seems. So when deflation will decimate the US economy and international trade and (hyper)inflation will destroy the US dollar/ economy and also decimate international trade, what option does this leave?

Is this where the stagnation and stagflation phrases come from - keeping a handle on the descent of the dollar, now that the policy (or necessity) appears to be allowing/managing dollar value to slowly re-adjust downwards? Or is this just bandying words around so as not to use words like deflation and hyper inflation that will alarm holders of US dollar assets?

Changing topics slightly, reading the Archives and Another/FOA has given me a great deal more insight into matters, but pose even more questions. Reading Miner49 in the Hall of Fame he has indicated that following the slow transition to the euro it may be possible to hyperinflate all foreign held US debt out of existence, inferring that all the foreign debt will just disappear, and not 'come home to roost'.Is this possible? Or have I read this wrong?

USAGOLD / Centennial Precious Metals, Inc.Featuring BULLION to help you build your portfolio's base#1046916/17/03; 09:52:09">Gold Buyers Group Special
TownCrierAlbatros - POG chart in euro, dollars, yen, and Swiss francs#1046926/17/03; 10:40:42

The uppermost chart on this page (see url) will give you a look at the prices on a relative basis during the past year and a half.


Socrates964Topaz#1046936/17/03; 10:40:54

"he has indicated that following the slow transition to the euro it may be possible to hyperinflate all foreign held US debt out of existence, inferring that all the foreign debt will just disappear, and not 'come home to roost'.Is this possible? Or have I read this wrong?"

It is possible, but unlikely. Consider the average 3rd world country that gets into trouble - usually its domestic currency debt is largely held by domestic investors who are a kind of captive audience, hence they can be coerced into holding onto their bonds and absorbing capital losses through inflation (since the alternative is higher taxes).

For international debt issued in another currency, usually the economy in question runs out of foreign reserves and has to default or sit down with creditors and restructure, with creditors getting so many cents per dollar of face value.

The US is a special case, since its domestic currency is the world's reserve currency, so the outcome is likely to be closer to the first scenario than the second.

It is thus likely to use all its powers of coercion/persuasion to get its external creditors to hold onto their bonds, so that it can pull the inflation trick on them - to which they may respond by pulling the rival trick of devaluing their own currencies even faster than the dollar (basically what Japan appears to be trying to do, and failing miserably at it).

Let's assume that the external creditors refuse to fall for a slow comfortable inflationary screwing (as the French refused at the end of the 1960s, exerting their right to change greenbacks into gold) - the US can then threaten to default or it can impose exchange controls so that, yes, you can sell your bonds, but have to keep your money in the US, in dollars, which is just as bad. What do external creditors do then - the best option is to buy US stocks, as they are likely to withstand inflation best - but will central banks actually do this? Who knows?

There is no single answer to your question, since it comes down to what kind of deal creditors and debtors cut with each other.

Your guess as to what is likely to happen, is thus as good as mine. FWIW, let's assume that the default event happened under the Bush administration - I would expect the US to take a 'F*** You!' stance and default on its external obligations, as it did in 1971. Would they write down their debt? Probably. Would international confidence in the dollar as a store of value be immediately destroyed? - Probably. Note however, that this doesn't mean the end of the dollar, because it is still likely to be accepted as a means of payment, even if no-one wants to hold it, simply because there are already too many greenbacks out there and because I can't see the Brazils/Russias/Canadas of this world prepared to go head to head with the US and say, sorry guys, those soybeans/that oil etc. that you ordered has to be paid for upfront in euros. Everyone will thus take dollars and immediately try and get rid of them through the back door. This points to hyperinflation in the US driven by rises in the dollar prices of primary commodities. What I'm not sure about is whether you get a credit crunch in those economies that were caught long of dollars and have to take a huge write-down on their foreign reserves (e.g. Asian economies). As suggested, I suspect that they try and offset this with competitive devaluations.

AlbatrosSocrates964 & TownCrier#1046946/17/03; 12:02:16

Thankyou both for replying. Has helped. Noticed POG spiked after I posted my query. What did I say ???????
R PowellAlbatros#1046956/17/03; 13:38:43

Your words...

"Thankyou both for replying. Has helped. Noticed POG spiked after I posted my query. What did I say ???????"

I'm not sure which word or words did the trick but I'll ask you to please continue and perhaps speak with a bit more volume so you can also be heard by the boys (and girls) in the silver pit. Thanks,

Belgian@ Albatros#1046966/17/03; 14:40:35

Gold in ecu-euro since 1998. A nice "dome" pattern. Roof must be pierced !
A 20 yrs euro converted chart can be found at
This is a jewel ! A 20 yrs chart with the most explosive characteristic pattern that one could dream of. Forgive me my unbridled enthousiasm.

geSir Gandalf #1046976/17/03; 15:13:35


Basically the journalist says that Council of Foreign Relations made a meeting at Turkey, and such a thing had never happened before. She asks, why now and who invited them. The timing, she maintains is related with the US design of a new Middle East map. Those who cannot understand this timing, she says, will understand it as the US operation targeting Iran, Azerbeycan and Middle East starts.

She had contacted with various sources, to obtain information about these meetings. Some had said that, the meetings were surrounded with secrecy. However, one of the behind-the-curtain figures of the ruling Justice and Democracy Party appears to have talked very freely on this subject. He says that instead of talking to US politicians who are here now, and may not be here later (alluding to the re-election difficulty of Bush), they have decided to talk to the real power brokers of the US. He rates CFR to be within the top 5 of the world, and says that are one of the permanent decision makers.

After informing the reader that, another news agency had also made a news of this meeting, and quoting the agency news, she then starts to give some information about CFR, the Politburo of Secret World Government… Famous members… Committee of 10, 40 etc, circles within circles….Decides about wars and finacial operations…

------not an exact translation, but I tried to be true to the meaning---

a nation of onedow#1046986/17/03; 15:59:24

Does anyone know what is happening that is causing the DOW
to keep going up? There does not seem to be any real reason for it. What seems to make the most sense?

R PowellA nation of one#1046996/17/03; 16:59:00

How about Irrational Exuberance. If the money supply is increasing, then something somewhere is being targeted for investment. Real estate and bonds are already up so I guess stock equities are becoming fashionable again. I don't believe commodities have seen too much of this new currency liquidity yet but I haven't given up hope yet. Are you still holding gold futures?

21mabry(No Subject)#1047006/17/03; 17:08:19

The fed has increased money supply, interest rates are going lower,Bush knows the only way he will be relected is with a rising stock market he will do everything in his power to pump up the market.All the general investment public knows is equity and bonds thats were the money will go until there is a seminal event that shifts thinking.21
GoldendomeR Powel#1047016/17/03; 17:09:20

Looks like the rising tide (of liquidity) is lifting everyone's boat, no matter the sector. ----Gdome
21mabryGdome#10470206/17/03; 18:27:25

Hello Gdome alas the ducks came up short in their quest for Lord Stanleys silver cup. 21
GoldendomePorter Stansberry article#10470306/17/03; 18:43:05


America is bankrupt.

Huge numbers like $44.2 trillion don't mean much to anyone without a comparison. So, consider: Uncle Sam's "financial imbalance" is 10 times the size of our current national debt.

In order to achieve current solvency, the government would have to raise payroll taxes by 68.5%, beginning today. Alternatively, the government could cut Social Security and non-Medicare outlays by 54.8% immediately and forever. (How do you think either policy would go over at the polls?) Most likely, nothing will happen. And so, the government's insolvency will grow much larger. By 2008, it will reach $54 trillion. To reach solvency at that point, taxes would have to increase by 73.7%.

Comment: It's doubtful taxes would be raised in a manner to cover any of these defecits. When you're the the U.S. Government and you run the Ponzi scheme(Worldwide) and the fiat money scheme, it will become much easier to pay off future Payees by just creating inflationary dollars, than by trying to force higher contributions through increased taxes. Right now things seem benign enough, as everyone in this country and around the world has so much invested in the dollar payoff that it's, "One more turn of the wheel... just gimme one more turn." Sometime in the next ten years...some groups "effective attitude" is going to change--then watch out. "Argentina here we come."


Goldendome(No Subject)#10470406/17/03; 18:50:01

Hello, mabry. Yes, too bad, but it was an exciting series. Cann't remember when there was such a home and home series in any sport. Maybe you can refresh me on that.---Gdome.
Druid44 Trillion#10470506/17/03; 19:02:43

I can't even conceive of this large a number. Neither can most people, they, by in-large, parrot these numbers like there is real meaning behind them. Convert this number to miles and how far in the universe would it take you starting from earth and going anywhere? Given our fastest aircraft, how many years would it take to travel this distance? These are just menial questions one might actually consider when spewing these numbers around. Like a good friend of mine(who was working on his PhD. in neaural networks) once said when confronted with these sets of numbers, "pick a number, any number, because there is no real meaning behind them." People have difficulty with gold in the thousands, really!
MKAll.. . . #10470606/17/03; 19:20:13

Wanted to let you know that I've been immersed in News & Views for the past week and devoting all my energy to that. I'll begin to add and rebuild on the Commentary and Review page tomorrow morning, God willing.

I am very impressed with the gold rally today and have to say that somebody is supporting this market though I can't decipher if it's paper or reality based. My guess is that we either have a hedge fund on the spec or another mining company covering. Let's face it: It doesn't play well with stock investors these days to be a hedger, so I wouldn't be surprised to find out that someone big is on a covering binge and putting a floor under this market. Those mining companies that haven't gotten the message by now probably aren't going to get it. The move in Newmont shares is indicative of a substantial trend -- not so subterranean, if you know where I'm going with this.

On the reality front, it keeps cropping up in my thinking that hard metal is going to have to be found at some point to repay the central banks and, as the price goes higher those creditors can only be registering bigger numbers on the fright meter. And these acquisitions will be in an environment where mine production is falling, central banks are curbing their sales, and other central banks are looking for metal wherever they can contract it. Unlike the late 1960's through mid-1970s when the US and the IMF stepped to the plate, there is not enough supply coming from the official sector to sop-up the trillions of dollars hot-wiring around the globe. It will have to come from the ground and investor holdings. Fat chance they'll see anything worth getting excited about.

What's more, believe it or not, we haven't even seen 30% of the covering I think we are going to see -- even now!! And then you got the Welteke divisions in Europe in full retreat as the dollar nightmare moves into Phase Two.

The stock market? Where's the value, my friends? This is an inflation rally, and you do not need to use consumer price index readings to ascertain its extent. Foreign money will not follow....will not sustain!!

Anyway, more tomorrow. Don't let the price go over $400 before you realize that something is going on here beyond what the mainstream press is letting on.........MK

Stranger.........great to see you back. Hope you have more to post. Appreciate, as always, your esteemed presence at this Table. Much that you and I and many others have worked for over several years period of time is working toward fruition. Without even talking to you, I know that you are getting the same vibes I am in that respect. In fact, it's palpable.

My best........Onward, my fellow goldmeisters.

misetichMoney funds scraping bottom #10470706/17/03; 19:59:39


But the prospect of additional cuts is stirring concern in the money-market fund business.

Taxable money-market yields average 0.70 percent after expenses are subtracted from portfolio earnings.

If the Fed reduces the federal-funds rate when it meets June 24-25, as some analysts think it will, money-fund yields could fall close to zero or lower for some funds.

That could create turmoil for financial-services companies with the highest expense charges, since they will have to cut costs to pay their bills without dipping into principal.
A quarter-point rate cut, for example, would knock average money-market yields down to 0.45 percent, putting 142 funds in danger of posting negative returns if they don't cut fees. Still, those funds would represent only 2.1 percent of total money-market assets, according to money-fund tracker iMoneyNet.


Going from bad to worse

All On Board The Gold Bull Express

Cytek@ BlackBlade -- RE: Natural Gas Reserves#10470806/17/03; 20:40:36

BlackBlade: I know your up on NG. Any idea about the Natural Gas reserves and how bad the shortage is. Also, is there a weekly or monthly report on the reserves and where can i find it.


Black BladeRe; Cytek - Weekly Natural Gas Storage Report#10470906/17/03; 21:16:25

The link above can be accessed for weekly injection and storage data that comes available every Thursday morning at 8:30 am (est). Storage injection has been very high due to the deepening economic recession, mild temperatres, and minor fuel switching. The biggest culprit appears to be stripping of pipelines that tend to be used as additional storage during spring and summer months during rebuild, however, with the high NG prices now storage operators are scrambling to buy whatever is available rather than higher future prices. This will continue for at least a couple of more weeks until that supply has been taken and summer temperatures rise. Wall Street apparently thinks that there has been an increase in production and prices have come down slightly. This time around it is supply driven rather than demand driven. It should get "interesting".

- Black Blade

Black BladeCanada Cannot Solve Our Natural Gas Problem #10471006/17/03; 21:22:34


In recent weeks, the emerging natural gas (NG) supply problem in the United States has been well documented by a steady stream of commentators including Andrew Weissman of Energy Ventures, Ellen Hannan at Bear Stearns and, perhaps most convincingly, Matt Simmons at Simmons International. These analysts have noted several crucial issues: (1) U.S. NG inventories are at some of the lowest levels in over a decade with only 990 bcf in storage compared to 1775 bcf last year and a five year average of 1,520 bcfpd. (2) U.S. NG production has steadily declined in recent years from 52.1 bcfpd in 1998 to 48 bcfpd in 2003 and is projected to drop to 44.3 bcfpd by 2007. (3) Despite this erosion of production, the United States has installed upwards of 220,000 MW of NG fired electric generation capacity in the last several years and continues to add more almost weekly. In just the last month alone, for example, Mirant began commercial operation of its 533 MW NG plant near Las Vegas and Tampa Electric began operation of its 750 MW Bayside 1 NG unit while announcing Bayside 2 (1,000 MW) will begin operation in January. The Bayside facilities replace the retiring Gannon coal plant – thus, a net increase of NG usage.

Black Blade: Good comments by Andy Weissman at the end of the article.

Black BladeComing Natural Gas Crisis - Another View #10471106/17/03; 21:38:17


I read the press release about Secretary Abraham's speech to the National Petroleum Council with great interest. It seems that we are doomed to re-live the 1970's. Let's learn from history and do a better job this time. As those who were old enough to watch the energy industry back then will remember, in the early 1950s the U.S. Supreme Court originally imposed Federal regulation over the price of natural gas sold into the interstate markets. Fast forward to the 1970's when oil prices spiked as a result of what was called the "Arab" oil embargo in 1973. The power industry, faced with huge increases in fuel oil costs, began switching to "cheap" natural gas. Industry, meanwhile, had limited incentive to drill and develop new gas supplies, at least for gas that would be sold to interstate pipelines at low regulated prices.

Then came the winter of 1977-78, when we saw curtailments of gas deliveries to schools and hospitals in some parts of the country—but not inside states where gas prices had been deregulated. The response to that crisis was to impose a complex and expensive set of regulations designed to provide incentives to develop and produce new gas (but not allow producers to receive deregulated prices for "old" gas) and to restrict the use of gas as a fuel in power generation. The regulations spawned their own cottage industry of auditors, administrators, and accountants, further driving up the cost of finding, developing, and marketing gas reserves, but also spawned (together with extremely high oil prices) the largest drilling boom the U.S. has ever seen. We also saw interesting developments in the power industry, such as the coal-fired power plant that sits in the middle of a gas field in Northern Oklahoma.

And here we are again - back in 1978. We've had a cold winter in the region that consumes the most gas during heating season. Unrest in the Middle East is back in the headlines. And, once again, we're "running out of gas." However, the political will to pass comprehensive energy legislation that existed after the "crisis" of 2000-2001 disappeared when prices fell in 2002. Apparently we only respond to crises, and typically the responses involve more, not less, government intervention in the marketplace. But the FERC still has not completed its review of, and response to, the situation in California that happened 2 years ago. How can it react to and plan for this winter? Somehow the gas industry has managed to keep the heat going for the past many years. It will most likely take service curtailments and facility closures to demonstrate how serious the problem is and how much it costs us in terms of jobs and economic growth - and if it does occur, right before an election year, energy will regain its place as the Number 1 topic in Washington.

Black Blade: And so it goes. As George Santayana said: "Those who do not remember the past are doomed to repeat it".

PizzA little justice?#10471206/17/03; 21:44:19

Been just a bit busy the last couple months trying to turn around a dealership that was represented to me as the equivalent of having a cold, when in reality it's more the equivalent of SARS.

Had a senior staff meeting last week with our "sales executives" requesting recomendations for cutting company expenses 20%. Sales and gross profits are down just a bit. Friday I got the recommendations back, and nearly to a tee, they all agreed we should eliminate (decimate)headcount in our five support departments. President of the company was impressed and asked me to think on it over the weekend.

I did, and Monday I cut sales management compensation 20% and fired the two top sales "executives". President is in a state of shock and company moral is up about 100%.

If a few hundred thousand overpaid corporate executives around this country got the same treatment from their boards, and if we could blow out the FED and most of the upper end of governments, we might have a chance pulling out of this mess, but. . .

I think we still should keep buying the yellow stuff.


P.S. . .find a copy of the old disco song "Last Dance" by Donna Summers and imagine it as the closing song to Kudlow and Cramer. . . .LMAO listening to it while they were on the tube.

KiloDruid - 44 Trillion in perspective#10471306/17/03; 21:49:44

To travel 44 trillion miles, even at the speed of light (~186,000 miles PER SECOND) would take over seven and a half days......

or 1,766,958,281.7 times around the circumference of the earth.......

or a stack of freshly printed one dollar bills measuring 2,980,448 and 1/4 miles, or 12 separate stacks of dollar bills reaching from the earth to the moon, with "change" enough for another stack reaching half way again to the moon.

Needless to say...... A BIG NUMBER !

Black BladeMarket Wrap Up – Hartman#10471406/17/03; 21:50:15


Sector Winners

The biggest sector winner for the day was precious metals with the XAU Gold & Silver Index adding 2.87 to close at 82.24, a gain of 3.6%. The continued policy of monetary easing by the Federal Reserve and fiscal stimulus from the government has created an environment for unprecedented inflation. The fundamentals for the precious metals sector couldn't get much better. As governments around the world work feverishly to increase the supply of paper money to re-inflate the global economy, they are devaluing the money itself. As money loses value globally, it will require more paper currency to buy the same amount of physical goods.

Global currency devaluations are just now beginning to add value to the precious metals sector. This will really be a fun group to watch as retail investors begin to see the light. The market caps of the precious metals mining companies are so small that even a partial interest from the general public will send the mining companies to the moon! Once things get going, it should be a rocket shot! Just look at the chart for Newmont Mining. The blast-off in 1978 and in 1987 for Newmont came with tremendous stress on the financial system as we have today. Both of the big run-ups saw the stock price increase to the tune of 500%. Now wouldn't that be nice! It's impossible to know the exact timing of the blast-off, but it's not far away! Patience, patience, and more patience. It will be well worth the wait!

Black Blade: Some here may remember that I talked of this possibility resulting from the global "Currency War" as major trading blocks work to debase their currencies for a competitive edge in an ever shrinking global economic pie. Add to this the rise of inflation over nominal short-term interest rates leading to negative short-term "real" rates making precious metals desirable with virtually no opportunity cost (with yet another rate cut coming next week). Wall Street bankers and brokers will soon be singing the tune "Welcome To My Nightmare".

Black BladeJury: Lehman Bros. Helped Cheat Borrowers#10471606/17/03; 22:04:20

Federal Jurors Say Investment Bank Lehman Bros. Helped First Alliance Cheat Borrowers


SANTA ANA, Calif. (AP) -- Federal jurors found that investment bank Lehman Bros. Holdings Inc. aided and abetted mortgage company First Alliance Corp. in a fraud scheme, awarding $51 million in damages to about 4,500 borrowers. The U.S. District Court jury on Monday assessed 85 percent of the damage award to Irvine-based First Alliance and its executives, and 10 percent to Lehman Bros. Jurors also apportioned 5 percent of the damages to MBIA Insurance, which insured First Alliance's mortgage securities. But because MBIA was not a defendant, it will not pay.

Black Blade: Speaking of scammers, the name Arthur Andersen keeps coming up. Three Dynegy execs were busted this week in a fraud scheme and their auditor was none other than the "master of disaster" Arthur Andersen. Oh yeah, Tyco now will restate earnings back to 1998, and Fannie Maes problems seem to just get bigger. Of course Arthur Andersen figures with these companies as well. Every company that use AA had better recheck their books.

Cytek@BlackBlade#1047176/17/03; 22:10:36

Thanks BlackBlade good stuff.
Gandalf the WhiteWay ta GO, Sir Pizz --- THAT story is GOLDEN !!! <;-)#1047186/17/03; 22:14:34

"President of the company asked me to think on it over the weekend. I did, and Monday I cut sales management compensation 20% and fired the two top sales "executives". President is in a state of shock and company moral is up about 100%."
Sir Pizz --- The Hobbits LOVE IT !! No one saw you when you came riding into Town ! NOW, everyone knows that there is a NEW SHERIFF in Dodge.



Here's what one Journal story recently had to say about inflation: "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.' "

I've been crusading against the way the government reports its inflation numbers for a long time. This isn't just about some statisticians messing around with digits to distort the truth. This is about Washington cheating people out of money - Social Security recipients, retirees whose annual increases are tied to the inflation rate, people who invest in bonds. Lots of people. And lots of money. People are getting screwed. And, back when I was in school learning this miserable trade, that's what we were told to ferret out. Let me explain something else. Jackman isn't just one of the thousands of economists in our government bureaucracy. He is the senior economist in charge of the consumer price index. He is the man. And he's a guy I've spoken with in the past - but never when he was as forthcoming as he apparently was with the Journal. And the man says - according to the Journal's own words - that the "widely reported numbers understate the rising cost of life from one year to the next."

But "not much" inflation doesn't mean deflation, does it? And if Jackman is right, the "not much" being reported by the government is probably not true. As I've said before, if you take out all the tricks that Jackman was referring to, the rate of inflation is probably around 5 percent a year. That's certainly not deflation. What tricks?

The government uses a statistical technique call "geometric weighting" so it can keep inflation down. The theory behind this is that people will switch to cheaper products - like hamburger - if steak gets too expensive, so the price increases are offset.

Then there are quality adjustments. If a new feature like mandated pollution equipment is added to a car, then a price increase can be ignored even if the customer has no choice but to pay for the upgrade. You pay more, but inflation goes down.

And there's the famous "intervention analysis" technique. If something like gasoline goes up more than the government's computers expect, then the increase can be reduced. "Smoothed out" is the euphemism the economists use.

Black Blade: Not only is there "hedonic deflators" as described above, but there are other statistical filters used to "screw" Americans. There is the usual "seasonality" for example, but my favorite is still "imputed income". For example you own your own home but if you had to rent the place that "imputed" rent goes right into your pocket and bingo! – your income just magically increased. What I love about government statisticians is the innovative ways they can abuse data to steal from the people. Think on that when you see a little old lady pinching pennies at the supermarket to buy cat food for her next meal while trying in desperation to make her Social Security check stretch out to the end of the month. Better yet, think of that when you see our rulers in tuxedos swilling Dom Perignon and gobbling up Beluga Caviar at $10,000 a plate fund raising dinners. What was that slogan in the book "Animal Farm"? Oh yeah, "All animals are born equal, except some are born more equal than others". The difference is we elect our animals.

Gandalf the WhiteATTN: Sir Rich --- Did you notice that the UP leg started TODAY ! <;-)#1047206/17/03; 22:49:45$GOLD,P

Now just hold on tightly for the GOLDEN ride !
Jump SPOT, JUMP !!

TopazGondolin, anoo.#1047216/17/03; 23:30:24

Imho, Deflation and Hyperinflation are manifestations of the same thing...related to a lack of confidence in the future(s). Otoh INflation is a Horse of another colour related to over-confidence.
The current SM rally it would seem is a futures driven phenomenon being supported in the physical market by Mutual and Index fund Managers etal who, as Q2 reporting nears, are scared witless their Portfolios will underperform if they stay out. Mums and Dads are staying away in droves.

steadysmarter people buy gold!#1047226/17/03; 23:38:34

We work for paper, but the smart people run the presses.
21mabryHousing#1047236/17/03; 23:44:12

An analyst on Neil Cavuto show on fox claimed we could have a 10 year bull market in housing in front of us.This sounded like Dow 20,000 type talk to me.When you hear talk like that its time to start getting nervous.If there is one thing I have learned from the stock market its when people say its diffrent this time ,take your profits and run.21
Aragorn IIIA far-reaching character study.... (?)#1047246/17/03; 23:47:45

THX-1138... Thank you for N.Zealand's LotR coinage news. This inspired a thought to share on a related matter.

There was early this year, at thought-provoking Asia Times, a unique and worthy assessment of collective consciousness as expressed through the LotR phenomenon. It is a worthy study with relevance for the economic thinker if you believe, as I do, collective consciousness holds court at the market and the election polls, two cornerstones of the economy.

I have provided the link. Should you choose to delve into this article, bear in mind the author offers good observations, but it should be noted he fails to pin the tail on the proper donkey.

He brings this forth among his introductory and concluding remarks:

@@@@@ from link @@@@@
The 'Ring' and the remnants of the West
By Spengler


The most important cultural event of the past decade is the ongoing release of the film version of J R R Tolkien's The Lord of the Rings. No better guide exists to the mood and morals of the United States.

The rapturous response among popular audiences to the first two installments of the trilogy should alert us that something important is at work. Richard Wagner's 19th-century tetralogy of music dramas, The Ring of the Nibelungs, gave resonance to National Socialism during the inter-war years of the last century. Tolkien does the same for Anglo-Saxon democracy.
Tolkien well may have written his epic as an "anti-Ring" to repair the damage that Wagner had inflicted upon Western culture. Its revival in a reasonably faithful cinematic version has far-reaching effects on the popular mind.


It is hard for us today to imagine what a cult raised itself around Wagner after the 1876 premiere of his Ring cycle. Compared to it the combined fervor for Elvis, the Beatles, Madonna and Michael Jackson seems like a band concert in the park. Perfectly sensible people attended a Wagner opera and declared that their lives had changed.

What precisely did he do? Wagner announced the death of the old order of aristocracy and Church, of order and rules. Not only was the old order dying, but also it deserved to die, the victim of its inherent flaws. As the old order died a New Man would replace the servile creatures of the old laws, and could make the world according to his will. Wagner's dictum that the sources of Western civilization had failed was not only entirely correct, but also numbingly obvious to anyone who lived through the upheavals of 1848. But how should one respond to this? Wagner had a seductive answer: become your own god!

Wagner cobbled together a new myth. The Norse god Wotan personifies the old order: he rules by the laws engraved on his spear, by which he himself is bound. To build his fortress Valhalla he requires the labor of the giants, and to pay the giants, he steals the treasure of the Nibelung dwarf Alberich. Alberich won the treasure with a magic ring he fashioned from the stolen Gold of the Rhine River. Wotan covets this ring, which gives its bearer world mastery, but is compelled to give it to the giants.

Wagner's audience had no trouble recognizing in Wotan and the other immortal gods the ancient aristocracy of Empire and Church, who made a fatal compromise with capital (the Ring of world domination) and thus sealed their own doom.

Tolkien himself despised Wagner. He did not emulate Wagner's Ring, but he recast the materials into an entirely new form. The Lord of the Rings is an anti-epic, whose protagonist is a weak, vulnerable and reluctant Hobbit, as opposed to the strong, wound-proof and fearless Siegfried. The Hobbit Frodo Baggins does his duty because he must. "I wish the Ring had never come to me! I wish none of this had happened!" he exclaims to the wizard Gandalf, who replies: "So do all that come to see such times. But that is not for them to decide. All we have to decide is what to do with the time that is given to us." No utopian is Gandalf; what one must do is to muddle through.

The kingdom of Men that emerges from The Lord of the Rings is a humdrum affair, in which the best men can do is to get on with their lives.


Those who hold America in contempt for its lack of refinement should think carefully about this conclusion. From their founding on Christmas Day 800 AD, when Charlemagne accepted the crown of the revived Roman Empire, the institutions of the West have been formed in response to external threat. The Holy Roman Empire of the High Middle Ages, Tolkien's conscious model for the Kingdom of Gondor, arose in response to the incursions of Arabs in the south, Vikings in the north, and Magyars in the West. Boorish and gruff as the new American Empire might seem, it is an anti-empire populated by reluctant heroes who want nothing more than to till their fields and mind their homes, much like Tolkien's Hobbits. Under pressure, though, it will respond with a fierceness and cohesion that will surprise its adversaries.

Orcs of the world: Take note and beware.
@@@@@ from link @@@@@

He asks that we believe the happy applicability of this coming-of-age tale to be uniquely American. This view is overly narrow if popular appeal is to be our guide to collective consciousness among we the people. Evidence shows many non-Americans have booked passage on this same boat from the Grey Havens. "Literally speaking" of course!

The shared international appeal should not to be missed. The original Anglo document has been joined by translations for more than 35 other languages. Thirty-five! Broad global coverage is assured through English, French, Dutch, German, Russian, Italian, Spanish, Portuguese, Chinese, Japanese, Korean... fully twenty additional translations to fill the many corners.

You may find it especially notable (in a non-Anglo regard) that LotR received official endorsement from China in the form of inclusion on a reading list prepared by the Chinese Government several weeks ago to assist citizens passing time at home to stem the spread of SARS. Further demonstrating credibility to the serious and practical opportunity of the officially recommended reading material, the '16th Party Congress Report' was listed atop the order, with Tolkien later, none the less for the subordinate position.

Publisher Houghton Mifflin expands this view of international relevance:

'When J.R.R. Tolkien published the first volume of The Lord of The Rings, The London Sunday Times stated that the world would forever more be divided into two types of people: "those who have read The Lord of The Rings and those who are going to." Never before in contemporary times had an author dared to create an epic quest that rivaled the classic legends of Homer and Chaucer in scope, yet was utterly accessible to readers of all ages and nationalities. The book stoked hungry imaginations across the globe. It also became a counter-cultural symbol because of its prescient themes of environmental conscience and battles against the forces of corruption and war.'

In one corner of this world we share, New Zealand filmmaker Peter Jackson took inspiration and said of the unfolding effort, "I've spent seven years of my life on this project so far, pouring my heart into every single aspect of it. But I think that's the least we owe to Tolkien and the legions of FANS AROUND THE GLOBE. They deserve our very best efforts."

Retouching thematics for another moment, Jackson states further:

"All the major themes are introduced in The Fellowship of The Ring. The most obvious one is good versus evil but this story is also about how friendship endures and overcomes even in a world of tremendous upheaval and change. We really tried to make these themes part of the fabric of the film."

In actor Sean Bean we find a good position to offer insight to the tragic hero he portrays, Boromir. In his fatal attraction to the power of the ring some may see here one incidental easy parallel to draw with a U.S. government tragically under the growing addictive spell of monetary hegemony. "Boromir has the human qualities of being honorable and brave but also having a very clear opinion about everything. In the beginning, he sees The Ring [hegemony] simply as a solution to the problems of his people. But he finds out that it isn't quite so clear-cut, especially as he becomes susceptible to its powers."

For the analogous context, turning to Jackson again, "The evil is more psychological, intangible, something each character encounters in his or her own way."

If movie attendance is to add to our test of prevailing winds, the orcs that article-writer Spengler insists must "take note and beware" should in fact find concern for more than uniquely the American sphere of influence. Whereas the two LotR installments thus far, "Fellowship" and "Towers" have placed at #11 and #7, respectively, on the all-time USA box office listing, on the international all-time (non-USA) box office these two installments notably placed higher at #6 and #4, respectively. I conclude the "orcs of the world" will find little refuge anywhere they look.

Of those few movies placing higher, only "Titanic" (1997) was common to both USA and non-USA box office lists. From this in hindsight dare we conclude that collectively we ALL were steeling our nerves, soon thereafter to go down with the global financial ship as stock markets foundered three year later?

Filmmaker Jackson has said of the effort, "The cast often referred to me as a hobbit. I'm sure it's a joke but to tell the truth, the hobbit lifestyle -- good food and a comfy chair in front of a fire -- sounds pretty good to me!"

What might we make of this rambling character study? Writer Deborah Rogers wrote, perhaps presciently, in 1975 "Aragorn's good work is that of the restoration of the king on earth. And this is a type, a figure, a symbol, of the happy turnabout of the restoration of man as a race. Individually we are hobbits; collectively we are Aragorn."

I happily leave it to the many fans and LotR scholars to derive the meaning in this.

got gold?

Gandalf the WhiteHEAR HEAR !!! --- Greetings to the KING, Sir Aragorn III#1047256/18/03; 01:12:15

Aragorn III (6/17/03; 23:47:45MT - msg#: 104724)
A far-reaching character study.... (?)

Mr GreshamWho is Hugh Thompson? Hey, YOU there!#1047266/18/03; 01:13:26

I was going to read Aragorn after posting this excerpt from the Daily Reckoning, but I see he has presaged it perfectly. (You must click on the Daily Reckoning's title at left "Your Papers, Please", by Butler Shaffer.) My thought is that, if we are wrong in our alarms, then so what if a few cranks whined about threats to civil liberties? But if we are right, then what must be said of our silence? (And here I must wonder, is my silence so golden?) Must OUR Dresdens burn, too?

"Georgetown, Texas. Like a lynch mob fueled by a fear of the unknown and a willingness to see strangers as threats to be quickly dispatched, the herd impulse has, since 9/11, become mobilized on behalf of a war against shadows. Even beyond the violent and repressive reactions of the American government, the most unsettling consequence of the WTC attacks has been the nearly total collapse of the minds of most Americans.

"For the duration of the war -- which government officials tell us will go on forever! -- men and women have rationed their intelligence and allowed what they would have heretofore regarded as their "fundamental principles" to be conscripted into the service of the state.

"Americans who, five years ago, were so incensed at Bill Clinton's perjured testimony that impeachment proceedings were brought, now exhibit a willingness to be lied to about matters of far greater concern than oval office shenanigans....

"America is becoming the Nazi Germany we feared in my childhood. For those who were not around during those years, you can get a flavor for the anti-tyrannical sentiments of the time by watching any number of movies depicting the Nazi police-state. The constant presence of police; the insistence upon showing "your papers" to whichever government underling demanded them; the awareness that neither your person nor home was immune from state searches or seizures; the disappearance of people into unknown prison camps; neighbors spying upon neighbors, and children betraying their parents to the state; and the domination of society by a military and bureaucratic arrogance, arbitrariness, and absolutism, were constantly chilling examples of the dangers of state power.

"How did we manage to reverse our thinking? When did appeals to the lessons of history become treasonous? How did philosophic principles collapse into patriotic slogans? ...

"A preoccupation with war has long been symptomatic of the decline of societies that practice it. Wars are essentially conducted by governments against their own people -- ... when the inviolability of the individual is sacrificed to some alleged collective security; and when violence is equated with "patriotism" and peace with "un-Americanism," the days of such a society are numbered.

"For those who desire to understand the attraction that this violent, destructive system has for most of us, a new book, War Is a Force That Gives Us Meaning, by Chris Hedges, offers one of the most powerful critiques of the war system since Randolph Bourne. ...

"Hedges has been a foreign correspondent for some fifteen years for such news organizations as the Christian Science Monitor and the New York Times. You may be more familiar with him as the recent commencement speaker at Rockford College, where he was hooted, heckled, and air-horned by war-lovers in the audience. Intellectual bankruptcy is another symptom of a dying culture, wherein discomforting ideas and criticisms can only be met with the kind of unfocused, thoughtless rage that is becoming increasingly evident in radio and television programming. For the herd-oriented, a new idea can only be countered not by clear thinking, but by blasts from an air-horn!

"Hedges observes that "[s]tates at war silence their own authentic and humane culture" and, in so doing, "erode the moral fabric" of a society. He adds: "[w]ar breaks down long-established prohibitions against violence, destruction, and murder," and leads to a situation in which "the domination and brutality of the battlefield is carried into personal life." "War," he goes on, "fills our spiritual void," and helps to erase "unsettling undercurrents of alienation and dislocation" in our lives. In words that reflect the disquieting climate in which we live, Hedges observes "a growing fusion between those in the state who wage war...and those who believe they understand and can act as agents for God."

"I cannot exaggerate the importance of these observations. They force us, as do the writings of Jung, Krishnamurti, and others, to confront the "dark side" forces that reside within each of us no less than they did within tyrants and their supporters in other times and places. They also compel us to reconsider our thinking. The idea of creating systems designed to threaten, coerce, and kill, and to imbue such agencies with principled legitimacy, and not expect them to lead to wars, genocides, and other tyrannical practices, expresses an innocence we can no longer afford to indulge.

"Hedges reminds us of the culture of war, which "is peddled by mythmakers" throughout society, including the modern media. You can observe such mythmaking as the media struggles to find evidence of "heroism" in a "war" that is more realistically described as a campaign of brutish bullying. ...

"While the institutionalized butchery of the war system makes it difficult for me to equate it with heroism, one does, on occasion, find individual acts of a heroic quality even in battle. My favorite candidate for this role is Warrant Officer Hugh Thompson, a helicopter pilot in the Vietnam War who came upon the scene of what we now know as the "My Lai Massacre." After becoming aware that what he was observing was not the ordinary combat of warfare, but a calculated slaughter of Vietnamese civilians by troops led by Lt. Calley, Thompson set his helicopter down between the civilians and the American troops. He then ordered his own crew to turn their machine guns on the American soldiers and, if they persisted in the slaughter, to fire on them. Thompson then took the civilians to safety and reported the incident, which led to the prosecution of Calley.

"I doubt that there will be any statues of Hugh Thompson erected anywhere soon, or that he will be leading any Memorial Day parades. His actions were too heroic, for he stood up to the very excesses of butchery that Hedges informs us destroys our sense of humanity and, with it, our civilization. I would much rather have Hugh Thompson as my neighbor than I would any of the myriad of retired generals who became television network fixtures in the mythmaking to which we have become accustomed these past many months.

"Our very survival -- both as individuals and as a civilization -- depends upon a radical transformation of our thinking, one that compels us to confront those silent voices within us that can so easily erupt into bloodbaths. While most of us continue to focus on the "Nazi holocaust" as the epitome of statist butchery, we must recall that the 20th century was the "holocaust century." Some 200,000,000 of our fellow human beings were slaughtered in various wars and genocides, and tens of millions more were wounded, both physically and spiritually, in ways that never heal.

"Because we fear the responsibility for our actions, we have allowed ourselves to develop the mentality of slaves. Contrary to the stirring sentiments of the Declaration of Independence, we now pledge "our Lives, our Fortunes and our sacred Honor" not to one another for our mutual protection, but to the state, whose actions continue to exploit, despoil, and destroy us. The poet, Lawrence Ferlinghetti, declared: "I am waiting for the war to be fought which will make the world safe for anarchy." While I share his sentiment, it is nonetheless evident that wars only bring up from the depths of our dark side the kinds of moral flotsam and jetsam that have surfaced in Washington, D.C. In the process, they destroy those qualities of peace, liberty, spiritual centeredness, mutual respect, and sense of individual responsibility which, alone, make for the greatness of any civilization.

"Editor's note: A version of this article was published on

"Butler Shaffer [send him e-mail] teaches at the Southwestern University School of Law. "

LeSinInternational Perspective - Argentina, Not Japan#1047276/18/03; 05:37:27

International Perspective, by Marshall Auerback

Argentina, Not Japan June 17, 2003

Snip from the end:

"What this means in relation to America is that the latter, like Argentina circa 2001, no longer controls its own economic destiny. In the case of the United States, the Sword of Damocles is not the IMF, but China. The death knell for the US economy may well be when the Chinese elect to float their currency because at that stage, many of the other Asian central banks (with the possible exception of Japan) may well find yet another compelling alternative to the US greenback, thereby sending the latter into free fall, creating untold damage to the US credit system. American policymakers, who persistently call for the Chinese remnimbi to be floated, ought to be careful what they wish for. It could well be the precipitating event for the final denouement in this extraordinary period of financial history."

mikalTrichet headed for ECB#1047286/18/03; 08:46:08

Bank of France chief found innocent; ECB post is next
PARIS (AP) —Excerpts: "Bank of France Governor Jean-Claude Trichet was acquitted Wednesday of fraud charges stemming from the French government's decade-old bailout of one of its biggest banks, Credit Lyonnais. The Paris court verdict removes an obstacle to Trichet's widely expected assumption of the top job at the European Central Bank when the current chief, Wim Duisenberg of the Netherlands, retires in July.....
Trichet has long had the backing of the French government, and his support for low inflation as the key to economic growth makes him a favorite among monetary policy purists.
time, Trichet was head of the French treasury.....
The scandal and questions about Trichet's future also had increased uncertainty facing the euro-zone economy at a time of slow growth, rising unemployment and weak confidence.
At stake was the reputation of the ECB, one of the European Union's most important institutions. The bank sets interest rates for the 12 countries that use the euro.
Barring new twists, Trichet can now call in a deal among European leaders at a 1998 summit earmarking him as successor to Duisenberg. Formal blessing could come as early as Friday's EU summit in Thessaloniki, Greece. With his probity no longer in question, the 60-year-old Trichet can claim near-perfect qualifications to uphold the euro's credibility on financial markets and become the European counterpart to U.S. Federal Reserve chief Alan Greenspan..."

adminMK's Gold Commentary & Review#1047296/18/03; 08:47:31


New Quick Notes.

New Stein.


Gary Silverman has an insightful comment for us which appeared in his Street Talk column in the Financial Times. He goes over a long history of Alan Greenspan's missed calls, irrational exuberances, and overly optimistic analysis of the economy's long term prospects and ends with this: "Against this backdrop, Mr. Greenspan's thoughts about deflation should be considered carefully. Investors seeking green pastures and still waters of the financial markets would be wise to consider whether Mr. Greenspan is their shepherd."......................Many consider Greenspan's talk of deflation "a blessing for aggressive speculation" particularly in the junk bond market (driven of course by the desire for yields), says Silverman. He quotes James Grant: "Alan Greenspan is the Mary Meeker of the bond market -- he is leading the sheep to be shorn. He is going to do more damage than any analyst at Morgan Stanley or Merrill Lynch did at the height of the internet bubble."

BelgianTrichet next President of ECB#1047306/18/03; 09:31:52

Trichet acquited ! Adieu Duisenberg and thanks.

At the end of the 19th and beginning of the 20th century, when we were on an INTERNATIONAL GOLD STANDARD, the US AND Europ were de facto on a shared single currency !!! We converted our respective notes in GOLD at a fixed exchange rate.

Since 1971 we drifted apart and continue to do so today.
Monetary Union (EMU) leads to a New Gold Standard !

The EMU' fundamental is build on the principle of " PRICE STABILITY ". Euroland is in its process of overcoming asymmetries and working to convergence.

The detoriating US$ will inevitable lead to Price-Inflation and pressure Price-Stability of EMU. It is at this junction that euro-Gold will break free !

This might happen under Trichet's presidency !?

Clink!re Trichet#1047316/18/03; 09:46:49

You couldn't get a much worse-sounding name for a central banker. 'Tricher' (same pronunciation) is French for 'to cheat'......

Knallgoldtest#1047326/18/03; 10:09:35

USAGOLD / Centennial Precious Metals, Inc.BULLION priced right. Build your base.#1047336/18/03; 10:19:42">Gold Buyers Group Special
a nation of one@ Clink! (6/18/03; 09:46:49MT - msg#: 104731)#1047346/18/03; 11:06:11

What other kind of name would you suggest for a central banker?
TownCrierBeware the occasional media boneheads#1047356/18/03; 12:43:00

How can Reuters get something wrong that is this simple?

The totality of the brief article is as follows.
HEADLINE: Fed adds $2.25 bln reserves via overnight repos

NEW YORK, June 18 (Reuters) - The Federal Reserve said on Wednesday it added $2.25 billion in temporary reserves to the banking system through an overnight fixed-system repurchase agreement.

Fed funds were trading at 1.25 percent, matching the central bank's target for the rate.

In actual fact, the opposite occured according to the principal source, i.e., the Fed (which, in fairness to the media, was itself briefly in error with Monday's stats). The Fed DRAINED reserves today in open market operations, mopping up for a one day timespan $2.25 billion in bank reserves using a transaction known as a REVERSE repurchase agreement in which the Fed accepts bids on its own collateral.

This public service announcement hereby ends.


alkahulikUpside/Downside#1047366/18/03; 13:17:32

Is it more dangerous to be out than in at this point? Nothing worse than missing the train when it leaves the station. Suppose gold opens up $50 higher one morning?
Just a thought.

TownCrierGold slips on dollar, awaits Fed#1047376/18/03; 13:38:33

LONDON, June 18 (Reuters) - Gold bullion prices slid back on Wednesday in Europe, sent packing by a feisty dollar which hit one-week highs against the euro on scaled-back expectations of a possible U.S. interest rate cut next week.

The yellow metal slid over $5 in London afternoon trading at one point, as it rediscovered its traditionally inverse relationship to the stronger dollar, which makes gold more expensive for holders of other currencies.

Dealers said they expected the market to trade within a $365.00/355.00 range until the outcome of the U.S. Federal Reserve's FOMC rate-setting meeting which starts next Tuesday...

------(above excerpts from url)-----

Mwanwhile, another article on market and official rates reports the following.

NEW YORK, June 18 (Reuters) - U.S. Treasury prices were swept lower for a third session on Wednesday as diminished concerns over deflation chipped away at the bond market's monumental recent gains.
Longer-dated debt prices slid deep into the red as relief that deflation was not imminent after Tuesday's report on consumer prices prompted the market to reevaluate the likelihood of radical Federal Reserve action, such as aggressive rate cuts or outright buying of Treasuries.
The voracious rally in longer-dated debt over the past few weeks was originally fueled by the Fed's heightened concern about deflation. ...the spectacular buying binge may have been overdone... But hopes were high the Fed would still have to ease by a quarter point at its policy meeting next week, if only to avoid a sharp back-up in yields and mortgage rates.------

According to the article traders are reported to be hopeful that as $85 billion in maturing Japanese Government bonds is released this week, some of it may find its way across the Pacific to support the U.S. Treasury market.

No wonder why. With May Federal budget figures due Thursday, economists are widely looking for a deficit to weigh in at $90 billion, 10% higher than the same month one year ago.


Clink!@ A nation of one#1047386/18/03; 14:23:28

Now there's a suggestion for a future contest question !
Cavan ManBelgian, mikal#1047396/18/03; 15:30:53

Today's WSJ carries a medium length editorial written by Gordon Brown and his French and German counterparts (FM's). Interesting timing and I do think Brown is part of the team to attach the Euro to England.
WaveriderDAILY GOLD MARKET REPORT #1047406/18/03; 16:11:16

"Gold took a hit on lowered expectations for a substantial interest rate cut when the Federal Reserve meets at the June 25 FOMC meeting. Trading appears to be based more on emotion that logic or rational reasoning. Weak hands were shaken out as the U.S. dollar gained against other major currencies and on some suspected currency intervention by foreign banks over the last 24 hours despite reports of strong physical demand in Asian trade earlier..."

Belgian@ Cavan Man#1047416/18/03; 16:18:13

Yes, Gordon Brown plays the role of the pro-euro figurant !?
Difficult to slam the euro-door, when seeing how the world's capital flows do favor the euro-zone for a multitude of reasons. This is the main explanation for the exch.rate rise of the euro versus the dollar. Cfr. the ME airbus contract in euro ! (oil for euro and euro for airbuses -?)

And EU central banks (+ECB) who can adjust the value of their reserves with the marking to market of their Gold !!!
Imagine you have the opportunity to increase the price of your house in full possession, according to circumstances !!! And compare this with the dollar-printing-mania, NOT being able to mark its (backing) goldreserves (?) to market.

POG hesitates because there is confusion about the US'rate cut : 0,25% (most likely) or 0,50% ? The IR difference between euro and dollar is not the only reason for dollar flight into the euro. Fragilized economies do prefer a generalized "Price-Stability" to operate in. A Debt-driven-Economy hates price-stability and needs more debt + price inflation. UK economy doesn't wish, for the time being, to converge to the euro-economy.

Most probably, some shaking moves might take place during the lazy summermonths of july/august, climaxing into september/october !?

ToolieChina May Float Currency, Snow Says (Should Read Begs)#1047426/18/03; 16:27:30


Speculation about a revaluation or floating of the yuan has intensified recently, thanks in part to a report by Goldman Sachs & Co. predicting that such a move is in the works. And Snow's comments were greeted enthusiastically by Frank Vargo, vice president for international economic affairs at the National Association of Manufacturers.

"A recognition by the U.S. government that the Chinese currency needs to move up is very welcome," Vargo said, noting that the U.S. bilateral trade deficit with China was $103 billion last year -- the biggest with any single country -- and was running at a $120 billion annual rate in the first four months of this year.

China's currency is not the only one the association is complaining about. The organization, part of a group called the Coalition for a Sound Dollar, this week released its first monthly "Asian Currency Manipulation Monitor," accusing Japan, South Korea and Taiwan of using government intervention in exchange markets to keep their currencies artificially low. "We've seen the dollar move [downward] in Canada and Europe, where the market really works," Vargo said, "but with the Asian currencies, most of the governments are intervening."

But not all experts agree that the Chinese are likely to see a substantial rise in the yuan as being in the national interest. By putting a crimp in exports, such a move might risk increasing unemployment, endangering social stability.

Toolie: Yea, and after the National Association of Manufacturers get Their higher Won, then all that need be done to level the playing field with China is; establish comparable property rights, minimum wage laws, safety regulations, child labor laws, prison labor laws, social security, health care, pensions, zoning regulations and those pesky human rights. Then, and only then will the U.S. stop bleeding dollars to China.

Chinese workers are disposable. Not to worry though U.S. workers will meet them somewhere near the middle.

Black BladeMarket Wrap Up – Puplava#10474306/18/03; 22:01:35


At times, it seems surreal and that the inmates of an insane asylum are running the economy and the financial markets. The Fed is hell bent on debauching the currency and don't appear to be worried about the consequences. They are confident that monetary alchemy can solve whatever problem ailing the economy. In private, they freely admit they're not sure what will work. The word "unconventional" is used more often when solutions are proposed. The fact that the Fed is even considering using unconventional means should alert the average investor these are not normal times and that all is not well. The economy isn't reacting in normal fashion to policy stimulus having failed to respond to traditional measures. We now have the lowest interest rates in half a century and it is taking nearly $5 of debt to get $1 of GDP. Another way of looking at the issue is that the U.S. is now borrowing $2.5 trillion a year as the country's debt growth goes parabolic.

All of this should at least get the attention of investors; it certainly has gotten the attention of policy makers. Yet on Wall Street, our financial markets have become one giant casino where professionals and amateurs alike are encouraged to speculate. Wall Street in one sense has become the adult version of Disneyland where investors can act out their money fantasies. This is no more evident today than to view what is moving in the markets and what is analyzed and recommended. To most professionals and traders they believe the good ole’ days are back.

The best way to describe the present euphoria is to say that the bubble is back. In reality it never fully deflated. Speculation is back in full bloom. This is reflected in what is moving the markets and the metrics used to analyze stocks. The companies that have done the best in the market this year are companies that are losing money, companies with deteriorating balance sheets and declining income statements, or companies that are constantly revising their estimates downward or having to restate their earnings.

Black Blade: A good article tonight and Puplava nails it. It does appear that the speculative mania is back and the Lemmings are running headlong toward yet another cliff. However, it has been mostly pushed along by institutional players until recently anyway. Today I saw a report on CNBC showing that the "day traders" are beginning to show up for another go at the casino. Puplava is right again about the idiotic statements about "good stock valuations" and "improving fundamentals" touted by Wall Street primates and financial media carnival barkers in regard to the overvalued tech sector while panning the more reasonably priced energy sector and precious metals.

Black BladeSNOW: JOBLESS RATE MAY RISE #10474406/18/03; 22:10:51


June 18, 2003 -- Treasury Secretary John Snow said the unemployment rate may rise further before improving later this year. At a conference yesterday, Snow warned that "Unemployment is unacceptably high at 6.1 percent (in May) but it could well rise to 6.2 or 6.3 percent before the higher growth rates begin to bring it down," Snow cautioned.

Black Blade: Now we await "damage control" from the White House. Every time it seems that Snow spills the beans, Dubya has to come to the rescue with some reassurance all is well.

mikal@Toolie#10474506/18/03; 22:11:46

Good to hear about the Yuan, but your comments expose the depth of the problem. Almost ironic that the U.S. has to abruptly meet "in the middle" it's world neighbors. The developing world's adoption of regulations you mention may unfortunately continue to come at a slow pace. The command economies of despots, dictators, communists, socialists, autocrats, etc. are slow to change.
Yet the Washington plutocracy too will need to relax business regulations and red tape if the economy is to revive and compete in today's "free trade" world. Not by using the example of China's around the world, but common sense regional survival instincts, like today's revived use of tariffs and "trade wars". Ultimately moving over many years to a peaceful "middle" ground that respects the need for the good life for all lives, without which "human rights" is an empty slogan.
The following article, about the author's recent presence at a Bush speech, decries bloated federal bureaucracy, welfare-warfare policies, spending and taxes, and burdensome, targeted and unfair regulations and Fed CB's obstructive interest rate meddling:

FOR THE AMERICAN PEOPLE By: Murray Sabrin -Excerpt:

"Undoubtedly, these themes will be repeated over and over during the next 17 months, until the November 2004 election. Nevertheless, President Bush's most memorable line was when he urged Congress "to do what is right for the American people". This assertion begs an answer.
What is right for the American people is a nation based on liberty, free enterprise, sound money, the rule of law, low--very low-- taxes, very few federal regulations, and most importantly, a foreign policy that does not try to police the world or engage in preemptive strikes.
This agenda, this vision, is the legacy the Founding Fathers' gave us more than 200 hundred years ago.
Unfortunately, President Bush revealed he intends to continue to govern like a "big government conservative". He did not address the unnecessary and wasteful federal spending that is in effect a tax on small business. He could have called for restructuring the federal government. This would free up the people's money that is now being gobbled up by unnecessary federal bureaucracies. This would in effect "liberate" America's families and businesses from the shackles--taxes and regulations--the federal government has placed on the American people. He also could have called for ending the Federal Reserve's manipulation of interest rates, which generates the business cycle, and undermines the prosperity of small businesses.
Instead, President Bush is going to perpetuate the welfare-warfare state, albeit with tax cuts and some regulatory reform. Rather than calling for a "radical", i.e., fundamental, downsizing of the federal government and the establishment of sound money, and a foreign policy that is not based on the premise that the Untied States can impose freedom and democracy on authoritarian regimes anywhere in the world, President Bush essentially called for maintaining the status quo.
Three years ago candidate Bush promised a "humble" foreign policy. That went by the wayside because of the September 11th attacks on America, and the "imminent threat" posed by Saddam to America's national security. However, there is growing evidence that the Bush administration was planning extensive Mideast military intervention before the September 11th attacks.
Based on President Bush's remarks yesterday, he should take his own advice and begin to "do what is right for the American people"- dismantle America's welfare-warfare state."

WaveriderFirst lady rails at 'pillage' of Peru's resources#10474606/18/03; 22:37:56

"Eliane Karp, Peru's often-outspoken first lady, said on Wednesday that big companies were conducting "a type of modern pillage" of the country's natural resources. Peru is a major producer of metals, which generate some 50 percent of its exports. Foreign firms like Newmont Mining Corp., Barrick Gold Corp. and Billiton BHP operate large copper, zinc and gold mines here.

Waverider: I was in Palo Alto this past weekend attending the Stanford graduation ceremonies and in fact, President Alejandro Toledo of Peru was the keynote speaker. He is a native Peruvian Indian from a family of sixteen siblings, seven whom died before the age of one. He started earning money at the age of six by shining shoes. He eventually had oppurtunity to study in the USA thanks to the Peace Corps and through scholarships completed dual masters degrees at Stanford in education and economics, and then completed a PhD in education. He appears to be committed to rectifying the poverty which ravages Peru and has had no less than 120 death threats. What is interesting is that he made a brief reference during his speech about nationalizing Gold mines - I wonder if we're going to see some changes in Peru - increased mining royalties perhaps?

Liberty HeadRe: Murray Sabrin Post by mikal#10474706/18/03; 23:11:24

I completely agree with Murray Sabrin's assesment of the situation, however I have little faith that anything will change us from our current course. With few exceptions, I see only a nation of fools and theives, current company excepted. All one need to do to see our future is look at what is left of the Soviet Empire. We are following their lead into the fallen empire builders, house of corruption. We will be completely exhausted before the big fight with China even begins.
Talking about freedom, won't bring freedom about. Enlightenment alone will not free the slaves. The public outrage doesn't even register. We are getting precisely what we deserve.
I do have faith in the laws of the universe and know that the flow is always towards balance.
I think a healthy dose of negativety is in order. I do not subscribe to the "protons only universe" theory. If balance is the nature of the universe, there must be a mass of pissed off electrons somewhere. Count me as one.


Black BladeEDS Says It Will Cut 2,700 Jobs#1047486/19/03; 00:18:02


NEW YORK (Reuters) - Electronic Data Systems Corp. (NYSE:EDS) on Wednesday said it will cut 2,700 jobs, or 2 percent of its workforce, as new management returns the computer services company to its 40-year-old roots of managing technology for clients.

Black Blade: The "Bone Pile" grows.

Black BladeUBS Firing 500 Investment Bankers#1047496/19/03; 00:43:41


ZURICH (Reuters) - UBS AG will fire 500 investment bankers to compensate for falling revenues, it said on Wednesday, giving in to growing cost pressures on the industry caused by a drop in equity trading and merger activity. A three-year bear market, which has seen revenues from mergers, acquisitions and equity issues slump, has forced global investment banks to cull around 100,000 jobs in the past two years to shrink costs swollen by the tech and Internet boom.

Black Blade: There goes a few nonessential Bankers Bones.

slingshotLiberty Head#1047506/19/03; 00:55:16

Msg# 104747

"We are getting precisely what we deserve" Truer words have never been spoken. Public outrage is only the outcome of cause and effect. The general population remains passive till the, Not In My Backyard, or They Can't Do That, syndrome finally intrudes into their little world. By that time it maybe too late. Another attitude pervasive in our society is, What are you going to do. Self empowerment is a thing of the past and so they are willing to lick the boots of the enslaver. IMHO, I believe that our educational system teaches our children to be subserviant and I am not referring to teaching them to be good citizens, but a teaching that enforces a herd mentality. If I am wrong, why not are there younger goldbugs who post upon this forum.
Education is taught at fine institutions, but FREEDOM is taught at home. That is what this forum is all about. Keeping us free from financial and government influence. For some Gold is insurance, others an investment. For me it is Freedom in my older years.


Black BladeFinancial planner urges investors to use caution in overvalued market#1047516/19/03; 01:03:19


With Wall Street rallying for more than three months, stock-fund investors are feeling more bullish. Funds with positive returns far outnumber those with negative returns, and riskier funds, including those that focus on growth or technology stocks, are outpacing bearish havens like gold funds.

Investment experts agree it's time for mutual fund investors to be more aggressive — yet careful.

"I think caution should still be the word of the day," said Ralph D. Scearce, a financial planner in Lexington, Ky.

Mr. Scearce is concerned that the stock market is overvalued, with the Standard & Poor's 500 index, the broadest of Wall Street's major indexes, having risen about 30 percent since mid-March to reach levels of a year ago. Stocks in the S&P are trading at more than 30 times earnings, which planners like Mr. Scearce say is too high, given the fact bull markets historically have started with stocks trading at 12 times earnings.

"I believe we had the greatest [market] bubble in the history of mankind between 1995 and 1999, and I don't think we are going to get through that bubble in three years," Mr. Scearce said.

Black Blade: It's been quite a rally but there has been no required "capitulation" that the Wall Street crowd was expecting when the bubble deflated. Considering the rally is based on nothing – no positive news whatsoever, it should unravel with more devastation for those lured into this bear market rally.

TopazDollar, Bonds and Gold. #1047526/19/03; 01:40:36

PaperGold resumed it's close association with PaperPaper yesterday as Bond Yields softened markedly. 94 should stop dollar rise and turn Bonds/Gold. A most important pivot point for all 3 imo.
TownCrierGold-buying Asian nations to keep own currencies in check, match Fed cut#1047536/19/03; 02:51:30


SINGAPORE, June 19 (Reuters) - Many Asian nations are expected to follow an expected U.S. rate cut next week... A rate cut would maintain interest rate differentials and prevent any rush for yield that could see currencies rise...

If the Fed eased, Hong Kong, with its currency pegged to the U.S. dollar, would almost certainly follow.

Taiwan's central bank meets the day after the Fed and is also expected to follow -- its last rate cut was after the Fed lowered last November.

Korea is already easing as it tries to spur its slumping economy, while falling inflation has allowed Bank Indonesia to slash official rates to below 10 percent, and a Fed cut would give both economies more room to cut.

The Philippine central bank has said it would not necessarily follow the lead of the Fed, but delivered a de facto easing by loosening monetary conditions earlier this month.

Even Thailand -- which grew at 6.7 percent in the 12 months ended March -- could cut rates, analysts said, to maintain its half-point interest rate premium to the United States.

-----(see full article at url)-----

As these nations give their citizens no policy reason to hold their currencies in any higher regard -- with everyone looking to inflate together -- the prominent gold-buying regimen of these nations' savers will likely gain impetus as a result. Strange things can happen when the physical market gets pressured.


Black BladeSA gold production falls in Q1#1047546/19/03; 03:31:10


The Chamber of Mines of South Africa reports that gold output for the first quarter of 2003 was down 2,7% at 92 314 kgs when compared to the same quarter in 2002 and was down 6,8% when compared to the December quarter. The chamber says that on a quarter-on-quarter basis (when comparing the March 2003 quarter of each year to the December quarter of the preceding year) there had been a decline of 7,2% in production on average over the past five-year period.

Black Blade: Not all that surprising as gold is priced in dollars and expenses are in Rand. Also, worldwide gold production will likely decline as little exploration activity occurred at prices below $350/oz. With a slower pace of new mine openings, long lag times from discovery to production, and declining production from mature mines, it is certain that less gold supply will appear over the next several years.

Black BladeIt's Official - US Economic Recession Not Over Yet#1047556/19/03; 03:38:11

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The National Bureau of Economic Research (NBER) today announced that the US economic recession is not over. The Wall Street primates and financial media carnival barkers have been yapping away about the slow growth "economic recovery" over the last couple of years, however, the NBER - the official arbiter of declaring the start or end of economic recessions will not declare the end of the recession that started in 2000.

- Black Blade

Black BladeRate Cut Looking Like a Sure Thing #1047566/19/03; 03:50:11

Economy's Continued Weakness, Possibility of Deflation Worry Fed Officials


Federal Reserve officials, concerned there is still no sign of the solid pickup in U.S. economic growth needed to foreclose the possibility of deflation, appear certain to cut their target for overnight interest rates next week.

There is broad agreement among investors and analysts that a rate cut is coming, but there is disagreement about whether policymakers will lower their 1.25 percent target by a quarter-percentage point or by a half-point. The latter seems to be more likely as a sort of exclamation point to emphasize that the officials believe this will be the final step that, coupled with the income tax cut that will show up in workers' take-home pay next month, will put the economy on a strong, sustainable growth path.

Fed Chairman Alan Greenspan, who gave the first hint that he was contemplating another rate cut in testimony before a congressional committee on May 21, referred then to such a step as "taking out insurance."

Black Blade: Sentiment sure is swinging wildly over the last couple of days. Two ays ago it appeared that a 50 basis point cut was a done deal. Then yesterday it was thought to be 25 basis points or maybe not at all. Today many more are thinking that a 50 basis point cut is needed to "make a point" that the Fed will be ready to do whatever it takes to fend off deflation or inflation. It should get "interesting".

misetichSNOW: JOBLESS RATE MAY RISE #1047576/19/03; 05:11:10


June 18, 2003 -- Treasury Secretary John Snow said the unemployment rate may rise further before improving later this year. At a conference yesterday, Snow warned that "Unemployment is unacceptably high at 6.1 percent (in May) but it could well rise to 6.2 or 6.3 percent before the higher growth rates begin to bring it down," Snow cautioned.

In prepared remarks, Snow also played down worries about the lofty U.S. trade deficit with the rest of the world.Reuters

The stage is set for a 1/2 point cut today. Very bullish for gold.

All On Board The Gold Bull Express

Black BladePrudential ups gold price target, Newmont rating #1047586/19/03; 07:15:10


NEW YORK (AFX) -- Analyst John Tumazos at Prudential raised his 2003 gold price forecast to $359.50 from $340, and for 2004 to $375 from $325 to reflect the weakness in the U.S. dollar. As a result, Tumazos raised his earnings estimates for Barrick Gold, Placer Dome and Newmont Mining. He also raised his rating on Newmont to "hold" from "sell," citing improved finances from higher gold prices and the extinguishments of certain hedge positions.

Black Blade: This guy is a little late to the party isn't he? I recall he rated Newmont a sell at something like $15 and it's about $30 now I think. Hmmm…

BTW, unemployment is still rising and first time claims hang tough above the recessionary 400,000 level. The 1Q current account deficit rose to a new record too. Worse yet, someone in the bond market spilled the beans that inflation is wildly larger than the artificial CPI data suggests and this info made it into the bond market - oops!