USAGOLD Gold Discussion Forum Archive

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Solomon WeaverRoach on Europe#1194284/1/04; 10:59:29

ZhishengThanks Old Solomon#1194294/1/04; 12:00:13

I remember. But old guys like unto me have to try hard to keep our minds on the present---and silver TODAY certainly helped in that regard: up 20 cents.
Federal_ReservesInterest rates moving back up#1194304/1/04; 12:18:15^tnx&d=c

With the recent SM upsurge.

Almost made up all the ground lost from the last disappointing labor report. If we get a hot jobs/wage report, rates could hop up 25/50bps in a single day.

Many holding bonds could be badly burned.

CoBra(too)April Fools Day -#1194314/1/04; 12:19:09

It's kind of astonishing that the BLS has been drawing out this particular day all over the year. Today the ECB left IR's unchanged - hoping against hope was the $ and the Bond - both were disappointed.
The PPI for February, also long overdue came out rather benign after the January - even longer overdue - numbers.

Meantime, Spot and Spike hit new intraday highs to prove the complacency of statists and staticians obsolete. The FED's, Wall Street's and what- and whomever else's fire brigades came to the rescue and doused the inflagation, momentarily.

Fine with me, as I became acclimatized to orderly and not manically eruptive breakouts. It seems way too early in the game of the PM bull market. It still may be years until this stage, at which a climax on the upside may portend another trend change. As long as the PTB will hang on and defend the last trend of financial asset overvaluation I will also stoically and with patience expecting this new secular trend to develop; As it may be quite some time to full bloom!

Economists may be infighting about the deflation/inflation issue; Heck, who cares as financial assets have reached their zenith, let's give 'em the opportunity to deflate and let's get back to basic necessities of life, which are unfortunately inflating.

The gist of the whole shebang seems to be life has been getting more expensive for a few generations - just see DINKS, et al - and ask yourself about the problem of who, in all hell - is going to work their ass off for your already looted retirement fund?

.... And while you still can, consider some real investment in Gold and Silver, for later use. These items have proven to hold their value - in terms of buying power - forever! Even if you're dreaming of the new era - this time it's different - don't dream on, realize you've been conned by your friendly PTB.

OK, let's watch the games go on together. Best cb2

PS: Note to Solomon - Yes, definitely Austrian and still retaining my old appartment in Vienna's Belvedergasse, though more enjoying the frugal country life west of town.
Will be moving end of April, just a little more to the West and will be out of touch for a while at tzhat stage. Thanks for your note ...

Cometosesilver STEAMROLLER / 2004#1194324/1/04; 12:45:27

BASED on the fine and consistent work that the METAL SILVER has been doing (but more specifically in the past 4 weeks) in contradiction to all NAYSAYERS , we are going to get a dramatic move in the miners soon which are way behind their rise to glory....I hope it comes with the power of a boomeranging catapult .......If the silver miner's are going to continue acting like dogs....of disbelief.........I'm going to take delivery in May ......THis METEORIC RISE IS JUST BEGINNING>....
Richard Russell said gold will double it's last high at 1700 and if silver aproaches it's 15 to 1 ratio with GOLD...we have at minimum silver spot going up 1000 %.
However because of the supply deficit and increased industrial demand....SILVER $ 200... according to sources a Silver INvestor(Dave Morgan)....... all we have to do is STAY AWAKE (how could one not; the excitement so far is electrifying) and show up in front of the computer every day( 4 years of extc coming our way)......LIFE IS SO MUCH EASIER SINCE THE ADVANCEMENT OF THE INTERNET....( I have an intersting world view sometimes but I think the inventors of the internet invented it for us marketwatchers)....
"$12.00 silver in 2004......." I think someone in Politics should run on that platform ..."HONEST MONEY FOR HONEST PEOPLE" I'll vote for that.....
It would be nice to have something to vote for rather than something to vote against...

NedWhat do the Sinclair followers (and non-Sinclair followers) make of this?#1194334/1/04; 14:34:41


The "Why Here" of Gold

"Normally, wars are made between politicians and the people that fight them. Old men have historically sent young men and women to die for a multitude of reasons from economics to politics. Today, war has taken on a religious fever of unleashed hatred. It may have started the same way as all previous wars based on the economics of oil, but this time it is the "Hatred of the People" that has begun to take over the conspiracy of the old......"

"My problem lies in the fact that all the reasons given today by the intelligentsia of investment banks for gold's rise are simply manufactured as they all existed when I was buying gold on the recent Thursday low with all available resources at hand. The reasons given today are a product of the rise of the price of gold itself and I fear not the reasons why gold has risen. As an example, the USDX degree of depreciation and the Euro lack of appreciation since the Spanish bombing but even before DOES NOT SUPPORT THE PRESENT ANGLE OF ASCENT IN THE RISE OF GOLD’S PRICE.

"... As the call to war among Islamic world populations grows louder, the general Islamic who may not wish or be able to wage war will desire to become in the eyes of his countrymen at the very least a good Islamic person. Have you noticed that the decline in gold ended with the Hamas affair?"

"In conclusion, I know that gold is headed to a specific price above $480. Where I am concerned, there is no question whatsoever about that. I even believe I know when it could occur. However, if the price of gold goes through $430.30 and $435 right here and now, then my fear is simple. It is the "Sum of all Fears" in the Middle East and yes, in Europe, where it is least expected. "

"Gold cannot get through the $430.30 mountain of supply in the cash market and right above there at $435 unless the cork is already out of the bottle. This is a time when the gold market in terms of what it does in the next eight trading days will define the state of geopolitical risk and not the other way around."

"God protect all of us from the rise of the ultimate demons in a nuclear age of madness, narrow minds, hate and rampant secularism."

"What a lousy reason to have to say you must own gold!"

-end snip-

It seems Sinclair is getting very nervous of recent events and is getting more very vocal about it.



NedSorry, here's the 'link'.#1194344/1/04; 14:35:39

Solomon WeaverCoBra hast du ein Gemheimtip#1194354/1/04; 14:49:23


My wife and Children will spend 4 nights in Vienna in you have any special advice on something that is a bit off the beaten path? one of the catholic bone houses.....or an organic food restaurant?

Leider kann i nit mitkho, soost wellte i mit dir geru eis ge trichcuu.

P.S. My son now studies a first year of high school German...thinks the teacher is a nutcase.

Poor old Solomon

Solomon WeaverOn the Sinclair thing Ned#1194364/1/04; 14:57:02


I do note that "whoever" did 9-11 seems to have chose a timing when American stock markets were clearly in a down phase.

I believe it is fairly public that Al-Queda and such are strongly interested in seeing a dollar collapse, as that would equate to major loss of global influence in their minds.

It may have been rather unexpected how much 9-11 seemed to have worked in favor of USA (short term at least).

Could it be that Sinclair is arguing that with gold now confirming its rise in almost all currencies, that GOLD now sets the stage as an indicator of economic trouble ahead on a global basis, so from a strategic value destruction basis, the timing for a very major terror event is also set.

Poor old Solomon

Cavan ManHi Ned...#1194374/1/04; 15:04:30

I think JSMINESET is a bit eccentric though I do read his THOUGHTS too. Regarding continued terrorism; we'll all be living within the context of WWIII in the short, medium and long term. Timing of many things is problematic yes?
CoBra(too)@ Solomon Weaver - Nice Silver Performance ...#1194384/1/04; 15:15:50

... and please TC forgive our off topic chat - and if asked pls be so kind as to provide my e-mail to Sol.W.

Sol - Jede Menge und nicht nur in Wien, auch in der Umgebung - don't ever hesitate to ask for local guidance here.

After all, it feels like extended family; A family of believers in truth. ... and isn't it also true that families have had to be destroyed in the name of social "Fortschritt"! Another quote Cato the elder would not have to answer for: "Ceterum censio familiam esse delendam"! for the good of the people ... and here we are, good people at the end of the rope our "elders" are condemmned to continue pushing on a string with the sole effect to intricate themselves, and by tragic extension, all of us in a ever more intricate web of lies and hedonics.

As today was great day in PM's - and in particular of silver - the doubble BO, whithout some follow through may herald some more consolidation. In AG there was none for quite a while ... and who cares, as I'm in for the long run and still in acquisition mode at dips.

Bleib mir gewogen - cb2

Buongiorno!"Sum of all Fears"#1194394/1/04; 15:36:05

@ Ned, Yes, I read the Sinclair piece and consider the following: a. As usual, we do not tell the market what to do--it tells us what to do. b. Powerful forces are at work, as if huge beasts are fighting beneath the surface of the water--we cannot see clearly, but know something big is happening. c. "Them that know, ain't tellin'& them that tell, don't always know!"

For those who missed the book, Clancy spins a yarn about Muslem extremists who discover a lost a-bomb, transport to to the USA, and detonate it at a Super Bowl game, trying to kill the president and cripple the USA. (Kinda like some of Slingshot's stuff, eh?) My book was printed in '91, so there are now more members of the nuclear club to worry about.....My best bet is anything like that would come from old Soviet stockpiles.

Sinclair is telling us something is up--and I believe it is. Who would have thought possible 9/11, Spain, Cole, etc? From here, it could be an old-fashioned dollar flop, and I hope it is not more violence. The die may have already been cast, and events set in motion--which is what Sinclair is saying. For most of us, just follow Black Blade's advice. Note to self: Cheer UP!

CoBra(too)Gold Appreciating against all Currencies?#1194404/1/04; 16:15:01

CM and Sol. W., this seems to me tantamount of the real beginning of a secular gold bull.

As in my opinion a nation can't forever get the better of its trading partners - while it may be OK as long as the "counterparties" seem to get equivalent value for their sweat, er, labor.

Even the BoJ seems to see the absurdity behind the propping of the US Dollar as their only chance to export themselves to prosperity, again. After all, every trick to part the Japanese from their savings on domestic infrastructure has been a complete failure.

It was big Al, who did the trick and robbed the American middle class of any distinguishable future. Of course, for reasons way beyond critique ... and in the end for the staving off the imminent of the globe's financial system.

In my more benign nightmares I dream of a world before 1987 and comparatively free markets, unencumbered by the PTB and relatively secure in knowing that prices of certain goods are set by supply and demand equations; Rather than derivative financial pyramid schemes in order to balance the tight rope walker for another brief spell of hell without a net.

Systemic hell, that is; And it won't stop at the borders of the agitator - it effect all. Globalization, what a farce, will take its toll - and it may just have been introduced to effect this prolonged aberration to financial insanity -
to keep it going. Quit you're doomed - extend it you're equally and eternally doomed!

Seems a Faustian parable - so democracies have a life line and are apt to shove out their problems to the next Admin (idiots was what I thought)- and so on... Until it doesn't rub any more.
And that may be where we've arrived - Bush's and his axis of the "Willing" are falling like the domino's after the theory of Dien Piu Phu led to Nam! Democraticising the globe has its definite backlash, and it really doesn't matter much if GWB or J. - whatever middle Initial - Kerry is presiding the bankruptcy of the former land of the brave and the free. It is a clear and potent danger and the response so far has been to curb the constitution, personal freedom and liberty.

The reality is worse; The US is now the country with the highest debt in history. The globe was relying on the promise to repay for too long. The reserve system based on hedonics and in reality on US debt of almost 5 times the US GDP is so far removed from reality, that the glue holding it together is as laughable; The glue being the rest of the world, exporting their real goods for bankrupt confetti promises.

I suspect, as this charade can't for much longer stand the light of day, it will be terminated. And it may not be as benign as musical chairs, it may be more like who blinks first - may catch the early bird or get all the blame! it wouldn't really matter, probably, as the repercussions will be global in aglobalized world.

Got Gold! - And sorry for meandering for too long - cb2

Gandalf the WhiteThe BOLD GOLD BULL P&F Chart with ANOTHER new little "BLUE" X !#1194414/1/04; 20:22:34$GOLD,P

AND a new Prelim. Price Objective of --- GET THIS ! ----

Gandalf the WhiteHELLO Sir Rich !! The SILVER rocket blasts MOONward !!!#1194424/1/04; 20:26:16$SILVER,PLPBDANRBO[PA][D][F1!3!1.0!!2!20]&pref=G

Today's TWO P&F boxes are filled with a 4 (for the month of April) and a little "BLUE" X.

GoldendomeGood Golly Miss Molly !!#1194434/1/04; 21:24:31

I haven't figured it for a while, but the Gold/Silver ratio has dropped to 52.6 to 1. You'll recall that just last May--2003, the ratio was over 80 to 1. Certainly pleased right now- with myself, that I took my own advice about the likelyhood of a narrowing ratio and bought an extra 1000 oz. of Silver back in November. Don't take this as a disparagement of Gold. Just felt that at that particular time, Ag. might be the better fiat sink.


GoldiloxArgentina NatGas Shortage Spreads#1194444/1/04; 21:34:07


"Argentina has sharply reduced its gas exports in response to a domestic energy crisis, triggering serious shortages in neighbouring Chile.

Chile, which has few energy reserves of its own, faces a gas supply shortfall of 2.3 million cubic metres a day. Senior Chilean officials have tried to dispel growing fears of energy price rises and compulsory rationing.

Economy minister Jorge Rodriguez said there were sufficient back-up supplies to avoid rationing. However, he added that while there are laws in place to protect consumers, energy prices were beyond the government's control.

The shortages stem from Argentina's decision on Wednesday to limit gas exports to 2003 levels for the next five months."


Shortages that cause international rationing often lead to WAR. With NatGas stockpiles stretched to near-term lows, this kind of news should send NatGas into orbit along with the PMs.

GoldiloxJ.P. Morgan Exec Dismisses Derivatives Worries#1194454/1/04; 21:46:31


NEW YORK - Making heading this afternoon, J.P. Morgan Chase investment banking Chairman David Coulter is dismissing concern about concentration in the derivatives markets.

In a speech to the International Swaps and Derivatives Association, Coulter said that J.P. Morgan's role in the $170 trillion over-the-counter derivatives markets is exaggerated. He also said the exit of one dealer from the market could be handled by others, who would pick up more business. Critics say market concentration increases the damage that could be created by disruptions at one institution.


"What, Me worry?"- Alfred E. Newman

GoldiloxBLS loses 321K jobs#1194464/1/04; 21:57:43


"April 1, 2004 -- LET'S make some trouble.

Tomorrow morning the Labor Department will announce the number of new jobs created in March as well as the monthly unemployment rate. The experts - you will recognize them because for months they've been sitting in the corner with dunce caps on - are expecting 125,000 new positions to have appeared during the month and the unemployment rate to fall from 5.6 percent to 5.5 percent.

We all know how politically sensitive these figures are, especially in a presidential election year. And I don't have to tell you how much Wall Street obsesses over them.

Well, what if I told you that the Labor Department made 321,000 jobs disappear in January. If it hadn't been for this move, Washington would have reported monstrous growth of 433,000 jobs that month instead of a paltry 112,000.

Don't believe me?

Go to the Labor Department's website: This is a section on the so-called "birth/death model adjustment," and it's buried deep in thousands of pages of other facts and figures.

You'll see a "-321" in the box under January 2004 - which means that 321,000 jobs were removed from the totals reported to the public.

This'll make the experts and Republicans crazy (or at least that's my aim.) But the officially reported job count was reduced because models in the Labor Department's computers say - but can't prove - that many companies went out of business in January and took jobs with them.

This is all very nutty stuff."


It's OK - Jay Leno found them - in Bangalore!

As bad as their computers are, maybe I could loan them my old iMac!

GoldiloxOpps for me, too!#1194474/1/04; 21:58:38

BLS link
slingshotRehash of the objective of Al Queda/ Sinclair#1194484/1/04; 23:18:48

Speculatively speaking, I think that if the Arab world would invert their primary objective,acquisistion of war material, with its secondary objective, to disrupt the financial markets and the U.S.Dollar they would achieve their goal much sooner. I find that the lesson, although a poor one, when the U.S.A. basicly bankrupted Russia in an arms race. Could the Arab factions unite and spend more to purchase gold and other PM's instead of the use of force.Only purchasing weapons to use as a defensive posture.
He who owns the gold, makes the rules. Oil to be paid in Gold. Bleeding the West one ounce at a time or accepting a currency backed by gold. World politics combined with the discord in beliefs between the Muslim and Judeao Christian is a quagmire at best.

GoldiloxRuining the Currency#1194494/2/04; 00:08:06

Who needs a foreign power to wreck the currency when GS and Snowjob are doing so well unassisted?

go go gadget gold chart.

slingshotGoldilox#1194504/2/04; 00:19:53

Yes, that is the point. They only need to position themselves as a major player in the world. The need for terrorism is senseless. Do what the bankers have been doing to the world all along.

TopazThe Protagonists.#1194514/2/04; 01:04:53

Gold still looks out on a Limb here as we've witnessed no retracement following the Assassination and status quo is being maintained at the higher level.
Bonds/Dollar slightly firmer in early going, as is Oil.

SundeckSilver Stallion#1194524/2/04; 03:22:43


The golden hounds have startled the Silver Stallion and he has the bit between his teeth and is racing up the hill...

Get your hounds onto his trail...quickly!


Gold StandardGidday Sir Sundeck#1194534/2/04; 03:31:22

I can't believe the POS chart in prior opening!

The K people are off the scale!

What's happening?

Cheers, GS

SundeckGateway adds to the bonepile#1194544/2/04; 03:34:42


Computer maker Gateway announced yesterday it will shutter all of its stores next week, eliminating 2,500 jobs, or nearly 40 percent of its work force.

Sundeck: Let's hope these jobs are made up elsewhere... not a good start to the jobs report.

SundeckSir Gold Standard - Silver breakout#1194554/2/04; 03:40:14

Silver is out of the paddock and bolted...why? Who knows...but could be the long awaited short squeeze or just over-exuberant speculators...let's hope some of the exuberance rubs off onto gold as well...


Gold StandardSir Sundeck#1194564/2/04; 03:58:53

Wow! That Y axis jump at London opening was just awesome.

The Gateway link you provided was just scary.

This may well be the start of the famed short covering squeeze..... let's keep watching, shall we?

Cheers, GS

NedMore on my post yesterday #119433 re: Sinclair/escalating terrorism#1194574/2/04; 05:38:54

Thanks to Solomon Weaver, Buongiorno, Cavan Man, slingshot and others for the comments.

A couple of little snips to get started:

"As an example, the USDX degree of depreciation and the Euro lack of appreciation since the Spanish bombing but even before DOES NOT SUPPORT THE PRESENT ANGLE OF ASCENT IN THE RISE OF GOLD’S PRICE....have you noticed that the decline in gold ended with the Hamas affair?"

"....if the price of gold goes through $430.30 and $435 right here and now, then my fear is simple. It is the "Sum of all Fears" in the Middle East and yes, in Europe, where it is least expected....this is a time when the gold market in terms of what it does in the next eight trading days will define the state of geopolitical risk and not the other way around."

I've been reading Siclair for a year or slightly more and usually his comments take on a more technical and from time to time a pure fundamental view. This outright speculation seems, to me at least, unlike him. He has been on this tangent for a couple weeks, quite possibly coinciding with the assasination of the spiritual leader of Hamas. He claims to know of the Muslim/Islamic 'feeling' better than most, is he real or losing it? To be frank, I'm a little perplexed by it.

Being perplexed or not perplexed is not my point. I have been sub-consciously aware, for the most part, that owning physical metal is important, in fact very important. For a number of reasons owning the 'the real thing' (metal)forms the foundation of gold ownership. The PGA's can explain this much better than I would even dare. Personally, half my 'money' is in physical while the other half dabbles in PM stock. I make a little 'money', I lose a little, profits go into more metal. Why does it seem natural that the 'money' winds up going into physical? It would appear that the 'default holding' or 'primary position' is gold and silver physical metal. Does anyone feel the same way? Is there anyone who doesn't feel this way?

So suddenly the 'metal/physical' concept has been slowly creeping up to my conscious level. Ultimately, we can trade a gold stock for example, day in and day out in hope of making a 'profit'. Here's the kicker, while we move stocks or options or whatever paper form back and forth, back and forth the price of physical hasn't changed one cent. Imagine it this way, we dicker and negotiate and debate the 'value' and future 'value' of a PM producer but as we do the metal that he brings to the surface has not been sold and until he does no one has made a plug nickle.

The stocks and the futures and options are dependant of the movement of metal, not in any way, shape or form the other way around. If we really want gold and silver to go to the moon we have to buy IT, trading millions and millions of Gold Miner XYZ doesn't do it. Perhaps this is what my lazy brain has been telling me for near 6 years.

I'm getting to Sinclair.

So on one side of the coin is the argument to buy metal. Buying metal increases the price of metal. Profound isn't it? Buying miners does not increase the POG/POS.

Sinclair seems to think that serious, devastating attacks are imminent. Hard to say for sure. To be sure, if attacks become more numerous and/or more aggressive this planet will be upside-down. Is this where we are headed? It becomes useless to debate the issue because one cannot know for sure. So how does one cover his butt (hedge) in the case of disaster? Surely not with paper, stocks, options, derivatives, currency or otherwise. The obvious choice is metal.

So what does all this mean?

This is what we know or at least seem to know:

a) we accumulate physical metal either in a conscious or a semi-subconscious state because it is the 'bottom-line', the base or foundation, if you will, of gold ownership.

b) profits are 're-cycled' to more metal.

c) the price of physical will increase as more and more is demanded.

d) the POG is not (directly) influenced by a million or two million or a million million shares of GOLD ABC trading hands.

e)a future bet on the POG is a 'derivative'; it's a bet on its price in the future, it's not gold ownership.

f)geo-political events have been on a slow and steady rise for years now, are we far from the 'BIG ONE'? Protection from this event is in physical form ONLY.

Has the market been telling us something very important? As the POG/POS continue to rise the stocks languish. Gold and silver are definitely leading. Mr. Market is telling us future earning streams of these companies are not going to rise. Why would that be, gold has inched up back to recent highs and the stocks (many/most?)are no where near their highs.

It tells me that either the recent rise is either not sustainable or movement into metal is now serious, indicative of a near-term/medium term 'paper' meltdown, how this meltdown occurs is anyones guess.

I may be moving paper into metal today.

Good luck.

GoldiloxWho "needs" Terrorism when the leaders are already unraveling the economy?#1194584/2/04; 06:17:58

@ Slingshot,

Sadly, your logic lends credence to the fear that as "renegade" operatives trained to successfully battle the Soviet "menace", terrorists have now taken on the Constitution, a greater menace, culminating in a new "burning of the Reichstag". Capitol Hill, though not targeted, was emasculated just the same, judging by their blanket acceptance of PA I and II without even reading the bills, as reported by Ron Paul.

I studied the page someone posted about the "implosion" of the Twin Towers and found the engineering concepts proposed more than fascinating. Interesting that iron refuse from the site was shipped to China for recycling, and an Asian artist has recently won an award for "art" created from the rubble. No investigative journalists are likely to win a Pulitzer prize from long ago "disposed of" physical remains.

Last week I read some speeches by Martin Luther King referenced by "Smithy" at "". MLK was remembered for his role in supporting civil equality, but his talks about financial inequality have faded into obscurity, as they pointed too many fingers in the direction of the banksters. There must always be a scapegoat when the system fails. Housing and lending inequality was not created by a tiny minority of extreme racists.

It's difficult to swallow, but the economic collapse has fingerprints of being "engineered". Perhaps this what Sinclair has been referencing of late.

As was expressed during the Watergate investigation, "Follow the money." Not just "terrorism "financing", but who really benefits from global unrest?

Get gold!

GoldiloxPOG open#1194594/2/04; 06:23:52

nice jump to 428.55 at the COMIX open
CometosePPT has their hands full this morning#1194604/2/04; 06:38:29

With GOLD trying to break out and the Dollar having its woes......and they just can't seem to get JACK SILVER to go back into the box.....

Something's broken down at the FED......
ITS THE DIKE...........
Put on your rain gear and get into your life boat.

Black BladeBLS Says 308,000 Jobs Added#1194614/2/04; 06:55:18

During an election year I would not be surprised to see phoney statistical manipulation. That's a lot of new "burger flippers" and janitors. Also, if true expect gasoline prices to surge to over $4/gallon and by summer and a rapid rise in energy rates. Even CNBC's Mark Haines is criticizing the BLS statisticians yesterday and today. Meanwhile take the temporary dip in PMs as a "gift".

- Black Blade

Gotta run!!!

GoldiloxAg $0.50 bounce#1194624/2/04; 06:58:10

$8.44 to $7.94

Our $0.50 moves are here! Let the battle commence, Sir Slingshot!

ZhishengNo $6 rule on the down side.#1194634/2/04; 07:00:41

It's called running the stops. Gold down about $9.

And volitility in silver? Difference between high and low today is about 55 cents.

But the fundamentals have not changed, just the makeup on the markets face.

Golden LionheartThe Six Dollar Rule.#1194644/2/04; 07:03:22

Today looks like the beginning of the end or the end of the beginning of the so called "six dollar rule". We are entering a new stage in the proceedings. Keep your powder dry.
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MKNews & Views #1194664/2/04; 07:19:42


End of week overview
Gold, silver soar on inflation threat


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GoldiloxBond moves#1194674/2/04; 07:22:00

CNBC just reported that their was major movement in the bond market 2 minutes prior to release of the BLS numbers, but the BLS responded that their is no evidence of a leak.

Did the PPT jump the gun to increase their ammo at our expense?

ZhishengStops being run in the euro too:#1194684/2/04; 07:28:21

down 2 cents on the day.
ZhishengSilver Action#11946904/02/04; 07:36:07

is fantastic. Gold still down over $8 but silver just hit unchanged on the day. Every dip in silver seems to bring buyers out of the woodwork.
ZhishengBattle in the gold pits.#1194704/2/04; 08:05:49

And silver up over 11 cents with the euro still down 2 cents.
Cavan ManBLS#1194714/2/04; 08:14:59

"There are lies, damned lies and statistics."

No hiring in the my box world which is a rather large universe. We are busy only by virtue of plant closures and consolidation to the tune of a reduction in output of 5MM tons. Hedge against the obvious...CM

CoBra(too)The BLS is putting itself in a Box#1194724/2/04; 08:29:00

Hello, CM, right on.
Don't you think the the AU/AG shorts are losing same? More than ever before after todays little show of volatility - and by the same token they're killing the bond.
And with the bond inerest derivative hedges of the GSE's and other major players "Mae tweak their Fannies"!

Looks like we're off to the races - cb2

Socrates964Job report#1194734/2/04; 08:31:57

Can anyone explain why the total number of seasonally adjusted jobs is always 750k to 1.5m higher than the non-seasonally adjusted, and why 1/2 of these extra jobs are in the construction sector? Just curious.

Gold doesn't seem too perturbed either way. Technically, it should do a $17 harmonic retracement from the high and is now down $16.60 this morning, so maybe that was the sell-off. Too early to tell, but it doesn't change the bullish technical picture at all. Gold would have to close below 412 to add an extra 2 columns to the trading range and raise the price objective from 452 to 476.

DruidBond Spreads#1194744/2/04; 08:40:52

Druid: Look at the differentials between today's yields and yesterdays. These are HUGE moves for a single day. A lot of pain being felt.

It's not a matter of jobs being created in the physical economy, it's at what price those wage inputs command in the marketplace. I know of some high flyers who had to take a jobe at 1/2 to a 1/4 of what they were formally earning doing the same job( if they can get one). Their debt structures didn't quite fall in relation to their new incomes.

Today's jobs announcement has more to do with the "financial" wizards( both public and private) having a justification (which would provide an acceptable explanantion) for a possible rise in interest rates.

The Fed won't initiate any rate hikes because they certainly wouldn't want the rap for such a "bold" move and all the attention that might bring, however, better to blame it on this abstraction known as the "market".

GoldiloxBLS Leak#1194754/2/04; 08:58:24

CNBC is now laughing off the leak, as some traders wearing references to "Trading Places" stolen OJ numbers suggest huge losses based on 5 point moves in the long bond minutes prior to release. Wonder whose footprint is suggested here?

What an amazing way to maintain public confidence - drop taxes and manipulate the markets into bubblicious rises while the soup lines quietly grow below the media's hype horizons.

The PPT is the new Ollie North arms-for-drugs cartel, only they use Buffett's WFMD and the drug of phony prosperity. Just like Ollie, they break the law for "National Security" purposes, so even if caught, they will be pardoned as patriots while they bankrupt the private sector to ensure government control of the "free markets".

Gold and silver are not relinquishing their March price rises, as buyers jump on this "gift" at the support levels. Miners, who have lagged PM moves, are treading water during the volatility. The DOW's triple digit open is fading as the trading day progresses.

Interestingly, after so many $6/day rumors, buyers are not letting gold drop more than $6 either. Silver has touched $7.99, but literally flew back to the $8.10 range.

DruidDruid (4/2/04; 08:40:52MT - msg#: 119474)#1194764/2/04; 08:59:37

Correction..."take a job". Typing on the fly and blind today(forgot my specs.).
GoldiloxAg#1194774/2/04; 09:05:12

Oops, gotta clean my glasses. Ag touched $7.88, 11 cents lower than my $7.99 number. At $8.08, 20 cents have been reclaimed and yesterday's close seems to be the center of the gyrations.
Goldiloxglasses#1194784/2/04; 09:08:35

@ Druid;

I'll send you my glasses. They obviously aren't doing much good here. LOL

Gandalf the WhiteVOLATILITY !!!! ---- Not for those of faint HEART !#1194794/2/04; 09:12:14$GOLD,P

Look at the P&F Gold chart of yesterday and see the BEAUTIFUL little "BLUE" 4 (representing the indicator for the Month of April !
AND the NEW Prelim. Price Objective of $516.0 !!!!!!
NOT to worry about the VOLATILITY as only GOLDHEARTS have the real thing (PHYSICAL) and are not faint of HEART !

Thanks Sir Soc for the "running commentatry" on the FUTURE actions that will forthcomeing in the GOLD P&F chart !

IT is STILL ---- TO THE MOON, Alice !!!

GoldiloxMore BLS leak#1194804/2/04; 09:18:41


Reuters says their BLS number release was time-stamped at 8:28, but not released early, as the computer releasing the report had an incorrect clock setting.

The BLS says it is "normal" to see volume increases prior to news, but there is no obvious evidence of trading based on leaked information.

A five point barrage is not evidence of a leak? Just some PPT trader with major cajones, I guess.

Mr GreshamJobs R Us, or Why bonds fell#1194814/2/04; 09:38:38

I don't usually read this link, but they sure got excited today.

"8:34am ET - Economic release: Holy Smokes!! March nonfarm payrolls rose 308K -- the largest gain since April 2000 and more than 100K above what most considered a ridiculous high end estimate. Manufacturing showed flat growth -- the first non-negative in 44 months. Construction payrolls surged 71K as the 230K surge in service providing payrolls was broad-based. An extraordinarily bearish report for the bond market and extraordinarily bullish for the equity markets."

And a few minutes later, added:

"The unemployment rate moved higher to 5.7% (once again inconsistent with payrolls) as hourly earnings rose 0.1% and the workweek shortened to 33.7 hours. While the spike in payrolls isn't consistent with a rising unemployment rate and a shortened workweek, the markets will be quick to presume that the Fed won't be waiting until 2005 before taking away some of the very accommodative policy stimulus. Both of the two leading indicators of Fed policy timing -- core inflation and payroll growth -- have turned the corner. "

So even the regular watchers are saying "Sounds fishy, but... we gotta go with it." Or, Al is looking for a peg to hang the next rate rise on?

I thought stocks used to _love_ higher unemployment (which this report seems to leave in doubt), because they knew stocks would follow bonds eventually when rates dropped. In this case, are they just swiping each other's lunches back and forth? Won't be long now.

When rates rise, the old wisdom is that it's bad for commodities, metals, etc., right? (Remember Volcker?) But in these times, we're walking a knife edge, waiting to see how much default the rate rises bring out. (Think derivative "events", balance sheet covenants, etc.)

So the markets will be guessing how much more Worldcom-Enron-Global Crossing, etc. is in the pipeline in the financial world firstly, and the finance-dependent industries. That's gotta be a drag on stocks soon enough.

And they'll be re-checking the old rates-up-gold-down belief eventually. It may take some of that bad news to come out, but then, they've absorbed plenty of bad news already ($billion defaults) so the psychology is hardened. The question is, are the balance sheets as impervious.

Also, April 1 volatility. I have to imagine (amateur take on things) that it has something to do with Japan. Maybe jobs are an instant cover for something we'll hear later in that department?

Cavan ManHUGE LAYOFF ANNOUNCEMENT#1194824/2/04; 09:47:28

Sun lay offs 3,300 amid huge losses

By Dean Takahashi

Mercury News

Sun Microsystems dropped several bombs on Silicon Valley and Wall Street early Friday, announcing plans to lay off 3,300 people amid huge losses and a massive $1.95 billion settlement of Sun's long-running litigation with Microsoft.

CometoseCHARLATAN MATH for the 21st century#1194834/2/04; 09:53:18

I think the president missed his calling as a teacher....
it would appear that he as been down to the BLS himself to tutor them in the new math......

Join him on his illusionary quest to make something out of nothing using the media to promote his hoaxes.

The new math was first introduced during the campaign in IRAQ where the government and the media concocted out of thin air ...."WEAPONS OF MASS DISTRUCTION " in heaping amounts....that was only a test run for the NEW ECONOMY that they (had foreknowledge ) knew was on the way ...


making JOBS APPEAR OUT OF THIN AIR.........packaged and delivered to you BY MSNBC.........

Mr GreshamJobs#1194844/2/04; 10:05:31

Poster on another board mentioned returning grocery strikers in California as temporary reason for job spike.

Of course, when I go in the grocery and have them make me a sandwich in the deli section, that's a manufacturing job, right? Hey, who needs China!?? ;)

GoldiloxJobs#1194854/2/04; 10:17:39

@ Mr. G

Also, the manufacturing sector showed no job growth. The hoopla was about a halt in job losses in manufacturing. Sun and Gateway are preparing us for a reversal in April.

Volume on the SM is still quite low, even though initial reactions have been jubilant.

Rick Santelli is maintaining his stance that he was on the floor and witnessed the huge moves in the bonds and futures markets at 8:28AM.

The spin doctors are working overtime, but Reuters' computer wasn't the only one that started activity at 8:28.

slingshotWhat Happened?#1194864/2/04; 10:48:51

Gold and Silver stabilized.

The market is acting like two Tomcats that are fighting and have stopped to stare at each other as the Growl.

Let the FUR FLY!

GonlyoldLike I said...#1194874/2/04; 10:53:03

I don't want to upset you good Sirs and Madams, but again, TPTB are still very much in control. They aren't giving up easily. They can't.

And if the POG ever does go up to the loftly heights that some envision here on this site, what condition do you think the US economy is going to be in? How about the world economy? If that happens we will have more problems than missing out on low priced gold. Like BB keeps saying, get out of debt and stock up on food and other barter items. Yes, gold and silver will be a good barter items. I hope everyone has some. But I also hope everyone has other things too.

GoldiloxJobs Report#1194884/2/04; 10:56:33

For those interested in the jobs report, and all its vagaries, George Ure has posted it with commentary over at UrbanSurvival.

Are the 308,000 jobs created the "missing 321,000 jobs" from January?

Also bolstering the number were 13,000 returning SoCal grocery workers who ended their strike in March.

Methinks we got another "jawbone" from TPTB, but the fundamentals are unchanged.

One thing on which most pundits agree - interest rates are sure to rise. Jim Cramer says the homebuilders and other interest rate sensitives are now VERY risky! He recommends commodity based investments!

Too bad they canned Jim Rogers a couple years ago, or they would not be so far behind the curve.

Use the blip to get hip!

Buy with both hands!

ZhishengNice little runup #1194894/2/04; 11:31:56

in gold at the close. Looks like people are afraid to be too short going into the weekend.

The euro got hit much worse that gold today.

TopazTrend reversal.#1194904/2/04; 12:19:22

After todays action the Bond/Oil matrix is basically intact, $/Oil has parted company and Gold/$ is again demonstrating the decoupling effect.
Bonds/$ typifying flight to Cash.
Huge swings in such large markets (Bonds,DX, Oil) doesn't bode well imo.

Ned...right on!

Federal_ReservesGoldilox> On Jobs#1194914/2/04; 12:24:13

Thanks for those cogent notes. The policy makers have ginned up some jobs without showing and real gain in wages which remains at 40 year lows (1%) and in fact, real wages are declining. The administration has been getting hammered day after day about jobs, I guess they felt backed into a corner, and had to create some.

In my mind, it was a so/so report, yet now they have 5/10/30 year interest rates spiking which brings the pin closer to the consumer credit bubble.

There some big issues of Treasury Debt next week, lets see how the market handles it now.

SundeckChanges in POS and POG over NY trading#1194924/2/04; 14:42:19

Note that in spite of the gyrations in POS and POG during the NY day (from 00 hrs NYT to market close on Fri afternoon), the POS is effectively unchanged (at about $8.12), and the POG is down about 1.2% (from $426.5 down to $421.4), corresponding to a rise in the USDX of about 1.4%...

Has anything changed? I suspect we will need to see sustained jobs growth (and falling unemployment) over several months before people will start to breathe easy... "One swallow does not make a summer", but who knows how the people on Wall St think (or don't think).

POG is still way above (about $40 above) the "best-fit" trend line that has described the POG versus USDX relationship for the past couple of years. And it seems likely (at least to me) that POS is "suffering" from a combination of world-wide renewed industrial demand (like for base metals in general), speculative buying (which always accompanies major upmoves in anything), underpinned by the arrival of supply shortage, that people here and elsewhere (including Buffett) have been anticipating for years.

Just my thoughts....FWIW


R PowellSupply and demand....or Speculation?#1194934/2/04; 16:25:53

Sundeck, your words....

"And it seems likely (at least to me) that POS is "suffering" from a combination of world-wide renewed industrial demand (like for base metals in general), speculative buying (which always accompanies major upmoves in anything), underpinned by the arrival of supply shortage, that people here and elsewhere (including Buffett) have been anticipating for years."

We are now two. I'm refering to your mention of the possibility of a physical silver shortage which might be felt more in the London market where today's spike to near 850 happened, than on Comex which I believe is more of a paper market. I've still not read or heard one word from any of the big name metals' analysts or commodity analysts about this possibility. Leonard Kaplan has been adament over the last few weeks (in his lenghty + weekly offering in "Consensus") that silver's move is entirely speculative in nature. He expects a big washout shortly and points to the COT numbers as confirmation. Other analysts repeatedly opine that there is NO fundamental reason for silver prices to rise. None of these offers any numbers, sources or even any basis for this view. The only voices in the wilderness are the usual silverbugs...Butler, Morgan, etc. This silence may prove helpful over the long haul. I'd be happy to see continued steady gains, downdraws supported with buying and no huge price spikes which might signal a speculative blow-off in price, no?

This is the first weekly silver close that I've ever seen above eight dollars. Isn't this fun!!
Friday, you say?
Then it's Happy Weekend to All !!

TopazPoG @ Sundeck.#1194944/2/04; 16:36:38

Yes, we've yet to retrace the run-up following the assassination and unusual strength in PoG prior to Madrid. The CoT report indicates Commercial interest is discounting a retalitory event (Hamas) while imo, the others seem to feel it's inevitable.

Time will tell.

SmeagolSir R. Powell (your Posst below)#1194954/2/04; 16:53:10

A Silver price split possible?

Hmm... sss... shortage-based ups in London markets, 'corrected' later by the (much bigger on paper) Silver Comex. If this keeps happening, could the increasing strain eventually bring more attention to the differences and to the whole situation, and mayhaps snap ties that bind? Jusst wondering...


R PowellSilver Survey#1194964/2/04; 17:28:36

CPM Group has chosen 27 April 2004 as the release date for it's 2004 Silver Survey, please go to the following link for more information, to order the report or/and attend the briefing.

R PowellSmeagol#1194974/2/04; 17:55:09

Are you refering to a disconnect in prices?

Imho, no, arbitrage will not allow price differences for the same standardized item between markets for any length of time. Even now, it would not surprise me to learn that there are traders thinking of buying on Comex and selling in the access market in London OR selling in London and buying on Comex. If I were to attempt this (not investment advice!) I would buy first since naked short positions are far beyond my risk tolerance right now!(g)

Many will disagree with me but I have never believed that there will/could be any appreciable price separation among markets. I also don't believe there could be any separate paper and physical price as long as delivery is possible when demanded. The fact that there isn't enough physical available for all existing contracts also does not worry me at all. The market is telling us now that there is no longer enough $5.00 or $6.00 or even $7.00/ounce silver available, just as there are no soybeans available by the bushel for that price. It is the market's job to determine what the supply/demand equilibrium price is. The market does this every day. I believe both the silver and soybeans markets are struggling to find this balance. It is great fun to watch, especially for those of us on the long side, no!!
Happy weekend..

R PowellTopaz#1194984/2/04; 18:10:56

Thanks for the COT link. I am surprised to see that the so-called commercials added net long positions while both the large and small specs added net shorts during this particular week!
I'm also surprised by the lack of size of the net change in all these positions. Will we see large price moves with only small net position changes? How should this be interpreted? Does this suggest a longer time duration of this trend? Will the commercials and specs buy and sell, then sell and buy, alternating net long (short) increases between themselves while silver continues its upward trend intact???? I don't know but wonder?

SundeckR Powell @119493 Silver - Supply and demand...or speculation?#1194994/2/04; 20:41:52


You said:

"I've still not read or heard one word from any of the big name metals' analysts or commodity analysts about this possibility. Leonard Kaplan has been adament over the last few weeks (in his lenghty + weekly offering in "Consensus") that silver's move is entirely speculative in nature. He expects a big washout shortly and points to the COT numbers as confirmation. Other analysts repeatedly opine that there is NO fundamental reason for silver prices to rise. None of these offers any numbers, sources or even any basis for this view."

Sundeck: You sparked my interest, so I went to the London Metal Exchange site to compare base-metal price trends with silver price trends over the last five years.

The LME web site is at:

Silver price history can be viewed by selecting the 5-year option at:

A bit of fiddling allows one to produce price-history charts of silver, copper, lead and zinc over the last five years. (Print out the charts for ease of reference, or open them in separate windows.)


As many here would know, only about one quarter of silver production arises from "primary" silver mines. The rest comes as a by-product mostly from lead/zinc, copper, and gold mines in that order of importance (see the Silver Institute web site at the above link).

First notice that:

1. ALL the metals commenced their upward trnds in price during the latter half of 2003.

2. the magnitude of the increase to date is comparable for all metals (70% silver, 85% copper, 90% lead and 40% zinc).

Few people would suggest that the increases in price of copper, lead and zinc are "speculative". They are clearly being driven by demand (from China, in particular, as well as all the other industrial economies), coming off the back of low prices and cut-backs in mine production. Are we to suppose that silver is different? ... knowing, as we do, that silver is an essential industrial metal (like the others) while also having its "precious" jewellery (and historical financial)role. Any "analyst" who suggests that the price increase in silver is "speculative" had better have some good arguments to support their view.

I have difficulty in imagining what arguments might be employed. Perhaps some might say that silver is different because of the "large above-ground stockpiles" (like gold). However, we know these have been run down to almost zero, which places silver in much the same position as the other metals: reliant upon new mine production and recycling of scrap.

If the stockpile idea is important, we might expect to get some clues by looking back a few years to see if silver behaves in some way differently from the other metals. Silver's price history back to 1999 is relatively flat (like copper and lead). The odd-man-out is zinc, which had very high prices between 1999 and 2001 (why??).

Unless the "analysts" are in posession of some secretive and highly privileged information (which is preposterous), then I am inclined to treat the price rise in silver as being supply/demand driven, like the other metals. (They will all have a speculative component.) However, unlike copper, zinc and lead, there has, in the past, been a significant stockpile of silver to draw from. That is now gone. Therefore while mines may be satisfactorily gearing up to meet the demand for copper, lead and zinc, the demand-pressure for silver may be less easy to satisfy. Hence, if anything, the demand-driven price-increase of silver should be greater.



SmeagolThankss Sirs Sundeck and R. Powell#1195004/2/04; 20:53:22

Finely distilled Possts like yours help those like us who don't know how to figure out all that data get a MUCH clearer picture of what is really going on. Thank you!


BoilermakerSolution for High Oil Prices#1195014/3/04; 07:02:06

Lawmakers in both the US House and Senate introduced legislation Thursday to
amend US antitrust laws to make OPEC illegal. The bills introduced in the
respective chambers were identical, calling for amending the "Sherman Act to
make oil-producing and exporting cartels illegal." The bi-partisan Senate
measure, S. 2270, was sponsored by Sens. Mike DeWine (Republican- Ohio), Herb
Kohl (Democrat-Wisconsin), Chuck Grassley (Republican-Iowa), Chuck Schumer
(Democrat-New York), Russ Feingold (Democrat-Wisconsin), Patrick Leahy
(Democrat-Vermont) and Norm Coleman (Republican-Minnesota). The House bill,
H.R. 4106, was sponsored by Democrats John Conyers of Michigan, Zoe Lofgren of
California and Mike McIntyre of North Carolina. The Sherman Act, passed by
Congress in 1890, prevents monopolistic practices, like price fixing, in
interstate or foreign commerce. The bills have been referred to each chambers'
Judiciary Committee.

Our lawmakers have decided to seize the opportunity to win some points with their constituants. Big Oil and now OPEC
on their hit list. I can't think of a more counterproductive way to improve oil supplies except for windfall profits taxes. Maybe that's next.
Perhaps this is a prelude for the "enforcement" of US antitrust laws in foreign nations. No need to find WMD's to justify taking oil fields. The US military is going to need a lot more men and ammo to pull this off.

Dollar Bill¦:-)#1195034/3/04; 08:06:56$HUI,uu[p,a]whclyyay[d20000906,20041231][pc10!c40][vc60][iuh5,5!ui10,10!up14,3,3!la5,34,5!ll14][J21672171,Y]&listNum=8

Easy to see the manipulation of the "free Markets" with the middle chart.
Dollar Billå#1195044/3/04; 08:21:53

Coming to a baby boom generation near you.
MoegoldDollar selloff!#1195054/3/04; 11:25:05

I just read in Barron's that foreign holding of US debt at the Fed declined by 16,871 millions, last week!
After watching foreign holding of US debt held by the Fed increase week after week, it looks like a very significant change is occurring (if the Barron's data is correct).
One weeks data does not constitute a trend, but this could be significant for gold.

Mr GreshamInter-Generational Skirmishing Begins?#1195064/3/04; 13:45:02

Dollar Bill nailed it this morning with the BBC link about Europe's pensioners protesting. (And remember Greenspan's SS warning a few weeks ago?) I got started with John Mauldin's e-mailing yesterday mostly reviewing Kotlikoff & Burns' new book "The Coming Generational Storm". It's at Amazon & BN, but not in my library yet.

The link below gives Kotlikoff's paper of the same title from three years ago. I doubt that much has changed, factually, except to make it into a popular book version. Mauldin praised it for some original insights and facts. The reviewers at Amazon are pretty pleased with it.

Mauldin critiques their program for replacing Social Security with his own alternative preferences, but both admit that politicians will likely do neither. That's why the "Storm" book wraps up with recommendations for planning your own retirement years. I don't know yet if they recommend gold and PMs & their stocks or not.

The numbers -- just doing the numbers for yourself -- says it's really going to come down to generation vs. generation for awhile, but as they gradually cut us loose, gently or not ("I've got #%^&@#%^ kids to feed!"), by one pathway or another, it's going to be Walmart Greeter vs. Walmart Greeter, I mean, Boomer vs. Boomer.

And you know what that means. With everything else going down, and mostly just two things going up very visibly, people are going to stampede into the only viable savings vehicles left. With all of the hydraulic force of the demographic imbalances between the generations, with all of the fury that newborn Boomer savers piled into mutual funds, their surviving dollars will seek successful markets, year upon year.

Then, somewhere at the bottom of all the other markets, you can convert PMs back into other useful items. ;)

My perspective: Time for Americans to learn what the rest of the hard-working, impoverished world already knows. There is no "We" in this anymore. (I call it the "Tonto Factor": What do you mean "we", Kemo Sabe?)

We are not "all in this together" anymore, except by our lagging individual beliefs that we are. "We" are not going to "solve Social Security" by any re-jiggering of the numbers. It's at its limit, and going even further, before anyone adjusts one more domino.

Putting "investment" options, and investment return outlooks into it is ludicrous and too late. The FedGov is so far in debt, that any solutions implemented will collapse under the weight of new economic numbers coming in right behind it.

It is really just a case of how much the benefits are going to be cut, and when, and for whom. And the burden will fall more on NEAR-retirees than on the GenX outyears, because the Gov will be in crisis sooner rather than later.

I imagine the most likely immediate remedy will be to freeze benefits at current dollar levels, and let inflation cut their real costs. And that will be the expedient minimum, since Mauldin cites Kotlikoff as saying an effective cut of 45% is needed NOW to ensure solvency.

We can't ALL be saved in our retirement years by buying up the precious metals. The very definition of supply and demand comes into play, and denies safe harbor to the latecomer. To some extent, our countrymen might benefit slightly by buying in ahead of Asians & Moslems, while we still have some Dollar power to do so, but the likelihood of this, and its effect, are trivial.

It's really up to YOU, to take care of yourself. (Oh, and try to secure that loving bond with your children. Maybe start by shooting your TV, and getting outside to play?)

Saving for retirement? Get real. Get yours before someone else does.

ArcticfoxTaken off the Richard Russell BB..#1195074/3/04; 13:46:27

I am an avid subscriber to your comments and felt compelled to write this morning after hearing the job figures on CNBC this morning. I am the President of a staffing company in Houston, Texas. We have been in business for almost 20 years and the last 3+ years have been extremely soft. The last 2 years have been the worst ever. The government says that we gained 308,000 jobs last month. I would like to know where they are! Our phones and the phones of my friends in the business are not ringing so I am obviously a bit confused by this number of 308,000.

I just got off the phone with a lady that I placed at a Fortune 10 company a few years back. She said that the company is planning on moving 250+ professional jobs overseas (with rumors of eventually moving 11,000). We talked about the 308,000 number and she said it before I did..."yeah, those jobs are at Wal-Mart. They are not professional positions". She took the words out of my mouth.

The administration and the media have a vested interest in keeping things positive. The media to sell ad time and the administration to get re-elected. So, they focus on the numbers and not what the numbers actually represent. If an accountant making 60K a year loses his job and finds another job at Dillards making 18K, the government says that someone has found a job and they pop open the champagne...


Warmest Regards and keep on keeping it REAL!!

Allan F.,

R PowellSundeck // silver supply transparency#1195084/3/04; 13:47:20

I just read your #119499 post. It's a very nice piece of research, thanks.

You mentioned the downdraw of base metal supplies. On a yearly basis, the remaining supply number is an indicator that can be compared to previous years. The forecasted ending supplies after the next year concludes should also help determine price. With crops, the harvest time starts the marketing year as opposed to the calendar year used for metals. Logical.

Analyst Todd Hultman gave some such numbers ("Consensus", 3/26/04) for copper... "London inventories that finished 2002 at 856,400 tons fell to 432,975 tons by the end of 2003." The basic formula is existing supply plus all new yearly production (from whatever sources) minus total yearly useage = year end existing supply again. Simple, no?

One of my laments has always been the lack of such numbers for silver. The US government has exhausted its stockpile that once was measured in the billions of ounces. Who else holds silver? The available Comex stores are very small compared to yearly demand. How much does London hold? I don't know, does anyone?

When yearly demand is guesstimated at between 800 to 900 million ounces, it seems inane to watch a few million ounces per month change ownership in Comex warehouses yet there are many analysts who base analysis, saying there is no fundamental reason for higher silver prices, on the Comex delivery numbers. This is nuts. There was plenty of bread in Marie Antoinette's kitchen too, compared to how much ONLY the royal family consumed. Industrial end users have not yet reached for the Comex stores. Silver of last resort?

I look forward to this year's Silver Survey due out on the 27th. It's also full of guesstimates but may be as close to the reality of the situation as we can get. FWIW, the USDA often revises crop numbers years after the fact, usually when present numbers contradict past assumptions. Sometimes they are just illogical. The USDA just last week estimated an increase in farmers' cotton planting intentions for this coming season. Cotton is priced about $.20/lb. above production costs. Farmers can sell new crop soybeans in Nov. futures contract month...RIGHT NOW.. at well over a $4.00/bushel profit. Yet the USDA estimates extra acreage will be planted in cotton! Farmers are not only hard working laborers but they are also savy businessmen. Most have a good working knowledge of the futures markets or accountants who do. I mention this as an example of why I question all estimates, whether Silver Survey or the USDA. I guess I'm preaching to the clergy here, no? We know about government lies, damn lies and statistics(g).

Anyway, only time will tell if there might be a real physical silver shortage about to be revealed. Can the price trend move from under $5.00 to over $8.00/ounce have been entirely speculative as Kaplan states? I don't know but I don't think so. The market (imho) reacts to downturns too strongly. This is not to say it won't go down! The speculative players will take profits at some point but, if there are real supply and demand forces supporting this market, then the big dip to shake off the weak longs will be a buying opportunity when/if it comes. How many will have the nerve to buy after silver falls over a buck or so?

Also, fwiw, how high must the market price physical silver to ration use IF there really is not enough for all end users? Boy, oh boy, this could be some fun!!
Happy weekend

CoBra(too)OPEC illegal? @ Boilermaker ... #11950904/03/04; 14:04:56

... And, so what; Does it add to legality of attacking an oil producing country of the ME, whatever its political system, on totally false pretenses?

Under the same pretext, Microsoft and even Coca Cola may be illegal cartels; And worst of all the FED, swamping the world with so called "legal tender" FRN's and pretending the Dollar's reserve status is the only legal exchange value for somebody else's oil.

The problem seems to be that the US admin has intricated itself into a multitude of hedonics and outright lies that even the nations economic statiticians, namely the BLS, including its computers, have lost track of reality. From here on the numbers reported on any economic activity are to be accepted with a grain of salt; Or as the Bureau says itself "!hypothetical"!

Nice to know that BLS is reporting hypothetical numbers, only; Otherwise people would feel really mad. It maddens me that my hypothetical neighbor lives on a scale far superior to my lifestyle, as he strives on all the great advantages of enhanced productivity. And as such he may not be prone to guzzle gas, eat, nor is in need of medicare. CPI, PPI and not even employment numbers would faze him;

Not really, as my hypothetical neighbor in essence doesn't exist; He's just the ideal idol of the new era of hedonic reporting of a government agency, which is more kaput than its computers and more corrupt than its masters; Or is it?!

Well, I guess after this tirade I should endorse my belief to exchange your FRN's to the reality and true and historically proven value of gold. What's more, Gold (and silver) has sprung the shackles of official (oral)debasement in all currencies and will again reign supreme. And so will silver, also used as real "money" for eons...

specie-manSilver behavior#11951004/03/04; 15:37:15

I don't pay a lot of attention to so-called "technical analysis". I prefer to look at the fundamental picture (developing geo-political and financial trends/events, etc.).

But from my point of view, however, I have noticed a recent change in the way the price of silver is behaving.

In recent years, the price of silver would gradually climb and then stall out. As soon as it showed any signs of weakness, it would get shot down rapidly.

More recently, however, I have observed a tendency for silver to move up more quickly. And now when the price stalls or drops slightly, it doesn't drop like a rock - it holds relatively firm.

To me, the recent behavior is not indicative of speculation. It is evidence that there are bidders out there who want the metal.

Boilermaker@ CB2 #11951104/03/04; 16:42:38

I was composing my thoughts about your message but one of my cats stepped on the red on/off switch on my computer's surge protector. Perhaps a fortunate disconnect.

Anyway, my thoughts boiled down to this; Most Americans believe that politicians lie. Most Americans, however, still believe in government statistics, financial advisors and the financial media. Most of us here know that over the past ten or twenty years their has been an unholy alliance among the political, financial and media sectors that has conspired to create an "Alice in Wonderland" economy designed to perpetuate the status quo of US economic and $ superiority.
My local newspaper showed signs of a reality check today. The front page headline was "March sees surge in jobs". The article then expressed a local labor official's response "There is massive unemployment here. I think those (national) numbers are a little bit skewed. It's not a true picture of what's going on in the labor community. Certainly not in this area."

Americans are not stupid but they are slow to sense the depth and breadth of the con game that has kept the economy afloat these past few years. My greatest wish for the US is that leadership will emerge that will reject the current corrupt system, bite the bullet and get back to sustainable economic fundamentals. Most Americans will support this approach.

Arcticfox(No Subject)#11951204/03/04; 17:25:04

Senate panel approves 'NOPEC' legislation
September 21, 2000
Web posted at: 4:21 PM EDT (2021 GMT)

By Dana Bash/CNN

WASHINGTON (CNN) -- The Senate Judiciary Committee unanimously approved bipartisan legislation Thursday to allow the United States government to sue other countries or cartels for the price fixing of oil.


In successful lawsuits, the government would be eligible for damages for the suffering of U.S. consumers.

Criminal action could be sought against members of the oil cartel as well.

Sponsors say rulings would be enforced by seizing assets of international governments or companies held in the U.S. government could also try to enforce a judgment in the courts of the foreign nation found liable.

Although current law does not prevent such lawsuits, judges have overturned suits against international cartels because of "sovereign immunity" and because they read the law as prohibiting the U.S. government from ruling what companies do on non-U.S. soil.

This measure seeks to clarify the law by explicitly stripping governments and non-U.S. companies of "sovereign immunity" from such lawsuits.

"Our NOPEC legislation will, for the first time, enable U.S. authorities to combat the price-fixing conspiracy of the oil cartel and will, at minimum, have a real deterrent effect on nations that join forces to fix oil prices to the detriment of American consumers," said Sen. Herb Kohl, D-Wisconsin.

Sponsors said they with the growth of the global market, a consensus has been formed that certain basic standards are universal, and that "rogue actions of the international oil cartel should be treated no differently."

Clink!Will somebody pinch me, please ?#11951304/03/04; 18:24:04

I really can't believe I just read that :-

"Our NOPEC legislation will, for the first time, enable U.S. authorities to combat the price-fixing conspiracy of the oil cartel and will, at minimum, have a real deterrent effect on nations that join forces to fix oil prices to the detriment of American consumers," said Sen. Herb Kohl, D-Wisconsin.

It's amazing ! I was in Wisconsin just last month, and I got there via Delta Airways - I didn't know they ran routes to other planets ('cos I really don't think Sen. Kohl is on Earth when he says that ......)

GoldiloxNOPEC and the confidence game#11951404/03/04; 18:36:07

ArticFox and BM:

It looks like congress "overwhelmingly" supports the scapegoating of OPEC for a price-fixing con game in which the US Oil companies have colluded for a number of years. The "energy shortage" and "deregulation and price fixing" scams of the past couple decades have been an important tool not of OPEC, but their major customers, the US and multi-national oil companies. Since these are the very powers who have financed the rise of the current administration, this is an interesting paradox.

While they target the bank accounts of foreign nations (a la Iran in 1980), they have ignored the money trail of ENRON, etc. that leads right to the White House. One lone Congressman asked about the huge increase in US Treasury holdings in the Caribbean, and was poo-poo'd by Greenspan. No one really DARES look to see where all the $Billions really went, as ENRON was GWB's largest single contributor. It's much easier to confiscate the accounts of IRAN and Venezuela with the banksters' cooperation, and hail Martha's conviction as a victory for the "little guy".

A return to fiscal prudence? Hardly! Confiscation of assets (OPEC, not EXXON, of course) will continue until the OPEC nations stop shipments, inducing the war that Rummy, Wolfowitz, and Co. so desperately desire to retain their hold on the world economy. After all, as the dollar loses potency, the wild card left "up their sleeve" is the massive US military with its bases in 130 foreign countries. Supporting that, we have a press that is "owned" lock, stock and barrel by cronies like Murdock and GE, who trade legal favors directly with Michael Powell to own even more media assets than previously allowed by law.

A final hint to the severity of this situation is the current hoopla about "missing" Soviet suitcase nukes, inflaming the masses to support "fishing expeditions" on foreign soil. Preparatory inflammation, methinks.

While the press debates whether or not the CIA had foreknowledge of 911 events perpetrated by their renegade factions, further "Reichstag bombings" are likely to occur, cementing the "need" for PA I and II and maybe III, as well, suspending the Constitution all together.

Tommy Franks warned us of this about a year ago, when he said "the Constitution will be the next victim of any further terrorism". There will be no clearer trail to the real perps of new terrorist acts than there is to the competely whitewashed 911 events. Investigations will be stonewalled completely until the evidence is "completely manufactured". The Warren Commission is the "standard of justice" by which we are governed. Cover up the mess, like Ford, and become appointed (or is it annointed) President, even without election.

Be prepared for some "very strange" times ahead. They've already been strange, but the massive coverup is losing some of its effectiveness due to Internet exchange of information and ideas. Why are TPTB suddenly so "up in arms" about spammers, when my USPS mailbox is legally filled with SPAM every day? The internet spammers have a powerful skill in concealing their internet origin, that if applied politically, scares the bejesus out of them.

Truth will out, but not without great pain. Get gold and cover your paper trail as best you can.

Clink!OPI and NPI#11951504/03/04; 18:50:26

It's a quiet Saturday night here at the castle, so I might get away with posting this with out Sirs Boilermaker and Specie-Man telling me I should get a life (they may be right, but that's beside the point)


On January 22, I posted values for the Old Penny Index and New Penny Index of 0.7446 and 0.2641 respectively (ratio of metal content to face value). As of Friday, those figures have now moved to 0.8951 and 0.2902. The price of copper has gone up by over 20% in the space of 10 weeks !

Now we get the the part about getting a life. As my interest in this is to see if and when we see a real-life proof of Gresham's Law, I needed some hard data, so I went to my bank and got $4 of pennies and sorted them into old and new (the only difficult ones are the 1982s, as there are both types of coin with that date). I can report that 90 of the pennies were the old type, giving a ratio of 22.5%. This is pretty much what I saw in January with a much smaller sample.

I was thinking of what I should expect to see if/when the metal value rises. Will there be a gradual reduction in the old coins, or will it just reach a level when someone figures they can make money sorting them automatically, in which case all the rolls from the bank will contain only the new type pennies. I was wondering if any of the seniors at the table can recall exactly what happened with the silver coins. Were there still lots of them in circulation before the price surge in 1980 ?

On a similar subject, I also withdrew some cash while at the bank, and noticed that none of the notes were the new $20, which had been pretty abundant a couple of months ago. I seem to remember someone mentioning that here about a month ago, but didn't think any more about it. As the life expectancy of a note is presumably only a few short years (as compared with the trusty 1950s pennies which I have seen recently), I am surprised at the rapid dilution. Comments anyone ?

OK, on with the part of my life which contains gold - liquid gold with bubbles in it. Cheers, all !

GoldiloxFiscal Prudence#11951604/03/04; 18:58:52

@ BM:

You said-

"Americans are not stupid but they are slow to sense the depth and breadth of the con game that has kept the economy afloat these past few years. My greatest wish for the US is that leadership will emerge that will reject the current corrupt system, bite the bullet and get back to sustainable economic fundamentals. Most Americans will support this approach. "

This is sincerely my desire, as well, but my belief is suspended until Ron Paul has other supporters in Congress. At this point, he seems to be portrayed in a "Mr. Smith Goes to Washington" light.

Unfortunately, for that leadership to emerge, the masses will need to spur grassroots politics, PA or no. Another 1960's information revolution is necessary, as the media has hoodwinked the electorate back into 1950's "Leave it to Beaver" complacency.

I was heartily amused by CNBC's constant referral to BLS statisticians as "professional, non-political" public servants. One reporter even quipped, "they probably don't even know who is running for re-election."

Right! Like they don't know who their BOSS is? Snow maintained that he had not seen the data prior to release, but you can bet the statisticians saw Snow's signature on their paychecks, as well as his teethmarks in their supervisors' posteriors.

What has BLS been doing with all the revisionist data for the last few months? No one DARES ask publicly.

R PowellSpecie-man // Boilermaker#11951704/03/04; 19:33:17

Specie-man, in regard to your post #119510, may I say that I agree 100% and have stated much the same!

Boilermaker, your words.....

"Americans are not stupid but they are slow to sense the depth and breadth of the con game that has kept the economy afloat these past few years. My greatest wish for the US is that leadership will emerge that will reject the current corrupt system, bite the bullet and get back to sustainable economic fundamentals. Most Americans will support this approach."

I wish I could agree that "most Americans will support this approach". Unfortunately, I see most Americans as mostly uneducated in any financial matters beyond balancing a checkbook. The sad part is that this is, for most, by choice, perhaps a bad commentary on our educational system? I believe most expect the government to manipulate whatever is necessary to insure short-term prosperity, even if this means magnifying the longer-term disaster. Even this concept is beyond the average guy who will expect the government to "fix" any problems whenever they arise and to be able to do so forever. Short term expediency wins over longer-term planning and "devil take the hindmost". Protect yourself as the ants play on! They will not see the light until struck by lightning.

specie-manPenny index#11951804/03/04; 19:35:42

Hey Clink!

Your life is just fine - get a new one at your own risk ;)

I wonder what the US Nickel index is now ?
And the old vs new Canadian nickel index ?

All Canadian cents are bronze, I believe. With the favorable exchange rates, I would expect them to disappear first. I wonder what their exact content is ?

Dollar Billü#11951904/03/04; 19:39:45


Perhaps the oil cartel action is targeting some other plans being made by renegades like venezuala. The guys that wrote up the WTO really thought about it in depth before they wrote it up. Once you sign on, you are really tied in.
It is not just regular folks that dont really read the fine print. Many countries didnt see how all the rules would effect them. This is probably defensive action to keep that idea that got talked about here a couple months ago from becoming reality. The idea that the oil patch countries form a central bank and market control based on oil.
I didnt say that well, maybe someone else remembers the details.

specie-manNOPEC#11952004/03/04; 19:50:29

That is the strangest thing I've heard all month.
I would describe it as all of the following:


Not necessariliy in that order.

If OPEC isn't allowed to sell oil to the USA at a "fixed" price, then they will just sell it to someone else. And that other party will just mark up the price and sell (some of) it to the USA.

heavy mettleArcticfox - NOPEC Legislation#11952104/03/04; 19:58:48

Interesting piece of news. With anything reported by CNN or other major news networks, I will try my hand at reading between the lines. The general feeling the average ‘Joe’ walks away with from this article, is that it's about time ‘we’ consumers get what is rightfully ours; the cheapest energy in the world. Sue if you have to, just bring the prices down because it's beginning to hurt.

As with taxes in the US in the beginning, it was only for the rich. Now the scale has drifted in the opposite direction. A controlled outcome. On the surface this new legislation seems to benefit the consumer but maybe these laws can and most probably will be used against the US in some manner when she is weak and her markets down. What's good for the goose is good for the gander.

The hypocrisy of cartelism only residing in far off places is deafening. One more step towards a world judiciary, monetary and governmental framework and with the full support of the average ‘Joe’. Smooth.

forecasterComment to the postings of Dollar Bill#11952204/03/04; 20:38:35

With regard to your comment about the articles in the website

Article No.7 titled "Globalization Utopia" is not projecting that we will end up like this. It is an extrapolation to the extreme if we just follow the current trend to the end. There are many economists and financial analysts torn between to believe GDP data or to believe the employment data showing rather anemic job growth (yes, even with the surprisingly strong March data). This article shows them that there is a third solution; both data are right and are not contradictory; it is the magic of trade deficit bridging the gap, and the article shows them explicitly how even a jobless society can thrive just on trade deficit. Of course, the picture portrayed in the article is like a house of cards and can be toppled by various causes. The problem is when it is toppled on the way to that utopia, the whole world probably will end up in a depression.

Article No. 8 about Golgo 13: I doubt very much that the author of the manga ever read my articles about the underlining currency manipulation issue. If Golgo 13 had read the articles No.1 and 2, he would have been totally confused about whom to blame, and the whole plot would have degenerated into a keystone cops type comedy.

GoldiloxJobs Dats and POG#11952304/03/04; 20:57:27



"The PR and Spin Doctors are working overtime this weekend in an effort to portray the employment figures as being the savior of the world as we know it.

You may recall the story I told you of the supervisor sending the government bean counter back each time he came up with a jobs number that was between zero and 20,000. Well, it appears he got the message. The method of revision was simple. When calling random families to ask how many members were employed, the respondants had to be Republicans. Okay, I am of course kidding with you but it is justto make a point.

The jobs number is a cartoon figure at zero or at one million in a month. Regardless, once uttered the faithful climb on the bandwagon and rejoice that the good times are back. By that I am refering to the stock salesmen on financial TV and "respected" street analysts who parrot the numbers as gospel making them so."


Sinclair's commentary on the Jobs number in his inimitable sarcastic style. Another effort at "jawboning:" a recovery, keeping the masses complacent enough to not question the validity of the other economic fairy tales. Gas pices triple? It's not inflation! It's the damn OPEC cartel gouging us again! Sic 'em boyz! Someone needs to tell TPTB that when they point a finger at someone, they have three fingers pointing back at themselves.

Great Albino BatI am rather late to today's commentary on NOPEC, but moved by the following:#11952404/03/04; 20:57:52

message in Boilermaker's post this morning ("Lawmakers in both the US House and Senate introduced legislation Thursday to
amend US antitrust laws to make OPEC illegal. The bills introduced in the
respective chambers were identical, calling for amending the "Sherman Act to
make oil-producing and exporting cartels illegal.")

I must say this sounds very odd, indeed. What has come over these gentlemen? Are they now making laws for the whole planet in the U.S. Capitol building? Of course, they can make laws to regulate the tides if they wish - the problem of a law has always been, how to enforce it. The gentlemen seems to be under the delusion that they make laws for the whole world. Where did I read about "No taxation without representation"?

How are they going to enforce a law against OPEC? Of course, the only way is by WAR.

So, is the US going to go to war against OPEC over the price of oil? The Iraq experiment didn't work out too the whole oil-producing Middle East (and possibly others, like Venezuela) are going to be invaded by US forces to enforce the Law of Washington, D.C.?

The ideas of the gentlemen in Washington are interesting. Or shall I say, LUNACY?

The GAB rode in a taxi today. The driver said business was punk. He nearly ran out of gas, searching for the cheapest gas available as he took me to my destination - important to save 5 cents on a gallon.

Things must be getting VERY tight at the J6P level.

We're going to hear a lot more nonsense like the NOPEC joke as things deteriorate- then get brutish!


GoldiloxMore NOPEC nonsense#11952504/03/04; 21:08:52

I wonder how long until some enterprising lawyer sues the FED under the NOPEC act for creating US $ hegemony and then puposely debasing the currency, causing all prices to launch into orbit. Not in our lifetime, or perhaps more to the point, not in his!

By the way, hour 2 of Puplava's Saturday FSO broadcast is quite relevant to the $/oil supply and demand issue. Good listening, as usual.

HuskyThe GAB asks: I must say this sounds very odd, indeed. What has come over these gentlemen? #11952604/03/04; 21:17:40

Yes, inded. The "terrorist" distraction is being jammed non-stop in the media right now. Never seen anything like it, ever. Something is up. I.e. a distraction is designed to draw attention away from somethng.

The combo of oil,gold & the dollar is likely where the trouble is. Making OPEC illegal allows all kinds of sanctions against the Saudis - notably a 'freezing' of their dollar accounts. Evidently this would help buy the dollar another oxygen bottle or two.

Tsunami dead ahead.

GoldiloxOIl-Euro question revisited#11952704/03/04; 21:33:56

I'm extrapolating, but could this NOPEC reactionism be a message to OPEC about "euro for oil" noise in the press?

It certainly seems possible, although it might just trigger a quicker transition to the euro as the preferred currency for oil as a backlash.

On the other hand, as euro and US$ continue their FOREX tag-team battle royale, the under the table gold guarantees for oil suggested by ANOTHER may take on new importance. Perhaps this is why China and Japan "quietly accumulate" shiney! The golden rule: them what has the gold, makes the rules.

In Puplava's broadcast, he mentioned that the US now imports more than 50% of its oil. During the Rayguns/GHWB regime and Oil Crisis I, we were importing about 20%.

I was in Florida last week, and rumors were circulating that the oil cartel is already sowing the seeds to prepare the Jebster for dynastic succession. Imagine that! Jeb vs. Hillary in 2008. Excuse me, I feel a MAALOX moment coming on.

GoldiloxA Tale of Twelve Shills#11952804/03/04; 22:50:24


The bond market has been turned into a casino. The gamblers are bond speculators, including all the major banks. The manager of the casino has hired twelve "shills" who play and win big at the gaming tables in order to perk up gambling spirit and to keep it high. At the end of the day the shills must return their winnings to the owner of the casino. These shills are none other than the twelve Federal Reserve banks.

The value of Treasury bonds is maintained through fraud. Today nobody in his right mind would hold his savings in bonds, as was the case before 1913 when the rate of interest and bond prices were stable and, hence, bond speculation was non-existent. Thus the logical basis of the value of bonds has been shattered. In the present environment the value of Treasury bonds is maintained by virtue of letting them serve as chips at the casino. People have to buy them if they want to play. As more and more chips are issued, the shills must become more and more active to prevent gambling spirit from sagging. The fraud of pretending that Treasury bonds have any real value at all, and that the destiny of the underlying debt is to be paid, is exposed. If it wasn't for the $100 trillion derivatives markets in bond futures and options, Treasury bonds would become worthless, and so would the dollar. These derivatives markets must spin ever faster in order to keep the value of Treasury bonds from collapsing. The shills can postpone the day of reckoning but cannot avoid it. Messrs. Greenspan and Bernanke could be reckless in using the printing press, as they have publicly said that they would do, but that should only make the dénouement, whenever it came, even more horrible.


An excerpt from this month's Contrarian Roundtable in the section by Antal Fekete. Welcome to the casino. The one where the shows are on TeeVee and there is no buffet.

TopazR Powell (4/2/04; 18:10:56MT - msg#: 119498)#11952904/03/04; 22:57:33

Hi Rich.
LTD Mar was 29th, some backing and filling would be normal I'd imagine. Apart from that I tend to agree with Sundeck in that Ag, despite a slow start, is doing the Commodity thing whilst Au is more of a distress Currency, imho.

Gold StandardSir Clink - your 119595#11953004/04/04; 00:31:18

Although the concept of being a "senior" is an anathema to someone having trouble coming to grips with "middle age", I do have recollections as a child of the 80% 50c piece in Australia.

A silver coin was something out of the ordinary when we went decimal in 1966 (I was 5 at the time), and they were in common circulation. I remember that they were always shiny, and as the largest and heaviest coin, were quite noticable.

In 1969, a new 12 sided 50c piece (cupro nickel) was issued, and re-issued every year thereafter. The existing silver coins continued to circulate until (ahem) about mid-1979. To my recollection as a 20 year old in 1981, I had never since received in circulated coinage a silver round 50c piece, as they were ALL melted.

However, I believe that the silver coins went out of circulation at an increasing rate from 1976 through 1980, becoming more of a rarity. I have nothing to back this up apart from my recollection, although my recollection may be a little hazy, since at that time I was finishing high school, commencing a Bachelor of Beers, culminating with a Masters in Sex, Drugs and Rock & Roll!

Hope this helps - the bad money drove out the good money for a number of years prior to the January '80 blow-off.

Cheers! GS

GoldiloxThe Coming Battle, M.L. Walpert#11953104/04/04; 00:33:50


"By act of Congress, June 28, 1834, a change was made in the coinage laws of April 2, 1834 atter act, the legal ratio of silver to gold was fixed at fifteen to one, that is, fifteen pounds of pure silver were the legal equivalent of one pound of pure gold, and this ratio was maintained until the passage of the act of June 28, 1834.

France and the other Latin States maintained a legal ratio of fifteen and one half to one. Consequently the United States over-valued silver when compared with gold. The bullion dealers, over on the alert for a profit, sent the gold abroad and sold it at a premium. To remedy this, the act of June 28, 1834, reduced the quantity of gold in the gold eagle from 2471/2 grains of pure gold to 232 grains, or a reduction in the ten dollar gold piece from 270 grains of standard gold to 258 grains. A corresponding reduction was made in the half-eagle and quarter-eagle. A fraction over six per cent of gold bullion was therefore deducted from the gold coins. This made the legal ratio of silver to gold stand at sixteen to one. By this act, silver was undervalued and gold made its appearance in circulation, and silver disappeared from the channels of trade.

The object of the passage of this law was to supersede the United States Bank bills by the substitution of gold coin as a circulating medium. The people remembered the great efforts of the bank to monopolize the entire volume of money in the country, and gladly received the two and one half, five and ten dollar gold pieces in preference to bank notes.

This substitution of gold coin for bank notes greatly diminished the profits of the bank, and it immediately declared war upon that coin. Its subsidized press, its minions and dependents denounced this species of money in terms of ridicule. The subservient tools of the bank, when offered gold coin in the ordinary transactions of business, would shudder and recoil at its appearance, and demand United States bank notes as the superior money.

In the meantime, however, in 1832, a presidential election was held. Henry Clay was put forward as the candidate of the Whigs and of the bank power. Andrew Jackson was the candidate of the Democratic party, and represented the principles of Jefferson. Jackson received two hundred nineteen electoral votes to forty-nine for Clay. The prophecies of those Democrats that Jackson had ruined the party by his contest with the bank were refuted by a decisive vote of the people."


An historial account of the gold/silver ratio from Andy Jackson's era. Excerpted from web-accessible "The Coming Battle", M.W. Walpert, 1899, a treatise on the controversy around central banking after the completion of America's first century.

Great reading, referenced by Art Soukup in his contribution to "The Contrarian Round Table". Similar vintage to L. Frank Baum's "Wonderful Wizard of Oz."

Federal_ReservesInteresting week to come.#11953204/04/04; 09:35:55

I think it's possible the US asset markets (SM, bonds) will crash this month. Attached you will find a comparison chart of 1987 top and the 2004 top. Its quite shocking. Some say the times are very similar. In 1987 we were plagued with deficits and a falling dollar combined with rising rates. Suddenly liquidity flows reversed and our SM market tanked. In my mind, the bonds should collapse first, followed by the stock markets.

This week there is a huge treasury issuance of 25 billion in debt. Last week the bond market collapsed on the labor news and rates spiked. Some say Japan will be a no show during this auction. If so, interest rates could spike again in the coming week, and that action could insert the pin right into the heart of the US credit bubble. Our economy is far too weak to absorb a huge increase in rates. It is my contention that the economic indicators are not as strong as believed, and this increase in rates will scare stock market investors.

Arguing against my position for a downsurge in the asset markets, is the usual strong liquidity inflows associated with the April 15th IRA investment cycle which come to market at this time. Also earnings season is upon us with good news to report and investors will want to stay in the market rather than retreat. As such my predicted liquidity crunch could be delayed until the May time frame, yet much depends on the JAPAN/CHINA connection. At this time, the US investment market, is fast becoming a 2nd place position to growth in ASIA, money could drain quickly out of our to markets into ASIA. The tax and monetary policy in the United States failed to improve investment conditions much in the mainland, but set off a boom in ASIA, and the money may stay local in ASIA, even reverse and head in the other direction.

Mr. Greenspan will be going to congress on April 21st, to deliver another major message to Congress on the economy. The next Fed meeting is May 4th. We all know of the explosive situation with respect to the war on terror.

This is the most dangerous market in US history.

US to sell $25 bln in 5-yr, reopened 10-yr notes
Thursday April 1, 11:00 am ET

WASHINGTON, April 1 (Reuters) - The U.S. Treasury Department said on Thursday it will sell $16.00 billion of five-year notes on Tuesday, April 6, and $9.00 billion of 9-3/4 year, 2 percent inflation-indexed notes on Wednesday, April 7.

The sales will raise new cash.

Chris PowellAn anti-trust attack on OPEC?#11953304/04/04; 10:39:05

Latest GATA dispach....

The oil cartel is just a response to the dollar
cartel, and an anti-trust attack on OPEC might
scare foreign investment out of the United States
and the dollar.

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.

GoldendomeGold and Silver as circulating money#11953404/04/04; 12:15:03

Goldilox: Thanks for the posting of web-link to, the Coming Battle by Walpert. I post below a link to a book by Laughlin, The History of Bi-matalism in the United States. (4th ed. 1898). First ed.1885. --This book is an excruciatingly detailed history of U.S. and World bimetalism (and some on early paper currency and banking systems), but is digestible in small portions at a time.

In it Laughlin argues that bi-metalism had never been effective do to the inaccurate Gold/Silver ratios that had always seemed in effect. And, this was something that could have been corrected rather than abandoning silver entirely.

Silver was disappearing from circulation with the large inflationary discoveries of Gold (Gold production increased from about $38,000,000/yr. to $150,000,000 between 1840 and 1850.) From Laughlin: "It would probably be safe to assert that... one half of the citizens of our country, born since 1840, had never seen a United States silver dollar... Of silver dollar pieces, not a single one was coined from 1806 to 1836, and thereafter only in very small quantities."

The Act of 1853 went a long way to removing (unofficially)the system of bimetalism through the disuse of Silver. Some provisions:

1. The Act of 1853 lowered the Silver content of coins making it unprofitable to exchange them for Gold in the bullion arbitrage markets. This could only be accomplished effectively by-- (2) Eliminating the free coinage of Silver at the mints; this was done. From this point onward, the Sec. of Treasury would accept only the amount of Silver deemed necessary for the coinage of small denomination coins.

3. Ignored minting Silver Dollars, assisting to relegate silver to small coins, 50cents and under.

4. Legally, any debt over $5.00 could be demanded for repayment in Gold.

GoldendomeYes, Here is that weblink to the Laughlin book.#11953504/04/04; 12:18:34

Sorry Goldi: Got so involved with trying to lookup some details, that I fogot the posted book link!
Gandalf the WhiteSir Zhisheng -- Look at the INTERIM data on Gold - Euro chart for Friday !#11953604/04/04; 13:36:33$GOLD:$XEU,uu[e,a]ddlaynay[de][pf][i][J10940415,Y]&listNum=1

Looks as IF the 3.50 "BARRIER" is getting ready to be BROKEN !

DruidGoldilox (04/04/04; 00:33:50MT - msg#: 119531)#11953704/04/04; 14:30:51

Druid: Lox, if you're looking to walk on the "wild" side, the link you posted is but a small segment from Pouzzner's overall bleak, but yet, very interesting research and commentary. The executive summary is that these wizards have applied systems theory that would be and is more conducive to real scientific inquiry, to us humans (thus all the myths about efficient markets, etc...). Read up on Pouzzner, he isn't exactly a lightweight on these matters. This cat traverses different planes.

Caradoc, thanks for the link on Steve Quale.

USAGOLD / Centennial Precious Metals, Inc.The long and the short of it: Put a quarter-century of experience at your fingertips in 175 pages.#11953804/04/04; 14:32:02

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

CaradocPhoto to document Sinclair's assertions#11953904/04/04; 15:01:54

You may have noticed that since the assassination of the "Muslim cleric" Sinclair has focused on extremist Islam as the primary reason for gold's rise, citing not only the demand from new emphasis on Islam's gold dinar but -- more important -- the demand resulting from the insecurity of living in a world with broader and more frequent terrorist attacks. To many, Sinclair is probably beginning to sound shrill, and his use of terms like WWIII sounds inflammatory.

Well, to whatever extent you're exposed to mass media, the fact that the so-called "revered cleric" was the terrorist founder and guiding light of Hamas will have slipped down in your level of awareness. Further down (if at all) will be any awareness that in exchange for martyrdom the teachings of Hamas offer a paradise of perpetual virgins to frustrated young males who have as much testosterone flowing as you did at their age. Unless you're aware of these things, Sinclair may sound shrill.

Keep in mind that to our self-announced enemy, the world is divided into the "Realm of Peace" (Islam) and the "Realm of War." It plain American English, "What's ours is ours and what's yours is up for grabs." And the "World of War" includes all of Europe and Britain as well as the rest of the western world. The photo linked below is unpleasantly graphic but documents evidence of the type of arousal brought on by killing a westerner and poking at his charred corpse. With that sort of energy being directed toward attacking everything that is not Islam, I'd say that Sinclair is absolutely right. Check out his Saturday post at


Cavan ManCaradoc#11954004/04/04; 16:02:50

I thought they, "hated our freedom".????
ZhishengAll is not gold that glitters.#11954104/04/04; 16:21:03

Thanks Gandalf. With the euro reacting more strongly to the jobs report on Friday than gold, I suspected something of the sort.

It was almost as if,at the end of the day, the big bulls did not quite believe the the implications of that report. Buckler's Privateer, out today, was rater good: begins with "ITS GETTING CLOSER--THE FULL LOSS OF CONFIDENCE". And ends with: "With the statistics released on the US economy now fast reaching the status of 'reasons' given for the war in Iraq, the financial 'powers that be' are on the verge of losing control of their 'markets'.

Mountain Top(No Subject)#11954204/04/04; 16:36:13

There is a full page ad in today's (Sunday) Chattanooga paper offering to buy gold, silver, antique firearms and musical instruments, quality watches etc. Looks like some folks who have money aren't happy with their money and want to get into things instead. Have heard that this is occurring all over the country. These monied folks seem to be nervous about something. Wonder what it could be? Maybe they're reading this forum?
ArcticfoxMarket's forecast.#11954304/04/04; 17:14:18


The risk of holding bonds has especially increased now that the Labor Department adjusted, revised, re-adjusted, re-figured, and seasonally-adjusted (thank you Richard Russell for the right adjectives to describe this counting process, the March non-farm payroll numbers to a whopper of a 308,000 figure. Bonds tanked on this figure - an unintended consequence I'm sure. And they will continue to tank. Why? Well if the economy is truly on fire as most government statistics proclaim, if money supply is truly at banana republic breakneck pace, if the last bastion of concern about economic slowdown - jobs - is now a myth, then interest rates at 46 year lows simply are not justified.

The Labor Department has now painted the Federal Reserve into a corner. No more excuses to keep short-term rates at 1 percent. Reason gone. The Fed has two choices: first, either raise rates, or second, announce that the government's robust economic figures are phony and deflation is really knocking at the door, so they must keep rates low. Or, I suppose there is a third option. Announce to the world they don't give a hoot about monetary stability, don't give a hoot about deflation or inflation, that all they care about is getting the boss reelected so to damnation with everything, interest rates are staying low until Dubya cleans Kerry's clock in the autumn. My best guess? We can look forward to rising interest rates. Get ready, the party is over. The Master Planners can't be too happy with this number, or won't be once they put some thought behind it. It's too high. They would have been better off stopping the counting process at "re-adjusted" and announcing 140,000 or so new jobs.

Clink!@ Sir Gold Standard#11954404/04/04; 17:30:24

G'day, mate ! Or should that be 'junior' (as that is what you are (just) to me !).

That was interesting input. The coins in the UK were 'debased' significantly before that, so I have no personal recollections to go on (although I do have some recollection of a BSc era - Bachelor of Southern Comfort ! Can't even stand the smell of it now). My mother believes that the last silver coin was the 3d piece which had been replaced by an octagonal one before I took any interest in money - say 1963 - so the transition to near-worthlessness of coinage was engineered.


R PowellWaverider // Lease rates#11954504/04/04; 17:41:36

Are you watching? Is this another bogus Kitco report? Heaven knows, they've botched up the numbers more than a few times in the past.
Silver's out of the gate and up 7 cents. Good start!

WaveriderRich#11954604/04/04; 18:27:24

I watched the lease rates last week and observed exactly that which you stated - the rates the "morning after" seem to be recalculated and not follow from the previous days close. I did see the jump again for Friday - we'll see what tomorrow brings. I haven't yet found a more reliable site for rates - I'll search again this week. Cheers,

Mr GreshamCaradoc#11954704/04/04; 18:47:23

Yes, not long before we have a "Rules of Engagement" reversal-type "incident" in Iraq.

"Plot Outline: An attorney defends an officer on trial for ordering his troops to fire on civilians after they stormed a U.S. embassy in a third world country."

Not just a 3rd world country, but an Arab country...

Mr Gresham"Bankruptcy-ville Two Miles Ahead!"#11954804/04/04; 19:03:11

(OK, it da calypso beat, mon. What, nobody make da funny fo' you on April 1? Me, needer, mon. Me needer. Sad, mon.)

Way down, yay-hey, down de Tampa way
Dey do da Mogambo
Do da Mogambo

If yo' in St Petersburg
And you got to hear da word
Listen to Mogambo
Hear da Mogambo

Don' be droppin' off yo' gold
'Cause you gettin' kinda old
Me no keer de Bush o' Keery
De silbah gettin' hard to keery
Do da Mogambo
Oh Yeah
Do da Mogambo

Sorry, jus' de one paragraph, it got me goin', mon. An' de sonny day, too:

"St Petersburg, Florida - The Treasury admits that it has increased total federal debt by - in one month - $64 billion. When you multiply $64 billion in one month times twelve months, the mathematical theory is that you will calculate a whole year's worth of that debt action. With a flip of my hand I smoothly pull out a calculator, and my nimble fingers fly over the keyboard in a deft staccato, over and over and over again, because I cannot believe my eyes, as the number is a cool, yet tidy, $768 billion. This number is so huge (The audience yells out "How huge, Mogambo?"), that when you divide it by GDP of $10 trillion, it is a hefty 7.7% of GDP! The dangity-blang government is sucking up cash that equals 7.7% of GDP of the economy? Yow!"

Now, if dis link don' take you to da Mogambo, or if yo' evah at de Daily Reck'nin' site lookin' fo' him, you jus' click to de lef' on "Cast of Characters", an' den you click on de "Full Bio" next to Mogambo. OK, mon?

Mr GreshamJust as I suspected#11954904/04/04; 19:23:29

Gotta do some extra clickin' at DR. But it's worth it!!

"So why is this Greenspan guy, who not only knows better, but has actually proved that he knows better by writing one of the better defenses of gold and the utter refutation of fiat money, doing this? Why?

"Steve Heller thinks he is doing it on purpose. Greenspan so loves mankind that he is deliberately proving to the people of the planet that you MUST have gold as money, and proving the profound wisdom of the Founding Fathers, who were so careful to write into the Constitution - very Constitution itself! - that money shall only be silver and gold. And he is teaching this Grand Lesson to us via the brilliantly simple expedient of doing literally everything that a central bank can do, to every excess, when unencumbered by the strictures of gold, to ensure a boom. Including enlisting, using the global financial system, the cooperation of almost all foreign central banks on the globe, to do the same things! Gaaaahhhhh! Uh-oh! I feel one of my "spells" coming on.

"The purpose of this deliberate boom-bust cycle, with the emphasis on "bust," is to prove to the primitive savages, namely you and me, once and for all when the inevitable bust comes, so that there will be nooooOOOooo doubt in anyone's mind, that you cannot have a monetary system that uses a fiat currency, especially one in which you have fractional reserve banking, and DOUBLY especially when you allow such leverage inside the banking system on such an absolutely massive scale, and TRIPLY especially when the expansion is accompanied by bigger government and an economy receiving huge money transfers, which is the government literally handing out money."

DruidSilver Refuses To Break/Gold Shares Hold Their Ground#11955004/04/04; 19:34:27

The silver open interest FELL 1127 contracts to 119,201. This is further proof that some of the big shorts have woken up to what is going on and want OUT before they capsize into oblivion.

Talk about invaluable input. MIDAS has relayed information from one of GATA's top sources that a huge buyer of physical silver allowed its supplier until sometime in April to make good on a 20 million ounce order. It was supposed to have been delivered in March, but the supplier did not have the physical then. The transaction was to have taken place in Switzerland. So, here we are in April and the price of silver spikes as a result of enormous Swiss buying. I am not privy to any details on this buying. Yet, I will be very surprised if we don't see more of it in the days and weeks to come.

It is important to keep in mind that this is just ONE major silver buyer. There are other funds out there lurking for silver and then you have the Chinese, who are all over it also. Recently MIDAS mentioned it looked like silver was going into its acceleration phase. It sure looks like that phase is here, or close at hand!

The silver close, ANOTHER new weekly high one, was nothing less than sensational. Look for some fireworks next week. Silver could go $9 bid in a heartbeat.

Now you know why the gold shares traded so mysteriously poorly the past few days and WHY the bullion dealers were willing to sell all the bullion the funds wanted to buy as gold approached $430. Surely The Gold Cartel knew a big jobs number was coming and what it would do to the gold price. New Café members, welcome to knowing that the New York and Washington establishment is nothing more than white-collar MAFIA, ready and willing to fleece you for your money at every opportunity they can.

Druid: Stay on them Bill.

Take Delivery.

SundeckGresham's Law - A pseudo case from Australia#11955104/04/04; 19:36:48

Ref: Gold Standard #119530 - The Ozzie silver 50 cent piece.

GS you twigged my memory...yes I remember the removal of the 50 cent piece...the newspapers occasionally reported tons of the things leaving Australia to be melted down in ong Kong or some place...

But your story reminded me of a later case where Gresham's Law was demonstrated, but in pseudo form...

In the early to mid 1980s, Australia replaced the 1-dollar paper note with a 1-dollar coin about the same diameter as a USA quarter, but a bit thicker. The dollar coin was an alloy (I don't know the content) that, when new, had a shiny, yellow, "golden" appearance - quite attractive when freshly minted, but which quickly tarnished with handling.

The interesting thing is that when these coins were first released, they were hoarded in large quantities; presumeably because they looked enough like gold for people to regard them as something akin to gold and stash them away. A pseudo example of Gresham's Law in action... I doubt if this phenomena has continued, as the coins became ubiquitous, tarnished quickly and were followed into circulation by a smaller 2-dollar coin of similar appearance. I suspect people came to realise that they really have no value over and beyond their fiat denomination.

What is the psychology involved? To me it indicates that the aura surrounding gold is alive and well and as strong as ever, even though gold coins (in Australia) have not circulated within living memory (of most people - probably everyone, I am not sure). The spontaneous impulse "to hoard" something that only looked like gold left a powerful mark on my memory. I can't explain it, but it is there - stark and plain.



GoldCoasterHi Sundeck,#11955304/04/04; 21:03:02

This is my favorite link to Australian notes and coins.
The descriptions of the coins include their metal content and composition, the mintage etc.,as well as interesting historical bits and pieces.
Did you know that the Perth Mint at one stage issued $ 10 000 coins?

SundeckSir GoldCoaster - Australian Coinage#11955504/04/04; 23:00:09

Thank you for the site reference Sir GC...a 1Kg gold coin I did NOT know about...don't see too many of those in circulation...I guess they wear holes in peoples' pockets too quickly (and at current prices they are worth almost twice as much as their $10k Aust denomination).


SundeckSpeculation in silver#11955604/04/04; 23:50:01

Ref: R Powell #119508

Rich, You said:

"Anyway, only time will tell if there might be a real physical silver shortage about to be revealed. Can the price trend move from under $5.00 to over $8.00/ounce have been entirely speculative as Kaplan states? I don't know but I don't think so. The market (imho) reacts to downturns too strongly. This is not to say it won't go down! The speculative players will take profits at some point but, if there are real supply and demand forces supporting this market, then the big dip to shake off the weak longs will be a buying opportunity when/if it comes. How many will have the nerve to buy after silver falls over a buck or so?"

Sundeck: If you compare silver spot with a speculative stock (in biotech, say, or a junior explorer with promising ground), there is little doubt that speculative demand can move the price up many times, with no certainty of sales on the part of the stock involved. Often the price of such companies is tenacious; yeilding little to rumours , economic conditions and other factors. However, they may also go down in a flash if rumour takes hold, or if something definite spooks them.

There is little doubt that there is some speculative demand helping to push up the price of silver, but the point I wanted to make in my earlier post is that there is no fundamental difference between the behaviour of the POS recently and the prices of the well-known industrial metals copper, zinc and lead. There will undoubtedly be a speculative-demand component to their recent price-moves as well. To argue that the move in POS is purely speculative is ludicrous, in my mind...

How high might the market push silver versus the base metals? Well, that is crystal ball stuff. However, because silver supply is coming off new mine production (largely as a by-product of base metals) only - its historic stock-pile being depleted - my feeling is that demand (both industrial and speculative) for the base metals will be met sooner than will demand for silver. We don't know when or at what levels the prices of the base metals will peak as that depends on a miriad of factors. It is the same for silver. But my feeling is that it will take longer to satiate the market's demand for silver than it will for the other base metals.

Just my thoughts, not investment advice.



Mr GreshamThanks...#11955704/05/04; 00:37:46

again to all who post, comment and link here. You have utterly spoiled me, so that I read you, or your link, get inspired, go out to check other ideas, occasionally bring back something for the gang.

What I do not do, usually, is go right to the "Post" button to say "Thanks" to you, even when I've just read something quite brilliant. I am greedy, yes, and I want to keep on soaking up the good stuff. And more of it there is. Just scroll on. It takes quite a lot these days to knock me off that rhythm and make me go to an immediate response to you.

Utterly spoiled, I am. The quality that washes over me daily was unimaginable just some years ago. If the quality of available thought and learning for millions has improved this much -- by the VOLUNTARY action of interested individuals like yourselves -- then might we hope for a rise in the expression of economic intelligence in our overall population? Someday? Maybe. Not for awhile, I expect.

For all the times you gave your best here, and I could not respond in kind and immediately, thank you.

Knallgoldcopied from GE#11955804/05/04; 02:01:15

Somehow,I expected that.Reuters,Bloomberg, what else?

Geologists Claim Massive Gold Find in Altai

Combined Reports Russian geologists have discovered massive gold deposits in the southern region of Altai with estimated reserves of up to 1,000 tons of the precious metal, a regional official was quoted as saying on Friday.

Anatoly Zaitsev, Altai's top geologist, was quoted by Itar-Tass as saying that total discovered reserves of gold, silver, copper, zinc and lead in northern Altai are estimated at 60 million tons.

Undiscovered reserves could be five times higher, he said.

By comparison, Sukhoi Log, the world's second-largest undeveloped gold deposit also located in Russia, has estimated reserves of 1,029 tons of the metal.

Altai's biggest deposits include Rubtsovskoye, Zarechenskoye and Korbalikhinskoye, where exploration has already started.

The earthquake-prone Altai region sprawls along Russia's border with Mongolia, Kazakhstan and China and is one of the country's biggest grain-producing areas.

Russia, home to one of the great unexplored gold regions, is now at the center of the investment radar for the world's big mining companies and domestic prospectors on the back of high gold prices.

The country is opening up to them at a time when growth at the top end of the mining industry can be difficult, dangerous or very expensive to achieve.

(Reuters, Bloomberg)

SpartacusJapan govt source says strong yen has benefits#11955904/05/04; 02:31:11

TOKYO, April 5 (Reuters) - There is a growing view among Japanese officials that the merits of a stronger yen now outweigh the disadvantages, a government source said on Monday, adding to speculation that Japan may scale back its campaign of massive yen-selling intervention in the currency markets.

The source, who has regular contact with the Ministry of Finance, which runs Japan's intervention policy, said it was his impression that many in the government recognised that a stronger yen helped companies deal with high oil and raw material prices. -

TownCrierThe all-important undercurrent -- the physical market#11956004/05/04; 03:41:57

HEADLINE: Strong rupee, weddings to lift India gold imports

BOMBAY, April 5 (Reuters) - India is likely to step up gold imports in the coming weeks as a strengthening local currency and a drop in world prices are seen driving demand in the peak buying season, traders said on Monday.

Demand for gold in the world's largest importing and consuming nation is also likely to rise with the start of the summer crop harvests, expected to boost farmers' disposable income and their demand for gold.

April and May are the busiest months for weddings in the Hindu-majority country with a population of more than a billion. Gold jewellery forms an important part of Hindu marriages, as parents gift their daughters the metal for financial security.

"The marriage season buying will definitely be strong as Indian prices have fallen due to a rise in the value of the rupee against the dollar," said Nayan Pansare, a senior official of jewellery firm Inter Gold (India) Pvt Ltd.

"Effective gold prices for Indians have fallen by about $14 an ounce because of the appreciation in the rupee's value," said Ranjeeth Rathod, a Madras-based bullion dealer ..........The Indian rupee surged by nearly 3.5 percent against the dollar in the past two weeks...

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

As a falling dollar acts to inspire gradually ever more American households to diversify into gold, they will be competing for this limited metallic resource with a world of other gold buyers enjoying ever greater purchasing power -- unless the price-setting gold derivatives markets either become themselves more highly priced (valued) on the premise that they are as good as gold, or else they become more properly discounted (against a rising physical market) as inferior substitutes for the yellow metal.

All historical experience points to that latter condition. Therefore, hold the metal, not the promise of future reckoning.


TownCrierOne of the many variant faces of INFLATION#11956104/05/04; 04:24:53

HEADLINE-- Saudi: Don't Blame OPEC for US Gas Prices

WASHINGTON (Reuters) - Saudi Arabia on Sunday blamed record high U.S. gasoline prices on America's tough environmental laws and lack of refining capacity, saying OPEC's oil production policies were not at fault.

Adel Al-Jubeir, foreign affairs adviser to Saudi Crown Prince Abdullah, defended the OPEC output cut [decision made last week of one million bpd], saying global crude oil production and demand "are in balance."

...Al-Jubeir said the lack of refining capacity in the United States was a key reason gasoline prices were rising.

"There has not been a refinery built in America in the last 20 years. So if you produce more crude oil but you can't refine it, it's not going to translate into gasoline," he said.

-----(from url)-----

The article's concluding two paragraphs, which I reproduce below, should reinforce in your mind the concept that OPEC's management of oil is not unlike a national central bank (or consortium thereof) in its management of a currency on the world stage.

(Concluding excerpt...) Kuwait said on Sunday it would guard against any "unjustified rise" in world oil prices. In a statement, the Kuwaiti government said it wanted crude prices that balanced "the joint interests" of oil producing and oil consuming nations, and boosted world economic growth.

Saudi Arabia tried to smooth over relations with the United States after the OPEC vote. The Saudi ambassador made a surprise visit to the White House last Thursday to deliver a message to President Bush from Crown Prince Abdullah that pledged the kingdom would not let oil shortages harm the global economy. (End)

Other than this example with oil, can you think of any other producing sector of enterprise that bears such a sizeable burden of impact upon worldly welfare, thus forcing it to consider consequences beyond a more typical industry's own singleminded pursuit of highest possible short-term returns?

Is it so hard to contemplate a degree of cooperation among such few giants to achieve mutually compatible goals?


Topaz@Goldstandard re: round $0.50 Ag coins.#1195624/5/04; 05:22:00

About 5 Yr's ago these were readily available at a 20% disc to Spot ...I got my fill and would imagine there's still some about. As I recall they were about A$2.30 ea and thought it a good enough deal at the time... fwiw!
TownCrierIn this post, find your own relevance (if any) to my previous post#1195634/5/04; 05:34:13

Press Question to ECB President Jean-Claude Trichet:
Mr. President, how important or permanent a risk to recovery and gradual recovery is the rising oil price and the decision to cut production?

I would say that, as we do every month, we have of course looked at all the elements that are pertinent to our overall analysis. We have, and we had, to take account of the price of oil and it is perfectly clear that any increase in the price of oil creates a problem as regards price stability and inflation. And it also has an impact on the global recovery. So I would not elaborate more on that. But that is pretty clear, pretty clear for us, and pretty clear for all observers.

what do you think the ECB can do right now to boost consumer confidence and growth more generally in Europe?

...We have to assess the balance of risks to price stability, which is the magnetic north of our compass. This analysis is carried out according to a concept of monetary policy which is crystal clear and has been clarified and explained and is, I trust, very well understood by European and global observers. By ensuring and being credible that we are correctly assessing this balance of risks, we contribute massively to helping Europe, because we give credit to the very low market rates that we are currently delivering. The rates would not be as low as they are if risk premia were incorporated to take account of inflationary expectations over and above our definition of price stability. So it is a way of helping Europe considerably. Another way of helping Europe is to ensure that we are credible in preserving purchasing power of the consumers. There are a number of other channels described in the textbooks that explain why price stability is a necessary condition for growth and job creation. I insist on these two channels because they are very much the focus of our attention today.

To what extent has the appreciation of the euro against the dollar affected your decision this time?

Again, I already said that we have no particular equation that would trigger our decisions. We have no particular system of equations. We have no algorithm. So, the exchange rates are one of the many inputs that we have in our overall analysis. For obvious reasons, because it has an impact on inflation to come, because it has an impact on a variety of economic indicators that are of extreme importance. So, we incorporate that as well as all the other elements. But there is no mechanistic reaction. We do not mechanistically react to an exchange rate evolution, as we do not mechanistically react to a fiscal position evolution or to any other evolution, such as oil prices and so forth. We incorporate that into this comprehensive analysis that we make and it is on the basis of the final sentiment we have after taking into account absolutely everything that we take our decision. We took into account, of course, the developments observed in the exchange rate as part of this very comprehensive analysis.

......the best contribution we can make to the recovery in Europe is to be the anchor of price stability, because being the anchor of price stability permits very low market interest rates, and permits an improvement in the confidence of consumers and reassures them that their purchasing power will be protected. These are the two channels through which we can help. If the balance of risks to price stability were to change, then we would change our own monetary policy stance. I cannot say anything else. .... It is really exactly how we see things. We have a "magnetic north" in our compass. We are not blind. We are not deaf. We incorporate everything and we would change our monetary policy stance upwards or downwards on the basis of this balance of risks analysis.

......we do not fine-tune the economy. If we were to fine-tune the economy, then it would be legitimate for global observers to think that we were more or less abandoning our magnetic north. And if we were abandoning our magnetic north, then risk premia would appear and we would have higher, not lower, interest rates. So, it is something which is extremely important to understand.

------(full Q & A available from url)----

This time there was much heavier emphasis than usual on the "magnetic north" of price stability. Can you think of any single product in the economy whose price has as great an ability to feed through to all other prices as does oil? Look again at Trichet's leading remarks on oil:

"it is perfectly clear that any increase in the price of oil creates a problem as regards price stability and inflation. And it also has an impact on the global recovery. So I would not elaborate more on that. But that is pretty clear, pretty clear for us, and pretty clear for all observers."

No elaboration; where would be the sense if someone spilled the beans and gave the dollar game away? Single file to the exits, please. Single file is all the physical gold market can handle.


TownCrierThis is the well-worn(out) argument, voiced here in Vietnamese, through which a currency TRIES to compete with gold#1195644/5/04; 06:04:27

HEADLINE: Gold, greenback or dong?

(Monday, April 5, 2004) -- During the past ten days, gold price on the domestic market have fluctuated around VND8.04 - 8.10 million/tael. Meanwhile, inflation rate has been set high and the exchange rate of Vietnamese dong and the US dollar stable.

...the consumer price index hit 4.9% during the first quarter, an 8-year high. This has urged many people to choose the best tool for speculation and reserve. has been a long time tool for speculation. The precious metal has been used in real estate transactions. However, gold has experienced complicated fluctuations as its price has been subject to the world politic situations and the US dollar. Thus, gold is the riskiest tool for speculation.

Meanwhile, the exchange rate of Vietnamese dong and the green back has been stable from early 1992 up to now. ...... However, deposits in US dollars enjoy lower interest than deposits in dong. .... During the last four years, depositing in dong is more advantageous than in US dollar.

Currently, many households have invested into bonds or deposit certificates in home currency. These papers can be mortgaged if needed. In general, depositing in dong is the best policy given stable exchange rate of Vietnamese dong - the US dollar and gold unexpected fluctuations.

------(more text available at url)----

Let's not be so quick to forget the lessons of the 1997 Asian contagion currency crisis -- that savings in gold is the best personal policy given the undeniable reality that paper comes occassionally undone.


TownCrierRussian interests tap into South African gold (producer)#1195654/5/04; 06:26:59

JOHANNESBURG, April 5 (Reuters) - Mining giant Anglo American plc is due to receive this week the rand equivalent of the proceeds of its $1.16 billion sale of a stake in Gold Fields, a spokeswoman said on Monday.

The rand strengthened sharply last week on expectations of inflows from last week's sale of the stake to Russia's Norilsk Nickel, but markets were jittery on Monday after a local newspaper said the deal might not be finalised.

An article on Mineweb said Norilsk largely funded its purchase of a 20 percent stake in Gold Fields through a $800 million loan from Citibank using 50,000 tonnes of nickel as collateral.

In Moscow, officials of the central bank, Citibank and Norilsk -- the world's biggest nickel producer -- were not immediately available for comment.

The purchase, announced last Monday, is one of the largest foreign investments ever by a Russian firm. Gold Fields is the world's fourth biggest gold producer.

-----(full story at url)----

More recently confirmed, a done deal, however Citibank has refuted the claim that nickel was used to collateralize the loan. The terms, instead, for the $800 million was a six-month unsecured facility.

Likewise, (but probably without the benefit of an unsecured loan) you can pursue a share of controlling interest in a company that mines gold. Or, you can skip the delicacies and buy the post-mined metal outright and thereby enjoy 100 percent controlling interest in its location and its future utilization in your sole behalf.


BoilermakerHistory of The Oil Wars#1195664/5/04; 06:31:02

I'd like to weigh in on the subject of oil., OPEC and NOPEC with a little history. The history of crude oil is fascinating (at least to this goldbug). The early days of oil were just as wild an wooly as the gold rush days. As always, I welcome your comments to the follwing.

Crude oil is an unusual commodity. It's had a total history of only about 150 years and only since about 1915 has it been an important commodity. Oil comes from the ground in a relatively pure form. The refinement process is only a small part of the cost of the finished product unlike the cost of metals such as gold, copper or iron. Oil is nearly all consumed and gone forever, there is very little recycled. Naturally occurring oil is depleting at an alarming rate, perhaps faster than any other non-renewable commodity. Oil in the ground is wealth for those who have it. Perhaps that is why it is linked to Gold in the way that Another explained.

If you accept Another's proposition that oil and gold are linked then it is vital to understand the history of oil just as it is to understand the history of gold vs. fiat currencies and our banking system. I sense that some forum members are far more knowledgeable about gold, money and banking than they are about oil. Black Blade has been an excellent reporter of current oil and gas information and analysis. However, I believe we need a historical context for oil to better understand what the future may hold. For those of you who want to learn the history of oil I urge you to go to the site above and read chapters "The Oil Wars" and "Power Years".

In the 1920's and early 30's there was total chaos in the Texas oil fields. Oil was literally flowing from thousands of wells into open pit reservoirs. Prices went from a dollar per bbl to a nickel whenever a new field was found. Reservoirs were being ruined by overproduction with wells drilled side by side. Texas was producing more than half of US oil and a major chunk of world oil so it was the "elephant" producer of those days as OPEC is today. The Texas Railroad Commission took on the job of regulating the chaotic and wasteful oil business in Texas during this period but it didn't get things under control until the late 30's. Their role was extremely controversial just as OPEC's is today. The integrated oil producers were generally in favor of regulation and the independents opposed. But finally both sides realized the need for outside discipline. The TRC would force the cutback of production when oversupply threatened to cause prices to crash and would release spare production in times of extra demand such as occurred in WWII. However, by the late fifties foreign oil was flooding the market prices were down and Texas fields were producing only seven days per month.

Here is snip from the Power Years chapter;

The End of an Era
In 1960, the Organization of Petroleum Exporting Countries (OPEC) was formed by the nations of Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela. Eventually, six other nations would join the group, including Qatar, Indonesia, Libya, the United Arab Emirates, Algeria, and Nigeria. These countries wanted to regulate their production in order to keep profits high. Ironically, they modeled many of their strategies on those used by the Texas Railroad Commission. Slowly but surely, OPEC gained discipline as an organization and prepared itself for the day when it could control the international oil market.
The next Mideast crisis, the 1967 Arab-Israeli War, revealed the decline of Texas oil. As in previous times of crisis, Texas ramped up to full production in order to fill the shortage in global crude. For the first time, Texas proved unequal to the challenge. Many mature wells proved incapable of meeting their allowables. It was evident that Texas fields were in decline. William J. Murray, formerly of the Railroad Commission and then president of the Texas Independent Producers and Royalty Owners Association, warned that "there is essentially no net spare efficient producing capacity in this entire nation."
Murray was proved right in 1971, when a test was conducted to demonstrate Texas's capacity to produce two million extra barrels a day. The test failed, revealing that the reserve capacity was only one-tenth that amount. "
end snip

Texas fields were in declining production capability and foreign oil was the swing source. At this point the TRC effectively lost control of the domestic oil market. OPEC has taken over the role of the Texas Railroad Commission. It tries to regulate its production to meet reasonable international price objectives and responds to increasing demand and supply disruptions. Without OPEC's production discipline the world's oil reserves would be substantially smaller and its price higher. We must accept that oil is becoming scarcer and that a gradual price increase is needed to stimulate additional exploration along with alternative and renewable energy research and development. I believe that OPEC is where the TRC was in the late 60's with very little spare capacity and close to their Hubbert's Peak. The US congress has no power over oil and whatever they do will be counterproductive.

So called "big oil" plays the game in their new role primarily as refiners and marketers. They have become toothless tigers when it comes to crude oil production and pricing. I'm sure they lobby for government programs and benefits but they do not wield any real power in Washington. New refineries cannot be sited in the US due to environmental pressures. The US now imports about 2 million bbls/day of refined products as well as 9 million bbls/day of crude oil. The real political power is held by the Banking and Finance cartel along with the environmental groups.

TownCrierThanks for the eloquent articulation of sentiment toward our fellow posters, Mr. Gresham#1195674/5/04; 06:46:36

A sentiment which, I'm sure, is shared especially by many of the largely unseen waves of silent visitors that pass through daily to gather the latest in gold news and views.


KnallgoldWelteke#1195684/5/04; 07:06:40

Just heard on the radio:Welteke is under pressure because of 4 nights in a hotel ,paid by Dresdner and BuBa(?).he now has agreed to pay 2 nights with his own money-I haven't the exact details.Probably a side show,but then,there isn't anything a coincidence these days.
USAGOLD / Centennial Precious Metals, Inc.Your friend in the business, helping you enter the gold market with grace and confidence.#1195694/5/04; 07:09:24">Change paper into gold!
TownCrierCan the U.S. bond market weather an economic recovery?#1195704/5/04; 07:40:23

HEADLINE: US Treasuries slide again, supply an extra burden

US Treasuries slide again, supply an extra burden
Monday April 5, 9:08 am ET

NEW YORK, April 5 (Reuters) - Treasuries prices slipped on Monday, taking yields to two-month highs, as the market struggled to find traction after last week's payrolls-inspired plunge

The day's data on U.S. services sector were also expected to be upbeat, though almost redundant now that the jobs numbers have shown the first real sign of recovery.

"The job figures were a world-changing event," said one trader at a U.S. primary dealer. "Couple of weeks ago we were looking at (10-year) yields heading toward 3.50 percent -- now we're approaching 4.25 percent and 4.50 is on the horizon." [Note: meaning, falling market prices (i.e., capital losses on principal) on bonds as the market yields (interest rates) rise.]

The market also faces $25 billion in new supply this week as Treasury auctions five-year notes and 10-year inflation-index paper to raise new cash. Traders already suspect that foreign central bank demand will diminish now that the Bank of Japan seems to have curtailed its dollar-buying intervention.
[Note: (Huh?) Not that Japanese authorities would have likely been a significant buyer of those long-end barkers, anyway.]

-----(from url)----

As we go forward, how much monetization will the Fed be willing to do on the long end, and how long can the smoke of inflation be kept out of the clear blue skies?


Dollar Bill.,.#1195714/5/04; 07:45:22

Forecaster, great to see your here, please stick around for a few days. I have mentioned here that you are my favorite yen/dollar analyst. Quite a productive mind you have going there.
Mr. Gresham, right you are, if we really responded as we felt, this forum would be flooded with Kudo's and frankly they would be warrented.

MKNews & Views:#1195724/5/04; 07:57:49



Four Panic Scenarios That Could Trigger an Historic Run on the Dollar



Bernstein: Use gold to hedge against possible crisis

Russell: As dollar exodus gains momentum, gold wins

Top Stories Monday

Iraq: The Nightmare Scenario, James S. Henry
Bundesbank chief Ernst Welteke faces call to quit, Reuters
(Perks from Dresdner Bank, 'embroiled in row with the goverment over gold sales.')
ECB in crisis as rate cut blocked by revolt, The Telegraph

And. . .

The unstoppable, surging yen/The Economist . . . . . Featured Analysis

You are invited to visit now, often. Updated regularly. Stay abreast the gold market via News & Views, this forum and the Daily Gold Market Report.

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USAGOLD Daily Market ReportPage Update!#1195734/5/04; 07:59:11">
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Clink!@ Sundeck#1195744/5/04; 08:16:03

That reminds me of the virtually identical chunky 1 pound coin introduced at around the same time. It was nicknamed the Maggie (after Margaret Thatcher) because it was thick, brassy and thought it was a sovereign !

Socrates964Knallgold#1195754/5/04; 08:19:48

Note the Telegraph article:

Their concerns reflect complaints from Bundesbank staff that the ECB is being politicised by Mr Trichet, who is considered too close to the French government. Ernst Welteke, the Bundesbank president, was instructed by his council to resist moves towards a "laxist" monetary policy, even though he personally favours immediate rate cuts to stave off a double-dip recession in Germany.

Presumably going after Welteke for a few nights' hotel expenses is part of a vendetta.

As I may already have mentioned, I think that one of the most potent weapons that the 'sound money' rebels in the ECB have is the gold price. If it breaks out of E352 to the upside, then this is a strong inflationary signal (and btw, a good reason why the Euro can't go down very much from here - despite the fact that it seems to be breaking support this morning). Interesting!

Socrates964Interesting juncture on gold P&F chart#1195764/5/04; 08:56:26

We've now done a 3-box reversal to the downside on gold. Assuming the low is above 412, a subsequent reversal would set up a target of 456. If, on the other hand, we trade below 412, then we expand the old trading range by another 2 columns and our target will shift to 480.

Shorts push the price down at their peril.

Federal_ReservesManipulators had hoped to gin up a jobs number#1195774/5/04; 10:18:39

that would not spike rates, they boosted jobs, but left a lot of weakness in wages and hours worked. So far, rates are spiking pretty good. Misson unaccomplished? As they move closer to the elections they'll probably start showing some wage gains.
GonlyoldGold or Any Other Barter Item#1195784/5/04; 11:04:55

I believe one of the reasons that TPTB will not let gold run free is that physical gold is not digitized (obviously)and TPTB cannot control it as they can digitized forms of fiat currency. I also believe that this policy of theirs' applies to any other item which cannot be digitized but which can be bartered. If you can control it, then you can't have it. The name of the game is control.
GoldiloxBig Oil in Washington#1195794/5/04; 11:05:06


We often disagree on this subject, so my response will probably not be a surprise.

You said:

"So called "big oil" plays the game in their new role primarily as refiners and marketers. They have become toothless tigers when it comes to crude oil production and pricing. I'm sure they lobby for government programs and benefits but they do not wield any real power in Washington."

My response:

If Bush, Cheney, and Rice, et al, do not wield power in Washington, then just who does? Congress does not even read much of the legislation they propose any more, they just rubber stamp it. Any suggestion that they do not represent "Big Oil" certainly surprises me.

They might not have the quantity of "reserves" they once had, but they have stronger control of the US military and media than anyone since FDR. In fact, there was probably more powerful resistance to joining WWII than invading Iraq, if one counts Joe Kennedy, Henry Ford, and John D. Rockefeller.

Your reference from the State of Texas historical site is certainly not a completely "unbiased" source. It behooves any reader to remember that they are government "statistics", something we all are questioning at this historical juncture.

mikalCurrency volatility = signpost of change#1195804/5/04; 11:10:41

Looking at predictions of yen vs dollar from Idectic Research, gold forums, media, etc., the ratio should be more volatile and in any direction.
But it's evident that rapidly accelerating rate of competitive currency devaluation will have the final say. Known but little discussed is how fragile banking sectors are in Asia, and many old industrial giants in Korea, Japan and elsewhere are receiving state life support.
According to recent, IHT(International Herald Tribune), FT Forbes, Business Week, Asia Times and other media, China and Japan have similar systemic banking and debt problems with resulting overcapacity and unemployment with potential social unrest and unserviceable debt and social service obligations.

Whether or not a transition from malinvestment to a regional Asian currency, modeled similar to the euro, would be the only expediant seems self-evident. To embrace Japan, China, Taiwan, Indonesia, Korea(N. & S. ?), Singapore, Burma, Hong Kong, Thailand, Vietnam, and Malaysia.
Unlike the west, Chinese and Japanese gold reserves are not reported in totality, but suspected to be quite large, with no gold loan, lease or swap liabilities of size.
As yen, dollar, euro and other currencies demonstrate instability, current monetary units must once again leave historic signposts of malinvestment, mismanagement and impending, deliberate restructuring by ruling financial interests.
Gold has also been leaving signposts of careful, deliberate accumulation at suppressed prices. Though just for this brief duration, anticipating this event and requisite conditions of retrenchment and thrift to follow many years after.

GoldiloxGold reserves#1195814/5/04; 11:17:10

@ mikal:

you said:

"Unlike the west, Chinese and Japanese gold reserves are not reported in totality, but suspected to be quite large, with no gold loan, lease or swap liabilities of size."

If the Wests' gold numbers were truly transparent, would GATA even exist? Perhaps I am missing your point, but transparency of gold seems to be a world-wide issue.

mikal@Goldilox#1195824/5/04; 11:29:13

Yes, you're right. I noticed that I wasn't clear.
But at least the West provides "ballpark" figures, that are usually very credible, with a few exceptions, notably Germany with it's overeseas holdings in NY, Gr. Brit. and USA. But still, even there bankers express more confidence in the official stated reserves than in Asia.
I should add that India, Sri Lanka, Nepal, Bangladesh and others could also be candidates for inclusion in a regional currency.

CometoseInterst Rates and the Fed#1195834/5/04; 14:08:05

Interesting article from Martin Weiss today on INTEREST(ING) RATES. He was quoting from a journal or Writings of his Father Irving Weiss. Irving Wiess made a bundle shorting the Stock Market in 1929..and 1930 and years following he began a study of interst rates....and was mentored by a man named Dana Skinner who also was mentor to a man named Bill Townsend who went into business with ALAN GREENSPSPAN sometime later where they did analysis and research for large clients.

THere are many aspects to interest rates....usually people equate rising rates with inflation and falling rates with deflation ....and after the Stock market started falling / prices were falling and interest rates were falling so it looked like deflation....with regard to rates.
Irving Wiess then had to throw everything out he'd learned about rates to that point because an interesting phenomenon occured the midst of recessionary environment (come depression ) interest rates began to rise. A Rise that the Fed had nothing to do with nor could they control......the rise in interest rates occured because of a basic fundamental Law OF in this case specific SUPPLY AND DEMAND FOR THE BONDS that were in the market..... Initially with the fall of the Stock market , long rates on low grade bonds came down with the Market indexes... Later rates started rising BECAUSE the Fed had taken rates as low as they could go . Knowing they could not lower rates an further ....many people knowing the only way rates would go was up , decided to start selling the bonds to avoid losses that were surely to come once rates were raised or went up because of BOND SELLING..... If the FED responds to this type of selling by raising its benchmark will only exaccerbate the problem and cause more of the same...
In addition to all of the above RISING INTEREST RATES ARE THE ENEMY OF short or long term economic the cost of capital is rising ....
My comment : History repeats itself......and this is exactly the position that we are in today with regard to the bond market except that , as Martin pointed out, there weren't any credit cards in those days and the Gov"T wasn't in Hawk up to its eyeballs either nor would it be coming to the market with a 10 BIllion bond offering much less a 25 billion dollar offering...Bill Gross's commentary last weekend is bringing heightened awareness of this situation....It's BUBBLICIOUS...
Many over the years have overinvested in the BOnd Market.
Selling will have other ramifications than just the air coming out of the bond market/ It may be depressing for stocks and the DOLLAR as well.....THE last time Bill Gross commented on the BOND MARKET (Warning) was about 6 months ago......Alan Greenspans finger is not going to stop the water behind the DIKE.......nor will his mouth . I wonder how much of the Flight to Safety Capital when the Bond Market starts stumbling is going to hit the METALS MARKETS!!!!!! I don't know but I've been told that a well balanced portfolio has at least 10% of its weight in GOLD and other Precious Metals for times JUST AS THESE TIMES.

Enjoy the BONFIRE!!!!!!!

CometoseLong Rates on Low Grade BOnds WENT UP / NOT DOWN#1195844/5/04; 14:28:27

CORRECTION : Referring to Rates on LOW GRADE BONDS in during the GREAT DEPRESSION going UP when the Stock market slide began ......
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TownCrierMK works hard so you don't have to...#1195864/5/04; 18:17:34

One Page: "all the gold news that's fit to link"

Click through, or you'll never know how much easy sledding you've been missing.


NedU.S. net importer of oil#1195874/5/04; 19:09:24

"The full-scale production and enormous demand for oil masked a historic shift for Texas and the United States. In 1948, the United States for the first time became a net importer of oil. Although domestic production was at full-tilt for most of the 1950s, it was shrinking each year as a percentage of the oil Americans consumed in a year"

This is a passage of the 'Power Years' from the post supplied earlier today by Boilermaker.

Forgive me for I am confused. Is not the net import into the U.S. just over 50% now? I must be reading/interpreting this incorrectly. I believe what is being said above is that 51% imported, 49% exported, ie "net importer". Has this number climbed only marginally in 56 years?


NedP.S.: Boilermaker#1195884/5/04; 19:10:03

Thanks for the link.
ToolieDo the job numbers signal a recovery?#1195894/5/04; 19:18:29

I believe some may see the rise in employment (if you buy the B(L)S numbers) as signaling a coming Fed rate increase. I think that they miss the mark… I for one, do not see low employment as the cause of what ails the US economy. Once upon a time, the dollar required a certain level of unemployment to keep it strong. Let us not take our eye off the ball, the budget and trade deficits are the disease, unemployment a symptom.

Keep in mind what this increase in employment has cost: 13 rate cuts, 3 tax cuts, 2 wars worth of spending and some 3 or 4 years to work its way through the system. The latest employment report showed that for the first time in 44 months, manufacturing had not lost employment -- that is a long way from recovery.

The US economy is fracturing along the dividing line between sectors exposed to foreign competition and those sheltered from it. I do not envy Greenspan's job of trying to keep the service sector from overheating while simultaneously keeping manufacturing afloat. Sir Sundeck likened this a few months back to trying to operate a typewriter with boxing gloves on, good analogy! For those keeping score, it is 308,000 new consumers (services), 0 new producers (manufacturing).

308,000 new consumers demanding debt for the purchase of foreign goods will make for some ugly current account numbers. I double dog dare ya Al, take your foot off the gas and you will be buried in mortgage defaults.

Rates are goin’ nowhere, ‘cept maybe down.

Clink!@ Ned#1195904/5/04; 20:12:42

What it says is that the US started to export more than it imported. This could mean that 90% of US production was consumed inside the US, 10% was exported and the amount of 5% was imported. 10%-5% is positive so the US is a net exporter with these figures.

With the 50% that you mention, this means that 49% (say) of what is consumed in the US is of US origin with the other 51% coming from overseas. There could still be some US production which is exported (although I doubt it).

That help ?


21mabryValue of Gold#1195914/5/04; 20:14:34

I read an interesting passage from a book about Bismark.It seems when he left with the Prussian army to fight the Austrians one of his bankers gave him about 10,000 U.S.D in todays value of gold coins to keep with him.In case of defeat or capture or losing his way he would have something of value to rely on.I guess a Rothschilds negotiable bond or note would not suffice.When in desparate times it all comes down to true value.21
Clink!@ Ned (again)#1195924/5/04; 20:15:24

Well, I managed to screw that one up pretty well ! The first sentence should have read "What it says is that the US started to import more than it exported."


DruidBank of America to Cut 12,500 Jobs#1195934/5/04; 20:31:50

NEW YORK (Reuters) - Bank of America Corp., the No. 2 U.S. bank, on Monday said it plans to cut 12,500 jobs over the next two years as a result of its $48 billion purchase of FleetBoston Financial Corp.

The cuts amount to about 7 percent of the combined banks' work force of more than 180,000. Bank of America said about 30 percent of the cuts will be through attrition.

"They feel like they have something to prove to Wall Street to convince investors like ourselves that they didn't pay too much for Fleet," said Larry Puglia, who runs the $7.6 billion T. Rowe Price Blue Chip Growth fund and owns Bank of America shares. "It is an unfortunate aspect of entering into large mergers like this that there will be some job losses."


Druid: It's wonderful timing for these fine folks that the economy is on fire and ramping job growth is currently taking place.

Socrates964Cometose#1195944/5/04; 20:41:38

You may care to opine on the following conundrum that's been preying on my mind recently:

A new feature of the bond market is that the mortgage-backed segment is 70% larger than the government debt market.

Now, what could cause a collapse in the Treasuries? To indulge in a little JP MOrgan-style facetiousness. I'll reply more sellers than buyers.

However, by the same token, could we not have more buyers than sellers in the event that the market perceives that the mortgage bond market is about to go pear-shaped and everyone tries to abandon ship. Could this not lead to a situation where there was enormous demand for lower yielding T-bonds just because they were perceived as being safer than mortgage bonds.

Granted, once these trades had unwound, the Treasury would still be faced with its intractable structural problems, but by blowing up an even bigger market, both it and the equity market could arguably win quite a long temporary reprieve. This would evidently be very good for gold, since it would extend the life of artificially low interest rates (that is for the government - everyone else would be faced with higher rates due to expanded risk spreads). Any thoughts?

GoldiloxValue of Gold#1195954/5/04; 20:46:31

@ Mabry21

Gold has always been the most reliable currency in turmoil. During WWII, OSS and MI6 deep cover agents carried gold coins in their "survival kits" to assist their escape from behind enemy lines.

barelyFun with decimals#1195964/5/04; 20:46:38

Check out the quote for Platinum at the link. It shows the current price at $7981.0.
Dollar Bill.,.#1195974/5/04; 20:54:24

James Henry should stick to economics.
CytekThe Currency Manipulation Plot#1195984/5/04; 21:19:28

The so called US conspiracy to let Japan manipulate the currency market and deliberately destroy the value of Yen vs. US Dollar, is not originated by the current Bush administration, but has started during the Clinton administration with former Treasury Secretary Rubin as the mastermind.
Now Japan is caught in the net weaved by itself and has no choice but to continue to manipulate the currency market with whatever amount of money necessary just to postpone the final reckoning in the form of a worldwide depression.
The job outsourcing problem has subjected economists, who have argued for globalization and now must defend the job outsourcing as desirable, to wide spread public ridicule; the problem is rapidly becoming a threat with the potential to sink Bush administration. If Japan and Taiwan walk away from the currency market manipulation and the foolish desire to run trade surplus, then US Dollar will collapse, US trade deficit will shrink rapidly, US consumption will plunge, and export industries of Asia will be wiped out.

To rebuild US manufacturing industry from the current sorry state and run a balanced trade with literally free currency market, and for Asian countries to build up a healthy service sector to balance their trade and grow on its own effort (not from the easy way of low cost labor and foreign investment) will take time. Until this balance is regained, the world economy will be in a condition called "depression".

I am begining to wonder if 10% of your portfolio in Gold is enough to sustain, to whats coming down the road.

Dollar Bill.,.#1195994/5/04; 21:50:03

Cytek, Im with you on looking at this. Today I was hopeing my brain would kick in gear enough to find a way to interest Forecaster in discussing, well, obviously I didnt find the way yet, but, he takes present trends and takes them out to 2025. I guess I would like to see him take some trends I see and see if he can bridge us to the United States of Earth.
Well what do you know, I got it out. I hope tomorrow or wednesday I can lay out some of those trends and see if he is interested:)

forecasterTo Dollar Bill and Cytek#1196004/5/04; 22:22:56

2025 is the year used in Article No.2; our trade deficit is projected to reach like 1 trillion dollars a year. The society of article No.7 requires 15 trillion dollars a year to sustain so no one in the country (of 500 million population) needs to work. The society of article No.7 probably will not be reached. As stated in Article No.2, if you think the picture at 2025 or in article No.7 is too ridiculous to be true, then you must assume Dollar will collapse before those times.

I am not convinced that Japanese Government has really given up on intervention. They probably do not need to intervene for a while since they have already mopped up such a large amount of Dollar from the market. They are probably pondering now when the sell pressure on Dollar will resume and how large that pressure will be when it resumes. I think that we may see a Dollar rebound against Euro and may be against Yen around the summer; that is when our trade deficit will peak and our economic growth will slow down (does not mean GDP growth will become negative, just slow down) as projected in my "projections -> USA" category.

slingshotGoldilox Msg#119595#1196014/5/04; 23:30:32

Interesting you bring up the subject of Survival Packages of operatives in WW2. Gold was an important asset and has its roots all the way back to the Americam Volunteer Group known as the "Flying Tigers" flying P-40 Hurricanes.
I had met an armorer who was under command of Gen. Chennault and the stories and pictures were fantastic.
Little did they carry with them. A knife, compass,hard candy (if possible) a pistol and a "Blood Chit" which was a silk cloth with an American Flag and the Chinese Nationist Flag with A message for safe passage written in chinese. A Chop Block insignia and serial number attached to each chit. Yes Gold Coins was included.
This practice I have heard was use even in the Gulf War.
Wondering if we have any Eagle, Warthog,Hornet or Prowler Drivers visiting our Forum. Maybe a SkyHawk or Intruder driver from the past.

Black BladeGoldilox - "Big Oil" Myth#1196024/5/04; 23:36:20

It gets late and I could cover volumes on this "Big Oil" myth but in short even during the time of the anti-trust movement during the Teddy Roosevelt era, Rockerfeller did try to monopolize the oil industry. However, the same was true of Royal Dutch/Shell, Anglo-Persian Oil, Turkish Petroleum Company, Nobel (of the "Nobel Prize" fame), etc. The fight over this diminishing resource was well underway worldwide as many countries realized that oil was the "blood" of the "body" (the industrial age). Those days are long gone and there simply is no organized conspiracy unless you look toward OPEC where cheating on quotas was rampant.

The problem of course is that a nation without oil and the ability to use it efficiently is a nation that is "Third World". However, after the breakup of Standard Oil in the US many new companies came about and competition kept oil and its by-products "cheap" around the world. The integrated oils simply do not have the abililty to dominate the market. The real problem is that we are nearing "peak oil" production (reached in 1971 in the US - M. King "Hubbert's Peak"). The Middle East and North Sea have "peaked" two years ago and pumping oil faster would simply do irreversable damage to the remaining "Supper Giants" (100 billion bbl oil fields) such as Ghawar, Canterell, etc.) The real marketing power resides in both New York and in Amsderdam among speculators and traders.

One very good book that I highly recommend on the subject is Pulitzer Prize winner Daniel Yergin's "The Prize: The Epic Quest for Oil, Money, and Power". He is also president of Cambridge Energy Research Associates (CERA) that has a yearly conference on the world's energy resources. It is money well spent for anyone who wants to gain an understanding of the panoramic history of oil covering the first well drilled in Pennsylvania to the Iraqi invasion of Kuwait and Operation Desert Storm. (Perhaps some time I should repost "The Rise and Fall of Hydrocarbon Man" that I wrote some time ago - not much has changed). An economy without "cheap" oil is a dead economy. As I said, it grows late and I have much to do in the next few days. But also the afore mentioned book is quite detailed and well worth reading - heck, you can probably find a "cheap" used copy on or some such online used bookstore.


- Black Blade

Black BladeKnallgold Massive Russian Gold Find#1196034/5/04; 23:50:11

I usually take much of what is said from such sources with a grain of salt (remember Bre-X?). As I heard more and more unbelievable news about the huge Bre-X deposit so I checked the "Geo-Ref" database to see is there was some sign of artisinal mining or small scale mining by natives. Yet there were none. Red flags were popping up everywhere and I never could bering myself to invest because with a 71+ ton gold deposit one would at least expect to find some professional paper on artisinal or small scale mining. This "new" 1,000 ton deposits sounds rather suspicious as well but I haven't had the time to look through "Geo-Ref" CDs yet either. Beware of Russian tales of golden riches. They were wrong on their "substantial" Platinum and paladium stockpiles as well when long sold off to cover the Russian bond default.

- Black Blade

SpartacusECB#1196044/6/04; 01:05:45

ECB in crisis as rate cut blocked by revolt
By Ambrose Evans-Pritchard in Brussels

EU sources said Mr Trichet had pledged a rate cut to Europe's political leaders but faced unexpectedly stubborn resistance from German and Dutch colleagues. Mr Trichet and his allies had signalled a rate cut through a "softening-up" campaign in the media, while key national capitals were reassured that monetary policy would at last be loosened.
Mr Trichet's less than subtle campaign infuriated a bloc of hardliners led by Germany's Bundesbank, who resented the way the ECB was being "bounced" into rate cuts. Officials say Germany's Otmar Issing and Holland's Nout Wellink orchestrated a counter-coup, insisting that the ECB could not let itself be "pushed around by governments".
A top EU official warned that the political battles within the ECB have reached the point where they are seriously compromising policy. "They are playing a very dangerous game. The eurozone needs much lower rates right now," he said.

"It is already the slowest growing economy in the world, but consumption here must grow faster than the United States if we are to correct the massive imbalances in the world economy and avoid a hard landing."

Spartacus: Will Europe bail out the dollar system or not?

TopazGold again showing strength.#1196054/6/04; 01:10:23

DX/Gold comparison charts showing again the underlying strength of Gold in these interesting times. Last eve, as the Dollar was rocketing upward, Gold just sat there, immune...pretty to watch.
Mr GreshamSocrates964#1196064/6/04; 01:20:35

I'd been wanting to say something about your unique and helpful insights lately, but tonight you really reached the summit (or nadir) of "thinking like a criminal."

Yes, what if the Fed succeeded in "blowing up the GSE securities market?" That would rebound to the benefit of Treasuries, which all of their primary banks would know were the safe holding.

The GSEs have all been stuffed into money market funds, pensions, endowments, etc. Poof! What inflation? Fed's balance sheet nicely secured.

Holders of said Treasuries get to buy up all the depressed real estate they ever wanted. Japanese can buy all the US industries they ever set eye upon.

Doug Noland's been pointing out how all these other leveraged entities have been "creating money" out of the control of the Fed and the banks. Greenspan just warned of GSE extremes, (and advised borrowers to go for ARMS!).

Perhaps allowing the bubble has been a matter of making lemonade out of lemons for the Fed. Could be, could be.

Ever since reading Prechter's book, I've been convinced that a lot of money is going to go away. It's just been figuring out _which_ money that has had me wondering.

When the Titanic has only half the lifeboats needed for all onboard, you want to be sure your cabin is nearest one of them.

Of course, if many lose their houses, they're not going to be making mega tax payments either, so Treasuries eventually come under fire. But the Fed can buoy them for some time, probably.

Mr GreshamCall for Sir LimitUp#1196074/6/04; 01:38:54$SILVER:$GOLD,uu[l,a]daoaynay[df][pb50!b200][iLa12,26,9]&pref=G

Be he in the land? Send the call throughout the Realm, for he may soon be needed at Castle.

This silver/gold ratio is roaring, hit .020 for the first time. Outta control.

Now we know that the CBs want to control gold's ascent, and so they have a budget to use up some gold to do so, and not throw the dollar and all fiat too much into question.

And we've also seen gold and silver track each other daily wiggle for wiggle with a high time correlation (though not in the same percentage movement) these past months. Ergo: They are definitely linked in the minds of the world's traders and savers.

So what will happen to gold if silver gets outta hand on a Limit Up day? And we are much closer now with this volatility to just such an event.

Are the CBs determined to keep it "orderly" in that event? Or is that just not in their playbook? (And maybe the silver market is sensing the open field ahead of it, and running for daylight, knowing that it will soon be joined by gold, unrestricted?)

Gold (and silver) will be "re-priced once in a lifetime"?

CometoseSocrates#1196084/6/04; 02:00:39

That's a very valid argument that you pose ...the Fed would like an orderly cascading down and such a buffered approach to Niagra Falls..: the cascading event of the 21st century.....I think you get some kind of Fed intervention happening to prevent a melt down like what happened in 1987 ....... Now that you bring up the proposition that Mortgage backed securities Flight to Safety props up the Bond Market....... , there is something else to consider with regard to these Mortgage Backed securities......and the equity Markets.....

Maybe , we can get more clarity on the subject to determine which events are likely to occur first or the sequence of the events....I have been of the impression that these Mortgage backed securities. are sold by GNMA and Freddie to fund new lending....I have always had the suspicions a large percentage of these winds up in Pension Funds and In Mutual fund Inventory ....and therefor they may compose a huge portion of the Equities market. In effect by lowering interst rates , the Fed was able to stimulate the markets with a PROP/ Crutch by directing all those borrowed funds(consumer savings) to to go back into the Stock Market where they reflated the indexes and also created inflation in REAL ESTATE PRICES (all the time using the homeowners /consumers savings(now borrowings)to accomplish the dirty deed.

What you allude to may indeed be the plan to protect the bond market as the expense of FREDDIE AND FANNIE and the holders of those Mortgaged backe securities. The people left holding the INSULT AND INJURY BAG are those that took out big loans on their houses and don't know that that Mortgage (backed security) which is going to devalue with the coming oversupply in the market
is now part of their Mutual Fund portfolio....SO while interest rate sensitive Real estate gets hit because of the oversupply of MORTGAGE backed securities coming on the market for sale ....THe homeowners Stock portfolio is also going to get hit because the value of those securities(packed in the Mutual fund portfolios across the NEVER NEVER LAND OF WALL STREET) is going to take a beating.....I do Smell a Thief........Easy Al the Pusherman is going protect the BONDMARKET ....and the Easy Credit Junkies down on the HOME gonna take a the BARBER CHAIR and GET one Humdinger of a Haircut they never saw coming. THEY GONNA GET A SHAVE WITH A DOUBLE EDGED RAZOR so Sharp , they won't even know they been fleeced when Al gets finished with em'.

NedU.S. imported oil (thanks Clink!)#1196094/6/04; 04:42:24

I think I understand. In terms of the ratio of imported/exported the U.S. was a net importer in 1948.

Here's a snip from the EIA:

"The United States averaged total gross oil (crude and products) imports of an estimated 11.4 MMBD during 2002, representing around 58% of total U.S. oil demand. Around two-fifths of this oil came from OPEC nations, with Persian Gulf sources accounting for about one-fifth of total U.S. oil imports. Overall, the top suppliers of oil to the United States during 2002 were Canada (1.9 MMBD), Saudi Arabia (1.6 MMBD), Mexico (1.5 MMBD), and Venezuela (1.4 MMBD)."

Here's another interesting snip:

"U.S. total oil production in 2003 is down sharply (around 2.7 MMBD, or 25%) from the 10.6 MMBD averaged in 1985. U.S. crude oil production, which declined following the oil price collapse of late 1985/early 1986, leveled off in the mid-1990s, and began falling again following the sharp decline in oil prices of late 1997/early 1998. With the rebound in world oil prices since March 1999, U.S. crude production basically leveled off once again in 2000 and 2001, rising slightly in 2002. Despite this increase, U.S. crude production remains near 50-year lows."

What would be very, very interesting is to see a historical
'average gross import' and projected in the near future. The figure of 58% is in 2002. In the article is also projected total consumption of 20.35 M bbl/day while domestic production (guesstimate) is set at 7.7 M bbl/day thus leaving 12.65 imported, a ratio of 62% imported.

This is an alarming accelerating ratio of approximately 2% per year. I'm sure the rate is accelerating within itself as domestic production swoons further. I'll bet the oil engineer propellor heads have total 'average gross import' near 80% by 2010.

No wonder why George has his knickers in knots.

Dollar Bill(No Subject)#1196104/6/04; 04:57:26

perhaps this adds to the GSE discussion.
"..home loan terms could double to 40 or even 50 years to keep repayments affordable if the UK follows the Japanese model of ultra-high property prices. In Japan, interest-only loans lasting up to 100 years are common, with the mortgage passed down through generations. But as the borrowing is never repaid, home loans have effectively become a form of long-term secure tenancy."

Chris PowellGermany may sell gold to pay Bundesbank president's hotel bill#1196134/6/04; 06:34:21

Latest GATA dispatch.

To subscribe to GATA's dispatches, send an e-mail to:

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Cavan ManI was waiting for this....Thanks Chuck!#1196144/6/04; 06:42:31

OK... Onto other things... HOLD THE PHONE ON THAT SO-CALLED JOBS CREATION DATA from Friday! Did my shouting come through the internet? If not, believe me now and hear me later, I'M SHOUTING! My friend and well respected analyst, John Mauldin sent me a report yesterday that the markets obviously didn't have privy to when they sent the dollar soaring on Friday... Here's the skinny...

Lacy Hunt of the King Report broke down the labor data and here's what he found... This also answers many questions I received yesterday about how could we gain 308k jobs and the unemployment rate rise? Well, here goes...

" Of the 308k jobs created, 296k are temporary or part-time jobs! (95%!) Let us repeat and let's be very clear, almost all jobs created in what is heralded as a great employment report are part-time jobs. "In March, the number of persons who worked part time for economic reasons increased to 4.7 million, about the same level as in January. These individuals indicated that they would like to work full time but were working part time because their hours had been cut back or because they were unable to find full-time jobs. (See table A-5.)" People want
full-time but can't find it. Lacy opines that Congress did not renew
unemployment benefits so many people took whatever they could get. This accounts for the surge in people entering the workforce."

Courtesy of Chuck Butler @ (NOT a AU competitor)

Dollar Bill.,.#1196154/6/04; 06:59:04

Cavan Man, Lacy Hunt loses me here...
"In March, the number of persons who worked part time for economic reasons increased to 4.7 million, about the same level as in January" Also, what is his definition of "temporary"? seasonal construction?

USAGOLD Daily Market ReportPage Update!#1196164/6/04; 07:20:44">
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Cavan ManDollar Bill#1196174/6/04; 07:32:21

Not sure; I only saw an excerpt. I am looking for the complete parsing of the stats.
BoilermakerNed - Oil Export/Import Details#1196184/6/04; 08:19:01

Ned, This may be more than you want to know about the US petroleum picture but if you go to this site you will see the EIA weekly stats on oil flows in the US compared to a year ago. You will see that the US exports virtally no crude oil but does export about 1 million bbls/day of refined product. We also import about 3 million bbls/day of refined products for a net import of 2 million bbls/day of products. Added to the crude imports of 9.84 million bbls/day we have total net imports of 11.834 million bbls/day which happens to be 10.7% higher (1.148 million bbls/day) than one year ago.

The higher import rate makes up for a decline of .230 million bbls/day of domestic crude production which was nearly off set by a decline of .202 million bbls/day of total products supplied (demand). Most of the higher import rate for the latest period has been going into a rebuild of petroleum stocks (inventory).

Federal_ReservesThe Rates - 30 year no points loans close to 6% now#1196194/6/04; 10:13:14

That's pretty high considering the FED is saying inflation is a low low 1%. LOL! I guess that would be true if you look at wage growth, a paltry 1% YOY at last report, but prices are rising at 4-5X that rate.

There is positive and negative leverage. In homes since 1990-91 its always been on the up and up. When this turns, and home values drop, we will have on hell of a consumer bust.

USAGOLD / Centennial Precious Metals, Inc.Put a quarter-century of experience at your fingertips in 175 pages.#1196204/6/04; 10:25:01

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SundeckSnowdrifts of Debt #1196214/6/04; 10:43:46


The laws of economics likewise never cease. These debts must be dealt with. They cannot grow indefinitely at their current rates. History tells us that these debts are not usually repaid as agreed. In a world of fiat currency, debt relief takes a subtler path than the overt aggression of a Roosevelt. Inflation (an expansion of the money supply) or legalized counterfeiting, is the modern spin on an old idea. The forces that led to these earlier swindles are converging now on a debt-laden America. From Solon, to Roosevelt, to Nixon's closing of the gold window, the tradition of fraud is evident. In today's world, all you need is a printing press. My guess is that Bernanke's printing press will be busy.

Sundeck: A (very) brief history of "debauching the currency"...


LimitUpIt won't be long now#1196224/6/04; 10:59:58

I lurk in the forest every day, very soon I will enter the Castle.
TownCrierWhat goes around, comes around#1196234/6/04; 11:32:57

Interestingly, last Thursday I posted the following comment -- in the wake of the latest ECB press conference which is their monthly means to provide transparency through comprehensive explanations of their latest policy decisions to the world. By way of background and contrast, you will recall that our own Fed simply provides a three or four paragraph statement to explain monetary policy decisions, whereas the ECB provides a full press conference statement plus a lengthy question and answer session. I posted, in part:

TownCrier (4/1/04; 06:40:30MT - msg#: 119418)
..........."Our own Fed officials have been pretty good lately at giving economically fundamental, educational speeches (for public consumption), whereas the ECB seems to put more emphasis on promoting transparency of the institution's operations and on encouraging the politicos to come into compliance with their fiscal responsibilities.
"The impression this behavior leaves me with is that the ECB is stepping into the leading role on the world monetary scene, while the Fed is more or less prepping its own constituents to be better able to understand and cope with this inevitable evolution."

You can therefore imagine my surprise/delight to see these remarks offered today by Fed Governor Ben Bernanke.

But first, I almost grimaced when Governor Bernanke "boasted" of the Fed's brand of transparency with this statement at the beginning of his public address today: "Good morning and welcome to the Board Room. A little more than two weeks ago, the Federal Open Market Committee gathered at this table and debated the future course of monetary policy. Its statement afterward was transmitted instantly around the globe to millions of people. Journalists, investors and others, understandably, thought of the topics discussed around this table on that day as important."

Again, the content and quality of the Fed's policy briefing pales when compared to the ECB.

However, Mr. Bernanke was back on track with the following remarks:

"...there is a sense in which our topic today--the financial education of our young people--is even more important. Our economy can become ever more prosperous and our financial system ever more sophisticated, but if our young people lack the knowledge with which to make wise choices--for their present and their future--they will not be able to share in the benefits of the advancing economy and financial system.
"I say this not only from the perspective of a Federal Reserve policymaker, but as a former economics professor, a former member of the Montgomery Township, New Jersey, school board, and, most importantly, as the current parent of two young adults. And, I know many others join me in the conviction that financial education is crucial. This month has been designated by the Senate as Financial Literacy Month.
"The Federal Reserve is involved with financial education on many fronts. ... research is an important component of financial education. If we are to succeed in spreading financial knowledge, educators and others must empirically analyze knowledge gaps and the results of their efforts to fill them."

I encourage everyone to remain open-eyed and steadfast in their own efforts to identify and fill the gaps. A thorough understanding of gold's role in your financial security will be a vital component of your coursework.


GoldiloxAg appreciation#1196244/6/04; 11:35:04

On a mellow market day, silver is quietly seeking new levels.

$8.20 into the close.

Socrates964Mr G/Cometose#1196254/6/04; 11:50:22

Mr Gresham - I'm honored by your compliment. Unfortunately I put it down to simple observation rather than feats of intellect.

Without going into the rich tapestry of official sharp practice that I've witnessed South of the Equator, I think that you already have 3 official warning signs that the US government regards bond investors as 'useful idiots'.

-Peter Fisher's termination of the 30-year bond in an attempt to manipulate long rates down.
-Sir Alan's off-the-cuff comments that the GSEs are stand-alone institutions
-The ECB (wasn't it) warning of mortgage bond securities.
(Indeed, the Europeans seem to have spotted this one and unwound their positions - although perhaps someone can confirm this)

You'll no doubt remember Sam Goldwyn's remark that 'a verbal contract isn't worth the paper it's written on'.

The only mystery for me is why so many investors don't see this and seem to believe that they can take Sir Alan's verbal contract to the bank.

Having said this, lots of Argentines who earned in pesos did take out loans in dollars because the interest rate was slightly lower than in local currency, so it's not as if it's only American investors who behave irrationally.

Cometose - Agree, I've tried to think my way around the mechanics of a collapse in the mortgage-bond market. This is about as far as I've got:

In theory, the insurers take the hit on their mortgage bond portfolios. This will presumably leave them excessively short of treasuries on their hedge books, so the natural tendency is for them to cover and push up Treasury prices, even if this is a short-term effect. Will the Fed let bond prices rise or will it issue more bonds to stabilise prices? This is an imponderable. Either way, it seems to me that the spread between Treasuries and mortgage bonds explodes. Will this have a knock-on effect on corporate credit? Perhaps, depending on the degree of panic in the market. What is the equilibrium level of mortgage bonds? My guess is that if placed under financial stress, some 10% of buyers (mainly young people) will hand in their keys and walk away. The imponderable is the strain that this puts on overall prices and the degree to which other home buyers will grin and bear loans with negative equity/government will be prepared to throw distressed borrowers onto the street. Am I correct in thinking that the Bush administration has been trying to make it easier to prosecute defaulters? Presumably, John Kerry has worked out that there is considerable political capital to be generated from introducing 'home-owner friendly' legislation.

What happens to Freddie and Fannie? In theory, nothing, since they are borrowing in the market, lending to housebuyers, packaging up their mortgages and selling them on to insurers. It thus seems to me that they face two risks albeit ones that are indirectly related to the mortgage bond market - a) some kind of counterparty default on their hedges that they will not be able to stand because they operate on miniscule equity/assets ratios, b) a cashflow crisis simply because their risk rating drives up their cost of borrowing and consequently lending rates to housebuyers and their conveyor-belt of a business grinds to a halt.

Evidently, gold owners don't need to worry about the above.

CometoseCavan Man / Socrates#1196264/6/04; 12:29:30

Cavan Man :

Thank you for the clarification on the Jobs report /
I suspected the same .......

It's tough when you are having a party and all the invited guests have arrived and you pull the tab on the Keg and the result comes back
NO BEER / ALL FOAM .............

that THE PARTY IS OVER............or am I READING TO much into this BETWEEN THE LINES..


Your lucid commentary on the Bond Market and the Mortgage backed securities market was very thought provoking for me. I think your posts on this subject are worth another read....In spite of the BABBLE fest on the part of the Commentators and the Fed officials here and there which is enough noise to make smoke and therefor obstruct ones vision.......I am thankful for this forum where the exchanges that occur often have the affect of drawing back the Curtain (of Smoke and mirror deception )to obtain an unobstructed and clearer view of What may really be going on.

Great Albino BatTownCrier - Mr. Bernanke's concern about "financial education".#1196274/6/04; 13:11:41

"Financial education", indeed. To start with, the two terms "finance" and "education" can mix just about as well as oil and water. Finance is about usury, about getting people to give you something you need, in exchange for a promise. It is about "philopecunia", not philosophy.

Education on the other hand - is diametrically opposed to all money-loving, money-grubbing.

Now, the GAB is not a money-hater, far from it. Gold and silver are "honest money for honest people" as someone here says now and them.

ONe of the beauties about this REAL MONEY, is that - you can be quite successful in your life, quite able to earn an honest living, quite able to provide for a family, without ANY EDUCATION AT ALL! If gold and silver are money, you don't even have to know how to read and write, in order to make your way in life. So much for "education".

It's when certain humans complicate money so vastly, that you cannot understand the jargon of the money-grubbers unless you have an "education" (Ugh! Hate to use that fine word in such a context!) or rather a training in all the terms used to - fool yourself, fool as many as you can, dupe the masses, extract from those who work, the fruit of their toil, in return for lousy promises of FUTURE wealth.

That is what boys and girls are going to "University" for. To learn all that crap.

Is it any wonder that drugs are so popular? Who wants to live a conscious life in a world where the path to success lies in "financial education"?

My rant for the day. Now, back to my snug cave.


GoldiloxNew Bancruptcy laws#1196284/6/04; 13:23:28

News on the bancruptcy laws can be found at the link.
melda laureGAB..#1196294/6/04; 13:24:31

Philo-pescueso (neckbone- ie "jugular") vs philo-sophia
Goldiloxbankruptcy laws#1196304/6/04; 13:31:33

Sorry, the previous link is not the best path into their site. The link works, but if you delete /news/ from the end of teh URL and do a search on "Bankruptcy" and then list articles by date, you'll get better choices for selection.

Here's one on the potential effects of the new laws on home owners.

GoldiloxA Central Banker's Spectacular Fall - Tustain#1196314/6/04; 14:10:59

For all you lurkers and newbies who have read John Law's name but not his story, there is a good summary at the neighboring castle.

A gambling, womanizing scoundrel, the article says he evoked "All the admiration and jealousy that accompanies success in gambling and the bedroom."

Sounds like the perfect bankster!

CoBra(too)Heck! No Subject - Scroll past please ...,#1196324/6/04; 14:24:12

As I wanted to post about the irrationality of WAT, I thought you all already know that in reality it means succumbing to the same level of "Pathos" introcuded by the enemy. OK, overkill ... though, don't feel I'm snide here as I've seen the problems coming. Having spent some time in Iran and other islamic countries as son of a father, who used to be ambassador of my country in the region, I still retain some very positive friendships within the region.

Can you spell unwarranted aggression. Or Iraq, would've been better off with Saddam than with total anarchy? ...

As not beating around the bush anymore, I feel the guy and particularily his aides have lost all their marbles, if not more. To repeat this in plain german - The US admin is making more enemies by the day, as they can keep away by their policy of democratizing countries - or better shape them to their own needs of serfdom - and empire.

It's really tragic having to witness the great American people, its beliefs, freedom and whatever the rest of us where admiring so much go down the drain by a self righteousness in believing in their misallocated call of saving the rest of us for our follies. The nation of the brave and formerly free have surrendered to the apathy of easy and instant gratification. ... The rest of the West is not far behind .... and I didn't mean to write all that - forgive me ... I'll be more clear at another time ....

Instead, I was just reading of a "scandal", splashed over the press and concerning bribes accepted by Ernst Welteke, the President of BuBa.

The total amount of bribes accepted for hotel bills and mini bar receipts at the majestic Berlin Adlon Hotel due to an official Sylvester party, thrown by Dresdner Bank was the gigantic sum of € 7.661.20. That's right seven thousand and some ...

OK; as I'm not a great friend of Mr. Welteke's monetary wisdom - and who knows how he even arrived there ...ha, talking about pressures of (political?) necessities - it was illuminating to read his resume'.

Born 1942 (ha, a good year, if you'd care ask me) in the province of Hessen, mechanic for agri manichery, returning to high school and later getting an economics degree. 1959 member of Germany's major union, and from 1991 -95 minister of economy under Hans Eichel /(now G. Schroeder's minister of finance)as president of the proince of Hessen. Since Sept. 99 president of Buba...

So let's sell some of the gold BuBa allegedly should hold -as we have to make sure to account for the 1.700 tons - hey, only half of our treasure - which is already encumbered. Encumbered - Sold - the difference is in accouning. So, let's blast Welteke, the Unionist to officialize the lies - a fait compli - long before his personal malaise.

Meantime, Tyco's Koslowski was released from billions of $'s alleged fraud ... and Alan Greenspan still answers some idiotic questions to members of the (central) committee - dubbed below the Beltway suckers.

Go figure - cb2

and please forgive me for ranting - Oh, well, only if you can!

Cavan Man@CB (too)#1196334/6/04; 14:43:16

Here's to you Sir (and yours) from an American who, when he hears the national anthem, sings; and, puts his hand over his heart as a chill runs down his spine.

Shame on the neocon and pnac morons. Let's hope the electoral process can remove the blight upon national honor because the deaths of so many innocents bring no honor upon them. No Sir!

Cavan ManPS CB2#1196344/6/04; 14:46:24

I was conservative a long time before Rush Limbaugh ever glommed onto the idea as a money maker. Shame on Cape Girardeau (MO)!
CoBra(too); 15:57:36

@ Gandy - Some checkered POG, though only blue sky for SPIKE at the "Privateers" charts.

Thanks cb2

and as a PS: Sir Cavan, I feel with you! ...

misetichGermany's central bank hit by Welteke scandal#1196364/6/04; 16:02:49


The executive board of Germany's Bundesbank will meet on Wednesday morning to decide the future of their president, Ernst Welteke, amid mounting calls for his resignation over controversial corporate hospitality he accepted two years ago.

As Mr Welteke scrambled to save his career yesterday, issuing an extensive apology for allowing Dresdner Bank to pay an €7,661 hotel bill for himself and his family, the board said it had discussed the matter and would now "examine whether the accusations contravened [Mr Welteke?s] function in law."


Is this the "only incident" of alleged corrupts acts by Mr. Welteke?

A strong proponent of Germany's gold! - wonder why?

All Aboard The Gold Bull Express

BoilermakerCB2 Rant - Seconded by Boilermaker#1196374/6/04; 16:37:10

Just watched the evening news. Iraq invasion was/is a horrible mistake. I am reminded of the US in Viet Nam and the Russians in Afganistan. Bush has entered the quagmire of war. God bless those soldiers that have been assigned to this wage this unwinnable war. I pray for an end to it.
Socrates964Does the Euro fault line run through Italy?#1196384/6/04; 17:14:33

Welteke is getting trashed over his hotel expenses - but there is a bigger potential story brewing in Italy - namely the civil war between Berlusconi loyalist, finance minister, Guido Tremonti and Chairman of the Banca d'Italia, Antonio Fazio.

My own experience of Italian business in the early 90s was that the Banca d'Italia mandarins were the only bit of he Italian state that did any real work. However, they behave like an unaccountable élite and that evidently irritates the hell out of a lot of Italian politicians.

Bankitalia head, Fazio, is viewed by some as a potential head of state. Tremonti & Berlusconi are thus slinging as much Parmalat-colored mud as possible in the hope that it sticks. Right now, it looks like they're winning.

Now note the end of the article:

On Saturday Economy Minister Giulio Tremonti had detailed the government's economic plans to the conference, provoking a negative reaction from the Bank of Italy.

"The government has prepared a package of structural interventions to re-launch the economy," he said: "Some will be financed by classic, orthodox means, others in a way that might seem unconventional."

He declined to give details, saying Berlusconi would announce them on Sunday.

He also criticised losses incurred by the Bank of Italy in currency operations.

The bank reacted immediately by warning against "the inappropriate use of gold reserves and foreign currency intended to support the (euro) single currency."

But Berlusconi responded by saying he had no knowledge of any plan to use the Bank of Italy's reserves."

Strange that Italy's gold gets dragged into a discussion on budget ceilings, isn't it?

This puts an interesting spin on the Washington Agreement. if I remember correctly, there was no need to sign it until September, and it came out 6 months early. Was it because Central Bankers felt a need to take pre-emptive action against rapacious politicians.

Italy's economy may be a basket case, but it does have almost as much gold as France and Germany - I used to joke with my Italian friends that this was the only thing holding Italy together.

Hence, it does look from here as if Europe's central bankers are fighting a defensive action against the politicians who want to sacrifice the Euro's long-term strategic objectives on the altar of short-term gain.

How do they turn the tables? In their shoes, I'd give gold a mighty push through E350 and give a terrifying inflation signal to the European bond markets, since unlike the US, Europe still has quite a lot of voters who believe in the virtues of thrift (well, excluding the British, of course).

R PowellRace update#1196394/6/04; 17:27:39

Today's update contains an unusual disconnect of price trends with soybeans losing 15.5 cents while silver ran strong closing up 10.3 cents.

The beans may be still suffering from last weeks planting intentions report but should rebound shortly due to the ongoing severe shortage of physical beans. Future expectations of supply will be no match for an immediate shortfall of supply. Is silver's strength also derived from a physical shortage?? The soybean supply must be supplimented with South America's crop to supply a hungry world until the next Northern hemisphere harvest. If, indeed, physical silver is in short supply, how long must the present supply be rationed until mining concerns can boost future silver supply?

May beans closed at $10.09 and May silver closed at $8.22, thus narrowing the gap to $1.87. Silver and gold may both be targets of steady but stealthy accumulation, while the soybean shortage is now a well know fact. There are similarities between these markets and perhaps the beans may provide hints of things to come. Besides, I don't have too much else to offer today except this silly race report. Thanks to all who have offered more relevent information.

CoBra(too)CoBra = BraCo - Important change of handle ...#1196404/6/04; 17:44:09

... Though as a sworn in contrarian look at the Co., before Bra - long after gettin' physical! ....

There will be some tears in the eyes of the 44 inhabitants of Gold Bridge by Thursday - as 43 of 'em have applied for a job at BRAlorne (BTW the second half of CoBra's handle)as the first dore bar will be poured again, after almost dumping the valley to oblivion for a few generations.

This may become an achievement, which will win more kudos for the guy, whos stamina and perseverance has led to the success of re-opening a mine, reknowned for their success in the 1930's depression, than Bob McEwens Gold Corp has won so far. And according to a study of the UBC, there may be 10 times more gold in the area than ever mined. That means the potential is a lofty 45Koz resource ...

OK, as this is pure gold and the only co. I'd know about going into production now - and it is - producing - and will become a 100K producer soon - I'd like to change my handle to BraCo-too - Best BC2

PS: Hoping that CPM will handle dore bars - equally ... or whatever ...

mikalIMF worried?#1196414/6/04; 17:45:12

IMF warns financial stability at risk from terror

WASHINGTON, April 6 (Reuters) - More attacks like the Madrid train bombs could destabilise global financial markets and pose a significant threat to their otherwise steady recovery, the International Monetary Fund (News - Websites) warned on Tuesday.

mikalIMF economic crash couse. First come, first served.#1196424/6/04; 18:13:28

From the link below, the IMF expressed concern about:
a major blow to worldwide consumer confidence, should one or more Madrid-size attacks repeat AND
the risk of forcing the FED to raise interest rates much higher on any large dollar divestments from abroad[there's a risk of not buying that's even bigger] AND
"The IMF said low interest rates had encouraged an abundance of liquidity and risk-taking by investors.
'Now that economic activities and corporate earnings have recovered strongly, the continued abundance of liquidity and a lack of two-way interest rate risk could lead to a sense of complacency and intensify the search for yield, while neglecting risk factors,' the IMF said."

SundeckTC #119623 - Education and Finance - "Filling the gaps" #1196434/6/04; 19:43:58

I'll let others here decide where the gaps are in Mr Bernanke's psyche - if any there be (heaven help us!) - but for my own part I know there are lots of gaps in mine, some of which get filled on a daily basis, only to expose larger ones.

Everyday I buy and read the Australian Financial Review for the odd tid-bit that may translate into financial well-being (for me, not others! - a most un-Christian attitude).

Here are a selection of items that might be of interest to the forum that came as a bit of a surprise to me:

1. Bill Gates is not the wealthiest person in the world; that honour goes to Ingvar Kamprad, the Swede who founded the furniture retail chain "Ikea" - a few billion dollars more than Gates.

2. Germany has overtaken the US as the worlds biggest exporter.

3. Japan is likely to overtake the US as Thailand's biggest export market around 2006 (a bell-wether for SE Asia generally???)

4. Japan relies on the Middle East for 86% of its oil (compared with the US's reliance of 23%) imports and pays about $2 per barrel more than does Europe and the US (the "Asian premium")

5. Inflows into Japanese equities are at record levels (another reason why MOF stopped intervention - they are getting swamped!)

6. About 90% of players lose money in the stock market (perhaps I read that on this forum...can't remember).

Oh and I think Great Albino Bat has it about right re "finance" and "education". I have seen many a financially struggling academic with a brain ten times larger than some finance types who drive around in Porsches and think they are clever - boils down to what turns you on: "understanding" the world or just fleecing it.

(Sorry, but it seemed to be a bit of a day for rants.)

Also TownCrier...don't be surprised if you occasionally find words from this forum echoed in wider and more hallowed halls...there are many who lurk in the shadows whose countenances are vaguely familiar and whose utterances are not entirely free of plagiarism...

Just my thoughts, errr predjudices, coming out.


GoldiloxHat Trick Letter - Jim Willie CB at FSU#1196444/6/04; 20:17:55


Look for misguided trade protection coming this autumn. Economic good sense is hardly the likely outcome. Historical accounts from decades past will continue to bend to political opportunism. The obstruction of Chinese imports will lead to importation of similar products from other low-cost Asian sources. After two to three years of severe cost competition, much US mfg has been gutted, with thousands of plants shut down. Advisors cling naively to the notion that jobs can be restored by either currency shifts or trade protection. They will not.

Curtailment of free trade carries with it horrible geopolitical risks. Higher price levels are but one consequence. Early in the 1930 decade, retaliation raged among nations in trade protection intended to save domestic jobs. They failed, as unemployment rose to 25%.Politics and ignorance drove the process. In just four years, from 1929 to 1932, world trade went into a tailspin by fully two thirds. History teaches us that armed conflict (i.e. military war) often follows in the wake of trade war gone amok. When nations do not obtain what they need through peaceful negotiation, they tend to seize by force. Amidst the chaos, old scores are settled. The most famous quote to this effect is from Frederic Bastiat, who posed "When goods are not allowed to cross borders, armies will."


An excerpt from a much larger treatise on the extreme levels of risk in the US economy.

R PowellSundeck // forum prophesy record..#1196454/6/04; 20:43:18

Your words here...

"Also TownCrier...don't be surprised if you occasionally find words from this forum echoed in wider and more hallowed halls...there are many who lurk in the shadows whose countenances are vaguely familiar and whose utterances are not entirely free of plagiarism..."

You don't know how true that is!!!!
I digest a great amount of commodity and commodity related financial information every day and have a pretty good sense of what is generally known, often repeated, versus relatively new opinions, theories and/or "supposins". I've often seen different twists or outlooks or even just speculations appear in the works of others shortly after being worked around here.

It should not be surprising that many minds are asking the same questions or reaching the same conclusions, but sometimes I wonder. Obviously the goldbug community monitors the well known forums but, I'll bet there are others listening as well. When coincident occurances happen at a rate that exceeds that of coincidence, then its being happenstance loses probability. I've seen some of my own silver speculations repeated in pay-per-view newsletters shortly after I've posted them here. Guess what, I was the one paying to read them!

I've also been rather amazed over the years at the general accuracy of prediction presented here. We always seem to be well ahead, timewise, of the reality and, of course, amiss on the finer details, but, overall, on the money. There have been some off-the-wall calls here too, but I discounted most of them right from the get-go. Try re-reading a few weeks worth of two, three, or four year old forum offerings while taking a few general notes. Skip around from month to month, year to year and then ponder more recent events! There have been many here at one time or another. "Those were the days my friend, we thought they'd never end...." Ooops, sorry...just reminiscing a little while I wait for $15.00 silver.

R PowellCase in point.....#1196464/6/04; 21:31:04

In regards to what I was just saying...The following is new, from David Morgan, an well-known and competent silver analyst.....

"Prices have risen over $1 per ounce over the past three months, even as the fundamentals of the silver market deteriorate rapidly" , this is the quote we used to beign the April 2004 report from silver

Looking at this month's quote it is hard to take it seriously.The silver investor has been very consistent from our beginning that the primary movement in the silver price will be based upon the physical supply. Our quoted person went on to state in one of his recent updates that these "large up moves in silver always end badly". We agree that all market go up and down, and silver does exhibit some very strong movement in both directions"

Morgan doesn't say as much here (although I haven't read his report in its entirety) but the quote "large up moves in silver always end badly" is, most probably, from Kaplan who has also been stating in no uncertain terms that there are absolutely no fundamental reasons for silver prices to rise. Indeed, he says this is a 100% speculative move which will unwind entirely.

My point? Does any of this sound familar from the very recent (two weeks or so) past?

Mr GreshamPrechter's $200 gold#1196474/6/04; 22:10:26

A quick thought while reading CyclePro's overview of what's going on now, and what may lie ahead.

CyclePro: "Robert Prechter's deflation scenario calls for gold & silver prices to drop along with all other commodities as people sell anything and everything in an attempt to stay solvent."

Of course, Prechter would say this is a simple supply-demand exchange happening at the extremities of debt liquidation after a credit bubble.

(Of course, I would ask are the gold-holders the ones likely to have run themselves up into extreme debt, and thus in need of liquidating to pay them down?)

But still, the Prechter idea is that these gold holders will have to sell them down, taking whatever they can get in dollar terms, in order to turn in dollars to their creditors.

This assumes that ALL of the dollar creditors are united in accepting only dollars as those payments ("Say, you wouldn't prefer one of my Saints, would ya?") and that no middlemen are available in town who have liquid dollars and see gold as a desirable acquisition.

It all comes down to whether dollars are seen as the stable holding which Prechter assumes they must be at the economic bottom. He just does not seem to have factored the likelihood of the bottom falling out as (1) a reserve currency is abandoned, (2) the Treasury guns the debt, and (3) the Fed runs the presses.

Prechter is right in that people will be running for the exits to liquidate asset (especially leveraged asset) holdings for money.

But I bet that by then most creditors will be ECSTATIC to exchange their dollar claims for real money holdings. It will become EASIEST to pay off debts with gold.

And, they will anticipate one or two BIG debtors (see above) joining the fire sale before much longer, destroying any remaining value in those dollars, no matter how scarce they may have become for ordinary folks.

Mr GreshamCoBra(too)#1196484/6/04; 22:36:17

It was only recently I figured out the roots of your handle, and now you're changing it on me?

Oh well, when I did, I shook the coins out of my piggybank, moved the couch and crawled under the cushions, raided my dau -- no never mind -- so then I went out and bought my own little pick and cart, started thinking "Summer Vac" in the Great White North, after joining in your little enterprise.

(Now, if I can just figure out what all those .pk's and .ob's and all mean. I mean, do I actually own anything, what with all those offshore naked-short-the-Canucks hedge funds in the Carib? I smell a rat somewhere, in a very nice suit and tie probably. Or getting me to pay for him getting the tropical tan I missed out on this year.) Anyway, there's always homework to be done.

Glad to be in such good company...

White HillsCobra(Too)#1196494/6/04; 23:04:43

Amazing! I know how hard it is to keep from introducing subjects that are a little off line from the forum guide lines. I will only addres part of what you said by asking a simple question. Where would you be if the USA would have ignored the attack on Pearl Harbor and left Hitler Germany as ruler of all Europe? There were people even in this country that thought we shouldn't have entered WW11. You may have friends in Iran and the mideast but we don't and they are not attacking you. What has everybody so upset is that we are going after those who attacked us and those who aid and harbor them. Better to fight them now and in Iraq than later here in the USA. White Hills
slingshotSir Powell, Silver#1196504/6/04; 23:30:47

Silver dropped to $8.13 and roared back to $8.26 OOPS, Now its $8.23.

slingshotTo Clarify#1196514/6/04; 23:39:08

When the term "Limit Up"is used is that taken from the opening price or is it the total amount the price can rise from the low.

DruidMr Gresham (4/6/04; 22:10:26MT - msg#: 119647)#1196524/6/04; 23:48:56

"To get back on track, the CyclePro Outlook is the optimistic one... DJIA 5600 area by 2010 and 3300 by 2014. In the same timeframe I expect gold to reach $2000 oz and silver as high as $90 oz. Further, I expect that there will be a super-severe golden bubble blowoff that may very briefly reach up toward $3000 oz -- so quick that only very nimble (or very lucky) traders will be able to participate. By then, rules will be changed to make it more difficult for us mortals to play freely. Inflation will reach double-digits again."


We have only just barely started seeing inflation invade our daily lives. Certainly we have all noticed higher gasoline prices... I am still waiting for my earlier prediction of "$40 crude is an inevitable certainty". We have gotten close a few times. The Federal Reserve has been very busy printing up more US dollars, lowering interest rates, and increasing liquidity in an effort to twart deflation. Any time a currency is inflated, the effect is identical to taxation. Although many holders of Dollars don't see the initial connection, the fact that future Dollars will buy less that what current Dollars will buy is just about the same as if G.Bush ordered the IRS to quietly extract a certain percentage of cash out of every citizens bank and investment accounts. The interesting thing about inflation is that it is tied to all holders of Dollars. The government budget surplus/deficit is directly linked to tax collection, thus everyone conducting business in the US. Holders of Dollars, on the other hand, are world-wide. Even most central banks of the world hold US Dollars... everyone is affected once the currency becomes inflated. In fact, I cannot think of a single country in the world that will not be directly or indirectly affected by G.Bush's current currency inflation strategy. A dozen years ago I would have guessed that China might not be too affected, but the recent trade imbalance has China holding hundreds of $Billions. Even countries that do not trade directly with the US are affected indirectly... for example, most international crude oil is priced in $US, thus anyone using products derived from crude oil is affected as prices rise to reflect inflated Dollars."

Druid: Mr. G, thanks for the link. Cool read and even cooler charts.

Just a few random comments on the article and other items that might be of interest.

I am always amazed at how various analysis can paint a total complete economic meltdown and then come back with a gold or silver price increase of say 5 or 10x the current prices stretched out over many years. For yours truly, the end result does not square with the scenario described. The magnitude of the problem and solution are miles apart when doing comparative analysis. I can conceive much much higher metal prices (In the upper 10,000's) based on scarcity then imagine 100+ trillion dollar figures etc..based on abundance (too many). Really, compare the number 10,000 to 1,000,000,000,000.

As for the inflation commentary, we have had high inflation for some time now, it's just becoming much more obvious and probably wreaking havoc on all those fancy econometric models whose practitioners don't understand what inflation is (Maynard was right).

There is no doubt in my mind that we are on the road to hyperinflation as this process can be easier explained away until it becomes to darn obvious. If the "paper wealth and real estate" side of the equation can ramp higher then the cost side then this will keep the masses on the blue pill awhile longer and allow the wizards more time too, I don't know, explore other planets. The equity markets have to be inflated to the very end. As an experiement, ask some colleagues to define "savings" and then "investment". By and large, these concepts have become one. I did this a couple of days ago and realized, wow, incredible, the equity markets will be defended to the end.

Thanks so much for your thought provoking contributions, you (and many others here) always raise my game a level or two. FWIW. As always...

Take Delivery.

TownCrierSundeck and R Powell, on seeing the USAGOLD forum's wellspring of thoughts later flowing freely in other fountains...#1196534/6/04; 23:56:50

I agree completely with you that we've got a good cutting-edge crew of posters participating here, often offering insightful perspectives days and weeks before they appear parroted at other gold analyst/newsletter/commentary sites.

One of the easiest ways to determine the extent that those other sites are highgrading from the work all of you guys selflessly put forth here at the USAGOLD Forum is to take a look at the various webpages on those other gold analysts' sites -- particularly the pages where they all typically provide a helpful list of related gold resources links, such as to other gold analyst sites and gold brokerages. Of note, you will frequently see a longish list of both notable and rather obscure competitors to USAGOLD, but very often you will not find among the list a link to USAGOLD itself.

Doesn't that strike you as odd, considering that USAGOLD was one of the internet's first few notable gold websites? Chances are, you won't find it listed on the websites of those analysts who shamelessly highgrade from the good material that you folks provide here and without ever giving due credit -- they most certainly don't want their regular readers to discover the valuable source of their "original" cutting-edge material!

So, if you suspect foul play, contact those websites and telling them how useful you find their site to be, warmly suggest that they consider adding a link to among their list of helpful and related gold links/resources. If they refuse to include us among the listings of our other website peers, you may perhaps rightly conclude that they are trying to hide something quite valuable from their casual readers and vistors.

If you think about it, they should have no real reason to balk at the inclusion of our link alongside any others that are already being listed -- it should seem like a natural and welcome addition, shouldn't it (???), since we're all striving in generally common cause to raise the public profile and understanding of gold. Give it a try, spread the word, and Mike and I will surely thank you kindly for any successes. Consider doing what you can to keep the Forum brimming with vitality and drawing the freshest of additional minds.

USAGOLD Forum -- shouldn't be the analysts' best-kept secret. Spread the links, spread the word! THE place to be.


BelgianTowncrier/Socrates/Spartacus#1196544/7/04; 01:33:58

Allow me to reflect on your (excellent) fact-finding posts :
We often tend to forget how incredibly stupid and blind, we "all" can be,...unfortunately, often for such a long time.

Italian goldreserves,...Welteke,...WAG II,...ECB-IRs row,...Berlusconi/Bush-Schroeder/Chirac huggings,...urgent Financial (Snow)Education,...etc...etc...are only a very few recent examples of complete (political)nonsense !

Underneath these distractive shows, the real and serious matters do evolve :
I'm picking two out of them,...golden ones : Two EU constitution boys, J.L.Dehaene (Belgium) and V.G.d'Estaing, are "working" on Euroland's formation of more "Political Will" whilst,...and here it comes,...Euroland's euro-Gold-concept, IS ready, whenever the dollar-system retreats !!!

This IS the explanation for so much stupidity in all its forms.

Think deep about the "WHY", AngloAmerican sold its 20% GFI stake to Russian Norilsk !!!??? This is NOT business as usual.

Read Willie's (GE) essay and realize the coming emergency for "dramatic" changes.

The point I wished to make, is that all these stupid events/declarations/rumors, do have a "context". Remember that I mentionned the Italian Gold, about a week ago.

Same is happening with the perception-building on the $-POO of $100-$150 ! Watch and listen the Irish Wolf, Hugh Hendry in his (innocent) capacity of "messenger" on CNBC. Same is happening with the "association" process of GOLD and OIL !!!

These introductionary perceptions, organized by the colluding politicians / media, do need the accompagnment of intriging stupidities .

The dollar-system is under increasing pressure ! Is the dollar-system already in self-defense modus ? This is my personal interpretation of the evolving daily events, comments, etc...

The eventual retreat of the globe's dollar-system goes hand in hand with the universal and modern "re-valuation" of Gold. The establishment is trying to get this message accross in a "softy" way.

SteveHToo low to rise...#1196554/7/04; 03:34:13

The adage "too big to fail..." applies to the CPI (consumer price index) that the CNBC folks equate to inflation. When you consider the number of financial systems pegged to the CPI and what just small increases in the CPI would mean to future outlays from these systems, take social security payments, wages, union contracts, and so forth, you understand that the pressure to contain the CPI. The political pressure is immense. To increase the CPI would mean substantial increases in payouts in so many areas.

Thus, the CPI has now become suspect in terms of measuring inflation. The shock comes from wondering what is the correct measure and who is really taking that measure and what actions, if any, are being taken regarding that measure?

My take is that most Americans feel the squeeze but change their behavior in areas that they can control inflation on their earnings. So much so that inflation is currently being observed in behavioral changes in consumers.

For example, take health insurance. Every ones health insurance is up double digits over just the last year, perhaps triple digits in the last few years -- same with car insurance. The consumer reaction is to shop around, change insurance plans, and raise deductibles: all in order to keep the benefit at the same or a lower price (if possible). The net result, though, is that for the same money, they receive less service or goods.

Thus one measure of inflation, if one expands this model, is the shrinkage of goods or service for the money spent. The observation is that inflation and the measure of it, is a moving target, unless one keeps something the same. That something is the behavior or expectation of the good or service for the money spent.

If the amount of a good or service is reduced and the amount of money spent to receive those remains the same or less, then at some point, behavior or expectation has changed radically. The slower the behavioral change, the less one notices the pattern. Nonetheless, inflation should be measured based on no behavioral changes or the original expectation. In other words, as soon as one is forced to change behavior or expectations due to market forces, then the measure should be based on that initial behavior and expectation.

For example, take the car insurance deductible. At some point some of us recall having a $100 deductible premiums. Now $500 deductibles are common. My original measured behavior and expectation was to enjoy a $100 deductible. Somehow, I now disenjoy a $500 and pay more.

Is this a 500% inflation rate over the measured period of time it took for this decrease in service? Perhaps. But what it certainly was, is a change in behavior and a reduction in service in order to keep dollars available for necessities.

Thus, if I suspect rightly, the CPI tries to measure only the amount of dollars spent for basic goods and services, that it must somehow balance these behavioral changes in its measure, but at the same time keeping its eye on the money spent to receive a service, not necessarily the same service that was had a few years back.

This is much like trying to measure a candle that burns from both ends. Thus, to be true to ourselves inflation must be measured on the pre-behavioral expectation of the good or service and not some notion of the newly accepted lowered and reduced good or service and the acceptance necessary by the consumer to reach that level.

In the end, people's behavior will be to discard all non-essential behavior to conserve money for that, which must be kept for subsistence -- in short, less for more. The CPI appears to measure the cost of less, without remembering the more -- a skewed number.

The two-person working family is but one late 20th century behavioral change to keep goods and services at an acceptable cost. The behavioral change was the working spouse and the acceptance of dual-family income earners. The goods and services kept flowing in, but at the cost of the family (if one subscribes to having a parent home to raise children is better for the family). The divorce rate in America is another behavioral change, indirectly contributed to by keeping inflation in check. The pressures of constant change in behavior brought about by the ever-present pressures of inflation have had its toll on all aspects of society. It wouldn't be hard to blame (and probably rightly) the need to change behavior to contain inflation on many ills of society. The adage that nothing is certain but change and death rings true. The rate of change and its intensity and the impact that has on society is the subject of many books and articles. But, to believe that the CPI measures inflation in such a fluid system, is probably not being true to ourselves.

The political pressure to contain the CPI as a measure of inflation is just too great. The CPI simply fools people into believing the numbers but not their own behavior or expectations of what money should buy. The faster the inflation, the more the people's self-awareness of their behavior and expectations of good and services will stand out, and the CPI will loose credibility as a measure of inflation, which it really wasn't anyway. It is time for CNBC and the ilk to find other measures of inflation that reminds us of how much we have changed so quickly to keep our money buying goods and services at a low rate of CPI.

The CPI is simply too low to rise. We can't afford it.

TopazMr Gresham re Prechter.#1196564/7/04; 04:56:24

Hi Mr G,
Elliot Wave theory is not something I'm familiar with and less so the posturings of Mr Prechter, but the basic tenet is sound imo. We KNOW the Gold pricing mechanism is largely a Papergold play for Cash and subject to the whims of the establishment, Yes? We KNOW in the De/Hyperinflationary environment that a liquidation to Cash is the Holy Grail? Why WOULDN'T Gold-Silver-R/E-Bonds etc ALL be caught in the same downdraft?
Assuming the status quo in such a washout is intact (USD Hegemony) the Cash du jour will be the Greenback methinks.

Socrates964Belgian/Druid#1196574/7/04; 05:05:29

Belgian - I agree that the key variable is oil. A strong currency is an essential defense against a rising POO. I think it's coming, but until it does, currencies will probably chop around. In the meantime, I see the mainstream (mendacious) media starting to prepare the ground for a US rate rise (and we've probably all read that the real purpose of Friday's 'shock and awe' job figures was to soften the ground for a rate rise. So I'm sitting here wondering whether this might weaken the Euro and lead to a mini-boom in gold as priced in Euros and finally open the floodgates of European retail demand. Any thoughts?

Druid - If I can make a couple of points:

1. Many posters seem to believe that hyperinflation is a quantum event. You go to bed with middling inflation one day and wake up with skyrocketing prices the next. Even Brazil and Turkey took a decade or two to sink into a hyperinflationary mess. Between 1986-94, Brazil had about one stabilization plan a year until it got to the point where we joked that the country had run out of economists to be finance ministers and they had to resort to economic historians.

My own feeling is that the course inflation takes depends on whether or not you have coalition government. If you have a single dominant legislator, expect something short and nasty. If not, something long and drawn out for the simple reason that the government's economic master plan gets held up in Congress. Evidently, as I pointed out yesterday on mortgage bond markets, the quick fix is often stiffing one group of economic agents to please another group, but the price you pay is that you kill markets.

2. While in a hyperinflationary context, a currency ceases to be a store of value, it will carry out its function as a means of exchange quite happily. This, IMHO, is why the dollar will probably never disappear unless government deliberately withdraws it, even if US citizens only keep the bare minimum for settling their grocery bills and take their paychecks and run as fast as possible for the nearest bank to change their dollars into yen/yuan/gold/euros/cattle/whatever.

It is also the basic intellectual flaw in the Prechter deflation argument, which, it seems to me, assumes that by reducing the amount of paper money relative to the volume of available goods causes economic agents to shift their investment preferences to paper money. All it does is to bring the economy to a standstill with only distress selling. Granted, there may be an element of deflation in grossly overvalued assets like US real estate, but ask yourself what does it mean to say that something is overvalued? I can think of two simple definitions: a) one based on the belief that prices behave cyclically and at a given point in time, are at the top of a cycle, and more germanely b) that you can buy the same thing cheaper elsewhere here and now.

The Prechter model assumes a 1-country economic model, when the reality is a multi-country model. It is hence hard to believe that the few gold owners in the US will decide to exchange their gold for paper when it's manifestly obvious to them that no corresponding shift in investment preferences is occurring elsewhere in the world as gold continues to be a scarce resource. The same evidently applies to copper, oil, soybeans, goats, Picassos, etc. In other words, the prices of valuable assets in limited supply are likely to be sticky downwards.

Thus, if gold goes to $300 million/oz, then its price in $$ becomes meaningless, since you are measuring its price against a paper currency that has ceased to be a store of value and is simply a means of exchange, useful only for settling your day-to-day expenses, which will be (at least for rich Americans who hold most of the private gold in the US) only a marginal proportion of their overall net worth. There is nothing mysterious about this, since this was the original function of money - a means of exchange. Nothing more!

In this sense, gold may actually be worth less at $300 million/oz than it is at $400/oz in that it buys less oil/fewer chickens, etc.

Socrates964Topaz#1196584/7/04; 05:24:02

If the price of gold were 'subject to the whims of the establishment' I doubt whether it would have rallied from its marginal cost of production at $250 to over $400.

Lots of people drivel on about the extraordinary wisdom/influence of the Fed, but market prices tell a different story.

I also find it very hard to believe in a deflation scenario in the light of such rampant credit creation. Sooner or later, much of this debt will either have to be monetized in one form or another, or there will be a huge default.

You may get some temporary distress selling of gold, but the mere fact that it is no-one's liability suggests that it will continue to be valuable. In addition, it's not as if gold ownership is widespread, at least in Europe/the US.

Clink!@Druid re price multiplication factors#1196594/7/04; 07:01:38

I seem to remember reading some article a while back where the author actually stated that they are deliberately conservative with the upside price targets which they project, because if they say what they really think no-one would take them seriously ! It's OK to speculate that POG will hit $500, more of a stretch at $1000-2000, and completely whacko at Another's $30,000. But as Another himself said, the value of gold may not have significantly changed except relative to the dollar, which would have tanked in this scenario. Most people don't like to be told that the world they have grown to enjoy is a temporary construct which is going to go away. I know that I don't relish it.
Clink!Who can you trust ?#1196604/7/04; 07:15:11

Walter Cronkite, "The most trusted man in America", writes about "Secrets and Lies Becoming Commonplace"

Snip :

It all brings to mind something I've wondered about for some time: Are secrecy and credibility natural enemies?

When you stop to think about it, you keep secrets from people when you don't want them to know the truth. Secrets, even when legitimate and necessary, as in genuine national-security cases, are what you might call passive lies.

Take the recent flap over Richard Foster, the Medicare official whose boss threatened to fire him if he revealed to Congress that the prescription-drug bill would be a lot more expensive than the administration claimed. The White House tried to pass it all off as the excessive and unauthorized action of Foster's supervisor (who shortly after the threatened firing left the government).

Maybe. But the point is that the administration had the newer, higher numbers, and Congress had been misled. This was a clear case of secrecy being used to protect a lie.

Clink! : You can't get more mainstream than this. I predict choppy seas ahead (but I won't say just how choppy, 'cos nobody would believe me. Or maybe they would.)

TopazSocrates964.#1196614/7/04; 07:20:55

Hi Soc,
Good points you make in the previous post (Belgian/Druid) displaying an intimate knowledge of the issues, Prechter etal.
It's not the value of Gold I envisage dropping...just the Price, in a continuation of the 20Yr Global Deflationary trend we've been witness to as a result of the productivity "miracle".
It's quite amusing that those good souls decrying Market manipulation on the way down find it hard to entertain the notion of meddling to the a counter to this aforementioned trend and as a temporary "stay of execution".

Just my thoughts on a subject I know little about...hope it doesn't eventuate..if so, rather than being proven right, would hope to have been proven helpful.

Mind you Socrates, it's good to watch those puppies run!

GoldiloxHidden news from the BLS#1196624/7/04; 08:52:06


"Why would BLS admit there is an "estimated growth in population" and then turn around and reduce the population? While out-migration has become commonplace in Silicon Valley, this would be the first report claiming the USA is experiencing net out-migration!?! Could it be more and more people just escaping detection because they dropped out of the workforce? Or could there be political motivation?"


A good explanation of hedonic adjustments from Kevin Murtaugh posted at the PruBear site.

Druid@StevenH, Socrates964, Belgian,Clink,Topaz#1196634/7/04; 08:56:29

Druid: StevenH, awesome! On inflation and the CPI. This is the one number that CAN'T change and reflect reality because it would speed the hyperinflation process up which would create the discontinuities in markets all over the place. Ask a typical businessperson what REAL interest rates are and you get the old dear in the headlights look. Rates of return in typical business models reflecting daily business decisions are a function of this VERY WRONG assumption. And this wrong assumption propagates throughout the entire economy in a geometric fashion.

Social security benefits CANNOT take a Cost of Living Adjustment (COLA) to reflect the present day reality because all assumptions both public and private that are used to make business decisions which use this as some sort of barometer would ramp pretty darn quickly.

Now, think of the speculating crowd whose average age that won't let them think beyond the last 15 or 20 years. They've only known and understood a bull market in most things. My guess is, their interest rate risk models might on the high end reflect a rate hike of maybe 2 or 3 percentage points but not anything in comparison to the 70's or probably worse. INFLATION is the demon that must be hidden in plain sight.

I'm parroting ANDURIL and adding a few more words: Most business decisionmakers apply "flat earth static business assumptions to a round dynamic business world". From an economic standpoint, this gets into the area of a fixed vs. floating exchange rate. One allows you to actually plan for long term physical investment while the other turns you into a speculator whether you chose that behavior or not. Oh! The future financial pain.

Socrates964, would not the currencies depreciate against the metals at a much higher rate then all other physical items thus allowing the metal holder some purchasing power relative the other items? Many thanks for your past response.

Thanks all.

Take Delivery.

GoldiloxSpot and Spike have awakened - $422.3#1196644/7/04; 08:56:54

Sic 'em!
Druid@StevenH, Socrates964, Belgian,Clink,Topaz#1196654/7/04; 09:01:52

Druid: Sorry bugs, I left this out of my last post.

Man! Have you ever gone to a baseball game (or any sporting event) to watch your favorite team in action and from the initial batter till the end of the inning, there are nothing but home runs hit all over the stadium?

Hell, I'm afraid to post because I might end up hitting a single or, better yet, striking out.

BelgianSocrates#1196664/7/04; 09:43:01

IRs will remain as low as possible for as long as possible.
Low, very low, $-IRs are one of the remaining (FED) pillars on wich perceptive dollar-strength is based. Increase the $-IRs and dollar(hyper) weakness is openly admitted and fatal.

Don't make the mistake of mixing the original monetary affairs with the pure economical ones at this particular juncture in time and events.

The FED is NOT a CB as such but degradated from a monetary watchdog to an economical manipulator. The dollar-system hates the ECB for being (acting as) a real CB.

Today, I've been buying a pair of (throw away) shoes manufactured for less than a bowl of cheap rice in Vietnam, for 56 €. Is this price-infladada ? Forget everything about CPI or any other yardstick of flafladada. It is all about the "intrinsic" worthlessness of the confettis, not in the least the global dollar-currency, *used* for trade settlements.

All price-inflation is the result of the mis-management of the currency in wich trades are settled. This mis-management can be hidden in various ways, thanks to our collective stupidy (mass psychology). It is not as complicated as a majority might think, once one stops mixing up the many paradoxes.

DE-VALUE the confetti numeraire and make people feel happy !
Devalue = take away, remove the real intrinsic value, systemically. Think about the many different psychological impacts of low/high IRs on the economical attitude of 1/ creditors + 2/ debtors ! Zero IRs put both creditors and debtors on an upside down playing field.

Changing IRs (low >< high) have different consequences in different times ! What does a zero IR do to an unemployed consumer !? What does that same consumer care about rising IRs, when he/she is convinced about job-security and very visible confetti-purchasing power-depreciation !?

Indeed, €-POG=350€/ounce, is of "technical" importance. But we are NOT in a technical environment (evidence)anymore !!! We are watching "FUNDAMENTAL" changes, wich are less and less price-technically related. NOT TI but FI.
Don't bet your farm on TI, Sir.

Yeah sure, one day, IRs ($ and all other confettis) might move a bit and come closer to "explosion". They want you to see this as an economical event (result) rather than a catastrophic monetary change.

Socrates964Topaz#1196674/7/04; 10:00:43

"It's quite amusing that those good souls decrying Market manipulation on the way down find it hard to entertain the notion of meddling to the a counter to this aforementioned trend and as a temporary "stay of execution".

This is an excellent point. Unfortunately, it's hard to discuss it without being accused of being a conspiracy theorist, although I'll say the following:

In countries like Brazil, we know that basically a few key financial institutions determine who gets to be the head of the Central Bank and have major inputs into policy since almost all the credit is provided by them, and almost all of it goes into the public sector.

In the light of what happened in 1997-99 (including the enormous profits that the private banks made on shorting national currencies), one is led to the conclusion that macro imbalances are deliberately created to allow a few key players in the financial system to make huge profits on the subsequent move back to equilibrium. Hence, the whole game is an endless sequence of pulling the market out of balance and letting it snap back.

Unfortunately, after you've cashed in, you have to cash out - so you always have to line up the other side of the trade. For the really big operations, it's government and the taxpayer/pensioner. For the smaller ones, it's the outer circle of financial institutions who only ever get the crumbs from the table and are perpetual wannabees. Having worked for third-rate investment banks in my time, I can say that the head of corporate finance who has no deals on his list will do any deal to save his job.

I suspect that in gold, it's more the latter case than the former, and the reason that gold and silver are slowly going up is that the big players are gradually promoting the small players to generals of the anti-gold army while they spend less and less time on the battlefield themselves and more and more time accumulating the metal. We can observe this in that the gold shorts are becoming increasingly amateurish in their trading behavior. Indeed,IMHO, any half-way decent trader understands that you don't make a stand away from a key resistance level (so why the hell is the front line at 432???)

So let's do a thought-experiment for the sheer hell of it! And let's take GATA at their word. We have abut 1800t/yr of fabrication demand and 2500t/yr of world production, so only about 700t/yr of free bullion. Let's assume some smart investment bankers thought up the gold leasing scheme in 1996 to discredit gold, buy it cheap and sell it back into the market at a much higher price. How much gold could they actually get their hands on. Maybe half of the free bullion? So in five years, they get 2,500t if they're lucky, plus half the annual scrap of 300t, so they'd be hard placed to get much more than 3,000t over that time. Hence, unless there is lots of illegal supply that they can tap into (and the rising POG suggests that there isn't), it seems hard to get more than 3,000t through the market.

Now, let's for the sake of argument assume that GATA is correct and CB holdings are only about 15kt, instead of the advertised 30kt and all of the 15kt was sold between 1996 and the present. What can we conclude from this - an obvious point is that assuming you have the right contacts, you could buy a lot more gold from central banks than from the market, but you have to do it slowly and hence you probably have to pay out a lot of favors to politicians to keep the flow up.

Assuming you can do it, your average entry price is somewhere between 260 and 420, say 1/2 way at 340. You can never sell very much since you on't get it back and while you can make paper profits in the futures markets, these are limited since open interest is never more than a few hundred tons and you probably have expenses in getting the price down which probably means that you have to run your trading operations at break-even.

So, I ask, if this is the top of the gold market, as Prechter et al tell us it is, assuming there is this clandestine group of Wall Street buyers, then right now they are up less than 20% over 6 years and might as well not have bothered. Not exactly a stellar return is it.

If anything, they must be getting close to the end of the accumulation phase, since the physical market is very tight and CBs are not very keen to sell. How much have they accumulated? 5kt? 10kt? Who knows?

What we can say is this, however;

If we take my suggestion at face value taht it's always the same players playing the same games and look at cycles in junk bonds/tech stocks/EMs/currencies - we can usually conclude that boom-to-bust cycles last for about 5-10 years and that the high is 3-5x the low. We would then assume that these time/price parameters are determinable by the agents running the scheme and that they represent their desired investment horizons and returns.

The peak price of gold would thus come out somewhere between $750 and $1250, evidently without correction for inflation.

On a holding of 10kt of gold, this represents $100bn turned into $300bn. There can't be many players involved, can there?

Any thoughts?

Socrates964Belgian#1196684/7/04; 10:16:34

Excellent post! It just makes me nervous to see people like Berlusconi in charge. Are you sure they have no influence?
CoBra(too)Welteke to Resign?#1196694/7/04; 10:23:36

BuBa's President, Ernst Welteke said to be forced to resign today. Looks like the scandal over the new years party at the Adlon was not the only incriminating instance of accepting bribes.

That's a first for BuBa; Some people can't ever get enough!
Wonder if his successor might also be in favor of selling the banks gold? cb2

Mr GreshamSocrates & all#1196704/7/04; 10:25:37

Socrates: You take my breath away. I was going to say (reading up from the bottom) that you had rounded out my thoughts well, completing what I hadn't yet thought out. But then you went on to really fill in a LOT of scenarios for us all. Amazing! Requires a re-read later, on a very busy day.

Randy: I think you see a prime example of what the "borrowers" go after; I know we don't resent them the free information, but the dishonesty in lack of giving credit where due. If we are about honest money, then let us root out dishonesty wherever we may.

SteveH: Welcome home; very essential thoughts on CPI.

Belgian: There's always so much to catch up on when you come around -- thanks for taking time out to give us the Euro view (and your own).

Now that the gold & monetary world as a whole have absorbed and adopted the early A/FOA message about the Dollar's loss of world reserve currency status, AND our discussion group here (and the excellent groups elsewhere) has equipped itself as a body to carry on that discussion with each new turn of events, wouldn't it be a thrill to have added the NEW viewpoints of our old mentors?

They always had the ability to peek under the hood and find that loose distributor wire that had us scratching our heads in wonder. Or at least to provoke the discussion that would send us diving deeper. We were such neophytes then, and possibly too easy to impress. I wonder if they are still at the top of their game?

Socrates964Druid#1196714/7/04; 10:34:41

Will gold buy you more chickens/oil etc. in the future? Yes, I think that it probably will (I imagine you've seen Richard Russell's chart of gold vs CRB showing that the former is set to break to the upside against the latter) because it's a scarce and undervalued resource relative to chickens (but maybe I am on thin ice with regard to oil).

Without wishing to seem pedantic, however, my point was different. Namely, that under hyperinflation, the nominal prices of goods are not necessarily a guide to their relative prices. What we actually saw in Brazil was enormous (albeit cyclical) oscillations in relative prices. This generated very nice arbitrage profits for traders who were nimble enough to jump from one asset class to another on a weekly (and then daily basis). It got to the point where you more or less knew that if it was the first week of the month, you'd be in bonds, the second in stocks, the third in dollars, the fourth in gold, etc.

In the real economy, there were tremendous supply shortages since everyone wanted to buy their inputs on the last day before the periodic price increase and hold back their output until after their own prices have risen. For manufacturers, managing capacity utilization was a nightmare, and some just gave up and diverted most of their working capital to the financial markets.

An interesting point here is that the economists concluded that the root of Brazil's hyperinflation late 80s/early 90s was the government's policy of deliberately undervaluing its exchange rate, rather than excess credit creation. It's only my own opinion, but I think that China risks falling into the same trap.

Mr GreshamIt's Over#1196724/7/04; 10:42:57

"FALLUJAH, Iraq - U.S. Marines in a fierce battle for this Sunni Muslim stronghold fired rockets that hit a mosque compound filled with worshippers Wednesday, and witnesses said as many as 40 people were killed."

G: But then, I thought that Israel firing at the Church of the Nativity in Bethlehem would get people upset. However, this IS a bunch of folks (a billion of 'em) who really DO get upset.

Showing disrespect for someone's deeply-held religion is about the stupidest thing you can do. The apologies required in a situation like this are going to be costly.

Words are being had in Riyadh at this moment, I'll wager a barrel of Brent.

GoldiloxWelteke Resignation#1196734/7/04; 10:53:42

@ CoBra(too)

Who knows? Welteke's successor might be the intended purchaser of the BuBa gold! LOL

BelgianMr Gresham#1196744/7/04; 11:58:56

Sure, I would like to hear, News, from our mentors. But they have been saying/explaining it ALL, imvho of course.
It is simply happening, with a different timing and maybe some minor detail changes. At this very moment, we see how the US$-€-POGs-POOs are nicely moving in concert ! The events in Iraq are only an excuse to enhance (disturb) the ongoing fundamental trends. Again and again, the dollar-system will fight back through massive financial interventions up until the system collapses under its own overload. It is not this or that specific tension that makes the waves, but the main underlying Big steady current(s), that is (are) important.

Socrates : Berlusconi or anyone else, standing in the way (obstructing) of the main evolving trends, will be brought in line, one way or another ! I have evidence that the spirits (political wills) in Euroland are "changing" somewhat faster and that the extremely well hidden Free Gold-element will be materialized with multiple falling and rising. Modern Euroland is already pointing to new conservatism and not in the least on the financial/monetary field(s). Making 25 different states (people), converge, is not an easy task. But many do forget that this was already in the preparative mode for more than 2 decades ! At present, a million details seem (!!!) to be "incoherent" up antil something major happens that makes the previous unvisible, though existing coherence, obvious. That's how it will evolve towards the great finale of euro Free Gold. All that old (Gold) thinking can be thrown overboard, overnight.

We don't know if and who could/will/might replace Welteke. But Welteke's association with gold-talk is not another (incoherent) coincidence. Berlusconi didn't dare to join the Gold blablabla. Guess WHY the dollar wished to see the latest ECB minutes...!? How much more daily evidence do you wish to believe the ongoing fierce $-€ competition !? A fight on dead or life. Free Gold will win !

I'm trying to illustrate how different euro-thinking and acting is from the dollar-way. Simply because we have the precious in common, as Westerners. In the process, I learned how different the dollar-mentality is from the euro-way. Makes us even in our reciproke confusions.

The final cornering of the dollar goldmarket will most probably be a massive demand for instant delivery, once the euro-system feels 100% secure to break through and take over from the dollar-system. The dollar-oil-standard made its biggest mistake with its decision on Iraq. This has complicated the denouement (unraffling) of the $-€ competition. Etc...etc...

TownCrierDMR updated with NY closing report#1196754/7/04; 12:54:42

Of note:

Gold at 4-session high...

Gold now seen eyeing oil, inflation, not merely dollar's forex weakness...

Gold rise did not buoy silver, which closed slightly lower...


GoldiloxDollar-Euro-Oil and Iraq#1196764/7/04; 13:50:12

@ Belgian:

I've heard a lot of reference to $-euro-oil and Iraq, but never quite the way you just expressed it. Thanks!

For those who still don't understand the euro blocks hesitancy replaced by minimal support in the Iraq adventure, you have hit the nail on the head.

In American football. it's called PUNT and let the defense play.

GoldiloxAu - Ag close#1196774/7/04; 13:53:25

@ TC:

Sinclair noted this today, as well. He called it the unraveling of the Au-Ag switch trade.

Federal_ReservesConsumer Credit - continues to slow#1196784/7/04; 15:06:54

Credit bubble exhaustion? REFI's way down this week too. Is the average joe loaned out? If the credit bubble contracts, and we see consumers cut back on debt, and toe the expense line, the next recession has started. If so, the next recession will be caused by consumer exhaustion, even as business profit goes higher on cost cutting efforts.
Mr GreshamSir LimitUp#1196794/7/04; 15:29:26

"LimitUp (4/6/04; 10:59:58MT - msg#: 119622)
It won't be long now.
I lurk in the forest every day, very soon I will enter the Castle."

It is good you tarry awhile, but tarry nearby. Much yet to make ready in these parts.

Each day, methinks, the forest doth grow closer to the Castle. As Birnam Wood did once to Dunsinane come, usurpers to overthrow, so shall your surprise come upon them.

mikalPlagiarism Software Serendipity#1196804/7/04; 15:38:53

New software detects plagiarized passages
Wednesday, April 7, 2004
(AP) -- White-collar copycats may be less inclined to pilfer the well-chosen words of others now that software designed to ferret out plagiarism is moving out of academia and into the business world. For years, educators at colleges and universities have marshaled software tools to ensure that their students' work is original. Now, tainted by scandals or leery of the Internet's copy-enabling power, a growing number of newspapers, law firms and other businesses are using data-sifting tools that can cross-check billions of digital documents and swiftly recognize patterns in just seconds.
Unlike Google and other search engines that find matches to typed-in key words, an advanced plagiarism-detection service such as iParadigms LLC's makes a digital fingerprint of an entire document and compares it against material on the Internet and in other sources, including proprietary academic and media databases."
* * * ** * * * ** * * * ** * * *
If it's good enough for the editorial page editor and VP at the Hartford Courant, it's good enough for me.
But though "Necessity is the mother of invention" no one dare try to scan my thoughts.

Federal_ReservesPressure rising on the FED to hike#1196814/7/04; 15:57:23

Is it time to be grownups and take the recovery off the training wheels? When they do will they prick the credit bubble and induce an immediate recession, that will halt the price rises? And if they don't, will they create an even bigger inflation problem that will chop real wages in the USA and induce a spending recession. Either way they lose. Time for these bankers to earn their pay.....
USAGOLD / Centennial Precious Metals, Inc.Help is an easy click away. It is never too soon to take this first step...#1196824/7/04; 16:07:13">Change paper into gold!
TheJuniorMinerSocrates964//msg#: 119667#1196834/7/04; 17:59:05

It amazes me the stress and tension we place on gold's daily moves. No doubt the market is being played.

Your analysis of potential shenanigans in the gold market is very astute. I, probably because of the cynic that I am, have believed in market manipulation for a long time. I grew up being exposed to the stock market. There is so much money floating around in this world, some of surely can move markets with a plan or on a whim.

Gold is on the move, no matter what the reasons. Ever since $300, even most gold analysts calls have been bested. $320, $350, $380, $400, $420 have all been high end target price projections during the last few years and have been beaten. I think the idea of gold rising too much is very intimidating to most, especially Wall Street players. Those living in the Beltway, NY City or LA have, want, need a delusion that rising commodity prices mean nothing in the "big picture" and they will always fall

I follow stocks as closely as metals and I am amazed that 2 or 3 grams of gold to the ton (30,000 lbs of material to the ounce not counting a 2 for 1 waste removal) is considered a viable mine. I also know as a stockholder, that waiting for a mine come to fruition is sorta like watching paint flake off an old building. Pretty soon, if the world market wants gold, they are gonna have to pay up regardless of manipulation.

I was surprised to see an analyst on CNBC discussing ALCO's earnings yesterday say that one more quarter and things will turn down. Now either he must believe mine production to instantaneously grow to meet prices or the economy will slow. He wasn't really expecting much slower growth but he figured that it was just time for high prices to come down. I find this type of myopic analysis put to natural gas, silver, gasoline, oil, copper, ect.

Doesn't seem to be much thought in just how that stuff really gets to market.


GoldendomeHowdy Knights#1196844/7/04; 18:03:12

The yo-yo job that gold is doing now between $400. and $430 is resembling 2 years ago, when gold yo-yode for months between $300 and $330. We hope it has the same eventual result of finally tacking on the next higher hundred digit.
Great Albino BatThe people of the U.S. o A. are going to get a very costly education...#1196854/7/04; 18:48:18

Couple of days ago this bat ranted about the BIG difference between training and education. Well, the American people are set to get a very expensive education, "en masse".

The US is some 290 million people who live in a sort of garden of Eden; but that garden, that dream world, is about to fade into a very nasty place.

These 290 million people have never suffered a foreign invasion; never suffered a carpet bombing of any of their cities (like they customarily hand out to their enemies) and never suffered a hyperinflation, or even just a persistent high inflation, each of which are more destructive than the first two disasters put together.

They have no experience of these things in the "Homeland", but they will soon get this experience, and in spades. What an education! They will learn a great deal in the coming years...much more useful learning than obtainable at M.I.T. or Yale or Princeton or Harvard - or even Oxford or Cambridge, indeed!

It will be a very harsh lesson. I am reminded of the "Gods of the Copybook Headings" by Kipling, as a lesson-book.

This lack of historical understanding of the present situation is to be attributed to deficient education. This is what explains the Wall Street types so blissfully unaware of the volcano-top which they inhabit, and which is about to erupt under them. It also explains why they do not regard gold with any interest at all. But, they will learn -the hard way!

Don't wait to learn the hard way! Buy your gold now, while you can - dirt cheap as Russell says, and he is so right.


Great Albino BatMy previous post: a comment#1196864/7/04; 18:53:51

From my previous post, it might be mistakenly understood that I am predicting carpet bombing for the U.S. as well as foreign invasion.

I did not mean to write anything that might suggest that; what I am refering to as the "coming education of the U.S.A." is strictly, due to inflation, either strong or hyper variety - either one is WORSE than a foreign invasion or a carpet bombing, or both put together.

I hope that is clear. The GAB

Black BladeInteresting Week - So Far - and "Just The Beginning"!!!#1196874/7/04; 19:07:07

I have been quite busy lately and with Uncle Sam wanting a piece of my action by April 15th I may be back in "Blade Mode" soon. Heck, who knows after 3 or 4 hours in the gym and I may be "amped up" tonight.

Just a couple of quick thoughts:


"Same is happening with the perception-building on the $-POO of $100-$150 ! Watch and listen the Irish Wolf, Hugh Hendry in his (innocent) capacity of "messenger" on CNBC. Same is happening with the "association" process of GOLD and OIL !!!"

I think you may be more right than you really may think on this one. I had hoped to address this in some detail when time allowed. Maybe this weekend )who knows). $100-$150/bbl oil is not far off the mark if some current events in P&E as well as geopolitical and increasing competition for this diminishing "cheap" resource plays out as some "experts" (though in the minority - I not being one as far as the reasoning in its entirety) are concerned. I can really bring a bit more into the light after having talked to some US and Euro energy company execs in the last few days (actually one "Big Boy" this afternoon after returning a call). The "Hubbert Peak" issue is just a small part of this equation. Now that I have you "salivating" just keep tuned in here at the USAGOLD forum. What this has to do for precious metals is quite obvious. As a side note, an independent TA player (who I have some respect for even as I lean more toward FA), says that $453 Gold by year-end is a given as far as he is concerned because he sees Gold breaking through "resistence". I think it will be more than that but that is more based on FA issues including the global competitive currency devaluation, soaring budget and current account deficits and an overall commodities bull market along with many other issues having a slightly less important impact. BTW, I do "dig" your take on some of the late night issues you bring here to the forum - even at time with an "entertaining" light (very early morning for me here in the western US). Cheers to you my good man!


Current Iraqi Fighting - I also had some "interesting" conversation with some Islamic friends on the current Iraqi fighting. Apparently most of the captured non-Iraqi Shia fighters are Syrians. This brings in an "interesting" element. Most all my Iraqi friends are Shiite (though a couple are Christian and a couple are Kurds) said that their own thoughts and contacts with family and friends in Iraq are overwhelmingly "pro-American" and hope that the US military stays well beyond the turn-over of power to the new Iraqi authorities on June 30 (much the same is true of some of my Paki Islamic friends though the culture of Fuedalism and revenge dominates there as the country is really ruled by various "clans" than religion. They (my Iraqi friends and their families and friends) say that over 90% favor the US-led coalition and support the US troops fighting what they themselves are calling "terrorists". It was an "eye-opening" series of discussions for me. Apparently for them it is a matter of so many Islamic sects vying for domination of an "Iraqi Congress". It is so unfortunate that after WWI the Brits and French governments willy nilly carved up the ME into countries for their own benefit at the time.

The opposition against the US-led coalition is composed mainly of radical "Sunnis" of the Wahabi Islam faith and outside ("non-Iraqi" or foriegn Islamists terrorists) fighters mostly concentrated in the so-called "Sunni Triangle", and a few followers of minor unconventional Shia Imams (who are a small radical minority). Of course as I am in the petroleum business I get a bit of contact with several individuals of various Islamic faiths - (there are about as many Islamic sects as there are Christian sects - just for reference sake). I have some Saudi and Kuwaiti friends who are Wahabi by faith but as this is primarily a state religion and not a religion by "choice" they are Wahabi for this simple fact (especially in Saudi). They all tell me that the majority simply are Islamic (Moslem) and have little regard for the teachings of the Wahabis and regard them as not being true Islamists (the Saudis even have their own "religion police" enforcing public behavoir. The main concerns that Iraqis have that tend to be disconcerting for them is that the US reconstruction and political "change" is not happening quick enough (for whatever that means), and the lack of "jobs" which is necessary for a lasting "Democracy" - actually a "Representative Republic" assuring individual rights. Maybe they really need the assurance of a "Bill of Rights" like the US only one that is adhered to unlike the US.

I read a lot of material when I can and have free time and so I try to read material that comes from all sides so I can "get inside their head" so to speak to better understand what is happening (for example I am finishing the 2 volume set of "The Rising Sun" to better understand the thought processes from the Japanese side during the period between 1936 and the Surrender of the Japanese in August 1945 - quite "interesting" and if a better translation of the complex Japanese language and understanding of the culture then war with Japan may have even been averted with concessions beneficial for all sides). I find it rather amusing but not all that surprising that "journalists" in the visual, vocal, and print media have no clue as to what the situation in the Middle East is really like. Conservatives and Liberals do have their own agendas and yet care nothing about the realities but only to "sensationalize" the news for pandering to their client base. Oh yes, and my Islamic friends (in the US and abroad) say that they and their families are buying Gold and Silver as they can afford to accumulate it.

They do have a similar take as I do when I say (OK - admonish you): "get out of debt and stay out of debt, stash emergency cash (or precious metals) for current and future expenses, and accumulate Gold and Silver whenever possible", and start a storage program of nonperishable food and basic necessities. I usually say "for portfolio insurance" when referring to "investments", but as gains on "interest" are against Islamic law I deliberately left that part out in this post. Word is that Gold sales (buying by the ME peoples) are phenominal throughout the Middle East and in Islamic Asian regions as well. As I said, I hope to be back in "Blade Mode" soon spelling out details, news I hear from the "inside" sources in the Petroleum/Precious Metals business, mining, production, supply/demand fundamentals, and even some "rumors" (likely to very likely true to even the odd or even apparently absurd "rumors"). Meanwhile I will continue to exchange my depreciating paper currency for hard currency carrying its own intrinsic value (Hey, in the west that's what the "smart money" is doing - or "high net worth individuals"). In a word (no not "Grim" this time) - but this time just use "common sense".

- Black Blade

Off to the gym!!! (BTW, this August I will be talking to some "Top Dogs" in Houston in the petrol biz and some of my Islamic friends who may happen to be present). Meanwhile, even if your spare cash is meager then just use a small timely periodic (monthly to bi-monthly) accumation of PMs as it will build up over time and offer a modest amount of protection as a basic soldid foundation of your portfolio before speculating on more or less sound "investments". Trust me on this one. There are some changes likely in Fed policy and possibly more scandals in the equities/bonds industry (the most current one being the "Mutual Fund" scandal abusing the "small fry" for favored clients and hedge funds. Take care until next time!

Black BladeOh Yeah, One More Thing!#1196884/7/04; 19:20:40

For those of limited means searching out a slow but steady accumulation of Gold and Silver for a "Solid Foundation" I had forgot - Call 800) 869-5115 (I forget the extension but ask for the "youngster" Jonathon Kosares or Even marie for those smaller buys - yeppers, us "small fry"). For Gold IRA's or just to discuss an accumulation plan ask for George Cooper (aka Marketalk) - OK, I forget his extension too but there is a menu when you call the number (hey, even practice your German on him! ;-0 - I'll wager CB2 did by now). Heck, I'll even go out on a limb and say "bother" Mike Kosares for a "chat" or just to say hello. Nice fella and good to bounce a few ideas off of. Yeah, the other guys and gals would be fun to say hello to and get acquainted.

- Black Blade

Now definitely off to the gym and will have to boost the resistence levels higher to a more vigorous workout!

Mr GreshamBlack Blade#1196894/7/04; 22:41:48

I hear the urgency in all you mention tonight. Hurry back with a full story, but meanwhile, you have rung the alarm one more time, and believe me, it's got me hustling...
BelgianFreeGold comes marching in.....#1196904/7/04; 23:26:35

NOT only in the ME, but also in Eurasia, the US$ is increasingly percepted as an extreme unilateralist. The ambitions of the euro-currency and its concept to re-introduce FreeGold as non-monetary, universal wealth, is increasingly presented as the multi-lateral solution. A whole group of diverse nations around the Gold Wealth principle that is NOT "competing" with any confetti. This in sharp contrast with the unilateralist dollar-system, that constantly has to fight (unfree) Gold !!! The $-Gold fight of 1933...1971...and now against the euro in its vise of Gold Wealth friend.

Arabian oil, Chinese, Russians, NEVER lost the evidence of the Free Gold Wealth principle. Accumulating Physical Gold in Possession remained always VERY evident for them ! Now they are going to find out that there is an euro numeraire that stands behing THE principle and their attention is brought to the fact that the dollar-system, never stood behind Free Gold !

A/FOA : Let Gold be a "supporting reserve asset" that trades (physically) in a (real) FREE market, unlent and non-monetary so as to circumvent its manipulation (by the dollar-system and its supporters).

At present, "oil-Wealth" has more reasons than ever to support the above Gold Wealth principle ! No confetti (pound-dollar-euro-any other) can keep on calling the shots for the whole world.

Free Gold's function is to constantly devalue any and all currencies of the world in proportion to what each and every currency "really" represents on possible (proven)intrinsic value. Today, oil is devaluating the anti Gold, dollar-system, up until Free Gold remains as the only "natural" option. The "conservative" new euro is the bridge.

Today, the dollar-system is already devaluating itself through the obscene "overvaluation" of all its paper derivatives (bonds, stocks, etc). People do know the changing (rising) "prices" of everything, but have no idea of the real "values", anymore. Oil is not being "priced" anymore, but working on the reinstatement of its real, growing Value.

The main reason WHY Free Gold is proceeding at such a slow pace, is the catastrophic effects that the brutal transition, away from the dollar-system, will have on the global economy. More turmoil is at the dollar's advantage, for the time being. The more the globe is on fire, the more difficult the transition away from the dollar-reserve-system to Free Gold, is !!!

That's WHY Gold is moving so slowly towards its Freedom and Wealth definition. That's WHY any kind of T(price)I is insignificant. That's WHY the untransparent "re-distribution" of the existing goldreserves, remains confusing. That's why, imvho, Free Gold will happen, more probably with a Big Bang.

Black BladeMr. Gresham#1196914/7/04; 23:46:16

Oh my, I am so busy lately and just finished one report with two more detailed to do this weekend. When I stop in Houston in August (as a guest of a good NatGas and oil exec friend - he claims world "Hubbert Peak" in 2007) I hope to meet with a couple of petroleum E&P VPs and wish I could line up an interview or slam a couple of good ales with Matt Simmons of Simmons Intl. and Co. while "gleaning" some info on world oil and NatGas. Some "interesting" developments in the oil biz and "state secrets" on oil reserves/rsources and his info on a Clinton Energy Dept. aide who went to Saudi and discovered some unsettling news despite some later Saudi denials (actually I think it was current Gov. Bill Richards of NM).

There will also be a couple of Saudi friends as well as a Kuwaiti and Pakistani friend from my old school days in atendance. I may get some more info both good and bad about US occupation in Iraq (and maybe regional thoughts on Gold/Silver too).


- Black Blade

TownCrierOn currency and gold Japan jawbones, says "There is nothing to see here, please look elsewhere!"#1196924/8/04; 00:48:02

TOKYO, April 8 (Reuters) - Japanese Finance Minister Sadakazu Tanigaki said on Thursday [said in a speech to foreign correspondents in Tokyo] "Foreign exchange instability is harmful as we look for a route out of deflation.... In this context intervention has been useful so far."

He added, however, that there were limits to what intervention in the currency market could achieve.

...A strong yen is seen as a threat to Japan's export-driven economic recovery. It could also derail its efforts to halt a decline in consumer prices, although some believe a recent rise in commodity prices could limit the impact of a currency rise.

The yen hit a four-year high of 103.40 to the dollar late last month...

"There is no connection between our intervention policy and the U.S. presidential election," he said, adding that Japan would continue to intervene when it was necessary.

...Tanigaki said he did not think it was necessary for Japan to boost the amount of gold it holds in its external reserves.

"I'm aware of arguments about the need to diversify our foreign exchange reserves away from U.S. assets, but I don't agree with calls for us to hold more gold. Some diversification may be necessary, but I don't think Japan needs to hold more gold," he said in his speech.

-----(text from url)------

Judging from the odd size and shape of all this, FinMin Tanigaki is talking to SOMEONE. Now the question is, are they listening? (And do they like what they're hearing?)


TownCrier"There is nothing to see here..."#1196934/8/04; 01:18:10

Apparently the reporting staff at Reuters thinks likewise... at least as far as the gold comments are concerned. They have been summarily excised from the previously mentioned report, now recently updated. My previous url now automatically takes you only to the updated version.


KnallgoldSomeone wants Weltekes head#1196944/8/04; 01:46:30

"Is this the "only incident" of alleged corrupts acts by Mr. Welteke?"--Misetich

Today new accusations appeared against Welteke-some Holiday trips to Vienna (hello BraCoToo),paid by German banks.

Welteke is associated like no one else with the German Gold sale nons..ahem idea.What is worth noting:if there is the slightest sign of Welteke as the spokesmen for the Goldshort bullion bank system,or worse,ACTOR for,and is now crucified,it could signal a Gold battle going public.

TownCrierFrom the "In-Case-You-Didn't-Know Dept.": World Bank Says Russian Economy Largely Controlled by Big Business#1196954/8/04; 02:31:06

MOSCOW, April 8. 'The Russian economy is largely controlled by big business owners,' said Kristof Ruel, chief economist of the World Bank

...He emphasized that big business owners in Russia control 35% of the volume of sales of industrially produced trade items. 'We discovered that there is an especially high concentration of big business owners in the raw materials and automobiles sectors of the economy.'

------(from url)-----

Recall Monday's finalization of Norilsk Nickel's deal to acquire Anglo American's 20% stake in the world's forth largest gold miner, Gold Fields.

What additional endorsement are you waiting for?

1) You should be buying gold
2) Two plus two is four
3) Apple begins with the letter 'A'
4) You should be buying gold
... (I could continue to state the obvious, however, I shall elect not to bore you with tedium.)


TownCrierSo grows the paper gold mountain#1196964/8/04; 02:49:25

HEADLINE: State Bank of Vietnam to Pilot New Gold Trading Method

[please forgive the feeble english translation]

(April 8, 2004) -- The State Bank of Vietnam (SBV) will consider the pilot application of some new method applied to gold trading, addressed Mr. Truong Van Phuoc, Head of the Foreign Exchange Management Department...

Call option and put option, swaps or forwards will limit businesses' risk and help stabilize the domestic gold market.

Thanks to this new trading measure, gold enterprises can purchase or sell gold before the time of fever in a bid to enjoy more profit. Besides, businesses can foresee risk. Gold supply will be ensured to meet processing demand of jewelry entrepreneurs.

According to gold experts from Singaporean Standard London Bank, the above method has been widely used worldwide.

-----(from url)-----

Well, it had to be somebody... there's always got to be someone with the distinction of being the LAST person to join a Ponzi Scheme. Will it be Vietnam, or are there a few others yet remaining to be sold this shabby bill of goods?

I wonder... how exactly did the boys from Standard demonstrate to SBV that options, swaps, and forwards would ensure a (PHYSICAL!!) gold supply to "meet processing demand of jewelry entrepreneurs" at such a time of fever?

Must have been one helluva song and dance show!


BelgianDo we know enough about Japan....?#1196974/8/04; 03:02:42

I guess we do. The debtberg is as big as 120% of GDP and Japan is printing its confetti like mad. What are those enormous Japanese savings (world's N° I) "worth", against such a dismal background !? On top of this, the N°II island in global economy is facing difficulties (sabotage) in its future security (reliability) of energy imports ! Japan is (again) going to pay the price for having chosen the wrong side.

And BTW...what are these rumors that the Japanese forces might pull out of Iraq !?

Why should one (nations) have * non-monetary Gold Wealth Reserves * if one has put all its trust (and faith) in the dollar,...IMF dollar-system and its unilateral (one-sided) management...? Wakie, wakie deserve much better !!!

Nor the dollar or Gold or oil are going to "BACK" any currency !!! It's gone be your Physical Gold in your Possession that is going to say what you are really worth,...what is your real WEALTH !

Note (again) that the perceptions of rising tensions are translated in the re-enforcement of the euro-oil-Gold, rising price trends !!! Clearest evidence that the dollar (un)safe haven has been sidelined, for ever !

And on a final economical note,...hysterical "exportism" will gradually fade and conservative internal trade will come back in the forefront without abolishing the good sides of globalisation. Gold fits perfectly in such a picture.

At this very moment I do listen, again, to one of the CNBC mantras that Eurolanders do save too much and that "spending" is the holy grail ! This whilst the Anglo (UK) friend might rise its IRs again as to cool down consumerism. What a blablabladada of daily inconsistencies.

BelgianTownie has a sleepless night...?#1196984/8/04; 03:21:39

TotalFina is developping Vietnamese oil...OIL !!! No Gold, means automatically...less and heavier priced oil AND papergold commitments that will be "delivered" into,...or, yeah you know what happens !!!

Townie, I guess that with the Norilsk move (starter), Gold has a new (empowering) friend !? Why,...WHY did exactly AngloAmerican sold such a big stake in a AAA underground goldreserve (GFI) to Russian oligarchs !? Haha, let's wait for the goldbug community to come up with their speculations, if any.

Thanks Towncrier. Have some sleep...

TownCrierTo Belgian, on the CNBC mantra that Eurolanders save too much, that "spending" is the holy grail#1196994/8/04; 03:34:54

Here's a novel idea about having ones cake and eating it too -- something that should bring happiness all around.

Perhaps CNBC would be happy if the Euroland savers would rush out and SPEND their money....on gold(!!) -- thus transitioning their holdings into the new form (physical) of savings, ideal for a more level multi-lateral world order.

Maybe we could be dreamers and consider a further bonus: As the price of that gold rises to reflect a more proper recognition of its physical value, perhaps a secondary wave of "wealth effect" spending will take hold among the world's gold-holding nouveau riche to further and finally propel the global economy forward toward a more sustainable footing. Notably, many of the current gold-rich third-world nobodys now living at peasant status will be able to contribute to economic demand, as they offer up small amounts of their newly high-valued gold savings in exchange for a higher standard of living based on yet other tangible THINGS.


TownCrierB: Thanks for the advice, "Have some sleep..."#1197004/8/04; 03:54:24

Wish I could, but I vowed to Jonathan and MK that I'd finish a website project prior to calling it a day. Foolish me. These things are always deceptively more elaborate and time-consuming than I ever originally estimate them to be.

Tossing out a post or two in the wee hours of the morning might seem counter-productive, but I find that the temporary change of focus helps me to recharge my batteries and prevent a premature burnout on the task at hand.


misetichBundesbank is losing last of its mystique#1197014/8/04; 05:47:52


Against such a backdrop, this week's hospitality scandal involving Ernst Welteke, the bank's president, looks like the latest milestone on the institution's slow road towards insignificance.

"The myth of the Bundesbank has taken another blow," said Jürgen Michels, economist at Citigroup. "At stake here is no longer its influence, but its reputation in the mind of Germans and Europeans."

Bankers say Mr Welteke, a former finance minister in the state of Hesse and a political appointee in his current position, has demonstrated none of the intellectual brilliance of Karl Blessing, Karl Otto Pöhl, or Hans Tietmeyer, his predecessors.
Having lost authority, the bank also shrank physically.

Under Mr Welteke, its payroll of 14,589 was due to be cut by a quarter by 2007.

Seventy-three of its 118 regional branches have been earmarked for closure.

In ANOTHER article in FT " The board of the German Bundesbank Wednesday night asked Ernst Welteke, the central bank's president, to take an indefinite leave of absence following his involvement in a row over corporate hospitality."

Welteke for whatever reason has been on "a mission" to sell Germany's gold- offering different reason at each occasion of his preannouncements - which "coincdentally" and opportunistically were timed again and again to cap gold rallies.

Mr. Welteke has no morals - and refuses to resign - over the recently announced scandal - re whether:( Dresdner Bank sought to gain advantage when it paid a €7,661 ($8,965) hotel bill for Mr Welteke and his family two years ago.)

Is it customery for officials such as Greenspan, Welteke to have specific banks pick up the tab for their families hotel bill?

The significance of Mr. Welteke's refusal to resign and see no wrong in accepting "gifts" such as the Dresden Bank tab pickup example demonstrates his unfitness as President of a Central Bank

Under Mr. Welteke the Bunderbanks prestige is mercilessly being decimated - and being rendered irrelevant

Mr. Welteke's obsession of selling Germany's gold MUST be addressed in the context of his perception and morality -

It would be interesting to find out whether the LEASING of Germany's gold took place under Welteke's reign and his direct influence in such scheme which is leading (forcing) Germans gold to disappear (announced "sale")

The sale of "Germany's leased" gold should not be accepted as a fait complete- not just yet -

All Aboard The Gold Bull Express

CometoseTOTAL FINA to develop VIETNAM OIL#1197024/8/04; 07:55:34



CoBra(too)@ White Hills - Off topic - though it may deserve another reply ...#1197034/8/04; 08:02:57

Thank you for your response, though let me add that over the years I have addressed your "simple" question a few times.

WH: "I will only addres part of what you said by asking a simple question. Where would you be if the USA would have ignored the attack on Pearl Harbor and left Hitler Germany as ruler of all Europe? There were people even in this country that thought we shouldn't have entered WW11. You may have friends in Iran and the mideast but we don't and they are not attacking you. What has everybody so upset is that we are going after those who attacked us and those who aid and harbor them. Better to fight them now and in Iraq than later here in the USA. White Hills".

Fair enough; And I still feel we owe a great deal of todays prosperity, freedom and peace to the people of the US. Economically, we may have paid back the aid as has been put forward by the Marshall Plan. Regaining freedom in most of Europe is a debt, we'll never really be able to retire.

That said, and as the world has become much more complex than black and white, just consider that before Iran's ruling Pahlevi dynasty - although for only 2 generations, as they have also been usurpers - the country was beginning to inudtrialize and reforming to a parliamentary monarchy. As that it became the closest ally in the ME - outside Isreal of course, though that is a wholly different equation. Anyway, after the Ayatolla revolution Iran turned back to medieval times - while the majority of Iranians are starting to protest the islamic cleric regime. Almost all Westerners and in particular the US has lost its bases there and were forced to look elsewhere...

Guess, I'll better quit here as not to overstay my wellcome with off topic posts - Regards cb2

Mr. G: Some news on CoBra out recently ...

MKNews & Views#1197044/8/04; 08:26:26



German SPD Hopes Bundesbank Still Aims to Sell Gold to Fund R&D

Commodity price surge: Lost in inflation, Reuters

Japan's foreign reserves hit record high, Reuters

Dollar - gold relationship fracturing?


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USAGOLD Daily Market ReportPage Update!#1197054/8/04; 08:26:57">
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Socrates964Belgian/JM#1197064/8/04; 10:38:31

Belgian - thanks for your reply. You've probably posted on this before, but how do you see the UK fitting into your brave new world of FreeGold?

My own view is that once North Sea Oil runs out, it will go straight back to the chronic balance of payments crises of the 1960s and 70s, and given that we seem to agree on a basic thesis that a higher oil price will wreck economies with weak unbacked currencies, it seems to me that joining the Euro will be a matter of survival for the British.

You may nevertheless have seen an article in yesterday's Guardian suggesting that the only way for Tony Blair to extricate himself from the mess of Iraq was to play a 'double or quits' strategy on Europe. I.e. he pushes a Euro referendum, and if he wins, he shows up the Conservatives as being out of touch, but if he loses, the UK leaves the EU once and for all. This would evidently be an act of extraordinary political recklessness, but I wonder if Blair isn't desperate enough to do something of the kind...Any thoughts?

Junior Miner - agree. I think lots of commentators use cyclical models that have outlived their usefulness, or they just put a misleading spin on TA. A classic example of this is the current behavior of the Euro. Fib theory suggests that a high probability bull pattern is a primary thrust, a 38% retracement and another leg up. We did the primary move from 1.078 to 1.288, have done the 38.2% retracement to 1.2078 (with a minor excursion below 1.20), but are still within a bullish pattern, and yet the commentary in the media would have you believe that the Euro is falling apart. I can only ascribe it to rampant short-termism.

Belgian@Socrates....#1197074/8/04; 11:22:02

Imagine,...just imagine that the UK, under Blair or his successor could achieve (through mediation) that the US gives up (softens) its unilateral stance on Iras (and the whole ME) in favor of an Internationalist solution...!?
And resulting in the final transition of the unilateralist petro-dollar into the multipolar petro-euro !? I am never excluding miraculous turns of any kind. A lot is going to depend on the US' nov. election outcome.

I remain convinced that the dollar's occupation of Iraq has delayed the oil for euro plan.

Also bear in mind that the Euroland conservative christian democrats are making big moves (cfr. Welteke-socialist) to regain their former power and they are shifting away from their traditional alliances with their US counterparts.

UK in Euroland : imo, not a matter of Northsea oil but rather a matter of bilateral trade and the euro making it difficult for the pound in world trade. But make no mistake,...the UK is more into EMU than is openly admitted. For reason of the Anglo-American traditional ties. If and when the UK sees that its Big Brother is getting into real trouble,...official entry will be organized through artificial warming up of the general public. Exactly the opposite campaigning (pro EMU) that went on for years, now.

Things can change 180°, often overnight....>>>

Kazakstan moving its troops out of Iraq in may.... Northern alliance fights US troops in Afghanistan ...etc

mikal@Black Blade- nice job.#1197084/8/04; 11:26:52

As busy as you are, you still keep up with so many facts and so much information. Always look forward to your perspective, in the days ahead.

Do you see a shift towards alternative energy gaining significant momentum?
Hearing more about "hybrid" cars and seeing electric scooters, many long for simple choices besides walking, firewood, etc.
Do you see a resurgance in coal? Nuclear? Still politically incorrect?]
Maybe fuel cells and solar panel costs rumors correct- prices coming down.
As political solutions struggle to keep pace with expected power interruptions, obsolete and decaying infrastructure and chronic malinvestment in this field, metals, esp. gold may keep us warm in winter and the gas tanks full.

Cometose911 Commission Testimony : What it will NOT be#1197094/8/04; 11:27:42

What is it all about ?????

Terrorism / World Conflict and thereby instablity = Volatility ... Munitions Sales/ War premiums paid/ Higher oil prices // Inflation / 74 Billion $ AFGHAN HEROIN BUSINESS//Banker THEFT and Finance / Assuming the Reigns of POWER/
Lower Dollar-Debasement / Changing of the Guard in the COURT OF World Reserve Currency....World Domination.
THE path to GEOMETRICALLY Increasing your Wealth , Greed and THE LOVE OF MONEY / " NEW WORLD ORDER"
THE FRUIT : death and chains and oppression to the subjects of our new feudal lords....and GOld to insure us from the financial fall out

BelgianSoc...#1197104/8/04; 11:40:20

UK fitting into FreeGold...: The department in The City, responsible for the $-paper-gold-market, will face the Physical delivery scramble before or after the fact. And their Gold-transfers (not sales) are an indication that the City-boys have already been anticipating FreeGold's inevitability. If there is one place in the world where Gold's history (and future) is thouroughly known, is the City of London (Internationalist Intrigants). Remember when and why, the secretive LBMA went public !!!

Soc : FreeGold is not a brave new world, Sir ! Smillllllle.
Remember that 1933...London Gold pool...1971, did happen and that the world kept turning around !

Watch how the $-TPTB_ESF are turning and twisting the Golden Eastern egg & Co as to assure that nothing goes wrong up until november !!! Watch CNN subtle and soft reporting on the ongoing atrocities. That's the real brave new world and Big Brother. Can you agree Sir Soc ?

Socrates964Belgian#1197114/8/04; 12:06:36

Alright, point taken! I'm guilty of using an expression too loosely. Anyway, here is the article I was referring to. I'm merely concerned that the British may forget where their best interests lie and allow their emotions to carry them away. Indeed, I always thought that Blair's prime motivation for cozying up to Bush was his chagrin at the fact that his boyish charm didn't go very far in Brussels. Unfortunately, I don't share your optimism that British public opinion on Europe can be reversed at will although I'd be happy to be proven wrong.,2763,1188139,00.html

Cavan Man"Immediately determined"#1197124/8/04; 13:27:18

Four critical from N.M. refinery explosion

GALLUP, N.M., April 8 (UPI) -- Six people were injured, four of them critically, in an explosion and fire Thursday at a New Mexico oil refinery, state officials reported.

Investigators immediately determined the explosion at the Giant Industries Inc. refinery near Gallup was an accident and not a terrorist incident, Gov. Bill Richardson said

Cavan ManAnother "Alert"#1197134/8/04; 13:28:46

April 8, 2004, 3:10 PM EDT

PARIS -- A bomb alert prompted the evacuation Thursday evening of all stations on a train line that cuts across the French capital, as well as Metro stations connecting to it, police said.

Traffic on the RER-A line, which crosses Paris and links it to the suburbs, was interrupted at 8:15 p.m., police said. All stations, both in Paris and the suburbs, were evacuated so officers could search.

Also evacuated were subway stations that connect the underground network to the train line, the RATP public transport company said.

French authorities have been on high alert since the deadly March 11 train bombings in Madrid, Spain.

USAGOLD / Centennial Precious Metals, Inc.In bookstores it retails for $14.95, but you know the author! Get it here for only $5.95#1197144/8/04; 14:16:22

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GoldiloxArgentina Humble Pie for IMF#1197154/8/04; 14:35:35



Last September, Argentina came close to defaulting again because the IMF was playing tough to get back the money it was owed.

Nestor Kirchner was playing hardball too, and the US told the IMF to back off.

"Our point of view was that Kirchner needed time to establish his credibility," said Richard McCormack, an economist close to the Bush administration.

Another insider put it more concisely.

"This is so weird," he told me. "A generation ago, Kirchner and his buddies would have been thrown into jail for being communists. Now you have got a right-wing American government helping them stay in power.

"You see, Bush cannot afford to deal with Iraq, terror and social unrest in Latin America. He wants to see if Kirchner can make it work, see if he can produce a new kind of model for the developing world.

SteveHSo, what is wrong with this theory?#1197164/8/04; 14:44:39


Date: Thu Apr 08 2004 14:53
AURUM (Euros for oil fallacy) ID#113245:
Mogambo Guru Sez:

"...In the real world, after OPEC has sold the oil for dollars, they are then free to convert dollars into those other currencies to buy the things they want to buy. So the selling of dollars for other currencies goes on regardless of the currency they initially got for their oil.

For example, if OPEC wants to buy something from Europe that is priced in euros, all they have to do is sell some oil for dollars, and then exchange dollars for euros, and then hop on a plane to Europe and buy the damn thing. They do NOT need to price oil in euros to get the euros.

So OPEC can, and does, get that exact same basket of currencies, per barrel, after the oil sale through the expedient of merely exchanging dollars for the other currencies. So how does changing the currency-unit of the initial sale affect anything? It doesn't. Bottom line: OPEC changing the medium of exchange for the initial exchange will have no effect on the dollar. It is other things, like lack of confidence, that have an effect on the dollar..."

click here ...

Cavan ManSteveH#1197174/8/04; 15:35:25

The sheer magnitude of the transaction(s).
NedSteveH, Cavan Man#1197184/8/04; 15:50:38


Often wondered that myself. After I sell the oil I'm not stuck holding dollars forever?!

Cavan Man,

Please quantify 'sheer magnitude'. If oil sales represent 50% of dollar movement (if that's the correct word/phrase) switching to euros represents alot of dollars (abandoned/floating) contibuting further to BIG FLOAT, yes? Dollars becoming further diluted. If its smaller (5%) what does this represent?


TownCrierSteveH, it's a subtle but important difference#1197194/8/04; 15:58:31

"OPEC changing the medium of exchange for the initial exchange will have no effect on the dollar."

Wrong. I think I've covered this item before, but here it is again -- hopefully all the clearer for the practice.

Just as we know that in the marketplace for anything trading hands, there is a buyer for every sale that occurs, or a seller for every buy that occurs. You're poster might conclude from this that the price should never move. But we both know that would be incorrect. Prices do move in a market where buyers and sellers are matched man-to-man. The thing that determines whether the price goes up is which side is the initiator -- the more aggressive party to conclude his side of the trade. He is the one who bridges the bid/ask gap. Market prices on the whole move based on the relative aggregate aggressiveness of the buyers compared with the sellers.

Consider now a situation where, all other things being equal, the entire OPEC oil bill must be paid for upfront in dollars. Sure, as your poster says, OPEC may convert any number of these dollars to euros after the oil sales, but the reality of the matter is that there will always be at least a residual use for SOME amount of these dollars, so the amount of dollars OPEC would offer up for conversion at the end of the day would always be incrementally smaller than the amount of dollars that OPECs customers were bidding for at the beginning of each day.

Such as it is, with oil prices/settlement in dollars, the dollar buyers always tend to be the more aggressive deal-makers than the dollar sellers. So, simply said (assuming all other things being equal) this mechanism of dollar settlement for oil has been a tremendous longterm prop for the dollar's value against all other currency. However, if the terms of settlement were changed (while all else stayed equal), the horse would no longer be ahead of the cart and the whole operation would begin to experience that subtle but important shift in the other direction.

The fact that the dollar is drifting downward even as settlement remains in the dollars favor tells us that something else has become serious amiss in the assumed realm of "all other things being equal". It shouldn't be too hard to imagine how much worse things could get (pressuring the dollar downward) if the terms of oil settlement were changed such that the currency flows were turned around and no-one was bidding for dollars at the start of the day.

This is a very simplisticly crude example, but through that fault I think it is rendered all the better to highlight such a subtle thing as a necessary starting point in Mr. AURUM's road to redemption.


Cavan ManNed#1197204/8/04; 16:13:25

Go into the archives and review Aristotle's five part series. We're talking about a tremendous amount of $USD currency; every day, every week, every month, every year. That's a lot of horse trading (repeatedly) on exchange floors. Also, the USD/EURO ratio is not controlled by oil nations--the POO and the amount hitting the market is. So, they manage what they can manage. If Euros are wanted for your product, it is MUCH easier simply to request them in exchange for said product.
SurvivorNed, SteveH, Cavan Man, TC - Oil For Dollars#1197214/8/04; 16:14:20

Or, to put it in the kind of one-liner language that I understand:

So long as dollars are used (needed) for cash flow in the oil trade, dollars will be in demand (have value) almost regardless of their "price" and irrespective of whatever conversion may follow oil transaction.

- S

misetichFinMin Says France Must Sell Assets to Cut Debt; Eyes Gold (Bank of France says NO!)#1197224/8/04; 17:05:53


PARIS (MktNews) - French Finance Minister Nicolas Sarkozy pledged
Thursday to rein in government spending and sell public assets and
perhaps even gold reserves to reduce the deficit and debt.
Sarkozy said it "can make sense" to sell some of the state's E32
billion in gold reserves -- not to finance operating expenses but "only
for investment or to reduce the debt" -- provided there is complete
accord with the Bank of France.

BoF Governor Christian Noyer insisted last month that the central
bank remain independent in managing its reserves and said he was opposed
to sales when the issue was raised to finance research outlays.

ANOTHER shallow thinking FM ready to bite the dust -

There are no quick fixes to Global economy's maladjustments -

Zero to 2% IR have done little to spur REAL GROWTH worlwide - The recent global economic growth has been spurred by China, which has helped Japan and South East Asia.

However it remains to be seen the effects of China's growth in the world stage as excess capacity is being built and should a slowdown occur in China, deflationary winds will accelerate once again bringing ANOTHER round of currency devaluations

The US economy should benefit from the boost short term from another round of government tax cuts benefits being distributed in April - May, being nullified by price inflation especially at the gas pump and commodities.

The US $ is poised to resume its descending path very soon...

All Aboard The Gold Bull Express

GoldiloxArea's port managed record cargo#1197234/8/04; 17:15:21


The total value of cargo handled at the Port of New York and New Jersey exceeded $100 billion for the first time in 2003, up nearly 12 percent from the prior year, officials announced yesterday.

Against the backdrop of a blue-hulled container ship being loaded by massive gantries at the APM Terminal in Elizabeth, Gov. James E. McGreevey and top Port Authority of New York and New Jersey brass hailed the record numbers

"Port operations are a fundamental engine of New Jersey's economy," said McGreevey, predicting a "tripling of containers" and "doubling of jobs" at the port over the next three to four decades. "Investment in our port ... will continue."

McGreevey said investment in the port hit a record $305 million in 2003 -- with about one-third of that going to dredging operations to make the channels deeper for larger container ships. The funding also includes investments in rail operations, road improvements and heightened security efforts, the governor and Port Authority officials said.


The Good!

GoldiloxForeclosures soar#1197244/8/04; 17:15:56,1299,DRMN_414_2791017,00.html


Numbers jump 67% to 3,217 during the first quarter

By John Rebchook, Rocky Mountain News
April 8, 2004

Home foreclosures in the Denver area in the first quarter of this year soared 67 percent from the same period a year ago - a number much higher than expected.

There were 3,217 foreclosures opened by public trustee offices through March, compared with 1,928 in the first three months of last year in Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas and Jefferson counties.

It marks the biggest quarter- to-quarter percentage jump since the foreclosure crisis began about two years ago with the softening local economy.

The number of foreclosures had been projected to rise about 40 percent from last year, but foreclosure activity in March spiked by 122 percent from March 2003. There were 1,384 foreclosures filed last month, compared with 624 in March 2003.

Adams County, for example, set a one-month record in March by opening 347 foreclosures. That's only slightly fewer than the 355 it had in the first three months of 2003.

"It's the most we've ever done," in one month, said Bonny Kovtynovich, deputy public trustee for Adams County. "They just keep coming in droves."


The Bad

GoldiloxOil Rises After U.S. Forecasts Record Summer Gasoline Prices#1197254/8/04; 17:19:36


April 8 (Bloomberg) -- Crude oil futures in New York rose for a third day after the Energy Department forecast U.S. gasoline prices will increase to a record this summer.

Motorists will spend an average of $1.76 a gallon on gasoline, the department said. Rising fuel demand in the U.S. and China and efforts by the Organization of Petroleum Exporting Countries to reduce output quotas were cited as factors pushing prices higher. U.S. oil and gasoline inventories unexpectedly fell last week, the department said yesterday.

``The two Energy Department reports point to higher demand and prices in the months ahead,'' said Phil Flynn, senior energy trader for Alaron Trading Corp. in Chicago. ``We should be building gasoline supplies for the driving season and yesterday's report shows we just aren't doing it.''


And the Ugly!

BoilermakerGoldilox msg#: 119723)#1197264/8/04; 18:56:51

Let's just hope one of those containers doesn't contain a nuclear device. I'm also curious what the load factor and cargo is for outbound ships.

BoilermakerConnecting Dots for the #1197274/8/04; 20:04:37

Since Greenspan uttered "central banks stand ready to lease gold in increasing quantities should the price rise" before the House Banking Committee on July 24, 1998 I can't recall any other US official saying anything of substance about gold. A year later, Sept. 26, 1999 14 European countries signed the Washington Agreement with little or no comment by the US (as I recall). Since then there has been a constant stream of gold talk coming from European officials but little from the US. Recently the WA was extended and more chatter from Europe about big sales. Can someone explain to me why AG or other US officials haven't volunteered comments on gold leasing/sales since 1998? There must be a way to connect the dots and explain why Europe is peddling its gold and the US is (presumably) not.

My take on the European sales is that they are to cover previous leases and/or swaps. But it's hard to believe that the US hasn't leased, swapped or sold gold that will eventually need to be covered by an official sale.

But then, possibly, the US hasn't dumped its gold. That would mean it's getting ready for a new and improved $, with unpegged gold as a national asset like the Euro model. Surely AG knows what's happening, at least in the West. What is his strategy for transition from the $ we have to one that will take its place if indeed he has a strategy?
I will apprecate any guidance from the forum.

CometoseRelative GOLD#1197284/8/04; 20:41:10

Adam Hamilton has done another great article today on
the GOld Market and historical quotient he's tracked through the past three decades as a barometer for entry buy points and exit points in the History of its' rallies since the 70's.....

From looking at the tail end of the graph It looks like Gold is trading close to one of these historically quantified points now......

TopazJust a few thoughts on the Oil/ Dollar #1197294/8/04; 20:59:02

Is anyone else getting sick and tired of Media reporting these spikes in Oil/Gold/Dollar etc with specific, uncontested "reasons" for same? Gold the other day dropped "because of HUGE Russian supply overhanging the Market"...Oil rose 6% today "because of a shortage in NY".
Things are truly getting out-of-hand!

As far as Oil for Dollars go...the ONLY currency with any quasi-intrinsic worth is that which Oil trades through. The Oil Standard, which we are currently operating under. Nowadays it's the US$ holding this exorbidant privilege where, in contrast to the Gold Standard, other Countries now hold US$ "reserves" as opposed to Gold "reserves" and the value of their home Currency is basically a derivative of said $Reserves. It's this reserve currency/Oil status underpinning the US$ and allowing it to retain/obtain value in trade FAR above what we'd normally expect... ""As long as this remains the case"", expect 'ol buck (cash Cash CASH!) to defy gravity ad infinitum imho.

Socrates, I'll reply as time permits... time-zone thing, good points you made and have a Happy Easter.

knotakareBoilermaker#1197304/8/04; 21:05:48

I believe the reason the US has been so silent on gold is because the gold has been sold off and leased away and it is not coming back. This was a necessity to keep the dollar propped up during the mid to latter 90's. I also believe that the main reason gold has been sold off in the West was to accomplish regional economic transformation, such as the Euro. The sale off gold was a prerequisite for the loss of national sovereignty as part of regional economic transformation.

This is where I would differ from Belgium. I think that the goal is regional economic transformation in Europe, Asia and the Americas, and not a free gold movement. I believe the stage has been set for a Brave New World, and the loss of economic and political freedom.

The gold being sold off has been put into the strong hands of those who will never waver in their support for regional economic transformation. This is why American's gold had to be sold off; so that some political figures in the US could not retrench back into Republican government, using gold as the foundation.

I think Belgium knows this that unlike the Euro, there is NO gold backing the US dollar. It is therefore close to worthless. That's why those who now control the world's lion's share of gold will engineer the world's economic transformation. AND IT WILL BE ON THEIR TERMS, and Americans are not going to like it.

Greenspan will not speak of gold because it is gone, and he knows it is the key to future transformation. He will not draw any attention to these circumstances. The funeral procession for the US dollar is now underway, but not everyone will be alerted to the funeral march. I can hear the strains of "When the Saints Come Marching In", with Sir Allen leading the orchestration. But the Saints are not those we should put our trust in.

Great Albino BatKnotacare: your words to Boilermaker...#1197314/8/04; 23:30:41

Your interesting comments about US gold as "not there", bring to mind a newsletter from James Turk "FGMR" of long ago. (I presume all are familiar with Turk's work and wise counsels)

James Turk mentioned that a friend of his, whom he called "André", a wealthy old investor - Jewish - told him that during Lyndon Johnson's term in office, Johnson was persuaded by (?) his advisers, to punish the gold speculators - teach them a lesson - by selling gold into the market with the purpose of causing enormous losses to the speculators.

The idea was that having destroyed the speculators, the US could buy back all the gold much cheaper, further on.

The US selling began, and the pace was increased with a view to destroying the speculators. But - the speculators kept on buying!

Johnson finally called a halt to the selling. When he saw what he had done - sold off the greater part of the U.S. gold stock - he was so depressed at the enormity of the mistake, that he refused to run for a second term.

Such was "André's" story. FWIW

I seriously believe that TPTB have been acquiring as much gold as possible, these past years. They are not powerful and dumb; they are powerful because they are intelligent. And it doesn't take a wizard to see that Central Banking as we have known it, is finished - kaput, gone, el mordo.

When "democracy" is exhausted and bankrupt, VOILA! new rulers will arise, military dictators - same old, same old, and they will rely on fat treasuries replete with the gold that was being sold off these past decades.

An alternative scenario is that the gold will turn up - in the most natural place for it to turn up: in Jerusalem.

Old Marcus Tullius Cicero, back in 50 B.C. or so, said a couple of interesting things:

a. "When you talk about the Jews, lower your voice."

b. "Gold leaves Italy and flows EASTWARD, to Jerusalem."

Some things never change. So, make sure you get your share of the AU!


BillinOregonSilver#1197324/8/04; 23:42:31

I found this snippet on the Steve Quale web site:

Today, April 8th, I received a telephone call from one of my listeners in London who wanted to buy silver in the U.S. He was being told by the Royal Mint of Great Britain that they have no silver to sell anyone until at least mid-June. This phone call underscores what I have been stating on my website for so long. The fact there is no silver deliverable for 60-90 days from one of the biggest mints in the world should be the ultimate wake-up call for Americans who are still dilly-dallying not realizing the international financial crisis is just a breath away from exploding.

I would urge those of you reading this alert to meditate and ponder the ramifications of what I have just stated. The London caller also relayed something very unsettling. He stated he knows other people throughout the UK who have placed orders with the Royal Mint, yet when they check on their orders, they do not appear on any database as even having been placed. Heads up all U.S. silver buyers; your time is running out.

GoldiloxShipping increases and risks#1197334/9/04; 00:16:54


Although I'm sure the amount of goods entering NJ overwhelms the outgoing, it was heartening to see a large rise from previous outgoing numbers.

I certainly echo your hope that no WMD are entering through shipping.

As I was reading BB's post last night extolling the "support" from a majority of Iraqi's for the occupation army, I was reminded of the VietNam scenario where the people held office jobs in Diem's government by day and donned black pajamas by night. NO ONE likes being occupied by force of arms, and it doesn't escape the Iraqi people that Saddam was placed in power by the Western powers a generation ago, as were Diem and the Shah of Iran. While we are being daily bombarded by BS from Rush Limbaugh, C-SPAM, and Heckle & Jeckle, the shelling of Iraqis' is of a more tangible nature.

My ex was a Dutchwoman who lived through the bombing of the Hague, albiet as a small child, and she still had nightmares 50 years later. Memory synapses from that kind of terror do not just "go away".

This war is not going well, and the parallels to VietNam are frightening.

Belgian@Boilermaker and all#1197344/9/04; 00:57:50

Yes, I certainly am sounding like a broken record, again, when repeating that many answers (thoughts) are extensively formulated in the archives here at the unique CPM ! Use these thoughts as to interprete the ongoing actualities. Yes, this is a hard labor.

The present $-silence and €-noise about Gold-matters is the difference between the existing dollar-paper > goldmarket and the desire to develop the euro-physical > goldmarket !

Those who promote, encourage the general restitution of PHYSICAL GOLD IN POSSESSION, are presenting "control" on a plate. This is the complete opposite of the "credit" world we are living in ! A (paper)credit-world evolving to greater extremes. We acquire and consume, today, what we could never have been affording in a lifetime. Thanks to "credit" or a "paper" world.

Your and mine "papers" don't say what our "real" wealth is ! If only a tiny fraction all stockholders decide to sell their stock-paper as to exchange this (virtual-illusional wealth) for any kind of tangible...the paper-worth would crash immediately in price and purchasing power, due to the price rise of the chased tangibles, because of the sudden demand by the flood of paper.

In other words...think about the real Value of your paper at any given moment and under any possible circumstances. What is your paper "intrinsically" worth, when more and more of such paper is hysterically added !?

Some will never, ever worry or even think about this, but others who do accumulate ever more paper, do think and worry about their paper-bergs intrinsic worth.

Yep, this world masters the paper (digit) art,...ART (not science) ! This paper (digit)-system seems to work fine and we don't see any reason why we shouldn't continue to manage/engineer, more of the same...!? All paper-things will remain fine, for as long as everybody keeps on playing the same wonderful game. PAPER EXPANSION A GOGO !!!

But, there are some nasty "contrarians" out there, who don't want to play the global ($)paper-game anymore !
I wish to hold the stock of a reliable company that is relatively correctly priced in a currency that isn't depreciating permanently...I wish to hold a debt-paper (bond) that doen't spoil my sleep...
I don't wish being pushed to speculate and gamble on/with paper, simply to remain in the pack. I wish to be a conservative and not a financial pirate, stuck in the financial paper infernos. Poor me !

Boilermaker : Your question is an excellent one ! WHY does the € (Euroland) makes such a noise about GOLD !!!??? Answer : Re-study A/FOA/TG completely and find your answer in the "understanding" of the "complete" historical background and new planning of $-€-oil-gold equations ! The answer to your question cannot be formulated in an all embracing oneliner ! Same goes for the petro-dollar or euro suggestion/question.

More and more suspiscion grows that our paper-game could go up in flames because it has become unstoppable...uncontrollable. There are some BIG players who wish eggs for their paper !!! Add more paper and more people start to smell something and get worried ! If one wishes to destroy the functionning convenient is it to add massively more paper to this market as to suffocate it under its paper load ! Euro talk about Gold, means that there IS an euro-Gold-Plan !!! Get more paper-gold into the arena as to contain Gold's price, whilst the dollar is devalued and cannot compensate with real Gold wealth...THE PHYSICAL THING, SIR !!! Beware for the ongoing deceptive hypocrisies expressed by he different statements/rumors/trial balloons/water testings !

But all this is made very difficult to understand for the general public, for the simple reason that the price of Gold (not the Value) has been kept *obscenely* low and masking Gold's REAL VALUE !!! This IS the clue. We are wasting so much time and energy on guessing WHAT Gold's price actually should be. We are completely lost on this and that's WHY A/FOA is NOT understood ! But things (perceptions) are slowly changing, illustrated by euro-Gold talk and dollar-Gold silence as you correctly observed !

In the past "preparative" 2 decades to FreeGold, nobody talked about Gold, except some excentric (paper) goldbugs who continued to play the paper game. Now we start to hear some REAL Gold talk and have a glimpse of the ongoing intriges.

Happy and peaceful Eastern to all.

Mr GreshamGoldilox#1197354/9/04; 01:18:56

Your words remind me of my few experiences of hobnobbing with the "upper uppers" in the '80s when frequent flyer upgrades to 1st class were easily available. Sitting next to some top business honchos, looking DOWN on their overlapping domains under them ("I control shipping on the Mississippi", "I run 200 warehouses across the continent", etc), I saw ourselves through their eyes. Peasantry. Usable. Expendable. Complete, utter cynicism. Flying over it all in luxury was the apt physical metaphor for their view of the relation to what lay beneath.

I've usually understood the principle of a standing military -- if you're going to contravene Geo. Washington's counsel -- as Insurance, at hopefully a small percentage cost, ready to protect lives and property. Rarely to be invoked, but less costly to keep at the ready than to rebuild from scratch.

Actual implementation in our time? Profit center for influential campaign contributors, who _really_ get their "Bang for the Buck."

So, the peasantry, which probably does not really think through the "insurance" view, but assumes it somewhere in their instinctive acceptance of the military presence, still viscerally considers war to be the Last Resort. They would expect other pathways to be exhausted before they give up their children to it. They are still open to a moral absolute about its rightness or wrongness.

And, once recruited into military service or support, they look up at those jets passing overhead, and assume that their "betters" have weighed the rightness or wrongness as they themselves would, if they knew enough about the situation. This assumption will be accompanied by the innate patriotic response that would have been appropriate three paragraphs (see "insurance") above.

Not so have the politicians done, though, for in their job of sliding through grey zone after grey zone, they will echo Clausewitz' "war is the continuation of politics by other means" with its equations of acceptable losses. Losses of people who believed they were acting on moral grounds. Confused, but moral.

Eisenhower fought depression as he sent men to their deaths in a war that few question the necessity of winning. I doubt that such an expression of a heavy conscience can be found among those at the political level today who do the same delegation of death.

The parallels to Vietnam are apt. The mistaking of military violence for "simplicity" in a complex world is made again and again. It is true that the dead are greatly "simplified" in your future dealings. But they leave behind currents of unrest, on both sides of the contending borders.

Belgian@SteveH#1197364/9/04; 02:36:32

The bulk of Arabian oil was (still is) not interested in exchanging their black gold for paper, any paper ! Go to the ME (or London-City) and "observe" real Arabian life overthere. Arabian oil Wealth always wanted to consolidate "their" black Wealth with yellow Wealth !!!

It is OK for the entire world to know that 1 billion Indians are (remain) attached to Gold, but the world must completely ignore that exactly the same counts for Arabian oil. And this is so for very obvious reasons !!! Oil and the remaining reserves is the core fundamental of our global economy and prosperity. Of incredible International importance. No oil = back to the stone once !

OIL and GOLD should remain UN-ASSOCIATED !!!

Isn't it amazing that this very simple fact, isn't sinking in, by all goldbugs !!!???

Abunded Oil-confetti CANNOT be exchanged for the scarcely available Gold. Do some basic simple math on Arabian oil-revenues and the goldprice. Check out the total population of Saudi Arabia/Iran/Iraq/etc...

There is NOT enough CHEAP Gold to satisfy a fraction of the total increasing Gold demand from CHEAP oil and others, producing CHEAP products.

Evidence for Gold being "cheap" : Average production cost of the remaining underground goldreserves, pretty close to its paper-price. US Treasury Gold booked at 42$/ounce.
Evidence for "cheap" oil : Eurolanders pay 75% (soon 80%) on taxes on crude's way to the gas stations.
Asian products are so cheap that they find their way all over the globe in exchange for printed confetti.

In the epicenter of all the above, stands the dollar-paper, that is printed very cheaply. What a wonderful world, SteveH. This globalizing world even succeeds in constantly finding ever "cheaper" labor. Again under the auspices of the dollar-system. And do you (or your friend) believe that this will (can) go on for ever ? Cheap, cheaper prosperity for a minority,...for all ??? No way Sir.

And here comes Gold,...FreeGold and the new €-numeraire that will be associated with Gold.

Oil Wealth and its declining (finite) reserves, is the kind of Wealth that needs the most perfect universal Wealth consolidation tangible, ASAP !!! Not only the Gold Wealth but also the new €-currency-"numeraire" that expresses the Value of the Gold Wealth. I want to sell my black Wealth for a €-currency(system) that is my Gold Wealth's friend !!!

This change from dollar-anti-gold-system to euro-pro-gold-system cannot be achieved when oil wealth is sold in dollars and exchanged in euro. Then the dollar-anti-gold-system remains in place and my Gold Wealth goes nowhere !!!

Under the dollar-regime, Gold will remain a paper-thing in a papermarket and will never be VALUED as a real tangible Wealth in Physical form !!!

Greenspan ($) stands ready to sell Gold, whilst Duisenberg (€) stated that Gold will remain an important (understatement) reserve !!! What a different (opposite) approach to Gold Wealth for these two competing currency-systems !!! Now wich currency-system do you think those global Wealth (producers) preservers wish to support (abolish) and get establisched ??? Euro or dollar-system !?

Hope this helps to make your own opinion on what might be the outcome for Gold.

The euro-system will materialise the change from the dollar-papergold-regime to a FreeGold regime. Not the dollar, but the euro """initially""", will become as good as Gold. As soon as FreeGold is established, all currencies will operate in parralel (NOT BACKED OR COMPETING) with FreeGold.

The sole purpose is the re-establishment of the ultimate tool, GOLD, for the consolidation/preservation of WEALTH !

WEALTH that isn't altered through all times outside of your control. Wealth that can remain Wealth instead of being eroded and constantly depreciated by those that control the Wealth owners. And it is here that the euro saw its chance to take over from the dollar-regime. Not because of this dollar-regime as such, but because of its increasingly unilateral mis-management of this dollar-regime !


Belgian@Goldilox#1197374/9/04; 04:24:31

Those who are calling the Iraq occupation, as part of the WOT, a Vietnam experience is extremely misleading. This Vietnam comparaison serves many purposes and not the least, covering up what this (part of) the war is all about.

Today, Britain and France remember their "entende cordial" about the past colonial wars. The fights, between competing nations, for influence / exploitation through brutal occupation of oversea regions. Today, with the occupation of the region that hides the second biggest oilreserves, nothing seem to have changed, much.

Iraq will evolve (be modelled) into a second Israel/Palestine-model. And here you have the main reason WHY this occupation must be associated with the Vietnam experience, wich is a very poor choice. Israel doesn't wish and Internationalist (multilaterally balanced) solution ! Neither do the occupants in Iraq. This in sharp contrast with Afghanistan and the Balkan.

I conclude (right or wrong) that the whole ME problematic is nothing else than the unilateralist (not the coalition) control of the cheap oilreserves. And this is the direct link to $-€-Gold, via oil.

Germany wants to isolate the US with (within) the ME problem. There is not much else that can be done in order to solve the problem in a balanced way, as to let detoriate the situation and watch .

Does the dollar realizes that it is going to pay a very high (oil)price for quite some decades to come, after things eventually settle down ? Russia is not going to compensate for the ME-oil-retaliation in the years to come.
I don't understand WHY the US($) made such a Big mistake,...or weren't there any other choices left ??? Your thoughts ?

NedBelgian, All#1197384/9/04; 05:18:16


I am enjoying your discussions on oil wealth! Thanks.

From one of your posts:

"In other words...think about the real Value of your paper at any given moment and under any possible circumstances. What is your paper "intrinsically" worth, when more and more of such paper is hysterically added !?"

Excellent statement, pure, pure fundamentals!

My brother-in-law is coming for dinner(and all the in-laws Sunday), he and others are, of course somewhere between gold is a commodity to gold to gold is a relic! He (the brother-in-law) who is a marine bioloist, is a very logical man. A little stiff, does not sway off the 'beating trail' very far. If I was to cite your statement above he would respond with:

"In other words...think about the real Value of your gold at any given moment and under any possible circumstances. What is your gold "intrinsically" worth, when more and more of such gold is hysterically added !?"

He explains that gold is a rock (which is it), what is it "intrinsically" worth.

How would you recommend that I counter this argument?

Have a great weekend Sir!

SteveHBelgian and all#1197394/9/04; 05:59:57

The Modern Gold Standard

The high correlation of the dollar to gold, the euro to gold, and the yen to gold is undeniable. The price of gold is tied in with these currencies, admitted to or not by the above countries associated to those currencies. The actions of traders in regard to gold reconfirms daily this high correlation.

The Privateer, an Australian gold guru and newsletter publisher, made note recently that the past showed gold was rising first only in dollars, making it cheaper in other currencies. Lately, he noted that this traditional trend has now changed – gold is rising in all currencies.

This indicates that the currency traders’ control over the price of gold is waning. If futures and derivatives were the tool of the traders, then these tools appear to have lost some of their effectiveness in controlling the gold price. If the control had been to keep the price of gold low, the dollar high, then the control apparently swung from oppression to restraint, to containment. The subtle differences in control reflected the split of gold from its traditional role as a hidden guardian of dollar hegemony to a barometer of gold's split from that role.

Gold and the overlying currencies are in a state of flux. Gold and its importance to oil owners confirm its importance in world finance. Yet gold cannot bid for oil – only currencies can bid for oil. Now currencies are chasing the bid and the price of oil and gold rise in dollars and the price of gold rises in all currencies. Thus, those currencies that explicitly recognize the role of gold's value within them may enjoy any rise in the price of gold, despite a re-evaluation of gold in those currencies. Currencies that hide gold's role in their value now lose way in controlling the disassociation of value and find themselves devalued, as it were.

Any such rise in values must move slowly if a currency hopes to remain stable. Sharp swings and instability cause panic and loss of faith. These must be avoided and so we see daily currency battles, including the price of gold, exhibit marked swings and exacerbating volatility with apparently no explanations other than an underlying tension whose reasons escape most of us. These surface ripples mark the underlying currents of change. These surface undulations give us a daily snapshot into the approaching changes. We don't know exactly what the changes are, just that something is underneath and battling for province. A shadow world of undercurrents without a face or unambiguous purpose leads the race for currency domination where the winners enjoy the bid for remaining oil reserves and the losers stand to bid for the winning currency.

Yet, gold's role in all this is confirmed by high correlative values to currencies, but officially not confirmed by dollar players, despite its obvious connection. Yes, there is a gold standard of currency amongst us. Admitted to by some, mostly eschewed but always traded and controlled. This control is waning as ammunition dries up. Change is here. Stay tuned.

ToolieNed#1197404/9/04; 06:22:36

Ned, I'll try and answer your question with a question.

What is the intrinsic value of a steel tape measure, when all the other carpenters use rubber tape measures?

A couple of other thoughts.
I've found that it is much easier to bring someone around to my way of thinking when "they come up with the idea by themselves" So, if you have not tried it before, instead of arguing a point; layout facts and ask questions. Once you've made your point shut-up and watch him stew.

It works well for me.

Socrates964Ned#1197414/9/04; 07:21:15

1. In your shoes, I'd point out that gold is indeed a rock, but one in limited supply unlike infinitely expandable fiat. Furthermore it 'stands by itself' in that the gentlemen's agreement that underpins its exchangeability for other goods isn't based on coercion of the individual by the state to accept it or a hope that future taxpayers will somehow pay down a spiralling national debt (point out that this becomes less likely by the day as more and more jobs are exported from the US/Europe).

2. Point out that John Maynard Keynes, who coined the 'barbarous relic' phrase, was consulted on designing an international currency prior to Bretton Woods, and, surprise, surprise, proposed that it be gold-backed.

3. Point out that gold currency issued by the Romans has kept at least 50% of its value in weight of metal in 2000 years, while the paper dollar has lost 99% of its value in less than a century. You can quote Von Mises remark, more or less: 'Only central bankers can take a valuable commodity like paper, cover it in ink and turn it into something completely worthless'.

Belgian@Ned#1197424/9/04; 07:52:53

Yearly, 2,500 tonnes of Gold is added from mother earth to the above stash of 150,000 tonnes ! Say less than 2% per year. Compare this to the total volume of confetti and digits that are added.
2,500 tonnes x 420$/ounce = 32 1/2 BILLION (B) $
To service the total "permanent" global debtberg of 50 Trillion $ with 6% IR, adds 3 TRILLION (T) $ per year !!!

It is the paper-debtberg that says what your *supposed* Wealth is. There is only a tiny fraction (<2%) of physical precious that is added to the total of the obscenely low priced aboveground stash. Monstrously dis-proportionate with the mounting debt.

The only thing that is proportionate to debt-paper is (was)the amount of paper-gold !

LBMA went public to show the decline (!!!) in paper-gold-volume ! Simply means that the paper goldmarket is running out of steam and that there is less physical available to satisfy the "stealth" demand. The paper-gold source is running dry. That's WHY different statements are launched to encourage the doubtors to keep trading unredeemable paper-gold, because w're not yet ready (opportune moment) for the price-explosion that signals Gold's revaluation in a FreeGold market.

Greenspan was knighted, because he was the perfect "paper-man" ! He managed to let a 6,000 irrational exhuberant Dow, to double !!! Alan managed to bring IRs to a 45 year low and increased the price of the TRILLIONS of dollar-debt (bonds). Unprecedented achievements,...of grandiose mis-management (debauche).

The general public doesn't even realizes what xactly is happening and doesn't even question this. On the contrary, it is "fun",...of a macabre nature though.

And quess what, get this gigantic paper-bergs on the move again,...we simply need MUCH more paper ! Can and will be arranged, of course. That's WHY some (!!!) wish for an ideal, untouchable Wealth-Instrument ! A universal one !
And this very small group of Gold-Wealth-adepts, will get the FreeGold market it wishes on condition that there is limited disturbance on the global markets.

After one has been gathering his share of paper-wealth-illusions, wishes to "consolidate" the part of this paper stash that is not going to be "consumed" but exchanged for a transferable, everlasting tangible. Be it a real estate type of property or another valuable (art-antiques-etc). These Wealth-items are freely tradable in their physical form at permanently adjusted prices. WHY can't this be so for physical Gold !? WHY did the precious Physical-Gold-Wealth needed to be "substituted" by its managed paper-form !!!-??? Answer that question for yourself (or your brother in law) and recapitulate Gold's 7 decades of past history. Soon you will start to extrapolate this into Gold's new, modern future.

Than, again, those same stereotype load of questions will pop up, asked by the myope non-believers.

Ned, ask your brother in law, what he would prefer : 32 notes of permanent depreciating debt-dollars for one barril of his finite owned liquid black gold (oil) or 1 gram of finite (limited) permanent yellow Gold ! What's the difference between the ever changing price of something and the permanent VALUE of that same (or other) thing.

How does one "prices" the VALUE of one's health !? What is your health "worth" !?
But nevertheless, many people do gamble with their health wealth. But at a very sudden moment, they start to realize how precious health really is and you see them Valuing that health. We are gambling with our paper and jiggle with prices. We are not Valuing our prosperity anymore. We made a complete ($-debt) mess out of it.

First, hyper-inflate the artificially created paper-goldmarket, then blow it dry when the physical runs extremely short,...and then BANGGGGGGGGG, change the whole thing for the good. Your brother in law will most probably be the first one to exchange a lot of his paper-wealth for a tiny fraction of Physical Gold Wealth,...simply because he saw Gold's price exploding, without really knowing WHY ! So be it.

Our financial psychology, as lilliputan shrimps, is a very delicate one ! We are not gifted with the "anticipational" genes, as real Giants do possess. We always want "to see" first and then believe half-harted and in constant doubt.
FreeGold, is a "brave new world", Soc !
Our notion of "wealth" has become a very fickle one. We lost that "touch". We "own" very little as 100% unencumbered "property" and don't care about it as long as we can add illusional digits and consume with it. In fact, we simply want MUCH more for MUCH less ! This discrepancy has its limits,...monetary limits ! That's when "conservatism" comes back into the eternal altering cycles. Crying and shouting, spend, spend, spend,...pops up when there is no real, natural spending, possible anymore.
We have already been spending all the old and new debtbergs on credit !

Poor Welteke...was having such a nice time with his family in such a causy hotel,...paid for, with the collectivity's credit confetti. This bagatel has been inflated as a matter of (Bundesbank) unpermissable principle. I do like the conservative, moralistic tone, from the euro-corner. Sure it is a very small detail, but nevertheless not without any significance. Because it was Welteke who repeatedly talked (only talked) about Gold !

More and more diffuse Gold-Signals are heaping up and hide something that is growing, stealthly.
Have a nice Eastern weekend, Ned.

knotakareBoilermaker#1197434/9/04; 08:14:23

I think you are getting some superb resposes to your questions of last night. Belgian is really laying out the groundwork for the true realities in today's world.

I must compliment him on disussing such complex subjects , on a multitude of intricate layers that all merge together in a rational understanding of where we are going.

Belgian@SteveH#11974404/09/04; 09:14:53

The correlation between Gold and currencies you are mentionning, is the *PAPER* price of Gold that must/shall/will, correlate, for as long as Gold remains currency-associated !

It is exactly this correlation, ...this tight connection of Gold with currencies, that must be broken ! Gold,...FreeGold shall, will, must live and be traded, completely undependent from any currency-dominance. Let the traders in *PHYSICAL* FreeGold, decide what Value in what currency, Gold, PHYSICAL GOLD EXCHANGE, is worth at any given moment.

Only those who have the Physical Gold stored in their vaults, should decide how much and what currency, they are prepared to hand over their PHYSICAL !!! Correct me if I misunderstood, but I don't find this explicitely in your last post.

Paper-gold is for gold-brokers ! And it are these gold-brokers that are ruling Gold's price. This is the world upside down. It should be the "owners" of the Gold who should be in a position to correctly price the Valuable. That's FreeGold !

That's WHY the "different" FreeGold adepts must get organized with the Physical, redistributed (executable gold commitments) amongst them to overtake the paper-gold-brokers privileged, installed papergold monopoly !!!

It is the very specific "price-managements" that do move what is called illusionary "the free markets" ! It are the confetti-printers that hire the brokers to manage the prices at the printers' conveniences. Yeah, yeah, for the good of all of us, of course ! This will not change, except for Physical Gold. That's WHY Physical "Investment" Gold (bullion) is NOT taxed !!! This illustrates the extra-ordinary *significance*, Gold has. The non taxing of Gold is a compensation for suffering from the price-containment for the holders of Physical. Tradeable FreeGold (bullion) transactions will be taxed as soon as we have the FreeGold market installed.

The future forex interventions are all going to be focussed on what Physical FreeGold is saying. Gold is going to tell you how integer/credible, this or that currency will be.
WHY was (is) POG "SYSTEMICALLY" managed closely to the production cost of new Gold, whilst dollar-paper-debauche was amortisized in constant over-pricing of stockmarkets !?
This is the right angle from wich to look at these seemingly un-related events, dearest forumers. Are those Asian CBs so terribly stupid as to go on accumulating more and more of the same dollar-paper !? That's why the Japanese finance minister (dollar lackey) had to publicly denounce (Randy's posting) the usefulness of adding Gold to the reserves.

Today, we see how oil is devalueing the dollar that "was" on the oil-standard !!! And still, Japan sees no reason to exchange these dollar-reserves for goldreserves ! What a pathetic farce. This while today, Japanese see how 3 hostages are threathened to be burned alive in the oil country. Japan should better strive for the "untieing" of Gold from the dollar and join the efforts for Free oil-flow for a gold-friendly currency.

What you are seeing now, SteveH, is the euro-currency NOT supporting $-POG containment anymore !!! Basta with $-paper gold ! Avanti with euro Physical Gold ! Physical Gold as a non-currency tied, Wealth Reserve asset.

Sorry for the lengthy preaching.

ToolieMore EU type posturing?#11974504/09/04; 09:16:11

Snip: "It was a wise and clever investment move by the Central Bank because prices are now at one of their highest levels," Ihsan bu Hulaiga, Saudi econ-omist, told Gulf News.

"As you know, gold no longer has an important economic value for any country because the trend now is that the central banks prefer diverse and sophisticated investment instruments, which could be more flexible than gold….what is important now is the economic performance of any country and its reserves of hard currency."
Thanks to Caper next door.

DruidNed (4/9/04; 05:18:16MT - msg#: 119738)#11974604/09/04; 10:19:59

Druid: Ned, for your bro.-in-law: Gold=finite, paper approaches infinity. You define the value. Most scientists don't believe in magic but they participate in it everyday of their lives.
Mr GreshamThe Proof is in the Putting#11974704/09/04; 10:32:06

[The Rant of the Curious Bystander]

Or is it now in the Rice pudding, as Mike R. suggest?

1/3 the way down, are the questions still open on the ultimate in insider trading ("Yes, even from my dark cave I can reach my Datek account on my Blackberry!")

"The documented pre-Sept. 11 insider trading that occurred before the attacks involved only companies hit hard by the attacks. They include United Airlines, American Airlines, Morgan Stanley, Merrill-Lynch, Axa Reinsurance, Marsh & McLennan, Munich Reinsurance, Swiss Reinsurance, and Citigroup. ...

"It is hard to believe that they missed:

- A jump in UAL put options 90 times (not 90 percent) above normal between Sept. 6 and Sept. 10, and 285 times higher than average on the Thursday before the attack. [CBS News, Sept. 26]

- A jump in American Airlines put options 60 times (not 60 percent) above normal on the day before the attacks. [CBS News, Sept. 26]

- No similar trading occurred on any other airlines. [Bloomberg Business Report, the Institute for Counterterrorism (ICT), Herzliyya, Israel citing data from the CBOE] ...

"Not a single U.S. or foreign investigative agency has announced any arrests or developments in the investigation of these trades, the most telling evidence of foreknowledge of the attacks. This, in spite of the fact that former Security and Exchange Commission enforcement chief William McLucas told Bloomberg News that regulators would "certainly be able to track down every trade."

G: No kidding, Sherlock! I mean, did anyone show up at the betting window with their winning tickets to collect? You've got 'em coming and going!

This is really amazing to the citizen at our middling level of information. (Also glad I didn't coincidentally make any of these bets; they'd be all over me like fleas on a hound.) We know that trading records are tracked and recorded through DOZENS of computer systems.

Why would anyone think they could get away with this "wealth transfer" without investigation and discovery? Unless. Unless what? I dunno.

If it IS an ongoing investigation, how does confidentiality at this point three years later assist in uncovering the answer to the great public question: "Who knew?"

I mean, I don't lie awake nights pondering great conspiracies etc etc. I've got enough mayhem going on in my own little realm. (Don't we all?)

But this one is just so blatantly disproportionate as to information availability -- it's not some drug-addled bookie being bumped off in a Big Easy motel room. It's somebody pushing a big deal through the World Financial Trading and Clearance System, and walking away with the bag of money?

Now, Gene Hackmann could pull it off, I know. (I've seen 'im do it.) But hardly anyone else.

[Rant mode OFF]

GoldiloxGold vs. paper#11974804/09/04; 10:42:12

@ Ned:

One more thought. Gold has retained value for thousands of years, and more importantly throughout regime and empire changes. Name one "paper" money that's done that.

Great Albino BatNed - your question provoked a lot of answers!#11974904/09/04; 11:12:08

Here's mine:

Just pull out a Maple, an Eagle, or a Krugerrand 1 oz. pure gold coin while you are at the dinner table, and hand it to the ladies present. Then ask them, "You like this ROCK?"

And remember, "Learn to suffer fools gladly." Those who spurn saving in gold, will have their reward.

If we are anxious to prove them wrong, this reveals that we are not too sure, about what we know. "Cast not your pearls before swine, lest they turn and rend you."

I watched my friends decline into penury during the last thirty years. I don't talk about gold to them anymore. Why rub it in?


GoldiloxMarket Topping?#11975004/09/04; 11:15:57


Of the last three presidential election cycles, the market went lower in two of them. Greenspan was the Fed Chairman through the last three presidential election cycles, yet the market went down during the 2000 election, which resulted in George W. Bush in office. The stock market also went down during the 1992 campaign to try to reelect George Bush senior. Senior was defeated and Bill Clinton took his first term in 1993. The market rallied in the 1996 election year when Bill Clinton defeated republican Bob Dole. So is there a Greenspan Put now? The charts do not support that there is a Greenspan Put. Yet why does the Greenspan Put seem to be on everybody's lips? And why does it seem that everyone is thinking the same thing at the same time?

In the absence of technical evidence of a Greenspan Put, I've also heard it conjectured that Greenspan has some incentive to get George W. Bush reelected, because he failed to help get George Senior reelected in 1992. Alan Greenspan is 78 years old. Although the man appears to be very fit for his age, it is difficult for me to believe that reelecting George W. Bush is an important agenda item for Alan Greenspan at this time in his life.


In yesterday's Market Wrap, Marty Goldberg discusses the rumors of a "Greenspan Put". He also mentions that two of the last three election years delivered lower markets.

I submit that although a "real" put might not be in play, Greenspam's constant TV coverage equates to run for an Oscar or perhaps, an Emmy. I suspect he's seeking an award for "Best Supporting Actor" in a "made for TV tragedy".

goldquestGreenspan#11975104/09/04; 11:24:50

Might help to get Bush elected to a second term, but not re-elected. The U S Supreme court chose Bush to fill the White House, the first term.
Belgian@Toolie#11975204/09/04; 11:47:46

Great Gulf news, indeed Sir !

...combined Arab gold reserves are 600 tonnes (Libanon holding 270 tonnes out of this total of 600)...

How come, Iran repatriated 400 tonnes from London last year ?


Solomon WeaverWhat should Ned tell a marine biologist?#11975304/09/04; 11:53:12


I have some friends (married couple) who are "geologists" even works for the USGS! Since I have a couple accounts where I hold "PM stocks", and I have my wife in some of the same ones...I always get multiple annual reports from a couple of my top tier companies. Back when gold was at about $260 and silver near $4 I gave them spare copies of two reports and said these were excellent companies to be in...both are mainstream large cap plays...not silver, one gold.

Anyway, they had both been burned in the NASDAQ selloff and didn't take my advice.....but when a saw them a couple of weeks ago, at least the wife told me she was now kicking herself in the butt....

. . . .

On to you....

What is the intrinsic value of gold????

Turn the argument on him......what is the intrinsic value of a pile of $100 dollar it any more than the same number of $1 dollar bills? gold is a commodity. Fine, if you wanted to invest in oil or natural gas, how could you store that commodity in your safe? Your brother in law could order $25,000 worth of gold coins from USAGOLD and it would arrive in an ENVELOPE (or maybe a very small box)....have your brother in law tell you about any other non-precious metal commodity which fits this (other than cocaine or diamonds).

Now, one of the intrinsic VALUES of gold, is that when you hold it as an asset, its value is not simultaneously a liability of someone else.

Cash dollars (not bank cash deposits) are close, but their purchasing power over time is dependant on the government and central bank of the country. We all know that cash under that mattress for 10-20 is a surefire method to lose to the tide of inflation.

Land, houses, cars, boats, private jets, heavy equipment, things like this, if fully paid up, also represent assets that are not someone elses liability. But, particularly in bad times, they may not be very liquid...meaning not easy to sell at a price that you think is fair.

Bank deposits are secured by is really strange when you think of it, but the "assets" held by banks now are mainly various forms of debt...treasuries, mortgage securities, etc. If Americans stopped paying their credit card bills, mortgages, etc. then many of these "assets" can quickly lose value. There are already a growing number of Americans in this category.

Now, we should not expect a marine biologist to understand that a $1000 face value municipal bond could trade at $100, if the city who had issued them was in severe default.

Instead of just talkin about gold....try this one. If Americans (families, companies, city, county, state, and fed governments are all piling on more debt, so, mathematically the risk of individual default rises, why is the credit industry willing to loan them money at lower interest rates, which usually are reserved for more "credit worthy" borrowers.

Ask your dicussion partners if they have CDs....and if they know that savers today are given interest rates so low that they a well below inflation. Here's a good example, a 70 year old retired couple in good health with a millon dollars put in conservative fixed income funds a couple of years ago could have taken $40-50,000 of interest out of their, they either get only about $10,000, or they need to put their money into riskier investments. Had the same couple had half of their savings in gold, they would have been in better shape as savers...and this is regardless of the "price they paid" for gold. People just don't understand that gold is a "conservative savings" that performs well in environments where aggregate credit and cash risks are higher.

Stock asset values are the liability of the management. Also, if a lot of stock is held on margin, then in a bad market, when holders of loosing stocks need to meet margin, they often sell other good use of margin hardly implies large cash reserves.

Another thing to consider. Downside risk. The lowest price that gold (or silver) can reach is usually correlated with the costs of getting gold (or silver) out of the ground and refining it. As very rough numbers, your brother in law can get gold at about $425 now, and at worst, it could fall back to $200 or so....and if it did, it would come back...all on its own. Compare this to Loral Communications, a real nice satellite manufacturer who had billions of dollars worth of back orders, and now trades at a few pennies, as the world of telecom suddenly collapsed.

Another perception that some people have with gold is that if you buy gold you are not "doing anything with your money"...versus having your money in a fund where it earns some interest, or is invested by managers..etc. Well, that is exactly the is a way to hold money that does not require you to place it in the hands of someone gold you are not doing anything with your money...but neither is anyone else. Since a fool and his money are soon parted, a fool and your money can also be soon parted.

People all over the world, who have experienced much worse governments than we have, see the value of even a small gold stash.

Since most Americans are locked into thinking of the value of things in some number of dollars, they will always think of gold as "worth a certain number of dollars" and that if the "dollar price of gold" is not rising, then gold is a not a good "investment". So, here is an interesting take on the situation:

A one ounce gold coin represents a non-expiring option, to at any time, purchase an amount of fiat currency equal to the market price of one ounce of gold. The option does not expire, it can be exercised in any fiat you choose, and even supercedes the total destruction of the fiat you now trade in. It may be handed to your children and grandchildren and exercised at any time in their lives.
If you own the coin, you may mentally "mark value to market" at any time, but it only expresses its value when you excercise the option of selling it. This is what Another and Aristotle mean by "free gold"...not that gold is used directly as money...but that it trades freely as non-expiring options to purchase fiat, with which you may then trade for something you need.

Ned, most logical people, who are interested in preserving a small amount of their savings in tough times, will see that gold or silver can serve that function.....and we just happen to live in times when gold and silver are available at price discounts to their historical value, The funny thing is that most people will wait until late in the gold/silver bull and be drawn in because they think it is a place to "make money". For example, a friend of mine who believes that you can only lose money in silver has 4 100 ounce silver bars in his closet that he bought at about $40/oz in the Hunt days (20+years ago)...if you adjust $40 for inflation, and adjust for the interest he could have from a CD over that time, he has an opportunity cost of more than $100 per ounce.

Best wishes for Sunday dinner.

Poor old Solomon

Solomon WeaverGold is a Rock#11975404/09/04; 11:57:56

We all know the little hand game...paper rock scissors.

It accurately reflects the situation we are in today..

Paper (COMEX) smothers rock (GOLD).

Scissors (Debasement/inflation) cuts paper.

Rock (Gold) crushes scissors (inflation).


USAGOLD / Centennial Precious Metals, Inc.Always Open! Buy peace of mind, 24/7.#1197554/9/04; 16:42:35">gold -- a global calling card
SmeagolAch! Tax It? you mean, tax IT???#1197564/9/04; 18:55:54

Belgian (Posst #119174)... "...The non taxing of Gold is a compensation for suffering from the price-containment for the holders of Physical. Tradeable FreeGold (bullion) transactions will be taxed as soon as we have the FreeGold market installed."...


...sss... In the coming Brave Golden World will remain the problem of Powers That Be that desire to control It rather than let It be what It is, but we guesses this is true of most things of concentrated and enduring value...

How can It perform its function as 'Free-gold' if it is taxed? We've seen, yess, too many timeses, how Men's behavior is 'modified' by taxes. They tend to trade/use LESS of the thing taxed and demand and value of the thing goes DOWN, especially if the tax is high. Tax It too much, and It WON'T be, Free-gold.

...hmmm... will this be the method of Gold-manipulation by the Powers after the gold-paper bonfire? Tell us of little worth, precious, what is the difference between It controlled by paper, or by taxes?


AristotleThe greatest day#1197574/9/04; 19:46:16

I'll keep this short 'cause I don't wanna muck things up with my own brand of privately-simmering rancor. Just wanted to observe publically that this day will probably go down in history as the greatest single day among our friends here.

It's no exaggeration to say it's an unrivaled pleasure for me to be able to linger amongst this exceptionally *exceptionally* luminous group. Thanks mightily to all of you -- and of course special thanks to Centennial for the USAGOLD forum!!

Gold. Get you some. --- Aristotle

PS. (RE: msg#: 119756)
Of course It will eventually be taxed! Other than the rare case for Gold right now, what thing of any value isn't taxed upon sale???! But if that thought troubles you, you aren't thinking deep enough. Try this... think about all *all* AAAALLLLL the cumulative effort of decades that have gone into the necessary *NECESSARY* freeing of Gold. Do you *really* think, even for just a moment, that AAALLLL of that freeing effort will be so readily squandered away with a prohibitive level of "controling" taxation?

Okay, OK, Ok,,,, if you are a cynic and say 'yes' then I'll beg you to look at it another way and further encourage you on your own to explore ALL ways that you must also look at it.

Taxation can be imposed with varying goals in mind by the taxing authority. One could be to generate revenue for the government, and another other could be to serve as the internal equivalent to a "trade-barrier" tariff sorta thing. Either way, think about the (in)efficiency of the taxman, especially on things that avail themselves so easily to hand-to-hand cash sales. The more prohibitively higher the attempted taxation, the more the underground/black market thrives to circumvent the obstacles.

Now add this bit into the equation. Gold on the world stage will flow most fluidly to where it's wanted and welcome. In countries where the internal "tariff" on its purchase is prohibitively high, you can surely bet that its publicly traded supply there will dry up, thus balancing the equation and as easily justifying the high and higher prices in terms of that currency.

Doesn't that mostly put to bed what you were afraid of to begin with -- that our elected officials could wield taxation authority as a new weapon to control Gold's *PRICE*?

I think it is not something to be worried about. If by hook or by crook we cannot figure out what price in dollars for Gold best represents the value of each (i.e., of both the Gold AND the Dollars) I'm sure there will be plenty of folks around the world who will have a functioning, less-oppressed market to show us what they're worth!

Alright, I'll try this again...

Gold. Get you some. --- Aristotle

mikalFriday Headline Capsule #11975804/09/04; 21:41:41

Consumer Confidence Sinks in U.S. - AP [Well, we'll just have to do something about that, if it's not too late. Let's see, what haven't we tried? 6-11?]
Gas Prices Forecast to Hit Record Highs in U.S. This Summer - LA Times [I've been saying that for YEARS. Could it be I'll be right this time?]
IEA Increases Oil-Demand Forecast for Sixth Month - Bloomberg [Better late than never boys]
Mortgage rates keep rising, highest since January - USAT [ANOTHER thing we'll have to get down to work on in a big way, if it's not too...]
$80bn Pension Bill Is Approved by the Senate - FT [Don't say we never give you your cut of the bargain]
SEC Wants Hedge Funds in Open- WSJ [We'll never open your pandora's box, while you're vacationing in Fiji and the Caymans]
High fuel prices putting squeeze on transporters - Chi. Trib [Is that how they shake down those mariners?]
As Prices Rise in China, Signs of Inflation - NY Times [1 +1 = 2]
Bank of Japan Raises Assessment of Economy in April - Bloomberg [That's almost enough fattening up, too much and she'll burst before we get to the slaughterhouse...]
Bond traders perceive ECB rate cut by June - FT [We'll never tell you where OUR traders are positioned]
Japan Stocks Sink on Iraq Kidnapping - Reuters
Bundesbank's interim chief unlikely to push for ECB rate cut - AFP [Keep 'em guessin and gun up the revenues!]

SmeagolMuck away, Sir Ari!#11975904/09/04; 22:22:36

Firsst, Sir Aristotle, we mosst heartily seconds your Statement concerning lingering (and the likes us being allowed to sneak- er, linger), in this FINESST of castles! Nowhere can one see so many views from the windows of so many great minds. [standing up and clapping]

"Do you *really* think, even for just a moment, that AAALLLL of that freeing effort will be so readily squandered away with a prohibitive level of "controling" taxation?"

Let us assk you this... are the Powers good at squandering and hindering, or not, eh? [GRIN] (you don't have to answer that)

We thought about it and you are right, It will take the paths of least resistance when taxed....we had not considered ALL, and were seeing red when taxes were mentioned, and we will be more careful. A SMALL sales tax is one thing, and Smeagol has no problem with that; we were thinking of an eventual 'by international agreement' tax that might somehow be proposed, to take advantage of It yet one more time...

sssigh... yess, we ARE cynical... AND hopeful, both. Smeagol wants a Golden future like we're sure the resst of us want, we jusst has a hard time seeing it happening the way we'd all LIKE to see it happen, looking at the record of behavior of the Powers in the passt and present.


[lifting a mug] To the Hosts of this Table, its Knights and Ladies, a Golden future, and Its Silver lining.

Belgian@Smeagol#11976004/10/04; 00:07:50

Point is that, today silver is taxed with 25% VAT and nada on bullion ! I'm repeating this, for the simple reason that all goldphiles overhere, should interprete this as indirect evidence for Gold's special treatment by those who have been and still are "constructing" a wonderful future for the precious wealth.

Gold Wealth taxing only when one "trades" his/her wealth for paper derivatives and decided then to transfer his/her wealth to another carrier. Once you decided to take distance from your Gold wealth, you entered the paper world, and it is this act that falls under taxing. Holding the wealth intact in possession, will not be taxed !!! Emphasizes the real notion of Gold ownership/property.

Today one is *taxless* invited to come into the world of Gold Wealth (contrasting with any other metal-silver) and one will remain untaxed (uncontrolled) as long as one remains in/with his Gold wealth.

Once you decided to go back to the paper-world, you agree again to be controlled.

Your Gold Wealth, wich will keep its purchasing power permanently under the FreeGold regime, will not be taxed for that real wealth principle, again on condition that you stay with your real Wealth property.

Are you critical because this seems too good to be true ? Then I can tell you that it is the euro-view on Gold as Wealth. There was one little moment, 20 years ago, that banks tried to paperize Gold for individuals...but that was quickly abolished !!! Clear evidence for me that A/FOA's interpretations of Gold's 3 decades history are proven correct.

FreeGold IS on its way ! Thanks to the ECB/BIS. Don't look on the web for indicative revelations, about this. Will not find any. Help us "thinking" with an as open mind as possible, all together, here.

SteveHBelgian and all#1197614/10/04; 06:10:04

Paper Gold

What allows the "traders" of gold to use paper to control the price of gold is likely that they control enough physical gold to deliver on the paper-converted gold. This conversion of physical to paper may be what we witness when country x sells off "xx" tons of reserves. Since most of the transactions are non-transparent anyway, this conversion may be illusory or not. We recall the big LBMA disclosures of a few years ago? The volumes traded daily exceeded annual supply, if memory serves. This proved that the market was skewed to paper and served as a pricing mechanism for the physical.

Sufficient control by paper traders over future supply and actual physical supply locked in assurances of price control, in the near term. Large hedge books of large miners demonstrated this future-locked-in-price-of-delivery at low prices.

Now the tables on hedging have turned towards an upward price swing. Miners stuck with large hedge books counting on lowered future gold prices nearly lost their fortunes. This sent a signal that hedging bets on future lower prices was the wrong end of the trade. Yet, the only demonstrable lesson from this is that gold is so important that it 1) trade in the shadows and 2) be controlled for assured stability of currencies, 3) price of gold must be contained relative to the mixed basket of currencies, at all costs (to those whose interest it is to do so), and 4) controlling large quantities of future production was essential to price control. That some mining companies were hedged as far out as ten years of production at low prices is proof that such control was sought after. As far as what entities, persons, companies, or countries were involved in such acts remains mostly illusory. That so much energy be given to these acts points to the acts relative importance, but it doesn't say whose energy it was. That BRE-X, a gold stock that went from pennies to hundreds of dollars per share on property that was seeded with gold, was the largest stock swindle that pre-dated any later Enron-like scandals also appears in hindsight to be no coincidence.

When Another (a mysterious poster of a few years ago at several gold discussion forums on the Internet) stated that to own physical gold and walk in the footsteps of giants, he was referring to the mysterious group above (the giants) who devoted huge time and money in the gold trade. From his or her postings we were shown the LBMA volumes, a look at the oil and gold relationship, the Euro as a planned replacement for the dollar as a reserve currency. He alluded to the dwindling supply of oil and the importance of holding gold in place of dollars and to replace the spent oil. He guided his readers with hints that physical gold ownership would be the only safe-bet after certain longer-term events played out. He suggested that these events would essentially be the desolation of the paper gold markets. The mysteriousness and illusory postings of Another and then later with the Friend of Another (FOA) gave them a certain greater-than-life aura.

Shrouding all this was the idea that we felt we were sharing in a greater-than-life discovery or revelation that great change was in the wind. While others were touting internet stocks in the great 20th century bubble, readers here and elsewhere on the Internet forums were following a thread that showed us a different future – a behind the scene look at Euro and gold and much more. That these two posters (A and FOA) disappeared relatively shortly after their entrance made the revelations even more stimulating – it also raised questions as to who these two persons were. In some peoples mind, it also raised questions as to what involvement they had with later world events and a look at Achilles heals of various institutions and systems.

Nonetheless, as one poster suggested for physical gold to rise in price it must be separated from the currencies holding it back. As the Privateer, the gold newsletter site at, pointed out, this separation is now evident, albeit in its infancy. And rise, gold has. It went from a low of $252 a few years ago, to now trading in the $400 per ounce. Yet, for a long time it stayed below $300 per ounce, even during the discussions with Another and FOA. The lesson here appears to be though, that the small-time physical gold holder, although cornering their small holdings of gold and removing that piece of gold's market share from the physical market, is still a drop in the bucket to the giants and their agendas. The gold market remains in the hands of the paper traders but we do see weakness in these hands. We also see a split in which sides of the business are winning out. For now, the price of gold rises. From the sideline it appears that events are unfolding just as Another and FOA alluded to, not just in the timeline they suggested. The gold market machinations, if anything, prove to be a slow but interesting revelation of a system in flux. Where we are in five years is anybodies guess but gold and world events are inexorably intertwined. We are clearly on a gold standard. Admitted to or not by the Giants or their minions.

Topaz@ Toolie All ...the best ProGold in possession post I've read lately.#1197624/10/04; 06:21:12

"As you know, gold no longer has an important economic value for any country because the trend now is that the central banks prefer diverse and sophisticated investment instruments, which could be more flexible than gold….what is important now is the economic performance of any country and its reserves of hard currency."

Finally we are beginning to see some light. The Saud economist has disassociated Gold from it's "economic" function and if pressed MAY have acknowledged a grander/ higher role for the Yellow Metal as an untainted Wealth Asset par excellance.

On a more mundane note, the Chart above depicts a tight correlation between Oil/Dollar these past 3 Mth's and just one "click" away, the "Monthly" picture reveals no such correlation.... ANOTHER sign of the times Belgian.
In view of many pundits predictions for Oil in the 50-100 range, and if this current trend is held intact (read Ari's "Oil shock" offerings), a MUCH higher DX could be anticipated.

Wither Gold? Those with Physical in Possession could care less!

da2gBelgian: Silver Tax#1197634/10/04; 07:27:22

Belgian, in the USA, to the best of my knowledge, there is no tax on a "like kind" trade. For example, I can trade my silver for gold with no tax consequence, and back again. I am not liable for tax until I cash out the metal for dollars, or reenter the paper world.

If one were to look into a crystal ball a few years ago, it would have been advantageous to hold exclusively platinum, then trade this for silver, and then trade the silver for gold. One would end up holding far more gold with the same amount of original paper. Perhaps some giants with foresight have done just that?

TopazThe Monthly Oil/Dollar Chart doesn't function every time....#1197644/10/04; 07:44:27, let's expand on this counter-trending situation we're witnessing.
It appears that, while Oil trades in an acceptable $24-28 band, the Dollar has the freedom to address anomalies in the economy as best it can (and of late that's been DX down). Now, as Oil drives higher, Those Oil dependant entities with short-med-long dated T's etc could be tempted...nay forced to move these assets to those of a more immediate nature as more producers opt for Spot trading.
If we witness too many 6% updays in the Oil pits, Futures/Bonds ALL will feel the pressure.
But then again, perhaps our Saudi economist friend and his sophisticated financial instruments will find a way of overcoming this predicament!

BelgianSteveH >>>...we are clearly on a gold standard...#1197654/10/04; 08:58:45

No Sir, we are NOT on a gold standard...and never, ever will be ! Forgive me for not going into this theoretical/academic topic. Let us stay (analyse) with what we experience, today :

Gulf news on Arabian gold reserves (Toolie) : Marvellous example of what is (only recently) percepted as "Gold-control". A type of evolutionary control that is confounded with a perceptive kind of gold-standard. The populace had to be taken away,...disconnected from the natural, historical, stubborn Gold-reflex ! Kind of evolution from save, save, save, spend, spend, spend. This very simple phrase is in fact saying it all in a nutshell.

This boils down to "de-responsabilization" of the individual. We were all transformed into different forms of collectivists. Here comes ultra-conservatism as the normal cyclic reaction. Cfr. the fall of 70 yrs of communism.

Much, if not all, of the Giants' Gold (Arabian/Asian/others) is "Private Gold" !!! Responsible, conservative, personal Wealth.

The "official" and more or less, visible part of the Gold Wealth, is "maneuvering" Gold.

What if,...these UAE gold reserves, "maneuvered" into a,...allocated into "special" BIS-accounts/placements, instead of being "privatized" (jewelry) !? Don't exclude this (BIS) possibility or else, explain me why Saudi Arabia is a BIS-member.

The relative visible CB-Gold is untransparently maneuvered into Another position (system). The BIS is NOW having its hand on the Gold-valve and is increasingly controlling the gold-contract filling flow at "her" convenience. Do you spot some publicly trade (quoted) BIS shares ?

Most probably, the general public is associating this as gold-control and conclude on a gold-standard. IMVHO, it is here that most observers are missing the point. They cannot see or don't even can suspect, the idea of FreeGold.

That's WHY this Gulf article is for. FreeGold is desired by those naughty naughties, who wish to anticipate, *** discretely ***, the demise of the dollar reserve system.

At a time when most, if not all, remain dollar-centric. Always buy a (golden) umbrella in mid-summer is their motto !

Indeed, the UAE-CB is extremely smart,...even much smarter than the (ghost)writer of the Gold-ridiculing article.

SteveH, we are indeed talking about the political Gold game ! Do not exclude a sudden Gold Default in the existing paper-market. But think WHO will force this market into default and WHY ! It will be induced by those who don't see enough reasons anymore to keep supporting the dollar-system.

All *control* is always extremely relative ! Why isn't that same ghost-writer NOT commenting on the Gold-attitude of the Lebanese CB, holding a relatively enormous amount of gold reserves (270 tonnes) !? Remember that the dollar-faction already tried to lure (vainly) Lebanese Gold into their camp ! And is it a coincidence that the UAE has oil and Libanon has not !?

Modern goldbugs (not goldweasels) should analyse in dept and afterwards, neutralise, the articles that denigrate Real Gold Wealth.

We don't want any kind of imposed "standardisation" of Gold. We want FreeGold ! Can you agree on this ?

Smeagolthat vexing Gold taxing#1197664/10/04; 09:10:22

Sir Aristotle...sss... well, we thought... and thought ssome more... and then we went to bed and sslept on the issue and possibilities and implications of taxing, and taxing It, and we didn't ssleep well, no precious not at all... sssigh... we musst take back a previous statement about a ssmall sales tax on It being okay, and we may rissk some wrath but this is what we say. No matter how you sslice it, or how small it is or what is intended by its imposition, to tax something is to have a control on it, to taint it with an outside influence, and depending on how it is done the control can be very ssubtle indeed. Gold that is taxed on its wealth preservation or trade purpose is not free, just as Men that are taxed for the fruits of the labors of their own hands are not free, even though they think so...

Worsst case - if It was taxed or tariffed to the point of flowing in the background (black market), would this not tarnish Its reputation? Would this not hide It from the view we seek of It in the future? And would that 'illegitimate' trade then result in calls for more direct methods of control? Ssss... a sslippery slope indeed! Then again, If It (and silver perhaps?) was not taxed, AT ALL, would It not become most desirable? Would It not become THE preferred wealth savings? And would it not become THE preferred medium of exchange? "Oh, by the way, if you pay in Gold, there is no tax.".

O yess, Sir Belgian... Smeagol is critical. And skeptical. And cynical. (grin) We don't buy Papergold and we'll believe Freegold when we see it. Thank you for Possting a clarification that physical Gold would not be taxed. If you'd said that lasst night, wed' have sslept much easier!

It's not Freegold if there are ANY strings attached.


Gold. Getting us some.

Belgian@da2g#1197674/10/04; 09:53:57

I don't know about wich kind of (official-?) silver/gold (*barter*) trade you are referring to, Sir !?
In Euroland, officially bartering anything against (Bullion) Gold, always goes via the paper-confetti-transition. Any kind of silver we are holding or eventually bartering, has always been taxed with 25% VAT.

Why should Giants barter (exchange) physical holdings of silver/platinum for Gold the metal ? Any metal in physical form has an intrinsic (market)(rest)value and price. I want to get rid of my worthless paper and by preference after having speculated successfully with it, WHILST PHYSICAL GOLD CAN BE ACCUMULATED *CHEAPLY* IN EXCHANGE FOR THE INTRINSICLY WORTHLESS PAPER.

It always comes down to the same thing : What is the real "worth" of any tangible !? Has its price been moved (changed) by the paper-brokers or by those who trade the tangible in its physical form !?

FreeGold is the process of untieing Gold from its paper-association and making it (GOLD) autonomous. FreeGold, always, exactly telling its owner what his/her real universal WEALTH is, regardless of the paper-brokers who might try to move the prices as organisers of the casino, bookmakers taking the bets.

Silver is a nice industrial metal (like any other commodity) for me as an Eurolander, with no wealth attachments of any kind, anymore. But that's another debate of course.

Those Asian/oil/other giants also know very well that the established and proliferating paper-casino(s) do come, have their hay days, and go (cool down). FreeGold comes out of the period of exhuberant dollar-euphoria, having caused financial/monetary (debt)debauche. The euro-system wants to offer the FreeGold refuge without causing too much collateral dollar-damage.

But I'm drifting away from your barter-thing, Sir...
Hyper-price-infladada, will certainly be compensated by real tangibles. FREEGOLD will outrun everything. Otherwise I wasn't here, to develop my thoughts with other forumers.

Conclusion : get rid of everything that makes you doubt about its intrinsic value and consider GOLD'S probabilities to become FreeGold.

NedThanks!#1197684/10/04; 10:28:53

Lots of responses to the loaded question yesterday. I like that scissor/rock/paper story....amusing.

Here's another...........

"....the driving force for gold is not the dollar nor nominal interest rates but real interest rates. This means if inflation rises faster than interest rates, then real rates can actually decline although nominal rates are rising. This is our expectation as in the '70s, gold should remain in a bullish trend..."

Druid@Belgian#1197694/10/04; 11:06:36

"We don't want any kind of imposed "standardisation" of Gold. We want FreeGold ! Can you agree on this ?"

Druid: I couldn't agree with you more. Let the "free" market price/value "monies" of all sorts and then be allowed to differentiate between monies as a medium of exchange and real "wealth" as a store of value.

Melting PotLAWFUL MONEY, PAPER GOLD, DEFLATION & KEYNES:#1197704/10/04; 11:19:37



"Federal reserve notes, shall be redeemed in lawful money on demand at any Federal Reserve bank"

Sec. 411. - Issuance to reserve banks; nature of obligation; redemption

Federal reserve notes, to be issued at the discretion of the Board of Governors of the Federal Reserve System for the purpose of making advances to Federal reserve banks through the Federal reserve agents as hereinafter set forth and for no other purpose, are authorized. The said notes shall be obligations of the United States and shall be receivable by all national and member banks and Federal reserve banks and for all taxes, customs, and other public dues. They shall be redeemed in lawful money on demand at the Treasury Department of the United States, in the city of Washington, District of Columbia, or at any Federal Reserve bank.

-EOM Lawful Money-

"We are all Keynesians now" --US President Richard Nixon (1971)


Managing the Business Cycle by Managing the Money Supply:

"…our desire to hold money as a store of wealth is a barometer of the degree of our distrust of our own calculations and conventions concerning the future…. The possession of actual money lulls our disquietude; and the premium which we require to part with money is the measure of the degree of our disquietude…"

"Unemployment develops, that is to say, because people want the moon: men cannot be employed when the object of desire (i.e., money) is something which cannot be produced and the demand for which cannot readily be choked off. There is no remedy but to persuade the public that green cheese is practically the same thing and to have a green cheese factory (i.e. a central bank) under public control…"

"What is the charm to awaken the sleeping beauty, to scale the mountain of glass without sliding back? If every Treasury were to discover in its vaults a large cache of gold proportioned in size to the scale of its economic life, would that not work the charm? Why should not that cache be devised? We have long printed gold nationally. Why should we not print it internationally? No reason at all, unless our hands are palsied and our wits dull…"

The Costs of Deflation:

"Either the government's announcement is believed and the future is discounted immediately in the rate of exchange, in which case we suffer all the elements of a violent and sudden deflation; or else the government's announcement is disbelieved, or only half believed, in which case we have a slow movement with the expectation of a further movement in the same direction, the effect of which on trade and employment hardly bears thinking about. As soon as the business world has good reason to believe that prices are likely to fall, no course is open to it except to contract its engagements, draw in its horns, and go out of business as far as may be until the funeste process is over…"

"In no other way than by the deliberate intensification of unemployment. The object of credit restriction… is to withdraw from employers the financial means to employ labour at the existing levels of prices and wages. The policy can only attain its end by intensifying unemployment without limit, until the workers are ready to accept the necessary reduction in money wages under the pressure of hard facts…. Deflation does not reduce wages ’automatically’. It reduces them by causing unemployment. The proper object of dear money is to check an incipient boom. Woe to those whose faith leads them to use it to aggravate a depression!"

Sound familiar???

Melting PotInflation Must End in a Slump: "The Unavoidable Crash" #1197714/10/04; 11:51:53

Inflation Must End in a Slump
Ludwig von Mises
Reprinted from the New York World Telegram & Sun, August 28, 1951.


Economic theory has demonstrated in an irrefutable way that a prosperity created by an expansionist monetary and credit policy is illusory and must end in a slump, an economic crisis. It has happened again and again in the past, and it will happen in the future, too.

If one wants to avoid the recurrence of periods of economic depression, one must start by preventing the emergence of artificial booms. One must prevent the governments from embarking upon a policy of cheap interest rates, deficit spending, and borrowing from the commercial banks.

This is, of course, a very difficult task. Governments are in this regard very obstinate. They long for the popularity that booming business conditions seldom fail to win for the party in power. "The Unavoidable Crash", they think, will appear only later; then the other party will be in power and will have to account to the voters for the evils which their predecessors have sown.

Thus there is no doubt that we shall one day have to face again an economic recession, although it is impossible to determine the date of its outbreak and the degree of its severity. It will be bad indeed. But worse than the crisis itself could prove the psychological and ideological consequences of an erroneous interpretation of its causes.


"We have long printed gold nationally. Why should we not print it internationally?"

"Now 'in the long run' this [way of summarizing the quantity theory of money] is probably true.... But this **long run** is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is long past the ocean is flat again."--John M. Keynes

SmeagolPrecious/DX=?#1197724/10/04; 12:31:32

...sss... ahem... does one of you fine Wizards, Knights or Ladies out there have a chart of Goldprice divided by the Dollar Index? We have only seen charts showing both; we are curious to ssee the correlation(?) between them over time.

Thank You (bowing)


BoilermakerEducating Ned's Brother-in Law#1197734/10/04; 13:53:13

One more offering for your Easter dinner with the family. Tell Ned that you will deliver 20 tons of gold ore to his driveway and challenge him to find the ounce of gold that lies therein. Then ask him if he would rather write a check (legally)for $400 against an infinite bank account.

Cavan ManNed#1197744/10/04; 14:18:23

I had forgotten to mention the FACT that Russia has been collecting a surcharge in EURO for all the bbls they export to the EU. This was announced 2-3 years ago (I am growing old here!). Also, the oil market is somewhat opaque IMHO. It is highly probable the ME oil producers are collecting Euro in partial payment. Oil can continue to be "officially" denominated in USD but in actuality, oil can be priced in Euro without making waves. He that has the oil makes the rules. Actions speak louder than words.
mikalFinancial Times Poll#1197754/10/04; 14:36:36

FT online is conducting an ongoing
poll on the "risks to the global economy"
that greatly simplifies five relevant issues,
and disregards many more.
I'd choose NONE of the five options:

"Poll Question: Which factor do you think poses the most risk to long-term growth of the global economy:

[This message was edited by on 20 Jan 2004 at 09:37 AM.]
1)The rising US current account deficit and risk of further dollar depreciation
2)A retreat from open economies to protectionist practices
3)The threat of increased terrorist attacks
4)Constraints on natural resources such as oil
5)The impact of increasing pollution"

mikalCostly Consequences for Enervated Energy Awareness #1197764/10/04; 14:54:11

Fuel Prices Expected To Remain High
"Higher prices at the pump are expected to be felt especially keenly in the US, where prices fluctuate more than in Europe because of lower state and federal taxes.

US drivers are also suffering because fewer refineries are available to supply the new petrol that has been mandated in some states for environmental reasons.

Europe and Asia have been largely sheltered from the oil price rise in the past year by the drop in the value of the dollar, in which oil is bought and sold."

Instead of reporting higher and higher prices, FT simply reports the probability of prices remaining high. Selective reporting but narrow in scope and purpose.

barelyCondtioning#1197774/10/04; 15:26:54

I was just reading James Turk's reply to Frank Veneroso's paper on the possibility that commodity prices are topping. One sentence in particular stood out for me: "gold is still below its 15-year high and only 50% of its 24-year high. So gold in my view still has a lot of catching up to do."

If I am interpreting Mr. Turk's comments correctly, he is simply dividing the peak gold price from the 1980's by today's price to get 50%, i.e., $850/425 = 50%. This simple arithmetic is based on the conditioned notion that the US dollar is a constant with some kind of inherent value, which is not the case. If we are going to use the US$ prices as a benchmark, we must adjustment for inflation, so that we are comparing apples to apples.

I would argue that when one accounts for inflation, many commodities, oil included, are (substantially) cheaper now than they were at their peaks in the 1980's, when compared to US$ incomes. I suggest that one needs to double the peak commodity prices from the 1980's, to get a truer picture of where prices have been and could go. That said, my historical charts show Mr. Gresham's favorite, soybeans, peaking at ~$11.00 (unadjusted) in 1977 and 1988. Soybeans have stalled below $11.00 once again. Are they topping? As near as I can figure, soybeans would have to rise to about $22.00 in today's dollars to be equivalent to the 1977 price, if I am reading this correctly. Beans in the teens; how about the 20's? Who knows?

Gold looks like a phenomenal bargain in this context, even when constrained within US$ commodity pricing control. I have learned much reading the opinions offered on this forum and as a result, I have started to build a modest stash commensurate with my means and understanding of what's going on. It used to be that I flossed my entire stash each night. Now some of it jingles in my pocket. Play in the paper, save in the real.

DryWasherAre Free Gold and the Gold Standard compatible?#1197784/10/04; 16:49:03

In my not so humble, and admittedly biased, opinion they are not only compatible, but absolutely necessary to the existence of one another in the real world in which we live.

Please remember that a Gold Standard simply means that the relative value of all things is measured in terms of the weight of gold required to purchase any one of those things in the marketplace at a particular place and moment in time, and nothing more.

If I must give farmer Brown one half a gram of Gold to purchase a chicken at his farm today, then today, at the Brown farm, the price of chicken is one half a gram of Gold and the value of one gram of Gold is two chickens.

In the above simple example, and simultaneous similar transactions taking place all over the world, and involving not just chickens but every other commodity and service imaginable, all taking place at the same time, we have established both a true Gold Standard and truly free Gold world wide. But we have done much more. We have invented money, in the form of Gold, and established a single world wide currency (Gold). And we did it all without any Government involvement of any kind.

Please note that in the above established simple monetary system, the physical Gold is in the hands of the people, and the only requirement for it to work is the universal acceptance of Gold as money by the people, and to keep the hands of Government, banks, and other bottom feeders off of the system.

As always comments, contrary views, and even brickbats welcome (and expected).

By the way, their have been a bunch of really great posts in the last couple of days. Thanks Guys.


BoilermakerConnecting the Dots#1197794/10/04; 17:33:28

My apologies for not acknowledging and thanking those who offered their responses to my post of Thursday re the absence of official US comment since AG's statement of 1998 vs. the continual chatter coming from Europe. Dear Belgian has made it abundantly clear that he expects me to restudy the works of Another and FOA to find the answer.

He is asking too much of this poor old rusty-brained boilermaker. Can I venture an opinion based upon my limited understanding? Here it is: the US would like to continue to have the $ dominate world commerce. This is their ticket to a bank account with infinite balances. Europe is not so enthusiastic with this arrangement. Europe thinks the US is milking the system. Eorope would like a smooth transition to another more responsible currency. The US is resisting this transition. Gold is the ancient numeraire that keeps score for the fiat players. Fiat players that go out-of-bounds will be penalized. The US$ is out-of-bounds. The US coach stays quiet hoping the referee does not see the infraction and assures the home team fans that the game is legitimate.

Cavan ManHi Boilermaker#1197804/10/04; 17:44:25

Are you a Purdue fan? I am. Perfect analogy; I prefer simplicity whenever possible. Life is better for me that way. Cheers...CM
WaveriderSir Smeagol#1197814/10/04; 18:25:44[s24080811]&disp=P

Here is the Gold:US$ ratio, weekly.
Waverider...haven't finished Sir Smeagol#1197824/10/04; 18:27:29[s22607326]&disp=P

...and here is the monthly! Cheers.
BoilermakerCavan Man#1197834/10/04; 19:12:13

Indeed I am a Purdue Boilermaker, class of 61. Then I spent 35 years working for another boilermaker, Babcock & Wilcox. Now I have become more interested in gold than boilers.
But my roots are firmly planted in steam power generation. As for Purdue sports, I am conditioned for many years between championship teams, sort of like my investment results.

I would like to hear of your connection with that bastion of technical learning. Cheers and God bless your Easter.

SmeagolRatio Deja View#1197844/10/04; 19:22:59

Thanks you Sir Waverider... O, what a change recently... not only is it steep, it's doing almosst the exact same thing it did in the middle 1980's... we wonders if it will reverse any time soon... if at all. We clicked for the next Chart and what do you know, it shows the ssame thing, but for Euro... it's going up too, but not nearly so fasst, and looks like it might even be stabilizing, long term... (pondering)

We're with you, Sir Boilermaker. Many things discussed here make our head hurt, yet since stumbling across this Forum, Smeagol also sees many things a LOT clearer than before!


SteveHBelgian#1197854/10/04; 19:26:45

When I say gold standard, I mean gold is essential to pricing the basket of currencies. I mean that like it or not, admitted to or not by the powers that be, the dollar and all other currencies are on a gold standard, meaning that if they allow gold to trade freely, they loose control of their currencies, thus gold is a standard to maintain at a level, which is currently well below the supply demand continuum. Thus, at some point, free gold will likely end up pricing currencies, but not until the ammunition to control gold in currencies runs out, which it appears to be.


CometoseIntersting and enlightening reading#1197864/10/04; 19:36:09

I just finished perusing a doncument that my cousin talked to me about in the early 90's....

In the first four sections there were several references to GOLD .......GOld and the banking system ; Gold and it's use to make geopolitical things happen.

In the eleventh section in the 3rd part it makes specific reference to Constitution....and making peoples Constitutional Rights disappear (REad and put 911 in this context or the Bolshevik Revolution.....
Or Germany's WWII.

IN the 20th section it discusses FINANCIAL control ( this part was narrarated in the Voice of a BANKER and GOLD is brought up again .

IN this section there were references to GOVERNMENTS borrowing money from external sources.....and the results of that borrowing .....consequences especially when these
GOvernements became insolvent......It made me think of Germany ....because Germany was mentioned in the introduction to this piece..

When I was introduced to this document , I was informed that It may have been written in late 1700's or early 1800's.

I'm beginning to wonder if the World Events we are witnessing and some of the prior writings of our illustrious freinds on this Forum don't point to the undercurrent of a world enlightenment and response to the goals of this organization

There are some brief footnotes added in specific references to banking including a statement of JFKs taking us off the FED RESERVE SYSTEM ..and some items relating to FDR.......THE US was declared bankrupt at the Geneva Convention in 1929.........

THE TONE THROUGHOUT THE PAPER IS ONE OF CONDESCENDING ARROGANCE.........which seems very familiar to me for some reason .....It's also interesting what it says in the second section about the PRESS...

Chris Powell; 19:44:43

John Ing of Maison Placements in Toronto sounds
like GATA in this interview in the Financial

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Chris PowellJohn Ing of Maison Placements in Toronto sounds like GATA#1197884/10/04; 19:45:57

Latest GATA dispatch.

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TopazSmeagol.#1197894/10/04; 20:44:15

Have a little fiddle with the time options at the bottom ... tell us your "conclusions"
melda laureDXY * POG#1197904/10/04; 21:20:30

I belive it's the product of the two that you really wants. The POG is in dollars per ounce, but the DXY is baskets (of foreign fiat) per dollar. The product gives you the answer you'd want. If you divide one by the other you'll get a funny (noisy) chart.

PS. you may want to divide DXY by 100 to get more manageable numbers. Now if I could just divide this income tax by a hundred... I really should try filling these forms while sober.

cuio nin mellon. ;-) hic!* 'excuse me.

melda laureReplace GC with GC * DX...#1197914/10/04; 21:29:58

You'll see a trend that ought to give greenie indigestion. Course this is the price of a mythical g0ld bug who is 40% Japanese 35% European 15%Naugrim and 10%Hobbit or whatever...
TownCrierSir barely...#1197924/10/04; 22:07:31

Gold: "...used to be that I flossed my entire stash each night. Now some of it jingles in my pocket."

It took me a while, but I finally 'got it'.

A shiny (white) smile back to ya.


DruidU.S. March Import Prices Rise 0.9% Led by Petroleum #1197934/10/04; 22:35:15

April 7 (Bloomberg) -- Prices of goods imported to the U.S. rose 0.9 percent in March, reflecting the drop in the value of the dollar and an increase in costs of oil and other raw materials, government figures showed. Excluding petroleum, prices edged up 0.2 percent.

Last month's increase in the import price index was the sixth straight and followed a 0.4 percent rise in February, the Labor Department said in Washington. Excluding petroleum, import prices have climbed 1 percent in the past 12 months, the smallest rise since a similar gain in October.

``This tones down some of the concerns that inflation is breaking out all over the place,'' said Douglas Porter, senior economist at BMO Nesbitt Burns in Toronto. ``It's really an oil story -- we definitely are moving away from deflation, but it's hardly rip-roaring inflation.''

Druid: Well now, let's see, we have prices going up on imports and prices going up on exports. I was under the assumption that lower import prices would be the holy grail and balance out any type of domestic inflation. Wow, wait till this begins to take hold on that "China" Mart crowd.

Hmm, while we are on the subject of excluding oil and food prices from any serious measure of price inflation, let's exclude Mr. Porter's brain and supposed credentials from any serious thought that he might have on the subject of inflation and we'll call it even.

Gandalf the WhiteYou did WELL ! Lady Waverider !!! <;-)#1197944/10/04; 23:13:35[s22607326]&disp=P

That Monthly " GOLD / US Dollar Monthly " chart that Sir Smeagol ask for is GREAT !!!
It surely shows that Jan '01 was a MAJOR turning point the the U S of A Dollar fund users.
ASK ANY person that has stocks as an investment, IF his "stockprice vs. US$" chart can hold a candle to THIS chart after Jan '01 ?
I appreciate you taking the lead, Lady Waverider, while I have been our controlling the ORCS today !

Belgian@Sir Boilermaker#1197954/10/04; 23:36:30

Bravo, you have been simplifying the whole matter, correctly. Is evidence that you certainly understood what there is to be understood. But allow me to conclude your conclusion in one single phrase :

*** Who is "with" the dollar and who is not !? ***

"EVERYTHING", that is happening, at present, is connected to this very, very, VERY basic fundamental. This was explicitely and publicly confirmed, last night, by an American living (!!!) in Brussels !

Voila Sir, no need to restudy the archives. Sorry for my pedanterie.

Vice President, Cheney in Japan : Japan's Finance minister Tanigaki "golden" shot before the dollar bow (Hashimoto-like), happened around the time of the planning of the visit. For how long and to what extend, is Japan going to keep supporting the dollar ?

The same question goes for the UK, where that dollar-support took intensified form, already under Lady M. Tatcher.

Am illustrating Boilermaker's correct conclusion.

The discussion about FreeGold/gold-standard remains extremely important for the simple reason of having an idea/insight, about where Gold's "Revaluation" is heading...$600...$800 (bookmaker's figures) or Permanent Wealth !?

Will the euro-system bring back *Gold-Wealth* or will the dollar-system remain on Yahoo-confetti !?

GoldiloxTaiwan's 'Caribbean headache'#1197964/10/04; 23:38:51


The Caribbean island of Dominica has announced it is cutting diplomatic relations with Taiwan and is instead establishing them with mainland China.

For how long can Mr Chen continue to outbid China?

The Dominican Prime Minister, Roosevelt Skerrit, said his government had come to the conclusion its policy on China had been based on unrealistic and fallacious historical interpretations.

Mr Skerrit also said China had agreed to give Dominica more than $100 million in aid over the next five years.

Taiwan's Foreign Minister, Eugene Chien, condemned what he called China's dollar diplomacy in wooing away Dominica. He said it was a huge sum for a country with just 70,000 people.


It looks like China has found another use for that ballooning US$ trade imbalance. Buy influence. Getting more capitalist every day.

SmeagolConclusions... Changes?#1197974/11/04; 00:35:57[s22607326]&disp=P

Topaz, Lady Waverider, Melda Laure, Gandalf

...sss...we had noticed something sneaky, we doesn't know for sure jusst what... that's why Smeagol asked about a "goldprice divided by the dollar index" chart (which the mosst graciousest Lady provided).

Every time we come to the Castle, we look in the window where the Goldprice and Dollar index are possted, along with a few others. Early on, we saw that for the mosst part, when It goes up the Dollar goes down. Lately, It's been going up more often, even if the Dollar goes up or not... ssay, for instance one month Its 390 and the Dollar is 87, then (after jumping around like a juicy fissh)Its at 410 the next month when the Dollar is at 87 again (...sss... those aren't actual numbers, jusst for illustration)...

...what we SSSSEEM to be seeing is that the price of It is BEGINNING to behave independently of the Dollar. We wanted to see how this behavior was changing, and if it had done so in the passt. What has us riddled is, the Goldprice/DX chart shows almosst this same thing happening from 1985 to 1988. We understands gold separating from the dollar now (will this trend continue?)... but then...sss...what happened in 1985-1998, to cause ssuch a ssimilar change?

If we are right, then eventually there won't be any 'connection' with the Dollar; Gold will do what It wants to. If we are using the wrong equation and getting a 'noisy chart' (???) then it's more like "we'd probably be wrong; we likely are!"


GoldiloxWGC to axe more senior staff#1197984/11/04; 09:33:03


Another sign of the big turmoil and change within the WGC came at the end of last year when it stopped providing a daily market survey and Rhona O’Connell, the gold market analyst, was therefore redundant. There has also been little promotion of the quarterly WGC Gold Demand Trends survey.

On the investment side, Burton has been supervising the launch of Gold Bullion Securities, instruments that allow investors in effect to trade gold bullion on stock exchanges. GBS have been launched in Australia and London but the scheme has been bogged down by litigation in the US where the introduction has been long delayed. The London launch last December was hurried and left some doubts as to whether some institutions could own GBS. So it is being withdrawn and has been replaced by a second GBS scheme that leaves no opening for doubt on this score.

One conclusion to be drawn from the departure of so many high-paid people from the WGC is that the reason is financial and possibly to do with the expense of the GBS programmes. However, Simon Village, the WGC executive who is also joint managing director of the GBS companies, recently told Mineweb that suggestions that it had cost the Council more than $20m on the US effort alone, mostly on tax experts and lawyers, was far from the truth. He said the London product cost $1m, the Australian version $500,000 and the stalled US version "much less than $10m."

Insiders suggest that the cull of executives is taking place because the WGC Committee, headed by chairman Chris Thompson, set four specific targets for last year which it claims were not met.


More delays for the US Gold ETF, I presume.

GoldiloxNevada enters the green zone#1197994/11/04; 09:43:09


Northern Nevada—the U.S.'s biggest gold mining region—has entered the "Green Zone". Environmental special interests are cropping up faster in Reno than any new mining company corporate headquarters. The odds are stacked against mining, as we gambling native Nevadans would say. It all began about three years ago when a local activist group received a $600,000 grant from the Rockefeller Brothers foundation. They shared their bounty with labor and environmental groups.

Time has passed. And, folks, Greens have moved into the neighborhood. Miners, meet your new Green neighbors, the Western Mining Action Project and your soon-to-be neighbors, Earthworks, which is in the process of hiring a circuit rider (gasp!) for Nevada. They're sharing quarters in Reno with long-time mining foe Great Basin Mine Watch. Although Executive Director Tom Meyer is weary of his administrative chores, he plans to hang around at Great Basin, continuing to file those lawsuits, testify at endless hearings, and generally be a pain in mining's …side.


What a surprise! Rockefeller funding for greenies who disrupt the Nevada mining industry.

GoldiloxFunds [needed] to speed up Nevada mining claims#1198004/11/04; 09:50:38


"While Nevada claimholders will pay over $12 million into the U,S. mining claims program this year, the office responsible to administer the mining law, including processing mining claims and reviewing and issuing permits, has experienced continual funding cuts. This trend is threatening Nevada's number two industry and must be reversed," he said.

"Despite the fact that exploration and new mining activity is increasing in Nevada, our BLM office is overburdened and drastically under funded. Nevada is in dire need of this funding to pay for new staff to review operating plans, complete NEPA requirements, and update the compliance records," Gibbons added.

"It's quite simple: if mining companies seeking to invest in Nevada are deprived of a responsible time frame from which they can gain returns on their investments, they will leave Nevada, and likely this country, and invest in mining operations overseas," Gibbons said. "Mining pays the highest average salary to Nevada workers than any other industry. They employ thousands of Nevadans and have an enormous impact on our state's economy. Losing their business in this state simply because we fail to assure a responsible time frame to process their claims would be inexcusable."


Hard to say whether the processing logjam will raise prices by limiting supply, or lower prices by squelching public demand, or none of the above.

mikal"Proprietary" fund uses subtle "early exit" strategy#1198014/11/04; 10:18:58

Morgan Stanley reassesses its fund business Landon Thomas Jr. NYT New York - Saturday, April 10, 2004
"Stung by regulatory pressures and comparatively paltry returns in Morgan Stanley's mutual fund operations, senior executives at the firm are reassessing the model for their fund business, said bankers who have been party to the discussions. The firm is looking to de-emphasize the Morgan Stanley funds sold through its sprawling network of brokers and to sell more Van Kampen funds, which the firm acquired in 1996, through other outlets like financial advisers."
[Morgan Stanley's own funds have been poor performers of late even without the fines imposed recently.]

"The argument for keeping these fund operations has substantially diminished," said Geoffrey Bobroff, an independent mutual fund consultant in Rhode Island. "If you undo the things done in the 1990s, you are going to see people scratching their heads and asking, 'Do we really need to be in this business?'"
[Who wouldn't agree that's true? But just what they are seeing in the big picture must not be so simple.]

"Bankers and consultants point to several factors that have changed the equation. First, they say, much of the growth in retail fund flows is coming from 401(k) contributions at the workplace, a market dominated by big fund companies like Fidelity and Vanguard with impressive performance records and economies of scale. Pure retail fund flows into the proprietary funds of Morgan Stanley, Merrill Lynch and others has been stagnant in recent years, they say.
Second, Eliot Spitzer, the New York State attorney general, who has spearheaded an investigation into improper fund trading practices, has been able to force significant reductions in fees from fund companies such as Alliance and MFS. These settlements, together with expected new rules for disclosure of fees and expenses when funds are sold to customers, will put a squeeze on margins in the coming years."
[Merril Lynch too big to fail? In a way. They don't get any more connected than these old, feral "proprietary funds" with nine lives. These early exit "bailouts" employ subtle insider strategies that can be further shrouded by more serious, systemic financial crisis- scandal, stagflation, and depression with possible draconian emergency market regulations, taxes and moratoriums.
Irregardless, may you follow the "4 G's" dictum that secures you many Happy Easters(The Short List): Gold(And/or silver. It's a free country, still.), God(Your choice(s)), Grub(Food and drink in moderation), and Guns(Or other form of personal and family vigilance and protection)] A Happy and Blessed Day to All

Cavan ManChristos Anesti#1198024/11/04; 11:13:21

Have a wonderful day all....CM
DruidHave a wonderful Easter all#1198034/11/04; 11:40:46

Druid: Happy Easter CPM, Forumers and all Lurkers....Thank you all for your many contributions(thoughts) as you so graciously allow me to view this crazy world from different perspectives which always enhances my own perspective. Many thanks.
slingshotGreat Day to be a Goldbug.#1198044/11/04; 11:51:53

Have a safe and Happy Easter to all.

Mr GreshamWhat it's all about: The Thirty-Year Itch#1198054/11/04; 12:02:35

Link: At least there's a Master Plan; we're just along for the (internal-combustion engine propelled) ride. This article really linked all of the Middle East ups & downs for me; and of course, it's all Henry K & henchmen at the bottom of it.

"Vell, you all drife cars; vat did you expect me to do?"

Actually, I think they left out something in the article. Wasn't it Henry who suggested to the Shah raising the POO so he could by those F-Whatevers from Lockheed or whoever? And THAT got the whole ball rolling.

With regard to our own oil-for-gold story here, this doesn't touch directly on it, but certainly suggests that the Saudi royals have always been on a short leash, and allowed to take their "allowances" to London or Zurich and stash them for whatever descendents they feel obligated to support.

The US can dispense with them any time its hand is forced by events, or when it no longer feels it needs the cover story of "local ownership" (the model it has practiced around the world to cover its control).

But Iraq becomes SO predictable in the context of the 30 year strategy. The progression from Bush I to Bush II as we draw closer to Peak Oil is devilishly logical. And acceptable losses are much higher than we've borne to date.

Melting Pot: No fair putting Keynes up alongside Mises yesterday! Heavyweight vs lightweight, methinks. It's as if Keynes was BEGGING for someone to unmask him: "Fraud! Imposter!" and no one ever did successfully, such were his desperate times. He played the game he found awaiting him.

I'll have to re-read; I'm always trying to find both sides' valid points. Also: FRNs. That bears re-reading many times. Perhaps, Randy, we could have a "FRN Definition Page" (or contest?), since Al Greenspan seems unable to define a "Dollar"?

Cometose: I hope that link is not to the Protocols; I'm not even interested in going there, but it seems that, by now, anyone who wants others to read that should provide some larger context of its origins, and cite specific points they want to make. The discussion on that has been around the 'Net plenty of years to make that possible. I appreciate _all_ you contribute.

WaveriderSmeagol#1198064/11/04; 13:43:08$usd,uu[p,a]waclyyay[d19801110,20040825][pb50!b200!f][vc60][i][j21847811,y]&listNum=7

I've attached a chart of the USDX from 1982, and you'll see a big drop in '85-'86 while Gold moved from around $300-$500 during the same period.

I think your observations are correct. The disconnect between the USD and POG is apparent in 2004 - I did a scatter plot of POG/US$ since Jan 1 and it's all over the place - no negative linear relationship in any shape or form - but remember that's only short-term and does NOT reflect the long-term trend of the USDX. The USDX has increased >3% since January, while Spot has increased around 1% - hence the increase of Spot valued in other currencies - Euro, Swiss Franc, and CA dollar. Having said that, it looks like the US$ will continue it's trend down (soon) and that should propel Gold north - I'll post another chart for your viewing. Cheers, Waverider

WaveriderSmeagol....#1198074/11/04; 13:46:36$usd,uu[p,a]waoayyay[d19950721,20041231][pb40][vc60][ila5,34,5!ld14!lk13][J28992307,Y]&listNum=1 it is...
Gandalf the WhiteWOWSERS !!! That last US$ chart was FUNTASTIC !!! <;-)#1198084/11/04; 14:50:36$usd,uu[p,a]waoayyay[d19950721,20041231][pb40][vc60][ila5,34,5!ld14!lk13][J28992307,Y]&listNum=1

Thanks Lady Waverider !
Let us see if the DOWNTURN starts NOW on the US$ ?
Gather the YELLOW while one may.

SmeagolYesss....#1198094/11/04; 15:18:37

Ahh, thank you once again kindesst Lady...sss... those charts show it, alright, and easier to understand than the firsst chart we wanted... We are new to this kind of thing and appreciates the help... we marked the place on our little Map so we can find our way to it again from the Casstle...

hah!... from the chart - "TA indicators are maxed out. Down is the path of least resistance".

...sss...the Paper ball is bouncing down the mountain!


IT. Getting us ssome.

TopazWaverider, Smeagol, Gandy.#1198104/11/04; 15:26:24

The Three Musketeers ... Oil, Dollar and Gold appear set to rise in unison this week (an unsustainable phenomonen) and we wait with bated breath to see who will wimp out first.

It's been long assumed that $PoG was/is a derivative of USDX and on a daily basis that is the case however, a Monthly comparison appears to reveal DX to be the laggard. What a feat of engineering!

WaveriderSmeagol, Gandalf, All....#1198114/11/04; 15:41:06

...please let me say that these are public charts I posted but any narrative on them is not mine - it's from Douglas next door, and I see there's already been revisions. These are also interesting from Bolser. Cheers, and a Happy Easter to All!
WaveriderUSAGOLD Charts...#1198124/11/04; 15:45:55

...and of course charts at USAGOLD - Smeagol - scroll down and you'll find POG in Euros.
Cavan ManHi Boilermaker#1198134/11/04; 18:15:25

Saw your note last eve but was dashing off to Liturgy and could not respond. We've been thinking of relocating to West Lafayette--that's how we havve become Purdue fans. Makes sense for a lot of reasons. Happy Easter 2U...CM
Dollar Bill*>*........................................+#1198144/11/04; 20:17:26

Forecaster, Greetings. We establish our views on the economic structure based on historical norms. Perhaps the primary one is that of each country striving for the advantage of its own citizens.
My assertion is that while we out of power analysts remain wedded to historical norms, some number of those who really wield power have decided to move to the United States of Earth economic model. Hopeing to do that with the minimum of fuss, they quietly act along the lines of historical norms, yet take key actions which push us inexorably towards the one shared system. I cannot explain the actions taken unless I assume they have a target, a goal, a plan, however in flux it is.

While certain EU politicians oppose this and make unsuccessful sounds of "multi polar world", it seems that they are defeated, and China, Japan, Saudi Arabia and some other oil countries are all on board. And I dont see Russia taking key actions away from the global model either.
The north/south American free trade zone is a step in that direction, for all the anti-USA noise in political arenas, the actual financial decisions, the key ones, are weaving us tighter towards the USE. The United States of Earth, or whatever they call it.

I think that accurate forecasting requires knowing what those in actual power have in mind. Either they are far stupider than any of our posts portray, or they are moving in messy tandem towards a new model. It makes no sense unless they are.

Well, ok, it could make sense in one pathetic way, Kurt Richenbacher thinks this is all just a scam run by "ruritania" (usa), to enrich itself at the expense of the world and the rest of the world is too dense to see it.
And that we should get back to the model he knows and we should scold those who are stupidly wandering off the sensible norms of yesteryear. K. genius and all other country central bankers are idiots fooled by the USA.

I cannot insult the rest of the world like that. In the same way that I cannot continue chanting "the idiots are driving us off a cliff!"
I cannot assume proudly that ** I ** am completely different from those at the top because ** I ** am willing to share for the greater good. That only ** I ** can see it, and only ** I ** would, if I had power, take a shot at making the economic model, somehow, with gods grace, (or random chance, for those of you DNA enthusiasts) into a global model future that might work as best as any can, for the maximum amount of people on earth, and carry us towards a less chaotic next few centuries. Great suffering has been caused by the previous models that caused men to fight wars for economic needs. No one is talking about this. But actions speak loud, and I cannot analyze all the economic input I receive and make sense of it unless I assume they are doing this.

I cannot understand the actions of the "left leaning" politicians unless I assume that they do not believe in an active evil in this world that is bent on destruction. Many do not believe that because that would require a belief in god, and a surprising number do not. The assumption is that at most god is a nuetral force. And humans can rationally all be talked into behaveing. A dangerous assumption I say.
So, while the quiet actions of certain economic forces move us to union, the political union will end up being a struggle between rationalists and those who are somewhat more reality based in that they at least consider the game of god being played out here for the hearts of men. The struggle again and again, forever it seems, between "right" and "wrong".

By the way Forecaster, since I dont know your background on this last subject, my view is that since no man can avoid personal flaws or malfunctions, and no one can lead a problem free life, that is the proof not only that there is a god, but also that there is a very smart on the ball troublemaker also.

My freind in the food and drug adminisration tells me that Japan is buying up huge amounts of American beef and food crop industry. Ever view the Japanese situation with the idea that when trouble times come, being the 51st state, in effect, means Japan is assured food.

NedCavan Man#1198154/11/04; 20:47:29

Thanks for thanks and acknowledgement lately. You are a good guy. You have theories on box containers, if I recall with my fatigued memory, yes?

Easter dinner went down with the 17 'in-laws', gold did not come up, perhaps a blessing in disguise.

Looking forward to the next 'run-up', can't decide if it is pre-election or post and why?

Looking forward to 4 digit gold before end of decade. That's a given IMVHO. Things WILL get stupid ugly before 6 years pass.

Here's a nightcap toast to you amigo.


GoldiloxBelief in God as a political tool#1198164/11/04; 21:45:19

Dollar Bill:

You said:

I cannot understand the actions of the "left leaning" politicians unless I assume that they do not believe in an active evil in this world that is bent on destruction. Many do not believe that because that would require a belief in god, and a surprising number do not. The assumption is that at most god is a nuetral force. And humans can rationally all be talked into behaveing. A dangerous assumption I say.


Although it is simple to blame the messes of the world on some outside "evil power", just as US administrations like to blame the ramifications of brutal foreign policy on "Evil Empires" (many of whom were created by previous CIA actions), it may sadly be that civilization is flirting with extinction precisely because they have been taught to believe some outside force will come save them from their own stupidity. I wonder if the Rishi and Atlantean civilizations disappeared due to similar arrogance? As long as leaders successfully convince their minions that God speaks to them in their megalomaniacal dreams, they will most likely continue policies of genocide with their minions' support because "their God told them to waste the infidel!"

Personally, I don't think any rulers really believe this stuff, but it sure is easier to manipulate ignorant masses by pretending to. Keep the masses on their knees and they never learn to walk upright or ask appropriate questions.

History has demonstrated time and again that religious regimes of all flavors are just as brutal as any other political entities. Thus the demands of separation of Church and State by the constitutional founders, a liberty we are in grave danger of losing to Ashcroft and his anti-liberty cronies.

mikal@Dollar Bill#1198174/11/04; 21:51:40

Why'd you repost that long, right-wing, warmongering gibberish from a couple days ago? I'm glad you're not MY customer.
mikalJapan to "diversify" soon?#1198184/11/04; 21:57:40

Monday April 12, 2003-- Safar 21, 1425 A.H.
Japan may need to bolster reserves with more gold
TOKYO -Excerpt:
Japan seems reluctant to boost its gold holdings as a way of diversifying its massive external reserves, but Tokyo may have to reconsider its stance in the future, with its reserves heavily overweight in US Treasuries.
US Treasuries are seen as among the world's most liquid and safest sovereign securities, but financial and commodities analysts say it may be dangerous to stick to one brand, especially the bond of a country with towering twin deficits. "We have to say that concentrating in one thing (US Treasuries) is not healthy and if the issue of diversification is raised then increasing gold should be considered," said Tatsuo Kageyama, a market analyst at Kanetsu Asset Management.
"At present Japan is not considering increasing gold, but debate about diversification should re-emerge over time and it may come to a point where Japan has to think about it seriously."
Japan's latest reserves figures showed a record $826.577 billion at the end of March. The reserves have nearly quadrupled in the last five years.
Japan has been the world's biggest holder of external reserves since October 1999, having nearly twice as much as number two China, which held about $426.4 billion as of November. The Ministry of Finance data showed Japan's gold holdings at just 1.3 per cent of the total reserves, with 24.60 million ounces or 765.2 tonnes — the lowest among industrialised nations with the exception of Canada and Britain.
On Thursday, Finance Minister Sadakazu Tanigaki said he did not think it was necessary for Japan to boost the amount of gold it held in its external reserves. "I'm aware of arguments about the need to diversify our foreign exchange reserves away from US assets, but I don't agree with calls for us to hold more gold. Some diversification may be necessary, but I don't think Japan needs to hold more gold," he said in a speech to foreign correspondents in Tokyo.
Hiroshi Watanabe, head of the MoF's international bureau, separately told reporters that it was not appropriate for Japan to discuss gold purchases without a review of the framework on global currency policy.
In the early 1970s many industrialised nations agreed to reduce gold holdings and the framework for that agreement still existed, Watanabe said. Japan last increased its gold reserves in May 2001, when it raised the holdings to 24.6 million ounces from 24.55 million ounces.
Japan does not disclose details of the breakdown of currencies in the reserves, but its holdings of foreign securities and deposits, about 98 per cent of the total, are widely believed to be held in US dollars.
"From the standpoint of hedging, Japan should be thinking about increasing its gold reserves," Kanetsu's Kageyama said. Analysts also said that adding gold to its reserves could strengthen the status of the yen.
"In recent years, China has increased its reserves of gold, while Japan has kept gold reserves steady," said Akio Shibata, chief economist at Marubeni Research Institute.
"China is doing that to raise the credibility of the yuan. In Japan, the reserves held in dollars are simply too big."

Gold StandardWelteke's replacement - fresh from; 23:04:51

Here we go again! As soon as Germany rids itself of a "let's sell all the gold" czar, another one pops up.

Gold Standard is of the opinion that the people really pulling the strings in Europe were set back somewhat when news of Welteke's indescretions fell like a 400 Oz bar into the public domain.

Now, they have had to find a new puppet, with new strings.

>> Snip

Germany Favors Koch-Weser for Bundesbank Presidency, Focus Says
April 10 (Bloomberg) -- The German government wants Deputy Finance Minister Caio Koch-Weser to replace Bundesbank President Ernst Welteke because he's willing to use more of the country's gold reserves to finance government policy, Focus magazine said, citing unidentified Bundesbank officials.

Welteke, who took a leave of absence this week after it was discovered Dresdner Bank AG paid for a four-night hotel stay in Berlin in 2002, has proposed to place proceeds from gold sales in a fund and pay interest and other proceeds to the government.

Chancellor Gerhard Schroeder, seeking to increase education spending and meet European Union spending limits at the same time, says the move isn't sufficient and expects the government to garner at least 10 billion euros ($12 billion) from Bundesbank gold sales, Focus said. The magazine didn't give a time period.

Koch-Weser is prepared to make more use of Germany's gold reserves to fund the government's objectives, the magazine reported in its latest edition. The Bundesbank's gold reserves amount to about 3,400 metric tons, making it the world's second- largest holder of bullion after the U.S. Welteke has agreed to sell 600 metric tons of gold over the next five year as part of an agreement among European central banks.

Schroeder was dissatisfied with Welteke, even before Der Spiegel magazine reported last week that Dresdner Bank had paid for a 7,661-euro hotel stay for Welteke and his family in 2002, a person familiar with the matter said on Thursday.

<< End Snip.

GS: "Caio" to the Bundesbank's gold!

It's fairly obvious that they wanted the right man for the job. Question: How do they get around the Washington Agreement II ?

Cheers! GS

CaradocJapan's reserves "too big" for gold diversification?#1198204/11/04; 23:43:20

Mikal gave us a fascinating quotation from the chief economist at Marubeni Research Institute (a "think tank" affiliated with that major trading house): "In recent years, China has increased its reserves of gold, while Japan has kept gold reserves steady. China is doing that to raise the credibility of the yuan. In Japan, the reserves held in dollars are simply too big."

"Too big" is a relative assessment. A 4x8 sheet of plywood is way too big for a Miata to carry but it fits nicely into the back of a lot of other vehicles. So why are Japan's reserves "too big" for even a fraction to be converted to gold? Simply because that much demand even if spread out over a year or so would drive the price of gold to what some would regard as absurdly high levels.

With 43% of US debt held by Japan and China, has anyone done the math to calculate the resulting demand if 5 or 10 percent of that amount were diversified into gold? Anyone care to take a stab at the resulting price of gold?

Even if you ignore the drop in the purchasing power of the dollar that would result from China and Japan beginning to walk away from it, just the demand for ounces (priced in Euros or whatever) could serve as the benchmark of what's apparently being regarded as an absurdly high level.

Whatever that number is ($2,000 per ounce?), except for the early ounces acquired cheaper than $800 per ounce, much of the demand gets satisfied only at an even more "absurd" figure if/when that demand must compete for ounces with the Joe Sixpacks of the world who will begin to take notice of the yellow metal only it breaks past its previous highwater mark.

Just how I see it....


balzacfeb contest#1198214/11/04; 23:58:19

I was a winner of silver in the Feb contest and I emailed my
address as requested but nothing has shown up. Pls check for me.

Gandalf the WhiteThanks, Sir Balzac !!! I shall get the Hobbits on the TRACE ! <;-)#1198224/12/04; 00:05:10

balzac (4/11/04; 23:58:19MT - msg#: 119821)
feb contest
Because I know that the March PRIZES have started arriving !

BelgianJapan's dollar and gold reserves... #1198234/12/04; 00:43:32

The japanese CB, simply asks herself the same question any other CB does : What if my dollar-reserves are NOT what we thought the were !? Do we have enough of gold reserves to break even (compensate) in case something goes wrong with the dollar-system ?

Isn't it obvious then, that the dollar system wishes the world's CBs to unload as much gold as possible from their reserves ? Once there is not enough gold in the reserves, all have to stick further to the dollar system and keep on managing their local currency as a dollar derivative.

CBs who get rid of their gold reserves are (dollar) smart,...all others are evidencing that they are not "with" the dollar, unconditionally.

That's why the CB-gold of the dollar-doubtors, must be hidden in the BIS commitments.

Any CB that is openly diminishing the importance/practicality of gold reserves is to be considered dollar reserve supportive.

How do CBs have to maneuver as to be dollar supportive and dollar sceptic at the same time ? A: through the ECB/BIS system. They will "settle" it all, "Internationally", later... and save the dollar dissident CBs' face. >>> Gold(currency) wars !!!

K.R. : Six dollars of debt are needed to add one dollar to the GDP ! Watch the nature of your personal reserves,...just in case.

Dollar Bill(No Subject)#1198244/12/04; 05:07:32

Mikal, perhaps you are thinking of someone else? I didnt post much of anything this last week.
Dollar Bill.,.#1198254/12/04; 05:46:24

Goldilox, remove this latest alkida "war" from the picture, and lets look back at our history just a short time and there is the clearer view of the constant battle played out in other forms. Large (nazi, communist) or many varied small. Regional, local, in families, amongst freinds. Between brothers.
USAGOLD Daily Market ReportPage Update!#1198264/12/04; 07:54:37">
The Daily Gold Market Report has been updated.

If you are considering investments in gold we invite you to">request our free introductory information packet detailing the products and services offered by USAGOLD ~ Centennial Precious Metals. We welcome your inquiry and look forward to working with you.

GoldiloxCliff Dive#1198274/12/04; 07:55:19

The CABAL is running at full TILT this morning!

Ag = 7.80
Au = 417.9

MKNews & Views#1198284/12/04; 08:02:18


Is it back to the '70s for gold?
John Ing detects strong parallels now with rally to US$850

Trader Survey: Dollar to Decline Further This Year
Japanese bank says euro going to $1.36

Top Stories Monday
Welteke's son: Bundesbank head clashed with Eichel on gold, Bloomberg

You are invited to visit now, often. Updated regularly. Stay abreast the gold market via News & Views, this forum and the Daily Gold Market Report.

This is the website where serious gold investors congregate and keep in touch with the market. Please bookmark this page.

GoldiloxFBI test detects Colombia 'liars'#1198304/12/04; 08:14:31


A lie detector test carried out on employees at Colombia's Prosecutor General's office has produced an embarrassing 20% failure rate.

The FBI-administered test was designed to root out corruption, including involvement in drugs trafficking or guerrilla and paramilitary groups.


I thought the FBI's charter was to protect the US internally, leaving the CIA in charge of external affairs. Are they now a "contract" organization for the highest bidder?

Bring this test home for US Gubmint employees, i.e. BLS, FED, FBI, Congress, FED courts, etc. What's good for the goose is good for the gander.

The HoopleMr. margin call hits silver ?#1198314/12/04; 08:21:06

The CRIMEX silver contract margin increase was announced effective at the end of last Wednesdays' close. OK, 3 day margin calls would make the extra funds due in the accounts... today. So they got what they wanted, silver down about 30 cents since then. Or did they? Weak longs always get flushed but this might be much different. Does $7.90 look like a pretty good number to a strong buyer? It does to me.
BasilPlatinum#1198324/12/04; 08:33:49

Is it finally time to swap physical platinum back to gold?
Gandalf the WhiteAttn: Sir Balzac <;-)#11983304/12/04; 10:49:52

I earlier said, "Thanks, Sir Balzac !!! I shall get the Hobbits on the TRACE !"
The Hobbits have found that your email to Lady Marie was eaten by the email "screening" device, (BAD MACHINE) and she never received the same ! However, "THE Town Crier", has advised us of your "old overseas address", and unless you are now located at another abode, the PRECIOUS will be posted to that location. Please advise here (on the Forum)if that is NOT satifactory.

Solomon WeaverHow much gold could Japan buy?#11983504/12/04; 11:23:40


Your question as to how much gold Japan might buy, is worth considering in the context of the renewed Washington Agreement between European central banks.....which sets gold sales at 500 tons.....

500 tons x 30,000 ounces per ton x $420 per ounce comes to about $6.3 billion. For comparison, the Japanese Government has approved the use of as much as $500 billion in US Treasury purchases, although they seem to now be retrenching to lower expected purchases, it is clear that ANY amount of serious gold buying from Japan would hardly make a dent in comparison to their existing reserves or their ongoing purchases of Treasuries.

I am not an economist, but my simplistic understanding is that in order for Japan to be able to buy Eurobonds for reserves, a larger supply of them must be made available, or their price would rise....putting undesired upward pressure on the Euro.

I am also not a political strategist, but I assume that the G7 central banking cartel will act to preserve the strength of Japanese banks, as they are certainly the most important in Asia (and most politically aligned with the West). Along these lines, we could consider that gold is already moving "quietly" from Europe to Japan, and that the new "rhetoric" on Japan buying gold is actually front running for a more formal announcement of "real sales".

I am also not a banking expert, but since the health of most Nations banking industry is tied at minimum to the actual reserves of their corresponding central banks, I assume that, in a time of inflating fiat, that CBs will now be positioning themselves to have some high powered money (gold) in their possession.

If we believe the Another hypothesis, that European CB has already anticipated this "new reality" and has placed their "fiat reserves" in a "gold lined vault", it makes sense for stable transition away from dollar, that all major CBs need to start renovating their vaults along the lines of European.....and that it is in the best interests of Europe to supply some of that gold (for example, from Switzerland??) to Japan. Also, note that Russia (with her oil) is well positioned to re-emerge having a strong currency.....which could perhaps be used to absorb various former USSR republics into an ad-hoc currency union which would give the Euro a little regional competition. If Russia were to move (as stated by them in the past) towards introducing a gold coin, this would put them in "alignment" with the muslim efforts to move toward gold dinars. Do not be surprised to see Russia and muslims making this type of monetary alliance, and claiming they are both only moving to the "non-political" gold setting.

Poor old Solomon

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Empty boards and many of the individual coins are also currently available for anyone wanting and willing to complete their set over a longer period of time. Let the good times roll!

Have a look!


MKSolomon Weaver#11983704/12/04; 12:36:43

When you start quoting figures like that ( $6.3 billion = 500 tonnes vs. $500 billion in U.S. Treasury purchases just to stabilize the yen SHORT TERM), one can see quite clearly why gold would need to be priced in multiples the current value for it to play a significant role in the international reserve matrix.

That remains one of the primary motivations for physical gold ownership over the long run. I believe that gold will be called upon to play a role in stabilizing the international reserve structure in the future, more as a reserve (forex) asset than as a benchmark or standard. That cannot and will not be achieved at US$400 per ounce whether that role be de facto or de jure (which it could be). Gold will one day be valued at a rate which returns it to the top of the value scale - where an ounce of gold will again become truly dear.

HuskyRe: Cliff Dive#11983804/12/04; 12:42:35

No big deal - Europe is still semi-out due to Easter
and won't be back in force until tomorrow. Watching
gold and silver getting bashed in a thin, and mostly
paper, market is sort of like watching the designated
'sucker' play at a poker game where he is sitting sush
that the mirror on the wall behind him is letting all
the players see his hand. These boys may be hot-shot
mathematicians, but they don't know squat 'bout playin'
poker. Showing your cards unnecessraily is comical. In other words, it telegraphs the fact that they are losing
control and panicking.

a nation of onepog, stocks, el dollar, et al....#11983904/12/04; 13:25:50

It seems that things have changed, since olden times, when
stocks could plunge more easily. We all know that stocks
are overvalued. Yet we do not all know why they are still
high. People still view things in terms of 1929, and they
are right in some degree. But a number of factors are very
different, and some of these effect the effect, so to
speak. Now, as opposed to then, more amateurs own stocks.
And their payroll savings plans put money into them
regardless of value or merit. For these to panic, they
would actually have to feel something, which most of them
don't. They just listen to their broker, who tells them to
do whatever he wants. They trust him, and these people
help keep stocks floating. There are other factors, but
this is enough for one post.

CometoseNasdaq#11984004/12/04; 13:55:21

Looks like a pennant forming here
Solomon WeaverMK - I fully agree with you#11984104/12/04; 14:10:58


Yes, it is really amazing how much ground gold has actually lost to the great fiat papers of the world. It would really be quite simple to allow gold to once again become a major backing for all currencies, but it would require a rather rapid repricing of gold into what would be the thousands of dollars per ounce range.

To the kinds of folks who can be your customers, buying some gold does seen to represent an easy method to:

1.) Protect savings from general inflation of fiat.

2.) Be positioned in advanced to benefit from a global re-evaluation of the importance of gold as a banking asset.

Compared to Japan, who cannot now really get into gold without moving the market (and causing a political firestorm), small investors are fortunate to still be able to slip in unnoticed and add more gold to their reserves.

. . .

Note to lurkers....and new readers.....Gold at today's prices is certainly not the bargain it was a year or more ago.....but, if you have none (or not much), I would certainly encourage you to allow our good host here to do some business with you.....

Poor old Solomon

Goldiloxeffect the effect#11984204/12/04; 14:11:13


Do you mean "affect the effect" (have effect upon)

or "effect the effect" (bring about or cause)?

BoilermakerCavan Man #11984304/12/04; 15:03:45

West Lafayette in the late 50's was not my idea of a proper community. Only one bar and no brothels. My priorities have changed however and I'm sure that now it would be a fine place to live. Are you planning to be employed at the University? Good luck and God speed to you, sir, in whatever plans you have.
slingshota nation of one Msg# 119839#11984404/12/04; 15:58:40

A very fine post, Good Sir. If you would allow me to indulge into other factors without any condensending implications for I find your post most provocative.
The youth of today, and which may include myself, has no concept of the crash of 1929 and the years that followed.
Myself only have the stories of my parents. Today people invest on trends without any investigation into the stability of their investment. Everybody's doing it!, and so more and more fuels the bubble of stocks or real estate.
Rarely does one step back and takes a good look at what they are about to invest and its long term outcome.
I find the promises of governmemt to be wanting and that one should do his own due diligance to safe guard his or her Golden Years. To entrust so much of ones life and that of his love ones to one person on just belief, hearsay or trend, is to invite disaster upon himself. There are many good financial advisors in the field, but all it takes is the one who does not fare well, to ruin your retirement.
Your post shows concern and I share it with you.
More will sit at our Oaken Table in the future.

BoilermakerCalpers Promoting a New Morality?#11984504/12/04; 17:00:48

NEW YORK (Reuters) - Calpers, the largest U.S. public pension fund, on Monday targeted Citigroup Inc.'s Sanford Weill and Coca-Cola Co. director Warren Buffett (news - web sites) in a bold bid to change the way major U.S. companies are run.
The California Public Employees Retirement System, which has $167 billion of assets, said it would withhold votes to reelect Weill and Buffett as directors of their respective companies.

The fund also said it would withhold votes for directors at 10 other companies, including Sprint Corp., Wachovia Corp. and the entire board of PG&E Corp., whose Pacific Gas & Electric utility unit exited Chapter 11 bankruptcy on Monday.

"A lot of institutions look to Calpers for leadership and are likely to follow its actions," said Paul Lapides, director of the corporate governance center at Kennesaw State University near Atlanta. "The practical effect will depend on each company and each situation."

The pressure builds for business leaders to play the game for the fans. I wonder how Calpers apply their litmus test. Warren Buffett does not seem to be a foe of stockholders. Maybe they should focus on governnment "watchdogs" and politicians that install them.

CometoseNation of One /Fleecing#11984604/12/04; 17:05:31

In 95 I went to school to learn the teaching trade....
I was required to learn in many subjects and write many papers. In a Learning to Teach Science class I presented a lesson on Tracking .......using the Tom Brown book "TRACKER" as my reference (it was a survival guide).......In my presentation to my peers on tracking principles (principles one might use for survival in hunting), I made a statement THAT WE TOO OFTEN TAKE FOR GRANTED THE SYSTEMS THAT ARE ALL AROUND US THAT WE BELIEVE IN (TRUST)BECAUSE THEY SO PARRALLEL THE SUN IN IT'S CONTINUAL ACT OF RISING. THE SUN IS FAITHFUL.........but our systems are not always faithful. We take for granted that what worked yesterday will work today and tomorrow. WHen we flip the switch, the light comes on . When we turn the tap , water comes on . When we hit the on switch of the clicker, we are immediately comforted by TECHNICOLOR entertainment of a vast horizon and only limited by the imagination of its producers(sadly rife today with base material to appease the longing (lusting , lonely) soul )...I mentioned to someone yesterday that no matter what happens , our time is filled, as it slips away, by our choosing.
At a time of such redundant stability which gave way to fluid comfort , ease, relaxation and slumber , our fleecing will come...Therefore , be vigilant; for your adversary as a lion walketh about seeking whom he may devour.
Is it not easier for the predator, whose job it is at times like this to Precipitate crashes, to anesthetize his victim sheep prior to fleecing them .........and thereby bring more blunder to their wonder as he passes off to them the BURNING MATCH . The BURNING MATCH's glory fades when there's no one left to share the fervor and when no greater fool remains to bid the share price one cent higher.

otish mountainMore silver demand in the works#11984704/12/04; 17:59:29

Thought this release would be of interest to those who follow the use and demands on the other metal.
Great Albino BatOn the Greenspan Fed, Crime & Punishment...#11984804/12/04; 17:59:55

One of the oldest principles of Justice is that it shall be dispensed swiftly.

Whether it is the case of a straying hand in the cookie jar, or the expense account of a CEO of a multi-billion dollar company; or whether the crime is tying a tin can to a cat's tail, or bludgeoning an old lady to death with a meat cleaver, Justice must be swift.

In the old days of two hundred years’ ago, criminals were speedily sentenced, and hung from the gibbett at the nearest crossroads, where their bodies hung until they fell off.

Hanging was perhaps overdone in England, but anyway, as a consequence, today you still find the English a very gentle and courteous people (probably mostly outside the big cities!)

This didn't just happened by accident; it is the result of centuries of terrible and swift punishment for offenses against society, that produced this gentle attitude: the nasty people were long ago removed!

Now today we have another sort of criminal behavior going on, and it is not punished at all; in fact, most everyone thinks it is just the right thing to do: I refer to "managing the Economy" and "managing the interest rate".

Few people today would classify this as criminal activity, and yet, so it is. Fooling with other people's money by decreasing its value, is CRIMINAL. To shrink the value of someone else's money, is to rob from him what is his. That is absolutely criminal behavior. And yet we think nothing of it – or most people don't, at any rate. Paul Krugman, for instance, has generously offered his advice to the Japanese government, in the sense that it would be the right thing to do, to devalue their currency. (This was some four or five years ago.) Think of it – to cancel a good part of the savings of an entire nation! This is astonishingly arrogant criminality by a "renowned" economist!

The longer this goes on, the worse the damage done by the criminal behavior – by which I mean, the greater the loss to the holders of money-substitutes (not gold!). But that is not the only loss going on. An incalculable amount of human activity is based on the illusion of profits which is produced by the soft money we use. Decades of hard work have been invested in enterprises which, to survive, must see a continuation of soft money policies.
Much of that hard work is doomed to go down the drain as worthless effort, the day that the soft money policy hardens just one teeny bit.

We have not wanted swift Justice and fitting punishment for crime. Perhaps that is the problem of "democracy", as Fred Reed (?) I believe wrote recently; "democracy" as he sees it, is the result of (or maybe the cause of!) the feminization of society. Feminization of society means that no one can take the spectacle of a criminal's body hanging from a gibbett until it rots (See the "Pirates of the Caribbean"? Maybe a leaf in the wind showing which way it will soon blow…)

You take pity on criminals, you have mercy on robbers and murderers, and soon the sewers begin to vomit forth their vermin throughout society, along with their stench.

Human society cannot afford pity on criminals. It cannot afford institutionalized robbery through "money management" of "money substitutes" (read: FIAT)

We can't have it both ways. If we continue on the present path, we will end up at a dead end which is called: the collapse of a civilization.

Is that going to be where humanity is going to end up? If the USA has its way, Yes. The Europeans, Russia, the Chinese, the Islamic countries and India may have other ideas. Who is going to prevail? No one knows, at this point.

Gold. I cannot conceive of a worldwide abolition of gold. I can conceive of a very troublesome period ahead. Will having gold make a difference when TSHTF? This is a question of luck, a question of the fortune of each individual. There are no guarantees – this is a tough world and it will be much tougher to survive in it, than the fabled "Wild West" ever was.

But, I'll tell you one thing. It will be best to approach that coming world with a stash of gold, than without it. Get some today!


melda laureWhat are the units of Gold/DXY ?#11984904/12/04; 18:05:43

I still say it should be done $GOLD * $USD. There is no turn around in 2001. The turn around happened much earlier- (probably coincident with declining LBMA volumes?) I see it going back to pre-2000.

If $GOLD is measured in dollars per ounce, and $USD is in currency baskets per dollar, then the function $GOLD/$USD has units of Dollars-squared per ounce-basket. (Dollar volatility is amplified). The PRODUCT of the two functions, however, should have the units desired: currency baskets per ounce. In fact it looks a lot like $GOLD/$EUR, but less volatile. I dont have full priviledges on stock so I cant tell you how far back it goes.

The anomaly (if you like- though this is a confusing way to find it) you noticed circa '85 is due to Gold being a little bit weak, while the dollar was MUCH weaker.

So that's my opinion.

POG. Dollars in the numerator.
DXY dollars in the denominator.

I realize this sounds silly, because we are all used to taking our favorite gold stock and divide by Price Of Gold to get the relative performance, or "gearing". Because both these measures (gold, gold stocks) are correlated we can DIVIDE to get a relative measure.

However, Because DXY and POG are anti-correlated, we must MUTLIPLY to get the relative performance.

Go ahead, whack me with the ninnyhammar. I did it wrong the first time too you know.

auta lome! i aure mallion entuluva!

Dollar Bill.,.#11985004/12/04; 18:11:49

GAB, Im with you on that. I prefer the old way and the local way. But I am definately out of the power loop!
a nation of oneGoldilox (04/12/04; 14:11:13MT - msg#: 119842)#11985104/12/04; 18:49:34

a nation of oneslingshot (04/12/04; 15:58:40MT - msg#: 119844)#11985204/12/04; 18:53:20

Just the mere concept of government is itself already a corruption.
a nation of oneCometose (04/12/04; 17:05:31MT - msg#: 119846)#11985304/12/04; 18:57:04

Long since, the choirs have sung, deep in the
caverns, "The pillars are gone. There is nothing holding
it up!"

a nation of oneGreat Albino Bat (04/12/04; 17:59:55MT - msg#: 119848)#11985404/12/04; 19:00:52

"One of the oldest principles of Justice is that it shall be dispensed swiftly."

Unfortunately, the judges have read the term "due process" as meaning "all the process that is possible."

Carl HWarren Buffett#11985504/12/04; 19:35:03

Anyone notice the interesting timing of the pressure against WB. He (probably) holds 80MOz of Ag and the powers that be are having trouble controlling the price, so they start pressuring him. I get really disgusted by the powers that be. What a farce.
Topazmelda.#11985604/12/04; 20:02:41

Speaking of doing things wrong, in a Chocolate induced stupor I netted out $Gold/DXY and tossed a 50ma into the mix... It looked as tho $Gold was leading DX but when sanity returned, the opposite was the case. right method imo...wrong deduction, duh!
Your comments ring true from my understanding. Perhaps Sme was looking at something else.

GratefulForGoldGAB @ #119848#11985704/12/04; 20:31:46

"We have not wanted swift Justice and fitting punishment for crime. Perhaps that is the problem of "democracy", as Fred Reed (?) I believe wrote recently; "democracy" as he sees it, is the result of (or maybe the cause of!) the feminization of society. Feminization of society means that no one can take the spectacle of a criminal's body hanging from a gibbett until it rots (See the "Pirates of the Caribbean"? Maybe a leaf in the wind showing which way it will soon blow…)"


I am still mulling this one over. It seems devoid of any "gray" and so very black and white.

Because the women/mothers of the earth don't care to see the spectacle of a man's (criminal or otherwise) hanging body until it rots -- does this necessarily mean we are opposed to swift and sure administration of justice/punishment? Because we oppose much of (primarily) the male specie's inhumanity (brutality and cruelty) towards man, woman and child -- does this make us incapable of knowing and administering justice/punishment?

I think not. I don't think we can blame "feminization" of the world (if, indeed, any such thing has occurred) for the lack of morals and man's continued greed and dishonesty. It's been (primarily) the male lawmakers of this country who have, a la "good ole boyism," either made self-serving, ineffective laws, or have failed to enforce the laws regarding the "white collar crimes" that are destroying the economic fabric of this country. And their counterparts throughout the world have done the same.

The laxity of enforcement of proper punishment lies not at the feet of women or feminism. Can we blame the lawyers? Can we blame Congress (which is primarily comprised of lawyers)? Can we blame the fact that man's inherent (and not yet transcended) nature of greed is still allowed to prevail without conscience in the halls of power?

Actually, I don't know whether placing blame is relevant. I certainly don't want to live in a society where your hands are chopped off for stealing a piece of bread. Surely, punishment should fit the crime. It just seems that those who have committed the financial crimes of which you spoke consider themselves immune and outside the confines of common law. They're going by the letter (which is open to numerous interpretations) rather than the spirit of the law. Their fellow (primarily male) lawmakers have left them many a loophole through which to slide, and their fellow (primarily male) law enforcers seem content to maintain their small positions of power and not rock the boat. Let's blame "politics?"

Indeed, that is sad and it's even sadder that gold and silver are two of our very few options to attempt to offset their injustices. That said, I am certainly grateful that I have the option and opportunity to buy and own physical gold and silver in my small efforts to preserve and protect my meager assets. Hopefully, it may make a difference in the lives of some very decent people.

Until then, I prefer to think of the "feminization" of the world (if it exists) as perhaps the attempt of life to tame and temper its rawness, cruelty and violence with some small measure of compassion, consideration and love. To each his/her own!

My best,

Lady GFG

GoldiloxCalPers#11985804/12/04; 21:30:19

@ Carl H:

CalPers will probably push for some "regulatory" types to sit on the boards and kill the companies through inaction and inexperience.

It would be ironic if their efforts to "clean up" corporate governance became a catalyst for Bear Crash #II to infect the stock market.

GoldiloxEric Fry, from the Street...#11985904/12/04; 22:18:43


- Given the hostilities in Iraq, the nervous trading in the stock market and the rebounding oil price, it's little surprise that hedge funds are adding to their gold positions. According to the Commodity Futures Trading Commission, hedge funds raised their gold holdings for the fifth straight week. "Hedge funds and other large speculators bought 144,252 more gold futures than they had sold [last week]," Bloomberg News reports. "It was the biggest amassment of gold futures by hedge funds in more than 20 years."

- Hmmm...what do the hedge funds know?


Given the strength of POG against the US$ strength, the admission by Sinclair that he is buying back in, and now this, I am also ready to

Buy with both hands
There is no Inflation

Black BladeSolomon and Boilermaker#11986004/12/04; 22:29:38

Solomon - Great!!! Notice that Gold is becoming more rare as the global population is growing faster than the ability to produce it. Foreign miners are feeling the pinch as their costs are rising with a weaker US dollar and stronger foreign currencies (note - the SA Rand as an example). Meanwhile rumors abound that mainland China is quietly accumulating Gold and with a couple of deals to uy directly from miners (one I believe is SA producer Harmony Gold). Everyone knows that US bonds and Treasuries are horrible investments now and any country buying these paper instruments will suffer badly when rates begin to rise from their 40+ year lows. To be honest I am amazed that Gold remains below $500 an ounce priced in US dollars in the current environment (economic, geopolitical, and the supply/demand fundamentals).

Boilermaker - I think that many are concerned that Warren Buffett is spread a bit too thin with all his works in progress and his alignment with CA Governor Schwarzenegger. It is no secret that state employees are not happy campers with the governor as job cuts and less spending at the behest of Mr. Buffett and others spurring him on. Therefore the reason behind CalPers abtaining from the proxy vote.

Wish I had the time to post more but my current client has me tackling another project that is taking much more of my time than anticipated. Still I find time to follow the forum.

- Black Blade

CometoseHyperinflation #11986104/12/04; 23:06:10

This article is dated and excuse me if this was posted already ...

THis is a fascinating article ......on the perhaps nuclear fallout in the financial system ; It might have something to do with the self fulfilling prophecy with regard to the supply coming off the shelves globally......and an answer to why some people are buying gold ...
it may make clear many things....and the timing of them of late......

Great Albino BatWhoops! Sorry to step on your toes, Lady Grateful for Gold!#11986204/12/04; 23:07:09

I am glad I put Fred Reed on the spot and not myself. "HE said it."

However, with all due respect, I do think that feminization has something to do with the excessive consideration shown to convicted criminals, when after their innumerable appeals at public expense, they are finally convicted.

Pres. Bush has been severely criticized for allowing so many people to be sent to the execution chamber. He has reportedly relished turning down appeals for mercy. As a president of a democratic country, he should have had more sensitivity and not let his satisfaction in seeing Justice done, become too apparent. I do not like Pres. Bush's policies, but I can't fault him for turning down appeals for mercy by murderers.

Feminization may not be the sufficient cause, but it may be an auxiliary cause of this humanitarian concern with the "rights of criminals". (As if a person who has violated another's rights, has any rights of his own left to him.)

"Democracy" is the primary cause of the pampering of criminals today. The mass of the public is motivated by the heart, and the public's heart is fickle, it changes in minutes, it cannot stand to see anyone punished, because the public cannot fix its attention on anything for more than two minutes at a time, and of course, the crime attributed to the criminal, happened LONG AGO and to SOMEONE ELSE. Whereas, he who is now to suffer, is the criminal, here and now. This the public cannot stand. It will not tolerate Justice. It sides with the weak, in this case, the CAPTIVE criminal.

And, since "democracy" took a giant stride forward, without advancing one inch toward improvement of society, when women were granted the vote, this situation has only worsened. Are things AT ALL better, since women won the right to vote? Is voting any use AT ALL, for that matter, when all that is achieved is to change the name of the person in charge, but not the master?

"My post has no gray, all black and white." That's right.

"My object all sublime
I shall achieve in time:
To let the punishment fit the crime,
The punishment fit the crime."

Of course, we are not talking about cutting a hand off for stealing an orange. But for stealing over $20 thousand dollars, maybe Yes?

Then again, Lady Grateful for Gold, what about whipping or caning? Remember that American kid caught scratching up cars in Singapore? The penalty was several months imprisonment, and then a good thrashing. Oh, the poor little boy! "Poor" young brute, I'd say. Even President Clinton appealed for "Mercy" for this delinquent teenager who knew very well what he was doing. Appeal denied!

"Democracy" does not want to punish anyone. No, Ma'am. So, are we surprised at what we get? Why is the War in Iraq censored for T.V.? Of course, because the horrifying scenes of murder cannot be shown to a democratic people. (Even if the war were justified, which it is not.)

This too shall pass! Enough ranting. Off to my cave, wherein I shall contemplate my golden pile as I hang above it. I too am grateful for gold and please receive my respects. Buy more when you can!


melda laureGAB #119848#11986304/13/04; 00:11:19

Greed, compassion or justice, they all must be paid for. And as long as money is too easily got, they will be paid for and "malinvested". By funny money we are allowed the "compassion" of medicare and SSI, we afford massive tort payoffs and Ken Lay and his sorts. We easily afford the "compassion" of IMF bailouts instead of the risk-adjusted limits of prudence over greed. And lets not bring up incarceration ratios- both ludicrous and pathetic.

Gold is a mirror, it mirrors greed, it reflects virtue, but paper is an anesthetic. Where paper dominates, all esthetics are numbed as though on a dose of coca leaves: our compassion becomes misdirected, our justice ineffectual and our greed grows wild yet without bearing real fruit. Cost-benefit analysis becomes pointless when at the last, the denominator as well as the numerator are fuzzy. What price compassion when all prices are vain?

Big communism died swiftly. Liberal democracy is dying more slowly. No system of ethics can withstand the onslaught of unlimited theft, why should we think that any could endure forever unlimited credit?

It is fiat that should be on trial, it is the canker, the void at the center of our misguided cosmos blunting all our moral senses. It is THE LIE we embraced in place of gold: forgetting that while virtue measured in gold is crass, yet virtue measured in fiat is a laughable fantasy. But we refuse to put it on trial- the cost of the truth is too great So we let Lay and Kozlowski off and crucify Martha instead. The declining oil is too scary, the bond bubble, the housing, derivatives.

We suffer a complete lack of real leadership. The kind that admits no easy answers and faces the hard road with eyes open. We are too busy getting re-elected and making the quarterly numbers. Look for no promises of blood tears and sweat; seek no wizard to gather together armies of men dwarves and elves. What leadership there is has the nature of a true cryptocracy, if not the guardians of atlantis then it is only the tiptoeing of giant pixies plucking the last nuggets before taking ship to valinor - it might as well be mars.

Sirs Belgian and Gresham have discussed whether all paper or only all gold paper will burn. I thought about that one long and hard for it seems impossible for all paper to burn. "Surely" I thought, "somebody, the Euro, the chinese, the aussies, the zulus" will cut the cancerous dollar out of the herd. Well, not while IR derivatives are alowed to clear, not while they grow at their present rate. Until then, THE LIE burns.

Compassion demands we cease our usurpations.
Justice demands we take delivery without mercy.

Socrates964Belgian#1198644/13/04; 05:43:18

Interested to know your thoughts on the latest Bundesbank episode - possibility of Schroeder manoeuvring a placeman like Koch-Weser into the top job.

It appears that the politicians and central bankers are at war, the former like a plague of locusts who want to consume all of Europe's monetary seedcorn because they are starving right now, and the bankers taking on the role of prudent farmers thinking of next season's harvest.

The interesting thing is that the gold community castigated Welteke for his numerous and laughable calls for gold sales, and yet his head appears to have rolled for opposing Trichet's rate cut and standing up for monetary orthodoxy (a policy of decimation pour encourager les autres).

Was it that these calls were not really calls at all, but merely a kind of pseudoconcession to the politicians that wasn't really a concession at all?

Now, 3 questions:

-Let's assume that the BB yields to pressure and Koch-Weser is appointed. Aren't his hands already tied by the new Washington Agreement? It seems to me that the bankers rushed it through because they knew how urgently they needed to ringfence Europe's gold from its politicians.

-Is the question of gold reserves now becoming an effective political weapon for the CDU/CSU? One of the great enigmas was why the British Conservatives never went after Gordon Brown for selling half the UK's reserves at the bottom of the market. I never got very far with my enquiries but everything pointed to the fact that the Conservatives themselves were too scared to proceed, presumably because interests of their own were involved in the sales.

-I wonder about the Euro. Unless we are about to see a major sell-off in gold and oil (not on the cards, IMHO), the Euro can't fall very far without a) importing considerable commodity inflation and b) advertising the fact through a POG that breaks technical resistance at E352 or thereabouts. It thus looks to me like European politicians are involved in a collective exercise in digging their own inflationary graves.

Socrates964TA#1198654/13/04; 05:55:45

I've mentioned this before, but according to P&F, we're at an interesting juncture in that an excursion below 412 (on spot) followed by a reversal to above 428 would shift our upside target from 456 to 480.

If I may be permitted an excursion on gold stocks, it really does seem to me that traditional buyers are strapped for cash while new money is entering the sector but only seeking the bigger names.

In this way, my bigger holdings (GSS and NEM) are holding up quite tolerably and when they sell off, do so on reduced volume. The juniors, on the other hand, have gone into a massive slump, probably due to the fact that they issued too much paper at the end of last year. It really is quite astonishing, however, to see how far some of these juniors have fallen. This is evidently not the place to go into details, but I smell opportunity.

In this sense, perhaps Frank Veneroso is right. Commodity prices have got ahead of themselves....if measured relative to gold.

masInteresting times#1198664/13/04; 06:59:08

We drop 10 bucks on numbers that aren't verified (reads cooked)? Oil still at 37 plus change. CRB above 280.
So what's all the temporary excitement. Oh right it's an election year. Funny doesn't look like the numbers will reach November with oil at 37++ though, so what's going to be cooked next?
There are a lot more smarter people out there that can see all this and I'm very sure they have traded away from this cooked books reporting, so who's left. Gov and the rest?
I smell inflation here and moving fast. Watch!
Got Gold?

Aragorn IIIInto the West#1198674/13/04; 07:16:09

melda laure, the perspective of these observations may be of interest to you.

If you read to the end you may find the analyst, Mr. Spengler, offers a working grasp of individual and national social (cultural) motivations. It is also evident that a monetary lens is sorely missing in usage by the author. I would encourage all readers to employ that filter during interpretation to derive greater applicabilty from his commentary.

For convenience I will reproduce a briefest possible sketch and Spengler's conclusions.

>>>>>>>Tolkien took by the horns the great ideological beast of his time. After the Great War, the newly-hatched Existentialist philosophers were shocked to discover that human beings fear for their mortality. In fact, it is quite a commonplace thing to die for one's country, provided that one believes that one's country still will be there. The pull of cultural identity is so strong that men will fling themselves into the jaws of death if they believe such actions will preserve their culture.

(For his elaboration on that point see also Spengler's old verses: )

But what if culture itself - the individual's connection to past as well as future - is in danger? Now, that is really being alone in the universe. Death to preserve one's people is quite a tolerable proposition. The prospective death of the entire people along with its culture is what creates a particularly nasty type of existential angst, the sort that produces a Hitler or an Osama bin Laden.

Small peoples of the Dark Ages, such as Beowulf's Geats, had to think about such things because extinction was the normal outcome. The theme of national extinction permeates the entire work. "It is not your own shire," the High-Elf Gildor reproaches Frodo at the outset of his journey in the forests of the shire . "Others dwelt here before hobbits were; and others will dwell here again when hobbits are no more." Minas Tirith, for that matter, houses only half the population it could comfortably hold, as its ancient race of men fails to bring children into the world. Gondor's military weakness stems from its declining population; the army Aragorn leads to the Black Gate in the last battle numbers fewer than the vanguard of the army of Gondor in its prime. Mordor encroaches because Gondor cannot man its borders.

In Tolkien's Anglo-Saxon sources, the extinction of the nation lurks behind every setback. From the vantage-point of the trenches of the Great War, though, this echo of the Dark Ages took on a new and terrible meaning. The peoples of Europe came out to fight for their predominance and nearly annihilated each other.

Today's Europeans are willing themselves out of existence. The two world wars of the 20th century destroyed the national illusions of the European peoples, their pretension to strut and swagger upon the world stage.

In Middle-Earth, as in Europe during the Great War, it was not the mortality of the individual, as in Goethe, but instead the mortality of nations. No serious critic will give Tolkien a place in the literary canon, because his characters generally are stick-figures speaking in stilted declamation. But that is beside the point. He has little time to waste on the petty concerns of the sort of character that populates modern fiction. His concern is the doom of peoples, or, to coin a phrase, the decline of the West.

Immortality was not enough for the Europeans. That is, Christianity in the confessional, and universal Christian empire in politics, offered the Europeans a form of immortality beyond the existence of the nation. Europe fell from grace when its great constituent nations decided that this sort of immortality was not enough for them, and that they should instead fight for temporal dominance upon the earth.

It is tricky, of course, to draw analogies between the pride and folly of Feanor or the Numenorians in Tolkien's fantasy, and the pride and folly of the European nations in World War I. But it was a commonplace observation after 1918 that the great European tragedy began with a misguided attempt to cheat mortality through the assertion of national supremacy. One cannot make sense of Hitler's rise to power without observing that many Germans believed with all their heart that the existence of the Volk was in jeopordy.

...Man must accept not only his own mortality, but the mortality of his nation, the extinction of his culture, the silencing of his mother-tongue, and look instead toward salvation beyond all mortal hope. That is what Christianity offered the pagans during the Great Extinction of Peoples after the collapse of Rome.

But the European nations threw off the bonds of universal Christian empire and, through Wagnerian nationalism, sought immortality within the mortal realm - the tragic flaw of Feanor, Galadriel and the rebel Eldar. The Great Wars and the fall of Europe were the consequence. Except in the imagination, there was no going back.

The sea-passage to the West, in Peter Jackson's interpretation, represents death. It might just as well represent immigration to America. Unlike all other peoples, Americans need not fear the extinction of their cultural identity, because they have none to begin with. That is America's great weakness but also its abiding strength. It is the reason that America well may endure for all time while the Kulturnationen dissolve into the dust of the libraries.

Americans bridle when told that they have no culture. But what can they name whose loss would destroy their sense of national identity? Erase the memory of Homer, and what becomes of the Greeks? Forget Herman Melville, Mark Twain, William Faulkner, and even The Simpsons, and Americans still are Americans.

If German or French no longer were spoken, the concept of "Germany" or "France" would become meaningless. At the time of their revolution, Americans considered German as a national language. A century from now they might adopt Spanish. America can withstand the loss of the English language itself. As long as America's political covenant remains intact, Americans can change their "culture" as often as convenient. America may fulfill the Christian project, as an assembly of individuals called out of the nations, cut loose from their heathen heritage - an outcome Tolkien could not have imagined.<<<<<<<<<<

Overlooked by Spengler, it could be argued that an American national identity has indeed be forged upon, and could not easily suffer the loss of its unique U.S. Dollar Privilege -- the exporter of leisure's penstrokes as international reserves.

With an eye to the concluding paragraphs, could it not be said that Europe has learned from the hard lessons of its own history? In its visionary pursuit of the notably NON-national (multi-lateral) currency union project upon a foundation of unconstrained (free) gold, it could be said that Europe is sailing now into a "truer" West -- skirting completely the rocky experience of the NATIONAL(!!) American dollar's lonely isle shores; sailing on the ships of the euro design into that Blessed Realm beyond.

Not since bright Earendil on Vingilot has there been a remarkable, unprecedented voyage such as we are seeing embarked upon here. The shine of gold in these days shall be his Silmaril's rival!

got gold?

7nomadsToday, maybe last chance for reasonable gold and silver prices!#1198684/13/04; 07:20:17

Bush's press conference tonight.
"What to do with Iraq".
Deja Vue,
Vietnam II,
Win or Lose

Eastern Mentality doesn't lend itself to surrender. That's why we dropped the A-bomb on Japan. We knew they wouldn't surrender.

Middle-eastern mentality doesn't even know the word.

Hate to see us destroy ourselves needlessly. Gold and Silver are going to fly, but I worry where my young teenage sons will be in a few years.

masHmm....#1198694/13/04; 07:24:30

-I wonder about the Euro. Unless we are about to see a major sell-off in gold and oil (not on the cards, IMHO), the Euro can't fall very far without a) importing considerable commodity inflation and b) advertising the fact through a POG that breaks technical resistance at E352 or thereabouts. It thus looks to me like European politicians are involved in a collective exercise in digging their own inflationary graves.

EU politicians have no say. (Euro CB is the authority). Transitions takes time, and what you are seeing is the what you say above. As Belgian says, the yes's mean no and the no's mean yes. We have too, for whatever reason, keep the US Gov happy with what we say but don't do.

So the next move is, move Euro gold above 350 now. Keep everyone honest? So Gov. priced gold has to move up accordingly? Trying to lower the exchange rate, idiots! They are caught.

Next move, okay another Yen intervention. Will Japan buy? Will China buy? And why should they?

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Socrates964Oops!#1198714/13/04; 07:27:32

My mistake. To set up 480, we need to trade below 408 to set up a 7 column range. Not far to go, though.$GOLD

MKNew & Views#1198724/13/04; 07:28:04



Is it back to the '70s for gold?
John Ing detects strong parallels now with rally to US$850

Howard Ruff back on gold scene with new book, says gold going "way over $1000 per ounce

Trader Survey: Dollar to Decline Further This Year
Japanese bank says euro going to $1.36 . . .

German opposition asks if gold position behind efforts to oust Welteke, (AFX)
Commodity price surge: Lost in inflation, Reuters
Japan's foreign reserves hit record high, Reuters
Dollar - gold relationship fracturing?


You are invited to visit now, often. Updated regularly. Stay abreast the gold market via News & Views, this forum and the Daily Gold Market Report.

This is the website where serious gold investors congregate and keep in touch with the market. Please bookmark this page.

TownCrierMuch ado about...#1198734/13/04; 08:16:20

Surely there's no legitimate basis connecting today's price movements with the latest rustlings out of France. In effect, they would hereby only be "owning up" to their portion of the previously announced second phase of gold sales under the renewed Central Bank Agreement on Gold.

HEADLINE: Paris insists no decision taken on gold sales

PARIS, April 13 (AFP) - The French finance ministry said Tuesday it was just thinking about using some of the country's gold for future investments or to reduce debt after press reports said talks could begin this week with the Bank of France.

The financial daily Les Echoes said Tuesday that ministry and bank officials would mull possible gold sales after Finance Minister Nicolas Sarkozy said last week that the idea was worth looking into.

Any proceeds from such a sale would be minor compared to the massive French debt however......... represent(ing) little more than a symbolic gesture by officials pressed between serious deficit problems with the European Union and an electorate that slammed reforms in regional elections last month.

It would signal that the government, in an example of rigorous management of resources, was pulling out all the stops to come up with cash, and not just asking individuals to bear the brunt of painful reforms which have, typically, sparked street protests and strikes.

In 1999, the so-called Washington Agreement by leading central banks, while stressing that gold remained central to the financial system, set restrictions on their gold sales. The agreement was renewed on March 8 in Basel, Switzerland. ......... Under the accord, France may sell 100 tonnes of gold a year for five years, earning about EUR 1 billion (USD 1.2 billion) per year at current prices.

One idea under discussion now is to put money earned from gold sales into a special Bank of France account and draw on interest, which at an average rate of three percent would earn EUR 33 million a year, the daily Le Parisien said Saturday.

While that might pay for researchers' salaries and material needs, it would not even dent the French debt, which is nearing a trillion euros, or interest paid on the debt, which comes to around 40 billion, according to experts.

--------(above text from url)-------

At the risk of repeating what's already been said, the mismatched scale of the numbers involved here goes a long way in exposing as an absolutely laughable farce the low valuations being dished out by the derivative-based method of price discovery. Clearly, prices at these levels are not a certain reflection of the value of tangible gold, but are rather representative of the uncertain value of potentially unlimited gold contracts.

When you identify a fundamental imbalance of this magnitude, it often pays handsomely to wade in and take action, scooping up the bargain with both hands.


The HoopleBoy, they're good#1198744/13/04; 08:17:10

Silver margin increase last Wednesday, abbreviated world trading Friday and Monday, and at the most vulnerable moment for a weak long- BAM! It also doesn't hurt that gold and silver get smashed just prior to the Bush address tonight. I remember growing up in a small town where a little gas station would close for the day, then put up his gas price 5 cents lower than his competitor. He never had to honor the price. This will be the CRIMEX one day. Hell, silver will be free- they just won't be able to sell any to you. Bonds tanking, equities tanking, just another day in the bizarre world of gold and silver.
Cavan ManHoople#1198754/13/04; 08:36:31

It's a BIZZARO world of investing.(period)
Great Albino BatThank you, Melda Laure, for your excellent reply!#1198764/13/04; 08:44:36

On the gravestone of our civilization will be written:



KiloJohn Ing ... "Is it back to the '70s for gold?"#1198774/13/04; 08:48:02

I'm beginning to wonder if he perhaps meant the $370s, or even the $270s.........

Yawn !

Clink!@ Kilo#1198784/13/04; 09:21:51

Remember, it's always darkest just before the dawn ! If you want some cheering, go to Sinclair's site :-

"The downside objective that we gave you, IOO (in our opinion), for gold was between $408 and $414 and here we are. If I am wrong, then gold might sneak slightly under $400 but not for long. This is, we believe, the bottom from the high of $433 and the base from which we start our march towards $480 and beyond. As soon as the dollar rally fails - and it will soon - gold will come back to $420, then $430 and then $480 plus, IMO."


The HoopleAnother pre-emptive bashing?#1198794/13/04; 09:31:12

Many times in the past gold would get a pre-emptive bashing just prior to a wildly gold bullish event. Gold would then be starting from a much lower point when that event occurred. Based on that premise, and today's action, I'd say something real ominous for the fiats is right around the bend.
KnallgoldWelteke#1198804/13/04; 10:02:01

Somehow,I don't believe the rate cut feud is the reason for Weltekes "ongoing absence".This story was just put up for the more skeptic part of the public IMHO and to cover the Golden implications.Altough I can't find Another convincing explanation at the moment,but I guess we will find out down the road.
mikalNature#1198814/13/04; 10:06:54

Depending on the circumstances in which
it finds itself, nature including gold
and man himself, should and ultimately do,
perform four techniques of virtue, volatility and victory:
To be flexible as a willow
To be free flowing like water
To be empty as space
To be hard as a diamond

Mr GreshamEek!#1198824/13/04; 10:17:04

2 slams in 2 days. Who woulda thought they had it in them? The COTS oughta be interesting on this one. One of these times, just like this, will be right at/before the "Separation". They wouldn't be getting the final squeeze out of paper markets if they didn't.

Is this why the Chinese never chase the metals? (Or do they?) They know the West will set up more buying opps for them at regular intervals.

"And here I sit so patiently,
waiting to find what price.
Ya have to pay to get out of
Going through all these things twice."
Bobby D.

"To be stuck inside a gold slam, with those RGLD blues again."
Mr G.

Mr GreshamOptions#1198834/13/04; 10:19:47

And, yes, it IS options expiration week again. I just thought I wouldn't get caught napping this time.

Still glad to be a small dog. Practice this stuff when you're a puppy, and you won't get killed playing in the road when you're a grown-up canine.

(In other words, develop a healthy skepticism of one'e own "Good Ideas", before you lose some REALLY big money at it!)

GoldiloxOptions#1198844/13/04; 11:33:25

Mr. G;

I feel your pain. I sent an order cancellation in this morning at 7:38 and instead got an execution at 8:02. I'm appealing due to the length of delay, but I don't have great expectations.

The option ran down $0.30 in the period of my cancellation to execution, landing $0.20 below my executed price.


Belgian@Socrates : EU politicians versus ECB/BIS....#1198854/13/04; 11:45:53

There is the ECB(BIS) gold and there are the different National (emu-members) gold reserves, under the ECB's control !

The pulling and pushing between national politicians and ECB policies are part of an intriging game. Quite normal for such a gigantic euro-"unification" on its way to full maturity. Yes, indeed Socrates, the christian democrat factions are uniting around the "stable" euro and what will keep it stable, through thick and thin. As an aside, christian education isn't opposing the teaching of islam religion in its christian shools (quite a turn around).

But the euro-FreeGold-concept, must be "introduced", within Euroland itself, with the outmost precaution as to prevent any form of misplaced euphoria, if and when the FreeGold would be in sight. Same goes for the "euro stable in oil".
How does the * co-operation * between euro-euroGold and oilprices in € and $, do evolve !? Is the christian democratic faction within the EU going to force a breakthrough by letting the POO in €, pinch the politicians and calling them this way to the ECB/BIS' order, as to regain a majority, again !?

Remember A/GOA/TH's repeated mentioning of "political will"...needing to reach enough critical mass as to push things through ! We are simply seeing, only very littler of this powerplay, that reaches the surface.

A lower € exchange rate (unstable euro) and rising (or high) €-POO, would be desastrous for Euroland. Rising IRs would re-inflame the cost of the debts. This would be a very bad signal to €-co-operative oil(pricing) !!!

The early WAG II announcement might later be seen as an advertissement to gold-dissidents !? Let us wait and see if the euro can push the POG back up ? Or is the US-Treasury, already selling (real physical sales) some of its gold reserves, as to back up the dollar with gold-flow to oil !? The 6 dollar (and multiples of it) are certainly $-POG moves.

€-POG tripple top of 350 €/ounce is imTAo to be interpreted as a constructed ceiling (resistance) that will be broken (pierced), for fundamental reasons of course. I see $-POG support at $395/Oz.

Let us not forget that Vice President Cheney is touring Asia and might collect some (symbolic) $-support !?
Snow was very happy with the $-POO, either. His unhappiness was expressed in a very soft mode.

Soc, don't forget that all politicians want to be, remain, become heros and often claim that they organized/materialized heaven on earth. This is also playing, increasingly about the present beneficiary effects of the stable euro. The exporters within the EU internal oriented economy, need to be convinced of this net-positive, also. All this takes a lot of time, especially overhere ! But that's the way it is...will remain.

GoldiloxRetail Sales: Do You Really Believe?#1198864/13/04; 12:12:49


So while the retail sales figures look great, we look at at stories in alternative media, and find stories that have more specific allegations of Bushco strong arming of number generating federal department heads.


for example. And as that goes on, the attack on the prices of precious metals this morning only makes sense if you view the Bush administration's economic empire as being held afloat only by super cheap interest rates. Read the Washington Monthly's assessment of what happens should interest rates actually rise:

So, I sit back, have a second cup of coffee and say to myself "I really don't get it." The case for strong-arming is awfully powerful. Besides that Enron-like article linked above, I think back on how many Bush administration opponents have died in unusual ways.

Various White House figures made numerous recent campaign stops in Minnesota to stump for the ailing campaign of Wellstone's (the progressive Senator that died in a "mysterious" airplane crash) Republican opponent, Norm Coleman. Despite being outspent and outgunned, however, polls show that Wellstone's popularity surged after he voted to oppose the Senate resolution authorizing George Bush to wage war in Iraq. He was pulling ahead of Coleman and moving toward a victory that would both be an embarrassment to the Bush administration and to Democratic Quislings such as Hillary Clinton who voted to support "the president."

Wellstone now joins the ranks of other American politicians who died in small plane crashes. Another recent victim was Missouri's former Democratic governor, Mel Carnahan, who lost his life in 2000, three weeks before Election Day, during his Senatorial race against John Ashcroft. Carnahan went on to become the first dead man to win a Senatorial race, humiliating and defeating the unpopular Ashcroft posthumously. Ashcroft, despite his unpopularity, went on to be appointed Attorney General by George W. Bush. Investigators determined that Carnahan's plane went down due to "poor visibility."

So while the market wants to bash gold and silver and run up the Dow [the $, actually] again today on the pretext of the "good news about retail" I have to sit back detached from it all and remark, as my colleague Cliff at frequently does, "My, ain't the Universe an strange place?"


Add completely insane numbers to these funny deaths including Foster, whose remains were recently "protected" from autopsy by the high court, and the growing volumes of 911 investigation info in the internet. Conspiracy theorists should be frothing with material. As the late Frank Zappa once said. "Who needs to invent material for songs? Truth is stranger than fiction." Of course, Frank found himself dying from prostate cancer soon after embarrassing Tipper Gore in the Senate "Rock and Roll labeling" hearings. His crime was suggesting that Tipper could monitor her children's buying habits herself (instead of relying on the government to do it) if she spent a little less time at political fund raisers and a little more time with her children. I'm sure glad we're being ruled by "upstanding Christian ladies and gentlemen".

Got gold? They can't keep it down forever. Well, maybe they can, but the side effects are likely to be MUCH MUCH worse than a little poverty.

TownCrierAfternoon DMR updates typically available#1198874/13/04; 12:25:30

Also a steady stream of economic news on the 24-hr newswire warrants visitation at ANY time of day.


TownCrierCHANGE: Dollar losing cachet within Russian central bank#1198884/13/04; 12:35:10

MOSCOW : Russia 's central bank will overhaul its managed float of the rouble by replacing its exclusively dollar-based monitoring with a dollar/euro currency basket, Deputy Chairman Konstantin Korishchenko said on Tuesday. The euro would represent 10 to 20 percent of the basket, Korishchenko told reporters at an investment conference, but its weight would gradually rise to 50 percent.

The central bank is currently the main player on Russia 's forex exchanges, intervening when it thinks the market is too volatile or to guide rouble/dollar rates towards annual targets.

Korishchenko said the new basket would be introduced after the merger in May....

"The steps we are going to take mean less central bank influence on the foreign exchange market and make it easier for the market to find the balance itself," he told the conference.

-----(above excerpts from url)-----

Probably comes as no surprise to anyone at the forum.


Melting PotMZM Exponential Growth vs. Fed Funds Rate#1198894/13/04; 14:54:58

Ludwig von Mises
Inflation Must End in a Slump
Reprinted from the New York World Telegram & Sun, August 28, 1951.

"a boom, artificially engineered by monetary and credit expansion, cannot last forever. It must come to an end sooner or later. For paper money and bank deposits are not a proper substitute for non-existing capital goods."

"People must learn in time what the inevitable consequences are of the monetary and credit policies adopted by the present administration. They must realize that what the collapse of the artificial boom will establish will not be any insufficiency of capitalism, private enterprise, and the market economy, but the failure of the methods of financing public expenditure as practiced by the New Deal and the Fair Deal."

"For paper money and bank deposits are not a proper substitute for non-existing capital goods."

Got Physical???

"MZM Exponential Growth vs. Fed Funds Rate"

To sustain the current reality MZM must begin moving straight up...forever...

1776 to 1991 MZM growth 2 Trillion in 215 years

1991 to 2000 MZM growth 2 Trillion in 9 years

2000 to 2003 MZM growth 2 Trillion in 3 years

So from now until the end of 2004 MZM must grow by 2 Trillion and after that it must grow by 2 Trillion in 3 months then 1 month then 1 week then 3 days then 1 day then 8 hours then 2 hours then less than an hour and so on and so forth until we are down to nanoseconds and beyond...

Or the System will collapse...the end

Try all you want to deny it...the dawn of economic doomsday is upon us...


April 12, 2004 -- What's happening? Well, for one thing the Fed's keeping the money spigots WIDE open in its frantic efforts to get the US economy moving again. For the latest week ended March 29 M-3, the broad money supply exploded by $42.1 counterfeit dollars. Why do I call them
"counterfeit"? Easy because they're a counterfeit of real money -- silver and gold. Who says silver and gold are real money? Oh, just the Constitution of the United States. Really, then what are dollars? Dollars are pieces of paper (actually cotton and linen) that the Fed churns out in any amount and at will.

If the Fed's printing money at the rate of over a trillion dollars a year, how come we're not experiencing roaring inflation?

Here's the dreaded secret -- WE ARE!. The other secret is that our government is lying to us about the real rate of inflation. In fact, the government is so afraid of telling us the real story, that they're still "working" on the inflation rate figures for January, February and March. No word yet.

I just checked the latest figures on the US National Debt. The current figure shows that National Debt at $7.151 trillion. One year ago the National Debt was $6.460 trillion. That means that the US added $691 billion to the national debt or at the rate of $13.2 billion a week. How long can this go on and the dollar hold together? Talk of a nation's economy on steroids, you're seeing it here in the US. --Richard Russell, Dow Theory Letters

Yep, something wicked comes this way!

R PowellWOW....what a day#1198904/13/04; 15:22:00

Many analysts have been warning that greater volatility would come with higher prices. I've been echoing these warnings. The increased margin requirements necessary to play in the paper markets were also foretelling the same. Silver opened down and quickly triggered margin calls according to brokers I talked with today. I expect much more of the same to come but, hopefully, more towards the upside(g). I'm sure those weak paper longs will not agree with me but today was actually good for the metals. I sympathise with those hurting after today but great bull markets include violent and large reversals. Have enough been shaken off so that the bull will now be happy to once again advance?

Funny how soybeans retracted along with silver. Do you suppose there is any logical connection for them to advance and decline in unison? Weekly exports for soybeans were down a little and early USDA planting intentions indicate more acreage this coming year. What news triggered the gold and silver downturn? Was it just a stronger dollar? Imho, the fundamentals for gold, silver and soybeans haven't changed one bit in the last week! There is still a domestic shortage of soybeans and whatever the supply/demand situation was for silver last week, there has been no news to indicate anything has changed. So why the downturn? Paper games! Greed and fear, only this and nothing more.

How many investors are there that lamented the recent price increases as they "missed" the upside move? How many would have loved to buy well below last week's highs? Well guys, here's your chance. Here's that retraction you were looking for to buy! Paper or physical or some of each. Nothing fundamental has changed that I'm aware of, has it? But beware, even higher daily price movements are coming, most likely both up and down. Thoughts?

BelgianReflexions...#1198914/13/04; 15:25:16

Just finished watching a 2 hour long program on the semi EU TV channel, Arte. About the EU's embarrasment caused by 35%
Eurolanders, still thinking that 9/11 was a conspiracy !?
Those 35% are now painted as undemocratic extremists.

These kind of opinion-forming programs, are far from neutral and make one think about the WHY and WHO-questions of half lies mixed with half truths.

My conclusion, probably very simplistic, that the center right EU-parlement, wishes NATO to remain US-centric, with no tentatives of EU-alternatives, whilst the sneaky euro goes on challenging the dollar, in conspiracy with Arabian/Russian oil. This as an illustration of the hypocritical complexity of things golden and currencies.

Note that the Russian + Chinese hostages in Iraq, were released immediately !

How come that Russia + China are the only ones who openly state they favor euro and Gold, whilst Euroland is supposed to sell Gold and remains silent on the dollar(reserves)!?

Put all those surprising moves in paper-gold-prices against the above Big Picture background and continue to see the "opportunity" content of these events. Watch how goldmine paperholders are tortured with a factor 5 to $-POG.
Not funny, isn't it !?

GoldiloxMZM Post#1198924/13/04; 15:32:57

@ Melting Pot: great post

The chatter on CNBC today was all about the "lack" of inflation. One air(head) personality "explained" to Maria that huge productivity and lack of competition was "containing" inflation so that prices could not rise. Also, the story was repeated that raw materials were such a small component of inflation that they had a neglegible effect on pricing. Of course, the other side of the coin, real wages falling against those steadily rising prices, is never mentioned. Monetary inflation is also NEVER mentioned on this "so-called" business news portal.

The final conundrum was "why is the market not ecstatic about the upwardly revised retail numbers"? Perhaps the CNBC "investigative reporters" never considered that Iggie Investor and Connie Consumer are beginning to see through the veil of economic deceit every time they purchase groceries and fuel, the two most necessary components to their personal "standard of living".

We are witnessing the unraveling of a huge travesty forced on the public over decades of deceit. Why does not one political leader stand up against it? Those who have tried paid with their lives!

GoldiloxWhy Housing Is About to Go "Pop!"#1198934/13/04; 16:05:20


Too many red alerts are flashing for investors and the Fed to remain in denial when so much is at stake. If this bubble bursts, watch out

If you still need proof that a bubble is building in the housing market take a look at the findings of my economist colleague Dean Baker at the Center for Economic Policy & Research in Washington, D.C. He has tracked national housing prices going back to 1951. Prices pretty much track the rate of inflation up until 1995. But since then, average prices on new and existing homes have soared more than 35 percentage points beyond the overall rate of inflation. Is that unusual? You bet it is. . .

IN DENIAL Economists at the International Monetary Fund -- which to its credit has been warning about America's housing bubble for some time -- have estimated that a collapse could have as much as twice the negative impact on the U.S. economy as did the stock market crash in 2000-02.

It makes no sense to remain in denial when so much is at stake. Even from the most libertarian, "free-market" approach to policy, there's a public interest in disseminating accurate information so that markets can function efficiently. Bubbles are not examples of markets operating efficiently. In fact, they're the opposite. And the bigger they grow, the harder they burst.


I quoted the first and last paragraphs, allowing readers to get the "meat" of the article at your leisure.

GoldiloxNew jobs?#1198944/13/04; 16:22:51

snippet (from the Mogambo Guru):

- A nifty essay entitled "War Socialism at Work" by Sean Corrigan, who is one of those big-brained guys who demonstrates his smarts by 1) writing incisive essays that the world's intellectuals delight in discussing among themselves, and 2) ducking the phone calls from the Mogambo. He writes "50 years ago, there were two manufacturing production workers for every government drone in the Land of the Free..... since then the trend has been to an inexorable deterioration. If we had only stuck to the 1954-1999 trend - bad as it was - there would now be 'only' 178 Tax Eaters per 100 manufacturing Tax Payers; instead we stand slightly in excess of 215:100, which is more than one-fifth worse than we might have expected in just over four short years."

Since I am far too stupid to have an original thought, I fill up my days by lying to court-ordered mental-health professionals ("No, I never hear voices in my head!") and following the lead of people like Mr. Corrigan and scooping up what he says. So, let me 1) say that no, I never hear voices in my head and 2) this is only DIRECT employment, and does not count the millions of people who work for private businesses that are paid by government, as some ostensibly money-saving out-sourcing thing.


Gee, I wonder where all the new jobs came from? When all the God-fearing Socialist-haters wake up, they might just find themselves "socialized".

mikal@Melting Pot, All#1198954/13/04; 16:57:03

Many great posts today. But to mention just one, Melting Pot's, is MZM amazing or what? Of course there have been posts on this before by yourself and others. But may I ask two small questions?
Why do we only hear of this approaching conundrum so clearly right here and nowhere else?
And perhaps unanswerable is, why is this MZM situation and other major problems and bubbles like equity markets, debts, etc., coming to a head around the same time
AND around a US presidential election?

SmeagolGone Fishing#1198964/13/04; 17:29:06

Hmm.... perfect weather today for It, yess...sss... this looks like a nice spot on the River by the Trail, precious... it's been awhile since we've been fishing... back around 386, wethinks...

The Moon is low...let's wade out onto those rocks and wait, perhaps we can catch us ssomething, yess.........
...sss... no, we don't wants those..

...those aren't good either...

...THOSE are NASSTY.....sss....

...look there, precious!... ahh, yesssss... watch it,
closer....sss... jussst a liiiiittle closer....
SPLASH! HAI! Gotcha! O what iss it, precious, that we have caught? It looks like what the Castle-folk call a Canadian Golden Maple Darter. A very good catch, yess...


Well, we only caught one tonight, but there will be more chances... Bit by bit, ounce by ounce.


IT. Catch you some.

mikalNothing new, nothing to see here, move along...#1198974/13/04; 17:44:59

US Budget Deficit $72.70 Billion in March
April 13, 2004 2:05:00 PM EST WASHINGTON (Reuters) - Excerpt:
"The U.S. government posted a $72.70 billion shortfall between receipts and outlays in the month of March, the Treasury said on Tuesday, continuing its path toward an expected record annual deficit. In its monthly budget statement, Treasury said the March shortfall was bigger than the $58.89 billion budget gap seen in March 2003. It was also slightly above the $70 billion forecasts from Wall Street and the nonpartisan Congressional Budget Office. With the 2004 budget year half over, the cumulative budget gap so far hit $299.47 billion in March, up from $253.12 billion in the first six months of fiscal 2003."

Trust funds like social security can't continue to prop up revenues for much longer. And the "shortfall between receipts and outlays" cannot much longer be managed by accounting wizards still in their infancy. But when the experiment blows up in their face, they may leap into wide-eyed maturity.

GoldendomeJump in retail sales nothing more than inflation!#1198984/13/04; 19:03:56

Some tout the huge sell-off in stocks and bonds today as an indication that the Fed. will have to raise interest rates soon--I'm not so sure...the trade deficit, balance of payments and all. Perhaps just better to allow talk of higher interest rates while continuing to increase liquidity to try and keep the economy and housing in a new uptrend for the November election.

The thing that really spooked the markets of course was the retail sails gain of over 1% (for which month I forget, Feb. or March.) But the spooking is SOooo misconceived [a sure sign of the raging economy? Ha!]. My guess is that we are going to see decreasing sales very soon from the purveyors of goods. This retail sales increase can probably be attributed to ONE thing: higher fuel prices!! And that is ALL inflation! As anyone who has taken a four or five hundred mile road trip recently can attest to, even a gas mizer automobile, such as a Honda Civic has now turned into a Cash Guzzler. And pity those poor souls who routinly drive around in pick-ups and SUVs--still on the highways even--and even for long trips?!! Who can figure THAT? How many ways can they scream "No Mas"?

Every lose bit of spare cash is now going into fuel tanks and IMO it won't be long before it's going to show in the downturn of other purchase numbers.

OBTW- The federal price support for milk jumped by 8 cents this month, so be expecting price increases all through the dairy case, if you haven't noticed already. Yes my friends, inflation is certainly alive and well here in the good old USA and is distorting the sales figures greatly. -----Gdome

Max RabbitzWhy Gold Price Dropped Today#1198994/13/04; 19:04:28

From the CNN Money Site Lead Article:

"In particular, interest-rate sensitive stocks and sectors such as financials, gold, copper and utilities declined Tuesday. Such fears are not likely to abate in the near term, leaving the stock market under pressure." who needs gold when rising interest rates are about to destroy bonds, stocks, and real estate. Just load up on those peachy colored dollars and hope bad weather grounds Bernanke's helicopters.

Gandalf the WhiteTHERE they are -- The needed two big RED "O"s on the GOLD P&F chart.#1199004/13/04; 19:41:58$GOLD,PLTB[PA][DA][F!3!!]&pref=G

NOT to worry about the "High Pole Warning" of today, as the ROCKET is not filling with fuel for the trip to $480. and beyond !!!!
Gather the YELLOW while you may.
GOOD catch there, Sir Smeagol !! <;-)
Love those Darters.

Gandalf the WhiteOOPS ==> d a r n fingers --- can't type what the brain is thinking !#1199014/13/04; 19:44:16

NOW filling --- not NOT filling !

Cavan ManAragorn III#1199024/13/04; 20:07:45

Into the West we go....

...."Yet it is not our part to master all the tides of the world, but to do what is in us for the succor of those years wherein we are set, uprooting the evil in the fields that we know, so that those who live after may have clean earth to till."

Kind regards...CM

a nation of oneAragorn III#1199034/13/04; 21:01:52

Interesting. Deeply interesting, how you have managed to
tie all of these bits and pieces together in this
illuminating way. And Cavan Man, perfect reply.
Astonishing. Simply astonishing, both of you.

Naturally, there is a "however." But unfortunately it is
profoundly off topic. It doesn't negate what was said. It
does, though, color it in a pertinent way. That's
probably all I should say.

RemarxRe: Goldilox:: Retail Sales: Do You Really Believe?#1199044/13/04; 21:18:07

Thanks for the article pointers, Goldilox, particularly that in the Washington Monthly regarding the real estate bubble. They made very interesting reading this evening.
GoldiloxUS Dollar Crisis Takes a Vacation - Jim Willie CB - Hat Trick Letter#1199054/13/04; 23:08:21



Bear in mind that our biggest bilateral trade gap rests with China, whose currency is brilliantly pegged to the dollar. In the tradition of Sun Tsu's "The Art of War," the brilliant description can be applied. Their intention is implicitly both to gather capital from the US and to eliminate the mfg base as competition, to our nation's detriment and debilitation. China fixes a peg of their yuan currency to the USDollar, when the United States has its largest bilateral imbalance with China. Some call this peg a "Trojan Horse." From the US perspective, the image of a hemorrhage bleed and a device in place to block a tourniquet come to mind. When they raise prices for finished goods, US competition may be, by then, nonexistent. Higher material costs for Chinese firms may have begun to be passed along to customers. China will in time slow. Resolution when China moves away from its tight grip currency regime will deliver much pain to our debt-dependent and spendthrift society. See the Daan Joubert article, wherein he warns about having our wishes granted. Few realize that foreigners increase their holdings of US debt obligations by 1% of our nation's GDP each year, principally in sovereign debt. It is safe to say that as long as our trade partner China enforces a currency regime, …


Our Federal Reserve maintains accommodative monetary policy. Claims of a recovery fail to justify such low rates. An absence of job creation fails to confirm a recovery. The early April FOMC meeting reinforces the notion that the Fed has no plans in the near future to raise short-term interest rates. Foreign central banks must match our ill-advised low rates, or else suffer export business erosion. We watch early central bank skirmishes. The Fed has a gun raised to foreign CB heads, and they resent it. The Bank of Japan does our nation's bidding, in actual monetization of the bonds in USDollar denomination. They are coerced to subsidize our credit markets in order to protect their export economy. One could actually describe the Asian exporters who heavily purchase our nation's debt as the largest vendor financing project in history. See the Richard Benson article, wherein he claims the Japanese and Chinese have indeed capitulated. In his words, "They will buy any and all dollar assets necessary for America to live beyond its means, but they will do this only as long as we send them our jobs." What we are witnessing is mercantilism taken to the next stage of its perverse fiat currency evolution. One might call it intravenous credit.

Goldilox: from the neighbors, but JW's site is listed for more of his prose.

DruidUPDATE - China to keep yuan interest rates stable#1199064/13/04; 23:21:09

BEIJING, March 25 (Reuters) - China plans to keep yuan interest rates stable in the near term, the central bank said on Thursday, one day after setting higher reserve requirements for some banks to tighten credit and curb over-investment.

The bank would "appropriately control money supply and credit, support economic growth while preventing inflation and financial risks," it said in a statement issued after a quarterly meeting of the bank's powerful monetary policy committee.

Druid: This is not the best of timing as announcements go. We still have an election to get through this year and an economy that is "overheating". Over in our neck of the woods, we'll just keep rates as is for the foreseable future. Expect a whole lot of volatility going forward.

DruidChina Lifts Bank Reserve Ratio to Restrain Growth (Update1) #1199074/13/04; 23:53:28


"Capacity Concern

The government wants to slow investment in industries such as steel because of concern that capacity may outstrip demand, causing prices to fall and driving up bad debt at the nation's banks, already burdened with non-performing loans estimated at a fifth of total lending.

``There have been problems of fast credit growth and rising inflationary pressure since the beginning of this year,'' the central bank statement said. ``Fast credit growth will cause inflation and may lead to the accumulation of new bad loans and financial risk.''

The changes are the second time the government has tightened monetary policy in three weeks. The central bank on March 24 raised some interest rates for loans to commercial banks and lifted the reserve ratio for banks with lower asset quality to 7.5 percent from 7 percent. It said then that further measures might be necessary."

Druid: A different look at China's rate move. Can you imagine one of our CB's making such a statement in plain simple english?

MarkeTalkMusings on today's gold and silver market action#1199084/14/04; 00:00:38

Not surprisingly, silver is getting pounded again tonight in Asia, down about $0.24 to $7.21/oz. Technically, once a market takes a nosedive as did both gold and silver did today, margin calls usually force a further liquidation into the next trading session. But it would not surprise me to see silver reverse back up once the trade balance figures are released early tomorrow morning when gold and silver open. I am expecting at least a $42.5 billion trade deficit for March--similar to what was reported for February. Earlier, one of our esteemed posters quoted the US Treasury Department that showed the federal budget deficit for the first six months at $299 billion, up about $40 billion from the same reporting period in 2003. At that rate, we are on track to crack the $600 billion budget deficit barrier. And that is counting only the officially recognized "on budget" items. We all know the rest of the iceberg of debt is beneath the water in what the Congressional Budget Office calls "off budget" accounting.

As far a timing models go, I have noticed that selloffs last only a few days to a week before the uptrend resumes. The rallying cry of "buy the dips" which the stock bulls used in the 1990s can now apply to the metals markets. I am encouraging my clients at Centennial/USAGOLD to average down as prices drop into support. For gold, anything near $400/oz. looks like a steal. Silver near $7.25/oz. appears to be a good area. Having said the foregoing: always remember that runaway gold and silver prices are just one terrorist attack away. Whether a repeat of September 11th or something similar to Madrid's train bombing occurs, this is one event that nobody can predict or interpret from any graph. I would much rather buy my gold one day or one week or even one month too early than one day too late.


Topaz@Rich#1199094/14/04; 00:30:32

DX appears to have taken up the running and leading Oil upward, at least for about a Month ... reversing the prior "Oil first" trend.
The next Oil move is critical to G and S price direction imo.

USAGOLD / Centennial Precious Metals, Inc.Mining the coin market for additional opportunities in gold...#1199104/14/04; 03:23:26

Client Alert /Purchase Recommendation
United States $20 Gold Pieces
A diversification within a diversification

St. Gaudens $20 goldOver the past two years, as indicated by the USAGOLD Index of Historic U.S. Gold Coins chart, U.S. $20 gold pieces have been in a bull market.

A longer term index chart is also provided to show:

1. This bull market, if anything, is in its infancy and,

2. The potential upside given the long term chart's highs could be multiples the current level.

The purpose of this advisory is to alert our clientele about this opportunity and to provide some guidelines for your possible participation. The current down-tick, in our opinion, should be viewed as a buying opportunity to be capitalized upon quickly before the market resumes the primary uptrend.


The all-time index high occurred in 1990 at 5250. Currently, the index is trading in the 1750 range...(More)

Socrates964P&F#1199114/14/04; 04:58:54

Have been redrawing my charts according to my own methodology and now have it straight.

The trade below 404 some 10 minutes ago has ensured that a reversal to above 420.00 will set up a 7 column range with a target of 479.99.

This target will only shift down in the event of gold trading below 384.00.

Since this seems unlikely, I'm prepared to bet that $480 gold is now set in stone, hard as it may be to believe at this point. The P&F method nevertheless nailed the 368 to 428 move late last year and is usually reliable.

SundeckSilver/gold price action#1199124/14/04; 06:31:54

Fairly hard sell-off in silver and gold over the last few days follows similar sell-off in base metals over the last week or two:

Lead down 25% from peak
Zinc down 11% from peak
Nickel down 22% from peak
Copper holding up well, but down 5% from peak
Tin dropped 5%, but has largely recovered
Aluminium dropped 7%, but has recovered

So far silver sharply down 15%, (aided by margin increase).
Gold down about 7%

Looks like all the metals got a bit ahead of themselves. Silver not behaving much different from either zinc or lead IMO. ("Speculative" components being shaken out??) Gold's rise has been quite different from all the other metals...more prolonged and gradual.

USDX on upward tear...who knows why??? Dollar strengthening against the Euro and weakening against the Yen (both by about 7%, but Euro is the larger component of the index). Is this money flowing from the Euro to the dollar in anticipation of a Euro rate cut (and dolar rate increase?)?

The financial "tectonic plates" are grinding oh so slowly...


CoBra(too); 07:33:27

Inflation at 6% annualized! Of course that has to be why PM's took a bath?! The spin doctors are really doing a greta job. Gotta love 'em.

USAGOLD Daily Market ReportPage Update!#1199144/14/04; 07:43:01">
The Daily Gold Market Report has been updated.

If you are considering investments in gold we invite you to">request our free introductory information packet detailing the products and services offered by USAGOLD ~ Centennial Precious Metals. We welcome your inquiry and look forward to working with you.

MK; 07:45:55



Fed officials need to get out more, go shopping . . .
In the rarified atmosphere at 20th and C Streets, better known as the Federal Reserve Board, there is no inflation. . . . (More)

Howard Ruff back on gold scene with new book, says gold going "way over $1000 per ounce . . . (More)

Top Stories Wednesday

Consumer prices post fourth straight rise at .5%, Bloomberg
Traders hit sell button on hot U.S. retail data, The Globe and Mail
Theater of the Absurd, Richard Daughty/TheMugambo Guru


You are invited to visit now, often. Updated regularly. Stay abreast the gold market via News & Views, this forum and the Daily Gold Market Report.

This is the website where serious gold investors congregate and keep in touch with the market. Please bookmark this page.

DruidThe British rush for Russian gold#1199164/14/04; 08:55:41


"GOLD fever is gripping the City, but instead of drill rigs heading for Kalgoorlie or Anchorage, the new destination is far-eastern Russia.
Two AIM-listed stocks, Highland Gold Mining and Peter Hambro Mining (PHM), are already among Russia's biggest ten gold producers. And there are others waiting in the wings."

Druid: Excellent read. There's a lot to read into this article. Enjoy.

CometoseJobs Report and Retail Sales Numbers#11991704/14/04; 11:51:16

Does anyone believe these figures....The dollars been flying for 2 weeks now on two reports.....and the effect of those two reports has been the same as if we had raised interest rates ......if the price of Gold is any inkling or the price of the currencies which fell drmatically in Japan and Australia and the Euro has been taking quite a beating as well.

All of the Strong Economy talk based on two Reports that purportedly point to the same thing ..a "STRONG " ECONOMY.

an ECONOMY IN THE GEOPOLITICAL CONTEXT of TWIN DEFICITS an UNBRIDLED MONEY CREATION AND SPENDING BY A BANKERS BEHIND THE 8 BALL ( making promises on the future generations because they can't balance the budget or refrain from spending )



MY guess IS THAT THE BIG DERIVITIVES BETTORS ALL have their money on the opposite bet , that interest rates don't rise.

I think that GOLD AND SILVER may have something to say about all of this . Mr Sinclair this morning stated that he believes we will see 480 by the time we grow beef steak tomatoes in CONNECTICUTT....I bet that he is correct and that by that time we still will not have seen an interest rate hike....It's the ELECTION , dummy........

It is probable that we're going to get heaps and heaps of Economic fallout without raising rates prior to the election.

CometoseJobs Report and Retail Numbers#11991804/14/04; 11:59:53

DId I fail to mention that city county and State GOVERNMENTS are also feel in the heat from having encumbered themselves unto the DEBT MONSTER well.

I put my money on HYERINFLATION.........before this STORM finishes unwinding.......

a nation of oneMr. Sinclair's tomatoes#11991904/14/04; 12:29:19

Well I am not familiar with the Connecticut climate, or
beafsteak tomatoes. Down here where I live, we grow
tomatoes all year, so we can go out and pick ours right
now. Winter only comes in February, usually on a weekend.
Some years not at all. In Connecticut I hear the growing
season only lasts an afternoon and that it usually falls
on a Monday, probably not til July or August, and then
only if you're awake and paying attention. So when I first
read Mr. Sinclair's statement, I figured he meant that pog
would be at 480 before lunch. That got me pretty excited.
For I had been thinking that pog would only be at 480
quite a few months into the full bloom of summer, which,
if things turn out as usual, will be tomorrow at the
earliest, or, at the latest, mid December. November will
be good enough, since my contracts don't run out 'til then.

R PowellAragon III#11992004/14/04; 13:09:15

from yesterday's post...

"Americans bridle when told that they have no culture. But what can they name whose loss would destroy their sense of national identity? Erase the memory of Homer, and what becomes of the Greeks? Forget Herman Melville, Mark Twain, William Faulkner, and even The Simpsons, and Americans still are Americans."


Chris PowellConnecticut, tomatoes, and gold#11992104/14/04; 13:10:35

Nation, you're a little misinformed about
tomatoes in Connecticut. In Connecticut,
if you start your plants indoors in March
or April and plant them outside around
Memorial Day, you can be harvesting nicely
toward the middle of July right through
early September. Since Mr. Sinclair lives
in Connecticut's higher and colder corner,
maybe he's talking about mid-August for
gold at $480. But don't feel sorry for
our little and sometimes chilly state.
For when it gets too cold for growing
tomatoes, we either make sauce from the
harvest or watch our state university's
basketball teams make sauce of the rest
of the country's college teams!

NedCometose#11992204/14/04; 13:22:34

Wild and crazy pullback. I had been sceptical of gold's advance back to 420/430 recently so I kept most of my powder dry. Here we sit at 399 and change, I have spent yesterday and today loading up, nearly no powder left. I believe you are correct, no interest raises because it will spell murder for SM, CM & HM (stock, consumer, housing). On the other side of the golden coin, if these carnival barkers are so sure of 'no inflation', then there is no need to raise rates and thus I dare the hypocritical lunes to do so. Liars.

Here's to the advance to $480. Hope Socrates964 & Sinclair and a host of others are correct.

R PowellSoybeans gain in the Great Race of 2004#11992304/14/04; 13:43:43

Did today finally wash out the rest of the weak, speculative longs from silver, gold, and the grains! Talked with two brokers today. Many unhedged paper players have been badly (mortally?) hurt over the last few days. Markets have no feelings, only the players do. I know the feeling well, but I was, thankfully, well covered this time. Buy the physical or be damn careful in the casino. Even well seasoned players have been forced (margin called) into offsetting positions or buying awkward defensive positions in a market that was functioning on "at the market" only orders! No spreads! No limit orders! In other words, just as Santa Anna did to the defenders at the Alamo, no quarter was offered in the silver pits. No mercy at all.

May silver closed at 700.5, down 44.5 while May soybeans lead a grains' reversal today to close again over $10.00 at 1013, up 41.5. Have I mentioned that I can find no logical reason for soybeans and silver to trade together? But, if one did so think, then perhaps the beans are telling us that today may have seen the bottom of this silver reversal? Both started their downturn together. Will both reverse back up nearly together? I don't know. At what point did all these speculative trend followers get on this train? What was that question....from "The Hunt for Red October"..."How do you get a crew to willingly leave a nuclear submarine?"

I guess we know how to get rid of the weak gold/silver/soybean specs, but how do we know when they've all left? As I've opined before, downdraws are healthy for long term bull markets. But real bulls are demand driven, as are the soybeans. What of silver? Has Leonard Kaplan been right over this last month in calling silver's advance 100% speculative with NO fundamental underlying reasons for higher prices? I still don't think so, but other than the ongoing deficit numbers that we all know of, I can offer no substantiation for my opinion. Hey, Kaplan also gives absolutely none for his opinion. This year's Silver Survey is due out on the 27th. It will be interesting, no?

TownCrierSee DMR for afternoon metals updates and 24-hr economic newswire#11992404/14/04; 14:03:02

excerpts from url:

June gold is down 7.5 percent from a 15-year high hit on April 1. Executing on computer sell signals, commodity funds crowded the exits this week to lock in vanishing profit margins from the metal's bull run to $433.00 an ounce.

The noncommercial long position grew to its largest size ever last week. Open interest also hit a record. Tuesday's $13.20 shakeout slashed open interest by 10,279 contracts, a big washout on frantic volume of 118,194 contracts.

"They are mostly knee-jerk reactions, along with the domino effect in gold and silver. They clearly got too many longs in there at too frothy a price," said a metals broker at a futures commission house.

May silver closed down 44.5 cents at $7.005 an ounce after trading $7.46 to $6.83 which was its cheapest price since March 5 when it started to advance toward the 16-year high achieved on April 2 of $8.50. ..."This is just the beginning, we have a long ways down (in silver). Probably not in gold. I think gold is going to be supported in the low $390s," said Leonard Kaplan, president of Prospector Asset Management.

The HoopleCometose, re: bogus sales figures#11992504/14/04; 14:06:43

Keep in mind those sales figures are NOT inflation adjusted ( I gleaned that little pearl buried down in today's glowing WSJ article ). If sales are up 1.8% and widgets have inflated by 8% in the same time period you have sold LESS widgets. I think this is the real story that explains a lot of the contradiction in the reported numbers and the real world. I assume too governments on all levels must desire inflation; more sales tax revenues, etc. If the Fed wants to raise interest rates it will be to appear like they're desirous of it, when in fact a bond market rout will be commencing. Higher interest rates kill housing, Fannnie blows to kingdom come, end of economy as we know it. In this environment gold should be going UP $20 - 30 a day, not down. The illusionists cabal have done a masterful job of portraying the opposite. Something has to give real soon.
USAGOLD / Centennial Precious Metals, Inc.Custom made -- you'll only find this here.#11992704/14/04; 14:19:44">country collection of gold
CoBra(too)Tomatoes; Gold and other Issues ...#11992804/14/04; 14:41:26

Nice to see you weigh in on the tomatoe issue, Chris P.

Let me explain - tomato in my (very small)part of the world was charmingly called "Paradeis" - a "derivative" of apples of paradise - and a "knight shadow" plant, whatever that means botanically.

Oh, well, that may have been the Austrian expression vs. the German Tomate - a rough translation in lieu of the real juicy, sun soaked, warm and tasty Paradeis.

The difference between Paradeis and Tomate may be close to F. Hajek's teachings vs. J.M. Keynes. ... and both are still incompatible. Like the difference in linguistics of Austrian Paradeis to German Tomate!

Uh, oh, I'd still take a golden Paradeis before touching any tomatoe, expected to ripen derivateviley later, or by "bio" genetic maltreatment.

My Paradeis and my physical gold don't need either - maltreatment that is. Sorry for my nonsense - cb2

I'm moving to a new location over the next few weeks and may be gone for a while. Also i may turn up again as my own alias, or totally new, obscure or even more of the scatter brained cb2, who's enjoyed your company tremendously... Take care - cb2

a nation of oneChris Powell (04/14/04; 13:10:35MT - msg#: 119921)#11992904/14/04; 15:18:48

I certainly meant no offense to Connecticut. Why, if I
could, I would even put it into a corner of my own state,
so I could visit it more frequently, along with Minnesota
and Nebraska, and a few others. What I said doesn't make
my state all that great however. We still have oliticians.
And there are plenty of people around here, who, if you
say the word 'gold,' they are likely to confuse it with
the word 'cold', they hear those two words so seldomly.
But with regard to offending Connecticut, it is hard to
think of a state where a person can offend everyone in it
all at one time with so little effort, unless it would be
Rhode Island. But then they have more mansions on the
beach there, than are in most of the other states put

a nation of onesorry#11993004/14/04; 15:22:12

I didn't mean "oliticians," which is a rare breed of
Ornathalia. I meant "politicians," which is a not rare
enough strain of human being.

a nation of oneCoBra(too) (04/14/04; 14:41:26MT - msg#: 119928)#11993104/14/04; 15:33:14

"- tomato in my (very small)part of the world was
charmingly called "Paradeis" - a "derivative" of apples of
paradise - and a "knight shadow" plant, whatever that
means botanically."

Tomatoes belong to the Nightshade family, of which at
least one type is deadly. Nightshade is the source of
Atropine, an antidote to some types of nerve gas. Atropine
calms spasms. Since the heart employs spasms to keep us
alive -in a sense- too much is not good. People used to
think tomatoes could not be eaten, maybe for this reason.
I don't know. But I eat em. And I am lookin forward to
havin the Beafsteak kind, as soon as I can find one.
Especially if it comes from Connecticut.

Cavan Man@ CB (too)#11993204/14/04; 15:37:18

Jersey tomatoes are best! (a Missouri boy...CM) Might add I am avoiding the herd and buying with both hands here. Smoke gets in your eyes but....VISION equates to wealth.
Socrates964Update on P&F#11993304/14/04; 15:46:11

Seems that my 2nd post didn't get through. Anyway:

The trade below 396 shifts the threshold for a reversal to the upside down to 412.00, without altering the upside target, which remains at 476.00.

Support in the 392-96 range (i.e. the stock shouldn't trade below 392 and may already have reversed).

Minor resistance in the 424 to 428 range. Trade over 436.00 represents full breakout from range.

SundeckGold and tomatoes?#11993404/14/04; 15:58:04

Of gold and tomatoes? Sounds like a Steinbeck story...

...or is it just that:

"When the seas are too rough fishermen mend their nets."

...which, loosely transcribed into Goldbugese means:

"When POG is too volatile, gold-bugs grow tomatoes."

Really! (Sometimes I wonder why I visit this forum...)

Perhaps it's just bugs brushing up on "Black Blade survival skills"...grow your own and all that.

Oh, by the way...CoBra...I think fish genes may have found their way into some kinds of tomatoes...beware of fishy Paradeis...

...and here I end my fishy parody.


Max RabbitzBank of France governor open to gold reserves sale#11993504/14/04; 16:21:05

"The financial daily Les Echoes said Tuesday that ministry and bank officials would hold talks with a view to selling up to 500 tonnes of the country's holdings of gold between 2004 and 2009"

Max.....OK that's about 1000 from Germany and now 500 from France. They still have to come up with another 1000 for WAG II. Is Italy going to get squeezed next?????

CoBra(too)@ Sundeck#11993604/14/04; 16:37:30

I don't know either - why you read the forum - sounds fishy,
my friend - and it's still up to you to argue -

...bubbles, bubbles everywhere, not a drop to drink ... from fishes nightmare, no Nachtgesang (Christian Morgenstern, almost) - see you on the deck, heck!

... and don't let me be the cause of not reading - just scroll by - and do me the favor of accepting my apology for not meeting your standard. I'll do my best to not ever antagonize any or all ever again.

... Uh, that's about all I've ever had or wanted to say, except take care of sunburn - your friend Paradeis a.k.a. cb2

R PowellGolden tomatoes#11993704/14/04; 16:40:41

ANOO, we New Englanders have an olde saying, there's a place for everything and everything in its place. That's why it was determined generations ago (tradition, you know) that the Mansions should be stored in Rhode Island while tomatoes are keep in Connecticut.

CoBra is correct in stating that tomatoes are part of the (deadly?) Nightshade family. This was duely noted in early colonial days as perhaps presenting some danger and was instrumental in the decision to store the tomatoes as close to New York as possible. Connecticut was as close as we could get to ridding ourselves entirely of the tomatoes. However, since those days of yesteryear, the tomato is now found in all New England states. But, even package store are now allowed Sunday sales in Puritanical Massachusetts! What is to become of us?

Sundeck: I believe the correct title to that Steinbeck work was "The Ripening of Gold and Tomatoes" The main story line follows a paper bag filled with gold and tomatoes as it makes a journey from Oklahoma to California during the 1930s. I've forgotten many of the details as I read this year ago but I believe the tomatoes rippened before the gold did even though the best laid plans of farmers and miners endeavored to ripen the gold first. My memory of these facts may be somewhat suspect.

R PowellGold and Tomatoes#11993804/14/04; 16:46:40

And here I thought Rich was nuts with his comparisons of soybeans and silver. Everyone knowns there's no connection between the two except during leap years!

And now I have to figure out gold and tomatoes....?

R PowellNighttime link#11993904/14/04; 16:54:02

The daytime link is accessed with a click on the "Quotes" at the top right of this page. I thought I'd mention that night time quotes are also available from that same link.

It's still too early for nighttime soybean trading but gold and silver are already at it and both are up some from the Comex close. Tomatoes aren't listed.

CoBra(too)Tomatose 'R comatose#11994004/14/04; 17:07:41

- for a while, at least!

... Until, we've found some new sun decks to grow reality - physical Paradeis - got Paradeis? cb2

PS: I got myself a new sun deck; Heck, it's arctic ... CU, and buy the dips, my tips - cb2 - last 4u

a nation of one?#11994104/14/04; 17:42:23

I'd write another post but I'm having trouble getting my
tongue out of my cheek. Seems stuck.

mikalRed flags#11994204/14/04; 18:10:38

...are banners in bloody battles between
red-faced traders and ruddy-cheecked young soldiers
led to slaughter. Were tomatoes to grow as fast as
the amount of red ink and blood spilled to satisfy the
military/industrial oligarchists and their supporters, then the movement of Mars can bring some focus on
the far-term meaning behind the metal market!
Like a red hot chili swallowed whole and like
today's, where James Sinclair casually says, he puts his "money where my mouth is":

"I believe that the reaction in the price of gold from $433 is over at the low of this AM. I also feel that this morning's low is the low before we go over $480. I further believe we will go over $480 before you can pick beefsteak tomatoes out of your garden in Connecticut.

I will write later on the reasons but they are humdingers. I put my money where my mouth is..."

mikalFrom "Goldmartin"#11994304/14/04; 18:25:42$RHNYA,uu[w,a]dbcannay[de][pb10][i][J19967604,Y]&pref=G"

"Something is boiling under the crust of the unvolatile SM
(GoldMartin) Apr 14, 18:08$RHNYA,uu[w,a]dbcannay[de][pb10][i][J19967604,Y]&pref=G"

This long-time poster at the forum, known also as S. Martin and E. Martin, had this extraordinary chart tonight. Very interesting and any comments greatly appreciated.

mikalOptions Expiration#11994404/14/04; 18:44:40

As part of the paper trading game, monthly options expiration day affords irresistable opportunities to insiders and fund managers. GoldMartin, from Germany tonight, brings the following:

"Today, while I should do some other work, I was very much distracted by the chart (or tape) painters.
If viewed very closely the writing on the minutes charts of HUI and NASDAQ is a thriller.
How they target certain levels and how they can close near key target lines, which paint certain chart patterns for the analysts.
There is absolutely no free market, but a staged market.
The milking of the small investors and the less informed fund managers is the game that makes good money.
If their pattern repeats, a chance opens...
You know what I think, this is a setup before options expiration.
And they will stage a fake "rally" before going lower."

Whatever you think about his conclusions,
some very apt and discerning analysis there.

Cavan ManTHIS IS NEWS!#11994504/14/04; 18:57:13

April 14, 2004 12:29 PM US Eastern Timezone

N M Rothschild and Sons UK Regulatory Announcement: Commodities

LONDON--(BUSINESS WIRE)--20040414T1629+0000--
Commodities Trading

N M Rothschild & Sons Limited, London announces that it is withdrawing from commodities trading, including gold.

This decision has been taken following a strategic review of the services offered by Rothschild and will result in the withdrawal from commodities sales
and trading activities in London.

As part of this decision, Rothschild will be withdrawing from the twice daily London Gold Fixing which it currently Chairs. Discussions are being
held with other members of the Fixing to ensure an orderly handover of the Chairmanship.

SundeckMonthly retail trade figures#11994604/14/04; 19:30:14

What's all the cafuffle over the most recent retail trade figures in the US?

There is absolutely nothing special about the most recent figures.

To understand this one needs to look at a chart of monthly retail sales over several years. The Australian Financial Review showed such a chart today (source: US Dept of Commerce) from 2001 to the present. (Unfortunately I cannot show it here as is a locked article to all but paid-up subscribers.)

What this chart shows is a more or less steady increase in retail sales from about $285B per month in early 2001 to about $328B last month. While there are minor ups and downs from month to month, the upward trend is about as smooth as you can get in data of this kind. The largest pertubation is after 9/11 2001 which showed (unsurprisingly) wild swings, but after that it is pretty much steadily upwards. (In keeping with Easy Al's low interest rates and W's tax cuts.)

Conclusion? Last month's figures are in no way unusual! All the blather is just "carnival barking".

DruidRothschild's retreat signals end of era#11994704/14/04; 19:36:42

One of the oldest rituals in the City of London is about to change for ever with NM Rothschild exiting the gold business.

The London gold fixings has taken place twice a day on the third floor of Rothschild's office in St Swithin's Lane for the past 85 years.

Five men sit behind desks, each equipped with a little Union Jack. The men, deputed by investment banks with bullion trading activities, search for an agreed price after discussions with their dealing rooms and clients on the price for gold, in order to set a benchmark price for trading in gold each day.

The flags are waved to signal to the others that there is a change in view on the price from his dealing room. As long as any flag is raised, the price cannot be fixed.

The gold fix meetings take place at 10.30am and 3pm each working day - as they have done in the same offices, at the same time, and with almost the same parties - since the first meeting took place on September 12 1919.

The bizarre process was established after the First World War following the collapse of the gold standard, a regime where currencies were backed by gold.

Rothschild's long association with gold meant it chaired the fixing from the beginning.

Not only did Rothschild gold finance the Duke of Wellington's Napoleonic campaigns, but the bank had been a producer and refiner of gold.

Rothschild is the last name from the five banks at the first fix to have remained, but three of the current members - Bank of Novia Scotia, Deutsche Bank and HSBC - trace their roots to the original members. Rothschild's departure leaves a vacant seat, and the search for a new venue.

Rothschild's withdrawal from gold is part of a complete retreat from the commodity trading business.

Baron David de Rothschild, chairman of the bank, says: "It is clear that the revenues we have generated from commodities in comparison with those from investment banking, banking, and those we think we can generate from private banking have definitely declined."

The bank generated just £4.6m ($8.2m) of dealing income last year, or 2.2 per cent of the bank's total operating income.

This still allows the operation to just cover its costs but the trend line is not encouraging: five years ago dealing income was £14.2m, or 8.6 per cent of the total.

Mr de Rothschild says the bank's gold operations consisted mostly of hedging gold producers' exposure to the market.

He acknowledges that Rothschild has neither the technological infrastructure nor the risk appetite necessary for being a directional or proprietary trader.

Withdrawing from the business is "the sound thing to do" and is not the result of any sudden problems, he insists.

"We are not trying to deal with any losses," Mr de Rothschild says.

The decision marks a sharp reversal stance on oil trading, a business it re-entered last summer after selling its substantial oil operations 90 years ago.

"We decided to get into oil as a means of feeding an infrastructure that needed more business than gold could provide." But when the bank gave up on gold, oil trading had to go too, Mr de Rothschild says.

Druid: To follow up on CM's previous post. Wow! Belgian your analysis and commentary would be greatly appreciated. I believe "freegold" or hell on earth is on its way.

Solomon Weavermikal - NYSE record high index#11994804/14/04; 20:15:05


I opened the link you provided, and adjusted the chart to allow a period of three years.

To my simple observation, the period which appears to come closest to the current nose-dive is just around Sept 01....also known as 9/11.

Poor old Solomon

SundeckMikal #119943 - "Something boiling..."#11994904/14/04; 20:19:09

Good one Sir Mikal,

This chart is explained at the link:

"The Record High Percent Index is a market breadth indicator created by dividing the number of 52-week highs for a given market by the sum of the number of new highs and the number of new lows.

Record High Percent = New Highs / (New Highs + New Lows)

The values range between 0.0 and 1.0. A value of 0.0 means that there were no new highs on that day. A value of 1.0 means that there were no new lows on that day. A value of 0.5 means that the number of new highs and new lows were equal."

Sundeck: The chart appears to show a remarkable change in sentiment across the market in the last few days from a preponderance of new highs to a preponderance of new lows.

It is remarkable how "unvolatile" the run-up over the last year has been, with the indicator being consistently around 90% - not a "healthy" market to my mind. I also remember seeing somewhere that the volume traded over this period has been consistently low compared with historical volumes...again not an indicator of a healthy market.

Enough to start Henny-penny running amok? We will see...

Look out below...


Chris PowellYes, we have no tomatoes#11995004/14/04; 21:33:26

Nation, no offense taken on Connecticut's
behalf. We're too busy offending ourselves
lately with our unexpectedly corrupt state
government. I have about 48 tomato
seedlings inching up under the grow-lamps
in my basement and when the first Dona
(no Beefsteaks here; too damned big and
cracky) is sunning itself and ready for
picking and presenting with the usual
pride to my family's usual indifference,
I'll be sure to call the Comex and say,
"$480, please!" Won't surprise me much
if we get to $480 a bit earlier than that
-- say, when the first beets are ready.

Black BladeSurvivial, Bogus Government, Data, Precious Metals, and Petroleum#11995104/14/04; 21:56:11

Just a few comments as I am still quite busy and on a tight schedule.

Sundeck - Speaking of Steinbeck, during the depression when gold was illegal to own in the US, among the few "proxies" was Homestake Gold. Those who had the stock made more on dividends than they originally paid for the shares over the Depression years. The smart money squirreled away there physical (likely tipped off by friendly sources in the FDR administration) while some like my ole Grandaddy just stashed his away and just complained that FDR was a "Communist" in drag. ;-)

Friday is expiry and that may lift the lid on Gold and Silver as well as the trade and budget deficits continue to climb. The US dollar index banged up over 90 on what is percieved to be good economic data. Though the Trade Deficit "narrowed" slightly, it is still pushing the annual current account very dangerously deep into the red. Don't discount the need for more government debt to "pilot" the Iraqi occupation/council and many more expenditures being promised by all candidates in this election year. In some of Kaplan's comments I have too agree. I think that Gold will hold near the current level until the weekend but then look out. There's just too much for TPTB (as they say) to juggle. Look out as Fed rates will start to rise in mid to late summer killing the mortgage market and consumer spending (by then tax refunds will also be spent). Note that the CPI jumped a bit higher than expected and the spin still could not account for the hefty lift in the CPI "core rate". Lot's more spin to come (just watch CNC, Bloomberg, CNNfn, etc. if you want some good laughs).

Meanwhile petroleum is coming down slightly but the big problem is refining capacity (most integrated oils consider gasoline a "by-product" and prices will be higher this summer). NatGas is still in peril unless some rapid changes in Fed permitting for drilling, pipeline, etc. occurs very soon. California announced that they may have power shortages again even as 10,000 new MW of power were added with "peaker plants", however, over 3,300 MW of older plants have been decommissioned as demand is rising. God help them if it's a hot summer. They are not alone either.

I am biding my time with work listening to the news and catching up as I can, but I am not all that optimistic about the economy. The equities indices and bonds have not exactly taken the "good" economic news very well. Trading paper for physical is still in my game plan.

- Black Blade

mikal@Sundeck, Solomon Weaver#11995204/14/04; 22:36:59

Thank you for your replies.
KnallgoldRothschild exiting Goldtrading#11995304/14/04; 23:57:06

The days of the fix are numbered ;-)
Belgian@Druid#11995404/15/04; 00:31:24

Indeed Sir, CM correctly stated that the Rotshild pull out is "News"...! But note, that some time ago, other London Gold fixers left *the room* already, before the boss. So, this is a re-confirmation of old news.
More important is,... or better, was... the Rothshilds' traditional activities on the "arbitrages" between Oil and Gold ! Old habits are dying and Big Change is coming !

Remember the recent sale of GFI participation by AA to Norilsk. AA is a Rothshild proxy.

IMVHO, it all boils down to the following fundamental change: The American "style" of paper-wealth is getting stiff competition from FreeGold-Physical-Wealth !!!

I don't share A/FOA's view on the burning paper...but the hysterical paper-arenas are surely going to run "dry" and be brought to their natural (useful) proportions !

But the inevitable transition from the paper-(derivative)world, going over its top, to the natural (conservative) physical world, doesn't seem to be important (interesting) enough for any of the Gold watchers. So be it.

*WEALTH*, cannot, will not, shall not, associated with any "paper" ! Stop and refuse of being "paperized" and get the "delivery" of your Wealth, at once. A tuff decision for most of us.

DruidBelgian (04/15/04; 00:31:24MT - msg#: 119954)#11995504/15/04; 01:03:42

Druid: Belgian thanks for the comments. In the comment below, are you suggesting a very healthy write down in paper assets? I myself have mulled this one over for quite sometime and can think of a couple of supposed "rational" scenarios but then I always revert back to human emotions of real fear and panic joined together with modern technology and I can envisage a hell of a lot of paper burning. Thanks again, more thoughts later as I need some zzzz's.

"I don't share A/FOA's view on the burning paper...but the hysterical paper-arenas are surely going to run "dry" and be brought to their natural (useful) proportions !"

Aragorn IIIGreat words and great deeds#11995604/15/04; 02:54:38

Cavan Man, thank you for posting your quote to me. It was appropriate and very well selected! 'Tis the equivalent expression, though rendered in eloquent statesmen mode, of choosing ones battles while waging the war.

>>>>>"Yet it is not our part to master ALL the tides of the world, but to do what is in us for the succor of those years wherein we are set, uprooting the evil in the fields that we KNOW, so that those who live after may have clean earth to till."<<<<<

I trust you were able to draw forth from the Spengler commentary, more easily than others might, the applicable point of strategic sacrifice in the cultural realm of monetary operations.

Of the crops in the fields we know, we must resist the replanting of the gold standard seeds of monetisation by farmers with selective nostalgia for the long and lovely growing season; forgetting always that come winter the resulting fruit is hollow, and the soil spent!

The experience teaches that we should only hold these permanent seeds of gold. To "sacrifice" its pretty summer cultivation is no sacrifice at all -- losing only a brief aesthetic eyefull while gaining an enduring tasty mouthfull. We must sow alternately a more modest(ly ugly) yet sustainable rotation of pure fiat crops.

If A Nation Of One found the sectarian elements an overburden, consider that they are a necessary consequence of the Tolkien and historical basis of the Spengler work being cited. Generic, secular translation of these motivations could be presented in terms of any prevailing ethos wherein a people's future condition, or afterlife, is believed to be rewarded for present acts of decency. That is as close as we may come to One-size-fits-all!

Cavan Man, thank you also for bringing forth news of the Rothschild decision. Some of its peer gold paperizer/planters conveniently announce termination of their own cultivations following the 1999 Washington Agreement. Belgian has held that London long knew uncontained free gold was on the way. As the grandfather of the London fix, the retirement of Rothschild from the monetizing gold fields is your latest evidence that Belgian, like FOA before him, should be heard with both ears.

We can surely picture FOA smile "I-told-you-so" with validation to hear David de Rothschild say (in Druid's FT article) "When the bank gave up on gold, oil trading had to go, too."

Goldbugs will come to understand the sacrifice that goldhearts embraced long ago. The superficial eyefull of "heaven on earth" gold standard money is an instant gratification leading ever to starvation, self-destruction. It is but a small concession in battle, using a thin film of "ugly money" as our marginal economic lubricant in order to preserve gold outside monetary debasement.

The visionary goldheart knows the quality of his life's future is more reliant upon the quality of his big savings than upon the fate of his little wallet's folding money. It is a grave mistake of past conditioning to carry forward with belief the two needs be the built of the same architecture.

A man may live on his good credit today, among friends. Come what may, he shall be ever able to dine on his gold tomorrow, among even strangers.

got gold?

Aragorn IIIA court jester#11995704/15/04; 03:26:33

You will notice how the Frenchman Sarkozy plays the proper fool; how it is that he asks for (re)productive revenues, mocking gold sterility, while he remains conveniently blind to capital gains.

AFP news
>>>>>>>Finance Minister Nicolas Sarkozy suggested last week that a partial sale of the Bank of France's gold reserves was worth looking into, either to finance investments or reduce debt, "but in no case to finance operational spending".

Bank of France governor Christian Noyer said: "I have studied with the greatest attention the position of Finance Minister Nicolas Sarkozy."

He stressed that any decision on the sale of gold "will be taken in total independence by the Bank of France, conforming to the law and to the treaty on the European Union."

Sarkozy later responded to an opposition deputy who questioned the possible sales by asking if it were not normal for the gold reserves to generate revenue for the nation.

"Is there a lawmaker here who would consider it natural and normal that these reserves generate no revenue?" the finance minister asked during a question and answer session at parliament.

"In the name of 'What?' would the Bank of France's gold be the only capital of which the owners, that is the entire nation, not ask about it producing revenues?" he continued.

Referring to estimates of the potential interest from sales over a five-year period Sarkozy concluded: "Given France's budget situation, I prefer to be on the side of those who have found, without giving anything away, 200 million (euros) in extra revenues than on the side of those who dug holes, who emptied the coffers and who never came up with any supplemental receipts."<<<<<<<<<<


Have undervaluation. Will ride.

got gold?

Golden LionheartP & F Charting.#1199584/15/04; 04:20:15

It seems to me that this type of chart can give quite dissimilar projections using exactly the same data but employing different parameters.

For many years I have kept my own charts on gold. I chart with each square representing one dollar. (Perhaps this is an invalid way to chart?)

Looking at my chart I see a double top, not a good formation at all. IMHO this could lead to a price retreat to around $375. Other charts that I have seen presented on this forum seem to project gold rising to nearly $500.

I certainly believe that gold will reach $500 and above but my chart says it will visit $375 first, giving a wonderful buying opportunity.

I will now sit back and await an onslaught from the 'True Belivers'.

TopazBonds, Gold etc.#1199594/15/04; 04:58:52

We are getting out of step with DX/Oil and if trends remain intact, an Oil spike to $40+ is in the offing Fri or Mon.
GoldiloxRussia: Running Out of Oil#1199604/15/04; 05:36:05


One more data point that we would like to bring to your attention as we discuss the likelihood that global energy shortages are upon us as the global demand for oil begins to outstrip supply. The Russian Resources Minister says at present extraction rates, Russia's supplies are kaput by 2010 - that's just six years till the only supply bigger than Saudi Arabia hits the production wall: Builds the case for WW III in 2006, doesn't it?


The point is that the level of oil reproduction is significantly lower than the amount of oil that is being extracted. In 2002 oil reserves have increased by 254 million tons with oil extraction of 380 million tons. In 2003, before the initial estimates, oil reserves equaled to 240 million tons, whereas oil extraction has increased up to 421 million tons. The Ministry of Natural Resources blames oil companies for today's situation, since they practically totally refrain from conducting exploration works.


The thot plickins!

GoldiloxWMD about to be found#1199614/15/04; 05:47:22


BASRA -– Fifty days after the first reports that the U.S. forces were unloading weapons of mass destruction (WMD) in southern Iraq, new reports about the movement of these weapons have been disclosed.

Given the recent scandals to the effect that the U.S. president was privy to the 9/11 plot, they might try to immediately announce the discovery of weapons of mass destruction in Iraq in order to overshadow the scandals and prevent a further decline of Bush's public opinion rating as the election approaches.

Sources in Iraq speculate that occupation forces are using the recent unrest in Iraq to divert attention from their surreptitious shipments of WMD into the country.

An Iraqi source close to the Basra Governor's Office told the MNA that new information shows that a large part of the WMD, which was secretly brought to southern and western Iraq over the past month, are in containers falsely labeled as containers of the Maeresk shipping company and some consignments bearing the labels of organizations such as the Red Cross or the USAID in order to disguise them as relief shipments.

The source, who spoke on condition of anonymity, added that Iraqi officials including forces loyal to the Iraqi Governing Council stationed in southern Iraq have been forbidden from inspecting or supervising the transportation of these consignments. He went on to say that the occupation forces have ordered Iraqi officials to forward any questions on the issue to the coalition forces. Even the officials of the international relief organizations have informed the Iraqi officials that they would only accept responsibility for relief shipments which have been registered and managed by their organizations.

The Iraqi source also confirmed the report about suspicious trucks with fake Saudi and Jordanian license plates entering Iraq at night last week, stressing that the Saudi and Jordanian border guards did not attempt to inspect the trucks but simply delivered them to the U.S. and British forces stationed on Iraq's borders.


What a carefully planned scenario - all timed for re-election and continued POG sppression.

Cavan ManAragorn III#1199624/15/04; 06:03:53

Thank you for the kind words. I should have stated so but perhaps you knew the quote issued from Book 3; an admonition (one of many wisdoms) from Gandalf the White after battle of Minas Tirith.
misetichRussia Revising Great Game Rule Book - ENERGY IS KING#1199634/15/04; 06:16:55

Excerpts from the linked article

In this chess game, like those of the past, energy is king. But this time Russia is exploiting its prowess like never before.

On the eastern front, it has Japan and China locked in a bidding war for Siberian oil, while in the west it has Europe struggling to deal with its dependency on Gazprom's gas, and in the south it is slowly extending its electric tentacles through state power monopoly Unified Energy Systems.

But what is emerging as a sort of "Putin Doctrine" doesn't stop there. It seems to envision Russia as the pivot around which the global oil market revolves, the power broker that can tip the balance between OPEC and the United States. And it seems to call for the rapid international expansion of patriotic companies -- both state-owned and private, energy and nonenergy.
By pushing for the building of privately owned pipelines -- one directly to China and another to Murmansk to better supply America -- "Khodorkovsky was pursuing a set of interests ... that was a threat to Putin's state policy," a senior U.S. administration official said in an interview in Washington earlier this year.

In addition, the official said, Khodorkovsky's attempts to merge his oil company Yukos with smaller rival Sibneft and then sell a chunk of that company to a U.S. supermajor like ExxonMobil would have made him "untouchable."

"Fundamentally, this was a question about power," he said. "What Khodorkovsky was proposing presented problems for both foreign and domestic policy. ... State control over pipelines was both a domestic and foreign policy lever."

Now, however, all talk of building private pipelines -- or even of selling an equity stake in a major Russian oil producer to a U.S. company -- is taboo.

"This is not the scheme the United States wants to see," said Julia Nanay, a senior energy analyst at Petroleum Finance Corp. in Washington. "It would like to see lots of private companies, private pipelines and more exports."

It is worth noting, she said, that since Khodorkovsky's arrest conditions have gotten worse for U.S. oil majors that already had a foothold in Russia -- especially ExxonMobil, which lost its license to the giant Sakhalin-3 field late last year.

"All this sees to be eroding the U.S.-Russia energy dialog," Nanay said.

While these developments may be bad news for Washington, which is anxious to reduce supplies from OPEC, they have increased Russia's clout on the world stage, analysts said.

Playing Both Sides

Strengthening ties with the Arab world while not completely alienating the United States is a tough task, but it's one that Putin appears to be attempting.

In the past, much to the satisfaction of the United States, Russia and OPEC have been at odds. While Russia has been cranking up exports at breakneck speed, OPEC has been doing just the opposite, arguing that it needs higher oil prices to compensate for the United States' decision to depreciate the dollar.

But now, in what may turn out to be a pivotal policy shift, Russia appears to be winding down its export drive. Last month Economic Development and Trade Minister, German Gref, boldly stated that 2004 would be the last year of major export growth for the foreseeable future.

Gref said exports will likely surge 14 percent this year to 266 million tons, but after that growth will be minimal, around 2 percent per year for several years to come.

Such a move would endear Russia to OPEC and the entire Arab world, analysts said.

Many analysts expect OPEC to come under increasing pressure over the next few years as instability in the Middle East grows and individual members such as Venezuela and Nigeria are pressured into leaving.

So, by reducing export growth, Russia could help the cartel survive, said Alfa Bank chief strategist Chris Weafer, a former adviser to OPEC who retains close ties to the organization.

What's more, Weafer said, by deliberately slowing down exports over the next few years, "the entire Arab world will see Russia as a significant ally and Russia's political influence in the Arab world will increase."

Russian oil majors are already capitalizing on the warming ties. LUKoil in January became one of a handful of foreign firms to gain the rights to develop a potentially huge gas field in Saudi Arabia. Notably, no U.S. firms were awarded the same rights, as they are reportedly finding it increasingly difficult to gain a foothold in the kingdom.
Oil Is Not Enough

At the same time Russia is attempting to maximize its oil clout, it is making an aggressive attempt to grow other sectors of the economy and help its captains of industry gain strategic positions on global markets.

The move could help speed up the global expansion of companies like Severstal, which recently snapped up Michigan-based steelmaker Rouge Industries for $286 million, and Norilsk Nickel, which at the end of last month made the biggest foreign acquisition of any Russian company to date -- its $1.16 billion purchase of 20 percent of South African gold miner, Gold Fields. But with currency laws still tight, most of the money that Norilsk used for the purchase had to come from U.S. Citigroup.

Back to the Future

One region where Russian companies do have the upper hand, however, is in the republics of the former Soviet Union -- and several are moving aggressively to take advantage of it.
UES has already bought stakes in electricity assets in Armenia, Kazakhstan and Georgia, and Chubais has said he wants to move into Bulgaria, Latvia, Lithuania and Slovakia. The power monopoly is also in talks to rent an international power grid that connects Armenia, Georgia, Iran and Turkey.

With U.S.-dominated NATO moving troops to Russia's borders, Moscow is countering by taking control of key infrastructure assets.

"Former Soviet states can't afford to ignore Russia's wishes," Weafer said. "At the end of the day, Russia can just turn the lights off. You can't run an electricity cable from Washington."

But it's not just state-owned companies that are active in the former Soviet Union. Private companies like Russian Aluminum, the world's second-largest aluminum producer, have been active in the region for years and are looking to expand.

"This is the return that Putin is getting from helping grow a stronger economy," Nash said. "The greater the economic clout of Russian companies there, the more political clout."

Russian companies seem to be having a rougher ride in former Soviet satellite countries, however, as both NATO and the European Union creep closer.
The EU may be Russia's biggest trading partner, but Russia certainly has a trump card to play. For the foreseeable future, Russia's greatest tool for making the West listen to its concerns is its vast energy reserves.

"There's no doubt about it," Weafer said. "In the old days of the former Soviet Union, Russia's political clout was measured by the 14,000 nuclear missiles it had pointing west. Now it's measured by the pipelines it has pointing west."

The chessgame continues -
The US is beating its mighty military chest and its President announces " using decisive force" in Iraq ...and does the unthinkable, by siding with Sharon in the Palestine issue

Russia, China are concentrating on building their economies and succeeding -

Russia has recognized its strengths - and have begun exploiting them (commodites, energy). They also have been diversifying their currency reserves and ACCUMULATING GOLD -

China's economic growth has been astounding ascending to the top 3 in the world - overtaking Japan as Asia dominating economic power

China is also becoming vociferous regarding the "one China" policy vis a vis Taiwan and have given Cheney and the US an earful

The Chinese have thus far given the US lip service in "revaluing the Yuan" and removing its peg to the US $

China has also bolstered its GOLD reserves and have "negotiating" trump card through the holding of US $

Japan is desperately trying to hang on - having joined the US printing presses by proxy of issuing Yen and amassing US $ reserves -

It appears that China has the upper edge on Japan vis a vis acquiring/securing energy needs as it has "befriended" both OPEC countries and Russia - the main producers of energy

Japan has squarely put their "eggs" in the US corner- by alianating "Muslim" countries with their symbolic support of US policy in Iraq

Europe expansion is just around the corner - and the Euro expansion and growth - further dispacing the US $ in those countries and their respective trade partners

The Euro current "mild correction" vs the US $ is just about over since its difficult to conceive that countries such as Japan, China, SouthEast Asia are fool hearty enough to add more US $ reserves to their already bludgening ones- Diversification is still the order for these countries and the Euro and GOLD will be the primary beneficiary

US - the world military Superpower - is continuing and "flexing its mighty power" in the Middle East and in this presidential election year making noises of a "real" miraculous economic recovery by the announcement of "job creations" - when in fact jobs created wore illusianary since it included one time event such as season (construction) included the return of striking workers and it included job created at the GOVERNMENT LEVELS - both Federal and State

The jury is still out whether the US economi recovery is for REAL or whether the "spinmasters" are taking advantage of the recent distribution of government stimuli (last batch)The odds favor the continued 'jobless recovery' since energy prices/commodities are too high and will hit earnings more than expected

In addition what are the odds of Greenspan increasing IR in a presidential year, earlier than the scheduled September year?

The US according to its President Bush - is attempting to "change the world" as it feels challenged in its security for its citizens - and has taken unprecented aggressive foreign policy of using "pre-emptive strikes" to perceived "foes"

This change in policy coupled with the Palestine issue has angered Arab countries who perceive as being oppressed - OPEC has responded accordingly

The recent Bush-Sharon fiasco is going to further incite Arabs and OPEC in particular -

Iraq is stirring - the US requires to "justify" its required occupational forces beyond June 30 deadline when the US appointed Iraq Provisional Government is supposed to take over - Most call it a superficial event as the US would maintain control on "security and the purse strings"

The "coalition" of the "willing" is under stress and the recent Madrid event will make them act with more restraint going forward or else exposing their CITIZENS and ECONOMIES to grave danger as warned by the IMF recently

In this tumultous caotic global events - GOLD - is undisputededly - THE CURRENCY TO HOLD AND ACCUMULATE!

All Aboard The Gold Bull Express

a nation of oneChris Powell#1199644/15/04; 06:50:58

Yep, 480 looks real to me too. I am expecting it to go
down somewhat from here first though. It doesn't seem to
be following the exact schedule that I set out for it. But
it probably won't go so low that a man won't be safe in
his own basement. Therefore let me know how your beets
turn out. I am sure I would be right at home in
Connecticut. That's a problem that I have: I love

Dollar Bill.,.#1199654/15/04; 06:51:19

Good post Misetech, Another King that looms large in the future is Food. It appears that the Muslim arab persian world is less anti US than we might think. Lots of small clues in that direction. They are seeing the difference between Israel and the US, the iraq people generally have a good impression of US men. Other middle east people see that. Religious nuts aside, regular folks, as long as the US does hand over in June, feel we did them a favor.
Socrates964Golden Lionheart#1199664/15/04; 07:47:36

Golden Lionheart - not sure about delivering an onslaught, but charting $1 per box is not standard procedure and if you use 3-box reversals, the white noise of trading will cause your chart to flip-flop all over the place.

When I started doing P&F, I did a lot of experimenting and assumed that doing an equal % move (i.e. a constant logarithmic box size) would be more accurate than Dorsey's linear approximation to box size. I found that it actually gave far more misleading signals.

This suggests what I suspected - that a given TA method works because a critical mass of people believe in it.

I regard P&F as a rough and ready indicator that is an adjunct to Fib analysis. BUT! - I use horizontal column count rather than vertical count to project price targets, because if I use vertical, I'm measuring swings - which is what Fib measures and I believe that the power of analysis derives from superimposing DIFFERENT methods. This is a point that is hardly ever dealt with in TA and is a particular weakness of oscillators/MAs/BBs/MACD - two indicators agree because they are variations on a single theme.

I thus tend to use P&F to confirm Fib analysis. I also combine it with my '3rd time lucky' rule - which very simply says that it often takes a stock 3 attempts to break a key support resistance. Just look at some charts to see whether you agree or not - if you do, you'll see that it diminishes the importance of double tops.

Put another way, imagine you have gold bulls pushing up POG. $400-50 is uncharted territory so when the price first rises they're merely doing reconnaissance to find out where the bears will start fighting. Then they try again to measure the force of the bears and again retreat, but do so deliberately to give the bears the impression that $430 is rock solid. Now the bulls know a) where the front line of the bears is, b) how many troops they have manning them and hence how much force they need to deploy to overrun them. If they discover that this is a battle they can win, then on teh 3rd attempt they come out in force. This is why a double top doesn't tell you very much - because it is not enough in itself to distinguish between a tactical retreat (reculer pour mieux sauter) or a genuine one.

Jacob MarleyAnother sign...#1199674/15/04; 07:58:11

From the Trail...

FOA (10/9/01; 10:05:48MT - msg#117)

Paper gold derivatives became a major force in allowing this last, end time, demand for dollars and subsequent surge in it's value. This is why Another said it would run way up, even while being inflated, before the end would come.

Only now are we coming to a point where theory meets practice as Alan Greenspan now is and must hit the presses. This forced printing inflation, currently happening, is the very precursor to a lower dollar exchange rate, rising real price inflation and the very first destructive test of paper gold derivative hedges. As price inflation rises the US will protect its own banks and the short paper gold portion of these positions they created. They will sell all the paper gold they can in order to stop these hedging positions from functioning and breaking their writers.

On the physical side, the US wants and needs a higher price as they ship real gold commitments to help balance our sinking ship. So, the dollar supporting paper gold position we have sold for years will now block our ability to gain some ground with high US gold reserve prices.

In turn, Euro factions will also sell into the paper gold dollar system to help further discredit its hedging function in the face of dollar price inflation.


From the News...

Mr de Rothschild says the bank's gold operations consisted mostly of hedging gold producers' exposure to the market.

He acknowledges that Rothschild has neither the technological infrastructure nor the risk appetite necessary for being a directional or proprietary trader.

Withdrawing from the business is "the sound thing to do" and is not the result of any sudden problems, he insists.

USAGOLD Daily Market ReportPage Update!#1199684/15/04; 09:06:18">
The Daily Gold Market Report has been updated.

If you are considering investments in gold we invite you to">request our free introductory information packet detailing the products and services offered by USAGOLD ~ Centennial Precious Metals. We welcome your inquiry and look forward to working with you.

GoldiloxSelling Paper Gold#1199694/15/04; 10:00:31

@ Jacob Marley:

I thought selling paper gold supported hedge positions by pushing the prices down. You state that selling disables the hedging positions.

Please explain. I'm lost!


KnallgoldRothschild#1199704/15/04; 10:01:41

Now I'm wondering,the days before the Rothschilds make their announcement,Gold corrects brutally-as if if these two events are linked in a way.Like pulling the support from under the paper Gold market!?
USAGOLD / Centennial Precious Metals, Inc.Custom made -- you'll only find this here!#1199714/15/04; 10:06:22">country collection of gold
GoldiloxInteresting observations in Ag and Au paper#1199724/15/04; 11:04:35

CNBC just had a metals story from a fund analyst, who suggested that all PMs "should" move up as inflation continues to take hold.

Also, as I was submitting an order for a mid-size mining option (who shall remain nameless to honor the Forum rules), I noticed a bid fto buy 20,000 SEP Calls with a sales order .10 higher.

Either my broker data is in error or somebody wants to lock the price for a certain miner? This bid is about 1% of their total capitalization, and 3.5X the current open interest.

I mention this not to tout the stock, but to notice the entry of larger players into the normally illiquid options.

OvSKnallgold#1199734/15/04; 11:10:43

I laugh about your name.
You had a: "Wunderbare Einsicht". I don't need
to translate that! Nicht wahr?
Of course, the other possibility is, that THEY
loaded up on physical BIG TIME, and now want to
get out of the lime-light...OvS

OvSHuman Nature.#1199744/15/04; 11:18:52

I'm just thinking: Every time the price of
gold gets trashed, messages on the USAgold
forum decline. When the price starts jumping,
everyone gets excited and posts.
Aren't gold-bugs supposed to be contrarians?
It's supposed to be the other way around....
Well, from my own experience I know how hard
contrarianism is...human nature...OvS

KnallgoldOvS#1199754/15/04; 11:32:07

You seem to be Another german speaking person-Germany,Austria or Switzerland like me?

The name has actually a meaning-there exists a chemical compound "Explosive Gold" with unknown composition (because its too explosive to be dried).It can be made from Auric Chloride and Ammonia.An unappealing brown powder,can stay on your desk for years and then'suddenly,BANG,with a bit too much of heat or rubbing it explodes.I liked the analogy.

BTW,Rich,there exists also a similar "Knallsilber" or Explosive Silver.

Jacob MarleyGoldilox - Hedging thoughts...#1199764/15/04; 12:05:34

Hey G-Lox...

Hedge positions as you know alternate both short and long, so what I think you mean here, for the sake of clarity, are the short positions, which naturally have the effect of downward pressure on prices, as the position necessarily introduces more of something for sale in the current period. There is no intent to imply that "selling disables the hedging positions" in the post. Let's go through this.

"This forced printing inflation, currently happening, is the very precursor to a lower dollar exchange rate, rising real price inflation and the very first destructive test of paper gold derivative hedges."

Previously, the abundance of short positions, in all their forms, drove gold to eye-popping lows, and no one cared because the subsequent dollar strength (in which gold is priced [compared, evaluated, assessed]) appeared real vis-a-vis low inflation, and tremendous returns on all types of dollar defined investments. Now, we face the awakening of the public to the spectre of price inflation. For various reasons, this previous paradigm has run its course, and dollar investing is hard pressed to yield good returns, while dollar priced goods are noticeably starting to rise and people feel the pinch -- and importantly, the inflation variable is being introduced into discussions of earnings and profitability in our equities markets...!

There are various reasons for gold hedging. It serves as a means to offset losses in dollar purchasing power. Dealers use the market to reduce their costs by working the relative predictability of contango strategies to obtain a better price. And (in the case of gold producers) to add predictability to cash flow, as well in these past few years until the trend reversal, as a means to add profitability in what was perceived as a down trending market. Simply sell it forward at $x, knowing that you can probably deliver it for less than $x. Great time to be the middle man in this business -- especially if you are inside enough to know with confidence that the market has staying power.

The multiple commercial/institutional interests that previously employed hedging strategies involving the gold markets (i.e., the "paper gold" markets), are beginning to find that the hedging strategies are no longer paying off. The Rothschild article indicates the waning profitability in the business. Profitability is waning because it's not working anymore. People are paying less for the various "insurance," because it's not as worthwhile, and the side bearing the risk, demands a higher risk premium. Less spread, less profit.

What is essential to observe in the light of the foregoing is that when someone inside like Rothschild makes an exodus, it is because they know when something is coming to an end. It has reached the end of its useful life.

When the rest of the commodity spectrum has been going wild, gold has lagged. Not done badly, but more and more not up to expectations.

So where you say: "I thought selling paper gold supported hedge positions by pushing the prices down." You are absolutely correct on the part about "pushing prices down." But, hedging is not only about going short. It is about offsetting. Hedging. When the dollar weakens, the hedges should offset the dollar weakness with strength in the offsetting position. This is beginning to fail. Market perceptions of coming inflation are not having their fears alleviated by the performance of paper gold. And it won't, as every move up is met with a full court press, and driven back to some acceptable level -- some level that will not break the system. Hence FOA's:

"They will sell all the paper gold they can in order to stop these hedging positions from functioning and breaking their writers."

"They" are the entities, supported by US political will, whose interests are in the sustaining of the status quo, the present system. And since "paper" gold is nothing more than paper "backed" by really nothing more than the buyer's presumption of credibility therein, it can be produced at will to meet all demand, but at progressively lower prices. Lower because a) there is a lessening long-side premium placed on the paper, as it is always abundantly available, and b) it is also discounted because of lessening faith in the ability of the paper to perform. NOT the ability of it to perform in terms of delivery! But its simple ability to perform its hedging function in terms of offsetting dollar weakness... Delivery-ability is secondary in this market. That is why anything that appears to be a short squeeze, is nothing more than a whoopsie quickly covered, or a deliberate head fake.

"In turn, Euro factions will also sell into the paper gold dollar system to help further discredit its hedging function in the face of dollar price inflation."

Rothschild says he "has neither the technological infrastructure nor the risk appetite necessary for being a directional or proprietary trader." He is leaving the coming maelstrom perhaps to the younger bucks, who have the stomach and infrastructure for what's ahead; who will work this market not as brokers seeking to benefit stability for institutions, but because they know the inevitable outcome.

It shall become a market driven by two opposing political wills, whose synergistic confluence of motivations will drive it into the floor. And those playing the short side will wring every drop of profit out of it all... the... way... down... It won't be your daddy's gold market. It apparently is no longer Rothschilds... This is why his stepping back is "the sound thing to do."

Rothschild has not left gold! But his leaving the paper driven circus is a portent for those who remain.

GoldiloxHedging#1199774/15/04; 12:35:17

@ JM:

Thanks for the clarification. Excellent help.

Does the Rothchild's exit suggest new power structure in the gold fix market, or just less importance overall, or both?

GoldiloxContrarians#1199784/15/04; 12:41:28

@ OvS:

At least we're not discussing (ad nauseum) who "the Donald" is going to hire on the special two hour finale of "The Apprentice". Such utter puke on "business TV".

From the street rumors, Donald is actually looking for creative accountants to keep him solvent, as he is captaining a sinking ship.

Great Albino BatThe GAB's intuitions regarding recent events...#1199794/15/04; 12:50:07

1. Rothschild "retreat". I would not for one second accept any explanation given by de Rothschild for the retreat from the "fixing table". If there is any area where transparency is absent, it is in the Rothschild moves. Under no circumstances is the public to be given any hint of true motives and objectives. The public is the flock of sheep to be fleeced, nothing more. To be fair, Rothschild is not the only capitalist firm to proceed in this way, by any means.

Recall that when the London Rothschild ancestor (Nathan?)knew in advance of the defeat of Napoleon at Waterloo, he deliberately spread a rumor at the stock exchange, of defeat for Britain, thereby precipitated a panic and proceeded to amass huge stockholdings at giveaway prices, that promptly surged in value hours later, when the victory over Napoleon was announced.

2. The savage attack on gold prices. Given the general geopolitical and economic situation in the world, this attack on gold TELLS us that the situation of the paper-peddlers of the world is absolutely desperate. They are losing the battle, and they know it. They are throwing everything including the kitchen sink into the battle to keep gold down. They will LOSE.

If gold is so unimportant, as Sarkozy says, why this frenzied effort to smash its price? As articles at point out, men attempt to lie, but the receiver (listener) of the lie has to want to be lied to, for the lie to succeed. The very actions of those who are smashing gold, TELL us they are panicked and know they are losing.

The gold smashers are only playing for time: "It is better to die tomorrow, than today." There is no way out for the paper-peddlers. The whole continuation of our present world, depends on keeping gold down, an essentially impossible objective. The gold smashers are doomed, not the gold holders! Buy, buy and buy all you can at these prices!

3. Dollar Bill: re your optimistic view of Muslim opinion regarding the USA. I don't know your sources for such an upbeat view of Muslim opinion regarding the US and USA men.
I very much doubt whether there is any substantial truth in it. Those who are expressing positive opinions in favor of the US may just be acting prudently; what they really think and feel may be VERY different. Revenge is not condemned by Islam, and I feel we shall see revenge daily and increasing until this MidEast adventure is resolved. 100 years?

4. As you can read at, Bill Clinton when President was not at all pleased when Benjamin Netanyahu, then Prime Minister of Israel, quite freshly announced that "the USA is a strategic asset of Israel". (If every asset has a corresponding liability (except gold!)then perhaps if the USA is a strategic asset of Israel, then Israel is a strategic liability of the USA?)

If the USA loses its dominating role in the world, which looks possible, then Israel also loses its prime "strategic asset". That means a nuclear world war, and Heaven help us!

Let us "cultivate our garden" as Voltaire said, and seed it well with gold, against a Time of Troubles.


GoldiloxCEO Pay/Worker Pay Ratio Reaches 301-to-1#1199804/15/04; 13:11:29


Average Worker Takes Home $517 a Week; Average CEO $155,769 a Week

BOSTON - April 14 - After declining for the last two years, the gap in pay between average workers and large company CEOs surpassed 300-to-1 in 2003. In 2002, the ratio stood at 282-to-1. In 1982, it was just 42-to-1.

According to Business Week's 54th Annual Executive Compensation Survey, published this week, the average large company CEO received compensation totaling $8.1 million in 2003, up 9.1% from the previous year. Business Week's survey covers the 365 largest companies that have reported their executive pay to date.

From 1990 to 2003:
CEO pay rose 313%
The S&P 500 rose 242%
Corporate profits rose 128%
Average worker pay rose 49%
Inflation rose 41%

The average production worker fared less well in 2003. Their annual pay was $26,899 in 2003, up just 2.1% from 2002 according to the Bureau of Labor Statistics. The average worker took home $517 in their weekly paycheck in 2003; the average large company CEO took home $155,769 in their weekly pay.

If the minimum wage had increased as quickly as CEO pay since 1990, it would today be $15.71 per hour, more than three times the current minimum wage of $5.15 an hour.


Couple this with the ongoing imbalance in insider selling and the latest spate of "special" dividends to pass corporate cash on to stockholders, and we get a poor picture of health for American business.

During the growth years, we saw employee groups buying out their companies; now we see companies selling out employees with offshoring and gutting investment capital in "special dividends" to bolster stock price, while the exec packages continue to rise astronomically. All while record numbers of corporate execs are under indictment for raiding the "cookie jar".

GoldiloxIMF's Debt Jitters#1199814/15/04; 13:22:57


Although we have harped on the seriously rising tide of U.S. debt, and wrung our hands endlessly warning about the eventual and unavoidable outcome from spending vastly more than we actually make, we're pleased as the dickens today to see the IMF has issued a report that says if nothing is done to control the debt, just the interest costs alone will reduce global economic output by 4.2% come 2020. A good synopsis of the story at the NY Post's breaking news site at

But if you want to dig into the actual IMF documents, click over to

with your Acrobat Reader at the ready and be prepared to digest 40-pages of detail. But check out this from the the summary:

"At some point, as U.S. government debt rises, the beneficial effects will almost certainly be eroded through some combination of withdrawal of fiscal stimulus and higher longterm interest rates. The latter concerns are particularly important for emerging market economies with high levels of foreign currency– denominated debt, as such countries are particularly sensitive to higher global real interest rates. The results presented in the essay suggest that, with growth in both the United States and global economies accelerating, a phased withdrawal of fiscal stimulus over the next few years, in a manner that pays due attention to incentives to work and invest in the United States, would be a sensible and prudent way to balance short- and longterm economic goals."


Every once and awhile some bigwhig needs to balance Cheney's foolish remark that "deficits don't matter", just to sound like they're paying attention.

a nation of one+#1199824/15/04; 13:31:03

We goldbugs are mistaken for contrarians because media
commentators -who, if they had any sense, would not be
media commentators- focus on the uninformed masses. As
the masses smarten up, we'll stop looking like contrarians, and it will be because they joined us.

Jacob MarleyGoldilox - hedging#1199834/15/04; 13:47:20

IMVHO, it is more a diminishing of the importance of paper gold trading than anything else. It flourished in the past because of a political incentive to foster it. The dollar world supported it, in order to take the pressure off of physical trading, and employ it as a throttle to control the gold price, as it competed with the dollar. The dollar sought to keep up the appearance of strength, by showing gold as weak. The rest of the financial world that had been on the receiving end of a host of negative dynamics from Bretton Woods, and the post-BW era, sought to support the system to keep stability, until an alternative system -- one that would be completely different in structure -- could be brought on-line. Such a system would not compete with gold (incentive to keep it weak -- hence more of the same), but would promote strong gold and would alter the entire foundation that permitted these former dynamics, by which they were constrained.

Rothschild, I don't believe is being anything but transparent in his announcement to depart the "gold business" -- the paper gold business. He by no means has left gold. But where he seems veiled is simply that by stating the facts, most people who still perceive things through the lens of the past, and incorrect monetary notions, read into it what he never said. In fact, Baron de Rothschild says very little in this article by way of direct or indirect quote. As you can see from the buzz, people are reading everything they want into it, including myself. This is natural, and we are all entitled to our own musings. My stance here is not so much what he says by itself, but that it offers us another confirmation that the map laid out for the Trail is true, and that the sign posts along the way do lead where they say they will.

The bottom line is that there is a change to the gold market upon us, not controlled by a handful of manipulators in secretive quarters, but driven by the momentum of human will. The centuries' old gold paradigm of fixing a price, and demonstrating the credibility of issued paper in terms of that fixed price, has pent up the true value of gold to monumental proportions. Smart people have chosen to "go with the flow" and have been at work designing a currency system that will allow gold to be expressed in terms of its true value. In a world that is dominated by financial forces, this is essential to have. Gold would never be allowed freedom, if the world still needed to function within the framework of a good-as-gold currency setting, as this would devastate that currency, proved unable to keep up with gold, and send the world hurtling into a black night of global depression.

This is why Euroland supported the dollar off of gold for 30 years. It set about the task of building not a regional currency -- that is a facade -- but a currency whose architecture can support global finance on a global scale. This alone will allow gold to go free. Without a successful euro, we will be forced to either retreat to more of the same, or else something would break, and drive us into near chaos in the process. Even then, only ownership of physical gold would be of benefit, if any benefit were to be had -- but I hate to consider the world in which we would live in that scenario.

GoldiloxFuture History - Collapse - 4.4 Million Jobs Lost in 2004#1199844/15/04; 13:49:28


Synergists saw it coming a number of years before it actually manifest. Examples of corruption such as the Enron bankruptcy, the Tyco shareholder rape, the precious metals price suppression since 1995 and the theft of the presidential election in 2000 do not happen as isolated, discrete incidents. Corruption of this level requires a supporting structure to arise, be nurtured, and grow. All of the financial scandals noted above, and the others too numerous to itemize, grew from the same substrate of personal greed, collusion among thieves (oops, really meant to say, 'financial professionals'), and the support of corrupt institutions.


A future tale in a class with Slingshot's awesome battle stories. Not too farfetched, but just one of a zillion possible outcome scenarios.

GoldiloxMicro-clusters and metals#1199854/15/04; 14:32:09


Mono-atomics, also known as micro-clusters, are arrangements of elemental substances at levels of size that we did not know existed. That is, a mono-atomic of an element is not an atom as we used to understand them, rather it is a large collection of those parts that make up the atom, without involving any other element (thus not a molecule nor compound and thus mono-) but of such size that the appellation of 'atom' does not apply. Nor are their properties the same. Only metals at this stage in our knowledge, cross into micro-cluster size, all their properties change. For instance, gold, a very good conductor, as it passes into micro-cluster size, loses its electrical conductivity, turns a diachronic green, and returns heat with no apparent impact on the micro-cluster itself. Mono-atomic gold has no ability at all to transmit electricity, thus a perfect insulator at any thickness.

Further, as we all remember from general chemistry class, gold has only one stable isotope found in nature. Thus the single set of alternative properties when gold goes mono-atomic. Silver has two stable isotopes found in nature, and not surprisingly, when in a micro-cluster state, silver has two primary state changes based on which isotope is being explored. The silver mono-atomic can be either a room temperature omni-directional superconductor, or a room temperature orientation specific conductor. Then there are the metals with many stable isotopes, such as copper. Or tin. And each of these can be expected to have specific characteristics at micro-cluster levels.


Future uses for metals? Interesting research topics, at least.

Cavan ManHello MK#1199864/15/04; 16:01:43

You must be selling a LOT of gold because you have not commented on the Rothchild announcement. For me, having followed the murky, opaque would of the precious, this announcement is EXTREMELY significant. Best...CM
SmeagolWhat has the Wizard got in his Rocketses?#11998704/15/04; 17:23:43

Knallgold (4/15/04; 11:32:07MT - msg#: 119975)

...sss... don't tell, precious... we sneaked into the Wizard' lab and found this in a book:

"...[aurous oxide, Au2O] forms with ammonia the highly explosive 'gold fulminate', probably AuN.NH3."

Maybe he's been adding a little of IT to his Golden Rocket lately?


MKAcutally, my good friend,#11998804/15/04; 17:26:52

you caught during my afternoon quiet time when I remove myself forcefully from the office and head for a quieter place to work on things I like to work on - and posting on the forum happens to be one of the things I like to do.
You are correct. We are very busy these days, as we almost always are when the price drops, and the true-believers make their presences known. I find the type of client who calls during these down treks to be the most enjoyable of our clientele - people who know what they are doing and why they are doing it. The physical market is quite a different animal from the paper trade and the motivations of the participants are different, as I can see from my visits to the forum, where some of the paper traders find this a good place to grumble about their losses.

But that leads me to your good question, and as always, it does not surprise me that you are the one here (among some others) who senses that the Rothschild move might be important. As you know, I have been a student of the Rothschild dynasty for a good many years and I certainly appreciate them for what they are - one of the first and most significant investment banking houses. I also appreciate the long term role they've played in the gold market. After all they did start out as a simple purveyor in coins and bullion and transformed that humble beginning under the Red Shield thanks for the most part to a combination of brains and good fortune into a legendary financial business - one synonymous with banking and running parallel to much of European history. And through it all they managed to remain a private firm owned by the family - an achievement I admire. By the way the story, as I know it, is that Nathan Rothschild had carrier pigeons as a hobby and received information of Wellington's victory long before the rest of the market and therefore had the opportunity to buy cheap before his City competitors knew of Napoleon's defeat. But that's neither here nor there.......I am neither a defender nor a critic of the House of Rothschild, just an observer.

The press release from NMR to me was more revealing than the colorful journalism that accompanied the announcement and my reading of it was that Rothschild was leaving the "trading" aspect of the gold business, but that they would continue with lending end of things which is where the real money is made. I've linked the actual price release above which was provided this morning by our good friends at I wouldn't be surprised however if they slowly but surely unwound the gold lending business as well, in that the nature of the business itself has changed and the role of lender to the mining companies is diminishing on its own. With Rothschild the motivation is the lack of returns on the simple commission gold business - which trades at very thin margins. The bigger profit gold carry trade business - which included loans and hedging operations (and all the management fees attached) - is dying, if not already dead, as mine companies go to the demand side of the gold fundamentals ledger. It signals the future of gold. The death of the gold carry trade/mine hedging businesses has come to fruition as I predicted a long time ago with the Rothschild retirement from the Fix being a final and highly symbolic milestone. Others will follow, as they go on to what they deem to be more lucrative businesses.

But what is the City's loss will be the physical owners gain because what the Rothschild withdrawal signifies is a reduced role for the banking functions - the operations as Aragorn and FOA pointed out here long ago that became anathema to higher prices. What is ironic about the whole thing is that the seeds of Rothschild's self-styled withdrawal as the lead firm in the London trade were planted a few years back by the firm itself when it pushed hard for more transparency in the gold market. NMR played lead dog in an effort that ultimately led to the first Washington Agreement and the beginning of the end for the gold carry trade and mine company hedging programs. That effort was led by a friend of a mutual friend of ours who posts under the CoBra handle - Guy...............(can't remember his last name) perhaps CoBra can help us.

I accept what NMR is saying at face value. I do believe that they do not do enough business on what they call the "commodity" end of things to support the infrastructure required to do it right. I note that they were careful to let their mine company clientele know that they would not be abandoning the business completely, and I'll tell you why I believe they went to those lengths: The trend now is for miners to buy back their hedges. Over the last few months I have been doing a great deal of research for the publication of the updated version of The ABCs of Gold Investing, and I can tell you, unequivocably that the most important development over the last few years is the swing by the mining companies from the sell side of the fundamentals ledger to the demand side - a swing of between 500 to 600 tonnes on the average (using GFMS' conservative numbers). That is a very big number. (I read with interest the comments here the other day about various writers picking up things and running with them. Wait til this little observation sinks in.) Rothschild is aware of the number. The hedge funds are aware of that number and that is why they are now net long the gold market.

People talk about paradigm shifts all the time and throw the phrase around with casual aplomb, but let me say that this is the kind of paradigm shift all of us in the gold market have been waiting for. (And now I've given you a glimpse of the theme of the new book - just recently accepted for editing by my publishing house). And this is precisely what Rothschild is reacting to.

I would not be surprised to see that firm end up in this market as an investor, as opposed to a broker - a move in keeping with their long history of exploiting major opportunity. There is more money to be made as an investor in gold these days, than in brokering it. Rothschild has no interest in the retail business, and that's the only place money can be made with regularity in today's gold business - they have always been essentially a wholesaler and syndicator of financial opportunities, and I couldn't think of a better opportunity at the moment than gold. However, I believe they will keep it to themselves just exactly how they will go about exploiting that opportunity.

Now here's the last part of what I have to say on this for the moment and now the groundwork is there to tell you why I believe Rothschild was so careful in their announcement today to let their mine company clientele know they would be there for them. Since the trend among mining companies is to buy back metal and settle their hedgebooks, how would you feel if you ran a mining company and one of your chief bullion banks told you they were cutting and running in toto? Your first question would be: "Well, how will I go about settling my book? I thought you would be here to buy for me if I needed it." That's the one thing I find unsettling about this whole withdrawal. If Rothschild had announced that they were completely out of the business, I think several mine company executives would have had to have been peeled from the ceiling. As it is, they say they are not dropping their lending business. Does that include assuring their clientele that they will be buying gold for them? Let's turn the coin over. Maybe, it is precisely because they have to buy for their clientele that they no longer want in on the London fix and the daily trade AS THE KEY PLAYER!

There is much to think about here, and I assure you there will not be a lack of players to fill the Rothschild gap (at least with respect to the prestige associated with the London fix), but the remaining question on the table is who is going to be the main player in the physical gold business now that NMR, at least on the surface has withdrawn. Can the market find the physical? And who's going to get it?

All of this dovetails with Aragorn's earlier post on the French/German situaion and I would like to say a few words on that, then try to pull this all together into some kind of sensible framework. Aragorn you talk about misplaced sentiments and your points are well taken. It is even more convenient to misplace the role of the central bank which is not as a quasi-hedge fund, but as a steward of the nation's money and protector of the banking system. The function of a reserve asset is not to make a central bank returns, but to give the nation a fall-back position should it need to defend its currency or raise capital in the event of a national emergency. The folly of casting central bankers as portfolio managers for the nation's assets can be most readily seen in the Bank of England's botching of its gold sales - all accomplished at cyclical lows in the $250 range. But I do not see that trend reversing itself.

The problem with the modern central banker is that he is no longer content to play the traditional role of steward of the nation's money and banking system. In order to emulate his colleague on the commercial side, he would rather trade the markets. Such thinking, in the age of the day trader, has become epidemic. Central banking used to be a conservative profession whose masters were drawn from the desks of the oldest and most influential banks, steeped in the tradition of making a sound loan, and providing an atmosphere which encouraged deposits. You could rely on these people. Now you had better know how to trade the markets and find the best returns if you want to call yourself a central banker and the Welteke affair, in this light, becomes a bit more understandable. My, how times have changed....... Next Europe will draw its central bank governors from the commodity trading pits and the hedge funds. But who am I to defend the old ways, humble Denver-based gold broker that I am? Better to sit back, watch the show, and help our clientele to weather the uncertainties such perfidy engenders.

In the end though, we all know that this business of selling off the national gold has something more behind it than simply garnering a better return on assets, don't we? All of which explains the full court press to bring the French and German gold reserves to the table - two of the largest remaining gold hoards on earth - in some quarters, it would seem, better achieved now at $400 per ounce then months and years from now at double or triple that price.

So it all ties neatly together. All signposts pointing somewhere the geography of which can be ascertained but not clearly described.

I'll leave this in the air......and a subject for this highly visited, well read, and perfectly positioned Table Round.

Chris Powell: I would like to ask that this remain here only as a matter for discussion at this table. It is not polished and meant for the wider world. Just some conjecture for table 'insiders' to chew on.

MKThe post below#11998904/15/04; 17:37:33

is in answer to Cavan Man, with something toward the end for Aragorn.
Smeagol...and for Sir Rich#11999004/15/04; 17:40:09

...we found this in another book (the one that said "Hardt - Pyrotechnics" on the spine):

"Paper or silver torpedoes are made with silver fulminate, a primary explosive even more sensitive than the mercury fulmminate once used in blasting caps and primers. The compound must be made in small quantities by firework makers as it cannot be shipped or stored in bulk. These torpedoes are mostly fine gravel; the only casing is a single layer of tissue paper, twisted shut to form a tail. In the United States they are the only survivors of the formerly large family of torpedoes. As might be expected, only the smallest are still permitted; the various brands of "poppers" or "snappers" contain only a quarter-grain of fulminate, or about 15mg. They make a very sharp crack which displays the power and brisance of silver fulminare, but are mild enough that they can be crushed between the fingers without discomfort. Torpedoes are traditionally packed in sawdust to help prevent accidental explosion during shipping."

...sss... someone's coming , precious... it might be Gandalf, we better get out of here now!


The CoinGuyMK#11999104/15/04; 17:50:20

Thanks for the comments, time has been on the short side in the last few hours of this seasonal madness we go through. Although, I noticed no increase, and actually a decrease in my gift to Uncle Sam as my physical holdings bloom without having to take capital gains or pay taxes until I separate myself from some of my wealth reserve. The positive side of my "ledger" is smiling, just not for all to see. Smile.

Best of wishes to all at the table,

The CoinGuy

SmeagolFe Fi Fo Fum#11999204/15/04; 18:13:42

We hear Giant footsteps...

(MK) "If Rothschild had announced that they were completely out of the business, I think several mine company executives would have had to have been peeled from the ceiling. As it is, they say they are not dropping their lending business. Does that include assuring their clientele that they will be buying gold for them? Let's turn the coin over. Maybe, it is precisely because they have to buy for their clientele that they no longer want in on the London fix and the daily trade AS THE KEY PLAYER!"


are you saying, Sir MK, that it would be a ...sss... a 'conflict of interest' if Rothschilds remained 'the key player', and they wants to keep their noses clean, so they will be seen sitting in the "We Don't Have Anything to do with That" seats as more attention is focused on the whole matter when Paper Gold starts to burn?

...and maybe it also frees them to buy more Physical for themselves at this critical juncture, maybe for the last time, before the fire?


MKSmeagol. . . #11999304/15/04; 18:22:36

You are a gentleman and a scholar.

An astute gentleman and astute scholar as evidenced by your most recent post.

Golden LionheartSocrates964 - P & F Charting#11999404/15/04; 18:39:54

I have taken on board all you told me about P & F Charting.
Many thanks. I have been working from two books. "How charts can make you money" by T.H. Stewart 1986 and another called "How to chart your way to success on the share market" by Merril Armstrong 1984 (an Australian publication).
They talk about the one box, three box and the five box reversal charts. I guess I chose the one box because it is the easiest to compile. It would seem that the one box is perhaps too sensitive and the five box too insensitive. It still worries me that you tend to get a very different picture from the three different parameters.
Thanks again for the info.

Looking at my chart again, gold, if it rises from its present level could be making a triple bottom! Think I'll leave it to the experts!

Smeagol(bowing)#11999504/15/04; 19:46:50

Thanks you, Sir MK... but if not for you, and all here in your Castle, we would be much less sscholarly... we are STILL reading your Posst and others... pondering...sss... many things...

(MK)"...the seeds of Rothschild's self-styled withdrawal as the lead firm in the London trade were planted a few years back by the firm itself when it pushed hard for more transparency in the gold market. NMR played lead dog in an effort that ultimately led to the first Washington Agreement and the beginning of the end for the gold carry trade and mine company hedging programs."

'an end'... sss... and maybe after biding awhile, for the dusst to settle, Rothschild might jusst step up to the barrel-head and place that bonfire-lighter-sized order for It, and demand delivery? They would laugh at Smeagol, O yes, (grin, we are of VERY little worth), but who would tell THEM 'No'?

IT is fun to think about.


SharefinRothschilds exiting stage left#11999604/15/04; 21:26:52

Perhaps they are exiting stage left knowing what is coming down the pipeline in the way of market risk.
The first fat man to burp contentedly & intone he intends to leave the party.

If derivatives are going to blow then the whole commodities sector will go ballistic - think counter party exposure.

Likewise we're heading into a phase similar to the 1970's where the US refused to honour it's gold obligations & the purchasing power of the US Dollar plummeted as commodities soared 100%-200%-300%.

Imagine the same thing happening today with all the derivatives attached.

I would contend that in hindsight their move will appear most timely & insightful.

Dollar Bill.,.#11999704/15/04; 21:53:36

Black Blade, perhaps this link is a good addition to your energy info sources?
WaveriderA Day Late and A Dollar Short#11999804/15/04; 22:52:40

"Contrarian Round Table" probes the outer limits of
Contrarian thought in this essay about the US Dollar."

slingshotOvS#11999904/15/04; 23:06:41

Let not the absence of opinion or information be taken for weakness.It is this time we are forced to search elsewhere to find the truth.To reasert and confirm that conclusion we have made at the begining. As it is now and will be in the future, the gains and losses will test us all.
To those who do post and try to explain what is happening, are the bedrock on which the rest of us stand.
Yes OvS, the cheerleaders are silent but they have not run away. They have just realised a Bull Market has its ups and downs.

GoldiloxBakerhughes site#12000004/15/04; 23:51:41

@ $Bill

Nice find! The oil analyst (I forgot his name) who recently joined Puplava has info like this, too.

His site can be linked from FSO.

Topaz"economical" Gold...good riddance!#12000104/16/04; 00:45:31

All this noise about the economical uselessness of Gold is music to this bugs ears. For the establishment of a "freegold" environment, it (Gold) must firstly be disassociated from banal economics and become regarded as a stand-alone Wealth Asset.
The Mona Lisa is an example...of itself economically "useless" and "priceless" ...we can't all "possess" the Mona Lisa, can we.

Chart shows Oil still has some catching up to do vis DX. We watch!

NedGoldilox#12000204/16/04; 05:00:25

I notice the link you provided about "the discovery of WMD" is from Tehran, Iran. Surely this information is bogus. At this point, a little more than a year later, how could anyone REALLY believe that the US military has found WMD?
This would represent the lowest of lows in terms of political posturing.

Please keep us informed.


Socrates964Golden Lionheart#1200034/16/04; 05:10:55

You're welcome! I actually think that Dorsey is the best book out there, but found much of it superfluous (maybe it was over my head). Nor did I find much added value on his website, to which I subscribed for a while.

One point I'd make is this. I don't like P&F as a screening tool for picking stocks because by the time it gives signals, it's usually too late to get in at the bottom. It's kind of like recruiting for a job by looking at a pile of chest X-rays of the applicants. You wouldn't choose one because they had a nice looking X-ray, but you would reject one if you saw that they were dying of lung cancer but looked apparently healthy.

Another point is that, extraordinarily, no-one has ever given an adequate explanation of why P&F works - or at least I'm not aware of it. Granted, if you wear an economist/econometrist's hat, you're not interested in root causes and are satisfied with showing statistical correlations - unfortunately, I have a scientific bent that leads me to seek the root causes of things and this is still a mystery, even though I have some hunches as to why it may work.

Dollar Bill.,.#1200044/16/04; 05:28:31

Thanks Waverider. This link is off your link.
Shapur@Mk ---re: yesterday's Rothchild's post#1200054/16/04; 06:14:03

Thanks for your insight in this matter. I think that this tactical withdrawal from the visible fixing process and the exit from the "hedging type business" is very important. In fact, I believe this event to be a signpost along the gold trail or at least a marker of some type. To be sure, I do not know the whole truth about this issue and do not know all the implications of the new Rothchild positioning--but I do know that it is a real shift in behavior.

And that means that something very real has changed.

Take Care----and Happy Spring

CometoseTravel Advisory IN Saudi Arabia#1200064/16/04; 06:55:34

U S State Dept recommending all Embassy workers and Americans living in Saudi Arabia to come State Side?

How curious is that relative to some other things I have been reading on the Internet re; THE TIME .

misetichSaudi Arabia Criticizes U.S. Mideast Policy Shift#1200074/16/04; 07:16:08


RIYADH (Reuters) - Saudi Arabia, a key U.S. ally, said on Friday that Washington should not back Israeli plans to keep parts of the occupied West Bank because this would cripple peace efforts and nullify previous peace agreements.
"The Kingdom of Saudi Arabia was surprised by these views...because, if cemented, they will complicate peace opportunities and cripple the peace process on which the hopes and expectations of the international community are staked," said a statement carried by the state Saudi Press Agency.

"Instead of building on previous decisions and agreements, these views threaten to contradict those decisions and annul those agreements at a time when everyone was expecting positive developments in returning to the path of peace in the Middle East," said the Arabic-language statement.
Saudi Arabia's de facto ruler, Crown Prince Abdullah, is a staunch supporter of Palestinian rights and anger at Israel and the United States runs deep in the conservative kingdom.

During a Friday sermon at the Grand Mosque in Mecca, the birthplace of Islam, a leading cleric prayed to God to "make the mujahideen (holy fighters) in Palestine victorious against the Jewish, Zionist aggression."
Saudi newspapers slammed Bush's comments and warned that support for Israel's "expansionist policy" would have serious implications for the U.S. troops in Iraq where Shi'ite and Sunni Muslims insurgents are battling the U.S.-led occupation.

"Moderate Iraqis...will now despair," said the English-language Arab News in an editorial. "It will become clear to them that Americans can no longer be part of any solution because they cannot be trusted."

"He wants the votes of the Zionist and fundamentalist Christian right. To get them he is prepared to destroy the last vestiges of America's position as an honest broker," the newspaper added.

Saudi's reaction does not come as a surprise. Venezuela's Chavez also openly criticized and accused Bush for the killing of civilians in Iraq and for alleged US interference in Venezuela's politics.

Oil prices remain stubbornly high - even though the US $ has recovered somewhat
The odds favor higher oil prices as Saudi's and Venezuela two key US oil suppliers play the weapon at their disposal-

Add a little mixture of China's continued demand and the prospects of higher energy prices worlwide will cripple any expected global recovery

The worse element is that the Feds have played out most of their bullets - to cope with any unanticipated events

The odds of continued hostilities and retaliantions from angered "foes" is HIGH

All Aboard The Gold Bull Express

misetichEU Sharpens Criticism of Bush's Shift on Mideast#1200084/16/04; 07:47:15;jsessionid=ZV54UCZ3GD4RMCRBAEZSFEY?type=topNews&storyID=4849554


TULLAMORE, Ireland (Reuters) - The European Union stepped up criticism of President Bush's Middle East policy shift on Friday, telling Israel it must make peace with the Palestinians rather than its friends in Washington.

"To achieve lasting peace and security, Israel still has to reach agreement with the Palestinian people," said Irish Foreign Minister Brian Cowen, whose country currently holds the presidency of the bloc.

Diplomats said French President Jacques Chirac had voiced what many across Europe were thinking on Thursday when he branded Bush's support for the Israeli plan to keep parts of the West Bank an "unfortunate and dangerous precedent."
Cowen, acknowledging differences with Washington, said: "Everyone knows that any attempt to resolve the conflict unilaterally will not bring lasting peace."

US insists on making unilateral moves in arbitrating disputed issues continuing on offending and demeaning other nations or institutions

Anti-Americanism has grown in the last couple years as US foreign policy has shown complet disrespect for Europeans in particular

The heavy handed approach of "either you are with us or gainst us" has thus far proved to be costly as the costs of war have risen and been absorbed by US citizens

Iraq oil revenues are climbing - over $7 billions are in the coffers designated for Iraq reconstruction - and the games are just beginning as the handover to Iraqi takes place (if it does) on June 30 to a UN suggested caretaker government

It has been reported Iraq's population is offended as foreign contractors are reaping the benefit of the reconstruction without the hiring of Iraqis

The two issues - Palestine and Iraq- have become a lightining rod for Arabs and Muslims - to unite

US has forced Europeans on the defensive with their "vision thing" - US has lost more in the last few years - read allies -
It took decades to build friendships and months to destroy them

The US chosen path is rocky and tumultous which will keep the boiling room red hot

GOLD - PHYSICAL GOLD has no rivals during these times as anything can happen at any moment - since emotions are flying HIGH

All Aboard The Gold Bull Express

MKNews & Views#1200094/16/04; 07:51:14


Private buyers fill bullion vaults
"Gold vaults in London are at their fullest in more than a decade following a rise in private investment in bullion and an increase in the amount of gold from producers unwinding their hedge positions." Financial Times

Gold bulll run to continue as long as it holds $390 - ANZ Bank,
Gold trading companies need to diversify client base (or there is life after the Rothschild's), OsterDow Jones

Foreign central banks hold record U.S. debt - Fed, Reuters


Featured Analysis

New! Is it back to the '70s for gold?-Financial Post
John Ing detects strong parallels now with rally to US$850.

New! Fed Officials need to get out more, go shopping - Bloomberg via
In the rarified atmosphere at 20th and C Streets, better known as the Federal Reserve Board, there is no inflation. In the real world, it' a different story.

New! Howard Ruff back on gold scene with new book
Says gold going way over $1000 per ounce

****** Much to read. Deep background on gold and the role it plays in your investment portfolio. For your weekend reading pleasure, we invite your visit to our online newsletter:

News & Views
A Review Forecasts, Commentary & Analysis on the Economy and Precious Metals

How do we go about choosing an article for our Featured Analysis section?

First, it must be specifically relevant to the gold market and gold owners. Second, it must have staying power. Third, it must be authoritative - from widely recognized and credible sources. And last, it must be worth the time required to read it. In short, this section's mission is to provide you with a credible snapshot of what's driving the gold market now.

USAGOLD Daily Market ReportPage Update!#1200104/16/04; 07:51:37">
The Daily Gold Market Report has been updated.

If you are considering investments in gold we invite you to">request our free introductory information packet detailing the products and services offered by USAGOLD ~ Centennial Precious Metals. We welcome your inquiry and look forward to working with you.

OvSKnallgold#1200114/16/04; 07:56:06

Watch your "younger" twin, Knallsilver
on this morning's chart....

MKNews & Views #1200124/16/04; 08:08:32

misetichBundesbank President Ernst Welteke Quits#1200134/16/04; 08:13:23


April 16 (Bloomberg) -- Bundesbank President Ernst Welteke resigned after a 7,661-euro ($9,199) hotel stay paid for by Dresdner Bank AG for him and his family sparked an investigation by Frankfurt prosecutors.

Welteke, 61, offered his resignation to the Bundesbank's board, the central bank said in an e-mailed statement. The board said the step was ``appropriate in view of the bank's reputation and the perception of its duties.''

Welteke, who earns 350,000 euros a year at the Bundesbank, agreed last week to repay Dresdner Bank half of the four-night hotel bill at Berlin's Hotel Adlon that he incurred together with his wife, two sons and a girlfriend of one of the sons at an event celebrating the introduction of euro notes and coins in 2002. The Bundesbank repaid the other half of the bill.

The "Welteke saga" continues - His family reportedly mentioned that Welteke was being forced by politicians as Welteke was against selling gold! paraphrasing "...leave gold alone" Welteke was quoted as saying

Yet USA Gold Forum readers know otherwise - as Welteke was head cheerleader of disposing Germany's gold -

The waters are murky - and we haven't heard the last of this...

All Aboard The Gold Bull Express

OvSThe Force#1200144/16/04; 08:14:42

Let's not belittle brokers. The "original"
Rothschild fortune was begotten through
brokering numismatic goldcoins to a local
This is one family that knows how to survive.
Very sharp and very thorough.
A few years ago I sent a letter to the head
of the London branch. Very promptly I received
the reply in a nondecript machine-cancelled
envelop declining very politely a deal I proposed. The letter was signed by his personal secretary but obviously dictated personally by his "Lordship".
Do I detect a similar sharpness and thoroughness
in our sponsor? MK or JK, let me know when you are
going public...OvS

Jacob MarleyThat barbarous relic...#1200154/16/04; 08:35:05

Ad nauseum, it seems it must be pointed out that JMK did not call gold a "barbarous relic." What he referred to as "barbarous" was the "gold standard." "In truth, the gold standard is already a barbarous relic." [Tract on Monetary Reform] This is a HUGE distinction. There currently exists a small fissure in the surface on which two opposing lines of thought are positioned. Since the nominal ground on which they are set is common, i.e., "pro-gold", the distinction seems irrelevant except to marginalized academics, and those with a thirst for arguing the trivial.

In time, this fissure through a shifting of global and tectonic proportions, is destined to become a gaping chasm whose span no one will any longer cross.

As MK points out, the hedge funds are already net long. This can and will be read in different ways. Many will take this and run with it as a good reason to go long on a uni-directional speculative basis. This is their choice, but the connecting of the dots is flawed. Hedge funds do just that -- they hedge. They make their money not on the basis of picking the right direction for the move, but instead on the basis of movement period -- up or down. Their strategies are highly mathematically based (really entirely so), and they are constantly and simultaneously both long and short the market. The fact that they are net long is noteworthy, but be careful for what reasons.

In fact, from yesterday's postings re: FOA's commentary that this period where the dollar struggles with the dynamics of a lower exchange rate, and price inflation begins to rear its ugly head -- this period would present the present market in paper gold derivative hedges with their "first destructive test."

Those who are operating in the setting of the status quo, who forecast no more than cyclical operations at work, and the dollar to do its down thing, only to follow on with its up thing as the business cycle runs its course -- to these it is natural to be inclined to the long side of gold at this juncture. In fact their models are what are driving these decisions more than human choice. In fact, many are legally obligated to the decisions of their models, regardless of what they think personally.

What will be interesting to watch is how these models begin to fail, as the data informing them proves flawed, where the data do not account appropriately for a global shift in currency preference to the euro, and the implications this has on gold pricing in dollars -- the foundation upon which this entire house is built. This will prove to be a fatal exogenous event. Not an instant shock, like a sudden disaster, but a relatively slow unfolding of a very new financial framework. If the hedging models do not anticipate accordingly, the hedging positions will fail to perform as planned.

Where is Rothschild, et al., in all this? Still in gold. Will they enter the same markets now on the long side? I certainly don't think so with any permanence. It is, imho, not a matter of whether the bullion banks, big and inside hedge funds, and the "commercial" world are cognizant of the euro thing. Obviously they are. It is probably more a matter of with whom they place their bets. Whether they foresee the conclusion of this euro experiment working out as its planners have designed, or whether the pressure brought upon it will cause it to fail its main mission and be relegated to a second-tier regional currency for the euro zone, is the choice before them. These forecastings populate their databases, and feed their hedging formulae. Where they have their emphasis will determine their success or failure.

Is it something to conjure a JPM-Chase as betting (perhaps under pressure) on the survival of the dollar status-quo, and an HSBC to be betting on the successful euro? I sure think so. And this will determine their actions in the market. Rothschild, from an observer who looks upon these types as distantly as one looks on the stars in the sky, it would seem will fall to the side of the euro. As such, they may be out of the paper trading altogether -- perceiving the winding down of the paper trade altogether -- and setting up gold operations quietly to take advantage of a revival in spot trading in volume, which will expose the centuries long undervaluation in gold, and begin to jettison it to stellar realms.

Perhaps it may be appropriate to observe soon that not the gold standard, but the gold paper trade "is already a barbarous relic."

OvSThat Family.#1200164/16/04; 09:54:18

I clicked on MK's link and read the vault story from FT.
Makes you wonder if one should not investigate investments
in the vault-business...wasn't it in the California gold
rush that the purveyors of shovels made the big money?...

Jacob Morley. The Rothschilds are major investors in many
commodities (nickel, gold). Take Pan American Silver, for
example. They have their man "on board" (Yes, they invited
Bill Gates, and he has a 14% stake in it now). I bet, their
above gold is held "privately" in Bank of England vaults,
not at JP Morgan's, HSBC's nor Brinks's. You say: "Will the
Rothschilds enter the markets on the long side? I certainly
don't think so with any permanence.." Considering my above
point, what does that mean?
This is a fascinating forum. I wish I had more time to read
and participate. But there are more important things than
gold to attent to. First, the roof. Then back to my poetry.
Cheers. OvS

GoldiloxWMD and Saudi connections#1200174/16/04; 10:00:55

@ Ned:

Well, news like smuggling WMD certainly wouldn't come from FOX "Fair and Balanced". I'm still looking for more moderate corraboration, although it has been filtered by a Washington news agency (liberal, but American).

I try to read both sides of the fence and filter them using middle-of-the-roaders (if there are any) to search for other sources.

As someone said during the cold war, "If you want to know what's going on in Russia, read the Washington papers. To get news about Washington, read Pravda."

I was listening to World Watchers last night (a group I've followed since the 80's) and Dave Emory was talking about WH connections to Saudi "charities". It seems that the two most notorious were set up to fund the mujahadin by a 1980's three letter company, and OBL naturally continued to use them as he transitioned to Al Qaeda. Customs has been told to leave them alone for fear of "embarrassing" high ranking Saudis and US admins by shedding light on their origins. I wonder if the trouble brewing in the land of Saud will bring any of this to light, or just dig a deeper hole to bury it in.

Washington is rife with "golden" connections to the Saudi royal family on both sides of the Republicat table. Or is it Demican? Maybe the best way to sweep it all under the table is a coup that takes out the RF, after their golden stash safely hidden in London and New York, of course. Then, the coalition can come "rescue" the Saudi people and all their "black gold". This scenario wouldn't surprise me in the least, but it would also not be ignored by Russia and China, IMHO!

"Come and listen to my story 'bout an Arab Ahmed-
A Bekka Valley poppy farmer slighly in the red.
Then one day he was shootin at some dude.
and up from the ground come a bubblin' crude.
Oil, that is, black gold, Tehran Tea."

-with apologies to Lester Flatt and Earl Scruggs

Jacob MarleyOvs ??#1200184/16/04; 10:01:37

Not sure what you mean. I never said Rothschild had their gold stored at JPM or HSBC. Not sure how you got that. I ref. JPM/HSBC, as other large BBs in this arena, and how, by their backgrounds they might (might) be perceiving the future of the paper gold trade as we currently know it. Their reference has nothing to do with Rothschild.

Also, the commodity trade involvement of Rothschild in other metals is really an apple or an orange relative to the gold trade, which stands unique because of its monetary underpinnings. Can you clarify what you meant? Thanks.

GoldiloxBack to the Future#1200194/16/04; 10:05:20

The Sawbuck is doing its thang, again. 89.65 and falling.
GoldiloxGreenSpeak#1200204/16/04; 11:34:59

CNBC reports that Greenspam said Wall St offenders must be punished for investors to regain confidence in the SM, but regulators should be careful to avoid "collateral damage".

Pick your targets carefully?

USAGOLD / Centennial Precious Metals, Inc.The perfect hobby to complement your investment interests!#12002104/16/04; 13:06:21">country collection of gold
Henry BowmanJacob Marley#12002204/16/04; 13:18:35

JM, I don't post often. I mostly just lurk and learn. But, I felt compelled to take a moment and thank you for the clarity of your recent postings. Very understandable. Makes a lot of sense. Please keep them coming.
Jacob MarleyHenry Bowman#12002304/16/04; 13:40:59

Thank you, Henry...
TownCrierVisit for market-close DMR updates, 24-hour newswire#12002404/16/04; 13:44:14

Entry point:
"Dealers agreed that following the extensive sell-off this week that has seen June prices pull back from highs Monday around $423 to lows around $396 Thursday, the market is potentially primed for a rebound should the U.S. dollar continue to lose recently-made ground and geopolitical tensions remain high. However, a spate of consolidation and base-building is deemed on the agenda beforehand so that physical demand can build up at the lower levels and speculator appetite for the metal can return following this week's shake-out."

misetichGlobal: Pitfalls of Asian Central Banking - Stephen Roach (New York)#12002504/16/04; 14:04:25


The financial crisis of 1997-98 was Asia's wake-up call. Never again would the region's monetary authorities be caught with inadequate foreign exchange reserves — unable to defend themselves (i.e., their currencies) in tough market conditions. They have succeeded beyond their wildest dreams. On a pan-Asian basis (i.e., including Japan), the region has now amassed a reservoir of about US$2.1 trillion in official currency reserves (as of March 2004); that's more than 80% of the world's total reserves and is almost triple Asia's holdings of $766 billion existing at the end of 1998, at the worst point of the Asian financial crisis. Collectively, Japan (US$827 billion) and China ($440 billion) account for 59% of Asia's total FX reserves; however, adding in Taiwan ($226 billion) and Hong Kong ($124 billion), Greater China's reserves amount to $790 billion, only fractionally below those of Japan. For Japan and China, the accumulation of reserves has been particularly explosive in recent years; since early 2002, the holdings of both countries have basically doubled. (Note: The official data on foreign exchange reserves, maintained by the Bank of International Settlements [BIS], is only available through year-end 2002; our updates through early 2004 are taken from national sources).

The plot thickens when the mix of official reserves is considered. As of 2002, BIS data reveal that dollar-denominated assets made up fully 73% of the world's total official holdings of foreign exchange reserves — more than double America's 30% share of world GDP. There can be little doubt as to who has led the charge. With Asia accounting for the bulk of the world's expansion in foreign exchange reserves, there is every reason to believe that the region has also led the way in driving the play into dollar-denominated assets. Fed Chairman Alan Greenspan has come to the same conclusion. Since the start of 2002, he notes that Asian authorities purchased almost $240 billion in dollar-based assets (see "Current Account," Greenspan's remarks before the Economic Club of New York, March 2, 2004).
According to Rakesh Mohan, the Deputy Governor of the Reserve Bank of India, "The central banks of Asia are financing roughly 3-3.5% of the current account deficit of the US and most of its fiscal deficit" (see "Challenges to Monetary Policy in a Globalising Context," published in the January 2004 issue of the Reserve Bank of India Bulletin). Asia's monetary authorities have become the primary financiers of the largest imbalances the world has ever seen.
The Asian-style growth recipe also provides great support to the income-short, saving-deficient, and overly indebted American consumer. By funding the bulk of America's record twin deficits, the Asian bid for dollars prevents what would otherwise have been a sharp back-up in US interest rates. For what it's worth, my guess is that intermediate to longer-term yields in the US would be at least 100 bp higher today were it not for the Asian bid for dollar-denominated assets. The Asian subsidy to US interest rates not only keeps the magic alive in America's asset markets — bonds and property, alike — but it also provides the means by which purchasing power can be extracted from such holdings through the ever-efficient financial technology of asset-based refinancing vehicles.
Is this any way to run the world? My answer is "absolutely not." Central banks — both in the United States and Asia — have created a monster that they may no longer be able to control. Income-short American consumers have turned to tax cuts, asset-driven income extraction, and debt as the means to sustain current consumption. The Federal Reserve has encouraged this recklessness by offering the steroids of essentially free money at the short end of the yield curve (a 1% nominal federal funds rate in a climate of 1.7% headline CPI inflation).

Roach has been sounding alarm bells - to no avail - Central Bankers have created an out of control monster

CB's hope is the renewal(comeback) of mid 90's to 1999 US panacea economy and stock markets taking the baton from CB's

US forecasted deficits, are being understated thus the dependency on foreigners will continue unabated -

So much has been thrown to "lit the fire" to no avail - Easy Al & Co are letting things go ala 1994 - expecting the impossible

CB's are hoping and dreaming in la-la land

Current geopoliical events - which are likely to continue for years to come - make it likely that an unforseen catastrophic event is almost a cenrtainty

The "shock and awe" of those unprepared to cope with such an occurrence -as markets players are to complacent - and not diversified enough

A little physical gold goes a long way in providing insurance to one's portfolio

All Aboard The Gold Bull Express

TownCrierSmall world -- ain't it the "dickens"!#12002604/16/04; 14:10:19


In all of broad cyberspace I see we've somewhat arrived shoulder to shoulder; (msg#120023) and (msg#120024). I would use this opportunity to extend a handshake of appreciation -- assuming someone in your ghostly condition is able to take a hand. (Keeping in the spirit of things: you may recall that Scrooge had once upon a time wondered whether Marley could take a chair. He could. And did.) Thanks for the presence, Jacob.


TownCrierGandalf, I wonder if our friend Belgian is there...#12002704/16/04; 14:22:02

Nice way to spend a Friday night.

(The wizard may scroll for french or english translations if necessary.)


Jacob MarleyReturn greetings, TC...#12002804/16/04; 14:31:29

As for "presence" -- it seems your presence has been strangely missing these last few days...

Of course, I can take a hand as well as you can extend one in this ethereous realm in which we speak, where neither ghost nor mortal may boast of being anything particularly different, and both entirely insubstantial.

At any rate, our words still manage to communicate with equal weight, whether present or apart, since the substance lies really within the thought and not the presence.

Good to see your return. JM

TownCriermissing in action#12002904/16/04; 15:18:17


Taxes, my man, taxes. I was lost under a mountain of papers, schedules, forms, instructructions, and publications.

I arrived at an insight about why our system of taxation is so unnecessarily cumbersome. Here is a prime example, drawing from the publication that highlights the tax code changes for 2003.

Something that could (I said could, not would) affect EVERYone in the nation is the lowering of the capital gains taxation. This was addressed in a few paragraphs that occupied only 25% of the page.

By contrast, there is a new section for taxation as it pertains to "Astronauts Who Die in the Line of Duty". That is going to affect, what, two... four... eight... a handful of people? And yet, there it is, taking up 75% of an entire page that EVERYone must slog their way through or around. If Congress would like to rightly recognize fallen astronauts for their service, (and I'm not sure that specialized taxation is the way to do it) wouldn't it be easier for all parties concerned to issue them (or their estate) individually with a special, customized certificate expaining their qualification for unique tax privileges?

And that's just ONE example.

The nightmare becomes larger with each passing year. Thank goodness that gold ownership is so simple and straightforward!

Exhausted, but back in action.


Great Albino BatWhat's in a name? Misetich, re your post 120025 - how does this grab you?#12003004/16/04; 17:52:36

Time to deconstruct the mythical dollar. How about this for a start?

"The financial crisis of 1997-98 was Asia's wake-up call. Never again would the region's voucher authorities be caught with inadequate foreign voucher reserves— unable to defend themselves (i.e., their voucher systems) in tough market conditions. They have succeeded beyond their wildest dreams. On a pan-Asian basis (i.e., including Japan), the region has now amassed a reservoir of about US 2.1 trillion voucher units in official voucher reserves (as of March 2004); that's more than 80% of the world's total vouchers and is almost triple Asia's holdings of US 766 billion voucher units existing at the end of 1998, at the worst point of the Asian voucher crisis. Collectively, Japan (US 827 billion voucher units) and China (US 440 billion voucher units) account for 59% of Asia's total foreign voucher reserves; however, adding in Taiwan (US 226 billion voucher units) and Hong Kong (US 124 billion voucher units), Greater China's reserves amount to US 790 billion voucher units, only fractionally below those of Japan. For Japan and China, the accumulation of voucher reserves has been particularly explosive in recent years; since early 2002, the holdings of both countries have basically doubled. (Note: The official data on foreign voucher reserves, maintained by the Bank of International Settlements [BIS], is only available through year-end 2002; our updates through early 2004 are taken from national sources)."

We live in a world of mass-delusion. There is only one real money: gold.

Our world gyrates around vouchers, digital units, brownie points, if you will.


The GAB has his very own Central Bank, and it holds ONLY gold.

Gold: for thinking humans.


SmeagolAH HAAAHaaa!! Vouchers! HA HA HAAAAH!!!#12003104/16/04; 19:37:20

ahh ha ha ho... whew! O, Sir Bat, ha haa! O, our sides hurrt from laughing so much! Smeagol and our friends have called them vouchers for years. What an eye opener for the uninitiated. Excellent, excellent! This should be in every paper across the World! Is this worthy of the Hall of Fame or what?


mikalTime to Distrust the Trusts#12003204/16/04; 23:25:31

By: Ed Henry
When you have a subject that none of the responsible people are willing to talk about or discuss honestly, you might say that you are dealing with a conspiracy. When you have the major media, newshounds, investigators, reporters, watchdogs, and think-tanks throwing a cone of silence over the most obvious criminal wrong doing, then you might also say that you have a conspiracy.
When you have candidates running for office who are cherry-picked and seem sworn not to mention the subject, candidates who are all members of the same nonpartisan club, then you should also recognize how strong and widespread the conspiracy is.
I'm not talking about the illegal invasion of Iraq, a subject that required massive lies and propaganda on the part of the Bush administration. Thousands died while Congress and the American people were deceived, but many saw through the falsehoods. Although it's a subject where the guilty should be punished, it's not really a true conspiracy or at least it has turned out not to be a successful conspiracy.
I'm talking about economic fraud of the highest order— fraud that goes to the very basis of trust— fraud that revolves around the illegal use of trust funds.

At the close of fiscal 2003, the federal government was managing 159 trust funds, only 16 of which are real trusts dealing with the stewardship of property. That leaves 143 that are trust funds in name only, and only 24 of these account for almost half of the national debt currently standing at more than $7 trillion. These 143 trust funds make up the entire section of the national debt deliberately mislabeled as "Intragovernmental Holdings" and standing at almost $3 trillion in bogus nonmarketable bonds as debt markers.
In short, the federal government has for decades used the concept of trust funds to set up the pretense of "borrowing" entitlement surpluses—overcharges that, instead of going toward the purposes for which the public was taxed, have been stolen by the government and spent elsewhere. To carry out this pretense of borrowing, the government puts bogus bonds in equally phony trust funds and even adds annual interest to these accounts increasing public indebtedness. The interest is paid without money or cost to the government, but by simply depositing more bogus bonds in the respective accounts.
No part of the nation's debt can be paid off without using taxpayer money. That's what makes the honest sale of U.S. Treasury securities to investors, both foreign and domestic, the "safest investment in the world." That's also what makes the "Intragovernmental Holdings" phony trust funds a method of double taxing the public without legislation and, in most cases, without the taxpaying public even realizing that it's happening.
The largest of these 24 black hole debit accounts is the Social Security Trust Fund (the combination of the Federal Old Age & Survivors Insurance and the Federal Disability Insurance trust funds) currently standing at more than $1.5 trillion in bogus bonds and accounting for 22 percent of the total national debt.
The Beltway Bandits are so confident in their scam, they can even confess to the crime without much fear of retribution.
Listen to June O'Neill, former Director of the Congressional Budget Office (CBO) speaking at the Cato Institute's Conference for Women and Social Security:
"It (the Social Security trust fund) holds no real assets. Consequently, it does not generate funds to pay future benefits. These so-called trust fund 'assets' simply reflect the accumulated sum of funds transferred from Social Security over the years to finance other government operations."
If that isn't enough for you, listen to President William Jefferson Clinton in his Analytical Perspectives Section of the 2000 budget proposal:
"Trust Fund balances are available to finance future benefits...but only in a bookkeeping sense...they do not consist of real economic assets that can be drawn down in the future to fund benefits. Instead, they are claims on the Treasury that, when redeemed, will have to be financed by raising taxes or borrowing."
If that still isn't enough for you, read these and many other confessions by those in a position to know by clicking here, or you can listen to the many economists who, when pressed, have told us that turning to these entitlement trust funds means that the poor dears in Washington will be forced to choose between (1) raising taxes (2) borrowing honestly by selling Treasuries (3) cutting benefits to entitlements or annual discretionary spending, or any combination of these three.
These are not only the normal elements of government finance that would be choices whether there were trust funds or not, but are the means of double taxing the public with interest added and doing so without legislation. In a nutshell, that double taxation plus interest is the sole purpose of these "trust funds."
And where are the watchdogs of the "free press?" Where are the millionaire monitor readers of the media?
They are supporting the scam.
Just to take the most recent example, look at what the New York Times says in an editorial titled "Fixes For Social Security" Sunday, April 4, 2004:
"If Social Security is in crisis, it is a very slow-moving crisis. The trust fund will not be exhausted until 2042, and even after that the annual Social Security tax revenues could keep paying out some 70 percent of the promised benefits. What we are looking for here is a fix that could cover the other 30 percent. There are a range of ways to get there."
Can you believe that? There are hundreds of other examples just as ludicrous. When our "free press" should be demanding answers to how the Social Security trust fund became 22 percent of the national debt, they are instead supporting the trust fund scam.
In the last few weeks, you should also have heard that Medicare is going to be forced to turn to its trust fund unless something is done. More of the same.
Senator John Kerry, the great white hope of the "anybody but Bush" crowd has absolutely nothing to say on this subject and is not only a member of the Senate Finance Committee, but is also on the subcommittee on Health Care as well as the subcommittee on Social Security and Family Policy. In other words, he knows all about and is intimately involved in the scam.
In the final analysis, there's just you the taxpaying citizens. Can you refuse to pay excesses in payroll taxes, gas taxes that are supposed to go to highways, airline taxes that are supposed to go to air traffic controllers and maintenance, unemployment taxes where the trust fund is already being drawn down? Of course not.
Remember, there are 24 trust funds contributing to the scam. Even military personnel are caught in the same trap with the Military Retirement trust fund. So are the federal government's own employees with the Federal Employees Retirement System (FERS) trust fund. But these people are apparently willing to go along with the rip-off as long as they are guaranteed their benefits from you, the taxpaying public. (See: Trust Fund List)
There is little if any consolation in the fact that your representatives in government are raising revenue in this fraudulent manner simply because they are afraid to raise taxes honestly, even when necessary, or that they would get it from us anyway in one way or another.
Nor does it help to recognize the hypocrisy involved with the government's protecting corporations from their promises to provide retirement benefits to employees while most of these same corporations are "outsourcing" to other countries or are getting away with scams of a lesser degree than the government's.
We need honesty. The very foundation and moral fiber of this country requires it. We should be demanding that our representatives explain how things like the Social Security Trust Fund became 22 percent of the national debt. We should be demanding accountability from our democratically elected representatives and making certain their fraudulent behavior comes to a stop.
Real trust funds have always been lock-boxes. After years of debates and promises not to touch Social Security funds, Al Gore's jokes about lock-boxes are as tasteless as the Bush jokes about weapons of mass destruction.
Donald Duck could be elected President if he took on the subject of trust funds head on, especially since the solution is so easy. Stop stealing the money, then either give it back to the people or put it in a real trust fund where it can grow to increase benefits to the particular entitlement involved.
"Published originally at : republication allowed with this notice and hyperlink intact."

Dollar Bill.,.#12003304/16/04; 23:29:40

Mikal, Since you used the term "illegal" for Iraq, what would constitute "legal"?
Gandalf the WhiteThanks Townie for the LINK ! #12003404/17/04; 00:04:08

TownCrier (04/16/04; 14:22:02MT - msg#: 120027)
Gandalf, I wonder if our friend Belgian is there...
"The Lord of the Rings - Symphony in Six Movements"
Major live concert on April 16, 2004 in the Antwerp Sportpaleis
I sure hope Sir Belgian was there, as I could not make it to the SportsPalace today!
There are not enough hours in a day anymore.
SO much to do and so little time.
Perhaps Sir Belgian can tell us all about it ?

Goldilox"Illegal" invasion?#12003504/17/04; 00:39:34

@ $Bill and Mikal,

Perhaps a "legal" invasion would be one where Congress was informed of a REAL threat and declared war - oh yeah, like in the Constitution. Administrations like to say that waiting for Congress takes too long, but Congress passed the Patriot Act for them to override the Bill of Rights in 6 hours without even the benefit of reading it - the published wersion was withheld by the GPO. Surely they could have passed a declaration of war against Iraq just as quickly, if a true threat were identified.

GWB is certainly not the first President to bypass the Constitution, but every time an administration does so and thumbs its nose at everyone, the US takes one step closer to dictatorship.

The media is complicit, as they refuse to perform even the slightest "investigative" journalism, fearing Michael Powell would lift their license and re-award it to even more "yes-men" broadcasters. These are the same broadcasters who tell us the economy is "booming", the stock market will go up forever, and gold is a "barbarous relic".

An uninformed electorate is poorly equipped to vote. A deliberately misinformed electorate dangerously condones the acts of those who purposely mislead the masses and manipulate the press.

Gold is "irrelevant".
There is no 'flation.
300,000 jobs were "created"
FIAT is the only true "money".
They only want to "protect" us.
Larry Kudlow is a "real economist".
There is an Xmas bunny.

GoldiloxGold in July#12003604/17/04; 00:59:56


The reason that the 410 to 414 level was so important was that it marked the April 5, 2004 trading cycle low. Notice on the chart above that when the intermediate-term trend is moving up, each trading cycle low holds above the previous low. Also notice that at the intermediate-term, 18-week cycle tops that once the previous trading cycle low is violated it marks a trend change as gold then moves into the next 18-week, intermediate-term low.

So, the point here is, Yes, the March low was an important low as it did mark the bottom for the current 18-week intermediate-term cycle. However, with the recent violation of the April 5, 2004 low at 414, all indications are that this cycle has topped out and thereby was a failure. The decline into the seasonal cycle low is likely still at hand. Based on the timing of the next intermediate-term low, we can expect to see the seasonal cycle low occur sometime in the July timeframe.


Sinclair looks to 480 in Summer. Tim Wood sees 350's. As these are two of my favorite oracles, it looks like volatility is definitely to be expected. Maybe straddles and strangles are in order!

TopazGoldilox (04/17/04; 00:39:34MT - msg#: 120035)#12003704/17/04; 02:10:06

I might be mistaken G'lox, but I don't think Larry "is" a real economist...and I'm sure you meant "Easter" Bunny ;-)
NedGood news#1200384/17/04; 06:32:36

Mr. Gold is rather bullish......

"Gold is going up from here to and through $480 so relax.

That is my firm opinion."

He has become very bullish in the last few days (articles).

That's good news......I hope (think) he is right!


Here's a quote and sorry, I forget it's origin. It's not old, perhaps in the last couple weeks.........

"The driving force for gold is not the dollar nor nominal interest rates but real interest rates. This means if inflation rises faster than interest rates, then real rates can actually decline although nominal rates are rising. This is our expectation as in the '70's, and thus, gold will remain in a bullish trend....."

Cool! Here's a little number for the gold newbies, the 'lurker's'.

Each and every human on this planet wishes to acquire 'wealth', 'riches' if you will, if he has an onze (like that!) of blood flowing in his veins. I will, in no way, shape or form try to define 'wealth' and 'riches'; it's way too thorny an issue. To each man it is different, essentially non-definable. To me its the acquistion of 'things' that have a 'tangible value'. I wasn't going to do it but I'll peel one layer of the onion and leave it alone. I could have a couple of cottages with an array of boats and sea-doos and property and a nice home with several cars and a conservative portfolio of paper assets and a safe buried in the floor with handfuls of precious metals and gems and jewellery and on and on and on......

I can trade the gold for a boat or a boat for gold and ultimately I could sell one 'thing' for another anytime, anywhere, blah, blah, blah. The point is I hope to have lots and lots of things. Now, at any given point in time, call it a static moment, each 'thing' has a 'value', all of these 'things' can be compared or measured to, or equated to any of the other 'things'. Ten onzes of gold can buy me a boat at this moment but in the future 5 onzes could buy the same boat. The world is not static so therefore values are constantly changing.

So what does this mean? Well quite simply I want to acquire or hold items that are increasing in value relative to others. I have to be careful here, let me redefine that statement a little further. I want to acquire, buy and hold items that are presently undervalued (cheap) and not hold items that are presently overvalued. Perhaps in 1997 I wanted to own a computer store or be in the computer business anticipating the Y2K scare. Man, alot of PC hardware and software was sold in '97, '98 and '99. I know, I was there and (shhhh!) we were gouging clients. Did I want to own the computer store and business in Jan of 2000, complete with an huge inventory of PC's and servers and gobs of software?


The point is, I want to buy 'stuff' when it is cheap and continuously rotate this overvalued stuff for undervalued. I acquire wealth. Buying gold at less than $300 is a no-brainer. I still cannot grasp the fact that gold was sub-300 for as long as it was. I was selling boats and cars and software and acquiring metal in '98 and '99. Everyone else was buying bigger houses and cottages and SUV's and stock and their options, etc., etc. Morons! Oh well .......

So now I move slowly and finally to Sinclair and the 'forgotten' quote.

Sinclair is a funny guy. Yeah he rambles about his paper trades, option this and option that. Good for him. I bet he has lots of toys! Interesting thing is, just like you and I he defines his 'toys'. So get over it. He's is very bullish gold because he sees the financial system falling apart and its going to blow. Many of us feel it's going to be very ugly. Conversely, I think we all agree its not going to be pretty. He has also been on the 'terrorist' rant in the last couple weeks. I know little about Islamic/Muslum culture and mentality so I say there's a 'billion' of them with very different concepts than the 'billion' of us. A 'billion' vs. a billion' in a raging 'conceptual' war is not going to work. Sinclair seems to think about WW3 alot. This whole 'conceptual' mess gets one millimeter uglier each and every day. Sinclair mentions the 'nuc' thing occasionally. Makes you wonder.

So getting back to our acquistion of valuables, a.k.a. the road to wealth. I will sell computers before the end of 1999. I will sell SUV's in 2003. I will sell overvalued homes in 2004. I will buy gold sub-300 and sub-350 and sub-400. I will buy silver sub-5 and 6 bucks. I will not buy bonds yielding 3 and 4% as I anticipate inflation to reach that plateau. My net gain ('real' return) is nada, zilch! I will not buy interest bearing coupons at 4 and 5 and 6% as I see inflation surpassing that level as well. What would be the point especially when debt becomes riskier and riskier by the day. I refuse to buy something that will lose value, is too risky and DOES NOT AND CANNOT KEEP UP WITH INFLATION. Like the man says "... if inflation rises faster than interest rates, then real rates can actually decline although nominal rates are rising."

Holy mackeral! So what does one do if paper assets, although rising in value (chuckle) rise slower than inflation and actually become 'SMALLER'! And what will happen when the all the 'paper pushers' become smaller and smaller and get crowded into a corner? They will panic! There will be floods of it and it will be self-diluting and it will be messy, it will be ugly.

Meanwhile, hard and ever increasing liquid assets will prevail. In 1999 many of us bought gold because we were concerned that Y2K was going to be 'messy'. At the time there was only a few reasons to buy gold. Four years later there are a multitude of good reasons to buy gold. In the next few years $400 gold will be recognized as one of the cheapest things one could have acquired.

The paper mess and the terror mess are front and centre and growing each day. For the life of me I cannot decide which will blow up first.

Have a golden weekend.

misetichGold Bull Express - Phase ll coming up...#1200394/17/04; 08:31:28

Goldilox (04/17/04; 00:59:56MT - msg#: 120036)
Gold Bull Express - Phase ll

1. Central Bankers Printing Machines Continue In Overdrive -

CB's torrid pace (close to over 18%) from a year ago of super liquidity ( Includes US Monetary Base plus Treasuries held in custody for foreigners and international accounts at the Federal Reserve)


2. Lack of Job Creation in US economy

Corporate earnings growth being reported is being fuelled by job cuts, favorable currency conversion, reduced debt servicing costs (low IR) rather than increased revenues

3. Feds will do nothing

Feds have been 'cheerleading' and spreading the gospel of economic growth - supposedly running at a clip of 5% - 1st Qtr - yet IR are being maintained at an "accomodative" stance


The Feds KNOW no REAL jobs are being created - AS INCOME TAX REVENUES provide the proof

4. Fed Stimuli

Since IR have been lowered 11 times and done little in creating jobs
Since tax cuts have been passed to consumers and done little in creating jobs

The Feds are left with little real weapons but to resort to the Bernacke's helicopter dollar spreading formula and/or encourage the Japanese in intervening again

5. Deficits

Ballooning trade deficit in addition to exploding government deficit - to homeland security and war on all fronts funding requirements means continued reliance on foreigners, mainly Japan and China -

6. US $

"Jobless recovery" in the US is in its 4th year and actually, if we eliminate the farce of using Feds hedonics productivity, GDP, CPI, PPI etc. things are WORSE THAN A FEW YEARS AGO as much has been expended just to thread water

7. Geopolitial Events

US aggressive foreing policy are in unchartered waters. Allies have been demeaned, and more enemies being created daily as the US is still in its "destroy" stage instead of "rebuilding" stage - The lack of progress in this transitional period - unexpected - has hampered the "vision thing" and has created more far more problems than anticipated, as the promised expectations have not been delivered in both Palestine and Iraq paninting the US as an unfair arbitrator and imperialist forece.
Retaliatory strikes are to be expected, now and in the future both at home and abroad


All Aboard The Gold Bull Express - Phase ll

Goldilox$400 gold#1200404/17/04; 09:31:30

@ Ned

You said: " In the next few years $400 gold will be recognized as one of the cheapest things one could have acquired."

except. perhaps, $250-300 gold! LOL


GoldiloxGold Bull "express"#1200414/17/04; 09:41:14

@ misetech:

I am with you all the way, for each of the reasons you mentioned, but let us never underestimate the power of:

Gold is "irrelevant".
There is no 'flation.
300,000 jobs were "created"
FIAT is the only true "money".
They only want to "protect" us.
Larry Kudlow is a "real economist".
There is an Xmas bunny.
and blah, blah, blah . . .

in the interim.

I lean toward those who have stated the "easy money" was made in 2003. The race to $500 may more resemble Xtreme Sports compared to the "sprint to $400". Perhaps after $500, the "express" will resume service, and at blinding speeds. A guess only!


CometoseAs pertains to Jim Sinclair and Tim Woods re the Gold market#1200424/17/04; 10:26:13

I think it should be noted that Tim Wood is a Dow Theory analyst and has been applying Dow Theory to the major indices to the dollar , the bond market and Gold......

Jim Sinclair is a specialist and has been in and on this Gold Market and the metals markets for decades .

There is something to say for objectivity in Tim's case and there may also be something to be said for bias being an advantage in Jim's case...IF proprietary analysis techniques are accurate and appropriate to the present circumstances.

I think I will keep them both . I'll let Jim be the angel on my right shoulder and Tim be the angel on my left shoulder

USAGOLD / Centennial Precious Metals, Inc.Only 5 of the completed collections remain!#1200434/17/04; 12:54:24">country collection of gold
Old YellerVouchers?,I prefer delivery notices#1200444/17/04; 13:37:44

So what is wrong with this? Well,,,, our private dollar accounts have been covered because their numbers are increasing. At least if you have done your homework and were a good trader! Truly, there are ever increasing dollars in the world and their increase is helping to reassure dollar holders that their money is still equal to "real things". But, in reality it's the ability of the finite US system to deliver real goods against these ever increasing paper demands for delivery that is in question.

Over time, we have come to think of all of our various dollar substitutes as being easily converted into real things by just calling for delivery. In other words, spending them on something.


This "spending" is the process directly before us that will default the dollar through inflation. This is how a contract system, like our dollar currency begins to fail. Everyone, through trading or just plain old interest on CDs has built up an ever larger holding of "paper delivery notices" in the form of dollar credits. Like my example above, these "paper SUVs" have been inflated even as the ability to supply real goods produced in the US, has stayed the same. In fact, "THE PHYSICAL GOODS" that must be legally delivered against these "dollar legal tender credits" cannot come anywhere close to covering the (fiat) contracts written!

In the days ahead, we will see it as price inflation as Physical goods cannot be delivered against all the outstanding currency calls in the consumer marketplace. In many cases, it's the holders of these "paper SUV" contracts (what we call dollars) that will see their savings value tumble as the underlying physical goods soars in price.

So, this is the classical price inflation that results after a long expansion of a fiat currency. From the beginning the currency is seen as a contract for the delivery of goods sometime in the future. We save it (fiat) instead of spending it because it's convent and logical. Yet, the more that people, and in general the international marketplace relies on this method of holding their goods the more the officials expand the contracts (fiat currency) as a method of creating fictional wealth. This expanded currency is used to buy services, goods and commodities, even oil! But it's timeline has a beginning and an end. Today, we are at the dollar's end!


So do we see any comparison to "paper gold" in the above? You bet we do! Like hand in glove "gold the money" travels the exact same route "dollars the fiat" does in our modern banking system.

For every person that thinks their "paper dollar" holdings can be spent for goods and receive those goods (call for delivery) at near today's price,,,,,,,,,, there are almost as many "paper gold holders" that think the world system will "deliver gold" in the price and amounts they have contracted for. Folks,,,,,, in today's world that's a lot of gold owners!

Yet, the holders of "paper gold" will fair little better than the holders of "paper dollars" in the coming super inflation. Both will lag the price rises of physical goods and physical gold as the inability of the finite supply system to deliver comes into play. One will end up in grocery markets trying to spend those paper dollar contracts and beat rising prices, while the other ends up in court, waiting for the delivery of physical gold that simply does not exist.


From FOA's gold trail,unfortunately,I think FOA's vaunted ECB "free gold" has been put off indefinitely,due to the euro banks selling an awful lot of that physical gold that simply does not exist.Events of the past two weeks only prove to confirm this,IMO.

misetichGold Bull Express - Phase ll coming up...Part Deux#1200454/17/04; 13:45:04

Gold Bull Express - Phase ll - The Gold Equation

1. Demand exceeds supply

Annual demand exceeds supply - reportedly in excess of 600 tons

Physical demand in India has picked up as the Rupee has gained vs US $ and geopolitical events plus the bear market in US $ have spurred investment demand

2. Gold Hedging/Interest Rates

The unanticipated events re: trillions of perceived wealth evaporated with the US stock market bust, added to the desire of indebted countries such as the US to lower interest payments on their debt, have brought us the current low IR envirnonment from across seas and oceans

The low IR environment and subsequent start of the Gold Bull - phase 1 - put tremendous pressure on the gold shorts-and megahedgers

2004 Presidential election coupled with the ongoing jobless recovery - puts the Feds and Easy Al in a quaqmiere - since easy money has flown to commodities bringing undesirable results

Will Easy Al increase IR? - and if he does, will gold mining companies commence to hedge swinging to the supply side of thing?

Likely not in both counts! Imagine Bush's reaction - the Housing Bubble burst not to mention the Bond Bubble Burst! if IR were to rise significantly. Odds favor Greenspan to timidly increase IR in September by 1/4 point!

Thus we can expect mining companies to put a FLOOR on the price of gold as they are eagerly awaiting to cover their exposure -

3. Central Banks and lack of ammunition

With demand exceeding supply and the leasing game over, central bank are forced are committed to sales to a maximum of 500 tons annually - Over 80% of Central Bank gold is owned by the signatorials to the agreement, plus the US

Other CB's such as Russia and China have been buying and other Central Banks such as Australia, Canada, Argentina etc have waived goodbye to their holdings in past years and it has become harder and harder for the Gold Pool Manipulators to find it

They even forced the Swiss and over 1200 tons of theirs has vanished - poof!

4. Presidential Election

The mudslinging and fun has not yet begun....some real fireworks ahead - putting additional pressure on Snow, Greenspan etc.


The Gold Bull Express - Part ll is coming up - Part 1 brought us from $250 to today's $400 US -

The Gold Bull Express - Part ll starts at $400 - All Aboard!

Old YellerORO flashback#1200464/17/04; 13:49:40

In Donald Luskin's observation of Greenspan following the Gibson's paradox gold price dollar interest rate relationship from 1987 through 1996,there is a problem in that paper gold was being inflated by EU central banks lending out gold at a subsidized interest rate. Thus gold prices were being pushed lower through dilution by paper substitutes trading at par.

Luskin is making a further error beyond that of missing the obvious manipulation of gold interest rates by ECB members (and therefore the manipulation of gold prices) by missing the point of the Gibson style targeting being effective only when the central bank doing the targeting has the lowest interest rate on its currency, and is not being undercut by competitors. While the Fed was practicing Gibson targeting, the EU central banks were undercutting the gold price, and in 1995 the BOJ started the 0 interest rate policy that made it possible for Japanese banks to offer dollar short rates lower than those of the US banks and inflate the dollar credit markets.

The BOJ dictated interest rate on JGBs made it possible for Japanese banks to lend in fully yen-hedged dollars below the Fed's short rates, thus creating a carry trade which caused credit bubbles around the world. With both the BOJ and the EU central banks undercutting the variables of Gibson targeting, the Fed remained without guide, resulting in reliance on inflation and asset volume/price targeting, and careful tracking of industrial activity all three of which react far more slowly than the gold price.

The one missing aspect is that of the demand for gold bullion. Since gold is not necessarily THE deliverable but only the denominator of a derivatives contract, physical demand for the purpose of debt repayment the main component of demand for any money in a modern economy - does not increase with higher outstanding gold denominated paper. It only increases when the gold liabilities are suspected of being low quality, and thus, higher physical gold demand becomes a bank-run or liquidity phenomenon induced by gold paper issuer s weak financial condition, or the result of growing industrial gold demand leading to attempts to obtain actual gold deliveries from the derivatives, or (and the more likely event) industrial demand leads to fiat currency cash obtained from derivative contracts being used to purchase physical gold.

The most significantly sensitive portion of the gold banking system to swings in gold liquidity remains the unallocated gold accounts that have demand deposit characteristics and where the banker may not have learned what a sufficient reserve ratio would be.

misetichCredit Bubble Bulletin, by Doug Noland - Tightening Lite?#1200474/17/04; 15:13:03

Excerpts from Doug's terrific work

Greenspan - See No Evil - Hear No Evil - Inflation or Housing Bubble

"Lumber prices are skyrocketing this spring on unusually strong demand from home builders ......Framing lumber composite prices are up on the order of 35% from a year ago, while prices for some engineered products have essentially tripled, according to the latest data from Random Lengths, an industry publication"


April 15 – Bloomberg (Simon Casey): "Aluminum rose to an eight-year high

April 13 – Los Angles Times (Roger Vincent and Don Lee): "Home values in Los Angeles County posted the biggest year-over-year increase in at least 15 years in March as frenetic buying activity pushed the median sale price up 29%, to a record $375,000, according to data released Monday.

April 13 – San Diego Union-Tribune (Roger M. Showley): "San Diego County's housing market, far from settling down, heated up last month to reach a record median price of $424,000, up nearly 17 percent from the year-ago figure,
April 14 – Bloomberg (Kathleen M. Howley): "Manhattan apartment prices surged to almost $1 million during the first quarter as the city emerged from a recession
April 13 – Baltimore Sun (Daniel Taylor): "The average sale price of homes in the Baltimore area jumped almost 20 percent last month, the highest year-over-year price increase in at least five years
But how about the dollar? Higher rates would surely help support our vulnerable currency. Yet it is my view that what really weighs on the dollar's intermediate and long-term prospects is the massive inflation of non-productive dollar claims and the attendant liquidity that flows incessantly abroad. And I am essentially to the point where I will assume that nothing short of financial crisis will interrupt this inflation.

Doug's concludes the Fed will "tighten light" - and given the political scenarios mentioned in previous posts - the likelyhood of the Feds falling WAY BEHIND THE CURVE is a certainty

The bottom line are JOBS! JOBS ! JOBS!

The Feds will do little unless Job Creation has taken hold!!

Corporate business mindset is still fragile and cautios and are not ramping up investment - see Nokia, IBM

The housing and auto industry have been carrying the US economy load - sudden higher interest rates will abort those industries

A low IR environment for the near future is a certainty globally - except China

The STORM which has been gatherin steam will only be helped in the next few months of Feds inaction - propelling it beyond expecations -

Wild flactuations in commodites just as experienced in the last week in gold and silver will be a common event - both up and down - but the TREND IS UP!

All Aboard The Gold Express- Part ll

CoBra(too)How Much Longer ... ?#1200484/17/04; 16:13:04

The Dollar Reserve System is drawing neigh to a debacle. As it seems most of the arrows in the admin and FED's quiver have been wasted.

The effect is negligent - as was to be suspected. Nevertheless, the game is apt to go on. After all it's an election year.

Even while major players are dropping by the wayside (NMR), leaving huge gaps in supposed sturdy counterparty risks - the game has to go on. After all, the FED's master dompteur of financial tricks stressed the derivative pyramid is a blessing. A blessing in ameliorationg the market risk of few to the risk of the many.

... Just wondering how many it would take to ameliorate the risk of JPM - alone. After all, JPM's derivative position is reported to have reached the astronomical figure of 37 Trillion -just shy of the annual GDP of the entire globe -in the best of times.

OK, and that may be the real T. Rex, we think, and forget the few T's the Fannies and Freddies have raked up in the aftermath of Easy Al's spending incentive for the J6P; And we even didn't bring up the cost of WAT, Homeland Security and other real wars and "friendly" occupations of about 140 foreign countries ... Jefferson will have a fit - ... nor the l.t. obligations to the US citizens expecting some reward from their contributions of medicare and pension plans, which have been spent and only represent more IOU's.
(Yes, social wellfare EU has similar problems! Mostly because of demographics, though the kitty was not raided totally; Only partially by beaucrats ...).

In the end, and we're getting close, the derivative pyramid, started as legitimate hedging will blow the system to smithereens - as it seems it is the only glue holding it together another day.

What a system, as the glue is taking over reality?!

PS: MK - I'm in the midst of moving. Will have a new e-mail and all else, hopefully from May 1st. on. The guy's name authoring ABX's Derivatives is Dietmar S. and a very good friend.

Take care for now -

a nation of one.#1200494/17/04; 16:24:02

I would just like to say that gold is on its way down to $102.26 per ounce before Tuesday morning, not one cent more or less, and that it will stay there. The dollar will recover completely, increasing in value by 334%, and that it will reach this point no later than 10:31 A.M. on June 6. The people who are running our government are really very responsible, smarter than you and me, morally straight, and have been right all along. Greenspan has got the nation's interests at heart. Saddam's WMD will be found in Bagdad, and not planted there by the US. Bonds will improve. Stocks will return to their normal ever-upward climb before next week, and will continue, perpetually, until the end of time. Not so much as one single stock holder will be bilked during the coming year. Our tax money will be spent as we would like it to be. The Iraqis will be given their sovereignty by US forces at precisely the time that Mr. Bush says that they will, democracy will take root there, and it will yield miraculous branches, leaves, flowers and fruit to this date unimagined. Next January 21st the man sworn into the office of President will be someone who has presently not gotten up enough nerve to announce his candidacy, but he will be very good, and will go down in history for reducing spending -at gunpoint- by arresting Congress for malfeasance, firing the Supreme Court, and balancing the budget in three days by eliminating all government giveaway programs. He will pay the nation's budget out of his own pocket, as Julius Caesar did in Ancient Rome. And now that I am through writing this, I am going to get into my personal space ship and enjoy a delicious dinner of Saturnian gourmet food on the planet Jupiter.
TopazOl Yeller, G'lox, All.#1200504/17/04; 16:38:39

What a pleasure it is to read this board when posters opt to put forward their OWN thoughts rather than simply regurgitating someone elses .. and adding a supportive bi-line.
Good post Squire. As far as the Euro goes, they(ECB)don't have much say when it comes to "FreeGold". All they can do is provide a compatable environment for same when the time comes...which I believe they're doing. You see, as with most things economic it's US who decide. THEY (CB'S) are at OUR mercy, not the other way 'round. You can liken them to a Shepherd who, in most part has control of the Flock but if the Sheep get spooked, theres little the Shepherd can do to prevent chaos. If such was not the case, Mises tome might well have been entitled "C-Ber's Action".

Lets try ANOTHER analogy relating to Money Supply and 'flation:- On this economic "river-of-life" somewhat of a Logjam has occurred due in most part to the productivity miracle thats occurred these last 20 odd Yr's. Yes the Fed HAS been adding Logs upstream as if theres no Tomorrow (there isn't!)... but the Logs aren't able to flow downstream as once they freely did - (declining Job ops, inability or unwillingness to press wage increases etc)- so we (the creators of inflation) are in "shock" and aren't able to move the reduced number of downstream Logs about as freely as required ...there's simply NOT ENOUGH Logs!
Japan provides a small insight. Despite attempting every and all Fiscal/Monetary stimuli these last 10Yr's the ONE factor that appears to be resurrecting the Japanese economy is the inherent opinion which took hold 2Yr's ago that in 2Yr's things would turn around ... and Voila! it seems to be happening. Now, did this notion happen by accident or design?
The answer may shed light on what the Fed is/has been doing in relation to the USD.

Keep connecting the dots Guys!

GoldiloxSaturnian delights#1200514/17/04; 17:19:50


Sounds good. Save me a "doggy bag".

GoldiloxDerivatives game#1200524/17/04; 17:24:50


Watching the WorldPoker Tour as I read your post. DMR's move is so like watching a top poker player fold with an A-10 offsuit. Good, but not good enough!

Golden Lionhearta nation of one - msg 120049#1200534/17/04; 17:28:27

Great post and I agree with everything except the price of gold which I will put at $101.10. Skip Jupiter, the food is overpriced and usually lukewarm.
Dollar Bill.,.#1200544/17/04; 21:49:58

Glox, perhaps your right about the "legal" issue.
This link I figured you would provide, but since you didnt, here it is. There are many construction projects going on as they build that one world money model. I keep hearing more and more "oh we dont want to go protectionist" talk.
The media is so controlled, but on politics, I dont think it is the neocons that control that side. With exceptions.
I read that despite all the prices of many things going up, living costs to us going up, it is actually "disinflationary".
Why? because our wages are not keeping up. Which means the interest rates will not go up because it actually is not an inflationary environment. Seems wrong, but True inflation, driven by wages, is not what is happening at root, so it is not safe to treat this with Interest Rate solutions.
People here know this of course from other angles.

GoldiloxPructivity - the Real McCoy?#1200554/17/04; 23:54:54


The spectacular surge in labor productivity over the past two years may now be slowing as job growth improves. That 4.8% annualized upswing in output per hour was the largest since 1962. Was it too good to be true? The answer matters, and not just for economic historians: If the data have prompted investors and policymakers to overestimate long-term productivity growth and correspondingly to underestimate the trend in unit labor costs, then a booming economy may be narrowing margins of economic slack and promoting inflation more quickly than previously thought.

In my view, recent productivity data do substantially overstate the trend, but not because the data are seriously flawed. Rather, I believe that much of the productivity improvement in the past two years was cyclical. Moreover, while I think that trend productivity growth is 2½-3%, and that the "output gap" is correspondingly wide, that's no guarantee that inflation will stay tame. In my opinion, that's because the change in slack, not just the level, matters for inflation's direction. To be sure, such a favorable productivity trend implies that up to 4% real growth and low inflation can coexist over time. Courtesy of growth above that trend, however, rising operating rates and a narrower output gap have begun to boost inflation, and I believe the budding acceleration in prices is the real McCoy.


Skepticism brewing even at MS?

GoldiloxPRODUCTIVITY!#1200564/17/04; 23:56:30

Just got off the bike on a cold night, so the fingers are numb, but I kinda like how it came out!
BelgianTowncrier/Gandalf#1200574/18/04; 00:07:53

No Sirs, wasn't at the Antwerp Sportpalace...but doing some gardening with the daughter and enjoying some quiet pond watching,... where the new ghost-koi, co-exists with the old gold-fish ! After a sunny day's physical work, comes the evening for restgiving reflexion...

I see (maybe only me ) the degree of Gold-confusion (or is it frustration) sharply rising in Gold watching land and on CPM's forum as well !

Reason : Gols is doing NOTHING and that's certainly NOT in line with the absolute majority's of goldbugs' "expectations". Not seeing "IT" happening, makes many (unconvited) discard all precious thoughts that were building, so far.

Very understandable, as the ongoing depolitization-process (gold's politico manipulation) of Gold is indeed an extremely difficult matter to grasp, fully.

If POG were to explode on monday, all confusion would vanish within a fraction of a second ! And all old and new theories would automatically be confirmed as correct, simply because the POG-rise would be answering, satisfactory, the massively builded (high) expectations.

Last week, a very angrily exited Bob Pisani, shouted that he wanted to have those Oil and Gold ETFs, ASAP ! Strange !?
Yep, the paper-gold business is "DRYING" ! In other words, becomes extremely difficult to further "INFLATE" the paper-gold as the decades's old containment tool. Take away, the profitability of the paper-gold,(Red-Shields)...and you have become paper " dryer " (Sarkozy-?)! Worse,...organise more gold-paper "loses" and you add drying heat. Think, where that 6$-thing comes from and what is the meaning of this ridicule maneuvering !?

We simply don't want to (cannot) admit that we are being "paperized" and keep our naive trust in the "market" myths ! And the mentioning of the active existance of a financial brotherhood is labeled as an outcry of stupid frustration. Think it isn't !?

The above is not happening in Gold, alone. It is a general trend that has arrived in its culminative phase. We are being fooled, AGAIN, on a massive scale and with an increasing degree of infantility. Watch the news-building evolve and conclude for yourself at what stage of deception we are, already...and AGAIN ! Ghost koi,...and Gold-fish...
in Belgian's garden pond.

WHO is really going into dept on what is "really" happening (changing) with the oil-price !? A: NOBODY, nada.
Accodomotive-oil, is "drying" up, dear forumers ! DRYING UP,...and NOT for any of the reasons that are publicly mentionned. Ohhhhh...Noooooooo. No OBL-tapes on this !

And even old yeller has lost his illusion that the maturing euro-monetary-system has been concepted, to "allow" the POG to go UP !? Smile Yeller.
How paradoxal, indeed,...a Euroland that "openly" shows that it is supporting the dollar-system (humhum), with the strong, unequivocal "perceptive" goldsales !!!-??? I say, how shamingly, hypocritically, shrewed.

Watch how Russia and China, denouced the offered (???) OBL-truce, together with Euroland ! Big games are played.
Games, about "what" and between "who" !? No wonder, general frustration and Gold (+ other) irritations are building.

And still, nobody wishes (dares) to mention (consider) that putting the ME (and other regions) into turmoil, IS oil-(&Co) related !!! Storm and smash the populaces with daily atrocities, and nobody finds the time to ask "WHY" ! And ages old convenient modus operandi. Many goldbugs are marching into this old misleading (deceaving) trap.

The existing and growing evidence of the real stories, aren't appealing and constantly mis-interpreted, because the main evidence of it all, POG EXPLOSION, is missing !

Why does Sinclair, keeps on hammering that $POG goes to $480 (+ 20%) whilst Yahoo has....
Wake up, fellow Goldphiles !!! And,...stick to the observation of the ongoing "divorce" of two major allies, with their respective currency-systems and new alliance building !!! Get in front of the evolving "real" NEW world (smile Rummy)!

Keep the world away from the euro (system) with all the means at your disposal. The euro is NOT going to derail he dollar train...the dollar will be helped to collapse under its own rising weight. Yep, a very difficult process to see, to accept and evidence, for the general public of both building/destroying blocks, involved. Extremely difficult to see it in the Gold arena, less difficult to see it in geopolitical events.

In a cosmos of dots, one often connects those dots that are appealing as to build one's preconceived picture. I'm trying (!) not to do so, as to not fool myself on top of being fooled by "them". Am a simple and small, local Antwerp-chauvinist and not an euro-fanatic. Euroland had two Big (WW) lessons,...and that is explaining the present modus operandi (attitude) towards the complexity of the ongoing.

Nice WE to all.

masBelgian, you mean like this?#1200584/18/04; 02:44:23

From "The Privateer".

The BIG Lie - On Two Fronts:
Think back to early November 2002. A month earlier, the Dow had plummeted to lows below 7300. On
the foreign "policy" front, the Bush Administration was well into the series of lies that led up to the
ultimate invasion of Iraq in early 2003. Yes, the Bush Administration had been planning to attack Iraq
long before 9/11, but by November 2002, they knew they couldn't wait much longer because of the
necessity for war as a distraction from the horrible domestic financial mess they had created.
On the financial front, having just lowered the Fed Funds rate by 0.50% to 1.25% on November 6, 2002,
the Fed was beginning to worry about the consequences of a perception dawning that they were running
out of stimulatory ammunition as their rates approached zero. Out trotted Mr Ben Bernanke of the Fed
with a speech on November 21, 2002 titled: "Deflation - making sure it doesn't happen here".
Just as the Bush Administration was trotting out the lies on the "policy" front, Mr Bernanke and the Fed
began to trot out the lies on the financial front. Had Mr Bernanke warned of the growing possibility of
deflation due to a debt collapse and the consequent hollowing out of one side of the banks’ "balance
sheets" as their "assets" (their loans outstanding) evaporated, he would have been speaking the truth. But
Mr Bernanke didn't do that. He was very specific. He defined deflation in his speech as: "... a general
decline in prices, with emphasis on the word ‘general’".
Mr Bernanke's message was that the Fed stood ready to do whatever was necessary, up to and including
cutting interest rates to zero and, if that didn't work, monetising Treasury debt and literally printing cash
Dollars - hence the phrase "Bernanke helicopter money" which has since come into vogue - to prevent
falling prices in the US.
At the time, government (especially State government) costs and charges were already rising in the US.
But consumer prices were not. Mr Bernanke and the rest of his Fed colleagues knew full well that the
only reason that consumer prices were not rising, despite the fact that the Dollar had been falling for
almost a year (remember, we are talking about November 2002 here) was the fact that the Asians were
buying up US debt paper as fast as it was being produced. It was in mid/late 2002 when the Japanese
began their greatly accelerated orgy of selling Yen for Dollars.
Mr Bernanke used the consternation in US financial markets to sell a BIG financial lie. He stated in
almost as many words that the only thing standing between the US and financial chaos was the Fed's
ability to hold the money supply taps wide open and, if necessary, break them right off the pipes and let
the flow increase still further. He told the US in general and Wall Street in particular that what was in
fact the CAUSE of the financial instability - the Fed's money and credit creation - was the only CURE for
the situation. He promised to apply the cure up to any level the Fed deemed "necessary".
Mr Bernanke, Mr Greenspan and the Fed have, of course, been true to that promise. They got away with
it for a year, thanks in part to the ever increasing buying of Treasury debt paper by Japan, China and Asia
and in part by the "successful" war in Iraq. In 2003, the only "anomalies" in their prescription were a
further fall in the US Dollar and a Gold price which rose to more than $US 400 by year's end.
This year, the whole mendacious edifice is becoming unstuck. The Bush Administration's claim that they
are "liberating" Iraq has become an odious farce, a fact which has now become clear to anyone who
examines what is REALLY going on in the most cursory fashion. The Fed's claim that the "health" of
the US economy and markets depends on their "anti-deflationary" efforts is coming unstuck as prices, all
prices, even consumer prices, rise inexorably. From being vigilant to prevent "deflation", no matter how
much money they had to pump into the system, the Fed has reverted to being "patient" about raising a
1.0% interest rate which has been in place for nearly a year - since June 2003. From being ready to
literally drop fresh new "money" out of helicopters onto the streets "if required", the Fed is now straining
to reassure the markets that they are "some distance" from RAISING rates. The lie is being exposed.

GeneMas#1200594/18/04; 07:20:31

The terrible financial mess you mentioned was created by 8 years of Clinton and 6 years of the Ruben/Summers "strong dollar policy", which made US products uncompetitive in world markets, forcing US companies to move o'seas, and creating much unemployment here at home.
If you can't see this, you are not a very good observer of what goes on around you.

Gandalf the WhiteGOLDFISH are sooooo pretty !#1200604/18/04; 10:31:42

Belgian (4/18/04; 00:07:53MT - msg#: 120057)
THANK YOU, sooooo much, Sir Belgian !
I LOVE IT when you get a chance to sit and think.
You see and say things sooooo well !!

Great Albino BatMAJORITY OPINION....#1200614/18/04; 10:43:49

The GAB read this opinion on a neighboring site:

"The $POG accurately and in 'real time' tells us the current value of the $.
"All this 'inflation adjusted $$' speculation is pure nonsense.
"And... as the economy continues to grow...... gold will trend down.
"Just keep on watching...."

This is undoubtedly the opinion of the vast majority of individuals who could buy physical gold, but do not do so.

The majority is ALWAYS wrong.

Back up the truck, and BUY. The majority is doing us a great favor! BUY before they wake up.


BelgianMas/Gene#1200624/18/04; 10:47:02

It is not this or that particular person(s) or group(s) that should be fingerpointed as the cuprit(s). It is the system itself and its increasing mis-management over time.

And as soon as the financial part of the total economic happening, goes bezerk, one should know that the time of no return has come. At the same moment, there is that big outcry for the so called "structural reforms", wich are impossible. Then the whole "system" breaks up and the alternative comes in.

Financial/monetary hysteria/mania instead of an harmonious economy. Nothing, on a global scale, seem to work out positively anymore and more repetitive, drastic/dramatic actions, try desperately to curb the installing general pessimism. A self fulfilling process.

This subconsciously broader growing pessimism is countered by a laughable kind of infantile euphoria.

All of a sudden, seemingly for no particular reason, a critical mass of people starts to realize that lala-land isn't as lala as they believed it to be ! That's WHY they, the people, must be kept as far away from GOLD as possible. This is exactly what happened for the past 3 decades, already. This is a systemic, organizational behavior, executed by the succesive policy "makers". A growing cascade of general mis-management for the obvious (political) reasons.

The world *is* changing and old priviledges get reshuffled.
Unemployment here, means employment somewhere else. Low or high IRs do change very little on contraction here and expansion overthere. Basta with the decades' of low energy and commodity prices... Currencies come and go...Gold was out and comes back in...etc...

"Changes" always are to somebody's advantage and another one's disadvantage. Some do have a lot of difficulties with changes, others do find this very evident.

Maybe the above generalities are boring and of all times,...maybe !? But I'm of the opinion that at present, things are detoriating, in a much different way than ever before, during the past 30 years. This, whilst I'm living reasonably comfortable and have no reason for complaining.

We had periods of helicopter confetti, before. Repeat, periods ! This time, the confetti helicopter will keep on flying up until nobody picks up the parachuted confetti anymore. This happened elsewhere and is of all times. The helicopter has no name (is unimportant) but the confetti does... !

GoldiloxThis Financial Mess is NOT new!#1200634/18/04; 10:52:20

@ Gene:

Not to exonerate Wild Bill in any way, but step back a couple more steps and look at the bigger picture.

Which administration in the last century wasn't spending MUCH MUCH more than they took in to finance some "wild-ass(inine) adventures" somewhere else?

Look at the parabola (soon to be hyperbolic) of US debt. It didn't begin in 1992, it began in 1913. . . Wilson, WWI, FED, IRS, etc.

Check out the forum archives for the longer-term story of gold and oil - especially ANOTHER and FOA. Then hop over to Smithy's place at the above link for a more in-depth analysis. Her new site is still under construction, so shake off the dust and click the link to her old site and treat yourself to some fine MP3 discussions. The text is also there so you can read along with the audio.

Put on a pot of coffee, as the material is deep but well worth the trek.

bugsCleaning up the mines..#1200644/18/04; 12:52:34

For a Sunday morning..

Supposedly, using regular plants, this happy fellow cleans up the environmental contaminants of a mine, and extracts enough leftover gold in the process to pay for the cost of cleanup. Pretty neat.

a nation of onehappily blowing bubbles#1200654/18/04; 13:00:14

Excuse me while I speak in concrete terms.

Say a thousand people live in a town, and each owns his own home. Normally, if they all try to sell their homes at the same time, there would not be enough buyers to buy them.

But suppose the town is becoming more desirable to live in. Suppose that salaries are going up. More people are wanting to buy houses in the town, and they are willing and able to spend more for them. Every time a house is sold, the seller gets more money than he paid for it. So all of the other home owners -the ones who are not selling- also imagine a higher price for their own homes.

We need to realize however, that these homes that are not for sale are not actually being sold, and that, therefore, the imagined price is not real. It is imagined. The only houses whose prices have really gone up are those that have actually sold at increased prices. The rest have not sold, and there has been no increase in price for these. Linguistically, this is what is correct. The increase in price is only a potential and may not be realizable. To actualize it, everyone would have to sell, and they can't do that. If more people offer their house for sale, than there are people willing to buy them, prices may come down until the amount of money being asked agrees with the amount of money willing to buy them. But such terminology is misleading. It is also tenuous, uncertain, variable, and ambiguous. As Yoggi Berra says: "In theory, there is no difference between theory and practice, but in practice, there is." Only the market itself is an adequate description of the forces inherent within it. Further, some who offer their homes at a given price will withdraw it if they can't get that price for it. Markets transform in numerous ways. Homes are not tulips. They have real value. They satisfy people's needs, with respect to some tangible particulars. A man may put his home on the market, but it may be more valuable for him to live in it, than any amount of money offered for it. It would be incorrect, therefore, to say of his house, that it has the same value -or even the same market price- an identical house may have in terms of a sale that actually takes place.

My neighborhood is an interesting example of several aspects of this phenomenon. About a thousand people live there. New buyers are coming in all the time, and their numbers are increasing. Over the past several years the prices of these houses have gone way up. In the past thirty years, the so-called market value of my home has increased by 550%. It's not a rich house. And it's not a poor house either. My point is this. Suddenly, houses are becoming much more costly to build. Nobody in my neighborhood wants to move away. Gasoline will be $3.00 a gallon sooner or later, war or no war. It's going to cost $60.00 to fill the tank. It is not going to make sense to drive twenty miles, every day, just to work at a job, and then drive back home, like I did for many years. You would have to fill the tank at least thirty or forty times a year, and that is becoming less and less justifiable. $2,500.00, a year, just for gasoline. To justify that, you need a job that grosses $50,000 annually, and with that salary you can buy my house, which is a closer to your job. So a lot of people want to move into this place.

But my home is not a commodity. It's a home. It is an abode wherein I supposedly abide: a domicile, my residence, my castle, a palace, where I have my entire headquarters and hindquarters and everything else.

One reason I originally bought the place and have held onto it, is because I understood that these types of dynamics tend to occur, and as time went on, it became clearer and clearer what their nature was going to be. So did other people, I assume, realize these same things. If you wanted to be really clever in your explanation you could say that these home buyers -and I- in effect anticipated our presently unfolding circumstance and took action to place ourselves into an alleviating position relative to it, thirty years beforehand. That is what really happened. Home prices have been going up, but now building costs are increasing and will support it, and you aren't going to be able to build one of these houses for less than one that already exists. Moreover, nobody is selling. So nothing is going to pop. In this neighborhood, if enough money isn't offered, no houses will be available. That is not a popped bubble. It would only be a burst bubble if you could go in and buy up all of the houses for next to nothing. That is not likely to happen in this neighborhood.

So I view some of the talk about a bubble in the housing market as being linguistically in error. What is really being referred to is the very substantial debt that people have taken out of their homes for the purchase and enjoyment of luxuries. Inflation will lower the value of the money borrowed and will make repaying the loans easier, for those who can come up with the dollars, and inflation will help them do this. After all, that's one reason we bought our houses. Okay - if they can't repay those loans- something could start smelling bad. Banks could seize mortgaged homes and try to sell them, and that might cause problems. But that wouldn't be a bubble, just plunder. To say therefore, that housing prices -generally- constitute a bubble that is going to burst, doesn't fit, it's incorrect, it jibeth not. People who can keep their homes aren't going to be hurt by low home prices. In fact they could benefit, if taxes are lowered. I didn't buy my home to sell it, but to live in it. Therefore, really, it's immaterial what the man next door sells his house for, except in terms of taxation and imagination.

During inflation, houses are going to become worth less and less their weight in gold, which means that an ounce of gold is going to buy more and more of a house.

When I think of a market bubble, what that means to me is prices are very very high without a valid reason, but rather because people have gotten all sweaty and spendy on account of their overfrenzied and ecstatic, imagined estimation, and then suddenly -POP!- everybody wakes up, prices are nothing, and you can buy as many as you want for a penny, but nobody is buying. I don't think most people are going to walk away from a house that they own and live in, just because all of a sudden they can't sell it for a lot of money. One of three things seems likely to happen. One, there would no buyers at high prices, and people who own their own homes would have to continue to live in them. Two, there would be extremely few buyers, and at extremely low prices, but almost nobody would sell. Three, housing prices were increasing due to a pricing bubble but now are becoming more supported by inflation in the cost of housing construction, along with the increased financial means of potential buyers, and so the higher prices -which used to be thought of as excessive- are going to become recognized as cheap. And all of the people who went deeply into debt to buy -for $300,000- a modest two-story house, will be inundated with a surplus of dollars in the coming hyperinflation, become able to pay off the debt easily for that reason, and the prices of their homes will multiply by tens or twenties or more, and there will no problem selling them, somewhere down the creek, for more than they paid for them.

Not like tulips at all.

(You heard it here first.)

USAGOLD / Centennial Precious Metals, Inc.Diversify your portfolio and enjoy peace of mind, 24/seven.#1200664/18/04; 13:36:43">gold -- a global calling card
Jacob MarleyWhat is wrong with this picture?#1200674/18/04; 13:44:28

TC linked us to an OsterDowJones wire Friday that states in its monotonous and methodical way the usual humdrum of a financial news wire. The words roll off with an ease that comes from anticipating the mind numbing repetition of words and phrases, as the day's events are daily explained for us in a nutshell.

"...the market is potentially primed for a rebound should the U.S. dollar continue to lose recently-made ground and geopolitical tensions remain high. However, a spate of consolidation and base-building is deemed on the agenda beforehand so that physical demand can build up at the lower levels and speculator appetite for the metal can return following this week's shake-out."

The words on the wire come and go flooding us with information, saying absolutely nothing, as people go on about satisfying themselves with knowing about everything, but just as equally learning nothing, either. So, what is here? Let's take a 101 primer overview of the major players in this environment. Not who they are by name, but what they are by composition.

We have firstly and foremost a market comprised of contracts to buy and sell gold. This market exists chiefly as a tool of gold business operations to perform the several and varied business reasons for buying and selling gold on contract. Summarily, this can be referred to as hedging. There is hedging to smooth and stabilize (and sometimes reduce) cash flow requirements in the various transactions between each level in the food chain: miner to refiner to fabricator to wholesaler to retailer (or any permutation of this). This can simply be some strategy of forward selling either in a futures contract, or on option, or combinations of the two. Some employ[ed] strategies more financial in nature, where they may write options on the other side, and use the funds to pay for the overhead of buying contracts, or gamble a bit, by buying speculative contracts with the proceeds of contracts they had written. This behavior has snake-bitten more than one miner in the past. And concurrent to all this are the OTC proprietary contracts that, while not exchange traded, will have influence upon the exchange, as market participants price their perceptions of these obscure but very consequential deals into the mix.

There is also hedging for institutional investors to disperse or mitigate risk against some asset(s) or asset class(es), for which the institution has developed a strategy that uses the gold price to accomplish those ends. Then there are hedge funds. Hedging and the activity of hedge funds are not the same things. One can hedge and not be a "hedge fund." And while hedge funds "hedge," they do so differently, and for different reasons.

Hedge funds came into existence (largely on the trailblazing of LTCM) to benefit from an instrument's volatility, regardless of the direction it moved. The game is effectively to borrow tons of money for as little as possible, and then using more math than is required to balance your checkbook, be continuously buying and selling simultaneously short and long around the position, making only pennies on the movement usually, but multiplied times gazillions of borrowed funds, is magnified into handsome returns. And they don't care which way the instrument goes.

There are also sophisticated players, who also don't really care which way the object of their investment moves, but have developed strategies that benefit by a predictive arbitraging of the instrument against something else they feel confident in forecasting. For simple illustration, the convergence trade is basic in this arsenal. What exactly is a "convergence" trade? The classic example of the convergence trade is that of the on-the-run/off-the-run US Treasuries long ago. Here, fundamentally identical issues, the current 30 year issuance (remember those?), and the one of 6 months prior, were really no different at all in terms of risk, hence they should cost basically the same. But the trade volume for the current (on-the-run) was always much higher, as all the pension funds, etc., would be bidding for them. The 6-mos. old (off-the-run) issues were mostly portfolio-ized, and seldom traded again. The difference in demand put a premium on the current issuance, which smart folks realized could predictably be bet like the sun rising in the east to lose that premium after issue, and quickly approach the price of the off-the-run. Hence, the convergence between the two could be arbitraged. The money is made on the miniscule amount of basis points that it would converge, multiplied times gazillions of borrowed dollars. What is the point of this digression? To illustrate that arbitrage traders also don't really care in principal about a specific directional move in asset prices. Instead they are concerned with their movment relative to the arbitraging instruments -- be it up or down.

So, this is the composition of the majority of the market we are talking about. When you have a newswire statement that states that one of the actions that must occur before the metal begins to rise again, is for "speculator appetite to return," and to have this kind of commentary scroll past us as mindlessly as the news ticker blah-blah on TV, shows us where the market is in terms of its own timeline. Looking at this statement from the other side of the coin indicates that WITHOUT speculator interest being renewed, the market is more or less finding equilibrium at this level. I.e., the perceptions of the majority of THIS market's participants -- those described above -- and FOR WHOM these markets exist in the first place -- are content with the PRICE of gold being opined and settled about where it is -- today -- .

Remember, these participants are not mostly concerned with gold's price rise -- even producers -- in terms of THIS market. As a gold producer, they are obviously happy to see a widening gap between their costs and the price they can sell, but in terms of THIS market and its function -- they only want their contracts to PERFORM their function -- i.e., to manage risk or cash flow for the term of the contract. In that sense, if the miner seems to be contradictory for being on the one hand for rising prices, but on the other hand, doesn't want to have his forward positions go under, it really is not.

You might say that this is a have-your-cake-and-eat-it-too situation. The miner wants prices to rise -- ideally -- on his terms, so he can have it both ways: rising prices for his commodity, but at a pace that allows him to insure against a drop in prices, but not have that "insurance" cost too much. Some miners don't hedge. This is just a business choice in light of their unique circumstances and perspectives.

So, back to the gold market. Speculators often make the mistake of viewing the market through the lens of their own objectives. They fail in this because they are not the principal force in THIS market, and their objectives are secondary to those mentioned above. Hence, when the news wire can state (as it often does) that further upward movement requires a return of "speculator appetite," this tells us that, all things being equal, the market is at its top -- as only the secondary movers in the market are pronounced as capable of moving it further at this point.

Speculators are essential to the market, but they are not its raison-d-etre. So, when speculators are announced as the needed reason to move the market further up, see this as a clear sign THIS market -- the exchanges for contractual gold commerce -- the exchanges for institutional hedging -- are at their top.

What's more, they are at their over-top -- they are in a bubble. By the most recent exodus of the renowned Rothschild house from the gold hedging business, this confirms what has been obvious (declining volumes -- aka "business" -- on LBMA) for years now. It's not profitable -- as a broker. Therefore, its not doing its job. Therefore the "hedging functions" are not performling like they should. Therefore, the primary participants in this market are going away. Therefore, the secondary force for this market is becoming the primary mover in this market -- i.e. the speculator. Therefore, the market is no longer on a sound foundation, but being yanked untethered at the fickle whims of speculator force.

What is THIS market supposed to buy? Not chiefly gold. In terms of our standards, LOTS of real gold goes through these markets, but in terms of the overall volume, the real "commodity" bought and sold is the "price" of gold, as a hedging vehicle for all the things cited above. If this price is being slowly deemed to be TOO HIGH, not because gold is too high, but because the ability of the PRICE of gold to fulfill its role WITHIN the context of THESE markets, for THEIR purposes -- the various hedging functions -- than the price of gold in these markets stands to go down, not up.

And to add further to this, the price may be going up for a while still, in stages, in NOMINAL terms, but in REAL terms it will go down. Today, we hear of earnings going ballistic in equities, but the stock prices stagnant, because the market has calculated the earnings in real terms to be much less -- offset by price inflation. So, the nominal gains in this gold market will at some point be recognized as not keeping up with the highly visible CPI, at which point, having failed even the most rudimentary and basic of all the hedging/offsetting functions of all -- intolerable even to the speculator's objectives at this point -- it is at this point, that a mass exodus from paper gold will commence.

And why is it failing its hedging functions? Mostly due to the instrument in which the contracts are denominated. This dollar instrument is what is in trouble, and the confluence of two divergent interests, both needing/wanting to see a contained paper gold price for differing and seeming perverse reasons, are destroying the paper gold arena.

Again, FOA:

FOA (10/9/01; 10:05:48MT - msg#117)

Paper gold derivatives became a major force in allowing this last, end time, demand for dollars and subsequent surge in it's value. This is why Another said it would run way up, even while being inflated, before the end would come.

Only now are we coming to a point where theory meets practice as Alan Greenspan now is and must hit the presses. This forced printing inflation, currently happening, is the very precursor to a lower dollar exchange rate, rising real price inflation and the very first destructive test of paper gold derivative hedges. As price inflation rises the US will protect its own banks and the short paper gold portion of these positions they created. They will sell all the paper gold they can in order to stop these hedging positions from functioning and breaking their writers.

On the physical side, the US wants and needs a higher price as they ship real gold commitments to help balance our sinking ship. So, the dollar supporting paper gold position we have sold for years will now block our ability to gain some ground with high US gold reserve prices.

In turn, Euro factions will also sell into the paper gold dollar system to help further discredit its hedging function in the face of dollar price inflation.

And again, Rothschild:

Withdrawing from the business is "the sound thing to do."

-- Both FOA and Rothschild are not out of gold the real metal, and anyone following in the footsteps of giants won't be either.

BelgianHere we go again....#1200684/18/04; 13:46:14

Next week, Tony says when UK elections on EMU will take place. Strange timing !?
First, the UK pulls out of the WAG II...then the Red Shields see no bread anymore in Gold-trade,...TRADE (!!!) and now Tony goes EU, again, right after his visit to Washington !?

When CBanker, Sir Alan, said that central banks stood ready when the....the BoE, indeed shipped some of the precious (commitments) to...??? Then Benjamin, explicitely made it public that the dollar (still the world's reserve, BTW) has some high tech printing presses. I still don't get it that no CB ever alluded about the crazyness of that particular statement by one of the leading managers of the globe's $-reserve currency. Combine this with Alan's openly Gold(price) commitments...and nobody shows any sign of indignation !!!???

At the same time, everything is undertaken to keep everybody out of the (z)euro, whilst that same euro is selling, has sold, supposedly halve its gold-reserves !?
All these reasonings don't make any sense, and still all the Gold-watcher, keep on ignoring the coming FreeGold perspective.

All these Gold-facts of the past couple of years are "certainly" NOT, stand-alone events. What a difference could it make to the dollar if $-POG would rise/fluctuate to $600 or even $800,...IF, the dollar was sohhhhhh confident that the euro would never pose a threath to dethrone the $-reserve !? Now, see what happens, poor Rothshield witdraws from goldtrade due to non profitability !? AA even sells a jewel in its crown (GFI), entirely to a growing competitor. Even the WGC, sees no bread in Gold (promotion) anymore !

Is it that there is something going to happen with the Gold-"market" !?

I cannot understand that none of all these wise and authoritive, Gold Heros, never connect all these dots in one or other consistent way ? Am I that paranoia or is there Another (hum) reason that must NOT surface...
Any suggestions, anyone ? TIA ! B.

TownCrierChina plans forex reform to make yuan market-driven#1200694/18/04; 13:54:00

BEIJING, April 18 (Reuters) - China will take steps to let market forces play a bigger role in determining the yuan's value and pave the way for its full convertibility, central bank chief Zhou Xiaochuan was quoted on Sunday as saying.

....The move would help ease upward pressure on the yuan, which is convertible on the current account, analysts say. The yuan's full convertibility is seen at least five years away.

-------(from url)-----

Not not six, not eight, not ten, not 12. Five years. Five.

WA-II, commencing September, spans only the next five years.

Maybe we can predict no following WA-III? The preparations complete, dinner is served.


TownCrierTalking George#1200704/18/04; 14:43:19

April 18 (Bloomberg) -- George Soros, the billionaire investor responsible for the U.K. quitting Europe's Exchange-Rate Mechanism, said currencies in eastern Europe look "vulnerable" as they prepare to peg to the euro.

The countries should make their staying in the ERM currency band as brief as possible before adopting, Soros told reporters at the annual meeting of the European Bank for Reconstruction and Development in London.

Ten new countries join the European Union on May 1 and several are planning to enter ERM soon so they can adopt the euro from 2006.

Soros in 1992 made more than $1 billion by selling the pound as the U.K. tried to prevent the exchange rate falling out of the ERM band. Hedge funds may try to mimic his success as Estonia, Latvia, Lithuania and Slovenia lead nations seeking to join the euro after 10 countries become EU members.

"There's a danger of breaking the band," Soros said. "These are relatively unstable situations because of the openness of the currencies and the relatively small amount of capital" in government coffers to defend the exchange rate.

Lithuania Unconcerned

"We are not concerned about speculations against our currency because Lithuania's currency is already pegged against the euro and not floating freely," said Nerijus Eidukevicius, deputy minister of economy in Lithuania at the EBRD meeting. Latvian and Estonian government officials have also said in the past they don't expect problems with adoption and hope to have the euro in place by 2007 at the latest.

-----(from url)-----

If you take more than a passing interest in monetary affairs, you may count yourself fortunate to live during such unprecedented, exciting times as these. Like a decade-long "Superbowl" of money, and you're in the front row.


mikalToday's Headline Roundup#1200714/18/04; 14:44:00

ABC News-Business-Wire
Companies Look to Heal Shareholder Rifts

Chicago (IL) Tribune-Business* (Reg. Required)
GOP Squabbles Over Tax-Cut Rules

CBS Marketwatch
Disney's "Kill Bill, Vol. 2" tops box office

CBS Marketwatch
Rice: Terrorist attacks possible before U.S. elections

CBS Marketwatch
Riggs Bank faces fine over Saudi bank accounts-report

CBS Marketwatch
Kerry pledges to restore 'fiscal responsibility'
Interest grows for Indian film industry

George Soros Says Euro Candidates' Currencies Vulnerable to Speculators

Treasury's Snow to Urge Flexible Currencies at G-7, Deputy Secretary Says

U.S. Factories Probably Boosted Durable Goods Orders in March, Survey Says

Chicago (IL) Tribune-Business* (Reg. Required)
Insurance scam rise an epidemic

Chicago (IL) Tribune-Business* (Reg. Required)
Teen job market hardly working

TownCrierIndians happily taking more gold for the money#1200724/18/04; 15:01:42

MUMBAI, APRIL 18: The strengthening rupee has given some respite to gold jewellery prices in the country, particularly at a time when the marriage season in the country has reached its peak.

The rising rupee has not only stabilised gold and jewellery prices in the country but also has brought down prices in the retail market, according to Mr Prithviraj Kothari, a leading gold importer.

"Gold was trading at $420 per 10 gm (Rs 6,250 per 10 gm) a month back. It continues to trade at $420 per 10 kg in the world market but in rupee terms the price has come down to Rs 6,020 per 10 gm because of rupee appreciation," Mr Kothari said.

...With stability in gold and jewellery prices, traders say the market is witnessing an upswing in demand for gold jewellery products.

...We expect the demand to stay high during April and May because the farmers would have sold their crops then...

Gold imports has been rising in the last few weeks. There has been a 15 per cent rise in imports in gold bars...

...Meanwhile, traders are crying hoarse over the delay in the Reserve Bank of India (RBI) not announcing the guidelines after the central government liberalised gold imports in January this year, allowing individuals to import the yellow metal.

Traders are alleging that "vested interests" are blocking moves to liberalise gold imports as they stand to lose their commissions when individuals and firms directly import gold. ..........once individuals and firms are allowed to import gold directly, the retail customer would get gold jewellery by about Rs 40 (cheaper) per 10 grams.

------(from url)-------

Our "advanced" system of derivative-based pricing and virtual gold ownership (in which "hands on" is just a counterparty away) has allowed anyone else having a mind to acquire the metal to be the prime beneficiary -- occupying the high ground of tangible reality when the paper-gold bubble bursts.


Gene@ Belgian/Goldilox/Mas#1200734/18/04; 16:07:37

Yes, I agree. My only real point was that to lay this mess at the feet of the current regime is somewhat rediculous.
Bush may not be helping matters much right now due to geopolitical events. However , if he is defeated, I think you will see the liberal, socialist Kerry put the US under UN control as part of the NWO. Of course it will be a slow, step by step process, but I feel in my heart that is the objective. Bye bye constitution. Hello dictatorship.Do you think the liberal Democrat gang in Congress want to take our guns to protect us from crime? No, they are afraid of what an armed populace will do when the Joe-six-packs wake up to what's going on.
There will be no free gold when the people are not free.

TownCrierPerspectives#1200744/18/04; 16:10:02

HEADLINE: Newmont, Barrick Turn to Exploring, Not Mergers, for More Gold

April 18 (Bloomberg) -- Newmont Mining Corp., the world's biggest gold miner, and its competitors spent $27 billion on acquisitions in the past six years. Now they're turning to exploration after soaring share prices made potential targets too expensive.

...Gold futures on the New York Mercantile Exchange surged 23 percent in the past year.........The increase spurred a 60 percent surge in Newmont stock in the past year. Toronto- based Barrick Gold Corp. climbed 33 percent, while Vancouver- based Placer Dome Inc. rose 52 percent.

"With gold prices where they are and stock prices higher, people don't see a lot of value in the acquisition front," John Dow, managing director of Newmont's Australian unit, said in an interview. "We have to get out there and find new reserves." Newmont...needs to find 7 million ounces of reserves a year to replace the gold it digs out of the ground.

-------(from url)-----

Two points.

First point. If a mining company feels that buying up the shares of other mining companies is no longer a prudent investment, no longer an economically prudent means to increase their own bottom line, then why should any right-minded individual believe that these unfavorable circumstances would not also be applicable to himself?

Second point. The more that a mining company spends to explore and acquire replacement reserves to continue their mining operations, the less cash on hand they shall have with which to potentially compensate their infinitely patient shareholders with their share of the operational profits via dividends. (Whereas, given the investment climate of the first condition, is it very reasonable to expect significant capital gains from share price increases going forward?)

In this light it is also well to bear in mind that a company's engineers like to mine total reserves at the margins of profitability, anyway, in order to eke out to greatest possible life. That's all fine and dandy for material participants (such as wage-earning emplyees and salaried executives) in the extended, break-even venture, but it's bloody hell for the passive investor expecting a piece of profits that never significantly materialize in excess over company expenses and taxes.


TownCrierWinnowing#1200754/18/04; 16:38:41 MSNBC
GoldiloxNWO or Fourth Reich?#1200764/18/04; 18:45:59

@ Gene:

No argument here, but I fail to see a difference in the two potential regimes. Ashcroft eliminates our Bill of Rights for the identical purpose. They are all beholdin' to the banksters who put them there and control their massive "holdings". Republicrats or Demicans - no matter.

That's why I recommend Smithy's writings at Wizards of Money. The pols are but marionettes performing their silly little dance for all to see! The strings are pulled by artists behind the curtain.

"You're paid to stop a bullet.
It's a soldier's job they say.
And so you stop the bullet,
And then they stop your pay.

Should I write a letter to my Congressman?
Each Congressman has two ends; a sitting and a thinking end.
Since his whole success depends on his seat, why bother, friend?"

- E. Y Harburg, Rhymes for the Irreverent
(Lyricist for the Wizard of Oz musical)

Ag MountainA few of my favorite telltale signs#1200774/18/04; 22:05:20

"cold dead hand"
"hunker down"
"world order"

Is it my imagination or are the guys who use these words the same minority of guys who feed into the negative stereotypes tainting all the rest of us as socially awkward anti-establishment weirdos? We gold investors will probably be up against an unfair "us" versus "them" vibe until gold investing takes hold of a larger portion of our population when most people will finally stop seeing those guys as a category of gold freaks and see them properly like we do as just plain freaks. Any special interest they have in gold is merely incidental. Correct me if I'm wrong, or else can anyone add to my list of telltales just for laughs?

DruidInteresting Website/Articles#1200784/18/04; 23:17:29

Druid: Interesting reading.
WaveriderCan the Fed engineer a gradual rise in rates without setting off a stampede? #1200794/18/04; 23:33:04

"To see thousands of traders at their most jittery, look no further than the $8 trillion bond market. They're all dreading the first Friday of May, when the government is set to issue its next jobs report. While the two reports surprised economists, you would normally not expect payroll numbers to cause wild behavior at the world's biggest securities market. After all, the monthly jobs number is a lagging indicator of strength in the economy.

But today's bond market is anything but normal. It functions on a hair-trigger of speculation about just how soon the Federal Reserve will begin raising overnight interest rates. The market sold off sharply, too, the morning of Apr. 14, when the government announced a much bigger than expected 0.5% jump in consumer prices. Anxiety is so intense because the market is more leveraged and more hooked on cheap Fed financing than it has been in at least a decade. Traders fear the end of a profitable ploy known as the "carry trade," in which hedge funds, banks, and Wall Street dealers borrow money at dirt-cheap overnight rates and buy 5- and 10-year notes, which yield two to four times what they are paying for their borrowing."

Waverider: Good reading on the leveraged bond market.

DruidRussia Revising Great Game Rule Book#1200804/18/04; 23:47:22


"To hear President Vladimir Putin tell it, the great game of the 21st century is economic in nature and Russia intends to change the way it's played.

Putin made the rules of this new game clear in December, when he told the nation that the greatest danger facing Russia is a weak economy.

"Our biggest threat is falling behind in the economic field," Putin told the country in his annual teleconference. "There is a tough, competitive battle going on in the world. But unlike previously, this battle has moved from the realm of military conflict to economic competition."

In this chess game, like those of the past, energy is king. But this time Russia is exploiting its prowess like never before.

On the eastern front, it has Japan and China locked in a bidding war for Siberian oil, while in the west it has Europe struggling to deal with its dependency on Gazprom's gas, and in the south it is slowly extending its electric tentacles through state power monopoly Unified Energy Systems.

But what is emerging as a sort of "Putin Doctrine" doesn't stop there. It seems to envision Russia as the pivot around which the global oil market revolves, the power broker that can tip the balance between OPEC and the United States. And it seems to call for the rapid international expansion of patriotic companies -- both state-owned and private, energy and nonenergy.

In this quest, Putin appears to have the backing of big business.

"If you don't compete globally, then you are definitely going to lose," said Kakha Bendukidze, board chairman of United Heavy Machinery, the nation's largest machine-building concern and one of its leading multinationals.

"If you don't move into foreign territory, global competitors are only going to come to your market and try to compete with you there," he said in a recent interview.

Business leaders, however, are divided over how best to get there -- whether Putin's way, which emphasizes the might of the state, or a freer market approach might be better.

But at this stage the debate is meaningless. Thanks to a new and pliant parliament, and the October jailing of Mikhail Khodorkovsky, Putin, unlike a year ago, holds all the cards.

Indeed, some see the arrest of Khodorkovsky as part of Putin's wider development strategy.

Although the charges against the billionaire were fraud and tax evasion, some say it was his attempts to challenge the authority of the state that got him in trouble, particularly his efforts to break the government's pipeline monopoly.

By pushing for the building of privately owned pipelines -- one directly to China and another to Murmansk to better supply America -- "Khodorkovsky was pursuing a set of interests ... that was a threat to Putin's state policy," a senior U.S. administration official said in an interview in Washington earlier this year.

In addition, the official said, Khodorkovsky's attempts to merge his oil company Yukos with smaller rival Sibneft and then sell a chunk of that company to a U.S. supermajor like ExxonMobil would have made him "untouchable."

"Fundamentally, this was a question about power," he said. "What Khodorkovsky was proposing presented problems for both foreign and domestic policy. ... State control over pipelines was both a domestic and foreign policy lever."

Now, however, all talk of building private pipelines -- or even of selling an equity stake in a major Russian oil producer to a U.S. company -- is taboo.

"This is not the scheme the United States wants to see," said Julia Nanay, a senior energy analyst at Petroleum Finance Corp. in Washington. "It would like to see lots of private companies, private pipelines and more exports."

It is worth noting, she said, that since Khodorkovsky's arrest conditions have gotten worse for U.S. oil majors that already had a foothold in Russia -- especially ExxonMobil, which lost its license to the giant Sakhalin-3 field late last year.

"All this sees to be eroding the U.S.-Russia energy dialog," Nanay said.

While these developments may be bad news for Washington, which is anxious to reduce supplies from OPEC, they have increased Russia's clout on the world stage, analysts said.

Playing Both Sides

Strengthening ties with the Arab world while not completely alienating the United States is a tough task, but it's one that Putin appears to be attempting.

In the past, much to the satisfaction of the United States, Russia and OPEC have been at odds. While Russia has been cranking up exports at breakneck speed, OPEC has been doing just the opposite, arguing that it needs higher oil prices to compensate for the United States' decision to depreciate the dollar.

But now, in what may turn out to be a pivotal policy shift, Russia appears to be winding down its export drive. Last month Economic Development and Trade Minister, German Gref, boldly stated that 2004 would be the last year of major export growth for the foreseeable future.

Gref said exports will likely surge 14 percent this year to 266 million tons, but after that growth will be minimal, around 2 percent per year for several years to come.

Such a move would endear Russia to OPEC and the entire Arab world, analysts said.

Many analysts expect OPEC to come under increasing pressure over the next few years as instability in the Middle East grows and individual members such as Venezuela and Nigeria are pressured into leaving.

So, by reducing export growth, Russia could help the cartel survive, said Alfa Bank chief strategist Chris Weafer, a former adviser to OPEC who retains close ties to the organization.

What's more, Weafer said, by deliberately slowing down exports over the next few years, "the entire Arab world will see Russia as a significant ally and Russia's political influence in the Arab world will increase."

Russian oil majors are already capitalizing on the warming ties. LUKoil in January became one of a handful of foreign firms to gain the rights to develop a potentially huge gas field in Saudi Arabia. Notably, no U.S. firms were awarded the same rights, as they are reportedly finding it increasingly difficult to gain a foothold in the kingdom."

Druid: Another sign along the trail reflecting the ongoing change that is taking place before our very eyes.

GoldiloxTelltale signs#1200814/19/04; 00:13:55

@ Ag Mountain

You a funny guy! Many of your list of "telltale signs" come straight from Another, FOA, GATA, LeMetropoleCafe, and Wizards of Money, so I assume you lump all of them into the "freak" category, as well. I'M SURE anyone who dares to disagree with you is a "freak". What an open minded approach.

Just remember, when you point a finger at others, there are three fingers pointing back at you.

DruidSnow Says OPEC Output Cuts Unwelcome #1200824/19/04; 00:27:04

KANSAS CITY, Mo. (Reuters) - U.S. Treasury Secretary John Snow on Monday warned that rising energy prices posed a risk to what he said was a solid economic growth outlook and called OPEC's production cuts "most" unwelcome.

Snow, in Kansas City for a day of public events, said the Bush administration has told members of the Organization of the Petroleum Exporting Countries of its displeasure over members' agreed cuts in output quotas. "We're very concerned and the actions by OPEC in reducing its quota are most unwelcome," Snow said in a local radio interview when asked about record-high gasoline prices. "We've let OPEC know that we don't think well of these actions. The situation is a serious one."

During a round-table session with Small Business Administrator Hector Barretto and about a dozen local business leaders later, Snow again expressed concern about the oil cartel's reduced production. "That couldn't come at a worse time," Snow said. "It's an uncertainty for the economy."

Responding to Snow's comments, a spokesman for Democratic presidential challenger John Kerry said Americans should watch what the White House does about OPEC rather than what it says.

"If the president was so concerned about high gas prices, he wouldn't have broken his campaign pledge to jawbone OPEC. Complaining to OPEC about its production cuts after the fact is not the same as doing something to prevent them beforehand," Kerry spokesperson Phil Singer said.

OPEC members agreed to an output quota cut of one million barrels per day from April 1 to blunt the effect of a seasonal downturn in demand in the second quarter.

The U.S. Energy Department is forecasting record high summer gasoline prices, some 20 cents above last year on average, due to strong consumer demand and tight gasoline supplies caused by lower OPEC output quotas.

The Treasury chief said rising energy costs ratcheted up pressure on lawmakers to come up with a legislated method to increase domestic energy production.

"We've got to get an energy bill. We're running out of options here," Snow said of Bush administration proposals for a new energy policy. These have stirred controversy because they would include more drilling in environmentally sensitive areas in Alaska and elsewhere.

Druid: Man! This next election can't come quick enough for this administration. It seems like everyday now major overall news events are occurring that would suggest a difficult road to travel between now and election day. The volatility in these markets are about to hit warp drive as the longs and shorts try to take each other out using rubber bullets.

Take Delivery.

BelgianTowncrier....goldmining....#1200834/19/04; 00:31:45

Yearly gold output rose steadily and approximately doubled since the '70-'80-ties. This happened against the background of a relatively flat $-POG and luckely most of the mining could be done in heavely depreciating currencies, responsible for having some profitability left.

Now, with the $-POG still at historical (30 yrs) lows... AND a declining dollar (exch.rate) against the mining currencies (R/Au$/Can$)...the profitability of many mines remains shaky and very uncertain. But "the" very nature of profitability of any enterprise doesn't matter much, these days. Not only in the mining business, but for every publicly quoted stock. The financial fraternity "organizes" a different kind of profitability for the gambling share-derivative participants. Yes, we all do play, speculate, gamble,... in a "price-moving" thing !!!

We are being "Yahood", and we like it. Price-swings à la carte by preference with non-profitable activities.

In the earlier days, much more modest price-moves were part of what was the called, creating a market for the pricing and trade (liquidity) of financials. Today, we reached manic hysteria and this doesn't deserve the definition of "market" anymore.

Back to goldmining : I still wait for the first serious analysis on the gold-forward-selling (conveniently called, hedge) of underground gold.
Leading miners (ABX, Au,...) started these forward sales on demand from higher invisible hand. Many smaller mines followed that trend...were lured into this organized play...were forced to do so, due to the containment (slaughter) of the $-POG.

What was so important about this phenomenon...what was really behind this underground gold robbery ? The "paper-gold-market" NEEDED a lot,...A LOT... of gold, as to keep the dollar-system floating. Get it out of the ground as fast as possible and as much as possible, at break even prices and flimsy sustainable profitability, before the whole thing (goldmarket and dollar) breaks up pré-maturely !

And since goldminers are NOT wealth-diggers, they did exactly what was (politically) expected from them ! And they will continue to do so. As I stated earlier, there is no freegold "miner" of unfree gold, anymore, if there ever was !

Goldbugs (was one myself for a very long time), speculated and today, gamble on the goldmining business that lives (or dies) on the organizational mercy of the dollar-papergold manipulators !!! And now, "they" want us (goldbugs) to believe that a new wave of gold-exploration is on the horizon, keeping to "serve", UNFREE gold ! What a contrast with the major hint that the Rothshields gave us, recently... after LBMA, mysteriously went public (1997), all of a sudden, after decades of absolute secrecy.

Transparency is a nice thing under the condition that one does see "exactly" what one should see ! I see the coming FreeGold and indeed the coming complete subordination (National and International control) of goldmines that may call themselves wealth-diggers in the future. Not the $-paper-goldmarket will exercise goldmine control but the state in wich they are located.

Compare this with the strategic and National interests of oil companies. Only difference is that one cannot stock oil-wealth at home to sell when needed or desired.

That's why I absolutely refuse to accept the thesis (nonsense) of bying back these so called gold-hedges ! The forward goldsales, simply stopped and the miners may call them lucky if they can deliver the precious with some remaining profitability. Simply compare the market events with palladium/platina and some other metal commodities that are mined.

WHY gamble on a paper goldmine that mines an UNFREE product (Gold) when there are so many Yahoos out there !?

Jacob Marley : I find your nice description of the $-papergold-market, much too respectfull. This market is not as descent as you are describing it. Can "manipulated" (cartellized) markets uberhaupt be respectfull !?

How "descent" is a $150 TRILLION derivative situation against a global $ 50 Trillion market, way over-valued, already !? Don't want to go on a moralistic tour, but we landed in something atrocious, haven't we ?

WHAT exactly is *behind* this $-papergold-market !? Most wish to answer...NOTHING ! I say ...future FreeGold ! But indeed, we never had FreeGold before in modern times. Gold has always been "FIXED" !!! And now we have the Rothshields leaving the ancient London daily goldfixing...FIXING...!!!!!!OEIOEIOEIIIIIIIIII !
They "say" they are leaving "THIS"..."THIS" goldmarket...the paper one !!! And Tony, going to try to get London into Euroland, again !

Randy, I liked your insight into the China-Yuan convertibility timing (5 yrs) and WAG III , very, very much, Sir ! A brilliant thought, again Sir. Nice dinner.

And indeed, they are calling Soros, again, as to do some other currency-manipulation job. The plot gets thicker by the day.

Gene : Candidate Kerry already made it clear that nothing fundamental will (can-!!!) "change" if and when he might run the next US($) administration ! He (or anyone else) can't stop and reverse the major ongoing all overwhelming trends !

MKNews & Views#1200854/19/04; 07:37:26

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Cavan ManSaudi Prince or Putz?#1200884/19/04; 09:11:50

Saudi Envoy Promised Lower Oil Price, Woodward Says (Update1)
April 19 (Bloomberg) -- Saudi Arabia's ambassador to the U.S. has promised President George W. Bush the Saudis will reduce oil prices before this November's election to help the U.S. economy, according to Bob Woodward, author of a new book about the Iraq war.

Oil prices are ``high, and they could go down very quickly,'' Woodward said last night in an interview on CBS's ``60 Minutes.''

``That's the Saudi pledge,'' said Woodward. ``Certainly over the summer or as we get closer to the election they could increase production several million barrels a day and the price would drop significantly.''

jenikaOil/China/Vietnam#1200894/19/04; 09:27:01

I've just finished reading DragonStrike-the millinum War and would recomend it to everyone.
The book was written in 1997 as a future scenario based on facts for WW3.

Looking at the news today I see an article regarding the Spratly's that makes me wonder....

Vietnam pushes ahead with Spratlys tour, despite protests

A ship has left Vietnam carrying its first tourists to the Spratly islands, despite protests from China, one of six claimants to the disputed archipelago.

Tourism official, Duong Xuan Hoi, says the boat left Ho Chi Minh City with about 60 Vietnamese tourists and 40 "invited" officials.

Their first stop is the Bach Ho oil and gas field, and on Wednesday they are due to visit Big Spratly Island, around 650 kilometres off Vietnam's southeastern coast.

Hanoi says the boat tour, which is being conducted under the auspices of the Ministry of Defence, has been mooted since 1998.

However, it was only officially announced last month, prompting an angry reaction from China and a cautious response from the Philippines.

Along with Taiwan, Malaysia and Brunei, they claim sovereignty over all or part of the Spratly Islands, which straddle vital shipping lanes and fishing grounds and are believed to contain vast oil and gas reserves.

Except for Brunei, all the claimants have military personnel scattered across the archipelago of more than 100 islets, reefs and atolls with a total land mass of less than five square kilometres.
<end snip>
The story doesnt make sense to me for a few reasons, a)since when do the Dept of Defence take on tourists? b)why do the tour and raise tensions? c)Who were the invited guests?

Jacob MarleyBelgian - Paper Gold...#1200904/19/04; 09:28:54

Greetings dear Belgian -

Did not wish to make it sound that the paper gold markets are nice and childproofed. Forgive me, if this is how it came across! My main effort was to offer a brief (hardly comprehensive) overview of this fundamental and clinically sterile architecture for the purpose of pointing out how these markets facilitate the very tight gold price control they exhibit. Indeed the launching point of all these posts was the contrast between FOA's quote summarizing the manipulation of the markets from both sides of the pond, for different reasons that have the same ultimate conclusion -- suppression of the gold price.

Couldn't do this in a spot market. Couldn't do this even in a paper market, if its architecture was such as to support different objectives. This is a plain vanilla commodities market ON THE SURFACE. It exists on this surface for plain old commodity reasons. It has been a superb vehicle because of the this plain old design to control the price of the commodity. People get too caught up in the workings of the system, trying to figure out the day-to-day. My point is to say, "Look at the fundamental design of this thing. It cannot be a vehicle for a free gold price, even if it wanted to. So..., those looking for the moonshot in their leveraged paper, are not going to be satisfied.

Any angle that can be worked will be worked, and it will be worked to the limits of the envelope. This means naturally there exists the gamut of official and unofficial, legal and illegal participation. I am a novice, surely, but I really am not naive to these things.

What might be interesting to also note, is that while FOA writes of the overwhelming selling into the markets, he talks of coming volatility, as well. He, as you are well aware, throws out numbers of a $100 a day moves at one point. This is an interesting post, and aligns itself well, imvho, with the Roth snip from the other day:

FOA (06/12/01; 11:23:21MT - msg#77)

"I am looking for some wild spurt of trading that lasts for several days or weeks. Open interest rapidly surging hundreds of thousands of contracts, then just as fast plunging away. A paper gold market, containing tremendous price changes ($100++ or more per day, both up and down) that begin to call into question the ability of Comex to function. Not so much question it's function as an price setting exchange, rather question if it can later function at all in the metal settlement process."

The understated veiled transparency of the Roth statement fits (again imvho) very well here:

"He acknowledges that Rothschild has neither the technological infrastructure nor the risk appetite necessary for being a directional or proprietary trader."

I have no reason to not take him at his word here. They have plenty of ways to make tons of money. Maybe he doesn't want the hell of this coming death rattle, where this now largely untethered market -- emptying itself of the stabilizing large hedging institutional players -- becomes a field day for wild speculation like we've never seen. I think this dovetails well with your statement (perceptions): "We are being "Yahood", and we like it. Price-swings à la carte by preference with non-profitable activities." -- Great line. Agree 100%.

And the more volatile, the more the institutional players, who formerly sought mostly cash or supply hedging, make for the doors. This has already been well under way. I don't doubt there will be days ahead of tremendous surges in both directions, and some people will make a killing in this. But this only really matters as long as the nominal killing is still in dollars that have real value elsewhere. Once price inflation in dollars takes solid root, the wild swings will need to become wilder to make it worthwhile -- i.e., in terms of cash profits. As this moves along its road to destruction, the delivery issue will become more a factor, and then the jig is up as demands for delivery are defaulted upon.

This is not too different from the money function of paper notes in a gold standard, for instance. As long as there is confidence that the notes are convertible at par, they retain their money functions: denominating unit for contracts, value standard, means of payment. When people go to redeem notes for gold on deposit (akin to demanding delivery), the show is over, because the required confidence is evaporating, and the paper has lost its money function.

In the paper contract arena, as long as people are content with cash "delivery" as the substitute for the metal, the game continues. Cash settlement must first be called into question, before the metal will be sought. (I'm not talking about the metal that is delivered into this market, which is mostly from real business operations, and relatively small compared to overall settlements. These are the business as usual operations that function "on the surface," and have heretofore provided the necessary superstructure for the political manipulations to take place. I don't mean "cover" here, but simply the framework, wherein the price suppressing management of the system could be effected expeditiously.)

When speculative forces -- who mostly just want cash profits -- when they begin to see the gaming table not returning like they want it to, they will either leave, or demand gold delivery, at which point the whole thing will become exposed, and it's over. The Roths of the world won't lose sleep over this, as they are already on to the next thing.

Is this a bit clearer as to intent? Thanks for the critique, good Sir!

mikalTieing knots with the "Dollar Smile"#1200914/19/04; 11:10:31

The buck also rises
Don't look now, but the long-suffering U.S. dollar is enjoying a mini-rally. Will earnings suffer?
April 19, 2004: 12:20 PM EDT
By Mark Gongloff, CNN/Money senior writer- New York -Excerpts:

""That's one of the reasons the dollar came off at the end of last week," Rhame added, "and could come off even more on Wednesday, when Greenspan speaks. He could be setting the foundation for a more range-bound trade for this coming quarter.""
[Whatever the market expects one day, soon becomes its opposite]
"In any event, the Dollar Smile is made up of two upward corners and one downward curve. By the second half of the year, when the economy and U.S. stocks are expected to slow down, worries about twin deficits will likely come back to the fore, putting downward pressure on the dollar again, most currency analysts believe. "After the Fed comes out with its rate hike, and when it communicates to the market that it's satisfied with where rates are for the time being, then we may go back to focusing on the deficits," said Ashraf Laidi, chief currency analyst at MG Financial in New York."

GoldiloxDRESSING UP INFLATION#1200924/19/04; 11:57:49


But reflation is just inflation dressed in a frilly hat. So why would any government that had an IQ above that of a slug do such a thing as try to reflate/inflate the economy? Ah, my darling quizzical one! My heart soars to hear you speak with the Wisdom of the Ages! But you are not the first one to ask that question of the Mogambo. In fact, the only question MORE popular among the Seekers of Enlightenment that sit at the feet of the Mogambo is "What is that stink?"

But the Mogambo is now saved from any future threats of exertion such as thinking or answering questions, as now all I need to is to smile knowingly, languidly raise my finger, and point to the "Cycle Pros" on, where Mr. Stephen J. Williams has provided the answer. "Inflation is a stealth tax and has a very efficient built- in collection scheme...everyone holding dollars is affected and everyone's purchasing power is diminished, therefore the collection of this 'tax' is 100% efficient. And to make it even better, there is no paperwork to fill out, no check to send in, no harassing telephone calls from the tax collector, and the government can continue to print all of the dollars it wants so it can continue a free spending policy." And, of course, higher prices means, ceteris paribus, more sales tax collected at the state level, with which to fund THAT particular cancer.

But the worst thing is, despite ludicrous protestations to the contrary, this little stealth tax has already thrown itself into its dirty work. With a vengeance.


Notice how the administration is already passing the buck here, calling higher oil prices a "tax" from OPEC. They will never cop to the fact that the higher oil prices are computed in devalued US $, and do not aply to the non-$ world.

Kinda like the neighbor who allows the foxtails in his yard to spread everywhere and then whines about neighborhood deterioration.

Socrates964Belgian/GFI#1200934/19/04; 11:59:19

As for Anglo disposing of its stake in GFI, I doubt it's due to them turning bearish on gold per se, so much as needing some ready cash to write down the combined AA/Ashanti hedge book (nearly as big as ABX) of nearly 14m oz before it exploded in their face. We know that they want to shed 3m oz of this - the cost is $1.2bn - The NN transaction more or less foots the bill.

In addition, they may have decided to cut and run in the face of S African risk - monetary from the rand and/or rising input prices, political from the government that may decide it has won a ringing endorsement from its electorate to do as it pleases, and sadly, human, due to the impact of HIV-related mortality on long-term S African labor costs.

I think time was against them on this one and they needed to move fast. Opinions?

Belgian@J.M.#1200944/19/04; 12:11:43

Your clarification undrstood Sir. Thanks.

But "for the time being", volatility on $-€ POG, currency ($-€) exchange rate and even IRs, will constantly be cooled down, if the volatility would increase !
Why : The euro-alternative wishes as much broad "stability" as possible and that suits the dollar very well ! Never forget that the ECB and FED do communicate.

I even think that "oil" will participate in general stabilization, as this suits a broad majority. That's how I read CM's post on the supposed Saudi gesture as the packaged message to the public. Given the incredebly building turmoil, building in the ME, this is not going to be easy for Arabian oil to comply with.

This means that a certain amount of Gold must keep flowing where it is wanted ! Because the different parties comply with general stability for different reasons of course.

But this temporary stability on the many fronts is not, cannot, remain for ever. Will see what will cause havoc.
Thanks Jacob.

Ari, where are you !?

Old YellerHO,HO,HO,well again'some more FOA,from 11/02/00,main forum#1200954/19/04; 12:13:01

"Well again, none of these guys lend anything for free and that is what 1% is when lending in at least a 4% world. It just doesn't happen

The original "gold deal" as it first came into play involved lending the gold, the borrowers (BBs) selling it for cash and then they (the BBs not the mines) pooled that cash in a holding account. There it was held in interest bearing instruments, not delivered as financing to the gold mines. That pot of cash grew with it's added interest and became the ever increasing per ounce price the mines sold their production to in later years. Fulfilling their contract.

Having entered into these contracts that guaranteed a pot of cash to buy their gold production, the mines could use these contracts as fixing their profit margins to borrow money against and expand their operations. OK;, so this is how it started. I think American Barrick was the pioneer of this
back in 1986??

But, as I opened with above, this was just a lead-on sanctioned by the governments to create a market for paper gold dealings. All the rest that followed we have discussed endlessly. However, my main thrust in this is that the CB did have a political return to gain by starting this, it wasn't done for free.

Now, if this was a real lending operation with the intent to get some return on their idle bullion, they could have easily structured it far differently. As it is they lent the gold into a contract scheme that gained them far less then the actual rate returned. The mines would have been happy to create the deal even if it fetched a static guaranteed gold purchase for them. Thus giving the CBs a much higher return. You see, the mines motive was not to receive a higher than market price for gold, rather receive a stable price for gold so financing could be arranged. The fact that gold prices fell made Barrick (and many others) look real good and their staff stood for all the praise. When in fact
they didn't know it would work this way (back then).

Today, and over the last few years, with gold ever falling, all sorts of gold deals have bee worked out that have no connection to the CBs. A lot of it is completely outside the mine industry too. It's been carried so far that much of the stuff is just naked financing based on gold's price. The real return was in playing the official stance that gold must fall a little every chance it had to encourage
dollar settlements for trade. It's that simple. Drawing up a gold contract didn't have to have but a little gold selling involved and could be done just lending mostly fractional cash, borrowed at close market rates. The falling gold price did the rest. That's why so much of the value in a lot of current paper is worthless if gold rises. There is no physical to cover it! Why do you think they can trade
more paper in Britain than actually exists? What a mess, huh?

I'll tell you something else and this applies to Farrel's earlier post. All you have to do is dig real deep in that miner's papers to find where they must post more margin to back their deals if gold rises over $600. This isn't just my little guess, so ask them to see if I'm wrong (smile)? I bet that thing is back worded to include equal treatment for all creditors in a crisis and has an escalator clause in it that could take that whole co out if gold gunned to $2,000 in a week? Of course no gold delivery, just an accounting adjustment that would change some ownership. You see, they (and all the other hedgers) bet big time that the IMF/Dollar group could keep gold in it's paper price pocket forever. They never thought about what would happen if gold got priced in Another medium, a Physical only Medium!

HO! HO! HO! 10,000 here we come! (smile)"

I really like the gold bank run topic,real stirring stuff,if you know what I mean,

specie-manThings are not always what they seem#1200964/19/04; 12:15:27

With the recent news that Rothschild is pulling out from the London gold fix, I'm reminded of something that happened a couple years ago. That 2001 event is a strong example that the surface appearance of events can mask the true underlying currents. On the surface, the general public may conclude from the Rothschild event that gold is "dead".

Early in 2001, Platinum was trading at over $600 per ounce.
By September 2001, it had dropped to about $450.

Then in September 2001 the Platinum Guild International (PGI) announced that it was "closing shop" on their platinum investment activities due to the "poor" investment outlook for platinum (but they would remain active in platinum jewelry promotions). (See link to article).

To this day, I still remember that announcement. I thought it a bit strange and abrupt. But on the surface, it looked like platinum was "dead".

Shortly after that news, however, platinum bottomed. Of course, we all now know that platinum then proceded to double in price over the next 30 months.

The hidden underlying currents that were masked by the PGI became apparent. One could conclude that the PGI "quit" because they (and their supporters) knew that they could no longer control the price of Platinum.

Maybe we will see the same sort of announcement from the WGC.

a nation of one.#1200974/19/04; 12:24:23

In fact, things are always not what they seem.
Melting PotWhat are United States Notes and how are they different from Federal Reserve notes?#1200984/19/04; 12:41:25

United States Notes (characterized by a red seal and serial number) were the first national currency, authorized by the Legal Tender Act of 1862 and began circulating during the Civil War. The Treasury Department issued these notes directly into circulation, and they are obligations of the United States Government. The issuance of United States Notes is subject to limitations established by Congress. It established a statutory limitation of $300 million on the amount of United States Notes authorized to be outstanding and in circulation. While this was a significant figure in Civil War days, it is now a very small fraction of the total currency in circulation in the United States.

Both United States Notes and Federal Reserve Notes are parts of our national currency and both are legal tender. They circulate as money in the same way. However, the issuing authority for them comes from different statutes. United States Notes were redeemable in gold until 1933, when the United States abandoned the gold standard. Since then, both currencies have served essentially the same purpose, and have had the same value. Because United States Notes serve no function that is not already adequately served by Federal Reserve Notes, their issuance was discontinued, and none have been placed in to circulation since January 21, 1971. (But they are available on demand?)

The Federal Reserve Act of 1913 authorized the production and circulation of Federal Reserve notes. Although the Bureau of Engraving and Printing (BEP) prints these notes, they move into circulation through the Federal Reserve System. They are obligations of both the Federal Reserve System and the United States Government. On Federal Reserve notes, the seals and serial numbers appear in green.

United States notes serve no function that is not already adequately served by Federal Reserve notes. As a result, the Treasury Department stopped issuing United States notes, and none have been placed into circulation since January 21, 1971.


'We the people' have it within our power to unwind this abomination called the Federal Reserve.

I admit it looks like a daunting task, but with the advent of the internet and gold money outlets, I think it might be possible. It would take millions of us acting in concert to put a dent in the behomoth that the Fed has become.

Congress has the power to abolish the Federal Reserve System and thus destroy the private credit system.However, the people have it within their power to strip the Fed of its powers, rescind private credit and get the bankers to pay off the National Debt should Congress fail to act. The key to all this is 12 USC 411, which declares that Federal Reserve notes shall be redeemed in lawful money at any Federal Reserve bank. Lawful money is defined as all the coins, notes, bills, bonds and securities of the United States: 'Julliard v. Greenman' 110 U.S. 421, 448 (1884); whereas public money is the lawful money declared by Congress as a legal tender for debts (31 USC 5103); 524 F.2d 629 (1974). anyone can present Federal Reserve notes to any Federal Reserve bank and demand redemption in public money -- i.e., legal tender United States notes and coins. A Federal Reserve note is a fixed obligation or evidence of indebtedness which pledges redemption (12 USC 411) in public money to the note holder. The Fed maintains a ready supply of United States notes in hundred dollar denominations for redemption purposes should it be required, and coins are available to satisfy claims for smaller amounts. However, should the general public decide to redeem large amounts of private credit for public money, a financial melt-down within the Fed would quickly occur. The process works like this. Suppose $1000 in Federal Reserve notes are presented for redemption in public money. To raise $1000 in public money the Fed must surrender U.S. Bonds in that amount to the Treasury in exchange for the public money demanded (assuming that the Fed had no public money on hand). In so doing $1000 of the National Debt would be paid off by the Fed and thus cancelled. Can you imagine the result if large amounts of Federal Reserve notes were redeemed on a regular, ongoing basis? Private credit would be withdrawn from circulation and replaced with public money, and with each turning of the screw the Fed would be obliged to pay off more of the National Debt. Should the Fed refuse to redeem its notes in public money, then the fiction that private credit is used voluntarily would become unsustainable. If the use of private credit becomes compulsory, then the obligation to make a return of income is voided. If the Fed is under no obligation to redeem its notes, then no one has an obligation to make a return of income. It is that simple!



Sec. 411. - Issuance to reserve banks; nature of obligation; redemption

Federal reserve notes, to be issued at the discretion of the Board of Governors of the Federal Reserve System for the purpose of making advances to Federal reserve banks through the Federal reserve agents as hereinafter set forth and for no other purpose, are authorized. The said notes shall be obligations of the United States and shall be receivable by all national and member banks and Federal reserve banks and for all taxes, customs, and other public dues. They shall be redeemed in lawful money on demand at the Treasury Department of the United States, in the city of Washington, District of Columbia, or at any Federal Reserve bank


Belgian@Socrates#1200994/19/04; 12:41:42

Sorry Sir, but I think that none of your arguments are valid. GFI/Au-AA are two different cultures (300 yrs now)with consequently different options for their future. But I'm biased on this particular subject and find it difficult to contribute with enough objectivity. Rethink your 3 arguments. None of them causes real problems on the field.
Money, HIV, SA-politics are not and will not cause unovercomeable problems for the next 100 years of mining.

But speaking about goldmines,...let me take this business one step further : Where does their refined precious land !? Just imagine you are a core owner of a goldmine...and now let your imagination run free...
In other words,...have you an idea of who all those Gold-clients are !? More precisely,...are there any "special" (priviledged) clients with a very special statute !?

We know ohhhh sohhhhh very little about the "REAL" goldmarket, Sir ! And one surely doesn't have to be an insider to "imagine" high probabilities, pretty close to the very realities.

Now, think again about the fundamental difference betwee GFI and AA(Au).

mikal@misetich#1201024/19/04; 13:09:26

Re: higher output leading to lower oil prices, I believe Saudi Arabia hasn't as much room to swing output as many believe because of declining reserves and public opinion, and the competition from Russia. It could cause more internal or regional dissension and instability if the secular Faud is seen acting to support Bush and mismanaging the dwindling oil reserves.
And such a move could actually play AGAINST Bush vs Kerry by removing the OPEC boogie-man and that leg of Bush's war argument.

melda laureBegian: Does control mean subsidy?#1201034/19/04; 13:18:32

A business still needs profits to survive and grow, even if the state excessively regulates it. Or are you saying (as I have speculated) that extraction will be SUBSIDIZED in the future? (Of course SA already has some subsidies built into the legal framwork, special tax treatment, weak rand policy, etc.)

"Transparency is a nice thing under the condition that one does see "exactly" what one should see ! I see the coming FreeGold and indeed the coming complete subordination (National and International control) of goldmines that may call themselves wealth-diggers in the future. Not the $-paper-goldmarket will exercise goldmine control but the state in wich they are located."

CoBra(too)Goldmining!#1201054/19/04; 13:37:45

@ Belgian - re your 120083 - may be correct in many ways, though I feel you're dumping the baby with tub.

There always have been some producers, adverse to hedging and meantime the market was punishing the hedgers quite severely compared to their non-hedging peers.

Of course, if one sees the future Armageddon of the Dollar Reserve System, as we all do on this site, your statement make total sense. ... And it will happen, though maybe not tomorrow. Nor the day after, but more gradually and as we've been observing lately.

Never-the-less, if it would be that easy we'd all be heros overnight. As life may be proving to be a bit more complicated and diversified the sophisticated investor may take the approach of building a physical gold (and some silver) portfolio as its core holding ... and add to it any time on pullbacks, as the most recent one has opened another opportuninty. No markiet, ever, will advance in a linear fashion.

And in the end no market will exhibit its own destruction, without putting up a fight to prolong - even the charade.

To come back to my beginning, my friend, there are some very legitimate gold companies out there. Companies, surviving the 20 year barrage of the Western CB's, and not succumbing to the easy route out, by going IT or other idiotic venues. Even, if you may argue that gold in the ground may be subject to taxation, nationalization or any other unpleasant feature of demagogue politics, so is any other venture.

All of which may bring us to the real question of the nature of capitalis'm vs socialis'm or even communis'm.

... And if your thesis is correct, which eventually it well may, then GOLD will really be the only solution to outlast the system - not intact, though relatively better off than the rest of the globe - in terms of protecting ones wealth, as not so much value. - Real values of civilization will be lost once more.

I think, finally that a balanced portfolio - depending on where you reside on this globe - is still the way to go; I also think, that all should have a healthy core holding of physical PM's according to their own needs.

Thanks for reading and please don't take this as a critique to Belgian's great posts ... as there may be a bigger world out there to paint black and gold - solely ... cb2

PS: Posted without re-reading - as I prol'ly wouldn't have otherwise - so forgive me for rash conclusions...

mikal@misetich#1201064/19/04; 13:52:11

Re: "Is Bush following this 'roadmap'? Is OPEC under attack?
From the story posted earlier today: "The Saudi Connection":

"It wouldn't be the first time Saudi Arabia has used oil as a political or diplomatic weapon, most notably during the embargoes of the 1970s that brought gasoline rationing in the U.S. More recently, the Saudis increased production to ease oil prices at the start of the Gulf War in 1990 to support the first Bush administration in its effort to turn back Iraq's invasion of Kuwait. The Saudi royal family also has close ties to both the first Bush administration and to political allies of the current Bush White House, according to Craig Ungar, author of "House of Bush, House of Saud: The Secret Relationship Between the World's Two Most Powerful Dynasties". "It is a relationship that goes back generations," said Ungar, who says he's tallied some "$1.4 billion worth of contracts from the House of Saud to companies in which the Bush's and their allies have had big positions. "

It seems like the House of Saud is too deeply entwined with common western interests to be expendable.
And perhaps OPEC is already enlisted in the "war against terror".

glennh10Real estate (RE) "bubble" ?#1201074/19/04; 13:57:25

These are some passing thoughts on the real estate market.

An abode or just a working asset?
A house can be an abode. But, many buyers/sellers are in the market strictly to turn a quick profit. I learned this the hard way, when I bought my "abode" in 1991, and the market value dropped 50% in 3 years. I was naive, and I didn't notice or pay attention to clues about the RE market. When the market's "hot", many people will often buy up properties purely as investments, never living in them, and perhaps never even renting them out, with the hope that they will be able to (quickly) sell at a handsome profit and then repeat the buy/sell process over again, as long as the market remains hot. Sometimes, they paint a place, or fix it up a bit, or they may do nothing but wait (hoping for a fast appreciation to sell into). Everybody expects to turn a profit. The hotter the market, the more certain they are about this.

Keeping up with the payments.
As far as mortgage debt, given a fixed mortgage rate, it is certainly the case that the mortgage should be easier to pay off with depreciated future dollars, including any equity cash-outs. Of course, for those who took out a variable-rate mortgage, this advantage doesn't exist. Also, many people have bought the "most" property (mortgage debt) that they could afford to pay monthly. Their being able to sustain even a fixed monthly mortgatge payment is dependent upon their other expenses also remaining constant, unless their income also increases. The way things have been going, costs are going up, while wages are stagnant, and the job market (for good paying jobs) is very thin. So, even a person who has a fixed rate on their mortgage still has to contend with the other side of their life's expenses, which is, at best, an unknown. And, from what I've been reading on this forum as well as in the economic news, the fate of those uncontrolled expenses is not really so "unknown".

Construction costs are high.
Constuction costs are up because (1) raw materials are more costly, and (2) there's currently increased purchase demand (seller's market). If the RE market slows, construction will slow with it, along with the demand for raw materials for building.

From the way it looks, the RE market might be due for a correction. One thing is for sure. If/when interest rates rise, the current appreciation rate for RE will fall. Whether to call today's RE behavior a "bubble", a "mania" or not is not so important. At this time, I just notice the current fundamentals - of RE, of the economy, and the FRN "dollar", against the current status and fundamentals of gold and silver.

Melting PotFrpm BEP: Legal Tender: A Definition#1201084/19/04; 14:11:21

Section 102 of the Coinage Act of 1965 (Title 31 United States Code, Section 392) provides in part:

" All coins and currencies of the United States, regardless of when coined or issued, shall be legal tender for all debts, public and private, public charges, taxes, duties and dues."

This statute means that you have made a valid and legal offer of payment of your debt when you tender United States currency to your creditor. However, there is no Federal statute which mandates that private businesses must accept cash as a form of payment. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise.


TownCrierVisit afternoon for closing day updates#1201094/19/04; 14:17:22

Also, visit any time for our 24-hr Newswire breaking news.
Socrates964Belgian#1201104/19/04; 14:33:22

Well, on this occasion, I think I shall respectfully disagree with you, much as I esteem your valuable insights on other golden matters.

I will merely say that crown jewels are not made of paper and that if you want to extend your analysis even further, you should ask where the unrefined gold lands. LOL!

Avec mes sentiments les plus distingués,


TownCrierTo Jacob Marley#1201114/19/04; 14:44:18

Wanted to let you know you are on the receiving end of a one-person standing ovation for this observation:

"My point is to say, "Look at the fundamental design of this thing [i.e., derivative, paper gold market]. It cannot be a vehicle for a free gold price, even if it wanted to. So, those looking for the moonshot in their leveraged paper, are not going to be satisfied. Any angle that can be worked will be worked, and it will be worked to the limits of the envelope."


CoBra(too)Bicentennial Silver Proof Coins -#1201124/19/04; 14:57:34

Just came across a beautiful Silver coin set - by way of moving - and, yes it's beautiful and yes it was minted back in 1976.

Reading the text of the beautifully cached 3 set coins - it hit me - as the nation's 200th. anniversary of independence was also celebrated by a silver coin set of "40% proof"!!!

Poof - not pop goes the weasel ... as 40% may have been adequate in 76 ... what percentage would be adequate today?

Oh well the markets will eventually ZERO in - cb2

USAGOLD / Centennial Precious Metals, Inc.If it's a filled board you'd like, click or call without delay -- only 4 remain!#1201134/19/04; 15:26:51">country collection of gold
TownCrierProfitability is geographically specific, dependent on the relative dearness of the local workforce wages#1201144/19/04; 15:41:07,2106,2879902a6026,00.html

Where and whether a venture goes forth can often depend on situations in which a group can be enlisted or exploited to labor at pennies per hour whereas labor rates of the eventual consumers elsewhere are orders of magnitude higher per hour. Note: These things can change, as shown below with South Africa's appreciating currency, the rand.


HEADLINE: Strong rand hurting S African gold mines

20 April 2004, PERTH: Up to 30 per cent of South Africa's gold mines were likely operating unprofitably due to unfavourable exchange rate movements in the rand, South African miner Harmony Gold Ltd said yesterday.

"Probably on total cost somewhere between 20 and 30 per cent of mines are unprofitable," Bernard Swanepoel, Harmony's chief executive, said...

While US dollar-denominated gold prices have risen 43 per cent since January 2002, bullion has lost 17 per cent of its value in rand terms.

"If gold was at $US500 an ounce none of us would be squealing about the exchange rate."

Mr. Bill@cbduos .... or is that Spanish#1201154/19/04; 16:53:07

40 proof is my favororite number.
Cavan ManTown Crier#1201164/19/04; 16:56:22

I am a staunch physical gold advocate but I tell you if I had made the same commitment I made to mining shares as I have made to physical five years ago next month I would be retired now. I also might be broke but that is Another story.
SMUBush - changing your world#1201174/19/04; 18:44:15

"This is the first time since the National Archives and Records Administration was established as an independent agency that the process of nominating an archivist of the United States has not been open for public discussion and input."

From G. Orwell's 1984:
"And if all others accepted the lie which the Party imposed—if all records told the same tale—then the lie passed into history and became truth. 'Who controls the past' ran the Party slogan, 'controls the future: who controls the present controls the past.'"

R PowellTownie // Jacob Marley#1201184/19/04; 18:58:09

As to these ghostly words....

"My point is to say, "Look at the fundamental design of this thing [i.e., derivative, paper gold market]. It cannot be a vehicle for a free gold price, even if it wanted to. So, those looking for the moonshot in their leveraged paper, are not going to be satisfied. Any angle that can be worked will be worked, and it will be worked to the limits of the envelope."

I'm afraid I'll have to echo Cavan Man's sentiment. Although satiated with danger, the leveraged paper market can be very profitable. Perhaps populated with more losers than winners, but not by any means guaranteed to be UNsatisfying for all. All to often it is assumed that paper gold investors are looking to obtain physical metal. The vast majority (almost all!!) are NOT. These are leveraged paper games wherein the winners collect in fiat credits. If you want physical, CPM is the place, not Comex.

Cavan ManHi MK#1201194/19/04; 19:14:57

If you are considering another conterst perhaps the subject of the essay(s) might be Tony Blair: Why Euro; why now? I only wish FOA were here to comment.
Cavan ManHi Rich#1201204/19/04; 19:16:14

I wasn't kidding about the retirement thing. Back to boxes...CM
Cavan ManBTW Rich....#1201214/19/04; 19:17:46

I had a cocktail with your brother one night in the company of Bill Murphy and Ian McAvity. What a fine group of guys!
R PowellCavan Man#1201224/19/04; 19:46:26

Brother? No...that's cousin Chris.
ToolieArmenia sells its gold reserves#1201234/19/04; 20:39:31

Snip: The Central Bank of Armenia's board decided to sell the reserves because of the high liquidity on the gold market over the past few years, the Bank's press service reported. "The high correlation between gold and the euro means that even without gold in international reserves the necessary level of diversification can be maintained and at the same time the yield of international reserves can be raised," the Bank said.
Thanks lasvegasgold5

DruidWhy Is Europe Now Breaking Into Its Gold Vaults?: Matthew Lynn #12012404/19/04; 22:05:35

April 19 (Bloomberg) -- Gold has always attracted its fair share of eccentrics. More than any other commodity in the financial markets, it has provided a haven for oddballs and conspiracy theorists.

Right now, they can have a field day. Something strange has been happening in the gold market. Europe looks to be bailing out of the metal as gold prices soar and politicians squabble with central bankers over how to make use of the proceeds.

In France, the new finance minister, Nicolas Sarkozy, is arguing for the Bank of France to sell some of its gold.

A hundred metric tons of gold is worth about 1 billion euros ($1.2 billion), which would yield from 35 million to 40 million euros a year if the proceeds from the gold's sale were invested in assets earning interest, Sarkozy told lawmakers in France's lower house of parliament last week.

The bank's governor, Christian Noyer, has already said he will decide before October whether to start selling as much as 100 tons of gold annually, and invest the money instead in assets yielding interest, according to the French newspaper Le Parisien.

It sounds like Sarkozy has already made up his mind.

In Germany, Ernst Welteke resigned as Bundesbank president on Friday after being embroiled in a row over a hotel bill in Berlin. Behind that may be a disagreement about Germany's gold reserves. Welteke's son, Hans, has claimed his father argued with German Finance Minister Hans Eichel over how to use the money raised from selling some of the country's gold reserves.

This year, Welteke said he won an option to sell 600 tons of gold or as much as 20 percent of the country's reserves over five years. The Bundesbank has disposed of only 29 tons of gold coins since 1999.

Druid: Not one word about whom might be buying all this gold. It's complete mindless hack jobs like this that lets me know that I'm on the right "trail".

Gold does not need to earn interest because it has value all its own. Its value is derived as an inverse of interest paid out over time for the privilege of using a "progressive" fiat money system.

Its value is a function of undisciplined monetary and fiscal policies implemented by governments the world over and throughout antiquity over several points in time.

We are at just one of those points in time and the real genius of our current "progressive" monetary system has been the ability of our chief architects to build an entire financial house of cards and complexity between 1 and 0 and have it last this long. Yes we are approaching a limit the closer we get to zero but give the Magi his due.

Bonds, currencies, stocks, options, futures, derivatives, etc...Each one of these perceived stores of value can be inflated to trillions upon trillions of dollars or better yet infinity. The technology (printing press) or math has never been or is not the issue, what is the issue is the realization of what is real and valuable and what is not by those who deal in these paper instruments. I certainly understand the thrill of the quick score but wouldn't delude myself into thinking it represents a lasting store of value.

The gold and silver commodity paper positions are the catalysts to a massive chain reaction. The longs are looking for the quick and bountiful score and hope, or maybe not, that it can outpace any kind of real massive inflation which could be set off by such an event thereby consuming the take in the heat of fire. Meanwhile, the shorts are the system and are doing an admirable job in defending it printing press and all. Two very different objectives. Truly, a battle of attrition and realization.

SmeagolArmenia#12012504/19/04; 22:06:19

...but... to who, precious, to who? Sseems no matter who sells It they never says who's buying... if indeed they are in fact actually 'sselling' It at all...sss...

...jusst being our sskeptical self...


Smeagolproofs#12012604/19/04; 22:13:35

...sss...Smeagol can say we ssold a ton of It, too. To who? None of your business, precious. Indeed. Unless there's a receipt, or ssome other evidence, where's the proof? With all the 'creative' accounting methods in use today, sseems almost anyone can make a book entry... for anything...


bugs...#12012704/19/04; 22:37:43

"CoBra(too) (4/19/04; 14:57:34MT - msg#: 120112)
Bicentennial Silver Proof Coins -
Just came across a beautiful Silver coin set - by way of moving - and, yes it's beautiful and yes it was minted back in 1976."

right on. you work on the shopping channel 2am yes?


Ag MountainCavenman, HA HA HA HA HA HA HAHA!#12012804/20/04; 00:47:44

I don't know to call this hubris or self deprecation! You said, "if I had made the same commitment I made to mining shares as I have made to physical five years ago next month I would be retired now."

Sure, but what you're forgetting to say is five years ago most miners were at their bottoms. Take some advice from someone who knows because he's actually done it instead of Monday-morning quarterbacked it like you're doing. If you hadn't been so precise in your timing made your actual commitment to the miners seven years ago instead of five, you'd probably still be in the red if you bought and held your assorted mining shares like me. Some are barely up and some are still way way under. If you tried to beat the market trend by trading in and out on price volatility you could be better or worse off depending on your run of luck.

The charts will tell you that the same losing commitment seven years ago if it had been made in physical instead would be up 15-20% on a pure buy and hold, depending on the week you bought it because gold moved pretty fast around that time period between $350 and $300.

The lesson is that an actual entry point and the actual exit point can make a huge difference, and from a perspective of hindsight on the first (entry) point or a position still in play with respect to the latter (exit) point you don't have any rights to boast or to beat yourself up over what-might-have-been. The simple truth of the matter is at any given time you have money worth such and such, you have shares worth such and such, or you have metal worth such and such.

Coulda woulda shoulda is a game we eventually learn to leave on the playground.

The first couple lines of Druid's bloomberg article is sort of what I was talking about the other night. Which reminds me, I've thought of a couple more telltale terms for my oddball identification list. "honest weights and measures" and "real money" and also "goldilox" judging from his hyperdefensive response to the original list.

BelgianFreeGold versus any papergold....#12012904/20/04; 01:02:43

As long as FreeGold isn't amongst us, papergold speculation and gambling has a reason to exist and be played with. No perspective for FreeGold simply means that the world decided to remain on the Gold status quo. Then Gold, the goldmarket, remains in the grey area.

It is not that long ago, that we started to realize to what extend, Gold is under control and today we see rising controversy about things golden...not the paper but the Physical (CB sales). But the perspective of FreeGold, seems that one Big "logical" step too far !? We accept that Physical Gold is controlled by papergold and still prefer to speculate with that same controlling paper.

FreeGold, will/shall make papergold as dry as leaves in automn. In order to establish a Physical FreeGold market, the controlling paper-instrument must become absolutely ineffective/useless. Physical Gold Free from its paper chains.

Goldmines and FreeGold : If and When FreeGold becomes the universal expression of WEALTH (official and private), the goldmining "status" will be changed, completely. You will be holding shares of underground central banks. And have a chat with those that were (are) holding shares of a central bank, about what is happening with these shares !
All these shareholders are at the mercy of the CB.

Will/might FreeGold be a black or white situation ? No, not entirely...there will always exist a grey area as compared to illegal drugs-trade.

Under a FreeGold regime, all underground Gold will be classified as WEALTH and the status of any miner of that GoldWealth will be changed under International law. There will be outlaws (plunderers), of course. Just look what is happening with geopolitical fights about the remaining oilreserves.

FreeGold will make Gold a zillion times more important than it already is. The consequences for the remaining underground gold will be enormous. This underground gold will get new owners and almost all the miners will become CB employees (and CB shareholders).

In other words : *What* IS FreeGold and does it make a chance !? We, goldphiles, are still analysing and trying to "understand" how the present goldmarket evolved and "what" kind of market it is. That's maybe the reason why a FreeGold perspective seems so remote or totally excluded !? We prefer to remain comfortably (complacently) in the Gold "grey" zone !!! Nor fish nor flesh.

And...isn't everything being to keep us in this nomandsGoldland !? Recent Bloomberg article for instance !?

How convenient is it to exclude FreeGold by simply hammering on CB-goldsales, ad nauseum !!! Or let us evidence, daily, how idiot any idea of future FreeGold (Physical Gold Wealth) is, simply by showing how many, made and are making, millions (billions) with paper, derivatives, stocks, goldmine stocks, etc...

Are we the perfect "timers" on the transition from old *dollar-reserve-standard* to new *FreeGold Wealth Asset* !? The more I hear about so called goldsales, the closer we are to the above transition, imvho(interpretation), of course.

Point is, that all initiatives towards FreeGold must remain "frustrated" by those that "pretend" to keep supporting the dollar-reserve-system !
Yes, the runup towards the transition goes gradually...but then there comes the day of the Big kaboom. As the London Gold pool was to 1971-Change !

WHO'S AFRAID OF FREEGOLD ? A smile to all of you and many thanks for keeping provoking our thoughts.

GoldiloxHyperdefensive#12013004/20/04; 01:22:54

Ag Mountain:

I personally reserve the use of "hyper" for extremes. My post was a long way from "hyperdefensive". In fact, not nearly so defensive as your posts have been personally OFFENSIVE to many other posters. Everyone who disagrees with you is a superlative "something". I try not to build myself up by denigration of other posters. Perhaps someday you'll outgrow your flinging of epithets and attempt the art of discussion.

Ag MountainGood grief.#12013104/20/04; 01:39:15

Belgian, that was so crystal clear I'm afraid you may move the market single-handedly if the word gets out. Nobody should be dragging their feet if they still want to be sure to get way too much gold for their money.
Ag MountainWell, there you go again, goldilox#12013204/20/04; 01:58:48

Did you see this that Druid put up a couple hours ago?

April 19 (Bloomberg) -- Gold has always attracted its fair share of eccentrics. More than any other commodity in the financial markets, it has provided a haven for oddballs...

Like I tried to say before, I don't think the gold sector has any more than the average share of oddballs, I just think they are a lot easier to identify thanks to their hunkered down posture while working on their grip exercises for their cold dead hands because apparently they'll "beholden" real money if they aren't too busy muttering incomprehensible things about the gubmint, the fraud of fiat, and a cabal of banksters plotting a new world order controlled by the UN who can enslave anyone lacking an understanding of honest weights and measures.


Ag MountainIn case it's tough to tell while sandwiched amid the tussle with quirky goldilox#12013304/20/04; 02:05:07

My note to Belgian was very sincere. It maybe looks like the subject "good grief" is meant to be sarcastic, but I meant it as a compliment for a really effective post. Like, "Good grief. My time to buy gold is running out and you're there gunning the clock."
BelgianWealth versus paper/digits....#12013404/20/04; 02:20:10

The reason why the notion of "wealth" has been mothballed, lies in the hyper-inflation of all papers. And today, we keep going paper/digits to such an extend that Physical Gold has become unvisible for the main (western) public.

We are not "facing" but "living" in a paper cosmos. Yes, it is as dramatic as it sounds...for those few that still have that correct notion of what wealth really IS. Not the wealth of good health, happiness or a long colored life, but the tangible wealth of Gold.

Why must any paper-system inflate itself "Permanently" ?
A. : As to prevent the exchange of those paper-illusions into fully paid for tangibles. This gigantic paper-culture is like living on a debt-boat that is constantly half sinking but remains half floating through constantly adding new, dry paper to it. This is the translation of inflare,...making it bigger, more impressive, irresistable, all embracing, incontournable,...etc !

We are increasingly becoming "debt-merchants". Stone drunken Inflationists in all aspects !

The inflationists know where we stand and that's the one and only reason WHY Gold's price is obscenely undervalued ! They know that hyper-mega inflation (proliferation) of all paper/digits, automatically breaks open the FreeGold trail. This natural, temptation must remain blocked.

Those who are challenging this inflationary cosmos, do this with Gold teasing. They accumulate Physical Gold in Possession, with a mysterious (compassionate) smile on their face. This stealth Gold-Accumulation is proportionate to the increasing noise (à la Bloomberg) that is made about gold-sales.

Not, why do they hate "us",...but why is (physical) Gold that much hated and permanently ridiculed proportionate to the extend of general paper inflation.

We cannot dis-inflate anymore ! The only option that remains is further hyper-inflation (of all paper), whilst FreeGold (the Giants) approaches for knocking on the door of the virtual cosmic paper castle.

Ask yourself why the stockmarkets aren't, cannot, dis-inflate and reflect the *real worth* of the global economy ?
The "real worth" of everything (including Gold of course) is being "masked" on an enormous scale. We are living under the hegemony of pricing-rulers and lack real valuators !

We are actively being paperized to the bones. Amen.

TopazNowhere to turn!#12013504/20/04; 03:27:10

Well, there seems NO acceptable move from here. Oil can't rise, Gold can't drop, $ and Yields can't rise ... all the ingredients for a Monster move and your guess is as good as mine!
SundeckPlatinum too pricey for China's jewellery market #1201364/20/04; 04:40:48


Perth - Jewellery made with 18-carat gold was becoming the adornment of China's burgeoning consumer market, replacing more expensive platinum, a gold industry lobby group said yesterday.

"Platinum prices have risen sharply this year, making gold increasingly attractive for China's new consumers," Albert Chang, the managing director of Far East for the World Gold Council, said on the sidelines of the Australian Gold Conference.


Of the 207.6 tons of gold consumed in China last year, all but six tons were sold in jewellery form, Chang said.


The shift to gold would help support China's gold mining sector, which last year churned out 200.6 tons of gold, making it the fourth-largest producer behind South Africa, the US and Australia, Chang said.

Sundeck: Wowsers! Gold ... poor man's platinum! (Silver...even poorer man's gold.) Looks like China is almost self-sufficient in gold (at least at face value, as far as jewellery is concerned.) Interesting to see if demand rises with rising disposable incomes.


SundeckUS Gold Jewelry Sales Rise 2.5% In 2003 #1201374/20/04; 04:50:41


Gold jewelry sales in the U.S. last year rose by 2.5 percent to total $16.3 billion despite a background of political uncertainty, a weak dollar and rising gold prices.

The increase is the thirteenth consecutive year of gold jewelry sales rises, the World Gold Council (WGC) reports.

Higher gold prices don't seem to have affected US sales...


a nation of onebiology#1201384/20/04; 06:19:03

If they weren't afraid that a lot of people might think
that goldbugs are not nuts, nobody would be saying that
they are.

HenriBelgian Msg 120129#1201394/20/04; 06:49:03

I see what you are saying and it is what FOA had predicted would happen. I'm trying to get a handle now on just how this will be pulled off. In the case of Barrick, I can definitely see a central Bank takeover as they are very "deep"ly into forward sales. In fancy (my own), the Barrick in ground reserve may actually be the repository of the US Peoples "deep storage gold" if that does turn out to be the case, the Fed can claim it, but the US govt can claim it back in the name of the "people" and disband the Fedunreal reserve. Such is the "political" power of gold.

In the case of say Newmont, which has much less of a forward sold position and is closing it relatively quickly, what point of leverage would say the Fed have or the US treasury, to pull a BIS move? I don't quite see where they have any purchase to force a seizure of asset other than outright nationalization. The predictions of FOA/Another came from a time when miners were heavily into the central banks...from that position, I could actually smell the smoke of take-over. In the interim, many large miners are consolidationg into multinational entities with little or no forward sales.

When gold WAS the medium of trade, they did not nationalize gold mining companies. Why would they this time when digiat is the major "currency".

Those that run things are going to be the owners of these shares and probably already are. Why would they turn them over and the potential for tax exempt dividends in metal when they themselves would be the losers? I am thinking they would much rather use Free Gold to ban any encumberment of gold/cash distributions to shareholders...but then again I am prone to fits of dementia

GoldiloxNow it's "quirky"#1201404/20/04; 08:30:31

Ag Mountain:

Still calling names lke a nine year old.

Let's see. Epithets followed by 200 word run on sentences. Nothing "quirky" about that. At least it's civil, for a change.

There would be no tussle if you stuck to opinions on the subjects and stopped name-calling.

GoldiloxNationalization#1201414/20/04; 08:40:14

@ Henri:

Nationalization is probably the last thing on the minds of CB's. More likely, CB sales allow the highest net worth individuals to accumulate golden insurance to position themselves for any potential paper collapse, advertised as reorganization.

The huge political messes in history have always led to some "reorg" that is translated to "collapse" generations later. World leaders have been demonstrating their "future vision" to look less and less farther forward.

Puplava's "looming serfdom" view is the best support for this scenario that I can think of currently.

KiloAg Mountain - ".....worth such and such...."#1201424/20/04; 08:53:01

Recently had an old friend visiting and was showing him through a group of Krugerrand, Maple Leaf, U.S. Eagles, and other misc. gold coins when curiosity got the best of him, and he wanted to know what all that gold was "worth". I knew where he was trying to lead me, so gave him the old side-step just for the frustration factor...... :)

"What is all that gold worth?"

"Well, at present, this 165 ounces is worth precisely 165 ounces..... no more and no less."

"Huh?...... no, I mean in dollar terms."

"Well, to me, gold is worth more than any dollar terms you can put on the metal these days, simply because there is much too much paper representing far too little gold in the world."

"OK, yeah..... I think I got ya. But what if your gold is worth $400 an ounce one day and $350 an ounce the next."

"Well, in that case, how much gold would I still have?"

"165 ounces."


CoBra(too)Nicely put Kilo!#1201434/20/04; 09:04:59

... and these 165 ounces add up to a few Kilo - worth its weight in value.

Thanks for the post - cb2

Cometosecharts#1201444/20/04; 09:15:37

I was looking at a chart of calvf and ambled onto this ...
I find it quite interesting to note the last time the on balance volume crossed it's 20 day moving average ....

As you might figure the Nasdaq obv choked it up some time ago but the S&P seems to be crossing over during the more recent past........,uu[l,a]wacanyay[p][vc60][iLa12,26,9!Lg]&pref=G$SPX,uu[m,a]waclyyay[pb50!b200][vc60][iUa12,26,9!Lg]&pref=G,uu[/ url][p,a]waolyyay[d19900721,20041231][pb50!b200][v

On the S&P chart there are two funny little blue and red lines coming together ....I'd be getting the willies if I were a mutual fund manager right about now ....

and in light of those funny blue and red lines superimposed on the S&P graph , I'd have to wonder where all the money is going to go that started the infltionary bubble that the last year in the SM represents......(when I say inflationary ; i'm talking about the process of inflating as in blowing up a baloon....) That money simply has to go somewhere...VALUE.....I wonder if Adam Hamilton's Relative GOld or Relative HUI numbers are any indication of REAL VALUE NOW SITTING DOWN NEAR OR UPON THEIR 200 Day MOVING AVERAGES....HMMMMMMMMMM!!!!!!!!!!

If I were a MUTUAL FUND INVESTOR and MY MUTUAL FUND MANAGER wants to keep fully invested the Market , I would recommend to my MANAGER TO FILL THE BOAT WITH THESE UNDERVALUED METALS COMPANIES ON THE HUI and buy METALS FUNDS>>>>>>>>> THE WHOLE SECTOR HAS BEEN OVERLOOKED SOMEWHAT LIKE THE OIL SECTOR OF LATE >>> IT LOOKS FAIRLY RISKLESS TO ME> You know what they say about diversification.......HUI (HOOEY!) is what I say . THEY SHOULD PROBABLY ALSO LOAD UP ON RYDEX SHORT INDEX FUNDS AS WELL....I think that's the only way to protect yourself and your client today from the RISK THAT IS OBVIOUSLY ALL AROUND THEIR MONEY........Instead they going to do what they are told to do while shadow company is in the back room borrowing on Margin and shorting the indexes on behalf of the Banks and the Large Brokers........
How cynical am I ....I'm sorry I can't help it....
You may bet your money that some of the winnings that the Bankers and the Big Brokers make on the downside is going to find a home in GOLD AND SILVER COMPANIES.....
and OIL , and other Commodities related Cos.

Cometose@ Henri#1201454/20/04; 09:29:42

You've captured something here HENRI...

Its your spelling of "FEDUNREAL" Reserve......

It has FUNERAL encased in the Set.............

Cometosegapped up on the opening#1201464/20/04; 09:42:10

Today is the third time in 4 weeks that the DOW gapped up at the opening ........the other two times this occured , I believe that the Dow closed down for the day .....
Last week I'm pretty sure it closed down hard...on the day that it occured...It will be intersting to see what today's close brings .

USAGOLD / Centennial Precious Metals, Inc.Diversification is a POSITION, not a PRICE. Are you diversified? We can help you get there.#1201474/20/04; 10:51:42">Change paper into gold!
nickel62Inflation.....A great article from last December..very timely now...#1201484/20/04; 14:53:12

Inflation: The Grand Illusion

By Sean Corrigan

[Posted December 29, 2003]

Inflation tends not only to pressure, but to increase, the maldistribution of labour between industries, which must produce unemployment as soon as the inflation ceases. F.A. Hayek, Open or Repressed Inflation, 1969.

The failings of the Macromancers who dominate contemporary economic reasoning can be encapsulated as follows: if you can't leave the house because the trousers Granny has bought for you are too long for your legs, you can solve the lack of fit by trying them on while standing on a chair.

To explain what we mean by this, let us start by conceding that both Keynesians and Friedmanites—as well as the majority of their derivative sub-cults—realize that if there is a seeming surplus of labor, it is because it must be priced too high in relation to the value to which it will give rise.

Being politically cynical enough to presume that reducing labor rates in money terms is more problematic than making the money in which they are paid worth less, the recipe for any business setback is thus the application of a little judicious inflation. This doctrine is now so well ingrained that the Norges Bank of Norway recently stated proudly that its policy aim was "higher inflation" because the prevailing rate was "too low."

This simplistic, aggregative approach overlooks at least one critical fact: a general rise in prices carries no guarantee that a struggling firm—which, presumably, is struggling only because it has misjudged the relationship prevailing between resource costs and consumer preferences—will right itself, any more than the act of flooding a lock can be reckoned to right the capsized dinghy floundering inside it.

Aside from that particular inefficacy of the inflationary cure, we also have to contend with the other difficulties to which inflation gives rise—among them the invalidation of already faulty entrepreneurial calculation, the disruption of many entrained production processes, and the implicit frustration of contracts between lenders and borrowers, and savers and investors.

Of even more immediate concern is this: While we know a new inflation will build its usual distortions under the veneer of a temporary prosperity (mostly localized among those favored to receive the first use of the new means of payment), we remember also Hayek's point that those dependent on the artificial stimulus of inflation for their continuance will become so addicted to it that they will sicken and die if that inflation slows or is redirected.

To date in this so-called "jobless recovery," US-driven inflation has, in fact, succeeded in leading to more labor being hired. However, to the collectivists' dismay, the new labor is largely in China, where the labor distribution is better adapted to US spenders' needs and where total relative labor costs are substantially lower than they are in the US.

In this, US consumers—sustaining their lifestyles not from sufficient production of exchange value, but by using borrowed money they have not earned—have been exhausting the fruits of others' labor via the consumption of present capital and the alienation of future income. Neither of these trends can be maintained indefinitely in real terms, though they can be monetarily disguised for long enough that the damage can become severe before it is fully recognized.

When their Chinese suppliers were saving a goodly proportion of these proceeds and buying US securities with them, the secondary beneficiaries of the inflation, thanks to this act of misguided largesse, worked in the US housing market and in what Robert Higgs calls the Military-Industrial-Congressional Complex. Thus, America's homebuilders, realtors, mortgage lenders, government contractors, and its legions' sutlers and armourers all did well at home.

Further, the inflation made service providers such as banks and insurance carriers, with their less open markets, all the more lucrative, while poor old manufacturers were made simultaneously to bear increased costs at home and heightened competition from abroad.

Manufacturing real wages—which should be gauged against the industry's specific value output rather than against an arbitrary overall price index—therefore had to fall, in toto, if not for each individual worker who managed to retain his job. This was not least because nonwage costs were also being driven rapidly higher by a combination of ongoing inflation, extra regulation, legal jeopardy, and the removal of the former (inflationary) subsidy that found its expression in artificially low, float-hungry insurance premiums and the seemingly miraculous self-funding pensions enjoyed during the millennial stock bubble.

Now, however, there has been a subtle shift. China, at least, is saving much less and spending much more of the money. Hence, commodity prices are up while the dollar is down sharply.

Those businesses serving Asia's new retail clientele and its emergent yuppies—as well, some allege, as those serving China's own MICC hierarchy and its members' desire for strategic stockpiles—are now the redirected inflation's main beneficiaries, rather than the importunate US householder.

For China's booming industrial concerns—and, by extension, for their Asian suppliers and investors—a triple threat may emerge from this transformation:

a policy of deliberate central bank restrictionism, instituted in addition to the likely slower acquisition of those dollar foreign exchange reserves that have so boosted domestic money supply this far;
the burden of higher import costs due to the renminbi's link to the sagging dollar (though a partial subsidy is being granted by the currency interventions of such players as the Bank of Japan);
greater competition for labor and capital resources from domestic consumer industries whose customers' requirements may, furthermore, be widely misaligned with the tastes of their international counterparts who have been so well served until now.
The corollary to all this is that, as the dollar falls, there will be an initial boost to some—though not all—US industries. The greenback's decline should be particularly beneficial to those firms that are relatively sparing of energy use and that do not include a high degree of import content (whether raw materials or components) into their own final products.

Whichever industries best represent the various categories, certainly there would now be scope for the creation of a marginal extra incentive for employing capital and/or labor in the US, as opposed to sending it all to the coastal entrepots of the South China Sea.

So, with the effects of US inflation having the potential no longer to be so disguised and indirect as when it formerly underwent an interim Asian transformation, housing and finance may both suffer—at least, in the absence of a more concerted effort on the part of the Fed to take up the slack (not to be ruled out, of course!). Conversely, makers and sellers of manufactured goods might find the cost-price balance tilted a little less heavily against them from here onward. Indeed, manufacturing has shown tentative signs of stabilization of late; sales, hours, and head count have begun a slow ascent, and even inventory registered an uptick last month.

What would be notable, as a corroboration of this development, would be to see an increase in short-term borrowing to fund greater working capital needs. Even more heartening would be evidence of a continuation of the 8-9% year on year gain in aggregate operating profits reported by Commerce last quarter, especially were these to be accompanied by more than the anemic 3.5% sales increase also registered, since such a paucity of sales growth speaks more of a successful adjustment to straitened circumstances than of the onset of a genuine expansion.

Still, if we know what to look for in manufacturing, if present trends continue, what then of the wider economy?

Here we need to step back a little first.

In the classical model of a cyclical recession, there is little extension of consumer credit, but the inflation of the prior boom works, through producer-directed funding instead, to induce a top-heavy and ultimately unsupportable productive structure. The increased worker incomes earned here, as a result of this false investment, soon begin to be used to bid for consumer goods—goods whose supply no one has had the foresight to increase and thus whose prices inevitably rise.

Such higher prices for end goods then induce those who can to shift to the business of making them, leaving the hypertrophic higher-order goods firms stranded between the rock of underestimated costs and timings and the hard place of overestimated resource availability and end demand for their products.

Incomes now fall as profits and payrolls in these firms dwindle again. Prices and wages adjust to the new mix. It should be recognized, though, that if some firms are forced into liquidation as a result, others find they can still make a handsome return satisfying the needs of their customers. The wily investor will remember that the manifestation of mass entrepreneurial error that constitutes a bust cycle does not preclude occasional individual entrepreneurial success.

Any emergence of an excess of consumer goods will hence signal both the means and the opportunity to defer immediate production of yet more of these goods in favor of employing the monetary savings made possible by the fall in their prices to make new, more rational investments. At the same time, these surplus goods' existence conveniently provides the means necessary for the entrepreneurial object of this investment to feed and clothe his newly-hired workers until the workers' own output matures, in turn, as a batch of future consumption items.

Instead of this archetypal scenario—and ignoring all harmful impediments cast in the way of this healing process by the ever interfering State—we currently have the bizarre modern phenomenon of the further discoordination caused by the wild orgy of debt-financed consumption, which has been officially promoted to keep aggregate spending and arbitrary price levels unconscionably high throughout the recession. This is analogous to expecting that wrapping a corpse in an electric blanket to delay rigor mortis will also bring about a resurrection.

For now, instead of higher prices making a recalcitrant labor force cheap enough to re-employ, a la Keynes, these prices will instead decrease the incomes out of which people already are struggling to service and pay down their towering debts. Additionally, this bind will be made all the more constraining if nominal interest rates—at least those set by the market, rather than the ones suppressed by the Fed—also rise in response to the signs of renewed activity and higher prices.

Thus, the Fed may well find itself faced with the dilemma that it must yield to the relapse at last, or else it must fully monetize every price increase in order to ensure that either incomes themselves, or the sum of income-plus-new-credit, keep pace with the heightened drain on family budgets. In the instance of monetizing every price increase, real wages would be prevented from falling and so would usher in a period of stagflation—i.e., of joblessness amid rising prices and of fewer lucky businesses thriving in the hotspots and more languishing in the relative chill of their continued sub-marginal efficiency as enterprises.

If this occurs, the possible shifts we have listed mean that the hosepipe of inflation might play more fully on different pastures than before. Among those water-softened plants that require an ever more plentiful supply of fluid and that will therefore wilt if the abundance is merely lessened, there could well be some of today's winners. Examples might be those involved in real estate, the importers of consumer discretionary items, and even today's near-zombies such as the credit junkies in the auto business.

More profoundly, the ongoing erosion of middle class wealth and middle class values that inflation tends to hasten will mean that in economics, as in politics, the decaying Empire will polarize further into two classes. The first will be of inwardly competing but outwardly self-preserving oligarchs. The second will be of a proletariat baying in the Cities for its dole, or toiling in peonism amid the latifundia estates of the nation's Corporatist Dons and Dictators. Worryingly, given the tenor of recent earnings results, this is exactly the sort of environment where a Wal-Mart might flourish alongside a Saks, but where the market for the middle ground becomes a charnel house for capital.

It is also a society in which the Opera might thrive (albeit on its patrons' largesse and on their command of the public purse) and where the modern day charioteers of Nascar might also draw ratings, but where the more modest aesthetic and edifying pursuits which comprise the cultural heart of a free nation are carved out and cast aside.

If the Fed thus leans again on consumer borrowing to plug any gaps in the nation's cashflow, for all the general harm it may occasion, the banks will be pleased enough, as they are the only important creditors with both a scanty capital-asset ratio and greatly more monetary than real forms of entry piled on each side of the balance sheet.

These, the Fed's precious cartel members, are therefore characteristically sanguine about seeing the actual worth of their assets erode, as long as their liabilities are likewise degraded. The banks are thereby largely indifferent to whether the achievement of accounting success in conducting their business translates into real, rather than simply numerical, gains.

In preventing consumers themselves from defaulting (and the vast pools of "securitized assets', which such loans ultimately underpin, from going sour), bankers will benefit from inflation's help in supporting their hapless customers in a state which heaps technical insolvency upon reckless profligacy, one in which they are borrowing more in order to support the service of old debts alongside the making of new, wholly unproductive outlays.

If the Fed is to seek a stay of execution for the crimes of its past on these latter grounds, it would be greatly assisted if it could spark off another mass asset-credit spiral such as we have had in financial securities and residential real estate in recent times.

Though we should not rule it out, reliance on consumer credit/debt presently looks prone to something of an exhaustion, which means the equity-bubble strategy must take its place once more. Unfortunately, the propagation of another leg to the equity bubble, however rapid the money pumping, will still require that earnings show at least the occasional desultory promise of improvement.

But if real wages are being prevented from adjusting downwards, higher profits—however synthetically inflated by a falling currency and windfall numerical gains in successive rounds of production—will not co-exist with increased levels of employment. Thus, we would be back to the sorry old game of increased indebtedness and ongoing capital consumption as a means to the maintenance of the economics of illusion which so haunt us Moderns.

Sadly, with the secret of the magic having been revealed to the foreign dupes who have long been avid buyers of so many tickets to the show, the Grand Illusionist himself is no longer regarded as an initiate of Hermes Trismegistus, a guardian of the eternal mysteries, but rather as a mere fairground conjurer. So, not only is his prestidigitation less able to hold his audience's attention and to prevent its members from wandering off to sample some of the other acts and exhibits at the carnival, but such a house as he can still command will be drawn only by conceding a drastically lowered price of admission.

Less metaphorically, a renewed resort by Western central banks to their same old shell game may well prove less and less successful at distracting attention from the hole at the heart of the Western (above all the US) economies. The descent of both the internal and external value of the dollar might begin to accelerate, threatening more upheaval and potentially triggering inherently unpredictable cascades of loss in the murky and highly nonlinear world of international financial speculation.

Above, we have pencilled in some general investment conclusions arising from such a scenario, but for an exposition of the much more profound consequences we might expect, let's turn once more to Hayek, writing in The Constitution of Liberty in 1960.

We have not had space to touch upon the various ways in which the efforts of individuals to protect themselves against inflation . . . not only tend to make the process worse, but also increase the rate of inflation necessary to maintain its stimulating effect.

Let us simply note, then, that inflation makes it more and more impossible for people of moderate means to provide for their old age themselves; that it discourages saving and encourages running into debt; and that, by destroying the middle class, it creates that dangerous gap between the propertyless and the wealthy . . . which is the source of so much tension in these societies.

The increased dependence of the individual upon government which inflation produces and the demand for more government action to which this leads may, for the socialist, be an argument in its favour. Those who wish to preserve freedom should recognise, however, that inflation is probably the most important single factor in that vicious circle wherein one kind of government action makes more and more government control necessary.

There is perhaps nothing more disheartening than the fact that there are still so many intelligent and informed people who, in most other respects, will defend freedom and yet are induced by the immediate benefits of an expansionist policy to support what, in the long run, must destroy the foundations of a free society.


Sean Corrigan is a principal of, a London-based economic consultancy. He is also comanager of the Bermuda-based Edelweiss Fund.

Clink!@ Cometose#1201494/20/04; 14:54:37

Nice call, sir ! DJI down 1.2%, mostly in last hour.

TownCrierToday's closing market reports and 24-hr news#1201504/20/04; 15:18:52 US Metals Update: Metals futures end broadly lower, mining indexes at six-month lows


USAGOLD / Centennial Precious Metals, Inc.HEADS UP! Mother's Day is May 9th, less than three weeks away.#1201514/20/04; 15:21:33

Anniversary - Birthday - Holiday - Any day!

 usagold gold jewelry

Show your good style and show how much you care.
Give the Gift that Keeps Giving Year after Year!

Always GOLD. Always.

BoilermakerBUBA - Axel Weber#1201524/20/04; 15:30:17

BERLIN (AFP) - University professor Axel Weber is to be nominated by the government Wednesday to be the new head of the German central bank, a spokesman for the finance ministry said.....

Analysts said that putting forward a candidate from within the government could have reinforced the perception the administration of Chancellor Gerhard Schroeder was trying to undermine the much-prized independence of the Bundesbank.
On the other hand a candidate chosen from the central bank itself could have proven to be as critical of the government's policies as Welteke had been and just as unwilling to sell some of the Bundesbank's gold reserves to help bring down the German public deficit.

Does anyone have some idea what this new candidate for Bundesbank Chairmanship might be expected to do?

Cavan Man$USD#1201534/20/04; 15:35:35

Who's supporting it this week. Can the USD separate from US share markets? Is this perhaps Another marker?
canamamiA CB making gold available....#1201544/20/04; 15:36:16 the shorts? I hope we're at the bottom.
canamamiUS$/US share price level/Euro#1201554/20/04; 15:41:55

Theory of the day: Assuming the US market is now valued in real terms by its valuation in Euros, one would expect to see an inverse relationship between dollar strength and the Dow (US share prices). For example, if the dollar rises relative to the Euro, US share prices must fall (other things being equal) to maintain a constant valuation in Euro terms.
Cavan ManBlair in the Euro#1201564/20/04; 15:46:01

Is Mr. Blair less inclined to support the US now that so many lies and misdeeds have been exposed regarding Iraq? US culpability for the disaster in slow motion cannot be denied. I refer one's attention to the online article published by the Village Voice today.

Blair risks his political position perhaps but is more concerned about his patrimony. He is a true Brit in my opinion. He now know the right thing to do and he is determined to do it; throwing himself upon his sword. Meanwhile, Gordon Brown watches from the bench grinning like a Cheshire cat and waiting for his swing at the PM bat.

We should not underestimate the power and influence of the dollar. Many who live in Europe are defacto US citizens; they have small and large investments in this country. Even Brighton can't compete with Florida sand.

There is a struggle in Europe at the highest levels of influence between real Europeans who see the end times of the US economic hegemony unfolding in real time and those Europeans in name only who perhaps view themselves as good global citiznes by who in reality are US sychophants and on a sort of US "dole".

Which side to choose dear friends? Make mine gold! IMVHO, the world is coming unhinged slowly but surely--socially, economically and politically. Best2all..CM

Cavan ManLast post#1201574/20/04; 15:47:59

Sorry for the typos and poor grammar. I do know better but must fly....
NedYikes!#1201594/20/04; 16:10:11

Gold taking another beating in NY 'Access Market', $393 and change. Silver getting pummelled.

I don't know guys, I sometimes thing we're playing this a little too CUTE. Maybe something is afoot. Is it in any way, shape or form possible that $430 was the top?

Awaiting the blasting.


SurvivorQuestion: Disparate Gold Quotes?#1201604/20/04; 16:27:48

Does anyone know why there exists so much difference between two of our commonly used POG sources? This afternoon, the discrepancy has been three to four dollars. The neighboring castle shows NY Access and Sidney as the two open markets. Does INO reference another market altogether?

The time given for the quotes seems to be the same at both castles.

Just a touch of confusion here.

Meanwhile, I have another $50 to go before my palms get sweaty. Even then, a price that low should probably just be viewed as an opportunity to buy below my current DCA.

- Survivor

R PowellSilver News // random thoughts#1201614/20/04; 17:05:57