USAGOLD Gold Discussion Forum Archive

Electronic reproduction sourced from
ToolieThe Toronto Star's late submission for "the end of cheap oil" contest.#1234018/1/04; 03:45:07

Snip: The crisis is coming sooner than predicted by the experts quoted in a four-part series in the Star this past week. It's coming this decade, according to a contrarian who has been prescient on the subject.
We know oil prices are at a record high. Production has peaked. No major new fields are being discovered. We are running out of oil, except in the Middle East and parts of Africa.
Natural gas has doubled in price in a year. A regional commodity that became continental will soon be traded worldwide, like oil: bought on one continent and sold in another, given the needs of North America.
That means huge Liquefied Natural Gas tankers. And LNG ports and depots. About 10 each on the East Coast, the West Coast and the Gulf Coast.
"LNG tankers and re-gassification terminals are the worst thing imaginable, from a security aspect," says Ed Schreyer. "One bullet by a terrorist, and you'd have a catastrophe."
He is no prophet of doom. But he sees clear dangers.
We are entering the end of the 100-year era of oil, he says.
"We are 10 minutes to midnight," notwithstanding "the `horn of plenty' school of unbounded optimists" or those pinning their hopes on new techniques of extraction. "Capital put into an old and exhausted field is like buying the Brooklyn Bridge."
Oil will still be around for another 50 years, he says. But "almost anytime soon, perhaps in this decade ... supply and demand will be out of balance and so will price — and so will almost everything else that makes for a stable society and civilization."
The coming "chaos and misery" would grind transportation to a halt, of course, but also industry and agriculture. (end snip)

Worth a quick trip to Toronto for a good read.

mikalCampaign against China's yuan peg? #1234028/1/04; 09:26:46

President Bush pressures China on currency during campaign tour
Gandalf the WhiteTHANKS, Sir Toolie ! <;-)#1234038/1/04; 10:34:40

Toolie (8/1/04; 03:45:07MT - msg#: 123401)
The Toronto Star's late submission for "the end of cheap oil" contest.
WOWSERS === Look at that !
Does it seem like a number of USAGOLD Forum "LURKERS" may also be newspaper reporters ?
WHY NOT ? After all, they will get the BEST DISCUSSIONS about the most important subjects, when they drop-in and visit HERE !
SOOOOO, here is my "scoop" item!
----Think YELLOW !!!

CometoseThe latest terror objective..........of Al Queda????#1234048/1/04; 18:23:21

Any planned attacks on any Wall St objectives from the outside are not well founded nor do they show the intelligence of a formidable enemy......

The real threat to Wall Street and vulnerability is
a threat that lives in the disease that is already growing there and within the banking system ......(why attack the patient which is in Intensive Care Unit)

The disease is spreading there without any help , from the outside, thank you very much.......It's degenerative......
and disintegrating the tissue fabric and integrity of that fabric from within ......

When Gangrene occurs or cancer in the fabric of the Human Context , It is usually burnt out or cut out........
Alan Gangreenspan has stimulated the Growth of the cancer in the financial system by feeding it GROWTH HORMONE IN THE FORM OF PRINTING PRESS PAPER DOLLARS........... I think the system is long overdue for FINANCIAL COLLOIDAL SILVER AND COLLOIDAL Free itself of the infection that is being encouraged by it's current staff of physicians ...
who want to make a career out of treating symtoms rather than eliminating the cause of the infection which has effected a prolonged diseased state in the PATIENT......

THe Cinderella Economy has turned into the Jeckyl and Hyde Economy ..........and there is a WIZARD BEHIND THE Curtain pulling all the Mysterious BULL that keeps the carnival show going on for the NAIVE....and disinformed........(Play by play daily updates offered up by the sold out newsmedia that is owned by WALL STREET)

Stay tuned ; this is more fascinating than the most fantastic creations Hollywood could ever come up with ....
for a WHO DUNIT MURDER MYSTERY............

Unfortunately this is Surreally covered (fogged up )REALITY ......and it's going to end badly and it's our country and economy that is being murdered........

GoldendomeU.S. financial markets in grave danger do to real estate debt!#1234058/1/04; 18:38:41

Contrary Investor (linked here) really has put out a whiz-bang monthly market commentary on the real estate market. Loaded with lots of omminous graphs and pointing out why they think that a real estate market slowdown or slight decline is potentially devistating to the U.S. economy. It doesn't look good; and their graphs and stats show why! Here are just a very few brief excerpts from this very worthwhile warning article:

...At year end 1998, household net worth exposure to common stocks and residential real estate was about equal in dollar magnitude. As of the end of 1Q 2004, household residential real estate values exceeded household common stock holdings by 67%. In our minds, this has put real estate front and center in terms of the so-called household "wealth effect". As mentioned, we've been through this conceptual material before. Suffice it to say that residential real estate values are very meaningful to the total current picture of US household net worth, to say nothing of emotional and financial well being....

...Broad potential for credit expansion was not hampered in general by the NASDAQ price pop. And it's really no secret as to why. Quite simplistically, the stock market bubble was not financed by the banks. It wasn't financed by Fannie and Freddie. At least not directly. It was financed by pension funds, mom and pop investors armed with personal, IRA and 401(k) money, and it was financed late in the game by foreign interests unable to avoid the temptation of joining the party. And, yes, in part it was financed by margin debt. But compared to mortgage debt in the system, margin debt even at its peak was an absolute dollar rounding error.....

...Greenspan and the Fed can do all of the tough talking they'd like about standing ready to raise interest rates if inflationary pressures even sneeze. But the reality is that they will not be able to tolerate a pop in the mortgage finance bubble. That will not be acceptable as the fallout would seem much more severe systemically than was the case with the equity bubble burst. And, as you know, we have not even mentioned potential impacts on the large GSE's that are holding a good chunk of the remaining mortgage debt in this country. Or the fallout a significant GSE problem would transmit throughout the system. ....

...For now, the US economy and financial system has proven that it can withstand an equity bubble implosion. Of course the price for that resilience has been record monetary and fiscal stimulus, record credit expansion, record trade and budget deficits, etc. We're not so sure that a meaningful setback in US real estate prices would produce a similar outcome. Especially since the monetary and fiscal authorities have largely plundered their financial ammo supply. And especially given the fact that the provocateurs of recent systemic credit largesse, the banks and the GSE's, would take a direct hit to the balance sheet. In our minds, all bubbles and not created equally nor do they deflate in similar trajectory. For now, the system has been able to withstand the bursting of one financial bubble. Let's just hope it isn't called on for an encore performance.

And later, when speaking about stocks in the real estate sector: ...... the potential canary in the coal mine is Fannie. What has struck us for a good while now is that despite absolutely record breaking refi and new mortgage activity during 2002 and 2003 (and into early 2004), Fannie has not been able to make a new high as a stock. In fact after peaking in late 2000, Fannie is essentially putting in a series of relatively well defined lower highs. We suggest that the ultimate resolution of the longer term wedge formation that is clearly obvious in the weekly chart below will be very telling as to mortgage credit quality stateside going forward....

USAGOLD / Centennial Precious Metals, Inc.Enter the gold market with grace and confidence.#1234068/1/04; 19:58:52">Get a head start on the gold market!
Maverick1Fading Spike#1234078/2/04; 07:39:11

With this morning's opening action in light of terror reports, I have come to this conclusion. The fed will try to control gold with paper trading until nothing short of a nuclear device is exploded on this soil.
Even some time after (weeks maybe) gold will still remain a bargain as they try to put out the flames with truckloads of the stuff. Buy it now and hold tight. We are in for a rough ride!!

CometoseKeeping in Context .........#1234088/2/04; 09:23:19

Look what is happening in context to derive a correct interpretation of where we are and where we are going in this Metals market and in this economy...

Pardon me , if this post has already been posted

misetichUS Home Affordability Fell in 2nd Qtr-NAR#1234098/2/04; 10:01:56;jsessionid=YN0EBJ3Y3TRIKCRBAELCFFA?type=businessNews&storyID=5846563


WASHINGTON (Reuters) - U.S. houses were less affordable in the second quarter than in the prior quarter because of rising home prices and interest rates but the market outlook remained favorable, an industry group said on Monday.
The National Association of Realtors said its housing affordability index fell to 133.6 in the second quarter of 2004, down from 144.1 in the first quarter and also lower than 143.8 in the second quarter of 2003.
NAR said the first-time buyer index, which shows the ability of renters to qualify for a mortgage, also fell to 77.0 in the second quarter from 83.4 in the prior quarter, and was also under 82.9 in the second quarter of 2003.

IR are on the rise. Quality jobs are scarce (latest purchasing managers reports indicated a declining number on hirings), material prices are rising.

Homes are going to get more unaffordable in the near future. One of the pillars, used by the Feds in their exit strategy is weakening under the stress.

ANOTHER part of the collateral damage created by The 2004 Oil Shock And Awe

All Aboard The Gold Bull Express - Part ll

misetichReality Check: U.S. Auto Dealers Report July Sales Rebound Aug 2 / 9:22 EDT#12341008/02/04; 15:04:50


NEW YORK (MktNews) - Most U.S. auto dealers report sales
rebounded in July, fueled by an outpouring of incentives by domestic manufacturers aiming to turn around a faltering market.
But there were persistent pockets of weakness that no amount of incentives or extra time seemed able to fix -- with consumers seemingly reluctant to buy in the face of political and economic uncertainty, a number of dealers say.

Just how important is auto industry in the US economy?

From Morgan Stanley - Dick Brenner

The data reveal that the spring deceleration reflected two temporary factors. First, a larger-than-expected plunge in motor vehicle output and sales accounted for virtually all of the downshift to 3% growth in the spring. Motor vehicle production directly accounts for only about 3% of GDP, but it often calls the tune for short-term swings in overall growth. In this case, Detroit had reduced sales incentives in the early spring, hopeful of boosting profits. But sales slipped and stocks of vehicles grew uncomfortably high, to well over 100 days’ supply for some models, according to our auto analyst Steve Girsky. In response, the Big Three slashed spring production by 25.5% annualized, the most in eight years. Apart from that swing in vehicle output, GDP rose by 4.2% in Q2, little changed from the 4.3% increase in Q1.

End of snip

Thus notwithstanding Sir Greenspan "New Economy" the auto industry plays a significant role.

Though at first glance the news is "positive" it isn't. US auto manufacturers LOST market share in July - and their inventory is still running HIGH

GM was downgraded in the last week, for a variety of reasons, with one of them being overstock.

The combination of higher IR's and higher US $, combined with reduced consumer spending is a triple whammy for the auto industry - which employs a large number of employees - directly and indirectly

Consumers are being conned by "incentives" as the price tag has increased significantly in new models

Far from a bullish report the rebound appears to be unsustainable and production cuts are expected leading to LOWER EMPLOYMENT and higher layoffs

Whilts the Feds, PPT have the "upper hand" in establishing particular trading directions for a variety of markets including gold, the foundation - read ECOMONY - is crumbling from under their feet as No quality jobs are being created

All Aboard The Gold Bull Express - Part ll

USAGOLD Daily Market ReportPage Update!#12341108/02/04; 15:05:49">
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.

--- closing market excerpts ---

Gold sags but seen underpinned

The most-active Dec contract settled 70 cents higher at $394.40 per ounce...

Gold futures on the Comex division of the New York Mercantile Exchange proved unable to build on their firm start at $395.50 per ounce and wilted through the session Monday amid thin trade. Players remained content to allow the movement and tone of the U.S. dollar dictate gold's direction...

Gold got off to a firm start Monday after renewed terror concerns over the weekend dented the U.S. dollar and heightened gold's allure as a safe-haven asset overnight. By late morning Monday Dec prices had eased notably from their opening highs to below the $394 level on muted demand, but then held largely flat over the remainder of the session as selling interest stayed light also.

Sources agreed that with terror concerns now back on the agenda and the broader markets still coming to grips with largely underwhelming U.S. gross domestic product data released Friday, the dollar will struggle to display any bouts of sustained strength any time soon...

------(see url for access to full news, 24-hr newswire)-----

misetichCollateral damage from housing bust - P. Kasreil#12341208/02/04; 15:28:08

This week's commentary is a "what if." What if the U.S. housing market goes bust? Of course the healthy home construction business will get ill. C ontractors will be begging for business and former mortgage brokers will return to driving cabs. Because homeowners’ in-house ATMs will have run out of cash, it will be easy to get a parking place close to the shopping mall's anchor store. But the most serious collateral damage from a housing bust
would be a wounded U.S. banking system. As Chart 1 shows, that home mortgage debt accounts for a record 32% of total U.S. nonfinancial debt. To put this in perspective, U.S.
Treasury debt held by the public accounts for only 18% of total domestic nonfinancial debt.
U.S. commercial banks have become major investors in mortgage-related debt. As Chart 2 shows, about 60% of U.S. banks’ earning assets are mortgage-related – a post World War II high. In 1986, the percentage was only 30.

It sounds like Mr. Kasreil has raised the housing lookout below signal to YELLOW

All Aboard The Gold Bull Express - Part ll

MKShort & Sweet. . . .The Client Letter#12341308/02/04; 15:50:41

Those of you who have known me for a long time know that I am not given to alarmist reactions to the news. If anything, I have downplayed various threats we have mutually encountered over the years while at the same time reacting sensibly to the concerns of our clientele. However, there are two developments this past weekend which have elevated my concern if not to alarm than to a higher degree of awareness. The first has to do with the terrorist threat to Wall Street institutions including the New York Stock Exchange, Citigroup, Prudential and International Monetary Fund buildings. The second has to do with the potential collapse of the United Airlines pension fund. In both instances, I am more concerned with the knock-down effect such developments might have on public confidence in the financial system over the long run than the direct and immediate damage potentially imposed by each. That loss of confidence will occur not just at home but overseas as well....................I would expect even stronger movement. . . . .


Our private Client Letter goes to established clientele and to prospective clients for a limited time period. It comes by e-mail. Those with an interest can receive it by requesting an information packet at the link above.

GoldendomeEngland expected to raise interest rates.#12341408/02/04; 23:02:49

The Bank of England is considered certain to raise its base rate from 4.5 per cent to at least 4.75 per cent this week when the monetary policy committee reveals its August decision. But after yesterday's manufacturing numbers, tongues were wagging about a leap to 5 per cent.

"It's possible to see a case for 50 basis points," said HBOS economist Mark Miller. He pointed out that the manufacturing data came on the back of a stream of numbers last week showing a continued stubbornness among consumers to pare their debts...factory output surged to 59.5 - the hottest expansion rate since 1996 and way above the 50-mark that denotes no growth. A figure around 60 is considered exceptionally strong...

TopazOil/DX.#12341508/03/04; 01:59:36

Despite a rather benign start to the Week, the upward pressure on DX is being applied in earnest today ... note the largish "range" and negligible "entering and leaving" difference ... our equilibrium DX now is 95 @ this point, and to forestall this a whole lot of Bond buying needs to happen.
misetichU.S. Oil Strikes New Record Above $44#12341608/03/04; 04:25:38


SINGAPORE (Reuters) - U.S. oil prices hit new record levels above $44 a barrel on Tuesday as the head of the OPEC producers' cartel said there was little the group could do to cool the red-hot market for the time being.
OPEC President Purnomo Yusgiantoro said on Tuesday the producers' cartel had no extra oil to immediately supply the world market to bring down prices.

"The oil price is very high, it's crazy. There is no additional supply," Purnomo told reporters in Jakarta.
Oil traders are nervous that strong demand is preventing global stocks from building ahead of peak winter demand.

A new day .....a new record for oil prices ...its beginning to be "normalized" since there little that OPEC can extra oil

A year ago the forecasts included oil flowing from the "liberated" Iraqi fields - well that's ANOTHER story now - as the "liberated" feel they're being occupied and are fighting tooth and nail to get the foreigners out of Iraq

Interesting how the Iraq's invastion gets little headline news amongst oil articles. Barely a mention. Yet it is the missing Iraqi oil from the markets that is propelling oil prices higher and higher with little relief in sight.

Worst still there's no end in sight for the turmoil in Iraq and as such little relief is expected from the Iraqi's pipelines as they're constantly being targetted and sabotaged.

Beyond Iraq, Saudi Arabia oil infrastrure is also amongst the targets and though its been a couple of months since the last incident, the probabilities of other IMMINENT attacks are HIGH - as the objectives of the sabateours is clear.

The industrialized west, is in a coma. Daily, prices are rising and the inflation pipeline is gathering gargantulan proportions

History has not been kind to oil consumption and dependent nations as typically a RECESSION has followed oil price spikes.

Global economies have been reflated, as billions and trillions of paper fiat confetti has been printed out of thin air to "reflate".

Factories are humming in Germany, as they're busy supplying the thirsty China's expansion.

Even in the US a rebound is underway, in the decimated manufacturing sector - which has been propelled primarily for its military needs

In additon the global economy is temporarily "benefitting" from the over inflated real estate market as the spill over from valuations and hence collaterazid loans are being used by consumers, intend on maintaining a specific standard of living, even though jobs and wage increases are at best weak.

The 2004 Oil Shock And Awe is barely underway - though prices have risen almost 100% from the "norm".

It is the staying power of such Shock And Awe campaign that is being underestimated - Very little is being done by the oil consumption nations to address the prohibitive energy waste.... thus it wouldn't surprise if oil prices zoom up to the $80 and higher levels

How will higher oil prices related to gold prices? To the moon the moon!

All Aboard The Gold Bull Express - Part ll

misetichForecast: China's crude oil import to hit 110mln tons#12341708/03/04; 04:58:37


BEIJING, Aug. 3 (Xinhuanet) -- A recent analysis report of China'sMinistry of Commerce forecasts China's crude oil import will reach110 million tons in 2004, up 21 percent year-on-year and setting anew record.

The report also forecasts that refined oil import would rise around 40 percent to 40 million tons this year.

Customs statistics show China imported 61.02 million tons of crude oil valued at approximately 15.17 billion US dollars in the first half of this year, up 39.3 percent and 57.4 percent year-on-year respectively. China imported 19.85 million tons of refined oil valued at approximately 4.46 billion dollars, up 56.6 percent and 66.1 percent respectively.

China's juggernaut economy keeps on chugging along, devauring global natural resources at an unparalled and unexpected level

The "famed" China's hard landing for its economy seems a distant past

Industrialized western economists are still in the midst of the fog and thus far have been unable to see the trees, because of the forest

All Aboard The Gold Express - Part ll

misetichTreasury Secretary says US financial system operates normally#1234188/3/04; 05:11:36


WASHINGTON, August 2 (Xinhuanet) -- US Treasury Secretary John Snow said Monday that the nation's financial system continues to operate normally and "numerous steps" have been taken to protect the financial infrastructure.

"Our nation's financial markets, financial institutions and financial sector continue to operate normally," Snow said in a statement, which came after a new warning about possible terroriststrikes on Sunday.

He said "the Treasury Department has been in close, continual and ongoing cooperation with the Department of Homeland Security, other federal, state and local financial regulators, the international financial institutions, and the private sector to strengthen and protect our critical financial infrastructure."

"We have taken numerous steps," he said.

"People around the world rightly have confidence in the US financial markets," Snow said. "While we must always remain vigilant against terror, we will not be intimidated and prevented from enjoying our lives and exercising our freedoms," he added.

Federal regulators and law enforcement officials will continue to work closely with financial market participants to "quickly respond to any potential market disruptions," he said.

Snow also said that "America is safer today because we have made it harder and costlier for al-Qaeda and other terrorist groups to raise and move money around the world."

The stock market has been comitose for years now - as has the bond market in general

The gold market has been and is being managed. Yep - the financial system operates normally.

Mr. Snow underestimates the homeland security costs which have added a tremendous burden on the US economy and its fiscal budget deficit

In addition, confidence by foreigners in the US financial markets is "soft" and thus vulnerable in the mindset of investors -

Even a minor event would severely test Snow's assurances. The likelyhood of a minor event in US territory is HIGH

All Aboard The Gold Bull Express - Part ll

misetichBreaking News: Attack halts oil exports from northern Iraq#1234198/3/04; 05:19:17


A major attack on the main pipeline connecting the oil fields of Kirkuk with Turkey has halted exports through northern Iraq.

A Northern Oil company official says an explosive device was placed close to a network of pipelines west of Kirkuk.

He says firefighters are still battling the raging flames.

Iraq only started exporting limited quantities of crude oil through the pipeline at the end of June.

It had been out of commission for 10 months following a series of attacks and sabotage.

Oil supply disruption continues.

All Aboard The Gold Bull Express - Part ll

TownCrierOne of the many faces of inflation, weakening dollar#12342008/03/04; 09:16:13

HEADLINE: Scrap demand lifts steel prices, no drop in sight

NEW YORK, Aug 2 (Reuters) - U.S. steel prices, already at record levels, are surging higher on rebounding prices forscrap steel, boosting steelmaker's forecasts for the third quarter and full year.

Since the beginning of the year, steel prices have risen steadily, nearly doubling in some grades, buoyed by strong global demand, a weak dollar and the steep raw material surcharges used by many steelmakers to pass on rising costs to customers.

...pricing has stayed strong and no peak is in sight.

"I think we're in for a multi-year recovery here," said independent steel analyst Michelle Applebaum. "Typically, what would cap-off a recovery in the United States would be new capacity. ... but raw material costs are so high that incremental blast furnace capacity is just not going to come on scene."


It's never too soon to prepare yourself for the journey ahead. Use the url to request an introductory information packet from the most professional gold brokerage I'm aware of -- USAGOLD~Centennial Precious Metals. As you'll see, providing your phone number is optional; the staff at USAGOLD~Centennial are not in the business to call you with high-pressure sales tactics like we see coming from other firms. You, alone, are in the best position to know when the time is right for you to add gold to your portfolio, and it is for those such times that USAGOLD~Centennial is pleased to provide you with a toll free number to accept your incoming calls.

If you're new to this realm, take your next step toward financial sovereignty and make your request to have a free info packet mailed to you today!


TownCrierThe evolving form of banking and cash handling#12342108/03/04; 10:00:00

PRESS RELEASE -- Federal Reserve Banks Announce Changes to Increase Efficiency in Check Services as Shift from Check to Electronics Continues

Aug. 2, 2004--The Federal Reserve Banks today announced further changes to increase the efficiency of their check-processing operations while maintaining high-quality services to depository institutions throughout the country. Check processing operations at nine sites will be discontinued......... they respond to the nation's increasing substitution of electronic payments for paper checks.

This announcement follows the Reserve Banks' June 16, 2004, announcement of a strategy to meet the evolving demands of the payments system.

The Reserve Banks will continue providing check services to customers nationwide. However, by decreasing the number of check-processing locations and increasing capacity at other sites, the Reserve Banks will reduce their check service operating costs in line with the ongoing shift in consumer and business preferences for electronic payments.

"These changes are intended to improve the efficiency of our check operations while maintaining high-quality check services to depository institutions nationwide," said Gary Stern, chairman of the Reserve Banks' Financial Services Policy Committee and president of the Federal Reserve Bank of Minneapolis.

"As we've been saying for some time and as the financial services industry realizes, not only are fewer checks being written, but paper checks are increasingly giving way to electronic alternatives," said Stern. "While this makes for an increasingly efficient payments system, it also means that we must shift work among offices and, unfortunately, some dedicated staff will lose their jobs."

In 2003, Reserve Banks' check volume declined at about a 7 percent rate. During 2004, check volumes have declined at an accelerated pace, and such declines are expected to continue in coming years. A 2001 Federal Reserve study revealed that about 42 billion checks were written in the United States in 2000, down from about 50 billion in 1995. The Reserve Banks will continue to assist the nation's financial services industry by conducting research related to the nation's payments system. The results of the most recent payments study will be available later this year.

The Federal Reserve Banks' long-term check processing strategy will allow them to better meet the expectations of the 1980 Monetary Control Act. That act requires the Federal Reserve to set prices to recover, over the long run, its total operating costs of providing payment services to depository institutions, as well as the imputed costs it would have incurred and the imputed profits it would have expected to earn had the services been provided by a private business firm.

------(from Fed Press Release at url)------

As the banking and monetary system responds to demands for speed, convenience and efficiency it shifts ever more toward ethereal constructs that rely upon maintaining the perfection of trillions of bits of electronic data storage and transfer.

Ignoring for the moment the insidious depreciation of this system's money through growth of supply, a more immediate concern is its ability to be "here today, gone in a blink" due to its intangible electronic nature.

While this may be an acceptible risk for activities at the margin, it is not a good position for the safekeeping of your life's savings. That is, it's not a good basket in which to be putting all of your eggs.

Largely speaking, many of the financial markets -- bonds, stocks, futures -- are just variants of this same electronic score-keeping system; the same sort of basket.

Choose gold for your savings. It will withstand any amount of blinking, tecnological glitches, and even civil distruptions.

Call USAGOLD~Centennial today for a consultation on a diversification strategy that's right for you.


TownCrierGold price graphs#12342208/03/04; 10:24:16

After a welcome pricing discount for bargain hunters during the latter third of July, the pricing picture for gold looks bright. Get it cheap while you may.

Call for the friendly professionalism you deserve. 800-869-5115


KnallgoldThe xinhuanet snippets from misetichs #123418#12342308/03/04; 10:35:39

" (Snow)said "the Treasury Department has been in CLOSE, CONTINUAL and ONGOING cooperation with the Department of Homeland Security, other federal, state and local financial regulators, the international financial institutions, and the private sector to strengthen and protect our critical financial infrastructure."

KG:In other words,total control.

"We have taken numerous protect the financial infrastructure"

KG:sounds like holding the system together with sticky tape and string...not a sign of a healthy system.

"..quickly respond to any potential market disruptions,"

KG: ANY disruptions-what besides terror did he mean?

"People around the world rightly have confidence in the US financial markets,"

KG:then why not let the market decide?Especially when using the phrase of "exercising freedoms",Mr. Snow.

" US financial system operates normally"

KG:he is either cynic or protests a bit too much.

Knallgoldlast post#12342408/03/04; 10:40:51

Sorry for editing so badly.I'm close to falling asleep watching the Goldmarket these days...
misetichConsumer Spending Drops by 0.7 Percent#12342508/03/04; 11:58:13


WASHINGTON - Consumers slashed their spending in June by the largest amount in three years as high energy prices took a toll on their wallets and made them more cautious buyers.
Americans' incomes rose by 0.2 percent in June, down from a solid 0.6 percent increase the month before.

Wage increases are weakning, demonstrating weak labor market- and Real Price Inflation is beginning to slow consumer spending significantly

All Aboard The Gold Bull Express - Part ll

misetichRetail Sales - Weak#12342608/03/04; 12:07:26


Sales at the nation's retailers continue to struggle, rising only 0.2 percent in the July 31 week compared to the prior week.

The year-on-year rate was only 3.1 percent in the week, a very poor showing that puts the year-on-year July average at no more than 3.5 percent.

Whether its cool weather or summer doldrums, shoppers seem to be staying home.

and the Redbook sales confirms the same trend


The pace of retailer sales picked up in the last week of July to trim the month-to-month decline to only 0.1 percent, according to Redbook.

Year-on-year sales in the July 31 week rose 3.9 percent, a bit higher than the pace in prior weeks and standing in slight contrast to a weaker ICSC-UBS report issued earlier Tuesday.

Despite the uptick, the year-on-year pace for the month of July was only 3.2 percent, no better really than the pace of inflation.

A DNA sample of the the economic "soft patch" Sir Greenspan alluded to, is being to the fiat lab for testing - The markets are awaiting the remedy.

All Aboard The Gold Bull Express - Part ll

misetichChallenger Report - Layoffs on the rise#12342708/03/04; 12:12:51


U.S. layoffs edged higher in July to 69,572 vs. 64,343 in June, according to data compiled by outplacement firm Challenger, Gray & Christmas.
NEW YORK (Reuters) - Layoffs in the United States rose 8 percent in July from the previous month, a report said on Monday, as the job market recovery struggled to gain momentum.
The outplacement firm Challenger, Gray & Christmas Inc. said employers announced 69,572 job cuts in July, up from 64,343 in June but down 18 percent from July 2003.

Hiring announcements also declined, but companies do not announce hires as frequently as they announce layoffs. The number of announced hires fell to 26,880, a 30 percent decline from June's 38,377. June hiring announcements fell 31 percent from May.

Anectodal reports keep on confirming a much weaker US economy than the SM has priced in

A readjustment is typically expected under these cirmcumstances

All Aboard The Gold Bull Express - Part ll

misetichIMF seeks US tax rises to meet fiscal problems#12342808/03/04; 12:50:59


The International Monetary Fund has said that the Bush administration's plans to halve the US fiscal deficit over four years are too modest and called for tax increases to tackle longer-term fiscal problems.
Balancing the budget excluding the Social Security surplus, which has been the IMF's long-standing prescription for the US, would require fiscal measures worth up to 4 per cent of gross domestic product by the end of the decade, the IMF said.

..and the from the IMF site - US report


Directors recognized the need to address the severe underfunding of the Social Security and Medicare systems, noting that delaying reforms would only entail larger and more painful adjustments later. In this context, a number of Directors agreed that recent proposals to amend indexation formulas to slow the growth of Social Security benefits merit consideration, but several cautioned that diverting a portion of the payroll tax into private retirement accounts would significantly lower fiscal revenues and would have to be coupled with durable steps to ensure long-term fiscal sustainability. Directors observed that the underfunding of the Medicare system dwarfs that of Social Security, and has increased significantly as a result of the additional drug benefits introduced last year. Therefore, early steps to contain the growth of health care outlays are needed.

The IMF report and assessment issued on July 23, did not reflect US slowed GDP growth in the US to 3%

All Aboard The Gold Bull Express - Part ll

USAGOLD Daily Market ReportPage Update!#12342908/03/04; 13:48:21">
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.

-----closing market excerpts------

Gold takes three-session gain to $7

Gold futures prices closed higher Tuesday, taking their three-session gain to almost $7 an ounce with the threat of terrorist attacks in the U.S. and economic data this week fueling uncertainty in the broader stock market.

Gold for December delivery closed at $396.50 an ounce, up $2.10 on the New York Mercantile Exchange.

"Between terror threats and oil at $44, gold should hold the $390 level," said Amaury Conti, equity trader at Austin Calvert-Flavin... "The upside will depend on whether or not the dollar continues to strengthen on the back of positive economic data -- of particular interest will be Friday's employment data," he said.

"The Street still thinks that it can forecast economic activity, but the numbers [Tuesday] confirm their lack of ability," said Ned Schmidt, editor of Value View Gold Report, an investment publication of Schmidt Management.

Some traders "continue trying to trade against the dollar's bear-market trend, and they will lose," he said, adding that "dollar rallies of any kind this week are an opportunity to sell dollars and buy gold."....

-----(see url for access to full news and the USAGOLD 24-hr newswire)-----

additional market news:

NEW YORK, Aug 3 (Reuters) - Disappointing U.S. economic figures hoisted COMEX gold off its lows on Tuesday, while worry that al Qaeda is targeting New York for attack also helped the safe-haven metal recover from a morning shakeout.

On Sunday Washington ratcheted up the national terror threat level to "high," citing intelligence that extremists had placed specific buildings in New York, New Jersey and Washington under watch to map out attacks on major financial institutions.

"Certainly, security concerns are a background supportive factor and might become more of a factor as we approach the Republican convention," said David Rinehimer, head of commodities research at Citigroup Global Markets. The Republican Party will gather in New York City at the end of this month to renominate President George W. Bush.

"But right now, the markets are "wait and see what the Fed does,'" Rinehimer said.

On Friday, December gold rose nearly $4 on news that the economy expanded at a subdued 3.0 percent annual pace in the second quarter, a slowdown from the healthy 4.5 percent growth rate in the first three months of 2004. The slowdown will make it harder for the Federal Reserve to raise interest rates aggressively, which could keep the dollar on the ropes.

"We're more subjected to outside influences, than we are to supply/demand," said James Quinn, commodities commentator at A.G. Edwards, referring to the gold market.

"It's more currency sensitive, maybe a little oil sensitive, and the volume is less than moderate."

NYMEX crude oil prices reached an all-time high above $44 a barrel on Tuesday.

TownCrierAugust: significant events in US Treasury history#12343008/03/04; 14:46:15

August 1
1789 -- The first U.S. tariff act went into effect.

August 2
1886 -- The Oleomargarine Act established the Bureau of Alcohol, Tobacco and Firearms (ATF) laboratory system.

August 4
1790 -- Congress authorized the first U.S. Government securities.

August 5
1861 -- The first income tax was levied by the Revenue Act on all income over $800.

August 7
1794 -- Farmers rebelled against the Whiskey Tax and Washington called up Federal troops to suppress the Whiskey Rebellion.

August 13
1981 -- The Economic Recovery Tax Act was enacted. It reduced individual income taxes by 23 percent, lowered estate taxes, and introduced indexing into the tax system.

August 14
1935 -- The Social Security Act was signed into law.

August 15
1971 -- The value of the dollar was allowed to float (severed from gold convertibility) and the first peacetime price and wage controls were instituted.

1986 -- The first Treasury securities were issued under the Treasury Direct computerized book-entry system.

August 18
1966 -- Production of $100 Federal Reserve notes bearing the motto In God We Trust began.

August 19
1785 -- Congress authorized the Treasury Board to fix standard weights and measures for the United States.

August 20
1925 -- A Committee was appointed to study the design of currency notes.

August 21
1862 -- Fractional Currency, also known as postage currency, was issued in 5-cent, 10-cent, 25-cent and 50-cent notes. The third issue also included a 3-cent note.

August 24
1814 -- The British burned the Main Treasury Building and dined by its light across the street in Rhodes Tavern.

August 28
1933 -- An Executive Order regulated the hoarding and exporting of gold. It prohibited holding of gold by United States citizens.

August 29
1861 -- The first United States currency was produced by the Treasury Department in the basement of the Main Treasury Building.


2004 -- Many investors call USAGOLD~Centennial and become gold owners for the first time over concerns for the U.S. dollar losing a pillar of support in its legacy as a primary international reserve asset. Will you be counting yourself among them and counting your newly gotten solid savings?


misetichGM, Ford Sales Off, But Industry Rebounds#12343108/03/04; 16:51:38


DETROIT (Reuters) - General Motors Corp. (NYSE:GM - News) and Ford Motor Co. (NYSE:F - News) reported weaker U.S. July sales on Tuesday, but strength among some of their Japanese rivals helped drive industrywide sales up sharply from a dismal June
While GM's sales fell 3.4 percent,......Ford's July sales fell 6.8 percent
The U.S. market share of Detroit's traditional Big Three automakers ended July at about 59 percent, close to an all-time low as they continue to lose share to foreign brands.
"Nissan and Toyota are eating Ford's and GM's lunch," said David Healy, an auto industry analyst at Burnham Securities.

"I think Ford's market share is as low as it has been since the 1930s," he added.
Heavy discounting has eroded profits for virtually all players in the hypercompetitive U.S. auto industry, but the Big Three have been the leading victims of a protracted price war.

The weaker Yen is assisting Japanese auto manufacturers in increasing their market share at the expense of US auto mfrs and US based workers

The jobless recovery continues

All Aboard The Gold Bull Express - Part ll

DryWasherRed-Hot Oil Keeps Rising, Gold Edges Up#12343208/03/04; 17:00:03


"CHICAGO (Reuters) - Oil prices hit record highs on Tuesday as OPEC seemed helpless to curb the relentless climb above $44 a barrel, while a weak U.S. dollar lifted gold."

"The oil price is very high, it's crazy. There is no additional supply,"

"OPEC members raised output in July to nearly the highest level in 25 years at 27.57 million barrels per day (bpd) as record-high prices enabled them to pump at just about full tilt, a Reuters survey released on Tuesday showed"

"COMEX gold futures rose as disappointing U.S. economic data weakened the dollar, a move that would make bullion cheaper in overseas markets. There was also support from concerns that al Qaeda is targeting New York for attack."

DryWasher comment:

The main stream press is finally waking up and reporting on what we have all been reading about here for a long time. Need I say more?

GoldendomeQuestion for Misetich, Topaz, or anyone with the know.#12343308/03/04; 17:02:43

When retail sales or consumer spending are reported, is there any adjustment made to those percentages to reflect inflation? My questions involves whether or not any sales gains (or gains in quarterly GDP for that matter) may be simply reflecting the higher price we are paying for things; and not necessarily showing that more things are being sold? Thanks for any answers anyone may have.

GoldendomeMisetich: A follow up on your Auto report#12343408/03/04; 17:11:55

I read recently that there was growing political fear that the high inventories of unsold US autos on dealer lots, may cause extended model year change-over downtime and layoffs, at about the wrong time--going into the election time frame. There's no empty asphalt anywhere in my area to park any more of them; I know that.
Cometosegold / bonds/ usdollar/ oil#12343508/03/04; 17:54:53

Mr Sinclair has stated that the fed cannot intervene in the massive currency markets to the end of manipulation.....

George Soros and Warren Buffet and Jim Rogers (i guess ) have made some hedging insurance by buying huge positions in the currency markets....

Mr Russell thinks that this Oil spike is going to act upon the DOllar as if a short squeeze were occurring.....
and perhaps it already did........

Oil and other commodities are obviously valuable and now moreso because of what the world knows is going on at the Fed to prop up all this paper so as not to reveal the drop in substance........which may not be so obvious without a frame of reference......Anyone who has frequented Lake Powell over the past five years knows what a frame of reference is and what the water marks indicate relative to substance..this is not so easily gleaned when looking at the financial markets globally.

There are those, also, that believe that those in the know and those who are now large importers of Natural Resources are buying and stockpiling these resources because they have inherent and utilitarian value as opposed to the Dollar and Dollar denominated assets (named treasuries).

(The markets seek equilibrium)

Last year there was quite a run on Soybeans, Copper, Oil , GOld , Silver , Rhodium ......

and the Dollar went down quite a bit.... because of the inherent and the utilitarian value of owning these commodities as opposed to the Dollar and Dollar denominated assets......

If I had dollars and Dollar Denominated assets(in monumental amounts) and I knew that the dollar was overprinted and overvalued and I had massive amounts of these paper Dollars and Treasuries on my books as assets, I would also buy large amounts of all the above named commodities in amounts that reflected their UTILITARIAN VALUE AND THEIR INHERENT VALUE so as to offload as much DOLLAR BALAST AS possible in this Storm Tossed Sea.

I believe we are about to see another advance on this theme and this strategy on the part of the WISE investor and the Institutional buyer. I bet Marc Faber has a lot of orders on his desk at this moment that are to be executed in the next three months reflecting the voracious appetite of his clients to offload their balast and acquire more appropriate portions of commodities to make balance .

So we have this oil situation that grows in likemanner as the embargo proportions of the seventies.

So we have increasing demand for Oil Globally and Intense Global consumption of Commodities for their inherent value and for their UTILITARIAN VALUE as well.....When the GLOBE looks to buy commodities for their UTILITARIAN VALUE and for their inherent value , WHAT DOES THE GLOBE DO TO RAISE DOLLARS TO BUY OIL (and those valuable commodities that the globe is stockpiling for a RAINY DAY?)

WHERE YOU GONNA TURN ???? OH, down here on my asset account , I see all these dollars and dollar denominated assets. So for every dollar , I need to to spend for oil , I am going to also spend another 5 or 6 or 7 , or 8, or 9 or 10 , to buy other commodities that I want and need that have inherent value and utilitarian value that I am not holding a lot of dollars or dollar denominated assets when my people need to EAT . or Drink, or Sleep in Houses with Heat , or Drive Cars , or have Light . These intitutional buyers are also buying GOLD AND SILVER to make their asset balances more balancing with regard to paper dollars and paper U S treasuries.

I would therefore expect another season in which we see spikes in the price of soybeans, copper, gold 'silver , oil , Rhodium ..etc etc etc...

I would also expect to see more weakness in the dollar ...
because it is weak, it needs to be replaced in the reserve accounts of Global Institutions....and it is being replaced with commodities because of their inherent value and because of their utilitarian value......

I believe Mr Russel is correct in his assessment that there is going to be a short squeeze effect on the dollar because of the increased price of oil (which may have already happened)......inasmuch as everyone must pay for their oil in dollars........but I believe that the short squeeze he warns of is being counterbalanced buy dollar buying of all the other commodities I mentioned as a hedge institutional buyers are using to offload their balast dollars and dollar denominated assets ........prior to its unseemly future.

Black BladeMarket Wrap Up - Hartman#12343608/03/04; 18:18:02


Since the numbers were compiled for June, energy prices have done nothing but move higher the entire month of July. In my opening statement I said the price of oil hit another all-time high, but I must qualify the statement by saying it has reached a high in absolute dollars, but using inflation adjusted dollars, we still have a long way to go. In 1980 the price of crude broke through the $30 level, but adjusted for inflation using year 2000 dollars as a constant; the price of oil actually touched $60 per barrel. We have a problem with our measuring stick (the dollar) because it keeps changing in length. A dollar in 1980 was worth a whole lot more than it is today. You might ask, "How much higher could oil really go?" The simple answer, MUCH HIGHER! In a Bloomberg article today, "OPEC President Purnomo Yusgiantoro said the group may not be able to increase production fast enough to lower prices, which have surged 38% in the past year." In the same article Kevin Norrish, an energy analyst at Barclays Capital in London said, "We are in the upswing of demand toward the winter peak. The question people are beginning to ask is how that demand can be met." It actually runs much deeper than just production capacity for OPEC. Analysts are now asking for greater transparency in the way oil reserves are calculated and reported, as total available supply is now being brought into question.

I just went back to see where the markets are trading and it's nice to see silver and gold march higher throughout the day and close near the highs for the session. August gold settled at $394.00, a gain of $2.30 per ounce and September silver settled at $6.68, up six cents for the day. The performance of the metals during New York trading was actually better than the closing prices indicate, since they were pounded lower during overseas trading in London. Gold opened at $390.00 and silver opened at $6.50, so silver once again added more in percentage terms. As I recall, some of the major bullion banks closed up their operations in New York a couple years ago and moved their offices to London. Maybe it's easier to carry on their shenanigans without oversight from the U.S. authorities…reminds me of the lyrics to an old song… "Dirty deeds done dirt cheap!" I'm not complaining…market forces will eventually prevail!!

Black Blade: I am always amused as I listen to the pundits on TV and radio who still hype the tech and other such stocks and slam precious metals and energy. I listen to Denver's morning "B before Breakfast" on 760 AM local and some of the advice is OK and some is extremely laughable (yep, I get the station way up north). Yet they do keep a look at Gold and oil (sometimes NatGas) and the business news for the day. Watch out as a Saudi official announced today that they can't produce anymore and Russia has long since 'peaked" production. I read in the O&G Journal an article that the "crossover point" for world oil production-consumption will occur in 2007-2008. The Third World has fast rising demand.

Black BladeLosing patience with US trade deficit#12343708/03/04; 18:24:44


Now, there are indications that the world may be starting to lose patience with America's import profligacy and buildup in debts to foreigners.

Foreign interest in buying US stocks and bonds is slipping. May was the third consecutive month foreigners were net sellers of US stocks. Further, Japan appears not so keen on buying dollars to keep the price of the yen down, and thus help its exports be more competitive, now that the Japanese domestic economy has started to bustle. Recent monthly numbers suggest Japan, which already holds 16 percent of US Treasury bonds, is buying fewer of them.

Another telltale sign is the value of the dollar. An index that weighs its value against major foreign currencies shows the dollar down 19 percent since a peak in February, 2002.

Black Blade: It is inevitable and Asians are catching on. It should be "interesting" to see the rush for the exits when US Government paper is sold off.

Black BladeSimmons hopes he's wrong#12343808/03/04; 18:45:12


Leading energy analyst believes Saudi Arabia's crude oil supply near peak; calls for greater global reserve transparency to anticipate ‘cataclysm’. Matt Simmons hopes he is wrong. But if he's right in his belief that Saudi Arabia's giant oil fields might already have peaked and could start into rapid decline in as few as three years, somebody better have a "Plan B" ready or there's no way, he says — absolutely no way — to avoid a world energy cataclysm.

Pretty strong words. Stronger, perhaps, than any uttered before about energy. Simmons spoke them, and more, at a July 9 Washington, D.C., presentation made at a meeting on Saudi Arabia's future. The Hudson Institute sponsored the meeting.

Simmons asked for anybody, including the Saudis themselves, to refute his claim. But so far, in his view, nobody's stepped up. He acknowledges, however, that the Saudis recently have been more forthcoming about their ability to supply all the extra oil the world will require from Saudi fields. But still, it appears that nobody is willing to counter his specific charges.

Simmons knows whereof he speaks. He views the world oil supply picture from the vantage point of 30 years’ experience as founder of Simmons & Company International, Houston, which today is one of the world's largest energy investment banking groups.

Black Blade: Both Saudi and Russia have surpassed their "peak production". I would not be surprised to see higher prices over the coming months.

Black BladeConsumer Spending Drop Biggest Since 9/11#12343908/03/04; 18:50:15


WASHINGTON (Reuters) - U.S. consumer spending in June took its biggest plunge since September 2001 as shoppers, sapped by high energy costs, cut back sharply on car purchases, a government report showed on Tuesday.

Personal spending dropped 0.7 percent in June after climbing 1 percent in May, according to Commerce Department data. Wall Street had braced for a mild 0.1 percent drop. Adjusted for inflation, spending tumbled 0.9 percent.

By both measures, it was the biggest drop in consumer spending since September 2001, when shoppers retrenched in the wake of the attacks on New York and Washington.

Black Blade: Not entirely unexpected really. Refis' are falling fast and "keeping up with the Jones's" is no longer a major concern for many.

MKPosts I never made. . . .#12344008/03/04; 19:39:00

I have dozens of posts I never made. Things written and then just filed away. I thought I might start dusting off a few of these just for the fun of it with the hope they might generate some general discussion. This one is dated in my computer file 2/1/04. It has to do with revaluing official gold reserves and the potential effects a free market gold revaluation might have on the countries in question as well as the United States. The potential policy choices for Japan remain pretty much the same -- so this post still has contemporaneous value. I particularly like the advice to Ernst Welteke that if he truly has an interest in selling the German gold reserve that he contact Japan or China wherein he could sell the entirety of Germany's gold in one fell swoop.

A study of Japan's foreign currency reserve situation illustrates why allowing the price of gold to run might be what it is going to take to appease that country with respect to the dollar devaluation policies of the United States - a policy which can no longer be disguised rhetorically by the Treasury Department. Since mid - 2001 - a short two and half years ago - Japanese currency reserves stood at $330 billion. As of December, 2003, those reserves had nearly doubled to over $650 billion - and Japan, with its dollar support/intervention program, has their foot on the accelerator and the accelerator has found the floor. During the period, gold as a percentage of total reserves has gone from roughly 2% to less than 1.5%.

To say that Japan has put itself, and continues to put itself at a severe disadvantage by its current policies for the long run is an understatement. For the short run, though, Japan has found the secret to inflating its economy whether it realizes it or not, and that's why most of Japan's parliament continues to up the amount of yen that can be printed to buy dollars with about as much discipline as a heroine addict applies to the means necessary to pay for his next fix. They like the results, just as the French at first like the policies of John Law - before the roof caved in. (w/ thanks to Hugh Hendry, see tomorrow's News & Views). Most politicians have never seen an inflation they don't like, particularly one that lands right around election time.

Japan needs a gold policy hence the hulabaloo chronicled here last week before someone pulled the rug on the gold market - I say 'someone' because this last drop was one of the most suspicious witnessed in my many years monitoring gold market activity. It was almost as if someone wanted to deliver the message that gold isn't the answer for Japan, but unfortunately for the gold restrictors, it is. If you have a hard time understanding why, I would suggest a quick read of Professor Robert Mundell's work.

Here are some possible scenarios that might evolve from the unprecedented, rapid escalation in Japan's dollar reserves:

1. They let it go and simply keep adding to their reserves in what is beginning to look like exponential fashion.

2. They could push the United States into selling some of its gold reserve direct to Japan. Though some might think that such an action would drive down the dollar price, it could have the diameterically opposite effect driving private investors to the gold market to protect themselves in a like manner, and pushing the price through the roof, as was the case in the 1970s when the price rose in the face of both U.S. Treasury and IMF sales. AND. . . the United States might decide it likes a higher price.

3. The United States could acquiesce on the price - letting it rise to at least give the Japanese some gain in reserve value AS A PERCENTAGE of their TOTAL RESERVES. A tripling of the price, for example if done today, would give the Japanese a more respectable reserve level at 4.5%. This would buy time for the international financial system all around. Such a rise would also encourage mine production on a long term basis and provide more gold for reserve requirements not just with Japan, but globally.

4. A combination of two and three - though the amount that would come on market in such a scenario would be restricted by the Washington Agreement to such a miniscule level that the acquisition route would end-up obliterated by the size of the dollar problem. If Ernst Welteke wants to sell gold, all he need do is get on the phone to Japan and China. They would buy the entire German reserve if given the opportunity. Something that the ECB and Bundesbank should consider when evaluating Mr. Welteke's obsession with gold sales.

Given what we've seen from the world's finance ministers and central bankers in recent months - with all the confusion, posturing and lack of direction - the likelihood is that we are going to get more of the same (Scenario #1) which translate to global dollar inflation accelerating to exponential proportions. This upcoming G-7 meeting will be critical, but, in my opinion, what we are going to see instead of the beginnings of a policy, will be the beginnings of a total breakdown in the system.

We are about to have John Law on an international basis (once again in my opinion) and, despite the rhetoric and rationalizations of the politicians near and far, there is little that can be done to stop it.The best and perhaps defense will be personal gold ownership.

We are about to enter a big week for the financial markets. All eyes will be on Florida, but I doubt we'll hear much. I can't remember a time when the international financial system has been in more dissarray and disagreeable to the participants. Those who think about these things - in the various governments, in the central banks and in the investment markets - see the same things many of us do, but don't be surprised if we see more of the same and nothing new from the Florida meeting. The die has already been cast. And the results will not show in the markets this week, but months from now when the realization hits that we are back to the future - the 1970s.

mikal"A bird in hand is worth two in the bush"#12344108/03/04; 23:01:09

MK and Black Blade!- You've outdone yourselves again.
Who said summers were dull? Speaking of which, there is
a feeling... this summer is going to end sooner than normal.
@All- So much to read, so little time, which is why a great forum can make short work of it all. Thanks.

Perhaps the best part of an ATM machine, is that panicked
flocks can nibble them clean, but no one can blame base or precious metals.

The Invisible HandHouston, can you hear me? The solution is oil for euro!#12344208/04/04; 03:53:12

Aug. 4, 2004, 12:45AM

Oil prices inching up; few solutions in sight
Market-moving forces founded in global risks
Copyright 2004 Houston Chronicle

The dollar is the currency of oil, and a recent report by Cambridge Energy Research Associates points out many oil-producing countries in the Middle East import significant goods and services from the European Union, where the euro rules. High dollar-denominated oil prices have helped offset the dollar's fall against the euro.

Topazalt Currency Gold.#1234438/4/04; 05:17:36

Far from being what you'd call a stellar move, PoG is steadily grinding away at the alt Currencies and a contrary-directional move here wouldn't surprise.
The Dollar needs all the help it can get (to drop) as witnessing both this mornings and lasts DX action will attest.

misetichUS Treasury formally seeks hike in US debt ceiling#1234448/4/04; 06:47:23


US Treasury Secretary John Snow has urged Congress to raise the government's debt ceiling, or face a cash crunch in the autumn.
He warned that Washington was on track to breach the current limit of $7.4 trillion in late September.
US government expenditure, swollen by the war in Iraq, exceeded revenues by a record $375bn in 2003, and the gap is forecast to rise again to $445bn this year.

The US national debt - the sum of previous annual budget deficits - currently stands at nearly $7.3 trillion (£3.9 trillion).

According to US Treasury figures, the government will have to borrow about $89 billion in the three months to September, and a further $122 billion in the final quarter of 2004.

Debt To The Penny:

08/2/2004 $7,303,319,122,668.55
12/31/2003 $7,001,312,247,818.28
09/30/2002 $6,228,235,965,597.16

Budget deficit for 2005 is initially set at close to $400 billion excluding IRAQ costs which could be anywhere between $25-75 billion since appropriations are being delayed

As IR are slated to go higher (so they say) the deficit will increase further

Job creation and tax inflows have not materialized and the US economy is slowing again.

In the weeks to come Wall Street pundits will be pumping up "positive news" emerging, yet NOONE of the numbers published to date, from retail sales, auto sales, purchasing manager indexes are BETTER than experienced in the beginning of the 2nd Qtr

....and The 2004 Oil Shock And Awe got underway in earnest in the 2nd Qtr

Within the next 12 months Debt to the penny might exceed $8 Trillions

All Aboard The Gold Bull Express - Part ll

misetichUnited States: Have the Twin Deficits Lost Their Bite? David Greenlaw (New York)#1234458/4/04; 07:23:11


The US current account deficit is likely to exceed 5% of GDP this year. Meanwhile, the federal budget deficit in the current fiscal year should come in close to 4% of GDP. In the past, twin deficits of this magnitude have tended to be associated with abnormally high real interest rates. For example, in the mid-1980's, when the combined twin deficit was near its current level, real rates on 10-year Treasuries averaged around 5%
The Treasury's so-called TICS data reveals that there have been massive foreign flows into the coupon sector of the US Treasury market over the course of the past year. In fact, private foreign investors and foreign central banks combined purchased a net $400 billion of Treasury coupons in the 12 months ended in May. In March alone, the buying amounted to more than $60 billion. While there is no way to isolate the maturity breakdown of the foreign purchases, the data--together with anecdotal reports--would certainly seem to refute Fed Chairman Greenspan's claim that outright selling of US securities by Asian central banks would not have a material impact on interest rates because the share of foreign central banks’ holdings of all US debt is relatively small and is concentrated in short maturities. While such a view may have had validity at some point in the past, it now appears to represent quite a stretch. Foreign central banks hold more than 25% of all Treasury securities outstanding. Moreover, they have shown increased relative demand for coupons as opposed to bills. Clearly, it would be very hard to find a Treasury trader who would buy into Greenspan's notion that heavy foreign central bank selling would not have a material impact on yields. In fact, while outright selling is unlikely, the extent of the market's exposure to foreign investors suggests that there could be problems if there is merely a slowdown in the pace of buying.
The cumulative budget deficit since the start of FY 2002 has amounted to $860 billion. Interestingly, just three investor groups--the Fed, private foreign investors, and central banks--have purchased a total of $875 billion over that same period. Specifically, the Fed has bought $150 billion, foreign central banks $325 billion, and private foreign investors $400 billion.
First, the Treasury has made a conscious decision to reduce the average maturity of the debt outstanding. This has been accomplished largely by issuing massive amounts of bills and 2-year notes. Second, the debt managers have recently implemented a significant expansion of TIPS issuance. Assuming the segmented markets theory of term structure determination has at least some validity, the relative lack of Treasury supply in excess of 5-year maturities might help explain why real rates at the long end of the curve are so low.

The troika of budget deficit, trade deficit, and current account keeps on growing to unsustainable levels

The US $ is overvalued...

Its a matter of WHEN and not IF

All Aboard The Gold Bull Express - Part ll

Cometosecanadian dollar activity#1234468/4/04; 08:45:36

in light of today's stronger dollar indicates that
something is rotten in rotterdam ( at CONTROL PPT)
and that the dike is having fissures where large amount of flows are escaping .......

Something has got to give and it is.......

This looks like an indicator screaming ....out loud
that this tussle is getting ready to be over....

In my view ,,this is well overdue......

Perhaps the Canadian Dollar is now going to be the proxy spokeseman for the metals until the metals speak up for themselves.........

misetichRising rates may bring some nasty surprises (MSNBC)#1234478/4/04; 09:12:09


Americans could be more vulnerable to rising interest rates than policymakers believe, some analysts argue, raising questions about consumer spending heading into next year.
A survey of investors released this week by UBS and Gallup found many borrowers could be in for a nasty surprise as they wrongly believe interest payments on their loans are fixed.

More than half of respondents with credit cards or home equity loans thought they had borrowed at fixed rates, meaning many are especially vulnerable to the higher rates in store.
Total U.S. household borrowing stands at a record: almost $10 trillion, up from $5.1 trillion in 1997.
Chicago-based UBS economist Susan Hering noted 72 percent of people surveyed thought their rates were fixed. Credit card issuers already charge interest well above the U.S. central bank's benchmark fed funds rate, some as high as 20 percent.

´The findings in our survey suggest some borrower confusion and surprise as short rates keep heading higher,´ she said
Around $740 billion of U.S. household debt outstanding is owed on credit cards -- more than the gross domestic product of Ireland, Sweden and Norway combined -- out of $2 trillion in credit card, tuition and auto loans.

´It's all right to have a nation full of people who never save anything for a rainy day, just as long as it never rains. Unfortunately, America is about to be hit by a tsunami,´ warned Peter Schiff, president of investment firm Euro Pacific Capital in Newport Beach, California.
The bulk of the $10 trillion owed by households is in home loans, most of which is at fixed rates.

But about 20 percent of outstanding mortgages are variable, and figures from the Mortgage Bankers Association show about 30 percent of new applications are for adjustable rate mortgages.

´Since some 75 percent of all household debt is mortgages, then at most 35 percent of household debt is at all variable,´ Ezrati estimates. Still, that would amount to over $3 trillion that could be subject to higher rates.

The effects of higher IR's and higher Real Price Inflation (running at double digits) is being underestimated

Consumer spending has been resilient in the past decade, buoyed by an equity bull market and unemployment rate of 4% -rising capital gains, and wages

Later on consumers used capital appreciation in housing (borrowing) to offset declining stock market valuation, reduced investment income due to emergency IR

The RISKS are rising and the fear is Asset Deflation

All Aboard The Gold Bull Express - Part ll

Gandalf the WhiteYES !, Sir Topaz --- The US$ is headed DOWN !!! <;-)#12344808/04/04; 10:50:58

I like these "WATERFALLS" charts !
(Look at the chart at the above LINK.)
You have not seen ANYTHING yet ----
Just wait until after this "Election Season" !!!
In which do you wish to hold your WEALTH, the US$ or PHYSICAL GOLD ?
Think about it !

USAGOLD Daily Market ReportPage Update!#12344908/04/04; 12:54:36">
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.

--- US closing market excerpts -----

Gold futures ease, hold atop $390

Gold futures fell Wednesday, closing lower for the first time in four sessions, with upbeat U.S. economic data boosting the dollar, which in turn served to dull investment demand for the yellow metal.

Gold for December delivery closed at $394.70 an ounce, down $1.80 on the New York Mercantile Exchange. The contract gained almost $7 in the past three sessions.

Gold-supportive market nervousness at the start of the week about a possible al Qaeda plan to attack New York before the U.S. elections receded into the background. Likewise, buying of gold as an inflation hedge abated, even as oil prices reached new highs above $44 a barrel on Wednesday.

"We had stops in the currencies today and the euro came off. Thats why we came in so much lower," a floor brokersaid. "There wasnt much of a range overnight."...

Data from the Institute for Supply Management Wednesday showed better-than-anticipated growth in the U.S. services sector for July. Factory orders for June also came in higher than expected. The data, as well as a decline in Japanese shares overnight, helped drive the dollar higher against the yen. Strength in the dollar often lures investors away from gold, which is used as a hedge against financial losses....

"with the dollar still firmly in control of gold's direction, the market is really waiting for Friday's payroll data for a clear direction," James Moore, analyst at TheBullionDesk....

"This dollar remains in its slight upward trend, which obviously is going keep a bit of pressure on the gold market. However, speaking with multiple dealers out there, they feel this $390 level is relatively sturdy," said Dave Meger, an analyst at Alaron Trading.....

---(see url for access to full news, 24-hr global economic newswire)----

USAGOLD / Centennial Precious Metals, Inc.Get started on the right foot with a risk-free request...#12345008/04/04; 13:13:50">Get a head start on the gold market!
misetichInterview: Pierre Lassonde, President, Newmont#12345108/04/04; 13:49:20


LASSONDE: The US dollar is in a secular bear market much like the 1970's when it fell for eight years from 1970 to 1978, while gold went up for nine years. It will have to fall more against the Euro, Yen and, most importantly, the Renminbi before the US sees a reduction in its huge trade and current account deficits. At almost $50 billion a month, or approximately 5% of domestic GDP, the US is consuming nearly two-thirds of the world's savings to live in the style to which it has become accustomed. As Herb Stein so correctly observed, "If something cannot go on forever, it will stop." Last year I predicted a trading range for 2004 of between $380 and $450 an ounce and I am still comfortable with that range. Longer-term, gold is going higher, but if history is anything to go by, it won't be in a straight line and we don't know how high is high
LASSONDE: This secular bull market is most directly comparable to the 1929-1934 and 1967-1980 bull markets in hard assets, including gold. The average of these two bull markets was nine years, so at three years I believe we are probably closer to one-third of the way along. Remember, the fundamental driver of this gold bull market is the very significant structural imbalances facing the US dollar. Three-years into this bull market those imbalances have worsened. You just have to look at the trade and current account deficits to see what I am talking about.
LASSONDE: I believe that the ongoing privatization of gold reserves held by the world's Central Banks, combined with the declining ability of governments to maintain the value of their Fiat currencies in the wake of massive increases in liquidity, will lead at some point to gold returning as an alternative currency. How and when this will happen, I don't know.

All Aboard The Gold Bull Express - Part ll

mikalCrude oil futures#12345208/04/04; 14:00:46

Not surprising to hear Snow speak today on
negatives of higher crude oil and the Saudi's announce an early "production boost". No market goes up in a straight line.
And TPTB want a higher long-term price:
1) To justify inflation caused by other things
2) To maintain tension in the middle east
3) To permit higher tax revenues
4) To slow the descent of US dollar
5) To allow oil conglomerates to increase revenues
6) To instill the illusion that only exorbitant oil and natural gas prices
will permit investment in fuel cells, solar, conservation, etc.

mikalMore oil news#12345308/04/04; 14:30:27

Oil Falls as Yukos Given Access to Funds, Gasoline Supply Rises
August 4, 2004

MKOld and in the Way. . . .Posts I never made. . . . #2#12345408/04/04; 19:02:31

This was originally addressed to someone at the forum, can't remember whom. MK


I'll address this to you in that you seem to have an interest in the link I posted.

When I first started in the gold business -- all the way back in the early 1970s -- people who thought about the economy the way I thought about the economy were few and far between. Harry Browne was the chief spokesman for gold advocacy back then. Howard Ruff was just starting out, and one of the better newsletters published then was put out by the old Deak-Perrera company -- Nicholas Deak, chairman. Howard Segermark, if I recall correctly, was the editor of that newsletter. Somehow, I got to know Howard -- I can't really remember how we connected. Howard had been legislative counsel for Jesse Helms, the conservative Senator from Georgia, for a lot of years and in the process made many contacts in the gold world. Later, he and a few others would go on to found the Industry Council for Tangible Assets -- the organization that still handles our legislative problems in Washington.

I can remember talking to Howard one day and he was all excited about the publishing of the text of a roundtable that had occurred among some heavyweight economists and industry luminaries on the subject of the gold standard. I too was anxious to see what had Howard so excited since I greatly respected his judgement on such things. It took about a week to get the roundtable in those days before Fed Ex, the fax machine and instant information access on the internet. When I got it, I ripped open the envelope and sat down to read the discussion immediately. These were ideas I had not seen treated by anyone outside of Harry Browne and maybe Jerome Smith.

The comments I remembered most were those delivered not by the economists, but those of the old gold dealer, Mr. Nicholas Deak. And these are also the ideas I never forget. Round and round these people went about the nature of the gold standard, how it would be structured and how gold would be priced, etc. As I recall, Deak did not comment except to say one thing that stuck: You don't really need a gold standard as long as gold was available to the public. If the government moved to debase the currency, the government and Federal Reserve would know about it soon enough because people would begin to buy gold, he said. That would be the release valve. I often wondered if Alan Greenspan had the same thoughts since he has said so many times that he watches gold as a bellweather -- a proxy on the policies of the Fed and how effective they are in stemming inflation. Over the last few days, we have had a similar comment put on the public record by McTeers at the Dallas Fed, but he's got it wrong. He says if gold goes to $400 then the Fed knows that something must be done to stem the inflationary tide. That's wrong. Why? Because in a back-handed way what he's trying to tell us is that if the price is below $400 everything is just fine. That's preposterous. What he really means to say is that as long as the people aren't stampeding for gold, everything is fine with Fed policy, or at least if they are stampeding and the stampede can somehow be obscured everything is just hunky-dorey. But again this is all wrong.

Demand is the key, not the price, and by demand, I mean, demand for the physical metal, and now demand for the metal worldwide. A $400 price is illusory of Federal Reserve intent. We've come to know unequivocably that paper traders can move the price at pennies on the dollar. In other words, the ounce that you or I buy with payment in full can be sold against that owner at less than a dollar in the options market and less than $20 in the futures' market. Control the price and you control the indicator. Control the indicator and you can continue policies ad infinitum if you constantly tell Wall Street and speculators that this same indicator is the thing that needs to be watched. (When I say ad infinitum, I mean until the collapse, because that's the only outcome when there is no real regulator to inflationary policies except a group of politically motivated men and women sitting around a table at the Fed once a month.) All the while the perpetrator points to the indicator and says "See, it's telling us that all's fine.

At the time Nicholas Deak participated in that round table, no one dreamed that anyone would manage the price of gold. After all, hadn't it just been freed by the Nixon administration slamming the gold window and releasing currencies to float against each other and gold??

More some other time.

CometoseThe Canadian Dollar ; a little light perhaps#12345508/04/04; 20:02:16

There's a great article on recent happenings to the north and commentary from Canada's new Natural Resource Minister(????)...

about trade linkages........

Perhaps this has something to do with Why the Canadian Dollar is acting so of late ...

Link below to the article..

HeathenGold goes to my head.#12345608/04/04; 20:33:02

MK (08/04/04; 19:02:31MT - msg#: 123454)
Old and in the Way. . . .Posts I never made. . . . #2

". . . As I recall, Deak did not comment except to say one thing that stuck: You don't really need a gold standard as long as gold was available to the public . . ."

Goldless Heathen (7/3/04; 00:52:17MT - msg#: 122728)
Independent Gold?

". . . By nature or default or Providence will gold only be independent when it is distributed more widely and
proportionately . . ."

Authentically Independent Gold (Free Gold serving as a place of rest for your work and as bellweather of our collective works) is a direct function of the number of individuals that hold Physical Gold.
By extension and neccesity, and since Physical is finite, as Gold becomes more free and independent it will be distributed more widely and proportionately.

On a related note concerning availability and public access and appreciation of Physical Gold, but the long way to it, I recently brought a one tenth PAMP bar to a jeweler to be made into a pin for my fancy, new beaver felt Cowboy Hat-lol-the nearest I've been to saddle I've always had boots on and a shovel in hand. The jeweler did a poor job and got the PAMP too hot which rippled the relief of Fortuna so I yanked off the post (which was so long it pierced my scalp) and took out a hammer and pounded the gold into a thin ribbon which wrapped nicely around the hatband with a manly, do-it- yur-way appearance Jack Palance would be proud of.
Hammering, bending, re-bending, re-hammering, twisting and the Gold just held up-no splits or cracks or rips. I've done all sorts of jobs and worked with many materials but, I think the word is ductile, Gold's properties are really profound and 40 bucks of PAMP is worth the tactile appreciation one acquires from Physical contact with Gold.

Further Upward on my rugged independence jag I decided to look around and see if any Physical Gold could be found laying around the county I live in. Mum on that but I did discover, nearly to a one, websites and forums discussing small scale mining and prospecting were also discussing the growing Federal encroachment and restriction of public right of access to the Physical Gold that's still in the ground! This is likely not news to many of you but was to me and seems to be one more move in the paper controls metal game as it spirals downward into violence;

Scissors, Paper . . . Rock?

GoldendomeGerman--Weimer Hyperinflation#12345708/05/04; 00:18:22

The following is a quote that has been featured on the Financial Sense Newshour radio program, as read by James Puplava. The quote is from a 1974 book, "Dying of Money" by Jens O'parsons; that describes the great inflation of the German Weimer Republic in the 1920's. Keep in mind now, that this book was written thirty years ago; before we (the United States) had begun on our present course. See if this all sounds too familiar. ....Jim begins with a statement that in his opinion we are headed for hyperinflation; then follows with these quotes from the book...

"Everyone loves an early inflation, the effects at the beginning of an inflation are all good. There is steepened money expansion--rising government spending--increased government budget deficits--booming stock markets--and, spectacular general prosperity; all in the midst of temporarily stable prices. Everyone benefits and no one pays. That is the early part of the cycle.

In the latter inflation, on the other hand--the effects are all bad. The government may steadily increase the money inflation in order to stave off the latter effects, but the latter effects patiently wait. In the terminal inflation there is a faltering prosperity, tightness of money, falling stock markets, rising taxes, still larger government deficits, and still soaring money expansion--now accompanied by soaring prices; and the ineffectiveness of all traditional remedies. Everyone pays and no one benefits; and that is the full cycle of inflation."

.... And where does it lead us...and now speaking about how Germany financed it's participation in World War I--with debt when it went to war [sound familiar?]
The Reichmark began to depreciate and as it depreciated there was a temporary boom after the war, before things really began to fall apart....

"As for the speculators, the most extraordinary feature of the Reichmark's joy ride, (the boom of 1921) was not any attack against the Reichmark, but quite the opposite: an incredible, some say, a pathological willingness on the part of investors at home and abroad to take and hold the torrents of marks and give real value for them. Until 1922 and the vary brink of collapse, Gemans and especially foreign investors were absorbing marks in huge quantities. Only the international reputation of the Reichmark--the faith that an economic giant like Germany could not fail made this possible. The storage factor caused by investor willingness to save marks kept the marks from being dumped immediately into the markets and thereby for a long while held prices in check. The precise moment when the inflation turned sharply upward towards it's vertical climb was undoubtedly timed by no special event, but by the dawning psychological awareness of the German people and foreign investors, that Germany was not going to back it's money. With that, the rush to get out of the mark was a dam bursting. The seas of marks flooded into the markets and drove prices beyond all bounds. The German Government strove mightily to out-flood the sea of marks which had been stored up by Germans and especially by trusting foreigners. They flooded forth and fought to buy into any investment: foreign currencies, tangible goods, almost anything but Reichmarks."

Is this where we are heading?

The CoinGuyIs this where we are heading?#12345808/05/04; 00:50:07

Yes Period. I happened upon this forum when it was less than 100 posts old. My opinion has never changed or wavered. Hyperinflation is the only way out, and this is the best case scenario.

The Coinguy

AristotleHeathen-man#12345908/05/04; 01:03:38

"Independent Gold / Free Gold serving as a place of rest for your work and as bellweather of our collective works is a direct function of the number of individuals that **HOLD** Physical Gold."

Amen. But wouldn't it be more appropriate to say it's a function of the number of individuals (weighted by their individual buying power) who **WANT** physical Gold?

I'm not going to bully for a side, I'm just testing the waters and would like to see some thoughts at a time when Belgian is on holidays, Miner is long MIA, and TC is understandably too PC to give us the "what fors" in public. Therefore, you're the man of the hour... unless Mr. Gresham wants to weigh in at a time when he's dearly missed.

BTW,,, I liked the story of your hammerin', hands-on ordeal. I wish we'd get more of that sorta thing to sweeten the bitter economics that I often litter this place with.

Wanna know what little event was pivotal in turning my own thoughts around toward seeing Gold in a new light? Way back when, once upon a time, I was walking along a busy street on a sunny blustery day of winter when I spoted a yellow lump near the edge of the sidewalk. On closer inspection it turned out to be the remnants of a gold pendant that had been abused beyond all decorative usage after long trials between the speeding tires and the road, and finally cast aside most probably by the blades of a snowplough.

I'd found lost cash before, sure, coins and bills, but none of that had registered as distinctly as that small lump that had lost all kinship with jewelry as its paramount in function.

An epiphany... for the first time I saw Gold, up close and personal, as WEALTH/PROPERTY, and all other long-suffering concepts of it took second place. To be sure, finding a Nugget in a stream would have surely had the same effect. Not money. Not adornment. Pure wealth.

Gold. Get you some. --- Aristotle

The CoinGuyBah...Aristotle#12346008/05/04; 01:26:51

"An epiphany... for the first time I saw Gold, up close and personal, as WEALTH/PROPERTY, and all other long-suffering concepts of it took second place. To be sure, finding a Nugget in a stream would have surely had the same effect. Not money. Not adornment. Pure wealth".

At first, I thought I was part of a religious movement, then I found out I was fighting one. Fiat paper.


The CoinGuy

HeathenWanting vs. Holding#12346108/05/04; 04:05:52

Aristotle; thanks for the Amen. But I must admit I was essentially restating, without attribution, cough, your previously posted 'conclusion of wealth' turn of phrase.

Regarding HOLDING versus WANTING; given what I have learned from your posts I'd be inclined to defer to your subtlety that WANT is the operative force and this well illuminates the market dynamic facet. But just one tug doesn't always get the whole carrot from the dirt. So the newfound, goldbearing, PAMP hammering, beaver hat wearing, heathen cowboy in me might be more direct and spit out somin' like;

People in Hell WANT icewater . . . but those who HOLD it are saved.

My experience of the tactile properties of Physical Gold were far more persuasive than my understandings of what a lemon Fiat is. Kinda like the Bishop's wastebasket. I might go so far as to say Gold has mystical properties but that would agree with virtually all of recorded History from my Heathen Ancestors through to today's modern day "al Chemists" who turn unleaded into Gold while that sucking sound of depletion echos everywhere. A simple Gold standard is a tough sell; I won't even attempt a Gold diety. Independent free gold is a direct function of the number of individuals that HOLD physical gold. So as Mother is a neccesary invention Wanting may be the child of Holding.

Whereas FINDING is parthenogenic- Wanting and Holding at once! And herein lies the message of HOLDING Physical Gold that goes beyond that reflected in the market; Physical Gold is the resting place for the fruits of your labors yet when you find a chunk of gold whose labor's rest there? You did not pay for it, at least not with Fiat, maybe with elbow grease, but say a strictly lucky find of a nugget; you have stumbled across Wealth, perhaps incarnate. Unbelievable? No more so than an invisible hand! Is it solely the wealth bestowed by the collective WANT of the market were you to sell the find? Or are you suddenly HOLDING ice water in a, heretofore, unfelt Hell, the infernos of which you will never again be ignorant of nor wish to return to? Your consciousness changes when your animal self apprehends the properties of Physical Gold, an aside- I just learned that there are microbes that absorb gold and are responsible for moving it around and REDISTRIBUTE it-bet they don't use paper. So if Holding Gold changes microbes and minds, the Fiat Farce feeding myths like 'pulled his'self up by his own bootstraps' and limitless growth will no longer have their insidious, shaming siren song and man can redirect his collective life to a newfound understanding of the 'freeness' of wealth, not an ethics that enslaves those born without market position. This socialist mumble jumble of mine is what leads me, along with a concern that avarice is a function of surplus, to conclude that when more people HOLD Physical Gold, which by neccesity will mean some will HAVE TO HOLD LESS than they do now, the more the Magic of Gold will work. Though I won't go as far as my wife's unsubmitted Peak Oil essay where she posits that without Cheap Oil, God or Aliens then Mankind is screwed. She goes with the Alien option and explains that they will come teach us that GOLD is a repository of the wealth of the seven previous intelligent species to inhabit the earth before Homo Sapiens emerged AND the little green men then explain to us how to extract unlimited energy from Physical Gold and it's off to the races again! ( I told her she would have won, but perhaps that is a prejudice born of Hold and Want issues! )

To summarize, and exit before someone stuffs a wet beaver felt hat in my mouth, Independent Gold's Gifts are a direct function of the number of individuals that Hold Physical Gold and are an indirect function of the number of individuals that Hold large amounts of Physical Gold. Germs, Invisible Hands and little green men all agree.

TopazOil Futures.#12346208/05/04; 04:49:22

The Aura and attraction of Physical Gold in Possession is a subject dear to my heart, many tales of Dredging, Panning and Detecting spring to mind as a much younger and fitter Topaz went about acquisition and the "pleasure of the quest" more often than not, was inversely proportional to the amount of Gold obtained.
The "effort" required in all such persuits certainly puts into perspective the "value" of Gold... and the ABSOLUTE easiest way to obtain Gold nowadays is simply to BUY IT!

...meanwhile, in the land of the undead, I thought it might be interesting for some to watch Oil futures as the continuing arm-wrestle between Oil and Bonds really heats up. At 1000bbl/contract that makes a lot of PaperOil!

Clink!@ Sir Heathen#1234638/5/04; 06:25:43

Nice to see that you have updated your handle ! While reading the story of your handiwork, a new catchphrase sprang to mind :-
Gold, wear you some ! (Ahem, sorry, Ari ....)

misetichOil surge heightens worry for corporate earnings#1234648/5/04; 06:30:47


Companies worldwide became increasingly worried on Wednesday about the effect of high oil prices on profits and the economy.

While record prices are a pressing concern for most business sectors, the airline, chemicals and transport industries face the greatest challenge.
The International Air Transport Association warned that the current price would increase costs to the industry by $15bn over the next 12 months.
Commodity chemicals companies, which buy raw materials directly from oil companies, are not yet suffering from higher prices because they can more easily pass costs on, as demonstrated by strong figures on Wednesday from Germany's BASF.

But Campbell Gillies, an analyst at Deutsche Bank, said companies turning commodity chemicals into other speciality chemicals were struggling to pass costs on to customers in markets such as automotive, construction, consumer goods and fibres. "Customers are extremely reluctant to accept price increases in a low inflation environment," he said.

Chip Dickson, US strategist at Lehman Brothers, said the soaring oil price was a "big additional input cost" for dependent industries such as aviation but it was an "extra tax" on the wider economy. "It is a part of what people need to keep going every day. If your heating and travel costs go up, your capacity for discretionary spending goes down. This is clearly a concern for company earnings," he said.

The 2004 Oil Shock And Awe has barely started - it will prove out to be more than "transitory" and the "soft-patch" will be diagnosed as "quicksand"

Daily waves upon waves of Real Price Inflation is overwhelming, consumers and corporations, as the oily stuff once ignited is unstoppable

The egomaniacs have pushed along until they found their Waterloo -

All Aboard The Gold Bull Express - Part ll

misetichFed Is Expected to Raise a Rate on Tuesday#1234658/5/04; 06:53:41


WASHINGTON, Aug. 4 - Despite a lull in economic growth and anxiety about the effect of high oil prices on spending, the Federal Reserve is expected to continue its strategy of gradually raising interest rates when policy makers meet next Tuesday.

A raft of indicators suggest that economic growth slowed sharply last quarter, particularly in June, and may continue to be sluggish for a few more months. But Fed officials and many outside economists predict that the lull will be temporary and that activity will pick up again by the fall.
"When you add it all up, the trajectory of the economy is healthy and I'm looking at an annualized growth rate of 3.5 percent for the second half of the year,'' said Mickey D. Levy, chief economist at Bank of America.

The solution to the "soft-patch" is raising IR's thus increasing costs to consumers and corporations

The damage is not the paltry costs increase but the psychological impact on the markets and increased fear

UK has increased its IR again this week attempting to slow down the hot housing market -

Is the US Fed doing the same?

The residential construction industry has carried the US economy literally on its back in recent years and its slowdown will not be growth friendly

All Aboard The Gold Bull Express - Part ll

SmeagolComing Soon to a Great Oaken Table Near You#1234668/5/04; 07:52:25

>{ A recital by Smeagol, in the Common Tongue, of his "The Rhyme of the Ancient Gold-Mariner", begins tomorrow morning. Fruit or fish (fresh or not, as deemed appropriate) will be available to be thrown as deserved. }<
CometoseJim Sinclair Request#1234678/5/04; 09:35:57

This is a snippit and request about Inflation Indexes

Thursday, August 05, 2004, 2:24:00 AM EST

A Special Community Request

Author: Jim Sinclair

Do prices you pay seem to be going up all around you? According to federal statistics, recent price increases for consumer goods have only been modest. This may be because of fiddling with the methodology of calculating inflation as anything that seems to rise in price (e.g. oil) gets stripped out from the "core" figure.

What if we could compile an alternate measure of the Consumer Price Index for today using the methodology from 1970? I'd venture to bet that the impact of the price increases we are seeing today would be a lot sharper.

Unfortunately, wandering into the field of federal economic statistics is a quite a thicket. I encourage you to send me any leads you might have. Do you agree with my take on this? Do you have access to the methodology used then or today for that matter or even the raw data?

Let's put our heads together and see if it is possible to compile such an index. Here are some preliminary links to get the ball rolling. But I really look forward to hearing from all the number crunchers out there on this one.

The home page of the Bureau of Labor Statistics for CPI:

Historical CPI figures and % changes:

Some data:

Please post this all over the gold net. If we are able to develop this index it will not be the Sinclair Index but we will issue it monthly as the "Gold Community Core CPI" with its formula. Help me build this and it is yours.

Gandalf the WhiteWOWSERS !! -- I love this place. <;-)#1234688/5/04; 09:36:33

SOOOOOOO many truthful heartfelt posts today --- AND then the announcement that Sir Smeagol is going to perform a recital, in the Common Tongue.
Tomorrow, instead of getting ready to toss either overripened fruit or fresh fish -- I shall be prepared to toss a small amount of PRECIOUS, (if Sir Smeagol's act is as GREAT as I envision !)
GOLD -- the ULTIMATE REWARD and Insurance !!

makcumkaHome Sales#1234698/5/04; 09:40:14

Here is a recent article that outlines a looming problem in the housing market


"I haven't seen this sort of market in a few years," Ballantyne says. "There still is enough inventory to give buyers good choices--panic hasn't set in yet--but if the rate of absorption continues, this summer there could be plenty of buyers, and we may not have a lot of properties to show them."


In other words, before you will be faced with a dreadful situation of having all that money and not being able to buy a house, any house, because we are all out of houses, run out and buy whatever you can right now!

Or, better yet, buy some gold, and trade a small portion of it for a house, any house you want, in a very near future.

P.S. - Jon Stewart (COmedy Central) made a good point last night on his show (not an exact quote): "Oil, a finite resource, that we use daily, is rising in price, and that is news to the financial analysists?"

KnallgoldNo real news from FreddieMacKrüger#1234708/5/04; 10:00:31

Interesting part here:

".. The company has said it misapplied accounting rules so that it could smooth earnings to conform more closely to earnings expectations on Wall Street..."

Gandalf the WhiteI ALSO love these TRUE stories ! <;-)#1234718/5/04; 10:06:39

Thanks, Sir MK for starting us out yesterday, with that one from the early days of the beginings of USAGOLD !
AND THANKS ALSO, to Sir Ari, for the story of "mining" PRECIOUS from the STREETS of the big cities.

AND THANKS ALSO, to the "new" Heathen
(08/04/04; 20:33:02MT - msg#: 123456)
with the personal story "Gold goes to my head."

(08/05/04; 04:49:22MT - msg#: 123462)
when he says
"The Aura and attraction of Physical Gold in Possession is a subject dear to my heart, many tales of Dredging, Panning and Detecting spring to mind as a much younger and fitter Topaz went about acquisition and the "pleasure of the quest" more often than not, was inversely proportional to the amount of Gold obtained.
The "effort" required in all such persuits certainly puts into perspective the "value" of Gold... and the ABSOLUTE easiest way to obtain Gold nowadays is simply to BUY IT!

I also have tested the "look, find and recover" methods of obtaining the YELLOW, and while having some success -- ( I still wear a twenty-three pennyweight nugget about my neck), --- BUT, I FULLY agree with Sir Topaz, that the BEST way to get Gold is to BUT IT !!

Just thinking about the cost of converting the raw gold to 0.9999 PURITY is also mindboggling !

AristotleHi Heathen, a clarification for you on my "want vs hold"#1234728/5/04; 10:19:33

You've made a great support of your viewpoint with this phrase,
"People in Hell WANT icewater . . . but those who HOLD it are saved." It's hard to argue with that. However....

Regarding the "want" issue, you hit the nail right on the head with your phrase, "I'd be inclined to defer to your subtlety that WANT is the operative force."

That's exactly how I saw it, and that's why I gave the "wanters" the higher importance -- because the "havers" are merely a subset of "wanters."

Sure, I *have* Gold, but I still count myself among the larger ranks of all those who still *want* for Gold. And as you know, it's from this group of wanters that the buy side of the market dynamic is populated.

But now I'm thinking I may have simply missed your original angle... you probably weren't talking about the value of FreeGold, but rather about the conditions that would support the Free status of Gold. If that's your point, then I'd say you're onto something. But in this case, more important than the *number* of holders would be the *nature* of those holders -- are any of them big enough and organized enough to perpetrate the same schemes of paperization that we're currently up against? And indeed, you later say just that:

"when more people HOLD Physical Gold, ... by neccesity will mean some will HAVE TO HOLD LESS than they do now. -------- ... an indirect function of the number of individuals that Hold large amounts of Physical Gold."

Thanks for speaking out. Thanks to you, too, CoinGuy. The "religious movement" I'm fighting is the cult of paper Gold.

Gold. Get you some. --- Ari

Gandalf the WhiteOOPS !! <;-)#1234738/5/04; 10:23:50

"BUT, I FULLY agree with Sir Topaz, that the BEST way to get Gold is to BUT IT !!"
THAT should of course be: "BUY IT !"
Oh, If I could type what I am thinking and PROOFREAD too.

misetichClashes Threaten to Reignite Shi'ite Rising in Iraq#1234748/5/04; 11:56:46;jsessionid=LHGYWL3QNZIG2CRBAELCFFA?type=topNews&storyID=5886418


NAJAF, Iraq (Reuters) - Followers of rebel cleric Moqtada al-Sadr shot down a U.S. helicopter Thursday in the Iraqi city of Najaf and two were killed by British troops in Basra in clashes that threatened to reignite a Shi'ite uprising.

The fighting in Najaf was the heaviest in the city since a rebellion by Sadr's followers in April and May. The city is home to the holiest shrines in Shi'ite Islam, and most Iraqi Shi'ites react with outrage when clashes erupt near the sacred sites.
An aide to Iraq's most revered Shi'ite cleric, Ayatollah Ali al-Sistani, said Sistani was receiving treatment in Najaf for heart problems and the clashes could affect his health.

Posts of this kind typically arouse patriotic fervor - and at most times its better left alone

However the significance of Ali al-Sistani health coupled with the the uprising spreading from Falluja to now Najaf instensifies hostilities

If something were to occur to the moderate Sistani the ramifications would reach unprecented levels

The RISKS of further oil disruption in Iraq and elsewhere in the ME are RISING

All Aboard The Gold Bull Express - Part ll

geThe world gold production, 1840 - 2003#1234758/5/04; 12:00:10

Interesting. Gold production and gold price does appear to be inversely correlated. Difficult to believe!
misetichRetailers Post Muted July Sales Growth#1234768/5/04; 12:08:17;jsessionid=LHGYWL3QNZIG2CRBAELCFFA?type=businessNews&storyID=5886376


Overall, U.S. retailers rebounded from a disappointing June to show a 3.0 percent increase in July sales at stores open at least a year, according to research firm Thomson First Call.

The tally was slightly below forecasts for a 3.2 percent increase. Discount and department store chains performed better than expected but clothing stores missed their target.

In June, same-store sales rose just 2.8 percent, well short of expectations for a 4.2 percent increase

Soft-patch is deeper and larger than expected.

Consumer spending is declining and the "transitory" higher energy costs are going to extend longer and higher than expected

All Aboard The Gold Bull Express - Part ll

Clink!A new currency is born ?#1234778/5/04; 13:04:10

This post is an extension of the comment that I made in my 'End of cheap oil' essay entry, which was that changed situations cause people to adapt to their new circumstances, either by changing their expectations or changing the rules (!)
I have always been interested in renewable energy, particularly solar PV, but when I started to look at what was happening locally, I quickly found that the 'Sunshine State' doesn't do much except use the energy from the sun to attract tourists. It would be nice to have grants or subsidies (California is toying with a project to get 50% of new homes with solar power), but even being able to use the power grid as a kind of giant battery by means of net metering is not possible with my local utility. Equally, I cannot use different providers to separate the energy producer from the network access.
However, there is a way of 'doing my bit' to keep the world a little cleaner, and that is by buying green tags. Essentially, any entity that produces electrical power from what qualifies as a renewable resource, solar PV, wind, biomass, hydroelectric, etc is entitled to a 'renewable energy credit' or green tag. This is worth a certain amount of money for a certain amount of energy, generally in 1000kWh units. If you consume 1000kWh of energy at home derived from, say, oil, but you have also bought a green tag for the same amount of energy, the net result is that the energy that you consumed was from a renewable source. The money from the tag goes to a producer of renewable energy to subsidize the difference between their costs of production and the amount they get by selling their energy to an electric utility. The end customer who actually consumes that renewable energy doesn't require the burning of x barrels of oil which were used to generate my electricity.
I believe (I may easily be wrong on this, so if anyone has better information don't be shy) the original intention of the green tags was to allow operators of particularly polluting power stations to avoid having to make costly upgrades to their plants to conform with clean air regulations. To avoid a fine, they would purchase the green tags so that the net emissions of their plants and the renewable energy ones would be below certain limits. Some cynics have said that this is just a way for polluters to get away with continuing to pollute. There is some truth to this, but there are two other factors to consider:-
1/ Producers of renewable energy are being subsidized. Otherwise they could not survive on a commercial basis. With a larger installed equipment base, the mass production of these items will become cheaper (yes, yes, especially if it is made in China....)
2/ (and this is where the changing the rules bit comes in) the original tags were for 1000kWh, which is a pretty healthy amount - from memory that's about a full year for my all-electric house - and was designed for industrial size users and producers. There are now companies that are bundling much smaller generators to form a composite tag. As an indication, this would represent around $70/year for a maximum 2.5kW installation in Florida (sorry, I don't know the total annual energy which they estimate that will produce), which maybe represents a tenth of a tag. If I installed a system in my home, I could still get a credit even if I am a net consumer of electricity. Obviously, that amount of money is not going to allow me to quit my day job, but it is a/ better than nothing and b/ likely to increase as energy costs rise.

And so we have the creation of a type of currency which is based not on debt, like money, but on energy credit. A new form of wealth for the 21st century, but instead of the generation of monopolies like Standard Oil in the nineteenth, this one, almost by definition, is going to be held by individuals.


TownCrierFed pumps $17 billion fresh money into banking system#1234788/5/04; 13:21:58

With the overnight market in fed funds trading slightly tighter than the FOMC target, the NY Trading Desk complied with its directive for easy money this morning, injecting $6 billion into the reserves of the nation's banking system through overnight repos, $4 billion more through seven-day repos, and an additional $7 billion through 14-day repurchase agreements.

When money can be made that easily, it is wise to take Topaz's advice and seek out gold just as easily -- by buying it while it's available under this cheap derivative-influenced environment.

Call the friendly staff at USAGOLD~Centennial for the real deal.


TownCrierECB keeps rates steady despite oil surge#12347908/05/04; 13:36:40

FRANKFURT, Aug 5 (Reuters) - The European Central Bank left interest rates unchanged at 2.00 percent as expected on Thursday, giving the euro zone economic recovery time to build even as surging oil prices boost inflation.

Economists say the ECB is reluctant to tighten credit until it is sure that a return of domestic demand will not be tripped up by high energy prices or a slowdown in the euro zone's main trading partners.

Most analysts see the ECB keeping interest rates at current record low levels through into 2005...

Oil prices hit record highs this week due to surging worldwide demand and concerns about supply....

Energy costs are keeping upward pressure on euro zone inflation...

The world's top chemicals company by sales, Germany's BASF AG, said on Thursday it had only partially passed on higher crude costs to its customers and may have to raise the price of the biggest group of its plastic products.

...The ECB's steady stance contrasted with the Bank of England, which as expected on Thursday raised rates by a quarter percentage point to 4.75 percent, its fifth rise since November, to stem a consumer spending spree and roaring house prices.

"The rise on oil prices will act as a tax on consumers, but that is going to be offset by the phenomenal strength of world activity..."

-----(see article at url)-----

The coming phase of global inflation is the shakeout of over three decades of rampant international money creation having been long tempered by policies that are now being set aside. Choose gold during this window of opportunity before the whirlwinds of higher prices sweep through.


geGold statistics, 1900-2002#12348008/05/04; 14:00:35

USAGOLD Daily Market ReportPage Update!#12348108/05/04; 14:37:38">
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.

---Closing market excerpts----

Gold futures prices closed little changed Thursday but ended near the session's high with traders awaiting Friday's jobs report for a clue to the metal's direction....

The safe-haven metal seems entrenched in a $390 to $400 range. "It's difficult summertime trading conditions," said Andy Montano, a director at bullion dealer ScotiaMocatta in Toronto. "There's potential for real volatility because of illiquidity." He continued: "The view seems to have been of late that funds have been fairly willing sellers at a (higher) price and fairly willing buyers on the downside."...

The most-active Dec contract settled 10 cents higher at $394.80 per ounce.

"Equity, currency, financial and precious metals traders are afraid to commit and entrench themselves in any positions ahead of [Friday's] employment numbers," said Erik Gebhard, president of Altavest Worldwide Trading....

As gold prices of late have done little other than reflect the opposite of the U.S. dollar moves against the euro, any significant changes in the greenback are expected to prompt an immediate and diametrically opposed response in gold.

Market watchers are fairly evenly divided over the likely break direction, but most agree that any move Friday could prove substantial as end-of-week position squaring also enters the fray.

"There's a lot going for Friday that could mean there is a breakout.

"Firstly there's the main attraction of the employment report. But Fridays tend to be pretty active anyway so there's that too," said Andy Montano, a director at Scotia Mocatta in Toronto. "Then there's the chance of more movement in the oil price which has been supportive recently for gold."

In other news, the Bank of England lifted its benchmark lending rate to 4.75 percent from 4.5 percent, its fifth such quarter-point boost since November last year. "The rate increase in the UK does not directly affect the euro, but could suggest a strengthening there," which would be "good for gold," said John Stafford, editor of Stafford's Investment Strategy Letter...

----(see url for access to full news, 24-hr newswire)-----

misetichReality Check: US Recruiters: July Job Growth On Slow Side> Aug 4 / 9:16 EDT#12348208/05/04; 14:52:41


NEW YORK, Aug. 4 (MktNews) - U.S. job growth remained uninspired in July as employers for a second month postponed expansion plans and new projects pending a clearer economic and political direction, say
staffing firm executives.

Most held out hopes for some sort of bounce as early as August or after the November elections, but expectations for job growth have been generally downgraded for the balance of the year.
"We certainly saw a lot of momentum in January, February, March and April -- then we began to see a holding pattern
"Across many industries, including staffing, expectations are now being adjusted downward to reflect a more modest economic recovery over the next few quarters," he said.

Anectodal reports paint a contrasting picture than the one being painted by Treasury Snow et al

Oil consumption is higher in the US perhaps due to military suppliers going full blast rather than the general economy -thus the continued high demand for oil

The jobless recovery continues

All Aboard The Gold Bull Express - Part ll

misetichUS banks seen vulnerable to high mortgage holdings#12348308/05/04; 14:57:35


NEW YORK, Aug 4 (Reuters) - U.S. banks could be hurt by their vast holding of mortgages and related securities if interest rates rise rapidly, according to analysts and bank regulators.

The Office of the Comptroller of the Currency (OCC), one of the federal bank regulators, cautioned that a small but growing number of banks that have accumulated trillions of dollars of mortgage securities through "carry" trades are vulnerable if rates rise quickly.

Carry trades have been immensely profitable for banks and other investors by borrowing at low short-term rates and putting money into longer-dated investments like mortgage securities.
Banks have lent trillions to consumers to buy homes and to refinance their higher-rate mortgages, and engaged in carry trades locking in solid returns of 4 percent to 5 percent on their mortgage investments.

U.S. commercial banks held $2.3 trillion in mortgages at the end of the first quarter, or 24 percent of all mortgage debt outstanding, according to the latest Federal Reserve data.
"Just because earnings rise over the near term does not mean there isn't an interest rate risk problem," OCC's Dick said in a statement at the time of the bulletin.

The Fed is in a box - caught between the effects of The 2004 Oil Shock And Awe rising Real Price Inflation - a jobless recovery - Asset Defaltion - and IR problems

All Aboard The Gold Bull Express - Part ll

HeathenOut of the Pan and into the Fire#12348408/05/04; 15:00:08

I should clarify my late-night logic and explain that I meant to discuss FINDING Gold as an allegorical, or if you will, metaphysical experience. Which through the actual experience of the physical homeopathically leads to the End of Want. That said I'm not holding my breath waiting to scratch across the Mother Load here in Western Massachusetts! Like tying flies, learning to Pan a little informs the whole Gold Holding experience and is a good way to spent the hot hours of midday when the trout are busy watching TV and drinking beer! But BUYING gold IS modern day prospecting if you will. Your paper your pick and CPM the mine of choice for me.

I stumbled across this forum when the Sun was Longest and after reading a lot of the archives bought Physical Gold for the first time in my life. I'd read other Gold sites, but my inner meter registered nothing if not mild cynicism because they did not give me enough information to answer the whole puzzle FOR MY UNIQUE SELF-even if they were steering me in the right direction(Gold Buying) whereas CPM presented ALL the tools needed in one easy package-FREE- and my inner meter diidn't register that funky doubt. In the world of Physical Gold sales there is Gold and there's Iron Pyrite.

About The End of Want; there has to be one. Somewhere Enough Is. Most men might not ever see the End of Want, not to mention cross that line, but some do. And, to a degree, we all do just before Death. Because, at some point, if you have too much you have to put it somewhere. Which inevitably leads to paper and breeds avarice. Which distorts the general nature of the material world. But When Enough people Hold Enough Physical Gold then Gold's "EMPTINESS" will be fully available for US to FILL without distortion of the contents-whatever YOU choose them to be. Interestingly, when this happens the "PRICE' of Physical Gold will be such that , most people, could CARRY ALL THEY WANT!


SurvivorRandom thoughts while watching things unfold . . . #12348508/05/04; 15:05:46

On having gold and wanting gold:
Here in North America we don't have nearly enough folks who understand the truth about wealth and stored value. If we did, the PTB might not have such an easy time manipulating the POG. Years of promoting fiat through propaganda may not add up to any stored wealth in our fiat accounts, but it surely does add up to a great deal of power over the perception of fiscal reality by the sheeple. Bottom line: There are far too few people who realize that they *should* want gold.


On the retail trade and same-store sales:
Isn't it absurd that the overall strength of retail is measured by the assumption that sales each year must eclipse the previous year by some significant percentage? Apart from the slight increase that should come from additional population in a stable economy, this is like saying that there hasn't been enough inflation or additional personal debt since last year to suit investors. Sheesh!


On the supply and demand of oil:
I believe that Yukos had been shipping 1.7 million barrels a day. This, against a daily world demand of 80 million barrels. The loss of just over 2% of supply causes at least a 4% spike in the price of futures. Isn't this going to be fun when world demand exceeds supply by 5% and then 10%? So far, OPEC's claim of increased output seems to be just so much hot air.

- Survivor

misetichAirline pension default could cost billions#12348608/05/04; 15:09:00


WASHINGTON, DC, Aug. 1 (UPI) -- With the possibility of a $5 billion pension default by United Airlines, there's reportedly a possibility of more U.S. airline defaults totaling $110 billion.
United seems intent on shedding some or all of its $13 billion in pension obligations as the only way to emerge from bankruptcy proceedings, the New York Times reported Sunday.

Under pension law, the $13 billion owed to retirees cannot be legally taken away, however, under bankruptcy law workers are unsecured creditors. The $6 billion shortfall United has underfunded the pension fund is considered unsecured debt -- and workers could loose that money.

Pension underfunding problems is not restricted to the airline industry - and the SM is pointing downwards

Il Maestro thought he had beaten inflation, (by keeping the "inflation thermometer - GOLD- under wrap) the stock market bubble burst and then deflation

...not so quick Maestro - post-poning is resolving the issues

All Aboard The Gold Bull Express - Part ll

misetichmisetich (08/05/04; 15:09:00MT - msg#: 123486)#12348708/05/04; 15:12:27

Correction should read NOT

Il Maestro thought he had beaten inflation, (by keeping the "inflation thermometer - GOLD- under wrap) the stock market bubble burst and then deflation

...not so quick Maestro - post-poning is NOT resolving the issues

TownCrierThe question is, what's the mechanism?#12348808/05/04; 15:38:29

HEADLINE: Italy could use gold to clear debt
ROME, Aug 5 (Reuters) - Italy could use its gold reserves to help slash its debt pile, the world's third largest, the economic adviser to Prime Minister Silvio Berlusconi's office said in an interview on Thursday.

When asked about the assets that could be used to pay down Italy's debt, Renato Brunetta told Reuters, "There are idle national gold reserves, in surplus compared with the reserves forecast by the European Central Bank because each country had reserves related to its own currency before the entrance of the euro."

He also named a number of other ways that the government could tackle the debt issue, including privatisation of local utilities and non-strategic assets.

Europe's central banks in March reached a new deal that raises the limits on their annual gold sales to 500 metric tons a year for the next five years, up from a 400-tonne limit. The new accord will go into effect in September.

At the time, the Bank of Italy, which has not sold gold from its reserves since the Fascist period, said it had no comment on the new deal.

The chairman of Italy's parliamentary industry commission, Bruno Tabacci, first proposed breaking into Italy's gold reserves to ease its debt load in 2002, but the head of parliament knocked it down.

...To cut the debt, the Treasury has set a target of raising 100 billion euros in state privatisations from 2005-2008.

-------(see url for full text)-----

Only if the gold in question were owned outright by the government could it be so directly sold as implied (like any other privatization program) to raise free cash with which to pay down debts. However, inasmuch as this gold is in the domain of the Bank of Italy, monetized among reserves that form the nation's monetary base, then it cannot so easily be sold for cash with which to pay off government debt -- it's absence would leave a gaping hole in the bank's balance sheet that would basically need to be filled straight-away using the paper assets raised from the sale. At first blush, the only free cash that would remain to pay down debt would be from a mechanism of payments received in excess of the current monetized valuation of the gold reserves.

Any other thoughts on this gold-for-debt nonsense?


USAGOLD / Centennial Precious Metals, Inc.Put a Foundation Under Your Portfolio#12348908/05/04; 15:47:08

Swiss Gold Francs

Get the Legendary SECURITY of a Swiss Account...

...Delivered to Your Door.

Call USAGOLD - Centennial for Arrangements

TownCrierOil driving currencies like leaves on the wind#12349008/05/04; 16:05:36

HEADLINE: Dollar slips vs Europeans as soaring oil hits yen

NEW YORK, Aug 5 (Reuters) - The dollar weakened a bit against major European currencies on Thursday but strengthened against the yen, which was hit by a selloff due to the likely effect of surging crude prices on oil import-dependent Japan.

Traders sold the yen across the board, particularly against the euro, aware that high oil prices could crimp economic growth in Japan, which imports nearly all its energy.

The euro's strength against the yen helped support it and other European units against the dollar...

"Everyone's looking at oil, ... yen traders more than anyone else," said Ronald Simpson, managing director of global currency analysis at Action Economics. "You need a brace and a crash helmet to trade that stuff," he said, referring to oil.

The British pound slipped against the euro, after the Bank of England raised benchmark interest rates by a quarter point, as expected, to 4.75 percent.

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

As tangible oil reveals the weakness of paper, the world's CBs continue to reevaluate the moldy policies of using paper-dominated international reserves.

Get your gold before they flip the switch.


SmeagolNow, don't give us sstage fright, precious!#12349108/05/04; 17:05:15

Gandalf the White (8/5/04; 09:36:33MT - msg#: 123468)
"WOWSERS !! -- I love this place. <;-)
Tomorrow, instead of getting ready to toss either overripened fruit or fresh fish -- I shall be prepared to toss a small amount of PRECIOUS, (if Sir Smeagol's act is as GREAT as I envision !)"

Ssss! Now you are ssticking your neck out very, very far, O Wizard in White! (cackle)... you may find it not THAT momentous a Tale... we will see... but we thanks you for the vote of confidence! We loves this place too... we feel indebted to everyone here, who have been making it a great... sss... no, a FANTASSTIC read over the lasst several months (years?).

Has it not truly been so, precious? Things ssaid here long ago are now being noised about, ssometimes almosst word-for-word, on talking picture-boxes around the World. If you come often to thiss Oaken Table you are way ahead of the game!

We haven't ssaid much... because we really haven't all that much to contribute on the sserious sside... mosstly we sits and lisstens, sometimes in awe, and scribbles a hai-ku or three... with things like these we have a chance to maybe give back ssomewhat of value to all of you who have given us sso much.


SmeagolIs It really that difficult?#12349208/05/04; 17:17:56

Gandalf the White (8/5/04; 10:06:39MT - msg#: 123471)
"Just thinking about the cost of converting the raw gold to 0.9999 PURITY is also mindboggling !"

BOOM!... (haul, pulverize,
pile, leach, pump, electrolyze,
cast, roll, punch, stamp)... GOLD!

...sss...O, and there's a lot more to It than that, precious, but after all we has only sseventeen ssyllables to choose from!


MKItaly#12349308/05/04; 17:28:19

Thanks for posting the story on Italy's debt problem, Randy. I was aware they had a problem but wasn't aware of the details.

It seems the Italians are faced with a choice:

1. Rid the government of state sponsored enterprises which are probably at least contributory to the debt problem in the first place (just a guess, since governments tend to subsidize industries in order to deliver products and services at a lower rate to the populace than probable if private, i.e., utilities)


2. Sell gold


The one deals with the problem at the source by spinning the offending subsidies back to the private sector where they will no doubt be run more efficiently and theoretically at a profit (instead of a loss to the taxpayers).

The other--selling gold--only serves to continue subsidizing the problem and what's worse by selling the national gold. I might add that would be a one time affair that would merely stave the problem temporarily without presenting a long term solution.

Once it's gone, it's gone, and there will no getting it back. I suppose I shouldn't care in that whatever gold they offer will be sold into the international black hole of demand, and continue to meet the needs of people like the clients of USAGOLD-Centennial Precious Metals.

My guess is this plan will be vetoed like the last one, unless there are pressures here not alluded to in the article. The Italians would be well served with the same advice I had for Bundesbank when Ernst Welteke had the unquenchable urge to rid Germany of its gold burden: Contact China and Japan and they will gladly and quietly have the entirety of Italy's gold reserve shipped to Bejing or Tokyo in a matter of days. Italy would then have a nice pile of U.S. dollars.

It is interesting that this story would surface on the same day that the United States would announce the presence of a record $1.255 trillion in U.S. debt held at the world's central banks -- $319 billion of which was added just over the past 12 months.

In the end, you are right, Randy. All they are doing is leaving a huge hole in their balance sheet as the asset disappears to pay off debt. I thought that selling gold to pay off debt was taboo vis a vis the EU criteria? And the reason you cite is probably the real reason why: It doesn't get them anywhere. Or am I missing something?? As you rightly point out only the income from those dollars plugging the hole are free and clear. Better to spin off the subsidized industry and take back a royalty (tax,): Better business all the way around.

Black BladeOil threat to world economy #12349408/05/04; 21:08:31,3604,1276389,00.html


Fears that the world economy could be derailed by higher energy costs intensified last night after the price of oil set fresh records on both sides of the Atlantic.
With petrol prices set to reach record levels within days, the chancellor, Gordon Brown, was said to be monitoring the situation from his holiday in Scotland. Oil cartel Opec last night tried to soothe the market, saying it could - and would - pump more oil.

Brent futures leapt 35 cents to $40.99 (£22.50) a barrel, outstripping the previous high of $40.95 set in 1990 in the runup to the Gulf war. In New York, US light crude prices set a record of $44.30 a barrel, the highest in 21 years of the New York Mercantile Exchange. Both contracts subsequently slipped back, but few analysts expect this to be the peak, with some saying that $50 oil is a possibility.

Black Blade: Even as WTI crude rocked past $44/bbl, the price is still "cheap" (inflation adjusted). I still would not be surprised to see Oil rise above $60/bbl by year-end. A large number of hurdles for oil and natgas ahead. Get prepared, get precious metals to weather the approaching storm and offset losses as the US dollar weakens and inflation/stagflation looms.

otish mountainProposed gold selling by Italy#12349508/05/04; 23:55:03

I have a different take to this annoucement. As the reporter states these are excess gold holdings above what is required as reserves according to the ECB.
Now with Italy having the 3rd largest holdings of gold in the world there is no doubt pressure to release this gold in order to possibly have it moved to countries who are under their gold requirement for acceptance into the European monetary union according to the ECB.
If I remember correctly, a report I read maybe 6 or 9 months ago stated, the new countries being accepted into the Euro umbrella had only about 4% gold of the 15% required by the ECB.
This gold if sold by Italy will never see the light of day and will be assigned a new owner probably within the European Union.
It also tells me that gold in any large quantity is very rare. Countries with excesses of gold over the required amount as set by the ECB will be asked to provide for other countries in a gold deficit situation.
This "sell gold to reduce the national debt" line is getting a little worn out and is for public consumption.
Sell the gold for paper currencies and use the interest earned towards the national debt would be the best out come. A balance sheet still has to balance out at the end of the day.
Central Banks are not stupid, there are other reasons when gold is sold.

GoldendomeRussia's new weapon to destroy the USA! #12349608/06/04; 00:55:48

I am going to express an opinion that I admit in advance, that I have really no knowledge about or evidence (other than what is unfolding now). The opinion is this: That although the Yukos oil company affair in Russia may have began as a campaign to collect back taxes and destroy it's chairman's political threats to the Russian leadership, that campaign has now morphed into a program designed to roil oil markets--raising prices; and ultimately hurting or destroying their arch enemy--the United States, economically!

Allow me to point out a few factors that I feel still vex the Russians when they consider the United States:
1. They were humiliated by their own collapse at the end of the cold war; and over the years, the United States has continued to "rub-it-in".
2. I feel that they have not forgotten how we sided and helped the Afgans after the Russians attempted to gain control of Afghanistan in the early 1980's; and again--we, over the years, have not been shy about pointing out the many ways we helped defeat and ultimately weaken them.
3. Later on--1998 and their economic crisis. Again, wasn't it the shifty Western bankers that tricked them into the predicament that precipitated their currency problems (their perspective).
4. And now, do they feel that the U.s. will only make nice with them as long as they go along with our program? I refer you to Iraq, where the Russians stand to lose Billions due to our invasion of Iraq, which they did not back, and surely see us too, as meddlers in their back yard.
5. The U.S. can't seem to help but to criticize Russia's handling of their rebelling provinces, as if we wouldn't crush rebellion here, if our Georgia decided it wanted it's independence!

Ok--so there is a short list of recent grievances that I feel the Russians may be chafing under even now, though publicly not stated.

So, Putin or someone over there starts this tax program against the oil company and it's CEO, has him jailed, etc. It's all a private internal matter right? No one else's business. After all, our own IRS goes after renegade tax cheats all the time--nothing radical about that! Well, Voe-La!
All of a sudden the oil markets begin to get spooked and crude prices begin to rise on fears of shortage, at the same time that demand continues to peak.

And there is the basis for the transformation for this episode into something else. For the Ruskies know that our big vulnerabilities are oil demand, it's price, and the follow-through effect that it has on our economy. They also can see the vulnerability of our debt pyramids to a crisis in world confidence to our economic strength. The longer the Russians can continue to dangle Yukos from a web before the world, the more precarious the U.S. situation becomes. I feel that they realize this now, and may have determined that this is the way to finally get to the United States in a way that they have never been able to before.

The more that Yukos can be slowly tortured and slowly made to cut back production, the more they as a nation win. They injure the United States economically. While at the same time, for months now, this tax and company investigation has been accepted by the U.S. and other nations as simply an internal Russian matter. How could we begin to protest it now? The Russians also benefit as a big oil producer at now higher prices. And, any economic crisis--dollar crisis--or crisis in U.S. markets will also benefit the Gold price, of which they are also large producers.

I have been amazed at the political silence in our country about this matter. Maybe, it's because the Russians are still a pretty tough dog; the more we might bark, the more they could bite!

TopazBonds Oil Dollar.#12349708/06/04; 02:45:35

The dilemma here is that Bond Yields HAVE TO keep dropping in the face of a rising Oil price to keep DX at it's current level. Recent Auctions suggest otherwise.
Perhaps an UGLY NFPayroll number will suck in domestic Bond demand!

Buongiorno!golden dances!#1234988/6/04; 07:01:34

Smokin' smorgesbaard Smeagol! They musta heard you was going to speak today and them shorts was runnin' fer cover!
Dec AU over 400! 'Tis indeed a buon-giorno!

misetichEmployment Growth Surprisingly Weak#1234998/6/04; 07:27:02;jsessionid=H14JZB3ECMWGUCRBAEZSFEY?type=businessNews&storyID=5897043


WASHINGTON (Reuters) - U.S. employers added a paltry 32,000 workers to payrolls last month, the government said on Friday in a report far weaker than expected that will come as unwelcome news for President Bush ahead of the presidential election.

The Labor Department also cut its tally of job growth for May and June by a combined 61,000.

The unemployment rate, however, fell to 5.5 percent from 5.6 percent in June as a separate government survey of households showed robust employment growth. The department cautioned that the household survey was a less reliable barometer of month-to-month changes in employment than its larger survey of businesses.

ANOTHER meanlingless report - though it is being capitalized on by "those in the know"

Guess Il Maestro will be "on hold" .

....going to be busy today - a flood of new arrivals at the Gold Express - Have a golden day!

All Aboard The Gold Bull Express - Part ll

makcumka@ Goldendome - Those pesky Russians#1235008/6/04; 07:36:25

Sir Goldendome,

To add to your opinion, I think that Yukos affair was always meant to be a means to control US oil appetites. Tax evasion is a business norm for all Russian businesses, and Kremlin could have gone after anyone to collect back taxes. However, when Khodorkovsky (Yukos owner) decided to heavily finance a presidential candidate to form a strong opposition to Putin, this did not sit well with Putin. Khodorkovsky also tried to sell a major part of Yukos (the company controls 20% of all Russian oil) to a US company. Putin could not afford that, because he fully understands the importance of oil in today's and future world.

To address the rest of your post:

1. Russia's humiliation is not about the collapse, but about US "rubbing it in", and the imperial appetite that US has shown after the collapse.

2. I do not believe that Afganistan is such a thorn in Russia's side. After all, Russia supported US invasion of Afganistan, did not object to US military bases in the region in close proximity to Russian borders, and offered their military expertise, which, I believe, helped US to avoid heavy casualties in Afganistan. However, after Iraq, Russia strongly opposed having US bases that close to home and the relationship between two countries turned sour.

3. The economic crisis - I have no facts, just my gut feeling, why that happened, so no comment.

4. US has perpetrated Russian interests not only in Iraq, but also in Iran, North Korea, and South America. I think, this is still unfolding and we will see many tensions between two countries for years to come. Unless, of course, US will bankrupt itself, like Russia did at the end of the cold war, and seize expansionary policies.

5. Fighting in southern regions of Russia is being criticized by US because Russia's military action in Chechnya, and conflicts in Osetia and a few other places are conflicts about (surprize!) oil. Chechnya wants to separate and build an oil pipeline from Kaspian sea. Historically, what is now known as Chechnya was not always the land of Chechen people. In 1937-1939 Stalin engineered and executed a massive relocation project, when the entire nations (mostly in Caucasis) were moved from their natural land to a different area, thus achieving two objectives: a. severing historical and cultural ties of the nation with their land and b. in the time of distress, there was almost guranteed to be a civil conflict between neighboring nations for the control of the land that both nations (original population and new population) considered theirs. If the neighbors are fighting, it is easier to conquer them.

I will throw another point on your list:

6. US support of muslims against orhtodox christians in Kosovo. This is a very sensitive subject to a lot of Russians, and this could very well be that straw that broke camel's back as far as Russian support of US policies goes.

You are correct when you state that Russia still has the bite, but since the end of the cold war they, in my opinion, have learned to control their bark.

melda laureka-pop!#1235018/6/04; 07:48:53

Oi he tosses the precious and sticks it on a might squib! I see scorch marks on the comex celing! May it be someday I'll see Pisani or Maria with a sooty grin saying "It was hoorrrrrible!"

I see the great deflation is back on the menu- if only the deflation of our delusion that we live in a stable economy.

Smeagol"The Rhyme of the Ancient Gold-Mariner"#1235028/6/04; 07:50:31

(Beware, it's far from it's namesake!)

Ssir Buongiorno!, if the Gold-futures turn on what poor Smeagol ssays, we're ALL in big trouble! (cackle)

Not to make less of the ominous goings-on and the great content possted and diss-cussed here of late, O no not at all, precious...

For the amusement of the Knights, Ladies and Hossts of this finesst of Casstles, we offer and dedicate to them this Story-verse, the idea for which came to our head three weeks ago... sss... we have finished twisting the details into shape, and ssince it is a tad long, we will break it up into ssections over the next several days so as to not hog the Table Round... and to increase the drama a little, perhaps... (grin)

*jingle*... Eh? What is thiss for, precious?... traditional garb, you ssay, for telling a tale at Table?... sss... (donning the Jester's cap)it's a bit big... *jingle*... O well... sss...


The Rhyme of the Ancient Gold-Mariner

Around the World the story had been told,
About a Race that would in time unfold,
Which would intrigue all, lofty or lowly,
With stakes higher than any in history.

The outcome would turn out to affect
Even those who didn't participate or bet.
Irresistibly altering everyone's course
In subtle or brutal ways for better or worse.

Finally the season came for which many long had yearned.
And then dawned the day on which all eyes were turned
To such a spectacle as rare as one would ever see.
Quite possibly the only of its kind to ever be.

Long in preparation with no expenses spared,
While news reporters shouted and klaxons blared,
In the morning at precisely eight-twenty on the clock,
The largest vessel the World had ever seen slid from her dock.

Christened with only the finest of Champagne
In the midst of an extravagant ad campaign,
With a thunderous wave that drenched onlookers ashore,
The Derive was launched, greater than any before.

Financed by those who had no peers,
Built by teams of respected engineers,
Underwritten by triple-A rated papers,
Her decks and bridges rose like skyscrapers.

Stronger she looked than the fortress of a treasury.
Each of her engines could power a very large city.
Her itinerary was impeccable and the menu was endless;
She would make many a tidy sum, this new empress.

One could choose to have every affair managed and let their cares go,
Or experience the thrill of risking it all in the world's largest floating casino.
Thousands boarded and the staff their merchandise stowed.
The Derive was open for business and the profits flowed.

Since she commanded resources so vast,
Against this behemoth surely no other could last.
With every option, every benefit one could describe,
What could ever compete with the great Derive?

Yet in time a glorious ship on the horizon did appear.
Old yet majestic was the Standard, proud and without fear.
Wherever and whenever her tall silver sails unfurled
She was considered the greatest ocean-going craft in the World.

Glad cries went up as the renowned Standard dropped anchor.
Trusty and secure, "Good as gold" everyone ranked her.
A boast in typical good faith her Captain did make:
"Come, Derive, we challenge you to follow in our wake!"

Then the parties commenced and everyone celebrated.
In sleepless expectation the start they anticipated,
Only to be rudely stunned awake by the news at break of day;
The great Standard had sunk, right there in the bay!

Treachery! Skullduggery! Sabotage, Cloaks and Daggers!
Conspiracy! An inquiry! yelled headlines in the papers.
But as the days passed it soon became obvious
It was unlikely that any would soon be brought to justice.

Dejected, the daily crowds of spectators milled about.
Derive remained unchallenged and many began to doubt.
"Now what? We might as well go home;
With Standard gone the Derive surely stands alone."

For the great ship Standard had been damaged beyond repair.
Indeed never would her lofty sails again embrace the air.

{To Be Continued}

KnallgoldRechtschreibereform#1235038/6/04; 09:43:08

I heard today that the "Rechtschreibereform" (spelling reform) in the german speaking countries is dead now as several newspapers publishers are abandoning it.In fact,it never has been accepted by the people (except in scool by decret...),we used the old style and laughed at the bureaucrats who tried to force it on us-they almost won the battle as there was a time it seemed irreversible.But it remained a wrong concept'something artificial and too complicated.Then,in the end,common sense has won.Has anyone thought FreeGold??

On Another note "when more people HOLD Physical Gold, ... by neccesity will mean some will HAVE TO HOLD LESS than they do now. --------"-Heathen
So the CB's have to be stripped of some of their Gold?

Aragorn IIISmeagol's recitation#1235048/6/04; 09:46:14

Thank you. So good so far, you are your own tough act to follow! I look forward to other installments in the telling.

got gold?

KnallgoldPOG#1235058/6/04; 09:51:40

The Gold spike today is probably another one time wonder,thats what it smells like.Well,I'm in good mood today as I found someone who listened to "my" Goldtheories- and she didn't oppose!

And a colleague informed he buyed more Goldcoins-once you start...

USAGOLD / Centennial Precious Metals, Inc.Another day, another dollar? Exchange today's harvest for timeless value!#1235068/6/04; 10:11:38

Swiss gold francs

Harvest Time
Whatever it is that you may have sown,
we'll give you the power to reap GOLD.

USAGOLD-Centennial has three decades of experience in the field

USAGOLD / Centennial Precious Metals, Inc.What you need to know before you buy your first ounce of gold...#1235078/6/04; 10:20:45

Q. In your book, The ABCs of Gold Investing: Protecting Your Wealth through Private Gold Ownership you start the chapter by saying "Who you do business with is one of the most important aspects of gold investing." Why is that?

MK. Most, if not all, of the progress an investor makes towards realizing his or her goals with respect to gold ownership hinges on that relationship. Unbiased, objective advice from one's gold advisor is a key element. So are market information and education. Pricing, product selection, fulfillment and on-going support also rely on that relationship. Above all, it is extremely important for gold buyers to match their objectives with the type of gold they buy. Positive results in all of those areas depend upon a strong relationship with a gold firm. That is why it is important to spend some time finding the right one.

Q. Can you briefly describe some of the pitfalls a beginner might be on the look out for?

MK. The biggest trap investors fall into is buying a gold investment that bears little or no relationship to his or her objectives. Take safe haven investors for example. That group makes up 90% of our clientele, and probably a good 75% of the current physical gold market. Most often the safe-haven investors simply want to add gold coins to their portfolio mix, but by the time they finish talking with a typical national firm, they might end up in a leveraged gold position, exotic rare coins, or being diverted into silver or platinum. Others drift into gold stocks or gold futures which in reality are proxies for real gold ownership and could actually act opposite the intent of the investor. There's nothing wrong with any of these non-physical investments per se, it's just that none of them is really a safe-haven. The investor should bear this in mind. The question investors must always answer for themselves is "How will this investment serve me should the economy or financial markets suffer a major disruption?"

Gandalf the WhiteGREAT start, Sir Smeagol !!!! BRAVO <;-)#1235088/6/04; 10:32:14

Smeagol (8/6/04; 07:50:31MT - msg#: 123502)
"The Rhyme of the Ancient Gold-Mariner"
(the clapping is still echoing in the Castle)
AND already, ---praise from THE KING, Sir Aragorn III !!!
I and the Hobbits await the next segment.

mikal@Smeagol#1235098/6/04; 12:19:37

Good on ye captain,
What the doctor ordered,
Ttreats for the sailors!'re on a roll,
Wind and sails keeping time with
Songs for the seasick!

slingshotSir Smeagol#1235108/6/04; 13:20:18

Bravo! Bravo!
Wonderful start for the weekend. What is really Great, More to Come.
Made my Day.

USAGOLD Daily Market ReportPage Update!#1235118/6/04; 13:37:07">
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.

--- gold market excerpts ---

Comex Dec gold futures bolted to 12-day highs of $404 per ounce Friday morning on a sharp jump in fund and dealer interest spurred by the surprisingly weak U.S. employment report and associated drop in the dollar.

Non-farm payrolls grew by 32,000 last month, the smallest increase since December, the Labor Department said Friday. The department also said employers created 61,000 fewer more jobs in May and June than first estimated. This prompted a widespread bailout in the U.S. currency by international investors who sought refuge in weak dollar-correlating assets such as gold.

The jump in Comex prices from below $395 to the $400-$401 region took place within minutes of the data release, but thereafter Dec futures embarked on a more gentle climb amid jittery conditions to the $403-$404 region by just before 0900 ET.

Frederic Panizzutti, an analyst at MKS Finance in Geneva, said that the dollar's pullback "acted as a catalyst for gold and silver, and both rocketed higher within minutes, ignoring any resistances on their way."

As traders scrambled for a safer investment, gold for December delivery climbed $7.30 to close at $402.10 an ounce on the New York Mercantile Exchange.

"Gold has been held back on the falsehood that the U.S. economy was booming; which in turn, would make interest rates rise sharply; which in turn, would make the U.S dollar fly; which in turn, could only be bad for gold," said Peter Grandich, editor of the Grandich Letter, an investment advisory publication. However, July's payroll growth of 32,000, "combined with several recent economic indicators, should put this fantasy to bed," he said. That allows "the reality of horrific multiple U.S. deficits, a worsening energy crisis, a geopolitical landscape that must get worse before it can get better, and a polarizing national election ... to give the support gold needs to go to new highs and challenge $500 in the next 12 months or less," he said.

The small amount of new jobs created in July "will make it difficult for the Federal Reserve to raise interest rates," said Todd Hultman, president of, a commodity information provider.

A slower climb in interest rates would be "bearish news for the dollar and bullish news for gold and the euro," said Ned Schmidt, editor of Value View Gold Report, an investment publication of Schmidt Mgt. "U.S. equities are in for a long, long bear market that will take out the bear-market low for the Nasdaq," said Schmidt.

Against such a backdrop, the "only place for North American investors to find future returns is gold, silver and euro-denominated bonds/deposits."

---(see url for access to full news, 24-hr newswire)-----

NedFrom Sinclair :#1235128/6/04; 14:00:37

"No one in the financial industry should ever feel ashamed of a bad forecast. If the Fed Chairman can splatter egg on his face like we see today, can there be any hope for establishment equity analysts?

If the Fed raises the discount rate 1/4 point next week, it will be a world class save face maneuver. As far as measured increases, these won't happen if his boss wants to have any chance at staying in the White House. "

If Greenie holds watch gold really soar. What are the chances?

ArcticfoxTaken from taday's Richard Russell#1235138/6/04; 15:30:47

Hello Mr. Russell,

Just as I was convinced that the incumbent in the White House would be
re-elected, something surreal happened on CNBC this morning that makes me
begin to doubt it.

CNBC at 10:15 am EST or so had Rick Santulli live from the Chicago Board of
Exchange to get his view of the commodity, bond, and option markets. In the
background a chant was occurring. No one could hear exactly what was being
said, so CNBC asked asked Rick what the chant was.

The quote was "I don't want to be political, but the traders are chanting
an expletive and the and the incumbents last name." Why asked CNBC? "Well,
the traders are mad about the jobs report, the bond market, the currency
market, the stock market, and the oil market and the incumbents job
performance. Again, I don't want to be political."

Surreal is the only word to describe it. If a bunch of Republican pro-war
millionaires are this mad, the incumbent may be in trouble.

Let's watch and see,

Soumen Sanyal

Camel San Miguel#1235148/6/04; 16:54:50

Talk about trucks rolling over the Mexican border. I visited San Miguel de Allende in central Mexico last December and at 7AM, 4 days before Christmas, the traffic was backed up 125 miles from the Laredo border into the US, literally bumper to bumper. This is no metaphor. I saw this with my own eyes. 125 miles.

Although the trip proceeded at a snails pace, for anyone interested in different cultures it was well worth the wait. There is no corporate presence in the city , no modern buildings and the entire commercial enterprise consists of small independently run businesses. The cathedral , not the bank ,is the tallest building in town and if you want conversation instead of the Internet simply walk to the town square and you will find it.Long known is an artist colony , the melding of the virtue of the native Mexicans with the non- conformity of the artists and the money of the wealthy tourists has produced its own unique strain of humanity.

Of course Walmart seeks entry into this market , and of course if they ever succeeded this culture would be destroyed . Don't get me wrong I shop at Walmart myself, because the clothes are cheep, but all around the country there is an organized resistance forming to Walmart's new aggressive expansion plans. As it metastasizes from an entity with ten units per city to something with a unit every three miles ,chocking off other healthy business activity, it seems like some one should ask why? Why do this ?Why can't they be satisfied with what they have?

As the economic expansion runs into the brick wall of higher oil prices small business will close , homes will be foreclosed and the Walmarts with their unlimited line of credit will prevail.

Lets not forget either that there are substantial numbers of people in this country that have no access to credit other than the pawn shops which charge an annualized rate of interest of 180%. I don't know how many ,maybe 25- 30 million, but they are out there clinging to some little bit of flotsam , swimming with every ounce of strength they have just to keep from going under. We don't see them anymore because we have our eyes on a different prize , but they are still there.

As through this world I ramble,
Ive met all kinds of men
Some will rob you with a six gun,
Some with fountain pen.

Woody Guthrie

USAGOLD / Centennial Precious Metals, Inc.Helping you enter the gold market with grace and confidence.#1235158/6/04; 16:57:00">Get a head start on the gold market!
Federal_ReservesArticFox> On Santelli - Sounds like those#1235168/6/04; 17:07:27

traders where short the bond market looking for a good jobs market report to cause the bonds to fall. Instead the labor numbers were poor and bonds spiked. I'd be chanting expletives too, because the administration (SnowJob) has been promising massive jobs growth and it isn't there in the establishment survey and now the economy has hit this "soft" patch that many blame on the high oil prices sapping purchasing power. IF you look at the payroll report you will notice meager YOY wage growth not keeping up with inflation. While most folk have jobs, they are falling behind, deeper and deeper in debt!

Hourly and Weekly Earnings (Establishment Survey Data)

Average hourly earnings of production or nonsupervisory workers on private
nonfarm payrolls increased by 5 cents in July to $15.70, seasonally adjusted.
Average weekly earnings increased by 0.6 percent over the month to $529.09.
Over the year, average hourly earnings increased by 1.9 percent, and average
weekly earnings grew by 2.3 percent. (See table B-3.)

GoldendomeWhere they gonna run?#1235178/6/04; 17:50:09

Brother! This is certainly a time when it is good to just sit back with the accumulated physical gold and silver and watch the convulsive seizures that are taking place in the financial markets. Do you think there have been a few haircuts given lately in these whip-sawing markets? The dollar down--then it's up--then it's down again. Bonds: the same way only usually in the reverse of the dollar. And the stock markets: some ups, but mainly down now--steadily, just a slow bleeding away of paper value. Will there be an eventual deluge?

The financial press--economists, or, who ever is trying to direct and to orchestrate the "good times picture" must be operating in the desperation hope cycle of forecasts now; because nothing seems to be turning out as it's "hoped for" to propel the economy, the dollar, the stocks, and the bonds to a nirvana level; that would again show all, that we are truly in charge once again, of our national financial situation.

Some of these money managers, traders, and speculators must, I would think, now be beginning to face a fearful reality, that this Turkey just ain't gonna fly no more. There must be some huge cracks appearing in some of these highly leveraged funds. Obviously, everyone can't be guessing correctly the next move to make. I will hazard that shortly now, we are going to hear of a huge default. What will truly be gruesome will be the days that the dollar, stocks, and bonds all are headed down! Then where are they all going to scramble to?

SmeagolWater break#1235188/6/04; 18:07:45

Thanks you all, we are glad you are enjoying the Sstory-tale sso far!

Ssir Mikal, (cackle) we likes that NICE hai-ku you wrote - this one:

"'re on a roll,
Wind and sails keeping time with
Songs for the seasick!"

Sspeaking of wind in ssails, ssomehow we cant sstop sseeing the image in our head of Green-span, Snow, and all the other sspin-meisters sstanding on the U.S. economy-deck in a dead calm... blowing as hard as they can at the limp canvas... sss... maybe hyper-ventilation explains their 'euphoric' outlook...(cackle)


MKOld and in the Way #3............#1235198/6/04; 19:03:13

This one is quick and easy, down and dirty. However, you want to phrase that sentiment..........Another post that got stuck in the file, dated 1/26/04. Originally addressed to Rich Powell. I might add that a very good short study of the German inflation is now available through our Gold Classics Series featured in this afternoon's client letter -- available by signing up for our free introductory information packet linked above.


I haven't read the Ferguson book. Any idea where I might find a copy? The German inflation example is of course one of the more famous.

Here's a good question for you Rich:

In an economic environment where an individual's life savings could not purchase a cup of coffee, what would it cost for an ounce of gold?


That last figure - 40,000 billion - would approximate the growth expressed in the German inflation index in the 1920s if the starting point were 400, so you can see that FOA was off a few digits if that particularly nightmarish chapter in economic history were to recur now, in that he pegged gold at $30,000 per ounce some day. It's all relative......and then some.

At any rate, Rich, let me know where I can get a copy and I'll order it in. I particularly like the anecdotes that go with the hard history.

Best wishes and I hope you are wintering well......

CometoseJim SInclair's Latest.................................#1235208/6/04; 19:05:43

May be a really good reason to buy some more PRECIOUS
METAL it ....
This is a Chess game and I think Jim is a couple of moves ahead of the rest of us..............

Watch what happens next.......

HeathenEager#1235228/6/04; 20:15:08

Waiting for Smeagol . . .
In lonely August nightshade
Where is my Albatross.

R PowellM.K. // "When Money Dies"#1235238/6/04; 20:17:45

Your post sent me on a search for my notes of that long ago post. I'm now once again resolved to attempt to organize many years' worth of notes, articles, and research which probably, through the passage of time, now holds more sentimental than practical value.

The name of Adam Ferguson's book is listed above. I've forgotten the publisher. I may have listed the publisher in that long ago post which I can't, at this moment, find. The book is out of print. I obtained a copy with the assistance of our local library which obtained a copy from one of the colleges/universities in the Boston area. I regret not owning a copy for rereading. With your interest in history, fiat currencies, economics and human psychology, I'm sure you'd enjoy Ferguson's work. The specific actions of the government's attempt to control the monetary stability would enchant TownCrier. It was a futile effort once confidence was lost. Interesting also was that some efforts were doomed simply because the currency was deflating in value so fast. Perhaps the attempts were logical but there was no time or not enough time to enact in tax money amounting to an almost worthless sum by the time it was collected! The tax money's value, once collected, was less than the cost of it's collection. The government was, in essence, bankrupt. When next we see such a situation, I would expect to see the same time constraints hinder or render useless the efforts that undoubtedly will be made at stability.

I've recently gained more appreciation for the direct role of the paper money/gold relationship. This may have come at the expense of seeing less and less investor inclination to the idea of gold as a safe haven. I'm not disputing that gold fulfills this role, just that not enough scared investor money flows toward gold, even when war, pestilence, disease and death seem on our very doorstep. This may be tied to the views of the current generation of big money managers. It may also be simply my failure at having seen the event happen...Bigtime...when I thought events warrented it's happening. Be that as it may, I believe the realization that price inflation is so much higher than the government figures indicate and...and, that the monetary situation is so much more fragile (debts, deficits, wars, economic strength, jobs, etc.) than the majority now believes, may lead us into another monetary confidence crisis in our lifetimes (perhaps sooner than later?).
However, even if I'm totally wrong in this regard, (a quite frequent occurance caused no doubt by a malfunction in my brain synapses) Ferguson's work, especially the anecdotal repercusions among the population at large, is an eye opener. Thoughts...?
happy weekend to all..!

R PowellAnother good one#1235248/6/04; 21:11:07

Another very entertaining book, now available in paperback, is "Bringing Down the House". It follows one young man's indoctrination into and exploits while a member of the M.I.T.'s Blackjack Club.

I first found mention of it in Barron's. I watch commodities, especially gold and silver, with more of a speculator's practical opportunistic view than that of an advocate's fervor. This is not to say that I disagree with any particular point or opinion, just that I still retain all the greed ($$$) with which I believe everyone is blessed with an abundant sufficiency at birth. Speculation, imho, requires some knowledge, common sense, discipline, patience and a little imagination which I call "what ifs" or "supposins". What if the general economic community began to believe that price inflation is much greater than what it thought in the recent past? What if the relative strength of the US dollar does indeed convincingly start down?

Anyway, about the best speculation can do is to weigh the available info, make a judgement call and bet accordingly. There seems to be too many variables to come anywhere close to a sure spite of what so many analysts would have us believe...especially those selling their opinions. But, we can assess the probabilities, no? The above mentioned book deals with betting with the odds in one's favor, about the best I've ever hoped for with my speculative efforts. Probabilities, speculation and economics are all intertwined, no?

The book's may be old hat to most (it was on some bestseller's lists) but I mention it for those who may have missed it and enjoy a book that disguises valuable information in a good yarn. However, a warning, it does conclude on a somewhat downbeat note. It is more fact than happy ending, which would have altered the facts of the matter too much.
But...happy weekend..!

R PowellM.K.#1235258/6/04; 21:47:08

I have found one old mention to Ferguson's book....from 1/21/02 msg# 68621. I know there were others.

My Lord, we've done a powerful mess of talking here, over the years. I have thoroughly enjoyed it all, even some somewhat heated exchanges, which I was always right, of course. (;>

HeathenThe Price of German Coffee#1235268/7/04; 00:06:35

Learning to try and distinquish between concepts like price and value is one of the best lessons I've gotten here though I can say for certain I haven't fully learned it and become conceptually dyslexic. If a cup of coffee was more than a life's savings how much Gold would a life's savings buy?

This had me putting on my stinking beaver hat and it brought germs to mind. Specifically these microbes that absorb and distribute Gold. Seems like it would be impossible for them to absorb enough to be worth their weight in Gold without toxifing.

How much gold can you hold? Is that perhaps the physiological way that gold's ‘final’ value or price could be established? Backwards. If you can hold 125 lbs of gold then that's, what roughly, a million at $500? But that is about the minimum amount of money a person could use in a lifetime at least in the USA. For simplicity assume up to 18 they are cared for at home then they work for 40 years and make 25k a year then at 58 they retire and family cares for them-again very simplistic. At today's Gold prices thats too much to heft around. Sure we all have more than 100 pounds of stuff but I'm talking animalistic here, gypsie, living off the land, Kozinsky's Painted Bird. Since the microbes that absord and distribute Gold must have a carrying capacity, so could humans, too, have a pre-determined rough amount of gold they can HOLD? And hold in all its implications, firstly actually heft, secondly reasonably keep safe. It is clear that some of the problems we are all discussing spring from certain people/groups/institutions holding too much Gold. So we are already impling a ‘carrying capacity’ of sorts at one end of the spectrum; we could extend the notion to reverse engineer what the ‘natural’ price of Gold might be based on biological and not economic/social imperatives. There isn't enough Gold for us all to be worth our weight in Gold, unless we have a big die off. Pegging the POG to the average American waistline that super-sizes those golden fries and we'd all be fat and RICH. So I'm trying to make the case that the ‘natural’ price of Gold should fall somewhere in a range that allows a person to comfortable ‘carry’ an amout of Gold equal to his life's worth/cost/money-he-moves or the total $ that he changes hands-The End of Want- whatever indicator figure you choose. Notably If we choose 1 million as the indicator figure at FOA's 30k an ounce we have a comfy estimate of two pounds of GOLD to HOLD, further hyper-inflation, Super-Sized inflation, if you will, would just lighten our load and ease our mind.

GOLD713Ferguson's Book - When Money Dies#1235278/7/04; 00:09:43

What a coincidence.

I just got this book this past week and started reading it. I remember the postings made about this book sometime back in January of this year I believe. The title sounded interesting and disturbing, so I went over to Amazon and back ordered a used copy. That's one way to get the book, but it took about seven months to get it. There is a bidding process associated with ordering out of print books there.

Even though I just started reading it there are a few things that are already interesting. In the preface the book states the way to destroy a country is to destroy its currency. I believe that is true.

Also, it discusses that although the German inflation was due to monetary causes, hyperinflation was brought about by both monetary and sociological causes. People were willing to buy anything just to get rid of their money as soon as they could.

HeathenFICO score range to be broadened-fresh baked credit come and get it!#1235288/7/04; 00:10:08


"Use of FICO risk scores for these consumers -- such as recent immigrants, people with low incomes, recent widows and divorcees, and young adults -- will help businesses expand their markets, reduce losses, and make more financial services available to more people," a Fair Isaac press release said.

CaradocHeathen's price versus value#1235298/7/04; 02:50:19

Heathen: Interesting questions you bring up! I suspect that -- apart from gold passing $800 per ounce and getting lots of TV coverage in the process -- only an easily understandable and intuitively valid pricing mechanism like the approach you are taking has any chance of convincing the average guy in the street that gold is worth holding. When I'm following your "top down" approach of arriving at a gold price where one of the two determinates is how many ounces a person can carry, I tend to think not in terms of whether you can physically lug around a bag with tens of pounds of gold, but in terms of how many ounces you could hope to hold onto if sewn into your clothing while surviving a transition period with no more privacy than would be available if crossing the Atlantic in steerage or being transported across Europe in a boxcar. In short, a coat that doesn't clink when you roll it up to use as a pillow. My other determinate isn't a lifetime of earnings but the amount needed to start over; i.e., owning a small business or a 5-acre farm. Still, since both my numbers are smaller than yours, the math may work out to a similar pricing level.

Usually, I approach it from the other direction: a bottoms-up approach starting with the fact that there's less than an ounce of gold per person on the planet. In this case, it makes more sense for the other determinate to relate to the average individual's life wealth. Maybe I like this approach better because it works out to a higher price per ounce.

Thanks for stimulating the thought process.


misetich U.S. Budget: Republicans, Democrats Spar Over Budget Deficit Aug 6 / 12:48 EDT#1235308/7/04; 05:33:34


"Our policies are creating a stronger economy, more jobs and a lower deficit," Nussle said.
"In four years, the Bush administration will raise the debt ceiling by an unprecedented $2.1 trillion," Spratt said.

"When the debt ceiling is breached three times in four years, it should be an urgent alarm, a call to action on a deficit of $445 billion, before still more precious time slips through our hands," he added.

With the US economy growing weaker each and everyday as The 2004 Oil Shock And Awe continues, it is inconceivable how Budget Deficits are going to be reduced going forward

The lack of JOB CREATION, double digit Real Price Inflation, wages falling behind paltry US Feds published "inflation" and DECELERATING stock market are not the ingredients of a sound "underlying" (SnowJob latest muttering)economy

The maintainance of "staying the course" on current foreign policies add a financial burder for years to come - as the "war" is being fought on many fronts, without the support of "traditional friends"

The combination of within and without is lethal and in a few years baby boomers retirements are in sight adding tremendous strain, on social security and medical costs

The global economy is in uncharted waters challenged by ever increasing energy costs - Optimists such as the IMF interpret this global growth as "positive" yet a further analysis, much of this global growth has been fuelled by China's rapid expansion and the US (through emergency IR, tax and currency and military spending stimuli)

China's rapid growth has put a strain on commodities and in particular - oil - and a continuation at this hot pace spells trouble for industrialized west, that has benefitted from "cheap" natural resources as Real Price Inflation roars ahead

US growth from 2001 forward has been below par and recent growth (last 3 quarters) represents an attempt to re-ignite this engine.

Il Maestro's economic analysis is totally contrary of what's really happening in the US

The "soft-economic patch" which started in 2001 and continuing has been interrupted by a "flameout" upward for 3 Qtrs as a result of the above mentioned reasons.

Aggravating the situation is the required maintenance of a housing real estate bubble and equity market lofty valuations in lieu of reduced corporate earnings and revenue ahead and not increasing the financial carrying costs on both assets.

Pension retirement portfolio managers are ENCOURAGED to add some valuable insurance to their portfolio by diversifying from paper assets to PHYSICAL GOLD

Physical Gold is the ultimate currency in times of stress.

All Aboard The Gold Bull Express - Part ll

NedHere's an interesting one to chew on.....#1235318/7/04; 08:11:35

"Once again, as has been customary whenever the US dollar dips relative to other currencies, many are making statements and even suggestions relating to the currency of oil pricing. Some are hinting that the euro, which has shot up to stardom, might be a better and safer currency for pricing oil without asking: better for whom?


OPEC's efforts to monetize its petroleum resources will continue to be derived from the sales of petroleum and related products priced in the US dollar.

Production management will remain OPEC's only tool that will influence the unit price of its exported commodities and revenues.

Introducing a currency indexed basket price range will be very harmful to market stability.

Until such time OPEC's market share is substantial, its influence on the oil market will remain constrained.

Changing the oil pricing currency is not an option."

SmeagolThe Rhyme of the Ancient Gold-Mariner, continued#1235328/7/04; 08:43:22

Meanwhile, far out on the ocean a brilliant flash of sun
Glanced from golden hulls; from the middle one,
A golden mast with yellow sail canted at a jaunty angle.
From another the legs of some of her crew did dangle.

A sleek seaworthy time-tested trimaran was she,
Skimming the sun-dappled waves like golden dolphins three.
At first few noticed the elegant ship's approach;
After all the harbor a great many and much bigger did boast.

But nimbly she wove, through and between, eventually to arrive
Right under the bow of the humongous Derive.
Her crew and captain were rugged, strong and lean as wires.
In some other tale perhaps, they might pass as miners.

"Many a thousand mile we've come to see this big pile o' ship.
I'm Captain Goldheart. Excuse me, *BAU-URR-I-I-P-P*!
But your claim to be the best we most emphatically doubt.
We're throwing down the gauntlet. Calling you out.

We've seen a few rough times, but no race we've ever lost.
I don't care how huge, how powerful or how much you cost.
Goldwing here's a four-nine ship with a mighty fine crew,
And we're just itching to trounce the likes of you!"

The multitude was bemused by Goldheart's rash bravado.
Something about the depth of passion in his voice was odd, though.
Perplexed, confused, they wondered at some hoax;
"Maybe it's someone's strange idea of a joke?"

Now Goldwing wasn't a small ship compared to some,
But when nearby the tremendous Derive did she come,
Most obvious to all was the great difference in size.
Her mast not halfway to Derive's first railing did rise.

The scene certainly didn't suggest any possibility of a race.
By now some were thinking the whole thing a disgrace.
"Give us a break!" "A trimaran?" "That design's a relic."
"Pretty, yes, but... isn't it kind of barbaric?"

Then, to the utter astonishment of all,
The Captain of Derive answered the call!

"We're going abroad no matter who you are or what you say.
You may tag along if you want, only stay out of our way!
Frankly we stand to gain whether or not a race is run.
But we like good times and speculation as much as anyone.

I bring word the Board of Directors will hand to you Derive,
Should you circle the World before us, and here return alive.
Otherwise, you must give up your antiquated ship of gold,
As our trophy to display in our Ancient Exhibits hold."

Every eye went to and fro the two ships, worlds apart.
"What say you to these terms, Captain Goldheart?"
Goldheart said nothing, carefully weighing the words.
All grew hushed, expectant; only seagulls could be heard.

Then,"You've nothing we can't get, even if we wanted it, you see.
We live life to it's fullest and make our own prosperity.
I wouldn't give anything for that, much less bet," he said.
"But if that's what you think you need then that I'll accept."

A mighty cheer went up and around the World the message ran,
And one day at noon as cannon boomed the great Race began.
All kinds of boats, from skiffs to freighters of many thousand ton,
Took to sea to see them off, even to the setting sun.

Liesurely it seemed, but never forgetting the true intent,
Around the World in fair weather and foul Derive and Goldwing went.
Occasionally lesser ships to and from Derive would ply,
Changing crew and passengers, bringing fuel and supplies.

Only rarely would anyone draw alongside Goldwing,
Save to bring news, encouragment, or perhaps trade them something.
For they were resourceful, independent and industrious.
Long ago they learned what to stow for any journey perilous.

Far too long was the Race to relate here every detail
Of the contrasts and the struggles of brute force versus sail
As each sought to divine the other's strategies,
Weaknesses, strong points, capabilities.

Making the most of breeze or calm, Goldwing expressed competence,
While Derive plowed on relentlessly, heedless of wind or currents.
Neither could gain for long a truly decisive lead;
Who the victor would eventually be was impossible to read.

Smeagol(No Subject)#1235338/7/04; 09:12:03

ach!... sss... we forgot to put "To Be Continued" after the last line! The Tale isn't over yet!


Smeagolour 0.00005 ounce worth#1235348/7/04; 10:13:36

Heathen (8/7/04; 00:06:35MT - msg#: 123526)
Caradoc (8/7/04; 02:50:19MT - msg#: 123529)

sss...interessting things to ponder, Ssir "Un-goldless" Heathen (we likes the hat!), and Ssir Caradoc. We wouldn't want to carry our weight in It, for ssure... though we're thin besides!... but then, why do we have to, precious? If everyone on Earth were ssuddenly faced with choosing only those things they could take with them on the Road, Gypsy-sstyle, or protect from plunder, mosst material things would assume their true value - not very much! Land is best to own, to live on and grow food on. But Gold... that eternal Trans-former of Worth... enables us to take everything 'not needed jusst now'... even Land... on the Road in our pocketses... so that we can travel light... go anywhere in the World... trade It for what we need to sset up to make a living... trade that back for It should the time come to move on... thiss is an ideal and admittedly ssimplisstic view, yess. If It was truly valued ("marked to market") it would require very little of It to ssatisfy.

sss... on the other hand, nassty tricksy Fiat-paper enables ssome to accumulate far more of everything than is needed to live reasonably while others tread the mill, and devalues work and life, and shifts great Power to the detriment of many... for after all, it is only a control-mechanism, to bring as many as possible under the Leash of the lazy and greedy.


HeathenRoses for Sir smeagol#1235358/7/04; 12:48:56

Ye are the Pan that
Lights the mind afire--coldly
This Wind Of May past Lammas.

HeathenBathing with a Midas#1235368/7/04; 13:46:48

From a quick glance at Robert Graves' essay about Midas it easy to conclude what we have here is a cautionary tale about greed fashioned in the old standby 'be careful what you wish for' motif. Having earned a reward from Dionysus(Pan) Midas wishes that all he touches will turn to Gold. Of course he soon realizes he cannot eat, nor drink and that his wish fullfilled has so distanced himself from a balanced relationship with the material world that he is near death. In a fashion he has exceeded his 'carrying capacity' for Gold and is dying from the greed that got him into this mess. Simple enough, but as with so many old, threadbare and overworked Myths, be they Green or Gold, the obvious is not where to look for a Find, the tailings are. At the end of this episode in Midas's life, later he gets Ass Ears!, ever kind and sweet Dionysus gives our friend Midas the cure to this shiney fingered curse; go visit the source of the river Pactolus, near Mount Tmolos, and there WASH yourself. So Midas does this, is instantly cured, and, of course, the sands of the river Pactolas are left bright with Gold. Graves does not relate to us what the first thing that Midas GRABS onto after the curse lifts, but I know what I'd go for.

Anyways, we can gleen a couple nuggets from this tale about the end of Midas' WANT. First, that acute systemic toxic estrangement caused by avarice CAN be cured. Second, that the LEAVINGS of this 'de-tox' remain for others to FIND and make use of for their own good or otherwise.

We live amidst the ' Body Economics' very own symptoms of acute systemic disconnect vis-a-vis greed right now. So my question to you then, Good Knights of August, is:

Where will the Central Banks WASH their hands?

HeathenHaiku faux pas Annataywa#1235378/7/04; 14:12:35

Sssciiiiooooshi too many sssslammasybles-a rose with thorns. Look forward to part 3 Sir Smeagol.
Buongiorno!Socko!#1235388/7/04; 15:40:27

Ssssocko! Sir Smeagol!
Wind and Sail meet Gaudy Power....
Shades of "John Henry"!

We are all so lucky to have creative genius such as Slingshot and Smeagol to lighten the load of learning. And great minds of MK, BB, Misetich, Waverider and others to help keep our focus.

Gold Fella What if you're wrong?#1235398/7/04; 19:01:15

Hello, this is my first time posting a message here. I may repost the same question during the week just because there are probably alot of members that may not visit USAGold on weekends. Ok, here it goes. I have been a reader of this forum for probably 6 months now. I read it pretty much every day. I read many other gold sites as well. This one seems to have a much different philosophy than the others. In fact it is nothing like the others. This board seems intelectually superior to me. I have also read most, if not all of the posts of (Another). It's almost like reading something like the bible. Except it makes sense. And almost seems to be coming true. But, do any of you ever have the fear that maybe gold is in an awesome bull market and that it may reach perhaps $2000 or maybe even $3000 in which time it would be a great time to sell and then the price could drop again as it did when it reached $850 the last time and then possibly go through another 20 year bear market. Because it seems to me that the regulars that post here are never going to sell because one day the true value of gold versus oil will break through and then we could be looking at something more like 20,000-$30,000 and oz. Well if you so strongly believe,(and hey it makes sense to me), do you ever fear losing a great profit by selling near a possible top of perhaps $3000oz. That would be a great profit. Imagine if gold went down to $250 again for twenty years after hitting $3000 and not selling. On the other hand I would be so bummed if I sold at around $3000 out of this fear and then held my $3000 of possibly worthless paper as gold continued up to $30,000.
Please don't take this wrong because I want to believe in the philosophies of another and others here but I think that even to the full on believers in this gold bull market some of the ideas expressed here as far as value may be considered to be of the wacko variety. Like I side I kind of believe the stuff I have read here. It's just an internal struggle.
Another question. I get the feeling that most of the regular hardcore (another) type believers would probably not own any stocks, probably not even any gold stocks. Am I wrong about this or do you only have a certain percentage in gold and the rest in stocks or as in my case I have a 401K which I a have discontinued investing in, in order for me to divert the money I would be putting into the fund, instead into physical. My 401K has been taken out of stocks for a few months now, waiting in the money market until it seems that there is value in stocks again, if that day ever arrives. I wish I could take out at least 1/3 of what I have for my retirement and buy physical gold but I am trapped in the system by the regulations. You see I only discovered the idea of gold within the past year. Well anyway I have been babbling on long enough for my first post. I hope some have taken the time to read and hopefully I will get alot of responses because although I have been reading everyday for as I said aroung 6 months you people still remain sort of a mystery to me.

ArcticfoxAll is not well, Mr. Greenspan...#1235408/7/04; 19:58:52


The bottom line of today's column is that the US economic recovery certainly does not appear to be broad-based, or sustainable, and that far from being robust, the US economy seems precarious.

Heathen@ Gold Fella#1235418/7/04; 20:26:02

In the absence of the Heavyweight Sirs I will weigh in and tell you how I grapled with the same questions. I hope the more experienced here will follow.

If you ask your Gold to do two things at once, it's not impossible, it's just more likely to get confusing which it is doing when. So, on one hand, you want your Gold to be like a tool- waiting patiently for you if you NEED it but otherwise resting safely in storage and not rusting away. On the other hand, you might want your Gold to be like a vegetable plant that with timely stewardship will yield a crop but picked too soon or late could spoil before use.

I found some peace of mind in thinking of the bulk of mine as a tool- it will be there when I need it as sharp as I left it and as pointed as the times require; in step at 30k or 30$ an ounce. And a much smaller part as a planting that could be used to benefit from growth within season. But my circumstances are such that I feel safer holding what little I've got than risking for more; everyone is different. Luckily Gold remains the same.

Nice to meet you . . .have a good weekend.

TopazOil/DX.#1235428/7/04; 20:42:59

...and a warm welcome Gold Fella, "YOUR" Gold doesn't NEED a Dollar (Euro or whatever) to tell you it's value ... that's something you decide for yourself.

Our Oil/DX ratio now finds DX lagging by 6 after the Bond rally on Fri and Bonds must keep up the pressure (falling Yields) if they're to maintain a $Oil Standard. If not maybe Anothers "pinch of Gold in Oil settlement" may yet come to fruition.

Golden LionheartGold Fella - What if you are wrong?#1235438/7/04; 22:22:09

A great post and welcome to the Forum.
I do not expect you will get many rep;ies from the diehard "buy gold and keep it forever brigade". I have on a couple of occasions posed the question "what strategy do you have for selling" but no has deigned to reply.

I have a friend who bought gold at about $800/oz during the last great bull market. He still has it and it preys on his mind constantly that it is worth half the price that he paid for it. Surely everyone must have a point at which they will say I am going to convert the yellow metal to some currency (shock horror!)of their choice.

As surely as night follows day the bull market in gold will one day become a bear market. Maybe $500 will be the peak, or perhaps $3000. Gold then will drop in price sometimes slowly sometimes quickly. In between there will be bear market rallies but that is all they will be, rallies. This will give false hopes to some and they will buy again only to see the price go lower. In life to protect ones capital is one of the most important things one can do.

Talk like this seems to be treated as a heresy on this Forum
by otherwise very intelligent people who seem to have their heads in the sand when it comes to the consideration that one day it would be sensible to sell some or all of their gold.

I think you are right regarding gold company shares as well. They seem to be a big no no. I am in favour of certain gold mining shares. If gold goes up 50% many of these shares go up 200%. Can that be bad? Of course you have to sell tham and get that horrible "fiat" green stuff.

I will soon be eighty years old and have been there and seen the gold cycles and I am perplexed by the buy and hold mentality that prevails on this Forum.

It cannot matter(finacially) to our gracious host USA Gold
if gold is going up or down, they, like stockbrokers make money either way providing they have turnover. Of course a bull market is a much more fun environment to do business in than a bear market.

Perhaps some of the learned and respected senior posters will give us their thoughts on this subject but I doubt it.

Off to the Pub!

SmeagolWelcome, Ssir Gold Fella#1235448/7/04; 22:46:25

(taking off the Smeagol mask for a moment)

Thanks, Sir Gold Fella, for choosing to step up to the Table and add your voice! I hope you continue. I am a recent poster here also, and I don't consider myself a 'heavy-hitter', either.

I myself am skeptical (though hopeful) about just how the Another thing is going to work out, but then again I'm skeptical of everything. There are no guarantees in the politically-charged environment prevalent today. Generally I find 'information' in general is mostly worthless ore, maybe with a gem or nugget or two of real knowledge that I extract and test and file away for future reference. The rest, most of which is belief, goes into the 'Wait and See' file in my head for further processing as more data comes in. Some things I may never have enough information about to render a final decision on before I step into the Light. Until then, I try to stick to facts and things that actually work. I don't invest in stocks or anything else; I'm just not the gambling type. Gold, or silver, or anything else material, has a value. Sometimes I can sell some material item and make a 'profit' on it or 'break even', in which case I still made a 'profit' in yhe form of the use I had of it during the time it was under my control. Sometimes I lose, too. I have learned that things don't go up or down in price; they pretty much stay the same BUT, the amounts of paper notes required to buy them DO change! It would be spinning your wheels to sell gold at $3000, or $30000, or $30 if the amount of paper notes required to buy the object of your desire has also gone up or down in the same proportion. I have chosen to preserve wealth by exchanging some of these volatile paper notes for physical. Now I don't have to worry about that section of my net worth becoming valueless, as the notes certainly will someday (and it's not looking good for them right now).

On the other hand, if as Another writes, we are on the cusp of a sea-change in the relation of Gold, that wealth-hold from time immemorial, to the economic structures of the world, that is a horse of an entirely different color, and it may be that those who hold Gold on both sides of that equation will come out 'ahead'. I see the potential for that, but it is really icing on the cake as far as I am concerned. No matter where Gold goes, if you have some you can't go wrong, but I don't necessarily expect things to happen the way I'd LIKE or WANT to see them happen, with the entire planet involved in the momentous Gold-Oil-Debt-Politics struggle at hand! Yikes!


SmeagolTo ssell or not to ssell#1235458/7/04; 23:33:25

Well, Ssir Golden Lionheart, here at leasst, for your worthy consideration we lays out our two-part sselling sstrategy:

Number One... what little Precious we has we considers 'deep sstorage ssavings' and as 'wealth of lasst resort' to be traded for Fiat-paper only in dire circumstances or emergencies.

Number Two... ssituations may arise, from time to time, where we may ssell a bit here and there, if things are favorable... sso far, we have not sseen ssuch occur... sss...for instance, should land prices fall through the floor as a real-estate bubble pops, while It goes ssky-high at the ssame time, we would very likely ssell ssome of It, to buy ssome Land.

We traded some of It once... to a friend for an item... to try the experience of actually trading It for ssomething without Fiat-paper involved... sss... now he sstill has It, and It is worth far more than the item, which has depreciated, which It never does, but we only half-rue the trade... we chalked it up to experience...


Golden LionheartThank you Ssssir Ssssmeagol#1235468/7/04; 23:44:55

Thanks for the reply and the sense in what you say but I find it hard to believe that gold does not depreciate at times.
I enjoy your posts.

SmeagolAch, that blessed Hind-ssight!#1235478/8/04; 00:42:41

sss...we invessted ten thousand hard-earned Fiat-notes once, we did (carefully considered, too, precious), in the business of a friend, and it did well... then, sss... due to outside forces, things changed... and we ended up losing it all... when you invest you place your wealth in things not under your control...ach!... the attraction of future profit, in our case...sss... proved false as the tricksy-lights in the Dead Marshes. At leasst, Ssir Lionheart, your friend would get half his Fiat back!

Stocks, even Gold stocks, can increase in price... so can physical Gold.
Stocks, even Gold stocks, can decrease in price... so can physical Gold.
Stocks, even Gold stocks, can become worthless... while physical Gold cannot.

There will always be 'winners' and 'losers', in hind-ssight... but in days of old there were no bonds or sstocks or fiat currencies... sss... call us barbaric, but we didn't need them then, and we really don't need them today.

Jusst our opinion, of course... we DO however, wish you, and all others here, success in ALL of your invesst-ments and endeavors, and we enjoy your Possts also - the raising of hard Quesstions is always good... it keeps everyone on their toeses... we need that here... and we learn.


GoldendomeGolden Fella: More flotsam on your sea of questions.#1235488/8/04; 01:09:36

Gold Fella: Some 401k programs offer a precious metals fund within their mix. If it does, some of their assets are usually held as bullion. The metals stocks though volatile--when played with-- are bought low on pull backs and sold higher, by the astute members on this forum--every time-always! Just paper plays, to gain more free currency to drop into physical.

Personally, I rotate in my 401K strictly between short term money market funds, and the precious metals fund; adjusting the mix as the metals prices ebb or flow. [We need to be watchful of money markets from what we are told; they may contain hazardous short term debt of supposedly safe, GSE's (Government Secured entities) whose security may be tested at some time in the future, particularly in a dollar crisis.]

Otherwise, I buy--and buy--and buy more physical on the outside--(both Au and Ag)--as the prices, deals, or mood dictates; **this is an alternative savings plan away from depreciating paper savings.** When would I sell? Probably at any time if I really needed the currency for an emergency (though I can't imagine what it would be!) Otherwise, probably not until I saw something that I cared to make the conversion to buy (if conversion is necessary.)

Absolute dollar amount to sell at: who can say for certainty? Numbers get thrown out just like books on stock market prices back in the "90's (who can forget "Dow 36,000"?) Right now, I think most of us would just like to see some progressively higher highs, with a little shorter pullbacks that allow us to accumulate again, at prices that we thought might be gone forever!
Again personally, I see the old high $800/oz. as a bench mark reached before, and therefore; certainly do-able again. Cheers--and happy accumulating!

Golden LionheartFiat currencies........#1235498/8/04; 02:05:51

Maybe I am a bit thick (my wife says I am!)but I really do not understand the expression "fiat currency". I went to my dictionary and for fiat it says authorization, decree, order from the Latin "let it be done".

Ssssir Ssssmeagol you say we really don't need bonds or stocks or fiat currencies. Perhaps we do not really need oil and can go back to riding a donkey, and we could hunt and cloth ourselves with annimal skins. Probably no need then for gold either.

Regarding gold stocks, certainly they can and do go down (I have invested in many that became completly worthless) but
even an old fellow like me can use stop loss orders. I only invest in strong bull markets where to use a cliche "the trend is your friend". I closely monitor my shares and am in and out of positions when they are most favourable. Holding gold recently and watching it drop from $428 to $380 was worrying. Normally I would have sold at $420 and rebought at $390. I certainly think everyone should own some lumps of gold even if only for the wonderful feeling it gives you when you hold it in you hand and see the glint it gives off. There is nothing else like it.

Back to the tell my friend that he is fortunate that he can still receive half the money for his gold that he paid for it all those years ago. Think I am living dangerously!

SteveHGold Fella#1235508/8/04; 03:52:54

Nice honest post.

I have seen people invest in gold penny stocks at $.10 a share and have it go to $1.20 a share. I have seen those same people buy it on the way up and then get to the $1.20 and believe it will go to $10.00. We are talking around 10,000 to 200,000 shares here.

Emotion and logic are two different animals in this scenario. Emotion tells the person to hang on for the ride, logic tells them to sell, sell, sell and lock in a profit.

When emotion rules, money is mostly lost or mismanaged. When logic rules, money is made but opportunity is sometimes lost (if it did go to $10.00).

From what I have read (not done), those who made money in the example, were those who believed in the initial investment and as long as the reason for investing in that stock remained intact, the idea of accumlating won. When the reason to own it vanished or diminished, they would sell of some or all their shares.

One guru in such small-cap gold stocks said his theory was to own a hold position (core) and a trade position. I think his thought was to buy and sell the trade position based on technical indicators and to hold his core position as long as the "story" remained intact. As the stock doubled, he would sell 1/2 of his core, until he rode the wave as long as he thought it would last but to alway hold about 10% or so of his original core, in case the stock went to the moon (remember BREX?). That way he would always have a little bit to placate that emotional side that said, let it ride.

So, to use that theory on your "what if gold hits $3,000 per ounce?" question, by the time gold hit $3,000/ounce you will have 1)assessed the "gold story" that brought you to gold in the first place and 2) locked in some profits on the way up. The amount of the lock in would have depended on the strength of the story and many other factors, but clearly one can not be admonished for having sold 80% of the gold on the way up to $3000, for let no one ever say it was bad to have made a profit -- even if in hindsight you didn't make as much as you could have had you sold none on the way up.

As best as I can tell, the gold "bull" story is so intact at this point that the reason to sell has not even begun to approach any loss of credibility. What you see on some gold sites about people selling and buying positions are people who are using their "trade" positions to make money on technicals (channel theory). These people would be fools if they did this with their core positions because gold's rise, imo, will be meteroic and will leave any non-holders out of the big rise, when it does happen. Thus, if one agrees with that, the core position and trade position practice of that gold guru, makes sense not only for penny gold stocks, but also for gold too.

The story remains intact and there is lots of volatility for the trade position. The question will become what one does when gold hits $500, then again $1000, $2000, $4000, etc? At $500, gold will have almost doubled for some long term holders (but not those real-long-term holders that bought and held at $800 from the late 70's). At $1000, many non-believers will be taking notice but won't even have acted because they will think it will go back down and won't start to think about buying yet.

So, the gold bull has the potential to get real legs and go to $2,000 before the momementum buyers really start the train moving. But by then, the guru who has a core position will already have sold 50% of his core, but still have some to ride further, should gold rise. And should it fall back to $300, he locked in on some profits and is protected from not having sold when gold was at its peak.

The real problem in this scenario is that if one subscribes to the "gold is managed by Central Banks" theory, for gold to hit $2000 the reason for the banks to have held it back will have to have been lifted or diminished. So, one must analyze why gold has been managed to determine when or why gold might go up. The reason it would go up, of course, would because the Central Banks either wanted it to, or could not control it with whatever tools they were controlling it with now.

I believe many here have their own theories about the tools and reasons of CB price controls on gold. But when these tools no longer work or the CB's want the price to rise, it will, leaving many "late-to-game" potential investors behind. I won't pretend to know why CB's do what they do, just that evidence indicates that they do. There a plenty of people here much smarter than I who can tell us what the reasons are and when they will turn in favor of gold, but that is a discussion for another day.

In the meantime, we can at least appreciate the gentleman who must have learned his practice of "a core and trade position and sell half on a double" theory from many years of trading experience of both losses and gains to reinforce his own theories.

slingshotWelcome, Gold Fella.#1235518/8/04; 07:26:29

If you could figure out, How Goldbugs Think, we would know the answers to the Gold Market Mannipulation. Both requiring complex explanations that just does not seem to fully answer our questions or should it be our expectations.
To hold or to sell, that is the question. Would it be better to sell at $3000 or $30,000. Something sounds familiar here ;0). Would it matter if it does go to $30,000? A car purchased in 1972 was about $3000US. Today a car with the same features is about $30,000US. Older Knights have seen the increase in price but the younger people have not and accept it. This is fine as the illusion of accepted price does not go paraballic to the stratosphere. They will complain of gasoline going up 10 cents while the grocery bill goes up 10 dollars.
I assume that in the end the only thing that matters is when you entered the gold market and that you feel comfortable with your choice. The decision to sell,at least for this Goldbug, will be for need. The price will have consideration but the need to sell will be the deciding factor. I plan to hold a core to pass on to family.
I am not into stocks. I have none. It goes against the grain for I feel it helps to extend the Paper Game for PMs.
Welcome again, Sir Gold Fella.
Looking forward to your posts.


SmeagolThe Rhyme of the Ancient Gold-Mariner, continued#1235528/8/04; 09:38:33

Thus had they come to the most dangerous part,
The last but not the least leg of many since the start.
Ahead lay the treacherous Horn which they must round,
Then they would be homeward bound.

It had been noticed with not a little concern,
A severe storm unpredicted was brewing astern.
On all ships barometers were falling rapidly;
Dangerous weather would be upon them presently.

The wind came up hard and Goldwing made time,
Leaping easily past Derive, leaving her far behind.
For the first time some aboard Derive felt a bit seasick,
While those on Goldwing exulted in adrenaline's kick.

But like Derive the storm itself was unlike any other before.
Therefore no one really knew what it held in store.
And as the winds rose fiercer in its darkening gloom,
Goldwing's crew must trim sail and therein lay her doom.

Helpful wind had become a threat and the current only mocked -
From behind in driving rain came Derive like a juggernaut!

"Captain, it's a big storm, looks like a bad one too.
It's different than any I've ever seen before, have you?"
With easy confidence Derive's Captain reassured,
"Yes, but it matters not; by highest-rated paper we're insured."

"She's a big storm, Cap'n, an' a real blower, too.
Different, colder than any I've ever felt before, have you?"
"That's 'cause she's a perfect one." Goldheart said. "Let 'er come!"
Secure every kilogram of ballast. Pass 'round this rum."

And so it was in shrieking gale in the worst possible strait
That they went neck and neck round the Horn, there to meet their fate.
For there instead of open water an icy wall towered high;
Massive storm-carved battlements raked the ragged sky.

On Derive the sirens wailed
As her watchmen loudly hailed,


On Derive a passenger uneasily said,
"It sounds a bit worrisome, this Debt".
"Au contraire," said the waiter, "There is no need to be alarmed.
It happens all the time. Would you like your coffee warmed?"

For indeed Derive in ponderous majesty
Always rode the sea in aloof supremacy.
Aside from her impervious hull small bergs were haughtily cast,
While titanic ones with a shuddering boom were spectacularly smashed.

Indeed it had become tradition to save a souvenir
To float in a drink or ice down some beer.
In fair weather the spectacle was a popular hit;
In conditions like this none would be bothered to see it.

On Goldwing an uneasy crewman said,
"It could be the end of us, this Debt.
We're berg-side of Derive and toward it the current's driving us.
We might avoid her but not that colossus!"

Captain Goldheart considered, then wryly shook his head.
"Looks like we'll have to one-up them both instead.
The wind's across the current seventy-nine degrees."
And he charted a course for all of them to see.

Low murmurs of "That's insane!","It's suicide!".
"I'M the Captain and I'LL decide!"
bellowed Goldheart, eyes flashing under his brow.
"Trust me nevermore but trust me now!

We've all been through many a nasty blow together.
This one's a doozy but that don't mean we can't win 'er.
Just do as I say, lash you down, raise spinnaker and bide,
And get yourselves ready for one HELLUVA ride!"

In failing light and lashing rain the orders were obeyed,
While Goldwing's crew (and her captain) silently prayed.
Wet lines snapped taut singing, slipped in white-knuckled hands;
Overstressed canvas nearly ripped from its bands.

Like a golden stone from some legendary giant's sling,
Across the spindrift-blowing breakers Goldwing shot skipping.
Right into the harrowing rapidly narrowing slot she was swept,
Between imperious Derive and importunate Debt!

Through roaring twilight's last fading
Thundered the crunching shrieking grinding
Of many dreams and hopes, of life's fortunes imagined and real,
Shredding on ice that would not yield.

{To Be Continued}

Heathen@ Golden Lionheart fiat question.#1235538/8/04; 09:52:05

Sir Lionheart-

Have you had a chance to read in The Hall of Fame?
Fiat currency is well explained in here;

In my simplistic view the ABUSE(which is an almost forgone conclusion-it seems to always happen eventually-maybe it is an inherent mechanism of Fiat in the first place) of Fiat currency is a lot like writing checks on an account with insufficient funds, it can be done, kinda tricky, and usually in the end it tumbles down and they bounce. Except the check writers are not the one's who pay the bounce fees and make the deposits-we are.

But Ari, Another and FOA and several others do just a GREAT job of explicating and the read is well worth it.

As for your pub dwelling friend- well loosing a big chunk of one's investments sucks, but he DOES still have some value left which IS better than nothing. Maybe less time in the pub and he would see his glass as half full not half empty ; - )

R PowellGold Fella // Golden Lionheart#1235548/8/04; 09:59:58

Gold Fella, good question! May I suggest that your question of when to sell can be applied to any investment...stocks, bonds, options, real estate, physical commodities...and is not specific, by any means, to gold.

Perhaps the question that needs to be determined is whether you buy physical gold as an investment or as personal property which may or may not be sold depending upon personal preferences and circumstances.

FWIW, my small collection of silver was not bought as an investment and is not (now) for sale. But leveraged investments which I trade are always bought and/or sold solely with the intention of monetary profit.

Golden Lionheart: I agree with the insurance concept of physical gold ownership. I also participate in the capitalistic venture of assuming risk through investment,
innately necessary to our capitalistic system. I trade futures and options on the same, without which our whole business system would not function.
I see no disparity or conflict in holding physical gold for the many, often repeated, and valid reasons listed here. I also see nothing wrong in viewing gold as a commodity to be bought and sold as such for profit. Come to think of it, I believe that's exactly the nature of the business of any gold broker. And, speaking of gold brokers, I have bought silver from USAGold and can highly recommend them....good, frinedly and prompt service.
Gold, paper and physical...

HeathenThanks again Sir Smeagol#1235558/8/04; 10:01:20

I won't butcher another innocent Haiku waiting patiently for the next verse from you, nonethless, your Epic is spellbinding.
SmeagolThey're ALL good, Ssir Heathen!#1235568/8/04; 10:30:48

sss... mangled or not, it's better than if they were never ssaid at all! (grin)... we're sure that ssome of ours would make the Hai-Ku Massters cringe!


slingshotSir Smeagol#1235578/8/04; 11:03:50

It has been a long time since I felt salt spray and watched the sea rise.
Bring Her Home, Sir Smeagol.
Bring Her Home.

CometoseHamilton @ GE#1235588/8/04; 11:59:29

Adam is talking about silver today ......has bullish interpretation looking at the chart of Silver and his Relative Silver index. I think he's onto something here.
phil288Sir Gold Fella#1235598/8/04; 12:45:47

Historically, over the last 80 years or so, one could ride out a bear market in stocks by owning gold shares or bullion or hard assets generally until the bear had done its worst and then sell the shares or assets and buy back into the industrial share market at single digit p/e's and yields north of 6%.
This time around the problem is that Puplava's perfect storm may in fact be our future and maybe this time the bear market will be longer and more pevasive than ever. If the dollar really looses its reserve status, and if oil supplies world wide are peaking, as many of us believe, then the future for U.S. investments and for world economies may be bleaker than anyone cares to contemplate. We will be entering a time of instability, wars, fammine and economic depression that may last for a generation or two or longer. The U.S. with the highest standard of living and the most debt to others will suffer more than most. Our population and that of the world are likely to decline, perhaps drastically. Gold ownership is one way to somewhat isolate your investments from this cataclismic potential, at least you will have an asset in a form that is not dependent on sovereign power to give it value around the world. Your gold may be useful to you or to someone else down the road, but rest assured it will always be useful. What other asset, other than family and friends, will be as sure to cross the transition to what lies ahead?
Should times improve, should rediculously low prices / PE's prevail in a sentimentally crushed stock market; chances are the dollar system, if it is still around, will value your gold much higher than it does now. At that time you can sell some of your gold asset to willing buyers (there are always buyers at tops) and go back into stocks or bonds at far more reasonable prices and yields.
Gold is a lifeboat and a transition instrument to carry you through the unknown waters which lie ahead. Gold is as safe and wise as anything and better than all other monies in the long run. You or your children or your children's children will know when to sell. After what we are about to experience you will never sell it all.
I speculate in stocks as well as invest in gold bullion, but the stocks are just a means to acquire more bullion. When the SHTF it will be too late to profit from the stocks as only the bullion will survive in my opinion. Our hosts are great folk to deal with, they can help fill in the blanks. I don't post much, I just watch Lady Waverider and suck up the gold.
Got Gold - Thanks.

Golden LionheartGems of wisdom or??#1235608/8/04; 18:23:49

I don't suppose many of the posters on this Forum hold Steven Jon Kaplan in great esteem but he does pose some interesting theories at times.

In his most recent update such gems as why goldbugs should re-elect Geo W Bush and "golds rally has been almost entirely due to the decline in the US$"

Here in Austrlaia the price of gold in A$ terms is little different with gold at US400 than it was when gold was at US$300. Kaplan says the gold price has basically been almost flat in most major world currencies.

I am hesitant to congratulate my friend whose gold bought in the 1980's has lost almost half its value that his investment was a good one. He is a big fella!

FlaccusGolden Lionheart#1235618/8/04; 19:05:42

Is your friend (who lost money in gold) Australian or American? Was his investment in gold in Aussie dollars or the U.S. variety? If Aussie, could you tell us what the average price of gold was in Australian in the 1980s? In Aussie dollars that is. And where did he buy precisely? Was it at $800 U.S.? And what it is now?

Just trolling around for some answers. It's all relative as they say.

By the way are you Australian? Sounds like you are.

FlaccusGolden Lionheart#1235628/8/04; 19:12:21

I have another question.

Why didn't he buy in the 1970s? Why did he wait for the 1980s? Is he a trend player? Sounds like he is. Those who knew what was going on bought in the early 1970s, not the early 1980s.

DryWasherWhat if we are wrong?#1235638/8/04; 19:39:57

@ Sir Gold Fella (msg#: 123539)

First let me welcome you to the forum and congratulate you on a very thoughtful first post, and also all those who have replied to your post with such thoughtful answers as well.

By the diversity of replies you are receiving I think you can see that some of us will most certainly be wrong about what the future of Gold ownership, will bring, simply because we are not all of a like mind on what that future will be, although we do share a strong common interest in Gold ownership.

As for myself I am more of a saver rather than an investor, and my natural inclination is to bury my money in a tin can in the backyard in preparation for the proverbial rainy day and just leave it there. I do however recognize that the inflation termites would devour the purchasing power of that money even if the real live termites didn't eat the paper money when the can rusted out.

If I were to bury Gold in that can, rather than paper money, it would be safe from the termites and, based on 5000 years of history, it will retain a large part of it's purchasing power. Yes, that purchasing power might be less, or greater, than when I buried it at some time in the future and I accept that potential risk or gain as part of life.

In contrast, paper investments do have the potential for great gain, or total loss, and only you can determine if, or how much, you should place in Gold. I think you will find reading this forum will help you make that decision.


Dollar Bill*>*#1235648/8/04; 19:40:11

golden lionhart, I cant figure out a basis for some of kaplans guesses about the future. He really cant measure up to the thinking I have seen here. Not that he is dumb!
You can only make your guesses based on the factors you base them on. If you are not includeing all factors, and if you are missing giant trends that are running quietly under the surface, your guesses suffer and are not helpful. I think kaplan suffers from both.

Dollar Bill.,.#1235658/8/04; 20:24:11

gold fella, =Another= could update himself and he would probably say that the titanic battle between the euro and the dollar is over with the dollar winning. Barring me alkida action that really seriously hurts the us. Or a supervolcano in yosemite or some other catastrophic blow suffered by the us.
The real arguement is can the central bankers find thier way to a new global model that can survive all the challenges presented by a globes worth of wants and needs.
Human nature is just incredibly difficult to manage, as you can see by looking around your own house if you live with others, or your neighbors house next door, ect.
As the central bankers and govts march to a new order, and the word gradually leaks out that previous rules are in flux and changeing, and in this new model, infinite debt is allowed the US as the core member of the new united states of earth, and as a global rain of controlled money, managed by central bank agreements, leads to more and more govt controlled economies..................ect............
I think we will not make this transition, and we will find ourselves in so much Murphys Law, that we will end up in a multipolar world, and that will set gold free.
The "ect" leaves out a lot of speculative details, but my fundamental reason for believing that us humans will falter and fail at this grand (secret) attempt, is that I dont think the Klingons, or the Jedi's got a planet all unified on the first attempt.............just kidding, I think god is not into it. My guess is that god likes local economies and local govt control and that this era of advancement is not meant to just go forward into the global one order control mode that the central bankers are taking us to just because they cannot stand to go back to the gold system, and the only way to do fiat without to construct a global infinite debt/money rain/controlled economy/one world govt/ect.
Another reason I think this effort is doomed, is because the US media is ruleing the culture evolution, and if I was god...................I would decide that they were not worthy..............and would definately NOT get the chance to continue to influence the whole world since they are so destructive in thier tendencies.............and since those that do not belive in god are very much in the acendency in the culture.

Face it, there is a huge movement to get people to join the ranks of those the think god is just some nice loving god who hardly has a preference of his own. The same movement is pushing the idea that we can all perfect ourselves is we just BEHAVE and AGREE to let others do what they want without us judgeing. They sure dont think there is a devil, and they sure have god marginalized!
I would say that movement is sort of doing a happy dance in front of a tiger, hopeing it will --catch the vibe-- and not eat them. Or more accurately, not thinking the tiger is even there!
Ah the folly of us humans. Not seeing the reality of god and his devil. That is the greatest trick of the devil actually, getting us to think he doesnt exist. It is just you and your behaviour issues you have to manage.......or you can hire oprah or phil to educate you till you have it all solved.
Ha ha, ask any kid playing playstation games......hey about pretending that one of the enemies on your game isnt there? Try playing and winning while ignoreing the biggest enemy........The kid will ignore YOU!

So, anyway, whatever or however Another would deal with all this.............or can he even see it............or am I hallucinating from the chocolate...............but bottom line gold fella..............I think we have reasons to have gold.

Golden LionheartFlaccus - Buying gold in the 70's#1235668/8/04; 20:46:04

Yep proud to be Australian (Land of the Free!). I phoned my mate to pose the question why he bought gold at nearly $800. He says he was a complete mug but at that time he was getting info from such sources as the Aden Sisters who were forecasting gold to go to $2000-3000 (no wonder they went to live in Central America!). Also another guru Howard Ruff who between producing children was telling a similar story. He believed. A lesson for all of us.

BTW a mildly interesting fact from downunder. A local guru Ray Evans of Comshare was until the beginning of this year forecasting gold to hit a peak of I think it was $435. Then he suddenly changed his prediction to that it will go to between $1400 and 1769. Myself I only trust my simple point and figure charts that I update daily. At the moment they are telling me to expect a major increase in the gold price on the horizon. When? Don't know.


SundeckChina in Africa: All Trade, With No Political Baggage#1235678/8/04; 20:52:31

"Forty African countries have trade agreements with China now," said the official, Li Xiaobing, deputy director of the West Asian and African Affairs division of the Trade Ministry. "We are doing a railway project in Nigeria, a Sheraton hotel in Algeria and a mobile telephone network in Tunisia. We are all over Africa now."

For any doubters, a glance at the statistics indicates that the official's exultation is, if anything, understated. Though starting from a modest base, China's trade with the African continent reached $18.5 billion in 2003, an increase of 50 percent since 2000, and it is on track for another big increase this year.

China's push into Africa is all the more remarkable because it comes when that continent has become the virtual stepchild of the international trade system, a mere footnote - or worse, simply unmentioned in discussions of global commerce.

Beijing's fast-rising involvement with Africa grows out of China's immense and growing need for natural resources, in particular for imported oil, of which 25 percent now comes from Africa.


Gabon ranks high in China's sights for one obvious reason: it is a longstanding oil exporter open to new investments in its petroleum industry.


Elsewhere on the continent, China has become a vitally important partner of Africa's largest country, Sudan, at a time when the government there, a perennial abuser of human rights, has been accused by international rights groups and the United States Congress of organizing genocide.

"We started with Sudan from scratch," boasted the trade official, Mr. Li. "When we started there, they were an oil importer, and now they are an oil exporter. We've built refineries, pipelines and production."


Sundeck: General interest story for the forum...

It will be interesting to see how China's interaction with Africa unfolds in the future. There appears to be growing interest (worldwide) in Africa's oil potential - perhaps not surprisingly. No mention of gold in the article, but I wonder how much of the "50% increase since 2000" in trade may be involved with gold.

Perhaps there will be substantial improvements to some African countries through growing trade with China. China will benefit from cheap raw materials and cheap(er) labour, African nations will benefit from the insatiable demand from China as an export destination and supplier of capital.

China playing the "middleman" between poor African states and the wealthy west?


Golden LionheartSir Flaccus.........#1235688/8/04; 21:21:07

Sorry, I neglected to answer your question about the price of gold in Australia. In our dollars today it is around A$550/oz. I don't have figures from the 1980's as all my records were taken out by a house fire years ago. Yes the gold loser is an Australian and I assume he would have bought from the Perth Mint back in the 1980's.

Not off to the Pub.....too early.

Topazalt Currency Ag ...for a change.#1235698/9/04; 01:21:36

The currency "box" that is evident with Gold is all but non existent in Ag ... mind you, the currency line could be viewed as solid resistance on any move up as appears the case on the last go-round imho.
misetichCorporate Earnings Slowing#1235708/9/04; 05:33:16§ion=financial&subsection=&secondary=&tertiary=&subnav=investmgr


On a sector level, the most dramatic increases in growth rates for Q204 during the week occurred in utilities, materials, and energy. In utilities, the growth rate increased from 3% to 14%. In materials, the growth rate increased from 74% to 82%. Finally, energy improved from 56% to 60%. Consumer staples, financials, and industrials were the bottom three sectors, although all were either flat or up slightly.
Looking forward to the third quarter, analysts are still expecting solid growth, but at a more moderate pace. In Q304, earnings for the S&P 500 index are expected to grow 14.7%, down 0.1% from the 14.8% growth projection expected on July 1st
Energy and materials continue to lead revisions to the upside for the second half, while analysts have trimmed estimates in the consumer discretionary and technology sectors.

Corporate earnings (pro-forma and otherwise) is slowing. Translation= Much, much worse than reported as published corporate earnings are not reflective of earnings reported for tax purposes.

Point being, if the "massaged" corporate earnings growth for the S&P 500 in particular is slowing to single digit in 2005 - how bad is really bad?

Pundits having been pumping stocks for a while misleading investors. One of the most prominent "economists" on the tube is Larry Kudlow

Here is some amusing remarks Mr. Kudlow made in a published column in 2001 relating to oil/gold ratio



Today's barrel price for oil is $17, which looks to be just about right in terms of two economic models of oil-price behavior. First, the inflation-adjusted real price of oil has averaged $21.50 a barrel over the past decade. Real prices moved temporarily to $45 during the Persian Gulf War, and briefly fell to $10 a barrel in late 1998 during the global financial crisis that threatened world deflation and recession. The most recent spike was slightly above $30 a barrel this year, so a $17 barrel of oil averages nicely within this pattern.

Second, the monetary model of oil prices that uses the ratio between gold and oil suggests that today's $17 per barrel spot price (or current price) for West Texas crude is also just about right. Gold is a useful benchmark because its monetary purchasing power is relatively constant over long periods of time. Hence, over time, an ounce of gold should buy roughly the same number of barrels of oil. In the past decade an ounce of gold bought seventeen barrels of oil, on average. Today, with gold at $275 per ounce, a $17 barrel of oil implies 16.2 barrels per gold ounce. This is actually below the average of seventeen oil barrels per ounce of gold registered over the past ten years. Therefore, a $16 per barrel oil price would be consistent with the decade-long trend.

Gold/Oil ratio mean according to Larry is 16.2 x $400 = $648

For once Larry has it right!

All Aboard The Gold Bull Express - Part ll

USAGOLD / Centennial Precious Metals, Inc.What you need to know before you buy your first ounce of gold...#1235718/9/04; 07:01:28

Q. What makes USAGOLD / Centennial Precious Metals different from its competitors in terms of its interaction with clients?

MK. Our business philosophy allows us to take a more laid-back approach. We don't employ a room full of brokers spinning the phones day and night. We don't have multi-million dollar advertising expenses dictating what kind of advice we give clients. This is all by choice. I decided long ago that I didn't want the headaches that go with managing a large number of brokers and the support staff and facilities required. At the same time, we get hundreds of requests each month for introductory information packets. We do not make cold calls. We do not work mailing lists. We do not call people at all hours of the day or night. We do not use marketing and sales gimmicks -- leaders, bait and switch, and the rest of it. We primarily work with clients who have discovered us, like what they see, and want to form a long term relationship with a reputable and reliable gold firm.

Q. Does the "laid-back approach" limit your business?

MK. Yes and no. In the short run, "yes." In the long run, "no." We probably lose a few prospects to the aggressive companies which use hard-sell tactics but we will not be changing our client-friendly approach. We know that not every prospective investor is going to become a client of USAGOLD / Centennial. However, we know that the client who chooses us is likely to be the type of client we are accustomed to doing business with. We work with a large number of professional people and business owners -- active, retired and semi-retired. In fact, we work with clientele that span the economic spectrum and all walks of life. Getting back to how our approach sets us apart from our competitors, we get quite a few disgruntled high net worth clients who come to us after being run through the mill by some of the boiler-room operations I've referred to earlier. They are usually grateful that they found us.

Q. And finally, is there anything else you would like to share with us?

MK. Fundamentally, we believe that we are here to serve the client. Anyone who has done business with us will vouch for the courteous and professional service he or she has received. Our staff is carefully chosen and it shows. We get referrals on nearly a daily basis and are kept busy with strong repeat business. I would also like to call attention to the solid informational services offered at this website. We believe that any of our clients or visitors will find USAGOLD head and shoulders above anything else out there. I would encourage anyone attending this site to have a look around. We also publish a very handy e-mail newsletter available to prospective clients. Above and beyond that, the most important thing is the way we treat our clientele. From first inquiry through order fulfillment, we want to make the gold investing experience as pleasant and rewarding as possible. We have a large and satisfied clientele and that's the way we want to keep it.

45 SouthWhich way is up!#1235728/9/04; 07:23:16

I have been following yoursite for well over 2 years now and being from NZ & maybe being a little conservative have only now put a little away for a rainy day.I read with interest, all your comments and hope that your economy recovers sooner & stronger than some of you believe it will,as the effects on a country like New Zealand with a fragile agricultural economy will be devastating.Petrol at $1.25 a litre in NZ and according to government we are running out of natural gas about 10 to20 years earlier than expected at least there is a bit more interest in exploration now.There seems to be a few Aussie companies showing a lot of interest mining for gold according to Govt mining info even in oil.An old HUNT Petroleum site off the coast is being re surveyed, from memory i think the Hunt brothers got nailed in the US for trying to corner the silver market in the70s ,correct me if im wrong . Obviously others thought and have done similar things to pms for past 20years. China doubling oil holding capacity over next 2 years, which will double in value first oil or pms. I hope monday finds you all well as its 1.30 am tues here and thanks for all your informative postings over the last couple of years
misetichPurchase of US assets by Asian central banks comes under scrutiny#1235738/9/04; 07:23:25


awrence Summers, Harvard University President and US Treasury Secretary under ex-President Bill Clinton (news - web sites), likened the Asian purchases to hoarding of gold by European states centuries ago.

"Much has been made of US dependence on foreign energy, but the country's dependence on foreign cash is even more distressing," Summers said in the latest issue of the US magazine, Foreign Policy.

"In a real sense, the countries that hold US currency and securities in their banks also hold US prosperity in their hands," he said. "That prospect should make Americans uncomfortable."

Foreigners already hold almost 40 percent of marketable US Treasury debt. The Asian central banks have increased their holdings of US assets to about one trillion dollars, according to market estimates.

At the recent Democratic party convention that endorsed John Kerry (news - web sites) as the party's flag bearer against Republican President George W. Bush (news - web sites) in November polls, Clinton took a swipe at the Bush administration for allowing foreigners to have a potential financial lever on the US economy.

Clinton said the government was effectively "borrowing from foreign governments, mostly Japan and China" to make up for the burgeoning budget deficit, forecast to reach a record 445 billion dollars this year.

"Sure, they're competing with us for good jobs but how can we enforce our trade laws against our bankers?," he asked.

The worst part is going forward the trend of relying on the good will of others will continue as the US budget, current account and trade deficit are out of control

All Aboard The Gold Bull Express - Part ll

SmeagolThe Rhyme of the Ancient Gold-Mariner, concluded#1235748/9/04; 07:58:36

Over the howl of the wind, to the soaked and shaking crew,
Goldheart shouted "We're past them, we're through!"
Sail was hurriedly gathered and all was made fast;
No one spoke and finally Goldheart said at last,

"Though it mighta looked impossible back there,
I'd've never put you through that if it wasn't clear
She's a four-nine ship with a mighty fine crew;
It was a hard test and I'm very proud of you"

But upon the wind was borne many a terrible sound;
Somewhere out there the great Derive was going down.
There was nothing else those on Goldwing could do,
Except batten down for the night as heavy rain blew.

After setting a watch they slept fitfully
In their little golden boat on the vast heaving sea.
Yet the storm did abate some time in the night,
And they began a search by morning's dreary light.

"We can make room for a few, but no more",
Thought Goldheart, looking on the grey swell in horror.
"I wish that we could've saved them all,
Goldwing my love, but that's not our shot to call."

But no flag nor flare nor smoke was to be seen
Amid the endless rafts of flotsam drifting.
In the near distance the giant berg slowly rolled over,
Mindlessly drowning the scars of the deadly encounter.

"I see no lifeboats, and that's the worst.
How could they have been so-" and he cursed.
But he knew truly wherein the tragic blame did lie:
On belief, not knowledge, did the lost rely.

Out of the thousands lost in the wreck of the Derive,
Only two dozen were found, cold, exhausted and barely alive.
With gilded life-rings attached to sturdy lines
They were drawn to safety, one or two at a time.

Over the next several days the weather gradually cleared,
And towards home still far away they steered.
As those who had been rescued regained their strength,
They talked among themselves at length.

And as they discussed the events of recent days
They discovered that each of them, to lasting amaze,
In some pocket or other for luck or so they thought,
Along on the fateful trip a coin of gold had brought.

These they decided to give to Goldheart in gratitude,
For the selfless deeds of he and Goldwing's crew.
But he said, "Don't think we don't appreciate such a gesture fair.
Someday you may need them again; it's an uncertain world out there.

"Because you had that gold your fortune was such
That you were able to escape the worst of ruin's clutch.
Keep it, save it, and remember how it proved true
As things you thought secure slipped from under you."

In the weeks ahead they busied themselves learning sailing;
Life this close to the sea they found very different, yet satisfying.
"On this ship, like it or not, you're part of the crew,"
Goldheart grinned, "but you'll find it kinda grows on you."

Forever it seemed had passed when finally they returned
To the port whence they had started, and a long rest truly earned.
They were welcomed with fireworks, celebration and laughter,
Tempered somewhat by sobering tales of the incredible Derive disaster.

Everyone wanted to know and would hardly let them rest
Until they told them all about how they survived such a grueling test.
And finally after several days when the hubbub had died down,
Captain Goldheart boarded Goldwing and took a look around.

"Well, what's the damage, or dare I ask?",
Goldheart queried a crewman as he uncapped his flask.
"She's done us more than well, Cap'n, considering what we ask of her.
None the worse for a little wear and tear; a worthy credit to her Maker.

Some nicks here and there, a few good buffs and a scratch,
But we've lost the ball from the top of the mast."
"No surprise, that," Goldheart said as he took a swig and laughed.
"'Twas her last ten-thousandth, and it was made of brass!"

(The End)
(or, rather, a New Departure)

AristotleLarry Summers missed the boat#1235758/9/04; 08:02:23

"In a real sense, the countries that hold US currency and securities in their banks also hold US prosperity in their hands," he said. "That prospect should make Americans uncomfortable."

What he should have said: "In a real sense, the countries that hold US currency and securities in their banks merely hold US paper in their hands, conveying a dubious future purchasing power. That prospect should make these foreign countries uncomfortable."

The same is true individuals and countries alike who are holding paper instead of tangibles. Paper should be used only as a tool at the margins of your activity while you build your solid foundation of savings on tangibles. Gold is the best deal going in terms of entry price versus its revaluation potential, its convenience, portability, and its universal acceptance in markets around the world.

When you spend your money on various other tangibles, you frequently feel as though you've spent your money, period. But when you spend it on Gold, with the aid of a little perspective, you feel as if you've simply exchanged it for a better, more permanent form of purchasing power while maintaining comparable liquidity. What more could anyone reasonably ask for?

Gold. Get you some. --- Aristotle

CometoseGreenspan's Alter#1235768/9/04; 08:19:49

There's going to be a sacrifice on Greenspan's alter this week .....

He's going to offer up the Bond Market to save the
currency bacon of the US............

or he is going to offer up Currency Bacon to slow the fall of the economy and preserve the stability in the Bond Market...........where his buddies all have rather large bets placed..........

Based on Friday's action in the pits appears that some of the trader's haven't figured out who Alans buddies are ..........or perhaps FRIDAY'S chanting in the pits was all a sideshow....

This week's spectre at the Fed appears to be a momentous event in the making .......

According to Mr Sinclair , Gold's action is all in the DOLLAR.

This is going to be extremely interesting........
as another peice is added to the puzzle.

AristotleWhat a blessing upon the forum!#1235778/9/04; 08:47:10

Smeagol, you've surely got more talent in one finger than I've got in my whole being!!!

It's a masterpiece in total, but please forgive me -- I can't resist plucking out this 4-stanza assortment for special merit:

"She's a big storm, Cap'n, an' a real blower, too.
Different, colder than any I've ever felt before, have you?"
"That's 'cause she's a perfect one." Goldheart said. "Let 'er come!"
Secure every kilogram of ballast. Pass 'round this rum."

[...I like the pure swaggering confidence in drinking rum in the face of the big test...]

"Though it mighta looked impossible back there,
I'd've never put you through that if it wasn't clear
She's a four-nine ship with a mighty fine crew;
It was a hard test and I'm very proud of you"

[...More signs of confidence, and the necessary setup for the next selected stanza and especially for the brilliant punch at the very end...]

"I see no lifeboats, and that's the worst.
How could they have been so-" and he cursed.
But he knew truly wherein the tragic blame did lie:
On belief, not knowledge, did the lost rely.

[...Yes!!! The important difference between mere belief versus actual understanding...]

("Well, what's the damage, or dare I ask?",
Goldheart queried a crewman as he uncapped his flask...)

Some nicks here and there, a few good buffs and a scratch,
But we've lost the ball from the top of the mast."
"No surprise, that," Goldheart said as he took a swig and laughed.
"'Twas her last ten-thousandth, and it was made of brass!"

[I'm awed. That's just pure freakish wicked brilliant!!!!]

Gold. Get you some. --- Ari

TownCrierFed to raise rates tomorrow?#1235788/9/04; 09:00:53

The signs point yes and to a quarter percent as the Fed's NY trading dest today added $4.75 billion fresh reserves to the nation's banking system through open market operations taking the form of overnight repurchase agreements averaging 1.365 percent, serving somewhat as a policy forecast by splitting the difference between the current 1.25% FOMC directive and a potential increase tomorrow to 1.5%.


Clink!@ Ssir Ssmeagol#1235798/9/04; 09:06:40

Bravo, bravo, Sir S !
That had HOF written all over it from the first line - do I hear a second ?

Aristotle20/20 hindsight#1235808/9/04; 09:13:42

Smeagol, here's a fun thought. It would probably bungle your rhyme scheme and lose a bit of quaintness regarding the triviality of the mast-ball, but wouldn't it have been deliciously symbolic if it had rather been the *anchor* as the single .0001-thing that had fallen away during the defining contest with the Derive?!!!

Gold. Get you some. --- Ari

TownCrierClink! There's no need for further formalities...#1235818/9/04; 09:28:49

Second, third, and fourth.

Some things are so self-evident that we can dispense with protocol. That Smeagol's 'Rhyme of the Ancient Gold-Mariner' should be specially preserved in restful splendor is, I can assure you, certainly among those things.


Clink!@TC#1235828/9/04; 10:01:37

I kind of expected that, but there was no harm in making sure !!

Buongiorno!legacy#1235838/9/04; 10:05:19

"On belief, not knowledge, did the lost rely".

Benessimo!! Now, I must have this all in one place, to copy, keep, and share.

Mille Grazia, Sir Smeagol!

MKCongratulations, Smeagol#1235848/9/04; 10:34:20

Brilliantly conceived and written. Hall of Fame placement richly deserved.
CometoseGreenspan's alter#1235858/9/04; 10:40:15

I forgot to add

Tossing the election maybe lost somewhere in the business this week as well............

Gandalf the WhiteWOWSERS ! #1235868/9/04; 10:41:01

Sir Smeagol, THAT was "FUNTASTIC" !
I am now sorry that I was late in getting to the TableRound this morning.
THANKS, an ounce of IT !
(payable when we finally meet)

HeathenSir Smeagol's Opus#1235878/9/04; 10:44:01

Smea consider this a place marker; I haven't figured out an apt way to thank you but I will and soon. More to follow . . .
Gandalf the WhiteA "KEEPER" chart to have ! <;-)#1235888/9/04; 10:48:47

Be sure to LOOK at the chart of the US$ soon, as last Friday's "DIVE" is shown in all its GLORY (or should that be "GORY" !)

BoilermakerGold's Future Value#1235898/9/04; 10:53:53

After reading some excellent posts over the past week regarding the potential value of gold and when/why/how would one want to convert gold to fiat, I have a theory I'd like to throw out to the forum for consideration and comment. This theory is based mostly on intuition, not rigorous logic, so it may be easily disputed or shown to be illogical. Your comments are appreciated.

I have gone through the following thought process:

- The US $ is not a good (constant) measure of value so that the value of gold in dollar terms, current and future, will not be accurate.

- Gold has been marginalized by the world's banking powers over the past 100 years in favor of fiat currency. Gold is too inflexible for the purposes of the modern banking and political fraternities. Today's fiat value for gold is completely compromised and misleading.

- This long-term repudiation of gold is coming to a very messy end sometime in the not too distant future.

- Other traditional relationships for gold such as one ounce = a good men's suit or one ounce = 15 barrels of crude oil are more realistic but they do not account for the possibility of technology and/or substitution impacting the value of these products. For instance, suits are heavily impacted by labor costs and they will be made wherever labor costs are lowest and exported to consumers in high labor cost markets. Also, there is no physical constraint on the number of suits that can be produced so there will never be a shortage of suits whereas above-ground gold can only grow by a small fraction YOY.
Like gold, crude oil is a limited resource but crude oil will reach a price level that justifies conversion of other energy forms, fossil and renewable, to take its place. Hence it is not like gold which up to now cannot be replicated from other elements. So crude oil is better than men's suits as a yardstick for gold but only to the point noted above.

Debt has become the basic measure of how much fiat money is sloshing around the world. Gold is the classic store of value. My gold value theory rests on the intuitive proposition that gold is the antithesis of debt and further that the two, in a world that recognizes the inherent purpose and value of gold, will maintain a one-to-one balance between the two. This relationship is a balance sheet construction where assets (gold) = liabilities(debt). I expect that there will be other physical assets that may be substituted for gold such as silver, uranium, or other non-perishable commodity materials that can be transported and stored away from the clutches of governments and/or tax collectors. There will be no paper or digital products on the asset side.

Under this theory, we need to determine the amount of debt in fiat terms, the amount of gold that exists above ground and gold's "market share" of the asset side of the balance sheet. Then it's just simple math, fiat debt x gold's market share of assets divided by above ground gold.

Trying to get a handle on worldwide debt is challenging and I'd like some help with this. According to the Fed the US total nonfinancial debt is about $23 trillion. I can't find a comparable number for world debt but for estimating purposes I will assume that US debt is 1/3 of worldwide debt and arrive at $70 trillion as the estimated worldwide debt. As for above-ground gold I have seen the number 130,000 tonnes, private and govermental, as a worldwide estimate. Now as for gold's market share of the asset class of commodities I would think it will be somewhere between 50 and 100% so I will pick 75% for my estimate. Using these estimates the current value of gold is about $12,600 per ounce. The current price of gold is $400 per ounce.

Looking into the future, the amount of above-ground gold will increase as higher prices stimulate finding and mining. After the initial repricing shock noted above the rate of growth of total debt vs the rate of growth of above-ground gold will determine which direction the price of gold will go. For instance, if debt is increasing at 5% per year and above-ground gold at 2% (near the current growth rate) then gold will continue to go up in fiat terms. If, however, a major retrenchment (default ) of debt takes place then gold should go down. Debt becomes the measure for systemic risk levels that must be offset by the presence of gold "insurance".

Gandalf the WhiteThe "new" UP-MOVEMENT" on the Gold P&F Chart ! <;-)#1235908/9/04; 10:55:47$GOLD,PLTB[PA][DA][F!3!!]&pref=G

Friday's activity shows a GREEN "Snowman" (8) holding up THREE little GREEN "X"'s !!
Can you say, "Watch for the BREAKOUT!"
COMING soon.

HeathenAristotle#1235918/9/04; 10:56:31

Sir Ari;

I wanted to thank you for the information you communicate so well in your posts- I spent way too much time up late reading through the HOF this weekend. As evidence of the 'living' quality of this body of knowledge; I keep reaching a 'horizon of understanding' things become clear and then a new layer is revealed, only to cloud one's vision for a time, as another 'horizon' is defined.

HeathenCarrying Capacity: Microbes, Men and Midas#1235928/9/04; 11:17:53

Sir Boilermaker, most recently, and several others over the weekend have written about determining the value of Gold. Interestingly, several different approaches have all led to a similar figure. Or at least in a similar ballpark and, yes, a BIG ballpark, but nonetheless. So I'll repeat my notion that Gold's value will be valid and it's 'price' accurate, reasonable and just when the average person can 'carry' their life's 'worth' in Physical Gold. With that, I'm off to lift some weights!
CometoseThank you #1235938/9/04; 11:18:23

Thank you Smeagol for your wonderful and gracious gift , here.

Your verse is just the medicine I need to keep my Myopia at bay and to be able to keep seeing in CONTEXT what is going on all around us .........Spiritual Reality or TRANSITORY PHYSICAL FACTS you
and to Capn Goldheart.........

Federal_ReservesNeoCons revenge#1235948/9/04; 13:35:31

Best bet is to throw in the towel lose in a close election while holding up the economy as best they can this year.

Bush could easily make another misstatement during the debates which could help tank his chances. Just a few days ago he said "The enemy is always trying to think of news ways to kill us, and so are we".

Bush gets beat and Greenspan (retires), both could then hand the 2005 economic anvil (trade deficits, fiscal deficits, falling real wages for US Workers) off to the "WINNER" who will usher in and get blamed for the debt collapse.

Bush/NEOCONS' can still come back and battle again in 2008 and avoid the peg as the "Depression President".

Kerry/Edwards will get the blame – being setup as the bagholders? Its not who gets the credit because everyone claims that, its who avoids the blame.

NedWould someone please confirm when the FOMC announces IR policy. #1235958/9/04; 13:39:35

I believe the announcement occurs at 2:15pm but I do not know if it is Tuesday or Wednesday of this week. Is the 'meeting' on Tuesday and the 'announcement' on Wednesday?

Thanks in advance.

TownCrierHEADLINE: Soaring oil prices may lead to weaker U.S. dollar#1235968/9/04; 13:45:48

CHICAGO, Aug 9 (Reuters) - The dollar, which has rallied in recent months on expectations the Federal Reserve will raise interest rates several times in the next 18 months, may drop sharply if soaring oil prices curb economic growth.

With crude oil prices hovering near record highs around $45 a barrel, higher gasoline prices will soon follow. Consumers struggling to pay high gasoline prices may become increasingly inclined to keep their wallets shut to other purchases.

"Higher oil prices -- particularly record higher oil prices -- have typically been associated with economic weakness -- I mean a shock to economic growth," said Michael Woolfolk, senior currency strategist at Bank of New York.

On Monday, U.S. crude futures jumped to $44.97 a barrel, the highest price since the the New York Mercantile Exchange started trading oil futures in 1983.

On an inflation-adjusted basis, oil would have to reach $90 a barrel to reflect the prices in the early 1980s that shocked the United States after the 1979 revolution in Iran.

...Jason Daw, senior G10 foreign-exchange strategist at Merrill Lynch in New York [said] "The Fed is not going to tighten as much over the next year and a half as what's priced into the market," Daw added. "The effect it's going to have on the dollar is ... the dollar will suffer."

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

A chicken or egg thing. Is high oil causing a weaker dollar, or is an inherently weak (overprinted) dollar simply being reflected in higher oil... and potentially leading to a vicious circle?

Choose gold, and leave the worrying to others.


TownCrierIt's all tomorrow, Ned.#1235978/9/04; 13:47:06



USAGOLD Daily Market ReportPage Update!#1235988/9/04; 14:23:11">
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.

---closing market rap---

Gold futures on the Comex division of the New York Mercantile Exchange consolidated Friday's stretch higher with a bout of trade above the psychologically significant $400-per-ounce level on Monday. The most-active Dec contract settled 90 cents higher at $403.

Dec prices crept gently higher through most of the session as potential sellers remained content to sit on their hands and count down the clock ahead of the rate decision. Dealers said both the dollar and gold markets will remain on a largely sideways heading over the near term ahead of the Federal Open Market Committee meeting on U.S. interest rates Tuesday. "We don't know what effect (last Friday's) employment data will have on the Fed's thinking," said a gold and foreign exchange dealer with a large U.S. investment bank. "They won't want to risk slowing the economy any further, but won't want to panic the markets either by admitting things are shaky," he said...

"There is still interest to buy (gold) on any dips," said a bullion dealer. "The best gold traders these day's are the ones who know what's happening to the euro."

Robert Gottlieb, head of bullion trading at HSBC: "You have clearly geopolitical fears right in the forefront. You have an uncertain election outlook. Now you have obviously the dollar weakening. So everything is favorable to gold."

----(see url for access to full news, 24-hr newswire)-----

NedThanks TC!#1235998/9/04; 14:23:19

May I ask what you foresee tomorrow?
TownCrierNed, scroll down to msg#: 123578#1236008/9/04; 14:56:48

As mentioned there, that is the best sign I have. I'm sticking to it. This method worked well enough for me the previous time, marking the time and size of the Fed's first rate rise in years.


BoilermakerSmeagol's "The Rhyme of the Ancient Gold-Mariner"#1236018/9/04; 15:13:02

Sir Smeagol your talent is truly a blessing to the forum. The oceans and the men and ships that sail it offer a beautiful analogy for the financial world. Gold is small, swift, and unsinkable in the face of danger. Derivitives are huge, illusory, fleeting and highly destructable in the face of danger. Perhaps you could compose a David vs. Goliath sequel ;>) Thanks very much and may your precious be your ticket to good fortune!
misetichOil Hits Fresh Record as Iraq Unrest Stops Output#1236028/9/04; 15:14:00


LONDON (Reuters) - Oil prices hit fresh record highs on Monday after a Shi'ite Muslim uprising forced Iraq (news - web sites) to shut down its southern oil production, reinforcing concern over tight international supplies.

U.S. light crude hit $44.98 a barrel in late New York trading, the highest price since the New York Mercantile Exchange launched oil futures in 1983 and the seventh straight trading session in which crude posted a new high. September WTI closed 89 cents higher at $44.84 a barrel.
The official said al-Sadr's Mehdi Army had threatened to sabotage output by the state Southern Oil Co., based in Basra. He said storage at the Gulf Basra terminal was sufficient to keep exports running for about two days.
There are also worries that supplies from Venezuela, the world's number five exporter, may be disrupted during a referendum on Aug. 15 on the rule of President Hugo Chavez

Demand from US military needs, China & Orient, Germany due to China's growth
Disuption from Iraq, Yukos
Chavez has threatned US that oil prices will reach $100 if the US interferes and he loses - he threatned a civil war would ensue in his 3 hour rally yesterday
Saudi Arabia oil infrastrure remains a target of the sabateurs
China vs US on Taiwan issue
Russia is capitalizing and their "pipeline guns" are aimed at the west

It wouldn't take much to propel oil prices in the $60's

The odds of an event occurring are EXTREMELY HIGH

All Aboard The Gold Bull Express - Part ll

misetichCement weighs on construction#1236038/9/04; 15:27:30


High demand and low imports are putting a squeeze on cement supplies across the USA, leading to a rapid rise in prices and even shortages of the key building ingredient
n fact, a recent survey of purchasing managers found cement and concrete, which is made with cement, were in short supply in July for the third consecutive month, according to the Institute for Supply Management. And while statistics show cement this month is selling for more than $84 a ton, up nearly 2% from a year ago, anecdotal reports suggest the increase is much larger, according to the Engineering News-Record, a publication that tracks construction costs.

It's a serious and costly problem for construction firms, which depend on cement to build everything from home foundations to highways to swimming pools. Because contracts are typically signed months in advance, firms are usually unable to pass along the added costs to their customers. And construction companies are being forced to leave some of their crews idle for days at a time as they wait for cement to arrive, leading to expensive delays.
Ken Simonson, chief economist of Associated General Contractors of America in Alexandria, Va., says the cement shortages could lead to large layoffs or even bankruptcies of construction firms.

China's economic growth is devauring natural resources and affecting various raw materials worldwide.

The example of shortage/high prices for cement is significant for the residential constuction industry, - the locomotive of the US economy

The 2004 Oil Shock And Awe is continuing, battering the transportation industry, and all manafucturing plants.

The effects are being underestimated by the market as the economy is slip, sliding away, as Real Price Inflation is subduing consumer spending

All Aboard The Gold Bull Express - Part ll

misetich Former U.S. Cabinet Officials - ROBERT RUBIN - Urge Discussion of Fiscal Crisis #1236048/9/04; 15:39:15


WASHINGTON (MktNews) - As Alan Greenspan and a crowd of economic luminaries watched, former Treasury secretary Robert Rubin, former Commerce secretary Peter Peterson, and economist Fred Bergsten Monday urged the next president -- whoever he is -- to educate the American public about pending crisis risk caused by the budget and current
account deficits.
Greenspan's presence at the think-tank session underlined the non-partisan nature of what amounted to a pep rally of the economic elite on the intertwined subjects of fiscal discipline, national savings, and higher education.

Rubin, instrumental in helping engineer a budget summit at the beginning of the Clinton administration, told the group the current political impasse on budget matters is much worse than in the 1990s.

Peterson, whose latest book on the implication of the twin deficits is climbing the best seller list, said the public needs to know that time is running out to avoid a catastrophic "hard landing" for the U.S. economy.

Bergsten said he believes the constant escalation of the current account deficit argues for a "sharp adjustment" in the dollar if nothing changes.

Bergsten, Peterson, and Rubin finished the session at the Institute for International Economics by taking questions and making frequent references to Greenspan, who remained silent in the audience throughout.

The architect of the strong US $ policy, which created the monstrous stock market bubble - and timely disappeared from the scene is now preaching to "educate the public"

ANOTHER set of "warning" colors coming up- for US citizens

This one is full YELLOW already.

All Aboard The Gold Bull Express - Part ll

slingshotSir Smeagol#1236058/9/04; 15:42:02

All Right, Smeagol!
Reading it is Great. Read it out loud and give it Life.
Lots of Heart in this one.
Wonderful,just Wonderful.

misetichECB Update: Papademos Hints No Shift in Stance Despite Oil #1236068/9/04; 15:46:30


"At the present time, we confirm the scenario of a gradual recovery in the euro area's economy," he said. "At the same time, we believe that inflation prospects remain compatible with price stability over the medium term."
"The oil price is a risk to be taken into account," he said. "If the price of oil were to remain high for some time, it might have an impact on growth, albeit to a limited extent in the first year." And while consumer confidence remains low, there are "signs of recovery in
consumption in some countries, such as France and Italy." Moreover, "the relative strength of the economic expansion in the first quarter, robust growth worldwide, and the increase in industrial production in the euro area are positive developments all suggesting that growth in the euro area might exceed the rate previously forecast for this year," he said.
"That being said, we are keeping a close watch: we want to prevent the recent increase in inflation and, in particular, the visible rise in oil prices from spilling over into wages," Papademos said. What we said
in July still stands: we remain vigilant and we are monitoring the situation and all the risks to price stability very carefully. There is, however, no bias regarding the monetary policy stance in the future."

The politico's objective is to " prevent the recent increase in inflation and, in particular, the visible rise in oil prices from spilling over into wages,"

Mr. Papedemos ought to be a little more concerned regarding jobs disappearing

All Aboard The Gold Bull Express - Part ll

BoilermakerMisetich msg 123604 Former U.S. Cabinet Officials - ROBERT RUBIN - Urge Discussion of Fiscal Crisis #1236078/9/04; 15:58:04

Both political parties should by now realize that the next administration, whichever is elected, will be presiding in an economic depression/crisis. That said, the Democrats should be trying to precipitate the crisis before the election as I suggested earlier this year. This gives them a better chance of winning the election and takes them off the hook for creating the problem (at least on the surface that is seen by most people).
GW Bush could be toasted just like his father was in 1992 by an economy headed into the tank. The democrats may pull the trigger on this fantasy economy even though they have created much of its architecture. This looks to be an interesting election year.

Dollar Bill.,.#1236088/9/04; 17:36:35

federal reserves,
Your source of information about President Bush Quotes is a fraudulent source. Must have been on the internet right?

misetichGlobal: The Mythical Recovery - Stephen Roach (New York)#1236098/9/04; 17:51:30


This business cycle is different. The modern-day US economy has never had to struggle this hard to eke out an economic recovery. Plagued by an outsize shortfall of internal income generation, it has taken an unprecedented dose of fiscal and monetary stimulus to spark any semblance of cyclical revival. But the question all along has been, recovery at what cost? It's a cost, in my view, that has been manifested in the form of an extraordinary array of imbalances -- record twin deficits (budget and current account), a massive household sector debt overhang, an unprecedented shortfall of domestic saving, and an asset-dependent support to aggregate demand. Lacking in the organic staying power of job creation and wage earnings, the US economy has become addicted to the steroids of extraordinary monetary and fiscal support. But with policy levers pushed to the max, the lifeline of support is now dangerously thin. For such an unbalanced and vulnerable economy, it doesn't take much of a shock to put a low-quality recovery in trouble. As bad luck would have it, that's precisely the risk as oil has once again entered the macro equation.
Myth #1: The US economy has achieved the critical mass of a self-sustaining cyclical recovery............................It's a good theory but it's not working. It's not just that job creation has averaged an anemic 55,000 per month over June and July. It's that this recovery has been accompanied by the weakest employment profile on record. In only three of the 32 months of this recovery has job growth exceeded 200,000; by contrast, in looking at the average profile of the past six cycles, that threshold was exceeded 14 times over the comparable 32-month time frame. By our calculations, private nonfarm payrolls are currently 8.1 million workers below the path of the typical hiring-led recovery. Lacking in job creation, real wage and salary disbursements -- the key organic driver of household purchasing power -- are running $323 billion below the typical recovery profile. All this speaks of the absence of the critical mass for self-sustaining recovery.
Myth #2: Imbalances don't matter.................The problem with this logic is that it turns orthodox macro inside out in an effort to justify the notion of sustainable imbalances................The New Economy promised an ever-rising US equity market. And now yet another new paradigm argues that foreign investors will gladly foot the bill for a US economy that continues to push the envelope in living beyond its means. Let the record show that that the personal saving rate fell back to a rock-bottom 1.2% in June 2004. Lacking a cushion of income-based saving, over-extended and asset-dependent American consumers suddenly have their backs against the wall. As for the external financing conundrum, as they say in the mutual fund business, past performance is no guarantee of future returns. The likelihood of a saving-short US economy continuing to run ever-wider current account deficits without suffering dollar and/or real interest rate consequences is close to zero, in my view.
Myth #3: Oil doesn't matter................I have never bought this one either. The record is pretty clear on this risk factor: Each of the five recessions since the early 1970s has been preceded by an oil shock in one form or another. The key question, in this instance, is whether the US has experienced a true oil shock. I have previously argued that while $40 oil hurts, it does not qualify as a full-blown shock; however, relative to the post-2000 average of $29 per barrel, a $50 price tag would have to be considered a shock
Myth #4: Nothing stops the American consumer..........................No pun intended, but I continue to worry that the American consumer is living on borrowed time. Yes, debt is a key concern. Even with interest rates near 40-year lows, debt service burdens -- interest expenses relative to disposable personal income -- are near historical highs. The personal saving rate, as noted above, is near historical lows. Wage income generation, also as noted above, is lagging as never before. And, as the US property cycle nears its secular peak, asset-driven consumption strategies will be challenged as never before. All this speaks of a US consumer that is lacking in staying power and therefore vulnerable to the slightest of shocks. Oil is an obvious and immediate threat in that regard
Myth #5: The world is now on the cusp of synchronous recovery in the global economy.................Don't kid yourself. The world, in my view, remains very much a two-engine economy -- the US consumer on the demand side and the Chinese producer on the supply side. The American consumer, as just noted, is already on thin ice.

With due respect to Mr. Roach

Myth #7

There is no inflation.

.....don't kid yourself - Real Price Inflation is running in double digits - If inflation was calculated in the same manner as it was in the 70's - Real Price Inflation would be in the 15-20% range.

All Aboard The Gold Bull Express - Part ll

R PowellMisetich#1236108/9/04; 18:35:56

May I add some quick thoughts (questions) to three of your posts...

The effect of higher oil prices will be higher prices of comsumer goods, price inflation, but it may take some time for higher prices to filter through the process of raw materials to finished goods. Does anyone have any numbers or info on just how long this usually takes??? I'm keenly interested in just how the American economic or business community will discover that price inflation is much higher than government figures indicate. Also, I'm waiting for the reaction, (;>. Any info or thoughts here???

The article about cement shortages is indeed accurate. Some New England concrete plants have already been put on a rationing system. One very large supplier in southeastern Massachusetts has turned down some new work in order to provide for his old customers. He now has more trucks than necessary for the now limited amount of concrete he can deliver. There is no overtime, at all, for the drivers.

And finally, the article that mentioned Peter Peterson also refered to him as the author of a new book. Has anyone read this?..."Running On Empty"...? If so, does it delve into the trade and government spending deficits or just focus on the social security issue? I'm interested in the former but believe I have enough factual information on the latter. Anyone?? usual, you have once again done some fine posting, good work...Thanks!

Smeagolwe Thanks You All sso very much!#1236118/9/04; 18:36:48

(bowing)*jingle**clatter!* (as the Jester's cap falls off his head)

Thank you, Ssirs MK, Town Crier, Aristotle, Clink!, Heathen (nice hat!), Slingshot (we likes reading your
Prophecy of Oro Tale-chapters!), Buongiorno!, Gandalf the White, Cometose, Boilermaker, did we miss any?

We had a great deal of fun (and losst a bit of ssleep) writing it, and we are glad to ssee it sso well received. To come home from the daily tread-mill, and see that our Rhyme-tale will be placed in the Hall of Fame! Ai! You have made our week!!

Heathen (8/9/04; 10:44:01MT - msg#: 123587)
"Smeagol, consider this a place marker; I haven't figured out an apt way to thank you but I will and soon. More to follow . . ."

O my, what have we sstarted?

Boilermaker (8/9/04; 15:13:02MT - msg#: 123601)
"Perhaps you could compose a David vs. Goliath sequel ;>) " know, it was strange, precious... the Rhyme-theme seemed to almosst flow and fall together in mosst places. We doesn't 'write', and this Rhyme is a much greater thing than the Hai-ku's we are accusstomed to sscribble ftom time to time... and looking at it now we aren't sure if we can do anything like that again... but who knows?

Gandalf the White (8/9/04; 10:41:01MT - msg#: 123586)

(stunned, mouth agape) We doesn't know what to ssay!! HEAR! Let it be known, if it issn't already, that Ssir Gandalf the White is alsso Ssir Gandalf the Generous! And who knows, ssomeday perhaps we will indeed meet! (grin)

Aristotle (8/9/04; 08:47:10MT - msg#: 123577)
"Smeagol, you've surely got more talent in one finger than I've got in my whole being!!!"

(cackle!) You can't fool us, Ssir Aristotle! We've sspent LOTS of time reading your writings in the Hall of Fame - and have wriggled uncomfortably at the end of your pointy pen! Talk about talent! But really, thank you (grin).
You and others here, indeed, are part of the Rhyme - it's frame-work came largely from what we've learned here. the way, the rum (entirely voluntary) was alsso meant to warm and calm nerves among the crew - just as some here are nervous about the future - "Different, colder than any I've ever felt before, have you?"

Aristotle (8/9/04; 09:13:42MT - msg#: 123580)
"Smeagol, here's a fun thought. It would probably bungle your rhyme scheme and lose a bit of quaintness regarding the triviality of the mast-ball, but wouldn't it have been deliciously symbolic if it had rather been the *anchor* as the single .0001-thing that had fallen away during the defining contest with the Derive?!!!"

(cackle!) YESSSS!, as in It no longer being tied down! (certainly they has enough precious ballast to keep her from drifting anywhere, eh, precious?)

Yess...we likes that idea... which might have occurred to us if we knew lots about sailing, which we don't! Three heads are always better than two... hmmm, let us ssee, Ssir Aristotle... sss... actually, all we has to do is replace

But we've lost the ball from the top of the mast."


But we lost our anchor when between berg and Derive we passed."

and there you has it! We thinks this change to be a worthwhile one. Yea or nay?


Liberty HeadAhoy Matey Smeagol#1236128/9/04; 18:47:54


Me loved the rhyme me did.

There is one thing about the rhyme that troubles me so.
I did want the sea to give up the body of the captain of the Derive.
I need proof he went down with the ship.

Best Wishes

ToolieFive posts in one#1236138/9/04; 18:55:11

Dollar Bill: I have seen the video clip of Bush making that statement, twice, once on the BBC news, once on ABC news.

I don't buy the idea that Bush will throw the election. Though, I would not put it past either of the two parties to use their lame duck months, making things rough on their successor. Should Kerry win the election, I look for a number of major corporations to announce that they will re-incorporate outside the US. There will be little tax base left with which to build strong dollar.
Was it American Airlines’ bankruptcy and subsequent pension default that MK mentioned last week? I have heard fears expressed that should AA do this, it will become a common part of a new business model.
I got awful taste of inflation today. At the lumber yard I bought a sheet of OSB 7/16" x 4’ x 8’ (oriented strand board) AKA chip board, the stuff that is commonly used for roof decking. I cost $15, the last time I had bought any, 1998, Under $8. The clerk said it had come down from over $20, earlier in the year.
I made a call to CPM last week and do I feel better! I had been expecting a pullback in POG for about two weeks, then we got that $7 spike on Friday. Don't wait for the next manned moon mission to get yours.

HeathenToolie @ particle board#1236148/9/04; 19:30:05

Ever since Gitmo and then Iraq manufactured wood products- I think that's what they are called- like particle and T-111 and plywood have skyrocketted.
HeathenSir Smeagol's unofficial award.#1236158/9/04; 20:01:32

From the back cover of, Close to the Wind by Peter Goss, a book I am currently reading:

On November 3, 1996, former Royal Marine Pete Goss embarked on the most grueling compettition in his sailing career: the Vendee Globe, a nonstop, single-handed round-the-world yacht race. For the next seven weeks he met every challenge in his sormy path, from combating waves the height of six-story buildings to grappling with his spinnaker in high winds. Then everything began going wrong: His sails were destroyed, his navigation equipment proved useless. And on Christmas Day his radio picked up a Mayday that a French competitor was sinking 160 miles away. Turning into the hurricane-force winds, Goss set out to rescue a near-dead man on a life raft somewhere in the vast wilderness of the merciless Southern Ocean . . .

He did it, won the Legion of Honor and also had to operate on his elbow enroute, onboard with medical intructions via radio/fax.

You too, Sir Smeagol, have turned back into stormy waters and offered up an especially accesible lifeline to fellow sailors on the fiscal sea. I'm sending copies to my young nephews.

So, I award you, the 'unofficial CPM', VENDEE GOLD!
Alternately, ya can have the beaver felt hat!
Size 7 and 1/8th-If we ever meet : -)

Black BladeOil Prices Could Get Even Worse#1236168/9/04; 20:21:56


When will the world get a break from oil prices that seemed unimaginable a few years ago? Not anytime soon, analysts believe. If anything, the upward march seems to be gaining momentum, with U.S. oil prices breaking through $44 a barrel on the New York Mercantile Exchange this week. Paul Horsnell, head of Energy Research at Barclays Capital in London, now says: "The question is not whether $50 (per barrel) will be breached," but whether there will be any pause before the half-century mark is topped.

Black Blade: Basra has shutdown the southern distribution system to the Gulf in southern Iraq. Meanwhile, the head of the KGB, err, I mean Russian president Vladmir Putin continues to nationalize major oil producer Yukos. This can only mean precious metals should provide some portfolio insurance as prices increase.

Black BladeThe world economy sinks or swims in the black stuff #1236178/9/04; 20:26:26,3604,1279073,00.html


August is a strange month. Supposedly, the financial markets are in a state of torpor, but in recent years that has not always been the case. Weird stuff happens, be it Saddam's invasion of Kuwait, the attempted coup against Gorbachev or the Russian debt default. This year the story is oil. Over the past few weeks, the price of oil on the futures exchanges has crept up and up and on Friday night it was nudging $45 a barrel. The expectation is that it may go higher.

"Fifty, sixty dollars a barrel is thinkable for the first time since 1979 ... But so much has changed between then and now that prices might have to go even higher before demand growth slows down," said Deborah White, senior economist at SG Commodities in Paris.

Black Blade: More of the same from "across the pond". "Interesting" article anyway.

Black BladeMarket Wrap Up - Willie#1236188/9/04; 20:30:43



As the slow "dog days" of summer are upon us, why not a reflection on why gold still makes sense? The first article under my pen name "25 Reasons Why Gold Will Rise" was published in November of 2002 (much gratitude to the Moriarities). The entire motivation for the compendium of justifications was disagreement and disrespect for the few shallow reasons offered by the press & media. The only reason they seemed to understand was MidEast violence. Not the Iraqi conflict, but the Israel-Palestine ongoing endless version. Do they even recall this overused reason now that the focus of MidEast violence has moved 1000 miles east and 1500 miles southeast? Probably not. They overlooked a cluster of monetary reasons and economic fundamentals behind an imminent gold rise and USDollar decline. They did not get it right then; they do not get it right now. Let's revisit the listed reasons why gold has risen, as forecasted 20 months ago. They are still relevant for further price appreciation. Since the time of its writing, two additional reasons have been captured, worthy of addendum.

Black Blade: Plenty more reasons as well I'm sure. ;-)

White HillsMistich Msg 123609#1236218/9/04; 21:53:11

Sir, In your post and Myth #7 you mention that if inflation was measured the way it was in the 70's it would be in double digets. If you can at some point give us more of your thinking on this subject. I have also thought that the inflation figures were incorrect. Thank you, White Hills
CytekMisetich ... Cement#1236238/9/04; 22:32:50

misetich: my brother-in-law is a big builder in Arizona.
He knows the main Cement suppliers and the biggest one can only give him a small portion 1/20 of the cement that he needs. This has reeked havic on his scheduling. For the last 3 months waiting for Cement but not getting enough to finish the job.

He told me he is seriously considering cutting back any new projects and sitting on cash for the time being. I asked him where does he think the problem is, he said his contanct are telling him that the demand for Cement is huge in China and most of it is going there. He also said that he has heard that this is a national problem.

I read many articles but when i start hearing the same information from people that i know, this concerns me. If this problem continues for some time, builder as my brother-in-law will halt all new building and sit on the side lines. He also told me that his material cost have gone trough the roof and it's very difficult to quote a custom built home right now.


Mr GreshamAnniversary#1236248/9/04; 22:57:16

Just stopping in to show I can still fog a mirror, and i've a load of reading to catch up on -- hopefully on the upcoming "vacation" I'm now frantically preparing for.

I've been Mr G for five years here now, for a short while before that on Ed Yourdon's Y2k forum, and then Andy2000 referred us over to here as the best gold forum, as I had come to the conclusion that the most likely bubble to pop at that time was the good ol' F.R (stands for "fractional reserve") banking system.

Financially, I'd have to call it a breakeven, getting inspired here, and acting on it. Educationally, priceless. And fun, well, we used to have some great times all together. I put a lot of time in, and got a lot out. All praises to MK for letting us set out on the front porch of his store and jawbone away...long's we didn't scare off the customers ;)

"Real life" has been awfully demanding lately, and I may have said all the brilliancies I had in me. I'm sure not the same person who came here 5 years back, and I don't feel so damned cocky or smart about ducking the fallout of economic collapse possibly ahead. Hats off to those central bankers who've kept everyone right on schedule running in the great hamster wheel. I feel just about even with everyone else in the country/world, and now five years older. (And, yes, "off to the gym" more often now! Pretty well recovered from a depressingly recurring low-level back injury 3 years ago.)

Exhausted at times, keeping up with so much. And looking for new perspectives/recreations.

I'd raise a frosty, lime-filled N.M. to the whole assemblage, but I finished the last one yesterday, so I'll just raise my hat to ya, and wish "Adios, Amigos", until I catch up on the flow here, and have a thought to share.

Gandalf the WhiteWELCOME "Home" Mr. G !#1236258/9/04; 23:08:22

Drop back as often as you can, and I will see you at BIG John's when you find time to tip a few!

TopazThere's "something" going on!#1236268/10/04; 01:42:36

The much hyped and subsequent market action re NFPayrolls last week has left our Bond/Oil/Dollar in no-mans land and reading the T-leaves leads me to conclude a BIG realignment is imminent. Oil futures piled it on Yesterday with the in close out months outperforming Spot.
I think it's more ...much more, than speculating on a rate move going on here.
We'll see ... Might even be GOOD for Gold? ... NAH! ;-)

goldenpeaceBravo, Smeagol!#1236278/10/04; 02:20:24

Smeagol, Smeagol, ho!
The ancients smile on your gift,
stiffening our perserverance.


SpartacusJudge Upholds Media Subpoenas in CIA Leak Case#1236288/10/04; 03:40:03

WASHINGTON (Reuters) -- A federal judge on Monday upheld subpoenas to compel testimony of journalists at NBC News and Time magazine in a special prosecutor's probe into whether Bush administration officials illegally leaked a covert CIA officer's name to the news media. --
misetichWhite Hills (8/9/04; 21:53:11MT - msg#: 123621)#1236298/10/04; 06:15:18

Sir, In your post and Myth #7 you mention that if inflation was measured the way it was in the 70's it would be in double digets. If you can at some point give us more of your thinking on this subject. I have also thought that the inflation figures were incorrect. Thank you, White Hills

White Hills numerous changes have been made to the CPI index incorporating substitution, quality etc. and other hedonics adjustments.
The main change is the classification of housing as an asset and substituting it with "equivalent rent".

House prices have been rising on a torrid pace and "equivalent rent" has not

The rise in the numbers of homeowners, has muted the "equivalent rent"

However, housing "asset" inflation is spilling over to the economy via debt, just as the "stock market "asset inflation" did in the late 90's

ANOTHER example is the non-recognition of "subsidizion" of energy prices through military spending and thus budget deficits.

Energy prices have "not risen" in the last 24 years when adjusted for inflation because of the "government deficit military subsidization" which has kept oil prices at the consumer level "modest"

In order to maintain the status quo military spending has been increasing multifold.

Isn't that part of "energy costs" and thus real price inflation, being camuflauged as 'government deficit'?

Would oil prices be "this cheap" IF there was "no intervention" of the industrialized west in the Middle East through almost the last century?

Maybe its a big-stretch in my part - but maybe it isn't

misetichFeds to increase 1/4 ALMOST A CERTAINTY#1236308/10/04; 06:39:51


We continue to look for a 25 bp rate hike this week, and we still believe there is a high probability of a move in September based on our expectations of stronger economic activity and a gradual drift higher in core inflation in the months ahead. Fed Chairman Greenspan argued strongly in his last monetary policy testimony that the recent weakness in the economic data represented a temporary and not unusual pause within a strong uptrend expected by the FOMC to continue in the second half of the year. That the June slowdown appears to have extended into early July has likely raised the Fed's cautiousness, but we doubt it has caused the central bank to fundamentally alter its strategy or longer-term forecasts. Indeed, Friday's Wall Street Journal article "Fed Is Unlikely to Reverse Plans for Increasing Interest Rates" by Greg Ip cited unnamed "Fed officials" in arguing that the FOMC was "unlikely to pull back from its campaign of regularly raising interest rates in the months ahead" in response to the recent slowing in the economy. The article seemed conveniently timed relative to the employment report surprise, and we think that it could have represented a pre-emptive rhetorical strike by Fed officials who had seen the employment results early and hoped to keep the markets from wrongly pricing out a rate hike on Tuesday.

With a 25 bp hike in the funds target to 1.50% still a high probability, in our view, focus will be on the wording of the statement issued by the FOMC at the conclusion of Tuesday's meeting. We expect the risk assessment and "measured" phrase to be the same as in June. The most interesting aspect of the statement is likely to be the assessment of the current economic climate. The FOMC will almost certainly reference the softness in the incoming data but may give some indication that this is still expected to be temporary.

Is it a "save face" move on the part of Sir Greenspan, given the negative economic news in the last 2-3 weeks?

The circus master is at center stage - attempting to juggle the sharpe edges swords he keeps twirling up in the air- and penchantly falling toward him in a menacing way

The three most menancing daggers, are the stock market, the precious metal market and the biggest market of all the "consumer perception market"

It is the latter that is the most difficult to manage as the tide of "negatives" such as higher real price inflation, lack of jobs, lack of sufficient wage increases, and higher financial carrying costs.

Will the Feds make the economy much worse, after today's almost certain 1/4% rise?

Almost a certainty.

All Aboard The Gold Bull Express - Part ll

misetichU.S. Chain Store Sales Rise 0.1 Percent#1236318/10/04; 06:58:15


NEW YORK (Reuters) - U.S. chain store sales grew in the latest week thanks to state sales tax holidays, though the pace slowed from the previous period, a report said on Tuesday.

Sales rose by 0.1 percent in the week ended August 7, down slightly from a 0.2 percent rise in the previous week, the International Council of Shopping Centers and UBS said in a joint report. Compared with the same week a year ago, sales increased by 3.1 percent, matching the 3.1 percent pace of the preceding week.

ICSC maintained the low end of its forecast for July sales growth in a range of 3.0 percent to 4.0 percent, on a year-over-year basis.

Consumer spending is slowing

All Aboard The Gold Bull Express - Part ll

Clink!Inflation jus' ain't what it used to be#1236328/10/04; 07:30:55

@Misetich, White Hills. You may or may not be aware, but Jim Sinclair is also not convinced and put out a call on his website for any information on precisely this topic. Maybe someone else will do the research for us !

Buongiorno!inflation#1236338/10/04; 08:12:51

@Misetich--Thank you for your work on inflation. I have long believed that these numbers are deflated to save on cola adjustments for military and ss pensions, as well as to promote a false sense of well-being. Unfortunate.

May I add that there may be a "situational inflation" factor, where one is not too much affected if: You already own most of your home, are in good health, are not educating children or yourself, have cars paid for and do not have to drive too much, and do not require much entertainment or meals out....However, those in other circumstances may realize double-digit inflationary loss about every year. Generational/situational inflation.

You add clarity to this complicated issue. You should be there when I try and explain to a municipal government that hidden inflation is one reason they cannot balance their budget. They simply refuse to believe that government would lie to us about inflation.....funny, if it were not so sad.
Sincere thanks,

Chris PowellBreakdown of the historic gold-oil price ratio ....#1236348/10/04; 08:40:47

... is more evidence of central bank
manipulation of the gold market, but
MineWeb's Tim Wood doesn't get it.

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.

misetichRenewed calls for European oil reserve#1236358/10/04; 09:37:27


The EU energy commissioner has renewed her calls for a European oil reserve following record high prices for crude this week.

In a statement Loyola de Palacio called for "a concerted European approach to the issue of security of energy supplies".

She added that the "strengthening of the EU's energy partnerships with the main surrounding suppliers and the European system of security stocks are both indispensable parts of such an approach".

Ms Palacio's comments came as oil prices topped $44 a barrel on Thursday afternoon following fears of a potential loss of supply from Russia.

The Spaniard points out that in 2002, her department had presented proposals "designed to reinforce the European system of security stocks and crisis measures".

Under those proposals, EU oil stocks would be boosted from 90 to 120 days.

EU stocks can currently only be shared under the rules of the International Energy Agency (IEA).

Such proposals, which would need to be approved by the parliament and member states, would permit the stocks to be used if an oil price shock threatened general economic growth.

The Commission's proposal was originally triggered by the tripling of oil prices between 1999 and 2000.

Putin plays a marvellous chess game - and has a good trump with EU

If the US $ appreciates as oil prices climb the EU economy would suffer

However its very doubtful that will happen as the US trade deficit and government deficit would spiral upwards

Of course the other solution for EU is to have oil priced in Euros - and Putin has been accommodative in that regard -and Iran would too if EU.....

The natives are getting restless as The 2004 Oil Shock And Awe continues

All Aboard The Gold Bull Express - Part ll

misetichChina's industrial production up 15.5% in July #1236368/10/04; 09:53:19


BEIJING, Aug. 10 (Xinhuanet) -- China's industrial added value rose 15.5 percent year-on-year to 440.9 billion yuan (53.3 billionUS dollars) in July, 0.7 percentage points lower than in June, the National Bureau of Statistics said here Tuesday.

The bureau's monthly report said fast growth was maintained in July in major energy products, raw materials and best-selling consumer goods, though most of them continued to sustain a falling growth rate, compared with the previous month.
In the first seven months, China's total industrial value addedrose 17.3 percent year-on-year to 2.93 trillion yuan (354 billion US dollars), according to statistics of state-owned industrial companies and private industrial companies each with annual sales income exceeding 5 million yuan (600,000 US dollars).

Sir Greenspan ought to invest in ANOTHER crystall ball - the one that he's been using in the last few months appears to be malfunctioning

The "big scare" of a Chinese economy hard landing - did not materialize as the "overflow" of accomodative industrialized west found its way in the fertile chinese economy zone

The scary part is that only 10-15% (of the have vs 85-90% of the have nots) of the chinese population are participating in this boom -

One can only imagine if the ratio climbs to 20-30% almost equalling the population of the US

How high is high for oil prices and commodities?

All Aboard The Gold Bull Express - Part ll

TownCrierFed Trading Desk tea leaves#1236378/10/04; 10:31:02

In open market interventions today the Fed added $4.75 billion fresh money to the reserves of the nation's banking system through a round of overnight repos at an average rate of 1.444 percent, adding support to yesterday's activity suggesting that a 25 basis point rise to a 1.5% target is on the table at today's FOMC meeting.


USAGOLD / Centennial Precious Metals, Inc.Enter the gold market with grace and confidence.#1236388/10/04; 10:37:01">Get a head start on the gold market!
RimhRate Rise tea leaves#1236398/10/04; 11:05:33

Yes, Towncrier, the rise seems imminent, but if so, why is the Dow so bouyant (a rhetorical question in light of the market manipulala, I suppose)? It reminds me of 1999 when the fed, behind the curve as always, started raising rates vigorously to 'cool things off' and the market shrugged it off as if to say "Our growth is so strong we'll eat that rate rise for breakfast and have caviar for lunch...." While some fools this time may still believe our current growth is strong, they would be in the minority. Joe six-pack know differently, but perhaps he is hoping the economy outside his backyard is stronger than it appears.

And why is the dollar slightly down to sideways? Isn't this rate rise the boost it needs, or is it already too anemic to respond?

Once again, AG is between a rock and a hard place and must depend on the media gurus to give him the A-OK so they can spin it in the right direction for maximum (but diminishing) effect.....

Sorry, I needed to ramble a bit...
I'm done now.

misetichBuffett ups bet against dollar to $19B #1236408/10/04; 11:22:58


NEW YORK (Reuters) - Warren Buffett increased Berkshire Hathaway Inc.'s bet against the U.S. dollar to $19 billion at the end of the first half of 2004, his holding company disclosed in a regulatory filing.

The value of the Omaha, Neb.-based company's contracts in foreign currency had increased $8 billion by June 30, the company said in its quarterly filing with the U.S. Securities and Exchange Commission.

Buffett previously disclosed making investments in five foreign currencies in a belief the dollar will decline in the long run as a result of the United States' ballooning trade deficit. He has never specified which currencies he was investing in, only saying they were major.

Those that are betting against the US $ are in good company. Will gold OUTPERFORM all currencies if Buffett is right? You betcha!

All Aboard The Gold Bull Express - Part ll

misetichCivilians urged to leave Najaf#1236418/10/04; 11:43:10,5478,10405550%5E401,00.html


US troops last night urged Iraqi civilians to leave the combat zones in the Shiite holy city of Najaf, raising speculation of an imminent full-scale offensive against rebel cleric Moqtada al-Sadr and his Medhi Army militia.
The US move came after Sadr's militia threatened to attack Iraq's oil infrastructure.

As fighting in Najaf and the suburbs of Baghdad continued for a sixth day, and spread south to Basra, production in the southern oilfields was shut down and the world price of crude soared towards $US45 ($62.84) a barrel.

With the security situation deteriorating, Poland, one of the key members of the multinational force seeking to establish peace in Iraq, handed responsibility for the two southern provinces it had been overseeing to the US.

A critical time for the US-led coalition is at hand, with unrest spreading again to the far south of Iraq, where many of the key oil installations are located. British troops, which patrol the region around Basra, were heavily engaged yesterday, with one soldier killed and five wounded in running battles that left several Iraqi militiamen dead.

Attacks on an oil production compound just outside Baghdad, adjacent to the Shiite militia stronghold of Sadr City, also were reported, despite the imposition of a curfew.
The key development in this second uprising engineered by Sadr is the threat to the southern oil installations.

Guards along the two key pipelines connecting the oilfields to export terminals are on heightened alert.

..... but Iraqi oil officials have received threats that attacks would be made on the production facilities of the Southern Oil Company in Basra.

Production will remain shut down until the threat to the oilfields has been lifted. Last week, the northern pipeline to Turkey was also shut down temporarily due to sabotage.

Al Sistani has left Najaf for "medical reasons" as Moqtada al-Sadr and his Medhi Army militia are once again rebelling against US led coalition of the "few willing" occupation

Iraq is said to produce 7-10% of the current world oil production and the hostilities are rising

There can be little doubt the oild is being used -

All Aboard The Gold Bull Express - Part ll

misetichFed Raises Rates, Says Economy to Rebound#1236428/10/04; 12:46:36


U.S. Federal Open Market Committee Statement: Full Text

Aug. 10 (Bloomberg) -- The following is the full text of the statement released today by the Federal Reserve:

The Federal Open Market Committee decided today to raise its target for the federal funds rate by 25 basis points to 1 1/2 percent.

The Committee believes that, even after this action, the stance of monetary policy remains accommodative and, coupled with robust underlying growth in productivity, is providing ongoing support to economic activity. In recent months, output growth has moderated and the pace of improvement in labor market conditions has slowed. This softness likely owes importantly to the substantial rise in energy prices. The economy nevertheless appears poised to resume a stronger pace of expansion going forward. Inflation has been somewhat elevated this year, though a portion of the rise in prices seems to reflect transitory factors.

The Committee perceives the upside and downside risks to the attainment of both sustainable growth and price stability for the next few quarters are roughly equal. With underlying inflation still expected to be relatively low, the Committee believes that policy accommodation can be removed at a pace that is likely to be measured. Nonetheless, the Committee will respond to changes in economic prospects as needed to fulfill its obligation to maintain price stability.

Voting for the FOMC monetary policy action were: Alan Greenspan, Chairman; Timothy F. Geithner, Vice Chairman; Ben S. Bernanke; Susan S. Bies; Roger W. Ferguson, Jr.; Edward M. Gramlich; Thomas M. Hoenig; Donald L. Kohn; Cathy E. Minehan; Mark W. Olson; Sandra Pianalto; and William Poole.

In a related action, the Board of Governors approved a 25 basis point increase in the discount rate to 2 1/2 percent. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas and San Francisco.

It is said it takes 6-9 months for higher oil prices to affect the economy -

Six-9 months oil prices were nowhere near today's prices - the bulk of the increase has occurred in the last 3-4 months thus it was the initial upsurge in oil prices from the high $20's to the lower $30's that is BEGINNING to show up and slowing down the US economy

The 2004 Oil Shock And Awe may be defined as "transitory" if transitory means a slowing China (unlikely - and a slowing US military spending - highly unlikely) Thus the "transitory" is longer than many expect.

The Feds have merely added a "cushion" to respond to averse and disastrous occurences

The markets are still to "absorb" the meaning of higher financial carrying costs.

All Aboard The Gold Bull Express - Part ll

misetichReality Check: U.S. Steel Prices Soar to New Highs in August Aug 10 / 9:26 EDT#1236438/10/04; 15:25:33


NEW YORK (MktNews) - Steel prices have skyrocketed into
new record territory, driven by surging raw materials costs and domestic and global demand, with the trajectory seemingly unabated by this summer's economic hiccup, say steel industry executives.

Hot-rolled sheet, a benchmark product, has tripled to about $800 ton (including surcharges) after having sunk to around $260 a ton early in 2003, officials say.

The main driver is raw materials, with some grades of scrap steel fetching up to $400 a ton, almost quadrupling last year's lows, in addition to galloping increases for iron ore, coke, limestone, energy and transportation - all of which are being passed on through surcharges.

With softening demand from China and the dollar's partial recovery against most floating currencies, the U.S. is back to its former status as market of choice for foreign suppliers, with finished-steel imports having reached a two-year high in June, according to industry data.

"It ain't over yet -- prices just continue to go up," said Michael Siegal, CEO of Olympic Steel, a large service center based in Cleveland.

"People said $600 couldn't happen, then they said $700 couldn't happen, then $800," Siegal said. "They're no longer saying anything about $900, so $1,000 is the new threshold. I'm not saying it will happen, but I see no reason why it can't."

Even in the face of the slowdown in economic growth this summer, he sees nothing to brake the price spiral. "There's been no slowdown in demand. Absolutely none," he said.

How long can this go on? "These prices can be sustained for now -- even over time. But that will depend on a number of factors, including
currency valuations, whether demand falls off,
He sees prices continuing higher because of a cost-push from raw materials. "A big part of it is the cost of coke, limestone, iron ore, natural gas - mills just won't budge on pricing." Also, with just three major players remaining, Nucor, ISG, and U.S. Steel, the producers are
calling the shots on pricing.

Clients are still on allocation, although the problem appears to have abated somewhat.

"Pricing is at an all-time high - at least as high as I've seen in my career, which is going on 30 years," said Dan DiMicco, president and CEO of Nucor, the steel-making giant based in Charlotte, North Carolina.
"The other thing at an all-time high is raw materials costs."

He sees raw materials driving the increases, particularly with some grades of scrap steel now as high as $400 a ton, a sharp increase from about $114 a ton early last year. Other inputs are up substantially, including coke, energy, iron ore and transportation, he said.
Labor costs are not an issue for producers - and while there has even been re-hiring on a small scale, the industry's focus is on productivity improvement - and DiMicco regards the three million manufacturing jobs lost during the downturn as permanent.
"It will take a couple of years to add capacity in
the way of ore mines, coke ovens and mills." Importers are meeting some of that demand. DiMicco said strong prices domestically and "a little softening" of demand in China has largely restored the U.S. as a market
of choice for foreign producers.

Some more "transitory" issues for Sir Greenspan - as raw material prices sky rocket

The 2004 Oil Shock And Awe is barely underway....

Consumers and corporations are being hit hard by price increases of raw materials, property taxes, medical costs, transportation costs, and finished goods.

The "soft patch" is quicksand and today's 1/4 point increase will further deteriorate economic activity as ANOTHER indirect tax has been levied on the consuming public

All Aboard The Gold Bull Express - Part ll

misetichEx-Fed's Meyer: Oil Prices Now Biggest Risk Factor; 'Daunting' #1236448/10/04; 15:42:47


Interviewed on CNBC, Meyer said he still believes in his forecast for a steadily improving economy and a quarter-point rate hike every Federal Open Market Committee meeting so that the federal funds rate is at 2.0% by yearend.

However, he said, the alternative scenario is that the FOMC stays put in September and raises rates only every other meeting.
Asked about the danger of high oil prices precipitating
stagflation, Meyer answered, "I think the danger is considerable. Because the biggest contingency, the biggest risk factor is that oil prices will stay as high as they are, already close to $5 above where most of us expected it to be just a couple months, even a couple of weeks ago and there are still upside risks because of geopolitical

So, Meyer added, "that is the biggest risk. Higher oil prices mean higher inflation, also greater weakness on the real side and create a daunting challenge to monetary policymakers."

Japan has maintained its emergency rates, EU is standing still, China (the global engine) is still monitoring ahead, the US economy which has relied on stimuli, 11 IR cuts, tax stimuli, lower currency is being threatned by slower growth, lower corporate earnings, virtually non-existent job creation and derivatives, over derivatives are being held by the consumer spending

Consumer spending, is declining as Real Price Inflation, low wage increases, and now higher financial carrying costs.

In addition Asset Inflation is under the same threat- as the SM have attested to already being comitose for the last 7-8 months

The pillar of strength - housing - has now come under stress from rising raw material costs + higher IR's

All Aboard The Gold Bull Express - Part ll

USAGOLD Daily Market ReportPage Update!#1236458/10/04; 15:46:46">
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.

----closing market rap----

COMEX gold traded a tight range Tuesday in the run-up to the widely expected Federal Reserve announcement after the precious metals market closed that U.S. interest rates would go up another quarter percentage point, even as it acknowledged economic growth had moderated.

December gold settled down 70 cents at $402.30 an ounce.

In lifting the target for the fed funds overnight lending rate between banks to 1.50 percent from 1.25 percent, the Fed said the economy was poised to pick up after a slowdown. The closely scrutinized statement also noted that the softness in growth was caused by substantial rise in energy prices.

Paul McLeod, a vice president of bullion trading at Commerzbank said he saw the remarks as neutral. "We may try to read into it that they may not continue with 25 points at every meeting for rest of this year," he said. "They may want to see another employment report or two. So potentially it could become bullish for gold."

Financial markets have begun to scale back bets in fed funds futures that the Fed could hike several more times this year, given ample signs that the economy is going through a sluggish period. Still, record high oil prices have brought the spectre of rising inflation, even if it threatens to choke off growth.

----(see url for access to full news, 24-hr USAGOLD newswire)----

misetichPeter Alford: Japan's wild ride on China's prosperity#1236468/10/04; 16:03:50,5744,10406177%255E7583,00.html


Japan's GDP growth is generally expected to slow to between 2 per cent and 2.5percent, from 4.5 per cent this year (with as much as 2 percentage points of that attributable to Chinese demand). But there are others, like ING Financial Markets chief Japan economist Richard Jerram, who dismiss the likelihood of any serious slowdown.
Releasing the latest figures last week, Vice-Commerce Minister Yu Guangshou said China's total foreign trade for 2004 was expected to exceed $US1 trillion, displacing Japan as the world's third largest trading economy.

Japan's wild ride with its big, boisterous and sometime belligerent neighbour doesn't look like ending any time soon.

CHINA's economic growth has created unforseen and unexpected events and economic challenges.

All Aboard The Gold Bull Express - Part ll

White HillsMisetich inflation#1236478/10/04; 16:54:54

Sir, Thanks for the reply. There is no doubt that inflation is greater than the present statistics released by the government indicate. This is nothing new, designing statistical platforms in order to launch a barrage of info to indicate the opposit of what really is, governments the whole world over do it.Being a little older than probably most of the posters on this form I remember what things cost and what they are worth. The AMAZING increase of the value of real estate in many areas are astonding. Example: My son bought a house in Cerritos, California about 4 years ago and paid $204,000.00 for it. I almost had a heart attack. It is a 3 bedroom house, concrete foundation, at about 1500 sq ft. Lower-middle class neighborhood right next to a freeway, his southern property line is the freeway fence. Not exactly the Taj Mahal. Recently we talked and he is thinking about selling and moving to the mountains somewhere in California. He figures that he can get at least $540.000.00 dollars OR MORE Based on recent sales of houses in the area. My nephew bought a house in Mt Shasta, California three years ago for $640,000.00 and recently was offered 1.2 million, that he did not take! SOMETHING IS WRONG, something is really out of kelter. Such an imbalance indicates to me that something is really out of wack in our economic system. Has the value of these houses gone up or has our dollar fell farther that we are aware of. Somewhere out there is the perfect storm brewing for our economic health. My advice to my son was to not borrow any money but to get out of debt buy gold and refuse to participate in the coming economic storm. White Hills
TownCrierWake the kids and phone the neighbors!#1236488/10/04; 17:03:48

I can only hope that my illustration is not a blight upon Smeagol's wonderful epic.

You can find the complete tale gathered right here... "The Rhyme of the Ancient Gold-Mariner".

see url


Federal_ReservesFamous last words?#1236498/10/04; 18:03:04

"the Committee believes that policy accommodation can be removed at a pace that is likely to be measured"...

Yeah sure. Once the economy tanks Greenspan's crew are the ones that will be "removed" and its not likely to be measured. Greenspan has run things to long and into the ground. Well past due.

otish mountainreminbi yaun#1236508/10/04; 18:11:15

A few months ago there was a lot of urging by the US manufacturers for the Chinese to re-peg their Yuan at a higher rate of exchange to the US dollar because of the percieved unfair advantage offered by this existing arrangement.
I have heard little of this complaint lately but have pondered what the outcome would be.
First of all this would be bearish for the US dollar and bullish for the Yuan. Holders of US instruments in China would see their holdings loose value and they would be inclined to convert them to Yuan denominations.
As well this would increase the buying power of the Yuan which in turn would increase prices of commodities already well bid on the markets today.The other side being a weaker US dollar causing commodities to rise in price to adjust.
The outcome could well be what the manufacturers do not want which will be added fuel for inflation.
Big inflation coming our way I think.

Any thoughts.

melda lauremy goodness!#1236518/10/04; 19:24:28

Well Smeagol, I'm nigh well speechless! I'll have to read it over a couple more times of course, but I promise not to make any suggestions. I don't suppose anybody will set it to music? Hmmm? Volunteers anyone? I see; well Sir, you are a class act and no mistake.

So what happens 50 years in the future? I dont suppose adventures ever end, do they now? (wink!) It is one and the same with the gifts of men that they live but for a time, and so with their works whether great or small. "Our Legacy," said Manco Capac, "is the green earth, if we are true." Though perhaps our host might one day put the whole archive on a CD boxed set so we can stuff it in a time capsule for our grandchildren.

If so, I forsee that yours will be the only part they read. Economics is not a subject that is taught anymore, nor are there but few stories that tell that tale. What is told is but the echo of a time long past, a barbaric age of conquest, rape, destruction, enslavement. Though if life was more difficult, those honest traders were necessarily more honest, money more dear, and credit less worthy.

cuio nin mellon.

melda laureRenmimbi Peg#1236528/10/04; 19:36:36

Dollar Peg.
Yen-Dollar-Euro Peg.
Euro-Peg. (and if oil is ever priced in euros, is this effectively a...)

The key question, (apart from "how long can they afford to do this?") is what benefit is derived? And like a lamprey, they are attached to a host. The host gets milked. The lamprey swells (and its industrial base expands). Why should the eel EVER leave?

a. The host dies.
b. The eel finds it can live on it's own.

Toolie@otish mountain#1236538/10/04; 20:41:26

---The outcome could well be what the manufacturers do not want which will be added fuel for inflation.---

You are absolutely right! US manufactures get it from two directions.

If the FED is to maintain stable employment, it will provide adequate money to the most efficient users ie… retailers – a small investment recoups a large profit. Manufacturers on the other hand, must invest in machinery and a skilled workforce, which can take a long time to pay off. It is a much more efficient use of FRNs to employ non-productive labor. It was "Triffin's Dilemma" now its Greenspan's. U.S. Manufacturers must in essence compete with the productivity of the printing press (as the fed will create only enough money for only the most efficient users to create full domestic employment). They must also compete with a foreign economy that is not burdened by a reserve status currency, while those foreign producers inflate prices of the same desired commodities.

There is no way out except the loss of reserve status.

CometoseFreeport McMoran Copper and Gold #1236548/10/04; 20:41:33

I gues Freeport didn't understand what was happening today because inspite of the Fed's rise in Interest Rates and
Gold fading .......someone thought that It should be party time and decided to go on a wild spending spree in
the shares of Freeport.....

Kinda reminds me of a Captain taking RUM in the middle of a TEMPEST/ Storm on the Horn .

Dollar Bill.,.#1236558/10/04; 21:08:59

Mr Gresham, Happy anniversary!
Heck, you dont need to deal with the big issues to post, just type up some thoughts on what you see locally and also anything that catches your eye on your vacation. On feller just posted about his son and the price of the offers he got for his house.....that was plenty interesting to me.
A toast back at you :)

Smeagolmosstly, of Houses and It#1236568/10/04; 21:29:59

TownCrier (8/10/04; 17:03:48MT - msg#: 123648)

O! Far from it! Well done, Ssir Town Crier!

melda laure (8/10/04; 19:24:28MT - msg#: 123651)
...thankss for the kind words! WE certainly aren't going to ssing it - we wants to keep possting here! (grin)

White Hills (8/10/04; 16:54:54MT - msg#: 123647)
"Has the value of these houses gone up or has our dollar fell farther that we are aware of. "

sss...usually even well-kept houses depreciate in value, in the face of a STABLE money-unit, as Time passes...yess... floating dollar-units are very ssmall nowadays and shrinking every day... and though there may indeed be a bubble, whether or not People in America realize it they are cassting an overwhelming vote of NO CONFIDENCE in the paper by throwing piles of them around like that.

sss... a thought... in 1970 the house we lives in was built for $15,000, and an ounce of It was $35. The house, now 34 years old, could now be ssold for $170,000 (with a little fixing-up), and It can be ssold for $400. The house and It haven't changed in value compared to each other, and It is available at the SAME price comparable to that which It could be got before the unhinging of the dollar from It, and the run-up that followed!


P.S. Ssir Cometose, rum or no, Goldheart knows what he's doing! (grin)

White HillsSmeagol, inflation#1236578/10/04; 21:56:07

Sir Smeagol, Of course you right value hasn't changed. I will buy some more gold snd also get my shovel and go dig up some more on Saturday. Thanks for your thoughts and by the way loved your poem it will be read by many visitors to this Forum for I expect many years. White Hills
SmeagolGood luck!#1236588/10/04; 22:08:16

White Hills, gold nuggets
May your shovel shine with it,
best payment there is.


HeathenBin Laden threatens major political assasination-The Drudge Report#1236598/10/04; 23:31:36

The Washington Times," Rev." Moon's rag, will run the story by Bill Gertz.
misetichIEA: High Oil Prices Likely to Persist#1236608/11/04; 07:34:03


"Limited spare production capacity combined with security warnings and headline news about Russia, Iraq, Venezuela, China and monthly employment, industry activity and confidence statistics are propelling the market," the Paris-based agency said in its monthly report.
"The market is tight, production and infrastructure capacity is less than desired and uncertainties continue to weigh on the market," it added. "But, does this justify $45 oil?
"Relatively high prices throughout the futures strip suggest that current sentiment leans toward expectations for high prices to continue through the winter and into next year," the IEA said.

"It is important to note, however, that sentiment is fickle and can change rapidly subject to new events."

"But, does this justify $45 oil?

...the same could be applied to White Hills example of a 3 bedroom home valued in excess of $500 thousand or a cup of coffee at $3 + or an apartment in New York or LA going into the stratosphere?

Rather than approaching and attempting to resolve the issue of diminishing resources by implementing more efficient means and encourage conservation, the "powers" stubbornly insist on the wrong path - since their "foundation" was built on "cheap" priced resources

For example Japan outdistances the US in the efficient use of oil -

Adjustments are being made by consumers - by spending less on other items, but still maintaining their energy consuming habits

The "Redbook" Sales Report for August, indicates consumer spending is waning - continuing the June & July "soft-patch"

On the other hand - demand is still rising as oil is burned up by military requirements and the materials, manufacturers and fabricators that are very busy

The woes will continue as long the Chinese economy keeps on growing 7-10% per annum

..and the woes will continue for other factors re: Russia, Venezuela, Middle East

All Aboard The Gold Bull Express - Part ll

Mr GreshamDollar Bill#1236618/11/04; 07:47:09

Thanks! That's the spirit I love to read here. I'll confess that April took quite a bit out of me, and it was my wake-up call to make some other things work for me, rather than relying too heavily on the particular interest we all share. I feel like I'm always playing catch-up, but then that's also the feeling when one is being heavily exposed to new education.

(Now I'm finding more comfort in the more basic daily routines I'd avoided before, and also not spending as much time reading to confirm my "bearish" views -- sometimes that hammer pounding away can wear me down, and so I've pulled back to ask myself WHY I was always telling myself that story.)

Also, an indicator would be that if I am at breakeven overall, why is it so disappointing to me? Too high expectations, maybe? Just the exhaustion of the roller-coaster ride, likely. V-A-C-A-T-I-O-N! (That's when all hell always breaks loose, anyway ;)

KnallgoldDurban Deep#1236628/11/04; 08:11:59

There seems to be Another Durban Deep calamity,down almost 30% the last 2 days.This is the first time I'm really thankful to have abandoned the Goldshare market.I have just a small position left in a junior (itself 50% in the red...).Yes,years ago,I used to have thousands of stocks in Durban Deep,like many I guess.This fall would have hit my nerves definitively,I'm sure.
To win,you have to be more right than wrong.While physical isn't performing at all (in sFr.),it has certainly started to outperform the sinking stockmarket the last months.Reality is biting the optimists now.

Go Gold!

geUK net oil importer for first time in decade#1236638/11/04; 13:18:44

White HillsChina#1236648/11/04; 14:51:45

Sir Mistich, Chinese economy at 7-10 growth per annum? Maybe someone can explain to me the advantage to being the CONSUMER NATION to the World and particularly CHINA. Is the advantage for consumers in this country to be able to buy a thingamgig at Wal-Mart and save a couple of bucks? Is the advantage to lose all the jobs overseas to manufacturers that are making thingamgigs that we could really make ourselves? Is the advantage to have a big trade deficit so we can transfer our wealth overseas by shipping $$$$ overseas and then printing some more??? Is the advantage that we will be able to lower our standard of living to levels of all the third world countries? Is the advantage that we can allow a flood of ILLEGAL ALIENS into this country so that we can force the price of labor down and somehow try to compete with the third world countries. Is the advantage that we can buy more foreign oil and put our economy at risk of disruptions over some nut in (pick your own) Venezuela, Mexico, Saudi Arabia and generally the Middle East??? Is the advantage that we don't have to drill in our own country and use our own resources??? Is the advantage that we don't have to have an ENERGY PLAN for the 21st Century???. Is it an advantage to be sacrificed on the ALTER OF GLOBILAZATION???

Sometimes living in the desert makes you a little nuts. White Hills7

TownCrierOn such a slow news day#1236658/11/04; 15:15:43

Try committing this to memory for later recitation around the nearest campfire.

Again, Smeagol, I couldn't possibly be more thrilled with how vibrantly you captured it all... the essence of the sinking of the gold Standard, the rise and fall of Derivatives, and the final triumph of physical gold.


BoilermakerWhite Hills "Sometimes living in the desert makes you a little nuts"#1236668/11/04; 15:20:24

Don't feel alone on this crazy "economy". I'm living in NE Ohio seeing lots of rain, green grass and trees. In fact I'd welcome a small drought to slow down the grass.
But.... the same stuff bothers me to the point of nuttiness and has for the past decade and more.

Don't get crazy, get gold.

Cheers, Boilermaker

misetichUPDATE 1-U.S. budget deficit wider than expected in July#1236678/11/04; 15:37:36


WASHINGTON, Aug 11 (Reuters) - The U.S. federal government ran a larger-than-expected budget deficit in July, bringing the year-to-date shortfall between receipts and spending to almost $400 billion, the Treasury Department said on Wednesday.

In its monthly budget report, the Treasury said the July deficit was $69.16 billion, based on revenues of $134.42 billion and spending of $203.58 billion. That was above the $61 billion shortfall Wall Street economists had expected and wider than July 2003's $54.24 billion deficit.

With only August and September left in the 2004 federal budget year, the red ink through the first 10 months totaled $395.78 billion. That's ahead of the revised record budget gap in 2003 of $374.27 billion.

The final 2004 gap is widely expected to set a new record topping $400 billion. In its recent budget review, the Office of Management and Budget said it expected the deficit to be about $445 billion this year, while the Congressional Budget Office has projected a more conservative $422 billion.

With the economic slowdown ahead revenues will decline and spending will continue ahead

It requires over $1.5 billion per day to fund the accumulated debt which stands at

08/10/2004 $7,308,629,683,239.34

In addition the trade deficit adds additional woes -

With the SM pointing downwards - negative returns on money market funds and long-term IR yields being "manipulated" by the central bankers of China and Japan there's only one way for the US $ -

All Aboard The Gold Bull Express - Part ll

Ag MountainWhite Hills's questions#1236688/11/04; 15:39:46

"Maybe someone can explain to me the advantage to being the CONSUMER NATION:
1) "Is the advantage for consumers in this country to be able to buy a thingamgig at Wal-Mart and save a couple of bucks?

2) "Is the advantage to have a big trade deficit so we can transfer our wealth overseas by shipping $$$$ overseas and then printing some more?

3) "Is the advantage that we will be able to lower our standard of living to levels of all the third world countries?"

1) Yes.

2) Sorta. It is an immediate advantage to us and anyone else who can print or borrow IOUs endlessly from the store where they shop for the goods that they want.

3) No, you have it backwards. It's not the person having the $$$$$ or IOUs that has increased his standard of living. He's only increased a number in an account expressed on a page with his name on it. All the numbers in the world don't do anything to fill your air with music, put pictures on your TV, or litter your shelves with tools and table with food.

Don't you see? The person with the improved standard of living is the one who is holding and using all the thingamagigs. That's US.

The low standard of living belongs to those who are trading away real things in exchange for our depreciating IOUs.

That's how I see it. The US might as well milk this cow for as long as it's still standing. Someday the rest of the world will wake up and see how poorly it has done trading away its real wealth of thingamagigs. Isn't it sad when a person over there somewhere who labors cheaply making TVs or warm coats in a factory all day long doesn't even enjoy one for himself? But boy, howdy, he sure does live high on the hog with our IOUs received for his cheap things??????????! I don't think so!!!!!

misetichTalk From The Trenches: Could Oil Sink the Economic Ship?#1236698/11/04; 15:56:04


NEW YORK (MktNews) - Fed Chairman Alan Greenspan is now
being likened to Civil War Admiral David Farragut, who doing battle in New Orleans in 1862 barked out the now famous command, "Damn the torpedoes! Full steam ahead!"

Bank of America also says, "While we agree that oil has been a contributing factor to the recent slowdown, the problem is the Fed has not told the market its response function to energy prices, which has both inflationary and contractionary effects. Undoubtedly, this presents
a daunting challenge to the Fed and increases the risk of stagflation."

Sir Greenspan is risking whatever creditabiltiy he had as the markets are mesmerized and dumbfounded by his recent forecasts

All Aboard The Gold Bull Express - Part ll

misetichReality Check: U.S. Lumber Execs: Prices Seesaw at 5-Year Highs Aug 11 / 10:13 EDT#1236708/11/04; 16:03:31


NEW YORK (MktNews) - U.S. lumber prices are seesawing at five-year highs on record demand from residential building and remodeling and tight supplies fomented by transportation bottlenecks and diminished capacity at mills, industry officials say.
Average monthly framing lumber composite prices hit a cyclical peak of $456 per thousand board feet in May, retreated to $423 in June then sharply turned up to $472 the first week of August, 52% above the prior-year price of $311, said Random Lengths, an industry publication.

In the last 3 days, I've posted anectodal reports from the construction industry, covering cement, steel and today's lumber.

All 3 reports suggest price increases in excess of 30-40% -

According to published reports up to 70% of US citizens own homes.

Home improvements takes quite a chunk of the disposal income and it wouldn't surprise if this was an added reason for the recent consumer spending deceleration

The effects of The 2004 Oil Shock And Awe are being underestimated

All Aboard The Gold Bull Express - Part ll

misetichUK net oil importer for first time in decade#1236718/11/04; 16:16:18


Britain became a net importer of oil in June for the first time in 11 years, official data showed on Tuesday.

News of the shift came as world crude oil prices touched record highs this week of $41.70 for benchmark Brent crude and $45.04 a barrel for West Texas Intermediate. The US government on Tuesday raised its central price forecast for US oil this quarter by $4 a barrel to $41 a barrel and predicted prices close to $40 a barrel next winter and in 2005.

The UK's oil imports were at their highest-ever level in the second quarter, according to data from the Office of National Statistics, a government agency. Meanwhile, oil production peaked in 1999 at 2.8m b/d, and has since been falling as the North Sea's reserves have been depleted. Wood Mackenzie estimates UK oil output at 2.2m b/d, and some forecasters see production declining to about 2m b/d next year.

Oil global demand is increasing - supply is tight - geopolitical risks are HIGH

The 2004 Oil Shock And Awe is continuing

All Aboard The Gold Bull Express - Part ll

USAGOLD Daily Market ReportPage Update!#1236728/11/04; 16:20:16">
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.

---closing market rap (excerpts)-----

Gold futures prices fell Wednesday, closing under $400 an ounce for the first time in four sessions, following the Federal Reserve's decision to boost a key interest rate.

On the New York Mercantile Exchange, December gold closed at $397.90 an ounce, down $4.40. It was the contract's first close below $400 since August 5.

"The Fed had no choice to raise rates again despite a clear economic soft patch afoot," said Peter Grandich, editor of the Grandich Letter, an investment advisory publication. "To have notraised rates after such a fanfare last time around could have made the Fed look wishy-washy. He added that fears that a lengthy campaign of interest rate increases would boost the dollar and weaken gold may linger, "but they have even less of a real foundation to stand on then they did for the previous rate hike."

The U.S. Federal Reserve's decision to stay the course on monetary policy tightening has pushed gold lower, but traders and analysts in Asia say gold will remain well supported in the coming weeks and months.

...with several major events coming up - the Olympic Games in Athens, the Republican National Convention in New York and the U.S. election in November -gold market participants say the yellow metal is likely to retain a safe-haven premium for some time to come.

Jonathan Barratt, head of foreign exchange and metals with Tricom, a private investment company in Sydney, said "Leading into a general election (in the U.S.), the dollar tends to (rise), but we really haven't seen a lot of that yet."

"There's still a genuine concern that someone is about to do something and I think that will weigh quite heavily on the U.S. dollar and keep gold well supported," Barratt added.

Another reason why Barratt and others say gold is unlikely to fall much below current levels is the prospect of increased physical buying.

With the wedding season in India approaching, gold watchers are beginning to pay close attention to the physical market, even if it usually takes a back seat to investment demand [i.e., derivative usage] as a price-driving force.

India is the biggest importer of gold in the world.

"India's monsoon rains have picked up in recent weeks, after being 12%-15% below normal in the early part of the season that began in June," Commonwealth Bank of Australia commodity strategist David Thurtell said. "A more normal monsoon season bodes well for gold demand," he said of India.

...the Middle East is also witnessing steady demand as high oil prices have given a boost to regional incomes.

---(see url for access to full news, 24-hr newswire)-----

BoilermakerAg Mountain #1236738/11/04; 16:40:57

Au contraire on your respose to White Hills rant. Getting real things from foreigners for paper $$$ may seem like a great scam for as long as it lasts but it won't last and that's the problem.
It's like a drug dealer getting his "customers" hooked on free stuff and waiting for the "addict" to fork over his life savings to get the next fix. There is not a happy end for this free lunch era.

TownCrierReasons new supply gets harder to tap into every year#1236748/11/04; 16:44:21

DONGGALA, August 12 (Jakarta Post): A senior official has said the Donggala administration will soon cooperate ... to find out whether gold deposits exist in Malei subdistrict. . ..... preliminary evidence recently that traces of gold had been discovered in soil, in some parts of the subdistrict.

However, the planned survey soon drew protests from environmental activists in the province. Nasution Camang, director of the White and Red Foundation, said he would organize mass protests if the administration proceeded with its plan to commence gold mining in the subdistrict.

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

Not only are proven reserves being mined each year into ever smaller ore bodies, but also what few new discoveries there are are themselves up against various natural and social impediments to further developments toward mineral exploitation.

To suggest there is currently a safe-haven premium on gold is ridiculous. The truth of the matter is that instead of a premium, gold is actually available ultra low through the pricing mechanism of the derivative markets that seem to operate on the exuberantly optimistic assumption that all related paper promises and prospects will pan out without default, roadblock, or disappointment of any kind whatsoever.

In what world has that ever been known to happen?

Stake your claim from among the readily ownable stockpiles already above ground and up for grabs at these optimistic discounts, and enjoy the ride as reality will someday return to the market be it either rudely or else (hopefully) gracefully.


Ag Mountain@Boilermaker#1236758/11/04; 17:02:29

Just like you are saying I, too, said it wouldn't last forever, but in the meanwhile we get while the getting's good. Which brings me back to my point. When the day comes that we can't keep finding suckers to take our IOUs, big deal 'cause we're already so far ahead of the game sitting on all the real stuff they gave us for the wacky privilege of holding our monetary promises instead. Just because our punchbowl will be taken away someday doesn't mean we can't continue dancing around drunk for a good long time with what we've already gotten ahold of. We can all figure when the hangover comes that we won't be feeling any better than we are today, but because we've already got all these thingamagigs laying around made by the rest of the world to improve our standard of living we certainly won't be having things worse than they are having things now. Our IOUs that they're holding now will be depreciating so there's no way those poor saps will simply be able to buy all of their old stuff right back with any prayer of breaking even on the whole affair.

If you think our standard of living will drop below where they are now I'd sure like know how you figure it.

BoilermakerAg Mountain "If you think our standard of living will drop below where they are now I'd sure like know how you figure it"#1236768/11/04; 17:49:31

I do not understand/agree with your thinking. If we're getting a free lunch as we both agree and then it stops, how can we, US consumers, expect to dodge the reality of no free lunch? Isn't this a negative change in our standard of living? The thingamajigs we have accumulated from abroad have a finite life. Some, like oil, get used up in days. Other stuff like autos and TV's are longer lived but require energy and/or parts to run them. The US has the potential to become a pariah economy like Cuba where new thingamajigs are very scarce.
Thingamajigs do not make a sustainable economy. Energy, infrastructure and industrial capacity make a sustainable economy. Perhaps we will be doing the world's laundry to keep the thingamajigs coming. That's not my definition of maintaining our standard of living.

White HillsAgMountain#1236778/11/04; 18:09:52

Sir, The reason I asked those questions was not because I already knew the answers but to provoke a discussion, which they did. Believe me if I knew all the answers then reading this website everyday would be a waste of time. Thanks for your answers and thanks to Boilermaker for his reply to your reply. There are still questions to be answered and hopefully they will be, after all this entire forum is used by some of us as an economic education with GOLD at its center.
Boilermaker, Come on, a rant?? White Hills

DruidWorld oil demand estimate raised#1236788/11/04; 18:37:55

The International Energy Agency has revised upwards its estimate of world oil demand, quashing hopes of an imminent decline in oil prices.
The IEA said in its monthly oil market report that demand for oil was running at 82.2 million barrels a day, 750,000 more than previously thought.

Demand growth this year is running at its fastest level in 24 years, the Paris-based organisation said.

Brent crude futures edged up nine cents to $41.37 as traders digested the news.

US light sweet crude futures, which briefly touched a 21-year record of $45.04 on Tuesday, rose 15 cents to $44.67.

Price pressure

Analysts attribute the surge in demand to a surge in consumption triggered by the US economic recovery and China's economic boom.

Druid: The IEA with all their credentialed gurus need to contact BB and Misetich for more accurate predictions and analysis. I didn't see any mention of too many frn's chasing to little oil supply, in addition to increased physical demand, which is putting further upward pressure on oil prices. Who knows, instead of the old gold/Dow ratio of yesteryear meaning anything significant, maybe in the near future one oz of gold will equal one barrel of oil? Let them wrestle with that one.

Smeagol, priceless.

Smeagolperhaps ssooner, perhaps later... but the music WILL end#1236798/11/04; 18:45:05

lyrics & music: Marian Gold - Bernhard Lloyd - Ricky Echolette (ALPHAVILLE)

we waste our time with big illusions
talking to the walls
but jericho will never fall
we sold our trumpets long ago
exchanging all the best we had
into atomic masterplans
we read the books we had our chance
we spend the world for just one dance
so keep on dancing, all you fools
the cups of fury have been filled
so keep on dancing, all you clowns
lets have sip before we're killed
so keep on dancing
these politicians make me sigh
democracy is just a lie
as long as we are rich enough
each government will do for us
we feed like vampires on the world
we are the first, they are the third
there ain't no hope, we had our chance
we spent the world for one last dance

7 seals...
7 trumpets...
7 plagues...
7 cups...
7 angels...
the scarlet beast...
mother of harlots...
faithful and true...

...Faithful and True...


slingshotThe Prophecy of Oro#1236808/11/04; 19:31:16

The Captain of the Guard went down into the court yard. There he found many Knights, more than he needed for the mission. They assembled at the gate. The gathering drew the attention of others walking the grounds.
Then standing in their mist he spoke aloud."Sir M.K. requests two Knights to ride for each village, all the way to Hammerton. The purpose to report anything that endangers us. Should they find a threat, one would at once report back while the other help those of the village in what ever manner he deems prudent". From within the crowd was heard.
"A large task for that amount of men. Can you send more if we volunteer?
The Captain of the Guard knew that question was to be asked for all Goldbugs enjoy adventure.
"I suppose so. That of course provided that you all do not leave the castle undefended"'said the Captain. Laughter cascaded in the group.
"Draw lots to make it fair amoung you and I will adjust the numbers as I judge necessary. Assemble outside the castle when you have finished", and the Captain walked through the gate and awaited the Knights.
A short time later, more than forty on horseback was eager to ride. Not to be out done, a few Ladies of the Court and Honored Members of the Table, presented themselves to the Captain of the Guard.
Looking at them all, the amount of riders was sufficient.
At least five to each village and the castle had more than enough left to defend itself.
"Be swift and vigilant" said the Captain and with that they were on their way along the road to Hammerton.
Sir M.K. and Sir Black Blade watched as they rode off from atop the castle wall.
Gandalf, Bandit and Misetich headed west at a steady pace even as the countyside was not hospitable to them. They had to reach the sea and find Oro. This worried the Wizard and was confirmed as they met a traveler on their way.
As they broke through the forest upon an meadow the three notice a horsemen galloping at full stride to the south." Shadowfax" said Gandalf and instinctively the horse knew what was needed of him. Bandit and Misetich followed behind as the distance between Gandalf and them grew.
Shadowfax glided over the earth as man and rider became one and within a short time had caught the rider in flight.
Gandalf brought Shadowfax alongside to slow the rider only to see the rider unsheath a sword and prepare to strike Gandalf. Seeing this posture of the man, both Misetich and Bandit drew their own and spurred their horses to close the gap between them and Gandalf.
Gandalf brought Shadowfax to bare in front of the riders horse to stop him and as he did so the rider swung his mighty blade, barely missing taking off his head. Misetich and Bandit could only yell in anger as they bore down on the rider.
Breaking to the right and away both riders came to a standstill facing each other. The frightened rider backing his horse away from Gandalf and bringing his sword again quickly to a striking posture. Yes, you could see it in the mans eyes he was frighten beyond life and he looked at Bandit and Misetich approach him with their swords held high.
"We mean you no harm" yelled Gandalf and waved his arm to ward off the attack.
As the horses moved in unsure steps trying to obey the commands of their riders, slowly they calmed to come still and look at each other in unsureness.
"We are your friends" said Gandalf. The rider held his sword high and looked time after time at each of the riders before him.
"What is your name" asked Gandalf. Seeing that they were not engaging him the rider replied. "Otis Mountain"
" Lower your sword, Otis Mountain and we shall talk, said Gandalf. Otis Mountain would not lower his sword and stared at Misetich and Bandit for they had their swords high.
"Lower your swords. How do you expect him to trust us while you display such a manner" said Gandalf. In unison the men lowered their weapons.
"There, that's better. Why do your ride so hard, Otis Mountain",Gandalf said in a calming voice.
"They are not far behind me" said Otis Mountain. "Who are they?", asked Misetich. "The Dark Riders" 'said Otis Mountain. And with the sounding of his last sylable, hoves could be heard.
They stood quietly as the sound became louder.
" Let us take cover in the brush and lay the horses down or they will see us" said Otis Mountain. The four hurrily rode to the small brush outcrop and layed their horses down. A few minutes later, Dark Riders galloped over the small knoll that hid them from sight.One Hundred , Two Hundred, Three hundred and the smell of driven animals filled the air. Bandit being close to Misetich asked, "Where do they ride? "To Hammerton" injected Gandalf. "As we encircled it, they will do likewise and I fear none will survive".


slingshotTo Smeagol#1236818/11/04; 19:36:54

Thank You for your Inspiration.


SmeagolSsomebody ssave uss !#1236828/11/04; 22:27:12

sss... what's this... ssome ssongs in the Hall of Fame, re-writes by a Knight by the name of Ssir Goldfly... ACH! NO, don't read them, precious you know what that leads to... sss! DERIVATIVES!... AI! It's too late, one's popped into our head now... no, don't do it!... we has to, we cant resisst, it was SSO easy and we didn't have to do hardly anything! ssee, it's even timely... They'll pull your Pass-word for it, they will... AAAUGH!

(sung to: The Beach Boys "409" Irving Music, Inc. BMI Brian Wilson/Gary Usher)

Gold's real fine at 409
Gold's real fine at 409
At 409

Well I saved my pennies and I saved my dimes
(Giddy up giddy up 409)
For I knew there would be a time
(Giddy up giddy up 409)
When Gold would blow through 409
(409, 409)
Giddy up giddy up giddy up 409
(Giddy up giddy up 409)
Giddy up 409
(Giddy up giddy up 409)
Giddy up 409
(Giddy up giddy up 409)
Giddy up 40...

Nothing can catch her
Nothing can touch my Gold so fine
409 ooooo
(Giddy up giddy up oooo)
(Giddy up giddy up oooo)
(Giddy up giddy up oooo)
(Giddy up giddy up)

When I show her to my buddies she really shines
(Giddy up giddy up 409)
She always smokes in the worst of times
(Giddy up giddy up 409)
My four nine shiny ounce of Gold so fine
(409, 409, 409, 409)

Giddy up giddy up giddy up 409
(Giddy up giddy up 409)
Giddy up 409
(Giddy up giddy up 409)
Giddy up 409
(Giddy up giddy up 409)
Giddy up 40...

Nothing can catch her
Nothing can touch my gold so fine
(409 409 409 409)
Giddy up 409
(409 409 409 409)
Giddy up 409
(409 409 409 409

...sss... you are SSO dead, now, precious!

OvSbugs#1236848/12/04; 01:13:07

Shame on you, mamaboy. And if you didn't
compose it, bugs, get lost for posting
it. Without these 4-letter words it could
make an interesting statement, but this
way it will just get flushed.

Clink!Hot off the wire from Reuters#1236858/12/04; 06:47:05

In a press conference called hurriedly this morning, Denver police declared that there was absolutely no truth to the rumor circulating on the Internet that a certain Mr Gollum Smeagol had died of an overdose of poetry while posting verse on a gold forum last night. After reading her prepared statement, Inspector Barbara Ann Auric declared, "It would appear that reports of his death have been greatly exaggerated. However, I would like to take this opportunity to remind everyone, particularly younger people, that poetry can be addictive. Once isn't too serious, but if you Do It Again, that can lead to much more serious forms of language abuse, such as overlong essays. Wouldn't It Be Nice if we could just say Don't Worry, but God Only Knows when the problem will be Shut Down. I Get Around to talking with a lot of kids in my Little Deuce Coupe, sometimes getting help from Rhonda, the youth liaison officer. Be True To Your School, I say, and just have Fun, Fun, Fun like I did when I was a Growing Up To Be a California Girl." On further questioning, the police admitted that they did not know the exact whereabouts of Mr. Smeagol at present, but believed he may be vacationing on his sloop near Kokomo. "Good Timin'" added Inspector Auric.
TownCrierFed trading desk's first open market ops since new FOMC directive#1236868/12/04; 09:51:21

With the market in overnight fed funds trading at the new 1.5% target, the Fed today injected $13.5 billion in new cash to the reserves of the nation's banking system through open market operations; $7.25 billion through overnight repos and $6 billion via 14-day repos, all provided near 1.48 percent average.


TownCrierEurosystem lets go of 1.3 billion#1236878/12/04; 10:09:26

The consolidated financial statement of the Eurosystem released yesterday for the week ended August 6th reveals that 1.3 billion euro worth of foreign currency was let go, bringing its net position in foreign currency to 172.7 billion euro in value.

Its asset postion in gold stood firm at 127.382 billion euro.

Also during the week the ECB/Eurosystem tightened slightly in policy operations by decreasing its financing to euroland banks by 3 billion euro.


RimhLOL!!!!#1236888/12/04; 10:19:11

Well done, Smeagol and nice follow up Clink! I needed a good laugh this morning! And thank you, Smeagol for the Ancient Gold Mariner, you surely do have a wonderful poetic touch!
TownCrierECB vice President Lucas Papademos interview excerpts#1236898/12/04; 10:35:18

The oil price has reached its peak for the last 20 years (in nominal terms at least). The price since the beginning of the year averages out at $37/barrel. Some governments are already very concerned, talking in terms of an oil crisis, and many are recalling the recession in the 1970s. What is your assessment?

The assessment of the magnitude of the problem and of the potential impact of the increase in oil prices is somewhat complex. It must be put in perspective. Oil prices have been rising since the end of 1998. If we compare the recent increase in the price of oil with two similar episodes, we will note that, in percentage terms, the increase since 1998 is similar to the one recorded between December 1973 and January 1974 and exceeds the rise between the end of 1978 and the end of 1979. The same conclusion is reached regardless of whether oil prices are measured in dollars or in euro.

So there are good grounds for fears of a repetition of the crisis that struck in the early 1970s?

There are major differences from that period. First of all, the increase in oil prices in the early 1970s occurred over a limited, two-month period, whereas the current upward trend in the price of oil has lasted 67 months: it has already exerted much of its impact on inflation and growth. I would also add that, in real terms, the oil price is at a relatively low level and far lower today than it was in the late 1970s. Moreover the reliance of many economies on oil has declined.

In other words, the oil price trend has to be viewed in perspective. All the same, the increase over the last few months cannot fail to make an impact on the European economy, in terms of both a rise in inflation and a decline in growth.

It has been estimated that a 10% increase in the oil price pushes inflation up by about 0.1 percentage point per annum in the first year and by roughly the same amount in each of the two subsequent years. The impact in the first year is mainly direct, whereas the repercussions are indirect in the following two years, meaning that they reflect the effect on the prices of non-oil products and possibly "second-round" influences thorough wages.

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

Higher prices across the board, and continuing for years to come.

What to do when your dollar loses purchasing power with each year, absent access to an iron-clad inflation-hedging derivative? [Because there is no such thing.]

Choose gold.


HeathenAdvice needed.#1236908/12/04; 11:19:38

This post is related to Gold only inasmuch as the amount of money I make is related to the amount of Gold I can buy. I am stuck with a self-imposed deadline to launch a small moneymaking website on Friday and a personal commitment to complete a short article for a colleage's newsletter beforehand. He would understand if I delay further, but that leaves a particularly bad taste in my mouth going into the new webpage endeavor. I've been just frozen all week and the clock is ticking. I can only assume that many of the posters here are successful and may have learned how to 'get unstuck' without cutting and running. Any advice would be greatly appreciated- I realize this topic is more apt for Dear Abbey, but I trust the people here more. Thank you.
Sovereigntest#1236918/12/04; 12:00:57

goldquest@Heathen#1236928/12/04; 12:08:25

Finish the newsletter. Fridays are not good days to start a new venture. Monday is better. Best of luck, whatever your decision may be.
Ag Mountain@Heathen#1236938/12/04; 12:16:43

A self-imposed deadline takes a backseat to a personal commitment to someone else. If you must choose between disappointing one party (yourself) or the other, preserve your reputation by always taking care of the other guy. Then take more care in the future with scheduling so that you're not always shortchanging yourself.
SovereignMy American friends, is this true?#1236948/12/04; 12:20:23

It appears that the Secretary of the Treasury retains authority under a provision of the Federal Reserve Act (12 U.S.C. 248[n]) to "require any or all individuals, partnerships, associations, and corporations to pay and deliver to the Treasurer of the United States any or all gold coins, gold bullion, and gold certificates owned by such individuals, associations and corporations... whenever in the judgment of the Secretary of the Treasury such action is necessary to protect the currency system of the United States...."

If this legislation has not been repealed, then, ironically, the very people who are trying to protect themselves from "the currency system" by buying gold may very well end up being forced to bolster the dollar by turning over their gold to the US government so that it can sustain its ailing currency at US goldbugs' cost.

My friends, I'd look into it, if I were you.

ToolieSovereign#1236958/12/04; 12:49:29

Do you think that they would dig it out of the yard, if I told them where I thought I burried it? I've been thinking of having some landscping done.
Sovereigntoolie#1236968/12/04; 12:59:43

my friend,

I thought that your country was built on the sanctity of private property and freedom. How can you live under such anti-democratic and anti-capitalist laws and prosper?


ToolieSovereign#1236978/12/04; 13:07:24

So we are told.

You have NO rights that you are not willing to defend.

How can we prosper? Gettin' tougher every day.

Thanks for your concern!

RimhAncient Gold-Mariner link#1236988/12/04; 15:18:51

Towncrier, I just tried to go to Smeagol's poem from the "Hall of Fame" link but couldn't find it there. I had to go back to your post of yesterday. Did I miss it somewhere on the HOF main page or is it somewhere else?
GoldendomeSovereign: How can we prosper?#1236998/12/04; 15:31:19

Simple my fried: It's all an illusion, and many of us are not fooled by it. An illusion created with borrowed money from overseas; a central bank that has license through international agreement to run the printing press in the basement, creating all the paper that we need for anything. And have you seen our mountain ranges of debt? They are truely reaching for the sky! The outlook is not too shiney; that's why many of us here trust in the metals much more than the promises of Government!
TownCrierRimh, sorry. No, you didn't miss it for lack of trying.#1237008/12/04; 15:39:06

Providing the link in the index had a lower priority due to other pressing projects, but seeing that it's in want, I've taken the necessary few minutes to add it. I think you will have an easy time locating it now. Look for the ship 'icon' sailing over the haikus.


USAGOLD Daily Market ReportPage Update!#1237018/12/04; 15:58:03">
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.

----Closing market rap, excerpts-----

December Gold futures on the Comex division of the New York Mercantile Exchange settled $1.30 lower at $396.60 per ounce.

Gold prices were buoyed early by the overnight softness in the U.S. dollar and gained additional strength in the immediate wake of the disappointing U.S. July retail-sales data release. U.S. July retail sales rose by just 0.7%, below Wall Street's expectations for a 1% rise, and the news prompted a knee-jerk selling spree in the dollar.

The dollar's early woes heightened gold's allure as an alternative for investors and generated fund and dealer buying interest in the openingexchanges. However, a lack of follow-through interest when Dec quotes surfaced above $400 coupled with the U.S. dollar's resiliency in the face of investor selling soon took gold lower again, and by 90 minutes after the market opened, Comex gold pulled back to the $396.20-396.60 region.

Over the longer run, market watchers expect the U.S. currency to struggle making sustained headway, and that should at least help underpin bullion prices if not provide a platform from which gold can stage a push higher in due course, dealers said.

"Things seem to be against the dollar right now and few people seem to believe the Fed that everything's rosy out there, so that's supportive for gold," said the head precious metals dealer with a New York-based French investment bank. "But those doubts are not translating into gold buying just yet as the dollar's movements are still the key," he added....

----(see url for access to full news, 24-hr newswire)----

StevensMy Take: On A National Sales Tax#1237028/12/04; 16:07:23

President Bush, today called for a debate on a national sales tax. This is a tax that taxes consumption at every level of of distribution. While a flat income tax is a good idea, a national sales tax is a terrible idea.

Europe has been living under the value added tax ( VAT ) system since the 70's. ( I was in London when the VAT was being debated, and have more than a passing knowledge, and interested in it. ) It is argued that a national sales tax can eliminate the IRS. The fact is, that enforcement and collection of such a tax would entail an agency much larger and much more expensive than the IRS. The amount of taxes raised are always much greater than advertised because they are levied at every stage of consumption -- from the wholesaler, to the retailer, to the consumer. A national sales tax is a form of multi taxation, and non-transparent taxation. It is this fact, that politicians love.

So by lumping a flat tax concept which argues simplification together with a consumption tax, the message to me is very clear: This is the beginning of an attempt to raise taxes, without talking about raising taxes. Tax reform and simplification, which is a very good idea, will become the vehicle to sell a VAT, which is exactly the opposite. The politicians know that the amount of revenues needed to supply the baby boomers with all their needs, do not add up. No one can get elected on raising taxes or cutting benefits -- hence, the "need to debate." Well, this is a debate freedom loving individuals can win.

As long as we push for a flat income tax and complete simplicity as hard as they do for a consumption tax, they will not be able to change premises. A flat income tax of say 17%, with a standard deduction, sent in on the back of a post card will eliminate the IRS and all the accountants now employed to help figure out what we owe in taxes. All of these fine people can now go out and produce something useful. A VAT, on the other hand is an insidious tax, invisible, and incalculable, and will require an army of bureaucrats to enforce.

Let the debates begin!

compwiz4uResponse to Sovereign msg#: 123694)#1237038/12/04; 16:19:00

Sovereign, Don't worry as it was repealed during the Reagan Administration.

This is from the Federal Reserve System at

"[12 USC 248(n). ... The original subsection (n), which authorized the Secretary of the Treasury, as necessary, to require the payment and delivery of all gold coin, gold bullion, and gold certificates to the Treasurer of the United States in exchange for another form of U.S. currency, was repealed by act of Sept. 13, 1982 (96 Stat. 1068).]"

SurvivorNational Sales Tax#1237048/12/04; 16:36:15

This would constitute a tax on the sale/purchase of gold wouldn't it?

Gold is near and dear to those of us here, but in the larger sense this seems to make GWB a purveyor of unprecedented falsehoods. He has talked lower taxes for almost 4 years . . . and now this? Perhaps the rumors about him throwing this election are true? If this VAT thing is for real, he must be bent on self-destruction.

Canada imposed a VAT some years ago. I seem to remember that it was supposed to be temporary, but neither the VAT nor the Canadian income tax has been repealed. At least Canada gives something back in the form of medical care for all.

Blown away
- Survivor

HeathenThanks- Ag Mountain and goldquest#1237058/12/04; 16:45:04

I knew I could count on stand-up advice from goldbugs. Goldquest's point gives breathing room and Ag's is what I needed to hear. Additionally I will avoid this forum until I'm done -lol. Thanks again and have a good weekend all; don't eat too many of Mother Greenspan's 'soft-patch' cookies-they inflate in your belly.
misetichFOMC Wasn't Seeing the 'Soft Patch' on June 30 Aug 12 / 15:46 EDT#1237068/12/04; 17:48:23


WASHINGTON (MktNews) - Back at the end of June -- before two soft jobs reports -- the Federal Open Market Committee saw oil price hikes as likely transitory although already spawning an increased risk of accelerated core inflation, an economy improving on virtually all fronts and even some chance that rate hikes would be continuous and not
"measured," the minutes of the meeting showed Thursday.
The FOMC minutes suggested there was a June consensus that,
"Depending on the rate at which resource utilization increases and the level and trend of inflation, a more aggressive pace toward reaching a neutral policy stance might be called for so as to provide assurance of
containing emerging inflationary pressures and averting the potential need for greater overall tightening over time."
Generally, however, both the staff assessments the Committee members listened to at the start of their meeting and their own conversational sentiments recorded in the minutes were full of the positive views engendered by what then appeared to be a strong and continuing rebound in hiring.

The evidence continued to portray "an economy that was expanding briskly and was likely to continue to do so for some time," the minutes said. "Business and consumer expenditures were on a strong uptrend and related growth in output was associated with notable improvement in labor market conditions and in manufacturing activity," the notes went on.

Along with the brisk expansion, the minutes noted, "somewhat increased price pressures" -- but how much of the pressure was transitory was "difficult to forecast." The timing and pace of tightening would depend on the FOMC's "reading of the incoming economic info." It was a far more tentative stance than the "measured pace"
language indicated.

"Members saw the persistence of a relatively vigorous expansion in overall economic activity," the FOMC notes continued, "as a likely prospect in the context of continuing stimulus from fiscal and monetary policies, accommodative financial conditions, growing business

The June policy deliberations had taken place on the second day of the FOMC meeting of which the first day had been devoted to preparing the outlines of Fed Chairman Alan Greenspan's testimony to Congress.
There was no suggestion in the minutes that the FOMC members were concerned about the "soft patch" that Greenspan saw fit to acknowledge by his July 20 Capitol Hill appearance.

It was then Greenspan observed a "softness in consumer spending of late, a softness which should prove short-lived." Greenspan went on, responding to a question from Sen. Elizabeth Dole, "While there has been weakness in June ... I might say that July seems to be somewhat better,
even though we are going through a soft patch."

Il Maestro is running things by the seat of his pants- reminiscent of December 2000/January 2001 wherein Il Maestro didn't see anything worrisome in late December - yet started cutting IR in early January

ANOTHER reason to LOAD UP on physical gold

All Aboard The Gold Bull Express - Part ll

misetichReality Check: Cargo Executives: June/July Imports Flood U.S. Ports Aug 12 / 10:19 EDT#1237078/12/04; 17:58:39


NEW YORK (MktNews) - Imports inundated U.S. ports in June
-- and rose further in July -- as containers piled up faster than dockworkers, rails and trucks could handle the high volumes, say American cargo and port officials.

A stronger economy and increased capacity from a new generation of super-large vessels aggravated the buildup, forcing some ports to re-route cargo or just let it pile up, artificially reducing the container count in the nation's largest port, they say.

Strong orders for consumer goods led the way, along with a surge in steel imports, which are at two-year highs volume-wise, at more than double last year's prices, they add.
"We're seeing a lot of cargo coming in. In June we saw the ramp up. In July we became a lot busier,"
Fox sees little to get excited about on the export side. He blames a declining manufacturing base and a lack government programs to market U.S. goods abroad or provide export subsidies widely used by competing nations.
He also noted that ocean carriers continue to be squeezed by high costs for bunker fuel, chartering vessels, environmental regulations and security.
While the numbers barely budged from the year prior, they do suggest a mild widening of the U.S. trade deficit.

Trade deficit being reported tomorrow - Friday the 13th ( that's scary!)

...but what's more scary is the BALLOONING trade deficit - coupled with an ever enlarging budget deficit and a declining stock market

It can't get worse for the Anti-gold - or can it?

All Aboard The Gold Bull Express - Part ll

WaveriderGold Boiling in Oil 3#1237088/12/04; 20:31:33

"During the commodities bubble of the late 1970s, oil shot vertical to nearly $40 per barrel. Naturally, like all vertical ascents, this sharp move was inherently unsustainable and soon decayed lower and collapsed. A similar sharp spike happened in 1990 when Washington first declared war on Iraq. This too rapidly vaporized, as it was another vertical move too fragile to persist. Our current all-time nominal oil highs, however, sport a very different technical character. Rather than a vertical spike, we are now in a major bull market in oil that has been running strong since the late 1990s. Oil has marched relentlessly higher in a beautiful series of bull-market uplegs rather than a single blistering spike, and this healthy technical profile makes today's prices look far more sustainable than the previous two long-term oil highs...

Since 1965, the average ratio of the price of gold to the price of oil has been 15.4, an ounce of gold averaging 15.4x more expensive than a barrel of crude is seriously lagging oil in real terms and will have to rally sharply from here to catch up and preserve the integrity of its strong historical relationship with crude."

Waverider: This is Adam Hamilton's third excellent essay (with charts) on the Gold:Oil ratio (May, 2004). The ratio today is around 8.7, but a reversion to the mean with oil at $45.50 would suggest a POG of around $700.00...hmmmm....

otish mountainslingshot#1237098/12/04; 22:50:39

I am truly honoured.

Dark Horses or Dark Visions, they have been seen, and this is why I have set my course for a solid golden foundation.


Dollar Bill.,.#1237108/13/04; 00:17:15

Stevens, I do believe the big boys have already decided on the vat tax.
I can guess at some reasons, but I am not really ready type much on the subject.
However, one thing.......those that already have, or own many things, have thier houses all equiped, will not be as burdened as those who are trying to attain more things.
A tax on the poorer majority I suppose

TopazVAT @ Survivor.#1237118/13/04; 00:44:11

The Gov't here in Oz introduced a GST (VAT) several Years ago and by all reports are well pleased with the result. It's a real burden to manage for small Business ... and the anecdotal evidence suggests there's still a lot of GST-less trading going on.
24K Gold is exempt as are "collections" ...lesser purities of generic Gold and Silver coinage are only marginally affected.

TopazBond/Oil/Dollar.#1237128/13/04; 03:28:34

To keep DX marking time @ 89ish, Bonds "must" it would seem, strengthen in the face of a higher PoO. You'll recall those days where Bond Yield and DX "always" headed in the same direction? They're gone! ...replaced by exponential spiking in DX should BY's weaken ... imho.
ArcticfoxContrare to this article..#1237138/13/04; 06:05:58

Whom here believes that we will first visit inflation/hyperinflation before all out deflation? Remember back in '29 money could not be created out of thin air so the forces of deflation exerted their will much faster..
misetichChina's crude oil imports in July up nearly 40 pct year-on-year#1237148/13/04; 06:38:02


SHANGHAI (AFP) - China's imports of crude oil in the first seven months rose nearly 40 percent from a year ago as the energy-hungry economy expanded at close to double-digit levels, state press reported.

In the seven months to July crude imports rose an annualised 39.5 percent to 70.63 million metric tonnes, the official Xinhua news agency reported Friday, citing figures from the General Administration of Customs.

Crude oil imports rose 39.3 percent year-on-year to 61.02 million tons in the first six months, it said.

The world's second largest oil consumer after the United States has seen oil imports soar as flagging domestic production has failed to keep up with booming economic growth and demand for gasoline in the auto market.

Although domestic crude oil output has been rising slowly this year, with output in July up 4.4 percent year-on-year, the nation's oil reserves are dwindling, the report said.
China currently accounts for about seven percent of world oil demand, but this could double by 2014, analysts say.

And by 2020 it will need to import some 70 percent of its crude oil, or 500 million tonnes.

The macro measures implemented by the Chinese central planners has slowed down overheated sectors - and its economy is forecasted to slow from the current pace of 9% GDP in the 2nd half of 2004 but not by much

Yet, their oil consumption is increasing.

On the demand side, China's avoricious appetite for commodities has propelled a boom for mining, resources and materials industries, thus propelling the burning up of oil, natural gas, coal, electricity etc.

In addition US military needs is further increasing oil consumption

The battle is on - Property Bubble vs Oil prices

Which one will bust?

Property bubble worldwide has been fuelled by emergency IR

All Aboard The Gold Bull Express - Part ll

BoilermakerTrade Gap #1237158/13/04; 06:38:08

"The trade gap widened by a surprising 19.1 percent to a record $55.8 billion, marking the largest one-month percentage worsening of the trade gap since February 1999. In dollar terms, the widening of the trade deficit was a record.

Wall Street had forecast the deficit would widen slightly to $46.9 billion from the initial May estimate of $46.0 billion.

The trade gap in May was revised up to $46.9 billion."

Free stuff from abroad still coming in. Get yours while the $ is still accepted.

slingshototish mountain#1237168/13/04; 06:54:02

I apoligise for the mispelling of your name. I was really "Fired Up" by Smeagol's poem and enthusiam set in.I am happy you have enjoyed your introduction into the story.
Have to slow down and get it right.

P.S. We are in for a blow down here in Florida. Not to worry. Andrew cut across while this one will slice up the middle. Six million affected by the storm.

misetichChina sees stronger consumption in July#1237178/13/04; 07:01:15


BEIJING, Aug. 13 (Xinhuanet) -- China saw yet another rapid year-on-year growth of consumption in July, as retail sales surged 13.2percent to 420.9 billion yuan (50.9 billion US dollars) over one year ago.

The July growth was a little bit slower than the 13.9 percent in June, but it was still one of the highest growth rates in eightyears if such contingent factors as the SARS epidemic last year are discounted.
The strongest consumption demands came from such sectors ...fodstuffs, telecommunications equipment, cultural and entertainment products and fuels. Consumption of oil and petroleumproducts surged 50.2 percent year-on-year in July, while sales of automobiles grew only 9 percent.

China's have vs have-not consumers are on the increase. It is estimated only 10-15% of its population are on the "have's" side

Though auto production and sales have been declining recently the TREND is up, thus higher oil consumption is expected.

CHINA's growth is the AXIS of commodities and energy boom. Those that are in the camp of "transitory" situation as described by Il Maestro are in for an unpleasant surprise.

On the trade deficit side, China is showing a DEFICIT year todate - but a surplus with the US

Wholesale inventories are rising in the US - retail sales decelerating- industrial prices rising - transportation costs rising

...and the pipeline for imported goods in July was along the same lines as today's US trade deficit report.

All Aboard The Gold Bull Express - Part ll

Gandalf the WhiteWant to "SEE" why Gold is moving UP ?#12371808/13/04; 09:04:37

Look at the US$ Chart !

RimhOuch!#12371908/13/04; 09:43:10

Gandalf, I'm glad I'm not in a barrel going over that one!
misetichFederal Reserve - not well equipped to deal with ballooning trade deficit#12372008/13/04; 11:10:47


At this meeting, the Committee discussed staff papers and presentations on adjustment of the U.S. external accounts. At more than $500 billion, the deficits in trade and current account balances are quite large in comparison with aggregate income. Financing of the deficits had recently included both large foreign private purchases of U.S. securities and increased foreign official inflows. The sizable current account deficit could be viewed as reflecting very low levels of national saving, in both its government and private components, in relation to investment opportunities in the United States that were very attractive. The staff noted that outsized external deficits could not be sustained indefinitely. However, the historical evidence indicated that such deficits could be quite persistent, and the adjustment of imbalances was not necessarily imminent. The adjustment, once under way, might well proceed in a relatively benign fashion, particularly if fiscal, monetary, and trade policies were appropriate, but the possibility that the adjustment could involve more wrenching changes could not be ruled out. In any case, a movement toward balance in the trade and current accounts would likely have effects that differ appreciably across sectors of the U.S. economy. Members of the Committee noted that monetary policy was not well equipped to promote the adjustment of external imbalances but could best contribute by maintaining an environment of price stability that would foster maximum sustainable economic growth. Fiscal policy had a potentially larger role to play by promoting an increase in national saving, but the adjustment would involve shifts in demand and output both domestically and abroad, and changes to U.S. fiscal policy alone probably would not be sufficient to foster the adjustment.

Is the era of the free lunch coming to an abrupt end?


All Aboard The Gold Bull Express - Part ll

TownCrierGold climbs on record high trade gap#12372108/13/04; 11:32:36

NEW YORK, Aug 13 (Reuters) - New York gold futures rose back above the $400 an ounce mark on Friday after news that the U.S. trade deficit expanded to another record in June convinced investors the dollar was still overvalued in terms of export competitiveness.

...Commerce Department report[ed] that the export/import gap widened to $55.82 billion from May's revised $46.88 billion.

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

"There's nuthin' for it, Mr. Frodo. Buy gold."


USAGOLD / Centennial Precious Metals, Inc.A risk-free request, helping you enter the gold market with grace and confidence.#12372208/13/04; 11:34:07">Get a head start on the gold market!
misetichRecord U.S. PPI Metals Increase Plus Oil#12372308/13/04; 11:54:09


WASHINGTON (MktNews) - July's below-expectations Producer Price Index was a product of strongly opposing countercurrents with record jumps in metals prices and large energy increases on one side and big drops in meat and dairy prices on the other, the Bureau of Labor
Statistics said Friday morning.
Earlier in the pipeline the measure of raw materials prices
without food and energy jumped a record 8.6%, boosted by still skyrocketing scrap metals prices that jumped a record 32.2% in the single month.

Overall, the PPI would have been up a sizable 0.5% had food not been counted. Beef and veal prices backed down 8.3% for the month while dairy prices were off 6.2%. The entire food category was down 1.6%, the biggest drop since April 2002.

Intermediate stage materials as a whole rose 8.6% in July, "a sizable jump," he said. Intermediate steel mill products like plate, bar and pipe were up 1.9% for the month and have risen 43.8% in the 12 months through July.
Energy prices rose 2.3% in July, with the components all up a lot. Gasoline rose 5.4%, natural gas 1.2%, liquefied petroleum gas 6.7% and home heating oil 5.9%.

"We still have (pass-through) influences that are very obvious," Catron said, "particularly plastics and chemicals, areas that really have a large (oil) feedstock demand." Plastic resins and materials rose 0.8% for the month and are up 11% in the past 12 months.

The disconnect between reported PPI numbers and reality is one of the many reasons, why the so-called "experts" were WAY OFF target, by overestimating GDP growth, by almost 50% on the average and by understating June deficit again by staggering 20%

Economists, including the Feds plan and make decisions based on "erroneous data".

The 2004 Oil Shock And Awe is being underestimated -

All Aboard The Gold Bull Express - Part ll

TownCrierDollar and euro price charts, and a scrutiny of terrorism#12372508/13/04; 12:10:28

Don't let anyone tell you that gold is moving on the threat of terrorism, and that it's price will promptly fall if that threat ever wanes. There's much more under it than that.

Look at the 20 year chart, and the magnification of the last 5 years on the chart to its right-hand side.

You will notice that gold had made a double bottom on either side of the watershed public event known as the (September) 1999 Central Bank Agreement on Gold (aka Washington Agreement).

Focusing on the five year chart, gold was indeed heading up on its own volition when another September event two years later, the unprecedented terrorism of Sept 11th 2001, barely registered as a $20 blip from $270 to $290 on the chart in the wake of the actual event.

And yet, despite only pale comparisons and shadows of threats over the subsequent three years, gold has steadily powered its way over $100 higher (exceeding 30% gains).

It's clearly doing what it will on a more fundamental economic basis than anything that can be lazily attributed to terrorism.

Call it a carefully slow building as an undercurrent of preparations for a global paradigm shift out of reliance upon the dollar as international reserve currency and into ANOTHER more neutral reserve asset -- and a leveling of the economic playing field.


SovereignOn the so-called "synthetic short" on the dollar#12372608/13/04; 12:52:43

1.In a deflationary environment, debt may implode and real estate may go down, but none of this entails that the dollar will go UP in value against other currencies.

2.It is not possible to short the dollar by buying hard or paper assets on credit because this paradoxically DOUBLES the perceived amount of dollars in circulation or held as reserves. Why? In a fiat/confidence-based/perception-is-all financial system, such trades effectively multiply the (perceived) amount of dollars in the system versus the amount of goods and services that stays the same:

"Let's suppose that a lender starts with a million dollars and the borrower starts with zero. Upon extending the loan, the borrower possesses the million dollars, yet the lender feels that he still owns the million dollars that he lent out. If anyone asks the lender what he is worth, he says, "a million dollars," and shows the note to prove it. Because of this conviction, there is, in the minds of the debtor and the creditor combined, two million dollars worth of value where before there was only one."
--Robert R Prechter, Conquer The Crash, p. 94

Finally, to "short" the dollar presupposes a system, a mechanism that will automatically and necessarily raise the dollar's value if certain conditions (i.e., lower real estate prices and bond defaults etc.) are realized. It is simply not true that lower real estate prices in New York necessarily result in HIGHER dollar prices in Zurich.


SovereignOn Prechter and $200 gold#12372708/13/04; 12:57:51

"I hope to recommend gold at lower prices near the bottom of the deflationary trend, but if gold were to move above $400 per ounce, I would probably be convinced that a major low had passed."

Prechter, Conquer The Crash, p. 135


USAGOLD Daily Market ReportPage Update!#12372808/13/04; 13:11:22">
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.

--- closing market rap, excerpts----

Comex Dec gold futures pushed to three-day highs on fund and dealer buying spurred by the sharp slide in the U.S. dollar.

This rendered dollar-denominated gold cheaper for non-U.S. consumers as well as highlighted gold's allure as a negative dollar-correlating asset class for global investors.

December gold closed at $401.20 an ounce, up $4.60, on the New York Mercantile Exchange.

The U.S. currency was hit hard after the Commerce Department reported that the trade gap rose to $55.82 billion in June from an upwardly revised shortfall of $46.88 billion in May, as exports slipped and higher oil prices failed to cut energy imports.

Economists had anticipated a deficit of $47.50 billion.

...The latest economic releases "prove once again that the fears of the Fed raising rates dramatically -- thereby leading to a much higher U.S. dollar, which in turn would be bad for gold -- is just plain wrong," said Peter Grandich, editor of the Grandich Letter, an investment advisory publication.

The U.S. dollar traded broadly lower Friday amid concern the U.S. won't be able to continue to finance a record trade gap, perhaps inviting a new round of pressure on its currency.

"Gold continues to build a long-term base that ... can lead to a move above the old highs of $430 to $435, and on towards $500 as we get into 2005," said Grandich.

...Gold prices weakened following the Federal Reserve's decision to raise interest rates a quarter percentage point Tuesday. "The market would like to believe that Chairman [Alan] Greenspan knows something positive about the economy that the rest do not," said Todd Hultman, president of Dailyfutures, a commodity information provider.

But Hultman continues to believe that the economy is "weaker than expected this year, that interest rate increases will come slowly, and that the U.S. dollar will continue to be weak." Given that, he expects gold prices to reach $450 by year's end...

-----(see url for access to full news, 24-hr newswire)------

SovereignOn the so-called "synthetic short" on the dollar (continued)#12372908/13/04; 14:23:23

To short means to borrow something that already exists for the purposes of selling it in order to (hopefully) force its price lower. This doesn't necessarily increase the supply of the currency or the commodity involved.

Today, when debt is incurred in order to buy paper or hard assets, dollars are created into existence, thereby inflating, adding to, the money supply. This represents additional claims against a relatively stable pool of available goods and services.

Shorting involves mere CHANGE in ownership for speculative purposes whereas straight debt or credit (to buy houses, cars, etc.) results in ADDITIONAL claims of ownership against the available supply of goods and services.

Shorting is ultimately a zero sum game; Credit or debt incurred to buy or consume things results in the DILUTION of the value of the dollar by increasing its supply. To short involves borrowing dollars that already exist. To use credit and incur debt for purposes of consumption ADDS to the supply of dollars that already exist.


AristotleBack to the drawing board for you, Sovereign!#12373008/13/04; 14:48:50

RE: msg#: 123729

I've never seen so much conflict in so little a space.

Why not just make it easy on yourself...

Gold. Get you some. --- Ari

NedHoly Mackeral !!#12373108/13/04; 16:19:02

Gold tacks on $5 bucks, takes a run at $400 yet again.

Oil tacks on $1.08 according to the local-yocal business channel to $46.50.

... and what's this TC? The monthly trade deficit widens to Grand Canyon proportions to a couple nickels short of $56 billion.

Holy whistling dixie!

Gonna go shopping tomorrow!

NedI am now thoroughly convinced that Wall Street knows DICK!!#12373208/13/04; 16:29:10

Last week they were expecting payroll improvements of some 240,000 jobs and received, if I recall correctly 32,000. Just a tad off the mark.

Today they expected the trade deficit to widen slightly from $46 billion to $46.9 and it came in at $55.8 billion some 19% off the mark.

Now I have to ask, if anyone who seriously has big bucks to invest, why would they listen to these blowhart, knuckle-dragging buffons?

TownCrierNed,#12373308/13/04; 18:01:47

From now on let's try to leave Nixon out of this, ok? Unless, of course, you want to talk about the upcoming anniversary of the August 15th (1971) suspension of the official $35/ounce international "gold standard" during his administration.

If memory serves me right, that was a Sunday, just like it is again this year. Sometimes some pretty significant things happen over the weekend. It was Sunday going on Monday here when the Europeans dropped their 1999 Washington Agreement bombshell on the gold market and the price ran up, what, about 50 bucks in no time.


TopazOil Futures.#12373408/13/04; 20:59:04

Seems every Man and his Dog has an Oil futures contract these days as the OI numbers keep roaring ahead. Oct is now the most active Month and ALL the in close Months outperformed Spot today. Even 09 and 10 futures are coming in for some attention.
Bond/DX action still demanding higher Oil imo.

misetichGlobal: Razor's Edge- Stephen Roach (New York)#1237358/14/04; 07:59:15


An unbalanced global economy is back on the razor's edge. High oil prices are taking a toll on the US growth dynamic at precisely the point when a Fed tightening cycle has begun -- a risky combination by any standards. At the same time, a shift to policy austerity in China has led to a modest slowing of that overheated economy, with a good deal more to come. That puts a two-engine world -- driven by the American consumer on the demand side and the Chinese producer on the supply side -- in a zone of heightened vulnerability. As I see it, the risks on the downside outweigh those on the upside by a factor of three to one. I would now assign a 40% probability to a recessionary relapse in the global economy in 2005.
Suddenly, the US economy looks exceedingly vulnerable. An income- and saving-short American consumer, burdened by record debt levels, has been prompt to respond to sharply rising oil prices. Personal consumption expenditures rose at just a 1% annual rate (in real terms) in 2Q03 -- equaling the weakest increase since early 1995. The quick-trigger nature of this response is ample testament, in my view, to the underlying precariousness of consumer fundamentals. While the just-released July retail sales report points to a rebound in the third quarter, further increases in oil prices in the face of anemic job growth should temper any optimism. Moreover, I am starting to get worried about rapid inventory building in the face of this oil shock; in the three months ending June 2004, total stocks of manufacturing and trade establishments have risen at about a 9% average annual rate -- triple the growth rate of business sales over this same period. This borrows a page right out of the script of the summer of 1974, when the first OPEC shock led to an unwanted inventory overhang that blindsided the Fed and set the stage for severe recession in 1974-75.

The 1st decade of the 21st century shapes up much the same of the late 60's (London gold pool) and the '70's - Oil embargo, stagflation, etc

However the financial systemic risks are much, much higher as trillions upon trillions of derivatives have been piled on -

Most experts draw comfort of the "ability" of the band leaders to have survived the aftermath of 9/11 - yet - the aftershocks are still reverbarating through the system

Deflationary forces are alive and well in Japan and their printing machines in overdrive and their recent GDP growth has slowed down

US economic growth since 2001 has been at best mediocre - (except for a few quarters in late 2003) and jobs lost have not been recovered

EU has dumped its GSE's holdings and are busy insulating themselves and forming contingency plans -

That leaves CHINA

The recent slowdown in China, is not meaningful enough to slow their consumption of oil and other commodities

In the short term (3-6 months) markets will adjust as most will remain hopeful and in denial, though the anxiety level will increase

GOLD is poised and attentive - it appears as if it is waiting for a catalyst to catupult to much higher levels in all currencies

What will the catalyst be?

All Aboard The Gold Bull Express - Part ll

DruidDebt and Delusion#1237368/14/04; 08:24:49

Since the last serious outbreak of inflation in the 70s, central banks have conquered this pestilence and have practiced a responsible stewardship over national monetary systems ever since. Due in no small part to the benign inflationary environment that has followed their victory, stocks and bonds have outperformed historical averages. This reflects a high degree of confidence in future monetary stability and prosperity.

Or so we are constantly told.

That this consensus view is a twisted mirror of reality is the theme of an undeservedly obscure work of financial economics, Peter Warburton's Debt and Delusion: Central Bank Follies that Threaten Economic Disaster. Published in 1999, the work rapidly went out of print but has since become a cult classic among financial contrarians.[1],[2] Although not written from an Austrian point of view, the argument parallels an Austrian view of money and banking in many aspects. My purpose in writing this article is to present Warburton's main argument and to interpret it through an Austrian lens.

The Demise of Inflation

During the developed world's flirtation with hyper-inflation in the 70s, wage and price increases were driven by a rapid expansion of the money supply created by central banks to fund government deficits. The upward spiral was finally stopped when Fed Chairman Volker raised short-term interest rates enough to slow down monetary growth.

The mechanism of the last major bout of inflation was the sale of government debt to commercial banks. In this process, called "monetization," banks or the Fed create the money out of nothing with which to purchase the bonds.[3] This is often referred to as "printing money," although in modern times, the money is usually created electronically rather than through the manufacture of paper notes.

After suffering through one episode of runaway prices, public opinion had turned against inflation by the early 80s. The political parties associated with the inflationary period had been voted out of office in the US and the UK. Chairman Volker had been appointed to head the Federal Reserve, a post from which he embarked upon a painful campaign of raising interest rates sufficiently to slow money supply growth.

Warburton's story begins in the aftermath of Volker's triumph. The conundrum facing governments at the time was: how to enable governments to continue to live beyond their means, without suffering inflationary consequences? In this climate, a new outbreak of inflation would have contained the seeds of its own demise, for the following reason. Lenders require a positive real return in order to lend; interest rates must then exceed the rate at which the currency is losing value, by some margin. Having recently been burned by inflation, bond buyers would have resisted any signs of rising prices by insisting on higher bond yields. Such a market-driven rise of interest rates would have given the central bank little choice but to follow with rate increases of its own to slow down money growth, or else risk a total destruction of the currency through accelerating inflation.

Central bankers offered a program to solve this dilemma, the centerpiece of which was a change in the method of financing government debt. Deficit finance bonds would be sold to private investors through existing financial markets. This would place the bonds in the hands of investment funds, rather than on the books of commercial banks as would have been the case had they returned to the old style of monetization. The subsequent explosion in the size and breadth of bond markets is illustrated by a few snapshots of gross issuances: less than $1 trillion in 1970; $23 trillion by 1997[4] and nearly $43 trillion by 2002.[5]


Druid: One of the best reads I've ever come across in describing the various "markets" that these paper ghouls have constructed to siphon off the productive output from all of us. There are two primary economies in our country. A physical one with limitations and a metaphysical (paper) one without (or so it seems). An excellent! Read.

USAGOLD / Centennial Precious Metals, Inc.A solid gold investment education in 175 pages for only $5.95#1237378/14/04; 08:52:56

The ABCs of Gold Investing

ABCs of Gold by MK"This book is a distillation of nearly a quarter-century of experience working with private investors interested in adding gold to their investment portfolios. It is not another "get rich quick" or "beat the market" treatise. Instead, it addresses a more practical concern -- how to protect your wealth during what many believe are increasingly dangerous times for the average investor. Sensational returns or making the quick turn of big profits is not what gold investing is all about. Gold has to do with medium to long-term asset preservation -- weathering the storm and having something left after the dust clears. Since the investor is essentially trading an inherently unstable and depreciating form of money for one that has withstood the test of time, incorporating gold into your investment plan is among the more conservative strategies you can undertake. I often counsel investors that purchasing gold is not 'investing' at all. In reality, you are simply replacing one form of money in your savings plan with another. . . .Perhaps gold can offer you what it has offered countless others over the centuries -- solid unassailable protection against the gathering storm." (order info)

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

misetich"Soft-Patch" continues in August - United States: Business Conditions - Reality or Sentiment?#1237388/14/04; 09:37:50


Business conditions continued to edge lower in August, according to the Morgan Stanley Business Conditions Index (MSBCI), suggesting that Corporate America hasn't yet seen the tentative third-quarter improvement dimly visible in other incoming data.
Bookings plunge to earth
In a troubling sign, the Advance Bookings Index plunged 23 points to 63% following six months at record-breaking levels. New orders typically suffer from seasonal declines in July and August, and we don't adjust our subindex for seasonal variation. However, such adjustment would still leave the index at 65%, or well below recent readings in the 80s.
Commodity prices passing through
Pricing conditions rebounded in August — as we had expected — courtesy of higher energy and commodity prices. The index increased by four points to 65%, as 58% of respondents reported that companies have increased prices from a year ago and 29% reported that companies have lowered them
Analyst Commentary by S&P Major Sector

Consumer Discretionary:

Pricing conditions were unchanged on average. The autos and auto parts group suffered from declining prices, deteriorating credit conditions, and lower bookings.
Employment and hiring plans improved for the group. But caution prevails: No industries plan on increasing capex over the next 1–6 months.

Consumer Staples:

Prices continued to increase, as most groups are increasing prices to recoup higher input costs, with the exception of food retailers who have been reducing prices to regain customers lost during the Southern California strike. Hiring is still flat for the group.


Business conditions were somewhat deteriorated from very strong levels for the refining and integrated oils companies, and prices continued to increase.
The group has not hired and does not plan to hire over the next three months. The industry is retaining its level of capital discipline and does not plan to increase capex over the next 1-6 months.


Several groups were still cutting payrolls over the past three months, although hiring plans for the next three months are improving for the financials.


HMO analyst Christine Arnold notes that premium yields are decelerating while costs are not. And still-slow job growth has capped enrollment gains for her companies. Prices continued to increase for the sector and hiring plans are stable for the group.


Pricing conditions continued to improve, although prices continue to decline for the airlines. Only the trucking, railroad, and business services groups plan on increasing capex, and all groups except airlines plan on adding to payrolls somewhat.

Information Technology:

Pricing and credit conditions deteriorated in early August. In general, indications for future growth seem favorable as hiring plans for the technology sector remain strong and 7 of 10 groups plan to increase capex.


Prices charged at steel companies have increased by 3% or more and advance bookings have increased; financing conditions have also improved. All three groups plan on increasing capex, and hiring plans for the materials companies are stable.

Telecommunications Services:

Conditions at telecom services companies remained unchanged from deteriorated conditions in early August, and prices charged continued to decline by 3% or more. 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. Simon Flannery notes that his companies plan on increasing capex by 3–6% over the next 1–6 months.


Business conditions were somewhat improved last month for the electric utilities, while prices charged continued to increase. Hiring was stable for the utilities, and they have no plans to increase payrolls or capex.

This S&P 500 business survey, courtesy of Morgan Stanley, is far more meaningful of the Feds reports, as economic conditons are not tinkered with "season adjustments" and other statistical mirages incorporated in the Feds reports

Prices are increasing, at the energy, materials, industrial level
Employment picture is grim, few hirings and continued layoffs in financial and telecommunication

The 2004 Oil Shock And Awe is barely months old - Current reports only reflect oil prices increases from the early $30's and not the recent $36-45

As the markets are in a wait and see mode - in denial and hoping for a shallow "soft-patch" and "transitory" energy costs, the collateral damage increases

Reports from WallStreet and the Feds will continue to accentuate the "positive" whilst the foundation decays

It wouldn't suprise to see layoffs accelerate in the near future, since most recent hires have been in the "temp category"

The Feds are not really inclined to increase IR's as it would increase the budget deficit (debt servicing costs) and collapse the housing market

It can be expected for the Fed to became "more tolerant" of "transitory inflation" facilitating consumers to 'bail out' by continuing the refinancing schemes

All Aboard The Gold Bull Express - Part ll

NedHere's a good one !#1237398/14/04; 11:17:06


``It's absolutely stunning the number is that high. We've imported a ton of stuff,'' said Greg Anderson, currency strategist at ABN Amro in Chicago. ``It makes it much more difficult to have any argument other than (a) weaker dollar going forward.''

``The trade issues are so bad (they are) raising concerns about funding the current account deficit and that could take the dollar down into a new trading range,'' said John McCarthy, director of foreign exchange at ING Capital Markets LLC in New York.


This is all so bizarre! Recall not too long ago when the trade deficit busted 30 billion. There was 'Shock and Awe' as everyone gasped and choked. Now after many months have passed, the 30+ billion has evolved into 40+ billion and now 50+ billion has been cracked. Imagine?

So as oil cracks $40/bl (decisively) and the trade deficit cracks $50 billion (decisively) the currency gurus are talking a new trading range for the dollar.

Do ya think? These guys are almost as comical as the Wall Street freaks.

BoilermakerTrade Deficit Calc's#1237408/14/04; 13:22:21

The current US trade dedicit works out to $6 per day for every person in the US, enough for lunch in most places. Each American family of four is getting an annual stipend of $8800 thanks to the generosity (gullability) of our foreign friends. This is astonishing. It ought to scare the hell out of everyone with a brain.

Having the world's reserve currency has its benefits. That is until the music stops and the creditors evict us from our priviledged status. We will be going from royalty to serfdom. It won't be long before we'll be selling or burning the furniture.

I can see it now, headline story May 24, 2007; Mexican Boarder Patrol Rounds Up Illegal Americans Fleeing to Mexico to Escape Economic Depression.

Enjoy your weekend and get some gold insurance.

TannehillThe Taming of the Shrew(ish Economy)#1237418/14/04; 19:07:41

With great apologies to William Shakespear,

"The Taming of the Shrewish Economy" starring Sir Alan Greenspear... having been knighted our Sir Alan Greenspear is out to slay mighty, monetary dragons and bring the shrewish world economy under his domination...

Sir Alan's monologue in Act IV, scene 1 explains most of what transpires, as he tells the audience of his scheme to bend the Economy to his will. He will tame the Economy as the falconer trains his bird, by holding lures out in front of it, just out of reach. All has been planned in his mind in advance: "Thus have I politicly begun my reign," he says, where "politicly" means "with careful calculation". Sir Alan wishes to bend the Economy's hostile temperament into benevolence by turning everything against it—ironically, under the guise of heightened concern for its well-being. He means to "kill the Economy with kindness". Though Sir Alan's treatment of the Economy is undoubtedly condescending and chauvinistic, it is nevertheless significant that Sir Alan decides to "kill" it with kindness rather than with force. By couching his attempts to smooth out the Economy's rough temper in language of love and affection, Sir Alan both makes himself more sympathetic in the eyes of the audience and opens the way for an actual loving relationship with the Economy once it decides to accept its new role as his maid servant. Had Sir Alan simply attempted to dominate the Economy forcibly, he would have appeared monstrous to the audience, making a pleasant union impossible.

Sir Alan, the Economy, and Hortensio journey back to Padua. On the way, Sir Alan continues his relentless attempts to coax the Economy to submit to his authority as its master. Though it is midday, Sir Alan comments on how brightly the moon is shining, and when the Economy responds that the sun is shining, he refuses to continue the journey until the Economy admits that it is the moon. Having no more energy or patience to put up resistance and anxious to return to Padua, the Economy concedes. Then, however, Sir Alan reverses his claim and says that it is in fact the sun. Hortensio finally persuades Sir Alan that he has tamed the Economy, and they continue the journey.
After they have gone a short way, a similar incident occurs. They pass an old man on the same road to Padua, and Sir Alan claims that, in fact, the old man is a young maid. Furthermore, he entreats the Economy to embrace the maid. This time, the Economy immediately obeys, but Sir Alan then says the Economy is mistaken, for the maid is really an old man. The Economy continues to play along.

Sir Alan gives the impression that he will never approve of the Economy's behavior, for even when it denies what it sees with its own eyes in order to satisfy him, he insults it. After they argue about the shining of the sun and the moon, however, the Economy fianally gives him absolute power, even over the definition of reality: "What you will have it named, even that it is, / And so it shall be still for me."

Sir Alan finally seems pleased, but soon he tests her again,

ToolieThis week at the bone pile.#1237428/14/04; 20:47:00

Company closes Wausau plant after 80 years – Wisconsin: 120 jobs (some transfers).

33 more layoffs at AK Steel plant – Ohio: 33 jobs, Previously, 15 workers were laid off each week, bringing the total now to 68

Jervis B. Webb plant to close its doors – Tennessee: 41 jobs, Webb co. makes overhead conveyor systems.

Dan River Inc. plans to cut 375 more jobs – Virginia: 375 jobs, Two months after laying off 312 workers, textile manufacturer Dan River Inc. announced plans yesterday to eliminate 375 more jobs starting in October as it closes two plants.!business&s=1045855934855

La-Z-Boy to close Caldwell County plant, temporary layoffs – N.C., PA. & Miss. : 645 jobs, The Anti-dumping tariffs of 11% (or so) that were imposed on Chinese imports were not enough to prevent the off-shoring of production. A company near and dear to my heart… and some may say brain.

150 Jobs Eliminated – Vermont: 150 jobs, Belden Wire rope is how I know the company, it's a cable and wire manufacturer.

Citigroup to Layoff 450 Workers in Iowa –Iowa: 450 jobs, Citigroup has announced plans to shutter call centers from Ohio to Idaho, leaving thousands of workers without jobs.

Reuters to Shift Editorial Jobs to India – Various locations: 20 jobs, will hire 40 in Bangalore. Not only does India get all the jobs, I'll bet the new hires get to drive their elephants to work too.

Kmart to cut 10 percent of headquarters staff -- Michigan: 200 jobs, Take advantage of the yellow light special shoppers.

GM cuts Saturn jobs, production – Tennessee: 300-400 jobs. , Separately, GM will idle 2,200 workers for three weeks at its Lansing car assembly plant

Bosch to cut 530 jobs in St. Joseph – Michigan: 530 jobs, Disk brake machining and foundry…this corner of the state has been pounded by job losses recently.

Soft patch OR quicksand?

Dollar Bill.,.#1237438/14/04; 21:01:23

So Why Is Crude So High?
Is it possible that the market is very far-sighted, sees a Hubbert-like peak of production while demand continues to rise, and is pricing tighter world oil demand into the market now? Yes, this is possible. But there are other explanations as well, as some of my colleagues have pointed out:
(1) It's extra demand. China demand remains strong even with a China slowdown, as the IEA has recently predicted (see "Investment Highlights: IEA June Oil Market Report, Morgan Stanley, European Oil and Gas team, June 14, 2004). Hence, prices are rising given low elasticity of supply. Demand from India is also rising.
(2) It's speculation. The proliferation of hedge funds has created a large pool of money that moves in herds. As Ben Funnell and Teun Draaisma point out, "It's a crowded long." When the Fed hikes rates and raises the cost of carry for these positions, some may close and trigger price declines of oil futures. Such declines would in turn trigger further selling, and the market would come back to normal. In addition, Ben and Teun point out that the forward curve has moved up with the spot price, with a beta of about 0.7. Either the market is pricing in a new paradigm, or has simply over-reacted.

(3) It's geopolitics. Iraq and much of the Middle East remain unstable. There are uncertainties in Russia, Venezuela, and Nigeria. Until the world calms down, there will be a risk premium on oil.

Doug Terreson has also brought up two other factors that get less attention. First, the oil industry has undergone a huge reorganization in recent years. Spurred by low returns on capital, the majors merged into Super-Majors. This reorganization has already born fruit in higher returns for the merged entities. Building on Doug's point, my sense is that higher oil prices could bring further fruits from this reorganization, since the restructured industry is more able to bear the risk of large oil exploration and development projects. Second, Doug points out the major improvements of drilling and recovery technology, so that recovery rates from oil fields have been rising. Although the next set of such technologies is not obvious, the economics of innovation suggest that higher oil prices will stimulate good ideas.

Despite these soothing reasons to think that oil prices may come down some, I find myself in the same camp as my colleagues Steve Roach, Dick Berner, and Eric Chaney, although for an extra reason. Looking at India and China -- the "laboratories of globalization" -- Steve wrote, "As economic development spreads, the real oil price could actually rise over time" ("The Great Oil Debate," Morgan Stanley, May 27, 2004). Thus, Steve emphasizes the long-term demand reason for higher oil quotes. Dick and Eric wrote, "Long term, we are convinced that the equilibrium price in crude markets has shifted from the US$20/bbl region towards US$30 to US$35, on a Brent basis" (see "Oil Prices: Once Again Marking to Market," Morgan Stanley, July 26, 2004). They see both demand (from China and India) and supply (lack of investment over the last 15 years) as reasons. While agreeing with the reasons that these colleagues cite, I add another, long-term supply reason: Geologically recoverable production capacity will peak soon -- even if several more large fields emerge.

One last aspect of the debate is also important. It is easy to talk about US$80/bbl oil in the short run, but sustaining such high levels is a different matter. One of the reasons for the failure of the Club of Rome's dire predictions about the world running out of oil is that the price went up, triggering conservation and innovation. Above US$40/bbl, alternative energy sources become more attractive. After all, people do not buy gasoline because they want gasoline. They buy it because they want transportation. When transportation can be provided more cheaply without gasoline, they will abandon gasoline.

Revenge of the Oil Bears: The Abiogenic Theory of Petroleum Origin

There is one more bizarre twist to the story, one that argues for a more relaxed view of the long-term supply of oil. This twist is the revival of the abiogenic theory of the origin of oil. This theory has excellent scientific pedigree, going back more than a century to Mendeleyev, the inventor of the periodic table. In the last few decades the theory has been espoused chiefly by Russian scientists, and by the late Thomas Gold, a professor-emeritus of astrophysics at Cornell. (See "The Origin of Methane (and Oil) in the Crust of the Earth," by Thomas Gold, USGS Professional Paper 1570; available at the website These scientists believe that hydrocarbons have origins that predate organic material, in the materials incorporated into the earth when it was formed. The bad news for the abiogenic crowd is that commercial application of the technology for finding and recovering oil (or gas) from potential abiogenic sources is still very far away. It cannot help us in an economically relevant horizon.


My conclusion from all of this is that the world oil market has entered the Crisis phase of a CRIC cycle -- the cycle of Crisis, Response, Improvement, and Complacency that characterizes the interaction of structural reform and economic performance. (See my "Cobwebs and CRICs," Morgan Stanley, April 4, 2001.) In a nutshell, the oil market is giving the world a swift kick in the pants, in order to stimulate exploration, substitution, and -- the only long-term solution -- innovation. (For my recommendation on what to do in the subsequent Response phase of the CRIC cycle, see "Replacing Pessimism: A CRIC Cycle Approach," Morgan Stanley, March 27, 2003).

Dollar Bill.,.#1237448/14/04; 21:19:23

Today the world produces 82.5 million barrels per day which means that Ghawar produces 5.5 percent of the world's daily production. Should it decline, there would be major problems. Although the Saudis have persistently claimed that Ghawar is capable of producing a further 125 billion barrels, the claims are being met by growing skepticism in a manner which suggests increasing acceptance of the depletion dynamics thesis. Notes the Aberdeen Press & Journal Energy:

"It seems a growing number of analysts are falling into line with the Simmons & Company International view that Saudi Arabia may be running out of steam and may not be able to perform the role of global swing producer for many more years, despite being credited with oil reserves in the order of 260 billion barrels. The Centre for Global Energy Studies hinted at the beginning of the year that the kingdom appeared to be heading for difficulties. Now one of its analysts has said that having reserves does not equate to production capacity. Citing the Haradh field, he said it required 500,000 barrels per day of water injection to get out 300,000 bpd of oil. Moreover the problem is even more serious in the Khurais field."

– "Doubts grow about Saudi As Global Swing Producer," Aberdeen Press & Journal Energy, April 5, 2004

In layman's terms, Matt Simmons maintains that the Saudis have instituted huge waterflooding programs relatively soon after completing field development at Ghawar in order to maximize production:

"All of these fields are old, but Saudi Aramco has managed them in a ‘gold standard’ fashion by instituting careful and rigorous water injection to maintain very high reservoir pressures. They're effectively sweeping the reservoirs until the easily recoverable oil is gone. In so doing, they have defied the standard decline curves. With water injection, they've maintained reservoir pressures above the bubble point. The trouble is, once they finally finish the sweep, they've done both primary and secondary depletion. There isn't any Act 2." - "Simmons Hopes He's Wrong" – as quoted in Petroleum News, F. Jay Schempf

No Act 2, especially if one assumes that the official supply/demand data on the oil market is incorrect. Until recently, the market consensus, which has been continually shocked by each successive rise in the oil price, has attributed the rise to several special one-off factors, but has not tended to question the official statistical framework for the market from the IEA. However, there is, as we have pointed out in these pages before, an alternative view. Henry Groppe, of Groppe , Long & Littell, has analyzed the global oil market for almost four decades. Henry has called many of the major turning points in the oil market over the last three decades, is widely esteemed, and is quite close to the current US administration. Groppe has a very bold thesis on the current oil market: the IEA data which everyone accepts is very wrong, supply is overstated, demand is understated, the market has been and is currently in deficit, and global inventories are falling.

NedDollar Bill#1237458/15/04; 05:16:01

Please credit the individual(s) who wrote 'your' posts !



"So Why Is Crude So High?"

-3/4 down page, by Robert Feldman (Tokyo)

goldenpeaceHaiku#1237468/15/04; 08:05:37

With gold's sun unseen
paper makes mad, in darkness,
all those it wishes to destroy.


Gandalf the WhiteThis MAY be IMPORTANT !#1237478/15/04; 10:11:22

My Sunday Times tells me that TODAY, there is an election for "President" in Venezuela !!!
What does this mean for importation of OIL to the USofA ?
I am betting that that there are LOTS of "Things" going on that WE will never know about !
PS: In my Crystal Ball, GOLD will "shine" this week !
Gather while you may.

USAGOLD / Centennial Precious Metals, Inc.A solid gold investment education in 175 pages for only $5.95#1237488/15/04; 11:31:28

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.

SovereignDoes the Fed have its legal headquarters in the "United States" or...#1237498/15/04; 15:58:56

...or in the "united States of America" (yes, spelled with a small "u")?

My American friends, you know that there are two sovereign legal entities, in other words, TWO DISTINCT GOVERNMENTS in the so-called United States of America (Article 1, Section 8 Clause 17 and Article 4 Section 3 Clause 2 of your constitution).

Do you know in which one these the Fed is domiciled or has its legal headquarters in? Is it because it's headquartered in the famous District of Columbia that it can circumvent the laws promulgated in your Constitution by issuing fiat legal tender instead of specie money?

Furthermore, are not your State governments breaking the law by not paying their employees or debts in silver and gold? According to your constitution, they are committing a crime. Is there rule of law in the United States of A?


SmeagolGold-fields and Gold-fights#1237508/15/04; 19:01:08

"Rand secrets away Gold Fields profits
August 15, 2004

By Nicky Smith

Johannesburg - The rand was the thief in the June quarterly reporting season for local gold mining companies as all of the big four reported losses, some in line with expectations, while others left the market a little breathless.

A bloodied and bruised Gold Fields, the world's fourth-largest gold producer, kicked off with the best results the market could expect to see. Simon Kendall, a gold analyst with UBS, said of Gold Fields: "Operationally, they were the ones who came out the best this past quarter."

Gold Fields in its fourth quarter made a R186 million net loss and announced it was now carrying its troubled Beatrix Four Shaft at a hugely reduced book value. "

add thiss ssnip from the Predictions to Ignite the Spark (Fifth Horseman) ssection of the Hall of Fame:

Max Rabbitz (04/02/01; 08:59:59MT - msg#: 51245)
..."In addition to the attempted takeover of Goldfields in South Africa by

AngloGold (Rothschilds) there is also TVX Gold which it is now feared is about to fall into the hands of their bullion banker creditors. Should these events occur a new flood of forward sold gold is likely to depress gold markets for perhaps another year. By then other mines would be ready for capitulation. I think this is their plan. Few if any mines will survive. Of course this forward sold gold is still in the ground and requires lending from above ground stocks to satisfy real market demand. This requires confidence that the financial and economic system will survive and the gold will eventually be mined."


For ssome reason the African Rand-fiat sunlight is very sstrong now, making the mines faint and weak, less able to defend themselves... and not long ago, Rothschild stepped away from the Gold-paper pricing-table, but not from Gold
itsself... thiss a neck-ssqueeze for physical Gold-in-the-ground in Africa by one or more Giants?


USAGOLD / Centennial Precious Metals, Inc.Enter the gold market armed with knowledge#1237518/15/04; 19:09:05">Arm yourself with knowledge
industrialGoldNever a better time to get Gold#1237528/15/04; 19:19:59

I saw this in the online version of the New York Post today.

"August 15, 2004 -- With little fanfare, the Federal Reserve will begin transferring the nation's money supply over an Internet-based system this month — a move critics say could open the U.S.'s banking system to cyber threats."

It seems like it just got easier to play with the fiat and control us.

It seems that the next step would be to have us turn in our paper fiat for electronic fiat. Then... if we cause trouble, just zero out our accounts.

I ask the board, which do you think is worse : fiat or electronic fiat?

With each passing day, I am even more certain that amassing physical gold was the best idea I ever had.

Gandalf the WhiteI sure hope that all the FL Goldhearts are safe and sound !#12375308/15/04; 19:34:00

Sirs Goldfly and Slingshot
Tell me that you are only a "little damp" ?
Let us hear from you !

Clink!@Gandalf#12375408/15/04; 20:58:44

Nice of you to think of us, o white wizard ! I live in north Pinellas county, between Tampa and the gulf. It looked so bad on Friday that we took off East to Orlando. As it happened, this was exactly into the path of the eye. So we got to see a Category 2 from up close. It wasn't too bad where we were (the hotel room had a kind of dressing room with doors between the bedroom and the bathroom), but driving home yesterday it was amazing the difference in damage levels between even adjacent city blocks.
One thing to mention is that most of the fatalities that I have seen reported were either people in mobile homes or in traffic accidents. Obviously I feel sorry for them, but I also have the thought that they might have faired better if they had educated themselves about what was coming. But even people in block houses aren't in much better a situation as it's virtually impossible to find a house which doesn't have a window in every room. I'm going to be doing some remodelling before the next one arrives !

WaveriderMillions turn out to end or defend Chavez and his 'revolution for poor'#12375508/15/04; 22:09:31

"CARACAS, Venezuela (AP) - Venezuelans turned out in unprecedented numbers Sunday to decide whether to force leftist President Hugo Chavez from office, waiting in long lines as election officials promised to keep polls until everyone got to vote."

Waverider: Yes, Sir Gandalf...Chavez had the first presidential recall vote in Venezuela's history, he actually has another two years to his term. We should know the results manana I wouold think...I see oil is up again this evening and most energy contracts are limit up tonight on the TOCOM. Cheers!

Bizarro-GreenspanOil at $182 a barrel?#12375608/16/04; 02:13:03

Gosh,that couldn't be right,could it?

It could,and it's about time.

For a new kind of world monetary system.

Bizarro-GreenspanDefending Money#12375708/16/04; 02:49:02

I think we can handle the truth.

We've been preparing for a while.

misetichVenezuela's Chavez Claims Victory, Foes Cry Fraud#1237588/16/04; 06:10:14


CARACAS, Venezuela (Reuters) - Venezuelan leftist President Hugo Chavez on Monday declared victory in a referendum on his rule but the opposition called the results "a gigantic fraud."

According to National Electoral Council President Francisco Carrasquero, Chavez won backing from 58 percent of voters with 94 percent of electoral rolls counted in the referendum on whether to recall him before his term ends.
In his speech, he called the referendum: "a present for Bush. Let's hope that from today (the United States) will respect the people of Venezuela and their government."

ANOTHER few years at least, for Hugo Chavez has been assured.

The flamboyant "revolutionary" who was instrumental in strengthening OPEC and oil prices following the 1998 pricing collapse has been (IS) a thorn on the side for the US

Recently he appears to have adopted a similar stance to Cuba's Castro in his vociferous outbursts toward the US current administration, threatning to cut-off oil supplies

Chavez has accused the US of interference and being behind the failed coup of 2002

The line in the sand has been drawn - the US apparently seekeing ANOTHER regime change - once again from an OIL producing country and Chavez who is backed by powerful LatinAmerican forces, including Brazil

This political hot potato is far from over and it will continue to boil keeping upward pressure on oil prices

All Aboard The Gold Bull Express - Part ll

goldenpeaceMoney and Credit growth rates (from Doug Noland)#1237598/16/04; 06:44:34

YTD growth rates (%)

May 21 July9 August 15

M3 +11 +10.6 +8.9
Bank Credit +12 +8.9 +8.0
Savings Deposits+22 +14.9 +13.6
Real Estate Loans +20.1 +14.6 +13.7
Com Paper +15.9 +8.0 +10.6
Foreign Custody
Treasuries +32.4 +30.5 +28.9

Diminishment of these growth rates this summer , similar to the accelerator effect in capital investment which led to the top of the tech investment bubble in 2000, is responsible for the softness in financial asset prices since May. This is politically unacceptable, and unless they pick up by October a lot, Bush will lose the election.
Look for them to increase a lot soon , taking the stock market up, gold up , and the $ down.

Gandalf the WhiteThanks, Sir Misetich !!#1237608/16/04; 09:10:25

misetich (8/16/04; 06:10:14MT - msg#: 123758)
Venezuela's Chavez Claims Victory, Foes Cry Fraud
I "knew" IT !
note the President Bush comment ---

misetichContinuing signs of US economy slowdown#1237618/16/04; 11:17:40


The Empire State index plummeted in August in what could be a bad signal for Thursday's Philadelphia Fed manufacturing survey and in turn the nation's manufacturing sector as a whole.

The index dropped to 12.57 from 35.78 in its July reading. Weakness was centered in both new orders, which fell to 14.85 from 28.57, and shipments, down to 11.88 from 33.96.

Unfilled orders contracted in the month, at minus 4.6 vs. 14.31 in July. The drop in new orders and shipments apparently gave manufacturers in the region time to work down backlogs. Note the negative reading in unfilled orders is the first in nearly a year.
Note six-month readings were also very weak, especially for employment which tumbled to 9.68 from 36.34. The reading suggests employers have sharply curtailed future plans for hiring.

Price readings were positive, with prices paid slipping to 49.59 from 56.41 in July and prices received down to 16.26 from 17.95.

ANOTHER economic report (this one localized) shows the continue deceleration of the US economy

Dark clouds are hovering over PC sales forecasts in the 2nd half -

SUV's tunrover is slowing - extended by 23 days in inventory comparatively to 2003 ( we can expect Buy A Suv McTeer - to show up on the scene imploring consumers to Buy A Suv)

Foreigner once again piled back in toward US shores in June partially offsetting the huge trade deficit


The Treasury said net capital inflows totaled $71.8 billion in June, up from a revised $65.2 billion seen in May and the first gain since January. May inflows had previously been reported as $56.4 billion.

The bad news for foreigners - Your timing was all wrong!
as the US economy has begun to decelarate

Coincentally the US $ started to its latest major decline in the spring of 2001 - when economic reports showed US economy was racing toward a recession

The 2004 Oil Shock And Awe is barely a few months old - and its effects are beginning to show worlwide, as EU, Japan & the US economies are all slowing down, jobs are not being created and property values are over inflated

Its Oil vs Asset inflation

All Aboard The Gold Bull Express - Part ll

USAGOLD Daily Market ReportPage Update!#1237628/16/04; 13:39:07">
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.

----(closing market excerpts)----

Gold futures on the Comex division of the New York Mercantile Exchange extended their recent stretch higher Monday by another $4 to close at their highest level in almost a month thanks to continued fund and trade interest.

The most-active Dec contract settled $4 higher at $405.20 per ounce.

...dealers agreed that prices are likely to remain fairly well supported by continued fund buying over the coming days.

"There's renewed uncertainty out there with regard to the dollar and U.S. economy, so that's got people's interest," said a dealer with a large U.S. investment bank.

With gold widely viewed as an effective alternative to the U.S. dollar because of its tendency to gain ground during bouts of economic instability and geopolitical tension, speculative players are expected to remain holders of gold until a clearer picture develops on the U.S. dollar's outlook over the coming days...

----(see url for access to 24-hr newswire)---

slingshotGreat Day to be a Goldbug!#1237638/16/04; 13:40:26

Thank you all for your concern and especially Gandalf. I was very lucky for rain was all I received from both storms.
Although a tornado did touch down north of me and damaged about seventy homes. I turned from Goldbug to weatherman and I can tell you,preparation and information go hand and hand. Those poor souls must have said some words as the storm went from Cat 2 to Cat 4 in two hours and in Sir Clinks case to leave home to be followed by the storm. The situation changed fast and drastic.I have been in one hurricane before and I respect Mother Nature.

mikalWhy Presidential campaigns cost a King's Ransom#1237648/16/04; 13:42:13 MSNBC - John Kerry's family traced back to royalty
TownCrierPsssssst.... #1237658/16/04; 14:25:42

Measured on the 'nifty scale', it doesn't get much better than these.

Complete with a new checkout procedure using 128bit encryption on our very own secure server. That makes this deal "cool x 2".


Federal_ReservesTrade deficit and the mob#1237668/16/04; 15:57:51

US trade deficit now at about 6% of GDP and so far the day of reckoning has not come. 1 million a minute is needed to finance the thing. Tick tock, Tick tock.

In the days of the mob, when they wanted to strip mine a business, they would lend you money at low rates maybe if you had a gambling or drug problem they would let your credit ride, allowing you to get in way over your head. Then they would throw the kill switch at the first sign of trouble, demanding payment. When you couldn't come through, they would come into your store, order the store full of goods maxing out your vendor credit, then steal your inventory and sell it on the open market for cash, bankrupting you as your store vendors demanded payment.. I saw this on an episode of the Soprano's.

In our case, the communist foreigners are doing the same thing to us. Lending us huge sums of money at low rates, sooner or later they will hit the kill switch, and demand payment with higher rates. They'll own our country lock stock and barrel. We will be working for them and we will have lost our freedom. We will have to make concessions like during over Taiwan to communist control. Then we will have to borrow money in their currency because ours will be trash. Our rates will skyrocket and the standard of living will collapse.

Our leaders have sold us out, most of the current baby boom generation of lower and middle income will be penniless in retirement.

I think its possible the influence of the US empire could collapse similar to what happened to the Soviet Empire in the 89-91 period. We will be unable to afford these massive interventions.

eccentricventuresthe latest pump and dump scam.....#1237678/16/04; 16:00:16

A clever new low in pumping stocks. Someone called my voice mail and left a message, pretending to have gotten the wrong number. "Hi Stephanie, it's Wendy...(small talk)...anyway, remember that cute stock market guy I'm dating? The one who gave my father that stock tip in June (she mentions symbol) and it went from a dollar to like five dollars in a week, and you were mad that I didn't tell you about it? Well I'm calling you now. He's got a hot tip on a new company, (mentions symbol, and current price) and its going to take off this week. Buy as much as you can. My father and I are buying a ton, but don't tell anyone, it's kind of a secret. Call my cell phone (gives no number), I'm still in New York, love ya, bye."
Maiden FanI received the same message#1237688/16/04; 18:45:00

E...V..., I received a similar message a day or two back. These penny type stocks are the worst of the worst. They are ripe for manipulation. It's good to know that the stock pushers are desparate enough to resort to this kind of tactic though. It's another indication that the end is near.
slingshotNow you see it. Then its gone!#1237728/16/04; 19:51:40

Didn't think anyone was watching?

slingshotWhat?#1237738/16/04; 19:53:41

The numbers don't add up! Missed something.

Black BladeKing Kong debt meets middle-class life#1237748/16/04; 21:20:30


Ask most people if they should save more, and the likely response would be "yes." But with so many opportunities to spend, sometimes we just can't help ourselves. Shopping is even seen as an expression of patriotism: Go ahead, buy the latest gadgets, a bigger car, or another pair of spike-heeled shoes, it will be good for the economy.
The only drawback: that stubborn monthly balance on the credit-card bill. For the average American family, it's been growing steadily over the past few decades, lurking like a visitor who's overstayed his welcome - and no one knows quite how to get rid of him. Somehow, people have drifted away from the thriftiness that emerged from the Great Depression and embraced life on borrowed time.

"Americans really appear to have accepted debt almost as a way of life - they assume that's just the way it goes," says John Putnam of the Million Dollar Round Table, an association of financial planners in Park Ridge, Ill. The group found in a recent survey that 30 percent of Americans believe they probably will always have debt.

Statistics confirm the change:

• In 2003, the average credit-card debt of US households with at least one card was $9,205, up from $2,966 in 1990, according to the research firm

• In 1970, 44 percent of families with credit cards reported having a balance after their most recent payment, the Federal Reserve Board reports. Since the 1980s, not only have more people used credit cards, but about 60 percent have carried a balance.

• The personal savings rate in the United States averaged about 8 percent from just after World War II through the 1980s. But since 2000, it has averaged just under 2 percent, according to the Bureau of Economic Analysis.

• Personal bankruptcy filings hit a record 1.6 million in 2003, compared with 300,000 a year in the early 1980s.

Black Blade: In a word - "grim". This is a two-part series of articles on consumer debt. As always, get prepared and be ready starting with the basics like hard assets such as Gold and Silver (available here at the Castle of course).

Long day tomorrow so off for some ZZZZZ...

Black BladeGold Closes at 4-Week High After New York Manufacturing Falls #1237758/16/04; 21:26:30


Aug. 16 (Bloomberg) -- Gold prices in New York closed at a four-week high as the dollar touched a four-week low against the euro after a gauge of manufacturing in New York State declined more than analysts expected.

The regional index, which offers the first clues to the performance of U.S. manufacturing in August, fell to 12.6 from a revised 35.8 in July, a Federal Reserve survey of factories showed. Economists had expected 32.15, the median of 34 forecasts in a Bloomberg survey. A decline in the U.S. currency made gold, sold in dollars, cheaper for buyers holding euros.

``The dollar has weakened a bit since the survey came out, and it's boosting gold,'' said Tom Boustead, an analyst at Refco LLC in New York. ``This is more data that looks weak for the economy.''

Black Blade: OK, one more - Stating the obvious of course. But those manufacturing numbers are - well - "grim". Also the Euro is charged up again making Gold in US dollars look quite attractive.

BoilermakerMK's message re Rothschilds gold market pullout#1237768/17/04; 05:31:27

I was just getting ready to respond to a message that MK posted yesterday and now it's MIA. What happened?
misetichRetail Sales continue slowing#1237778/17/04; 08:02:21


Consumer spending may be weakening further, at least according to the ICSC-UBS report for the week ended August 14. The report's index slipped 0.6 percent and is up only 3.0 percent year-on-year, no better than the rate of inflation.


The cloud of weak consumer spending may be darkening as both the Redbook and ICSC-UBS reports showed continued sharp declines in retail spending.

Redbook said sales fell 0.6 percent in the month-to-date period to August 14 compared with July. Year-on-year sales in the week alone were up only 2.3 percent, below the rate of inflation and compared with a similar 3.0 percent rise in the ICSC-UBS report issued earlier Tuesday morning.

ANOTHER sign, of declining consumer spending - The "soft-patch" is debt and real inflation quicksand

Withe GDP slowing in the US, corporate earnings set to decelerate with eventual layoffs rising, and real price inflation, led by energy hitting consumers wave after wave its inevitable for the US $ to accelerate its downward slope

All Aboard The Gold Bull Express - Part ll

MKBoilermaker, Slingshot#1237788/17/04; 08:23:46

Some of the posts in my 'not posted' file are there for good reasons. That was one of them. After re-reading the post (originally dated 4/14/04) last night I realized there were some holes in the logic and that's probably why I didn't pursue that line of thinking to a conclusion. I did post something on the evening of April 15th which I've pulled from the archives after I was able to locate the original Rothschild press release on dropping from the London Fix. That press release, inadequately represented in most of the press stories that day, changed my view of the Rothschild decision. Here is that critique and I look forward to any comments or questions any of you might have.

MK (04/15/04; 17:37:33MT - msg#: 119989)

The post below is in answer to Cavan Man, with something toward the end for Aragorn.

MK (04/15/04; 17:26:52MT - msg#: 119988)

Acutally, my good friend, you caught during my afternoon quiet time when I remove myself forcefully from the office and head for a quieter place to work on things I like to work on - and posting on the forum happens to be one of the things I like to do.

You are correct. We are very busy these days, as we almost always are when the price drops, and the true-believers make their presences known. I find the type of client who calls during these down treks to be the most enjoyable of our clientele - people who know what they are doing and why they are doing it. The physical market is quite a different animal from the paper trade and the motivations of the participants are different, as I can see from my visits to the forum, where some of the paper traders find this a good place to grumble about their losses.

But that leads me to your good question, and as always, it does not surprise me that you are the one here (among some others) who senses that the Rothschild move might be important. As you know, I have been a student of the Rothschild dynasty for a good many years and I certainly appreciate them for what they are - one of the first and most significant investment banking houses. I also appreciate the long term role they've played in the gold market. After all they did start out as a simple purveyor in coins and bullion and transformed that humble beginning under the Red Shield thanks for the most part to a combination of brains and good fortune into a legendary financial business - one synonymous with banking and running parallel to much of European history. And through it all they managed to remain a private firm owned by the family - an achievement I admire. By the way the story, as I know it, is that Nathan Rothschild had carrier pigeons as a hobby and received information of Wellington's victory long before the rest of the market and therefore had the opportunity to buy cheap before his City competitors knew of Napoleon's defeat. But that's neither here nor there.......I am neither a defender nor a critic of the House of Rothschild, just an observer.

The press release from NMR to me was more revealing than the colorful journalism that accompanied the announcement and my reading of it was that Rothschild was leaving the "trading" aspect of the gold business, but that they would continue with lending end of things which is where the real money is made. I've linked the actual price release above which was provided this morning by our good friends at I wouldn't be surprised however if they slowly but surely unwound the gold lending business as well, in that the nature of the business itself has changed and the role of lender to the mining companies is diminishing on its own. With Rothschild the motivation is the lack of returns on the simple commission gold business - which trades at very thin margins. The bigger profit gold carry trade business - which included loans and hedging operations (and all the management fees attached) - is dying, if not already dead, as mine companies go to the demand side of the gold fundamentals ledger. It signals the future of gold. The death of the gold carry trade/mine hedging businesses has come to fruition as I predicted a long time ago with the Rothschild retirement from the Fix being a final and highly symbolic milestone. Others will follow, as they go on to what they deem to be more lucrative businesses.

But what is the City's loss will be the physical owners gain because what the Rothschild withdrawal signifies is a reduced role for the banking functions - the operations as Aragorn and FOA pointed out here long ago that became anathema to higher prices. What is ironic about the whole thing is that the seeds of Rothschild's self-styled withdrawal as the lead firm in the London trade were planted a few years back by the firm itself when it pushed hard for more transparency in the gold market. NMR played lead dog in an effort that ultimately led to the first Washington Agreement and the beginning of the end for the gold carry trade and mine company hedging programs. That effort was led by a friend of a mutual friend of ours who posts under the CoBra handle - Guy...............(can't remember his last name) perhaps CoBra can help us.

I accept what NMR is saying at face value. I do believe that they do not do enough business on what they call the "commodity" end of things to support the infrastructure required to do it right. I note that they were careful to let their mine company clientele know that they would not be abandoning the business completely, and I'll tell you why I believe they went to those lengths: The trend now is for miners to buy back their hedges. Over the last few months I have been doing a great deal of research for the publication of the updated version of The ABCs of Gold Investing, and I can tell you, unequivocably that the most important development over the last few years is the swing by the mining companies from the sell side of the fundamentals ledger to the demand side - a swing of between 500 to 600 tonnes on the average (using GFMS' conservative numbers). That is a very big number. (I read with interest the comments here the other day about various writers picking up things and running with them. Wait til this little observation sinks in.) Rothschild is aware of the number. The hedge funds are aware of that number and that is why they are now net long the gold market.

People talk about paradigm shifts all the time and throw the phrase around with casual aplomb, but let me say that this is the kind of paradigm shift all of us in the gold market have been waiting for. (And now I've given you a glimpse of the theme of the new book - just recently accepted for editing by my publishing house). And this is precisely what Rothschild is reacting to.
I would not be surprised to see that firm end up in this market as an investor, as opposed to a broker - a move in keeping with their long history of exploiting major opportunity. There is more money to be made as an investor in gold these days, than in brokering it. Rothschild has no interest in the retail business, and that's the only place money can be made with regularity in today's gold business - they have always been essentially a wholesaler and syndicator of financial opportunities, and I couldn't think of a better opportunity at the moment than gold. However, I believe they will keep it to themselves just exactly how they will go about exploiting that opportunity.

Now here's the last part of what I have to say on this for the moment and now the groundwork is there to tell you why I believe Rothschild was so careful in their announcement today to let their mine company clientele know they would be there for them. Since the trend among mining companies is to buy back metal and settle their hedgebooks, how would you feel if you ran a mining company and one of your chief bullion banks told you they were cutting and running in toto? Your first question would be: "Well, how will I go about settling my book? I thought you would be here to buy for me if I needed it." That's the one thing I find unsettling about this whole withdrawal. If Rothschild had announced that they were completely out of the business, I think several mine company executives would have had to have been peeled from the ceiling. As it is, they say they are not dropping their lending business. Does that include assuring their clientele that they will be buying gold for them? Let's turn the coin over. Maybe, it is precisely because they have to buy for their clientele that they no longer want in on the London fix and the daily trade AS THE KEY PLAYER!

There is much to think about here, and I assure you there will not be a lack of players to fill the Rothschild gap (at least with respect to the prestige associated with the London fix), but the remaining question on the table is who is going to be the main player in the physical gold business now that NMR, at least on the surface has withdrawn. Can the market find the physical? And who's going to get it?
All of this dovetails with Aragorn's earlier post on the French/German situaion and I would like to say a few words on that, then try to pull this all together into some kind of sensible framework. Aragorn you talk about misplaced sentiments and your points are well taken. It is even more convenient to misplace the role of the central bank which is not as a quasi-hedge fund, but as a steward of the nation's money and protector of the banking system. The function of a reserve asset is not to make a central bank returns, but to give the nation a fall-back position should it need to defend its currency or raise capital in the event of a national emergency. The folly of casting central bankers as portfolio managers for the nation's assets can be most readily seen in the Bank of England's botching of its gold sales - all accomplished at cyclical lows in the $250 range. But I do not see that trend reversing itself.

The problem with the modern central banker is that he is no longer content to play the traditional role of steward of the nation's money and banking system. In order to emulate his colleague on the commercial side, he would rather trade the markets. Such thinking, in the age of the day trader, has become epidemic. Central banking used to be a conservative profession whose masters were drawn from the desks of the oldest and most influential banks, steeped in the tradition of making a sound loan, and providing an atmosphere which encouraged deposits. You could rely on these people. Now you had better know how to trade the markets and find the best returns if you want to call yourself a central banker and the Welteke affair, in this light, becomes a bit more understandable. My, how times have changed....... Next Europe will draw its central bank governors from the commodity trading pits and the hedge funds. But who am I to defend the old ways, humble Denver-based gold broker that I am? Better to sit back, watch the show, and help our clientele to weather the uncertainties such perfidy engenders.

In the end though, we all know that this business of selling off the national gold has something more behind it than simply garnering a better return on assets, don't we? All of which explains the full court press to bring the French and German gold reserves to the table - two of the largest remaining gold hoards on earth - in some quarters, it would seem, better achieved now at $400 per ounce then months and years from now at double or triple that price.

So it all ties neatly together. All signposts pointing somewhere the geography of which can be ascertained but not clearly described.
I'll leave this in the air......and a subject for this highly visited, well read, and perfectly positioned Table Round.

Chris Powell: I would like to ask that this remain here only as a matter for discussion at this table. It is not polished and meant for the wider world. Just some conjecture for table 'insiders' to chew on.

misetichGlobal: Twin Deficits at the Flashpoint? S. Roach,#1237798/17/04; 09:01:34


June's enormous US trade deficit should be a wake-up call to America and the rest of the world. It is a direct manifestation of a lopsided global economy that remains biased toward unprecedented external imbalances. As long as the US continues to live well beyond its means and as long as the rest of the world fails to live up to its means, this seemingly chronic condition will only get worse......
The plain fact of the matter is that America has never come close to running such an outsize external deficit before.
The point is that a chronic twin-deficit problem in a saving-short US economy requires ever greater volumes of capital inflows into dollar-denominated assets in order to finance ongoing growth in the domestic economy. As the current-account gap -- the broadest measure of international transactions -- rises toward 6% of GDP, America will need to import in excess of $2 billion in foreign capital each and every business day of the year. Up until now, that financing has occurred on terms that are very favorable to the United States -- there has been only a limited decline in the broad dollar index and virtually no increase in real long-term interest rates. In the end, however, a chronic shortfall of national saving cannot be financed indefinitely without consequences. Barring a sudden improvement in the national saving outlook, underlying asset values in the United States must be written down to match the ensuing reduction in this saving-short economy's intrinsic growth potential. That's where pressures on asset prices come into play.

Never before has the world's dominant economic power lived this far beyond its means. Most believe that America is special -- that it deserves special dispensation from current account, debt, and saving adjustments.
The dollar, US equities, and credit markets strike me as most vulnerable to such a development

Asia's central bankers appetite for US federal notes is "healthy" at the moment - as Japan's own printing presses - and moribund economy

South East Asia is still accumulating US $ from both their own direct trade with the US and from assisting mainland China in "recycling" their US $ surplus

China on the other hand which including Taiwan (its a matter of time) and HongKong has over $800 billion US $ reserves is recycling US $ and build their infrastrure

Mainland China has "slowed" increasing US $ reserves and diversified into Euros & Gold and are to be classified as US $ sellers rather than buyers

EU has been disording US $ over time. Oil producing countries have decelerated their US $ investments

Russia, a growing power thanks to their abudandt natural resources is diversifying into Euros and gold

Thus the US $ is being supported by a handful of SE Asia central bankers, and Japan -

Credit risks are rising and premiums (higher IR) will be demanded by creditors sooner rather than later

All Aboard The Gold Bull Express - Part ll

RimhDebt, savings and the (original) Great Depression#1237808/17/04; 10:51:04

After reading Black Blade's post regarding household debt/lack of savings, I got to thinking of my grandparents who experienced the Great Depression and the lessons they passed on to my parents and to me. Both sets of grandparents were farmers on the Canadian prairies who learned to save everything (including items such as short pieces of string) in a pack-rat like fashion. Even when the better times came and they had money, they rarely splurged on luxury items, still living in the mindset of the 30's.

In the 70's, when grain and cattle prices rose dramatically, my Dad maintained a steady course of paying off debt and buying used farm equipment instead of new. It was the mindset he had learned from his father who had come through the Depression. During that time, I witnessed a few farm auctions where the farmer had gone wild buying lots of new and big farm equipment and then couldn't keep up with payments, forcing him into backruptcy. They were mostly younger farmers, eager to get ahead faster by acquiring more and more land and bigger herds. In the end they got burned by the onset of high interest rates on a heavy debt load. In looking back, those auctions sent me a very strong message.

So here we are today, possibly on the cusp of another great financial purge, and I am glad that my parents taught me the lessons that Black Blade often recites:
Get out of debt, stay out of debt, and be prepared. Live small, not large.

And I'm grateful for what I have learned from everyone here at the forum: hold gold, true portable wealth, as your protection in uncertain times.

CometoseRimh/ Your learnings vs. the Ravi Batra theory #1237818/17/04; 12:00:13

Evidently , Rimh, you are the exception to the rule...

Ravi Batra is a Professor / student of History and Economics at SMU (that's Simply Marvelous University/ Southern Methodist University to Dallasites)

In his book , The Great Depression of the 1990's, which he projected for the last decade obviously...he made an interesting study of the Sociological patterns of Families and their teaching interactions. He said that it is very seldom that the Grandchildren of Parents that went through the depression LEARN the lessons of their Grandparents.
It's a Generational loss of information. He said that the sons and daughters of the Depression Survivors tire of hearing about it and tire of the habits of their parents to such a degree that they don't believe that it will happen again and (when HOPE can KILL) and because the don't want it to happen again they don't dispense the wisdom of their parents or the lessons of their parents to their Children (the Grandchildren of the Depression survivor Grandparents) .....Hence these Grandchildren are forced to repeat the mistakes of the former era and suffer the consequences again .....
I think that the BANKER's have a lot to do with this cycle repeating as well because they're the ones that cripple the system with the debt.....
We are in a lot worse shape to weather such a storm at this time .....No SAVINGS and RECORD DEBT.
GOV"T printing presses going into overdrive as soon as this Titantic opportunity begins to show it's true color ...People are pointing out the problems of the current printing press chugging onto the horizon but at severe economic decline will exacerbate that a degree some perhaps have not thought about.

Someone on another site this morning stated my view succinctly ....

That as soon as the masses see the STOCK MARKETS tanking and the dollar tanking , GOLD WILL LOOK CHEAP and OBVIOUS as a Value and a HEDGE.
Someone also said on another site's weekly broadcast , that the comex copper supply has dropped 80% within the past year......

THere is a silver lining in the CLOUDS and in the APPROACHING STORM.

USAGOLD / Centennial Precious Metals, Inc.... In Order to Form a More Perfect Union... (between You and Your Savings)#1237828/17/04; 12:07:54">Arm yourself with knowledge
SovereignWhat will Americans do when gold and sanity prevail?#1237838/17/04; 12:55:44

When Americans are no longer permitted to exchange worthless dollars against other peoples' tangible goods and services:

1) Will you try to reverse-engineer stereos and cars and computers and French cheese and make them at home?

2) If you succeed, what will you sell them to each other for -- for dollars? or for gold and Euros that you don't have?

3) Even if you are able to produce things for the same prices as the Chinese or the Indians do, you still cannot sell them to the Chinese or the Indians because of the inevitable shipping costs. How will you generate hard currency to buy the necessities of life, practically none of which you produce at home?

4) Even if you are a gold-holding American (a traitor or a terrorist?), will you be able to buy the things you need in a country without a viable currency that the population understands and the institutions use?

5) Who will be left to produce the things that you need when all that the producers have as capital to generate new production is basically worthless dollars -- and who would buy what they make anyway since cheaper alternatives are still available from overseas?


The only solution that you have, my American friends, is to close down your borders to imported goods and services and extort whatever else you can from foreigners by force of arms.



Ag MountainThere's a first time for everything#1237848/17/04; 13:52:07

I never believed in absolute perfection before, but now I've seen it. Mister Sovereign, you are a perfect ass.
USAGOLD Daily Market ReportPage Update!#1237858/17/04; 14:01:51">
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.

---closing market excerpts---

Gold futures on the Comex division of the New York Mercantile Exchange charged to one-month highs of $407.70 per ounce Tuesday on the back of fund and bullion bank buying spurred by the renewed strength in the oil price and continued softness in the U.S. dollar.

Fund and local trader interest picked up further as the return of crude oil prices to above $46.50 a barrel near historic highs reminded players of the potential threats to the global economy. "Oil got back up to its highs pretty quickly and that's really been the main supportive factor for gold today," said a floor broker on Comex.

The rally in the gold futures contract now has totaled more than $10 an ounce over the last three sessions. There has "been a remarkable level of demand from Asia, and recently growing demand from the Middle East," said Brien Lundin, editor of Gold Newsletter. "Some of this new buying appears to be directly tied to the rising price of oil, and the profits being realized in the oil-producing nations of the region," he said.

Profits made through selling oil in dollars are "finding a home in Treasuries and somewhat in gold," noted John Person, head analyst at Infinity Brokerage Services.

Against this backdrop, gold for December delivery closed at $406.70 an ounce on the New York Mercantile Exchange.

One major U.S. investment bank was a noted buyer of 1,000 contracts at the $406.50 level late in the session, and was deemed responsible for the tripping of resting stop-loss buy orders in the $407 area that propelled Dec futures to their $407.70 high.

David Meger, metals analyst at Alaron Trading Corp., said that the recent push higher in gold prices from below the $400 level late last week to the current one-month highs has drawn renewed fund interest and rendered gold's path of least resistance to the upside.

"While the market will remain volatile, it is likely that a new attack on $430 is at hand," said Lundin.

Peter Grandich, editor of The Grandich Letter, an investment advisory publication, said "Strong physical buying on major declines has allowed a very strong base under $400 to be formed," he said, adding that "most of the ingredients are now in place for a retest of the highs in the $435 area before year's end and a move to $500 in 2005."...

-----(see url for access to full news, 24-hr international newswire)----

CometoseChatter#1237868/17/04; 14:10:55

There is some interesting chatter over at the Special K this afternoon regarding some Hung Fat and DR Know types entering the market in a big way and Morgan Stanley was mentioned as a big buyer today ........
Also 405 was mentioned as a Pivot point.........
might be worth checking out....

mikalNyne One One all over again?#1237878/17/04; 14:56:19

Survey of economists finds threat of attacks outweigh deficits - The Associated Press -
Terrorism seen as top economy risk
August 17, 2004

SmeagolRothschild squeeze-play?#1237888/17/04; 17:07:57

Enjoyed your recent Posst, Ssir MK... thank you! It only raises our curiosity the more...

Thiss ssnip from the Predictions to Ignite the Spark (Fifth Horseman) ssection of the Hall of Fame:

Max Rabbitz (04/02/01; 08:59:59MT - msg#: 51245)
..."In addition to the attempted takeover of Goldfields in South Africa by AngloGold (Rothschilds) there is also TVX Gold which it is now feared is about to fall into the hands of their bullion banker creditors. Should these events occur a new flood of forward sold gold is likely to depress gold markets for perhaps another year. By then other mines would be ready for capitulation. I think this is their plan. Few if any mines will survive. Of course this forward sold gold is still in the ground and requires lending from above ground stocks to satisfy real market demand. This requires confidence that the financial and economic system will survive and the gold will eventually be mined."


These days the African Rand-fiat is very sstrong (why?), making the mines faint and weak... they are not doing well recently... Rothschild has sstepped away from the Gold-paper pricing-table but NOT from Gold itsself... sss... is thiss a play for mine takeovers by one or more Giants, or are we chasing shadow-thoughts? Anyone?


ToolieSir Smeagol#1237898/17/04; 17:37:12

I ran across the following article a couple of weeks ago. If I were to accept the notion that the purpose of the strong Rand was to weaken the mining sector, I might sooner go along with the idea that it was to put these interests in the hands of the desired South African nationals. But, I certainly wouldn't rule out what you suggest.

I hope you enjoy the article. I found it informative.

SNIP: While clinging to notions of Stalinism might seem strange to some, the ANC and its elite still refer to one another as comrade and use Marxist-Leninist jargon in their speeches and meetings. The most notable exception is the way the ANC has embraced neo-liberal economic theory, much to the chagrin of its allies in the South African Communist Party and in the Congress of South African Trade Unions.
"Mbeki is asking himself if he wants to position himself with the U.S., European Union or the Non-Aligned Movement. He has chosen the latter, along with Brazil and India."
When the ANC announced that all future mining ventures would have to be at least 50 percent black-owned, the mining stocks lost $6 billion in value in a single day. Understandably, Mbeki has chosen to keep such matters quiet.
The ANC is making it impossible to practice medicine. The ANC is bringing in Cuban engineers and teachers. This is politically significant because it expresses solidarity with Cuba. It is a massive anti-U.S. statement.

slingshotSir M.K.#1237908/17/04; 17:38:38

I see your point as to some of your editorials remaining in the file cabinet. Happen to come upon a post at the other castle and took offense to his comment. The gentlemen obviously knew nothing of you. Anyhow, further disappearing posts by you will be reguarded as golden extras that enhances my education. The only problem is, if I detect a delete,it will have me wondering if it was yours.
I enjoyed your post.

otish mountainDirt Poor During the Depression#1237918/17/04; 17:41:39

My mother did time in Saskatoon during the depression and my grandfather would get occasional employment at the graineries. Dirt poor.
She told me a story how during the 2nd WW they had recieved a case of canned oranges from one of our relatives serving in the Pacific. That case of oranges stay complete until well after the war ended in 1945.
The depression era left a strong impression and I must say an impression on myself as well.


goldquestMahendra is Predicting#1237928/17/04; 19:22:12

a very strong upward movement for gold and silver within the next 28 hours!
SmeagolSsir Toolie#1237938/17/04; 19:28:37

Thank you, Ssir Toolie... it jusst sseems a bit odd that the Rand is sso sstrong, what with all that's going on over there...maybe we are being short-ssighted. But...

"When the ANC announced that all future mining ventures would have to be at least 50 percent black-owned, the mining stocks lost $6 billion in value in a single day. Understandably, Mbeki has chosen to keep such matters quiet."

...thiss is the ONLY mention of It, without using the word 'GOLD', in an otherwise extensive article...

"Yet more importantly, Mbeki understands the South African economy and South Africa's place in the global economy," Rayford continued. "The value of the Rand is not determined by the ANC or the Reserve Bank but rather by macroeconomic forces. The South African economy is basically commodity driven – wine and nuts are a part of that. You see, the ANC can and has changed the name of Pretoria to Tswane, but they can't change the fundamentals of the South African economy."

...again, no mention of It...

sss... we are only susspicious... we shall wait and ssee! (grin)


CamelCulture War#1237948/17/04; 19:50:29

Even in the city ,for the most part, it is quite peaceful, especially if you are in one of the " better " neighborhoods. I'm sure we've all had an unreal feeling about the serenity of things over here compared to the daily blood and gore in Iraq. They seem to be fighting sort of a holding action hoping something will go wrong on our end. They sure don't seem to have any trouble finding people willing to die for the cause. .

Isn't it in the Bhagavad Gita that Krishna instructs Arjuna on the battlefield. With two armies face to face Krishna tells Arjuna that the advance of humanity will only be achieved if they can defeat their adversary.

Even Buddhism could possibly be more influential. Its not generality appreciated, but at one time (Tang Dynasty) most of China had converted to Buddhism and many of the emperors at that time were Buddhists. There is presently a culture war going on through out Southeast Asia, with Buddhism trying to hold out against modernism that could spill over into China

I doubt that there is too much connection between Buddhism and gold but even less between Buddhism and credit. As Sir Lancelot , oops, I meant Sir Aristotle used to say. Nothing like a little gold to give a person peace of mind.

Paper AvalancheThe dividing line.....#1237958/17/04; 19:53:14

I have been trying for many weeks now to locate a specific quote by Sir Alan Greenspan during previous testimony that he provided to Congress. Either I am now dreaming past memories or I have a stark, yet elusive, recolection of the newly knighted head of the private, for profit, entity known as the federal reserve as saying (I'm paraphrasing):

"We stand ready to call upon the powers of heaven and earth in order to prevent the price of gold from eclipsing the $429 per ounce threshold."

The part about heaven and earth is not a paraphrase per my limited memory. Those specific words, in fact, are what stand out about it in my mind. I can't shake it.

I cannot find any source among the 1.9 billion sites on google to reference this. I guess if someone has access to Lexis-Nexis this could be searched more exhaustively.

The point of it all is this:

1. I have this vivid memory of AG saying this specific quote and
2. Not since 1996 has gold been allowed to settle above $430 for more than 24-48 hours before being ceremoniously (almost to make a point) pummelled back into submission.

Is my memory a figment of my imagination? Are there those among the forum with better research tools available to them to spend a minute or two to see if I'm crazy?

Thanks in advance and take care.

The paper avalanache is on its way whether we want it or not, despite what the nice people on TV tell us.


Chris PowellWhat Greenspan really said about gold#1237968/17/04; 21:54:25

Paper Avalanche, Fed Chairman Greenspan's intent and
the intent of most central bankers are certainly consistent
with your impression -- to smash the gold price by any means possible -- but Greenspan has never made in public a comment about the gold price quite as frank as the one that sticks in your memory.

Maybe you're thinking of Greenspan's comment to the House
Banking Committee on July 24, 1998, which he repeated shortly thereafter to the Senate Agriculture Committee:

"Central banks stand ready to lease gold in increasing
quantities should the price rise."

Greenspan's full remarks from July 24, 1998, are still
posted at the Fed's Internet site here:

A GATA discourse on central banking's notable admissions about manipulating the gold price can be found here:

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

AristotleIt's good to see you on the scene rendering timely aid like a paramedic, Chris#1237978/17/04; 23:08:17

I've always thought this to be one of Greenspan's more interesting speeches, though it probably has more to do with the topic being derivatives than on any general lacking in his other talks on the likes of bank supervision (big YAWN) or even intererest rate, which themselves can be a fascinating study, too.

When we're talking about something this important, compounded by the dated nature of the material, a little context is a good thing, so here's a bit more to help book-end that infamous key phrase:

"-----------------The early legislation on the trading of commodity futures was primarily designed to discourage forms of speculation that were seen as exacerbating price volatility and hurting farmers. In addition, it included provisions designed primarily to protect small investors in commodity futures, whose participation had been increasing and was viewed as beneficial.

"The Commodity Futures Trading Commission Act of 1974 did not make any fundamental changes in the objectives of derivatives regulation. However, it expanded the scope of the CEA [i.e., Commodity Exchange Act] quite significantly. In addition to creating the CFTC as an independent agency and giving the CFTC exclusive jurisdiction over commodity futures and options, the 1974 Act expanded the CEA's definition of a 'commodity' beyond a specific list of agricultural commodities to include 'all other goods and articles, except onions,...and all services, rights, and interests in which contracts for future delivery are presently or in the future dealt in.'

"Given this broadened definition of a commodity and an equally broad interpretation of what constitutes a futures contract, a wide range of off-exchange transactions would have been brought potentially within the scope of the CEA.

"The Treasury Department was particularly concerned about the prospect that the foreign exchange markets might be found to fall within the Act's scope. Aside from the difficulty of manipulating these markets, Treasury argued that participants in OTC markets, primarily banks and other financial institutions, and large corporations, did not need the consumer protections of the Commodity Exchange Act.

"Consequently, Treasury proposed and Congress included a provision in the 1974 Act, the "Treasury Amendment," which excluded off-exchange derivative transactions in foreign currency (as well as government securities, and certain other financial instruments) from the newly expanded CEA.

"What the Treasury did not envision, and the Treasury Amendment did not protect, was the subsequent development and spectacular growth of a much wider range of OTC derivative contracts--swaps on interest rates, exchange rates, and prices of commodities and securities.

"The vast majority of privately negotiated OTC contracts are settled in cash rather than through delivery. Cash settlement typically is based on a rate or price in a highly liquid market with a very large or virtually unlimited deliverable supply, for example, LIBOR or the spot dollar-yen exchange rate.

"To be sure, there are a limited number of OTC derivative contracts that apply to nonfinancial underlying assets. There is a significant business in oil-based derivatives, for example. But unlike farm crops, especially near the end of a crop season, private counterparties in oil contracts have virtually no ability to restrict the worldwide supply of this commodity. (Even OPEC has been less than successful over the years.) Nor can private counterparties restrict supplies of Gold, another commodity whose derivatives are often traded over-the-counter, where central banks stand ready to lease Gold in increasing quantities should the price rise.

"To be sure, a few, albeit growing, types of OTC contracts such as equity swaps and some credit derivatives have a limited deliverable supply. However, unlike crop futures, where failure to deliver has additional significant penalties, costs of failure to deliver in OTC derivatives are almost always limited to actual damages."

"[Later]..... I do not mean to suggest that counterparties will not in the future suffer significant losses on their OTC derivatives transactions."------------------

But who has time for all that, right? We live in the age of the soundbite. All we ever get is a nice, juicy morsel to chew and choke on to the effect that Greenspan said, "Central banks stand ready to lease Gold in increasing quantities should the price rise."

And out of it our poor world gets filled with good guys like Paper Avalanche walking around, with a head stuffed full of intermingling soundbites, searching high and low for the mythical occurrance of Greenie saying "We stand ready to call upon the powers of heaven and earth in order to prevent the price of Gold from eclipsing the $429 per ounce threshold."

But who has time for the full story, right? In fact, I wonder, how many readers saw the size of this post and then simply did the proper thing with their scroll bar? Oh well. I can't go changing the nature of the world, so I simply do what I can to understand it as it is, warts and all, and try to cope with it as favorably as I can on its existing terms.

So, that's all a long way around to say, in poker palance, I'll see your itty-bitty July 1998 Greenspan quip, and raise you a September 1999 Duisenberg doozey speaking on behalf of 15 CB presidential/governing colleagues:

"The [15] signatories to this agreement have agreed not to expand their Gold leasings and their use of Gold futures and options."

Sorta takes the wind out of Greenspan's sails, eh? So why is it that so many bugs can rattle off Greenspan's remark while very few Gold Advocates have Duisenberg's chip so near at hand?

The media does its job too well.... or not well enough???????

Gold. Get you some. --- Aristotle

AristotleI'll take a crack at my own question#1237988/18/04; 00:31:29

"why is it that so many bugs can rattle off Greenspan's remark while very few Gold Advocates have Duisenberg's chip so near at hand?"

It probably purely a matter of demographics. There's far fewer physical savings Advocates than there are paper-speculatin' bugs. Granted, they're each equally exposed to the same media, but it's their inherent ability to absorb and correctly process the data that finally determines whether someone graduates to the elite group of Gold Advocate, or else wallows away with the rest of the brainwashed masses in the pits of a papered-over life where numbers remarkably mean more than substance, and where their numbers are used primarily in the pursuit of more numbers. How can any of those guys call that way a Life?

Gold. Get you one. --- Aristotle

PS. Keep spreading the word, Chris. In a world of climbing prices for goods and services, and in a world of competing investments, Gold is the best deal for the money in both worlds. Get you some.

NedAg Mountain#1237998/18/04; 04:08:26

No doubt that the post is bold. After the initial shock that it presents, one can begin to analyse its accurancy.
USAGOLD / Centennial Precious Metals, Inc.Wake the kids and phone the neighbors!#1238008/18/04; 04:41:00

Hamburg Gold

 August Buyers' Group

The Hamburg Germany 20 Mark


This exceptional coin speaks for itself.
If you don't believe lions can fly,
you should see these kitties leaving our vault.

We've tossed in some volume incentives...
just because we like you so darn much.

Clink!A tale from the trenches #1238018/18/04; 07:02:15

To continue the habit of people posting anecdotal evidence that inflation is not quite what the CPI would tell us, here's my piece :-
In early '01, I took my car in for its 30,000 mile service. Cost - $286. I have just done the same for my current car (same make and model at the same dealership) - $411. Assuming three and a half years between the two events, that comes out as just under 11% annualized.
Now, thinking a little deeper, if the relatively slim margins on selling new cars have been shaved even thinner by the fierce sales competition, the dealership is obliged to find their profits elsewhere. It sounds a little crazy, but maybe they are employing the Gilette marketing approach - give away the razor and make your profit on the blades !
I wonder how the CPI hedonics take this into account - how about 'As the motorist is stung by the huge bills incurred at a service, he either a/ increases the distances/times between services or b/ takes it to Walmart/Sam's/etc and only gets the oil and filter changed and the brakes checked. In either case, we'll fudge the assumptions so the end result will be "statistically neutral" for the index'.


goldenpeace ToCamel: on Buddhism#1238028/18/04; 07:03:59

Dear Camel,
Both Buddhism and gold are intensely focussed on the values and qualities that lie at the Heart of "the appearance of things".
In the questionning lies the meaning.
Blessings to the forum and our Noble host

Clink!Now there's an interesting chart#1238038/18/04; 07:22:16

I posted this for the two graphs showing the POO and the S&P500 - you can make what you will of the commentary. It's interesting how the two are beginning more and more to move in opposite directions. I'm not sure you can make too much of a quantative analysis, as the percentage changes in POO are so much greater than the index, but it sure looks like one is having a significant effect on the other.

Clink!1.3billion reasons to worry about oil#1238048/18/04; 07:34:53

Methinks that any discussion about the total amount of oil that can be pumped and remaining reserves is somewhat akin to wondering if it matters if you are accelerating or braking hard when you hit the brick wall at 70mph - the results are dominated by the brick wall, not the rate of change of velocity.

Snip :-

China's economic growth has bubbled along at a steamy pace of 8 to 10 percent a year for the past decade.

With that growth, private auto sales in that vast nation have skyrocketed from token levels 10 years ago -- only 220,000 were sold as recently as 1999 -- to nearly 2 million this year. Last year alone, China's automobile sales increased by a staggering 69 percent.

And another (really scary !) snip :-

Nor are Chinese consumers, especially those in the growing middle class produced by a booming technology sector, particularly interested in fuel-efficient small cars. Gas-guzzling sport utility vehicles are not simply an American passion. They are in great demand in China, too.

Bikes ! Get you one.

HenriAg on a tear#1238058/18/04; 10:53:48

Jump spot, Jump
CometoseThe Dike#1238068/18/04; 11:02:29

The dike is springing another leak today ...............
in the Looney ............ and this is a precursor to

TownCrierWith Fed funds trading softly at 1.44%, the Fed soft-pedaled policy even further today#1238078/18/04; 12:14:19

The Fed trading desk entered the market to provide the nation's banking system with a splash of $3.5 billion in fresh cash through a round overnight repos, well below the FOMC's latest officially stated target of 1.5 percent, letting the participating financial institutions have at it at an average price of 1.396 percent.

Meanwhile, in a clear sign of the times....

LONDON, Aug 18 (Reuters) - High oil prices weighed on investor sentiment across financial markets on Wednesday as the price of crude lifted to a record high above $47 a barrel.

"If oil keeps going to $50 (a barrel) you are definitely going to have a problem with the market," said Barry Ritholtz, chief market strategist at the Maxim Group.

Investors have become increasingly worried about the impact of oil prices as U.S. oil has set all-time highs in all but one of the previous 13 trading sessions. It is nearly $10 a barrel or 26 percent dearer than at the end of June.

The most recent price spike, however, was a reaction to data showing U.S. consumer prices falling in July for the first time since November. That suggested retail demand for oil would not tail off and that oil price rises so far were having a relatively minor impact on headline inflation.

Who cares what inflation there is in the headlines? Whether or not the media acknowledges it doesn't change the facts of the matter, which is, the stuff that matters is the inflation appearing on the store shelves.

Finally some good news: You don't have to stand idly by as inflationary trends plunder you down to the bones.

It's never too soon to prepare yourself for the journey ahead. Use the url to request an introductory information packet from the most professional gold brokerage I'm aware of -- USAGOLD~Centennial Precious Metals. As you'll see, providing your phone number is optional; the staff at USAGOLD~Centennial are not in the business to call you with high-pressure sales tactics like we see coming from other firms. You, alone, are in the best position to know when the time is right for you to add gold to your portfolio, and it is for those such times that USAGOLD~Centennial is pleased to provide you with a toll free number to accept your incoming calls.

If you're new to this realm, take your next step toward financial sovereignty and make your request to have a free info packet mailed to you today!


TownCrierThe world's biggest gold buyer, India, to see it's appetite for gold fueled as inflation soars?#1238088/18/04; 12:36:31,4574,125917,00.html?

HEADLINE: India cuts oil duties to curb surging inflation

NEW DELHI - India's government cut customs and excise duties on most petroleum products on Wednesday in a bid to curb inflation, which has soared in recent weeks due to rising global oil prices and late monsoon rains...

Finance Minister P Chidambaram said gasoline and diesel customs duties would immediately be lowered to 15 per cent from 20 per cent, while duties on kerosene and cooking gas would be halved to 5 per cent.

'The duty cuts will bring inflation down as of today. They should knock about one percentage point off the inflation rate,'....

This year's monsoon rains arrived in August - more than a month late - fueling speculation that farm output might decline, driving up food prices...

Runaway inflation poses a tough political test for the new Congress party...

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

You know the pricing situation is precarious when a government trims its source of revenue from customs and excise duties in the name of giving consumers a bit of relief from overall price shock.

All at a time when we begin to enter the seasonal period where Indian gold-buying begins to pick up anyway.

Call USAGOLD~Centennial today to beat the rush and higher prices.


TownCrierEurosystem consolidated balance sheet#1238098/18/04; 12:49:00

Last week the net position in foreign currency was pared down by 300 million euro, and on the money supply front, the ECB trimmed 7.5 billion euro in net lending to financial institutions as a main refinancing instrument matured and was replaced with one that much smaller.

Meanwhile, on this side of the pond, why has Reuters ceased with its regular reporting on the Federal Reserve's money supply figures each Thursday? For the past couple of months, if you want them, it seems that you have to do the work yourself.

In monetary matters, public perception is everything.


adminHamburg Special - 1/2 Sold #1238108/18/04; 12:53:06

Just a short note to say that we are about half sold out on the Hamburgs. You can order at the online shop (linked above) or call 800-869-5115. As always the coins are sold on a first-come, first-served basis.

Also interesting market activity on the Comex end of session last two days.

CometoseNajaf peace/ oil price ////gold price#1238118/18/04; 13:17:08

Looks like peace is breaking out in Najaf but it hasn't seemed to have had an affect on OIL's surge now knocking at $47.50 .....Come $50.00 around the next bend...

Someone earlier this morning remarked that 50$ oil makes for a 10 to 1 ratio of Gold to Oil bbl (with gold at $500 per oz) . This is a ratio which is particularly bent at these levels as the average over the past several decades has been 25 to 1.

I think jpmorgan capitulation when it arrives and is followed by chase and the other brothers going to be quite a site to behold...
It won't matter what it looks like if you've not already taken your position and are not standing by it .......

When this spring uncoils...........

TownCrierTrying to paperize India#1238128/18/04; 13:23:39

HEADLINE: India to host 2-day seminar on gold
India, the single largest importer and consumer of gold in the world, will host a two-day seminar `India Gold Convention 2004’ later this month in Mumbai. Multi Commodity Exchange of India Ltd (MCX) will participate in the convention as ‘exchange partner’, the bourse said in a release.

MCX will conduct a training program on technical and operational aspects of futures trading in gold.

"Indian gold futures market is expected to multiply 10 times of spot market in the next three years to 8,000 tonnes of gold, valued at Rs 4,80,000 crore. With a 50 times multiple, which is a standard multiple factor in markets of COMEX, the Indian gold futures market is expected to grow to a staggering size of 40,000 tonnes of gold, valued at Rs 24,00,000 crore," Jignesh Shah, managing director of MCX, said.

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

Bullion bankers trying hard to keep the wheels on their fractional, near-gold dealings.


USAGOLD Daily Market ReportPage Update!#1238138/18/04; 13:33:37">
The Daily Gold Market Report has been updated.

If you are considering investments in gold we invite you to">request our free introductory information packet detailing the products and services offered by USAGOLD ~ Centennial Precious Metals. We welcome your inquiry and look forward to working with you.

----closing market excerpts----

While the slight strengthening in the greenback Wednesday trimmed some of the buying interest seen in gold so far, the ongoing rally in oil prices remains a supportive factor because of the threat high energy costs pose to economic growth and stability. As a result, by late morning Wednesday Dec gold continued to find support at the 200-day moving average around $404, and is expected to uncover further pockets of buying interest around $402 and $400, dealers agreed.

Gold futures closed little changed Wednesday, but still registered their first decline in four sessions following a winning streak that's added more than $10 an ounce to the metal's price.

Gold for December delivery closed at $406.60 an ounce on the New York Mercantile Exchange, down 10 cents for the session.

Todd Hultman, president of, a commodity information provider, said, overall, "gold prices should continue to chop higher, thanks to no growth in this year's mining production, a low federal funds rate ... and a slower-than-expected U.S. economy."

"Gold has rallied in both U.S. and non-U.S. dollar terms over the past week, although further near-term gains will require speculators to step up to the plate," said Andy Maag, an analyst at UBS in London.U.S. economic data point to a weaker dollar, but the "lack of follow through is probably a reflection that the euro/dollar, and thus the dollar-denominated gold prices, is a little toppish and that a short-term dip beneath $400 an ounce may be in the cards in the near future," he warned in a research note.

But James Moore, an analyst at, said that "the outlook is still positive." High oil prices and volatility in the dollar, among other factors, suggest that the metal "will continue to test higher with a target of $408 to $410 once the $405 level is conquered," he said...

----(click url for access to full news, 24-hr newswire)----

Federal_ReservesShamocracy#1238148/18/04; 15:07:48

Well its apparent to me most folks don't have a clue as to the real workings of the world today. We live
in a so-called democracy but the reality of the situation is different. Its a sham. The rich people run things. Oh
not the ones you read about in the paper, these folks lie low, and you never heard of them. They live in
mansions and stay out of the limelight.

At the highest levels, there is no democracy, and there probably never was.

Imagine 80 thousand people at the Derby. They are there to see a two horse race. The bets have been laid down.
The competition begins and two minutes later one horse beats the other by a nose. Half the people roar with
approval and rise to collect their 10 cent winnings on a two dollar bet. The other half rip their tickets in
half and mutter "Wait till next time".

What both groups don't see is that high up in the grandstand, in a luxury booth, the rich folks are grinning ear
to ear. They own both race horses and the track to boot. They collect the million dollar purse for the winner
and the second place prize as well, and a 15% commission on the betting of the masses.

I find it amusing that millions of Americans were pissed that Bush stole the election from Gore. They don't
realize that both men had been pre-selected. It didn't much matter who won - to the REAL people in power.
Bush is doing what he's been told to do - just as Gore would have done if he had been a little luckier. Both
would have invaded Iraq. Even KERRY says he would have now. Guys like M.Moore and the SwiftBoat Vets against
Kerry are just paid hucksters to drum up hate for the other side.

Trace back through the decades and the various Presidents and dig deep to really find out how they got to
where they did. The people they knew, the clubs they belonged to, both Bush and Kerry belong to the same
frat club. No one knew about Bush Jr. except Texans and those few who were into politics. But practically overnight he
was endowed with a 100 million dollar war chest a year before the election. The controlled media paid him
scads of attention and fairly soon his name was a household word. There is no way a Nader or a Joe Public
can compete with this.

In the end it will not matter which of these jugheads win, the controller is up in the booth.

Sheep will always be sheep and so the vast North American herd will continue to think that their voices
count, that their votes matter. The rest of us need to do what we must do. We might be in the know, but
we are still powerless. Other than holding GOLD and protecting ourself against the collapse of the rich folk currency, not much to do.

R PowellRothschilds withdrawal from gold "trading"#1238158/18/04; 16:48:32

Some thoughts here in response to M.K.'s initative in post 123778, 8/17/04.
I hate to sound so formal with a sentense like that (sounds like the wording of some sort of legal document) but, it explains why these forthcoming thoughts are clanging around in my head.

Perhaps the crux of the matter here concerning the Rothschild withdrawal from the gold market can be clarified in the statement (from the link provided) that...

"N. M. Rothschild + Sons limited, London announces that it is withdrawing from the commodities trading, including gold."

Gold, whether one considers it to be a commodity or not, trades as a commodity on the Comex. It trades..."trades" a manner consistent with other commodities or raw materials or tangible goods. These include such things as live hogs, soybeans, base metals, sugar, etc. Rothschilds did not say anything about leaving the gold business (other than that they were leaving the gold "fixing" process, which may be more of a social ceremony that anything pertaining to determining the cost of gold). They did say that they were closing down their commodities trading business. These are two entirely different businesses. This means that they will not be buying or selling pork bellies, Canadian dollars, wheat, soybeanoil, copper, cotton, natural gas, gold, etc. Trading commodities versus dealing in physical gold or other banking transactions based on gold (whether physical or simply the price of gold) are similar in that both are transacted for the purpose of profit. After that, similarities are hard to justify. I'm suggesting here that the statement may mean no more than what it says...Rothschilds is no longer trading commodities.

Why? Probably due to the lack of profit. I doubt that they would terminate any business department that makes money! Other than perhaps having a considerablely greater amount of money to spend on research, I am skeptical that they are any more proficient at making money in the commodities casino than some of the other big players and perhaps some of the smaller (read smaller as fewer dollars available for leverage) However, defending that opinion is not the subject and could lead into years' worth of research, debate, etc. Why bypass the simpliest reason (Ockham's Razor) that Rothschilds' has closed down a business department because it was not making a profit?
More to come after my computer cleans house on nasty bugs...

melda laure(No Subject)#1238168/18/04; 17:26:22

Oil looks like it is due for a correction, or perhaps its just the divergence with unleaded gas that bothers me. Are gas inventories rising? Gasoline prices higher than they ought to be? Other sources of gas being tapped that I dont know about?

Fed_Reserves : "In the end it will not matter which of these jugheads win, the controller is up in the booth."

What you say is belived by many others, of that I can assure you, though I have many still unanswered questions. In particular, I just found it inane that BOTH candidates (in the election you spoke of) were heatedly debating the fate of a future/present "social security surplus" that did not exist. In any case, I dont care who sits in the control box because the race track is about to burn down.

I suppose oil could correct all the way to the $40 neighborhood by november; that whould shine up the market, the DXY and keep the lid on gold. The question that follows is: "then what?" Because that's all it would be, a correction, a delaying of the pain, a deferrment of that painful dental cleaning that should have been done long before.

Paper AvalancheThanks Chris and Ari#1238178/18/04; 17:32:26


Thanks for the specific link to Greenspan's remark. I guess that Ari is right, I have co-mingled so many sound bites over these many years of studying / observing this clash of financial titans (albeit as a past-time, and not to the degree that Ari has so diligently done) that I have altered my own recollection of Greenie's remarks to incorporate a bit more than the actual quote.


I must thank you for being one of the few contributors who was here when I arrived to this fine forum and is still around today. I haven't been hanging out much - new gig keeping me busy. Not much need to do so. I have already placed my bet and I think you know which side I'm on. Your continued offerings of history, wisdom and an understaing of the upcoming changes are of tremendous benefit to all those who would take the time to educate themselves on this terrific forum.

Take care all.


CometoseVolatility #1238188/18/04; 17:39:21

Like the action in spot ; it's getting really interesting
like tremors in the earth that mark the beginning of a volcanic blow off...........Mt St Helens perhaps 1980 followed one of the most dynamic GOld Moves of the last century.....It was the gold move of the last century....
25 years later and we've already come full circle....i would think.....we have come full this funny Masquerade.......

AristotleDig deeper#1238198/18/04; 17:43:40

If Belgian were here he'd probably ask you to dig deeper into your own thoughts about this. It's not enough to simply conclude that Rothschild exit is due to lack of profit.

First of all, that alone begs the more important, fundamental question -- why has the income in this area suddenly dried up? Something's obvoiusly changed, so let's ask what it might be.

Could it be that parties previously using the likes of Rothschild to broker OTC complementary oil and Gold contracts (aka ANOTHER's "oil for Gold") are no longer pursuing that line of activity? One look at public LBMA clearing statistics (historical) for Gold makes an argument for the point better than I'll even bother to recreate.

Also not to be so readily discounted, as you hang your hat on the motive of present profitability, is that Rothschild may know a thing or two about the imminence of FreeGold (non-paper) Gold markets coming down the road and the house is using this time to make a graceful, early exit.

Gold. Get you some. --- Aristotle

AristotleThank you, Paper Avalanche#1238208/18/04; 17:56:26

You're welcome. As long as I'm holding a torch aloft in the finding of my way through, I'm perfectly happy to have others find their own feet by utility of that same light.

I think of it as some sort of medieval car pool.

Gold. Get you some. --- Ari

R PowellContinue#1238218/18/04; 18:14:11

My anti-virus (bug smashing) system often kicks me off-line so I wanted to post what I had written before I lost it. I hate when that happens :>(

Rothschilds stated that they would still be available for all other banking and investment services. This would seem to be a prudent disclaimer to make when announcing the discontinuation or termination of any one of their endeavors. It reassures clients that they are open for business as usual. I have, in the past, reassured clients that I would be available for hire even though I would out of town for a short time. Hey, I don't want to lose their business when they can't get a response from me for a week or two! Not returning phone calls is a sure way to kill any business.

In fact, in regard to gold, Rothschild said they would continue their "lending" business. It may very well be, as Michael surmises, a much diminished business but gold will, imho, retain it's excellent creditentials as collatoral. So, being in the banking business, I would guess that Rothschilds will still be active in the lending, borrowing, brokering and perhaps investing (in the) gold business. After all, gold does possess some unique properties not characteristic of other commodities, namely good collateral (better than a safe full of pork bellies).

My understanding of the gold carry trade is that physical gold was lent out by owners in order to collect interest. The interest necessary to borrow was relatively low in comparison to other investment returns so....lenders collected some interest and borrowers could sell the physical for cash to fund other higher paying investments. The broker charged transaction fees and perhaps also gained investment or brokerage fees from the reinvested monies. Gold's fungibility makes this possible. Carry trades are not uncommon. Is there a dollar-carry trade that will have to be unwound if interest rates increase? Another topic. Anyway, economic changes have occured so that this gold carry trade is no longer profitable wasn't built overnight and will take time to unwind. Now Rothschilds can make money by brokering investors OUT of those higher interest baring vehicles (stocks, bonds, real estate, etc.), then repurchasing gold to return to the original lenders. Carry trades are unwound whenever they are no longer generating a profit for the investor. However, initiating and unwinding such carry trades are profitable in both directions for the banker or investment company making the transactions. Rothschilds is such a company.

Might Rothschilds now become an active buyer of gold? Perhaps they have been? Why not? I don't know how much "in-house" investing Rothschilds does but it seems entirely logical to me that they would buy and/or sell anything (or anyone? don't be cynical, rich) if they thought there was a profit to be made. Raw capitalism! Incentive is a powerful force. If Berkshire Hathaway can buy and take possession of 129.7 million ounces of silver, (did Buffett get it all in physical form??, again, another subject) then why couldn't an investment operation like Rothschilds buy gold?


Another thought to be added to the Rothschilds withdrawal from commodities trading (earlier post) is that the evolution of computers and the emergence of discount commission brokers has immensely altered the business of brokering commodites. Years ago (and not too many) one couldn't access nearly enough information to trade intelligently so most traders relied on their brokers for "trader-assisted" transactions. Commissions were routinely $200 per trade or more! These same transactions can now be done with a few computer clicks (or by telephone) for well under $30.00 and in some cases for a fraction of that! And yes, these include limits, spreads, stops, market-if-touched, fill or kill and many other somewhat complicated orders. .....Okay but why are you telling us this, rich? We're not interested in trading, you know that!! Simple...Ockham again...maybe Rothschilds has lost their commodity brokerage business to the advent of computers and discount brokers. Nobody pays outrageous fees when there are discounters providing the exact same service for cheap.

Anyway, just my thoughts (somewhat pragmatic as usual), with my logic being biased with an eye for profit (which does have an awful lot to do with the workings of this life) rather than what someone thinks is right or wrong, good or evil....manipulated or free market driven.

Feel free to agree, disagree, add, complain, call me an idiot or question. I believe some thoughtful discussion was exactly what M.K. had hoped to instigate with yesterday's (123778) post. Let the games continue!

R PowellRothschilds...continued#1238228/18/04; 19:17:11

Hello Aristotle. As to why Rothschilds has exited the commodities brokerage (or trading on their handle?) business, please read the post I was typing while you were asking. I believe very inexpensive commissions, often done online, has hurt the profitability of their client oriented business. I'm surmising, enough so, as to put the most expensive of these brokers out of business. There are a multitiude of brokers looking for business...with cheap rates. As to whether the exit was one of exiting an "in-house" commodity trading venture, well, if it was, they are joining a long list of unknown and some quite prestigiously know former commodities traders who have gone bust (or not retained profitability) in a zero sum game. By "in-house" I mean they may have been financing their own trades and by zero sum game I mean that for every dollar gained there is one dollar lost. You knew that, perhaps not everyone did. There are usually fewer gainers than losers but the money totals are equal. There is no reason to assume that Rothschilds is immune to such loses. Leveraged speculation has been in existence (in the modern era) since the early London coffee houses emerged as the first stock exchanges. The assumption of risk by those willing to assume it and the removal of risk from those who need to remove it (or hedge it, to promote business and raise the standards of living for all) requires speculation which will not exist without reward. Simple capitalistic principal. The man carrying the shotgun on the stagecoach got paid! But there is risk...maybe Rothschilds hired the wrong analysts or traders? Very few (none?) can call (predict) these markets with any degree of matter what method or system they claim to employ. Although there are extravagent claimes made daily that it can be done. These are mostly made by those who have systems or newsletters for sale....most of these are pure junk except for those selling them! But enough trading talk, which I know does not interest you. The lack of knowledge of how many market DO operate (as opposed to how some perceive them) is a constant source of other misunderstandings.

As for making a graceful exit from paper trading in order to accumulate physical....Why would buying physical interfer with any commodities brokerage? The broker collects his fee immediately...that is, as soon as the order is filled. The fate of that trade has absolutely nothing to do with the commission amount or the fate of the trade. Now, if Rothschilds is involved with "in-house" paper gold trading....I still don't see why such trading would, should, could interfer with buying physical, unless....unless.. Rothschilds intends to buy enough gold so as to perhaps be subject to market manipulation charges if they did buy huge amounts while holding massive long paper positions. Now, that's worth thinking about, no?

I also saw your reference to "freegold" (non-paper) in regards to Rothschilds exit from "trading" gold. But Rothschilds exited trading commodities, not just gold. I do not hold to the theory of a massive derivatives meltdown leading to total banking and/or monetary crisis. In fact, I believe the theory is total hogwash but let us NOT get into that yet again. But...but..even if Rothschilds did (does) fully adhere to such a theory and..even if they thought such a meltdown were imminent...why would this lead them to exit brokering commodities for clients? The broker, when brokering between two parties, makes the deal...for a commission but is not a party or a counterparty to that deal. The margin and responsibility for the offsetting payment are held by a clearinghouse. Some brokers are also clearinghouses, yes, and if Rothschilds are such....and if they do hold to the derivatives meltdown, end of the world scenario, then I would admit that they may be removing themselves from the business. I'll also admit that an asteroid could destroy the earth tomorrow, but, each to his own opinion. I've made mine but am always open to NEW information, news and speculation on the subject.

Black BladeTerrorists To attack US Dollar?#1238238/18/04; 19:41:24

"Interesting" segment on a fairly mainstream media outlet said today that al Qaeda has plans to attack the US dollar. I seriously doubt they can do more to break the US dollar than our own current account and budget deficits, but then again no specifics were given. The real danger IMO is when the Chinese or Japanese start bailing out of US Government Dollar debt as interest rates rise. The WTC attacks on 9-11 were an attempt but I don't see what more the terrorists could do to the dollar that we aren't doing to ourselves already. Obviously hard asset Gold and Silver is a core "investment"/"portfolio insurance" for such reasons as these.

- Black Blade

Maiden FanBlack Blade#1238248/18/04; 19:49:43

I didn't see the segment you're refering too, but it may be that the media is laying the groundwork to blame Al Qaeda for the inevitable dollar collapse so as to justify new wars.
Black BladeMarket Wrap Up - Hartman#1238258/18/04; 19:59:56



The Dow Industrials and Nasdaq opened the day in negative territory with higher oil prices and bad news from Google cutting their IPO price by 25%, but stocks turned around and moved higher right away as the bulls came charging in. Conversely, Treasury bonds began the day higher on concerns of high oil prices causing a slowdown in the economy as they put a damper on consumer spending. The dollar spent the morning with narrow gains, but also rolled-over and turned negative toward the middle of the afternoon. Overall the markets were mixed as traders struggled to find direction and a clear interpretation of just exactly what the near future holds in store with oil moving above $47 to yet another new high. It was virtually impossible to find any news in stocks, bonds, or currencies without hearing something about the record high prices for crude oil.

Traders waited anxiously this morning for the Energy Department and American Petroleum Institute to release their weekly data on inventories. The Energy Department reported a decline of crude inventory of 1.3 million barrels to 293 million while the API calculated the decline at 1.5 million barrels to 292.8 million. The API also reported gasoline stocks falling by 3.5 million barrels with distillates adding 1.6 million barrels. After the announcements crude popped higher to $47.40 then fell back below $47 and finally settled the September futures contract at $47.27. The big quandary for bond and stock investors alike is whether the record high oil prices are inflationary or deflationary. On one side it is argued that higher prices move through the system and increase costs across the board driving inflationary pressures, while the advocates of deflation insist that high energy prices remove discretionary consumer spending thereby forcing the economy to slow.

Black Blade: I still say it's gonna be "Stagflation". The Wall Streeters were saying that once the Iraq war started, oil would fall to $18-$22/bbl. Before that $10/bbl. Later it was $30/bbl - "tops". Now it sits over $47/bbl. Now many of them say it will fall in the next few days. I suppose we better get ready for $60/bbl oil soon. ;-)

Black BladeTwin Deficits at the Flashpoint? #1238268/18/04; 20:06:41


Stephen Roach (New York)

June's enormous US trade deficit should be a wake-up call to America and the rest of the world. It is a direct manifestation of a lopsided global economy that remains biased toward unprecedented external imbalances. As long as the US continues to live well beyond its means and as long as the rest of the world fails to live up to its means, this seemingly chronic condition will only get worse. The imperatives of global rebalancing are reaching a flashpoint.

America's record $55.8 billion trade deficit in June was a shocker. Annualized, it is equivalent to a $670 billion shortfall, or 5.75% of nominal GDP. Nor can this deterioration be explained away by surging oil prices. Excluding petroleum products, the trade deficit for goods still widened by $2.7 billion in June -- an enormous swing by any standards. The plain fact of the matter is that America has never come close to running such an outsize external deficit before.

Black Blade: As we talked about before. It is well out of hand and getting worse. Another good read by Stephen Roach.

DruidS Arabia wants oil price below $30#1238278/18/04; 21:51:19

KUWAIT CITY: OPEC kingpin Saudi Arabia has the capacity to meet all market requirements for oil and wants to see crude prices between 25 to 30 dollars a barrel, the kingdom's crown prince said in comments published Monday.

"I truly tell you that the kingdom does not want to harm the world economy ... We believe that prices should range between 25 and 30 dollars a barrel," Prince Abdullah bin Abdul Aziz told Kuwait's Al-Siyassa newspaper.

It was the second time in a week that the leading oil producer and exporter has moved to assure a nervous market where prices have soared to new highs.

Oil Minister Ali al-Nuaimi said Wednesday the kingdom was prepared to hike output by 1.3 million barrels per day (bpd) in a bid to cope with world demand and curb soaring prices.

Prince Abdullah, the kingdom's de facto ruler, said his country has the capacity to meet increasing demand, but blamed international oil majors for hiking oil prices.

"We have the (production) capacity to meet current requirements of the market," he said.

"At the same time, I want to assure you that we have no hand in the current increase in prices. Big companies dealing with the crude are responsible for the increase, through stockpiling and speculations," he said.

World crude prices spiralled to a new high of 46.91 dollars a barrel in Asian trading Monday as a nervous market ignored producers’ assurances that there was enough oil to meet demand. The International Energy Agency estimated on Wednesday that the Organisation of Petroleum Exporting Countries (OPEC), straining to increase production, is set to add 400,000 bpd of capacity this year and slightly more than 2.0 million bpd from 2005 to 2007.


Druid: With all the hot air being unleashed from many a Wall Street jester about where oil prices should be as opposed to where they are, low and behold, the Prince himself is weighing in to allay any fears and concerns about the impact of high oil prices on world economies.

I guess we'll just have to wait and see if the"market" can sort this one out. Or will POLITICAL WILL have its day in the sun over oil matters.

Dollar Bill.,.#1238288/18/04; 22:12:14

this from gold eagle Taylor "Excuse my French, but what a load of crap! The desire to shape public opinion against gold ownership because "even the Rothschilds and the French" are getting out of gold, was very transparent from this follow-up gold bashing article by the "Financial Times." First the announcement that the Rothschilds are "Getting Out of Gold." Then a follow-up article, spinning a pack of lies about how "gold isn't necessary these days" because the central banks are now able to manage their fiat money system without it.

My guess is that the Rothschilds are actually doing exactly the opposite of "getting out of gold." In fact as short sellers of gold they were always "out of gold." So in fact, what "getting out of gold" actually means is that they are "getting into gold"-not only as they unwind their short positions, but I suspect as they begin to buy more and more of the yellow metal so as to accumulate more and more power when, as James Sinclair opines below, gold rises not just to $480 but to $1,500"

otish mountainGold Warriors by Sterling Seagrave#1238298/18/04; 23:18:26

Caught part of an interview with the author of this book.
Did a quick search and found 2 urls.
"Black Eagle Trust" something for the barbaric relic file.
First I've heard of this.

NEMO me impune lacessitFor Your amusement#1238308/19/04; 03:33:24

Andy Smith was just on CNBC Europe.
His forecast: gold at $360 this time next year.

misetichOil Hits Record on China, India Demand#1238318/19/04; 05:13:24


LONDON (Reuters) - Oil prices struck a fresh record high above $47.50 a barrel on Thursday as fresh evidence of demand growth in China and India underlined how rising appetite for oil is straining the world's supply system.
Rising demand in emerging economies China and India have shaken up the oil market this year, intensifying competition for supply with established consuming giants such as the United States.

China's refineries have processed 17.2 percent more crude so far this year than in 2003, the county's State Statistical Bureau said on Thursday. Crude imports have soared nearly 40 percent from last year.

India's biggest refiner, State-run Indian Oil Corp. Ltd. (IOC.BO: Quote, Profile, Research) , said it expected India's crude oil imports to rise by 11 percent in 2004/05 as demand rises by nearly 4 percent.

In the United States, which guzzles around a quarter of the world oil, demand so far this year is up 3.4 percent, stopping inventories building much as rising consumption absorbs extra imports from OPEC producers such Saudi Arabia.
Rising demand has left little slack in the system to cope with any supply problems, such as those in Iraq where Shi'ite militia have said they will target oil infrastructure if U.S. forces do not leave the holy city of Najaf.
"The situation in Basra is still deemed too dangerous to operate the line, although headquarter employees returned to work today and events in Najaf are encouraging," a South Oil Company official on Thursday.
OPEC is pumping at its highest level since 1979 and has said it will raise production to 30.5 million barrels per day (bpd) next month.

The 2004 Oil Shock And Awe Continues- Its effects and collateral damage are being dismissed by "experts" and government officials worldwide

Yet - Real Price Inflation is roaring ahead - whether its masked as "Asset Inflation" and/or hidden by statistical manipulations - the cost of goods and services is going HIGHER and HIGHER by the minute

The main engine of the global economy - the US - has been growing on a SNAIL pace since 2001 with the exception of a few quarters in late 2003 - sustained by massive government stimuli, ranging from emergency rate IR's, (which has led to record high consumer indebtness and housing bubble) to tax cuts and currency devaluation, thus ending the "strong US $ policy"

Corporate earnings growth has been largely achieved at the expense of LABOR - with massive layoffs and off-shoring labor displacement and currency factors

Capacity utilization is still in "recession territory" even though some sectors, mainly materials has/is enjoing robust growth, and wherein input prices have/are SOARING, by 100 to 300%

US GDP is a statistal mirage of grandiose proportions since most of this GDP growth is being "imported" thus the so called $10-12 trillion economy is probably $6-7 trillions at best

The achilli of the global economy is LABOR OFF-SHORING, where millions of jobs have/ARE disappearing from the industrialized west, heading toward the Orient and Eastern Europe

Consumer spending in the US is being hit by a combination of factors:
- virtually non existent job creation
- wage increases have fallen behind real price inflation
- rising benefits cost have been/are being off loaded to employees

Consumer spending has been supported by growth in ASSET INFLATION and collateralize borrowing against it

The "gambit" of the "powers" is to REDUCE long-term IR ! since higher IR would pierce the housing bubble

In addition higher IR would increase US Budge Deficit considerably as its finacial carrying costs on its debt would SOAR potentially by hundreds of billions annually

Debt to the Penny

08/17/2004 $7,341,461,448,755.40

Its little wonder "foreign sources" and the Fed reserve have been buying the massive onslought of US Treasury bills to keep IR heading higher

Smoke and mirros didn't help Enron investors either

Prudent investors would be wise to ADD PHYSICAL GOLD to their portfolio at these ridiculous cheap prices

All Aboard The Gold Bull Express - Part ll

misetichInvestment in China's fixed assets rises sharply#1238328/19/04; 06:36:17


Investment in fixed assets, the main driver of Chinese growth, accelerated sharply in July as the impact of government measures to cool economic activity began to wear off.

Xinhua, the official news agency, said fixed asset investment from January to July rose by 31.1 per cent over the same period a year ago, significantly higher than the 28.7 per cent growth rate recorded for the first half. Figures for July alone were not published.

Statistics on investment, which last year contributed 47 per cent of China's gross domestic product, are the key barometer for future growth and an important indicator of the success or failure of Beijing's policy to cool a torrid economy.
Much of the investment in June appears to have been in the form of construction, both of property and factories, economists said. This is corroborated by a strong rebound in the price of construction steel, especially reinforced bars, in July from early June.

The Red Dragon hot economic growth continues, though macro-controls have "slowed" fixed asset growth in recent months


China's economic growth poses several threat to US aspired hemogeny worlwide - one of which is rising Real Price Inflation being impacted by the avoricious demand for energy and commodities

The Taiwan issue - and China's massive US $ reserves

The Taiwan issue is being "downplayed" in the US press but its front page news - DAILY - in official Chinese media -

China has been accusing the US of being ambiguos in its "one China policy" protesting vehemently sales of arms to Taiwan

The "Taiwan Issue" is the center piece for China, but to a much wider scope of "war" between the US and those that fear the aspired US global hemogeny

China has set a 'timetable' for the annexesion of Taiwan in one form or ANOTHER under mainland auspices.

US $ Foreign Reserves

China including Taiwan and HongKong have over $800 billions in US $ reserves far in excess of its needs

The US in contrast, has increased military spending, since 2001 to gigantic proportions - fuelling a spiralling budget deficit

...and there's is little indication that such military spending is being curtailed, even as its economy is decelerating

The issue of trade, Taiwan, US feared global hemogeny, US $ reserves is complex and intertwined

Months ago Treasury Snow was front and center appealing for the Yuan upward re-valuation - Its sudden silence speaks volumes

World currencies - including GOLD- are at center stage in this epic sea of change - how it will roll is anybody's guess

...yet as China's economic growth continues the odds favor a stronger and vibrant Orient that the industrialized west has to adjust to...


The impact on gold demand in the forseeable future from the emergence of China as an economic power is large. Though demand has not yet materialized the potential to do so exists since ony 10-15% of the Chinese population are benefitting from this initial boom

China is using recycled US $ to build its economic infrastrure and though its still in its "infancy and delicate stage" the prospects of a mere increased participation of ANOTHER 10% of its population would add 130 million consumers

Secondly, Japan, India, and SE Asia economies are benefitting from China's economic boom thus increasing the disposal income of its population which would increase gold demand

Central bankers in the region are already OVERLOADED with US $ reserves and will be hard pressed to continue adding to them as the reserve ratio's would be out of whack

Thirdly, price inflation, from China's demand of oil, energy and commodities is overflowing to the industrialized west

Fourthly, as hostilities over Taiwan intensify, the threat of China dumping US $ is real

The RISKS for the US $ are increasing as China's economy grows exponentially

All Aboard The Gold Bull Express - Part ll

misetichRising Cost of Health Benefits Cited as Factor in Slump of Jobs#1238338/19/04; 07:07:51


Government data, industry surveys and interviews with employers big and small indicate that many businesses remain reluctant to hire full-time employees because health insurance, which now costs the nation's employers an average of about $3,000 a year for each worker, has become one of the fastest-growing costs for companies. Health premiums are sapping corporate balance sheets even more than the rising cost of energy.

In the second quarter, the cost of health benefits rose at a 12-month rate of 8.1 percent - more than three times the inflation rate and the rate of increases in wages and salaries.
Mr. Hayes said his health insurance premiums had risen by 22 percent a year in the last four years. He now pays $4,150 a month in health insurance premiums for his 33 employees, and the workers contribute an equal amount from their own pockets
The growing portion of employee compensation used for health care ultimately depresses workers' ability to spend on other items.

The labor market is "soft" allowing employer's to operate lean and mean

Whilst at first glance the lean and mean machine improves earnings, the long run effects are counterproductive as there are fewer consumers to buy their products and services

Compicating matters, is rising real price inflation for both consumers and corporations, reinforcing a self-destructing trend and process

The achilli of the economy is lack of meaningful job creation and debasing tax and consumer spending base

The Feds hope that corporate spending would take over from their stimuli has not materialized to expectations as excess capacity still exists

The US IT market has reached its saturation point and is losing market share to Orient - An example is Dell pulling out of the low pricing PC market in China as it was unable to compete

All Aboard The Gold Bull Express - Part ll

BoilermakerNew "Equilibrium" Price of Oil (POO)#1238348/19/04; 07:29:16

Here's some thoughts on the POO in the coming months and years.

Crude oil has been available in surplus compared to demand since the 1870's (except for WWII and brief supply disruption periods). That's about 130 years, more than most of us can remember. The POO during that time has been a function of the disipline, restraint and regulation of the swing producers to maintain their production at volumes which do not flood the market. It's not surprising that most forecasters don't understand what's happening ie., that the oil market after 130 years has exhausted it's productive overhang. Now we are entering a period of rebalancing based on productive capacity limits.

Presently it seems that supply is relatively balanced with demand. I have not seen evidence of shortages such as gas lines or rationing. In fact, the only remaining swing producer, Saudi Arabia, keeps insisting it has and will unleash its production as needed. However, there is much skepticism to the effect that SA may not have this marginal capacity.

The question in my mind is; At what POO will the market become rebalanced for the case where there is no overhang capacity. To get some perspective on this I searched for the history of the POO back when it was in its infancy and supply limited. Here's what I found,

"The modern era of oil production began on August 27, 1859, when Edwin L. Drake drilled the first successful oil well 69 feet deep near Titusville in northwestern Pennsylvania. Just five years earlier, the invention of the kerosene lamp had ignited intense demand for oil. By drilling an oil well, Drake had hoped to meet the growing demand for oil for lighting and industrial lubrication.
Drake's success inspired hundreds of small companies to explore for oil. In 1860, world oil production reached 500,000 barrels; by the 1870s production soared to 20 million barrels annually. In 1879, the first oil well was drilled in California; and in 1887, in Texas. But as production boomed, prices fell and oil industry profits declined.
In 1882, John D. Rockefeller devised a solution to the problem of unbridled competition in the oil fields: the Standard Oil trust, which brought together forty of the nation's leading refiners. Through its control of refining, Standard Oil was temporarily able to control the price of oil."

Here's the price history for oil from 1870 to 1890:
Constant$ Price Index (1973=100)
Current $ Prices ($/bbl) Year

1870 480 3.86
1871 531 4.34
1872 469 3.64
1873 239 1.83
1874 154 1.17
1875 182 1.35
1876 356 2.56
1877 349 2.42
1878 185 1.19
1879 141 0.86
1880 140 0.95
1881 140 0.86
1882 115 0.78
1883 164 1.00
1884 133 0.84
1885 148 0.88
1886 121 0.71
1887 113 0.67
1888 108 0.88
1889 127 0.94
1890 130 0.87

You can see that the POO during its supply limited years was about 4 times higher than when production capacity exceeded demand. If we apply the same multiplier to today's POO and we use the past several years as the base for POO we should get between $60 to $100/bbl. This would be a price that would limit demand and stimulate/justify alternative fuels. The price of unleaded regular in this case would rise another $.50 to $1.30 per gallon from its current price. A depression in the US could moderate the demand for oil to keep the POO in the lower end of this range.

The POG, if it retains its historical relationship with oil should be headed for and exceed $1000/oz. This assumes that the $ will be a meaningful measure of value in coming years, an assumption that many of us here would seriously doubt. In the case of the POG we also need to recognize that the overhang of central bank gold will disappear sooner or later perhaps unleashing another multiplier effect on POG.

Cometose@Nemo re: Andy Smith#1238358/19/04; 08:26:27

I think Andy is two dentures shy of a full set of teeth.
Knallgoldoil#1238368/19/04; 09:09:35

I heard recently on TV the term "oil bubble".It sounded a bit funny to me....
misetichWill Russia, the Oil Superpower, Flex Its Muscles?#1238378/19/04; 09:27:17


"Russia's international standing would be destroyed," said Christopher Weafer, chief strategist at Alfa Bank here. "The Kremlin wouldn't jeopardize its position in the global economy by what would be nothing short of an act of global economic terrorism."
In some ways, the Kremlin itself may have been surprised by the effect of its Yukos prosecution on the global oil market. "Russia has become a decisive force in the world oil market in a way it hasn't been since the beginning of the 1960's, when its exports stimulated the birth of OPEC," said Daniel Yergin, chairman of Cambridge Energy Research Associates, based in Cambridge, Mass.

Mr. Yergin added, however, that the Kremlin's tussle with Yukos "at another time wouldn't have had the same effect." This, he explained, is in part because "the world oil market is even tighter than in the 1973 oil crisis."
Now the second-largest oil producer behind Saudi Arabia, Russia has positioned itself as an important alternative supplier to the increasingly unstable Middle East.

For those that believe that Russia would derail high oil prices the goodfellows would say

Forgeddit about it !

Putin's ambitions to re-establish Russia's dominance on the world scene must not be underestimated - as he has proven to be an extra-ordinary powerful leader

Vladmir has China and Japan bidding each other
-He has visions of forming an "economic union" with former states of the old Soviet Union
-He has formented military ties with India and China
-detests Nato being at his borders
-has implemented strategy of Russia becoming an economic power rather than military power

In whichever natural resources Russia has/is involved PRICES GO UP !

All Aboard The Gold Bull Express - Part ll

misetichGlobal: Oil-Shock Assessment - S. Roach#1238388/19/04; 10:06:03


With oil prices now in the high $40s (WTI basis), there is good reason to treat this development as yet another in a long string of energy shocks. The impact of such disruptions depends very much on context -- namely, the vulnerability, or lack thereof, in the underlying economy. When a weak economy is hit by any type of a shock, recession normally results. Conversely, a strong economy is better insulated to withstand such a blow. Most of the oil shocks of the past fall into the former category -- hitting economies when they are vulnerable. Unfortunately, the Oil Shock of 2004 fits that script to a tee.

Is this truly an oil shock? History gives us some guidance in making that determination. Prior to the current episode, there have been three major oil shocks in the last 30 years -- all stemming from geopolitical disturbances in the Middle East. Following the Arab-Israeli Yom Kippur War of October 1973 and the subsequent oil embargo imposed on the West, OPEC I led to a quadrupling of oil prices. In the aftermath of the Iranian Revolution in 1979, the Iranian-US hostage crisis, and the Iraq-Iran War of 1980, OPEC II led to a near tripling of oil prices. Then there was the Iraqi invasion of Kuwait in 1990 that triggered a brief spike in oil prices to $40 that represented a doubling from quotes prevailing before this outbreak of hostilities. And now it's the US-Iraqi war.
At the current level of around $47, oil prices are 62% above the $29 average that has prevailed since early 2000. That takes the "real" oil price (i.e., WTI quotes deflated by the headline CPI) back to levels last seen in the late 1980s; in fact, other than the brief spike in late 1990, the current increase represents the sharpest run-up in the real oil price since the late 1970s. I have maintained for some time that the "true" shock probably comes with $50 oil (see my May 10 dispatch, "Global Wildcards"). That would represent in excess of a 70% surge above the post-2000 average -- enough of a spike, in my view, to put it in the ballpark with full-blown oil shocks of the past. At $47, world oil markets are now too close for comfort to that critical price point. Duration obviously matters -- the price has to stick at these levels for 3-6 months to qualify as a legitimate shock. But the first condition has now been satisfied: The oil price is firmly in the danger zone.

Do oil shocks hurt? The track record of oil shocks is close to perfect. In the case of the United States, each of the previous three oil shocks was followed by recession. OPEC I led to the deep recession of 1973-75. OPEC II was followed by a brief recession in 1980 and eventually set the stage for a severe recession in 1981-82. And the Gulf War Shock was followed by a mild recession in 1990-91. These cyclical contractions all had one thing in common: The US economy was already vulnerable when it was hit by a shock. In the final three quarters of 1973, just before OPEC I, real GDP growth had slowed to a 2.2% average annual rate. In the first half of 1979, just before OPEC II, average annualized growth slowed to just a 0.6% pace. And in the three quarters prior to Iraq's invasion of Kuwait, real GDP growth slowed to a 2.2% clip. In all cases the US economy was at or near its "stall speed" when the oil shock occurred.
There's one other key element of the conservation story. For every developed country that is reducing the energy content of its GDP, there is rapid growth in the energy-guzzling Chinas and Indias of the developing world. According to the International Energy Agency, in 2002, China's oil intensity -- primary oil consumption per unit of GDP -- was 2.3 times that of the average OECD developed country; India is even worse -- fully 2.9 times the OECD average. Little wonder that China, which makes up slightly less than 4% of world GDP, accounted for fully 7% of the world's crude oil consumption in 2003. In that same vein, the emerging China slowdown would seem to provide some relief to world oil demand. However, given the nation's widespread energy shortages, in conjunction with its recent indications to start building a strategic petroleum reserve, any cyclical curtailment in Chinese oil demand might be surprisingly limited. It may well be that globalization is an inherently energy-intensive endeavor -- suggesting that world oil markets might enjoy little relief from ongoing conservation efforts in the developed world.

All in all, it now appears that the world is being subjected to its fourth oil shock in 30 years

The 2004 Oil Shock And Awe has just barely got underway - It is doubtufl oil prices will comeback into the low $30's anytime soon

Collateral damage, beside the obvious transportation, manufacturing plants is being inflicted not only on consumer spending but corporate earnings, and the labor market

Germany tax inflows for example have declined over 15% comparatively to the previous year

It is the LABOR MARKET which is the biggest casualty of the The 2004 Oil Shock And Awe

Oil prices are being affected by many reasons, from supply and demand to the perceived war between OPEC and Russia vs those that wish OPEC would bust, through the use of Iraqi Oil

Iraq Oil was expected to have resolved the then deemed high prices ($22-28 ) at $35 and up - its good bye Irene

Iraq is left -right - and center at the heart of The 2004 Oil Shock And Awe as is the Palestine issue

...and its doubtful an amicable resolution will be found - The RISKS are slanted toward further oil disruption as each attacks the other weakness

The Oil/Gold Ratio is totally out of whack - at 16 times Gold prices ought to be $768 at minimum

All Aboard The Gold Bull Express - Part ll

silverton3Last post now obsolete#1238398/19/04; 10:36:31

Oil price now $48, not $47
USAGOLD / Centennial Precious Metals, Inc.When in the Course of Human Events it becomes Necessary to Protect your Savings from a Dissolving Currency...#1238408/19/04; 11:00:41">Arm yourself with knowledge
TownCrierFederal Reserve today injected $20.25 billion in fresh cash#1238418/19/04; 11:12:33

With the market in fed funds trading in line with the FOMC policy target of 1.5 percent, the Fed's trading desk none the less saw fit to intervene in the open market with two rounds of repurchase agreements; thus adding $11 billion new money to the reserves of the nation's banking sytem through 14-day repos, and $9.25 billion through overnight RPs, all provided at an average rate near 1.47 percent.

Call it "easy money" because that is what it is.


TownCrierEarly COMEX gold clears $410 on weak dlr, firm oil; Argentina purchase#1238428/19/04; 11:20:17

NEW YORK, Aug 19 (Reuters) - COMEX gold extended its rally early Thursday, clearing $410 an ounce, as a faltering dollar and runaway oil prices made the shiny hard asset an easy choice for investors.

"It's all technical, of course, and fund buying. It's the same thing we've seen the last few days," said a bullion trader. "If we get above $410 it looks really healthy."

"Oil and the dollar are still supporting it," said the trader.

Dealers said sentiment was helped by news from the World Gold Council that Argentina purchased 42 tonnes of gold in the first half of 2004, making it one of a small handful of known official buyers of the monetary reserve metal.

"It just affects the mind-set a little bit, which is positive for gold," said Paul McLeod, a precious metals vice president at Commerzbank Securities. "It's not just viewed as a divestment event for central banks. I think that is more important than the actual size of the purchase."

"It's a positive development. However, the market is still dominated by funds at the moment."

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

The gong-show gong surely goes to the following excerpt from the article:

"If the central banks are willing to push harder to get income reflation, then the environment will be gold bullish," wrote Greg Weldon, publisher of Metals Monitor. "Thus, we are reversing our stance in the precious metals and tip-toeing toward a bullish position."

Tip-toeing toward a bullish position? Where on earth have they been during the past three years as gold began its climb from $250?

They need to spend more time reading at the USAGOLD Forum and less time tip-toeing.


USAGOLD / Centennial Precious Metals, Inc.Among our most beautiful coins. Over half have sold out during the first day. Lock-in your order today, have no regrets.#1238438/19/04; 11:20:59

Hamburg Gold

 August Buyers' Group

The Hamburg Germany 20 Mark


This exceptional coin speaks for itself.
If you don't believe lions can fly,
you should see these kitties leaving our vault.

We've tossed in some volume incentives...
just because we like you so darn much.

TownCrierGold climbing in dollars AND in euros#1238448/19/04; 11:23:50

See url for price charts.


geBBC News Online visits the Federal Reserve Bank of New York #1238458/19/04; 11:45:24

..."Most of the subterranean gold here belongs to foreign governments, although the Fed's employees are not at liberty to say exactly which"..."Foreign governments are not charged by the Fed for storing their precious reserves, but fees are incurred for withdrawals, or for moving bars to another compartment within the vault."...."There has not been a single transaction so far this year."..."There's been no discussion of which I am aware to move gold reserves, and countries have not moved their reserves," Mr Bakstansky said."..."We have roughly the same amount now as we did three years ago and if countries felt this was an insecure facility, they would have moved their gold out and put it somewhere else where they felt safer."

Interesting timing by BBC, for this news release.

misetichSaboteurs Set Fire to Iraqi South Oil Co. Basra HQ#1238468/19/04; 14:16:14;jsessionid=D3QXLSYDR3BYQCRBAE0CFFA?type=topNews&storyID=6022258


BASRA, Iraq (Reuters) - Saboteurs set the headquarters of Iraq's South Oil Company in the city of Basra on fire Thursday, officials and witnesses said.

"It was not an accident. The fire is huge," said an official of the state-owned company, who declined to be identified.

A Shi'ite militia led by anti-U.S. cleric Moqtada al-Sadr had threatened to attack oil infrastructure in southern Iraq if U.S.-led forces continued assaults on the holy city of Najaf.

The south accounts for all of Iraq's oil exports as sabotage has kept a northern pipeline through Turkey mostly shut since the U.S.-led invasion.

Exports through two southern terminals have been almost halved to around 1 million barrels per day since a main pipeline in the region was attacked Aug. 9 and flows were restricted to a smaller pipeline.

ANOTHER headline reads:

Iraq Makes 'Final Call' to Defiant Sadr on Najaf

(guess the "powerful Iraqi army is making the threat")

Snip from the Reuters article

Asked about government demands, Sheikh Ahmed al-Sheibani, a senior Sadr aide and Mehdi Army commander, told reporters earlier in Najaf, "It is very clear that we reject them."

End of snip

It is interesting Al Sistani left Iraq for "health reasons" and he nor his office has commented on siege of Najaf under the veiled "Iraqi government" from US led coaltions of the few willing

This is a non-political observation on the ongoings in Iraq which affect the oil market and which has the potential to escalate further as both sides are unwilling and/or unable to negotiate a fair settlement suitable to both sides

It'll get much worse....

All Aboard The Gold Bull Express - Part ll

TownCrierHEADLINE: Bullish World Gold Council report#1238478/19/04; 14:53:11

19-AUG-04 Mineweb 1997-2004

JOHANNESBURG ( -- Demand for gold, in the form of jewellery and private investment, jumped 10.5 percent in the quarter to end-June in comparison to the extraordinary, SARS affected quarter last year.

More impressive is that the 743 tons purchased is 4.14 percent higher than the same period in 2002, even with a gold price averaging $50/oz higher than that period.

"The rise in demand was fuelled by strong economic growth, relative absence of price volatility and continuing concerns over the long-term economic and political outlook," said a statement in the World Gold Council's (WGC's) quarterly report.

Gold traders do not seem to take much notice of the quarterly release, but analysts do seem to pay a bit more attention. "It is a very bullish report," says James Steel, an analyst at Refco. "The quarter was as strong as the first despite the price being up."

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

Round out your portfolio before the seasonal buying spree begins in earnest. No one can predict how the union of the physical market under derivative-pricing will respond at each turn to the ever-growing demand pressures for the actual metal.


USAGOLD Daily Market ReportPage Update!#1238488/19/04; 15:05:43">
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.

-----closing market excerpts----

Gold futures on the Comex division of the New York Mercantile Exchange remained on the offensive Thursday and pushed to fresh one-month highs thanks to the persistent weakness in the U.S. dollar and continued strength in oil prices. futures hit a one-month peak on Thursday, as a faltering dollar and runaway oil prices made gold an easy choice for investors, but ended off their highs above $410 an ounce, dealers said. "It's all technical, of course, and fund buying. It's the same thing we've seen the last few days," said a bullion trader.

December gold rose $2.70 to finish at $409.30, after trading between $410.40, its highest since July 19, and a low of $406.40 that was touched overnight.

Crude oil prices, meanwhile, scaled fresh historical highs of $48.55 a barrel on more supply worries to keep players concerned about the possible threat of high energy prices to global economic stability.

This combination of a weak dollar and surging oil prices heightened gold's allure as a safe haven and sustained fund interest throughout the session.

Gold, seen as an alternative to the dollar, tracked the overnight rise in the euro. Oil's rise to $48 a barrel called into question the future purchasing power of the greenback, while increasing demand for hard assets.

Dealers said sentiment was helped by news from the World Gold Council that Argentina purchased 42 tonnes of gold in the first half of 2004, making it one of a small handful of known official buyers of the monetary reserve metal.

"It just affects the mind-set a little bit, which is positive for gold," said Paul McLeod, a precious metals vice president at Commerzbank Securities....

-----(see url for access to full news, 24-hr newswire)-----

Current headlines:

U.S. Economy Recovery slows, leading indicators drop-- CBC Canada

Economic indicators slip for second straight month-- Columbia Daily Tribune, Missoure - Business

Underground economy finds fans-- Adam Smith Institute

Oil worries hit Euro stocks-- - Markets

FOREX-Dollar weakens as Iraq, oil weigh on sentiment -- Borsa Italiana - News

Argentine economy grows 7.4 pct in June yr-yr -- Borsa Italiana - News

Gold demand jumps in Q2-- The Daily Star, Bangladesh - Business

COMEX gold ends at 1-mo high on weak dlr, high oil-- - Breaking News

Bullish World Gold Council report--

(see url for 'round-the-clock updates)

SovereignAnglo-saxons are in denial about who they are and what they are doing to themselves#1238498/19/04; 15:11:57

Here are the truths that even presumably gold-respecting "Anglo-saxons" are in denial about.

Truth #1

1. The "Anglo-saxon" ruling classes own and control the Fed which is not subject to independent audit. The Fed can print as many dollars as they wish with impunity and buy whatever they want.

2.Even according to falsified but official US government numbers, millions more Americans are unemployed today as compared to a few years ago. It follows that millions of 401(K)s and other investment portfolions are not growing due to loss of income that presumably could have been invested through them. Americans who have lost their jobs and the institutions that depend on a regular flow of funds from their salaries in order to invest in the American stock market are no longer able to do so.

3. The stock market is not cheaper than before, so at best, it should have stayed the same even in the best case scenario (where no one who lost his job liquidated his stock portfolio). Yet the US stock market is several thousand points higher than it was in 2002.

Those who bought (and who are still buying) the American stock market are not investors who are looking for value to invest the funds that they don't have. (It is not reasonable to claim that every home owner in America used all the equity in his house to prop up the market upwards of 2000 points from about 7500 to 10500+.) In light of the fact that there is no value to start with, in US markets; we must conclude that only people who have a vested interest in nominally higher US stock markets (people who are not interested in value per se) and who have the wherewithall to buy the markets even if there were no fundamental or even speculative reasons to do so (as is the case today), are buying US stocks. And who can these people be except the ones mentioned in premise #1, the Anglo-saxon ruling classes that control the Fed. The American stock market is a lie, as is your dollar.


SovereignWhy do you think the Fed allowed the US markets to fall in 2002?#1238508/19/04; 15:30:40

Truth #2

The answer is because it was panicked Arabs and Europeans who were selling their US shares, not the Americans themselves. (Not one American I've spoken with has sold a single share in the past 4 years, unless it was to speculate in other shares.) Because non US-citizens were dumping their stocks for cash dollars, the Anglo-saxons decided to allow them have as few of the latter as possible, in the process, making foreigners understand that if the US goes down so will they. This was the main reason why the dollar was allowed to slide by the US government, as a warning against further mischief on the part of unruly foreigners.


Why is the stock market 2000 points HIGHER than it was then? even though oil is breaking new records almost everyday and combined public and private US debt are at their highest levels in history? Because now only Joe Sixpack Americans, the Fed and captive foreing central banks own them.


Federal_ReservesSoverign> Good point up to a point.#1238518/19/04; 15:39:42

About 10% of the SM is owned by foreigners. Not true of the bond market though, were 40-50% is owned by foreigners and a vast quantity is owned by communist china.

Joe Six Pack is not really a player in the SM IMHO. About 90% of the value of the stock market is in the hands of 10% of the people, and those people are rich. In order for the stock market to crash, you need to facilitate a bone chilling fear in the rich people in the country. A fear that causes them to sell out and any price.

SovereignMr. Federal_Reserves, Truth #3#1238528/19/04; 15:57:14

The rich and powerful Americans don't care about the level of the Dow Jones. They own the Fed, and the Fed CAN at will make the Dow Jones go to 36,000 or 36 millions, for that matter.

What they DO care about is the ILLUSION that the dollar and the stock market are valuable so that 1)Joe Sixpack will sell his soul and his a-s (preferably to the US ruling classes) to earn the former 2)and delude himself by thinking that his destiny and that of the ruling classes that the stock market represents are inextricably linked, so that Joe Sixpack will be under the impression that the elite's interests are same as his interests.

I would not wish to be in your (American) shoes knowing how your ruling classes disdain Joe Sixpack in reality. It bodes ill for the poor sod's future.


mikalMore gold demanded from less gold supplies#1238538/19/04; 16:03:05

Gold rises to Four-Month High as Dollar Nears Lowest in Four Weeks - August 19, 2004 Asia

mikalBubble bath or slow washout?#1238548/19/04; 16:17:30

Realisic Rewards
The return on equities over the next decade is likely to be much lower than most investors expect
From The Economist Print Edition
August 19, 2004

TopazGold Bonds etc.#1238558/19/04; 18:17:43

Gold (PoG) is stronger again in here but imo, the scary bit lies directly ahead!
The inability of Bond Yields to drive below 5%(long) coupled with the rampaging PoO would suggest a Dollar/Bond reversal is imminent.
We watch.

Topaz...then again!#1238568/19/04; 18:35:56

As can be seen in the accompanying Chart, a PoG spike against the currency trend is due ... Sept03 and Mar04 .. both retreating to the currency line .. maybe THIS time may be different.
slingshotSir Sovereign#1238578/19/04; 18:39:11

The American people will learn the truth the hard way. The stock market is not a savings account and their home is not a bank.IMO we are a people exploited by commercialism. A throw away society with little understanding of value or wealth. Materialism is the way of life. Bigger, better and more bells and whistles for everything, even if we spend beyoud our means. We have taken these "isms" to the extreme.
Now the "tions" will enter. Inflation, deflation'stagnation,etc. A new paradigm which contains sobering lessons. In the end they will learn to purchase what they "need" and not what they "want", the value of the dollar (2cents). They will come to realise "Wealth" in two forms. One being precious metals and the other more than ever, "Family".

Chris PowellArgentina's big central bank gold PURCHASE revealed#1238588/19/04; 19:40:20

More central bank PURCHASES said possible.

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.

Chris PowellCanada's ROB-TV talks about manipulation ...#1238598/19/04; 19:41:33

... of the gold and silver markets.

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.

SmeagolPoG influence?#1238608/19/04; 20:15:16

Ssnip from Ssir Chris Powell's linked article in his Posst below-

"Gold prices hit a four-month high yesterday after it
emerged that Argentina bought 42 tonnes of bullion
in the first half of the year in an effort to repair
its shattered economy."

How much would a purchase of this size affect the PoG? Could this and other purchases not revealed be part of the rising dollar-fiat price (besides the devaluing of that ssame dollar-fiat)?


Dollar Bill.,.#1238618/19/04; 20:18:11

Is it ok to post a crackpot idea?
The fed inner sanctom, or whatever small club it is that makes some big key decisions......greenspan, and key industry or financial leaders and perhaps a couple fed governors, A top treasury guy.........whomever, decided to let oil run up to slow up the global economy.
To soak up a lot of money out of the global economy.
Now that the US has basically won the last real battle of being the reserve of the global economy, the guys manageing the thing at the core, decide to put on some brakes.
Countries all over the world are opening up the loan faucet,
putting eveyone into a slowdown will help the guys at the core with thier real task..........control.

The saudis are seemingly sincere when the say they are trying to keep oil at a level that is good for the world economy.
However, the key control guys, having gotten the ducks in a row, can do a turn that they intend, while the ducks, like the saudis, dont know why the turn is being made, and claim they are baffled and not to blame.

Just like the exodus of jobs is a US decision to sacrifice to get the global economy design accepted by the "ducks",
the managers at the core will make decisions that may make no sense in any way except, if we can see the factors thay are trying to manage, and can guess the reasons why they make some of the decisions.

Sure there are sensible supply and demand arguements, but the suadis and also a link I found off morgan stanley both think this price rise is managed.

CytekWallstreet is Google about Google#1238628/19/04; 20:46:05

Meanwhile, Gold continues to the upside and the PM's are just started to catch up on their oversold positions. Today the dollar dropped, the market dropped and OIL surged. But the ANALists on CNBC keep telling us that OIL is going down to $25 a barrel and the hedge funds continue to short the oil and services sector.
So the google IPO rasise 1.67 BILLION. Unbelievable.... A search engine. Don't people remember the DOT com days of three years ago? I guess not. What next, make Google a DOW component.

I think i'll have a glass of Google and go to bed.


otish mountainDollar Bill#1238638/19/04; 23:55:49

The world at large is in a state of denial. The reality that we live in a closed system with finite resources has not sunk in.

Sure the price of oil may drop down to $30 again and the state run media can convince the masses that everything is hunky dory.

So lets move to 2008 when its confirmed and generally accepted that we have PAST peak oil production. What will the price be then?

It's Mother Nature that's calling the shots here.

Time is running out to get our ducks in a row.

WaveriderSpot...#1238648/20/04; 07:50:04

Good Morning USAGOLD! Sir Gandalf - what did you feed the hounds for breakfast? Spot 'n Spike are FRISKY this morning!
ZhishengGold breaks with the dollar.#1238658/20/04; 08:08:30

Yes, good morning. And a special good morning to Lady Waverider and Sir Gandalf!

The dollar up and gold up too. Something is surely trembling beneath the surface.

misetichU.S. Should Tap Strategic Petroleum Reserve at $50, Yamani Says #1238668/20/04; 08:48:32


Aug. 20 (Bloomberg) -- The U.S. should use its Strategic Petroleum Reserve if oil prices rally to $50 a barrel, a situation that would constitute an ``emergency,'' former Saudi Arabian Oil Minister Sheikh Zaki Yamani said.

Asked in a telephone interview from Sardinia, Italy, whether the U.S. should use the stockpiles, Yamani said, ``They have to, unless they are not unhappy with present prices. If they have a long-term policy of reducing dependency on Middle East oil, high prices are a way to do it.''

Oil prices have jumped 50 percent this year on concern about disruptions to supplies and a lack of spare production capacity amid record demand growth. The have climbed to records every day except one since July and reached $48.98 a barrel on the New York Mercantile Exchange in after-hours electronic trading today.

The U.S. held 666 million barrels of oil in underground caverns in Texas and Louisiana as of Aug. 13. President George W. Bush, who has said the stockpiles should only be used in the event of an energy emergency, plans to fill the deposits to their capacity of 700 million barrels.

- 666 - uuhmmm

US elections are a few months away and Homeland Security has warned of possible terrorist strikes to disrupt the process - thus its doubtful strategic reserves will be used

FWIW - Mike Bolser maintains strategic oil reserves are non-existent as they've been sold in the futures market

The 2004 Oil Shock And Awe is gathering momentum - Any pull back is a BUYING opportunity as oil prices are destined to go much higher as the "unnatural" states of current events unfolds

Oil vs Property bubble

Consumer spending has been resilient in recent years, gathering strength from Asset Inflation - resulting in heavier consumer indebtness

Most expert economists are waiting for $50+ for a sustainable period of time for an oil shock - NONSENSE !

Industrialized western economies are in a FRAGILE state - little wonder emergency IR are still in effect

Il Maestro is at center stage entertaining the circus watchers, attempting to juggle the various daggers - the SM, the Housing Market, Bond Market - the Gold Market - Derivatives market

Unbeknown to Il Maestro and other circus entertainers, unexpectedly, they are beginning to realize the floor they have wallpapered with fiat, is being flooded by an "oil spill"

Who yelled fire?

All Aboard The Gold Bull Express - Part ll

Gandalf the WhiteYES INDEED ! It is a GOOD MORNING.#1238678/20/04; 10:04:57

Hello Lady Waverider and Sir Zhisheng !!!

As Sir Z said, "Something is surely trembling beneath the surface."

AND Lady W, the Gold SPOT chart is LOOKING GOOD AGAIN -- nice RAMP to a higher level ! (see LINK)

ALSO, Thanks Sir Misetich for the LAUGH posting from Yamani!
misetich (8/20/04; 08:48:32MT - msg#: 123866)
U.S. Should Tap Strategic Petroleum Reserve at $50, Yamani Says.

Gold is at the $49. level as I "speak" and which direction do you think that it will be going for the future ? LIKE, lots more of it is going to be available without any effort ? IF the Strategic Petro Reserve is tapped -- it may never be filled again without the FED inventing the MILLION US$ note !

Gandalf the WhiteOOPS -- "OIL" not Gold at the $49. level !!!#1238688/20/04; 10:07:42

WIZ --- Stop thinking about Oil and concentrate on GATHERING the GOLD while the gathering is GOOD.
Like Sir Ari says: GET you some GOLD !

KnallgoldDon't cry for me Argentina...#1238698/20/04; 11:04:21

Argentina has announced its buy after the fact-the prudent way to do.Andy and his gang must feel unease a bit now,"now,is there anyone else in the market we don't know yet?".

Imagine this starts a bandwagon of CB's announcing Gold buys.Specifically,CB's with an underweight of the Yellow in their portfolio,and,obviously taking the other side of (particularly european) Goldsales.Transparent and physical only as required by Freegold.You know what this could do to the Goldprice.

If Rothschild knows one or two things about Freegold coming as Ari suggested,they certainly would not only close the old derivative Gold trading facilities.No,they would prepare their house for the new physical Goldmarket requirements.Once you are finished with your preparations, you can shut down the old platform-I guess they won't be off in their timing!.Now what are YOU waiting for?

USAGOLD / Centennial Precious Metals, Inc.Pride of ownership, right here!#1238708/20/04; 11:25:58

Hamburg Gold

 August Buyers' Group

The Hamburg Germany 20 Mark


This exceptional coin speaks for itself.
If you don't believe lions can fly,
you should see these kitties leaving our vault.

We've tossed in some volume incentives...
just because we like you so darn much.

slingshotGandalf the White Gold $49 level#1238718/20/04; 11:28:12

One heck of a bounce! You were right. Gold did go up.
USAGOLD must have been really busy. At least for a few minutes.

TownCrierSnow talks up dollar#1238728/20/04; 11:36:03

US's Snow-dollar to remain top reserve currency
Friday August 20, 1:03 pm ET

DES MOINES, Iowa, Aug 20 (Reuters) - ...the dollar will remain the world's preferred reserve currency, Treasury Secretary John Snow said on Friday.

"Other countries buy our debt because America has the deepest, most liquid debt markets in the world, the best capital markets in the world," he said in a local radio interview. "They do it, frankly, not because they love us but because they get a good return on it."

Asked about the likelihood the euro would displace the dollar as the world's preferred reserve currency, Snow said "I have no great concern about that."

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

A good return? The euro has appreciated from .82 to 1.25 and all the while has borne a higher interest rate. SecTreas Snow's comments today are very shallow indeed.

This sort of dollar questioning and dialog would have been completely unthinkable and unheard of just ten short years ago. The very fact that these notions are being bandied about in public is your best sign that the situation is under SERIOUS threat of change.

Choose gold as your personal reserve asset and leave the worrying to others.

USAGOLD~Centennial has the expertise and friendly staff to get this job done right for you. Call today.

1-800-869-5115 extention 100


TownCrierReuters says...#1238738/20/04; 12:09:47

NEW YORK, Aug 20 (Reuters) - ...Gold extended gains from Thursday's rally, topping the $410 resistance level after the open, amid growing concerns over recent sluggish U.S. economic growth and the risk of inflation from record oil prices.

Traders said gold also has loosened its correlation to the euro in recent days as dealers increasingly focused on oil and less on the dollar's fortunes.

"The dollar is strong, but gold is basically following the oil. But it is in light volume," said Frank Aburto at F.C. Stone. "We could still test the $50 level in crude."

NYMEX light crude oil set a record $49.33 a barrel, up 63 cents, driven by escalating violence in Iraq and unabated fuel demand growth from China and India...

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

Put a firm foundation under your portfolio. Buy gold. Rest easy.


TownCrierHEADLINE: Asian 'tigers' may nip U.S. dollar bulls#1238748/20/04; 14:08:20

NEW YORK, Aug 20 (Reuters) - Asia's export-driven "tiger" economies have benefited from cheap national currencies and abundant U.S. consumer demand, but some investors are preparing for the dollar to depreciate against its Asian rivals.

...Asian central banks have kept their currencies artificially cheap, thereby pushing down export prices, by buying U.S.dollar-denominated debt in huge amounts. Overseas central banks hold about $1.27 trillion in U.S. government and agency debt, most of which is believed to be parked in Asian banks.

The results of Asian central bank purchases and the perception that the banks would continue to intervene have propped up the dollar in recent years.

With the U.S. trade gap at a record $55.8 billion, including a $14.2 billion deficit with China, some analysts reckon the dollar must correct itself and fall.

...In general, rising rates are a by-product of strong U.S. economic growth, which generates demand for cheap exports.

If the Fed hikes too quickly, it risks choking demand, which could be perilous in a slowing economy. But if investors seeking high returns on investment see it as being too slow, foreign demand for dollar-denominated debt could wane.

"This dynamic could unwind very quickly," said PIMCO's Douglas Hodge.

------(from article at url)----

Wherever you are, choose gold. It's universal.


TownCrierGold graphs#1238758/20/04; 14:24:48

Gold rising in dollar-price AND euro-price. Look at the 1-month chart for each.

Gold up $24 from it's monthly lows; up €14 through the euro lens.

Universal Savings Asset => GOLD.


"This was not a boat accident."



USAGOLD / Centennial Precious Metals, Inc.Hard assets, easy access!#1238768/20/04; 14:26:58">gold -- a global calling card
USAGOLD Daily Market ReportPage Update!#12387708/20/04; 15:09:38">
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.

---closing market excerpts---

Gold futures on the Comex division of the New York Mercantile Exchange surged over $6 to four-month highs of $416.80 per ounce Friday on heavy speculative buying spurred by the continued climb in oil prices and associated concerns about global economic stability.

The most-active Dec contract settled $6.20 higher at $415.50 per ounce.

The charge higher in oil prices toward the psychologically significant $50-a-barrel level on the threat of supply disruptions from violence in Iraq kept hedge funds focused on the possible broader impact of sustained historically high energy prices.

This heightened gold's allure as a safe haven and spurred high-volume buying through the morning amid a scarce seller environment.

Estimated volumes on the day were 100,000 futures contracts or 10 million ounces. (paper ounces, that is)...

"Suddenly everyone is talking about a gold/oil correlation and saying gold has to rally because oil is up," Leonard Kaplan of Prospector Asset Management said, noting investors were shifting into the hard asset in a bid to minimize inflation risk.

"But to see gold higher with the euro down sharply is most confusing," Kaplan said.

[Randy's note: I don't see any basis for confusion. If it isn't confusing that oil or any single currency can be higher against all other currencies, then why can't the same be true for gold? All things considered, the most natural expectation is, in fact, to see gold rise against all currencies.]

Gold has loosened its correlation to the euro in recent days as dealers increasingly focused more on oil and less on the dollar's fortunes.

NYMEX light crude oil set a record at $49.40 a barrel Friday, driven by escalating violence in Iraq and unabated fuel demand growth from China and India. The push to new peaks came as U.S. warplanes pounded rebel Iraqi militia in Najaf at the heart of a two-week-old Shi'ite uprising, killing at least 77 in 24 hours...

-----(see url for access to full news, 24-hr newswire)-----

TownCrierContinuing Wednesday's thread of thought, will inflation drive India to buy even MORE gold?#12387808/20/04; 15:25:22

NEW DELHI, AUG. 20. The rate of inflation continued its upward spiral for the third consecutive week to touch about eight per cent for the week ended August 7. The exact rate for that week was 7.96 per cent, significantly higher than the 3.89 per cent recorded in the corresponding period last year.
TownCrierINDIA: Gold sales up#12387908/20/04; 15:29:28

MumbaiAugust 21, 2004 -- Demand for gold in India in the first half of 2004 (calendar year) was 20 per cent higher in rupee terms and 10 per cent higher in tonnage terms than in the corresponding period last year, according to the World Gold Council (WGC).

Sanjeev Agarwal, managing director Indian sub-continent of WGC, said, "The demand for gold for investment continues to surge internationally because of some of the fundamental characteristics of gold such as inflation hedge and a hedge against a weakening US dollar. We have seen similar trends in India also, with investment demand for gold increasing by 35 per cent in value terms, in first half of 2004 as compared with the first half of 2003."

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

Beat the upcoming seasonal gold-buying rush and pricing pressures by calling your favorite gold agent (MK, George, Jonathan, Greg, or Marie) at USAGOLD~Centennial today!


Antipodean BugArgentina CB gold purchases#12388008/20/04; 16:09:40

The news of Argentina CB gold purchases makes me think there is really only one CB in the world that does not want to see the price of gold surge. And that is the one whose
currency is irrevocably tied to the price of the metal.
A strong rise in the price of gold simply tells the world that the US economy/reserve currency is out of control which most informed readers with an understanding of US
indebtedeness already know.
So imagine you are an Asian economy with heavy dependence
on the US for exporting your goods. You see the inherent weakness in the dollar and you don't want to disadvantage your own manufacturing sector, so you embark on the old
'competitive devaluation' strategy - and inflate your own money supply to suppress any upward strength in your
currency. BUT, you don't want to ultimately be dragged into the same mire that the US is headed so you might also decide to buy significant amounts of gold to shore up the long term underlying confidence in your economy (like Argentina). Afterall you don't care what happens to the nominal price of gold - your interest is only in preserving an exchange rate to the dollar that remains trade friendly for your own country.
So we might see more CB's breaking ranks with the US
'command' and embarking on a gold buying spree instead of
the much threatened selling spree.

Smeagol"409" reloaded#12388108/20/04; 16:48:23

(sung to The Beach Boys "409" Irving Music, Inc. BMI Brian Wilson/Gary Usher)

Gold just blew through 409
Gold just blew through 409
Through 409

Well I saved my pennies and I saved my dimes
(Buy it up buy it up Gold so fine)
For I knew there would be a time
(Buy it up buy it up Gold so fine)
When Gold would blow through 409
(Gold so fine 409)
Buy it up buy it up buy it up Gold so fine
(Caught it at bought it at 409)
Passin' up passin' up 409
(Caught it at bought it at 409)
Passin' up 409
(Caught it at bought it at 409)
Passin' up 40...

Nothing can catch her
Nothing can touch my Gold so fine
Gold so fine ooooo
(Buy it up buy it up ooooo)
(Buy it up buy it up ooooo)
(Buy it up buy it up ooooo)
(Buy it up buy it up)

The darker things get the brighter she shines
(Buy it up buy it up Gold so fine)
She'll be smokin' in the worst o' times
(Passin' up passin' up 409)
My little pretty stash of Gold so fine
(Gold so fine Gold so fine Gold so fine Gold so fine)

Giddy up giddy up giddy up Gold so fine
(Passin' up passin' up 409)
Giddy up Gold so fine
(Passin' up passin' up 509)
Giddy up Gold so fine
(Passin' up passin' up 609)
Giddy up Gold so...

Nothing can catch her
Nothing can touch my Gold so fine
(Gold so fine Gold so fine Gold so fine Gold so fine)
Passin' up 809
(Gold so fine Gold so fine Gold so fine Gold so fine)
Passin' up 909
(Gold so fine Gold so fine Gold so fine Gold so fine)


masHello TC#12388208/20/04; 16:52:00

On your graphs, thanks. Question, could it be the Euro price is driving the USD price upwards? Of course ever so silently? See one month's charts and today's move, which is moving first?
SmeagolNasstiness ahaed#12388308/20/04; 17:05:49

Ssir Antipodean Bug (08/20/04; 16:09:40MT - msg#: 123880)

"So we might see more CB's breaking ranks with the US
'command' and embarking on a gold buying spree instead of
the much threatened selling spree."

This, we think is when the real Gold battle, and also the all too real shooting, sstarts.


TownCrierHi mas#12388408/20/04; 17:40:22

I'm not sure I fully understand the nuance of your question, but in the interest of putting words down in an attempt to provide some form of answer, I would say just this.

Any correlation of movements on the dollar-price graph and the euro-price graph is representative of an underlying reflection of the price movements of gold (as a quas-independent (not yet free) item on the market) albeit seen filtered in these two graphs through the separate lenses of the dollar or euro, the particular tint of which is determined by the exchange rates for the dollar/euro on the forex markets.

If the exchage rates held steady over time, then the gold graphs in both currencies would look identical (but applying a constant scale factor) wiggle for wiggle as generally determined by the market participants' sentiment for gold. Superimpose on these graphs a variable exchange rate where the euro grows variably weaker and stronger against the dollar, and if the magnitude of those shifts are significantly larger than the underlying wiggles of the gold price/sentiment, then suddenly you may see any imaginable combination of effects when trying to correlate the up and down price in dollars to the up and down price in euros on gold which is itself trying to wriggle free underneath it all.


R PowellFrom our own; 19:32:23

I found this to be of interest...

"Suddenly everyone is talking about a gold/oil correlation and saying gold has to rally because oil is up," Leonard Kaplan of Prospector Asset Management said, noting investors were shifting into the hard asset in a bid to minimize inflation risk. "But to see gold higher with the euro down sharply is most confusing," Kaplan said. [Randy's note: I don't see any basis for confusion. If it isn't confusing that oil or any single currency can be higher against all other currencies, then why can't the same be true for gold? All things considered, the most natural expectation is, in fact, to see gold rise against all currencies.] Gold has loosened its correlation to the euro in recent days as dealers increasingly focused more on oil and less on the dollar's fortunes."

Leonard Kaplan is not the only analyst to have repeatedly said that gold has been trading like a currency. If you want to see where gold is heading, they have stated, over and over, just watch the relative strength of the US dollar. Okay, I thought, and I have been for years. But the corrolation has been weak this past week or so. Now the talk is that the price of gold is being influenced by the price of oil. Maybe both corrolations are valid (along with an unknown number of other influences?) but, at different times, under different economic circumstances, one has more power or influence than another. I'm sure it's not that simple...maybe gold is simply reacting to the increasing awareness that years of monetary inflation do have perhaps higher prices for those items that most people have to buy to stay alive. That's pretty basic, no?

Anyway, I believe that if gold is no longer strickly tied in mostly to the relative strength of the US dollar (or interest rates?) then....then what? But does this qualify as what some would call a sea-change? If it's the perception of price inflation and the beginning of a substantial reaction to that awareness then, imho, it is most newsworthy and perhaps deserving of that "sea-change" modifier. In my life, price inflation has been in the here and now for some time...but is the financial world just now beginning to doubt all the previous CPIs, PPIs, Fed. speak and soothing (snakeoil) comments issued by the world's financial analysts? If so, this might...could...has the potential to be...a serious move. I certainly hope so. Have we waited long enough? Have enough given up so that the market may now be ready?
happy weekend!

masTC thanks#12388608/20/04; 19:33:29

I was waiting for a time were one would actually see the event take place were they would be pushing the price upwards but both for different reasons. One to break the other and the other trying to show that they still had control of the price, (moving it upwards while still trying to control the accent). If you know what I mean? Is this such an event?
Look at oil, what should now happen is that the exchange rate moves upwards between the USD and Euro. This way the price of oil in Euro's stays the same. What we see in oil is the devaluation of the USD, is this correct?

WaveriderGold/Oil Ratio Extremes#12388708/20/04; 20:48:36

"The famous gold/oil ratio has just hit its third greatest extreme in history, so a mean reversion is due. This portends much higher gold prices ahead.

This week I would like to consider the powerful gold and oil interrelationship over the past four decades or so. The implications of our present major oil upleg for gold investors and speculators are enormous and the coming precious-metals profits will be vast if these commodities’ rock-solid historical relationship holds."

Waverider: Sweet!! Adam Hamilton has provided an excellent update on his essay with a superb analysis of Gold:Oil ratio mean reversion, given a number of different POO scenarios. A VERY worthwhile read, great charts, and a nice adjunct to today's DMR.

Liberty HeadStorm Watch#12388808/20/04; 21:45:51

The Republican National Convention in New York is just around the corner.
The anticipated protests promise to be too large to sweep under the carpet.
Tensions are rising with each tick of the clock.
Much of what started out as NYPD security tasks are now in the hands of das Homeland. You know, the same friendly folks that are so concerned about reliable intelligence, the sanctity of democratic elections and protecting our Constitutional rights. Yes, that Homeland.
Should the protests turn violent, the excuse for marshal law will be at hand.
Among other things, now would be a good time to obtain more gold.

Best Wishes

Gandalf the WhiteBEAUTIFUL "Double Top BREAKOUT" today on the GOLD P&F Chart !#12388908/21/04; 00:26:11$GOLD,PLTB[PA][DA][F!3!!]&pref=G

TWO little GREEN "X's" today and the projected price now is ------ $476. !!!!
WAY to go, SPIKE and SPOT !!
Take a well earned weekend rest and let's do it again NEXT WEEK !!

PRITCHO(No Subject)#12389008/21/04; 01:00:45

FROM: 19 August 2004 — GoldMoney Alert from James Turk
"The End of Cheap Hydrocarbons"
"The reality for crude oil is the inevitability of higher dollar prices. But don't blame OPEC or the other oil producers. The end of cheap hydrocarbons is the result of the dollar becoming worth less and less."
Figures from "The Privateer" show that the percentage difference between the $US index 2002 high and its present "price" is a staggering - 26.83%!. Over 1/4 LOSS in value in just 2 yrs --SO FAR!

Why should the OIL PRODUCING nations accept sharply depreciating US fiat in return for a most valuable asset? It is to be expected that Western Governments will lie through their teeth to try & hide this fact.GOLD & SILVER will be the ultimate canaries --but we can all do our part by writing to local papers etc in an effort to force light where now there is darkness. It won't be pleasant for anyone.

In his memoirs, "A World Transformed," written five years ago, George Bush Sr. wrote the following to explain why he didn't go after Saddam Hussein at the end of the Gulf War.

"Trying to eliminate Saddam...would have incurred incalculable human and political costs. Apprehending him was probably impossible.... We would have been forced to occupy Baghdad and, in effect, rule Iraq.... There was no viable "exit strategy" we could see, violating another of our principles. Furthermore, we had been consciously trying to set a pattern for handling aggression in the post-Cold War world. Going in and occupying Iraq, thus unilaterally exceeding the United Nations' mandate, would have destroyed the precedent of international response to aggression that we hoped to establish. Had we gone the invasion route, the United States could conceivably still be an occupying power in a bitterly hostile land."

If only his son could read!!!!!


"The Gold Bull Market This Week"
August 20, 2004

Just over a month ago, Mr Greenspan came up with the rosiest of rosy scenario regarding the future of the US economy. Since then, every financial statistic has refuted him. Treasurer Snow is now complaining about "flagging" global economic growth and its effect on the US trade deficit while defending the US Dollar's status as the world's reserve currency by claiming that record foreign ownership of US debt is a "healthy" situation. Meanwhile, oil is mounting an assault on the $US 50 a barrel level while US government debt closes inexorably on the Treasury's debt "ceiling" of $US 7.384 TRILLION.

The surprising part of the equation is not that Gold is now moving back towards the level at which it started the year, it is that Gold is not yet setting new 2004 highs and indeed pushing towards highs last seen in the heady days of the end of the 1970s. The parallels with the 1970s and today are as numerous as they are obvious. The major difference is the HUGELY bloated $US debt pile now compared to then.

Gold was up $US 14.30 this week, having halved the distance to its 2004 high ($US 427.80 spot future close set on April 1). There are many reasons to expect a challenge to that 2004 high in the near future. Asian demand is VERY strong, and Asian demand is seldom if ever strong when Gold is at or near a short or medium-term top. Evidence of a global economic slowdown is gathering by the day. Any oil price above the $US 50 level will trigger the conclusion amongst many traders that a replay of the 1970s is becoming inevitable. And the $US is being held up by little more than jawbone and wishful thinking."

misetichToo much money to blame for rising price of oil, economists claim#1238948/21/04; 08:35:34


As oil prices continue to set new records, markets, manufacturers and motorists alike seek to apportion blame.

Sometimes it is violence in the Middle East, sometimes it is Venezuela's political troubles, or surging Asian demand, or Russia's crackdown on oil company Yukos.
...... a small but influential group of economists thinks that a price fluctuation of this magnitude is determined less by supply and demand for oil, and more by that for money.

They think interest rates have much greater influence on commodity prices than is widely assumed, and blame loose monetary policy in particular for the current high level of oil prices. If true, their contention underscores the unpredictable consequences of monetary policy and provides a powerful argument in favour of tightening monetary control.

Mervyn King, the Bank of England's governor, has defended central banks from the charge that their lax policies have fuelled the oil price rise. But he conceded that aggressive rate cutting may have contributed to the rise in commodity prices, including oil.

"I think there has been an expansion of money and liquidity around that does lead in general to an increase in asset prices, of which commodities prices are one," Mr King said last week. "But that has, of course, been a deliberate response by the monetary authorities to the situations in the economies which they each face."
Eric Barthalon, chief economist at Allianz Dresdner Asset Management, has tracked a correlation between US public debt held by central banks a measure of overall global liquidity and the oil price. Meanwhile, the ratio of global reserves to world trade, another measure of global liquidity, has risen for two years at the fastest rate since the 1970s the last era of oil shocks according to data collated by the International Monetary Fund.

"Whenever you print money in excess of the needs of the real economy, you create a situation where people try to spend it, to get rid of excess liquidity," said Mr Barthalon. "We are in a situation where the US current account deficit is not financed by foreign private savings but by global money creation money is being created out of thin air." This tends to be spent on the likes of oil and steel, he says. "The markets that are most likely to react the fastest are commodities markets. And in creditor countries like China, the economy is booming and so is the demand for commodities." Economist Jeffrey Frankel of Harvard's Kennedy School of Government has argued that changes in oil prices are at least partly the result of real interest rates nominal interest rates adjusted for inflation. "If short-term [real] interest rates are low then speculators borrow in US dollars and go long in other things, in this case in commodities, so this could explain some of the big run-up in prices," said Mr Frankel.
but Mr Barthalon says foreign exchange reserves growth means the annual average price of oil could rise by 15-20 per cent over the next two years.

The easterly winds carried the "fertilizer" of trillions and trillions of printed fiat to the fertile zone of CHINA

Mervyn King, the Bank of England's governor, classifies commodities as an "ASSET"

Asset Inflation is not tied to the economies in the OSTRICH world of central bankers

ANOTHER reason to add physical GOLD to one's portfolio are the inane comments of Mervyn King

All Aboard The Gold Bull Express - Part ll

adminPost pulled by mistake#1238958/21/04; 09:48:04

Apologies to poster who posted #123893. Your post was pulled by mistake. Please repost if you can.
DruidFeds Subpoena Fannie Mae -Source#1238968/21/04; 10:12:45;jsessionid=ZYR3FTQZ21AKOCRBAEOCFEY?type=businessNews&storyID=6031145

WASHINGTON (Reuters) - Regulators investigating Fannie Mae's accounting practices have sent subpoenas to the No. 1 U.S. mortgage finance company in connection with the probe, a source familiar with the matter said on Friday.
Fannie Mae's financial regulator, the Office of Federal Housing Enterprise Oversight, began looking into the company's books after an accounting scandal at rival mortgage enterprise Freddie Mac (FRE.N: Quote, Profile, Research) led to a $5 billion earnings restatement and the ouster of top executives last year.


Druid: ANOTHER tear in the fabric of the illusion that is maintained by Wall Street and Washington. We'll just have to wait and see how this one plays out.

DryWasherPost pulled by mistake#1238978/21/04; 10:16:04


If my memory is serving me correctly I don't think you made a mistake by pulling 123893 because as I recall both 123892 and 123893 were by the same poster on the same subject and both clearly should have been pulled, and thanks again for providing this forum.


DruidAug 19: The metastatis of inflation#1238988/21/04; 10:21:54

"From 1981 into 2000 and beyond for the bond markets, prices for financial securities rose dramatically. These prices rose as a result of increased demand for the products, a near 2 decade long persistent shift in the flow of funds, facilitated by substantial increases in the monetary aggregates, then prevailing from tangibles like oil, silver and gold into the financial sector. Towards the latter stages of the boom in financial securities quantities of funds flowed into this sector which were orders of magnitude greater than the amounts required to, for instance, drive up the price of oil to $100. Remember that the daily turnover of the spot foreign exchange market is measured in the trillions of $. To put that number in context, $1Tln will buy you a little under 21B barrels of oil or roughly enough oil to supply the US' needs at current consumption rates for just under 3 years. Alternatively, 21B barrels of oil would fill the strategic petroleum reserve 31 times. The point I'm trying to make is the quantities of money thrown about in the financial sector daily dwarf the flows that are needed to allocate resource in the real sector.

To get a sense of the shift in the flow of funds consider that, according to the Federal Reserve Flow of Funds report, in 1980, US citizens' net acquisitions of financial assets totaled some $320B. By 1998 that figure had almost tripled to $910.7B, and in 2003 net financial acquisitions came to $986.4B. In 1980 some 17M bbl/day (6.2B bbl/year) of petroleum products were supplied to the US. Using the EIA's average annual price of 21.59 for crude oil as proxy multiplier, that comes to $134B. In other words, in 1980 the US net acquisitions of financial assets ran 2.4 times higher than the cost of oil. In 2003, some 20.4M bbls/day (7.4B bbls/year) of petroleum products were supplied to the US. Again, using EIA data, this comes to roughly $205B over the year. Thus, over a period when net annual acquisitions of financial assets tripled the net cost of petroleum products rose by only 50%. That is, by 2003, net acquisitions of financial assets exceeded the net cost of petroleum products by a factor of 7.3."

Druid: Another perspective describing leakages and the flow of funds from one from one asset class to ANOTHER.

USAGOLD / Centennial Precious Metals, Inc.When in the Course of Human Events it becomes Necessary to Protect your Savings from a Dissolving Currency...#1238998/21/04; 10:30:04">Arm yourself with knowledge
Chris PowellGATA comments on Financial Times oil price story ...#1239008/21/04; 10:39:17

... as posted by Misetich.

That story echoes a lot of what GATA
has been saying all along. Amazing
that a mainstream financial publication
has begun to acknowledge reality.

Black BladeToo much money to blame for rising price of oil, economists claim#1239018/21/04; 13:51:34


Eric Barthalon, chief economist at Allianz Dresdner Asset Management, has tracked a correlation between US public debt held by central banks a measure of overall global liquidity and the oil price. Meanwhile, the ratio of global reserves to world trade, another measure of global liquidity, has risen for two years at the fastest rate since the 1970s the last era of oil shocks according to data collated by the International Monetary Fund.

"Whenever you print money in excess of the needs of the real economy, you create a situation where people try to spend it, to get rid of excess liquidity," said Mr Barthalon. "We are in a situation where the US current account deficit is not financed by foreign private savings but by global money creation money is being created out of thin air." This tends to be spent on the likes of oil and steel, he says. "The markets that are most likely to react the fastest are commodities markets. And in creditor countries like China, the economy is booming and so is the demand for commodities." Economist Jeffrey Frankel of Harvard's Kennedy School of Government has argued that changes in oil prices are at least partly the result of real interest rates nominal interest rates adjusted for inflation. "If short-term [real] interest rates are low then speculators borrow in US dollars and go long in other things, in this case in commodities, so this could explain some of the big run-up in prices," said Mr Frankel.

Over the past two years, Nymex crude oil futures have risen by more than 50 per cent, setting a record close to $47 last week. Meanwhile nickel prices have more than doubled, while steel is up by about 60 per cent and gold by 25 per cent.

Stephen Roach, chief economist at Morgan Stanley, thinks the world is now seeing a commodities bubble. "Central banks have been biased towards excess accommodation in the last four years, and that has left the environment ripe for bubbles," Mr Roach said. Although Mr Roach thinks exuberant Chinese demand was driving up commodities prices, he lays some of the blame on the monetary authorities. "A key proponent of rising commodity prices has been investors and speculators and hedge funds in particular, searching for a return in a low return environment." Mr Roach says there would be a "sharp reversal" in commodity prices as China's economy slowed, but Mr Barthalon says foreign exchange reserves growth means the annual average price of oil could rise by 15-20 per cent over the next two years.

Black Blade: "Interesting" take on the current global economic mess. Gee, where have we heard all this before? ;-)

AristotleDebunking#1239028/21/04; 14:55:03

--------Mr Roach says there would be a "sharp reversal" in commodity prices as China's economy slowed---------

Roach doesn't appear to be taking into account that central banks have any influence. Their mandate, for the most part, is price stability, and especially where commodities are concerned, when new (inflation-driven) price levels have gotten into the landscape, the central bankers may find it more in keeping with principles of stability to accept the new prices than to contribute to further volitility in either actively or passively seeing them wrenched back down.

In other words, the price of commodities won't fall if the larger share of central banks accept them as part of the new landscape, and especially they *can't* fall if the resulting money supply is saying, effectively, "Hey, this currency isn't worth much!"

In the rogues gallery of unseemly social phenomena, the specter of deflation is the one most-easily vanquished.

Inflation is a sure thing, and therefore so is Gold.

Get you some. --- Aristotle

Dollar Bill.,.#1239038/21/04; 19:26:25

Aristotle, I would shrink the club even smaller than "the central banks". Too many leaky mouths in that crowd. I am guessing that at this point that a group made up of some Fed members, Treasury perhaps, some finance guys, and perhaps even an industry guy......some amount of involvement from international finance guys perhaps a top Japanese finance guy or two, a small club, that decides what is best for thier latest priority.
As I believe Belgian noted, American finance policy in the nineties was perhaps all oriented around the battle with the euro. And I think now the mission is different. I think the one worlders have won and the dollar is the tool that will be used to bring about the global one structure design.

I say one worlders because the euro boys were shooting for a multi polar world. And while most thought that meant politically, we know it was about currency.

I am trying to see the major moves, like price of oil shifts, in terms of what the small group might have as a reason for orchestrating it.
Even though the saudis claim "its not us!" to distance themselves from the price rise, and other smarter guys than me see supply and demand issues, I cannot help but suspect manipulation.
I can only think that there is a small group who are at the top of the decision process and are the guys steering the massive, long term project of total control that is and has been unfolding for many years.

Thier decisions at this point are not the level of what the impact is on American guys long term, thier decisions serve thier mission. Which is I believe, to control enough of the worlds economy so that they are firmly in charge by the time
we are at the point of command economies and the fabled "money rain" system. The system where control is such that funding for countries or -allowances- are allocated by the central power.
The united nations politically is going to trail behind, but the united states of earth -economically- will be controlled more and more from a central point that operates quietly one way, while hiding its real designs from even those who think they are in the know.
Granted, it is a stretch to take a oil price rise and envision a global control conductor.
Lots of things out of thier control, yes, but they are there and they are steering.

Where gold comes in, I think, is when they fail.

I think they are trying desperately to take the only road open to a fiat that wants to avoid the natural fiat end.
That is the road of total control of .......well.......everything. Things seem to be working for them. I used to worry about the bill murphy group hastening the demise of our fragile system. No way I guess! As you I believe used to counsel me.
The control is well entrenched. But, I believe they will fail. For reasons I have mentioned here before.
Reasons that were definately from left field I admit, but, I still hold them.

AristotleYou have a good memory, Dollar Bill#1239048/21/04; 20:47:03

That's right... I, too, remember suggesting that you not worry yourself overmuch about some of the internet rhetoric hastening or ushering in an apocalypse.

Since I've apparently found you in a chatty mood, and myself none too predisposed to the garden-variety "One World" controllers dogma, I wonder if I might convince you to elaborate just a bit on the ultimate motives of the One World Design Team. Are they necessarily sinister?

In most discussion of this sort, bankers are almost always cited near or at the root of the matter. Would you care to share your own thoughts on that? Through time, have banks gotten the long or short end of the stick, and what are the benchmarks in that measurement/determination?

I'd be happy to open this question up to the whole table to get anyone's thoughts who's in a mood to talk.

Gold. Get you some. --- Aristotle

CytekMchugh's take on the OIL run up - this should start an interesting thread.#1239058/21/04; 21:30:09

Here's a sinister plot. You want to get re-elected but the technical landscape is awful, fundamentals stink and the little pronounced fact is leaking like a sieve- despite yeomen's efforts by your people to cook the books - as we approach traditionally the worst season of the year for equities. What do you do to bag an election guaranteed win equity rally? Well, after careful deliberation with the Master Planners team deep inside the bowels of the situation room, you decide to mantriculate a parbolic spike in crude oil over the summer, and drive fear into the markets. But you support markets - mitigate the damage - with the PPT buying. Tell them to bid like mad at the first sign of trouble. Tell them not to worry, their holdings are certain to be worth far more in the autumn. Then just before November, perhaps starting late September you stop buying oil. Realease supply from the strategic oil reserve. All in the name of "big goverment" to the rescue. Let er fall baby. And as she crashes down like an Athens cannonball diver, markets rally, euphoric that oil is normalizing and all in well in the world.

Or, try this. The Master Planners have LOST CONTROL - and the above is fiction.


ToolieThis week at the bone pile#1239068/21/04; 21:31:04

O’Sullivan to lay off 150 – Mo.: 150 jobs
"These were announced as temporary layoffs. They will be called back as soon as our inventory situation is balanced out… Slumping demand, imports from Asia, excess capacity at home and rising prices are some of what is behind the turmoil…

Nortel Tries Again To Turn Corner from Accounting Saga – US: 3507 jobs
Battered Nortel (NYSE: NT) …said it would lay off 3,500 workers and fire seven executives
In addition to the cuts, which Nortel said would come across its businesses and be focused in North America

Laidlaw to sell AMR, EmCare—US: 425 jobs
The publication, The Deal, also reports Laidlaw will sell EmCare Holdings Inc., which provides emergency healthcare and outsourcing services for hospitals…

Business in brief – NY, OH :400 annonced now, total 1000 jobs
Citizens Financial Group said it would cut several hundred jobs in Cleveland and Rochester, N.Y., as part of its pending merger with Charter One Financial Inc. of Ohio.

Manchester Printing Firm to Close Doors – Vt.:97 jobs
Citing a changing marketplace for business forms

Closures Mean Uncertain Future For Tama/Toledo Ohio:500 jobs
Fears of mad cow disease have pushed an Iowa company out of business and more than five hundred people out of their jobs. Some fear the entire town is on the verge of going under…. In Toledo, the signs of the stop and go economic news are all over town. A house for sale here, another for sale there... It almost seems Toledo is for sale….Real Estate agents in the area say housing sales there have collapsed following the announcement of fifteen hundred layoffs in the area in just a year's time. Unemployment in Toledo is nearly fifteen percent. A look at the local paper shows only part time work available in the town.

Alaska Air to Cut Up to 150 Managers – Washington: 150 jobs
Alaska Airlines plans to cut up to 150 jobs, or 9 percent of its management staff, as it seeks to reduce layers of management and cut costs

Hooker closing western Carolina plant -- N.C.: 240 jobs
"Because of ever-increasing customer demand for lower-priced wood furniture imported from Asia, we have been unable to generate enough orders to run all four of our domestic wood furniture manufacturing facilities at full capacity,"

Charley leaves 48,000 jobless – Fla
The Florida Agency for Workforce Innovation estimates that Charley is directly responsible for putting 48,000 out of work in 25 counties, including Sarasota, Manatee and Charlotte counties…..We should see a noticeable jump in imports as Florida rebuilds. I hope all the goldbugs sustained little loss.

Report: Bank of America to lay off 1,500 – Various Locations
Bank of America Corp. plans to lay off hundreds of tellers and other branch employees at Fleet banks on Wednesday as a result of its merger with FleetBoston Financial Corp.,

Alcoa to close Ohio auto parts plant, lay off 140

Spokane medical center to cut 6% of work force –Washington: 191 jobs
The deficit is the result of a doubling in the amount of medical care it provided without compensation in the past year, as it deals with a growing number of uninsured and underinsured patients.

Guidant to cut 119 jobs in Temecula – Ca.: 300 jobs
Guidant Corp. said Tuesday an analyst's forecast that the company would slash 1,000 jobs, with half of those to come from its ailing vascular division, was highly speculative and exaggerated.

Libbey Closing a Factory – Ca: 140 jobs
Glass cookware manufacturer

Azusa company closing to move work to Mexico – Ca?: 300 jobs
Several employees said that, over the past several months, the company sent them to Mexico for several weeks to train new employees. They now speculate that they were training their replacements.,1413,206~22097~2338995,00.html

Detroit's Greektown Casino cuts 182 jobs in response to state tax increase – Mi.:182 jobs
"The state budget situation is well-known to everyone," Boyd said. "This is a revenue source for the budget — a critical piece for resolving the budget."

Gateway to lay off hundreds of Midwest workers – Mo. & S.D.: 100-400 jobs
The company plans to trim its employee ranks to about 2,000 by year's end, down from 7,400 at the end of last year and 24,600 at the end of 2000

Also, From The Detroit Free Press:
Factory jobs hit a new low in state
The 16,000 fewer factory jobs in July dropped the state's total manufacturing sector jobs to 686,000 from a recent peak of 911,000 in mid-1999. July's total was the smallest number of manufacturing jobs since the state began its current method of counting them in 1990.(end snip) that's 225,000 mfg. jobs ~POOF~

geAristotle msg#: 123904#1239078/22/04; 00:44:51

My current understanding of world politics is based on the little book named, "The occult technology of power". One can find the book free at the internet with a search engine (google is no good), say,

Main features of the book as I understand are:

* existence of rival dynasties,

* hidden hierarchy works better in modern societies in contrast with open hierarchies of animal world and pre-modern world.

* Occult knowledge is the key to social domination. As occult knowledge becomes scientific knowledge and then common sense, it becomes socially useless for domination (Key example of occult knowledge is astronomy for farming : "As soon as men abandoned the life of wandering, tribal hunters to till the soil they needed to predict the seasons. Such knowledge was required in order to know when to plant, when to expect floods in fertile valleys, when to expect rainy seasons, and so on. Months of backbreaking work were wasted by the unavailability of the calendar, a convenience we take for granted. The men who first studied and grasped the regularities of sun, moon, and stars that presage the seasons had a valuable commodity to sell and they milked it to the fullest at the expense of their credulous fellowmen."

* In modern times the corresponding occult knowledge is at economics (central banking--> fiat money--> business cycles), politics (so that central banking never becomes a political debate topic) and history (importance of self-interest in history is transformed into an importance of ideologies, religions, altruism, etc.)

* Head of a dynasty has two flanks to fight. One with rival dynasties of other world regions. Two with upper end of the middle classes who may try topple the dynasty.

goldenpeaceMoney and Credit Rates of Change....(from Doug Noland)#1239088/22/04; 07:47:34

Year to date rates of change(%):
August 15 August22
M3 +8.9 +8.3
Savings Deposits +13.6 +13.7
Bank Credit +8.0 +8.3
Real Estate Loans +13.7 +14.1
Commercial Paper +10.6 +10.0
Asset Backed Sec +35 +38
Foreign CustodyHoldings +28.9 +29

Rates of change move up just a tad at this point and stock markets move up with Commodities and other "real" assets booming and starting to is $200-$440 behind its normal price in relation to $40 oil.


Great Albino BatInteresting post, ge! Re "Occult technology of power".#1239098/22/04; 09:37:08

Further to your interesting comments, I would add that - so far as I know - our present age is the first in the history of the world, where the Center of Power is hidden.

There are not only reserved areas of knowledge, closed to laymen; the very identity of the powerful is kept hidden.

In all previous eras, the ruler erected monuments to himself in his territory, so that the natives could know who was the Boss. This is no longer the case. Those who appear to be our rulers, are only managers for the true power, and can be hired and fired at will.

Now, if I need to explain further, you are a layman and not to be enlightened beyond your capacity.

And by the way, perhaps we shall have fireworks in the gold markets tomorrow - have the powers that be decided that $400 is too expensive to defend, and are falling back to another trench, at say, $428? The PTB are fighting a losing battle to defend the dollar, but, they are going to fight every gold advance in their retreat. It may take longer than we think to get to $500. They are counting on the present generation moving on, and thinking that the youngsters of today will be much more manipulable as adults.

That may be the case in the USA, but in the rest of the world, the desireability of GOLD will certainly not wane.

Interesting week ahead, My expectation for Friday's close: $425. Alternatively, $395. AS you can see, I'm training to be a newsletter writer.


Liberty HeadWhere's Waldo?#1239108/22/04; 10:16:47

The center of power may indeed be hidden, but the corresponding center of weakness is in plain sight.
While the Constitution is being trampled, the center of weakness is sitting on the sofa, watching "Star Search".

Best Wishes

Liberty HeadThe Weakest Link#1239118/22/04; 10:23:43

How many times have you heard it? A chain is no stronger than it's weakest link.
Forget about the banks, the Federal Reserve, taxes, interest rates, trade deficits, and unemployment.
The Achilles’ heal of the whole dollar based economy is the unbridled growth of gov't spending.
Our only hope of avoiding the eventual collapse of the dollar is that the malignant growth of gov't be put in remission.
Sorry to say it, but this is the same as saying there is no hope at all.
Gov't expansion is a terminal disease with a long, painful disease process.
The most the Federal Reserve and the CB's can provide is palliative care.
Possession of gold helps, but if one does not embrace the integrity of personal freedom and personal responsibility in a free market, any advantage will surely be lost.

Best Wishes

mikal@Liberty Head#1239128/22/04; 12:52:58

I like your calling attention to "personal freedom and personal responsibility", and the anecdote of a television-absorbed citizen.
This morning that very image dawned on me, and the people were so engrossed that they created their own reality- with homogenous, relatively normal and serene economic life. No serious social or geopolitical themes to be considered either. A nearly perfect Hollywood setting each time, for
a politically correct escape and vicarious experience.
The perfect companion(and escape from) mainstream news, real daily experience and intuition.
Further, a self-fulfilling prophecy evolves daily from this mutation of mass opinion. This IS a "mutation", because the consequences, though appearing at first most desirable, exciting and all-satisfying, are rather most
unnatural, unsustainable and malignant.

SovereignReality Check for Americans#1239138/22/04; 14:55:58

Aristotle wrote (msg. 123902): "Their [the Central Bankers'] mandate, for the most part, is price stability."

It's a widely-disseminated fact that the US dollar lost 96% of its value (its "price stability") since the Fed's inception. It's a foregone conclusion that the Central Bankers' only mandate is to keep the ruling classes ruling--witness the debate in the US whether Greenspan will "vote" for Bush or not, by doing this or that with interest rates.

It speaks volumes, though, about the quality of the debate in American circles (and the true sincerity of most Americans) that even so-called gold bugs would buy arguments like Aristotle's without flinching. (To be fair, I think Aristotle claimed that he was Jewish, to the best of my recollection.)

Before you Americans blame your politicians for the ills that befall your society, ask yourselves: Is there a single current US government policy that the average American is fundamentally in disagreement with? [NO!]

Did you people ever vote for a party or a candidate that did not represent the interests of your ruling classes? [NO!]

When you live in the Greatest Democracy Ever Known to Mankind (sic), you have only yourselves to blame.

Reality--get yourselves some.


Liberty HeadFurthermore..... #1239148/22/04; 15:21:15

Thanks for your comments mikal.

I saw the Manchurian Candidate yesterday. It's a sci-fi movie about a brainwashed political candidate with subcutaneous microchips that allow him to be controlled by evil corporate barons. It seems to me the real microchips of control are sitting on T.V. stands, dashboards and movie screens across the world.

Anyone interested in identifying the hidden center of power discussed here in previous postings could try to access and navigate the catacombs of the Carlyle Group, or better yet, just unplug yourself from the control box. Become your own center of power. Get gold.

Best Wishes

Clink!@ Sovereign#1239158/22/04; 15:26:24

While some of the material which you refer to is quite interesting, I am at a loss as to why you post as if you are addressing (in a particularly aggressive-negative manner) a group of average American Joe & Jane Six-Packs.

As you are probably well aware, the posters at this forum a/ are not all American, b/ are not average and c/ probably have similar thoughts to yourself in terms of the subject matter. So my question to you is "What exactly are you trying to achieve with your posts ?"

You appear to have a thing about America, so would you like to tell us a/ where you come from yourself and b/ if you can suggest any countries where the ruling class don't treat the masses in the way you describe in your post ?


SovereignMr. Clink!#1239168/22/04; 16:17:36

The reason(s) I post are: 1)to illustrate for my and your (the forum) benefit that you DON'T really "have similar thoughts to [myself] in terms of the subject matter" BUT you mistakenly believe that you do. (Witness the ad hominem attacks by Ag Mountain and Aristotle.) And 2)to show that gold as a monetary and moral principle is simply incompatible with your countrymen and your nation-state. America CANNOT co-exist with gold as money yet, I reckon, none are more patriotic then the Americans at this and other similiar forums. That's the contradiction I want to expose for the world to see:

"Our broad purpose is permanent stabilization of
every nation's currency. When the world works out
concerted policies to produce balanced budgets and
living [sic] within their means then we can properly
discuss a better distribution of the world's gold and
silver supply."

--Excerpt from Roosevelt's (FDR) message to the
delegates of the World Monetary & Economic
Conference on July 10, 1933.

In America, this guy is the most revered of all American presidents, isn't he? America has been telling different versions of the same disdainful lie to the rest of the world ever since. This is a fact.

The third reason I decided to post is because I have noticed that there are many in the Anglo-saxon gold community who are trying to do their damnedest-best to confuse what the real economic and financial issues are all about, in general; and the gold question, in particular. Even so-called old-timers like Russel are spouting repugnantly false theories like consumption in America representing a dubious "synthetic short interest" against the dollar. This kind of nonsense does not wash where I come from. And all those so-called technical traders now dime a dozen at Gold Eagle etc.? Disgusting.

As to your last question: my friend, I'm French.


GoldendomeSir Sovereign -- Our haranguer at the table#1239178/22/04; 16:30:32

Sir Clink: I too get somewhat perplexed at Sovereign (though I do enjoy his posts). Sounds, doesn't it, like he's the preacher yelling at the choir? As you point out so accurately, most of us probably agree with many of his opinions--I know I have, and I think others do as well. I think that your question to him is appropriate: Why is he yelling this stuff at all of us? Why not go to some big stock market forum, or bond forum, or paper money and debt forum and start preaching at those lost souls. Not that I care to see sovereign leave. I think the vinegar that is directed at the U.S. is probably quite common elsewhere. Golly, wouldn't every county just love to put in the orders for what ever they might wish to buy around the world; and then just pay for it with money that they too could print up at will?

Sovereign: Keep up your critical work, if you will. However, maybe you could also point out some of the things put forth through this forum that you agree, or identify with--if any!

Federal_ReservesLiberty Head> You have a valid point about#1239188/22/04; 16:36:16

the dependence on government spending.

This article outlines that threat, and the other 4 serious threats we face to our economic freedoms. Not only worth a ready, its worth some study.

Goldendomea view of FDR from the peanut gallery.#1239198/22/04; 16:53:21

Sovereign: I'm certain that you can get **Lots** of Opposing debate about the fork in the road that President FDR took this country down. I don't think that he was ever proposed, for example, to be the fifth face on our monumental Mount Rushmore! From personal independence and responsibility, to irresponsibility and dependence on Government-- Along with, another step in the conterfeiting of our currency, and many of the early steps toward, "Big Brother Government". These too were a part of that legacy.
NedMr. Sovereign#1239208/22/04; 17:01:06

Please be careful how bold you are with your statements. I enjoy your posts immensely, they often tell the bold-faced truth but given that this forum is 'in' America it is not prudent to insult the host. Please be careful that you don't cross the line.

I hope you saw my post to AG Mountain the other day, it was in your defence.

A couple years ago Ari told me to think of buying gold as 'shorting' the dollar. I've often thought about that, in terms of the psychology of 'shorting the dollar'. How far does one go, in this pursuit of 'shorting the dollar' to actually 'shorting America'. Where does one draw the line? Is 'shorting the dollar' condoning economic decline, financial ruin in America, terror hits, government recklessness, etc., etc. ? How can one truely support America, aka the dollar and on the other have true brazen support for gold? One cannot buy gold and America simultaneously, yes?

So I've never understood many posters on this forum. Some brazenly wave the flag and all the while bellow and boast for gold. How can America and gold simultaneously prosper?

Thanks and careful out there.

Clink!@ M. le Souverain#1239218/22/04; 17:01:40

Well, all that may be well and good, but all you have to do is present the facts, add your commentary and that would be fine. If you add barbed comments (including quoting Aristotle out of context like you did earlier today) and what a surprise that you get rebuffed. "As ye sow, so shall ye reap".


masFrom the Privateer#1239228/22/04; 18:07:40

The Captain is predicting weeks not month's for correction?
Heed BB's advise.

Two Parabolic Trajectories - Side By Side:
When the performance of the US economy is placed in a global context of international payments (as seen
by its trade deficits), it should be obvious that such an accelerating slide into ever larger global debt is
unsustainable. It should be equally obvious that the US economy is living on credit, on the "kindness" of
strangers, and is at the mercy of this "kindness" suddenly disappearing. Were most of these foreigners
simply to stop lending to the US economy, then 5.75% of the US economy would disappear in monetary
and financial terms, that being the amount of foreign money no longer arriving. For the US economy,
once such a financial impact struck home, it would be the signal of instant recession.
For the US Treasury, the $US 69.2 Billion one month budget deficit signals the parallel problem. Were
the US Federal Government's ever increasing budget deficits to be funded solely by US monetary
savings, US market rates of interest would be hammered through the ceiling. Were they to be "funded"
by the Federal Reserve "monetising" the Treasury's debt paper, this would cause an explosion of brand
new US Dollars. Side by side, these twin US deficits point straight towards a financial debacle.
The US Versus The Global Economy:
With just about the entire global economy now slowing fast, and with the US twin deficits expanding
even faster than the global economy is slowing, there will be less means with which to finance the US. In
June 2004, the US twin deficits totalled $US 110 Billion. Annualised, that's almost 12% of US GDP. In
July 2004, the budget deficit alone was almost $US 70 Billion. The scale of the problem is crystal clear.

USAGOLD / Centennial Precious Metals, Inc.A risk-free request, helping you enter the gold market with grace and confidence.#1239238/22/04; 19:36:02">Get a head start on the gold market!
USAGOLD / Centennial Precious Metals, Inc.Hard assets, easy access!#1239248/22/04; 19:37:09">gold -- a global calling card
Dollar Bill.,.#1239258/22/04; 20:48:39

Aristotle, I will come back monday night.
heavy mettleThe Federal Reserve and Productivity's Boom-Bust Cycle#1239268/23/04; 01:55:44


"As the eminent Austrian economist Dr. Hans Sennholz has stated: "The ultimate destination of the present road of political fiat is hyperinflation with all its ominous economic, social, and political consequences. On this road, no federal plan, program, incomes policy, control, nationalization, threat, fine, or prison can prevent the continuous erosion and ultimate destruction of the dollar."* Considering Alan Greenspan's reckless monetary policy, it certainly appears that Dr. Sennholz’ statement will hold true. In turn, the productivity "miracle" Alan Greenspan ruminates about today, will turn into a devastating productivity bust – once the dollar's destruction enters its terminal stage. Irrefutably, the blame for the coming productivity bust will rest directly on the Federal Reserve and its inflationary policies."

comment: logical that the productivity miracle is due to less productive workers being laid off first and that the coming productivity bust is due to quality of work being less over time as the value of the currency lessens.

I doubt the blame will ever be placed at the foot of the Fed.

Topazalt Currency PoG.#1239278/23/04; 04:01:07

Yes, we've seen quite a good contrary run-up in PoG ... and the curious thing here, it's exclusively a futures' derived Spot price doing the legwork.
Todays NY action will define who is doing what to whom in the Currency realm imo.

Topaz@Ned.#1239288/23/04; 04:26:39

I'd prefer to think in terms of "shorting the System" Ned as ALL currencies are derivatives of YOUR Dollar and ALL are tarred with the same brush.
Your country is percieved as the Bogey-man ... and in some instances deservedly so ... but the privilege of reserve status also carries it's own baggage in the form of envy and avarise from abroad and most criticism is imo unwarranted.
Acquire Physical Gold AND be a damn proud Dollar-waving American!
BondYields/Dollar on the LaunchPad!

968Gold stock in the US.#1239298/23/04; 09:20:02

Does anyone here knows how much or which European countries have their gold stocked in the US ? I know that all the Belgian gold is in the UK and in the US, and a lot of German gold is in the US (according to the Bundesbank due to lack of place haha). How free is this gold ? Countries like Argentina, Japan, China, Russia,... can buy gold if the want, but when it stays in a US-vault it will never have that much significance.
How can the Euro be a rival to the dollar if the gold that has to back it stays in the US ? Isn't it odd that this European gold isn't stocked in the ECB or ECB-Member Banks ?
Perhaps to US won't allow the Germans to transport their gold back !

geGreat Albino msg#: 123909#1239308/23/04; 09:28:46

We are indeed living in interesting times. Best Regards,
OvSSocrates#1239318/23/04; 09:50:41

You can bet your life Germany is not
allowed to transport their gold back
to Germany...and all that is implied
by that tells you, why the Europeans
are walking very carefully as if wal-
king on eggs...and that nulear umbrella
reaches over all the lands...brinks-
manship par excellance...

OvSPrev.mess.#1239328/23/04; 09:53:44

nuclear, and excellence.
OvSMessage to Socrates#1239338/23/04; 10:01:09

My message is pure observation; no
partisanship intended.
If you would want to control the
world, with limited resources, but
infinite determination, it would be
quite a challenge.
No matter on which side one stands
one has to admit to the artistry
displayed in trying to achieve this
impossibility. Cheers. OvS

968@ OvS#1239348/23/04; 10:06:36

Hello OvS,
If this is the case, the road to Freegold will be very, very long.The dollar can go into hyperinflation, the twin-deficits can double,... as long as the other countries (in particular Europe and the oil-producing countries) aren't allowed to transport their gold back, the rest of the world has to swallow the greenback as reservecurrency.
BTW : My name is 968, not Socrates964. I think he would be offended if he saw you were using his name for my humble opinions...

ge968 msg#: 123934#1239358/23/04; 10:26:14

Chinese population is now allowed to buy gold. Common people of China and India may have the capacity to put pressure on gold price.

Belgian was saying that China was buying the gold sold by Europeans. He also said that Chinese took delivery of their gold. I would not be surprised if Chinese were shipping some the gold back to Europe as a part of their agreement. [Just speculating... We do not who the buyer is, and, where the gold is held.]

geTrying to correct my previous post#1239368/23/04; 10:46:10

I would not be surprised if Chinese were shipping some of the gold back to Europe as a part of their agreement. [Just speculating... We do not know who the buyer is, and, where the gold is held.]
TownCrierGold off slightly in dollars, up in euro#1239378/23/04; 11:05:28

While the dollar enjoys just a little more breathing room from a golden test of a couple mini-tops at $425-ish, gold in euro-land steadily draws closer to the very significant €350 proving ground, a most notable breakout target -- in place since February 2002.

The dollar and euro prices of gold since January 2001 have two distinctly different yet positively reinforcing tales to tell about the bright future of gold.

At anyone's request I might be found easily persuaded to cobble together a graphic comparison of the two pictures over that time horizon.


USAGOLD / Centennial Precious Metals, Inc.... In Order to Form a More Perfect Union... (between You and Your Savings)#1239388/23/04; 11:34:57">Arm yourself with knowledge
TownCrierGolden Opportunity -- going fast#1239398/23/04; 12:58:52

Don't kick yourself later when, in a moment of clarity, it dawns on you how very much you would have liked to have a few of these beauties rounding out the corners of your portfolio.

Click, or call today.

1-800-869-5115 extension 100


TownCrierReading this will remind you how sociopolitically remarkable the EU common currency truly is#1239408/23/04; 13:37:57

HEADLINE: A common currency for SAARC?

(excerpts) New DelhiAugust 24, 2004

....Although regional integration enthusiasts tend to gloss over these, the costs can be quite substantial for member countries. The most obvious costs arise from the loss of sovereign control over monetary and exchange rate policies.

A common currency means that these policies would be conducted by some version of a SAARC central bank which would subsume much of the policy-making prerogatives of today's national central banks of SAARC countries.

To put it bluntly, the RBI (together with the finance ministry) would no longer determine India's monetary and exchange rate policies. .....we should frankly recognise that the political and psychological costs of such loss of monetary independence are likely to be very substantial for all member countries and their governments.

.....The advocacy of a common SAARC currency at present is really a case of putting the cart before the horse. We need a far freer movement of goods, services, capital, and people across borders within SAARC before the issue of currency unification can be treated as serious. In any case, there is no real political appetite for a common currency.

The largest SAARC country, India, would consider ceding monetary autonomy to a regional SAARC central bank only if India effectively controlled that institution's policies. Under those conditions the smaller SAARC nations are hardly likely to sign on for a common currency.

To sum up, there are compelling economic and political reasons against a common currency for SAARC. It's an idea whose time has not yet come … and quite possibly, never will.

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

Bottom line: Standing behind the euro project is enormous political will, and a great deal of "gold power".

Watch, and you will see.


USAGOLD Daily Market ReportPage Update!#1239418/23/04; 13:40:51">
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.

----closing market excerpts-----

Gold futures eased Monday to close back under $413 an ounce, pressured by strength in the U.S. dollar.

Gold for December delivery fell $2.70 to close at $412.80 an ounce on the New York Mercantile Exchange.

On Friday, it closed at $415.50, the highest since April 13, having climbed $9 over the prior two sessions. For now, "gold and silver are overbought short-term and a period of consolidation can be expected," said Peter Grandich, editor of The Grandich Letter...

The dollar was slightly higher against the yen and the euro ... Strength in the greenback took away some investment demand for gold, which is often used as a hedge against losses in the broader market.

"Gold looks to be consolidating the strong gains from last week," said Charlie Nedoss, an analyst at Peak Trading Group. But "the gold market is starting to look past dollar strength and focus on the inflationary implications of $45 to $50 crude," he said, adding that "higher-priced crude is here to stay for some time, and that will eventually have an inflationary impact on many market sectors."...

----(see url for access to full news, 24-hr int'l newswire)----

SovereignMr. Ned#1239428/23/04; 14:26:44

Re msg. #123920

Mr. Ned,

I think you're right. Listen to the deafening silence pregnant with their disdain for truth and reason, accompanied with a token attempt or two at killing the messenger without presenting any counter arguments. The self-contradictory and arrogant attitude you speak of is basically what I wanted to expose for the world to see by posting in this forum. And perhaps embolden, along the way, those few good men so that they would speak up, if ever they existed. Experiment over, job done. I have no further reason to post here for the time being.

Thank you for responding. I congratulate you for having the courage to think for yourself, Mr. Ned.


Survivor@ Sovereign#1239438/23/04; 15:31:46

As one who has lived both within and outside the USA, I have few issues with the content of your posts - even when they tend toward the inflammatory.

But, I echo the sentiments of another poster when I say that you are essentially "preaching to the choir" here. A good many of us at this round table already subscibe to ideas that are the same or in many ways similar to the thoughts expressed by yourself and Ned.

Thanks for stopping by.

- Survivor

masTC - Your "Gold off slightly in dollars, up in euro"#1239448/23/04; 16:18:26

If you could it would be appreciated. TQ
Smeagol...while foreign gold ssits...#1239458/23/04; 16:19:07

Ssirs OvS and 968,

We thinks you have ssomething to think about there... sss... we wonders how many loans might have been made on that Gold ssitting in U.S. vaults... that Gold which belongs to ssomeone else... after all, is it not the ssame thing the blacksmiths did in the good old days, yess? No one has come to withdraw It in a long time... if and when those nations call for It, there could indeed be fireworks, and not the kind Gandalf makes!


SmeagolSovereign#1239468/23/04; 17:05:23

[There are many inside and outside America who see what's 'wrong' with America, but most don't know why. American public schools de-emphasize the Founding principles. The Republic ("It's a Republic, if you can keep it.") which was their heritage has been slowly overlaid over generations by democracy, a bane of individual freedom and one step closer to tyranny. The cancerous extension of government powers, social programs, welfare, decades of decadence, fiat/easy money, a narcotising standard of living, and the bending back and forth of the economy like a piece of metal by Federal Reserve policy have resulted in an America which is become brittle and treacherous. The Founders would rout slots in their graves if they could see what America has devolved to today. Most Americans have been rendered ignorant, thus powerless, to do much about the situation. That's what it's about, after all - control.

The Republic remains as long as there is a Constitution, but that is a mere technicality nowadays; there are few if any living in that house. I for one hope for a return to that original Republic, but my heart misgives me; I fear the worst ahead. I put my trust in God, family, friends, gold and the land that is the country, not the government. "The trash heaps of history are piled high with governments, not countries."

Sovereign, thanks for stirring the pot. There are many here and elsewhwere doing what we can in each of our small ways to try to fix the mess; in the end whether we do or not won't matter as much as the fact that we did all that we could with what we were given.]


slingshotSir Smeagol#1239478/23/04; 17:15:23


Chris PowellImportant reports from Golden Sextant's Reg How and Bob Landis#12394808/23/04; 22:04:14

How the fiat system was saved once but
won't be again, and how Argentina has
figured it out. ... With an introduction
from 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.

968US Treasury wants to identify issue holders#12394908/24/04; 01:18:03

SNIP : Such summonses are usually issued when dealing in a particular security in the repo, or lending, market has become unusually tight. "It's their way of letting the market know they're paying attention and telling it not to misbehave," said John Roberts, head of government trading at Barclays Capital in New York.
"Conditions in the US repo market, where participants can borrow securities for short-selling and other uses, have become a concern because of a growing number of "fails", where the securities in question are not lent or returned in spite of a repo agreement."
A clear sign to the major goverment bond holders/buyers : "Don't stop buying or..."

Dollar Bill.,.#12395008/24/04; 02:33:36

Aristotle, The link gets my vote for best reason to own gold.
Second best reason for me is, I think the effort to maintain the fiat system by moving to a one world order will not succeed on its first try.
You asked if I thought the motives were neccessarily "sinister". Good question.
The motives of the US men moving the US in the direction of globalization had to be at least mostly self interest I suppose. In order to be willing to give up manufactureing to China, the hoped for payoff must have been greater than the loss.
Or, we are in the hands of idiots.
I guess having the power to run deficeits was just too valuable to give up, and if it takes moving to a one world model for the US to continue living in debt, so be it.

Certainly part of the evolution of the last centuries money game could be said to be the US reaction to the communist tyranny threat.
Not fair to ignore that factor in the past behaviour of US money management. Or, if I want to see things as realistically as I can, I cannot exclude what were actually big factors in some of the big decisions. I didnt mention all the big factors of course, but I am just saying I see plenty of reasons to say "sinister" was not always the motive.
I guess the sinister parts come from our basic nature of design. Our human nature will not allow us to get ourselves together in some cooperative beehive or anthill like monetary arrangement amongst ourselves.

There is that complex god we have here, and when we go to make decisions, we always end up choosing (if we are lucky) the lesser of two flawed options.

So, I would have to land on the notion that the motive to move to globalization was not sinister, but its results and implementation are loaded with bad results that make it seem
I think the bad results outweigh the long term good, so we will fail. The Avian bird/pig/soon to be human also/flu,
will thin our ranks, and the big shocker will be the realization that outsourceing your food suppy into the big global marketplace, leaves you without a local food producing industry (in the US) and we will see the folly of moving America away from what it was, a place where when you ran into downturns and depressions, you always had a lot of local farms and homes with gardens.
NOW, being way out on a limb like we are, because we ate at the table of fiat and debt for so long, we have built a nation that is way way way out on a limb. When the fiat/dollar/deficeit system runs into trouble, the adjustment will be brutal. And swift.
And THEN, the positives of our debt game will seem like albatrosses around our necks because we designed our whole society blindly assumeing that the john law game we are playing would have no end.
Then it will look like we were put out on a limb by a sinister plan.
And gold will look sensible again.
Just guessing.

Dollar Bill.,.#12395108/24/04; 03:06:10

Imagine Boston. Just one city. That city cannot -adjust-
to any -adjustment- in the monetary order.
Either greenspan and all the other parties involved keep making fiat debt system money flowing in incredible and in increaseing amounts, or WHAT?!
There IS no back up plan.
I have talked to a few guys who lived in the nineteen twenties and thirties during the last year.
Guys were considered -jacks of all trades-- I heard that from
EACH one of the old guys I talked to.
And, family farms were everywhere, because, well, it was needed, and also, they knew troubled times always come.
WE no longer have that very sensible understanding anymore. And we have made our world completely wrong.
All the fiat, all the building, all the energy, just to make something that cannot face troubled times.

We gave up the gold system, yes it was flawed, but the present fiat structure, has to collapse, should collapse, and although I dont want to see it, and it will be terrible,
to continue down the road we are on, I think, is a bigger source of worse problems.
So, my guess is that the avain bird/pig/human flu will be that hammer that stops us humans in our -infinite debt- tracks.
Probably fiat will remain, but, it will be a changed world.
God wont let it happen? Complex god that he is, why would the humans get to continue to use infinite debt to sustain the march that is wrecking the planet?
The flu should have another name, --the revenge of the other life forms--.
What man has created, man will destroy, what god has created god will protect.
That is from the bible somwhere, either globalization runs into a big stick, or the plants and animals are in serious trouble. just guessing.

968@ ge msg#: 123935#12395208/24/04; 03:38:39

Does "taking delivery" mean that you take physical delivery of a paper gold commitment but it stays somewhere around the globe in a vault or the physical is delivered in my country ? That's a hell of a difference !
The Invisible HandThe Trigger?#12395308/24/04; 04:48:09

Chris Powell (08/23/04; 22:04:14MT - msg#: 123948) said
How the fiat system was saved once but won't be again, and how Argentina has figured it out. ...

Could this be trigger? Or is the Philippines not a country of the "rank" of Argentina?

From today's (this afternoon Philippine time) The Philippine Daily Inquirer:
MALACA--ANG [the Palace of the President of the Philippines] vowed on Tuesday that it would not miss debt payments even as President Gloria Macapagal-Arroyo admitted that the country was in the midst of a "fiscal crisis"

968@ Kev#12395508/24/04; 08:46:10

Great link ! Thanks !
ge968 msg#: 123952#12395608/24/04; 09:31:38

Frankly, I do not know. A rumour circulating at this forum mentioned Chinese storing gold only on Chinese soil.
USAGOLD / Centennial Precious Metals, Inc.Round out your portfolio with style#12395708/24/04; 09:58:54

Hamburg Gold

 August Buyers' Group

The Hamburg Germany 20 Mark


This exceptional coin speaks for itself.
If you don't believe lions can fly,
you should see these kitties leaving our vault.

We've tossed in some volume incentives...
just because we like you so darn much.

The Invisible HandOops! I should read my news alerts before posting them#12395908/24/04; 10:20:35

I didn't see it was an ad.
May my post be pulled.
Please accept my apologies.

Chris PowellSprott Asset Management study finds that gold market is manipulated#12396008/24/04; 11:08:14

Sprott Asset Management of Toronto, whose
chief investment strategist is John Embry,
issues a major study concluding that the
gold market is manipulated.

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.

Great Albino BatLOOKING AT GOLD ACTION TODAY....#12396108/24/04; 11:19:41

Just looking at the graph showing gold action today, conveys the clear idea that the situation is truly desperate in the gold market - desperate for those who do not want to see the price rise.

When countries are about to devalue seriously - I speak from personal experience - their governments will vow that there will be no devaluation. That is the clearest sign that there WILL be a devaluation!

Selling gold recklessly, as we are seeing, is a desperate attempt to avoid devaluation of the dollar in terms of gold, the true international money. As an example, in 1992, Britain VOWED there would be no devaluation of the Pound. I didn't believe it, and neither did Soros, who made a bundle. Britain poured dollar reserves into the market, to defend the Pound. All it achieved, was a huge loss, which Soros collected.

This is what is now going on with gold. Gold is going up, and the dollar will be devalued in terms of gold. Count on it!


TownCrierMarket breezes#12396208/24/04; 11:40:06

HEADLINE: Early profit-taking hits COMEX gold, oil pivotal

[Tuesday August 24, 10:10 am ET]
NEW YORK, Aug 24 (Reuters) - COMEX gold fell Tuesday morning as lower oil prices and a firmer dollar let more air out of last week's advance to four-month highs.

Dealers said the volatile energy markets were a bigger influence on precious metals this week than the dollar, which has been the main focus for gold traders throughout the year.

Profit-taking has been the game since gold on Friday culminated a $22 one-week rally at $416.80. That was its highest price since April 13, when it was falling from 15-year highs set early that month.

"It's all in the oil," said Frank Aburto, a bullion trader at F.C. Stone.

Dealers said gold could fall to $406 or $405, especially if NYMEX crude drops back below $45 a barrel and alleviates worry about the inflationary economic effect from higher oil prices. On Friday, oil hit a record price just below $50 a barrel.

"The crude is coming off. The euro is coming off. So you have all these factors kind of putting a little pressure on the market," said a gold floor broker.

Yet the appeal of gold as a safe-haven remains before the Republican national convention opens in New York City next week.


HEADLINE: FOREX-Dollar climbs on more position-squaring

[Tuesday August 24, 12:50 pm ET]
NEW YORK, Aug 24 (Reuters) - The dollar was mostly stronger across the board on Tuesday as dealers pared back bets against the currency in predominantly technical trading.

The gains, particularly against sterling, which slumped to a new three-month low, follow relatively hawkish remarks from Federal Reserve officials on Monday suggesting U.S. interest rates will be raised again next month.

Upbeat comments on the U.S. economy from Dallas Fed President Robert McTeer and Fed Governor Ben Bernanke bolstered the greenback across the board.

Although the prospect of rising U.S. rates is generally deemed positive for the dollar, the currency's gains this week do not signify an underlying market shift, analysts said, and technical factors and positioning remain the driving forces.

"I think the story today, just like yesterday, is position squaring," said Rebecca Patterson, global currency strategist at JP Morgan in New York. And ahead of the Republican National Convention in New York and next week's release of the U.S. employment report for August, "the bias of risk is that people square up a little more," Patterson said.

Dealers, who are still thought to be short of dollars, are adopting a more neutral stance ahead of U.S. durable goods data on Wednesday and a keenly awaited speech from Federal Reserve Chairman Alan Greenspan on Friday.

"This is not fundamental buying," said a senior dealer at a large U.S. bank in New York. "This is definitely position squaring ... and the pain is in the high yielders."


Just another day of trading details among the making of a much bigger picture.


TownCrierGeneral Electric Co. -- a maker of electrical goods, or a bank?#12396308/24/04; 12:03:42

HEADLINE: GE plans big emerging mkts banking expansion - WSJ

NEW YORK, Aug 24 (Reuters) - General Electric Co. plans a big expansion of its retail banking business in emerging European and Asian markets, becoming a more formidable rival for Citigroup Inc., the Wall Street Journal said on Tuesday.

GE, based in Fairfield, Connecticut, has a big presence in U.S. credit cards and European consumer lending. But now it wants to offer basic products in developing countries such as checking and savings accounts, the newspaper said.

Retail banking is another "weapon to compete with", David Nissen, chief executive of GE Consumer Finance, told the newspaper.

...GE said its consumer finance unit last year earned $2.16 billion on revenue of $12.8 billion. Among GE's other businesses, only power systems and commercial finance were more profitable, while aircraft engines and insurance were nearly as profitable, the company said. Total profit was $15 billion.

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

Money being largely electrical blips within a computer spreadsheet, perhaps GE has found banking to be a natural extention of its market niche.

Corporate evolution. Exporting services if a competitive edge in production is being lost.

Choose gold. Financial companies try to fake it, but at the end of the day there's no substituting for the real thing.


DruidDebt-hit Argentina snubs IMF #12396408/24/04; 12:03:46

BUENOS AIRES: With an IMF loan elusive, Argentina plans to go it alone without the fund's aid as the government tries to seal a huge debt write-off this year with creditors, economists and local media said.

The new stance, announced by Economy Minister Roberto Lavagna to a meeting of economists on Thursday night, appeared to herald a government offensive against the International Monetary Fund and could threaten the global lending agency's $13 billion economic lifeline to Argentina.

Lavagna told economists that the government this year would ignore the IMF's quarterly revisions of its economic program.

The IMF has already delayed a $728 million loan because of a deadlock in its third review of economic reforms.

Instead, the minister said the government would focus on winning a huge write-off on its $100 billion defaulted debt with private creditors, key to reinserting Argentina into world markets after its record sovereign debt default in 2002.

"Now the priority is the debt offer, keeping on schedule.


Druid: Sucker punching the IMF.....

DruidArgentina spurs hopes of other buyers of bullion#12396508/24/04; 12:08:29

LONDON—Argentina's purchase of gold this year — a positive signal for prices — has set off a hunt for more countries bucking a central bank trend to run down bullion reserves, analysts said yesterday.

The World Gold Council, an industry group, said yesterday that IMF data showed Argentina had bought 42 tonnes of gold in the first half of this year, and that there might be an argument for cash-rich Asian central banks to secure bullion.

Argentina's central bank confirmed that it bought the gold in its strategy to diversify reserves after the end of the peso's one-to-one peg against the U.S. dollar in early 2002.

A central bank official said on condition of anonymity that it had not yet decided if it would accumulate more gold.

"This is a step in the right direction, but it's not a giant leap," HSBC analyst Alan Williamson said.

"The problem is that this is one relatively small central bank buying, albeit a significant amount. For it to be bullish we would need to see more than one central bank buying."


Druid:...and then kicking in them in the arse. The line might just be forming up, you know the drill as Ari and many others here say.

Socrates964OvS/968 - EUROGOLD#12396608/24/04; 12:40:51
Socrates964Coda#12396708/24/04; 12:58:59

OOps, hit the button too soon.

Anyway, may I confirm that 968 and I are different posters, although his/her posts stand on their own merits.

The previous link details GATA's investigation of the Banca D'Italia's accounts. They don't come up with very much beyond confirming that some of BoI's gold is paper gold, but this is something, so presumably they're on the hook too. It seems that only the French actually have their gold under their own mattress, or am I wrong about that too?

TownCrierTreasuries skid#12396808/24/04; 13:31:45

HEADLINE: U.S. Treasury Notes Fall for a 3rd Day as Oil Extends Decline

Aug. 24 (Bloomberg) -- The benchmark 10-year U.S. Treasury note fell for a third day, its longest slump in a month, as declines in oil prices cooled speculation record high energy prices will slow economic growth.

Demand for government debt also weakened after Federal Reserve Governor Ben Bernanke said in a television interview late yesterday on PBS' Nightly Business Report that a 46 percent surge in oil prices the past year "won't derail what looks like a self- sustaining expansion at this point."

At 12 p.m. in New York the 4 1/4 percent note maturing in August 2014 fell more than 1/8, or $1.25 per $1,000 face amount, to 99 9/16, according to bond broker Cantor Fitzgerald LP. Its yield rose 2 basis points, or 0.02 percentage point, to 4.30 percent.

Oil prices adjusted for inflation aren't high by historical standards, said [Dallas Fed president] McTeer, who doesn't vote on monetary policy this year.

...Nick Stamenkovic, a fixed-income strategist in Edinburgh, Scotland, at Ralph Institutional Advisers Ltd., an institutional bond broker. "The perception has been that as oil rises, it acts as a dampener on growth, keeping the Fed on the sidelines. If oil continues to drop, bonds will come under more pressure."

"I'm going to be a more bond-negative person as long as oil continues to erode somewhat," said John Spinello, a government bond strategist in New York at Merrill Lynch & Co.

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

They're telling us the strength of U.S. bonds requires high/higher oil prices?

Trying to sort this out, they're effectively saying that if a dollar is only able to buy less and less (as oil prices rise), then the long-term holders of dollars -- in the form of bonds -- will be willing to simply hold on, watching the loss of purchasing power, and thus settling for low yields??

It's a topsy-turvy world.

Time to choose gold instead.


USAGOLD Daily Market ReportPage Update!#12396908/24/04; 14:21:16">
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.

---- closing market rap -----

COMEX gold tumbled on Tuesday, as drooping oil prices and a rebounding dollar gave speculators incentive to sell out of long positions after last week's rally to four-month highs. Dealers said the volatile energy markets were a bigger influence on precious metals this week than the dollar, which has been the main focus for gold traders throughout the year.

December gold settled down $7.80 at $405.00 an ounce, trading from $412.60 to $404.60.

Profit-taking has been the game since gold on Friday culminated a $22 one-week rally at $416.80. That was its highest price since April 13, when it was falling from 15-year highs set early that month. NYMEX crude was down 2.5 percent on Tuesday, at $44.90 a barrel. On Friday oil futures hit a record price near $50.

"The crude is coming off. The euro is coming off. So you have all these factors kind of putting a little pressure on the market." Still, gold holds safe-haven appeal before the Republican national convention opens in New York City next week. The nation is on heightened terror alert before the November elections. Financial markets are also defensive before the third anniversary of the Sept 11, 2001, attacks on the World Trade Center and Pentagon...

----(see url for access to full news, plus 24-hr newswire)----

Federal_ReservesShow me the money.#12397008/24/04; 15:13:01

U.S. Company Pension Plans May Need Taxpayer Rescue, Study

Aug. 24 (Bloomberg) -- A $350 billion pension shortfall among U.S. companies may force the federal agency that insures retirement plans to seek a taxpayer bailout similar to the one during the savings and loan crisis, according to the Cato Institute, a Washington-based policy research group.

The federal agency, the Pension Benefit Guaranty Corp. had a record deficit of $11.2 billion last year after taking over plans for 152 companies such as Bethlehem Steel Corp. and US Airways Group Inc. Without changes to funding and premium rules, the PBGC's deficit is likely to swell to $18 billion in the next 10 years, and may reach more than $50 billion, said Richard A. Ippolito, chief economist at Cato.

``If exposures create claims that reach catastrophic levels, taxpayers will be called upon to provide a bailout,'' Ippolito said.

Great Albino BatThe Gold Market is OPEN...#12397108/24/04; 15:17:09

And the sharks are in the water. Will the Great White continue with his ravages of the gold price? Or will he wait until tomorrow to continue eating the (paper) gold investors (speculators)?

At any price, GOLD is the best - perhaps the only true- investment. But buy the dips, if that makes you happier.
Only PHYSICAL is beyond the reach of the Great White!


goldbarontest#12397208/24/04; 15:21:15

misetichReality Check: U.S. Construction Executives Say Q3 Still Sluggish Aug 24 / 10:52 EDT#12397308/24/04; 15:46:22


NEW YORK (MktNews) - Non-residential construction activity remains sluggish this summer, having gotten no push from the robust economic rebound earlier in 2004 -- with projects now held back by renewed economic and political uncertainty, say industry officials.

Fast-rising building materials costs may also have postponed the long-anticipated recovery, although that problem appears to be more manageable than it had been in prior months.

Architectural billings were down in July for the first time since late 2003, suggesting the possibility of further contraction ahead for this industry, they say.

Non-residential construction has been weak for several years- reflecting the US economy - due to an overabundant glut of non-residential real estate

Retail Sales continued their downward spiral as confirmed by the RedBook Sales and Wal-Mart warning of slower sales ahead

Il Maestro says, Global economies growth is strengthening ( must be reading the wrong reports, as the US, EU, and Japan all reported LOWER growth in the 2nd Qtr and the same pace or worse is on tap for the 3rd Qtr)

The 2004 Oil Shock And Awe is steam rolling ahead, and its effects are being underestimated by the markets.

All Aboard The Gold Bull Express - Part ll

misetichOil Won't Derail U.S. Expansion -Bernanke#12397408/24/04; 16:00:43


WASHINGTON (Reuters) - Rising oil prices will weigh on U.S. economic growth, but the increases seen so far will not derail the expansion and need not fuel a troubling inflation, Federal Reserve (news - web sites) Board Governor Ben Bernanke said on Monday.
"There's going to be a little bit of a slowdown effect ... but at the current levels, anyway, I think it won't derail what looks like a self-sustaining expansion at this point,"
"I think the risks are balanced ... and that therefore our policy seems to me to be quite appropriate," he said
"If inflation is low and stable and people believe it will be low and stable, an increase in oil prices will create, of course, a transitory burst in inflation," Bernanke said. "But as long as it doesn't get embedded into wage demands and prices, it won't necessarily create a longer-term increase in inflation."

"I think that the Fed has some scope to respond to the weakening of the economy associated with an oil price increase so long as we are confident that inflation will remain stable, that there will not be second-round effects that will endanger price stability," he added.
Bernanke, however, said it appeared that consumer spending was already gaining altitude. "Most of the evidence we have suggests it has picked up fairly considerably ... and that's going to support growth going forward," he said.

Bernanke, just like Greenspan must be reading the wrong reports - as consumer spending is declining

The Feds are not concerned for "price inflation" unless it shows up in wages

...and rest assured that by that definition, "price inflation" will not be a worry for the immediate future as JOBS ARE SCARCE

The US's economy malaise is lack of JOB CREATION and thus becoming more dependent on the goodwill of foreigners to keep on lending

The Feds must be sweating out the oncoming ASSET DEFLATION as consumer spending will decline further and corporate earnings will decelerate

All Aboard The Gold Bull Express - Part ll

misetichGlobal: The Funding of America - S. Roach#12397508/24/04; 16:08:25


With the United States pushing the envelope on macro imbalances, the funding of its "twin deficits" -- budget and trade -- has taken on great importance in shaping world financial markets. In the end, these deficits matter only if they have consequences for asset prices and/or the real economy.
Can this continue?
Shifts in the mix of foreign inflows between private and official sources is key to understanding the financing of America's external deficits. Typically, private investors account for the bulk of foreign purchases of US securities. Over the 1985 to 2003 period, the private share of total net inflows averaged 86% -- putting the official-share norm at 14%. The motives of these two classes of investors is, of course, very different. The private sector seeks return, whereas official flows are often driven by policy considerations -- especially those that bear on foreign exchange rates. If a nation wishes to prevent its currency from rising (or falling) against the dollar, it will use official purchases (or sales) of dollar-denominated assets to compensate for any countervailing swings from private investors.

Which takes us to the heart of the matter in today's US-deficit-financed world. The disparity between the world's current account deficits (mainly in the US) and surpluses (mainly in Asia) has never been greater. By IMF estimates, that spread is currently the equivalent of 2.3% of world GDP -- double the gap of 10 years ago.
The bottom line in all this is that the external funding of a saving-short US economy is on exceedingly shaky ground. While foreign demand for dollar-based securities moved back to its recent trend in June, that hardly eases the burden of America's massive financing imperatives. Meanwhile, with the US trade deficit exploding and the current account gap likely to keep widening, there is nothing stable about America's dependence on the "kindness of strangers." The day will inevitably come when foreign investors -- already heavily exposed to dollars -- will reassess risk-adjusted return expectations of US securities. That's what happened in the fall of 1987, and there are increasingly worrisome signs of a replay of that same ominous chain of events.

Mr. Roach asks: Can this continue?

Doubt it as the VELOCITY has increased - and will be further accelerate in months and years ahead since it is a structural problem

All Aboard The Gold Bull Express - Part ll

misetichHow Long Will Foreign Central Banks Keep Financing Our Treasury Deficit?#12397608/24/04; 16:28:34


In the three weeks ended August 18, holdings of U.S. government and agency securities by foreign official accounts (mostly foreign central banks) in custody accounts at the New York Fed increased by $34.7 billion. In the 52 weeks ended August 18, these custody holdings increased $328.3 billion (see Chart 1).
Primarily, Asian central banks have been the buyers of these securities. Why have these Asian foreign central banks gone out of their way to mightily help finance our federal and
current account deficits? Is it a vote of confidence in the management of the U.S. economy? Hardly.
These Asian central banks have become the marginal buyers, or de facto buyers of last resort, of excess U.S. dollar balances in the global economy. If these Asian foreign central banks had not purchased these greenbacks and recycled them into U.S. government and agency securities, the dollar would be lower in value vs. their currencies and U.S. interest rates would be higher. The reason Asian central banks have been willing to help us out is that they have perceived that their economies would suffer if the dollar were to sink too rapidly in that their exports would be adversely affected.
Is there something that could diminish the willingness of foreign central banks to keep supporting the dollar and our government bond market? You bet – inflation. As shown in Chart 2, after several years of declining wholesale prices, those prices are now advancing at a 1.6% annual rate in Japan.
Although Japanese consumer prices still are falling, the rate of decline has slowed. It is only a question of time before rising Japanese wholesale prices morph into rising Japanese consumer prices. A rising yen against the dollar would temper the rise in Japanese wholesale prices, especially rising crude oil prices in yen terms. My bet is that by midyear 2005, the Bank of Japan will have lost
its appetite for dollar and U.S. government securities. At that point, the dollar is likely to take a dive
and so, too, will U.S. Treasury prices.

ANOTHER fine piece by Mr. Kasriel, who like Mr. Roach has had a tremendous record in the last several years - out doing WallStreet and the Feds by a wide margin

All Aboard The Gold Bull Express - Part ll

BoilermakerGlobal Warming vs. Global Fiat Meltdown#12397708/24/04; 17:15:29

Here's a scary thought on what catches the interest of the pols, the media and quite a few folks around the world. That is, global warming, a gradual warming trend due to too much hydrocarbon fuel being combusted, is given a high profile in the media and in political and economic debate. It is a theory with dubious merit but if true it will be many years in the offing.

On the other hand, the very likely and near term meltdown of the world's reserve currency seems only to be debated on obscure websites by mostly anonomous posters like us. If we were mainstream Joe & Jane sixpacks we would be loading up on dry ice to cool our beer. The denizens at this forum are loading up with gold and silver. We are the creme de la creme of doomsdayers

Sovereign came on a bit strong with a diatribe worthy of a bitter loser. I appreciate his assessment of the ills of the USA but it seems that the rest of the world has been complicit in the game.

Keep your gold but consider some dry ice too (unless you drink warm beer).

tau@OvS #123931 German gold in the US#12397808/24/04; 18:15:13

I think the question of Germany and other EU members having access to their gold must be a crucial one for anyone who anticipates a financial crisis. I hope this discussion will continue. Here is a recent article (in German) about the German gold reserves:
There, a member of the Bundesbank board is quoted (indirect speech) with the following statements:
"Because of the high cost of transport and vault construction, the Bundesbank refuses to move the gold bars to Germany."
"He rebuffed rumours of the Bundesbank being unable to dispose of its gold or the gold reserves not being in the vaults anymore."

Quite interesting to read this in a mainstream magazine!

Chris PowellSprott drops a bomb on the bad guys in the gold market#12397908/24/04; 18:30:30

Sprott Asset Management's report confirming
manipulation of the price of gold explodes over
the gold 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.

wileyWhat inflation????#12398008/24/04; 18:32:03

Sorry for being off topic, but I gotta share this.

Today, while searching the file box for my birth certificate, I came across an envelope containing my wife's birth certificate as well as a paid receipt for her hospital birth---it read---

Hospital 11/22/42 to 12/2/42 $40.00
Medicine 1.15
Total $41.15

PAID (she's worth it at twice the price)

CaradocTwo Russian airliners, etc.#12398108/24/04; 18:55:24

Reports are that one exploded at 10:56 local time and a second one from the same airport disappeared off the radar screens four minutes later, the same time as a fire appeared on the ground below. Timing seems a bit early for attempting to influence the election coming up in Chechnea on Sunday.

Hard to say whether such incidents will add up to the "trigger" for gold, Sprott's 71 pages of dispassionate logic and evidence helps cock the trigger.


OvStau, 968 & Socrates 964#12398208/24/04; 19:29:57

First, my appologies to 968 & 964.
It is interesting to note that al-
most exactly half of the New York
Reserve gold belongs to Germany.To
say that the cost of transportation
and construction of safes in Germany
are too high sounds almost absurd
when a national treasure is involved.
It seems that politicians in Germany
are pressured to sell this New York
and London gold; it would be a Potter
-one-upsmanship-coup. If the gold is
"loaned out" to jewelry makers or
cousins, it is gone. If it is still
there, voila, pay with instant push-
button greenbacks.
Perhaps, Germany should consider this
gold, repayment for the Marshall plan.
I have a curious idea of how Germany
could use this situation to its advan-
tage, but why should I help Germany?
Cheers. OvS

TopazOil, Bonds, Dollar.#12398308/24/04; 23:49:52

Last week I made the observation that any weakening of Bond Yield would be exponentially reflected in DX as a reflection of higher Oil prices.
As can be seen in the Charts this is indeed the case. These markets are now poised on a knife-edge and a resumption in upward movement in PoO will set the Cat amongst the Pigeons well and truly imo.


I have finished reading this brilliant report which seems to have caused quite a flurry especially around the Gold Sites. Around the Gold Sites the manipulation is & has been WELL KNOWN. The fact that a couple of mainstream
rags have also briefly visited it should leave no room for congratulations. No point talking ALL the time to the already converted.

If GATA is anyway near serious they will immediately use this out of the blue GIFT & start running a few PAID for ads.Highlight the storyline & point to where the public should go to read the report for themselves.It needn't cost an arm or leg & NOW is the time to ask for financial contributions for just such a campaign.

WaveriderOil and Stagflation#1239858/25/04; 07:10:08

"I am not an expert on the price of oil. But many who claim to be have been saying for months that its price should drop back below $25 or $30 per barrel. Meanwhile, the actual price has risen steadily to nearly $50 per barrel as this Outlook goes to press. At this level (nearly double last year's price), oil has become a major factor in the outlook for the global economy--too important to be left to the experts. With some help from knowledgeable people in the business of producing oil, I have tried to determine why the price keeps rising, where it is likely to go in the future, and what the consequences will be for growth and inflation in the United States and elsewhere."

Waverider: This is an excellent analysis of the POO, interest rates and stagflation (we're heard it here before from Black Blade) - contrast the reality to Bernanke's address yesterday. The one weakness I find with this article is that he gives too much credence to the oil industry's ability to increase supply in the future and doesn't address the issues of Hubbert's peak.

KnallgoldArgentina#1239868/25/04; 08:49:24

One sentence from Druids link yesterday is especially revealing:

"Argentina's central bank confirmed that it bought the gold in its strategy to diversify reserves after the end of the peso's one-to-one peg against the U.S. dollar in early 2002."

Its like saying "now that the $ isn't the standard anymore,we need Another anchor".

KnallgoldECB Gold#1239878/25/04; 09:23:16

"How can the Euro be a rival to the dollar if the gold that has to back it stays in the US ? "---968

Yes,968,how free is this Gold?
"He who has the Gold makes the rules".If it says HAS,it MEANS has (physically).The euro would be close to a bluff,inclusive Freegold (I'm associating Freegold also with honesty,open and integer reporting )

The euro guys (incl. Suisse) should make this clear once and for all:Where is their Gold?If they don't,we will have to assume they can't tell because of reasons poster JacobMarley has hinted.More hidden games against the USA and behind-the- scenes stuff would be the result.And the no-audit of FortKnox would appear in another light.Or,are they all the same pack doing a smoke and mirror show for public consumption (euro-$ fight a farce?

mikal@Knallgold, 968#12398808/25/04; 11:25:01

I understand that the ECB holds it's gold in Europe under custodianship for each member country, in a major city there.
While the Euro member countries each retain additional gold, stored in one or more locations (including NY, their own capitals, Switzerland and others).

CytekEmbry getting a lot of press on the report#12398908/25/04; 11:28:43 ry/Business/

In search of a golden fleece

Globe and Mail Update

There are plenty of conspiracy theories out there, from the Kennedy fetishists with their homemade copies of the Zapruder film to the Area 51 geeks with their tales of alien technology kept under wraps by NASA. In the financial arena, the most popular by far is the idea that central banks, the International Monetary Fund, bullion banks and even the Federal Reserve Board are in cahoots to suppress the price of gold.

But is this just a wacky theory promoted by gold bugs and Internet kooks with too much time on their hands, or is there more to it than that? Sprott Securities market strategist John Embry believes the latter — that despite the loony-sounding ideas of some conspiracy advocates, there is a core of truth to their claims that gold is being "managed" by central banks and other financial institutions. He laid out those arguments in a recent 66-page research report.

In effect, Mr. Embry says that while he doesn't like the term "conspiracy," he believes there is some evidence that various central banks, including the U.S. Federal Reserve, have acted in concert with the International Monetary Fund and others — even the U.S. government itself — to keep the price of gold depressed. This, Mr. Embry says, has taken advantage of "unsuspecting investors labouring under the illusion that gold is indeed a free market."

mikal@Cytek#12399008/25/04; 11:56:55

Good catch.
Chris Powell's version of Greenspan's central bank
comments exposes sloppy, irresponsible journalism
at the newsdesks of G & M:
GATA- Globe and Mail comments on Sprott report on gold price suppression
11:38a ET Wednesday, August 25, 2004
Dear Friend of GATA and Gold:
The Globe and Mail in Toronto has taken long note of the Sprott Asset Management study of
manipulation of the gold price -- a column by business writer Mathew Ingram, which is appended.
It is valuable for calling attention to the report, but it misrepresents Federal Reserve Chairman Alan Greenspan's comment to Congress about central bank gold sales. Greenspan did not say that his comment was taken out of context; he said that OTHER central banks, not his own, were ready to lend gold in increasing quantities should the price rise. When he was asked by a U.S. senator, at GATA's request, exactly how he knew of the readiness of other central banks to lend gold to keep the price down, Greenspan replied that he knew by
That is, Greenspan's comments, spoken and written, were actually CONFIRMATION of
central bank collusion against the gold price. Greenspan can see this collusion and even acknowledge it in public, even if it still confuses the Globe and Mail.
But the Globe and Mail isn't alone in such obtuseness. After all, the central banks put out press releases and hold press conferences to discuss their collective efforts in regard to gold, and still when GATA notes the
collectiveness of this public action, the mainstream financial press ridicules what it calls conspiracy theorists.
That central banks are acting collectively in regard to gold is simply public record. The only question is how far that collective action goes. Maybe someday the Globe and Mail will pick up the phone and call a central bank to ask about it. That would be called
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

USAGOLD / Centennial Precious Metals, Inc.A risk-free request, helping you enter the gold market with grace and confidence.#12399108/25/04; 12:10:37">Get a head start on the gold market!
CytekHere's what otions traders are saying about Gold Expiry#12399208/25/04; 13:00:44

If you have a look at the NYMEX website you will see a surprising set of data for September 2004, there are options at strikes ranging from 380 to 440 that total 39,700 contracts. The actual open interest in this delivery is only 21 contracts. In other words, there will need to be some short selling in that contract to take place unless gold drops below 385 by expiry. There is one more day to expiry. And Gold closed at 408.
We have the makings of a post-expiry short squeeze of noticable proportions if the buyers continue to support the market into Friday. As of Tuesday the total of in the money options is 10,494. These are naked shorts folks, if whomever sold those contracts cant break the front month down by selling in December, then they are going to be forced to purchase 1mm oz on the spot market or have their CB buddies pony up about 16 tonnes of gold for this expiry.

The shorts may have created some real problems here because I don't see any easy way out of being forced to either deliver 1mm oz of gold or buy it on the spot. Now who has 1mm oz of gold just laying around for delivery right now? The COMEX depositories currently list 3.5mm oz registered so this represents a third of the COMEX stock. That's pretty risky. If gold manages to run higher, i.e. jump back to 410 in the next couple of days, the total rises another 1942 contracts. If it can crack $420 by Thursday, there is another 10,221 contracts or 1mm oz.
We have seen the hedge funds go after the shorts in the past with success i.e. Dec 2002 and Sep/Dec 2003. Lately though, the hedgies/spec longs have been slapped down.

However, with oil easing from it's highs, there is room for profit taking there and hedge funds could easily shift money from oil to gold and catch the gold commercial shorts without the ability to pour it on in the next couple of days.But is oil takes off again Thursday things could get very interesting. If we get past this expiry with gold over 420, we could see a huge spike in spot which might be sustained through the end of the year because there are lots of options and contracts sold for the October and December months as well.

I don't know how it will play out but the watchword is volatile.

TownCrierThank you, mas, for expressing a further interest in Monday's topic.#12399308/25/04; 14:22:40

Here at the 'GoldenChalkboard' you will find the charts I cobbled together, and a write-up to add a little more clarity to my personal perceptions on the matter of the gold price trends as unfolding in dollarland and euroland.


USAGOLD Daily Market ReportPage Update!#12399408/25/04; 14:56:33">
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.

----Closing market rap----

Gold futures closed higher Wednesday, recouping much of the loss in the previous session.

"Gold was in an overbought position when it came up against stiff resistance in the $410 to $415 area [on Friday and Monday], so the retreat [Tuesday] was not surprising," said Peter Grandich, editor of the Grandich Letter, an investment advisory publication.

"The fact that physical buying remains strong suggests, after a brief period of consolidation, the resistance at [that level] can be overcome, and a move towards the old highs in the $430 to $435 area will be in the offing," he said.

Gold for December delivery rose $5 to close at $410 an ounce on the New York Mercantile Exchange...

...a pair of Russian plane crashes on Tuesday rekindled interest in safe-haven investments. Russia's top investigator said terrorism, human error or mechanical mishap could explain why the two aircraft crashed minutes apart, killing all 89 people on board the planes, after taking off from the same airport.

"You look at the plane crashes in Russia and the Republican convention, the U.S. dollar -- there's lots of stories out there that are certainly not negative, from the gold price perspective," said Bernard Hunter, a director at precious metals dealer ScotiaMocatta in Toronto.... rose $22 [in the previous week] on concerns about the inflationary effect of runaway oil prices and about security before the Republican Party gathers next week in New York City to renominate President George W. Bush for reelection in November.

"As we get toward the end of the week, I think some folks might be a bit nervous coming into convention week," said James Pogoda, precious metals vice president at Mitsubishi International Corp. "Being a fellow New Yorker, I echo those concerns."...

John Person, head analyst at Infinity Brokerage Services: "Equities are also a concern as this is typically the seasonal time frame for a sell-off lasting until mid-October," he said. "That may be attracting some safe haven buying from investors, [which] would also explain why gold is near its three-month highs."...

"Let me tell you what I saw," said Graham Leighton, a bullion vice president at Societe Generale, "very good fund buying and dealer short-covering. Most people believe there's a fairly decent base in the euro between the $1.205 and $1.21 level and therefore the similar kind of support level in gold."

----(see url for access to full news, plus 24-hr newswire)----

WaveriderWorld's central bankers meet with oil worries high#12399508/25/04; 15:27:30

"The world's top central bankers gather at a secluded mountain resort this week to mull how to keep growth on track in a global economy burdened by lofty oil prices and the threat of potential terror attacks...."
Waverider: Hmmm....I wonder if the "G" word will be spoken.

TownCrierFirst come, first served on this limited cache...#12399608/25/04; 15:29:03

Will you act in time to be joining the ranks of the smiling faces on this one? I hope so, because these Hamburg coins are better than gems.


slingshotThe Prophecy of Oro#12399708/25/04; 16:44:47

The group that rode forth from the Goldbug castle were in high spirits. Again they would see the Althean Forest and play with the Giants of the Night. Lady Waverider,remembered the day she rode Allahar.Omar had let her use his sword to severe the straw head on a post. Some friendly competition with bow and arrow, she would enjoy. Nice to see good friend again. Bonfir,Boaz and Jachin talked about the possibility of finding another gold nugget in the river bed in the Rhodin Gorge. Each rider relished in their daydream as they rode on and in the days ahead, their number would decrease on the road to Hammerton.
When the Dark Riders passed, the Group of Four breathed a sigh of relief."Lets us continue to the east, for there may be more" said Gandalf." "Were they chasing you, Otish Mountain?" asked Bandit. "That they were", said Otish as he snapped the reigns to get his horse to stand. "Can you tell us why so many were after you?",asked Sir Misetich as he took to his saddle. Otish Mountain was silent for a short time. " I have seen them and what they have done. Noone lives and for whatever reason, they are hell bent to to achieve their goal without detection". "If they are riding to Hammerton, it will fall as your White Bearded friend said", said Otish.
"What are your names for I have already told you mine", Otish looking at the three men before him. I'm Bandit. This is Sir Misetich. "I am Gandalf the White, and now that the introductions are complete, we must be on our way".
"It would be prudent to put some miles from this place"said Bandit. " Is he always this cordial?", asked Otish. "He has plenty on his mind. He's a Wizard, you know? said Sir Misetich. "Oh", said Otish. The Group of Four made their way East.
Sir M.K. and Sir Black Blade entered the council chamber. Turning to Sir Black Blade, Sir M.K. spoke. " Go to the Valley of Clouds and ask Stephen the Great to come here. Have him bring the cannon in crates to keep them secret. He was just here for the festival. Offer my apology.
"Cannon!" said Sir Black Blade. " Gandalf is gone for sometime and unusal news from Hammerton. Something is a foot". Tell him we can store them in the lower cells for safety", said Sir M.K.
" As you wish" and Sir Black Blade left the room. Sir M.K. went to the court yard and waved as Sir Black Blade passed through the gate and began his journey south to the Valley of Clouds.

masTC - Thank you.#12399808/25/04; 18:03:10

I agree with your perception and write up. As they say interesting times indeed.
We should see some changes soon enough. Will this Friday be another push upwards, what with all the "Fed's" coming out on Monday to reassure the markets - again? Seems this is the "norm" now. Looks like they have to roll out the special reassurance speech's every week now. How nervous do you think they really are? What do they know that we don't?

JoanneAnother dirty deed by the "Big Boys"#12399908/25/04; 18:04:27


I am unable to access that article in the Globe and Mail that you mentioned. I get only a blank screen. Being by now a complete paranoid schizophrenic I assume it has been deleted by the gods?

Are you sure you gave the correct "url"

mikal@Waverider#12400008/25/04; 18:05:50

Always good to see Lady Waverider!
Re: "I wonder if the "G" word will be spoken.
May I suggest a few topics on their agenda?
a) A debate over which country has the coolest, most exciting old(or new) gold commemorative or bullion coin.
b) A debate over when the POG will be 5 digits.
c) A debate over who has the most gold.
d) A debate over who will hold their gold the longest.
e) A debate over who has held gold the longest.
f) A debate over how much gold Greenspan owns.

NedHow soon we forget..............#12400108/25/04; 18:35:42

A couple years ago 'The Globe and Mail' published John Embry's manipulation/management findings when he was the fund manager of Royal Bank Precious Metals Fund. That caused a huge stir, RBC responded a few days to a week later that (paraphrased) "these views do not reflect the opinions of RBC..... ".

Hell lead to hell and Embry left Royal Bank and went to Sprott. Globe and Mail carried that story, I recall clipping it out of the paper and filing it. I might check the author. Ingram is a die hard 'equities' guy, it doesn't surprise me that me in belittling 'gold bugs'.

I think the important part is to focus on Embry's new report (71 pages) and watch the reaction. Who cares about the Globe and RBC.

Get ready to rock.


NedEverything is bass ackwards......#12400208/25/04; 18:49:07

"Show me a currency that's weakening and I'll show you a bullish stock market," said Marc Chandler, chief currency strategist at HSBC Bank USA.

Buy gold and hedge w/ equities!

Druid(No Subject)#12400308/25/04; 18:49:32

Druid: Argentina's action as of late should probably make the agenda at Jackson Hole. I mean, you certainly wouldn't want that kind of behavior to carry over into Brazil, and then maybe, Venezuela with all that oil and a loose cannon for a President.
DruidIn search of a golden fleece#12400408/25/04; 18:58:29

Druid: @Joanne, try this url.
FlaccusNed#12400508/25/04; 19:20:51

Marc Chandler is wrong. Do you believe this? If you do, I question your depth of knowledge.
FlaccusNed#12400608/25/04; 19:31:01

Disregard. I see you are tongue in cheek.
Cytek@ Joanne#12400708/25/04; 20:07:40

Just checked the link it's still live, copy the above and paste it into your browser.


SmeagolA ticking clock?#12400808/25/04; 20:14:59

Ssir Town Crier, thanks very much for possting the charts and your comments... sss... it appears there is a fuse burning to a point ssomewhere in mid? late? 2005...

...why 350 Euro? Why is that level sso important?


Knallgoldmikal,euro Gold#12400908/25/04; 23:48:22

Its also my view that the ECB holds on its own the Gold transferred by its members.But this are only the famous 15%.
Question remains,where is the rest really,particularly how much is stored in the USA and if it is "fixed","deeply stored" or for other reasons unaccessible.Every once in awhile this issue pops up,never followed by a clarification.

Besides the German Gold,I remember around 2 years ago in Switzerland'such a story appeared in a Boulevard newspaper,and a politician brought it up in the parliament "where is the Swiss Gold,is there indeed half of it in the USA,is it save in the US (blackmailing,Iraq etc etc.)".We didn't get an answer and the Gold is now sold.Now,which Gold was sold,those we store (allegedly) in Zurich which would be gone now entirely?Or those bars in the USA where we couldn't get our hands on anyway?
The only thing I remember was a politician who claimed to have been in the vaults of Zurich and confirmed that the Gold was there.

Is America playing a dirty game with foreign Gold?I know Europe wouldn't talk about this-at least not more than they already did.

I think there is no other way than to bring the books into order.And this starts with the leasing/lending,no IMF double reporting tolerated.The euro faction claimed to not expand it in the WA1/2.I fear we just have to believe it because we can't find it out in such books.Its now 5 years after the WA1 has been announced and I don't see any progress here.The FreeGold child needs a lot more food to stay alive!

TownCrierWell, Smeagol, it HAD to be SOMETHING...#12401008/25/04; 23:57:32

"...why 350 Euro? Why is that level sso important?"

I think the truth of the matter is that it could just as easily have been another figure... call it XYZ euro. But then you would have asked, "...why XYZ Euro? Why is that level sso important?"

To be sure, the exact figure of the number isn't the important thing, but rather that it is happening at all -- at any given number. Capisce?

Sort of a "good as gold" thing. Up to a point.


Topazalt Currency Gold.#12401108/25/04; 23:57:43

PoG is persisting with this contra strength visa v the Basket which must be reassuring for Gold holders on both sides of the fence ... my consern though still rests with the Bond Yield and related DX.
They really are in a pickle here and I feel a BIG "something" is imminent to drive these Yields south. A 200 Dow(n) Day might do it!

WaveriderCentral Bank [Russia] to Buy More Euros Next Year #12401208/26/04; 02:13:57

"The Central Bank may slightly raise the euro portion of its hard currency reserves next year and cut the dollar component, a Central Bank official was quoted by Interfax as saying Wednesday. "I think that next year we may revise the structure of the gold and hard currency reserves to increase the euro portion by some extent and to diminish dollar assets," First Deputy Central Bank Chairman Alexei Ulyukayev was quoted as saying.

Currently, the Central Bank's reserves of $89.6 billion consist of 70 percent dollars, 25 percent euros and 5 percent in other currencies. Central Bank governor Sergei Ignatyev said last week he expected the reserves to reach $100 billion by the end of the year. The reserves are boosted by a strong inflow of dollars due to high prices for oil exports."

Waverider: We read about Russia diversifying into Euros earlier this year, but I don't recall discussion about increasing bullion reserves - even a fraction of their currency reserves converted to Gold is sizeable! Mikal - more "G" talk to keep the banksters Sleepless in Jackson Hole. Cheers!

Shapurrussian cb reserves---they want less dollars#1240138/26/04; 08:52:15

More euros, less dollars, more gold, less dollars. Since russia is an oil exporter, they get more dollars as the price of oil rises in dollars. Naturally, then they should start accepting euros for oil as soon as possible. It seems plain that if Russia is trading with France--selling France oil, they should do the math and take in the euro equivalent. If they sell oil to china then they probably take in dollars because china has a plenty of dollars to trade out of.

A free floating chinese yuan---Russia could take in and diversify further from dollars. They could buy chinese securities with the yuan fx reserves.

Oil is probably already changing hands in euros, and it is to the oil producers advantage to do so. And it is also prudent to do so as much as possible before an official world market decree makes the euro the benchmark oil denominator. Once the dollar falls for good, all the dollar reserves in the cb vaults go down and then all future trading revenues gained from oil will be in appreciating euros--eventually stabilizing.

Remember, stability is what the bankers crave most.

FX reserves in all countries in dollars go down---against oil and against gold.

I see Japan as the biggest loser. China is going to eat their lunch!

USAGOLD / Centennial Precious Metals, Inc.Limited quantity remains... don't miss out.#1240158/26/04; 10:39:10

Hamburg Gold

 August Buyers' Group

The Hamburg Germany 20 Mark


This exceptional coin speaks for itself.
If you don't believe lions can fly,
you should see these kitties leaving our vault.

We've tossed in some volume incentives...
just because we like you so darn much.

mikalOutlook on housing market, related firms, banks #1240168/26/04; 11:53:33

Nation's housing market finally cooling
August 26, 2004

TownCrierIn case you missed yesterday's new GC#1240178/26/04; 13:00:55

"Dollar and euro management -- and the gold price trend"

(see url)


TownCrierFed injects $19 billion, ECB drains €1.5 billion#1240188/26/04; 14:02:49

With the overnight market in fed funds trading at the new FOMC 1.5% target, the Fed trading desk nonetheless felt a need to intervene in the open market, adding $11 billion to the vaults of the nations banking system though overnight repurchase agreements and $8 billion though 14-day repos.

On the other side of the Atlantic, the latest refinancing operations of the ECB resulted in a net decrease in lending to financial institutions as a maturing facility was replaced with another facilty smaller by 1.5 billion euro.


USAGOLD Daily Market ReportPage Update!#1240198/26/04; 15:01:07">
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.

---closing market excerpts-----

COMEX gold ended down slightly on Thursday, as softer oil prices took the urgency out of inflation hedge plays, but worries about national security kept the yellow metal supported within reach of Friday's high.

Gold started with residual safe-haven firmness, but faltered after the morning expiration of over-the-counter options in London bullion markets. End-of-day of September COMEX options restrained trade, especially in silver, dealers said. "I don't know if we're tracking anything, really," said a bullion trader at a commercial bank. "Gold is just making its own dynamic. You have a lot of new participants in gold over the last two weeks and I think their positions are just still going through."

December gold settled off 40 cents at $409.60 an ounce, trading from a morning high at $411.80 to $406.60.

Gold rose $5 on Wednesday after two Russian passenger planes crashed almost simultaneously, in separate incidents.

Gold has correlated more closely to oil prices this week than the dollar. Crude futures on the New York Mercantile Exchange fell for the fifth day in a row on Thursday after their recent rally to record highs.

But investors continue to show interest in gold as portfolio insurance, after being warned of a greater risk of al Qaeda attacks timed for the Republican National Convention in New York City next week.

"There are a lot of concerns with oil prices as of late, even though we saw a major break over the last five days," said David Meger, an analyst at Alaron Trading in Chicago.

"Above and beyond that," he said, "the dollar is going through a little bit of a rally over the last week and the fact that gold has built on its gains continues to show me that the market is poised to continue that type of movement."

----(see url for access to full news, plus 24-hr newswire)-----

TownCrierHEADLINE: India may dig into forex reserves to curb inflation#1240208/26/04; 15:11:30

Reuters (Bombay)-- India's central bank is likely to dig deeper into its war chest of foreign exchange reserves to bolster the rupee as it tries to contain inflationary pressure and cushion the economy from high crude oil prices.

In contrast to the 1991 oil shock, when India's reserves were practically non-existent, it can now draw upon Asia's sixth-largest holdings to help counteract record prices of oil, its biggest import.

Analysts said the central bank was unlikely to let the partially convertible rupee weaken past 46.50 per dollar.... [as previously] dealers cited aggressive dollar-selling intervention.

Authorities are not likely to raise interest rates from 30-year lows or tighten money supply for fear of choking off demand in the farm-dependent economy...

When oil prices flared up in 1991, India's forex holdings covered only a few weeks of imports. It pledge its gold reserves to extricate itself from a balance of payments crisis...

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

It's probably a very safe bet that, this time around, gold may be mentioned for effect, but it will only be dollars that are liquidated from the central bank's mountain of reserves.

Does not bode well for the dollar when previously voracious buyers turn into net sellers.


Great Albino BatHow can India's rupee policy "counteract" the high price of oil?#1240218/26/04; 15:57:58

Sorry, this bat does not see the connection.

Oil is more expensive than some would like it to be. So what is the Reserve Bank of India going to do about it? Why SHOULD they do something about it, in the first place?

Seems as if it is the Central Bank's purpose of existence, to make life easy for everybody. Should be called the "Central Nanny"?

If gasoline is more expensive because oil is more expensive, because more people want oil than there is oil to go around...then how is the Central Nanny going to solve the problem?

Inflation is always and everywhere, a monetary problem. Oil going up is not inflationary, and not deflationary. As a good recent article pointed out (Daily Reckoning?): were high prices of stocks deflationary? High prices of houses?
High prices of bonds?

Higher price of gasoline, means you have to spend less on something else, period. Has nothing to do with monetary policy.

One has to "decode" all news these days, to understand what people are really saying and what errors they are propounding.

Lovely thing about Gold and Silver: God has limited the available supply, which is half of why they are valued. The other half being, they are pretty and useful in various ways. Not so with the realm of imaginary money, FIAT, which is unlimited in supply.

Good time to buy some gold. Showing strength. One of these the meantime, as BWP says, "I've rubbed my goldies together so often, I can see through them..."

Seriously: the dollar is suffering from a continuous erosion in its reputation. This is bad for it. No real respect for it, only convenience of the moment. And that convenience of the moment can vanish in an instant of panic.

Get your "goldies" in time - now.


SmeagolInflation-adjussted Gold-price chart 1786-2002#1240228/26/04; 16:40:03

sss... for what It is worth... interessting Chart... the price of Precious from 1786 to 2002, in 'constant dollars'... looking at this, it is obvious how evenly It has held It's value over time - 350 'dollars' on average (until It was 'messed with') and how the fiat-dollar has not.


American ExpressionRussia Proves 'Peak Oil' is a Misleading #1240238/26/04; 17:50:13

While Moscow invests heavily in unlimited oil production for the future, New York squanders America's dwindling oil profits on fast cars and fast women....

"Campbell is just the tip of a giant iceberg of academic Peak Oil 'experts' who suddenly appeared en-masse to give you this frightening news, right after President Saddam Hussein suddenly started trading his oil in Euros rather than in US Dollars, a devastating switch with the easy capacity to destroy the US Dollar in less than five years if it was left unchallenged and unchecked.

"So these shills [decoys] were carefully positioned to deflect your attention away from the obvious greed and incompetence of the United States Government and its Wall Street masters, and focus it elsewhere instead. Then, hopefully, a few years later down the track when prices start to bounce through the roof, and America has no Euros to buy crude oil, you will blame gasoline prices of $5.00+ per gallon at the pumps on an 'inevitable decline' in world oil production, rather than march furiously on Washington DC with locked and loaded firearms."

American ExpressionInvestment shortage crimps Opec production#1240248/26/04; 17:52:29,3523,1685928-6078-0,00.html

PARIS - A lack of investment means that Opec production capacity has not increased for 30 years, a former president of the Organisation of Petroleum Exporting Countries, Sadek Bussena, said on Friday.

Bussena, a former Algerian energy minister, told French RFI radio: "People forget that Opec's production capacity has been about the same for 30 years."

"In 1973, at the time of the first oil crisis, Opec had production capacity of 31 million barrels per day, and it is the same today."

"That means that we have not invested sufficiently even though reserves of oil are available. They are big and they are enough to cover demand for decades to come."

But the reserves were in countries "in regions which are not stable and where investment is not carried out in the right way".

Also oil-producing countries had had unpleasant experiences with big changes in the price of oil, he said, in a reference to past sharp falls in the price.

He urged the international community to assist investment in these countries in terms of geopolitics and the economy and "to avoid being alarmed" each time there is trouble in a producing country.


"We wont be fooled again!"

American ExpressionInflate, Inflate, Inflate ..... Save the CBs at all costs! Suck up that excess liquidity#1240258/26/04; 17:55:42

Energies: Crude Oil busted the $45 dollar level and is now $4.00 off the high of 49.40 made last week and we will not count on seeing those levels again for a very long-time. We are expecting to the see market go from Historical All Time Highs to Historical lows. As we expected the Nymex increased the margins yesterday afternoon and would look for them to climb from $3500 per contract to $6000 to $7200 for Crude Oil over the next two weeks. Which will probably cause a mass exodus of liquidation. Increase in Production from OPEC and NON-OPEC, increase in commercial supplies and record supplies in SPR's around the world. Fighting in Najaf and the United States about ready to ring the doorbell on the Holy Shrine, the end game is near. IEA used the term Irrational Exuberance to describe the current Oil market last week. Supplies for Oil, Gasoline, and Heating Oil are above last year levels for this time of the year and prices for Crude Oil are 80 percent higher than last year. China looking to help out Yukos rail problems. Don't underestimate how much oil is stockpiled globally and the effect it has on prices if it is released combined with OPEC producing at the highest level in almost 30 years (if you need monthly oil chats call and let us know). If you don't see the bubble in Oil you should not be trading.

Natural Gas has completed a 30 cent rally from recent low to high and traders should be looking for new lows quickly. Cool weather and large long positions from the small speculators are the main focus. Long term downtrend, wait for rallies atleast 25 cents to get positioned in Puts or selling futures. Aggressive liquidation has occurred and more is ahead. With summer nearly over we are looking for the market to fall down into the $4 level as mild weather sets in from Fall it does not seem likely that we will stop seeing injections every week in the EIA's number going into Winter. Sept. to October targets are in the high to mid $4 mark. Tick size is 1 cent is equal to $100. We are looking for Crude Oil to follow in Natural Gas's footsteps soon.

Chris PowellMineWeb'sTim Wood....#1240268/26/04; 19:03:57

... thinks that the gold market is rigged after all.

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.

CytekAre the news media confused on what's really going on?#1240278/26/04; 19:18:17

Associated Press

Stocks Finish Lower on Rising Oil Prices
Thursday August 26, 7:08 pm ET

By Meg Richards, AP Business Writer
Dow, Nasdaq Finish Lower As Increase in Jobless Claims Offsets Falling Oil Prices

Meg i think Jobless claims rose and Oil fell today.

otish mountain(No Subject)#1240288/26/04; 23:11:58

Well I have had a chance now to complete the essay by John Embry on the "Management" of the price of Gold, and can say that there is nothing new here and I suspect most forum readers here would agree.
About the most interesting aspect of this exercise would be to watch for the reaction from the gold community at large and to see if the main stream media picks up with this story. Does it have legs? No.
The point is gold has been managed since the first world war for welfare state governments to operate. Managed at one point in the 1930s right out of private citizens hands. Free market for gold?, not for about a hundred years. Oh but there was a brief moment in history around 1980 when gold started to shed its shackles.
Exposing collective management of the price of gold will not set it free. Its best to say nothing and let the welfare governments go on their merry way to inflate currencies to oblivion. Then we shall have a free market for gold.

misetichIraq Oil Exports Cut in Half After Attack#1240298/27/04; 04:28:49


BASRA, Iraq Aug. 26, 2004 — A sabotage attack on a cluster of about 20 oil pipelines in southern Iraq has cut exports from the key oil producing region by half, a top oil official said Thursday.

It was the latest insurgent attack to set back Iraq's oil sector, a key source of funding for reconstruction.
The pipelines were attacked late Wednesday in Berjasiya, 20 miles southwest of the southern city of Basra, an official with the state-run South Oil Co. said on condition of anonymity.

Oil supplies disruption continues in Iraq - fuelling higher oil prices

Central bankers, Wallstreet etc are putttin up "brave faces" as the onslought of The 2004 Oil Shock And Awe inflicts pin pointed and collateral damage to the industrialized western economies

Those that are expecting oil prices collapse are going to be disappointed as the natural forces are stronger than the "paper forces"

All Aboard The Gold Bull Express - Part ll

misetichOil Rebounds After Iraq Pipeline Attack#1240308/27/04; 04:37:00;jsessionid=LX34RLCA05GXSCRBAEZSFEY?type=businessNews&storyID=6087831


Analysts say that while prices have been due to correct lower they may not fall far as global demand growth run at the fastest rate in 24 years.
OPEC has signaled that it plans to increase production to combat high oil prices, saying output would reach 30.5 million bpd in September from 29.6 million bpd in July.

But a leading oil shipping analyst added on Thursday that crude oil shipments from OPEC were expected to have declined 380,000 bpd in August, countering expectations they would increase.

"The projections are probably not far from the truth in terms of production and exports and are mostly down to interruptions in Iraqi oil supplies," said Roy Mason of consultancy Oil Movements.

"If it's confirmed by other agencies like the IEA (International Energy Agency) and other analysts then it runs counter to what we actually thought was going on in August, namely that exports were climbing," he said.

Worth repeating -

"But a leading oil shipping analyst added on Thursday that crude oil shipments from OPEC were expected to have declined 380,000 bpd in August, countering expectations they would increase. "

Oil prices have risen on the back of ACTUAL DEMAND and supplies constraints

All Aboard The Gold Bull Express - Part ll

Liberty HeadIn A Gadda Da Vida#1240318/27/04; 08:44:16

Thousands of evil, radical anarchists are headed to New York City in a misguided attempt to disrupt the democratic process at the RNC.
Not to worry though, the machine is bigger than the rage against it.
There will be a Tea in the Rose Garden immediately following the final gavel.
"Crab puff, sir?"
"No thank you my good man."
"Perhaps a nice, no bid, trillion dollar contract with the crème briolette?"
" Oh yes please, and a second one for my wife, thank you."


At this forum, we discuss daily the actions and motivations of those at the top end of the hierarchies. It is more difficult however to get a grasp of how Joe Sixpack and Mary Shoeshopper will respond to the changing situations.
I think the RNC protests and the response they receive will provide us with an excellent opportunity to gage the general publics pulse rate in real time.
We know the perfect storm is brewing; yet few ships have headed back to port.
The safest harbor of all is gold.
Immediately following the storm, beer will be served in the Gold Garden.

Best Wishes

USAGOLD / Centennial Precious Metals, Inc.... In Order to Form a More Perfect Union... (between You and Your Savings)#1240328/27/04; 10:00:51">Arm yourself with knowledge
TownCrierFed funds market trading at FOMC target, Fed's trading desk intervenes anyway#1240338/27/04; 10:40:57

As easy as waving a wand, the Fed created $11 billion in fresh money for the nation's banking system through an open market round of over-the-weekend repurchase agreements.

New money comes cheaply in waves while new gold arrives dearly won in trickles -- making it the more secure form of savings.


misetichGreenspan-Aged Population to Hit Finances#1240348/27/04; 10:51:39;jsessionid=0EVYFGPQJIB2WCRBAELCFFA?type=businessNews&storyID=6090928


JACKSON HOLE, Wyo. (Reuters) - An aging U.S. population will strain public finances and hurt the economy without swift fixes to the social safety net, such as raising the age for full retirement benefits, Federal Reserve Chairman Alan Greenspan said on Friday.

"If we have promised more than our economy has the ability to deliver to retirees without unduly diminishing real income gains of workers, as I fear we may have, we must recalibrate our public programs so that pending retirees have time to adjust through other channels," Greenspan said at an annual symposium at a mountain retreat in Wyoming.

"If we delay, the adjustments could be abrupt and painful."
Greenspan, who at 78 is an example of an American who chose to work longer, said failing to recognize the looming problems would only aggravate them.

Medicare faces a bleaker future than Social Security, both because of the changing composition of the population and rising medical costs.
Financing expected future shortfalls in entitlement trust funds solely through increased payroll taxes would likely exacerbate the problem of reductions in labor supply by diminishing returns to work," Greenspan warned. He said it would be preferable for Americans to work longer.

"Changes to the age for receiving full retirement benefits or initiatives to slow the growth of Medicare spending could affect retirement decisions, the size of the labor force and saving behavior," he said, leaving no doubt that was his preferred option.

"If we delay, the adjustments could be abrupt and painful."

Baby-boomers are in for a surprise within a few years - the "politically incorrect" of raising the retirment age bar (THERE'S NO JOBS!) does little other than increasing the ballooning poverty.

Trillions of $ have been poured into 401k and corporate pension defaults have begun

With the US more and more dependent on foreing debt " the adjustements could be abrupt and painful" in more ways than one

A prudent investor would be wise to ADD PHYSICAL gold to his/her portfolio

All Aboard The Gold Bull Express - Part ll

misetichAuto analysts pull back sales targets#1240358/27/04; 11:21:18


SAN FRANCISCO (CBS.MW) -- August sales figures from the auto sector are due out next Wednesday, and with inventories bloating, oil prices teasing new highs and nasty weather taking its toll, Wall Street has reined in its estimates.
"August's sales are disappointing considering the high level of incentives, and more importantly, because of the need to clear out excess inventories," wrote Merrill Lynch analyst John Casesa in a note to clients.

As for incentives, Ford, General Motors and Chrysler offered $4,011 per vehicle in July, according to Japanese automakers spent $1,024 per vehicle and European companies like BMW and Volkswagen gave back an average of $2,562 on each car sold.

Casesa expects the seasonally adjusted annual rate of sales to drop from 17.9 million a year ago to 17.2 million. Discuss the auto sector.
Goldman Sachs analyst Gary Lapidus pegged an even steeper decline, with annual sales of 16.7 million, which is "disappointing given the massive fleet sales undertaken to attain it," he said.
"We believe fourth-quarter production will be softer than market expectations, but sufficient to meet 2004 earnings-per-share guidance," he told clients in a note.

He added that further production cuts will take place next year.

The "soft-patch" aka economic quicksand, is larger and deeper than expected.

GDP growth was revised downwards, and if all those hedonic adjustments are taken out it would show negative growth, higher unemployment

The use of Enroitis accounting to mislead investors allegedly practiced by the Feds, according to former Treasurer O'Neil, who maintains the US deficit is $44 trillions - is counterproductive as decisions are made on continued "positive news" and waiting for empty bag of "hope"

Auto production cut backs are expected in the 4th qtr, due to higher invenotory and slowing demand and further cut-backs are expected in 2005 as US auto manufacturers lose market share to foreing competitors

The results will be painful, affecting consumer spending, higher unemployment and larger budget deficits

The effects of The 2004 Oil Shock And Awe are being underestimated

The Feds fear is Asset Deflation, which is allegedly maintained by interventions in the market

Each and every day, the interventionists are gettting weaker and weaker as the laws of natural forces overwhelm

All Aboard The Gold Bull Express - Part ll

American ExpressionWhy the price of oil and general prices must rise .... and continue rising forever!#1240378/27/04; 11:59:29

"We who are teachers will be judged with greater strictness than others" --James 3:1

The primary cause of this financial, social and economic pogrom we are now in is the delusional religous belief in the attachment of interest to the medium of exchange (money) ...

All the other problems are secondary causes and effects...

Until the primary cause is addressed all the other secondary causes and effects can not be addressed...

As soon as you try to address them they conflict with the primary cause.

Interest attached to the medium of exchange is part of the economic algorithm

Also note that all interest is compounding interest.....

The compound interest equation is the only part of the alogrithm which contains exponents...

For the algorithm to operate the inputs into the "Compound Interest Equation" must never be negative and must be greater in size then the previous inputs...


P=Future Value
C=Initial Deposit
R=Interest Rate (expressed as a fraction: e.g. 0.06)
M=Number of times per year interest is compounded
T=Number of years invested

Or the economy collapses then violently implodes into deflation...

In order to satisfy the inflationary requirements of the compound interest equation, all the other equations (general pricing structure) in the algorithm must be inflated by the required amount...

"Population, Food, Energy...etc."

Oil is a secondary component of the equation which must be manipulated and bent to satisfy the requirements of the compound interest equation...

In order to sustain the inflationary requirements of the compound interest equation all the other equations must be manipulated and bent...Oil is significant but the other equations must also be manipulated by the required amounts ... and they all have finite limits...

Peak oil and rising oil prices are being used to manipulate your minds to accept the high oil prices needed to obtain the inputs to satisfy the the requirements of the compound interest equation...

During the great depression (1930s) there was no shortage of anything...The only thing that could not be satisfied was the requirements of the compound interest equation...

Once all the other equations were manipulated and bent to their finite limits or maximum potential it became impossible to satisfy the requirements of the compound interest equation...

Failure to input the required inputs into the compound interest equation leads to systemic collapse followed by economic implosion more commonly known as "deflationary implosion" and "depression" ...

Once the required inputs become infinite the only means to sustain the debt inflationary self delusional fantasy bubble which none of you realize you are inside of, YET you are hopelessly dependant upon the never ending inflation for your existance to exist, namely because you were trained from birth to exist by either attempting to socially create the illusion or financially accept lies and the deception that the inputs are greater than infinite, which are physical impossibilities ....

Once the impossibility becomes self evident to the participants in the illusionalinflationary fantasy bubble economy, the system will collapse then suffer a hyperdeflationary implosion...

The monumental division of labor make work projects (1930's FDR new deal, fair deal, square deal schemes, etc.) created to provide employment (real or imaginated) will also collapse then implode ... These schemes merely created jobs not real wealth production as the age of machines matured and the agrarian economy and society collapsed. Once the agrarian society and economy collapsed and the age of highly efficient productive machines was introduced into the general economy, the collapse resulted in a surplus of human capital that once were productive on the farm. WWII aided in creating new jobs as well as destroying the deflationary excess human capital assets. Once Europe and Asia were firmly destroyed by the ravages of war and in need of rebirth and rebuilding the means of production could again support the compound interest equation and the inflationary boom could proceed. This cycle or wave was also theorized and predicted by Kondratieff 1920's.

Inflation Must End in a Slump
Ludwig von Mises
Reprinted from the New York World Telegram & Sun, August 28, 1951.

The machine and technogical eras are highly deflationary to the monetarism and the inflationary policies of Central Banking of today. Useless jobs and socialism was invented and instituted to prevent the populace of excess human capital from uprising against the entrenched political and economic establishment.

For instance, I'll give you some maddening numbers -- and they all concern the US income tax system which among other reasons is really nothing more than employing the law perverted to create fake illusional institutionalized jobs in the division of labor to keep the excess human capital occupied, busy and quiet:

* By government's own estimates it takes an average US taxpayer 28 hours and 30 minutes to complete a 1040 tax return -- 42 minutes longer than last year. 60% of all taxpayers need paid professional help in order to file their taxes.

* Individuals and businesses spend 5 billion hours annually complying with the income tax; with estimated compliance costs of over $200 billion, more than it costs to produce every US car, truck and van.

* When the first national income tax became law in 1913, the entire Internal Revenue Code fit into 173 pages. Today, the IRC contains over 60,000 pages. There are nearly 500 IRS forms, each with many pages of fine print instructions.

* The IRS publishes and distributes over 8 billion pages of forms and notices each year which, laid end to end, would circle the Earth 28 times.

* The administrative costs of the bloated 114,000 employee IRS bureaucracy alone exceeds $10 billion a year. That number is five times the number of FBI agents and twice as many as CIA employees.

* In 2000, individual income taxes consumed 10.2% of the entire US GDP.

"If, however, a government refrains from regulations (and taxation) and allows matters to take their course, essential commodities soon attain a level of price out of the reach of all but the rich, the worthlessness of the money becomes apparent, and the fraud upon the public can be concealed no longer." --John Maynard Keynes, The Economic Consequences of the Peace, 1920, page 240

Once reality is realized and the fraud is exposed, the implosion will begin in ernest. For this reason, media deceptions and fake statistics are employed to prevent the general consensus around the planet from recognizing the sad reality of their doomed future caused by compound interest equation ... also keep in mind, like the 1930's there will be no shortage of anything (goods, services or human capital) ... EXCEPT the required inputs into the compound interest equation...

The excess will be rapidly liquidated to satisfy the compound interest equation at the expense of human existence and our modern standard of living ...

The Patriot Act(s) and homeland security government in waiting are just legal tools to deal with those who refuse to accept their fate as dictated by the compound interest equation...nothing more!

There are natural finite limits built into all the other equations which can only be bent and manipulated only so engineering, technology and scientific innovation have finite limits.

The perpetual inflation of supply and demand equations to satisfy the inflationary requirements of the compound interest equation has a finite limit...

"The law of supply and demand is not to be conned." Alan Greenspan, Gold and Economic Freedom (1966)

"With the compound interest equation the required amount of inflation is never enough until the required amount needed becomes infinite...!"

Then the system implodes after a post hyperinflationary Weimar ending .


To deny deflation is to deny your natural existence and the meaning of life in this existence!

Human existence, capitalism and technological advancements are naturally deflationary. A natural deflation occurs as humans, technology and capitalism develope into an efficiently operating economic triad (means of production)to raise, elevate and increase the NATURAL standard of living. The real physical universe is naturally and physically designed to operate at maximum capacity and efficiency when outside special interest forces are rejected. When real efficiency and productivity increase, the REAL COST of goods and services decline as productivity increases causing the retail pricing structure to fall. Previous incurred debt cannot be sustained or adequately serviced in a naturally declining price environment, and hence bankruptcies and liquidations become predominant as the general price structure adjusts to the new technologies operating efficiently. Debt then becomes the number one enemy of mankind as he strives to better his living conditions for himself and his future forebears. Demand for new money (inflation) subsides as the means of production becomes efficient and debt levels become intorable. When new money cannot be created, compound interest cannot be serviced and the system implodes. In other words the real physical world operates inverse and opposite of the compound interest and the debt inflationary Central Banking schemes in operation today. Therefore there is only one means for the Central Banking scheme to survive, that being fascist communism. The Central Banks if they are to survive, they must totally command the means of production of the supply and demand economy. All real or imagined things, namely "all commodities" and "imaginary metaphysical law" that support human existence and bond society into a collective whole must be effectively and totally controlled to support the general pricing mechanisms of the inflationary compound interest equation. If the Central Banks cannot control these make believe constructs, the fraud of money will be exposed and along with the exposure their usefullness to society will be terminated.

The global Central Banking schemes are destined to fail as even they cannot operate or exceed the natural physical constructs of the real world! They may be capable of purchasing a brief consolidating moment in time, but they are in reality an unsustainable abomination operating outside and beyond the constructs of real human and physical world.

"All forms of tampering with human beings, getting at them, shaping them against their will to your own pattern, all thought control and conditioning is, therefore, a denial of that in men which makes them men and their values ultimate" Isaiah Berlin


Deflation is infinite and indestructible...Inflation is finite and fragile...

Deflation does not increase or decrease and has no beginning and no end...

Inflation increases and decreases and has a beginning and an end.

Truth is infinite and indestructible while lies are finite and fragile...

The truth is something while lies are nothing...

or Something is infinite and indestructible and nothing is finite and fragile...

The Universe is a logical construct of Infinite finiteness or the Never ending end...

The Universe is a paradox.

It has a beginning and and end...But the beginning and the end are the same point in infinity...Basically a circle that we view as waves or cycles ...

It is possible to maintain existence within the bounds of universal reality (Article I section 10 US Const. and the prohibition of attaching compound interest to the medium of exchange), but for the past 6000+ years the humans who position themselves at the top of the economic food chain reject the universes reality ... They reject truth in favor of the something for nothing free lunch counter! There is no such existence in the real world as the "free lunch" or "free lunch counter" that compound interest attached to the medium of exchange represents ... the bible tells us so and thusly prohibits Gentiles from engaging in any form of usury! Yet today, most Gentiles accept the new and modern twisted delusional meaning of usury and reject or ignore the biblical prohibitions and warnings against ALL usury ..... The end result is always economic ruins and human self destruction as foretold in the Bible, the Koran and Talmud, etc.! The ancients were knowledgable of coin and credit and the predatory nature of compound interest and usury as a control mechanism.

"The rich ruleth over the poor, and the borrower is the slave of the lender" --Proverbs 22:7

Once surplus human capital becomes useless to the debt backed by debt compound interest equation it must be liquidated like all other unproductive or useless assets. Hence the cyclical welfare/warfare system for humans and the Kondratieff economic/financial winter ..... both serve to wash the system of unproductive assets and activities!

"A prudent man foresees the difficulties ahead and prepares for them; the simpleton goes blindly on and suffers the consequences" --Proverbs 22:3

GOT GOLD??? Gold may very well prove invaluable in the coming weeks, months and/or years! It has no liabilities, it has no interest attached and it is not debt! The reality is "compound interest and debt" are the reasons for 99.9% of all human suffering .....

"And the things you have heard me say, entrust to reliable men who will also be qualified to teach others" --Tim 2:2

The Population Control Agenda
Stanley K. Monteith, M.D.

WORLD DEPOPULATION IS TOP NSA AGENDA: The Haig-Kissinger depopulation policy by Lonnie Wolfe Special ...



International Conference on Population Control in The Hague, Netherlands.

United Religions Initiative - Promoting a politically correct "Global Ethic" and population control

"The Big Money Behind Population Control"


The Center for an Informed America
August 17, 2004
Whoa, Dude! Are We Peaking Yet?

Russia Proves 'Peak Oil' is a Misleading


TownCrierGreenspan soundbites from speech at Jackson, WY#1240388/27/04; 12:52:55

"Although the sustainability of fiscal initiatives is generally evaluated for convenience in financial terms, sustainability rests, at root, on the level of real resources available to an economy. The resources available to fund the sum of future retirement benefits and the real incomes of the employed will depend, of course, on the growth rate of labor employed plus the growth rate of the productivity of that labor."

Bottom line: a society can at any point in time print more money at will, but it cannot ensure that it will be able to secure the real goods and services of a quantity or quality that are actually desired and needed. You can take steps toward avoiding problems of this nature by keeping your savings in a form that is REAL to begin with. Choose gold for its permanence, its universal acceptance, and its all-important liquidity.

Call USAGOLD~Centennial for a helpful diversification consultation today.


misetichGlobal: The Great American Savings Grab - S Roach, Morgan Stanley#1240398/27/04; 13:09:32


Never before has the world's leading economy been saddled with such a severe shortfall of saving.
The numbers speak for themselves. Driven by a veritable collapse in personal saving, in conjunction with a dramatic deterioration in the federal government's budget position, America's gross national saving rate -- the combined saving of households, businesses, and the government sector -- fell to an all-time low of 12.8% of GNP in early 2003. Nor has it recovered much since, rebounding to only 13.8% in early 2004. Stripping out the depreciation of worn-out capital in order to get a cleaner read on the domestic saving available to fund net growth in productive capacity, America's net national saving rate plunged to a record low of just 0.4% in early 2003. While there has since been a modest rebound to 2.0% in early 2004, there can be no mistaking the sharp break from historical trends; by comparison, the US net national saving rate averaged 5.3% in the 1980s and 1990s and 9.6% in the 1960s and 1970s.

In a world where saving must always equal investment, America's saving shortfall has profound implications. Lacking in domestic saving, the US had had to import surplus saving from abroad in order to keep its economy growing.

And the only way it can attract such capital inflows from abroad is to run massive current account and trade deficits.

Consequently, it is no coincidence that America's current account deficit hit 5.1% of GDP in early 2004 -- it's a direct outgrowth of a severe shortfall of domestic saving.
By our reckoning, America's $531 billion current account deficit in 2003 absorbed a record 79% of the world's total surplus saving -- well in excess of the 68% global saving absorption over the 1985-87 period, when the US last had a current account funding problem.
The key issue for the economy and financial markets is sustainability -- namely, whether a saving-short growth dynamic can persist indefinitely.
First, the flows into dollar-based assets are continuing in large part because the rest of the world has no alternative uses for its surplus saving....... The day will come, however, when autonomous support from domestic private consumption reaches a critical mass in Asia and/or Europe. The day will also come when aging foreign economies will need to divert an increasingly large slice of their saving to fund entitlements programs. When either or both of those developments occur, current account surpluses will narrow -- thereby curtailing the ample flows that are now America's for the asking. Under those circumstances, a saving-short US will have to bid more aggressively for external funding, undoubtedly putting pressure on the dollar, stocks, and bonds.

Second, there is the presumption that the United States will not up the ante on its claim against surplus global saving. That may be wishful thinking. The demographics of aging baby-boomers argue very much to the contrary, as do the related pressures of looming crises in Social Security and Medicare.
4). America's structural budget deficit is currently absorbing about 6% of the world's gross saving, according to IMF estimates (see Chapter II of the IMF's April 2004 World Economic Outlook). The risk is that an explosion in entitlements spending could compound an already serious long-term US budget problem. That would further depress national saving at just the time when a "greyer America" needs it -- putting even greater pressure on (aging) foreign savers to fill the void.

Third, America's saving-short growth dynamic has drawn great sustenance from the asset-based saving of US consumers -- initially through capital gains in equities and more recently through appreciation of residential property. The asset-based saving paradigm could get drawn into question for any number of reasons -- an upside interest rate surprise, a sustained correction in the US equity market, or a long overdue bursting of the property bubble. Should any of these outcomes occur, there could be an important shift in the mix of saving --

Saving is the sustenance of long-term growth for any economy. And yet America is lacking in saving as never before.
As always, the flows will give the impression that this outcome is sustainable. In the end, nothing could be further from the truth.

ANOTHER redlight flashing warning from the inimitable Mr. Roach

All Aboard The Gold Bull Express - Part ll

USAGOLD Daily Market ReportPage Update!#1240408/27/04; 13:40:20">
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.

----closing market excerpts----

The most active Dec contract settled $4.20 lower at $405.40 per ounce.

Gold prices got off to a firm start at the $410 mark as players initially proved reluctant to part with metal ahead of the release of U.S. gross domestic product data at 0830 ET.

While GDP increased at a slower-than-forecast 2.8% rate in the second quarter, global currency investors interpreted the growth reported in consumer and business spending as positive for the U.S. currency... This, in turn, tarnished gold's appeal as an alternative to the dollar and spurred light fund and bank sales as the day progressed to pressure prices down.

However, good levels of physical demand emerged from players based in the Middle East and India to stem the downward tide and usher prices sideways on either side of $405 for the balance of the day.

Next week, gold is expected to prove well supported above immediate support around $400-402 an ounce as the 2004 Republican National Convention in New York City raises terrorism concerns and dissuades further sales of safe havens such as gold.

That said, gold dealers agreed that further wide-ranging price action should be allowed for as general trading conditions remain thin for the tail end of summer.

"There's a holiday in London on Monday, the convention in New York next week and then Labor Day the following weekend so I think a lot of money has been taken off the table," said Paul McLeod, vice president of precious metals trading at Commerzbank in New York.

"That will probably leave conditions thinner than usual so if someone comes in to do business there could be a more pronounced reaction in the price than would normally be the case," he argued, adding: "In other words, people should get used to $8-10 ranges in gold."

----(see url for access to full news, plus 24-hr newswire)----

Federal_ReservesSocial Security Surplus#1240418/27/04; 13:55:37

Had we bought real estate with the surplus (receipts - payments) rather than government bonds, the fund would be in a massive surplus. That real estate would have appreciated into a mighty surplus. Real estate unburdened by debt! As it is, the FEDS are using the fund to steal money from working people, in order to fund massive federal deficits! A complete outrage! A scam! We have fools in charge of policy and complacent idiots as voters! Soon we will wake up, as the twin towers of fiscal and trade deficits collapse! This will be the real terror.
USAGOLD / Centennial Precious Metals, Inc.Put a Foundation Under Your Portfolio#1240428/27/04; 13:57:06

Swiss Gold Francs

Get the Legendary SECURITY of a Swiss Account...

...Delivered to Your Door.

Call USAGOLD - Centennial for Arrangements

misetichUnited States: Pension Tension - R. Brenner , Morgan Stanley#1240438/27/04; 14:11:47


But the airlines’ pension woes aren't simply the product of a battered industry. Airline executives — as in many industries — promised employees extravagant pensions but, constrained by tax laws, they didn't adequately fund them.
In an investment world myopically focusing on reported operating income (EBIT) as a measure of performance and, more unfortunately, EBITDA as a measure of operating cash flows, that fictitious income was "manna from heaven" for companies hungry for growth and capital. In addition, current regulations make the problem worse by directing plan sponsors to use a 1983 mortality table, thus underestimating the size of the cash obligations. In hindsight, the stock-market bubble actually hurt plans’ long-term health. That's because the bubble made plans look overfunded but gave little indication of the duration and funding risk the companies were taking.
We reckoned that a combination of last year's recovery in equity markets and over $80 billion in plan contributions in 2002–03 reduced the expected year-end 2003 funding gap below the 2002 and mid-2003 shortfalls, to $170 billion, for the S&P 500.
Alas, it's payback time. It would be a mistake to think that industry woes are now the key source of pension problems; in our view, they are simply the final straw. Instead, we think that this year's flat markets and still-low interest rates are unmasking the true nature of the aggregate DB funding shortfall. We estimate that at current market levels, and using the stated funding that companies reported for the first time in the most recent fiscal year end financial statements, the funding gap for the S&P companies has grown to $240 billion from $170 billion at the end of 2003. If we extrapolate this to all corporate plans based on invested assets, the total would be over $350 billion for 2004. The Pension Benefit Guaranty Corporation, the agency overseeing the pension safety net, estimated the gap for all corporate plans to be $350 billion at the end of fiscal 2003; doubtless, it is larger today. Pension assets for private plans are around one-third of total invested assets in pension funds, with the balance being in state and local plans which are thought to have even deeper funding problems (although the data is even more opaque for these funds). The bottom line is that the current hole is probably more than $1 trillion despite last year's huge rally and the highest contribution level of funds in many years

Mr. Brenner is being kind - the underfundendness is going to get worse as the SM is looking downward in months to come -

From GSE's ( accident ready to happen) to underfunded pension plans, to the out of control derivative market, to the twin deficit, to continued higher unemployment, very dark ominous clouds hover over the US $

All Aboard The Gold Bull Express - Part ll

American ExpressionGreenspan soundbites from speech at Jackson, WY#1240448/27/04; 14:16:19

BOTTOM LINE: "Let them eat cake!"

Got Gold?

silverton3Gold Loan???#1240458/27/04; 16:13:16

I am interested in finding anyone that has information on making loans of gold. For example:

Find a buyer of real estate that needs a loan. Loan him/her 400 ounces of gold. Loan is to be paid off in monthly payments of 2 ounces/month including 3% interest(12 oz/year to start). Real estate is the collateral for the loan.

Is it legal and binding to draw up a contract like this?
Has anyone ever done anything like this?

Aristotlesilverton3 -- Gold loan#1240468/27/04; 17:26:21

Assuming you can find willing parties, it's doable. But the big question is: Why would you want to be a party to it? (I'm assuming you'd be the Gold lender.)

Just to simplify matters of title and who owes whom, let's assume that an existing property owner (rather than a prospective buyer) takes you up on your offer of Gold against the land, thinking 3% annually is a low-cost gamble for attaining the full weighted security of Gold in hand while still retaining the ability to farm his own land.

Let's say sometime fairly soon after the paperwork is done and the goods are handed over the market value of Gold experiences its long overdue escalation, whereas the real estate market holds a steady course. Your counterparty kicks up his heels and says nuts to you and your repayment schedule and skips town with his 400 ounces worth million$, leaving you with the real estate collateral worth only the same $160,000 where it all began. Meanwhile, he moves to a nicer climate, sells only one-fourth of the Gold you handed over, and lives like a king on a nicer plot of land than he ever imagined possible -- all that plus still having 300 ounces of prime Portable Yellow Property!

The moral to the story is if you lend Gold, prepare to be Goldless, drying your tears with a hard lesson in the meaning of collateral.

Gold. Get you some. --- Aristotle

American ExpressionBREAKING: FBI SAYS ISRAELI SPY AT HIGHEST LEVEL OF PENTAGON #1240478/27/04; 18:10:24

(CBS) CBS News has learned that the FBI has a full-fledged espionage investigation under way and is about to -- in FBI terminology -- "roll up" someone agents believe has been spying not for an enemy, but for Israel from within the office of the Secretary of Defense at the Pentagon.

60 Minutes Correspondent Lesley Stahl reports the FBI believes it has "solid" evidence that the suspected mole supplied Israel with classified materials that include secret White House policy deliberations on Iran.

With ties to top Pentagon officials Paul Wolfowitz and Douglas Feith, the analyst was assigned to a unit within the Defense Department tasked with helping develop the Pentagon's Iraq policy.

"FBI Suspects Israel Has Spy in Pentagon -- CBS News"

WASHINGTON (Reuters) - The FBI believes there is an Israeli spy at the very highest level of the Pentagon, CBS News reported on Friday. The Israeli embassy immediately denied the report.

The network said federal agents believed the spy may have been in a position to influence Bush administration policy on Iran and Iraq.

"The FBI has a full-fledged espionage investigation under way and is about to ... roll up someone agents believe has been spying not for an enemy but for Israel, from within the office of the secretary of defense," the network reported.

CBS News said the FBI believed it had solid evidence the suspected mole supplied Israel with classified material that included secret White House deliberations on Iran.

The network described the spy as "a trusted analyst" assigned to a unit within the defense department tasked with helping develop the Pentagon's Iraq policy.

Asked about the CBS report, a spokesman for the Israeli embassy said: "We categorically deny these allegations. They are completely false and outrageous."

otish mountainA relevant quote:#1240488/27/04; 21:46:25

"Nothing has been more amply demonstrated during the past 3,000 years than this: that the great majority of men do not esteem, or understand, or even desire liberty. What they value is the semblance of liberty accompanied by indulgence"

Freeman Tilden "A World In Debt" 1935

When shopping for your gold for a store of wealth be sure to ask for the real thing, not a semblance.

NedAmerican Expression#1240498/28/04; 05:04:25

Mind boggling/twisting post! Amazing.

Hope to hear more.

NedMarshall Auerback is awesome.......again......#1240508/28/04; 06:16:15


"This policy conundrum takes on added urgency in light of June's horrendous trade deficit number of $55.8bn. Of particular note was that at $33 per barrel, the price of crude clearly did not reflect anything near current oil price levels, implying a further monstrous expansion of America's external imbalances as the figures for July and August emerge."

me.......$55.8 billion at $33 oil, whoa! What are we gonna get at $40+ oil !!! As someone mentioned last week, get your gold before July number are announced!


"The US economy, therefore, continues to be kept afloat by enormous foreign lending so that consumers can keep buying more imports, thus increasing the bloated trade deficits. This lopsided arrangement will end when those foreign creditors--major trading partners like Japan and China--decide to stop the lending or simply reduce it substantially.

It is well known that much of the source for that dollar buying today is the Asian official sector. As we noted last week, such huge purchases have prevented a calamitous fall in the external value of the dollar, which in turn has forestalled a private sector credit revulsion. Private sector creditors effectively view Asia's central bankers as a bulwark against a precipitous dollar decline, given that their continued purchases of US dollars implicitly sanction the financial practices undertaken for decades by America's monetary policy authorities and thereby ensure their perpetuation.

It is also true that central banks are not profit maximisers in the manner of a private business and are therefore perhaps happier to maintain the status quo – even if it means being repaid with devalued dollars – because the alternative is the loss of a huge export market and unprecedented financial instability, which central bankers abhor much as nature abhors a vacuum. To stop purchasing US dollars, it is said, risks the economic equivalent of embracing the nuclear option, a reckoning that could arrive as a sudden thunderclap of financial crisis—a precipitous withdrawal of capital a la Asia in 1997, which engenders a backdrop of spiking interest rates, swooning stock market and crashing home prices. Asia's central banks, like US policy makers, may indeed recognise a self-interest in keeping the game going – avoiding a global meltdown that might ruin everyone."

me.....Is this a chicken or egg thingy? Foreign central banks are supporting the dollar, why? Because they have so many of them now. They cannot afford to not support the USD. The US PTB, it so seems, wants to lower the dollar to begin the horrendous unwinding of the 'strong dollar era' of the late '90's. Asian PTB won't let the dollar fall. How long does this go on? When dors it end? How does it end?

NedSo here's the punchline.....#1240518/28/04; 06:27:23

"Private sector creditors effectively view Asia's central bankers as a bulwark against a precipitous dollar decline, given that their continued purchases of US dollars implicitly sanction the financial practices undertaken for decades by America's monetary policy authorities and thereby ensure their perpetuation.

Asia's central banks, like US policy makers, may indeed recognise a self-interest in keeping the game going – avoiding a global meltdown that might ruin everyone."

------------------- the US PTB behind all this 'management' or are Asian PTB also in the same game. Seems to be a game of "you sell.....we buy", if either party fails on the agreement both go down the economic toilet. Imagine the 'nuclear fallout' as Marshall Auerback suggests if the music stops, who will gain, no one? Who will lose, everyone? If this is the case why shut off the music? Does the music have to shut off? Seems to me the Asians might hold a larger hand, when do they stop buying? Why would they stop buying? The US must be happy (superficially) with this deal. Is this really a when not if situation?

Who blinks first? What's next? When?

Might be an interesting weekend discussion.


American ExpressionThe 'Lawful Money' Question #1240528/28/04; 07:37:04

USC Title 12 Chapter 3, Section 411 in part:

"Federal reserve notes shall be redeemed in lawful money on demand at the Treasury Department of the United States, or at any Federal Reserve bank.-USC Title 12 Chapter 3, Section 411

What is the definition of "lawful money?" What is the difference between "legal tender" and "lawful" money?

You may be surprised.

Gold -N- Silver, the Kings & Queens of universally accepted real commodity money in every language and culture require no such government status or definition as "legal tender" or "[l]awful money" to compel its public use and acceptance. Get u sum physical 2day b4 you cannot get u sum.

Tick, tick, tick ....

SmeagolBetter yet., Ssir Silverton...#1240538/28/04; 08:39:41 fiat-currency, but demand payment in Gold at a locked-in rate!


SmeagolAmerican Expression (8/27/04; 11:59:29MT - msg#: 124037)#1240548/28/04; 08:45:46

...we would humbly like to nominate thiss Posst to be archived...


mikal@American Expression, Ned#1240558/28/04; 09:21:40

Great posts lately.
@Ned- In answer to your question, when does the lending
and dollar support and bond purchases and deficits, etc. end?
Around the winter months, a poster here produced a chart and several compelling posts on the US money creation needed to service it's debt. It showed it's exponential, parabolic trajectory and unsustainable growth
currently headed towards a denouement
as early as next year.

USAGOLD / Centennial Precious Metals, Inc.Hard assets, easy access!#1240568/28/04; 09:49:43">gold -- a global calling card
American ExpressionTHE COMMERCIAL CREDIT SYSTEM #1240578/28/04; 09:59:50


Congress has the power to abolish the Federal Reserve System and thus destroy the private credit system. However, the people have it within their power to strip the Fed of its powers, rescind private credit and get the bankers to pay off the National Debt should Congress fail to act. The key to all this is 12 USC 411, which declares that Federal Reserve notes shall be redeemed in lawful money at any Federal Reserve bank. Lawful money is defined as all the coins, notes, bills, bonds and securities of the United States: 'Julliard v. Greenman' 110 U.S. 421, 448 (1884); whereas public money is the lawful money declared by Congress as a legal tender for debts (31 USC 5103); 524 F.2d 629 (1974). Anyone can present Federal Reserve notes to any Federal Reserve bank and demand redemption in public money -- i.e., legal tender United States notes and coins. A Federal Reserve note is a fixed obligation or evidence of indebtedness which pledges redemption (12 USC 411) in public money to the note holder. The Fed maintains a ready supply of United States notes in hundred dollar denominations for redemption purposes should it be required, and coins are available to satisfy claims for smaller amounts. However, should the general public decide to redeem large amounts of private credit for public money, a financial melt-down within the Fed would quickly occur. The process works like this. Suppose $1000 in Federal Reserve notes are presented for redemption in public money. To raise $1000 in public money the Fed must surrender U.S. Bonds in that amount to the Treasury in exchange for the public money demanded (assuming that the Fed had no public money on hand). In so doing $1000 of the National Debt would be paid off by the Fed and thus canceled. Can you imagine the result if large amounts of Federal Reserve notes were redeemed on a regular, ongoing basis? Private credit would be withdrawn from circulation and replaced with public money, and with each turning of the screw the Fed would be obliged to pay off more of the National Debt. Should the Fed refuse to redeem its notes in public money, then the fiction that private credit is used voluntarily would become unsustainable. If the use of private credit becomes compulsory, then the obligation to make a return of income is voided. If the Fed is under no obligation to redeem its notes, then no one has an obligation to make a return of income. It is that simple! Federal Reserve notes are not money and cannot be tendered when money is demanded: 105 So. 305 (1925). Moreover, the Ninth Circuit rejected the argument that a $50 Federal Reserve note be redeemed in gold or silver coin after specie coinage had been rescinded but upheld the right of the note holder to redeem his note in current public money (31 USC 392; rev., 5103): 524 F.2d 629 (1974); 12 USC 411.

It would be advantageous to close out all bank accounts, acquire a home safe, settle all debts in cash with public money and use U.S. postal money orders for remittances. Whenever a check is received, present it to the bank of issue and demand cash in public money. This will place banks in a vulnerable position, forcing them to draw off their assets. Through their insatiable greed, bankers have over extended, making banks quite illiquid. Should the people suddenly demand public money for their deposits and for checks received, many banks will collapse and be foreclosed by those demanding public money. Banks by their very nature are citadels of usury and sin, and the most patriotic service one could perform is to obligate bankers to redeem private credit.

[Reprinted from `Freedom League', Sept/Oct 1984]

The modern banking system manufactures money out of othing. The process is perhaps the most astounding piece of sleight-of-hand that was ever invented. Banking was conceived in iniquity and born in sin. Bankers own the earth. Take it away from them, but leave them the power to create money, and, with a flick of the pen they will create enough money to buy it back again. Take this great power away from them and all great fortunes like mine will disappear, and they ought to disappear, for then this would be a better and happier world to live in. But if you want to continue to be slaves of the bankers and pay the cost of your own slavery, then let the bankers continue to create money and control credit." -- Sir Josiah Stamp. The Bank of England.

"A Privatised Money Supply"
Modern Banking and the Fractional Reserve System

Do you know where the bank gets the $160,000 for your mortgage? It's very simple. Someone walks over to a computer and types 160,000 beside your name. With only $27.93 of cash reserves for every $10,000 of assets (as of June 1999) the bank has just created the remaining $159,553 of that interest-earning money out of thin air. When, after 25 years of hard work, you pay off your mortgage, the $159,553 vanishes back into thin air. Not so the interest however. It vanishes into the banker's pocket.

Druidmikal (8/28/04; 09:21:40MT - msg#: 124055)#1240588/28/04; 10:20:31

MZM Exponential Growth vs. Fed Funds Rate
28 October 2003

Originally posted at: Gold is Money

The light blue vertical lines are just to point out the relationship between rates and MZM...

Rates rise and MZM contracts...Rates are lowered and MZM expands...

Debt backed by debt Fractional reserve banking, to be sustained from this point means that MZM growth must grow faster and faster exponentally like it has been since the early 60's...

Can Rates be dropped past zero faster and faster exponentally faster and faster?

The answer is NO...that is impossible...

But to sustain the current reality MZM must begin moving straight up...forever...

1776 to 1991 MZM growth 2 Trillion in 215 years

1991 to 2000 MZM growth 2 Trillion in 9 years

2000 to 2003 MZM growth 2 Trillion in 3 years

So from now until the end of 2004 MZM must grow by 2 Trillion and after that it must grow by 2 Trillion in 3 months then 1 month then 1 week then 3 days then 1 day then 8 hours then 2 hours then less than an hour and so on and so forth until we are down to nanoseconds and beyond...

Or the System will collapse...the end

Try all you want to deny it...the dawn of economic doomsday is upon us...

Rates across the spectrum must crash to sustain growth...Mortgage rates especially...and that will only buy a few more months to live in "THE GOOD OLD DAYS"

Peek at the Commercial and Industrial Loans Chart at all Commercial Banks. The chart indicates demand for Commercial and Industrial Loans have never recovered from the 2001 recession and continue to slide lower and lower. An ominous sign to say the least.........

Business Loans 1

Even more revealing is the 2000 to 2003 chart below:

Business Loans 2

"We are completely dependant on the commercial banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the banks create ample synthetic money we are prosperous; if not, we starve. We are absolutely without a permanent money system.... It is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it becomes widely understood and the defects remedied very soon."
--Robert H. Hamphill, Atlanta Federal Reserve Bank

Consumer loans look to be topping out....uh oh!

Consumer Loans

The argument for real estate investment is a good one, or should I say "has been" a good one since 1947......percentage of new real estate loans from prior year is turning down indicating a possible top is in the making for real estate loans and growth.

Real Estate Loans

Total Loans and Investments at all Commercial Banks moving sideways with prior annual percentage in strong decline.

Total Loans

Looks like deflation dead ahead to me! How say you?


Druid: Mikal, I'm guessing that this is the write-up and link that you're alluding too?

heavy mettlePersonal Banking Chips#1240598/28/04; 10:30:33

I wonder if most people have thought about how in a dollar/banking crises, their ATM and credit cards would be worthless by runs on physical money supply and bank failures. The technological ‘solution’ to this serious and historical ‘problem’ might be the micro chip where the units of currency are held in the chip, thus you never have to suffer or think about losing your money again. And strawberry fields forever.

Never mind inflation. Most don't quite grasp that concept anyway. Never mind that credit cards could have had the same functionality as they do in Australia. Passé.

In a modern advanced society, who needs dirty money that depreciates or nasty bankers closing their doors anymore when you can have a bank implanted in your arm. Imagine a mugger demanding money or your wallet. "What are you going to do, steal my chip?" Theft would literally cost an arm and a leg.

This would be gold friendly if the chips were made of it. Fat chance. Otherwise it's exchange of gold for more chip units. A free gold market could exist in this environment unfortunately we would be far from free.

"Get with it man, get chipped like they do in Hollywood." How many movies now have had the actors using some sort of chip in a cool and useful way. I can think of a few.

As someone once told me, "They can't force you to take a chip." I agreed. But they can't force you to pay rent in the way of property tax either. However, try living in your home without paying it. Try booking a hotel or renting a car without a credit card today. Not easy.

Thinking about avoiding this if it comes about and having the children do the shopping for you to skirt big brother? With all the RFID chips in everything from clothing to food stuffs, consumption could be closely monitored. Anyone harbouring a non-conformist/terrorist could face prison or even worse; depending on how much power the State weilded.

mikal@Druid#1240608/28/04; 11:31:21

Thank you! Yes, that's the material. Were you the poster?
Druidmikal (8/28/04; 11:31:21MT - msg#: 124060)#1240618/28/04; 11:49:16

Druid: Mikal, I don't know that I was the original poster but I have posted it a few times over my career here at the castle. I think maybe Melting Pot originally posted it. My apologies if I'm not correct. I do know that we have had some pretty interesting exchanges over what the subject matter suggests.
ToolieAg trade surplus=$2.5 Billion in 2005 #1240628/28/04; 17:57:58

Snip: WASHINGTON (Reuters) - Slipping exports and rising imports of agricultural products in the coming fiscal year will give the United States its smallest farm trade surplus since 1972, according to government projections issued on Thursday.

U.S. farmers will export $57.5 billion worth of agricultural products in fiscal 2005, down $4.5 billion from the record expected for the current fiscal year, the U.S. Agriculture Department said.

On the other side of the farm trade equation, the USDA projected the United States would import a record $55 billion worth of agricultural products in 2005. This would trim the nation's farm trade surplus to $2.5 billion, its lowest level since 1972. (End snip)

God help anyone that tries to produce anything in our super-productive economy. A box of carrots falls off the truck on the way to Canada and were in an agricultural deficit for 2005.

The most recent trade deficit numbers of 55 billion, extended for 12 months works out to just under 6% of GDP. 5% of GDP was what economists were calling the maximum manageable number a few months back. There is no slowdown in sight. I'd love to see a chart of these deficits, if anyone knows where I can find one, I'll bet that we have a well defined hyperbolic base. The dollar should be looking for a new trading range, and soon.

Dollar Bill.,.#1240638/28/04; 18:06:34

Ned, couldnt the fed say to japan and china, and some gas boys, that when push comes to shove, we will make up for the devalued dollars by paying you in freshly printed up dollars that we just manufacture, ALL the dollars it takes to make up for the loss.
You know, the amount, plus whatever amount it takes to make things "right".

SmeagolAmong other things....#1240648/28/04; 18:38:30

Ssnipped from "Which Way the Volumes" by Ed Bugos, over at the 'GE' casstle...

"The Significance of the Embry Report on Manipulation

Just when I was starting to persuade myself there was nothing new to write about, investment manager Sprott Asset Management published John Embry's endorsement of GATA's claims that the manipulation of gold continues to exist to this day. This has significance for a few reasons.

As manager of the Royal Bank of Canada's precious metals fund (which was the best performing fund in North America while he managed it) John Embry first broke his silence on this view in a confidential letter to clients that the Royal Bank later repudiated. He then migrated to his current post at Sprott to manage their gold fund.

The current publication (Not Free, Not Fair: The Long Term Manipulation of the Gold Price) is his first fully public expose – and hence the first real endorsement of the suppression scheme by an industry insider – since.

But there is an even greater significance… its timing.

The money center banks took a big hit in the second quarter as they wrote off billions of dollars in future litigation costs. Citigroup announced it would settle on WorldCom litigation by providing a $2.65 billion aftertax fund for investors to claim "without announcing any wrongdoing." I guess it's cheaper that way.

JP Morgan too wrote off $3.7 billion to its own litigation reserve in the second quarter, increasing it to $4.7 billion. Management trumpeted its earnings as if that reserve would never be spent. But it did not attribute the increased reserve to anything specific.

In its 10Q, Morgan listed litigation related to Enron, WorldCom, the failed issue of (CSFI) debt, IPO allocations, research-analyst conflicts, some contingent liabilities and regulatory infractions associated with Bank One, and "other legal actions."
Now, Morgan is one of two defendants (Barrick is the other) in a price fixing case brought against it by the Blanchard group. But NOTHING was mentioned about the case in its 10Q or elsewhere.

The omission was powerful enough to catch my attention because I had heard nothing on when the next hearing was going to be. And as far as we knew it was still on – after the Judge had denied several dismissal motions by both defendants as recently as May 2004. Blanchard's people confirmed that the process is still in discovery, but that the next hearing is scheduled for September 1st. That's right, Wednesday.

So the banks buff up their litigation reserves just ahead of this trial without alluding to it, and at the same time, the Embry report comes out… just a week ahead of the hearing. Hence, the second significance of the Embry report, which essentially supports Blanchard right before the hearing.

Now, the reason for Morgan's omission might well be that they regard any reference to it as potentially inflaming what they perceive as an incredulous claim. But, as any Austrian Schooled economist would know, a decision not to act is also a meaningful action. In this case it is so.

By deliberately managing the significance which the public attaches to the case, it is by definition more significant than the notes to the financials suggest. If it were truly insignificant, the note would be but a helpful disclosure. What is significant is that the capitalization of JP Morgan's litigation reserves is enormous by historic standards – representing more than 10 percent of annual revenues. The banks are spending an enormous amount of money to settle charges of manipulation or regulatory infractions against them, without admitting any guilt. Outstanding accomplishment...

...I cannot make any predictions on the outcome of the hearing. My optimism is restrained by the many facts of life. I would consider it a wild card. But victory for gold bulls - in this case - need not even come in court. It's the publicity that'll hurt."

...sss... IF it gets any...


NedDollar Bill#1240658/28/04; 19:30:12

Interesting concept. So if 'the deal' is struck say that 10% is missing we supply 110% dollars and call the deal 'fair and square'?

What happens the next go-around? 110% of 110% (121%) then 110% of that (133%) and then......

Isn't that already happening? Case in point oil?

Gotta end ugly, no?

geRussian bear calls on gray wolf #1240668/29/04; 01:26:45

CometoseSomething borrowed from a friend at GE on HUI performance past 5 years#1240678/29/04; 08:48:10

For those of you who are interested in history , the following may be of interest:

HUI 323 by October 2004
(McIsaac) Aug 29, 10:36

That's my forecast based upon my interpretation of TA.

Examine the 3-year chart of HUI below.$hui,uu[h,a]daoayiay[df][pb200!f][vc60][iut!uh89,21!lp88,21,3!lb21!la8,13,5][J30968433,Y]&listNum=1

In my view it is overtly obvious that all technical indicators have bottomed, and are moving bullishly north. Take special notice of the top indicator, Slow Stochastics with an 89 period. It is readily apparent this indicator bottomed 5 times previously in the past 3 years. Following is a compilation of rally magnitudes and their time periods that resulted after each Slow STO bottom.

SS/Bott…Bottom/Val…..High…...Rally %...Rally Period

Oct2000……….35.31……………80.00……..129%......6.0 months
Nov2001……….59.86……….154.99…...160%......6.1 months
Aug2002……….92.82……….138.83…... 49%......1.5 months
Oct2002………102.99……….154.92…....50%......2.5 months
Mar2003…….112.61……….258.60…...129%......9.0 months

……………………….........……Average…….103%......5.0 months

The chart also shows HUI put in another decisive bottom in April/May. This allows me to forecast an estimate of the evolving rally magnitude. If we assume this rally will replicate the average of the past 5 rally events, HUI might reach 323 by early October 2004.

Whereas historical results cannot guarantee future performance, it sure as hell can give lines of probability. And if you assume we are in a secular PM bull market – as I do – then you are forced to conclude my forecast has merit and high probability of materializing within the indicated time horizon. Furthermore, in the event the US dollar accelerates its decline, then HUI 323 may well be achieved in a shorter time period.


I extended the chart back to 1999. Here you can see that the another Slow STO bottoming in October 2000. Noteworthy is the fact all other technical indicators also bottomed emphatically in October 2000.$HUI,uu[h,a]daoayiay[d19990520,20040828][pb200!f][vc60][iut!Uh89,21!Lp88,21,3!Lb21!La8,13,5][J30968433,Y]&pref=G

This is further proof in my mind that the April/May current bottom is valid, and which actually kicked off the new leg of the PM bull market.

CometoseMcHugh on the Markets Aug 30#1240688/29/04; 10:25:41

I really appreciate the analysis here and thoroughness of it relative to a broad spectrum of markets.

Money flows where it wants to .......
it's like water and physics of gravity ......water flows with gravity according to laws in Naure.....ARE there laws in ECONOMICS..........Adam Smith thought so and said so ...
Free Markets cause resources to flow to their highest and best use (Free markets cause efficiency ) Are there unkown laws of Economics at work still .......that cause money and emphasis to make flows happen hither and yon....
I think so but I couldn't put my finger on it .....However,
the US MEDIA can only control what 280 million AMericans think act and do directly ......Fortunately that does not directly affect the actions of the other 6 billion people of the world or perhaps the largest component of Wealth in the World......Someone probably has a book with World demographics and the components of wealth therein .....

How to factor in the Capacity of the Fed to infuse massive amounts of paper dollars into this mix is i'm sure quite a conundrum to some (control freaks who aways have to KNOW; what a joke ) I say as I look out into the UNIVERSE on a dark Moon lit night into the VAST UNKNOWN .......KNOW WHAT??? Most are FULL OF PRIDE ABOUT WHAT THEY KNOW , WHERE THEY WENT TO COLLEGE, WHAT DEGREE(S) THEY RECIEVED, HOW THEY ARE KNOWN IN THE COMMUNITY , WHAT THEIR KNOWHOW IS and HOW THEY ARE PAID IN FIAT FOR THAT KNOWHOW .......

and i say that the greatest vulnerability to humans individually and collectively at these BEST of times {DISSEMINATION OF INFORmation (what is available because of the Internet)} and these Worst of Times {Dissemination of INformation (What amount of information is controlled because of AVARICE and THE SOLD OUT MEDIA's proclivity to WHORE ITSELF OUT FOR MONEY )hidden agenda to control what people think}}....... is WHAT THEY DON'T KNOW........

Sorry for the editorializing ...

McHugh , I have to believe is one of those public figures that has to be very careful what he says openly about GOLD because of his Ties to Bankers , or perhaps his position relative to Mentors at ELLIOT WAVE .....(ROBERT PRECHTER is in my opinion way off the ball in his timing calls ....has been with respect to longstanding issues related to Stock Market going back into the 80's , more of an intellectual with respect to info than a Practitioner).

McHugh again is very sluggish / bearish on GOLD ......
(this is a good time to be bearish at the bottom of the yearly cycle) but today he makes a big allowance for reconciling the future action of the Stock Indexes , Bond Market and Dollar in the following Statement ....

"If equities are about to decline in earnest, how could Treasuries accompany them? Wouldn't a flight to quality rally Bonds? Maybe. However, should the Fed respond to an equity event with massive infusions of fiat paper, the U.S. Dollar would likely take a hit and Bonds would follow."

This also opens McHugh's back door which is VERY LARGE BACK DOOR to the Veiled potential for gold to soar as a result.........

If we are about to see a continuation of the Paper disaster that started in 2000 and that is going to affect the BOND MARKET which McHugh says looks like it is in for a big Fall (85.00) and that looks like it is going to affect the dollar adversely , where is all that FIAT RUNNING DOWN HILL ......going to go looking for as Safe Harbor and OASIS from the HEAT THAT IS BURNING intensely to PURGE THE IMPURITIES OF PAST DECADES of BANKER INDESCRESSIONS AND INFIDELITIES......

Some of it is going to flow again where it has been flowing on a cyclical basis for the past three years.....although at this time with perhaps more presaging urgency .....and earnest.

USAGOLD / Centennial Precious Metals, Inc.A risk-free request, helping you enter the gold market with grace and confidence.#1240698/29/04; 12:49:14">Get a head start on the gold market!
TownCrierA "Food" for Thought HEADLINE: Inflation grows in China's rice paddies#1240708/29/04; 13:01:01


It's not the cost of Saudi oil that threatens Australia's economic dream world of low inflation, low interest rates and the highest terms of trade in a generation.

It's the price of Chinese rice.

The world's rice-driven inflation problem starts in China's poor inland provinces, like Guizhou, in the country's south.

Most of the province's 39 million people live in farming households.

The average annual rural household income there is just 707 yuan, or $120, according to the Chinese Bureau of Statistics. Factory workers earn roughly 12,000 yuan a year.

So it is unsurprising that, according to the Ministry of Agriculture, 98 million rural workers from provinces like Guizhou have made their way to the big cities in just two decades of industrial reform.

Joining the exodus from rural, inland China to the industrial coast, 61 million workers at state-owned enterprises have been laid off in the past six years.

They have "come down the hill", to use the Chinese euphemism, xia gang.

The rural migrants and redundant state workers form the world's largest pool of surplus labour. They have powered the world's largest and fastest industrial revolution and created the world's greatest export boom.

The enormous increase in supply has caused prices for manufactured goods to fall sharply in China.......

The falling prices have been exported to countries like Australia, helping to hold down global inflation and allowing the rest of the world to buy more imports for their money.

All of this would seem to suggest an infinite supply of labour that allows China to produce an ever-increasing range of manufactured goods at ever-diminishing prices.

But the picture appears to have dramatically changed this year - while the fearful reaction from rival manufacturers in the rest of the world is peaking.

While prices for manufactured goods continue to fall in China, food prices have sky-rocketed.

...Rising agricultural prices have caused Chinese consumer prices to jump 5.3 per cent in the year to July 31, after six years of deflation.

This means bicycle factory owners in Guangzhou are being forced to offer something more to convince farmers to leave their rice fields in Guizhou, just as bicycle export orders are accelerating....

...rising wages must at some stage flow into rising prices. The inflationary impulse will affect China's export markets.

"The quiet shift in supply and demand for rural labourers may signal China's infinite supply of cheap labour is coming to an end with profound implications for China itself and the world around it."

Pretty strong stuff - and another reason why central bankers are spreading their attention to include the world's second largest economy.

----(from article at url)-----

If time allows, click link and read this interesting perspective in full, beginning to end.


Chris PowellHedging emasculates Australian gold mining company#12407108/29/04; 19:28:46

.... Call them the DAUGHTERS of Gwalia now.

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.

NedA question for Black Blade.......#12407208/30/04; 05:30:35


A long controversial article is attached claiming that 'peak oil' is not a reality. Russian 'Ultra-deep/Super-deep' oil wells apparently will end the so called misery.

Any thoughts on this?

Thanks in advance.

WaveriderAttacks bring Iraq's key southern oil exports to a halt #12407308/30/04; 06:41:11

"Oil exports from southern Iraq have been brought to a complete halt, a senior oil official said Monday, following a spate of pipeline attacks launched by insurgents trying to undermine the nation's interim government. Oil flows out of the southern pipelines which account for 90 percent of Iraq's exports ceased late Sunday and were not likely to resume for at least a week, two senior officials from South Oil Co. said on condition of anonymity. The latest strikes against five pipelines linked to the southern Rumeila oil fields immediately shut down the Zubayr 1 pumping station, forcing officials to use reserves from storage tanks to keep exports flowing for several hours. The reserves ran out late Sunday, the South Oil Co. official said."

Waverider: Should affect both POO and Spot today, one'd think.

J-BullionRumor#12407408/30/04; 08:36:54

I have just heard that a major Australian gold firm just declared bankruptcy....that was short 82 tons of gold that now needs to be covered.

Take this as a rumor until confirmed.

Chris PowellBankruptcy of overhedged Australian gold miner is no rumor#12407508/30/04; 09:01:16

Check last night's GATA dispatch about Sons of Gwalia.
MKAustralian mining company#12407608/30/04; 09:29:29

When Chris Powell posted that story last night I took a look at it and was struck with the fact that the creditors were unwilling to accept the workout Gwalia offered. That shows there were not many options available. It also shows the extreme pressure on bullion banks to get gold repaid from their borrowers and nothing else. And there's good reason for that as anyone who has followed the analysis here over the years will attest. Even settlement in paper might translate to acquisitions of the physical metal if possible in cross transactions designed to replace central bank paper inventory with the real thing. This morning's Financial Times points out that petro nations are not recycling dollars back to U.S. Treasuries like they did in the 1970s. They are going to the euro. One step away is to have central bank gold lenders in the so-called third world demand the metal itself over another piece of paper representative of same.

Argentina's gold procurement represents a faint ping that could become louder as we go forward. The rest of the world doesn't have the same view of gold that the Anglo-American nations do. Also, the action in this morning's gold market seems to verify that analysis. Someone, somewhere is out that gold and the bullion bank as the guarantor is responsible for paying it back. With the Australian central bank virtually devoid of gold, due to its misguided gold policies over the years, there is no way to bail out Gwalia (and by proxy the bullion banks signed on the dotted line.) One or more of the bullion banks in the group, it seems, moved to force repayment (probably in gold) and Gwalia took bankruptcy. This whole affair could end up being prototypical and a warning of what's to come as more and more over-hedged mining companies find their backs to the wall. Look out for the same from South Africa and Canada -- with goldless Canada being the most likely suspect to lose a mining company or two to bankruptcy, and possible soon.

This situation could become a rolling crisis for the bullion banks and the mining companies. I do not believe however that this will become a systemic crisis involving the banks as a whole. The real result necessary to settle the problem however, if this analysis were to hold up, would be much higher gold prices!

USAGOLD / Centennial Precious Metals, Inc.Exercise your savings decisions to enjoy personal sovereignty and security#12407708/30/04; 11:21:09

The Wealth of Nations???

paper burns, gold endures

A picture may be worth a thousand words,
but gold in hand can be... priceless.

Call Centennial for Best Prices or Order Online.
1-800-869-5115 Extension 100

Gandalf the WhiteWOWSERS !!! <;-)#12407808/30/04; 11:31:21

Thanks, Sir MK, Sir Chris Powell and Sir J-Bullion !!!
THAT is an eye-opening "event" of "things to come" !
Does having your OWN "RESERVE" of little GOLDEN coins that you "can" get from USAGOLD!
It looks to me and the Hobbits that the "getting" may be becoming much harder in the future !
What does this "event" tell you ?

Gandalf the WhiteMore on the "Sons of Gwalia" story !#12407908/30/04; 11:56:17

The overhedged Australian gold miner, "Sons of Gwalia" bankruptcy article has been UPDATED with the addition of a GRAPHIC showing interesting data !
Take a "look" at the LINK !
On that GRAPHIC, the $ are Aussie$ and not US$ !!
--- Looks as if the hedger Bullion Banks are starting to see the GOLDEN LIGHT !
PS: All thoughts are complete, this time!

J-BullionI stand corrected#12408008/30/04; 12:07:37

It was 99 tons, not 82 tons short, and the usual culprits are involved.

Citigroup Inc. (C) is understood to be the company's biggest hedging counterparty, with an exposure of between A$100 million and A$150 million.

Other counterparties include: BankWest, a unit of HBOS Plc (HBOS.LN); Goldman Sachs Group Inc. (GS); JP Morgan (JPM); Dresdner Bank AG (DRB.YY); Commonwealth Bank of Australia (CBA.AU); Australia & New Zealand Banking Group Ltd. (ANZ) and HSBC Holdings Plc (HBC).

As of June 30, Sons of Gwalia's 3.1 million-ounce gold hedge book had a negative mark-to-market value of A$348 million. It also had currency hedges that were A$75 million in the red.

Sons of Gwalia also owes US$170 million to U.S. pension funds, following a private note placement in 2000 arranged by JP Morgan.

DruidSons of Gwalia collapses#12408108/30/04; 12:31:02,5936,10617836%255E3122,00.html

"GOLD and tantalum miner Sons of Gwalia, founded 22 years ago by Perth mining identities Peter and Chris Lalor, shocked the share market yesterday by calling in voluntary administrators.

The company, which a few years ago was flying high as the electronics boom sent demand for tantalum soaring, and which weathered the downturn of the past couple of years with the help of solid gold production, has basically run out of enough gold to cover its forward commitments.

The group's collapse, which will led to administrators Andrew Love, Garry Trevor and Darren Weaver of Ferrier Hodgson attempting to sell the company's gold assets and recapitalise the tantalum operation, comes only four months after then executive chairman Peter Lalor stepped down from the company's board.

Mr Lalor handed over the reins in April to new managing director John Leevers – a former Pioneer building products executive who signed on for $660,000 a year plus three annual allocations of 150,000 Sons of Gwalia options – and new non-executive chairman Neil Hamilton.

Since that time a strategic review of the group's assets – which had been expected to result in big write-offs of capitalised expenditure that the group was carrying on its books – has been under way.

Trading in Sons of Gwalia's shares – which soared near $10 back in 2001 but had plunged to $1.36 by March 2003 – was halted yesterday.

However, the shares – which fought their way back to $3.93 early this year before fading again – closed on Friday at $1.30 with no one in the market expecting news as dire as yesterday's.

Sons of Gwalia said the review found "a serious deterioration in the status of (the company's) gold resources and reserves", a deterioration so severe that "it raised doubts about the company's ability to meet its hedge book commitments".

The company and its advisers spent the weekend trying to negotiate a "standstill agreement with all creditor counterparties (to its hedge book commitments) but was unable to obtain unanimous support for the proposal".

Directors decided there was no alternative but to put the company into voluntary administration on the basis it was likely to become insolvent.

Sons of Gwalia said it had been advised that the deterioration in its gold reserve and resource position would constitute "an event of material adverse change under (its) counterparty agreements".

It said: "The company proposed a standstill agreement with all creditor counterparties to allow an orderly reorganisation of its affairs.

"However on Saturday, the company was advised that it was not possible to obtain unanimous support for the proposals".

Sons of Gwalia has a string of reasonably low grade gold projects in the Leonora, Southern Cross and South Laverton regions of Western Australia, plus its tantalum operations at Greenbushes and Wodgina.

At June 30 last year, it claimed to have total gold ore reserves and resources of about 170 million tonnes.

Mr Leevers had signalled that mining at least some of the resources may not be viable and the company indicated at the recent Diggers & Dealers Forum in Kalgoorlie that it was facing gold hedging losses and may have to buy gold to cover forward sales.

But analysts said though the company faced problems, few had expected it to do a Pasminco.

Mr Love said yesterday the group's operations were operating and the administrators would seek a standstill agreement with counterparties and the group's banks.

"As to whether a recapitalisation of the minerals division can be effected, it will probably be about two months to work out," he said."

Druid: More info.

DruidSons of Gwalia's golden days end #12408208/30/04; 12:36:26

Australian miner Sons of Gwalia said yesterday it was facing bankruptcy after discovering its mines might not have enough gold to pay back loans.

The company, one of Australia's oldest mining houses, moved into voluntary financial administration, underscoring the gamble of hedging contracts that allowed it to sell gold not yet mined for a fixed price.

"They could no longer afford to carry their hedges, given the poor state of their mines," Hartley's mining analyst Jonathan Battershill said.

Sons of Gwalia had borrowed heavily through a complex web of gold hedges that committed the company to selling millions of ounces still in the ground at mines scattered around the Australian outback - a practice increasingly shunned by mining houses as too risky.

Administrator Ferrier Hodgson has called for a meeting of creditors in one month.

Analysts said Gwalia may have found itself facing big losses by being forced to buy the gold to deliver into its hedges at a higher price than it was contracted to sell it for.

Many miners have adopted no-hedge policies, preferring to take their chances on world bullion prices, which have risen 40 per cent since 2002.

The tactic protects miners when prices fall, but can backfire when gold goes up.

Gwalia, which had been due to release its full-year results yesterday, launched a review of its business this year as it struggled with declining gold output and below-forecast demand for tantalum, used widely in making computers.

"The review of operations identified a serious deterioration in the status of the gold reserves and resources, which raised concerns about the company's ability to meet its hedge book commitments," Gwalia Chairman Neil Hamilton said in a statement to the Australian Stock Exchange.

Gwalia on the weekend proposed a moratorium with creditors to allow it to restructure, but was unable to win unanimous support, leading it to seek protection or face collapse.

"There was no alternative but to put the company into voluntary administration on the basis that the company was likely to become insolvent," Hamilton said.

Amid efforts to cut its hedges, Gwalia warned in July that net profit for the 12 months to June 30 would fall by almost 40 per cent as it struggled to find richer ores.

The company's shares, which hit a record A$9.97 in mid-2001, slumped to their lowest level in nearly 20 years this month, closing on Friday at A$1.30.

"There was an expectation that the company was going to the wall," ABN Amro mining analyst Warren Edny said. Gwalia's once-rich Tarmoola gold mine was close to being shut down after one of the walls collapsed, making it too dangerous and uneconomic to mine.

Other mines needed work in order to maintain Gwalia's annual production rate of more than a half-million ounces.

Gwalia's output fell 6 per cent to 521,081 ounces in the year to June 30. In the meantime, it cut its hedging position by 209,000 ounces in the fourth quarter of fiscal 2004 and by a further 24,000 ounces so far this year, in order to gain greater exposure to rising bullion markets.

But its hedge book, structured in a combination of put options and forward sales, still stands at about 2.6 million ounces.

Ghana's Ashanti, now part of AngoGold Ashanti, was forced in 1999 to buy gold at higher prices than it could sell it to satisfy hedge commitments, taking the company to the financial brink.

The world's biggest gold miner, Newmont Mining, has disposed of 10 million ounces worth of hedges inherited when it acquired Australia's Normandy Mining to keep in line with its no-hedge policy.

Newcrest Mining, has also announced steps to reduce its hedge programme.

Druid: ANOTHER perspective.

Federal_ReservesA nation of Grasshoppers#12408308/30/04; 12:41:45

You must remember this old fable.

The ant works hard in the withering heat all summer long, building his house and laying up supplies for the winter. The grasshopper thinks he's a fool and laughs and dances and plays the summer away. Come winter, the ant is warm and well fed. The grasshopper has no food or shelter so he dies out in the cold.

A nation of Grasshoppers.
Did you see the savings rate today. New Low (.06%?).
Combine that with the disgraceful trade and fiscal deficit.

All the ants have died!


"BARC whose main purpose is to put ethics in on the American financial system, which it claims includes the worst offenders of them all, the 3,000 or so lawyers who run the United States Securities and Exchange Commission, has prepared preliminary court papers ready to file with the United States Court of Federal Claims.

Washington D.C. - Free and Clear Press Corps - Litigator John O'Quinn is one among hundreds of legal professionals and professors of law at schools around the United States about to be approached by a growing number of volunteers working directly and indirectly for and with the Bank Activities Reform Commission, (BARC) a group being led by financier Gabor Sandor Acs, who has challenged George Soros publicly with a $7 billion bet that George Bush will be toppled in the 2004 election. Acs is guaranteeing it.

BARC whose main purpose is to put ethics in on the American financial system, which it claims includes the worst offenders of them all, the 3,000 or so lawyers who run the United States Securities and Exchange Commission, has prepared preliminary court papers ready to file with the United States Court of Federal Claims.

The bonanza: the entire trading system in the U.S. which BARC claims has cost business and the government over $5 trillion in lost capital, $7 trillion in lost tax revenues, (enough to pay off the national debt) and a drop in the purchasing power of the US dollar in foreign markets during the past three years in excess of $20 trillion.

John M. O'Quinn, the 62-year-old senior partner of O'Quinn, Laminack & Pirtle, the law firm that has won $1.5 billion in fees from the makers of silicon breast implants and cigarettes is, according to some sources being courted by BARC volunteers to have his clients and approximately 95 million stockholders join in what is definitely the largest single claim against the United States government in known history.

The previous known record setting case was a $500 million claim against the government from the people of the Marshall Islands for damages and reparations for nuclear bomb testing which occured during the late 50's near the Atolls that caused cancer and other diseases to the natives there. The court case lasted two decades but the government eventually lost.

BARC recently announced that it is joining another multi million dollar class action led by a homeless person in Oregon against the Federal Reserve Bank system for failiing to redeem a dollar bill in gold, which is still lawful money of the United States of America.

In preliminary documents being circulated to law professors, top law firms, and various public interest groups, the preparations are being made for claims which include that the Securities and Exchange Commission has used various excuses over the past several decades, the biggest one being bugdetary consrtraint and a lack of staff another, to neglect to enforce the securities laws as passsed by Congress, and instead use them as a political tool of the financial elite to crush and destroy business people who were seeking to raise capital.

The claim? $5 trillion in punitary damages, and $15 trillion treble damages under RICO.

O'Quinn currently has a hand in 15 lawsuits alleging that various brokerages (including Ameritrade and E-Trade) and market makers like Knight have destroyed his clients by helping to sell the companies' shares short in a scheme to run their stock prices into the ground.

The damage is daunting: O'Quinn says 1,000 companies have lost at least $100 billion in market capitalization. "If you short a stock for the sole purpose of killing the value," he says, "that's a threat to the view that we have an honest market."

Rather than focus on the brokerages, which are already using their financial clout to buy off the government with multi billion dollar settlements for false analysis, market timing, and other corrupt practices, BARC is going for the jugular vein of the regulators.

"The SEC staff has known for six years, even before Harvey Pitt was ousted from office by various groups led by the CEO council, that the mutual fund industry was engaged in siphoning off on average $5 billion a year from stockholders pockets.

Various mechanisms, including decimilization have been implemented by the industry to secure the ongoing penny pinching, and current efforts at bringing the unethical trading practices could have been brought under control by any number of US Government agencies, including the FBI, the Secret Service, the Federal Trade Commission, and the newly minted Department of Homeland Security.

On one side of the coin is a big fuss is over naked shorting, a practice that's been around for decades and that is sometimes legal, although questionably ethical.

Normal short-selling involves borrowing real certificates for stock, selling the stock, buying new shares at a later date, and using the new certificates to replace the ones borrowed. Naked short-selling differs in that no real certificates change hands. Instead, the short-seller creates a paper entry showing that it owes shares to the stock buyer and will get around to delivering them later.

This type of operation has been ongoing since the evolution of book entry book keeping, a practice pioneered by the banking industry to transfer funds from the Federal Reserve to member banks to provide liquidity on an overnight basis. Wall Street has taken the electronic platforms to new levels of sophistication.

Naked short-selling is legal if done by a market maker in a temporary arrangement; it's normal for a marketmaker to be net short for a day or two and then close out the position by buying real shares later. Naked shorting can be illegal if done with the conscious intention of leaving the short position as a paper entry indefinitely. And there's the rub.

Naked shorting opens the doors to billions of dollars in unethically and ill gotten gains. The unwary investors who were not advised in prospectuses in any public offering during the past decade that such a possibility existed as a real and imminent danger to capital and risk factors when determining whether or not to invest, was in fact defrauded."

Druid: Oh it is so much easier to take delivery of your wealth/savings then to be entangled in this type of a web. Where do you begin to parse this one out? My question would be, why can't the paper instruments representing the physical commodities be sold short naked as more of a deterrent then representing a true "market" play?

USAGOLD Daily Market ReportPage Update!#12408508/30/04; 13:41:29">
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.

---closing market excerpts----

Gold futures on the Comex division of the New York Mercantile Exchange pushed back to recent highs Monday on fund and dealer buying amid a scarce-seller environment.

The most active Dec contract settled $4.60 higher at $410 per ounce.

News of the bankruptcy filing of Australian miner Sons Of Gwalia Ltd. and the terrorism concerns associated with the start of the Republican National Convention in New York City were cited as the main factors behind the buying interest, while a public holiday in the U.K. ensured below-normal liquidity.

The Perth-based Sons Of Gwalia said Monday that it appointed voluntary administrators over the weekend after identifying a "serious deterioration" in the status of its gold reserves, which meant the company lacked the resources to meet its hedge book commitments.

This prompted speculation that the firm may have to embark on a de-hedging spree to unwind its estimated 2.6 million-ounce hedge exposure.

At the same time the U.S. dollar eased slightly against its rivals through the day to heighten dollar-denominated gold's allure in other currencies.

News of further sabotage incidents at oil fields in Iraq also offered early support to gold prices by reminding players of the still highly volatile geopolitical situation in the Middle East.

Dealers said physical demand from India and the Middle East should continue to underpin prices in the $400-$402 area over the coming days.

----(see url for access to full news, 24-hr newswire)----

BelgianThe month of august....#12408608/30/04; 15:30:37

...Is to be percepted as another month in the long row of ..."orderly"... financial/monetary periods. In this seemingly perfect calm before the coming storms ...there was more evidence of the US$ increasingly being managed by those who are stuck with it. Those who accepted and supported the dollar-standard for 5 decades.

The decline in dollar exchange rate was "gently" forced to remain in its major (and final) down-trend...simply the "Argentinian" way (Goldreserve-redistributions). Replace the dollar with GOLD...and do it at your (non dollar factions) convenience ! Take your time...

The dollar (currency system) will not have changed (change), intrinsically...when the goldprice rises to whatever projected highth of...$600...$800...etc.
The rising oilprice is NOT shorting the dollar (for infla compensation - x25 since 1970) but getting off the dollar-system...orderly ! OPEC's main task to provide an abundant flow of "cheap" no more.

This calm and disciplined, prolonged order is evidence of an unspoken concensus between gentle duelling rivals.

The perfect time for "petro-euro" depends on how the redistribution of goldreserves is proceeding. Oil for euro means that CBs have to replace the accumulated dollar-reserves with euro-reserves as the "new" Goldreserve numeraire. This "must" happen orderly and progressively wich is in everybody's interest.

We have passed the culminating point where adjustments for all sorts of inflation can be straigthened. We (the world) are working on a new International Monetary Order...skipping the cyclic adjustments of the past. That's why many, if not all, explanations (statements) for public consumption, are so contradictional.

Up until now, we agreed and accepted to mark everything to the increasingly hegemonic dollar-market. Tommorow things will be marked to the multi-polar euro-market...simply because of FREEGOLD. It took us, unfortunately, two devastating world wars to the idea. Shame on us.

slingshotHello Belgian#12408708/30/04; 15:50:42

Good to see'ya.

Cometose@ Druid re: BARC#12408808/30/04; 17:06:47

After the Lawyers get through with the SEC and THE FIRMS of ALL VIOLATIONS ........Perhaps they will address the

misetich Reality Check: U.S. Auto Dealers Say Sales Sink, Sink in August Aug 30 / 10:54 EDT#12408908/30/04; 17:49:40


NEW YORK (MktNews) - U.S. auto dealers say sales sank in August despite the mightiest efforts from factories to prop up the market with incentives -- but nothing could calm consumers beleaguered by political and economic uncertainties, not the least of which is what to do about
oil prices.

An inventory overhang of 2004 models for the Big Three automakers will likely mean even greater incentives ahead to clear space for the model-year changeover, amid fears that car buyers have turned a deaf ear to them.

Some imports appear to have been cleaned out of stock, which will depress their numbers as well.
"I think the Northeast is having what I call a silent recession," said Vincent DiSimone, president of White Plains Auto Group,

The "auto story" is significant as it is considered a bellweather of US economic growth - which is going nowhere

The "soft-patch" is getting longer - August culminates the 3rd straight month of below expectations economic growth - which does not bode well for JOB CREATION

The lack of JOB CREATION is the achilli of not only the US economy but the industrialized west, including JAPAN, where unemployment is rising

Things will get much worse, as the effect of The 2004 Oil Shock And Awe is being underestimated

All Aboard The Gold Bull Express - Part ll

Smeagol...we ssmells ssmoke#12409008/30/04; 18:35:53

Ssir J-Bullion (08/30/04; 12:07:37MT - msg#: 124080):

"As of June 30, Sons of Gwalia's 3.1 million-ounce gold hedge book had a negative mark-to-market value of A$348 million. It also had currency hedges that were A$75 million in the red. "

Are we right in assuming this means they were(are) chained to this 'hedge' at about 470 Aussie-dollars per ounce? Is that how it works, and how it back-flashes? Ssss! OUCH! Fire-alarm bells are probably ringing ssomewhwere... sss...hmmm... if thiss fire expands, perhaps the 'Powers' will try one lasst time to force-lower It's price to give others involved in these kinds of things one lasst chance to ssave themselves... but they may find only (very flammable) 'Fiat-paper' in their hoses, instead of 'Gold-water', because us Gold-hearts have ssiphoned It off, ounce by cool hard refreshing ounce (cackle!)... O well, maybe not, but it's fun to think about it that way...


Black BladeRe: Ned - msg#: 124072#12409108/30/04; 19:51:39

That's the old Thomas Gold theory of abiogenic hydrocarbons locked in the earth's mantle. He conned the Swedes with another deep drilling project in the Siljan region too a few years ago (turned out to be a costly bust). It remains unproven as a viable source of hydrocarbons.

There are ultra-deep wells in the Gulf of Mexico, however, the costs are very high and require specialized drilling ships. The lifting costs are prohibitive in most areas and therefore it is not a long-term solution unless oil prices remain very high with a good prospect on return.

BTW, the title and tone of the article is "interesting" to say the least. Anyway, this theory has been floated around from time to time over the 30 or so years. GOM rigs are still pushed further out into the Gulf as shallower mature wells reach the end of their production life. Also, the Siljan and Kola ultra-ultra deep drilling projects ended with melting drill bits and warped drill strings before the projects were abandoned. Oil and gas will not exist at those temps and pressures for long. The Thomas Gold theory stems from observations of a couple of planets/moons in the solar system seemingly devoid of life and covered in oceans of frozen methane. Cheers.

- Black Blade

Dollar Bill.,.#12409208/30/04; 22:07:43

Ned, this link provides a look at one of the possible games that the big boys could play. This link was on the forum before, posted by someone else.
Who knows all the tricks the globalists might have up thier sleeve as we march on.
Guliani gave a great speech tonight.

Gold HillBlack Blade#12409308/30/04; 22:12:02

Have you ever considered writing a book? I would be one of the first to buy.
968@ Belgian#12409408/31/04; 00:50:56

Hello Belgian, glad to have you back. I hope you had a great holiday. I would like to hear your opinion on messages 123929, 123931, 123934 and 123952 if you have time. Thanks in advance !
BelgianCole-seed oil....#12409508/31/04; 01:10:36

Euroland is already looking behind peak oil with vegetable oil in diesel engines. Present cost is 0.70 €/liter without taxes. No taxes will be imposed up until 2010. Present cost for taxed diesel is 0.90 €/liter (one gallon is +/- 4 liter).
But as is in the global political economy, the production of cole-seed-oil as fuel is strictly regulated.

There definitely are viable oil-alternatives ! But oil "flows" and the "pricing" always were and still are 99.99% politically loaded. That's what all the purposely created oil-UNstability is for. The dollar has been/still is, hooked on cheap oil...the euro has been/still is, hooked on the enormous oil-tax-income ! Soon, the taxes on FreeGold might replace the declining oil-tax-incomes in the coming transitionary period. Very convenient for the established collective that needs to tax after each round of increased confetti redistribution. The world as it is.

(Hoi slingshot)

968@ Belgian message 124095#12409608/31/04; 02:43:56

Hello Belgian. You say in your previous post : "Soon, the taxes on FreeGold might replace the declining oil-tax-incomes in the coming transitionary period."
Europe has an oil demand of ca. 16,35 million barrels a day (according to IEA). Let's say the taxes and VAT (accijnzen en BTW) in Europe averages 80 % on oil (low estimation). How high will the tax on Freegold be to compensate this ? How much gold has to be sold a day to compensate this ?

BelgianGood morning 968#12409708/31/04; 02:44:34

Non American Gold stored in Anglo-American vaults dates from the time that much of the world accepted - supported - trusted, the dollar (reserve) system.

This old evidency is changing.

NOBODY is going to rock the Gold-boat to such an extend that cataclysmic dramas are being provoked. No confiscation (theft) of Gold that isn't yours and no unnescessary demand for physical delivery à la '71.

Much of the CB-Gold will physically stay where it is. Up until the moment that serious (inter-bancair) "threaths" should surface. I don't see this happening, simply because we are all in the same monetary boat and increasingly differ on the coarse of that boat.

The dollar and its former supporters "KNOW" that we are dealing with an outgoing $-system and preparing for the new €-system. Quite normal that the dollar wishes to remain the old captain for as long as possible, whilst his younger €-successor is preparing (struggling if you wish) for taking over.

The goldprice is not rising because the dollar is weakening...but because the euro is strengthening through goldprice rise ! Huge difference with the past. Hardly visible.

The (earmarket) CB-Gold doesn't need to move Physically.
The euro and dollar competition is about the kind of "Gold-Market" that should brought into place.

The International Monetary Order knows that the whole confetti thing is intrinsically worthless. That's why INSIDE the Banking fishbowl,... GOLD... is MUCH more important than the general public even might suspect in its wildiest dreams. That's why all these monetary managers stick to the rules for as much as possible and as long as possible. This is not a pirate's club even under severe stress. Because the crude realities shall not bring total cataclysmic collapse.

The (€)one who is acting more responsible than the other ($)one, has a lot of understanding, Why and How we got into this increasingly unworkable monetary $-mess. We simply discuss wich way out, is the best for all of us.

A geopolitical (hypothetic) example : Make Iran nuclear and restore power-balance in the ME with the result of oil-order !? Iranian Goldreserves (part of the axis of evil)have been physically repatriated from London, remember !?

The dollar will never be given a chance to blaim others for its ongoing debacle. The dollar (reserve-system) will desintegrate under its own increasing weight of mismanagement and finally accept that Another (€)system is more appropiate for a restart. It is this struggle that is going on for quite some time now. No need to steal/confiscate/threath other people's Gold Property, wherever it is physically located(stored).

Note that even the ($)IMF is confirming (at last) that the euro (system) is a Succes !!!

Keep in mind that GOLD remains the ultimate PROPERTY and not something that can be messed with ! Even in the most atrocious wars, people always go back to commonly accepted "rules".

Note that Chirac, Shroder are meeting at Putin's, today. Oil and Irak on the agenda.

Belgian@968#12409808/31/04; 03:15:50

A euro-FreeGold market will be a market where Physical Gold will be "bought" AND "sold" by each and everyone ! A "market" of a wealth-asset so high in price that only a small percentage on tax produces a big volume.

It is NOT a dollar that should say how "wealthy" you are...but the amount of Physical Gold that is your property, should (shall) say what exactly is your UNIVERSAL wealth . And wealth can be taxed if there is an appropiate "market" be re-created for everyone and not only for the privileged. The fiscal (tax) tool is part of the political economy. Untaxed bullion (géén BTW en accijnzen) is evidence that there is not yet an appropiate western goldmarket. Paris (euronext) physical goldmarket was even closed during august due to lack of any (public) trade volume .

Western Gold trade was succesfully marginalized for the greater public, without having it taxed as to kill the trade. All the available Gold went to the right places whilst the general public lost the wealth-notion of the precious. This process is running at its end. And allow me to repeat that much of the "PRICING" has very little to do with free offer and demand . This globe is on a political economy regime !!! And the financial brotherhood is allowed to juggle with pricing as long as it sticks to the outlined trends.
Isn't it a peculiar coincidence that stockmarkets have risen 25 fold since 1971...exactly the same (real) infla increase !?

USAGOLD / Centennial Precious Metals, Inc.... In Order to Form a More Perfect Union... (between You and Your Savings)#12409908/31/04; 04:36:44">Arm yourself with knowledge
misetichConsumer Spending Up Following June Decline#1241008/31/04; 05:43:16


Shoppers spent more freely in July as consumer spending rose slightly, though tepid growth in personal income raised concern about whether the trend will continue.
The appetite to spend was led by a rebound in demand for big-ticket goods, such as cars, helped by buyers' incentives.
High energy prices and a sluggish job market weighed on consumers' willingness to spend, creating what Federal Reserve Chairman Alan Greenspan had described as a "soft patch" in economic growth.
Americans' incomes, the fuel for future growth, nudged up just 0.1 percent in Ju