USAGOLD Gold Discussion Forum Archive

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R PowellMaybe, just maybe...#1278451/1/05; 08:01:09

I can post the first message of the new year?
What is it? An early book review of Marc Faber's "Tomorrow's Gold". The review so far, as I'm only just over 100 pages into the!!!
happy weekend and happy new year!

White RoseIn 2005, things fall apart#1278461/1/05; 08:51:16

My prediction for 2005 is that things fall apart quite rapidly. My sense is that we are going to be living through the 1929 crash, the great depression and World War II all on hyper-speed.

Right as 2005 starts, the dollar is wilting. Once it is convincingly below 80, things are in trouble.

In Iraq, 700 election workers based in Mosul quit last night. The war and the election are collapsing. Once the US cannot supply its bases by land, the world will assume that the US is defeated. That perception will cause a further, fatal collapse of the dollar.

So, gold starts its giant, swift upwards arc. My prediction for the top (in a few years) is $6,400 an ounce. But at the present moment, the rise in gold causes collapse of banks, stock market, brokerage houses and the mortgage industry. The US government nationalizes virtually everything to keep some Americans in food, money, and fuel.

Somewhere in here, we discover that the sole purpose of Homeland Security is running massive martial law/police state. Conspiracy theorists would have loved to gloat about their advance knowledge of this, except that the government shuts down the internet except to those who are "certified" by the government or Microsoft. Bill Murphy cannot show his amazing record of gold manipulation to anyone, since it becomes knowledge forbidden by the state.

Somewhere in here peak oil raises its ugly appearance, as there are more and more blackouts around the world. In the US, oil just gets quite expensive.

Somewhere in here, bad things and war are raging around Taiwan, Iran, and North Korea. The few survivers of the US military in Iraq finally walk into Kuwait.

As mountains of debt collapse around the world, the chances are slim that people have much time to discuss the lack of free elections anywhere around the world.

There is also a strong likelyhood of additional super-disasters because of global warming, melting polar regions, vast water pumping to get out the last drops of oil, and irresponsible tweaking of the earth to get images of 40 km into ther interior.

Now I am mad about getting this far without saying something about Bush and the supreme court. Use your imagination.

OK, so that is the worst case by far. I still say that this could be an interesting year when the ship of American Properity sinks beneath the waves. Have your lifeboat ready.

Happy New Year.

Clink!A Good New Year to all at the Forum !#1278471/1/05; 09:26:12

And to White Rose, that's the most depressing piece I have read all year ! Sadly, I think you are on the right track, but, looking back (with a degree of disbelief in some cases) at what has happened over the last couple of years, I would make a small wager that the details will still surprise us. For me, the really interesting point will be if/when the frogs realise that they are being parboiled. The pain of staying in the hot water is worse than the risk of jumping out of the pot. And if one frog jumps, will they all jump at once ?
I just have the uneasy feeling that we will the experience the Chinese curse, "May you live in interesting times".


YGMMany Eyes Glued to this Map#1278481/1/05; 09:47:44

Hoping there is not worse to follow....Daily we await the next phase of activity, hoping that the worst is over...YGM
YGMGLD...ETF...Buys more Gold......#1278491/1/05; 11:01:32

another 3.11 T...Now back up to 94.86 T.....Playing the Market like those in the know of Manipulation game...IMHO..
YGMDid You Know You Could Have this Free Service...?#1278501/1/05; 11:18:22

By Cell Phone, Pager and email..real time warnings of World wide Quakes....This service might have saved some lifes if everyone knew about it...Scroll page to bottom....YGM
Great Albino BatWhite Rose: surely you have read this...#1278511/1/05; 12:17:13

"The Burden of Empire" by Garet Garrett?

Remarkably accurate description of our time, written sometime after WWII.

I see one copy for sale at

You may be right in your predictions for 2005; however, I am repeatedly amazed at how SLOWLY things happen. But, there are such things as "discontinuities". The pressure builds under a volcano, until finally, one day - Boom!

The day-to-day price of gold is immaterial. This "thing" is going to blow, that's a certainty.

To all: best wishes for the New Year!


spotlightpost deletion#1278541/1/05; 15:05:28

Site manager:

Why was my post, "Misinformation" deleted???

YGMspotlite.....If I may answer your question.....#1278551/1/05; 16:39:04 post and a reply start a thread and it was obviously probably not a wanted topic....Hope you'll stick around and post again...YGM
mikalHappy New Year#1278561/1/05; 17:12:46

Today's Headline Roundup:
Chicago (IL) Tribune- Turkey Launches New Currency
ABC News- Sri Lanka Brewery Now Producing Water
CBS Marketwatch- Russia OKs $18 bln Siberia-to-Pacific pipeline: report
CBS Marketwatch- Venture-backed IPO proceeds more than triple in '04
Chicago (IL) Tribune- Wall Street Watching for Market Shift Bloomberg- Dollar Declines Against the Euro, Yen on U.S. Manufacturing, Jobs Reports
Bloomberg- U.S. Two-Year Treasury Note Declines, Capping Its Worst Year Since 1999
Los Angeles (CA) Times- China Draws In Foreign Retailers
Los Angeles (CA) Times- Judge Blocks Cap on Chinese Textile Imports
Los Angeles (CA) Times- Wal-Mart Lawsuit May Grow
Los Angeles (CA) Times- Stock Sales by Insiders Jump 20% in 2004
(January 1, 2005)

White RoseLet me try to explain myself#1278571/1/05; 17:34:43

I do believe that the market perceptions and market realities are tightly linked. I do believe that the value of the dollar is related to the perception of America's military power. I do believe that the dollar is close to a critical level.

It is my guess that if the war effort in Iraq gets further sandbagged (such as a cut in the land transport by the military) that would cause great concern across the world. The comparisons to Dien Ben Phu (defeat of the French in Vietnam over 50 years ago) would be apt. Even if the Americans believed this really did not affect things militarily, the world wide perception might be just what it would take to push the dollar into collapse.

A collapse of the dollar implies a leap in gold. A leap in gold implies that those who are short gold are ruined.

I leave it to others to see that the impulse to start other wars and to go nuclear would be very high.

My next leap is that I do believe that the government has a secret plan to deal with a financial collapse which would be put into operation quickly. Like all secret plans to save the world, it will have significant drawbacks.

I still say that it is plausible that the sweep of all these events could occur (or start to occur) within one calendar year. I am not saying it has to, but 2005 could be a famous year like 1968 which is a non-stop thrill ride full of surprises.

As I said before, happy new year.

mikalNew Year financial/investment info set to bolt out of the gate#1278581/1/05; 17:38:17

US Political, Economic Calendar - Week Ahead
melda laureFannie's covered' 5 billion in private placement?#1278591/1/05; 17:41:41

Sir the Forest: welcome! (If we haven't been introduced yet.)

A day or so ago, they had some poor survivor asking the reporter "Where are the americans!?". You notice she didn't beg "where is the UN?" or where is the IRC etc... For better or worse the world still looks to us as the last best hope of desperate causes, and for good reason, despite all all our numerous faults which the forum members can attest to. It is the nature of free people to act without being told- both here and in that other "land of the free" (Thailand) and in the "holy land" (sri-lanka) where the locals have amply demonstrated their commitment to their countrymen and foreign guests. I also see that the peoples of the UK have privately already contributed as much as their government has "pledged".

Sir YGM, already the year has started out better! The old exhortation of village elders on this continent has ever been "prove now that you are true people and not animals!" by which they mean "demonstrate your generosity". In fact all this chest pounding is getting to be a bit annoying, I suppose we can blame it on that "stingy" comment. At the least we can momentarily forget the mess that is Iraq (and the bigger tragedy that is Palestine).

Sir White Rose, I sympathise with your anguish- there is nothing "appropriate" about catastrophe. Like the sanctimonious morons who asked Jesus "who screwed up? The cripple or his parents?" What sort of question is that? Yet the only answer is still the same. "so that the glory of God may be revealed". The other answers: "God got you into this mess, let him get you out" are simply insane. Better something than nothing at all.

On a different note, Sir Townie: do you think all those FNM repos were in part related to that "private placement" in FNM because of arm twisting by the Fed? A secret bailout? Well, call it a gentlemens agreement. I have this picture in mind where Greenspan calls up the banks with the biggest collection of Fannie paper and says "In order to stay in the game I'll "let" you swap some bonds for stock.- or you can just watch the whole she-bang founder..."

In fact I can see Bob Rubin working the phones "let me tell you about a deal you cant refuse". So much for a "great short".

I have a prediction for 2005. An ounce will still weigh an ounce, green grass will still be green, and a dollar will still be intrinsically worth less.

na alyei i vinya loa!

mikalFiat frat party househopping: 'Slide in '05'#1278601/1/05; 18:33:07

St. Paul Pioneer Press | 01/01/2005 | Dollar's slide expected to continue in '05
mikalThai bhat, neighbor currencies expected to outperform#1278611/1/05; 22:15:19

Asian Currencies Seen Rising Again In 2005
by Rajat Bhattacharya - January 1, 2005

skiYear end ....#1278621/2/05; 00:49:40

For 2004 ...

AU up 6.1%

AG up 17.8%

Looking forward to another good year.

TopazA much-muted New Years Greeting.#1278631/2/05; 04:24:55

With well over 100 "aftershocks" (see Link) ...some quite substantial, the Sumatra region seems finally to be settling down. The precursor to Boxing Day was however an 8.1 Mag south of Macquarie Is (NZ)... Mother-Nature? now there's a misnomer!
Heartfelt sympathies to ALL those affected by this Calamitous Series of Events.

Our 'ol faithful Q4 repats should give the Dollar a kick along in the opening weeks of '05 and IF they can keep it under 85, should see Dow waltz through 11K licketty-split.
What I'd REALLY like to witness is Gold and Dollar in an upswing, as they BOTH look decidedly Northbound.

We'll see!

BelgianA Belgian Bilderberger, E. D'Avignon on 2005....#1278641/2/05; 06:27:27

There "IS" a global consensus on avoiding brutal "shocks" !

This is in sharp contrast with the general tone on this (and many other) forum.
But doing everything possible to avoid shocks, does NOT mean that the "transitions" have stopped evolving. On the contrary !!!
I wouldn't be surprised to see more and stronger volatility in '05, wich doesn't mean that this will automatically lead to shocking events on the monetary/financial fronts.

I even strongly suspect (almost certain) that the "Washington" in the WAGs, indicates the hidden agreement on avoiding (golden) shocks !

The transition from the dollar as global reserve to gold as the global reserve, shall evolve smoothly and broadly !
It is against this fundamental background that all ridicule gold-negative press plus perception building, must be seen.
Looks very paradoxal, but isn't.

During this tsunami catastrophe, the growing rift between dollar and euro blocks, is illustrated in political practice (co-operation). The (political) rift is silently widening at the same pace as the smooth changing of the $-€ currency exchange rate.

The competitive world players, *agreed* on stopping the goldprice crashing (below $250) and the attack on the euro-exchange rate (minus 30% versus $)...
This agreement is a mutual (win-win) one and is resulting in a calm truce between the diverging currencies ($-€) and their respective monetary concepts (contra-pro-gold)

Expect the price of oil, gold...monetary expansion...currency exchange rates, to keep on moving in the same UP_direction, with occasionally more and stronger volatility but most probably without shocking breakings.

It speaks for itself that this evolving situation continues to happen smoothly, for as long as all parties concerned do behave and don't provoke the outcome of a shock (rush-crash).
And it is on this voluntary constraint (discipline), that I have my doubts. In sync, of course, with what most forumers here, do express.

The "horizontal" behavior of the goldprice in euro (and some other currencies), is illustrating (evidencing) the above "agreed" smoothing of the transition !!!
Transition = dollar-reserve to gold-reserve.
One cannot throw out all dollar-paper in its utility of (symbolic) reserve and load up on gold as the new reserve, in one single big go ! Of course, we experience this process as going very slow. But this does not mean that it is not happening and that in the mean time we can kill the time with wrong assumptions.

In the above context, it is very understandable that gold cannot "yet" be openly promoted for the huge general public, as the next new reserve, replacing the old dollar.
Think how disturbing a massive rush into gold would be to the ongoing process that cannot digest any kind of brutal present !

Nation states and giants, need their time to accumulate (mostly through re-distribution of aboveground gold) the new gold-reserve, WITHOUT throwing the existing (already obsolete) dollar-reserve through the window (is impossible).
Let's keep on imitating them and get ready for the approaching finale.

Let us not forget that the dollar has the euro as second new competitor next to the old first one, gold ! Not the euro as yet another currency but the euro with its enhancing gold concept and therefor counting double as strong as gold alone. That's why the dollar has already given up on controlling the goldprice and the euro has been giving gold-containment support (CB-goldsales), as part of the agreement on smooth transition.

Does anyone see flaws in the above reasoning ?

CometoseBuffet's Bet and the following article #1278651/2/05; 08:04:17

make history the more exciting to read and understand in light of the maxim that : History repeats itself . Some say it rhymes ....

Let's see!

Vast Reserves of a Declining Currency are
Dangerous for Asian Central Banks

By Harold James
The Australian, Sydney
Saturday, January 1, 2005

(don't know if that particular link works right now myself)


The People's Bank of China and the Bank of Japan,
as well as other central banks in Asia, are in trouble.
They have accumulated vast foreign exchange reserves, estimated at more than $US2 trillion (AU$2.6 trillion), but almost all of these reserves are in US dollars -- which are rapidly losing their value.

All policy options for Asia's central banks appear
equally unattractive. If they do nothing and simply
hold on to the dollars, their losses will increase, but
if they buy more in an attempt to prop up the dollar,
they will only have a bigger version of the same

If, on the contrary, they try to diversify into other
currencies, they will drive down the dollar faster and
create greater losses.

They are likely to encounter the same sort of problem
with other possible reserve currencies.

The euro has been touted as the replacement for, or
alternative to, the dollar. Some enthusiastic Europeans
encouraged Asians to diversify their reserve holdings,
but the same scenario may well be repeated with the
euro in a few years.

Large fiscal deficits and slow growth may convince
foreign exchange markets that there is little future in
the euro, prompting a wave of selling, and hence
losses, for central bank holders.

There is a historical parallel with today's concern
about the world's major reserve currency.

The inter-war economy, shattered by the Great
Depression of the early 1930s, offers a series of
painful, but important, lessons for the present.

In the 1920s, the world economy was reconstructed
around a fixed exchange rate regime in which many
countries held their reserves not in gold (as was the
practice before World War I) but in foreign exchange,
especially in British pounds.

During the 1920s, some of the official holders of
sterling grew nervous about Britain's weak foreign
trade performance, which suggested that, like today's
dollar, the pound was overvalued and would inevitably

Foreign central banks asked whether the Bank of
England was contemplating changing its view of the
pound's exchange rate.

Of course they were told there was no intention of
abandoning Britain's link to gold, and that the strong
pound represented a deep and long commitment (in
the same way that US Treasury Secretary John Snow
today affirms the idea of a strong dollar).

Only France ignored British statements and
substantially sold off its sterling holdings.

When the inevitable British devaluation came on
Sept. 20-21, 1931, many foreign central banks were
hit hard and were blamed for mismanaging their

Many were stripped of their responsibilities, and the
persons involved were discredited. The Dutch central
banker Gerard Vissering resigned and eventually
killed himself as a result of the destruction wrought
on his institution's balance sheet by the pound's

Some countries that traded a great deal with Britain
or were in the orbit of British imperial rule continued
to hold reserves in pounds after 1931.

During World War II, Britain took advantage of this,
and Argentina, Egypt, and India, in particular, built up
huge claims on sterling, although it was an unattractive
currency. At the war's end, they thought of a new way
to use their reserves: spend them.

Consequently, these reserves fuelled economic populism.
Large holders of sterling balances, such as Nehru's India, Nasser's Egypt, and Peron's Argentina, all embarked on major nationalisations and a public-sector spending spree. They built railways, dams, and steelworks.

The sterling balances proved to be the starting point of
vast and inefficient state planning regimes that did
long-term harm to growth prospects in all the countries
taking this course.

Could something similar be in store for today's holders of large reserves?

The most explicit call for the use of dollar reserves to
finance a major program of infrastructure modernisation
has come from India, which has a similar problem to the
one facing China and Japan. It will be similarly tempting elsewhere.

This temptation needs to be removed before those
tempted yield to it.

Reserve holdings represent an outdated concept, and
the world should contemplate some way of making them
less central to the operation of the international
financial system.

To be sure, reserves are important to smooth out
imbalances in a fixed exchange rate regime, but the
world has moved since the 1970s in the direction of
greater exchange rate flexibility.

Reserves are also clearly important for countries that
produce only a few goods -- especially commodity
producers -- and thus face big and unpredictable swings
in world market prices. Dependency on coffee or cocoa
exports requires a build-up of precautionary reserves,
but this does not apply to China, Japan, or India, whose
exports are diversified.

Today's big surplus countries do not need large reserves. They should reduce their holdings as quickly as possible, before they do something really stupid with the accumulated treasure.

mikal@Belgium#1278661/2/05; 10:02:15

Re: "One cannot throw out all dollar-paper in its utility of (symbolic) reserve and load up on gold as the new reserve, in one single big go !"
[Why does the dollar have to be only symbolic? It can continue to hold value if a rejuvenated version is born of crisis- where gold in-ground and in vaults in the U.S.(including "deep storage category" one could presume)periodically values it using mark-to-market POG euro-style! I would expect that other nations will continue to diversify their reserves, but more rapidly, from a polygamous, over-fertile currency landscape.
Yuan (Remnimbi), Swiss Francs, Canadian and Australian $'s, Yen, Pounds, Euros, Rubles and others that may in fact merge euro-style.]
"Of course, we experience this process as going very slow. But this does not mean that it is not happening and that in the mean time we can kill the time with wrong assumptions."
[Yes slow, but accelerating and we must not exclude either, discontinuity and "unknowns" like those Fed, Asian and European Central bankers have warned of, whether it be currency markets, bonds, equities or any of the many, ubiquitous and obscenely leveraged derivatives.]
"In the above context, it is very understandable that gold cannot "yet" be openly promoted for the huge general public, as the next new reserve, replacing the old dollar."
[As "new reserve", old gold holders will come out of the closet and new ones will join them to overtly and officially reestablish public "wealth", "liquidity" and "hard asset" consciousness. But "replacing the old dollar" is a general, not a specific term such as some popular notions we're all familiar with by now. Given these notions exist and are broadly held, "replacing the US dollar" can elicit either misunderstanding or agreement depending on the situation: a) U.S. dollar suffers a hangover and tosses it's cookies before (most) everyone rises for breakfast. b)(The most likely scenario IMO because of long-standing PTB coordination, POG micromanagement etc.) Greenbacks enter a "crisis", i.e. continuation of exchange rate slalom on more and more thrilling slopes. This elicits PLAN A or PLAN B- either a euro-style dollar as described above or a merger with Mex. Peso and Can. dollar or other units or both PLAN A and PLAN B.
c) The "Almighty Dollar"(very old cliche) stabilizes near current levels, at least until I'm in my grave.
d) The Federal Reserve Note receives more sympathy and demand from foreigners turned off by alternatives because of extreme geopolitical turmoil, another natural mega-disaster, nuclear dislocations etc. for enough demand to slowly cushion U.S.$, in the absence of much other meaningful support.]
"Think how disturbing a massive rush into gold would be to the ongoing process that cannot digest any kind of brutal present !"
["Massive rush" is what many coin and bullion dealers experienced during the holidays and @ numerous points throughout the year(and last). Intra-bank gold holdings though, as we here often say, move unfettered and silently, "discreetly" even. And while many CB gold acquisitions are announced afterwards and properly documented on government accounting ledgers, many are not IMO. Russia, China and the U.S. are notoriously opaque about their PM holdings. While Fort Knox is becoming a term denoting disingenuity versus the old strength of the past, the examples above support the idea that Asians, Arabs and others including the U.S. and "giants" are likely disguising a "massive rush" into gold. Official U.S. Executive Orders and War Powers also enable land grabs anywhere within our borders.]
"Nation states and giants, need their time to accumulate (mostly through re-distribution of aboveground gold) the new gold-reserve, WITHOUT throwing the existing (already obsolete) dollar-reserve through the window (is impossible)."
[Absolutely, and just as time in a single moment or time's passage is relative to any observer, so is "gold accumulation" and reserves and currency "diversification". Without "throwing the existing dollar-reserve through the window", CB's (and some giants, though they aren't mutually exclusive)do indeed study, consult and coordinate activities(including the general tone and direction of policy initiatives and PR) purposefully, and even grudgingly acknowledge exogenous risk. "To every thing there is a season, and to every purpose under heaven"- Ecclesiastes]
"Let's keep on imitating them and get ready for the approaching finale."
[What the bureaucrats don't know can't hurt them.:)]

Solomon WeaverHappy New Year#1278671/2/05; 11:33:50

Have been lurking in sometimes....but too busy to post much.

I hope all you knights and ladies have enjoyed the holidays and are heading into a good New Year.

Poor old Solomon

heavy mettleVast Reserves of a Declining Currency are Dangerous for Asian Central Banks#1278681/2/05; 12:00:08

Interesting take by Mr. James on how to solve the current exchange rate system of payments. Thanks for bringing it back Sir Comotose. I find it usual that the author fails to mention gold as a solution. Doesn't mention the possibility that Asian banks just might be accumulating gold to offset the future depreciation of the dollar. As well his last word of the article is ‘treasure’ as in accumulated reserves. Sort of a dammed if you do and dammed if you don't kind of treasure.

An anecdote from a far east perspective. Unfortunately I am some what forced to purchase gold from a local bullion bank here in Asia. If USAGOLD were to offer service in my neck of the woods, I would surely take the service and discount to what I'm use to paying. On one occasion at a bank, the bullion section manager, who wanted to personally meet me as I was an all too frequent customer, suggested that I should buy marked up silver commemorative coins at the local post offices instead of buying gold coins from his bank. Hmmmm.

Thanks but no thanks. I appreciated his concern for my meager purchase of a few ounces of gold here and there over the years. I don't know for sure but I certainly suspect that these banks, through the central bank, are quietly trying to balance their paper surpluses with gold. A question would be at what quantity of gold will these Asian countries be satisfied to let the dollar hit the road for good.

DruidEconomic Regionalism and the Euro and the Dollar#1278691/2/05; 12:26:43


"We are confronted on every side with projections about the future. Movies like Independence Day and Godzilla give us an interesting, though unrealistic, view of what may be ahead. As this newsletter has reported over the past two years, the future should to be seen from the international level. In the past three months, two very important and historic events have taken place. One has been followed and written about for the last forty years, while the other has gone unreported and unheralded.

The truth is that the world is being divided up into economic "regions" in order for it to be managed from an international perspective. For years this newsletter has discussed the value of the dollar against the Deutsche mark (Europe) and the Japanese yen (Asia), which represent two of the world's economic regions. This edition will report on yet another region, which was birthed in March, as well as discuss Europe and the coming euro.

The (coming) five economic regions of the world are: the Americas (the 34 countries of our hemisphere), the European Common Market (11-14 countries), the Asian Free Trade Association, Africa, and the Middle East. The most developed of these regions is the European Common Market, which will officially begin trading with a combined currency, the euro, on January 1, 1999. The newest region to-be region is Africa, which the Group of Seven highlighted in Denver in 1997 to which the World Economic Forum gave its blessing in January-February, 1998. The most volatile is the Asian region, which was covered in the December 1997 newsletter. The newly birthed region, the Americas, is the subject of this newsletter, along with the European Common Market."

Druid: This lady provides some incredible research and commentary. Check out the articles on the left side of the page. Enjoy the read.

USAGOLD / Centennial Precious Metals, Inc.A FREE info packet -- we've been helping ivestors diversify their portfolios for over 30 years!#1278701/2/05; 14:56:14">Get a head start on the gold market!
mikalWords whispered on the street#1278711/2/05; 18:41:42

Prospects are grim for dollar
by Jonathan Fuerbringer - New York Times - January 3, 2005

mikalResolving old agendas in a new year#1278721/2/05; 18:50:41

Big issue for 2005: Asia's ties to troubled U.S. currency
by Floyd Norris - International Herald Tribune - January 3, 2005

TownCrierNew highs in gold to glitter 2005#1278731/2/05; 20:13:11

MUMBAI, JAN 2: Gold is set to march ahead in 2005 with some fresh highs in between.

Gold, which rose 25% in 2002 and 19% in 2003, rose 5.52% in 2004, making us feel as if we could be on to something.

Not since the early 1970s, has gold rallied over such a long time frame. Back when Richard Nixon was US President, the metal gained over a five-year period.

Analysts maintain that gold will at least sustain the momentum it gained in 2004, if not more...

Analysts forecast that a 11% drop in mine production and a 16% decline in total supply this year, will help boost prices.

Gold, which opened on an optimistic note at $415.2 per ounce on January 1, 2004, (London Fix) closed the year at $438.

It peaked during the year at a 16-year high of $455.75 recently on Dec 6, after recovering from its year's low $373.5 on May 14.

Bullion has grown by leaps and bounds in the last few years, recovering from a 10-year low of $252.80 on July 20, 1999.

"A declining US dollar, supported by strong fundamentals, is set to make gold attractive, even above $450 an ounce in 2005," an analyst at a domestic brokerage said.

Against an array of major currencies, the dollar index ended the year with a whimper, slipping last week to fresh nine-year lows.

If Americans continue to buy foreign goods more quickly than US businesses can sell their goods and services overseas, the outflow of dollars will remain heavy.

The negative sentiment for the dollar has been exacerbated by expectations that the world's economic powers are not likely to combine forces yet to stem the currency's decline.

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

A nice recap of the range of figures hit by gold last year, plus a sense of where we've been, where we're going, and why.


USAGOLD - Centennial Precious Metals, Inc.Just Released!! - - - Gold Forecast 2005 Issue of the Client Letter#1278741/2/05; 21:37:36

Gold Forecast 2005
by Michael J. Kosares, author: 'The ABCs of Gold Investing - How to Protect and Build Your Wealth with Gold'

see url

Caradocnews flash: 11:07 Pacific#1278751/3/05; 00:11:04

Local radio was just interrupted for announcement that there has been an explosion at LAX. No details other than "apparently an improvised device." -Caradoc
BelgianVolatility....#1278761/3/05; 07:58:09

Volatility you want (X-thousands of hedge funds),....volatility you get ! And then the "stabilizers" (interventionists) come in and calm things down.
Financial life as it is ! Yahoogle...
No wonder that the financial experts strongly advise not to hold reserves ! Why should one hold reserves, anyway ? The markets are moved,... "for you"...don't they (sic)!?
Now CNBC is even calling the rise in yahoo and google...increasing your *wealth* (not money anymore) ! Oh dear...

TownCrierFed pumps against (post-)seasonal expectations#1278771/3/05; 10:25:43

With the holiday season now past, experience says that much cash which customers had removed from the banking system ought now to be migrating out of purses, wallets and out of store tills right back into the nation's banking system. There it will re-swell the reserves of the commercial banks, and in theory should reduce the Fed's motive to pump money into reserves via open market repurchase operations -- even to the point where draining operations could be expected as appropriate countermeasures in the name of monetary stability.

But judging from today's action by the Fed, the drive for ample liquidity is still the name of the game. The Fed accepted Treasury collateral in overnight repo open market operations today, thus adding $4.75 billion in fresh temporary cash, and doing so significantly below the FOMC target of 2.25%. The Fed's injection today was provided at the low average rate of 2.146 percent.

When the traditional brakes on the money supply have been politically greased beyond reliable function, beware the vehicle. Choose the tangible sensibility and scarcity of physical gold as your foundation for meaningful savings.


BelgianTrichet#1278781/3/05; 10:42:38

Will speak next monday. The dollar will certainly be on the agenda. Maybe there will be a message ...a hint ?

OPEC's 1 million/bpd cut, will become effective in januari.
Don't be surprised to see NYMEX dip under $40. Watch the spread of $4 between Brent and WTI.

The €-POG hasn't made it through the €350/Oz ceiling and is coming back to the bottom of its long horizontal price zone. Expect the dollar fundamentals to be increasingly put into question, whilst the goldprice in non dollar currencies remains flat, despite the creeping up, price inflation. Remember that as long as the goldprice stays hibernated, the dollar management will continue to be questionned. The day will come that no dollar questions, about its possible hardness, will be asked anymore.

Tough times for gold-holders that don't see any light out of the tunnel.

Federal_ReservesTOWN>FED pumping#1278791/3/05; 10:49:37

actually 4.5 expired and they replaced it. So, no net add to liquidity today. Tommorrow could be more telling regarding the post holiday extraction of liquidity, with 12 billion expiring.

Current Repo Expiration Schedule

1/4 $4.75
1/4 $7.25
1/6 $14.00
1/13 $7.0


Also note the attached MZM money growth. Flatish, telling us that economic activity which would require liquid money is not all that great.
ISM - Employment at 13 month low.

No jobs in manufacturing. The tax and spend FED stimulus was exported to Asia, US workers have no coin. Only rich folk with appreciating assets (homes/stocks) and no debt are getting ahead in the USA today. The USA is becoming a country run by the digital elites, global oligarchists, aided by both democrat and republican, these folks favor cheap labor practices such as illegal immigration, and trading with communist countries who have fair labor practices or environmental controls. Manufacturing in the USA is in the full state of collapse. Once communist China takes over the US auto industry as it has so many others, nothing will be left. Then the the communists can float their yuan against the US dollar, the yuan will rise value the dollar will drop to 30, our prices will be jacked up, and the US will be impoverished, and become the world's largest banana republic, a country whose only export is debt.

TownCrierMK's 'Gold Forecast 2005'#1278801/3/05; 11:08:36

Michael Kosares, author of the hot-selling book, "The ABCs of Gold Investing - How to Protect and Build Your Wealth with Gold", has made immediately available to all USAGOLD visitors his important first Client Letter of the new year in which he puts forth his forecast for gold in 2005. See URL above, and then follow the internal link.

To enjoy access to MK's weekly Client Letters, request a free info packet from USAGOLD-Centennial and you will be provided with several additional Letters for an interim period. Of couse, all clients of USAGOLD-Centennial Precious Metals will receive all updates on a continuing basis as one of the several added benefits of doing business with this firm.

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TownCrierFederal_Reserves, Fed addition#1278811/3/05; 11:31:12

Thanks for the related comments. Beyond the net effect of the Fed continually working to smooth out maturities of its own previous open market injection of reserves, please note that the point I was making (perhaps too subtly) was regarding the wider picture of the monetary dynamic with respect to seasonal commercial, retail and private flow of funds, and also especially with regard to the Fed's low (sub-FOMC) interest rate for this operation. ALL things considered, ensuring ample liquidity definitely remains Job Priority #1 for the Federal Reserve.


CoBra(too)Self-Perpetuating Ubiquity: For Today, the Dollar is Microsoft!#1278821/3/05; 11:33:37

The above is a quote from below's Strategic Investments and may have read Macro-Soft if Bill Gates would have have started "Another" company.

Sorry, that seemed a mute point as the article is tackling some very valid points - as a matter of fact the points mentioned are now coming to a head as further debt or credit expansion for the Dollar seem implausible.

That again, may be "wishful" thinking by the real creditors. Though, lastly even the most gullible creditors may come to the conclusion that the constant bleeding has to be stopped before they themselves are sucked dry by the Dracula type of Dollar zombies.

To prolong the "bloody" charade it is adament, last resort type of defense to lean on the POG. At least this concept has worked to keep the appreciating currencies (vis a vis the US Fiat confetti) in a tight trading range.

No gold enthusias'm in Euroland, nor the strong commodity based currency countries.

That's probably, what we ole' gold bugs should be watching for. The appreciation of Gold vs our relative strong "confetti", though still confetti.

The time will come, when our confetti will succumb to the leadership of the outgoing reserve currency and will manifest in competitive valuations. The time seems to be near, as some currencies have already aprreciated 40%+ vis a vis the mostly pegged DXO basket.

Well, maybe the US Dollar regime is more scared of the € - as it should be scared of the Yuan and/or the Indian Rupee!

Be that as it may be - I'm more scared by the factual and present bankrupt Dollar economy and its aftermath than by any further upholding of the status quo. A status which can't be held much longer in any case...

Even, if there will be all sorts of agreements between the G7 + whomever - we still deal with a country which is totally and finally bankrupt and will renege on its obligations to to fulfill its dues - id est pay back its financial promises.

That is impossible - and any discounted payback via inflation/depreciation will be outright devastating and countered by sky high interest rates.

It must be nice to be between a rock and a hard place if there's still a scintilla of hope and escape. In terms of the US and its Dollar I can see none.

Well, there is a scintilla of hope by reading the following article, though I doubt even "scintilla"!

"Whiskey & Gunpowder
January 3, 2005


You are receiving this issue of Whiskey & Gunpowder as a gratis benefit to your Strategic Investment subscription. Today, we present you an analysis of the birth and death of globally dominant reserve currencies…



by Professor Avinash Persaud

I SPENT THE first part of my career as a currency strategist in the City of London. One of the nice things about being a currency forecaster is that expectations of you are very low. Moderate success is a great surprise. But there are a few things that are more certain than others.

For example, at any one time, there tends to be a single dominant currency in the financial world -- not two or more, just one. Some people believe that while the euro may not topple the dollar, it will at least share the spoils of financial hegemony. History suggests not. In the currency markets, the spoils go to the victor, alone -- they are not shared.

Either the euro succeeds internationally, or it does not. (Which, lest I anger my Europhile friends, does not make it a failure, just not an international currency widely accepted outside the euro area. Many countries have credible, stable currencies that are not international currencies, such as Canada, the United Kingdom, Switzerland, Japan, and Sweden.)

In the past, it was worth asking what the spoils are to being an international or reserve currency.

Some countries deliberately tried to avoid their currency becoming internationalized, such as postwar Germany. The Bundesbank felt that the more deutsche marks that were held outside of Germany, the less control they would have over money supply and monetary conditions. European aspirations for the euro to become the world's reserve currency are more French than German, more dirigiste than dirigisme.

Today, the spoils of reserve currency status are more clearly visible than ever before. If your currency is a reserve currency, you can pay for things by writing checks, which nobody cashes. You can spend more than you earn to a far greater extent than anyone else. This is exactly what the United States has done in recent years. National expenditure has exceeded national income by more than 20% over the last five years.

Going Broke on Tanks and Pills

When that excess spending was due to investment in technology in the late 1990s, it was not clear whether the United States was benefiting from being a reserve currency, or whether it was simply enjoying an investment boom.

But today, that excess spending is on unproductive consumption: tanks, bullets, and pills. Few countries in the past have ever been able to sustain a deficit on external accounts as large as that in the United States today. And when other countries have run large deficits, they have had to pay significant premiums to borrow the money, not as in the case of the United States today, receiving a discount. These are some of the immediate advantages of being a reserve currency.

International and reserve currency status also lends the host country even greater influence than otherwise. One of the interesting passages of dollar diplomacy in recent years was in early 1998, when Japan and Singapore were both generously putting up the cash to support the East Asian economies amid the Asian financial crisis, but the U.S. Treasury was dictating the terms.

There are good reasons why there is seldom more than one dominant currency. Reserve currencies have the attributes of a natural monopoly, or, in more modern parlance, a network. If it costs extra to trade with someone who uses a different currency than you, it makes sense for you to use the currency that most other people use. This makes that currency yet bigger and cheaper to use. There is a good analogy with a computer operating system. In that world, Windows is the dollar.

This networking power is why central banks store dollars in their reserves in a far greater proportion than the proportion of trade with the United States. While 30% of international trade is with the United States, 70% of central bank reserves are in dollars. It is why most commodities, like oil, copper, and coffee, are priced in dollars, wherever they are found and whomever they are sold to.

Something else we can be more certain of is that reserve currencies come and go. They don't last forever. International currencies in the past have included the Chinese liang and the Greek drachma, coined in the fifth century B.C.; the silver punch-marked coins of fourth-century India; the Roman denari; the Byzantine solidus and Islamic dinar of the Middle Ages; the Venetian ducato of the Renaissance; the 17th-century Dutch guilder; and, of course, sterling -- and now the dollar.

A necessary condition of a currency becoming a reserve currency appears to be its breadth of use and cost and ease of transaction, not, as some might think, the ability to hold its value. Clearly, hyperinflation would not serve a reserve currency, and the end of reserve currency status is often associated with a cycle of inflation. But within the normal bands of inflation, it is size as a trader that matters. In the long term, the Swiss franc and the yen have been better stores of value than the dollar. Since 1980, they have appreciated by more than 21% and 54% versus the dollar, respectively. Yet for much of this time, combined, they have represented no more than 10% of central bank reserves.

In the 18th century, Britain was the largest economy of the Western world, London was the center of international trade and finance, the currency was convertible, and so sterling became the world's reserve currency. By the late 19th century, the United States had become the world's largest economy, a position solidified by Europe's repeated attempt at self-annihilation from the 1880s to the 1940s. By the 1960s, the dollar had usurped sterling and was the world's new reserve currency, with 60% of total central bank reserves being held in dollars, twice the level of sterling reserves.

Tomorrow, the Renminbi Will Crush the Dollar

But time doesn't stop. By the mid-21st century, the United States will no longer be the world's largest economy. By then, China and India will have overtaken the United States, Western Europe and Japan, on purchasing power parity terms at least, which should represent where exchange rates are likely to be in the long run. Indeed, optimistic measures of sustainable growth in China and India suggest this will be the case in 20 years time. Ladies and gentlemen, within my lifetime, the dollar will start to lose its reserve currency status, not to the euro, but to the renminbi.

The process is likely to be long and drawn out, rather like sterling's slip and slide. Although the United Kingdom had lost its position of the world's largest economy in the late 19th century, by 1928, it was still the world's major reserve currency, with twice as many central bank reserves being held in sterling than in dollars. In part, this slow process was a result of the authorities’ attempts to delay it.

Gaining reserve currency status is heaven, as you write checks and no one cashes them. Losing reserve currency status is hell, as everyone starts to cash all the checks you ever wrote back in time. Britain's economic history and politics for the first three quarters of the last century were dominated by the overhang of sterling balances and the pressure on sterling as these were liquidated.

The principal way in which Britain tried to slow the process was through the use of imperial power and influence. By the 1930s, sterling's reserve currency status was largely a result of sterling balances held by the British colonies. The majority of sterling reserves were held by Ireland, India, Pakistan, and Australia, not the major economies of the time, the United States, France, Germany, or Japan. In the postwar period, the British authorities formalized the sterling area, within which there were few restrictions to trade but strict rules controlling the movement of goods and capital into and out of the bloc. One could argue that sterling had already lost its reserve currency status in the sense of a currency that third parties voluntarily choose to use as a vehicle currency. However, there is no reason to suppose that the United States would not follow a new imperialism by exerting pressure on countries to stick to the dollar bloc.

There are three further implications of this analysis.

First, those Europeans who want the euro to become the major international currency must consider either substantial immigration or an aggressive enlargement eastward. A European Union that by 2025 included the former Soviet bloc, Turkey, and North Africa could rival the dollar and renminbi, especially if the process brought greater political stability to the new member states.

Second, the loss of reserve currency status for the United States will bring economic and political crisis. If it was economically and politically painful for the United Kingdom, even though its international financial position was not in heavy deficit, what will it be for the United States, which has become the world's largest debtor? There will be an avalanche of checks coming home to be paid when the dollar begins to lose its status. Of course, excessive debt in your ow ncurrencyisalsospelled"inflation."Thatisthemostlikelyoutcome,anditishowothergovernmentshavetriedtocopewiththelossofreservestatusinthepast.Thesolidusanddinariwereultimatelyconsumedbyacycleofinflationanddebasement.opopfontfontliul

Third, if the renminbi is to become a major reserve currency, it first has to leave the dollar bloc. This will happen later rather than sooner. One of the other certainties in foreign exchange, what I call the Second Rule of Foreign Exchange, is that the smaller, more open an economy is, the more the authorities manage the exchange rate, and similarly, the larger, more closed an economy is, the less the authorities care about the exchange rate.

Policymakers perceive a trade-off, at least over the course of the political cycle, between the economic flexibility afforded by a floating exchange rate that can respond to new and varying circumstances and the economic disruption that a volatile exchange rate, sensitive to external factors, factors often beyond the control of the country, can cause.

This potential disruption is greatest the more open an economy is to international trade. Small open economies opt for inflexible exchange rates. Large closed economies prefer to keep the flexibility of a floating rate. The European Monetary Union (EMU) makes political economy sense for Belgium, but not for the United States.

From Pegged to Floating; China Emergeth

We think of China as a vast country with a growing economy, but in many ways, it has the characteristics of a small open economy today, with the market sectors of the economy being led, driven, and dependent on international trade. Although I am not altogether comfortable about the meaning of some of the national statistics in a command economy, for what they are worth, they suggest that in terms of trade as a percent of GDP, China is far more open than the United States or euroland, countries that pursue exchange rate flexibility, and is more akin to France, Spain, and Korea, countries that choose exchange rate management. The current arrangement, therefore, is likely to persist for a while longer.

That does not mean that there will not be a revaluation of the renminbi shortly -- it could even happen around the end of this year -- but that the Chinese will revalue the renminbi and stick to a pegged system, though the limits may widen a little from the current 1%.

But a dollar peg is not China's destiny. It may have an open economy today, but longer term, China will be a large economy, driven by its domestic, rather than external, sector. Then, it will prefer a more flexible exchange rate. The decision by China to move from a peg to a float will mark the beginning of the end of the dollar's reserve cu rrencystatus.YoucanseewhytheChinesewereinvitedfordinnerbytheG-7inSeptember.opopfontfontp

In summary, there are few, if any, instances of a single financial system having more than one key currency. Today, that currency is unquestionably the dollar. But reserve currencies come and go. Perhaps the immediate economic advantages that they bestow seduce governments to overextend themselves until the financial empire collapses upon itself. The collapse, as a couple generations of unpaid checks are presented to be paid, will push the United States into a series of economic and political crises in the middle of the 21st century.

The most likely candidate to replace the dollar is not the euro, unless Europe embraces rapid eastward expansion; it is China. Through rapid economic growth and a massive population, China will become the largest economy within 20 years time, and economic size is the key to the rise of new financial empires.

The principal risks to this forecast are whether China can continue growing rapidly and, more uncertain, whether it can maintain a degree of political stability. If Chinese leadership fails on both fronts, the dollar's reign will probably last a little longer. There is a possibility that it finds itself under threat from another quarter, the rupee. India's democracy is remarkably stable for a poor country. Moreover, courtesy of the one child policy, it is India, not China that will end up with the largest population in the world by 2050. The fate of the average Chinese today is to grow old before they grow rich; the fate of the average American is more uncertain than most imagine.


Avinash Persaud

Greg's note: Professor Avinash Persaud holds The Mercers' School Memorial Chair in Commerce at Gresham College in London. He is investment director for GAM London Ltd. Before joining GAM, Professor Persaud was managing director and global head of research at State Street Bank. He is a special consultant to the Independent Evaluation Office of the International Monetary Fund. Professor Persaud holds a visiting scholarship at the International Monetary Fund and is visiting fellow at the Cambridge Endowment for Research in Finance at the Judge Institute of Management, Cambridge University."

Believe me, I still wish all of us a happy and reasonable prosperous 2005 - though I doubt we'll be reasonably exempt from the financial "Tsunami", which will hit all shores worldwide. Gold may still be the best and only bet, though Black Blade said it better - Cheers cb2

TownCrierViews on gold at two-month lows#1278831/3/05; 12:38:34

Jan. 3, 2005, SAN FRANCISCO (CBS.MW) -- Gold futures fell under $430 an ounce Monday for the first time in two months, pressured by fresh strength in the U.S. dollar as well as the potential for further increases in U.S. interest rates.

Peter Grandich, editor of The Grandich Letter, an investment advisory publication, expects gold prices to "bottom" within the first few weeks of January, then make new highs by the end of the first quarter. "[The] correction we envisioned back in early December has been playing itself out and is nearing its end," he said.

"Currency values are going to remain the issue in 2005, as the dollar's demise has only just started," said Ned Schmidt, editor of The Value View Gold Report.

"Currencies' values are the question, and gold is the answer," he said, referring to gold as "money" and therefore an "alternative to losing wealth in U.S. dollar-denominated assets."

But "gold stocks are not money -- they are paper equities," so gold stocks will continue to disappoint investors in 2005, with the exception being the occasional takeover or merger," he said.


Three years ago gold prices sat near $275 for nearly two years and has subsequently climbed reliably over the next 1,000 days to to the mid $400's, all the while moving up and down within a $25-$50 channel of short term price swings.

Those who have bought the dips have maximized their holdings and benefits from the prevailing upward trend in gold.

Bottom line: don't miss out on the dips as they present themselves for opportunistic buying.

See url especially for a clearer understanding of the 5-year chart; the third chart down on the right.


TownCrierShifting reserves#1278841/3/05; 14:28:21

NEW YORK, Jan 3 (Reuters) - Central banks are expected to continue building up their euro-denominated reserves this year, but if they rise at a slower pace than in 2004, the dollar's broad rate of depreciation may slow, analysts said.

The long process of central banks diversifying their currency reserves away from the dollar and into the euro, which was launched in January 1999, is cited as one of the major factors behind the decline in the dollar in the past few years, though the dollar still remains the world's reserve currency.

The sheer scale of global reserve holdings - around $3.36 trillion and rising, of which nearly two-thirds are held by Asian central banks - means even small percentage shifts involve the trade of huge nominal sums.

As the euro has established itself as the world's second most traded currency since its launch six years ago, central banks, particularly in Asia and the Middle East, have been adjusting their reserves accordingly.

...the Bank for International Settlements notes that the dollar is on one side of the trade in 89 percent of every foreign exchange transaction. An average $1.9 trillion changes hands daily in the global currency market.

[Now for the especially important part:]

Strengthening demand for an asset that's falling in value may seem counterintuitive to investors. But central banks are not typical investors, and making a profit comes behind achieving broader economic goals.

The biggest buyers in recent years have been the Asian central banks. Collectively, they sit on a pile of dollars worth more than $2 trillion.

Their aggressive dollar purchases via currency market intervention and subsequent investment in U.S. sovereign debt have been vital in preventing the greenback from losing even more ground over the last two years.

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

With all of that as subtext I would have you also bear in mind the first point of each of the central bank agreements on gold:

1. Gold will remain an important element of global monetary reserves.

Choose gold. And do so opportunistically as you may.


Belgian@COBRA#1278851/3/05; 15:34:30

The professor A. Persaud is theoretizising about a probable future whilst constantly looking back in his London mirror.
A currency specialist (myopic fanatic), ignoring the existance and evolving function of gold (+ history), within the global monetary complex ! His reflections and projections, come from decades of classic AA-dollar experience.
London keeps dreaming about the old splitting divergences between France and Germany. Note that DB is raising its bid for LSE !
In the professor's article, there is no indication that China is possibly preparing for having (wanting) the renmimbi as the world's reserve currency.

What happens to the present unfree (fixed)dollar goldmarket, when the dollar loses its reserve function, when gold is still publicly stated as an important monetary reserve !? What will be the effect of "floating" gold !?
How will the projected renmimbi reserve be considered next to the gold(wealth)reserve ? Why does the professor leaves this out of his equations !?

When are we going to hear a professor's theory about gold ?
Isn't it very bizar, that we always hear about dollar-reserves and never about gold-reserves !?

Any serious question on the gold subject, meets a wall of silence and a fast ridicule intermetzo as to rush to another subject. Or else we get those same stereotype yadayada standard answers as if all questions on gold must be answered with the same old copy. Old habits don't die easely and the imbedded myth of gold being a barbaric relic must be kept alive through ignoring it.
And above all, never dare to make any kind of association between euro and gold !

Where do I have it wrong, cobra ? Tell us.

BelgianQuestion to all#1278861/3/05; 15:56:51

Does the CB(treasury)-gold only have a "symbolic" function...or not ?
If not,...what "function" do the states' goldreserves have ?

NedIs it any wonder why Blair is Bush's puppet? #1278871/3/05; 16:20:31

462. Britain's Energy Time Bomb
The following article reveals a new position by the British Government, which is now forced to admit to Peak Oil. The most telling line refers to a foreign policy of "Country Action Plans on Energy". The price can be high with more than 100 000 innocents killed in Iraq so far.
30-10-04. Foreign Secretary Jack Straw warned that Britain's growing need for energy over the next decades has to be seen in a "changing context" due to declining production from the North Sea. "By 2020, we will probably be importing three-quarters of our primary energy needs -- and we will need to adapt to that," he warned when launching his government's first-ever International Energy Strategy.
Straw's warning comes after the British Foreign Office identified energy security as being one of eight international priorities last December. The concern is that the country is no longer self-sufficient with oil and gas supplies from the UK's sector of the North Sea running out fast. The situation was underlined in July, when Britain recorded its first deficit in oil trade since 1991. The worry over gas was exemplified by the closure of the North Sea's Frigg field on October 26 after one time supplying up to a third of the UK's domestic gas needs.
The UK's oil production has been in decline since production peaked at 2.8 mm bpd in 1999. Although the current output of 2.1 mm bpd is in line with the average of the past 20 years, it is predicted it could run dry within the next decade. According to the UK Offshore Operators` Association, the country will cease to be self-sufficient in 2007, production will drop to 1 mm bpd by 2010 and virtually end altogether five years later. Of even greater concern is the situation of natural gas, where the UK is rapidly moving from a position from being a net exporter to a net importer. By 2010, it is expected to be importing around 50 % of its gas. Like the rest of the EU, the dependency is expected to rise to 70 % by 2020.


From ASPO December newsletter.........

slingshotAttention GAB $429#1278881/3/05; 16:25:42

Will we see your call of $424 tomorrow? Breaking out some Dry Powder just in case.
I hate it when I get home late. ;0)

USAGOLD Daily Market ReportPage Update!#1278891/3/05; 16:36:17">
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.

Monday market excerpts

Comex gold and silver prices buckled Monday as a turn higher in the U.S. dollar and weakness in the crude oil market sparked a wave of speculative liquidation amid a scarce buyer environment. The most active February gold contract settled $8.70 lower at $429.70 while March silver settled 33 cents down at $6.507 an ounce.

The upward move of the U.S. dollar versus other currencies was deemed the main driver behind gold and silver's weakness, rendering dollar-denominated precious metals less appealing outside the U.S. Bearish technical pictures also fueled the decline, with the weakening prices automatically generating sell signals for chart-following funds in both markets.

These factors, combined with thinner-than-usual trading conditions because of New Year holidays in Asia and Europe and batches of pre-placed sell orders that added to sell-side volumes as prices declined, made for a turbulent start to the trading year for Comex gold and silver.

"The quiet conditions really accentuated the prices moves, and the buyers were happy to watch prices come off," noted George Gero, a senior vice president at Legg Mason Wood Walker. "I think we could see some follow-through selling on Tuesday, but then we might find some good support."

Dealers agreed that further choppy trading could be seen over the near term, especially if the dollar makes further forays higher and the crude oil price comes under additional pressure as warm weather forecasts scare off buyers. Potential downside goals for February gold include $427 and the 100-day moving average just above $426.

However, with many players retaining a bearish outlook for the U.S. currency in 2005, some good levels of speculative bargain hunting in dollar alternatives such as gold are expected at some point, they said.

Some short covering by local dealers is also deemed in the cards, especially once trading population levels return to normal later in the week, they added.

----(see url for 24-hr international newswire)----

slingshotBargain Hunting#1278901/3/05; 17:13:46

"However with many players retaining a bearish outlook for the U.S currency in 2005'some good levels of speculative bargain hunting in dollar alteratives such as gold are expected at some point, they said."

O.K. What are they waiting for? Gold at $254.00.
They missed the train.

CoBra(too)Re: Persaud Essay -#1278911/3/05; 18:05:39

- And probably my own thoughts in advance of the article...

- @ Belgian - your latest post directed to me ended with: "Where do I have it wrong? Tell us:" -

...I recognise, I should have remitted them by the end. Still, it's kind of awkward for me answering your query. As it seems you and your buddies already have made up your minds to regard me as a defector to the pure gold cause.

Fair enough, as that in itself bears a bit of truth. A truth, though which is hardly defection, more deflexion. And as you ask in a follow up post what function gold reserves in CB's really have - "symbolic", or not? - I'd like to tackle this before trying to answer your prior questions. In all probability, I won't succeed in either.

Anyway, CB's gold reserves in particular in the Western Hemisphere may not be even symbolic anymore. The big question is starting to emerge as to what portion of said gold reserves are still intact, or better un-encumbered. As more of the machinations of the PTB surface it becomes clear that not much of the (European and other)CB gold sales
happened voluntarily, nor under the auspices stated.
Only today Italy's CB "confessed" to gold swaps. Half of BuBa's gold seems to be in deep storage in West point and other EU CB's have been almost wiped or black mailed out of their holdings.

If we assume that about half of the gold reserves are either gone or encumbered as quite a few pertinent and probably smarter than I analysts believe, I would guess that this would answer question sufficently.

I've stated my recurring questions to the Austrian CB gov. here before and have nothing to add!

As to your your "free gold" advocacy - just to abbreviate my response to the rest of your critique on the good profeesor Persaud - as I'm on the same time zone with you -I'd say thgat gold is an eminently POLITICAL metal, that can't be set free at all cost.

A truly dubious statement, as I also see; Though, be prepared to live with your, alas great beliefs forever and you will be proven right.

In the meantime I will use physical Gold as a portfolio insurance par excellence and will also try to stick to my belief to use any other gain and/or income to shore up my bullion.

... And finally I agree it is gold which never will be corrupted by politics ...

Amen Bro - cb2

R PowellCoBra(too)#1278921/3/05; 18:46:28

Thanks for the Professor Persaud article. I found it not only interesting but familar in that his opinions or those closely akin, are not uncommon in recent economic publications. Much is being made of the US dollar's coming fate. Most are seeking to somehow profit from whatever they believe that is. I found the following of note...

"A necessary condition of a currency becoming a reserve currency appears to be its breadth of use and cost and ease of transaction, not, as some might think, the ability to hold its value. Clearly, hyperinflation would not serve a reserve currency, and the end of reserve currency status is often associated with a cycle of inflation. But within the normal bands of inflation, it is size as a trader that matters. In the long term, the Swiss franc and the yen have been better stores of value than the dollar. Since 1980, they have appreciated by more than 21% and 54% versus the dollar, respectively. Yet for much of this time, combined, they have represented no more than 10% of central bank reserves."

The first sentence, especially, fits in nicely with the idea that money is a medium, in numerical form, for the exchange of "credits" (for lack of a better word or concept). I can pour and finish a concrete floor and get paid so many credits which I (almost) immediately pass on to my creditors to pay for food, mortgage, gasoline, etc. The amount I received and the amount I pay for that which I buy are the "fixed" values at the time of the transactions. None of this involves or implies any concept of savings or wealth. Money is merely a convenience of business transactions, no? Now, if this is so, why is the so-called "value" of any money so important? That is, if a cup of coffee cost the equivalent of X number of minutes of work for a certain profession, what difference does it make what the monetary number representing that amount is, as long as the time needed to purchase remains constant, then so does the effort needed to purchase. Obviously "wealth" stored in a depreciating currency is reduced and many on "fixed incomes", not properly inflation adjusted suffer, but, these are adjustable (intentional?) political issues.... so overall, in any monetary system where money is designed as a convenience for immediate business exchange, what number is on the bill (FRN) may not really matter?? My kids working minimum wage paying jobs make more than I used to and needed to, to support them as infants but...the lower numerical amount I used to make bought much more back in those good old days of yore. All this is nothing new, of course. Maybe my point is, as a bank president once answered me, after I suggested the monetary system might be unstable, "So what? If it fails again, we'll just bail it out or otherwise adjust and then start all over again." Some things (money) are perhaps NOT designed to last. I do not store my earned "credits" in monetary form.

I noted also that those trying to hold the reserve statis of sterling were those outside of Britian. When the dollar does depreciate more, those who hold them will suffer. Those who owe them will gain, no? Sometimes I remember those in the past (many here over the years!) who have proposed the notion of incuring debt to buy gold...? It does stir the musings of those who are not mostly concerned with preserving wealth but acquiring it...? Thanks again..

R PowellBelgian#1278931/3/05; 19:11:03

Hello and happy new year.
You asked, in reference to Persaud's article..

"What happens to the present unfree (fixed)dollar goldmarket, when the dollar loses its reserve function, when gold is still publicly stated as an important monetary reserve !? What will be the effect of "floating" gold !?
How will the projected renmimbi reserve be considered next to the gold(wealth)reserve ? Why does the professor leaves this out of his equations !?"

May I venture a guess? As the dollar loses it's reserve function it will probably depreciate in exchange value against other fiats so the POG should increase (in US dollar numbers) as will the exchange value of other currencies. Aren't we seeing this already? Gold is trading as a currency, not as a commodity.

Eventually, when/if another currency achieves that coveted reserve the exact time that occurs...there will already be an exchange rate (or price) for gold in that new reserve currency, no? So what happens to the cost, price or "value" expressed in any numerical currency number?...nothing. The POG already exists in every currency via the exchange rates of one currency to another. What difference which one of those is the world's reserve currency, if indeed, there has to be a new reserve currency when the dollar's time is through..?? Money is money. Gold is gold. The only connection is that gold, like everything exchanged among men, is priced in a numercial currency number for the exchange of ownership, no? Gold is unique, has been and is a store of value, etc. but gold is exchanged daily on a monetary basis.
Just one man's opinion. Fire away!

R PowellSimple thoughts#1278941/3/05; 19:48:26

It occurs to me that my words are often those of a pragmatic working stiff. Before I'm again so accused, I choose to answer the charge. Most probably, guilty. If I offend anyone, let me answer this is not my intent.
I have also been accused of offering basic simple "economics 101" thoughts are possible answers to complicated the concept of "free gold". Again, I do not do so to offend but to perhaps simplify what many seem to want to complicate or mystify. Perhaps there are issues that are beyond my comprehension. Most assuredly there are such but I look to understand things as they do exist, not as they should, might or could exist. Does not Ockham's Razor yet hold merit?

If a simple answer is not disproved, then why look for one more complicated and complex? Perhaps the greatest complexity in economic matters is not the complexity of any one concept but (the butterfly effect): the uncountable number of factors involved, constantly exerting forces, with varying, pulsating amounts of strength, always varying and never constant, even in their effects, sometimes positive, other times negative, never fully understood by anyone or understandable in its entirety but, ......even if this is so...should we not seek simplicity (or at least comprehensibly reject such) in our answers before embrasing the more difficult obscure response??
I don't know. I only seek to learn and understand (and profit) (G)

YGMRich...Great Simple thoughts......Simplicity is a Golden Key!#1278951/3/05; 20:02:41

The Bard of The Yukon...."Service"

Robert Service.....For us "Simple Men"

I'm just a mediocre man
Of no high-brow pretence;
A comfortable life I plan
With care and commonsense.
I do the things most people do,
I echo what they say;
And through my morning paper view
The problems of the day.

No doubt you think I'm colourless,
Profoundly commonplace;
And yet I fancy, more or less,
I represent the race.
My name may stand for everyone,
At least for nine in ten,
For all in all the world is run
By mediocre men.

Of course you'll maybe not agree
That you are average,
And unlike ordinary me
You strut your little stage,
Well, you may even own a Bank,
And mighty mergers plan,
But Brother, doff your tile and thank
The Mediocre Man.

Black BladeDown But Not Out#1278961/3/05; 21:00:03;siteid=mktw


Peter Grandich, editor of the Grandich Letter, an investment advisory publication, expects gold prices to "bottom" within the first few weeks of January, then make new highs by the end of the first quarter. "[The] correction we envisioned back in early December has been playing itself out and is nearing its end," he said.

"Currency values are going to remain the issue in 2005, as the dollar's demise has only just started," said Ned Schmidt, editor of the Value View Gold Report. "Currencies' values are the question, and gold is the answer," he added, referring to gold as "money" and therefore an "alternative to losing wealth in U.S. dollar-denominated assets." But "gold stocks are not money -- they are paper equities," so gold stocks will continue to disappoint investors in 2005, with the exception being the occasional takeover or merger," Schmidt said.

Black Blade: Gold slipped lower on razor thin margin as it was essentially hedge funds that "cut and run". It is simply taking profits now instead of last week, thus avoiding the taxman for now. Fundamentally gold and silver remain strong due to strong physical demand amid declining mine supply (CB supply is immaterial). The lack of any new mining projects and declining production should support prices over the next year.

Druid@Mikal#1278971/3/05; 21:47:07

U.S. Treasury Bonds
Maturity Yield Yesterday Last Week Last Month
3 Month 2.12 2.09 2.09 2.07
6 Month 2.47 2.45 2.43 2.27
2 Year 3.07 3.06 3.03 2.90
3 Year 3.23 3.21 3.18 3.08
5 Year 3.61 3.60 3.64 3.59
10 Year 4.21 4.21 4.29 4.25
30 Year 4.80 4.82 4.91 4.92

Druid: Mikal, look at these spreads along the various maturities to gleam the direction. I keep reading a lot of analysis by those in the gold camp which suggest that interest rates are going to rise from here to who knows where if the dollar keeps within its descent to Dante's place. These analysts still don't understand the power of the printing press and how the credit market can still be used to eke out just a little more time. We're still 4%+ away from zero.

If the current administration is hell bent on implementing their proposed social security scheme by floating a couple of trillion dollars in bonds, then yields will continue to converge thus collapsing the carry trade in bonds, but then, I'm sure another carry trade will emerge somewhere within this network.

BelgianCobra/Rich#1278981/4/05; 01:41:47

Each time, you both, kindly respond to my questions, I learn more (better) on where we keep on diverging in opinion (perception).
Our main differences are...You can live with the many unanswered gold questions, thanks to pragmatic simplification.
I prefer to know WHY these gold questions remain unanswered.

And you certainly will both agree, that there are indeed many serious gold questions that don't have "yet" serious (correct) answers. Otherwise, there would be very little reason to stay on this particular forum. Right ?

The many gold questions will continue to be asked over and over again...up until the "real" answer becomes fully consistant. The questions will not go away when the same simple "escape" answers are provided, permanently.

Now, I hear you both the questions/answers-thing, providing you juicy profits, Belgian !?
What's bringing the most mustard on the table,...theories or stories ?
And it is exactly here, that we differ, gentlemen ! As soon as there is reason to start question the evidency of things...the question avalanche will become unstoppable and no simplification will bring it to a halt.

And the one and only way to avoid any gold question avalanche is to contain the goldprice and cover it with "the market" mantra. There are no (gold)theories...there's "only" the perpetual markets ! And here comes my next question, Sirs : Will the existing goldmarket remain the same...?

Black BladeJP Morgan bullish about gold price#1278991/4/05; 02:39:35


JP Morgan remains bullish about the dollar gold price. "The medium-term risk remains to the upside, with the current decline expected to correct only a portion of the July to December advance, hence leaving the multi-year bull trend intact," JP Morgan analysts wrote. "Key support is $409/oz and as long as the market remains above there, we expect the completion of the correction phase to provide the platform for the market to extend higher in the coming months," the bank added. -- I-Net Bridge

Black Blade: JP eh? Hmmm... Meanwhile BOJ dollar buying appears to have picked up sharply in light of the recent Yen crash. It seems that the Japanese and others are back in the game buying up US debt with reckless abandon.

Black BladeGold, Silver Drop On Fund Sales#1279001/4/05; 02:52:28


Gold dropped over $8 to two-month lows of $429 an ounce Monday on fund and bullion bank sales spurred by a turn higher in the U.S. dollar and a deteriorating technical picture. The turn higher in the U.S. dollar versus other currencies was deemed the main driver behind the weakness, rendering dollar-denominated gold less appealing outside the U.S. This combined with thinner-than-usual trading conditions because of New Year holidays in Asia and Europe and batches of pre-placed sell orders that added to sell-side volumes as prices declined, and made for a turbulent start to the trading year for Comex gold. Dealers agreed that further choppy trading could be seen over the near term.

However, with many players retaining a bearish outlook for the U.S. currency in 2005, some good levels of speculative bargain hunting in dollar alternatives such as gold are expected at some point, they said. Some short covering by local dealers is also deemed on the cards, especially once trading population levels return to normal later in the week, they added.

Black Blade: Probably not much positive trading action until next week. Meanwhile there is some evidence of US dollar buying in foreign markets and the thin trading conditions have exagerated price movements in commodities (particularly petroleum and metals). Could be some good entry points this week before traders return in force next week.

spotlightDebt To The Penney#1279011/4/05; 03:56:02

The Debt To the Penny
The following is an example of how government "times" the national debt figures. If you blink, you could miss the fact that they let the debt accumulate before reporting it until the day when everyone is busy with new years eve preparations. Looking at the posted increases and decreases on a daily basis reveals that the increase from 12/30 to 12/31 was oviously manipulated.

This is also an example of what can be expected in the coming year, in spite of the rosey debt reducing promises recently made by Bush.

So goes the debt, so goes the dollar. So goes the dollar, so continues the gold bull market. Nothing has changed, it has only gotten worse...

Debt To The Penny.
Current Amount

12/31/2004 $7,596,165,867,424.14


12/30/2004 $7,521,283,292,667.91
12/29/2004 $7,527,874,344,820.55
12/28/2004 $7,536,267,845,909.18
12/27/2004 $7,528,393,823,386.88
12/24/2004 $7,527,973,971,610.37
12/23/2004 $7,525,707,616,321.00
12/22/2004 $7,530,066,927,081.97
12/21/2004 $7,531,570,079,606.11
12/20/2004 $7,524,492,792,912.62
12/17/2004 $7,523,699,112,455.23
12/16/2004 $7,519,646,830,227.83
12/15/2004 $7,529,346,941,107.40
12/14/2004 $7,551,124,808,067.16
12/13/2004 $7,547,176,500,405.75
12/10/2004 $7,546,868,151,652.32
12/09/2004 $7,546,778,677,941.37
12/08/2004 $7,550,023,742,837.60
12/07/2004 $7,553,295,719,364.18
12/06/2004 $7,535,629,022,968.30
12/03/2004 $7,534,027,040,378.62
12/02/2004 $7,522,602,352,797.79
12/01/2004 $7,514,622,255,740

CometoseJohn Murphy/ something from over Yonder#1279021/4/05; 06:04:06

BUFFORD (john murphy $$$) ID#252216:
dollar tends to stabilize early in the new year

not bullish on the dollar

gold correction, market anticipation of dollar rally

final stages of cyclical stock market rise ( from oct 02 ) problems after january

likes japan , out performing global markets

BoilermakerGold ETF gets 14.3 tons Monday#1279031/4/05; 06:24:43

On Monday, Jan 3, "Authorized Participants" delivered 14.3 tons of gold to the GLD custodian(s) for which they were awarded about 4.6 million shares shares of freshly printed stock. I am curious about the size and timing of this event coming just after the recent gold price pullback.

First, it seems counterintuitive that 14.3 tons of physical gold could be assembled during a period of notable gold weakness. Perhaps some of this came from the recent Euro region central bank sales?

Another possibility is that it represents most of the 15.5 tons of gold that was redeemed by AP's on Dec.7, just before the last substantial price decline for gold. But that subsequent price decline suggested that the gold was sold back into the market and hence wouldn't be on hand for the Jan. 3 purchase. In any case these AP's seem to have a sixth sense for market timing (or more likely some inside info on what's coming).

Now I'm trying to figure how these transactions might fit into some scheme for gold price manipulation and/or profit opportunity for the AP's. I'm definitely in need of some help on this question. Any ideas?

CometoseGOLD ETF documentation#1279041/4/05; 07:12:44

Date: Tue Jan 04 2005 08:30
ViPer (***) ID#243326:
Streettracks gold trust....GLD
added 459 thousand oz's yesterday, 14 tons,
now has 109.16 tons in the vault, 6 tons more than when they whacked gold at $457.

Looks like they have covered their shorts very nicely here and bought bullion with the short
proceeds, it oughta be UP from here forward....Jmo

Belgian@ Boilermaker#1279051/4/05; 08:06:13

Ari has already been answering your request for help...remember ?
Whilst the dollar liquidifies (prints) for the planet's own good...that same dollar expects a fair gesture from the ECB in lowering its IRs. Part of the unspoken deal to manage the dollar decline, "orderly", all together.
Lowering EU IRs for a considerable period of time (hum), can only result, theoretically, in mobilisation of savings into consumption.

Dollar credits expansion + mobilisation of savings into economic activity, will imo, remain a theory, indicative for desperation.

Watch how the IMF and the World Bank are going to "move" in the tsunami area !!! This might evolve into another Argentina scenario.

TownCrier'Gold Forecast 2005'#1279061/4/05; 10:10:00

Michael Kosares, author of the hot-selling book, "The ABCs of Gold Investing - How to Protect and Build Your Wealth with Gold", has made immediately available to all USAGOLD visitors his important first Client Letter of the new year in which he puts forth his forecast for gold in 2005.

Click URL above, and then follow the link within the Client Letter.


TownCrierFed again adds cash at sub-FOMC rate#1279071/4/05; 10:49:26

What's the genuine meaning of a target fed funds rate as public policy when the trading desk tasked with implementation walks a looser route?

Today, as the commercial market in fed funds was trading in line with the FOMC policy target of 2.25 percent, for the second straight day the Fed's trading desk sent a more accommodative signal, along with fresh billions, and intervened in the open market at significantly lower rates.

This morning via two-day repurchase agreements the Fed provided a fresh injection of $10 billion to all interested banks that were offering Treasury collateral at rates as low as 2.15 percent. The Fed averaged 2.154 percent for the total $10B open market operation.

The easy provision of reserves by the Fed, coming atop a seasonal period when flows of holiday cash now ought to be flowing back to swell the reserves of our nation's commercial banks thus rendering the intervention otherwise unnecessary, leads me to believe this extra ease in policy implementation is likely an emergency response to various unspoken financial dislocations stemming from the South Asian tsunami.


TownCrierBoilermaker, ETF gold flows#1279081/4/05; 11:40:34

On several topics, including this one, there was a fruitful discussion between Aristotle and Belgian that began on December 22nd and was probably not seen by very many due to thin holiday traffic.

I bookmarked the exchanges and will provide for your convenience the part related to the ETF gold item along with a url as mentioned below.
Belgian (12/23/04; 04:46:36MT - msg#: 127647)

Can someone explain me how the GLD-ETF manages it, to increase/decrease its holdings of physical gold with tonnes per short period ? Please. TIA. How is the physical gold coming in and out ?
Aristotle (12/23/04; 05:49:32MT - msg#: 127648)
ETF Gold flux -- some simpleton thoughts of mine shared with B-man

Belgian, if I were behind my desk at HSBC tasked with smoothing operations on behalf of my bullion banking LBMA brotherhood, if I did my job well it would be only in the rarest of instances that my presence would be felt in the open market as a seeker of physical Gold. Instead, that is most of the time, to "get" the Gold needed for the ETF coffers I'd tap into our bank's various unallocated pools of Gold deposits through ultra cheap Gold loans, reassigning the various available bars of "free agent" Gold deposits over to the allocated ETF account. And then, when I need to dishoard some of those allocated ETF tonnes, I'd simply reverse the process and pay down a corresponding tonnage of my loan.

It's a pretty slick scheme for me and my brotherhood because, as the lending agent for the unallocated accounts, I'm not going to be as worried about an illiquidity risk of low reserve status on those accounts when I can see that I'm still the one holding the tonnage comfortably in the same vault, allocated to the ETF that me and my brotherhood buddies at Bank of New York and UBS are able to control.

Offering the ETF was a clever way for us to divert possible Gold buying interests away from explosive open market style Physical demand, and keeps it comfortably in our own house where we can safely reassign unallocated deposits into allocated lists and back again. That's millions of dollars that we now don't have to worry about blowing like a gale wind upon our house of cards. We've tamed the wind by keeping it within our books. We can do this because like we talked about earlier there aren't many people here in the States who are conditioned to know the difference between real Gold Wealth versus a derivative account bearing a dollar sign.

It's so easy, but people can't figure it out. If it's heavy and yellow, it's reliable Wealth. If it has a "$" on it, it's an accounting device, a derivative, a vital step away from real wealth.

Gold. Get you some. --- Aristotle

To visit those two days in the archive, click the url to get you started at the earlier of the two days.


Gandalf the WhiteNOT to WORRY !! --- Just building a BIGGER "UP-FLAG" !! <;-)#1279091/4/05; 12:23:51$GOLD,PHTBDANRBO[PA][D][F1!3!!!2!20]&pref=G

The GOLD P&F Chart is showing some RED !

Federal_ReservesTownCrier> In fact the FED reduced the level off outstanding#1279101/4/05; 12:24:34

Repo's by 2billion today from 33billion to 31billion removing liquidity from the holding tanks of the NYSE banking system.

24billion in repo's expire on Thursday.

This is an astounding amount.

It will be interesting to see if they decide to withdraw the holiday cash even more.

Gandalf the WhiteCan you "read" this Chart ? <;-)#1279111/4/05; 12:32:12$HUI,uu[h,a]daoayiay[pb200!f][vc60][iut!Ua12,26,9!Lh14,3]&pref=G

"WHEN" both the Slow STOCHASTICS and the MACD perform the next "CROSSOVER" --- it will SOON be time to yell ---
"TO THE MOON, Alice !" (for the small stocks)

Topaz@TC...another PoV.#1279121/4/05; 12:56:42

The PoG is indicating where DX "should" be. (alt 1.17 or 85ish)
The behemoth multinats are repatriating Q4 overvalued alt Currencies like theres no tomorrow.
Rather than ramp up DX, triggering a cascade of stoploss trades and the like, the Fed "adds".

TownCrierHi Federal_Reserves#1279131/4/05; 13:41:48

What's your take on the ease at which fed funds are being provided by the Fed?

By way of background for anyone trying to follow along, conventionally the Fed is to look at the market's prevailing fed funds rate as a barometer, against the FOMC's policy target, to determine whether or not the trading desk should tweak liquidity to help banks have the reserves needed for biweekly requirements -- the commercial trading of which occurs on the aforementioned fed funds market. Traditionally the holiday season drain of cash from reserves to fill shoppers' and partiers' wallets is offset by the Fed's creation of temporary funds through open market operations providing liquidity within the fed funds market. After the holiday it is traditionally expected that the Fed's bulge of additions can largely be allowed to run off as the money previoiusly in transit becomes settled again in bank accounts, providing aggregate reserves among those institutions on levels near again to the pre-holiday levels.

Sometimes the Fed actively drains funds (rather than passively draining via run offs), but we are not seeing that. The provision of funds at rates below the FOMC target, even if only to partially match maturities, is telling a story of low-profile credit accommodation and easy money that should be of at least passing interest to all dollar-system participants. Hyperinflations begin as softly.

Choose gold. Here today, here tomorrow.


TownCrierNeed gold? Great selections, great deals.#1279141/4/05; 13:54:07

Call the friendly folks at USAGOLD-Centennial for intra-day price quotes.

Owning gold is hassle-free -- you don't have to set up an account. Just pick up the phone, discuss your needs, and your physical gold will be put into the 'pipeline' for fulfillment of your order and delivery to your door. It's as easy as picking up the phone and dialing the following toll free number:

1-800-869-5115 ext. 100

You'll speak with MK, George, Jonathan, Marie, Jill and/or Jamie... and you'll likely be very glad you did.


USAGOLD / Centennial Precious Metals, Inc.Get yourself started off on the right foot...#1279151/4/05; 13:57:08

Q. How does USAGOLD / Centennial Precious Metals position itself among its competitors with regard to credibility, reputability and pricing?

MK. USAGOLD / Centennial Precious Metals has always been considered one of the most reputable firms in the business and it's always been that way. We have placed literally thousands of ounces of gold with investors and our repeat business and referrals are both very strong. That doesn't happen unless you know what you are doing and your clients know that you know what you are doing. If I were to sum it up, I would say we combine the first rate services and research that you would expect from a very large firm with the favorable pricing you would expect from a smaller, client-conscious firm.

DruidStreaming Currency Data#1279161/4/05; 13:58:04

Druid: Streaming data in the forex mkt.
BoilermakerTC, Belgian, Ari - ETF Gold Holdings#1279171/4/05; 14:57:04

Thanks for the reminder about Ari's post of 12/22 and I do remember reading it. Wasn't it James Turk who was checking the serial numbers on the bars and found some duplicates? Perhaps someone could keep track of the SN's of the bars coming in and going out of the ETF to see if they show up multiple times. If the same bars come in and go out of the ETF holdings it would support Ari's theory that the ETF gold is just borrowed from unallocated accounts. I have never doubted the purpose of this fund, to divert investor demand for gold from physical form to paper derivitive.
TownCrierFed helps dollar but won't alter longer-term trend#1279181/4/05; 15:55:08

NEW YORK, Jan 4 (Reuters) - The dollar extended its New Year rally on Tuesday after the Federal Reserve gave a clear signal that U.S. interest rates are headed higher, but the potential for further gains does not alter the fact the currency is still in a long-term downtrend.

Anecdotal evidence suggests dealers are still not placing outright bets on the currency strengthening but instead continue to unwind the over-extended bets built up in recent months that drove the dollar to record lows.

In short, the dollar's near-term picture is brighter, while its longer-term outlook, with record U.S. external deficits and their funding looming large, remains bleak.

...In releasing the minutes from its Dec. 14 meeting, when it raised rates by a quarter percentage point for the fifth consecutive meeting, the Fed could not have been more blunt in telling the market where rates are headed.

"Even with this action, the current level of the real funds rate target remained below the level it most likely would need to reach to keep inflation stable and output at its potential," the minutes read.

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

Beware the inflation. Choose gold. And when you do, please choose USAGOLD.


USAGOLD Daily Market ReportPage Update!#1279191/4/05; 16:28:48">
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.

Tuesday market excerpts

U.S. gold futures fell but settled above a two-month low on Tuesday while silver hit a three-month nadir, on a second day of fund liquidation in precious metals due to a U.S. dollar rally, dealers said.

Prices found buying support at lower levels though, with London and Tokyo players back in the metals markets after New Year's holidays. COMEX February gold ended down 50 cents at $429.20 after moving from $431.30 to $424.80.

"Clearly it is a dollar rally" that hit gold after it had been at high levels at year-end, said Graham Leighton, vice president precious and base metals at Societe Generale.

The dollar rose on short covering after a series of record lows against the euro at the end of 2004. It last hit $1.33 per euro, up more than 3 cents from last week's all-time low at $1.3667.

Analysts were unsure if the dollar's rally would hold, however, as the focus turned to the December U.S. jobs report due Friday.

"It's hard to read this market at the moment," said a dealer with a large U.S. investment bank. Over the longer term, however, market watchers were in agreement that gold should push higher again.

"The fundamental view of the market has not changed in the past two days. We are still expecting gold to do well over 2005," said Victor Flores, senior metals and mining analyst at HSBC Securities Inc. in New York.

"A lot of this market's movements are closely correlated with the U.S. dollar, and the dollar's strength so far this year has sparked a large portion of the selling we've seen in gold. But we are still expecting more dollar weakness in 2005 because the U.S. economy's fundamentals have not changed, so gold should have an all right year in the end," he added.

----(see url for 24-hr international economic newswire, market prices)----


Dollar starts 2005 with a bounce, fueled by Fed view -- interactive investor

Fed helps dollar but won't alter longer-term trend--

Fed Says Rates Too Low to Curb Inflation-- Reuters - Business

Fed committee's fears of inflation drive stocks down sharply-- Lincoln Journal Star, Nebraska - Business

US stocks hit by inflation concerns-- Australian Financial Review - Market Wrap

Dow ends down 99 on inflation concerns-- Alaska Journal of Commerce

Bush Administration Begins Search For New World Bank President-- Dow Jones Newswires

Chris PowellTreasury Department tells GATA that it has no authority to confiscate gold#1279201/4/05; 18:28:40

Latest GATA dispatch.

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.

FlaccusConfiscation#1279211/4/05; 19:21:13

Well, that's a load off my mind. I won't worry about it anymore now that some low level functionary from the government told me its not the law anymore. Somehow I knew that. Sarcasm aside, I wonder what kind of a letter you would get if the president issued an executive order (as Roosevelt did in 1933 during a banking crisis) telling us to turn it in. Why do I believe he would quote a different statute to GATA? I have a hard time believing that anyone from GATA would swallow that one.
Ag Mountain@ChrisPowell @Treasury#1279221/4/05; 19:54:42

I'm sure GATA guys don't need my advice to don't let yourself be so easily put off your guard. Mark Twain already wrote the last word on the subject.

"No man's property is safe while Congress is in session."

Chris PowellMore on the possibility of confiscation#1279231/4/05; 20:12:19

Of course Flaccus is right that the U.S. government
could change or try to change its position on
gold confiscation. But it IS notable that, right now,
the government says it lacks the authority to
confiscate gold, and thus, presumably, any attempt
at confiscation would require new legislation. Thus
the government's admission and the need for new
legislation would seem to make any confiscation
more difficult, which is progress.

It's arguable but since gold has long since been
formally demonetized and an absence of gold from
the channels of trade today would have no bearing
on the volume of money, there would seem to be
no legal rationale for another gold confiscation
-- or at least not the rationale offered in 1933.
Further, today's Supreme Court is a lot more
favorable toward property rights than it was
when FDR was appointing the justices.

Yes, maybe the government could turn fascistic
overnight, but there is no more danger in that
to gold and gold owners than there is danger that
the government might start imprisoning citizens
because of their ethnicity or religion or that
it might start shutting down newspapers. A
fascistic government would be a danger to
EVERYTHING, not just gold.

When the fiat hits the fan, the little stashes
held by gold owners in the United States probably
will be the last thing the government worries about.

In any case, anyone who thinks, as Flaccus implies,
that the right to own gold is impossible to
maintain and thus not worth defending would seem
to be wasting his time at the USAGold Forum.

No one owns gold because he is a defeatist
about individual liberty. One owns gold, in part,
because he is willing to take the risk of defending
liberty -- at least his own liberty. And surely
giving the Treasury Department a little discomfort
by putting it on the record about its lack of
authority to confiscate gold is a risk worth taking.

Cavan ManConfiscation#1279241/4/05; 20:32:24 Executive Order (Hello!)
Cavan ManPS...(Chris)#1279251/4/05; 20:40:19

Fascism begins with a flag bedecked SUV :>)
mikalPersonal property protection is gold. Get you some.#1279261/4/05; 20:57:02

Inflation, land-grabs as designated in Executive Orders and Emergency War Powers and taxes of various kinds are the modern wealth confiscation, not our common, cherished gold.
U.S. Deep Storage Gold designated by the Treasury Dept. is hard wealth, whether leased or not. No need for the U.S. Mint's newly promoted Eagles, nor Maple Leafs, old coins or any private bullion. It IS STORAGE gold:
* Federal lands to be opened or leased for mining "strategic minerals"

* Gold in vaults including NY Fed,
in the unaudited Ft. Knox and others

* Resource-rich land and mines targeted for takeover

* Windfall profits taxes, capital gains taxes

By "confiscating" gold the US would scare gold trading overseas and to antique shops, pawn shops, coin shops and shows, flea markets, jewelry stores, barber shops, coffee houses and more.
(A low profile and common sense protect one's rights and family from unscrupulous, nosy people whether governments or private tricksters who would steal or unnecessarily tax private gold collections.)
If the US attempted confiscation alone, our international credibility would be irreperably mauled, trade and sorely needed investments would be unthinkably wounded- bonds, the dollar, equities, capital investment, etc.
It's like assuming gold is not the world's premier reserve currency, even though full-color brochures produced by the U.S. Mint, have for years touted gold's history, safe-haven function and value in embarrassing detail to smart and well-heeled investors alike, who were willing to take the time to pick it up and read it.
All gold trade in U.S. borders would be openly invited to flourish not just in the places listed above, but in every black and back-door market existing or conceivable, offshore to the Carribean, Europe, Shanghai and all points in between.
Today's unprecedented strength of fundamentals and suppressed energy, combined with political will, can allow gold's price in every currency to rise so quickly, most will fail to commit to a significant stake. This POG would "confiscate" a lost opportunity from those with little means or having insufficient interest in traditional money and hard assets. This, combined with the resource, tax and inflation "confiscations" alluded to above, should be more than enough "booty" to keep the revenuers busy for awhile.

Noble1Who's Who at the GLD ETF?#1279271/4/05; 22:08:19

TC, Belgian, Ari, YGM, Boilermaker,

You have all shown keen interest in following and deciphering this ETF thing as have I. But I am not yet convinced that it is a negative conspirancy.


In your msg#: 127648 You conjecture:

"...I'm still the one holding the tonnage comfortably in the same vault, allocated to the ETF that me and my brotherhood buddies at the Bank of New York and UBS are able to control." And Boilermakers' #127917 response that he would be interested in tracking the same SNs in and out of the fund;

I offer the following:

The key word is "allocated". Allocated=owned and identified. At this point, the gold in the ETF is all allocated, audited, and as Boilermaker points out-it's serial numbers are published and can be tracked. I challenge anyone to identify this much allocated, auditable, publically identified physical gold anywhere else.

Given that many large bullion holders prefer to store their gold in secure depositories and most depositories hold more than one persons's/entity's physical gold, I would expect to see the same gold moving from one holder to Another as they trade. And since when do we have this transparency to track SNs? Since the introduction of GLD. Personally, I don't think the BBs or CBs like us seeing real gold held or moved around.

GLD has chosen HSBC as it's primary depository/custodian.
Since GLD is sponsored by the World Gold Council, I think that it's members are basically it's controllers. The members of the WGC are miners/producers-not bankers. Therefore, I think that the BBs and CBs may try to be GLD manipulators, but I don't think that they are it's controllers. Miners are interested in promoting their product, gold, for consumption thus increasing demand and, hopefully, price, given the limited supply. I know this wasn't always the case over the past 1+ decades but even now Barrick is conforming. I do believe that there has been BB-CB coordination/manipulation, as outlined by GATA, that has provided metal to the market to absorb dollars and limit the expected rise in the POG as investors move out of fiat and into PG. They attempted to hide the current weakness in fiat by suppressing the POG. The CB benefited by the support of fiat, the BB benefited in the carry trade, the miner/producer benefited by obtaining an immediate and premium(?) price for his product. This appears to be coming to an end as they run out of physical. Winding down/elimination of hedge books. WA1 and WA2 (CBs defecting). GLD and it's identifiable stock of PG?

With respect to GLD, the main players are:

1) The Sponsor: The WGC miners/producers.

2) The Trustee: The Bank of NY; responsible for the "shares" held in the trust.

3) The Custodian(s): Today HSBC---Tomorrow could be your second cousin's dead grandmother.

4) The "Authorized Participants": I take to be BBs and other major gold holders/insiders/billionares.

5) The investing public: Mom and Pop, IRAs, 401Ks, pension plans, etc.

So who is with us?

I think #1 and #5.

Who is against us?

A portion of #4.

Who is neutral?

Hopefully #2 is just kind of a watchdog for the shares.

Who is left?

#3-As I said in my msg: #127253-they are the "ugly". The weakest link allowed by the sponsors. It may be the sponsors were forced to accept this in order to become listed!?

To be continued.


Gold StandardConfiscation - yet again.#1279281/5/05; 03:12:16

I have always maintained that confiscation is not necessary - all that a Government has to do is make the sale or trading of gold or precious metals illegal, except for any sale to the "Gold Marketing Board" (or whatever it may be called).

Confiscation is (and will be clearly seen as) a despotic, fascist, and ultimately futile effort which will reflect very badly upon the Government that proposes same.

An elegant solution for the Government is to legislate (a simple stroke of the pen!) to make the selling or buying of gold illegal, unless done through a Government entity.

Somewhat like the drug trade, with similar criminal penalties.

Lots of goldbugs will say "Allright! Stuff sells on the black market for much more than market price!"

OK, let's look at Mum & Dad Investors, who have sensibly hoarded gold and other bullion. Are they going to contact their local crack dealer to establish (a) the best way of selling; (b) whether anyone is going to buy it; (c) what the "middle-man cost is going to be; and (d) what's to stop your local friendly crack dealer setting you up for a robbery immediately after the transaction.

What if "cash money" disappears by Government fiat?

I can confidently predict that there will NEVER be confiscation on the scale seen in 1933. However, there are many simpler means of achieving the same ends.

I'm willing to risk the black market, but I don't think too many people would, if the penalties were akin to those for the "black market" in illicit drugs.

Cheers, GS.

ArcticfoxFrom the King Report#1279291/5/05; 04:51:46

Greenspan and Bush bet that by funneling billions of dollars into corporations via quick fix remedies the economy would rebound when corporations spent their orchestrated riches on capex and new jobs. That wish upon crony capitalism is an abject failure. Also, Easy Al thought that he could engineer another covert bailout like his carry trade for the Money Center Banks in 1991-1992. This funneled prudent peoples’ saving into banks and hedgies that leveraged up. Once again the average guy was sacrificed.

The WSJ's survey of 56 economists has a consensus GDP of about +3.6% for 2005. When have you ever seen or heard main stream economists, especially on The Street, forecast a recession?

USAGOLD / Centennial Precious Metals, Inc.Make a risk-free request to help you enter the gold market with grace and confidence.#1279301/5/05; 08:07:58">Get a head start on the gold market!
OvSGolden Standard#1279311/5/05; 08:55:38

While contemplating Hampton Court
Palace's "The Field of the Cloth
of Gold", I took time to tune into
Paranoia galore. Always happens when
the price of gold is adjusted.
Mathematicians take heart: You can
hold on to some gold after the very
unlikely confiscation: Win the
Fields Medal for Mathematics, the
equivalent of the Nobelprice: it's
made of pure gold...
Just in case so, if that unlikely
C. should occur, there is one way to
safeguard your precious without be-
coming an outlaw; but that takes more
of my thinking time and a discussion with Michael K. Cheerfully yours,OvS.

TownCrierGold confiscation?#1279321/5/05; 08:59:16

If you're concerned about the precedent and potential for gold confiscation in the United States, here's a thought: arm yourself with information!

Call USAGOLD-Centennial Precious Metals. Talk with MK, George, or Jonathan and request the 50-page memo specifically compiled on that issue by Michael Kosares and George Cooper.

Rather than individually casting about with partial evidence and conjecture, or simply watching others do likewise, doesn't it make sense to tap into professional resources who've been in and studied this business of gold for more than 30 years?

Call Mike or George today, and thus get confiscation under your own grip. Arm yourself with information!

Dial toll free 1-800-869-5115 Extention 100. Ask for MK or George, and ask for their info on confiscation. Then you can confidently carry onward knowing you've made great strides to cover your bases by squaring away the facts. Subsequently you won't be apt to be misled by competing firms we are aware of who often notoriously manipulate the issues to prey upon unwary customers to sell them mint proof sets or exotic collectibles and to "justify" their exorbitant price mark-ups for the very same popular historic gold coinage that USAGOLD-Centennial sells for much much less -- USAGOLD often offers them at prices nearly equivalent with bullion coins! Do yourself a favor and get in touch with USAGOLD-Centennial today.


CoBra(too)@ Belgian#1279331/5/05; 10:28:14

You've been "accusing", in lack of a better description, Rich and myself to run in essence with the paper crowd. As an easy answer, too easy by far, I'd be compelled to answer - if you can't beat 'em, join 'em!

Well, that's as far away from truth that anything you're instigating here... and none of us are screaming show me the money.

I guess, we both have a fundamental understanding of the issue of gold - otherwise, as you've stated why should we be here and participate in the discussion. We rather ask now - show me the gold - to the political and major financial party's involved in its suppression.

I believe, that it is your understanding that free gold should be freed from any official intervention; A mantra, which never will become totally true and never has in history. To repeat my mantra - Gold is an eminently political metal - and the pure US Constitution as introduced by Jefferson and Adams has clearly spelled this out. The closest the globe has ever come to free gold and with it individual freedom and liberty.

Today, we see big government, exorbitant taxation and paper confetti printed from hot air based on debt only. History is clearly witness to the final fate of the exuberance of pyramiding paper - or is it now electronic - debt upon debt. The short term financial asset gains are only another form of stealth inflation. Bubbles, which will be pricked. It is only real savings, which lubricate the long term economic well being of nations.

Of course, you may argue that long term wealth is only proven to endure by putting it all into gold - the only wealth preservation mankind has at its "disposal" (wrong expression again; though please understand this lingo is my second too).

...And as to your next question: Will the goldmarket remain the same ...?

Yes and No, IMHO!

Yes, it will always remain a political metal.

No, it will not as easily be managed, manipulated and maybe even distorted by paper derivative price finding mechanism's as was and still may be the case at the LBMA, COMEX and other substitutes of reality.

Finally, I feel I don't have to go back to all the reasons why we're where we are, as it was posted and hammered in for years here and at a few other sites of merit.

... Maybe, just one more thought. We're looking at a metal, which has certain qualities to make it what it is. It was subdued for too long by political forces. We are now having had more than 20 years of supply deficits, filled by paper gold, derivatives and other paper promises that new production is now way under par to the long term trends. This is even more accentuatae by huge forward sales - shorts in reality - by some of the major producers, which now themselves face drastic production deficits.

I do not feel the gold market can be held in check for much longer - at least not before reaching a new equilibrium - an equilibrium the world may be content to live by - for a while at least.

Lastly, Gold has always been a phenominal portfolio insurance and protection - while not so in times of asset bubbles - so I still would recommend some diversification and go from there.

Well, that seems a little cryptic and as it was in response to another EUrolander, Belgian, I'd query what the POG in terms of €'s has done to confirm his enthusias'm. Realizing the mute question I'll assert again that all my paper gains have gone into bullion over the last several years and will for a long time.

Even I may realize, along with Mexico, Russia, China and the Islamic Gold Dinar that the systemic risk of paper currencies is growing exponentially.


PS: Pledge some gold to Tsunami relief ...

Cavan ManHello CB (too)#1279341/5/05; 11:24:47

Like the Guinness commercials: BRILLIANT!
USAGOLD / Centennial Precious Metals, Inc.To properly diversify requires an understanding of WHAT you buy...#1279351/5/05; 11:44:54

Q. I've noticed that USAGOLD / Centennial stresses education more than most of your competitors. Why is that?

MK. For years, we have emphasized "We educate first-time investors" in our advertising. We believe education to be the key to successful gold ownership. To make a long story short, we tend to keep our clientele as they become better educated, while many of our competitors tend to lose their clientele once they become educated. It shows in the type of services we consider important to complement our sales and delivery programs.

Randy interjects... Mike is way too nice to say this bluntly so I will. What I've noticed about the apparent rationale behind some of those other firms' operating philosophy is that, if they bend the client over far enough for their wallet the first time they ever do business together, they really don't have to care about getting repeat business. They find new uneducated targets ripe for picking arriving at their doorstep every day. It doesn't have to be that way, but some investors simply don't take the time to shop around for a quality firm that will treat them professionally and with respect. They should.

Q. What are some of the criteria a prospective investor should look for in a gold firm?

MK. Credibility, longevity, pricing, service and compatibility -- all come into the mix. Of those I rate credibility and its sister virtues -- reliability and reputability -- the most important. Too many of the national firms have brokers who were selling condos at the beach or automobiles a month ago and now suddenly they've become "gold experts" selling leverage schemes, $50,000 rare coins, reproduction medallions at 25 times their gold content, or overpriced silver investments. Most sophisticated gold investors would probably like to avoid that sort of thing.

TownCrierDon't miss MK's 'Gold Forecast 2005'#1279361/5/05; 11:54:22

Michael Kosares, author of the hot-selling book, "The ABCs of Gold Investing - How to Protect and Build Your Wealth with Gold", has made immediately available to all USAGOLD visitors his important first Client Letter of the new year in which he puts forth his forecast for gold in 2005. See URL above.

To enjoy access to MK's weekly Client Letters, request a free info packet from USAGOLD-Centennial and you will be provided with several additional Letters for an interim period. Of course, all clients of USAGOLD-Centennial Precious Metals will receive all updates on a continuing basis as one of the several added benefits of doing business with this firm.

Choose gold, and choose the company you can rely on -- not just through the moment of order fulfillment, but for ongoing insight and support through the life of your investment. Choose USAGOLD.


TopazOpen Interest.#1279371/5/05; 12:50:33

This recent PoG downdraft has had little or no nett effect on the OI @ Comex which leads me to believe a sharp rebound in Gold may be in the offing.
Another aspect of this current $/Gold disconnect and worth keeping an eye on is "delivery".
It's my understanding they can trade with impunity during Jan as FND for the active Month is not 'till 2-1-05.

CavanMan ...I'll second that!

Liberty HeadGov't Confiscation#1279381/5/05; 13:52:14

Whether or not the government confiscates gold, the fact of the matter is that every single cent the gov't has ever spent was confiscated from somebody under threat of force.

Why would anyone beleive the gov't would meet anymore resistence to confiscating gold then it encountered by confiscating our Constitutional protections, Bill Of Rights or value of the dollar?

The amount of wealth confiscated by our gov't has no limit and increases each passing day.

Yet many citizens still use a dysfunctional, unipolar logic and cognitive dissonance to justify the actions of our gov't.
Folks who dare to speak out are routinely maligned and belittled.

While it is better to hold gold than fiat, we are still left with a nation in decline. Even if our nation's decline is terminal, there is always hope and gold.

Best Wishes

USAGOLD Daily Market ReportPage Update!#1279391/5/05; 14:19:02">
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.

Wednesday market excerpts

U.S. gold futures retreated on Wednesday, closing lower under pressure from newfound strength in the dollar this week, which dented the metal's demand from overseas traders, dealers said.

COMEX February gold closed down $1.90 at $427.30 after trading from $429.30 to $425.90 and staying atop Tuesday's low at $424.80.

Gold was on the defensive due to the firm dollar, with speculation the U.S. Federal Reserve will raise interest rates above those in the Eurozone and uncertainty ahead of Friday's U.S. jobs report for December, trading sources said.

The dollar rallied before easing in the afternoon, after the minutes of the U.S. Federal Reserve's latest meeting suggested it might step up the pace of interest rate rises.

Gold usually has an inverse relationship to the dollar as investors use itas an alternative to the U.S. currency. However, some brokers were surprised to see charts were currently showing gold leading the euro with losses, which runs counter to the usual pattern of gold mirroring the euro.

"Short-term direction continues to come largely from the dollar but good support has been seen ahead of the 100-day moving average at $424.05, so far," said James Moore at

Longer-term, Moore said the outlook on gold was bullish with the scale of the U.S. deficits, geopolitical tensions and lots of recent investment in the market supporting the argument for holding the metal.

"Gold confirmed its reputation as a leading indicator of broader commodity weakness [Tuesday]," John Reade, an analyst at UBS, wrote in a note to clients. "This pause indicates that much of the hot money has now exited long gold trades and ... the metal is poised to rally once the U.S. dollar stabilizes," he said.

----(see url for full news, 24-hr international newswire, market quotes)---


Consumers Begin to Feel Inflation's Pinch-- iWon

Americans expect stable dollar--

NY gold closes below $428/oz, eyes on firm dollar-- - Stocks & Shares

Inflation concerns send stocks on sharp decline-- New Haven Register, Connecticut - Business

HK world's freest economy-- The Himalayan Times

Europe 'will have to act on dollar'-- - Markets

SNB's Roth says euro helps stabilise Swiss franc -- Borsa Italiana - News

BootsWhere can i buy #1279401/5/05; 14:49:31

silver bullion "engelheard" 1 OZ or some thing like that.
And little bullion 1 Gr of pur gold 999 ?

Less expensive possible.

Thank you for your answer.

From france.

Belgian@cb2#1279411/5/05; 15:11:35

In other words, dear are kindly advising me to seriously "moderate" my gold-passion (?) and leave the nice free gold theory, for what it is...and never will be.
Sure, that's a "wise" advise...and I will certainly re-consider it, thoroughly...again.

I mean it cobra and will start with it, right away.

TownCrier"euro absorbs dollar swings"#1279421/5/05; 15:29:28

ST GALLEN, Switzerland, Jan 5 (Reuters) - The introduction of the single European currency has stabilised the Swiss franc and helps to protect it from swings in the U.S. dollar, Swiss National Bank Chairman Jean-Pierre Roth said on Wednesday.

"The euro has a stabilising effect for the Swiss franc," Roth said in a lecture at the University of St Gallen. "The euro absorbs dollar swings. The Swiss franc and euro (rate) is not in danger."

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

As the euro "absorbs dollar swings" we can follow the condition of Eurosystem reserves. On the year, each dollar unit of reserves depreciated by 7.85 percent, and coupled with portfolio transactions the net position in foreign currency was cut from EUR 175.6 billion at this time last year to EUR 154.3 billion as of December 31st -- a reduction of EUR 21.3 billion.

While gold rose in dollar terms, euro appreciation reduced the nominal book value per unit of gold reserves by 2.66 percent. Coupled with Washington Agreement transactions, total gold reserves were one year ago valued at EUR 130.344 billion, but ended the year tipping the scales a net EUR 4.6 billion lower on December 31st at EUR 125.73 billion.


Buongiorno!confiscation#1279431/5/05; 16:00:30

Confiscation agents
Leave on their grim rounds
But do not return


slingshotHoly Goldie, Batman. They're coming for my Gold!#1279451/5/05; 17:30:22

Yepper that dreaded "C" word has come full circle. Although I spool up at the very mention of the word, it is good to see it at times on the forum for that means new blood to the Gold Bug Army. Yes the U.S. Treasury can not at this time tell us to turn in our wealth.
They need that stroke of the pen by Presidential Order,Patriot Act or some other cooked up legislation hidden somewhere in the Halls of Congress. Stop and think for a second. Have they not been confiscating you wealth all along in the form of taxes and monetary inflation. What tax bracket are you in if you are debt free? How about 28%? Then you have state and local tax. User Tax. How many of you pay tolls even when the bridge or road has been PAID IN FULL. They want to take away Parents rights, Gun Rights and the Right to own Gold. I have read that they will not take our Gold Just TAX the daylights out of it. The Government has forced us to take measures to protect ourselves. As more and More Joe Sixpack's enter the gold market to save himself, what do you think he will say as he is told to hand over his last way of preservation. Yeah just hand it in and become wards of the state. I have been independent all my life, soon to be an old cranky independent person. Hope I never become an old cranky independent person with nothing to lose.

YGMBEST POST OF 2005...How true although I'm LMAO :-)))#1279461/5/05; 18:19:20

Buongiorno! (1/5/05; 16:00:30MT - msg#: 127943)

Confiscation agents
Leave on their grim rounds
But do not return


ArcticfoxButler's latest..#1279471/5/05; 18:25:10


The following table reflects their information. I was looking for how many years of each metal remained to be mined. I've divided current annual world production into known world reserves (reserves that are proven). I've also divided annual production into the much larger resource base, which is the amount of silver thought to still exist in the earth. I've rounded the numbers in some instances to keep it simple.

I chose the statistics from the USGS because they are comprehensive and free of any known bias. It certainly is not my intention to mislead anyone or distort the information. I believe the USGS statistics to be generally accurate. Any other sources I checked all confirmed the USGS data.

Commodity Production Reserves Resource Base Reserves Resource Base

(………Metric Tons………..) (… .Years Remaining…)

Aluminum 30 million unlimited unlimited 100+ 100+

Copper 14 million 470 million 940 million 33+ 67+

Lead 2.6 million 67 million 140 million 23 48

Nickel 1.4 million 62 million 140 million 44 100

Zinc 8.5 million 220 million 460 million 26 54

Silver 20,000 270,000 570,000 14 29

Gold 2600 43,000 89,000 17 34

PGM 350 70,000 80,000 200 200+


(A couple of notes on the data. The USGS considers the raw material needed for aluminum, bauxite, to be inexhaustible over the next century and beyond, and indicated it's only a matter of aluminum production capacity that could possibly curtail supply. I was a bit surprised with the reserves and resources in platinum and palladium, which are much larger than I thought, but the Johnson Matthey web site confirmed the data.)

One thing should jump out at you; that on an absolute and relative basis, there is less silver remaining underground than any other metal. In other words, at current production rates, we will run out of silver before we run out of any other metal. The USGS confirms and validates Friedman's Theory.

These statistics should shock you. I've looked at reserve and resource statistics for years, but for some reason never thought the numbers through.

R PowellBelgian // moderate..??#1279481/5/05; 18:27:31

I can't speak for CoBra(too) in response to your words.....

"In other words, dear are kindly advising me to seriously "moderate" my gold-passion (?) and leave the nice free gold theory, for what it is...and never will be."

......but I can answer for myself. Please don't moderate anything. As for myself, I have never thought that this forum's intent was or should be to persuade, coerce, cajole, intimate, MODERATE or otherwise stifle anyone's thoughts or beliefs. Through discussion one may change or moderate one's own views but this process should evolve over time as more information and facts become known. Some things we may never know. Indeed, what would be the purpose or thrill of life if everything were revealed? But one's own beliefs are perhaps the most sacred of possessions and no one, no group, determines what they are.

Years ago, I firmly believed that gold is money. I once said, "Simply put, gold is money." And, though I have disagreed often with Aristotle, it was he who most persuaded me to change this belief. I now see money as a means of business transaction and gold as a possession...widely regarded as wealth. But, my point here is that rich changed rich's mind on this issue. On some issues, I've watched discussions end with points well made on both sides but no clear consensus of opinion reached. This, I believe, is as it should be. Economics is similar to ethics in that there are often no clearly "right" or "wrong" answers as there are with simple mathematics.

Often, I think, that you are viewing gold as it might be, perhaps or perhaps not should be, but simply is not at this time. I try to understand in the here and now, with help, of course, from history and with special interest in what is to come. But neither the past nor the future alters the facts of the present time. Again, perhaps I tend to evaluate the situation from a more practical, down to earth point of view whereas you see the situation on a different plain or from a different perspective. I'm not sure.

I still don't understand how gold can be "freed" from being appraised with a monetary amount (no matter whose currency is used) and until I can comprehend this, I can not comprehend further. And now, you ask me the same question...namely, what becomes of gold if the dollar fails? I can only answer that gold will still be gold and gold will be exchanged in some (new?) monetary "credit" system OR society will regress back into the most basic of barter systems.

Alter your views if you like or if, during the process of trying to substantiate your theory, it becomes evident that it should (must) be altered but do so on your own terms, not because some do not agree with the theory.
And lastly, I'd like to congratulate both you and CoBra for your mastery of this language we use, which, I know, is not your native tongue. It is a sorry tribute to our educational system that so many who use English as their primary language, do so so poorly. I always benefit from most everything both of you post. Carry-on!

GoldendomePotpori#1279491/5/05; 18:58:54

Did you hear the one about the Sri Lankan fisherman who was washed out to sea three miles? Fortunately, he made it back to land safely. But his house was gone and so was his gold, swept away in the Tsunami. I wouldn't have thought that a probably subsistence fisherman would have gold; that shows my ignorance. The story went on to say that he has managed to find two pieces of gold in the ruins, and continues looking for more.

Don't lose sleep over that gold confiscation issue; a none issue IMO.
Just come up here where I can drive across the border unmolested in many areas and sell it there if you like.
At the border they just ask: Why your going, how long you going to be there, bringing in any fruits and vegetables? Oh! I did have to take off my sunglasses so that they could see if possibly I was drugged up or drunk. ----- I worry about whether I have enough gold and silver, not who's coming to get it. Some of you folks are just gettin` wayyy too paranoid.

Not sure how, "Not One Damn Dime Day" relates to anything here, (in fact, it's hard to believe that Sir White Hills isn't all over it, for dissing his favorite political people). As a retailer I will tell you now, that this entire winter has nearly been, "Not One Damn Dime Day"...

Hey, Sir Boots, reading you loud and clear on the silver accumulation problem over there in France...big taxes and all, as I understand. I think I have a solution, just ask Sir Boiler Maker at this fine site, to sail his yacht over there. We understand that he has the keel, or whatever area you fill for ballast, just jammed packed full of silver!! Maybe, you can take it off his hands.

Tis a cold wind she's blowin tonight. My gold is cold.

NedRich........dear Sir#1279501/5/05; 20:20:59

From yours:

"I still don't understand how gold can be "freed" from being appraised with a monetary amount (no matter whose currency is used) and until I can comprehend this, I can not comprehend further".

It is a non-comprehensible position that I view gold as the ultimate possession. It is not abstract nor is it unbelieveable that gold suddenly acquires its astronomical value when fiat suddenly acquires a value of nothing.

The concept of 'free gold' and 'mark-to-market' is in dream-land. Sorry Belgian, it's soon to be over, even for Euroland. We watch 'Peak-Oil' , yes? Whilst free-gold and dollars per once are perhaps measurements of fiat/gold (read fiat per gold) try unloading a nuclear bomb in Manhattan and see what dollars REALLY mean.

The concept of what SHOULD happen vs. what WILL happen vs. MIGHT happen are 3 scenarios that the Feds will have to deal with. In case this is too ugly a discussion topic then delete the thread. Terrorism will end negotiations...all of them. Sorry.......reality sucks.

I just read another ugly concept, "Blood and Oil" by Michael Klare. The short story is oil is getting 'skinnier' and soon to be shared by several parties instead of one. This will cause hardship. In case anyone is queasy about the subject, heads will be shot off just for fun....lots of them. Ask an Iraqi or an a year.

And it gets uglier...........

On the bright side, oil gets scarcer and demand increases..........and then you die. But first WWIII and in case there's anyone standing nuclear fallout and a host of other inconveniences.

Am I kidding?

Well you decide....collect rubles or dollars or pesos or whatever. I'm collecting gold, am being quiet and getting out of Dodge.

Is there Another choice? Sorry to puke on your parade but that's the bottom line, yes?

Tell me an option?


mikal@Goldendome#1279511/5/05; 20:29:48

Good to hear from you. Sorry to hear about your close to "not one damn dime day" situation. I hope your gold sees you through.
Re: "the border". I would love to drive up there but I'm assuming you're in the Northwest whereas I'm in NY. Someday soon there may not even be any questions @ the border or even a border @ all.
Re: Your "gold is cold." Funny, I was listening last week to a classic rock CD by Genesis and Peter Gabriel, newly remastered, and heard those exact words in "Dancing With The Moonlit Knight", off the album Selling England By The Pound(1973):
"...The Captain leads his dance right on through the night- join the dance.
Follow on! Till the Grail sun sets in the mould.
Follow on! Till the gold is cold.
Dancing out with the moonlit knight,
Knights of the Green Shield stamp and shout.
There's a fat old lady outside the saloon;
laying out the credit cards she plays Fortune.
The deck is uneven right from the start;
and all of their hands are playing a part.
Captain leads his dance right on through the night-
join the dance.
Follow on! A Round Table-talking down we go.
You're the show!
Off we go with: You play the hobbyhorse,
I'll play the fool.
We'll tease the bull
ringing round and loud, loud and round.
Follow on! With a twist of the world we go.
Follow on! Till the gold is cold.
Dancing out with the moonlit knight.
Knights of the Green Shield stamp and shout."
Best regards

Black BladeGold tallies three-day loss of $11 #1279521/5/05; 22:06:22;siteid=mktw


"Gold confirmed its reputation as a leading indicator of broader commodity weakness [Tuesday]," John Reade, an analyst at UBS, wrote in a note to clients. "This pause indicates that much of the hot money has now exited long gold trades and ... the metal is poised to rally once the U.S. dollar stabilizes," he said. Overall, the "firm dollar will prove short-lived," UBS' Reade said, adding that he expects gold to average $440 an ounce in 2005, and climb up to $500 at some point in the second half of the year. At last check, the dollar was weaker against the Japanese yen, but had gained ground against the euro. See Currencies.

James Moore, an analyst at in London, said, "The prospect of further short-term gains by the dollar and Friday's nonfarm payroll figures are likely to see gold test key support around ... $424.05." See Economic Preview. But as the market heads towards Iraq's election at the end of the month, "traders are likely to become more cautious as the violence in the Middle East shows no sign of easing," Moore said. "[In the] longer-term our outlook is still bullish with the scale of the U.S. deficits, general geopolitical picture, and scale of recent investments all increasing the argument for gold," he said.

Prices are having a "difficult time" attracting buyers and "traders seem to be selling into rallies," according to Charles Nedoss, an analyst at Peak Trading Group in Chicago. Prices are seeing resistance at the $438 to $440 level, along with support at $425, he said.

Black Blade: I generally agree with these statements. I would add that from a purely fundamental standpoint, gold looks well undervalued in US dollar terms and well supported on supply-demand for the physical metal (with supply expected to get much tighter).

YGMBuongiorno...#1279531/5/05; 23:52:59

You still got me laughing @ your plans for the 'Confiscation Agents'...I do hope you'll post more often...We always need a little witty humor and some new thinkers around here...Regards...YGM
TopazDollar Oil.#1279541/6/05; 01:25:51

Whilst anyone who shorts Gold from hereon down WILL be handed their heads, our interest is now drawn to Oil.
Oil, on the back of recent history, would be expected to rise with the Dollar ...BUT T's are continuing to firm?

Answer: Imo, Oil will break downward here, as will Treasury Yields, to an equilibrium level commensurate with PoG.
...and you guys think "freeGold" is "intangible"... WoW!.

Belgian@ Rich / Ned#1279551/6/05; 02:07:47

Maybe it is better for me to join the silent majority on this forum for a while and re-source on the many open gold-questions.

Thank you.

TopazThis IS interesting!#1279561/6/05; 02:59:51

Let's watch we fondle our Sovs, Maples, Krugs and Phillies.

Belgian, ...mate!! don't stray too far.

SundeckProductivity#1279571/6/05; 03:32:24 you know which country exhibits the highest "productivity" = output per (wo)man-hour???

Non-Answers: Not USA, not Japan, not Australia, not South Korea, not Germany, not (dis)United Kingdom, not New Zealand, not South Africa, not France, not Spain, not ....,

Answer: ... BELGIUM!!!

Yep....just thought you'd oll like to know see it oll the time. Have a nice day...


NedBelgian..............KISS !!#1279581/6/05; 04:41:58


(..end of sorry story....)

masTopaz 127954#1279591/6/05; 06:50:51

It's break out point. Watch. They don't have the strength.
It's ugly but the trend is your friend, and this trend has just started.

miner49erBelgian - your thoughts are much, much appreciated#1279601/6/05; 07:25:12

Thank you.

Your insight is invaluable, and very unique. It is clear that you spend great effort seeking out the currents of daily affairs, and expend substantial mental energy trying to make sense of it all -- a daunting and often exhausting task.

It takes a lot of time to compose a post of any value, both in working up the thoughts, as well as the time to merely type it all together. You have put out volumes of discerning analysis over several years, which is all very obviously not just a rehash of someone else, but clearly the expression of your own work to make sense of this world as it relates to this forum's focal topic.

I very, very much thank you for the input you uniquely have brought to this table. It is not found elsewhere. Whether an individual agrees with it or not, it cannot be denied that the penetrating opinions you have on world affairs as laid out here certainly sets this forum apart from all the rest. I personally have benefited greatly from it.

With warm regards, dear Sir,

YGMGo Get Him Bill......#1279631/6/05; 08:31:40

January 06, 2005 08:30 AM US Eastern Timezone

GATA Chairman Bill Murphy Challenges Dennis Gartman to Debate Gold Price Manipulation

DALLAS--(BUSINESS WIRE)--Jan. 6, 2005--For almost six years Dennis Gartman of The Gartman Letter has attacked the Gold Anti-Trust Action Committee to placate his establishment clients in high finance.

From The Gartman Letter of January 5, 2004:

"... The GATA folks are again aflame as they blame the (gold) weakness upon various market machinations by governments and large Wall Street organizations. This is utter nonsense, of course, but we shall never be able to convince GATA of that fact. ... Even if it is not nonsense, even if GATA were truly on to something, we should care not a whit for the market will move where the market needs to move. The gold market had become far too heavily invested-in by the public, and those public investors have to be taken out."

From the Gartman Letter of April 13, 1999, with gold at $283.30:

"... We note that Gold Field Mineral Services Ltd., perhaps the most influential research group in the precious metals industry, has openly condemned the proposed lawsuit and investigation against the U,S, government and the world's largest gold trading organizations that the Gold Anti-Trust Action Committee (GATA) is proceeding with as composed of 'rather exaggerated ideas.' We concur completely. "

Since 1999 GATA has been explaining why the gold price was where it was and where it was going, publicizing enormous evidence of manipulation of the gold price by central banks and the investment houses they favor, which include The Gartman Letter's clients.

So I challenge Dennis Gartman to a public debate on the gold market. Because he may need help with this issue, I will allow him an assistant from the World Gold Council or some other apologist for the Gold Cartel.

I propose we have our debate at the Washington Press Club, where, on July 24, 2002, GATA held a press conference that was televised by C-SPAN. GATA will cover the costs of the event.

Bill Murphy, Chairman

Gold Anti-Trust Action Committee Inc.

Buongiorno!fisherman#1279641/6/05; 08:33:21

Loved the story of the fisherman, having lost all else, salvaged two gold coins from his wrecked home. Perhaps he may find two more. Or not. He has a start for a new life that does not depend upon others. Could there be a widow perhaps, with children, who could walk alongside him in life, each easing the crushing loss the other has sustained? We may hope.

A hero, this simple fisherman, because he understands a basic truth that many of my well fed and well educated neighbors do not. Life can be harsh. Unexpected.

We fortunate few who attend this forum have a basic plan for the unexpected. Thankfully. And, we are brothers in this regard, with that poor, unknown fisherman far away. Deep gratitude to all who visit these pages....


YGMSir Belgian....I CONCURR W/ Miner49er...........#1279651/6/05; 08:48:34

miner49er (1/6/05; 07:25:12MT - msg#: 127960)
Belgian - your thoughts are much, much appreciated
Thank you.

**** Dissention (sp) of thinking and perception in the ranks of any type of study group is what makes for intelligent discourse and extension of knowledge by all involved...I personally follow every trail into the hinterland until it comes to a dead-end, and the trail you have blazed becomes wider and easier to follow as we go......YGM.

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Druid@Belgian#1279671/6/05; 09:54:03

Druid: Ditto Miner's thank you.

History is replete with the concept and story of "Freegold". There was a time in our great country when you could work very hard accumulate real tangible wealth or capital and actually own it tax free. Man! Imagine that? Also, you could trade gold for something of lessor value e.g. land, machinery, home, etc to actually increase your overall wealth by acquiring real capital for future wealth generating activities which would allow you to acquire more wealth along the way.

The complete ownership of real property used to be an inherit feature of our common law legal system. You know that system that was designed around individual liberties and freedom. However, I guess the turnover (volume) rate of productivity inherit in that system wasn't fast enough to enrich the bankers of yore so to hell with that garbage and in with this new modern progressive system designed around fiat. Aaah, those were the good old days and most people haven't the foggiest about that time period or those different concepts.

Yes Sir Belgian a different system indeed. In today's new paradigm, you get up go to work and try to accumulate as many of those FRN's as you can put it in a bank and while doing so, you forage another link in your own chain. Over a long time of repeating this process all you have really done is increase the length of the chain only to fool yourself into believing you're free, can "own" something of value, and have done a good job along the way. We live in a renter's paradise and pretty much the only things you can own outright (so far) is gold and silver bullion.

I don't know, maybe this is one giant IQ test and we lab rats have found the cheese and need to just keep getting while the getting is good and see what our grade is after the test? INCREDIBLE!

Yes Sir, I'm talking about real progress here.

Belgian, there was some cool cat named Van Goethe from yesteryear who did some interesting things in his life time and came up with some pretty interesting quotes and I believe there was one about having an "original thought".

Please good Sir keep them coming.

YGMMy POG Barometer Says Gold Soon to Trend Upward....#1279681/6/05; 09:55:43

Yes GLD has bought another 14+ T so we know where the POG is headed...BTW...GLD is now at highest level of supposed Physical Bullion....(that for me will still need to be proven as to who controls the allocation and storage)
geDoug Casey arrives at the $30,000/oz number of FOA#1279691/6/05; 11:18:30

according to Mogambo Guru.
2023@ Druid / @ Belgian#1279701/6/05; 12:00:25

Great posts from both of you. Much appreciated on a daily basis - keep them coming.

Quote from Wolfgang van Goethe found on the web:

"There is nothing more odious than the majority; for it consists of a few powerful leaders, a certain number of accommodating scoundrels and subservient weaklings, and a mass of men who trudge after them without in the least knowing their own minds."

AristotleYGM -- your barometer#1279711/6/05; 12:02:42

"My POG Barometer Says Gold Soon to Trend Upward.... Yes GLD has bought another 14+ T so we know where the POG is headed...BTW...GLD is now at highest level of supposed Physical Bullion..."

There's a trick behind this weather pattern that I sense you're not yet seeing. Otherwise, rather than predicting higher prices, it shouldn't surprise you that physical Gold's "spot price" is now lower than it's ever been since the launch of the ETF, and that it "just so happens" that it correlates with the ETF's Gold allocation reaching its highest level. Superficially counter-intuitive, yes. Coincidence? Definitely not.

Belgian gets it. Townie gets it. Miner gets it. Boilermaker's very nearly got it. And you'll be getting it, too. Howzabout I track down an ellusive sandwich first, then we'll talk.

Gold. Get you some. --- Aristotle

PS. Belgian, you ain't goin nowhere, because I need you here.

2023@Aristotle#1279731/6/05; 12:36:12

Can you please explain your response to YGM as I would like to make sense of what is happening also. Is it as FOA said on the Trail... that the price of Au is low because Au is being purchased by 'those in the know'?

You said:
"There's a trick behind this weather pattern that I sense you're not yet seeing. Otherwise, rather than predicting higher prices, it shouldn't surprise you that physical Gold's "spot price" is now lower than it's ever been since the launch of the ETF, and that it "just so happens" that it correlates with the ETF's Gold allocation reaching its highest level. Superficially counter-intuitive, yes. Coincidence? Definitely not."

Thanks for all of your posts.

YGMAri...OK BUB!..Lunch is over...#1279741/6/05; 12:53:32

Time to get to work and get my mind in gear :>)) over this eff'n ETF thing....I really "would" like more understanding although my barometer post was made 'Tongue in Cheek'...No $10.00 words either, I only made gr 12...OK?
...I'll be back later on, thanks...YGM

Noble1@ Aristotle#1279751/6/05; 12:59:55

Stupid Noble1-Doesn't yet get it.

How about:

1) More entities/individuals see the long term value in gold and are adding to their GLD holdings and averaging down.

2) New investors that have been waiting for a pullback are now coming on board making their initial purchase of GLD shares.

Both resulting in increased holdings at the ETF.

docoOhio Vote Challenged#1279761/6/05; 13:09:32

Aristotle<Between mouthfulls> I'll start with a bite-sized insight#1279771/6/05; 13:23:14

Your average Gold buyer/owner has uncommonly good sense.

(And by "average" I don't mean the raw population of four out of every five buyers who buy Gold, but rather I mean the weighted average of buyers; those giant few who buy the four Ounces out of every five Ounces actually bought.)

Furthermore, people with uncommonly good sense, when they are buying Gold, do not, I repeat *NOT* turn to the New York Stock Exchange for their Gold.

The wind blows, and O! how it swirls. . . . . . . .! ! !

Check your old barometers at the door.

More after a Coke.

Gold. Get you some. --- Ari

USAGOLD Daily Market ReportPage Update!#1279781/6/05; 14:19:44">
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Thursday market excerpts

Pressured by a recovery in the dollar ahead of this week's U.S. employment data, gold futures prices dropped Thursday, tallying a four-session loss of nearly 4 percent and closing at their lowest level since mid-October. U.S. nonfarm payrolls, due out Friday morning, "remains the main event on the horizon," said John Reade, an analyst at UBS in London.

The data has the potential to push the dollar higher, according to James Moore, an analyst at, and in turn, gold could drop back to lows around $418. But Peter Grandich, editor of The Grandich Letter, believes the economic data is "likely to be the watershed event to bring the correction [in gold prices] to its end."

"The number will either be less than forecasted (thereby causing a sell-off in the U.S. dollar), or can lead to a big wash-out by a further sharp drop," he said. "In either case, the end appears near."

Comex February gold closed at $421.60, down $5.70, or 1.3 percent.

The contract tallied a loss of $16.80, or 3.8 percent, for the past four sessions and ended Thursday at its lowest closing level since Oct. 18.

Looking beyond the week, "the prospect for gold is still positive with continued violence in Iraq ahead of its presidential elections at the end of the month, the G7 summit, President Bush's State of the Union address, and U.S. deficits all increasing the 'safe-haven' argument for gold," said Moore.

As of Jan. 5, the streetTRACKS gold ETF's holdings in bullion stood at 109.14 tonnes for the second straight day -- about 6 tonnes above the peak immediately after the November 18 launch, when investors were juicing gold prices to 16-year highs. [Randy's note: the ETF bullion holdings have in fact recently climbed by 17.39 tonnes since the pre-New Year's level when the price downdraft began.] COMEX gold futures peaked at $458.70 on Dec. 2.

TownCrierFed adds $14 billion, bulk more cheaply than FOMC target#1279791/6/05; 14:29:09

Although the open market in fed funds was showing no need of assistance, the Fed trading desk boosted bank reserve liquidity by $5 billion via overnight repos as low as 2.16 percent (averaging 2.167%) and by a further $9 billion via 14-day repurchase agreements, accepting Treasury collateral at just 2.17 percent. The FOMC target at this time is a firmer 2.25%.

When money comes too easy, choose gold.


TownCrierThe stilts and props of an aged an infirm Bretton Woods#1279801/6/05; 15:28:02

HEADLINE: Foreign cenbanks buy yet more U.S. debt, Fed says

NEW YORK, Jan 6 (Reuters) - Foreign central banks increased their already massive holdings of U.S. Treasuries in the latest week, Federal Reserve data showed on Thursday.

The central bank said its overall holdings of Treasury and agency debt kept for overseas central banks rose by $6.832 billion to $1.347 trillion in the week ending Jan. 5.

...Custody holdings of Treasuries are up about $205 billion in the past year and in total account for over a quarter of all U.S. government debt in private hands. However, the pace of accumulation has slowed somewhat in recent months.

---(from url)---

That which internationally rankled in the 1960's, and given a public face by de Gaulle, surely still rankles today. Namely, the phenomenon of the "exorbitant privilege" to run "deficits without tears".

When changing carriages mid-route, it is necessarily best to keep the wheels on, at whatever cost, until the transition is successfully made. Only when the big picture is viewed through a political prism (with respect to the eurosystem architecture vs. Bretton Woods architecture) can reasonable sense be made of the seemingly frustrating maneuvers of the gold market.

It comes down to the buying to time. Time can be bought in many ways, and is ever cleverly done so -- the buying of time against an inevitable political stipulation: that gold is tangible whereas debt and credit are not; and further, that truly universal reserve assets require the credibility of tangibility which is not present in national sovereign pledges of delivery and bonds.

Position your portfolio today for that sociopolitical economic eventuality.


Buongiorno!confiscation#1279811/6/05; 15:49:22

@YGM, thanks for your encouragement on my haiku poetry--glad you got a few laughs. But, I wasn't a-laughin, a-while I was a-writin'--pilgrim! (But I'm a-smiling now!)

Gene@ Aristotle#1279821/6/05; 15:53:26

Please stop talking in riddles. Say it in plain, easy to understand English so a dumb cluck like me can get it. I want to understand what's going on.Thanks.
YGMAristotle....Where'd you go for that Coke?#1279831/6/05; 16:02:03

This is not news to me.....
Furthermore, people with uncommonly good sense, when they are buying Gold, do not, I repeat *NOT* turn to the New York Stock Exchange for their Gold.

I can show you as you're well aware "Private Sales" on Hundreds of Kilos of Gold, Dory Bars Refined to 99.5, Raw Gold to refine etc in the Tonnes....People don't believe it but it is true AND at present there is "NO" shortage of Physical Gold Bullion...Coins I don't know about...Not to say this couldn't change in a heartbeat....Gold is Gold is Gold if one refines it...I used to make my own Bars quite easily...Even Teddy Bear Molds w/ approx 3 oz p/Bear :-))
Some private sales obviously are scams but many take place in the Zurich Free Trade Zone under armed supervision...FWIW....YGM

Federal_ReservesTOWN> Actually the FED drained 10b in#1279841/6/05; 16:19:33

excess holiday repo's today.

Note the big decline in the repo balance.....

TownCrierFederal_Reserves,#1279851/6/05; 17:13:26

No, you're not being technically accurate when you say that.

Technically the Fed CAN actively drain through reverse-repos. That is what is implied in your wording, but that is not what occurred. You may want to exercise more care with respect to active RR draining versus the passive "maturity" draining that you are referring to on NET. You missed my post to you the previous day regarding this distinction?

The Fed's open market operations today indeed ADDED $14 billion, without which the NET effect of maturations of previous policy operations upon banking reserves would have been $14 billion less than it was.

Please be aware that it is NET balance of past and present Fed operations that YOU are referring to, whereas MY posts are focused upon each singular day's ACTIVE operations in which I try to emphasize the context of the rate of actual actions taken in light of FOMC policy. The emerging picture is invariably one of ease.

You may wish to score a hit upon me by saying that I should further be offering the context of NET repo operations plus maturities, but I happily leave that to others as I see no benefit in it, for, in case you did not know, the Fed's repo-based contribution to the overall reserve level is but a singlar fraction amid a larger sum. And unless one commits oneself to tracking the whole, there is little to be gained from the one part you have fixated on. Hence my attempt to bring forth the above-stated focus upon context discernable within the daily operations that I announce with a degree of regularity. I can cease even that if you insist, though I would but first ask to know the agenda behind your protest.


AristotleSorry for the delay#1279861/6/05; 18:03:25

I had a winter emergency to attend to.

Give me a moment to get this typed up.

Gold. Get you some. --- Ari

Noble1@ Ari#1279871/6/05; 19:56:15

The "'average' giants" have been in charge of the gold market for decades and we know what they have done. The "giant" gold holders are not on our side. The "raw population" is awakening to the notions that we have been discussing here for the past several years. The greater the education and participation from the "raws" the better for gold. It will take the rejection of fiat from the masses to elevate gold to it's rightful place.

As Hannibal Lector said " People(?) covet what they see". At this point, the "raw population" (people) doesn't prize having a few gold coins at home. They "see" a very liquid and familiar market in the NYSE. They "see" a way to participate in gold ownership, albeit through a custodian, in a manner in which they are accustomed. As long as the gold remains allocated and audited, that's great. As they take a position in gold, they will be more inclined to include a position in handheld physical or be willing to trade in it as they now will be more familiar with it's value. And for those that are unwilling or unable to establish a holding of physical, GLD will tie up physical for them.

Granted, physical gold in possesion provides much comfort. Consider that allocated gold in auditable storage may be the only alternative for many and it may be the next best thing.

GonlyoldGot Food and Water?#1279881/6/05; 20:56:18

I saw an interesting picture in the Cleveland Plain Dealer newspaper this last week end. It showed a group of Indian women with out stretched arms and worried looks on their faces. apparently they were trying to get food and water in the aftermath of the tsunami. One indian woman had a gold bracelet on her arm and two pairs of gold earings. Next to her was a woman with an out stretched arm which had a simple wood(?) plastic(?) bracelet on it. Couldn't help but note how disasters equalize things and that gold is not a life sustaining commodity. Gold is valuable for sure and everyone should have some, but like Black Blade keeps bringing up, got food and water? Perhaps we should worry more about confiscation of food and water. Time will tell.
GoldendomeFilling the Void!#1279891/6/05; 22:09:57

We seem to have some time to fill, as Sir Aristotle has yet to come forth from his study--and ascend the podium, in effort to futher enlighten we--the assembled masses--on Gold, one way or another.

In this interlude while waiting...and between "refreshments" on the web-site: I have begun reading Pete Peterson's recently released book, Running on Empty (How the Democratic and Republican Parties are Bankrupting our Future and What Americans Can Do about it.)
Released in year 2004. Peterson is a former cabinet secretary under Pres. Nixon; a former chairman of the Federal Reserve Bank of New York; and has many more diverse laurels hung on his walls.

To save the money that I might need for gold, I requested this book from my local library. They did not have it at the time, but decided that since there was interest in it, they went out and bought it. Now we all can read it--locally anyway.

Obviously, very contemporary in it's information. I find Peterson's writing style easy to follow, extremely to the point, witty, and filled with interesting quotes and observations. Though early on in the book, I will share a few below:

"With faith-driven catechisms that are largely impervious to analysis or evidence, and that seem removed from any kind of serious political morality, both political parties have formed an unholy alliance--an undeclared war on the future. An undeclared war, that is, on our children. From neither party do we hear anything about sacrificing today for a better tomorrow. In some ways, our most formidable challenge may be our leaders' baffling indifference to our fiscal metastasis. As former Treasury Secretary Larry Summers put it, "the only thing we have to fear is the lack of fear itself." ...

further on:

"I've only met George W. Bush twice, before he was President, and found him charming, friendly, and straightforward. He seemed to know I was concerned about the viability of our entitlement programs and asked what I thought about the issue. I told him entitlement reform was both a philosophical and moral issue. "What do you mean by that?' he asked. I told him that I thought the philosophical issue was whether a modern, media-driven democracy that only focuses on immediate crises could respond effectively to a very different kind of threat--a silent, slow-motion, long-term crisis like entitlements. He enthusiastically agreed that America could, and that reforming Social Security would be one of his highest priorities. I believed him at the time. He himself probably believed it.

He then asked what I meant about Social Security and other entitlements being a moral issue. I took him through the official numbers on the huge payroll taxes and the huge debt that we would be passing on to our children. I told him if looking out for our children's future was a definitive test of our morality, then long-term tax cuts, particularly for us fat cats in the room, should wait until entitlement reforms had been completed. He visibly stiffened, as though hit in the gut. "I don't think tax cuts are immoral." "Governor," I said, "I didn't say long-term tax cuts were immoral. I said they were immoral until we have taken care of our long-term obligations to our children."...

further on:

"Either way, Republican or Democratic, it's astonishing how we can congratulate ourselves on our own civic virtue when we give ourselves bigger presents and send bigger bills to our kids. In today's Washington, a "courageous" politician is one who takes money from the next generation and passes it out to friends; a "selfish" politician is one who does the reverse.

GonlyoldGot Water?#1279901/6/05; 22:14:03

Meant to include some excerpts from this article...

"If the new law is adopted, no additional water may be withdrawn from the Columbia River (or the virtually limitless areas deemed to be in hydraulic continuity with it) at all. Anyone who needs water must obtain it by extinguishing rights held by others...But, the long-term effects of the proposal go far beyond "rural cleansing."

For the enemies of Eastern Washington, it is not enough merely to cap water consumption, and thus, economic growth.

Thus, under the proposed legislation, the hapless farmer who does reach upstream to buy water rights suffers an immediate tax of 50 percent on those water rights "to benefit streamflows." "

Goldendome@ Gonlyold#1279911/6/05; 22:47:58

Interesting article you post. Someone mess to much with the water in Eastern Washington and someone may have a riot in the office! You recall a few years ago, shortly before Bushdom, that proposals were kited to breach (do away with) the four lower dams on the Snake River that empties into the Columbia River. Those dams are Lower Granite, Lower Monumental, Ice Harbor, and McNary. Well, one day there were a few thousand "mad as hell, I'm not taking it anymore" folks showed up at McNary--Washingtonians on one side Oregonians on the other, some were armed, all asserted any assault on those dams would be considered an attack on the citizens. Very quickly, the politicians in the area got the message--the issue disappeared.
These water issues on rivers are largley a Federally controlled issue; I doubt things go too far down this road before someone slaps them down.

If pressed though, this issue might be similar to the dam breaching issue. Eastern Washington has marginal rainfall--but, tremendous river resources, with the Snake and Columbia being the largest. Farming, transportation, and hydo-power, all depend on them. In Eastern Washington, the farmers support the local communities and the communities realize that without the farmers, many towns do not exist. It will be a battle royal if water restrictions are pursued. The legislature is nearly evenly split between the parties.

timbervisionBelgian#1279921/6/05; 23:52:39

Dear sir,
I just want you to know that when my time is limited I scan through the days postings looking specifically for yours and those of Aristotle's. I will continue to look forward to your insights and hope that you are not seriously considering a hiatus.

YGMAri...Winter Emergency....#1279931/7/05; 00:24:01

Hope it's nothing serious....Back tomorrow....YGM
KnallgoldYGM#1279941/7/05; 00:27:22

"the Zurich Free Trade Zone ",please can you fill me in what you mean?I have lived close to Zürich for a long time (but then,Basel is as close to Zürich for you Canadians and Americans etc.But don't tell the Baslers,they would get mad at you...)

On the ETF thing,one simple question:what would you buy if it cost the same:Goldcoins or ETF?

Topaz@ YGM.#1279951/7/05; 02:05:57

Gee Ken, I'd be thinking otherwise on the state of Bullion supply ...All the indicatons are that we're heading for the mother of all squeezes.
Who'd shop at Comex for Bullion for starters?
Franco/German/Italy no sells.
Swiss finish in March...
...AND as you mentioned, the Sur-real Gold inventory increase @ GLD.
OTOH, good 'ol Gordon couldn't wait to talk IMF Gold in the wake of the Tsunami.

We'll know soon enough as the Pro/Anti Gold factions are indeed becoming quite clearly defined even to this casual observer.

YGMKnallGold.....#1279961/7/05; 08:43:32

I would not even consider Paper Gold of any sort nor Gold Bullion held by others over Gold Coins and Bars/Wafers in your own care...I know some of the best deals and most secure transactions (from fiends) are held right here @ USA Gold...They've been in the Biz a very long time...

Zurich Duty Free Zone (never been there) from what I know of it is and area near the Airport I believe...I know this area is often used for International trade/tranactions in Diamonds and Gold...I guess you may complete transactions there w/out International duties/import/export/taxes?? Security I would imagine is better than Liberia, Ghana or many of the other places PM's etc come from...YGM

Clink!@YGM - your last message#1279971/7/05; 08:48:32

I trust that was a typo ! :>)

CoBra(too)@ Belgian#1279981/7/05; 08:54:15

Sir, it seems to me that you've read something into my thoughts which truly was not intended, neither by inflexion nor by interpretation. From your quote below, am I to understand being the culprit for your sabbatical. Anyway here is your response:
"In other words, dear are kindly advising me to seriously "moderate" my gold-passion (?) and leave the nice free gold theory, for what it is...and never will be.
Sure, that's a "wise" advise...and I will certainly re-consider it, thoroughly...again."

The only thing which bothers me still is that I'm still to dumb to figure out what "free gold" really means in the sense you and some here advocate.

It is I, who will need the sabbatical to figure it out, as up to now I have figured it the Swiss way - Portfolio Insurance and some more.

Take care all and have a great year - cb2

YGMTopaz.......#1279991/7/05; 09:00:43

I am sure in certain circles there is/are problems @ times getting physical, but one can purchase Bullion in a few places privately...Always find AU for sale in Indonesia and Philipenes, Ghana, Libya, South America and many other scary places to be doing biz....There is a metal page site that advertises for those wishing to sell Gold (Raw and Bullion) in large quantities..Obviouly I cannot in concience post it here but it does exist and there are many pages of such ads w/ contacts...Some appear scurrilous and others are willing to be transparent and secure (Fineness would be an issue to be assayed)...VERY large amounts are offered at times....One would have to do extreme DD before proceeding...Years ago I had the occasions to be approached by dubious money to sell them $100's of K's of Raw Gold in Yukon....Not unusual for a guy w/ brooklyn accent to show up w/ suitcase full of $$$ looking to buy all your Gold....I should add there are also many ads looking for AU Bullion as well...I believe when the squeeze starts these sources will dissapear over-nite....Hope this helps....YGM

PS: these sales are not for the small guy, (or the faint of heart) but for Bullion traders and are listed from 'Many' scary parts of the world (some in London tho)...Most Placer Gold producers (all over the world) have some connection to sell AU privately at some time or another...I'd rather deal w/USA Gold and have it come to my door:-)

YGMSir Clink...Yes I saw it right away...It was a typo not intended.....#1280001/7/05; 09:05:19

& had to smile as some friends ARE "Fiends" when it comes to the Yellow stuff :-))
YGMFor those of us who have trouble w/ Cryptic Talk of Gold & OIl etc..#1280011/7/05; 09:16:29

as I always had w/ Another and FOA etc, you must come back to one simple reality...Especially as we watch the last few weeks of the Golden Hammer driving AU down...It is all Paper Derivatives...100's of thousands of OZ's (MILLIONS would be more appropriate)...It "WILL" collapse at some point and all of Bill Murphys' and many others prediction's will come to pass...I believe w/ currency fears and all uncertainty and and corruption exposure we see these days that the 'DAY' (not days) of reckoning is not far off....YGM

"GO GATA" we will be vindicated and rewarded sooner than later....

CometoseTO BE a gold bug or NOT TO BE #1280021/7/05; 09:16:40

Rest assured ..........
There is a long term horizon and a
there is a short term horizon ...............
the last time that there was a change of World Reserve currency , it caused a lot of dislocations around the world .....
At that time Gold was tied to the dollar $35 per ounce..... Prior to taking over this Reseerve currency status, The pound was it ....but the pound sank and the dollar rose and there was a nasty depression in the middle of that move that started in England and spread here.
It seems that the reserve currency of the world is now in the process of changing again .......and there are going to be financial and economic dislocations .....again
Now the only currency on the face of the earth that is linked to the price of Gold is the EURO ...

All of the foregoing has imminent implications for the dollar ........and the Euro and the price of GOLD

During the last dislocation of Reserve Currency ,
although the price of gold was tied to the dollar , when all else wilted in the deflation of the 30's, the miners went up 10 fold plus dividends.....

My dear Surfer, there are 1.3 billion Chinese that are culturally and historically married to the idea that gold is money , and there are Several 100 million Muslilms globally that are of the same persuasion , and there are 1 billion Indians that have the same disposition toward Gold and Silver as a medium through which to save..........
The muslim world is on the threshold of launching silver and gold denominated currency; who will follow their lead ?
Argentina's Central Bank is buying Gold the dismay and in disregard of the IMF proscriptions.
Putin is increasing the Russian Gold reserves and speaking quite publicly about it ........
I would think with some reflection on these facts , and upon further analysis , one might be able to determine whether the greater risk is in having too much FIAT RISK INSURANSE or too little FIAT RISK INSURANCE....
Is it Riskier at this juncture in time to have gold exposure in your portfolio or to not have gold exposure in your portfolio???????

CaradocGood points from Comatose!#1280031/7/05; 10:05:40

At a much lower level, I'd add one thing: the traditional Islamic ratio between gold and silver

Snip (building to a magnificent understatement!!):
"The history of the gold dinar is traced to the second Caliph, Umar (632 AD), when a bimetallic standard was set of 1.43 silver dirhams for every 1 gold dinars. The oldest dated coins come from the third Caliph, Uthman (644 AD), who compiled the Koran as we know it today, but was murdered by rivals for rejecting the prophecies of Muhammad, and ultimately sowed the seeds for the subsequent split between Shiites and Sunnis. After 695 AD Caliph Abdalmalik, famous as Islam's "first" chess player, began a systematic expansion of the bimetallic standard throughout the then rapidly expanding Islamic empire.

According to the World Islamic Trading Organisation, the dinar is equivalent to 4.3 grams of gold at 916 fineness (22 carat), or 4.22 grams of four nines gold (0.14 troy ounces). The dirham is equal to 3 grams of Sterling silver (925 fineness), or 2.9 grams at four nines (0.09oz). Malaysia is expected to prefer a 1-ounce dinar to eliminate confusion about the precise value of the currency that is often quoted on commercial exchanges at 4.25 grams. If the silver dirhim is also introduced, there is likely to be an exceptional arbitrage market for bullion traders...."

The extent to which this belief will be translated into practice remains to be seen. To whatever extent it is to be implemented, I'd expect emphasis on the gold dinar and a delay (accumulation period) before coining the silver dirham


PS: The word "Caliph" approximates "deputy" or "stand-in" and comes from Sunni Islam. The opposing view of the Shia is to require the real thing: a descendant of the prophet. (Shia t'Ali = advocate of Ali). For more details:

TownCrier"The ABCs of Gold Investing" - - - Sound advice from a name you can trust#1280041/7/05; 10:10:04

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USAGOLD / Centennial Precious Metals, Inc.Familiar fluctuations - - - a brief walk down memory lane#1280051/7/05; 10:33:25

five year chart

The latest price performance is nothing we haven't already seen recently and on mulitple occasions. Shall the size of this one mimic the dip of April-May 2004, or shall it ressemble the deeper one of February-March 2003?

Depending on which points you pick to draw your lines, we are at or near the bottom of gold's rising channel.

Call Today, 1-800-869-5115 Extension 100, to establish a diversified portfolio or, according to your objectives, to grab opportunities where they reside.

TownCrierFed in open market#1280061/7/05; 10:55:11

The Federal Reserve's trading desk continues to make light of the FOMC's 2.25 rate target, today providing $5 billion in fresh funds via over-the-weekend repos, some of it as low as 2.12 percent.


GratefulForGoldGold/Euro "Connection"#1280071/7/05; 11:33:46

Good morning!

All along, as I've continued to read of "freegold" and the Euro's "unofficial"(?) backing of gold in that the Euro would allow a mark-to market of gold, I realize I have a basic question of this concept that remains unanswered.

Belgian and others have repeatedly spoken on this subject (and I have been happy to embrace the concept). However, I am left with only the thoughts expressed on these pages to explain the concept. Now, for my question: are there any links to "official"(or otherwise) EU documents/sites that would document the EU's intention to follow this path (of m-t-m of gold)? i.e., is there evidence of that intent located outside of this castle? If so, it would help me to have the additional information from other sources to balance my understanding. I believe I came into these discussions mid-stream and may have missed data of import. If there is no such data, then I can put that nagging question to rest.

Thank you in advance, dear knights and ladies, for any thoughts you may share.

Lady GFG

P.S. I add my voice to others' who have requested that Belgian kindly not take a hiatus now! Nor you, CobBra(too)! Renewal and regeneration through silence are necessary for all of us but please don't dally!

TownCrierG7 backs debt freeze for tsunami-hit nations#1280081/7/05; 11:35:35

LONDON (AFX) - Finance ministers from the Group of Seven industrialised nations have agreed to support the suspension of debt payments by countries affected by the tsunami disaster, the UK treasury announced today.

"We must ensure that those countries are not prevented from paying for essential reconstruction because they are having to fund the servicing of their debts," said British Chancellor of the Exchequer Gordon Brown.

"So, for afflicted countries that request it, the G7 is proposing an immediate suspension of debt repayments.

"And depending on the conclusions of the needs assessments, I believe that the G7 and Paris Club must also stand ready to consider all options for further assistance," he said in a statement.

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

Money -- contracts of credit and debt -- and the allowable default or depreciation thereof will always be society's tool to spread the focus of sharp pains around more evenly to acheive a duller yet wider ache. The good function of gold is to give you an insulated pocket of special savings that is safe from the spread of loss such that you may reliably count on the preservation of its undiminished ability to help yourself and to help others when and as you choose.


KnallgoldOn the trail,we need a:#1280091/7/05; 11:39:01

Reality check:

--1.The exchange rate: the $ lost already 65%(!) against the euro.Prognosis on the trail was about 80-90% (FOA's 30'000$Gold and 3000-6000euroGold implies this indirectly)

--2.The world reserve: the euro is for the first time #1 as bond currency,a crucial point for a world reserve aspirant.And so are important players (China,Russia,Europe,Fidel Castro...) switching to the euro:
"the $ is at the end of its timeline-the euro will take over!" was the prognosis from 1998 on,remember the ridicule and environment then?I think one can safely say now:the euro is "firmly on its feet"!

--3.Oil: OPEC (oil) didn't talk first,then denied and then discusses about switching to the euro-a central postulate was that "oil will be prized in euro":not a (officially) done deal yet obviously as it certainly will have a huge impact and needs a good timing.Nevertheless, some smaller oil nations did it already!

--4. Gold,(the more difficult part...):
"papergold will fail" and "FreeGold will come":If Freegold is defined as derivative-free Gold ,we are probably half-way there as the monsterLBMA volume shrank a hefty 50%(?)-giants silently leaving the show?

No nationalisations yet of Gold in the ground (oops,deep storage???).Some Goldmines have biten the dust/were sucked out or posted bad results-hedging is appearing now as something to better get rid off.Altough the rest of the Goldshares showed initial explosivness,frankly,they're just languishing since June2002. Incl. the juniors(!).Certainly not the "next dotcom mania beyond 320,350,400,433etc".

Oh,governements are still intervening (damned I'm still foaming when seeing all the manipulations!)-well,if you advocate nations to hold Gold this is not really a surprise,or is it?

Freegold means not free of gov. "interventions":its more about taking proper action and working for its interest (and not against its own Gold!):
m-t-m;"selling (buying???)when the price is right";a WAG2 with selling instead of the usual 100's-1000's of tonnes-just a few tonnes to mint nice coins (you just can't more de-leverage);an Axel Weber comes to mind;and so on.

Back to the trail:in the charts,every child can see now that the lows are behind us and the Goldbull has started.Oops,30'000 was the forecast-well,even that is some sort of failure of the paperGoldmarket,1000-2000 would be more realistic actually.

Oh,and there was Another prognosis,(the most prominentone ) about the coming "new physical-only Goldmarket".But that was supposed to come at the end of the hike,right Ari?(like the ice-cold beer...)

Lots of difficult ground for us exhausted hikers,many distractions (ETF...) laying on the sides-but the last quarter of a hike tends to be the most devastating!Hold on my fellow hikers!

TownCrierGFG, Europe's mark-to-market#1280101/7/05; 12:38:12

I'm not sure I'm entirely clear on your position, but it appears that you are looking for evidence that Europe has an intention for some future day to begin pursuing a mark-to-market regime for reserves.

Rest assured that day arrived with the EMU's euro on January 1, 1999.

Gold reserves held at that time by the Eurosystem we're valued at EUR 99.6 billion on a mark-to-market basis upon the London fix, and climbed over the next two years as the net effect of rising M-T-M gold price outpaced Washington Agreement liquidations, bringing the value of slightly ligher gold reserves up to EUR 117.1 billion at the close of year 2000.

After Greece joined the EMU January 2001, physical gold reserves climbed from EUR 117.1 billion to EUR 118.6 billion, calculated at a M-T-M price basis of 293.01 euro per ounce.

Today, four years later, there has been additional lightening of gold reserves through Washington Agreement liquidations, however, its effect has been more than offset by the increase in gold's price during that time as gold is now carried on the Eurosystem books at 321.56 euro per ounce. (Revaluations are done quarterly. Switzerland is doing likewise.)

The net result is that Eurosystem gold reserves, though slightly lighter than four years ago, are valued higher in total, now at EUR 125.7 billion.

MEANWHILE, since that time when Greece became the latest addtion to the monetary union, the Eurosystem's net postion in foreign currency has been dumped like so much garbage. January 2001 foreign currency holdings valued at EUR 261.4 billion have been slashed to the net position today at just EUR 152.3 billion.

On a net transactional plus mark-to-market basis, the Eurosystem paper reserve position is shedding while the gold position is holding court.

So as you can see, the M-T-M intent is not only present in Euroland, it is already in practice. And to help you see further down Belgian's road, you must understand that the fully-realized essence of freegold goes beyond merely marking to market based on the London fix as it is done today. It looks to a fundamental corrective in the gold market itself, thus anticipating a future day when the per ounce price of gold is based upon the value of an ounce of yellow metal on a physical market rather than being assigned by riskier, performance-discounted non-gold instruments networking within a market of financial derivatives.

I hope this helps. I have been reporting these events at each step of the way, and this was as good a time as any for a comprehensive update. Thanks for the inquiry.


TownCrierMK's 'Gold Forecast 2005'#1280111/7/05; 12:46:11

Michael Kosares, author of the hot-selling book, "The ABCs of Gold Investing - How to Protect and Build Your Wealth with Gold", has made immediately available to all USAGOLD visitors his important first Client Letter of the new year in which he puts forth his forecast for gold in 2005. See URL above, and then follow the internal link to the forecast page.

To enjoy access to MK's weekly Client Letters, request a free info packet from USAGOLD-Centennial and you will be provided with several additional Letters for an interim period. Of course, all clients of USAGOLD-Centennial Precious Metals will receive all updates on a continuing basis as one of the several added benefits of doing business with this firm.

Choose gold, and choose the company you can rely on -- not just through the moment of order fulfillment, but for ongoing insight and support through the life of your investment. Choose USAGOLD.


TownCrierSnow says backs strong U.S. dollar, no policy change#1280121/7/05; 13:37:12

WASHINGTON, Jan 7 (Reuters) - ...."I have said on countless occasions, we support a strong dollar, we think a strong dollar is good for America. It's our policy, it has been our policy and will be our policy," Snow said in response to questions on Bloomberg television.

As Snow spoke, the dollar was rallying against the euro. Neither in the Bloomberg interview nor in an earlier one on CNBC television did Snow say markets should determine the value of currencies, as he has in the past when stating U.S. currency policy, stirring speculation among traders that he was aiming to give the dollar's value a verbal boost.

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

Governments, as we know, pull strings to the full extent possible. While it prevails, use the dollar's strength to your advantage and exchange it for items and hard assets of enduring use and value. Among them, choose gold to maintain a monetary level of functional liquidity without carrying the typical monetary risks.


Belgian@cb2#1280131/7/05; 13:39:33

I've lost the post, that I adressed to you. About my sabbatical,... freegold... and gold distancing itself from being credit fiat (money).
Let me simply repeat the last sentence of it : I'm definitely sure that you and many others overhere, will certainly and unmistakingly, recognize (understand) freegold...WHEN YOU SEE IT ! Right Sir ?

I'll stop fixating (pulling the attention) on the unimportant parts of the daily gold-watching/reporting. I wish to concentrate on facts/events, that I consider to indicate that gold is on its way to freegold.

@ Lady GFG : In my lost (nat last) post to cb2, I was answering your question. No, you will NOT find any other publication on freegold/un-money gold/mtm, anywhere... but here at CPM exclusively. Extra-ordinary, no !?
It must give you an idea about the utmost extravagancy (delicacy) of the "new" concept. Consider this as a positive !

In order to be able to follow the gold-trail, one must "recognize" the hidden giant's "steps" !!! And why don't we see those "giant" footprints...? Because we are blinded (impregnated) by the "caustic" papergold...and paper culture. Very difficult to realise that this paper deluge is in fact a huge avalanche formation.

Do you remember how many times I've been remarking that "nobody", outside of this unique forum, ever commented "seriously" (thoroughly) on the "contents" of A/FOA's thoughts ... history...etc !? Nobody ever reflected on this kind of remarks. No wonder, one does not "see" the giant footsteps that already have been printed.

Freegold has no official, public advocates...for the time being !!! OFFICIAL...PUBLIC ! This in sharp contrast with the masses that permanently advocate on the dollar...Snow, tonight !

I do understand the sharp scepticism...extreme caution...on the idea (probability) of freegold. Not in the least because of it being suggested as to be given birth as, "euro"-freegold. How can one even think about freegold, when one is convinced that freegold already exists !?
How can you expect the publication of goldplans, without admitting at the same time that...the permanently stand ready to intervene (sales commitments) in the goldmarket...when the price of gold should rise. Right Alan ?

In this world, there are not only trainloads of unrecognized blatant lies...there are also a lot of well hidden "secrets".

Don't wait or expect the media (web included) to show you the "formation" of the giant footsteps (gold-trail)...served on a plate, ready for consumption ! Many ordinary folks and sophisticated (?) ones, as well, do rely on permanent guidance (lockstep march) and are therefor an easy prey for mis-guidance (delusion).

As a finalizer : Watch Snow's hard-dollar talk and wait for Trichet's reaction, next week (Basel on monday-next on thursday). Watch the $-€ IRs differences evolving. Try to connect this with far away freegold.


Gandalf the WhiteChart of the US$ "SNOWjob" !!!!#1280141/7/05; 14:03:12

This may well be the TOP of the pump game !

TopazWhew! ..I thought we'd lost him (Bel) there for a minute.#1280151/7/05; 14:11:32

The WORST thing anyone can do is pay even the slightest attention to "monday-morning-quarterbacking" reports etc. where money/finance/gold is concerned.
ANYTHING can be rationalised in hindsight.

Oil/Dollar looks hip-joined here. Next week should see the disconnect imo.

USAGOLD Daily Market ReportPage Update!#1280161/7/05; 14:13:48">
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.

Friday market excerpts

Gold futures fell Friday to log a one-week loss of more than 4 percent with metals traders' assessment of the U.S. Labor Department's December payrolls leaning toward the likelihood of near-term gains for the dollar.

Against this backdrop, Comex February gold closed at $419.50, down $2.10 for the session, its lowest levels since mid-October. For the week, the contract dropped $18.90, or 4.3 percent.

In all, the U.S. economy added 2.2 million workers in 2004, but of those, fully 76,000 jobs were actually involved in manufacturing, said Ned Schmidt, editor of the Value View Gold Report.

"The remaining 2.1-plus million are shuffling papers, playing on the Internet or involved in the housing bubble," he said, pointing out that this "type of meaningless job creation does not support a world-class currency."

So the "beginning-of-year relief rally for [the] dollar is nearing completion," he concluded.

Given that, "gold and silver investors should be aggressive buyers next week at these prices," he said.

Peter Grandich, editor of The Grandich Letter, also provided an upbeat outlook for gold prices. "Since bottoming in 2001, gold has moved up in stages that have been interrupted by short, but sharp, corrections," he said. "These corrections wipe out much of the excessive optimism seen at each peak."

Overall, "the factors that have sustained this bull run in gold have not changed," Grandich said. "That bodes well for those of us who believe $500 gold is not a question of if, but when."

----(see url for full news, 24-hr international economic newswire)---

R PowellBelgian...#1280171/7/05; 17:02:08

Thank you Townie for finally giving me a definition of "freegold" that i can somewhat understand. In 128010 you stated....

"It looks to a fundamental corrective in the gold market itself, thus anticipating a future day when the per ounce price of gold is based upon the value of an ounce of yellow metal on a physical market rather than being assigned by riskier, performance-discounted non-gold instruments networking within a market of financial derivatives."

Now, I need to ask this what you mean??
Do you agree with the Crier's definition.???
Happy weekend to all ..!

CoBra(too)My last Free Gold ...#1280181/7/05; 18:22:55

It may be well my last post here, as I even disagree to the really well stated explanation of free gold to GFG by Randy, or better TC; I, personally don't buy the mark to market philosphy for EU's €, as it is in their best interest to keep up the pretense of a functioning monetary system as long as possible. Same as Japan, China and most of the rest of world is pretending that everything is well.

... Alas, the system is defunct.

Even Pimco has had an essay about a reverse Marshall Plan to aid the Dollar recently - as the fallout from a defunct monetary system will affect all much more than todays overall, as well as personal gold holdings may be able to consolidate or contemplate.

In essence, gold will be the ultimate savior of your personal wealth - in the long run and god beware even in the short run truly free gold will wreak havoc to the world we've known. ... reminding me of the US death wish to have the Chinese float their Yuan.

Well, I'll probably won't be around when this wish becomes reality -(the Chinese even have a better proverb) - though, who knows.

Lastly, I do want to thank MK and his crew to have aided me over the years in my quest to acquire reality, both in bullion form and more so in education. It has been a very profitable task in much more than urbane profits.

Thanks and take care my friends - may all your hopes come true - cb2

MKPosting#1280191/7/05; 18:46:35

I would hope that no one here would stop posting because they believe one opinion or another to be predominant. Predominance of any one opinion is not my intention nor the intention of this firm. The path to understanding or knowledge is not one that adheres to any particular viewpoint but one that accepts any viewpoint as worthy of open-minded consideration.

Not everything has to be settled on a day to day basis. We do not declare winners here. And we do not declare losers --unless YGM would like to take on the responsibility referreeing an arm wrestling contest. Let's face it, as the long as the rules are maintained, the biggest loser when anyone quits the forum is USAGOLD-Centennial Precious Metals.

There's the old story about the two professors who disagreed vehemently on a subject of mutual concern to the point of disliking each other, until another professor -- perhaps wiser than the other two -- came along and asked them to define their terms. Both did so amidst an audience of their peers. After the definition phase, the two realized that they agreed upon much and disagreed on little. So they linked arms and all went out for a round of beers. . . . . . .Could we perhaps be in the same situation here??

TownCrierAsking CoBra(too) for a little help to understand this statement:#1280201/7/05; 18:56:24

"I, personally don't buy the mark to market philosphy for EU's €, as it is in their best interest to keep up the pretense of a functioning monetary system as long as possible."

I will have to start with an assumption, and that is that you probably will generally agree with standard banking rules that normally require a healthy bank to write down their non-performing loans -- effectively marking those assets to their market value of zero.

Why, then, would the ECB's quarterly M-T-M philosophy be disagreeable to you when it is essentially performing a related act of accounting, that is, writing down the bad assets and writing up the good ones?

Are you suggesting that the national banking books ought to be maintained on a pretense as if all assets were of unfailing quality, and further that the assets were each worth whatsoever the central banks claimed them to be worth, that is, without regard to the public market's opinion?

I hope you will be willing to express how you feel asset adjustments to be a bad form of banking at the roots of the monetary system.

By contrast, the U.S. system holds gold as if it were worth only $42 per ounce. Is that a better pretense for a monetary system?

I guess I really don't quite understand the basis of your objection.


YGMMK..thanks but no refereeing...#1280211/7/05; 19:18:47

What's goin on..Frustration @ POG maybe...CB2, Belgian, Aristotle.....If they weren't here my education would be cut off in the prime of my life (well maybe a wee bit past prime) but this is all sillyness.....Cripes people put up my ignorance for years. and steered me w/ in new directions for answers....(Thanks TC you're in the mix too) We all should be able to put up w/ 'differing' views by folks with "Obvious" intellect or insights....FWIW....Back to my table in the corner of the hall....Hobbit, another Hot Toddy and page 147 of Another's posts please....The end of the Trail is getting clearer & closer....YGM
TownCrierRelated item#1280221/7/05; 19:20:49

A look around reminds us that some regional banking systems are less dutiful that others in writing down their non-performing loans (bad assets). If, however, banks were held more firmly to that accounting standard, the price of gold would be higher today because central banks would necessarily emit additional volumes of currency to be lent to the banks as a nominal balm for their hemorrhaged reserves.

The pretense that non-performing loans are still viable assets on the balance sheet goes a long way toward rationalizing and supporting the pretense that gold reserves can be maintained on central banks' list of reserves at lower values than should otherwise be their due.


YGMThat w/ ... was in front of 'my ignorance' .....SEE#1280231/7/05; 19:22:22

what I mean...can't even type right...How'd I ever get this far?
R PowellOn the subject of leaving...#1280241/7/05; 20:05:24

I'm going to state my opinion, fully aware (grin) that not all will agree,.... that posters deciding to leave our discussions because they think that they perceive that their particular view on some segment of the gold market is NOT congruent with a percieved forum consensus on the nuts!

Of course there are and will be different opinions. If not, what could we possibly learn? When did this notion of self-imposed banishment or retirement into lurking statis come into vogue? I have lamented the loss of many good minds from our midst, mostly gone by way of forum rule infractions...usually incured during the heated discussions. I'm not suggesting that these limitations are not necessary but I wonder if all passion has departed till we've reached the point of seeing people depart with a sheepish apology for not agreeing with the party line..? Again, NUTS! He$$, if this keeps up, I'll be the only trouble-maker left!

I've certainly had my share of disagreements, especially with the "all paper will burn" foolishness and with the "derivative-hatred" non-sensical agreements of total government market control...i.e. "the cabal". I also find this paranoia somewhat hard to swallow basically as I don't think that these important powerful entities (those being targeted as those doing the manipulating) still regard gold highly enough to spend the time and effort implied in such an undertaking. Those who do so regard gold are probably still buying...quietly and not bragging about it. Silver too!

Now, how's that for non forum consensus thoughts? Yet, these are just opinions, subject to change. I value what I learn here and hope I can contribute at least some thought provoking ideas if not some real facts...and opinions, of course. I'm an old pragmatic, derivative, paper-trading concrete finisher and, no, I'm not going to leave just because my views don't exactly coincide with the majority, past, present or future.

So buck up CoBra, Belgian, and anyone else out there who might be afraid to speak up for fear of not "preaching to the choir". Let's pool our efforts and try to learn a thing or two, here. Speaking politely, is nice and some facts, numbers, history, references, etc. help, and common sense is always appreciated and......
and happy weekend..!

Black BladeA golden wall of worry #1280251/7/05; 20:15:37


ANNANDALE, Va. (CBS.MW) -- Gold bullion's plunge over the past month is likely to be a mere correction within the confines of a long-term bull market. That at least is the conclusion of contrarian analysis, in light of how quickly most gold timing newsletters have jumped on the bearish bandwagon. More typical of a market top is stubborn bullishness, and what we've seen in recent weeks is anything but.

Over the past month, the gold market exposure of the average gold timing newsletter has dropped by more than 100 percentage points. That's more than just an orderly retreat. That's a veritable rush to the exits. On the contrarian theory that markets like to climb a wall of worry, this is good news.

In late 1997 gold was more than 15 years into a severe bear market. Despair was an entirely understandable reaction to where the market stood. Today, in contrast, bullion is higher than it at any time in years, but for a few trading sessions at the end of last year. And yet the average gold timer appears to be as dejected as he was near the depths of a punishing long-term bear market.

Black Blade: As Alfred E. Newman would say: "What, me worry?". Actually we are not in bad shape at all. I said before that the market is quite thin right now making it ripe for a few "weak hands" to effect huge price swings. At year-end hedge funds were locking in profits while others delayed profit-taking till after the New Year to shaft the taxman for a few months. I would expect to see more stability next week as trading conditions return to what could be seen as "normal". Could be fun but still, it may be another buying opportunity as the fundamentals for Gold are positive and the US Dollar faces pressure from a double whammy - soaring Current Account and Budget Deficits.

Black Blade@ Rich - "Food Fight"?#1280261/7/05; 20:20:58

heck, I am always getting into trouble. I am usually sent off to a neutral corner for a "time out" (sneaking a Negra Modelo with me of course). A nice little "food fight" within reason does get the mind into over-drive though. ;-)

- Black Blade

R PowellCoBra...#1280271/7/05; 20:25:17

I'm not sure if Belgian will agree with TownCrier's definition of "freegold" but Townie usually understands what others are trying to convey. I had thought Belgian was somehow saying that freegold would not be appraised or priced in currency units at all. I couldn't comprehend this.

Anyway, if Randy's definition is correct, then I now also understand why you opine that gold will never be so free as gold has been and probably will continue to be a politcial metal. Fwiw, I agree.

Further, I wonder how gold or any item can be so removed from the economic system, short of deification. What I do believe might happen, is the underlying economic forces now driving the POG up and down have the potential to create more demand, both for physical and paper gold, and this may then become a force unto itself (supply/demand deficit)....leading to some real fireworks in prices. If this were to happen, gold would be the likely target of an investment mania. This would probably be both a paper and physical gold acquiring freezy....? If I'm anywhere near prophetic here, we'll really have some fun! Note, most of this could transpire without any total economic Armeggeden...or maybe that will be the mania trigger? Any thoughts? You can vehemently disagree without fear of my disappearance, even though that might make some happy!

Black BladeGold logs loss of almost $19 an ounce#1280281/7/05; 20:33:52{0173129E-3B65-41BB-931E-7D66F72209C8}


SAN FRANCISCO (CBS.MW) -- Gold futures fell Friday to log a one-week loss of more than 4 percent with metals traders' assessment of the U.S. Labor Department's December payrolls leaning toward the likelihood of near-term gains for the dollar. "The gold/dollar correlation continues," said Amaury Conti, equity trader at Austin Calvert-Flavin, an investment adviser in San Antonio, Texas.

In all, the U.S. economy added 2.2 million workers in 2004, but of those, fully 76,000 jobs were actually involved in manufacturing, said Ned Schmidt, editor of the Value View Gold Report. "The remaining 2.1-plus million are shuffling papers, playing on the Internet or involved in the housing bubble," he said, pointing out that this "type of meaningless job creation does not support a world-class currency." So the "beginning-of-year relief rally for [the] dollar is nearing completion," he concluded. Given that, "gold and silver investors should be aggressive buyers next week at these prices," he said.

Peter Grandich, editor of The Grandich Letter, also provided an upbeat outlook for gold prices. "Since bottoming in 2001, gold has moved up in stages that have been interrupted by short, but sharp, corrections," he said. "These corrections wipe out much of the excessive optimism seen at each peak." So the latest correction "from the December giddy highs appears to have once again set the stage for the resumption to higher levels" in gold prices, he said. Prices traded at 16-year highs near $460 in early December. Overall, "the factors that have sustained this bull run in gold have not changed," Grandich said. "That bodes well for those of us who believe $500 gold is not a question of if, but when."

Black Blade: Similar to what I was thinking. There are many unknowns as well including the usual suspects such as continuing global terrorism, continuing war, competitive currency devaluation (aka "currency war"), etc. The game is still afoot.

WaveriderPart 1: Why the emperor has no clothes#1280291/7/05; 20:36:49

"Uncle Sam has reneged and defaulted on up to 40% of its trillion-dollar foreign debt, and nobody has said a word except for a line in The Economist. In plain English that means Uncle Sam runs a worldwide confidence racket with his self-made dollar based on the confidence that he has elicited and received from others around the world, and he is a also a deadbeat in that he does not honor and return the money he has received."

Waverider: A good read from the AsianTimes - PartII to follow. Black Blade - nice to see you back - hope and trust you're well and not working too hard!

WaveriderPART 2: The center of the doughnut#1280301/7/05; 20:38:49

"All Ponzi schemes build a financial pyramid. Many who pay into them also live in a financial world themselves, but others need to derive their in-payment through earnings from production in the real world. In today's world of financial transactions that every day are a hundredfold more than all payments for real goods and services put together, the financial ones put the real ones into the shadow behind their brilliance...."
R PowellBB // Food fight#1280311/7/05; 20:53:30

Within the general guidelines, of course, but perhaps just what the doctor ordered. I guess I was lamenting the lack of spirit usually associated with a good food fight. What can we disagree about Sir Blade..? We usually think alike, no?

I know that some analysts and newsletter writers sometimes monitor our discussions to watch for POG indicators. I don't remember if it was Adam Hamilton (I believe it was he) who equated food fights and disgruntled posters on the gold forums with gold price lows. Obviously, when everyone is cheering and congratulating one another, that's the time to sell. This refers, to paper assets, of course, not the real, heavy stuff.

With such a lead in, I might as well throw in a plug, here. Bull markets often tend to climb slowly over some time (wall of worry type stuff)...with sharp quick downdraws, (to shake out some weak buyers) like the one we've just seen. I say "seen" (past tense) as I don't believe (strictly an opinion) that this will be a long, drawout and numerically much lower retraction (it's bled far enough, maybe 410 area?) Just my opinion but also, maybe, a wonderful time to acquire some gold...paper and physical. CPM is a first class place to get that physical.

Black Blade@ Rich, Waverider and CB2#1280321/7/05; 21:33:41

Rich - I hear that a good many timers look for some contrarian indicator and I guess the sentiment on "investment" forums would certainly qualify. I am not all that concerned myself as a good steady PM purchase program would be akin to "dollar cost averaging" anyway. Cheers!

Waverider - Hi there! I am still working in the field but the subzero temps have had my drillers mutiny on me. We did get some work done today but now I will have to work the weekends to beat out the winter weather and get done on time (actually we are now behind schedule). ;-)

CB2 - Hope you don't bail. I have always enjoyed reading your posts and getting another EU perspective.

- Black Blade

TownCrierRich, on the practical topic of gold's political deification...#1280331/7/05; 21:45:51

Athough you've expressed doubts that this political metal can ever be removed from the "system" rife with bankeresque manipulation, we've actually been watching it occur in phases over the decades.

Gold was severed from the U.S. domestic system of fixed dollar/gold convertibility of $20.67/oz in April 1933. However, the "freedom" from the domestic banking ties came at the high price of confiscation from domestic holders, and prohibitions upon gold transactions and exports.

In January 1934 domestic prohibitions remained, but gold was allowed to flow again for international transactions at the higher fixed convertibility of $35/oz.

The banking system inflated the dollar supply to and beyond the available gold cover, and after attempting to hold the $35/oz convertibility price line through the London Pool, it was finally abandoned in March 1968, allowing a two-tier valuation system of fixed prices among existing reserves for central banks but allowing floating prices for private sector gold markets.

Unable to hold the $35/oz convertibility against mounting gold demand upon inflation of the dollar supply, in August 1971 the U.S. suspended international convertibility. The price remained officially fixed, however gold was no longer delivered in exchange for dollars as promised under the 1944 Bretton Woods agreements.

In May 1972 the U.S. officially devalued the dollar to $38/oz.

In 1973 a further devalution/revaluation of the dollar/gold relationship took the ratio to $42.22/oz, and the two tier market limitations for central banks was abandoned.

In January 1975 it once again was made lawful for American citizens to buy and own gold from the open market.

In April 1978 the IMF's Second Articles of Agreement took effect, severing international currencies from gold and thus setting the stage for gold to float freely to find its own market level. U.S. Treasury-owned reserves, however, were maintained by Congress at just $42.22/oz.

By January 1999 the new eruo currency regime was launched upon reserves that were 85% pledged (paper) assets and 15% gold, the book values of which would be quarterly revalued based on market valuations.

By September 1999 fifteen European banks pledged not to expand levels of gold leasing operations and their use of gold derivatives such as futures and options.

Thus is the political "free gold deification" writing clearly on the wall.

All that awaits is legislative codification of the economic reality of "sovereign default privilege" that there is no court capable of enforcing international delivery against international obligations or promises. Emerging from that premise is the heightened role and value of physical gold now held in international central banking reserves, and reliance on a new market phenomenon to be known as the SPOT gold market based on any given market center's available quantities of gold on the barrelhead against the cash of customers competing for it.


OvSDear Belgian and Austrian Too.#1280341/7/05; 22:24:00

May I convey my midnight thoughts to you two.
Free gold can be achieved.
Keep some gold for industrial, etc. uses.
All other gold must be converted into
jewelry, and let every woman on earth have
such gold (and silver) jewelry. Guarranteed,
NO SANE PERSON would try to confiscate such
metals nor dilly-dally with these metals and
arouse the fury of wives, daughters or mothers.
Checkmate, pal. VIVLA FREE GOLD.

PS: The uptrending channels on the 5 year and
10 year charts seem to be still intact. OvS

OvSI meant to say:#1280351/7/05; 22:33:23

the 5 yr. uptrending channel and the
10 yr. cup and handle formation are
still intact.

AristotleGold ETF: purveying persuasions upon price perception to preempt the paramount of Property#1280361/7/05; 22:48:58

This business really couldn't be much plainer if only you're willing to see it for what it is rather than what others would have you think it is. Firstly it's important to completely understand that *real* Gold buyers don't go Metal shopping on the NYSE. They don't. Period.

Take a quick and easy case study -- let's choose me.

When I want jingling Gold to fill up the corners of my personal treasury I don't get it from the NYSE. Not even if I wanted to could I get it from there. Nobody can. So what's to be done about it? Call up a pro like Mike Kosares and leave it to him to track some down. He'll broker the ends of my deal here, there, and probably somewheres in places I've never even heard of, but one thing I'm equally sure of -- he ain't gettin' any of it from the NYSE. Again, "nobody" can.

The same can be said for all the Middle-easterners, Indians, and South Asian "giants" (intellectual giants) that all want the kind of Gold they can wrap their fingers around. They ain't wasting their time trying to squeeze any outta the NYSE. That much *must* be understood first and foremost.

That's the stark reality that makes the NYSE's Gold ETF an interesting little critter -- a creepy little financial bastard that only its LBMA mother-figure could love. The only ones in the world buying it are a relatively small rabble of nitwits, halfwits, and dimwits, plus their sufficiently indifferent fund managers who rarely miss an opportunity to look brainless yet fashionably trendy.

Let's get right to it. Because "giant" Gold investors have uncommonly good sense and will have no part of it, the particular (or should I rather say *peculiar*) supply of Gold offered in the form of Gold Shares of the GLD ETF is very *very* VERY easily put into oversupply right there in the closed petri dish of NYSE trading participants.

Willful sellers of this garbage can overwhelm the half-witted half-hearted buyers through dual avenues of ho-hum short sales of Shares and... brace yourself... through the creation of additional baskets of shares for issuance when demand is present AND MOST EFFECTIVELY DEPRESSIVE WHEN IT IS NOT!!

The ETF's Gold Share creation mechanism allows for so-called "baskets" of 100,000 new Shares to be floated for each 10,000 Ounces allocated to the ETF account.

And price performance being what it's been lately, today included, would you be surprised to learn they floated ANOTHER 10.88 tonnes worth of additional shares (3.5 million) for the few half-Noble half-witted NYSE Gold shoppers to choke on today? Put a nail in the week's coffin and give a drowning man a drink of water!

To take a larger view, if you've been watching the boards, you'll remember that the Gold price started to come down aggressively after December 28. Between then and now, those Oh so clever ETF managers correspondingly thought it prudential to float 31.37 tonnes worth of new baskets (10 million shares) among the NYSE's pseudoGold-minded half-wits.

The price performance makes perfect sense when you see it laid bare as too many shares foisted upon too few buyers in a specially orchestrated environment set up to act as it were a proxy for an actual Physical market. Bogus. Double bogus. Because "giants" and others who want Gold don't shop for Gold on the NYSE!! And you wanna know something else? They don't shop for it on the COMEX, either!

This ETF business is only counter-intuitive when you wrongly fixate on the growing size of the Gold allocation like the ETF's managing mother wants you to do -- to get you lost among smoke and mirrors, to wrongly assume it represents Gold that's coming out of the theoretical (and as yet non-existent) Physical market and all the while completely failing to press a corresponding effect upon its physical price. It isn't!!

Because it doesn't have to!!

Bullion banks work their banking magic in the traditional, old fashioned way of efficiently reallocating deposits to get liquidity whenever and wherever it's needed to keep smooth confidence among the players in their game. It's really no big deal for them to borrow Gold out of unallocated deposits and assign it into allocated accounts, including that of the ETF in this case. I explained all that already in a Christmas Eve (eve?) gift meant to give everyone something to think about as you relaxed over the holidays roasting chestnuts on an open fire.

The reason for all the bother of orchestration hinges on the issue that there isn't effectively a functioning large-scale non-banking physical-based Gold clearing market acting anywhere to provide the world with a Price-Of-Gold benchmark based on a physically objective mechanism of price discovery and untainted by the bankers' orchestrations of perception to the very ends of the margins of credibility.

The lack of the objective physical market leaves all of us would-be physical buyers or our delegated brokers to cast about hither and yon for a clue or insight into the legitimate price of physical Gold. Until now they've captively turned to the physically irrelevant LMBA's price fixes and offerings at the margins of unallocated musical chairs; they've captively turned to physically irrelevant futures markets like COMEX; and now most recently they and the clueless COMEX players are bidden to tune into the high profile NYSE's carefully orchestrated but physically irrelevant Gold ETF as a the world's newest spot POG indicator.

Repetition to drive the two points home.

One: Real Gold buyers don't want the paper Shares, making that market vulnerable to price-depressive manipulation by oversupply of Shares amid limited demand.

Two: When the managers, with vested bullion banking interests, flood out the relatively few dimwits with excessive baskets of Shares to depress this new-fangled "spot" proxy, the Gold that's allocated into the ETF account to do that can be borrowed for a song out of unallocated LBMA deposit pools without putting an iota of strain upon the world's thin circulating physical stock of investment Gold. As the ETF share price falls in oversupply, the leveraged COMEX punters take note and run for the door, too. It's almost a grand comedy, but it's actually a grand scheme to buy time for the old Bretton Woods system and its LBMA cronies.

Short of exhausting the unallocated pools or inciting a run, this will probably run its course until a political solution is brought to bear. I'll give you one guess from which front that will come.

Now you can load up with the confidence that comes with understanding.

Gold. Get you some. --- Aristotle

Caradoc"The end of cheap oil"#1280371/7/05; 22:49:44

Believe it or not, you may want to read the March issue of "Hustler Magazine" (available 8 Feb) since it will include an article titled "Running on Empty: Imminent Demise of the Oil Age."

Probably won't include much that's not already in USAGOLD archives from our essay contest of some months ago.


Noble1@ Ari#1280381/7/05; 23:16:48

As always, your wisdom and insight into this market astounds me. Great post--short of the name calling.
Liberty HeadWhat's Happening Now#1280391/7/05; 23:46:06

Here is a great article on Greenspan's creation by Gary North.

He explains things in a linear, logical and understandable fashion. No mumbo jumbo here.

There is a section on:

Best Wishes

NedGreat posts today...after the bell....come out swinging!#1280401/8/05; 00:50:37

Gotta love it !

Belgium growling because some of us cement-heads STILL don't get the Freegold thing.

Ari moaning and groaning because the 'ETF's' are not the "REAL-THING" ! (moaning about the ETF buying gold and POG dropping whilst a month ago the groaning about the ETF selling gold and the POG dropping..??)

I just watched in complete amusement how the local-yocal 'commodities guru' on the latest and greatest "business" channel explained how the 'froth' is coming off the raging out-of-control commodities bull. And guess what........he's RIGHT!!!!

These traders and hedge-funds, currency/FX self-proclaimed heros and all these day-trader/momentum fly-by-night amateurs are again running, yes literally running from one side of the ship to the other and doing the proverbial "rocking the boat". It's hysterical !!!!

So while WE, the real experts called the "dollar bear" years ago, these clowns are just getting to it now! We called the under-valued commodities business at least 2 years ago, probably longer and they are 'piling on' in the last year.

While WE collect our 'profits', we watch this chase and run, Abbott & Costello routine with great delight. Better than the 'Comedy Channel'!

Thank goodness for the Ari's and the Belgium's and the Townie's, BB's, Gandalf's, and etc., etc. You guys call it right every time..........thanks!! So stop your crying okay?

Saw a post the other day at another forum. Apparently, because of the S.E. Asia disaster, huge gobs of dollars are being demanded for emergency measures and gold is being sold to raise this cash. There's also this little issue that during the Christmas to New Year's week the fiat monster (aka US$) bounced off 1991/1995 CRITICAL support of (USDX) 80.6 three consecutive days in a row. It really was almost the death of the dollar, perhaps it was a little 'oversold', perhaps it is due for a little "bear-market" rally. Yes, the "half-wit/dim-wit" traders have all run back to the other side of the ship.

a) I don't know
b) I don't care.

1)The dollar is still fundamentally ruined.
2)Commodities are still in a multi-year bull market (I'm personally trying to figure out if it's a permanent bull-market.
3)Peak-Oil is nearing whether it be very soon (2006/2008) or soon (2010/2012)
4) Geopolitical (Irek) is a mess
5) The "RWE" (rogue world event) is a matter of when not if, a.k.a. when is OBL going to pull the next 'stunt'.

So while "my way or the highway" Belgium or "live free or die" Ari are on their little tantrums (just kidding guys!!) we can sit on our hands waiting for their next GIANT sized words!

Whilst we sit broken hearted and feeling sorry for ourselves, I'm going to sneak out and load up the truck and wait for those 'boat-rockers' to tip the boat back my way in time for Jan. 30th, "a special day in Iraq brought to you on behalf of our sponsor, Mr. G.W. Bush."

Thanks for coming out and sincerely, have a golden week-end.

Ned...and Rich...#1280411/8/05; 00:55:03

...stop stirring the pot!


BelgianOpinions...#1280421/8/05; 02:05:19

Towncrier's 3 posts : msgs# 128010 (!!!) - 128033 -128020/22 !!!
The evolving core gold fundamentals (facts) in a very comprehensive nutshell, presented to all, on the CPM golden plate.

Add Knallgold's recent overview to this nice coctail...and take your time to comment thoroughly on these fine works.

Is gold, the process of taking Another step "forward" in its modern "evolution" !? May I call the silent readers to express themselves on this question !!!

NedQuestion to Towncrier#1280431/8/05; 06:57:20

Thanks Belgian for pointing out TC's 3 posts.


I just checked your latest. I would like to try to interpret this 'freegold' concept in its most rudimentary form.

From your 128033, I see that governments (in particular the U.S. government) has dictated the price of gold and dictated its 'use' or lack of a better term. You make reference to 1933, 1934, 1968, 1971, 1972, 1973, 1975 and 1978 as examples. Then in 1999 the EU has decided to treat gold in a new manner, that is to say its 15% reserves in gold is to be 'priced' in the "fair" market conditions. The EU, further, as declared in WAG I and now WAG II will not lease and 'manage' gold to influence its price. Perhaps to say it will be a passive gold holder as opoosed to a active gold market(managed) participant.

So in 15 words or less, can I say that "freegold" is a concept whereby governments in particular are seen not to 'manage' the gold price? Also is this belief solely or at least primarily based on the actions of the EU and primarily as a consequence of WAG I & II ??

Thirdly, I have never seen this word, "deification". calls it the process of making god like. This 'freegold' concept apparently is paramount?


goldenpeaceDisagreements on the forum...haiku#1280441/8/05; 07:31:42

When opinions come to blows
how can the golden space of truth
ever be seen clearly.

All are valued here....just patience required.

Blessings to all.

mikalHaiku #1280451/8/05; 13:07:11

With gold and happy
Standing on high ground, watching
With the high and dry

GoldendomePosts from yesterday, #128029 and #128030#1280461/8/05; 13:36:59

Cheers to Lady Waverider for the links to the Asian Times articles posted yesterday: "The emporer has no cloths" and "The center of the doughnut"

Andre Gunder Frank-the author-is certainly no fan of U.S. hegemony either polical or economic. In one text he makes a point that I have tried to raise here a couple of times without much success, I quote Frank: "...Uncle Sam's power rests on two pillars only, the paper dollar and the Pentagon..."

The paper dollar (the world reserve currency) is dumped to the world to finance a massive, high technology military...and, the threat of military use or disuse, is used to perpetuate the dollar's hegemony. I will leave it to Frank in explaining--from a foreign point of view--how this is all done. (Not a flattering presentation.)

These articles present the dark side of U.S. power and influence as presented by someone, surely not on the President's Christmas card list!

TownCrierNed, management and "deification"#1280471/8/05; 13:40:36

"in 15 words or less, can I say that "freegold" is a concept whereby governments in particular are seen not to 'manage' the gold price?"

I think it's fair to say that governments will always have their hand in the management of of their currencies. And to the extend that they do manage currencies, by consequence they are "managing" the price levels of everything that can be bought with their currency. Some countries have managed low rates of inflation, while others have mismanaged high rights.

The country of Turkey at the start of the year "managed" to drop six zeros from its currency, a legacy of past inflationary mismanagement, and has issued a new lira. The government has consequently "managed" to reduce the nominal prices of everything by a factor of one million. But that is not to say they have effectively altered the relatives prices of all goods, the "REAL prices" of one good against another in accordance with real relative values of one item against another.

So to get the most from your question, ignoring the fact that governments can always be expected to manage the price (level) of all things (as a reflection of currency management), the focus must become whether gold will be held out for extraordinary price management beyond the general price management effect being experienced by everything else.

The answer to that, as revealed in the march of dates I provided, is that gold has already been under the heavy thumb of extraordinary price management all these long years of modern monetary affairs under modern banking.

The good news for gold owners is that the progression of events (often as responses to overstrained effects of unsustainable policy) shows a growing political awareness, maturity, and acceptance of the indomitable value of gold which cannot be so easily veiled by management of its price in isolation relative to all other things.

Which brings us to the "deification" comments. That was not my personal choice to describe the long overdue casting away of the legacy of price management techniques aimed uniquely toward gold. Rich Powell had asked whether freegold could be accomplished, as it would require something that to him was akin to political "deification" of gold, and so it was that I merely responded in kind, trying to relate to him eye to eye in recycling his word.

But as this post should make clear, in case my earlier post did not, freegold does not require quite so much "deification" via special treatment, but rather more so requires the mature elimination of the legacy of burdensome special price-management treatments that have for long years been weighing upon it.


TownCrierWeekend too long?#1280481/8/05; 13:46:55

If you ever feel Monday's business hours cannot arrive soon enough, feel free to submit your order request 24/seven through USAGOLD-Centennial's handy online store to meet most of your needs. For the bullion portion of your requests, however, you'll simply have to wait 'til Monday to speak with MK, George, Marie or Jonathan.

see url


Liberty HeadUnder the Big Top#1280491/8/05; 13:49:41

How free can free gold be without free trade?
How free can free gold be if investment choices are controlled? Think taxes, gov't spending, 401k, Soc.Sec. etc.
If anyone has the idea that gold will become more free through some sort of legislative action they are quite sadly mistaken. Legislative bodies only restrict freeness; they have no freeness to bestow. Gov't is pure force and that pure force routinely hires itself out to the highest bidders.
Gold, indeed mankind will only be free to the extent that government is limited by the governed. In fact, choosing gold over fiat helps limit government.
Frankly, most folks currently inhabiting this planet have little will to limit government. Most fear the risks associated with being free.
Many folks buy into the fairness doctrines to the exclusion of true freedom.
Fear and fairness both can sell people out of their freedoms. This dynamic is independent of which blocks currency happens to be in vogue.
"Step right up".
Is that circus music I hear in the background?

Gold is more free relative to any fiat, get some.

Best Wishes

YGMHaiku of the Two Who's#1280501/8/05; 13:51:05

You Who give me Gold,
I Who trade you paper,
One Who sleeps content.

R PowellTownCrier#1280511/8/05; 13:58:28

Thanks for the well-written response (128033) listing many of those issues that distinguish gold as a political metal rather then just another commodity. And yes, I have to agree that perhaps gold is becoming, over time, less restricted by political mandate. I should have thought of these things myself. I can only answer that your definition of freegold is the first time that I understood the concept (assuming your definition IS what Belgian is saying). I've not had much time to digest it yet. So, if the gold price discovery process is becoming less restricted, maybe the market process of supply and demand are becoming more influencial than they have been in the past. Certainly, a government ordered price fix of X dollars/ounce is at the completely opposite extreme from any free market price discovery system, no matter how flawed that system might be.

Along this line of thinking and given the definition of freegold as gold priced by physical transactions only (no derivatives allowed), then I'd conclude that gold's monetary exchange value, always in the present (no futures transactions allowed) is becoming less restricted. I view this as a positive as I believe market prices should be determined by the invisible hand of supply/demand. I also happen to believe that that government is best which governs least. I see this as a safe guard to ensure economic prosperity and individual liberty.

But, (isn't there always a but), I doubt we will see a time when gold (or any item) is NOT bought/sold with some future delivery date involved with that transaction. Derivatives have been part of the economic system for centuries. They fulfill a necessary economic function. Speculative money in this market also provides a needed function, and is justifibly rewarded for its presence in correct (time proven right) positions. I believe these to be facts but some would call them just opinions. Home mortgages are derivatives. Home mortgages are supported (made possible) with speculative money. How many could afford even the meagerest of dwellings if houses could only be purchased with cash payment-in-full upon delivery? I do not wish to see "freehouses" although I would love to be free of my home mortgage! So, while I wish for less interference in the free market system I doubt we will ever see a totally derivative free market (economy). It simply would not function. Just my opinion here again, I do believe that true underlying fundamentals of any item can and does (over time) simply overpower what I might call other market forces (technical trading positions or opinions) or what others might call manipulation.
Thanks again for the facts.

R PowellAristotle#1280521/8/05; 14:14:23

You mentioned yesterday...

"Because "giants" and others who want Gold don't shop for Gold on the NYSE!! And you wanna know something else? They don't shop for it on the COMEX, either!"

I'll agree. When you used the word Gold, I know you were refering to physical metal. Although it is possible to "take delivery" from either ETFs or Comex, it is difficult and probably much more expensive than simply buying through other means (brokers). Both ETF's and Comex may at some point in time become the metal supply of last resort, if supply ever becomes almost non-existent. Neither source possesses much metal (quantity) and thus neither could supply much even if delivery were called for, no? Both of these remain paper games (investment vehicles) settled in currency. The situation is even more exaggerated in the silver market.
happy weekend!

Buongiorno!squabbles#1280531/8/05; 15:12:37

New steel strikes old flint

Sparks fly--tinder starts to glow

Ideas flow, we grow


GeneAri#1280541/8/05; 16:34:10

I didn't think you capable of speaking in clear, concise, easy to understand English. Congradulations I understood your 22:48 message of yesterday. Now, my question is,"Where the heck is Eliot Spitzer when you need him"? What is going on then, is clearly illegal and only for the benefit of the bullion banks & their cronies.I guess it's my naivety that makes me think big brother will protect us from this scum.On the other hand, even though we hold our gold in our hands, how can we stop this paper BS from driving our assets down? Where is the end of this?
Regards, Gene

R PowellMortgages and derivatives#1280551/8/05; 17:55:21

Recently (128051) I opined that home mortgages are derivatives. I'd better rethink that one! Although there are similarities, mortgages are much more akin to long term loans than derivative contracts. Time to watch some football.
Noble1Down But Not Out#1280561/8/05; 18:03:45

This is the only gold forum that I ever visit anymore because of the high regard that I hold for the host and the regular posters here. But every once in a while we get caught up in almost a dogma that is preached that Physical Gold in Possession is the only way that *real* investors buy gold and that anyone who even considers anything else is "half-Noble","halfwitted", "nitwitted" or even fully "dimwitted". Sir Aristotle, your msg: #128036 was most enlightening. I learned a lot about you. It was posted late Friday night and anyone who missed it must visit the archives. I agree with you that PGiP is the ultimate form of gold ownership. But I disagree that other forms of investment are not appropriate in some cases and they should not be categorically dismissed or those that want to consider and discuss them at this table round-ridiculed. Ari, I will continue to look forward to your posts as your knowledge about the machinations of this quirky gold market of ours is always most educational and for 5+ years I have been following your advice---Gold. Get you some. But I don't know what I did to PYO other than try to continue an open discussion into the ETF and try to give it due consideration.

Now, getting back to the creation and redemption of baskets. Some questions for anyone. If the cabal were to flood the dimwit sharemarket by allocating gold to the ETF beyond the demand, wouldn't you expect the share prices to trade below the price of physical? How would the resulting arbitrage opportunities come into play? Do they help level the playing field or are they just another tool for the cabal?


phil288noble "ETF redemption"#1280571/8/05; 19:08:17

If the etf ie. GLD were a closed end fund then the price of the fund would indeed go below the price of the metal. But in this case all they have to do is send the equivalent bars back across the vault to the unallocated stack, call it a sale and call it good. No effect on the price in the market place. Now if they wanted to affect the price in the market place they could sell it outright or for that matter just short it into the market place. From the banks point of view the deal is very flexable. Not so with gold in your hand.
MKNoble 1#1280591/8/05; 19:20:12

Thank you for the kind comments.

In my view the markets will never again shed derivatives now that they've been discovered in their present form. However, I do believe that they need to be regulated. There are far wiser souls than I who could determine how this might be accomplished. The ethical core of the regulation should be that no one is allowed to take a position that moves the market beyond the boundaries of fair play. Nor should they exceed laying off risks associated with real market positions which need to be hedged. It is not the derivatives themselves that are the culprit, but the concentration of capital that allows a small handful of players to control various markets to their own advantage because of the financial capital they command. This is essentially unfair. Many would call it morally reprehensible. Derivatives should be a means to allay risk not undermine free market processes and create arbitrary, systemic risk that transfers in the modern economy to the central bank and ultimately taxpayers who haven't clue the extent and power of these operations.

I believe that Alan Greenspan knows and understands this, but he is afraid that if he comes out with a position espousing ideas like the ones just outlined, he will be the one blamed with a systemic collapse. At the same time, speaking about profiles in courage, its is the position of the rationalist -- a modern Erasmus, ie the one who saved the capitalist system.

Of course, to deal with this sort of thing implies an enlightened legislature that relies on principle -- profiles in courage, if you will. As we know the current crop --where party politics and career rules -- is far from that level of commitment to constitutional principles.

MKAdd on. . .#1280601/8/05; 19:23:04

What I mean by that final comment with respect to Consitutional principles is that it should be the role of government to insure to the best of its ability free and fair markets.
Dollar Bill.,.#1280611/8/05; 19:51:26

I think Greenspan loves derivitives for exactly the reasons you mention he might sensibly object to them. They allow him to drag everyone into the new financial global model of, well, complete control mostly, and command economy for the most part, and the end result? Tyranny I would guess.
The glorious enlightened big brother who dampen dowm disruptions in the projected -smooth- global command, allowance style finance model. The -money rain- benevolently disbursing food and needs under the all careing false god of the globalist economy controllers.
Ah, the great riech of the -all factors considered- globalist vision. The dawn of the econonmic strait jacket.
Mostly fair mind you.

"Derivatives should ...undermine free market processes and create arbitrary, systemic risk that transfers in the modern economy to the central bank and ultimately taxpayers who haven't clue the extent and power of these operations."

MKDollar Bill#1280621/8/05; 20:20:18

There are a great of many of my friends who see it as you do and we have long discussions about it. I have to admit that lately when I realized that the bullion banks have less incentive than in the past to keep gold down, I started rooting around for other explanations. As for Greenspan, this is the enigma wrapped in puzzle that makes the Fed chairman one of the more interesting actors in the modern morality play. One wonders what he might be saying about all this if he weren't chairman of the Fed. Having spent considerable time with Ayn Rand in his early years one would think it difficult to shed that influence. I've ruminated about the puzzle that Greenspan represents for a long, long time.
MKDollar Bill#1280631/8/05; 20:26:42

Also, the Volcker quote from his new book being passed around is noteworthy in the Greenspan context.
Liberty HeadGreenspan = Darth Vader#1280641/9/05; 00:29:40

Darth Vader was a Jedi in his youth, trained by Obi-Wan Kenobi(Rand), he thought he could be Yoda's(Von Mises)equal.
Fueled by rage and discontent, Darth was seduced to the dark side to serve the empire . Once he became intoxicated with power his flesh was coupled with metal.

Now we just need a rebel fighter to put a photon torpedo into the reactor shaft.
May the Force be with us all.

I wonder if Greenspan listens to John Williams music on his way into the office.

Best Wishes

Best Wishes

DruidMOSCOW ON THE HUDSON#1280651/9/05; 01:33:54

"From the outset of this essay, I would first like to point out the notable selfless effort and time that some good people before me have invested in this most noble pursuit for the truth. This essay would not be possible without the yeoman's work of Mr. Ed Steer of Edmonton, Alberta, Canada. I have always been most impressed with Mr. Steer's diligent treatment and articulation of the factual [and I believe irrefutable] case being put forward as proof that the price of gold has indeed been surreptitiously rigged or fixed. Ed Steer might be described as a lieutenant in Midas Bill Murphy's GATA army – whose indefatigable efforts to expose corrupt practices in clear contravention of anti trust laws have gone virtually and irresponsibly unreported by the main stream financial press.

Have any of you ever read the essay by Dana Allen titled, How the Soviet Empire's Fall was Engineered? If you haven't, I [like Steer] would suggest to you that it's a must read - which I've hyperlinked for your reading enjoyment. It is alleged to be a true story – as told by first hand accounts by participants – outlining how the Soviet Bear was slain leading to the conclusion of the Cold War at the end of the 1980's. Ed Steer ‘turned me on’ to this piece through an essay of his entitled, When Irish Eyes Are Smiling: The Story of Canada's Gold? In this piece, Steer builds on factual insights gleaned from the Dana Allen piece to opine what happened to or at least what were the likely circumstances surrounding and associated with the dis-hoarding of Canada's 660 metric tonnes of sovereign gold. For illustration purposes, I've borrowed Steer's graphic that unequivocally illustrates that this process began around 1985 [as table 1 illustrates] and was largely concluded by 1993/94.

Instead of framing this essay as a simple story about gold and price fixing, I would like to expand on Steer's efforts with a few telling observations of my own that dovetail quite nicely, at least in a geopolitical sense, with Ed's already credible thesis woven around the disappearance of Canada's sovereign gold. This essay will also serve to add more context to a prior piece I penned entitled, To GSE or Not to GSE? by adding credible background [1985 – 1994] to the notion that covert price management of strategic commodities is neither new nor a far fetched idea that only lives in the minds of gold bugs."

Druid: A very informative read. Enjoy.

KnallgoldAri's 128'036#1280661/9/05; 05:46:16

Crystal clear!And as crystal clear the conclusion out of it:we are in badly need of a pure physical Gold market!!

And gives a final answer to Gene's question "On the other hand, even though we hold our gold in our hands, how can we stop this paper BS from driving our assets down? Where is the end of this?"

And Noble1's:"If the cabal were to flood the dimwit sharemarket by allocating gold to the ETF beyond the demand, wouldn't you expect the share prices to trade below the price of physical?" can only answered with the old "separation of physical and paper".

So lets talk about a new legislation around Gold!
Recently I remembered the explosive few sentences discovered a few years ago on the (english)SNB homepage (I think YGM found it?),it stated that it is forbidden by law to write futures,options,credit etc. on Gold!Unfortunately,I lost the link and I couldn't find it anymore,it seemed gone.But I swear it was there,like an early glimpse on FreeGold.

NedNoble1, phil288#1280671/9/05; 06:02:20

When GLD first appeared (Nov. 04?) and within a couple of weeks had sold some 15 tonnes I asked how this was done, where did the gold go? The POG dropped like a rock and GLD was, for the most part, blamed for the drop.

In the last week I see GLD has bought a sizable allotment and some are trying to pin the POG drop on GLD again.

I find it difficult to fathom that it can be both ways. Is that possible?

Secondly I had asked if the Canadian version of a 'gold trust', Central Fund was in effect similar to "Streetraks". A couple posters noted that it wasn't but I don't recall why. Perhaps it had something to do with the "closed end" nature. Can you fellows comment? I know that CEF's 'premium' to the REAL THING which was 10-12% has fallen off quite a bit and is now approximately half of that. I would assume that CEF's premium/discount would be proportional to the general 'Bull/bear' outlook of POG, no?


Noble1Ned#1280681/9/05; 09:40:32

I believe GLD initially appeared Nov. 18 or 19. No, I don't think it can work both ways but we can put creative spin on both lines of thinking to support our interpretations of what may be happening. As we watch, listen , and learn, we will figure it out.

When the market corrects, we all get a little anxious and want to blame it on someone. Many will call MK and want to know what's happening. I think holders of physical gold are less likely to panic. I'll bet MK says something like this to established clients, "Yes, we know the market has pulled back as it has in the past and will do so again in the future. No markets go straight up. But, our intermediate and long term outlook for gold remains strongly bullish. Therefore, if you considering additional purchases, our recommendation is to use these pullbacks to increase your holdings." And to prospective new clients, "This is a great time to enter the market. Our analysis indicates that we are still early in a secular bull market in gold that has much further to go. Due to the nature and speed of this recent pullback, we feel that the ensuing rise will potentially be quick and dramatic. If you are considering a purchase of gold, the opportunities created by these pullbacks cannot be overemphasized."

If, indeed, we are still in a bull market we should hope that the majority of MK's calls during these pullbacks are purchase inquiries (especially from prospective new clients) and not questions about "how do I liquidate my physical holdings?".

Back to GLD; The last time I checked, they still haven't posted the premium/discount of their shares to the price of PG for Fri. Jan. 7th. Given the 10% increase in allocated tonnage on that day, if the created shares sold at a significant discount to the price of physical, then, Sir Aristotle is correct in his assessment. If they sold at a significant premium, it may be due to demand from John Q. Public. If the premium is insignificant, then, I don't know if it tells us anything.


phil288ned#1280691/9/05; 09:55:59

As for CEF, yes it is a closed end fund, and thus any price at any moment is a function of supply and demand at that moment. The other thing with CEF that many people forget is there is a silver component which is quite large. I believe they hold silver to gold 50 to 1 by weight. At 6.70 silver the value of their silver approaches 45% of the whole. Any move back towards the historical gold silver ratio of 16 to 1 should be reflected in an improved performance of the net asset value of CEF over GLD.
DruidGold ETF#1280701/9/05; 10:55:03

Druid: Maybe I'm missing the point, but it seems pretty straight forward to me. This gold EFT's price is a derivative(function) of what shenanigans are pulled off in the futures market. Therefore, your questions should focus on the price cap (or measured increase) that controls the futures price. I'm sure the ratio of physical to paper concerning this ETF was well thought out as to not put to much pressure on the physical market.
USAGOLD - Centennial Precious Metals, Inc.MK's 'Gold Forecast 2005'#1280711/9/05; 12:44:15

Michael Kosares, author of the hot-selling book, "The ABCs of Gold Investing - How to Protect and Build Your Wealth with Gold", has made immediately available to all USAGOLD visitors his important first Client Letter of the new year in which he puts forth his forecast for gold in 2005.
mikalPanicky French finmin out of the loop#1280721/9/05; 12:46:29

France Finance Minister Urges U.S. Action to Halt Dollar Slide - Reuters - January 9, 2004
mikalConnecting (the dots)with the ECB #1280731/9/05; 13:00:35§ion=investing

ECB's Issing Says Central Bank Credibility Vital - Reuters -January 9, 2005
Confirms TC, Belgium, Ari, MK, etc. positions regarding ongoing gold-friendly euroland fiscal, monetary agendas, political will.

mikalWim Duisenberg lauds euro's 6th anniversary#1280741/9/05; 13:13:40

BY Invitation WIM DUISENBERG - January 2005
A victory for stability as the euro grows up

Excerpt: "On Jan 1, the euro celebrated its sixth birthday. Today, we look back on a period in which the European Central Bank has successfully pursued a stability-oriented single monetary policy serving more than 300 million citizens.
This is a remarkable achievement. When the Maastricht Treaty was ratified in 1993, many people doubted whether Economic and Monetary Union would work. The Treaty's goal was widely thought to be laudable but realisable only in the indefinite future. To the surprise of many, Europe demonstrated great determination to ensure that the single currency became a reality.
A single monetary policy for a currency area comprising 11 and later 12 countries, each with a sovereign national government, was something entirely new. Would it be compatible with autonomous national fiscal policies? Given the decentralised nature of the system, would national interests distort the conduct of monetary policy?
I see several reasons underlying the ECB's success in implementing a supranational monetary policy and thus in firmly establishing the euros stability. First..."

TownCrierCentral bankers, regulators review world economy#1280751/9/05; 13:56:57

BASEL, Switzerland, Jan 9 (Reuters) - Central bankers, joined by commercial counterparts and financial regulators from around the globe, on Sunday discussed ways to ensure smooth economic growth amid worries over widening U.S. deficits.

The two-day meeting, held at the Bank for International Settlements, examines cooperation among bankers and watchdogs as cross-border ties strengthen, meaning that sparks in one corner of the globe could provoke fire in another.

...Earlier on Sunday, the head of the International Monetary Fund warned the U.S. budget deficit was "truly excessive" and that the world's leading economy must resolve the problem.

Bank of Japan Governor Toshihiko Fukui said ... "Including foreign exchange, there is a risk markets overall could move in an irregular manner at any time. So in that regard foreign exchange movements could be a risk and we are watching them carefully."

In past meetings in Basel, central bankers have discussed currency moves, with some officials warning that a further dollar fall would encourage central banks to diversify their foreign exchange reserves away from dollar assets.

Analysts say more weakness in the dollar -- which has lost 25 percent in trade-weighted terms since early 2003 -- could pose risks to the world economy, especially in export-reliant Asia.

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

These issues are at the heart of many of the discussions we have been having lately.

Central bankers know better than anybody that gold reserves are the ultimate bastion of stability when forex fortifications crumble.

Choose gold and stay ahead of the game. A phone call Monday-Friday (8:30am - 6:00pm Denver Time) to USAGOLD-Centennial Precious Metals, Inc. will put you in very good company.


YGMTC...Central Bankers Meeting#1280761/9/05; 14:54:02

Amazing they don't talk about China w/ the Biggest "Internal Construction Boom" the world has ever seen...Note the Chart of Chinas Output over the rest of the world...China is not just a nation of Production anymore but now a Nation of Consumers coming into the 21st century w/ 1.5 Billion inhabitants and as such the so called expert analysts attitudes toward Markets, Base Metals, PM's, Fiats and much more is in question to my mind....YGM
TownCrierImproved economy bringing inflation#1280771/9/05; 14:55:10

HARRISBURG, Pa. -- After a decade of relatively tame prices, consumers are starting to feel the "ouch" of inflation as the cost of everything from coffee, candy and home appliances is marching higher.

It's not a sharp pain yet, and some call it hardly noticeable. But with companies such as Procter & Gamble Co., Hershey Foods Corp. and Whirlpool Corp. passing along the higher prices they pay for raw materials to their customers, it's beginning to get attention from people who shop in grocery, appliance and department stores.

...the supply chain, which seems to have absorbed most of the higher costs, may be reaching its tipping point. Analysts say a slowly improving economy is giving producers more confidence to pass on higher prices, especially as excess inventories dwindle and commodities, from green coffee to oil, stay at elevated prices.

"I think the faster rate of inflation is here to stay," said Nigel Gault, managing director of the U.S. economic service of Global Insight in Lexington, Mass. "The important thing is whether it is stabilized at the rate it is at, or whether it will accelerate even faster. That is the question."

...December announcement of a 14 percent increase in prices for Folgers roast and ground coffee to sustained increases in the cost of green coffee. It was the largest price increase for Folgers products in a decade...

...appliance manufacturer Whirlpool bumped its prices up by 5 percent to 10 percent to pay for the rising cost of steel, transportation and plastics and resins. It's the largest price increase in at least 10 years...

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

Inflation is very much about consumer expectations, and the everlasting truth is that money can be easily created, whereas gold cannot. Preserve your purchasing power by choosing the one with the right characteristics for your savings.


BoilermakerMikal- Issing & Duisenberg Statements on Euro's 6th Anniversary#1280781/9/05; 15:22:50

These were remarkable statements of sensible monetary stewardship. No crying or wailing about short term economic effects of strong currency. Exactly the opposite of Greenspan's Fed and the Dunce of Treasury Snow. Now I look forward to Belgian's interpretation of these seemingly coordinated statements.
DryWasherThe Endangered US Dollar#1280791/9/05; 16:10:07

I just stumbled upon the above linked short essay by Richard Heinberg that covers a lot of ground in very few words. Although readers of this forum will not find anything new in it, I think it might serve as a useful introduction to the realities we are facing for those friends and relatives that give you the "Deer in the headlights stare" when you try to give them a quick answer as to why you are investing in Gold.

Heinberg covers the history of money and banking, the history of the Dollar and the Euro, the creation of the Federal Reserve, the outlawing of United States Gold ownership, the relationship of the Dollar and Euro to oil, where we are at today, and a brief look ahead to the future, all within about 12 pages.


BoilermakerReal vs. Surreal#1280801/9/05; 16:11:36

I've witnessed some sharp controversy here lately re physical vs. paper gold. My simplistic view is that purchase of paper gold whether stocks, ETF, futures or options only delays the day when gold, freed from manipulation of paper imposters, seeks its true value vis-a-vis all the fiat pretenders.

Paper gold is like "reading" a skin mag. Whets the appetite but lacks reality.

DryWasherPeak Oil: Life after the oil crash.#1280811/9/05; 17:02:10

The above link is to the Peak Oil web site where I found the "The Endangered US Dollar" essay described in my msg#: 128079 below, for those interested in additional information on Peak Oil.

As Sir Black Blade has warned us many times, Golden portfolio insurance is an important part of preparation for the troubled times coming following Peak Oil, and with today's bargain prices it might be a very good time to load up on a bit of the yellow.


mikalCommercial complaints accompany evolving market relationships#1280821/9/05; 20:08:59

Evans To Prod China To Toughen Copyright, Trademark Crackdown - Bloomberg - January 9, 2005

Any WTO actions taken, beyond closed-door negotiations, will bear watching, especially given the glacial pace of reform up to now.
Along with many legitimate commercial complaints of piracy, plagiarism or copyright violations, how many more escape detection? But soon that will be a relatively minor matter in the scheme of manufactured things.

NedTC, Rich....others on the 'Freegold Trail.#1280831/9/05; 20:09:22


Thanks for your message 128047 in response to my 128043...what (in 15 words or less) is 'freegold'?

Yes I agree that governments have their hand in managing fact is there anything, on a monetary/fiscal level that they don't have their mitts in?

So I consider this paragraph from your post to be the punch line:

"So to get the most from your question, ignoring the fact that governments can always be expected to manage the price (level) of all things (as a reflection of currency management), the focus must become whether gold will be held out for extraordinary price management beyond the general price management effect being experienced by everything else."


So what I am understanding is 'Freegold' is normal management as opposed to extraordinary price management. So far so good, I concur 100%.....

" August 1971 the U.S. suspended international convertibility. The price remained officially fixed, however gold was no longer delivered in exchange for dollars as promised under the 1944 Bretton Woods agreements."

As a consequence, can it be debated that the US freed gold from the shackles of the US currency? Gold was told forget about convertability to the the US dollar, you are on your own! Gold began its commodity status (in theory) and was on its own supply/demand merits. Surely, this is a possibility.

Gold now freed, began a major bull market because it was shackled (pegged) to the USD at $35. Over a decade gold stormed to $850 and finally settled into a $300-500 range for a decade.

It seems to me that base metals and precious metals and most resources were stuck in a range bound coma for another decade from the early '90's to a year or two ago. It never ceases to amaze me that a strong, critical base metal like copper was the same price in 1992 as 2002. I'm not sure of the exact time horizon, I don't have a set of charts in front of me but base metals, precious metals and oil were cometose for a long, long time. The synchonized 'moonshot' for all these commodities seemed to take place in unison from early-mid '70's to mid-late '80's. From that point to a couple years ago all were dead.

So where am I going with this?

Many have been taking about a dollar bear from 2000 or so on. The dollar has taken a beating recently as it has dropped on the DX chart from 120 to the low 80's. As a consequence of a 'smaller' dollar ALL commodities have balloned, the essence of inflation, X dollars per oz. means more dollars per oz. when the numerator shrinks. Simple math.

As Sinclair and a host of others have explained, the dollar and the dollar price of POG have been linearly inverse. All things being equal they must, its a mathematical relationship. The explanation is that gold is behaving like a currency. This IMHO is bizarre, because a currency that has dropped by a third (DX 120 -----> 80) causes all items to increase proportionately. Surely hamburgers at the golden arches dinnner club that were 3 dollars and now 4 dollars are not 'currency'. On a more realistic level oil at $30 is now $40 because of the 'smaller ' dollar.

Is oil a currency?

Getting back to the discussion of Freegold I see Rich's great response of 128051.

"...I have to agree that perhaps gold is becoming, over time, less restricted by political mandate..... a government ordered price fix of X dollars/ounce is at the completely opposite extreme from any free market price discovery system, no matter how flawed that system might be.

Along this line of thinking and given the definition of freegold as gold priced by physical transactions only .... I view this as a positive as I believe market prices should be determined by the invisible hand of supply/demand."

Thank you Rich.

So this opens a can of worms. Is Freegold the ceasation of "extraordinary price management beyond the general price management effect being experienced by everything else" or is "freegold as gold priced by physical transactions only.."

As Rich mentions and as I allude does "government ordered price fix of X dollars/ounce" ending in 1971 represent the beginning of Freegold as suggested by "market prices should be determined by the invisible hand of supply/demand..."

I leave with one last little sorry story. My brother -in-law is a big wig (VP, Purchasing)with a large, common name retail hardware, lumbar, renovation outlet. He blessed my home over the Christmas holidays from the 25th to the 29th. He apparently spends half his time with 'Purchasing' duties and half his time with 'lumbar futures'. He is into gold as he feels the USD is overvalued so fortunately we can talk on common ground. We spoke for 3 days about lumbar futures and deviratives and ALL that 'paper mache' stuff. He laughs about it. Apparently he can move the companies bottom line margins by several points simply by playing the futures. This goes back to the derivitives mess by the techies in 2000/2001. It's still going on, only larger bets are being placed....REALLY.

Derivatives in gold is small pototoes when one considers the big picture. The commodities picture, obviously including gold, is one enormus ugly picture played by gamblers and spectulators......truely. One just has to keep his head screwed on and obey market fundamentals.

In the end simple, simple supply/demand fundamentals will dictate the price of EVERYTHING.

Oil will prove this over the next decade.

Looking forward to more freegold information.


Topaz@$419 the stuffs nearly "free" anyway ;-)#1280841/10/05; 00:22:22

The double-edged Sword on the end-of-quarter repats (as I recall) was that to qualify for the Tax discount, funds so repatriated HAVE to be reinvested in the SM.
OK, lets say the repat Tsunami is over and aftershocks take DX to 85.
Phase 2 (Dow 11K plus) should unfold this week as will imo Oil downdraft.
Gold @ this level is a gimme I think!

Topaz...and, via Doran next-door.#1280851/10/05; 01:06:41

a tongue in cheek reality check.
Belgian@ Boilermaker#1280861/10/05; 02:32:48

The couple... oil and euro,... will marry (soon) ! The preparation of their marriage has recently taken a step further ! Ciao
Clink!Two from Richebacher#1280871/10/05; 07:04:31

Two excellent articles from the perceptive Dr. The first one (linked above) talks about the fundamental differences between the economies of the US, Japan and Euroland. One point of comparison, which I have brought up here before on a couple of occasions, is that it is very important to factor in the population change in any statistics which involve people (duh!), so things like job growth (as a percentage of the (changing) population) or economic growth (GDP as opposed to GDP/capita) can completely skew the picture.
Snip :-

Euroland's Secret Success Story:

"The United States is richer and grows faster than euroland because productivity levels are higher and productivity growth stronger - right? Actually, no. Euroland's inferior GDP performance is attributable to a slower- growing labor force that works shorter hours.

"Euroland's underlying economic performance is better than many commentators portray. Over the past decade, GDP per head has risen virtually at the same rate in euroland as the United States; euroland productivity growth (output per hour) and the rise in the employment rates were slightly faster than in the United States; and to maintain the same growth in GDP per head, U.S. workers have had to work much longer hours than their euroland counterparts."

This subtitle and the above two paragraphs are not ours. They are the introductory remarks to a study about the eurozone economy, written by Kevin Daly and published by Goldman Sachs in January 2004.

Gloomy reports about the eurozone economy always abound. To quote a leading article that appeared in The Financial Times under the headline Two Broken Motors: "The latest economic data leave the eurozone and Japan looking more than ever like two enfeebled old men unable to progress at more than a stagger."

With utter amazement, at the same time, we keep reading that the U.S. expansion remains firmly on track, particularly with sharply improving jobs data. Third-quarter real GDP growth was revised upward to 4% at annual rate, compared with an annualized growth rate of 1.2% for the eurozone. Since the end of 2000, America's output, as measured by real GDP, has grown more than twice as fast as the euro areas.

Quoting the London Economist: "Euro-pessimists see this as further evidence that arthritic economies are being held back by lazy workers and by governments unwilling or unable to carry out reforms. In contrast, America's more robust recovery, it is often said, reflects its amazing flexibility."

Our view, in contrast, is that the U.S. economy's recovery since 2001 peaked in the first quarter of 2004. This assumption is primarily based on four observations: First, it is the overwhelming message of recent economic data and early indicators; second, the power of egregious fiscal and monetary stimulus has been spent; third, continuous rate hikes by the Fed will prick both the carry trade and the housing bubbles; and fourth, the U.S. economic recovery is of a flatly unsustainable pattern.

End snip.

The other is at

and talks about the fundamental lack of capital investment in the US economy, driven by the disincentive to save and the temptation to increase debt caused by the artificially low interest rates. There is a rather surprising result from this.

Snip :-

It is typically argued that the U.S. economy is importing too much in comparison to exports. Superficially, that is true. Yet on closer look, it is a mistaken perception. Compared to other industrialized countries, U.S. imports are very low as a ratio of GDP. The true key problem is abysmally low goods exports, accounting lately for barely 7% of nominal GDP. This compares, by the way, with a German goods export ratio of 35% of GDP.

End snip.

As a further comment to this, it would appear that there is significant debate being generated by the proposal to allow changes to the Social Security. While a number of commentators are pointing out (correctly, IMHO) that the stock market is something of a lottery, that there is enormous moral hazard and the only ones guaranteed to benefit would be brokerage houses, no-one has pointed out (to my knowledge) that putting money in the stock market is not investing. Investing would be putting forth capital in order to build a revenue stream which could then generate more capital. Buying shares is often merely a derivative of that activity, as the company in question gets no economic benefit from the buying and selling of its shares. (The office bearers may, but that's a whole different topic !) There may be returns in the form of dividends, but these tend to be small even by comparison to CD yields, with considerably higher capital risk. So a more useful application of the payroll tax "surplus" would be to allow it to be re-invested in US-based (it's US taxpayer money, after all) economic activity, and, most preferably, strictly local activity at that. Schemes such as described by Catherine Austin Fitts ( come to mind.

Gotta do some work now.

BoilermakerUS Consumers- What, Me Worry?:#1280881/10/05; 07:56:54

Here's a wonderful testimonial to the US consumer's attitude towards debt;

" Americans on the whole dream of a debt free future but few are doing anything to plan for that scenario, according to a new survey released today by Moreover, the vast majority of people who are most concerned about their debt have no intention or definitive strategy to manage it, but instead are planning to make big-ticket purchases that will make their financial situation worse."

It's ironic that is the bearer of this news. Sort of like McDonalds surveying their customers and revealing that they are obese. Oh well, maybe that stored up fat will carry those debters through the next ecomomic winter.

USAGOLD / Centennial Precious Metals, Inc.Ask about Dutch Guilders -- a fine addition to any portfolio!#1280891/10/05; 11:34:56

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TownCrierToo much IMF#1280901/10/05; 12:24:56

IMF's former #2, Fisher, to be given a go at central bank

TEL AVIV, Jan 10 (Reuters) - The surprise nomination of Citigroup Vice Chairman Stanley Fischer as Bank of Israel chief...

Prime Minister Ariel Sharon and Finance Minister Benjamin Netanyahu stunned the country on Sunday...

News of the nomination boosted Israeli markets for a second consecutive day on Monday as traders bet the choice could lure foreign investors and even lead to a credit rating upgrade.

But economists say Fischer faces tough challenges.

"Given the fact that he is an outsider, he will have to find his way through the difficult connections between economics and politics in Israel," said Reinhard Cluse, economist for Europe, the Middle East and Africa at UBS in London.

Fischer drew criticism from politicians who believe Israel should not have to import a central bank governor.

But economists and market analysts agree that Fischer is a world class economist. [Randy note: Is that possible when someone is also dyed-in-the-wool with IMF pattern plaid?]

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

If you were to ask me, I'd say this is too much IMF. Will Bretton Woods be able to eke out a little more time?


Federal_ReservesGM dwindling away.....#1280911/10/05; 12:59:31

DETROIT (AP) -- General Motors Corp., the world's biggest automaker, plans to trim its U.S. work force again in 2005, part of an ongoing effort to reduce costs, chairman and chief executive Rick Wagoner said Monday.

GM has trimmed its U.S. payroll every year since 2000, company figures show.

Wagoner, speaking to reporters at the North American International Auto Show, declined to place
a number on targeted reductions, but he said the pattern likely would follow that of recent years.

Through the third quarter of 2004, GM reduced its U.S. hourly work force by about 6 percent versus
the same period in 2003 -- from 119,000 to 112,000, GM figures show.

For the same period, its smaller, salaried work force declined by 5 percent -- from 40,000 to 38,000.

The bulk of the reductions were through attrition and retirements, GM said.

Wagoner said the attrition rate among salaried workers in the past few years has been about
2 percent, while the same rate for hourly workers has been roughly 5 percent.

"We've hired people every year," Wagoner said. "We'll continue to do that. But we don't hire on
a one-for-one replacement. We may do one for two, one for three, depending on the plant and the
location. The result is we've been able to significantly improve productivity without any massive
dislocations of our work force."

But there will be layoffs in 2005. GM said late last year it will close an aging factory in
Baltimore this year and idle another plant in Linden, N.J. Those moves will affect about 2,000 workers.

GM, whose U.S. sales fell 1.4 percent in 2004, has been shrinking its work force in recent years
in the face of declining market share, weak automotive profits and mounting health care and pension costs.

Globally, GM's employment fell from 388,000 in 2000 to 323,000 at the end of September. The company
announced last month it plans to offer another round of early retirement offers and buyout packages
to an undetermined number of its 38,000 U.S. salaried workers early this year.

> Even with the lower dollar, it's not helping GM. still losing market share.
> When China takes over the Auto Industry, there will no manufacturing of substance left in the US.
> By that time, we probably will not be able to make our own arms for the military.
> Reckless global policy tying our dollar to a communist country is insane.

DruidIndia finds a $40bn friend in Iran#1280921/10/05; 13:34:34


India's oil diplomacy took a giant leap forward on Friday when New Delhi unveiled a multibillion-dollar deal with Iran and Russia that will be crucial to India's long-term energy security, and took the initiative the same week to host the first-ever conference on regional cooperation among Asian oil-producing and consuming countries.

In its US$40 billion deal with the National Iranian Oil Co (NIOC), India committed to import natural gas from Iran over a 25-year period and to develop two Iranian oil fields and a gas field. Iran will sell the liquefied natural gas (LNG) to India at a price linked to Brent crude oil. According to the agreement, India will pay $1.2 plus 0.065 of Brent crude average, with an upper ceiling of $31 per barrel. Iran will ship 5 million tonnes of LNG to India annually, with a provision to increase the quantity to 7.5 million tonnes.

As part of the deal, India's ONGC Videsh Ltd (OVL) gets a 20% share in the development of Iran's biggest onshore oilfield, Yadavaran. The Indian company will also get 100% rights in the 300,000-barrel-per-day Jufeir oilfield. The stake in Yadavaran translates into 60,000 barrels per day of oil for India. Significantly, Chinese state oil company Sinopec (China National Petroleum and Chemical Corp) operates the Yadavaran field. With the deal signed in Delhi, India will now hold a 20% stake in Yadavaran, Iran 30%, while China retains its existing 50% share.

In March, Beijing and Tehran signed a deal worth $100 billion. Billed as the "deal of century", this agreement is likely to increase by another $50 billion to $100 billion, bringing the total close to $200 billion, when a similar oil agreement, currently being negotiated, is inked. The gas deal entails the annual export of some 10 million tonnes of Iranian LNG for a 25-year period, as well as the participation, by China's state oil company, in such projects as exploration and drilling, petrochemical and gas industries, pipelines, services and the like.

Druid: More signs along the trail reflecting our changing world. These are HUGE deals and will alter future trade flows for years to come. These trade flows provide the foundations for future ECONOMIC and FINANCIAL activity.

USAGOLD Daily Market ReportPage Update!#1280931/10/05; 14:11:05">
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.

Monday market excerpts

Gold futures closed narrowly higher Monday, after suffering a decline of nearly $19 an ounce last week. "Gold seems to be finding a small foothold here after the large selloff on relative dollar strength," said Kevin Kerr, president of Kerr Trading International.

Overall, gold's value "seems to be getting oversold and we may see a rapid snapback to higher levels," he said, adding that the metals market is "already seeing bargain hunters dip their toes in the water realizing that such a steep correction is overdone."

"The dollar could fall out of bed anytime soon and could catch a lot of traders off guard, sending the yellow metal back up to respectable levels as we head further down the strip like [the] April and June contracts," he said.

COMEX February gold closed at $419.70 after climbing to a high of $421.30 earlier.

Prices should continue to trade in the $418 to $425 area until foreign exchange traders decide on the next direction for the dollar, said James Moore, an analyst at in London.

In the short term, the precious metal is "still open to further downside pressure," but the longer-term outlook is "still bullish with last week's correction likely to prove healthy, enabling the metal to extend above last year's $458 high," he said in a note to clients.

-----(see url for 24-hr international newswire)----


Bush taps Indiana exec Allan Hubbard for top White House economic aid-- interactive investor

UK's Blair, Brown Seek To Crush Talk Of Feud-- Nasdaq - Global Markets

NY gold closes slightly firmer, mirroring euro--

Global economy to grow: Trichet-- The Melbourne Age

Central banks count the cost of weak dollar-- The Himalayan Times

South Africa: Bank Slams Brakes On Dollar Buying--

TownCrierECB's Trichet: 'The oil impact is perhaps now largely absorbed.'#1280941/10/05; 14:31:07

BASEL (AFX) - G10 chairman Jean-Claude Trichet... speaking after a meeting of G10 central bank governors, said a renewed rise in the oil price is 'not credible at this stage'...

Trichet said the G10 meeting did not discuss exchange rates. But he said that, as European Central Bank president, he 'particularly noted' Snow's restatement of the US administration's strong dollar policy.

He said Snow's comments were 'important' but all economies have work to do. 'This is fully in line with the global share of homework to be done...but we all have homework to do,' he said.

---(from url)---

Do your homework, too. Walk 'The Gold Trail' and understand the evolving role of gold.

Call USAGOLD-Centennial to help put a professional polish on your diversified portfolio.


shawnisGold vs. Foreign Currencies#1280951/10/05; 15:04:33

Interesting article. I'd like to hear the more seasoned posted answer this guy's charge.

Basically, he regrets buying physical gold and silver and wishes he would've switched his dollars to Euros instead.

What do you think guys? Is his math wrong?

Ag Mountain@shawnis#1280961/10/05; 15:47:00

A mature investor quickly learns to tune out noise like that guy no matter what angle he's working. He's either a foreign exchange shill or a whiney armchair quarterback thinking he's better than the coach with his Mr. Know-it-all 20/20 hindsight after a single play that lost yardage. The game isn't over and neither is the season, but he's ready to write the headline just the same. That guy spends so much time reminding us over and over again that he's not an economist and that he's just a small time investor that he comes across phonier than a three-dollar bill. Ignore him and everyone that's like him.
USAGOLD - Centennial Precious Metals, Inc.A Couple True Stories about Gold#1280971/10/05; 16:12:38

__$1 million invested becomes $1.5 million__

I recently did an appraisal for a USAGOLD client who was looking to borrow for a real estate transaction. He invested $1 million about four years ago in a mixture of bullion coins and pre-1933 European -- weighted in favor of pre-1933. That purchase is now worth just short of $1.5 million.

We asked his permission to use this story at the USAGOLD website, and here is his e-mail response:

"No problem at all. I have viewed it as a hedge, but also as an alternative to money market funds. Now I can leverage it for investment purposes -- private equity and real estate mostly. The holding has averaged 7%-10% of my total assets. And I do hope to buy substantially more, when appropriate. Thanks again."

Note: He's not selling but hypothecating. Knowing this client he means what he says. I have no doubt he will purchase more gold, as he says, when his personal financial situation deems it appropriate. This is important information because needless to say, he is an astute investor. His returns tell a story worth thinking about in this age of 2% money and wavering to collapsing stock portfolios.

__Gold trumps bank cd's__

"I read the article in the newsletter about one of [USAGOLD's] clients' buying 1 million of gold 4 years ago and it now being worth 1.5 million. I have a similar true story if you would like to use it. About 4 years ago I talked my father into converting about a third of his cash into gold, mostly pre-33 Sovereigns. I bought for him from CPM approximately $80,000 when spot gold was about $290. He had the rest of his money in 1-2% CD's in the bank. My father passed away recently and I am executor. He willed my brother $250,000 which was essentially all of his gold and cash. I gave my brother the gold along with the bank CD's. While the CD's had earned barely a pittance in those 4 years the gold had become 41% more valuable.

"So instead of receiving $250,000 my brother really received about $282,800 ($80,000 x 141% = $112,800 or + $32,800). Had my father converted all his paper money to gold my brother would have received $352,500. Ironically my father was very conservative and didn't like to gamble. In this case his biggest gamble was watching those CD's smolder and not acquiring real money -- gold."

(Client names witheld by request.)


Taking in consideration the loss in value of the dollar, looks like both clients lost over the time span they held the GOLD????????????????????????????????
TownCrierSpinning or benchmarking gains and losses#1280991/10/05; 18:14:05

Hoosier Goldbug,
It is only with the narrow filter of selectively applied opportunity cost with respect to a better performer can one look at gold's performance of the past few years and declare it to be a loser. Please read my comments as I continue with a reply to Shawnis.

The primary problem with Bainerman's presentation is that the same technique he tries to use to humbug gold ownership can also be used to reveal the fallacy of his own solution.

Under the time period in question, he would have you think that gold's gains against the dollar are actually losses on the basis that the euro posted larger gains against the dollar during this particular snapshot of time.

To be sure, the phenomenon is called "opportunity cost", and it can be misapplied by investors as a sort of "sour grapes" measurement when they learn in hindsight that something else performed better than did the use they made of their money -- they see their moderate gains as coming at the "cost" of a lost opportunity for larger gains if (and that's a big IF) they had known and invested with foresight what is so easily seen in hindsight. Similarly, yet seldom applied, one could speak of "opportunity gains" in which money that was tied up in one moderately performing investment, such as gold, prevented that person from getting slaughtered in an inopportune investment avenue such as Enron.

With blinders on, Bainerman said gold investments resulted in losses because hindsight showed euro gains to be larger. However, applying the same rationale to Bainerman's darling, the euro, would force us to declare it to be a loser, also, if we did a similar comparison with the South African Rand which had even larger gains against the dollar. Had Bainerman actually chosen euros over gold, would he now be bemoaning his euro investment "losses" because they performed less spectacularly than the South African Rand? I doubt it. So why is he boring us with double standard in measuring performance? I cannot even pretend know.

But getting back to the crux of the matter, when one sees a reasonable risk that the dollar is vulnerable to depreciation, it is fitting to diversify out of the dollar and into alternatives, and there one is presented with a mixed bag of risk and reward.

Sure, during this snapshot we can now see that it had the best performance in hindsight, but how many people would have felt comfortable beforehand in taking on the political risk of investments in the South African rand? A similar concern for political uncertainty and risk might also lead one to shy away from the euro for the same reason they are shying away from the dollar.

This element of risk avoidance is what drives many investors to diversify into tangible gold among a wide sea of paper assets, and the fact that they sleep well at night is well worth the "opportunity costs" seen only with perfect hindsight against those alternative investment risks that paid off more handsomely. And, of course, in the name of equality let us not forget the multitude of "opportunity gains" (investment disasters avoided) that we could just as legitimately tally up in gold's favor.

I'm going to agree with Ag Mountain on this one and say that Bainerman does not exhibit very much maturity in the investment perspective he attempts to put forth.

If this comes across as too convolutedly complicated, I merely invite anyone to look at the five-year snapshot for the period in question to help assess whether gold ownership has probably been of any comfort to its holders -- up over 60% since 2001. (see url for chart)


Cavan Manshawnis#1281001/10/05; 18:50:51

He should have purchased physical gold and Euros. Swiss Francs would have been a good idea also; it's called diversification.
HOOSIER GOLDBUGTHANKS FOR THE REPLY!!!#1281011/10/05; 20:01:58

A big THANKS for the reply regarding holding GOLD! I just needed some reinforcement, YES AGAIN, for my beliefs in holding PHYSICAL as I have been taking a beating from family regarding my convictions. Like Tom Petty sings.......the waiting is the hardest part, every day takes one more yard, you take it on faith, you take it to the heart, but the waiting is the hardest part.....or something like that!
GoldendomeBrainerman's Complaint#1281021/10/05; 20:05:01

Sir TC: Cogent and Spot on analysis of Brainerman's Complaint!

I note that in the future, he intends to buy/sell/or trade Gold stocks!!! Wow-- talk about an area where selective hindsight may be important! And, this after the technology area! This fella is out for high returns and probably will experience the reverse at some point--if not already.

In selective hindsight, Oil futures would probably look real nice also, or spot Rhodium!

With physical gold we hold and preserve wealth away from paper debt, government, and the promises of others to repay. Listen to the recent talk surfacing lately regarding old age benefits promises in every western democracy; and the likely corresponding strain on each one of the currencies involved. By about 2010, if not sooner, gold is likely to be even shinier than today, as the major currencies struggle to fulfil decades old commitments, underfunded by trillions.

mikalAnother currency curtain call#1281031/10/05; 20:10:45 Doom For The Dollar--And Everything Else
by Dan Ackman - January 10, 2005

shawnisIt's a No-Brainer,man#1281041/10/05; 22:02:26

Thank you for all the responses!

Yes, I tought he was whining and wondered why he didn't diversify. I believe in gold but also think it's silly to put all your eggs into one basket.

I didn't realize he was basing his so-called losses on Dollar vs. Euro. (For the record I thought he was talking INFLATION, which I knew was way too high.) He didn't lose money, he just didn't gain as much if he had bought Euros instead. This guy does live in Israel so he probably views the dollar differently than me, an American, but come on. He's just bemoaning that he didn't buy into something that gave him a higher percentage. Maybe I should email the guy...

Now this leads me to another question, if gold goes up in dollars, but not Euros, what criteria can I use to determine which may be better to invest in (Let's pretend gold is just a currency. Forget store of value for now.)? Do I just compare all the exchange rates? How can I tell when gold is truly going up and dollars are not just going down. I guess I'm looking for tools I can use for the due diligence that I must practice while investing.

Topaz@shawnis.#1281051/11/05; 01:03:54

Our good TC neglected to point out the other key "shortcoming" in Mr Bainermans strategy ie: The MUCH more reassuring option of "PHYSICAL" Gold ownership/possession... (I don't work here;-)
The amounts in question lend themselves perfectly to establishing an "off-market" personal holding par-excellence and anyone who has even the slightest interest in things monetary/fiscal should not, at this point in time, be without same.
There are lots happening Globally shawnis, the likes of which we can only guess at but one "mindset" that is imo about to be shattered is the current US$/Gold relationship.

Watch this space!

BoilermakerEuro vs. gold#1281061/11/05; 06:13:36*&fd=1&fm=1&fy=1999&ld=31&lm=12&ly=2005&y=daily&q=volume&f=png&a=lin&m=0&x=

This chart gives us a better perspective when evaluating the Euro vs. gold performance.
CometoseBoilermaker#1281071/11/05; 07:40:35

Looks like the Euro Price of Gold is falling with regard to inflation ....and therefore is not acting well as an inflation hedge...

It has been said that at 340 to 350 euros , Europe becomes fascinated with Gold Investment ...Interesting that all the machinations since 2001 have kept this gold dollar euro relationship limiting Euro Gold Price in this Bandwidth ....Supply demand dynamics in Gold Market and at the same time Swings of Capital seek the Euro as a Safe haven may indicate to us when this upside resistance is broken .........When the upside resistance is broken will also tell us when these shifts have been made and indicate that another breaking point has been surpassed in this arena...I would think that breaking that overhead resistance is going to act like a catapult on the price initially....another launchpad ......

CometoseEuro Price of Gold (Boilermaker)#1281081/11/05; 07:59:48

Interesting that now in the most recent foray up to this resistance area.....340 Euros for gold oz was the equivalent to $455.
This is a cheap price for gold in Euros , yet.........It appears, perhaps that someone in Europe wants to continue getting it on the cheap as long as possible......
The dislocation which may alter these dynamics may be just around the corner..........

It would suit me just fine if every one who is anyone decided to go on the Continuation March out of the dollar and into the EURO and GOld commencing on Jan 20.

There are many bad omens out there.....

I read Prechter over the weekend via McHugh on the Markets.
The dyanmics of the theory are outlined and he gives Stockmarket implications going back to the 1700s from the theory and Charts going back to early 1900.s . He said that the environment is interpreted by people and markets because of where we are in the Wave.....When we are in the Negative part of the wave.....all news is viewed with that slant on it ......He said that we are in the cusp or just experienced the turn of a Grand Cycle Wave count going back to the 1700's . This corresponds with some other work that was on one of the boards last week from a man from (Armstrong? ) Princeton who also said that last Monday was a turning point....The implications for Gold I think are ominous...Trading causes the speculator to be myopic ....Owning is stress free..and takes one to YONDER Golden HORIZON .....indeed pulls you there with the current under your sail......Without GOld in Possession in this Bull Market sails (under this current) nowhere.

968Free publicity for gold at the New York Fed.#1281091/11/05; 08:18:27

"Indeed, there can be no other criterion, no other standard than gold. Yes, gold, which never changes, which can be shaped into ingots, bars, coins, which has no nationality and which is eternally and universally accepted as the unalterable fiduciary value par excellence."

"As one of the metallic elements in the earth's crust, gold
is as old as the planet itself and is found and extracted
on all continents. It is referred to by many as the "king
of metals" and always has been assigned a role far beyond its value as a commodity.
Gold has been coveted by the great and wealthy —from pharaohs to modern-day heads of state — as a means of ostentation. It has been desired by the common folk for its beauty of appearance and beloved by goldsmiths for its splendid working qualities. Gold has provided material for great artists, novelists, and poets.
And, over the years, it has been used to decorate cathedrals
and palaces, to honor Olympic medalists and movie stars, and to celebrate 50th wedding anniversaries.
Exemplifying supreme appeal and arousing human desire, this metal, above all others, has been used for centuries as a medium of exchange, a measure of value, and a store of wealth.
The gold you see in the vault of the Federal Reserve
Bank of New York attracts more than 20,000 visitors a
year. It is the world's largest accumulation of gold and
belongs to approximately 60 foreign central banks and
international monetary organizations. Only a very small
portion of this gold belongs to the U.S. Government.
The Federal Reserve Bank does not own the precious
metal but serves as guardian for the nations and international organizations that choose to leave their monetary gold reserves in custody with it.
This publication outlines the history of gold and
explores its financial significance and the unique role of
the Federal Reserve Bank of New York in storing and
safeguarding the exquisite metal."

"The value of deposits in the vault also has varied over the years because of changes in the official, as well as the
market, price of gold. Today, all gold transactions occur at
the market price of gold, but prior to 1971 gold transactions between nations were made at an official fixed price.
The official U.S. Government price of gold has changed
only four times during the past 200 years. Since the passage
of the Gold Reserve Act of 1934, which raised the
official price of gold to $35 a troy ounce, the price has
been raised twice: to $38 in 1972, and in 1973, to its
current price of $42.2222 an ounce.
Because of the large disparity between the official price
and the market price of gold, the official price has
become irrelevant from a transactions perspective.
Today, no nation is willing to sell gold at the official
price, which is used by governments only for bookkeeping
and reporting purposes."

"For centuries, gold had an enormous influence on
world events. Much of the original gold used for monetary
and aesthetic purposes is still in existence today.
Regardless of its past, gold often exemplifies well-being,
excellence, and wealth. And because of its widespread
acceptability, it also functions as a medium of exchange,
particularly in areas where currencies are distrusted.
Once referred to by John Maynard Keynes as a "barbarous
relic" and by Johann Christoph Friedrich von
Schiller as "almighty," this precious metal has aroused
great passion. It undoubtedly will continue to do so
long into the future."
Unbelieveble but true : free publicity for gold with kind regards from the CEO of Dollar & Bubble Creation Inc.

BTW : HAPPY NEW YEAR to everyone !

968@ Cometose#1281101/11/05; 08:33:29

Hello Cometose,

IMVHO, I think we won't see significant price swings in the euro-POG as long as the dollar-oil marriage lasts. Until then, Europe wants to keep the € strong in gold terms.
While the US can't control the price of the dollar in oil-terms, they will try to make/hold the dollar strong in gold-terms.

FlaccusMr. Bainerman's math and methods leave something to be desired. . . .#1281111/11/05; 08:53:06

Mr. Bainerman is an example of someone who should use an investment adviser to handle his money. He cannot do the simplest math.

If gold goes from 320 to 420, it has gained 31.3%, not 25%. A 25% gain would have put it at $400, not $420.

In December of 2002, the average price of the euro was $1.02. When gold hit $420, the euro traded at about $1.31. That's a 28.4% gain.

So clearly, in nominal straight-forward terms comparing one directly to the other, that would have made gold a better investment than the euro. Even if you take into account the yield (on which he would have to subtract taxes and the inflation rate), gold probably still comes out the winner.

You cannot pluck numbers out of the sky simply because they suit your argument -- not if you want to be taken seriously. Likewise, you can't mix methodologies, time-frames and selectively choose bottoms and tops that suit your argument.

Now. . .

Reviewing his 2003 to 2004 time scenario things get even more interesting.

He claims to have purchased his gold at $370, yet the highest posted London price for March of 2003 is $356.60 on March 7. The average price for March 2003 looks to be around $340. When you use his $370 figure and $420 as the end point, the gain would have been about 13.5%. When you use $356 as a start point, the gain is 18%. When you use the average of $340 (probably the most accurate representation), the gain in gold is 23.5%, which once again is better than the euro's 21.3% gain over the same period.

Where he got the other numbers I don't know, but he has a difficult time comparing apples to apples - the sure sign of someone with an agenda.

He kept saying check my math, so I did.

There are very good reasons for people to feel about gold the way they do.

By the way, Mr. Bainerman, you say that you are tired of being "propagated" by the gold bugs. What you meant to say, I believe, is that you are tired of being "propagandized." Plants are "propagated." People are "propagandized."

You not only need a financial counselor, you need an editor.

CaradocThe brainman's problem#1281121/11/05; 10:50:36

So there was a recent period when the Euro did better than gold? And that means you should respond by investing in the Euro?

When I was a kid, the deposit on glass soda bottles was two cents for regular size and a nickle for kingsize (the size now replaced by 2 litre bottles). One day, they changed the deposit to five cents for regular and 25 cents for kingsize.

For the brainman, this remarkable riskfree surge in value clearly demonstrates that one's portfolio should be weighted heavily toward large glass soda bottles. There is a storage problem, however, even worse than with silver. And there's the added complication that over the last few decades glass soda bottles of any size have gone to zero in value.

Oh well....


USAGOLD / Centennial Precious Metals, Inc.We've been helping gold investors for over thirty years.#1281131/11/05; 11:06:53">Get a head start on the gold market!
TownCrierFlaccus, excellent post.#1281141/11/05; 11:50:09

Thanks for lending a hand to expose the Bainerman fraud.


Thanks for the kindly comment, although I wanted to assure you that you might have simply overlooked my concluding remarks.

You said, "Our good TC neglected to point out the other key "shortcoming" in Mr Bainermans strategy ie: The MUCH more reassuring option of "PHYSICAL" Gold ownership/possession."

That's surely a very important element, one I would have been negligent to ignore, but in fact, you'll find that treatment if you're willing to look hard enough for it in the closing portion of my comments regarding risk tolerance, where I offered the following:

"when one sees a reasonable risk that the dollar is vulnerable to depreciation, it is fitting to diversify out of the dollar and into alternatives, and there one is presented with a mixed bag of risk and reward. <..........> ... how many people would have felt comfortable beforehand in taking on the political risk of investments in the South African rand? A similar concern for political uncertainty and risk might also lead one to shy away from the euro for the same reason they are shying away from the dollar. This element of risk avoidance is what drives many investors to diversify into TANGIBLE gold among a wide sea of paper assets, and the fact that they SLEEP WELL AT NIGHT is well worth...(etc)"

Even with that said, you are certainly right to emphasize the point as it is worthy of more treatment. Thanks for the opportunity to echo the comment.

I'll also take the opportunity to put up a url to a helpful page for novice gold marketeers to help them arm themselves against the various flim-flam investment proselytizers and one-dimensional Bainermans of the world.


TownCrierFed provides $4.75 billion overnite, as low as 2.1 percent#1281151/11/05; 13:13:20

One must wonder what is the purpose of the FOMC's most recent hike to 2.25 percent and wonder moreso at the talk of future rate hikes to tighten monetary policy when the trading desk's ease of action continues to be at variance with official words.

Choose gold.


TownCrierIs it "benign neglect" or "design defect"?#1281161/11/05; 14:15:45

NEW YORK, Jan 11 (Reuters) - For those who suspected a shift in U.S. dollar policy from what Treasury Secretary John Snow didn't say recently, his reiteration Monday that currencies are best set by market forces appeared to set the record straight.

In a round of television interviews on Friday last week, Snow said the U.S. supports a strong dollar and is committed to "do things" to support the currency's inherent strength. Noticeably, he omitted to recite the other half of his mantra, that exchange rates should be set by the market.

But speaking exclusively to Reuters on Monday, Snow repeated that the U.S. still wants flexible market forces to set exchange rates, dousing speculation the U.S. might have been weighing taking active measures to halt and perhaps reverse the currency's three-year decline.

To many, this clarification shows there is no change to U.S. dollar policy, which, despite the official rhetoric, essentially remains one of benign neglect, currency analysts say.

"I think that markets are reverting back to the Snow that they have gotten used to: The benign neglect of the strong dollar policy (continues)," said Lara Rhame, currency strategist at CSFB in New York.

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

"We believe in market forces and free capital flows," Snow added.

There can be a wide gulf between the saying and the doing. Take the previously posted Fed info for example.

It's no wonder that the ECB's Issing this weekend issued a warning that officials in every part of the world (perhaps some more than others) have to look to their credibility and ensure that their actions actually reinforce rather than contradict their policy dogma.


USAGOLD Daily Market ReportPage Update!#1281171/11/05; 14:43:08">
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.

Tuesday market excerpts

Gold futures climbed to a four-session high above $420 an ounce Tuesday, with some weakness in the U.S. dollar supporting the precious metal.

From here, "it's hard to see gold heading lower," said Brien Lundin, editor of Gold Newsletter, noting that "it would take much greater selling pressure to counteract the tremendous level of physical gold demand now emanating from Asia and the Middle East."

And "given the greatly-reduced long positions in the paper gold market, and the greatly-reduced stores of physical gold in central bank coffers, it doesn't appear possible to sell gold down much further," he said.

COMEX February gold rose $2.70 to end the day at $422.40, its highest closing level since Jan. 5.

"Short term, gold is still open to further downside pressure, which is likely to be triggered by further dollar advances, with the barrage of U.S. economic data due this week a potential trigger," said James Moore, analyst at in London. Trade gap data is due Wednesday and retail sales figures are due Thursday.

But the longer-term outlook is still bullish, with the Iraq elections at the end of the month, a G-7 meeting in February, and the general geo-political picture all increasing gold's safe-haven allure, he said.

Last week's correction will likely prove to be healthy, enabling the metal to extend above last year's $458 high, Moore said.

"The whole metals complex is way oversold considering current fundamentals," said Kevin Kerr, president of Kerr Trading International. He expects gold to trade "back upwards of $430 by the week's end if the current momentum continues."

---(see url for 24-hr international economics newswire)---

slingshotAre We Splitting Hairs?#1281181/11/05; 15:19:20

Interesting that gold could be determined as a loss or gain by which FIAT you use to make a purchase. Should one purchase gold in one Fiat over another? Most Americans have no idea of currency exchange and in so, would only deal with the currency with which they are familiar.
That in mind let me tell you how complex the information is, that has been exchanged at this forum. If one at this time began to read your posts, he or she would be at loss to the interpetation of the gold market and therefore expend a large amount of research to catch up on the subject
or move on to another site in a expedite manner to obtain the information they understand. Not to take away from anyone's thunder but I think in the future, gold will circle around SPOT/ Premium and yearly percentage gain at year end. In 2004 gold had a 5% gain. In 2003 a 19% gain and in 2002, 25% gain. How much from 2001? Will the premiums go from 5-7% to 10% as the metal's acquisition becomes harder. The reasons why,will fall to the wayside as the dash to obtain gold at any reasonable price takes hold.
Those who have been here for some time will not care about the percentage gain between currencies,only the percentage gain in the LONG RUN!

TownCrierECB's Issing: China Must Help To Reduce Global Imbalances#1281191/11/05; 15:43:03

ZURICH -(Dow Jones)- European Central Bank chief economist Otmar Issing said Tuesday that it is China's turn to contribute to the reduction of global imbalances stemming from the large U.S. current account deficit.

"China is still putting off its contribution, but it will no doubt at some stage act," he said, speaking at a conference about liquidity organized by the Swiss National Bank.

Issing said that Europe has already made a contribution to reduce global imbalances, and has even gone further than necessary.

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

Euroland, in parting with a portion of its dearest reserve asset, gold, in the interest of fostering a better balance among those who find themselves presently underweight is indeed going above and beyond the call of duty.

As for China, when they "at some stage act", given their U.S. bond-buying support as the definition of present "inaction", we can fairly deem "action" (at some stage) to mean the halt of bond-buying as a starting point, and significant portfolio rebalancing to be more vigorous action.

Choose gold. Others are not being shy about it. From the DMR today: "...tremendous level of physical gold demand now emanating from Asia and the Middle East."


slingshotHello, Hoosier Goldbug#1281201/11/05; 15:44:18

Good to hear from you.

YGMVancouver Resource Investment Conference....#1281211/11/05; 17:49:16

Jan 23 + 24th...anybody going??...Could hook up for a face to face & a drink...Ken (YGM)
Federal_ReservesKING BUSH!#1281221/11/05; 18:26:21

Did you see the amount of money the REPUB's are spending on the inagauration?

In a time of war when the troops have insufficient arms to defend themselves while the rich voted themselves record tax cuts? Rummy, this is the inagauration we wished for but don't need.

Homeland security money is being used to provide protection for the fat cats as they ride around in limo's and party it up, smoking cigars, drinking, eating, dancing, and telling the poor folk social security is going bankrupt and won't be there for them.


FDR cancelled his fancy parties during the depression and WWII.

TONE IT DOWN to a simple ceremony or cancel it.

mikalTouché! Now better than the Olympic games.#1281231/11/05; 19:05:55

Evans criticizes China's economic management, warns of backlash - Bloomberg - January 11, 2005
HOOSIER GOLDBUG(No Subject)#1281241/11/05; 19:39:45

Topaz@Randy ...peddling the "hard" line.#1281251/11/05; 23:00:13

No mate, I didn't miss the reference but thought it needed reinforcement ..."neglected to point out" might better have been said " too gentlemanly to emphasize" in light of the original (Bainerman) tale of woe.
We can only hope that, now armed with the "knowledge of difference", Sir shawnis will delve deeper into the mire and discover for himself that the babbling Brook existing between Physical and Paper, "today" easily traversed with a few deft paces from Rock to Rock, can, in the twinkling of an eye become a vast chasm, crossable only by those VERY well equipped.

TownCrierTo-pazmanian-man,#1281261/11/05; 23:43:16

Well said.

And in turn, when traversing the economic wilderness, gold is the universal equipment than can mean the difference between arriving in style versus failure to survive the trip.


WaveriderDollar Drops Against Euro, Yen After Trade Gap Widens to Record #1281271/12/05; 07:21:33

"Demand for the U.S. currency waned after the Commerce Department said the gap, the amount by which imports exceed exports, widened to $60.3 billion from a revised $56 billion in October. A larger deficit means more dollars have to be converted to other currencies to pay for imports. ``This report reminds the market of the fundamental reason for the dollar's decline of the past three years,'' said Michael Woolfolk, a currency strategist in New York at Bank of New York. ``The December trade number for the U.S. is likely to show continued deterioration. The dollar has to go down.''"
WaveriderGandalf - #1281281/12/05; 07:34:20

Here's one of your favorite charts of US confetti.
ZhishengTsunami aid and the Trade Deficit#1281291/12/05; 08:44:33

Thanks Lady Waverider. The last I read the US Government contribution to Tsunami victims would be about 350 million dollars.
As of this last report, that amounts to about three and a half hours worth of trade deficit.

2023@ Zhisheng and all#1281301/12/05; 09:08:12

I am disgusted that this govt only gives $350 mill for Tsunami victims yet occupies Iraq at a cost of $5.8 bil per month. Things are way out of whack in the USA.
I have donated some of my own money to those poor people and I think everyone should...especially the rich in this country.

2023Trade gap / Snow#1281311/12/05; 09:25:26

Snow's take on the trade gap:
"The trade gap reflects two things: that our economy is growing at a fast pace and we are growing faster than our trading partners," Snow told reporters.

White Hills$350 Million Aid ?????#1281321/12/05; 09:34:35

Zhisheng, Sir, how wrong you can be. Not only has the USA Govt pledged $350 Million dollars in aid it has also dispatched Navy ships, helecopters, Marines, Airplanes and Supply logistics to the effort. In addition vast amounts of money are being raised by private efforts as well as many private volunteers on the scene helping. What is the rest of the world doing??? I am disgusted with people who critizes the USA when they only have half of the story. Gee, I wonder if we will get any offers of assistance in California and Florida for all the damage done there? White Hills
Federal_ReservesSnow's job or Snow Job#1281331/12/05; 09:55:04

The account deficit is caused by high crude oil prices and the the destruction of the
US manufacturing base. WE can't even feed ourselves anymore, we import more agricultural
products than export. Most farmers are over 55, and will be completely gone in another 15 years.
US citizens make a living doing each other's laundry, filling the stock shelves at WMART, processing
loan applications. Hamburger flippers at McDonalds are considered factory workers today. We don't make things, we sell things. Things like drugs and porno. Yes, porno is still the internet's most profitable item.

We can lower the dollar all we want, the deficit will not correct. Its structural as well as financial. The US common worker is going broke, the global digital elite have backstabbed them with the blade of globalism. The elites willing and openly do business with Chinese communists who use the money they make to arm themselves and prepare attacks on Taiwan.

Hold some physical gold as a protection plan. Gold has been in an uptrend since early 2001. It appears to be retesting that uptrend this year.

RimhTsunami relief dollars#1281341/12/05; 11:02:07

White Hills, Zhisheng, I don't believe we can be judgemental about what each country is or is not providing in the relief efforts, ie. everyone recognizes the needs and is doing their best to provide aid as best they know how, be it individual or governmental. My hope is that aid dollars will stay mainly with the non-governmental agencies (NGO's) for the most efficient use of the monies. And I hope people recognize the longer term needs for these washed-away communities in the recovery plans...

On a different vein, I wonder if some of the big foreign US dollar holders are divesting themselves of US dollars toward relief efforts.... I don't know if that's possible or not, just wondering.

TownCrierWaverider, trade gap and dollar#1281351/12/05; 12:06:16

"Demand for the U.S. currency waned after the Commerce Department said the gap, the amount by which imports exceed exports, widened to $60.3 billion from a revised $56 billion in October. A larger deficit means more dollars have to be converted to other currencies to pay for imports. 'This report reminds the market of the fundamental reason for the dollar's decline of the past three years,' said Michael Woolfolk..."

---------(from the article)--------

About the only portion of the assessment that landed on target was the remark that relative demand for the U.S. dollar waned after the report, as attested to by its downdraft on the FOREX market.

The article states that dollars must be converted to pay for imports, something Woolfolk points to as the fundamental reason for a three year decline, but frankly that situation is nothing new and therefore provides only a very superficial explanation for those not willing to dig deeper.

For starters, we are told to believe that an ongoing conversion to pay for imports is the fundamental reason for decline, yet today's forex action, in response to the report, clearly smacks of punters' reaction and speculative cashflow. Had such a thing as an ongoing conversion for imports been actually occurring, surely the forex effect would have already been fundamentally manifested, and thus leaving the spectulators today with less headroom with which to dunk the exchange rate.

In light of the decades-old chronic trade gap, rather than speaking of "currency conversions for imports" as though suddenly the fundamental root of recent dollar weakness, it would be much more appropriate to admit that the dollar remains freakishly stronger than we might be able to understand or otherwise be led to believe by the conversion-for-import theory stated above.

The more properly stated case hinges on the dollar's international reserve status. Despite chronic trade gaps, the dollar has not experienced a full effect of softened exchange rates because it has not been subjected to a commensurate level of foreign exchange conversions among existing money stock. Instead, the central banks of the countries at the source of our imports have been absorbing these dollars as assets on their balance sheet, against which they can issue new quantities of local currency -- without pressuring the dollar/local exchange rate as would be seen via actual forex "conversions".

The foreign central bank's dollars are then put to work back in New York where they are used to bid on U.S. bonds in order to earn interest for the cb's.

This 'recycling' mechanism, as a consequence of reserve status among our trade-flow dollars, is what has fundamentally helped keep the dollar stronger than the narrower view of trade-macroeconomics would let us see.

Therefore, we are left with a more important interpretation of the dollar's recent weakening, and one that meshes not surprisingly with the recent launch of the euro project. Namely, "the fundamental reason for the dollar's decline of the past three years" is that the old supportive mechanism is breaking down as the dollar is losing its key reserve status in the international monetary system.

Choose gold today, because the old supportive mechanisms will only be weakening more rapidly as the balance tips further away from the dollar's reserve status favor. In the downdraft of its fall, all currencies will take a related knock, and gold will ascend the throne -- rightly king of international (and individual) reserves.

Call USAGOLD-Centennial today to discuss a diversification strategy that's right for you. 1-800-869-5115 Ext# 100.


TownCriertremendous level of physical gold demand now emanating from Asia and the Middle East#1281361/12/05; 12:18:24

A repeat from yesterday's DMR:

From here, "it's hard to see gold heading lower," said Brien Lundin, editor of Gold Newsletter, noting that "it would take much greater selling pressure to counteract the tremendous level of physical gold demand now emanating from Asia and the Middle East."

Ask yourself, why are they buying gold when they could as easily be trading for currency that earns interest? What do they know that your own countryment haven't yet figured out for themselves? Consider, in whose hands is held the fate of the dollar? Not yours; therefore, do not overburden yourself with exposure, do not bear its risks.


geMark M. Rostenko on 2005#1281371/12/05; 12:27:48

"[2005 shall] be a boring year (barring any major geopolitical surprises), a time for us to rest up ahead for a fascinating 2006."
TownCrierNY gold bolts to 1-week high on record US trade gap#1281381/12/05; 12:55:50

NEW YORK, Jan 12 (Reuters) - U.S. gold futures rose to a one-week high Wednesday morning on heavy investor buying as the dollar fell on surprisingly weak U.S. trade data for November, dealers said.

The U.S. trade deficit widened to a record $60.3 billion in November, which was far beyond expectations for it to narrow to $54 billion.

"The trade gap was much bigger than expected, so the euro started rallying rather severely and took gold with it," said a dealer at a precious metals refiner.

Many investors as well as currency dealers turn to the precious metal as an alternative to a lower dollar.

-----(From url)----

With gold priced comfortably at the bargain half of its rising channel, call USAGOLD-Centennial today and ask about the nice price available on Swiss gold 20 franc coins.


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TownCrierA fundamental non-replicative characteristic that argues for the inclusion of gold in your portfolio#1281411/12/05; 14:26:13

As touched upon in earlier commentary...

On the one side of its balance sheet a central bank can, for example, acquire the bonds of governments and the currencies of other central banks as assets, against which it can newly issue an equivalent amount of its own own brand of currency. This currency can in turn be acquired by other banks against which emission of other currency can occur, and so on, and so forth.

If it is the coordinating aim of banks, currency exchange rates can be held relatively stable vis à vis each other throughout the paper abundance, but concurrently be falling in value in relation to the scarcity of real goods -- as seen in rising prices.

So while it is a fact that monetary authorities can absorb assets in order to issue more money which can itself be used by others to issue yet more money, it is also a fact that no monetary authority has the ability to issue new quantities of physical gold -- unique among financial assets. Gold shall ever be among the scarce quantities of goods under hot pursuit of those with ever-depreciating money.

The staff at USAGOLD-Centennial stand at the ready to discuss a diversification strategy custom-tailored to your personal financial goals. Call them today. 1-800-869-5115 (international, see link)


TownCrierDJ FOCUS: Gold Still Consolidating, But Likely To Rise Again#1281421/12/05; 14:43:39

SYDNEY (Dow Jones)--A strong showing in 2004 may have given way to a shaky
start in 2005 for gold, but even as it continues to consolidate around US$420
a troy ounce, most traders and analysts believe the yellow metal will soon
rise again.

Notwithstanding a few dissenters, traders and analysts largely believe the
U.S. dollar's recent bounce is a temporary phenomenon, likely to be reversed
as focus eventually returns to sharp imbalances in the U.S. economy.

In addition, while the dollar's seemingly tentative show of strength has
prompted hedge funds to exit gold and other metals, traders say physical
demand for bullion, notably in Asia, has helped gold steady itself early this

UBS has held its one-month forecast at US$440/oz, describing current
prices "as an attractive level to buy gold."

Physical buying has continued early this week, with players in Singapore,
Hong Kong, China, Japan, Thailand and elsewhere among those "bargain hunting"
at current levels, traders say.

According to sources in Hong Kong and Sydney, interest has been
particularly good in China and other countries celebrating the upcoming Lunar
New Year in early February.

"At this point in time, it (still) cannot be determined if this move down
will eventually turn out to be a sharp 'V' or rather a more rounded 'U' in
the overall uptrend picture," a technical trader in Singapore said.

But "it would seem plausible that this retracement is just part of normal
market ebbs and flows," he said, echoing others in adding that the large
fiscal and current account deficits in the U.S. should eventually ensure
further U.S. dollar weakness.

Whether the latter eventuates in the short term or not will be more easily
determined after Wednesday's November U.S. trade balance figures, which are
due out at 1330 GMT, Standard Bank London said in a daily market note.

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

As this article was compiled prior to the latest release of trade date, we now have a more definitive perspective on what was merely conjecture at the time of this article's writing.

Take advantage of the price dip while you still may. Call Centennial and lock in your order.


TownCrierAn article on gold from Reuters for beginners#1281431/12/05; 14:56:33

HEADLINE: Precious metals outlook tied to dollar swings

NEW YORK, Jan 12 (Reuters) - Precious metals prices are usually closely tied to the dollar's fortunes and, barring further outbreaks of Middle East violence, that relationship is expected to be stronger than ever in 2005, analysts said.

The conventional wisdom says a weaker U.S. currency tends to enhance demand for dollar-priced assets such as precious metals, by making them cheaper for overseas investors.

The correlation can be subject to disruption if other factors are in play, such as war or threats to world crude oil supplies, which encourage a flight to the safety of investments such as gold.

"We believe the dollar's fluctuation will play a major role in the direction of precious metals in 2005," said David Meger, director of metals trading at Alaron Trading Corp in Chicago.

"But the dollar is only one piece of the puzzle for precious metals. Certainly, the correlation between the two has been more resolute of late," he added.

In 2004, traders made large profits in precious metals such as gold and silver, mostly in the fourth quarter, when the dollar weakened sharply on concerns about the huge U.S. trade and budget deficits.

Precious metals prices had rallied over the last two years supported by a heady cocktail of global economic expansion, a declining dollar, supply shortages and fund managers' enthusiasm for commodities as they sought to get away from traditional investments such as stocks and bonds.

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

Par for the course, always a descriptiong of the ripples and waves but never a word about the all important tides of reserve asset roles and portfolio balance. Seek the higher solid ground of gold before the effect of a quaked dollar rolls ashore.


Gandalf the WhiteThanks for taking care of the WATCH, Lady Waverider !!! <;-)#1281441/12/05; 15:08:44

I have been totally tied-up for the last few days, until now, and just got a chance to sit down and look at the "TRUTHFUL" world news report, by coming to my HOME PAGE ! The US$ Chart is back to the "GIANT FALLS" status again !!
(Perhaps we could apply for a FERC Hydropower Permit.)
Thanks, TC and everyone for the updates !
Got to run again ---

USAGOLD Daily Market ReportPage Update!#1281451/12/05; 16:07:26">
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.

Wednesday market excertps

Gold futures closed at their highest level in a week Wednesday as a record-high U.S. trade deficit drove the dollar sharply lower against its foreign rivals.

Gold is "moving solidly higher on the back of all the relentless selling" in the dollar -- "a dose of bad-tasting medicine for the [greenback] bulls with the reality that things aren't so rosy," said Kevin Kerr, president of Kerr Trading International.

"The U.S. trade number was appalling and is a good indicator of the pain still to come," he said.

"This should continue to undermine the greenback and send more investors running for cover back to the safe-haven of gold and precious metals."

The dollar fell sharply after the U.S. trade deficit unexpectedly widened to $60.3 billion in November, its highest level ever.

Against this backdrop, Comex February gold rose $4.20 to close at $426.60 after tapping a high of $428.30. It's gold's highest close since Jan. 5.

"The secular bull market in metals has resumed after yet another brief, but sharp correction," said Peter Grandich, editor of The Grandich Letter, an investment advisory publication.

-----(see url for 24-hr international economic newswire)---

China's appetite for platinum weak, but gold glitters-- Martin Creamer's Engineering News

US trade deficit hits all-time high-- The Melbourne Age

Dollar Dives on Record Trade Gap, Snow Comments-- Nasdaq - Global Markets

Fed says inflation under control but being watched-- UBS Warburg

TownCrierChina's appetite for platinum weak, but gold glitters#1281461/12/05; 16:44:15

Chinese consumers are showing little interest in platinum jewellery ahead of the Lunar New Year celebration and instead are turning to gold, which has gained in popularity among youngsters, dealers said.
------(from url)-------

A very good sign of the times and trends ahead.


Pan Thai foreign reserves seek refuge from US$ funds#1281471/12/05; 17:25:09

THE government wants to cut the proportion of Thailand's $50 billion worth of foreign reserves kept in US dollar-denominated assets, to cut the risks associated with the currency's roller-coaster ride on the forex markets.
ZhishengWHOA THERE!#1281481/12/05; 17:47:11

I suppose one could draw some conclusions about the reactions to my post this morning: principally that our Tsunami aid is a touchy subject.

I did not intend any sort of judgement about that. If you throw in personal contributions and all the military assistence, it likely still comes in at less than two billion.

Anything over a billion is certainly not peanuts.

But two billion is only a day's worth of trade deficit. My point is that the trade deficit is so large that it is nearly incomprehensible.

Not one person in a hundred is aware of this problem, that it is growing nearly on a monthly basis, and that its consequences will be devastating.

SanchoZhisheng#1281491/12/05; 18:12:24

Every now and then while reading all this monetary knashing of teeth on adequacy of Tsunami relief I reflect and wonder whether, if an earthquake caused California to descend to the depths resulting in Nevada becoming waterfront, if there would be any country whatsoever besides Canada that would give us any aid. I kind of hesitate to even mention such a thing as it might make me a bit persona no grata. Anyway, on your item on trade deficit, it IS incomprehensible, and will lead to some changes this country has never seen. It is truly sad that we have elected in the US primarily a bunch of combative attorneys that know nothing of economics.
Lupoaid relief#1281501/12/05; 19:08:58

Correct me if I am wrong but we are not giving one dime of relief money, rather we are borrowing money from others to give aid. When you already have a deficit of 220B for the current year, you don't have any money to give. This is just another spark into the gas can, don't you think? Even on this forum we speak of the government giving money or spinding money as if it had any. Imagine the uninitiated out there and their lack of understanding.
Gandalf the WhiteThanks, Sir Pan ! <;-)#1281511/12/05; 19:55:17

Pan (1/12/05; 17:25:09MT - msg#: 128147)
Thai foreign reserves seek refuge from US$ funds.
Let me see ---- THAT US$49.8 Billion will only buy a little over 200 million Baht of 0.965 Yellow !!
I will bet that Mr. Olarn Chaiprawat, adviser to Minister of Finance Mr. Somkid Jatusripitak, has thought of that too.

GoldendomeLupo: It's a confidence game#1281521/12/05; 20:35:46

Sir Lupo: Ya, I think that it's just the way that you say it is. When deficits run as high as the U.S.'s, what's a few more millions? (In relation to hundreds of billions)

The wheel spins round and round, but faster.

They make the products; we consume the products.
They earn the money; we borrow the money.
They lend; we spend.

Without huge budget defits requiring huge bond offerings, would the U.S. be able to run the huge current account deficits? Or, does the huge current account deficit allow (require) the huge budget deficit, to park the foreign account accumulations? Chicken or Egg?

CytekIceberg Threat #1281531/12/05; 21:02:35

We note that a 100-mile long iceberg is presently bearing down on the McMurdo Ice Station in the Antarctic and is threatening the station to the point where it looks like most of the 4,500 people in the area will be evacuated. Story. January 11, 2005 -- A giant iceberg the size of Long Island is on a collision course with a floating glacier in Antarctica — and it could cause a smash so big, it will be best seen from space.
NASA scientists say the 100-mile-long iceberg, dubbed B-15 A, is set to crash into the Drygalski Ice Tongue near the McMurdo Research Station on the coast of Antarctica by the end of this week.

Our concern - and one that is getting almost no attention in the U.S. press, but which is getting reported elsewhere -is the threat of a change in sea level which could jeopardize the fate of millions of people living in low lying regions. A big international conference is being held on that topic this week:

More pressing:
By their own calculations, the US Geological Survey reports that there's enough ice in the West Antarctic there to raise sea level 8.06 meters - that pencils out to 26 feet. Just to put into perspective how this could screw up the world: 80+ percent of the world's oil refineries are in that close to sea level. And if you live in Florida, the runway elevation at Boca Raton, Miami International, and Ft. Lauderdale is around 16-20 feet!

Small islands weigh up threat of rising sea level
January 10, 2005
Paris: Climate change and rising sea levels are set to top the agenda at an international conference this week on developing small island nations.

The December 26 tsanumis have highlighted the vulnerability of the smallest islands. The waves destroyed several of the 1 192 low-lying islands that make up the Maldives in the Indian Ocean.

Looking beyond natural catastrophes to the broader challenge of global warming, the UN conference, which opens in Mauritius today and runs until Friday, hopes to help small island states prepare for the future as the world's oceans rise.

Around the world, thousands of islands, deltas and low-lying coastal areas that are at risk of being swamped by high tides and during violent storms are set to face a growing battle with the encroaching seas.

barelyTsunami Relief#1281541/12/05; 21:09:37

I found the tsunami relief discussion interesting on several levels. Most of the folks that I know who work in international aid agree that the most needed donations are usually small, steady and long term, such as $30 per month to support a third world child. This is not to discount the value of short-term influxes of support. But they are usually emotion driven. The tsunami disaster will be mostly forgotten in a few months as we get on with our lives, yet the needs in the stricken areas will continue for our lifetime.

Pledges are just pledges. They are good for political posturing, but are quickly and conveniently abandoned. For example, the Iranian earthquake got over a billion in disaster relief pledges, yet only a few million in actual delivery. I hereby publicly pledge $12.5 billion to tsunami relief. Take that GWB. I will have to pay it at $30 per month, and unless gold gets to several $ millions per ounce soon, I will fall a bit short. But I will likely continue helping out far longer than all the political promises.

In a similar vein, it seems to me that building my yellow and silver stash in a slow, steady manner, as opposed to being whipsawed by the emotional ups and downs of price fluctuations, will help me prepare for the inevitable financial tsunami. Gold – I am getting me some. Sponsor a child – looks like I will be getting me another. Both are golden. End of old guy ramblings.

SundeckUS borrowings increasingly reliant upon short-term maturity#1281551/12/05; 21:12:29

An interesting article in today's Australian Financial Review (by John Quiggin) points out that "the main reason" that the price of long-term US treasuries (notes and bonds) have not fallen is that there are fewer of them....thus a falling demand for them has been offset by a falling supply of them.

Over the last few years, the US treasury has dramatically shortened the term of its borrowings...the average maturity of new issues have fallen from 90 months in 1999 to 34.2 months by September 2004. The average maturity of all outstanding treasuries has fallen from 70 months in 2000 to 55.1 months by September 2004.

Evidently faith in short term debt is still relatively strong...but how long can it last?? Faith in longer term debt is being "disguised" by its progressive removal to keep demand in balance with supply...clever, eh?

Meanwhile, as Sir Pan's #128147 post indicates, those hefty lenders from Asia are getting a little touchy about where they invest their funds, leading to an increase in bond issues in the currencies of the region.

All an enormous multi-juggler juggling act with many balls in the air...let's hope that the invisible hand of Adam Smith is there to catch the loose balls, and distribute them equitably, before they start hitting the deck...otherwise the jugglers are going to cop it in the jugular...

Gold should do OK, methinks...



Black BladeMarket Wrap Up - Hartman#1281561/13/05; 00:02:19


Energy prices moved higher right out of the gate, but turned negative with some really bad spin about prices moving lower because of an unexpected build in distillate inventories. The first Bloomberg headline read, "Crude Oil Rises as U.S. Inventories Decline More-Than-Expected." Then they started backpedaling and came out with the headline, "Crude Oil Falls After Report of Surging U.S. Fuel Inventories." After that headline came out crude, heating oil and gasoline prices all started to move higher again. It looks like the build in distillate inventory went into the wrong place with unleaded gasoline adding a million barrels to inventory and heating oil inventories FALLING by 513,000 barrels.

Gold woke up a bit today with a gain of $4.20 to $426.60 and silver added ten cents to close at $6.73 an ounce. Last week I basically said silver is my favorite investment for the coming year. Last Tuesday silver reached a low of $6.35 an ounce and closed today at $6.73, a gain of 6% from the low. Yesterday silver gained 19 cents and followed through with another 10 cents, but the stocks failed to confirm the advance in the silver price. Many of the junior silver mining companies had some nice gains today, but the larger-cap silver mining companies all had losses today. The non-confirmation from the shares tells me we will get one more pull-back in the silver price. They can do all they want to prop-up the dollar and play their paper short selling games in gold and silver, but I believe we will have physical supply problems in silver as commercial users and investors begin to realize there just isn't very much silver to go around.

Black Blade: Actually much the same can be said about Gold as has been said about Silver. Gold production too is falling and expected to fall fast over the next several years as miners have failed miserably to build up reserves through exploration efforts. Meanwhile another solid "leg up" in Gold and Silver could pressure the few remaining mega-hedgers into bankruptcy. Nothing like the "real deal" - just look to the "Castle Guards" at USAGOLD for a dip into the treasury. ;-)

TopazThe Basket Case Gold price.#1281571/13/05; 00:03:56

Gold is over-ripe for a move upward in Currencies other than $US imo.
To track this "Basket/Oz" price we can divide the alt DX (currently 1.22) into the $PoG.
Today I type ...this figure is B349.25.

Let's watch!

Black BladeReport: U.S. lost 1.5M jobs to China #1281581/13/05; 00:08:10


WASHINGTON (Reuters) - The United States lost nearly 1.5 million jobs between 1989 and 2003 because of increased trade with China, according to a report released Tuesday by a government watchdog committee.

Black Blade: Yep, a lotta "bones" been added to the ever-growing "Bone Pile". It really hasn't let up any even as US Gov. statisticians crunch away, the "official" unemployment rate hovers around 5.4% (not counting those who run out of benefits, those who gave up, those who simply do not qualify, etc.). Get prepared by getting outta debt and staying outta debt, stash enough emergency cash for several months of household expenses, accumulate Gold and Silver "portfolio insurance" (bullion and coin), and start a storage program of nonperishable food and basic necessities (while you can and the price is relatively "cheap").

TownCrierSundeck, on the borrowing shift to shorter maturity -- "Comments?" #1281591/13/05; 00:11:27

I agree.

I indicated as much back when I first reported the news on the day of the Treasury's press release, October 31, 2001. Here is a snip of that post of the press release and my initial blurb:

(10/31/01; 11:16:31MT - msg#: 64433)
Treasury Dept Press Release: Suspension (Cancellation) of 30-yr Bond as a Financing Tool
As a consequence of the further weakening of the economy and the increased federal outlays that have occurred since the attacks of September 11th, the near-term financing requirements of the federal government are larger than we anticipated just three months ago at our last quarterly refunding in August. In this setting, the management of the Treasury's marketable debt needs to anticipate the possibility of a unified budget deficit for this fiscal year and, perhaps, the following fiscal year as well.
We are suspending issuance of the 30-year bond: there will be no auction of 30-year securities in February 2002 and we plan no further auctions of either 30-year nominal or inflation-adjusted bonds.
Randy says: This is what we call "putting on a brave face" against the inevitable slide into a massive inflationary period. Just look around. How many hyperinflationary banana republics do you see that can successfully offer for market long-term bonds? They can't and don't. Termination of the U.S. 30-year bellwether is just Another sign of the changing times at hand.
Significant financial events are unfolding whether you see them or not. Can the current structure of your portfolio withstand being economically blind-sided at any given moment?

As we all know with the sure benefit of hindsight, the dollar has in fact been on a long downhill slide since, and we can only speculate how much WORSE the conditions would appear today were it not for this superficially (appearance-wise) significant preemptive action by the Treasury to curb the market-sensitive long-side supply.

I revisited and furthered this theme in a post nearly two years later from that time, and I'm tickled that you have now reprised the theme of "juggling", as that is how I described it in my post of July 31, 2003. An excerpt follows.

(07/31/03; 13:03:55MT - msg#: 106575)
Comments on next week's quarterly refunding -- $60 billion in U.S. debt securities to be auctioned

Most basically, at this point given the size and historical trend of the growing national debt, I don't think I risk over-exaggeration to summarize thus: "Ponzi Scheme".

So much debt has been issued for so long that we could faily say the Treasury Department's primary function is to juggle the multitude of past obligations (semi-annual interest payments and principal payments at maturity) while also fielding the additional balls that are being tossed in with each new phase of deficit budgets by the government.

With payment obligations and maturities of the plethora of outstanding U.S. debt securities happening around the clock, the Treasury is seen actively refinancing and rolling over this debt also around the clock, while working in the new borrowing needs of the government. So much so, in fact, that the Treasury Department auctions off newly packaged debt at a frequency of about every other day -- more than 150 times each year.

Most frequently, on a weekly basis the Treasury has auctions on new issues of 4-week, 13-week, and 26-week Treasury Bills.

Bear in mind that these auction schedules are not forever carved in stone, and that the Treasury adds or trims its issuance and type of securities as it sees fit to best respond to market contraints (or opportunities) in managing its financing needs over time.

To cite a well-known example, in October 2001 the Treasury found it to be expedient to terminate usage of the 30-year bond. Now, while on the face this may seem counterintuitive and counterproductive to have dropped the long bond in an attractive financing environment of low interest rates such as we have had during this period, we must on a deeper level appreciate something else -- namely, that (beside gold) the long bond is (was) the market's "purest" telltale of its confidence in the U.S. dollar as a going institution. To cap the supply of the long bond is to buy a little more time in the court of public opinion (market sentiment) to get through this tough post-bubble crisis period.

I hope this satisfies to some degree your request for comments regarding the article by John Quiggin in today's Australian Financial Review, and I hope it also shows viewers how very far ahead of the mainstream intellectual curve we are here at the USAGOLD Forum.

Stay tuned and stay safely ahead of the monetary distresses!


968ECB's weekly financial statement.#1281601/13/05; 00:47:25

Gold and gold recievables : minus 17 million euros to 125,7 billion euros.
Net position in foreign currency : up 1.3 billion to 155,6 billion.

968Is gold losing the Midas touch?#1281611/13/05; 01:10:53

Central banks -- which hold big chunks of the world's 150,000 tonnes of gold -- are sellers. Under the second European Central Bank Gold Sales Agreement which runs to 2009, the banks have said they will sell 2,500 tonnes of their reserves over the period.

This could depress the price of gold, Cross said, although the agreement exists to counteract volatility from unexpected sales.

Hopes that China will buy to diversify its foreign reserves are misguided, she added. The market is too illiquid.
A very strange statement from Ms. Cross (Virtual Metals).
"The market is too illiquid."
Why would the market be too illiquid for China to buy gold ?
Why wasn't the market too illiquid for Argentina to buy gold ?
What does Ms. Cross mean by this ?
I didn't know CB's or big funds bought gold on the COMEX ? (cfr. Ari's recent article)
Are the CB Gold Sales too illiquid ? Are they short on physical ?
Thoughts anyone ? Belgian, Ari,... ?

Black BladeRe: 968#1281631/13/05; 01:18:19

Not much of a worry. Central Banks really don't sell Gold. that is they don't sell Gold on the open market but rather they sell to other Central Banks. Essentially what happens is that they just shuffle digits about so that Gold in bank vaults or already loaned out belongs on the books of another bank. In short, most of that supposedly "sold Gold" never sees the light of day.

- Black Blade

TownCrier968, Eurosystem reserves have come a long way since euro launch#1281641/13/05; 01:20:29

As reiterated last week:
(1/7/05; 12:38:12MT - msg#: 128010)

At January 1999--
Gold reserves stood at 99.6 billion euro
[and net position in foreign currency stood at 227.3 euro]

At January 2001, upon the full modern Eurosystem membership with the addition of Greece to EMU--
Gold reserves stood at 117.1 billion euro
Net position in foreign currency stood at 261.4 euro

From that benchmark to your figures of today, owing to higher per ounce valuation, a slightly lighter tonnage of gold reserves (due to WA-I and -II reallocations) has enjoyed a net increase in value by 8.6 billion euros.

The net position in foreign currency has through depreciations and portfolio adjustments been slashed by 105.8 billion euros.

Therein is to be found the real story.


968@ Black Blade, Towncrier#1281651/13/05; 01:25:28

Thanks for your comments. Are you guys up all night watching the markets ?

@ Townie : I know the ECB's gold and foreign currency reserves have come from a totally different position. I just want to inform our fellow-forummers on the recent ECB-statements.

TownCrierErrata#1281661/13/05; 01:34:19

The net positions in foreign currency for January 1999 and 2001 -- please understand them each as billions.


Black BladeRe: 968#1281671/13/05; 01:35:33

Nah, just up late catching up on some reports and paperwork as my drillers mutinied and won't work the rest of the week. Drillers just don't have much of a sense of humor when it is well below zero temperatures with windchills -35F of better. ;-)

- Black Blade

SundeckJuggling shorter and shorter maturity treqsuries#1281681/13/05; 03:17:14

Ahhh yes Sir TC,

You have the advantage of ready search access to the archives...actually, I was half inclined to prefix my last post with something like: "While this subject has probably been raised previously on the forum, ...". However, it is certainly worth emphasising the shift to shorter maturities again.

Most people would have been aware of the cancellation of the 30 yr long-bond, but probably puzzled as to its meaning. The reason is starting to become fairly stark...

How much "shorter" can Peter borrow (from Paul, would you believe!!!) to pay back Paul before Paul call "Enough!" That is the question...

Cheers TC...good posts...and keep up the good work...


968Mercedes expects weak dollar and quality woes to cut profit, paper reports#1281691/13/05; 03:59:49


FRANKFURT- A weak dollar and the tackling of quality problems will eat into profits at DaimlerChrysler's Mercedes unit this year, Mercedes head Eckhard Cordes told German newspaper Financial Times Deutschland.

"We will do what is necessary to remove the quality problem. And that will also have an influence on the 2005 profit," Cordes was quoted as saying in Wednesday's edition.

The paper noted that the effects of a 500-million-euro cost cutting programme would not be fully seen this year.

To help counter the weakness of the dollar against the euro Mercedes plans to raise output at a site in Tuscaloosa in the United States and will double the number of employees at the site to 4,000 by 2006, the paper said.

Cordes said that he saw no more sense in hedging currency exposure at such high exchange rates, despite admitting that "the dollar is a problem for us."

To improve quality the company would replace defective parts even if the warranty had expired. "We want to make Mercedes number one in quality -- better than BMW, Audi or Lexus," Cordes said.

Daimler had warned in October that its quality drive would hurt earnings in 2004 and 2005, and to a lesser extent in 2006.
Cordes said that he saw no more sense in hedging currency exposure at such high exchange rates, despite admitting that "the dollar is a problem for us."

What Cordes really says is : we have to live permanently with a lower dollar.

Belgian@ 968 : Is gold losing the Midas touch ?#1281701/13/05; 07:35:34

The more I see this title popping up...the more I like it !
Madame Jessica (and tutti quanti-WGC)is getting increasingly worried. * THE (gold)) MARKET IS TOO ILLIQUID * !!! HEEEELLLLLLLPPPPPP...there's not enough gold !!!
Adorable !

Madame J. must find an answer...any answer...on the question, WHY THE GOLDPRICE ISN'T RISING (exploding)...under the evolving circumstances. Not, that she and her entourage have no idea about what is really happening...oh no,...on the contrary...she (they) see (feel)that gold doesn't need her (their) managerial "assistance" (?) anymore.

We all see the POG and the POO, second after second. Jessica & Co see that the "pricing" of oil and gold is taken out of their hands (power). Note and think about the difference between "a price" and "the pricing" (power or lack thereof)!

Oil-euro-gold, are increasingly becoming 3 hands on the same (wealth) belly ! Watch the daily price-ticks, between those 3 and suspect the "new" forming (building) pricing-power, behind the complex. An ever increasing sync (unison) effect is materializing.

Bear in mind that 85% of the US' dollar richness is in the hands of only 2% of its population. Together with Madame Jessica, the $-magnates watch the impossible materializing.
The Universal store of "Wealth"...becoming increasingly "illiquid"...almost unavailable under the much hated metal-form !!! The established paper-gold force is even losing its gold "pricing" power !!! Papergold is stealthly losing its former (artificial) "hedging" function !!! So, let's blaim it on the detoriation (?)(vulgarization) of the jewelry industry...right madame J.!?

The world's museums (CBs) keep on exchanging their unique wealth items (gold), whilst it is very possible that the amount of museum visitors (papergold hedgers) is declining. Does this mean that the museum treasures are losing "value" ? No it doesn't. But we are producing less unique and universally recognized valuables (goldmetal) and the museums (CBs) have but one way out, of the "illiquid" valuables (goldmetal).

There are two specific museums (ECB and BIS) that have a "strategic" plan with their unique collection (gold).
They planned to have their shared collection (gold) being hugely, explosively, to invite many new visitors (goldmetal buyers) with "open" doors (freegold) and no entrance fee (tax).
There IS a strategy...NOW... behind the immobilized goldprice. A new "pricing" power !!!

Oil is now "pricing" the dollar's worth versus the stable euro, wich has increasingly to be seen as the real (genuine) goldfriend ! Watch how the oilprice and €/$ exchange rate are "interfering", whilst the goldprice sticks to the euro-stability.

Note, that it is Euroland, that has become the biggest trading partner of China. Euroland has a trade surpluss !!!
The same trade-understanding is building with India.

In the mean time, on the geopolitical front, the arms' race is tipping, powerwise, towards the Orient.

The temporary depression of the goldprice is for "tactical" reasons. Not one single reason, but a multitude of seemingly opposing reasons. The price-depression is getting extremely visible and blatant ! That's worrying Jessica & Co. The paper-gold-machine is being neutralized...rendered futile. (cfr. Randy's explanations on USTB-30 yrs).

In the ongoing $-€ currency war, the generals have already taken the nescessary preparations to bring home the one and only wealth to be looted, goldmetal. The soldiers may grab anything, but the wealth. Let us not forget that beside the currency war, there is also an oil-war going on. This, whilst Jessica and the WGC are still busy with bringing gold's vulgarization (?) to the public's attention, once again. Jessica/WGC keeps on serving the ($) interests of the 2% ($) AA elite (?).
This whilst 2,5 Billion people will never, ever, consider gold as a vulgar metal !

The "large" amounts (tonnes) of goldmetal do still move unvisibly, and silently ! Impossible to track the bulk of these moves. No way to find out anything (characteristics) about these displacements. Jessica doesn't refer to anything as to judge on the liquidity or illiquidity of goldmetal. Jessica is not a fish in the Chinese bowl ! Here "hopes" are not mine.

The total amount of gold (above/underground) at today's ridicule prices, is NOT AT ALL reflecting this earthly patato's total "wealth". We don't need "more" gold...we need a system (regime) that allows gold to reflect (represent) the globe's total wealth. Jessica and Co, hope for more available gold under the same papergold regime as to continue to serve the ($)ruling minority's agenda(s).

A Rubens painting, the Mona Lisa, Unique pieces of antique, historical buildings, and many other ever valuable "wealth" tangibles, don't bother about the evolution of any credit fiat. Real valuable wealth items, always freely and independantly, name "their" price, when the time for exchange has come. Valuables are to be exchanged under their own regime of "real for real" ! Whatever the liquidity situation is or isn't. Think about the (forgotten) US' "custodial" gold in this context ! There comes a time that the wealth holders "must" deliver. In a war, the wealth is looted by the generals and the worthless paper (stocks, bonds, fiat) is sticked to the ignorant soldiers.

The goldmetal market is illiquid, because the decreasing amount of available gold, for real exchange (re-distribution) is facing an immension ocean of dollar-paper that is in the process of heavy (hard) "questioning". Paper (Trillions) that is losing its credibility versus that very little amount of ridicule priced goldmetal. Imagine we all start to bid for the Mona Lisa...the real one, not the copies of course.

968, I like the Reuters' article and your provocative questions on it.J. Cross gives evidence that she knows what's going on : snip >>> "Hopes" that China will buy to diversify its foreign reserves are misguided, she added. The market is too illiquid.>>>
Cross (& Co) speaks as if the BIS (THE goldstore) is a doughnut store (frituur). She's panicking, 968 !
Trichet (Frankfurt) : Sharp euro moves are unwelcome/undesirable ! Forget about deficit spending. Yes to structural reforms as to obtain genuine growth. A stable euro...needs a stable goldprice, a stable change in exchange rate and price inflation. Cross confounds this with an illiquid goldmarket and hopes that for this reason, China can not be pulled into the euro (concept) camp. Hopes...!?

What bothers me, is that the oil-wars are making the oilpricers nervous and that they are forcing the euro to follow oil at a too fast pace. Rising the oilprice, forces the euro to rise its €/$ exchange rate for stability (price-inflation) reasons. And the € needs oil in its ambition of future reserve currency. A too rapid declining dollar exchange rate would inevitably provoke devastating IRs rises and suffocate the slow/slowing global economy. ect...etc...

The classic goldprice watchers conveniently ignore the "changing" goldpricing (goldprice management). They do the same with oil as to continue to mislead the general public. That's why they have to "neutralize" the China factor, after they took Japan from the gold playing field. Japan should not participate in the new building gold-regime and must rather start to participate in the Asian arms race !

Next G-7 will be held in the UK and the ECB will be urged (again) to embark on AA-like "deficit-spending" !
Buying gold visibly in the open...raise the price of gold and consequently lower the dollar exchange rate (+ purchasing power) is not on the order of the day...for the time being. Remember that the dollar management is now supposed to keep going it alone, without making the road bumpy by inappropiate action. Trichet encourages Snow with his good intentions (smile, now). The currency and oil wars must happen (evolve) with as few (visible) uppercuts as possible. I doubt that 2005 can remain as calm as they are wishing it to be.

Thanks 968.

2023Oil prices are moving up again#1281711/13/05; 09:20:45

Crude is over $46 / bbl again. Due to weaker UD$ ?? Look for much higher inflation in the USA.
bill27tsunami relief#1281721/13/05; 10:02:13

Or stated another way 350 million dollars is what we (The United States)GIVE to Puerto Rico each and every FIVE DAYS.
BelgianOil is doing it, again....#1281731/13/05; 10:45:53

After Trichet said, he was rather reservedly confident about price-inflation being under control, the euro weakened a bit. Then oil comes in and prices 3,8% (!!!) higher ($48 +). Now the euro must (should) act on its exchange rate.
OPEC meets at the end of this month.

RimhMonthly Trade Deficit#1281741/13/05; 11:02:42

To break it down, the US now has 2 billion leaving DAILY. What shocked me most about this was how short a time ago it was only 1 billion daily (approx. 2 years?) so this problem really is going up exponentially! Something's gotta give soon because this is really a huge "con"fidence job that is going to fail, and fail spectacularly.....

While all is tranquil and peaceful on the surface, there must be tremendous activity behind the scenes to keep it that way until this thing breaks. I feel a real sense of urgency now, more so than the last few years, that we may be getting close to a breaking point. I don't know why other than the subtle signs in the mainstream media that things are starting to fall apart. The falling US dollar is also a clear sign that other countries are concerned too. TC's comments on the shortening of the maturity dates on T-bills and bonds is another sign.

Sorry if this sounds real alarmist, I know it could stay calm a lot longer than I think. But for all you newbies who haven't acquired any real gold or silver, please do so now for the protection of your wealth, no matter how limited it may seem!

PanTHAT US$49.8 Billion will only buy a little over 200 million Baht of 0.965 Yellow !!#1281751/13/05; 11:24:30

Sir Gandalf the White

As a "gift" of former CB administrations most of the official ca. 80 t Thai GOLD reserves are "gone". Loaned out, swapped out or whatsoever. I hope the taksin governement will seek refuge also from paper Gold to the original real stuff again.

USAGOLD / Centennial Precious Metals, Inc.Be a student of history; not a victim. Choose gold.#1281761/13/05; 11:24:47

Golden Goal

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

-- R. Strauss

TownCrierHistory's Acanthus Leaves#1281791/13/05; 11:52:52

These graceful curls, carved at the top
of history-stained columns, and shouldering
the bullet-pocked lintels of empire,
cup not light, but the shadows of events,
two thousand years of smoke and iron.

Nor are the leaves green, though the carvers tried
for the sweet, eternal promise of nature.
Instead of a breeze, their chipped leaves hold
in their veiny old hands the dust of parades
and the soot from cold victory fires.

-- Ted Kooser


Where Empire oft falls short of its ambitious design,
and decays over long years a dusty corpse of stone
as the only testament to its once grand promise,
should a treasure box be unearthed at its quiet heart
the gold therein will pulse anew with all vibrancy of modern life.

-- R.

contrariantom calandra settles with SEC#1281801/13/05; 12:07:50

In case nobody noticed, Tom Calandra, of the former CBS Marketwatch Gold newsletter, settled pumping and dumping charges brought by SEC...paying $416K in illegal trading profits and $125K civil penalty.

I remember the pushy ads on the CBS Marketwatch Web site urging readers to sign up for the newsletter.

Apparently he's also one of the founders of CBS Marketwatch.

Shows you have to be wary of these newsletter editors who purport to recommend gold stocks.

TownCrierFederal Reserve injects fresh $10 billion to money supply#1281811/13/05; 12:11:36

Much provided as softly as 2.15 percent, in easy disregard of the FOMC's more (ahem) "hawkish" public policy target of 2.25 percent.

Fed action speaks louder than words; we have a very easy money policy. Now is the time for you to take action. Choose gold.

Call USAGOLD-Centennial at 1-800-869-5115 (ext.100) and ask to speak with MK, George, Jonathan or Marie about gold ownership as part of a diversification strategy that's right for you.


2023@Belgian#1281821/13/05; 12:28:33

You have given us a teriffic response to Miss Jessica in "Is gold losing the Midas touch" article. Facinating to watch the gold - euro - oil movements here in the USA.

In the article, Mr Gerbino's statements were interesting:
"Gold is going to go up 2-4 percent per year," said Ken Gerbino, fund manager of the Kenneth J. Gerbino Company.
Over the next 10 years the price will rise to around $625 an ounce, Gerbino, who runs a $3 million fund which invests in gold-related stocks told Reuters at the Stockholm conference.
The dollar will be a key factor in whether gold can maintain its momentum. Faced with a long-term decline in the greenback, Europe is likely to pump money into its economy making gold an attractive inflation hedge.
"The dollar is going to hell in a hand basket," Gerbino said. "There is a global syndrome to follow the U.S. into deficits and more paper money and this is going to create a huge amount of inflation down the street."
Worldwide money printing chasing physical and Gerbino only sees $625 in the next 10 years for gold....hmmmmm.....

Federal_ReservesGlobalism on Trial.#1281831/13/05; 13:33:16

The monthly trade deficit is a cancer growing on globalism. It appears the global system is unbalanced and growing
ever more so. Globalism is on trial now. Case in point, WalMart (WMT), aka ChinaMart, is under attack. Today they had to announce a publicity program to help bloster their image. Some believe WMT is a great thing, keeping prices low. Others believe it exploits workers and suppliers and is a front organization for communist producers who are ravaging the industrial sector of the USA causing the trade deficit. In the late 80's,and early 90's WMT image was pristine and they promoted "buy american", then Sam Walton died in 1992, and the greedy money grubbers took over.

Today the imagine has been soiled, an the owners must spend millions to repair it.

USAGOLD Daily Market ReportPage Update!#1281841/13/05; 14:42:53">
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.

Thursday market excerpts

U.S. gold futures drifted lower on Thursday as the dollar inched up after a double dose of U.S. economic data that, on balance, pointed to less economic strength than forecast, dealers said.

The dollar was moderately higher after December U.S. retail sales were reported to have risen 1.2 percent, higher than economists' forecasts for up 1.0 percent. But excluding autos, sales rose 0.3 percent, undershooting forecasts for up 0.4 percent. Jobless claims for the latest week were 367,000, above economists' expectations for 340,000.

Gold prices initially fell overnight, after three straight days of gains, on profit-taking in Asia.

Its next move was seen linked to the euro/dollar's moves, players said, with trade expected to be thin before a U.S. holiday weekend. New York metals will shut early at around 1200 EST on Friday and will stay closed on Monday for Martin Luther King Jr. Day.

COMEX February gold lost $1.50 to end at $425.10 after trading from $427.30 to $423.60.

Analysts said gold traders were now focused on Friday's U.S. Producer Price Index for December, which is expected down 0.1 percent.

Consultancy GFMS said gold should recover from a choppy start to 2005 to average $447 in the first half of the year, as renewed fund and speculative buying emerge in the market.

Merrill Lynch said in a report that gold has been pushed lower by weaker fabrication demand since Christmas and by a cutback in speculative interest recently, in addition to a recently stronger dollar.

However, based on two factors, including Merrill's view that the euro will strengthen to $1.39 by May and stronger fabrication demand will emerge in the Indian wedding season (March to May), the firm forecast gold would top $450 over the next several months.

----(see url for 24-hr international economics newswire)----

ECB to report 2004 budget loss due to dollar drop-- Reuters

U.S. powerless to dollar's plunge?-- CNNmoney - International

World needs more flexible currency regime - Fed's Geithner -- Reuters

Bank of Canada says worried by high oil prices -- Reuters

ECB Keeps Rate at 2% as Oil Damps Inflation -- Bloomberg

ECB signals in no hurry to tighten interest rates-- UBS Warburg

Yen gains on ECB's Trichet urging Asia flexibility -- Reuters

Issing Says ECB Communicates Effectively With Markets-- Nasdaq - Global Markets

TownCrierCurrencies not flexible, not free#1281851/13/05; 14:51:39

HEADLINE: World needs more flexible currency regime-Geithner

NEW YORK, Jan 13 (Reuters) - The world, and particularly Asia, needs to move toward a regime of greater currency flexibility, New York Fed President Timothy Geithner said on Thursday.

Geithner said the present international monetary system had an uncomfortable disparity in the extent to which real effective exchange rates varied across regions.

"Policy makers in Asia are well aware of the complications and costs involved in sustaining their current regimes," he said.

----(artcile at url)----

And policy makers elsewhere, too.

Geither advocates "handling with care". Transitions, to be smooth, are mostly a matter of time (and paradoxically of INCREASED control as the process tends to want to accelerate at the "point of no return"). Choose gold as the temporary opportunity of super-controlled low prices is at hand.


TownCrierECB may surely strive to limit this political currency exposure#1281861/13/05; 15:00:15§ion=investing

HEADLINE: ECB to report 2004 budget loss due to dollar drop

FRANKFURT, Jan 13 (Reuters) - The European Central Bank will post a 2004 budget loss for the second year in a row due to the U.S. dollar's decline against the euro, the ECB Vice President Lucas Papademos said on Thursday.

Papademos said at the ECB's news monthly conference that the bulk of the central bank's foreign exchange reserves are held in dollars. The U.S. currency has lost about 7 percent of its value against the euro in the past year.

This development would be similar to 2003, when the ECB made a net loss of 477 million euros... The euro's gain against the dollar in 2004 compared with a gain of over 20 percent the year before.

The central bank's policymaking Governing Council decided to offset the 2003 loss against the ECB's general reserve fund.

A net loss for the ECB in 2004 could have knock-on effects for the profits of national central banks in the euro area, which would have shared in any profit.

Germany's Bundesbank for example is expected to see almost no profit in 2004 and would therefore not be in a position to transfer some 2 billion euros that Finance Minister Hans Eichel has penciled into this year's federal budget.

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

The longer the market valuation of gold is kept under unfree control (see previous post) for a smoothest possible transition, the benefits of gold reserves are not fully available and accruable to the general reserve fund to mitigate foreign currency losses.

Matter of time.


TownCrierOne especially for our Canadian clientele#1281871/13/05; 15:14:01

It was a day made in heaven for gold buffs yesterday. No sooner did Washington announce the U.S. trade deficit soared to a record high of $60.3 billion US in November, then gold prices took off.

So too did our loonie, which closed up 1.21 cents US to 83.31 cents US, while Canada reported a near-record trade surplus.

...The shocking news that November's trade deficit was $6 billion US higher than Wall Street's expectation of $54 billion US sent the dollar tumbling to five-week lows.


Currency traders reported the Japanese were busy trying to bid the currency up.

"Today's (yesterday's) trade figures are a stark reminder of the structural deficiences of the U.S. economy and the reason for our negative dollar outlook for the year," said Ashraf Laidi, chief currency analyst at MG Financial in New York.

U.S. Treasury Secretary John Snow tried to spin the numbers, saying higher disposable income let U.S. consumers buy more foreign goods, and thus the bigger deficit.

...A rising Canadian dollar may reflect an improving standard of living and make imports cheaper, but it hurts exports, which fell to $34.7 billion in November, down 2.9%.

Bottom line is: A higher dollar dampens economic growth, but our biggest worry should be any collapse in the U.S. economy. Even if the U.S. sneezes, we catch pneumonia.

So take advantage of cheap lending rates to consolidate high-cost debt. Make your 2005 goal to be debt-free. And, maybe holding 10% of gold in your investment portfolio isn't such a bad idea. If anything, it may offer a bit of comfort in these uncertain times.

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

"Bottom line"? Hey... that's MY line.


John the JuteA Thousand Years of Inflation#1281881/13/05; 15:59:54

In the reign of Edgar the Peaceable, king of what was then called Engla-land, in the tenth century, the penny was fixed at one twentieth of an ounce of sterling silver. A thousand years later, up until 1947, a twentieth of an ounce was the amount of silver in a sixpence.

That's a debasement by a factor of only six in a thousand years! A thousand years in which each generation has grumbled that the King, Queen, Lord Protector or Parliament is debasing a once-proud currency. An average annual debasement of less than O.19% a year.

That's not bad.

Since 1947, the price of a twentieth of an ounce of silver has increased by a factor of 6.4. So in 58 years of stable democratic rule we have debased our currency more than in the previous thousand years of turbulence.

That's not good.

At this rate, how much shall we all debase our currencies over the next thousand years?

BelgianECB's budget loses due to dollar decline....#1281891/13/05; 16:20:19

What a nice "construction" to put some SPECIFIC pressure on the National Central Banks (ECBS), wich can be asked to contribute for covering the ECB's budget loses. If you, ( EMU National CBs), want future distribution of ECB profits... give the ECB the fulliest independance and 100% unconditional (political) support in the execution (management) of our (EMU) architecture ! Each and everyone has to put its own house in order (structural reforms) and stop making exceptional (monetary) demands à la carte. All must comply fully with the rules as you were teached by the former leading Bundesbank. No more CB gold-commitments !

Belgium has a balanced budget for the fifth year in a row and continues to decrease its National debt. Not bad for an open transit country under the present circumstances.

Let us check if the POO goes down (stabilizes) when the euro gains further in exchange rate ? Or...when the dollar resists declining, the POO rise will continue ?

Irak (?) decided to lower the already low oil exports by 10%. It will remain impossible to keep the pipelines permanently free from sabotage.
A lot is changing fast in the oil/gas rich Sumatra (Indonesia). Bear in mind that the global oilmarket is a 100% "supply" market ! Remember the importance of political styling of the competing settlement numeraires (fiats).
The notion of peak oil is being put into a new (global) context.

Thanks Randy (TC) for you relentless educational efforts. Much appreciated !

TownCrierTrans-Atlantic contrast#1281901/13/05; 16:50:53

Review this in light of the previously posted commentary on the Treasury's retirement of 30-yr bond financing.

ECB's Trichet in the Q&A session following the press conference of the Governing Council's policy meeting in which rates were left unchanged.

I do not want to repeat what I have said from time to time, but one has to understand that, by expressing our vigilance, we are permitting inflationary expectations to be anchored on a two-year, five-year, ten-year, twenty-year, thirty-year basis. I could see that for myself only a few days ago: one of the member countries of the Eurosystem issued securities on a thirty-two-year basis -- more than thirty years -- at an extraordinarily low level of interest rates.

And that is possible only if markets, if investors, if savers, believe in the capacity of the ECB to deliver a very low level of inflation over thirty-two years.

If they did not believe in this capacity, they would elevate the level of their inflationary expectations and we would immediately have medium- and long-term market interest rates that would be higher, or much higher, or much, much higher. And if you want to know what it could be like, you only have to look at what existed before the euro was set up.

TownCrierECB writing up and writing down gains and losses as the case may be#1281911/13/05; 17:16:21

We touched on this last week. Here it is covered today in the ECB press conference.

One to Professor Papademos because you answered a similar question last year, so maybe you will also this year. There was an article published in a famous German newspaper about a big loss recorded by the ECB last year of around €1 billion to €1.2 billion. Is this correct?

Vice President Papademos:
I should first say that the strengthening of the euro against the dollar has adversely affected the financial result of the ECB in the year 2004. And the reason is very simple: the bulk of our foreign exchange reserves are in dollars and when the euro appreciates relative to the dollar, the value in euro of the assets denominated in dollars declines, and we therefore have unrealised losses.

As you know, we follow a prudent accounting approach so that unrealised losses are recorded and reported as realised losses. So, it is correct that in the year 2004 the ECB will record a loss. However, we would like to communicate the magnitude when we have the final figures and when the time comes for approving the financial results of the ECB.

Will that be on 17 March?</span>

That is when the financial results will be approved by the Governing Council and they will be reported.

You said the bulk of your currency reserves are dollars? How much is that?

The composition of our foreign reserves we do not disclose.

The financial results will be disclosed when the time comes and when we have the full decision on the accounts.


TownCrier??? Transcription error?#1281921/13/05; 17:26:59

Mr President, are you embarrassed by the deep commercial balance deficit of the United States as shown yesterday and is it a signal that something must be done on the currency rate policy instead of leaving the currencies gold?

As far as the currencies are concerned, I have nothing to add. I will not comment on figures that are produced on a monthly basis. But we all agree that one of the risks at the global level in the economy is the constellation of imbalances. That's absolutely clear.

Gold ==> go?

Stay tuned for real gold...


TownCrierTrichet on gold#1281931/13/05; 17:36:18

Mr Trichet, what is your position on the fact that the German government tried – unsuccessfully – to push the Bundesbank to sell gold? The Bundesbank is a great player in the euro, and other central banks now have to [??] sell the gold that it could have sold. What do you think about this?

I would prefer the Bundesbank to communicate directly and, to my knowledge, they have done that.

As regards the Eurosystem and myself as President of the ECB, I would say that we have an accord which gives options for a number of signatories to sell gold. Of course, it has been made public, so you know that there is an accord.

You know who the signatories are: a number of central banks of the Eurosystem, the ECB itself and also other central banks which are not part of the Eurosystem, including those of Switzerland and Sweden.

Together, we signalled to the market that we would PERHAPS [emphasis added] sell gold under a certain ceiling over a period of five years.

We can, of course, within the framework of this accord, where we have internal arrangements, have one participant deciding not to use his option, in which case there is, of course, the possibility for the option to be utilised by others. But, to my knowledge, the Bundesbank has communicated on that. This will not change the overall option for sales of gold by the Bundesbank over the full period. So it is much more the possibility for arranging the timing. It is not for me but for Axel Weber to explain and I am, in any case, only quoting what he said to give you an overall understanding.

The ECB itself is also participating in this overall agreement. I note that the market has, thanks to this accord, a full understanding of the possible interaction between the central banks and the gold market, as far as the signatories are concerned. So this accord is important.

As you know, it started more than five years ago and we continue to have a very transparent, visible and predictable way of dealing with these gold sales.

You will note that less care (than seen here with gold) is brought forth in fostering any sort of halo around the much larger sized portfolio adjustments occuring with the Eurosystem's postion in foreign currency. The special status reserved for gold is palpable.


USAGOLD / Centennial Precious Metals, Inc.Request our free mailer to help you get your diversification strategy started on the right foot.#1281941/13/05; 17:45:56">Get a head start on the gold market!
Black BladeFools Rush In#1281951/13/05; 18:12:07


FDIC warns on home-equity lines

Easy credit raises fears of consumers getting overextended

Homeowners could run into financial hot water with today's new breed of home-equity lines of credit.

Lenders are making home-equity lines of credit easier to use. But the FDIC warns that this flexibility also could lead to trouble. Home-equity credit lines typically charge variable rates and most of the world currently expects interest rates to rise. Rising rates could spike increases in monthly payments and/or your loan balance as well as a drop in home values.

Bottom line: You could lose your home if you can't make payments.

Overdoing it on home-equity credit lines is getting easier. They now come with checks and credit cards. Lenders are expanding reward points, common on credit cards, to credit cards that access home-equity lines of credit. Some banks even are offering rewards to loan representatives if funds are drawn down within six months after a home-equity line is opened!

Black Blade: Many fools have been sucked in and many more will be in the future as well. Unfortunately many are finding out the hard way as foreclosures are now at 45-year highs and rising. Hard to feel sympathy though as it is simply foolish to put the family home at risk. As always, get out of debt and stay out of debt, stash several months emergency cash for household expenses, accumulate gold and Silver "portfolio insurance, and start a storage program of nonperishable food and basic necessities.

Black Blade9.0 on ungrateful scale #1281961/13/05; 22:42:55


Thanks for the help, but now get out, Indonesian veep tells U.S. soldiers

U.S. SH-60 Seahawk helicopter is mobbed by grateful Indonesians yesterday after its arrival with relief supplies in village of Tjalang, on island of Sumatra.


The Indonesian government yesterday showed its appreciation to U.S. soldiers who have been risking their lives helping tsunami victims by ordering them to get out of the country by the end of March.

Black Blade: I saw this coming a long way off. They and other nations in the region have ordered US and Israeli relief workers to get lost. Since these governments don't need our help or US dollars maybe it's time to help our friends and ourselve needy instead.

Dollar Bill.,.#1281971/14/05; 00:39:28

Greenspan putting a postive spin on what gives the globalization its legs. Another way to see it is that this is what is used to ruin free markets.
"Hedge funds are evolving from what they used to be, and their main evidence within financial markets is as arbitrageurs. They seek abnormal profits by trying to find niche abnormalities in the marketplace, which means prices are out of balance and therefore create the possibility of above average rates of return. But the actual exploitation of that imbalance eliminates it. And, indeed, one can see the huge amounts of funds that hedge funds have moved in and out of various markets – in and out of various instruments – which has kept the system fluid and flexible. And I would be most concerned if we were to lose the flexibility added by either of these major instruments – like Credit default swaps – or new institutions such as hedge funds."

TownCrierGold helps U.S. international trade balance, just barely#1281981/14/05; 01:01:14

In the trade data released Wednesday revealing a new record trade gap of $60.3 billion from preliminary data compiled for the month of November 2004 in which total imports outweighed exports, gold was one of our net exports.

On the month, the U.S. was a net exporter of $39 million in gold, a consistent pace with the cummulative YTD 11 months of the year in which a net $455 million in gold was exported.

One might think with the dollar under stress of depreciation that U.S. citizens would have turned into net gold importers (along with many other categories in a net import position) as a result of stepped up attempts to preserve their wealth, but while it is true that we have imported gold at a greater pace than in 2003, we remain no match for the greater appetite foreign interests have in gold for the same goal.

How much more gold would we be willing or able to export to balance our $60 billion monthly gap which is currently being filled with paper? At current prices, 4,391 tonnes would be required to flow abroad each month. The Treasury has only enough to get us through nearly two months; so in the interest of obtaining our larger share of the wealth of goods, it seems a good thing that our debt securities have not fallen out of favor as a means of payment on the balance. When will the world say enough is enough?


TownCrierMore on dollars, trade, and gold#1281991/14/05; 01:41:28

In light of the unlikelihood of balancing trade with U.S. gold transfers, and especially the impossibility of achieving balance under current valuations, a very interesting concept presents itself for your consideration. Gold need not actually flow from the U.S. to get the job done.

Instead, dollars paid abroad for our surplus of imported goods would be presented for "redemption" in gold at any of a number of foreign "free gold" markets. The same could be done with any other national currency in a condtion of balance of trade deficit.

The "balance" is achieved as the price of gold in those currencies would rise commensurate with the currencies' surplus. The bottom line in such an exchange regime is that the quantity of physical gold obtained -- through willing sellers of any private or national origin -- would at that market price become the equivalent value of the trade imbalance -- thus providing a universal means of measuring the real value of a nation's currency.


TopazNow That's an E'Quake. #1282001/14/05; 03:11:39

Interesting to hear Ms Jessica Cross coming out on Gold again. She's becoming quite the contrary indicator, which brings to mind one Marty Armstrong.
Mr Armstrong is incarserated for Contempt of Court (has been for 4.5 Yr's) and I believe his hearing kicks off in March. Good luck Marty ...what tales he could tell!
The same page as the Cross piece also had an article re: Mr Brown off to Africa. Now Gordon HATES travelling so it must be pretty serious...and it IS! Funding Aid's relief, so MrB's inspired thinking calls for existing relief funding to be "leveraged" to earn a better return on investment. Yup, that'll do it!
Basket price of Gold B349.95.

Clink!Tsunami aid - whose money is it anyway ?#1282011/14/05; 07:06:49

To add another angle to the discussion, the above link is to Ron Paul's take on governmental financial assistance in situations like this.


It's admirable that Americans have been so willing to open their hearts and pocketbooks for the victims of this enormous tragedy, but it's not the job of the federal government to make a show of generosity to the world with your tax dollars.

End snip.

There is another complication that is brought to light by Black Blade's post last night. On the face of it, it looks like the Indonesians are showing ingratitude. But the article goes on to mention :-

1/ Kalla's government also forced the Abraham Lincoln, from which Navy pilots have flown dozens of food supply missions to the hard-hit Aceh Province, to steam out of Indonesian waters because they refused to let U.S. pilots fly training missions in their air space.
(looks to me like the A.L. might have forced itself - I didn't see foreign civilians being asked to leave)

2/ Indonesia's new president, Susilo Bambang Yudhoyono, is a former general in a country that has been under martial law for much of its recent history.
(Could this be why Indonesia is a little uneasy about having a foreign military power probably greater than the entire Indonesian Air Force and Navy put together so close ? And do we know who has been financing and arming those rebels ?)

Lastly, what has NOT been said in the article is that the carrier group (about 30 ships in all, as I recall) along with six other carrier groups - ie half the US Navy - have been spending the last few months "showing the flag" in the region in an effort to counter China's influence, particularly concerning the mineral rights of a new oilfield. Way too much political baggage ! As Dr. Paul continues in his piece :-

"The whole enterprise of disaster aid has become one of the great rackets of modern government. Today we have the disgusting spectacle of senators and presidents coming to visit weather-injured places, as if they have within their capacity the ability to size up damage and make provisions for making it all correct. We are supposed to believe that they know more about the proper course of action than insurance adjusters and property owners."

Amen to that.
A Florida Resident Martin Armstrong.....#1282021/14/05; 08:45:44

The Tales he "WILL" tell...He's held back along time waiting for his day in Court...I imagine GATA will follow this Case with a "Magnifying Glass".....Link to Armstrong Stories.....
Liberty HeadGreat Post Clink!#1282031/14/05; 08:50:26

Ron Paul is the only legislator I have known that understands the proper role of government and has the spine to make principled stands in a room full of assorted maggots and amoeba.
He is the one guy that will ask Greenspan the tough questions.
He also understands the value and importance of possessing gold.

Best Wishes

YGMA Phone Call to The Fed....#1282041/14/05; 08:54:33

Interesting Phone call....YGM
Caradocprompted by Clink! and Topaz#1282051/14/05; 10:15:27

Clink!: Ron Paul's position on using tax dollars for charity echos the thoughts of Congressman Colonel Davy Crockett (see link above). Snip: "The power of collecting and disbursing money is the most dangerous power that can be entrusted to man, particularly under our system of collecting revenue...."

Topaz: By coincidence, Marty Armstrong's overall "confidence cycle" shows a major reversal -- running from 2005 to 2012 -- as having begun earlier this week. I wish Marty were available to address the implications (rather than sitting in jail for a 4th or 5th year without having been convicted of anything), but with no January effect apparent and with the DOW down this week, I suspect he'd say we're in for a rough 7.2 years.

Note that whether you're looking at the prospect of tough times or just the probability that your wealth will be taxed away in support of various worthy causes, the solution is the same: a stash of physical gold.

Couldn't find a link to Armstrong's zig-zaggy multi-decade chart so I'll have to prowl through some old hard drives. Meanwhile, I was surprised to discover that Google retains a modified version of an old USAF source selection training briefing that concludes by quoting both Crockett and Thomas Paine. Reversing the old "carrot and stick" approach, the previous chart first presents the "stick": a grainy photo of the federal prison at Ft. Leavenworth (improperly revealing proprietary/sensitive data is under 18 USC criminal rather than 10 USC administrative) before offering the "carrot": quotations from Crockett and Paine on how to do it right. Google link is


CaradocArmstrong's confidence model#1282061/14/05; 10:34:02

YGM: Thank you for the Armstrong link! With just a little digging from that point I found the multi-decade chart I was looking for (linked above). I take the lack of values on the Y axis -- or more properly the lack of a Y axis at all -- to mean that he peaks and vallies are not to scale; i.e., they simply show reversal of direction.

My memory was correct on only one thing: downturn reversal beginning 2 Jan 2005. But it doesn't run downhill until 2007, just until early 2006.


2023Real assets in USAToday article#1282071/14/05; 10:57:14

I read this interesting article today on real assets vs paper assets. Has quotes from Jim Rogers, Marc Faber.
ge10 Year Benchmark Government Bond Yields#1282081/14/05; 11:09:21

gePoole: 'Measured' pace of increases to end eventually#1282091/14/05; 11:48:56

"Federal Reserve policymakers aren't bound to the idea of implementing interest-rate hikes at what the central bank's called a "measured" pace, said William Poole, president of the St. Louis Federal Reserve Bank."

It is remarkable that the stock market holds after 5 consecutive rate hikes. What has happened to the old adage; "three raises and a stumble"?

Possibly, gold is expected to behave well during the stock market "correction".

Rimhre:ge#1282101/14/05; 12:42:57

Normally the market might stumble, but these are unusual times. With the Fed rate at just 2.25%, it is still in the "easy money" policy regime in order to aid the hoped-for economic recovery get legs. If the Fed has no choice but to raise rates faster to control a rapidly declining dollar, then I think you will see the wheels fall off the stack market. Everything done so far has been done at a "measured" pace and is well telegraphed to the market so as not to upset the applecart. The Dow represents the Fed's last hope at retaining some confidence in the economic policies for the populace, so Wall street is given the green light to "manage" it for the sake of the economy. Don't forget the P/E ratios for the Dow and Nasdaq are still way off the norm and far from fair value. And yet they still project a bull market ahead! The Dow's sideways waffling has no volatility so it is clearly being kept under tight control. Unfortunately, it will likely end badly and the average Joe will be left holding most of the bag.
Rimheasy money#1282111/14/05; 12:49:58

As a follow up, see TownCrier's posts recently about the new dollars being created by the Fed at below market rates (2.15% instead of 2.25%) in order (presumably) to give the Wall Street players a bit of arbitrage room. Why would any bank do that unless they were forced to for some reason?
USAGOLD / Centennial Precious Metals, Inc.... In Order to Form a More Perfect Union... (between You and Your Savings)#1282121/14/05; 12:52:09">Arm yourself with knowledge
USAGOLD Daily Market ReportPage Update!#1282131/14/05; 13:31:02">
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.

Friday market excerpts

Gold futures dulled Friday, but prices for the precious metal closed higher on the week as traders largely keyed off movements in the dollar after a slew of U.S. economic data.

For the week, the February gold contract finished higher by $3.50 an ounce, or 0.8 percent.

COMEX February gold closed at $423, down $2.10 for the session. Nymex trading closed early Friday, ahead of the Martin Luther King Jr. holiday to be observed on Monday. Regular trading will resume Tuesday.

The dollar continued higher after Friday's economic data painted a mixed picture. U.S. producer prices unexpectedly fell in December, while the nation's business inventories jumped 1 percent in November and industrial output came in better than expected last month.

A pledge by President Bush to tackle the country's deficits and hawkish comments by a Federal Reserve official also affected foreign-exchange trading.

The bigger picture for gold remains bright, with Ned Schmidt, editor of the Value View Gold Report, predicting that prices will eventually reach the much-anticipated $500-an-ounce level.

"[The] reality is 60 billion green pieces of paper raining down on the foreign-exchange markets each month, and the end of the run for the U.S. stock market," he said.

At the same time, it's a "delusion" for the market to be "expecting the U.S. economy to continue to grow on top of a housing bubble, a collapsing currency and silly expectations that something will be done about the U.S. government budget deficit," he said.

At the end of the year, "when gold is over $500, investors will wish they had gone with reality, and bought gold at current prices," he said.

-----(see url for 24-hr newswire, market prices)----


Further dollar falls needed-- FX Week

Treasurys Sink on Economic Data, Fed Speak-- Nasdaq - Global Markets

ECB's Trichet: Recent Euro-Dollar Movements Harm Growth-- Nasdaq - Global Markets

Low Inflation Data Help Stocks Recover in Midday Trade-- iWon

Don't Write Off Inflation Threat Yet-- The Street, Latest News

NYMEX crude ends higher as cold sparks buying -- Borsa Italiana - News

TownCrierDollar falls to 5-year low vs yen#1282141/14/05; 13:53:10

NEW YORK, Jan 14 (Reuters) - The dollar slumped to a five-year low at 101.80 yen on Friday, according to Reuters data, as the view spread in the market that Asian currencies need to share more of the burden of the dollar's decline, giving a boost to the yen.

This week several central bank officials have underscored the need for Asian currencies to appreciate further against the dollar to relieve pressure on European units.

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

Gold, too, can share the burden of the dollar's decline on a reserve-adjustment basis. As a political bonus for that avenue, Mother Nature's constituents won't protest over the conseqeuntial impact on trade position and export-sector employment.


TownCrierCleveland Fed has always been among the most candid#1282151/14/05; 14:26:27

HEADLINE: U.S. trade gap may hit growth, Cleveland Fed says

WASHINGTON, Jan 14 (Reuters) - America's huge trade deficit will eventually be reversed and implies a weaker dollar and higher interest rates, the Cleveland Fed said on Friday, warning this could quell growth unless U.S. exports grow.

The Cleveland Federal Reserve, writing in the January edition of its regular publication on the economy, noted that the country's trade gap had spiraled above 5 percent of gross domestic product and foreign claims on U.S. assets stood at 20 percent of GDP.

"Should these trends continue, it would be increasingly difficult to finance a continuously expanding net foreign debt," it said.

"History ... teaches us to expect that trade deficits of this magnitude will begin to reverse eventually, and that the reversal will probably be preceded by currency depreciation."

"All else equal, U.S. interest rates will tend to rise because funds are scarce and will restrain such interest-rate sensitive sectors as housing, durable goods, consumption and business investment," it said.

"If the adjustments proceed in an orderly way over an extended period, the reallocations can occur within the context of the other adjustments that take place in dynamic market systems and need not be especially disturbing," it said.

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

Through the transition you can take your chances and trade your portfolio in and out of peril (where one spectacularly bad call can erase a lifetime of achievement), or you can play it right down the middle with gold, choosing the one asset that central bankers themselves hold most dear. Call USAGOLD-Centennial today to speak with a broker about a gold investment strategy that's right for you. 1-800-869-5115


TownCrierEcon 101 Crib Sheet for Dollar, U.S. Trade Deficit#1282161/14/05; 15:04:54

NEW YORK (Reuters) -
...text-book theory holds that over time, a declining currency may actually worsen a country's trade deficit for the first year or two, before eventually narrowing it. But eventually higher import prices dampen demand for imports and lower export prices lead to higher exports, narrowing the deficit, the textbooks say.

Yet the latest trade figures show the dollar's steady three-year depreciation against a basket of major currencies has failed to prevent the U.S. trade deficit from ballooning to unprecedented levels.

The deficit -- the difference between what the country imported and exported -- swelled to a record $60.3 billion in November.

... the key to unlocking the U.S. trade problem: the Chinese yuan.

"It changes the picture: all kind of rules don't matter any more," Moricci said of the peg.

China's fixed exchange rate of around 8.28 yuan to the dollar, in place for almost a decade, is now perhaps the single most crucial element in the trade and economic relationship between the U.S., Asia and the rest of the world.

As the dollar has weakened, the yuan has followed lower against every other currency, keeping it competitively cheap and giving a huge boost to China's exports, a large chunk of which goes to the insatiable U.S. consumer.

the dollar inflows from these booming exports are huge. Add to this strong foreign direct investment inflows and it's easy to see why China's foreign exchange reserves soared to a whopping $610 billion at the end of last year, up $207 billion from a year earlier.

In order to maintain the currency peg and stave off upward pressure on the yuan, China recycles these billions of dollars into U.S. bonds. This helps keep long-term U.S. interest rates low, which in turn allows U.S. consumers to carry on borrowing money and sucking in imported goods, especially from China.

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

As China experiences a latter-day Industrial Revolution, with former self-sufficient(esque) farmers migrating to the cities and punching time clocks by the millions, the resulting economic benefits accrue to the world in approximately the following fashion.

Despite comparatively low wages, the average Chinese citizen now reaps the general effects of specialization within society. However, the relative lowness of wages and exportation of production (for a net gain in foreign paper compensation) means on average that the material benefits and physical comforts are accruing to the importing citizens elsewhere in the world, such as the USA.

From its government's perspective, the industrial revolution underway is a social phenomenon that requires careful domestic and international nurturing lest it collapse, bringing social unrest and starvation of millions within China's borders. To be sure, as soon as is practicable, China will surely insist on more tangibly balanced compensation for outflow of goods.

Choose gold before the dollar loses an important pillar of support.


Rimhre: China#1282171/14/05; 15:55:44

Thanks for the perspective, TC! How quickly we forget that our prosperity has come at a significant cost to others around the globe, others "just tryin' to make a livin'" like us!
TownCrierRimh, thanks#1282181/14/05; 16:52:29

I think the primary point from a diversification perspective is that we're enjoying a level of ease of and comfort from a dollar support mechanism that is only temporary in nature. It would not be fitting to bank on dollars as though this artificial condition were fundamentally secure. Instead, we should gravitate toward the natural stabilty of gold, and not only expext to merely preserve wealth but actually expect to build our wealth as conditions swing back toward a more natural balance.


YGMGlobalism in The Balance.....Cliff Droke.#1282191/14/05; 19:01:02

Along the lines of TC's Comments re: China....Very worthy Read!
mikalStartling perspective on oil#1282201/14/05; 20:15:24

India Daily – The coming oil crisis for India and the world due to Saudi instability - Staff Reporter - January 12, 2004
______________________________________________________ Posted by Jim Sinclair yesterday, how credible is this reporter's observations and outlook? IMO, very credible. One thing is sure, Iraq is eliciting an exponentially growing number of dire commentaries around the country and world.

mikalNYSE considers revenue options#1282211/14/05; 21:05:39

NYSE considers opening earlier - Andrei Postelnicu - January 14, 2005
NYSE revenue options include exchange traded funds, European listings, longer operating hours. Where there's smoke there's fire.

Black BladeGold gains for week despite Friday fall#1282221/14/05; 21:12:38{B20B2C1F-7DEB-4D70-8932-D3C2C32A6206}


Analyst touts $500 level; other metals tally weekly rise

SAN FRANCISCO (CBS.MW) -- Gold futures dulled Friday, sending key sector indexes broadly lower, but prices for the precious metal closed higher on the week as traders largely keyed off movements in the dollar after a slew of U.S. economic data.

"Gold is the victim of relative dollar strength and seems likely to test $418," said Kevin Kerr, president of Kerr Trading International. However, he believes gold is "finding support here and is unlikely to fall too much lower unless the dollar really finds legs and rallies hard."

The bigger picture for gold futures remains bright, with Ned Schmidt, editor of the Value View Gold Report, predicting that prices will eventually reach the much-anticipated $500-an-ounce level. "[The] reality is 60 billion green pieces of paper raining down on the foreign-exchange markets each month, and the end of the run for the U.S. stock market," he said. At the same time, it's a "delusion" for the market to be "expecting the U.S. economy to continue to grow on top of a housing bubble, a collapsing currency and silly expectations that something will be done about the U.S. government budget deficit," he said. At the end of the year, "when gold is over $500, investors will wish they had gone with reality, and bought gold at current prices," he said.

Black Blade: Pretty much so, but Gold remains well undervalued as it should be nearer to $650+/oz. Also, the US services foreign held debt at about $1.6 billion/day. With the US dollar under severe pressure from soaring budget and current account deficits, precious metals look well positioned as the very real threat of inflation/stagflation looms. Get prepared while you can.

mikalStraight talk on interest rates, currencies and bonds#1282231/14/05; 21:23:12

The dollar and the deficit
From The Economist Global Agenda - January 14, 2005

Great Albino BatDollar collapse#1282241/15/05; 01:54:06

In a radio interview yesterday, the Mexican Secretary of the Treasury, Mr. Francisco Gil D"az, stated that "a collapse of the dollar is possible".

The interview was shocked to hear this, and asked Mr. Gil D"az to please repeat what he had just said.

Mr. Gil D"az again said: "a collapse of the dollar is possible."


Liberty HeadBig Setback For Gold Next Week#1282251/15/05; 02:27:53

Associated Press
Trent L. Johnson, a custom hat maker, holds a hat band with an antique sterling silver buckle and a 14-carat gold "W" that will go on the cowboy hat President Bush will wear for his inauguration.

Some types of tarnish aren't so easy to remove.

Best Wishes

mikal@Liberty Head#1282261/15/05; 10:45:20

Re: "Big setback" cowboy headress
Hat's off to you for that link! Is there any chance that the hat will show up Dubya?
May a PM-laden hat just not fit right and stick out like a ten gallon hat on a lanky cowpoke!

mikalEarly Weekend Headline Roundup#1282271/15/05; 12:47:33

CNNfn- Bank profits on the rise Sat Jan 15, 2005 12:42 PM CNNfn- NYSE targets European trading Sat Jan 15, 2005 11:42 AM EST
Bloomberg-Financial- 10-Year Treasury Notes Rise for 1st Week in Five With Inflation Signs Low Sat Jan 15, 2005 10:42 AM EST
Chicago (IL) Tribune-Business* (Reg. Required)Boeing profits face big charges Sat Jan 15, 2005 10:42 AM EST
Bloomberg- FinancialDollar Drops 2.7 Percent Against Yen, Biggest Weekly Loss Since March 2004 Sat Jan 15, 2005 10:42 AM EST
CNNfn- Wal-Mart: Jan. sales to rise 2-4% Sat Jan 15, 2005 10:42 AM EST
Chicago (IL) Tribune-Business* (Reg. Required)Taiwan, China Agree to Lift Flight Ban Sat Jan 15, 2005 05:42 AM EST
Seattle (WA) Times-Business717 jet production finished Sat Jan 15, 2005 03:42 AM EST
Los Angeles (CA) Times-Business* (Reg. Required)Boeing Is Closing an Era in Aviation Sat Jan 15, 2005 03:42 AM EST
Los Angeles (CA) Times-Business* (Reg. Required)Series of Layoffs Begin at PeopleSoft Sat Jan 15, 2005 03:42 AM EST
Los Angeles (CA) Times-Business* (Reg. Required)State Posts Net Loss of Jobs in December Sat Jan 15, 2005 03:42 AM EST
Los Angeles (CA) Times-Business* (Reg. Required)Bay Area Grocery Chains Refuse to Extend Labor Pact Sat Jan 15, 2005 CBS Marketwatch- Yahoo message boards hit by outage- 1-14 CBS Marketwatch - Alcan warns of lower Q4 results -1-14 MSNBC- Business Ft: U.S. Mulls LosingÝVenezuelan Oil- 1-14

USAGOLD / Centennial Precious Metals, Inc.Always open.#1282281/15/05; 13:01:31">gold -- a global calling card
TownCrierHEADLINE: Gold set to shine#1282291/15/05; 13:20:24

Bloomberg January 16, 2005

Gold will this year reach its highest price since 1981 as a weakening US dollar boosts demand, according to Deutsche Bank.

It predicts gold will average $US458.80 ($A585.50) an ounce and jump to $US490.30 next year.

Gold's average price rose 13 per cent last year to almost $US410, for a third successive annual gain...

GFMS, a London-based precious-metals research group, predicts gold will rise to a 16-year high by July and average $US447 in the first half of the year...

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

Emphasis on AVERAGE price. For example, for every single day we spend here $35 below Deutsche Bank's $458 average forecast, the average could be attained by spending double the time $17.50 above (at $475.50) or matching day for day with the full $35 above at $493.

Buy now, smile now, smile later.


TownCrierArgentine Peso Rises After Central Bank Stops Buying Dollars#1282301/15/05; 13:32:17

Jan. 15 (Bloomberg) -- Argentina's peso rose to almost a six- month high this week as the central bank cut back its daily purchases of U.S. dollars to the least in a year.

The central bank, which normally buys and sells U.S. currency on a daily basis to keep the peso trading in a range of 2.95 to 3.0 per dollar, refrained from buying since Jan. 10, when it purchased $10 million. The bank bought an average of $48.2 million per day in the past month.
------(from url)-----

People often worry about the dollar's fate in the event that foreign central banks turn into sellers of dollar-based reserves. The prospect is even less sufferable because the dollar is in a situation to fall should these banks merely decide to stop adding to their dollar holdings -- an action which is politically a much more likely possibility from the outset.


SundeckW...."solid gold" and oil...#1282311/15/05; 14:52:16

Thanks Liberty Head for the "hat" post...the link you provide refers in one place to "solid gold" and in another place to "14-carat gold"...probably not surprising since my guess is that fewer than one person in a hundred would know that "solid gold" is 24-carat...

Why isn't W getting a real solid gold "W" on his hat band? One could speculate widely...but since I am a guest in this house, perhaps I won't. ;-)

Thanks Mikal for the assorted links...nice light reading on a Sunday morning (here).

On may be of interest to some that the Australian Financial Review devoted a major back-page (the second most important page after the front page) to an article on peak oil, showing the famous "Hubbert Curve" diagram centrally in vivid colour...

There were probably no surprises for most people here...just lots of emphasis on the importance of Saudi Arabia and its waning elephant oil fields on global supply...bringing the issue home to the local financial establishment. thing I did learn was that Gharwar was discovered in 1948, the year of my birth. Two great events in the one year! (Only kidding...really only one ;-) )

OK, that's it for now from this kid of the age of oil...



ToolieSnip: US Intelligence Report Sees Sharp Rise in Asian Influence#1282321/15/05; 15:07:11

Snip: A new forecast compiled by U.S. intelligence experts foresees China and India spearheading an expansion of Asian political and economic influence throughout the world. It also sees many Arab countries at a crossroads as globalization spreads.

The report, labeled "Mapping the Global Future," lays out a world 15 years from now in which the United States remains the dominant power, but faces increased competition from growing economic power in Asia and challenges from political Islam.

The long-range forecast was issued by the National Intelligence Council, or N.I.C., a kind of research organization for the head of the Central Intelligence Agency
The good news, Mr. Hutchings says, is that the report says while the threat of war remains, the likelihood of world conflict has receded to its lowest level in one hundred years.(end snip)

Our "leaders" are supposed to be advised by these folks as to how globalization will affect the world?
The CIA, NIC can't even predict the past... """"", the likelihood of world conflict has receded to its lowest level in one hundred years"""" Does anyone find comfort in the idea that the risk of "world conflict" is now lower than it was in WWI or WWII?

With this example of "intelligence" in mind, consider a call to CPM just in case.

Gandalf the WhiteThis US$ Chart shows that 0.80 (and lower) will be coming SOON !#1282331/15/05; 15:19:02

SOOOOOOOO, gather the YELLOW while you may !

mikal@Toolie#1282341/15/05; 16:55:11

Re: "National Intelligence Council" Good post and comments.
It sounds like they've co-opted the word council to lend dignity to the title, but it still sounds the same as CFR (Council on Foreign Relations), CIA and other shady, discredited entities. "Holding council" should be a phrase reserved for adults.
My comments yesterday @ another site on this article and it's assumptions follow. BTW I agree with your conclusion that the intelligence community can't predict the past just as wars 15 years down the road can't be discounted either. On "economic supremacy", I feel it generally will be spread more evenly between regions (including the ME).

"It's always interesting to hear about India and China, encouraging that more of their people will see a higher standard of living, etc. But will they ever be allowed to surpass the U.S. in "economic supremacy"?
There are at least several ways in which the U.S. can arbitrate equality instead:
*EU absorbs Ukraine, Russia and/or Great Britain, which competition counteracts Indian and Chinese economic opportunities and inroads in trade, investments and technological innovation, etc.
*Canada, Mexico, Central America and/or South America join U.S. as American Union (Either the AU or North Am. Union- NAU) to obtain similar competitive economies of scale and human and natural resources as the EU.
*Federal Reserve Bank merges with Bank of England and/or other G7 private banking entities to leverage current global finance positions, enable low-cost research and development funding in emerging technologies and energy, solidify economic advantage over debt-laden Chinese banks, etc."

Dollar Bill.,.#1282351/15/05; 17:38:26

The Cleveland Fed said this; courtesy of Town Crier.
"All else equal, U.S. interest rates will tend to rise because funds are scarce and will restrain such interest-rate sensitive sectors as housing, durable goods, consumption and business investment," it said.

"If the adjustments proceed in an orderly way over an extended period, the reallocations can occur within the context of the other adjustments that take place in dynamic market systems and need not be especially disturbing," it said.
WHo the hell are they kidding? All the families in AMerica that will be effected by the changes will certainly find "orderly adjustments" "especially disturbing"
These guys are brazenly only talking to finance guys. Finance guys are thier only constituents apparently.
All regular folk arent even in thier sights.
THAT is the attitude of the guys who will rule through the globalization power structure.
We are all just thier "associates"
Not global citizens, global "associates"
Big brother promises to be quite unconcerned about us. Listening to the fed discuss our livelihoods is very telling.

NedSay what?#1282361/15/05; 18:31:56

"The report, labeled "Mapping the Global Future," lays out a world 15 years from now in which the United States remains the dominant power, but faces increased competition from growing economic power in Asia and challenges from political Islam."

With Bush's theatrics we'll be lucky if the planet still exists 15 years from now.

Anyone watch the Barbara Walters interview last night......difficult to watch. One gets emotionally tangled up watching him get metally tangled up. Mr. Bush jokes at the wrong time, he laughs at the wrong time, he scoffs and squirms, he's uncomfortable talking about what he's doing, what his government is doing. There's no natural flow to his conversation, things are forced, awkward.....strange. Just finished Michael Klare's new book "Blood and Oil, the current energy policies adopted by the US administration is on a crash course with the world....and much, much sooner than 15 years.

Here's a beauty thread to check. Try the link and go to "Stratfor analysis - oil production"

Ag Mountain@Ned#1282371/15/05; 18:59:38

With your political theatrics we'll be lucky if this forum still exists 15 days from now.
mikal@Ned, AgMountain#1282381/15/05; 20:05:01

Ned- Thanks for the link and excellent post.
Ag Mountain- Re: "With your political theatrics we'll be lucky if this forum exists in 15 days"- Not likely.
I appreciate posts like Ned's because, despite inevitable political affiliations, the topic demands attention especially the kind Ned gives here regularly! And if you read newspapers you'll find that most of them are still not averse to editorials and cartoons that satirize political or public figures and current events.

Black BladeThe Wealth of Nations - Greenspan#1282391/15/05; 23:03:34


The facts are grim enough. Last week brought figures showing that America's trade deficit soared to an all-time high of $60.3bn in November, putting the world's biggest economy on course for a record annual trade deficit of more than $600bn when figures are released next month.

The latest deterioration - up 7.7% on the previous month and significantly higher than expected - reflects record levels for imports of everything from oil and consumer goods to farm products. The largest deficit is on China trade ($16.6bn). US exports overall suffered a setback, falling 2.3% in November, while imports rose 1.3% to an all-time high of $156bn. This was driven by a near 12% jump in petroleum products, which hit a new monthly record of $19.4bn.

The upside of this deficit is that it reflects a stronger than expected performance of the US economy in the face of geo-political worries and the surge in oil prices. But what now dismays analysts is not so much the size of this deficit but that it is persisting despite the sharp fall in the dollar over the past two years. This threatens a dollar crisis and further slump if foreigners decide they no longer want to hold the currency.

Almost everyone is agreed the situation is unsustainable. America cannot go on running up an ever-larger trade deficit without risking a dollar free-fall. To prevent that possibility may now take higher interest rates for longer than would otherwise have been the case.

Black Blade: Interesting take. The article states the obvious of course. The soaring twin deficits are clearly unsustainable as I and others have pointed out for the last few years. Now there is more talk of a real estate bubble collapse too. We had a huge loss of wealth when millions of Americans lost their live savings in the "New Economy" stock market. Now the threat is that of declining real estate value concurrent with a rapid decline of the US dollar. A sort of double whammy on those who can least afford it. Get prepared and free yourselves of debt and get PM portfolio insurance. The clock is running - tic toc tic toc...

Black BladeForehead ad auction hits $30,000 #1282411/16/05; 00:15:54


Andrew Fischer will use the money for college
A US man auctioning advert space on his forehead has received more than 100 bids and an offer of $30,000. Andrew Fischer, from Omaha, Nebraska, has pledged to have a non-permanent logo or brand name of the winning bid tattooed on his head for 30 days.

"The way I see it I'm selling something I already own; after 30 days I get it back," he told the BBC Today programme. The ebay online auction ended on Friday. Mr Fischer, 20, has said he will use the money to pay for college. "The winner will be able to send me a tattoo or have me go to a tattoo parlour and get a temporary ink tattoo on my forehead and this will be something they choose, a company name or domain name, perhaps their logo," he told the Radio 4 programme.

Mr Fischer said that while he would accept any brand name or logo, "I wouldn't go around with a swastika or anything racial". He added: "I wouldn't go around with 666, the mark of the beast.

Black Blade: OK, so it's late and maybe we need a bit of humor. It's just a sign of the times perhaps or maybe a "Golden" opportunity. I still remember the guy who tried to sell his soul on ebay. ;-)

YGMGLD....ETF....Not for the Financial Safety of Individuals........#1282421/16/05; 00:24:41

but for the continued safety of those who do not want the Physical Offtake of Real Gold to continue and all the ramifications that would pose in the not so distant future....To my study of this Paper Tiger ETF it shows a last ditch effort by those who need to keep Physical Gold from becoming the Monster Short Squeeze of all recorded history...The more Physical we buy, the tighter the noose becomes...NO, nothing can convince me the GLD has transparency nor credibility...Coin or Bar in hand and stand back for the final showdown in years ahead....YGM
Black BladeGold ETF continues to shine#1282431/16/05; 00:24:51

Assets near $2B as fund adds 47 tonnes to holdings


BOSTON (CBS.MW) -- After quickly gathering $1 billion in assets during its hot mid-November launch, an exchange-traded fund investing in gold bullion is set to double that total.

Black Blade: In case anyone is interested. Personally I prefer the real deal in hand. Still it is interesting that the ETF appears to have legs.

YGMBlack Blade................#1282441/16/05; 00:29:19

No wonder the paper pushers have no end to fools for their latest schemes to fleece the sheeple....Buying cheese sandwiches w/ the face of Christ and Ghost's canes and other nonsense on ebay shows the mentality of many and the abundance of "Airy Nothings".....YGM
Black BladeBullion expected to have big rally in 2005 - Rehash!!!#1282451/16/05; 00:39:10


$447 an ounce average predicted

Gold is expected to bounce back from recent setbacks and show "renewed market vigour" in 2005, consulting firm GFMS Ltd. said yesterday. GFMS expects the precious metal to rally over a 16-year high of $454.20 (U.S.) an ounce reached in early December and notch an average price of just below $450 an ounce for the first half of the year.

"We're not expecting to beat the 1988 high [of] $483.90," GFMS spokesman Bruce Alway said yesterday at a seminar in Toronto. "But the recovery should be strong enough to give us a first-half average around $447." U.S.-dollar-denominated gold prices have been rising since 2001 and went up by about five per cent last year, driven primarily by weakness in the greenback, which is coming under pressure due to record deficits in the U.S.

Jewellery making -- which typically accounts for well over half of gold fabrication in any given year, with dentistry and electronics comprising the remainder -- rose by 4 per cent last year, GFMS said. GFMS predicts that investment demand, rather than jewellery fabrication, will be the prime driver for a price rally in 2005 -- even though total investment demand slipped last year, when conditions for gold were seen by most to be at the most bullish in years.

Mine production dropped by just over 110 tonnes or four per cent last year, the firm said, the biggest drop since the 1940s. Producer "dehedging" -- or unwinding forward sales agreements -- accounted for a sizable chunk of demand last year, GFMS reported. Dehedging is estimated to have jumped by 52 per cent to more than 400 tonnes last year, the firm said.

Black Blade: And so it goes. Dehedging will continue because the major players are under water at this point and some even face the prospect of bankruptcy. As a result of little to no exploration, mine production is falling and will continue to do so for several years because it takes a minumum of 5-7 years to start a mine once approved (the operative words here - "once approved"). The USD will continue to fall off a cliff as the pressure from the twin deficits are overwhelming and clearly unsustainable (certainly without a strong inflationary reaction). And finally, with deceased supply comes increased demand for the rare precious metal. In short - the fundamentals remain quite strong for Gold and Silver. Get yours while at bargain prices - check out the Treasury at the Castle. For those on limited budgets maybe a periodic purchase through "dollar cost averaging'. Tic Toc Tic Toc....

Black BladeRe: YGM#1282461/16/05; 00:42:57

Perhaps these are acts of desperation or maybe we trully do live in "interesting times". There are a lot of gullible people and fools who are easily parted from their money. ;-)

- Black Blade

AristotleYGM -- "Airy nothings"#1282471/16/05; 00:48:12

Howzabout remindin' Black Blade's audience where the 47 tonnes (54 tonnes pre-Christmas) came from.

One coin in two pockets is pretty dang "airy" if you ask me.

Gold. Get you some. --- Not-"Ari"

Black BladeU.S. Mint Declares War On Phony Coins#1282481/16/05; 00:50:12


Many of those "commemorative" coins you see advertised on TV or in print are, in a manner of speaking, fool's gold, not the rare or official collector's items their advertisers claim them to be. For example, one "commemorative" set consisted of nothing more than colorized silver dollars.

U.S. Mint director Henrietta Holsman Fore said tens of millions of dollars are spent on bogus coins because of misleading ads, and an unsettling number of customers are deceived if a company uses the Mint's name to promote its products.

The Mint is seeking the authority to fine the scam artists $5,000 for each print ad and $25,000 for each broadcast commercial that misuses the name or emblems of the Mint or the U.S. Treasury.

Black Blade: The "real deal" can be found here in the treasury at the USAGOLD Castle.

geComstock Partners, Secular Bear Markets and the Presidential Cycle#1282491/16/05; 02:43:04

* "As of December 31 the counter-trend move was 26 months old, which is about as long these things generally go."

* "Little notice has been given to the fact that 2004 marked the third consecutive year that the annual market high was lower than the high made four years earlier, an event that never occurs in secular bull markets. In fact, even single years ending with a lower peak than four years ago happen only in bear markets."

* "Another feature of past markets is that they have generally registered most of their gains in the last two years of presidential terms, and have tended to run into trouble in the first two years. This makes a lot of sense since various administrations have usually doled out the distasteful medicine in the first two years, and then tried to pump up the economy and markets in the last two."

* "...our assumption that we are in a secular bear will only be definitively established too late for most to avoid it..."

* "We are aware that the majority believes otherwise, but that is always the way it is at times of maximum vulnerability."

NedMikal, Ag Mountain, All#1282501/16/05; 05:20:28


Thank you very much.

Ag Mountain,

I'm one of those guys that truely believes that a person deserves a fair shot at life regardless whether he is from the Unites States of America or the smallest country in North Africa. We are all born equal and we all die equal so why can't we be treated equally (or at least fairly) in between?

Please tell me why a 6 year old Iraqi child gets shot in the head so that Mr. Bush can secure oil in the "nations security interests" under the pretense of WMD and/or democracy in Iraq?

If that question is politically motivated as you challenge then maybe Ari's question 2 or 3 years ago is an easier one to answer:

In terms of oil, "....MAYBE WE COULD JUST BUY IT....." (my emphasis).

Is Ari's question political. You bet: oil=gold=politics.

Here's another: "Yellow gold replaces black gold". Guess who is the esteemed inventor of that brilliant, 'tell-all' phrase?

Ms. Walters asked Mr. Bush about the termination on the part of the U.S. in looking for WMD. In case some have not heard, the offical search for WMD in Iraq has been called off. Mr. Bush was unable to answer the question (or at lease unable to answer it from my point of view).


Just like the metal I have no political association of affiliation. Just like the metal, I represent no country, I am free. No political ruler, president or king, aspires to me.

I do not dislike any American, in fact I have friends and relatives in America. I have business associates in the U.S. I visit and occasionally vacation in the U.S. The US people are friendly and forthcoming.

I do not dislike Mr. Bush, I think he's a dangerous man. I think he believes that he has a 'god-given' right to the oil in the M.E. If the oil in Saudi is to be sold, I think he believes he is the rightful and lawful first buyer of choice. I can't imagine what Mr. Bush would do if he was told he was to pay for his oil in Euros or worse he wasn't allowed to buy any of the oil.

The world, as a whole, believes Mr. Bush made a mistake in Iraq. This becomes clearer by the day. This is costing everyday Americans through the nose. Mr. Bush and his hawks refuse to admit this mistake. Be a real man Mr. Bush. Call it off, something very, very ugly is going to happen. Remember this quote from the recent past, "..even your father had the common sense not to go into Iraq....."

Here's a snip from Michael Klares new book: Blood and Oil:

"The Bush administration commensed its spring 2001 review of energy policy at a critical juncture in American history. We had just passed the 50 percent mark in our reliance on imported petroleum and were headed towards even greater dependance in the future. And although 9/11 was still several months away, it was obvious to anyone who looked that resentment of America's conspicuous presence in the oil-producing regions of the Middle East was building towards an explosion. The administration's National Energy Policy Development Group fully acknowledged these ominous trends. But when the moment of truth finally arrived, the group took the cowards way out, clinging to the status quo rather than accepting responsibility for leading the nation in a new and, undeniably, challenging direction. As a result, we have become even MORE deeply entangled in overseas oil conflicts and have lost precious time in devising a forward-looking energy strategy."

(Thanks to Mr. Klare: Blood and Oil 2004)

So here is the punch line, "when the moment of truth finally arrived, the group took the cowards way out, clinging to the status quo............. we have become even MORE deeply entangled in overseas oil conflicts..."

"...maybe we could just buy it....." Thanks Ari.

That's the reason why I buy physical, the REAL THING!!

YGMAristotle...#1282511/16/05; 11:56:43

I don't know who follows who's posts..All I know is paper is paper, is paper, and I'm into Physical Gold....But I am curently making $$ in Moly Jr.(up over 240%) to buy more Gold...Let those who want paper Gold do so...I care not for anything but the REAL thing...Always have & Always will...YGM
Ag Mountain@Ned, politics#1282521/16/05; 13:09:01

OK, everything cn be labeled politics these days, but if you can't tell the difference on your own between Aristotle's kind of political message and your kind this probably won't get through to you but I'll try. His messages are always about POLICY. He doesn't water down the relevance by throwing buckets at a PERSONALITY as if it mattered one way or the other. Leaders have always come and gone through the revolving door of history and most of us have figured out that in the final analysis the personality is usually way less important than the circumstances and regime that provided the desk or throne where they sit. Try hard to get this or else you'll just waste more time spinning your wheels on personality and the only thing that'll come of it is alienation. You have to get to the real root of policy to score any points because only the most egomaniacal child would think it comes down to somebody's personality.
mikalFiguring out the American figurehead #1282531/16/05; 13:45:30


Bush is facing a daunting list of challenges
By Tom Raum - The Associated Press - January 16, 2005
Excerpt: "WASHINGTON — The list of major challenges confronting President Bush as he prepares to take the oath of office for the second time is exhausting.
Iraqi elections at month's end. The fight against terrorism. An overhaul of Social Security. Just to name a few.
"I'm rested and ready to continue to be your president," Bush likes to tell audiences.
Are his goals too ambitious?
Even some Republicans wonder, given that the president, whose inauguration is Thursday, has just a year or so before he effectively becomes a lame duck. By Bush's own account, he has 18 months to move his agenda through Congress.
That does not take into account unexpected crises, or the firestorm that would consume time and political capital should the opportunity arise for Bush to fill Supreme Court vacancies.
Bush's plans could "encounter a fairly substantial wall of opposition, both from the Democrats and from the circumstances he faces when he takes his hand off the Bible," said Ross Baker, a political-science professor at Rutgers University."

YGMPolitics....Not to Be Critical......#1282541/16/05; 14:53:45

...cause even I get off topic now and again but I find I have to wade thru more and more political BushWacking stuff of late to get to Gold related reading material here...Politics I can read on my other Links and like Religion are Highly Personal and are topics of great passion....
I for one would like to see less of it...FWIW...YGM

KiloI echo YGM's comment below#1282551/16/05; 16:05:13

More and more we seem to be seeing non metals related posts about politics, oil, gas, religion, and what have you, on this "gold" forum and other "PM" forums. As others, if that was of interest, that is what I would be seeking out in their place. Don't get me wrong, there are times when "other" topics tie directly into the world of gold and metals investing, but for the most part seem to be more "sideline interests" of those doing the posting than actually being on topic. I've referred many to this particular forum over the years, and the more recent invariably make the comment that they see more off-topic material than anything that interests them in the way of PM investing. I'm sure there are others that more often catch themselves scrolling on through the "misc" during their daily reads of this and other forums while seeking out the posts more relative to the original purpose and intent.
mikalThe economy and gold#1282561/16/05; 16:23:32

Will burgeoning U.S. debt be Bush's Achilles' heel? - Gregory Robb - January 14, 2005
BoilermakerLets talk investing not politics#1282571/16/05; 16:32:39

Here's a testimomial to the mentality of the US investor.

GE stock, about 10 billion shares, today worth $375 billion in $ fiat. This is roughly 33 shares worth $1250 per capita US . GE is a well managed company but not a 5000 year old store of wealth.

US gold, US Treasury holdings (as reported but not audited) about 0.9 ounce per capita worth about $380 fiat. ETF/GLD at 2 million ounces (as reported, not audited) worth about $2.90 fiat per capita. Gold is a 5000 year-old store of wealth.

There is a disconnect in the sense of wealth here. Perhaps the contrarians among us could take advantage.

mikal@Boilermaker#1282581/16/05; 16:45:13

Speak for yourself. Why are you talking politics?
YGMGW Bush, Iraqi Children, American Bashing etc...#1282601/16/05; 17:41:04

Have NO PLACE on this forum....AND I for one am sick of it...TC where are you?...AND BTW...NOT ALL other people hate Americans, some of us realize imperfection but the USA has already saved the world on one occasion...Get this crap off this site...never in my six years of posting here have I heard such crap....YGM
Sovereign@YGM#1282611/16/05; 17:55:04

Mr. YGM,

Ironically, what you say is true. For instance, Americans have the misconceptions that the French hate them. Regardless of what your poles may say, the French middle class are generally in love with their perception what America represents. Many of the fabled French middle classes would in fact love to move to the United States and make a living there. My brother-in-law, an otherwise inveterate Parisian, is sick and tired of France and fantasizes about how much money he could make there.

Why Gold, Mr. YGM, then care to explain?


ToolieThe Triumph of Reality#1282621/16/05; 18:00:44§ion=0&article=57315&d=10&m=1&y=2005

Snip: It is important to note that most monetary authorities around the world and finance professional in the private sector (bankers, fund managers, etc.) are trying very hard to calm people down and reassure them that everything will be all right.
They are like the crew of a sinking ocean liner who are desperately trying to prevent a panic among the passengers while they quietly prepare the life rafts that will bear them away — leaving the unfortunate passengers to get better acquainted with sea turtles, sharks and other denizens of the ocean deep.
The upshot of this long article is to warn you all of a coming financial tsunami that is going to affect the whole world.
This is a consequence of irresponsibility and grave policy errors by all the world financial bodies, public and private. This crisis will be financial rather than economic and will probably not last very long. I believe, however, that it will be devastating to those who are unprepared.
I would like, therefore, to offer some advice that may be of use to you to help you tide over the crisis period until the world economy rebalanced again.
Try over the next few years to increase your holdings as much as possible with real assets.
Real assets are those with real intrinsic value not dependant on financial manipulation. Examples are gold, silver, real estate (especially productive real estate such as agricultural land) and stocks in public utilities such as electricity and water.
Do not regard this as an investment policy; rather, it is a floatation device for when the ship finally sinks. (end snip)

Its unusual to see such frank words in a newspaper. What I find most interesting are the phrases "probably not last very long" I would have guessed otherwise. "over the next few years" seems to imply a known timetable. The Gulf region is slated to have its currency in place by 2010 and has pledged to keep pegged to the dollar until then. A possible wrinkle in the plans has recently emerged. Bahrain (spelling?) has signed a free trade agreement with the US, in spite of the protest by Saudi Arabia.

Also worth note is the use of the phrase "increase your holdings as much as ""possible"" with real assets"

YGMSovereign....WHY GOLD?#1282631/16/05; 18:56:40

Because Gold is secure. Gold does not dissapear in the swipe of a penstroke. It does not burn in a fire of human financial corruption or war. Gold is, and always has been Mankinds ultimate store of wealth. And mostly because if one has Gold he will always be able to start again, no matter what form of chaos the world becomes enveloped in, and in so doing that person will be able to help others do the same....YGM
YGMWHY GOLD.....A belief in This Scenario for One Thing!#1282641/16/05; 19:16:47

Quote from Nigel Maund Writing....

This crash will by its very scale and nature result in the largest transfer of assets, to an astronomically wealthy elite, ever seen in the history of the planet, except in outright cases of Ancient to Medieval pillage. However, never before has society been so interconnected, and yet, so easy to manipulate and to control. When the crash comes, real estate equity, stocks, savings and all other forms of monetary instruments will become the property of the banks, dependent upon everyone's state of indebtedness. Those who are highly leveraged will be totally financially destroyed. Gold will be the only monetary instrument outside the control of the Bankers.

TownCrierJohn Locke answers "Why gold?"#1282651/16/05; 20:17:12

To summarize and elaborate: because the accumulation of gold savings is the natural, ultimate form of consolidation of an entity's productive capacity which, when in excess of immediate self-sustaining needs, is rendered to the benefit of society in fair exchange for an equivalent share of market value in a durable form. Hence, when earned through lawful means, the size of a person's accumulated savings in this form can not be generally viewed with contempt by a rational observer for its size in value represents not a measure of a person's greed but rather a sum measure of value society has placed upon all personal efforts and services provided by that person. Thus is the healthy nature and perspective of a market economy.


YGMJohn Locke...#1282661/16/05; 20:51:18

A man studied by Founding Father's of yesteryear, and even the most simple of men today...Writings this simple Miner never would have been exposed to had it not been for the invention of the Internet and the unselfish sharing of those who use it...Thanks USA Gold for many years of 'Blazing a Trail thru the Wilderness' for those not exposed in life to such teachings and scholars as we have seen pass thru these halls in body and spirit....Lesson's and memories to affect one's life and last a lifetime.

TownCrierWhy gold?#1282671/16/05; 21:53:09

On the one hand you have the John Locke premise that demand for gold should rise with global growth and prosperity as mankind transforms its aggregate condition from barest stone age subsistence up to modern age comforts, compensating the productive specialists for their net contribution of goods and services to society's elevated standard of living.

On the other hand you have gold also in demand as a tangible safe haven of wealth against counterparty defaults and the collapse of trust and confidence in contracts during a less favorable scenario of civil unrest and the social decline of an empire.

Gold is the safest, smartest choice of all as it fits the bill whether the times at hand are good or bad.


Black BladeUS gold ETF's inflow may be "de-gearing" -analyst#1282681/16/05; 21:55:44§ion=investing


NEW YORK, Jan 13 (Reuters) - Gold bullion stockpiled in the first U.S. gold exchange-traded fund launched in November stands at a record high, though it is unclear if the inflow was based on new investor interest or dollar-cost averaging, with gold a cheaper buy in 2005, said a metals analyst this week. The 47 tonnes added to streetTRACKS Gold Shares (GLD) in just the few trading days so far this year is already nearly half the bullion accumulated between its Nov. 18 launch and year-end, Andy Smith of Mitsui Global Precious Metals wrote in a weekly research note issued on Thursday.

Black Blade: Poor Andy "The Gold Bear" - he has really "blown up" on his precious metals calls in recent years. I wonder how much he has cost his employer on horrible calls. He was always very much pro-hedging and now that miners are dehedging he must have lost his shirt and roused the ire of his bosses at Mitsui. Even in this linked article he is still trying to spin a negative gold story. tsk tsk tsk

Black BladeDead? Buried? Dormant? Resurgent? - A Prehistory of Gold Hedging in the 21st Century#1282701/16/05; 22:15:07


These days it is rare to see the words ‘gold’and ‘hedging’ in the same sentence.With gold's recent rampant price performance and producers rolling in cash, this pair of
previously intimate bedfellows seems set to remain estranged for the foreseeable future. Legacy positions are being bought back or allowed to roll off, new hedging activity is linked almost exclusively to project finance,
and even then only when required by lending banks.The total of delta-adjusted producer hedges is currently around 7% of overall reserves, down from a high of 13% in 2000 – the lowest level since large-scale hedging
began in the 1980s.

Black Blade: The days of forward sales hedging in the Gold industry are dead and gone. The sahreholders of gold miners have made their demands known and the mega-hedgers had to face the music. Even poor "Gold Bear" Andy must have been very shocked. The Munky man also caved in a steered barrick away from hedging while showing his CEO Randall Oliphant (the architect of Barrick's hedge-book) the exit. A stake has been driven through the heart of the blood-sucking gold hedge and the few remaining hedgers are quickly looking for a way - anyway - to unload these albatroses from around their necks.

Aristotle"Unallocated Andy" (UA) represents the opposite of (AU) Gold#1282711/17/05; 02:32:25

If Mitsui's Andy Smith were a potato middleman instead, do you think it would be very productive for him to maintain his perennially negative posture about his product?

If you always bear in mind his motivations as a bullion banker whose worst nightmare is a run, you'll never be surprised by the things that spew from his mouth.

In Andy's little universe, happiness is an unallocated account. From that starting point, "Gold" is marginalized as if it were any other type of bank money, and LGD bars are its currency. It's not a coincidence that the streetTRACKS ETF Gold arrives only in the form of 400(+/-) ounce bars, nor is it to be overlooked that the trust's (manager's) allowable ordinary expenses payable from the ETF assets are upwards of .4% per annum while 12-month lease rates are a scant .2 percent.

If a guy in Andy's business can't put a complete stop to real investment interest in Gold, that is, beyond the fuzzy realm of unallocated accounts, he'll settle for the ETF as the next best thing to keep himself fat and happy as a bullion banker maximizing his remaining control to the fullest extent possible over the flows and exchange rates of his system's precious "currency."

Simply put, an investment in the ETF is practically a vote of approval for the managing marginalization done to Gold by bullion bankers.

Insist on the real deal and in doing so you'll begin to "control your controllers" as FOA would say.

Gold. Get you some. --- Aristotle

NedAg Mountain#1282721/17/05; 05:03:56

I see your point. I apologise about the comment about what Mr. Bush had to say to Ms. Walters. That was a comment about PERSONALITY which does not need to be on this forum.

I will stick to comments about POLICY, albeit "National Energy Policy" or "Foreign Policy" will come up.

Further references in Mr. Klare's wonderful book is "CentCom", established in 1983. This will include references to "National Security" policy.

The other day I was trying to make a point where:

-gold is a function of the US dollar (amongst other things)

-the US $ is a function of economic well-being (amongst other things)

- economic well-being is a function of the POO. (amongst other things)

Thanks to your recent post I think it's safe to say that "policy" will impact this 3 way relationship immensely.
Further it is difficult to discuss matters of relevance on the subject of gold w/o touching the borders of politics.

The "word definition game" that you dare to expose in the example of personality vs. policy can therefore be applied to politics vs. policy and therefore where are we?

So in summary I believe that you are correct, matters of insignificance such as "did you hear what Bush said to Walters" will not come out of my mouth again. In return I ask the favour that you do not climb up and down my back again when I speak of:

- national energy policy
-foreign policy
-national security policy

as it relates to the subject of gold (which includes by association oil and economics).


Dollar Bill.,.#1282731/17/05; 05:16:40

I think that greenspan has clued us in to what has replaced the previous gold hedging stucture.

"Hedge funds are evolving from what they used to be, and their main evidence within financial markets is as arbitrageurs. They seek abnormal profits by trying to find niche abnormalities in the marketplace, which means prices are out of balance and therefore create the possibility of above average rates of return. But the actual exploitation of that imbalance eliminates it. And, indeed, one can see the huge amounts of funds that hedge funds have moved in and out of various markets – in and out of various instruments – which has kept the system fluid and flexible. And I would be most concerned if we were to lose the flexibility added by either of these major instruments – like Credit default swaps – or new institutions such as hedge funds."

BelgianIndeed, Ari...#1282751/17/05; 08:34:17

The absolute majority continues to fail seeing/detecting, where the present evolving monetary/financial "policies" are heading (leaded-guided) : The archaic (coins and notes) "money" affairs have now been overwhelmed by the "digital" era. Confetti turned into bits.

Digital trade settlements are increasingly living a life on their own, distancing themselves further and further from what we perceive as monetary management. Do we know what's the total volume of (money)digits that are flashing around !? No we don't. The blue patato's former definition of "money" (coins-notes) is being dismantled. Money (confetti + digits) is being reduced to its single utility as trade settlement and is further losing what is left of its former wealth-saving's connection, completely. This goes much further than what we recognize as permanent currency depreciation or devaluation...altering exchange rate and purchasing power. Money is heading towards "complete" worthlessness. It's only remaining "practical" worth, lies in its sole utility as a numeraire that stands temporary between the exchange (barter) of tangible A for tangible B...or for paper A into paper B.

This morphing into the (modern) management of a digital money-system, was made possible as soon as the "orthodox" $-gold-discipline was purposely (politically) taken away.
We arived on a crossing point : We could (still can) live without the orthodox $-gold-discipline, but absolutely NOT without any "reference" towards gold !!! Gold, still must be "incorporated" into the archaic notion of money, whilst we are transitting into the 100% digital era. That's what the goldprice management is all about and why the Andys and Jessicas are for.

We cannot "rush" into a full 100% digitally managed world without having changed the universal (historical) tool for wealth *consolidation*. The wealth savings aspect/utility of money (all forms) is gradually and purposely being removed. Look at the stockmarket and realise how false this managed representation of one's wealth, really is. Ask the holders of Argentinian bonds, what they think (now) about having stored their illusional wealth in a state-debt- paper that is now being repaid at only 30% of its price (not value) of issuance. A "take it or leave it" proposition...even accepted by the IMF.

At present, for as long as the ongoing monetary system transition takes its time, is NOT allowed to come forward as the universal store of real wealth !!! Gold has conveniently been branded as "speculative" !!! During this transition period, the goldprice management and the existing goldmarket MUST remain in place and remain controlled as never before...repeat... AS NEVER BEFORE !!!
We, the monetary policy changers, cannot tell the public that we intend to take away all the wealth-conserving aspects of the monies (confettis-digits). The multiple function of money is being reduced. The only "hard" thing that will come up is gold in another context...goldmarket. Gold will and must "function" (!!!) as the one and only real wealth conservator in the new digital monetary future, reduced in function (ex wealth savings).

That's why I keep considering the gold ETFs as just another tool, "needed" during the ongoing transition period.

It is NOT the dollar that wished this transition. It is the euro system that has been architecting this.

We were never supposed to "hold" money as to save our "wealth". Money is only a numerical tool, needed for practical reasons, in our production of wealth.
But the... gold=money...perception (illusion) was needed to help the management of the practical money tool. The successive regimes of gold-discipline (goldstandard-fixed gold-gold exchange) regime were/are too rigid...complete de-monetization of gold (commoditization) would crash the International Financial System's and its debt credibility, at once....and that's why the goldprice managerial containment (1971-present) was chosen as most appropiate for running the global dollar regime that we know today.

Once we see more signs that the, use of money, is increasingly being accepted as intermediary numerical tool for trade settlement ONLY...once it is politically correct (accepted) that money is NOT AT ALL a wealth "saving's" instrument...freegold comes automatically rolling in and money will "function" "exclusively" as the numeraire between any trade. Then, IRs, stockmarket pricings and currency exchange rates, etc... will start a complete different life.

Once the planet can leave the impossible notion that money (fiat) * IS * wealth...we will automatically have freegold * BEING * the "real" wealth. Without taking away the one and only practical function of money, or currency under whatever form it might exist. Money was never designed (concepted) to store wealth....NEVER. Because this harsh, cruel reality is not easely digested by the masses, we had to have "some kind" of (false) wealth association attached to money >>> gold, under an unfree goldpricing regime !

Note (again) that the $-management (FED) and the €-management (ECB/BIS) *ARE* different and opposingly concepted : The reason WHY the euro is managed more disciplined than the dollar is to induce and hasten the dollar-(money)-gold connection that stands in the way of freegold and the new (reduced) money function. The euro doesn't want you to "save" or "consolidate" your wealth into this $ competing fiat ! The euro wishes to profit from the support it will get from its initiation of euro-freegold. The euro wants you to save/consolidate your wealth into goldmetal that will be marked to the "freegold" market. Now, the euro-gold is only marked to the unfree dollarprice of gold !!!
Huge difference : One's wealth cannot be consolidated safely in $-paper-gold and in the physical gold under the present regime. That's why the euro wants to bring physical gold back into the forefront.

That's why the euro must avoid to embark on the same DEBT-path that the dollar has already landed in. One cannot save/consolidate $-debt into goldmetal. It are only real surplusses that should be saved into goldmetal under the right pricing regime.

Today, the absurd goldprice, is serving a much higher purpose than ever before. The deep-frozen POG must hide the ongoing policies, leading to this monetary (functional) transition. A high/higher POG would raise too much suspicion that a fundamental and drastic change is taking place. The political correct (evolving) idea that your money does NOT say what your real "wealth" is. It is only when gold is taken out of its present money context and can trade freely as the metal in possession, that one can store one's wealth into this wealth reserve metal. Wealth should remain by definition wealth and should therefore not be susceptible to any depreciation/devaluation or detoriation, currency-wise. Today, your (and mine) goldmetal in possession is NOT 100% sure that it is going to reflect our total real wealth 100% for tomorrow, because of the unfree, managed goldprice regime.

Under the present monetary regime, currency exchange rate and currency purchasing power, are permanently falsified !
Gold and its existing market has also been brought under this (political/financial economy) regime. Let's separate gold from money, by changing (separating) both item's (gold - money) "function" !

This "change" is a political matter. A change in "policies". The reporters of the political events, never connect these changing events to gold (or oil & al).

If at a given moment, too many IBM stockholders, decide to exchange their stock for a fiat numeraire...they realise that the IBM holding never was a store of wealth.
The crashing POG (low $253) was trying to send the same message : Don't put your wealth into gold or we make you change this idea. Guess why this happened ? Answer : The euro's "affair" with gold ! A rising goldprice is """ euro-supportive """ !!! Then came the WAGs. Now, most still think that the (rising) POG is compensating for declining dollar exchange rate, whilst in fact the rising POG is supporting the euro exchange rate. Something (systemic) has changed 180°. (note the difference between compensating $ and supporting €)

Those who have been (still are) accumulating dollar surplusses, are silently exchanging their wealth, that the dollar is (was) "supposed" to represent, into goldmetal.
These goldmetal accumulators are waiting for the existing $-goldmarket to change into another market where it is possible to "trade" their (gold)wealth as "wealth". That's where Euroland will direct its public's massive (fiat) savings into. The EMU allies have been informed about this EUROGOLD architecture.

If there should not exist an architecture for the changing function of gold...CBs would already have sold all their existing goldreserves and leave gold as a private non monetary metal, just like any other metal. The CBs have, on the contrary, being very busy in the re-distribution of the official gold-wealth-reserves. Gold (all of it) cannot be left (given) into private hands for its management (pricing and market) !

The fact that a $ 2 TRILLION per day forex market exists, means that currency is NOT a wealth savings instrument. Global GDP is only $40 Trillion per year. We have no idea about the total global DEBT and its growth. DEBT CANNOT REPRESENT WEALTH. It now has become impossible to "inflate" the fast growing debtbergs away by price-inflation. W're monetarely stuck now. A $-POG of $600 or whatever irrational number, is NOT going to change anything to the fastening systemic detoriations. Remember Duisenberg's statement on goldreserves (important monetary tool) with the physical introduction of the euro currency ! The "price" of gold is going to change nothing...but the "PRICING" of gold, will change a lot. Total debt will not become more or less credible with $POG at $600 or whatever. The existing, accumulating dollar-reserves, will rather decline in purchasing worth with a rising (higher)goldprice, for as long as the goldreserves have to be marked to the unfree goldpricing market. This is less than a zero net/net operation, whilst nothing structural is being changed.

Today, it is "dollar-debt" that is increasingly sticked to the most productive people and wealth owners, around the globe. They know that their dollar reserve and virtual dollar wealth is hollow and as soft as a paper promise. They are not supporting/using this dollar-system for ending up with nothing ! On the contrary. Take the reserve-wealth function out of this fiat instrument and replace it with freegold in a market that trades "real" tangible wealth. Such a market is a physical one and NOT a representative paper one. ETF = papergold !

968THE COMING WARS#1282761/17/05; 09:07:02

Article in the New Yorker today by by SEYMOUR M. HERSH

US Special Forces are already in Iran to prepare an eventual attack.

Next effort to keep oil tied to the dollar ?

YGMBelgian & Aristotle...In TRULY FINE FORM TODAY....#1282771/17/05; 09:34:34

Many thanks for the time you both spend at the keyboard...
Makes this forum my first visit each day...USA Gold is also the fastest loading site I have ever encountered...Coming here is easy, and so worthwhile....YGM

Clink!@ Ari#1282781/17/05; 10:57:27

That was a profoundly interesting observation you made this morning (last night ?) that had heretofore escaped me concerning the ETF :-

"..nor is it to be overlooked that the trust's (manager's) allowable ordinary expenses payable from the ETF assets are upwards of .4% per annum while 12-month lease rates are a scant .2 percent."

As if there weren't enough degrees of separation between owning ETF shares and holding the real stuff in your hand. It just doesn't stop getting worse.


AristotleClink! -- If a sharp dude like you missed it the first time I'm glad I hit it again with different words...#1282791/17/05; 11:21:44

Because that's exactly what I was referring to in my pre-Christmas and January 7th posts when I wrote:

---------"Gold that's allocated into the ETF account [...] can be borrowed *for a song* out of unallocated LBMA deposit pools"--------

...and as a result, the "Gold investment demand" (if that's the right thing to call it) which can be channelled into the ETF can largely be satisfied under conditions of the bullion banks' choosing without putting an iota of strain upon the world's thin circulating physical stock of investment Gold!

It's imperitive that we don't stand dumbstruck in the face of this circumvention of true market-based price discovery. Eliminate unallocated accounts and control your controllers.

Gold. Get you some. --- Aristotle

USAGOLD / Centennial Precious Metals, Inc.Don't delay. Phone today. 1-800-869-5115#1282801/17/05; 11:22:35">gold Netherlands trade ducats
TopazGold drought averted ...for now!#1282811/17/05; 12:32:50

This should alleviate the upcoming squeeze. How, and how much will need to be forthcoming pretty soon tho.

Big commitment by GB ...anticipate "deep-storage" re-allocation (by ANOTHER name) so's not to disenfranchise IMF.
Hedge-e-money High-Priests Brown and Greenspan together in Scotland Feb-6.

We watch!

USAGOLD Daily Market ReportPage Update!#1282821/17/05; 12:38:05">
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.

Moday market excerpts

Gold prices drifted slightly lower on Monday in Europe, tracking a slight rise by the dollar versus the euro, but conditions were quiet with the U.S. market closed, dealers said.

Financial markets were awaiting Tuesday's release of closely watched U.S. capital flows data that could put worries about the U.S. current account deficit back in the spotlight.

The net long position on New York's COMEX gold futures had last week declined to its lowest since mid-August 2004. "The release of the COTR (Commitments of Traders Report) on Friday vindicates our view that the sell-off in gold has gone far enough and we expect gold to rally, both in euro and U.S. dollar terms," said John Reade of UBS Investment Bank in a report.

Analysts also noted a proposal by the world's biggest gold producer South Africa to back a British proposal to use IMF gold reserves to write off the debts of poor countries.

South African Finance Minister Trevor Manuel told Reuters on Monday that revaluing of the International Monetary Fund's gold was "very necessary."

Under a 1971 agreement, most IMF gold is valued at just $40 to $50 an ounce, about a tenth of the current market price of gold.

Bearish gold analysts said the fact that actual gold sales were now being considered was significantly more bearish for the gold market than a paper revaluation.

More bullish analysts still thought that, as in 1999, it would be impossible to gain a consensus on outright IMF gold sales, but said revaluation was a possibility.

----(see url for 24-hr international economics newswire)---

TownCrierS Africa backs UK plan to use IMF gold for debt relief#1282831/17/05; 12:55:24

REUTERS JANUARY 17, 2005 CAPE TOWN: The world's biggest gold producer South Africa backs a British proposal to use IMF gold reserves to write off the debts of poor countries, finance minister Trevor Manuel said on Monday.

Asked on Monday if he supported the proposal, Manuel told Reuters that revaluing of the IMF's gold was "very necessary".

So far Brown has won little backing from global policymakers on his proposal for the IMF to support debt relief with a revaluation of its massive gold stocks — one of the biggest in the world —by selling and then buying back a portion.

South Africa's share of global output has slipped from 27% in 1993 to 15% in ‘02 as high-grade deposits near the surface ran out of ore, hitting production. But it remains the top producer, and its backing for the plan is key.

He also said South Africa was not against selling the institution's gold reserves as long as this was managed so as to avoid swings in the price of the precious metal.

"We (as a global community) have done it before and can do it again, we shall do it again, but as a major gold producer we want to take part in the negotiations to ensure the price is managed."

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

In a related article, the following points were made by Brown at the opening session of a meeting of the Commission for Africa

TownCrierHotcakes#1282841/17/05; 16:40:28

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BelgianIMF - Debt write off ?#1282851/17/05; 17:20:20

12 Billion dollars is the equivalent of 888 tonnes of gold at today's prices. 888 tonnes of gold is more than two years of South African gold production.

The 3,000 tonnes of IMF gold are booked at $40/Oz. In case of a revaluation of the 3,000 tonnes...the booking price per ounce should be raised from $40/Oz to $124/Oz ?

But Gordon Brown is competing heavily with his (former) buddy Tony. GB wishes to present a double win formula at the G8 reunion. Debt relief + dollar support. Mucho sympatico. GB might even suggest a small buy/buy back from IMF to GLD (ETF) ? South Africa asked for good gold management in exchange for agreement + co-operation, no.
Aren't South African mines in need for a lower rand (stronger $) as to provide much needed oxygen for the mines' profitability ?

A gold-revaluation ($40 to $124) is not exactly a marking to market...but it (the principle) has a sweet taste, as a starter. First the IMF gold...then the US treasury gold ?
And is this coinciding with the efforts of holding up the dollar for some more time ? Who knows ?

By how much does the official total gold stash (+/- 30,000 tonnes) needs to be revalued in order to give this planet's total dollar-debt a bit more credibility ?
Dream on...A rising goldprice would kill the dollar, at once and is imo excluded.
Under the present circumstances, an IMF gold-revaluation would be a too dangerous precedent. I don't see how a sale and buy back can produce $12 billion for a complete write off, without knocking the POG sharply down and hurting all the African goldmining, again !? Debt relief by gold dumping and income (profit) crashing ?

GB tries to get a white foot with Labour "talk".

The effect, the message is looking for, that it "sounds" so terribly good,...sympatico. The perceptive side effects, contribute to the efforts of dollar support. Desperation !?

TownCrierHi Belgian, thanks as always for the input#1282861/17/05; 18:16:58

It may be that the biggest benefit to come out of these Gordon Brown - IMF discussions is that it reminds the world how very truly fictional the price of gold currently is. It could hardly be whackier or seem more arbitrary.

Valued (on the books) on the basis of historical acquistion costs, most of the IMF's 3,217 tonnes are held at SDR35 (about $53) per ounce, with a primary exception of about 400 tonnes which were revalued at approximately $300/oz during the previous (initial) "debt funding initiative" publicly spearheaded by Chancellor Brown in late 1999 to early 2000.

To the untrained (and trained) eye, not only does this look ridiculous, it also conjures up images of so many artificial currency pegs that have been attempted and failed through the years, Agentina's being the latest of the most notable examples of wrong-footed policy finally succumbing to realities of market pressure.

Free gold, boys, let 'er float. And put an end to this funny-business of bogus valuation that makes the whole operation look quite foolish -- by anyones measure.


2023Why sell gold to relieve their debt??#1282871/17/05; 18:19:01

This may be a dumb question (who says that there are no dumb questions) but why would IMF gold need to be sold to relieve any country's debts. Just write them off as bad loans. Don't banks do this all the time? Citibank, Wells Fargo, etc do not sell gold to write off bad loans. It is a ridiculous idea. More misinformation spewed forth in the press. And why does the IMF exist anyway. Can't we abolish this aweful group???
SundeckRevalueing IMF gold#1282881/17/05; 18:39:03

Exactly what is being proposed here???

Firstly, according to the IMF factsheet (see link), as of Sep 04, the 103.4 million ounces (3,217 metric tons) of IMF gold was carried on their books at about US$8.5B. This equates to $82.20 per ounce...not $40 or $53.

Secondly, this gold is presumeably owned by the IMF members, including those countries who are carrying the bad debts totalling about $12B.

Is it being proposed to:

(a) revaue each member's gold reserves held by the IMF to a higher dollar value to offset each member's debts (and, presumeably, enhance some members credits, as there will be IMF creditor members)??

(b) revaue all 3217 tonnes to a higher dollar value and somehow write-off the $12B in bad debts, but preserve the present IMF balance by virtue of the gold repricing??

....and what are the accounting mechanics involved?? Will the IMF sell gold to members in need of debt-relief at the present book value of $82.20 and buy it back with fiat reserves at some higher agreed price...maybe even current "market price"???

Forgive me if I sound confused....I am confused!


TownCrier2023#1282891/17/05; 18:53:11

The rationale behind the somewhat overly convoluted maneuver is that the IMF currently holds its gold on the books at an undervalued level -- the price at which it was originally obtained (primarily, subscribed by members).

So to realize a capital gain on the gold (the value with which they will "write off" heavily indebted poor countries), what they've done previously is to take a well-performing debtor and accept its latest loan payment as if it were actually buying IMF gold at present market values. As the IMF "sells" the gold with one hand, it immediately accepts the gold back again with the other -- also at market value -- as if the loan payment were being made in gold rather than with the original bank cheque.

The apparent rationale to the convolution is that the dollar-centric IMF does not thereby appear so directly to be resigning to the power of gold. Maybe they can smoke things up enough to fool us all for yet another day, or so they think.


TownCrierSundeck, there's a mathematic nuance you overlooked#1282901/17/05; 19:04:36

Regarding your opening point on valuation, you have to please realize that the $82.20 per ounce figure you have cited represents nothing other than a weighted-average of the various ounces at their various valuations precisely as was indicated in my post.

You'll discover that 401 tonnes at $300ish coupled with 2,816 tonnes at $53ish has the observed effect on the average per ounce valuation.



FlaccusThe British Euro#1282911/17/05; 19:07:56

What I have a hard time understanding is why in order to forgive third world debt gold has to be revalued, or be brought into play at alk. This doesn't make sense to me. So maybe someone can explain.

If the G-7 wishes to forgive debt, simply wave the magic wand and forgive it. What does gold have to do with this?

Brown is out for Blair's job. Blair offered Brown the prime minister's job if he would simply back Britain's entry into the euro. That was noble of Tony, but what was Tony going to get that made giving up the head of party and government worth it. In the end apparently Brown begged off.


This is all very strange politics to this humble observer.

Having been a long time observer here, I just wonder if FOA is going to pay the dollar he owes MK. Britain will not enter the euro framework. Not now. Not for a long time. If ever. Britain is not ready for the euro. And the continent is not ready for Britain.

So what is Brown up to anyway? For that matter, what is Tony Blair up to?

The British euro?

I don't think so.

Noble1Revaluing IMF Gold#12829201/17/05; 21:35:22

What I find interesting is the fact that they are transforming physical gold into fiat and back again at a "higher" price rather than just selling at the current (much higher) "market" price. If they sold it outright at today's market price they would gain enough fiat to take care of their debt problem. Certainly, instead, they could just issue some new paper (at virtually no cost)to take care of the problem. Or simply just forgive the debt (same thing). But no, they've reached the end of the line where only real wealth can satisfy the debt (or else serious structural imbalances would be allowed to surface) and they must admit it. I think it hurts them to do so because it only underlines the authority of physical. If they truly considered it some barbarous relic, they would dump it and sell it outright. But they know that they could only get it back (and being "the ultimate form of payment in the world" they would want to) at a much much higher "price". So, they keep the band playing a little longer and do this little dance in an attempt to delay the grand entrance of the Fat Lady. Well, they tested the process once and it seemed to work. They've floated this current idea for a while without much dissent. So, it's time to implement it. Well, good for us. It advertises and elevates the value of gold to the masses. It shouts "the price of gold is going up", "gold is undervalued in comparison to fiat". All good. The more fiat exchanged for PGiP and/or allocated gold in audited storage the better.

Many of us have heard her rehearsing in the dressing room. I hope you can too. Take Black Blade's and Aristotle's advice and you won't be found wanting when the wailing begins.


YGMFor All You Chart Miesters...Foriegn purchases of US Securities#12829301/17/05; 22:02:32

some interesting charts...
KnallgoldAristotle msg#: 128279#12829401/18/05; 00:59:47

"Gold that's allocated into the ETF account [...] can be borrowed *for a song* out of unallocated LBMA deposit pools"

Obviously,these un-allocated accounts are one of the main issues standing in the way of FreeGold.--KG

"It's imperitive that we don't stand dumbstruck in the face of this circumvention of true market-based price discovery. Eliminate unallocated accounts and control your controllers."

The right conclusion.Most of us here do.
As a next step,I propose to outlaw such unallocated accounts.Yes, a political solution.

Gold is property-you either own it,or you don't.Neither a credit,a paper nor a lease makes you an owner.No fractional Goldbanking,no double-accounting.A Goldbar is a Goldbar.
These FreeGold has something appealing.

TopazHIPC debt relief.#1282951/18/05; 02:19:57

FWIW, I got the impression Mr Brown was, on behalf of GB, intending to "write-off" their portion of IMF debt. Now this sounds to me like GB's (the country) portion of IMF Gold may, in whole or in part, be headed to market!
BRING IT ON!! far as the other matter goes, (a wholesale write-off) it has to be realised:-
(a) Some of the wealthiest people on the planet get/got that way through ...ummm, "poor country indebtedness". It would seem rather imprudent then to simply "forgetabadit" ...thereby emboldening those who's time has "now" come.
(b) The crux of the System "demands" repayment ...even to the point of imminent default but "never" ...unless absolutely unavoidable, write it off. Ref: Japan.

Basket PoG B352.21

BelgianRising tensions...?#1282961/18/05; 05:28:50

The POO is heading for $50, whilst the €/$ exchange rate and the POG are consolidating...halting their decline. Is this a (diplomatic) answer to the Pentagon and President Bush's answers on the Iran affairs ?

Oilprices (pricing) seems to take the lead and "floats" on the surface whilst $/€ exchange rate floats somewhat beneath the surface and the goldprice (pricing) remains rather immobile (floating less)...(IMF-?)

If everything seems to start floating...what is it that will sink ?

968ECB Press Release - Weekly financial statement.#1282971/18/05; 08:58:10

In the week ending 14 January 2005, the decrease of EUR 43 million in gold and gold receivables(asset item 1) reflected the selling of gold by two Eurosystem central banks (consistent with the Central Bank Gold Agreement of 27 September 2004) and a sale of gold coins by another Eurosystem central bank.
The net position of the Eurosystem in foreign currency (asset items 2 and 3 minus liability items 7, 8 and 9) decreased by EUR 0.7 billion to EUR 154.9 billion on account of customer and portfolio transactions.

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BelgianThe POO 's volatility ?#1282991/18/05; 10:46:49

Today, again we see a POO-priceswing of + 2% and back to 0% ($48 > $49,30 > $48) in less than 16 hours (EU-US markets) !? This type of strong price volatility is very frequent. I suspect that this cannot come from heavy speculation alone. There must be something behind this abnormal behavior. But what exactly ? Any thoughts ?
USAGOLD / Centennial Precious Metals, Inc.The Netherlands Gold Trade Ducats have SOLD OUT in less than two days.#1283001/18/05; 11:05:37

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TownCrierHEADLINE: Gold consumers urged to hedge against rising price#1283011/18/05; 11:32:33

VICENZA, Italy, Jan 18 (Reuters) - Jewellery makers and other businesses which use gold should hedge their exposure to the metal as insurance against buoyant gold prices, a risk management specialist said on Tuesday.

"In a bullish gold market, gold consumers need to control their costs through hedging, unless they can pass on costs directly to customers," he said at a seminar sponsored by technical analysis firm intimetrade.

Merrick said there were several reasons to believe that prices were set to resume their upward path.

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

Hedging... using gold derivatives to mitigate price movements in gold... until the derivatives themselves began to pilot the ship.

Bankers can conjure any quantity of "paper gold", a fact attested to by trading volumes and price levels; and even beyond that, particularly for investment purposes, hedges -- in particular GOLD hedges -- provide questionable financial utility because they themselves are intimately and cumulatively connected to the very same paper and digital system that they, as gold proxies, ostensibly purport to protect against in times of performance crisis.

Choose real gold... free, unencumbered gold.


TownCrierPhysical gold and bullion banking snapshot in the New Zealand Herald#1283021/18/05; 11:51:07

HEADLINE: Gold stocks worth $2.9 trillion

(19January2005) LONDON - The market value of above-ground stocks of gold was estimated at just over US$2 trillion ($2.9 trillion) at the end of last year while turnover in global markets totalled US$5.6 trillion, International Financial Services London said.

"Although the gold and silver markets are relatively small compared with the global equity and bond market, turnover is high," IFSL said in its first report on the global bullion market.

The private sector organisation, which promotes British financial services industries, estimated that the total volume of identifiable above-ground gold at the end of last year was about 155,000 tonnes (about five billion troy ounces).

London remained by far the largest centre for over-the-counter (OTC) trading of gold and silver, although the report said exchange-traded transactions had grown in recent years with New York's Comex and Tokyo's Tocom generating most activity.

Volumes of both metals cleared through the London Bullion Market Association had dropped significantly during the past six years.

The report said turnover on the LBMA of gold and silver last year was less than half the 1998 total, which it attributed mainly to a fall in proprietary trading by banks and brokerages.

"It should also be noted that the actual volume is probably three to five times the reported turnover because transactions which are netted out are cleared without appearing in the statistics."

Futures and options traded on the OTC had also risen.

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

"Volumes ... cleared through the LBMA ... dropped significantly during the past six years ... less than half the 1998 total ... attributed to a fall in proprietary trading by banks and brokerages."

It continues to be as slow, but sometimes lurching, staggered transformation of an artificially fractional gold banking paper-dominated market environment to an evironment of free-er physical-dominated pricing. Be prepared in advance (with true metal ownership) for the final, spectacular lurch forward.


Buongiorno!energy price fluxuation#1283031/18/05; 12:12:56

@ Belgian: My best guess regarding energy volitality involves the looming elections in Iraq, where attacks may get even worse than they are now. A new PLO chief has not helped things. Word is out of a border shut-down for Iraq.

There is some very severe weather in Minnesota (-54!)and along our eastern seaboard. Some folks made a bundle shorting energy last month--perhaps all did not get covered. Some of the action has a faint smell of desperation about it. (margin calls, anyone?)

Nat Gas has had some contracts up nearly 50 cents in one day, recently! Producers of energy have to be selling with both hands at these prices, esp. with the worst of winter almost over.

All of this does have an ominous tone about it....much like great beasts fighting underwater. You can not quite make it all out, but something serious is certainly going on!

I hope my take is a bit helpful, perhaps Sir Black Blade could have a shot. He knows much more than I.
Best wishes,

Black BladeRe: Buongiorno! - Oil n' Gas#1283041/18/05; 12:55:32

There are a lot of reasons why energy prices are higher. One is that oil inventories dropped last week and heating oil inventories remain well below the 5-year average. The recent cold snap has Wall Street a little concerned. There are also a few other supply elements to consider as well. Iraqi production is reduced due to "insurgent" (read terrorist) sabotage, growing Chinese demand and recent contracts with Russia and the acquisition of a Russian energy company, Chinese energy purchases from Venezuela and Canada, Indian energy contracts with Iran, etc.

Meanwhile NatGas storage is a toss up because the EIA reports a larger than average inventory number despite some monkeying around with the data. The EIA recently stated that they have started to implement changes with the methodology – this is cause for concern because we now have to worry about wither or not there will be more "data massage" as "smoothing filters" are used much like the case with BLS employment and Government inflation data. Again the cold snap has grabbed headlines and only a few are taking notice that much of the draw is from "reverse line-pack" (withdrawal from existing pipelines) and heavier draws than normal from Canadian storage/production. Also, it should be noted that there is about 2-3% less US production and we are about to approach the yearly Federal land-drilling moratorium starting in March and ending in June.

We are told by several analysts to expect volatile prices swings for energy this year and into 2006. Of course they have also been saying that oil and gas prices would collapse for the last several years. Still, food, energy and shelter are just a few things that people can't seem to do without regardless of the economy - imagine that! ;-)

On a side note, I just brought in a NatGas well this morning for a client and will be conditioning the well over the next couple of days before starting the next one. Cheers!

- Black Blade

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Tuesday market excerpts

Sweden's central bank announced it has sold some gold, noted one trader. "But it's within the accord," one trader remarked, thus noting it didn't trigger much market reaction.

The sales occurred under the Central Bank Gold Agreement involving 15 European central banks. It runs for five years and allows Sweden's Riksbank to sell up to 60 metric tons during the five-year period.

The Riksbank said it has sold a total of 15 metric tons under the accord, which went into effect Sept. 27.

After the dust settled following a surprisingly strong U.S. net capital inflows report for November, which initially lifted the dollar, the gold market was able to hold above a key chart support at $421 an ounce. U.S. gold futures erased earlier losses to close slightly higher Tuesday, buoyed by short covering as the euro clawed back from a test of $1.30 support against the dollar, dealers said.

"Locals wanted to sell it, but the ring doesn't want to get too short," said a floor trader. He said thin volume here and overnight in Asia left gold stuck near $423 and awaiting direction from economic data later this week.

COMEX February Gold ended 50 cents higher at $423.50 after trading a tight range of $424.20 to $421.40.

Net inflows of capital into U.S. assets shot to an unexpectedly high $81 billion in November, against a revised $48.3 billion in October, the Treasury Department said Tuesday. Markets watch the report as a measure of foreigners' appetite for U.S. assets.

Looking to gold, the Commodity Futures Trading Commission's Commitments of Traders data showed the net speculative long position in COMEX futures dropped to 36,787 contracts as of Jan. 11, from 73,243 lots a week earlier.

It was the lowest long exposure since Aug. 3, Tim Evans, senior commodity analyst at IFR Markets, said, adding that long accumulation now looked more likely than further liquidation.

"More base-building may be required before prices take off again, but we think it is already worth covering shorts. We'd buy on a breakout above $428.30, too," he said in a report.

------(see url for 24-hr newswire)----

BoilermakerOil and Gas Price Volitilty vs. Gold#1283061/18/05; 16:53:29

I believe as many including Another and FOA that there is a strong relationship of pricing between oil and gold. It is the relationship between a wasting asset, oil, versus a collectible asset, gold. The folks in the ME that hold the big oil assets are not stupid. They know that their wells will eventually run dry. Why not convert this ugly but essential goo into something more attractive, storable and ultimately just as essential? Gold fits this need to a tee.

We have a commodity, oil (and its cousin gas), that comes out of the ground at prodidgeous rates, about 80 million bbls/day and is consumed just as quickly. Above-ground oil inventory is about 90 days of consumption meaning that every supply interruption or restoral has significant supply and price impact.

Gold is not burned nor is much of it consumed in a way that it's lost. "New" gold is produced at about 2500 tons/year. But according to estimates there is an inventory of 150,000 tons floating around the Earth stored for whatever purpose but always available for conversion to fiat. There is a gold inventory of 60 years production at current rates. Perhaps there is a "flywheel" effect for gold that recognizes its immense reservoir of value that does not react much to day-to-day supply/demand announcements.

Gold is now priced as the fiat defenders would have it, a bit above the marginal cost of producing it. Gold is valued by its believers as what they see for the fiats, death by inflation. Oil and gas bounce around and gold plods higher with the gradual decline and fall of the US$. When the fiats fail gold will soar.

Federal_ReservesIs Social Security in crisis? #1283081/18/05; 17:08:07

Is Social Security in crisis?

The Administration is claiming the Social Security system is in a crisis, going broke. LOL! In 2004, the fund had incoming receipts exceeding payments by 71billion! Its been running a surplus of receipts over payments for 20 years and if we do nothing will do so for another 20!
That's not a crisis my friends. In fact, the social security system surplus helps lap up all the deficit
spending in Washington and keeps interest rates from rising.

So there is the real crisis!

Compare that huge SS surplus against the federal budget (financed by income taxes) which ran a deficit of
some 450BILLION dollars in 2004! Compare that SS surplus to the record trade deficits now rising at 500BILLION
annualized. These two deficits amount to 10% of the GDP! Bananna Republic levels! These idiots in Washington are shell gaming the system, telling everyone a crisis exists in Social Security? Liars and cheats! They are back stabbing US WORKERS.

I ask you. What system is in a crisis?? Social Security or the big spenders in Washington who support unfettered free trade without respect to balancing imports and exports.

Its insane! I can't stand to watch and hear the BS. Nobody seems to see or care about the real crisis.

Black BladeSocial Security Ponzi Scam#1283091/18/05; 17:15:53

I am a freedom kinda guy myself. I still don't understand why the subhumans (politicians and government workers) are not "forced" to participate in Social Security. The option under the proposed Social Security privatization reform is that you can participate in the current SS if you wish or you can opt out of full participation taking a mere 4% of SS tax into a private investment account (that unlike SS you can leave to your hiers when you terminate). It should be MY DECISION and not the decision of some old obese drunkard subhuman like Teddy Kennedy. I am a grown boy and can make my own decisions - I don't need a nanny. Again - if Social Security is so great then why are't these self-righteous subhumans "forced" to participate in Social Security like the humans?

That is the unanswered question.

- Black Blade

slingshotBlack Blade. S.S.#1283101/18/05; 17:32:50

The public veiws politicians as Gods that can give them all they want so,what if they pad their bottoms.Don't upset the apple cart. The Gods will raise your TAXES. Besides Teddy may be reading USAGOLD.

Black BladeRe: slingshot - Social Security#1283111/18/05; 18:27:05

Silly me, yep you're right. I was hoping for a bit much as I would expect leaders to lead by example. They of course are already in "privatized" retirement accounts while we lowly servants get a few crumbs brushed off the table as if that were some great service we should be content with. ;-)

- Black Blade

GoldendomeWouldn't it be nice had Al Gore's lock box contained Gold?#1283121/18/05; 19:24:45

"Lyin'--Cheatin'--Hurtin'--That's all -you ever do"

Led Zeppelin-- In a song referring to Congress, I'm certain.

We've been snookered- again, on this social security thingy. You know, all those excess SSI funds we've all been paying in for twenty years...the ones that were supposed to keep the system solvent and paying bennies when all the boomers head to the beach in retirement; well, turns out they were just excess taxes! Nothing more.

The money was spent and treasuries put in place of the cash. How do they make treasuries good when the checks are to be sent out in the future?? Search me, but I have a feeling it involves unpleasant alternatives like again, higher taxes, more borrowing (if someone is still lending to us), higher budget deficits or, increase the money supply to cover it. Or again, dramatically reduce benefits. Means testing, anyone? The frugal pay and pay, and pay again.

You recall Al Gore and his "Lock Box" that was repeatedly parodied on Saturday Night Live, during the 2000 presidential campaign? Well--if it had existed at all--it would be full of tissue paper, (that would have been interesting to see parodied on SNL., also) because the purchasing power is gone. We all have our own lock boxes of different shapes and sizes hopefully, by now, stuffed full of Real Gold and Silver. Too bad that some of the excess collected SSI funds had not been used to acquire precious for the national system, to hold real wealth.

Ag Mountain@Federal_Reserves, you just don't get it.#1283131/18/05; 20:00:28

The reason you're blind to the Social Security funding crisis is that you completely fail to understand the nature of how it's so-called "surpluses" today are being stored for future use in the upcoming deficit years.

Think about it if you can. In fact you said it yourself, " the social security system surplus helps lap up all the deficit
spending in Washington and keeps interest rates from rising."

See? It's all being stored in the form of U.S. governement bonds. There's the nature of the SS crisis!

How is it that you're apparently able to see a crisis in the form of huge trade deficits (funded by bond issuance) and are able to see a crisis in the form of huge government budget deficits (also funded by bonds) but you're unable to see a crisis with any system like Social Security which relies on being able to draw from the future performance of those bonds to make itself whole during the deficit years??????????

If your response it that you think those bonds are going to keep their value and perform OK, then you're going to have to try harder to explain to us then what exactly is the problem you're complaining about regarding the trade and budget deficits.

The future of Social Security as its currently structured is no stronger than the store of bonds it stands upon plus the year-to-year economy in which payments of current workers are applied toward the current retirees entitlements. The weakness of one pillar will have to be augmented by the other pillar. How can you think this is NOT a problem while at the same time you think the trade and budget ARE problems? Do you think the pillars of the SS structure will be getting stronger in the future in the wake of the two crises that you DO admit to?

It's getting obvious to me that you're one of the types of guys that see only clear blue sky in everything that's socialist, even when the reality is that it's being propped up by the same heads, backs and shoulders of the free market system that you selectively ridicule. You're one of nature's wonders that Darwin can't explain. So I guess I should bow to you, godlike.

YGMGOLD'S $800.00 ANNIVERSARY TODAY!#1283141/18/05; 22:22:21

25 years ago today

Gold topped $800 an oz. for the first time.
Think we'll see it again?...

*GOLDBUGS CHALLENGE*.....Yes or No and brief time frame & rational....Any takers?......C'mon have a go!

balzacYGM,S CHALLENGE#1283151/18/05; 22:52:55

i would suggest that gold will reach $525. US per oz. by the Queen's Birthday 24 th of May. God Save the Queen!
Hows that for an old U.E.L.?? Did I shake up any 'merican revoltists? Gold for ever!!!

Black BladeIndia wedding jewellery orders rise, despite price #1283161/18/05; 23:20:33


VICENZA, Italy (Reuters) -- Gold jewellery demand for India's current wedding season is up around five percent on the year-earlier period, with customers embracing rising gold prices as an enhancement to the metal's investment value. India's wedding season accounts for at least 60 percent of its annual bullion use which at some 600 tonnes annually makes it the world's biggest gold consumer, according to Indian jewellers at an Italian trade fair.

"The reason people are buying gold in India is for its value as an investment. The orders for the current wedding season are good," said P.K. Jain of Mumbai-based Diastar Jewellery Limited, adding that some 14,000 weddings took place in November on the first day of the season.

Black Blade: And so it goes - Gold demand remains firm into the New Year.

Black BladeGold's Precious Secret #1283171/18/05; 23:30:40


Schoolbook accounts have it that President Nixon demonetized gold more than thirty years ago, in 1971. With the stroke of his pen, he took the dollar off the gold standard and hundreds of years of gold's history as money came to an end. Or did it? Here's some food for thought that challenges conventional wisdom but will nevertheless prove useful as you evaluate your investment portfolio.

Black Blade: Nice little article on Gold and Oil as well as inflation (see link).

968Deutsche Bank bullish on gold price.#1283181/19/05; 00:46:42

Gold price to reach the highest level since 1981
January 17, 2005
By Stuart Wallace

London - Gold prices will reach their highest level since 1981 this year as a weakening dollar boosts demand for the metal as a store of value, Deutsche Bank has said.

The bank has also increased its estimates for aluminium, coal and iron ore prices.

Gold in 2005 would average $458.80 an ounce, 7 percent more than a previous estimate, Deutsche Bank said in a report dated January 13.
The average next year would jump to $490.30, the highest since 1980, according to Europe's third-largest lender.

Gold closed down $4.10 at $422.50 an ounce in London on Friday. The metal's average price rose 13 percent last year to almost $410 an ounce, the third annual gain, as the dollar fell against all major currencies.
"Further weakness in the US dollar as a result of unsustainable external imbalances and only measured return to a positive real interest rate environment in the US is expected to be particularly beneficial to dollar gold prices," said London analysts John MacKinnon and Tama Willis.
The forecast for this year's gold price was higher than the $435 median from 37 analysts surveyed by Bloomberg last month.
Estimates ranged from $395 to $550. Frankfurt-based Deutsche Bank had the seventh-best mining analysts in 2003, with UBS, ABN Amro Bank and Merrill Lynch the top three, according to the Thomson Extel survey.
London-based precious metals research group GFMS said on Friday that gold prices would probably rise to a 16-year high by July and average $447 an ounce in the first half.
Gold climbed to $454.20 in December, the highest price since June 1988. The average price was $614.49 in 1980.
"The kind of buying you can see from speculators and funds could take the gold price above $500," said Gillian Moncur, an analyst at London-based consultant CRU International. "The dollar remains the dominant factor."

The euro touched a record high of $1.3666 on December 30. The dollar's value has eroded as US trade and fiscal deficits have widened…
"An extended period of strong growth in China, renewed strength in the US economic outlook in 2005 and a rebound in Japanese and euro zone growth in 2006 are set to deliver another two years of above-trend global industrial production growth," the bank said.
Gold as a store of value, higher gold prices, rising gold investment demand,...
When did a bank said that before ? That's tough talk for a notoir gold lender. Times are changing...

TopazQueen's Birthday @ balsac.#1283191/19/05; 01:34:34

Perhaps "God help the Queen" might be more appropriate as the Trojan Horse of Democrazy has surely done a number on the Monarchy these last 50 odd years.

The PoG will top $800 on the Queens Birthday (June 13 ...this Year). Her Majesty's birthday here in Oz always falls on a Monday. We usually celebrate in fine style as it's also the official opening of the Ski Season. "Occasionally" we can even Ski!! Summer lift-ticket rates...woo-hoo!

TopazGold strong now ...#1283201/19/05; 01:46:25

...Dollar all over the place trying to decide whether to react!
Belgian@ 968#1283211/19/05; 03:38:03

It speaks for itself that it sounds nice to hear Deutsche Bank making positive goldprice projections for '05-'06.
But this positive goldprice sound,...from LONDON of course, (!!!) getting terribly boring, not in the least for its same "dollar-weakness" mantra in association with the goldprice. Weak/weakening dollar exchange rate = strong/stronger $-goldprice.

Are gold and the dollar, THAT, simple ??? Answer : The dollar wants everyone to stick, FOR EVER, with this "simplicity".

Print the article (Gold's precious secret) that Black Blade posted, last night ! see url. Unfortunately, nobody wishes to comment on the very deep, thought provoking insights, that this very nice but "misleading" (paradoxal) article is presenting.
In other words : The goldmarket IS changing and nobody dares to consider it.

Note that the article has probably been written from an Indian angle and therefore I would like to suggest looking at a 40 yrs goldprice chart in Indian rupee. That's why the writer probably isn't aware of his/her paradoxal view.

Clink!POO volatility ?#1283221/19/05; 06:52:28

While there have been a number of posts in reply to this subject, I would humbly suggest that we have been trying to explain why the tail is wagging the dog. The real story, IMHO, is that it is the currency in which the oil is priced which is itself the one fluctuating all over the place. Sure, there are long term trends, but there is so much loose cash sloshing about in the currency markets, ably abetted by the mountain of derivatives to add a little bit of whipsaw, that almost instantaneous computer buying and selling is running riot with the supposed "value" of things. A case in point ? Look at the USDX this morning, where it went from 83.5 to 83.0 in the space of an hour an a half. As I have said before, my mind is thoroughly boggled by the quantities of monetary difference that this represents. It's almost as if the whole world has become a gigantic futures market where the paper (or rather bytes) are dictating the price discovery mechanism instead of the market fundamentals.

To give another (small a) analogy, imagine a school bus barrelling along a bumpy road. The people inside the bus, who are hanging on for dear life, are experiencing an extremely "volatile" ride which is obviously somehow related to the undulations and bumps of the road, but because of the different resiliances and time constants of the tires, the suspension, the chassis, the seat cushions, the muscles of the clinging arms, the resultant experience for the passengers is modulated. The question is, assuming that the road ahead is getting progressively rockier (because we see little evidence of change to correct this), which axle breaks first ? And will the bus just screech to a halt or do a few rolls first ?
Golden safety belts, anyone ?

BelgianIndeed Clink....#1283231/19/05; 09:10:25

We do see an increasing "derivatization" of everything. BIS figures : >+ $200 Trillion- notional value or more than 5 times the world's GDP. The bulk of this ever growing (inflating) derivative volume is in dollar-digital currency. Digital "currency" that must remain associated with "money" in the sense of "currency with some hardness". Currency/money with some "credibility". And it is exactly this impossible evolution that will bring in, gold !

It is totally absurd that the goldprice remains sticked to the "exchange rate" of the dollar !!!
This particular goldprice (contract-price) is NOT at all associated with the absurd increasing volume of dollar-digital currency. The goldprice is not function of the "real" permanent declining purchasing power of the dollar and its other currency derivatives.

The goldprice is NOT evolving with (against) the permanent increasing dollar-debt-volume. The aboveground gold-volume (155,000 tonnes) permanently declines against the ever expanding digits.

The more (faster) the volume on digits is expanding, the more volatility (rotation velocity) we will experience.
This idiocy cries for floating goldprices as to stop this crazy evolution. A goldprice that is not shackled to the currency's exchange rate. A goldprice that is not embedded in currency wich is the same as money, today. Yes, that's why gold has been "made" money/currency and its function as a store of wealth, *** outside the money=credit fiat system ***, has been organized.

It is NOT the changing exchange rates of currencies that should be attached to gold and its price. The pricing of gold should be function of...reflecting ... the real total wealth that we are producing all together, regardless of the management of our respective currencies.

With the goldpricing embedded in the credit digital currency circus, we simply accept that gold is as bad than all the debt that all these currencies do represent.
Goldprice only moves in the extreme small space of changing exchange rate of the ever growing debtmass. Gold and its pricing has been made dysfunctional, through the monetization of gold. Gold only contributes "symbolically" to the credibility of the total debt by being put into the same big bag. That's exactly the reason why so little people don't see any reason to hold goldmetal in their portfolio as the representation of their wealth.

Today, currency, money, gold, wealth, credit...are all derivatives of each other and have lost their specific, particular meaning. One big bag of "debt" ! The modern voluminous $ Trillion affair. No wonder that we are stunned by the incredible volatility and even accept it as normal. But it isn't.

The very reason for a continued growth in volatility, is that goods and services are exchanged (bartered) via the dollar-numeraire (fiat currency) that represents nothing else but debt. We now need to create, out of nothing, 6 new debt dollars to increase the existing GDP with 1 single dollar, whilst the store of gold-wealth only signals the exchange rate between the currencies that are floating in the cosmic debt-pot . Today's oilpricing situation is different than what happened in the seventies, where the goldpricing made a first attempt to run away from its currency/money context. The coming second attempt will be succesfull ! Read (reread) Black Blade's posted article, Gold's precious Secret, and conclude WHY the writer has it wrong on his good intentions towards gold. Cheers Clink.

CamelSocial Security#1283241/19/05; 09:49:23

Ag Mountain- I wanted to take issue with one of the points you raised concerning the Social Security Trust Fund. While in general what you say is true I think you are overstating the severity of the problem. The trust fund is said to have surplus of 1.5 trillion held in Treasury bonds. Around 2018 it is believed expenditures of Social Security will exceed revenues and the surplus will have to be used to make up the difference, the bonds will have to be sold to raise cash. Then around 2042, the surplus will have been exhausted and all the bonds will have been sold.

I agree that if all these bonds were sold at the same time it woulds put extreme stress on the financial system,however that is not the way it would happen. It is a 24 year time span between 2018 and 2042, so if equal amounts of the bonds were sold every year, this would be about 62 billion per year.This is a substantial amount to be sure, but not enough crash the system.

On the some of the other issues, it really seems to be just a question of ones personal value system. As I have stated before, I believe Thomas Hobbes(1588-1679) had it right --- "Lupus est Lupus Homini. ---Every man a wolf to the other". This is the kind of world to which we should aspire

968@ Belgian message 128321#1283251/19/05; 10:36:46

Unfortenately, I can't find a 40 year historical goldprice chart in Indian Rupee. Can you help me out ?
USAGOLD / Centennial Precious Metals, Inc.Perfect for Valentine's Day. Gold -- the gift that keeps giving year after year.#1283261/19/05; 10:58:05">gold ducat pendants and chain
spikedogA newbie with gratitude and a question#1283271/19/05; 11:03:45

Greetings from a long time lurker and a humble student of the illuminating teachers at the Great Round Table.

First, let me thank all of you for your selfless contributions to this forum. From your exchanges of ideas, theories, and postulations, I have understood how much I do not know!

I was moved to get off of my duff and register as a participant on this forum because of Ari's post #128036 about the ETF goings on and his continual recommendations to "get you some". Courtesy of JK at CPM, I have, thank you.

With respect to much of the talk here about the mounting deficits and its potential impact on the dollar as the world's reserve currency, I have a question about the mechanics of Social Security. Who will buy the bonds that will support the SS system?

TownCrierMarie reminds us that nearly any coin as a pendant is possible#1283281/19/05; 11:03:54

Just ask her!

1-800-869-5115 -- Marie's phone extention is 106


Clink!Social security - the bigger picture#1283291/19/05; 11:21:36

2 points :-

Firstly, the government's accounting is basically a fraudulent shell game, in many ways similar to Enron's. The bottom line is that the government takes money in (mostly as taxes), gives money out, and prints the difference. What happens inside, such as the fiction of one part of the government (the Treasury) paying interest on bonds to another (the SS Trust Fund) is just that - a fiction. You can argue as much as you like about the solvancy of a given program, but, unfortunately, that is moot as it is robbing Peter to pay Paul. Similarly, do you want to pay income tax or employment tax ? What does it matter - it all goes into the same hat ! (OK, I'll grant that there are different formulae for assessment)

Secondly, I believe that the principal reason for discussing SS is because the much larger, and essentially unsolvable, issue is in fact the cost of healthcare. This will bankrupt the government waaaayyyyyy before SS runs into problems. (Or rather, force the printing presses to crank up a notch) But as this issue was supposedly discussed and voted on just a few months ago (using the deliberately (?) low projections from the Administration), politicians can point to the vote last year and say "Well, we've already resolved that" and the news programs have difficulty in re-stirring interest on a "stale" subject.

I refer anyone to Pete Peterson's Running on Empty for an up-to-date discussion on the subject.


TownCrierspikedog -- "Who will buy the bonds that will support the SS system?"#1283301/19/05; 11:53:54

Jim Willie gives some (October) thoughts at the linked article.

key excerpts:

"A titanic battle is underway with US Treasurys. On the bond bull side is the gradually faltering US Economy, which spurs purchase of TBonds and TNotes to bring about lower interest rates. On the bond bear side is an incredible explosion in federal deficits and trade gaps, which is further aggravated by rising prices system-wide. The chart of the 10-yr Treasury Note yield, tracked by the TNX chart, is highly revealing. It displays the battle royal underway....

"Secular deflation is still the beast in the east, as Asian production floods our nation to keep a lid on product prices, and as the growing outsourcing of jobs keeps a lid on wages. ... Monetary growth is monumental, from both the federal budget province and the mortgage arena. We clearly have both inflationary influences at work against deflationary trends. The collection of economists in our land sound as befuddled as the outcomes of their policies are twisted wreckage in a sequence of busts. Central bank intervention to support the USDollar, and to prevent its rapid decline, is played out with US Treasurys as the primary vehicle.

"Government objectives might be more to confuse than to report, to sell Treasury Bonds than to permit the truth to be told. An old Austrian economist recommended that we look at unadjusted economic figures, not treated ones. ... One should be clear, it is a game.

"The July federal deficit was $69.2 billion, the effect of which would ordinarily force rates higher, or crowd out buyers of corporate bonds. That has yet to happen. ...The July trade gap rang in at $50.15 billion, to mark the second straight outsized month (June at $55.2B revised). [November trade gap exceeded $60 billion.] ... Typically, the shortfall is made up by purchase of the most liquid instruments, US Treasurys. Most heavy lifting is done by the Bank of Japan and the Bank of China, where almost half of the trade gap originates. Both the federal deficit and trade gaps have created supply of US$-based financial securities, principally bonds, which grows astronomically. As twin tower debts escalate, which must attract foreign capital, the supply of Treasury Bonds grows. These are the justifications for selling off bonds. With such bond supply increase comes higher interest rates in ordinary times. These are not ordinary times.

"In my analysis, China and Japan hold the key for releasing a flood of consumer price inflation. That key lies in the currency markets, and exchange rates for the Japanese yen and the Chinese yuan. The FOREX for the yen, and the pegged currency regime for the yuan, this is where the natural equilibrium is interfered with. It is the currency markets where shocks will be delivered.

"If and when Asian currencies rise, the impact will be possibly very big indeed in a number of areas. The big impact in the USA will be with consumer prices and long-term interest rates. Fallout extends widely to housing prices and a fresh new force behind gold. GOLD NEEDS A FALTERING BOND MARKET. Asian floodgates will overrun long-term rates when they let loose. To date the Asian currency refusal to appreciate is a massive slipped clutch for the anticipated advance of gold.

"Bond demand continues amidst sluggish economic conditions, in the face of monumental additions to debt supply. Something must give. The titanic battle is being waged in the largest financial marketplace in the world, US Treasurys. ... The credit markets await the outcome of the bond battle underway, not yet resolved.

"Central banks intervene to prevent higher rates, which are extremely justified when federal budget deficits are absurdly out of control, and supply of USTBonds floods the entire world. World financial analysis has been turned on its ear by central bank interference. They have corrupted the entire bond price working mechanism, in a fierce attempt to defend an indefensible monetary system.

"Also, probes have delved into Fanny Mae, which is most likely in receivership, on its accounting statements and on earnings props to assist executive stock option vesting. Bubblevision does not interpret it as bankruptcy receivership, only as probes. Certain reports make it crystal clear. The smoke in the air has led some to conclude that fire rages inside the mortgage finance quasi-governmental agencies.

"Asians are getting restless and frustrated with their US trade partners. In fact, one could say the Asian community is getting uncomfortable with the US Welfare nation they have allowed themselves to support and become dependent upon. They control the outcome of the bond conflict much much much more than the US press & media tells us. Such is the consequence of losing our manufacturing base, and running up large debts held by foreigners. Credit masters are in control, and will continue to be. Understanding Asia is to correctly grasp big changes that lie over the horizon, a primary focus of my attention."

------(see url)----


Gandalf the WhiteWELCOME Sir Spikedog !! <;-)#1283311/19/05; 11:57:36

Welcome to the TABLEROUND !
In answer to your Question -- "WHO will "BUY" the Bonds that support the SS System ?"
THE answer is the SAME as NOW and the PAST !
The US Officials will take the cash from the individuals accounts and replace it with a "PIECE of PAPER" (T Bond), and use the cash for any purpose that they wish !!!
Nothing will be changed !
Purchase or BUY is not the true method -- STEAL is a better discription !

Gandalf the WhiteTC --- You are far toooo fast on the replies !#1283321/19/05; 11:58:48

TownCrierAlso for spikedog...#1283331/19/05; 12:01:10

In addition, I should like to say "Welcome to the Forum"! Thanks for demonstrating how easy participation is. (And thanks for choosing USAGOLD-Centennial Precious Metals as your gold brokerage). I hope you will continue to share your thoughts, and that others will be inspired to join in.


Gandalf the WhiteWOWSERS -- LOOK at the US$ "PAINT JOB" today !#1283341/19/05; 12:03:41

Looks as if the PARTY in D.C. has started EARLY !!!
Is the TOP about 84.1 ?
AND, then the fall to - 80.
YELLOW will shine SOON !

Federal_ReservesGM setting up shop in CHINA.#1283361/19/05; 12:44:04

Won't be long until all the Auto jobs are gone from America.

The rich folk are shutting America's production down. Selling out US jobs to communists in China. Its insansity really. I can't figure it out. Does anyone in charge have a brain?

GM likely to go broke. Their debt is being constantly downgraded as they rush to globalize.

Belgian@968#1283371/19/05; 13:05:24

Hope the link works.
USAGOLD / Centennial Precious Metals, Inc.Request your FREE info packet today and get your portfolio diversification strategy started on the right foot.#1283381/19/05; 13:05:34">Get a head start on the gold market!
TownCrierChina may revalue yuan after Feb holiday - says Medley#1283391/19/05; 13:52:26

LONDON, Jan 19 (Reuters) - China could revalue its yuan currency by as much as five percent against the dollar any time after the Chinese New Year in mid-February, according to a report by New York-based consultants Medley Global Advisors.

Medley sent the report to clients on January 19. A source, reading from the report, told Reuters it said: "At this moment our information continues to be that Beijing is looking at a de facto one off revaluation of around five percent."

"It is also clear to us based on our conversation over this past weekend that while no specific time-table has been set out for the revaluation the move can come literally at any time after the Chinese New Year," the source quoted the report as saying.

The Chinese New Year begins Feb. 9 and ends Feb. 16. Chinese markets are closed from Feb. 7-15.

If China were to loosen its currency peg the general market consensus is that the yuan would rise in value, making China's exports expensive.

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

Because things of this nature are political events, trying to predict accurate timing is an exercise in futility. Therefore, the best you can do is to prepare your portfolio NOW, ahead of the inevitable transitions, and you will thus be sleeping well each night and sitting pretty when you read each morning's headlines.

Call USAGOLD-Centennial to discuss portfolio diversification with a broker today. There is no trading account or advanced set-up required in order to become a gold owner. Just pick up the phone and make a toll free call to discuss your objectives and your gold is in the pipeline for secure delivery to your door. It's that easy.



TownCrierCurrency order at stake at the G7#1283401/19/05; 13:59:44

PARIS, Jan 19 (Reuters) - French Finance Minister Herve Gaymard said on Wednesday he hoped the United States would agree at a G7 meeting in London next month that the slide in the U.S. dollar must not continue.

"I'm counting a lot on the G7 meeting to be held in London in early February that our American friends realise the necessity to react because this slide of the dollar must not continue," he told LCI television.

He said the European Central Bank (ECB) could not cushion the blow of changes on currency markets by itself "because we're in a global game with three areas, Europe, the United States and Asia."

Gaymard also said that Paris would cut taxes in the next two years "no matter what happens" and would reduce unnecessary spending to help deal with the cost.

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

In the end, ALL national currency systems slide downward against tangible goods. Choose gold -- the most liquid and economically utilitarian of all hard assets. Ask for krugerrands, ask for Eagles, ask for gold sovereigns and gold franc coinage... USAGOLD-Centennial has it all at prices to bring home with a smile.


USAGOLD Daily Market ReportPage Update!#1283411/19/05; 15:00:43">
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.

Wednesday market excerpts

Gold futures climbed to their highest level in a week Wednesday, but ended the session narrowly lower as mixed U.S. economic data provided a modest lift to the dollar.

U.S. consumer prices fell 0.1 percent in December, led by weaker gasoline and heating oil prices. But first-time claims for state unemployment benefits plunged 48,000 to 319,000 last week and the nation's housing starts rebounded in December, rising at the fastest monthly rate in more than seven years.

Overall, the U.S. data did little to argue against another Federal Reserve interest-rate increase next month, but also fell short of convincing the currency market that the U.S. central bank will be more aggressive with policy.

Against this backdrop, COMEX February gold shed 20 cents to close at $423.30. Earlier, it reached a high of $427.20.

Peter Grandich, editor of The Grandich Letter, says the dollar had "every reason to rally" off the day's economic numbers but the greenback moved only modestly higher against its currency rivals. This could suggest that the dollar "remains firmly in a secular bear market and has been simply correcting a very oversold condition that is nearing completion," he said. So "look for gold to back and fill some more and then renew its secular bull run."

The recovery in the dollar may be "petering out," said Brien Lundin, editor of Gold Newsletter, with the currency failing to gain much ground despite a spate of dollar-bullish news over the past several days, "including hawkish pronouncements from Fed governors, the prospect of escalating interest rates this year, and a flood of dollar-buying from overseas investors in November."

"Investors are realizing that fundamentally, nothing has changed with regard to the dollar's bearish prospects," he said.

And if good news can't really lift the dollar, "then the first sign of bad news will surely send it lower," so more and more, "traders' bets are being placed on the side of gold," he said.

------(see url for 24-hr international economic newswire)----


Warren Buffett sees no way but down for US dollar-- Channel NewsAsia - Business

Buffett says dollar to decline further amid trade gap-- Business Today

Dollar tops worries for big banks-- The Globe and Mail

Fed says Economy Picking Up Steam-- - Money

Stocks lower as investors weigh good economic data against mixed earnings-- North County Times, California - Business

Bank of Japan: Treasury prices fall after inflation data --

ECB not obliged to raise interest rates: chief economist-- Channel NewsAsia - Business

spotlightSoc. Sec. IOU's#1283421/19/05; 15:05:50

Shortly before the Secretary of the treasury, Paul O'neil, left office, (was fired?) he declared, "There are no marketable securities in the Soc. Sec. Trust Fund."

The IOU's in the fund are backed by the full faith and credit of the tax payers.

What is your source for the $1.5 trillion worth of US treasuries?

TownCrierWarren Buffett sees no way but down for US dollar#1283431/19/05; 15:10:35

WASHINGTON : The dollar cannot avoid further declines against other major currencies unless the US trade and current account deficits improve, legendary investor and businessman Warren Buffett said.

"I think, over time, unless we have a major change in trade policies, I don't see how the dollar avoids going down," the world's second-richest individual told CNBC television.

"I don't know when it happens. I don't have any idea whether it will be this month or this year or next year, but we are force-feeding dollars on to the rest of the world at the rate of close to a couple billion dollars a day, and that's going to weigh on the dollar."

Buffett, nicknamed the Oracle of Omaha for his investment acumen, has a net worth of some 41 billion dollars...

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

As stated earlier about timing -- even Warren Buffett can't pin this tail on the donkey.

Mantra: Therefore... the best you can do is to prepare your portfolio NOW, ahead of the inevitable transitions, and you will thus be sleeping well each night and sitting pretty when you read each morning's headlines.


CamelSpotlight#1283441/19/05; 15:32:16

All I know is what I read in the newspapers. Its been in dozens of newspaper and TV articles.Next time one appears I will post it, but I don't have time to go jump through some hoop just because you want me to. Maybe that is why he was fired.
TownCrierSpolight... Social Security#1283451/19/05; 16:16:51

All I ask in return is that you try to remember who it was that took some time to help you out on this one.

Here's a link to the Summary of the Social Security 2004 Annual Report to the Trustees.

More significant on the budgetary and U.S. bond scene than the point where the Social Security adminstration finally exhausts its "savings" of special U.S. Treasury debt obligations is probably the simple tipping of the balance where declining annual Social Security tax surpluses are no longer available to help the U.S. Treasury balance its general budget. Instead of having a regular customer to whom it can peddle a large share of special debt obligations against its general budget-tax shortfall, all else being equal, the Treasury will be faced with flooding the open market with a larger supply of regular bonds. A larger supply to be mopped up by weary customers spells a collapse in bond prices. Will the Fed have to become the buyer of last resort? That spells monetization ---> hyperinflation.

To be sure, the Treasury's budget situation will only be further aggravated when the Social Security administration actually begins tapping the Treasury to redeem its special obligations for cash to meet the administration's upcoming annual cashflow shortfalls.

The Social Security Administration says it best themselves:

"It is very important to remember that Social Security was never intended to be your only source of income when you retire. Social Security can't do it all. You also will need other savings, investments, pensions or retirement accounts to make sure you have enough money to live comfortably when you retire."

And if the value of the dollar will be declining due to goverment budget imbalances and Fed debt monetization, the best form of savings to help see you through is physical gold -- universally recognized as good value in a world where all other financial reserves are printed (or digital).


Black BladeBillion-dollar deficits greet several states#1283461/19/05; 16:55:28


Spent too much over the holidays, and the flood of credit card bills getting you down? A bigger financial hangover is awaiting legislators in nearly a dozen states who will return to work in 2005 to face billion-dollar deficits as they write their upcoming budgets. California sports the most red ink, with an estimated $9 billion budget shortfall, followed by New York and New Jersey with a looming deficit of $4 billion each.

Black Blade: I don't know if this has anything to do with it, but the states in the deepest doo-doo are "blue states". Nevertheless, most politicians love to spend regardless of the ability to pay. "Red" Davis the former Governor of Kalifornia and the state legislature did not help matters any by implementing socialist policies. The only state operating in the black is Wyoming where they are required by law to save a portion of revenues from the mineral "severance tax" and new or additional taxes must pass a vote of the people.

Don't let this happen to you – get outta debt and stay outta debt, stash enough emergency cash for several months household expenses, accumulate Gold and Silver "portfolio insurance", and start a storage program of nonperishable food and basic necessities.

TownCrierMore Social Security info#1283471/19/05; 17:01:33

Q: Should I count on Social Security for all my retirement income?

A: No. Social Security was never meant to be the sole source of income in retirement. It is often said that a comfortable retirement is based on a "three-legged stool" of Social Security, pensions and savings. American workers should be saving for their retirement on a personal basis and through employer-sponsored or other retirement plans.

[Randy's note: Given that two-thirds of this suggested "stool" is dominated by varying degrees of depreciable, defaultable, bankruptably paper securities and corporate equities, it is all the more wise to ensure your trusty third leg is as good as gold.]

Q: Does Social Security have dedicated assets invested for my retirement?

A: Social Security is largely a "pay-as-you-go" system with today's taxpayers paying for the benefits of today's retirees. Money not needed to pay today's benefits is invested in special-issue Treasury bonds.

Q: Is there really a Social Security trust fund?

A: Yes. Presently, Social Security collects more in taxes than it pays in benefits.

The excess is borrowed by the U.S. Treasury, which in turn issues special-issue Treasury bonds to Social Security.

These bonds totaled $1.5 trillion at the beginning of 2004, and Social Security receives more than $80 billion annually in interest from them. However, Social Security is still basically a "pay-as-you-go" system as the $1.5 trillion is a small percent of benefit obligations.

Q: I hear that Social Security has a big financial problem? Why?

A: Social Security's financing problems are long term and will not affect today's retirees and near-retirees, but they are very large and serious. People are living longer, the first baby boomers are five years from retirement, and the birth rate is low.

The result is that the worker-to-beneficiary ratio has fallen from 16-to-1 in 1950 to 3.3-to-1 today.

Within 40 years it will be 2-to-1. At this ratio there will not be enough workers to pay scheduled benefits at current tax rates.

If Social Security is not changed, payroll taxes will have to be increased, the benefits of today's younger workers will have to be cut, or massive transfers from general revenues will be required... [...thus futher burdening the Treasury with the "difficulty of generating General Revenue for the redemption of Trust Fund investments".]

Q: Social Security's future challenges are caused by the aging of our population. Do other countries have similar problems?

A: Yes. Most countries in Europe, as well as Japan, have more serious challenges than the U.S. Even some developing countries are starting to face up to the aging of their populations.

Q: What are these other countries doing to face their challenges?

A: Many of these countries have begun to prefund their social security plans. More than 20 countries, including Britain, Australia and Sweden, have established versions of personal accounts.

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

With the threat of currency depreciation in the wake of national fiscal strains that often bring about heavy monetization of budgetary debt, choose physical gold as the foundation of your personal savings regime.


Black BladeBush faces key economic challenges during second term#1283481/19/05; 17:04:36


WASHINGTON (AFP) - President George W. Bush (news - web sites) can hope that the dark days of the US economy are behind him, although twin deficits and a weak dollar are casting dark shadows over the world's biggest economy as he begins his second four-year term. The US twin budget and trade deficits, which have grown to record levels since Bush came to office, are key problems facing the president. He has promised to halve the budget deficit in five years, mostly by restricting spending, but having a Republican majority in both houses of Congress does not guarantee fiscal frugality. The twin deficits have weighed down the dollar, worrying trade partners who want the United States to live within its means.

Black Blade: All I can say to Dubya and Snow is "good luck"! Ain't gonna happen! The very idea of a "strong dollar policy" is absurd to the utmost. The twin deficits are beyond recovery at this point and the US dollar is down the loo so to speak. This will make the "portfolio insurance" of physical Gold and Silver all that more imperative for your economic survival. For a few ideas check out the Castle Treasury here at USAGOLD - I like bullion, US Gold Liberty coin and Silver Morgans meself.

Black BladeProperty tax valuations spark senior revolt#1283491/19/05; 17:09:14


Appeals filed on behalf of 863 who answered call to protest

"Vegas Voice" publisher and editor Dan Roberts, right, shakes hands with Clark County Assessor Mark Schofield as he turns in more than 800 appeals of assessed valuation on Tuesday, the last day for submitting challenges of notices of value.A tax rebellion of the senior kind unfolded Tuesday in the the Clark County assessor's office.

That's where Dan Roberts, publisher and editor of the senior citizen newspaper Vegas Voice, submitted appeals on behalf of 863 individuals who answered his call to protest skyrocketing assessed valuations. "The amount is too high, exorbitant and unfair!" Roberts, who described his paper as an advocate for senior citizen rights, said the valuations for many of those who agreed to submit appeals went up by 20, 30 or 40 percent in the course of just one year. Those increases will be reflected in the property tax bills that go out in July and are an expense that many on fixed incomes can ill afford, Roberts said.

Black Blade: Ah come on! Be a sport - click your heels together three times and repeat after me: "there is no inflation - there is no inflation - there is no...."

TownCrierForeign flows -- "...the highest since 1997, just before the Asian financial crisis."#1283501/19/05; 17:13:07

WASHINGTON, Jan 19 (Reuters) - Foreign investors sought out alternatives to U.S. dollar assets in the final months of 2004 as the greenback fell, diverting capital to China and Russia, a global association of financial institutions said on Wednesday.

According to figures released by the Institute of International Finance, private capital flows to emerging markets surged to $279 billion in 2004...

Overall, private flows are up 32 percent from 2003 and the highest since 1997, just before the Asian financial crisis.

The U.S. depends on foreign investors buying U.S. assets like Treasury bonds to finance its current account deficit, but analysts have noted a rise in money leaving U.S. shores because of the weaker dollar, which could add to the currency's woes.

But a U.S. Treasury Department report this week revealed that net inflows of capital into U.S. assets unexpectedly rose $81.0 billion in November...

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

More money flowing abroad AND more money coming into the U.S. ... Simply put, there is more money being created to flow in every which direction. Therefore -- as the monetary consequences (real depreciation) are yet to come -- seek lasting value and choose gold.


TownCrierRE: Black Blade's (msg#: 128349) property tax revolt#1283511/19/05; 17:25:09

"(property) valuations ... went up by 20, 30 or 40 percent in the course of just one year. Those increases will be reflected in the property tax bills that go out in July and are an expense that many on fixed incomes can ill afford, Roberts said."

Another good reason to choose gold. Unlike real estate, it is a tangible property that requires no annual maintenance expenses and is not assessed with property taxation.

"Good as gold" is barely understood by the investing public at large, but they are slowly and surely catching on as reflected in the observable volumes seeking gold coins through USAGOLD-Centennial with each passing month. We invite you to join those acting upon common sense as the responsible steward of your portfolio.


GoldendomeWho will be -- the Greater Fools?#1283521/19/05; 18:01:07

The problem with the dollar valuation of the bonds accumulated with the excess SSI taxes (whether it be 1.5 or 5.1 trillion) is that when the government goes to "cash" them out to pay benefits as the program runs into deficit, is this: You have to find "a greater fool" to buy them.

When the ssi (and the Medicare program) tip from accumulating excess money used in the general fund currently to lessen the official gov't deficit, and goes neutral, and then begins to run even a slight deficit in the program----What is that going to do to the U.S. gov't deficit??? Many here have already speculated (and I believe us correct) that if the budget is not seriously adjusted, the United States could see Federal budget deficits approach a Trillion, that's $1,000,000,000,000 per year!!!! I wonder (doubt) that even the collective Asian countries won't choke, big time, on those amounts. And, that's not even considering accumulating interest!!

Now, If the government is running deficits at any level approaching the above mentioned, just who in the hail--storm, is going to be the "greater fool"? Who would have the money (or confidence) to fund the trillion dollar federal debt--and then--AND THEN--step up to cash out the so-called, SSI trust fund treasuries??? True enough, they all won't need cashing at once, but the daunting numbers, I argue, will perhaps make it difficult to cash any, at reasonable rates.

The truth is, and many of us are only coming to recognize it too late, that the increased taxes for ssi that we have been paying over the past twenty years, was not saved for ssi; the money simply was spent. The excess taxes charged us "to better secure the future of ssi" has in fact, made us all much less secure....That excess tax money encouraged government to spend all the more; create new and expand existing programs under the cover of stealing the excess purchasing power to fund them. We all would be better off today had the system continued down the dead-end road that it was on when changed back in about 1982.

It is difficult to see a good outcome for this Ponzi scheme (who can remember a good outcome for one?) Early participants are usually the winners; later participants usually are harmed.

As I pointed out last evening, the train coming through the tunnel is probably loaded with some combination of tax increases, benefit cuts, means testing, AND has a hundred coal cars loaded with inflation. The only way the gov't will meet the needs in the long run is to inflate. Send out the checks; print up the money. Watch the purchasing power erode.

You know the drill: Get Real...and hold it!

Black BladePrecious metals ready to rally in ‘05#1283531/19/05; 20:00:00


Most other precious metals followed gold higher in New York futures trading last year but the outlook for 2005 is decidedly uncertain. Gold soared more than 63% to an average of $410 for all of 2004. Many analysts acknowledge that gold, like any other asset that has rallied strongly, could experience a pullback early in 2005 and then rally by 7% or so for the year. Other precious metals also are considered ripe for increases in 2005.

Black Blade: I see it could spike much higher as now the gloves are off. The supply side of the story is more important with declining production and hedgers will continue to liquidate forward contracts. Mesnwhile the US dollar has much further to fall as it is at a minumum 11+% overvalued. Then as the Fed governors are pointing out - interest rates must rise and inflation is more a threat than suspected.

Black BladeLarge Specs Might Be About Done Liquidating Gold#1283541/19/05; 20:07:37


BEND, Ore. (Dow Jones)--Now that large speculators have liquidated a substantial portion of the net length they held at one time, gold futures soon may be able to put in a base, if they haven't done so already, say analysts. The market may even be able to start working its way higher again, although much of the future direction will hinge on the U.S. dollar, they add.

Black Blade: There's more to the story than meets the eye here. I stated before that the specs and institutional players (hedge funds and fund managers) would be adjusting portfolios in January and that appears to be the case. Even the GLD ETF may be having some impact as well, but it is also a matter of deep uncertainty in economic data. Could be an exciting, interesting and entertaining year in the PM markets.

Black BladeIndia's Wedding Season Boosts Gold Jewelry Sales 5% #1283551/19/05; 20:12:57


The Indian wedding season, which runs from November to February, is a vital period for the local retail jewelry industry, during which 60-70 percent of the country's annual gold consumption of around 600 tons is turned into jewelry. Gold jewelry gifts are a traditional present for couples, with parents giving gold jewelry to brides to provide financial security. Indian retail gold jewelry sales during the current wedding season are up around 5 percent, according to major jewelry manufacturer InterGold.

"Gold is a traditional gift given at all weddings from the lowest to the highest [classes] and we have seen a rise of 4-5 percent," said Amar Kothari, InterGold Chief Operating Officer. The rise in demand for gold jewelry during the current wedding season is in stark contrast to last year which saw a decline in orders of more than 20 percent due to higher gold prices. Since the price of gold has remained high, however, customers are now seeing it as a worthwhile investment. The precious metal is currently trading at $424 per ounce.

Black Blade: So much for the dreaded "tsunami effect".

BelgianGold poised to stay stronger than gold shares ? Aden#1283561/20/05; 00:17:24

Or in other words, the metal has been outperforming the paper. Watch the details (dates and patterns) on the Aden chart (link) since 1969.

This ratio, goldmine paper / goldmetal, is telling us that it is "the paper" that has permanently. Remember coca cola (standard) at 5 cents in 1960 and 85 cents, now. Coca cola permanently outperformed the paper in wich you have to exchange it.

No wonder that W.Buffet is warning about the globe's dollar currency ! Note, that the G-7 is coming. The (misplaced) fingerpointing from the French corner, to the US and its dollar management, is a funny little sign (?).
Funny, because I stick to the theory of the coming new gold era.

What if,... the concept of "gold-wealth-barter", would become a tool to democratize the Middle East, make a basket of digital currencies more credible and solve the social security and global debt problem !?
Goldmetal as the "universal security" instead of "speculative" metal !?

It is impossible to go back to any kind of "hardening" of any form of fiat, without having modernized gold coming back. The present achieved relative order on the world's dollar currency, is changing nothing on what causes the permanent detoriation of the currency. The Aden chart seems to confirm this. How else can we interprete the fenomenon ?

Last night, I saw a documentary about the social situation in Iran. What struck me was a simple man asking if he had to pay in currency or gold, for an ordinary service.
Why shouldn't we "modernize" gold !? Remember that the ECB and its members are both holding goldreserves and that the mtm-concept of these goldreserves is the key to open the door for the new modern "universal" goldmarket, once the currency detoriation results in hyper price inflation. Asian production of consumeables and the owners of energy resources, will not hesitate to inflate their prices, when a modernized gold-concept + new numeraire is ready for functioning. Unfortunately, Buffet was not referring (hinting) to any solution, after he warned about currency detoriation.

968@ Belgian#1283571/20/05; 01:46:21

Morning Belgian,

I'm still looking for the paradox in BB's article on the goldgrams. Do you mean the goldprice in rupees in constantly rising (compensating inflation) since 71, while the dollar POG hasn't compensated inflation over the years ?

Belgian@ 968#1283581/20/05; 04:01:19

It is all about "gold = money" thing, 968.
We are getting more and more confused about what exactly "money" is. When one says "water" many different kinds of water do you know...and about wich kind of "water" (money) is the speaker talking ?
Same goes for gold=money.
The writer of the article realizes that valuable oil should be exchanged for equal value. Why should oil go for gold, if gold = money and gold or money is NOT representing de facto the "value" it should be expressing.

The Indian fiat rupee is functioning as a currency should. Their gold-wealth is also functioning as it should...inside India (chart) and not on the global scale, where the Indian gold-wealth holders has to exchange his gold for debt dollars with less purchasing power.

Oil for goldgrams needs freegold...universal free gold pricing in a numeraire (€) that evolves in parallel with gold and not in opposition of gold ($).

Yes, the conventional wisdom should be that gold = money ! But we must also "experience" this as such ! And this is not YET happening. An original Rubens painting is money ! These kind of valuables are traded in a *free* market, whatever the currency is, that pays for it...whatever the amount of imitations (cfr. papergold) that are produced. There are no derivatives on these type of valuables. The wealthy simply consolidate their wealth in a wealth tangible.

The writer of the article is convinced that gold is the result of a free market process and not the result of political actions. How can this good man be so paradoxal in his observations and the existing realities gold (and oil) being "the" political tangibles par excellence !? He is generalizing (globalizing) the Indian situation.

The past 25 years, we experienced a relatively flat-horizontal goldprice in the major currencies. This should be (falsely) interpreted as that those major currencies are still real "money". That is the one and only reason WHY gold and its price had to be managed by the illusion (perception) of currency being as good as (hard) money !!!
Currencies strong in gold ! And since everyone accepts that currencies are a political event and therefore under constant management...why should gold (price and pricing) be the result of a free market process within the unfree currency arena ? Paradoxal, no.

But, here we go free or unfree are "markets" !?
The answer is relatively simple : Those who control the fiat supply, decide on the degree of general unfreedom.
Markets (supply and demand) are not genuine markets anymore, when they are dominated by an all embracing supplier that ridicules the demand. I call it simply the debt-driven-political-economy ! Says what it is.

Day after day,...after day, we continue to repeat those same mantras of "stimulating" economic activity. We just keep on providing more debt upon debt as to keep the planet turning. Freegold is going to change this muddling on as the debt-bergs cannot be pushed forward anymore by a level playing field global economic activity. W're getting stuck in our old system, 968 ! It is actually as dramatic as it sounds. Beware of the many "great pretenders" out there. This time, w're not going to fix it without functioning as wealth as it still does in India for example. The West is not that smarter than the so called third world. This is slowly but surely being evidenced by now. The new, modern, gold-concept has been architected and its role (function) will be implemented, globally now.

The pillars that supported the globalizing dollar-system for so long, are crumbling. Sify-article : goldgrams can be used to measure financial assets as well...
I don't know if the writer fully realizes the importance of what exactly he is saying !
It is not the present zigzagging (rising) goldprice that indicates that D-day is here. It will be the sudden explosion of the goldprice that will tell us that freegold is there. Amen.

spotlightSocial Security Trust Fund#1283591/20/05; 04:02:14

I have a question about this excerpt from your recent post.
Q: Is there really a Social Security trust fund?

A: Yes. Presently, Social Security collects more in taxes than it pays in benefits.

The excess is borrowed by the U.S. Treasury, which in turn issues special-issue Treasury bonds to Social Security.
Was the former Secretary of the Treasury wrong when he said,
"There are no marketable securities in the Social Security Trust Fund" ????

TopazGold again showing strong.#1283601/20/05; 04:56:24

Our alt currency Gold slowly climbs (currently B353.22).
968Rand key to gold output stability #1283611/20/05; 06:59:48

Production decline 33% over decade
January 19, 2005
By Eric Onstad

Johannesburg: Gold output in South Africa is expected to fall slightly this year, but a bigger slide is threatened if the rand extends its bull run, a government expert said yesterday.
SA gold production could nearly stabilise this year with a buoyant dollar gold price and a stable rand, Alex Conradie, chief mineral economist with the Department of Minerals and Energy, told Reuters.
The country has seen production tumble by over a third in the past decade as high-grade mines run out of ore and firms have to dig deeper to find new deposits.
This year output is forecast to slip only three tonnes to 363 tonnes, a decline of 0.8% after an estimated fall of six tonnes, or 1.6%, in 2004. Final figures for last year are not yet available. "But I think that there is definitely a danger that it could fall further (in 2005) with a stronger rand," Conradie added.
The main factor in knocking output over the past few years has been the rampaging rand, one of the world's best performing currencies, which has strengthened 127% against the dollar since late 2001.
A strong rand, which rallied by 18% versus the greenback in 2004, slashes local income from dollar sales of gold, making some mines unprofitable and vulnerable to closure.


Last year the largest domestic gold producer, Harmony Gold, announced downscaling at six unprofitable shafts that had been producing a total of 220 000 ounces (6.84 tonnes) of output per year.
But this year Conradie expects the rand to stabilise at an average of R6.00 against the dollar, not far from its midday level yesterday of R6.08.
He also projects the dollar gold price will average $447 per ounce in 2005, up from current levels just above $420 and near a peak achieved late last year.
"That is because of continuing instability, geopolitical reasons, especially the situation in Iraq, and also the US economy with the dollar weakening," he said.
That would result in a domestic gold price of around R86 000 per kg, compared with just over R82 000 currently and a range of around R100 000-R75 000 last year. Gold production, however, could fall further if the rand extended its three-year march higher, but Conradie said no estimates were available under those scenarios.
Conradie sees the long-term downward trend continuing, with production down by 4.4% to 350 tonnes by 2008, when he projects the local gold price slipping to R80 000.
It would take a gold price of over R100 000 to significantly stem the decline, he added.
South Africa's share of global gold production has shrunk to under 15% from 27% in 1993, but the country still dominates the world in terms of reserves - underground deposits yet to be tapped - with 40%.
Again the dollar-gold connection : weak dollar --> gold stronger.

@ Belgian :
Belgian, how can we see gold NOT in a monetary environment ?
"Gold and its pricing has been made dysfunctional, through the monetization of gold. Gold only contributes "symbolically" to the credibility of the total debt by being put into the same big bag. That's exactly the reason why so little people don't see any reason to hold goldmetal in their portfolio as the representation of their wealth."

A Rubens painting has a certain value in money terms. How can you have a store of value with no monetary connection ? There has to be some kind of system to what you can derive the value of your wealth ?
This morning you said : "We are getting more and more confused about what exactly "money" is."
The same can be said about "wealth". What is wealth ? Is wealth only composed out of things of value ? Do we have to eliminate all concepts of value like bonds, T-bills,...
If Freegold is a fact, and everyone wants to store its money in gold (as store of value), how can e.g. the Belgian State function to issue its bonds ? Who will buy these paper bonds ?
How will Freegold "neutralise" the ever growing debt mountains ?
Looking forward to your answer !

968@ Belgian / Addendum#1283621/20/05; 07:15:35

The MTM concept of the ECB is in fact a form of gold competing with fiat money.
phil288spotlight#1283631/20/05; 08:38:39

Key word is "marketable" they are special purpose bonds which I believe pay no interest and thus are simply an IOU from one pocket of govenrment to another. They are not marketable to anyone else, and thus have even less value than fiat currency since they can not buy anything. Got gold!
Belgian@ 968#1283641/20/05; 09:51:58

To answer your question(s), I would have to rewrite almost everything all over again. Re-study A/FOA from the beginning.
Just ask yourself .... what is the < wealth-difference > between any piece of paper and a goldcoin in your fist...over time ? Has any goldcoin ever reached zero value ?
Is paper more reliable, valuewise over time, than goldmetal in hand ?
Why do you assume that each and everyone will rush to (free)gold and hold the metal for ever ? Freegold, means a free market-pricing in goldmetal.

I will certainly want to hold stock in a company that can produce reliable profits in a free-market economy.
I will certainly want to hold a debt-paper that delivers a reliable and just income (not negative IRs). There never was anything wrong with "productive" debt.

Of course we need a numeraire (currency) that stands between the barter in a trade ! Fiat or any other paper will not be abolished ! But more and more paper is saying less and less what your real worth really is. We are condemned by the financial/monetary industry, to keep on speculating succesfully with our papers in order to break even on the permanent paper depreciation and the increasing unreliability of paper. That same f/m industry is sabotaging the gold-wealth market in functioning properly.

A free goldmarket, where the pricing of physical metal is allowed to permanently find its equilibrum, gives goldmetal its wealth status. Then, wealth is automatically marked to the market, correctly...without having...being forced to,...speculate (read gamble) to have one's wealth remained intact. Under these circumstances, gold-wealth functions as a real reserve and real expression of your wealth.

What made the dollar what it is, outside America ? First its history with gold, then oil. What will make the euro ? That same oil and gold, but in another concept that stands diametrically opposite to the existing dollar-oil-gold concept. Low gold supported the dollar, high gold will enhance the euro. Oil has already made its choice.

Did this help a tiny little bit ? (Amaai zenne)

Gandalf the WhiteTHANK You, Sir Phil288 !!#1283651/20/05; 10:16:28

phil288 (1/20/05; 08:38:39MT - msg#: 128363)
Many have helped Sir Spotlight to understand the truth to his first Question about SS and my first answrer about who will "BUY", (or the GAME of STEALING) the moneys from the SS Trust.
Sir Spotlight, Do you now understand ?

Gandalf the WhiteThe US$ chart at the above LINK --- <;-)#1283661/20/05; 10:28:33

Looks to this "Reader" to be nearing the 84.1 TOP as the D.C. PARTY celebration continues.
One must not yet let the US$ slump !
Yellow is SOON SHINE !

spikedogSS posts - one and all#1283671/20/05; 10:31:29

Sirs Gandalf, TC, Phil288, et al.

To summarize: the "special" bonds in the SS "trust fund" have less "marketability" then the regular bonds offered up for sale. Therefore, the only entity that will likely purchase them (to fund the SS system) will be the FED through monetization. Of course, this will mean more printing of dollars - making the dollars you get from SS (and everything else) worth even less. What a mess!

Am I on track here? Thanks for your patience.

BTW, thank you all for the warm welcomes.

TownCrierCongratulations to all who got in on this offer#1283681/20/05; 11:34:55

The Netherlands gold trade ducats offer went over very well, with this special allotment of coins selling out in under two days. Contratulations to the new owners -- these are nice coins. On a related note, a few years ago I had personally been able to acquire for myself a few of these that came up for grabs, and I found that they were particularly well-suited as gifts. And speaking of gifts, someone in the office had the very bright idea to add a bezel and chain for a few of these to be treated as pendants, several of which are still available. A handy thing with Valentine's Day being three weeks away. Click or call. 1-800-869-5115


TownCrierspikedog#1283691/20/05; 11:50:19

Actually, the "special" bonds are so "special" that they have no marketability at all. They are non-negotiable debt securities between the Treasury and the Social Security Administration which can only be redeemed by presentment from Social Security to the Treasury.

At that time, assuming this extra avenue of payment obligations will only but further strain a Treasury that's already in deficit, to raise the needed cash it will probably seek recourse in issuing an additional supply of normal bonds to the public in its regularly scheduled calendar of debt refinancing operations. Borrowing from John, Juan, Sean, Hans, and Kim (and the Fed if necessary) to pay our retired Peter, Paul and Mary.


Black BladeWarren Buffett sees no way but down for US dollar#1283701/20/05; 11:55:46


The dollar cannot avoid further declines against other major currencies unless the US trade and current account deficits improve, legendary investor and businessman Warren Buffett said. "I think, over time, unless we have a major change in trade policies, I don't see how the dollar avoids going down," the world's second-richest individual told CNBC television. "I don't know when it happens. I don't have any idea whether it will be this month or this year or next year, but we are force-feeding dollars on to the rest of the world at the rate of close to a couple billion dollars a day, and that's going to weigh on the dollar."

Black Blade: Definitely.

TownCrierspotlight, only just now have I seen your 128359 post to me#1283711/20/05; 12:05:18

The SecTreas was correct. There are no marketable securities in the "fund". Please see my explanation to spikedog.


spikedogTownCrier#1283731/20/05; 12:29:29

Crystal Clear. Thank you for tying it all up in a neat little package.
melda laure"Some Easter Beagle! He gave me MY OWN EGG!"#1283741/20/05; 13:21:39

Q: Is there really a Social Security trust fund?

A: Yes. Presently, Social Security collects more in taxes than it pays in benefits.

The excess is borrowed by the U.S. Treasury, which in turn issues special-issue Treasury bonds to Social Security.

It is probably more correct (from an accounting standard) to say "the excess is spent by congress." How Treasury accounts for this FACT is splitting hairs. The first and foremost FACT must be that the "trust fund" is not an asset. It is a LIABILITY. At best it is just a missed opportunity.

Imagine you were to liquidate your 401K and write yourself a "note" for the same amount and you bury this scrap of paper in a jar in your backyard. You then spend your 401K money on pretzels and beer, and refer to the "I OWE MYSELF" note as "my trustfund". That's about how much credibility the trust fund has.

You can not "save" your own IOU's... That is, you can not call them "savings" (if you are an honest accountant)
Uncle Sam can not do it either.

TownCrierDollar repatriation#1283751/20/05; 13:40:18

NEW YORK, Jan 20 (Reuters) - Drugmaker Johnson & Johnson said on Wednesday it would repatriate about $11 billion in past earnings, while Pfizer said it might bring in up to about $38 billion.

"What is interesting is everybody detailing what they will bring back," said Andrew Busch, global FX strategist with Harris Nesbitt in Chicago. "There is a tremendous amount of money out there that could flow back into the United States, which has gotten it on everybody's radar screen," he said.

Busch expects about $200 billion of such flows into dollars as U.S. companies take advantage of this year's tax break.

A tax cut signed by U.S. President George W. Bush last year encourages multinational companies to return earnings from foreign subsidiaries to the U.S. at a tax rate of 5.25 percent instead of the normal 35 percent top corporate rate.

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

The taxation rationale may be that it is better to actually get 5.25 percent out of this pool rather than leaving it effectively untaxed in overseas accounts as it continues to evade the 35 percent burden.

Tax strategies aside, however, the point of this post is to raise the issue of what effect these repatriated billions may have on the domestic price inflation front.

In a wave-tossed stormy sea of paper, find security on a bedrock mountain of gold.


TownCriermelda laure, that's exactly right#1283761/20/05; 13:53:44

The point I was trying to convey was that the financial postion of the Social Security fund and the financial position of the Treasury should not be viewed as independant of one another, as they are effectively each a pocket in the same pair of pants. If one pocket (SS) has $20 cash while the other (Treas) is empty, and then the $20 is transfered to the empty pocket and replaced by an "asset" in the form of a $20 IOU, the aggregate value of the pants as a whole has not magically become $40. And to be sure, Social Security and the Treasury must be viewed as parts of the same federal government Whole.

Your buried backyard jar is a very good example that in the big picture it is dubious, at best, to portray the Social Security surplus account as any manner of "fund". Thank you.


TownCrier'SNL' skit suggests dollar's perils are over#1283771/20/05; 14:19:31

NEW YORK - You know the dollar's decline may be coming to an end when the currency becomes the butt of humor on America's most renowned TV comedy show.

Just as John Q Public's emergence as an expert stock picker signaled the end of the Internet bubble of the late 1990s, this claim may be nothing more than a variation on the belief that once every man and his dog is in on it, the trend is over.

The coup de grace for dollar bears may have come last weekend when "Saturday Night Live," a comedy institution that's been running on U.S. network television for 30 years, included a skit on the dollar in its most recent episode.

With cast members dressed up as various currencies, the skit showed the small and weakly dollar being bullied and ridiculed by the bigger and brasher euro, yen and sterling. Even the Mexican peso joined the act.

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

I think it is wrong to compare this satirization with the "magazine cover effect" or the shoeshine boy of 1929, most particularly because John Q Public doesn't aggressively play a speculative role on the foreign exchange markets.

So rather than citing this as evidence that the bottom for the dollar must surely be at hand, rather I would take this solely as evidence that the weakening dollar trend has entered the collective consciousness of the masses. Much like so many pesos or liras of the world that have found themselves in a sort of permanent decline as more and more zeros begin to appear on price tags and ultimately on currency notes.

In other words, just because a time came when the "news" of a spherical earth started to appear in our old-time flat earth newspaper headlines and magazine covers, so to speak, that didn't mean that the "trend" would reverse. Rather, it was accepted as a fact of life.

Choose gold. A sound savings fact of life.


USAGOLD Daily Market ReportPage Update!#1283781/20/05; 15:20:12">
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.

Thursday market excerpts

Gold futures fell under $423 an ounce Thursday to close near their lowest level in two weeks, continuing to play off action in the foreign-exchange market. "Further advances by the dollar against the euro...have pressured the precious metals," said James Moore, an analyst at

The dollar hit a two-month high against the euro Thursday, helped by expectations that Federal Reserve officials will continue to signal rising U.S. interest rates.

Against this backdrop, COMEX February gold delivery shed 70 cents to trade at $422.60.

Gold prices have now logged four sessions of declines out of the last five, but John Person, president of National Advisory Service believes the precious metal is a "buy" this week, given the fact that while the dollar has gained in value, gold hasn't really deteriorated substantially in price.

In fact, it was up almost 1 percent last week. Prices will "offer a substantial buying opportunity as it gets closer to the $417 level," Person said.

"Higher material costs (raw materials such as steel, transportation, wages etc.) will eventually filter down to the consumer and gold will be added to portfolios as a potential inflationary hedge, so it will be attractive as insurance from that standpoint," he explained.

-----(see url for 24-hr international economics newswire)---


Dollar Rallies As US Firms Begin Repatriation-- FXstreet

G7 invites 5 emerging powers to economic talks -- Borsa Italiana - News

Northern farmers face economic hardship-- The Daily Star, Bangladesh - Business

Some Nevada communities gain from higher gold prices-- Las Vegas Sun - Vegas Business

Fed Yellen: don't ignore forces holding down inflation-- interactive investor

BoE's King says 'foolish' to focus too much on tomorrow's Dec retail sales-- Today's AFX News

Black BladeGold - "Portfolio Insurance"#1283791/20/05; 16:30:21;siteid=mktw


John Person, president of National Advisory Service believes the precious metal is a "buy" this week, given the fact that while the dollar has gained in value, gold hasn't really deteriorated substantially in price. In fact, it was up almost 1 percent last week. Prices will "offer a substantial buying opportunity as it gets closer to the $417 level," Person said. "Higher material costs (raw materials such as steel, transportation, wages etc.) will eventually filter down to the consumer and gold will be added to portfolios as a potential inflationary hedge, so it will be attractive as insurance from that standpoint," he explained.

Black Blade: A moderate position of physical Gold and Silver can offset any economic and stock market disruption. Quite a few "New Economy" investors now wish that they had a small amount of "portfolio insurance" as they stare glassy eyed at devastated investment portfolios.

MKAnother (Thoughts!). . .#1283801/20/05; 17:13:18

Belgian: Next time you're at the neighborhood cafe with Another, please pass along my kindest regards. MK
Federal_ReservesRecently, the USD looking stronger in here.#1283811/20/05; 17:21:03

Now trading above the 50 DMA.

Hasn't hurt gold too much, still bouncing above the 420's. Looks like GOLD is still correcting, maybe ready to making a last 5th wave down move from the recent high.

Its currently consolidating in wave 4. I expect another down move towards 410. This is long term weekly
support, going all the way back to 2001.

I think we hold support there.

MKBelgian. . .#1283821/20/05; 17:21:47

Another (Echoes!)


SundeckBeer and pretzels on a flat Earth ... Yo ho ho and a barrel of gold#1283831/20/05; 17:43:25

melda laura and TC

I really like the idea of a "beer and pretzel" retirement, but only if the Earth is truly flat (so as to prevent me from teetering too much in my wanderings)...and I have GOLD buried in the jar in the backyard....near my tomatoes...from which I can make sandwiches...

(Thank you Colombus, Cortez and the Good Earle...)

Yo ho ho aboard the good ship "Dollar" ... hold her steady ... methinks the world is round and the gold is shifting in the hold!

Yours Aye


Black BladeGreenback to keep on falling#1283841/20/05; 18:43:41


JOHANNESBURG ( -- Warren Buffett, the legendary investor based in Omaha, Nebraska, yesterday told CNBC Television that the dollar cannot avoid further declines against other major currencies unless the US trade and current-account deficits improve. The dollar has been dominated for the latter part of its three-year bear market by the ongoing explosion of the US current-account deficit, which stands at record levels of over $600 billion, on an annualised basis. The deficit is driven by the US importing $2 worth of goods and services for every $1 that it exports.

The current-account deficit is financed by inflows of foreign investment, mainly from Asian countries, where currencies have been kept artificially low against the dollar, and foreign exchange reserves continue to boom. Japan, China, Taiwan and South Korea hold nearly $2 trillion in foreign reserves. China's foreign exchange reserves grew by nearly $100 billion in the fourth quarter of 2004, alone.

A weaker dollar means US exports become increasingly competitive, and imports more expensive. Buffett said that "over time, unless we have a major change in trade policies, I do not see how the dollar avoids going down. I don't know when it happens. I don't have any idea whether it will be this month or this year or next year. But we are force-feeding dollars on to the rest of the world at the rate of close to a couple billion dollars a day, and that is going to weigh on the dollar."

Buffett has, however, taken a number of unconventional bets, including investments in certain junk bonds, and directly in physical silver. So far, Buffett's currency bets have been overall winners.

Black Blade: Another story on the "Oracle of Omaha" and the falling US dollar. To counter a weaker dollar currency an alternative counter-currency (Gold) is a good bet. Check out the USAGOLD treasury at the Castle.

Black BladeGold trade booming in China#1283851/20/05; 18:50:40


Gold is coming back in fashion in China, according to latest reports, with the middle class queuing up to purchase the precious metal. Evidence of the demand for gold was particularly clear when the Caishikou department store sold all its gold bars in just a matter of hours last month. When a second set of gold bars was released, the top gold retailer in Beijing asked people to register by phone and nearly 3,000 people did.

Black Blade: This is not entirely unexpected either. When Gold ownership was legalized in China and physical metal was made available, the shelves were stripped within minutes. Another important issue is that the Peoples Central Bank of China is rumored to still be in Gold acquisition mode buying from other central bankers and on the open market from time to time (buying from within the country is a closely guarded secret). Demand is expected to be quite strong in China as more outlets are made available for the Chinese peoples.

Black BladeBACK TO THE 1970s#1283861/20/05; 19:02:56


Gold's bull market is alive and well since reaching a 16 year high in early December at $456. And the decline we've seen since then is normal. Gold's 16 year high last month reinforced that the current bull market has now clearly outperformed the bull markets in the 1980s and 1990s in both time and price gains. This confirms the current bull market has now been the strongest since the 1970s and it could be similar, eventually reaching $800 or more.

It's not really surprising when you see the similarities compared to the 1970s. The most obvious is the high oil price. It rose over 400% in 1971-1974, which is about the same as the 400% rise oil has had in the last six years. The budget deficits and an extremely loose monetary policy are also similar, as are the costs to finance an expensive war.

Furthermore, just as the industrialized world now has stiff competition with China and India causing disruption in the manufacturing and service industries, the 1970s had a similar situation with Japan and Korea. In both cases, it hurt the West. China and India are also keeping upward pressure on commodities due to their growing demand. In the end, it's very possible we'll see rising inflation and slower growth, which would be very good for gold.

Black Blade: Indeed – Gold remains grossly undervalued and the US dollar remains grossly overvalued. The weaker dollar has been helpful to US industries and the export market. While the prez sez he supports a "strong dollar policy" in reality it is a policy of "benign neglect". Even as he and Treasury Sec. John Snow give lip service to the dollar they have done nothing to stop the decline (as if they really could). The soaring twin deficits (current account and budget) will forever be an unstoppable force applying pressure on the US currency. Add to this the ever-growing threat of higher inflation and the need for Gold and Silver ownership is more evident.

GoldendomeGood Airing of SSI issue!#1283871/20/05; 19:08:11

HOLY COW!!! It's even worse than we thought!!! The social security thing! No wonder the Prez. wants to turn it into an "Ownership thing"...'cause there ain't nothin there!

Special purpose bonds that pay no interest and are unmarketable!! (thanks Phil288 and TC) for pointing out how those special bonds - don't work. And, to Melda Laura for the great analogy putting it into effect, with the IOU buried in the backyard after raiding your own cash.--Well done.

Let's have a show of hands for all those who believe all those foreigners will lend us EVEN more money to take care of our oldsters when we wish to begin funding the SSI deficit, on top of the incredible amounts they already are loaning us for everything else that we want.

Rumor has it, that many of our main creditors are going to have plenty of their own oldsters in another ten years that they may want to or need to take care of themselves, without taking care of those in the USA. (Examples are: All of Europe, Japan, and China) All will have rapidly aging populations.

Watch out for benefit cuts included in any reform. Age increases; Means testing; possibly higher taxes; very probably- higher monetary inflation: Send out the checks; print up the currency- distribute it to the banks.

Black BladeBarbarous Relic Files - Ship wrecks: The bullion dollar question#1283881/20/05; 19:28:54


A US salvage company is set to begin the retrieval of a 17th-century British warship and its cargo of gold. But who will profit? And why do archaeologists oppose the project?

Black Blade: Interesting article on the treasure of the HMS Sussex. All that trouble to recover a "barbarous relic". ;-)

Gandalf the WhiteLook at the US$ double TOUCH of the 84.0 LEVEL ! <;-) #1283891/20/05; 21:22:38

The US$ Chart will soon tell you when the YELLOW will SHINE !

GoldendomeBelgian's discussion this morning with 968 remined me of this recent article.#1283901/20/05; 21:56:03

by Eric J. Fry

If gold is a "collective hallucination," as financial
writer James Surowiecki asserts in a recent column for New
Yorker Magazine, what is a U.S. dollar? Or a share of
Google? Or a 30-year Treasury bond? Aren't these paper
assets merely derivatives of a hallucination?

To rephrase the question: If we investors are all
hallucinating to some extent, might some hallucinations be
more benign than others? Might the current market value of
gold, for example, be a less dangerous "hallucination" than
the current market value of a dollar bill? Even conceding
the fact that our eyes may be deceiving us, we think we
perceive more value in an ounce of gold costing $432.00
than a U.S. dollar costing 1/432 an ounce of gold. Indeed,
we suspect that the dollar's illusory value is the sort of
deceptive apparition that entices unsuspecting investors to
stroll off a financial cliff.

Surowiecki disagrees. "Gold is valuable only as long as we
collectively agree that it is," he says. "It may be soft,
shiny, durable, and rare, but it has no more intrinsic
value than feldspar or quartz...Buying gold is the purest
form of speculation...You're buying into a collective
hallucination - exactly what those dot-com investors did in
the late nineties. One could say that gold is the biggest,
most durable bubble in history."

In the sterile environment of pure financial theory,
Surowiecki makes a valid argument. But when exposed to the
virulent microbes of real-world economics, his thesis
degrades rapidly. To be sure, the value of EVERY asset in
the world relies upon a collective judgment - or
hallucination, if you prefer. But this is hardly a
groundbreaking insight. No financial asset - gold included
- possesses an absolute, eternal value. Rather, all values

However, any financial asset whose relative value remains
somewhat constant over time is deemed to be a "store of
value." In this respect, gold has proven itself to be an
extremely lifelike hallucination - having successfully
retained its value relative to competing assets over
several thousand years. The same cannot be said for paper
currencies or government bonds, both of which routinely
find themselves cluttering the waste dumps of financial
history. But gold's relative long-term value has nothing to
do with its short-term investment merit. Indeed, 1000-year
investment trends rarely benefit those investors who
operate on a shorter time horizon, as gold's recent history
plainly shows.

"Gold has been a terrible investment," Surowiecki gripes.
"In 1980, ten ounces of gold would have bought you a nice
car. Today, they would get you a nice bike." To emphasize
his point, he notes that gold is up "zero percent since
1988, while the S&P 500 has almost quadrupled." Very true;
but if we were to mine for data in more recent annals of
financial history, we would discover that gold and stocks
have reversed roles. Since 1998, it is the S&P 500 that is
"up zero percent," while the yellow metal has advanced more
than 50%.

Selective slices of history are just as likely to deceive
as to inform. Truth resides with long-term investment
horizons. As the Daily Reckoning's Paris-based editor
quipped in response to Surowiecki's essay, "Gold wasn't
born yesterday...Mr. Surowiecki noticed that the metal has
a past, just as it has a present. He turned his head around
and looked back a quarter of a century. The yellow metal
was not a great way to preserve wealth during that period,
he notes. As a result, he sees no difference between a
paper dollar and a gold doubloon, or between a bull market
in gold and a bubble in technology shares.

"Pity he did not bother to look back a little further," the
Daily Reckoning editor continues. "While Mr. Surowiecki has
looked at a bit of gold's past, he has not seen enough of
it. Both gold and paper dollars have history, but gold has
far more of it. Both gold and dollars have a future too.
But, and this is the important part, gold is likely to have
more of that, too."

Indeed, we suspect gold is likely to grab an outsized share
of the immediate future, thanks to the substantial
pressures weighing on the U.S. dollar. Specifically, the
current account imbalance is plummeting deeper into
deficit, as is the trade balance, as is the net U.S.
ownership of foreign assets.

All three trends provide "solid statistical evidence,"
according to James Grant, editor of Grant's Interest Rate
Observer, that gold should strengthen while the dollar
weakens. But as Grant humbly acknowledged, "I've been
bullish on the wrong things and bearish on the wrong things
so many times, that I can attest to the fact that financial
excesses can carry on for far, far longer than seems

Nevertheless, he sees evidence that the dollar has reached
a tipping point. Foreign central banks may soon begin to
disgorge some of the hefty dollar reserves on which they
are now choking. A bull market in gold will result, he
predicts. "I am bearish on the dollar," says Grant, "and
bullish on the thing that glints in the sunlight, is
recoverable at five parts per billion from the earth's
crust and has no central banker."

Not surprisingly, Surowiecki disagrees. "Just because gold
has a long history of being used as money doesn't mean that
it has a future...In the speculative imagination, gold
remains the best hedge against Armageddon. It also remains
a testament to the tenacity of popular delusion."

Delusion or reality? You be the judge.

Black Blade@ Goldendome#1283911/20/05; 22:08:24

Interesting article. I suppose that Mr. Surowiecki then also thinks that three of the world's wealthiest men (Bill Gates, Warren Buffett and George Soros) are also delusional. Of course Surowiecki is not anywhere as wealthy so he can afford not to heed their advice (or be as "deluded"). ;-)

- Black Blade

Goldendome @ Black Blade#1283921/20/05; 22:26:23

The thing that irritated me was that Surowieki claimed that Gold had no more intrinsic value than say, quartz or Feldspar?? What's that all about? That statement right there shows he's a fool.

Time will prove.

TownCrierGoldendome, 128387#1283931/20/05; 22:45:39

It's just a drop in the bucket and of little effect in the grand scheme of things, but for the sake of accuracy I'd like to point out that while the Treasury's special bonds held by Social Security aren't marketable on the street, they do at least, in fact, earn interest. phil288 might want to double-check his original source of info.


Goldendome@TC#1283941/20/05; 22:56:19

Thanks for that point of correction. We need the accuracy when We begin shouting on the streets!
phil288TC#1283951/20/05; 23:35:54

I'll defer to TC on the interest issue, frankly I wasn't sure on this point. BUT another slip of paper representing interest in the jar is of little relative import as TC states.
TopazBonds etc.#1283961/21/05; 01:08:13

The alt $ PoG continues to rise (currently B354.23) however we can expect some real action in Bonds or Oil directly imo.
Too much money is NOT finding it's way into the SM so don't be surprised to see Oil get whacked here.

TopazOil/Dollar#1283971/21/05; 01:13:19

Belgian@ Sir Kosares#1283981/21/05; 01:37:05

The problem of not finding or hearing from A/FOA is...that we have to think (transpire) on our own. Or should I say now...hallucinate collectively (-:-) ?

Hart of the matter is that gold is standing up "against" the AA financial (monetary) "industry" ! This up-rising is one coin with two sides...
Find the coin and you will see the two sides...

Gold remains PUBLICLY percepted as a neglectable "detail" in a big "evolving" constellation. Most of the dramatic changes (cumulations) are often caused by the change of a detail.

The more we see public gold-intimidation (IMF-?), the closer we are to the changes. Logical, no.

What do you read in the sudden "repatriation" of US$...(through the Carraibes) ? Etc...

Euroland will most probable build a tunnel under the Mediterranean (Spain > Marokko). What is happening with the former (evident) transatlantic bridges...? Etc...

Wether we like it or not, gold is at the center of the separation between the dollar and the euro !

Cheers, Sir Kosares.

968GSE Risks - William Poole#1283991/21/05; 01:45:06

Interesting speech by Fed Governor William Poole on Fannie and Freddie :

"I discussed liquidity risk at some length in a speech last spring. I won't repeat that analysis, but the bottom line is simple: The Federal Reserve has adequate powers to prevent the spread of a liquidity crisis, but cannot prevent a solvency crisis should Fannie or Freddie exhaust their capital. In the event of a solvency crisis, the market would become unreceptive to Fannie and/or Freddie obligations; they would have difficulty rolling over their maturing debt. Moreover, their outstanding obligations would decline in price and their markets would become less liquid. Beyond that, it is hard to say exactly what else might happen."

"It may be that the highly volatile interest rate environment of the early 1980s is extremely unlikely to recur, but I would like to see F-F maintain capital positions that would enable the firms to withstand such an environment anyway.

One thing I think I know for sure is this: An investor who ignores the risks faced by Fannie Mae and Freddie Mac under the assumption that a federal bailout is certain should there be a problem is making a mistake."
Poole makes it very clear : in case of a default, there will be NO federal bailout !

Belgian ('k zal A/FOA nog eens opnieuw blokken voor de tweede zit), Goldendome, thanks for your insights yesterday.

BelgianIndeed, Goldendome....(Surowiecki)#1284001/21/05; 02:54:37

Expect this type of hallucinations against gold, to increase strenght and frequency ! Go behind this phenomenon and do your own research about the "motives".

Indeed, were absolutely right in connecting 968's question "What is wealth", with the article.

A glas of water in a desert...can be worth more than any wealth fortune on earth. These type of reasonings always serve the same old purpose : To intimidate and confuse the general public.

Whilst typing this msg to you,...I watch the screen where the US$ exchange rate starts weakening/declining and the Dow futures go up, again ! What kind of wealth expression is this type of orchestrated correlation !? Immediately after, comes the ad..."Making the markets *move* for you...". I'm having another cup of coffee, Goldendome...not weed ! Smile, mate.

Social IN-security in paper...Security in gold ! Do you remember the rumor that the proceeds of the sales of German goldreserves would (should) be used to "invest" (hum) into stocks !!!??? The wealth-metal for a paper horse ! Indeed a Shakespearean hallucination.

Do you remember the period that the goldprice was systematically knocked down at the NY opening ? Now, the POG (in € and $) is being supported (managed) overhere, when necessary/appropiate.

Through my hallucinations, I see the different drives (changes) in the pricing of exchange rates/gold/oil, on both sides of the Atlantic.
Yes, it are markets of course...but markets with differing goals.
We always seem to forget that markets do have "market-makers", directionally operating on different levels (high-low).
What good is it to spend a lot of time and confetti as to try to learn "reading" the markets,...and speculate...gambling...on it, when not being aware about the deep underlying fundamentals that are evolving behind the public market's curtains.

The financial/monetary industry is NOT market-driven ! Is coffee an hallucinogen ? Whoeha.

BelgianGOOD MORNING, fellow gold-student 968#1284011/21/05; 03:32:54

Waw, what a brilliant choice, posting us the article ! My snip...the issue is a political one...and...political winds change in unpredictable ways !!!
How often do we forget (ignore) this basic stuff !?

Mother Euroland, also carries her specific (particular)risks, great and small. That's WHY the euro-concept "had" to come in and be build upon !!! Once you recognize this fundamental, you graduate cum brio.

I doubt your conclusion of non bail out. A Reserve(less) banker must keep his fiat "hard", when talking. In the mean time, the real show goes on :"Stimulate" until he (the $) drops. This, whilst the euro management is succesfull in building (more) "credibility" in its a starter. Think about the moment that the euro-gold-concept is being made operative !!! A "wealth" affair, dearest 968 !
Not that saving single glas of water for the lone starving individual in the desert...but FREEGOLD FOR ALL !!! This is not an inaugural speech (-:-).
Thanks, 968 and...Many thanks + appreciation to Sir Kosares and his unique business, who patiently allows us to express (share) our thoughts, wich might be right or wrong.

Belgian@ 986 > one more remark#1284021/21/05; 03:53:38

Watch the volatility chart on the bottom of the posted article : period '80-'84 = a contracting triangle. '84-'00 = a nice zonal pattern. '00-? = an expanding triangle in the make aka trumpet.
Is this pattern showing :Control ('80-'84), complacency ('84-'00)...panic ('00- ?) !?
I like the dollar's risk (avoiding) theories, but prefer the euro's basic choice of secure gold ! Simple, no.

geJack Crooks of Asia Times Online hopes for Buffett capitulation#1284031/21/05; 05:45:39

He says;

" But, Buffett has been very right on a lot of things many times before. So, regardless of whether or not it appears he is talking his position, the players are probably listening. Needless to say, but I shall, I hope Mr Buffett is wrong. For if he is, and his capitulation is publicized as much as his short position, it could provide some rocket fuel for the "new" dollar trend."

In case Buffett capitulation occurs, it may also be interpreted as a signal for a blow-off top.

968Eduard de Rothschild.#1284041/21/05; 09:07:39

Eduard de Rothschild (son of baron Guy de Rothschild) buys 37% of the French (left) newspaper "Libération".
From bullionbanking to paperpresses !

Clink!OK, what am I missing here ?#1284051/21/05; 09:19:46

Topaz'128397 gave a link to a chart of the last few months overlaying the USDX and the POO. The two curves match each other very closely. My question is, "Why ?" I would have thought that the POO would tend (geopolitical factors apart) to do the exact opposite. A lower dollar would lead to a higher POO, and vice versa. Comments anyone ?

RimhRe:POO, Clink#1284061/21/05; 10:08:04

Just a guess on my part, but perhaps the correlation between the two is related to oil still being officially priced in dollars, therefore all nations buying oil must purchace more dollars to buy more expensive oil? However, I'm not sure on the magnitude of dollars needed in the oil market vs the magnitude of dollars traded in the currencies.... Anyone else know what the correlation is?
RimhPOO#1284071/21/05; 10:18:04

As I viewed Topaz' chart, I noted it was just a short-term chart. When the monthly data is viewed, dating back to 2001, a totally different picture emerges with POO and the USD crossing over as one goes higher and the other goes much lower. This reflects oil being "revalued" as the purchasing currency (USD) loses credibility/confidence.
Black BladeGold could reach 480 dollars#1284081/21/05; 10:41:33,3523,1794057-6078-0,00.html


The price of gold could reach US$480 a troy ounce during the first half of 2005 if the euro strengthens to $1.39 in the same six-month period, investment bank Merrill Lynch said in a report issued this week. The bank sees gold averaging $440/oz in 2005, with the metal trading in a range between $400/oz and $480/oz.

The major factors for the higher gold price in 2004, low US interest rates and a weakening US dollar, are expected to play an equally important role in 2005. "Higher price objectives are possible if the up trends in the non-US dollar prices of gold continue, something we would not rule out," Merrill Lynch said.

Another driver for gold in 2005 is likely to be the improving supply and demand fundamentals for gold. Few new gold projects are being constructed and Merrill Lynch estimates that world gold output could decline by as much as 10% by 2006 from 2003 levels of gold production.

Black Blade: Merrill is catching on! the only thing wrong I see here is that the POG could very easily spike well beyond $480/oz. Otherwise they are correct about the supply-demand fundamentals.

Black BladeGold Rises as Higher Oil Costs Boost Metal as Inflation Hedge #1284091/21/05; 10:51:24


Jan. 21 (Bloomberg) -- Gold prices in New York rose for the first time in three sessions as rising energy prices boosted the appeal of the precious metal as a hedge against inflation. Crude oil rose today on speculation that violence in Iraq could further disrupt oil exports and that freezing weather in the U.S. may last longer than forecast. Gold reached a 16-year high of $458.70 on Dec. 2 partly because crude oil soared to a record $55.67 a barrel.

``Early strength in the energy market is supporting gold,'' said Daniel Vaught, an analyst at A.G. Edwards & Sons Inc. in St. Louis. ``Energy prices will drive inflation and gold serves as an inflation hedge.''

``What happens with the dollar is going to have considerable importance with what happens with gold,'' Vaught said. ``When you have increasing inflation, the currency tends to lose buying power.''

Black Blade: Actually the POG has responded to a combination of many factors but I'll give em "a pass" for now. The US dollar has weakened over night and continues to look weak. The twin deficits are clearly unsustainable and that will always remain a problem for the US currency leading many to look for alternative currencies such as Gold, Silver, and even commodities such as Oil. One simply cannot dismiss the declining Gold supply and production as demand continues to grow. I'm not even concerned about CB sales as that Gold will never ever see the light of day as it is simply sold to other bankers and not the open market.

Black BladeGold futures top $426 for first time in a week #1284101/21/05; 10:56:50


SAN FRANCISCO (MarketWatch) -- Gold futures climbed back above $426 an ounce Friday for the first time in more than a week, with traders betting that the potential resumption of lasting weakness in the dollar will combine with broad market uncertainty to encourage more investment in the precious metal.

"Despite the recent strength in the dollar, gold has been able to find buyers and its performance has resilience on a relative value basis," said Charles Nedoss, an analyst at Peak Trading Group, adding that good physical demand for the metal has been a supportive factor.

Longer term, gold's outlook remains positive, with the "return of a weaker dollar the likely catalyst," said James Moore, an analyst at Investors will continue to watch oil and the "broader geo-political picture," as well, he said.

Black Blade: Too bad that Chicago's Webfn site is no longer operating as it was a good source to watch a panel of Gold analysts including Nedoss. So far Gold is spiking higher pushing against $428/oz.

Belgian@ 968#1284111/21/05; 11:05:33

And Monsieur Dassault has bought control of Le Figaro (my favorite). Conclusion, cher ami... ?

Greenspan opposes swift changes (rises) in IRs !!! Result : the dollar loses appeal versus other currencies.

Black BladeGolden Age for metals prices has staying power#1284121/21/05; 11:07:48

Golden Age for metals prices has staying power

By: Dorothy Kosich
Posted: '21-JAN-05 04:00' GMT © Mineweb 1997-2004

RENO--( Investment experts Thursday predicted that a "new golden age for precious metals and commodities" is already underway and will probably continue for several years.

In on-line presentations to the Informed Investors Forum, Elliot Guy, editor of Wall Streets Winners and associate editor of Personal Finance, and David Chapman, owner of the Millennium Bullion Fund and an investment advisor and financial analyst with Union Securities in Toronto, presented a bullish outlook for gold.

Guy asserts that during "periods where we tend to see financial instability and the weakening U.S. dollar is when gold performs the very best." Currently conditions are ripe for gold, in his opinion. As proof, Guy cited a rising U.S. consumer debt, which he termed "the number-one cause for concern in the U.S. economy." He said the average consumer is spending 13.5% of disposal income simply to service debt.

Meanwhile, interest rates for government bonds are currently at a multi-decade lows. "We are in the midst of a credit bubble," according to Guy. If interest rates rise too high, he predicted the bubble will pop, generating a collapse in consumer spending.

The U.S. trade balance is in a "very constant and accelerating decline," Guy asserted, which is pressuring the U.S. dollar. The good news for precious metals investors is "gold tends to really start moving when the financial economy really starts to run into trouble," he added. As a result, Guy predicted, " we will see gold trade significantly higher over the next three to four years."

Guy also presented historic trends, which, he feels, validate his theories. As proof, he offered data from the period from 1965 to 1979. "Gold and commodities totally outperformed stocks during this period," returning a 1357% on the investment. Gold rallied from $35.90 in 1971 to more than $800/oz a decade later for a 2,200% increase, according to Guy.

He also asserted that the ratio between gold and the Dow Jones industrial average will change from its current 25 ounces of gold to the Dow Jones to an equation of two to five ounces of gold to the Dow industrial average.

Chapman claimed that the long-term bull market in precious metals began three years ago, "long before 9/11 or talk of war in Iraq."

Meanwhile, Chapman lent credence to Guy's assertions, noting that since the year 2000 gold has increased 48% while the Dow Jones average has declined 3%. Meanwhile, Chapman said the U.S. dollar has declined 29% during the past two years while gold has increased 44%.

Chapman is particularly concerned about vulnerabilities in derivatives. He estimated that 89% of total U.S. derivatives are held by three banks, J.P. Morgan Chase, Bank of America and Citibank for a total of $81 trillion. Chapman said derivatives have increased by 727% since 1993. "The use of derivatives to hedge foreign currency risk has grown dramatically," according to Chapman. "The current position is a very dangerous situation."

He asserted that long-term commodity growth will be tied to industrial demand, particularly for silver. If U.S. decides to replace copper high-tension wires with silver to reduce the need for additional power plants, he estimated it would consume up to 3 million ounces annually of silver.

In the short-term, Chapman said two important developments will increase the monetary demand for previous metals during the next two years. These include 2003 laws which allow Chinese citizens to purchase gold and silver, and the growing popularity of the gold and silver Islamic Dinar.

Like other investors, Chapman believes that declining mine supply will also play an important factor in precious metals prices. For instance, he estimated that mine production will fall by 20% over the next two to three years. Although mines currently on a care and maintenance basis are being brought back into production due to higher metals prices, Chapman claims they won't produce much additional bullion to really make a difference in inventories.

While today's metals prices justify more exploration expenditures, Chapman feels that a long cycle between exploration and production may also impact mining supply for five to 10 years.

Meanwhile, Chapman also suggested that a "short squeeze" situation will occur as commodity futures contracts start to move up sharply, and many traders with short positions are forced to buy gold or other commodities in order to cover their positions and prevent losses. "As [metals] prices rise, a short squeeze of unprecedented proportions will develop," he predicted.

The causes for this squeeze will include hedging positions being unwound by mining companies, hedge funds repaying leases, and naked short selling of futures contracts, which will force hedge funds to become buyers of commodity. Chapman declared that "the current COMEX situation has all the markings of a giant accident waiting to happen."

Black Blade: Yet another bullish sentiment on Gold and Silver. As always, get outta debt and stay outta debt, stash enough emergency cash for several months’ household expenses, accumulate Gold and Silver "portfolio insurance", and start a storage program of nonperishable food and basic necessities.

CoBra(too)Gold could reach Infinity - Dollah too!#1284131/21/05; 11:13:51

@ BB - Merrill is not really catching on - "Te price of gold could reach US$480 a troy ounce during the first half of 2005 if the euro strengthens to $1.39 in the same six-month period, investment bank Merrill Lynch said in a report issued this week. The bank sees gold averaging $440/oz in 2005, with the metal trading in a range between $400/oz and $480/oz" no, Merrill has no idea.

Merrill is still $-Reserve currency centered, and while they see €/$ reaching 1.39 it is the same relative valuation vis a vis the US Confetti. What a narrow minded sparrow, considering that Merrill may well be the largest brokerage firm ever - which doesn't seem to account for the same amount of delusion.

As I'm not sure for how long further the US Dollar will be allowed to reign supreme - even in its quest to devalue at a rapid pace, some bear market counter swings included - without any competition, I'd play it safely and state that € at a $ 1.39 will be something like a declaration of war.

The G7 meetings early Feb. will give us some clues as to the limits (of indebtness) the Dollar will be allowed to go.
A kind of endgame to test the ultimate stretching point of the bungee line the Dollar is experimenting with! Overstretch is not only a possibility, it may be the final straw.

Or as Mad Magazine had a beautiful cartoon of a diver into a blue pool - oops, no water in the same! And so after Greenspan, Bernanke and others we now have to live with the sound pieces of Poole, while Snow is still doing the job, his name characterizes so well.

#?*%! - Schnaps ist Schnaps - Gold ist Gold!

... Sometimes I wonder what the heck is the better alternative? Got schnaps? Got Gold?!

Be my guest and vote for both ... cb2

Black Blade@ CoBra(too)#1284141/21/05; 11:32:44

I agree with ya there. I think that too many focus on the US dollar weakness as the sole reason for the Gold price. There are many reasons of course and that Merrill acknowledged the supply-demand side of the story is one thing that most so-called analysts apparently always miss. The miners are not really doing much exploration even at the current Gold price ensuring higher Gold prices for many years. There's also the growing demand in Asia and Central Asia. The growing geopolitical tensions keep the global investment community on edge. The threat of inflation (though tied to the dollar, oil, etc.) is just another reason. Now when I listen to the US Treasury Sec., the Fed Chairman, etc. I smell the scent of fear. A good signal to cover my tail and be prepared.

And nice to see ya back too! Cheers!

- Black Blade

AristotleA question for Goldendome -- Eric J. Fry, the author of your article#1284151/21/05; 11:33:19

Isn't he the Futurama guy???

If I'm up to speed on my pop-culture, Eric J. Fry was one of our contemporaries who had gotten himself accidentally cryogenically frozen for 3,000 years, and now lives "in the future" working with his great- great- great- great- great- [...] great- great- grand-nephew Professor Farnsworth, a one-eyed mutant Leela, a beer-drinking cigar-smoking robotic bending unit named Bender (who is probably among the top three candidates for funniest cartoon character of all time) and a supporting cast of other colorful characters.

Anyway, what I'm driving at is that if we assess the circumstances and merit of James Surowiecki's blather in the New Yorker (wasn't he sufficiently laid bare by all the forumers here about a month ago(?)) then Eric J. Fry is, of all people, uniquely well-suited to give the official rebuttal to Surowiecki. And frankly, I think he did an excellent job of it -- better than Surowiseguy deserved. We could have simply settled with Homer Simpson mooning for rebuttal.

Gotta love Fridays.

Gold. Get you some. --- Ari

Gandalf the WhiteLook AGAIN at the US$ Chart "double TOUCH" of 84.0 ! <;-)#1284161/21/05; 11:38:09

AND then look at the "WATERFALLS" !
Can you sing with me ?
"The PARTY's OVER!" (in D.C.)
And the YELLOW is shining AGAIN!

Black BladeFYI - SNL Skit on CNBC#1284171/21/05; 12:04:15

The Saturday Night Live skit about the "weak dollar' will be replayed on CNBC in this hour if anyone wants a laugh over the dessicated US currency. Even Mr. Mexican Peso gets in on the action. ;-)

- Black Blade

TownCrierNew to the gold market?#1284181/21/05; 12:10:25

Get yourself started on the right foot. Request a FREE info packet from USAGOLD-Centennial Precious Metals, Inc., one of the country's leading gold brokerages, serving investors since 1973!

Click or call today. 1-800-869-5115 Ext. 100


Topaz@Clink! Rimh ...Oil/Dollar/Gold.#1284191/21/05; 12:30:01

Whilst the correlation in Oil/Dollar is apparent at present, it really is "contra-trending" the overall picture.
The "challenge" is to ID a contra-trend reversal.
This link gives you a good perspective on what I'm getting at ...the 3mo is clearly a mirror image, whereas the LT (monthly) Oil'shows a close correlation with Gold/altCurrencies. The short-term Oil/Dollar "more often than not" runs "with" the Dollar, BUT within an overall alt framework.
...well, I know what I mean... ;-)

HOOSIER GOLDBUGTHANKS!#1284201/21/05; 12:49:47

Thanks to everybody at CENTENNIAL for this month's buyer's opportunity special, the Netherland Gold Ducat! I know you know, but just to reasure us dummies, could you provide monthly specials where people can participated with as little as $200.00 or or as great as $2,000,000. I would have liked to participate in December's opportunity, I think it was the complete set of Danish coins, but was a bit to dramatic, not pricey, to get the needed funds together! I can participate monthly if the opportunity is $1,000 or less. Again, thank you very much.
USAGOLD Daily Market ReportPage Update!#1284221/21/05; 13:20:13">
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.

Friday market excerpts

Gold futures ended higher Friday as expectations of lasting weakness in the U.S. dollar and broad market uncertainty fueled investment and physical demand for the precious metal. In Friday dealings, the dollar turned lower, losing ground against the major global currencies.

COMEX February gold closed at $426.90, up $4.30 for the session and up $3.90 for the week, its highest closing level since Jan. 4.

"The dollar's failure to extend its gains recently, despite a flurry of news and economic numbers in its favor, eroded the market's support for the currency," said Brien Lundin, editor of Gold Newsletter.

"In traders' views, if the greenback can't rise, then it's destined to fall," meaning that "if you're going to bet on a fall in the dollar, you also want to bet on a rise in gold," he said.

The metal has also found support from the "ongoing, extremely strong level of physical demand from Asia and the Middle East," he said.

This physical demand shows "no sign of abating and, contrary to historical experience, appears to be investment-related," Lundin noted.

Overall, "the buyers have shown little price resistance, and their appetites for gold seem to increase along with the price," he said.

Gold's outlook remains positive for the longer term, with the "return of a weaker dollar the likely catalyst," said James Moore, an analyst at TheBullionDesk.

-----(see url for 24-hr newswire)---

OvSGruess Gott, CoBra(too)#1284231/21/05; 13:36:15

Admit it: you are an addict.
An USAgold addict. No matter how often
you say good-bye, you are always back.
Thank you.
And of course, you are an gold-addict.
Ditto here. But there are many instances
when I prefer schnaps over gold,
especially the golden Marillen-Liqueur.
By the way, do you believe that our big
B. is FOA or just another Friend of
Another? Cheers. OvS

TownCrierHOOSIER GOLDBUG, kudos to you for getting in on the January special offer#1284241/21/05; 13:43:15

Thanks, your support is warmly appreciated.

Taking note of your comments, in case you were ever to find that any given special in the future doesn't mesh well with your particular needs regarding quantity or timing, please feel welcome to assemble your own "monthly special" that's custome tailored exactly to your liking. You can call the staff at USAGOLD-Centennial any day of the week (except Saturdays and Sundays) to purchase a very wide variety of competitively-priced bullion and gold coinage. When ordering by phone you can further inquire about availability of special items, seek volume discounts, and take advantage of additional pricing discounts through remittances using check or bank wire.

And if your schedule does not correspond well with USAGOLD-Centennial's 8:30am - 6:00pm Denver office hours, feel free to use the online "Shoppe" to place your order at any hour of any day. See URL posted above. It's always open. (Although, personally, I prefer using the phone for the opportunity of chat and consultation with the friendly brokers.)


Aristotle"Doh!" A reliable source has set me straight#1284251/21/05; 16:20:11

Hey Goldendome, I was close, but no cigar. Not Eric but Philip... Philip J. Fry; not to be so easily confused with his Fox Network counterpart Eric (J.) Foreman.

Gold. Get you some. --- Ari

GoldendomeWho is Eric J. Fry#1284261/21/05; 16:53:38

Hi Ari: As you may know already, Eric Fry is one of the regular contributors on, The Daily Reckoning website. Some days those guys just crack me up. A few days ago Bill Bonner politely harpooned Kiplingers magazine...just politely ripped 'em for never finding a good time not to buy stocks or an economic situation that would suggest caution.
(This harpooning was prompted by Kiplingers first ridiculing his Daily Reckoning site.)

Happy to see that many enjoyed the rebuttal points of the Fry article.

Gold--Looking for more!

NedHelp please with a 'policy' question#1284271/21/05; 20:34:32

from link:

"If, in fact, the Israelis became convinced the Iranians had significant nuclear capability, given the fact that Iran has a stated policy that their objective is the destruction of Israel, the Israelis might well decide to act first, and let the rest of the world worry about cleaning up the diplomatic mess afterwards," Mr. Cheney said.


Does anyone have any information confirming that "Iran has a stated policy that their objective is the destruction of Israel."


geMarket Running Out of Time - Comstock Partners#1284281/22/05; 04:58:16

Interesting market history:

This article explains that "three-steps-and-a-stumble" rule was by Edson Gould. Searching the net, I have learned that he was also famous for his usage of speed resistance lines and decennial pattern. Now, what would Edson Gould comment on 2005 (5th year in decennial pattern) and 5 rate hikes in a row (five-steps-and-then-what?).

968Tiananmen aside, EU readies to lift arms ban#1284301/22/05; 09:32:31

968@ Ned message # 128427#1284311/22/05; 09:56:14

Here's an article on the Israel - Iran matter :

USAGOLD / Centennial Precious Metals, Inc.Peace of mind, 24/seven#1284321/22/05; 15:56:55">gold -- a global calling card
USAGOLD / Centennial Precious Metals, Inc.What you need to know before you buy your first ounce of gold...#1284331/22/05; 15:58:37

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.

TownCrierA good jumping-in point on 'The Trail'#1284341/22/05; 16:11:51

Vintage FOA:

When gold is discussed on public forums and at investment conferences, many true physical gold advocated don't perceive the motivation behind the oratory from today's paper gold bugs. Their interest in physical gold is real, but their actual intent is to gain "a" security by profiting from a gold dynamic created by other's buying actions. Never to gain "the" actual security by entering into the gold dynamic themselves. Many of them don't have a clue of what all that means. Yet, such an understanding would delinenate the huge difference within this concept. Especially today,,,,, and in the future as said difference may make or break the financial worth of many. Here is an example of such thinking:

----- Two guys are talking about shoes:
"Hey, did you notice how few people have shoes today? I know we have them and their use is obvious. It balances our overall physical appearance and gives a long-lasting foundation for our feet and for our human structure. In turn, shoes support all the other investment clothes we own and use during our life."

While these fellas are talking several other "Americans" overhear the conversation and join in:
"Shoes,,,,, shoes,,,, what's this about shoes? You say there is a demand for them,,,, a deficit in supply? Oh yes, we completely understand the concept and fully embrace it. Without shoes, none of us could economically stand up straight. The whole world is woefully shy of them and will someday be forced,,,,, if not by foresight, by need, to own them. There is no way any of us could transverse a hard rocky economic road without gold,,,, weeeee mean shoes! Man alive,,,,, I'm going to buy a shoe factory and make some money from all this new demand."

But, the first two guys observed and asked:
"But, wait a minute,,,,,, aren't you going to follow your own keen concept and buy some shoes for yourself and your family first? You know, that public shoe company does not and will not,,,, by government tax laws and regulations,,,,,, sell it's product directly to it's owners. They can only give paper profits to their owners. During all the big rush, you will be in with all the other "shoeless buyers"

Oh yeah,,,,,, we will later buy them,,, said the traders,,,,, besides, I got a 1/4 shoe now,,,, that's a start. And, by holding these tiny shoe laces, we can stand here and fit in with all you well heeled players (grinning like Texas Westerner on an oil well ). Look, I'm in this to make money,,,,, it's just a concept like all the others I follow. I do the same thing when I'm with other "conceptors" of the same ilk,,,,,, I talk their talk to understand their concept. But, I really don't need your gold as long as I got my paper profits.

OK, said the two guys with shoes. We don't mind your talking with us, so long as your perceptions don't distort our end purpose of having good shoes,,,,,,, and just don't complain when your company's value can't equal the worth of good shoes on the hard road before us.------------

Further to consider,
I think many players degrade our reasoning because it just suites their confrontational nature. Their constant replay of the same past failed positions clouds the view, even as it does make everyone think harder. Some may have to drop more wealth before they learn, I don't know? In addition, some paper players, caught up in the paper game our currency inflation creates, mentally cannot let go. To do so places them outside their social strata even if it saves them much heart ache and money. They feel that only the leverage is in the leverage of some gold substitute, never gold itself as the means to an end. Own silver, mine stocks, erivatives, etc.,,,,,, and that position will restore their already considerable loses, they hope.

It's a: "there just has to be a way I can play this game using some paper system",,,,,," even another more leveraged metal if need be". I, myself, know the feeling and over a lifetime have evolved through it. Problem is I doubt others will have that same luxury of so much time.

So, Randy, let's go back in time and space to build a gold perception the physical gold advocates have understood from the beginning.

I'll post in a few hours (if the power stays on at the Trail Head) (smile)


FOA (1/25/2001; 16:28:50MT - msg#56)
The Gold Of Troy!

[CONTINUED . . . . .]

----(click url and scroll as the story continues!)----

Stoke up the fireplace, put the printer to work and have a read for a spell.


spotlightUS dollar reserve currency status#1284351/22/05; 17:23:41

The subject of the US dollar reserve currency status is conspicuous by its absense on this forum. Can you elaborate on this subject as to any advantange or non advantage of this standing and what the result would be if we were to lose the reserve currency status.

Your opinions are highly respected, I'm sure, by all on this forum.

TownCrierSpotlight,#1284361/22/05; 21:26:01

Conspicuous by its absense might be selling short the yeoman's efforts of FOA (Trail Guide), Belgian, miner49er, Aristotle, and everyone else whose posted variously on the Bretton Woods institution and evolving failure of the IMF; on the widening chasms of US government budget deficit and US trade gaps and how they're being currently bridged by the dollar-supportive recycling flow of dollars into bonds in the name of boosting international reserves; and on the resulting advent and rise of the euro and its supportive new-fangled reserve architecture built around mark-to-market reserve-asset accounting in anticipation for the demise of gold derivitzation (see waning LBMA clearing numbers) and the rise of the free-gold market mechanism for price discovery.

If that rings a bell, as I'm sure it does, perhaps you will agree with me that this Forum has rather been a conspicuous leader in the field of discussion on the evolution of the reserve currency status of the international monetary system. The problem, if there is one, is not of quality of thought, but rather that so very FEW people participate in that important dialogue.

I have on the drawing board several new 'Golden Chalkboards' featuring Aristotle and Belgian that I think will be helpful to have available in readily accessible isolation. I will point them out as soon as I have them loaded to the server. In the meanwhile, here is an older one featuring miner49er who -- if memory serves me correctly -- provides a view on the flow of assets that might be expected through the transition out of a dollar-dominated reserve currency structure.

Thanks for demonstrating an interest in this most important topic. I hope you will encourage others to chime in with thoughts and questions.


PNBThe Chinese inflation dragon.#1284371/22/05; 21:44:13

I await the breaking of the US$ - Yuan peg.

Currently this is the only think holding back a wall of 'goods' inflation that could hit the rest of the world due to China exporting 90% of all manufactured goods that the average citizen consumes.

"Citizen asset inflation" (houses) will probably cease at that point. Tax receipts will fall.

This will be the pivotal moment in the Gold market over the next few years, but it will be heralded by a sell-down of Gold by Chinese investors at the beginning as they mitigate Yuan currency appreciation.

Then the Chinese inflation dragon will breathe fire on the interest leveraged Asset markets.

GoldendomeDollar-Yuan relationship#1284381/22/05; 23:25:29

Hi, Sir PNB: From your post, you sound as though you believe a de-linking of the Yuan and the dollar will be happening fairly soon. Do you have any news or information that this event is imminent? Why would it be in China's interest to de-link from the dollar?
PNB(No Subject)#1284391/23/05; 00:42:23

Hi Goldendome,

I dont have any prescience on the Dollar-Yuan peg.


I think that it is possible the US dollar could drop further against the first-tier currencies, and China will choose to break the peg to avoid rampant local inflation (due to high growth [mostly driven by exports])- which it is trying to constrain.

Its rapid growth is placing strain on its infrastructure : water and electricity, and is driving up commodity prices around the world.

Bearing in mind that China is the pre-eminent consumer of Commodities, and vitually the only manufacturer of affordable consumer goods, We are faced with one of two inflations; the second of which I believe to be in Chinas short-term interest:

1. Commodity inflation ( Producer inflation : current scenario [eventually leads to 2. below)
2. "Citizen's inflation" ( CPI inflation : probable future scenario)

The breaking of the US$-Yuan peg will slow Chinese growth and allow commodity prices to take a breather (good for locking in new contracts) BUT will export CPI inflation to the rest of the world (unless locally manufactured goods can compete).

Obviously there will be concurrent deflations in various asset classes : probably interest leveraged assets.

I dont know when it will happen. But I do think it is inevitable. Artifical markets (eg currency pegs) always fail.

Black BladeThis Has to Be Homer Simpson...#1284401/23/05; 01:38:14


PRAGUE (Reuters) - A Czech man is being taken to court after he hid in a restaurant washroom until the employees had left and then hooked up beer kegs directly to his mouth. Cleaning staff found him drunk and lying on the floor of the bar at the restaurant in the city of Brno, about 200km (120 miles) east of Prague.

Black Blade: I guess he struck a different kinda gold. OK, so it's slow and a late night. But I wanna party with this guy! ;-)

SundeckHomer Simpson's golden hallucinations#1284411/23/05; 03:56:17

BB #128440 and recent discussion on Mr Surowiecki's selective hallucinations...

I wonder if our friend from Brno was having "golden hallucinations", brought on by the golden ale...

Now there is an industry/commodity that could be called a "collective hallucination" - the booze industry...far, far bigger than the measly gold industry. Many of us like to participate in that collective hallucination and not many of us would find it strange to do so...but after it is all over and the hallucinations are gone, what is one left with? A headache and an empty pocket, and perhaps much, much worse... Man! That's VALUE for you. That's really some way to preserve wealth, not to mention health...

If one wanted to tally up and eliminate the various "collective hallucinations" with which mankind flavours the human condition, I suspect life on this planet might be rather dull...

Why pick on gold?

Gold and beer...of comparable age, serving different roles, and both still going strong!


BelgianThe dollar-currency Reserve :#1284421/23/05; 06:24:59

How can any "numeraire" ever be a "RESERVE", when standing on its own ? Even gold never "functioned" as a real reserve since 1913, date on wich the FED...Federal Reserve...was operating right from the beginning on the "FRACTIONAL"-reserve principle. Ever more currency against limited metal goldreserves, capped in a "FIXED" price regime.

Now, time has come to bring in FREEGOLD as the real 100% UNFRACTIONAL Reserve on wich all numeraires can function for what they were originally designed >>> a go-between the barter trade. Any trade IS in principle...a barter. Currencies got purposely OVER-involved into the original fundamentals of global barter. Only for hegemonial reasons.

The above may sound extremely theoretically (academic) and absolutely boring. But it is the only (complete) answer, on the WHYs, for the many confusing facts (controverses). Wait, until the public will misleadingly be informed (indoctrinated)...that we are so smart now,...we don't need any "Reserves" anymore ! Note that a real (wealth) reserve (concept) is NOT the same as (credit) "collateral" !

Today, we increasingly see the evolving struggle between the (€) Reserve pros versus the ($) non Reserve-ists.

The (past) succes of the dollar, in its function as reserve, was based on its accepted capacity to always "export" the inflation that itself produced. The unstoppable dollar flow from the US around the planet. First on the principle of fractional reserve (pricefixed gold and oil) on the principle of debt proliferation, fastly losing any left-overs of former credibility.

The one and only final answer to this is the return to the gold-wealth-reserve concept under FREEGOLD regime. That's what the (ecu) euro-concept stands for. The euro wants gold to function, again, as the universal gold-wealth-reserve.

If you think this is impossible, then continue to accumulate dollar digits as your reserve, further on. Otherwise, make goldmetal your personal reserve in anticipation of the coming (happening) transition. This is NOT a "doom"-scenario or event !!! And it even remains an open question if we shall uberhaupt need a devastating catastrophe to materialize the transition. If it depends on the EMU's goodwill,...catastrophe will be avoided...transition will happen as smoothly as possible.

President Bush and Condi will sleep 3 nights in Brussels before heading to Germany. Will see if "the attitudes" might positively change a bit, from both sides (pragmatism) ?

Highly recommended, is Bill Bonner's essay on Surowiecki !

Wealth,...savings,...credibility,...reserve,...etc, should not be...remain... empty notions. And as an Eurolander guest on this fine forum, I dare to state that "a lot" is moving/changing in Euroland, where I didn't believe myself, it would ever be possible. Not that it will be easy going...

Nice we to all.

Belgian@ Ned msg#128427 : Iran affair#1284431/23/05; 08:27:19

The bottomline in the ME is : The dollar (world's reserve currency) wishes to let the ME enjoy its oil-wealth (reserves) on the exclusively "dollar's" terms ! This can only happen when the ME remains defenseless (military insignificant).

On the actual Iran nuclear affairs, you are certainly aware about the 2 opposing approaches : 1/ The dollar-stick and 2/ The euro-carrot.

This against the background of 2 competing currency-concepts ($-€).

This subject will certainly be discussed (?)(touched) when President Bush comes to the EU.

Politics are about policies...and behind the monetary affairs, are policies, outlined by politicians. And (democratic-?) politics is about winning the public opinion.
Most of the messages/statements/hints/stories, are about the "massaging" of the public opinion. Policies towards Iran, is indeed a hot topic, today.

But it is not Iran, alone. It is about all the places that are involved in the "peaking" oil fenomenon. Zimbabwe (Condi) has no oil and has been included simply to please Tony (UK) and illustrates to what extend, Tony is being politely isolated. Remember the importance of having the UK into EMU !?

Gold, under the dollar regime, helped to keep oil under that same dollar regime. If gold comes under the euro regime, peaking oil also has to become settled under that same (dollar opposing) euro regime.

This, to give an explanation on all the thought tracks that are launched, daily. Israel destroyed the (french build) Iraqi nuclear reactor (Osirak). France and Germany provided a lot of strategic hardware to Israel. That was then ! Now that there is the euro, we are, now.

The next question might come up : Can the dollar keep the euro away from oil and can the dollar keep gold under its $ regime, for ever !? If the dollar can succesfully continue to achieve this,...we must ask ourselves if this can be done without having the already existing huge dollar-debt, explode parabolically !? In other words...the dollar being destroying its reserve-status under its own created debt.

Problem is not only the ME that has major oilreserves. *Cheap* oil is indeed peaking and the oil-cartel is gradually getting more grip on oil-pricing. The euro-concept is certainly going to exploit this in its competition with the dollar...the globe's currency that is losing its reserve status.

It is against this political/policy background that gold's evolution must be seen. The ongoing monetary debauche is at the same time "cause and consequence" of the former and present policies (realities). A very viscious circle, no !?

Let us all think about the many innocent victims that have to suffer under these global struggles. Makes me silent, realizing this.

GoldendomeYuan/Dollar Link#1284441/23/05; 12:07:01

To my untrained eyes, it appears that China is suffering through U.S. dollar induced demand driven inflation. But now through it's Faustian deal with the dollar (they ship us goods we ship them "thin air dollars", non-the-less, used for reserve currency), that now, like junkies, they find their economy hooked on inflation and inflationary(?) growth.

Is it not ironic that the politicos in the U.S. that touted and foisted upon the citizenry here, global trade--with it's promises of world efficiencies and lower cost productions, (to mask their own inflationary tendencies?) now complain that others (Asia in particular) are taking advantage of our lush, fertile consumer society? Some saw it coming, that with it's loss of highly compensated employment and now dependence on other centers of foreign supply.

Now the politicos call for a de-coupling of the dollar/yuan link, as though that will improve something here. Will it? PNB,as you point out, it will stand a strong chance of slowing consumer sales-- should true consumer inflation be resultant; possibly startle the bond market for a number of reasons: inflation, deflation, risk, falling dollar. -------You notice, that we haven't even yet mentioned, The Real Estate Market. Here we might find construction costs continuing to rise, while at the same time, the price of existing R.E. is declining through foreclosures, supply/demand adjustments, and rising mortgage interest rates.------My conclusion, is that the politicos need be careful what they wish for, lest they get it!!!!

To China: I recently read somewhere, and sorry, but the source is gone, that China will have fifty million more new workers entering their work force during the next few years. Their desire to continue growth is likely to proceed. Recently, Jim Willie-- a statistician with economic focus, quipped that the Chinese have 15 levels of integration in their pay structures from agriculture to industry and more people named "Chen" than we have Americans. They will continue to produce, regardless of incremental changes in costs.

Recently, in an article by Nick Beams (Nov.2004) the deputy governor of the People's Bank of China, Li Ruogu, made it clear that China would not be rushed into revaluing its currency—a central demand of both the US and the European powers.
Ruogu warned the US not to blame other countries for its economic difficulties. "China's custom is that we never blame others for our own problem. For the past 26 years, we never put pressure or problems on to the world. The US has the reverse attitude, whenever they have a problem, they blame others," he said.

China's trade surplus with the US was more than $120 billion last year and has been increasing at a record rate, rising by more than $15.5 billion in September and $15.4 billion in August. The US has been demanding that this imbalance be addressed through an upward valuation of the yuan and eventually full currency flexibility. But Chinese authorities fear that if the present regulatory regime is abandoned too quickly this will lead to a crisis in the banking system where some estimates put the level of bad loans at 40 percent of China's GDP.


There is no reason to believe that China fears deflation any less than anyone else. Any increase in the value of the Yuan will put additional pressure on those banks already holding bad loans and possibly too; on those businesses with loans out now, then forced to repay with more valuable Yuan.

In conclusion, we see (again) that the dollar reserve system; the uncontrolled creation of unbacked U.S. currency-sent round the world as no cost purchasing power, is continuing to create unanticipated, but continually growing problems not only in China, but in Europe, and the U.S.

PNB: I concur with you that the Yuan and dollar will one day be de-linked, but that the timetable is unknown.[De-linkage may well be forced by economic deluge, rather than through political decision.] When the link is broken, there are likely to be extremely painful adjustments on both sides. And for that reason, I don't believe that the Chinese after full consideration, will be in any hurry to change status-quo. They may view the reality of complaints made in Europe and the U.S. as sheer uninformed demagoguery- and their holding firm to the link may be avoiding unseen disaster.


TownCrierMore in answer for spotlight#1284451/23/05; 12:34:40

I don't want you to think I was in any way attempting to dodge your request with my answer yesterday as you asked for my input whereas I pointed to the thoughts of mostly others than my own. However, to me the posters I listed provide a loosely united presentation of the international monetary scene. Surely they speak for themselves, but my prior answer to you is to say that they also in large part speak for me, and I find they do it often better than I could do for myself.

(For example, look at Belgian's excellent reserve-related commentary in today's post, #128442.)

Where I do chip in personally on these rerserve-status matters is therefore limited to rounding out the edges and filling in the gaps where I see them as obstacles between these estimable monetary rhetoricians and the audience.

Without reinventing the wheel, but to more fully honor your request with comments of my own, a reasonably broad treatment can be gleaned from the following two "recent" (October) posts:

TownCrier (10/13/04; 10:56:00MT - msg#: 125469)
Rising gold similar to Monopoly's Get Out of "Jail" Free card

---> the post is found at this url:


TownCrier (10/20/04; 21:25:59MT - msg#: 125653)
YGM -- gold and money

---> the post is found at this url:

There were also a number of related posts and dialogue beginning January 7th 2005 that carried into the next several days. You may jump there by using the hyperlink given atop this post, or by using the Archive navigator link atop the Forum (adjacent to the "Post a New Message" link). However, I would recommend beginning with the two cited posts, in the order given. You can cut and past the urls into your address window, or else I'll follow this up with two posts that provide active hyperlinks.


TownCrier(msg#: 125469) -- Rising gold similar to Monopoly's Get Out of "Jail" Free card#1284461/23/05; 12:36:19

available at url

(as promised)


TownCrier(msg#: 125653) -- "YGM -- gold and money"#1284471/23/05; 12:38:25

available at url

(the 2nd hyperlink, also as promised)


TownCrierSpotlight, here is another post for you where I talk about the reserve status of the dollar#1284481/23/05; 13:11:41

In the post I emphasize the artificial support the dollar has received from the recycling mechanism of trade flows on the basis of its reserve status, and pointing to the consequences of its demise.

I was responding to a news article (posted by Waverider) about the latest $60.3 billion monthly trade deficit, and trying to show how the so-called experts failed to capture the correct interpretation of events and consequences.

An excerpt of my commentary is as follows:

TownCrier (1/12/05; 12:06:16MT - msg#: 128135)
trade gap and dollar

About the only portion of the assessment that landed on target was the remark that relative demand for the U.S. dollar waned after the report, as attested to by its downdraft on the FOREX market.

The article states that dollars must be converted to pay for imports, something Woolfolk points to as the fundamental reason for a three year decline, but frankly that situation is nothing new and therefore provides only a very superficial explanation for those not willing to dig deeper.

For starters, we are told to believe that an ongoing conversion to pay for imports is the fundamental reason for decline, yet today's forex action, in response to the report, clearly smacks of punters' reaction and speculative cashflow. Had such a thing as an ongoing conversion for imports been actually occurring, surely the forex effect would have already been fundamentally manifested, and thus leaving the speculators today with less headroom with which to dunk the exchange rate.

In light of the decades-old chronic trade gap, rather than speaking of "currency conversions for imports" as though suddenly the fundamental root of recent dollar weakness, it would be much more appropriate to admit that the dollar remains freakishly stronger than we might be able to understand or otherwise be led to believe by the conversion-for-import theory stated above.

The more properly stated case hinges on the dollar's international reserve status. Despite chronic trade gaps, the dollar has not experienced a full effect of softened exchange rates because it has not been subjected to a commensurate level of foreign exchange conversions among existing money stock. Instead, the central banks of the countries at the source of our imports have been absorbing these dollars as assets on their balance sheet, against which they can issue new quantities of local currency -- without pressuring the dollar/local exchange rate as would be seen via actual forex "conversions".

The foreign central bank's dollars are then put to work back in New York where they are used to bid on U.S. bonds in order to earn interest for the cb's.

This 'recycling' mechanism, as a consequence of reserve status among our trade-flow dollars, is what has fundamentally helped keep the dollar stronger than the narrower view of trade-macroeconomics would let us see.

Therefore, we are left with a more important interpretation of the dollar's recent weakening, and one that meshes not surprisingly with the recent launch of the euro project. Namely, "the fundamental reason for the dollar's decline of the past three years" is that the old supportive mechanism is breaking down as the dollar is losing its key reserve status in the international monetary system.

Choose gold today, because the old supportive mechanisms will only be weakening more rapidly as the balance tips further away from the dollar's reserve status favor. In the downdraft of its fall, all currencies will take a related knock, and gold will ascend the throne -- rightly king of international (and individual) reserves.

-----(end of excerpt)---

So on the whole I hope you will now rethink your claim yesterday and agree with me that COMMENTS about the dollar's reserve status are not what's been conspicuously absent on the forum, but rather wider PARTICIPATION on this particular topic is what has been missing.

So again I would encourage you to encourage others to join in and help fill in the gaps and polish the rough edges.


USAGOLD / Centennial Precious Metals, Inc.Are you diversified? We can help you get there.#1284491/23/05; 14:13:38">Get a head start on the gold market!
spotlightDollar reserve status#1284501/23/05; 16:19:05

Towncrier: Sorry. I missed some very pertinent references to the subject.

Excerpt from a recent Towncrier post referring to weakness in the dollar:

The more properly stated case hinges on the dollar's international reserve status. Despite chronic trade gaps, the dollar has not experienced a full effect of softened exchange rates because it has not been subjected to a commensurate level of foreign exchange conversions among existing money stock. Instead, the central banks of the countries at the source of our imports have been absorbing these dollars as assets on their balance sheet, against which they can issue new quantities of local currency -- without pressuring the dollar/local exchange rate as would be seen via actual forex "conversions".

The foreign central bank's dollars are then put to work back in New York where they are used to bid on U.S. bonds in order to earn interest for the cb's.

This 'recycling' mechanism, as a consequence of reserve status among our trade-flow dollars, is what has fundamentally helped keep the dollar stronger than the narrower view of trade-macroeconomics would let us see.

Therefore, we are left with a more important interpretation of the dollar's recent weakening, and one that meshes not surprisingly with the recent launch of the euro project. Namely, "the fundamental reason for the dollar's decline of the past three years" is that the old supportive mechanism is breaking down as the dollar is losing its key reserve status in the international monetary system.
It would appear to me that one could attribute much of the economic prosperity in the US to the advantage, and abuse of the dollar reserve status. For example: Once congress discovered that we could buy a billion dollars worth of oil, and the dollars would wind up in a US bond, in effect, holding those dollars off the market indefinately, while at the same time working to hold interest rates down, it was full speed ahead for the printing presses.

Also, consider the fact that the most widely used commodity oil, is priced and sold for dollars. As long as we can hold on to the reserve currency status, the law of supply and demand will work in favor of the dollar vs. all other currencies. That does not mean that the dollar will be strong. It means that it will be much stronger ( weak as it gets) than it would be without it.

This is a subject that can answer many questions, and is at the root of many of our problems.

We have had what no other country has had for generations: A credit card that has been allowed to pay its bills, when due, with a credit card. The balance on our credit card is now $3 trillion.

Some countries are finding ways to hold assets excluding US T-debt. China: for example, is diversifying out of dollars by buying up appreciating assets around the world, especially commodities, which has proved a much better investment than the US dollar. I would look for a duplication of the China example by many other countries.

Should for any reason the dollar loses all or part of that advantage, the dollar must fall to levels that could bring unexpected negative results. I'm sure the administration is very well awrae of this. And knows therefore, our economic advantage must be maintained at all costs...We may be witnessing some of that cost now, and possibly much more later on.

I do not look forward to the end of the dollar reserve status because of its possible dire consequences...However, I believe it is youself. Do what people who understand this kind of situation have done for thousands of years...Go for the GOLD.

balzacSUPER BOWL#1284511/23/05; 20:02:48


THE SUPER BOWL wow!!! and I am Canadian.

TownCrierSpeculators and analysts bet Malaysia will change currency peg#1284521/24/05; 01:14:08


Speculators are betting that Malaysia will bow to growing pressure to review its currency peg to the shrinking US dollar, and many analysts believe that not only are they right but the government should make a change soon.

Foreign cash has been pouring into Malaysia, hiking its foreign reserves by 19 percent ($10.7 billion) in the fourth quarter of last year alone...

Comments by economists and even the man who imposed the peg -- former premier Mahathir Mohamad -- that the time is right for change "are likely to accelerate such speculative inflows," Barclays Capital said.

...Adding to the pressure on the government a respected local think-tank, the Malaysian Institute of Economic Research (MIER), said last week the "window of opportunity" for change from a position of strength was shrinking.

MIER has warned that a failure to act soon could lead to a highly disruptive ringgit correction.

"With the global economic prospects getting less encouraging in the next two years and the expectation that the dollar slide will go on further, it appears that right now is a good time for the monetary authorities to consider the dismantling of the peg," MIER executive director Mohamed Ariff said last week.

...perhaps the most notable push for a review came from Mahathir, who defied International Monetary Fund (IMF) prescriptions to peg the ringgit to the dollar and impose capital controls during the 1997/98 Asian financial crisis.

The IMF later acknowledged that Mahathir's action had helped Malaysia weather the storm better than many neighbouring countries.

But the former premier, who retired in October 2003 after 22 years in power, said the sharp decline in the value of the dollar meant it was now costlier for Malaysia to import products from Japan, Europe and elsewhere.

The weak dollar had caused the Malaysian ringgit to depreciate against major currencies, Mahathir said, adding: "I feel the time has come for us to review because we have lost a lot as the value of our currency has fallen."

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

This article is good in that it points out the important element of timing -- taking crucial action during an opportune moment of stability, and also the macroeconomic/political concern that price inflation of imports takes its toll domestically as a peg is maintained to a depreciating key reserve currency.

Especially with regard to the timing versus stability factor should this lesson be applied to China's inevitable decision on action. Meaning, inflation will likely be suffered long before risking collapse with a premature shift in the peg of any significance.

Arm yourself against inflation. Choose gold.


TownCrierArticle is related to my comments to previous#1284531/24/05; 01:24:45

HEADLINE: Canada's PM says pressed China to free the yuan

HONG KONG, Jan 23 (Reuters) - Canadian Prime Minister Paul Martin said on Sunday he had pressed Chinese officials to free trading in the yuan but acknowledged much work needed to be done to prepare China's economy for a more flexible currency regime.

The United States and other countries have pressured China to make the yuan freely convertible...

But he (Martin) noted that one precondition for a floating exchange rate was a "deep capital market".

"I would not advocate a floating exchange rate tomorrow for China, because I think you have got to put in place the underlying financial structure," he said.

China has repeatedly said liberalisation is a long-term goal but that it will make changes using its own timetable and not amid intense speculation or foreign pressure.

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

Previous comments apply, however, due to the much larger size of its internal economy, China isn't nearly as susceptible as Malaysia is to the consequential inflationary impacts of the peg upon the domestic economy in general. Still, it becomes a factor to be reckoned with, biding time until transitionary opportunities are favorable from a social-stability point of view.


TownCrierCentral banks 'shunning dollar' #1284541/24/05; 01:38:48

(BBC) 24 January, 2005 -- Is the dollar's global hegemony waning?

Many of the world's central banks are starting to look to the euro to fill their currency reserves instead of the dollar, a survey suggests.

... 39 nations of the 65 surveyed raising their euro holdings, with 29 cutting back on the US dollar.

The US is running a budget deficit of close to $500bn a year, funded largely by China and Japan buying large amounts of US government bonds.

Similarly, the current account is deeply in the red, the result largely of large trade deficits.

Both factors have helped to push the dollar lower. However, the falling dollar does mean that central bank holdings of dollar reserves are losing value.

"The euro seems to have come of age."

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

In its own turn, the Eurosystem can't hold euros as international reserves, and it surely can't tap into a strong dollar amidst international flight from the greenback, so where then can it look for an asset to serve as meaningful reserves? To gold... very very stealthly, of necessity.


PNB(No Subject)#1284551/24/05; 05:11:50

Yes, Goldendome, That comment by Li Ruogu had me in stitches.
Something to the effect that if the US was complaining about a trade deficit, they could sell China high-tech and weapons tech equipment. What a sense of humour he has!

Well, If the peg stays - commodity inflation - iron, coal, oil, copper are good investments.

If peg goes, I think initial down dip for Gold then monetary inflation.

PNB(No Subject)#1284561/24/05; 05:21:33

Heres the link. (See Nov 23)

The US should "give up textiles, shoe-making, and even agriculture.."

TownCrierEurope gold closes firm on rallying euro#1284571/24/05; 10:53:14

Mid-day snapshot.


TownCrierFrance says wants G7 to discuss dollar weakness#1284581/24/05; 11:06:04

PARIS, Jan 24 (Reuters) - Europe has shouldered too much of
the burden of recent currency adjustments and wants the Group of
Seven economic powers to address the U.S. dollar's weakness,
French Finance Minister Herve Gaymard said on Monday.

He told journalists the dollar's weakness would have to be
addressed by coordination between the world's economic zones
when the G7 meets on Feb. 4 and 5.

German Finance Minister Hans Eichel said he hoped a credible
strategy would emerge on reducing U.S. deficits but said there
would be no "spectacular decisions" at the G7 meeting.

"We agree that the imbalance at the source of the
depreciation of the dollar persists and all should be done to
remedy it," Gaymard said.

"Adjustment for America's deficits should not be made
through foreign exchange markets," he said.

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

With France taking the point position in the public dialogue, we should be quickly reminded of a parallel with the 1960's in which the dollar as reserve was called into question, ultimately leading to an end to the IMF and central bank's fixed ($35/oz) price of gold and subsequent run to $850 per ounce before bullion banks in turn could cage it again through derivatives. This, too, shall pass.


TownCrierGold Anti-Trust Action Committee Plans International Conference In Yukon#1284591/24/05; 13:19:00

DALLAS--(BUSINESS WIRE)--Jan. 24, 2005--The Gold Anti-Trust Action Committee will host an international conference Aug. 8 and 9 in Dawson City in Canada's Yukon, the center of the Klondike Gold Rush at the turn of the 19th century, to discuss the suppression of the prices of gold and silver and the need for new representation of precious metals investors and the mining industry.

The announcement was made by GATA Chairman Bill Murphy at the Vancouver Resources Investment Conference in Vancouver, British Columbia.

"Since Dawson City represents the golden excitement of the past, this historic location is just the place for our conference as we enter a new time of excitement for gold," Murphy said. "We will call our gathering Gold Rush 21."

Murphy listed these goals for the conference:

*Expand GATA's role as an advocate for the precious metals industry.

*Offer the mining industry and precious metals investors an alternative to the World Gold Council, which represents no more than 20 gold companies and has done little for those it purports to represent. GATA will seek to include more of the industry and will not align itself with the bullion banks and jewelry interests, which want precious metals prices suppressed. More than 40 mining and precious metals-related companies have supported GATA in recent years, and GATA believes that it can raise that total to 200.

*Spread GATA's message that the gold and silver markets are not free and not fair, and develop ways to change that. Renowned gold experts from five continents will come to the conference and explain and discuss the price manipulation committed by the gold and silver cartels. The conference will show who has done it, why they did it, and what can be done about it.

*Give conference participants a memorable trip to Klondike Gold Rush country so they can see what a gold rush was and what one might be again. GATA expects that conference participants will forge memorable relationships.

*Receive suggestions from conference participants about how GATA can best build long-term support from the precious metals industry.

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

Solid insights and observations have been made available through the USAGOLD website, Forum and Gold Trail for years. Let's hope they've been reading and have come away inspired by a point or two on the reserve asset issue and the essence of free-gold price discovery...


TownCrierDollar gains amid talk of central-bank reserves plans#1284601/24/05; 13:33:33

CHICAGO (AFX) -- Traders said the euro strengthened modestly after a report confirmed speculation from late last year of a shift in central bank reserve holdings away from dollars to euros.

But the dollar got a little lift from comments by Canadian Prime Minister Paul Martin. The premier led currency traders to scale back expectations for an imminent shift in Asian policies to be triggered by the Feb. 4-5 meeting of finance ministers from the world's seven largest economies...

Such a change presumably would have opened the door to dollar declines against the region's currencies.

Many market participants had been betting the [Group of Seven] meeting ... would yield calls for Asian central banks, which limit their currencies' appreciation against the dollar, to adapt more market-oriented currency

The central bank poll, conducted by a division of Royal Bank of Scotland Group, showed that nearly 70 percent of the more than 50 banks asked had reduced dollar holdings for the euro over the past two years. The survey was conducted between September and December of last year.

"The group ... points out that the results mean that the U.S. cannot take foreign central bank purchases for granted," noted Robert Brusca...

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

Same tune, different words.


TownCrierJP Morgan on gold#1284611/24/05; 14:00:40

JOHANNESBURG ( -- The long-term key driver for the gold price, apart from increased demand from China, will be declining production amid a depletion of assets from the world's main production regions, analysts from JPMorgan believe.

"We believe that the larger driver for gold prices is the coming decline in gold production that we forecast," JPMorgan says in an 80-page base and precious metals report released on Monday.

The firm points out that gold output was falling in South Africa and North America, and that while Australian output is being lifted by the Telfer development: "we think it is likely to report falling production from 2005."

"We are not suggesting that supply pullbacks alone can drive a bull market such as that seen in the 1970s, but we would argue that falling supply has prepared the ground, now we await the arrival of the next catalyst!"

China has yet to catch up to the sophisticated gold market in India, but JPMorgan sees "huge potential" in one of the world's fastest growing economies now that the state has relinquished its control of the gold market. "We believe the best is yet to come from China as the growing middle class increasingly moves from buying essentials to buying luxury goods," the report said.

There is also shareholders’ unfavourable attitude towards hedging...

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

Speaking of catalysts, do you ever wonder why no-one (mainstream press) ever talks frankly (if at all) about the important central bank reserve factor? Sure, the occasional bear likes to trot out the line about "Washington Agreement" sales, but nobody -- and I mean NOBODY -- in the same light ever manages to get their head around and explain the apparent "conflict" within the same Agreement in which the central banks have put the brakes on their gold leasing and other gold derivative participation which is arguably the most gold-supportive maneuver one could hope for.


USAGOLD Daily Market ReportPage Update!#1284621/24/05; 14:49:35">
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.

Monday market excerpts

Gold futures posted a narrow gain Monday to mark the first close above $427 since early January with investment demand supported by fresh violence in Iraq and some weakness in the U.S. dollar.

The market is drawing strength in part "from the increase in violence in Iraq over the weekend," said James Moore, an analyst at in London.

Militant leader Abu Musab al-Zarqawi vowed that Iraqi insurgents will seek to disrupt elections scheduled for Sunday.

Added to that, the dollar also "seems to have run out of a bit of steam," said Kevin Kerr, president of Kerr Trading International. Gold, he noted, never tested a low at the $418-an-ounce level, even when the dollar was headed higher, and that "seems to indicate some good strength and solid support as long as the dollar continues to weaken."

COMEX February gold closed at $427.10, up just 20 cents for the session. But prices haven't closed at a level this high since Jan. 5.

Moore said that gold had another day of euro watching and was likely to remain in this mood over the next couple of weeks in the build up to the G7 summit in early February, that could either add some support to the faltering U.S. dollar, or send it plunging lower.

The Commodity Futures Trading Commission's (CFTC) Commitments of Traders data showed the net fund long position in COMEX gold futures fell to 29,566 contracts as of Jan. 18, from 36,787 contracts on Jan. 11.

It was the lowest tally since June 15, 2004, said Tim Evans, senior commodity analyst at IFR Markets, adding that a fresh cycle of long accumulation may occur in the market.

----(see url for 24-hr international newswire)----

BelgianThe US$#1284631/24/05; 15:01:38

France seems wanting to create a sort of ultimatum atmosphere on the dollar's management...G-7 !?
Funny, how the POO (and POG + euro) shoots up (cold weather) when Euroland trade opens and is knocked down (not so cold weather) when NY opens.
The London CB-journal survey was blamed for the dollar's weakness.
Most CBs cooperated on the euro/dollar-reserve statistics on condition of anonimity. Why are these already known facts put into the spotlight again...just before G-7 !?

If the dollar exchange rate is not going to change the US($) deficits...what else will do the trick !?
How can one repeatedly ask (demand) the US to do something about the dollar, when knowing very well that this is impossible (no solution).
Why are we expecting the chinese to let the yuan float ? China also sells to many other non dollar places, with weaker currencies, on this planet.
A stable (strong) dollar exchange rate would result in prolonged deficit building (increase). A rise in IRs and change in fiscal policies would paralyze the pulling US consumption engine. A declining dollar exchange rate would bring price(stag)flation and have the same dampening effect on US consumption.

The Swiss "one tonne a day" is soon ending. When less metal is moving around, the goldprice starts rising and puts additional (lowering) pressure on the dollar currency !
That historical dollar-index maginot-line of 80 will turn into an attractive support-breaking line again and the dollar might slide into unchartered waters !?

Randy, this time it is different than during the De Gaulle's sixties. Simply because of the euro-gold-concept existance, now. The fact that many CBs insist on untransparency about their (stealth) change of currency-reserves, is boding ill for the dollar's future.
The CBs' are underlining the "structural" decline of the dollar exchange rate and might have been signaling that an "orderly" decline cannot be guaranteed for much longer.
They know that there will be (is) NO political support (anymore) to harden (?) the dollar...dollar-standard.

The UK will be the first to panic, because they are caught between the wall (€) and the wallpaper ($). Watch their comments !

TownCrierGold performance forcus: the recent three years, plus a quarter-century flashback#1284641/24/05; 15:28:02

2001 marked the end and turnaround of gold's two-decade bear market. The April 2001 low of $255.95 (London fix) effectively marked a 22-year low trough, a price level last seen (excepting a brief 1999 match) during 1979 prior to the run up to $850 in January 1980.

During this pivotal year of 2001, the spot price of gold averaged $271.00 per ounce.

In 2002, spot gold averaged $310.00 per ounce, representing a gain of 14.4 percent.

In 2003, spot gold averaged $363.50 per ounce, a gain of 17.3 percent.

In 2004, average spot gold was $409.25 per ounce, a gain of 12.6 percent.

Very nice annual returns to be sure, but this has been a relatively slow, controlled bull run when compared to the spike to $850 during the few months of 1979-80.

The political and economic condition of the world has changed greatly since that time, and there is now a massive overhang of paper currencies, dollars, and dollar-denominated bonds held in international reserves in sizes that were not even imaginable back when gold broke free the first time in 1979.

Are you prepared for a potential "pay-off" from a modern-day reckoning of international accounts? Comparatively, it is likely this time around $850 won't even be a rest-stop along the way to a much higher top.

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BelgianJP Morgan on the *** goldmining industry ***, ....NOT ON GOLD !!!#1284651/24/05; 15:30:38

They NEVER comment/reflect on gold, Randy...they always yadayada about the gold-industry !!! They are NOT communicating with (to-for) gold-advocates, but goldprice punters/wagers.

Have a close look at the XAU-goldmine chart ('84-'05) >>> link : 20 full years of a flat pancake pattern !!! A goldmine industry that has gone nowhere and even gradually lost its original rich dividends. The JP Morgans have been (still are) plundering those wealth mines for the higher cause of the dollar master, whilst serving the rest of the financial industry (stock-bond-forex-market). The goldmine industry has been plundered.

I hate to keep hammering on this specific aspect in the whole gold-equation. I truly wished it were not so.

TownCrierThanks Belgian -- "I hate to keep hammering..."#1284661/24/05; 16:12:10

I appreciate your tireless effort to put the special emphasis where it belongs. You are right and wise to do so.


Belgian@ miner49er#1284671/24/05; 16:41:41

Just finished re-reading your fine "contribution" on understanding gold and its (inevitable) future. These were already excellent thoughts, then ('02) good Sir. Highly recommended to all newbies who suspect that something happened...and something else is happening...with gold.

Now that I slowly start to mature, I realize how deep your insights, really penetrated already before the present facts, confirming the changes. You provided a very fine (refined) report on how exactly the spirits do evolve.

It is a pity that many dialoque partners of those early days have that we are getting closer to the gold-change. Aren't they seeing the changes ?

Thanks miner !

The Invisible HandS.O.S.#1284681/24/05; 16:47:39

Belgian said that we are getting closer to the gold-change.
How close are we? When is that change going to happen?
Trail Guide can you hear me?

The Invisible Handthe Petro-Euro#1284691/24/05; 17:43:41

Now that Venezuela has signed bilateral oil agreements with Iran, Russia and China, the Bush administration, the bully Bush sees red ... takes these sovereign acts as a declaration of war ... of open "terrorism", as being sufficient pretext evidence to include Venezuela in the coming holocaust of the "axis of evil." The only thing that remains for full military intervention, is that Venezuela, like others, as ultima ratio, may be forced to switch over to the Petro-Euro, or to create a own Latin American currency.

TownCrierTreasuries mixed ahead of new supply#1284701/24/05; 18:07:08

NEW YORK, Jan 24 (Reuters) - U.S. government debt prices were narrowly mixed in thin trade on Monday as the market geared up for a fresh batch of data and the latest serving of supply from the Treasury.

...Dealers were gearing up for another debt sale this week after the Treasury Department said it would sell $24 billion of two-year notes on Wednesday. The new two-year notes to be sold on Wednesday yielded 3.2075 percent in when-issued trade.

Treasury will also auction $8 billion of 20-year inflation-protected notes, known as TIPS, on Tuesday followed by the two-year sale on Wednesday. Traders expect good demand for the issue, since longer-dated maturities have been in favor in recent weeks.

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Black BladeInvestors still wary of gold, silver#1284711/24/05; 19:11:19

52% rise in gold's value over 5 years fails to impress most professionals


(January 23, 2005) — The stock market was on a roll at the start of 2000. Prices were at or near an all-time high, the Nasdaq index was over 4,000 after an incredible runup in tech securities, and the bulls were in charge. Buy, buy, buy was the mantra. Buy, buy, buy stocks, that is. While some financial advisers were warning that the top was near and it might be time to take some profits, gold and silver would have been at the bottom of just about everyone's list of good investments for a five-year period.

Some say this is a good time for profit-taking for those who have held their gold for awhile. But others predict prices will continue to rise. Even for those who don't invest, experts say prices are worth watching because of what they reflect about the strength of the dollar, the state of the economy and the stability of world affairs. With gold prices in the United States recently rising above $450 an ounce — the highest level in years — it signals the U.S. economy is still shaky, at least from an investor's perspective. The price has since eased. "Gold is essentially the commodity you want to have when there is danger in the economic arena," said James DiGeorgia, a Boca Raton, Fla.-based gold and silver analyst and author of The New Bull Market in Gold: $1,000 Gold and the Many Ways to Profit from It. When the dollar weakens, gold prices generally rise, he said. With gold prices up, more people have been turning to gold as an investment, DiGeorgia said. He recommends investors put 5 percent to 10 percent of their liquid assets — or assets available for investment — in gold. "That could be gold stocks, but we encourage people to buy physical gold ... that they can put in the safe-deposit box," DiGeorgia said.

Black Blade: Isn't that always the case? So-called "experts" drive their clients away from physical assets like Gold and Silver and into stocks. They are probably ticked off having lost out on the three-year bull market. Still, these cycles run 16-18 years on average and we still have "room to roam". Another point is that Gold is not an investment per se, but rather a form of "portfolio insurance" as stated in the article. A modest position in Gold can and most likely will counter-balance massive losses incurred by a shaky stock market. I know – been there and done that.

Black BladeGold higher as traders eye Iraq, dollar#1284721/24/05; 19:18:01;siteid=mktw


SAN FRANCISCO (MarketWatch) -- Gold futures posted a narrow gain Monday to mark the first close above $427 since early January with investment demand supported by fresh violence in Iraq and some weakness in the U.S. dollar. The market is drawing strength in part "from the increase in violence in Iraq over the weekend," said James Moore, an analyst at in London. Militant leader Abu Musab al-Zarqawi vowed that Iraqi insurgents will seek to disrupt elections scheduled for Sunday.

Added to that, the dollar also "seems to have run out of a bit of steam," said Kevin Kerr, president of Kerr Trading International. See Currencies. Gold, he noted, never tested a low at the $418-an-ounce level, even when the dollar was headed higher, and that "seems to indicate some good strength and solid support as long as the dollar continues to weaken." The futures market is likely to see prices for the yellow metal move even higher, Kerr said.

Black Blade: What is certain is that the US Dollar will continue to slide much further. A simple truth is that the twin deficits are clearly unsustainable and the anti-dollar (Gold) is about the only real defense. The dollar is beyond help and recovery is no longer in the cards without some severe drastic changes too painful to even contemplate. In short the dollar is toast regardless of what administration officials say about a supposed "strong dollar policy".

Cavan ManTown Crier (RE: GATA)#1284731/24/05; 20:35:55

This team has sallied forth in the face of opposition from both anti-gold and pro gold camps for a number of years now. I can tell you these guys are physical gold advocates in addition to pro shares. You are implying the single and sole source of rational opinion is right here at this venue. In an opaque and complex market Randy, ALL opinion should be considered; including the mysterious gentlemen who promised to reappear and who have NOT (to date). Yes, GATA has read this august forum. There are many sides to this SAME gold coin--all correct. As I hope to do business with Mike maybe yet this week, I hope you will not be so short sighted to remove this post (or ANOTHER employee).
Caradoc" Millions go missing at China bank"#1284741/24/05; 21:07:02

[Snip #1]
Two senior officials at one of China's top commercial banks have reportedly disappeared after funds worth up to $120m (£64m) went missing.
The pair both worked at Bank of China in the northern city of Harbin, the South China Morning Post reported.
The latest scandal at Bank of China will do nothing to reassure foreign investors that China's big four banks are ready for international listings.
[Snip #2]
China's banking sector is burdened with at least $190bn of bad debt according to official data, though most observers believe the true figure is far higher. Officially, one in five loans is not being repaid.
[End of snips]

Think maybe those millions would have been safer in gold?


GoldendomeAn excerpt from Sir miner49er#1284751/24/05; 21:44:46

Belgian's link to the chalkboard earlier today, promped my taking the journey to some of Sir miner's posts of 2002. Begian, you are certainly correct regarding his insights, intuition, and knowledge. I have spent the evening reading through them and hope that is is OK to selectively re-post a very small segment dealing with the Euro, Gold, and the Dollar. We all would certainly benefit from miner's revisiting the round table.

miner49er (05/30/02; 09:56:43MT - msg#: 77006)

Euro Breakout and a Rising POG in the Currency War...

As long as gold was on a chain around the original market-marking price of the euro reserves, the euro could be kept down. As long as the dollar price of gold was kept down, a rising euro would devalue their POG reserves and hurt their balance sheet. Consequently, a weak euro kept the dollar strong, and assured of its continued role of world reserve currency. So POG-on-a-leash = Euro-on-a-leash. This link refers to a speech by Alan Greenspan from last November. I quote an excerpt here:

"Because the attractiveness of any vehicle currency grows as its liquidity increases, an international currency has a tendency to become a natural monopoly.

"If the underlying demand for one of two competing vehicle currencies falters for a reason not clearly perceived to be transitory, and its bid-ask spreads, accordingly, increase relative to its competition, demand will shift to that competitor. But that shift, in turn, will widen the bid-ask spread of the faltering competitor still more, inducing a further shift of transactions to the alternative currency. This process ends with the demise of the weaker currency as a competing vehicle and the stronger of the two becoming the sole surviving vehicle."

This was the hope and dream of the dollar faction. As long as they could keep gold down, they could keep the euro down (since the ECB could not afford any contraction of their balance sheet). They would then wait it out, advertising the dollar's superiority in facilitating global settlement (i.e., EZ munny), and still maintaining the benefits of price stability, until Europe ultimately blinked...

The dollar would sacrifice its manufacturing sector, as the euro would battle high oil prices and other imports (in strong dollars) and the political pressure it brought in their sagging economies. (Also, steel tariffs on our part were just an indiscreet effort to further damage Europe by off-setting the one benefit of a cheaper euro: competitive advantage in export pricing.) The major participants whose interests aligned with the ECB could not just go into the market and bring relief by bidding gold, as their buy signals would cause a rupture in the market(s) as the dollar infrastructure would quake as money went to gold in torrents -- not necessarily benefiting the euro in this kind of move. It appears they had to just let fundamentals take their course, as the buying pressure had to come from beneath. And it would. And it is.

This type of pressure is slower and more manageable, and more easily apprehended (and thus assimilated) by people. But once in motion, cannot be reversed. The pressure valve can still be regulated for a while, and it will be upon the dollar faction to perform this. Once physical buying pressure overcomes the ability of paper interests to manage the price of gold down, there is no longer any need to keep the euro down (those ECB balance sheet concerns...). As long as the POG appreciates more rapidly than the euro (and it will for sure), the balance sheet is enhanced.

A strengthening euro increases euro confidence as it decreases the cost of dollar-priced oil (and other imports) and thereafter encourages euro priced oil, which benefits euro zone economies, which encourages euro investment, which means more euro debt, which increases liquidity, and stresses the international currency status of the dollar. This causes further dollar devaluation, which pressures dollar-priced gold up, which encourages more global physical off take which further pressures POG up generally, which damages any currency that is structured to compete with the POG, and benefits those that are designed to go with a rising POG.

Goldendome@ The Invisible Hand#1284761/24/05; 22:19:13

These contrary oil producing democracies (your article on Venezuela) certainly are more difficult for the U.S. to keep corralled than say, the oil producing dictatorships of the Middle East. What are we thinking of...setting up a proto-type democracy in Iraq?

The current administration continues to underestimate the overwhelming popular support for Chavez, who has, as he said he would, distributed more benefits from the oil wealth to ALL of the population of Venezuela.

TownCrierPlease put away the fangs and down with the hackles, Cavan Man#1284771/25/05; 00:52:49

No offense was intended, I assure you.

My only intended implication in the comment was that there were important nuances we have through great labors collectively brought forth, nuances that I have not so surely been convinced that GATA has absorbed into its own collective interpretations, yet would be beneficial were it to do so.

I should put it this way. How is it that passionately interested gold-advocating individuals like MK, FOA, Belgian, Aristotle and miner49er, to name a prominent few, can speak at such great lengths about the shape of the gold market and weather price updrafts and downdrafts with such seeming calm indifference and above all with a lack of serious venom for the entities and institutions they deem responsible?

I think the conclusion is that there is a certain deepness of wisdom and understanding present in those minds, and all I'm saying is it would behoove any and all other gold-oriented parties to endeavor to assimilate whatever exactly it is that is being put forth by the likes of these gentlemen. If I have somehow presented my view in such a way that I have overstated the value of the dialogues occurring on this Forum, then I must ask you to accept my apology for seeing value where you deem it not to be.

Henceforth I'll endeavor to curb my enthusiasm; but that's gold for you -- it so easily stirs and elevates the passions of lesser men like myself.


Knallgold"How to fix the social security" the article asks#1284781/25/05; 01:54:51

Do I see a golden egg there??
SundeckSouth African miners doing it tough#1284791/25/05; 04:17:19,3523,1796278-6078-0,00.html


"The challenge for all of us is not only to make profit at an operating level, but to make enough to reinvest," Cockerill said last week. Gold output in SA, the world's largest producer, has plunged about 60% since 1971 to 376 tons in 2003, the Chamber of Mines said.

Costs are rising as companies dig deeper for gold and unions push for higher wages, which make up about half of mining costs.

The gold industry accounts for 13% of SA's export earnings and employs 195000 people, government statistics show.

Mineworkers' pay rose 7% in July after a 10% increase in 2003, exceeding SA's inflation rate of 4,4% a year.

Mining gold in SA cost $349/oz in the third quarter, 40% more than the global average, says Bruce Alway, an analyst at GFMS in London.


The rand price of gold has declined about 25% in the past three years. The rand gained 5,1% in the most recent quarter.

"The situation is a lot worse than is immediately apparent," Neal Froneman, CE of Afrikander Lease, said last month.

The uranium explorer closed its only operating gold mine a year ago after the rising rand made the site unprofitable.

"Repercussions will come in 5-10 years, when it will be difficult to justify mine expansions that should have taken place now," he said.


Sundeck: The situation in SA appears to be getting grim, rapidly rising input costs, major layoffs, mine closures, diminished exploration and development, high-grading and falling production. A gold-rich country currently reaping a grim harvest indeed...

968Giant in decline#1284801/25/05; 04:23:55

Article by Marshall Auerback.
Oil: The dividing line of the new Cold War
And then there is the problem of crude oil, which, despite predictions from ever-optimistic financial analysts, has once again begun to approach $50 a barrel. The one thing Mr Bush has never mentioned in relation to his Iraq war policy is oil, but back in 2001 former secretary of state James Baker presciently wrote an essay in a Council on Foreign Relations study of world energy problems that oil could never lurk far from the forefront of US policy considerations:
Strong economic growth across the globe and new global demands for more energy have meant the end of sustained surplus capacity in hydrocarbon fuels and the beginning of capacity limitations. In fact, the world is currently precariously close to utilizing all of its available global oil-production capacity, raising the chances of an oil-supply crisis with more substantial consequences than seen in three decades. These choices will affect other US policy objectives: US policy toward the Middle East; US policy toward the former Soviet Union and China; the fight against international terrorism.
It's strange Auerback mentions a lot of the geopolitical problems the US will face towards oil, but he doesn't mention the possible switch from a petro-dollar to a petro-euro.

Ned@ Belgian @ 968 @ all#1284811/25/05; 05:09:17

Re: posts 128480, 128427, 128431, 128443


Thanks to the reference to the 'asia times/middle_east' link. Much more to be found at that site. What ALWAYS boggles my mind is the depth of a topic when examining from multiple points of view.

Iran is definitely a 'hot topic' and if you talk to 25 people you will get 25 opinions. If you read from 25 sources, you will find yourself at the number 50. Asiatimes certainly has its viewpoints.


I would like to explore this Iran debate a little further but ever so gingerly. I always look at things with a top/down approach. It seems natural to me.

I see the world in 20 years as a very dangerous place to be. Can the world survive the next 20 years?. There are so, so many stories about commodities problems like oil and water, and S.S. problems and financial issues, debtbergs and pensions funds etc., etc. Then we move to military problems, then swing to currency and superpower problems and so on. The future I must say, and I hope I'm wrong, is grim.

Your first statement says it all:

"The bottomline in the ME is : The dollar (world's reserve currency) wishes to let the ME enjoy its oil-wealth (reserves) on the exclusively "dollar's" terms ! This can only happen when the ME remains defenseless (military insignificant)."

This is an excellent fundamental statement. The entire Iran debate can be centralized around this sentence. What happens when the 'terms' change? What happens when the ME military becomes not so 'insignificant' (Iran w/ China, Russia, India, Japan?)

The 'West' does not want Iran nuclear for several reasons, (3) being that a) it will not be militarily defenseless b) it can dictate 'terms' c) if it has 'terrorist' tendancies, these can be executed. (For the unitiated this is 'POLICY', not opinion. Perhaps better stated it is FACT, ask Cheney!)

So we have the West pressing hard (the stick), first the Iraq war and now the question is Iran next? We have the EU, holding the carrot (in your terms) and how does the ME and Asia think? Well my good man, we are about to find out. China and India et al are not going to sit back and wait. THEIR FUTURE is at stake!. The Middle East has been (somewhat?) non-committal and Asia has been near silent but as we enter into the 'Peak Oil' era alliances will be declared, allegiances will be made.

As you say these countries cater to 'dollar terms' today. This will change and with it, as Michael Klare declares in his new book, comes BLOOD.

Sorry to be grim and negative, looking top-down I see no other alternative.

Have a golden week.


Belgian@ TIH (s.o.s.)#1284821/25/05; 05:31:40

With, "getting closer", I mean that "gold" is slip-sliding out of its dollargrip and is increasingly to be looked at, through "euro" glases !
Simplier : Currencies are in the process of getting away from their status of being dollar-derivatives !

CBs know that the global economy is going to become less volatile for a considerable time. CBs do encourage this, with their policies. When a global economy is changing...the currencies' relations do also change.

Go back to 1999, the introduction of the euro, and make a list of everything that (dramatically) changed, because of the very existance of the euro. Suddenly, this new fiat lost its "z" from zeuro !

But archaic, rusted fiat-goldbugs, wish (their) gold to stay under the dollar-regime. Very understandable of course. By getting older, changes are not that easy to digest.

Another's enormous merits lay in his offering of the view that dollar-gold is evolving into euro-gold. Just like the CBs are evolving from dollar-reserve to euro-reserve. And those same CBs are holders of 1/5 of the total aboveground gold-wealth.

Getting close/closer : Hope, you don't expect me (or anyone else) to tell you an exact date and hour. Their is no such thing as a ready, steady, go-shot ! This dollar-gold thing is slowly "bending", whilst more euro-gold heat is growing/building.

And guess what...I do look how the goldmine-industry is evolving ! It gives me an idea about how much dollar-gold is or isn't bending. Watch how South African goldmines are begging for a lower rand. A rand that is associated with huge remaining underground goldreserves. A rand that is trapped into its dollar relationship and the dollar-gold as well. Who or what exactly is plundering the underground gold !? How close or far away are we from the end of exhaustive dollar dictates !? Do you understand now, why I keep watching goldmines ?

Close/closer : 1999, euro year, the POO under $10 pb ! Now $48. Is this close or closer !? Did you ever suspect any relationship between oil and gold, before Another opened this window !? Same for gold/oil/dollar/euro !? Do you know at what $-POO, that oil (+ oil-exploration) will be priced, invoiced in euro !? Is $48 ($55) pb, close/closer than $10 pb !?

Those who see and realize that this planet keeps on walking away from the dollar and getting close/closer to the alternative euro-concept,...are indeed getting more connected with the evolving realities.
The factual argumentations are piling up... as they are posted overhere.

Why did the DowNas crashed right after the euro recouped its (exch. rate)loses (30%) versus the dollar (1999 > 2000) ? Why did the POG crashed to obscene ($253) lows, right before the euro introduction ?
Haven't we evolved already quite a stretch from this period !? That's what I mean with getting close, closer.
Cheers TIH (an dada).

@ Cavan man : Yes, I would like to see GATA, thinking more deeply about the shift from dollar-gold into euro-gold !
But then, the old (aging) dollar-gold-industry, we all thought to know so very well, must become seriously questioned. Is GATA prepared to do this or do they have the fulliest confidence that goldmining will remain what it has been for the past 35 (70) years. Do you remember that famous Homestake mining chart, going parabolic under the fixed goldprice regime !? Are we, today, under the same *dollar*-gold-regime as then !?
I always wellcome your argumentations.

@ 968 : Have you already had the time to reread "The Gold Trail" Archive III (see link) ? Only 45 pages of gold ...firmly * ON THE ROAD *! Not the cryptic stuff, but straightforward, clear thinking. Check how close/closer we have already been coming to what has been said in 2001 !

@ All : When we see that dollar-papergold's price is increasingly "disappointing" under the given circumstances...we "must" be alerted and conclude that something !!! The JP Morgans and tutti quanti keep on repeating their optimistic goldprice statements...$480...$500...$600, but not further. They are pulling our legs. They keep the fiat-goldbugs hoping for papergold profits, whilst they are not materializing. Don't take the obscene $253 POG as a reference ! It isn't one...that was an ugly aberration (attack on the euro !).
The same goes for the 25 year XAU flat average of 100, with only a weak +30 and -30 points of oscillation !!! What a farce.

No, dear (its fiat price) has been "flat" for the past 25 years, FOR A VERY GOOD REASON !!!
Watch a similar long term $-chart of the $-POO ! Something very fundamental has already happened here with this particular finite wealth tangible !!! The oilprice left its 30 yrs horizontal pricerange and indicates that it is in the process of leaving its dollar pricing master ! Expect gold to do exactly the same !!!

Yes, we are definitely getting close/closer to "the change" ! The "dollar-logics" are already a thing of the past. But this dollar-logic is still being served to you, day after day. See through it.

(see you smiling Randy)

SundeckUS debt per household...ballpark figures#1284831/25/05; 05:56:39

@968 #128480

Taking Marshal Auerback's figures:

The result of this reluctance to confront the consequences of America's credit excesses - a federal-government debt level that is now at US$7.5 trillion. Of this, $1 trillion is ancient history; the other $6.5 trillion has built up over the past three decades; the last $2 trillion in the past eight years; and the last $1 trillion in the past two years alone. According to economist Andre Gunder Frank, "All Uncle Sam's debt, including private household consumer credit-card, mortgage etc debt of about $10 trillion, plus corporate and financial, with options, derivatives and the like, and state and local government debt comes to an unvisualizable, indeed unimaginable, $37 trillion, which is nearly four times Uncle Sam's GDP [gross domestic product]"

and assuming that the approximately 300M people in the USA occupy about 100M "households" then:

1. The $7.5T that the Federal government has generously contributed to the household debt works out to be $75,000 per household (serviced through federal taxes).

2. However, the households themselves are not entirely blameless in the debt profligation, since the $10T that they run on their mortgages and credit cards etc corresponds to $100,000 per household on average (serviced by mortgage repayments, monthly credit-card payments and the like).

3. On top of all this, there is another approximately $20T that is partitioned amongst state governments, companies and other entities...a sizeable part of this could probably be fairly considered as US "household" obligations, since they are the ones who are eventually going to have to service it, either through state taxes or by stepping up to the counter to purchase the products made by the businesses that have incurred the debt. Let's say that about half, $10T, is sheeted home more or less directly to households. That makes another $100,000 per household.

Hence, the total average household "debt load" is around about $275,000...

I wonder what the average US household income is?? I would guess about $70-80,000. Maybe too high?? (Does anyone know?)

Is it possible to repay $275,000 on an income of $70-80,000? Well, yes...if interest rates are low. Annual interest at (an impossibly low) average rate of 5% on $275,000 is $13,750. More realistic average rates (across all kinds of debt) of 10% implies interest payments of $27,500 per year. Principal repayments are on top of that. Large...but the situation is not impossible.

In fact, for an average interest rate of 10%, principal and interest payments of $30,000 p.a. per household could amortise the debt over about 25 years.

Clearly the calculation is very sensitive to interest rates and average household income.

Manageable perhaps, but still rather a large amount for each household to be spending on debt servicing alone...


Clink!Want to Reform Social Security? Stop Spending.#1284841/25/05; 06:26:10

Ron Paul's take on the issue. It's a short (but pithy) read so it's worth spending the time, but there was just one aspect which I had been thinking about myself, but I don't think has been aired here :-

Notice that neither political party proposes letting people opt out of Social Security, which exposes the lie that your contributions are set aside and saved. After all, if your contributions really are put aside for your retirement, the money will be there earning interest, right? If your money is put away in a trust fund account with your name on it, what difference would it make if your neighbor chooses not to participate in the program?

End snip.


Belgian@ Ned#1284851/25/05; 06:45:41

As a 55 yrs old Eurolander (citizen of the world), I think of getting (having) some idea about what exactly a war and its aftermaths are all about.
The ongoing wars (just like WWI_II) are about hegemony/power/dominance, etc.
I remain convinced (not fanatically) that today's wars are about the dollar's logics in confrontation with the non dollar factions on the planet. That's why oil / gold / currencies are at stake, now.
Dollar's logic easiest explanation is : printing presses...and...goldprice-pricing control. Remember how it went with the Britisch sterling empire. It is happening with the dollar-empire now. The euro will become what the dollar became, after the rise and fall of sterling.
Do you remember who it was that divided (mapped) the whole ME territory !? The UK (and some others)...and it was, then already, for and about oil !

The only fundamental aspect of this entire adventure, that interests us overhere, is gold's future. I am of the opinion, the dollar-logic(s) cannot go on for much longer. Whatever the outcome of the war (wars) might become (winners and losers). War-wars, mean printing presses !!! And one does not start a war (wars) when there is the sure prospect of continued general wealth and prosperity.

Top to bottom view : Japan and Germany lost the WWII. Are they poor nations, today ? Will the US (and its dollar) win this war again and continue to lead, the entire world, from then on !? Allow me to doubt strongly on this.

Can the already overstreched dollar (world's reserve) afford to wage war-wars and losing its oil association, anyway !? War is not exclusively a business of bombs and bullets, but also a matter of winning/losing, friends and allies. All this is part of the background styling of the fiat-currency that the factions do represent. We are not here to discuss the wars as such but rather the consequences of these wars for all of us !

The ongoing and coming war(s) struggles are certainly fastening the shift out of the dollar(monetary)logics. The past 30 yrs of gold-containment, was one of those pillars that made the dollar logics, possible. The dollar was build upon and survived for so long, thanks to the gold-control.
But, even today, we still have a majority of critics amongst us, who keep on denying that gold is being managed.
Simply because we were all conditioned for so long in a dollar-centric behavior and view.
Not only gold, but also oil, was a pillar of dollar logic. That's why we talk about gold and oil wars. When the Britisch empire switched their fleet from coal to oil engines...they went for the ME ! Even Israel is (an important) part in this whole grid of equations.

Once a war-machine has started, it ends with very litlle net winners and a lot of losers.

I am of the opinion that a dollar crash, might prevent the happening of war(s) evolving into catastrophic proportions (WWIII). Maybe, the dollar itself might agree with such an outcome ? The only remaining (impossible) alternative is agreeing that we all stay with the dollar and contribute in hardening it again !? I doubt strongly that this is possible. Remember our talks about unilateralism versus multi-lateralism (internationalization). I think that Iraq is as much as the planet can (will) tolerate. W're doing fine so far in other parts of the world (Ukraine)...but will it continue ? And if things remain moderate (orderly) will the ongoing changes be halted ...reversed !? Don't think so, because of the rising East, as you mentioned correctly. Trans-Atlantic is evolving into Trans-World.

More war(tensions) = more dollar printing = less dollar support = more goldcontainment >>> Resulting in more dollar resistance and increasing drive for change...closer to the break up point ! Simple, no ?

Belgian@ Knallgold#1284861/25/05; 07:04:57

Yes, it is definitely a "nest-egg" that is pictured...but I doubt they wanted it to be percepted as "golden" !
A golden nestegg can only function properly, when its price is allowed to reflect its real worth.
At present, it are the nests that inflate in price,...not the eggs. But, as you probably guessed,...the egg will hatch anyway and a golden bird will fly high...VERY HIGH. Then the nest will desintegrate. Natural, no ?

BelgianThe $-POO#1284871/25/05; 09:50:34

Analytical commodity price-watchers, project a POO of $60 within the coming six months, when the dollar succeeds to remain into the known charted territory (above 80).
Regardless of oil consumption and oil near peaking, the oilflows remain "supply-driven" and therefore the pricing-power remains firmly in the oilreserve-owners' hands.
There will be no increase in oil output, because the oilowners don't want to take the necessary steps, NOW, to make this (technically) possible !
The era of accomodative cheap oil is taking a pause.

Dollar Bill.,.#1284881/25/05; 09:52:02

Is the reason Bush can proclaim that we support the democrat minded citizens in any non democratic nation the us deals with, is the reason, that at this point in time, economically the nations of the world are tied in too deep to the one world dollar thing?
That being the -geopolitical goal- of the last, oh I dont know, since that =dollar as reserve currency- agreement they made in the thirties or fourties, now that surprisingly enough, the iron curtain is down and china and russia are tied in, the ME is tied in thanks to the cold war, saddam, and the iatolahs in iran, gatt, wto, ect.
Other than tha alka guys, and castro, isnt the rest of the world way deep in the system and if it is a done deal, G. Bush actually doesnt need to sweat the intricate dance of economic mezmerization the US played on the world courtesy of world events and the long running effort by finance guys to control the world.
Greenspan is in effect running the world finances, and G. Bush can in effect not sweat the fact that he just told a whole lot of countries that the US in effect, views them as tyrannies to some degree and wecomes the peoples efforts in those countries to unseat thier rulers!
Rather wild public proclomation he made to world leaders!
If the economic dance was still fragile, I doubt he would have been allowed (frankly) to make a speech that was that bold.
Since the US has moved with finacial needs in mind primarily in its past, I can only guess by his speech that the new world order is economically at least, firmly fixed in place.

Otherwise, I would have to say his speech was reckless and was strongly opposed by the finacial faction that really holds sway in US govt decisionmaking.
Just guessing ! Still out in left field, Me:)

OvSBelgian#1284891/25/05; 10:03:28

Thanks for keeping this forum unto
a high niveau. As a neutral and
often bemused spectator I must tell
you that I am not as optimistic as you
are on the eventual outcome of this
At the top of the pyramid is a totally
committed group that will use ANY means
to control the destiny of this planet.
It is their God-given RIGHT to do so
(from their perspective).
Gold is just ONE means to this end. It
is NOT a logical progression that will
lead to FREE GOLD. It is part of a matrix
that can be planned but not prognosed,
not even by insiders.
But to accummulate gold and silver just
happens to be the most sensible long-term
strategy for the current time under the
present circumstances--just do it with
money you can afford to sit on--like a hen will,
hoping to hatch her egg into a golden mirage or
solid wealth. They are both possible.
With great respect and looking forward
to your continuing efforts to keep us informed
and entertained, I remain cheerfully yours, OvS

968ECB Press Release : Weekly financial statement.#1284901/25/05; 11:15:12

Gold and gold receivables : -61 million EUR to 125609 million EUR.

Foreign currency reserves : -0,9 million EUR to 155,8 billion EUR.
Isn't it remarkable how well the market absorbs this weekly CB "selling" of gold ?
Miss Jessica C., why can't China buy this gold ? Why can't China get one tonne a day of the Swiss (until March) ? Or is this "barbarous relic" already assigned to a favoured buyer ?
The more I think about this contradictions, the more I become convinced about the re-distribution theory (cfr. Belgian). A re-distribution between countries that will/want to adopt the euro (gold) as their new reserve.
Then the question remains : what's the problem with China ? Is there a prohibition in the WAG or in ECBGA to re-distribute CB gold to China ?
(Perhaps the gold will come if they let the yuan float ?)

@ Townie : thanks for the reserve currency links.

@ Belgian : Re-study of FOA and miner49 is ongoing (ik laat weten als ik ne repetitor nodig heb).

USAGOLD / Centennial Precious Metals, Inc.Request a FREE info packet today!#1284911/25/05; 11:46:20

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?"

TownCrierTreasuries slide as stocks jump, no help from TIPS --/and/-- US Treasuries extend decline on sloppy auction#1284921/25/05; 12:01:56

NEW YORK, Jan 25 (Reuters) - U.S. Treasury debt prices slid on Tuesday, getting little help from an auction of inflation-protected debt that drew only modest interest.

Bonds were already taking a beating as investors seized on a rally in stocks and strong consumer confidence data as convenient excuses to sell a market that had been marching higher since Christmas.

The sloppy auction of reopened 20-year Treasury Inflation Protected Securities, known as TIPS, offered no comfort to bond bulls, who had been hoping demand might have been more robust given recent strides in longer-date debt....

"The market is just flopping around until we get some more significant news," said Gregg Cohen, a trader at CIBC World Markets in New York. The flopping was tilted to the downside...


NEW YORK, Jan 25 (Reuters) - Treasuries prices extended an early slide on Tuesday after an auction of new U.S. government debt drew only meager demand, surprising many traders.

The sale of $8 billion in reopened 20-year Treasury inflation protected notes, or TIPS, went at a high yield of 2.00 percent, above what many had expected. It drew bids for 1.51 times the amount on offer, only just beating the modest 1.48 achieved at the initial sale in July.

^----(top excerpt from url)----^

Don't think that gold markets were under isolated pressure today. And as bond investors head toward the door, they will likely want to come away with gold. Seize today's bargains with a call to USAGOLD - Centennial. To get the ball rolling, try asking about Krugerrands and gold Swiss 20 franc coins (Helvetias) today.



TopazStocks shine "despite" POO.#1284931/25/05; 12:47:21

Are we NOW to assume POO is not relevant to the economic prospects of those-there US markets?
We could expect, with all the SS rhetoric that SM's would track upward, but to do so without a concurrent decline in Oil is, to say the least Amazing!
A design glitch or portents of an Oil price tank?
We'll know soon enough.
...meanwhile, our BPoG rolls with the punches @ B353.66

Belgian@OvS#1284941/25/05; 14:15:12

The smart insights, expressed in your fine little post, impressed me ! Yep, I think that I know what you mean and agree with it to a great extend. But not everything can be said on a public forum.

Again, when the dollar exchange rate gained some strength (+ 0,7%)...the POO rushed up (+ 1,6%) ! A rising dollar + rising oilprice. Can't be the weather, again... or the so called strong US (debt loaded) consumer confidence or... the Q4 (known) chinese extraordinary growth of 9,5%...
No, I suspect that the oilprice is rising faster than the dollar exch. rate, as to constantly remind the dollar that it is intrinsically worthless, whatever its exchange rate might say. Once the POO gets a lead, the dollar declines again.

Is oil trying to mobilize (more) US Treasury gold !? Remember that POG can only stay low (capped) if goldmetal moves. Once the metal stays where it is,... Kaboom !

Pro Western Ukraine meets Putin's Gazzprom ! Gas pipelines to EU.

The declining goldmine output (dwarf) has no price-effect on the total amount of aboveground gold (giant) !!! Those who want you to continue believing that this offer/demand thing is affecting goldprices, wish you to stay mentally in the old dollar goldmarket regime ! 2,500 tonnes (10 tonnes/day) of newly mined gold have very little effect on 80,000 tonnes of bullion that can change hand under the despotic $-papergold containment regime. The fiat printing presses always win against "paper"gold. But again and again, the financial media present this same old story (mantra) to the general Western public. Ask yourself WHY the goldmines never formed an independant cartel !?

Oil will take (is taking) care of gold !!!!!

AristotleAn observation for all#1284951/25/05; 15:46:33

Belgian astutely points out the following:

-------"I do look how the goldmine-industry is evolving ! It gives me an idea about how much dollar-gold is or isn't bending. Watch how South African goldmines are begging for a lower rand. A rand that is associated with huge remaining underground goldreserves. A rand that is trapped into its dollar relationship and the dollar-gold as well. Who or what exactly is plundering the underground gold !?"------

Read this like I did -- at least five times through, getting clearer and clearer each time.

If you don't exactly comprehend what's being indicated, then reset your perspective and consider these questions: "Why are the goldmines begging for a lower rand? Wouldn't it seem much more natural for them to simply beg for higher gold prices?"

If you'll now reread several times again Belgian's comments, you will see the light. You will be left to consider how much the goldminers are generally under control of their sophisticated Anglo-American bullion-banking financiers and advisors. Otherwise, why *WHY* wouldn't they be asking for higher ($)gold prices? But instead they ask for a lower rand???!!!!!!

*Click!* There's the light!

Gold. Get you some. --- Aristotle

AristotleLet's talk about Gold's price-dip today#1284961/25/05; 16:23:28

Does anyone *anyone* remember listening in to my talks with YGM and others a couple weeks back about the SreetTRACKS ETF providing the bullion banking financial brotherhood with a handy tool to *appear* Gold-friendly but at the same time to actually overindulge the friendliness and control/crush the Goldmarket's newest spot barometer?

I hope you remember because that'll make it a lot easier for me to make this point without getting overly windy. Too late? OK, here it is:

Having explained what I've already explained, it shouldn't surprise anyone to learn on this dippity-do-dah day of all days that the ETF was flooded with new baskets of shares on Monday corresponding to 6.21 tonnes of newly allocated Gold, and today it got another overdose of shares corresponding to 3.11 allocated tonnes.

Counterintuitive? Coincidence? Wake up sleepy heads.

Remember, it's only counterintuitive if you forget that the allocated Gold (all LGD bars) can be opportunistically borrowed into the ETF from unallocated accounts rather than coming from an actual physical market for the stuff where it might actually pressure the demand side of the price.

Don't worry, the end's in sight. Remember, the leading European central banks have put their foot down on making any more deposits (leases) to unallocated accounts. It's a political/economic tug-o-war, my many merry lads, so be sure to get yourself on the side were Gold is allowed to do the heavy pulling.

Gold. Get you some. --- Aristotle

CoBra(too)European In-Stability Pact ...#1284971/25/05; 16:48:00

or Keynes is back in the EU.

Europe seems to be on the same road as the US. The ECB
is just a toothless tiger. When Germany and France get
away in violating the 3% deficit clause to GNP for years,
why should any other member state to the Monetary
Union care from here on?

And what's more Chancellor Schroeder and Colleagues
have already taken the cue from the US, it the BLS, the
Treasury or the FED. New hedonic criteria will be im-
plemented to measure the growth of GNP, hence also
the growth of debt, which may by minimal stretch of
imanigantion double or even triple without so much as
a light slapping of the hand by the EU Commission, nor
the ECB.

In principle the US deficit of 3.6% still seems smaller as a
Percentage of GDP as the budget deficits of Germany, Italy
and France.
In essence, can you believe any statistic coming from any
Government controlled entity?

The main difference between the US and the EU seem to
lie in the overal indebtness of the US on every level and
in particular in the horrendous trade deficit, which well may
reach 7% of GDP. This is a main structural fault in the US

The EU still has a positive trade balance and some savings.
These may well be consumed by a social welfare system,
which is both demographically and structurally suicidal
for the economies* of the EU.

Historically, whenever Europe embraced John Maynard K.,
as they do now, they have always forgot to follow the text
to the end: Deficit spending in lean times may be OK, if you
balance it in good times.

So I guess, I just wanted to chip in to state that the great new
€ is just another fiat confetti.
And yes, it has a plus or two; It's new (less time to debase),
it's not the globe's reserve currency, though some feel it may;
And it's not backed by real money – GOLD ! Gold is just a
Mere 15% of its reserves – should I say in lack of any real
Alternative? ... Pheraps- that may be true, though in the end
and final calculation it is insurance.

In the long run this insurance may prove inadequate to uphold
the status of the West's prosperity, as it again will be challenged
massively by the ongoing competition for equal opportunity of
living standards. The S-E Asians, including the Indians have
already made inroads to challenge the West in their complacency.
the same can be seen in the evolving former East Block countries
of the EU.

The, not only economic sclerosis of the old West is becoming
apparent. And there's always someone out there, who feels he
can do it better. Thanks to the Austrian economic school, some
may understand where we stand.

... And in this sense Gold is a great tool of insuring survival,
structural and fundamental reforms would even be better.

.... As even a gold coin has two sides – it would be wise to
look at the other side of the equation.

‘Nough said cb2

PS: Just read Ari's latest -

Had a similar discussion today. Yeah, for now it's the Dollah, tomorrow its the € or any such decrepit fiat. In the final analysis, though its going to be where real positive productivity will be established. The history of Kontradieff's findings has proven that capitalis'm is the only way the world works long term - and we all know where that will take place.

Gold is a great place to be; In an environment of losers it's even better, we'll lose less.

What a myopic view in the full spectre of a dynamic world, taking the Bretton Woods I and II agreements in stride and with it the IMF and its rules. As the US can't ever pay back their obligations why should anyone else care?

OK, Gold may rule the world again - and I personally hope in some form of executing some equilibrium to the radically insane money machines of the western hemisphere. I fear, it won't happen that way as the machinations of total delusion have destroyed any semblance of coherence by now.

... Oh well, ramblings of a blind looney bin squatter within the company of cyclops.

CoBra(too)GLD - ETF#1284981/25/05; 17:02:08

Here, Ari, I'm with you.

Just to tackle your historical wisdom - It wasn't all that far back when SA produced about 50% plus of the globe's gold. 1.200 tpy was typical until the late 70's.

The US produced 30tpy at that stage. New exploration, technology and the PRICE had now upped the US and in particular Nevada to become second largest gold producer.

... Oh, well it's getting too late for me to go into further details as I know that I'll be blown out of existence as a true gold advocate, and maybe not even a G-bug anyway ... Ari-viderci ... cb2

AristotleCoBra(too) -- let's revisit:#1284991/25/05; 17:58:12

----"So I guess, I just wanted to chip in to state that the great new
€ is just another fiat confetti.
And yes, it has a plus or two; It's new (less time to debase),
it's not the globe's reserve currency, though some feel it may;
And it's not backed by real money – GOLD ! Gold is just a
Mere 15% of its reserves"-------

How about we try this on for size instead?!

It's not *just* another confetti. The new € is ANOTHER(Thoughts!) fiat confetti! Big difference!!

OK, so how do we *see* the difference? Your remarks above knock on the door, but they don't peek inside and look far enough, so let's do that.

It isn't the percent of reserves. ("Backing" is such an ugly, inappropriate word.) The U.S. has something ballpark like half of its official international reserves as Gold, and the ECB has the 15 you stated while the eurosystem's as a whole has a Gold percentage approaching nearly half, too.

Tonnage? The U.S. has a shade over 8,000 tonnes, the eurosystem a shade over 12,000 tonnes.

The vital *VITAL* difference is seen when you look at HOW those tonnes are held.

In the U.S. the 8,000 tonnes are held by the Department of Treasury, and "title" of sorts is conveyed to the asset accounts of the Federal Reserve System through which it is "monetized" at a rate of $42.22 per ounce. Period.

Things are little less bogus over at the eurosystem, meaning that the price is less fictional. The 12,000 tonnes are recognized by the going market value (such as it is; cf. the Anglo-Am's combined LBMA, COMEX and ETF hooliganism upon poor spot) and re-evaluated quarterly.

The issue comes down to seeing the difference that FreeGold can make once the AA system of control is discredited and Gold price levels seek their appropriate physical market level.

With Gold under the dollar-derivative-banking shackles it is impossible to transact trillion$ into physical Gold because it would rupture the system.

However, with Gold freed of all that and trading under the euro paradigm, it WOULD be possible to transact any number of trillions(€) into physical Gold because the Gold price would freely adjust based on fundamentals of supply/demand to easily clear the market without succumbing to cascading derivative-related banking system failures.

To review:

It isn't about percentage.

It isn't about tonnage.

It's about... FREEEEEEEEEEEEEDOM!!!!!!!!!! Price freedom, built around unambiguous terms of ownership. No paperGold.

Gold. Get you some. --- Aristotle

NedBelgian#1285001/25/05; 18:16:00

Nice series of posts today.

I must think that oil is the key in all of this. 'Imperial overstretch', 'financial debtbergs' and deficits in the U.S. must be a direct result of the (2) oil challenges facing the country. The theoretical world peaking of oil and the falling domestic oil production/increasing import of oil are causing great financial stress(es). Isn't it odd that the #2 oil country in the world is in sudden need of democratization ! FOREIGN POLICY is such a bizarre affair.

Was thinking back to late '97 and '98 when Another began his talks. Soon after FOA took the lead, unfortunate that he moved on. He and Another were careful not to mention dates, how can one predict a date!

I think 2005 might be a pivotal year for oil, the theory of peak production might be confirmed this year. If not this year, next. As many say, something's gotta give.

I see your earlier post not asking you to pick dates. That's fair. But also in fairness Another and FOA have had us on string for 7-8 years. Although you say forget about an hour and a day, how about a hint of what year. Many of the day to day articles have stated that this year and next will be important.

I feel that the dollar will have a hard time hanging on for more than 2 years. The other quiet thing is the 'rogue world event', are we going to escape this for 2 years?

Thanks for the thoughts. 'Yellow replaces black', this is 'ground zero'.

A bientot.

Black BladeBudget office refutes Bush deficit projections#1285011/25/05; 19:38:56


The long-term outlook for the US budget deficit has deteriorated since the end of last year, according to the non-partisan Congressional Budget Office, which on Tuesday published figures suggesting the administration may struggle to meet its promise to halve the shortfall over George W. Bush's second term. Excluding the costs of the war on terror, the projected 10-year deficit has increased by $500bn to $1,364bn, largely due to the decision to extend the child tax credit.

Black Blade: Actually the deficit is much higher when "off budget" items are added in. We could say the same about the national debt. The "official" debt is about $7 Trillion but the "unofficial" debt leaked by former Treasury Sec. Paul O'Niell is now about $47 Trillion. So far this "shell game" has not caught the attention of currency traders or else the death spiral of the US Dollar would be more evident. Some Gold protection is in order.

Black BladeNew front for Bush: The dollar #1285021/25/05; 20:01:14


WASHINGTON After a first term in which terrorism and war dominated President George W. Bush's foreign policy agenda, his allies in Europe and Asia suspect that his next confrontation with the world could take on a very different cast: a potential monetary crisis, in which a steep plunge in the value of the dollar touches off economic waves around the world. Already, the tensions over the dollar are becoming a recurring source of friction, a conflict that does not reverberate as loudly as the differences over Iraq but may be as deeply felt. At a meeting in Paris on Monday, the finance ministers of Germany and France complained that Europe had unjustly borne the brunt of the dollar's downward slide, and called for coordinated action to stop it.

Two months ago, similar sentiments came from Wen Jiabao, China's prime minister. Beijing is at the center of a struggle with Washington over currency policy. Wen complained about the fall of the dollar, asking, "Shouldn't the relevant authorities be doing something about this?"
A decline in the dollar might also force up interest rates at home to keep foreigners interested in financing America's need to borrow more than $600 billion a year to cover its gap in the current account. The current account is the broadest measure of the trade and financial flows into and out of the country. Administration officials, along with a number of like-minded economists, contend that the record U.S. trade and current-account deficits are not particularly worrisome, a reflection more of strong foreign interest in investing in the American economy than any sign of global weakness.

Many European politicians and exporters cannot shake the suspicion that the Bush administration, despite its statements supporting a strong currency, has been perfectly happy to watch from the sidelines while the dollar heads down. At a moment of surging American trade deficits that have reached a record share of economic output, a falling dollar makes American exports more competitive and puts imports from Europe at a particular disadvantage.

Black Blade: Interesting article. The US Dollar is toast regardless of all the lip service and jawboning. The "strong dollar policy" is dead with a stake driven through the heart. To stimulate US exports there is no choice but to join the "currency war" and drive the dollar down. As a result, hard assets will hold value – hard assets like Gold and Silver.

AristotleNed -- a request to pick a year?#1285031/25/05; 22:21:16

When the London Gold Pool crapped out in March of 1968, could you, Belgian, or anyone else have ever imagined that the system could've held together 'til Nixon threw in the ol' towel in 1971-'73 and then the IMF making it all formal and official-like not until 1978?

What say we not make too light of Belgian's contributions by asking him to do the impossible. Suffice to say we're the better part of a decade into the thick of it, and for the past several years we've had better than 10% per annum gains that you'd think would be good enough to tide over the skeptical and myopic among us, no?

Gold. Get you some. --- Aristotle

Noble1Allocated vs. Unallocated-- Vive le Difference#1285041/25/05; 22:59:54

As per the LBMA Glossary of Terms:

Unallocated Account--An account where specific bars are not set aside and the customer has a general entitlement to the metal. This is the most convenient, cheapest and most commonly used method of holding metal. The holder is an unsecured creditor.

Allocated Accounts--These accounts are opened when a customer requires the metal to be physically segregated and needs a detailed list of weights and assays.

As you can see, when one holds title to ALLOCATED gold, it is possibly the next best thing to PGiP. I would bet that many PGA giants store their gold this way.

So, even if the physical gold originated from an unallocated source, once it is deposited into an allocated account it represents physical gold that is individually owned, identifiable and no longer encumbered or otherwise available to leasing mechanisms. Physical gold is just that, physical gold, regardless of its origin. If all PG must be leased out in order to bring it into the physical/allocated marketplace then so be it. I wish it were so. It would bring to light the fact that only the physical/allocated holders have the bird in hand and the market would adjust accordingly.

The GLD-ETF is a complicated NYSE investment vehicle designed to track the PoG. Virtually all of its gold is allocated, but ownership of its shares in no way entitles you to the metal unless you are an "authorized participant". Only then can you redeem baskets of 100K shares for physical. Still, as more and more physical gold is deposited and allocated within the ETF, and the vulnerabilities of other unallocated accounts become exposed to investors, the better for PGAs and the cause of Freegold. Perhaps GLD will serve as a vacuum to suck up all the remaining unallocated gold stocks until that supply dries up and the creditors find themselves holding mostly paper (wishful facetious chatter). Consider that many of the fiat dollars finding their way into GLD may have been unable or unwilling to opt for PGiP, then maybe the next best place for them is to contribute to the purchase of allocated gold.

As Aristotle says "the end's in sight" (to leasing). But for now they still seem to have plenty of ammo as they have provided enough supply to drive the lease rates down by nearly 40% since the launch of GLD. But over the last few days, 1-3 month rates have started to head back up and even look to be in a slight backwardation-possibly indicating a tightening of physical supplies (caused by allocation to GLD?). If the market absorbs (allocates) all that they throw at us and continues to demand more, then we will break their backs rather than the other way around. I still think that the spot market leads the price of GLD shares and not the other way around. The hedge fund/authorized participant arbitragers take care of any imbalances between the share and spot prices.

PGiP provides the ultimate form of gold ownership unless circumstances preclude it. An allocated account with a reputable custodian may be the next best thing (for Giants investing in multiple 400 oz. LGD bars). I think GLD is a distant third only for those unable or unwilling to participate in #1 or #2.

AristotleNoble1, I gotta know, so I gotta ask#1285051/25/05; 23:45:59

Is there a reason you're ever so ready and willing to *soft-pedal* the real message here on the ETF which boils down to the issue of price-discovery and the buying of time?

I'll hand it to you that, whatever your motive, you're honest enough to rank the ETF no higher than third in your list of options. But why aren't you as forthright to confirm my main points regarding the issue of price discovery: 1) that the mechanism of physical Gold allocations to the ETF can come at the pleasure and convenience of the bullion banks and don't necessarily apply any direct pressure to physical market price discovery (thus buying the BB brotherhood time,) and 2) that the ETF as a leading indicator be used to weigh upon the price of Gold.

Alright, so I see from your comments that you don't buy into the second point at all. Have a look at the chart. It looks like they've currently got a zero'ed data bust on the XAU which is blowing out the scale on the three-month chart and making it unreadable, but when it comes back into alignment your eyes'll be opened as to which is leading which. You can at least start to get an idea from the 5day chart shown here. Credit goes to Miner49-man for initiating the circulation of this one out on the golf course.

Gold. Get you some. --- Aristotle

BelgianETF - GLD#1285061/26/05; 03:14:44

GOLD MUST BE IN POSSESSION !!!! Once you deposit <*your*> gold in other hands...the "Goldsmith" concept lives further and gold remains paperized ad infinitum.

This is so for the small coin/kilo holders and the 400 ounce holders, as well !

It is because there is no FREEGOLD pricing market that many don't wish to hold metal in possession and *hope* that the paper-gold-variety wiil do the job of wealth consolidation, that we all still expect from gold.

GLD is a gold-contract mover as to manage the POG ! Period.

The *price* of your stock - bond - house - oil - etc, has been rising substantially over the past decades. The POG $420) today is at a 25 years average !!! How can one possibly say that we had/have priced gold !?

The price rises of stock-bond-house-oil-etc, are in fact nothing else but the permanent devaluation of the fiat numeraires. ONLY gold has been price-contained as to not reflect the confetti phenomenon...ONLY GOLD !!! This simply evidences how extremely <* IMPORTANT *> gold is and will always remain.

Important, because it is gold, and only gold, that "should" say what your wealth really is. Today, with 25 years of flat goldprices, gold is NOT saying what your wealth is !
Neither is the price of your house. If you sell your house, you have to buy another one that also increased in price. Your (house) wealth stayed exactly the same.
Price-inflation is making you less wealthy and unfree gold(prices) must prevent you from realising this.

We have been listing an increasing amount of arguments, why this "system" has become unsustainable. Having to push forward an ever growing debt-berg in order to keep on rolling economically, has its limits. So has unfree gold !

Note that nowhere else than here, the word "freegold" is being said !!! Nobody dares to mention-elaborate on gold's "function"...publicly !!!

Goldbugs naively "hope" that ETF/GLD will take some metal out of the stash as to rise the POG a bit ($500-$600) and
make their papergold bets whole. It isn't happening, dear forumers. Think again "WHY" it isn't happening ! Don't let your thinking be dominated by the misleading offer/demand mantras. Market-economy is NOT what you think it is (or should be).

The goldpricing containment has made lame ducks of us all.
Incapacitated to see the threes through the wood, anymore.
Let's wake up all together and undo the collective hallucination that has purposely been thrown over us. Let's face the real ugly truth and demand real freegold. Let us act accordingly and take goldmetal-wealth into "POSSESSION". An honest and honorable expression of protest against mismanagement.

This morning, I see US$ slightly weakening, POG/POO consolidating. Apparently a follow through of last night's POO action on the dollar's exchange rate.

Kuweit is firing a salvo of oil-output-statements.

A lot of further yadayada about the yuan, possible rising its exchange rate by 5% !? What exactly is this going to change, fundamentally ? How can one speak about a market-economy (freemarket), when constant massive intervention and coercion are on the order of the day !?

NedAri#1285071/26/05; 03:40:26

I'm not making light of anything, I'm the guy that reminds the board on a weekly basis that "yellow gold replaces black gold", penned by our quasi-famous Belgian, yes?

I'm sure that Belgian will simply answer the question or he won't. I know I'm asking a difficult question. I said in my post that I think (maybe hope) that we get some answers on the 'peak oil' in this year or next.

Belgian is a big boy, I don't think we'll find him hanging out of an oak tree over my question. He's been battered and bruised a dozen or more times and he keeps on ticking. He follows gold, therefore, by default, he's a big, strong, handsome devil and can handle the odd forward question from a yahoo like myself. The gold market is a very tough one to get a handle on, Sinclair said that its this year or we have a pause for at least 2 or 3. Is he allowed to 'think out loud'?

Just chatting Ari....sheeshhh!

AristotleNed#1285081/26/05; 04:14:55

I was just thinkin' that a speaker can indeed choose his audience, and if things like "year picking" define the cut of our jib, how long before he realizes he's hangin' out with the wrong bunch of bananas?

Wouldn't it be better to put our best thinking caps on and try to keep him fueled and energized to raise the bar a little?

The old saying when someone's trying to learn something new is "There's no such thing as a bad/dumb question."

I'll agree, but woof, that "pick a year" timing thing probably comes pretty close!

Gold. Get you some. --- Ari

Humble PieBelgian #128506#1285091/26/05; 05:05:39

Very well said ,Thanks
968Iran oil bourse closer to reality.#1285101/26/05; 06:54:09

The memorandum of understanding on the Iran oil bourse, where according to the Clark report the oil will be invoiced in euros instead of dollars, should be signed by now. Has anybody heard/read something about further steps ?
BelgianLet's peel the gold "timing" banana and slip slide over it, all together...#1285111/26/05; 07:23:26

Ned, first allow me to make one reflection on Sinclair's gold-timing remark : Sinclair and many other respectfull gold-people are terribly struggling, all the time, with the "WHY"-question(s). It is extremely difficult to give "consistent" answers on any WHY-question, even on the simpliest one.

Today, the goldprice is back up and around its 25 yrs average. The only time-event that was significant in the past decade, was the introduction period of the euro. In this pivot-moment, the POG was knocked down and recovered to its original, horizontal, price-zone.

Remember that we were not able to "time" the ATL of $253/Oz, neither the time needed for the recovery ! We were caught like rabbits in the spotlight because of the WAG and the alarmist CB-goldsales-commitments, any many other gold-negatives. Repeat : Nobody had any clue about "timing" then. It was ONLY Another, who was answering the WHY-question and nobody else.

But Another also connected his "timing" on the condition of certain events that had to take place in order to have the outlined future of gold to materialize. We "must" experience price-hyper-inflation !!! Another thought that this would come as soon as the euro was firmly established.

We are NOT experiencing "general" price-hyper-inflation, yet. We have "selective" price-inflation, only. Can we time the final IR bottoms, wich already touched 45 yrs lows ?
Can we time the end of the house-price-bubble ? No Sir, we cannot predict the formation of any critical mass of political will and action, that suddenly decides to let things explode in one way or the other. Yes, we are book-keeping the amount of explosive materials that are piling up. But we cannot guess how much tonnes of TNT must accumulate before the fuse is ignited. We don't have even an idea of how long the fuse actually is. Sinclair : if it is not this year, will take 2 or 3 years !? Waw, what a formidable guess. Quite a difference with stating, argumenting...that w're coming close...closer, to a significant change.

Will a POO=$61, ...CBs=70% euroreserves,...IRs>6%,...€/$>1,60,...Dow=crash,...or any other the right time for goldprice-explosion, freegold !? No Sir, things can remain irrational for much longer than one thinks is possible. You know that very well.

The reason WHY we need a timeframe is purely of psychological nature : We constantly keep on questioning ourselves if we have it right,... putting our wealth in golden nesteggs. Others are fed up with this golden theories and have already concluded that this kind of nestegg will never hadge and is already (remain) rotten. Yes, I daily meet desperate goldprice-gamblers that are at the point of throwing the towel into the not golden ring !

WHY, Ned >>> They are fed up with the "time" (timing) phenomenon. Their adrenaline is ebbing away. They don't understand it (the change) anymore. Many are getting lost.

This to illustrate that your question on "timing" is to a certain extend, an significant one. Today's price of gold is significant in the sense that it "isn't" saying anything...or should I not understood !?

The same reasoning goes for the question : Why don't we experience the price-inflation that under these conditions should manifest itself !? All crystel timing balls have already been screaming about price-inflation. And when it doesn't come, we simply conclude that we still are going through massive price deflation. And we cut this flafla-apple in two with > stagflation.

Ned, who can time the dollar-index piercing the 80 maginot line !? We touched that line in 1991 for the first time. That's 16 years ago ! Who could possibly have timed the ATH of the Dow (2000) !? Or the IR-low since the ATH of 1980 !?
That's a timespan of 25 years for one single linear declining trendline.

I am constantly watching hundreds of these long term charts...and let these images overlap with the evolving fundamentals (facts) and policies. It is right here that I do feel that we are getting close/closer to what has been theoretically projected....PLANNED !!! Does everything always goes according to "timed" "planning", dear Sir !? No it is more exception than rule, that plans and timing do alter along the road.

Gold is already "on the road" (smile Randy) for 5,000 years and a new highway (freeway) is under construction...
Yes, we are heading towards that highway, since the moment that it was evidenced that the euro was/is a succesfull enterprise (1995). But up until now, nobody wishes to associate gold's future with euro and oil. All simply stick to gold, staying on the secondary dollar-road. They all speculate on the day (time) that $-POG gives them compensation for dollar loses ($500-$600).

BTW, look at your screen : euro + gold, up = oil, down !!!
Conclude who's taking over from the dollar ?

My Close/closer, was not a "timing" conclusion but rather an intuitive reflection that whilst we are still on the dollar-gold-road, we are approaching the euro-gold-highway.
I don't know how slow or fast we are is the distance in between that is getting shorter. Once you see the $-€-POG EXPLODE, know that we are on the free highway and will drive VERY, VERY fast ! All the best to you, Ned.

968@ Towncrier#1285121/26/05; 07:47:30

Hello Randy,
I was searching on the website of the Iranian CB to look for their "Free gold holdings" (excusez le mot) :

20 march 2004 : 3,267,066,802,750
20 march 2003 : 3,411,125,512,096
20 march 2002 : 589,120,229,667
20 march 2001 : 1,077,643,169,193
20 march 2000 : 1,018,477,563,228

Do you have any explanation for the difference in goldholdings during the first years of the new millenium, especially in 2002 when the goldholdings decreased more then fivefold ?
Is it because of an other valuation technique or are there other reasons ?
Table 62
Table 62
Table 62
Table 63

White RoseA new simile: Gold is like a shaped charge#1285131/26/05; 07:56:00

What is a shaped charge? It is an explosive device that generates a jet of molten metal (Copper, Berriliym, or even gold if it wasn't so darned expensive) to blast into armor.

Take a cone, layer on a lining of metal, and place your explosives on top of the cone (usually in a cylinder with the same radius as the cone). When the explosive wave hits the metal, it is compressed into a jet that gushes in a direction opposite to the way the cone is pointed.

Of course, with google, you can find all sorts of diagrams for "shaped charge" on the web.

The shape of the cylinder points in one way (i.e. pointing to lower gold price) until there is an explosion pointing in the opposite direction. This explosion is able to blast through the hardest of armor using only a soft metal.

Please understand that I am speaking only of metaphor and similie. I am not suggesting anyone construct any weapon of war. I would like to give everyone here a mental image of the power of gold once events occur to set it free.

BoilermakerThanks for all the recent posts#1285141/26/05; 08:08:07

The near monopoly of the US$ as the world's reserve currency is undergoing a serious challenge as we hear daily from the incredibly intelligent and perceptive posters here at the forum. As I struggle to understand the dynamics of this change here are some of my own simple thoughts that I'd like to offer for debate, rebuttal or concurrence.

The US$ is king in world trade. As world trade expands, it expands the need for US$ to facilitate that trade. This permits the US to create more $ and have them consumed by other nations. Americans are exporting dollars and receiving tangible goods in return. In effect, the US can manufacture additional $ at the same rate as which world trade expands and enjoy nearly all the increase of world output. I reckon this is the cause and the reason that the US has been the world's growth engine. It's good to be king.

The Euro is a competitive reserve currency with a small but growing market share. As the Euro share increases the US$ share decreases. The need for dollars will decline and, at the point where the expansion of the Euro share becomes equal or greater than the growth in world trade and consequently the need for additional reserve currency, the US will be forced to become a net exporter. This will likely be accomplished by a combination of a significant reduction in US living standards (consumption) an economic depression and a gradual increase in production for export. It's bad to lose your kingdom.

The pretender to the World Reserve Throne, the Euro, is flavored with gold, the long time anathema to the US$. The $ has ruled by closeting gold like a crazy aunt in the attic. The Euro has embraced this old relic like a family heirloom and keeps her on display for all to see. As Belgian and others have been so prescient to see, the world's central bank gold is being divvied up like chips at the beginning of a high stakes poker game. When the US is forced to play the Euro game and is forced to recognize free gold it will presumably have an initial stake of 8000 tonnes or perhaps 25% of total CB gold. This suggests to me that the US share of world currency will be something close to that percentage. If, as some fear, the US has consumed much of its golden seed corn, it will be forced even further into penury.

Great Albino BatAn observation, BOILERMAKER...#1285151/26/05; 08:49:12

A detail, but important: there's a lot - I mean an absolutely humongous amount of dollars sloshing around the planet FAR MORE than are necessary for trade.

Reserves held by Central Banks to cover trade payment commitments are far greater than necessary. The C.B.s hold them mostly to try to ward of speculators - like wild dogs - from attacking them under the pretense of "overvaluation" for instance. They also hold them because they FEAR U.S. displeasure.

MOre liquidity is not required for trade purposes; it is coming unwanted and uncalled for, because the US has a huge trade deficit.

Thanks for reading.

geAxiomatic Fiat Theory (Just for fun, you know)#1285161/26/05; 10:25:09

Axiom 1:
The reigning fiat reserve currency is antagonistic to gold. That is because, an increase in gold price makes reserve fiat inflation evident.

Corollary 1:
USD does not like gold.

Corollary 2:
In case EURO becomes The Reserve Currency, it shall not like gold.

Axiom 2:
The contender fiat currency for The Reserve status likes gold. This is seen as a mechanism to topple The Reserve.

Corollary 3:
EURO likes gold, as long its status is The Contender. In case EURO status changes to The Reserve, Axiom 1 applies.

Axiom 3:
If The Contender manages to topple The Reserve, it should try to make the gold price overshoot during the transition. This would lengthen the life of The Reserve, as gold revaluation time is postponed further. In other words, hiding the price inflation becomes possible.

Corollary 4:
If EURO topples USD and becomes The Reserve, it is EURO's best interest to make the gold price run before its Reserve status becomes firmly established. During the transition period, gold price increases shall not be seen as threatening to EURO.

R PowellTurk on TV#1285171/26/05; 10:57:26

The peoples' stocking television channel interviewed gold advocate James Turk this morning. As usual, it was a very short interview, with Mark Hanes asking why investors should consider gold AND, of course, which companies (equities).

Turk answered that stock holdings are companies vulnerable to many more considerations than just the POG. He views stocks, he said, as investments, as opposed to gold which should be included in the "cash" portion of one's portfolio. (I always hated that word, "portfolio" as it sounds too pompous). After all, he said, gold is money (sorry Ari). Fwiw, perhaps Turk would not quibble if we prefer to call gold "a store of wealth" rather than money. As long as they are interchangeable, who cares?

Mark Hanes first mentioned the trade and government spending deficits by asking if the "twin deficits" might make the economy somewhat "hairy" (his word) and Turk answered that they already have. Further, Turk sees interest rates as rising which he said would act adversely upon our "leveraged" economy. He also compared the present gold/ economic situation as similar to january of 1973.

Perhaps nothing too new or earth shattering here but at least gold is being discussed by the stock cheerleaders. This interview took place early this AM before the POG when the POG was only about $1.00 higher. Maybe Turk's presence helped today? Good work, James!! Or, maybe the weaker dollar is once again reflected as a higher POG. Fwiw, the weakening dollar is also supporting the price of coffee which is also traded in Yankee dollars. More dollars are being offered for Brazilian coffee but it takes more dollars now to buy the same amount of Brazilian reals needed to pay for the production of that java. Rands, reals, etc., the POG is not the only tangible price being changed by the strength/weakness of the dollar against ????.

Not on television, but perhaps worthy of note, is Adam Hamilton's opinion that silver may "consolidate" for approximately 3 months after the early Dec. price fall before once again heading higher. Kaplan has also proven himself somewhat correct in calling the past silver price declines by watching the COT positions. So, combining the two, perhaps gives some indications of when to invest and when to hedge (sell), paper investments, of course. I buy physical silver but don't sell it. ;>)
Thoughts ???

968@ ge#12851801/26/05; 11:11:44

According to your axiom an euro reserve system would only be credible if the euro POG is managed *stable* in euroterms in order to make the euro strong in goldterms.

This is just what it is all about ! Under the eurosystem the POG doesn't compete with the (reserve) fiat currency. It lives next to the fiat currency and supports it.
A rising euro POG under a euro reserve system increases the lending capacity of the ECB !
If a rising euro POG would devalue the euro, the euro-system-designers would have NEVER valued their goldreserves to the market.

CoBra(too)@ Rich -Silver#12851901/26/05; 11:18:09

Asked James Turk on silver at the end of a great gold presentation in N.O.

He was more than happy about the Q. as he's even more of a silver bug these days. He also told me that he's investigating "Silver Money" - which he might introduce this year.

One of the real great PM guys - next to Mk - Cheers cb2

Rimhanother USD retreat from 84.1#12852001/26/05; 11:40:28

Seems to be a clear ceiling for the poor ol' buck. Soooooo.... if it can't go up, is it soon to fall down below 80, or will it stay range bound....?

Gandalf, have ya got any more Roo meat for those dogs? They're lookin' kinda hungry for some action now!

Topazalt Gold.#12852101/26/05; 11:52:52

Our alt Gold price "s l o w l y" works it's way northward toward the next drubbing...currently B354.56.
We soon roll over into Feb when Comex "chips" will again be under threat from those pesky "Longs". You'll recall in Dec they snaffoo'd 15K contracts worth of 100oz, smallB "bars" ... so, given the perceived tightness in Big-End Bullion, we could expect some "newsworthy" anti-Gold announcements "real soon" (sales, HIPC reworking etc.)
Problem is "no-one" seems willing to part with the relic anymore ...odd that!

Feb-Mar is shaping up as a "very-interesting" time to be a Bug imo.

MKCobra . . .Dinner with James Turk and Michelle Ashby#12852301/26/05; 12:09:48

Had dinner with James and Michelle Ashby (Denver Gold Group) last Wednesday. Great to see them again and trade gold market opinions and stories - two of the top people in the industry and long-time friends. Outside the industry and the realm of gold advocacy, few understand the level of commitment made by people like Michelle Ashby, James Turk, yourself and many others who have stood tall through thick and thin. Kept the faith when it wasn't easy. This is the group to whom I dedicated "The ABCs".

By this time, we should be proud of the stand we made collectively back in the dark days and now we should revel in the recovery -- average returns as pointed out here by the Sitemaster of 14.4 percent, 17.3 percent, and 12.6 percent respectively over the past three years along with strong appreciation in many of the stocks. And I see this as only the beginning of a multi-year bull market.

The current dollar event will not be played out in weeks or months but years -- out of necessity. I see the currencies as managed in bands and gold will follow. I would not be surprised by the time the year's out I expect to see gold trading in the $500 to $550 range with much higher prices possible under the right set of circumstances. In the event of an accident, gold could bolt substantially higher. When I see reports of central banks shedding dollars as they are, I become concerned about an unravelling -- about that "accident". . . . . . .These are the trends that truly underping this gold market. Here's a favorite quote of mine from the now famous Strauss and Howe's "The Fourth Turning - An American Prophecy" (a book which should be read by anyone with an interest in historical cycles):

"Around the year 2005, this country's mood will change sharply-marking the end of today's era of individualism and civic drift and ushering in an urgent new era of community and civic commitment. Over the next two decades, America will pass through a political and social upheaval on par with the American Revolution, the Civil War, and the New Deal and World War II. It will threaten the nation and pose a major risk of war, yet also offer an opportunity to elevate ourselves to a new level of civilization."

That by the way was written in the year 1997. And we both know it will not be just America that passes through eye of the storm but most of the rest of the world as well. There is little doubt that any of us who have these same concerns should own gold.

I mentioned to James that he and I spend a lot of time preaching to the choir. And his rejoinder with a smile on his face was:

"Yes, and the Choir's getting bigger."

Amen to that.

Anyone who looks around at what's going in the world today and doesn't consider becoming part of "the choir" is looking with eyes that do not see.

Great Albino BatThe Bell Tolls for the USA...#12852401/26/05; 12:26:59

This is a very important article in the Financial Times:

"How the U.S. Became the World's Dispensable Nation"

Read it and weep.


Gandalf the WhiteThanks Sir Rimh ! I am watching and will be ready <;-)#1285251/26/05; 14:21:46

Rimh (01/26/05; 11:40:28MT - msg#: 128520)
another USD retreat from 84.1
Yes, Sir Rimh, the SECOND time was STOPPED at that LEVEL.
I am holding the ROO meat until we see the THIRD and LAST attempt AND then things will be JUMPING !

Gandalf the WhiteThe US$ chart at the below LINK --- <;-)#1285261/26/05; 14:26:03

Will it have ONE MORE TRY at the 84.1 Level ?
IF so, that will be the LAST for a GREAT NUMBER of years !
Get ready for the YELLOW to SHINE !

WaveriderWorld economy seen threatened by U.S. deficits#1285271/26/05; 14:40:03

DAVOS, Switzerland, Jan 26 (Reuters) - Massive U.S. deficits pose a major risk to the world economy, which is enjoying its best peformance in decades, and correcting them will prove tricky, top economists and business leaders said on Wednesday...But the savings deficit in the United States means it must suck in billions of dollars in foreign capital, particularly from Asia, to finance its current account deficit, which is above 5.6 percent of GDP and growing...Relying on a weak U.S. dollar or currency appreciation in Asia to correct the U.S. deficits problem is not enough. Higher U.S. rates will be part of the answer but are risky, participants said...The Federal Reserve must proceed with credit tightening to raise U.S. rates that are "unconscionably low" because they have inflated real estate prices and encouraged U.S. consumers to borrow huge amounts against homes, Morgan Stanley's Roach said. "They have turned their homes into massive ATM machines, sucking out dollars to buy DVD players made in China."
CoBra(too)@ MK#1285281/26/05; 15:06:21

Thanks - Very much appreciated!

BTW - Lets watch one ski Rahlves beating herminator at the Bormio events ;>) ... cb2

PS: Never met Michelle, though James has become more than a good friend; a beacon!

slingshotThe Long and Winding Road#12852901/26/05; 15:56:07

Anticipation may be the undoing of many a stout hearted Goldbug as we travel the Golden Trail. Minutes turn to hours,hours to days and days to years. We see the Trail Signs but they give no distance to our Navana, that being Free Gold. Traversing valley,plain and mountain we look for assurances to comfort us along our journey. They are as fleeting as the scenery we gaze upon. We are as early pioneers with a vision, depending on the Trail Blazers to reach our destination of Free Gold. As pioneers some will be subdued by the hardships, while others will persevere.
The longest journey begins with the first step, we choose when to end it.
Do Not Give Up! We draw nearer to Free Gold Each Day!

Bravo, Belgian. You are are light in the Darkness.

@ White Rose, Shape Charges? Do you Hunt too? ;0)

TownCrier968, Iranian CB gold#12853001/26/05; 16:35:58

Presently pressed on time, my short and fast answer without probing into it further is that the decline shown in 2002 could (might, possibly) have been simply the result of an accounting change in which definitions were solidified -- perhaps they no longer counted out-of-country or other "gold receivables" as among official gold reserve assets.

That is, for that year's accounting purposes gold that was on deposit at the Bank of England may have no longer qualified as official Reserve gold (being deemed merely a "gold receivable") and therefore wasn't counted, thus resulting in a decline in the published numbers for March 2002.

Perhaps this firmer adherence to a more formal definition of gold reserves is what prompted a change. In October of 2002 it was revealed that Iran had repatriated most of its gold bullion from vaults of European central banks, primarily being the Bank of England. Indications at the time were of an amount of gold totalling $2.5 billion.

Thus, repatriations and subsequent related transactions may be the explanation for the dramatic rise you see in the numbers published for March 2003.

Again, I apologize for not digging further into details, but I hope this from just off the top of my head might still prove helpful to you in some way.


USAGOLD Daily Market ReportPage Update!#12853101/26/05; 18:20:17">
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.

Wednesday market excerpts

U.S. gold futures climbed on Wednesday, boosted by a weaker dollar which made the precious metal more attractive for investors, dealers said.

COMEX February gold rose $4.80 to $426.90. April gold settled at $429.10, up from $424.30.

"The market is kind of fixated on the euro/U.S. dollar relationship and we expect the U.S. dollar will continue to weaken," which should keep gold supported, one mining stocks analyst said.

He said he believed gold producers will make efforts to prop up the metal's price this year to help manage escalating mining costs.

He said the theme of reflation within financial markets also should support gold at an average of $450 an ounce in 2005.

[Editor note: With 2001 gold prices averaging $271, and 2002 averaging $310 (up 14.4 percent), and 2003 averaging $363 (up 17.3 percent), and 2004 averaging $404 (up 12.6 percent), this mining analyst's conservative estimate for a 2005 average of $450 represents an additional average gain of 10 percent. Bottom line: prudent gold ownership continues to satisfy an investor's desire for gains, while at the same time serving its role as a safety net against unexpected financial crisis.]

The dollar sagged broadly Wednesday after China reignited market talk of a yuan revaluation, saying it would discuss the pegged currency regime at next week's London meeting of Group of Seven rich nations.

Speculation about a revaluation has been rife during the past year, with European policymakers urging Asian countries whose currencies are controlled to let those units rise to share the burden of the dollar's three-year slide.

The Iraq presidential elections this weekend, followed by U.S. president George W. Bush's State of the Union address and the G7 meeting should keep traders on their toes, analysts said.

-----(see url for 24-hr newswire)----

Noble1Aristotle, I'm Glad You Asked---Re: msg #:128505#12853201/26/05; 20:12:28

Thanks for asking me a direct question and engaging me in your dialogue rather than just scolding me or calling me names. Being a relatively infrequent and rather shy poster it can be discouraging. I have always valued your knowledge and commitments to this forum.

Also, thanks for the link to the GLD/XAU chart. I will look at it when they get it fixed and see if a different set of eyes views it the same as you. I've been hoping someone would post a chart of GLD/something to see what patterns may exist.

I'm not so sure that I understand the metaphor "soft-pedal" but I can work around that.

I am unable to confirm your point #2, that the ETF is a leading indicator used to weigh upon the price of gold, because I think that the price of gold in the spot market leads and determines the price of GLD shares. I just think that the GLD shareprice follows the spot market and not the other way around.

Your point #1 is highly complex and I can't, with any degree of certainty, confirm or refute it. You may well be 100% correct. I promise to study it and respond with an opinion.

I, like most of us in these halls, have always felt that the physical gold market has been the subject of price manipulation (suppression). Most recently (the past decade) by obscure varieties of highly leveraged derivitives. But not all derivitives should be categorically dismissed as damaging to us. James Turk's GoldGrams, an allocated account, GLD, do serve to remove physical gold from the hands of the "bad derivitive" players. No, it is not PGiP but it may be the next best thing.

This market is so complicated that it is difficult to translate into real world laymen terms. Perhaps, someday, we could dedicate a few days to a role playing game where we could each represent a different market player and offer our game plan, do battle, and question the motives and values of others. For example, you Aristotle, by virtue of your understanding of banking shenanigans could be a bullion banker. Perhaps YGM would chime in as a producer. I would like to be J.Q.P. or perhaps the manager of a pension fund. Who would like be the manager of a hedge fund? A Central Banker? Any poster could be whomever(?) they wanted. Maybe we could coordinate it with a price guessing contest so it would start and end within a specified time frame. Anyone game? It could be very thought provoking, educating, and interesting!

Chris PowellGATA queries Treasury Department on gold and silver seizure statute#12853301/26/05; 20:48:02

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Black BladeCentral banks 'shunning dollar' #12853401/26/05; 21:32:45


Is the dollar's global hegemony waning? Many of the world's central banks are starting to look to the euro to fill their currency reserves instead of the dollar, a survey suggests. The poll carried out by Central Banking Publications found 39 nations of the 65 surveyed raising their euro holdings, with 29 cutting back on the US dollar. The dollar's sharp fall in the face of huge deficits could be one cause of the switch, the report says. The survey was sponsored by the UK's Royal Bank of Scotland. The US is running a budget deficit of close to $500bn a year, funded largely by China and Japan buying large amounts of US government bonds.

Black Blade: Out of Davos, Switzerland the Chinese rep said today that China was ready to stop buying US dollars. It has long been rumored that Chinese bankers were buying up Gold in interbank transactions and on the open market - often directly from foreign producers through longterm agreements. As retail outlets expand in China the people there will continue to swarm to display counters and get listed for future Gold purchases as is happening in major cities such as Shanghai and other major distribution outlets. "Interesting Times" indeed.

968China Has Lost Faith in Stability of U.S. Dollar, Top Chinese Economist Says at World Forum #12853501/27/05; 01:00:14

"The U.S. dollar is no longer -- in our opinion is no longer -- (seen) as a stable currency, and is devaluating all the time, and that's putting troubles all the time," Fan said, speaking in English.

"So the real issue is how to change the regime from a U.S. dollar pegging ... to a more manageable ... reference ... say Euros, yen, dollars -- those kind of more diversified systems," he said.

"If you do this, in the beginning you have some kind of initial shock," Fan said. "You have to deal with some devaluation pressures."..
Wow, open Chinese talk : the dollar is in our opinion no longer a stable currency, and is devaluating all the time.

We are reaching the point of no return...

968Canada worried by China buying its resources#12853601/27/05; 01:11:16

"Canada is concerned by the prospect of China buying up its natural resources firms and is reviewing tougher investment safeguards, Industry Minister David Emerson said on Wednesday.
Critics say that Ottawa should take steps to ensure that control over a large chunk of Canada's natural resources does not pass over to a China hungry for foreign commodities."
Chinese quest for energy continues...

968Wall Street advice: Get heavy on metal#12853701/27/05; 01:24:58

Of course the big picture is far from being touched here, but it gives an impression on the investment sentiment.

@ Randy : Thanks for your insights on Iranian CB goldreserves. A very, very, wild tought I had last night. Perhaps some crucial nuclear bomb technology required a physical gold payment ????

ge@ 968 msg#: 128518#1285381/27/05; 10:05:03

Dear Sir;
It is difficult or rather impossible to believe that ECB will not be concerned with a rising Gold price. With the gold rising in Euro terms, people would avoid using paper at the retail level, and coin circulation would replace the paper circulation.

While reading this forum, sometimes I ask myself; "may be, this is the undeclared intention as a gradual transition to the gold standard". But then, what is the motivation? Discarding the paper money also implies giving away lots of political power. Men do not give away political power. May be, someone sitting on a huge stash of gold would have the motivation to do that. Let us wait and see?!

Aristotlege -- I don't think so#1285391/27/05; 11:47:56

RE: -------"With the gold rising in Euro terms, people would avoid using paper at the retail level, and coin circulation would replace the paper circulation."-------

During our and general stock boom of the late 1990's, many stocks were wildly rising in dollar terms and yet, at the retail level, people were not using stock circulation to replace paper(dollar) circulation.

You're getting caught up in a way of thinking that ignores a certain reality.

People don't pound nails with a screwdriver, and they don't drive screws with a saw. They tend to use the right tool for the right job. A basket is a basket, and it's used to carry stuff. Just because a tool might become so big -- like a bulldozer -- that the basket can't hold it, doesn't mean the tool (bulldozer) takes over the basket's job.

Money is what it is because society finds it so necessary for commerce that we invented *invented* it. It's somewhere up there akin with concepts like "rule of law" and "language" and so forth. Money by its use must *must* be an abstraction because it allows us to take long term contracts such as a debt/credit of any *any* assortment of future goods or services and equivocate them to present cash (monetary) payments.

In other words, a home-builder could sell(credit) you his finished home today against your payment with letter of debt in which you promise to pay him with 15 years worth of whatever goods or services you happen to specialize in. But we don't do it that way because all the long while the builder would be worrying about your health and ability to repay, and also he may not need or want 15 years worth of tap-dancing lessons.

The problem of payment is solved when the builder is given an up front monetary payment that represents the equivalent value of the credit value of the home. Banks and the monetary invention effectively act as the credit/debt translators to allow markets to mix and match a whole wide world of apples, oranges, and tap-dancing lessons in the fulfillment of people's wants and needs, including the purchase of big items on credit against a future production stream.

So you see, money not only translates between apples and oranges today on the market, but it's primary *primary* PRIMARY distinction is that it can also be BORROWED INTO EXISTENCE, such as with the tap-dancer buying a house, or a farmer buying a tractor, or anytime any person, company or government seeks a loan from a bank. Common sense reminds you that the money from the loan (an extension of credit) MUST be an abstraction because banks have only the money to give -- they do not have a store of tangible houses or tractors to give.

For its market translation role, and for its ability to be created and used in payment today to represent a present value of credit as against future production, abstract *money* is a convenience that society will not cast aside.

Remember: money, I say again, *MONEY* can be (and constantly is) created=lent+borrowed into existence. And, not to dwell overmuch on it, therein lies the seed of inflation and potentially a whole crop of related abuses. But that's Another story.

It strikes me as a singular truism that Gold cannot be similarly crafted. Only paperGold can. And, not to dwell overmuch on it, therein lies the seed of artificial Gold supply inflation and price suppression and a whole crop of related abuses. But that's Another story, too.

Pure and simply put:

Money (an abstraction of credit/debt) is a tool for common finance and commerce.

Gold (metal) is a tool for saving your surplus productivity during your good seasons for reliable use during an interim hardship or at last during easy retirement.

Gold. Get you some. --- Aristotle

RimhGreat explanation, Ari#1285401/27/05; 12:29:34

Well spoken, once again. There is no escaping the banksters, for their role, and the role of fiat currency, is required for modern commerce. The problem, however, is always the controlling of the bankers greed and the issuing governments spending habits. The speculators also thrive in this arena and between the three of them, usually manage to destroy the currency's credibility over time, often to complete destruction.

The conversion of excess fiat currency to gold and silver for savings/wealth preservation/retirement ought to be an absolute necessity for every individual, rich or poor, through both good times and bad. This lesson has been learned and re-learned by each generation. We are quickly approaching lesson time for our current generation where gold and silver will stand tall.

geAristotle msg#: 128539#1285411/27/05; 13:45:46

I understand your explanation of fiat money brought into existence by lending. From the consumer's point of view, expensive items such as houses and cars may require borrowing. However, most retail transactions are barter like – I give the money, he gives the stuff; the transaction ends. There is no need of a credit contract.

Our disagreement seems to be at predicting the possible behaviour of people in a rising gold environment.

Observing countries that have a high rate of inflation (relative to the United States) shapes my thinking. People there, avoid using local currencies and Dollar becomes the defacto unit of account- the so-called dollarization. In our case, may we call it gold-ization?!

You may be right, I may be wrong; but really, I would not believe it without living in it, and seeing it by myself.

DryWasher@ ge (msg#: 128541) reference Aristotle msg#: 128539#1285421/27/05; 14:52:36

The above link is to a "A Special Gold and Monetary Discussion" between Ari, Oro, and others which I think will help you gain a better understanding of the points Sir Ari made in his Msg# 128539.



Black BladeJanus quarterly profits tumble 98%#1285431/27/05; 16:01:49


Fourth quarter profits plunged 98 per cent at Janus Capital, one of the first US fund managers to face charges as part of Eliot Spitzer's investigation into abuses in the mutual fund industry. Investors have taken billions of dollars out of Janus - still one of the biggest fund companies in the US - since regulators accused the firm of striking deals with certain investors and allowing them to rapidly trade in and out of mutual fund shares.

Black Blade: This "actively managed" fund was extremely top-heavy with "New Economy" stocks. Obviously the funds collapsed. Just a minor Gold position would have salvaged the devastation investors faced as they watched their life savings evaporate and retirements dreams fade away.

Black BladeGold futures pare losses but end lower #1285441/27/05; 16:22:56{FDF29FC6-6B61-4F55-974C-40623C3A4C1B}


"Several events taking place next week are weighing on traders' minds," said John Person, president of National Futures Advisory Service, including the Federal Open Market Committee meeting next week and the Iraqi elections on Sunday. "Investors' demand for gold and the perception of it being a solid value at these levels, to some degree, depends on the outcome of the elections in Iraq," he said. "If the situation gets worse, then the U.S. will be spending more on defense and thus spending deficits will rise," he said, adding that such a situation would be bearish for the dollar. And if the FOMC raises rates again by only a quarter of a percent, it would be "still perceived as being slightly behind the eight ball as far as potential future inflationary pressures," Person said, adding that "inflation could begin to accelerate due to the dollar weakness."

All in all, "geopolitical events happening over the next couple of weeks will ... keep volatility high, potentially generating a certain amount of 'safe-haven' positioning," said James Moore, an analyst at in London. For now, gold will likely see short-term support at between $409 and $420 as well as resistance around $430 to $438, he said. In the longer term, Moore said he remains "bullish" on the metal "as rising fuel costs, dollar weakness and strong investment demand all improve market fundamentals."

John Reade, an analyst at UBS, agreed. "We see the dollar weaker again this year, but the move may have to wait until after the G-7 meeting in early February," he said in a note to clients.

The dollar is headed higher, but it's ignoring the "structural hemorrhaging of money by U.S. economy," said Ned Schmidt, editor of the Value View Gold Report. And the greenback will "remain in a bear market until imported goods simply become too expensive for U.S. consumers to buy," he said. "With a structural trade deficit as a background, investors should use every opportunity to buy gold and silver whenever the dollar rallies and gold/silver prices weaken," he said.

Black Blade: Longs and shorts are fairly balanced and given the US dollar decline, higher energy with an OPEC meeting this weekend in Vienna and the long list of geopolitical land mines, we could see some real fireworks in the next few weeks if not days. Still the advice to get "insured" with gold is still valid. Check out the Castle Treasury here at USAGOLD.

GoldendomeGe's spending dilema.#1285451/27/05; 17:31:42

Sir Ge: In situation of a two-currency country, where the official currency is sinking when compared to the more stable-but un-official- currency, also present-- it makes sense to ask for the more stable currency (if possible) when on the currency receiving end.

Or, if you are paid in say, Argentine pesos, a couple of years ago, and had the opportunity to exchange them for dollars later in lew of spending them; then again, you would probably exchange them for dollars if given the opportunity to better preserve your future purchasing power.

[But we fully understand in either case above that even conversion to dollars is only the lesser of evils, as we are speaking of fiat currencies for quick use in coming transactions. We are not here speaking of the store of wealth concept that is Gold.]

The spending of coins that you mention, if those are gold coins- and we're not clear that they are or aren't, but if they are: Then my friend, you would be turning Gresham's law upside down! For the Euro paper is not convertible to gold as we understand, and is not even fully backed by gold. So it's difficult to imagine spending dear and saving paper. I hope that I didn't completely misunderstand your statement and wander too far afield here.

Good question: If in the U.S. we experience steep rapid depreciation of the dollar, what might be the shadow currency that would be accepted or circulate?

USAGOLD Daily Market ReportPage Update!#1285461/27/05; 17:43:08">
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.

Thursday market excerpts

U.S. gold futures ended a tad lower Thursday in rollover-oriented trade due to a firmer dollar, although uncertainty before before the Iraq elections Sunday, next week's State of the Union address by President George W. Bush and the Group of Seven rich nations meeting were likely to help prop up the safe-haven asset for now, traders said.

COMEX February gold slid 60 cents to $426.30, after trading between $428.10 and $424.

April gold slipped 70 cents to end at $428.40.

New York traders stayed busy transferring positions in the benchmark February gold futures contract into next active April before first notice day for delivery on Monday.

"Open interest on the exchange is almost balanced between longs and shorts and the question is, Who is going to get squeezed out in the next move? That is more or less going to come from the dollar," a New York metals analyst said.

Final estimated COMEX volume was 78,000 lots, with 17,867 switches, against Wednesday's official tally of 146,501 lots. Total open interest fell 10,909 to 262,521 lots Jan. 26.

A new U.S. gold exchange-traded fund, iShares COMEX Gold Trust, will launch on the American Stock Exchange on Friday under the stock symbol IAU, the exchange and Barclays Global Investors said Thursday.

The ETF's net asset value will be set daily, based on the COMEX settlement price for spot-month gold futures, less the trust's expenses and liabilities.

"The news is interesting, but they also only put 15,000 ounces into the depository, and that is really minor compared to the other ETF," said a gold analyst. He was referring to streetTRACKS, which had gold holdings of 4.9 million ounces as of Jan. 26.

-----(see url for 24-hr international economic newswire)----


How to Beat Inflation-- Forbes

Gold's bull-run to roar on during 2005-- Martin Creamer's Engineering News

US dollar mixed as markets eye G7-- Channel NewsAsia

Yuan revaluation a double-edged sword for US dollar-- The Star Online

Dollar weakness is internationally relative-- Midland Reporter Telegram

Sinking dollar dominates debate at World Economic Forum-- The Indian Express

If China Shuns Dollar, Look Out U.S. Bonds-- Bloomberg

HM Treasury freezes more alleged terror assets-- Complinet

TownCrierDollar 101#1285471/27/05; 18:07:27

If you laid all of the economists in the world end to end, they'd still point in every direction.

The current situation with regard to the weakening dollar is no different. However, the range of opinions is perhaps outstanding even for my chosen profession. On the one hand are those who spout forth gloom and doom over a coming crisis that will shake the foundations of the U.S. economy, tank the stock market, and cause interest rates to soar. Others describe the same situation as one that will benefit the U.S. economy by making our exports more affordable and moving the dollar closer to a value compared to other currencies that is sustainable in the long term. The majority of us, myself included, fall somewhere in the middle. First, a few facts....

...Another, perhaps more ominous, aspect of currency markets is that they are not totally driven by economics. There is some buying of dollars that is politically motivated. For example, China now holds hundreds of billions of dollars and dollar-denominated securities...

...If it were just economic forces at work, I would be firmly in the camp of those economists who view the current situation as a positive development for the U.S. The political games that could be played, however, present something of a concern, but nothing to lose sleep over at this point.

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

By the nature of certain policy elements, some political moves defy prediction, and the consequences of being caught unprepared can be dire. Therefore, I fail to see how the professor in this article can so casually suggest a restful night without first suggesting a course of preparation.

Choose gold. And then you can rest easy.


TownCrierHEADLINE: If China Shuns Dollar, Look Out U.S. Bonds#1285481/27/05; 18:30:50

Jan. 28 (Bloomberg) -- Malaysia isn't a place traders look for clues about the U.S. dollar, yet Asia's No. 10 economy may be offering some ominous ones.

They can be found in a recent report on international reserve holdings at Bank Negara Malaysia, the nation's central bank. It states that Malaysia made a $2.1 billion ``revaluation gain'' in 2004, ``arising mainly from the depreciation of the U.S. dollar against the major currencies.''

Central banks are always reticent to detail their holdings, but one can't help but wonder if Malaysia is buying an increasingly amount of euros -- or even yen -- these days. Its central bank sure didn't make that kind of cash holding the dollar, the currency to which its own, the ringgit, is pegged.

The plot thickens when you consider how such a shift away from the dollar would jibe not only with comments from top Malaysian officials, but trends throughout Asia.

Here in Malaysia, for example, Prime Minister Abdullah Ahmad Badawi recently said he is seeking ways to reduce the economy's reliance on the dollar for trade. Indonesia has mentioned it is considering trimming its holdings of U.S. Treasuries. The same goes for Thailand, according to the Financial Times.

China also has been in the news as traders speculate that Asia's No. 2 economy may pull the plug on dollar-denominated debt. Such a move by the second-biggest holder of U.S. Treasuries after Japan could send shockwaves through global markets.

Hence all the fuss over comments by Chinese economist Fan Gang. ... ``The U.S. dollar is no longer, in our opinion is no longer, (seen) as a stable currency and is devaluating all the time, and that's putting troubles all the time,'' Fan said at the World Economic Forum in Davos, Switzerland.

It means now is as good a time as any for this region to avoid losses ahead of any surge in U.S. debt yields. After all, in real estate, it is all about location, location, location. With markets, it's timing, timing, timing, and waiting means Asian central banks may lose even more.

Central banks here don't buy U.S. debt out of altruism...

If Asians pull the plug, U.S. rates could skyrocket.

Do yields at 4.19 percent for U.S. 10-year debt really compensate investors for the risks they face?

...the day of financial reckoning that investors fear may be getting closer.

If China tomorrow announced it was letting the yuan float, ... Massive dollar selling could follow.

Asian central banks like China's have become America's bankers, financing its excesses through good times and bad. It's now up to Asia to decide whether to extend the U.S.'s line of credit. The U.S. should be warned that the odds are moving less and less in its favor.

^-------(see url for full article)------^

Better than the average analysis. See the comments offered at the end of the previous news post regarding preparations to be made ahead of political moves. It it's all about "Timing, timing, timing", then to be sure, it's really all about seeing what needs to be done and actually getting it done. "Git 'R done!"

Choose gold. Call USAGOLD-Centennial and put in your order tomorrow.


TownCrierGold TV alert#1285491/27/05; 19:05:25

A classic gold-centric movie, "Kelly's Heros" is currently mid-show on TCM (Turner Classic Movies). Starring Clint Eastwood, Telly Savalas, Donald Sutherland, Don Rickles, Carroll O'Connor, Gavin MacLeod. Unfortunately, if you tune in now you've already missed the classic scenes where the first gold bar is flashed around in front of various people's faces to convince them to get on board for the mission. A powerful orator, gold is. Fun times.


GoldendomeGold, unlike paper money, is nobody's fool #1285501/27/05; 20:10:17

By: Bill Bonner --Editor-- The Daily Reckoning

"Gold – the money with no one's picture on it – rose again on Wednesday, to $427. It's the money that no central bank promotes ... and none destroys. It's the money that exists only in its tangible form – a real metal; you can find it on the Periodic Table. It's a real thing ... real money.

As money, gold may not be perfect. But we do not argue that it should be worshipped, only that it should be bought. As money, nothing is better.

What really drives the world improvers is not charity, but vanity. Paper money was a creation of the world-improvers, of course. The reason they prefer it to gold is exactly the reason that gold is better money; paper is ready to do their bidding ... gold is not.

The world improvers are not interested in private acts of kindness or innovation that might actually make their world better. They propose a ban on world hunger – without planting a single turnip. They take up the cause of "freedom" in other countries – and force the liquor store next door to close on Sunday. They insist so strongly on better treatment for women in the Islamic world, they forget to kiss their wives.

But the people in charge of Bush foreign policy are vain world improvers. And the world improvers don't feel that they've done a good day's work unless they've killed someone. All the greatest world improvers have been mass murderers. Alexander, Caesar, Tamerlane, Genghis Khan, Hitler, Stalin, Mao ... Even the peaceable improvers, such as Mahatma Gandhi, so upset the order of things ... that millions died in the mess they left behind.

Paper money is a handy tool for the world improvers. They use it like politicians use civil service jobs and generals use heavy bombers – to get their way. Whatever the vapid ideal du jour, it can usually be bought at some price. The poor can be fed and housed. The middle classes can be given free medical care and low-cost house loans. The upper classes can be given contracts and favours. Enemies can be summoned up ... bombed ... and reconstructed. All this costs money – more money than they have on hand.

How to get more money for these great new programmes ... these marvellously worthwhile ideals ... these fabulous public spectacles? Gold flatly refuses to cooperate. It doesn't even give a reason. Instead, it stays mute and reticent.

Paper money, on the other hand, barely needs encouragement. Start up the presses! Lower the Fed Funds rate! Relax reserve requirements and lending standards! Sell more bonds! Create more paper! Paper money is ready to go along with anything. It is like George W Bush himself. It seems never to have met a boondoggle it didn't like ... and never could tell a phony ideal from a real one."

AristotleG'dome -- Rating Bill Bonner#1285511/27/05; 20:54:12

It's always disheartening to see someone riding tricks in the public eye like this who ought to know better but is still wearing economic/financial training wheels.

If Bill would put down his pen long enough to think about it, he'd sooner or later figure out that the "Gold is money" doorway he's standing in is on the threshold of paperGold. And the problem is -- How is the market supposed to figure out a rational price/value for something ambigous like that?????

Call it an open door to manipulation.

It's a shame, really. His comments about Gold would've had some weight if he'd left out the monetary attachment.

Why is that so hard for people to get??!

Gold. Get you some. It's easy. --- Ari

Black BladeFed to consider inflation target#1285521/27/05; 22:42:44


NEW YORK (Reuters) - Federal Reserve policy makers next week will discuss whether to set a numerical objective for inflation and, if so, what it should be, the Wall Street Journal reported Thursday.

Black Blade: As inflation is grossly understated by US government agencies, such an "inflation target" is an utterly meaningless exercise in futility and a complete waste of time and effort.

GoldendomeFiat picks winners --- And Kills!#1285531/27/05; 22:43:30

Sir Ari: And here I was, concerned that Bill (or I, for the posting) would be diatribed for (perhaps) in some respects, throwing tomatoes at their favorite re-elect.

Respecting your reservations Ari, Bill did point out the racetrack nature of fiat currency, where purchasing power can be created at will with little or no restraint (at this time in the U.S. anyway.) And a bet placed on any horse desired by government, usually to the longer term detriment of the economy. ---Thanks for reading. --G-dome.

968Commodity Strategists: Gold May Rise, JPMorgan Says #1285541/28/05; 00:51:04

"Gold prices will rise to an average of $450 next year and drop to $448 in 2007, Bergtheil and Mohinta said."
Well here we have JPMorgan's head of global metals strategy and former head of mining equities at HSBC Holdings Plc. predicting goldprices for 2007 !!!!!!!!!!!!!
After very, very deep research Bergtheil explanation is :
- "The downturn in mine supply will underpin the effect of the dollar"
- "It's like a slow tanker driving prices, whereas the dollar is the day-to-day speedboat"
- "A lower dollar spurs investors to seek alternatives to U.S. securities"

Isn't it a pity we don't have this kind of insights at this great forum ?
"It's like a slow tanker driving prices."
What are statements like "the market is too illiquid for China to buy gold" or Bubas Axel Weber "gold is the wealth of the German peolple" then ? A Newport News nuclear powered aircraft carrier ?

968Interview with Mr José Manuel González-Páramo, Member of the Executive Board of the European Central Bank#1285551/28/05; 01:04:20

English translation of an interview published in the edition of El Mercurio, dated 27 January 2005


Q : Just how worrying is the strengthening of the euro against the dollar?

A : As regards exchange rates, I confirm the position adopted by the ECB's Governing Council when the euro rose sharply, that such exchange rate fluctuations are unwelcome since they do not favour economic growth.

Q : Do you think we will ever see the euro replace the dollar as the most significant currency?

A : The internationalisation of any currency depends on the preferences of economic actors. As such, it is clear that stable currencies and currencies that inspire confidence are more likely to gain ground on the global markets.
In any case, the Eurosystem maintains a neutral stance with regard to the internationalisation of the euro, although, of course, the fact that our monetary policy is geared towards price stability indirectly helps to support this role. Within six years, the euro has become the second most used currency in the world. This can be seen, of course, as further testament to the success of monetary union.

Belgian@ Ari#1285561/28/05; 01:45:48

Your (rhetoric) question : Why is that so hard for people to should be left out of the *monetary attachments* ?

This question "IS" the hart of the whole matter, and for this particular is much better that the question "remains" unanswered...for the time being ! Let us be more pragmatic and wait up until gold is effectively taken out of its monetary attachments.

Then, it will be the right time to bring the "gold-money" subject back into the forefront.
The same reasoning goes about the ongoing building of the oil-currency.

Realize how *very little* it will take to let the general public "associate" gold with wealth, again !!! This is the whole (pragmatic) clue, Ari.

Let me refer again to oil. Watch and realize how the spirits are changing about the "real" oil-fundamentals.
Not the evident fact of getting closer to peaking oil, but about the less evident fact of oil-currency.

Yesterday, I got some significant news from the field : Koreans "wish" to trade with the EU, not in dollars anymore...but in euro ! And this change was not purely a matter of exchange rate !!!

Conclusion (right or wrong-?) : We better stop pulling the (unproductive-?) attention on the gold-money phenomenon and let the general public accumulate goldmetal for the (their) pure price-reasons. Let's watch how all the gold-papers are evolving "against" the metal ! Who is/can produce a reliable flow of profit with gold-paper-derivatives or with the speculation on goldmine paper !? Do you follow this reasoning ? Thoughts ?

Belgian@ 986#1285571/28/05; 02:03:46

It shouldn't surprise you that the cartels in the financial industry can predict prices, far into the future ('07) !!! It is them who are "making" the markets ! Period !
The realities often go much further than one's possible fictions. Think about the holocost as an example out of many others.

968@ Towncrier#1285581/28/05; 02:54:43

Do you have any knowledge that the US Treasury is conducting its own Open Market Operations next to the Federal Reserve in order to influence the money supply ?
968@ Belgian#1285591/28/05; 03:11:43

OK, but how can they take into account the oilprices, geopolitical events,... over such a long period of time ?

BTW, here's an article you are going to like :

Belgian@ 968#1285601/28/05; 04:32:26

Very brief (incomplete) reaction : What happened with IRs (and goldprice) since the ATHs of 1980 at present !? Do you really think that this "linear" move (rechtlijnige eenparige beweging) is a "market-economy" effect !!!-???
If so, think again, Sir.

Today, everything that happens with the oilprice "must" suddenly be associated...with "peak" ! It is NOT oil...but the "dollar" that "peaked" ! All the rest is noice for our entertainment and distraction !!!
Print the dollar-index chart from its 1985 ATH at present !!! And answer your question with your own conclusion of what is behind this linear move of 20 full years ! Astamblief.Dada.Kgon nu kommisches doen in den Aldi.

PH in LA; 08:17:16

"...the economy: It's going to go very bad, folks. You know, if you have not sold your stocks and bought property in Italy, you better do it quick. And the third thing is Europe -- Europe is not going to tolerate us much longer. The rage there is enormous. I'm talking about our old-fashioned allies. We could see something there, collective action against us. Certainly, nobody -- it's going to be an awful lot of dancing on our graves as the dollar goes bad and everybody stops buying our bonds, our credit -- our -- we're spending $2 billion a day to float the debt, and one of these days, the Japanese and the Russians, everybody is going to start buying oil in Euros instead of dollars. We're going to see enormous panic here. But he could get through that. That will be another year, and the damage he's going to do between then and now is enormous. We're going to have some very bad months ahead." Seymour Hersh. from: "We've been taken over by a Cult."

@ All: A couple of days ago, our own fine poster, Belgian, remarked that many of the original members of the forum from the old days have disappeared. But perhaps some of us have not disappeared as completely as it might appear. In my own case, I read everything that is posted here, every day. I no longer comment, though, because the root causes of all that is going sour in our world is so much bigger than what is allowed here on this forum.

Nothing but a few oblique references to "the political" are allowed to sully the purity of our "gold discussion". But such restrictions eventually close off the discussion and become a political stand in themselves. It becomes a form of tunnel vision. Sure, we can still hope to glimpse a little bit of truth through the cracks between our fingers, as we keep our hands held tightly over our eyes to preserve the board's political correctness.

And then a guy like Seymour Hersh goes and tells it like it is.


(Take a look at the URL!)

R PowellPredictions // Belgium // 968#1285621/28/05; 09:17:43

Belgium: do you really believe that the head of JPMorgan's global metals strategy can predict the POG (or of anything for that matter) for the year 2007?

Your answer to 968's partial link quote...

"It shouldn't surprise you that the cartels in the financial industry can predict prices, far into the future ('07) !!! It is them who are "making" the markets ! Period !"

Bloomberg news (and many others) reports opinions every day from financial and commodity analysts the world over. I read volumes of numbers, facts, and opinions based on technical and fundamental considerations and have not yet found anyone who can predict anything with any degree of certainty. Even the best are only right sometimes and, at the same time often wrong on other things. Believe me, I have looked for the holy grail and found that it does not exist. I never really thought it did but I'm always searching, trying to increase my odds of profiting from the game. It wouldn't only surprise me if JPMorgan's analysts could correctly predict future would shock me.
I'm sure a survey of price predictions from JPMorgan and other similar financial houses would show no clear cut consensus. For every long position there is a short position. The price reflects the balance of opinions...there is always a balance between the current shown in the price.

Perhaps I don't share your faith in the ability of OR even the existence of such "cartels" when you use the word "cartel" to imply anyone with such unquestionable control. As much as the financial giants (seen or unknown) in this world would like to possess such, the forces needed are not yet at their disposal (imho). Cartels DO exist. I'm not disputing that. I tend to think of them as pools of money great enough to absorb the combined financial power of many less-well financed players. I just still have faith in the invisible hand and faith that the government(s) of the world will never attain the degree of knowledge and competency needed to control (much less predict) future prices other than on a very small basis and over a very small time frame.

I offer this in the interest of a balance of opinions and to instigate thought + discussion only. Please don't interpret my disagreement as anything other than what it is...just another opinion. ;>)

Great Albino BatPH in LA#1285631/28/05; 09:32:17

I agree completely. That's why I am staying away.

Too bad. But, we all make mistakes.


R PowellPH in LA#1285641/28/05; 09:39:56

Your absence, along with many others, has been sadly noticed, at least by me. I'll have to agree with your thoughts that there is a great pressure here to restrict commentary to only gold related subjects. The other extreme is that the forum is overwhelmed with political, religious and moral rants. If only a reasonable balance could be maintained!

Over the years I've also keep in mind that "trading" news and opinions are also not welcome and have severely limited my own comments in this regard to only disputing some "trading" opinions (often presented in the guise of facts) that I believed were very misleading if not entirely false. Again, a fine line must be tread so that the uniqueness of this forum doesn't evolve into simply short nondescript trading banter. There are other forums for that.

Lastly, I have been saddened by the lack of discussion contrary to what I perceive as an overwhelming consensus of opinion that gold should/ought/must be perchased ONLY in physical form and further, that most (all?) paper investments are not only doomed BUT also somehow stupid and unethical and supportive of some evil, unseen force which exists for the sole purpose of surpressing the POG. That price btw, bottomed out around $252/ounce many years ago and is now around $420-$430 so I guess the "cartel" has not been doing too well in recent years.

Anyway, as always, just one man's opinion. And, I, for one, would like to hear more from you (and others) as I value different opinions. I hope you and yours are all well! As for posting...Go for it...just express your thoughts with the central focus around gold...OR SILVER!!

MKPH in LA#1285651/28/05; 09:44:02

I take your criticisms to heart. Having come of age in the rough and tumble of political and economic discourse myself over a number of years, I do not shy away from a good give and take on the issues of the day.

Here's the problem though: Where do you draw the line?

It isn't long after you open the door that it becomes a floodgate. One side is asking that you remove the posting privileges of the other. The subject of gold is lost in a sea of political hyperbole from both sides, and the discussion sooner or later descends into name calling, ethnic slurs and generally destructive dialogue. We've both seen it over the years. The question is "Do we want to expose ourselves to that danger here?" Beyond that you get various groups posting long treatises and diatribes on whatever political/social/economic/environmental/cultural theory they feel we should all read. Not to speak of the various commercial promoters, et al. In the past, here at THIS forum I have seen posters drift off for days on subjects that have little to do with the purpose of this forum. How do you avoid that? Who's the arbiter as what is useful and what is not? Soon we become just another chat room where anything goes, but NO ONE reads. The serious posters leave and you're left with a collection of wingnuts bantering back and forth all day long about whatever triviality traverses the grey matter.

I've thought about opening the floodgates. Even granting a general amnesty to all but our most eggregious offenders, but on the other hand, is that where we want to be?

We have had many long discussions on this subject and discussed various possibilities including an approved poster list -- a group of posters proven to be able to handle the stress of debate without losing conrol of themselves. We scrapped the idea as being generally arbitrary and unfair. We even entertained the idea of everyone posting under their real name - a situation which would force people to be careful of what they say, but then what about those who need anonymity because of the position they hold in the wider world. In the end, no matter what proposals we entertain, we always come up short because the fruits of a disciplined approach outweigh the risks of letting it go. After all, USAGOLD in the end is a business enterprise and this forum can form the basis of perception on what this firm is about.

I am happy to listen to ideas from the Table on this subject. It's not really a matter of whether or not we would like to have an open gold-centric debate. We would. It's a matter of whether or not it would destroy the forum.

I would like to hear some opinion from our posters. I would also like to hear from the lurkers.

One idea I've had is to start a program in the tradition of talk radio where we have open forum on certain days. On open forum days the rules of civil discourse, and the rules of the forum with respect to the treatment of our fellow posters remains enforced, but we allow the discussion to ramble within more loosely defined bounds. Those bounds would be loosely defined in the beginning with the proviso that we could add restrictions if necessary based on the way things evolve. One risk you run here is some very good poster loses his or her cool for whatever reason and ends up losing their posting privileges. That, whenever it happens, is a loss to us all. I can assure you though that this will happen.

So, my friends, here's your chance. Let's hear what you have to say. . .I would like to put the subject to rest however by Sunday noon Forum Time.

As always, it's good to hear from you, PH.

geSir Goldendome msg#: 128545#12856601/28/05; 10:11:30

Let me try to illustrate my point with an example:

Let us say gold is increasing at a rate of 10% per month. The trend is established, and I become quite convinced that it shall continue like that in the foreseeable future. Since everyone is in the same mood, there is a very liquid market for gold coins, and bid-ask spreads are small. If the official market lacks these qualities, a black market would be established.

At the beginning of each month, when I receive my salary, I convert them into gold coins. My intention is to hold them until a spending need arises and convert them into paper for spending.

Suppose I need to buy shoes. I go to the shop to learn the shoe prices, so that I may sell the appropriate amount of coins to obtain some paper to buy the shoes. The smart shopkeeper, becoming suspicious of my intentions, initiates a dialogue. Since he is in the same mood as everyone else is, he would also be thinking of buying gold coins with the paper received from the sale. He suggests that we should just exchange gold coins with shoes, bypassing the need for each of us going to coin dealer. Deal is done. Coin circulates.

jenikaForum & Posters#12856701/28/05; 10:41:55

Im one of the lukers - even though Im ashamed to admit it. I have been visiting this forum now for mm about two or three years every day and have posted twice.
The reason I dont post is because I dont feel I have anything to offer and still have a lot to learn. Iam simply a housewife with no economic training or investment knowledge behind me. (it took me ages to get my head around the gold carry trade). So that, in a nutshell is why I keep quiet.
I have to say this is the MOST polite forum as well as being a true eye opening education and I would like to thank everyone for that.
As for political threads, I actually like to see it from time to time when its approriate because it IS part of the whole picture and cannot be avoided. There also comes a time when posters/lurkers need more policial/economic information because its needed to help understand the whole picture, as our knowledge grows so do our questions.
I would love to see a "what if" topic day. ie. "What if Russia joined the EU" People could post why it wouldnt happen or the ramifications and that would still be related to gold. Or just for fun a conspiracy day where we can post our theories.
Thank you to this board for encouraging me to seek out more information - Ive actually read our reserve banks annual reports, I now question news reports and many other things. Thanks to blackblade who inspired me to start my vegetable patch and to Ari who keeps encouraging me to get some gold.
phew ok back to lurking.
After this post I bet your all glad I dont post huh. :)

liferLurker response to Forum discipline#12856801/28/05; 11:01:56

I have been a lurker for several years and have posted a couple of times to obtain information from the learned participants. I have enjoyed the postings and have appreciated the discipline of keeping the posters focused on the intent of the forum. When a post loses its connection to the intent of the forum I find it becomes a waste of my time to read it. I go to the site for the knowledge and expertise from the Table and not for ramblings. Thanks to all of my favorite posters--you know who you are!
TownCrier968, Treasury ops#12856901/28/05; 11:05:59

"Do you have any knowledge that the US Treasury is conducting its own Open Market Operations next to the Federal Reserve in order to influence the money supply ?"

With the Treasury resides the overall responsibility for U.S. international financial policy, and operations are implemented through the Federal Reserve System's Open Market Account manager. At such time as the Treasury directs that an operation be put into effect, the usual practice of the Federal Reserve is to match, dollar-for-dollar from its own account, the size of the Treasury's "contribution" to the operation. It seems reasonable to characterize this as being "next to", as you put it.


R PowellJenika#12857001/28/05; 11:08:51

No, I'm not happy if you don't post because you feel unqualified to do so. If you've nothing to add or ask, okay but economic credentials are NOT required.

As for myself, I never took an economics course in my life...high school or college. I pour and finish concrete flatwork for a living (pretty basic and mundane employment) and whatever economic knowledge or sense I possess was acquired entirely in an autodidactic fashion. Some might say, "Yah, Rich, and it shows." ;>) but perhaps some pragmatic, down to earth common sense, every now and again, offers some balance when the discussions reach the edges of disecting trivial points or definitions. Every one's thoughts have value and I hope we never reach the point where basic questions and opinions based on some fact are disdained. The game is afoot and the situations and conditions are ever changing...sometimes the answers change too!

Great Albino BatMK - some thoughts on the management of this great Forum#12857101/28/05; 11:39:55

I quite realize the problem of keeping some order within the discussions on this Forum.

Gold is like a weathervane that shows which way the wind is blowing. But the wind that is blowing locally, is only a part of a massive weather system.

We can hardly understand what the movement of the weathervane is telling us, if we are not aware of the movement of the giant weather system.

That is why, discussion on this Forum tends to digress and wander off, apparently off-topic. What digressions mean, is that we are studying the vast weather system for the moment, and calculating its implications on local wind.

I am of the opinion, that a more ample acceptance of "off-topic" comments, especially POLITICAL comments, enriches our understanding of factors affecting gold and which will influence its future. Gold is a political metal!

This does not include insulting other posters, or for instance, going off into whether obligatory seat-belts constitute an infringement of our liberties. Nor do I think it correct to discuss prices of particular gold mining stocks. That is not what the board is for.

Where do you call the line? That is a problem for you, MK. I want your Forum and business to prosper, certainly. I hope you can find a way to permit more latitude, without turning this Forum into the CPM Bar & Grill!

Sincerely, the GAB

Buongiorno!opening the gates#12857201/28/05; 11:41:35

@Mk--To your...."Where do you draw the line?" I would add,"And who gets to draw it?" Good question. I personally think that whoever has his economic neck exposed gets to do both. Somebody who wants their own "rant and rave" site can establish that or else trundle on over to

That said, we have had great results, imho, from topics opened for general discussion from time to time, usually for one of MK's contests. We should not always dip into his pockets for a prize.....But the same general rules should apply.

Past that, just color me "If it ain't broke, don't fix it!" Some may drift away, and I shall miss them and wish a speedy return. But how many would we lose if this wonderful forum turned into a big cat fight?

My plate is totally full with questions of fact and opinion regarding gold. It runneth over. The great and wise minds at this table give me much to digest. Please don't tempt me with politics or you shall surely regret it! (Now I must go practice keeping my eye on the ball!!)


YGMPotlitics and Other Off Topic Discussions...#12857301/28/05; 12:09:27

IMHO...When a certain political decision has an effect adverse or otherwise on the POG or Fiats/Markets I would say that comes under the unbrella of Forum guidelines...What I cannot personally stand nor bother to read is opinions/diatribes on Political Leaders themselves...As I have said previously, Politics and Religion are two highy sensitive and emotional topics...Any kind of Political bashing from the veiwpoint of personal opinions doesn't have any place here and serves no purpose other than to inflame those with opposite opinions...Let someone post here w/ anti Gold statements and watch the fireworks mixed with calm salient rebuttals pour forth, and you can see these same human emotions at work...USA Gold Forum is just fine...Some posters take sabbatacal leaves but most all return if Gold is their prime interest...Even when it gets quiet here there are few posts not worth the time to read and absorb...As was previously stated.."If it Ain't broke, Don't fix it"...YGM
USAGOLD / Centennial Precious Metals, Inc.... In Order to Form a More Perfect Union... (between You and Your Savings)#12857401/28/05; 12:09:51">Arm yourself with knowledge
Cavan ManPH in LA#12857501/28/05; 12:12:36

Cheers to my old adversary....Kind regards! I listened to the interview--c'est vrai mon ami! The subject of gold cannot be discussed without reference to political realities and all they PORTEND.
Gandalf the WhiteWOWSERS !!! Look at the US$ Chart today !!#12857601/28/05; 12:28:14

I got serious WHIPLASH between 8 am and 11 am TODAY !
From 83.56 DOWN to 83.25 in about forty minutes, THEN UP to 83.84 in a little over a hour, then DOWN to slightly below the starting point at about 83.50 in a little over a hour !
Sir Rimh --Is this the THIRD and LAST attempt ?

TopazGold, Oil etc. #12857701/28/05; 12:50:55

Our BPoG @ a shade under B356 continues to inch northward. The "red" Zone appears to be upward of B360, ...worth keeping an eye on.
Long Yield has reached the end of it's tether here imo and next week should see a quick move ^5 ...if past history is any indicator.
Oil is "finally" giving some back. The Oil/DX Chart hasn't broken in either direction significantly yet, so next week could also be a defining week with PoO.
Dollar? I think it's done "appreciating" for the moment. An across-the-board Yield increase would see it resuming it's upward trajectory methinks.

We watch!

Aragorn IIIWords from the woodwork#12857801/28/05; 13:05:55

Please know that disappearance may bear no connection with conditions of departure or absence.

got gold?

Topaz...and of course, then there's Comex. #12857901/28/05; 13:17:32

Tuesday next see's Feb going "current". I'd be expecting to hear over the W/E some "Gold" related badmouthing (Sales or whatnot) to defuse the perceived Squeeze.
CoT hasn't updated as of this, we wait with bated breath.

AIII, Salutations;-)

BelgianSuggestion : MK#12858001/28/05; 13:40:31

Each and every post must be directly or indirectly related to gold in a serious (reasonable) way. The poster should have the responsibility to clearly state how his/her subject relates to gold. The first and most important question, that I'm constantly asking myself before posting, is...does the posted subject/opinion/ seriously relevant in relation with gold. Will the reader "see" (understand) this gold connection ? And can I bring my opinion, without offending clients or future clients of MK's business.

But then another delicate difficulty pops up : Will this forum become a platform for goldmine + gold-derivatives speculators (promotors) !? Or will it stick to goldmetal and its pricing ? (smile Rich)

Speaking for myself,...I do pay great attention in particular to the questions/remarks from new posters (silent readers). Unfortunately these people don't realize how important they are in the thinking process of the oldies. On top of that, it is very interesting to know, how former heavy posters have evolved in their thinking about gold, during their long periods of abscence. (smile PH - LA)

CoBra(too)Here's what the Privateer has to say:#12858101/28/05; 13:43:28

"In any discussion of the future of Gold, or of the price of Gold, the first thing that must be realized is that Gold is a POLITICAL metal. In the true meaning of the word, its price is "governed".

This is so for the very simple reason that Gold in its historical role as a currency is fundamentally incompatible with the modern worldwide financial system.

Up until August 15, 1971, there has never in history been an era when no paper currency was linked to Gold. The history of money is replete with instances of coin clipping, printing, debt defaults, and the other attendant ills of currency debasement. In all other eras of history, people could always escape to other currencies, whose Gold backing remained intact. But since 1971, there is NO escape because NO paper currency has any link to Gold.

All of the economic, monetary, and financial upheaval since 1971 is a direct result of this fact.

The global paper currency system is very young. It depends for its continued functioning on the BELIEF that the debt upon which it is based will, someday, be repaid. The one thing, above all others, that could shake that faith, and therefore the foundations of the modern financial system itself, is a rise (especially a sharp rise) in the U.S. Dollar price of Gold"!

To keep fundamental political discussion out of a great gold web-site may eventually become like letting one armed bandits, er' sorry economists run the show. That's what the ilk of this breed have done for too long anyway - 'on one hand ...

I too have listened to Seymour Gersh - and what I've come away with was not so much the cult bashing - more the eventual and probably gradual repercussions the rest of the world has to be thinking about in order to preempt getting swept away by an equal Tsunami as the Reserve Currency Fiat legal - maybe now illegal - tender has in store for all.

Short term I'm really concerned by what's going in the ME oil rich countries and even more concerned as to what may happen to neighbors and relatives in particular Canada and Latin America. These resource rich countries seeking more and more their own destiny. Some like Canada to the beginning chagrin of their own government - or is it fear of repercussions from big brother?

Well as one can see with this small excercise - where do you draw the line. MK, that's a mammoth task and unfortunately you'll be left with the decision. As much as I respect you, I don't envy you for this one.

Sincere regards cb2

NedMK#12858201/28/05; 13:52:02 I glad I'm not the recipient or the originator of todays 'political' mud-slinging contest.

I admit that I have walked the edge in recent history but thanks to posters like Ag Mountain and YGM I have learned a lesson. It is one thing to post about POLICY but it is another to post about PERSONALITY.

ALthough I disagree with most (if not all) of Mr. Bush's foreign and energy policies I don't have to make it personal. There is no need to insult the man.

I hope Ag Mountain and YGM have seen and approve of the new and improved Ned!

I think if we all tone it down & keep it within definable context we should be ok. To some this may sound horribly hypocritical coming from me but hey, I'm learning.

I'm a cementhead but at least a little porous.

Thanks and hope that you are well. (Very) Belated Happy (and properous) New Year.


Ag Mountain@Ned#12858301/28/05; 14:11:28

I'm also a cementhead but at least it's handy sometimes for knocking open doors. Shattered timbers and bent hinges are the hallmark of my trail.
Dollar Bill.,.#12858401/28/05; 15:15:33

PH, your source site had this on it, which opens up the whole can of worms about...are the politicians that stir us all up to oppose -thier- political enemies, do those politicians prove us to be fools actually, because they themselves are not standing on grounds that you can count on.
They fire us up, with help of the various medias, medias that are not our freinds, but our indoctrinators, and we go off and "share" our wonderful new essential new realizations with family and coworkers, and yes, forum mates.
Meanwhile, guys that come over for a card game and laughs are now asked to withstand the withering blasts of our new alliance to some political view.`

On the forum, maybe the laughs are few, but at least the cards laid on the table are from a persons own learning process that is built not by lying political media, but other posts, other financial sources (which also can of course be intentionally false!), and we wrestle it out.

Usually with political posts, it starts off financial, then, as I read on, it quickly veers into some hatchet job analysis that is just a proclamation really, a proclamation
that paints a dividing line on some issue, and the choice presented is either I agree with the poster that his side is smart, or I am a total idiot and support all the issues as he paints them that the --other side-- according to him, holds.
It insults me the other forum members.
Some of us here might have great financial sense, and yet no other apparent redeeming features!

You know, there have been REALLY scathing indictments of the political actors of our world here but you could easily miss it because they werent worded like political sophomoric media crap that is loaded with condescending bullship and lies and smears that end up here when politics is allowed.
Some posters just will not grow thier political thinking.
They become like a human typing catapult. Launching flaming attacks, not capable of discussion.
They are reasonable about finacial issues however!

I did go through a phase where I thought that it was good that some folks were here that no doubt kept others from being here. My reason was, I was happy with some of the posters here and this way the forum stayed small.
Now that I think of it, those posters werent actually political as much as ranters. With the harsh tone that comes it seems from being important.
You ever see that guy who discusses politics while singing and playing piano?
Try posting your political thoughts with humor like he uses.
You may give political posts here a real chance.
Otherwise, I am sure counterpoint has a link to a forum;)

Cavan ManPH in LA#12858501/28/05; 15:18:58

At the end of the transcript/monologue, Mr Hersh said, ...."when they start pricing oil in Euros"... The entire transcript should be posted here!

We've effectively declared war on many "regimes" in the world post the 2005 inaugural gala. There will be no consequent effect on POG? Yes, Mr. Hersh calls a cult a cult and a spade a spade.

YGMNed & Ag Mtn....From Cementhead #3...Me!#12858601/28/05; 15:23:01

Good thing we don't use our faces on those bastions of the elite...Nice summation re "Policy not Personality"...
Beside if I myself got into Rants about our Political Leaders and their Minions, I'd have to use some very filthy expletives and then this door would slam shut...(the Castle has very thick flame proof Oak Doors)...YGM

GoldiloxCredit vs. "cash"#1285871/28/05; 15:28:07

My response to GE's comments to Ari #128539 (yesterday)

"However, most retail transactions are barter like – I give the money, he gives the stuff; the transaction ends. There is no need of a credit contract."

It might be interesting to compare the amount of retail transactions done with pure cash (gov't credit) vs. credit cards (personal credit), but actually they are both credit transactions that act to thread together unrelated "barter" transactions.

i.e. I buy groceries with paper credit and the grocer pays his employees with a transfer of that credit, who then buy their groceries, ad nauseum.

Bottom line - monetary paper is a "concept" that measures one's "credit" - not of value by itself.

PM's are multi-use commodities with perceived value as:

1) a currency (not common anymore)
2) a store of wealth (still very pervasive)
3) artistic-physical beauty (the main non-monetary use)

The perception of value is still subjective, but it has historically outlasted all other measures.

USAGOLD Daily Market ReportPage Update!#1285881/28/05; 15:42:27">
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.

Friday market excerpts

Comex gold futures endured a turbulent session Friday and forged a $3.60 range before settling 30 cents lower as movements in the foreign exchange markets buffeted the thinly traded bullion arena. The most-active April contract settled at $428.10.

Chart resistance in the $428 to $430 zone capped the market as traders wrapped up final contract rollover, while the dollar rose on lower oil prices and positioning before a busy week next week. Newly most active April contract gold slipped 30 cents, nearby February lost 50 cents.

April gold got off to a robust start and made a stretch for the $430 level early on speculative and trade buying ahead of the release of U.S. Gross Domestic Product data.

However, bullion bank sales into that strength kept the $430 goal out of reach before a bout of renewed strength in the U.S. currency mid-morning substantially increased the selling pressure in gold and drove April prices to their intraday low.

From a technical perspective, April prices have now put in three weeks of consolidation above the $420 level in the wake of their early January fall and now could be poised to make upside probes in the days and weeks ahead, a dealer with U.S. commission house said.

"We've put in a bottom and have seen physical demand firmly underpin this market now for weeks, so a push higher is certainly possible from here," he said.

But with several major events on the agenda for next week including U.S. President George W. Bush's State of the Union address, the Federal Reserve's decision on interest rates and the convening of the Group of Seven Finance Ministers' meeting in London, gold will likely remain strongly influenced by external factors.

-----(see url for 24-hr newswire, market prices)----


iShares Comex Gold Trust Begins Trading On AMEX-- American Stock Exchange

New Turkish lira causes surge of activity-- FX Week

Libya to unveil vast economic reform-- The Peninsula - Business News

India asks UN to play its role in global economic agenda-- The Financial Express

U.S. workers fight uphill battle against inflation -- Reuters

Asian governments hold the key to dollar's future-- FX Week

ShantiMK#1285891/28/05; 16:13:58

First, you and your staff need compliments for hosting this unique GOLDEN forum on this planet !

100 men 100 wishes, know for sure that you can't serve them all.
Ofcourse everybody is on a certain level of knowledge in the piramid, therefore readers needs or amuses the helicopterviews who are posted here to learn something. For some they maid be relevant, while for others it isn't