USAGOLD Gold Discussion Forum Archive

Electronic reproduction sourced from
SundeckMorrison Bonpasse:The world needs a single global currency#12055705/01/04; 03:59:51


Taking a cue from the successful implementation of the euro and the growing interest in other regional common currencies, the world should proceed to the next level of currency consolidation: a single global currency, to be managed by an international central bank. Such a single global currency would eliminate worldwide currency trading costs, eliminate currency-related investment risks and eliminate Balance of Payments problems for all countries.
The success of the euro has started a trend on the Continent and more countries will certainly join the 12 that have already adopted the euro. Today, 10 more countries are joining the European Union and their continued membership requires their adoption of the euro, but joining the common currency will be on a county by country basis. At the end of the process, there will be 22 EU countries using the euro, and by that time maybe Sweden, Denmark and the United Kingdom will have decided to join. Then more countries will be joining the EU and the trend to a larger eurozone will continue.
To assist with such planning, the Single Global Currency Association is holding the First Annual Single Global Currency Conference at the Mt. Washington Hotel in Bretton Woods on Friday, July 9, 2004, the 60th anniversary of the 1944 Bretton Woods conference. The goal of the Association is the implementation of a Single Global Currency by 2024 and there will be a Currency Conference at Bretton Woods every year until such implementation is achieved.

Sundeck: "The success of the Euro" seems to be recognised by some from New Hampshire. (Isn't NH considered to be "progressive"?) Does anyone know about this conference in July? Is it a big deal, or is it a small group of outsiders singing in the wind?



TopazGold-v-Basket-v-Dollar.#12055805/01/04; 04:29:13

Gold has slipped below the index line and as such is likely a good buy vis a vis it's alt Currency counterparts.

The case for Gold over $Cash should be resolved next week as this market tightness can't go on indefinitely. Oil is the key here, as the one luxury the Dollar bloc doesn't possess is market control of the Oil price.

Imagine $60 Oil, 120-DX ? Scary HuH!

NedSocrates964#1205595/1/04; 06:23:10

Dear Sir,

Recently you posted a TA of gold and you see the POG at $480. I forget when you expect this. Do you still feel the same way? Is your reasoning similiar to Sinclair's?

Can you comment on 'Half-Monty's' call on G-E at Apr. 30 17:47?

Admiring your bold TA.....


misetichDisinformation Control - Jim Sinclair#1205605/1/04; 08:03:29


1/. China is not going to implode economically without the US, Asia and Euroland imploding first. Before you could have an economic contraction in China, the derivative and politically driven Western market world would fight off the problem just as they are now but with expanded liquidity and therefore more inflation-building fuel. That scenario is just the stuff a positive gold market is made of. So please do not attach yourself to the glib opinions now being promulgated that China threatens the commodity world and gold. Quite to the contrary. The Chinese exterior manufacturing demand equation strongly supports the gold price now and into the foreseeable future.

2/. Gold shares have been assessed by general equity analysts employing the methodologies of multiples of cash flow for sale and also as an earning per share value. Both are totally false because the mining industry is an asset based entity. This industry does not make its final selling price but rather has to take what prices the market gives. Hedging has been disqualified by the bankruptcy and near bankruptcy it has caused. Both of these misconceptions will evaporate as the gold mining industry consolidates by acquisition. It will be seen that the basis a gold mining or gold exploration and development company trades is based solely on its underlying asset value.

3/. Increasing interest rates - when they represent central bank catch up action to a market reality - support an upward movement in the gold price. In 1980, it took 14 7/8% on ten year money before the rate of interest became supported to the value of the US dollar and proved the terminal ingredient of inflation.

Jim was replying to e-mails "economic implosion in China" -

Regarding point 1 - China economic expansion - needs to be put into perspective

The announced "clampdown" that COT and speculators pounced upon to attack and ambush commodities and gold this past week - applies to overheated sectors - primarily to "curb excessive fixed asset investment that drove up prices for capital goods and strained supply of coal, electricity, oil and transportation," quote attributed to Chinese Premier Wen Jiabao

If China were to grow at the 1st half rate - expected 9% rate and without restrains in heated areas such as fixed asset invetments which were reported at 43% in the 1st Qtr -which aided a phenomenal rise in commodities pricing and inventory depletion - then the WHOLE GLOBAL FINANCIAL SYSTEM would be put at risk

China secondary concern is on the energy strain and China - coal, electricity, oil which are in short supply.

Does that mean China's growth will decelerate any time soon? and to what level?

Thus prudently applying, the brakes on overheated areas must be commended.

CHINA will remain the global economic LOCOMOTIVE -

Here are a few headline snips:

Economy to grow 9% in 1st half year
China close to 1990s world level in auto-part manufacturing
Business deals at 95th China Export Commodity Fair hit record

and finally a snip from trade:

According to foreign trade report estimates, China will realize total imports and exports worth US$1,000 billion in 2004, a rise of 17 per cent from a year ago.

"Total exports will rise 15 per cent to US$505 billion with imports growing 20 per cent to US$495 billion, resulting in a trade surplus of US$10 billion."

Jim Sinclair alludes that "the China economi implosion" represents disinformation by COT - and by all accounts it is disinformation

Putting things in perspective the US economy benefitted from bargain basement commodity prices in the late 90's keeping the rate of the "official" price inflation down - Prices of commodities in general will remain at the in/around current levels

The kicker is ENERGY PRICES - where COT has been able to do little on

Thus PRICE INFLATION presently in the system and in the pipeline will implode

All Aboard The Gold Bull Express - Part ll

misetichOil wars - petrodollars#1205615/1/04; 08:29:39


The goal here appears clear: limit overproduction and keep oil prices high, not flood the market with cheap oil. And with the Saudis clearly not playing ball on oil, one can only surmise that their hitherto almost reflexive move to recycle petrodollar surpluses back into the dollar has likely dissipated as well, removing an important marginal bid in the bond market, at a time when inflationary pressures are intensifying and 10-year bond yields have headed north of 5%. The broader economic and geopolitical implications are enormous: the House of Saud, which has cultivated a special relationship with successive U.S. administrations since the days of FDR, seems to have effectively decided that politically and economically distancing itself from at least the present American government provides a much better means of ensuring its long-term survival.

All of this implies an increasingly precarious backdrop for U.S. financial assets and the dollar, the rallies in which do not fully reflect today's deteriorating geopolitical and economic variables. Consumers have reached debt saturation with short-term rates at 1%. What happens as rates rise and the oil price explodes? A further price spike in energy could well exacerbate a growing inflationary psychology now predominant in the credit markets, which in turn could undermine the Fed's recent efforts to "talk down" yields on long-term interest rates.

A very good read - from an article by Marshall Auerback No "October Surprise" Courtesy of the Saudis - wherein Marshall disects the deterioration in realtions between the House of Sad and current US administration and defacto actions taken by the Saudi's

A second article can be found at the same link - "The Real Oil War" by Brandon Sprague- in Iraq that examines Iraqi Oil and potential conflicts that may arise in Iraq by its citizens as the effort of the CPA to "privatize" Iraqi Oil and its affects to Iraqi citizens who under Saddam's regime benefitted from a subsidy

IMF is reportedly going to be involved in Iraq - post June 30 - and if they follow their method operandi the sparks will fly

Very little is being said in the media relating to reinvestments of petrodollars back in the US - but indirectly there's confirmation as the US $ has been supported by the Bank of Japan - (via proxy for the US?)

US foreign policy - fingerprinting of travelers etc- will do little to appease the Saudi's and Arabs -

Under the existing homeland security, patriot act etc the US carries a big hammer to confiscate, freeze holdings/investments - which once again deters Arabs/Muslims in particular to rechannel/hold investments in the US

Thus petrodollars - Arab/Muslim investments are seeking other currency/investment alternatives

US Trade - Current Account - Budget deficits are imploding -and former allies such as the Saudis are being alianated

Is this situation sustainable? Does it put the US $ in peril?

All Aboard The Gold Bull Express - Part ll

misetichBuffett says inflation 'heating up' in U.S.#1205625/1/04; 10:23:38


Sat May 1, 2004 11:37 AM ET
OMAHA, Neb., May 1 (Reuters) - Warren Buffett, the world's second wealthiest person, said on Saturday that inflation was "heating up" in the United States.
Speaking at the annual shareholder meeting of his Berkshire Hathaway Inc. (BRKa.N: Quote, Profile, Research) , Buffett said, "I think we're starting to see (inflation) heat up in this country."

Buffett's company owns dozens of businesses including insurer GEICO, apparel maker Fruit of the Loom and ice cream chain Dairy Queen.

He told shareholders that the companies that will be best suited for this environment will be ones that either have unique products and services or aren't as dependent on purchasing inflation sensitive goods.

"Inflation is the enemy of the investor in real terms," Buffett said. He suggested one way to protect oneself against inflation was investing in certain inflation-resistant bonds.

Warren says price inflation is heating up - and the "sage of Omaha" has a large following -
A few months ago - when he announced the US $ was overvalued-and he was diversifying in other currencies - the market followed

Whilst he recommends a "paper shuffle" ANOTHER better alternative is - Physical Gold - Bars, coins is the ultimate storage of value and utlimate currency

With Sir "Accomodative" Greenspan at the helm - we're months away from IR increase- though the seed of higher IR's has been planted

This non-immediate Fed reaction will cause price inflation gather more steam and accelearate further in the next few months

Housing, derivatives, stock market, bonds cannot be "shocked" by rapid acceleration of IR

Add a "soft" labor market ...and...presidential election..

All Aboard The Gold Bull Express - Part ll

misetichConsumer Spending's Shine May Fade#1205645/1/04; 10:54:23


NEW YORK (Reuters) - Consumer spending, which has been a major prop for the stock market's gains, may fade in coming months, raising questions about where the economy and stocks will draw future strength.

The market has recently given back some of its gains and more investors have turned wary about the outlook.

Consumer spending, which accounts for 70 percent of U.S. economic activity, has benefited from fiscal stimulus like tax cuts and from easy credit engineered by the Federal Reserve, but these stimulants have pretty much run their course, analysts said.
"The market is not priced for continued growth. The market is priced for accelerated growth" from current growth levels, he added.

The last leg of Uncle Sam's fiscal stimulus -- tax cuts -- will fade away in the next couple months.
In addition, Fed Chairman Alan Greenspan says interest rates will have to rise to prevent rapid inflation from taking hold. With consumers already carrying a heavy debt load, what will higher borrowing costs do to future personal spending?
Long-term rates have gone up, slowing the pace at which home owners are refinancing mortgages, which had been another important source of ready cash for consumers.
"For good consumer spending to continue, we need to see job growth," said Connors, whose firm manages $100 billion in assets.

April's jobs figures are due next week.

Another head wind buffeting consumer spending is higher prices. A key inflation gauge in the gross domestic product report on Thursday nearly doubled in the first quarter.

Whereas not too long ago the Fed was worried that prices might be falling too fast, the concern now is that prices may rise uncontrollably. Milk is heading to $4 a gallon in some localities. And gasoline prices reached a record high U.S. national average above $1.80 a gallon this month.

Governor Ferguson recent presentation on - Trade - Current Account Deficits (barely mentioned budget deficits) argued that foreigners have been pouring funds into the US in the last few months at the rate of $60 billion as the rate of return in the US exceeds those of other countries - thus foreign appetite and provide the required daily funding of approx. $2.7 billion

IF genuine JOB CREATION is not taking place at the high range expected (Treasury Snow had predicted 300,000 jobs per month - but has since tempered his forecast - to "many")
and IR - debt burden etc increase there's a strong possibility of a severe SM correction

The SM has really performed POORLY in 2004 given the "positive historical" of a presidential election - given the very strong inflows both from domestic and external sources

PRICE INFLATION is a global phenomenon and restricted to the US thus other countries will follow suit and increase IR-offsetting the Feds action and negate any advantage re: bond market foreign inflows

Bottom Line

No meaninful genuine job creation =

- increased IR - debt burden - increased price inflation - tanking SM - potential derivative debacle - out of control government deficits soaring

Mr. Ferguson and other governors theory will be severely tested as will the US $

All Aboard The Gold Bull Express - Part ll

USAGOLD / Centennial Precious Metals, Inc.What you need, when you need it!#1205655/1/04; 11:06:07">gold -- a global calling card
mikal@misetich#1205665/1/04; 14:01:45

Buffett says inflation's heating up. But that's not all he may be hot about. Now he's advising Kerry, criticizing the Fed and Bush administration, mocking Arnold Schwarzenegger and Bill Gates and adding to his dollar gambit:

Buffett Says He Has Increased Bet Against Dollar on U.S. Deficit Concern

Buffett Says He Has Increased Bet Against U.S. Dollar (Update2)
May 1 (Bloomberg) -Excerpts: "Billionaire investor Warren Buffett said he increased his bet against the U.S. dollar on concern that the country's trade deficit will weaken the currency. ``We think that over time that the dollar is likely to decline in value against some of the major currencies,'' said Buffett, 73, in an interview before Berkshire Hathaway Inc.'s annual shareholder meeting in Omaha, Nebraska. In the last few months, Berkshire has added ``more than a little bit'' to its foreign currency holdings, he said. They were last disclosed at $12 billion as of yearend. Foreign currencies represent Buffett's biggest purchase in the last two years."

"Buffett also said he has become an economic adviser to Democratic presidential candidate John Kerry. He criticized President George W. Bush's tax cuts as ``tilted toward the rich'' saying that they should have helped the poor and the middle class instead of rich people like him."

misetichmikal (5/1/04; 14:01:45MT - msg#: 120566)#1205675/1/04; 14:55:19

Mikal - Great post- thanks

Buffet continued add-on to the existing $12 billion bet against the US $ will shake some of those US $ bulls and gold megashorts

All Aboard The Gold Bull Express - Part ll

Cavan ManBuffet Update#1205685/1/04; 15:01:31

Buffett Says He Has Increased Bet Against U.S. Dollar (Update2)
May 1 (Bloomberg) -- Billionaire investor Warren Buffett said he increased his bet against the U.S. dollar on concern that the country's trade deficit will weaken the currency.

``We think that over time that the dollar is likely to decline in value against some of the major currencies,'' said Buffett, 73, in an interview before Berkshire Hathaway Inc.'s annual shareholder meeting in Omaha, Nebraska. In the last few months, Berkshire has added ``more than a little bit'' to its foreign currency holdings, he said. They were last disclosed at $12 billion as of yearend.

Foreign currencies represent Buffett's biggest purchase in the last two years. The Berkshire chairman has built a fortune buying undervalued assets and today sees little opportunity in stocks. He bought currencies as the dollar began a 25 percent slump over 24 months and the U.S. current- account deficit ballooned to a record quarterly average of $137.7 billion in the first nine months of 2003.

Druidmikal (5/1/04; 14:01:45MT - msg#: 120566)#1205695/1/04; 15:26:00

Druid: Mikal, misetech and all, thanks for the great updates. I'm not quite sold on Buffet and his metal position given his political leanings and the fact that his solution to major financial problems involve creating more paper. More like a red herring to me. Buffet is a paper guy. This latest dollar move up might have been an attempt to shake the likes of him, Soros and others out of their dollar short positions.
CometoseVirus#1205705/1/04; 17:37:11

Anyone else here have experiential knowledge about the virus that my Dell Techs informed me about today which likely crashed my new computer......I've been down since this time yesterday ...Had to clean out the old and start new with Tabula Rasa. I had some severe withdrawal this morning and in the vacuum realized how distracted I am; have to learn to " hold on loosely " in order to not let my life slip away . This , our cotemplated gold future will take care of itself ....time to launch out into the deep .........and my thanks to Warren for stepping up to the plate and making his voice heard....
GoldiloxTax cut jawboning#1205715/1/04; 20:24:58

All this jawboning about tax cuts, whether from the administration or political rivals is pure poppycock!

The tax cuts helped bouy the consumption binge - a little bit. A few hundred bucks in a year doesn't create "massive" spending for anyone, especially as the majority of the "middle class" was bumped up a tax bracket in the process. The media perception gained more than individuals did, rich or poor. As was suggested in Puplava's FSN today, 100% asset (confication) tax on the 10 richest Americas would feed the voracious Federal budget for less than a month.

The biggest disappointment is that NO ONE is seriously talking about SPENDING cuts anywhere, suggesting that NO ONE is interested in solving the government growth hormone syndrome. More likely, most have given up and just hope to profit from the market upheavals and the dollar "re-adjustment".

What a strange state of affairs. The path to hyperinflafla is being paved as we watch.

"Follow the yellow brick road."
- E. Y. (Yip) Harburg

Got gold?

Clink!Spending cuts#1205725/1/04; 21:03:54

Funny you should mention that, G'lox. I had been thinking the same this week. I've been listening to a quite interesting book which addresses the political and military goals (and, maybe more importantly, the differences between) the US and Europe. The author kept strictly on subject and came to the conclusion that the US would continue to be the only world superpower, while Europe would continue to flounder in post-imperial doldrums, mostly due to the oppressive burden of an ageing population.
About a third of the way through, I wanted to shout at him :-
1/ Who is financing the greatest armed force the world has ever seen ?
2/ Who is going to finance the boomer's retirement ?

I guess I was just left with the slight feeling of disbelief that someone intelligent enough to write as penetrating analysis as he, could possibly leave out the obvious - military power has given way to economic power on the world stage, and the US is living, literally, on borrowed time.

Clink!@ Cometose#1205735/1/04; 21:30:01

I feel your pain ! But I also feel a Black Blade moment coming on.....
Buy a decent firewall (hey, get a hardware AND software one while you are about it), install anti-virus software from the likes of Norton or McAfee, install anti-spyware software (I use Ad-Aware and Spybot, both free from
Sorry if I sound like I'm preaching, but I have just 'recovered' from a major, but luckily recoverable, virus attack on my home machine. I had all the right software, but had just let the subscription (with its updates) lapse. I'm a hardware guy myself, and I keep on forgetting that just because the hardware is getting cheaper doesn't mean that the software isn't important.

Good Luck !

mikal@Goldilox#1205745/1/04; 22:30:27

Re: "...suggesting that no one is interested in solving the government growth hormone syndrome." A bit of timeless Wm. Shakespeare helps explain human "growing pains". For example: W. Shakespeare, "Julias Caesar", Act IV, Scene III (Lines 63- 82)-

Cassius: Do not presume too much upon my love;
I may do that I shall be sorry for.

Brutus: You have done that you should be sorry for.
There is no terror, Cassius, in your threats;
For I am armed so strong in honesty[integrity]
That they pass by me as the idle wind,
Which I respect[heed] not. I did send to you
For certain sums of gold, which you denied me;
For I can raise no money by vile means.
By heaven, I had rather coin my heart
And drop my blood for drachmas than to wring
From the hard hands of peasants their vile trash
By any indirection[devious method]. I did send
To you for gold to pay my legions,
Which you denied me. Was that done like Cassius?
Should I have answered Caius Cassius so?
When Marcus Brutus grows so covetous
To lock such rascal counters[base coins] from his friends,
Be ready, gods, with all your thunderbolts,
Dash him to pieces!

mikalTo correctly spell, or not to correctly spell, "that is the question"#1205755/1/04; 23:51:40

The title of the thoroughly terrific "tragedy", the deeply drafted drama, the profoundly propitious play, is JULIUS Caesar!
GoldiloxViruses, Spyware, Big Government#1205765/2/04; 02:30:30

@ Cometose, Mikal;

As I read of your computer troubles and we are speaking about sprawling government, there is a House hearing on Spyware reporting on C-Span right now (1:00 AM PDT - not prime time for sure)

It's interesting how they waffle on Spyware regs, as they discuss the merits of Spyware for reporting consumer information vs. teh potential for abuse.

Spyware, which assists SW manufacturers and commercial web sites in "better knowing" their customers, is also a great way to accomplish identity theft, by recording keystrokes and web locations.

I also recommend the protection methods previously mentioned. Cleaning out cookies regularly is a really good idea. It may mean re-registering for regularly used sites, but can be customized once you are more familiar with the programs.

From the tone of the questions, the legislators are seriously uninformed about how the web works.

NedTerrorist event#1205775/2/04; 06:09:47

Good morning everyone.

I've been thinking about something ever since the train bombings in Spain but have been reluctant to discuss it. Sinclair alludes to the issue from time to time but doesn't actually 'say it'. Today I won't 'say it' either, but I'll ask it and beat around the bush (literally).

From time to time I try to place myself in others shoes to gain perspective from the other side of the fence. With all that has gone on in the last couple years hasn't it been a scarey, messed up planet? How long has the (latest) Israel/Palestinian confrontation been going on, 3 years? The geo-political enviroment is a staggering, horrid affair, looking at the 2-3 year picture it has got alot worse.

Looking from the point of view of the 'other side of the planet' we know they (generally) are opposed to the Iraq war, some countries (generally) are opposed to anything the United States is doing and finally some specfic countries wish the U.S. harm. I am sure Mr. Bush's 'axil of evil' countries include alot more than 3.

Delving deeper into the countries that wish to see harm to the U.S. we see factions that (perhaps) intent to harm the US and/or its interests. So here is the question. With all that has gone on in the world and specifically abroad in the last 2-4 years, what is the probability that these 'terrorists', a term that I paint with a broad brush, will act on the US and/or its interests before Nov 2 to ensure that Mr. Bush cannot carry on his foreign policy? The 311 terrorist event in Spain, in respect to the election only days later, was surely planned as such, no? What about OBL's 'deal'? Baloney, hogwash, reality?

I don't want paranoia to dictate any decisions but recall 911 and the closing of SM's in the US for nearly a week. Imagine an event larger (much larger?) than 911. How would the ownership of 'Gold Stock ABC' be of any benefit? The ownership of pure 999 metal must be considered if one is considering the above, most scarey scenario. Does anyone think this is a possibility? Has anyone considered this? Has paranoia taken over my thought processes?


Cavan ManTaking the emotion out of Precious Metals...#1205785/2/04; 06:16:08

This is an excellent editorial by a guy named Chris Temple. It is LOADED with common sense.
GoldiloxEffects of a potential terror event are not easy to assess.#1205795/2/04; 08:47:12

@ Ned:

General Tommy Franks warned that such an event might be more likely to produce martial law and suspension of the Constitution, so the political effects might be the opposite of what you suggest.

As to market effects, the redundancies built-in pre-911 brought it back to functionality in less than a week (an extra couple days were added to honor those lost). The current systems could withstand any similar attack much more robustly, so the psychological effects are by far the biggest unknown.

What terror warfare has taught us is that "terror warnings" can manipulate markets almost as well as events - a la Japan a couple months ago.

An actual event, in its horror, could be more mobililizing than crippling. 911 was a Pearl Harbor to some, but not as polarizing publicly, given the lack of easily definable enemy. A second event would garner more support for extended war against "anyone", as revenge is a red flag motivator of mass opinion.

. . . neither fun things to contemplate, nor simple to think through.

NedCavan Man#1205815/2/04; 09:37:37

Yes, a powerful editorial. Here are the last couple paragraphs that I call....."the case for physical demand".

"A rapidly growing segment of the population which understands history, our current monetary predicament and the need to do something pro-active to develop an alternative monetary regimen would be a potent force! Further, as this growing number of people acquired a form of money NOT dependent on debt, NOT dependent on markets, and NOT dependent on whatever manifestation of Greenspan we are treated to this week, a true free market might actually break out! As many are already attempting and even implementing with other forms of trading regimens based on silver, gold and even community currencies not based on precious metals, people of good will can further what I have in the past called a "peaceful monetary revolution" that is way overdue.

This and more will become more likely as the day arrives when the precious metals community approaches the asset classes it is most passionate about with more strategy and sense, and less emotion (meaning, of course, the kind of counterproductive emotion and hysteria that time and again leads to major financial losses during debacles such as we've just seen.) If you want to be emotional, then be passionate-nay, driven-about the kind of portfolio you could have by changing your approach. More so, be driven about the kind of future your children and grandchildren can have if we break out of the mold so many have been in for so long, and look at precious metals as a greater means to an end we all hope for. No conspiracy or manipulations, real or imagined, could stop millions of awakened people who realize that-at the least-they need an alternative to Greenspan's fiat money. Those millions, grounded in truth, sound investment strategies and with a noble purpose even beyond their own investment success, can change society for the better. "

The day that gold (and silver) soars is the day when it is realized that supply cannot keep with demand. We are at a ponit where we know 'manipulated' supply fills the holes. When this breaks down it will be "katie, bar the door"!

Thanks for your message.

misetichAlan Greenspan Tiptoes Up to China's Bubble#1205825/2/04; 10:11:19


And it's no mystery why. Overheating in Asia's No. 2 economy is a clear and present danger to the global financial system, and it's not clear that enough investors realize it. Unfortunately, Greenspan's concerns about China didn't even make it into many press reports last week.

``If (the Chinese) run into trouble, they will create significant problems for Southeast Asian economies, for Japan and, indirectly, for us,'' Greenspan told the Senate Banking Committee on April 20.

Holding interest rates at current levels isn't the answer either. A hard landing in China's booming economy could cause even more problems for the Communist Party's progression from socialism to capitalism. It also could devastate Asia, which increasingly is relying on Chinese demand. Japan's recovery could falter without Chinese growth.

The "China Trail" continues -

It is interesting to note - how suddenly many "doom/gloom" experts are predicting a hard landing in China - yet few of these experts has forecasted China's rapid growth

It is also interesting to note how sudden the China bashing took place following articles on WS Journal - and Reuters Editor interview with Chinese Premier Wen Jiabao

From a recent IMF publication


China is now the sixth-largest economy (at market
exchange rates) and the fourth-largest trader in the world

20In the 1980s and early 1990s, China exported mainly clothing, footwear, other light manufactures, and fuels. Since then, its share of world manufactured exports has
increased in nearly all categories, with especially rapid growth in office machinery, telecommunications, travel
goods, furniture, and industrial supplies, while the impor- tance of primary exports has dwindled. More recently,
China has made substantial gains in assembling and exporting more technology-intensive goods, including
automated data processing equipment. Indeed, electronic goods now account for as much as 20 percent of its
End of quote

Commodities and Price Inflation

Commodities have risen as a result of China's growth and demand - US military requirements - Global accomodative IR and flood of money supply - and rising energy prices - housing boom- automotive vehicles boom - India's economy growth

It is very doubtful that China's slowdown will have significant impact on its oil needs -

It is also very doubtful that US military needs will slow down anytime soon

Housing construction boom is continuing in the US

Feds accomodative stance will remain - as the Feds will continue to remain behind the curve for the forseeable future - even if IR are raised slightly later on in 2004

Investor's reaction (carry trade/speculators) this past week re: China were overblown

Where will this hot money flow to?
Stocks? Bonds? Housing? or will it sit on the sidelines waiting for a collapse? Or are they attempting to create a collapse?

Or was it a fakeout?

Hot money follows inflation -

Time will tell

All Aboard The Gold Bull Express - Part ll

misetichHow Will the U.S. Budget Deficit Affect the Rest of the World?#1205835/2/04; 10:31:48


Active fiscal policies by the federal government to help restart the
U.S. economy, together with extraordinary mili- tary and security-related spending linked to the
war on terror, as well as the cyclical move from high to low growth, have resulted in a 7 percent-
age point deterioration in the U.S. ratio of budget deficit to GDP relative to FY2000—the
largest such deterioration over such a short time span since World War II and equal to about 6
percent of world gross savings. Interest rates, however, have remained low as monetary policy
has been accommodative and global investment tepid. The U.S. fiscal position is expected to
remain in deficit for the next several years.
W hat are the consequences of the higher U.S. public debt, current account deficit, and net foreign liabilities for the U.S. dollar and, even-
tually, world economic activity?
From an extremely strong position in fiscal year 2000, the U.S. fiscal position has deterio- rated rapidly (Figure 2.1). The U.S. federal gov-
ernment's unified budget has shifted from a surplus of 2!/2 percent of GDP ($236 billion) in
FY2000 to an estimated deficit of 4!/2 percent of GDP ($521 billion) in FY2004
Foreign Debt and the Dollar
A U.S. fiscal expansion is generally thought to lead to an appreciation of the dollar, since it causes foreign capital to flow in in response to
higher U.S. interest rates, and leads to a weaker external position as some of the increase in
domestic demand is satisfied from abroad.10 In the medium term, however, the story is reversed
as the exchange rate starts depreciating to rebal- ance the current account deficit and generate
surpluses to meet the additional costs of the higher net foreign liabilities accumulated during
the fiscal expansion.

The "China" story has been front and center for the past week OBSCURING the real global financial system threat - a collpase of the US $

The Feds mantra of pointing that the Government deficit as a % of GDP is lower than it was in the mid 80's HOWEVER
they forget to mention that the TRADE AND CURRENT ACCOUNT DEFICITS were not at those levels in the mid 80's

The Feds are too optimistic in their projections on deficits reductions going forward - thus far NOONE of those rosy forecasts have panned out

How can the US continue on attracting $2.7 billion per day? to offset these needs. It wasn't long ago that those needs were "only" $1.5 billion

That is the everday REAL FEATURE STORY

All Aboard The Gold Bull Express - Part ll

USAGOLD / Centennial Precious Metals, Inc.A solid gold investment education in 175 pages for only $5.95#1205845/2/04; 10:50:33

The ABCs of Gold Investing

ABCs of Gold by MK"Without waxing philosophical, a few words are helpful concerning the mind-set with which you pursue your interest in gold ownership. Some enter the gold market to make a profit, others to hedge disaster, some to accomplish both. No matter into which category you fit, make sure you understand why you are going into the gold market. Convey that understanding to the individual with whom you are structuring your gold portfolio. The whys have quite a bit to do with what you end up owning.

"Frequently investors will say that any kind of gold will do because after all gold is gold, isn't it? This type of attitude has helped a great many coin shop owners unload unwanted inventory they hadn't been able to get rid of for years. This is probably a good deal for the coin dealer, but it could spell disaster for you. In the same vein, I have talked to hundreds, probably thousands, of investors in nearly a quarter century in the business. Quite often, potential investors have no more reason for buying gold than 'everybody else is doing it.'

"In Chapter 16 on portfolio planning, you will find some details on this important subject. For now, consider the inscription over the entrance to the temple of the ancient Delphic Oracle: 'Know Thyself.' Study. Read. Learn what's going on around you. Call a few gold firms and ask questions. There's nothing like conversation to stimulate thinking. Take time to lay a little groundwork. Then make your move. The political and economic situation being what it is, there is no better time to start than now. Know thyself -- your goals and needs -- and you will be a more confident, happier gold investor." (more)

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

misetichFear of China hard landing hits Asian stock markets #1205855/2/04; 11:30:38,4567,115461,00.html?


STOCK prices plunged in Tokyo and in other Asian markets this week on fears that China's economic boom - the locomotive of regional growth - could be derailed by emergency measures Beijing is taking to curb bank lending and head off inflation.
The South Korean government yesterday convened an emergency meeting of officials and experts to analyse the impact of any move by China to put the brakes on its overheating economy
Japan is exposed to a double hit from any sharp slowdown in China. Chinese demand for Japanese machinery and other capital goods, as well as commodities ranging from steel to cement, has helped power Japan's economy to a strong recovery since last year. And Japan, like China, has become a magnet for imports from the rest of Asia.

On the China Trail -It get curiouser and curiouser

Recap of Events

Week of April 12

IMF suggests to US to alert investors re: increase IR's
Negative "gold" news appear in Financial Times/Bloomberg re: France, Germany gold sales - vaults are full

Gold prices in the $420's begin to drop

Week of April 19

Greenspan testimony - alerts markets of inevitable increase in IR
Greenspan comments on "China overheating"- high energy prices here to stay
US Central bankers - media blitz - Deficits don't matter

Gold prices drop to low $400
Gold stocks get pounded

Week of April 26

China story takes overheadlines in WS Journal, Reuters, Bloomberg
US GDP growth of 4+% - disappoints
Gold attacked again - intraday $377 before rebounding - Gold bull trend line remains intact
Sell-off in commodity markets- unwounding carry trades
Gold stock get pounded again
Asia SM react to China's development
US $ index weakens
US SM weakens
US Long-term IR increase
Gold community gurus more bearish than ever

The famed PPT has its hands full - and thus far most of the alloted physical gold of 400 tons yearly sale re: WA is gone-

So much ammunition needed - to maintain equilibrium - but the ammo of IR's have disappeared

Geopolitical events heating up - in Iraq and attack in Saudi Arabia

As Blackblade would say " We live in interesting times"

It never hurts to add a little insurance in one's portfolio - Physical Gold - get some!

All Aboard The Gold Bull Express - Part ll

GoldiloxFiscal irresponsibility#1205865/2/04; 11:43:39

@ misetech:

Your quote, "The Feds mantra of pointing that the Government deficit as a % of GDP is lower than it was in the mid 80's HOWEVER they forget to mention that the TRADE AND CURRENT ACCOUNT DEFICITS were not at those levels in the mid 80's"

reminded me of the tax activist on Puplava's FSN yesterday who said they are looking for a small government, fiscal Conservative of the Reagan mold. Gulp?

Most people. including many well educated types, are absolutely confounded by the rhetoric into believing there is a real difference between which party controls the White House. As long as the Congressional deficit spending continues unabated, the economic damage will continue to reflect their fiscal neglect.

It's the SPENDING, stupid! Deficits DO matter!

Got Gold?

WaveriderThe Rothschilds, LBMA, and Gold#1205875/2/04; 11:44:44

"Of the two major Rothschild Houses (French and English), the London House (New Court ), founded by Nathan Mayer Rothschild and operating today as N.M. Rothschild and Sons, is undoubtedly the most influential, especially as it pertains to gold and currency trading. Twice daily a Rothschild agent sits in a cloistered room "fixing" the price of gold in the world's largest bullion trading market: the London Bullion Market Association ( LBMA ). Historically, N.M. Rothschild was owner and operator of England's Royal Mint Refinery and was the primary gold agent to the Bank of England.

...Nathan helped finance Britain's conquest of Napoleon at Waterloo, and benefited in London's stock market from advanced knowledge (from his superb courier service using pigeons) of Napoleons defeat at Waterloo. Nathan helped finance the Duke of Wellington's army having bought 800,000 pounds of gold from the East Indian Company for $8 million then selling the gold to the Duke to help defeat Napoleon. Hence, Nathan became chief broker and pay master general to England's most important army; the Rothschilds were England's lifeline for getting paycheques to the English army. Nathan could single handily wipe out savings of many a competitor by dumping "consols" in London driving down their share prices, as he did with the advance news of Napoleon's defeat. Nathan's ability to depress stock prices, then buy them up after people panicked was legendary...He would use Rothschild agents to send false news which would be used by observers falsely leading the crowd astray, then he would buy up the same stock at ridiculous low prices...One should never underestimate the capacity of a Rothschild to influence markets, even today."
Morton (1962) noted that the Rothschild wealth was estimated at over $6 billion US in 1850. Not a significant amount in today's dollars; however, consider the potential future value compounded over 147 years!

Accounting for the Rothschild Wealth and Influence: Taking $6 billion (and assuming no erosion of the wealth base) and compounding that figure at various returns on investment (a conservative range of 4% to 8%) would suggest the following net worth of the Rothschild family enterprise:

$1.9 trillion US (@ 4%)
$7.8 trillion US (@ 5%)
$31.5 trillion US (@ 6%)
$125,189.1 trillion US (@ 7%)
$491,409.0 trillion US (@ 8%)

To give these figures some perspective consider these benchmarks: A little of $300 billion US buys every ounce of gold in every central bank in the world, U.S. M3 money supply August 1997 was $5.2 trillion, U.S. debt is currently $5.4 trillion, U.S. GDP (1997; 2nd Q.) is $8.03 trillion, George Soros' empire is worth an estimated $20 billion."

Waverider: Misetich - I add this article (1997) to complement your excellent summary below - don't forget that the Rochschild's pulled out of the London Gold price fixing around April 12, just beofre the negative Gold disinformation hit the airways and just before Gold dropped from around $420.00. What do they know that would motivate them to possibly manipulate the PM market to this extent - according to this article, it wouldn't be the first time. Cheers and thanks Misetich for all of your contributions here - they're appreciated!

GoldiloxRothschild's#1205885/2/04; 12:02:46

@ L WaveRider:

Perhaps the Rothchilds' pullout is the some of the best corraborating evidence for Sinclair's assumption of rapid POG rise in the near future?

The fundamentals have been in place for a while, but what we've lacked so far is evidence of market movers.

Gold will break out of its doldrums soon, and the explosive run could be missed by anyone who blinks.

Waiting for the absolute bottom of this pullback could be dangerous.

Got gold?

Cavan ManUN coming to US aid in Iraq#1205895/2/04; 15:00:56

....and U.N. Secretary-General Kofi Annan said he expected the Security Council to authorize a multinational force for Iraq.

"Quite frankly, it's in everybody's interest to do whatever we can to stabilize Iraq," Annan told NBC television, adding a resolution being considered by Washington would deal with Iraq's future after a planned U.S. handover of power on June 30.

For the Security Council to authorize use of must be worse than we think.

misetichEMU April Flash HICP Rises to 2.0%, Above Expected- Price Inflation Soars in EU#1205905/2/04; 16:07:29


FRANKFURT (MktNews) - Eurozone harmonized consumer prices rose 2.0%
on the year in April, up from a rate of 1.7% in March and slightly more
than most analysts expected, according to the flash estimate released
Friday by Eurostat.

Eurostat did not provide a figure for the month-over-month HICP
change in April. However, according to Market News calculations based on
the latest available index levels, April HICP rose 0.4% from March, down
from a m/m gain of 0.7% in the earlier month

Price inflation is soaring in EU -
EU keep on emphasizing - currency stability - they were screaming when the Euro hit 1.26 US

At the lower levels price inflation re: OIL is hitting them hard - thus it appears the optimum level of the Euro/US is between 1.18 to 1.25 US which would roughly translate to Newmont Lassande forecast of Gold between $380-430

In addition US corporate earnings & revenues were
improved due to currency flactuation - The US $ index spend most of the 1st qtr between 85-90

Thus if the US $ index moves up it would hurt earnings - hurt EU price inflation and hurt US exports

Gold megashorts have taken a short position between $385 to $395 -

Bon chance!

All Aboard The Gold Bull Express - Part ll

AristotleI'll echo Cavan Man#1205915/2/04; 16:21:50

Everyone ought to take a moment to read through Chris Temple's comments. He takes a good first whack at all this and it'll stand most casual readers in good stead. But, (you knew there'd be a "but") like many before me I've somehow gained a fuller appreciation for the all-important nuances that careful word selections can provide within the greater body of a presentation. So it's with that in mind that I'd encourage the veterans of monetary thought hereabouts to be generous in their interpretations. At the same time I'd encourage the novices to think deeply on these matters and find where they themselves still have need to come up to speed.

I especially like at the end where Temple talks about people of good will taking action toward a "peaceful monetary revolution." However, the road map from here to there is strewn with a great many challenges, making it all the more important that our various official and unofficial or would-be "trail guides" (my hat is off to the REAL one) don't muddle the path with a quagmire of uncertain and indefinite communication. What's in a word? Here's a small example from Temple's article:

"First, I suggest you come up with a modest, realistic amount of PHYSICAL gold or silver bullion you want to own, which you will hold in your possession. Buy or accumulate it, squirrel it away and forget about it. This is your "mad money" you'll be able to use as money in the event that Greenspan's skyscraper of cards suddenly does fall."

Veteran hikers of FOA's Trail will no doubt recognize what he's driving at, but we'd prefer to pass the message on to our friends in the following form -- by replacing the occurrences of "mad money" and "money" with less ambiguous counterparts. It may seem subtle and unimportant to the beginner, but it pays off in the end as you gain proficiency with the state-of-the-art in monetary thought and personal well-being.

"First, I suggest you come up with a modest, realistic amount of PHYSICAL Gold bullion you want to own, which you will hold in your possession. Buy or accumulate it, squirrel it away and forget about it. This is your SAVINGS you'll be able to rely on as WEALTH in the event that Greenspan's skyscraper of cards suddenly does fall."

Without belaboring the point, at a minimum it oughta be obvious to even the greenest new-comer that the term "mad money" is a very misleading synonym for the "savings" which is meant in Temple's context.

If it's handled in this way, where Temple next goes beyond beyond the position of "mad money" (i.e., what I would rather call core savings) to talk about investments, we're all in a better position to see exactly where we now stand and get a clearer view of where we want to go.

From here, he seems to favor mining stocks to provide the "core" precious metals portion (at 10%) of his diversified investment portfolio. That's probably fine and dandy for the typical gain-minded investor, but we well-informed Trail hikers are better inclined to see how a simple ADDITION to our core physical Gold savings will most likely provide the largest (and surest) source of true investment gains as the course of current monetary events continues to unfold.

So if anyone suggests that your position is overweight in physical Gold investments, you can ignore them as ill-informed. It just so happens that you are a VERY WEALTHY person with an enviably large savings, among which perhaps only a latest few of those "excessive" kilos having been specifically acquired as part of your "investment position" to diversify whatever portfolio of funds you've got in play.

Savings, or savings plus investment, any way you slice it...

Gold. Get you some. --- Aristotle

PS. For Belgian. Thanks for the whereabouts inquiry a while ago. Despite a seeming absence by my prolonged silence, I've in fact read everything, and especially liked your suggestion a couple weeks back that use of the term "credit" could eliminate the legacy of confusion that "money" brings to most discussion participants. Good stuff. It's a big stone, so we gotta keep chipping away at it.

I also wanna say I'm glad to see Druid's post last week that a certain Mr. Wallenwein has come largely on board and is spreading our dual-system money-AND-Savings message. But I gotta say, after personally enduring the weary endless backfilling of naysaying Gold Standard bugs during times of very lonely spadework in carving out the frontline trenches years ago along with the likes of Trail Guide and Miner, it'd sure be nice if the reinforcing well-rested gunners like Wallenwein, using our trenches, would tell his folks WHERE all this thankless groundbreaking work was done and let 'em all know how to join us diggers in its continuance and refinement of its delivery. Sure, we worked at it to get a message out, which W-wien is helping, but we also did this labor so that we might provide a much-needed rallying point in a sea of chaos to attract worthy allies in our human desire for supportive companionship during the exhaustive campaign. So c'mon, Wallenwein, keep spreading the word, but have a heart and drop the camouflage you've got between us. Do what's in your power to facilitate the supply line reaching your primary trench diggers!

misetichReality Check: US Auto Dealers Report Lukewarm April Sales> Apr 30 / 10:11 EDT#1205925/2/04; 16:22:25


NEW YORK, April 30 (MktNews) - U.S. auto dealers say April should
wind up the best month so far this year but still tepid overall, with
imported vehicles selling anywhere from fairly well to great, while
domestic makes appear to be languishing.
"March, April, May and June usually are our best months. I'm not
seeing that so far this year," he said. "We saw fewer people out there,
our closing ratio is down and we have fewer deliveries."
--Concern Over Future Price Rises As Steel Costs Soar and Dlr Softens

Auto inventories remain high - steel prices are soaring as is gasoline

With higher IR around the corner the auto industry will be challenged - affecting parts & mfg sector

Certainly not a positive background for job creation thus ANOTHER reason for the Feds to move very s-l-o-w-l-y in incrasing IR

In addition IR increase will be tempered due to bank exposure in emerging markets -

Thus a 'benign' low IR for the next few months will insure accelerated price inflation existing in the pipeline

All those would be gold hedgers are still stuck for a few years - assuring a good floor for gold prices as their balance sheet continue to bleed affecting their borrowing capacities with banks for new projects - thus encouraging these megahedgers to clean up their hedgebooks

All Aboard The Gold Bull Express - Part ''

a nation of oneclearer now#1205935/2/04; 17:52:14

Looks like gold is crossing back and forth across 380. If
it goes down and returns, I would expect that would amount
to consolidation at around that level, perhaps preliminary
to moving above it more conclusively, at some future time.

RAPGoing up !#1205945/2/04; 19:41:58

If Bloomberg is any indicator, this is your last chance to get some cheap gold.
bugsClean them out#1205955/2/04; 20:45:33

RAP msg:

Bloomberg.. okay. The statistical significance of 34 "traders" doesn't mean anything, but even if it did...

"Twenty-seven of 34 traders, investors and strategists surveyed from Sydney to New York on Thursday and Friday advised buying gold. Six recommended selling, and one advised ``hold.''"

That is far too much bullishness in such a widely-read publication. Being a contrarian.. this tells me Gold still has another $40 drop before we clean out all the weaklings, even the Physical weaklings at the random coin shops or Television coin buyers.

Clean them out ... let's take the pain all at once... bounce around flat for the next 6 months -- then start the next climb upward.

misetichThe Dollar: What Goes Up...............................#1205965/2/04; 22:17:31


Its revival has relieved the world's central bankers of a major worry. Sooner or later, however, they know the decline will resume
Finance ministers and central bankers from the Group of Seven (G-7) industrial nations could barely hide their glee when they gathered in Washington on Apr. 24, on the fringes of the International Monetary Fund's (IMF) spring meeting. At their previous powwow in Florida, back in February, some of the monetary mandarins fretted that the dollar was heading into a free fall that could wreck the world economy
Treasury Secretary John W. Snow, Federal Reserve Chairman Alan Greenspan, and their fellow G-7 policymakers shouldn't get too comfortable, however. The dollar's recent recovery (it has risen 7.6% against the euro and 5.5% against the yen from its recent lows) is probably a temporary reprieve. With world trading patterns so lopsided -- the U.S. ran a record $542 billion current-account deficit in 2003 -- the greenback is likely to drop again after a quarter or two of strength.
LESS HEDGING. The two forces behind the dollar's bounce -- faster economic growth and rising interest rates in the U.S. -- will serve only to worsen global imbalances by pumping up American imports and increasing what Washington must pay its foreign creditors. Foreigners are likely to demand a steep markdown in U.S. assets via a further drop in the American currency. "The dollar will reach new lows in the next 12 months," says David Gilmore, a partner at consultants Foreign Exchange Analytics. That could complicate an already complex market dynamic for investors.

For the moment, though, the G-7 is basking in its success in halting the dollar's slide. At the Boca Raton (Fla.) meeting, the U.S. signaled that it was no longer eager for a dollar decline by joining its partners in warning speculators against "excess volatility" in exchange rates. The shift came in response to pleas from Europe that its economy was getting killed by the euro's relentless rise. Japan then hammered the message home to speculators with a buying spree, snatching up $20 billion-plus in bucks
But higher U.S. rates have raised the cost of that strategy, so this dollar hedging has fallen off. Data culled by State Street (STT ) from its institutional investors found that forward-dollar sales have sharply declined in 2004.
While the combination of growth speeding up in the U.S. and slowing in Europe is helping the dollar now, it will probably hurt the buck later. Fed research suggests that U.S. imports rise 1.8% for every 1% increase in U.S. spending, while U.S. exports shrink 0.8% for every 1% slowdown in foreign economic growth. The result: a bigger U.S. trade and current-account deficit.

Rising U.S. interest rates will also tend to pad the current-account deficit, notes former Fed official Edwin M. Truman. According to hedge fund Bridgewater Associates, foreigners own more than 45% of U.S. Treasury securities, more than 30% of U.S. agency debt issued by firms such as Fannie Mae (FNM ), and 20% of U.S. corporate bonds. Thus, as rates rise, so does America's debt service.

The last line of defense has been reached - Central Bankers - are attempting to fight the market and laws of nature - by defending a losing cause

Each Central Bank intervention to stem the natural path - results only in a temporary reprieve - aggravating the situation further

Japan's obscene intervention in the 1st qtr of 2004 - which has Central Bankers gloating - resulted in keeping US IR artificially low - hence the Feds have fallen way behind the curve

Japan purchase of GSE's debt which the ECB got rid of - is adding ANOTHER nail in the coffin -

The Fed says they have defeated "deflation" yet the US, EU, Japan, Canada are maintaining outregeous low IR - facilitating speculation

An increase in IR - a China hard landing - a bust of the global housing bubble - stock markets - bond market and ASSET DEFLATION like no other will hit globally

Thus these egomaniacs have a choice - tighten and face the consequences OR HYPERINFLATE their way out

The FEAR OF ASSET DEFLATION is in Central Banker's eyes - never mind what they say publicly - thus their choice is simple

Golden dreams to all

All Aboard The Gold Bull Express - Part ll

Cytek; 22:25:41

@ Goldilox, Cometose and Mikal.

Here is a free utility to destoy spyware. Once you run it, you will be suprised on what's on you computer and what sited put spyware on your pc.


mikal@Cytek#1205985/2/04; 23:03:35

Thank you. Good to hear from you.
GoldiloxSpyBot#1205995/2/04; 23:10:23

@ Cytek:

Not applicable to my OS.

I use Aladdin's InternetClean for similar results.

It lets me save selected cookies before I zap the remaining ones.

The Net Blockade portion allows me to block third-party cookies altogether.

misetichBuffett Warns of 'Huge' Derivatives Problem#1206005/3/04; 04:02:11


OMAHA, Neb. (Reuters) - Billionaire Warren Buffett warned of the risks of derivatives on Saturday, and said that the financial instruments could lead to a "huge problem" within the next 10 years
He said that despite Freddie Mac having intelligent board members, being chartered by the U.S. Congress, and being followed by dozens of Wall Street analysts, it couldn't get a hold on the complexity of derivatives transactions.

"With an auditor present, they managed to misstate earnings by $6 billion," Buffett said. "A lot of mischief can happen with derivatives."

He said that derivatives are so complex that many CEOs he knows can't figure them out.

"I know the people that run these companies and they don't have their minds around what is happening," he said.
"Some time in the next 10 years, you will have a huge problem that will either be caused by or accentuated by people's activities in derivatives," he said.

Within 10 years? that is a very conservative statement. Derivavtives are weapons of Enroitis economy. Their increased use undermines and dislocates the real economy.

The vast majority of investors at large are ill-prepared for this expected derivative bust -

Physical gold is the ultimate currency.

All Aboard The Gold Bull Express - Part ll

misetichOil: Still crucial and perilous - Oil Price Sparks in the past have been followed by recession#1206015/3/04; 05:42:33


"Oil really does matter and oil prices have been the best predictor of recessions in the past 50 years. We are now getting into danger territory again," says Professor Andrew Oswald at Warwick University
A sharp rise in oil prices, apart from hitting the profits of firms which are big energy consumers, also takes money straight out of consumers' pockets, particularly in the US,
Markets have been spooked by fighting in Iraq and growing unrest in Saudi Arabia, the world's biggest oil producer, as well as a lack of refining capacity in the US. So economic policymakers have also begun to fret, saying that oil prices are now a "downside risk" to the world economy, alongside the US current account deficit and slow eurozone growth.
but the oil market is a jittery beast and any signs of serious disruption, particularly to Saudi Arabia's 8.5m barrels a day, would send prices soaring.

While the rule of thumb is that a $10 a barrel rise in crude prices reduces global economic growth by 0.5% after about 18 months, economists like Oswald say the effect, particulary if oil prices jump to $50 or $60 a barrel, could be far more painful. The world economy is expected to grow strongly this year but higher oil prices could mean the outlook for next year is darker. Oil remains the most important commodity on the planet and we ignore it at our peril.

It is an interesting remark Sir Greenspan made on January 2002 regarding the effects of "dropping energy prices effect on the US economy


"The substantial declines in the prices of natural gas, fuel oil, and gasoline have clearly provided some support to real disposable income and spending. These price declines added more than $50 billion at an annual rate to household purchasing power in the second half of last year"

So Energy Prices Do Matter? What happened to the new economy"

Higher oil prices have always preceeded a recession

The FEAR OF ASSET DEFLATION - is in their eyes - Which way out?

Asset Deflation or Hyperinflation?

Physical Gold investments flourish in either scenario!

All Aboard The Gold Bull Express - Part ll

Here are three links to Sir Greenspan foray into energy-oil

April 27, 2004

November 13, 2001

January 11, 2002

Dollar Bill.,.#1206025/3/04; 06:15:32

"and when the bubble bursts, there is a dimension of strategic interaction that a prudent policymaker cannot ignore. This offers a rather strong argument in favour of symmetry in the central bank's behaviour in boom and bust periods. If a central bank were to react in an asymmetric manner, namely only with looser policy at times of asset price busts but not with tighter policy when asset price bubbles emerge, the central bank may create through its own behaviour a moral hazard problem among market participants. It is crucial for a central bank to avoid this, since a perception that it insures investors against the risk of large losses could easily contribute to the formation of new bubbles in the future... "

Unless of course if having the some big players of the market on board your strategy is half your aim. Having key big market players supporting your one world strategy makes them part of your "free market" muscle in implementing fed designs. The decision must be, are we going to spend our time having -overheating- as the problem, or have the problem of restarting the economic engines as the problem.
Or how long can we have the one before we have to have the other.

Dollar Bill.,.#1206035/3/04; 06:27:05

Thanks Cytek.
Buffett said; "He said that derivatives are so complex that many CEOs he knows can't figure them out.
"I know the people that run these companies and they don't have their minds around what is happening," he said.

Since derivitives are so complex, or rather, so illogical, arent they the perfect instruments for manipulation when push comes to shove in this new infinite debt model? Collapseing derivitives? The big boys can make up some new ones that illogically hold all the weakened ones as if they are strong. And on and on. Why 10 years? Why cant they play pretend for longer? Someday gold will seem sensible to the many. Right now, its a small group that sees all the mess.

USAGOLD Daily Market ReportPage Update!#1206045/3/04; 06:50:56">
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.

misetichDollar Bill (5/3/04; 06:27:05MT - msg#: 120603)#1206055/3/04; 07:28:39

Your comments

Collapseing derivitives? The big boys can make up some new ones that illogically hold all the weakened ones as if they are strong. And on and on. Why 10 years? Why cant they play pretend for longer? Someday gold will seem sensible to the many. Right now, its a small group that sees all the mess.

The LCTM - Enron fiascos proved costly - The famed "Greensan put" was applied to LCTM by lowering IR's in the face of over heated stock market - The final result of that action was NASDQ raising ahead to the stratosphere - over 5000 mark - The market bust followed

US still hasn't recovered from that "minor" fiasco

Enron was ANOTHER example of using derivatives to give the illusion of grandeur - Enron was listed in the TOP 7 US largest corporations (!!)

The ramifications and loss of creditability is plaguing the markets

You indicated " Right now, its a small group that sees all the mess"

You may think its small yet billions if not trillions of $ are being managed by "this small group" - I don't think Warren Buffett is "small"
Neither is Bill Gross who manages over $700 billions at Pimco

Currency traders are all over the US $ - and it took billions and billions of Japanese intervention in 1st Qtr alone to temporarily pause its descend

I agree "joe public" as Bushi would say hasn't joined - though gold investment demand is rising and being accumulated by "those in the know"

The 'gnomes' are alive and well - and are jumping and piling on the gold bull express

All Aboard The Gold Bull Express - Part ll

OvSGold & Silver are hammered again.#1206065/3/04; 07:41:51

Deadly for goldshares but not a big deal
IF you just slowly build up your nest-egg,
dropping a few coins into the kiddy and
enjoy the roller-coaster.
Whatever ELSE you might have ANYWHERE else
invested will give you more concern. So
let us use this least bothersome investment
and just watch the occillations like so many
waves washing up against the sandy beach.
It's best to stay away from hype and the
expectation of huge gain: It only causes
frustration and burn-out. When it will
happen, it will happen. OvS

misetichThings are worse than being said - The Character Of Slack #1206075/3/04; 08:52:35


The Character Of Slack...To suggest that the financial markets have been on heightened alert recently in terms of anticipating potential forward movement in the Fed Funds rate is an understatement.
Despite a better tone to manufacturing oriented diffusion indices lately (ISM, Philly Fed, NY Empire State Manufacturing, etc.), the recovery in headline industrial production remains subdued for now. A few weeks back we saw an unexpectedly weak industrial production showing for March.
And this sense of slack is completely corroborated by the capacity utilization component of the industrial production report.
For now, capacity utilization at 76.5% is below any initial tightening experience on record over the last four decades
If we had already lived through just average 3.03% payroll employment growth relative to the prior pre-recessionary peak in today's environment, we'd have 5.97 million more jobs than we now experience in the current economy. An overnight 4.6% increase from where we are today
Never in US history have average households been as levered as is the case at the moment. Fact: Never in the history of US wage and salary records has the year over year change in this measure hit the low that was just revealed in last weeks 1Q 2004 GDP report.
And only once (1986) has the year over year change in headline CPI been as low as we now experience when the Fed began to tap on the monetary brakes. In 1986, the year over year change in headline CPI was 1.28% when the rate tightening started, but importantly in that year, crude prices dropped over 50% and yet core CPI still expanded a year over year 3.8%

ANOTHER great insight from our friends at The Contrarian-

So much ammunition has been spend - the world is awash with liquidity yet the FEARS OF ASSET DEFLATION abound -

The trend still remains for "accommodative" central bankers - regardless of their jawboning to the contrary - since actions speak lauder than words

GOLD is the barometer - which way do central bankers want it to point? Deflation or Inflation?

All Aboard The Gold Bull Express - Part ll

misetichDisappointing growth reports - Increase government spending#1206085/3/04; 09:05:08

Construction expenditures increased 1.5 percent in March after an upward revised gain of 0.4 percent in February.

Public construction jumped 5.2 percent due to a 9.8 percent
Nonresidential construction spending edged down 0.2 percent after a 1.4 percent hike in February.
The ISM manufacturing index inched down one tick to 62.4 percent in April after increasing in March to 62.5.
.........New orders inched down from the March pace, but remained at high levels. The production index actually picked up to 67 percent in April from 65.5 percent in March. The employment index also rose to 57.8 in April from 57 in March.
The price index, which is not adjusted for seasonal variation, jumped 2 points to 88 percent, a high in this cycle. There is no question that raw materials prices are rising as manufacturing demand improves.

Construction spending increased on government deficit increase -
Price inflation soaring - jobless recovery continues

...and most of the ammo has been used up...

Government Deficits are here to stay - for a little while longer -

All Aboard The Gold Bull Express - Part ll

GoldiloxReserves Issues at El Paso#1206095/3/04; 09:41:13


There are two stories today that are huge - and have massive implications for the economy, yet they are happening in slow motion so as to avoid gathering the attention of the markets.Ý One of these is the story of how oil and gas companies have vastly overstated reserves (estimates of how much oil or gas is still in the ground that might one day be recovered as useful energy).Ý No sooner had we gotten past Shell doing write-downs (and not just once) than we have a story beginning to unfold about parallel practices at El Paso:Ý

Current management is not implicated.


Not like we didn't see it coming. Look for more energy price increases.

Belgian@Ari#1206105/3/04; 09:48:12

Glad to hear that y're still on guard at the Golden gate.
I wonder where all those other fine posters have gone, now that Gold's price behavior is becoming much more interesting than ever before !? Regards, B.

Great Albino BatNot that the GAB is one of the "fine posters" to which you allude, but...#1206115/3/04; 10:46:24

I think most posters have in recent days taken a short vacation while the powers that be do their thing - throwing more gold at the market, at very attractive prices.

Let the powers that be have their little tantrum; they are refusing to obey the orders of the market, at all costs.

And speaking of COSTS, remember that quip: "deficits don't matter."?

COSTS don't matter, when you can shove them into the DEFICIT or to other debt by some entity.

Especially, when there is no intention of ever PAYING DOWN THE DEFICIT. Costs are immaterial, because they wind up in the DEFICIT, and the deficit is immaterial - it "doesn't matter" - when there is no intention of ever paying down the deficit.

The Banks don't care about debt or derivatives, because they know, already, they are going to be nationalized sooner or later, and wind up as part of the DEFICIT.

It's logical!

Also, entirely logical to get out of fantasy fiat and into GOLD. However long it takes, it will be the only sure monetary asset left standing.


misetichHow is the labor market?#1206125/3/04; 11:04:00


Teenagers are facing the worst summer job market in decades despite signs more companies are starting to hire.
The annual teen employment rate tumbled from 45% in 2000 to 37% last year -- lowest since the figure was first tracked in 1948, according to an analysis by the Center for Labor Market Studies at Northeastern University in Boston.

"Kids are doing worse this year than last," says Andrew Sum, the center's director. "The job growth hasn't filtered down. If anything like this happened to the adult workforce, you'd call it a depression. It's that severe."

Probably the March 300,000 "job creation" cut in to otherwise student part-time jobs

Billions of tax cuts - increasing government deficits - have shown little results thus far

Job creation is almost negligible in lieu of the incentives - corporate earnings have increased ( income tax receipts from corporations have declined) corporate spending has increased moderately - corporations are still cautions on hirings

Will they make those tax cuts permaently? If they do trillions will be added to projected deficits

All Aboard The Gold Bull Express - Part ll

mikalSpin squad steals the show#1206135/3/04; 12:59:50

Further media consolidation is partly to blame for bland uniformity in reporting real news
and embellished, subjective hype.
From today's headlines, I was
struck that the spin strutted out today
is less genuinely interesting as a result of
turning inherently useful news into emotional entreaties to follow the bouncing ball of the day, and exploiting and misapplying the many good tools of the journalistic trade such as documentation, quotes, balanced details and sourcing, pro and con, cause and effect, analogies, real and practical definitions where appropriate, etc.
But today, editorials, feature stories, opinion pieces and letters generally still provide far greater value to me, often having less selectivity, bias
and subjectivity, and so filling some of the content void
endemic now in most journalism.
Long live internet!

TownCrierClosing market reports, plus 24-hr news#1206145/3/04; 13:31:24 US close excerpts:

Gold futures on the Comex division of the New York Mercantile Exchange put on a consolidatory showing Monday while the London market was closed, and settled the day unchanged.

misetichUS Government Deficits - Will they be lower or higher in the future?#1206155/3/04; 13:57:38


If the tax cuts the Administration wants to make permanent are made permanent, current relief from the swelling Alternative Minimum Tax is continued, as most observers expect it will be (the Administration supports continuation of AMT relief but has not yet put forward a specific AMT proposal), and the additional tax cuts the Administration has proposed are enacted, the future costs of these tax cuts will be extremely large.

Over the 10-year period from 2005 through 2014, the direct costs of the enacted and proposed tax cuts would total $2.8 trillion. The cost would equal 2.1 percent of the economy in 2014.
From 2005 through 2014, the increased interest payments on the debt that result from the tax cuts would amount to $1.1 trillion. The interest payments would grow steadily with each passing year and in 2014 would equal $218 billion -- or 1.2 percent of the economy. This amount alone is as large a share of the economy as the government now spends on all programs and activities under the Departments of Education, Homeland Security, Interior, Justice, and State combined.
Considering both the direct costs of the tax cuts and the associated increase in interest payments, the tax cuts would increase deficits by nearly $4 trillion between 2005 and 2014.
Over the next 75 years, the cost of these tax cuts -- assuming they are made permanent -- would be more than the combined shortfall in the Social Security and Medicare Hospital Insurance trust funds.

The much ballyhood jobless recovery and GDP growth of the last few quarters was artificially stimulated by temporary tax cuts

Little return has been obtained for these tax cuts - but government surupluses (ok we know they were not- but lets play along) into gigantic deficits

Linday-O'Neil-Snow forecasts have not materialized. THEY HAVE FAILED.

They have failed to ignite the real economy, the over 2 millions jobs lost during the "mild recession" have not comeback even though billions have been spend thus far and 11 IR rate cuts

Military defense spending show up as GDP growth yet its a drain on taxpayers.

The "promised future" of the last few years is here NOW! -

Will they increase IR? Will they convert temporary tax cuts to permanent

Greenspan did an about face last week saying deficits (temporary) don't matter - yet all the hopes and prayers are pinned in the famed and elusive economic recovery

With higher real inflation hitting consumers and corporate profits it remains to be seen if these temporary tax cuts will be eliminated. Odds are they won't thus the rosy projections of future years deficit reductions will not materialize increasing the dependency on foreign investment.

All Aboard The Gold Bull Express - Part ll

Great Albino BatSilver in Switzerland: just for the record#1206165/3/04; 14:11:38

Five years ago, I moved silver held in Europe from one Swiss Bank to another.

This was time-consuming. It was weeks before the operation was finally concluded - and I had to pay a hefty tax for taking the physical out of one bank and putting it into another.

Ted Butler, at another site, says today: "The fact is there is little real silver in Switzerland or Europe."

I have to agree. I had to buy an additional amount, and it took weeks to obtain a very modest amount of silver.

Ted Butler is right, in my opinion.

Silver will continue to rise, is another opinion I hold.


misetichThree years after recession starts, most metropolitan areas mired in job deficit#1206175/3/04; 14:28:45


Of the 194 million Americans that live in the 100 largest metropolitan areas, three-quarters of them live in metropolitan areas that have lost jobs since the recession began. In fact, 28 months into the economic recovery, and a full three years since the start of the recession, 57 of the largest 100 metropolitan areas are not back to their pre-recession jobs levels. But it is the largest of these metropolitan areas that have been the hardest hit--nine of the top 10 largest metropolitan areas have seen job loss over this period. Of these top 10, only the Washington, D.C. area has more jobs now than when the recession began.
Furthermore, most of the 43 metropolitan areas that have experienced some job growth are located in states with high population growth. The top five metropolitan areas in terms of job growth have something in common--they are all located in one of the top four states in terms of growth in their non-elderly population. As a consequence, strong job growth may not be a sign of especially strong labor markets in these metropolitan areas, because job creation still may be lagging the demand and need for jobs.

Lack of job creation is the US $ achilli - Corporations have been bestowed with generous stimuli -yet only a few have gained - inside sellers - though corporate spending has increased, hirings have been disappointing even though corporate earnings have increased - to make matters worse corporate tax revenue paid to goverments have further been reduced

Reality Check

The US $ would be much higher if the economy was as healthy as the spinmasters are saying

IR's would be much higher

Government deficits would be reducing rather than increasing

Unless genuine jobs are created ASSET DEFLATION has not been defeated

Price inflation led by the energy sector will sap consumer spending and Central Bankers will do what they specialize in - jawboning, spinning and printing fiat

Thus the US $ will resume trending down

All Aboard The Gold Bull Express - Part ll

AristotleI dunno about you guys, but I'm diggin' the new Fifties!#1206185/3/04; 16:16:41

These are totally cool.

An accompanying press release gives us a little something to chew on.

------"A sound currency, which this new $50 note will foster, is a pivotal factor in the strength of our economy," said Federal Reserve Board Governor Mark W. Olson. "It must be recognized and honored as legal tender, and those who use it and handle it must know how to verify its authenticity."

The $50 note will be followed later by a new $100 note. Decisions on new designs for the $5 and $10 notes are still under consideration, but a redesign of the $1 and $2 notes is not planned. Even after the new money is issued, older-design notes will remain legal tender.

Because counterfeiters are turning increasingly to digital methods and as advances in technology make digital counterfeiting easier and cheaper, the government is staying ahead of counterfeiters by updating the currency every 7-10 years.

"We have to stay ahead of technology, which is developing and progressing at an ever-increasing rate. Items like digital printers and higher quality scanners are becoming more readily available at cheaper prices," said Ferguson. "So we have to make our currency notes safer, smarter and more secure in order to stay ahead of the would-be counterfeiters."

Counterfeiters are increasingly turning to digital methods, as advances in technology make digital counterfeiting of currency easier and cheaper. In 1995, less than 1 percent of counterfeit notes detected in the U.S. were digitally produced. Since then, digital equipment has become more readily available to the general public, and as a result, the amount of digitally produced counterfeit notes has risen. Over the last several years, the amount of digitally produced counterfeit notes has remained steady at about 40 percent.--------

Think about this for a minute: Real WEALTH (real PROPERTY) can't *can't* CAN'T be counterfeited. It either *exists* or else it doesn't.

You either have wealth, or you don't. Unlike money, real *REAL* wealth can't be faked. Why? Because it isn't functioning to merely *represent* anything that it is not. Your tangible property always *IS* its value as a material thing (whatever it happens to be) and is determined by its usefulness in the eyes of a marketplace.

ANOTHER certainly knew very well what he was talking about when he said something to the effect that "Your wealth is not what your money says it is;" or to restate it, "Because your money is only a *representative* utility, the size of your account on any given day tells you nothing about amount of real things you could successfully exchange it for later that day or the next." Materially, so to speak, the only thing you "own" through the holding of money is an unproven perception -- unproven until such time as you actually convert it to real wealth by spending it.

An additional blurb from the Bureau of Engraving is also worth a look.

--------Confidence. Trust. Value. That's what the American dollar stands for, around the world. This is made possible through continuous improvements in currency design and aggressive law enforcement that protect the integrity of U.S. currency by guarding it against counterfeiting.---------

Frankly, I like the new fifties -- in the same way I like anything (such as modern trading cards with holograms and whatnot) that shows off this type of state-of-the-art printing technology. The point is well-taken that Confidence and Trust are important in maintaining the *perception* of Value that people mentally attach to their various accounts of money and its representative currency.

At the very least, we couldn't maintain our good perceptions towards our money if we couldn't trust that our hand-to-hand currency was in fact a bona fide "piece" of our vast and elaborate monetary (credit) system. That's why any representational currency for use in "cash" monetary transactions outside of direct bankaccount-to-bankaccount transfers needs to be maintained with a level of integrity at least matching the people's perception and confidence toward the integrity of the interbank monetary/financial system.

But that's just the tiny tip of the iceberg. The larger issue, assuming we've got our currency system in trustworthy order, is whether or not our vast underlying system of counterparty performance on credit and debt obligations and the elaborate accounting system that tries to keep track of it all is worthy of the fancy paper intended to represent the monetary units of the System's scorecard. Where profligate consumer and government spending is not attended with perceptions of matching energies of debt-service, the perceived value of the monetary system and its accounting units (i.e., dollars) is doomed to a discounting by the marketplace, regardless of the bona fide integrity of the representative currency notes being circulated in the same name.

If/when your money fails, your wealth (if you have any) will still remain, valued for what it's good for. Patio furniture for sitting, sandwiches for eating, and Gold for the enduring real wealth savings that your money couldn't be.

Gold. Get you some. --- Aristotle

mikalInsiders and prudent investors exit equities#1206195/3/04; 17:19:02

Russell On The Bear Market

Excerpts Reprinted With Permission Under Fair Use Doctrine of International Copyright Law:

"At the same time, the advance-decline ratios on the NYSE and the Nasdaq have been plunging. There have been many comments regarding the validity of the NYSE A-D ratio, since it now contains over 50% interest-sensitive issues such as preferreds and closed-end funds. My comment is that the A-D ratio is still useful, since interest rates have such a large influence on stock prices. Nevertheless, I run an operating-companies-only advance-decline ratio, and this index topped out on April 5. So any way you look at it, the majority of stocks on the NYSE (and the Nasdaq and the Amex) are heading down."

"As subscribers know, I pay a lot of attention to new 52-week highs and new 52-week lows on the NYSE."

"More technical evidence can be seen in the massive top and subsequent breakdown in my PTI, We also see Friday's new low in my Big Money Breadth Index.
On the April 9 site I drew attention to the very rare "double non-confirmation" that had appeared in the D-J Average -- with first the Industrials and then the Transports turning weak."
An study, IMO, here focusing on technicals and fundamentals in a unique and yet solid argument for portfolio insurance.
My asset allocation is heavily weighted to physical PM's.
Examining Russell's peers among investment advisors yields
only a select handful capable of corroborating and complimenting the focus of his work.

a nation of oneHere are some questions I would like to ask.#1206205/3/04; 18:34:53

When a society borrows and borrows, and then goes to war to avoid the consequences, and prints money to pay for it, which is even worse than borrowing, what type of thing is it, exactly, that causes the cows to come home, the birds to fly the coup, the piper to be paid? I haven't seen the answer to this question, that I know of.

And since I am the person who is going to have to pay the piper, why am I not the one who is calling the tune?

And another question. What is it, exactly, that I would have to do, to become the person who calls the tune?

a nation of oneYou know what this (-) is.#1206215/3/04; 19:42:57

I can't go into what I am going to refer to, since to quote any substantial portion of it would violate copyright law, but if you have gone through the snips and comments and links contained on the web site over the past several weeks, you will know what I am talking about. I would specifically recommend familiarity with the details of the Rothshild event, Richard Russell's comments, Barron's touting of a bull market in stocks, currently bullish media pap, increased volitility in pog, and numerous other things. These are what I refer to in the following.

To me this all seems consistent with the pattern of publications touting a bull market, while knowing that insiders are selling heavily. They do this to keep the market up, so that the insiders, who make up the majority of those who can potentially bring pressure to bear against them, can continue to making profits until the last minute, at which time prices stand to plummet. The next phase will begin when a less knowledgeable (but still powerful) group becomes aware that stocks should not be held. These will sell less cleverly, and its effect will be more obvious. This second group will be larger, and more money will be invovled, probably much more, but they won't have as much clout with the media, and they won't be participants in the media. Perhaps they will be funds. And others. This may go on a while, as insiders and large movers frenzy feed, and media keep holding the bloody body high for them to devour, then, sooner or later, ordinary people will notice and sell. When this happens the shirt will hit the pan.

a nation of usual, a correction...#1206225/3/04; 19:44:31

"...comments and links contained on the web site...,"

should read,

"...comments and links contained on this web site...."

Liberty HeadANOO Good Questions#1206235/3/04; 20:06:09

What causes the shift to happen?
It has been called "An idea whose time has come".
Ideas can reach critical mass quickly or slowly depending on the innumerable complexities involved. Once critical mass is obtained, the shift is very rapid. The recent photographs depicting torture and humiliation of prisoners of war are good examples. One day, nobody knows, the next day everybody knows. Game over.

When do you get to call the tune?
You already are calling the tune my friend, and a lovely tune it is, however, like most pipers these days, the piper is deaf.
I think we need a new system for piper selection.
Perhaps a piper that plays for gold?
Yeah, that's the ticket.

Best wishes

a nation of oneLiberty Gold#1206245/3/04; 21:46:41

That about says it. Things go on as they are, until the mistaken philosophies of the actors form a mass, which cannot continue, and some flea-like phenomenon happens along to upset the whole thing. Then new philosophies, which had been collecting in people's minds, as a consequence of dissatisfaction with the conflicts they saw arising, then has before it a blank field on which to exercise and grow itself. I do hope the ideas presently being born will be better, and not merely replacements.

Ps. If you know of a movement, let me know. I may join it.

a nation of onesorry...,#1206255/3/04; 21:47:31

"Liberty Head" (Gold was on my mind.)
a nation of oneLiberty Head#1206265/3/04; 21:51:06

Well, the piper may be deaf. But I'm still dancing anyway.
Chris PowellTired of the lies about gold ...#1206275/3/04; 21:51:27

... GATA Chairman Bill Murphy challenges Virtual
Metals' Jessica Cross to a debate.

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

This email address is being protected from spambots. You need JavaScript enabled to view it.

Black BladeJust a Few Quick Comments#1206285/3/04; 22:15:40

Nation of One -- "And since I am the person who is going to have to pay the piper, why am I not the one who is calling the tune? And another question. What is it, exactly, that I would have to do, to become the person who calls the tune?

Black Blade: Simple enough, we pass along the obligations to the next generation while plundering the Treasury. (Democracies -- actually we are a Representative Republic with Democratic principles -- close enough). True enough that the well is quickly running dry. The people of a "Democracy" soon enough realize they can vote themselves goodies and services seemly without consequences or by pawning it off on others. Note how Ku Klux Klansman Sen. Robert Byrd holds up legislation unless he gets to "bring home the bacon" as he calls it (his own words).

Mikal - Yes indeed! Notice how the equities markets rise dramatically on low volume days and sink heavily on large volume trading days. Perhaps some levels in the indices are held together with some help from "The President's Working Group on Financial Markets (aka PPT) and the need to buy for company pension plans. It's the beginning of the month and also an election year so some strange events are occurring in how data is collected and the methodology used by "official" agencies (BLS for example and the EIA for another -- note how the EIA said that oil and distillate inventories rose while the API said that there were declines last week in contrast).

Misetich -- Just don't count several large segments of the unemployed population and everything looks just "peachy" eh? The Department of Labor and Sec. Elaine Chow are really playing hardball with this one.

Townie -- As a former shareholder of Harmony (and Gold Fields) I sold out for a nice profit as the US dollar vs. the Rand was the telling story. With a strong dollar and costs in a weak Rand they were able to make good on some mines on razor thin margins. Now as the Rand strengthened against the US dollar I bailed out (that and the changes in SA law requiring 25% company interest by local black interests -- not reassuring in a country ruled by those with Marxist pasts). So far I am amazed that they have so far done OK given the problems next door in Zim. Still, Harmony CEO Bernie Swanepoel is a sharp cookie and the vertical integration of the company does help (mining, refining, jewelry making, retailing and bullion production). Still, as the dollar crumbles I took my cue and got out. (Now I only have GoldCorp, Glamis, and Meridian shares as small part of my paper investments with a larger portion in the "real deal" -- The solid foundation of my portfolio and "portfolio insurance" -- most of the rest in foreign and domestic energy trusts and energy related partnerships including pipelines and shipping, and a smattering of other investments). Still, mining companies are cleaning house by getting out of hedgebook problems and "consolidating" with a (very) slow growth in exploration activity. At current prices and any dips here -- buy, buy, and buy!!! For those with limited funds then "dollar cost average" into the physical.

Goldilox -- unfortunately many execs of commodity producers is that they are stupefied morons who don't realize that these companies are much different than the usual "new Economy" or manufacturing company. Some couldn't even tell ya the difference between "Reserves" and "Resources" (especially with changing costs of production and a lot of speculation of reservoir size -- same with many miners). Sad situation too.

- Black Blade

Black BladeMarket Wrap Up - Willie#1206295/3/04; 22:24:27


When Wall Street and corporate officers executed on their motive to deceive the public and the world into believing the "New Economy" myth, Fed Chairman Greenspan joined the great game to give it legitimacy, despite his amateur standing in technology. During the fraud perpetrated upon the American investment community, the US Treasury conspired as a clandestine participant. Secy Rubin executed the gold carry trade, whereby vaulted gold bullion fueled a massive USDollar and USTBond rally. After the stock bust in 2000, the USGovt statistical elves joined actively in the collusion. They desperately wanted to continue and further the impression that the US Economy would respond well and emerge on a robust course. Their motive is to keep foreign investors committed, who supply 45% of federal credit and about 35% of mortgage agency credit. In order to manage the ongoing task of fraud and deception, Wall Street, the USGovt administration, and the Federal Reserve saw the wisdom in altering the language of the economy and financial markets. Their motive is to influence thought and to condition the behavior of citizens, consumers, and investors.

Black Blade: Too much info in the good article, but worth reading. Pretty well covers a lot of territory.

a nation of oneBlack Blade#1206305/3/04; 22:30:58

I appreciate your comments.

I would have to say that Senator Byrd -though he appears honorable- is not the best thinker or speaker, and that the poor quality of his talks reflects both the state of the quality of the men's minds who have gained control of our government, and perhaps also one of the reasons he hasn't been got rid of, if you know what I mean.

Black BladeInflation hits the family dinner table#1206315/3/04; 22:48:49

After years of stability, prices rise on key items, hitting pocketbooks and economy.


NEW YORK -- Many of life's necessities are becoming more expensive.
Let's start with breakfast. Eggs: up 5.2 percent so far this year. Butter for your bread: up 62 percent. A glass of 2 percent milk to wash it all down: It may rise as much as 50 cents a gallon next month. Time to head to work: filling up the gas tank now costs 30 cents a gallon more since January. After more than a decade of quiescence, inflation is returning - eating away at family pocketbooks and rippling through almost every segment of the American economy.

The latest evidence came Thursday, when the government reported that the first quarter Gross Domestic Product grew at a steady 4.2 percent rate, but inflation virtually doubled: from 1.2 percent annually at the end of 2003 to 2 percent now. The rate would have been much higher if it were not for some big-ticket items, such as automobiles and computers, which came down in price. In fact, in the category most families would relate to - food and gasoline - prices rose at a 5.3 percent annual rate. Those numbers echo the more widely watched Consumer Price Index, which shows inflation running at 5.1 percent annually. Those are the highest numbers since 1990.

Black Blade: Actually inflation is much higher but with the advent (or invention?) of smoothing filters like hedonic deflators, imputed income, etc. the real picture is not widely known to consumers. Actually for an inflation adjusted basis, petroleum prices are actually lower than past years -- it only looks bad because Americans view "cheap energy" as a right and not pure luck that the Third World has not until recently demanded their share and now depletion rates are just beginning to be felt as well as the "Peak Oil" production that hit the North Sea and the Middle East. It shouldn't be long now before prices really take off. As far as NatGas we have a good 20+ years of domestic reserves tied up in nonconventional sources (most is "off limits" due to Federal policy, land access restrictions (even on privately owned surface land with agreeable landowners), lack of drilling and pipeline building permits and the numerous bottlenecks of pipelines and infrastructure leading to major markets). BTW, I have said numerous times here to stock up for several months on nonperishable foods and basic necessities. OK, here goes once again: "Get out of debt and stay out of debt, stash enough emergency cash for several months expenses, accumulate Gold and Silver portfolio insurance, and start a storage program of nonperishable foods an basic necessities".

Black BladeJapan stops buying dollars as economy firms #1206325/3/04; 22:57:06


Japan's mammoth effort to curb the strength of the yen was abandoned in April when authorities ceased intervening in the currency markets for the first time in seven months.

The decision to end intervention sends out a strong message that Japanese policymakers believe the country's recovery from a decade of deflation is broadening from exports to domestic sections of the economy.

It also promises to remove a growing source of tension with the US, where manufacturers have accused the Japanese government of keeping the currency artificially low to boost exports.

However, the decision to halt purchases of US-denominated assets could have negative implications for US Treasury bonds, which have been boosted by strong buying from Asian governments, led by Japan and China.

Black Blade: Wanna bet that Alan Greenspan's threat to raise rates and slaughter US denominated debt in Asian central bank reserves have a "chilling" effect on Japan and China? It could get rather "Interesting"!

Druida nation of one (5/3/04; 21:46:41MT - msg#: 120624)#1206335/3/04; 23:20:54

Druid: ANOO, for an excellent interview with Bill Murphy and G. Edward Griffin concerning "Is There Manipulation in The Gold and Silver Markets?", click on the link. Also, you might want to check into Mr. Griffin's grassroots organization at
melda laureLiars and Loosers, Sir Powell#1206355/3/04; 23:37:11

Tired of the lies?
No just tired of the loosers.

I think the evidence of the silver market (desperation) speaks volumes. It seems obvious that the loosers have lost. They've lost the war, it's game over, this is just noise, promises of "wonder weapons", and other nonsense to mask the obvious.

Just remember, they've lost, but they're not defeated yet. Dont get suckered into the last conflagration; dont get sucked into the undertow of the downfall of the false pillar of heaven. It may all be illusion, just dont get killed by it at the last.

auta i lome!
aure entuluva.

oooh! the waiting gives me the willies!

Dollar Bill.,.#1206365/3/04; 23:44:04

Misetich, I might have read it wrong, but when I read the book about LTCM, it made me think that greenspan had no compelling reason to adjust IR's because of LTCM. Maybe he needed something to blame his IR cuts on, and since LTCM seemed hard to understand, blame it on that.
The book at its core said that yes, LTCM made a bad bet, but it was sellable, and until they made the blunder of showing thier derivitive bet book to the wrong people, the owners didnt even want to give up control because they still felt they had a viable business. Once the derivitive bet book got out to certain elements of the trading community, they did a controlled bleed of the company. One bank let its traders bleed LTCM for the exact amount they had invested into LTCM. Those that came to the rescue of LTCM came to regret it because the traders decided to bleed THEM also but just to a certain point. It was all within a small derivitive trading world and they did a controlled vulture act on LTCM. The way the financial media talks about LTCM makes it seem like it was falling into some uncontrolled whirlpool derivitive marketplace.
Not according to the book. Seemed just as controlled as the dollar markets were the day they opened after 911.
What I would like explained to me is how the derivitive markets handled Parmalet, enron, worldcom, ect.
Even the twin towers and the adjoining buildings and all those financial businesses didnt implode the derivitive world. How do they handle all those things?

melda laureBlack blade, SA#1206375/4/04; 00:06:08

For what its worth, I still have hope for south africa. Admittedly not much hope: it may be a marxist funny farm, but compared to the rest of the governments its a libertarian paradise. They've had over 200 years to absorb notions of the rule of law, and they're not going to give up the stability that comes with that overnight (I hope, and maybe that's all it is).

If SA falls, the only rule of law will be Islam. Perhaps Egypt will bear the torch, perhaps Kenya. It will take many hands to hold it steady, and those hands will have to work in concert, amid the push and pull of events to come. They may not make it, but I think it is a mistake for the US to ignore them as a key partner. What other nation could be as effective an ally? The history of outsiders in that continent, (euros, arabs, greeks, etc) is a long tale, not for easy listening, regardless of what I think, the arabs have been active the longest, they have aclimated in a way that the west will only approach in another 200 years.

Druid@Ari#1206385/4/04; 01:00:23

Druid: Thanks. I enjoy reading W-wien's and many others work but c'mon fellow bugs, show a little integrity and give credit and recognition where it is due. The FreeGold trail blazing body of archived intellect at this site should one day be mandatory reading here (good ole U.S of A) at some University Economics Department as a course on capitalism and the concept of free markets. Ok, I'm dreaming, now back to the cave to stare at the walls.
BelgianAri,....speaking of *** WEALTH *** ! !!!!(exclamation)#1206395/4/04; 02:32:56

Small shops and businesses in Euroland, openly advertise that they don't wish to accept 50-100-200 euro-notes ! Counterfeiting (on a massive scale).

Soon, cash-settlements of more than 10,000 €, are illegal and those payments must be made through the bank.

Euroland banks are instructed to co-operate on tracing/identifying ALL trails of currency-confetti and other papers ! Something is "changing", drastically (and progressively), overhere !

We are heading versus the re-installment of the complete "WEALTH" notion. WHAT *IS* WEALTH, will soon become very clear, again !?

I was very surprised whan Greenspan pronounced the word "Wealth" in one of his latest speeches. I'll abstain from any comment about the (wrong) context in wich he used the word. Having used the word already said enough.

During the latest (recent) runup of the €-POG (11,000 €/Kg), more and new people (Eurolanders) were accumulating the tangible precious ! Many Gold dealers were surprised, but had no explanation (except the classical ones) for what was happening .

And then suddenly, kaboom,...and €-$-POG (the price !!!-exclamation) was knocked back into its old disciplinear containment. And so was the $-€ exchange rate. Order,...order in the house !

But,...the POO goes on doing its own thing. The $-POO keeps firming and the €-POO is losing its advantage against the dollar-price, due to the status quo in $-€ exchange rate !!!
Howhowwwwwww,...what's this ?

Suddenly, China is being pictured as "pivotal" on a broad range of things economical/financial! Yep, all of a sudden !
We had to buy the POG-knock as a "China"-effect ! How convenient.
BTW, why is it nobody answered/reflected on MK's thought about computer-programing !? WHO is *behind* those software programs !? And WHAT "purpose" are those programs surving !?

1/ OPEC (and Russia) are blowing cold and warm about their $-POO intentions. Will see what comes out in June (next meeting). POO is currently ate the pain treshold.

2/ The US is negociating (through UN) with France, Germany and Russia, about Iraq.

Put 1/ and 2/ together and analyse if this has something to do with those financial-software-programs ?

Fresh suggestions about a One World Currency, are here again, whilst maturing EMU remains ridiculed !

The globe is facing the possibility/probability of a "dollar-vacuum" ! The dollar debtberg causing an overnight *** liquidity crisis ***,...a global one. Many, if not all maneuverings must be considered against this ONE single background, thought. A DOLLAR VACUUM,...not if, but when !?

A dollar vacuum, after the rejection of the dollar-reserve-system, will cause a distortion in the "known" global power balances. Here comes the China & Co-factor in play and must already be anticipated by the dollar supporters. Oil flow and price are pivotal in this game. In many localities, the same power struggle happens around "water" (or land-food).

As soon as all the above reaches the general public's intuitive sensors,...that same public reaches for the Gold refuge, without fully realizing that it goes for Wealth.

In other words, does one presents a permanent, lala-show, as to continiously entertain the public and prevent the rise of harmfull "suspicion" !? Right, containing GOLD (its price-trend), as the most universal and undisputable alarm-bell. The major goldmines are collaborating (!!!) in keeping this show running and collude in keeping the goldmining business' profits very close to break even !!! Think deep about this, non coincidence.

Exchange rates/IRs/POG/POO,...*** TRENDS ***, are NOT managed/manipulated by software programs (distributed to the priviledged -leading- hedge funds) ...but, the competing/collaborating/colluding factions of the ruling powers ! And don't you dare to go "against" those trends,...or be crushed and excluded. And don't make the mistake of promoting the hypocritical (usefull) noise-makers (distractors-contrarians),as heros.
Document yourself about the notion of "liquidity-trap" (fall out) and how much effort is brought up, to avoid it (IR-rise).

Think deep about the purpose of the many, voluntary "over" and "under" financial valuations. The "markets" are being contained as the general "political"-content of almost everything is on the dramatic increase. If one accepts that Gold and oil are "politically" driven,...then goldmines and oil companies are also politico enterprises ! All our confettis are per definition a politico-numeraire and NOT Wealth. Play, speculate, gamble on the political imponderabile as much and as good as you can,...but consolidate the eventual fruits in untouchable wealth, before you are being placed back to square one, again and again.

The above is nothing less than the main reason WHY Gold must remain excluded from (Western) public attention, BY ALL MEANS ! In such an environment, it speaks for itself that those who favor the return of Gold-Wealth, must operate extremely "discretely" in anticipation of the aftermath of the dollar-vacuum. Gold-Wealth-Philes (former dollar-supporters) don't want to be blamed for having caused (?) the collapse of the globe's dollar-system.

FWIW and NIA !

misetichDollar Bill (5/3/04; 23:44:04MT - msg#: 120636)#1206405/4/04; 03:55:06

Your comments

What I would like explained to me is how the derivitive markets handled Parmalet, enron, worldcom, ect.


Here's a link from a famed Greenspan speech that may offer a partial answer

"A change in behavior, however, may already be in train. The sharp decline in stock and bond prices after the collapse of Enron and WorldCom has chastened many of those responsible for questionable business practices. Corporate reputation is emerging out of the ashes of the debacle as a significant economic value. I hope that we will return to the earlier practices of firms competing for the reputation of having the most conservative and transparent set of books. "

and also

"Market transactions are inhibited if counterparties cannot rely on the accuracy of information. The ability to trust the word of a stranger still is an integral part of any sophisticated economy"

"Trust still plays a crucial role in one of the most rapidly growing segments of our financial system--the over-the-counter (OTC) derivatives market. This market has played an important and successful role in the management of risk at financial institutions, a major element of their corporate governance. I do not say that the success of the OTC derivatives market in creating greater financial flexibility is due solely to the prevalence of private reputation rather than public regulation. Still, the success to date clearly could not have been achieved were it not for counterparties’ substantial freedom from regulatory constraints on the terms of OTC contracts. This freedom allows derivatives counterparties to craft contracts that transfer risks in the most effective way to those most willing and financially capable of absorbing them. "

Perhaps the answer that you are seeking is best explained in the last paragraph -

Translation: Ponzi scheme is alive and well and getting bigger - thus Buffett warning - within 10 years

All Aboard The Gold Bull Express - Part ll

BelgianBoemboem-morning...#1206415/4/04; 04:00:53

Within a matter of minutes (!!!-minutes)...ALL dollar holders/users, outside the US, lost 1% in purchasing power !
€/$-1,20+ / $-POO:Brent $35+ (+1,8%).

Has China, suddenly reversed its stance on slowing down its economy ??? Or,...are the program traders adapting to the coming politico-message from FEDSpan, this afternoon ???

Now, the financial media, want to "connect" the POG with IRs. Another search for another convenient explanation.
Gold's $380$-$430 is heavely promoted as the ideal trading range. "They" want to keep telling "you", what "your" wealth IS !!!

Gold's price must, ad nauseum, remain connected with global "tension" ! More "tension" makes you wealthier...what an utterly nonsense.

Gold rises in $-price, because Greenspan will suggest to delay the rise of IRs and therefore, Gold's paper-price can be raised awaiting the IR-rise where all "must" jump into the dollar confetti, again. And out of Gold, of course.

Is this, financial management-manipulation-intervention, or all 3 at the same time ? Viva the Free Markets !

Financial media start to feel increasingly at uneasy with their confusing (bogus) inconsistant explanations about the rising $-POO ! Whilst they were shouting that it is Euroland (!!!) that is suffering the most from $-POO rises, the dollar weakened with 1% against that suffering euro (and cable-humhum). One day, they will have to start suggesting that there is something,...yeah, something, between the euro and oil...and,...AND...Gold !?

When the oil-owners see and realize that their, and the globe's "finite" oil-wealth is less and less renumerated/appreciate as wealth, we have the reactions that we are witnessing, now. The same goes for those who continue to accumulate physical Gold. Gold, underground gold is quasi finite, also. But Gold isn't consumed (burned) as oil is. Gold, when accumulated, is taken out of circulation and awaiting its FREE MARKET, to circulate again as PHYSICAL WEALTH instead of its present, ridicule, paper, non-wealth form ! A good, very good, idea...imvho, of course. Temporary Oil-wealth being gradually replaced by ever lasting Gold-wealth. This must be achieved by overcoming the dollar vacuum. That is what is happening in a very subtle and discrete manner.

misetichGermany and China adopt declaration on economic, political ties#1206425/4/04; 04:24:36


BERLIN : Chinese Premier Wen Jiabao and German Chancellor Gerhard Schroeder adopted a joint declaration boosting already strong trade ties and political links between their two countries.

At a press conference after their meeting in Berlin, in which they also watched over the signing of six major business contracts, the two leaders affirmed that they planned to boost trade significantly within the next six years.

"Trade between Germany and China is currently about 50 billion euros. We have fixed ourselves a goal of doubling that sum by 2010," said Schroeder, who is keen to tap into the huge potential of the world's most populous nation.

According to Roach-MS "fully 28% of total German export growth went to China" in 2003

and according to Peoople Daily

"The trade volume between China and Germany has amounted to 41.8billion US dollars, one-third of the total of China-Europe trade volume, said Wen, and "both China-German and China-Europe trade are expected to double by 2010". "

Europeans are tapping into China's vast market - The potential going forward is huge -

China currency reserves are primarily denominated in US $- however the prudent diversification and switch to Euro's - Gold is occurring and Euro's share will significant as a world reserve currency

All Aboard The Gold Bull Express - Part ll

BelgianEURO#1206435/4/04; 04:37:54

Heavy euro-buying from the Middle East ! Give us more Gold and a higher POG, or...!?

Ari, one more word on the counterfeiting of confetti notes :
We shouldn't worry about the increasing scale and ease of counterfeiting. W're going completely digital, anyway.
Maybe that the relatively cool, official attitude towards counterfeiting, is an early sign of admitting that attitudes towards money-monetary affairs are indeed evolving towards a new Gold-association...with a modern FreeGold (+ euro-numeraire) market in mind.

misetichOil Prices Raise Risks Of Dollar Correction#1206445/4/04; 05:08:23


LONDON (Dow Jones)--The latest rise in crude oil prices is adding to the dollar's growing downside risks.

Not only do higher oil prices raise deflationary fears because of their damping effect on the economy and reduce the chances of an early rise in U.S. interest rates, but they will suppress portfolio appetite for both bonds and equities, making it that much harder for the U.S. to attract the investment flows it needs.

"It will be so much more difficult for the dollar to fund the (current account) deficit," said Hans Redeker, chief currency strategist with BNP-Paribas in London.

To make matters worse, the rise in oil prices is coming just when the U.S. currency faces a possibly negative shift in transatlantic rate expectations.

Although neither the U.S. Federal Reserve nor the European Central Bank are expected to change their rates when they meet Tuesday and Thursday this week, the former is already expected to scale back expectations of an early rate rise and the latter is seen reducing forecasts for an early rate cut.

In other words, said Michael Metcalfe, currency strategist with State Street Bank in London, "investors have got too bearish about the euro and too positive about the dollar.
"The balance of risks for the dollar and interest rates are skewed one way and U.S. data aren't going to be enough to justify expectations," he said.

The impact of Madrid's bombing and subsequent effect on its political process - outstanding Azner and electing Zapatero-and changing of Spain from Pro US to Pro France/Germany cannot be underestimated

2004 Presidential election and oil disruption fears

In recent days oil facilities in Iraq and Saudi Arabia have been the target of attacks -which has resulted in the oil market fears of production disruption and hence skyrocketing prices

The US economy is fragile. The dollar rally is fragile. Oil and energy prices are sapping consumers and its effect are in the economic pipeline

What can the Feds do?

Increase IR? Make tax cuts permanent?

PPT has its hands full

- the oil market -
-commodities market (China is still red hot - regardless of the nonsense - project are still ongoing)

-The US $

-The gold market suppression scheme
-the SM
-LongTerm Interest Rates

The PPT is being challenged on all fronts

...and the employment report is very much expected - Job creation needs to be genuine...

All Aboard The Gold Bull Express - Part ll

TopazOil/Dollar#1206455/4/04; 05:37:34

This O/$ is an interesting liason, Futures have been in Backwardation now for several weeks which says to me the pressure is on for current supply, yet all reports indicate a dimunition of same. Oil can only go much higher if this continues. DX pressure intence this AM as a slight drop in Oil translated into a freefall for 'ol Buck ... NOBODY wants a higher Dollar ... and thats the rub!
misetichStates' Tax Receipts Rise, Leading to Some Surpluses#1206465/4/04; 06:42:47


WASHINGTON, May 2 — States across the country are reporting stronger tax collections this spring for the first time in three years, fueling hopes that the bleakest budget-cutting days of the economic downturn are over, state officials and fiscal experts say.
"Our economy has bottomed out and is improving slightly,"
But most of those surpluses are small and a dark cloud remains: tax revenues are not growing fast enough to offset the rapidly rising costs of Medicaid, pensions and education, which account for most state spending.
As a result, 33 states faced projected revenue shortfalls in their 2005 budgets, and about 20 are still struggling to close them, the survey, released last week by the conference, said. Most states' fiscal years begin on July 1 or Oct. 1.
Most states compensated for the lost revenue by cutting programs, raising tuition and fees, or borrowing, experts said

The economic rebound is very fragile - health cost are rising, price inflation rocketing higher - the shenanigans of govenrment falsified accounting reporting - assist politicians to stay in power - yet the taxpayers is burdened with reduced services, increased pay-as-you go fees, higher costs

An additional snippit from the article

"Though the recession was short-lived, tax revenues have been down in most states partly because hiring and the stock market — an increasingly important factor in state revenues — have not returned to their peak pre-recession levels."

Unless energy prices abate and genuine jobs are created its going to get interesting

All Aboard The Gold Bull Express - Part ll

BoilermakerBlack Box Orchestration#1206475/4/04; 06:53:17

Here's my take on Belgian's and MK's comments about hedge fund software.
When the Fed stepped in to save LTCM I believe they saw the need to orchestrate the hedge fund computer programs that create the ebb and flow of speculation. Knowledge about the hedgefund software allows the Fed to simulate changes in the variables that drive these programs and determine what tune gets played under various scenarios. The Fed then manipulates the variables under its control, acting as an orchestra leader, to create the "proper" investment waves. By this means they marshall the resources of large pools of supposedly independent capital to achieve their objectives.

misetichAs Household Debt Rises, New Risk in Higher Rates#1206485/4/04; 07:26:13


Household debt climbed at twice the pace of household income from the beginning of 2000 through 2003, according to data at the Federal Reserve. Enticed by low interest rates, Americans took on $2.3 trillion in new mortgage debt during that period - an increase of nearly 50 percent. Consumer credit, from zero-interest auto loans to the much more expensive debt on credit cards, climbed 33 percent, rising to $2 trillion in 2003 from $1.5 trillion in 2000.
Responding to lower interest rates last year, homeowners refinanced $140 billion worth of mortgages in which they borrowed additional money. Mortgage lenders, in the meantime, rolled out scores of new kinds of loans, allowing people to borrow far more than they might have contemplated a decade ago.

The new loans go well beyond adjustable-rate mortgages. They include interest-only loans; "no document" loans, which allow people to borrow money at higher rates without proving their income or assets; and "no ratio" loans, which simply ignore a person's monthly income.
According to data compiled by the Mortgage Bankers Association, the share of people who took adjustable-rate mortgages jumped to 32 percent in March from about 13 percent last July.
"There are an incredible number of loans that get approved now that would have been way out of bounds a few years ago," said Ruben Ybarra, president of the Chicagoland Home Mortgage Corporation. "I may think a person is being allowed to borrow too much. But if the computer tells them they're approved, what can you tell them?"
Alan Bubes, owner of a linen-supply service in Washington, is refinancing a mortgage of more than $1 million on the home he and his wife own in Georgetown. By switching to an interest-only mortgage that adjusts every month, Mr. Bubes expects to cut his monthly payments and reinvest those savings.

"It's a gamble," Mr. Bubes acknowledged, saying that he could make more by reinvesting his savings than paying down his debts

Incredible - "But if the computer tells them they're approved, what can you tell them?"

So the much touted economic recovery has been fuelled by consumers taking additional debt - additional risk- and government spending,

The switch to interest payment only and reinvest those savings strategy is very interesting - where exactly are those savings have been/being invested?

It would appear marketmania is alive and well - the stock market burst has not dented the avaricious appetite of a risk taking investor - even though trillions of perceived stock market vanished

Much hope is pinned on a stock market recovery not only by homeowners but by corporate and government pension plans.

The late 90's stock market mania fuelled greed - and it appears that most are one side of the same boat

How prepared are these reckless risk takers for ANOTHER stock market bear raid?

The scary part is that even with all these inflows the SM has not performed well.

A little insurance to one's portfolio with PHYSICAL GOLD in this over abundant risky times is very prudent strategy.

All Aboard The Gold Bull Express - Part ll

Clink!+$5 this morning !#1206495/4/04; 07:28:01

POG showing some life again. But only $1 to go before the capping cuts in ?
Belgian@misetich - @Boilermaker#1206505/4/04; 08:08:27

The writers of those articles you are posting, are (imo) simply filling blanc spaces of paper with ink.
The economy is for 2/3 a consumer affair. Commodity prices' impacts on this economy are much less than than the signal(s) that are given, by these commodity price rises, on the state of the currencies. Oil in particular is devaluing the (hyperinflating) dollar more than it is devaluing the (inflating) euro. A "HYPER" bit of difference between the two competitors. Whilst IRs on $-€ remain very low in regard to the hyperinfla/infla growth of $-€ money creation,..."general" price-hyperinfla and infla are awaiting to break out. Remember the story of the two runners ($-€) in the desert and the hungry (flafla)lion.

Boilermaker : Watch the $-POG chart on the period around 1992-1995. (before LTCM) : It is in this period that M3 started its para(hyper)bolic rise and it is here that POG-containment was fully organized and the Dow surge as well.
In other words : When more confetti is created, everybody must do its share in making that confetti "circulate" and by preference at the desired speed/velocity, as directed by the confetti creator.

Yes, indeed Sir..."orchestration" !

OvSBelgian, do you mean "orchestrate" as in:#1206515/4/04; 10:18:48

orc = as in ogre(hideous giant who feeds on human flesh).
estrade = a throne of state
In times like now we need more of your imput, Sir Belgian.
Are you metamorphosing out of FOA? OvS

misetichChallenger Job-Cut Report #1206525/4/04; 10:48:33


The Challenger job cut report revealed that 72,184 layoffs were announced in April, up 6.1 percent from the March pace

Jobless recovery continues

All Aboard The Gold Bull Express - Part ll

USAGOLD / Centennial Precious Metals, Inc.Your friend in the business, helping you enter the gold market with grace and confidence.#1206535/4/04; 10:48:56">Change paper into gold!
Belgian@OvS#1206545/4/04; 11:02:55

Yes, something like Orc Estrada.
No I'm not metamorphosing out of the A/FOA-group. I was rather extremely critical (or confused) when first reading their thoughts.
But time and time again, the factual events can only be explaned consistently, with taking their far reaching thoughts in the background.

According to the 8 yr Gold(paper-price) cycles (top to top or bottom to bottom), that seemed to have some consistancy since the 1971 event, Gold should top in 2004 (see LT charts Aden sisters). We already had 4 of those $-POG tops ('74-'80-'87-'96-'X ?). But today the $-POO went through a strong ceiling with gusto. Most probably, strong factual evidence that something IS changing with the (orchestrated) ritme of the past 3 decades. As is the geo-political constellation. Will see OvS...will see.

Great Albino BatOff topic, but ASTOUNDING!#1206555/4/04; 11:05:25

Please check out this article. Note the size of the human figure. Is this some kind of joke? If not, it is totally mind-boggling.

USAgold, please excuse the interruption. This must be seen!


Great Albino BatProfuse apologies! It IS a joke.#1206565/4/04; 11:07:54

Sorry about that.


Clink!@ANOO#1206575/4/04; 11:25:23

Luckily, no apologies are necessary, because of the GOLD ring she was wearing (it's a little difficult to make out from the angle of the photo, but I can assure you .....)

Clink!@GAB #1206585/4/04; 11:27:32

Good Grief ! Now it's my turn for the profuse apologies !

GoldiloxLarge Skeleton#1206595/4/04; 11:41:29

@ GAB:

I always wondered what happened to the actor from "Gulliver's Travels" and "Jason and the Argonauts".

geOn program trading#1206605/4/04; 12:33:48

"Market Wizards", Jack Schwager's book on the living legendary traders, is where I met some public information on mechanical trading systems. Richard Dennis appears to be one of the pioneers of the system. He proposed that trading could be taught.

The underlying mathematics of mechanical systems is identical to the underlying mathematics of casino gambling. The aim is to construct a system that has a "positive mathematical expectation", and then use this system with a good bet sizing method. According to Ralph Vince, "when it comes to casino gambling , the only time you can find a positive expectancy situation is if you keep track of the cards in blackjack, and then if you are a very good player, and only if you bet correctly". One can Google with "Ralph Vince" or "bet sizing" for more info. However you look at it, this is not investing but gambling.

See the story of Turtle Traders.

The original Turtle System has also been released.

The system is somewhat complicated, but a summary can be tried. It is a trend following system. It goes long after the highest high of last 55 days is penetrated. Closes the long position when the lowest low of last 20 days is violated. This is the so called "channel break out" system. Similarly, it goes short when the lowest low of last 55 days "breaks". The long position is closed when the highest high of last 20 days is penetrated

Since the distance between the entry and exit points can be too much, protective stops are placed. 20 day Average True Range (ATR) is the average of the daily bar heights of last 20 days, where opening gaps are added to the bar height. For long positions, stops are placed 2*ATR below the entry point. Similarly for short positions, they are placed 2*ATR above the entries. Bet size is selected so that the dollar volatility of the contract is not greater than 1% of the equity. There are also upper limits to the bet sizes. . I have skipped many other details. See the above link for a complete description.

The ideal account size for using this system, is said to be >= $1,000,000.- Otherwise, mathematically, the probability of losing all the money is high. See the forum;

So do not try this system if you do not have $1 million to bet!

Lately, Jim Sinclair's description of an un-named fund manager in the Comex suggests that, the fund might be using a similar system. It was as if they went long after a breakout and were then stopped out. As the price fell, another breakout signal might have been triggered, as Sinclair says that they then shorted the market.

Mind you, the above description of the trading system may look very scientific, but Sinclair was very amused with the fund's methods and commented that the guy very badly needed help on timing, as the commercials fleeced him. He is of the opinion that his short position is now a sitting target for Asian and Islamic interests.


Well, if "everyone" acts, say, at 20 day breakouts (as some shorter term systems say) and if "everyone" had account size of $1 million or greater, then, this could be like watching a herd of excited elephants, running at the same direction.

misetichText of FOMC statement - federal funds rate at 1 percent#1206615/4/04; 12:34:10

The Federal Open Market Committee decided today to keep its target for the federal funds rate at 1 percent.

The Committee continues to believe that an accommodative stance of monetary policy, coupled with robust underlying growth in productivity, is providing important ongoing support to economic activity. The evidence accumulated over the intermeeting period indicates that output is continuing to expand at a solid rate and hiring appears to have picked up. Although incoming inflation data have moved somewhat higher, long-term inflation expectations appear to have remained well contained.

The Committee perceives the upside and downside risks to the attainment of sustainable growth for the next few quarters are roughly equal. Similarly, the risks to the goal of price stability have moved into balance. At this juncture, with inflation low and resource use slack, the Committee believes that policy accommodation can be removed at a pace that is likely to be measured.


News from fantasy land:" At this juncture with inflation low -"

Meanwhile in the real world Oil tops $39 to tap a fresh 13-year high expected it will be a gradual rise as "hiring appears to have picked up"

Translation: will increase rate very little and very slowly UNTIL re-employment takes place

All Aboard The Gold Bull Express - Part ll

misetichDrivers Tend to Shrug Off High Gas Prices, for Now #1206625/4/04; 13:05:31


Iraq exports about 500,000 fewer barrels of crude a day than it did before the war, and Venezuela's output is still about 500,000 barrels a day short of where it was before the general strikes that rocked the country in early 2003, said Roger Diwan, managing director at PFC Energy, a Washington consulting firm.
Several times in the last four years, gasoline prices have briefly spiked over $2 a gallon in parts of the country, only to fall back. But today's fuel prices are no spike. For nearly a month, the national average has been around $1.79 a gallon, the highest on record.
Many Americans have done little beyond grousing about the cost of gasoline because they do not believe fuel prices will linger at such levels for long. "No one really believes yet that these high prices are here to stay," said Mark Zandi, president of, a research firm in West Chester, Pa. "They are used to seeing prices go up and down so much over the last 10 years."

Consumers and business are in for a surprise - as energy prices keep on climbing

China's energy demand - refinery capacity/shutdowns- geopolitical tensions - antiquated electrical grids-

Lookout if its a hot summer- natural gas prices, electricity prices etc will go through the roof

All Aboard The Gold Bull Express - Part ll

TownCrierThe 'China factor'#1206635/4/04; 13:15:59

HEADLINE: China's appetite for metals seen largely intact


LONDON, May 4 (Reuters) - China's hunger for raw materials will drive further demand for commodities such as metals despite worries that the country's economy might overheat...

Metals prices fell sharply last week, with China seen as the chief cause amid increasingly stringent measures being implemented by Beijing to stop the economy overcooking after it grew 9.1 percent last year.

But the panel said last week's losses were no cause for panic, and rather proof that the country was in a substantial economic cycle lasting more than 15 years.

"There are only a few sectors in China that are truly overheated...there are very large sectors of the economy that are not overheated at all,"... "It's very hyper, extremely bullish...that the Chinese prevent a bubble and there's absolutely no doubt that they will be able to do so."

Frank Holmes, chairman of fund manager U.S. Global Investors, said talk of a bubble in China was premature.

"People are calling everything that goes through a dramatic turning point a bubble," he said.

...China's rapid growth was driven by large-scale industrial production, which marked a major transformation.

"China is going through another transition...They are doing everything to build up the rural community."

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

The 'Phrase of the Day' Award goes to our very own Belgian, who said, regarding the perception painted by the financial media,

"Gold's price must, ad nauseum, remain connected with global "tension" ! More "tension" makes you wealthier...what an utterly nonsense."

Bravo! I mention this observation in the context of this article because it should help make it apparent to skeptics by thinking/seeing how the (hopefully peaceful) growth and emergence of much of rural China from third world status can usher in a whole new perspective on the true value of tangible assets.

That is to say, you can't make a brick wall or a leak-free roof out of merely counterparty promises. You need the goods, in hand, to stand out of the rain.


DruidWhat Gold and Silver Analysts Overlook#1206645/4/04; 13:24:20

"Backwardation in gold has a perverse effect. In the case of agricultural commodities backwardation provides a powerful incentive for traders to sell the cash commodity and buy the futures. Not so in the case of gold. Rather than bringing out deliverable supplies of gold, backwardation tends to remove them. The more the gold basis falls, the less likely it becomes that owners will exchange their cash gold for futures. Please remember that you have seen it here first. This perversion of the gold basis constitutes the self-destroying mechanism of the regime of irredeemable currency. The longs tend to take delivery on their gold futures contracts in ever greater numbers, and refuse to recycle cash gold into futures, regardless how low the gold basis may go. As it is not set up to satisfy demand for delivery on 100 percent of the open interest, the gold futures market will default. Exchange officials will declare a "liquidation only" policy to offset long positions in gold. At that point all offers to sell cash gold will be withdrawn. Gold is not for sale at any price. The shorts are absolved of their failure to deliver on their gold futures contracts."

Druid: I do enjoy reading the good Professor but he needs to walk the "trail" here at

misetichShadow Open Committee - Inflation Trends and the Federal Reserve #1206655/4/04; 14:04:21


Inflation has completed a virtual 4-decade "roundtrip", receding to levels not seen since the early-1960s.
It is noteworthy that Phillips Curve-type NAIRU frameworks and GDP- gap
unvarnished by ex post revisions of estimates of the natural rate and potential growth, failed to accurately predict either the sharp acceleration of inflation in the 1970s or the
disinflationary trend of the 1980s-1990s.
Monetary policy remains very stimulative, as reflected by the negative real federal funds rate, the steep yield curve and money growth, and points toward sustained rapid nominal spending growth. The money stock, which declined slightly during August-December 2003, presumably associated with the sharp fall-off in mortgage refinancing activity, has reaccelerated. In the first 15 weeks of 2004, M2 has resumed its prior growth pace of just above 8 percent annualized, while MZM and the monetary base have also resumed their earlier growth rates. A negative real federal funds rate should generate continued money growth, while money velocity has begun to rise in response to the recent backup in interest rates, the rebound in household wealth and a reduction in the uncertainty that had previously inhibited spending
The consequences of even moderate increases in inflation and inflationary expectations may be significant
Federal Reserve Behavior During Presidential Election Years
The exception year was 1972, when Federal Reserve Chairman Arthur Burns seemingly maintained a more accommodative monetary policy than economic and inflation conditions required presumably in an attempt to aid President Nixon's re -election bid (White House transcripts confirm President Nixon’ s request to Burns that the Fed remain accommodative,
but they do not include Burns's response). Real GDP growth accelerated to 7.1 percent from 1971Q4-1972Q4— by far the fastest of any recent Presidential election year— and the unemployment rate receded— as aggressive monetary and fiscal stimulus policies stimulated robust aggregate demand growth (11.75 percent in 1972, while wage and price controls imposed by President Nixon in August 1971 constrained measured inflation to 3.5 percent.

The "strong" US $ - low energy prices - of the late 90's are now history
Import prices are rising as are commodities - Asset inflation is skyrocketing

Inflation expectations are rising! as individuals "short the dollar" further by borrowing and spending

Gold - physical gold - is the ultimate storage of wealth

All Aboard The Gold Bull Express - Part ll

TownCrierUS market wrap, plus 24-hr newswire#1206665/4/04; 14:08:38 excerpts:

Gold futures end at a one-week high

misetichShadow Open Market Committee - Can We Avert the Next Financial Crisis?#1206675/4/04; 14:24:32


But now a second front has emerged on recognizing the burden that Fannie and Freddie could impose on our economy -- and that risk is interest rate risk. For some time now, Fannie Mae and Freddie Mac have taken the rather unusual step of buying back their own securities and issuing long term debt. This fact has been established by Professor Dwight Jaffee of the University of California, Berkeley, who calculates that Fannie and Freddie have been annually repurchasing approximately 50% of their newly issued mortgage backed securities. So they purchase mortgages, repackage them into bundled securities and then buy back their own created securities, which seems strange until you look at the evidence of how much money this has made Fannie and Freddie.
This unusual portfolio strategy, though profitable, has exposed them to interest rate and pre-payment risk. And the strategy seems unusual since doesn't it re - introduce the exact type of risk that the GSE's were supposed to sell-off? However, given the size and nature of their portfolio, and the likely forthcoming change in interest rate policy by the Federal Open Market Committee, these risks are large. Now financial institutions are in the business of balancing risks, and Fannie and Freddie have some talented individuals who can help them hedge this risk, but they don't play by the same rule s as everyone else. Indeed, private financial institutions are regulated and supervised to hold a sufficient amount of capital (i.e. safe assets to cover liabilities in case of a deterioration in their risk assets), but Fannie and Freddie are not required to satisfy these high capital standards. Instead, they have a remarkably reduced level of capital viv-a-vis their regulated competitors, and Fannie and Freddie use their presumed implicit guarantee to offset whatever penalty the market would place in terms of a higher cost of raising funds on their risky behavior.
So the general policy thrust towards these GSE's has been to recognize the risks, and to help avert a financial crisis that could impact the entire housing market. What is the GSE's response? The first is to lobby harder.
In 2003 Freddie Mac was rocked by an accounting scandal that forced the restatement of earnings from 2000-2002 and led to the exit of the CEO, CFO and COO. Not to be outdone, the OFHEO reported in early April 2004 that its examination of Fannie Mae suggests that they may to restate past earnings.
Hmm. Excessive lobbying, accounting scandals and excessive pay. Sound familiar? Let me connect the dots for you. These are the three pillars of a looming financial crisis, a combination we have grown too familiar with during the days of Enron, WorldCom, etc… But in those cases we learned to late. But not so in this case! Fannie and Freddie can be brought under stricter oversight and regulation as well as improved capital standards. And the implicit backing by the Federal government they receive can be explicitly removed. Let's hope that our Government can deliver these key policy ingredients, and avert the financial crisis that awaits us if they don't.

GSE's are an accident ready to happen

All Aboard The Gold Bull Express - Part ll

Great Albino BatDruid: your post 120662, with a snippet from Fekete's essay...#1206685/4/04; 16:21:55

You say you "enjoy reading the good Professor, but he needs to "walk the Trail" here at usagold."

Please explain what you mean by that comment. Your tone appears snide.

The GAB is interested in reading what you have to say.


Henry BowmanGAB --- Your Giant#1206695/4/04; 20:16:47

Is it true that the picture was a hoax?

There have been reports of gigantic skeletons having been found all over the world for centuries. But the physical evidence seems to quickly disappear.

OvSWorld-dominance#1206705/4/04; 20:17:52

Would it make a differene to your analysis,
Sir Belgian, if this world is already a
de facto One-World, dominated by New York,
which for years calls itself the Capitol of
the World?
Is the fact that the USA has troops in 140
countries around the world an indication?
Is the fact that it can dispatch its agents
to humiliate the Sterling or devastate Malay-
sia with currency raids at will an indication?
Or, have other agents, major New York City
trading houses, wait for clearance to enter
the Japanese market as brokers and traders, and than within no time smash a roaring stock and real estate market into submission, an indication? Or brutelize the major continental markets with
bear raids that still have them below half
their original value? To show, who the boss is.
So, there are a few Roman, oops, I mean American
provinces violently opposed to the New Holy Roman,
oops, American World Empire. So what. The major
Continental Powers, against all appearances, are
in collusion, the Chinese are, the Russians were
made to, Japan of course is, and the rest really
doesn't amount to much at the moment. So a few
Provinces are on fire. They are being contained.
The American Soldier is the Universal Policeman
and the rest of the world has to pay tribute by
accepting ever increasing dollars. Just a form
of paying taxes for the police-function.

Sir Belgian. Let's assume that you agree with this
proposition. How does that impact your gold theory?

Well, the board is quiet. If this doesn't get them
coming with replies, I'll call the coroner...OvS

1340ccWhen Giants Walked the Earth#1206715/4/04; 20:22:51

This one is larger than the ones I read about who were buried with many gold objects. There was a special on TV a few years ago and I think something on the net a couple of years ago about "giants". It seems like they were 12 -18 feet tall. Don't remember much abou it but I have never read any thing to dispute it. This is nothing new.
OvSHenri Bowman#1206725/4/04; 20:25:30

Are you a big bone conspiracy man?
My theory is the Chinese black market
gobbled them up. They can turn any
bone into very valuable medicine. Try
your Chinatown. And take a look at
their thriving gold retail and whole-
sale market. Something to behold.

1340ccWeb Site for Giants Info.#1206735/4/04; 20:37:11

Sorry if this is not allowed. Please feel free to delete if so.
A web site for Giants is

Cavan ManLet the games begin.....#1206745/4/04; 20:51:22

ATHENS (Reuters) - Three timebombs exploded outside a central Athens police station early on Wednesday but caused no serious casualties, a police official said.
Authorities had cordoned off the area around the station in Kalithea after an anonymous caller warned a newspaper about them, the official said.

"The first two explosions went off in a span of five minutes. The third exploded half an hour later as bomb experts were still looking for it," the police official told Reuters.

mikal@Belgium- : Bombs Rock Central Athens Police Station#1206755/4/04; 20:58:14

While I agree with your numerous pro-gold statements today,
including the premise that gold's worth is entirely independent of geopolitical tension, I feel the following breaking news is useful to us in signalling a breakdown
of old security assumptions as well as further transitions in international strategic alliances. The actions against Greece today for example, if they continue, could lead Greece to various actions, including greater reliance on Gold and Euro vs Dollar investments as well as less dependency on Nato and/or US "security" arrangements:
According to ABC and Reuters, 3 blasts today hit a central Athens police station. As the Olympics is scheduled for August in Greece, many are increasingly concerned
that the games will attract political violence.

White HillsMisetick#1206765/4/04; 21:19:04

I think that in the coming storm that will hit the financial markets your post concerning GSE's will be looked at as a warning that too few paid little attention to what is happening as we speak. Two or three years ago I posted on this forum concerning the Real Estate Bubble and what it would mean when it crashed. I would never have imagined that it could possibly grow to the size it has but then again I never considered the thirst for debt that TPTB needed to keep the whole thing going. Rising interest rates will be a disaster for the Real Estate Market I don't really have any more info than anybody else concerning these things but I do know what a Lender of Last resort has meant to all the scoundrels con men and easy buck guys out there busily cobbeling up all the cash they can before the bottom drops out. The scandel will be great and of course GWB will be blamed. The rest of us will get little or no warning except perhaps this very important post by Misetich. White Hills
mikalGreece#1206775/4/04; 21:19:28,1280,-4054795,00.html

Sky news and Bloomberg report that one man was slightly injured. This is good news. Another story from the Guardian gives some perspective on past incidents:
Bombs Go Off Outside Athens Police Station
Wednesday May 5, 2004 3:46 AM
ATHENS, Greece (AP) -Excerpt:

"Police believe the bombs at the southern district of Kalithea were intended to injure people despite the tip to the newspaper. Greek media reported that the damage was extensive. Authorities cordoned off the area. Greek authorities claimed they crippled domestic terrorism following the convictions in December of 19 members of the group, blamed for 23 killings and dozens of other attacks since 1975. The victims include four U.S. officials, two Turkish diplomats and a British defense envoy. But smaller groups have continued to carry out bombings and arson attacks in Athens and other cities, but most are against cars and commercial targets and rarely cause injuries."

mikalCorrection#1206785/4/04; 21:23:04

Re: "This is good news." It is not good news that someone was injured. It is good news that it was not worse.
White HillsOSV#1206795/4/04; 21:23:42

Quit smoking that stuff it will stunt your growth. White Hills
DruidGreat Albino Bat (5/4/04; 16:21:55MT - msg#: 120668)#1206805/4/04; 21:43:18

"Druid: your post 120662, with a snippet from Fekete's essay...

You say you "enjoy reading the good Professor, but he needs to "walk the Trail" here at usagold."

Please explain what you mean by that comment. Your tone appears snide.

The GAB is interested in reading what you have to say.

The GAB"
Druid: GAB, you are very correct in that I should have elaborated a lot more but due to time constraints fell very short of the mark.

First off, I'm a Fekete fan as I have been reading his work for about four years now. So if I came off a little snide I certainly apologize for doing so.

His article was an incredible read and in that particular paragraph I previously posted, he commented that...

"Please remember that you have seen it here first"

as he alluded to his preceding commentary. If I'm not mistaken, I am pretty sure that FOA had already covered what Prof. Fekete had described some three years earlier. In fact, I believe FOA went into great detail describing the events that would lead to a "paper market" default in the gold futures market, as the longs would actually be the catalyst to such an event. Below I have posted a couple of quick comments by FOA that suggest such an event.

If I botched this one all up, I apologize to you and all of the rest of the knights.
FOA (08/06/01; 09:37:25MT - msg#91)
Gold Mobilization

"The nature of the current dollar based gold market, outside US borders, is perhaps leveraged 1,000+ to one and will require ever greater physical gold shipments, at ever higher values, to maintain dollar credibility. This failure process will draw US gold stores out in the form of "currency
defense"; not as gold sales aimed at keeping the price down. A purely legal defense use of politically owned gold.

Still, gold shipments will always be far behind the price curve and only be done as last resort crisis operations. Further, the rise will be so intense as to provoke a complete cessation of all derivative gold trading within US borders. Long before this occurs traders, both foreign and local, will bail out of our gold derivative markets even as physical prices rise. A spot physical gold market will be all that remains. Something local citizens will cherish and paper brokers will deplore!"

FOA (08/31/01; 16:03:51MT - msg#106)
Off the trail and on the road! (smile)

"I expect gold to do a sky shot, not because of coming us inflation, but first because of a paper gold market abandonment. Then, super dollar price inflation will only drive it higher."

OvSWhite Hills#1206815/4/04; 22:26:21

Whatever it takes, when I can rouse you
from the dead, it's SUCCESS. Cheers. OvS

Black BladeCalifornia May Declare First Gasoline Emergency in 15 Years #1206825/4/04; 23:23:07


May 4 (Bloomberg) -- California regulators may declare the first motor-fuels emergency in 15 years amid concern the rupture of a Kinder Morgan Energy Partners LP pipeline may cause shortages of gasoline and diesel, and further price increases.

Black Blade: Interesting article and meanwhile oil just popped $39/bbl tonight too. It would not be surprising to see oil bounce to nearly $60/bbl by next year and then rise further (Ditto for NatGas). No wonder Alan Greenspan is talking energy over the last few months. No fear though as it is not counted in the "core rate". ;-)

Black BladeMy view for higher oil prices: Oil is a finite reserve. US Dollars are not.#1206835/4/04; 23:37:47


The job of a dollar is to chase something you need or want. We can't make more oil, but we can make more dollars to chase and capture our quarry. So the more dollars you make to chase oil, the faster it will run (inflation) or be completely overwhelmed. To say otherwise, violates Newton's Third Law of Motion. Every action has an equal and opposite reaction. All we are experiencing right now is a little TURBO lag. Oil should be much higher. The Saudis will not let anyone check their reserves. Monkey business is a given, so take the worst-case scenario x10. Venezuela is the forth largest oil exporter to the U. S. and have already threatened to use an oil embargo to achieve some leverage over the U.S. Iraq is a big question mark at this time.

Black Blade: Take my word for it (and several others in the biz) - Saudi oil production has already peaked. We need an increase of 3.3 million bbl/oil per day increase each year to just keep pace in worldwide demand growth and guess what? - It ain't happening!

Black BladeHigh oil prices hitting world recovery, IEA warns #1206845/4/04; 23:50:25


High oil prices over the past five years are dampening the global economic recovery and causing inflation and fiscal problems in oil-importing countries, a report from the International Energy Agency said on Monday. The report follows a chorus of warnings from policymakers in Europe and the US about the impact of high-energy prices on global economic prospects.

Black Blade: And just a couple of years ago Alan Greenspan said that high energy prices were unimportant and just a small part of the economy. Uh huh. ;-)

Better get Gold and Silver for the rapid surge of inflation coming down the road.

otish mountainGAB re: Antal Fekete#1206855/4/04; 23:55:47

If I may jump in here. I find Mr. Fekete's writings are very informative and he has devoted a lot of effort. I agree with a lot of his findings. His essays on bonds and interest rates are profound. I do feel that he has taken Another trail though. Free gold is not part of his teachings, he wishes to include gold in a "monetary system".
The url posted lists many of his essays, its been a while since I have read them and shall refresh myself with his works.

Black BladeOil Prices Soar#1206865/5/04; 00:07:05


OPEC oil ministers, who control around 40 percent of world exports, have said that the price surge is driven by forces out of their hands. The group cut production quotas by four percent to 23.5 million barrels per day (bpd) from April 1. Kuwait's oil minister said Monday that high oil prices would encourage the cartel to keep pumping above official output limits. Fellow Gulf producer, United Arab Emirates, said OPEC might raise official output quotas in the third quarter to replenish stocks. OPEC ministers are due to meet June 3 in Beirut to review production policy.

Black Blade: Sorry but the UAE and Oman have BP consultants and others struggling to reverse a precipitous decline in reserves and falling production. The article and OPEC claims are laughable. Besides, with a weaker USD they cannot afford to lower prices or increase production (even if it were possible). In short - "Game Over"!

BTW, oil is tipping toward $40/bbl now. No or low inflation according to US officials. heh heh. Get some PMs for "portfolio insurance" soon!

BelgianOvS / Mikal#1206875/5/04; 00:39:36

OvS : World dominance ? Some 60 years ago, we had something like a Third Reich thing, overhere. Those times still put everything that happens today, in the shadow, for the time being.
And you know how this Reich imploded and what came out of it. Old Europe morphed into the new Euroland working on one major characteristic : STABILITY !

I am not impressed (worried) by any AA ambitions for world dominance/one world achievements for as long as this planet evolves with counterbalancing forces. There are enough reasons to remain a realistic optimist about global affairs.

The Gold theory : Is in essence an extremely simple one : Currencies have a limited lifetime ! Whatever the events may be, during that lifetime.

Mikal : I don't see what the turbulence in Greece might do to Gold (or euro). These (minor) events are not going to affect the mainstream trends that are already in evolution.

Euroland (& Co), as a willing stabilizing force, wishes a smooth transition from a probable dollar-vacuum.
All those who see advantages in "de-stabilization" of any kind, will always encounter cool heads, who have much to lose with general destabilization (terror-antiterror).
All these different forces make the shifts from chaos to order and backwards.

In the mean time, the Gold theory keeps evolving, anyway.
Pro and contra Gold forces, remain,... change as time goes by and old habits die/alter. The world,... life, is cyclic and not linear.

The above 2 cents philosophy always brings up that same old question...WHEN will it happen !? I remain convinced it IS happening, now ! 999,9% of goldwatchers see nothing and keep considering goldmatters as they have done for the past 25 years. The management/manipulation/intervention of the "price" of Gold, makes it all in-visible. The same is being done with oil. But here the POO is managed by other forces who are shifting away from the dollar and leave it to the dollar as to find 1001 explanations (tensions) for oil's particular price-trends. The $-POG is, for the time being, not of such a nature that it attracts general suspicion. There is not an open-visible, confrontation, on Gold, yet ! The struggle on/about Gold is happening rather subtle with deep underwater currents. This in sharp contrast with the war(s) on oil and its price.

The same subtle struggles are taking place between the 2 competing currencies. Here we have very little explanations from the $ and € camp as well.

The accumulated cosmic debt-load on the dollar is irreversable and the reason that the dollar nears the end of its lifetime in its function as global reserve. No minor/major events of whatever nature is going to change this inevitability. The rise and fall of the former "sterling" empire is illustrative of how the decay process of a (any) currency takes place. The major fact that Euroland (ECB-BIS) has everything in place to anticipate the final outcome of this dollar-process, speaks for the euro and EMU.

I'm repeating this, as to point that very little does change, alter, ongoing major processes. The Red Shields, recently, gave a strong message about things golden. I am not a fish in their bowl and leave the correct decodation of their message to other speculators. But there was "a message"...and that's enough confirmation for me, the shrimp.

Another event to decode correctly is the recent, sudden $-exchange rate decline versus the €, whilst hearing the financial media stressing on and on about how dynamic the US economy is, in contrast with the lame Euroland activities !? Look for the awakening Gold-factor in this "systemic", deceptive, perception building.

_ _ _ _

Canal Plus (France) is showing some shocking images of atrocities in Iraq. The quartet is involved in Israel, again. The Arabian desert oilreserves, a blessing or a curse,...$-€ economy... !?

Unimog@ Belgian#1206885/5/04; 01:30:03

Goodmorning Belgian,

In reply to your msg#: 120650. How "orchestrates" the Fed the money velocity ?
Suppose that every oil-producing country immediately converts its dollar oil revenues to euros ? I suppose this happens already. Why doesn't that cause a sharp decline in the $-POO/$-POG ?

The CoinGuyGAB...#1206895/5/04; 01:32:39

Normally, I don't post on small comments like these..perhaps I might mention that I don't like to intervene as well.

Feteke espouses the exact opposite of Another's theories..I personally thought this obvious. Government gold, or free gold. I personally as well as the others in my small circle of opinion(some may consider large) have thrown our opinion as well as our wealth behind the free gold concept. Of course this is after many years of research.

We weren't whole-hearted until we read Ari's speech last year...(and I will mention, Ari is not given enough consideration for what his mind carries). Then we realized, although we could take delivery of all contracts. The realization is we couldn't. Perhaps you might take this into consideration, and thank Ari for exposing the myth. Yes, the game is ours, but the truth in physical is not. This is the discussion and the game that goes around this table for the last few....years.

I assure you Feteke's ideals aren't worth the's typed on. Personally, I've seen no written opinions placed other than Belgian's that has been willing to further discuss the trail we find ourselves on.

At this stage of the game...

Until the trail guide returns I don't see any reason to further my THOUGHTS, or anyone elses.

Thoughts from Omaha...

The CoinGuy

BelgianBB / OM#1206905/5/04; 01:56:39

BB : About the ever remaining (and altering) controverses of the known/unknown (proven-probable) oil-reserves : IF,...IFffff, there should exist the slightiest consensus, that we are going to run out of sufficiant oil within the next 50 years,...all the possible alternatives, would already be running full steam ahead, wich is NOT the case !

It is the *CHEAP-DOLLAR-OIL* era that is over ! Remember that I mentioned the LPG-thing as existing alternative + existing infrastructure, here in Euroland.
The remaining oilreserves wish to be correctly VALUED ! That is a much bigger problem for the global economy and its rapport de forces, rather than the question of how much reserves there remain. Once the remaining vital/essential energy resources are generally correctly Valued and paid for, then the oil/gas flow will be rich and abundant. We have been shrewdly "stealing" (maybe a somewhat wrong wording...?) those resources and made ourselve prosper with these fundamental basics of our Western economy.

We succeeded in over-valueing our achievements whilst at the same time extremely under-valueing those basics that made it possible to become wealthy. Isn't it amazing that all those areas, rich in natural resources, are still living like the Flinstones ?

Double, triple... the gas price at the US gas stations and in no time, Americans consume half the present amount of oil. Then the lifetime of the remaining oil reserves must be reviewed, again.

The "new oil" is undermining the dollar's status and that is a much bigger problem, today, than the probable decline of the proven oilreserves. If one's oil is not correctly Valued, one obstructs the flow of it, up until the correct Valuations come to oil. Who is permanently going to "give away" his "wealth", certainly when the owners of that wealth are becoming more "conscious" about that wealth ?

See what's happening today in oil rich Nigeria (300 deaths)!? What was the meaning of Libya's Khadaffi visit in Brussels, recently !? Have you (others) any idea about the oil reserves in Libya or Sudan ?

It seems to me that everything is pointing towards staying on the oil course, for the time being. I personally don't worry about the remaining reserves or the supposed problems in oil flows, that can be resolved in no time on condition we just pay for what it is worth . Eurolanders know the cost (luxus) of energy.

OM : Indeed Sir,...Prof. A. Fekete, hasn't yet beeing considering FreeGold to my knowledge. He seems to remain rather silent about the idea. But so does everybody else.
As if FreeGold should mean "complete disasterous collapse" on wich I totally disagree. The globe's monetary affairs kept on running with a fixed goldprice of $35 from 1933 to 1971. The world didn't collapse in the aftermath of 1971 or with a POG of $850 in 1980 or with $253 in 1999.

...The world isn't even collapsing with almost zero % IRs ! Aren't we an extremely adaptive human specy !? And yet, something BIG is changing, because we are steadily mutating into a financial/monetary, ugly troll ! Amen.

BelgianMorning Unimog#1206915/5/04; 03:11:03

First : The dollar IS still the world's currency !!!
Those who wish to "gradually" (!!!) leave the dollar, and gradually shift into the euro...still do have to settle their oil-trades, in dollars first !
By leaving the dollar for the euro, one is in fact depreciating the dollar in favor of the euro. This first step in (systemic-planned) depreciation, becomes visible in
in the $-€ exchange rate AND of course in the $-POO, wich must rise (not decline as you suggest), because of the depreciation of the dollar-currency in wich one settles the oil trade.

When this dollar depreciation by oil, becomes more wide spread (broader support) and the euro gives evidence of permanent stability under all circumstances,...the next step can be executed : oil for euro, without having to go over the dollar. We are talking about a "process" here, Unimog...not about a war-mission accomplished and no peace for the foreseeable future.

All big "transitions" do take time, if one wishes to have it happen smoothly.

Once one believes that this major transition is on the rails, irreversable and gaining momentum,... one has no problem in making the choice of constantly buying/accumulating the POG-dips (Gold Wealth), wich are taking place at an obscene low price-level.

After the constant period of declining $-exchange rate comes the breaking point where a low/lower-weak/weaker dollar gets fully translated in domestic general price-inflation, wich will speed up the ongoing process of dollar depreciation up until a point where there is a massive dollar flight and the dollar loses its status and any further support from outside (the process).

The dollar is in the impossibility to organize a reversal of this process. It is only the speed of its decline that can be managed to some extend. Twin deficits and the debtberg !

are taking place

NedTidbits#1206925/5/04; 03:52:27

Woke up yesterday to the highest EVAR! gas prices in these neck of the woods.

Gold stocks definitely 'lead' yesterday. Hopefully an omen that POG is to cross back over $400 shortly.

POG is asserting itself again this morning (hope I didn't jinx it), perhaps the traders have seen the light!

Have a golden day.

misetichJessica Cross - the gold price is at the mercy of currency movements, especially the dollar,#1206935/5/04; 04:45:41


She said that, probably before the first quarter of 2005, if President Bush was re-elected, US interest rates would be raised while European rates were likely to be lowered. ?This will strengthen the dollar, weakening the dollar denominated gold price. Even if things don?t go so smoothly, it would be a risky strategy to base your gold price forecast on such doom and gloom scenarios.

?It is our view that for the next 16 months the gold price is at the mercy of currency movements, especially the dollar, while the underlying fundamentals weaken.?

Virtual Metals was forecasting dollar prices ranging between $375/oz and $450/oz for 2004, with an average of $405/oz. ?If we were pushed into making projections for 2005 they would, at this stage, be lower. We are not saying that higher prices are impossible, only that they are, as things stand, almost entirely dependent on the world failing to continue to bankroll US debt.?

Among the other gold market uncertainties was the fact that de-hedging ? which is supportive of the gold price ? is easing off. On a rolling 12-month basis the contribution to demand from de-hedging had slowed from a peak of more than 20m ounces in the year to first-quarter 2003, to about 12m ounces in 2003.

Cross added: ?No matter how supportive and welcome de-hedging might have been, demand of this sort is artificial, technical, temporary and therefore unsustainable.?"

Above snip from:
John Disney (jess cross angers goldbugs ) ID#24387:

Ms Cross who considers herself an "expert" in the gold market believes the gold price is at the mercy of currency movements (on the other hand she says "the long term signal delivered is that the central banks in fact no longer regard gold as a core reserve asset" ) presumable relating to supposed BoF sales

The "gold negative" posture of Ms. Cross - whose employer has been retained by Mitsui - "Hello Andy Smith" is very interesting

Ms Cross "bearish outlook" on gold and bullish on US $ is contrary to those that believe the US $ has been/is overvalued.

Jessica Cross vs Warren Buffett

The market is speaking loudly and deciding the worth of the US $ (Todate the US $ index has fallen roughly 30% from its
peak - and investors such as billionaire Warren Buffett are still "betting" the US $ value will further erode

Since Ms Cross admits Gold prices are inversely correlated with the US $ movement she believes Mr. Buffett is pursuing a risky strategy

Jessica Cross and Hedging

In the book entitled "The hedge book" Ms. Cross states
"It suggests that the gold world is poised on the brink of a renaissance in hedging, ƒnƒnwith new, smaller companies starting to hedge forward positions, albeit in relatively small amounts at this stage" and she furthers states "¡§We think the gold hedging world is entering a third phase in which derivative sobriety is likely to prevail.¡¨ says Jessica Cross,
End of Snip

Jessica Cross the "gold bear"

In her attack on gold, Ms. Cross passionately asks " Putting all our eggs into that one basket is a high risk strategy.?"

Ms. Cross is correct ! however if she entered the world of currencies and economics - which is not her area of expertise - she could perhaps ask ASIAN CENTRAL BANKS the same rhetorical question regarding the massive reserves of US $

Is that sustainable Ms. Cross?

All Aboard The Gold Bull Express - Part ll

misetichJessica Cross - The goldhedge bug#1206945/5/04; 05:36:54


What do we expect of the future? The factors driving the contraction in producer hedging show no signs of going away – at least in the near term. What impact will
this have on future hedging trends?
For the near term the hedge book seems set to decline further, but before extrapolating that too far into the future we should explore the underlying motivations more carefully.
One factor behind recent de-hedging is that a number of large mergers in the gold industry have seen some heavily hedged Australian producers acquired by North American or
South African producers, who either have non- hedging or lower levels of hedging as basic strategies.
Once these consolidated entities reach their objectives, the pace of hedging declines will slow significantly. Furthermore if gold prices remain firm, gold exploration and, hence, discovery rates should pick up from current low levels, and projects currently on the shelf due to the gold price will get dusted off. Financing anticipated new discoveries and more leveraged projects may well require hedging to assure cash flow and fund debt repayment
Over the last decade producer hedging has ebbed and flowed as the outlook for bullion and the industry changed and, although the current decline clearly has "legs", no trend is forever.

Ms Cross whose stipend-remunaratiion is derived from analytical studies/research/consulting on hedging-derivatives wrote "although the current decline clearly has "legs", no trend is forever"

The trend is not only to "dehedge" but is reflective of gold investors ANTIHEDGE policies.

The gold price suppression scheme of thousands of upon thousands of producers/speculators of leased and corresponding gold dumping (thus increasing supply)has hit a brick wall

Hedging was a successful gold price suppressing strategy as it was favored by past world economic financial environment -

The trend has changed because the LEVELS OF INDEBTNESS make it impossible for high levels of IR without triggering a systemic risk

The "wealth" effect that Sir Greenspan has lauded many times as a counter argument of unsustainable trade deficts, current account and budget deficits is derivived by ASSET INFLATION primarily in stocks and housing.

Whilst an argument can be made for stocks being able to function normally in a high IR environment the same cannot be applied to HOUSING

Housing perceived wealth and its corresponding level of mortgage debt - GSE's IR leverage has not yet passed the "test of time"

In addition the recent accelerated levels of foreign debt has not passed the "test of time" which has also benefitted from a low IR environment

The obstacles to a return of gold hedging are insormountable

Rothschild KNOWS! Jessica Cross is in denial.

All Aboard The Gold Bull Express - Part ll

mikal; 06:53:43

Rohatyn's Warning on America's Indebtedness by Gary North
Tuesday, May 4, 2004
Another angle on bubbles by North.
Ties together NYC bailout, debt(personal, corporate and gov't) and housing bubbles.

mikalLink#1206965/5/04; 06:56:00

Here's a clickable link ^
ZhishengDisconnect#1206975/5/04; 08:33:17

As I write gold is down 20 cents on the day, but the Euro is up a half cent and the the Yen is up, as a percentage, about the same.
misetichAuto Sales Lower Than Expected in April#1206985/5/04; 09:17:34


Over all, auto sales were lower than expected in April, up less than 1 percent from a weak April 2003, coming in at a seasonally adjusted annual sales rate of 16.4 million vehicles.

Discussion of gas prices is a touchy issue among automakers, who reap the most profits from sales of S.U.V.'s and other light-duty trucks, which are less fuel efficient than cars.

Auto inventories are still high - the article mentions a survey taken shows consumers are concerned about gas prices - weight of automobiles has increased -

IF gasoline prices remain high as Greenspan indicated it could get interesting for the auto industry - a mega labor force employer

All Aboard The Gold Bull Express - Part ll

misetichAndy Smith - One Act Play - No rush for gold anymore in uncertain times#1206995/5/04; 09:50:40


LONDON ( -- Investors in these troubled days are not reacting to international geo-political uncertainties as they did in the past by scrambling to buy gold bullion.
He said the Platts news agency accurately described the way the world was becoming de-sensitised to increasing and widespread terrorism when it pointed out that "people are used to seeing situations like these get worse."
On another topic of the moment, central bank gold sales, brought into focus by the recent renewal of the European central bank gold pact, Smith pointed out that in 1985 only Canada was selling off official gold holdings. Today those countries that had shown "zero gold tolerance" by selling off all their official holdings included Norway, Oman, the United Arab Emirates, Israel and New Zealand.
He suggested that bullion banks have been struggling to survive for a long time, something that has come into focus with N M Rothschild's decision to give up trading gold. "Much of the recent aversion of banks to gold can be attributed to the shrivelling of their staple diet – mine hedging business," Smith added.

"But if miners refuse to treat gold like money (by prudently borrowing to hedge against price risks) why should banks? And if neither does, why should central banks? Or investors?"

Andy boy is losing his punch - after admitting he was out of touch with the gold market in 2003 and thus far off the mark with his prediction of gold prices in 2004 - Andy boy is PROMOTING HEDGING

Good luck Andy - your clients are going to need it- those that followed Andy's advice gained for a few years and are NOW GETTING OUT OF THE GOLD BUSINESS as they lost money and thus "not profitable any longer"

Andy does not mention that those holders of US $ in the last few years LOST IN EXCESS OF 30% from their portfolio whilst PHYSICAL GOLD HOLDERS saw their portfolio insurance function as it should - protection against devaluation of the US $

Andy is a one act play. Gold hedging is finished.

All Aboard The Gold Bull Express - Part ll

CamelBelgian#1207005/5/04; 10:14:38


I have to take issue with your statement that:

"IF,...IFffff, there should exist the slightest consensus, that we are going to run out of sufficient oil within the next 50 years,...all the possible alternatives, would already be running full steam ahead"

We had such a consensus in this country during the 1970's after the first oil shocks that culminated in the Carter energy policies ," the moral equivalent of war" as it was called at that time. Everyone from the janitor on up knew the truth and sensible policies were put in place to encourage a gradual transition to fuel efficient automobiles and to develop alternative forms of energy such as solar power.

All of this was disbanded when Reegan and his minions came to power and turned public policy over to the corporate oligarchs ,the proverbial fox guarding the hen house. Who benefits from higher oil prices ? Those that have oil in the ground, the oil industry which has spent billions over the last 25 years lobbying against fuel efficient automobiles

You underestimate the capacity of these people to do evil. If these policies had been followed through this country would be prepared for what is to come. There would be no pricing power in OPEC because gasoline consumption in this country would be half of what it is today, and vast quantities of irreplaceable resources would not have been squandered.

It's not just greed that motivates these people though, its a malignant, malicious intellect that when it hears the truth , does just the opposite, out of spite. This is what motivated Reegan and this mindset still prevails in his proteges Cheney and Rumsfield.

Every so often you still see someone trying to blame the environmental movement for a shortage of oil . Thats like blaming the Sierra Club for a shortage of buffalo meat. The accounts that I have read say that only about 50 buffalo remained standing in the continental US before the shooting stoped. The only reason there are any buffalo left at all was because there was one isolate herd way up north in Canada that they couldn't find.

This is the kind of people that are running the show.They wear business suits now instead of buckskins , but they smell just as bad.

Apres Moi Le Deluge

USAGOLD / Centennial Precious Metals, Inc.Call for a friendly consultation on diversification strategies, or else let your mouse do the talking... click here!#1207015/5/04; 10:47:43">gold -- a global calling card
ZhishengUp into the close.#1207025/5/04; 11:29:11

Though gold did not do as well as the Euro of Yen today, it acted well at the close. June Gold is up about $2 on the day.
GoldiloxMore Secret "Energy Task Forces"#1207035/5/04; 11:54:36


In a page torn straight out of President Bush and Vice President Dick Cheney's playbook on government secrecy, Schwarzenegger's aides have refused to disclose the names of individuals who helped the governor draft a plan to retool California's energy market, a plan that appears to benefit the very same special interests Schwarzenegger said he wasn't handcuffed to during his campaign. Moreover, for the energy proposal to work, it relies heavily on piecemeal components of the state's old deregulation law that sparked the energy crisis and wreaked havoc on consumers three years ago.

Refusing to identify the governor's energy advisers is identical to the stonewalling tactics employed by Vice President Dick Cheney, who, three years ago rounded up a handful of individuals, including Ken Lay, the former chairman of disgraced energy corporation Enron, to help him draft a National Energy Policy for President Bush. Cheney's team of advisers became known as his energy task force.

When Cheney released President Bush's National Energy Policy in May 2001 it turned out to benefit major energy corporations at the expense of the environment and consumers. Cheney has since refused requests from Congress to identify the people he met with. The vice president was sued by conservative watchdog group Judicial Watch and environmental group The Sierra Club in order to force Cheney to reveal the people he met with while drafting the energy policy. The case made it's way to the Supreme Court last week and justices are expected to decide later this summer whether Cheney should be forced to release the names of individuals on his energy task force.


It looks like the USA's "energy policy" will continue to come from the likes of Ken Lay and others who, thanks to Scalia and other judges who respect government "privacy" over reporting of potential conflicts of interest. Too bad Scalia couldn't understand the law against judges standing in cases where their personal friends benefit while overturning Florida's Bush vs. Gore in 2000.

From our perspective, it looks like we can expect the oil cartel to continue running the country from "behind closed doors".

OvSCamel#1207045/5/04; 11:55:14

Calling Republicans malignant, malicious intellects?
With a masterstroke you define yourself, Camel.
Why don't you settle down and call it a "Power" game?
The trouble with the 60's and solar energy and other
alternatives was, that this movement was infested with
extreme leftists, druggies, alternative sex orientation,
and assorted grooves. A standard mainstream person just didn't want to sacrifice his selfimage in exchange for saving the world down the road so many years.
It's interesting that you wound up in the gold-camp,
which is "infested" with neo-conservatives. It must be
some other affiliation that grounded you here, because
most of these 60's persons still don't know a gold-coin
from a hole in the sky...all right, all right...just
want to get your bile count up...I actually enjoy your

OvSAdvisers - can't do with them and can't do without them, darn#1207055/5/04; 12:17:48

More power to Schwarze negger, he obviously
wants to distance himself from the overbearing
teddybear hug of his uncle. Now we have to get
him into the gold camp...OvS

Federal_ReservesReckless Fed Bosses#1207065/5/04; 12:29:32

The FED's refusal to raise interest rates as the nominal economic numbers have improved and longer rates rose reveals the post stock market bubble pop recovery is wearing no clothes. Real fear will grip the markets once participants realize the FED is protecting the credit bubble they have created rather than the economic recovery. The pin moves ever closer to the ballon, once credit growth reverses, the jig is up. Folks will begin the process of deleveraging, selling assets to pay down debt, and elminating excess capacity from the system.
GoldiloxSave the world or maintain an image? Nice choice.#1207075/5/04; 12:33:52

@ OvS:

Your quote:

"The trouble with the 60's and solar energy and other
alternatives was, that this movement was infested with extreme leftists, druggies (like Limbaugh?), alternative sex orientation (like J Edgar Hoover?), and assorted grooves. A standard mainstream person just didn't want to sacrifice his selfimage in exchange for saving the world down the road so many years."

. . . suggests that you find it preferable to risk ruin by myopic dependence on a declining resource like oil than be potentially associated with "left-wing kooks" like R. Buckminster Fuller, Einstein, Tesla, TT Brown, and the like. Image is everything?

Before you scream "Better dead than RED", it might be useful to look more closely at Welfare, Social Security, Medicare, IRS, FDIC, SLDIC (Bush's favorite watering hole), and closed door energy policies. They're HERE!

If ANOTHER's analysis of gold for oil is on target, TPTB MUST continue manipulating gold as long as they can, as their policy requires dependence on resources owned by other cultures.

AS I have previously remarked, the only reason solar and other renewable resources are more expensive than oil is because the governement/oil cartel has commmandeered a few "borrowed" trillion in military subsidies over the last couple decades to maintain control over all energy sources to keep the appearance of cheap prices at the pump. This is not working well right now. The pump price is rising along with the accumulated borrowed TRILLIONs of subsidy.

It seems that TPTB also do not dare sacrifice their postitions of power to allow any serious strides in energy R&D, as they refuse new patents, lock up all discoveries at Area 51 and throw away the key in the interests of National (oil cartel) security.

GoldiloxThe Governator's "secret" energy team#1207085/5/04; 12:39:03

@ OvS

Yeah, and maybe Arnold will bring Ken Lay along to show us how to REALLY run a gold market! ROTFLMAO!

TopazOil/Dollar#1207095/5/04; 13:48:21

Apart from the SM saving dip at the end of March, the Dollar and Oil have been waltzing along merrily these last few months ... and now we see a separation.
Oil futures are indicating a demand driven drop in Oil from here, Fundamentals tho suggest a supply driven increase.

The next few days will be VERY interesting!

TownCrierClosing market updates, plus global newswire 'round-the-clock#1207105/5/04; 14:00:46 Excerpts:

COMEX gold closes higher on weak dollar, oil jitters

BelgianJessica and Andy (misetich)#1207115/5/04; 14:48:53

Through these two members (J & A), the gold-(financial)establishment (brotherhood) wishes to send a message/hint to candidates wishing/tempted to join the gold-public !? The content of both statements are nonsense. Allow me to skip the argumentation. I'm trying to get their message.

Ingredients : $-€-IRs + exch. rates-geotensions-goldmine forward sales-POG-US elections.

There may be plans to strengthen the dollar, going into '05...or at least slow/halt its ($) declining exch. rate ? Ordering/commanding a halt to all dollar shorting ?

- Bond traders have six months time to get prepared for telephoned rate hikes.
- Goldmines will be encouraged (hum) to restart a second big round of forward sales.
- All hens on deck for dollar support.

Pure intuition and FWIW !!! They are going to call the anti-dollar's bluff !? Thoughts anyone ? TIA.

misetichBelgian (5/5/04; 14:48:53MT - msg#: 120711)#1207125/5/04; 15:27:18

Your comments

There may be plans to strengthen the dollar, going into '05...or at least slow/halt its ($) declining exch. rate ? Ordering/commanding a halt to all dollar shorting ?


It will be very difficult to achieve unless they get oil under control and the likelyhood of oil under $30 is slim and none

OPEC claims to be overproducing by 1.5 barrels per day as prices hit 13-year highs-
China's demand for commodities-energy is hitting the whole global economy - many members of OPEC are Anti-Bush -
The US economy is much weaker than being reported re: chronic unemployment - no genuine jobs

The powers to be have already rolled "their plan" reminiscent of the good old days - as the anti-gold campaign has been put in full gear using Bof and Germany's as the anchor re: gold has demonitized - but things have changed -as the US stock market is vulnerable post election -
In addition far too many "enemies" both politically and geopolitical this time around - a lot of people worlwide are put off by their disagreements with current US policy

The likelyhood of a major terror strike within US borders is very high between now and November, if Madrid is any indication

Whatever ammunition they have via physical will be bought - as the US $ is too weak and would need at least 6-12 months of rallied strength to change the current trend and perception -

Time will tell who is really "orchestrating" this - things are never as they appear

Thanks for your participation in this Forum - it is welcomed, valued and appreciated as you lead through the Trail

All Aboard The Gold Bull Express - Part ll

Socrates964Belgian#1207135/5/04; 15:41:33

IMHO, if you want to deliver a serious message, you don't use a clown like Andy Smith to do it. Besides, what's the novelty in anti-gold pitches from him and La Cross. They've always been anti-gold. Period!
GoldiloxRumor Control#1207145/5/04; 15:50:33


"Don't Blame the Deficits for America's Rate Hikes"

The US Federal Reserve is expected to hint more strongly at the interest rate rises in its post-meeting statement today. With the growing likelihood of higher US interest rates ahead of November election, one of the surest calls in economics is that the twin deficits in budget and trade will be blamed.

Before that happens, it is worth taking a reality check. The much needed increase in interest rates when it comes will have little to do with deficits.

The primary factors will be the strong economy, job growth, the weaker dollar and rising inflation."

Jim Sinclair's Commentary:

Where in the world do you think the "strong economy" came from? Where in world do you think the modest job growth has come from? What do you think caused the lower dollar? What do you think has given rise to inflation? The triple deficits of US Budget, Current Account and Trade brought on by poor management are the cause of the economic recovery.

The US is on a war footing while implementing major tax reductions and monetary easing of historical proportions. The cost of this present economic situation is clearly on the backs of future generations. This article places the cart in front of the horse in a world class fashion.

This is the type of thinking that would sell the soul of a nation for a strong equity market and strong business conditions while Americans and their coalition allies pay the price on the battlefield. It will also produce long term inflation and decimate the dollar beyond recognition. This is truly the creed of Daddy Warbucks and is a formula that has led the USA to its present decline while being in a terminal state of denial as it wages war everywhere.


Yeah, the deficits don't matter, and TPTB have a really "big bridge" for sale. Demonizing gold continues in the media, as they strive to keep the public as far off balance and vulnerable as possible. The dollar is being trashed and readied for replacement simultaneously, but it must not appear so.

"Advisers - can't do with them and can't do without them, darn!" No wonder they all want their real advisors to remain "anonymous".

CamelOvS#1207155/5/04; 15:52:38

***It's interesting that you wound up in the gold-camp,
which is "infested" with neo-conservatives*****

I'm a little surprised myself, but I have really learned a lot from you'all for which I am very greatful. What we need now is a Roosevelt, but rather than a "chicken in every pot", a solar collector on every roof.

GoldiloxSolar Collector on every roof#1207165/5/04; 16:15:29


Probably not until there is a utility to sell us the sunlight, an El Paso clone to sell it to the utility, and a Halliburton to explore for more sunlight!

Ensuring three or four middlemen is part and parcel to making it "economically feasible".

misetichUS Budget Deficit Out of control#1207175/5/04; 16:37:13;jsessionid=Y0MC3RVG1MMZECRBAEZSFEY?type=topNews&storyID=5052236


Bush Seeks $25 Billion More for Iraq, Afghanistan

WASHINGTON (Reuters) - President Bush on Wednesday asked Congress for an additional $25 billion for military operations in Iraq and Afghanistan, breaking a pledge not to seek more money before the November election

US poorly planned post-invasion is hitting taxpayers. The $25 billion is emergency funding required as most funds are spend - the forecast for 2005 is ANOTHER $25 billion - which is a drop in the bucket - totally being underestimated

Reportedly a vast majority of military equipment in Iraq is in bad shape - and requires heavy maintenace/replacement

Recently the US announced 135,000 military personnel will be stationed in Iraq till the of 2005

The change-as-you-go Iraq "democracy" plan - costs are rising beyong expectations

Mass confusion reigns - as the State Department battles the Pentagon - the CPA has little control over the army/marines - and marines have on ground jurisdictianal authority which adds to mass confusion

Add the inside battles of Iraqi and the pandora box which many have warned about is wide open

Supposedly budget deficits are slated to decline in 2005 and beyond - it remains to be seen - the likelyhood is NOT!
- thus continued pressure on foreigners to fund the shortfall

All Aboard The Gold Bull Express - Part ll

Cavan ManJessica cannot be right about the $USD..simply NOT#1207185/5/04; 16:37:56

Bush Asks Congress for Additional War Funding
$25B Needed for Contingencies in Iraq and Afghanistan, President Says
By Jonathan Weisman and William Branigin
Washington Post Staff Writers
Wednesday, May 5, 2004; 5:21 PM

Driven by unanticipated combat, higher-than-expected troop levels and rising political pressure, the White House reversed course today and asked Congress for an additional $25 billion for the wars in Iraq and Afghanistan for the fiscal year that begins in October.

mikal@Goldilox#1207195/5/04; 16:54:25

Thanks for posting that FT snippit and J. Sinclair's reply.
From the FT quote and it's converse, J.S's basic and straightforward pointers for gold investors, it's seen how easily mainstream shills exploit the handful of today's important and
fundamental financial trends- to selectively censor and rearrange the otherwise plain and obvious events of today into an argument for confusion and consequently, disinterest, complacency and inaction.

Camel@ Goldilox#1207205/5/04; 17:22:30

Greetings Goldilox.Thanks for all the great posts these last number of months. Truely a prodigious effort.
mikal@misetich#1207215/5/04; 17:24:20

I agree, "the dollar is too weak".
It's already weaker than it's outwardly and publicly presented to be.
Weaker than it's paper price too, maybe giving more value to toilet paper down the road or else exchangeable for
a gold-backed successor in the mold of the euro,
which may then buy cheap Mexican "imports",
without having to convert them to Pesos anywhere in the world, under an American Union like the EU.

CometoseDONT FORGET PRECHTER who is also PROMOTING his version as well ( WOODEN NICKELS)#1207225/5/04; 17:34:21

Jim Sinclair has dealt with his illogic handily as well
pointing out that his arguments don't have teeth ....

I remember in the late 80's that I read one of Prechter's books.
He was extremely bearish and I was convinced by his discourse . I discussed his work with my Stock Broker at the time and his response was derrogatory of Prechter indicating that Prechter was a permabear....and he had been bearish for years.......

His theory may have been right but his timing was not.....
I don't think he makes a living putting his money where his mouth is but rather recieving money for writing books and mimicing his handlers.

I wish we could go back in time two years or whatever it was and that we could buy gold again at 253.......It's a great hope and dream that I fear will remain vapor of GAS .
We may never see 250 again in our lifetimes....

The issues that confront the Global economy are enduring relative to commodity supply issues and they are also enduring relative to Spiraling deficits and Ceaseless Money Creation; they are enduring with regard to Geopolitical change ...which is related to OIL , another enduring issue worthy of its own mention.. ....The only people in the world that are blind to these issues and the systemic nature of these issues are the ones in the western hemisphere that have been blinded by the sold out MEDIA TROLLS..and the continuous SPIN in DISNEYLAND. EVERYONE THINKS THAT EASY AL HAS SPECIAL POWERS TO WAVE A MAGIC WAND and make everything PEACHY.....THAT FANTASY MAY ONLY come off in DISNEYLAND...The real world will have to come to grips with REALITY .....and deal with it....REAL MONEY WILL BECOME PARAMOUNT WHEN THE REAL FIREWORKS BEGIN ....On that day Faries won't Fly and Fantasies will cease to hold the hopes and captivate the imaginations of the bewildered.

misetichJessica cannot be right about the $USD..simply NOT#1207235/5/04; 17:38:07

Cavan Man (5/5/04; 16:37:56MT - msg#: 120718)

Jessica specializes in research and certainly not an expert in currencies

The argument - disinformation - misdirection- posed by both Ms Cross and Andy Smith is treating gold as a commodity when in FACT gold has been acting as a CURRENCY - recognizing global economic problems - specially the US $

Things have changed and getting worse. Here's an update on US Debt to the "penny"

05/04/2004 $7,124,773,711,006.15
09/30/1999 $5,656,270,901,615.43
09/30/1998 $5,526,193,008,897.62

When the gold shorts such as Andy were successful in persuading unspespecting producers to hedge during the mid 90's to 1999 it was a DIFFERENT SCENARIO thus the caper worked

Many things have changed -

US economy is much much weaker
Level of debt at all time high
IR being held at emergency rate
Derivatives at astronomical levels
US trade deficit at all time high and growing
US $ foreign holdings by Asia's Central Banks are in the stratosphere
US budget deficit estimated at $425 - probably its more like $700 billions for 2004
Current Account deficit is growing
Gold hedging is dead
Threat of retaliation actions from Arabs/Muslims
Iraq/Afghanistan Post Invasion Costs

IF IR increase to the 4-5% the amount of service debt interest to foreigners will reach at somewhere between $150-300 billion annually

Jessica cannot be right about the $USD..simply NOT

All Aboard The Gold Bull Express - Part ll

Socrates964Belgian/Misetich#1207245/5/04; 17:44:32

Belgian, I've been hearing about how the euro would never get off the ground due to the economic weakness of 'Old Europe' all the way from 83c. It was BS then, and it still is.

Similarly, this 'forced debt liquidation causing a surge in the dollar' argument that is currently doing the rounds is even more intellectually half-baked. No politician in their right mind is going to bring the economy screeching to a halt in an election year. In 2005, maybe, but not now. Dan Norcini did a nice rebuttal, but he overlooked an important point: just look at the balance sheet of most investment banks to see just how much fixed income they hold. This kind of policy would massacre Wall Street. Not surprising that Easy Al didn't tighten, is it?

Only if one reads economic history can one begin to appreciate just how clueless the US economic élite is about the rest of the world. It's as if the part of their brain that works out how others may respond to their actions has been surgically destroyed.

Try Van der Wee's book 'Prosperity and Upheaval: The World Economy 1945-80' which is dry but has a nice overview of the breakup of Bretton Woods in 1971.

This chapter makes an interesting point re 1970 and 1971.

'A reduction of the rate of interest in the US, which was designed to stimulate the domestic economy, accompanied by an increase in European interest rates to prevent the importing of American inflation, led to a massive repayment of loans by American banks on the Eurodollar market. The increasing trade deficit in the US made the situation still more precarious'. (VdW p. 476)

Sound familiar? Granted Europe's politicians of today are far more spineless than they were in the early 70s, but we can conclude from this that they will follow the path of least pain. As Misetich correctly points out, unless POO comes down, the path of least pain is a higher Euro. It may have appeared to be a lower Euro last week, but a rising POO concentrates the mind wonderfully, and we have seen the Euro break its downtrend since then.

As such, while it's not a given that US companies would 'rush to repay loans in the Eurodollar market', the deflation argument assumes that the rest of the world stands idly by and takes their shafting from the US in the form of a big hike in their commodity bill and a massively disgruntled electorate. History suggests otherwise - namely that the current drift of US monetary policy and the likely European reactions to it will tend to increase the supply of dollars in the market place rather than reduce it.

AristotleGood ol' Andy Smith -- always makes me laugh#1207255/5/04; 17:47:07

Even when he sees his career has been invested in a dying industry (i.e., bullion banking) he keeps his good humor right to the bitter/glorious end.

A long, long time ago, in a galaxy of forum archives not so far away, I recounted in a longish and frequently sloppily-worded commentary the wonders of the ex-Bretton Woods world (post-1971) in which certain (and not so obvious) mechanisms allowed the market price of Gold to be reined under control after the runaway gallop to $850 in 1980. The broad message was that bullion banking and derivatives took over where Bretton Woods left off in the continued effective monetization of Gold, although in a floating regime rather than a fixed one.

The main point to walk away with out of all of that was that through the multitude of Gold loans, forward sales and various swaps agreements -- as Gold was thus being "monetized" as a non-national currency, its market price in terms of the other, national, currencies was brought into check.

Through the wonders of bullion banking in continuation of the Gold Standard ploy, the essence of "owning Gold" remained detached from the physical realm as the prevailing counterparty obligations and accounts of "future Gold" were brought (im)materially on par in the newly modern world with the similar banking obligations and accounts for the various monetized national currencies. When obligations are merely netted against other obligations, its all the same -- credit is credit, no matter which way you slice it. For as long as the monetary system of accounting functions, an "IOU Gold Ounce" can be discounted against real things as effectively as an "IOU Peso" or an "IOU Dollar."

So, it shouldn't surprise us to see that the market price for generic Gold (either on account or in hand) was brought low during the heydays of Gold derivatives, miner hedging addiction, and bullion banking to orchestrate the show.

It also shouldn't surprise us to see the countermeasure of that effect. With the steady decline of LBMA clearing volumes publicly known since 1997, plus the European CBs' caps on Gold leasing participation since the 1999 Washington Agreement, plus the corroborating evidence of several prominent bankers to quit the bullion banking scene (Credit Suisse, Rothschild,) we can conclude that Gold these past recent years is becoming less and less "paperized/monetized" than it was, and look how its slightly-more-reality-based price has climbed nicely off its papery $250 lows!

I say, let's have more of that trend, and how!! (FreeGold, baby!!)

Let's keep all that in mind, and then let's look again at Andy's comments from the Mineweb article, shall we?

-------[Smith] suggested that bullion banks have been struggling to survive for a long time, something that has come into focus with NMRothschild's decision to give up trading gold.

"Much of the recent aversion of banks to gold can be attributed to the shriveling of their staple diet – mine hedging business," Smith added.

"But if miners refuse to treat gold like money (by prudently borrowing to hedge against price risks) why should banks? And if neither does, why should central banks? Or investors?"---------

My goodness!! Is it possible that even ol' Andy is preparing to throw in the towel on the socialization/monetization of Gold???!

Does he give us any more clues about his state of mind? How about this:

----------...on the topic of gold investment, Smith made clear he was not particularly enthusiastic about the World Gold Council's promotional efforts with its stock exchange traded securities, called Gold Bullion Securities.

He pointed out that, after 13 months in existence, the Australian version of GBS had attracted about 9 tonnes of gold demand, "equivalent to one-and-a-half-hours worth of large speculator liquidation on COMEX in the week to April 20."

Smith said: "Attempts to place gold on the institutional stage, almost unrecognisable in heavy make up (you don't have to own it, it's paper and you accept counter-party risks common to commoner investments) supposedly to attract an audience who otherwise could not enjoy gold entertainment, risks an unnecessarily very public humiliation."------------

Holy cow! He's beginning to sound like me!!!

What are you driving at, Andy? Are you preparing to join the ranks of the physical FreeGold Trail-hikers here at USAGOLD? There's always room for one more, especially someone who's funny and cracks me up as much as you do!

The institutional ship is sinking and the rats are swimming to solid ground. (I'll leave it to others to decide whether or not Andy is among 'em.)

Gold. Get you some. --- Aristotle

Ned#12072605/05/04; 19:46:03

NedHats off to Misetich....#12072705/05/04; 19:46:49

"....The trend has changed because the LEVELS OF INDEBTNESS make it impossible for high levels of IR without triggering a systemic risk..."



YEAH BABY!!!!!!!


"....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...."

Ha! Ha !

Here's the BIG PICTURE BABY, Mr. GreenGoof is behind the curve SO severely and as Misetich points out he can't raise rates without blowing the DERIVATIVE SEWER sky high. Nominal rates will not catch up to inflation EVAR! and REAL rates will continue to fall behind and the FED will grasping at straws for a long, long time.

As inflation accelerates (because the dollar continues to fall) GreenGoof will fall further and further behind the GOLDEN (HA!HA!) curve.


Sorry Alan, hate to break it to ya but that knighthood thingy was a joke, PAL! See ya at POG $10,000.

Later, much later.

CometoseCHECK MATE#12072805/05/04; 20:01:32

Ned , May I say that.....


Looks like we owe Mr Greespan thanks all around for the
situation he has masterfully lead us into ......
from which there seems only one way out ........

RemarxRed and Gold: My Colors!#12072905/05/04; 20:27:00

Here is another (far) left-winger who owns PMs for when TSHTF. There is much that the left, the populist and libertarian right can agree on with respect to TPTB.
a nation of oneresults of my homework#12073005/05/04; 21:59:04

Pog is not likely to reach higher than 460 before December.
SundeckSome Cities Struggling to Keep Pension Promises#12073105/05/04; 22:21:18

Meanwhile, down in Houston...


When their monthly pension checks start coming, some will actually have higher incomes than they did when they were working.

The city pension fund cannot support the payouts and has about $1.5 billion less than the benefits it owes the work force.

Sundeck: "Houston, we have a major malfunction." The public sector stikes back... Yet another reason why inflation is a necessity to balance the books of the future...

Creative accounting will be needed to mend earlier actuarial "creativity" in puting together these super packages. Still, not much at stake here...only a few tens of billions of dollars across country...not what you would call "real money".


a nation of one...#12073205/05/04; 22:30:58

Jim Sinclair is right about a lot of things, and I feel pog will go to 480, maybe next year, or in late December. It could happen differently. But with that, late December. The key to this, it seems to me, is public opinion. If the 300 million US citizens all think that gold is only worth 430, gold won't go above 430 in the US, no matter what else happens. And what I see right now is an absence of public sentiment in gold, sufficient to cause its price to rise that quickly to 480, among other things. But that's the main thing. People tend to gather steam, the use it, then, collapse. Then they gather steam again, use it, and collapse again. Before it goes to 480 there will be lot more steam, and right now there's just a lot of hot air. In fact, if you look around, just about the only place you get bullish information about gold is on these pages, and the links related to them, and on other web generally. I am not saying the information at these places is incorrect. I think it is true and correct, very much of it. But we aren't able to talk sufficiently loudly that the 300 million will hear us. They aren't listening. Somebody's got to grab them by the neck and shake their heads, before they'll listen. And it's only after that happens that a significant number of them will ever start thinking. That's what will make the price of gold go up. That and other things. But it's the buzz that's faded. Are people waiting, and one day they will all wake up? Probably. Well, when? Soon enough, my friends. Soon enough.
mikal@ANOO#12073305/05/04; 22:54:36

Don't worry about those left behind. It's already
too late to even begin to educate the masses.
Gold's price is not determined by Americans but by the world market- largely big money, funds and CB's.
Gold's price will be as Belgium, Michael(Kosares), Ari, Randy, BB, J.S., MarkeTalk(George), Miner, Misetich, Sir Douglas(Trail Guide), Another, Aragorn, Gandalf, Anduril, Smeagol, Sundeck, Coin Guy, Caradoc, Waverider, R. Powell, Boilermaker, Cavan Man, Paper Avalanche, Mr. G., Goldilox, Slingshot, Cometose, Topaz, Henri, White Hills, White Rose, Ten Bears, Great Albino Bat, Chris Powell and a hundred others here recognize- underived, self-sustaining, free.

mikalSome fun abbr.#12073405/05/04; 23:20:14

FYA- For your advice (or amusement or attention)
FYI- " " information
FYEO- " " eyes only
FCFS- First come, first served
FEA- Federal Energy Administration
FDROTFL- Falling down rolling on the floor laughing
LBMA- London Bullion Market Association
LOEL- Lowest Observed Effect Level
LOAEL- " " Adverse Effect Level
LSAT- Law School Admissions Test
LOL- Laughing out loud (or Little old lady)
Comex- [New York] Commodity Exchange
LFL- Lower Flammability Limit
GWP- Global Warming Potential (or Gross World Product)
L.S.D.- Pounds, Shillings and Pence
LTMSH- Laughing 'til my sides hurt
lts- Laid on Table in Senate

mikal@ANOO#12073505/05/04; 23:52:26

Re: "When will people wake up? Soon enough."
Yes. A few will be the early birds catching the elusive golden worm(yum!) and the rest,
Now let's pray
the noise of any crash isn't loud enough to wake the dead.
We're all having enough of a time salvaging our lifesavings, without having to save our SKINS! ;)

BelgianMisetich/Socrates/Ari/all#12073605/06/04; 00:30:55

Thanks for the strong underbuild (expert)responses. Just wanted to point out that by discussing a not to be excluded strike back of the dollar,...that same dollar will add more weight to its ballast that is already suffocating it.

And indeed, Sir Ari,...everything is unmistakingly pointing to the shift from papergold to the precious Physical.
All outings that add in one way or Another to the goldsale-hysteria, are undermining the existing papergold-market and straithening the path to Physical Gold.
All those who made a living(fortune) with the papergold, see their (future) business going up in smoke.

Socrates : Couldn't get one of my postings (J & A) through, yesterday and lost it. You said the essence of it in your latest posting (book).

All : Isn't it amazing how extremely subtle, but energetically, we have been... and are being totally "over-paperized" !? The modern paper-cult replaced the ancient golden calf worshipping.
If,...IFFFFFFF, the dollar-paper would succeed to stage a serious (sustained) come back and flush away the growing dollar-scepsis (aversion),...I would be very surprised but not puzzled.

Note that nobody is analysing (questioning-argumenting) if Oil and Gold at today's prices are "cheap" or "expensive" !!! Simply because the whole *scale of Valuations* has been completely distorted by the (Western)paper-mania. < Consumer-ism > instead of genuine prosperity (happiness).

It is a very beautiful, sunny morning, here in Antwerp. A very Goodmorning to all.

Unimog@ Belgian#12073705/06/04; 01:14:41

Goodmorning Belgian,

According to you, which oil producing countries are in the ECB-BIS (euro)influence, and which are in the Fed-IMF (dollar) influence ? I see Saudi Arabia getting good (oil) connections with the Russians. How important will Russia be in the changing process towards the euro (and Freegold) ? You talked about oil reserves yesterday. I remember a except from Anothers thoughts where he writes :"Don't underestimate the oil reserves, there will be plenty of oil, even for our grandchildren." Of course the problem will be how (in what currency) will they pay for it ?

CaradocMikal/ ANOO#12073805/06/04; 02:54:50

You're both right. Yes, Mikal, it's too late to educate the Joe Sixpacks of North America. And, yes, the international market can/will take gold hundreds of dollars higher without them. But ANOO hasn't underestimated the importance of the American buyers in determining POG.

There's a heck of a lot of buying power in North America that is currently going toward big screen televisions, SUVs, and overpriced McMansions that will be prohibitively expensive to heat with natural gas costing what it will within two years. Between now and then -- whether at $500 or $850 per ounce -- there is a price level at which North Americans will become "self-educated" on gold and begin to climb onboard with whatever remains of their decimated assets.

Speaking of "decimated" (reduced by factor of 10)... With gasoline at $5 per gallon and purchases limited to 10 gallons after waiting in line for an hour or two, the typical owner of a $50,000 Cadillac Escalade will be glad to sell it for $5,000 if he's lucky enough to have paid cash for it. If he still owes $45,000, he'll just walk away from it. Same goes for the big houses, TVs, and portfolios of paper. The losses will may well be greater than 90 percent, but just take the guy who unloaded his Escalade and has 5,000 greenies in his pocket. If he and a few thousand like him are desparate to preserve whatever they have left, what happens to the "price" of gold? (I put "price" inside quotation marks because it becomes a joke to think of dollars defining the value of real wealth.)

Note two things:
(1) There's less than one ounce of gold per person on this planet and substantially less than an ounce of silver.
(2) Even after being decimated, the Joe Sixpacks of North America -- in pursuit of an ounce or two or ten or twenty ounces -- will still have enough buying power to drive the dollar-denominated price of precious metals higher than any number that has been guessed at on this board.

Hint: I'm not sure I'd swap an ounce of gold for an SUV even today unless I had time available to sell the vehicle for cash to buy more ounces. And when times get tough, I'll hold onto my ounce of gold even if offered two or three useless vehicles.

Just how I see it....


PS for Mikal: Great memories! I miss the wisdom of Ten Bears.

NedCometose#12073905/06/04; 03:37:53

Maybe Mr. Greedspan is our knight in shining (golden) armor !! LOL.

Have a golden day!

NedOh yeah........#12074005/06/04; 03:45:06

.....I was watching CNN for awhile last night. Not too many are happy with this Iraq prisoner abuse business.....more heads to roll. Next year (2005) 135,000 troops are expected to remain in Iraq at a phenominal cost...forget the number, $XX billion.

More pain.

Not to throw out sadistic numbers but I believe there are now nearly 700 fallen US soldiers, 100 (+/-) in April. I have said from the beginning 1,000 by Nov. 7 will spell trouble for Mr. Bush.

4 digit fallen soldiers = 5 digit gold? We shall see soon enough.

UnimogInteresting chart#12074105/06/04; 03:52:30

Interesting chart.
UnimogInteresting chart bis.#12074205/06/04; 03:59:17

Excuse me, I posted the chart already without commentary. Whar worries me the most is the link on the bottom left, the chart of the Money Zero Maturity Supply. How much longer will it continue to rise ?
SundeckOur change is just boring#1207435/6/04; 05:11:43


Looking through a handful of change that I had been carrying around for a while, it was obvious that these coins, while useful, were just plain ugly, and worse, boring.


But our coinage, as well as our paper currency, has a long way to go before it becomes what I would consider attractive. The money we make now is durable and adequate. It isn't, however, the work of art it used to be from the late 1700s until the 1960s.

During that period, our coins not only had real value - some were made with silver and gold - but also reflected the talent and skill of the master engravers who produced them.

While our first official coins, struck in 1794, were a little rough, it was only a matter of several years before copper, silver and gold-alloyed coins sported majestic seated or soaring eagles along with patriotic-inspiring versions of Lady Liberty, (including one daring quarter struck in 1916 and 1917 in which Liberty had a bared right breast. I'll show you a photo of her).


In any case, much of our later-date coinage, such as the Susan B. Anthony dollar, first stuck in 1979 and arguably the ugliest U.S. coin ever produced, and the Sacagawea "golden dollar," first minted in 2000 and still in production for some unknown reason, were politically correct failures from the word go.

Many people have never seen a "golden dollar" - which, by the way, has no gold, just copper with a little manganese, zinc and nickel thrown in to make it hard and give it color. This dollar bears a figure representing the Shoshone Indian woman Sacagawea, who, along with her husband, Toussaint Charbonneau, played a role as a translator in Lewis and Clark's northwest expedition.

There are, however, stunning but now obsolete examples of U.S. coinage. My personal all-time favorites include:

The flowing hair silver and bust silver dollars, first minted in 1794 and 1795; the Indian-head nickel, first stuck in 1913 and which featured a bison on the reverse; the Standing Liberty quarter, struck in 1916 and a contender for one of the most beautiful U.S. coins; the Saint-Gaudens $20 double eagle, first struck in 1907 and also considered one of America's most attractive coins; and my personal favorite, the Walking Liberty half dollar, first minted in 1916 and displaying, on the obverse (the heads side of the coin), Lady Liberty with an American flag, striding forward with a rising sun in the background. A powerful eagle graces the reverse.

Sundeck: Yes...I understand what he is saying...same is true in Australia. At least in America you have coins of sensible size. Here we have a fifty-cent piece that you could anchor a boat with - completely out of all proportion to its "value"; and to add insult to injury, it is not even round, but has a dozen or more corners to wear holes in your pocket more rapidly. The twenty cent piece has almost no value (unless your kid wants an all-day-sucker from the local vending machine, or a thirty-second bone-shaking ride in the imitation puffing-billy in the mall...oops, they take a dollar these days. However, you can still use them in most parking metres, if you want to stay an extra five minutes...

Give me the good old days with daring, golden ladies that believed in Liberty and had the courage to bear their breasts (well, one anyway) for public scrutiny. (These days such a "liberty" appears to produce a furor - if recent events are anything to go by: "Storm in a teat cup!", one of my friends was heard to say...

Alas, these days of rampant, pervasive tokenism, our money leads the fray...



misetichUS - Saudi Arabia - New Rift?#1207445/6/04; 05:38:19


May 4 - Only days after the State Department praised Saudi Arabia for its "aggressive" and "unprecedented" campaign to hunt down terrorists, Crown Prince Abdullah—the country's de facto ruler—has startled Bush administration officials by blaming "Zionists" and "followers of Satan" for recent terrorist acts in the kingdom. "We can be certain that Zionism is behind everything," Abdullah told a gathering of leading government officials and academics in Jeddah as he talked about the weekend attack on oil workers, which killed six people, including two Americans. "I don't say 100 percent, but 95 percent."
But Walker added that the Saudi rulers "don't feel they owe this country or this administration much of anything these days. They were terribly disappointed in the 100 percent support of Sharon … Maybe this is their way of making their disappointment clear. It's also a way to blunt the edge of public opinion which is very much opposed to what we are doing … We have a horrible situation in the region."

Little media coverage has been given to Saudi's strong stand on the Palestine issue -

Oil prices commenced rising with Saudi Arabia disagreements with various solutions proposed by Clinton (- The Saudi's submitted various peace proposals relating to Palestine/Israel)

The increase in oil prices along with natural gas/electricity problems in Y2000 was the catalyst in busting the Stock Market bubble as corporate earnings were hit by rising costs

Saudi's were not to fond of Saddam - they funded the 90 Bush Sr./Iraq war - they did not support the current Iraq invastion

US spin that the Saudi's couldn't support the Iraq invasion publicly but doing so privately doesn't stand to actual known events

The Saudi's have made numerous contractual energy deals with Russia/China at the expense of US corporations

Further the Saudi's prohibited the US from using the military bases constructed in the 90's and kicked out the US forces

In addition OPEC have flexed their muscles throughout the last 4 years citing a rise in "inflation" as the reason for higher oil prices -

POO prices have average at the higher level of the band and upwards to today's $40.00 mark

Current events in Iraq/Palestine have inflamed and heightened tension in the Middle East - as Arab countries are resisting the "reform" agenda of the US

The continued strained relations of most Arabs countries- vs US foreign policy -in light of Bush endorsing Sharon- cannot be underesimated

The OIL card is being played - OPEC is "overproducing" however the overproduction is NOT GOING TO US SHORES - but elsewhere in the world

Is it the 70's déjà vu again? Will gold price reach/exceed $850?

All Aboard The Gold Bull Express - Part ll

misetichPrepare for worst, market seer warns#1207455/6/04; 06:11:25


For the next three months, Belkin was dead wrong. The market continued to shoot straight up, and readers e-mailed repeatedly to ask why we had given him any credibility. And yet now, with the passage of time, his views don't look so dumb after all
The recent setback is nothing, however, compared with what's coming, he says now. In an update interview this week, he said his research suggests that the market will revisit its October 2002 lows, and he is sticking to his prediction of a "high-volatility dislocation" -- you might call it a crash -- en route. He still singles out semiconductors as likely victims, but has now added emerging markets to a long list of investment areas he expects to get clobbered; meanwhile, he still likes consumer products companies and energy as potential hedges, though he doubts they will provide positive absolute return.
By allowing the official overnight federal funds rate to lag well behind the inflation rate, he says, the Federal Reserve made the worst of all possible central bank mistakes -- encouraging as much unproductive speculation in the past year as it did in 1999, when it flooded the world with dollars in anticipation of trouble from the Y2K bug. For this handiwork, he labels the men around the Fed board table "worse than the board of Enron" for their obsequious obedience to Chairman Alan Greenspan.

"They're all total wimps; the board is all yes men, academics who just rubber-stamp their boss. And they've now given us the biggest bubble in everything that I've ever seen," he said. "Through 2000 it was mostly the tech stocks, but now it's everything."
"When capital is fearless, when investors feel bulletproof, they put money into the riskiest areas," he said. "That has pushed emerging markets into the worst extremes in my experience of about 20 years, including the periods preceding the big collapses in the ‘90s of Russia, Latin America and Asia. The Fed has essentially bubble-ized the whole world." He estimates that the Nasdaq, S&P 500 and German DAX have about 42%, 30% and 45%, respectively, to fall to revisit their 2002 lows, but the Brazilian market could fall as much as 58%.

Richard Russel has also predicted that we have seen the SM top.
How will Greenspan respond? What type of ammunition does the Fed have left to respond to possible crisis and/or erosion of perceived wealth?

The US consumer/pension plans are highly leveraged to SM prices than any other era

How will a continued bear market affect gold prices? How will a "mini-crash" of sorts affect gold prices?

It could very well be that even the kitchen sink will be thrown to avoid gold from "getting away" however the now/then suppressed coil spring will spring lose

PHYSICAL GOLD the ultimate currency that has always passed the test of time

All Aboard The Gold Bull Express - Part ll

Socrates964GBS Australia#1207465/6/04; 06:19:47

I think we need to file a missing security report on Gold Bullion Securities Australia.

For weeks there was a press releaase on the WGC's Australia site claiming that it was going to be delisted and all of its 9t of gold sold into the London AM fix on May 5 (or was it May 7 - I think it was the 5th, but perhaps someone can correct me). Obviously part of the WGC's strategy to force prices higher.

Now I go back to the site, this press release has vanished without trace. So if we see the gold market being divebombed over the next day or two, I think we can make a highly educated guess as to where the metal is coming from.

Or are these just the feverish ramblings of a gold conspiracy nutcase? Comments?

misetichInterest Rates and "The Death of Gold"#1207475/6/04; 06:59:01


While a rise in interest rates might be presumed in the popular media to be theoretically bad for gold, it is more important to ask and answer several related questions before jumping to any particular conclusion. First, is the prospective rise in interest rates the beginning or the end of a process? Second, are the increases in nominal interest rates identical to real interest rates? Third, and most important, will the interest rate increases be favorable or adverse for the returns on financial assets?

A core deception of the moment is the notion that a few up ticks of 25 to 50 basis points in short term rates will be sufficient to arrest the forces of inflation set in motion by the most aggressively accommodative Federal Reserve in history. Real interest rates, defined as the 90 day T-bill discount rate less trailing twelve months inflation, are negative by approximately 100 basis points (see chart below). This is, no doubt, a very gold-friendly statistic. A few hundred basis points of rate increases over the next twelve to eighteen months raises the possibility that this measure will no longer be so friendly. On the other hand, if measured inflation rises in lock step with the rate increases, the environment will remain positive for gold.
Finally, what collateral damage would arise from a multi-year rise in interest rates sufficient to quell gathering inflation? The policy choice will come down to whether it is preferable for the US consumer to pay for $3.50/lb. copper or 10% mortgage rates. Which is more visible and which is easier to hide? Since the days of Volcker and Reagan, the sensitivity of the US economy has shifted dramatically away from the price of copper and other raw materials and towards the price of money. The Fed has said as much in numerous speeches. With the interest rate on 56% of sub-prime mortgage loans calculated the adjustable way, unprecedented carry trade leverage, and the stock market "wealth effect" a beacon of policy, a political Fed seems likely to opt in favor of glossing over substantive issues versus Volcker-style tough love.
The gabby Greenspan Fed has failed to communicate to those offside in junk bonds, overpriced equities, interest rate swaps, emerging market sovereign debt, and all other unfathomable reaches of the carry trade of the stark choice between tolerating a further buildup in inflation or aggressive rate increases that would choke the economy and collapse the carry trade. To preempt inflation fostered by four years of aggressive ease, the Fed must drive a sustained and politically untenable rise in real interest rates. Rate increases cannot be tepid or token. Once inflation becomes entrenched in the industrial economy, financial structure, and public expectations, it is notoriously difficult to root out. The longer the Fed waits, the more severe the market pain. The Fed's policy dilemma contains the seeds of a prolonged bear market in financial assets. The unwillingness of political leadership to address the fiscal issues surrounding the open-ended financial aspects of terrorism in conjunction with generous entitlement programs is a recipe for expanding debt issuance, which the Fed will be called upon to accommodate. The Fed may continue to bark but it cannot bite.

The "gold war" continues with paper pushers on one side topping their Ponzi pyramid schemes-
US-EU-Japan have flooded the world with liquidity during the last couple of years -

What have they achieved?

Yes global economy growth is showing - primarily due to China's expansion -

EU economy is laboring - and the US growth is overstated and propelled by non-reproductive spending - housing - military

Why the sudden attack - counter/attack on gold in 2004? Each time the line of resistance is higher and higher - CB's are getting desperate -

UK and Swiss gold is half-gone,
Argentina, Australia, Canada, Norway, are no longer in the game as their vaults are emptied
Armenia was the latest casualty


All Aboard The Gold Bull Express - Part ll

Clink!Whatever will they think of next ?#1207485/6/04; 07:13:59

Belgian posted this morning :-
All : Isn't it amazing how extremely subtle, but energetically, we have been... and are being totally "over-paperized" !?

C! : I just happen to spot a link to this page - it leaves me gobsmacked (er, that would be 'speechless' for the uninitiated).

"On March 26, 2004, the first-ever trading in futures on the CBOE Volatility Index® (VIX®) began on the CBOE Futures Exchange (CFE). The VIX Index is a key measure of market expectations of near-term volatility conveyed by S&P 500 stock index option prices. Since its introduction in 1993, VIX has been considered by many to be the world's premier barometer of investor sentiment and market volatility."

So, if we play that 6 degrees of Kevin Bacon game, we could have an option on a futures contract on a relative measurement of the trading history of an index of the S&P500 (which, after all, is a list of paper values). If that's not papier mache, I haven't being paying attention while helping in my son's art class ! I'm not sure which aspect of this that amazes me the most - that someone would think to offer this sort of contract, or that anyone would put money into it !


PS. Actually, the literal meaning of papier mache fits nicely here - chewed paper. (Yes, that got groans of 'Ooh, that's gross!' the class !)

Federal_Reservesmisetich> Enjoy your Ino post and summaries#1207495/6/04; 07:31:23

we are witness to some of the most reckless economic and foreign affair policies since the Johnson and Nixon adiministrations. Washington and the FED nearly destroyed the US economy in the 60 & 70's. Volcker righted the ship with tight money, we finally departed Vietnam, but only aborbing the huge aftershock pain in the early 80's. We have a Fed chairman trying to restore his fogged over luster and gain another 2 year term, and a President who is trying to get re-elected. As such they have pumped up the economy with ever economic stimulus trick invented since Adam Smith. In so doing, they have emptied the tanks of monetary and fiscal policy and should we have a set back now, talk will be cheap, and the ability to take action non-existent.
misetichConsumers Shopped 'Til Sales Dropped#1207505/6/04; 08:54:48


CHICAGO (Reuters) - U.S. retailers' April sales could not keep up with the torrid pace set in the first three months as shoppers took an after-Easter break, but higher prices protected profits, the companies reported on Thursday.

Bill Dreher, retail analyst with Deutsche Bank, said April's results show that high-income consumers continued to spend, but lower-income families pulled back after showing signs of recovery earlier in the year.

April auto sales disappointed
Retail april sales disappointed
Energy prices soaring
Price inflation is rocketing
Labor numbers based on anectodal reports is moderate

Jobless recovery continues

All Aboard The Gold Bull Express - Part ll

misetichReality Check:US Recruiters:Apr Strong But Hard To Beat March> May 5 / 9:51 EDT#1207515/6/04; 09:11:25


In the hard-pressed information technology area, there are further signs of renewal but the main driver is government work, with private sector hiring improving but lagging, most say
"We saw a strong continuation in April, and we're projecting staffing payrolls (mostly temporary) to be up 10% in this quarter," he said.
Marjie Peterson, president of Macrostaff, an I/T staffing firm in Bellevue near Seattle, described a brisk April but lacking the energy that she saw just two months ago.

"We still had quite a few new orders coming through and placements were good," she said. "April was good. I don't think it was as strong as what we saw in February, but it seems to be relatively steady."

She credits state and local government for elevating the demand for I/T workers, but notes that non-government clients "are finally getting around to implementing technology projects that they've been putting off
for a long time. Even though a lot is going offshore, we're seeing a lot of domestic demand for analysts and project managers."
Mike Ziman, CEO and president of Global Commerce & Information an I/T-based staffing firm in Columbia, Maryland, saw an "upsurge" in government hiring in April, although the commercial side remained essentially flat.

Because government hiring is growing, that's where his focus
remains, he said. He hasn't noticed much change on the permanent hiring front


Based on this and other anectodal reports job creation remains tepid at best - with hirings being part-time in nature plus GOVERNMENT HIRINGS, which is consistent with March's report

Who knows what numbers are going to be released tomorrow - guess not too strong - not to weak - say about 150,000-170,000 tops as it includes striking grocery workers going back to work

The number of genuine - non-government - full time jobs is probably in the 30,000 range

Jobless recovery continues

All Aboard The Gold Bull Express - Part ll

Belgian@Unimog#1207525/6/04; 09:12:47

Allow me to rephrase your question : In wich currency-camp are the oilreserves !? You see the answer to this question evolving, daily. Oil is maneuvering out of the all embracing dollar sphere towards the euro umbrella. I'm using this funny wording as to pull your attention on the fact that this is an evolving "process" that is taking place.

Think about the places (oil + its corridors) where EU-US are cooperating. Afghanistan/Georgie/Balkan, for instance.
EU and US, temporary co-operate for different reasons. Take a closer look to what is happening in Georgie-Adzjarie.
Putin's Russia has chosen to come much closer to the EU and distancing itself much further from the US, on oil and oil related matters.

The EU is in a very dual position, at present : EU supporting more rapprochement between the ME (Saudi Arabia) and Russia, means that the US is getting isolated in its geo-oil-policies. It is a dangerous (risky) policy to push the US (the dollar) into some kind of vacuum, by supporting oil's shift away from the dollar !!!

Trichet at Helsinky : Oil producers (owners) should act (behave) responsibly !!! In other words,...don't execute the dollar (too soon) with your oil-weapon. A slow and steady suffocation is more than enough.
Look at all this with a political view, Unimog.

Haha, there was a WAG-question to Trichet. But he (the ECB) is NOT showing his cards !!! But the camera was so nice to picture some funny smiles on the faces of Trichet's entourage. Liked this sequence very much.

The ECB is imvho, still supporting the dollar to a certain convenient, selfisch extend ! Politics, folks,...damned politics.

Evidence : POG was allowed to take another $6 of its paper-price, at the open. I even suspect that the ECB will give the FED ($) some breathing space with a little IR-advantage.
A matter of adding some more ballast to the dollar's deficits.

But the oil farmers are nicely requested not to devalue the euro as much as they are depreciating the dollar.

Conclusion : We all see how the $-POO- politico maneuvering is "changing" the global rapport the forces (balances of powers). Don't swallow the offer/demand blablabla, anymore.
The same will happen with GOLD, dear forumers !!! Take this oil-example as a model and extrapolate. And BTW, remember the old equation of 1 barril of oil = 1 gram of Gold !

Unimog : Nobody is going to tell you/us/them, what the proven and probable oilreserves, exactly are. How oil/gas reserves are there hidden under the vast Russian permafrosts !? Russia almost equals OPEC now and is in concert with Saudi Arabia, whilst the US is liberating (?) the ME ! China is having a discrete (for the time being) role in this ongoing power-shift. They are in Brussels, today,...with an embarressing question (armement embargo).

Socrates : GBS-Australia (other) > I never have been buying this shrewd maneuver (initiative)! Members of the dollar-establishment (WGC & Co) are never going to do something that could possibly harm the dollar or its support ! On the contrary.

Out of stocks and back into dollar cash !?

Everything >>> FWIW !!!

GoldiloxMilton Freidman Award#1207535/6/04; 09:41:59

About 6 months ago, I read a book called "The Mystery of Capital" by Peruvian Hernando de Soto. His main supposition is that third world countries suffer much by not having strong legal property rights.

He has just been announced by CNBC as winner of the Milton Freidman Freedom Award.

Their latest spin on his work is that the lack of property rights supports "terrorism" by obscuring property accountability and tracking.

Why should only the "developed" countries risk their homes in derivative banking Ponzi schemes? Let the poor countries in on the "homeowner roulette" game, too.

To me, it just sounds like a scheme to increase the "connectivity" of the third-world dictatorships to their Word Bank/IMF overlords.

GoldiloxOil Isolation#1207545/6/04; 09:45:42

@ Belgian and Unimog

Given the itchy trigger fingers of the Cheney/Rumsfeld/Wolfie power structure, oil isolation is truly a dangerous policy, as illustrated by Pearl Harbor in 1941.

a nation of onepog#1207555/6/04; 10:57:23

What is going on with gold is this: Since the beginning of September, through today, it has passed through, and returned to, 380. It has gone above that of course. And it started out below that, certainly. But it has returned to it and has touched it again. I would not be surprised if it fell below it further, at this point, and what happens after that could depend on a number of things. Consolidating above 380, at this time, seems second-most-likely. And going up from here, third-most-likely. As knowledge of the true facts gain strength, and if gold's value really is more than it is presently valued at, then an upward movement could begin to show some time around the middle of May, or some time later. This is barring unforeseen events, that could cause it to do differently. Buying interest seems to have retreated, or faded, at the moment. The forces appear to be poised to act, and look about equal to me, from what little I can see. If economic realities continue bleak, these facts will eventaully emerge. When people begin understanding this, then pog will probably go higher. For several reasons, I expect this potential to become actual no sooner than the end of summer, if it becomes actual, given no jolt occurs, which of course cannot be predicted at this time. One other likely probability, in my view, is that pog could noticeably acquire new strength in mid-May and start climbing decisively, judgeing from similar situations that have occurred in the past.

Evil must be stamped out. But before we do that, we learn for sure what is evil and what is not.

a nation of oneperfection is difficult to achieve#1207565/6/04; 11:01:15

"Evil must be stamped out. But before we do that, we learn for sure what is evil and what is not."

That line should read,

"Evil must be stamped out. But before we do that, we must learn for sure what is evil and what is not."

misetichGreenspan 'concered about yawning budget deficit"#1207575/6/04; 11:08:27


The resolution of our current account deficit and household debt burdens does not strike me as overly worrisome, but that is certainly not the case for our yawning fiscal deficit. Our fiscal prospects are, in my judgment, a significant obstacle to long-term stability because the budget deficit is not readily subject to correction by market forces that stabilize other imbalances.
Among the limits we have been pressing against are those in our external and budget balances. We in the UnitedStates have been incurring ever larger trade deficits, with the broader current account measure having reached 5 percent of our gross domestic product (GDP). Yet the dollar's real exchange value, despite its recent decline, remains close to its average of the past two decades. Meanwhile, we have lurched from a budget surplus in 2000 to a deficit that is projected by the Congressional Budget Office to be 4-1/4 percent of GDP this year. In addition, we have legislated commitments to our senior citizens that, given the inevitable retirement of our huge baby-boom generation, will create significant fiscal challenges in the years ahead. Yet the yield on Treasury notes maturing a decade from now remain at low levels. Nor are we experiencing inordinate household financial pressures as a consequence of record high household debt as a percent of income.
Has something fundamental happened to the U.S. economy and, by extension, U.S. banking, that enables us to disregard all the time-tested criteria of imbalance and economic danger? Regrettably, the answer is no. The free lunch has still to be invented


Sir Greenspan is not concered regarding housing bubble, household debt as he sees very little risk in housing prices collapsing -

Increases in IR he says will not affect the majority of consumers

...but he's concerned about the "yawing budget deficit" -

Sir Greenspan believes HE HAS successfully coped with deflating stock bubble. Has he?

The declaration of victory is far too early as the stock market are still in a bear market.

Under his reign Greenspan allowed a marriage between the stock market/economy.

Individual wealth that Greenspan bases his counter arguments to accumulated debt levels are based on valuations of assets - primarily stocks, bonds, and housing

It remains to be seen whether:

The much trumpted economic recovery is sustainable
Whether the stock market valuations can be maintained
Whether the engine - consumer spending - can keep on going now that REAL price inflation is hitting them, genuine job creating is laboring at best

In a recent speech Greenspan acknowledges energy prices are rising and will change the landscape of the US economy -

Just as a true banker Greenspan figured the individuals which lost their jobs in the manufacturing industry would be able to re-educate and find alternative employment- THEY HAVEN'T

Interestingly enough the budget surpluses turned to deficits as SM valuations fell and jobs disappeared.

...oh those "yawning government deficits" - were probably caused by the loss of tax revenues -

Sir Greenspan Mr. Market has knews for you - your victory declaration was a bit premature

All Aboard The Gold Bull Express - Part ll

CometoseSaudi Prince Abdullah comments#1207585/6/04; 12:09:31

NOT NAMING NAMES more than to say the donkey is THE ZIONISTS and THAT THEY WORSHIP THEIR GOD WHO IS SATAN making them (the participants ) SATANIC.....

He must have been reading some of the same material that I have......

THIS IS VERY HEAVY POINTED AND SEVERE RHETORIC that has pretty far reaching implications for COOPERATION IN THE MIDDLEEAST FALLING APART and for THE ENDURING PROBLEM OF OIL AND ITS LIMITED SUPPLY Add to that the failing image of LEGITIMACY OF US AUTHORITY and we move further into the court described by Another and Friend of Another....

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CometoseInterest rates#1207605/6/04; 12:23:11

Misetech got it

Ned has got it

DON'T listen to what they say ......

messing with interest rates now is not an alternative ..

It's CHECK MATE>............

As the months go on this will become evident....
THEY MAY NOT RAISE as fast the discount rate as Inflation and Real interest rates surge higher

Apprehension of the conditions as they exist and comprehension of the Feds predicament will send GOLD and perhaps silver merrily on their way higher ....

Tomorrow and Monday may be perhaps the last opportunity to buy at the lows.....

I feel that we are going to be having CHRISTMAS IN JULY this year maybe June...

Happy Prospecting.........

TownCrierFed's Olson says worried about yield curve creep#1207615/6/04; 12:45:56

CHICAGO, May 6 (Reuters) - The extent to which some banks, including smaller community banks, are playing the steep Treasury yield curve to seek out higher profit margins is "definitely a concern," Federal Reserve Governor Mark Olson said on Thursday.

...Olson said that some financial institutions are "creeping out" on the yield curve.

"To improve their margins they may be compromising their asset liability management."...

The kinds of yield curve strategies alluded to by Olson -- borrowing short-term and lending long-term -- were a factor in triggering the savings and loan scandal of the 1980s.

Recently, because the Fed has kept interest rates so low, banks and other investors have been able to borrow at extremely low rates and buy high yielding longer-term debt that can yield two to four times their original borrowing costs.

...some analysts worry about the potential for market turmoil as participants exit similar positions en masse.

-----(see url)-----

The Fed shall step lightly in any real battle against inflation because banking system is too big and important to our way of life to be brought down like dominoes.

Therefore, expect more in the manner of lip service than any meaningful adjustments to the target fed funds rate.

"We shall have the hyperinflation."


mikalLOEL?#1207625/6/04; 13:17:00

Does the following snippit qualify as sufficiently
meaningful to satisfy the public's curiosity?

U.S. stocks hit by rate worries
Thu 2:00pm ET - CBS MarketWatch
U.S. stocks were in free fall Thursday as renewed interest rate worries following another round of positive economic data prompted an indiscriminate sell-off.

If so, then they accept contradictory news stories:
"Stocks rise on positive economic data" and "Stocks fell on positive economic data". Symptom of PTB on a CWS- Compressed Work Schedule and stress meds?

TopazPaperGold underperforming.#1207635/6/04; 13:24:42

Throughout April and continuing this mth PoG looks to be struggling against it's alt currency counterparts as the slo-mo deflation continues.
@92 DX we'd expect to hear a swaithe of lowering guidance which could sound the death nell on SM's. Another pivot point now on the horizon is 5.4% Long Yield.

We watch!

mikalLOEL=#1207645/6/04; 13:27:05

LOEL= Lowest Observed Effect Level:
This isn't supposed to be the purpose of the news, pandering to the LCD- lowest common denominator, unless
the old capitalist, free market in news has
in large part been usurped by monopolistic,
state-supported indoctrination.

TownCrierMarket close, 24-hr newswire#1207655/6/04; 13:49:38 excerpts:

Gold for June delivery, which traded at an intraday low of $387, closed down $5.40 at $388.40 an ounce on the New York Mercantile Exchange.

"The gold market continues to react negatively to stronger U.S. economic growth on the assumption such growth leads to higher interest rates, which in turn leads to a higher U.S. dollar," said Peter Grandich...

Appreciation in the dollar against the major currencies "can only be bad for gold," he said. Earlier, the Bank of England lifted its key interest rate by a quarter of a percentage point, citing concern over the potential for inflation due to the momentum in the global economy as well as in the U.K.

[However,] the move follows the Federal Reserve's decision Tuesday to leave its policy on U.S. interest rates unchanged [as did the European Central Bank today].

But "higher inflation is ultimately the best supporter of higher gold prices and the killer of any currency," said Grandich.

"While gold can remain under pressure until the market recognizes the inflation angle, to me it's only a question of when, not if, it does," he said.

Mr GreshamThe Future of Social Security#1207665/6/04; 14:31:09

Sorry, it's been a tough month. I've been blabbing for years about OTHER people taking a financial hit, and then my own sanctuary gets raided, so I'm empathizing. EMPATHIZING. My seasoning as an investor proceeds apace, and my only consolation is that I am still a SMALL DOG! I cannot lose the great fortune that I do not hold. woof!

Anyway, I still think Social Security's shakeup will put the firecracker under POG, when people realize they really need to SAVE, and here is the harbinger (besides Greenie's speeches -- anybody got EARS out there???) in the NYT (the IHT link doesn't require sign-in) today, about Japan:

"A Tough Sell: Japanese Social Security
"TOKYO, May 5 - With almost 40 percent of young workers skipping out on their social security payments, Japan started an advertising campaign featuring a popular actress, who sternly lectured subway riders: "So you don't mind crying in the future? Pay now. Or later, you don't get paid."

"Then, enterprising reporters discovered that the 20-something actress, a self-employed worker, had neglected to pay into the national pension system for years.

"But as Parliament prepares to vote Thursday on legislation to increase pension contributions gradually by 35 percent, other enterprising reporters have uncovered that seven ministers, a third of Prime Minister Junichiro Koizumi's cabinet, also have neglected to pay into the National Pension Plan. [G: Sounds like Congress, doesn't it?]

"With the ministers of economy, of finance and of trade and industry on the list, the opposition thought it finally had an issue to take to voters in elections this summer. Then, through more enterprising reporting, it was discovered that Naoto Kan, leader of the opposition, had neglected to pay into the plan for 10 months in 1996, when, as health minister, he was in charge of the national pension system..."

G: And so on, and so on. Hey, we educate our kids to be smart, as do the Japanese. They can do the math, and we teach them to look forward. They can see a Ponzi unwinding...

TownCrierTrichet on rates and national deficits and oil and gold#1207675/6/04; 15:00:19

6 May 2004 -- ECB President Trichet's press conference in Helsinki on behalf of the ECB Governing Council

On the basis of our regular economic and monetary analyses, we continue to expect that price stability will be maintained over the medium term. Accordingly, we did not change our assessment of the monetary policy stance and left the key ECB interest rates at their current low levels....

On the external side, the adverse terms-of-trade effects of recent rises in oil and other commodity prices pose risks at shorter horizons, while the persistence of global imbalances implies some uncertainties over the medium term....

Our outlook for price developments is in line with available forecasts and projections. However, at the current juncture, the increase in commodity prices in general, and oil prices in particular, may pose an upside risk to price stability. It will therefore remain important to pay close attention to inflation expectations....

On the basis of the latest Commission forecasts, the average euro area budgetary position is not expected to improve much this year or next. A growing number of countries are likely to report significant imbalances, while fiscal consolidation efforts might fall short of commitments. It is essential that all countries concerned undertake credible measures to address these concerns....

We are now at your disposal for questions....

...on the recent rise in oil prices, you have mentioned this and you have said that maybe for the short term there is a certain upside risk to inflation – I would like to ask you if you have had the chance to think about the new inflation forecasts ... because of the rise in oil prices?

As regards inflation, as I said one, two, maybe even three months ago, we expect a hump in inflation in the months to come. We are seeing this already now, with the latest information, and I mentioned that we probably would have inflation over 2% in the next months to come. ......... It is clear that oil prices are exerting an influence. They are also very volatile. I have already said that I was expecting, as were a number of other institutions in the world, that the partners that have an influence on the price of oil would exercise their responsibilities. Because it is a matter of great importance.

Mr Trichet, you have mentioned that oil prices have risen strongly and you have noted that they are nudging up price pressures. How concerned are you that oil prices also pose a serious risk to growth at a time when the recovery is still quite weak in the eurozone?

At a global level – because we have to analyse this at a global level – I would say that the overall consensus is that we are experiencing an episode of rapid and confirmed growth, and of course this diagnosis has not changed with the most recent events. That being said, I have mentioned – and I am not the only one to have done so – that each partner has to live up to its responsibility. And this responsibility is not to be neglected as regards the price of oil. That is clear.

Let me change the subject. I understand that the ECB keeps track of the quota which the countries would like to have under the new gold agreement. So far we have Germany and France. Would you be so kind as to give us the quotas and the names of the other countries that would like to sell gold?

No … I would say that I am very happy that we have this gold agreement, which has certainly been very, very useful at a global level.

As you know, it is up to each particular national central bank to say what they want to say. There is a collegial, collective commitment which has been made public by the signatories of the accord and it is up to each of them to say what they want to say.

So, as you have been mentioning, perhaps the Bundesbank said something, perhaps the Banque de France said something. But it is not for me to [say] their position.

What is sure is that the market, external observers and the entire world know what the ceiling is for the sales of gold year after year, period of twelve months after period of twelve months.

... I would like to know whether the Council is more concerned about the possible negative effects on inflation or about the effects on growth, which could be lowered by high commodity prices.

Well, again, I do not want to comment on the day-to-day evolution. It is not the way we operate. So, we will see what happens. ......And, as I said, every partner has to live up to its responsibility, but I do not want to comment any more on that. Again, our diagnosis is clear and it incorporates the price of commodities and the price of oil.

Some of your colleagues on the Council have questioned the link between interest rate cuts and spurring domestic demand in the first place. Would you agree with the idea that it is a questionable link between the two or, likewise, would you say that having no bias means that you disagree with that view? In other words, do you think that an interest rate cut could have a stimulating effect on domestic demand at this point?

I think it is a very good question which permits me to remind all of us how we proceed according to our concept of the monetary policy strategy.

We have an objective, which is price stability. We have to deliver price stability and we have to be credible in delivering price stability. This is not only our mandate as defined by the Treaty, but it is also something that is fundamental to the favourable financial environment of Europe as a whole.

As I have already said and I emphasise the point, we have a yield curve today for 306 million inhabitants which is the best yield curve that was available in the euro area before we merged the various currencies. And this is necessarily based upon inflationary expectations and price stability expectations that are the best expectations which were available in the euro area before the merger of all currencies. So, as I speak today, we are very credible on delivering price stability, according to our own definition of price stability. This is proved by the market rates that we have been and are observing on a two-year, five-year, ten-year or thirty-year basis.

So, by having the needle of our compass pointing to magnetic north, which is price stability, we not only are implementing our very clear mandate but we are meeting the necessary conditions for creating and persuing a very favourable financial environment for all maturities of loans. And that is a major contribution to growth and job creation in Europe.

------(see url for full conference)------


TownCrierA growing chorus of voices gathers over two days on this...#1207685/6/04; 16:43:25

First, a flashback of excerpts on Tuesday:
Belgian (5/4/04; 04:00:53MT - msg#: 120641)
...the financial media, want to "connect" the POG with IRs. Another search for another convenient explanation.

Gold's $380$-$430 is heavely promoted as the ideal trading range. "They" want to keep telling "you", what "your" wealth IS !!!

Gold's price must, ad nauseum, remain connected with global "tension" ! More "tension" makes you wealthier...what an utterly nonsense.

TownCrier (5/4/04; 13:15:59MT - msg#: 120663)
The 'China factor'
LONDON, May 4 (Reuters) - China's hunger for raw materials will drive further demand for commodities such as metals despite worries that the country's economy might overheat............Frank Holmes, chairman of fund manager U.S. Global Investors, said talk of a bubble in China was premature. "People are calling everything that goes through a dramatic turning point a bubble," he said. ...China's rapid growth was driven by large-scale industrial production, which marked a major transformation. "China is going through another transition...They are doing everything to build up the rural community."
-----(from url)-----
The 'Phrase of the Day' Award goes to our very own Belgian, who said, regarding the perception painted by the financial media, "Gold's price must, ad nauseum, remain connected with global "tension" ! More "tension" makes you wealthier...what an utterly nonsense."

Bravo! I mention this observation in the context of this article because it should help make it apparent to skeptics by thinking/seeing how the (hopefully peaceful) growth and emergence of much of rural China from third world status can usher in a whole new perspective on the true value of tangible assets.

That is to say, you can't make a brick wall or a leak-free roof out of merely counterparty promises. You need the goods, in hand, to stand out of the rain.

NOW, rolling forward to TODAY, in his press conference Jean-Claude Trichet echoed clearly these sentiments.

Most nations seem to be exporting jobs to China: do you think that there is a danger that the inflation in this high-growth area, China and India, will be exported back to Europe?

Well, these are two different questions, of course. One is how the distribution of growth the world over will operate and how the division of labour and the optimisation of the division of labour will proceed in the global economy. The second question concerns inflation. I have already said what our judgement on inflation is and how we judge the situation today...

As regards the question of the division of labour and of the comparative advantage in the sense of Ricardo, I would say that we are living through a period of time when a large part of the emerging world and of the world in transition is catching up.

It is of course what we have wished during the last fifty years.

We wished that the so-called developing world would progressively improve its position. It is now improving, obviously, and when we look at global growth, we see that the emerging world and the world in transition are improving and are growing rapidly. This is good for global growth, it is good for the entire world.

Of course, it also calls for adaptation in the emerging world and in the industrialised world, and this is the reason why we mention the importance of structural reforms, which would permit our economies to be more flexible and precisely to adapt more efficiently to these new opportunities. Because global growth is an opportunity, and we recognise this.

Growth in the emerging world is an opportunity, and it calls in the industrialised world for flexibility and the ability to adapt. We all agree on that. Because as you know, the Lisbon agenda is based on a consensus. We all agreed on the Lisbon agenda. Executive branches at the level of heads of state and government approved it. And of course the Commission presented diagnosis and the ECB has always backed it.

Bottom line: Read the USAGOLD forum and stay ahead of the trends, ahead of the news, and ahead of the game.


a nation of one@ mikal (05/05/04; 23:52:26MT - msg#: 120735)#1207695/6/04; 16:51:03

"We're all having enough of a time salvaging our lifesavings, without having to save our SKINS!"

This is true. But we may need to save our skins as well.

Great Albino BatThis ship is going down....#1207705/6/04; 16:53:04

What better evidence than - a canvas rag with some paint on it, making a perhaps not unpleasant visual effect, sells for $104,000,000 U.S. Dollars because it has the signature of that lousy human being and lousy painter Picasso?

Also evident is the great inversion of values that exists in our civilization - on its way out, by the way - the best proof of which is that this "great work of art" was handed over for the amazing sum of over 8 tons of pure gold bullion.

John Morley, economist and writer: "At times, a great many stupid people with a great deal of money make a great many stupid mistakes." Or words to that effect. This is one of those times, and it has certainly run its course in full.

This is more than mistakes. This is the complete falsification of values, wholesale, top to bottom; everything you can think of is falsifiedd.

A few - or perhaps we are not so few, but really the majority, just waiting for the moment - hold fast to experience and principle, no matter what the madness.

Gold is the North Star of the value investor.


BoilermakerContracting in Gold#1207715/6/04; 17:23:04

DUBAI (Reuters) - A purported statement by al Qaeda leader Osama bin Laden (news - web sites) offered rewards in gold for killing U.S Iraq (news - web sites) administrator Paul Bremer or U.N. Secretary-General Kofi Annan (news - web sites), an Islamist Web site said on Thursday.
The statement posted on the Web site said the 10 kg gold reward would also be given to anyone who kills other officials including Bremer's deputy or U.N. envoy to Iraq Lakhdar Brahimi.

comment; If you're looking for a reason to demonize gold here's a good one. No fiat, no Picassos, nothing that can be traced just 10kg gold.

TownCrierThis is an example of the lip service I referred to in msg#: 120761#1207725/6/04; 18:09:14

Fed's Broaddus: Large banks not "too big to fail"

CHICAGO, May 6 (Reuters) - Policy-makers need to change perceptions that large banks will be bailed out if they get into financial difficulties, Richmond Federal Reserve President Alfred Broaddus said on Thursday.

The issue has taken on greater urgency with the consolidation in the banking industry of recent years that has produced ever bigger mega-banks.

"Most banking analysts would agree that depositors and creditors of the largest banks are more likely to be protected in the event of financial troubles than their counterparts in small banks," Broaddus told a Chicago Fed banking conference.

"Promptly resolving large, troubled banks and imposing costs on uninsured creditors, even at the risk of some short-term financial disruption, is in my view the only means of eliminating the market's perception that large banks will receive special treatment should they become troubled," Broaddus said.

Recent mergers, including the JP Morgan Chase/Bank One and the Bank of America/Fleet mergers, have created institutions with close to $1 trillion in assets and fanned fears of a risk to the entire economy if one large bank were to get into financial difficulties.

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

I've never heard of an ounce of gold that failed.

(But maybe that's only because they're CONSTANTLY being... saved. Baadda-BING!!)



TownCrierMoney supply fluctuations#1207735/6/04; 18:29:36

Latest stats on the moving four-week average of U.S. money supply for the week ended April 26th:

M-1 up $26.7 billion to 1,338.8 billion

M-2 up $26.2 billion to 6,233.7 billion

M-3 up $45.4 billion to 9,110.3 billion

When you pause to appreciate the speed and ease with which these new quantities can swell the ranks, especially given the Fed's key focus in preserving the banking system's ability to remain adequately liquid to clear transactions to preserve the functioning of our economy, any remaining dyed-in-the-wool deflationists must sure be kept awake at night reconciling how, in their world, (hyper)inflation is not indeed the greater force to be reckoned with.

Think of it this way. The Fed stands ready willing and able as the lender of last resort and our government (in bipartisan concert) stands ready as borrower of last resort. In the macro picture, as credit-worthiness falls to zero, there is simply no way that the dollar-denominated prices of tangible things will decrease rather than increase to reflect the inferiority of the credit "asset" (dollars) being used in payment.

Just one simple man's view.


NedCometose#1207745/6/04; 18:49:35

...and you got it too pal!

These paper trading boneheads just DON'T GET IT! If the SM and job market are so good, and if the economy was perking along so well why did Greenscam elect to leave rates untouched?? We are at 45 year, repeat 45 year lows, base metals have, for sake of debate, near doubled, oil & gasoline again for discussion sake have near doubled and Greenscam HOLDS?

Greenscam wants a lower dollar (no rate increase) and he wants inflation (no rate increase) and he dares not kill the supposed SM & job market rally (no rate increase) and he dares not flirt with the derivative timebomb (no rate increase). HELLO!

Gold had a stellar, stellar day 2 days ago because of the 'no rate increase' but already, ALREADY the paper pushers have forgot and are talking rate increase, rate increase.

WHEN WILL THEY GET THE DRIFT! These morons will watch and at the first 1/4 or 1/2 point increase will boast and brag that they were right but Greenscam will still be 'behind the curve' and accelerating further and further behind.

When the day arrives that some of these blowhearts realize (is this possible?) that real interests are turning more & more negative will be the day that we laugh:


Paper and physical will separate and CRIMEX will seize up and we will extend a warm and hearty hand gesture to them.

Just call me One-Finger Ned.

mikal@ANOO#1207755/6/04; 18:50:12

Re: "This is true. But we may need to save our skins as well." I was just waiting for you to say that, glad you brought it up, albeit, grudgingly ;).
I may not have made myself clear. So here is my original post and a follow-up. This may not alleviate your fear,
but is covertly intended to be a subliminal aid
in erecting a fortress of certainty in your golden
forward outlook, OUR FUTURE,
and prevent the "beasties" from obscuring or distracting, nay, even entering your field of vision:

"Re: When will people wake up? Soon enough."
Yes. A few will be the early birds catching the golden worm (yum!) and the rest spectators.
Now let's pray the noise of any crash
isn't loud enough to wake the dead. We're all
having enough of a time salvaging our life savings,
without having to save our SKINS! ;)"

The "noise of any crash" CANNOT wake the dead,
but imagining or fearing it,
expecting or anticipating it,
reenacting or fretting it,
is inviting a self-fullfilling prophecy.
By not expecting the government to keep it's mitts
off their gold (and some say silver), some have
turned to paper instead; FRN's(Floating Rate Notes),
Derivatives, Stocks, Money Markets, etc. or
drastically limited their metal investment.
But the "noise" of ANY FINANCIAL crash, such as
bonds, equities, mortgages, currency(s), consumer spending or any combination of these and others should be
music to our ears, acknowledging that all things must pass,
like the seasons and cycles and phases and balances
Nature consists of, a symphony even if the living dead(zombies) should walk past. Folk tradition in some
parts of the world directs villagers to merely
take a different path on that special night,
to "save their skins"-
yield the zombies the right of way!

Great Albino BatMikal - interesting point about zombies...#1207765/6/04; 20:33:42

In a world where everything is falsified, as I just said, zombies are a falsification or counterfeit of life.

Lots of 'em around. Start with every single commercial bank in the world - they are, every single one of them - bankrupt.

Not one of them can, at the order of stockholders, decide to wind up the business. Ceasing to do business and collecting and paying out assets would instantly reveal their insolvency.

They are condemned to go on as if alive - but really dead!

Take gold - symbol of everlasting life.


Great Albino BatOh! I forgot to mention....#1207775/6/04; 20:36:26

Some smart people are picking up a lot of cheap gold these days.

Good for them!


barelyWhos' Buying the Gold?#1207785/6/04; 20:55:32

There was an interesting exchange on CNBC a few years back between Jimmy Rogers and Maria Bartiromo. Mr. Rogers was a guest commentator. He said that he felt that commodities was the place to be in the next few years and that although he wasn't a gold bug, he felt that gold prices would move higher in concert. Maria countered with a certain amount of incredulity. Who would want to own gold, because the central banks were selling theirs? Jimmy replied, if the central banks are selling, that must mean that someone must be . . . . . His voice trailed off. The puzzled look on Maria's face slowly vanished as she caught on that someone (silly fools no doubt in Maria's mind) must be buying the stuff. Jimmy suggested that the more interesting story was to find out who was buying.

It seems to me that the media is full of stories about gold sales, but rarely mentions the details about the other half of the transaction. This creates the (desired?) impression that holding gold is a loosing proposition. Is it possible that a lot of the gold is simply being shuffled around between (banking) entities to sustain the illusion of permanent sales? For example, bank X announces the sale of 100 tons of gold. It sells the gold to bank Y. Six months later, bank Y announces the sale of 100 tons of gold. It sells the gold to bank X. The same 100 tons of gold have now been sold twice. The media dutifully publishes the story about the gold sales, but makes little attempt to track the transactions. Add in a few more banks and the track gets even more blurred. Is this scenario possible? Does anyone have any information on who is buying all the dumped gold? Is it really being dumped?

Sundeckbarely at #120778 - Who is buying the gold?#1207795/6/04; 21:42:46

This is a question that has been raised frequently on the forum. Never satisfactorily answered as far as I can remember (perhaps - I am relatively new here). There is a lot of opacity confronting the question.

A broader question might be:

"What is the distribution of net ownership of gold in the world at any one time and what are the time-rate changes therein?"

As with other things, there will be (with gold) phenomena like "churning", where agencies of one kind or another turn over some of their gold assets in exchange for cash as they perceive of opportunities/risks. "Momentum" trades, arbitrage, leveraged paper deals of a hundred kinds, swaps, etc, etc..., but at any one time, where does the physical gold lie - all 150,000 tonnes (or thereabouts) of it? Some lies on the bottom of the ocean; some hangs on ladies ears, bangles on their arms and encircles their fingers (men too); more lies in CB vaults; some lies in the vaults of mining companies awaiting sale; still more lies in private ownership securing permanent wealth for the owners; still more again lies in land-fills as part of industrial-age/consumer relics....

Where does it all lie? Has there been a definitive study of this question?

(Perhaps the forum has addressed this in the past? Can someone point me - and others - to the "definitive" study - if one there be...)



GoldiloxWho's buying CB gold?#1207825/6/04; 23:26:13

@ barely, et al

Very interesting proposition. With all the purchasing power of the PPT, there is plenty of ammo for playing "pump and dump" in any given market, especially with overwhelming press support on top of it. I think GATA investigations are essentially pointing at this possibility. Manipulating trading may be illegal, but so is much of what takes place in CRIMEX. Spitzer's got a full plate chasing more "PUBLIC" issues like Grasso's golden parachute.

Trading roles as buyer and seller is a good way for the CB's to "support" their Bullion Bank and COT buddies.

This might be a good question for a more sophisticated trader like JS. Reading the trading patterns might reveal this activity.

I like your description of CBoX sells to CBoY, who reverses the transaction six months later. Not only is the buyer "invisible", but so is the price.

As misetech surmised, we only see the "tip" of the corruption iceberg.

Black BladeCentral Bank Gold Sales#1207835/6/04; 23:35:27

Most of these so-called CB "gold sales" rarely if ever make it to the market. It's a nice ploy, but it is more of a transfer from one bank to another. Even those caught short on Gold Loans" got caught short (including mega-hedgers) have relieved themselves to some degree but not by repayment in got but rather with currency or assets. Remember when some banks tried to give a "Margin Call" on Newmont over an acquired mine from the Normandy deal and Newmont offered 50 cents on the dollar "take it or leave it"? One bank balked but caved in when Newmont and others pointed out that the mine in question was "ring-fenced" financially and the banker had to cave in and take the deal? It was also revealed that the mine sold more gold forward than was recorded in reserves. It is not an entirely isolated case. Also rumors of increased Chinese CB gold buying persists. I can't wait until the next reserve listing from the Peoples Bank of China is made public.

- Black Blade

GoldiloxBrutal Pictures#1207845/6/04; 23:53:14

@ BB

I don't think the picture issue is really about which group of fighters is more savage or deviant. It's a draw. The more important political fallout is that Joe and Jane viewing public are squeamish and expect "war" to be like a good clean John Wayne walk in the park.

It's harder to manage public support if the TPTB are losing control of their dog wagging contest. Remember, public VietNam concensus changed when the Johnson publicity machine was discredited. Official response to that gaff has been "in bed with" journalists.

It's no different than their "necessity" to diefy Sir AG's "erudite" comments to the great unwashed. If the lumpen-investorate believe the words coming out his mouth, the context remains irrelevant.

"The Media IS the Message".

"Oil is the ONLY economically feasible energy source (if we continue to subsidize it with $Trillions in military expeditures}"

"If we can't buy it on OUR terms, we will take it on OUR terms"

"You're either with us or again' us"

"Gold is the currency of terrorists"

As you so eloquently remind us, "It's getting interesting!"

Black BladeGoldilox#1207855/7/04; 00:22:17

The point I was trying to make is that we often (too often) get only one side of the real picture(s) of what's happening in the world. As far as oil we still have "cheap oil" (adjusted for inflation of course). However, since the ME controls about 40% of the world's remaining economically viable oil, it becomes not only an economic issue but a national security issue as well. Now will increased demand and falling world production we will see some hefty price moves that will catch up and surpass the "cheap oil" we have enjoyed for many decades. Meanwhile we continue to hear the incessant cry "all is well" by the Wall Streeters who have no clue and cries from motorists who so far see "cheap energy" as a right and not pure luck on our part. Soon enough those who are unprepared will feel the pain. That's why having PMs as portfolio insurance becomes evermore important.

- Black Blade

Old YellerPerhaps us poor victims should sue OPEC#1207865/7/04; 01:01:58

What a maroon,the guy's a lawyer no less.Living in a country that manipulates every market on the globe with it's printing press,debt-based money that will inevitably spiral in worthlessness.

Back to school for you,the school of hard knocks.

specie-manBoring Change#1207875/7/04; 01:07:32

Sundeck -

I agree that our circulating coins (here in the USA) are quite boring. The Roosevelt dime is the most uninteresting coin ever made, I think.

At least some of the state quarter designs aren't bad. I like the Rhode Island quarter - but I'm biased :)

The St. Gaudens' obverse on the US Gold Eagles is nice - too bad the reverse is UGLY ! Same for the Silver Eagles.

The Platinum Eagles are a nice all-around design - probably my favorite of the modern US coins. Too bad they've stopped putting the "reverse proof" finish on the platinum eagles as of the 2004 issue.

specie-manCHECKMATE#1207885/7/04; 01:42:03

Regarding the Fed's current predicament -

Greenspan is out talking about how serious the budget deficit is. And notice how he hasn't condemned the trade deficit like he has the budget deficit.

Cheney said "deficits don't matter". Actually, he was partially right. The TRADE deficit doesn't really matter (trade deficit = cheap labor = PRODUCTIVITY !). But the BUDGET deficit is another matter.

Greenspan doesn't like the thought of having to buy all those Government bonds coming down the pipe. Doing a lot of that, above all else, is highly inflationary.

If the Fed holds rates steady, "inflation" heats up (as a result of ongoing Federal deficit spending). If they start raising rates, the interest payments on the national debt increase, putting the government deeper into the hole, forcing it to issue even more bonds at righer rates ... and so on ... in a vicious circle !

Greenspan knows this. He desperately wants to raise rates, but he can't escape the vicious circle unless the budget deficit is curtailed first.

Barring the government getting it's finances in order, the Fed has NO choice at this point other than to stay way behind "the curve". I believe that they are fully aware that the only possible exit strategy is to inflate and then strangle later - like 1974-1984.

2004 is shaping up a lot like 1974. This coming period of inflation will last, at least, until most of the cheap available labor in Asia is utilized. The one thing the Fed can't stand is seeing the average Joe get too much take-home pay. But that won't happen as long as there is slack labor available elsewhere. Once the slack is gone and wages are rising strongly (along with income tax revenues), the Fed will raise rates aggressively to try and catch up to the curve.

GoldiloxCheap Oil#1207895/7/04; 02:22:57

@ BB

I am a great fan of your analyses, but how "cheap" is "cheap oil", anyway?

At a cost of $2 Billion a day for "security" of Iraq alone, added to the other 700 foreign soil bases in 130 countries, $39 per barrel doesn't begin to describe the price. The number of lives sacrificed in both cultures for control of decomposed dinosaurs is now reaching obscene proportions.

Add in the cost of alternative energy supression (I'm sure Searle, Hutchison, Reich, and the solar and nuclear communities wouldn't call it imaginary), and the tab just keeps multiplying.

True oil prices are no more transparent than gold prices, and if I read FOA correctly, the similarity is more than coincidental.

What was FOA's hypothetical equation? $10K gold for oil?

All this must be relegated to the realm of disinformation so that Joe Sixpack believes the price of oil to be "cheap", not unlike the belief that a 5% mortgage on volatile real estate is a "cheap investment" - or 100 PE's are "growth stocks".

The "rules" of investment remind us that larger returns are accompanied by higher risks, as bubble specs are about to find out again.

Those speculating on paper gold (especially margin) are trembling with each day's increasing oscillations. Those buying and holding physical and are like the "old bull" on the hill watching the herd. Let's walk down and . . .

Belgian@Towncrier#1207905/7/04; 02:47:01

Your post #120773 + Hathaway : The US$ would never be able to do, what it is doing (debauching confetti supply) without the many different degrees of (selfish) support by those who circle around the dollar-system.

There is a suspected (known) dissident in this whole $-melting pot : The ECB and its President, Trichet...with the discrete BIS in the background !

When I'm adding up all the statements by the hired financial commentators, it boils down to a very simple conclusion : Keep supporting the $-system or...many are going to regret for not having done so ! The tone of this song is getting harsher (more threathening).

All of you, be happy and gratefull about the FED's policies and master, Sir Alan ! The ECB is now bluntly quoted as "stupid". Whilst The FED is doing everything it can, for "saving" the world's economy... the shortsighted ECB can't think about anything else than its euroooooohhhh !
Enormous conflict that will not go away.

Put 3 charts ('90 > now) on one page : M3 - $POG - Real IRs : Watch what happened in the period '93 > '95 !
The euro was coming and was going to challenge not only the dollar but also the global dollar economy. POG's "behavior" (and the $-exch.rate) in this specific '93-'95 period, is suggesting that the dollar's only defense, against the upcoming euro, was unbridled "supply" of it. Fill all the holes with dollar-paper so there is no room left for that euro, possibly gaining dept. The dollar trap !?

And since the world's economy IS about "currencies", we shouldn't be surprised if this amateur-theory, is close to reality.

Today, we see this process proceeding and already guessed the most probable outcome, unfortunately without a firm clue of the timing.

CNBC-morning : Interview with P.Holodny (London based Norimet-Norilsk).
CNBC's question : Do you think the goldmarket is "manipulated" !?
A. : Manipulation is an ugly word, yadda yadda...

Has anyone, ever asked, if IRs-exchange rates-POO-stockmarkets...etc, are being manipulated !? No, that's clean and nice "intervention",...and "the markets"...oh yeah !

The message : You, the crazy goldbugs,...stop accumulating that precious (manipulated by us for the general well being) and get (stay) into the metal stocks (gold-derivatives) as to generate income/profits for you and us .

Isn't it amazing that (authoritive)financial media are purposely being deceptive on such important matters for individual savers !? But it all happened before on the gold matters, during the runup to the 1971 event. We are going through something similar, today... !

Of course, Holodny was asked his opinion on POG : A. : One never knows...(with a positive undertone of course).

Holodny stated that people will continue to go into metals (precious) for as long as "uncertainty" is there to stay.

We, here at the CPM-forum, have our idea about the degree and very nature of that so called uncertainty.

Total will get its 25% stake in Russian Sibneft.

Conclusions FWIW, as usual.

NedCometose, Misetich & all following the IR's a MUST READ#1207915/7/04; 04:35:01


"The willingness to hold the stock of gold depends on the rate of return available on alternative assets. We assume the alternative assets are physical capital and bonds."

misetichOn The China Trail#1207925/7/04; 05:04:13


Others, like Liang Hong at Goldman Sachs, are more sanguine. They suggest that the government can slow some industry sectors, including real estate, without harming consumer confidence too greatly, and without cutting back on investment in infrastructure to address the economy's bottlenecks.

The most crucial bottleneck is electric power. Shortages have become so severe that the Chinese have begun importing power from Russia for the first time, according to a report from the official New China News Agency on Wednesday.

Multinational companies, which do not depend on the country's banks to finance their projects, are still building factories in China at a brisk pace: Volkswagen and DaimlerChrysler each announced plans for additional assembly plants this week.

"We're still seeing a lot of activity," said Michael G. W. Adams, head of Chinese business development for Gammon Skanska, one of Asia's largest construction companies. "In fact, our prospects have increased in recent weeks."

Many "experts" are predicting doom/gloom for China, primarily due to an overheated investment in fixed assets which rose 43 percent in the first quarter-and fears that the Chinese goverment will step on the brakes causing a hard landing

The impact of China's growth - commodities demand - energy demand and the prospects of its continuation MUST be putting INFLATION FEARS world wide

It is interesting to note how Sir Greenspan aptly sees an overheating Chinese economy YET remains myopic to its created bubbles - first the economy then SM then housing - debt bubble

Why the China concern? Could it just be that "they" are attempting to INSTILL FEAR and stem the flow of funds of foreign corporations and their capital

China is NOT ATTRACTING HOT MONEY (stock market) -but attracting foreign investmenst, who seek an opportunity to tap into a vast market

The "wrench in the cheap commodity wheel" that the west has taken advantage of, by using derivatives products is casuing havoc - hence the ATTACK ON CHINA

Some hope/wish for a CHINA hard landing for a variety of reasons - Someothers are threatened by China's ascend as an economic power

Some like Sir Greenspan recognizes China is HERE TO STAY - thus the increase on energy demand worldwide

The China effect worlwide from a positive impact on Asia's economies, including India's to attraction of foreign investments to increase pressure on commodities and energy is changing the political/economic landscape - as the Orient takes over being the world locomotion as their citizens gain from their countries wealth and the WEST loses as their consumers who have been BURNING THE WORLD ENERGY require to "live within their means"

CHINA and JAPAN are going head to head in assuring energy needs in both Russia and the Middle East making it a seller's market

EU is expanding - the growing pains of integrating poor country's into the fold will appear as an economic slowdown by some - whilst it is the REBUILDING OF A NEW EUROPE - more powerful, more dynamic, less dependent on foreigners-

US - Anglos are playing its military card to maintain status quo and attempting to enlarge their Free Trade zone from N to South - and getting resistance from their neighbours who are offended by the "dictated to" condonscending attitude of the US - thus slowing down the process - and seeking/pursuing other alternatives

Arabs? - How do they position themselves to avail from the change in the NEW ECONOMIC LANDSCAPE - and escape the exploitation of their resources and exploitation of western influence who have bribed -aided ruling class- sabotaging their citizens

The economic chess game is getting more interesting....

How will these changes affect the GOLD MARKET - in particular the PHYSICAL GOLD MARKET the moon the moon!

All Aboard The Gold Bull Express - Part ll

misetichAuto Sector: Pessimism in Overdrive#1207935/7/04; 05:49:40


The media continues pound their bearish mantra on the auto sector. A recent Wall Street Journal article titled "Head On" opened with "That new-car smell soon might not be so sweet." The article focused primarily on the auto manufacturer's heavy reliance on rebates in April. A New York Times article derided GM for poor quality control, stating that "In less than four months, the company has recalled more than 7.5 million vehicles, more than it did in all of 2003."

The auto industry REMAINS the hub of the US economy as millions are directly/indirectly employed. Inventories remain high -
Gimmicks such as rebates, IR incentives have spurred sales in recent years but with increasing fuel costs - increased IR's - increase material costs and a tapped out consumer the prospects are dim

A slowdown in this sector translates to a continuation of the jobless recovery


All Aboard The Gold Bull Express - Part ll

misetichFeds March Meeting - persisting slack in labor and output #1207945/7/04; 06:22:04


WASHINGTON - Members of the Federal Reserve's monetary policy panel expressed concern at their March meeting that keeping interest rates low for so long could cause problems, meeting minutes released Thursday showed.

"Some members were concerned that keeping monetary policy stimulative for so long might be encouraging increased leverage and excessive risk-taking," the minutes said.

"Such developments could heighten the potential for the emergence of financial and economic instability when policy tightening proved necessary in the future."

At its March meeting, as it
.....The FOMC generally saw the danger from inflation as minimal."Despite the rise in energy and commodity prices and reports of increased pricing power in some sectors, many Committee members commented that persisting slack in labor and output markets would keep inflation low."

The panel "continued to see conditions in place for further solid economic growth," the minutes said. It also noted that the panel foresaw "vigorous growth" in investment spending by businesses, aided by productivity gains, high profits and favorable financial markets.

Sir Greenspan a few years ago lauded the effect of lower energy prices as having added $50 billions annualized to consumer spending -

The Feds by citing "persisting slack in labor and output" to curb higher inflation fears implies LOWER CONSUMER SPENDING - due to lack of jobs

Both the Feds and EU see higher energy prices as being "cyclical in nature" and a short term phenomena - thus higher inflation is only "temporary"

What is the definition of "temporary" - High Oil prices HAVE ALWAYS translated to a recession

The longer oil prices stay at these levels and higher - the higher the impact on inflation and higher impact on consumer spending- corporate earnings

IF corporate earnings slowdown and IF consumer spending slowdown the employment situation it will get even WORSE - translating in HIGHER GOVERNMENT DEFICITS - lower stock market valuations -higher defaults by consumers on their debts -


The masters are attempting to avoid ASSET DEFLATION from occuring -

How will they succeed?

Remaining behind the curve IR
By making tax cuts permanent - thus increasing Government Deficits (see Greenspan main fear!)

The prospects/risk of a US $ crash has increased!

All Aboard The Gold Bull Express - Part ll

misetichEmployment Situation Summary -Nonfarm payroll employment increased by 288,000 in April, #1207955/7/04; 07:11:26


Nonfarm payroll employment increased by 288,000 in April, and the unemployment rate was about unchanged at 5.6 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. The April in-
crease in payroll employment follows a gain of 337,000 in March, and job growth again was widespread. In April, employment rose substantially in several service-providing industries, construction continued to add jobs, and there was a noteworthy job gain in durable goods manufacturing.
Persons Not in the Labor Force (Household Survey Data)

The number of persons who were marginally attached to the labor force was 1.5 million in April, about the same as a year earlier. (Data are not seasonally adjusted.) These individuals wanted and were available to work and had looked for a job sometime in the prior 12 months. They were not counted as unemployed, however, because they did not actively search for work in the 4 weeks preceding the survey. There were 492,000 discouraged workers in
April, also about the same as a year earlier. Discouraged workers, a subset of the marginally attached, were not currently looking for work specifically because they believed no jobs were available for them. The other 1.0 million marginally attached had not searched for work for reasons such as school or family responsibilities. (See table A-13.)
Weekly Hours (Establishment Survey Data)

The average workweek for production or nonsupervisory workers on private nonfarm payrolls was unchanged in April, at 33.7 hours, seasonally adjusted.
The manufacturing workweek declined by 0.3 hour to 40.6 hours. Manufacturing overtime edged down over the month to 4.5 hours. (See table B-2.)

According to the BLS - substantial growth took place in the

Goods-producing p42
Construction p18
Manufacturing p21
Service-providing p246
Retail trade p23
Professional and business services p123
Education and health p31
Leisure and p36
Government p8

The report appears a little odd - since hous worked remain stagnant and the manufacturing workweek declined as did OT

Typically one would expect hours increasing prior to incurring the costs of procuring/training new employees

The 1.5 million who were available/ready for work are not counted as being unemployed.

He writes the laws/published stats rules!

With this buoyant April report in addition to the March report one would expect increase TAX REVENUES to increase multifold - consumer spending increase significantly and GOVENRMENT DEFICITS TO BE REDUCED

April retail sales disappointed - Auto sales disappointed - yet more people are working - uuhm!

We wait and see....

All Aboard The Gold Bull Express - Part ll

MKNews & Views#1207965/7/04; 07:21:50

BelgianYoyo....#1207975/7/04; 07:59:25

The "boys" knock again with their $6 hammer and push up the dollar. A drop in the POO (-10%) must "normally" follow...will see ! Roll over Beethoven....
misetichGlobal: Measured Bubbles - S. Roach#1207985/7/04; 08:00:30


Notwithstanding this great rhetorical flourish, the Fed, of course, did nothing. The policy rate was left unchanged for the 11th month in a row at an astonishingly low 1%. There were hints of glacial ("measured") changes to come -- but merely hints
The road to normalization can be a perilous one. That was certainly the case in 1994, as the Federal Reserve was forever "behind the curve" in its efforts to take the federal funds rate up from 3.0% at the start of the year (or "zero" in real terms) to 6.0% some 12 months later. The ensuing carnage at the long end of the curve marked the worst year in the modern history of the bond market. That was seemingly the last hurrah for the bond market vigilante -- or at least so we thought at the time.

A decade later, however, there is a striking sense of dÈjý vu.
While 2004 is not 1994, I fear that today's Fed is in danger of making an equally serious tactical blunder. By stating with great clarity that "policy accommodation can be removed at a pace that is likely to be measured," the FOMC is virtually assuring investors and speculators that it is not about to change the allure of the carry trade in any short order. And so the impacts of an extraordinary monetary stimulus will continue to provide great support for higher-yielding, longer duration assets. Morgan Stanley's fixed income strategy team believes that today's carry trades span the gamut of assets -- from credit and mortgage markets to commodities and high-yield securities. Yet the Fed couldn't care less. By going out of the way to stress that it is going to be measured in withdrawing its extraordinary stimulus, the US central bank is doing as little as possible to discourage this folly. And so the carry trade morphs into ever-expanding asset bubbles.

IMF signalled Greenspan ought to notify markets in advance re: emergering markets

Who exactly provides funding to emerging markets? Who has borrowed at the Feds discount rate: - Banks

Who does the Fed protect: Banks and banking systems

In essence Greenspan has followed through and has given banks time to put their house in order - thus the 'measured'
since they KNOW these banks in search for profits have build up enourmous carry-trade - borrow at short-term rates and maximize earnings by lending long term

... in the meantime as the Feds keep their emergency rate at 1% - it fuels bubbles everywhere

It is interesting to note that the Stock Market HAS NOT responded positively given the ameliorated reported corporate earnings and increase inflow of funds

Thus where was this "free money" invested in? and more importantly where will it go? and who will get stuck when the bubbles bursts?

All Aboard The Gold Bull Express - Part ll

All Aboard The Gold Bull Express - Part ll

misetichGlobal: Oil Price Update: Still Higher and More Uncertain #1207995/7/04; 08:22:57


For some time, we've held the view that crude oil prices in particular and energy product prices in general would remain significantly higher for longer than the consensus expectation. If anything, however, we've been too pessimistic. Once again, therefore, we are marking our prognosis to market, and raising our crude oil price baseline forecast. We now see Brent quotes rising to USD $38/barrel and WTI to $40/bbl. in June, instead of easing to $29/bbl. in our previous forecast.

Revisions upon upward revisions on oil prices -

Far too many - (hot money - producers) - have a vested interest is seeing higher oil prices - even for a short term- thus the speculative "disruption" stories

On the other had the stark reality is that demand is increasing - OPEC and Russia hav teamed up and whenever Russia is involved in commodities - prices hedge HIGHER

The pipeline are aimed at the west - but "they" control the tap and their economies thrive on higher prices - and US, EU etc are paying the price for claiming "non-existent" inflation and growing economies

Of course the threat of a disruption is very REAL

All Aboard The Gold Bull Express - Part ll

MKDeath of gold greatly exaggerated#1208015/7/04; 08:36:53

The following editor's note appears at today's News & Views page as an introduction to this weekend's recommended reading -- "Interest Rates and the Death of Gold."

Recommended weekend reading:

"A core deception of the moment is the notion that a few up ticks of 25 to 50 basis points in short term rates will be sufficient to arrest the forces of inflation set in motion by the most aggressively accommodative Federal Reserve in history." John Hathaway

Editor's Note: Tocqueville's John Hathaway says both the linkage between interest rates and gold and the much bally-hooed death of gold are greatly exaggerated. In this timely article, he joins a chorus of top-notch analysts who conjure the 1970s as a reference point and comparison to the present era. If he's correct, and we think he is, today's selloff, blamed by financial pundits on a possible rise in interest rates, seems to be a short term over-reaction to and over-simplification of a very complicated set of circumstances.

Once again. we are reminded that more can be learned from a well-directed review of history than the shoot-from-the-hip day-to-day analysis commonly seen in the financial press. Hold the course. . . Buy the dips in gold, and sell the rallies in stocks and bonds until you achieve the proper balance - between 10% and 30% of your overall portfolio in gold.

That strategy worked exceptionally well for the 1970s, it is likely to work now. Don't let short-term market events undermine your long-term sensibility. Little has changed over the past several days with respect to the big picture. In fact my reading is that the international currency situation is even more threatening now than it was a week ago (Please witness the dire warnings from our Fed chairman on the budget deficits.) All the seemingly good economic news of the past several days is more the result of worldwide monetary inflation than it is an enduring change in economic fortunes, and any interest rate rises that do come will be meant to chase inflation. In this go around, there is a difference however: Now all currencies are suspect and likely to depreciate against goods and services. The ghost of John Law has come to haunt the international dollar-based economy.

We invite you to consider:

"Interest Rates and The Death of Gold"


Today's Headline Story:

Looming oil crisis
will dwarf 1973

Paul Erdman says geopolitical crisis could topple House of Saud, thrust world economy into crisis . . . (More)


We invite your visit. We do expect some dip-buying at the office this morning. Please call if you have questions, need quotes, etc.

misetichChina Trail - China auto production up 25 percent in first quarter#1208025/7/04; 08:50:57

BEIJING (AFP) - China's burgeoning auto industry produced 1.3 million automobiles during the first three months of the year, up 25.63 percent from the same period in 2003, statistics showed.
Of these, 1.28 million were sold, a 28.98 percent rise on the previous period, the China Automotive Industry Association said
China surpassed France as the world's fourth largest vehicle producer last year with output of sedans, trucks, vans and buses hitting 4.44 million.

Boosted by an explosion in urban middle-class wealth, it is expected to surpass Germany as the world's third largest maker of automobiles this year, with production forecast to hit 5.15 million units.


Analysts including the Feds, Moodys are 'warning' of an overheated chinese economy - and the chinese have conceeded "some areas" are and are taking selective steps to curb those areas: primarily steel, cement

The market overreacted to the China story - giving Banks the opportunity to carry out a raid on commodity speculators

However the underlaying COMMODITY AND ENERGY DEMAND is untouched - thus physical meets paper - and higher price inflation is in the West economic pipelines

Very bullish for gold! physical gold! as bets have been placed the wrongway agains China and energy demand

All Aboard The Gold Bull Express - Part ll

misetichMarch Wholesale Inventories Rise 0.6 Pct#1208035/7/04; 08:58:40


Stocks on hand at wholesalers grew by 0.6 percent in March, well below the 2.7 percent gain registered by wholesale sales.
Metals sales and inventories both posted record gains, with sales in that sector surging 14.4 percent in the month.

Very bullish report as ratio to sales are a declining low. However to rebuild those inventories to match sales growth the replacement costs are MUCH MUCH HIGHER due to commotities and energy price increases thus plenty of fuel in the INFLATION PIPELINE

All Aboard The Gold Bull Express - Part ll

misetichChina Trail - Red Dragon has awaken -#1208045/7/04; 09:24:03


China's Foreign Trade to Reach US$1 Trillion
China's foreign trade this year is forecast to reach US$1 trillion, up 17 percent on a year-on-year base, according to a report released in Guangzhou recently by the Ministry of Commerce and the International Trade Economic Cooperation Institution.
and here's ANOTHER snip from the Chines Bank Governor Warning the West on rise of IR

"Zhou also warns of prime risks to global economic growth. The international community should clearly recognize the prime risks to global economic recovery and all countries should actively participate in policy coordination and cooperation and strive to maintain sustained global growth, he said.

According to Zhou, the vulnerability affecting global economic growth since the Dubai meeting in last September has by no means been entirely eliminated. Geopolitical confrontation persists, and the debt remains a very conspicuous problem in some emerging markets.

Although the global economy shows obvious momentum toward recovery, it is still true that the global economy relies excessively on condition in certain individual countries, he said. Therefore, great uncertainty remains as to whether the US economy has entered a period of stable growth.

Zhou also said that uncertainties in the timing and magnitude of macroeconomic policy adjustments by the major industrial nations are putting the world economic trends at increasing risks.

If an interest rate hike is not well timed, or if it is not executed with proper intensity, the result might be a short-term upheaval in financial markets, which would in turn adversely affect the global recovery, he said.
End of snip

Orient is growing multifold - the West is growing slowly (real growth)amidst of emergency IR, government stimuli, housing bubble and higher debts

The west warns China on "overheating" whilst China warns the west be careful "how timely you increase rates"

In the meantime the INFLATION pipeline is gathering strength and steam

All Aboard The Gold Bull Express - Part ll

misetichAsia: A Rising Power of World Manufacturing #1208055/7/04; 09:45:48


Experts believe that it is the global industrial transfer that enables an increasing number of things labeled "made in Asia" to become world crazes today.
World major manufacturers of computers, electronic products, telecom devices and petrochemistry have already transferred their manufacturing centers to Asia, including such trans-national giants as Microsoft, Motorola, General Motors, General Electrics, Dupont, P&G and Siemens.

At the same time manufacturing had undergone reshuffle within Asia, Magarinos said.

Traditional manufacturing enterprises in Japan, the Republic of Korea, and China's Taiwan and Hong Kong were now transferring at an amazing speed to other places of Asia, in which the Chinese mainland benefited a lot.

Onkar Kanwar, president of India's Apollo Tyres, said taking over a considerable part of western manufacturing, Asia had won itself a favorable position in world competition within a short time by making full use of the vast international market and exerting its own advantages.
In 2002, the purchasing centers spent over US$30 billion on China's commodities and experts predict that it will grow to more than US$50 billion by 2005.
The integration of western capital and Asia's cheap labor force since the 1980s had created a number of world famous manufacturing bases in Asia. More and more goods in the world market were seen labeled "made in Asia", said Kanwar.

The "disinformation campaign" which Greenspan has commented upon - inflaming - and which has led to a raid of commodities trading - does not stand up to scrutiny

Growth and development are ongoing in Asia whilst the US fiddles in the ME imbroglio

US government reports show recent job creation yet government deficits are growing due to a shortfall in taxation revenues

EU is struggling to maintain deficits at the 3% treshold -

What has really changed in the last 2 weeks?

Nothing! absolutely nothing! but the attempt to create a false perception of actual events - and capitalizing with devious means to support those manufactured concepts

Asset Infaltion is soaring
Energy prices are soaring
Commodities prices remain high
Price inflation in service industry is soaring
Emergency Rates are being maintained in US, EU, Japan
Government deficit is soaring
Stock Market has been unable to pierce the 11,000
Bond Market vigilantes are becoming active - Mortagage rates are rising

All Aboard The Gold Bull Express -Part ll

GoldiloxDeficits make CNBC #1208065/7/04; 10:18:48

Bob Pisani just said "This is the FIRST time I've heard the 'bears' add deficits to the list of their arguments.

GEEEZ. . . where has he been hiding, and which "bears" is he talking about?

Another diefication of The "Word of AG"?????

GoldiloxWhy dish the Chinese "miracle economy"?#1208075/7/04; 11:01:37

Three to six months ago, investors were led to believe that the US markets were teetering, and analysts sent billions of spec $$ into Chinese IPOs as a new "miracle economy".

As market makers are wont to do, fleecing the early specs to make money on the volatility is a normal component that keeps the SM machine rolling in the dough. Now that the Chinese miracle IPOs have shed about 30% of their perceived value, watch for Wall Street to effect a second reversal in hype at some Fib number, so they can get a second round of sheeple to chase their losses.

What can really hurt the Chinese economy?

US retail markets must stop buying their output. . . this would mean:

1) Massive inflation strangling the US consumer market, or
2) Trade restrictions from a nit-wit Congress scrambling to protect their pet special interests
3) Increased hostility risk in the shipping markets (for $ Bill) l:^)

A nice secondary reaction is being realized by the COT in commodities markets. The hammer has created new opportunities to frighten the specs out and recreate the commodities bull with all the "right players" on board.

Notice no one is mentioning the job reclassifications and multiple job holder skews any more. If 288, 000 workers finally got a burger flipping gig, we now have a lot more "manufacturing" jobs. If 144,000 got two part time jobs each, well, you get the picture. . .

A lot of hype lately about retail automation. No more strikes by retail clerk unions will be tolerated, as they will be replaced by machines.

Got gold? Not paper gold, silly, but the kind that hurts when you drop it on your foot.

Sinclair is still right. Timing is the only issue, which is always critical.

I think we should quit trying to prop up the POG and just watch the train slow down enough to quietly, comfortably get on board. It's going to roll, but "non-paying" customers must avoid the notice by the conductors, or actions will be taken to throw them off the train.

Great Albino BatBonds are crashing, so...#1208085/7/04; 11:48:09

What's the alternative to the US Bond? Gold, of course. to take down gold strongly. Wouldn't want a few people to get the wrong idea...

Won't work for long.


GoldiloxNot Quite Perfect#1208095/7/04; 12:24:19


"The latest Unemployment and Productivity numbers are out today and contrary to what the Fed has been selling, inflation is not as tame as they'd like you to believe, not that you'd be fooled anyway after buying milk, gas, and $14/lb steaks: ÝThis might just be a setup day for the markets, which might take a real pounding tomorrow, that is, if you read John Crudele's spot on piece in the NY Post this morning...his analysis of the jobs report coming tomorrow is a fine example of uncommonly clear thinking about government numbers and what they will mean to us little guys: My expectation?Ý I expect the market to drop 75 Dow points today - or less - with a miraculous last hour rally" by the PPT.Ý Then tomorrow a big decline of maybe 150 points if Crudele is right.Ý But you make your own trading decisions, this is not advice...just a guess.Ý Crudele's "big picture" sounds oddly like what you've been reading here:

"First I have to start out by saying that I continue to believe the economy is really only growing moderately - less than 4 percent - despite heroic and historic efforts by the Federal Reserve.

And no matter what the Labor Department numbers may say, I think job growth (especially quality jobs) is much smaller than it should be in an economy that is growing moderately.

I also think that the quality of the Labor Department's statistics sucks and that one month's data is only useful for placing bets on how the various financial markets will react, not for determining how the economy is actually doing.

Right on again, Crudele...


Not a bad piece of predicting as the Dow is sitting at -105 as I read this. More comments on the BLS data skew in the full daily piece.

GoldiloxBLS data#1208105/7/04; 12:29:19

Another "analyst" on CNBC just said "28 months of decline versus two months of job growth . . . which is the trend and which is the bounce?"

Not all main stream analysts are playing the bull role as fervently as expected.

BLS=Golden Arches

CPM=Golden Assets

Got gold?

DryWasherNew Look and a New Library at The Golden Sextant:#1208115/7/04; 12:41:31


"Today The Golden Sextant introduces a new section to the website: a Library. Its purpose is to try to make more accessible to the public various important and useful materials dealing with the subject of gold as money, especially since many of them are either out of print or otherwise quite difficult to obtain. It would be hard to find a more appropriate initial work for inclusion in the Library, or one where the copyright laws present less of an obstacle, than the Report to Congress of the Commission on the Role of Gold in the Domestic and International Monetary Systems delivered in March 1982 and described more fully in the following commentary. Although a portion of this material has been published previously, until now the entire Report has been available in only a handful of libraries worldwide. We post it here as a public service."

End Snip:

DryWasher Comment:

I know that most readers here are very familiar with Reg Howe and his Golden Sextant web site, but if anyone is not familiar with it, you should become so because it contains some of the best information available anywhere on the Gold and Money situation. I would classify this one as an advanced course of study for serious goldbugs.

Warning: Be prepared to spend considerable time when you visit the new LIBRARY. We are talking about hundreds of pages of information.


a nation of oneThis probably will sound crazy to a lot of people, but maybe it's not.#1208125/7/04; 12:55:20

Kerry is coming on quite effectively. In his boast yesterday, "...I will not be unaware of what is going on in my command," he sounded more like a competent commander than Bush, whom almost half the nation feels is not just wrong for the country but very wrong. Public euphoria can be brought by such rhetoric alone. Many of us don't need to be reminded that prior to WWII a nation was transformed by just that kind of exhilarating speechmaking. Talk does motivate more people than do most types of substance. It isn't possible -yet!- to tell for sure whether Kerry will ever become a dictator. But the scene is certainly being set for one. Many authoritarian rulers have gotten their authority from the fact that the public adored them. And we should know well enough by now, that the man we vote for, and the man we get, are not always the same man.

Public euphoria has the ability to change this nation as well now as any other, both profoundly and in unexpected ways, particularly since the quality of our public's ducation has so significantly declined over the past ten decades. Such euphoria is based on faith however, and, like all faith-based effects, it must at some point come into tune with reality. Nothing has improved in the nation's economy, in real terms, that I am aware of. The dollar has not become stronger as a result of anything of substance. The very real dangers I have been learning of for the past several years are still in place. Therefore it appears most reasonable to conclude with caution, and to think that what we knew before -that the material elements of what matters economically- will either change (sooner or later), in ways that agree with the faith, or that will come undeniably to light in a more jarring form, even to those who now refuse to see them. If and when that happens, those market movements -which have so recently been of concern to us- will resume.

Cavan ManPHYSICAL GOLD SALES REPORTING.....#1208135/7/04; 13:07:31

Cavan ManWhat wrong with this picture?#1208145/7/04; 13:20:41

General share markets getting hammered....oil down....Have a Guinness and relax....CM
Cavan ManBond slaughter....#1208155/7/04; 13:24:10

$24 Billion More in ME and 1000's dead (more)..what about the rest of the defense budget?.....Surely these markets jest?.......BUY....CM (house of NM laughing all the way to the(ir)bank)Yeah....they're out of the "commodity market"..that's a good one...CM
Cavan ManBeen here for five years this month......#1208165/7/04; 13:25:49

BUY. While the herds are rushing over the cliffs I am happy to stand aside and watch. Hope UR2...CM
canamamiSounds like manipulation...#1208175/7/04; 13:26:02

...and who alone has the physical to manipulate? A CB. There's a lot in the market now which suggests the POG should be rising. To me, this means a CB is dumping to suppress the POG, to suppress an inflation signal perhaps. When will it end?
AristotleWhooooHooooo!#1208185/7/04; 13:42:14

Hey, Belgian...
Right at around the time of the A.Smith and J.Cross comments a few days ago you gave us some pretty strong hints that you saw this bout of dollar-strength and Gold-price-weakness coming.

------------Through these two members (J & A), the gold-(financial)establishment (brotherhood) wishes to send a message/hint to candidates wishing/tempted to join the gold-public !? The content of both statements are nonsense. Allow me to skip the argumentation. I'm trying to get their message.

Ingredients : $-EURO-IRs + exch. rates-geotensions-goldmine forward sales-POG-US elections.

There may be plans to strengthen the dollar, going into '05...or at least slow/halt its ($) declining exch. rate ? Ordering/commanding a halt to all dollar shorting ?

- Bond traders have six months time to get prepared for telephoned rate hikes.
- Goldmines will be encouraged (hum) to restart a second big round of forward sales.
- All hens on deck for dollar support.----------------

I salute you for your most prescient read on the situation!!!

I also read somebody here this past week wishing they'd bought Gold back when it was at its $250's low. Ya know what? Lot's of Gold-minded people were probably too busy scratching their heads at that time to take action, but not this fella. I was able to maneuver some of my affairs around and come up with some fair cash to add a *significant* stake to my personal Gold savings.... at the price of $254!!!!!!! So I hope that person can take this small lesson from someone who's done it. It isn't hard. The only difference between wishing and not-needing-to-wish is the simple act of *doing* !!!

Oh sure, I probably looked quite the fool at the time -- crazily chasing the bottom, buying my Gold at $310, then at $291, at $285, at $266, at $254, at $268, at $280, and so on, so on...

But hey, that's the breaks of having a Personal Gold Standard of Savings -- a regimen in which you get into a monthly or quarterly routine of converting your excess dollar earnings into cold hard Gold. You simply end up getting your Gold at prices through time that are all over the map. And of course, along the way you do indeed keep your eyes open and allow yourself to deviate from your routine to try to seize these extra attractive opportunities if and when they briefly arise.

I'm happy to say my pile has grown a bit since then, and with an eye at the far end of the Gold Trail, I'm eager to have this latest Goldprice downswing run its course. I won't be watching merely as an idle observer!!! It's such a treat when the "Big Paper Boys" decide it's time for Ari's pile to grow by leaps and bounds -- or should I say, heaps and pounds?!!!

Does anyone care to mark the difference between my approach and that Jim Sinclair fella I keep hearing about? Challenging the paper Gold goons like he does.... on their own turf. Sheeeeeeeesh! What's that all about???! Look how it's workin' out for him. He needs to get with ANOTHER program. Does Jimbo still believe he can corner a printing press? One contract, two contract, three contract.... four hundred thousand contract, etc... and Jimbo's gonna make 'em sweat???? Do they even notice?

Forget corners, baby...

Gold. Get you some nice round edges. --- Aristotle

Cavan Mancanamami#1208195/7/04; 13:42:24

Timing is problematic when investing :>(. CB dumping tells me higher prices as in (much higer prices) ahead. Remember the London Gold Pool! FOA is right.
Cavan ManYep Ari.....#1208205/7/04; 13:43:56

You're right bro.. Hold the metal and have a nice day...CM
Federal_ReservesFalling POG#1208215/7/04; 13:49:20

Rising long interest rates have pumped up the dollar hurting gold. IMHO this is an unsustainable trend. Rising rates will cripple demand in this consumer bubble economy and eventually the yields will drop down again.

Its been tough watching gold decline, but the fundamentals favor a long term rise remain the same: reckless face saving policy makers who wear blinders and tell white lies, rising US government and trade deficits, a titanic consumer credit bubble, expansive and aggressive foreign wars.

Cavan ManPaper Investments#1208225/7/04; 13:50:58

"You're wealth is not what you think it is".
misetichDouble Bubble#1208235/7/04; 13:53:10


As amazing as it might seem, despite the steepest decline in prices since 1973-1974, stock mutual funds are still finding sponsors in significant fashion. In the four years since prices peaked in March 2000, a NET of more than $433 billion has flowed into funds (assuming $20 billion net inflows for April)!
The Arizona Republic recently carried an article by Russ Wiles citing investment regulator concerns that investors are using home-equity loans or refinancing cash to invest, "imperiling their homes in the process." Given that some of these players may be also utilizing the temptation of margin loans as well, we'd say "imperiling" is a very apt description of the risks at hand.
Saddest of all is that there appears to be little or no recognition that the mania is still very much in place. Who's going to admit it? The major brokerage houses? Mutual funds? The SEC? The Federal Reserve? Total stock market capitalization probably peaked somewhere around $18.65 trillion and cratered to roughly as low as $9.18 Trillion at the October 2002 low. Meanwhile, at the peak, spending by governments, corporations and consumers were all predicated on the $18 trillion in stock market wealth and continued growth from that level! Close to $9 trillion in lost wealth says it all. The Greenspan and Bernanke Fed are desperate to get the money back into stock accounts. Given the amount of debt now in the system assumed by governments, corporations and consumers, we're absolutely screwed if they don't. Then again, we may be screwed if they do, since a reflation of the bubble would play out valuations somewhere way beyond absurd, wouldn't they? An interesting predicament, no? But the Fed doesn't care since they have consistently argued that they can "address the consequences" after the bubble bursts again.

Bubbles..bubbles ...everywhere - The scary part is consumers borrowing on their housing values and investing the proceeds in the stock market

Margin loans are hedging higher - $175 billions -

Undoubtedly the Feds will attempt to support the SM as 60-70% are directly and/or indirectly affected by stock market valuations

Yet price inflation is rising and the bond market responding - whilst Sir Greenspan is taking baby steps

During the past few weeks the SM did not respond to extremely good earnings reports -

Consumers are confident, CEO's are confident, investors are confident - the Feds are cheerleading economy and job growth yet the SM is not reacting to reflect the outward exhuberance - its been stuck in a trading range between 10,000 to 10,700

The good news has been priced in - just as the bad news is priced in gold and commodities

Where to from here?

The fear of Asset Deflation, bonds, stocks and housing is staring in the whites of the Feds eyes - Price Inflation is providing the sweltering heat...

All Aboard The Gold Bull Express - Part ll

mikal@Cavan Man, Misetich, Specie-Man, Goldilox#1208245/7/04; 14:19:30

Excellent analysis.
@CM- Happy 5 yr. anniversary! As a contrarian,
you're probably not going to get a much better
anniversary gift than this setup with gold.
Alos, the lower it goes, the higher and faster
any correction(s).
Here are today's closing prices and volumes
on the major indices and the 10-Yr Bond:

Dow 10,117.34 -123.92 (-1.21%)
Nasdaq 1,917.96 -19.78 (-1.02%)
S&P 500 1,098.69 -15.30 (-1.37%)
10-Yr Bond 4.766% +0.164
NYSE Volume 1,651,815,000
Nasdaq Volume 1,623,964,000
(Data by Reuters)

TownCrierVisit for closing market rap, also 24-hr headlines throughout the weekend#1208255/7/04; 14:30:35 excerpts:

Gold Walloped by Stronger US Dollar

TownCrierRussia central bank gold stock value unchanged in April#1208275/7/04; 14:52:44

MOSCOW, May 7 (Reuters) - The value of gold reserves held by Russia's central bank was $3.760 billion as of May 1, unchanged from the previous month, the bank said on Friday.

The bank values its gold reserves at $300 per troy ounce. It gave no figure in ounces for May 1. A month before it held 12.5 million ounces of gold.

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

At what point, I wonder, will the Russian bank adopt the 'best management practices' (similar to the European banks), marking its gold reserves to market values?


USAGOLD / Centennial Precious Metals, Inc.Click 24/seven, or call toll free (800-869-5115 Ext#100) for consultation Mon thru Fri#1208285/7/04; 14:57:56">gold -- a global calling card
HenriEstablishing Paper Gold Death Watch#1208295/7/04; 15:15:16

@Federal Reserve...what you are witnessing is the fall of the price of paper gold...all the good paper has been cashed in...the rest is beginning to reveal itself as bets on a losing proposition. OK the dollar moved up today maybe somebody needed some $ to cover a big gold short and had to buy on the open market. Once you start going under you wonder who put the lead in your shoes.

We now must look for a scism in the paper vs spot market for gold. Spot up paper down. The opening of the cash only gold market would be welcome at this juncture. And wishful thinking also for a schism in the pricing of gold share vs paper gold as well (but only because I am holding shares) Sure they are paper but at this point they have got to be worth more than comex paper.

CometoseACCOMODATIVE STANCE OF FED#1208315/7/04; 16:07:07

In spite of the accomodative stance the Fed took in not raising interest rates, several sectors got creamed today besides the metals....

Among them are the following:

Banking INdex
Retail Holders INDEX
Housing INDEX
Real Estate I Shares INDEX
Morgan Stanley REIT INDEX


RIDDLE: IF todays action in the above indexes is indicative of SELLING HIGH then what activity in today's markets would correspond to BUYING LOW .?????????????/

WHat has been a bear market for 20 years prior to 2001 ? Metals

What has been in a bull market since for the same two decades prior to March of 2000.....Equities

Which one of these markets represents relative value ....
Which market can one today buy undervalued compared to the other one....?? Metals

Which market has been cyclically hammered 30% in the past four months...HUI

Which market has been hammered 36% in the last month? Silver

What causes paper to be unnattractive............Debt excesses throughout the system
at Unsustainable levels......

What do all the indexes (except Retail Holders )above represent ? Markets represented by huge excesses of Paper....(DEBT)

WHat happens in a LIQUIDITY CRISIS???
What dissapears (is LIquidated ) burns up in a CREDIT CRUNCH????

WHat SHINES in the Same SCENARIO...??????
What is it that causes people to run to the EXITS.....

in a CHANGE OF SCENARIO...........

PERCEPTION ..........

ARE today's actions in the above indexes a function of changing public perception relative to what is the "INSIDER'S KNOWN (BEHIND THE SCENES) REALITY"

Is there a sector rotation occuring today where managers are dumping paper backed assets to buy metals investments that have been in a managed downward spiral for 4 months?


That's what I would do, too, if I were a manager.

TopazFor those with eyes to see.#1208325/7/04; 16:07:51

5.4% Bond Yield, 40$ Oil ... next cab off the rank will be DX92. A Deflationary collapse is brewing here and Gold advocates need to be aware of the implications for PoG. While you'd expect Gold (or the price thereof) to outperform it's alt-currency counterparts in a race to the bottom, REAL Gold, at some point will become unavailable.

I'd be loath to wait too long to acquire yours!

BoilermakerMK Message 120801#1208335/7/04; 16:19:20

In the subject message you stated "Hold the course. . . Buy the dips in gold, and sell the rallies in stocks and bonds until you achieve the proper balance - between 10% and 30% of your overall portfolio in gold."

Having been a goldbug for many years my portfolio contains more than "10 % and 30% gold". What do you recommend that I do? Sell gold? I'm very reluctant to sell gold now and hold US$ or other paper products.

If I sell my gold to your recommended range where shall I invest my remaining 70% to 90% portfolio? "Confused goldbug hoping for illumination."

Perhaps you could reveal your own position vis-a-vis gold as % of your portfolio and what makes up the balance.

This challenge is meant to smoke out what you do vs. what you recommend, an exercise in full disclosure. Please understand that I am your customer and admirer. I suspect that you are espousing the defensible "rational" position as opposed to the personal "heartfelt" one.

TGIF!! Can't take another Comex session this week.

TownCrierBoilermaker#1208345/7/04; 16:34:43

The call is a free one:


And further, on the topic of percentages, I found Aristotle's May 2nd commentary #120591 a real keeper. I've got it saved as a file on my desktop. Read the part where the line is (or isn't) drawn between the majority portion of your gold being held as real savings, versus any "extra" (maybe 10-30%(?)) gold earmarked as an investment.


melda laureMother's day sale#1208355/7/04; 16:51:19

Now if the price could just stay here for a week until payday...
Chris PowellOh, no -- not again!#1208365/7/04; 17:00:05

The gold mining industry contemplates more jewelry promotion.

Latest GATA dispatch.

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Cavan ManConvenient Scapegoats?#1208375/7/04; 18:10:12

Friday, May 7, 2004


LANSING -- National security adviser Condoleezza Rice said Friday the U.S. can mend its damaged image in Iraq by dealing openly and firmly with those responsible for the abuse of war prisoners.
In an interview with the Free Press, she acknowledged the revelations of prisoner abuse are ``very disturbing''(especially if you were the victim) and a setback for the Iraq campaign.

Turning Japanese?....CM

misetich354,000 EXHAUST JOBLESS AID IN MARCH, SETTING A ONE-MONTH RECORD#1208385/7/04; 18:13:17


The number of individuals exhausting their regular state unemployment benefits in March without qualifying for any additional federal unemployment assistance eclipsed the record high that was set just two months ago, in January 2004. New Labor Department data show that in March about 354,000 jobless workers exhausted their regular benefits without being able to receive additional federal aid. In no other month on record, with data available back to 1971, have there been so many "exhaustees."

Further, from late December, when the federal program designed to help the long-term unemployed began phasing out, through the end of April, nearly 1.5 million jobless workers will have exhausted their regular unemployment benefits without receiving additional aid. For a period of this length, this is also a record number of exhaustees. (This analysis includes state-by-state data on the number of exhaustees from late December through April.)

Today's excellent job report (if it true and refers to quality jobs) is a shot in the arm for those long-term unemployed

Whilst the above report is an analytical study following the March report (not today's) it is an indication that the unemployment is ACTUALLY RISING and not standing still at the 5.6 to 5.7% that the BLS shows

As a result Tax Revenues continue their shortfall and Government Deficit rise

Further consumer spending is constrained by the large number of unemployed which is MUCH MUCH HIGHR than the BLS shows.

The jobless recovery continues.

All Aboard The Gold Bull Express - Part ll

Chris PowellHow many new jobs really?#1208395/7/04; 19:27:03

Most of the new jobs in today's U.S. jobs
report were not really counted at all but
simply contrived.

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a nation of onegigo - garbage in, garbage out - If you put garbage into something, garbage is what will come out of it.#1208405/7/04; 20:22:54

These are just thoughts. I cannot assert that they are true or correct. All I know is that they seem to make sense to me. I might be crazy. I don't know. But thoughts like these have seemed to have some validity in my actions. Since I can't just sit here and say nothing, I would like to share them with you.

Today the dollar has been reaching for its April high. I don't think it will make it. I could be wrong. But so could the dollar. These are the beginnings of tumultuous times.

In gold, we have seen quite a lot of selling lately, perhaps first for profit-taking and then for speculative shorting, or some combination of those. But what these shorters are actually selling is not gold. They are placing bets. And they have the Gambler's Mentality. Furthermore, they are committing their actions with debt that is inherently many times larger than the money that is actually employed in their so-called trades. As long as men can write as many contracts as they want to, instead of only being able to write contracts for what can actually be delivered, there need be no end of such activity, and there need be no end to its influence on the price of real gold, although the real value of gold may be very different from its price. But the end of this speculation will be when their risk-taking appetites become satisfied. That is not rationality. Not reason. It is emotion. It is gambling activity based primarily on narcissistic attempts to fulfill the distorted perception of one's own ego. Therefore its motive and means are not primarily related to anything having to do with the real value of gold, but comes into existence, and takes action, as a result of the way a man sees himself. In this, men are often mistaken. And actions based on it are typically mistaken as well. When they have played out their desire and loaded up on vacuous agreements ostensibly written on paper, other men, who, fearing for their own welfare and safety, and who therefore seek protection, will have little recourse but to move into gold as a refuge. This will be real money, not debt, buying real gold, not paper contracts. The sellers will stand agog, with their mouths open, like turkeys drowning in the rain, not daring to fight it. At some point they will have to realize that to cut their hysterically acquired loses, they had better cover, and this will contribute to the buying, and to the increased price of gold. Of course this is an oversimplified picture. Human activity is much more complex than this. But maybe this is not a too-bad understanding of a number of aspects of it.

Another thing that might be happening, either in combination with this, or more on its own (I theorize in my secluded -but I hope not-too-ignorant-tower) is that someone, who appreciates the market as it presently exists, and knowing that in a crises gold will go up, and also knowing of an impending future crises, and wanting to exploit the rise in gold which that would probably cause, could be using this tactic, or contributing to it, by employing or manipulating third parties, in order to buy anonymously at a low price, hoping that when the crises occurs, they will be able to sell and reap profits. This doesn't seem too paranoid from my view, although it certainly is paranoid in some degree. But you know the crazy man said, "Just because you're paranoid, that doesn't mean they aren't out to get you." The election is coming up, and we have already seen, in Spain, terrorist action that influenced a national election. That was no coincidence. It was deliberate. Kerry is coming on strong. And he is known to support certain types of objectives. Bush is being run over by events out of his control, but nonetheless on account of the nature and quality of his control, and this is being made the most of by the media. Forces are not merely gathering. They are already at work. Greenspan, the media, political sentiment, the release of the torture pictures, the decline of Bush, the rise of Kerry, the present quite period in the gold market, these all make sense together. They all add up in ways that are consistent with what I am saying. If it looks like a duck, walks like a duck, and quacks like a duck, get out your knife and fork. Because of this, I have formed the opinion that one or the other of the following eventualities could play out, or some combination of them.

1.) Sellers satisfy their egoistic appetites for taking their gambling risks. Therefore they stop selling. Immediately, or after a time, various types of buyers begin to exert their influence, either quickly or slowly. The media contribute to this. Events also contribute to it. Pog goes up. The strength of the buying becomes stronger than expected. The shorters choose to cover. Pog goes even higher.

2.) Taking advantage of the lull in the general perception that the price of gold should be higher than it is, the price has been made to fall, during which time anonymous entities are acquiring gobs of it, or are committing to long speculation, knowing that it will be likely to go much higher, on account of future events which they alone know of. Then some terrible calamity happens, either suddenly or gradually, depending on whether it is overt terrorism or economic consequences, or a combination, and people become frightened, a significant number of them buy gold, and some of them, like us, already owning gold, buy even more. The price of gold goes up. The anonymous entities either sell or sit pretty.

This is the present state of my pathetic understanding. If it isn't correct, I hope I will learn better. Don't base your actions on my perceptions. It's bad enough that I do.

Oh. There is something else that could happen, which could be described as being something that I presently have no idea of.

Evil must be stamped out. But before we try to stamp it out, we need to learn what evil is, and what it is not.

Cavan ManMust read from Hathaway#1208415/7/04; 21:26:05

BTW, John Hathaway IS a physical gold advocate.

PS: Rather than reading your month end statements; weigh your gold. Cheers...CM

WaveriderILLUSIONS : Storm Watch Update from Jim Puplava#1208435/7/04; 21:30:43

"Watch the currency and bond markets. Watch the price of real estate in your neighborhood. Pay close attention to the prices all around you. And for goodness sake, take out an insurance policy--not on your life, but on your wealth. This means buy gold and silver bullion; buy gold and silver equities, while their prices have temporarily pulled back. Buy it, while you still can afford to. Buy it, when it is still available for delivery. After a flood, insurance becomes expensive. You need insurance before the earthquake or flood occurs. We are getting closer to the point of battening down the hatches--a time when we say, "'Thar she blows! Look out below!"

Waverider: Another excellent update from Puplava.

Cavan ManPlease delete last post.#1208445/7/04; 21:31:38

Sorry but I am fed up with this senseless tragedy. US Army imitates life...CM
CometoseUS DOLLAR#1208455/7/04; 23:28:43

I've been looking at a lot of opinions , observations and posts about the debt liquidations that are going to cause a run to the dollar.......but I am also looking OUR IRAQ FIASCO and seeing all of the bad press the US IS GETTING as a result as a perfect excuse for FOREIGN OWNERS OF US BONDS TO DUMP US SECURITIES.........and that sucking sound you may be getting ready to hear will be the sound of sales of US BONDS and conversion of U S DOLLARS into foreign currencies leaving the country ......albeit in a very orderly fashion .....and perhaps being converted into EURO DENOMINATED SECURITIES OR AUSSIE'S OR going into Japanse YEN to support NIKKEI....

What an interesting maze our world is becoming..

Ole Mannation of one, Evil, what it is#1208465/7/04; 23:34:54

And God saw that the wickedness of man was great in the earth, and that every imagination of the thoughts of his heart was only evil continually.
Great Albino BatTS has just about HTF!#1208475/8/04; 00:28:58

Fellow Goldmeisters!

The "Boy" by Picasso went for $104,000,000 US Pesos.
When (so-called) art goes up and up, that's one of the clearest indicators of inflation. Art thrives in inflation.

So now, interest rates are going to start going up - and if you feel we had a long period of 1% rate, get set for the coming period of high and higher interest rates. The US will be unrecognizable after high interest rates get through with it. Messy busines!

The wheels are now coming off the economy.

As Bill Bonner says, get some logs for the fire, get some wine, sit back, relax, and watch this thing fall apart, secure in your gold holdings - in jewelry, NOT!

Let the games begin!


PS And yes, Prestige is invaluable. The dirt out of Iraq is no way favorable for the US in any sphere, financial included. That Iraq goose is just about cooked, IMO. PLus for gold - maybe that's why it has been smashed?

Not on topic, but - please forgive - another "terrorist" attack may be necessary to galvanize the US into accepting the draft. Had to say it. GAB.

BelgianAri / Randy#1208485/8/04; 00:41:02

All those who, perhaps unconsciously, feel the intuitive urge to keep on "accumulating" the physical precious, at the most favarable moments,...are *- understanding- * Gold, rather than guessing about it. And more precisely, the Gold-situation in wich we have landed and whereto it will lead.
New, accidental Gold explorers on this forum will find a very "physical" atmosphere overhere with plenty of alternative argumentation. Slowly but surely, one by one,...individuals will start "feeling" Gold !
Ari,...I'm sure you don't mind that I was having LOL with..." ...think he can corner a printing press..."

Randy : Russian (or other non EU) goldreserves, mtm : When enough euro-reserves are in...goldreserves are there to neutralize the loses in dollar-reserves. One can switch to the mtm-system in no time...
It might give us an indication on how close FreeGold is or isn't ? The Value-factor of FreeGold being that Goldreserves are "permanantly" appropiately priced in a Gold friend currency.
Russia's (and ME) wealth are its enormous resources and China's wealth is its ant-capacities. Holders of real Value (worth) will evolve to the appropiate timing as to see their wealth (worth) exchanged for something much closer (associated with) a forever thing.

GoldiloxRussia's wealth#1208495/8/04; 03:13:25

Your quote: "Russia's (and ME) wealth are its enormous resources and China's wealth is its ant-capacities"

is so true.

Every conqueror since Genghis Kahn has coveted Russia's massive resources in one form or another - first the breadbasket, later the minerals and oil. So far it has been the undoing of each one who bit off more than he can chew.

Short term, the Reaganites like to boast of undoing of USSR, but the financial damage done at home is roosting in Pyrrhic victory. It seems by "borrowing" the fall of the USSR, the "winning" superpower accelerated its own financial demise.

The Russia emerging from the Phoenix ashes has much greater potential then the USSSR, as its administration (corrupt, perhaps) is much less cumbersome than the the old Lenin Party.

China is emerging in a way that demonstrates a new appreciation for its massive human resources. Jim Rogers says they are "great capitalists".

Let's hope the USA that emerges from 90 years of FED insanity is more nimble and capable, as well. Perhaps loosening the yoke of dollar supremacy is just what the doctor ordered to bring back an internal perspective of the USA as a nation among nations and abandon the role of "global gunslinger"

misetichChina Trail - Moody -a financial crisis is unlikely anytime soon#1208505/8/04; 05:31:16

HONG KONG, May 7 - The health of China's already troubled banking industry may deteriorate further if Beijing is successful in its effort to brake the issuance of new loans, but a financial crisis is unlikely anytime soon, analysts at credit-rating agencies and other experts said on Friday
Ryan Tsang, the director of greater China financial-services ratings at Standard & Poor's, agreed. "The banking sector is vulnerable," Mr. Tsang said, and slower growth "could present another challenge to a sector which is trying to reform," though probably not deliver a crippling blow.

How/where do Moody's and Standard & Poor obtain their information?

IF investors/individiduals are openly deceived by the so called "free enterprise" system - one can imagine the cover up and shenanigans going on in China who is attempting to be recognized as "a free market economy" by a Centrally controlled regime

In the US the Enron scandal revealed the con-game being played by investment banks in aiding fraudlently activities by circumventing rules and laws.

Rules and laws which they influence in design and application through powerful lobbying process and through direct/indirect participation (conflict of interest) in regulatory overseeing agency.

However, there's no denying China's centrestage emergence in the world economy. Banking problems exist everywhere - from US- (hidden in derivatives, non-disclosure, off-balance sheet items) to Russia, EU, Japan and indeed the whole fiat system worldwide.

It is China's growth that has put the squeezes on commodities - and it is China's continued growth putting on the squeeze on oil demand and consumption.

To summarily dismiss China's emergence (jawboning of Greenspan, Wallstreet, and planted news media articles)to soften up - cool off - speculative hedge funds that brought commodities prices even higher) is nonsense.

China led Asia economic recovery is dependent on export market - such as the US - as billions of cheap priced products flood the likes of Walmart

The US is dependent on these Asia imported goods - as Asia has become the "US manafacturing centre" - thus the exporting of manufacturing jobs

Imports from Asia have continued at a healthy pace, even through the mild recession of a few years ago.

The bottom line is nothing has changed in China - Sir Greenspan is concerned on the impact on commodities prices (even went to the extend of suggesting China -stop steel imports and work off their inventories- to cool off prices)

So here we have the US Fed who is unable to manage its own economy - (bubbles, bubbles everywhere) dictating to a growing emerging economic power had to run theirs- because it impacts his

Asia's strong re-emergence led by two vast populated China-India is throwing havoc into western economies who have availed on cheap energy and commodities prices at the expense of natural resources producers.

The power of markets is stronger than the power of conniving, deceitful central bankers -

As the vast populated Asian economies grow - consumer demand grows - putting additional strain on dwindling natural resoruces who have been primarily consumed by a small percentage of the world's population

Natural resouces rich countries such as Canada, Australia, Russia stand to benefit greatly from these seller's markets.

The oil rich Middle East is in the center of continued pre-meditated turmoil designed to obtain oil at prices that benefit their economy. As the world awakens - the tactics become bolder - aggressive - without limits.

It is interesting to note how Japan has swung completely and is supportive of the US $ - Iraq invasion as they're threatened by China's emergence

Will they succeed? The overwhelming consensus is yes - however the West is not united this time around as one faction tries to impose and dominate whilst the other seeks to be an equal partner -
This rift/disagreement causes diminished western economies influence as they compete against one ANOTHER

It remains to be seen as the Orient grows and competes for these natural resources

We follow the Trail on the footsteps of giants -

All Aboard The Gold Bull Express - Part ll

misetichThe Oil Crunch - P. Krugman#1208515/8/04; 07:09:23


Those who expected big economic benefits from the war were, of course, utterly wrong about how things would go in Iraq. But the disastrous occupation is only part of the reason that oil is getting more expensive; the other, which will last even if we somehow find a way out of the quagmire, is the intensifying competition for a limited world oil supply.
Even if things had gone well, however, Iraq couldn't have given us cheap oil for more than a couple of years at most, because the United States and other advanced countries are now competing for oil with the surging economies of Asia.
Since then, however, world demand has grown rapidly: the daily world consumption of oil is 12 million barrels higher than it was a decade ago, roughly equal to the combined production of Saudi Arabia and Iran. It turns out that America's love affair with gas guzzlers, shortsighted as it is, is not the main culprit: the big increases in demand have come from booming developing countries. China, in particular, still consumes only 8 percent of the world's oil — but it accounted for 37 percent of the growth in world oil consumption over the last four years.

The collision between rapidly growing world demand and a limited world supply is the reason why the oil market is so vulnerable to jitters. Maybe we'll get through this bad patch, and oil will fall back toward $30 a barrel. But if that happens, it will be only a temporary respite.

In a way it's ironic. Lately we've been hearing a lot about competition from Chinese manufacturing and Indian call centers. But a different kind of competition — the scramble for oil and other resources — poses a much bigger threat to our prosperity.

The Feds played the "China Card" to raid speculative funds and cool off commodities rising prices

It is interesting to note comments by Dines on "China's boom bust"


"We might go into this in the next TDL, but the collapse of
the China boom having coincided with Vice-President Cheney's recent visit to China arouses no little suspicion in our minds that the April decline was engineered by the government. "

End of snip

What did Cheney give the chinese in return to obtain 'chinese co-operation'in this disinformation campaign?

What assurances do the chinese have that Cheney can deliver whatever he promised since the upcoming presidential election race is close/slugfest?

What is boiling/burning underneath that the Feds are trying to hide?

A cool off of commodities prices favor the chinese as they can acquire needed material at cheaper prices -

So in a sense the Feds have succeeded in cooling off prices and trying to thwart rising price inflation which is showing in the PPI (delay upon delay of truthful prices) -

So what? Funds that have capitalized on rising commodities prices on the back of flooded reinflating accommodative central bankers policies worlwide -

Is this the end or a temporary lull in the commodities bull?

Is real energy/commodities demand slowing? According to natural gas, gasoline, electricity, oil prices DEMAND is going higher not lower

IF US growth is 1/2 as good as the Feds project and the IMF project then consumption will rise worlwide

IF consumption rises then DEMAND - supplies constraints will propel commodities higher and higher propelling PRICE INFLATION through the rooftop

IF consumption vanes in Western economies and the FED needs to increase IR to support the US $ - it will add pressure on the stock market which is highly leveraged to the economy
re: wealth effect

Even in the latter scenario China led Asia will still keep on growing as they essentially produce most of the products consumed by the West - thus energy demand will stay robust

The US military campaign worlwide is also providing a bust to commodities as countries infrastrures are devasted and being rebuilt. Military spending is rising - arms production increasing burning much needed energy

Iraqi resistance - Arab anger - to US forces in the ME will add ANOTHER measure of instability and high probabilities of disruption

Billions are being spend to protect Iraq's oil pipelines for security reasons - yet production is lower than pre-invasion

On a side note - its interesting to note that oil industry and its infrastrure was not damaged during this invasion whilst the rest of Iraq infrastrure was decimated including mosques- directly by hits or subsequent sabotage

Iraq's oil production is the key to lower oil prices and based on continued resistance to US occupation - the latest "pictures/video horror story" is still unfolding adding more fuel to the fire- the likelyhood of Iraq's oil productions levels to significantly impact oil prices is slim and none

Pandora box has been opened - resulting in HIGHER OIL PRICES rather than the counted upon and anticipated drop in prices - hence Sir Greenspan comments that energy prices are here to stay

The other shoe to fall - is China's continuation of its economic growth - energy and commodities demand- which will discredit the present disinformation campaign

All Aboard The Gold Bull Express - Part ll

overtonwords of wisdom from the original goldbug James Dines#1208525/8/04; 07:31:53

"Such declines are always discouraging,
which is why it's difficult to buy near Bottoms, so
please keep in mind Dinesism #42 ( DITER ) in which the very function of declines in a Major bull market is to keep investors out until the Top. "

misetichChina to diversify forex reserves#1208535/8/04; 07:51:18


BEIJING, May 8 (Xinhuanet) -- China is looking to diversify its foreign exchange reserves out of US dollars, according to its top foreign exchange manager.

China's chief forex regulator, Guo Shuqing, said in a recent Financial Times interview the make-up of the country's US$440-billion forex cash pile was being altered to include more European and Asian bonds, given concerns over a weaker US dollar.

The mere thought of China offloading some of its vast US Treasury holdings is enough to send shivers down investors' spines, risking a further deterioration in the already-bloated US current account deficit and more dollar weakness.
"Aggregate IMF (International Monetary Fund) data from 2002 showed a clear shift out of dollars into euro- and sterling-denominated instruments. They are doing this on an ongoing basis, and only an abrupt change would have major implications
"It is easy to get carried away with how much they are diversifying. Certainly they are, but we are talking about a very conservative central bank, and they will only be doing it very gradually," said James Malcolm, foreign exchange strategist at JP Morgan in Singapore.
"They have been shifting in this direction for some time," said Mary Davis, currency strategist at CSFB in London
"There is a strong incentive for the central bank to hold some forex reserves in the most liquid currency, as they want to be able to react quickly in the forex markets if necessary," analysts at Goldman Sachs wrote in a research paper earlier this year.

That means Chinese authorities are likely to maintain a large portion of their reserves in the world's most liquid currency, the US dollar.

Very interesting timing of "news release" from Official Sources in China

So what is really going on behind the scenes? Why this announcement in the view of Sir Greenspan, Wall Street "China overheating"?

The US $ has been supported by this massive accumulations in recent years - by Orient central bankers -which cannot go on forever

Do these central bankers continue their $ accumulation inspite of a depreciating US $?

The US $ is being challenged on all fronts - Supporting and friendly allies are being caught in the squeeze of all squeezes

EU has been reducing their US $ reserves
Russia has been divesifying their reserves
OPEC oil prices reflect a depreciting US $

Is Asia Next?

GOLD - PHYSICAL GOLD IS THE ULTIMATE CURRENCY (according to one - Alan Greenspan)

All Aboard The Gold Bull Express - Part ll

goldenboyHot Off the Press from England#1208545/8/04; 08:01:22

(AB) A spokesman for Queen Elizabeth announced today that the queen would be jettisoning the royal crown of England in favour of a model "More in keeping with the times."
The new crown will be fashioned entirely from high value British and American paper currency. The Queen was finding the old model a bit heavy and welcomed the move to the new lightweight crown in sympathy with modern British monetary policy.
The heads of the IMF, BIS, and the Central Banks of the G-7 all lauded the move and called for similar action by monarchs in their respective nations. A Fiat-Wear party for the Crown Heads of Europe has been scheduled for July 4. President Bush and Alan Greenspan have invited, and will, of course be suppliers of the main ingredient for the new head gear.

goldenboyWhoops: the last line in previous post shoud read #1208555/8/04; 08:05:03

"have been invited........"
misetichEnergy: The Big Squeeze #1208565/8/04; 08:27:33


That said, there's little margin for error. Bill Greehey, CEO of Valero Energy Corp. (VLO ), the third-biggest U.S. refiner, says U.S. refineries will be unable to produce all the gas needed this summer, so imports will have to fill the gap. Indeed, imports now satisfy about 9% of U.S. demand, up from about 5% in 1998. But this year foreign refiners have had trouble meeting new U.S. formulation requirements. If problems hit, spot shortages could develop and prices could leap again.

Where is the greatest risk of shortages?
In California, because it is a gasoline "island." The state has to produce about 90% of the gasoline it needs because of its special gas formulation rules. Markets are so tight there that a relatively minor event, the Apr. 27 rupture of a refined-products pipeline in Northern California, triggered a low-level alert. Gasoline supplies in California through Apr. 30 were 9% lower than a year earlier, according to the California Energy Commission. One or two large refinery outages could cause major trouble.

How much damage are the higher energy prices doing to the economy?
The problem is twofold: High energy costs suppress consumer spending on other items, and they increase the rate of inflation. That's an unpleasant combination. David A. Wyss, chief economist at Standard & Poor's (MHP ), estimates that each $10-a-barrel increase in the price of oil subtracts 0.25% from the economy's growth rate. Worldwide, the International Energy Agency recently estimated that economic growth would have been at least half a percentage point higher in the past two or three years if prices had remained at mid-2001 levels -- around $25 a barrel for New York Mercantile Exchange-traded crude. Still, the Federal Reserve remains optimistic that energy prices won't knock the recovery off track.

"Joe Public" is being alerted - High energy prices are here to stay a little longer than planned or anticipated

IF weather temperatures rise in the summertime - higher natural gas and electricity prices will be ANOTHER factor to contend with..adding additional woes

Though rest assured Sir Greenspan will soon make an announcement - carried by the Financial Times - that higher climate cooling will be provided by Bernake's fiat dispensing helicopters - which will cause funds/investors to rush to dump their invesments in energy related commodities investments

...and the toad remained tranquil as the temperature rose...

...wiser ones added Physical Gold to their insurance portfolio - just in case the overflooding of fiat dispensed by Bernacke's helicopters caught fire...

Gold is indistrucable! Gold is money!

All Aboard The Gold Bull Express - Part ll

MKWeekend Bonus!! Adrian van Eck#12085705/08/04; 10:55:22

We a special treat for you this weekend at the News & Views page -- an analysis of current Federal Reserve policy from our long-time favorite Fed watcher, Adrian van Eck.

More recommended weekend reading.

Hope that you are having a relaxing weekend.........

Ag Mountainmisetich, I like some of your news.#12085805/08/04; 11:06:07

I like NONE of your white space. What's the point of it? It's bad manners, like a fart in an elevator. I don't think anyone comes here expecting to exercise their scrolling muscle.
WaveriderMisetich#12085905/08/04; 11:45:41

I know when posting that the white space may show up unknowingly becaue it has to do with where the cursor markers are - most times I don't know where they are because they're illegible (except in Word) to the naked eye. If I may kindly suggest Sir - after you've completed your post but before submitting your message, place your cursor just after the last letter at the end of your post, and then press the "delete" button for a few seconds - you will delete any unwanted white space. Cheers, and thanks for your contributions here.

Clint H(No Subject)#12086005/08/04; 11:47:24

Ag Mountain (05/08/04; 11:06:07MT - msg#: 120858)
I'll second that.

GoldiloxWhite space#12086105/08/04; 11:48:37

@ misetech

One commendation on your white space.

You finally found something AgMountain and I can agree on! LOL

My scrolling muscles find them unpopular, as well.

GoldiloxThe Oil Factor - Stephen Leeb#12086205/08/04; 11:55:29

Today's FSN second hour is a really pointed analysis of oil supply and demand issues and their relationship to overall health of the economy.

One of Puplava's best guests IMHO. Check it out.

USAGOLD / Centennial Precious Metals, Inc.Mining the coin market for additional opportunities in gold...#12086305/08/04; 12:19:55

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)

a nation of oneOle Man (5/7/04; 23:34:54MT - msg#: 120846#12086405/08/04; 12:41:32

From your post, "Evil, what it is"

"And God saw that the wickedness of man was great in the
earth, and that every imagination of the thoughts of his
heart was only evil continually."

Of course that's from the Bible. And if you want to
believe it, go ahead.

But when that was written, the God of the Ancient Hebrews had not yet learned about me.

Old YellerGasoline#1208655/8/04; 14:50:49

The most shocking aspect of this situation,IMO,is that 50% of all gasoline produced is burnt in the US,fueling an economy that really isn't producing much of anything other
than "services" and storytelling.

Mr.Market will correct that imbalance,if he's allowed to,by the protectors of "free" markets.However'since those protectors of free markets are also protectors of the American "right" to a free lunch at the expense of the ROW,this unpleasant reality may take a while to surface.

Inevitably,he'll just move those protectors out the way,forcefully.They will fight back,they deserve to lose on ethical,moral and economic grounds.They will use any means necessary to forestall this fate,including using more killing,coercion,fraud, military occupations and the T-factor .

It's just the American way,or is it?

Hopefully,the people of America will say no,I really don't expect it though.

TopazOil takes up the running?#1208665/8/04; 15:52:50

This comparason chart seems to be indicating a shift from a front-running Dollar, (Oil moves lagging DX by days) to an Oil leading situation.

A good comparitor going forward will be the DX/Oil futures situation. DX (in contango) and Oil (in B'ation)... if Oil "IS" leading (as above) and, given the tight correllation that exists, (DX/OIL) a move to B'ation in DX futures could be expected.

Game Over!

GoldiloxB'atain and contango#1208675/8/04; 16:19:41

@ Topaz:

These words are new to me. Can you re-explain what you mean?

TownCrierG'lox#1208685/8/04; 16:31:00

As I have used ' = oldi, you might try translating Topaz like this:

' = ackward


TownCrierBTW...#1208695/8/04; 16:36:34

Contago is essentially the opposite of that. That is, somebody is willing to pay a premium to receive a future delivery and not to hold whatever it is today.


Topaz@G-lox.#1208705/8/04; 16:46:16

The normal market situation in an inflationary environment is in "contango" ie: the price of an item will be more expensive in the future. Backwardation is the reverse ie: an item will cost LESS in the future.

Oil backwardation has, in the past been regarded as an indication of oversupply (a demand driven phenomenon) and has usually preceded a drop in price. I feel these current Oil/DX markets (cronic "B" in Oil futures) are supplier driven BUT Dollar denominated ie: Your Dec04 Oil is NETT the same price as your Jun04 Oil. If we witness a move to "leading" Oil in the DX/Oil equation we are effectively moving from a Dollar denominated Oil price to an Oil denominated Dollar price ... a subtle change with profound consequences imvho g-lox.

goldquest@Old Yeller Ref: #120865#1208715/8/04; 16:48:45

No it isn't the American way. You are linking the run amok politicians, corporations and bankers with the hard working Americans that have always provided the money and blood to maintain the America, that so many of us cherish.
I don't think that the average American has ever expected a "free lunch." I have had ancestors and relatives that have fought and died in every major conflict, that the U S has been involved in, starting with the Revolutionary War. One died at the battle of Kings Mountain, the turning point of the American Revolution.
My turn came as a combat veteran of the unpopular Vietnam War.
About the next time that the situation warrants that the U.S Supreme Court is the deciding factor again, as to who will occupy the White House, is the time you will see that the American people have had enough of the trashing of the constitution. IMHO, the second American Revolution is not that far off. If you are an American, I sincerely hope that you have enough faith in what the real America stands for, to stay the course. If you are not an American, please don't let a few power hungry misfits sway your feelings toward millions of honest, hardworking Americans that want the same thing for themselves and their families, as other honest and hardworking people in the other parts of world want. Best wishes, goldquest

TownCrierWho dares to hold bonds during a nascent recovery risks today's principal against yesterday's inadequate yields#1208725/8/04; 17:12:17

HEADLINE: U.S. 10-Year Treasury Has Longest Slide Since 1994

May 8 (Bloomberg) -- The 10-year U.S. Treasury note fell for a seventh straight week, its longest losing streak since 1994...

Investors [selling bonds] pushed the note's yield to its highest since July 2002 amid growing expectations the Fed will raise its target for the overnight lending rate between banks at its next meeting on June 30 to keep a growing economy from causing faster inflation. Inflation erodes the value of fixed-income payments.

``You're going to see selling on any kind of market rally'' in coming days, said Thomas Connor, head of interest-rate swap, Treasury and agency trading at J.P. Morgan Securities in New York.

Since mid-March, the yield on the 10-year note, which is a benchmark for consumer and corporate borrowing rates, has soared from 3.65 percent. An index of Treasuries due in 10 years or more has returned a negative 4.73 percent the past month, including reinvested interest, the worst of 154 indexes tracked by the European Federation of Financial Analysts Societies.

An investor who bought $10 million face amount of 10-year notes at the year's low yield would have lost about $896,900.

The rise in yields comes as the government is preparing for its quarterly sales of three-, five- and 10-year notes next week. The Treasury will auction $24 billion of three-year notes on Tuesday, $15 billion of five-year notes on Wednesday and $15 billion of 10-year notes on Thursday.

In the most recent quarterly 10-year note sale on Feb. 12, the Treasury sold $16 billion of notes with a fixed interest rate of 4 percent that will cost the government $6.4 billion in interest over the life of the notes. If next week's smaller auction were held today, it would cost the government $7.13 billion in interest, because of the rise in yields.

--------(see url for full text)------

As great as bonds might be during the bull period where prices are rising and therefore today's yields are larger than tomorrow's, they are the opposite of that, giving you a doubly-bad whammy when the turn comes. Investors looking to sell have a hard time finding willing buyers because the sidelined buyers expect they can get them at lower prices and higher yields if they simply wait it out.

So the question for those people becomes one of where to invest their money in the meanwhile. That's where they must weight the relative attractiveness and value-opportunities in and among equities (stocks) and tangibles (gold).

In that vein, it becomes helpful to look at the big picture, to see if anything special is brewing on the horizon that might tip the scale in favor of one over the other. Arguably, a retooling of the international monetary system's supporting framework away from dominantly national reserves (U.S. dollar), to something decidedly less national, potentially gives gold an epic advantage of historic proportions.

We can only cast about guesses for the timing of the ribbon-cutting, but on such a day, you will either have your gold (and your outsized rewards), or you will have no gold (and equally outsized regrets).

To be sure, "The possession of gold has ruined fewer men than the lack of it." --T.B.A.


GoldiloxThe American Way#1208735/8/04; 17:32:29

@ Old Yeller, goldquest

I agree that this is NOT the American Way, but with the advent of the NSA in 1948 removing "security" concerns from Congressional oversight, post WWII operations have been run as covertly as possible. The unfortunate evolution of this is bifurcation of public and private motives and execution.

The Viet-Nam debaucle collapsed when the media control was lost and many Americans saw the need to rein in the obvious cross-purpose dealings. When Ollie North was indicted for lying to Congress about "drugs for arms" deals out of the White House, his pardon closed the investigations into MidEast and South American covet policies. This is right when Saddam was "parading around" on camera with Rummy.

Foreign policy has devolved further from lack of oversight and lack of checks and balances ever since, prompting one German cabinet official to opine that they had seen those tactics once before.

"Wag the Dog" was not a novel idea. It was the details which came from the imagination of the film makers.

If manipulation works so well to maintain foreign policy support, why not adapt it to market manipulations and give the PPT a full time job? The ENRON billions and other "lost" funds have disappeared to the Caribbean banks and are quite active in Bond market action, as suggested to AG by one lone Senator in the March testimony. The PPT have way deeper funding than what's "on the books".

Unfortunately, as we are witnessing, "social engineering" involves too many variables to be pulled off without any glitches.

The tapestry of Pax Americana is unraveling. What's next - got gold?

P.S. Thanks Topaz and Randy for the further explanation of contango and backassward'ation. (:^)

a nation of one(No Subject)#1208745/8/04; 18:01:07

I don't mean to be critical of persons, but, at the link,
several days ago the price objective was 516. Now it's
320. If 320 is correct, 516 cannot have been correct. If
516 is still correct, 320 can't be correct. So, which is
correct..., neither. When I was looking into these point
and figure charts and learning to make my own, and
learning about how to figure the price objective, it
seemed to me made up mostly of snake oil, or witchcraft.
It didn't seem to be based on anything predictable. I like
the point and figure chart idea, but there are some things
it can't do. I think price objective is one of them. Now.
Watch it go down to 320. And then up to 516.

NedMisetich#1208755/8/04; 18:55:58

Since the evolution of "..the GOLD BULL EXPRESS - Part I" to " the GOLD BULL EXPRESS - Part II" you have become this forum's # 1 poster IMVHO.
Ole Mana nation of one @whomeverUR#1208765/8/04; 22:51:59

if you do not believe in the "God of the Ancient Hebrews," what do U believe?
if you lack the faith to believe in Bible Doctrine, we obviously have no basis of dialgue.
on the other hand, if U know
tell me, when and how,, was "it written."
what exactly is the language of God (of the Old and New Testament?
who is Jesus?
what is the significance of His Word?
on another topic, yes gold will move up from the next base.
that low will be higher than the last low.

bugs.....#1208775/9/04; 00:44:54

All this religious #@#$ ... in jest or not... not good for the Forum.

Gold is good.

GoldiloxHarry Shultz' view#1208785/9/04; 03:28:57

"Gold is NOT a religion" -Harry

We had DanDruff proselytizing here about a year ago, and boy, it gets old fast!

There are lots of well educated folks here who have read the various versions of Christian Bible, Torah, Koran, and various Asian works. We are quite capable of fomenting our own opinions on such topics without soapbox evangelism.

One who posts "If you do not believe what I believe, we have no basis for further discussion" should consider heeding his own advice.

Let's talk about gold and judiciously apply analysis of current events and financial trends to the topic at hand.

Topaz@TownCrier (5/8/04; 17:12:17MT - msg#: 120872)#1208795/9/04; 03:29:20

Hey Randy ... a similar vein, did you catch Rick Santelli on CNBC Friday arvo? Just before the cross Maria was talking to an "expert" about Bond yields. He (the ex) was predicting a 5% yield on the 10Yr by years end ... they then crossed to Rick who, grinning widely, said the way things were going we'd see 5% by the end of next week!!

I think Rick does a great job, but in this case reckon he's a tad optimistic ;-)

GoldiloxThe looming oil crisis will dwarf 1973#1208805/9/04; 03:38:57{8A89E36B-0E79-44B0-A790-DFFCDBE4BA21}


"HEALDSBURG, Calif. (CBS.MW) -- As the price of crude oil keeps rising toward $40 a barrel and beyond, it has become increasingly clear that the world is heading toward a major oil crisis -- in terms of both price and supply -- that will dwarf that of 1973.

For many of us who have been observers of global energy trends for what now amounts to decades, this has become not a matter of "if" but rather one of "when." We are facing a convergence of three forces that will have a potentially explosive effect on the market for crude oil.

They are:

1. A growing geopolitical crisis in the Middle East, which is now threatening to spread beyond Iraq to Saudi Arabia, the world's largest producer and exporter of crude oil.

2. A surge in global demand for energy and particularly crude oil and its derivatives, fueled by the recovery of both the American and Japanese economies and the unprecedented growth of China, which has just replaced Japan as the world's second largest consumer of crude oil.

3. A structural deterioration of the world's oil supply. What is involved here is nothing short of an imminent peaking out of production of crude oil on a global basis -- known by energy industry insiders as "Hubbert's Peak" -- which would turn a cyclical supply/demand crisis into a structural energy crisis of unprecedented proportions."


LOTs more warnings on oil supply issues in the mainstream press of late. The article goes on to discuss the potential for interruption if the Saudi Kingdom experiences increasing unrest.

misetichFed Warns of Fannie, Freddie Risks#1208815/9/04; 08:11:29;jsessionid=NUTIXC1WTKVSWCRBAE0CFEY?type=businessNews&storyID=5081051


Fed Board of Governors economist Wayne Passmore said on Friday Fannie Mae's and Freddie Mac's congressional charters -- which grant them several advantages, including the ability to tap the Treasury for $2.25 billion each in an emergency -- is worth billions to the companies because of the erroneous perception of government backing it fosters among investors
But Passmore's study, and one by Atlanta Fed economist Scott Frame saying the enterprises may engage in riskier behavior as they seek to sustain their growth rates, add to a chorus of central bank warnings about Fannie Mae and Freddie Mac
Poole called on Thursday for repeal of Fannie Mae's and Freddie Mac's Treasury lines of credit to send a signal to investors that the government does not guarantee GSE debt.
Treasury Secretary John Snow told the same conference that while no there is no immediate risk to the financial system from the companies, they should be supervised more rigorously
A week does not pass by without a Fed governor sounding the "lookout alarm" - How can Treasurer Snow, KNOW if there's a risk to the financial system -
GSE's an accident ready to happen

All Aboard The Gold Bull Express - Part ll

(thanks for the tip on the whiteouts)

CometoseMisetch#1208825/9/04; 09:45:24

I like your whiteouts as well as your pointed and frequent commentary that keeps us appraised on so many facets of economic fishnet that surrounds us . Thank you for both.
GoldiloxSnow know#1208835/9/04; 09:56:26

@ misetech

It's difficult to ascertain what Snow "knows", as his public responses have all been highly scripted. He functions in "yes man" administration according to O'Neill.

This says nothing about his ability to understand, but publicly, his hands are obviously tied quite tightly.

Chris PowellAn exchange between GATA and Pan American CEO Ross Beaty ...#1208845/9/04; 10:20:06

... over manipulation in the silver market.

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.

GoldiloxIllusions - Puplava#1208855/9/04; 10:35:13


Inflationary Expectations Rise

I return once again to the issue of inflation. If a central bank prints sufficient quantities of paper, then deflation in the domestic economy can be avoided—but at a cost. That cost is either the depreciation of the currency against other less inflated currencies or depreciation against gold, silver, oil, commodities and other hard assets. That is what we have seen over the last few years in the price of gold, oil, and commodities in general.

What we have experienced over the last decade in the financial markets is continuous asset inflation from stocks and bonds to real estate. When investors pay 68 times earnings for NASDAQ stocks or are willing to accept negative interest rates in the bond and money markets, this is evidence of asset inflation. As long as assets keep rising, everybody is happy and the system holds together. This is another reason why the natural proclivity of politicians is to inflate. Nobody likes deflation.

For most of the last two decades, the inflation rate has been moderate. However, recently, inflation rates have begun to soar and spill over on to Main Street. The butcher, the baker, and the gasoline maker are all demanding and getting higher prices for their services and goods. Food prices are up as is gas at the pumps. Airline tickets are up, trucking companies are adding surcharges to their bills, household furnishings, cars, and apparel to cab fares have all moved higher. While analysts, anchors, economists, central bankers and politicians speak of moderate inflation rates, the Average Joe knows better.


This entire article is well written. My choice for which section to post changed twice as I read deeper into it. JP is hitting on all cylinders lately.

misetichCredit Bubble Bulletin, by Doug Noland#1208865/9/04; 11:07:36


Moreover, I do not at this point expect a major reversal in sentiment that would see a return to King Dollar speculative flows into dollar financial assets. Yes, the dollar is today gaining some lost ground as various bets are unwound. But this is a much different dynamic than the previous flight to play (Fed-induced) inflating U.S. financial asset prices. The prospects for enduring U.S. asset inflation are, these days, especially poor. Yet until our Credit system eventually buckles, unrelenting government and mortgage finance excess may very well finance ongoing massive current account deficits. This will work to support global system liquidity – offsetting liquidity lost with deleveraging. And while rates have risen meaningfully, they are not at this point sufficiently onerous to significantly restrain the U.S. mortgage finance Bubble or Asian growth. But it is reasonable to presume that these two respective historic Bubbles are in the process of experiencing their best days.
A recent consumer poll indicated - low wage earners are said to increase their debt load. The odds are they're borrowing from paul to pay peter
IEA warned of an oil shock if oil prices remain at this current levels for the next few months

Shortly we'll find out whether the "massive jobs created" in March & April - BLS reports are for real or phantom of the "software model"- in the form of increased consumer spending and higher tax inflows to the US Treasury

The odds are higher price inflation will overwhelm consumer spending and the Feds will remain in an "accomodative stance"

OIL prices - Job Creation hold the key to Asset Deflation and a bust of the debt bubble

All Aboard The Gold Bull Express - Part ll

misetichHikes in costs of materials hitting like a ton of bricks#1208875/9/04; 11:32:08,1,1226784.story?coll=la-headlines-business


First the run-up in gasoline and milk prices. Now lumber and steel.

Homeowners planning to add a second story or a deck or, heaven forbid, build a new house are in for some serious sticker shock, experts say, as soaring prices of construction materials — from plywood to plumbing products — force contractors to raise prices along with the roofs.

Record demand for construction supplies amid shortages is creating a pricing nightmare, just as home building approaches peak season.

The price of framing lumber is up 58% from a year ago. Oriented strand board — the plywood substitute used for walls, floors and roofs — costs 158% more than a year ago, according to Random Lengths, a market- and price-reporting service that tracks lumber prices.

Steel scrap prices are up 100% from last year, making steel studs, reinforcing bar, nails and other products more expensive, according to the National Assn. of Home Builders.

In California, the steep price increases could add about $8,000 to the cost of building a 2,100-square-foot house, said Michael Carliner, economist for the builders' trade group.
"I've never seen anything like this," said Jeff Birch, a Dana Point builder in business for 27 years. "I looked at plywood two to three months ago and it was $10 a sheet; now it's $20."
La Ca--ada Flintridge contractor Bob Rhody, reacting to the high cost of raw building materials, raised his price $2 a square foot to $91 per square foot in January, when prices started climbing, and will raise them again this month for new contracts, allowing him a small cushion against price increases. A decade ago he charged $60 a square foot

Price infaltion is soaring - little wonder the PPI was delayed through a "glitch"

Price increases are occurring in base materials - job creation in these industries are insignificant -

All Aboard The Gold Bull Express - Part ll

GoldiloxA MOVIE! Get the popcorn and REAL player#1208885/9/04; 11:40:06

An interview with oil analyst Michael Simmons in DC on 4/27/04. Conducted by Julian Darley.

Simmons discusses his concerns with Suadi Arabia's lack of transparency in reserves reporting, especially noting that Shell's recent scandal increases suspicions throughout the industry.

#5 on the articl list over at Joe's Diner.

#7 is Simmons slide presentation referenced in the interview.

USAGOLD / Centennial Precious Metals, Inc.Peace of mind, 24/seven... hard assets, easy access!#1208895/9/04; 15:50:53">gold -- a global calling card
TownCrierGoldilox/Puplava -- msg# 120885#1208905/9/04; 18:44:10

"...My choice for which section to post changed twice as I read deeper into it...."

Although I haven't visited your link, I'm willing to go out on a limb and agree that you selected the best excerpt.

The threat of deflation can be fought with the sacrifice of the national monetary integrity -- a drive toward higher prices though increasingly indiscriminate debt monetization and its concomitant depreciation. Market prices tend not to fall if the currency is made to always be easier to get and similarly valued less and less.

The price of gold is often suggested to be the most important indicator of the relative level of inflationary tendencies in the economy. I would suggest, however, that the price of a gallon of gasoline is more important -- simply because it is so much in the public eye (more so than a barrel of oil from which it is refined) because nearly everyone buys gasoline a couple times a week and its price is posted on gas station signs, highly visible in every town of the nation.

For everyone who maturely lived through the 1970's, the rising price of gasoline for their cars surely left an indelible association between that and the depreciation of the currency; inflation in general. And the more economically aware of those Average Joes will also likely associate those events with the remarkable run up of the price of gold to the $800 level.

I would therefore tend to think that if "TPTB", such as may be, wanted to manipulate the public's inflationary expectations, they would do it through whatever means would be required to affect the price of a gallon of gasoline as the bottom line.

And to chase that threat to its knotted end, we know that the cheapness of gas can only come from the cheapness of oil, which in turn depends on both the ability and willingness of the oil suppliers to provide it at any given price to the market. And if, for example, the 'willingness' part of that equation can be lubricated through guarantees of access to moderately-priced gold to the price-setting swing producers of oil, then there you have your chain explaining why there would exist among the dollar's controlling monetary authorities an incentive to engender an obfuscation of the value of our very scarce gold among the many potential customers for this most precious, cheap-gasoline-assuring resource.

That is to say, these potentially competing gold investors -- the ones who don't provide us with cheap oil/gasoline -- are to be kept disinterested in gold through an unattractive investment environment of ugly price performance -- low and lower prices brought about by the appearance of ample (pseudo)gold via the system of bullion banking and gold derivatives. This helps ensure that the limited supply of physical gold will go primarily to only those important few (selling cheap oil) who truly want the physical gold for longer-term reasons that transcend the illusion of today's price.

Through our efforts here, hopefully a growing number of you visitors are joining in that most prudent acquisition of physical gold for all the RIGHT reasons. Because, as a good friend said to me in the past week, if people don't have a correct understanding of money, they may seemingly do the right and necessary thing at this moment, but they are doomed to die a thousand deaths of financial missteps down the road when it will matter most.

For more background and details, we can turn again and again to the Gold Trail.


a nation of oneto bugs#1208915/9/04; 18:46:58

You're right. I don't come here to read about religion either. And even my own reflections on current political goings-on haven't really contributed anything worthwhile, at least on the face of it. So I'll stop. Here is a point of view relative to gold.

We might be wrong about a housing bubble. If materials cost more, houses will cost more. And materials <are> going up. Maybe these prices aren't too high, but maybe the dollars that it costs to buy them are simply very low. If Kerry gets elected, I look for public euphoria to lift the dollar. That seemed to happen last week. It might cause housing prices to stumble. But the dollar is not strong fundamentally. And inflation is coming on. With gasoline up, and not likely to come down, everything is changing. Gold is one real choice that people will have. Whether they will know it or not, and when, are two other matters. But many will recognize it. And these will be enough to move the price. What matters most, in my opinion, however, is that big cities are obsolete. What terrorist would be likely to blow up a bar in Biloxi, Mississippi, or a Cafe in Missouri City, Missouri? But in just a few minutes, by doing something horrible in New York, Los Angeles, Chicago, Atlanta, Dallas, Houston, Boston, Philadelphia, or San Francisco, they could bring the whole nation to its knees, psychologically, morally, and emotionally. The only difference is, and it's an important difference, the people in the bar in Biloxi, and in the cafe in Missouri City, would simply watch, though quite traumatized, and then go home and go to sleep as usual, thanking their lucky stars they don't live in those other places. I've moved out of Houston for this very reason. It doesn't make sense to live in a nation's energy capital during a war. My house is still there, but I'm not. I can get another house. But it would be hard to replace me. Other people might start realizing this too. It might affect housing costs in unanticipated ways.

Elwoodmisetich (5/9/04; 11:32:08MT - msg#: 120887)#1208925/9/04; 18:57:04

Lumber and are we going to blame those on the Chinese?
Dollar Bill.,.#1208935/9/04; 19:27:51

a nation of one, your post 120840 didnt seem off topic to me. Ole man, I would choose another qoute from the bible if I wanted to make a comment about evil. My favorite is...."the devil knows not for whom he works". I cant imagine god being surprised by the evil us humans struggle with. It is his design that we have this struggle, and no one can escape. No matter how good you try to be, you are still subject to troubles and personal flaws. Actually, that is a really good thing. Otherwise, some joe blow, here on the forum or anywhere in your life could lord it over us going "hey, I got it together, you slackers should try harder, or be as smart as me or ....."
That would be intolerable. All those eastern guys that claim to have gotten to this or that "spiritual attainment"
would have a shot at actually fooling us. Luckily, "evil", in its more everyday forms, makes sure none of us become god. None of us can avoid making the occasional flawed post!

Cavan ManElwood#1208945/9/04; 19:45:18

Corrugated box prices have risen 9%. There is Another price increase coming shortly. All paper grades are moving.
Cavan ManIRAQ DEBT (a three fer?)#1208955/9/04; 19:47:07


With troop commitments growing, the cost of the war in Iraq could top $150 billion through the next fiscal year — as much as three times what the White House had originally estimated. And, according to congressional researchers and outside budget experts, the war and continuing occupation could total $300 billion over the next decade, making this one of the costliest military campaigns in modern times.

As a measure of the Bush administration's priorities in the war on terrorism, it has spent about $3 in Iraq for every $1 committed to homeland security, experts say.

That divide may be growing.

The Pentagon says its monthly costs for Operation Iraqi Freedom shot up from $2.7 billion in November to nearly $7 billion in January, the last month for which ithas provided figures. Since then, the number of troops has jumped by 20,000 to 135,000, and the bloody insurgency has grown.

Defense officials initially said the troop increases were temporary, but last week they changed course and said they planned to maintain the higher levels through 2005, along with increased numbers of tanks and other heavy military equipment. The tempo of military operations has increased sharply in response to a wave of lethal attacks, suggesting the costs still may be climbing.

Both Democratic and Republican lawmakers have started to express deep concern over the costs and the way in which the Bush administration is choosing to cover them.

MKA Nation of One. . .#1208965/9/04; 19:53:20

The inflationary tide raises all boats. . . .

(American boats)

(Chinese boats)

(European boats)

(Even. . . .Japanese boats)

. . . . .and the cost of the wood used to build them.

I heard today that mortgage rates jumped .75% end of week. Let's not forget that boat either.

International John Lawism -- the epicycle of our time.

Gold shall prevail.

Bill Murphy had an interesting quote from Alan Greenspan tonight in his report:

"We have statutorily gone onto a fiat money standard and as a consequence of that, it is inevitable that the authority which is the producer of the money supply will have inordinate power."

-- Alan Greenspan, House Financial Services Committee, February 11, 2004

I will add perhaps what Mr. Greenspan might have were he not the chairman of the Fed:

Such power in the history of money has been fleeting, and almost always the progenitor of economic disaster. As Duncan points out, we've never been in this place before, and we do not know or understand the potential outcomes. That alone is a powerful argument for hedging with gold - the one asset detached from the madness.

Investment analyst, Hugh Hendry:

"What's happening today happened 300 years ago in the French economy when John Law, another Scotsman, was allowed to launch the first government-sanctioned bank, which replaced coins with paper money. Commerce boomed. Politicians recognized this correlation between issuing more money and people liking you. They issued more and more money, but it was a false promise. Nothing intrinsically was being added to the economy except promises, which could never be redeemed. Selling by speculators caused the stock market to correct. The correction encouraged the authorities to print more funny money. Ultimately, the continued pumping of liquidity destroyed the economy, the stock market and France's currency."

And John Law was stopped at the French border with a wagon full of gold and silver coins.

GoldiloxAll boats#1208975/9/04; 20:27:42

Let us not forget how the milk prices have affected ice cream boats!

$5.00 banana splits are here! Ouch!

BelgianRising prices.....#1208985/9/04; 20:30:20

Almost 25 years ago, Gold was priced more than double its today figure. The financial and monetary communities, live happily and very complacent in their almost perfect, non-Gold, fata morgana.
Very complacent,... because none of the projected catastrophies (by goldphiles), during the past 5 years, have been materialized, so far. One should be complacent for much less achievements, than what has been engineered in the past decade.

But, as time goes by,...and more prices are going to reflect what currencies are worth,...that "old" question ...WHY DOES GOLD REMAINS SO INCREDIBLY CHEAP FOR THAT LONG...will come back, again and again ! Those same repetitive, nonsense answers will not remain satisfactory,...recomforting, anymore. All of a sudden, "they" will get that feeling of,...WE HAVE BEEN FOOLING OURSELVES !

The coming weeks (months), are of some major importance :
What will the $-POO do !? And if the $-POO consolidates above the $40,...will the euro take action and succeed in easing the increasing oil-pain with a higher €-exchange rate against the $ !?
What if the november US-administration decides it's time to put Saudi Arabia (the POO) under pressure !? Watch the mounting pressure on the Putin front (Grozny today).

What if, Gold-flows, lose their intended effect on the cheap oil-flows !? Those that still continue to deny any "relationship", between oil and Gold, are the same ones who try...keep on trying to paint Gold as correctly priced.

Also note that rising IRs means nothing less than that the currency is losing worth (purchasing power) at a higher speed ! That's WHY POG, "must" be increasingly re-paperized as to lower its "signal" function. Watch if oil is going to let it happen, once again.

Druid(No Subject)#1208995/9/04; 20:52:10

Druid: Due to many years of conditioning, the managing of expectations is an extremely difficult task to consider when analyzing our current economic and financial environment. In my opinion, the picture that seems to be coming into focus, at least for me, is that higher priced oil will be sold to the public as a good thing resulting from a soaring economy that's hitting on all cylinders, while owning gold or silver a very bad and "unpatriotic" act.

This will be consistent in taking us down the hyperinflationary road. You see, we can all rally and come together as "Americans" around oil but I don't believe we are quite there yet as it pertains to gold and silver.

Should it become necessary, and it will, the selling, marketing and managing of "perception" here at home concerning any link or association between Euro/Gold/Oil and the concept of "FreeGold" will be a much easier task for the monetary authorities to "frame" and pull off then continue to fool the rest of the world.

Old ingrained expectations can be easily destroyed and replaced with new perceptions.

While the concept of "FreeGold" is in the development and transition stage throughout the world, it will be called everything but that here at home.

GoldendomeShort term interest rates may not move up.#1209005/10/04; 00:34:21

Is there a possibility that the next interest rate move made by the Fed., could be to LOWER interest rates?

I know-- consensus says that market pressure will pull Fed short-term rates upward, kicking and screaming. However, the markets look to be saying that we ARE entering a crash phase…right now! And if so, Treasuries are THE popular safe haven, regardless of how fond you and I may be of Gold and Silver. Speaking of Gold and Silver, I believe the charts show that the metal stocks are in a crash! [Physical isn't doing that hot, obviously, either.] This will spread to other markets-maybe as soon as this week?

The Dow Jones has experienced a terrible two-week downward run, and now approaches it's 200 day moving average on the way down, the transports and financial index, likewise. The bond market has sold off deeply and in a crash may look over-sold and therefore the place to stash cash after a Waterfall event, thereby actually allowing the Fed. to lower short-term rates.

We will turn on the news someday soon with the general stock market down 200 points and heading down—500 points by days end. This inflation is taking its toll on consumers. The market knows it. Soon we will face the deflation of financial assets, as long term interest rates take down the mortgage and re-fi industry, and the higher cost of driving to work and putting food on the table takes every spare dollar left in the pocket. I believe that is what the Gold market is telling us right now! At some point, we will see if we are correct about Gold and/or Silver being the ultimate safe havens for our savings, as the market eventually questions the safety and integrity of the Unites States Government. ---Gdome

Belgian@Druid#1209015/10/04; 00:44:09

During the past decade, a lot of Gold has been reshuffled and has "landed" in the "right" hands !!! These, relatively new Gold-hands are the ones that accumulated for nothing else, but FreeGold.
Simply add up, again, all the Gold-management-tricks, we have been witnessing. All these efforts, together, do evidence the extreme importance of Gold and NOT the opposite.
"Important" for those who are pro-contra, Freegold..."Insignificant" (boring) for the general public (goldbugs).

See (analyse) how the coming rises in IRs are being sold to the financial public. The public happily and ignorantly swallows all tricks that go with the "permanent" depreciation of currency-confetti. Depreciation and not devaluation, simply because the currency has NO VALUE !

The Gold-accumulators, know and see that price-inflation, always reflects the extend of past currency depreciation and at the same time know and see how Gold's price, arrogantly goes the other way ! One can obtain cheaper and cheaper Gold, whilst everything else is already carrying its coming, evolving (hyper)pricerise. One should adore this manifest-blatant, upside down situation. Just accept that only an absolute minority is doing so (adoring).

What is happening, today...can only mean ONE thing : THE WORLD'S DOLLAR IS WORTHLESS ! As shocking as it is.

misetichUPDATE - U.S. presses China on currency reform#1209035/10/04; 04:26:39


BEIJING, May 10 (Reuters) - U.S. Treasury Under-Secretary John Taylor pressed China on Monday to adopt a more flexible currency regime to cool its overheating economy.
"We stressed that flexibility of the exchange rate was an important policy to have in place to prevent the overheating and to prevent inflationary pressures," Taylor said.
In response to questions, Taylor said Chinese officials pledged they would alter their current policy of pegging the yuan to the dollar but gave no timetable for doing so.

"They've always said that there's going to be movement on the exchange rate and that was repeated today," he said. "There's never been a specification of the time and even if I knew the time I couldn't talk to you about the time, it wouldn't be helpful to the markets at all."
"There's an economy-wide overheating...but there's also some more in some sectors than others," Taylor said. "There's some bottleneck possibilities in steel, in electricity and in transportation
"If anything, economics says the opposite," he said. "To stop an overheating economy or stop inflationary pressures, you need to have some monetary action.

"It's true of every country and part of that action means somewhat higher interest rates and somewhat higher interest rates means pressure on the currency (because it) makes the yuan more attractive, so if anything the overheating is another reason to move toward greater flexibility," Taylor said
"They realize that this is a global matter, this is not a matter simply between the U.S. and China, and this is something that they're looking at very carefully," Speltz said.

Interesting how concerned the US is about "China" and the constant pressure to China to adopt a flexible currency regime -
It is expected that China will do little on that front - additional quote from the article

"China was taking necessary actions to curb bank lending and credit use but said this was not the time to put off currency reforms for fear they might further complicate China's situation"

Mr. Taylor would be well advised if he dedicates his time to resolving the US $ woes as the World Reserve currency has/is being challenged by the Euro who is rapidly gaining market share as 1) ECB lightened up on US $ reserves 2) as Russia diversified their currency reserves 3) as China and Asia are poised to diversify their massive unsustainable accumulattion of depreciating US $

All Aboard The Gold Bull Express - Part ll

Knallgold@Belgian#1209045/10/04; 04:31:18

"Simply add up, again, all the Gold-management-tricks, we have been witnessing"

I just saw Another one springing up...

Goldpaper IS burning might be driven down further,until the first delivery failure gets public (and it will be made public this time!).

misetichNikkei suffers biggest daily loss since 9/11#1209055/10/04; 04:40:32


Japanese stocks on Monday suffered their biggest daily loss since the 9/11 terror attacks as investors took fright at the prospect of a rise in US interest rates
The losses followed a slide in Wall Street stock prices on Friday triggered by an unexpectedly big increase in US employment figures, which raised the likelihood of a rise in federal interest rates to calm inflationary pressures
The campaign of disinformation continues - Full court press is on as "they' spread the gospel of a "sudden job creation"
Students, college kids are having a difficult time in finding summer jobs totally opposite of "the software model job creation"
However, "it is the management of perception" that is being played - and being "drilled in" and being "cashed in" during this "job creation euphoria"

Interesting to note little movement in the US $ index
All Aboard The Gold Bull Express - Part ll

misetichSaudi Arabia Calls for OPEC Supply Rise#1209065/10/04; 05:02:53

DUBAI (Reuters) - Lead OPEC producer Saudi Arabia on Monday called on OPEC to boost its production ceiling by a minimum 1.5 million barrels per day (bpd) to prevent high oil prices from harming global economic growth.
The Saudi oil minister blamed the "unwarranted" fears of supply disruptions for record high oil prices. He said the concern had arisen "at a time when only the kingdom and probably two or three other countries have spare production capacity."

Naimi's Gulf colleagues -- the oil ministers of the United Arab Emirates and Kuwait -- have already said publicly that the group should keep pumping beyond its official limits to stabilize markets.

The influential Saudi oil minister said the cartel must turn up the taps to help meet growing demand from consumers in Asia.

"It is apparent that demand, especially that of Asia, has and will continue to increase in the second half of this year."

"Disruption fears" is a misnoamer it would be more aptly described as DISRUPTION " . Here's ANOTHER snip from Reuter's today's news

"Sabotage Hits Iraq's Southern Oil Exports"
Continued oil supplies disruptions in Iraq is a primary cause of market uncertainty and it doesn't appear it will be resolved anytime soon. The odds are it will intensify.

All Aboard The Gold Bull Express - Part ll

misetichWhere is the "flight to safety- the US?"#1209075/10/04; 06:15:19

An outflow of foreing investments from Asia's markets has been taking place steadily in recent sessions -

Whils the US $ has "rallied" some in recent days - the rise appears weak

During the late 90's a "flight to safety toward US $ investments" was trumpted again and again - yet the US stock markets are not responding - they're following Asia's lead

This onimous trend spells danger for the US $ - since its not responding as it should given these "inflows"

The same pattern can be detected in US stock markets as it did not respond to an avalanche of good news - but started a descend on a symptum of "bad news" re: IR

"Paper gold prices" make it attractive for wise investors to capitalize on these artificial "gold market intervention" and ACCUMULATE PHYSICAL GOLD

All Aboard The Gold Bull Express - Part ll

USAGOLD Daily Market ReportPage Update!#1209085/10/04; 06:23:34">
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.

MKNews & Views #1209095/10/04; 06:30:08


Adrian van Eck on inflation and China
Bloomberg article says gold to rise on inflation

More. . . .

a nation of onere ag#1209105/10/04; 06:45:33

What is it going to take, for the citizens of the U.S. to
finally get fed up with the FED fiddling around with their

misetichSettlement Hits Citigroup in Pre-Trade -would pay $2.65 billion to settle a class-action suit#1209115/10/04; 06:52:42;jsessionid=FE5CMOKNEUUNSCRBAE0CFEY?type=businessNews&storyID=5090711


NEW YORK (Reuters) - Citigroup's (C.N: Quote, Profile, Research) shares eased more than 2 percent on Monday ahead of the open after it said it would pay $2.65 billion to settle a class-action suit.
The lawsuit had been brought by holders of WorldCom securities who alleged that the bank had been a participant in the massive fraud at WorldCom through its dealings with the phone company, now known as MCI.

Whoops! investment banker caught with hand in the cookie jar!

Could be the tip of the iceberg - as investment bankers constant and corrupt practices come to light -

All Aboard The Gold Bull Express - Part ll

misetichCitigroup in $2.65 Billion Settlement- MORE TO COME#1209125/10/04; 06:58:42


Citigroup, which admitted no wrongdoing in the settlement, said it also has increased its reserve for other pending class-action suits against it to $6.7 billion. That figure excludes the WorldCom settlement costs.
More to come!
All Aboard The Gold Bull Express - Part ll

misetichIs a U.S. Bond Crash Coming? #1209135/10/04; 08:12:55


If the bond market continues to play out as in our original discussion from last year, then bonds should continue to fall, with rising interest rates (inverse relationship to bond prices), and a break below the lower red line should at least raise the likelihood of a substantial crash scenario to another notch. Using the analogy of the security warning alerts, this should raise the warning from a yellow to orange status.

Since the Fed has already said that higher rates will eventually come - although no mention of when - we know that a break of the lower red line is inevitable... it is all a simple matter of "when".

CyclePro believes there are a numerous similarities between 1929 and now

The odds are slim - yet are rising - unless Oil prices, gasoline prices, natural gas prices, electrical prices can be brought under control - something major is bound to happen - as Asset Deflation takes hold worlwide - The RISKS are rising

All Aboard The Gold Bull Express - Part ll

Belgian@KnallGold#1209145/10/04; 09:18:45

This morning on CNBC, we had a nice show with two opposants.
A technical chartist, interpreting a dollar runaway-UP and a HSBC no-nonsense analyst putting that dollar-positive interpretation in serious question, using some very strong language.
The flight into dollar cash, a dollar rising exchange rate and the POO knock down, looked rather desperate. Big efforts are organized to get the dollar exch. rate up 10% and POO down 10%. Saudi Arabia was quick to add some "verbal" (!!!) assistance. What a show !

Lot of TA-TI is brought into the picture as to highlight we are very close at some major "breaking" points.
The undertone is become more obvious : hide the dollar weakness through artificial strength. Rising $-IRs are NOT bringing dollar-strength ! On the contrary. Rising IRs are a currency-defensive modus.

The general management of the Big paper-circus is going to become real tuff in the very nearby future. How does one "unwind" properly ...what has been entangled like a Gordian knot !? We watch together with discrete fascination, aren't we Knally.

Socrates964Belgian#1209155/10/04; 09:25:21

What's your guess as to the likelihood of history repeating itself and the ECB raising rates? When's the next meeting?

Surely this is a golden opportunity for the Bank of Japan to unload some of those surplus dollars (probably for euros, and in any case, for anything but yen, of course).

a nation of one...#1209165/10/04; 09:50:06

I'm sure I'm not one of the wise men, but I'd like to
describe my part of the elephant. I'm not blind either.
Not yet anyway. So here goes.

Commodities have formed a head-and-shoulders pattern and
have gapped down. The dollar is forming what could be a
head-and-shoulders pattern, and if the Kerry euphoria is
over, it might head lower. Or not. Other things are
happening besides just these little things that I am
talking about. The DOW is falling right now, and has gone
below 10,000, which, as everybody knows who has watched
their car's odometer turn over 10,000, means absolutely
nothing, except that everybody nonetheless thinks that it
does mean something. To me these ridiculous opinions of
theirs mean that the DOW will go lower. Perhaps much
lower. Pog is breaking eggs all over the place. I will
probably have to send my commodities broker a check to
cover my contracts. I am prepared to hold all the way
down. Since you can't put an omelet back together again,
what we are likely to see is something else besides what
we started out with. In my view this qualifies
as "TURMOIL." Moreso than ever before in my lifetime. And
that's more than just a couple of years. In fact it might
be more than three or four years. Turmoil is a well-known
sign of dramatic change ahead. Now watch nothing happen
because I said this.

Some have said that cash is good right now. And it might
not be bad to buy something of value. Gold comes to mind.
I own some. It's still where I put it, and hasn't changed
value in my estimation.

Great Albino BatBelgian: good phrase!#1209175/10/04; 10:22:17

"We watch together with discrete fascination..." Only to a few is it given to comprehend the magnitude of events which are passing before their very eyes. We are in the process of "gybing", as in sailing. No more downwind. Now, we are going to be beating to windward - up against increasing force of winds - Force 10!- of interest rates. We are gybing! Dangerous manouver!

Nasty weather ahead! "Gentlemen do not sail to windward". Well, gentlemen or not, we cannot get off this boat.

Oh! To have some cash at this moment, gold going for a song. But, principle dictates: do not borrow, not even to buy gold. Cash only!

This opportunity will pass in an instant. Grab the yellow, if you can!


slingshotGreat Day to be a Goldbug#1209185/10/04; 10:27:47

Take a few days off and see what great things happen in the markets.Depending on your point of veiw. Another buying opportunity for both gold and silver. Stock Market taking a beating. Gasolene price at the pumps up and so are the supermarket items. U.S. Dollar steady 91-92 and that keeps gold in a tight range $370-$380. Will China still service our debt and will the Fed raise Interest Rates. ME oil down some from $39 but far from that $15/ barrel. Osama paying in Gold for the heads of state in Iraq and the Dinar to come on line soon in the Arab World.

Great Posts everyone.

Need to have POG to stay down for a few more days.
There, that should get it to move higher. ;0)


Golden EraPull funds from US, Mahathir urges Arabs #1209195/10/04; 10:29:35

The Straits Time on 10 May 2004

KUALA LUMPUR - Malaysia's just-retired prime minister has not lost his taste for cooking up controversial views.

Now Tun Dr Mahathir Mohamad is calling on Arabs and Muslims to withdraw their US-dollar deposits from the United States, and to use oil as a weapon against the world's only superpower.


He said Palestinians and other groups should cease suicide bombings as this method of attack has only brought about world anger and stronger retaliation from Israel in the disputed territories.

In an interview with Mingguan Malaysia, the Sunday edition of the biggest-selling newspaper Utusan Malaysia, Tun Mahathir also charged that President George W. Bush of the US and his challenger John Kerry would not dare to stand up against Israel for fear of losing political ground.

Asked how the Muslim world could gain a more sympathetic ear from the US government, he said: 'We have other means to fight them rather than attacking them blindly, but we didn't want to use them.

'I have spoken about using oil as a weapon. Apart from that, the Arabs keep a lot of money in the US. If we pull out the money, the US can immediately become bankrupt.'

This is believed to be the first time he has suggested Muslims withdraw their funds from the US as a tactic.

'If we use this strategy, I believe it will be more effective than tying a bomb to your body and blowing up people,' said Tun Mahathir, who retired last October after 22 years in office.

His previous suggestion that Islamic oil-producing countries use oil as a bargaining chip had fallen on deaf ears in a divided Arab world.

With Muslims angered by the United States' strong support of Israel and its attack and occupation of Iraq and Afghanistan, Tun Mahathir had angered many by saying suicide bombers had not helped the Palestinian cause as they did not discriminate between killing soldiers and civilians.

In the interview, Tun Mahathir also asked why Muslims should keep billions of their oil money in US dollars, and why global trade should be done only in that currency.

Despite debts amounting to US$4 trillion (S$6.8 trillion), the US remains the richest country in the world due to these deposits, he said.

'Aren't we stupid? The amount is not small as the oil-producing countries keep their petroleum money there,' he said.

He also said he did not think 'Bush or Kerry are brave enough to oppose Israel' in the US presidential election campaign.

Then, repeating what he said during one of his last speeches as premier to the Organisation of Islamic Countries, he said: 'This is why I say that Israel rules the world by proxy.,4386,250146,00.html

GoldiloxComputer expert: E-voting systems flawed#1209205/10/04; 10:34:01


WASHINGTON (AP) -- A computer science expert criticized electronic voting systems planned for the November election as highly vulnerable and flawed, saying on Wednesday a backup paper system is the only short-term solution to avoid another disputed presidential election.

"On a spectrum of terrible to very good, we are sitting at terrible," Aviel D. Rubin, a computer science professor at Johns Hopkins University, told the U.S. Election Assistance Commission. "Not only have the vendors not implemented security safeguards that are possible, they have not even correctly implemented the ones that are easy."

Other experts said electronic voting offers advantages over paper balloting, including increasing access to the blind and people who do not speak English. They contended that backing up electronic systems with paper ballots could be costly.


"Costly" to whom? All stops are being removed to assure TPTB maintain oligarchic control. Populism cannot be allowed to interfere with the extraordinary measures being taken to "fix" this world-wide economic mess.

"Follow the Yellow Brick Road!"
The wizards are working overtime behind their curtain.

Great Albino BatA book for all...#1209215/10/04; 10:35:07

I'd like to recommend "A Short History of Financial Speculation", by J.K. Galbraith.

I think Galbraith still lives - now has a son who also writes about economics, if I'm not mistaken.

This book by Galbraith is short, amusing and wise. Too little of it, it's a thin pocket book.

One of the important points he makes, is that:

a. People who have made a lot of money, think that that indicates they are of superior intelligence, which qualifies them to discuss and judge matters of which they are totally ignorant.

b. People who have made a lot of money, are regarded by those around them, as having superior intelligence. Thus, those who accompany wealthy men, reinforce the belief that these men have in their extraordinary intelligence and ability.

As a consequence, wealthy people are liable to commit the most tremendous blunders as a result of misplaced confidence in themselves.

We are destined to see many a "millionaire" - in micro-Dollars - reduced to penury. Soon.


slingshotGolden Era#1209225/10/04; 10:40:50

If they ever get their act together.

Withdraw their investments in the markets.
Keep the POO high.
Demand Gold in payment for oil.

The West is Toast.

Golden EraSlingshot#1209235/10/04; 10:51:14

The Toaster is already warming up. We now have the Shites and Sunnis thinking alike and fighting as brothers, thanks to Bush. Only Bush's arab royal cronies in Saudi Arabia are standing by him ... but not for too long now.

Mahathir has alot of clout amonst the muslim world despite his stepping down as PM of Malaysia.

misetichAtlanta Fed - Price Inflation is understated#1209245/10/04; 11:14:34,,8210-1104852,00.html


Late last month, the Atlanta Fed — a regional branch of the US central bank — put out a study of recent inflation trends.

It concluded that about two thirds of the drop in core inflation measures between 2001 and 2003 was driven by unusual movements in just two sorts of prices: residential rents and used cars.

In both cases, the price falls appeared to have flowed from the very low level of interest rates and so will almost certainly prove temporary.

The drop in residential rents was triggered by the move from renting to owner-occupation that resulted from repeated falls in mortgage rates.

The fall in used car prices was caused by the surge in demand for new cars, which in turn stemmed from the rash of zero interest finance deals (a direct result of the ultra-low level of Fed rates).

According to the Atlanta Fed, once you accounted for these two categories of price falls: "The recent downturn in the business cycle appears to have had little impact on the path of overall core inflation." In other words, Fed worries about deflation were almost certainly overdone.
The constant manipulative massaging of statistics distorts the realities of the economy and measurement of performance, risks.

In a market economy, the power rests with the market along with goverment policies, and the Federal Reserve. By reporting and publishing false and misleading data, such as the CPI, it undermines the whole financial system as decisions are based on those reports.

The "cover up" of REAL data is demonstated in what former Treasurer O'Neil said $44 TRILLIONS OF DEBT

Decisions are being made daily based on this erroneous data, compounding the problems.

With energy supplies being challenged by world demand - the livewire act may come to an abrupt end

All Aboard The Gold Bull Express - Part ll

USAGOLD / Centennial Precious Metals, Inc.Your friend in the business, helping you enter the gold market with grace and confidence.#1209255/10/04; 11:22:03">Change paper into gold!
misetichInterest rate boost before election - BY ROBERT NOVAK #1209265/10/04; 11:25:32


The Bush administration has been alerted that Chairman Alan Greenspan will guide the Federal Reserve Board to a small interest rate boost before the presidential election, and President Bush is reported to be satisfied.

According to these sources, the central bank this fall will raise the federal funds (interbank lending) rate from the current historic low of 1 percent to 1.25 percent. The Fed is expected to push the rate to 1.5 percent later this year after the election, and up to 2 percent early next year.

Novak seems to be "plugged in" - a few months ago he broke a story which comprimised a CIA agent (case ongoing)

Sir Greenspan has not been officially reconfirmed by Bush - though if he follows through as Novak says then wink'wink Sir Greenspan is set to return for ANOTHER 18 months

All Aboard The Gold Bull Express- Part ll

slingshotGolden Era#1209275/10/04; 11:48:43

In the future, fresh water will be a valuable commodity, if it is already. Unfortunatly the USA has a poor energy plan and relys on CRISIS Management to get anything done and the solution is to throw vasts amount of money at the problem.
In Florida, the population growth has taken its toll on the aquifer and salt water intrusion has been talked about for years. Being a pennisular, water is abundant all it has to do is be desalinated. Atlantic on one side and the Gulf on the other. How many desalination plants in the pipe line? Oil like water is not a problem.
Time has been squandered. Land put off to drilling for oil could have developed and been envio-safe. Same as Desalination plants could take the pressure off the aquifer.
We will pay more in the future for both.
A problem over the horizon. If the government holds true to form,the printing press will roll into the night to pay the inflated price.
Gold to purchase Water?

GoldiloxAbuse "trial"#1209285/10/04; 12:21:36

Notice the reservists about to be tried are all enlisted personnel with NO training in prisoner handling. Who supplied them with their "tools of torture"? None of the 27 civilian intelligence "contractors" are implicated. In fact, the lead defendent is the soldier who took the pictures.

Are they shooting the messenger? Whistleblowers are very unpopular in Washington these days. Caca rolls downhill. Loyalty>honor>truth

CNN just interviewed a recently retired colonel who said the general who conducted detainee interrogation at Gitmo was in Iraq counseling the prison guards just prior to the abuse events. What is his role in all this mess? Is Gitmo sponsoring the same garbage, but just not as publicly?

Look for another whitewash from the masters of the political paint brush. Rumsfeld "made" Saddam and now gets the credit for spending $150B and 600 American lives to remove him. Kissinger gets a "Peace Prize" for his and George the First's covert assassination wars in South America. Spitzer goes after Grasso's $Million pay package and completely ignores the $Billion CRIMEX, even when GATA sends him "irrefutable" evidence. Citibank is paying $2.6B in penalties for it's ENRON participation, as usual, with NO admission of guilt. The PPT now has about $2.5B more ammo, after the courts take their cut.

Gold debasement will continue as long as the lumps "believe" the paper asset stories. AG's words will be "gospel" until the trap is sprung, and then he will fade into lucrative retirement, having done everything "humanly possible" to "spin" the issues.

Come clean? These guys don't know the meaning of the words. They just continue to weave their tales to the media lackeys and wade deeper into the FIAT caca.

The DX is rising on "expectations of interest rate rises". The SM and CRB are getting jack-hammered. Gold sits silently in the wings, having already been heavily suppressed since January.

Follow the Yellow Brick Road! TSHTF as we watch.

Great Albino BatWarning: not on topic, but of some importance:#1209295/10/04; 12:25:23

A Texas friend with good credentials, is proposing the revival of the Parson's Co. plan of some forty years ago, in which were invested 10 years' of research, for a massive public works plan which would employ some 4 million in a project to bring Canadian water which flows into the Arctic, down through all the Mid-West USA and down into Mexico as well.

In the slump which threatens, this would be a vastly prefereable alternative to employing young men and women by drafting them into the military.

A public works of permanent value. That is a project worthy of Presidential attention.

Inflationary? Possibly, but preferable to civil breakdown.



GoldiloxFresh Water#1209305/10/04; 12:33:53

@ Slingshot

Do not think this is being ignored by the corporate world. Recently GE and Tyco have made public statements touting their investment activities in water treatment.

Not only is water necessary for life, itself, but the resurfacing fears about oil reserves are renewing demand for well injection technologies.

See the Michael Simmons report I posted on Saturday. He says that well technology has evolved from three phase to two phase, and ais now employing injection at the outset of production.

Belgian@Socrates#1209315/10/04; 12:40:11

The ECB has already alluded some months ago that €-IRs will be raised at Q4-'04. At that moment, I concluded that ECB and FED are in concert to some extend.
I am always coming back to that little story of the $-€ running together in the desert and both trying to escape from the chasing lion. Both currencies "have" to stay together, because if they split, the lion will take them one by one. That staying together ($-€), is the selective linkage between FED and ECB (policies).

Question is : to what extend is the exchange rate between $ and € important ? Is it only because of the oil-matters !?
I think it is.
And after all, the €-IRs have followed the $-IRs, much further (down) than was opportune. Maybe thanks to oil-support for the euro ?

TownCrierTaking more gold off the table at better prices#1209325/10/04; 12:40:58

HEADLINE: Dubai gold trade up on price, seen rising in June

DUBAI, May 10 (Reuters) - Sliding gold prices have boosted jewellery sales in Dubai, and demand may rise in June...

"Business has been better in May because of prices, and we expect even better sales next month with the shopping festival and sales before holiday trips home," one trader said.

Many expatriates from the Indian subcontinent traditionally buy jewellery and coins to take home on their holiday trips.

Dubai's 10-tola (TT) bar was quoted at between 5,195 dirhams ($1,414) and 5,200 dirhams, down from about 5,880 dirhams in early April. A TT bar is 3.746 ounces of 24-carat gold.

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

On another note, Belgian, I think we're definitely singing from the same page. Our posts yesterday and today have dovetailed very nicely. Thanks for the input. I hope people take the chance to read them this morning, and to visit the Sunday archive


Great Albino BatOf Kings, Gold and Limits...#1209335/10/04; 12:44:11

King Canute, the British king, is derided for having gone to the seashore and forbidden the tide to come in, by royal decree.

His action was misunderstood. He wanted to show his courtiers, that he was NOT almighty, that there were things he could not do, even as King.

Today, most expect Greenspan to do what Canute knew he could not do - control the laws of Nature. There was more wisdom then, in the recognition of limits. We have lost the knowledge that there are limits, and that is fatal.

The whole point of gold, is that it marks limits. We do not have gold in our monetary systems, fundamentally, because humanity rejects limits. Or should I say, "democracy" cannot stand limits - its votes go to those who will ignore limits.

Gold is like the tide. You can build levees, but the sea remains there, rising and falling. You can prevent the tide flooding a PART of the land, but the sea will always have its way elsewhere. The sea will always be there. Like gold, it can be stopped at times, in places. But not everywhere, and not forever.

"Si fractus inlabatur orbis, impavidus ferient ruinae." Horace. "If the universe should collapse upon me, the ruins will find me unshaken."


GoldiloxSo will fundamentals rule or will TA rule?#1209355/10/04; 12:56:22


The dollar has not launched into a bull market and I do not believe it will. That market is simply too big to be manipulated except in the very short term. What the Exchange Stabilization Fund cannot do, cannot be done on a listed US Exchange even by billionaires. Yes, gold is a tiny market but that is a double edged sword which favors the bulls as much as the bears.
This little market, however, is truly global and therefore the ultimate test of fundamentals versus TA.

So the action of gold right here and right now if it can be held under $400 is to define gold as just another casino entity and no longer a currency. I believe gold is a currency and that as soon as the dollar recognizes its true bear condition gold will put $400 behind it on the way to and above $480.

If I am wrong and gold is pure casino, no longer a currency, then I will present conclusions to you concerning what a victory of paper money over gold via TA will mean for the future.

97 Days to go!


Sinclair holds his line!

TownCrierThe trouble with Treasuries and bonds in general during an apparent economic recovery#1209365/10/04; 13:47:20

Saturday I posted, in part,

"As great as bonds might be during the bull period where prices are rising and therefore today's yields are larger than tomorrow's, they are the opposite of that, giving you a doubly-bad whammy when the turn comes. Investors looking to sell have a hard time finding willing buyers because the sidelined buyers expect they can get them at lower prices and having higher yields if they simply wait it out."

And now we have this appetizer of that meal from today's news...

HEADLINE: U.S. Treasuries in lull after frenzied sell-off
NEW YORK, May 10 (Reuters) - U.S. Treasury prices were narrowly mixed on Monday as investors took a breather from the frantic selling that followed the latest upbeat employment figures and left yields at two-year highs.
"The blood bath was very heavy," lamented Mary Anne Hurley, vice-president of fixed-income trading at D.A. Davidson & Co. in Seattle, Wash.

"We shall have the hyperinflation."


TownCrierVery readable closing market rap today#1209375/10/04; 14:13:34 a mixture of excerpts:

Gold futures on the Comex division of the New York Mercantile Exchange bounced back Monday from an early swoop to near seven-month lows of $372 per ounce to end the day just shy of $379 and intraday highs....

June gold settled off 40 cents at $378.70 an ounce, trading up from $371.30, its cheapest since Oct. 17.

misetichGlobal: Global Wild Cards - S. Roach#1209385/10/04; 14:55:08


There can be no mistaking the powerful upturn in the global business cycle that began in mid-2003. The key question all along has been one of sustainability. In retrospect, the old policy multipliers worked after all — certainly better than I gave them credit for. But, then again, the Authorities injected a stimulus the likes of which of the modern-day world economy had never seen. Alas, now it's payback time. For a still unbalanced global economy, that payback could be especially severe. Put oil, China, and the Fed into the equation — all deflationary forces — and the endgame starts to look downright treacherous. The rapidly escalating undercurrent of geopolitical angst only compounds the problem. All that leads me to conclude that this confluence of global wild cards could make the current rebound in the global economy one of the shortest on record.

"Put oil, China, and the Fed into the equation — all deflationary forces — and the endgame starts to look downright treacherous"

Which way out? Odds favor the Feds to be a "little more supportive of higher inflation"

All Aboard The Gold Bull Express - Part ll

TownCrierODJ FOCUS: Gold Producers Return To Hedging On Weak Prices Unlikely#1209395/10/04; 14:57:23


London, May 10 (OsterDowJones) - Current gold price weakness and the
prospects of U.S. interest rate increases this year are not yet sufficient to
convince major gold producers to return to hedging, according to market

Major gold producers continue to be bullish on gold, and would rather take
opportunity from possible price gains than to sell forward their output, as
they see current gold price weakness and the dollar rebound against major
currencies as temporary, they said.

"There is a short-term pressure on gold prices but we still think the
longer-term fundamentals are very supportive," Canadian gold producer Placer
Dome's spokesman Greg Martin told OsterDowJones, citing the U.S. deficits,
strong demand for gold, and geopolitical concerns that normally boost safe-
haven buying in gold.

Net speculative long positions on Comex gold futures at 54,663 lots as of May
4 were the lowest since August 2003, and 62% lower from a peak of 144,253 lots
as of April 6.

With price weakness and a sharp reduction in speculative longs, there have
been trader reports of some physical demand returning to the market.

The consolidation trend among gold players has reduced the numbers of
hedge-inclined producers, with any hedging likely to be for project-linked
financing only, Martin said.

Although there have been indicators of possible U.S. interest-rate hikes,
major gold producers need to see a continuation of gold price weakness amid
sharp interest rate rises to switch back to hedging, one market source at a
major bullion bank told OsterDowJones.

"In my opinion, a shift (to hedging) in the short term will be very, very
small. There's still very much pressure from shareholders (of gold producing
companies) who want greater volatility and open this (gold prices) to the
market movement," he said.

"At the moment the contango isn't there. I think the modest change in rate
expectations is not sufficient to make people in the mining companies change
their general hedging policy," the source said.

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

And if you read it through to the end, you will come away with the distinct impression that UBS is probably working their way out of a positional jam which they likely facilitated. It makes me smile a little at the fact the U.S. Federal Reserve today officially slapped that bank with a(n unrelated) $100 million civil money penalty.


GoldiloxGold, the real story this month - David Morgan#1209405/10/04; 15:43:21


Let us develop further what this means for the precious metals investor, and why certain bureaucratic forces would want to paint a picture of a world awash in gold and terrorism.

Gold is first and foremost a political metal in that it is fungible and leaves no tracks. Cash can be "laundered" — but, heck, gold is a virtual Laundromat. It is malleable, untraceable, easy to transport and extremely valuable.

You and I know that once upon a time, not so long ago, there was one currency, worldwide, and it came in the form of the yellow metal — gold. (Silver, my favorite, was a close runner-up.) But that wasn't good enough for the internationalist crowd. They want a fiat money — paper — global currency, preferably not backed by gold at all. They want the flexibility to create as much debt-money as they want, when they want and to charge governments (you and I) massive amounts of interest for printing that money.

In the 1970s, they tried to control the price of gold and it got out of hand. They tamed the price and then instituted what some (correctly in my opinion) have termed a "conspiracy" to keep the price of gold down through the 1990s. This was accomplished through massive short selling of the metal, through the "carry trade" and by simply talking the price down. (For a while, in the late 1990s when the price of gold was threatening to rise, you couldn't get through a month without one central bank or another announcing a phony "sale" of their gold assets to be held in the not-too-distant future — a future that often, unsurprisingly, did not come.)

There's no gainsaying that gold has been on a tear these last few years, a powerful uptrend. Even though the short term technical picture looks blurry right now, gold very obviously has not lost its allure, especially not for Asia's growing and powerful economies.

I can only imagine the frustration of those who want to stomp on the price of gold. After all these years of price-fixing the "barbaric" metal, shorting it, selling it, damning it regularly in the press, gold just keeps popping back up like some kind of fiendish, glittery jack-in-the-box.

They just don't get it. Gold's allure is not the product of some irrational, historical hiccup. It's the end result of thousands of years of money competition. It's won its place because people liked to trade it better than salt, beads, sugar, spices and all the other things that have been tried through the ages. The marketplace chose gold (and silver). And what the marketplace chooses cannot easily be undone.

This has to be the latest gambit. They can't fix it, short it or talk it down any longer. So make the link between gold and terrorism. Just come right out and tell people that those who own gold, trade gold and pay in gold are apt to be terrorists.


Perhaps they DO GET IT, David. "You're either with us, or again' us!"

"Separatists" of all varieties: political, religious, educational, and monetary have been regularly demonized a la Waco, Ruby Ridge, Philly MOVE and eventually physically attacked and eliminated. Even your own web site carries links to Franklin Sanders' tale of woe with the IRS, Arkansas, and Tennessee state persecutors. Franklin is alive today because he was sophisticated enough to run for "legal cover" and spend most of his savings on lawyers.

Yet so many gold bugs continue to mutter "It can't happen here!"

Is that coffee I smell?

R PowellDifferent thoughts#1209415/10/04; 16:31:08

Goldendome (120900), interesting idea! I'm not the most knowledgeable about such matters but I had decided from what I have read and what I could understand of that...that the Fed. would not be able to raise rates without hurting stock market prices and the economy. Higher rates will also put a heavier load on those servicing debt, consumer, states, corporate and federal debt, no?

The notion that there is and has been no increase in the cost of goods and services is just about gone. I doubt if even Larry Kudlow could try to sell this misconception any longer. We've seen an inflation of money, now the results are becoming blatantly apparent even to those who are not watching for them.

Inflate or die? Now, how does the Fed. deal with the inevitable consequence? How will the economy react to the "kill inflation" medicine?

G.A.B.... I wonder if Taleb has read Galbraith's book? He presents the same suppositions and does an interesting job supporting them.

Metals today....were all down, (although gold made a nice comeback) except silver. Silver was very strong on a day when palladium, platinum, copper and gold were down. Imho this bears watching. I believe the silver market could (has the ability to) start back up at any time. It might even return to the +$8.00 level in a heartbeat. Or, she may not. If silver reacts to fundamentals, I've never seen it or have YET to see it but we've now seen what even a small speculative silver mania can do!

FWIW, I've been increasing my long side exposure to gold. What fundamental economic force is not now backing higher gold prices? Perhaps only the danger of a deflationary liquidity crisis but with so many other avenues available, I'll chance this one. Where's the 200 day moving average for gold that Hamilton watches so closely?

I do not expect any market to always act rationally, all the time, certainly not gold, but....eventually they must, even gold. Imho that time is near and that's where my money is now parked, waiting, patiently. If this is not the bottom, it must be close and close is always good enough for me. I wonder but only time will disclose...

TownCrierMuch ado...#1209425/10/04; 16:33:29

G'lox/Morgan -- "This has to be the latest gambit.... make the link between gold and terrorism. Just come right out and tell people that those who own gold, trade gold and pay in gold are apt to be terrorists."

Gold's not rowing that boat solo.The reason UBS got slapped today by the Fed was for unseemly dealings with certain parties using DOLLARS.

Privacy issues are far down on my list of good reasons for owning gold. Tangible value is uppermost, and the fact that it comes in a convenient, portable form is part of that.


GoldiloxPrivacy Issue?#1209435/10/04; 17:06:25

@ TC:

I certainly don't think privacy is a very good reason to choose gold as an asset, as "privacy" is illusory in the current PA environment anyway. If I gave that impression, I did not make my point well.

Persecution of gold itself is rampant in the NYMEX and LBMA, and singling out some gold owners (like Franklin Sanders) is just an exercise in muscle flexing from a government who has consistently demonized dissenters over the last few decades.

I DO agree with David that gold will acquire a "bad rep" if no other manipulation techniques can bear fruit. This will be just one more "cross" for gold owners to bear, as we hold the potential as "monetary dissenters" to be labeled as something much more frightening to the masses. This is taking shape as we speak.

TPTB are expert at spinning a "bad apple story" to make a point when it suits their purpose, but also at protecting an ENRON cesspool when it it is their greatest single campaign contributor.

The Media IS the Message.

AristotleA Tale of Two Strategies#1209445/10/04; 18:23:21

It was the worst of ideas, it was the best of ideas.

R Powell says, "I've been increasing my long side exposure to gold."

Ari says, "I've been buying Gold."

Sheeeeeeesh, Rich, I know what mine means, but what the hell does yours mean.... " I've been increasing my long side exposure to gold."?????? It sounds about as unfulfilling as facing a stiff wind with your mouth open instead of having a more conventional lunch.

Maybe you can set me straight on this. Let's say I built a new house and my thoughts now turn toward having a driveway. Would I be completely satisfied if I made a phone call and increased my long side exposure to cement?

Maybe this is a better question: What have I (or you) got when it rains?

Gold. Get you some. --- Aristotle

CometoseEconomy#1209455/10/04; 18:59:01

Someone correct me if I am wrong ; THe stock market indexes are leading indicators of where the economy is going ...The stock market is forward looking .....

Today, according to Dow Theory, something significant transpired . Someone over the weekend who keeps an eye on 38 industry indexes (groups)..said that 35 of them had broken down significantly and 14 or 17 of them had penetrated their 200 day moving averages.....
10007 was a critical resistance level on the dow which was penetrated today and the critical resistance on the S&P was also penetrated. I thought the NASDAQ would be the first to go but it is waiting but it did lead the way down from the recent high....THis is all bad news for the Stock Markets.....

So if these indexes are forward looking then the people that are selling know something about the economy that indicates that the ECONOMY is NOT near as strong as the PUNDITS in the SOLD OUT MEDIA or JOBS REPORTS or any of the Statistics they have been using to spread disinformation would indicate.


Martin Wiess published an article today in which he stated that Bonds and Stock Markets all over the world are crashing. Here's a Snippit

"Treasury notes and bonds have just plunged to the lowest level since July 2002.

Mortgage bonds are falling even more quickly, driving mortgage rates through the roof ... sending mortgage company stocks into a tailspin ... and raising serious questions about the viability of the entire housing market.

Bonds are also crashing in Latin America, Europe, and Asia: Brazil's 2040 bonds just plunged 3.4% on Friday. Turkey's bonds did even worse, down 4.8%.

The world's stock markets are falling in tandem. On Friday alone, the Dow Jones World Stock Index plunged a whopping 2.71%, the equivalent of 277 points on the Dow Jones Industrials.

In the U.S., the stock market decline was not quite as deep, but it was certainly broad-based:

Elliot Wave International points out that, on the New York Stock Exchange, a whopping 3,135 shares fell on Friday while only a meager 255 rose -- the third-worst ratio of advances to declines since October 16, 1987, the Friday before Black Monday.

Bank stocks have gotten smacked -- down by 4.3% in the last four days, or more than double their rate of decline over the past month."

SO if our economic recovery is an illusion , then we don't need to raise rates.............unless we need to buoy
the dollar until all this selling starts in BONDS AND STOCKS and that itself perpetuates dollar strength to a degree and for a time....until the selling abates.....

But as you have seen today large blocks of sellers are being encouraged to trade in their dollar holdings and repatriate their money or transfer it to some other market.

and Goldilox this morning also aptly pointed out that the Fed still has room to lower rates since the economic recovery is an illusion ....I heard 50 basis points by the election but .25 by August at the earliest....according to a hot tip someone shared last night from a newsletter in which we were informed Alan Grenspan knows inflation is 8% now and he's going to open up the spigot to try to bring us to 14000 dow by election time.....

Lies cannot exist without the truth ....Cheap counterfiets to sell ...from " our insiders in WASHINGTON ....
Oh Incidentally this Newsletter editor also said we were going to get good returns on our gold and our silver.....850 and 12 respectively in short order.

There may be parts of truth in this letter but there is some big smell coming from it as well.....

THE leading economic indicator of the Stock market says the Economy is in trouble....

Martin Wiess in his letter that I quoted also said todays stock market looks a lot like Oct 87 in three ways ....

the bond market is getting hammered as rates are moving up

because interest rates are moving up and inflation too ,
earnings prospects of wall street firms are going to get discounted by a greater degree and producing the same level of profits in the future will be unsustainable...

Insider selling in the Bear Market rally we have just witnessed has been setting some records in specific dynamics.

The war and its after effects is souring.....

All of the stimulus that the Bush administration and the Fed have introduced into the economy is wearing off .....
now we pay ..........

If everyone sells US BONDS at the same time and the money goes back to Europe , Japan , Asia , India .....Is that going to be good for the BOND MARKET OR THE DOLLAR ?????
We can put the money in T BILLS and SIT ON IT AND COLLECT the discount rate , right???

Any one here think that the smart money that is selling BONDS and STOCKS knows as much as we do about what the future holds or what a good value looks like......?

THEY ARE GOING TO VALIDATE YOU SOME MORE AND MAKE YOU LOOK LIKE GENIUSES......after they get finished shaking the tree.

WHERE IS THE BEEF....WHERE DO YOU PUT YOUR MONEY when paper markets begin to burn ..?????????THEY used to call the Swiss Franc the safe haven currency because it was backed by gold and whenever there was a crisis , you could count on the Swiss FRANC TO GO UP .

Now with the dollar on the ropes because of the twin deficits and POWER PRINTING PRESS activity ....and now the BOND MARKET AND THE STOCK MARKETS IN REAL TROUBLE , I wonder where people are going to turn to as a SAFE HAVEN ?????? WHERE THEY ALWAYS HAVE ....for the last 5000 years.....GOLD

I think that this thing that David Morgan brought up is way overblown .......because if you get rid of GOld , you have to close down the comex .....Then they will have to outlaw Mining companies. They may have to shut down all those Exchange Traded FUNDS that are GOLD AND SILVER BASED that are cropping up all over the world....

I don't think so ..........Gold and Silver have been money for 5000 years and that's probably not going to change....
hopefully not in my lifetime....So if it becomes a problem , you are free to move about the globe ...
You may be able to afford to do so if you can learn to travel light and produce value whereever you go....

There is a lot of Drama around these volatile moves in the GOLD AND SILVER MARKET ; it's interesting but it doesn't change the inevitable....(we all have to die and pay taxes, NOT) I used to have a friend named VINCE STEWART; He and I and a couple of others lived in TRENTON in 75-76* (incidentally , at the time 75 % of the world's population lived under Communist Regimes/ my how times change) Vince used to say you can't put NIAGRA FALLS IN A TEA CUP and YOU CAN'T STOP GOD......

I think of that now because I think that GOD CREATED THE GOLD and I think that in times like this , GOLD IS here Because people need an outlet at these times of Man's GREED, STUPIDITY, GROSS NEGLIGENCE, as a Safehaven to tide them over while mans consequent FINANCIAL SAND CASTLES WASH AWAY IN THE Enduring SURF of SOUND economic principles and practice....


R PowellAristotle#1209465/10/04; 19:13:39

And a good evening to you.

Sheeeesh Ari, where have you been. I've been here for going on five years now and never once have I hid the fact that I trade both commodity futures and options. Perhaps you heard of this? Some call it the paper game but..

Oh yes, I forgot, you only buy physical metal and disdain any other type of "exposure" to gold.

How could I have forgotten, after all, you have repeated this matra over and over and over and...but you get the idea, right? Have you said anything else that I may have missed? Not for years that I know of. You'll have to forgive me if I've missed anything from you. I tend to read only enough of your words to satisfy myself that you are, as always, in your trance repeating your matra..."Buy physical physical... Was it somehow wrong of me to have made some fiat money in silver? I mean, it wasn't physical but it sure works fine to pay a lot of bills. I suppose you don't have any of them.

Frankly, I have spent enough of my time on your narrow minded focus. If you don't mind, Ari, I'll say good buy (physical only of course!) to you. I have better, more profitable and more intellectually stimulating ways to spend my time.
Shall I sign off with the name you gave me? I don't know if I remember it word for word....
The Evil from the Dark Side

DruidStockGate: DTC Lawsuit is Shot Across the Bow Aiming Straight at WallStreet's Dirty Laundry #1209475/10/04; 19:31:12

May 10, 2004 ( via COMTEX) -- (FinancialWire) The recent lawsuit filed by Nanopierce Technologies (OTCBB: NPCT) alleges that the Depository Trust and Clearing Corp. has a lot of reasons, almost one billion of them a year, to keep illegal naked short selling in operation. It was the proverbial shot across the bow by the legendary Houston law firms of Christian, Smith, Wukoson and Jewell, and O'Quinn, Laminack and Pirtle, whose notches already include environmental targets, the breast implant industry and the tobacco industry, all brought to their knees.

The names caught up in StockGate keep getting bigger and bigger. Already those named or sued in association with the massive scandal include some of the biggest brokerages: Goldman, Sachs & Co. (NYSE: GS), Charles Schwab (NYSE: SCH), and A.G. Edwards, Inc. (NYSE: AGE), among them.

The full story is at

In comments to the U.S. Securities and Exchange Commission, C. Austin Burrell, who is providing litigation support and research for the law firms, said that StockGate is more massive than anyone may have imagined. "Illegal Naked Short Selling has stripped hundreds of billions, if not TRILLIONS, of dollars from American investors," and have resulted in over 7,000 public companies having been "shorted out of existence over the past six years." Burrell said some experts believe as much as $8 trillion to $17 trillion has been lost to this practice.

He stated that the restrictions on short selling were deliberately put into the Securities Acts of 1933 and 1934 because of the first-hand evidence then available that the "sheer scale of the crashes was a direct result of intentional manipulation of US markets through abusive short selling by a massive conspiracy."

Burrell noted that the 65-lawyer team presided over by lead lawyers Wes Christian and John O'Quinn has uncovered more than 1,200 hedge fund and offshore accounts working through more than 150 broker-dealers and market makers in a joint cooperative effort to strip small and medium size public companies of their value.

Druid: Speaking of cesspools. Here are some numbers that are off the charts and as usual, the usual suspects are involved.

AristotleSome food for thought#1209485/10/04; 19:45:53

Maybe its just me. Maybe I have a funny way of looking at things. Take this news article, for example.

-----------May 10 (Reuters) - U.S. business and labor groups said on Monday they would give Bush administration a few more months to persuade China to revalue its currency before renewing demands for a formal trade investigation.

David Hartquist, an attorney representing the Fair Currency Alliance, said the upcoming visit of Chinese Vice Premier Huang Ju to the United States in July "would be a perfect date" for the two countries to announce progress on the issue.

In the meantime, the Fair Currency Alliance -- which includes the National Association of Manufacturers and other farm and business groups -- plans to keep up pressure on the White House to force China to revalue its currency.

The Fair Currency Alliance claims China's decade old-practice of pegging its yuan at about 8.28 to the dollar violates World Trade Organization rules by artificially depressing the price of Chinese goods on the world market.---------------

When you get right down to it, to call a spade a spade, so to speak, is the Chinese philosophy of keeping the Yuan pegged at a fixed exchange rate with the *world's* Dollar (in this case, 8.28 per Dollar) really any different than America's own de facto sorta "policy" that also keeps the Dollar pegged at a fixed rate against the *world's* Dollar -- although in our case, it happens to be at a rate of one-per-one?

Just mull on it *whimsically* for awhile...

What's good for the goose can't *can't* CAN'T(????) also be good for the gander???? How long will the world play along with rules that aren't close to equitable? I'd say from the look of things, these past few decades have about brought us to our limit.

This old architecture is teetering on borrowed time, boys, especially when we see groups of folks like these on the winning side joining in the chorus of complaints!

Gold. Get you some. --- Ari

AristotleRich, how about a fair answer to my question?#1209495/10/04; 20:10:05

What if, instead of paying you to pour a concrete driveway for me, I make a call and simply increase my long side exposure to portland cement?

What will I have when it rains?

From your words and attitude I'm inclined to figure that when you had spare time as a teenager, you used to go hang out at the kindergarten playground with lighters and matches. "Don't try this 'til you're older and wiser, kiddies."

Little time goes by. Sirens wail.

"Gee, Mom, I told 'em all to do as I say, not as I do."

That's a pretty lame balm for a toasted kiddie, Mister!!

For all your claimed insights and comprehensions, I may have always had a flamethrower in my hip pocket, but you'll certainly never know it here. Where you and I differ, young Ritchie, is that I know enough to know where and when to keep such a thing under wraps.

Your homework for tonight is to think about that for awhile.

Gold. You'll never get it. --- Aristotle

Golden LionheartWho has an Exit Strategy?#1209505/10/04; 20:43:35

May an old man ask a question? How many people who post here have an exit strategy when they will sell some or all of their physical gold?

Say gold goes up and up and hits $1000. Will you sell if it drops back to $800, or maybe $600? Surely one must protect ones capital. A fistfull of dollars can look very good and is a lot more useful than a block of yellow metal valued oneday at probably $100/oz. (The price I think it will go to in ten years time)

A man I know has a 10oz ingot of gold bought in 1980 at $750 an ounce. He takes it out and gets some pleasure fondling it but he is near to tears when he remembers that he paid $7500 for it and today its only worth $3800.

So how do we judge when to exit the scene and put our money into some rising asset, whether it be land or space tourism whatever. This surely is the most difficult decision to make. Its easy to buy but when is it sensible to sell?

I am bullish on gold and I expect it to be over $500/oz by this time next year but I want ideas from those with much better brains that I as to what exit strategy to employ.

Perhaps you are all so in love with the yellow metal that you will keep it buried in your gardens for ever but I hope that isn't the case.

balzacTHE G.A. BATS WATER DIVERSION PROJECT#1209515/10/04; 20:45:37

Because Calgary and the rest of S. Alberta are already doing their best to use up a large portion of the S. Saskatchewan river system.


AristotleMy "exit strategy" for Golden Lionheart#12095205/10/04; 21:32:17

At the risk of oversimplification, it's about the same strategy I reckon most thinking people use when they decide between using their savings account or their checking account.

Do you get my quick drift?

Gold. Save you some. --- Ari

DruidPEAK OIL: DEBATE OR VENDETTA?#12095305/10/04; 21:38:12

April 22, 2004 1800 PDT (FTW) -- I sometimes think peak oil has already hit Manhattan as subways become increasingly unpredictable (although surveillance cameras are state-of-the-art) and escalator shut-downs present stair master survival challenges, a kind of perverse underground amusement. Unfortunately, surfacing on Fifth Avenue does not end the scenario, for where once there was excellence and exquisite fashion, now there are bargain stores catering to New Yorkers who are poor, and yes – even starving.

So I was particularly fascinated by the opportunity to listen-in to the telephone conference call that JP Morgan held for its clients on April 7 and 8, "Peak Oil: Fact or Fiction", which From The Wilderness was given exclusive permission to monitor. Maybe there would be answers as to whether or not Manhattan is a harbinger of what's to come for the rest of the nation, and whether its fleeting opulence (not counting all the questionably-financed real estate extravaganzas rising up) is energy-related.

The main speakers faced-off on separate days. First Dr. Colin Campbell, Founder of the Association for the Study of Peak Oil, succinctly gave his position saying that peak oil is "such a geological matter." Campbell says we're now at the halfway mark and that "by 2010 volatility comes to an end and then terminal decline" sets in.

The pronouncement is chilling. What's more, Campbell says that "over the next few years everybody will become aware of this, and in some ways the perception of this growing situation is as serious as the event itself." Campbell's a retired geologist with decades of experience in the oil industry in both exploration and executive positions. He compares peak oil to old age – saying that a man knows when it has set-in.

Campbell was followed the next day by Michael Lynch, a computer oil and gas modeler for the past 25 years, President/Director of Global Petroleum Strategic Energy and Economic Research. Lynch came out slugging, informing conference callers that Campbell has refused to appear with him since 1997, saying "you'll understand why very shortly." He seems to view Campbell as old school and too tired to be optimistic about the future. Perhaps a bit like Cheney and Rumsfeld having their last hurrahs before retiring into the bed & breakfast business on the Eastern Shore of Maryland.

Lynch believes the Hubbert model that Campbell 's theory relies on – discoveries and production follow a bell curve – is not only "incorrectly modeled", but is "much closer to being junk science." He says further, that while Campbell and his colleague, Jean Laherrère, have now "stopped saying that" . . . they've "never admitted they were wrong."

Lynch takes the position that URR – Ultimately Recoverable Resources – is not a static amount and therefore cannot follow such creaming curves. "It grows over time," he says, "as a result of economic changes, development in an area, but also because of technology, and in some cases, better scientific knowledge."

Campbell says today's oil supply is finite, and that it all came into being during two periods of global warming 90 million and 150 million years ago when "excessive" algal blooms formed on the seas and lakes, became heavier and heavier, and sank to the bottom of the rifts where they were "preserved" and pressure-cooked. The resulting oil and gas then began leaching its way back up to the surface through the sandstone (in the pore spaces between the grains of sand) and rock.

Campbell is adamant about the peak oil issue not being an economic or political one, but simply a case where we've now so depleted our "endowment" that peak oil will occur by 2010, and that soon after there will be a rapid fall-off in oil resources, which will profoundly affect world civilization.

So the conference began with a bit of posturing and name calling – with Campbell announcing "no common ground" with the "flat Earth economists" (Lynch et al.), who he says believe there's an infinite supply of oil (no one believes this, including Saudi Aramco).

Lynch called Campbell, Laherrère (and investment banker Matt Simmons) Malthusian pessimists, and obliquely referred to Simmons's upcoming book on peak oil as "content free."

Druid: BB, I know you are one busy bug but if you get the chance, I would appreciate your comments on this article or if anyone else wants to jump in, please do. TIA.

Cometose@Golden Lionheart#12095405/10/04; 21:41:26

Doug Casey who is quite tried and and experienced mining analyst and editor of his own Newsletter has advised his own strategy as follows....

He believes gold will go very much higher that it is today but he has chosen to exit at 1500.....even though, he believes that will be early in the cycle...

I tend to believe that at that level something else will be grossly undervalued that will offer great potential ...
to BUY LOW....or TRADE INTO LOW using the GOLD as A medium. This gives the prospective reciever of your gold upside...on their horizon. Gives you plenty of time to shop undervalued opportunities...whether equities or way undervalued real estate etc etc etc.Happy shopping ...

AristotleThe old Silk Road gets new pavement#12095505/10/04; 22:24:31§ion=0&article=44722&d=11&m=5&y=2004

As I posted the first article, I also wanted to share this other bit of Chinese trade news. You'll notice that mention of the Dollar is nowhere to be found. Here's the short version:

---------11 May 2004 -- Gulf Arab states will sign a landmark economic cooperation agreement with China at the end of the month to boost trade relations and pave the way toward a free trade accord, the head of the Gulf Cooperation Council told AFP yesterday.

Finance ministers of the six-nation alliance will visit Beijing from May 30 to June 2 to ink the agreement. "We pin great hopes on this agreement to open negotiations for further deals and finally strike a free trade accord. China is a huge promising market," said GCC Secretary-General Abdul Rahman Attiya.

"The economic cooperation agreement is a framework for further deals with China. It will shape future economic and political relations between Gulf Arabs and Beijing," Attiya said.

Following the signing, a timetable will be set for deeper trade negotiations with the Asian giant, capitalizing on the strong political relations that exist between Gulf Arab states and China, he added.

The GCC, which groups Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, has announced a monetary union for 2005, a common market by 2007 and a single currency by the start of 2010. China is the fourth largest trading partner with GCC nations after the European Union, Japan and the United States.

In a quest to open new markets for oil, petrochemicals and aluminum products, the GCC states signed a framework economic cooperation agreement with the European Union in 1998, and inked free trade agreements with several Arab nations.

But the GCC has so far failed to sign an elusive free trade agreement with the EU. Kuwait's Finance Minister Mahmoud Al-Nuri on Saturday said he hoped the pact will be signed before November this year after some progress was made in talks held in April.------------

I also want to highlight a portion that states "Chinese exports to GCC states last year, which included electronics, various types of goods and garments..." and "GCC exports to China, mostly oil and petrochemicals..."

Hmmmmmm... seems to me like a lot of unnecessary effort to get the goods they want. Would it be silly of me to ask why they both don't just print bonds for export like we do?

How much longer will our privilege last?

Gold. Get you some. --- Aristotle

mikal@Golden Lionheart#12095605/10/04; 22:31:50

You may wish to consider exiting gold in increments rather than all at once. As you may know, POG forecasts from news, personal comments and reasonings, or posted essays, range from negative to "orders of magnitude" positive.
By perusing these pages in coming days, months and years, all can add to their exclusive database and informed judgement and
polish to perfection a most uncommon strategy. All the while using critical input to sense and respond to changing conditions that would overwhelm a mere computer.

Goldendome(No Subject)#12095705/10/04; 22:57:15

Ari: You ask, "How long will our privilege last?"

IMO: As long as we hold *ALL* the military cards!! The one thing that we have on everyone else (in addition to the privilege) is a crushing military, supported by those around the world who feel they are buying "protection".

Great Albino Bat"When to exit gold" - herein some thoughts from the GAB#12095805/10/04; 23:04:44

First, I would not exit gold just because a certain price in fiat has been hit. Why exit at $450? At $500? At 850? At $1,500? At $3,000? At any "price" in paper?

You can exit any time you want - but, all depends on "What for?"

You need to eat? Very good reason!

You urgently require clothing, food, heat and shelter? You sell your gold, obviously! At any price. Can you bear to hear a baby cry from hunger? Not all the gold in the world is worth that!

Beyond this, I'd say selling your gold would be more properly considered as "trading" it for some thing or thing combined with some activity, which will provide you with necessaries for life - either yours or your family's. (Not just for a big bunch of paper "profits")

Say, you are going into farming, where perhaps you have some experience. You will trade your gold, for something that is going to be perpetually a source of income for you.

You might have some special skill, which combined with equipment, might provide you with a livelihood. Use the gold for that.

You might decide to invest in some project which your gold capital can advance, to your expected benefit.

It isn't really a question of what "price" is right as an exit strategy. The question is, "WHAT do you intend to do with your fiat?"

Finally, forget about cashing out and putting your fiat into any "paper" investment. You will, unless you are exceptionally skillful, defeat yourself. That era is past, and will not return for a VERY long time.

Thanks for reading. The GAB

AristotleGoldendome, on the protection racket#12095905/10/04; 23:53:41

I'ma hearin' it... I'ma just not buyin' it.

Another thought for Golden Lionheart, to add to my previous. Put in the pure sense that you seemed to imply, an "exit" strategy, per se, from Gold is akin to an "entry" strategy for paper. It takes a helluva lotta insider geopolitical information to play that game reliably into a winning hand.


That's why I framed my earlier response like I did. Although some people might not know how to manage *metal*, they surely know how to manage *savings*. The decision to sell some of your Gold should be seen as akin to the decision we might make when opting between drawing down our savings account versus seeking a loan at the going rate in conjunction with using our checking account.

Gold. Gettin' some real savings. --- Ari

melda laurePeak oil, fiat money, and other myths.#12096005/11/04; 00:08:28

Druid I'm not surprised that such points of view are taken by some who ought to see the plain facts. While some are debating the existence of Peak oil, others debate the existence of real money.

I just attended a wonderful lecture by Dr. Fritjof Capra. It is clear he has a detailed understanding of ecology and the rather messed up situation we are in. It is equally clear he doesn't see the glaring contradiction that fiat money poses. In an ecological system EVERY resource is ultimately a limited resource. In our economy however, MONEY (credit) is unlimited.

So while you're out there bidding on a bicycle or a hybrid electric vehicle, some other banker will cut a check for 100B to develop some far out oil field on the far side of the moon. His 100 billions will compete for steel, labor and plastics right along with your meager savings that you direct towards your needs. You earn your money. The bank doesn't.

Inherently this system is unjust, and irrational. In effect, if money is free, then even uneconomical oil can be developed (at a loss). Perhaps this is what Michael Lynch means by "unlimited oil" (smirk!) I can assure you that Black Blade will point out that if the energy of extraction exceeds the input then the process is uneconomical. Ahh me...

... If only it were true! With funny money you just pay for a dirty nuke reactor (the quick-and-dirtiest design of course) and then you can spend as much energy as you like extracting tar sand oil or whatever. Ok, I realize that I am being facetious here, but I think you see my point. In order for "price" and "cost" to be balanced, the enabling medium, (called money) must also be balanced (and limited in quantity). And thus it follows that sustainable projects are always priced too high relative to unsustainable gimmickry that relies on eating up your seed corn versus investing it, (paid for with judiciously directed credit).

Thus, BOTH Lynch and Campbell are correct, in a certain sort of way. It's sad really, the environmentalists see that capital has run amok. What they dont see is that it is CREDIT that has broken free of its golden moorings. Because of this you hear all sorts of utopian visions where "if we could just let the UN, or the greenies run the paper printing press" everything would just be peaches and organic cream.

Aint so. Never will be.

Unlimited power, and unlimited credit are imposibilities in any closed system, economic or ecological. It is time we all saw these things for what they are. Credit destroys. Absolute credit destroys absolutely. Credit is not a SOURCE of energy. Credit destroys, it sucks power OUT of a sustainable system, it bleeds its very life juices out. Every hobbit who ever stuck his toes in the dirt knows that. Too bad that credit is so much more confusing than potatoes. Perhaps it is a language thing.

I think not, just a perception problem. We mistake seed corn as trade flows instead of as capital. And thus we "consume" it and pretend it is something called the "current account deficit".

All made possible by ever inflating fiat.

I'll take the natural money, thank you; it's much more sanitary.

cuio nin mellon!

Black BladePeak Oil Is Already Here#12096105/11/04; 00:21:29

Dr. Colin Campbell and Jean Laherrère of the Swiss-based Petro-Consultants as well as the Houston-based "peaker" Matt Simmons have been very accurate in the past and I have no doubt that we have already reached "Global Peak Oil" production. I thought it would have been another 5-8 years yet, but with the phenomenal growth in China, India and the so-called "Asian Tigers" demanding ever increasing petroleum products it is more apparent that economically viable oil production is waning fast. Even Iraq is still exporting 25% below prewar levels (BTW, another saboteur(s) blasted the northern Iraqi pipeline and it has been burning for the last two days). The era of "cheap oil" is over – at least for the US. There has been no new refineries built in the US since 1976 – the same year the last "Super-Giant" was discovered (Canterell Field, Mexico). With dozens of reformulated environmental blends and ever changing regulations/blends and no way for these old refineries to keep up it's a sure bet that this bottleneck will keep petroleum prices high and going much higher. Yet some well-informed investors like Stephen Leeb see the "Global Peak Oil Production" in 2 to 5 years. Meanwhile, lifting costs keep rising in Saudi and Kuwait where oil money is used to pay off Wahabbi clerics, terrorists, political opponents, and fill the coffers of the Royals.

Even so, adjusted for inflation, gasoline and petroleum products are still cheap – in fact cheaper than 20 years ago. The simple facts are that OPEC cannot raise output to meaningful levels. Saudi has already reached "peak" production and the "Super-Giant" Gahwar Field is infiltrated with rising brine levels and production is falling off. Oman and UAE are in rapid decline despite the best and brightest consultants from BP to restimulate production. Venezuela never recovered from the Chavez debacle and demands for higher prices and lower production and strikes (and murders of oil workers) plague Nigeria. Indonesia is a little fish with no prospect of increasing production. Iraqi fields have been irreparably damaged by unchecked pumping and damaged reservoirs with dropping pressures. Iran has called for higher prices as well and won't play along. Kuwait has never recovered from the first Iraqi invasion and dropping production. In short – no matter what the Saudi oil minister says, OPEC is finished as far as fulfilling increased demand. Other hopes have been dashed as the Caspian Sea oil never came through as Chevron (now Chevron-Texaco) sank $billions into several "dry holes" and Russia still has yet to reach peak production attained in 1989. The remaining hope for Russia is in Siberia (a very in hospitable environment and Exxon's efforts on Sakhalin Island).

Oil is the blood that keeps the patient alive and precious metals are the currency of the future as global competitive currency devaluation debases global currencies. Even those such as the Chinese Yuan which is utterly worthless as it is non-convertible (expect for the smart Chinese who are exchanging the toilet paper for precious metals when and where it is available). Just wait until gold and silver are available everywhere in China to the average citizen and not just those in Shanghai, Hong Kong and Beijing. One note to make though is that the summer months are typically slow for precious metals and it picks up dramatically starting in August as harvests in Asia are sold and farmers store their wealth in precious metals, then followed by festivals, gift-giving seasons, and traditional marriage gifts.

Where has the smart money been going the last couple of years? Simple – petroleum an precious metals (ask Warren Buffett and George Soros for example). Ask a Wall Streeter and you get lies about petroleum and precious metals. Ask geologists around the world and the answer is clear – the rare and finite resources of petroleum and precious metals. Right now the hot issue is petroleum and the "Peak Oil" production – that is oil that is economically viable at "cheap" prices (below $60 - $100/bbl). Drilling and extraction costs are climbing, discoveries are small and fewer, and quality is getting worse (resulting in higher refining costs). The Department of Energy and the IEA (International Energy Agency) state that demand for oil will grow from today's current 77 million bbl/day to 120 million bbl/day by 2023. Sorry Charlie – we won't make it that far. The Organization for Economic Cooperation and development estimates that production will grow to about 80 million bbl/day and then stop forever. That leaves us short by a mere 40 million bbl/day of oil by then. Yep – "Game Over". All the easy oil – "Super Giants" have already been found – because of their huge size they were easily found and there is no more.

Want some more good news? The Saudis are very secretive about their reserves for good reason. Simple reason is that many officially listed reservoirs simply exist only on paper and not in geology. The Saudis can talk all they want but they have yet to prove that they have the oil by actually increasing production. Well friends, it has not happened yet and never will. If they could they would have done so by now. So while your failed used car salesman (now known as a "stock broker") says to buy tech stocks or some other useless garbage think of what you really need – protection! That is by a solid fundamental foundation of hard assets like food, water, portfolio insurance (gold and silver), and then you might look at paper (but be very wary, picky, and selective by doing serious study and lots of homework). Actually another book on oil has come out called "The Oil Factor" by Stephen Leeb. I haven't read it yet but he is predicting $100/bbl oil by the end of the decade and maybe more (the reviews have been good so maybe that's my next book to read).

Now watch the swinging watch and repeat after me – "There is no inflation, there is no inflation, there is no inflation,….).

- Black Blade

melda laureOooops!#12096205/11/04; 00:26:09

Oh bother!

I wrote "if the energy of extraction exceeds the input then the process is uneconomical."

I meant to say "if the energy cost of extraction exceeds the amount of energy recovered then the process is uneconomical."

Fritjof Capra "The Hidden Connections". Yet another ecologist that cant understand economics. Truly the worms know what the wisest can not imagine, for of the great sublety of their wisdom they now do CREDIT the folly of their illusion. Principle does not prevail against false laws, nor law against raw power. Yet even the power of credit can not prevail gainst the golden truth of heaven for heaven is as real as the lion, while power is but the noise of the wind of the void.

Belgian@Socrates and all#12096305/11/04; 00:27:15

Socrates, please go to the last chart of P. Verbeeck's essay : $-POG > EW projection made one year ago.
Verbeeck made a very accurate analysis + goldprice targets we saw being materialized in '04.
Now, the VERY good news : The TA/TI is consistant with Gold's fundamentals. The POG-move '99 > '04 ($253 > $430) is WAVE I (ONE) and w're running through the corrective wave II, now ! Wave II (down-correction) found already its bottom at (the projected) $370 !?

Yep, y've seen...ONLY WAVE I, ... Another two waves to come, before Gold reaches a pricelevel in a goldproxy currency, that indicates by how much Gold already should have been "Valued" by a FreeGold environment !

Socrates, also look at the LT €-POG chart and please, comment on my idea that this (euro-POG) chart is clearly indicating (visualising) that the Gold-Revaluation hasn't even yet started ! Whilst, Golden Lionhart is already worrying about and "exit"-strategy !??? But that's a very understandable worry, when I see that Mister Gold (Sinclair) keeps on repeating that Gold IS a currency. Gold is wealth and wealth is NOT a currency matter how "universal" Gold is !

Wealth is simply "MORE" than any currency ! Maybe more on this subject/notion, somewhat later.

But if Golden Lionhart would be the owner/holder of a Rubens painting ...WEALTH...why would you be constantly on the outlook for an the Rubens for a numeraire (money) and catapult yourself back to the victim of permanent depreciation. Once wealth has been exchanged for has lost its wealth and transferred it to another wealth-holder, who wished to consolidate the paper-fruits of his labor into ever lasting wealth.

And there is nothing wrong with wealth and therefore doesn't need to be "privatly" hidden and/or be associated with criminality.

This illustrates how this confetti world has been turned upside down : To hyperinflate all paper and take away one's reflex towards wealth consolidation (Gold), is very OK...holding Gold is suspect ! I want to protest firmly against such insane, dubious, purposesly denigrating kind of (desperate) associations ! It is the systemic act of hyperinflation (printing presses-paperization) that rather should be regarded/considered as a criminal offense. It reminds me always about the (unprotested) 40 years of Gold confiscation.

@GAB : Liked your King Canute posting #120933, very much ! Almost poetic.

@Ari : Pegging the yuan to the dollar is increasingly considered as "unfair" !? But I thought that we were on a dollar-standard and that we should therefore all remain a dollar-derivative ! Another blatant example of the double-dollar-standards ! Smile Ari,...give us a Big one.

@Randy : Yes Sir, that hyperinfla-thing is definitely in sight ! It is the core fundamental for explaning that "technical" WAVE I in the "Re-Valuation" process of the precious wealth. Money, currencies, confetti...will keep on trying to deflate all real wealth, relentlessly...always, again and again,...everywhere ! But we are very lucky that this planet cannot and will never be "monopolized" by *one* dominator with 9 lives. That's what makes it so fascinating, being here on this blue planet.

Socrates : Do you think we are presently constructing a down-correcting wave II ? If yes, give us your opinion, please.

Black BladeOil Price Rises But Oil Stocks Slide#12096405/11/04; 00:40:19


Ali al-Naimi, the Saudi Arabian oil minister, called on the Organization of Petroleum Exporting Countries to increase production quotas by at least 1.5 million barrels a day to protect the global economy. Following his comments, the June Brent crude-oil futures contract fell $0.80 cents to $36.20.

Still, $21 looks low, even in the long term. Demand for oil looks set to increase, especially from emerging markets.

The International Energy Agency is continually revising its forecast for global oil demand upwards, mainly due to soaring consumption from China. And on the supply side, the long-term trends don't look great. Oil is becoming more costly to drill and more difficult to find.

And the ongoing problems in Iraq are putting off the much-needed investment needed to get its oil out of the ground. On top of that, production in the US and the UK is also on the decline, leading to tighter supplies.

Black Blade: Just a small part of what I have been saying.

TopazSystemic debacle averted AGAIN!#12096505/11/04; 00:49:42

For the second time in recent memory, the "system" threatened a collapse. In the wee small hours last eve, the Dollar was powering, even Oil was slightly negative. Gold was @ 373 and dropping, Dow futures went 3digit neg ... then,,, up popped CHF ... a green safe-haven beacon in a sea of Red!

Then, right on queue, the Sauds made their Oil call. Oil dropped over a Buck, the Dollar blinked and Swissie sulked back underwater.

This 92DX, $40Oil must be one hell of an important level.

Black BladeGas cost relief not coming soon #12096605/11/04; 00:49:44

Consumers face expensive summer driving season
May 10, 2004


It's not even summer yet, but drivers are already seeing what many dread most about the season: high prices at the gas pump. A few weeks away from Memorial Day -- traditionally the start of the summer driving season -- gas prices are already near $2 a gallon in most parts of Michigan, close to the state's record high of $2.07 in the summer of 2000.

And if you think the cost of gas is high now, just wait a few weeks. Memorial Day alone can add an extra 5 cents to 10 cents to the cost of a gallon of gasoline. Then some states, including Michigan, switch to a less polluting grade of gasoline for the summer, which can also add a couple of cents. Prices in some parts of the country, such as California, have already topped $2 a gallon.

Drivers are growing more incensed by the soaring prices at the pump. The reasons behind the higher prices are scattered. Some blame the rise on the Organization of Petroleum Exporting Countries because it has cut oil production in recent months. Others say the ongoing unrest in Iraq is causing higher prices because of supply concerns. Then there are skeptics who say it's hype.

But a major reason gasoline is on the rise, experts say, is that consumers are simply using more of it. And given that gas supplies are tight, prices are going up. Fuel consumption is so high that oil refineries are barely able to keep up with demand.

Black Blade: A little bit more. Fewer refineries and more reformulated blends are being mandated. Today the national average is $1.96/gallon for regular unleaded.

Black BladeArabs must invest $1tr in oil and gas #12096705/11/04; 00:57:36


Abu Dhabi : The UAE and other Arab oil producers will have to pump at least $1 trillion into their hydrocarbon sector in the next three decades to expand their output capacity and meet a global demand rise of more than 40 million bpd.

The funds are nearly one-sixth of the cumulative international investment of around $6 trillion needed to be channelled into the oil and gas sector worldwide to face a steady growth in consumption in both sectors.

Black Blade: NatGas could stretch out the cycle but then we do not have the necessary infrastructure to make good use of it. Meanwhile make preparations to your portfolios starting with hard assets like gold and silver (it's on sale right now).

misetichIndonesia warns of high oil prices through summer#12096805/11/04; 04:25:27


Indonesia's energy minister, Purnomo Yusgiantoro, warned on Monday that there was little the world's largest oil exporters could do to rein in oil prices.

In an interview with the FT Mr Yusgiantoro, who is the current president of the Organisation of Petroleum Exporting Countries, said that high crude oil prices could last through summer. But he blamed "very tight" gasoline stocks in the US due to new regulations there, the actions of speculators, and geopolitical issues including the unrest in Iraq.

"I don't like these kinds of prices. These kinds of prices will really hurt everybody," he said. "But this price level is not because Opec is playing. There is not much Opec can do."

Saudi Arabia, Opec's most influential member, on Monday called for what he termed "an essential" 1.5m barrel a day increase in the cartel's output ceiling.

The announcement had a psychological impact but it was modified by renewed worries about the security of Iraqi supplies.
The latest estimates are that the Opec-10, excluding Iraq, produced more than 2m b/d above the cartel's self-imposed limit of 23.5m b/d last month.

With Saudi Arabia carrying the bulk of Opec's estimated 3m b/d of spare capacity, much of any increase in Opec supply is likely to come from the kingdom, although Mr Naimi is said to have already won the backing of several important Opec members, including Kuwait.

Nevertheless, Mr Yusgiantoro indicated that some Opec members were in favour of raising the oil cartel's preferred price band.

US $ depreciation thus far has been 30% - thus the "risk premium" due to possible disruption is around $5-6 - and its unlikely to disappear anytime soon as the threats are real
Price inflation is soaring across EU and its high unlikely the Europeans can accept a lower Euro than present levels
In the US the Trade Deficit report is awaited.....

All Aboard The Gold Bull Express - Part ll

BelgianHoi Topaz#12096905/11/04; 04:33:38

What you are seeing is the dollar struggling like the devil himself in a bath of holy water. Read Nelson Huntberg's latest essay, next door. The very reasons why Gold will *** SPIRAL *** and stop circling as it did during the past 3 decades. (Fibonacci spiral)
NedBB, thanks for "Peak oil is already here"! .........a note to all.#12097005/11/04; 04:41:09

I'm so thankful that I met all the fine folks here at USAGOLD so that we can truely 'see the future for it has arrived'. I am also thankful that I am alive to witness the 'endgame' that soon will be upon mankind. My mother-in-law and a handful of others call me 'negative' and a 'doomer'. My answer to them has always been that 'Man' is too greedy (and stupid) to work things out. History also dictates that extremely viscious wars will be fought right to the last drop (of oil). Coinciding with the end of cheap oil (peaking of production) is the simultaneous difficulties that man will experience with a host of natural resources including perhaps the most serious, water.

I ask the naysayers in complete seriousness how man will simultaneously deal with and solve oil shortages, lack of water, shortages of natural resources, air pollution, population explosions, etc., etc., etc. The list of non-solvable problems, in my very humble opinion, is far too numerous for us to handle. It is truely the 'endgame'. As my son has been taught in his 'pre-university' history course "after WWIII the next war will be fought with sticks and stones". It's not that I am a doomer or negative, I am a realist. I tell them I don't buy gold and then WISH it to happen, I buy gold because IT IS GOING TO HAPPEN!

"Get ready morons!"

So I leave today with a question and an announcement. As we know oil have crossed 'the line' (if not now, soon). Are there other commodities that are in short supply? Base metals? Semi-metals?

Recently I posted a question to the forum that only one person responded to. Given the thorny nature of the question I understand people's avoidance. Asking if a large terrorist event is to happen to muck up the presidential elections in the U.S. is one that most don't wish to imagine yet alone here. I agree.

Given that things are going to get worse before they get better, and that is not negativity, it's reality, yesterday I have sold all paper positions in gold. I have taken advantage of the firesale to the extreme and borrowed $25,000 against my line of credit and bought pure 999 oz.'s of gold. It will take me a couple of years to pay off the loan, I don't care. I haven't had a loan in a decade or more, this one is 100% enjoyable. For less than $200 a month I get more than 2 full handfuls of the yellow. It brings me near my goal of 100 oz. AU and 1000 oz. AG. It doesn't matter what happens before November nor does it matter it 'Peak Oil' was on 05/10/04, I am ready for the inevitable. I can now focus on the many other facets of the 'endgame'.

Thanks to all, good luck to all.


misetichAcross America, War Means Jobs #1209715/11/04; 05:22:23


In this corner of a critical presidential-election battleground state, the economy is surging with the urgency of a boom. But it wasn't President Bush's tax cuts, Federal Reserve interest rate policies or even a general economic turnaround that did the trick. It was war
In the first three months of this year, defense work accounted for nearly 16 percent of the nation's economic growth, according to the Commerce Department. Military spending leaped 15.1 percent to an annualized rate of $537.4 billion, up from $463.3 billion in the comparable period of 2003, when Bush declared major combat operations in Iraq over.
There are economic downsides. In inflation-adjusted terms, the war's cost will surpass the United States' $199 billion share of World War I sometime next year.
The famed economic recovery (jobless) has been fuelled by tax cuts, emergency IR, government spending, military spending -
Military and housing spending are NOT long term positive - as its non-reproductive thus the current economic gratification is long-term pain

All Aboard The Gold Bull Express - Part ll

misetichMCI to Cut 7,500 Jobs, Reports $388 Million First-Quarter Loss #1209725/11/04; 05:30:14


MCI Inc. said yesterday that it would eliminate 7,500 jobs, or 15 percent of its workforce, as part of an effort to bring costs in line with the long-distance giants' rapidly declining revenue.
Jobless recovery continues

All Aboard The Gold Bull Express - Part ll

misetichHigh costs seen crushing U.S. auto industry#1209735/11/04; 05:41:03


DETROIT, May 10 (Reuters) - High costs associated with health care, corporate taxes, rising energy prices and federal regulations are crushing Detroit's auto industry, the head of the top U.S. manufacturing group said on Monday
US Auto industry is losing market share to foreign producers - higher energy and commodity prices and higher IR in the horizon spell trouble for the industry. Many jobs are at stake. Whilst these manufacturers have not announced production cut-back plans yet - it remains to be seen how consumers react in the face of higher gasoline costs
Puts in doubt the forecasted rosy economy growth, elimination of deficits and stronger US $ theorys
All Aboard The Gold Bull Express- Part ll

misetichHard landing risk for China overstated -Pimco's El-Erian sees growth slowing to 6% to 8% #1209745/11/04; 05:58:29

WASHINGTON (CBS.MW) -- China's economy will slow this year, but concerns about a sudden collapse of the economy are overblown, said Mohamed El-Erian, head of Pimco's emerging market group, in an interview with CBS MarketWatch
"I think the concerns of a hard landing are overstated. What you are likely to see is a slowing of Chinese growth from the 8-10 percent range to the 6-8 percent range, but you will not see a hard landing like you saw in Korea or Thailand in 1997," El-Erian said.
El-Erian said the Chinese economy is of "systemic importance" to the global economy on three different fronts.

It is an engine of growth, as a major buyer of U.S. Treasuries and as the main influence on the Asian economic outlook
The Orient remains in an uptrend growth mode - thus attracting foreing capital and most important keeping THEIR capital invested in the region -
Thus higher commodities - energy prices are here to stay creating turbulence in the West - price inflation
US depends on foreign capital to offset the ballooning trade, current account and budget deficits

Physical Gold thrives in this environment as US Assets, US $ deteriorate and the heavily populated Orient economies improve - increasing gold demand

All Aboard The Gold Bull Express- Part ll

BelgianThe "real" oil-problem !?#1209755/11/04; 06:20:19

The presumed US-superpower is occupying the world's second biggest oilreserves in medieval Iraq.
In order to keep the global economy up and running, more debt is needed to add to the world's GDP. If we want to anticipate a constant growing global oil consumption, much more debt upon the already existing and expanding debtberg will be needed. Rising oilprices without bigger future oilflows are becoming a limiting factor on the global debt-loaded economy. A deadlock situation if everything stays as it is.

Theorethically, there should be no investment problem to increase the oil-flow of the remaining (proven-probable) oilreserves. Then what is the real problem, apart from the debtbergs, that forms an obstacle to more oil-flow !?

The main answer on this question must be found in the dollar-system. If the global economy is really as profitable as we think it is,...WHY would oil-reserve-holders wait to make the needed investments !?

Is the above evidence that oil wants Another Value for the precious black gold !? Any thoughts ?

JUGHEADA point to ponder......#1209765/11/04; 07:24:41

...the posts and opinions here ,I both respect...and look foward to..daily...but that doesn't comfort me when I see the markets , including the precious metals(I am substantially commited) go south...and when you read the misc advocates...jay taylor, jim sinclair, adam hamilton, jim puplava, david morgan, et al...I find support and patience, but it's not hard to find the opposing side either...with intelligent and articulate folks.......and age and proximity to retirement has generated an aversion to risk for me...and a fear of what we, individually and as a society, may be looking foward to...if black blade's and other comments ring true with respect to energies, water, and our currencies.....if, as richard russell says,..."in a bear market, everybody loses, and the winners are those who lose the least"....while he recommends currently cash, along with a smattering of gold(33%, if I remember correctly)...he offers no guidance along the lines of energies or commodities and water.....and it strikes me that 10-20% in these areas may have merit....any comments or recommendations,...web sites..specifics..? thanks...jughead
misetichWHAT ARE THEY SMOKING AT THE LABOR DEPT.? #1209775/11/04; 08:56:22


May 11, 2004 -- DON'T get too excited about all those new jobs that were supposed to have been created in April.
I'm not going to waste a lot of my precious space on this, but the bottom line is that most of the 288,000 jobs that the Labor Department says were created last month may not really exist.

They could be figments of statisticians' optimism.

Anyone who plodded through my column last Thursday knows I predicted that job growth in April would be better than the 160,000 to 170,000 jobs that the "pros" were anticipating.

But I also said, quite emphatically I hope, that the stronger growth would be an illusion - the result of the Labor Department's computers making happy predictions about seasonal job creation that could neither be verified nor justified.

I'll explain one aspect.

Back in the March employment report, the government added 153,000 positions to its revised total of 337,000 new jobs because it thought (but couldn't prove) loads of new companies were being created in this economy.

That estimate comes from the Labor Department's "birth/death model." You can look up these numbers on the Department's Web site.

As staggering as the assumption about new companies was in March, the Labor Department got even more brazen in April.

Last Friday, it was disclosed that these imaginary jobs had been increased by 117,000 to 270,000 for the latest month - because, I guess, the stat jockeys got a vision from the gods of spring.

Without those extra 117,000 make-believe jobs, the total growth for April would have been just 171,000 - sub-par for an economy that's supposed to be growing at more than 4 percent a year, but right on the pros' targets.

Take away all 270,000 make-believe jobs and, well, you have the sort of pessimism that the political pollsters are seeing.

Consumer spending should be going WAY UP if these 600,000 jobs announced by the BLS in March- April are for real as it would billions in consumer pockets

..yet retail sales are moderately higher and students are having a difficult time finding summer employment...equity markets are responding negatively -

All Aboard The Gold Bull Express - Part ll

misetichCentral banks say growth not at risk from oil prices #1209785/11/04; 09:19:38


BASEL, Switzerland : Central banks from the G10 leading industrialised nations say the world economy will continue to grow despite a rise in oil prices, European Central Bank (ECB) governor Jean-Claude Trichet revealed.

"The global economy is confirming its steady growth," Trichet said after a meeting at the Bank for International Settlements (BIS), the so-called central bankers' central bank.

"This steady growth is not hampered by the rise of commodity prices or oil prices," he added Monday.
Central bankers are huffing and puffing - the heat is intesnse -as energy prices keep on soaring

Ironically higher oil prices "boost" the US $ as payment of oil transactions is rendered in US $

Additionally the US $ has received a temporary boost from a pullout of US investments from emerging markets and commodities based carry trades

Though the US $ is rallying - it is really acting poorly in view of all the "positives" going its way

As the US $ trends higher, the trade deficit grows, - whilst the economy is slowed by higher energy & commodities-and equity market are beginning to price in the future

A little Physical Gold - ultimate storage of wealth - is a prudent strategy especially in times such as this

All Aboard The Gold Bull Express - Part ll

misetichCentral bankers upbeat despite rate fears#1209795/11/04; 09:38:46,4574,116352,00.html?


(GENEVA) Even as prospects of rising US interest rates battered stock markets around the globe yesterday, top central bankers said they are confident the global economic recovery is broadening.

They assured investors that they remain 'vigilant' with regard to the risk of accelerating inflation.

'Steady growth at this stage is not hampered by a rise in commodity prices and oil prices even if we have to remain vigilant in this respect,' European Central Bank president Jean-Claude Trichet said at a news conference held at the Bank for International Settlements yesterday.
The sharp increase in medium and long-term bond yields as investors brace for an end to cheap money, particularly in the fast-growing United States, was on the agenda.

'We observed nothing that would be worrying and that we had to continue to observe the situation carefully,' Mr Trichet said
He did not discuss the sharp decline in some emerging market currencies over the past few weeks as investors withdraw assets from riskier markets now they see interest rates soon heading higher.

Asked about China's recent monetary tightening moves, he merely said: 'We had a very, very interesting discussion on what is happening in that country.'
The closely watched Blue Chip Economic Indicators newsletter said its latest poll of more than 50 professional forecasters found expectations for growth unchanged from a month ago - though inflation expectations were ramped up.

The survey found panelists expected the gross domestic product price index to rise 1.7 per cent this year, while the consumer price index was projected to rise 2.1 per cent. Both forecasts were ramped up 0.2 percentage points from the month-ago prediction.

Inflation expectations are rising - the sudden rise of China's and its effects on commodities & energy caught them by surprise
Emergency IR will be maintained for the forseeable future since Japan has repeated its almost 0% - EU is at 2% and the US is in a "measured" accomodative stance of 1%

"They" say Deflation is dead - yet their actions speak lauder than words - Fear of Asset Deflation is staring at the white's of their eyes

All Aboard The Gold Bull Express - Part ll

KnallgoldGoldsavings#1209805/11/04; 10:14:59

"At the risk of oversimplification, it's about the same strategy I reckon most thinking people use when they decide between using their savings account or their checking account."--Aristotle

If I got that FreeGold stuff right,then this will be one helluvia volatile savings accounts.Unless,it will stabilise at the peak.

Great Albino BatHello Ned! Welcome to the club!#1209815/11/04; 10:26:50

This is a select club of people here at usagold, who are necessarily among the minority of humans, because we are thinking more than the rest.

Don't argue with anyone - it isn't worth it. Even family members can view your opinions with suspicion about your state of mind.

You have taken a decisive step, in borrowing to buy some gold. This seems a good time to make such a difficult decision, I think you have a good chance of seeing this operation of yours, turn out to your satisfaction. When the metal is in disgrace, that's the time to buy - most don't do that, they wait until it is running up. I wish you good luck!

I tried to help a very old lady with her retirment money; I got her savings into gold ounces but, the stress was too much for her. You know, we only spoke once in a while, and every day she was reading negative things about gold - the usual tripe. Well, it finally got to her and she cut and run. Too bad for her! I did what I could. Even at today's price she was way ahead of where any other investment would have taken her, with complete security and liquidity. But, no! Newspapers and T.V. destroyed her confidence. Maybe she will die before she regrets her decision.

Hang in there Ned, you're going to be OK!


geGolden Lionheart – My Exit Strategy#1209825/11/04; 10:31:48

I would look at the alternative markets before exiting. First of all a top in the monthly chart of interest rates would be necessary. A long term chart can be found at the following link.

Currently, the long term down trend line has not been violated yet. Moreover, the chart paints a very slow process. Breaking the down trend line, establishing an up-trend and forming a top should normally take many years.

Next, there should be value at the stock market. Price/Earnings (P/E) ratio should be well below 9, considering the extreme upward stretch it has made.

A historical chart of P/E ratio can be found at the following link:

which is attached to the page

Stock market dividend yields should be 6% or more (possibly 9-10%). Attached is a long term dividend yield chart:

which was extracted from the essay,

Again, it looks to me as if it is a slow moving process, taking a decade or so to complete.

Finally, at the social side of the spectrum, I would like to see, gold is wealth ideology, with everyone trying to save in physical gold, when value has returned to paper assets (bonds and stocks).

Best Regards,

Great Albino BatHello Ned! Welcome to the club!#1209835/11/04; 10:35:55

This is a select club of people here at usagold, who are necessarily among the minority of humans, because we are thinking more than the rest.

Don't argue with anyone - it isn't worth it. Even family members can view your opinions with suspicion about your state of mind.

You have taken a decisive step, in borrowing to buy some gold. This seems a good time to make such a difficult decision, I think you have a good chance of seeing this operation of yours, turn out to your satisfaction. When the metal is in disgrace, that's the time to buy - most don't do that, they wait until it is running up. I wish you good luck!

I tried to help a very old lady with her retirment money; I got her savings into gold ounces but, the stress was too much for her. You know, we only spoke once in a while, and every day she was reading negative things about gold - the usual tripe. Well, it finally got to her and she cut and run. Too bad for her! I did what I could. Even at today's price she was way ahead of where any other investment would have taken her, with complete security and liquidity. But, no! Newspapers and T.V. destroyed her confidence. Maybe she will die before she regrets her decision.

Hang in there Ned, you're going to be OK!


Great Albino BatApologies for double post!#1209845/11/04; 10:36:59

GoldiloxSM Rally?#1209855/11/04; 11:11:43

So far, CNBC is using words like "nibble rally", "very low volume", and "classic seller exhaustion" to describe today's feeble dead cat bounce.

30 points up on weak volume today after 300 points down on "movie house fire exit" Friday and Monday.

PMs watch quietly in the wings. Got GOLD?

GoldiloxIce Cream Prices May Cause 'Licker Shock'#1209865/11/04; 11:18:36


Already staggering from sticker shock at the gas pump, consumers may suffer "licker shock'' at the ice cream stand this summer when they see some of the industry's biggest price hikes ever.

Blame it on bad timing. A combination of political unrest and natural disasters overseas, and fluctuations in the dairy industry in this country has left ice cream manufacturers grappling with higher prices for key ingredients including milk, vanilla and cocoa.

"I have been in this industry for nearly 20 years and I have never seen all of these things come together at one time,'' said Lynda Utterback, executive director of the National Ice Cream Retailers Association.

Although large manufacturers can absorb some of the higher production costs, consumers can still expect to pay more for everything from pints in the grocery store to cones at the stand and push-pops off the truck.


A follow up to my banana split post yesterday! I paid $4 for a pint of Ben and Jerry's yesterday. I cost the same as the movie I rented for $4 to accompany it.

specie-manInvesting in other resources (water, energy)#1209875/11/04; 11:53:07

I think it would be interesting to invest in oil right now.
I am not, however, interested in anything "paper". Yes, you could buy stocks of companies with in-ground oil reserves. But how do you know that the stated quantity of reserves is accurate and not accidently or intentionally inflated ? "Paper" oil is akin to paper gold. But investing in physical oil is problematic, of course. Maybe the way to go is to invest in future alternative energy tehnologies.

The Earth has plenty of water. The problem is that supplies of fresh (drinkable) water are declining (per capita). Some desert areas (like much of the western US) have limited supplies of water in any form.

One solution is to "refine" (purify) marginal water supplies. That is already being done on a fairly large scale in many parts of the industrialized world.

Perhaps it might be worth investing in water purification technologies. Actually, many of us already have !

Silver is a proven (and safe) disinfectant used in water purifiers. The posted link is just one of many on the internet with information about silver water purification (I am not a customer of, nor have any connection with, that company).

Desalinization is an option for areas near the ocean. That process takes a lot of energy, however. In the future, I can imagine floating ocean platforms with banks of solar cells or wind generators. The power from those cells could be used on the platform to produce distilled water. It would take a lot of solar cells to produce any meaningful quantity of distilled water. But once built, the platforms could be run at fairly low cost.

Another option for such platforms would be to use electrolysis to generate hydrogen. The hydrogen could then be used in fuel cells and power plants to generate electricity. And the output from combusting the hydrogen is pure drinkable water.

In any case, if such platforms are ever constructed, they are likely to utilize precious metals. In a corrosive ocean environment it would be necessary to use corrosion-resistant (gold) electrical connections, anodes/cathodes, etc. Silver-based superconductors could play a part as well. And platinum is essential in fuel cells.

neer-do-wellspecie man#1209885/11/04; 12:08:07

You might consider palladium. It is used to purify water,removes some of the worse pollutants, also in hydrogen generators it passes only hydrogen. An element with a future?
Great Albino BatThoughts on peak oil, population and water.#1209895/11/04; 14:05:02

If what is being said about "peak oil" is correct, then by the end of this century the world will be quite a different place.

I lived through the 70's when everyone thought that oil was going up to and over $40 barrel, permanently. It turned out to be a false alarm, engineered, some said, by the oil companies.

So, Mr. Simmons notwithstanding, I think we should wait a bit before accepting "peak oil" as an indisputable fact. Of course, the sooner we know for sure, the better.

But, if "peak oil" is a fact, then by 2104 the world will have changed remarkably. So much, to my mind, that it's hard to figure out where to start.

If "peak oil" is a fact, then I can see the world's auto population decrease to 10% of the present number. Why? Expensive, very expensive fuel. Very, very minimal tourism for the same reason. Flying will be prohibitively expensive.
All industrial processes will be more expensive, therefore industrial products for the consumer will be more expensive, autos included.

There is no substitute for oil on the horizon. All clean substitutes that might compete, depend on cheap oil for their generation! (e.g., hydrogen) Solar electricity is but a pipedream in any significant amount. Hydro is limited. However, coal might be a competitor! Yes! Never mind the smoke! Plenty of coal to keep us going, but, the problem is the smoke. Can coal be cleaned up for burning, cheaply?

I can imagine a heavy impact on the population of the world. If the population does not actually diminish, which I think it probably would, then at the very least, there will be the beginning of a decrease in population.

Good things will come, along with "peak oil". Less frivolous motion. Less purchasing of unnecessary things. Less spending and more saving. Quieter lives.

If anything upset Western Civilization, it was the industrial use of oil since the middle or late 1800's. Oil overthrew all order. The passing of the Oil Age will make for a reestablishment of humane societies.

Gold will recover the respect due to it. Growth will be out, stability will be in.

Thanks for reading! The GAB

Great Albino BatAnd getting around to WATER!#1209905/11/04; 14:22:55

As our industrial civilization contracts due to expensive oil, our living habits will change. Great savings in expenditure will be made.

Remember that in Europe after WWII, if you traveled you would ask for a room at the hotel, "with a bath". Most rooms did not have baths. Your quite good, ordinary hotel would have one bathroom per floor.

I sometimes think it is grotesque that a 1,000 room hotel has also 1,000 showers and 1,000 toilets.

Outside Paris, if you sought a toilet at a restaurant you would find a room with a hole in the floor. Still there, not too many years ago, at "La Samaritaine", a Dept. store in Paris.

Americans taught the world to waste water - bathing every day, with hot water! (The sturdy English boasted of cold showers in the morning.) Water for flushing toilets - a luxury, indeed. For watering lawns. How much water is REALLY indispensable? Much less than is consumed. So much is used wastefully or for things not truly indispensable. Lawns in Phoenix, AR for example - the desert.

All this abusive use of water has to do with the consumption of oil, it goes hand in hand with it. Lawns in Phoenix and house temperatures at 68 F. when outside it is 100+ F., and the house is enormous. We shall have to change our ways. Use more lotions and less water!

The passing of the Oil Age! I'm glad I flew the Concorde!
A mighty age passes from the scene, forever. To be remembered as a mythical age in millenia to come.


CometoseBONDS and METALS#1209915/11/04; 14:46:25

Here's a little snip from Jason Hommel at
Majestic ....

He boils it down nicely for all of us .....He kind of graphically is breaking it down making real and plain what somehow many of us already know in our hearts via SYNTHESIS of Info flowing here...

"The important point to remember is that if the trend for interest rates is up, then the value of risky bonds will be going down, because bond values move inversely to the interest rate. If interest rates are headed up, and bond values are going down, then it must mean that people will be selling bonds. It is such selling pressure on bonds that moves bond interest rates up in the first place! Now, where will they put that money from the sale of their bonds, and how much money are we talking about? If you have been paying attention each week, I have a little chart below that lists such figures, and here are a few of them, that illustrate the relative size of the bond market compared to the precious metals markets:

$33,000,000,000,000: World bond market yr end, '01:
$20,200,000,000,000: U.S. bond market, yr end, '02:
$2,572,160,000,000: Marcos/Phillipine "black/unofficial" gold: 200,000 (to 500,000) Tonnes @ $400/oz. (Book: "Gold Warriors")
$1,860,000,000,000: World "official" gold, 145,000 T @ $400/oz.
$100,000,000,000: all the world's gold stocks (estimated?)
$75,000,000,000: Money flowed into Equity funds in the first quarter, 2004
$7,090,000,000: all the world's silver stocks (59 of them on this list, as of Dec. 5th, 2003) (Perhaps $10 billion by April?)
$1,225,000,000: 49 mil oz. of registered COMEX silver @ $25.00/oz.

Thus, if interest rates are headed back up, due to inflation, and bond values are headed down because people will be selling bonds, what will they be doing with the proceeds? Hold cash during inflation? Not likely. They will buy gold and silver. And as you can see, the size of the gold and silver markets will not be able to withstand the buying power of even a paltry $1 trillion dollars, without prices of gold and silver heading up like crazy.... such as to $3000/oz gold and $300/silver just for starters, or perhaps even driving the value of paper money completely to zero!

Look in my chart above, about how much the money flowed into Equity funds, first quarter, 2004. It's $75 billion. At times in history, silver stocks were the most popular investment class. Look again at that money flow compared to the figure below it. One day, the most popular thing to buy will not be equities, but it will be silver stocks. Look again at the relevant comparable figures. Money flow: $75 billion. Silver stocks: $7 billion. Imagine $75 billion each quarter trying to buy $7 billion worth of silver stocks. That's where we are headed as interest rates go up, and bond values crash. Get the picture?

And of course, as interest rates go up, the value of shares in companies in debt like Ford and GM will also crash. With bonds and stocks ready to crash, where will people put their money? Silver and gold!

Metals prices will be heading up 100% or more each year from now. Bonds will not be an attractive alternative to precious metals until interest rates are in excess of 100%. And that would still not tempt me, because I will most likely continue to enjoy 300% to 1000% annual gains in silver stocks."


CalidorGAB ....... And getting back to oil#1209925/11/04; 14:56:24

Posted a few weeks ago ....

The Virginian-Pilot (Norfolk, VA)
April 18, 2004

Author: Alexander P. Grice

Article Snippet:

The sad fact is that the area used to have a great light rail system.

Virginia Beach had several other rail lines and Norfolk had an extensive trolley system as well.

But like similar systems across the nation, these commuter lines disappeared in the 1940s. And commuters sitting in gridlock ... today might like to know who to blame for this mess.

The culprit was National City Lines. Formed in 1936, it was a holding company funded by General Motors, Standard Oil of California (corporate predecessor of Chevron) and Firestone Tire and Rubber with the express purpose of acquiring local transit systems - and dismantling them.

Conspiracy is a better term, as this company's intentions were definitely not in the best interests of the public; lightrail systems don't need motor coaches, gasoline or tires.

By 1949, a hundred electrified light rail systems across the nation had been replaced by buses, even though numerous studies found that diesel buses had a shorter economic life, higher operating costs, and lower productivity than light rail.

More to the point, the diesel's smoke and noise combined with increased traffic congestion would discourage ridership in favor of car ownership, and GM's gross revenues would be 10 times greater selling cars rather than buses.

According to their unofficial slogan at the time, "What is good for GM is good for America."

In April 1949, a Chicago federal jury found National City Lines to be a criminal conspiracy; the court imposed a sanction of $5,000. GM's treasurer H. C. Grossman, who played a key role in the motorization campaign, particularly the dismantling of light rail systems in Southern California, was fined the grand sum of $1.

Despite its conviction, National City Lines continued its nefarious work and by 1955, 88 percent of the nation's streetcar systems had been eliminated.

(For more on this sad chapter in U.S. transit history, see the Web sites, and

That was more than 50 years and a lot fewer vehicles ago. Today, the time is fast approaching when traffic congestion will become a truly serious problem, rather than just a mere annoyance.

Calidore - and not to mention the POO.

BoilermakerPeak Oil > Goldbugs Rejoice!!#1209935/11/04; 15:18:50

I view the price of oil for the past century as reflecting the finding and rapid depletion of a vast treasure trove of high quality stored energy at fire-sale prices. Sort of like the spendthrift heir to a family fortune can go through his inheritance. During this great production and consuption binge little or no long term replacement energy sources have been developed.

Think about it. Storing energy is not easy. Organic energy sources, oil, gas and coal are basically stored sunlight. Oil's unique energy storage qualities make it a natural for transportation where a tankful can be loaded in a few minutes. Try to put 300 miles of sunshine in your SUV or Mini Cooper or Harley.

Solar panels are coming to an energy store near you. Goldilox and the Greens can be assurred that $50 oil will start the process and $100 oil will make it flourish. The cure for higher prices is higher prices. At some point we will see a rebalance of the energy supply/demand that will reflect a rising price of natural resources like oil and the development of renewable alternatives. Consumption-side things like public transportation, bicycles, walking and staying home or living closer to one's work are part of the solution. It will not be the end of the world, more like the beginning of a new chapter born from necessity.

Gold will return as a store of wealth just as oil is beginning to reflect its role as a store of energy. It is relatively easier to store some gold compared to oil and gold will hold its value vis-à-vis energy.

Great Albino BatCometose: What happens when Bond values fall...#1209945/11/04; 15:26:41

This is a very complicated subject. I wish I was as optimistic as you are, about the effect on gold prices.

From what I have seen elsewhere, though, I can think that if Bond prices begin to falter, what investors will be thinking about first, is to get out of longer term bonds, whose values fall harder when interest rates rise, and into shorter term bonds or T-Bills.

Unfortunately, "anything but GOLD!". Investors think in terms of dollars and interest rates, not in terms of the yellow metal. (They will eventually, but not soon)

The government will have to finance itself with issues of shorter and shorter-term debt, finally selling government promises, whatever you want to call them, maturing in one month or less. No longer term debt will be marketable - much too expensive.

We also have to beware of not making the mistake that a falling value of Bonds means they are ALL being sold. The movement at the margin of a relatively small sale of bonds, at lower prices, affects the prices of all bonds - but not all bonds are being sold. Most investors just sit on their bonds as they go down in value. Correct me if I am wrong!

Of course, the gold market is tiny and a small amount of money, relatively speaking, can make it explode. Strange, and important, that such a small market should hold such importance, but it does.

I think that's the road ahead. Comments from more savvy people are certainly welcome!


misetichFed's McTeer downplays energy woes#1209955/11/04; 15:27:20

"Paying more for oil and natural gas can sap growth, but this time around the recovery appears robust enough to withstand the higher energy bills," he wrote.

"Fortunately, more expensive energy will only muffle the recovery, not snuff it out," McTeer wrote.

Nine of the 10 U.S. recessions since World War II came on the heels of spikes in oil prices, McTeer wrote in his Journal commentary.
He added that benefits from past experiences among companies "gained over years in dealing with higher energy prices," will help the U.S. economy this time around.

Energy prices will likely come down off their highs, McTeer wrote, but "market fundamentals" indicate prices will stay high compared with levels in recent years.

He warned that factors behind the recent surge in prices like increasing Chinese demand and rising natural gas production costs will be around for a long time.

"Substantial world-wide investments in oil production, liquefied natural gas facilities, pipelines and the electricity grid will be needed just to keep energy prices on their present path," he said.
"Buy a Suv McTeer" acknowledgement that high energy prices are here to stay - Oil prices are 40% correlated within the US economy - natural gas were never at the curren prices and neither were gasoline prices - electrical grids are to be tested again in a few months and yet he doesn't forsee any problems ahead, he claims the recovery will only be "muffled".

The longer oil prices remain high at the current levels the higher the odds of a runaway price inflation, asset deflation, more unemployment, financial system disruption

All Aboard The Gold Bull Express - Part ll

GoldiloxSolar and other alternatives#1209965/11/04; 15:32:16


"Solar electricity is but a pipedream in any significant amount."

More oil company propaganda, IMHO as an electrical engineer. Notice the government energy task forces no longer even admit who is participating, as they are all oil execs and NO alternative energy reps.

Sure it costs more than $30 oil, but given the trillions in war and tax subsidies to "foster" petroleum development, so does $30 oil.

The cost of the Iraqi adventures alone (not counting the other 702 bases), a pittance in military finance terms, could add solar positive generation to about 1/5 of USA homes, reversing their drain on the grid and replace a large number of gas-fired generating plants. Adding even 10% to the grid would eliminate the "crises" atmospheres we seem to always act in.

No solar engineer has ever said oil wasn't necessary component of energy policy, but having oil as the only component has overweighted demand and elicited a heap of myopic trouble.

Hubbert's peak accelerates to fruition the longer we ignore alternatives. Why wait until all the oil is gone to develop anything else? Oil will last a lot longer if we make positive moves to reduce demand (not just conservation).

Our current energy policies are reminicent the fisherman who used technology to clean out their fishing grounds and eliminate their own occupations and waited for the greenies to sponsor hatcheries and bail them out.

The west's total dependence on oil is as vulnerable as was Japan's similar condition in 1939, and we all know where that led.

misetichReality Check: U.S. Cargo Executives See Imports Skyrocket May 11 / 10:15 EDT#1209975/11/04; 16:00:36


NEW YORK (MktNews) - An awesome tide of imports swept into both coasts in March and is almost certain to be surpassed in April, two months that normally would experience a bit of a lull as they fall between the Christmas and back-to-school peaks, cargo and port officials report.

While they also describe "measurable" progress on exports, the trade gap is almost certain to mount because the export momentum is no match for what continues to flow in.
Trade deficit will be announced tomorrow and it points to $42-45 billions
Higher inventories in the US - higher hirings in Asia

All Aboard The Gold Bull Express - Part ll

mikal@misetich#1209985/11/04; 16:34:15

Thanks for that imports info. But the pardaox remains:
For every month the government is obligated to report on trade numbers, that's ANOTHER month
no one questions why there's still a deficit.

BoilermakerForms of Energy - Goldilox & GAB#1209995/11/04; 16:55:52

Energy for mobile usage such as transportation, ie., oil and gas are the natural forms that will be very difficult to replace. Electricity is not an energy source but is a means of energy transportation. Central electrical generating plants can and will have many forms of energy including nuclear and garbage to make their product. They do not have to move around as do cars and trucks. Even distributed energy which is electrical energy generated at or near its point of usage can be fueled by energy that is not convenient for transport such as solar.

Transportation is the sector that will bear the brunt of the unfolding peak oil. The oil companies have no power other than to try to delay the inevitable switch to alternative sources and watch the decline of their traditional markets. This is like the central banks that can do nothing to prevent the collapse of their fiat money and observe the resurgence of the true store of wealth.

The age of gold and solar power is upon us. Rejoice!

GoldiloxTransportation is an excellent use of oil products#1210005/11/04; 17:22:01

@ BM

I have no quarrel with your transport argument, although many new transport technologies are available for further development.

It's just seems so short-sighted to reply "all or nothing at all". The answer is AUGMENTATION. Take the demand cruch off of oil and transfer non-mobile energy demand to other sources. Reduce the "constant" oil crises and begin to execute some long range planning that utilizes our technologies instead of locking them up in Area 51 and demonizing them as "ALIEN" or "threats to National Security".

I've never advocated ending oil usage, just end the myopia and the deception of how "cheap" it is. Six hundred US lives in Iraq are directly related to stubborn insistence that oil is the only energy source so more kids HAVE to die to get ALL OF IT.

Creating more jobs selling Japanese cars and Chinese knick-knacks is not an intelligent use of 1 million technology trained workers in their "underutilized" role. However, we are so busy fighting wars and building more off-shore police stations that their is no funding to learn anything new, much less implement it.

The fisheries have already told us the tale, if we have an ear to hear.

mikal@misetich#1210015/11/04; 21:32:47

Re: Deficits, debt and official denial.
The humorist Arthur Bloch truly understands bureaucrats.
One of his observations is that an honest, bought politician "will stay bought."
But not without a price:
"Murphy's Law of Government: If anything can go wrong, it will do so in triplicate."
He knows how unbearably lonely is the cross of public service:
"Jacquin's Postulate On Democratic Governance: No person's life, liberty or property is safe while the legislature is in session."
And responsive government never comes down too hard on the people:
"McCandlish's Law Of Unjust Bureaucracy: Any system of justice in which ignorance of the law is no excuse, but in which there are too many laws for any one person to know and remember, is by definition, unjust."
Indeed, without doubt, indubitably, we would argue strenuously, clearly, certainly, on balance, and in retrospect, our paid bureaucrats are well versed:
"Willkie's Law: A good slogan can stop analysis for fifty years."
They never even rest on their laurels:
"Duck's Political Principle: Any campaign reform only lasts until the powers regroup."

Druid@melda laure, BB, Belgian, GAB, Boilermaker, Goldilox#1210025/11/04; 23:46:21

Druid: I want to thank each of you for weighing in on the subject of "Peak Oil". I ask for your collective indulgence, as I had to repost some snippets from each of your responses because as usual, they were just to good to pass up. Thanks for enhancing my understanding about the subject. Each of you knows that when wall street sends its minions out to debate any argument, they can counterfeit and frame pretty much any subject and sell it as the "real deal".

melde laure #120960

"Thus, BOTH Lynch and Campbell are correct, in a certain sort of way. It's sad really, the environmentalists see that capital has run amok. What they dont see is that it is CREDIT that has broken free of its golden moorings. Because of this you hear all sorts of utopian visions where "if we could just let the UN, or the greenies run the paper printing press" everything would just be peaches and organic cream.

Aint so. Never will be.

Unlimited power, and unlimited credit are imposibilities in any closed system, economic or ecological. It is time we all saw these things for what they are. Credit destroys. Absolute credit destroys absolutely. Credit is not a SOURCE of energy. Credit destroys, it sucks power OUT of a sustainable system, it bleeds its very life juices out. Every hobbit who ever stuck his toes in the dirt knows that. Too bad that credit is so much more confusing than potatoes. Perhaps it is a language thing.

I think not, just a perception problem. We mistake seed corn as trade flows instead of as capital. And thus we "consume" it and pretend it is something called the "current account deficit".

All made possible by ever inflating fiat.

I'll take the natural money, thank you; it's much more sanitary."

Black Blade #120961

"Want some more good news? The Saudis are very secretive about their reserves for good reason. Simple reason is that many officially listed reservoirs simply exist only on paper and not in geology. The Saudis can talk all they want but they have yet to prove that they have the oil by actually increasing production. Well friends, it has not happened yet and never will. If they could they would have done so by now. So while your failed used car salesman (now known as a "stock broker") says to buy tech stocks or some other useless garbage think of what you really need – protection! That is by a solid fundamental foundation of hard assets like food, water, portfolio insurance (gold and silver), and then you might look at paper (but be very wary, picky, and selective by doing serious study and lots of homework). Actually another book on oil has come out called "The Oil Factor" by Stephen Leeb. I haven't read it yet but he is predicting $100/bbl oil by the end of the decade and maybe more (the reviews have been good so maybe that's my next book to read).

Now watch the swinging watch and repeat after me – "There is no inflation, there is no inflation, there is no inflation,….)."

Belgian #120975

"The presumed US-superpower is occupying the world's second biggest oilreserves in medieval Iraq.
In order to keep the global economy up and running, more debt is needed to add to the world's GDP. If we want to anticipate a constant growing global oil consumption, much more debt upon the already existing and expanding debtberg will be needed. Rising oilprices without bigger future oilflows are becoming a limiting factor on the global debt-loaded economy. A deadlock situation if everything stays as it is.

Theorethically, there should be no investment problem to increase the oil-flow of the remaining (proven-probable) oilreserves. Then what is the real problem, apart from the debtbergs, that forms an obstacle to more oil-flow !?

The main answer on this question must be found in the dollar-system. If the global economy is really as profitable as we think it is,...WHY would oil-reserve-holders wait to make the needed investments !?

Is the above evidence that oil wants Another Value for the precious black gold !? Any thoughts ?"

Great Albino Bat #120989

"If "peak oil" is a fact, then I can see the world's auto population decrease to 10% of the present number. Why? Expensive, very expensive fuel. Very, very minimal tourism for the same reason. Flying will be prohibitively expensive.
All industrial processes will be more expensive, therefore industrial products for the consumer will be more expensive, autos included.

There is no substitute for oil on the horizon. All clean substitutes that might compete, depend on cheap oil for their generation! (e.g., hydrogen) Solar electricity is but a pipedream in any significant amount. Hydro is limited. However, coal might be a competitor! Yes! Never mind the smoke! Plenty of coal to keep us going, but, the problem is the smoke. Can coal be cleaned up for burning, cheaply?"

Boilermaker #120993

"I view the price of oil for the past century as reflecting the finding and rapid depletion of a vast treasure trove of high quality stored energy at fire-sale prices. Sort of like the spendthrift heir to a family fortune can go through his inheritance. During this great production and consuption binge little or no long term replacement energy sources have been developed."

Goldilox #121000

"I have no quarrel with your transport argument, although many new transport technologies are available for further development.

It's just seems so short-sighted to reply "all or nothing at all". The answer is AUGMENTATION. Take the demand cruch off of oil and transfer non-mobile energy demand to other sources. Reduce the "constant" oil crises and begin to execute some long range planning that utilizes our technologies instead of locking them up in Area 51 and demonizing them as "ALIEN" or "threats to National Security".

I've never advocated ending oil usage, just end the myopia and the deception of how "cheap" it is. Six hundred US lives in Iraq are directly related to stubborn insistence that oil is the only energy source so more kids HAVE to die to get ALL OF IT."

slingshotFear of owning Gold and Silver #1210035/11/04; 23:58:24

Each and everyone of us'sometime in the past, made a consious decision to acquire our first gold or silver coin.
What ever prompted that decision may vary by individual,non the less it was a turning point in all our lives. The accumulation at first,one coin at a time and at bargain prices, was pleasant. If one had set a goal of so many coins it would seem far off in the future.Now the future is here. My plan to buy precious metal has exceded my goal and I still add to my holdings. In the beginning I set a max price of $300.00 and yet I am still buying at $377.00. I thought at the beginning that was all I could afford,but I was wrong. I did find the extra FIAT to change into wealth.
How could I afford the increase in price. I could not afford not too. Sir Ari, chased the falling knife as I did and I know gold going from $310 to $254 was an unpleasant experience veiwed by others as foolish. Yet we are at $378 and mimics gold at $278 with all the same factors and more in place. It is this forum and those who post here that has
shown Common Sense to invest in PM's and have by their unselfishness provided a vast amount of information,pro and con, to base a solid decision for our actions, my actions.
Thank You All.
Now those who have been buying at the lower price ( Below $500 is a bargain in my opinion) I assume have a nice nest egg and the acquired wealth for some may be substantial.
You have worked so hard to get here and the thought of a plummeting POG may be scary. Do I think about it? Yes and my concerns for myself and family weigh heavy for retirement. So in the most basic form I asked myself. Would I be better off five years down the road in paper assets or in precious metals and with all I read and research the percentage sides to the accumulation of PM's
Is it for sure and 100 percent. I would be fooling myself
if I believed that thought. I would confirm I am a Die Hard Gold Bug. Never liked going off the Gold Standard and the remission of silver coinage has been a bad taste in my mouth since 1964.
To the Lurkers, Newbies and Seasoned Ladies and Knights of the Table I say. If you read USAGOLD long enough you will pass from exurberance to fear and finally Confidence in your Decisions.


TopazCash Bonds Oil ... and ABSOLUTE value!#1210045/12/04; 00:09:38

The ONLY "currency" that has ANY intrinsic value (in a Fiat world) is that which Oil trades for.

When the POO is rising in said currency, to maintain ABSOLUTE value @ par, Bonds of that currency are dropping in price.

A rising Oil price in USD can only be reversed if T-Bonds are stabilised and Yields turn down. If this fails to transpire then expect to see higher Oil prices, Higher DX, etc, etc.

We watch!

BelgianGreat posting, slingshot !#1210055/12/04; 00:43:22

And I hope that Jughead is interpreting your ideas as an answer to his question/feelings.

Another Big argument for Gold - *Now* -, is the very high probability of the further detoriation in the risk-reward balances of many non Gold physical investments, speculations, gambles. This "general" detoriation (muddling on) will most probably remain here to stay for a decade. I'm always referring to Japan where the Nikkei is still hoovering at 1/4 of its ATH (1990). That's already 1 1/2 decade !!! And always the same remarks pop up when this Japan-example, the world second biggest economy within the most dynamic Eastern part of the globe, is brought forward.

China + satelites are NOT going to give us a repetion (copy)
of how the economic $-world fared in the past 5 decades !

Sure, there will and are, "always" opportunities...but it is going to become extremely more difficult to be "always" on the winning (lucky) side. One can lose *ONLY ONCE*, one's savings !!! And it doesn't matter, where exactly on the road, one makes that fatal loss/mistake. A loss remains a loss FOR EVER. Gold, today should be regarded against this background of increasing risks versus the reliability of possible (qualitative) rewards.

Even the Dow hasn't been adding to one's percepted (paper)wealth, for the past six years, already !!! Don't start realizing this,... much further down the road...

Have a pleasant morning, slingshot.

Topazput another way#1210065/12/04; 00:50:10

If Foreigners stop supporting the US Bond market the consequences are twofold 1 - a higher $Oil price and 2 - a weakening local (alt$) currency.

Thats where we stand TODAY ... Tomorrow MAY be TOTALLY different!

slingshotWhere is the Exit? I'm cashing in the Gold#1210075/12/04; 01:31:58

Sooner or later we will find ourselves at the Jump Seat ready to parachute out in a free fall to experience a rush of fulfillment. When to make the jump will be different for us all. I have to smile when I think it was R Powell discussed the fun of a quad vehicle and $3000.00 gold. Could I purchase that right now? You Bet! Things Change. How about a few acres of land for a get away. Not at these prices but soon, You Betcha! How about a place in Key West or the Great North West away from everyone on earth.
Ahhhhh, How does one get from here to there? Timeing and alittle luck. Let me use myself for example. I want 20 to 50 arcres of land that I can not buy now. Let me add that I am enjoy the simple life and do not need much in creature comforts. TV, CD DVD's Cell phones are a burden to me and the more prestine the land the better. Real Estate is over rated and I think a collasped is near. At least what I will be able to purchase. I lived in a major city and with the exception of holding a core, when I find the price is right I will sell to capture my dream. So What am I saying here. Precious Metals are a vehicle to get what you want. May it be an extention of your finacial stability or the acquisition of some material. It is when you fell it is the optium return for your investment to secure what you desire, is when its time to exit. IMMHO.

Belgian@Topaz....speaking about intrinsic value of confetti....#1210085/12/04; 01:44:08

Have some Eurostats in front of me : Eurolanders (EU) are on average saving (in euro) 200% (2 x) their GDP. Belgians with 250% are N°1, followed by the Dutch and Brits.
Savings are in cash-stocks-bonds-insurance products.
The Maastricht debt-norm is a state-debt of maximum 60% of GDP.

Compare this relative euro-health with dollar-health !

There are "many" factors that come in play, when confettis compete for the globe's attention...included oil of course.

What I'm trying to put on the balance is the total effects that a euro associated Modern FreeGold market might change, globally. And let us put again the chances of such a euro FreeGold market into the balance. What are its (FreeGold) probabilities and who are all the ones that will profit-lose, from the eventual realization of the modern Gold concept !?

"Intrinsic Values" can be taken away or added, when "systems" succeed in "changing" !? IMVHO, this is becoming a hot/hotter topic in a much bigger geopolitical context than ever before. Gold will certainly be part in the evolution of old systems to new/newer ones.

France AND Germany are very busy of pulling the UK...IN !
I constantly keep that NM Rothshild Gold-statement in mind...Do you ?

slingshotBelgian#1210095/12/04; 02:10:50

Good Day to you Sir.
The best posts are from the Heart.

Topaz@ Belgian.#1210105/12/04; 02:46:07

Agree completely Sir, perhaps "intrinsic" was a bit strong ... and you KNOW we share a common outlook when it comes to REAL Gold held close.
Is the World prepared to support the US Bond market to return to $20 Oil? O-S/D will have no bearing on this. If not, imo the US$ is on the brink of a Deflationary collapse.

Socrates964Belgian#1210115/12/04; 04:46:22

Sorry for not replying sooner to your post but am currently incredibly busy with non-gold activities (unfortunately in the pursuit of paper money, but we should perhaps be thankful that this is what makes my creditors happy).

Anyway, I haven't had time to do much TA, but my thoughts are as follows (and should come as no surprise).

The key variable is POO. There is a huge amount of US wishful thinking that a) Europe/Japan will sit idly by and swallow a massive hike in their oil bill through weaker currencies, b) producer countries are scared of recession and desperate to see the price come down.

Disagree with a) and on b), I tend towards the peak oil argument. If it's true that the Saudi royal family have been pumping like crazy to extract the kingdom's oil wealth before TSHTF, then this undermines their force as swing producer. Nothing worse to threaten OPEC with the sword of retribution, pull it out of its scabbard and then let everyone see that one is holding a rusty pocket knife, because when world markets see that the emperor has no clothes, prices then go to $50 and higher.

Besides, Asians have huge accumulated dollar surpluses which they can't sell into the market, but can exchange for commodities with developing countries on a discreet basis. This is a key point since it essentially decouples demand from the economic cycle and shows up the absolute mendacity of the 'China cooling down' argument.

Hence I see nothing to bring oil prices down other than a few temporary shenanigans in the futures markets.

Where does this leave TA. Frankly,what I really don't like about EW is the assumption that markets fit preconceived patterns, since this is an enticement to commit the major crime of seeing what one wants to see rather than what is actually there.

I thus use Fibs - but my approach is much more laid back than say, Rick Ackerman, who makes precise predictions of the 'if stock X trades 1 cent below $53, then it's a bear signal' variety. Depending on whether it's a short or long-term chart, I'll use a 1.5-3% stop loss.

As such, $380 is a very important number, since it's the 78.6% level on the 415 to 255 downleg. For it to break away convincingly, gold has to trade 3% away from this number, whcih in round numbers means over 390 or below 370. P&F gives me a bull signal for any trade above 388.00, so until these levels are breached, we're merely chopping around.

There is a lot of kinetic energy stored up in the trading range, so whichever way it breaks, it will trigger a big move. Since I really don't believe that the dollar will become a safe haven currency, I expect an upmove starting right now.

Note the resistance levels are at 78.6% of the 415 to 255 retracement (380), 100% (415), 127.2% (458), 161.8% (513). If you assume that these prices are attractors whose impact is broken by a trade more than 3% away, you can see that on the last run-up the 415 price was just about broken, hence the need for an enormous effort to bring it back down to the 78.6% level.

I often use a '3rd time lucky rule' for trading, so I expect that the next challenge of 430 will be successful, although it will probably be opposed, so expect us to arrive there as early as the end of next month and then build a 'cup and handle formation' through July, followed by a successful resolution in 4Q04.

Onto this, we should project the Fib numbers for the huge downmove from 855 to 255, which give roughly 23.6% (405), 38.2% (503), 48.6% (570), 61.8% (655), 78.6% (766). Note that they converge around 410 and 510, so these are the difficult levels. Add a bit of band stretching and you get Jim Sinclair's 529 target.

Now, any kind of retracement has to go to the 38.2% level (503) to be worthy of consideration, so when Lassonde says that the gold bull market has hardly started, he is merely stating the obvious. Furthermore, you can see that the real test of gold is its ability to break through 766. I've compared it to currency devaluations in the past, and all rotten currencies tend to devalue by at least a factor of 3 from their low, which in the case of gold works out to 255 x 3 = 765. So it's very interesting that if we apply this currency argument we come up with exactly the same figure as the L-T key fib level that signals the transition to a secular bull market. I take this to mean that 766 is the level where the gold price will stop provided that the US starts to impose sensible monetary policies - if not we get a transition to high inflation. Once again, Jim Sinclair is merely stating the obvious when he says that gold trading above 529 (my figure is 766) is a disaster for dollar holders because above this the dollar gold price is no longer telling you much about the intrinsic value of gold, but is speaking volumes about the loss of credibility in the dollar.

misetichRefineries struggle to meet demand#1210125/12/04; 06:03:41


Global oil refinery capacity could be stretched to the limit if current consumption estimates are achieved,
The International Energy Agency, ... estimates total refining capacity at 82.1m barrels a day, which is about 2m b/d above consumption estimates for the first quarter of this year. But below the IEA estimate for global oil consumption of 82.4m b/d in the fourth quarter of this year.
Robust US gasoline demand, which is currently running at 5 per cent above last year's levels, and soaring Chinese oil usage are the two main factors driving the higher consumption forecasts.
"We are around $40 in a period of the year when demand is at a seasonal low, but yet refineries are struggling keeping up with demand," said Mr Horsnell.
"If refineries are to meet fourth-quarter demand, they will have to operate flat out in the US, and near capacity in Asia and Europe," he said
Many small refineries have closed because of the low margins during most of the 1990s.
The US imports about 13 per cent, or some 800,000 b/d of its domestic gasoline requirements, mainly from Europe and Asia. Mr Shaw said this share was expected to grow.

"What we are likely to see in the future is more crude shipped from the Middle East to Asian refineries, which is turned into product [gasoline or heating oil], and shipped to the US." he said.

Refinery closings in the US - capacity constraints- increased worldwide demand- translates into:
Negative on corporate earnings and/or higher price inflation or a mix- fewer hirings - higher budget deficit- higher current account deficit = more pressure on the US $
Higher US imports- Higher trade deficits - more downside pressure on the US $
Increased risk of recession - lower discretionary consumer spending- lower growth in the US = low accomodative IR - lower bond yields = flow of funds to commodities- physical assets - more pressure on the US $

Poor energy planning - unexpected growth in China - and malinvestments during the SM bull of the mid-late 90's which saw resource based industries decimated as investments funds fled to IT - dot.coms -

Have a golden day!

All Aboard The Gold Bull Express - Part ll

misetichU.S. trade gap sets new record high in March By Greg Robb#1210135/12/04; 06:37:32

WASHINGTON (CBS.MW) -- The U.S. trade deficit widened by 9.1 percent in March to a record $46.0 billion, the Commerce Department said. The trade deficit was well above the consensus forecast of Wall Street economists for a deficit of $43.0 billion. Imports rose faster than exports in March. Imports rose 4.6 percent to a record $140.7 billion. This is the largest monthly surge in imports since March 1993. Exports rose 2.6 percent to a record $94.7 billion. The U.S. trade deficit with OPEC widened to a record $5.6 billion in March from $5.0 billion in the same month last year. The average price per barrel of imported oil rose to $30.64 in March, its highest level since February 1983.

Massive staggering amount - and April is said to be even higher!

The "free lunch" will end sooner than later

All Aboard The Gold Bull Express - Part ll

a nation of one.#1210145/12/04; 06:48:36

9.1 X 12 = 109.2 (if sustained).

That's quite an annual percent.

misetichU.S. import prices up modestly in April, oil falls (so the headline says!)#1210155/12/04; 07:06:06


WASHINGTON (Reuters) - The price of goods imported into the United States rose moderately in April, as expected, as oil costs retreated for the first time in seven months, a government report showed Wednesday.

Import prices were up 0.2 percent, notching the seventh consecutive monthly rise, after a revised 0.8 percent gain in March
The cost of petroleum product imports fell 0.8 percent after a revised 5.2 percent gain in March. Non-petroleum imports rose 0.3 percent
Imported food costs advanced 1.2 percent after pushing up a revised 0.7 percent in March. This was initially reported as 0.8 percent.

Industrial supplies, excluding petroleum, advanced 2.0 percent and were up 11.4 percent on the year, with unfinished metals related to durable goods up 7.5 percent in April and 34.2 percent year-over-year.

Joke of the day " as oil costs retreated for the first time in seven months, a government report showed Wednesday. "

Import prices are rising thus the massive Japanese (proxy for the US) intervention in the 1st qtr is put into perspective to avoid a collapse of the US $

The raid on gold-commodities re: "China" overheating thus forcing inflows toward the US $ is only a temporary relief from the trend- attempting to "cool down" price inflation which central bankers ARE STILL fuelling re: emergency IR and printing presses

Desperation of central bankers - as to how "manage and massage" the rise of inflation expectations worlwide - through manipulative means - going against the market

Disinflation caused by falling import prices in the late 90's has changed to imported higher inflation - weak US $

Corporate earnings are the KEY - are they sustainable in an environment of higher prices?

The plan of excess stimulation was to ignite market forces -juice up corporate earnings - increased spending - increased hirings

The excess liquidity backfired re: China unanticipated growth acceleration - fuelling energy demand - higher oil, energy prices, higher commodities prices

The last line of defense has been reached: Central Bankers are going AGAINST THE TREND

All Aboard The Gold Bull Express- Part ll

MKNews & Views#1210165/12/04; 07:22:06


J. Alfred Greenspan
Top hedge fund operator says Fed boxed in, go for the gold. . . . (More/Barron's)

FED monetizing debt
Adrian Van Eck reports Fed back to old tricks. Time to brace yourself for inflation . . . (More)


Recommended reading:

"Interest Rates and The Death of Gold"

"A core deception of the moment is the notion that a few up ticks of 25 to 50 basis points in short term rates will be sufficient to arrest the forces of inflation set in motion by the most aggressively accommodative Federal Reserve in history."

Editor's Note: Tocqueville's John Hathaway says both the linkage between interest rates and gold and the much bally-hooed death of gold are greatly exaggerated. In this timely article, he joins a chorus of top-notch analysts who conjure the 1970s as a reference point and comparison to the present era. If he's correct, and we think he is, today's selloff, blamed by financial pundits on a possible rise in interest rates, seems to be a short term over-reaction to and over-simplification of a very complicated set of circumstances.

Once again. we are reminded that more can be learned from a well-directed review of history than the shoot-from-the-hip day-to-day analysis commonly seen in the financial press. Hold the course. . . Buy the dips in gold, and sell the rallies in stocks and bonds until you achieve the proper balance - between 10% and 30% of your overall portfolio in gold.

That strategy worked exceptionally well for the 1970s, it is likely to work now. Don't let short-term market events undermine your long-term sensibility. Little has changed over the past several days with respect to the big picture. In fact my reading is that the international currency situation is even more threatening now than it was a week ago (Please witness the dire warnings from our Fed chairman on the budget deficits.) All the seemingly good economic news of the past several days is more the result of worldwide monetary inflation than it is an enduring change in economic fortunes, and any interest rate rises that do come will be meant to chase inflation. In this go around, there is a difference however: Now all currencies are suspect and likely to depreciate against goods and services. The ghost of John Law has come to haunt the international dollar-based economy.


Top Stories Wednesday

The Mighty Metal, John Myers/321gold
Gas price hits record, Reuters
Japan sold record 14.8 trillion yen in first quarter to support dollar , Bloomberg

misetichFed Governors - OUR WORRY IS JOB CREATION#1210175/12/04; 07:28:14


Philadelphia Fed Governor Anthony Santomero reminded markets late on Tuesday that the pace of monetary tightening expected from the U.S. this year is likely to be gradual and will depend on employment growth and inflation
NEW YORK, May 12 (Reuters) - Chicago Federal Reserve President Michael Moskow on Wednesday said the central bank intended to raise U.S. interest rates at a gradual pace, though much depended on developments in the economy.

Speaking on CNBC, Moskow said the types of inflationary pressures seen so far this year, such as higher oil prices, were transitory in nature and he saw no worrisome buildup of inflation.

Asked about risks to the economy, he cited employment as the major concern though he thought the recent pickup in jobs growth was likely to continue.
The CON job of the Feds worked during the late 90's but has failed miserably in the last several years -
Day by day, week by week, month by month economic reality is overpowering - waves upon wave of the gigantic financial storm is gathering speed and size -
Ammunition is running low - the boasting of a "strong economy" is a hail mary pass to avoid a stampede

All Aboard The Gold Bull Express - Part ll

misetichLast year, the Japanese government spent 20 trillion yen worth of#1210185/12/04; 07:40:07

The Daily Yomiuri (March 16 2004)

Last year, the Japanese government spent 20 trillion yen worth of taxpayers' money on buying US Treasury bonds. This was the biggest annual amount of official purchases of foreign currency assets by any country in history. Since then, the Japanese appetite for US government debt has really increased - this January alone, the government bought
more than 7 trillion yen (about 68 billion dollars) worth of US dollar assets, almost half of which was spent on Treasuries, breaking all records for such purchases during any one month.

As a result of these investments, the Japanese government has become the single most important buyer of newly issued US government debt.

Some would argue that buying US Treasuries may be a justifiable investment. Unlike stock investors, buyers of government bonds who hold on to the paper until maturity should not lose any money - assuming the government does not default. It is certainly true that among the many
assets available, US Treasuries are a viable option for any investor, including governments. But this argument assumes that the Japanese government had the money in the first place. While the Singapore government or the government of the Principality of Liechtenstein may have no national debt, the same does not hold true for Japan.

Admittedly, Japan is a rich country and its gross domestic product is second only to that of the United States. But the Japanese national debt is not far behind the US debt and the Japanese debt-income ratio is higher than that of the United States.

But does the Japanese government not own a lot of assets - the largest foreign exchange reserves in the world, to be precise? True. But these are almost entirely held in the said US Treasuries. Thus it does not make sense to use these foreign exchange reserves to purchase US Treasuries: If that was desired, no new purchases would be necessary,
and the government would be happy with the vast stockpile already in itspossession. Apparently it is not.

But if the Japanese government cannot use its foreign exchange reserves to buy US Treasuries, how else can it pay for them? After all, for the better part of the past decade tax revenues have been far smaller than government expenditures. The ensuing fiscal deficits have increased
national debt to record amounts.

The answer is that the Japanese government has been borrowing money in order to lend it to the US government. Let's get this clear: Japan's government issues debt, such as government bonds, so that it can purchase the government bonds issued by the United States. This raises a few questions. For instance: Does the Japanese government really need to buy more US Treasuries, despite already owning the world's single biggest pile of them? Does it really make sense to borrow money, just to lend the money to another country that needs to borrow?

Here is how the experts have explained events to us in the media: The Japanese government is borrowing money to buy the debts of the US government, because this will weaken the Japanese currency, and that is a good thing for Japan's economy. That's apparently why the International Monetary Fund's Managing Director Horst Koehler, since then elevated to president-elect of Germany, has praised Japan for its

We can quickly test whether this story is true by simply verifying whether such official purchases of US Treasuries have indeed weakened the yen.

There is no such evidence. In 1994, Japan conducted official foreign exchange intervention of more than 30 billion dollars. The yen strengthened to a record high of 79.75 yen per dollar by April 1995. In 1999, Japan set a new world record in official currency intervention,
spending more than 50 billion dollars on weakening the yen. The yen responded by strengthening almost 20 percent by the end of that year.
The government has remained the sole competitor in the increasingly frantic bid to break its previous records in currency intervention.
Despite the foreign exchange intervention of about 200 billion dollars in 2003 and the first few weeks of this year, the yen rose from about 120 yen per dollar to 105 yen.

There is no empirical evidence that the Japanese government is buying US Treasuries to weaken the yen - quite the opposite. Also, it is not clearthat a weaker yen would actually stimulate the economy, as it makes the
badly needed imports of raw materials and intermediary inputs more expensive. Remember, Japan even runs a trade surplus with China.

Instead of holding a world record of 777 billion dollars in foreign exchange assets, mostly in the form of US government debt, the Japanese government could sell them and use the proceeds to pay back some of its own record-breaking debt mountain, or stop issuing new debt - Japanese
foreign exchange reserves currently amount to about 86 trillion yen, which should pay for the annual budget deficit.

Yet, the policy of buying US Treasuries must have some beneficiaries, otherwise it would probably not have been adopted.

It certainly has helped the US government. The Japanese purchases of US Treasuries in 2003 were almost enough to fund half of the US government's annual fiscal deficit. Thanks to loyal Japanese support, the US administration has been able to handle its rapidly expanding fiscal deficit with ease, ballooning military and paramilitary costs of
running its empire notwithstanding.

What is harder to understand is why Japan, which has the highest debt-GDP ratio among industrialized countries, should go further into debt, just so that the already profligate US government can fund its growing indebtedness. In effect, Japanese taxpayers, already suffering
from over a decade of recession, a collapsing pension system and record national debt, are being asked to also shoulder the debts of the US government. It may be convenient for the US military-industrial complex
to obtain such generous funding from Japan.

But is it in the Japanese interest? I think taxpayers have a right to demand that their money is spent more wisely and in their best interest.

Excellent expose

(posted in its entirity for educational and discussions purposes only)

All Aboard The Gold Bull Express - Part ll

misetichDon't Let Japan's "Mr. Dollar" Get Away With It #1210195/12/04; 08:17:19


In Tokyo, he's a faceless bureaucrat in a town full of them. But in trading pits in London and New York, and among chief financial officers from Detroit to Stuttgart, Vice-Minister of International Affairs at Japan's Ministry of Finance Zembei Mizoguchi enjoys celebrity status. And with good reason: This financial diplomat -- call him Mr. Dollar -- is the architect of perhaps the biggest single-handed currency intervention since World War II. On Mar. 5 alone, the Bank of Japan, acting on orders from Mizoguchi's ministry, embarked on a record $20 billion yen-selling frenzy that pushed the dollar to a five-month high of 112 to the greenback.

The one-day blitz came after the Japanese spent $100 billion buying dollars and selling yen during the first two months of 2004 -- on top of $182 billion last year. Tokyo's goal in 2003 was to slow the yen's rise and give Japan's exporters time to prepare for another strong-yen era. But now the Japanese seem intent on weakening their currency outright. Mizoguchi's goal may even be to boost the dollar as high as 120 yen, and he has all the ammunition he needs. On the same day as the BOJ went on its most recent dollar-buying binge, Japan's parliament authorized spending a further $360 billion this year to drive down the yen's value.
With Japan's economy on the mend -- it grew at a rate of 6.4% last quarter -- there is no justification for it. The Europeans are hurting from both dollar and yen weakness,
One reason: Mizoguchi & Co. are recycling their dollars into the Treasury market at a time when a $550 billion current-account deficit makes the U.S. dependent on the kindness of foreigners
But the Bush Administration's see-no-evil policy is shortsighted. With Japanese interest rates near zero, Japan can lower the yen at little cost by selling low-yielding bonds to Japanese investors and using the proceeds to buy Treasuries. "Japan's currency debasement game can go on forever as long as the Finance Ministry has the authority to keep borrowing," notes Carl B. Weinberg, chief economist at High Frequency Economics Ltd. What's more, Tokyo authorities have actually let the yen depreciate against the euro by 10% since the start of 2003. Big Western multinationals are howling. The Japanese "are keeping their currency artificially weak against the dollar and euro and really reducing the competitive position" of U.S. and European companies, says General Motors Corp. (GM ) Chairman G. Richard Wagoner Jr.

As the US dependency grows, re: higher trade, current account, budget deficit the RISKS INCREASE - end of a free lunch

Japanese interventions keep IR artificially low - igniting inflation - first Asset inflation followed by price inflation - followed by hyperinflation OR Asset Deflation if IR were to increase - followed by increased RISK of "nothing is too big to fail"

Are we there yet?
Prudency calls for portfolio diversification and INCREASE in the ultimate storage of wealth - PHYSICAL GOLD - w

All Aboard The Gold Bull Express - Part ll

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misetichVenezuela says OPEC should not raise oil output#1210215/12/04; 08:46:56


BUENOS AIRES, Argentina, (Reuters) - Venezuela disagrees with Saudi Arabia's proposal to raise OPEC's oil output, Venezuelan Energy Minister Rafael Ramirez said Wednesday.

"Venezuela's position has not changed. (An output increase) would not be convenient," Ramirez told Reuters during an official visit to Argentina.

The war of words is heating up between Venezuela's Chavez and the US
Chavez has closed ranks with Cuba's Fidel and appararently quite a few Cuba's advisors are being recruited/maintained including Central Banking

Chavez has also the backing of Brazil

Global tensions are increasing from North Korea to Iraq - to Syria's US imposed sanctions to threats of Israel targetting Iran nuclear facilities to China-Taiwan-US arms sale and to Arab/Muslims resistance vs US neo-cons agenda and ideologies

Iraq oil disruptions continue - and recent attacks in Saudi Arabia make it high unlikely oil prices will come down anytime soon

All Aboard The Gold Bull Express- Part ll

GoldiloxEuroland savings rate#1210225/12/04; 09:19:47

@ Belgian:

Your quote: "Have some Eurostats in front of me : Eurolanders (EU) are on average saving (in euro) 200% (2 x) their GDP. Belgians with 250% are N°1, followed by the Dutch and Brits."

How does one save more than 100% of GDP?

TownCrierGoldilox, savings and GDP#1210235/12/04; 10:08:10

That would be savings expressed in total, not as an annual rate.


BoilermakerPOG/POO#1210245/12/04; 10:26:52

Maybe I'm getting paranoid but it seems that the more negative the pressure that appears in the markets, ie., interest rates, POO, stock market weakness, balance of payments, Iraq, etc, etc, the more tightly I see the lid kept on POG and gold stocks. That would appear to be the only game where control can be applied with success.

The long term ratio gold/oil ($per ounce/$ per bbl)is about 16 and only rarely has it dipped below 10 and then only for a matter of weeks. Today the ratio is 9.4. It's got to be an attractive swap trade for those who do those things. Returning to the long term ratio 16 would bring the following prices (gold/oil); 380/23.75, 400/25, 500/31.25, 600/37.50, 640/40.00, 800/50.00.

GoldiloxPOG/POO ratio under 10#1210255/12/04; 10:46:19

Interesting point. Is this the Saudis' reward for joining the jawboning effort? The oil producers have traditionally been Au-phillic.
GoldiloxMore POG/POO#1210265/12/04; 10:51:30

Extrpolating this idea, is it perhaps also the "reward" for BOJ and BOC for their cooperation in DX support?
misetichNYMEX gasoline hits all-time high on stocks drawdown#1210275/12/04; 10:54:23


NEW YORK (Reuters) - NYMEX gasoline futures soared to another all-time record high Wednesday after the U.S. government reported a drawdown in gasoline stocks last week, further raising fears of supply shortages with the peak summer driving season just weeks away.

NYMEX gasoline for June delivery <HUM4> hit $1.3480 a gallon, besting the previous record of $1.3420 struck only last Friday. Traders said buy stops were triggered as the contract hit $1.3420.

The U.S. Energy Information Administration said gasoline stocks declined 1.5 million barrels to 202.5 million barrels in the week to May 7. Demand shot up to 9.37 million barrels per day from 8.9 million bpd in the week to April 30, it added

The Feds Dream

The Feds aim is: Price stability - full employment

Achieved by:

Emergency IR
Control of LT Rates through Japan's foreing purchases
Fuelling Asset inflation - housing - corresponding refinancing - add consumer spending
Control the Dow by constant repo interventions
Control of gold/silver market through manipulations and interventions
Managing market perception

Thus far they've achieved a "passing grade"

However, looking forward, the future may not be so kind - as energy and commodities price increases - are a spoke in the wheels

The amount of ammnunition spend to get just a "passing grade" is of mammoth proportion - and now they're facing what is probably the most critical turning point -

The odds are stacked up against them imported energy prices prove to be a TOO formidable opponent - and the jobs lost after the "mild recession" are not coming back anytime soon -

All Aboard The Gold Bull Express - Part ll

GoldiloxSavings total#1210285/12/04; 11:07:07

OK, but when we talk "en toto", the value of real estate and other paper assets are often lumped in with this. It would be interesting to see a breakdown of where these savings are concentrated.

How much is in "hard" assets and how much is bubbliicous!

On a related topic, Rick Santelli just reported the latest bond auction was oversubscribed, so we are seeing money come into the US bond market from foreign sources, even without CB intervention.

misetichCommodity Prices Hit Record High In April, say BMO Financial Group Economists#1210295/12/04; 11:28:31


Commodity prices are now 26 per cent higher than a year ago when the Index stood at 124.4 (1993(equal sign)100).
Crude oil prices rose 0.8 per cent in April to a monthly average of US$36.87 and surged even higher in early May to US$40
Natural Gas prices continued to climb in April, a time when reduced demand for space heating usually takes the edge off the market
The Metals and Minerals Index slipped by just over 1.0 per cent in April to 140.2..............Still, the sizable gains since mid-2003 remained largely intact, with the index up by close to 36 per cent from a year ago
The Forest Products Index surged 7.1 per cent in April to 127.0 (1993(equal sign)100), elevated by price increases in all its major components
Agricultural prices slipped slightly by 0.5 per cent in April, to 107..............Nonetheless, the index stood 15.3 per cent higher than a year ago, as global markets continue to receive support from solid demand and shrinking grains and oilseed stocks.
Wheat advanced a slight 0.6 per cent in April, held back by weakness in oilseed markets ............although it remained close to 10 per cent higher than its level a year ago

The Feds goal is to achieve "price stability" - has failed miserably.

The "price inflation pipeline" is fully charged up -
An accomodative Fed is still maintaining emergency IR due to lack of job creation.

All Aboard The Gold Bull Express - Part ll

BoilermakerPOO/POG#1210305/12/04; 11:40:49

It is my understanding that Another linked the POO & POG as a condition for OPEC maintaining low oil prices in return for low gold prices maintained by Western CB's. Hence the ratio of POG/POO has been somewhat predictable with most of the major excursions coming from POG volatility over short term disruption or oversupply situations. The link shows the extreme volatility of oil since 1970. Gold has been much less volatile especially in the past 20 years.

Adam Hamilton wrote about this relationship two years ago at
I haven't found an updated version but one may be out there.

In the past OPEC (primarily Saudi Arabia) controlled the supply and price of oil by virtue of their extra capacity. Today there may be no extra capacity. This means the price of oil will become stronger and more stable even if gold is held lower. Now I suppose the West is only keeping a lid on gold to avoid currency and financial chaos.

All oil importing nations including Japan, China and Euro nations will feel the effects of higher POO but since their economies use proportionately much less oil they will actually gain a cost advantage vs. the US.

GoldiloxCurrency Chaos#1210315/12/04; 12:18:00

@ BM

But, of course, if gold is strictly a commodity, as touted by PTB, it has no effect on currency crises.

If gold is not in the underable dealings with BOJ, BOC, and SA, what is?

Why all the supression of price right when the Asians and Muslims are aquiring?

I have to look at least a few moves ahead of the FOX News answers.

Belgian@Socrates#1210325/12/04; 14:05:28

Thanks for responding. I follow the reasoning in your oulined Fib.-analysis.
Allow me to reflect on some points : The "teams" are massaging the POO wich is pressuring the dollar. In order to get the POO (the pressure) down...simply help the POO go up, faster and bigger ! A very old trick with a very high succes-rate (cfr. 1980 POG-ATH).
This maneuver is of course NOT going to take away the intended pressure with the POO on the dollar, not a candidate for refuge-currency, anymore.

Yes, we have management > manipulation > intervention and now financial war tactics. Maybe you (or others) had some time to watch (enjoy) the "intensive" (intra)market actions, today. Unbelievable but true.

Your Fib-approach is in principle not that much different than EW, Socrates !
The long term trend for the POG is UP ! The base-forming or the price launching platform has been constructed and the count down > take off, happened. Gold's trajectory has a (wave)pattern. That's how "impulses" behave.
Throw a stone into the air and its trajectory is function of the launching.

Gold is imvho launched in such a way that will reach very high. POG's wave III up is going to meet your Fib. attraction points/targets, of course. But after 1,618 comes 2,618 and on. EW theory helps in identifying if the POG trajectory goes in a recognizable pattern with the Fib. quantitative supports/resistances/attraction points and deceptive moves.

A decisive trend needs certain price moves (encouragements) as to provide (create) more or less liquidity. Normally this is a genuine market's job. Now we have the unofficial official " move-teams " that operate protective or provocative.

Enough dry theory and back to practice : Stick to the main trends and only buy the dramatic fear-dips, without ever chasing the artificial (exhaustive) runs. A winners strategy when emo is put aside and makes place for spartanic discipline. Always keep a core Physical Gold holding as ensurance against the colossal break-away gap, wich I personally still do expect. Make a print out of Socrates' Fib-map and consult it around the mentionned attraction points and their tolerances.

We might be close to the start (timing) of POG's wave III-up and this impulse might most probably be another 5 wave affair, wich is (will be) easy or difficult to recognize and label correctly. The ongoing (finished-?) correction down ($428-$370) looks like an ordinarry ABC pattern ?

At the end, there will be so much ammunition needed by the intervention teams, that they will start losing their battle(s) against those opposants that are behind certain trend-forcing actions. Real, not fictional Financial war-games !

Good luck to all of you and this is all in the FWIW (amusement) sphere and certainly NOT, FIA !

TownCrierClosing market rap, plus round-the-clock newswire#1210335/12/04; 14:05:59 Mixture of excerpts:

COMEX gold and silver futures rose Wednesday, but ended well below their highs, as concern about U.S. international trade competitiveness weakened the dollar and lifted precious metals...

The U.S. stock market also dropped after the Commerce Department said the March trade deficit widened to $46.0 billion from $42.1 billion in February....

"It might take a push above $390 to re-ignite the fund buying again, but it will come back." However, there remained no sign of such a return by late Wednesday, which prompted a round of disappointed end-of-day liquidation among shorter-term players that dented June prices severely from around $381.50 to $371.50 within the closing 30 minutes of play. Consequently, June settled just above intraday lows at $377.70 and nearly $7 below the day's high.

misetichOil prices crimp profits for U.S. carpet industry#1210345/12/04; 14:06:07


The price of oil, a key component in modern carpet making, has jumped so fast that manufacturers are absorbing added costs until their own price increases kick-in.

"Raw material costs are rising faster than these companies can pass them through to customers," said analyst Laura Champine of Morgan Keegan

High oil prices are creating havoc throughout the US economy- 40% of which is interlinked with oil - Japan's economy is at 60% and China at 25%, EU between 25-40%

"Oil Shock and Awe 2004"

All Aboard The Gold Bull Express - Part ll

Belgian@Goldilox#1210355/12/04; 14:28:00

Belgium's yearly GDP = 100 > All Belgian's savings total amount is 250.

Right you are Sir in bringing the POG/POO ($378 : $40,75 = 9,28) less than 10, back to the forum's attention !
That's why I've been repeating...the old trick : In order to get "pressuring" price-building down, force the price (co-operatively through derivative paper-enforcement) way up as to break the string. That's how many natural market price trends are broken/altered. As I remain personally convinced that we have less and less real, natural, "market"-content in this whole increasingly artificial financial quagmire.

These markets are way over-liquidifyed by hyper-concentrated forces. This happened before ! This is the one and only reason of the existance (and tolerance) of the exhuberant derivative debauche. Don't get paperized, Sir.

Federal_ReservesBS in Taxi Driving......#1210365/12/04; 14:45:11

Today, nearly 16 percent of America's taxi drivers have attended college. That's up from 13 percent in 2000....
imagine popping into a cab and learning about accounting,
engineering, math, history, entire
educational system housed in yellow cabs.....

In the last three years, long-term unemployment among college-educated workers increased by 300 percent. Federal labor statistics show that between 2000 and 2003, a growing number of college grads took jobs as cashiers, retail clerks, and receptionists.

So next time you take that cab ride from the airport to your hotel, or buy something at the local retailer don't forget to ask : "When did you graduate?".

BoilermakerMBA in Pedicab Operations?#1210375/12/04; 14:58:52

How many MBA's does it take to operate an alternative-energy cab company?
I can see it now. Suntanned and sweating MBA's lined up at Lagardia waiting for fares.

Camel Solar electricity#1210385/12/04; 15:34:36

Greetings GAB

You might be right about solar generated electricity , but solar water heating 'space heating, and air conditioning are all cost effective at todays prices of natural gas and this accounts for well over half of normal house energy consumption.

The air conditioning units run on the principle of the old propane refrigerators. Fire at the bottom ,ice cubes at the top, except the summer sun provides the fire.

There is also a large scale electric plant being built in Australia using a new variation of solar power . This involves the construction of a chimney twice the height of the World Trade Center Tower'so tall it can makes use of the temperature differentials at the top and bottom of the tower to create an air flow that can turn a turbine producing about 200 megawatts.

I have no doubt that this country could cut its energy use in half without batting an eye and it would be highly economically stimulative. Only trouble is there might still be a bit of a problem about where to get the other half.

misetichU.S. Posts April Budget Surplus#1210395/12/04; 15:40:57


For the first seven months of the budget year, the government had an accumulated deficit of $281.85 billion, almost $80 billion larger than at the same point last year. The final 2003 deficit of $374.25 billion was a record.

Wall Street economists had been projecting a $23 billion surplus for April, while the nonpartisan Congressional Budget Office (news - web sites) had estimated a $15 billion surplus.
April is a key month for the federal budget picture. Individual income taxes were the single largest source of all federal revenues in fiscal 2003, making up 45 percent. By monitoring tax flows leading up to the April 15 tax filing deadline, analysts gauge whether receipts are matching their forecasts
"Outlays to date are consistent with CBO's expectations, but revenues are running $30 billion to $40 billion higher than anticipated," the agency said.

Through April, federal outlays totaled $1.352 trillion, a 7.5 percent increase over the same period last year. Income was also up, but not as much. Receipts totaled $1.070 trillion, up 1.3 percent over the first seven months of fiscal 2003.
The CBO had projected a $477 billion gap but earlier this month said it will revise its forecast downward.


"Good news" is budget deficit is closer to $400 billion than the estimated $477 - thus "better than expectations"

The spin continues unabated...yet things keep on getting worse...

All Aboard The Gold Bull Express - Part ll

GoldiloxGold Stocks Threaten the Financial Order#12104005/12/04; 16:45:47


But now, thanks to the combined effect of the Rothschild, Bank of France, ECB and Fed announcements of recent weeks, gold is down, and so are its mining stocks. The alternative is gone - for now. As long as money stays in cash, it at least stays "in the system." Allowing gold stocks to look profitable during such times, on the other hand, would have been a sure-fire recipe for disaster in the eyes of the financial order.

And then, of course, you still have the "rats leaving the ship" phenomenon. What better opportunity for those who are cash-rich and well connected enough to know what the bell is tolling to get out of cash and into physical gold than a time during which the "plebs" are moving out of gold and into cash? If you are one of those elite types, what better way to make sure that you will always keep the upper hand in matters economic than to cause a selling panic so you can load up on that yellow stuff at bargain basement prices? Witness the Rothschild announcement and its effect.

Combine all of these, and you know why gold had to be beaten down.

Does that change anything about either gold's or the current dollar-system's long-term outlook? Not at all.

As severe and punishing as this latest gold correction appears to be, it is still part of the world-wide policy of "managing" a slow, continuously rising gold price. The powers' current "attack" on gold was simply a result of their realization that we are witnessing the end of a year-long stock bull run, and are possibly facing an outright equities-crash. The long-term policy of allowing gold to slowly rise must in the short term give way to making sure that stocks don't fall too fast in order to avoid a looming equities implosion.

There is no way that gold will stay down for any length of time while Atlas is wobbling under his load in this way. With the one-two punch of rising rates and rising prices, and only fictitious jobs gains to cushion those blows, the US economy just doesn't have that many options open when Atlas finally quits.


Walenwein's latest analysis of the "down draft" in the markets.

R PowellSlingshot#12104105/12/04; 17:48:04

Your words...

"Sooner or later we will find ourselves at the Jump Seat ready to parachute out in a free fall to experience a rush of fulfillment. When to make the jump will be different for us all. I have to smile when I think it was R Powell discussed the fun of a quad vehicle and $3000.00 gold. Could I purchase that right now? You Bet!"

I'm afraid you have me confused with another. I'd love to see gold priced at $3000. if it could happen in an orderly fashion (doubtful?) but I don't now nor have I ever longed for a fancy vehicle, four wheel or no. I drive an old Dodge which suits me just fine. It has a radio and heater (not all my trucks had such luxuries) and runs fine.
Maybe this is a reference to some comments I may have made about the Texas Federal Bank's McTeer (sp?) who stated of some years ago, that the economy would be just fine if only everyone would buy a new vehicle.
Myself, I think the economy would do better if more people worked at producing food, clothing, shelter and the other necessities of life and fewer people were overpaid to restrict and regulate those of us who do work. Just one opinion, as always.

Chris PowellSilver Standard to hold reserves in silver#12104205/12/04; 18:52:06

Silver Standard announces that it will put cash
reserves into physical silver, heeding GATA
consultant Ted Butler.

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

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Aristotlemsg#: 121040#12104305/12/04; 19:17:35

Warning: My post is all fluff and no stuff.

Reading that post, I guess this makes puny old Gold-buying *me* one of the "rats" leaving the ship. But for that matter, what kind of *ship* is it that I'm leaving... a GHOST ship?????? Big deal.

True to my word earlier this week, this is no time to be gawking from the sidelines. I've finished paying off the latest round of bills, smiled briefly at the tidy sum left over, mulled over an investment idea or two (ultimately rejecting them both,) and then phoned in the latest order for my GSP (Gold Savings Plan) within the past day, glad of the price. Sure, there's no guarantees that I couldn't have landed a better price tomorrow had I waited to see what Thursday would bring, but then there's also no guarantees that my idle dollars would have gotten stronger, either. Why would they? Among other things, the latest producer price data probably won't give the dollar much cause for celebration.

I'd also like to point out one of my favorite axioms: that the bird in the hand cooks up a lot better than those speculative two in the bush. Going with the sure thing is an unbeatable recipe for eating well all the days of your life. While some other guys might try to upgrade their standard of eating with two open-handed gropings for an arm-load of pigeons, I'd recommend they consider staying with the one-sure-bird strategy and work intelligently toward upgrading that daily pigeon to a chicken, goose, or turkey.

If the pioneers and frontiersmen could make a go of it, so can you. They put in more work each day than most of us would care to imagine, but basically, whatever they didn't consume became an incremental addition to their tangible wealth out there in the uncerrtain wilderness.

Modern, easy access to information about the Wall Street Casino may change the details of your end-of-day decisions, however, it should *NOT* materially divert you from the fundamental wealth-building drive of daily life. Find that core of your life that's real and keep it real, from each day to the next, and suddenly you may find yourself closer to that elusive "meaning" we're all always supposedly looking for. Adopt any belief system you'd like, but the truth of the matter is you can't build your tower to the sky if your foundation is all haphazard and dodgy.

Now, wasn't this a nice break from the focus on bleak economic scenarios that so many Goldbugs are notorious for fixating upon?

May peace and happiness come your way -- whether you want it or not!

Gold. Get you some. --- Aristotle

NedTrade deficit#12104405/12/04; 19:38:09

Did I see that correctly...a new record for March.....$46 billion up 9.1%. Dollar inches up a hair and the trade balance goes non-linear. Dollar is still grossly overvalued.


Go for the Real McCoy....physical gold.

Goldendome(No Subject)#12104505/12/04; 21:11:15

Ari: Nicely stated! You seem at peace tonight.
Belgian* THANK * you, Ari !#12104605/13/04; 00:06:03

Nice reading for starting a nice, harmonious day. A simple "happy" day indeed.
AristotleSometimes we just need a simple reminder of the simple wealth alternative#12104705/13/04; 02:17:00

Otherwise, we can tend to let our perspectives get a bit too skewed by the single-track invest! *invest!* INVEST!! juggernaut of the mainstream financial media. "Make your money *work* for you!"

Warning to the investment-minded reader: this is yet another post in which you'll find all fluff and no stuff.

I think people in general must tend toward optimism. The stock and bond markets have always been around, but only in the past 20 years with all the instant information of the financial cable networks and the internet at our fingertips did masses commit to speculative investments on such a grand scale.

I say they're optimistic because, at the end of the day when they have an opportunity to scan all the information with 20/20 hindsight, they tend only to see and remember the day's few *opportunities* (missed like needles in the haystack, which they then proceed to chase the next day,) rather than seeing the pockets of *disaster* (which they averted simply by being clear of the area -- maybe by design but more likely by mere chance.)

As Belgian reminded us so wisely yesterday, it only takes one single major occurrence of getting it wrong to destroy an entire lifetime of getting it right.

As optimists, we just don't seem to be duly Cautioned by the disasters of other nations' currency crises, or by other people's bankruptcies, as we are, conversely, Encouraged by the lure of the easy buck that always looks so attainable -- especially when most of us are only getting to see or read old, past-actionable news! (Is there any such thing as a *current* event in the investment world?)

As a population, all of this information together with our eternal optimism has emboldened many of us to wade in where a more rational interpretation of the data would surely make us fear to tread with our very live(lihood)s.

Unfortunately, these gloriously optimistic people seem predispos(sess)ed [my best CB2ism] to boldly risk/gamble their fortunes day by day toward that one single devastating mistake.

If these people could only grasp the concept the wealth -- of chips taken permanently off the table, a spare shirt, and a ticket home -- they'd be in much more secure positions. But instead, through optimism and/or financial media indoctrination, they've mostly been led to believe that it's in their best interest to put their money to work for them.

"Make your money work for YOU!" Hell, that's just a fancy way of saying, ultimately, to let some other fool try his hand at trading your money in and out of the peril of his own optimistic vices until the arrival of his own wrong-footed day of reckoning; returning to you no chips, no shirt, no ticket home.

Maybe my views are quaint, but I don't see a problem with the scenario where I work hard so my money doesn't *have* to. Out of a lifetime of boooooooring old productive earnings I've accumulated "chips" that have never seen the topside of the gaming tables, and yet despite that "transgression" against the social norms of the day I've got a whole wardrobe of shirts suitable for most any occasion, and transportation to anywhere I wanna be. That's WEALTH, baby. Not the talking of it, the planning for it, or the wishing upon it. It's the HAVING of it; rod, reel, and fish IN the boat.

"Nothing *ventured*, nothing gained" they say??? Hooey to that. "Nothing *gotten*, nothing gained" is what I say... including all the meals you've enjoyed along the way.

Gold. Get you some. --- Aristotle

Black BladePrecious Metals Fire Sale#12104805/13/04; 02:27:14

I would suspect that prices will remain at this low level for a few days until expiry and then they should bounce higher (though they could even decline slightly but no one can "time" the market). The weak hands are shaking out and with the US dollar on the decline along with a record current account deficit last month, soaring budget deficit (in spite of some GAO shell game shuffling, and spin - After all it's an election year), and an announcement a few days ago that Japan was laying off buying US bonds next month (though I don't really believe that as the country is literally bankrupt and the Yen is a mere joke as a currency). The currency doesn't even exist as far as realists are concerned. Unlike old times the money managers no longer have any honor (of course merchants were among the lowest cast than farmers and especially Sumarai at the top) - amazing what lack of honor they have learned from us Americans. No more taking of personal responsibility for their dishonesty (like those managers at the TOCOM) and no more Sepeku.

Anyway, take advantage of the low prices while you can, even if that means a steady pace of "dollar cost averaging". Even though the summer months (until mid to late August are generally slow for PMs), the pace of "real inflation" (not the imagined "low inflation" of the Washington DC Carpetbaggers, and hiding behind "off the books" debt) is rising at a torrid pace while real wages and purchasing power of Americans are on the decline.

- Black Blade

BelgianAri....#12104905/13/04; 04:36:57

Nice to read "it", again...with such spearpoint sharpness and accuracy. Enjoyed it...and it is still a "première" !
All this will/shall sink in for the general public.

Story of the day...high/higher POO ($40,80)... AND...the dollar showing manifest signs of strength (+ 0,65%).
Beware for deceptive tactics ! Profit from it, correctly, wisely.

SpartacusDollar rises to day's high after Saudi euro remark#12105005/13/04; 04:39:32

LONDON, May 13 (Reuters) --- The dollar climbed to the day's highs on the euro and gained on the yen and other majors on Thursday after the vice central bank governor of Saudi Arabia said the euro was still not fully competitive as a reserve currency.

Muhammad Al-Jasser, vice governor of the Saudi Arabian Monetary Agency, told Reuters in an interview published on Thursday that Saudi Arabia still regarded the dollar as having the edge over the euro as top reserve currency.

"The euro has not yet gained a competitive status against the dollar as a major reserve currency. People are not going to switch to euros until European financial markets become more competitive, deeper, more liquid and diversified," he said. ---

GoldiloxSaudi Announcement#1210515/13/04; 08:07:12

Gee, I wonder who typed his script?

Mr. Goldfinger?

misetichU.S. April PPI rises 0.7%#1210525/13/04; 08:13:19


The Producer Price Index for Finished Goods advanced 0.7 percent in April, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This increase followed a 0.5-percent rise in March and a 0.1-percent gain in February. April prices for finished goods other than foods and energy went up 0.2 percent, the same rate of increase as in the previous month. At the earlier stages of processing, the intermediate goods index climbed 1.4 percent, compared with a 0.7-percent gain in March. Prices received by manufacturers of crude
goods rose 3.0 percent, after advancing 0.7 percent in the preceding month.(See table A.)

Ugly new on all fronts on the US economy - PPI leads the list Retail sales dropped 0.5 percent in April, jobless claims increased, etc etc

Some of us have maintained the US economy is not as strong as being reported - actually its quite fragile-
There's no wage pressure, hours worked per week are diminishing, capacity utilization is still around 76%, consumer spending is declining, if retail sales is any indication
Price inflation is roaring ahead. The Fed HOPE is continued strength in corporate eanings and corporate spending and henceforth increased hirings.

It remains to be seen how the "stronger US $" will affect corporate earnings and exports and how commodities and energy prices in the pipeline affect corporate earnings. The odds favor a NEGATIVE IMPACT! thus pressure on the Stock Market.

All Aboard The Gold Bull Express - Part ll

MKSir Boilermaker: 10% to 30%#1210535/13/04; 08:13:58

About a week or so ago you asked a question about my standard recommendation of a 10% to 30% gold diversification for most investors. You registered a concern about 50% of your portfolio being in gold and whether or not you should pare that down. You ask a very good and fair question which deserves a response.

I'll start out by saying that this is our "standard" recommendation and that it is not meant to be rigidly applied in all circumstances for all time. We have many clients who have exceeded those limitations but not at the prompting of me or any of the other brokers here at USAGOLD-Centennial Precious Metals. The reason for this is that we believe to exceed those limitations is a personal decision on the part of the client who knows full well why he or she has gone over the recommended limit. In other words, these individuals are acting from a belief or analysis of the current economic/financial situation which justifies the stronger commitment.

From my experience working directly with gold owners for a long time, those who make the stronger commitment usually driven by three motivators. Sometimes, only one of these is enough, but usually it is the three together:

1. A belief that the current international monetary system is condemned to complete failure -- a total systemic breakdown. The question is not "if" but "when." The paper currencies that fuel the system, and the prime currency at the heart of that system, are doomed to constant depreciation that cannot be reversed. At some point, that process could spin out of control. It is the system at fault, and it doesn't matter who's at the helm, the inherent flaws make these currencies poor savings instruments, if not outright certificates of wealth confiscation. That failure could manifest itself through a cataclysmic failure, or a slow eroding of purchasing power over many years period of time -- either way gold, the one asset which is not simultaneously another's liability remains the best defense. Gold, in this instance, becomes a preferable savings instrument to the national issued currency -- a personal decision that only the saver can make.

2. Some investors look at the menu of available investment alternatives and see gold as the only solid alternative. At a time when fixed returns are producing capital at a rate of 1% or less a year, when the ailing stock market still looks overvalued (it took 16 years for the last stock market bear to resolve itself), and the bond market appears poised for a major interest rate driven fall, some well-heeled investors have made the personal decision that gold is simply the best of the major investment market alternatives, and worth a stronger commitment that the recommended 10% to 30%. I know investors who started buying gold in substantial quantity from $260 on up. Most of these are still buying it now. With the type of returns gold has produced since September, 1999, who can say that these investors have made the wrong choice? At the same time, and once again, this is a personal decision that these investors have made on their own based on their understanding of the current situation. They do not need the word from me or any other advisor to proceed with their plan.

3. Some gold investors, hatched from the Ayn Rand mold (whether they recognize it or not) have a determined confidence in their own abilities to provide the good life for themselves and family, and a decided lack of confidence in the society in general and the government in particular to do the same. That lack of confidence translates to socially engineered currencies and markets as well. In fact these people feel something of an aversion for the crowd - the social mass (the polar opposite of the individual) which believes that the government is there to take care of them, and that the government will make sure that all turns out well. (The group that both Kerry and Bush court daily with their promises.) These pillars of rugged individualism save gold as a personal anthem, testament and lucre to their own ability. You find this type of person quite often among business owners, professional practitioners and surprisingly among the trades -- those who believe that their ability to earn, save and invest money should not be compromised by any other individual or institution. Gold in this instance becomes a symbol and instrument of personal freedom and how can you put a limitation on the number of ounces owned in such an instance? It would be akin to putting a limit on how much money a person should save or on the application of hard work and talent that make the wealth possible.

Overall, I would make the final point that gold is not an investment item in the first instance* but a form of savings separate from the social and economic milieu governed by powers and a systemic fate beyond our personal control. If gold were not the chosen talisman against economic failure, it would be necessary for us to invent a commonly accepted alternative.

My emphasis on a 10% to 30% gold diversification is not directed at those who own over that limit -- because those over it have acted on their own and know precisely why they are doing it -- but at the opposite end of the pole, those who own no gold at all.

*I have recently upgraded my view of gold from simply a vehicle for asset preservation to one from which we can expect to garner returns above and beyond value mirrored in currency depreciation. I now see it as a wealth builder as well as a wealth preserver, though the emphasis remains on asset preservation. The reasons for this change are treated in detail in the upcoming new version of The ABCs of Gold Investing.

misetichReality Check Scoreboard#1210545/13/04; 08:36:53

The Federal Reserve goals are: price stability and full employment and a third unpublished to avoid financial system disruption

In order to achieve those goals the Fed has undertaken and implemented various strategems to achieve them

Reality Check Scoreboard

Price Stability

The Fed is clearly losing on this one - primarily due to energy, commodities, imports and price inflation in the service industry,

Full Employment

The Fed is clearly losing on this one as millions of lost jobs in the mild recession have not recovered and more importantly the Feds have failed in the job creation attempts, burning up quite a bit of their ammunition toward this effort. The proverbial pushing on a string is alive and well as slack capacity is still abound.

Avoid Financial Disruption

Here the Feds are "winning" as:

They have maintained control of the SM, Bond Market, currency market, and the gold market

The Feds challenge/obstacles: The triple threat: Current Account, Trade Deficit, Budget Deficit,

Derivative market
Housing market
Stock Market
Bond Market
Gold Market
Currency Market

Going forward

It doesn't look likely the Feds will succeed in maintaining price stability as price inflation is soaring

..and genuine job creation will be negligible as soaring price inflation and increased overhead costs, with slowing consumer spending due to reduction in refinancing, increased IR, and end of tax refunds

which brings us to the Avoidance of financial system disruption

Whilst the Fed has maintained a winning hand - its strengths have been reduced significantly.

A sudden rise in IR whether by the Fed or Bond vigilantes (if still alive) will create havoc

Continuation of rising oil, energy, commodities prices are the main stumbling block - and are the MOST THREATNING - as it affects all of the Feds goals.

The Feds have successufully managed investors perception - however - more and more of the flock is being lost as the Feds loses its creditability regardless of the spin

"the no inflation, strong economy, job being created, deficit don't matter" is clearly losing momentum as reality overwhelms the remaining flock.

The RISKS of financial disruption ARE INCREASING DAILY as deficits increase, debt levels increase, trade and current account increase AND the most alarming ASSET WEALTH (stock market, bond market) DEFLATES

GOLD - PHYSICAL GOLD will respond in accordance with the upcoming potential crisis.

All Aboard The Gold Bull Express - Part ll

GoldiloxFannie balance sheet takes another hit#1210555/13/04; 09:20:16


Fannie Mae's balance sheet took another large hit in the first quarter, according to data contained in a hotly anticipated financial filing released Monday.

The government-sponsored mortgage giant suffered more than $4 billion of losses on one of its derivatives portfolios, according to the filing. The losses further weaken Fannie's financial standing and raise serious questions about the ability of the company's senior management to deal with movements in interest rates.

Under the leadership of CEO Franklin Raines, Fannie has shown a pattern of taking multibillion-dollar losses on its balance sheet because it hasn't adequately protected itself against swings in interest rates. The losses show up on the balance sheet all at once, but get bled into earnings over time.

The first-quarter losses come at a time of heightened vulnerability for Fannie, which has just under $1 trillion of assets on its balance sheet and provides huge support to the U.S. housing market through its mortgage purchases. Fannie's accounting is currently coming under fire from its regulator, the Office of Federal Housing Enterprise Oversight (OFHEO). At the same time, politicians in Congress and in the White House are gunning to tighten regulation of Fannie and its rival Freddie Mac(FRE, news, msgs), which suffered its own big accounting scandal last year.

Fannie's Washington critics believe that the company, exploiting its government-granted advantages, has pursued profits growth at the expense of balance sheet soundness.


More trouble on the mortgage front

mikalGovernment releases tomorrow#1210565/13/04; 10:07:17

May 14 08:30 Business Inventories- March
May 14 08:30 CPI- April
May 14 08:30 Core CPI- April
May 14 09:15 Industrial Production- April
May 14 09:15 Capacity Utilization- April
May 14 09:45 Michigan Sentiment Survey- Preliminary
I guess tomorrow is also metals Comex options expiration?

GoldiloxNumbers releases#1210575/13/04; 10:44:12

@ Mikal:

Wow, they better hope there is not another Hollywood script writers' strike.

OvSA word to Aristotle, from his mentor Plato.#1210585/13/04; 12:20:47

Dear Ari:

Well now, don't you have a way alienating
some of our knights.
I grant you, Rick Powell did get a bit more
outspoken about paper-trading as his fortunes
increased playing the game. Having read many
of his comments I was not aware of his lean-
ings toward paper-gold myself, until the more
recent past. But I can sympathize with his
approach: Have a core physical; trade with
a certain amount of your money in PM stocks;
when profitable, invest a certain amount of
the profit in buying more physical. He did
well for a while but I'm sure, he was aware
of the risk involved. So what? Americans are
known to be more risk oriented then, for ex-
ample the more settled old-world-fellows.
But, as you seem to advocate, surethings...
a pidgeon in hand is... runs counter to your
own "doings"; didn't you say in the same
breath that you ...mulled over an investment
idea or two (ultimately rejecting them both)?
While in another portion of your msg. you
said that you work hard so your investments
(precious metals) don't have to?
Although "most" of my investments are in PM's
I too play the papergame (with 10%); and al-
though I admire J.E.Sinclair, I differ from
him, in being in awe of our government's colossus
financial manipulation abilities, and so are the
rest of the world's governments.
So I make a few dollars and run for the hills.
The hell with waiting for the channels to reverse.
Thus I only made pocket-money, but averted the
few huge drops that killed many a would be player.
There must be a reason why the staid old European
artistocrats and upper cast Jewish class have at
least 10% in gold. But what do they do with the
rest of their assets? Also, I'm certain, that 10%
expands according to the general financial back-
ground condition.
Well, Ari, I'm doing this on the fly...if I have
missed some of your intentions, let me know. Yes,
you can insult me a little, but if it gets a bit
too hot, I'll just skip over it...Cheers...OvS

GoldiloxPut volume#1210595/13/04; 12:42:06

CNBC just reported record put volume in QQQ's. Hedge funds are placing big bets on the market continuing down.
GoldiloxAnother Double Whammy#1210605/13/04; 12:48:07


Retail Prices and Wholesale prices are both going the wrong way. A short summary at among other things that retail prices were up an more than an 8.5% annual rate, but then they spin things by taking out food and energy to come up with a more Bush-friendly 0.2% monthly rise in prices. Of course, being residents of the real world, you already know that living without food or energy is sort of like saying life is a lot less work if you don't breathe..


Kinda makes one wonder what TPTB call "living"?

GoldiloxGandhi-Led Opposition Wins India Election#1210615/13/04; 12:57:12


Gandhi-Led Opposition Wins India Election
By BETH DUFF-BROWN, Associated Press Writer

NEW DELHI - The Gandhi political dynasty prepared for a return to power Thursday after a stunning election victory fueled by anger among millions of rural poor left behind by India's economic boom.

Prime Minister Atal Bihari Vajpayee resigned Thursday night, leaving Sonia Gandhi, the Italian-born widow of former Prime Minister Rajiv Gandhi, to take the helm of the world's largest democracy in one of the most dramatic political upsets since Indian independence nearly 60 years ago.

Gandhi immediately distanced herself from the Hindu nationalism of the outgoing government.

"We will take the lead ensure our country has strong, stable and secular government," she told a news conference.

Gandhi, who spoke in English and Hindi, shied away from saying whether she would become the next prime minister, offering only that it would be up to alliance leaders and the decision would be made Saturday.

Her Congress party, its allies and leftist parties collected 278 Parliament seats, a majority of the national legislature and enough to form a new Indian government, an official vote tally showed late Thursday.

Vajpayee, who quit Thursday night, had campaigned on the country's 8 percent growth rate, increased development and surge in high-tech industries. But his decision to call the election six months early was a devastating miscalculation.


With the tremendous growth in India limited to a few big cities, populism is rising in the rural areas, which contain millions of folks yet unaided by the bubble.

GoldiloxDeja-who?#1210625/13/04; 12:59:57

Maria Bartiromo is ringing the closing bell at the NYSE today. See how much fame she received from our little essay contest last year!!!
USAGOLD / Centennial Precious Metals, Inc.Your friend in the business, helping you enter the gold market with grace and confidence.#1210635/13/04; 13:00:13">Change paper into gold!
GoldiloxBoJ chief warns against using forex to fix global economic imbalances#1210645/13/04; 13:10:18


TOKYO (AFP) - Japan's central bank chief warned against using only currency rates to correct global economic imbalances, arguing the solution was for Asia and Europe to gain strength to match the United States.

"An underlying big problem in foreign exchange rates is global imbalances," Bank of Japan governor Toshihiko Fukui said.

Fukui said in a speech here the dollar would be chronically weak if the lopsided balances in trade, investment, income and other economic factors were left unaddressed.

He was referring to the large-scale US trade and current account deficit, which at times triggers dollar selloffs on fears the rest of the world would not be able to finance such an imbalance.


What's this? The pot calling the kettle black?

The jawboning seems to be exhibiting some capitulation in their messages.

TopazGroundhog Day economic cycles.#1210655/13/04; 13:27:32

Whilst fully "invested" in Au Bullion, (a contradiction in itself) the contrarian in me feels there is a golden opportunity presenting itself in the form of PaperGold at present ... but for REAL action, the place to be, it would seem RIGHT NOW, is Long Treasury futures.

Lets give 'em once more around the Mulberry bush Ari.

misetichReality Check: U.S. Rental Market Weak But Brokers More Hopeful #1210665/13/04; 14:09:26


NEW YORK (MktNews) - The nation's rental market remains
depressed, stifled by low mortgage rates that have triggered a frenzy of
home buying, but hopes are emerging that a rebound will occur when
higher rates take some of the luster out of homeownership, brokers say.

The Feds keep on repeating the 'strong economy mantra' and 'employment is rising' yet anectodal reports indicate otherwise

Students are having a difficult time finding summer jobs
Rentals (housing) is soft
Labor wages - not rising
Hours worked - declining
Commercial real estate - still depressed
Employment in mfg industry - millions of lost jobs- no significant rebound
Retail sales - poor April performance
Auto indusry - poor April performance

On the other side of the coin

Energy prices rocketing
Commodities prices rocketing
Trade deficits soaring
Budget deficit soaring
Housing market - in bubble territory
Stock Markets heading down
Bonds on the bubble
Wholesale inventory prices are rising
Capacity utilization is still low

On the "positive side"

Good corporate earnings
Moderate corporate spending

Thus the Feds are "betting the farm" on corporate spending, consumer spending, corporate earnings growth - = JOB CREATION

IR increases are negative consumer spending, negative corporate earnings

Higher energy prices are negative consumer spending, negative corporate earnings

The old adage "don't bet against the Feds" is true in MOST cases - however it looks more and more that its "The Feds fighting the market"

Who has the most power? A weakened Fed vs a fundamentals driven market?

All Aboard The Gold Bull Express - Part ll

BelgianThanks Spartacus....#1210675/13/04; 14:24:21

And thanks Reuters for this wonderfull communiqué ! I don't care and it doesn't matter at all who has been composing/sending it ! The content speaks for itself and simply confirms what is really going on. The article is of such a nature that it is even awakening sleeping dogs, because sooooo muchhhhhhhh (if not everything) is suggested in the negation.

All : Watch the POG-chart + fib.-retracements ('99-'04), at ! Valuable stuff (help) for your plannings.
Also read those very short two lines of Gold comments !!!
The accompagning $/yen chart and highly probable projection adds substance to the site's positive Gold view. In such a context I adore the nature of the Reuters communiqué...and especially its timing at Another fib.-retracement attraction target on the POG's ascend.

POO=$41,16 >>> $-POG : $-POO = 9 !!! A rare, exhuberant low in the past 3 decades of oil and Gold relationship.
The other 3 lows ('85-'90-'99/'00)(dollar ATH an 2 ME wars) indicate that we most probably arrived at another dramatic turning point. POO down against POG up seems the most plausable outcome to me ? Or will the POG rise much more than the rise (consolidation) of the POO ? The third remaining outcome where Gold goes down and POO up, seems almost unsustainable (impossible) to me.

This Gold divided by Crude (extreme) figure is indeed a serious fundamental indication ! The spin-machine is already "relativating" the oil-matters, full steam ahead. Thanks again Goldilox for having brought it up.

TownCrierCommuniqué of the Banco de Portugal on operation carried out in the context of the "Central Bank Gold Agreement"#1210685/13/04; 14:34:09

Banco de Portugal informs that, in the last few months, 35 tons of its gold reserves were sold, with settlement in May. Similarly to the operations of 2003, the objective of these sales was to continue the diversification of the external reserves. The realized gains will be added to the existing special reserve of Banco de Portugal. The sales were carried out in the context of the "Central Bank Gold Agreement" of 26 September 1999.

Lisboa, 13 May 2004

-----------(from press release at url)--------

Was this in any way a contributing factor to today's softness in the gold price? If so, it would seem that the gold bears are like MacGyver, and can turn any bits of odds and ends into a device to work their will. After all, this announcement not only reportedly confirms "ancient" news elements that were in place via the 1999 Agreement, but more to the point, it also has the "done deal" element in which this gold had already been committed to willing buyers during previous months, and this announcement merely marks the final settlement of the arrangements.

At this point, I can't resist a little whimsical smithing with the peculiar wording.

I would like to contrast two phrases:

Banco de Portugal informs that...

1) "...35 tons of ITS gold reserves were sold..."; and

2) "...the objective of these sales was to continue the diversification of THE external reserves."

I'm no grammarian, but it strikes me as odd that they would use the possessive sense when referring to the gold which was sold, whereas the stated objective was the diversification of external reserves which were stated only in the generic, unaffiliated status using the word "the" rather than "its" again.

OK. I'll take the hook and ask the question it begs: The objective is the diversification of WHOSE external assets? The 10 new post-EU-accession countries? China? Another?

Either way this is fine with me. The thinner gold reserves get spread around, the more valuable it all becomes on a per ounce basis.


mikal@misetich#1210695/13/04; 14:42:32

Just a few things to add to your fine list of positives and negatives in the economy.
Inflation overall, not just energy prices and higher interest costs, bears down on consumer and corporate spending. Also, lack of savings and record debt levels.

Record derivatives feature the exponential debasement of the dollar unit, unsustainable economic predation and exploitation of bond investors, and inadequate transparency in accounting, public and private.
Corporate earnings now come via proforma accounting, not european standards and generally accepted accounting practices(GAAP). Underestimating and hiding losses, costs and depreciation and overstating revenue, profit, and health foreign and domestic endurance and the economy's health. The government parallels this practice but with the power of defining the terms used to report it's own performance and to change or withhold data at will.
"Risks" that Fed governors and IMF and BIS officials, foreign and domestic treasury and banking officials warn of, remain.

GoldiloxCommodity of the Day#1210705/13/04; 14:46:03

With gasoline up another $0.025 today, gold was named commodity of the day on "The Closing Bell".

"Gold is trading down on the strength of the dollar, with interest rates the driving force."


The "good news" spinsters would rather focus on gold's decline than the ferocious rise in gasoline prices. Fewer viewers to offend, methinks.

Socrates964Goldilox#1210715/13/04; 14:53:47

Well, I suppose that if Snow sees the dollar collapse and then claims that he has no intention of wavering from the strong dollar policy, then Fukui can see the Yen fall nearly 10% in short order and claim that he is worried about a weak dollar. War is Peace. Ignorance is Strength

I must nevertheless confess to being somewhat baffled by the fact that this fall in the Yen is occurring:
-At a time when the media claims that Japan is no longer buying US debt.
-At a time when oil imports in Yen must be going through the roof.

And furthermore, the media is ignoring it. Sir Alan can't be pleased and yet...silence. Any thoughts?

Belgian - you're right, I should take a 'EW for dummies' course. Agree with your conclusions, btw.

BoilermakerMK message 121053#1210725/13/04; 14:58:09

Many thanks for the straightforward reply. I see myself primarily motivated by your #1 and to a lesser extent by 2 and 3.

My "portfolio" also includes farm and forest land and oil & gas production. The O&G investment is for current income and the PM's and land are for long term safekeeping of hard won savings. This is a defensive portfolio for what I think are defensive times.
My first gold stock purchase was Barrick in 1979 and my first physical gold purchase was in December 1987 at $512/oz. Ironically, Barrick did very well even though gold was weak through those years (although I didn't realize at the time that it was a proxy for a gold short). PM's have become a significant part of my holdings over the past seven years as it has become abundantly clear that the US $ is on an irreversible trail to oblivion.

My thanks to you and CPM for providing a beacon of light to guide us on the hazardous trail.

GoldiloxA stunning defeat for Vajpayee (Vaj ousted by the PAYER?)#1210735/13/04; 14:59:34


From The Economist print edition

Atal Behari Vajpayee and his ruling BJP have suffered a shock defeat in India's general election. Sonia Gandhi's Congress and its allies will take the reins of the world's largest democracy

BAD for the credibility of almost every pundit and pollster; bad for political stability; even perhaps bad for economic reform. But the outcome of India's election has been a triumph for democracy, and the ordinary voter's refusal, after being subjected to months of self-congratulatory government propaganda about how "India is shining", to accept rhetoric over results. On Thursday May 13th, with some of the 370m votes cast in the protracted three-week election still to be counted, the shape of the new government was yet to emerge from the political fog. But one thing was already clear: the ruling Bharatiya Janata Party (BJP) had lost. On Thursday evening, the prime minister, Atal Behari Vajpayee, visited the president to hand in his resignation.

An alliance led by the main opposition party, Congress, seems likely to win nearly 220 out of the 543 contested seats. The BJP-led coalition, the National Democratic Alliance (NDA), is set to have about 190. A "Left Front", dominated by the Communists, has recorded its best-ever performance, and could have about 60 seats. Since the Left's priority is to oust the BJP, a coalition grouped around Congress seems the most likely new government. Congress's leader, Sonia Gandhi, the Italian-born widow of a former prime minister, has been scorned by the BJP for her foreign origins and political cackhandedness. But she has had the last laugh. Her party has increased its number of seats from 112 to perhaps 150—a number beyond its dreams even a month ago. She is first in line for a chance to become prime minister.


JS thinks the Indian election is significant, as well. See his comments at the link.

TownCrierClosing market rap....... plus 24-hr newswire#1210745/13/04; 15:20:41 Assorted excerpts from several sources:

Despite the generally softer tone, gold was offered some support by the fairly disappointing tranche of U.S. economic data released over the course of the morning....

Retail sales for April fell 0.5% on the previous month, against expectations of a 0.2% decline. Excluding autos, sales fell 0.1%, compared with economists' forecasts of a 0.2% contraction....

Producer prices last month surged 0.7%, compared with a 0.5% spike in March.

The core measure, excluding volatile food and energy prices, rose 0.2%, the same as the previous month. Economists had expected increases of 0.3% and 0.2%, respectively.

misetich@mikal#1210755/13/04; 15:21:18

Your comments
Corporate earnings now come via proforma accounting, not european standards and generally accepted accounting practices(GAAP). Underestimating and hiding losses, costs and depreciation and overstating revenue, profit, and health foreign and domestic endurance and the economy's health."

I'm with you 100% - though the reason why it was inserted on the "positive side" is that fact stock bulls and the Feds manage perception, thus current earnings being reported according to them is excellent and thus justifies current valuations, regardless of how factual earnings really are.

However, as it happened during Y2000-2001 energy prices rose throughout the summer months - oil, natural gas and electrical grid power problems hit "pro-forma" earnings as there was little room in the "closet and under the rug" thus contributed to the piercing of the bubble - perhaps it was the catalyst since the manufacturing sector was hit really hard, and layoffs occurred reducing corporate spending and starting a vicious negative cycle

Y2004 shapes up much the same as energy prices are rising higher again- this time from a higher platform -. Whilst the impact has thus far been "positive" on the base materials industry (few hirings, improved profits etc) it's working itself within the general economy in a negative fashion as you outlined

Consumer spending is the economy locomotion. Stock Market Asset deflation (little wonder the PPT is trying hard to maintain the magic 10,000) takes away perceived wealth from consumers as well as confidence

Price inflation, higher IR etc are also reducing consumer disposal income and higher IR eliminate the refinancing scam.

Since wages are not increasing (but benefit costs are rising) the likelyhood of reduced consumer spending is HIGH, thus continuing the vicious circle which has just began to emerge from rising commodity and energy, which added to higher import prices and high service industry inflation.

The Feds are "winning" a few battles such as the current paper gold market - however - its doubtful they'll be able to defend the SM, Housing, Bonds, Derivatives etc etc in lieu of a deteriorating economy.

Of course according to them they've a "stong growing economy" and if they are able to bring oil prices- energy under control the game will go on a little longer - and keep on going with their mantra - however, if they lose this battle agains energy prices - and it certainly sounds like they will - They lost the War, including the War on Gold as they'll concentrate on saving the bond market.

Many thanks mikal and have a golden day!

All Aboard The Gold Bull Express- Part ll

Chris PowellBarrick changes its story about hedging program#1210765/13/04; 15:42:33

Blanchard defeats a motion by Barrick to add
a lot of defendants to the gold price-fixing
lawsuit, delaying the case. In the process,
Barrick contradicts itself about its hedging

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

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GoldendomeSomeone heeded Sir Ari's advice!#1210775/13/04; 16:52:15

A friend confided today, that a month ago, he had mixed feelings as gold was trading at over $400. and silver up around $8. The good feelings, obviously, were that all the ounces accumulated to that point had moved up in value. The bad feelings were that now, with prices moving so quickly upward, that he might never buy physical again, as it was becoming too expensive.

Then with the market pull-back, he had become paralyzed to act...he wouldn't buy- nor would he sell and confirm the lost gains. So, he was just sitting...waiting for gold to trade lower to buy, but hoping, actually, that it did not.

He said that last night he had read Ari's post regarding commitment to what is real in his life and beliefs. That following through on a course undertaken with firm understanding will reward in the longer run, if not necessarily on immediate terms. The friend reminded himself, that only a month ago, he was mildly kicking himself for not having committed more savings (which was possible to do) at $360 or $370; that opportunity had been lost seemingly forever. But now, here it was again and he was ignoring it! Waiting perhaps for the price to drop even further to the $350 or $360 range, which he really didn't want to see.

So today--with some spare cash lying around in savings- losing value, he made the call and ponied up for a few Mexican Cart-wheels. He said that he had none previously and wanted, just wanted, a few of those for the stash. By doing so now, his guilt over his own inability to act on his own best advice has been lifted.

He also confessed that when he thought about it further, he was actually more worried about having too many dollar savings in today's risky economic times, than he was concerned about the recent fluctuations in the precious metals markets. He just needed to see the reflection of his own heart provided through the words of someone else!

End of Story.

johnnyfable24 K CHINA SOUTHERN AIRLINES COIN#1210785/13/04; 20:23:04

I have a 24 K gold coin. It says China southern airlines on one side and Visit China '92 on the other side. It is slighty larger than a half dollar and weighs 0.5 oz. Is anyone familiar with this coin or know where I can find what it is worth? Thanks

Gandalf the WhiteI'm BACK !!!!! <;-)#1210795/13/04; 20:38:10

With a newly created computer, and I get to answer Sir Jonnyfable's Question on VALUE ---
"half ounce 24 K gold coin. It says China southern airlines on one side and Visit China '92"
It totally depends on if you wish to sell it or are speaking to someone that wishes to buy it !
IF you wish to sell it -- divide the SPOT POG by two, and you are very close to the price that you can receive.
IF you are speaking to someone that wishes to have the coin --- IT IS PRICELESS !
Pardon me, but I have a lot of reading to do.
Later all.

slingshotThe Prophecy of Oro#1210805/13/04; 23:39:16

The time was right to make his escape and so he mounted his horse in darkness.Pulling his cape over his head and tightly around him to conceal his face.This rider nudges his steed to move in the direction of the East Gate of Hammerton. He passes under the arch and traverses the bridge,looking back momentarily to see if he has been noticed. When he feels it is safe, the horse is brought to full gallop. To the north he rides. He is drawn like a moth to the flame. What preceeds him, he fears but still rides on to the only comfort he will find, even if would put his life in peril.
In the North, under a snow capped mountain, they await his arrival. They have felt the defeat of Therroth and in darkness they shrill in anger amoung themselves.When this rider arrives they will place him in a most precarious position.Knowing he has sold his soul to their cause,against his beliefs, they will use him. A fate worse than death.
As the rider comes closer with each hour, he feels the calling of the group. He drives the animal upon which he sits to the limit. Not caring for his well being. He must get there at all costs.
The rider hears the beckoning and it was only when he verbaly replied, "I will be there soon, Masters of the Realm",
that the stones that covered the beast were unseated. They toppled over and the earth was thrown up.

Gandalf the Gold, awoke in the middle of the night.

BelgianRandy : Portugal's Gold....#1210815/14/04; 00:41:20

Indeed Sir, nobody pays attention to the ongoing " Gold-Redistribution " ! When years ago, out Belgian stash was undergoing the same fate,...the rumor was firmly (consistantly) that it was China who was taking it in. Nobody bothered to explain the " WHY " of this re-distribution !
Most of these Gold re-distribution must take place throiugh the BIS that is capable of hiding all traces of these Gold flows.

All Gold-accumulators-holders, overhere should think about the final purposes of some CBs that are "diversifying" their reserves in a very peculiar Goldie way.

The 3 decades old, oil-standard (monetary value of oil) cannot function for ever. That's why, with the regularity of a clock, it must be repeated that the euro is not yet ready for oil.

The dollar "must" be devalued against Gold in a softly, softly way as to avoid an *official* dollar-devaluation, risking to break down the dollar-system too fast (brutally) and see the US goldreserves melt (shipped-redistributed) as snow in the sun.

Oil knows very well that the incredible dollar-debtbergs, are the main reason why the dollar (reserve-currency) cannot be devalued in an official or even quasi official way. That's why the absurd strong dollar rhetoric exists in the first place.
The recent Saudi statement (?) through Reuters is simply confirming that the dollar is allowed to stay a bit longer into the monetary game, dispite the rise in $-POO. In the mean time, the $-paper-gold market, helps the Gold re-distribution go smoothly and uninterrupted at very convenient prices.

Let us remember that oil backs (backed) the dollar and that Gold backs oil...and that all this is possible, because there is a guarantee for an "open" market (not FreeGold) for
the metal. The present deviation (9) from the +/- constant Gold/oil rate (13 to 16) asks for some explanations and/or signals, communicated between $-oil-gold. Let us all say thanks to Portugal and enjoy the Golden opportunities that are here today, maturing for a bright, nearby, modern future. Gold will control the confettis and NOT the other way around.

Thanks Towncrier.

johnnyfableGold coin......Gandalf the white#1210825/14/04; 03:12:34

What is the spot Pog???
misetichSurge in Jobs Mostly Bypasses the Factory Floor#1210835/14/04; 04:30:52


The economy is on the rebound, but Navistar - like many manufacturers who still manage to make things in the United States - is sticking to recession-level employment. Service sector jobs are multiplying rapidly. Manufacturing employment, on the other hand, is down nearly 3 million over the last 44 months, and while some hiring has begun, the 37,000 manufacturing jobs created so far represent a minuscule contribution to the 708,000 jobs generated over the last three months across the entire economy.

Manufacturers themselves warn not to expect much of a job revival at their companies. "We have cut back on an awful lot of manpower," said Jerry J. Jasinowski, president of the National Association of Manufacturers. "There will be some hiring now, but it won't be extraordinary, not more than 200,000 all of this year."
Orange robots with their rhythmical, bobbing movements are almost as numerous as workers, whose numbers have declined from 4,800 in the mid-1990's to 1,100 today. Three hundred of those workers were once engaged in making the truck's cab, cutting and shaping the steel panels and welding them together. With automation, only 44 are employed in those tasks today.

Job Creation in the manufacturing industry is negligible though input material prices are rising -

Also it is interesting to note the few jobs created by corporations such as Cisco and Dell

Cisco and Dell combined revenues for the 1st Qtr 2004 were approx $16billion - and reported high earnings YET, Dell reported little or no job creation in the US - though 1,600 jobs were added overseas and Cisco is planning to add 200 jobs (no its not a typing error) it reads "200"

Whilst perhaps Cisco, Dell are "poor samples" it nevertheless is indicative of "growth" without job creation

The "cornerstone" of the Feds exit strategy of the many wars/battles to maintain financial system stability(including the War On Gold) and support for the US $ - is job creation -

Without jobs, budget deficits are set to remain high adding to the woes of current account and trade deficit, thus maintaining downward pressure on the US $

Jobless recovery continues - and it may further deteriorate as energy prices and price inflation increase

Thus a possible period of STAGFLATION may occur as prices and unemployment rise OR RECESSION may follow the "2004 Oil Shock and Awe", followed by Asset Deflation

All Aboard The Gold Bull Express - Part ll

misetichEuro-zone and EU25 GDP up by 0.6%#1210845/14/04; 04:53:25


GDP grew by 0.6% both in the euro-zone1 and in the EU252 during the first quarter of 2004, compared to the previous quarter, according to flash3 estimates published today by Eurostat, the Statistical Office of the European Communities. In the fourth quarter of 20034, growth rates were +0.4% for the euro-zone and +0.5% for the EU25.

The US comparative "hedonic" adjusted GDP growth for the same period was 1%

It was also reported in a FT article

"The German economy grew at its fastest pace in three years as surging exports offset a drop in domestic demand. France expanded at its strongest rate since late 2000, while Italy grew at its fastest since the end of 2002."

Thus we have the economies of the US, EU, Japan, and China showing considerable growth, yet IR remain accomodative and none of the firs three are eager to increase IR - though the US has indicated they will in "measured fashion"

The attempt to defeat "deflation" appears to have worked at the "surface" - yet it remains to be seen whether it is sustainable and how long the first 3 keep their emergency IR - and other accomodative measures and thus continuing their "reflation" which is GOLD positive.

It may be too early for Central Bankers worlwide to declare victory over Asset Deflation.

Physical Gold is the investment of choice in either scenario

All Aboard The Gold Bull Express - Part ll

TopazOil/DX#1210855/14/04; 05:04:25

It's not often we get to see as clear a picture of Systemic operations as is on show at present. The World Reserve Currency is demanding support of it's Bond Market ... will it get it? methinks Yes!
The third reason goes to Taxes. Most other countries charge hefty Taxes on Oil derivatives (Gas etc) and these largely go un-noticed. When the public is expected to pony up for higher Oil AND higher Dollar, the haircut their own Gov't is giving them becomes exposed.
DX/Oil HAS to return to mid85ish/sub$30 by Jun 30 (SM repat) and the ONLY way this will happen is Bond Yields must drop substantially. imho.

misetichAs Prices Rise, Russia Alters Oil Politics Toward U.S.#1210865/14/04; 05:15:37


MOSCOW - Almost three years after the Sept. 11 attacks, America is still seeking sources of energy besides the Middle East, and Russia has plenty of oil to sell.

But after numerous meetings and high-level talks, the once-promising United States-Russia energy dialogue is sputtering, say government officials and foreign and Russian energy companies.

Worse, multinationals like Exxon Mobil are losing ground in developing promising oil and gas projects in Russia. In January, Exxon Mobil lost its license to a significant concession in the Sakhalin Islands in Russia's Far East that it had not yet developed.
What happened? .....The arrest of Mikhail B. Khodorkovsky, ...... was only the final blow. Before he was jailed, Mr. Khodorkovsky pushed for higher oil exports to the West and even pledged to build a pipeline to China, efforts that the Kremlin came to view as a threat to its power. [Mr. Khodorkovsky's latest plea to be released on bail was turned down this week by a Moscow City Court, the Reuters news agency said Wednesday.]

But another factor looms: with global oil prices soaring, Russian producers are raking in profits, so the government no longer feels compelled to sell oil to America
A hoped-for pipeline from the Caspian Sea to Murmansk in far northern Russia, from which Russian oil companies could ship to the United States, will probably not be built. Instead, the Kremlin is negotiating to build a pipeline to Nakhodka, a port on the Sea of Japan, which will bring oil to East Asia; that project has $6 billion in financing promised from the Japanese government.
Russia's energy ministry is now revisiting some deals signed in the 1990's, like Exxon Mobil's Sakhalin-3 concession in the Sakhalin Islands off Japan in 1993

Putin's Russia is changing the global energy dynamics, as he attempts to strengthen Russia's economy by obtaining the highest return for its natural resources

Former KGB agent is well trained to the double faced approach - and thus far it has paid dividends for his country as he has finessed his way by "befriending" Bush initially and simulteneously increasing his oil production and remaining friendly with OPEC and subsequently promising OPEC to freeze/slow growth production levels beyond 2004 and by signing various agreements in the ME and exploiting the struggle of China/Japan energy needs.

Could it be the US energy plan was based on a "Different Putin" ?
Not all things go according to plan- thus higher energy prices are here to stay.

All Aboard The Gold Bull Express - Part ll

Gold StandardLack of posts!#1210875/14/04; 05:29:53

I sit here and see 3 and 4 hours between posts on the forum. The last couple of weeks have been a draining experience, have they not?

But - let's look more closely. As we all know, we suffered a "strong dollar policy" through Clinton/Rubin/Greenspan - but no-one knew what the "strong dollar policy" actually was!

In my personal view, the "strong dollar policy" ("SDP" from now on!) was nothing but "talking up" the dollar, and tacitly or actively demolishing the POG, simply because it is the "canary in the coal mine", that shouts aloud to the market about inflation.

The bond market is simply beyond the radar of most punters, so this was a secondary concern at the time.

The SDP fell out of favour in 2002/2003, as a direct result of the balance of trade figures, and the quite apparent demolition of the USA's manufacturing base. Steel and other tariffs were imposed in a knee-jerk reaction which only exacerbated the problem.

The Powers That Be then embarked upon a "weak dollar policy" ("WDP"), in an effort to shore up the value of US exports. However, because of the demolition of the US manufacturing base, the WDP did nothing to assist exports, nor the balance of trade situation.

The only discernable effect of the WDP was to increase the cost of imports being lapped up by the lumpeninvestoriat, and with the side-effect of the price of oil (which affects EVERYTHING) increasing dramatically.

I am of the view that we have now, in a Presidential election year, seen the return of the SDP, as the lesser of two evils. The WDP did not work, and the political fallout was starting to get inconvenient.

But - what is the SDP? Again, all it is is rhetoric and "talking up" of the dollar, assisted by increasingly incredible data massaged into existence by the BIS. Oh, and a concerted effort to suppress the price of gold.

However, the "NEW" SDP has reduced markedly the political cost of oil and gasoline for the voters. And I think it is as simple as that.

The Powers That Be could not afford to continue with the WDP, because of the immediate and unwelcome effect on the price of gasoline for the lumpeninvestoriat. End of story. Every single voter is increasingly annoyed by the constant and inevitable upsurge in gasoline prices - the trouble is, the price increases are reinforced on a weekly or daily basis! Unhappy voters are the direct result...

I think the resurrection of the new SDP will continue all of this calendar year, and the USD will increase to the 94 or 95 mark, possibly higher. Gold, and silver, as a direct result, will languish in a tightly controlled trading range. However, once the results of the election is decided (either by the Supreme Court or an armed State of Emergency), the SDP will be cast aside, the USD will plummet, and the precious metals will either re-start their ascendancy, or else become an illegal trade.

This will be the case, irrespective of the return of Bush, or the annointing of John Kerry.

On another topic - I have briefly perused the pages of this form recently, and there was considerable debate on the topic of oil, Hubbert's Peak, fuel cell technology, the hydrogen economy, and so forth.

Why has no-one mentioned an obvious (and presently available) answer to the forthcoming fuel crunch - the existence of Biodiesel?

Sure, Biodiesel will not replace gasoline, but it will replace the present use of fossil-fuel diesel (used for that most important of industries, transport) in most applications. Biodiesel is greenhouse non-fungible, because it is net-equal in carbon dioxide intake (to the plants) as is produced by the combustion of the essential elements of those plants. Not that I am particularly convinced by the greenhouse scaremongers, in any case.

Hydrogen, fuel cells, and all the present "alternatives" seem to me nothing more than wishful thinking. What's wrong with Biodiesel? - we have it now, we can easily dramatically increase its availability, and it is a cheap renewable resource which is carbon dioxide net-equal.

The suspiscious side of me tells me that the Powers That Be do not want a situation where communities are in control of their own energy requirements.

Sorry about the long post, but since the post rate has dropped to one every four hours, I thought it timely to put in my two cents worth.

Cheers, GS.

Gold StandardLack of posts! (NOT)#1210885/14/04; 05:33:44

And, of course, while I was composing that opus, Topaz & Misetech were happily posting away!

Cheers! GS

Gold StandardOoops!#1210895/14/04; 05:52:19

Misetich, not "Misetech".

Tich, tich, tich!

My apologies, friend!

Cheers, GS

misetichFed Hyptonomist Headline News- "...there's no inflation, no inflation..."#1210905/14/04; 06:52:18

Headline Snips:

8:29am 05/14/04 U.S. APRIL CPI UP 0.2% AS EXPECTED

8:30am 05/14/04 U.S. APRIL CORE CPI UP 0.3% VS. 0.2% EXPECTED



8:30am 05/14/04 U.S. CPI UP 2.3% YEAR-OVER-YEAR, CORE UP 1.8%

8:30am 05/14/04 U.S. APRIL ENERGY PRICES UP 0.1%, GASOLINE -0.3%

8:30am 05/14/04 U.S. MARCH BUSINESS SALES UP RECORD 2.9%

8:30am 05/14/04 U.S. APRIL FOOD PRICES UP 0.2%, DAIRY UP 1.6%

8:30am 05/14/04 U.S. APRIL MEDICAL PRICES UP 0.4%

8:30am 05/14/04 U.S. APRIL HOUSING PRICES UP 0.4%

Misetich're feeling drowsy....drowsy...very drowsy....and when awake you'll only remember what you're hearing from now on..."there's no inflation....your social security checks will be going a miserely notch 'cause we've no inflation...

.........Pity those who are hyptonized as the Fed Notes value evaporates daily...

Physical Gold is the ultimate storage of wealth - get some!

All Aboard The Gold Bull Express - Part ll

misetichConsumer Price Index "The Good News Spin"#1210915/14/04; 07:15:42


An easing in energy costs held down consumer price inflation in April, as the CPI rose a slightly softer than expected 0.2 percent.

But the core rate, closely watched by policy makers and the financial markets, was a little troubling, rising a slightly higher than expected 0.3 percent. The year-on-year rise in the core rate, however, remains tame at 1.8 percent, as does the overall year-on-year rate of 2.3 percent.

Energy prices rose only 0.1 percent in the month with gasoline down 0.3 percent. Remember these are seasonally adjusted data that compensate for springtime increases in gas prices. Unadjusted gas prices rose 3.7 percent.
But not showing pressure were inflation-adjusted wages, which rose only 0.2 percent in April compared with a 0.7 percent decline in March and a 0.1 percent decline in February. Job growth has yet to pick up enough steam to allow workers to bid up wages.

Fed massaged CPI index cannot hide the rise of price inflation -

Joke of the day "-with gasoline down 0.3 percent"

The Fed is losing the war on price stability. Real inflation is probably running at the 7-10% per annum rate. Consequently consumer discretionary spending will be affected negatively herein forward

Consumer spending is much dependent on job creation, wage increases. The "soft" wage increase % is negative consumer spending, and represents the "continued jobless recovery" of a soft labor market thus ANOTHER nail in the coffin

The Fed is going to need a lot of ammunition to stem the flow of funds out from the Stock Market and henceforth reduce perceived wealth and consumer confidence

...a live wire act without a safety net! as IR are almost 0

All Aboard The Gold Bull Express - Part ll

misetichNo Room for Russia to Raise Oil Exports#1210925/14/04; 07:59:37


"Realistically, the capacity of suppliers does not today meet growing demand in places such as China or India. And you have to take into account the state of affairs in Iraq," Semyon Vainshtok, head of Russia's oil pipeline monopoly told Reuters.

"We are not meeting the demand of our oil companies ... and we cannot solve the problem without building new pipelines," Vainshtok told Reuters

A few more body blows - which has not dented the paperbulls spirits...though the punches are being administered daily in rigorous fashion..and are picking up force..

Time will tell if energy prices matter...

All Aboard The Gold Bull Express - Part ll

Socrates964Gold Standard#1210935/14/04; 08:03:24

I think you correctly identify what TPTB wants for the next six months. Indeed, this spoilt brat 'whatever I do, Daddy will pay' mentality has taken hold in the US. I just wonder if the rest of the world will pick up the tab, given that they can see what the game is, but then I'm just a rational expectations kind of guy.

Hence, do they really have the bullion to hold POG down for 6 months? Probably not.

Will US military hegemony terrify OPEC into bringing down oil prices? Hasn't worked so far. Keeping the US economy on steroids through an overvalued currency is just going to lead to more commodity price inflation and an exploding trade deficit.

Will the European central bankers roll over and ignore inflation generated by a strong dollar? Not clear, but Trichet didn't get his rate cut, did he?

Your argument rests on the assumption that the Fed sets securities prices/exchange rates. If so, why isn't the S&P at 1500?

If we apply the lessons of the Nasdaq sell-off to FX/PM markets, we conclude that the Fed fights a rearguard action with periodic squeezes, but can only do this when too many speculators get on the same side of the trade. I don't see a massive speculative gold/euro long position right now, and thus conclude that there's not much to squeeze.

Mr GreshamGold Standard#1210945/14/04; 08:06:35

Posts like yours, and Misetich's, are why I don't need to read a newspaper anymore, and I get a higher level "un-spun" analysis along with the media link, if I choose to go to it.

Why, I even forgot to make my coffee, and I'm mentally "woke up" just from reading you all.

Yes, biodiesel; I'm off to read up, and see what the biz opportunities might be in that direction...thanks!

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MKNews & Views#1210965/14/04; 08:10:57

misetichEarly casualties of higher oil prices#1210975/14/04; 08:14:17


Gas Prices Mute America's Love for Big SUVs
The recent rise in U.S. gasoline prices to record levels has Americans shopping for more fuel-efficient cars, and has at least dampened their love for SUVs which some consider the biggest gas guzzlers in suburbia.
Also hitting new and used vehicle sales is the war in Iraq and the slow pace of job growth, car dealers and industry officials said.
"Our business has been at levels lower than historical levels for the last few months. What part of that gas prices play is very hard to determine,"
One dealer, who asked not to be named, said some used car wholesalers have stopped buying large SUVs.

Auto industry - is being hit hard by higher energy costs both at the plant level - higher costs/lower margins and on the revenue level as consumers get hammered by real price inflation thus slowing demand

Packaging costs, transportation costs, airtravel costs, base material costs, chemicals, plant manufactaring overhead costs are rising...and consumer costs are rising

Body blows are being delivery with higher intensity....putting the fragile recovery in question...

All Aboard The Gold Bull Express - Part ll

BoilermakerSaudi Officials in Dancing Mode?#1210985/14/04; 08:53:34

Recent Saudi official statements have supported higher OPEC production to reduce crude prices, the Euro is not ready for prime time and gold is a useless relic. Seems like they are being jiggled hard by their US puppeteers and are dancing to the tune of dollar hegemony now and forever.

Here's another measure (anti-terrorist) taken by SA's Al-Jasser that was scripted in the US:
"Taken together, these regulations constitute a strict framework to be followed by Saudi banks in dealing with their customers and in carrying out all transactions. These require banks to have complete knowledge about their customers and their business and to ensure that all transactions are fully documented. It is worth mentioning that these address all forms of payments and transfers, both within the country and on a cross-border basis. Consequently, no fund transfer can take place in Saudi Arabia without full documentation of the sender and the beneficiary. As a result of these procedures and due to large investments in fast and efficient payment systems, the informal cross-border transfers have been made extinct. Also, any such transfers outside of the formal banking system are deemed to be illegal and strict enforcement actions including financial penalties and prison terms have been taken against violators." See link for entire article.

If the Saudi's really wanted lower oil prices and if they really had the reserve production they could drop oil rather quickly. I'm beginning to doubt they have the reserve capacity or the desire to drop prices. As Belgian observes very often what is said in the press should be interpreted in reverse. We may see a quick reversal of crude prices but as the world approaches peak oil the dips will be smaller and shorter.

GondolinLack of Posts ... and the Strong Dollar Policy#1210995/14/04; 09:10:24

Surely the lack of posts is just everyone taking a breather while the POG does before the excitement kicks in again on the next up-leg,

And what exactly is the Strong Dollar Policy anyway? Doesn't it just translate into plainer English if you call it the Weak Gold Policy?

Best of the weekend to all.

SCDCPI caps gold price rally#1211005/14/04; 09:11:01

In an article printed today, Paul Mendelsohn, Chief Investment strategist at Windham Financial is quoted as saying "I'm baffled by this number [0.2%] totally. It doesn't make sense".

Well wake up Paul. It is not you that doesn't make sense, it is the number that doesn't make sense. There was no No surprises here but, blatant manipulation !!!

To suggest that, last month, the headline CPI only increased 0.2% is to treat everyone with contempt. OK, so the Fed and the Labour Dept treats everyone in the financial markets with contempt all the time but, here they are mocking us loudly and clearly.

Many of us expected a low number despite the real life experiences to the contrary because:-

* it allows the Fed to suggest a 0.25 pt interest rate hike in August instead of June is not unreasonable and, that another one isn't necessary until after the Bush re-election thus protecting the consumer and corporate debt bubbles.

* it allows them to contain any inflation adjustment to pensions, social service benefits and medicare thus reducing the impact on already ballooning deficits.

* it allows them to argue that inflation is benign, so that the US dollar remains resilient and the haven of value in uncertain time. Thus capping any upside to the gold price.

The propaganda machine will need to work over time to get the financial makets to swallow this load of crock. They can fool many of the people most of the time but, not everyone all of the time.

Is this a credibility step too far by the Fed and the Labour Dept? There is a real possibility that the financial markets see that this report, like so many others, as part of a well orchestrated smoke and mirrors campaign.

The financial markets may just start questioning the credibility of the Fed and the Labour Dept to tell them the real state of the US economy and thus invoke a crisis of confidence in both the Fed and the USD!

GoldiloxGasoline down 0.3%#1211015/14/04; 09:59:00

I am so glad the CPI told me that gasoline was down this month. I might have missed that while I spent $10 to put 4 gallons in my motorcycle.

I wonder if the numbers include a balloon adjustment for "hot air".

The hot air balloon industry should be capitalizing on this windfall coming from Washington.

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misetich82percent of Iraqis oppose U.S. occupation#1211035/14/04; 10:00:05


WASHINGTON — Four out of five Iraqis report holding a negative view of the U.S. occupation authority and of coalition forces, according to a new poll conducted for the occupation authority.
In the poll, 80 percent of Iraqis surveyed reported a lack of confidence in the Coalition Provisional Authority, and 82 percent said they disapprove of the United States and allied militaries in Iraq
"generally speaking, the trend is downward," said Donald Hamilton, a senior counselor to civilian administrator L. Paul Bremer
Indicating a general skepticism of foreign involvement in their political future, 83 percent of those polled said that only Iraqis should be involved in supervising the 2005 elections.

The military invasion was "successful" -As was the "successful" campaign of converting Iraq's oil sales from Euro's to US $ - the winning of the mind and hearts is not.

This has profound implications. Firstly the cost of war, lowballed by Neocons is growing gargantulan on a daily basis running at $5 billion pm

Secondly Iraq's oil revenues which were supposed to pay reconstruction costs have fallen way below expectations, and little progress has been made reconstructing Iraq's infrastrure.

Thirdly the anticipated higher Iraq oil production did not materiaze thus the shortfall in world oil supply and the weakened US card vs oil producers. Moreover resistance activities continue and Iraq's oil pipelines are under frequent attacks.

With Anti-American occupation sentiments rising - the next battlefield is in the UN and Iraq's political arena - wherein the recent torture scandals has weakened the US position, of "liberators"

Attempted progress is being made to "privatize" Iraq's interests - however such progress has not passed the test of time as the playing field switches from military to the political arena. Most underestimate Iraq's intellectual resources - many are going to be surprised at the high level of sophistication and know how.

Thus the costs of the invasion/occupation are rising, and the strategy of exploiting Iraq's oil have thus far failed.

The combination is lethal at least for the shortrun, putting pressure on the budget deficits, and the US $, plus higher oil costs

All Aboard The Gold Bull Express - Part ll

GoldiloxSaudis in "dancing mode"#1211045/14/04; 10:02:37

@ BM

With Wyatt Earp running the show in Washington, the visuals of Saudis "dancing" to his twin 44s is priceless.

Just like a 1950's western movie.

"Dance, varmint!" blam, blam.

BoilermakerPOO/POG Departure#1211055/14/04; 10:15:08

Since April 1 the POO has risen 20% and the POG has declined 12%. The linked chart shows the cooincident timing of this departure and its magnitude. I'm still rather baffled how these normally sympathetic commodities could suddenly become enemies. Do you suppose that one (or both) of them is being manipulated by evil forces who do not feel comfortable with free market forces? The US financial press would certainly sniff a story and expose the ruse immediately just as your humble Boilermaker is trying to do. I must be getting paranoid. I need to get away from these silly concerns.
BoilermakerSaudi Dance Lessons: "Dance, varmint!" blam, blam #1211065/14/04; 10:23:46

I agree, Priceless!! Thanks for the chuckle.

HenriBoilermaker#1211075/14/04; 10:44:35

I am beginning to come around to the conclusion that something entirely new is brewing that causes such disparities. Given the enormous financial dynamic of derivative positions all (or most)geared toward minimizing the risk going forward of holding certain positions rather than selling them as a "Free Market" paper chase would normally behave, that the way money is made these days is by manipulating the various markets to behave in ways they never have. All of the sudden a whole new species of derivatives need to be born in order to protect those that need to buy and hold (lets say some highly leveraged traders that use what they hold as collateral for more adventurous excursions) from this new and previously unconsidered risk. The ability to move a market can be relatively easy for someone set up to profit from the move.

Lets say that some "house" wanted to sell a new species of basket risk derivative. They could just move the market buy buying or selling the commodities they have targeted, or, to get even more money from it they (or the insiders knowing ahead of time of the move) might start buying out of the money options in the targeted commodities so that when the market does move, they collect on the positions and make money selling the new derivative class. Can we discern these moves before they occur by monitoring the change in volume of puts and calls. The put/call ratio change? Collect on the engineered move as well? Who would ever have thought we would see a backwardation of Oil vs. Gold. A larger disparity existed not too long ago on the chart you showed except the relative Oil chart value was lower than the gold. Is this a circumstance engineered to break the stranglehold of the derivatized financial world on commodities? Is it one more symptom of the alleged program in place to set gold free? I hope so. Shake off those shackles gold!

We may be witnessing the results of a major Derivative class warfare battle here.

TownCrierA snapshot of some recent headlines#1211085/14/04; 10:49:39

Dollar Slips on Weaker Consumer Sentiment-- (

FOREX-Dollar wilts as consumer survey data disappoints-- (UBS Warburg)

MARKET TALK: Inflation Edges Higher-- (Dow Jones Newswires)

Dollar decline deepens as consumer data shy of forecast-- (AFX News)

Gold ticks up on rebound in euro-- (Business Day)

Stocks Slump Amid Signs of Inflation-- (Fox News - Business)

Inflation data sinks stocks-- (San Diego Union-Tribune)

Stocks fall on inflation news-- (The News-Observer)

[Australian] Dollar in meltdown-- (The Herald Sun)

Prices, inflation fears rise-- (Denver Post)

Mexican stocks lower, peso firms after U.S. data-- (

Europe gold perks up after U.S. inflation data-- (

Middle East Economic Forum to Focus on Change, Peace and Development-- (Voice of America News - Business)

Gandhi vows to push economic reforms-- (Reuters - Business)

INTERVIEW-S&P says China likely to achieve soft landing -- (Reuters)

Oil Hits All Time Peak, Dollar Marches Higher as Yields Rise-- (FXstreet)

M-2 money supply rose $41.0 bln May 3 week -- (Reuters)
[M-1 up $24 billion, M-3 up $58 billion]

Euro may pay for stability pact failure; McTeer-- (Forbes)
[Let he who HAS a stability pact cast the first stone...]

Foreign central banks sell some U.S. debt -- (Reuters)

TownCrierA little bit of "everyone" in the same boat...#1211095/14/04; 11:37:04

HEADLINE: Eventual UK euro adoption would delight US exporters

CHICAGO, May 13 (Reuters) - The addition of 10 nations to the European Union on May 1 came as welcome news to U.S. exporters and importers who are eager for those countries to adopt the euro, but they say eventual United Kingdom adoption of the single European currency would be a much bigger coup.

"The euro has been a very important subject for us," said Jon Kinney, chief financial officer at Illinois Tool Works Inc. in Glenview, Illinois, at a recent conference on the euro at the Chicago Federal Reserve. ...the single currency has simplified the firm's trade in Europe, improved risk reduction and lowered costs in general. UK adoption of the euro would boldly underscore those benefits, he said.

"The advantages of having the single currency are really that (U.S.) firms can economize on things like hedging and marketing," said Charles Engel, professor of economics at the University of Wisconsin at Madison.

"They're selling to a region with one currency instead of 10 currencies," he said. "It's easier to figure out what price you want to charge. The more you can think of Europe as a single market, the easier it makes things."

The union is now 25 nations strong. The 10 newest members are mostly central and eastern European countries, and there is no telling when or if those countries will meet the stiff criteria required to adopt the euro. Some aim to make the conversion to the euro within a few years. Nevertheless, they've taken the first step...

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

On the other side of the same coin I want to revisit this portion of news that Spartacus posted yesterday:

LONDON, May 13 (Reuters) - ...Muhammad Al-Jasser, vice governor of the Saudi Arabian Monetary Agency, told Reuters in an interview published on Thursday that Saudi Arabia still regarded the dollar as having the edge over the euro as top reserve currency. ---(end excerpt)---

Perhaps the single most remarkable (and overlooked) feature to this commentary is that only a scant five years ago the euro was a newborn. Go back only seven short years ago and many people would have thought it INCONCEIVABLE that there could even exist serious talk at this date pondering whether or not the dollar had "the edge" over any other currency in the world.

Officials simply don't waste time repeating the self-evident -- that the earth is larger than the moon. Something, therefore, has clearly changed in the past few years.

The very fact that this discussion is being aired speaks volumes about the nature and direction of the current in which we're afloat.


BoilermakerNew Derivitives Games?#1211105/14/04; 11:38:58

Please let me explain that I am no derivitives expert, to the contrary my brain hurts when they are explained. That said you make a good point, if I understand it correctly, that creating a new paradigm in commodities such as reversing the long-standing relationship between gold and oil might make some money for those on the inside. If everyone is used to reducing risk and/or making money by the positive correlation of oil and gold prices then a reversal of that relationship can mean big bucks for the insiders. It's Friday, my brain is fried. TGIF.

Solomon WeaverGold Standard, Mr. Gresham on BioDiesel#1211115/14/04; 11:44:25

I believe the problem with Bio Diesel is one of capital investment required.

We would need proof of biodiesel being made "cheaper" than oil derivatives.

Forget not that a big part of oil is that it feeds a large and complex set of "downstream" fuels and diesel will fall short in many of these downstream uses.

Poor old Solomon

GoldiloxDownstream theory#1211125/14/04; 11:50:43

@ Poor ole' Solomon:

What you describe is, of course, the satus quo.

Kinda like the "trickle down" theory.

If the richer get richer, maybe they'll throw us some crumbs.

When they need to tighten their belts, guess who they tighten them on!

BrialeInventory management capital thresholds#1211135/14/04; 11:56:51

Dear forum members,
To me all signs point to massive inflation and possibly hyperinflation to get out of this debacle within this decade. I, under different pseudonyms, have posted on other sites over the last few years that decimal place movement to the right was going to be the choice for our fearless leaders. At first I believed we were going to be entering an age where we would be carrying around $100 bills in our wallets in lieu of $20's, now I think we are going to be going to be reaching a brave era where the $100 bill may substitute for $10's and possibly even $1's. I will give just two examples from memos sent to me from within the large UC (University of California) system that help me to support my thinking.

1) Inventorial equipment threshold will now be raised from $1500 to $5000. That means only items purchased above the $5000 limit starting 7/1/04 will be tracked by the offices of materiel management through yearly inventroy procedures. Also keep in mind the inventory threshold was just increased from $500 to $1500 back in 2000.

2) Our UC pension plan has just offered a new investment strategy that incorporates TIPS. This is the first time they have offered such a strategy. Feel free to look up the who the Treasurer and the head of the UC Pension program are and their backgrounds. I will not post their names but be sure it is most interesting reading.

Of course these are just anecdotal examples, but indeed factual. The meanings of which can only be gleaned by the timing of such announcements IMHO.

GoldiloxGreenspan tells students education, ethics are crucial#1211145/14/04; 11:57:00


CHICAGO (Reuters) — Students probably will change jobs more than once in their lives and it is hard to know what will drive the next wave of hiring growth, Federal Reserve Chairman Alan Greenspan said Thursday.

The keys to success and happiness in an environment of rapid economic change are life-long learning and ethical behavior, Greenspan said in a speech that did not touch on current economic conditions or interest rates.

"I do not deny that many appear to have succeeded in a material way by cutting corners and by manipulating associates. But material success is possible in this world and far more satisfying when it comes without exploiting others," he told a young audience at the Chicago Fed's Money Smart forum via teleconference.

"It is decidedly not true that 'nice guys finish last."'


Of course, he forgot to tell them that insider information helps, too.
How about them gas prices, AG?

Federal_ReservesCPI#1211155/14/04; 12:09:20

Hasn't been right since Wall Street took it over and manipulated it with the Boskin comission, they all removed housing costs, jammed in subsitution rules, and quality adjustments. Its a load of bull wackey. Who gets jilted? Everyone living on fixed incomes. Recently rich old greenspan recommended that benefits be cut too. Congress is blinded, I've written to them to complain and get form letters back, I've written to the AARP to complain, they might have some muscle but all they do is send me flyers trying to get me to buy stuff. Its hopeless really, the casino bosses have complete control of all the numbers, and generate them to justify their economic policies.
misetichS&P keeps positive rating for China's economy #1211165/14/04; 13:00:50

HONG KONG, May 14 (Xinhuanet) -- Standard & Poor's Ratings Services said Friday that it sees no immediate need to revise the on its sovereign ratings on China.


HONG KONG, May 14 (Xinhuanet) -- Standard & Poor's Ratings Services said Friday that it sees no immediate need to revise the on its sovereign ratings on China.

It said, while a hard landing cannot be ruled out, a soft landing is the more likely outcome for the country's high-flying, but apparently earthbound, economy.

The sovereign ratings were last raised in February, 2004, an upgrade that was intended to reflect greater resilience in China'seconomy as a result of persistent progress in structural reforms. The central government's improving revenue base was also a reason for the rating action, it added.

The "China overheating card" was used to scare off -raid -speculative hedge funds in commodities and precious metals markets.

Now one by one those investment houses - Goldman Sachs, Merril, and Standard & Poor have predicted a soft landing scenario.

Fact remains China economy is expanding rapidly, and emphasis is being implemented through a variety of methods to cool off some sectors.

China's continued growth will add pressure on commodities and energy accelerating price inflation in the West.

FWIW -(People Daily Website) has a scathing attack on US foreing policies, specifically identifying Rummy and Neocons - citing the "american expection rule" - A few days ago the same publication carried ANOTHER scathing attack on the US on their "ambiguous" Taiwan policy-

All Aboard The Gold Bull Express - Part ll

a nation of oneTownCrier (5/14/04; 10:49:39MT - msg#: 121108)#1211175/14/04; 15:19:10

Thanks for the headlines. Nice encapsulated reading.

I believe that such notices to the public in effect constitute invitations to participate in ways desired by those in positions to benefit from such action. The public is a lot less knowledgeable about stocks, bonds, gold, etc., and other financial matters than people who -like us- work every day to understand these topics better, and they are thus also more easily influenced, or manipulated, by facts suddenly shot at them. Panics involving large numbers of the public therefore can be larger, quicker, and deeper. When the public becomes aware of what is common for people on this forum to know, the force on the gold bull market will be much greater. I believe that the public has been kept out of this market so far, and it seems obvious to me that this has been a deliberate goal on the part of those able to achieve it. When events begin moving in ways that cannot be controlled by these powers, you can be assured that the powers will already have become well-positioned to benefit from it, and, at that point, the surge in public interest will be used to add to their advantage. Thus the knowledge that is spooned out to the people generally is controlled in this way, and for this purpose. There is little question that our nation's government -insofar as it is subject to being controlled by specific individuals- also is involved in this, either consciously or otherwise, and that they too manipulate, or would manipulate, such effects.

RAP0.3%???#1211185/14/04; 19:51:49

The CPI may have been .3% for April, but what are they going to do next month?
GoldiloxCoal stocks at US power plants spark blackout fear#1211195/14/04; 20:25:49


NEW YORK, May 7 (Reuters) - Coal supplies at U.S. power plants are at their lowest levels in more than three years, sparking concern of possible blackouts this summer when demand is heavy for electricity to power air conditioners., a coal industry newsletter, said supplies may be 10-20 percent lower than at this time last year, while National Mining Association experts believe that on average, coal-fired American plants have probably 40-45 days supply compared with 60-90 days which was normal in the 1990s.

Just last month, Peabody Energy (NYSE:BTU - News) Chairman and Chief Executive Officer Irl Engelhardt said reliability might become an issue at some plants, while hot weather in southern California this week once again highlighted how close America lives to an energy disaster like last August's monster blackout in New York and other eastern U.S. and Canadian cities.

"They (coal supplies) are much lower than they have ever been for some time," said Connie Holmes, senior economist at the National Mining Association. "You can only run down stockpiles so much. I am a bit surprised."

She said one reason for the reduction of coal supplies could be cost-cutting associated with deregulation. "They don't want to tie up so much money for so long."

Goldilox: SOS - different day!

GoldiloxGot Gas?#1211205/14/04; 20:29:39


Oil isn't the only fossil fuel that's in crisis.
By Paul Roberts
Posted Tuesday, May 11, 2004, at 11:47 AM PT

Now that you've finally adjusted to spiking oil prices, here comes another energy crisis—in natural gas. In recent hearings before Congress, Federal Reserve Chairman Alan Greenspan confirmed what energy traders have known for months: that prices for natural gas could top $6 per thousand cubic feet this summer—double the 2003 price and nearly three times the average price since 1980—and may soar even higher over the next four years. The gas markup will not only slow the U.S. economy and slam your wallet, it will also, perversely, delay the development of cleaner, renewable energy sources to replace oil and gas.

Natural gas doesn't attract the attention that oil does: U.S. consumers who reliably go ballistic over a 5 cent hike in gasoline are largely oblivious when natural gas prices jump. But natural gas should not be ignored. Today, natural gas—or just "gas," if you want to sound like an insider—accounts for nearly one-third of America's total energy use, and demand is going nowhere but up. Because gas is relatively clean-burning, it is popular as a heating fuel and is overtaking dirtier coal as the preferred fuel for generating electricity. (Read why it became so popular here.)

What's more, gas can be refined into other fuels, including a synthetic gasoline, and can be turned relatively easily into hydrogen, aka the Fuel of the Future. This is why gas is widely touted as a "bridge" fuel—that is, a cheap, existing energy source that could help the world gracefully shift from its current oil-based energy economy, with its massive environmental and political liabilities, to a cleaner, more stable system in the future. But that rosy scenario becomes harder to imagine with gas at $6.


Shortage, shortage, who's got a shortage?

Goldendomeby Bill Bonner at The Daily Reckoning.#1211215/14/04; 21:48:32

We say, for example, that 'investors don't get what they expect from the markets, but what they deserve.' All the old timers said as much; our observation is hardly original.

Market history proves it true. But who believes it? What investor really thinks he deserves what markets generally deliver - that is, about 3% per year over the last 200 years?

Or take this common advice: Buy low, sell high.

Every investor claims to follow it. But who does? From our minds, all memory of what happens to markets has been erased; we think prices only go up. Stocks are now nearly as high as they've ever been, yet investors still buy them. Bond prices, too, are very high. But investors still buy them, too. And houses? Who imagines that house prices can go down as well as up? Our spotless minds hold no dirty examples. As far as we can remember, everything always turns out for the better. Every real-life story has a happy ending.

And yet, within the lifetimes of everyone reading this letter, things did not always turn out well. As recently as 25 years was as if we lived on a different planet.

Who remembers that two decades ago, dividend yields and P/E ratios were about the same number - 6?

Who recalls that at that time the price of gold and the price of the Dow were also about the same - near 800?

Now, stocks yield less than 2% in dividends and P/E ratios are about 4 times as high.

Do things always have a happy ending? How many long-term gold buyers are there in this room? Does anyone remember what happened to the price of gold in the last two decades of the 20th century? It collapsed, of course.

Who remembers buying bonds in the early '80s? You could get a 15% yield from Treasuries. And here we pause and catch our breath. What happened, we wonder? How did the world improve so dramatically that lenders are now willing to let out their money for 1/3rd the yield? Is the world that much safer? Is the dollar that much more secure? Are the finances of the federal government that much healthier? Is the Fed that much better at protecting the value of the currency?

Investors are doing something that is breathtaking.

In 1980, the U.S. had a positive trade balance and Americans were net lenders to the rest of the world. The country was at peace. Republicans claimed they believed in balanced budgets. People still held parties when they paid off their mortgages. Paul Volcker said he would bring down inflation rates...and meant it. Ronald Reagan was president. You could buy a stock for 6 times earnings...and lend your money to the U.S. government for a 15% yield. Lenders demanded that much, because they remembered the inflation of the '70s. They knew that not every investment story had a happy ending.

A quarter of a century later, everything has changed. Our minds have been cleansed of all nasty recollections. People judge it only a third as risky to lend if we will live in eternal sunshine.

slingshotLack of Posts#1211225/14/04; 23:45:10

You all have to be congratulated on a job WELL DONE.
Each and every one of you have pushed the information envelope to the limit. Adhering to the guide lines you have refused to publish Spam. Yes, there has been long hours between posts that resulted in the contant hit on the refresh key. They long wait between resulted in a quality post of information we desire. Think of all the information we have digested in such a short time and the general public is not even aware of what we discuss here at the forum. They may be about to get a real surprize.
To those who try to fill in the gaps of long hours, Thanks.
These slowdowns are just part of the territory.

BoilermakerCoal#1211245/15/04; 06:13:46

Coal is the source for 50% of US electrical generation. In case you want more energy info and need some grist for the weekend here's the story on coal;

"There is no single cause for the rising coal prices in recent months, but a number of industry, market, and external circumstances have put upward pressure on coal prices since last fall. The common concern, heard from coal consumers throughout the East and Midwest, is a severe crimp in the coal supply chain. Coal availability is short for both spot purchases and term contracts, but in a rising market, as in recent months, spot bids exhibit the more dramatic price spikes.

Requests for low-sulfur bituminous coal in Central Appalachia, the major source of Eastern compliance coal, have gone unanswered or come in well above expectations
Northern Appalachian high-Btu, mid-sulfur bituminous coal (usable in plants with emissions scrubbers) is also in short supply and up in price
Powder River Basin (PRB) low-sulfur, low-Btu compliance coal, which could replace or supplement Eastern coal at some boilers, is largely under contract for 2004 and 2005 deliveries; it is used by many Midwestern power plants that switched fuels in the 1990's from higher-sulfur Interior and Appalachian coals
Spot purchases from the PRB and from the low-sulfur bituminous Uinta Basin are constrained by a lack of spare railroad capacity to handle increased shipments
A number of factors have converged at this time and contribute to the coal supply and coal price changes:

Over the past 2 to 3 years Eastern productive capacity, especially that using lower-cost mining techniques, was hampered by regulatory issues, permitting delays, and related lawsuits over mountaintop removal, valley fill, and mined land subsidence
Readily minable reserves have diminished: although the single-year productive capacity of U.S. coal mines has increased, the duration of coal production from active mines has declined and become concentrated in fewer companies; from 1991 through 2002, productive capacity increased by 9 percent, but reserves at producing mines went down by 17 percent; in 1991 all reserves at operating mines equated to 22.1 years' production, but by 2002 that figure was 16.6 years
The decline in overall operating reserves means that an increasing number of individual mines are approaching the limits of useful mine life; Eastern mines increasingly report "geologic problems," which often portend the end of minable reserves as faults, weak roof, or thinning or splitting coal seams raise costs or impair mining with existing machinery
Mine operators deferred new mines in recent years because future reserves tend to be in deeper, thinner coal; new mines will be costlier to operate and will require large capital investment and firm sales contracts at higher coal prices
During 2003 and 2004, several eastern mines were temporarily closed due to fires, accidents, or safety issues; examples include RAG's Cumberland mine, Pin Oak Resource's Pinnacle met coal mine, Alliance Resource Partners' Dotiki mine, and Consol's Buchanan mine, which together comprise nearly 3.9 million short tons (mst) of lost production
Five major coal company bankruptcies in the past 24 months--four still in process--were preceded by or resulted in missed or slowed deliveries, coal price increases, and some abrogated contracts that customers had to re-bid; they include Horizon Natural Resources, formerly AEI Resources, the fourth largest U.S. producer of bituminous steam coal. Failures of reclamation bonding companies also put some operations on hold
In West Virginia, new regulations and licensing of coal truck load limits affect cost and timeliness of coal movements to customers and loading docks
Meanwhile, PRB mine capacity is heavily committed for 2004 and into 2005; railroad capacity, though enormous, is a limiting factor and relies on trains rolling 24 hours per day, 7 days per week. If deliveries fall behind optimal rates--as they did in early 2003 when electricity generators slowed deliveries to burn off inventories--there are few options to accelerate deliveries later on.
Numerous external factors have also exerted upward pressures on coal prices:

High natural gas prices over the past year shifted some demand to coal
Oil prices are still rising, which drives up costs of mining and shipping coal
Delivered coal prices skyrocketed in international coal markets due to heat and drought in Europe in 2003, withdrawal of Chinese coal and coke from markets, and extreme demand for bulk carriers by booming Chinese steel industry
The Atlantic Ocean market bid up and contracted for excess Colombian coal that some coastal U.S. power plants had considered a primary or back-up coal source, further reducing supply.
After several years of declining U.S. exports, the hot international market and weak dollar are diverting Appalachian high-Btu steam coal and low-sulfur metallurgical coal to the export market
Unresolved 2003 legislative and regulatory issues may have affected decisions to open or expand coal mines; for example, the National Energy Plan, Clear Skies Initiative, and EPA's mercury and PM2.5 standards (for particulate matter 2.5 microns or less in diameter), for which the final revision is due December 2005. "

Here's another clip
"Coal from the eastern U.S. has a higher sulfur content than coal from the west, and also burns more efficiently. Some of the eastern U.S. coal is of high enough quality to burn in steel mills, and major coal producers like Massey Energy (MEE) and Peabody Energy (BTU) have recently warned that eastern coal supplies are being diverted from power plants to eager overseas customers who need it for metallurgical purposes.

One industry source estimated last week that exports could reach 42 million tons per annum in 2004, up 11 million tons from 2003 and up 15 million tons from 2002.

"It appears there is a huge demand for anything that comes even close to metallurgical coal in China," Klappa said."

Chinese are eating our lunch and our coal. West Virginia to be flattened?

misetichPrice of Gas Hits 23-Year High #1211255/15/04; 07:11:26


Venezuela used to send four to five shipments of refined gasoline to the United States a week, with up to 500,000 barrels in each, Verleger said. That extra supply met a critical demand spike during the summer driving months. Now, those shipments are down to one a week.

That source has only begun to diminish. The standards will become even tougher in 2005, and tougher still in 2006, Rodgers said.

"People believe this year's price is just a preview. It could get much, much worse," he said.

The impact of higher gasoline prices in the US is yet to demonstrate itself as it embeds itself throughout the economy
Don't count on Chavez to bail Bush out!
Energy prices are a formidable opponent which once ignited cannot be extinghished and it feeds on "paper" specially the Barnecke helicopter dropped ones

All Aboard The Gold Bull Express - Part ll

misetichChina Says Soft Landing a Certainty #1211265/15/04; 07:37:02


"China will definitely achieve a soft landing," Li told Reuters when asked whether the country would take stronger action to cool its economy, such as raising interest rates.

"The macroeconomic cooling measures that we have put in place up to now are extremely effective and will take hold step by step," Li said on the sidelines of a meeting of the Asian Development Bank on the South Korean resort island of Cheju.
"It's not the entire economy that is overheating," Li said, echoing the view of many economists. "We see economic overheating only in some industries."
The authorities have restricted lending to those industries and have told local officials not to create new development zones for manufacturing-intensive activity.

The government has ordered banks to hold more money in reserve, leaving less available for loans, but it has so far avoided imposing higher interest rates, which many analysts think could cripple indebted state firms.

The "China growth factor" is ANOTHER formidable opponent of the West "price stability" goals

Continued growth pace at the 6-8% level spells doom for those countries who have relied on "cheap" natural resource consumption

In essence China's growth and the amelioration of millions consumers throughout Asia, reinforces the trend of higher natural resources consumption and demand, resulting in higher price inflation worlwide.

Some western economies are more vulnerable than others in this vicious cycle as they are unable to use the necessary economic levers at their disposal.

Specifically in the US as an example the lever of IR to curb rising price inflation is almost out of order as higher IR results in higher inflation and higher debt service costs both within the economy and without to foreing lenders.

The "soft landing" which Sir Greenspan has celebrated of having achieved following the SM bubble burst has been achieved by creating additional imbalances, which are based on a low IR environment

It remains to be seen, as price inflation soars how the US Fed policies will respond since it the "soft landing" was achieved by inflating assets, stimulated by low IR and other economic perks ei) housing,

The Feds keeps on celebrating the battles won yet its being surrounded by formidable invisible/visible forces who are gathering strengths from the weapons being deployed by the Feds themselves - huge amounts of easy fiat money creation

All Aboard The Gold Bull Express - Part ll

misetichReality Check: U.S. Dairy Industry Expects High Summer Prices #1211275/15/04; 08:19:11


NEW YORK (MktNews) - Milk and other dairy-product prices
have breached record highs in May, and industry officials blame years of depressed milk prices that drove farmers out of business and set the stage for a supply shortfall.

The problem is aggravated by several factors, among them: Canadian dairy cows are banned from entering the U.S. because of lingering concerns over mad cow disease; Monsanto's bovine Somatotropin, used to stimulate milk production, is in low supply; and dairy farmers sold off
herds when milk prices were low and beef prices high.

Consumers appear to be shrugging off the price increases, as
grocers say they are meeting little resistance when they raise prices.

Consumers are being bombarded by REAL price inflation - The article indicates consumers are not resisting price increases - translation INLATION EXPECTATIONS are imbedded in consumers thus they're Price Inflation Disynthesized as real inflation has been soaring for years from housing to automobiles to gas prices to a cup of coffee prices

All Aboard The Gold Bull Express - Part ll

Chris PowellGold price suppression scheme cited in Smart Money magazine#1211285/15/04; 08:40:53

A big article in the national financial press on gold and GATA.

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.

misetichS & P 500 Survey of economic conditions#1211295/15/04; 08:47:33


Analyst Commentary by S&P Major Sector

Consumer Discretionary: Business and pricing conditions were stable, .... Hiring plans were also mixed... No industries plan on increasing capex over the next 1-6 months.
Consumer Staples: Business conditions were mixed for the consumer staples companies................Hiring plans remain weak for the group and only the drug retailers plan on increasing capex.

Financials: Business and pricing conditions were mixed. The recent rise in mortgage rates has dampened refinancing activity............... Only life insurers plan on adding to payrolls over the next three months.

Healthcare: Business conditions slipped slightly this month. ..... New product launches in biotech products are driving large capital expenditures in the industry as well as increased hiring.

Industrials: Industrials continue to be the bright spot of the survey. Business conditions as well as advance bookings continued to improve, while financial conditions were unchanged. Pricing conditions continued to improve, although prices have fallen by 1-3% for the airlines. Hiring plans are generally strong for the group, although only half of the industry groups plan on increasing capex

Information Technology: Business conditions continued to advance in IT, although pricing continues to deteriorate for most groups..............They also plan on adding to payrolls somewhat over the next three months.

Materials: Business conditions were somewhat improved for the specialty chemicals companies and noticeably improved for the paper and forest products group, which has also experienced higher advance bookings..............Specialty chemicals companies plan on increasing capex by 3-6% while paper & forest products firms plan on 0-3% increases. ....

Telecommunications Services: Business conditions were unchanged for the telecom services and wireless services companies. Prices charged continue to decline for both industry groups.............The telecom services companies were still cutting payrolls over the past three months and have no plans to step up hiring over the next three.

Utilities: Business conditions were somewhat improved for the electric utilities companies, although they continue to increase prices by 1-3%. Companies were still cutting payrolls over the past three months and have no plans to Non-life insurance companies as well as mortgage finance companies continued to cut payrolls over the past three months.step up hiring over the next three, although they plan on increasing capex by 0-3% over the next 1-6 months

Summarizing (apologize for redundancy) all sectors - LABOR MARKET

Hiring plans were also mixed...
Hiring plans remain weak
Non-life insurance companies as well as mortgage finance companies continued to cut payrolls over the past three months
They also plan on adding to payrolls somewhat over the next three months
The telecom services companies were still cutting payrolls over the past three months
Companies were still cutting payrolls over the past three months

JOBLESS RECOVERY CONTINUES - The FED exit strategy is job creation and hence a REAL growing economy non-stimuli dependent

The exit door (job creation) is closed firmly and the operating room (PPT) fire extinquishers are running out of ammunition - as the flames, backdrafts, blackholes are surrounding them - As they retreat they need to be careful not to step on false floors which have been papered over
All Aboard The Gold Bull Express- Part ll

misetichA sign of the future?#1211305/15/04; 09:00:02


Forced home sales increase 8 percent

Home foreclosure postings moved up again for June.

Lenders scheduled 2,295 homes for forced sale at the lenders' auction next month, an increase of 8 percent from a year ago.

The rise in Dallas-Fort Worth area postings follows a 17 percent drop in May that was the first such decline in three years.

But industry analyst George Roddy at Foreclosure Listing Service predicts that the number of home loan defaults will remain high for several months.

It is reported close to 70% of US citizens are owning a home - recent changes are encouraging low income with - no down payment -

A full third of mortagage holders are locked in the 'variable mortgage rate category' -

The prospects of continued jobless recovery - higher price inflation - higher IR to defend a falling US $ would prove devastating to low/lower middle income wage earners

A little insurance to one's portfolio - PHYSICAL GOLD - is a very prudent strategy

All Aboard The Gold Bull Express - Part ll

Chris PowellCFTC answers complaints from silver investors#1211315/15/04; 09:29:21

Ted Butler's campaign gets a response.

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

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misetichCredit Bubble Bulletin, by Doug Noland#1211325/15/04; 09:29:53


Broad money supply (M3) surged $58.3 billion, with two-week gains of $104.8 billion. Year-to-date (18 weeks), broad money is up $350.1 billion, or 11.5% annualized.
May 13 -- San Francisco Chronicle (Michael Cabanatuan): "The cost of building a second Benicia-Martinez Bridge has swelled to more than a billion dollars -- nearly four times original estimates --
Seven months into the fiscal year, our federal government has accumulated a deficit of $281.9 billion. Fiscal y-t-d Receipts are up 1.3% to $1.070 Trillion, while Outlays are up 7.5% to $1.352 Trillion. The revenue/expenditure gap is even more dramatic when compared to y-t-d fiscal 2002 data. From two years ago, 7-month Outlays are up 14.5%, while Receipts are down 4.1%. Examining 2004 y-t-d changes by major spending categories, National Defense is up 7.5%, Health & Human Services 11

Doug provides a week's summary of major newsheadlines, monetary statistis - A MUST READ

Of particular interest - The San Fransico Chronicle snip (see above) may be more profound than just an isolated instance.

Construction costs are rising as material, energy prices increase. Beside the obvious inflationary effects, ANOTHER striking effect are the rising COSTS OF PUBLIC FUNDED CONSTRUCTION PROJECTS

Rising construction costs INCREASE BUDGET DEFICITS, or curtail, post-pone much needed infrastructure maintenance

This impact has not received much attention - YET - as most contracts were signed/commenced PRIOR to the recent commodities soaring prices - going forward however the impact is significant

Thus governments may be faced with stagnating revenue increases and rising costs

All Aboard The Gold Bull Express - Part ll

Gandalf the WhiteSir Johnnyfable's second Question --- <;-)#1211335/15/04; 12:11:21

johnnyfable (5/14/04; 03:12:34MT - msg#: 121082)
Gold coin......Gandalf the white
What is the spot Pog???
Sorry, Sir Johnnyfable to take so long to explain my post and also WELCOME you to the TableRound.
POG is many times used as shorthand for "Price of Gold" here at the TableRound, and "SPOT" is the currently quoted asking price for DELIVERY of any "commodity".
Not to be confused with the dog "SPOT", was recently passed away at the White House ! --- and the brother of SPIKE which have been resting for the new FORTHCOMING "charge" of the POG "TO THE MOON" !
May I suggest that you read back a few weeks in the ARCHIVES, to get the feel of the FORUM.

USAGOLD / Centennial Precious Metals, Inc.Step into our little workshop to fine-tune your portfolio's balance and round out its rough edges.#1211345/15/04; 12:31:37">gold -- a global calling card
Cometosedenial#1211355/15/04; 13:12:51

When I was a kid , I did a lot of dummmmmmmmmbbbbbbbbbbb
things............and now I am a father and I 'm getting to witness history repeat itself . When I complain about some of these incidents that are happening to me ....
my little brother who isn't so little anymore laughs and refers to my selective memory and makes fun of me ....He's allowed ; he is single and has no children.....

This kid thing growing up and doing stupid stuff is a cycle and it repeats itself.....

I think in many respects, this cycle and what happens in it is an allegorical as it applies to the financial condition our condition is in .......

One year my parents decided they were going on a trip in the spring and that they were going to be gone for a month ..

They decided to put my oldest Brother and his Wife in Charge....
( transfer of authority). My parents were strict disciplinarians and this transfer wasn't promoted and sold enough and described and induced and fomented to bring about in our minds clarity but in fact the idea of making this change brought fog ......into the collective understanding of my other siblings and myself.

If my parents didn't have standards and had been very permissive and dispensed their parenting responsibility in a Laissez Faire methodology ....the transfer and temporary change in administration of Discipline and Authority over our household would have been very smooth and natural..

That is not what happened....

Until these standards are understood and then internalized by the neophites (children) they must be enforced by a Overseeing parental authority that does understand the STANDARDS .

I would have respected and internalized the rules , had I understood them at that point in my life....but I didn't.

The first week end following my parents departure after this transfer of authority had transpired ; the wheels came completely off in THE NEW FAMILY ORDER....within our Family Discipline....
Each of my siblings and myself (3) had individually and independently planned a party...

The primary objective of my plans was to achieve some sort of elation using alchohol with friends. That is as far as the planning went ....there was no safety plan ; there was no perimeter devise of containment..there was not plan for clean up and for cover up of the effects of this planned elation......JUST ELATION AND FREEDOM ....

After the booze was introduced into this situation ; Things went completely out of control and after they did .......lots of damage was done which we attempted to cover up the next morning before I sent all my guests away early....My parents were called when it became apparent that authority for enforcing standards had collapsed. They made some alternate arrangements for Discipline and Authority to be implemented and within a week , we were under new management. My parents spoke with my uncle and aunt and my uncle and aunt made new arrangements for us and also informed us that our parents had been advised of all the shennanigans that occured on that fateful night and of the damage that had been done. I refer to damage here only in respect to what I caused becuause I caused enough for all of us put together. My siblings fires were contained.

There was a blanket of calm after that knowledge was distributed to me and peace in knowing that it was over and I had done my worst and the Conseqences were forthcoming but that those consequences couldn't be administered for three and on half weeks until my parents returned or until I next saw them which did extend to seven weeks.

There was an extended time delay between the causes we implemented which brought the fourth of JULY fireworks early that year and the consequences of the effects that came about from our breaking major rules and violating major standards of responsible ACTIONS....and throwing all caution to the wind in finding elation and expressing our
freedom .

The waiting wasn't easy and having the repercussions delayed but the repurcussions came and the overall tenor of my relationship with my parents was clouded for years with overhanging effects. You might say that we had an Emotional Recession......that kept getting deeper ,,,kind of like the Japanese Recession..

I'm reminded of this this morning because I believe that the Fed , Bankers , Mutual Fund Managers and Insurance Company executives have on a grand scale gone through the same stages as I did in this painful experience that I have just described......

They have in a sophisticated and grown up manner....thrown off the standards(they never learned the rules and internalized them ) that restrained their activity and held them to standards of right action and conduct in the industries that they serve. They have engaged in activities that promoted elation....(feeding their need to appease an internal desire: greed) and in the process have launched out into unchartered territory (massive debt and derivitives to excess and levels of overstimulation perhaps at a toxic level).They have all done all these things in the context of FRATERNAL NETWORKING which magnifies the Degree of OMMISIONS THEY HAVE COMMITTED and COMMISSIONS and the ENTHRONED DISHONESTY within which they COVER , DENY, and BELITTLE THEIR ERROR.

The Party GOT OUT OF CONTROL LONG AGO ......and the Disciplinarians that should reign in the ONgoing DESTRUCTIVE ACTIVITY.........have decided to be very Permissive...choosing not do deal with DEFICITS, DEBT , etc...and have added liquidity and tax cuts....from a distance in hopes the problems will disappear.....THerefore the consequences are DELAYED......
THe Damage has already been done.......and may not be undone......the full ramifications of this damage and the repercussions won't surface immediately but it will surface piecemeal and the process will endure for years....

WE might call this action : " ENDURING ECONOMIC BACKLASH ; SHOCK AND AWE".........who makes this crap up???

The place we are at now economically reminds me of the short period of damage control we tried to initiate the morning after our party where we tried to cover up the sources of our inflammation and the damaging effects of our acts....
but slowly different items one by one started showing up and information started flowing from our little hole into the bigger world into the awareness of my sister in law , my aunt and uncle and then to my parents who were on the European Continent......and the known repercussions to come began to trickle back to us in the hole we had created by our irresponsible acts.

In addition to the Systemetizing of ERROR that is occuring in the finanicial system...........

Today , there is increasing evidence of this occuring in our LEGAL SYSTEM ......we are systematically throwing off old standards that are 1000's of years in the making ....
to embrace the new.....

so we repeal the sodomy laws....
we (canada) declare the Bible or references in it to HATE LITERATURE
and we undermine in the courts Habeas Corpus ....and several other constitutional well.

IN addition , we are throwing off old standards of MILITARY PROCEDURE in suspending the RIGHTS OF PRISONERS on GITMO and we are going around those procedures in administering PRISONS IN IRAQ....(GENEVA CONVENTION ,ETC)

WIthout these safeguards , and protections to citizens here and around the world , it would appear as though we are experiencing isolated events of THE UNCIVILIZING OF THE WORLD ...


Perhaps to those who are engineering this PROTERROR APPROACH TO DECIVILIZATION , percieve this process (the systemetizing of error in throwing off standards)as GOING FORWARD IN AN EFFORT TO EMBRACE THE NEW?????????


THE COST OF ALL OF THIS won't be measured in BILLIONS
THe cost will be be measured PRICELESS. PRICELESS WILL BE OUR EVAPORATING FREEDOM which we all once were imbued with ..Unfortunately it will only be measured DEAR when it becomes RARE.....
But for now it has been taken for granted....

Liberty HeadWithout Lies, Truth Has No Context#1211375/15/04; 16:42:11

Just as truth derives value in context to it's polar opposite, gold derives value in context to fiat.
Embracment of fiat as wealth eventually leads to increased value for the authentic.
While imbalances can be tolerated for a time, understand it is the nature of the universe to flow towards balance. Often times this process of restoring the balance can be quite sudden and dramatic.
Count on it.
Like a scout, be prepared.
Get Gold.
Golden slumbers fill your eyes
Smiles awake you when you rise
-The Beatles

How did they know?

Best wishes

TownCrierInformation is a good thing to have, and we try to bring it to you.#1211385/15/04; 17:52:30

Check out the complete set of updated graphs for the U.S. $20 gold Liberties and St. Gaudens coins. Five price performance charts compiled by Jonathan Kosares are accessible from the left-hand column of the page linked in this post.

Maybe you will see opportunistic dips within a newly upward trend, all within a larger view of the historical pricing potential.

Consider a diversification within your diversification.


TownCrierAsia taking steps#12113905/15/04; 18:31:49


Ministers from the 10-member Association of South East Asian Nations plus China, Japan and South Korea ...[met] on the sidelines of the Asian Development Bank's annual meeting on the South Korean resort island of Cheju. 2000 in Chiang Mai, Thailand, that ASEAN Plus Three decided to set up a system of bilateral hard-currency swaps among their central banks so they could call on more firepower in case of a speculative attack on their currencies.

Swaps totalling $36.5 billion have been signed under the Chiang Mai Initiative, which proponents of the scheme see as the kernel of a future Asian Monetary Fund.

...Asia is a region of savers, but most of those savings flow overseas. The bulk of the region's official reserves of more than $2 trillion is invested in foreign-government bonds, especially U.S. treasury securities, and ASEAN Plus Three would like to keep more of the money at home for long-term investment by adding muscle to Asia's still-puny bond markets.

Malaysia's second finance minister, Nor Mohamed bin Yakcop, told the news conference that the issue of a common currency for Asia, akin to the euro, was not on the table.

But he added: "There's enough on the table for us to be excited about."

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

Consider the potential... more than $2 trillion in official reserves, and uncounted private holdings. If it turned toward something OTHER than the U.S. dollar-debt markets...


Paper AvalanchePhysical gold is separating from paper gold....#12114105/15/04; 19:14:20


I may be wrong. I often am.

Take care.

Paper Avalanche

Paper AvalancheDirection of failure.....#12114205/15/04; 19:27:02

IMO, the paper gold market is "failing down." As a result, from what I have gathered from observing the availability of readily deliverable coins on auction sites that I monitor, NO ONE is selling at these prices.

The sages on the golden trail predicted that the paper gold market would either fail up or down. IMO, it is far more politically acceptable for the market to fail down in as much as JSP is unable to discern the reality of the situation in the down scenario until it is way too late.

What next? Gas at $3.50 a gallon along with a commensurate rise in the price of groceries and other day-to-day staples but the "price" of gold will continue to plummet toward $300 (unless you actually want to buy the physical, in which case the a "physical premium" of about $300 will be attached).

Hubbert's Peak will meet the law of exponential growth in fiat currency such that within just a few months no longer will the USD tell the world what gold is worth. Physical gold will tell the world what the dollar is worth.

We are witnessing the greatest economic / financial cataclysm of our life time. Be cool. Buy gold from our terrific host. Don't try to save the world, but look out for #1 and your family and you will have a running start on the tribulations that the upcoming hyperinflation will bring.

Take care.


geGiant Head & Shoulders Formations#12114405/16/04; 01:38:25

Inverse head & shoulder formation is one of the most reliable chart patterns. See the following excellent link:

"Once resistance is broken, it is common for this same resistance level to turn into support. Often, the price will return to the resistance break and offer a second chance to buy" the link explains.

Long term charts from

Swiss franc:

Neckline (resistance at 0.77), left shoulder formed during 1997,1998. Head during 1999 to mid 2003. Right shoulder during 2003. Resistance has been broken during 2003, and currently a pullback to neckline occurs.

If one constructs an artificial Euro chart by converting the old Deutsche Mark data to Euro at the Euro conversion rate and combines with the Euro data, one gets a chart which is similar to the Swiss Franc chart, with resistance at about 1.18. Whether this data construction is valid or not, is not clear.

Japanese Yen:

Neckline at 0.85. Left shoulder during the first 9 months of 2001. Head up to mid 2002. Right shoulder mid 2002 to mid 2003. Resistance has been broken during 2003, and currently a pullback to neckline occurs.

BelgianThe price...the value of oil !?#12114505/16/04; 01:47:59

What a coincidence : Oil-owners indicate,... price-wise,... they want "substance" for their black gold and at the same time, news circulates about the US suggesting a withdrawel from Iraq,...followed by a lot of "ifs" and other attenuations of the bold statement !?

Having and living with, a higher $-POO is not such a big deal in itself. Euroland has been living with energy-costs that are at least double of the world's averages.
But is it "really" a "higher" $-price that the holders of the remaining oil(gas)reserves, are ambiating...or, it something else !?

I think that the $-POO >>> BEHAVIOR >>> for the next 6 months to come, is going to give us evidence or not, that there is much more behind the oil-screen than what the media are trying to make us believe, again. $-POO in uncharted territory >>> increasing volatility, without serious lasting price-easing in sight. Pressure cooker ?
We cannot have the oil-dollar-Gold crisis of the seventies, all over again, with a resulting status quo compromise in favor for the dollar-standard, again.

Is the dollar-occupation of the ME and other oil-regions, a ($)bartering position for the coming (monetary) negotiations !? Might be ?
Does the dollar realized that it has lost its status as most privileged reserve-currency ? Time has come to exchange substance for substance and the end of things valuable for 3 times nothing !?

After some informal chatting with people from the jewelry business...I came to a funny conclusion : They know "nothing" about Gold ! They unanomously are deeply intimitated by the CB's Gold terror. These industrial goldconsumers don't even question *** WHY *** these concerted CB actions on Gold are happening !

WHY are Germany and France dispatching goldprice depressing talks !!!??? WHY...?
WHY is it that everybody agrees so easely on China being a Gold accumulator and nobody ever questions if China is the only one accumulating Goldreserves. Nobody ever asks again what happens to the petro-dollars, flowing abundantly, again. Absolute petrodollar-silence !!! Strange !?

Or is it too early in oil's new price-cycle to speak about oil-wealth, again !? Or is it that oil is "forcing" the dollar-system into a hyper-infla inferno !? What will be the outcome (destiny) of Iraqi oilreserves !? How does one explains that lives are given for Iraqi freedom and that the POO goes through the ($40)roof...maybe climaxing around november, together with some more printing !?

Rising oilprices can easely be neutralised by bringing/shipping ever more into circulation. This comes down to nothing else than "forced" devaluation of the dollar. The POO-behavior in the next six months will tell us in what stage of the ongoing "enforcement" we are.

misetichThe Taxman's Ever-Costlier House Calls#12114805/16/04; 05:50:27


Skyrocketing property taxes are the dark side of the real estate boom. And they're sure to keep climbing even if resale values cool

Thanks to the twin forces of a booming real estate market and higher costs facing local governments, property taxes have been rising sharply the last few years. According to Census Bureau data, from 1999 to 2003 property-tax receipts jumped 25%, to $297 billion. Over the same five years, state and local income taxes rose just 3.6% for individuals and fell 6% for corporations.
Already judged by experts to be the most hated tax, property taxes are about to get even more loathsome. That's because they tend to lag behind the real estate market. In the coming year, as interest rates rise, it's likely that the housing market will start to stall at the same time property taxes continue their ascent. In some of the country's most inflated real estate markets, homeowners could find that they're paying more in property taxes at the same time their house is becoming worth less
So far, however, the direction of both property taxes and home prices is up, up, and away. In 1998 the average home value in the U.S. was $121,000, and the average tax due was $1,780, according to the Minnesota Taxpayers Assn., which conducts a detailed nationwide survey of property-tax rates every two years. Five years later, the average home value was up to $168,000, and the property tax bill had climbed to $2,550. That's a 43% rise in property taxes, while home values climbed 38%.

Just as the Stock Market bubble was encouraged and endorsed by the Feds as it increased tax revenues through capital gains taxes (hence increasing their own remunaration, status)the Housing Bubble is aiding local govt's much the same way. Thus the See No Evil, Hear No Evil doctrine adopted and spun by Sir Greenspan

These type of "band-aids" approaches embraced by the Feds are not sustainable. Moreover ill winds are brewing as ratepayers are beginning to rebel and revolt.

For the game to continue the Feds require ANOTHER stock market bubble - to repeat the benign cycle - and keep local governments afloat (lets not forget UNDERFUNDED PENSION PLANS which are also SM dependent)

SM have not acted well in 2004 specially considering that it is a presidential election year - corporate insiders have been sellers - even though corporate profits are rising-

Mutual funds returns in Q1 were moderately flat - and 2nd Qtr has thus far less than stellar- as the inflows have slowed

The PPT has their has their hands full as they attempt to control free market forces. A downturn of even 10-20% spells BIG TROUBLE (confidence and reduced perceived wealth) and the odds are HIGH that it will IF oil prices remain high.

All Aboard The Gold Bull Express - Part ll

misetichTight Oil Supply Won't Ease Soon #12114905/16/04; 06:26:19


Analysts say that at most 2 million to 2.5 million barrels a day of spare capacity could sustain production for any length of time. Nearly all of it is in Saudi Arabia; the rest is mainly in Kuwait and the United Arab Emirates.

For years, whatever the markets needed to stay on an even keel, the Kingdom of Saud provided. But since the late 1990's, the country has started to pursue a more independent oil policy. To increase its oil revenue and support a growing population and a generous welfare state, Saudi Arabia has chosen to hold back some production and let the price of oil rise, said Leonidas F. Drollas, chief economist with the Center for Global Energy Studies, a London consulting business. OPEC as a whole, led by Saudi Arabia, tried to cut output and make it hard for refineries to build oil stocks, driving prices higher.

But with the price of oil at $40 a barrel and more, the Saudis are clearly unnerved. Mr. Goldstein said they are trying to sell more oil now, but have found few takers, because of the high sulfur content of their crude. Instead, refineries in China and the United States are competing for the more limited pool of low-sulfur oil. "There is no sweet crude spare capacity anywhere in the world," Mr. Goldstein said. "There is no cushion for the next surprise."

"Saudi's oil is high sulfur content" "China and US are competing for the more limited low-sulfur oil"

The Saudi's are the "good guys" that are willing but unable to help.

All Aboard The Gold Bull Express - Part ll

misetichWhy the Saudis May Not Rescue Oil Markets This Time #12115005/16/04; 06:55:46


In fact, since the terrorist attacks in September 2001, the influence of the United States in Saudi Arabia's economy and internal affairs appears to be weakening a bit. American companies built much of the modern Saudi economy - Saudi Arabia Airlines started as a unit of T.W.A., for example, and Aramco began as a venture of four American oil companies. Recently, however, European, Chinese and Russian companies have won important contracts in areas like natural-gas exploration. It is also less clear than it used to be that concerns over gasoline prices in the United States influence Saudi Arabia to produce more or less oil.
An indication of whether oil industry executives think Saudi Arabia is about to force a quick decline in oil prices came last week, at a luncheon of the Permian Basin Landmen's Association at the Petroleum Club in Midland, Tex. Speaking before 150 members of the association, T. Boone Pickens, the West Texas oilman and financial speculator, predicted that oil prices would never fall below $30 again.

"I think you'll see $50 a barrel," Mr. Pickens said, "before you see $30."

INFLATION ADJUSTED PRICES oil are dirt cheap comparatatively with the 70's

Reinvestments have not occurred for a variety of reasons in the last decade. For one enough supply existed to satisfy global demand.
For ANOTHER geopolitical situation in the Middle East following the US-Iraq war of 1990 has not conducive in aiding much needed reinvestments.
Thirdly China's sudden rise as an economic power - may have caught many by surprise
Its almost certain that the "2004 Oil Shock and Awe" is materializing and the consequences are underestimated by many-
The savy one's are protecting their wealth by adding PHYSICAL GOLD to their invstment portfolio.

All Aboard The Gold Bull Express - Part ll

OvSA Number Graph of Hyperinflation.#12115105/16/04; 07:04:19

Wholesale Price Index in Germany:

Jul 1914: 1.0

Jan 1919: 2.5

Jul 1919: 3.5

Jan 1920: 12.5

Jan 1921: 14.5

Jul 1921: 14.5

Jan 1922: 36.5

Jul 1922: 100.5

Jan 1923: 2,785.0

Jul 1923: 194,000.0

Nov 1923: 726,000,000,000.0


Humble PieThe Fifth Horseman of the Apocalyse#12115205/16/04; 07:35:12

Time to reread the timely discussion by our host MK,you will find it in the Hall of Fame .
Humble PieThe Fifth Horseman Of the Apocalyspe 4/6/99#12115305/16/04; 07:44:33

You will find it in the Guilded Opinion not Hall of Fame . Sorry for the miscue
apollo's golden chariotQuestion for Sir Belgian#12115405/16/04; 07:48:48

Sir Belgian:

Your wonderful city of Antwerp has doe much to uplift the human spirit over the ages. during the early modern period it was a major market for the sale of bullion specie imported from the New World to finance Europe's burgeoning trade with Asia. During the 19th century Joeph Conrad selected it as one of the sites used in the narrative for his classic novella, the heart of darkness. the city, I believe, is the home of that excellent brew, Stella Artois, a rich and refreshing tonic during the warm summer months both for tourist and native alike. And who can forget the outstanding artistic imagination that became embodied the world famous Mannequin Pisse. (Someone in my home tome in the USA actually has an exact replica of the latter who diligently waters parts of his garden during summer's swelter.

I would like to benefit from your astute analysis with regard to a gathering problem in the petroleum market. Local TV comentators, namely Steve Leishman of CNBC, have sought to assuage the disgruntlement of local auto owners over the rise in the price of oil. Leishman argues that when restated to the purchasing power of 2002 dollars, the actually all time high in oil prices reached in the 1970s would be equivalent to $74+ in current dollars. IMVHO such an announcemnt is an early signal to prepare the public for such a sharp price move.

Now if that should come to pass and oil liftings are still denominated in $$$$$$$ what happens to the exchange rate of the $ vs, the new kid on the block the euro?

Here are some facts to chew on, the amount of dollars necessary to finance the annual ME oil liftings will rise from about $1 trillion (for $25/bl oil) to about $3.5 trillion. this major shift in the demand curve for $$$$ would have negative implications for euro.

Higher prices would induce greater secondary production in the US and North Sea offsetting the effect of the price shock somewhat for Anglo America.

Europe's cost of goods sold goes right through the ceiling, further aggravating its poor employment picure and perhaps leading to widespread political change.

USA military forces dominate the Persian Gulf producing region making less likely the prospect of shifting oil denomination from 4 to euro.

Another winner under this scenario is Japan sitting on a mountain of $.

Gold perhaps will go up but more likely in euro terms not $ terms.

Such a secular price rise easily can mop up much of the excess $liquidity that many have long worried about.

Your critique or that of any board members is certainly welcomed. I have benefitted greatly from your many cogent insights.

misetichRiyadh scraps euro foreign reserves policy#12115505/16/04; 09:12:31


BRUSSELS — Saudi Arabia has abandoned its policy of diversifying foreign reserves into euros, deeming the euro zone unfit to manage a major world reserve currency.
"The euro has not yet gained a competitive status against the dollar as a major reserve currency. People are not going to switch to euros until European financial markets become more competitive, deeper, more liquid and diversified," Mr. al-Jasser said.
The disenchantment of the Saudis — who have about $200 billion in reserves and government investment funds at their disposal — is a blow to the European Central Bank, which is keen to promote the euro as a competitor to the dollar.
Just a year ago, the Saudis seemed to be infatuated with the euro, accumulating an estimated 30 billion euros in foreign reserves between April and June 2003.
The European Union has enjoyed more success promoting the euro in Russia, where the central bank has upped the euro share of total reserves from 10 percent to 25 percent since early 2002.
Euro deposits in private banks have been exploding, a phenomenon that is likely to increase as Poland and the Baltic states join the euro in 2007.
Russia has also signaled that it intends to price its oil and gas exports in euros. The move is part of a deal between Russian President Vladimir Putin and German Chancellor Gerhard Schroeder aimed at challenging American global dominance.
Iran has been pushing for a similar switch to euro invoicing for Middle East oil exports, but Saudi Arabia has used its controlling influence over the Organization of Petroleum Exporting Countries as the world's number one producer to quash the idea

The Saudi's are again being "the good guys" supporting the depreciating US $. These same "good guys" pulled out billions from US soil following 9/11

The US $ is in deep trouble. IF the Saudi's reaffirmed support for the Euro it would be END GAME, thus the US $ is being maintained alive, by a respirator, simile to a patient in deep COMA.

Saudi's words are not to be confused with their actions. By stating "Euro's lack of liquidity" its an undisputable fact as the US $ still IS the world reserve currency

Looking Ahead - Rather Than Behind

The US $ main support is from ASIA, and some Gulf states in the Middle East - and to a lesser degree in South America - and the Anglo-Saxon world, including Canada, Australia, UK etc.

However market share is BEING LOST TO THE EURO on a daily basis. As an example within the enlarging Europe and its neighbour - Russia

Russia is a 'natural' for pricing Oil in Euros being market inderdependent in trade. Iran is not too far behind.

"ARAB HUMILITATION' and current US foreign policy make it unlikely for an enlargement of US $ reserves, US investments in the Middle East regardless of the Saudi's posture, without rebel/resistance reaction and reprisal.

South America is culturally closer to Europe and Brazil's, Venezuela and even Mexico standing up to US negotiating tactics are an attestment of the cultural differences. Thus US $ erosion can be expected in that area also.

Which leaves ASIA as the main supporter of US $ - The rising economic power - China - is spreading their wings - and trade with EU is expanding. China is presently running a trade deficit and projecting a narrow trade surplus by the end of 2004 - which makes unlikely they would expand their US $ foreign reserves - They have been divesifying slowly into Euros and COMMODITIES, including GOLD.

Further erosion of US $ can be expected from Muslim countries as they attempt to find alternative solutions to the US $ re: Gold Dinar

Whilst CHINA grows, Russia economy improving as they exploit their natural resource wealth and EU expands, integrates and harmonizes its now 25 member Nations the prospects of Euro's ascend as a world currency are bright.

On the otherside of the coin, the Anti-Anglo backlash from Iraq/Palestine provides an uphill battle for US dominance in the world stage, similar to the Vietnam of the 70's

JAPAN is on the ropes. The number 1 nation of US $ reserves and investments is LOSING its 'war' with an ascending CHINA. To protect its diminishing assets denominated in US $ it has "averaged down" by buying some more further complicating its position and painting itself in a corner as they would have to dispose of accumulated US $ in case of internal economic turmoil or US economic difficulties, which would put additional pressure on the US $

Its little wonder Warren Buffett has placed a bet against the US $

All Aboard The Gold Bull Express - Part ll

SkydogShipping gold bullion.#12115605/16/04; 09:37:52

Question for the community....

My wife and I decided to use this last run-up in gold to take some profits off the table and buy that little farm in Costa Rica we've been thinking about for some time now.

Now, thanks to the incredible insight and wisdom we have gained from our extended family here on this forum on investing in precious metals, we appear to have a problem with the physical we have accumulated over the last four years.

We are wanting to relocate our stash for safe keeping to a bank in Europe, but can't seem to find a way of moving it. I have tried DHL, FEDX, luck!

Does anybody know the answer to this? Also, what kind of red flags would something like this raise with the Patriot II boyz as possibly being viewed as terrorism?

Once again, we can't express enough our gratitude for the collective wisdom expressed by those we call family here on this forum. It is our most fervert prayer that the systemic collapse of the financial system we see happening before our very eyes won't be as bad as many portend.


misetichFannie Mae faces more income issues#12115705/16/04; 09:47:43


SAN FRANCISCO (CBS.MW) -- In the latest criticism of Fannie Mae, this week's Barron's says the mortgage finance behemoth is on shaky ground regarding how it records billions of dollars of losses and presents its financial appearance to Wall Street.
Barron's cover story says the root of the issue is how Fannie Mae (FNM: news, chart, profile) and its cousin Freddie Mac (FRE: news, chart, profile) manage to keep derivative financial holdings off income statements.
Yet a Barron's analysis of Fannie's picture says the company took a major hit to earnings as mortgage rates dropped in recent years. Prepayments on mortgages trimmed the portfolio gains that Fannie would otherwise have received, and it was further hurt by the locked-in rates of its financing sources.

To avoid recording a loss, says Barron's, Fannie Mae used a series of legal mechanisms to transfer negative numbers to its balance sheet under "accumulated other comprehensive income," or AOCI.

The AOCI strategy lets Fannie Mae "burn off" losses over time. Without that, says Barron's, Fannie's 2002 earnings of $6.4 billion would have been overwhelmed by $8.9 billion in cash-flow hedging losses.

Barron's says $3 billion in losses that were recognized in 2002-2003 "pale against" $19 billion paid to settle underwater interest-rate swaps in those years. Indeed, a Barron's comparison of 10-K filings says the company's interest rate swaps on its books rose from $23 billion in 2002 to $149 billion in 2003. The aim of the rising use of derivatives, says Barron's, was to defer losses instead of recognizing them.

Fannie Mae can pull this off, notes Barron's, because it has the legal status of a government-sponsored enterprise, or GSE, and can exclude its AOCI numbers from the calculations of capital that are used to support its $1.35 trillion in mortgage-backed securities. The 1938 law setting up GSEs includes Freddie Mac.
But Barron's also says that as pressure continues to mount on Fannie Mae to provide a clearer look at its finances, the company could be on the brink of having to disclose income restatements that bring an end to its long run of unfettered profitability.

Present regulations, market governance are being dominated, influenced by lobbyist, investment bankers who continually circumvent rules and laws which they themselves influence to establish.

Barron's last paragraph is an attestment to continued Wall Street deceptions - setting up phoney corporations to aid, hide "off-balance sheet items and derivatives losses"

"the company could be on the brink of having to disclose income restatements that bring an end to its long run of unfettered profitability."

GSE's an accident ready to happen as they fight Murphy's Law

All Aboard The Gold Bull Express - Part ll

Gandalf the WhiteSkydog (05/16/04; 09:37:52MT - msg#: 121156)#12115805/16/04; 10:04:55

Shipping gold bullion.
Tried Brinks ?

CometoseFannie Mae & Freddie#12115905/16/04; 11:59:43

I'm sorry ; this just looks to me like another GUTTING OP ala ENRON .....where the managers are allowed to set up a bunch of off shore Trade shops and Proceed to EXTRACT ALL THE CAPITAL FROM THE COMPANY...THE MONEY IS NOT GOING TO MONEY HEAVEN : SOMEONE IS the SYSTEMATIC LOOTING OF AMERICA.....wonder who is on the other side of those losing bets at FANNIE MAE....
It May be the same people that were on the other side of all ENRON'S LOSING BETS>.........

Someone should to an investigative report into this ; it could be very revealing.

USAGOLD / Centennial Precious Metals, Inc.A 24-hr workshop for tinkering on your portfolio over the weekend.#12116005/16/04; 12:51:20">gold -- a global calling card
OvSTesting the Water.#12116105/16/04; 19:24:53

Posting to see if this USA Gold is still
alive and kicking. I can see how this re-
peated knocking down of the gold and sil-
ver price produces emotional burn-out.
But, the last posting was 5 hrs ago. Time
to wake up! Otherwise I'll post something
controversial; that'll at least wake up
White Hills who'll accuse me of smoking
something. Cheers. OvS

Mr GreshamWell, OvS#12116205/16/04; 21:01:38

I was just swooping in to confirm that my suspicion about a new book was correct.

The Coming Generational Storm, by Kotlikoff and Burns, features gold as its first recommended alternate (non-Dollar) portfolio to get through the default of government promises. Also citing the loss of reserve status to the Euro, and maybe then to Yuan.

More later, if I get the chance, but lots of people are going to be passing this book around.

CometosePeace Breaking out in Iraq#12116305/16/04; 21:02:54

WWIII postponed.....
Evidently the war on TERRORISM isn't doing enough for GEORGE BUSH IN THE POLES now ........

we get peace........
and perhaps IR's will ease and the stock market will get a little rally or NOT.........

and everyone will forget about all the STUFF THAT HAPPENED IN THE PAST THREE YEARS.........

PEACE AND LOVE..........


FOR THIS REVERSAL TO HAPPEN if it is true .........means that something dramatic has taken place....SPIRITUALLY ..

IF GEORGE is going off the WAR FOOTING , there must be something NEW to pin his NEXT FOUR YEARS ON .........
I don't know how one would be able to TOP WHAT HE JUST DID!

THE ROLLER COSTER RIDE WE JUST ALL WERE A PART OF reminds me of the scene (MICROCOSM) in GODFATHER III where Michael Corleone has his diabetic attack in his kitchen and for several moments gets "TAKEN OVER" and goes completely out of control.....

THIS MAY ALL BE MORE SMOKE AND MIRRORS>>>>>>THAT is a bet that you might be able to make some money on .

George built his whole image on this war........if he dropst that War COSTUME ........HE WILL BE ....
POLITICALLY NAKED.........NOBODY is going to vote for that ...

approach to MANIACAL EMPIRISM.............and a new EMPEROR.

QUITE A PIVOT .............Perhaps the DOCTOR DECIDED not to RENEW GEORGE's PRESCRIPTION indefinitely...

I would guess that if this pans out ......MR GREENSPAM won't have to raise interest rates.......
and we will have a resumption of the Dollar slide and the GOLD RISE

Old YellerMr.Gresham#12116405/16/04; 21:17:03

From one of the write in reviews,

"Finally, the authors also recommend gold as an investment, especially through gold mining companies. I think only a gold bug could follow this recommendation. Gold has little merit as an investment. It's proclaimed inflation hedging benefits have melted away twenty years ago."

Oh,my,what are we doing hanging around here?

Black BladeJust a Few Quick Sunday Comments#12116505/16/04; 21:29:14

Before I get back to some work and number crunching a had to pop in for a quick review of the last couple of days posts:

TownCrier (5/15/04; 17:52:30MT - msg#: 121138) – While gold bullion gained an impressive 66% from its lows to recent highs, uncirculated U.S. $20 gold Liberties and St. Gaudens coins (depending on rarity an condition) actually did better with an average 5X increase in value (in US dollar) terms. Another reason to consider pre-1933 US gold coin. Not bad for a "hard asset". Similar gains for uncirculated Morgan Silver Dollars. Now (better late than never) to give the Castle Staff a call for an ever rarer investment. Geez, there are those spending hundreds of $millions for classic art.

Skydog (05/16/04; 09:37:52MT - msg#: 121156) – Good question. I would probably look for a US based place to put physical already accumulated as it is next to impossible to move offshore in quantity unless you are a "preferred customer" of some large institution (or someone like Warren Buffett). A good floor safe hidden at a trusted US-based relative is a possibility. You will have to think that one out. Still Costa Rica is one of a few stable Central American countries around. I have a friend who moved to Nicaragua and bought some land.

OIL and NatGas – I don't see prices for either collapsing anytime soon. Refiners still have to close down to change over for reformulated summer blends, Domestic NG production continues to fall regardless of more drilling but little infrastructure to ship and lots of high target US zones "off-limits" to exploration and production. I think we have already "peaked" on all hydrocarbons worldwide expect for NatGas. That will be the next rush and high competition between the US and the rest of the industrializing world.

Cometose (5/15/04; 13:12:51MT - msg#: 121135) – Interesting point is that once a viable government no longer exists in a state of was, combatants are no longer POWs but criminals and not covered by the Geneva Convention. Thus the fuss over the prisoners of the 1A and 1B blocks of the Abu Ghraib are mostly Syrian and non-Iraqi prisoners (some are remnants of the Iraqi Saddam Fadayeen who fought on after the fall of the Iraqi leadership). The reason the prisoners at Gitmo in Guantanamo Bay do not have protection under the US Constitution is that they are neither US citizens or on US territory (we rent the military base in "perpetuity" due to treaty with the Spanish after the Spanish-American War). There are two (actually three if you count Masouhi – the so-called "fifth Hijacker") who are held under the dubious "Patriot Act" until fairly recently unable to communicate with counsel. The first two sets of prisoners may yet have a way out of American hands. The Abu Ghraib prisoners may be turned over to the new Iraqi Council and that does not look good for them. Several Gitmo prisoners have already been set loose and returned to Pakistan/Afghanistan after interrogation. The US courts are still struggling over the "rights" of those held under the "Patriot Act". I think there will be more to be heard on this though personally I could care less about the "rights" of the naked cruel terrorists with female underwear on their heads, while on a leash who bashed infants brains against prison walls, raped daughters and wives of innocents, and cruelly and slowly tortured to death innocent people not of the "right tribe". Call it Karma if you will. For two years we had to fight and execute German terrorists after WWII who killed allied soldiers and who called themselves "Werewolves" (no trial no nothing but a firing squad).

misetich (5/15/04; 07:37:02MT - msg#: 121126) – China expects a "Soft landing" eh? Hmmm… where did we hear that before? Oh yeah, that's right! Just before the "New Economy" nose-dived eating up as much as 80% of retirement funds for those poor people now saying: "Want fires with that" or "Welcome to WalMart". Yikes!!!

Boilermaker (5/15/04; 06:13:46MT - msg#: 121124) – Interesting that you bring up the differences of the eastern vs. western coals. The usual higher sulfur coal that is mined in the east (ie. Appalachia region) has a higher BTU content per ton (roughly 2800 BTU) than the low sulfur coal (ie. Powder River Basin, Southern Utah – now the recently formed "Escalante Staircase National Monument, etc.) with a lower BTU content (roughly 2400 BTU/ton). That the western coal is cleaner it also requires a longer run of transportation costs to eastern markets. Unfortunately the Escalante Coal deposit is "World Class" and the only other known source of "World Class" low sulfur coal is found in Indonesia owned by Lippo Bank. Funny thing is that Escalante Staircase National Monument is no Zion, Canyon Lands, Monument Valley or Bryce Canyon, but is truly a wasteland desert. The designation of the National Monument status came after a well known "campaign contribution" (aka "bribe") to the Clinton/Gore campaign. The minerals from these State Education lands ceded by the Federal Government well over a century ago were under a claim concession and was likely to be mined with royalties to the state of Utah for the Sate Education Fund. However, Clinton/Gore came in third place behind Ross Perot twice and I suspect that and the "bribe" from Lippo Bank had some influence in the decision.

- Black Blade

Life,Liberty,PropertyWhat is in store?#12116605/16/04; 21:35:16

First time poster. I thought I'd pick people from the sites brains regarding what I tend to believe will be a worldwide downturn. Apocalyptic? Perhaps, but I think Europe will be affected more than some assume. I have reviewed a number of the many useful links posted today which tend to support this. Say the dollar goes down. Great Britain is historically a major investor, so some would assume it would bear the brunt of the storm. But would they? On the other side of the globe, China has been playing games with money for years. I have never looked at it as a viable investment opportunity due to a basic distrust of government being involved in business, and communism is the epitome of that view. If the dollar goes under, how long do you think some of the money games in China will remain hidden? Between the China bust (hidden by an investment based boom according to one of the stories) and the dollar bust, what will happen to Japan and the Asian tigers tied to China and the USA? Flip back to the other side of the globe in the southern hemisphere. Latin America is not in great shape to begin with (Venezula, Brazil, Argentine, and most of the rest have long standing internal problems). Much of their current recovery is due to supplying the China boom according to the article. Global economy? Folks, Germany has a lot of investment in China and elsewhere. Just because you read about American business scandals doesn't mean there aren't scandal waiting in Europe. Perhaps I am wrong, but the only countries that were unaffected in the last big bust were already at the bottom. I have been a firm believer in gold for years before I had any money to invest in it. I have some now, but if things go south in a big way soon, it won't be near enough. I have been thinking about getting some Euros, but the price of gold just keeps drawing me back. Carpe Oro.
Black BladeA hungry dragon awakes #12116705/16/04; 22:09:46,6903,1217643,00.html


There are two central reasons for oil price hikes. A lack of refining infrastructure following consolidation within the oil industry and China. The country's overheating economy guzzled about 6 million barrels a day in the first quarter of this year, 15 per cent more than a year ago, according to Goldman Sachs, making it the biggest oil consumer after America.

The thirst for oil is driven by a 75 per cent increase in car ownership, coupled with a shortage of electricity generating capacity, leading institutions such as hospitals, hotels and schools to buy back-up generators powered by diesel. Last year, China's economy grew by 9 per cent and its stock market climbed 90 per cent.

Ten years ago, China burnt 5 per cent of the world's annual oil supplies, according to Cambridge Energy Research Associates. By 2010, this figure could double, says the energy consultancy.

Energy black-outs in Shanghai are common and Chinese factories face energy rationing this summer. The country is racing to install 84 gigawatts of generating plant in the next two years - nearly double the UK's entire installed capacity.

The country is currently a net exporter of coal, which supplies two-thirds of its energy requirements, but this is expected to change. World coal prices have risen by 50 per cent in six months but, given future Chinese demand, we have seen nothing yet.

The crisis will be a permanent feature of geopolitics. The race for oil reserves has seen Hu Jintao, the Chinese president, tour West African states in a bid to get guaranteed supplies - in a direct confrontation with George Bush, who undertook the same tour last year.

And it will mean China embracing nuclear power, plus growing confrontations with Japan, particularly over the routes of pipelines and possible mineral reserves in the South China Sea.

Black Blade: Now there is competition for any forcoming NatGas and Oil should Exxon's exploration and production efforts come forward with success in the Sakhalin Project. Japan and China are beginning to lock horns on this possibility. Every postwar recession has been preceded by an energy crisis, so the decline of economically viable reserves at current prices forecasts a worrisome outcome. No "Super Giants" have been discovered since the discovery of the Canterell Field in Mexico in 1976, the same year that contruction of new North American refineries ended. Get prepared and get "portfolio insurance" against what is coming. Currently Gold and Silver are selling at bargain basement prices.

Gandalf the WhiteWELCOME Sir Life,Liberty,Property#12116805/16/04; 22:10:29

Life,Liberty,Property (05/16/04; 21:35:16MT - msg#: 121166)
What is in store?
GREAT first post !
My Crystal Ball is foggy in those same areas too.

Black BladeChina's banks face crisis #12116905/16/04; 22:15:53,6903,1217630,00.html


China's banking system faces a mounting crisis that threatens to further destabilise the country's teetering economy. Speculation is growing that the authorities are preparing to inject at least $65 billion to shore up two state banks reeling under the weight of non-performing loans, where borrowers cannot even afford to pay interest on loans, let alone the capital.

This comes just months after Beijing pumped $45bn into its other two state banks. China is raiding its foreign reserves to prevent a run on a major Chinese bank and smooth the way for a flotation of two of its banks later this year. This, however, looks unlikely given the current state of the sector.

'The problem is very serious,' said Allan Zhang, a former economist at China's trade ministry and now head of the China Business centre at PricewaterhouseCoopers in London. 'Chinese banks' insolvency is an open secret. Although they are backed by state guarantees, their position is having a serious effect on the economy.' Standard & Poor's says 45 per cent of loans at China's four state banks, which account for more than 80 per cent of commercial lending, are non-performing. Pumping in $65bn will wipe out 25 per cent of the country's foreign exchange reserves in six months.

Black Blade: No wonder the PBC is selling US debt and diversifying (some into Gold). also explains why the country has liberalized the Gold and Silver ,arket.

Black BladeWorld braced for oil shock #12117005/16/04; 22:22:12,6903,1217644,00.html

As petrol prices nudge £4 a gallon, Observer writers ask what is driving the rise - and whether good times are over


If Tony Blair were to heed the wishes of backbenchers and cool his ardour for George W Bush, he could add a PS: George, tell your people to buy smaller cars. Crude prices that had hovered around $40 for close to a week - thanks to the 'war on terror' and a shortage of the right kind of petrol in the US - hit a 13-year high of $40.77 on Wednesday with news that US gasoline stocks had fallen by 1.5 million barrels.

British petrol prices are rising towards £4 a gallon, road lobbyists are grumbling and there is an election on the horizon, so this was not good news for Blair.

For the markets, which expected US stocks to rise, it was a shock. Christopher Bellew, an oil trader at Prudential Bache in London, said Wednesday's figures were merely the latest in a bewildering slew of news that has consistently surprised traders. 'A lot of people have been caught out of step with the market and been very surprised by its strength,' he says. Other traders are pointing north to $50.

The gloom has been unremitting. In March Opec, in a move orchestrated by Saudi Arabia, announced a 1 million barrel a day (b/d) output cut to stem stock building among consumers and prepare for seasonal decline in demand. Shortly afterwards data showing a 1 million b/d increase in already massive Chinese demand were published by the International Energy Agency (IEA).

Black Blade: North Sea and ME oil has "peaked". Now China wants more oil. The Iranians recently backed out of a deal with China for increased oil exports. "Interesting Times"

Black BladeEffect of liquefied natural gas sabotage murky Transport of gas worries regulators#12117105/16/04; 22:39:59


WASHINGTON — U.S. regulators have no scientific models to accurately predict what may happen in an accident or act of sabotage involving a tanker filled with liquefied natural gas, a new report said Friday. The potential danger of hauling LNG has raised concerns since the Sept. 11, 2001, attacks and as energy firms propose building some 30 new LNG receiving terminals to supply the U.S. market. LNG is natural gas chilled to minus 259 degrees Fahrenheit for transportation aboard tankers from Algeria, Trinidad, Qatar and other exporting nations.

Four U.S. terminals operate in Maryland, Georgia, Massachusetts and Louisiana. But with domestic gas production flat, several companies want the Federal Energy Regulatory Commission to approve plans to build new terminals. A new report commissioned by FERC said scientific models don't reflect how LNG is shipped or how it is likely to spread from a spill in various weather conditions.

"No existing model for an LNG spill appropriately accounts for these effects. It should be recognized that the recommended model is based on the assumption of smooth, quiescent water," the report said. When natural gas is cooled to LNG it shrinks to less than of its original volume. After it arrives at a terminal by tanker, LNG is returned to a gaseous state. As a liquid, LNG will neither burn nor explode, ABS Consulting said. But if a tanker spill were to occur, the LNG would turn back into a gas as it reacts with air and water temperatures. The gas vapors could ignite.

Black Blade: When an LNG terminal explodes it's like a small tactical nuke minus the radiation. We have seen precendent in the past. Last year when an LNG tanker caught fire off Hong Kong it was ordered several miles offshore until the fire was contained. Once the LNG is exposed to normal temperature the escaping gas ingnites as the pressurized LNG and friction spontaniously ignite. That's why no one wants an offloading terminal in "their backyard". Some remember Oil City, Texas when a freighter loaded with Ammonium Nitrate caught fire and killed thousands and destroyed the city. LNG would likely be as bad if not worse. After 9-11, the mayor of Boston refused to allow LNG tankers pass into port to Fall River.

OvSSocial Security.#12117205/16/04; 22:45:19

I've been thinking about Social Security and
how the funds paid in have been used for
current projects and how in the future there
will not be enough to cover the baby boomers.
Sometimes before the well runs dry I suspect
the following will happen:
The Social Security will be renamed "Social
Security Insurance" and will be only paid out
to retirees who don't meet a specific minimum
of income and assets.

It also occured to me that unlike the super
inflation 1923 year in Germany, when over 300
mills were supplying over 2000 printing presses
printing D Marks 24 hrs a day, this time around
the electronic transfer of funds needs only to
have a small change in software to blib an
inflation adjusted amount to each receiving
senior citizen.

For years now I have been reading, that inflation
is the excess printing of money chasing a limited
amount of goods. Seems to me, that the increasing
loss of faith in paper-promises produces a commen-
surate demand of higher prices by "real things".
I must be getting dizzy or something. After re-
reading the above statement it seems to say exactly
the same thing in different ways, or does it? Time
to retire...OvS

Black BladeWill oil prices double this summer? #12117305/16/04; 22:49:56

At the end of last week Russian oil producers threw in the towel saying they could not deliver any more oil. Oil prices spiked to the highest levels in 21 years. But this may just be the start of an old fashioned oil crisis.

Over the past 30 years the world has been through several major oil shocks, or oil crises in which the cost of a barrel of oil suddenly shot up causing consumer and asset price inflation, higher interest rates, and then an economic downturn or outright recession. Certainly capital markets voted with their feet last week, and investors headed to the exit doors. But this may just a sign of things to come.

One statement earlier last week from Opec sent a chill down the spine of market watchers. This was a declaration from the oil cartels' president that there was nothing Opec could do about rising prices in current circumstances. For those who respect the Saudi Arabians as the great swing producers of the oil market this is very sobering. If Opec can not release enough oil to satisfy the thirst of an expanding world economy led by China and perhaps India, then who can? Russia? We got the answer on Friday last week. The Russians are up to 9.3 million barrels per day, and can add no more supply. They are at their physical limit.

Given that this is a US Presidential election year, and the Fed has no desire to dampen this year's economic success story, we might see oil prices surge a lot higher before the inevitable medicine of high interest rates is taken. And the higher oil prices rise the more aggressive those interest rate rises will have to be. On the other hand, in order for the oil producers to invest in new capacity to meet rising real global demand for oil then we will probably continue to see oil prices well above the depressed levels of the 1990s. Otherwise, there will just be another supply and demand crunch, and another business slowdown or recession.

So higher oil prices are probably here to stay, and today's shock headline might be tomorrow's planning baseline. In the meantime, oil prices could double this summer.

Black Blade: I would not be surprised in the least. As I have said - "Peak Oil" is now and prices have no where to go but higher and along with it - NatGas and Coal. No need to worry though - it isn't counted in the US Inflation data (PPI and CPI). Like the cop at the blood splattered crime scene: "Move along people - nothing to see here".

Black BladeOops! - Source#12117405/16/04; 22:51:23

See link for previous post.
OvSMr. Gresham#12117505/16/04; 23:04:45

Thanks for your acknowlegement.I have followed
your messages for years and find you very

Personally I think we'll be getting through some
rough spots for a number of years, that is finan-
cially speaking. But somehow I'm convinced that
the USA will undergo a marvelous transformation.
I am actually looking forward for a new spirit,
a revival in art and learning, which will be a precurser of a World Renaissance. Amen. OvS

Black Blade(No Subject)#12117605/16/04; 23:10:23

Is oil economy running on empty?

YES: Whatever we do, prices are going up because of limited supply, growing demand from other nations.


Before the start of the Iraq war his media empire did so much to promote, Rupert Murdoch explained the payoff: "The greatest thing to come out of this for the world economy, if you could put it that way, would be $20 a barrel for oil." Crude oil prices in New York rose to almost $40 a barrel last week, a 13-year high. (almost $42/bbl on Friday)

Those who expected big economic benefits from the war were, of course, utterly wrong about how things would go in Iraq. But the disastrous occupation is only part of the reason oil is getting more expensive; the other, which will last even if we somehow find a way out of the quagmire, is the intensifying competition for a limited world oil supply.

Oil is a resource in finite supply; no major oil fields have been found since 1976, and experts suspect that there are no more to find. Some analysts argue world production is already at or near its peak, although most say technological progress, which allows the further exploitation of known sources like the Canadian tar sands, will allow output to rise for another decade or two. But the date of the physical peak in production isn't the really crucial question.

The question, instead, is when the trend in oil prices will turn decisively upward. That upward turn is inevitable as a growing world economy confronts a resource in limited supply. But when will it happen? Maybe it already has.

I know, of course, that such predictions have been made before, during the energy crisis of the 1970s. But the end of that crisis has been widely misunderstood: Prices went down not because the world found new sources of oil, but because it found ways to make do with less.

World demand has grown rapidly: The daily consumption of oil is 12 million barrels higher than it was a decade ago, roughly equal to the combined production of Saudi Arabia and Iran. It turns out America's love affair with gas guzzlers, shortsighted as it is, is not the main culprit: The big increases have come from booming developing countries. China, in particular, still consumes only 8 percent of the world's oil but it accounted for 37 percent of the growth in consumption over the last four years.

The collision between rapidly growing world demand and a limited world supply is the reason the oil market is so vulnerable to jitters. Maybe we'll get through this bad patch, and oil will fall back toward $30 a barrel. But if that happens, it will be only a temporary respite.So, what should we be doing? Here's a hint: We can neither drill nor conquer our way out of the problem. Whatever we do, oil prices are going up. What we have to do is adapt.

Black Blade: I am looking at $60/bbl by next year and easily $100+/bbl by 2010. Still we have no "Energy Bill", we have an antiquated energy grid (remember last summer's eastern blackout?), and the "hydrogen economy" will come from NatGas as it will be much cheaper than breaking the H2O bond. Biodiesel? Forget it - not enough ariable land. Maybe nuclear power to make Hydrogen economic but not politically viable as of yet. We can watch the equities markets crumble in the meantime and hard assets like PMs gain in importance.

Black BladeBill Coming Due#12117705/16/04; 23:26:10


Industry data are as grim as the government's, with the private Institute for Supply Management saying that prices paid for raw materials surged in April at their highest pace in 25 years. The government said prices of steel-mill products, for example, are at their highest rate in 30 years, surging 6.3 percent in April alone, the biggest monthly jump since a 6.8 gain in July 1974.

The list of double-digit jumps in wholesale prices in the past year is long. Refrigerators are up 13.3 percent; animal feed, up 31.8 percent. Chicken is up 18.3 percent, cooking oil's up 28 percent and eggs are 23.3 percent higher. Analysts blame soaring oil prices, soaring above the the $40-a-barrel level this week.

"These prices are economy wreckers," said Peter Beutel, energy analyst at Cameron Hanover. "The emergency is here and now."

Black Blade: Ah heck, just add a little hedonic deflation and some seasonality at then there's no inflation. ;-)

The CoinGuyBook#12117805/17/04; 00:34:37

Mr. Gresham, thank you for the heads up on that book.

The (Physical) CoinGuy

specie-manIndia's stock market crashes; regulator halts trading... #12117905/17/04; 02:01:03

Looks like Monday will be an "Ineresting" day in the markets. Metals are up sharply in early London trade (so far).
Zenideavelocity#12118005/17/04; 02:16:04

Well I guess no-one could be expected to remember the entirety of the premise with-in which another has in essence cummulatively expressed as a constant premise through-out this forum...

One thing that stuck me like a bomb in the reasoning ear about experts is that they always disagree, and the intuitive ear asks why ponder those experts who get it right 100% of the time for I had found another whom had never in the history of predictions ever actually got it right. i.e 100 % wrong. Now theres someone worth listening to !. Go figure.

Hydrogen gas apon gold will give you all the financial velocity you need , and notwithstanding that I see that a
certain Mint in Perth has unavailable 250 oz bars of silver . Now what does that tell a fool in a hurry ?.

Zenideaappendix#12118105/17/04; 02:20:55

para 2 rather ... those experts whom think and claim they get it right close to 100% of the time.
SundeckStock markets down, dollar down, gold up#12118205/17/04; 03:35:25

In addition to largest fall in history on Indian stock market, Nikkei also down over 3% and both Taiwan and Hong Kong markets down hard as well.

Head of Iraqi Governing Council assasinated in car bomb blast.

Dollar index down to about 90.6, spot gold around $381 and volatile...could get interesting...

misetichStocks are Not Thermometers#1211835/17/04; 06:22:44


With the massive U.S. current account deficit hitting fresh lows, there is little room to expand capital inflows from foreigners (a large contributor to past U.S. investment booms). Moreover, corporate balance sheets were improved not by debt reduction, but by swapping to short-term interest rate structures, so there is considerable yield curve risk to balance sheets. This also implies that unlike past experience, it is not at all clear that the next recession will require any sort of inversion in the yield curve – even a flattening could create sufficient strains on the economy. Oil prices have been rising as well, but unlike past spikes in oil, this one is accompanied by a significant spike in long-term futures prices. As the analysts at Bridgewater have noted, this implies that the market sees the increase in oil prices as structural, not just a temporary supply/demand imbalance. Finally, unlike other expansions (outside of the short-lived 1980 experience), indicators such as the ISM figures, new claims for unemployment and so on have been belied by a stubborn lack of improvement in capacity use and help wanted advertising (not even in the trend, which would occur regardless of internet advertising).

In short, the market is focusing on income trends without recognizing the importance of balance sheets, valuations, risk premiums, and the underlying demand for capital and labor. These factors will eventually get the attention they deserve, but unfortunately, many investors will have to learn to give them attention… a lot like someone would learn to attend to a swinging beam after getting whacked in the head a few times.

"Moreover, corporate balance sheets were improved not by debt reduction, but by swapping to short-term interest rate structures"

ANOTHER reason why the Fed will be accomodative and be behind the curve

It is anticipated the Feds will increase a paltry 1/4-1/5 point in 2004 (probably ony 1/4 prior to the election) - Note: Greenspan has NOT been re-confirmed, and his term expires in JUNE

With the current administration adopting some of Macchiavelli's the end justifies the means (see Iraq torture of prisoners as alleged in the NYorker article) it wouldn't surprise if Greenspan does nothing in June and increases only 1/4 in August.

Regardless the Feds hands are tied as the "accomodative stance for a long period of time" has led many in taking advantage of IR swaps- thus a sudden rise will creat havoc in many sectors

With oil prices rising and remaining high the odds of a SM correction of at least 10-20% is in the cards within the next 8 months.

Low IR keeping foreign investments at bay, whilst deteriorating SM returns cooling off overseas investments, must be a nightmare few dollar bulls want to see

All Aboard The Gold Bull Express - Part ll

Melting PotBeijing officially threatens Taipei with destruction at ANY cost!#1211845/17/04; 06:49:22

Recognize '1 China' or else,
says official statement

Posted: May 17, 2004
1:00 a.m. Eastern


Beijing last night threatened Taiwan with destruction if President Chen Shui-bian doesn't accept China is "one nation."

In an official statement, the mainland government warned Taiwan leaders to make choices about the future carefully or the "Chinese people will crush their schemes firmly and thoroughly at any cost."

The U.S. has sent its aircraft carrier strike group led by the USS Kitty Hawk to cruise the East Asian region ahead of Thursday's inauguration ceremony.


Could this official Chinese announcement be one of the many reasons that Asian and global indices collapsed last night???

Got Gold?

USAGOLD Daily Market ReportPage Update!#1211855/17/04; 07:38:24">
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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.

misetichGlobal: Shocks and Landings - S Roach - Morgan Stanley#1211865/17/04; 08:05:13


Insofar as the landing in China is concerned, there can be no mistaking the preconceived notion: The West always seems to expect a hard landing in China. Yet in three instances over the past decade, China has proved the doubters wrong — the overheating of 1993-94, the Asian financial crisis of 1997-98, and the synchronous global recession of 2001. On each of those occasions, the broad consensus of investors was expecting a hard landing in China. The landings, however, all turned out to be soft. China's macro managers have become very adept at avoiding the wrenching adjustments that gave rise to all-too-frequent boom-bust cycles of the past. I have confidence that China's new leadership will prove to be equally skilled.
I am confident that the intrinsically stronger Chinese economy of today will be equally successful
But stubborn to the end, I remain convinced that an income-short American consumer cannot sustain an asset-driven lifestyle indefinitely — especially since the Federal Reserve is about to change the interest rate underpinnings of financial and property markets
The hope, of course, is that the recent pickup in job creation comes just in time to spark a resumption of income generation that would temper any pressures in the asset-driven underpinnings of consumer demand. Such an exquisitely timed transition would be nothing short of miraculous, in my view. But stranger things have happened.

US Consumer spending has proven to be resilient and proven many "experts" wrong over the years - Time and time again "the little engine that could....did...did and did"

Is it about to stop as it was ignited by "cheap fuel" and kept on going by "throwing paper" at it and keeping flames going

Cheap fuel is no more and the helicopter paper being thrown around the world is being burned faster than the "masters" imagined

All Aboard The Gold Bull Express - Part ll

BelgianApollo's golden question/thoughts....#1211875/17/04; 08:17:40

I wish to stop posting for some time, Sir. Be Antwerp's guest, anytime. Y're wellcome. Regards, B.
misetichGlobal: Pump Pains and Petrodollars #1211885/17/04; 08:47:34


OPEC Saves Rather Than Invests Export Earnings

During periods of high oil prices, OPEC economies tend to save rather than invest their oil proceeds. In the late 1970s and mid-1980s, OPEC economies invested oil proceeds in infrastructure projects, but that no longer appears to be the case.
OPEC Is Recycling Proceeds into Euroland Imports

Generally, as the price of oil increases, imports increase (in value terms), as higher oil prices bump up total exports and augmented export earnings are recycled into the goods market. OPEC's most important import market has traditionally been Euroland, which accounts for one-quarter of the cartel's imports, followed by the US, Japan, and the UK. But during the latest period of escalating oil prices, OPEC began to tap the European market more aggressively, while imports from the US dwindled. As oil prices rose over 2002-03, imports from Euroland increased by 29% compared to 2001, while imports from the US contracted by 14%, despite unfavorable exchange rates. It's unclear what accounts for the sudden rise in Euroland imports relative to other economies. The pick-up may reflect cyclical demand for European cars or other luxury goods. If structural — and it's too soon to tell — the shift toward Euroland could presage closer investment linkages.
OPEC Countries are Net Creditors

A common misperception about oil producers is that they are large debtors. According to BIS data, although OPEC countries owed $114bn to international banks as of the end of September, they also had $209bn in claims on international banks. So in fact, OPEC countries are net creditors to international banks, to the tune of $96bn. (Excluding Indonesia, OPEC countries are even larger net creditors.) OPEC economies tend to channel more funds into foreign banks during periods of high oil prices. More recently, geopolitical risks and concerns over low reserves may have led OPEC economies to resort to holding even more of their funds in international bank accounts.
Most Middle East experts believe that a large share of investment is tied up in real estate holdings in the US, UK and Spain, while US Treasuries purchased by the government and equities purchased through private banks by individuals account for the remaining share. But estimates on Middle East holdings vary widely, from $250bn to as much as $700bn.
OPEC may have been an important player in financial markets 20 years ago, but reserve accumulation has since progressed at a much slower pace relative to other countries. In particular, as Asian and other economies aggressively built up their reserve holdings, OPEC saw its share of the global pie of official reserves decline from over 20% in 1980 to just 5.5% as of January 2004.

More and more Gulf state investments are targetting Euroland as Anti-American backlash continues - Whilst the significance of petrodollars reinvestments have declined due to massive paperfiat printing over the last 20-24 years of debt levels, nevertheless given the dire strait appetite of US current account deficit - the impact is significant and will be even more so going forward as those investements continue toward EU

All Aboard The Gold Bull Express - Part ll

misetichBrent Crude Oil Futures Rise on Bombings in Iraq and Turkey #1211895/17/04; 09:03:01


May 17 (Bloomberg) -- Crude oil futures rallied in London and rose to a record in New York after the head of Iraq's interim governing council was killed in a car bomb attack in Baghdad, raising concerns that supply from the Middle East's third-largest oil producer may be disrupted.

Izzedine Salim, the holder of the council's rotating presidency, was killed in an attack on his four-car convoy in the capital, Qatar-based Al Jazeera reported, citing Mohammed Othman, a governing council member. Three bomb attacks in Turkey on the eve of a visit by U.K. Prime Minister Tony Blair also pushed up prices
The Turkish straits of Bosporus and Dardanelles are among the world's busiest waterways and the main route through which the former Soviet states send crude oil and other exports to markets around the Mediterranean.

About 4.25 million barrels of Iraqi Kirkuk-grade crude was pumped from Iraq's northern oil fields to the Turkish port of Ceyhan in the past seven days, according to shipping agents involved with the exports.

A constant barrage of attacks is emerging daily. From Chechnia to Iraq, to Turkey, to Spain, Athens, Saudi Arabia. Ranging from oil facilities to discouraging/weakning the 'coalition of the willing' (last night for example Italy's suffered one death and several injured in during a firefight in Nassariya)the scale and intensities are rising

As the presidential election nears one can expect additional disruptive activities, aimed at specific vulnerable targets, and oil prices are currently incorporating a "small premium" as such

The 2004 Oil Shock and Awe may yet materialize and the consequences worlwide ar higher than the markets are presently pricing in

All Aboard The Gold Bull Express - Part ll

mikalDollar recoups some losses on Sarin shell find#12119005/17/04; 10:18:58

This is the heading on a current Reuters story.
This, and earlier dollar losses attributed to today's asassination of an Iraqi council leader,
prove that once again, there are no economics
in today's "new and vigorous economy" ;)

TownCrierToo green, or not too green, that is the question.#12119105/17/04; 12:22:47

NEW YORK, May 17 (Reuters) - Bank of America Corp. on Monday joined Citigroup Inc. in tightening lending standards for project financing to address potential environmental risks.

The move by Bank of America, the No. 2 U.S. bank, was announced in a joint statement with the Rainforest Action Network, a San Francisco-based advocacy group that is pushing several big banks to stiffen lending standards. The group's demands may affect billions of dollars of loans a year.

Citigroup, the largest U.S. bank, in January agreed to tighten its own standards.

..."We have an opportunity and responsibility as leaders to promote sustainable, environmentally sound economic growth."

Bank of America agreed not to fund projects involving oil and gas exploration, mining or logging activity in old-growth tropical rainforests....

The policies cover new business as of May 15, and old contracts as they come up for renewal.

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

The shifting social level of environmental sensitivities from one year to the next is ever a wildcard in the planning stage and future determination of project feasibility.

With mining operations, one can't ever be too careful not to count their chickens before the eggs have actually hatched. With gold in hand, you've got yourself a bird, so to speak. Call Centennial today for a diversification strategy that accommodates your individual appetite for balancing risk and reward.


misetichLatest Research Indicates A 40 Percent Increase In Jobs Moving Offshore In The Next 18 Months#12119205/17/04; 13:32:32,1769,922,00.html


Orlando, Fla., May 17, 2004 . . . The movement of US services jobs offshore will accelerate faster than originally projected, according to new research from Forrester Research, Inc. (Nasdaq: FORR). At a press conference held at GigaWorld IT Forum, Forrester revealed that the number of US services jobs moving offshore by the end of 2005 will grow to 830,000 compared with its original projection of 588,000 — an increase of 40 percent.

Forrester's well-cited projection of 3.3 million US services jobs moving offshore by 2015 will increase slightly to 3.4 million. The small increase in the long-term forecast is due to changes made in the base-level numbers updated in 2002 by the US Bureau of Labor Statistics. By the end of 2003, 315,000 jobs had been shifted offshore, representing less than 1 percent of the jobs in the affected categories. This number will grow to 1.6 percent by the end of 2005

US jobs hemorrage continues unabated - The US budget deficit will soar as tax revenues decline due to prospective higher unemployment.

All Aboard The Gold Bull Express - Part ll

GondolinBrinks Matt Mk 2??#12119305/17/04; 13:59:56

Despite the fact the mainstream money morons don't recognise the value of the yellow metal the criminal element still recognise the value of the metal of kings. An armed gang of seven 'career criminals' attempted to steal £40 million of bullion from the Swissport Cargo Warehouse near Heathrow in a ram raid style robbery, only to find 100 armed police waiting for them. See URL for details.

Could that be the most interesting piece of news today?

TownCrierYou can try to run from cover to cover, or else simply choose physical gold as safe harbor#12119405/17/04; 14:10:19

Monday May 17, ( -- It's not just stocks that are getting pounded. The junk bond market also has been taking a beating, and that could spell trouble for some cash-strapped companies.

Last week was the weakest since the beginning of the year for new junk bond issues...

More troubling, a number of companies, both in the U.S. and overseas, have postponed junk bond offerings because of unfavorable conditions...

Meanwhile, investors are racing to pull money out of junk bond funds. Last week, according to analysts at Wachovia Securities, investors took $2.2 billion out of junk bond mutual funds, the largest outflow of money since last August. Spreads on high yield bonds -- the difference in their yield above Treasuries --- have risen a third of a percent over the past two weeks.

... the junk bond market is getting slammed ........ as yield-hungry investors turn to new, higher-yielding issues.

But it's not just rising rates that are crushing the hopes of junk bond investors and the dreams of struggling companies looking to raise new financing. Others say the junk bond market, just like the stock market, is a victim of the growing uncertainty about the war in Iraq and the impact of soaring oil prices.

...the current default rate by U.S. companies on junk bonds stands at 4.3%, down from 5.4% at the end of 2003. The default rate on junk bonds peaked during the recession at 11.6% in January 2002.

--------(see url)------

As the current masses of higher-yielding (junk) corporate bonds cast about for willing buyers at this phase in the cycle where higher yields (interest rates) and lower bond prices seem just around the corner for "yield hungry investors" willing to wait, this same affliction of economic principle seems poised and ready to similarly bring itself to bear upon the market in U.S. government securities.

Where the running of deficits and supplies of money seem to remain fast and loose, any premium paid for the "no default" aspect of the lower-yielding Govies seems ever more a high price only to get unsatisfying compensation for the suspending of ones own current purchasing power via the intermediate holding of bonds.

And with so many listed companies reliant upon the cash flow of their bond financing to support operations, share equity at this time also becomes a minefield of peril for anyone with a VERY good map.

Rest easy. Choose gold.


Steve22Getting gold out of the US!#12119505/17/04; 14:24:57

Well, here's what I've got so far...

-It's possible to ship gold to Venezuela and Argentina in South America, but no place else. (w/federal express, haven't checked others...) However, customs fees/duties cost you between 25 and 35 % the price of the gold you are shipping. So that's pretty much out of the question.

-The ability to ship it to those countries leads me to believe there may be an intra-country gold marketplace in one or both.

-Despite being an international financial center, Panama has no physical bullion market to speak of.

- I have emailed back and forth with one Argentinian woman who claims there is a street in Buenos Aires dedicated entirely to gold. However, she may not have understood what I meant, and it could be gold jewelery that she was talking about.

-I've emailed as many financial institutions/individuals I can that I think might have info as to whether there are coin/bullion dealers in Argentina. Also, if there are, I asked them if there are taxes on purchases.

If anyone knows of any country in south/central America with an existing physical gold market, please let me know.

Thanks, Steve

PS Transferrable certificates for gold aren't useful in a country without a market to take it to to trade for the physical.

mikal@misetich#12119605/17/04; 14:26:18

Re: "US jobs hemorrage continues unabated- The US budget deficit will soar as tax revenues decline due to prospective higher unemployment."
Yes, and as debt spending becomes unsustainable, real wages and profits decline and ROI becomes losses on investment, fewer jobs and lower tax receipts continue.
I read that Forrester research earlier today and saw that the figures for jobs outsourced were in the services category. Many remaining jobs are not safe from outsourcing, Chinamart or cheap imports as the following shows:

By: Ed Henry
Been down so long it looks like up to me. Wasn't that a line in a song by John Dillan, Willie Nelson, or some blues singer?
On May 6th, the Congressional Budget Office (CBO) reported that the budget deficit outlook was improving. Because of higher expectations in tax receipts, the CBO claimed that its latest monthly budget review showed the deficit would be less than the $477 billion previously expected.
On May 12th, the U.S. Treasury published its Monthly Report for April, 2004, covering receipts and expenditures for the month.
April 15th is supposed to be a day of great celebration for the politicians and bureaucrats in Washington, a day when windfall bonuses from income taxes should flow into their hoppers in greater numbers than they do throughout the rest of the year.
But look what's been happening on April 15th. Unlike politicians, the figures don't lie.
[ Chart at link showing declining tax receipts ]

By now, you should all know what's happening here – unemployment, outsourcing, companies moving overseas to boost their profits with cheaper labor, and people taking lower paying jobs just to survive. All while the spinmeisters tell you things are looking up.
We've even got thousands of people taking jobs with Halliburton and ready to go to Iraq because it's work and the pay is good.
On top of that we've got retailers like Wal-Mart providing their employees benefits in the form of literature and instructions on how to draw welfare. A situation that has many communities claiming that whatever people save at Wal-Mart is forfeited in higher taxes to support commity services. And these retailers are so successful they run local independents and other chains out of business. Cheap is no longer the foothold of the incompetent.
While we are giving up the quality of the products we buy and the quality of our lives, do you think the federal government is suffering? In the face of declining revenue, they plan bigger and bigger annual budgets. Even when they know revenues will be down, they think nothing of running deficits in the hundreds of billions.
The federal government has only two sources of revenue – taxes and borrowing. When taxes are down they just borrow more and more money tacking it onto the national debt for our children and grandchildren to pay someday.
Last year we ran up a $555 billion increase to the national debt. This year we're heading for a $700 billion record increase. And that includes the money the Beltway Bandits borrow/steal from our surplus payroll and other entitlement taxes that are supposed to go towards Social Security, health care, road repair, and so forth. The amount of national debt increase is the real deficit, not the lower figure they always try to pawn off on us.
Can anyone tell me why Donald Rumsfeld is going to Congress to ask for a $25 billion increase to his already exorbitant $415 billion budget? Why would he bother when the Bush administration is borrowing that much every two weeks or less? Does he expect Congress to take it out of the limited budget they have for domestic services like agriculture, education, and other elements of their ever decreasing discretionary spending?
The last time he went to Congress it was to ask for $87 billion and after a short bit of bickering Congress caved in on that one. By the way, we still don't have an answer to what happened to the $88.6 billion "Unconditional Gift Fund" that disappeared from the State Department in 2003. Can you say "coalition of the willing?"
Wouldn't you like to know what this invasion, occupation, and reconstruction is really costing us? Personally, I would also like to know the salaries of the media people who helped promote this war. If Katie Curric makes $14 million a year, what do you suppose Wolf Blitzer, Bill O'Riley, and the rest of them are getting to read monitors?"

"Published originally at : republication allowed with this notice and hyperlink intact."

TownCrierClosing market rap, 24-hr headlines#12119705/17/04; 14:29:53 excerpts:

Safe-haven buying lifted COMEX gold on Monday after bombings in Iraq and Turkey shook the dollar

TownCrierCentennial tries to bring you information that's good as gold#12119805/17/04; 14:47:03

If you missed it earlier this week, click the link and check out the complete set of updated graphs for the U.S. $20 gold Liberties and St. Gaudens coins.

Five price performance charts compiled by Jonathan Kosares are accessible from the left-hand column of the page linked in this post.

There, midway down the left column you will find a small table with fivel links, each to charts for Mint State 63 and MS64 grades of both the Liberty and St. Gaudens coins, and a singular MS65 for the Saints.

If you have a look you may find an appeal in pursuing opportunistic dips on a recent upward trend, all shown within a larger view of the historical pricing potential.

Call Centennial to discuss what could become a profitable diversification within your diversification.


Henricustoms -duties#12119905/17/04; 17:36:06

Under chapter 71 Bullion bars and bullion coins (Monetary gold)are free of customs charges under the harmonized tariff code 2004 items 7108. 13.55 and 7108 20.00 respectively.
HenriTaking it out?#12120005/17/04; 17:39:36

best option is to just carry it with you. It is not illegal (yet). You are allowed to take up to I think $10,000 in face value of eagles without having to file with customs and if you take more there is no duty attached just a record
Ned"Sum of All Fears" .....the case for physical gold. #12120105/17/04; 18:22:00


"The Battle of Uhud And The Strategy of bin Laden"

"Now with an American general spinning the recent sarin bomb attack in Iraq as being one that was detonated by insurgents who did not know it contained sarin, the point is missed. They certainly knew exactly what they were doing and if they had wished to kill hundreds, they would have. It is another message that the coalition will misinterpret thereby taking us down a road to the "Sum of All Fears."


When? We know when. Get ready.

Max RabbitzTaking it without Customs Duties?#12120205/17/04; 18:26:25

Gold Heist foiled!

The target was £40m worth of gold bullion stored at the Swissport Cargo Warehouse at Heathrow Airport.

Max......looks like gold is moving somewhere and somebody cares.

Steve22getting gold out#12120305/17/04; 19:09:38

henri - I think those are import duties for the USA, not import duties for other countries. The federal express website gave an estimate of the taxes, as noted in my original post.
TheJuniorMinerOk Max I'll Bite#12120405/17/04; 19:45:24

Best I can tell, this is 11,000 to 12,000 pounds of gold. Kinda heavy for the van those guys were using. They had to be after the cash.

Pretty good investment strategy, put close to 150 million dollars 1/2 into gold and 1/2 into pounds.

I'd say it's pretty interesting that 6 tons of gold just showed up in a Swiss warehouse.

Thanks for the article.

Dollar Bill.,.#12120505/17/04; 20:01:33

One Jim Willie, One Forecaster.

SmeagolGold Thieves#12120605/17/04; 20:03:13

sss... perhaps that's the REAL reason It's known as the 'barbarous relic'... seems to bring out the worsst in people in proportion to how much of It is piled in one place.. hehehee


Cytek@ Meling Pot Re: China#12120705/17/04; 21:47:40

Saw the article you posted about China and Tiapei. Well a funny thing happened last week. A friend of mine got a call from his son who is onboard a nuclear sub. He called his dad to say he was being deployed to china along with a group of nuclear subs, the amount i cannot say. And said that something was up in China and we would hear about it on the news next week. Well your article confirms it. Where this goes is anybody's guess.


TownCrierSqueezing lemonade from lemons and these lemony times#12120805/17/04; 22:21:56

George Soros is often cited/credited/blamed as taking down the British pound, though arguably it might be more appropriate to say he was "merely" a high-profile profiteer in a circumstantial event in which the pound was overripe for depreciation anyway.

The bottom line is that that reputation of hammering a currency into the ground stands out as the top line in his curriculum vitae, such that when George speaks, the market is somewhat naturally inclined to try to decipher whose currency will be next. With that said, George is letting the vitriol flow, as follows.

NEW YORK, May 17 (Reuters) - Billionaire investor and philanthropist George Soros on Monday stepped up his attack on President George W. Bush's international policies, saying the U.S. war on terror had claimed more innocent lives than the Sept. 11 attacks on the United States.

...he further charged that recently published photographs of U.S. troops abusing Iraqi prisoners were "not a case of a few bad apples, but a pattern tolerated and even encouraged by the authorities."

"We claim to be liberators, but we turned into oppressors," Hungarian-born Soros said of U.S. actions in Iraq.

...Soros said now that the U.S. position in Iraq had become "unsustainable," it was handing over power to local militias.

"This prepares the ground for religious and ethnic divisions and possible civil war in the manner of Bosnia rather than Western-style democracy," he said.

..."If we go on like this, we may find ourselves in a permanent state of war."

--------(full article at url)------

All cunning aside, Soros might join his readers in considering that which he has left unsaid. Challenged with the daunting task of instilling a peacefully unified government of self-rule among the disparate factions of Iraqi peoples newly unyoked from the common tyranny of Saddam Hussein, the shortest route to successfully delivering that objective is, however unfortunate for our reputation, to reunify these peoples under a general perception that they have much more in common with each other now as brothers and sisters who must band together to diplomatically drive out the unwanted blight against their newfound sovereignty and national pride. Superficially playing up the part of the "ugly American" (prisoner scandal, the frustrating positions adopted in the Israeli/Palestinian peace process, etc.) seems the lesser price to pay, given where we are now in the big picture, than the alternative of "permanent war" and the forcing of a square peg into a round hole.

The U.S. takes a black eye either way it turns out, success of failure, in such a ploy toward fostering a united Iraq, and it is almost certain that the dollar will emerge not one whit stronger in the long term for the ouster of Saddam H. -- whom, I'm sure, none of the area's powers liked having as a neighbor any more than his own citizens liked having him as their overlord.

All of this could be seen as another step in a messy global choreography away from an unwanted/unfair unilateral monetary reserve system and toward a more level playing field. Prepare for the transition with a shift of your own reserve holdings out of dollars into gold.


TopazThe Protagonists.#1212095/18/04; 05:04:29

Oil futures are going deeper into backwardation in anticipation of a price drop, the $ is desperate to weaken here while Bonds and Gold are trying to strengthen.
... and there IS a shortcoming in the $complex/Oil matrix imho.

misetichDon't Fret About Gas, Worry About Energy #1212105/18/04; 05:15:21


Do the math, and at $1.94, it costs around $1,070 a year to fuel an average vehicle, up from $820. The difference: less than $25 a month
If you're going to worry about energy, worry about the right thing: the way energy prices will slow down the economy if they stay at current levels. "Higher energy costs flow into every nook and cranny of the economy," says Daniel Yergin, chairman of Cambridge Energy Research Associates. Each dollar-a-barrel oil price increase acts like a $20 million-a-day tax -- $7.3 billion a year -- on the rest of the economy. And oil's not all. You also have to include natural gas, which is also in short supply. Add $13 million a day of higher natural gas prices for each buck-a-barrel for oil. With oil up $12 over the past year, the total levy runs more than $100 billion annually. Even in an $11 trillion economy, that stings.

The impact of higher energy costs in being underestimated by the markets and economists.

The markets have thus far failed to recognize, higher energy prices are here to stay, thus a fundamental change has taken place and the SM has barely flinched from its lofty highs.

...and lets not forget rising electricity, coal prices...

The tax to the economy IF energy prices staty at this lofty levels is WAY BEYOND the $100 billion - if you include SM correction, the likelyhood of ANOTHER recession - higher unemployment, possible burst of housing bubble, higher loan defaults

Perhaps I'm to pessimistic - yet almost each oil "spike" has been followed by a recession (except one)...
and the current is not a "spike". Its probably a set up, mind conditioning for higher oil prices in the $30's band from the lofty's $40's.

All Aboard The Gold Bull Express - Part ll

misetichBond blues are building#1212115/18/04; 05:31:52


NEW YORK (CBS.MW) -- The bond timers' confidence has crashed to record lows. They'd better not be right.
Last week, the Australian gold service The wrote starkly:

"US Treasury bonds have been in a bull market ever since the end of 1994. The bubble burst in June last year, but the uptrend still held...The major uptrend supporting the post 1994 bull market has not yet been breached, it will be if 10 year yields keep rising at all from present levels."

Privateer also came at the issue in fundamental terms:

"Remember, for most of the past three years, the US has sported a regime of negative REAL interest rates even by official measures. This has spawned a huge "carry trade" as investors borrow US Dollars at absurdly low rates in order to invest in foreign (and US) debt paper offering yields at high multiples of the cost of the borrowing...

"With the growing apprehension, which has now become certainty, that the Fed is on the verge of raising official US rates, and with the resultant LEAP in rates on Treasury debt (especially Treasury debt of one year plus maturity), a huge hole has appeared in the value of US bond and stock portfolios. This has led to capital repatriation. But a far more potent aspect of the anticipation of higher US rates has been...this movement, this unwinding of the "carry trade", which is pushing the US Dollar up on the forex markets.

The present Dollar advance is the VERY last echo of the US bubble markets, fuelled as it is by the accelerating unraveling of all the other ones. The flight of capital is getting closer and closer to "cash"... PRECISELY what happened to the dollar in the late 1970s."

This Friday, Dow Theory Letters' Richard Russell updated the T-note chart, showing a clear breakout:

"What you see here is the breakout that keeps Alan Greenspan awake at night. If yields continue to climb, they're going to drive a dagger into the debt-bubble, and if that happens the Greenspan bubble bursts and the "sh-- will hit the fan."
The impeccably respectable Societe General ............."A slowdown in US economic demand may be unavoidable...cooling Chinese demand, high energy prices, and a choke on US borrowing, are combining to threaten global economic demand...Underweight global manufacturing plays."

Sir Greenspan Asset Inflation to spur the economy is a fallacy. Whilst some short term dividends were obtained during the SM bubble, with higher employment, higher government surpluses the long term pain is still to be felt.

The creation of ANOTHER bubble, - housing - fuelled by additional debt - is still climbing, fuelled by an accomodative Fed - and once again is providing short term dividends to contain the SM deflating factors of a few years ago

The real enemy is Asset Deflation...and Central Bankers worlwide will do anything to prevent it

How? by doing what they do best - printing more fiat...

All Aboard The Gold Bull Express - Part ll

misetichWhere have you gone, Rosy Scenario? U.S. economy's good times didn't last long#1212125/18/04; 05:47:36


It wasn't too long ago (the beginning of this month, to be exact) that the stock market was worried that economic growth was strengthening so quickly that the Federal Reserve would have to boost interest rates -- the sooner, the better. Fears of higher interest rates sent stocks tumbling.

Now the stock market is worried that the economy will soon slow down and that corporate profits won't live up to expectations. Fears of poor earnings have sent stocks tumbling some more.
What's bothering stocks?

Let's start with interest markets have already gone up by more than a full percentage point over the last two months.
Indeed, re-fi's have plunged by nearly 60 percent since March, depriving consumers of a big chunk of cash they've been using to supplement their incomes
The stock market, itself, is contributing to economic worries. More than half of all households own stock, while an even larger percentage watches the market and loses confidence when stock prices decline -- as they've been doing since the middle of February.
Other stimulants have disappeared as well. There's been no new tax cut to line people's pockets this year the way there was in each of the previous three years
Meanwhile, the dollar has risen to multi-month highs. This threatens to erode the competitive advantage that the nation's beleaguered manufacturers have only recently come to enjoy
To make matters worse, the cost of most necessities is soaring. Food prices are up as much as 20 percent in some parts of the country, ditto for health care, while energy costs are simply through the roof

Excellent article by Dr. Irwin Kellner, - though he forgot to mention rising commodity prices - rising debt service costs - rising budget deficits - rising trade deficits - rising current account deficit

Physical Gold as the ultimate storage of wealth is unchallenged during uncertain times such as these.

All Aboard The Gold Bull Express - Part ll

misetichJapanese GDP Grew at Annual 5.6% Pace in 1st Qtr#1212135/18/04; 06:03:17


May 18 (Bloomberg) -- Japan's economy grew at a greater-than- expected 5.6 percent annual pace in the first three months of the year, expanding for an eighth straight quarter, as an export-led recovery spread to consumer spending.

The winds and odour of "something is wrong" is everywhere. How can the Yen depreciate as the Japanese economy is growing fastest of the so called industrialized world?

The Yen depreciation is giving Japanese auto manufacturers as an example a tremendous advantage over US car manufacturers.

...and the auto industry generates significant EMPLOYMENT...just what the US economy NEEDS! and its being threatned by cheaper imports!

It could very well be caused by unwinding carry trades in emerging markets which is causing distortions - yet central bankers are still main buyers of US treasuries...something smells rotten....

All Aboard The Gold Bull Express - Part ll

The HoopleMisetich, re: msg. #121210#1212155/18/04; 10:04:26

The snip, "do the math, and at $1.94 it costs around $1,070 to fuel an average vehicle, up from $820. The difference: less than $25 a month.

Hoople: I think that Washington Post writer employs fuzzy math to minimize the real gasoline impact. He also uses the classic "monthly payment" to make it palatable. SUV's are the dominate mode, and 17 mpg at that. I also don't know many people driving less than 15K per year.

15,000 mi. / 17 mpg. = 882 gallons x $1.94 = $1,711.08.
$1711.08 vs. $1,306.00 assuming his percentage increase is $405.08. Bottom line, one vehicle is costing about $142 a month to gas up, and many households have 2-4 vehicles. This also ignores the home heating cost increases which add further wallop. While he is correct to say worry about energy's impact on the economy, he isn't fooling me on the impact of gas individually. I'd like to see his monthly payment plan for $3.00 gas when it gets here. Thanks for all your input.

TownCrierA Eurosystem gold purchase#1212175/18/04; 11:34:19

Last week, May 13th, I reported on a press release from the Bank of Portugal regarding the completion of a 35 tonne gold reallocation that was conducted over the preceeding few months.

Today, through the ECB's consolidated weekly financial statement, I have learned that that was not the only official gold dealings to occur last week within the Eurosystem. One of the 12 member national banks was also involved in the PURCHASE of gold -- approximately 200 kilos in the form of gold coins.

Getting your own gold coins requires nothing quite so elaborate as all of that CB involvement and associated vague press releases. Just give Centennial a call and put one of their agents on the case to work the network for you. Then sit back and relax as your order is filled.

Badda-bing badda-boom, before you know it, you'll be on the receiving end of a discreet FedEx or registered/insured mail shipment of gold coins that only a short time earlier could have been resting anywhere in the world.

That is what I'd call a nifty friend to have on my side.

So pick up the phone and get acquainted with Mike, Jonathan, George and Marie.

1-800-869-5115 ext. 100


USAGOLD / Centennial Precious Metals, Inc.Put a Foundation Under Your Portfolio#1212185/18/04; 11:46:27

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TownCrierCompeting currencies -- ECB's Trichet spoke on the internationalisation of the euro#1212195/18/04; 13:21:37

Excerpts from Friday's speech:

...the internationalisation of the euro has been most visible in global capital markets, in particular when it comes to the role of the euro as an international financing currency. ...... Besides the international financial markets, there is also evidence that the euro is increasingly being used as a settlement or invoicing currency in euro area countries’ trade with non-euro area residents.

However, there is also evidence of inertia in some of the facets of the euro's international role. The share of the euro in foreign exchange transactions today has not significantly augmented in comparison with the previous national currencies, accounting for about one-fifth to one-quarter of all daily transactions. By way of comparison, the US dollar is used in more than forty percent of foreign exchange transactions.

There are several factors explaining why some of the facets of a currency's international use are characterised by a high degree of stability rather than gradual change. The most prominent ones are what economists usually call "dynamic economies of scale" and "network externalities", which tend to freeze existing situations into steady states. Hence, any shift from the use of one currency to another currency would require a significant and exogenous shock. The foreign exchange market is one example; the invoicing of raw materials, such as oil, is another.

Against this background, I would say that the relationship between the two most widely used international currencies, the US dollar and the euro, should not be perceived as a zero-sum game, where a gain for one currency means a loss for the other. .........there are net benefits from the "coexistence" of the US dollar and the euro. International investors can reduce risk by diversifying their asset portfolio, commodity traders can easily make international contracts using one of these two currencies as a numeraire. And all of them can trust the single monetary policy which, through its pursuit of price stability, safeguards the purchasing power of the euro.

This brings me to the policy approach adopted by the Eurosystem on the internationalisation of its currency. I will start by emphasising a key characteristic of the international use of any currency, namely that – contrary to its domestic use – it has no institutional foundations, as there is no "sovereign" power that can enforce its use. This is why the international use of a currency is, in essence, a market-driven process.

The main economic factors underpinning the internationalisation of a currency are well known. The first factor is domestic stability, that is a low inflation rate, making the currency attractive as a store of value. The second factor is a high degree of openness to international trade and finance. This is a key determinant for the currency's use as a medium of exchange and a unit of account. And the third factor is a developed financial system with deep and liquid markets offering participants a wide range of services and products in terms of borrowing, investing and hedging.

Against this background, the Eurosystem takes a neutral stance on the internationalisation of its currency. This means that we neither hinder nor actively promote the development of this role. .........decisions taken by non-euro area authorities to use the euro as an anchor, reserve or intervention currency have to be fully seen as unilateral measures. They do not involve any commitment on the part of the Eurosystem.

[The Race is On]

At the same time, the Eurosystem contributes to the international role of the euro in indirect ways. Price stability is a key precondition for the development of the international role of a currency. Thus, the stability-oriented monetary policy of the ECB contributes to the euro's potential for expanding its international role. In this context, I would also like to stress the importance of the credibility of the overall policy framework...

Let me stress that by being neutral we are not indifferent to the international role of the euro. Indeed, we pay special attention to the international use of our currency and provide regular information to the public on related developments in the international financial arena, for example the recent build-up in foreign exchange reserves.

I have already referred to the fact that the international role of the euro is most prominent in the EU's neighbouring regions. Indeed, it is in these regions where the relationship between the ECB's pursuit of a stability-oriented monetary policy and the euro's international use has been most visible. By granting monetary stability to an economic area that is by far the largest trading partner of our neighbours, the euro has helped anchor policies in the region. It has prevented a mismatch between trade and financial links and provided clear guidance to one of the most profound processes of economic transformation.

The anchoring effect has been most pronounced with regard to the ten new Member States that joined the Union two weeks ago. But let me also mention, en passant, that the EU's links with the Western Balkans, the Mediterranean countries and the countries of the Commonwealth of Independent States, notably Russia, have strengthened as well. In line with this, we have also observed significant use of the euro by public authorities and private agents in these countries.

.......In the years ahead, we will work hard to ensure that this process of fully integrating new Member States into our common monetary area will unfold smoothly. Over the last few years we prepared intensively for enlargement. Now it is time to reap the mutual benefits of a wider Union, in particular with the expanded internal market providing new opportunities for trade and investment flows....... I am convinced that, with enlargement, prosperity will increase and living standards improve across the whole Union.

-------(full speech at url)------

Who would dare NOT to hold gold during the most significant monetary transition of the modern age?

Throughout millennia of geopolitical changes and upheavals, gold has been the one lofty constant -- always, always good as gold!


TownCrierClosing market rap, plus 24-hr global economic headlines#1212205/18/04; 14:08:50 excerpts for May 18
RimhThanks, Randy!#1212215/18/04; 15:34:22

The article on the internationalisation of the Euro was, for me, a good glimpse into the near future. Indeed, it seems pertinent that this speech was made at this particular time when the dollar seems to be at a significant crossroad. Its like Trichet is saying to the world "Hey! Look at us! We're becoming your alternative global reserve currency and we're not even trying yet! In fact, we're willing to bide our time and let the dollar self destruct on its own. Wake up global currency traders! You want our stuff because soon it'll be alone at the top!"

Well, not quite the top. GOLD RULES! (Amen?)

TownCrierRimh, that's really the essence of it, isn't it?#1212225/18/04; 15:54:32

"We're becoming your alternative global currency and we're not even trying yet!"

And not to put too fine a point on it, they _are_ certainly "trying" to pursue price (purchasing power) stability, but more significantly, by most appearances, they are not "trying" to strong arm the currency into wider international use; thus, making it's spreading usage in that realm all the more legitimate... and all the more troubling for the dollar in a continuation of its role as a reserve asset.


CometoseAlan Greenspan and his gift to the American people#1212235/18/04; 15:55:25

Which player is Alan ?????

A man returning home a day early from a business trip got into a taxi at the airport just after midnight.

The man suspected his wife was having an affair and he intended to catch her in the act.

While enroute to his home, he asked the cabby if he was willing to be a witness.

For $100, the cabby agreed.

Quietly arriving at the house, the husband and cabby tiptoed into the bedroom.

The husband switched on the lights, yanked the blanket back and there was his wife in the
arms of another man.

The husband pulled out a gun and held it to the naked man's head.

His wife shouted, "Don't do it! This man has been very generous! I lied when I told you I inherited all that money. This man paid for the Corvette I bought for you. He paid for our new cabin cruiser and the yacht club membership. He paid for our cottage at the lake. He paid for our golf club membership, and he even pays the monthly dues!"

Shaking his head from side-to-side, the husband slowly lowered the gun.

He looked over at the cab driver and said, "What would you do?"

The cabby said, "I'd cover him up with that blanket before he catches a cold."

The StrangerWhat's Really Eating the Markets? U.S. Debt"; 15:58:55


"Keeping the economy afloat by inflating a credit bubble is the stupidest thing any central bank could do, but they do it again and again. The Fed under Greenspan took that stupidity to a new high. And America is about to pay with the greatest credit bust of the last 50 years."

NedThe Growing Case for Physical Gold#1212255/18/04; 17:04:17


"From the White House, a nightmare scenario
White House officials say they've got a "working premise" about terrorism and the presidential election: It's going to happen. "We assume," says a top administration official, "an attack will happen leading up to the election." And, he added, "it will happen here."

Trading at Comex will soon begin to be unbelievable, paper will be discounted. Physical will separate. Watch for continuing pain in PM stocks. What will happen to stocks in the event of a terrorist disaster?

Take delivery!

TownCrierGetting reacquainted with our Fed head#1212265/18/04; 17:09:28

HEADLINE: Greenspan set to make history with new term

WASHINGTON, May 18 (Reuters) - Alan Greenspan will take the helm of the U.S. Federal Reserve for a fifth term with his reputation as the world's top central banker intact, though a little less gilded than it was during the golden 1990s.

At the peak of the longest-ever U.S. economic boom, Greenspan's standing had ascended to such lofty heights it was hard to separate the man from the myth.

So admired was he for his mastery over the business cycle and his prowess at warding off financial crises that some Wall Street investors believed he might be able to keep the economic expansion going indefinitely.

But the bursting of the high-tech bubble in 2000, the ensuing 2001 recession and a three-year bear market in U.S. stocks ultimately proved the optimists wrong.

Though the reversal of fortune drew some sniping, Greenspan insisted some "bubbles" were hard to break early and that the Fed should be judged on how well it helped the economy regain its footing.

...The (previous 120-month economic) boom was fueled by a huge stocks rally that Greenspan famously labeled "irrational exuberance" in 1996. But he later backed off this comment, saying it was not his role to second-guess investors.

...Born in New York City in 1926, Greenspan was the only child of Rose and Herbert Greenspan. His parents divorced when he was young and he was raised in a small apartment in the Washington Heights section of New York by his mother and grandparents.

Greenspan's first love was music, and he spent two years at New York's famed Juilliard School studying the clarinet. Before turning to economics at New York University, he toured briefly with a swing band as a saxophone player.

A longtime Republican, Greenspan in his youth was a friend and associate of late novelist Ayn Rand, who espoused the supremacy of the free markets and the profit motive in books such as "Atlas Shrugged" and "The Fountainhead."

When President Ronald Reagan named him to succeed the legendary Volcker in 1987, Greenspan was the favored candidate on Wall Street. But some were worried about whether he could live up to the reputation of the tough-minded Volcker.

Greenspan quickly proved his mettle. The "Black Monday" stock market crash of October 1987 came just two months after he took office.

In what is now seen as a textbook example of how to handle crises, Greenspan opened up the monetary spigots to keep the financial system from seizing up.

------(see url for more history on Greenspan's tenure as Fed Chairman)-----

Would the early stages of a hyperinflationary buildup be less unstablizing with a familiar old face at the helm of the Fed than with a newly appointed fresh face rocking the boat? Probably so. Steady as she goes, mate.


mikalSouth African analyst falls out with the crowd#1212275/18/04; 17:13:18

'Gold could hit 1000.00 an ounce'
This SA article emphasizes the very contrasting
gold outlook held by a bank's chief financial strategist.

CometoseRandy regarding your postscript on Sir Greenspan #1212285/18/04; 17:28:14

If you haven't seen "THE MAGIC CHRISTIAN" you should take a look at this scenario of possible "Happy Sailing" that maybe coming our way ........a maiden voyage out of control ....very funny and appropos for the days that we are living in .....
TownCrierRichmond Fed President Broaddus today on inflation, the economy and banking#1212295/18/04; 17:43:11


Expectations about our near-term economic prospects are pretty favorable, which seems reasonable enough to me given what we know now. What could go wrong? Well, as always there are risks in the outlook. A growing concern currently, as I'm sure you're aware, is the possibility of rising inflation in the months ahead. Back last December -- not very long ago -- many economists, including this one, were worried about the risk of a further decline in inflation from an already historically low rate....

Since then, however, the inflation picture has changed significantly. Prices of many commodities, including crude oil and gasoline, have risen sharply in recent months due to the pickup in activity in the U.S. and the boom in China. Most recently, some of these prices have backed down from their peaks, but they remain at high levels.

...the rapidity of the apparent bottoming out of core inflation, and its subsequent upswing, has naturally gotten the attention of all of us... market participants now expect the Federal Open Market Committee to shift to a less accommodative monetary policy stance in the months ahead. The benchmark 10-year Treasury bond rate has increased a full percentage point from its low point earlier this year to its present level of about 4 ¾ percent, and the futures market in federal funds has now fully priced in a quarter-point increase in the funds rate at the Committee's meeting in late June. Some observers are concerned about these actual and prospective increases in interest rates. They worry that the increases may undermine the economic expansion just as it seems to be gaining momentum.

Let me offer a few observations about all this. The growing concern about inflation is certainly understandable...

It's important, though, to keep our perspective here. Productivity — remarkably — is still rising solidly.......And while the decline in the dollar over the last two years as a whole has put some upward pressure on import prices, increased global competition in the context of sizable price markups currently in many U.S. industries will likely discourage aggressive price increases, despite strengthening demand. Beyond this, there is still considerable excess capacity in many industries. All of these conditions will tend to restrain inflation pressures in the period immediately ahead.

Let me be very clear here. I am not dismissing the risk of an unwelcome further increase in inflation. Given what we know now, there is no question that this risk is greater now than it was as recently as three months ago....

Let me close with just a quick comment on banking conditions. ....

As Chairman Greenspan indicated in testimony to the Senate Banking Committee last month, our sense at the Fed is that the industry is managing its interest rate risk effectively, and is well prepared to deal with the further increases in interest rates now widely expected. These favorable banking conditions are expected to continue over the remainder of 2004.

Indeed, profitability could increase further as net interest margins widen, and some corporate borrowers turn back to their banks to meet their credit needs as corporate bond rates and commercial paper rates rise.

-------(see url for full speech)-----

On that last note, the implication is that the banking system will be pumping new money into the economy through loan-financing more cheaply (that is, at lower rates) than the corporations would be able to attain for themselves through bond-issuance-financing at the prevailing market rates.

"We shall have the hyperinflation."


ge@ TownCrier (5/18/04; 13:21:37MT - msg#: 121219)#1212305/18/04; 23:27:37

Trichet says, "I will start by emphasising a key characteristic of the international use of any currency, namely that – contrary to its domestic use – it has no institutional foundations, as there is no "sovereign" power that can enforce its use. This is why the international use of a currency is, in essence, a market-driven process".

Well, I have my doubts. In the old days the empires dispatched envoys or armies to collect tributes from the satellite countries. In the modern times, the empire issues a fiat currency and forces it to be used as an international reserve currency.

Is it a coincidence that the US Dollar became the reserve currency after two world wars? Was the US military situation irrelevant in the Bretton-Woods? Was the Roman military irrelevant in the acceptance of Roman money? Was there no connection between the British Armada and the wide acceptance of British Pound?

The only peaceful peaceful monetary solution is an international gold standard. It is equivalent to a declaration that, "I do want to rule you and I do not want to be ruled by you".

With Dollar, Euro and possibly Yuan longing to be a fiat reserve currency, methinks, the course is set on a collision course. I hope I am wrong.

geCorrection#1212315/18/04; 23:35:41

The only peaceful peaceful monetary solution is an international gold standard. It is equivalent to a declaration that, "I do NOT want to rule you and I do not want to be ruled by you".
TownCrierHas the general case for gold ever been better made than this?